EXHIBIT 4.2
CONFORMED COPY
DUKE ENERGY CORPORATION
TO
JPMORGAN CHASE BANK
Trustee
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Twelfth Supplemental Indenture
Dated as of May 7, 2003
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1-3/4% Convertible Senior Notes due 2023
TABLE OF CONTENTS(1)
Page
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ARTICLE 1
1-3/4% Convertible Senior Notes Due 2023
SECTION 1.01 Establishment.................................................1
SECTION 1.02 Definitions...................................................2
SECTION 1.03 Payment of Principal and Interest.............................6
SECTION 1.04 Denominations.................................................8
SECTION 1.05 Global Securities.............................................8
SECTION 1.06 Optional Redemption...........................................8
SECTION 1.07 Purchase at the Option of the Holder Upon a Fundamental
Change......................................................9
SECTION 1.08 Purchase of Senior Convertible Notes at the Option of the
Holder.....................................................10
SECTION 1.09 Further Conditions and Procedures for Purchase Upon a
Fundamental Change and Purchase at the Option of the
Holder.....................................................11
SECTION 1.10 Conversion of Senior Convertible Notes.......................15
SECTION 1.11 Additional Events of Default.................................25
SECTION 1.12 Amendments; Waiver...........................................25
SECTION 1.13 Register of Securities; Paying Agent; Conversion Agent.......26
SECTION 1.14 Calculations in Respect of the Senior Convertible Notes......26
SECTION 1.15 Tax Treatment................................................27
ARTICLE 2
Miscellaneous Provisions
SECTION 2.01 Recitals by the Corporation..................................27
SECTION 2.02 Ratification and Incorporation of Original Indenture.........27
SECTION 2.03 Executed in Counterparts.....................................27
Exhibit A Form of 1-3/4% Convertible Senior Note
Exhibit B Certificate of Authentication of 1-3/4% Convertible Senior Note
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(1) This Table of Contents does not constitute part of the Indenture or have
any bearing upon the interpretation of any of its terms and provisions.
THIS TWELFTH SUPPLEMENTAL INDENTURE is made as of the 7th day of May 2003,
by and between DUKE ENERGY CORPORATION, a North Carolina corporation, having its
principal office at 526 South Church Street, Charlotte, North Carolina 28202
(the "Corporation"), and JPMORGAN CHASE BANK (formerly known as The Chase
Manhattan Bank), a New York banking corporation, as Trustee (herein called the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Corporation has heretofore entered into a Senior Indenture,
dated as of September 1, 1998 (the "Original Indenture"), with The Chase
Manhattan Bank, as Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as may be amended and supplemented to the date
hereof, including by this Twelfth Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time
be established in accordance with the provisions of the Indenture and the terms
of such series may be described by a supplemental indenture executed by the
Corporation and the Trustee;
WHEREAS, the Corporation hereby proposes to create under the Indenture
an additional series of Securities;
WHEREAS, additional Securities of other series hereafter established,
except as may be limited in the Indenture as at the time supplemented and
modified, may be issued from time to time pursuant to the Indenture as at the
time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery
of this Twelfth Supplemental Indenture and to make it a valid and binding
obligation of the Corporation have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
1-3/4% CONVERTIBLE SENIOR NOTES DUE 2023
SECTION 1.01 Establishment. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the
Corporation's 1-3/4% Convertible Senior Notes due 2023 (the "Senior Convertible
Notes").
There are to be authenticated and delivered $700,000,000 principal amount
of the Senior Convertible Notes (plus up to an additional $70,000,000 principal
amount of Senior Convertible Notes upon exercise by the Underwriters of their
over-allotment option pursuant to the Underwriting Agreement), and no further
Senior Convertible Notes shall be authenticated and delivered except as provided
by Section 304, 305, 306, 906 or 1106 of the Original Indenture, the
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last paragraph of Section 301 thereof, Section 1.09(f) hereof and Section
1.10(c)(iv) hereof. The Senior Convertible Notes shall be issued in fully
registered form without coupons.
The Senior Convertible Notes shall be in substantially the form set out in
Exhibit A hereto, and the form of the Trustee's Certificate of Authentication
for the Senior Convertible Notes shall be in substantially the form set forth in
Exhibit B hereto.
Each Senior Convertible Note shall be dated the date of authentication
thereof and shall bear interest from the date of original issuance thereof or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for.
SECTION 1.02 Definitions. The following defined terms used herein shall,
unless the context otherwise requires, have the meanings specified below for
purposes of the Senior Convertible Notes. Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the
Original Indenture.
"Applicable Five Day Trading Period" means, with respect to any interest
period in which Contingent Interest may be payable, the five Trading Days
immediately preceding the first day of such interest period.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.
"Common Stock" means the common stock, no par value, of the Corporation.
"Contingent Interest" has the meaning provided in Section 1.03(b).
"Contingent Payment Regulations" has the meaning provided in Section 1.15.
"Conversion Agent" means the Trustee or such other office or agency
designated by the Corporation where Senior Convertible Notes may be presented
for conversion.
"Conversion Date" has the meaning provided in Section 1.10(c)(i) hereof.
"Conversion Price" means $1,000 divided by the Conversion Rate, initially
$23.59 per share of Common Stock.
"Conversion Rate" has the meaning provided in Section 1.10(b) hereof.
"Corporation Purchase Notice" has the meaning provided in Section 1.09(a)
hereof.
"Corporation Purchase Notice Date" has the meaning provided in Section
1.09(a) hereof.
"Current Market Price" per share of Common Stock on any day means the
average of the daily Last Reported Sale Price for the five consecutive Trading
Days selected by the Corporation commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution
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requiring such computation. As used herein, the term "ex date," when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on the exchange or in the market in which the
security trades without the right to receive such issuance or distribution.
"Expiration Time" has the meaning provided in Section 1.10(g)(vi) hereof.
"Fundamental Change" will be deemed to have occurred at the time after
Original Issue Date that any of the following occurs:
(i) a "person" or "group" within the meaning of Section 13(d) of the
Exchange Act other than the Corporation, its subsidiaries or its or their
employee benefit plans, files a Schedule TO or any schedule, form or
report under the Exchange Act disclosing that such person or group has
become the direct or indirect ultimate "beneficial owner," as defined in
Rule 13d-3 under the Exchange Act, of the Corporation's common equity
representing more than 50% of the voting power of the Corporation's common
equity entitled to vote generally in the election of directors; or
(ii) consummation of any share exchange, consolidation or merger of
the Corporation or any sale, lease or other transfer in one transaction or
a series of transactions of all or substantially all of the consolidated
assets of the Corporation and its subsidiaries, taken as a whole, to any
person other than the Corporation or one or more of its subsidiaries
pursuant to which the Common Stock will be converted into cash, securities
or other property; provided, however, that a transaction where the holders
of the Corporation's common equity immediately prior to such transaction
have directly or indirectly, more than 50% of the aggregate voting power
of all classes of common equity of the continuing or surviving corporation
or transferee entitled to vote generally in the election of directors
immediately after such event shall not be a Fundamental Change.
A Fundamental Change will not be deemed to have occurred in respect of
either of the foregoing, however, if either:
(i) the Last Reported Sale Price of the Common Stock for any five
Trading Days within the 10 consecutive Trading Days ending immediately
before the later of the Fundamental Change or the public announcement
thereof, equals or exceeds 105% of the Conversion Price of the Senior
Convertible Notes immediately before the Fundamental Change or the public
announcement thereof, or
(ii) at least 90% of the consideration, excluding cash payments for
fractional shares, in the transaction or transactions constituting the
Fundamental Change consists of shares of capital stock traded on a
national securities exchange or quoted on the Nasdaq National Market or
which will be so traded or quoted when issued or exchanged in connection
with a Fundamental Change (these securities being referred to as "publicly
traded securities") and as a result of this transaction or transactions
the Senior Convertible Notes become convertible into such publicly traded
securities, excluding cash payments for fractional shares.
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For purposes of this Twelfth Supplemental Indenture the term capital
stock of any Person means any and all shares (including ordinary shares or
American Depositary Shares), interests, participations, or other
equivalents however designated of corporate stock or other equity
participations, including partnership interests, whether general or
limited, of such Person and any rights (other than debt securities
convertible or exchangeable into an equity interest), warrants or options
to acquire an equity interest in such Person.
"Fundamental Change Purchase Date" has the meaning provided in Section
1.07(a) hereof.
"Fundamental Change Purchase Notice" has the meaning provided in Section
1.07(b)(i) hereof.
"Fundamental Change Purchase Price" has the meaning provided in Section
1.07(a) hereof.
"interest" includes Contingent Interest, if any.
"Interest Payment Date" means each May 15 and November 15 of each year,
commencing November 15, 2003.
"interest period" means any six-month period from May 15 to November 14
and from November 15 to May 14, as appropriate, commencing with the six-month
period beginning May 15, 2007.
"Last Reported Sale Price" of the Common Stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq National
Market. If the Common Stock is not listed for trading on a U.S. national or
regional securities exchange and not reported by the Nasdaq National Market on
the relevant date, the "Last Reported Sale Price" will be the last quoted bid
price for the Common Stock in the over-the-counter market on the relevant date
as reported by the National Quotation Bureau or similar organization. If the
Common Stock is not so quoted, the "Last Reported Sale Price" will be the
average of the mid-point of the last bid and ask prices for the Common Stock on
the relevant date quoted by each of at least three nationally recognized
independent investment banking firms selected by the Corporation for this
purpose.
"Original Issue Date" means May 7, 2003.
"Put Date" has the meaning provided in Section 1.08(a) hereof.
"Put Notice" has the meaning provided in Section 1.08(b)(i) hereof.
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"Purchase Price" means an amount equal to the principal amount of the
Senior Convertible Notes to be purchased plus any accrued and unpaid interest
(including Contingent Interest, if any) to but excluding the Put Date.
"Purchased Shares" has the meaning provided in Section 1.10(g)(vi).
"Record Date" means, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Stock have the right to
receive any cash, securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute, contract or
otherwise).
"Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on the 15th calendar day next preceding to such Interest
Payment Date (whether or not a Business Day).
"Redemption Date" has the meaning provided in Section 1.06(a) hereof.
"Redemption Price" has the meaning provided in Section 1.06(a) hereof.
"Senior Convertible Notes" has the meaning provided in Section 1.01
hereof.
"Special Record Date" has the meaning provided in Section 1.03 hereof
"Spin-off Market Price" per share of Common Stock of the Corporation or
the capital stock of, or similar equity interests in, a subsidiary or other
business unit of the Corporation on any day means the average of the daily Last
Reported Sale Price for the 10 consecutive Trading Days commencing on and
including the fifth Trading Day after the "ex date" with respect to the issuance
or distribution requiring such computation. As used herein, the term "ex date,"
when used with respect to any issuance or distribution, shall mean the first
date on which the Common Stock trades regular way on the exchange or in the
market in which the security trades without the right to receive such issuance
or distribution.
