Exhibit 3
ARTICLES OF AMENDMENT
OF
DUKE ENERGY CORPORATION
The undersigned corporation hereby submits these Articles of Amendment for
the purpose of amending its Articles of Incorporation:
1. The name of the corporation is Duke Energy Corporation.
2. The following amendments to the Articles of Incorporation of the
corporation were adopted by the holders of its Common Stock on the 25th day of
April, 2002, in the manner prescribed by Chapter 55 of the General Statutes of
North Carolina:
Article III of the Articles of Incorporation is hereby amended by deleting
Article III in its entirety and substituting therefor a new Article III to read
as follows:
The purpose for which the Corporation is organized is to engage in any
lawful activity for which corporations may be organized under Chapter 55 of
the General Statutes of North Carolina, as amended from time to time.
Article IV of the Articles of Incorporation is hereby amended by deleting
Article IV in its entirety and substituting therefor a revised Article IV
to read as follows:
The total number of authorized shares of this Corporation is
2,044,000,000 shares, divided into 12,500,000 shares of Preferred Stock of
the par value of $100 each (hereafter called Preferred Stock), 10,000,000
shares of Preferred Stock A of the par value of $25 each (hereafter called
Preferred Stock A), 20,000,000 shares of Serial Preferred Stock without par
value (hereafter called Serial Preferred Stock), 1,500,000 shares of
Preference Stock of the par value of $100 each (hereafter called Preference
Stock), and 2,000,000,000 shares of Common Stock without par value
(hereafter called Common Stock).
The Preferred Stock and the Preferred Stock A (sometimes collectively
referred to as the Preferred Stocks) shall rank equally with no preference
or priority of the Preferred Stock over the Preferred Stock A or of the
Preferred Stock A over the Preferred Stock with respect to dividends and
distribution of assets upon liquidation, dissolution or winding up of the
Corporation. The Serial Preferred Stock shall rank junior to the Preferred
Stocks and senior to the Preference Stock with respect to dividends and
distribution of assets upon liquidation, dissolution or winding up of the
Corporation.
(a) Preferred Stock and Preferred Stock A
(1) The Board of Directors is hereby empowered, subject to the
provisions of paragraph (9) of this section (a) of Article IV, to cause the
authorized and unissued shares of the Preferred Stock and of the Preferred
Stock A to be issued in one or more series from time to time, upon such
consideration (not less than the par value thereof), upon such terms, and
in such manner, and with such variations as to (i) the rates of dividend
payable thereon, (ii) the periods of time during which dividends shall
accrue and the dates on which dividends shall become payable on the shares
of such series, (iii) the terms on which the same may be redeemed, (iv) the
terms or amount of any sinking fund provided for the purpose of redemption
thereof, and (v) the terms upon which the holders thereof may convert the
same into stock of any other class or classes, or into one or more series
of the same class, or of another class or classes, as may be determined by
the Board of Directors at the time of the creation of each series, but the
amount at which said stock may be redeemed shall in no case be less than
the par value thereof.
(2) The shares of each series of the Preferred Stock and of the
Preferred Stock A shall entitle the holders thereof to receive out of the
retained earnings of the Corporation or net profits earned during the
current or preceding accounting period (each said period to be not less
than six months or more than one year in duration) or, if retained earnings
and net profits are not available, out of capital surplus, a dividend at
the annual rate fixed for the particular series, but not exceeding such
rate, cumulative from and after the date of issuance thereof, payable
quarterly on the 16th day of March, June, September and December of each
year (or, if any such day shall not be a business day, on the next
succeeding business day) or at such intervals and on such dates as
otherwise are expressly set forth in the resolution of the Board of
Directors creating such series or, if such intervals and dividend payment
dates shall vary from time to time for such series, the method by which
such intervals and dates shall be determined, before any dividend shall be
set apart for or paid on the Serial Preferred Stock, the Preference Stock
or the Common Stock. Any dividends declared or paid on the Preferred Stock
or the Preferred Stock A in an amount less than full cumulative dividends
payable at such time upon all shares of the Preferred Stock or the
Preferred Stock A outstanding shall, if more than one series be
outstanding, be divided among the different series in proportion to the
aggregate amounts that would be distributable to the Preferred Stock
simultaneously declared and paid thereon at such time without regard to the
applicable dividend payment dates.
