Exhibit 3.1
CERTIFICATE OF
DESIGNATIONS OF
4.875% Series B FIXED-RATE RESET CUMULATIVE redeemable perpetual PREFERRED STOCK
OF
duke energy corporation
Duke Energy Corporation,
a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”),
in accordance with the provisions of Sections 103 and 151 thereof, does hereby certify:
The board of directors
of the Corporation (the “Board of Directors”), in accordance with the Certificate of Incorporation and By-Laws
of the Corporation and applicable law, authorized the issuance and sale by the Corporation of shares of its Preferred Stock pursuant
to resolutions adopted by the Board of Directors effective August 25, 2016 and September 9, 2019 (collectively, the “Resolutions”),
authorized the formation of a pricing committee of the Board of Directors (the “Committee”), and pursuant to
the authority conferred upon the Committee in accordance with Section 141(c) of the General Corporation Law of the State of Delaware
and the resolutions of the Board of Directors, the Committee adopted the following resolution creating and setting forth the terms
of a series of Preferred Stock of the Corporation designated as the “4.875% Series B Fixed-Rate Reset Cumulative Redeemable
Perpetual Preferred Stock.”
RESOLVED, that pursuant
to the authority vested in the Committee and in accordance with the Resolutions, the provisions of the Certificate of Incorporation
and By-Laws of the Corporation and applicable law, a series of Preferred Stock, par value $0.001 per share, of the Corporation
be and hereby is created, and that the designation and number of shares of such series, and the voting and other powers, preferences
and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of
the shares of such series, are as follows:
SECTION 1. DESIGNATION.
The distinctive serial designation of such series of Preferred Stock is “4.875% Series B Fixed-Rate Reset Cumulative Redeemable
Perpetual” (the “Series B Preferred Stock”). Each share of Series B Preferred Stock shall be identical
in all respects to every other share of Series B Preferred Stock, except as to the respective dates from which dividends thereon
shall accumulate, to the extent such dates may differ as permitted pursuant to Section 5(a) below.
SECTION 2. NUMBER OF
SHARES. The authorized number of shares of Series B Preferred Stock shall be 1,000,000. Shares of Series B Preferred Stock that
are redeemed, purchased or otherwise acquired by the Corporation, or converted into another series of Preferred Stock, shall be
cancelled and shall revert to authorized but unissued shares of Series B Preferred Stock.
SECTION 3. DEFINITIONS.
As used herein with respect to Series B Preferred Stock:
(a)
“Agent Members” has the meaning specified in Section 14(b).
(b)
“Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions
in The City of New York are not authorized or obligated by law, regulation or executive order to close.
(c)
“By-Laws” means the Amended and Restated By-Laws of the Corporation, effective as of January 4, 2016,
as the same may be amended or restated from time to time.
(d)
“Certificate of Designations” means this Certificate of Designations relating to the Series B Preferred
Stock, as it may be amended from time to time.
(e)
“Certificate of Incorporation” shall mean the Amended and Restated Certificate of Incorporation of the
Corporation, effective as of May 20, 2014, as amended on March 28, 2019 and as the same may be further amended or restated from
time to time, and shall include this Certificate of Designations.
(f)
“Certificated Series B Preferred Stock” has the meaning specified in Section 14.
(g)
“Common Stock” means the common stock, par value $0.001 per share, of the Corporation.
(h)
“Dividend Payment Date” has the meaning specified in Section 5.
(i)
“Dividend Period” with respect to the Series B Preferred Stock means each period commencing on (and including)
a Dividend Payment Date and continuing to, but excluding, the next succeeding Dividend Payment Date or any earlier redemption date,
except that the first Dividend Period for the initial issuance of Series B Preferred Stock shall commence on (and include) the
Issue Date.
(j)
“Dividend Record Date” has the meaning specified in Section 5.
(k)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(l)
“First Call Date” means September 16, 2024.