"Stated Maturity" means May 15, 2023.
"Tax Original Issue Discount" means the amount of ordinary interest
income on a Senior Convertible Note that must be accrued as original issue
discount for United States federal income tax purposes pursuant to Treas.
Reg. Sec. 1.1275-4.
"Trading Day" means (a) if the applicable security is listed, admitted for
trading or quoted on the New York Stock Exchange, the Nasdaq National Market or
another U.S. national or regional securities exchange, a day on which the New
York Stock Exchange, the Nasdaq National Market or such other national or
regional securities exchange, as the case may be, is open for business or (b) if
the applicable security is not so listed, admitted for trading or quoted, any
Business Day.
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"Trading Price" means the price of the Senior Convertible Notes as
determined by the Corporation as calculated in connection with Section 1.14. The
Corporation may determine the Trading Price based upon the average of the
secondary market bid quotations, as of any date of determination, per $1,000
principal amount of Senior Convertible Notes obtained by a bid solicitation
agent appointed by the Corporation for $10 million principal amount of Senior
Convertible Notes at approximately 4:00 p.m., New York City time, on such
determination date from three recognized securities dealers (none of which shall
be an Affiliate of the Corporation) in The City of New York (or such other place
that may be determined from time to time by the Corporation) selected by the
Corporation; provided, however, if (a) at least three such bids are not obtained
by the bid solicitation agent or (b) in the Corporation's reasonable judgment,
the bid quotations are not indicative of the secondary market value of the
Senior Convertible Notes as of such determination date, then the Trading Price
for such determination date shall equal (1) the Conversion Rate in effect as of
such determination date multiplied by (2) the average Last Reported Sale Price
of the Common Stock for the five Trading Days ending on such determination date,
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such Trading Days during such five Trading Day period
and ending on such determination date, of any event described in Section 1.10(g)
of this Twelfth Supplemental Indenture.
"Underwriters" means the several underwriters party to the Underwriting
Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated May 1,
2003, among the Corporation and Citigroup Global Markets Inc., J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated and Wachovia Securities,
Inc. as the representatives of the underwriters.
SECTION 1.03 Payment of Principal and Interest. (a) The principal of the
Senior Convertible Notes shall be due at Stated Maturity (unless earlier
redeemed or purchased by the Corporation). The unpaid principal amount of the
Senior Convertible Notes shall bear interest at the rate of 1-3/4% per annum
until paid or duly provided for, such interest to accrue from May 7, 2003 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for. Interest (including Contingent Interest, if any) shall be
paid semi-annually in arrears on each Interest Payment Date to the Person or
Persons in whose name the Senior Convertible Notes are registered on the Regular
Record Date for such Interest Payment Date. Any such interest (including
Contingent Interest, if any) that is not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holders on such Regular Record Date
and may either be paid to the Person or Persons in whose name the Senior
Convertible Notes are registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee
("Special Record Date"), notice whereof shall be given to Holders of the Senior
Convertible Notes not less than ten (10) days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange, if any, on which the Senior Convertible
Notes may be listed, and upon such notice as may be required by any such
exchange, all as more fully provided in the Original Indenture.
(b) In addition, contingent interest ("Contingent Interest"), if any,
will accrue on each Senior Convertible Note during any six-month period from May
15 to November 14 and from
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November 15 to May 14, as appropriate, commencing with the six-month period
beginning May 15, 2007, if the average Trading Price for each $1,000 principal
amount of the Senior Convertible Notes for the Applicable Five Day Trading
Period with respect to such interest period equals 120% or more of such
principal amount of Senior Convertible Notes. The amount of Contingent Interest
payable per $1,000 principal amount of Senior Convertible Notes in respect of
any such interest period shall equal 0.25% of the average Trading Price for each
$1,000 principal amount of the Senior Convertible Notes for the Applicable Five
Day Trading Period with respect to such interest period. Contingent Interest, if
any, will accrue from May 15 or November 15, as applicable, and will be payable
in the same manner, at the same times and to the same Persons as ordinary
interest. Upon determination that Holders of the Senior Convertible Notes will
be entitled to receive Contingent Interest during an interest period, as
promptly as practicable after such determination, the Corporation shall publish
a notice containing such information with respect to the payment of Contingent
Interest in a newspaper of general circulation in The City of New York or
publish such information on its web site or through such other public medium as
the Corporation may use at that time.
(c) Payments of interest (including any Contingent Interest) on the
Senior Convertible Notes shall include interest (including any Contingent
Interest) accrued to but excluding the respective Interest Payment Dates,
Redemption Date, Put Date or Fundamental Change Purchase Date, as the case may
be. Payments of interest (including any Contingent Interest) for the Senior
Convertible Notes shall be computed and paid on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest (including
any Contingent Interest) is payable on the Senior Convertible Notes is not a
Business Day, then payment of the interest (including any Contingent Interest)
payable on such date shall be made on the next succeeding day that is a Business
Day (and without any interest or payment in respect of any such delay) with the
same force and effect as if made on the date the payment was originally payable.
(d) Payment of principal of, premium, if any, and interest (including
any Contingent Interest) on the Senior Convertible Notes shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Payments of principal of,
premium, if any, and interest (including any Contingent Interest) on Senior
Convertible Notes represented by a Global Security shall be made by wire
transfer of immediately available funds to the Holder of such Global Security,
provided that, in the case of payments of principal and premium, if any, such
Global Security is first surrendered to the Paying Agent. If any of the Senior
Convertible Notes are no longer represented by a Global Security, (i) payments
of principal, premium, if any, and interest (including any Contingent Interest)
due at the Stated Maturity or earlier redemption or purchase of such Senior
Convertible Notes shall be made at the office of the Paying Agent upon surrender
of such Senior Convertible Notes to the Paying Agent and (ii) payments of
interest (including any Contingent Interest) shall be made, at the option of the
Corporation, subject to such surrender where applicable, (A) by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register or (B) by wire transfer at such place and to such account at a
banking institution in the United States as may be designated in writing to the
Trustee at least sixteen (16) days prior to the date for payment by the Person
entitled thereto.
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SECTION 1.04 Denominations. The Senior Convertible Notes shall be issued
in denominations of $1,000 and any integral multiple thereof.
SECTION 1.05 Global Securities. (a) The Senior Convertible Notes shall
initially be issued in the form of one or more Global Securities registered in
the name of the Depositary (which initially shall be The Depository Trust
Company) or its nominee. Except under the limited circumstances described below,
Senior Convertible Notes represented by such Global Security or Global
Securities shall not be exchangeable for, and shall not otherwise be issuable
as, Senior Convertible Notes in definitive form. The Global Securities described
in this Article 1 may not be transferred except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or to a successor Depositary or its nominee.
(b) A Global Security shall be exchangeable for Senior Convertible Notes
registered in the names of Persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Corporation that it is unwilling or unable to
continue as a Depositary for such Global Security and no successor Depositary
shall have been appointed by the Corporation within 90 days of receipt by the
Corporation of such notification, or if at any time the Depositary ceases to be
a clearing agency registered under the Exchange Act at a time when the
Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed by the Corporation within 90 days
after it becomes aware of such cessation or (ii) the Corporation in its sole
discretion determines that such Global Security shall be so exchangeable. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Senior Convertible Notes registered in such names as the
Depositary shall direct.
SECTION 1.06 Optional Redemption. (a) On or after May 20, 2007, the Senior
Convertible Notes shall be redeemable, in whole or from time to time in part, at
the option of the Corporation on any date (a "Redemption Date"), at a redemption
price equal to 100% of the principal amount of the Senior Convertible Notes to
be redeemed plus any accrued and unpaid interest (including Contingent Interest,
if any) on the principal amount to be redeemed to but excluding the Redemption
Date (the "Redemption Price").
(b) The Corporation shall notify each Holder of the redemption pursuant
to Section 1104 of the Original Indenture.
(c) If any Senior Convertible Notes selected for partial redemption are
thereafter surrendered for conversion in part before termination of the
conversion right with respect to the portion of the Senior Convertible Notes so
selected, the converted portion of such Senior Convertible Notes shall be deemed
(so far as may be), solely for purposes of determining the aggregate principal
amount of Senior Convertible Notes to be redeemed by the Corporation, to be the
portion selected for redemption. Senior Convertible Notes which have been
converted during a selection of Senior Convertible Notes to be redeemed may be
treated by the Trustee as Outstanding for the purpose of such selection. Nothing
in this Section 1.06(c) shall affect the right of any Holder to convert any
Senior Convertible Notes before the termination of the conversion right with
respect thereto.
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(d) In addition to those matters set forth in Section 1104 of the
Indenture, a notice of redemption sent to the Holders of Senior Convertible
Notes shall state:
(i) the name of the Paying Agent and Conversion Agent;
(ii) the then current Conversion Rate;
(iii) that the Senior Convertible Notes called for redemption may be
converted at any time prior to the close of business on the second
Business Day immediately preceding the Redemption Date; and
(iv) that Holders who wish to convert Senior Convertible Notes must
comply with the procedures in Section 1.10 of this Twelfth Supplemental
Indenture and the fourth through ninth paragraphs of the reverse of the
Senior Convertible Notes.
(e) The Senior Convertible Notes shall not have a sinking fund.
SECTION 1.07 Purchase at the Option of the Holder Upon a Fundamental
Change. (a) If a Fundamental Change shall occur at any time prior to Stated
Maturity, each Holder shall have the right, at such Holder's option, to require
the Corporation to purchase any or all of such Holder's Senior Convertible Notes
for cash on the date that is no later than 30 days after the date of the
Corporation Purchase Notice of the occurrence of such Fundamental Change
(subject to extension to comply with applicable law, as provided in Section
1.09(g)) (the "Fundamental Change Purchase Date"). The Corporation shall
purchase such Senior Convertible Notes at a price (the "Fundamental Change
Purchase Price") equal to 100% of the principal amount of the Senior Convertible
Notes to be purchased plus any accrued and unpaid interest (including Contingent
Interest, if any) on the principal amount to be purchased to but excluding the
Fundamental Change Purchase Date. No Senior Convertible Notes may be purchased
at the option of the Holders due to a Fundamental Change if there has occurred
and is continuing an Event of Default (other than an Event of Default that is
cured by the payment of the Fundamental Change Purchase Price of such Senior
Convertible Notes).
