CALCULATION OF REGISTRATION FEE(1)
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| Title of Each Class of
Securities to be registered |
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Proposed
Maximum
Aggregate
Offering Price |
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Amount of
Registration Fee (2) |
| Common Stock, no par value |
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$170,000,000 |
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$19,754 |
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| (1) |
This “Calculation of Registration Fee” table shall be deemed to update the “Calculation of Registration Fee” table in the Registration Statement on Form S-3 (File No. 333-196561) originally
filed by Piedmont Natural Gas Company, Inc. on June 6, 2013 in accordance with Rules 456(b) and 457(r) under the Securities Act of 1933, as amended (the “Securities Act”). |
| (2) |
Calculated in accordance with Rules 457(o) and 457(r) under the Securities Act. |
Filed pursuant to Rule 424(b)(3)
Registration No. 333-196561
Prospectus Supplement
(To Prospectus Dated
June 6, 2014)
Piedmont Natural Gas Company, Inc.
Up to $170,000,000
Common Stock
We may issue,
offer and sell up to $170,000,000 in the aggregate of our common stock from time to time through Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and J.P. Morgan Securities LLC (“J.P. Morgan”), as our
agents under separate ATM equity offering sales agreements. We refer to Merrill Lynch and J.P. Morgan collectively as the sales agents. Such ATM equity offering sales agreements, or sales agency agreements, provide that, in addition to the issuance
and sale of common stock by us through the sales agents acting as sales agents or directly to the sales agents acting as principals, we also may enter into forward sale agreements, between us and an affiliate of Merrill Lynch or an affiliate of J.P.
Morgan. We refer to these entities, when acting in such capacity, as forward purchasers. In connection with each such forward sale agreement, the relevant forward purchaser will, at our request, borrow from third parties and, through the relevant
sales agent, sell a number of shares of our common stock equal to the number of shares of our common stock that will underlie such forward sale agreement to hedge such forward sale agreement. We refer to sales agents, when acting as agents for
forward purchasers, as forward sellers. In no event will the aggregate number of shares of our common stock sold through the sales agents, each as an agent for us, as principal and as a forward seller, under the applicable sales agency agreement
have an aggregate sales price in excess of $170,000,000. The offering of our common stock pursuant to the sales agency agreements will terminate upon the earliest of (1) the sale, under the sales agency agreements, of shares of our common stock
with an aggregate sales price of $170,000,000, (2) October 31, 2016 (subject to extension as described below) and (3) any time upon two days’ notice.
We will not initially receive any proceeds from the sale of borrowed shares of our common stock by a forward seller. We expect to receive
proceeds from the sale of shares of our common stock, subject to certain adjustments, upon future physical settlement(s) of the relevant forward sale agreement with the relevant forward purchaser on dates specified by us on or prior to the maturity
date of such forward sale agreement. If we elect to cash settle or net share settle a forward sale agreement, we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement),
and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser.
The shares of our common stock will be offered at market prices prevailing at the time of sale. We will pay each sales agent a commission
equal to 1.5% of the sales price of all shares of our common stock sold through it as our sales agent under the applicable sales agency agreement. In connection with each forward sale agreement, the relevant forward seller will receive, reflected in
a reduced initial forward sale price payable by the relevant forward purchaser under its forward sale agreement, a commission equal to 1.5% of the volume weighted average of the sales prices of all borrowed shares of our common stock sold during the
applicable period by it as a forward seller.
Our common stock is listed on the New York Stock Exchange under the ticker symbol
“PNY”. On January 6, 2015, the last reported sale price on The New York Stock Exchange for our common stock was $38.44 per share.
Investing in
our common stock involves risks that are described in the section entitled “Risk Factors” beginning on page S-4 of this prospectus supplement and beginning on page 4 of the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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| BofA Merrill Lynch |
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J.P. Morgan |
January 7, 2015
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and certain
other matters relating to us and our financial condition. The second part is the accompanying prospectus, which provides more general information about securities we may offer from time to time. Some of the information in the accompanying prospectus
does not apply to this offering. You should read this entire prospectus supplement and the accompanying prospectus, including the documents incorporated by reference that are described under “Where You Can Find More Information” in the
accompanying prospectus.
You should rely only on the information contained or incorporated by reference in this prospectus supplement
and the accompanying prospectus and in any written communication from us or the sales agents. To the extent the information in this prospectus supplement differs from the information in the accompanying prospectus, you should rely on the information
in this prospectus supplement. We have not, and the sales agents, forward sellers and forward purchasers have not, authorized any other person to provide you with different or inconsistent information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the sales agents, forward sellers and forward purchasers are not, making an offer of these securities in any jurisdiction where the offer or sale is not permitted. The information
in this prospectus supplement, the accompanying prospectus, the documents incorporated by reference and any written communication from us is only accurate as of the date of the respective documents in which the information appears. Our business,
financial condition, results of operations and prospects may have changed since those dates.
When this prospectus supplement uses the
words “Piedmont,” “we,” “us,” “our” or similar references, they refer to Piedmont Natural Gas Company, Inc. and its subsidiaries unless otherwise expressly stated or the context otherwise requires.
S-1
CAUTIONARY NOTICE REGARDING CERTAIN FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents and information incorporated by reference herein may
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based
on management’s current expectations from information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected in the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, the following, as well as those discussed in the “Risk Factors”
section of this prospectus supplement and the accompanying prospectus and those incorporated by reference from our Annual Report on Form 10-K for the year ended October 31, 2014 under the title “Item 1A. Risk Factors” and in any
subsequent periodic reports that are incorporated by reference into this prospectus supplement and the accompanying prospectus:
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Economic conditions in our markets. |
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Wholesale price of natural gas. |
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Availability of adequate interstate pipeline transportation capacity and natural gas supply. |
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Regulatory actions at the state level that impact our ability to earn a reasonable rate of return and fully recover our operating costs on a timely basis. |
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Competition from other companies that supply energy. |
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Changes in the regional economies, politics, regulations and weather patterns of the three states in which our operations are concentrated. |
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Costs of complying or effect of noncompliance with state and federal laws and regulations that are applicable to us. |
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Effect of climate change, carbon neutral or energy efficiency legislation or regulations on costs and market opportunities. |
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Changes in local building codes or appliance standards. |
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Operational interruptions to our gas distribution and transmission activities. |
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Inability to complete necessary or desirable pipeline expansion or infrastructure development projects. |
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Elevated levels of capital expenditures. |
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Changes to our credit ratings. |
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Availability and cost of capital. |
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Federal and state fiscal, tax and monetary policies. |
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Ability to generate sufficient cash flows to meet all our cash needs. |
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Ability to satisfy all of our outstanding debt obligations. |
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Ability of counterparties to meet their obligations to us. |
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Costs of providing pension benefits. |
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Earnings from the joint venture businesses in which we invest. |
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Ability to attract and retain professional and technical employees. |
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Cybersecurity breaches or failure of technology systems. |
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Ability to obtain and maintain sufficient insurance. |
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Change in number of outstanding shares. |
S-2
Other factors may be described elsewhere in this prospectus supplement and the accompanying
prospectus. All of these factors are difficult to predict, and many of them are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. When used in our
documents or oral presentations, the words “expect,” “believe,” “project,” “anticipate,” “intend,” “may,” “should,” “could,” “assume,” “estimate,”
“forecast,” “future,” “indicate,” “outlook,” “plan,” “predict,” “seek,” “target,” “would” and variations of such words and similar expressions are intended to
identify forward-looking statements.
Forward-looking statements are based on information available to us as of the date they are made,
and we do not undertake any obligation to update publicly any forward-looking statement either as a result of new information, future events or otherwise except as required by applicable laws and regulations.
This list of factors is not all-inclusive because it is not possible to predict all factors. You should also carefully consider the
information referred to under the heading “Risk Factors” in this prospectus supplement, in the accompanying prospectus and in our other filings with the Securities and Exchange Commission (“SEC”).
S-3
RISK FACTORS
Investing in our common stock involves risks. You should carefully review the information contained elsewhere or incorporated by reference
in this prospectus supplement and the accompanying prospectus and should carefully consider the following risk factors, as well as the “Risk Factors” section in the accompanying prospectus on page 4, in our Annual Report on Form 10-K
for the year ended October 31, 2014 under the title “Item 1A. Risk Factors” and in any subsequent periodic reports that are incorporated by reference into this prospectus supplement and the accompanying prospectus. Each of the
risks described could materially adversely affect our operations and financial results and the value of your investment in our common stock.
Settlement provisions contained in any forward sale agreement subject us to certain risks.
A forward purchaser will have the right to accelerate a forward sale agreement that it enters into with us and require us to physically settle
such forward sale agreement on a date specified by such forward purchaser if (1) in such forward purchaser’s commercially reasonable judgment, it or its affiliate is unable to hedge (or maintain a hedge of) its exposure under such forward
sale agreement because (x) insufficient shares of our common stock have been made available for borrowing by securities lenders or (y) the forward purchaser or its affiliate would incur a stock loan cost in excess of a specified threshold;
(2) we declare any dividend, issue or distribution on shares of our common stock (a) payable in cash in excess of specified amounts, (b) that constitutes an extraordinary dividend under the forward sale agreement, (c) payable in
securities of another company as a result of a spin-off or similar transaction, or (d) of any other type of securities (other than our common stock), rights, warrants or other assets for payment at less than the prevailing market price;
(3) certain ownership thresholds applicable to such forward purchaser and its affiliates are exceeded; (4) an event is announced that if consummated would result in a specified extraordinary event (including certain mergers or tender
offers, as well as certain events involving our nationalization, a delisting of our common stock, or change in law); or (5) certain other events of default or termination events occur, including, among others, any material misrepresentation
made in connection with such forward sale agreement or our insolvency (each as more fully described in each forward sale agreement).
A
forward purchaser’s decision to exercise its right to accelerate any forward sale agreement and to require us to settle any such forward sale agreement will be made irrespective of our interests, including our need for capital. In such cases,
we could be required to issue and deliver shares of our common stock under the terms of the physical settlement provisions of the applicable forward sale agreement irrespective of our capital needs, which would result in dilution to our earnings per
share and return on equity. In addition, upon certain events of bankruptcy, insolvency or reorganization relating to us, the forward sale agreement will terminate without further liability of either party. Following any such termination, we would
not issue any shares and we would not receive any proceeds pursuant to the forward sale agreement.
Except under the circumstances
described above, we generally have the right to elect physical, cash or net share settlement under each forward sale agreement. Subject to the provisions of such forward sale agreement, delivery of our shares on any physical settlement of such
forward sale agreement will result in dilution to our earnings per share and return on equity. If we elect to cash or net share settle all or a portion of the shares of our common stock underlying any forward sale agreement, we would expect the
relevant forward purchaser or one of its affiliates to purchase shares of our common stock in secondary market transactions over an unwind period to:
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return shares of our common stock to securities lenders in order to unwind such forward purchaser’s hedge (after taking into consideration any shares of our common stock to be delivered by us to such forward
purchaser, in the case of net share settlement); and, if applicable, |
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in the case of net share settlement, deliver shares of our common stock to us to the extent required in settlement of such forward sale agreement. |
If the price of our common stock at which these purchases are made is below the relevant forward sale price, such forward purchaser will pay us such
difference in cash (if we cash settle) or deliver to us shares of our
S-4
common stock having a market value equal to such difference (if we net share settle). If the price of our common stock at which these purchases are made exceeds the applicable forward sale price,
we will pay such forward purchaser an amount in cash equal to such difference (if we elect to cash settle) or we will deliver to such forward purchaser a number of shares of our common stock having a market value equal to such difference (if we
elect to net share settle). Any such difference could be significant. See “Plan of Distribution (Conflicts of Interest)—Sales Through Forward Sellers.”