(3) All series of the Preferred Stock shall rank equally and be alike
in all respects except for the variations and differences between series
herein expressly provided for, and all series of the Preferred Stock A
shall rank equally and be alike in all respects except for the variations
and differences between series herein expressly provided for.
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(4) In case of liquidation or dissolution or distribution of the
assets of the Corporation, there shall be paid (a) to the holders of the
Preferred Stock (i) in case such liquidation, dissolution or distribution
shall be voluntary, $105 per share, and (ii) in case such liquidation,
dissolution or distribution shall be involuntary, $100 per share, and (b)
to the holders of the Preferred Stock A (i) in case such liquidation,
dissolution or distribution shall be voluntary, $26.25 per share, and (ii)
in case such liquidation, dissolution or distribution shall be involuntary,
$25 per share, plus in each case the amount of dividends (if any)
accumulated and unpaid thereon, before any amount shall be payable to the
holders of the Serial Preferred Stock, the Preference Stock or the Common
Stock; the balance of the assets of the Corporation, subject to the rights
of the holders of the Serial Preferred Stock and the holders of the
Preference Stock, shall be distributed ratably among the holders of the
Common Stock.
(5) Holders of the Preferred Stock and of the Preferred Stock A shall
not be entitled to any payment by way of dividends or otherwise, or have
any rights in the property of the Corporation or in the distribution
thereof, other than specifically provided in the preceding paragraphs.
(6) The Preferred Stock or the Preferred Stock A may be called for
redemption in whole or in part on any dividend date at the option of the
Board of Directors by mailing notice thereof to the holders of record of
the shares to be redeemed at least thirty (30) days prior to the date fixed
for redemption, and such shares may be then redeemed by paying for each
share so called all accrued and unpaid dividends thereon to the date fixed
for such redemption and such additional sum as shall have been fixed by the
Board of Directors as the redemption price of stock of the series of which
the stock so to be redeemed is a part. Whenever less than all of the
outstanding shares of the Preferred Stock or of the Preferred Stock A of
any series are to be redeemed, either (i) the shares of such series to be
redeemed shall be selected by lot in such manner as may be prescribed by
the Board of Directors, or (ii) the redemption shall be made in such manner
that each holder of the Preferred Stock or of the Preferred Stock A of the
series to be redeemed shall participate therein in the proportion that the
number of shares of such series to be redeemed bears to the whole number of
shares of stock of that series then outstanding, provided that there shall
be no obligation to redeem less than a whole share. From and after the date
of redemption, unless default be made by the Corporation in payment of the
redemption price pursuant to such notice, all dividends on the shares
called for redemption shall cease to accrue, and all rights of the holders
thereof in respect of such stock, except the right to receive the
redemption price plus accrued and unpaid dividends to the date fixed for
such redemption, shall cease and determine.
(7) No holder of any of the Preferred Stock or of the Preferred Stock
A shall be entitled to vote at any election of directors or, except as
otherwise
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required by statute and except as provided in paragraphs (8), (9), (10) and
(11) of this section (a) of Article IV, on any other matter submitted to
the shareholders, provided that if and whenever dividends on any part of
the Preferred Stock or of the Preferred Stock A shall be in arrears in an
amount equivalent to the aggregate dividends required to be paid on such
Preferred Stock or such Preferred Stock A in any period of twelve (12)
calendar months the holders of the Preferred Stock as a class shall
thereafter at all elections of directors have the exclusive right to elect
such number of directors of the Corporation as shall constitute a majority
of the authorized number of directors, the holders of the Preferred Stock A
as a class shall thereafter at all elections of directors have the
exclusive right to elect two directors, and the holders of the Common Stock
of the Corporation and the holders of such series of the Serial Preferred
Stock as are entitled to vote generally with respect to the election of
directors, voting together, shall have the exclusive right, subject to the
right, if any, of holders of the Serial Preferred Stock to elect directors,
and the right of the holders of the Preference Stock as a class to elect
two directors, under certain circumstances, to elect the remaining number
of directors of the Corporation which right of the holders of the Preferred
Stocks, however, shall cease when all accrued and unpaid dividends on the
Preferred Stocks shall have been paid in full. The terms of office of all
persons who may be directors of the Corporation at the time when the right
to elect directors shall accrue to the holders of the Preferred Stocks, as
