As filed with the Securities and
Exchange Commission on November 20, 2009
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
PIEDMONT NATURAL GAS COMPANY,
INC.
(Exact name of registrant as
specified in its charter)
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North Carolina
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56-0556998
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification
No.)
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4720 Piedmont Row
Drive
Charlotte, North Carolina
28210
Telephone:
(704) 364-3120
(Address, including zip code,
and telephone number, including area code, of registrants
principal executive offices)
Jane R. Lewis-Raymond
Vice President, General Counsel,
Chief Ethics and Compliance Officer and Corporate
Secretary
4720 Piedmont Row
Drive
Charlotte, North Carolina
28210
Telephone:
(704) 364-3120
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copies to:
James H. Jeffries,
IV, Esq.
Moore & Van Allen
PLLC
100 North Tryon Street, Suite
4700
Charlotte, North Carolina
28202-4003
Telephone: (704)
331-1000
Approximate date of commencement of proposed sale to the
public:
From time to time after the registration
statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box.
o
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.
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If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.
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If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
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If this form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box.
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If this form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box.
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Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2
of the
Exchange Act. (Check one):
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Large
accelerated
filer
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Accelerated
filer
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Non-accelerated
filer
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Smaller reporting
company
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(Do not check if a smaller
reporting company)
CALCULATION OF REGISTRATION
FEE
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Securities to
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Amount to be
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Offering
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Aggregate
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Registration
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be Registered
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Registered(1)
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Price per Share(2)
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Offering Price(2)
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Fee(2)
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Common stock, no par value per share
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2,750,000
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$
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22.77
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$
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62,617,500
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$
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3,494.06
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(1)
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In addition to the shares set forth
in the table, pursuant to Rule 416 of the Securities Act of
1933, as amended (the Securities Act), the
registration statement shall include an indeterminate number of
shares of common stock that may be issued or become issuable in
connection with stock splits, stock dividends, recapitalizations
or other events.
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(2)
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Estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(c)
under the Securities Act, based on the average of the high and
low sales prices per share of the Registrants common stock
as reported on the New York Stock Exchange on November 13,
2009, which were $23.02 and $22.51, respectively.
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PROSPECTUS
DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN
2,750,000 Shares of Common Stock, no par value per share
Piedmont Natural Gas Company, Inc. hereby offers to potential
investors the opportunity to purchase shares of our common
stock, no par value per share, under our Dividend Reinvestment
and Stock Purchase Plan (the Plan). Current Piedmont
shareholders are hereby offered the opportunity to purchase
additional shares of common stock under the Plan by having their
cash dividends automatically reinvested and by making cash
payments. No Plan participant may invest more than $120,000
under the Plan in any calendar year. Plan participants do not
incur any brokerage commissions, fees or service charges in
connection with purchases of shares of common stock for their
accounts under the Plan.
Investors who are not currently Piedmont shareholders may invest
in Piedmont common stock by enrolling in the Plan and making a
cash payment of not less than $250 or more than $120,000. New
and existing Plan participants may purchase additional shares of
common stock by having all or part of the cash dividends on
their shares of common stock automatically reinvested and by
making optional cash payments of not less than $25 per payment
or more than $120,000 per calendar year.
The price per share acquired under the Plan with reinvested
dividends is 95% of the mean of the high and low sales prices of
the common stock reflected in the New York Stock Exchange
Composite Transactions (NYSE Composite Transactions)
on the pertinent dividend payment date. The price per share
acquired under the Plan with cash payments is 100% of the mean
of the high and low sales prices reflected in the NYSE Composite
Transactions on the weekly investment date. Both the dividend
payment date and the weekly investment date are referred to as
the investment date.
Our common stock is listed on the New York Stock Exchange, with
shares trading under the ticker symbol PNY. On
November 19, 2009, the closing price of the common stock
was $23.28 per share. You are urged to obtain current market
data and should not use the market price as of November 19,
2009 as a prediction of the future market price of our common
stock.
Current shareholders who do not presently participate in the
Plan may become participants by completing an Authorization Card
and returning it to American Stock Transfer &
Trust Company LLC (the plan administrator).
Shareholders who do not wish to participate in the Plan need do
nothing and will continue to receive their cash dividends, if
and when declared, as usual. Shareholders who presently
participate in the Plan do not need to take any further action
to continue participation in the Plan.
Dividends on shares of Piedmont common stock may go up and
down. The shares of Piedmont common stock being offered are not
insured or protected by any governmental agency and involve
investment risk, including the possible loss of all or part of
an investment. See the risks described in this prospectus,
including the Risk Factors beginning on page 2,
and those described as risk factors in our other filings with
the Securities and Exchange Commission that are incorporated by
reference herein.
This prospectus is not an offer to sell securities and it is
not soliciting an offer to buy securities in any state or
jurisdiction where the offer or sale is not permitted. To the
extent required by applicable law in certain jurisdictions,
shares offered through the Plan are offered only through a
registered broker-dealer in those jurisdictions.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is November 20, 2009.
TABLE OF
CONTENTS
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EX-5.1
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EX-23.1
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This prospectus is part of an automatic shelf registration
statement on
Form S-3
that we filed with the Securities and Exchange Commission
(SEC). This prospectus provides you with a
description of the Plan and the securities we may offer
thereunder. The registration statement and documents
incorporated by reference herein can be obtained from the SEC as
described below under the heading Where You Can Find More
Information. You should read this prospectus and the
information incorporated herein by reference.
In making your investment decision, you should rely only on the
information contained or incorporated by reference into this
prospectus. We have not authorized any other person to provide
you with different or additional information or represent
anything else about us or this offering. If anyone provides you
with different or inconsistent information, you should not rely
on it. The information in this prospectus and the documents
incorporated by reference is accurate only as of their
respective dates. Our business, financial condition, results of
operations and prospects may have changed since that date.
This prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the
securities to which they relate or an offer to sell or the
solicitation of an offer to buy such securities in any
circumstances in which such offer, solicitation or sale is
unlawful. Neither the delivery of this prospectus nor any sale
made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of our
company since the date hereof or that the information contained
herein or therein is correct as of any time subsequent to the
date hereof.
You should not consider any information in or incorporated by
reference into this prospectus to be legal, business or tax
advice. You should consult your own attorney, business advisor
and tax advisor for legal, business and tax advice regarding an
investment in the Companys securities.
Except as otherwise indicated, all references in this prospectus
to Piedmont, the Company, we
and our refer to Piedmont Natural Gas Company, Inc.
ii
SUMMARY
OF THE PLAN
The Plan provides investors who are not currently shareholders
with the opportunity to purchase shares of common stock and
allows existing shareholders a convenient method to purchase
additional shares of common stock through automatic reinvestment
of cash dividends, optional cash payments or both. There are no
brokerage commissions, fees or service charges on any purchases
of shares under the Plan.
Enrolling in the Plan:
If you currently own
Piedmont common stock registered in your name, you may
participate in the Plan by completing and returning an
Authorization Card to the plan administrator. If you own
Piedmont common stock, but your shares are currently held by a
bank or broker in its name (i.e., street name), you
will need to register the shares in your name and then complete
an Authorization Card. If you currently do not own any shares of
Piedmont common stock, you may join the Plan by completing an
Authorization Card and making an initial cash investment of at
least $250.
Additional Investments:
Once you have
enrolled, you may make additional investments in any amount from
$25 to $120,000 per year by check or through automatic monthly
deductions from a qualified U.S. bank account.
Dividend Reinvestments:
You may reinvest all,
some, or none of your cash dividends in additional shares of
Piedmont common stock. You may change your reinvestment election
at any time by accessing your account online or by contacting
the plan administrator by telephone or in writing.
Safekeeping of Shares:
All shares of common
stock purchased through the Plan will be held by the plan
administrator in book-entry form in your account. If you hold
Piedmont common stock certificates outside of the Plan, you may
deposit those certificates for safekeeping with the plan
administrator, and those shares will be included in your Plan
account.
Sale of Shares:
The Plan provides you with the
ability to sell all or any portion of the shares held in your
Plan account in book-entry form. You may also sell your shares
outside the Plan by requesting a stock certificate for the
number of whole shares you wish to sell and presenting the
certificate to a broker. There are brokerage and sales fees
associated with the sale of shares under the Plan.
INFORMATION
ABOUT PIEDMONT NATURAL GAS COMPANY, INC.
We are an energy services company whose principal business is
the distribution of natural gas to over one million residential,
commercial, industrial and power generation customers in
portions of North Carolina, South Carolina and Tennessee. We
also are invested in joint venture, energy-related businesses,
including unregulated retail natural gas marketing, interstate
natural gas storage and intrastate natural gas transportation.
We were incorporated in New York in 1950 and began operations in
1951. In 1994, we merged into a newly formed North Carolina
corporation with the same name for the purpose of changing our
state of incorporation to North Carolina. Our principal
executive offices are maintained at 4720 Piedmont Row Drive,
Charlotte, North Carolina 28210, and our telephone number is
(704) 364-3120.
Our common stock is listed on the New York Stock Exchange with
shares trading under the ticker symbol PNY.
1
RISK
FACTORS
Our business is subject to uncertainties and risks. You should
carefully consider and evaluate all of the information included
in and incorporated by reference into this prospectus, including
the risk factors updated from time to time by our filings with
the SEC. The risks and uncertainties described in this
prospectus and documents incorporated by reference herein are
not the only ones facing us. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial
may also adversely affect our business, financial condition and
results of operations. If any of the risks and uncertainties
described in this prospectus or the documents incorporated by
reference herein actually occur, our business, financial
condition and results of operations could be impaired in a
material way. This could cause the trading price of our common
stock to decline, perhaps significantly, and you may lose part
or all of your investment.
Increases
in the wholesale price of natural gas could reduce our earnings
and working capital.
The supply and demand balance in natural gas markets could cause
an increase in the price of natural gas. The cost we pay for
natural gas is passed directly through to our customers.
Therefore, significant increases in the price of natural gas may
cause our existing customers to conserve or motivate them to
switch to alternate sources of energy as well as cause new home
developers, builders and new customers to select alternative
sources of energy. Decreases in the volume of gas we sell could
reduce our earnings in the absence of decoupled rate structures,
and a decline in new customers could impede growth in our future
earnings. In addition, during periods when natural gas prices
are higher than historical levels, our working capital costs
could increase due to higher carrying costs of gas storage
inventories, and customers may have trouble paying higher bills
leading to bad debt expenses, which may increase or reduce our
earnings.