In addition, the purchase of our common stock by a forward purchaser or its affiliate to unwind the forward purchaser’s hedge position
could cause the price of our common stock to increase over time, thereby increasing the amount of cash (in the case of cash settlement), or the number of shares (in the case of net share settlement), that we would owe such forward purchaser upon
settlement of the applicable forward sale agreement or decrease the amount of cash (in the case of cash settlement), or the number of shares (in the case of net share settlement), that such forward purchaser would owe us upon settlement of the
applicable forward sale agreement.
S-5
USE OF PROCEEDS
We intend to use any net proceeds that we receive upon the issuance and sale of shares of our common stock by us through the sales agents to
finance capital expenditures, to repay outstanding short-term, unsecured notes under our commercial paper program and for general corporate purposes. As of October 31, 2014, we had $355 million of commercial paper outstanding with a weighted
average interest rate of 0.17% and remaining maturities of 3 to 17 days.
We will not initially receive any proceeds from the sale of
borrowed shares of our common stock by the forward sellers, as agents for the forward purchasers, in connection with any forward sale agreement as a hedge of such forward sale agreement. In the event of full physical settlement of a forward sale
agreement, which we expect to occur on or prior to the maturity date of such forward sale agreement, we expect to receive aggregate cash proceeds equal to the product of the initial forward sale price under such forward sale agreement and the number
of shares of our common stock underlying such forward sale agreement, subject to the price adjustment and other provisions of such forward sale agreement. We intend to use any cash proceeds that we receive upon physical settlement of any forward
sale agreement, if physical settlement applies, or upon cash settlement of any forward sale agreement, if we elect cash settlement, for the purposes provided in the immediately preceding paragraph. If, however, we elect to cash settle or net share
settle any forward sale agreement, we would expect to receive an amount of proceeds that is significantly lower than the product set forth in the second preceding sentence (in the case of any cash settlement) or will not receive any proceeds (in the
case of any net share settlement), and we may owe cash (in the case of any cash settlement) or shares of our common stock (in the case of any net share settlement) to the forward purchaser.
S-6
PLAN OF DISTRIBUTION (CONFLICTS OF INTEREST)
We have entered into separate sales agency agreements, each dated January 7, 2015, with each of the sales agents, forward sellers and forward
purchasers under which we may issue and sell up to $170,000,000 in the aggregate of shares of our common stock from time to time through the sales agents acting as sales agents or directly to the sales agents acting as principals for the offer and
sale of shares of our common stock. Further, the sales agency agreements provide that, in addition to the issuance and sale of shares of our common stock by us through the sales agents, we also may deliver instructions to any sales agent specifying
that such sales agent, as a forward seller, use commercially reasonable efforts to sell, from time to time, shares of our common stock borrowed by the applicable forward purchaser in connection with one or more forward sale agreements as described
below. In no event will the aggregate number of shares of our common stock sold through the sales agents, each as an agent for us, as principal and as a forward seller, under the sales agency agreements have an aggregate sales price in excess of
$170,000,000.
The sales, if any, of shares of our common stock under any sales agency agreement will be made in “at the market
offerings” as defined in Rule 415 of the Securities Act, including sales made directly on The New York Stock Exchange, the existing trading market for shares of our common stock, or sales made to or through a market maker or through an
electronic communications network. In addition, shares of our common stock may be offered and sold by such other methods, including privately negotiated transactions, as we and any sales agent agree to in writing.
We have also agreed to reimburse the sales agents, the forward sellers and the forward purchasers for their reasonable documented
out-of-pocket expenses, including substantially all fees and expenses of counsel in connection with the at-the-market program. The fees and expenses of counsel in connection with the establishment of the
at-the-market program are estimated to be approximately $240,000. These reimbursed fees and expenses are deemed to be underwriting compensation to the sales agents under Financial Industry Regulatory
Authority, Inc. (“FINRA”) Rule 5110.
In connection with the sale of our common stock as contemplated in this prospectus
supplement, the sales agents may be deemed to be “underwriters” within the meaning of the Securities Act, and the compensation paid to the sales agents may be deemed to be underwriting commissions or discounts. We have agreed to indemnify
the sales agents and the forward purchasers against certain liabilities, including liabilities under the Securities Act.
We intend to
report to the SEC at least quarterly (1) the number of shares of our common stock sold through the sales agents in connection with at-the-market sales as described below under “—Sales Through Sales Agents,” (2) the number of
borrowed shares of our common stock sold by the forward sellers, as agents for the forward purchasers, in connection with the forward sale agreements as described below under “—Sales Through Forward Sellers” and (3) the net
proceeds received by us and the compensation paid by us to the sales agents in connection with transactions described in clauses (1) and (2).
Sales of our common stock as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company
or by such other means as we and the sales agents may agree upon. The offering of our common stock pursuant to the sales agency agreements will terminate upon the earliest of (1) the sale, under the sales agency agreements, of shares of our
common stock with an aggregate sales price of $170,000,000, (2) October 31, 2016 (provided that the sales agency agreements will continue in effect for the duration of any forward stock purchase transaction entered into, but not yet
settled, before October 31, 2016) and (3) any time upon two days’ notice.
Sales Through Sales Agents
From time to time during the term of the sales agency agreements, and subject to the terms and conditions set forth therein, we may deliver
instructions to any of the sales agents. Upon receipt of such instructions from
S-7
us, and subject to the terms and conditions of the applicable sales agency agreement, each sales agent has agreed to use its commercially reasonable efforts consistent with its normal trading and
sales practices to sell the amount of shares of our common stock specified in our instructions. We or the relevant sales agent may suspend the offering of shares of our common stock at any time upon proper notice to the other, upon which the selling
period will immediately terminate. Settlement for sales of shares of our common stock will occur on the third trading day following the date on which the sales were made unless another date shall be agreed to in writing by us and the relevant sales
agent. The obligation of any sales agent under the applicable sales agency agreement to sell shares of our common stock pursuant to our instructions is subject to a number of conditions, which such sales agent reserves the right to waive in its sole
discretion.
We will pay each sales agent a commission equal to 1.5% of the sales price of all shares of our common stock sold through it
as our agent under the applicable sales agency agreement.
Sales Through Forward Sellers
From time to time during the term of the sales agency agreements, and subject to the terms and conditions set forth therein, we may enter into
one or more forward sale agreements with a forward purchaser and deliver instructions to its sales agent, requesting that the sales agent execute sales of borrowed shares of our common stock as a forward seller in connection with the applicable
forward sale agreement, and subject to the terms and conditions of the relevant sales agency agreement, the relevant forward purchaser will attempt to borrow, and such forward seller will use its commercially reasonable efforts consistent with its
normal trading and sales practices to sell, such shares of our common stock on such terms to hedge such forward purchaser’s exposure under such forward sale agreement. We or the relevant forward seller may immediately suspend the offering of
shares of our common stock at any time upon proper notice to the other. We expect settlement between a forward purchaser and the relevant forward seller of sales of borrowed shares of our common stock, as well as the settlement between the relevant
forward seller and buyers of such shares in the market, to occur on the third trading day following each date on which the sales are made unless another date shall be agreed to in writing by us and the relevant sales agent. The obligation of each
forward seller under the relevant sales agency agreement to execute such sales of shares of our common stock is subject to a number of conditions, which each forward seller reserves the right to waive in its sole discretion.
In connection with each forward sale agreement, the relevant forward seller will receive, reflected in a reduced initial forward sale price
payable by the relevant forward purchaser under its forward sale agreement, a commission equal to 1.5% of the volume weighted average of the sales prices of all borrowed shares of our common stock sold during the applicable period by it as a forward
seller. We refer to this commission rate as the forward selling commission.
The initial forward sale price per share under each forward
sale agreement will equal the product of (1) an amount equal to one minus the applicable forward selling commission and (2) the volume weighted average price per share at which the borrowed shares of our common stock were sold pursuant to
the relevant sales agency agreement by the relevant forward seller to hedge the relevant forward purchaser’s exposure under such forward sale agreement. Thereafter, the initial forward sale price will be subject to the price adjustment
provisions of the relevant forward sale agreement. If we elect to physically settle any forward sale agreement by delivering shares of our common stock, we will receive an amount of cash from the relevant forward purchaser equal to the product of
the initial forward sale price per share under such forward sale agreement and the number of shares of our common stock underlying such forward sale agreement, subject to the price adjustment and other provisions of such forward sale agreement. Each
forward sale agreement will provide that the initial forward sale price, as well as the sales prices used to calculate the initial forward sale price, will be subject to adjustment based on a floating interest rate factor equal to the federal funds
rate less a spread. In addition, the initial forward sale price will be subject to decrease on certain dates specified in the relevant forward sale agreement by the amount per share of quarterly dividends we currently expect to declare during the
term of such forward sale agreement. If the federal funds rate is less than the spread on any day, the interest rate factor will result in a daily reduction of the forward sale price.
S-8
Before any issuance of shares of our common stock upon physical settlement of any forward sale
agreement, such forward sale agreement will be reflected in our diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of our common stock used in calculating diluted earnings per share is
deemed to be increased by the excess, if any, of the number of shares that would be issued upon physical settlement of such forward sale agreement over the number of shares that could be purchased by us in the market (based on the average market
price during the period) using the proceeds receivable upon settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, prior to physical settlement of the forward sale agreement and subject to the
occurrence of certain events, we anticipate there will be no dilutive effect on our earnings per share except during periods when the average market price of our common stock is above the per share adjusted forward sale price of such forward sale
agreement. However, if we decide to physically settle any forward sale agreement, delivery of shares of our common stock on any physical settlement of such forward sale agreement will result in dilution to our earnings per share and return on
equity.
Except under the circumstances described below, we have the right, in lieu of physical settlement of any forward sale agreement,
to elect cash or net share settlement of such forward sale agreement. If we elect cash or net share settlement of any forward sale agreement, we would expect the relevant forward purchaser or one of its affiliates to purchase shares of our common
stock in secondary market transactions over an unwind period to:
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return shares of our common stock to securities lenders in order to unwind such forward purchaser’s hedge (after taking into consideration any shares of our common stock to be delivered by us to such forward
purchaser, in the case of net share settlement); and, if applicable, |
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in the case of net share settlement, deliver shares of our common stock to us to the extent required in settlement of such forward sale agreement. |
If the price of our common stock at which these purchases are made is below the relevant forward sale price, such forward purchaser will pay
us such difference in cash (if we cash settle) or deliver to us shares of our common stock having a market value equal to such difference (if we net share settle). If the price of our common stock at which these purchases are made exceeds the
applicable forward sale price, we will pay such forward purchaser an amount in cash equal to such difference (if we elect to cash settle) or we will deliver to such forward purchaser a number of shares of our common stock having a market value equal
to such difference (if we elect to net share settle). Any such difference could be significant.
In addition, the purchase of our common
stock by a forward purchaser or its affiliate to unwind the forward purchaser’s hedge position could cause the price of our common stock to increase over time, thereby increasing the amount of cash (in the case of cash settlement), or the
number of shares (in the case of net share settlement), that we would owe such forward purchaser upon settlement of the applicable forward sale agreement or decrease the amount of cash (in the case of cash settlement), or the number of shares (in
the case of net share settlement), that such forward purchaser would owe us upon settlement of the applicable forward sale agreement.