(m)
“Five-year U.S. Treasury Rate” means, as of any Reset Dividend Determination Date, as applicable, (i)
an interest rate (expressed as a decimal) determined to be the per annum rate equal to the arithmetic mean of the five most recent
daily yields to maturity for U.S. Treasury securities with a maturity of five years from the next Reset Date and trading in the
public securities markets or (ii) if there is no such published U.S. Treasury security with a maturity of five years from the next
Reset Date and trading in the public securities markets, then the rate will be determined by interpolation between the arithmetic
mean of the five most recent daily yields to maturity for each of the two series of U.S. Treasury securities trading in the public
securities market, (A) one maturing as close as possible to, but earlier than, the Reset Date following the next succeeding Reset
Dividend Determination Date, and (B) the other maturity as close as possible to, but later than, the Reset Date following the next
succeeding Reset Dividend Determination Date, in each case as published in the most recent H.15. If the Five-year U.S. Treasury
Rate cannot be determined pursuant to the methods described in clauses (i) or (ii) above, then the Five-year U.S. Treasury Rate
will be the same interest rate determined for the prior Reset Dividend Determination Date.
(n)
“Global Depositary” has the meaning specified in Section 14.
(o)
“Global Legend” has the meaning specified in Section 14.
(p)
“Global Series B Preferred Stock” has the meaning specified in Section 14.
(q)
“H.15” means the statistical release designated as such, or any successor publication, published by the
Board of Governors of the U.S. Federal Reserve System, and “Most recent H.15” means the H.15 published closest
in time but prior to the close of business on the second Business Day prior to the applicable Reset Date.
(r)
“Issue Date” shall mean September 12, 2019, which is the original issue date of the Series B Preferred
Stock.
(s)
“Junior Stock” has the meaning specified in Section 4(a).
(t)
“Liquidation Preference” has the meaning specified in Section 6.
(u)
“Liquidation Preference Amount” means $1,000 per share of Series B Preferred Stock.
(v)
“Nonpayment Event” has the meaning specified in Section 8(b).
(w)
“Parity Stock” has the meaning specified in Section 4(a).
(x)
“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture,
association, joint stock company, company, limited liability company, trust, unincorporated association, or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
(y)
“Preferred Stock” means any and all series of preferred stock, having a par value of $0.001 per share,
of the Corporation, including the Series B Preferred Stock.
(z)
“Preferred Stock Directors” has the meaning specified in Section 8(b).
(aa)
“Ratings Event” means that any nationally recognized statistical rating organization as defined in Section
3(a)(62) of the Exchange Act or in any successor provision thereto, that then publishes a rating for the Corporation (a “Rating
Agency”) amends, clarifies or changes the criteria it uses to assign equity credit to securities such as the Series B
Preferred Stock, which amendment, clarification or change results in:
(i)
the shortening of the length of time the Series B Preferred Stock is assigned a particular level of equity credit by that
Rating Agency as compared to the length of time they would have been assigned that level of equity credit by that Rating Agency
or its predecessor on the initial issuance of the Series B Preferred Stock; or
(ii)
the lowering of the equity credit (including up to a lesser amount) assigned to the Series B Preferred Stock by that Rating
Agency as compared to the equity credit assigned by that Rating Agency or its predecessor on the initial issuance of the Series
B Preferred Stock.
(bb)
“Registrar” means Equiniti Trust Company (or any successor thereto), in its capacity as registrar for
the Series B Preferred Stock.
(cc)
“Reset Date” means the First Call Date and each date falling on the fifth anniversary of the preceding
Reset Date.
(dd)
“Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling two business
days prior to the beginning of such Reset Period.
(ee)
“Reset Period” means the period from and including the First Call Date to, but excluding, the next following
Reset Date and thereafter each period from and including each Reset Date to, but excluding, the next following Reset Date.
(ff)
“Senior Stock” has the meaning specified in Section 4(a).