A
decrease in the availability of adequate upstream, interstate
pipeline transportation capacity and natural gas supply could
reduce our earnings.
We purchase all of our gas supply from interstate sources that
must then be transported to our service territory. Interstate
pipeline companies transport the gas to our system under firm
service agreements that are designed to meet the requirements of
our core markets. A significant disruption to that supply or
interstate pipeline capacity due to unforeseen events, including
but not limited to, operational failures or disruptions,
hurricanes, freeze off of natural gas wells, terrorist attacks
or other acts of war, could reduce our normal interstate supply
of gas, which could reduce our earnings. Moreover, if additional
natural gas infrastructure, including but not limited to
exploration and drilling platforms, processing and gathering
systems, off-shore pipelines, interstate pipelines and storage,
cannot be built at a pace that meets demand, then our growth
opportunities would be limited and our earnings negatively
impacted.
Our
business is subject to competition that could negatively affect
our results of operations.
The natural gas business is competitive, and we are facing
increasing competition from other companies that supply energy,
including electric companies, oil and propane dealers, renewable
energy providers and, as it relates to sources of energy for
electric power plants, coal. The primary competitive factor is
price.
In residential and commercial customer markets, our natural gas
distribution operations compete with other energy products,
primarily electricity, fuel oil and propane. Our primary product
competition is with electricity for heating, water heating and
cooking. Increases in the price of natural gas or decreases in
the price of other energy sources could negatively impact our
competitive position by decreasing the price benefits of natural
gas to the consumer. In the case of industrial customers, such
as manufacturing plants, adverse economic or market conditions,
including higher gas costs, could cause these customers to use
alternative sources of energy or bypass our systems in favor of
special competitive contracts with lower
per-unit
costs.
Higher gas costs or decreases in the price of other energy
sources may allow competition from alternative energy sources
for applications that have traditionally used natural gas,
encouraging some customers to move away from natural gas-fired
equipment to equipment fueled by other energy sources.
Competition between natural gas and other forms of energy is
also based on efficiency, performance, reliability and safety
and other non-price factors. Technological improvements in other
energy sources and events that impair the public
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perception of these non-price attributes of natural gas could
erode our competitive advantage. These factors in turn could
decrease the demand for natural gas, impair our ability to
attract new customers, and cause existing customers to switch to
other forms of energy or to bypass our systems in favor of
alternative competitive sources. This could result in slow or no
customer growth and could cause customers to reduce or cease
using our product, thereby reducing our ability to make capital
expenditures and otherwise grow our business and adversely
affecting our earnings.
Changes
in federal laws or regulations could reduce the availability or
increase the cost of our interstate pipeline capacity and/or gas
supply and thereby reduce our earnings.
The Federal Energy Regulatory Commission has regulatory
authority over some of our operations, including sales of
natural gas in the wholesale market and the purchase and sale of
interstate pipeline and storage capacity. Additionally, Congress
has enacted laws that deregulate the price of natural gas sold
at the wellhead. Any Congressional legislation or agency
regulation that would alter these or other similar statutory and
regulatory structures in a way to significantly raise costs that
could not be recovered in rates from our customers, that would
reduce the availability of supply or capacity, or that would
reduce our competitiveness could negatively impact our earnings.
Climate
change legislation or regulations.
There are proposed federal legislative initiatives that attempt
to control or limit the causes of global warming and climate
change, including greenhouse gas emissions such as carbon
dioxide. Regulatory agencies may also issue similar climate
change regulations. These initiatives could result in various
new laws or regulations. Such laws or regulations could impose
operational requirements, impose additional charges to fund
energy efficiency activities, provide a cost advantage to
alternative energy sources other than natural gas, impose costs
or restrictions on end users of natural gas, or result in other
costs or requirements. As a result, there is a possibility that,
when and if enacted, the final form of such legislation or
regulation could put upward pressure on the cost of natural gas
relative to other energy sources, increase our costs and impact
the competitive position of natural gas, negatively affecting
our growth opportunities, cash flows and earnings.
Regulatory
actions at the state level could impact our ability to earn a
reasonable rate of return on our invested capital and to fully
recover our operating costs as well as reduce our
earnings.
Our regulated utility segment is regulated by the North Carolina
Utilities Commission, the Public Service Commission of South
Carolina and the Tennessee Regulatory Authority. These agencies
set the rates that we charge our customers for our services. We
monitor allowed rates of return and our ability to earn
appropriate rates of return based on factors such as increased
operating costs, and initiate general rate proceedings as
needed. If a state regulatory commission were to prohibit us
from setting rates that timely recover our costs and a
reasonable return by significantly lowering our allowed return
or negatively altering our cost allocation, rate design, cost
trackers (including margin decoupling and cost of gas) or other
tariff provisions, then our earnings could be impacted. In the
normal course of business in the regulatory environment, assets
are placed in service before rate cases can be filed, if
necessary, that could result in an adjustment of our returns.
Once rate cases are filed, regulatory bodies have the authority
to suspend implementation of the new rates while studying the
cases. Because of this process, we may suffer the negative
financial effects of having placed in service assets that do not
initially earn our authorized rate of return without the benefit
of rate relief, which is commonly referred to as
regulatory lag. Rate cases also involve a risk of
rate reduction, because once rates have been approved, they are
still subject to challenge for their reasonableness by
appropriate regulatory authorities. Regulatory authorities may
also review whether our gas cost purchases are prudent and can
adjust the amount of our gas costs that we pass through to our
customers. Additionally, the state regulators foster a
competitive regulatory model that, for example, allows us to
recover any margin losses associated with negotiated
transactions designed to retain large volume customers that
could use alternative fuels or that may directly access natural
gas supply through their own connection to an interstate
pipeline. If there were changes in regulatory philosophies that
altered our ability to compete for these customers, then we
could lose customers or incur significant unrecoverable expenses
to retain them. Both scenarios would impact our results
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of operations, financial condition and cash flows. Our debt and
equity financings are also subject to regulation by the NCUC.
Delays or failure to receive NCUC approval could limit our
ability to access or take advantage of changes in the capital
markets. This could negatively impact our liquidity or earnings.
Weather
conditions may cause our earnings to vary from year to
year.
Our earnings can vary from year to year, depending in part on
weather conditions. Currently, we have in place regulatory
mechanisms that normalize our margin for weather during the
winter, providing for an adjustment up or down, to take into
account
warmer-than-normal
or
colder-than-normal
weather. We estimate that 80% to 85% of our annual utility
margin is collected from temperature-sensitive customers. As a
result, mild winter temperatures can cause a decrease in the
amount of gas we sell and deliver in any year and the margin we
collect from these customers. If our rates and tariffs were
modified to eliminate weather protection, such as weather
normalization and rate decoupling tariffs, then we would be
exposed to significant risk associated with weather and our
earnings could vary as a result.
Our
gas supply risk management programs are subject to state
regulatory approval or annual review in gas cost
proceedings.
We manage our gas supply costs through short-term and long-term
procurement and storage contracts. In the normal course of
business, we utilize New York Mercantile Exchange (NYMEX)
exchange traded instruments and
over-the-counter
instruments of various durations for the forward purchase or
sale of our natural gas requirements, subject to regulatory
approval or review. As a component of our gas costs, these
expenses are subject to regulatory approval, and we may be
exposed to additional liability if the recovery of these costs
of gas supply procurement or risk management activities is
excluded by our regulators in gas cost recovery proceedings.
Operational
interruptions to our gas distribution activities caused by
accidents, strikes, severe weather such as a major hurricane,
pandemic or acts of terrorism could adversely impact
earnings.
Inherent in our gas distribution activities are a variety of
hazards and operational risks, such as leaks, ruptures and
mechanical problems. Weather events such as hurricanes, as well
as acts of terrorism, can also damage our pipelines and other
infrastructure and disrupt our ability to conduct our natural
gas distribution and transportation business. Pandemic could
result in a significant part of our workforce being unable to
operate or maintain our infrastructure or perform other tasks
necessary to conduct our business. If the foregoing events are
severe enough or if they lead to operational interruptions, they
could cause substantial financial losses. In addition, these
risks could result in loss of human life, significant damage to
property, environmental damage, impairment of our operations and
substantial loss to us. The location of pipeline and storage
facilities near populated areas, including residential areas,
commercial business centers, industrial sites and other public
gathering places, could increase the level of damages resulting
from these risks. Our regulators may not allow us to recover
part or all of the increased cost related to the foregoing
events from our customers, which would negatively affect our
earnings. With part of our workforce represented by unions, we
are exposed to the risk of a strike. The occurrence of any of
these events could adversely affect our financial position,
results of operations and cash flows.
Opposition
to infrastructure development may delay or prevent us from
expanding our business.
In order to serve new customers or expand our service to
existing customers, we often need to expand or upgrade our
distribution, transmission
and/or
storage infrastructure, including laying new pipeline and
building compressor stations or liquefied natural gas storage
tanks. Such infrastructure development requires us to seek
approval from local, state
and/or
federal regulatory and governmental bodies. The approval process
may involve the opportunity for the public to voice opposition.
Such opposition may delay or prevent such development, or may
make it materially more costly to do so. As a result, we may not
be able to adequately support customer growth, which would
negatively impact our earnings.
4
A
downgrade in our credit rating could negatively affect our cost
of and ability to access capital.
Our ability to obtain adequate and cost effective financing
depends on our credit ratings. A negative change in our ratings
outlook or any downgrade in our current investment-grade credit
ratings by our rating agencies, particularly below investment
grade, could adversely affect our cost of borrowing
and/or
access to sources of liquidity and capital. Such a downgrade
could further limit our access to private credit markets and
increase the costs of borrowing under available credit lines.
Should our credit rating be downgraded, the interest rate on our
borrowings under our revolving credit agreement would increase.
An increase in borrowing costs without the recognition of these
higher costs in the rates charged to our customers could
adversely affect earnings by limiting our ability to earn our
allowed rate of return.
The
inability to access capital or significant increases in the cost
of capital could adversely affect our business.