A
forward purchaser will have the right to accelerate the forward sale agreement that it enters into with us and require us to physically settle such forward sale agreement on a date specified by such forward purchaser if (1) in such forward
purchaser’s commercially reasonable judgment, it or its affiliate is unable to hedge (or maintain a hedge of) its exposure under such forward sale agreement because (x) insufficient shares of our common stock have been made available for
borrowing by securities lenders or (y) the forward purchaser or its affiliate would incur a stock loan cost in excess of a specified threshold; (2) we declare any dividend, issue or distribution on shares of our common stock
(a) payable in cash in excess of specified amounts, (b) that constitutes an extraordinary dividend under the forward sale agreement, (c) payable in securities of another company as a result of a spin-off or similar transaction, or
(d) of any other type of securities (other than our common stock), rights, warrants or other assets for payment at less than the prevailing market price; (3) certain ownership thresholds applicable to such forward purchaser and its
affiliates are exceeded; (4) an event is announced that if consummated would result in a specified extraordinary event (including certain mergers or tender offers, as well as certain events involving our nationalization, a delisting of our
common stock, or change
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in law); or (5) certain other events of default or termination events occur, including, among others, any material misrepresentation made in connection with such forward sale agreement or
our insolvency (each as more fully described in each forward sale agreement).
A forward purchaser’s decision to exercise its right
to accelerate any forward sale agreement and to require us to settle any such forward sale agreement will be made irrespective of our interests, including our need for capital. In such cases, we could be required to issue and deliver shares of our
common stock under the terms of the physical settlement provisions of the applicable forward sale agreement irrespective of our capital needs, which would result in dilution to our earnings per share and return on equity. In addition, upon certain
events of bankruptcy, insolvency or reorganization relating to us, the forward sale agreement will terminate without further liability of either party. Following any such termination, we would not issue any shares and we would not receive any
proceeds pursuant to the forward sale agreement.
Restrictions on Sales of Similar Securities
We have agreed not to, unless we give the sales agents at least five business days’ prior written notice, (i) directly or indirectly
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of our common stock or any
securities convertible into or exercisable or exchangeable for shares of our common stock or file any registration statement under the Securities Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or
transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of our common stock, whether any such swap, agreement or transaction described in clause (i) or (ii) above is to be settled by
delivery of our common stock or such other securities, in cash or otherwise. The restriction described in this paragraph does not apply to sales of:
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shares of our common stock we offer or sell pursuant to the sales agency agreements (including sales of borrowed shares of our common stock by the forward sellers in connection with any forward sale agreement);
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shares of our common stock we issue upon physical settlement or net share settlement of any forward sale agreement; |
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shares of our common stock we issue upon the exercise of an option or warrant or the conversion of a security; or |
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shares of our common stock and options to purchase shares we issue, in either case, pursuant to any employee or director stock option, restricted stock unit or benefit plan (including dividend reinvestment thereunder),
any stock purchase or ownership plan or our dividend reinvestment and stock purchase plan. |
No Public Offering Outside of the United
States
No action has been or will be taken in any jurisdiction (except in the United States) that would permit a public offering of
the shares of our common stock, or the possession, circulation, or distribution of this prospectus supplement or the accompanying prospectus or any other material relating to us or the shares of our common stock in any jurisdiction where action for
that purpose is required. Accordingly, the shares of our common stock offered by this prospectus supplement and the accompanying prospectus may not be offered or sold, directly or indirectly, and this prospectus supplement, the accompanying
prospectus and any other offering material or advertisements in connection with the shares of our common stock may not be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations
of any such country or jurisdiction.
S-10
Conflicts of Interest
Certain of the sales agents or their affiliates may hold a portion of the commercial paper that we intend to repay using a portion of the net
proceeds in connection with the issuance and sale of our common stock by us through the sales agents or in the event of physical settlement or cash settlement of any forward sale agreement. In such event, it is possible that one or both of the sales
agents or their affiliates could receive at least 5% of the net proceeds of the offering, and in that case such sales agent would be deemed to have a conflict of interest under FINRA Rule 5121 (Public Offerings of Securities with Conflicts of
Interest). In addition, the forward purchasers will receive the net proceeds of any sale of borrowed shares of our common stock pursuant to this prospectus supplement in connection with any forward sale agreement. Because an affiliate of Merrill
Lynch or an affiliate of J.P. Morgan is expected to receive part of the net proceeds from the sale of shares of our common stock in connection with any forward sale agreement, such sales agents would be deemed to have a conflict of interest under
FINRA Rule 5121. As a result, such sales agents would be required to conduct the distribution of our common stock in accordance with FINRA Rule 5121. If the distribution is conducted in accordance with FINRA Rule 5121, such sales agents would not be
permitted to confirm a sale to an account over which it exercises discretionary authority without first receiving specific written approval from the account holder.
S-11
LEGAL MATTERS
Certain legal matters in connection with the offering of our common stock will be passed upon for us by Parker Poe Adams & Bernstein
LLP, Charlotte, North Carolina. Certain legal matters will be passed upon for sales agents by Hunton & Williams LLP, New York, New York and Cleary Gottlieb Steen & Hamilton LLP, New York, New York.
EXPERTS
The consolidated financial statements, incorporated into this prospectus supplement by reference from Piedmont’s Annual Report on Form
10-K for the year ended October 31, 2014, and the effectiveness of Piedmont’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 consolidated financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
S-12
PROSPECTUS
Piedmont Natural Gas Company, Inc.
Debt Securities, Common Stock, Preferred Stock, Stock Purchase Contracts,
Stock Purchase Contract Units, Depositary Shares and Warrants
We may offer and sell, from time to time in one or more issuances, (1) one or more series of debt securities, which may be senior or
subordinated notes or debentures, or other senior or subordinated evidences of indebtedness, and which may include terms permitting or requiring holders to convert or exchange their debt securities for common stock, preferred stock or other
securities, (2) shares of our common stock, (3) shares of our preferred stock, which may include terms permitting or requiring holders to convert or exchange their preferred stock for common stock or other securities, (4) stock
purchase contracts, (5) stock purchase contract units that consist of (a) a stock purchase contract and (b) senior or subordinated debt securities, preferred stock, U.S. Treasury securities or other debt obligations of third parties,
that may be used to secure the holders’ obligations under a purchase contract, (6) depositary shares or (7) warrants.
We
will provide you with the specific terms of the particular securities being offered in supplements to this prospectus. Any prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus
and each related prospectus supplement carefully before you make an investment decision. This prospectus may not be used to sell securities unless accompanied by a prospectus supplement.
Our shares of common stock are listed on the New York Stock Exchange under the symbol “PNY.”
Investing in these securities involves risks. Before making an investment decision, you should consider the “Risk
Factors” section on page 4 and in any related prospectus supplement, and the information incorporated by reference from Piedmont’s Annual Report on Form 10-K for the year ended October 31, 2013 and our Quarterly Reports on Form
10-Q for the quarters ended January 31, 2014 and April 30, 2014, under the title “Item 1A. Risk Factors,” and from time to time in other filings with the Securities and Exchange Commission.
Our principal executive offices are located at 4720 Piedmont Row Drive, Charlotte, North Carolina 28210, and our telephone number at that
location is (704) 364-3120.
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 June 6, 2014.
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
The information contained in this prospectus is not complete and may be changed. You should rely only on the information provided in or
incorporated by reference in this prospectus, any prospectus supplement or documents to which we otherwise refer you. We have not authorized anyone else to provide you with different information. We are not making an offer of any securities in any
jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus, any prospectus supplement or any document incorporated by reference is accurate as of any date other than the date of the document in which
such information is contained or such other date referred to in such document, regardless of the time of any sale or issuance of a security.
This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission (the “SEC”)
utilizing a “shelf” registration process. Under this shelf process, we may sell different types of securities described in this prospectus in one or more offerings at any time and from time to time. This prospectus provides you with a
general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering and the securities offered by us in that offering. The
prospectus supplement may also add, update or change information in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the headings “Where You Can Find More
Information” and “Incorporation by Reference.”
This prospectus contains summaries of certain provisions contained in some
of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by reference to the actual documents. Copies of some of the documents referred to herein
have been filed or will be filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below in the section entitled “Where You Can
Find More Information.”
1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, and the documents and information incorporated by reference herein, may contain forward-looking statements within the meaning
of Section 27A of of the Securities Act, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements relate to our
anticipated financial performance, management plans and objectives for our future operations, our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in
reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set
forth in the forward-looking statements.
Forward-looking statements include the items identified in the preceding paragraph, the
information concerning possible or assumed future results of our operations and other statements contained or incorporated in this prospectus or the accompanying prospectus supplement identified by words such as “expect,”
“believe,” “project,” “anticipate,” “intend,” “may,” “should,” “could,” “assume,” “estimate,” “forecast,” “future,” “indicate,”
“outlook,” “plan,” “predict,” “seek,” “target,” “would” and other words and terms of similar meaning.
You should not place undue reliance on the forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our
actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Those factors may affect our operations, markets, products, services
and rates. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking
statement include, among others, the following:
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Economic conditions in our markets. |
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Wholesale price of natural gas. |
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Availability of adequate interstate pipeline transportation capacity and natural gas supply. |
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Regulatory actions at the state level that impact our ability to earn a reasonable rate of return and fully recover our operating costs on a timely basis. |
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Competition from other companies that supply energy. |
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Changes in the regional economies, politics, regulations and weather patterns of the three states in which our operations are concentrated. |
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Costs of complying or effect of noncompliance with state and federal laws and regulations that are applicable to us. |
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Effect of climate change, carbon neutral or energy efficiency legislation or regulations on costs and market opportunities. |
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Operational interruptions to our gas distribution and transmission activities. |
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Inability to complete necessary or desirable pipeline expansion or infrastructure development projects. |
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Elevated levels of capital expenditures. |
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Availability and cost of capital. |
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Federal and state fiscal, tax and monetary policies. |
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Ability to generate sufficient cash flows to meet all our cash needs. |
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Ability to satisfy all of our outstanding debt obligations. |
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Ability of counterparties to meet their obligations to us. |
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Costs of providing pension benefits. |
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Earnings from the joint venture businesses in which we invest. |
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Ability to attract and retain professional and technical employees. |
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Risk of cyber-attack, acts of cyber-terrorism or failure of technology systems. |
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Ability to obtain and maintain sufficient insurance. |
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Change in number of outstanding shares. |
These factors are not necessarily all of the
important factors that could cause actual results to differ materially from those expressed in our forward-looking statements. Other factors could also have material adverse effects on our future results. These risks are described in greater detail
in Part 1, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended October 31, 2013, and Part II, Item 1A, Risk Factors, in our Quarterly Reports on Form 10-Q for the periods ended January 31, 2014
and April 30, 2014. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Other than as required under securities laws, we undertake no obligation to update
publicly any forward-looking statement whether as a result of new information, subsequent events or changes in circumstances, expectations or otherwise.
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RISK FACTORS
Before you invest in our securities, you should carefully consider those risk factors included in our most recent annual report on
Form 10-K and our quarterly reports on Form 10-Q that are incorporated herein by reference and those that may be included in the applicable prospectus supplement, together with all of the other information included in this prospectus, any
prospectus supplement and the documents we incorporate by reference in evaluating an investment in our securities.
If any of the risks
discussed in the foregoing documents were actually to occur, our business, financial condition, results of operations or cash flow could be materially adversely affected. In that case, our ability to pay dividends to our shareholders or pay interest
on, or the principal of, any debt securities, may be reduced, the trading price of our securities could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem
immaterial may also impair our business operations, financial results and the value of our securities.
ABOUT
PIEDMONT
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, including customers served by municipalities who are our wholesale customers. We are invested in joint venture,
energy-related businesses, including unregulated retail natural gas marketing, regulated interstate natural gas transportation and storage and regulated intrastate natural gas transportation businesses.
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.”
For further discussion
of the material elements of our business, please refer to our Annual Report on Form 10-K for the year ended October 31, 2013 and any subsequent reports we file with the SEC, including those incorporated by reference in this prospectus.