(b) Exercise of Fundamental Change Option. For a Senior Convertible Note
to be so purchased at the option of the Holder pursuant to this Section 1.07,
the Paying Agent must receive:
(i) a written notice of purchase (a "Fundamental Change Purchase
Notice") substantially in the form entitled "Form of Fundamental Change
Purchase Notice" on the reverse of the Senior Convertible Note duly
completed, on or before the close of business on the Business Day
immediately preceding the Fundamental Change Purchase Date, subject to
extension to comply with applicable law. The Fundamental Change Purchase
Notice shall state:
(1) if certificated, the certificate numbers of the Senior
Convertible Notes which the Holder shall deliver to be purchased;
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(2) the portion of the principal amount of the Senior
Convertible Notes which the Holder shall deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof; and
(3) that such Senior Convertible Notes shall be purchased as
of the Fundamental Change Purchase Date pursuant to the terms and
conditions specified in the Senior Convertible Notes and in the
Indenture;
(ii) delivery or book-entry transfer of such Senior Convertible
Notes prior to, on or after the Fundamental Change Purchase Date (together
with all necessary endorsements) at the offices of the Paying Agent, such
delivery or transfer being a condition to receipt by the Holder of the
Fundamental Change Purchase Price therefor; provided, however, that such
Fundamental Change Purchase Price shall be so paid pursuant to this
Section 1.07 only if the Senior Convertible Notes so delivered or
transferred to the Paying Agent shall conform in all respects to the
description thereof in the related Fundamental Change Purchase Notice.
SECTION 1.08 Purchase of Senior Convertible Notes at the Option of the
Holder. (a) On each of May 15, 2007, May 15, 2012 and May 15, 2017 (each, a "Put
Date"), each Holder shall have the right, at such Holder's option, to require
the Corporation to purchase any or all of such Holder's Senior Convertible Notes
for cash. The Corporation shall purchase such Senior Convertible Notes at a
price equal to 100% of the principal amount of the Senior Convertible Notes to
be purchased plus any accrued and unpaid interest (including Contingent
Interest, if any) on the principal amount to be purchased to but excluding the
Put Date.
(b) Exercise of Put Option. For a Senior Convertible Note to be so
purchased at the option of the Holder, the Paying Agent must receive:
(i) a written notice of purchase (a "Put Notice") substantially in
the form entitled "Form of Put Notice" on the reverse of the Senior
Convertible Note duly completed, at any time from the opening of business
on the date that is 20 Business Days prior to a Put Date until the close
of business on the fifth Business Day prior to such Put Date. The Put
Notice shall state:
(1) if certificated, the certificate numbers of the Senior
Convertible Notes which the Holder shall deliver to be purchased;
(2) the portion of the principal amount of the Senior
Convertible Notes which the Holder shall deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof; and
(3) that such Senior Convertible Notes shall be purchased as
of the Put Date pursuant to the terms and conditions specified in
the Senior Convertible Notes and in the Indenture; and
(ii) delivery or book-entry transfer of such Senior Convertible
Notes to the Paying Agent prior to, on or after the Put Date (together
with all necessary endorsements) at the offices of the Paying Agent, such
delivery or transfer being a condition to receipt
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by the Holder of the Purchase Price therefor; provided, however, that such
Purchase Price shall be so paid pursuant to this Section 1.08 only if the
Senior Convertible Notes so delivered or transferred to the Paying Agent
shall conform in all respects to the description thereof in the related
Put Notice.
SECTION 1.09 Further Conditions and Procedures for Purchase Upon a
Fundamental Change and Purchase at the Option of the Holder.
(a) Notice of Put Date or Fundamental Change. The Corporation shall send
notices (each, a "Corporation Purchase Notice") to the Holders (and to
beneficial owners as required by applicable law) at their addresses shown in the
Senior Convertible Note register maintained by the Security Registrar, and shall
deliver a copy of each such notice to the Trustee and Paying Agent, not less
than 20 Business Days prior to each Put Date, or on or before the 30th day after
the occurrence of the Fundamental Change, as the case may be (each such date of
delivery, a "Corporation Purchase Notice Date"). Any such notice delivered to
the Trustee and the Paying Agent with respect to a Fundamental Change shall be
accompanied by an Officers' Certificate certifying that a Fundamental Change has
occurred and as to the date of the occurrence thereof, on which Certificate the
Trustee and the Paying Agent may conclusively rely. Each Corporation Purchase
Notice shall include a form of Put Notice or Fundamental Change Purchase Notice
to be completed by a Holder and shall state:
(i) the applicable Purchase Price or Fundamental Change Purchase
Price, excluding accrued and unpaid interest (including Contingent
Interest, if any), the applicable Conversion Rate at the time of such
notice (and any applicable adjustments to the Conversion Rate) and, to the
extent known at the time of such notice, the amount of interest (including
Contingent Interest, if any) that will be payable with respect to the
Senior Convertible Notes on the applicable Put Date or Fundamental Change
Purchase Date;
(ii) if the notice relates to a Fundamental Change, the events
causing the Fundamental Change and the date of the Fundamental Change;
(iii) the Put Date or Fundamental Change Purchase Date;
(iv) the last date on which a Holder may exercise its purchase
right;
(v) the name and address of the Paying Agent and the Conversion
Agent;
(vi) that Senior Convertible Notes must be surrendered to the
Paying Agent to collect payment of the Purchase Price or Fundamental
Change Purchase Price;
(vii) that Senior Convertible Notes as to which a Put Notice or
Fundamental Change Purchase Notice has been given by the Holder to the
Corporation may be converted only if the applicable Put Notice or
Fundamental Change Purchase Notice has been withdrawn by the Holder in
accordance with the terms of this Supplemental Indenture; provided that
the Senior Convertible Notes are otherwise convertible in accordance with
the fourth through ninth paragraphs of the reverse of the Senior
Convertible Notes;
12
(viii) that the Purchase Price or Fundamental Change Purchase Price
for any Senior Convertible Notes as to which a Put Notice or a Fundamental
Change Purchase Notice, as applicable, has been given and not withdrawn
shall be paid by the Paying Agent promptly following the later of the Put
Date or Fundamental Change Purchase Date, as applicable, or the time of
book-entry transfer or delivery of such Senior Convertible Notes;
(ix) the procedures the Holder must follow under Sections 1.07 or
1.08, as applicable, and Section 1.09;
(x) briefly, the conversion rights of the Senior Convertible Notes
and whether, at the time of such notice, the Convertible Senior Notes are
eligible for conversion;
(xi) that, unless the Corporation defaults in making payment of
such Purchase Price or Fundamental Change Purchase Price on Senior
Convertible Notes covered by any Put Notice or Fundamental Change Purchase
Notice, as applicable, interest will cease to accrue on and after the Put
Date or Fundamental Change Purchase Date, as applicable;
(xii) the CUSIP and, if applicable, the ISIN number of the Senior
Convertible Notes; and
(xiii) the procedures for withdrawing a Put Notice or Fundamental
Change Purchase Notice.
Simultaneously with providing such Corporation Purchase Notice, the
Corporation will publish a notice containing the information in such Corporation
Purchase Notice in a newspaper of general circulation in The City of New York or
publish such information on its then existing web site or through such other
public medium as it may use at the time.
At the Corporation's request, made at least five Business Days prior to
the date upon which such notice is to be mailed, and at the Corporation's
expense, the Paying Agent shall give the Corporation Purchase Notice in the
Corporation's name; provided, however, that, in all cases, the text of the
Corporation Purchase Notice shall be prepared by the Corporation.
(b) Effect of Put Notice or Fundamental Change Purchase Notice. Upon
receipt by the Paying Agent on behalf of the Corporation from the Holder of the
Fundamental Change Purchase Notice or the Put Notice specified in Section
1.07(b)(i) or Section 1.08(b)(i), as applicable, the Holder of the Senior
Convertible Notes in respect of which such Fundamental Change Purchase Notice or
the Put Notice, as the case may be, was given shall (unless such Fundamental
Change Purchase Notice or the Put Notice is withdrawn as specified in the
following two paragraphs) thereafter be entitled to receive solely the
Fundamental Change Purchase Price or the Purchase Price with respect to such
Senior Convertible Notes. Such Fundamental Change Purchase Price or Purchase
Price shall be paid by the Paying Agent to such Holder promptly following the
later of (x) the Fundamental Change Purchase Date or the Put Date, as the case
may be, with respect to such Senior Convertible Notes (provided the conditions
in Section 1.07(b) or Section 1.08(b), as applicable, have been satisfied) and
(y) the time of delivery or book-entry transfer of such Senior Convertible Notes
to the Paying Agent by the Holder thereof in the manner required by Section
1.07(b)(ii) or Section 1.08(b)(ii), as applicable.
13
Senior Convertible Notes in respect of which a Fundamental Change Purchase
Notice or Put Notice, as the case may be, has been given by the Holder thereof
may not be converted for shares of Common Stock on or after the date of the
delivery of such Fundamental Change Purchase Notice or Put Notice, as the case
may be, unless such Fundamental Change Purchase Notice or Put Notice, as the
case may be, has first been validly withdrawn or deemed to have been validly
withdrawn as specified in Section 1.09(c); provided that the Senior Convertible
Notes are otherwise convertible in accordance with the fourth through ninth
paragraphs of the reverse of the Senior Convertible Notes.
On or before 10:00 a.m. (New York City time) on the Fundamental Change
Purchase Date or the Put Date, as the case may be, the Corporation shall deposit
with the Paying Agent (or if the Corporation or an Affiliate of the Corporation
is acting as the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the aggregate Fundamental Change Purchase Price or the
aggregate Purchase Price, as the case may be, of the Senior Convertible Notes to
be purchased pursuant to Section 1.07 or Section 1.08, as applicable. Payment by
the Paying Agent of such Fundamental Change Purchase Price or Purchase Price for
such Senior Convertible Notes shall be made promptly following the later of the
Fundamental Change Purchase Date or the Put Date, as the case may be, or the
time of book-entry transfer or delivery of such Senior Convertible Notes. If the
Paying Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Fundamental Change Purchase Price or Purchase Price, as
the case may be, of such Senior Convertible Notes on the Business Day following
the Fundamental Change Purchase Date or the Put Date, as the case may be, then,
on and after such date, such Senior Convertible Notes shall cease to be
Outstanding and interest (including any Contingent Interest) on such Senior
Convertible Notes shall cease to accrue, whether or not book-entry transfer of
such Senior Convertible Notes is made or such Senior Convertible Notes are
delivered to the Paying Agent, and all other rights of the Holder shall
terminate (other than the right to receive the Fundamental Change Purchase Price
or the Purchase Price, as the case may be, upon delivery or transfer of the
Senior Convertible Notes). Nothing herein shall preclude the Corporation
withholding any tax required by law.
The Corporation shall require each Paying Agent (other than the Trustee)
to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of the
Fundamental Change Purchase Price or the Purchase Price, as the case may be, and
shall notify the Trustee of any default by the Corporation in making any such
payment. If the Corporation or an Affiliate of the Corporation acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Corporation at any time may require a Paying Agent to
deliver all money held by it pursuant to this Section 1.09 to the Trustee and to
account for any funds disbursed by the Paying Agent. Upon doing so, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Senior Convertible Notes for purchase shall be determined
by the Corporation, whose determination shall be final and binding, absent
manifest error.