herein provided, shall terminate upon the election of their successors at
the next annual meeting of the shareholders or at an earlier special
meeting of the shareholders held as hereinafter provided. Such special
meeting shall be held at any time after the accrual of such voting power,
upon notice similar to that provided in the By-Laws for an annual meeting,
which notice shall be given at the request in writing of the holders of not
less than ten (10%) percent of the number of shares of the then outstanding
Preferred Stocks, addressed to the Secretary of the Corporation at its
principal business office. Upon the termination of such right of the
holders of the Preferred Stocks to elect directors of the Corporation, the
terms of office of all the directors of the Corporation shall terminate
upon the election of their successors at the next annual meeting of the
shareholders or at an earlier special meeting of the shareholders held as
hereinafter provided. Such special meeting shall be held at any time after
the termination of such right of the holders of the Preferred Stocks to
elect directors, upon notice similar to that provided in the By-Laws for an
annual meeting, which notice shall be given at the request in writing of
the holders of not less than ten (10%) percent of the number of the then
outstanding shares of stock of all classes of the Corporation entitled to
vote generally with respect to the election of directors, addressed to the
Secretary of the Corporation at its principal business office.
(8) (i) So long as any of the Preferred Stock remains outstanding, the
authorization of the holders of at least two-thirds (2/3) of the Preferred
Stock
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then outstanding, voting as a class regardless of series (given at a
meeting called for that purpose), shall be necessary for effecting or
validating the amendment, alteration, change or repeal of any of the
express terms of the Preferred Stock, or any series thereof, then
outstanding, in a manner prejudicial to the holders thereof; provided that
if any such amendment, alteration, change or repeal would be prejudicial to
the holders of the shares of one or more, but not all, of the series of the
Preferred Stock at the time outstanding, such authorization shall be
required only of the holders of at least two-thirds (2/3) of the total
number of outstanding shares of all series so affected.
(ii) So long as any of the Preferred Stock A remains outstanding, the
authorization of the holders of at least two-thirds (2/3) of the Preferred
Stock A then outstanding, voting as a class regardless of series (given at
a meeting called for that purpose), shall be necessary for effecting or
validating the amendment, alteration, change or repeal of any of the
express terms of the Preferred Stock A, or any series thereof, then
outstanding, in a manner prejudicial to the holders thereof; provided that
if any such amendment, alteration, change or repeal would be prejudicial to
the holders of the shares of one or more, but not all, of the series of the
Preferred Stock A at the time outstanding, such authorization shall be
required only of the holders of at least two-thirds (2/3) of the total
number of outstanding shares of all series so affected.
(9) So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the affirmative vote of the holders of at least
two-thirds (2/3) of the Preferred Stock then outstanding, voting as a class
regardless of series, and the affirmative vote of the holders of at least
two-thirds (2/3) of the Preferred Stock A then outstanding, voting as a
class regardless of series, shall be necessary to enable the Corporation to
issue shares of Preferred Stock in excess of 250,000 shares or shares of
Preferred Stock A in excess of 1,000,000 shares, or any other class of
stock having rights in the distribution of the earnings or assets of the
Corporation prior to or on a parity with those of the Preferred Stock or of
the Preferred Stock A, or any obligations convertible into or evidencing
the right to purchase any of such shares of stock, unless both
(i) the net earnings of the Corporation available for dividends
on the Preferred Stock and on the Preferred Stock A, determined in
accordance with generally accepted accounting practices, for any
twelve (12) consecutive calendar months within the fifteen (15)
calendar months preceding the month within which the additional shares
shall be issued, shall have been at least twice the dividend
requirements for a twelve (12) months' period upon the entire amount
of the Preferred Stock and of the Preferred Stock A and all such other
stock ranking prior to or on a parity with the Preferred Stock and the
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Preferred Stock A as to dividends or other distributions to be
outstanding immediately after the proposed issue of shares of the
Preferred Stock or of the Preferred Stock A or such other stock, and
(ii) the total net assets of the Corporation at a date not more
than ninety (90) days prior to the date on which the proposed stock is
to be issued shall equal at least twice the aggregate amount payable,
upon the involuntary liquidation of the Corporation, to the holders of
the Preferred Stock and of the Preferred Stock A and such other stock
to be outstanding immediately after the proposed issue of such
additional shares.