USE OF PROCEEDS
Unless we inform you otherwise in an applicable prospectus supplement, Piedmont will use the net proceeds from the sale of the offered
securities to finance capital expenditures, to repay outstanding short-term, unsecured notes under our commercial paper program, refinance other indebtedness, to repurchase our common stock, to pay dividends and for general corporate purposes.
We may temporarily invest any net proceeds that are not immediately applied to the above purposes in U.S. government or agency obligations,
commercial paper, money market funds, taxable and tax-exempt notes and bonds, variable-rate demand obligations, bank certificates of deposit or repurchase agreements collateralized by U.S. government or agency obligations. We may also deposit net
proceeds with banks.
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RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges in each of the periods shown is as follows:
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Six months ended April 30, |
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8.60x |
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4.82x |
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5.19x |
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4.39x |
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4.61x |
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4.78x |
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The natural gas business is seasonal in nature. The ratio of earnings to fixed charges for the six months
ended April 30, 2014 does not necessarily reflect the ratio to be expected for the full fiscal year. For purposes of computing the ratios of earnings to fixed charges: (1) earnings consist of income before deducting net provisions for
income taxes and fixed charges; and (2) fixed charges consist of interest on debt, amortization of debt discount, premium and expense, and the estimated interest component of lease payments and rentals.
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth general terms and provisions of the debt securities that we may offer with this prospectus. We will
provide additional or different terms of the debt securities in the applicable prospectus supplement.
The debt securities will be
unsecured obligations of Piedmont and will either be senior or subordinated debt. We will issue senior debt securities under a senior indenture, dated as of April 1, 1993, as supplemented to the date hereof, between Piedmont and The Bank of New
York Mellon Trust Company, N.A., as successor trustee to Citibank, N.A., and as amended by a Second Supplemental Indenture, dated as of June 15, 2003, between Piedmont and The Bank of New York Mellon Trust Company, N.A., a Third Supplemental
Indenture, dated as of June 20, 2006, between Piedmont and The Bank of New York Mellon Trust Company, N.A., and a Fourth Supplemental Indenture, dated as of May 6, 2011, between Piedmont and The Bank of New York Mellon Trust Company, N.A.
(the “Senior Indenture”). We will issue subordinated debt securities, which may include junior subordinated debt securities, under a subordinated indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee (the
“Subordinated Indenture”). The Senior Indenture and the Subordinated Indenture are sometimes referred to in this prospectus individually as an “Indenture” and collectively as the “Indentures.” References to the
“Trustee” means The Bank of New York Mellon Trust Company, N.A., as successor trustee to Citibank, N.A., or any other successor trustee under the Indentures. Unless otherwise specified in this prospectus, references to the “Debt
Securities” means the senior debt securities and subordinated debt securities issued under the Indentures, and the descriptions of Debt Securities describe both the senior Debt Securities and the subordinated Debt Securities unless otherwise
specified in this prospectus or any prospectus supplement.
Because this section is a summary of some of the terms of the Indenture, it
does not describe every aspect of the Debt Securities. You should refer to the applicable Indenture for a complete description of its provisions and the definitions of terms used in it, because the Indenture, and not this description, will define
your rights as a holder of Debt Securities. Whenever we refer to particular sections or defined terms of the Indentures in this prospectus or in any applicable supplement, we are incorporating by reference those sections or defined terms in this
prospectus or the applicable prospectus supplement.
The Senior Indenture and the form of Subordinated Indenture are exhibits to the
registration statement. See “Where You Can Find More Information” for information on how to obtain a copy of the Indentures and any supplements.
General Terms of Our Debt Securities
The
Debt Securities may be issued from time to time in one or more series. The Indentures do not limit the aggregate principal amount of Debt Securities that we may issue under either Indenture at any time or from time to time in one or more series. As
of April 30, 2014, we had approximately $1,175 million of notes outstanding.
The particular terms of each issue of Debt Securities,
as well as any modifications or additions to the general terms of the Indenture applicable to the issue of Debt Securities, will be described in the applicable prospectus supplement. You should read the applicable prospectus supplement for some or
all of the following terms of the series of Debt Securities offered by such supplement, as applicable:
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the title of the offered Debt Securities; |
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any limit on the aggregate principal amount of the offered Debt Securities; |
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the person to whom any interest on the offered Debt Securities will be payable, if other than the person in whose name that offered Debt Security is registered at the close of business on the record date for such
interest and the relevant record dates for the payment of interest; |
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the date or dates on which the principal of the offered Debt Securities is payable; |
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the rate or rates at which the offered Debt Securities will bear interest, if any, or the formula that will be used to determine such rate or rates, the date or dates from which any such interest will accrue and the
date or dates for any interest payable and the record dates for interest payable; |
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the place or places where the principal, premium (if any) and interest on the offered Debt Securities will be payable and the method of such payment; |
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the period or periods within which the price or prices at which and the terms and conditions upon which the offered Debt Securities may be redeemed, in whole or in part, at our option; |
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our obligations, if any, to purchase or redeem the offered Debt Securities under any sinking fund or analogous provision or at the option of holders of such securities and the period or periods within which, the price
or prices at which and the terms and conditions upon which the offered Debt Securities will be redeemed or purchased, in whole or in part, pursuant to such obligation; |
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the denominations in which the offered Debt Securities will be issuable, if other than denominations of $1,000 and any integral multiple thereof; |
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if the amount of payments of principal, premium (if any) or interest on the offered Debt Securities may be determined with reference to an index, the manner in which such amounts shall be determined; |
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whether the offered Debt Securities will be issuable in whole or in part in the form of one or more global securities and, if so, the securities depository or depositories for such global security or securities and the
circumstances under which any such global security or securities may be registered for transfer or exchange, or authenticated and delivered, in the name of a person other than such depository or its nominee, other than as set forth in the Indenture;
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any provisions for conversion into or exchange of the Debt Securities for shares of capital stock or other securities of Piedmont or any other entity, including the terms of any mandatory conversion; |
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if other than the principal amount thereof, the portion of the principal amount of the offered Debt Securities which shall be payable upon declaration of acceleration of the maturity thereof; |
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any modification, amendment or addition to our covenants; |
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whether the offered Debt Securities will be subject to defeasance or covenant defeasance or other means of satisfaction and discharge; |
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any additional events of default; and |
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any other terms or provisions of the offered Debt Securities not inconsistent with the provisions of the applicable Indenture. |
We may issue Debt Securities with terms different from those of Debt Securities already issued. There is no requirement that we issue Debt
Securities in the future under either Indenture, and we may use other indentures or documentation, containing different provisions, in connection with future issues of other Debt Securities.
Unless the applicable prospectus supplement provides differently, we will issue the Debt Securities in fully registered form without coupons
and in denominations of $1,000 or any integral multiple of $1,000. Unless the applicable prospectus supplement provides differently, the Trustee will register the transfer of any Debt Securities at its offices. There will be no service charge for
any registration of transfer or exchange of the Debt Securities, although we may require that purchasers of the Debt Securities pay any tax or other governmental charge associated with the registration.
We may issue Debt Securities as original issue discount securities, to be sold at a substantial discount below their principal amount. The
applicable prospectus supplement will describe any special federal income tax and other considerations applicable to such securities.
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Global Securities
We may issue the Debt Securities of a series as one or more fully registered global securities. We will deposit the global securities with, or
on behalf of, a depositary identified in the applicable prospectus supplement relating to the series. We will register the global securities in the name of the depositary or its nominee. In such case, one or more global securities will be issued in
a denomination or aggregate denominations equal to the aggregate principal amount of outstanding Debt Securities of the series represented by the global security or securities. Until any global security is exchanged in whole or in part for Debt
Securities in definitive certificated form, the depositary or its nominee may not transfer the global certificate except as a whole to each other, another nominee or to their successors and except as described in the applicable prospectus
supplement.
The applicable prospectus supplement will describe the specific terms of the depositary arrangement with respect to a series
of Debt Securities that a global security will represent.
Exchange Registration and Transfer
We will not be required to exchange or register a transfer of (i) any series of Debt Securities for a period of 15 days next preceding the
giving of the notice of any redemption of such series or (ii) any such series selected, called or being called for redemption except, in the case of any such series to be redeemed in part, that portion not being redeemed.
Redemption
Any terms for the optional or
mandatory redemption of the Debt Securities will be set forth in the applicable prospectus supplement. Except as shall otherwise be provided with respect to the Debt Securities redeemable at the option of the holder, Debt Securities will be
redeemable only upon notice, given in accordance with the applicable Indenture, not less than 30 nor more than 60 days prior to the date fixed for redemption, except as otherwise set forth in the applicable prospectus supplement, and, if less than
all of a series of Debt Securities are to be redeemed, the Trustee shall select the particular Debt Securities to be redeemed in such manner as it deems fair and appropriate; provided, however, that global Debt Securities that are to be partially
redeemed shall be selected in accordance with the procedures of the relevant depositary. The Indentures limit our ability to redeem Debt Securities if an event of default has occurred and is continuing.
Covenants
Under the Senior Indenture, we
have agreed to three principal restrictions on our activities for the benefit of holders of the senior Debt Securities. The restrictive covenants summarized below will apply to a series of senior Debt Securities (unless waived or amended) as long as
any of those senior Debt Securities are outstanding or unless the prospectus supplement for the series states otherwise.
The covenants
contained in the Indentures and the Debt Securities would not necessarily afford holders protection in the event of a highly leveraged or other transaction involving us that may adversely affect holders. The existing protective covenants applicable
to the Debt Securities would continue to apply to us in the event of a leveraged buyout initiated or supported by us, our management or any of our affiliates or their management, but may not prevent such a transaction from taking place.
Property. To the extent necessary for our business to be properly conducted, in our judgment, we will cause (or, with respect to
property owned in common with others, make reasonable effort to cause) all of our properties used or useful in the conduct of our business to be maintained and kept in good condition, repair and working order. We will also cause (or, with respect to
property owned in common with others, make reasonable effort to cause) all necessary repairs, renewals, replacements, betterments and improvements to be made to such properties. This covenant does not prevent us from discontinuing, or causing the
discontinuance of, the operation and maintenance of any of our properties if such discontinuance is, in our judgment, desirable in the conduct of our business.
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Limitation on Liens. We will not create, assume or suffer to exist, and will not permit,
cause or suffer any subsidiary to create, assume or suffer to exist, except in our favor, any mortgage, pledge or other lien or encumbrance of or upon any of our or its properties or assets (including stock and other securities of subsidiaries)
without making effective provisions to secure equally and ratably the senior Debt Securities then outstanding and other indebtedness entitled to be so secured, except that we or a subsidiary, without so securing the senior Debt Securities, may
create, assume or suffer to exist:
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certain purchase money and existing liens in connection with property acquisitions and the extension, renewal or refunding of the same; |
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pledges of current assets, in the ordinary course of business, to secure current liabilities; |
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liens on property to secure obligations to pay all or a part of the purchase price of such property only out of or measured by oil or gas production or the proceeds thereof, or liens upon production from oil and gas
property or the proceeds of such production, to secure obligations to pay all or part of the expenses of exploration, drilling or development of such property only out of such production or proceeds; |
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mechanics’ or materialman’s liens, good faith deposits in connection with tenders, leases of real estate, bids or contracts (other than contracts for the payments of money), deposits to secure public or
statutory obligations, deposits to secure, or in lieu of, surety, stay or appeal bonds and deposits as security for payment of taxes or assessments or similar charges and liens or security interests given in connection with bid or completion bonds;
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liens arising by reason of deposits with, or the giving of security to, a governmental agency as a condition to the transaction of business or the exercise of a privilege or license, or to enable us or a subsidiary to
maintain self-insurance or participate in any funds established to cover any insurance risks in connection with workmen’s compensation, unemployment insurance, old age pension or other social security, or to share in the privileges or benefits
required for companies participating in such arrangements; |
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pledges or assignments of accounts receivable, including customers’ installment paper, to banks or others (including to or by any subsidiary which is principally engaged in the business of financing our business
and the business of our subsidiaries) made in the ordinary course of business; |
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liens of taxes or assessments that are (1) for the current year, (2) not due or (3) already due but are being contested in good faith and against which an adequate reserve has been established;
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judgments or liens the finality of which is being contested and execution on which is stayed; |
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assessments or similar encumbrances the existence of which does not impair the use of the property subject thereto for the purposes for which it was acquired; |
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certain landlords’ liens so long as the rent secured thereby is not in default; |
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liens on the assets of any limited liability company organized under a limited liability company act of any state in which a limited liability company is permitted to be treated as a partnership or disregarded for
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liens not otherwise permitted if, at the time, and after giving effect thereto, the creation or assumption of any lien, the aggregate amount of all of our consolidated indebtedness secured by such liens does not exceed
10% of our Consolidated Total Assets. “Consolidated Total Assets” means, as of any determination date, the total assets of us and our subsidiaries as set forth or reflected on our most recent consolidated balance sheet, prepared in
accordance with generally accepted accounting principles in the United States. |
For purposes of this covenant, a
“subsidiary” is any corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary
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voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled, by us directly or indirectly through one or more intermediaries.