Our ability to obtain adequate and cost effective financing is
dependent upon the liquidity of the financial markets, in
addition to our credit ratings. Disruptions in the capital and
credit markets could adversely affect our ability to access
short-term and long-term capital. Our access to funds under
short-term credit facilities is dependent on the ability of the
participating banks to meet their funding commitments. Those
banks may not be able to meet their funding commitments if they
experience shortages of capital and liquidity. Longer
disruptions in the capital and credit markets as a result of
uncertainty, changing or increased regulation, reduced
alternatives or failures of significant financial institutions
could adversely affect our access to capital needed for our
business. The inability to access adequate capital may require
us to conserve cash, prevent or delay us from making capital
expenditures, and require us to reduce or eliminate the dividend
or other discretionary uses of cash.
Changes
in federal and state fiscal and monetary policy could
significantly increase our costs.
Changes in federal and state fiscal and monetary policy may
result in increased taxes, interest rates, and inflationary
pressures on the costs of goods and services. This could
increase our expenses and decrease our earnings if such
increased costs are not reflected in allowed rates charged to
customers. This series of events may increase our rates to
customers and thus may negatively impact customer billings and
customer growth. Any of these events may negatively affect our
ability to make capital expenditures to grow the business and
negatively affect earnings.
We do
not generate sufficient cash flows to meet all our cash
needs.
Historically, we have made large capital expenditures in order
to finance the expansion and upgrading of our distribution
system. We have also purchased and will continue to purchase
natural gas for storage. We have made several equity method
investments and will continue to pursue other similar
investments, all of which are and will be important to our
profitability. Volatility in gas prices may require us to post
cash collateral as part of our regulated gas price hedging
program. We have funded a portion of our cash needs for these
purposes, as well as contributions to our employee pensions and
benefit plans, through borrowings under credit arrangements and
by offering new securities in the open market. Our dependency on
external sources of financing creates the risk that our profits
could decrease as a result of higher borrowing costs and that we
may not be able to secure external sources of cash necessary to
fund our operations and new investments on terms acceptable to
us. Volatility in seasonal cash flow requirements, including
requirements for our gas supply procurement and risk management
programs, may require increased levels of borrowing that could
result in non-compliance with the
debt-to-equity
ratios in our credit facilities as well as cause a credit rating
downgrade. Any disruptions in the capital and credit markets
could require us to conserve cash until the markets stabilize or
until alternative credit arrangements or other funding required
for our needs can be secured. Such measures could be deferral of
major capital expenditures, changes in our gas supply
procurement and risk management programs, the reduction or
elimination of the dividend payment or other discretionary uses
of cash.
5
As a
result of cross-default provisions in our borrowing
arrangements, we may be unable to satisfy all of our outstanding
obligations in the event of a default on our part.
The terms of our senior indebtedness, including our revolving
credit facility, contain cross-default provisions which provide
that we will be in default under such agreements in the event of
certain defaults under the indenture or other loan agreements.
Accordingly, should an event of default occur under any of those
agreements, we face the prospect of being in default under all
of our debt agreements, obliged in such instance to satisfy all
of our outstanding indebtedness and unable to satisfy all of our
outstanding obligations simultaneously. In such an event, we
might not be able to obtain alternative financing or, if we are
able to obtain such financing, we might not be able to obtain it
on terms acceptable to us.
Certain
purchasers of our common stock under our dividend reinvestment
and stock purchase plan may be entitled to rescind their
purchases.
As a result of an administrative error, sales of approximately
568,167 shares of our common stock under the Plan between
December 1, 2008 and November 16, 2009 (which
represent less than one percent (1%) of our outstanding shares
of common stock as of November 16, 2009) appear to not
have complied with the registration requirements of applicable
securities laws. A number of remedies may be available to Plan
participants who acquired shares during that period, including a
right to rescind their purchases not later than one year after
the date of this filing to receive the full price paid by the
Plan participants, plus interest. A subset of such purchasers,
Plan participants who purchased shares pursuant to the Plan
whose shares have fallen in value since the date of purchase
(and possibly others), could have an incentive to seek and to
accept such a rescission. These sales could also subject us to
regulatory sanctions by the SEC or other regulatory authorities
that might result in the imposition of civil penalties, which
could include fines, a cease and desist order, or a mandated
rescission offering. Although we do not expect any rescissions
or regulatory actions to have a material adverse effect on us,
we are unable to predict the consequences of these actions.
We are
exposed to credit risk of counterparties with whom we do
business.
Adverse economic conditions affecting, or financial difficulties
of, counterparties with whom we do business could impair the
ability of these counterparties to pay for our services or
fulfill their contractual obligations. We depend on these
counterparties to remit payments to fulfill their contractual
obligations on a timely basis. Any delay or default in payment
or failure of the counterparties to meet their contractual
obligations could adversely affect our financial position,
results of operations or cash flows.
Poor
investment performance of pension plan holdings and other
factors impacting pension plan costs could unfavorably impact
our liquidity and results of operations.
Our costs of providing for the non-contributory defined benefit
pension plan are dependent on a number of factors, such as the
rates of return on plan assets, discount rates, the level of
interest rates used to measure the required minimum funding
levels of the plan, future government regulation and our
required or voluntary contributions made to the plan. A
significant decline in the value of investments that fund our
pension plan, if not offset or mitigated by a decline in our
liabilities, may significantly differ from or alter the values
and actuarial assumptions used to calculate our future pension
expense. A decline in the value of these investments could
increase the expense of our pension plan, and we could be
required to fund our plan with significant amounts of cash. Such
cash funding obligations could have a material impact on our
liquidity by reducing cash flows and could negatively affect
results of operations.
We are
subject to numerous environmental laws and regulations that may
require significant expenditures or increase operating
costs.
We are subject to numerous federal and state environmental laws
and regulations affecting many aspects of our present and future
operations. These laws and regulations can result in increased
capital, operating and other costs. These laws and regulations
generally require us to obtain and comply with a wide variety of
environmental licenses, permits, inspections and approvals.
Compliance with these laws and regulations can
6
require significant expenditures for
clean-up
costs and damages arising out of contaminated properties.
Failure to comply may result in fines, penalties and injunctive
measures affecting operating assets. Additionally, the discovery
of presently unknown environmental conditions could give rise to
expenditures and liabilities, including fines or penalties,
which could have a material adverse effect on our business,
results of operations or financial condition.
An
overall economic downturn could negatively impact our
earnings.
Weakening of economic activity in our markets could result in a
decline in customer additions and energy consumption which could
adversely affect our revenues or restrict our future growth. It
may become more difficult for customers to pay their gas bills,
leading to slow collections and
higher-than-normal
levels of accounts receivable. This could increase our financing
requirements and non-gas cost bad debt expense. Earnings and
liquidity would be negatively affected, reducing our ability to
grow the business.
Our
inability to attract and retain professional and technical
employees could adversely impact our earnings.
Our ability to implement our business strategy and serve our
customers is dependent upon the continuing ability to employ
talented professionals and attract and retain a technically
skilled workforce. Without such a skilled workforce, our ability
to provide quality service to our customers and meet our
regulatory requirements will be challenged and this could
negatively impact our earnings.
USE OF
PROCEEDS
We expect to use the proceeds from the sales of common stock by
us under the Plan for the purpose of financing the construction
of additions to our facilities and for general corporate
purposes. We have no basis for estimating the number of shares
of common stock that ultimately will be sold by us under the
Plan or the prices at which such shares will be sold. We expect
to continue to obtain a portion of our capital requirements
through external sources with the type, amount and timing of any
sales of securities to depend upon market conditions and other
factors. We expect to obtain the balance of such requirements
from internally generated cash. We will not receive any proceeds
from sales of common stock to Plan participants obtained in open
market purchases.
CAUTIONARY
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and documents incorporated by reference herein
include certain forward-looking statements within
the meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as
amended (the Exchange Act). When used in this
prospectus or the documents incorporated by reference,
statements containing words such as expect,
believe, project,
anticipate, intend, should,
could, will, assume,
can, estimate, forecast,
future, indicate, outlook,
plan, predict, seek,
target, would, and variations of such
words and similar expressions are intended to highlight or
indicate forward-looking statements. Although we
believe that the expectations, opinions, projections and
comments reflected in our forward-looking statements reflect our
best judgment based on current information and circumstances
that we believe to be reasonable when made and are made in good
faith, we can give no assurance that future events will not
affect the accuracy of such forward-looking information or that
such statements will prove to be correct. As such, the
forward-looking statements are not guarantees of future
performance, and actual results may vary materially from the
results and expectations discussed. A wide variety of potential
risks, uncertainties, and other factors could materially affect
our business prospects and our ability to achieve the results
expressed or implied by these forward-looking statements
including, but not limited to:
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Regulatory issues affecting us and those from whom we purchase
natural gas transportation and storage service, including those
that affect allowed rates of return, terms and conditions of
service, rate
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7
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structures and financings. We monitor our ability to earn
appropriate rates of return and initiate general rate
proceedings as needed.
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Residential, commercial, industrial and power generation growth
and energy consumption in our service areas. The ability to grow
our customer base, the pace of that growth and the levels of
energy consumption are impacted by general business and economic
conditions, such as interest rates, inflation, fluctuations in
the capital markets and the overall strength of the economy in
our service areas and the country, and fluctuations in the
wholesale prices of natural gas and competitive energy sources.
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Deregulation, regulatory restructuring and competition in the
energy industry. We face competition from electric companies and
energy marketing and trading companies, and we expect this
competitive environment to continue.
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The potential loss of large-volume industrial customers to
alternate fuels or to bypass, or the shift by such customers to
special competitive contracts or to tariff rates that are at
lower
per-unit
margins than that customers existing rate.
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The capital-intensive nature of our business. In order to
maintain growth, we must add to our natural gas distribution
system each year. The cost of this construction may be affected
by the cost of obtaining governmental approvals, compliance with
federal and state pipeline safety and integrity regulations,
development project delays and the cost and availability of
materials and labor. Weather, general economic conditions and
the cost of funds to finance our capital projects can materially
alter the cost and timing of a project.
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Access to capital markets. Our internally generated cash flows
are not adequate to finance the full cost of capital
expenditures. As a result, we rely on access to both short-term
and long-term capital markets as a significant source of
liquidity for capital requirements not satisfied by cash flows
from operations. Changes in the capital markets or our financial
condition could affect our access to and cost of capital.