(c) Withdrawal of a Put Notice or Fundamental Change Purchase Notice. A
Put Notice or Fundamental Change Purchase Notice, as the case may be, may be
withdrawn by
14
means of a written notice of withdrawal delivered to the office of the Paying
Agent at any time prior to 5:00 p.m. New York City time on the Business Day
prior to the Put Date or the Fundamental Change Purchase Date, as the case may
be, to which it relates specifying:
(i) if certificated, the certificate number of the Senior
Convertible Notes in respect of which such notice of withdrawal is being
submitted;
(ii) the principal amount of the Senior Convertible Notes with
respect to which such notice of withdrawal is being submitted; and
(iii) the principal amount, if any, of such Senior Convertible Notes
which remains subject to the Put Notice or Fundamental Change Purchase
Notice, as the case may be, and which has been or shall be transferred or
delivered for purchase by the Corporation.
The Paying Agent shall promptly notify the Corporation of the receipt by
it of any Put Notice or Fundamental Change Purchase Notice or written notice of
withdrawal thereof.
(d) Notwithstanding the requirements of Sections 1.07 or 1.08 and this
Section 1.09, if the Senior Convertible Notes are represented by Global
Securities in book-entry form the appropriate procedures of the Depositary must
be complied with for any purchase upon a Fundamental Change or Put Option.
(e) Effect of Event of Default. There shall be no purchase of any Senior
Convertible Notes pursuant to Section 1.07 or Section 1.08 if an Event of
Default has occurred and is continuing (other than a default that is cured by
the payment of the Purchase Price or Fundamental Change Purchase Price, as the
case may be). The Paying Agent shall promptly return to the respective Holders
thereof any Senior Convertible Notes (x) with respect to which a Put Notice or
Fundamental Change Purchase Notice, as the case may be, has been withdrawn in
compliance with this Twelfth Supplemental Indenture, or (y) held by it during
the continuance of an Event of Default (other than a default that is cured by
the payment of the Purchase Price or Fundamental Change Purchase Price, as the
case may be) in which case, upon such return, the Put Notice or Fundamental
Change Purchase Notice with respect thereto shall be deemed to have been
withdrawn.
(f) Senior Convertible Notes Purchased in Part. Any Senior Convertible
Notes that are to be purchased only in part shall be surrendered at the office
of the Paying Agent (with, if the Corporation or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Corporation and the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing) and the Corporation shall execute
and the Trustee or the Authenticating Agent, if any, shall authenticate and
deliver to the Holder of such Senior Convertible Notes, without service charge,
a new Senior Convertible Note or Senior Convertible Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the portion of the principal amount of the Senior
Convertible Notes so surrendered which is not purchased.
(g) Covenant to Comply with Securities Laws Upon Purchase of Senior
Convertible Notes. In connection with any offer to purchase Senior Convertible
Notes under Sections 1.07 or
15
1.08 hereof, the Corporation shall, to the extent applicable, (i) comply with
Rules 13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange
Act, if applicable, (ii) file the related Schedule TO (or any successor
schedule, form or report) under the Exchange Act, if applicable and (iii)
otherwise comply with all applicable federal and state securities laws so as to
permit the rights and obligations under Sections 1.07, 1.08 or this Section 1.09
to be exercised in the manner specified in Sections 1.07, 1.08 or this Section
1.09; provided, however, that the Corporation shall not take any action in
violation of any applicable federal or state securities laws.
(h) Repayment to the Corporation. The Trustee and the Paying Agent shall
return to the Corporation any cash or property that remains unclaimed as
provided in Section 1003 of the Original Indenture, together with any unclaimed
interest (including any Contingent Interest, if any), held by them for the
payment of a Purchase Price or Fundamental Change Purchase Price, as the case
may be; provided, however, that to the extent that the aggregate amount of cash
deposited by the Corporation pursuant to Section 1.09(b), as applicable, exceeds
the aggregate Purchase Price or Fundamental Change Purchase Price, as the case
may be, of the Senior Convertible Notes or portions thereof which the
Corporation is obligated to purchase as of the Put Date or Fundamental Change
Purchase Date, as the case may be, then promptly on and after the Business Day
following the Put Date or Fundamental Change Purchase Date, as the case may be,
the Trustee or the Paying Agent, as the case may be, shall return any such
excess to the Corporation together with any excess interest (including any
Contingent Interest, if any) held by them for payment to Holders.
(i) In any case where a Put Date or a Fundamental Change Purchase Date
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of the Indenture or the Senior Convertible Notes) payment of
interest (including Contingent Interest, if any) and the Purchase Price or the
Fundamental Change Purchase Price, as the case may be, need not be made at such
Place of Payment on such date (provided that all other conditions therefor have
been complied with), but may be made on the next succeeding Business Day at such
Place of Payment (provided that such conditions have been complied with) with
the same force and effect as if made on the Put Date or the Fundamental Change
Purchase Date, as the case may be (and without any interest or payment in
respect of any such delay).
SECTION 1.10 Conversion of Senior Convertible Notes.
(a) Right to Convert. A Holder may convert its Senior Convertible Notes
for Common Stock at any time during the periods specified in the fourth
paragraph of the reverse of the Senior Convertible Notes.
(b) The Conversion Rate. The initial Conversion Rate is 42.3908 shares
of Common Stock issuable upon conversion of $1,000 principal amount of a Senior
Convertible Note (the "Conversion Rate"), subject to adjustment as herein set
forth. A Holder may convert a portion of the principal amount of Senior
Convertible Notes if the portion is $1,000 or an integral multiple thereof.
16
(c) Conversion Procedures. To convert Senior Convertible Notes, the
requirements set forth in this Section 1.10(c) and in the fourth through ninth
paragraphs of the reverse of the Senior Convertible Notes must be satisfied.
(i) To convert the Senior Convertible Notes, a Holder must (1)
complete and manually sign the irrevocable conversion notice on the back
of the Senior Convertible Notes (or complete and manually sign a facsimile
of such notice) and deliver such notice to the Conversion Agent at the
office maintained by the Conversion Agent for such purpose, (2) with
respect to Senior Convertible Notes in certificated form, surrender the
Notes to the Conversion Agent or with respect to Senior Convertible Notes
represented by Global Securities, cause the book-entry transfer thereof to
the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Corporation or the
Trustee and (4) pay any transfer or similar tax, if required. The date on
which the Holder satisfies all such requirements is the conversion date
(the "Conversion Date"). As soon as practicable, but in no event later
than the fifth Business Day following the Conversion Date, the Corporation
shall deliver to the Holder, through the Conversion Agent, a certificate
(or credit the book-entry transfer of such shares of Common Stock) for the
number of full shares of Common Stock issuable upon the conversion and
cash in lieu of any fractional share determined pursuant to Section
1.10(d).
(ii) Holders of Senior Convertible Notes at the close of business
on a Regular Record Date will receive payment of interest (including
Contingent Interest, if any) payable on the corresponding Interest Payment
Date notwithstanding the conversion of such Senior Convertible Notes at
any time after the close of business on such Regular Record Date. Senior
Convertible Notes surrendered for conversion during the period from the
close of business on any Regular Record Date to the opening of business on
the corresponding Interest Payment Date must be accompanied by payment of
an amount equal to the interest (including Contingent Interest, if any)
that the Holder is to receive on the Senior Convertible Notes; provided,
however, that no such payment need be made with respect to Senior
Convertible Notes in respect of which a Redemption Date or Fundamental
Change Purchase Date has been set that falls within this period or on such
Interest Payment Date or to the extent any overdue interest (or Contingent
Interest, if any) exists at the time of such conversion. Except as
described above, no payment or adjustment will be made for accrued
interest on converted Senior Convertible Notes.
(iii) The Person in whose name the certificate for such shares of
Common Stock is registered shall be treated as a stockholder of record on
and after the Conversion Date; provided, however, that no surrender of
Senior Convertible Notes on any date when the stock transfer books of the
Corporation shall be closed shall be effective to constitute the Person or
Persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock
on such date, but such surrender shall be effective to constitute the
Person or Persons entitled to receive such shares of Common Stock as the
record holder or holders thereof for all purposes at the close of business
on the next succeeding day on which such stock transfer books are open;
such conversion shall be at the Conversion Rate in effect on the date that
such Senior Convertible Notes shall have been surrendered for conversion,
as if the stock
17
transfer books of the Corporation had not been closed. Upon conversion of
Senior Convertible Notes, such Person shall no longer be a Holder of such
Senior Convertible Notes.
(iv) No payment or adjustment shall be made for dividends on or
other distributions with respect to any Common Stock except as provided in
Section 1.10(g) or as otherwise provided in the Indenture. If a Holder
converts more than one Senior Convertible Note at the same time, the
number of shares of Common Stock issuable upon the conversion shall be
based on the total principal amount of the Senior Convertible Notes
converted. Upon surrender of a Senior Convertible Note that is converted
in part, the Corporation shall execute, and the Trustee or the
Authenticating Agent shall authenticate and deliver to the Holder, a new
Senior Convertible Note in an authorized denomination equal in principal
amount to the unconverted portion of the Senior Convertible Note
surrendered. If the last day on which Senior Convertible Notes may be
converted is not a Business Day in a place where a Conversion Agent is
located, the Senior Convertible Notes may be surrendered to that
Conversion Agent on the next succeeding day that is a Business Day. A
Holder of Senior Convertible Notes is not entitled to any rights of a
holder of Common Stock until such Holder has converted its Senior
Convertible Notes to Common Stock, and only to the extent such Senior
Convertible Notes are deemed to have been converted into Common Stock
pursuant to this Section 1.10.
(d) Cash Payments in Lieu of Fractional Shares. The Corporation shall
not issue a fractional share of Common Stock upon conversion of Senior
Convertible Notes. Instead the Corporation shall deliver cash for the current
market value of the fractional share. The current market value of a fractional
share shall be determined to the nearest 1/10,000th of a share by multiplying
the Last Reported Sale Price of a full share of Common Stock on the Trading Day
immediately preceding the Conversion Date by the fractional amount and rounding
the product to the nearest whole cent.
(e) Taxes on Conversion. If a Holder converts Senior Convertible Notes,
the Corporation shall pay any documentary, stamp or similar issue or transfer
tax due on the issue of shares of Common Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which shall be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude the Corporation's withholding any tax required by law.