(10) So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the affirmative vote of the holders of at least
two-thirds (2/3) of the Preferred Stock then outstanding, voting as a class
regardless of series, and the affirmative vote of the holders of at least
two-thirds (2/3) of the Preferred Stock A then outstanding, voting as a
class regardless of series, shall be necessary to authorize the creation
of, or an increase in the authorized number of shares of, any stock having
preferential rights in the distribution of earnings or assets of the
Corporation prior to or on a parity with those of the outstanding Preferred
Stock or of the outstanding Preferred Stock A.
(11) So long as any of the Preferred Stock or of the Preferred Stock A
remains outstanding, the consent or authorization of the holders of at
least two-thirds (2/3) of the Preferred Stock then outstanding, voting as a
class regardless of series (given at a meeting called for that purpose),
and the consent or authorization of the holders of at least two-thirds
(2/3) of the Preferred Stock A then outstanding, voting as a class
regardless of series (given at a meeting called for that purpose), shall be
necessary for effecting or validating (i) the sale or exchange of all, or
substantially all, of the property and assets of the Corporation, or (ii)
the merger or consolidation of the Corporation with any other corporation
or corporations (other than subsidiaries of the Corporation); provided that
the provisions of this paragraph shall not apply to the purchase or other
acquisition by the Corporation of franchises or other assets of another
corporation, or to any merger or consolidation ordered or authorized by the
Federal Power Commission or by any succeeding regulatory authority of the
United States having jurisdiction in the premises.
(12) At any meeting at which the holders of the Preferred Stock or of
the Preferred Stock A shall have the right to vote as a class, the presence
in person or by proxy of the holders of a majority of the outstanding
shares of the Preferred Stock or of the Preferred Stock A shall be required
to constitute a quorum of such class. Whenever the holders of the
outstanding Preferred Stock or of the outstanding Preferred Stock A shall
have the right
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to vote, each holder thereof shall be entitled to one vote for each share
standing in his name.
(b) Serial Preferred Stock
(1) The Serial Preferred Stock may be issued from time to time as
herein provided in one or more series. The Board of Directors is hereby
expressly granted authority, subject to the provisions of this Article IV,
to issue from time to time Serial Preferred Stock in one or more series out
of the then authorized and unissued shares of Serial Preferred Stock and
with respect to each series to fix, by resolution or resolutions providing
for the issuance of such series, such designations, preferences,
limitations and relative rights of such series as may be permitted to be
fixed by the Board of Directors by the laws of the State of North Carolina
as in effect at the time the particular series is authorized, including,
without limitation, authority so to fix any one or more of the following:
(i) the designation of such series;
(ii) the number of shares of the series;
(iii) the dividend rate or rates, if any, thereof (or method of
determining such dividends), the conditions and dates upon which such
dividends shall be payable, the preference or relation of such
dividends, subject to the provisions of this Article IV, to dividends
payable on any other class or classes of capital stock of the
Corporation, and whether such dividends shall be cumulative or
noncumulative;
(iv) whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to such
redemption, the times, prices, rates, adjustments and other terms and
conditions of such redemption;
(v) the terms and amount of any sinking or similar fund provided
for the purchase or redemption of the shares of such series;
(vi) providing that the shares of such series may be convertible
into or exchangeable for shares of Common Stock or other securities of
the Corporation or of any other corporation or other entity and the
times, prices, rates, adjustments and other terms and conditions of
such conversion or exchange;
(vii) the extent, if any, to which the holders of the shares of
such series shall be entitled to vote as a series or otherwise,
subject to
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the provisions of this Article IV and as otherwise may be provided by
law, with respect to the election of directors or otherwise;
(viii) the restrictions and conditions, if any, upon the issue of
any additional Serial Preferred Stock ranking on a parity with or
prior to such shares as to dividends or upon dissolution;
(ix) the rights of the holders of the shares of such series upon
the liquidation, dissolution or distribution of the assets of the
Corporation, which rights may be different in case such liquidation,
dissolution or distribution shall be voluntary or involuntary; and
(x) any other preferences, limitations or relative rights of
shares of such series consistent with this Article IV and applicable
law.