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Changes in the availability and cost of natural gas. To meet
firm customer requirements, we must acquire sufficient gas
supplies and pipeline capacity to ensure delivery to our
distribution system while also ensuring that our supply and
capacity contracts allow us to remain competitive. Natural gas
is an unregulated commodity market subject to supply and demand
and price volatility. Producers, marketers and pipelines are
subject to operating and financial risks associated with
exploring, drilling, producing, gathering, marketing and
transporting natural gas and have risks that increase our
exposure to supply and price fluctuations.
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Changes in weather conditions. Weather conditions and other
natural phenomena can have a material impact on our earnings.
Severe weather conditions, including destructive weather
patterns such as hurricanes, can impact our suppliers and the
pipelines that deliver gas to our distribution system. Weather
conditions directly influence the supply of, demand for and the
cost of natural gas.
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Changes in environmental, safety, system integrity, tax and
other laws and regulations, including climate change
legislation, and the cost of compliance. We are subject to
extensive federal, state and local laws and regulations.
Compliance with such laws and regulations could increase capital
or operating costs, affect our reported earnings, increase our
liabilities or change the way our business is conducted.
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Ability to retain and attract professional and technical
employees. To provide quality service to our customers and meet
regulatory requirements, we are dependent on our ability to
recruit, train, motivate and retain qualified employees.
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Changes in accounting regulations and practices. We are subject
to accounting regulations and practices issued periodically by
accounting standard-setting bodies. New accounting standards may
be issued that could change the way we record revenues,
expenses, assets and liabilities, and could affect our reported
earnings or increase our liabilities.
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Earnings from our equity method investments. We invest in
companies that have risks that are inherent in their businesses,
and those risks may negatively affect our earnings from those
companies.
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8
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Changes in outstanding shares. The number of outstanding shares
may fluctuate due to repurchases under our Common Stock Open
Market Purchase Program or new issuances.
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Many, but not all, of the factors that may impact actual results
are discussed under the Risk Factors section
contained in this prospectus or the documents incorporated by
reference. You should carefully read the Risk
Factors section in this prospectus and the documents
incorporated by reference and other disclosure contained herein
and our filings with the SEC that are incorporated by reference.
All of these factors and the factors described above are
difficult to predict, involve uncertainties that may materially
affect actual results and may be beyond our control. New factors
emerge from time to time, and it is not possible for us to
predict all of these factors or to assess the effect of each
factor on our business. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise except as required
by applicable laws and regulations. Our business, financial
condition, results of operations and prospects may have changed
since the date of a forward-looking statement. For these
reasons, you should not rely on these forward-looking statements
when making investment decisions.
9
THE
PIEDMONT NATURAL GAS DIVIDEND REINVESTMENT AND STOCK PURCHASE
PLAN
Purpose
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1.
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What
is the purpose of the Plan?
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The Plan allows existing shareholders and investors an easy and
convenient method of acquiring shares of our common stock.
Investors can purchase common stock without payment of any
brokerage commissions, fees or service charges. In addition,
existing shareholders can purchase additional shares of stock by
investing cash dividends and by making optional cash payments
without payment of any brokerage commissions, fees or service
charges. Beneficial owners of shares of common stock whose
shares are registered in names other than their own can have
their cash dividends reinvested by having the shares registered
in their own name or by requesting their nominees or other
holders of record to participate in the Plan on their behalf. If
the shares of common stock purchased under the Plan are acquired
from us, we will receive additional funds for our ongoing
infrastructure expansion and upgrades and for general corporate
purposes. If shares are purchased in the open market by an
independent agent, we will not receive any proceeds.
Advantages
and Disadvantages
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2.
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What
are the advantages of the Plan?
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Investors who are not currently Piedmont shareholders may
purchase shares of common stock by making a cash payment of not
less than $250 but not more than $120,000. Existing shareholders
may purchase additional shares of common stock by having all or
part of their cash dividends automatically reinvested and by
making optional cash payments of not less than $25 per payment
or more than $120,000 per calendar year. Shares purchased with
reinvested cash dividends are purchased at a discount. (See
Question 17.)
Participants do not incur any brokerage commissions, fees or
service charges in connection with the purchase of shares of
common stock under the Plan. The plan administrator assures
safekeeping of the shares of common stock credited to a Plan
account and provides regular statements to the account holder.
Therefore, shareholders avoid the cumbersome safekeeping of
certificates of shares of common stock credited to their Plan
accounts.
Investors who have an Individual Retirement Account or who set
up an IRA with a third party may enroll in the Plan and purchase
shares through the Plan. The plan administrator, however, cannot
establish or administer an IRA. That must be done through
another entity.
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3.
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What
are the disadvantages of the Plan?
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No interest is paid on optional cash payments held by the plan
administrator pending investment. Participants have no control
over the share price or the timing of the sale or purchase of
Plan shares. Participants cannot designate a specific price or a
specific date at which to purchase or sell common stock. In
addition, participants will not know the exact number of shares
purchased and the prices paid until after the applicable
investment date. (See Question 19.)
Administration
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4.
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Who
administers the Plan?
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We have designated the plan administrator as our agent to
administer the Plan, maintain records, send account statements
to participants and perform other duties relating to the Plan.
Shares of common stock purchased under the Plan are held by the
plan administrator as agent for participants and registered in
the name of the plan administrator or its nominee. If
participants desire to hold their shares personally, the plan
administrator will issue a stock certificate in the name of the
shareholder upon request. The plan administrator also serves as
the transfer agent for Piedmont common stock.
10
All communications regarding the Plan should be sent to the plan
administrator addressed as follows:
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Postal Address:
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American Stock Transfer & Trust Company LLC
59 Maiden Lane, Plaza Level
New York, New York 10038
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Overnight Address:
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American Stock Transfer & Trust Company LLC
Operations Center
6201 15
th
Avenue
Brooklyn, New York 11219
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Investors or existing shareholders should mention Piedmont
Natural Gas Company in their correspondence and if applicable,
furnish Plan account numbers. Inquiries may be made to the plan
administrator by telephone at
1-800-278-4353
or online at
http://www.amstock.com/shareholder/shareholder_services.asp.
Participation
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5.
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Who is
eligible to participate?
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All individuals, corporations, partnerships, other business
associations and holders of record of shares of common stock are
eligible to participate in the Plan, provided participation is
not prohibited by any laws or regulations. In order to be
eligible to participate, beneficial owners of shares of common
stock whose shares are registered in names other than their own
(for example, shares registered in the name of a broker or a
bank nominee) must become holders of record by having all or a
portion of those shares transferred into their names. Or, they
can request such nominees or other holders of record to
participate in the Plan on their behalf. Individuals having
established IRA accounts with a third party may participate in
the Plan.
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6.
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How
does an investor who is not currently a shareholder or a current
eligible shareholder become a participant?
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An investor or an eligible shareholder may join the Plan at any
time by completing an Authorization Card and returning it to the
plan administrator. You may also complete the Authorization Card
and join the Plan online at
http://www.amstock.com/investpower/new_dp.asp
and search for Piedmont Natural Gas Company, Inc.
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7.
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When
do investments begin under the Plan?
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Dividend payment dates ordinarily occur on or about the
15th day of January, April, July and October. The record
date for determining shareholders who are eligible to receive
dividends normally precedes the dividend payment date by about
three weeks.
If the plan administrator receives an Authorization Card
specifying reinvestment of dividends at least three business
days before the record date of a dividend payment, reinvestment
commences with that dividend payment. If the Authorization Card
is received after that date, reinvestment of dividends under the
Plan begins with the dividend payment following the next record
date.
Initial investments and optional cash payments by participants
are invested as specified in Question 16.
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8.
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What
does the Authorization Card provide?
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The Authorization Card provides for the purchase of shares of
common stock through the following options:
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Full Dividend Reinvestment.
If the Full
Dividend Reinvestment box is checked, the plan
administrator will apply all of a participants cash
dividends on shares of common stock registered in the
participants name, as well as on all shares of common
stock credited to the participants Plan account, to the
purchase of additional shares of common stock.
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Partial Dividend Reinvestment.
If the
Partial Dividend Reinvestment box is checked, the
plan administrator will reinvest dividends on the number of
shares indicated by the participant, as well as
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dividends on all shares of common stock credited to the
participants Plan account, and will pay any remaining
dividends in cash.
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Cash Payments Only.
If the Cash Payments
Only box is checked, the plan administrator will apply any
optional cash payments and any dividends on shares credited to
the participants Plan account to the purchase of
additional shares of common stock. Cash dividends on shares of
common stock registered in the participants name other
than in his or her Plan account will be paid to the participant
in cash.
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Initial Purchases.
If the Initial
Purchases box is checked, the plan administrator will
apply any cash payments to the purchase of shares of common
stock.
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If a participant does not check any box on the Authorization
Card, then full dividend reinvestment will be assumed.
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9.
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May
participants reinvest dividends on less than all shares
registered in their name?
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Except for dividends on shares of common stock in a
participants Plan account, which are reinvested
automatically, participants may elect to reinvest all or part of
the dividends on shares of common stock registered in their name
by designating their intentions on the Authorization Card.
10. May
participants change the method of participation?
At any time, participants may change their investment options by
completing a new Authorization Card and returning it to the plan
administrator. If the participant elects to participate through
the full or partial dividend reinvestment feature but later
decides to change the number of shares on which cash dividends
are being reinvested or to participate through the optional cash
payments feature only, the plan administrator must receive an
Authorization Card indicating the change at least three business
days before the record date of a dividend payment. If the
Authorization Card is received after that date, the change will
not be effective until the dividend payment following the next
record date.
Costs
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11.
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Are
there any expenses to investors or participants in connection
with the Plan?
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There are no brokerage commissions, fees or service charges for
purchases under the Plan. Piedmont pays all costs of
administration of the Plan. (See Question 26 and Question 27 for
a discussion of payment by participants of brokerage costs and
transfer taxes associated with termination of participation and
sale of shares under the Plan.)
Initial
Purchases
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12.
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How
are initial purchases made?
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Initial purchases by non-shareholders of shares of common stock
may be made by check or money order or by authorizing the plan
administrator to draft your bank account in an amount not less
than $250 or more than $120,000. Investors may not invest more
that $120,000 per calendar year. The plan administrator will
return any excess tendered amount to the sender. The plan
administrator must receive initial purchase payments at least
three business days prior to an investment date in order to be
invested on that date. (See Question 16.) Initial purchase
payments received by the plan administrator less than three
business days before an investment date will be held until the
following investment date. No interest is paid on initial
purchase payments pending investment. An investor may obtain the
return of any initial purchase payment by notification received
by the plan administrator at least two days before the next
investment date.