(gg)
“Series A Preferred Stock” means the Corporation’s 5.75% Series A Cumulative Redeemable Perpetual
Preferred Stock, par value $0.001 per share, that was issued on March 29, 2019.
(hh)
“Transfer Agent” means Equiniti Trust Company (or any successor thereto), in its capacity as transfer
agent for the Series B Preferred Stock.
(ii)
“Voting Preferred Stock” means, with regard to any election or removal of a Preferred Stock Director
(as defined in Section 4 below) or any other matter as to which the holders of Series B Preferred Stock are entitled to vote
as specified in Section 8 of this Certificate of Designations, any and all class or series of Preferred Stock (other than Series
B Preferred Stock), that rank equally with Series B Preferred Stock either as to the payment of dividends (whether cumulative or
non-cumulative) or as to the distribution of assets upon liquidation, dissolution or winding-up of the affairs of the Corporation
and upon which like voting rights have been conferred and are exercisable with respect to such matter.
SECTION 4. RANKING
(a)
RANKING. The shares of Series B Preferred Stock shall rank, with respect to the payment of dividends (whether cumulative
or non-cumulative) and distributions upon the liquidation, dissolution or winding-up of the affairs of the Corporation:
(i)
senior to the Common Stock and to each other class or series of the Corporation’s capital stock established after
the Issue Date that is expressly made subordinated to the Series B Preferred Stock as to the payment of dividends or amounts payable
on a liquidation, dissolution or winding-up of the affairs of the Corporation (the “Junior Stock”);
(ii)
on a parity with the Series A Preferred Stock and any class or series of the Corporation’s capital stock established
after the Issue Date that is not expressly made senior or subordinated to the Series B Preferred Stock as to the payment of dividends
or amounts payable on a liquidation, dissolution or winding-up of the affairs of the Corporation (collectively, the “Parity
Stock”); and
(iii)
junior to any class or series of the Corporation’s capital stock established after the Issue Date that is expressly
made senior to the Series B Preferred Stock as to the payment of dividends or amounts payable on a liquidation, dissolution or
winding-up of the affairs of the Corporation (the “Senior Stock”).
The Corporation may authorize and issue
additional shares of Series B Preferred Stock at any time and from time to time without notice to, or the consent of, the holders
of the Series B Preferred Stock, and such additional shares of Series B Preferred Stock will be deemed to form a single series
together with all outstanding shares of the Series B Preferred Stock.
The Corporation may issue Parity Stock and
Junior Stock at any time and from time to time in one or more series without notice to, or the consent of, the holders of the Series
B Preferred Stock.
SECTION 5. DIVIDENDS.
(a)
RATE. (i) Holders of Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors
or any duly authorized committee of the Board of Directors out of funds legally available for the payment of dividends under Delaware
law, cumulative cash dividends per each share of Series B Preferred Stock at the rate determined as set forth below in this Section 5
applied to the Liquidation Preference Amount of $1,000 per share of Series B Preferred Stock. Dividends on the Series B Preferred
Stock shall accumulate daily and shall be cumulative from, and including, the Issue Date and shall be payable semi-annually in
arrears on the 16th day of each March and September, commencing on March 16, 2020 (each such date, a “Dividend
Payment Date”); provided, that if any such Dividend Payment Date is a day that is not a Business Day, the dividend
with respect to such Dividend Payment Date shall instead be payable on the immediately succeeding Business Day, without additional
dividends, interest or other payment in respect of such delayed payment. Dividends on Series B Preferred Stock shall be cumulative
(i) whether or not the Corporation has earnings, (ii) whether or not there are funds legally available for the payment of such
dividends, (iii) whether or not such dividends are authorized or declared and (iv) whether or not any of the Corporation’s
agreements prohibit the current payment of dividends, including any agreement relating to the Corporation’s indebtedness.