Corporate Existence. Subject to the provisions described under the heading “Consolidation, Merger or Sale,” we will do or
cause to be done all things necessary to preserve and keep in full force and effect our and our subsidiaries’ corporate existence, rights (charter and statutory) and franchises. We will not be required to preserve, or cause any subsidiary to
preserve, any such right or franchise or to keep in full force and effect the corporate existence of any subsidiary if, in our judgment, preservation is no longer desirable in the conduct of our business and the loss thereof is not disadvantageous
in any material respect to the holders of any series of senior Debt Securities.
Consolidation, Merger or Sale
We may not merge into or consolidate with any other corporation, or sell or convey our properties and assets substantially as an entirety to
any person, unless:
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either we shall be the continuing corporation, or the successor corporation (if other than us) shall be a corporation organized and existing under the laws of the United States or a state thereof or the District of
Columbia and such corporation shall expressly assume, by supplemental indenture, the due and punctual payment of the principal, premium (if any) and interest on all the Debt Securities under the applicable Indenture and the due and punctual
performance and observance of all of our covenants and conditions under the applicable Indenture; |
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we or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition; and
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we satisfy other conditions described in the applicable Indenture. |
Because there is no
definitive standard under the laws of the State of New York that clearly defines the threshold for the sale or conveyance of substantially all of our assets, it may be difficult for the holders of our Debt Securities to: (1) determine whether
our covenant (relating to merger, consolidation and sale of assets) has been breached, (2) declare an event of default and (3) exercise their acceleration rights. In addition, there can be a difference in understanding between us and the
holders of our Debt Securities regarding whether a specific asset sale or sales triggers a sale of “substantially all” of our assets. Lastly, in the event that the holders of our Debt Securities elect to exercise their rights under either
Indenture and we contest such election, there could be no assurance as to how a court interpreting New York law would interpret the phrase “substantially all.”
Payment and Paying Agent
The principal,
premium (if any) and interest (if any) on Debt Securities not represented by a global security will be payable in immediately available funds at the office or agency of the paying agent or paying agents as we may designate from time to time,
provided that, at our option, interest may be paid by check mailed to the holders entitled thereto at their last addresses as they appear in the Debt Security Register. The Trustee is designated as our sole paying agent and its principal corporate
trust office in the Borough of Manhattan, the City of New York, is the office where the Debt Securities may be presented for payment, for the registration of transfer and for exchange and where notices and demands to or upon us in respect of the
Debt Securities or of the Indentures may be served. Unless otherwise indicated in the applicable prospectus supplement, interest payments shall be made to the person in whose name any debt security is registered at the close of business on the
record date with respect to an interest payment date. All moneys paid by us to a paying agent for the payment of principal, premium (if any) or interest on any Debt Security of any series which remain unclaimed at the end of two years after such
principal, premium or interest shall have become due and payable will be repaid to us upon request, and the holder of such Debt Security will thereafter look only to us for payment thereof.
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Defaults and Rights of Acceleration
The following are events of default under the Indentures with respect to any series of Debt Securities, unless it is either inapplicable to a
particular series or is specifically deleted or modified in any supplemental indenture or board resolution under which such series is issued:
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(a) |
default in the payment of the principal or premium (if any) on any of the Debt Securities of such series when due and payable; |
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(b) |
default in the payment of any installment of interest upon any of the Debt Securities of such series when due and payable, and continuance of such default for a period of 30 days; |
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(c) |
default in the payment of any sinking or purchase fund payment or analogous obligation with respect to such series when due and payable; |
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(d) |
failure by us to observe or perform any other of our covenants or agreements in the Debt Securities or the applicable Indenture for a period of 90 days after written notice of such failure, requiring us to remedy such
failure, has been given to us by the Trustee or to us and the Trustee by the holders of at least 25% in principal amount of the outstanding Debt Securities of that series; |
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(e) |
a default under any bond, debenture, note or other evidence of indebtedness for money borrowed by us (including a default with respect to Debt Securities of any series other than that series) or under any mortgage,
indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by us (including the Indenture) whether such indebtedness now exists or shall hereafter be created, which
default shall constitute a failure to pay in excess of $50,000,000 principal amount of such indebtedness when due and payable after the expiration of any applicable grace period with respect thereto or shall have resulted in an excess of $50,000,000
of principal amount of such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within 10 days after notice has been given to us by the Trustee or to us and the Trustee by the holders of at least 25% in principal amount of the outstanding Debt Securities of that series specifying such default and
requiring us to cause such indebtedness to be discharged or such acceleration to be rescinded or annulled and stating that such notice is a “Notice of Default” under the Indenture; or |
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(f) |
certain events in bankruptcy, insolvency or other similar occurrences as more fully described in the Indentures. |
The applicable prospectus supplement will describe any additional events of default that may be added to the Indentures for a particular
series of Debt Securities. No event of default with respect to a particular series of Debt Securities issued under either Indenture necessarily constitutes an event of default with respect to any other series of Debt Securities issued under that
Indenture.
Each of the Indentures provides that if an event of default described in clause (a), (b), (c), (d) or (e) has
occurred and is continuing, and in each and every such case, unless the principal amount of all the Debt Securities of such series has already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Debt Securities of each series affected thereby then outstanding (voting as one class), by notice to us (and to the Trustee if given by securityholders) may declare the principal amount of all the Debt Securities (or, with respect to
original issue discount Debt Securities, such lesser amount as may be specified in the terms of such Debt Securities) affected thereby to be due and payable immediately, or, if an event of default described in clause (f) has occurred and is
continuing, and unless the principal of all the Debt Securities of such series has already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of all the Debt Securities then outstanding
(voting as one class), by notice to us (and to the Trustee if given by securityholders), may declare the principal of all the Debt Securities (or, with respect to original issue discount Debt Securities, such lesser amount as may be specified in the
terms of such
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Debt Securities) to be due and payable immediately. The holders of a majority in principal amount of the outstanding Debt Securities of all series affected thereby (voting as one class) may waive
our compliance of covenants or conditions provided for in the applicable Indenture. In some circumstances, the holders of a majority in principal amount of the outstanding Debt Securities of each series may, on behalf of the holders of all the Debt
Securities of such series, waive any past default or rescind and annul a declaration of acceleration and its consequences under the applicable Indenture, except a default (1) in the payment of principal, premium (if any) or interest on any Debt
Security of such series or (2) in respect of a covenant or provision of the Indentures which cannot be modified or amended without the consent of the holder of each outstanding Debt Security affected.
Each of the Indentures provides that the holders of a majority in principal amount of the outstanding Debt Securities of each series may
direct the time, method and place of conducting proceedings for remedies available to the Trustee or exercising any trust or power conferred on the Trustee in respect of that series, except for such directions that are in conflict with statute, rule
of law or the Indenture, any other action by Trustee deemed proper by the Trustee not inconsistent with such direction and any action the Trustee determines might involve it in personal liability or would be unjustly prejudicial to the holders of
Debt Securities of such series not consenting to such direction. Otherwise, a holder of Debt Securities of a series may not pursue any remedy with respect to the Indentures or any Debt Securities of that series unless:
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the holder of Debt Securities of that series gives the Trustee written notice of a continuing event of default; |
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the holders of at least 25% in aggregate principal amount of the Debt Securities of that series then outstanding make a written request to the Trustee to pursue the remedy; |
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the holder or holders of Debt Securities of that series offer the Trustee reasonable indemnity against any costs, liability or expense incurred in connection therewith; |
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the Trustee does not comply with the request within 60 days after receipt of the notice, request and the offer of indemnity; and |
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during such 60-day period, the holders of a majority in aggregate principal amount of the Debt Securities of that series then outstanding do not give the Trustee a direction that is inconsistent with the request.
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However, these limitations do not apply to the right of any holder of any Debt Securities to receive payment of the
principal of, premium, if any, and interest on the Debt Securities of a series or to bring suit for the enforcement of any such payment on or after the due date expressed in the Debt Securities, which right shall not be impaired or affected without
the consent of the holder.
We will be required to furnish to the Trustee annually a statement as to our performance and observance of and
compliance with certain of our obligations under each Indenture and written notice of any default or event of default within five (5) days after we become aware of any such default or event of default.
Under each Indenture, the Trustee must give to the holders of each series of Debt Securities notice of all uncured defaults with respect to
such series within 90 days after the occurrence of such a default known to the Trustee; provided that, except in the case of default in the payment of principal or interest on any of the Debt Securities, or in the payment of any sinking or purchase
fund installment, the Trustee shall be protected in withholding such notice if the trustee committee of directors and/or responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the
holders of the Debt Securities of such series. No notice of default with respect to the payment of any sinking or purchase fund will be given until at least 30 days after the occurrence thereof.
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Modification of the Indentures
Each Indenture contains provisions permitting us and the Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of all series of the Debt Securities to be affected at the time outstanding under the applicable Indenture (voting as one class), to enter into indentures supplemental to or modifying the applicable Indenture or the rights of the
holders of such Debt Securities, except that no such modification shall (a) extend the fixed maturity, reduce the principal amount or premium (if any) or reduce the rate or extend the time of payment of interest on any Debt Security without the
consent of the holder of each Debt Security so affected; or (b) reduce the percentage in principal amount of the outstanding Debt Securities, the consent of whose holders is required for any such modification, without the consent of the holders
of all Debt Securities then outstanding.