All shares of the Serial Preferred Stock of the same series shall be
identical in all respects. All shares of the Serial Preferred Stock,
irrespective of series, shall constitute one and the same class of stock,
shall be of equal rank and shall be identical in all respects except that
to the extent not otherwise limited in this Article IV any series may
differ from any other series with respect to any one or more of the
designations, preferences, limitations and relative rights described or
referred to in subparagraphs (i) to (x), inclusive above.
(c) Preference Stock
(1) The Preference Stock may be issued from time to time as herein
provided in one or more series. The Board of Directors of the Corporation
is hereby expressly granted authority, subject to the provisions of this
Article IV, to issue from time to time Preference Stock in one or more
series out of the then authorized and unissued shares of Preference Stock
and with respect to each series to fix, by resolution or resolutions
providing for the issuance of such series, such designations, preferences,
limitations and relative rights of such series as may be permitted to be
fixed by the Board of Directors by the laws of the State of North Carolina
as in effect at the time the particular series is authorized by the Board
of Directors, including, without limitation, authority so to fix any one or
more of the following:
(i) the distinctive designation of such series and the number of
shares which shall constitute such series;
(ii) the annual dividend rate for the shares of such series;
(iii) the terms on which shares of such series may be redeemed,
including, without limitation, the redemption price or
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prices for such series, which may consist of a redemption price or
scale of redemption prices applicable only to redemption in connection
with a sinking fund and the same or a different redemption price or
scale of redemption prices applicable to any other redemption;
(iv) the terms and amount of any sinking fund provided for the
purchase or redemption of shares of such series;
(v) the amount per share payable on the shares of such series
upon the voluntary and involuntary liquidation, dissolution or winding
up of the Corporation, which amount may vary depending upon whether
such liquidation, dissolution or winding up is voluntary or
involuntary; and
(vi) the terms and conditions, if any, upon which holders of
shares of such series may convert the same into, or exchange the same
for, Common Stock, as well as provisions for adjustment of the
conversion rate in such events as the Board of Directors shall
determine.
All shares of Preference Stock of the same series shall be identical
in all respects. All shares of Preference Stock, irrespective of series,
shall constitute one and the same class of stock, shall be of equal rank
and shall be identical in all respects except that to the extent not
otherwise limited in this Article IV any series may differ from any other
series with respect to any one or more of the designations, preferences,
limitations and relative rights described or referred to in subparagraphs
(i) to (vi), inclusive above.
(2) Subject to full dividends accrued on all outstanding shares of
Preferred Stocks and Serial Preferred Stock for all past dividend periods
and for the then current dividend period having been paid or declared and
set apart for payment, holders of the Preference Stock shall be entitled to
receive, but only when and as declared by the Board of Directors out of
funds legally available for the declaration and payment of dividends,
cumulative dividends in cash at the annual dividend rate per share fixed
for the particular series, and no more, payable in respect of each
quarterly dividend period, commencing on the date specified for the first
dividend payment to shareholders of record on the respective dates fixed in
advance for the purpose by the Board of Directors prior to the payment of
each such dividend, which record date for each dividend shall be the same
for all series.
Dividends on shares of each series of the Preference Stock shall be
cumulative:
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(i) on shares of any series issued prior to the first dividend
payment date for such series, from the date of issuance of such
shares; and
(ii) on shares of any series issued on or after such first
dividend payment date, from the quarterly dividend payment date next
preceding the date of issuance of such shares or from the date of
issuance if that be a dividend payment date.
No dividend shall be declared on any series of the Preference Stock
for any quarterly dividend period unless there shall have been paid or
declared and set apart for payment like proportionate dividends, ratably,
in proportion to the annual dividend rates fixed therefor, on all shares at
the time outstanding of all series of the Preference Stock, in respect of
the same quarterly dividend period to the extent that such shares are
entitled to receive dividends for such quarterly dividend period.
The expression "dividends accrued," as used in this paragraph (2) and
in any resolutions providing for the issuance of series of the Preference
Stock, shall mean the sum of amounts in respect of shares of the particular
class or series then outstanding which, as to each share, shall be an
amount computed at the dividend rate per annum fixed for the particular
share from the date from which dividends on such share became cumulative to
the date with reference to which the expression is used, irrespective of
whether such amount or any part thereof shall have been declared as
dividends or there shall have existed any funds legally available for the
declaration and payment thereof, less the aggregate of all dividends paid
on such share.