12
Optional
Cash Payments
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13.
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How
are optional cash payments made?
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Optional cash payments may be made by check, money order or
automatic bank draft. A shareholder may make an initial optional
cash payment when enrolling in the Plan by enclosing a check
(made payable to American Stock Transfer &
Trust Company) with the Authorization Card or by
authorizing a draft from the shareholders bank account.
Thereafter, participants may make optional cash payments through
the use of cash payment forms sent to participants as part of
their account statements. Participants may also authorize the
plan administrator to automatically draft their checking,
savings or other account in any financial institution that
participates in the Automated Clearing House system. The plan
administrator can furnish draft authorization information to
participants.
Optional cash payments that are made by check or money order
need not be in the same amount each time and there is no
obligation to make optional cash payments regularly. However, if
participants elect to make optional cash payments through
automatic bank draft, the draft must be in the same amount. The
draft will continue until the participant notifies the plan
administrator in writing or online to change the amount
automatically drafted or terminate the bank draft.
The plan administrator must receive optional cash payments at
least three business days prior to an investment date in order
to be invested on that date. (See Question 16.) Optional cash
payments received by the plan administrator less than three
business days before an investment date will be held until the
following investment date. No interest is paid on optional cash
payments pending investment. Participants may obtain the return
of any optional cash payments by notification received by the
plan administrator at least two days before the next investment
date.
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14.
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What
are the limitations on making optional cash
payments?
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Optional cash payments may be not less than $25 per payment or
more than $120,000 per calendar year. We reserve the right to
direct the plan administrator to refuse any optional cash
payments that in the aggregate exceed $120,000 per calendar year
with respect to the aggregate of all of a participants
Plan accounts. In such event, the plan administrator will return
the excess tendered amount of optional cash payments to the
participant.
Purchases
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15.
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What
is the source of shares of common stock under the
Plan?
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Shares of common stock needed to meet the requirements of the
Plan will either come from Piedmonts authorized and
unissued shares or from shares purchased in the open market by
an independent agent. Piedmont may not change its determination
of the source of shares more than once in any three-month period.
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16.
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When
are shares of common stock purchased under the
Plan?
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The investment dates for shares purchased with reinvested
dividends are on or about the 15th day of January, April,
July and October. The investment dates for initial investments
or optional cash payments are once each calendar week, usually
on Wednesdays. If the normal investment date is not a business
day, the investment date is the immediately preceding business
day. During a week when a dividend payment is made, the
investment date for initial investments and optional cash
purchases is the same date.
Shares purchased under the Plan belong to the participant on the
investment date. However, for federal income tax purposes, the
holding period for such shares begins on the following day.
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17.
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What
is the price of shares of common stock purchased under the
Plan?
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The price of shares of common stock purchased with reinvested
dividends is 95% of the mean of the high and low sales prices
for such shares reflected in the NYSE Composite Transactions on
the investment date, or the most recent preceding day if the
NYSE is closed on that investment date. The price of shares of
common
13
stock purchased through initial payments or with optional cash
payments is 100% of the mean determined above.
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18.
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How
many shares of common stock are purchased for
participants?
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The number of shares purchased for a participants account
is equal to the amount of the participants dividends being
reinvested plus the amount of any initial purchase payment plus
the amount of any optional cash payments divided by the purchase
price of the shares. Each Plan account is credited with that
number of shares, including fractions computed to three decimal
places. Participants may not purchase a specific number of
shares.
Reports
to Participants
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19.
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What
reports are sent to participants?
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Shareholders who participate in the Plan only through the
reinvestment of dividends receive quarterly statements of their
accounts. Investors and shareholders that participate through
the investment of optional cash payments receive statements when
cash investments are made. These statements of account show any
cash dividends reinvested and any cash payments received, the
number of shares purchased, the purchase price for the shares
and the mean of the high and low sales prices on the investment
date, the number of Plan shares held for the participant by the
plan administrator, the number of shares registered in the name
of the participant reinvesting dividends, and an accumulation of
the transactions for the current calendar year to date.
Statements are mailed as soon as practicable after each
investment date. These statements are a participants
continuing record of the cost of purchases of shares of common
stock under the Plan, and the last cumulative statement of the
year should be retained for tax purposes.
In addition, each participant receives copies of all
communications sent to shareholders generally, including annual
reports, notices of annual meetings and proxy statements and
income tax information for reporting dividends paid.
Issuance
of Certificates
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20.
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Are
certificates issued for shares of common stock purchased under
the Plan?
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Certificates for any number of whole shares credited to a
participants account will only be issued in the
participants name without charge upon request from the
participant; provided, however, that any request received from
reinvestment participants between a dividend record date and the
investment date for that dividend will not be effective until
after the dividend is reinvested under the Plan. Certificates so
requested are issued in the participants name and without
charge to the participant, and only be issued in whole shares.
Certificates representing fractional share interests will not be
issued under any circumstances.
A request for issuance of certificates for Plan shares,
including issuance of certificates for all of the shares in a
participants account, does not constitute a termination of
participation in the Plan by the participant. Termination may be
effected only through the delivery to the plan administrator of
a notice of termination. (See Question 26.)
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21.
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In
whose name are certificates issued?
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Accounts under the Plan are maintained in the name(s) in which
certificates of the participants were registered or for whom
shares were purchased at the time they enrolled in the Plan.
Consequently, certificates for whole shares issued upon the
request of participants are issued in the same name(s).
Dividends
on Fractions of Shares
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22.
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Are
participants Plan accounts credited with dividends on
fractions of shares?
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Participants receive credit for the amount of dividends
attributable to fractions of shares in their Plan accounts.
These dividends are reinvested automatically.
14
Withdrawals
of Shares in Plan Accounts
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23.
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How
may shares be withdrawn from the Plan?
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Participants may withdraw Plan shares credited to their accounts
by notifying the plan administrator specifying the number of
shares to be withdrawn. Certificates for whole shares of common
stock so withdrawn will be issued to and registered in the name
of the participant. Certificates representing fractional share
interests will not be issued under any circumstances.
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24.
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Will
dividends on shares withdrawn from the Plan continue to be
reinvested?
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If participants have authorized reinvestment of dividends on all
shares registered in their name, cash dividends on shares
withdrawn continue to be reinvested. If, however, dividends on
only part of the shares registered in their name are being
reinvested, the plan administrator continues to reinvest
dividends on only the number of shares specified on the
Authorization Card unless the plan administrator receives a new
Authorization Card specifying a different number of shares.
Termination
of Participation
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25.
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How do
participants terminate participation in the Plan?
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Participants may terminate participation in the Plan at any time
by notifying the plan administrator. A participants notice
of termination takes effect when the plan administrator receives
the notice; however, for a participant reinvesting dividends, if
the plan administrator receives the notice of termination on or
after the fifth business day preceding a dividend record date,
that cash dividend will be reinvested for the participants
account. The account then will be terminated and all subsequent
dividends will be paid to the participant.
Any optional cash payment received before the plan administrator
receives the notice of termination will be invested for the
participants account unless the notice is received at
least three business days before the next investment date and
the notice specifically requests return of the payment.
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26.
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What
happens when participants terminate participation in the
Plan?
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When participants terminate participation in the Plan, or upon
termination of the Plan, certificates for whole shares credited
to a participants account will be issued to the
participant and a cash payment will be made for any fractional
share interests. However, in the participants notice of
termination of participation, the participant may direct the
plan administrator to sell all full and fractional share
interests held in the account. Within ten business days or as
soon as practicable after receipt of notice of termination, such
sales will be made through an independent brokerage
organization. Any brokerage commissions, fees, transfer and
other taxes and other transaction expenses in connection with
such sales will be paid by the terminating participant. The
proceeds of the sale, net of such expenses, will be sent to the
participant as soon as practicable after settlement of the sale.
If termination of participation in the Plan occurs after a
dividend record date but before the payment date for that
dividend, that dividend will be paid in cash directly to the
former participant. Former participants may become participants
in the Plan again at any time by completing a new Authorization
Card and returning it to the plan administrator.
Sale of
Plan Shares
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27.
|
May
participants sell their Plan shares?
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Participants may sell all or part of the shares of common stock
held in the Plan in either of two ways. First, a participant may
request certificates for full shares and arrange for the sale of
these shares through a securities broker of the
participants choice. Alternatively, within ten days after
receipt of instructions, the plan administrator will sell all or
any portion of the shares held by the plan administrator for the
participant. Such shares will be sold through independent
securities brokers selected by the plan administrator in its
sole discretion. The participant will be charged brokerage
commissions, fees, transfer and other taxes and other
15
transaction expenses, which amounts will be deducted from the
cash proceeds paid to the participant. Shares being sold for the
participant may be aggregated with those of other Plan
participants who have requested sales. In that case, the
participant will receive proceeds based on the average sales
price of all shares sold, less a pro rata share of brokerage
commissions, fees, transfer and other taxes and other
transaction expenses. The proceeds of the sale, net of such
expenses, will be sent to the participant as soon as practicable
after settlement of the sale.
Risk to
Participants
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28.
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Does
participation in the Plan involve risk?
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The Plan itself creates no risk. The risk to participants is the
same as with any other investment in shares of our common stock,
including those risks described or incorporated by reference
herein. Because purchase prices are established on the
investment date, a participant loses any advantage otherwise
available from being able to select the timing of investments.
Participants should recognize that neither Piedmont nor the plan
administrator can assure a profit or protect against a loss on
shares of common stock purchased under the Plan.
Stock
Dividends or Stock Splits; Rights Offering
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29.
|
What
happens if Piedmont issues a stock dividend, declares a stock
split or has a rights offering?
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Any stock dividend or split will be credited to
participants Plan accounts based on the number of shares,
including fractional share interests, held in such accounts on
the record date for such stock dividend or split.
In the event we make available to shareholders rights to
purchase additional shares of common stock or other securities,
such rights will be made available to participants based on the
number of shares, including fractional share interests to the
extent practicable, held in their Plan accounts on the record
date established for determining shareholders who are entitled
to such rights.
Voting
Rights
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30.
|
How
are participants shares voted at meetings of
shareholders?