Without the consent of any holders of Debt Securities, we and the Trustee may enter into one or
more supplemental indentures (which shall conform to the effective provisions of the Trust Indenture Act) for any of the following purposes:
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to evidence the succession of another corporation to us, or successive successions and the assumption by the successor corporation of our covenants, agreements and obligations; |
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to add to our covenants further covenants, restrictions, conditions or provisions for the protection of the holders of the Debt Securities, and to make the occurrence, or the occurrence and continuance, of a default in
any of such additions, an event of default permitting the enforcement of all remedies provided in the applicable Indenture, with such period of grace, if any, and subject to such conditions as such supplemental indenture may provide;
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to provide for the issuance under the applicable Indenture of Debt Securities, whether or not then outstanding, in coupon form (including Debt Securities registrable as to principal only) and to provide for
exchangeability of such Debt Securities with Debt Securities issued under such Indenture in fully registered form; |
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to modify, eliminate or add to the provisions of the applicable Indenture to such extent as shall be necessary to effect the qualification of such Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to such Indenture such other provisions as may be expressly permitted by the Trust Indenture Act, excluding, however, the provisions referred to in Section 316(a)(2) of the Trust Indenture Act or any
corresponding provision in any similar federal statute hereafter enacted; |
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to convey, transfer, assign, mortgage or pledge any property to or with the Trustee; |
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to evidence and provide for the acceptance and appointment hereunder of a successor trustee with respect to the Debt Securities of one or more series and to add or change any provisions of the applicable Indenture as
shall be necessary to provide for or facilitate the administration of the trusts by more than one trustee; |
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to change or eliminate any provision of the applicable Indenture or to add any new provision to the Indenture; provided that if such change, elimination or addition will adversely affect the interests of the holders of
the Debt Securities of any series in any material respect, such change, elimination or addition will become effective with respect to such series only when there is no Debt Security of such series remaining outstanding under the Indenture;
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to provide collateral security for the Debt Securities; |
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to change any place where (1) the principal, premium (if any) and interest on Debt Securities of any series shall be payable; (2) any Debt Securities of any series may be surrendered for registration of
transfer; (3) Debt Securities of any series may be surrendered for exchange; and (4) notices and demands to or upon us in respect of the Debt Securities of any series and the applicable Indenture may be served; and |
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to establish the form or terms of Debt Securities of any series as permitted by the Indenture. |
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The Trustee is authorized by the Indentures to join with us in the execution of any such
supplemental indenture, to make any further appropriate agreements and stipulations which may be contained in any such supplemental indenture and to accept the conveyance, transfer, assignment, mortgage or pledge of any property under such
supplemental indenture. The Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects the Trustee’s own rights, duties or immunities under the Indentures or otherwise. No supplemental indenture shall
be effective as against the Trustee unless and until it has been duly executed and delivered by the Trustee.
Senior Debt Securities
The senior Debt Securities will be unsecured senior obligations and will rank equally with all other senior unsecured and unsubordinated debt.
The senior Debt Securities will, however, be subordinated in right of payment to all of our secured indebtedness to the extent of the value of the assets securing that indebtedness. Except as provided in the Senior Indenture or specified in any
authorizing resolution or supplemental indenture relating to a series of senior Debt Securities to be issued, no Senior Indenture will limit the amount of additional indebtedness that may rank equally with the senior Debt Securities or the amount of
indebtedness, secured or otherwise, that may be incurred or preferred stock that may be issued by any of our subsidiaries. Any such limitations will also be described in the applicable prospectus supplement.
Subordination Provisions for Subordinated Debt Securities
Any subordinated Debt Securities issued under the Subordinated Indenture will be subordinate and subject in right of payment to the prior
payment in full of all of our Senior Indebtedness. The following provisions will apply to the subordinated Debt Securities unless otherwise specified in the applicable prospectus supplement:
Subject to any collateral, security, assurance or guarantee provided for the benefit of any series of subordinated Debt Securities, if any, the
payment of principal, any premium and interest on the subordinated Debt Securities will be subordinated in right of payment to the prior payment in full of all of our Senior Indebtedness. This means that in certain circumstances where we may not be
making payments on all of our debt obligations as they become due, the holders of all of our Senior Indebtedness will be entitled to receive payment in full of all amounts that are due or will become due on the Senior Indebtedness before the holders
of subordinated Debt Securities will be entitled to receive any payment or distribution (other than in the form of subordinated securities) on the subordinated Debt Securities. These circumstances include the following circumstances:
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we make a payment or distribute assets to creditors upon any liquidation, dissolution, winding up or reorganization of our company, or as part of an assignment or marshalling of our assets for the benefit of our
creditors; |
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we file for bankruptcy or certain other events in bankruptcy, insolvency or similar proceedings occur; and |
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the maturity of the subordinated debt securities is accelerated. For example, the entire principal amount of a series of subordinated debt securities may be declared to be due and immediately payable or may be
automatically accelerated due to an event of default as described under “—Default and Rights of Acceleration.” |
In addition, we are generally not permitted to make payments of principal, any premium or interest on the subordinated Debt Securities if we
default on our obligation to make payments on our Senior Indebtedness and do not cure such default. We are also prohibited from making payments on subordinated Debt Securities if an event of default (other than a payment default) that permits the
holders of Senior Indebtedness to accelerate the maturity of the Senior Indebtedness occurs and we and the Trustee have received a notice of such event of default. However, unless the Senior Indebtedness has been accelerated because of that event of
default, this payment blockage cannot last more than the number of days specified in the Subordinated Indenture or in any supplemental indenture under which subordinated Debt Securities are issued.
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These subordination provisions mean that if we are insolvent a holder of Senior Indebtedness is
likely to ultimately receive out of our assets more than a holder of the same amount of our subordinated Debt Securities, and a creditor of ours that is owed a specific amount but who owns neither our Senior Indebtedness nor our subordinated Debt
Securities may ultimately receive less than a holder of the same amount of Senior Indebtedness and more than a holder of subordinated Debt Securities.
The Subordinated Indenture does not limit the amount of Senior Indebtedness we are permitted to have and we may in the future incur additional
senior indebtedness.
“Senior Indebtedness” is defined in the Subordinated Indenture to mean, with respect to us,
(i) the principal, premium, if any, and interest (including interest, whether or not allowable, accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy law) in respect of (A) our indebtedness and obligations related thereto and (B) indebtedness evidenced by securities, debentures, notes, bonds or other similar
instruments issued by us;
(ii) all our capital lease, purchase money and similar obligations;
(iii) all our obligations issued or assumed as the deferred purchase price of property, all our conditional sale obligations and all our
obligations under any title retention agreement;
(iv) all our obligations for the reimbursement of any letter of credit, any
banker’s acceptance, any security purchase facility, any repurchase agreement or similar arrangement, any commercial paper, any interest rate swap, any other hedging arrangement or any obligation under options or any similar credit or other
transaction;
(v) all obligations for indemnification, contributions, earnouts, adjustments of purchase price or similar obligations;
(vi) all obligations in respect of workers compensation claims, self-insurance, indemnities, bid performance, warranty release, appeal, surety
and similar bonds;
(vii) all obligations of the type referred to in clauses (i) through (vi) above of other Persons for the
payment of which we are responsible or liable as obligor, guarantor or otherwise;
(viii) all obligations of the type referred to in
clauses (i) through (vii) above of other Persons secured by any lien on any property or asset of ours (whether or not such obligation is assumed by us); and
(ix) all renewals, extensions, modifications and refunding of obligations of the type referred to in clauses (i) through
(viii) above;
whether incurred on or prior to the date of the Subordinated Indenture or thereafter incurred. Notwithstanding the foregoing,
“Senior Indebtedness” shall not include (1) any indebtedness of the Company owed to any of its subsidiaries, (2) Debt Securities issued pursuant to the Subordinated Indenture and guarantees in respect of such Debt Securities,
(3) our trade accounts payable arising in the ordinary course of business (such trade accounts payable being pari passu in right of payment to debt securities issued pursuant to the Subordinated Indenture) or (4) obligations with respect
to which in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such obligations are pari passu or junior in right of payment to Debt Securities issued pursuant to the Subordinated
Indenture. Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness.
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If this prospectus is being delivered in connection with a series of subordinated securities, the
applicable prospectus supplement or the information incorporated by reference will set forth the approximate amount of Senior Indebtedness outstanding as of a recent date.
Collection of Indebtedness
The
Indentures also provide that if we fail to make payment of principal, premium (if any), interest or any mandatory sinking fund requirements on the Debt Securities (and in the case of payment of interest or any mandatory sinking fund payment, such
failure to pay shall have continued for 30 days) we will, upon demand of the Trustee, pay to it, for the benefit of the holders of the Debt Securities, the whole amount then due and payable on the Debt Securities for principal or premium (if any)
and interest, with interest on the overdue principal and, to the extent payment of interest shall be legally enforceable, upon overdue installments of interest at the rate borne by the Debt Securities and such further amounts to cover the costs and
expenses of collection. The Indentures further provide that if we fail to pay such amount forthwith upon such demand, the Trustee may, among other things, institute a judicial proceeding for the collection thereof.
Satisfaction and Discharge
We may
satisfy and discharge our obligations under either Indenture if, at any time, (1) we have delivered to the Trustee for cancellation all Debt Securities of any series authenticated or (2) all Debt Securities of such series not previously
delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and we deposit or cause to be deposited with the Trustee as trust funds (a) an amount of money which will be sufficient or (b) government obligations, the principal and interest on which when due, without
any regard to reinvestment thereof, will provide monies which will be sufficient or (c) a combination of (a) and (b) which will be sufficient, to pay at maturity or upon redemption all Debt Securities of such series not theretofore
delivered to the Trustee for cancellation, including principal, premium (if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be.
If we satisfy and discharge our obligations under either Indenture and we pay or cause to be paid all other sums payable by us under the
applicable Indenture with respect to such series, then the applicable Indenture will cease to be of further effect with respect to the Debt Securities of such series, and the Trustee, on demand of and at our cost and expense, shall execute
instruments acknowledging satisfaction of and discharging the applicable Indenture with respect to the Debt Securities of such series. We agree to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the
Trustee in connection with the applicable Indenture or the Debt Securities of such series.
In addition, we will be discharged from any
and all obligations in respect of the Debt Securities of any series (except in each case of certain obligations) if (i) we deposit with the Trustee, in trust, money, government obligations, or a combination thereof, in an amount sufficient to
pay all the principal (including any mandatory sinking fund payments) of, and interest on, Debt Securities of such series on the dates such payments are due in accordance with the terms of such Debt Securities, (ii) we deliver to the Trustee an
opinion of counsel to the effect that the deposit and related discharge would not cause the holders of the Debt Securities of such series to recognize income, gain or loss for federal income tax purposes, or a copy of a ruling or other formal
statement or action to such effect received from or published by the United States Internal Revenue Service and (iii) satisfy certain other requirements under the applicable Indenture.
No Personal Liability of Incorporators, Stockholders, Officers, Directors or Employees
No recourse under or upon any of our obligations, covenants or agreements in the Indentures or a supplemental indenture or in any Debt
Securities issued under the Indentures or because of the creation of any indebtedness represented thereby, shall be had against any of our incorporators or any of our (or any successor
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corporation’s) past, present or future stockholders, officers or directors. Each holder, by accepting notes issued under the Indenture, waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Debt Securities. This waiver may not be effective to waive liabilities under the federal securities laws.
Reports to Holders and SEC Reports
We
will file with the Trustee or post to the SEC’s Electronic Data-Gathering, Analysis and Retrieval system (“EDGAR”) the information, documents and other reports required to be filed with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act within 15 days after the information, documents or reports are required to be filed with the SEC. In addition, we will also file with the Trustee (or post to EDGAR) and file with the SEC such additional information, documents and
reports with respect to our compliance with the conditions and covenants provided for in the Indentures as may be required from time to time by the rules and regulations prescribed by the SEC. We will also transmit to all holders of each series of
Debt Securities such summaries of any information, documents and reports required to be filed by us with respect to each such series pursuant to the Indentures as may be required from time to time by the rules and regulations prescribed by the SEC
within 30 days after filing thereof with the Trustee or posting thereof to EDGAR.
Notices
Any notice or demand required or permitted to be given or served by the Trustee or by the holders of Debt Securities to or on us may be given
or served by postage prepaid first class mail or overnight courier addressed (until another address is filed by us with the Trustee) as follows: Piedmont Natural Gas Company, Inc., 4720 Piedmont Row Drive, Charlotte, North Carolina 28210, Attention:
Corporate Secretary.
Any notice, direction, request or demand by any holder of the Debt Securities or by the Company to or upon the
Trustee shall be deemed to have been sufficiently given or made, if given or made in writing as follows: 10161 Centurion Parkway, Jacksonville, Florida 32256, Attention: Corporate Trust Administration.