No dividend shall be declared or paid or set aside for payment or
other distribution declared or made upon the Common Stock, nor shall any
Common Stock be purchased or otherwise acquired for any consideration by
the Corporation or any subsidiary, while any of the Preference Stock is
outstanding, unless, in each case:
(a) full dividends accrued on all outstanding shares of the
Preference Stock for all past dividend periods shall have been paid or
declared and set apart for payment; and
(b) the Corporation shall have made, or set aside for payment,
all payments, if any, then or theretofore due under the requirements
of any sinking fund for the purchase or redemption of shares of any
series of the Preference Stock.
(3) Except as otherwise provided by law, the holders of the Preference
Stock shall not have any right to vote for the election of directors or for
any other purpose except as set forth below:
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(i) In the event that at any time, or from time to time:
(a) six (6) or more quarterly dividends, whether consecutive
or not, on any series of the Preference Stock shall be in arrears
and unpaid, whether or not earned or declared; or
(b) the Corporation shall not have made, or set aside for
payment, all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption
of shares of any series of the Preference Stock;
the holders of the Preference Stock of all series then outstanding,
voting as a class without regard to series, shall have, subject to the
rights of the holders of the Preferred Stocks and the rights, if any,
of holders of the Serial Preferred Stock to elect directors under
certain circumstances, the exclusive right to elect two directors at
the next annual meeting of shareholders. In any such event, subject to
the voting rights of the Preferred Stocks and the voting rights, if
any, of the Serial Preferred Stock to elect directors under certain
circumstances, the holders of the Common Stock and the holders of such
series of the Serial Preferred Stock as are entitled to vote generally
with respect to the election of directors, to the exclusion of the
holders of the Preference Stock entitled to elect two members of the
Board pursuant to this paragraph (3), voting together, shall be
entitled to elect the balance of the Board of Directors.
The voting rights of the holders of the Preference Stock to elect
two directors shall continue until:
(x) all dividends on the Preference Stock in arrears shall
have been paid in full and dividends on the Preference Stock for
the current dividend period shall have been paid or declared and
set aside for payment; and
(y) all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption
of shares of any series of the Preference Stock shall have been
made or set aside for payment;
in which event the voting rights of the holders of the Preference
Stock to elect two directors shall terminate, subject to revival as
aforesaid, upon the occurrence of any of the events specified in (a)
or (b) of this clause (i) of this paragraph (3), and in the event of
the termination of such voting right, the directors who have been
elected by the holders
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of the Preference Stock shall continue in office until the next annual
meeting of shareholders.
(ii) The affirmative approval of the holders of at least
two-thirds (2/3) of the Preference Stock at the time outstanding,
voting as a class without regard to series, shall be required for any
amendment of the Articles of Incorporation altering materially any
existing provision of the Preference Stock or for the creation, or an
increase in the authorized amount, of any class of stock ranking, as
to dividends or assets, prior to the Preference Stock, and the
affirmative approval of the holders of at least a majority of the
Preference Stock at the time outstanding, voting as a class without
regard to series, shall be required for an increase in the authorized
amount of the Preference Stock or for the creation, or an increase in
the authorized amount, of any class of stock ranking, as to dividends
or assets, on a parity with the Preference Stock; provided, however,
that if any amendment of the Articles of Incorporation shall affect
adversely the rights or preferences of one or more, but not all, of
the series of Preference Stock at the time outstanding or shall
unequally adversely affect the rights or preferences of different
series of Preference Stock at the time outstanding, the affirmative
approval of the holders of at least two-thirds (2/3) of such shares of
each such series so adversely or unequally adversely affected shall be
required in lieu of or (if such affirmative approval is required by
law) in addition to the affirmative approval of the holders of at
least two-thirds (2/3) of the outstanding shares of Preference Stock
as a class.
At any meeting at which the holders of the Preference Stock shall
have the right to vote as a class, the presence in person or by proxy
of the holders of a majority of the outstanding shares of Preference
Stock shall be required to constitute a quorum of such class. Each
holder of Preference Stock entitled to vote at any particular time
shall have one vote for each share of stock held of record by him.