Accordingly, if the Board of Directors or any duly authorized committee of the Board of Directors does not declare a dividend on
the Series B Preferred Stock payable in respect of any Dividend Period before the related Dividend Payment Date, such dividend
shall accumulate and an amount equal to such accumulated dividend shall become payable out of funds legally available therefor
upon the liquidation, dissolution or winding-up of the affairs of the Corporation (or earlier redemption of such shares of Series
B Preferred Stock), to the extent not paid prior to such liquidation, dissolution or winding-up or earlier redemption, as the case
may be. No interest, or sum of money in lieu of interest, shall be payable on any dividend payment that may be in arrears on the
Series B Preferred Stock.
(ii)
Dividends that are payable on Series B Preferred Stock on any Dividend Payment Date will be payable to holders of record
of Series B Preferred Stock as they appear on the stock register of the Corporation as of the close of business on the applicable
record date, which shall be the 15th calendar day before such Dividend Payment Date or such other record date fixed by the Board
of Directors or any duly authorized committee of the Board of Directors that is not more than 60 calendar days nor less than 10
calendar days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend
Record Date shall be a Dividend Record Date whether or not such day is a Business Day. In the case of payments of dividends payable
in arrears, the Dividend Record Date shall be such date fixed by the Board of Directors or any duly authorized committee of the
Board of Directors.
(iii)
Dividends payable on the Series B Preferred Stock, including dividends payable for any partial Dividend Period, shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on any Dividend Payment Date shall
include dividends accumulated to, but excluding, such Dividend Payment Date.
(iv)
The initial dividend rate for the Series B Preferred Stock from and including the Issue Date to, but excluding, the First
Call Date will be 4.875% per annum of the $1,000 liquidation preference per share. On and after the First Call Date, the
dividend rate on the Series B Preferred Stock for each Reset Period will be equal to the Five-year U.S. Treasury Rate as of the
most recent Reset Dividend Determination Date plus a spread of 3.388%.
(v)
The applicable dividend rate for each Reset Period will be determined by the calculation agent, as of the applicable Reset
Dividend Determination Date. Promptly upon such determination, the calculation agent will notify the Corporation of the dividend
rate for the Reset Period. The calculation agent’s determination of any dividend rate, and its calculation of the amount
of dividends for any Dividend Period beginning on or after the First Call Date will be on file at the Corporation’s principal
offices, will be made available to any holder of the Series B Preferred Stock upon request and will be final and binding in the
absence of manifest error.
(b)
PRIORITY OF DIVIDENDS. (i) The Corporation shall not declare or pay, or set aside for payment, full dividends on the Series
B Preferred Stock or any Parity Stock for any Dividend Period unless the full cumulative dividends have been declared and paid
(or declared and a sum sufficient for the payment thereof has been set aside) on the Series B Preferred Stock and any Parity Stock
through the most recently completed Dividend Period for each such security. When dividends are not paid (or declared and a sum
sufficient for payment thereof set aside) in full on the Series B Preferred Stock and any shares of Parity Stock on any Dividend
Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the related Dividend Period), all dividends declared on the Series B Preferred Stock and all such Parity
Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the
Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) shall
be declared pro rata so that the respective amounts of such dividends shall bear the same ratio to each other as all accumulated
but unpaid dividends per share on the Series B Preferred Stock and all Parity Stock payable on such Dividend Payment Date (or,
in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date
falling within the Dividend Period related to such Dividend Payment Date) bear to each other. Any portion of such dividends not
declared and paid (or declared and a sum sufficient for the payment thereof set aside) that are payable upon the Series B Preferred
Stock and such Parity Stock in respect of such Dividend Period on such Dividend Payment Date shall accumulate, and an amount equal
to such undeclared portion of such dividends shall become payable out of funds legally available for the payment of dividends upon
the Corporation’s liquidation, dissolution or winding-up (or earlier redemption of such shares of Series B Preferred Stock
and such Parity Stock), to the extent not paid prior to such liquidation, dissolution or winding- up or earlier redemption, as
the case may be.