(f) Covenants of the Corporation. The Corporation shall, prior to
issuance of any Senior Convertible Notes hereunder, and from time to time as may
be necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Senior Convertible Notes. All shares of Common Stock delivered upon conversion
of the Senior Convertible Notes shall be newly issued shares or treasury shares,
shall be duly and validly issued and fully paid and nonassessable and shall be
free from preemptive rights and free of any lien or adverse claim. The
Corporation shall endeavor
18
promptly to comply with all federal and state securities laws regulating the
order and delivery of shares of Common Stock upon the conversion of Senior
Convertible Notes, if any, and shall cause to have listed or quoted all such
shares of Common Stock on the New York Stock Exchange, or, if not listed
thereon, on each United States national securities exchange or over-the-counter
or other domestic market on which the Common Stock is then listed or quoted.
(g) Adjustments to Conversion Rate. The Conversion Rate shall be
adjusted from time to time by the Corporation as follows:
(i) In case the Corporation shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Conversion Rate, as
in effect at the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such dividend or
other distribution, shall be increased by dividing such Conversion Rate by
a fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this Section 1.10(g)(i), the number of
shares of Common Stock at any time outstanding shall not include shares
held in treasury by the Corporation but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares
of Common Stock. The Corporation will not pay any dividend or make any
distribution on shares of Common Stock held in treasury by the
Corporation.
(ii) In case the Corporation shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Senior Convertible Notes upon
conversion of such Senior Convertible Notes) entitling them, for a period
expiring within 45 days after the record date for the determination of
stockholders entitled to receive such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price per share of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend
reinvestment plan or share purchase plan), the Conversion Rate in effect
at the opening of business on the day following the date fixed for such
determination shall be increased by dividing such Conversion Rate by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market
Price and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase at such below Current Market Price, such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
Section 1.10(g)(ii), the number of shares of Common Stock at any time
outstanding shall not include shares held in treasury by the Corporation
but shall include any shares issuable in respect of any scrip certificates
19
issued in lieu of fractions of shares of Common Stock. The Corporation
shall not issue any such rights, options or warrants in respect of shares
of Common Stock held in treasury by the Corporation.
(iii) In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Conversion
Rate in effect at the opening of business on the day following the day
upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of
Common Stock, the Conversion Rate in effect at the opening of business on
the day following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision, split or
combination becomes effective.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of capital stock, securities, cash or other property
(but excluding any rights, options or warrants referred to in Section
1.10(g)(ii) of this Section, any dividend or distribution paid exclusively
in cash and any dividend or distribution referred to in Section
1.10(g)(i)), the Conversion Rate shall be adjusted by dividing the
Conversion Rate in effect immediately prior to the close of business on
the date fixed for the determination of stockholders entitled to receive
such distribution by a fraction of which the numerator shall be the
Current Market Price per share of the Common Stock on the date fixed for
such determination less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a Board Resolution) on such date of the portion of the evidences of
indebtedness, shares of capital stock, securities, cash or other property
so distributed applicable to one share of Common Stock and the denominator
shall be such Current Market Price per share of the Common Stock, such
adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution; provided, however,
that in the event that the Corporation makes a distribution to all holders
of its Common Stock consisting of capital stock of, or similar equity
interests in, a subsidiary or other business unit of the Corporation, the
Conversion Rate shall be adjusted by dividing the Conversion Rate in
effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution by
a fraction of which the numerator shall be the Spin-off Market Price per
share of the Common Stock on the date fixed for such determination less
the Spin-off Market Price per share or similar equity interest of the
subsidiary or other business unit of the Corporation on such date and the
denominator shall be the Spin-off Market Price per share of the Common
Stock, such adjustment to become effective 10 trading days after the
effective date of such distribution of capital stock of, or similar equity
interest in, a subsidiary or other business unit of the Corporation. In
any case in which this Section 1.10(g)(iv) is applicable, Sections
1.10(g)(i) and (ii) shall not be applicable.
(v) In case the Corporation shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i) any cash
that is distributed in an event
20
to which Section 1.10(h)(iv) applies or (ii) cash that is distributed as
part of a distribution referred to in Section 1.10(g)(iv)) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash
within the 12 months preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to this Section 1.10(g)(v)
or Section 1.10(g)(vi) has been made and (III) the aggregate of any cash
plus the fair market value, as of the expiration of the applicable tender
or exchange offer referred to below (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution), of consideration payable in respect of any tender or
exchange offer (other than consideration payable in respect of any odd-lot
tender offer) by the Corporation or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the
date of payment of the distribution described in clause (I) above and in
respect of which no adjustment pursuant to this Section 1.10(g)(v) or
Section 1.10(g)(vi) has been made, exceeds the product of $1.10
(appropriately adjusted from time to time for any stock dividends on or
subdivisions or combination of Common Stock) multiplied by the number of
shares of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Conversion Rate shall be increased so that the same
shall equal the rate determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by
a fraction (i) the numerator of which shall be equal to the Current Market
Price per share of the Common Stock on the date fixed for such
determination plus $1.10 (appropriately adjusted from time to time for any
stock dividends on or subdivisions or combination of Common Stock) less an
amount equal to the quotient of (x) the combined amount distributed or
payable in the transactions described in clauses (I), (II) and (III) above
and (y) the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
(vi) In case (I) a tender or exchange offer made by the Corporation
or any subsidiary of the Corporation for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares) of an aggregate consideration having
a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution)
that combined together with (II) the aggregate of the cash plus the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the
expiration of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer (other than consideration
payable in respect of any odd-lot tender offer) by the Corporation or any
subsidiary of the Corporation for all or any portion of the Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to Section
1.10(g)(v) or this Section 1.10(g)(vi) has been made and (III) the
aggregate amount of any distributions to all holders of the Corporation's
Common Stock made exclusively in cash within the 12 months preceding the
expiration of such tender or
21
exchange offer and in respect of which no adjustment pursuant to Section
1.10(g)(v) or this Section 1.10(g)(vi) has been made, exceeds the product
of $1.10 (appropriately adjusted from time to time for any stock dividends
on or subdivisions or combination of Common Stock) multiplied by the
number of shares of Common Stock outstanding (including any tendered
shares) as of the last time (the "Expiration Time") tenders could have
been made pursuant to such tender or exchange offer (as it may be
amended), then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, the Conversion
Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate immediately prior to the close of business as
of the Expiration Time by a fraction (i) the numerator of which shall be
equal to (A) the product of (1) the Current Market Price per share of the
Common Stock as of the Expiration Time plus $1.10 (appropriately adjusted
from time to time for any stock dividends on or subdivisions or
combination of Common Stock) and (2) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time less
(B) the amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on
the transactions described in clauses (I), (II) and (III) above (assuming
in the case of clause (I) the acceptance, up to any maximum specified in
the terms of the tender or exchange offer, of Purchased Shares), and (ii)
the denominator of which shall be equal to the product of (A) the Current
Market Price per share of the Common Stock as of the Expiration Time and
(B) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares").
(vii) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon
an event to which Section 1.10(h)(iv) applies) shall be deemed to involve
(a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification
shall be deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution" and the "date fixed
for such determination" within the meaning of Section 1.10(g)(iv)), and
(b) a subdivision, split or combination, as the case may be, of the number
of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision or split
becomes effective" or "the day upon which such combination becomes
effective," as the case may be, and "the day upon which such subdivision,
split or combination becomes effective" within the meaning of Section
1.10(g)(iii)).
(viii) All adjustments to the Conversion Rate, shall be calculated
to the nearest 1/10,000th of a share of Common Stock (or if there is not a
nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
22
(ix) Notwithstanding the foregoing provisions of Section
1.10(g)(ii) or (iv), no adjustment shall be made thereunder, nor shall
an adjustment be made to the ability of a Holder of a Note to convert,
for any distribution described therein if the Holder will otherwise
participate in the distribution without conversion of such Holder's
Senior Convertible Notes.
(x) No adjustment pursuant to the Conversion Rate or a
holder's ability to convert pursuant to this Section 1.10(g) shall be
made in connection with the issuance of rights, the distribution of
separate certificates representing rights or the exercise, redemption,
termination or invalidation of rights pursuant to any stockholder
rights plan implemented by the Corporation which provides that, upon
conversion of the Senior Convertible Notes, the Holders shall receive,
in addition to the Common Stock issuable upon such conversion, the
rights issued under such stockholder rights plan (notwithstanding the
occurrence of an event causing such rights to separate from the Common
Stock at or prior to the time of conversion).
(h) Miscellaneous Provisions Relating to Conversion.
(i) When No Adjustment Required. No adjustment to the
Conversion Rate need be made:
(1) upon the issuance of any shares of Common
Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of
the Corporation and the investment of additional optional
amounts in shares of Common Stock under any plan;
(2) upon the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant
to any present or future employee, director or consultant
benefit plan or program of or assumed by the Corporation or
any of its Subsidiaries;
(3) upon the issuance of any shares of Common
Stock pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security not described in (2)
above and outstanding as of the date the Senior Convertible
Notes were first issued;
(4) for a change in the par value of the Common
Stock; or
(5) for accrued and unpaid interest, including
Contingent Interest, if any.
To the extent the Senior Convertible Notes become convertible into
cash, assets or property (other than capital stock of the Corporation
or securities to which Section 1.10(h)(iv) applies), no adjustment
shall be made thereafter as to the cash, assets or property. Interest
shall not accrue on such cash, assets or property.
(ii) Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Corporation shall promptly mail to Holders a notice of
the adjustment. The Corporation
23
shall file with the Trustee and the Conversion Agent such notice. The
certificate shall, absent manifest error, be conclusive evidence that
the adjustment is correct. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring
inspection thereof.
(iii) Voluntary Increase. The Corporation may make such
increases in the Conversion Rate, in addition to those required by
Section 1.10(g), as the Board of Directors considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights
to purchase Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such
for income tax purposes. To the extent permitted by applicable law, the
Corporation may from time to time increase the Conversion Rate by any
amount for any period of time if the period is at least 20 days, the
increase is irrevocable during the period and the Board of Directors
shall have made a determination that such increase would be in the best
interests of the Corporation, which determination shall be conclusive.
Whenever the Conversion Rate is so increased, the Corporation shall
mail to Holders and file with the Trustee and the Conversion Agent a
notice of such increase. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such
notice except to exhibit the same to any Holder desiring inspection
thereof. The Corporation shall mail the notice at least 15 days before
the date the increased Conversion Rate takes affect. The notice shall
state the increased Conversion Rate and the period it shall be in
effect.