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Participants receive a proxy indicating the total number of
shares of common stock held, including shares registered in
their name and shares credited to their Plan account. If the
proxy is returned properly signed and marked for voting, all the
shares covered by the proxy will be voted as marked. If the
proxy is returned properly signed but with no instructions on
how the shares are to be voted, all of the participants
shares will be voted in accordance with the recommendations of
the Board of Directors. If the proxy is not returned or if it is
returned unexecuted or improperly executed, the
participants shares will be voted only if the participant
votes in person.
Income
Tax Consequences
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31.
|
What
are some federal income tax consequences of participation in the
Plan?
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Participants are deemed to have received dividend income on the
investment date to the extent that shares of common stock are
purchased with reinvested dividends. Thus, the full amount of
cash dividends reinvested under the Plan plus the 5% purchase
discount represents dividend income to participants.
The basis of shares of common stock purchased under the Plan,
either with reinvested cash dividends, initial payments or
optional cash payments, is equal to the purchase price of such
shares. The holding period for such shares begins on the day
after the investment date.
Participants will not realize any taxable income when they
receive certificates for Plan shares credited to their accounts,
whether upon withdrawal from the Plan or otherwise. However,
upon withdrawal, participants will receive cash payments for the
fractional share credited to their Plan accounts and may realize
a gain or
16
loss. The amount of such gain or loss will be the difference
between the amount the participant receives for the fractional
share and the participants cost basis for such share.
If a participant is subject to withholding, Piedmont will
withhold the required taxes from the amount of dividends that
would otherwise be reinvested under the Plan. The plan
administrator will notify the participant when withholding
begins. The amount withheld will be deducted from the amount of
the dividend and only the remaining amount will be invested. The
amount withheld will be reported to the participant.
The selling of shares by a participant will give rise to capital
gain or loss, provided such shares are held as a capital asset
by the participant. The amount of any such gain or loss will be
the difference between the proceeds received by the participant,
net of commissions and fees, and the participants cost
basis. The cost basis of shares acquired under the Plan is equal
to the purchase price of such shares.
The discussion above is only a general discussion of certain
federal income tax aspects of an investment in the Plan. Because
tax consequences may vary, depending on each participants
own tax situation, participants and other persons considering
participation in the Plan are advised to consult their own tax
advisors regarding the tax effect of participation in the Plan,
including the application of current and proposed federal,
state, local, foreign and other tax laws.
Foreign
Shareholders
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32.
|
What
provision is made for foreign shareholders?
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For foreign shareholders who are participants and whose
dividends are subject to United States income tax withholding
laws, an amount equal to the dividends to be reinvested less the
amount of tax required to be withheld is applied to the purchase
of shares of common stock. The statements distributed by the
plan administrator confirming purchases made for such foreign
participants indicate the amount of tax withheld. Initial cash
payments and optional cash payments received from foreign
shareholders must be in United States dollars and are invested
in the same manner as payments from other participants.
Rights
and Responsibilities of Piedmont and the Plan
Administrator
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33.
|
What
are the rights and responsibilities of Piedmont Natural Gas
Company and the plan administrator under the Plan?
|
Piedmont reserves the right to interpret and regulate the Plan,
determine all questions that may arise thereunder and establish
rules and procedures relating to participant elections, all as
it deems necessary or desirable for the efficient operation of
the Plan. Piedmont may also modify or supplement any Plan
accounting method, practice or procedure or any other aspect of
the operation or administration of the Plan in such manner and
to such extent consistent with applicable law that Piedmont
deems necessary or appropriate to correct errors and mistakes,
to effect proper and equitable adjustment of Plan accounts, to
resolve participant claims and to otherwise ensure the proper
and appropriate administration and operation of the Plan.
Neither the plan administrator nor Piedmont will be liable for
claims arising from any act done in good faith or any good faith
omission to act. This includes, but is not limited to, any claim
of liability arising out of failure to terminate a
participants Plan account upon such participants
death prior to receipt of notice of such death. Neither the plan
administrator nor Piedmont have any duties, responsibilities or
liabilities except those expressly set forth in the Plan.
The payment of dividends is at the discretion of Piedmonts
Board of Directors and will depend upon future earnings,
Piedmonts financial condition and other factors. There can
be no assurance as to the declaration or payment of any
dividend. Nothing in the Plan obligates Piedmont to declare or
pay any dividend on its common stock.
17
Custody
of Certificates
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34.
|
May
other common stock certificates be deposited with the plan
administrator under the Plan?
|
Participants may deposit any common stock certificates of the
Company now or hereafter registered in their name for credit
under the Plan. There is no charge for this service. Because
participants bear the risk of loss in sending stock certificates
to the plan administrator, it is recommended that certificates
be sent by registered mail, return receipt requested, and
properly insured. The participant must provide instructions to
the plan administrator directing that the shares be deposited to
the participants Plan account. Whenever certificates are
issued to a participant, either upon request or upon termination
of participation, new, differently numbered certificates will be
issued.
Suspension,
Modification or Termination of the Plan
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35.
|
May
the Plan be suspended, modified or terminated?
|
While the Plan is intended to continue indefinitely, Piedmont
reserves the right to suspend or terminate the Plan at any time.
Piedmont also reserves the right to make modifications to the
Plan. Piedmont will notify Participants of any such suspension,
termination or material modification. If the Plan is terminated
or suspended for a period of more than thirty days, any
uninvested optional cash payments will be returned to
participants, certificates for whole shares credited to Plan
accounts will be issued and cash payments will be made for any
fractional shares credited to such Plan accounts.
Piedmont intends to use its best efforts to maintain the
effectiveness of the Registration Statement filed with the SEC
covering the offer and sale of common stock under the Plan.
However, Piedmont has no obligation to offer, issue or sell
common stock to investors or participants under the Plan if, at
the time of the offer, issuance or sale, such Registration
Statement is for any reason not effective. Also, Piedmont may
elect not to offer or sell common stock under the Plan to
investors or participants residing in any jurisdiction or
foreign country where the burden or expense of compliance with
applicable blue sky or securities laws makes such offer or sale
there impracticable or inadvisable. In any of these
circumstances, dividends, if and when declared, will be paid in
cash and any optional cash payments received from such
shareholder will be returned.
DESCRIPTION
OF OUR COMMON STOCK
General
As of November 16, 2009, our authorized capital stock
consists of 200,000,000 shares of common stock without par
value and 175,000 shares of preferred stock without par
value. Our board of directors may establish one or more series
of preferred stock with such rights and preferences as it may
determine. As of November 16, 2009, 73,280,623 shares
of common stock were issued and outstanding and none of our
preferred stock was issued and outstanding.
The following description of our common stock and provisions of
our Articles of Incorporation, as amended and restated (the
Articles of Incorporation), and By-laws are only
summaries and are qualified by reference to our Articles of
Incorporation and By-laws. We encourage you to review complete
copies of our Articles of Incorporation and By-laws, which we
have previously filed with the SEC.
The holders of our common stock are entitled to receive
dividends as and when declared from time to time by the board of
directors out of any of our net profits or net assets legally
available therefore, subject to any preferences that may be
applicable to any share of our preferred stock then outstanding.
The amount of cash dividends that may be paid on common stock is
restricted by provisions contained in certain note agreements
under which our long-term debt was issued. Under the most
restrictive of these provisions, we cannot pay or declare any
dividends or make any other distribution on any class of stock
or make any investments in subsidiaries or permit any subsidiary
to do any of the above (all of the foregoing being
Restricted Payments) except out of Net
Earnings Available for Restricted Payments. Net
Earnings
18
Available for Restricted Payments is defined as the sum of
(a) $50 million plus (b) net earnings (defined as
consolidated gross revenues, including subsidiaries other than
gas and oil subsidiaries, less charges, but not including gains
from the sale, conversion of other disposition of capital
assets, gains from the
write-up
of
assets and equity in the un-remitted earnings of any corporation
which is not a subsidiary) for the period commencing on
January 1, 1991, plus (c) the aggregate cash dividends
paid by oil and gas subsidiaries for the same period, plus
(d) the net cash consideration received upon the sale
subsequent to December 31, 1990, of additional stock of any
class, plus (e) the amount by which any investment in
subsidiaries of the character of loans, advances or guarantees
has been repaid or eliminated subsequent to December 31,
1990, less the sum of (a) the amount of all dividends and
other distributions and other Restricted Payments made, paid or
declared on any of our stock after December 31, 1990, and
(b) the aggregate amount expended, after December 31,
1990, for the redemption, purchase or other acquisition of our
stock or the stock of any subsidiary.
In the event of the liquidation or dissolution of our business,
the holders of common stock will be entitled to receive ratably
the balance of net assets available for distribution after
satisfaction of creditors and the payment of any liquidation or
distribution preference payable with respect to any then
outstanding shares of our preferred stock. Holders of common
stock do not have preemptive rights to purchase additional
shares of common stock or securities convertible into such
shares. There are no redemption provisions on any shares of
common stock. The outstanding shares of common stock are, and
the additional shares offered hereby will be, fully paid and
non-assessable.
Each share of common stock is entitled to one vote with respect
to all matters submitted to a vote of shareholders. Under North
Carolina law, the election of directors requires a plurality of
the votes cast in the election. Shareholders do not have
cumulative voting rights.
Our common stock is traded on the New York Stock Exchange under
the symbol PNY.
Certain
Anti-takeover Effects
Our Articles of Incorporation and By-laws contain certain
provisions that could have the effect of delaying, deferring or
preventing a change in control. These provisions include:
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Classified Board of Directors.
Our Board of
Directors is divided into three classes with staggered terms,
which means that, as a general matter, only one-third of the
Board must stand for re-election at any annual meeting of
shareholders. The classification of directors could have the
effect of making it more difficult for shareholders, including
those holding a majority of the outstanding shares, to force an
immediate change in the composition of our Board. Two
shareholder meetings, instead of one, generally will be required
to effect a change in the control of our Board. The provision
for the classification of directors may be amended, altered,
changed or repealed only upon the affirmative vote of 80% of the
outstanding shares entitled to vote in the election of directors.
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Fixing and Changing Number of Directors.
Our
Articles of Incorporation and By-laws authorize the Board of
Directors to fix the number of directors and provide that the
number may be changed only by (a) the affirmative vote of
80% of the outstanding shares entitled to vote in the election
of Directors or (b) a majority of the entire Board of
Directors.
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Nominations to the Board.
With certain
exceptions, nominations to the Board must be made at least
60 days prior to the date of a meeting of shareholders.
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Removal of Directors.
Directors may be removed
for cause only by the affirmative vote of 80% of the outstanding
shares entitled to vote in the election of directors.