(ii)
During any Dividend Period, so long as any shares of Series B Preferred Stock remain outstanding, unless the full cumulative
dividends have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside) on the Series
B Preferred Stock and any Parity Stock through the most recently completed Dividend Period for each such security:
(x) no dividend shall be declared
or paid on the Common Stock or any other shares of Junior Stock (other than a dividend payable solely in shares of Junior Stock);
and
(y) no Common Stock or other
Junior Stock shall be purchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other
than (a) purchases, redemptions or other acquisitions of shares of Junior Stock pursuant to any employment contract, dividend reinvestment
plan, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors, consultants or advisors,
(b) as a result of a reclassification of Junior Stock for or into other Junior Stock, (c) the exchange or conversion of one share
of Junior Stock for or into another share of such Junior Stock, or (d) through the use of the proceeds of a substantially contemporaneous
sale of Junior Stock) during a Dividend Period.
(iii) The
Series B Preferred Stock shall rank junior as to payment of dividends to any class or series of Senior Stock that the Corporation
may issue in the future. If at any time the Corporation has failed to pay, on the applicable payment date, accumulated dividends
on any class or series of Senior Stock, the Corporation may not pay any dividends on the outstanding Series B Preferred Stock or
redeem or otherwise repurchase any shares of Series B Preferred Stock until the Corporation has paid or set aside for payment the
full amount of the unpaid dividends on the Senior Stock that must, under the terms of such securities, be paid before the Corporation
may pay dividends on, or redeem or repurchase, the Series B Preferred Stock.
(iv) Notwithstanding
anything herein to the contrary, no dividends on the Series B Preferred Stock shall be declared and paid (or declared and a sum
sufficient for the payment thereof set aside) at such time as the terms and provisions of any agreement of the Corporation, including
any agreement relating to its indebtedness, prohibits such declaration and payment (or declaration and setting aside a sum sufficient
for the payment thereof) would constitute a breach thereof or a default thereunder, or if the declaration and payment (or the declaration
and setting aside a sum sufficient for the payment thereof) shall be restricted or prohibited by law.
(c)
Subject to the foregoing, dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directors
or any duly authorized committee of the Board of Directors may be declared and paid on the Common Stock and any other shares of
Junior Stock from time to time out of any funds legally available for such payment, and the Series B Preferred Stock shall not
be entitled to participate in any such dividend.
SECTION 6. LIQUIDATION
RIGHTS.
(a) VOLUNTARY OR INVOLUNTARY LIQUIDATION. In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation,
whether voluntary or involuntary, holders of Series B Preferred Stock shall be entitled to receive, out of the assets of the Corporation
legally available for distribution to stockholders of the Corporation, after satisfaction of all liabilities and obligations to
creditors of the Corporation, if any, and subject to the rights of holders of Senior Stock in respect of distributions upon liquidation,
dissolution or winding-up of the affairs of the Corporation, and before any distribution of such assets is made to or set aside
for the holders of Common Stock and any other Junior Stock, in full an amount equal to $1,000 per share of Series B Preferred Stock,
together with an amount equal to all accumulated and unpaid dividends (whether or not declared), if any. Holders of the Series
B Preferred Stock will not be entitled to any other amounts from the Corporation after they have received their full Liquidation
Preference.
(b) PARTIAL
PAYMENT. If in any distribution described in Section 6(a) above the assets of the Corporation are not sufficient to pay the
Liquidation Preferences in full to all holders of Series B Preferred Stock and all holders of any Parity Stock, the amounts paid
to the holders of Series B Preferred Stock and to the holders of all such other Parity Stock shall be paid pro rata in accordance
with the respective aggregate Liquidation Preferences of the holders of Series B Preferred Stock and the holders of all such other
Parity Stock. In any such distribution, the “Liquidation Preference” of any holder of Preferred Stock of the
Corporation shall mean the amount otherwise payable to such holder in such distribution (assuming no limitation on the assets of
the Corporation available for such distribution), including any unpaid, accumulated, cumulative dividends, whether or not declared
(and, in the case of any Parity Stock on which dividends accumulate on a non-cumulative basis, an amount equal to any declared
but unpaid dividends, as applicable).