(iv) Effect of Reclassification, Consolidation, Merger,
Binding Share Exchange or Sale. If any of the following events occur,
namely (a) any reclassification or change of outstanding shares of
Common Stock (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of a
subdivision or combination), (b) any consolidation, merger or binding
share exchange of the Corporation with another corporation as a result
of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to
or in exchange for such Common Stock or (c) any sale or conveyance of
all or substantially all of the assets of the Corporation to any other
corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock,
then the Conversion Rate will not be adjusted. If any of the events
described in the preceding sentence occur, the Corporation or the
successor or purchasing corporation, as the case may be, shall execute
with the Trustee a supplemental indenture or otherwise amend the terms
of the Senior Convertible Notes, to provide that each Senior
Convertible Note shall be convertible into the kind and amount of
shares of stock, other securities or property or assets (including
cash) that the Holder of the Senior Convertible Note would have
received upon such reclassification, change, consolidation, merger,
binding share exchange, sale or conveyance if such Holder had converted
such Senior Convertible Note into the number of shares of Common Stock
issuable upon conversion of such Senior Convertible Note immediately
prior to such reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance. Such
supplemental indenture or other amendment to the Senior Convertible
Notes shall provide for
24
adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 1.10(h)(iv). The
Corporation shall cause notice of the execution of such supplemental
indenture or amendment of the Senior Convertible Notes to be mailed to
each Holder, at its address appearing on the Senior Convertible Note
register, within 20 days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of such
supplemental indenture. The above provisions of this Section shall
similarly apply to successive reclassifications, changes,
consolidations, mergers, combinations, binding share exchanges, sales
and conveyances. If this Section 1.10(h)(iv) applies to any event or
occurrence, Section 1.10(g) shall not apply.
(v) Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or
responsibility to any Holder to either calculate the Conversion Rate or
determine whether any facts exist which may require any adjustment of
the Conversion Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the
method employed herein, or in any supplemental indenture provided to be
employed, in making the same and shall be protected in relying upon an
Officers' Certificate with respect to the same. The Trustee and any
other Conversion Agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at any time be
issued or delivered upon the conversion of any Senior Convertible Notes
and the Trustee and any other Conversion Agent make no representations
with respect thereto. Neither the Trustee nor any Conversion Agent
shall be responsible for any failure of the Corporation to issue,
transfer or deliver any shares of Common Stock or stock certificates or
other securities or property or cash upon the surrender of any Senior
Convertible Notes for the purpose of conversion or to comply with any
of the duties, responsibilities or covenants of the Corporation
contained in this Section 1.10. Without limiting the generality of the
foregoing, neither the Trustee nor any Conversion Agent shall be under
any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to
Section 1.10(h)(iv) relating either to the kind or amount of shares of
stock or securities or other property or assets (including cash)
receivable by Holders upon the conversion of their Senior Convertible
Notes after any event referred to in such Section 1.10(h)(iv) or to any
adjustment to be made with respect thereto, but, subject to the
provisions of Article Six of the Indenture, may accept as conclusive
evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the
Corporation shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
Neither the Trustee nor the Conversion Agent shall be responsible for
determining whether any event contemplated by the fourth paragraph of
the reverse of the Senior Convertible Notes has occurred which makes
the Senior Convertible Notes eligible for conversion or no longer
eligible therefor until the Corporation has delivered to the Trustee
and the Conversion Agent an Officers' Certificate stating that such
event has occurred, on which Certificate the Trustee and the Conversion
Agent may conclusively rely, and the Corporation agrees to deliver such
Officers' Certificate to the Trustee and the Conversion Agent
immediately after the occurrence of any such event.
25
(vi) Successive Adjustments. After an adjustment to the
Conversion Rate under Section 1.10(g), any subsequent event requiring
an adjustment under Section 1.10(g) shall cause an adjustment to the
Conversion Rate as so adjusted.
(vii) General Considerations. Whenever successive
adjustments to the Conversion Rate are called for pursuant to Sections
1.10(g) or 1.10(h), such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate the
intent of 1.10(g) or 1.10(h) and to avoid unjust or inequitable results
as determined in good faith by the Board of Directors.
(i) On conversion of a Senior Convertible Note, that portion of
accrued and unpaid interest, including Contingent Interest, if any, on the
converted Senior Convertible Note attributable to the period from the most
recent Interest Payment Date (or, if no Interest Payment Date has occurred, from
the Original Issue Date) through the Conversion Date and Tax Original Issue
Discount accrued through the Conversion Date with respect to the converted
Senior Convertible Note shall not be cancelled, extinguished or forfeited, but
rather shall be deemed to be paid in full to the Holder thereof through delivery
of the Common Stock (together with any cash payment in lieu of fractional
shares) in exchange for the Senior Convertible Note being converted pursuant to
the provisions hereof, and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for accrued and
unpaid interest (including Contingent Interest, if any) and Tax Original Issue
Discount accrued through the Conversion Date and the balance, if any, of such
fair market value of such Common Stock (and any such cash payment), shall be
treated as issued in exchange for the principal amount of the Senior Convertible
Note being converted pursuant to the provisions hereof.
SECTION 1.11 Additional Events of Default. In addition to those matters
set forth in Section 501 of the Original Indenture, an "Event of Default" with
respect to the Senior Convertible Notes shall also mean any of the following
events:
(i) default in the payment of any interest, including
Contingent Interest, upon the Senior Convertible Notes when it becomes
due and payable, and continuance of such default for a period of 60
days; or
(ii) default in the payment of the principal of on the
Senior Convertible Notes, at their Maturity, including pursuant to the
Corporation's obligation to repurchase Senior Convertible Notes upon
the occurrence of a Fundamental Change pursuant to Section 1.07 or upon
the exercise by a holder of its option to require the Corporation to
repurchase such holder's Senior Convertible Notes pursuant to Section
1.08; or
(iii) default in the Corporation's obligation to convert
the Senior Convertible Notes upon exercise of a Holder's conversion
right.
SECTION 1.12 Amendments; Waiver. In addition to those matters set forth
in Section 902 of the Original Indenture, with respect to the Senior Convertible
Notes, no amendment or supplemental indenture shall without the consent of the
Holder of each Senior Convertible Note affected thereby:
26
(i) reduce the Redemption Price, Purchase Price or
Fundamental Change Purchase Price of the Senior Convertible Notes; or
(ii) make any change that adversely affects the Holders'
right to convert the Senior Convertible Notes in accordance with their
terms and Indenture.
In addition, with respect to the Senior Convertible Notes, to the extent set
forth in Section 513 of the Original Indenture, the Holders of at least a
majority in aggregate principal amount of the Outstanding Senior Convertible
Notes may waive an existing default other than: (I) any default by the
Corporation in any payment of the Redemption Price, Purchase Price or
Fundamental Change Purchase Price with respect to any Senior Convertible Notes,
or (II) any default which constitutes a failure to convert any Senior
Convertible Note in accordance with its terms and the Indenture.
SECTION 1.13 Register of Securities; Paying Agent; Conversion Agent.
Initially, the Trustee shall act as Paying Agent, Conversion Agent and Security
Registrar with respect to the Senior Convertible Notes with the Place of Payment
for the Senior Convertible Notes initially being the Corporate Trust Office. The
Corporation may appoint and change any Paying Agent, Conversion Agent, Security
Registrar or co-registrar or approve a change in the office through which any
Paying Agent acts without notice, other than notice to the Trustee. The
Corporation or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Security Registrar or co-registrar.
SECTION 1.14 Calculations in Respect of the Senior Convertible Notes.
The Corporation will be responsible for making all calculations called for under
the Senior Convertible Notes. These calculations include, but are not limited
to, determination of the Trading Price, Current Market Price, Last Reported Sale
Price, Spin-off Market Price, accrued interest payable (including any Contingent
Interest) on the Senior Convertible Notes and Conversion Rate of the Senior
Convertible Notes. The Corporation will make these calculations in good faith
and, absent manifest error, these calculations will be final and binding on the
Holders. Promptly after the calculation thereof, the Corporation will provide to
each of the Trustee and the Conversion Agent an Officers' Certificate setting
forth a schedule of its calculations and each of the Trustee and the Conversion
Agent is entitled to conclusively rely upon the accuracy of such calculations
without independent verification; provided, however, that in connection with the
Corporation's obligation to pay Contingent Interest under Section 1.03(b)
hereof, the Corporation shall determine whether Contingent Interest is payable
with respect to an interest period and shall deliver to the Trustee and the
Paying Agent no later than the first Business Day of each interest period with
respect to which it has determined that Contingent Interest is payable an
Officers' Certificate evidencing such determination, setting forth the
calculations on which such determination is based and setting forth the amount
of interest (including Contingent Interest) which will accrue on the Senior
Convertible Notes during such interest period. The Trustee and the Paying Agent
may conclusively rely on such Officers' Certificate and may conclusively assume
that no Contingent Interest is payable for any interest period for which they
have not received such Officers' Certificate. The Trustee and the Paying Agent
shall not be responsible for making any calculation or determination referred to
in this Section 1.14. The Trustee will forward the Corporation's calculations to
any Holder upon the request of such Holder.
27
SECTION 1.15 Tax Treatment. The Corporation agrees, and by acceptance
of beneficial ownership interest in the Senior Convertible Notes each beneficial
holder of Senior Convertible Notes will be deemed to have agreed, for United
States federal income tax purposes (1) to treat the Senior Convertible Notes as
indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent
Payment Regulations") and, for purposes of the Contingent Payment Regulations,
to treat the fair market value of any stock beneficially received by a
beneficial holder upon any conversion of the Senior Convertible Notes as a
contingent payment and (2) to be bound by the Corporation's determination of the
"comparable yield" and "projected payment schedule," within the meaning of the
Contingent Payment Regulations, with respect to the Senior Convertible Notes. A
Holder of Senior Convertible Notes may obtain the issue price, the amount of
original issue discount, issue date, yield to maturity, comparable yield and
projected payment schedule for the Senior Convertible Notes by submitting a
written request for such information to the Corporation at the following
address: Duke Energy Corporation, 526 South Church Street, Charlotte North
Carolina 28202, Attention: David L. Hauser, Senior Vice President and Treasurer.
ARTICLE 2
MISCELLANEOUS PROVISIONS
SECTION 2.01 Recitals by the Corporation. The recitals in this Twelfth
Supplemental Indenture are made by the Corporation only and not by the Trustee,
and all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of the Senior Convertible Notes and of this Twelfth
Supplemental Indenture as fully and with like effect as if set forth herein in
full.
SECTION 2.02 Ratification and Incorporation of Original Indenture. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Twelfth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 2.03 Executed in Counterparts. This Twelfth Supplemental
Indenture may be executed in several counterparts, each of which shall be deemed
to be an original, and such counterparts shall together constitute but one and
the same instrument.
28
IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.