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Fair Price Provisions.
Our Articles of
Incorporation require the affirmative vote of a super majority
of the outstanding shares of voting stock to approve certain
transactions such as actions in connection with any
Business Combination. A Business Combination is
defined to include any merger, consolidation, lease, sale or
disposition of assets or certain other business transactions by
us or our subsidiaries involving an interested
shareholder. An interested shareholder is defined as any
person who is or has announced an intention to become the
beneficial owner of 10% or more of our voting stock (and
certain
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defined affiliates) or an affiliate or associate of an
interested shareholder and that, together with all such other
arrangements, has an aggregate fair market value
and/or
involves aggregate commitments of $10,000,000 or more or more
than 5% of our total assets or shareholders equity as
reflected on our most recent fiscal year-end consolidated
balance sheet. Our Articles of Incorporation require the
affirmative vote of not less than
66
2
/
3
%
of our voting stock, voting together as a single class,
excluding any voting stock beneficially owned by an interested
shareholder, with respect to all Business Combinations involving
the interested shareholder unless (1) the transaction is
approved by our Board of Directors prior to the date on which
directors not affiliated with the interested shareholder and who
were directors prior to the time the interested shareholder
acquired such status (Continuing Directors) comprise
less than a majority of our Board of Directors, and (2) if
the Business Combination involves payment of consideration to
shareholders, certain minimum price and disclosure requirements
are satisfied as to all shareholders, and there has been no
major change in our business or equity capital structure or any
change or reduction in the payment of dividends since the date
the interested shareholder acquired such status. To meet the
minimum price criteria, the shareholders must receive
consideration or retain value per share after the transaction
that is not less than the higher of (i) the highest price
per share paid by the interested shareholder in the transaction
or within two years preceding the first public announcement date
of the transaction, (ii) the fair market value per share of
our common stock on the date the transaction is announced or the
date on which the interested shareholder acquired such status,
whichever is higher or (iii) the fair market value per
share determined pursuant to the immediately preceding clause
(ii), multiplied by the ratio of (x) the highest per share
price paid by the interested shareholder within the two-year
period preceding the date the transaction is announced to
(y) the fair market value on the first day in such two-year
period on which the interested shareholder acquired beneficial
ownership of any share of common stock. The minimum price
provisions must be met with respect to every class or series of
our outstanding capital stock, whether or not the interested
shareholder has previously acquired shares of any particular
class or series. Our Articles of Incorporation require the same
66
2
/
3
%
shareholder approval to amend or repeal the foregoing provisions
or to adopt any provision inconsistent with such provisions
unless the change is proposed by the Board of Directors prior to
the date on which Continuing Directors comprise less than a
majority of the Board.
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Amendment to our By-Laws.
Our By-laws may be
amended only by (a) the affirmative vote of 80% of the
outstanding shares entitled to vote in the election of directors
or by the Board of Directors or (b) a majority of the
entire Board of Directors at a meeting at which a quorum is
present.
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Opt out of North Carolina Anti-Takeover
Statutes.
Our Articles of Incorporation contain
language to opt out of the provisions of two North
Carolina anti-takeover statutes which, under the North Carolina
Business Corporation Act, would otherwise apply to us. The first
of these statutes, called the North Carolina Shareholder
Protection Act, requires that any business combination (as
defined therein) between a corporation and any 20% shareholder
be approved by 95% of the corporations voting shares.
Under the second statute, called the North Carolina
Control Share Acquisition Act, control shares of a
corporation that are acquired in a control share
acquisition (as defined in the statute) have no voting
rights unless such rights are granted by resolution adopted by a
majority of the corporations shareholders, and in the
event such voting rights were to be granted, all other
shareholders would have the right to have their shares in the
corporation redeemed at their fair value, subject to certain
restrictions. Because application of these statutes to us would
create material conflicts with existing provisions of our
Articles of Incorporation regarding Business Combinations, our
Articles of Incorporation include provisions stating that
neither of these statutes will apply to us.
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Issuance of preferred stock.
Our Articles of
Incorporation allow our board of directors to authorize and
issue preferred stock with designations and rights that the
board may determine at its discretion. Our board of directors
may be able to use this authority in a manner that could delay,
defer or prevent a change in control.
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20
Limitations
of Liability and Indemnification of Directors and
Officers
Sections 55-8-50
through
55-8-58
of
the North Carolina Business Corporation Act (NCBCA)
and our By-laws provide for indemnification of our directors and
officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933, as amended. We
have insurance covering expenditures we might incur in
connection with the indemnification of our directors and
officers for their liabilities and expenses.
The NCBCA provides directors and officers with a right to
indemnification when the director or officer has been wholly
successful, on the merits or otherwise, in defense of any
proceeding to which he was a party because he is or was a
director or officer of the corporation. The NCBCA also permits a
corporation to indemnify directors and officers who met a
certain standard of conduct. Directors and officers are also
entitled to apply to a court for an order requiring the
corporation to indemnify the director or officer in a particular
case. The court may grant such an order if it determines the
director or officer is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances.
Nevertheless, under the NCBCA, a corporation may not indemnify a
director or officer in connection with a proceeding by or in the
right of the corporation in which the director or officers is
adjudged liable to the corporation or in connection with any
other proceeding charging improper personal benefit to a
director or officer who is adjudged liable on the basis that
personal benefit was improperly received by such director or
officer.
The NCBCA also authorizes a corporation to indemnify directors
and officers beyond the indemnification rights granted by law.
Our By-laws provide that any person who is or was a director,
and our officers who are also directors or who are designated by
the Board of Directors from time to time as indemnified officers
and any director or officer who at the request of Piedmont
serves or has served as a director, officer, partner, trustee,
employee or agent of any other corporation or other enterprise,
will be reimbursed and indemnified against liability and
expenses incurred by that person in connection with any action,
suit or proceeding arising out of that persons status as
director or officer if it is determined that persons acts
or omissions were not reasonably known or believed by him or her
to be clearly in conflict with Piedmonts best interests.
The By-laws further provide that Piedmont shall indemnify each
director and indemnified officer for his or her reasonable
costs, expenses and attorneys fees incurred in connection
with the enforcement of the rights to indemnification granted
under the By-laws, if it is determined that such director or
indemnified officer is entitled to indemnification under the
By-laws.
As authorized by the NCBCA, and to the fullest extent permitted
by the NCBCA, our Articles of Incorporation limit the liability
of a director by providing that a director shall not be liable
to Piedmont or to any Piedmont shareholder for monetary damages
arising from the directors breach of his or her duties as
a director, except for liability with respect to (i) acts
or omissions not made in good faith that the director at the
time of the breach knew or believed were in conflict with the
best interests of the corporation, (ii) unlawful
distributions, (iii) any transaction from which the
director or officer derived an improper personal benefit and
(iv) acts or omissions occurring prior to the date the
provision of our Articles of Incorporation limiting the
liability of our directors became effective. In addition,
Section 55-8-30(d)
of the NCBCA provides that a director is not liable for any
action taken as a director, or any failure to take any action,
if he or she performed the duties of his or her office in
compliance with the general standards of conduct applicable to
directors of North Carolina corporations.
Transfer
Agent and Registrar
The Transfer Agent and Registrar for the common stock is
American Stock Transfer & Trust Company LLC, 59
Maiden Lane, New York, New York 10038.
LEGAL
MATTERS
The validity of the common stock registered hereby will be
passed upon for us by Moore & Van Allen PLLC.
21
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference from Piedmont Natural Gas Company,
Inc.s Annual Report on
Form 10-K,
and the effectiveness of Piedmont Natural Gas Company,
Inc.s internal control over financial reporting, have been
audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their reports,
which are incorporated herein by reference. Such financial
statements have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in
accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the
SECs Public Reference Room, 100 F Street, N.E.,
Room 1580, Washington, D.C. 20549. You may obtain
information on the operation of the SECs Public Reference
Room by calling the SEC at
1-800-SEC-0330.
The SEC maintains an internet web site that contains reports,
proxy statements and other information regarding us and other
registrants that file electronically with the SEC. The
SECs web site is
http://www.sec.gov.
Information that we file with the SEC may also be read and
copied at the offices of the New York Stock Exchange at
20 Broad Street, New York, New York 10005. You may also
view these documents on the SEC Filings page of our
internet website address at www.piedmontng.com. Information on
our website is not part of this prospectus.
The SEC allows us to incorporate by reference the
information we file with them, which means that we can disclose
important information to you by referring to documents we have
previously filed with the SEC. We incorporate by reference the
documents listed below and any future documents filed with the
SEC (File
No. 001-06196)
under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the Exchange Act),
until we terminate this offering.
(1) our Annual Report on
Form 10-K
for the fiscal year ended October 31, 2008;
(2) our Quarterly Report on
Form 10-Q
for the quarter ended January 31, 2009;
(3) our Quarterly Report on
Form 10-Q
for the quarter ended April 30, 2009;
(4) our Quarterly Report on
Form 10-Q
for the quarter ended July 31, 2009;
(5) our Current Report on
Form 8-K
filed December 5, 2008;
(6) our Current Report on
Form 8-K
filed December 19, 2008;
(7) our Current Report on
Form 8-K
filed March 12, 2009*;
(8) our Current Report on
Form 8-K
filed April 3, 2009;
(9) our Current Report on
Form 8-K
filed August 4, 2009; and
(10) the description of our common stock contained in our
Registration Statement on
Form 8-B
filed under the Exchange Act, including any amendment or report
filed for the purpose of updating such description.
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*
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Information furnished in this Current Report on
Form 8-K
pursuant to Item 7.01 is not incorporated by reference
herein.
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The information incorporated by reference is considered to be
part of this prospectus and information that we file later with
the SEC will automatically update and supersede this
information, as applicable. Any statement contained herein or in
a document, all or a portion of which is incorporated or deemed
to be incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of this prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so
22
modified or superseded shall not be deemed, except as so
modified or amended, to constitute a part of this prospectus.
Upon your written or oral request, we will provide you a copy,
without charge, of any of the filings that are incorporated by
reference into this prospectus. Your request should be directed
to: Corporate Secretary, at Piedmont Natural Gas Company, Inc.,
4720 Piedmont Row Drive, Charlotte, North Carolina 28210,
telephone
(704) 364-3120.