Notices to holders of certificated Debt Securities will be mailed to them at their registered addresses. Any notice or communication mailed to
a registered holder shall be mailed to the holder at the holder’s address as it appears on the Debt Security register maintained by of the Debt Security registrar and shall be sufficiently given if so mailed within the time prescribed. Notices
to holders of book-entry Debt Securities will be given to the depositary in accordance with its applicable procedures.
Title
We, the Trustee and any of our agents may deem the person in whose name such Debt Security shall be registered upon our books (which, in the
case of Debt Securities represented by a global security, shall be the Depositary or its nominee) to be the absolute owner of such Debt Security (whether or not such Debt Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon), for the purpose of receiving payment and for all other purposes.
Governing Law
The Indentures are and the Debt Securities will be governed by, and construed in accordance with, the laws of the State of New York.
Concerning the Trustee
The Trustee will
be under no obligation to expend or risk its own funds or to incur any personal financial liability in the performance of its duties under the Indentures, or in the exercise of any of its rights or powers under the Indentures, if there are
reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
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The Bank of New York Mellon Trust Company, N.A. is the Trustee under the Indentures. We may from
time to time enter into commercial banking relationships with affiliates of the Trustee. Notice to the Trustee should be directed to:
The
Bank of New York Mellon Trust Company, N.A.
10161 Centurion Parkway
Jacksonville, Florida 32256
Attention: Corporate Trust Administration
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DESCRIPTION OF CAPITAL STOCK
General
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 June 3, 2014, 78,152,681 shares of common stock were issued and outstanding and none of our preferred stock was issued and outstanding.
The following description of our capital stock and provisions of our Restated Articles of Incorporation (the “Articles of
Incorporation”) and Bylaws, as amended and restated (the “Bylaws”), are only summaries and are qualified by reference to our Articles of Incorporation and Bylaws. We encourage you to review complete copies of our Articles of
Incorporation and Bylaws, which we have previously filed with the SEC.
Common Stock
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 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 and ending at the end
of the last fiscal quarter preceding the date of such payment, 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.”
The transfer agent and registrar for the common
stock is Wells Fargo Bank Shareowner Services, 110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100.
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Preferred Stock
Our board of directors is authorized to issue shares of preferred stock, in one or more series or classes, and to fix for each series or class
the designations, preferences, limitations and relative rights (including conversion rights) of shares within such class and to determine all variations between series, as permitted by North Carolina law and as are stated in the resolution or
resolutions adopted by the board providing for the issuance of shares of that series or class. In some cases, the issuance of preferred stock could delay a change in control of Piedmont and make it harder to remove incumbent management. Under
certain circumstances, preferred stock could also restrict dividend payments to holders of common stock. All preferred stock will be fully paid and non-assessable.
The terms of the preferred stock that we may offer will be established by or pursuant to a resolution of our board of directors and will be
issued under certificates of designations or through amendments to our Articles of Incorporation. If we use this prospectus to offer preferred stock, an accompanying prospectus supplement will describe the specific terms of the preferred stock. We
will also indicate in the prospectus supplement whether the general terms and provisions described in this prospectus apply to the preferred stock that we may offer.
The following terms of the preferred stock, as applicable, will be set forth in a prospectus supplement relating to the preferred stock:
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the title and stated value; |
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the number of shares we are offering; |
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the liquidation preference per share; |
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the dividend rate, period and payment date and method of calculation of dividends; |
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whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; |
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the procedures for any auction and remarketing, if any; |
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the provisions for a sinking fund, if any; |
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the provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase rights; |
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any listing of the preferred stock on any securities exchange or market; |
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preemptive rights, if any; |
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restrictions on transfer, sale or other assignment, if any; |
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whether interests in the preferred stock will be represented by depositary shares; |
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a discussion of any material or special United States federal income tax considerations applicable to the preferred stock; |
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the relative ranking and preferences of the preferred stock as to dividend or liquidation rights; |
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any limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend or liquidation rights; and |
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any other material specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock. |
The terms, if any, on which the preferred stock may be exchanged for or converted into shares of common stock or any other security and, if
applicable, the conversion or exchange price, or how it will be calculated, and the conversion or exchange period will be set forth in the applicable prospectus supplement.
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The preferred stock or any series of preferred stock may be represented, in whole or in part, by
one or more global certificates, which will have an aggregate liquidation preference equal to that of the preferred stock represented by the global certificate.
Each global certificate will:
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be registered in the name of a depositary or a nominee of the depositary identified in the prospectus supplement; |
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be deposited with such depositary or nominee or a custodian for the depositary; and |
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bear a legend regarding the restrictions on exchanges and registration of transfer and any other matters as may be provided for under the certificate of designations. |
Certain Anti-takeover Effects
Our
Articles of Incorporation and Bylaws contain certain provisions that could have the effect of delaying, deferring or preventing a change in control. These provisions include:
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.
Fixing and Changing Number of Directors. Our Articles of Incorporation and Bylaws authorize the board of directors to fix the number of
directors and provide that the number may be changed only by (a) the affirmative vote of 80% of the outstanding shares entitled to vote in the election of directors or (b) a majority of the entire board of directors.
Nominations 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.
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.
Fair Price Provisions. Our Articles of Incorporation require the
affirmative vote of a super majority of the outstanding shares of voting stock to approve certain transactions such as actions in connection with any “Business Combination.” A Business Combination is defined to include any merger,
consolidation, lease, sale or disposition of assets or certain other business transactions by us or our subsidiaries involving an “interested shareholder.” An interested shareholder is defined as any person who is or has announced an
intention to become the beneficial owner of 10% or more of our voting stock (and certain defined affiliates) or an affiliate or associate of an interested shareholder and that, together with all such other arrangements, has an aggregate fair market
value and/or involves aggregate commitments of $10,000,000 or more or more than 5% of our total assets or shareholders’ equity as reflected on our most recent fiscal year-end consolidated balance sheet. Our Articles of Incorporation require the
affirmative vote of not less than 66 2/3% of our voting stock, voting together as a single class, excluding any voting stock 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
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majority of our board of directors or (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.
Amendment to our Bylaws. Our Bylaws may be amended 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 at a meeting at which a quorum is present.
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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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE CONTRACT UNITS
We may issue stock purchase contracts for the purchase of our securities or securities of an entity unaffiliated or affiliated with us, a
basket of such securities or any combination of the above as specified in the applicable prospectus supplement. Each stock purchase contract will entitle the holder thereof to purchase, and obligate us to sell, on specified dates, such securities,
at a specified purchase price, all as set forth in the applicable prospectus supplement. The applicable prospectus supplement will also specify the methods by which the holders may purchase such securities, any acceleration, cancellation or
termination provisions or other provisions relating to the settlement of a stock purchase contract and, if applicable, the identity of any of our subsidiaries guaranteeing our obligations with respect to such stock purchase contracts. Stock purchase
contracts may require holders to satisfy their obligations thereunder when the stock purchase contracts are issued. Our obligation to settle such prepaid stock purchase contracts on the relevant settlement date may constitute indebtedness.
Accordingly, the prepaid stock purchase contracts will be issued under one of the Indentures. The stock purchase contracts may be issued separately or as part of a stock purchase contract unit that consists of (a) a stock purchase contract and
(b) senior or subordinated debt securities, preferred stock, U.S. Treasury securities or other debt obligations of third parties, that may be used to secure the holders’ obligations under a stock purchase contract. The stock purchase
contracts may require us to make periodic payments to the holders of the stock purchase contract units, and such payments may be unsecured or prefunded on some basis. The stock purchase contracts may require holders to secure their obligations in a
specified manner and, in certain circumstances, we may deliver newly issued prepaid stock purchase contracts upon release to a holder of any collateral securing such holder’s obligations under the original stock purchase contract.
The applicable prospectus supplement will describe the general terms of any stock purchase contracts or stock purchase contract units and, if
applicable, prepaid stock purchase contracts. The description in the prospectus supplement will not purport to be complete and will be qualified in its entirety by reference to (a) the stock purchase contracts, (b) the collateral
arrangements and depository arrangements, if applicable, relating to such stock purchase contracts or stock purchase contract units and (c) if applicable, the prepaid stock purchase contracts and the documents pursuant to which such prepaid
stock purchase contracts will be issued. Some of the material United States federal income tax considerations applicable to the stock purchase contracts and the stock purchase contract units will also be discussed in the applicable prospectus
supplement.
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DESCRIPTION OF DEPOSITARY SHARES
General
We may, at our option, elect to
offer fractional shares of preferred stock, rather than full shares of preferred stock. If we exercise this option, we will issue to the public receipts for depositary shares, and each of these depositary shares will represent a fraction (to be set
forth in the applicable prospectus supplement) of a share of a particular series of preferred stock.
The shares of any series of
preferred stock underlying the depositary shares will be deposited under a deposit agreement between us and a bank or trust company selected by us. The depositary will have its principal office in the United States and a combined capital of at least
$50,000,000. Subject to the terms of the deposit agreement, each owner of a depositary share will be entitled, in proportion, to the applicable fraction of a share of preferred stock underlying that depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share. Those rights (to be set forth in the applicable prospectus supplement) include any dividend, voting, redemption and liquidation rights.
The depositary shares will be evidenced by depositary receipts issued pursuant to the deposit agreement. Depositary receipts will be
distributed to those persons purchasing the fractional shares of preferred stock underlying the depositary shares, in accordance with the terms of the offering. Copies of the forms of deposit agreement and depositary receipt will be filed as
exhibits to the registration statement. The following summary of the deposit agreement, the depositary shares and the depositary receipts is not complete. You should refer to the forms of the deposit agreement and depositary receipts that will be
filed with the SEC in connection with the offering of the specific depositary shares.
Pending the preparation of definitive engraved
depositary receipts, the depositary may, upon our written order, issue temporary depositary receipts substantially identical to the definitive depositary receipts but not in definitive form. These temporary depositary receipts entitle their holders
to all the rights of definitive depositary receipts which are to be prepared without unreasonable delay. Temporary depositary receipts will then be exchangeable for definitive depositary receipts at our expense.
Dividends and Other Distributions
The
depositary will distribute all cash dividends or other cash distributions received with respect to the preferred stock to the record holders of depositary shares relating to the preferred stock in proportion to the number of depositary shares owned
by those holders.
If there is a distribution other than in cash, the depositary will distribute property received by it to the record
holders of depositary shares that are entitled to receive the distribution, unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary may, with our approval, sell the property and distribute
the net proceeds from the sale to the applicable holders.
Redemption of Depositary Shares
If a series of preferred stock represented by depositary shares is subject to redemption, the depositary shares will be redeemed from the
proceeds received by the depositary resulting from the redemption, in whole or in part, of that series of preferred stock held by the depositary. The redemption price per depositary share will be equal to the applicable redemption fraction of the
redemption price per share payable with respect to that series of the preferred stock. Whenever we redeem shares of preferred stock that are held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary
shares representing the shares of preferred stock so redeemed. If fewer than all the depositary shares are to be redeemed, the depositary shares to be redeemed will be selected by lot or pro rata as may be determined by the depositary.
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Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the preferred stock are entitled to vote, the depositary will mail the
information contained in such notice to the record holders of the depositary shares underlying the preferred stock. Each record holder of the depositary shares on the record date, which will be the same date as the record date for the preferred
stock, will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to the amount of the preferred stock represented by the holder’s depositary shares. The depositary will then try, as far as practicable, to
vote the number of shares of preferred stock underlying those depositary shares in accordance with such instructions. We will agree to take all actions which may be deemed necessary by the depositary to enable the depositary to do so. The depositary
will not vote the shares of preferred stock to the extent it does not receive specific instructions from the holders of depositary shares underlying the preferred stock.