(4) The Preference Stock shall rank junior to the Preferred Stocks and
the Serial Preferred Stock with respect to the distribution of assets of
the Corporation. After the payment to the holders of the Preferred Stocks
and the Serial Preferred Stock of all amounts payable to them in the event
of any liquidation or dissolution or distribution of the assets (whether
voluntary or involuntary) of the Corporation, in the event of any
liquidation, dissolution or winding up (whether voluntary or involuntary)
of the Corporation, the holders of each series of the Preference Stock at
the time outstanding shall be entitled to be paid in cash the distributive
amount fixed for the particular series, which shall include dividends
accrued thereon to the date fixed for payment of such distributive amounts,
and no more, before any such
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distribution or payment shall be made to the holders of Common Stock.
Neither the consolidation nor merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, shall be deemed a
liquidation, dissolution or winding up of the Corporation.
In the event of any liquidation, dissolution or winding up (whether
voluntary or involuntary) of the Corporation, no payment shall be made to
the holders of any series of the Preference Stock unless there shall
likewise be paid at the same time to the holders of all shares at the time
outstanding of each series of the Preference Stock like proportionate
distributive payments, ratably, in proportion to the full distributive
payments to which they are respectively entitled.
(5) The Corporation, at the option of the Board of Directors, may
redeem at any time or times, and from time to time, all or any part of any
one or more series of Preference Stock outstanding upon notice duly given
as hereinafter specified, by paying for each share the then applicable
redemption price fixed by the Board of Directors as provided herein, plus
an amount equal to dividends accrued thereon to the date fixed for
redemption; provided, however, that a notice specifying the shares to be
redeemed and the time and place of redemption shall be mailed, addressed to
the holders of record of the Preference Stock to be redeemed at their
respective addresses as the same shall appear upon the books of the
Corporation, not less than thirty (30) days prior to the date fixed for
redemption. If less than the whole amount of any outstanding series of
Preference Stock is to be redeemed, the shares of such series to be
redeemed shall be selected by lot or pro rata in any manner determined by
resolution of the Board of Directors to be fair and proper. From and after
the date fixed in any such notice as the date of redemption (unless default
shall be made by the Corporation in providing moneys at the time and place
of redemption for the payment of the redemption price), all dividends upon
the Preference Stock so called for redemption shall cease to accrue, and
all rights of the holders of said Preference Stock as shareholders in the
Corporation, except the right to receive the redemption price upon
surrender of the certificate representing the Preference Stock so called
for redemption, duly endorsed for transfer, if required, shall cease and
determine. With respect to any shares of Preference Stock so called for
redemption, if, before the redemption date, the Corporation shall deposit
with a bank or trust company in the Borough of Manhattan, City of New York,
having a capital and surplus of at least $5,000,000, funds necessary for
such redemption, in trust, to be applied to the redemption of the shares of
Preference Stock so called for redemption, then from and after the date of
such deposit, all rights of the holders of such shares of Preference Stock,
so called for redemption, shall cease and determine, except the right to
receive, on and after the redemption date, the redemption price upon
surrender of the certificates representing such shares
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of Preference Stock, so called for redemption, duly endorsed for transfer,
if required. Any interest accrued on such funds shall be paid to the
Corporation from time to time. Any funds so deposited and unclaimed at the
end of six (6) years from such redemption date shall be released or repaid
to the Corporation, after which the holders of such shares of Preference
Stock so called for redemption shall look only to the Corporation for
payment of the redemption price.
If at any time the Corporation shall have failed to declare and pay or
set apart for payment dividends in full upon the Preference Stock of all
series for all past dividend periods, or shall not have made, or set aside
for payment, all payments, if any, then or theretofore due under the
requirements of any sinking fund for the purchase or redemption of shares
of any series of the Preference Stock, thereafter and until all such
dividends shall have been paid in full or declared and set apart for
payment and all sinking fund payments shall have been made, or set aside
for payment, the Corporation shall not redeem or purchase, or permit any
subsidiary to purchase, for any purpose, any shares of Preference Stock of
any series, unless all shares of Preference Stock of all series then
outstanding shall be redeemed or purchased.