23
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
PROSPECTUS
November 20,
2009
PART II
Information
Not Required in Prospectus
|
|
Item 14.
|
Other
Expenses of Issuance and Distribution.
|
The following is a statement of the expenses (all of which are
estimated except for the SEC registration fee) to be incurred by
Piedmont Natural Gas Company, Inc. (the Company) in
connection with the distribution of securities registered under
this registration statement.
|
|
|
|
|
SEC registration fee
|
|
$
|
3,494
|
|
Fees and expenses of accountants
|
|
$
|
10,000
|
|
Fees and expenses of legal counsel
|
|
$
|
10,000
|
|
Printing fees
|
|
$
|
5,000
|
|
Miscellaneous
|
|
$
|
1,506
|
|
|
|
|
|
|
Total
|
|
$
|
30,000
|
|
|
|
|
|
|
|
|
Item 15.
|
Indemnification
of Directors and Officers.
|
Sections 55-8-50
through
55-8-58
of
the North Carolina Business Corporation Act (NCBCA)
and our By-laws provide for indemnification of our directors and
officers in a variety of circumstances, which may include
liabilities under the Securities Act of 1933, as amended. We
have insurance covering expenditures we might incur in
connection with the indemnification of our directors and
officers for their liabilities and expenses.
The NCBCA provides directors and officers with a right to
indemnification when the director or officer has been wholly
successful, on the merits or otherwise, in defense of any
proceeding to which he was a party because he is or was a
director or officer of the corporation. The NCBCA also permits a
corporation to indemnify directors and officers who met a
certain standard of conduct. Directors and officers are also
entitled to apply to a court for an order requiring the
corporation to indemnify the director or officer in a particular
case. The court may grant such an order if it determines the
director or officer is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances.
Nevertheless, under the NCBCA, a corporation may not indemnify a
director or officer in connection with a proceeding by or in the
right of the corporation in which the director or officers is
adjudged liable to the corporation or in connection with any
other proceeding charging improper personal benefit to a
director or officer who is adjudged liable on the basis that
personal benefit was improperly received by such director or
officer.
The NCBCA also authorizes a corporation to indemnify directors
and officers beyond the indemnification rights granted by law.
Our By-laws provide that any person who is or was a director,
and our officers who are also directors or who are designated by
the Board of Directors from time to time as indemnified officers
and any director or officer who at the request of Piedmont
serves or has served as a director, officer, partner, trustee,
employee or agent of any other corporation or other enterprise,
will be reimbursed and indemnified against liability and
expenses incurred by that person in connection with any action,
suit or proceeding arising out of that persons status as
director or officer if it is determined that persons acts
or omissions were not reasonably known or believed by him or her
to be clearly in conflict with Piedmonts best interests.
The By-laws further provide that Piedmont shall indemnify each
director and indemnified officer for his or her reasonable
costs, expenses and attorneys fees incurred in connection
with the enforcement of the rights to indemnification granted
under the By-laws, if it is determined that such director or
indemnified officer is entitled to indemnification under the
By-laws.
As authorized by the NCBCA, and to the fullest extent permitted
by the NCBCA, our Articles of Incorporation limit the liability
of a director by providing that a director shall not be liable
to Piedmont or to any Piedmont shareholder for monetary damages
arising from the directors breach of his or her duties as
a director, except for liability with respect to (i) acts
or omissions not made in good faith that the director at the
time of the breach knew or believed were in conflict with the
best interests of the corporation, (ii) unlawful
II-1
distributions, (iii) any transaction from which the
director or officer derived an improper personal benefit and
(iv) acts or omissions occurring prior to the date the
provision of our Articles of Incorporation limiting the
liability of our directors became effective. In addition,
Section 55-8-30(d)
of the NCBCA provides that a director is not liable for any
action taken as a director, or any failure to take any action,
if he or she performed the duties of his or her office in
compliance with the general standards of conduct applicable to
directors of North Carolina corporations.
The following documents are filed as exhibits to this
Registration Statement, including those exhibits incorporated
herein by reference to a prior filing of the Company under the
Securities Act or the Exchange Act as indicated in parenthesis:
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
4
|
.1
|
|
Restated Articles of Incorporation of Piedmont Natural Gas
Company, Inc. as of March 2009, filed in the Department of State
of the State of North Carolina (incorporated by reference to
Exhibit 3.1 to the Companys Current Report on
Form 10-Q
for the quarter ended July 31, 2009)
|
|
4
|
.2
|
|
By-laws of Piedmont Natural Gas Company, Inc., dated
December 15, 2006 (incorporated by reference to
Exhibit 3.3 to the Companys
Form 10-K
for the year ended October 31, 2007)
|
|
4
|
.3
|
|
Specimen Certificate of Common Stock (incorporated by reference
to Exhibit 3.3 to the Companys Registration Statement
on
Form 8-B,
dated March 2, 1994)
|
|
4
|
.4
|
|
Piedmont Natural Gas Dividend Reinvestment and Stock Purchase
Plan. Set forth in full in the Prospectus included as
Part I of this Registration Statement.
|
|
5
|
.1
|
|
Opinion of Moore & Van Allen, PLLC regarding the
validity of the securities being registered
|
|
23
|
.1
|
|
Consent of Deloitte & Touche LLP
|
|
23
|
.2
|
|
Consent of Moore & Van Allen, PLLC (included in
Exhibit 5.1)
|
|
24
|
.1
|
|
Power of Attorney (included on signature page)
|
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933,
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the
effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement,
provided, however
, that paragraphs (1)(i), (1)(ii) and
(1)(iii) do not apply if the registration statement is on
Form S-3,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in reports filed with
or furnished to the Commission by the Registrant pursuant to
II-2
Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the
registration statement or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the Registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(ii) Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii) or
(x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be
deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first
used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such
date shall be deemed to be a new effective date of the
registration statement relating to the securities in the
registration statement to which the prospectus relates, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Provided,
however
, that no statement made in a registration statement
or prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference
into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective
date.
(5) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrants
annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of
II-3
1934 (and, where applicable, each filing of an employee benefit
plans annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial
bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification by them is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
city of Charlotte, state of North Carolina, on November 20,
2009.
PIEDMONT NATURAL GAS COMPANY, INC.
|
|
|
|
By:
|
/s/ David
J. Dzuricky
|
David J. Dzuricky
Senior Vice President and Chief Financial Officer
POWER OF
ATTORNEY
Each of the undersigned directors and officers of the above
named Registrant, by his or her execution hereof, hereby
constitutes and appoints David J. Dzuricky, Jane Lewis-Raymond,
Robert O. Pritchard and Judy Z. Mayo and each of them, with full
power of substitution, as his or her true and lawful
attorneys-in-fact and agents, to do any and all acts and things
for him or her, and in his or her name, place and stead, to
execute and sign any and all amendments (including
post-effective amendments) and supplements to such Registration
Statement and any additional registration statement pursuant to
Rule 462(b) under the Securities Act of 1933, and file the
same, together with all exhibits and schedules thereto and all
other documents in connection therewith, with the Commission and
with such state securities authorities as may be appropriate,
granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform each and every act and
thing requisite, necessary or advisable to be done in and about
the premises, as fully and to all intents and purposes as the
undersigned might or could do in person, and hereby ratifying
and confirming all the acts of said attorneys-in-fact and
agents, or any of them, which they may lawfully do in the
premises or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the date indicated:
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ Thomas
E. Skains
Thomas
E. Skains
|
|
Chairman of the Board, President and Chief Executive Officer
(principal executive officer)
|
|
November 19, 2009
|
|
|
|
|
|
/s/ David
J. Dzuricky
David
J. Dzuricky
|
|
Senior Vice President and Chief Financial Officer (principal
financial officer)
|
|
November 20, 2009
|
|
|
|
|
|
/s/ Jose
M. Simon
Jose
M. Simon
|
|
Vice President and Controller
(principal accounting officer)
|
|
November 20, 2009
|
|
|
|
|
|
/s/ Jerry
W. Amos
Jerry
W. Amos
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Dr. E.
James Burton
Dr. E.
James Burton
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Malcolm
E. Everett III
Malcolm
E. Everett III
|
|
Director
|
|
November 19, 2009
|
II-5
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
/s/ John
W. Harris
John
W. Harris
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Aubrey
B. Harwell, Jr.
Aubrey
B. Harwell, Jr.
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Frank
B. Holding, Jr.
Frank
B. Holding, Jr.
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Dr. Frankie
T. Jones, Sr.
Dr. Frankie
T. Jones, Sr.
|
|
Director
|
|
November 20, 2009
|
|
|
|
|
|
/s/ Vicki
McElreath
Vicki
McElreath
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Minor
M. Shaw
Minor
M. Shaw
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Muriel
W. Sheubrooks
Muriel
W. Sheubrooks
|
|
Director
|
|
November 19, 2009
|
|
|
|
|
|
/s/ Dr.
David E. Shi
Dr. David
E. Shi
|
|
Director
|
|
November 19, 2009
|
II-6
Exhibit Index
|
|
|
|
|
Exhibit
|
|
|
No.
|
|
Description
|
|
|
4
|
.1
|
|
Restated Articles of Incorporation of Piedmont Natural Gas
Company, Inc. as of March 2009, filed in the Department of State
of the State of North Carolina (incorporated by reference to
Exhibit 3.1 to the Companys Current Report on
Form 10-Q
for the quarter ended July 31, 2009)
|
|
4
|
.2
|
|
By-laws of Piedmont Natural Gas Company, Inc., dated
December 15, 2006 (incorporated by reference to
Exhibit 3.3 to the Companys
Form 10-K
for the year ended October 31, 2007)
|
|
4
|
.3
|
|
Specimen Certificate of Common Stock (incorporated by reference
to Exhibit 3.3 to the Companys Registration Statement
on
Form 8-B,
dated March 2, 1994)
|
|
4
|
.4
|
|
Piedmont Natural Gas Dividend Reinvestment and Stock Purchase
Plan. Set forth in full in the Prospectus included as
Part I of this Registration Statement.
|
|
5
|
.1
|
|
Opinion of Moore & Van Allen, PLLC regarding the
validity of the securities being registered
|
|
23
|
.1
|
|
Consent of Deloitte & Touche LLP
|
|
23
|
.2
|
|
Consent of Moore & Van Allen, PLLC (included in
Exhibit 5.1)
|
|
24
|
.1
|
|
Power of Attorney (included on signature page)
|
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