Duke Energy Corporation
By: /s/ Myron L. Caldwell
Name: Myron L. Caldwell
Title: Vice President, Corporate Finance
Attest:
/s/ Robert T. Lucas III
Name: Robert T. Lucas III
Title: Assistant Secretary
JPMorgan Chase Bank,
as Trustee
By: /s/ Carol Ng
Name: Carol Ng
Title: Vice President
Attest:
/s/ Nicholas Sberlati
Name: Nicholas Sberlati
Title: Trust Officer
EXHIBIT A
FORM OF
1-3/4% CONVERTIBLE SENIOR NOTE DUE 2023
[If applicable, insert: THIS SENIOR NOTE IS A GLOBAL SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SENIOR NOTE MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A SENIOR NOTE REGISTERED, AND NO TRANSFER OF THIS SENIOR NOTE IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY SENIOR NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. CUSIP No. 264399 EJ 1
DUKE ENERGY CORPORATION
1-3/4% CONVERTIBLE SENIOR NOTE DUE 2023
Principal Amount: $
Regular Record Date: Close of business on the 15th calendar day prior to the
relevant Interest Payment Date (whether or not a Business Day)
Original Issue Date: May 7, 2003
Stated Maturity: May 15, 2023
Interest Payment Dates: Semi-annually on May 15 and November 15 of each year,
commencing November 15, 2003
Interest Rate: 1-3/4% per annum plus Contingent Interest, if any (as provided
for on the reverse hereof)
Authorized Denomination: $1,000 and any integral multiples thereof
A-1
Duke Energy Corporation, a North Carolina corporation (the
"Corporation," which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to , or registered assigns, the principal sum of DOLLARS
($ ) on the Stated Maturity shown above and to pay interest thereon from
the Original Issue Date shown above, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually in
arrears on each Interest Payment Date as specified above, commencing on November
15, 2003 and on the Stated Maturity at the rate per annum shown above (the
"Interest Rate") until the principal hereof is paid or made available for
payment and on any overdue principal and on any overdue installment of interest,
together with any Contingent Interest. The interest (including Contingent
Interest, if any) so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this 1-3/4% Convertible Senior Note due 2023 (this "Security") is
registered on the Regular Record Date as specified above next preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest, including any Contingent Interest, not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Securities shall be listed, and upon such notice as may be required by any
such exchange, all as more fully provided in the Indenture.
Payments of interest (including Contingent Interest, if any) on this
Security will include interest accrued (including Contingent Interest, if any)
to but excluding the respective Interest Payment Dates. Payments of interest
(including Contingent Interest, if any) for this Security shall be computed and
paid on the basis of a 360-day year consisting of twelve 30-day months and will
accrue from May 7, 2003 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for. In the event that any date on which
interest (including Contingent Interest, if any) is payable on this Security is
not a Business Day, then payment of the interest (including Contingent Interest,
if any) payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or payment in respect of any such delay)
with the same force and effect as if made on the date the payment was originally
payable. "Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.
Payment of principal of and interest (including Contingent Interest, if
any) on the Securities shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payments of principal of and interest (including
Contingent Interest, if any) on the Securities of this series represented by a
Global Security shall be made by wire transfer of immediately available funds to
the Holder of such Global Security, provided that, in the case of payments of
principal such Global Security is first surrendered to the Paying Agent. If any
of the Securities of this series are no longer represented by a Global Security,
(i) payments of principal and interest (including Contingent Interest, if any)
due at the Stated Maturity or earlier redemption or purchase of such Securities
A-2
shall be made at the office of the Paying Agent upon surrender of such
Securities to the Paying Agent, and (ii) payments of interest shall be made, at
the option of the Corporation, subject to such surrender where applicable, (A)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (B) by wire transfer at such place and
to such account at a banking institution in the United States as may be
designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto.
The Securities of this series shall be redeemable, in whole or from
time to time in part, at the option of the Corporation on any date on or after
May 20, 2007 (a "Redemption Date"), at a Redemption Price equal to 100% of the
principal amount of the Securities of this series to be redeemed plus any
accrued and unpaid interest (including Contingent Interest, if any) on the
principal amount to be redeemed to but excluding the Redemption Date.
Notice of any redemption by the Corporation will be mailed at least 30
days but not more than 60 days before any Redemption Date to each Holder of
Securities of this series to be redeemed. If Notice of a redemption is provided
and funds are deposited as required, interest will cease to accrue on and after
the Redemption Date on the Securities of this series or portions of Securities
of this series called for redemption. In the event that any Redemption Date is
not a Business Day, the Corporation will pay the Redemption Price on the next
Business Day without any additional interest or other payment due. If less than
all the Securities of this series are to be redeemed at the option of the
Corporation, the Trustee shall select, in such manner as it shall deem fair and
appropriate, the Securities of this series to be redeemed in whole or in part.
The Trustee may select for redemption Securities of this series and portions of
the Securities of this series in amounts of whole multiples of $1,000.
A Holder shall have the option to require the Corporation to purchase
any or all of the Securities of this series held by such Holder on May 15, 2007,
May 15, 2012 and May 15, 2017 (each, a "Put Date") at a purchase price (the
"Purchase Price") equal to the principal amount of the Securities of this series
to be purchased plus any accrued and unpaid interest (including Contingent
Interest, if any) to but excluding the Put Date, upon delivery of a Put Notice
containing the information set forth in the Indenture, from the opening of
business on the date that is 20 Business Days prior to such Put Date until the
close of business on the fifth Business Day prior to such Put Date and upon
delivery of the Securities of this series to the Paying Agent by the Holder as
set forth in the Indenture.
If a Fundamental Change shall occur at any time prior to Stated
Maturity, each Holder shall have the right, at such Holder's option and subject
to the terms and conditions of the Indenture, to require the Corporation to
purchase any or all of such Holder's Securities of this series or any portion of
the principal amount thereof that is equal to $1,000 or an integral multiple of
$1,000 on the day that is 30 days after the date of the Corporation Purchase
Notice of the occurrence of the Fundamental Change (subject to extension to
comply with applicable law) for a Fundamental Change Purchase Price equal to the
principal amount of Securities of this series purchased plus accrued and unpaid
interest (including Contingent Interest, if any) to the Fundamental Change
Purchase Date upon delivery of a Fundamental Change Purchase Notice containing
the information set forth in the Indenture.
A-3
Holders have the right to withdraw any Put Notice or Fundamental Change
Purchase Notice, as the case may be, by delivery to the Paying Agent of a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay a Fundamental Change Purchase Price or
Purchase Price, as the case may be, of all Securities of this series or portions
thereof to be purchased as of the Fundamental Change Purchase Date or the Put
Date, as the case may be, is deposited with the Paying Agent on the Business Day
following the Fundamental Change Purchase Date or the Put Date, as the case may
be, interest shall cease to accrue on such Securities of this series (or
portions thereof) on and after such date, and the Holder thereof shall have no
other rights as such (other than the right to receive the Fundamental Change
Purchase Price or Purchase Price, as the case may be, upon surrender of such
Note).
In the event of redemption or purchase of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
or unpurchased portion hereof will be issued in the name of the Holder hereof
upon the surrender hereof.
The Securities of this series shall not have a sinking fund.
The Securities of this series shall constitute the direct unsecured and
unsubordinated debt obligations of the Corporation and shall rank equally in
priority with the Corporation's existing and future unsecured and unsubordinated
indebtedness.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.
Dated:
Duke Energy Corporation
By:_________________________________
Name:
Title:
Attest:
___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
JPMorgan Chase Bank,
as Trustee
By:_________________________________
Authorized Officer
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(Reverse Side of Security)
This 1-3/4% Convertible Senior Note due 2023 is one of a duly
authorized issue of Securities of the Corporation (the "Securities"), issued and
issuable in one or more series under a Senior Indenture, dated as of September
1, 1998, as supplemented (the "Indenture"), between the Corporation and JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee (the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Corporation, the Trustee and the Holders of the
Securities issued thereunder and of the terms upon which said Securities are,
and are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof as 1-3/4% Convertible Senior Note due 2023
initially in the aggregate principal amount of $700,000,000 (plus up to an
additional $70,000,000 principal amount upon exercise by the Underwriters of
their over-allotment option pursuant to the Underwriting Agreement). Capitalized
terms used herein for which no definition is provided herein shall have the
meanings set forth in the Indenture.
The Corporation shall pay Contingent Interest in cash to the Holders of
the Securities of this series in respect of any six-month period from May 15 to
November 14 and from November 15 to May 14, commencing with the six-month period
beginning May 15, 2007, if the average Trading Price for each $1,000 principal
amount of the Securities of this series for the Applicable Five Trading Day
Period with respect to such interest period equals 120% or more of such
principal amount of the Securities of this series. The amount of Contingent
Interest payable per $1,000 principal amount of Securities of this series in
respect of any interest period shall equal 0.25% of the average Trading Price
for each $1,000 principal amount of the Securities of this series for the
Applicable Five Day Trading Period with respect to such interest period.
Contingent Interest, if any, will accrue from May 15 or November 15, as
applicable, and will be payable in the same manner, at the same times and to the
same Persons as ordinary interest. All payments of Contingent Interest shall be
made in cash.
Upon determination that Holders of the Securities of this series will
be entitled to receive Contingent Interest during an interest period, as
promptly as practicable after such determination, the Corporation shall publish
a notice containing such information with respect to the payment of Contingent
Interest in a newspaper of general circulation in The City of New York or
publish such information on its web site or through such other public medium as
the Corporation may use at that time.
Subject to the procedures set forth in the Indenture, a Holder may
convert Securities of this series into Common Stock of the Corporation on or
before the close of business on May 14, 2023 during the periods and upon
satisfaction of at least one of the conditions set forth below:
(a) in any calendar quarter after the quarter ended June 30,
2003 (and only during such calendar quarter) if the Last Reported Sale
Price for the Common Stock for at least 20 Trading Days during the
period of 30 consecutive Trading Days ending on the last Trading Day of
the previous calendar quarter equals or exceeds 120% of the Conversion
Price on such last Trading Day;
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(b) in the event that the Corporation calls any Securities of
this series for redemption, at any time prior to the close of business
on the second Business Day immediately preceding the Redemption Date;
(c) if the Corporation (1) elects to (A) distribute to all
holders of Common Stock rights entitling them to purchase, for a period
expiring within 45 days after the date of such distribution, shares of
Common Stock at less than the Last Reported Sale Price on the Trading
Day immediately preceding the declaration date of such distribution or
(B) distribute to all holders of Common Stock assets, debt securities
or rights to purchase securities of the Corporation, which distribution
has a per share value as determined by the Corporation's Board of
Directors and set forth in a Board Resolution exceeding 15% of the Last
Reported Sale Price of the Common Stock on the Trading Day immediately
preceding the declaration date for such distribution. In the case of
the foregoing clauses (A) and (B), the Corporation must notify the
Holders of the Securities of this series at least 20 Business Days
prior to the ex-dividend date for such distribution. Once the
Corporation has given such notice, Holders of the Securities of this
series may surrender such Securities for conversion at any time
thereafter until the earlier of the close of business on the Business
Day prior to the ex-dividend date or the Corporation's announcement
that such distribution will not take place. Notwithstanding the
foregoing, a Holder of the Securities of this series may not exercise
the foregoing right to convert if the Holder may participate in the
distribution without converting its Securities. As used herein, the
term "ex date," when used with respect to any issuance or distribution,
shall mean the first date on which the Common Stock trades regular way
on such exchange or in such market without the right to receive such
issuance or distribution; or (2) in the event that the Corporation
becomes a party to a consolidation, merger or binding share exchange
pursuant to which the Common Stock would be converted into cash or
property (other than securities), at any time from and after the date
which is 15 days prior to the anticipated effective date of the
transaction until 15 days after the actual effective date of such
transaction; or
(d) during any period that (1) the long-term credit rating
assigned to the Securities of this series by both Moody's Investors
Service, Inc. and Standard & Poor's Ratings Services is lower than Baa3
and BBB-, respectively; (2) both Moody's Investors Service, Inc. and
Standard & Poor's Ratings Services no longer rate the Securities of
this series or have withdrawn their ratings with respect to the
Securities of this series; or (3) either Moody's Investors Service,
Inc. or Standard & Poor's Ratings Services no longer rates the
Securities of this series or has withdrawn or suspended such rating and
the remaining rating is lower than Baa3 or BBB-, as applicable
(references to Moody's Investors Service, Inc. and Standard & Poor's
Ratings Services include any successors to those entities).