(d) Common Stock
(1) The Corporation may, from time to time, issue and sell any of its
authorized and unissued shares of Common Stock for such consideration, upon
such terms and in such manner as may from time to time be fixed and
determined by the Board of Directors, and any and all such shares so
issued, the full consideration for which shall have been paid, shall be
conclusively deemed to be fully paid and nonassessable.
(2) Whenever the full dividends on the Preferred Stocks, on the Serial
Preferred Stock and on the Preference Stock at the time outstanding for all
past dividend periods and for the then current dividend period shall have
been paid, or declared and a sum sufficient for the payment thereof set
apart, then, and then only, such dividends (payable in cash, stock or
otherwise) as may be determined by the Board of Directors, may be declared
and paid on the Common Stock, from time to time, out of the remaining
retained earnings or net profits of the Corporation, and the Preferred
Stocks, the Serial Preferred Stock or the Preference Stock shall not be
entitled to participate in any such dividends, whether payable in cash,
stock or otherwise.
(3) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment in full has
been made to the holders of the Preferred Stocks, to the holders of the
Serial Preferred Stock and to the holders of the Preference Stock of the
amounts to
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which they are respectively entitled or sufficient sums have been set apart
for the payment thereof, the holders of the Common Stock shall be entitled
to receive ratably any and all assets remaining to be paid or distributed,
and neither the holders of the Preferred Stocks, the holders of the Serial
Preferred Stock nor the holders of the Preference Stock shall be entitled
to share therein.
(4) Holders of the Common Stock shall be entitled to one (1) vote for
each share of such stock held at any and all meetings of the shareholders
of the Corporation, and, except as otherwise stated in this Article IV or
as otherwise provided by law or by the resolution or resolutions fixing the
designations, preferences, limitations and relative rights of any series of
Serial Preferred Stock, the exclusive voting power for all purposes shall
be vested in the holders of the Common Stock.
Article VII of the Articles of Incorporation is hereby amended by deleting
Article VII in its entirety and substituting therefor a revised Article VII to
read as follows:
In addition to any requirements of the By-Laws and the North Carolina
Business Corporation Act as in effect from time to time (and
notwithstanding the fact that a lesser vote may be specified by the By-Laws
or the North Carolina Business Corporation Act), the affirmative vote of
the holders of at least a majority of the combined voting power of the then
outstanding shares of stock of all classes of the Corporation entitled to
vote generally in the election of directors, voting together as a single
class, shall be required for the shareholders of the Corporation to adopt,
amend, alter, change or repeal any provisions contained in the By-Laws of
the Corporation. The provisions of this Article VII may not be altered,
amended or repealed in any respect, nor may any provision inconsistent
therewith be adopted, unless such alteration, amendment, repeal or adoption
is approved by the affirmative vote of the holders of at least a majority
of the combined voting power of the then outstanding shares of stock of all
classes of the Corporation entitled to vote generally in the election of
directors, voting together as a single class.
Article VIII of the Articles of Incorporation is hereby amended by deleting
clause (a) of Article VIII in its entirety and substituting therefor a revised
clause (a) of Article VIII to read as follows:
(a) Number. Except as may be otherwise fixed by or pursuant to the
------
provisions of these Articles of Incorporation, as amended from time to
time, relating to the rights of the holders of any class of stock having a
preference over the Common Stock as to dividends or upon liquidation to
elect directors under specified circumstances, the number of directors
constituting the Board of Directors shall not be less than nine (9) nor
more than eighteen (18), as may be fixed from time to time by the Board of
Directors.
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3. Only shares of Common Stock of the corporation were entitled to vote
with respect to these amendments. The number of such shares of the corporation
outstanding at the time of such adoption was 829,807,359; the number of votes
entitled to be cast thereon was 778,199,474; and the number of votes
indisputably represented at the meeting of shareholders was 654,205,377. The
total number of undisputed votes cast for each of the four amendments described
herein was sufficient for approval of the respective amendment, as required by
Chapter 55 of the General Statues of North Carolina.
This the 1st day of May, 2002.
DUKE ENERGY CORPORATION
By: /s/ Richard B. Priory
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Richard B. Priory
Chairman of the Board, President
and Chief Executive Officer
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