Amendment and Termination of the Depositary Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may at any time be amended by
agreement between us and the depositary. However, any amendment which materially and adversely alters the rights of the holders of depositary shares will not be effective unless the amendment has been approved by the holders of at least a majority
of the depositary shares then outstanding. The deposit agreement may be terminated by us or by the depositary only if (a) all outstanding depositary shares have been redeemed or (b) there has been a final distribution of the underlying
preferred stock in connection with our liquidation, dissolution or winding up and the preferred stock has been distributed to the holders of depositary receipts.
Charges of Depositary
We will pay all
transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will also pay charges of the depositary in connection with the initial deposit of the preferred stock and any redemption of the
preferred stock. Holders of depositary receipts will pay other transfer and other taxes and governmental charges and those other charges, including a fee for the withdrawal of shares of preferred stock upon surrender of depositary receipts, as are
expressly provided in the deposit agreement to be for their accounts.
Miscellaneous
The depositary will forward to holders of depositary receipts all reports and communications from us that we deliver to the depositary and that
we are required to furnish to the holders of the preferred stock.
Neither we nor the depositary will be liable if either of us is
prevented or delayed by law or any circumstance beyond our control in performing our respective obligations under the deposit agreement. Our obligations and those of the depositary will be limited to performance in good faith of our respective
duties under the deposit agreement. Neither we nor the depositary will be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or preferred stock unless satisfactory indemnity is furnished. We and the depositary
may rely upon written advice of counsel or accountants, or upon information provided by persons presenting preferred stock for deposit, holders of depositary receipts or other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering notice to us of its election to resign. We may remove the depositary at any time. Any
resignation or removal will take effect upon the appointment of a successor depositary and its acceptance of the appointment. The successor depositary must be appointed within 60 days after delivery of the notice of resignation or removal and
must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000.
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DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, preferred stock, common stock or units of two or more of these types of securities.
Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not assume
any obligation or relationship of agency or trust for or with any registered holders of warrants or beneficial owners of warrants.
We
will distribute a prospectus supplement with regard to each issue of warrants. Each prospectus supplement will describe:
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in the case of warrants to purchase debt securities, the designation, aggregate principal amount, currencies, denominations and terms of the series of debt securities purchasable upon exercise of the warrants and the
price at which the holders may purchase the debt securities upon exercise; |
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in the case of warrants to purchase preferred stock, the designation, number of shares, stated value and terms, such as liquidation, dividend, conversion and voting rights, of the series of preferred stock purchasable
upon exercise of the warrants and the price at which the holders may purchase such number of shares of preferred stock of such series upon such exercise; |
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in the case of warrants to purchase common stock, the number of shares of common stock purchasable upon the exercise of the warrants and the price at which the holders may purchase such number of shares of common stock
upon such exercise; |
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the period during which the holders may exercise the warrants; |
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any provision adjusting the securities that may be purchased on exercise of the warrants, and the exercise price of the warrants, to prevent dilution or otherwise; |
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the place or places where warrants can be presented for exercise or for registration of transfer or exchange; and |
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any other material terms of the warrants. |
Warrants for the purchase of preferred stock and
common stock will be offered and exercisable for U.S. dollars only. Warrants will be issued in registered form only. The exercise price for warrants will be subject to adjustment as described in the applicable prospectus supplement.
Prior to the exercise of any warrants to purchase debt securities, preferred stock or common stock, holders of the warrants will not have any
of the rights of holders of the debt securities, preferred stock or common stock purchasable upon exercise, including:
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in the case of warrants for the purchase of debt securities, the right to receive payments of principal of, any premium or interest on the debt securities purchasable upon exercise or to enforce covenants in the
applicable indenture; or |
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in the case of warrants for the purchase of preferred stock or common stock, the right to vote or to receive any payments of dividends on the preferred stock or common stock purchasable upon exercise. |
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PLAN OF DISTRIBUTION
We may sell the securities described in this prospectus in any of the following ways:
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to or through underwriters; |
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directly to purchasers through a specific bidding, ordering or auction process or otherwise; |
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through any combination of these methods of sale; or |
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through any other methods described in a prospectus supplement. |
The prospectus supplement
with respect to the securities being offered will set forth the specific plan of distribution and the terms of the offering, including:
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the names of any underwriters, dealers or agents; |
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the purchase price of the securities and the proceeds we will receive from the sale; |
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any underwriting discounts, selling commissions, agency fees and other items constituting underwriters’, dealers’ or agents’ compensation; |
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any initial public offering price; and |
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any discounts or concessions allowed or re-allowed or paid to dealers or agents. |
We may
designate agents to solicit purchases for the period of their appointment and to sell securities on a continuing basis, including pursuant to “at the market offerings.”
We may offer these securities to the public through underwriting syndicates represented by managing underwriters or through underwriters
without a syndicate. If underwriters are used, we will enter into an underwriting agreement with the underwriters at the time of the sale of the securities and the securities will be acquired by the underwriters for their own account. The
underwriters may resell the securities in one or more transactions, including negotiated transactions at a fixed public offering price or at varying prices determined at the time of sale. Unless otherwise indicated in the applicable prospectus
supplement, the obligations of the underwriters to purchase the securities will be subject to customary conditions precedent and the underwriters will be obligated to purchase all the securities offered if any of the securities are purchased.
Underwriters may sell securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agent. Any
initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.
Underwriters and agents may from time to time purchase and sell the securities described in this prospectus and the applicable prospectus
supplement in the secondary market, but are not obligated to do so. No assurance can be given that there will be a secondary market for the securities or liquidity in the secondary market if one develops. From time to time, underwriters and agents
may make a market in the securities.
In order to facilitate the offering of the securities, the underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of these securities or any other securities the prices of which may be used to determine payments on these securities. Specifically, the underwriters may over-allot in connection with the
offering, creating a short position in the debt securities for their own accounts. In addition, to cover over-allotments or to stabilize the price of the securities or of any other securities, the underwriters may bid for, and purchase, the
securities or any other securities in the open market. Finally, in any offering of the securities
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through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the securities in the offering, if the
syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above
independent market levels. The underwriters are not required to engage in these activities, and may suspend or terminate any of these activities at any time.
Underwriters named in an applicable supplement are, and dealers and agents named in an applicable supplement may be, deemed to be
“underwriters” within the meaning of the Securities Act in connection with the securities offered thereby, and any discounts or commissions they receive from us and any profit on their resale of the securities may be deemed to be
underwriting discounts and commissions under the Securities Act. We may have agreements with the underwriters, agents and dealers to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute
to payments they may be required to make in respect of these liabilities. Underwriters, agents or dealers and their affiliates may be customers of, engage in transactions with, or perform services for us or our subsidiaries and affiliates in the
ordinary course of business.
If indicated in an applicable supplement, we will authorize dealers acting as our agents to solicit offers
from some institutions to purchase our securities at the public offering price given in that supplement under “Delayed Delivery Contracts” providing for payment and delivery on the date or dates stated in such supplement. Each contract
will be for an amount not less than, and the aggregate principal amount of securities sold under the contracts will not be less nor more than, the respective amounts stated in the applicable prospectus supplement. Institutions with whom contracts,
when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but will in all cases be subject to our approval. Contracts
will not be subject to any conditions except that:
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the purchase by an institution of the securities covered by its contracts will not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which such institution is subject and
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if the securities are being sold to underwriters, we will have sold to the underwriters the total principal amount of the securities less the principal amount covered by contracts. |
One or more firms, referred to as “remarketing firms,” may also offer or sell the securities, if the applicable prospectus
supplement so indicates, in connection with a remarketing arrangement upon their purchase. Remarketing firms will act as principals for their own accounts or as agents for us. These remarketing firms will offer or sell the securities in accordance
with a redemption or repayment pursuant to the terms of the securities. The applicable prospectus supplement will identify any remarketing firm and the terms of its agreement, if any, with us and will describe the remarketing firm’s
compensation. Remarketing firms may be deemed to be underwriters in connection with the securities they remarket. Remarketing firms may be entitled under agreements that may be entered into with us to indemnification by us against and contribution
toward certain civil liabilities, including liabilities under the Securities Act and may be customers of, engage in transactions with or perform services for us or our subsidiaries and affiliates in the ordinary course of business.
Unless indicated in the applicable prospectus supplement, we do not expect to apply to list any series of debt securities on a securities
exchange.
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LEGAL MATTERS
The validity of the securities will be passed upon for us by Parker Poe Adams & Bernstein LLP, Charlotte, North Carolina. Any
underwriters, dealers or agent will be advised by their own legal counsel concerning issues relating to any offering.
EXPERTS
The consolidated financial statements, incorporated into this prospectus by reference from our Annual Report on Form
10-K, and the effectiveness of the Company’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 consolidated financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the SEC under the Securities Act of 1933 that registers the securities offered by this
prospectus. The registration statement, including the attached exhibits, contains additional relevant information about us. The rules and regulations of the SEC allow us to omit some information included in the registration statement from this
prospectus.
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read and copy any
materials we file with the SEC at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can obtain information about the operation of the SEC Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a
website that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov. Our common stock is listed on the New York Stock Exchange (NYSE: PNY), and you can obtain information about
us at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. General information about us, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those
reports, is available free of charge through our website at http://www.piedmontng.com as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. Information on, or accessible through, our website is
not incorporated into this prospectus or our other securities filings and is not a part of these filings.
This prospectus is part of a
registration statement we have filed with the SEC. As permitted by SEC rules, this prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits. You may refer to the registration
statement and the exhibits for more information about us and our securities. The registration statement and the exhibits are available at the SEC’s Public Reference Room or through its website.
INCORPORATION BY REFERENCE
The SEC allows us to “incorporate by reference” information into this document. This means that we can disclose important
information to you by referring you to another document filed separately with the SEC. 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 the previously filed information. We incorporate by reference the documents listed below and any future filings made by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
other than any portions of the respective filings that were furnished, pursuant to Item 2.02 or Item 7.01 of Current Reports on Form 8-K (including exhibits related thereto) or other applicable SEC rules, rather than filed, prior to the
termination of the offerings under this prospectus:
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Annual Report on Form 10-K for the year ended October 31, 2013; |
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Quarterly Reports on Form 10-Q for the quarters ended January 31, 2014 and April 30, 2014; |
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Current Reports on Form 8-K (File No. 001-06196) filed on March 11, 2014, March 25, 2014 and April 1, 2014; and |
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the description of our common stock contained in our Form 8-B registration statement filed under the Exchange Act, including any amendment or report filed for the purpose of updating that description. |
You may request a copy of these filings (other than an exhibit to the filings unless we have specifically incorporated that exhibit by
reference into the filing), at no cost, by writing or telephoning us at the following address:
Piedmont Natural Gas Company, Inc.
Attention: Corporate Secretary
4720 Piedmont Row Drive
Charlotte,
North Carolina 28210
Telephone: (704) 364-3120
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You should rely only on the information contained or incorporated by reference in this prospectus
or in any prospectus supplement. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell, or soliciting
an offer to buy, securities in any jurisdiction where the offer and sale is not permitted. You should assume that the information appearing or incorporated by reference in this prospectus, the applicable prospectus supplement or any applicable
pricing supplement is accurate only as of the date of the documents containing the information, regardless of the time of its delivery or of any sale of our securities. Our business, financial condition, results of operations and prospects may have
changed since those dates.
Any statement contained in a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the prospectus to the extent that a statement contained herein or in any other subsequently filed document that is incorporated by reference herein modifies or supersedes such earlier statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the prospectus.
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Piedmont Natural Gas Company, Inc.
Up to $170,000,000
Common Stock
PROSPECTUS SUPPLEMENT
January 7, 2015
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| BofA Merrill Lynch |
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J.P. Morgan |
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