Securities of this series in respect of which a Holder has delivered a
notice of exercise of the option to require the Corporation to purchase such
Securities of this series may be converted only if the notice of exercise is
withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 42.3908 shares of Common Stock per
$1,000 principal amount, subject to adjustment in certain events described in
the Indenture. The Corporation shall
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deliver cash or a check in lieu of any fractional share of Common Stock.
Holders of Securities of this series at the close of business on a
Regular Record Date will receive payment of interest payable on the
corresponding Interest Payment Date notwithstanding the conversion of such
Securities of this series at any time after the close of business on such
Regular Record Date. Securities of this series surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the corresponding Interest Payment Date must be accompanied by
payment of an amount equal to the interest that the Holder is to receive on the
Securities of this series (except with respect to Securities of this series in
respect of which a Redemption Date or Fundamental Change Purchase Date has been
set that falls within this period or on such Interest Payment Date or to the
extent any overdue interest (or Contingent Interest, if any) exists at the time
of such conversion). Except as described above, no payment or adjustment will be
made for accrued interest on converted Securities of this series.
To convert the Securities of this series a Holder must (1) complete and
manually sign the irrevocable conversion notice on the back of the Securities of
this series (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent at the office maintained by the
Conversion Agent for such purpose, (2) surrender the Securities of this series
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Corporation or the Trustee
and (4) pay any transfer or similar tax, if required.
A Holder may convert a portion of the Securities of this series only if
the principal amount of such portion is $1,000 or an integral multiple of
$1,000. No payment or adjustment shall be made for dividends on the Common Stock
except as provided in the Indenture. On conversion of Securities of this series,
that portion of accrued and unpaid interest, including Contingent Interest, if
any, on such Securities attributable to the period from the most recent Interest
Payment Date (or, if no Interest Payment Date has occurred, from the Original
Issue Date) through the Conversion Date and Tax Original Issue Discount accrued
through the Conversion Date with respect to such converted Securities shall not
be cancelled, extinguished or forfeited, but rather shall be deemed to be paid
in full to the Holder thereof through delivery of the Common Stock (together
with any cash payment in lieu of fractional shares) in exchange for such
Securities being converted pursuant to the provisions hereof, and the fair
market value of such shares of Common Stock (together with any such cash payment
in lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for accrued and unpaid interest (including Contingent
Interest, if any) and Tax Original Issue Discount accrued through the Conversion
Date and the balance, if any, of such fair market value of such Common Stock
(and any such cash payment), shall be treated as issued in exchange for the
principal amount of such Securities being converted pursuant to the provisions
hereof.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner, with the effect and subject to
the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the
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Holders of the Securities of all series affected under the Indenture at any time
by the Corporation and the Trustee with the consent of the Holders of not less
than a majority in principal amount of the Outstanding Securities of all series
affected thereby (voting as one class). The Indenture contains provisions
permitting the Holders of not less than a majority in principal amount of the
Outstanding Securities of all series with respect to which a default under the
Indenture shall have occurred and be continuing (voting as one class), on behalf
of the Holders of the Securities of all such series, to waive, with certain
exceptions, such default under the Indenture and its consequences. The Indenture
also permits the Holders of not less than a majority in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Corporation with
certain provisions of the Indenture affecting such series. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Corporation and the Security Registrar and duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and of like tenor and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, Paying Agent, Conversion Agent and Security Registrar
under the Indenture, each in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Corporation or its Affiliates and may otherwise
deal with the Corporation or its Affiliates with the same rights it would have
if it were not Trustee, Paying Agent, Conversion Agent or Security Registrar.
The Corporation will be responsible for making all calculations called
for under the Securities of this series. These calculations include, but are not
limited to, determination of the Trading Price, Current Market Price, Last
Reported Sale Price, Spin-off Market Price, accrued interest payable (including
any Contingent Interest) on the Securities of this series and Conversion Rate of
the Securities of this series. The Corporation will make these calculations in
good faith and, absent manifest error, these calculations will be final and
binding on the Holders of the Securities of this series. Promptly after the
calculation thereby, the Corporation will provide to each of the Trustee and the
Conversion Agent an Officers' Certificate setting forth a schedule of its
calculations and each of the Trustee and the Conversion Agent is entitled to
rely
A-9
upon the accuracy of such calculations without independent verification. The
Trustee will forward the Corporation's calculations to any Holder upon the
request of such Holder.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Securities of this series and for covenant defeasance
at any time of certain covenants in the Indenture upon compliance with certain
conditions set forth in the Indenture.
Prior to due presentment of this Security for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to the limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same upon surrender of the Security or
Securities to be exchanged at the office or agency of the Corporation.
The Corporation agrees, and by acceptance of beneficial ownership
interest in the Securities of this series each beneficial holder of such
Securities will be deemed to have agreed, for United States federal income tax
purposes (1) to treat the Securities of this series as indebtedness that is
subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment Regulations") and,
for purposes of the Contingent Payment Regulations, to treat the fair market
value of any stock beneficially received by a beneficial holder upon any
conversion of such Securities as a contingent payment and (2) to be bound by the
Corporation's determination of the "comparable yield" and "projected payment
schedule," within the meaning of the Contingent Payment Regulations, with
respect to the Securities of this series. A Holder of Securities of this series
may obtain the issue price, the amount of original issue discount, issue date,
yield to maturity, comparable yield and projected payment schedule for such
Securities by submitting a written request for such information to the
Corporation at the following address: Duke Energy Corporation, 526 South Church
Street, Charlotte North Carolina 28202, Attention: David L. Hauser, Senior Vice
President and Treasurer.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT- ______ Custodian _______
(Cust) (Minor)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with rights of under Uniform Gifts to
survivorship and not as tenants in common Minors Act ________________
(State)
Additional abbreviations may also be used though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto (please
insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
agent to transfer said Security on the books of the Corporation, with full power
of substitution in the premises.
Dated: ____________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within instrument in
every particular without alteration or
enlargement, or any change whatever.
Signature Guarantee: _______________________
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SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Principal Amount of this
Amount of decrease in Amount of increase in Global Security Signature of authorized
Date Principal Amount of this Principal Amount of this following such decrease signatory of Trustee or
Global Security Global Security or increase Securities Custodian
- ------------------------------------------------------------------------------------------------------------------------------------
------- -------------- ---------- ------------ --------------
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FORM OF CONVERSION NOTICE
To: Duke Energy Corporation
The undersigned registered holder of this Security hereby exercises the
option to convert this Security, or portion hereof (which is $1,000 principal
amount or an integral multiple thereof) designated below, for shares of Common
Stock of Duke Energy Corporation in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares, if any, issuable and
deliverable upon such conversion, together with any check for cash deliverable
upon such conversion, and any Securities representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Security not converted are to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.
This notice shall be deemed to be an irrevocable exercise of the option
to convert this Security.
Dated: ____________________________________________
____________________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if shares of
Common Stock are to be issued, or Securities
to be delivered, other than to or in the
name of the registered holder.
____________________________________________
Signature Guarantee
Fill in for registration of shares if to be
delivered, and Securities if to be issued other
than to and in the name of registered holder:
_______________________________________________
(Name) Certificate No.(s) of Securities (not required
for Global Securities) ______________________
_______________________________________________
(Street Address) Principal amount to be converted
(if less than all): $__________,000
_______________________________________________ ________________________________________
(City state and zip code) Social Security or Other Taxpayer Number
Please print name and address
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FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
To: Duke Energy Corporation
The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from Duke Energy Corporation (the "Corporation") as to the
occurrence of a Fundamental Change with respect to the Corporation and requests
and instructs the Corporation to repurchase this Security, or the portion hereof
(which is $1,000 principal amount or a integral multiple thereof) designated
below, in accordance with the terms and conditions specified in this Security
and the Indenture referred to in this Security and directs that the check in
payment for this Security or the portion thereof and any Securities representing
any unrepurchased principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
any portion of this Security not repurchased is to be issued in the name of a
Person other than the undersigned, the undersigned shall pay all transfer taxes
payable with respect thereto.
Dated: ____________________________________________
____________________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if Securities
are to be delivered, other than to or in the
name of the registered holder.
____________________________________________
Signature Guarantee
Fill in for registration of Securities if to be issued other than to and in the
name of registered holder:
_______________________________________________
(Name) Certificate No.(s) of Securities (not required
for Global Securities) ______________________
_______________________________________________
(Street Address) Principal amount to be converted
(if less than all): $__________,000
_______________________________________________ ________________________________________
(City state and zip code) Social Security or Other Taxpayer Number
Please print name and address
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FORM OF PUT NOTICE
To: Duke Energy Corporation
The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from Duke Energy Corporation (the "Corporation") as to the
holder's option to require the Corporation to repurchase this Security and
requests and instructs the Corporation to repurchase this Security, or the
portion hereof (which is $1,000 principal amount or a integral multiple thereof)
designated below, in accordance with the terms and conditions specified in this
Security and the Indenture referred to in this Security and directs that the
check in payment for this Security or the portion thereof and any Securities
representing any unrepurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this Security not repurchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.
Dated: ____________________________________________
____________________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if Securities
are to be delivered, other than to or in the
name of the registered holder.
____________________________________________
Signature Guarantee
Fill in for registration of Securities if to be issued other than to and in the
name of registered holder:
_______________________________________________
(Name) Certificate No.(s) of Securities (not required
for Global Securities) ______________________
_______________________________________________
(Street Address) Principal amount to be converted
(if less than all): $__________,000
_______________________________________________ ________________________________________
(City state and zip code) Social Security or Other Taxpayer Number
Please print name and address
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EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
JPMorgan Chase Bank,
as Trustee
By: ___________________________________
Authorized Officer
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