(c) RESIDUAL
DISTRIBUTIONS. If the Liquidation Preference has been paid in full to all holders of Series B Preferred Stock and any Parity Stock,
the holders of other stock of the Corporation shall be entitled to receive all remaining assets of the Corporation according to
their respective rights and preferences.
(d) MERGER,
CONSOLIDATION AND SALE OF ASSETS NOT LIQUIDATION. For purposes of this Section 6, neither the merger or consolidation of the
Corporation into or with any other corporation, including a merger or consolidation in which the holders of Series B Preferred
Stock receive cash, securities or other property for their shares, nor a sale, transfer or lease of all or part of its assets,
will be deemed a liquidation, dissolution or winding-up of the affairs of the Corporation.
SECTION 7. REDEMPTION.
(a) OPTIONAL
REDEMPTION. The Series B Preferred Stock is perpetual and has no maturity date. Holders of the Series B Preferred Stock will have
no right to require the redemption or repurchase of the Series B Preferred Stock. The Corporation may, at its option, redeem the
shares of Series B Preferred Stock at the time outstanding, upon notice given as provided in Section 7(c) below,
(i)
in whole or in part, from time to time, on the First Call Date or any subsequent Reset Date, at a redemption price in cash
equal to $1,000 per share of Series B Preferred Stock, plus an amount equal to accumulated and unpaid dividends (whether or not
declared) to, but excluding, the date fixed for redemption, or
(ii)
in whole
but not in part, within 120 days after the conclusion of any review or appeal process instituted by the Corporation following
the occurrence of a Ratings Event, at a redemption price in cash equal to $1,020 per share of Series B Preferred Stock, plus an
amount equal to accumulated and unpaid dividends (whether or not declared) to, but excluding, such redemption date.
The redemption price for any shares of
Series B Preferred Stock shall be payable on the redemption date to the holder of such shares against surrender of the certificate(s)
evidencing such shares to the Corporation or its agent. Any declared and unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not constitute a part of or be paid to the holder entitled to
receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on
the Dividend Record Date relating to such Dividend Payment Date as provided in Section 5 above.
(b) NO
SINKING FUND. The Series B Preferred Stock will not be subject to any mandatory redemption, sinking fund, retirement fund or purchase
fund or other similar provisions. Holders of Series B Preferred Stock will have no right to require redemption, repurchase or retirement
of any shares of Series B Preferred Stock.
(c) NOTICE
OF REDEMPTION. Notice of every redemption of shares of Series B Preferred Stock shall be given by first class mail,
postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing
on the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date fixed
for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or
in the mailing thereof, to any holder of shares of Series B Preferred Stock designated for redemption shall not affect the
validity of the proceedings for the redemption of any other shares of Series B Preferred Stock. Notwithstanding the
foregoing, if the Series B Preferred Stock is issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the holders of Series B Preferred Stock at such time and in any manner
permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the number of shares
of Series B Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (3) the redemption price; (4) the place or places where certificates
for such shares are to be surrendered for payment of the redemption price; and (5) that dividends on the shares of Series B
Preferred Stock to be redeemed will cease to accumulate from and after such redemption date.
(d) PARTIAL
REDEMPTION. In case of any redemption of only part of the shares of Series B Preferred Stock at the time outstanding, the shares
to be redeemed shall be selected either pro rata or by lot (or, in the event the Series B Preferred Stock is in the form of Global
Series B Preferred Stock in accordance with the applicable procedures of DTC). Subject to the provisions hereof, the Corporation
shall have full power and authority to prescribe the terms and conditions upon which shares of Series B Preferred Stock shall be
redeemed from time to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without charge to the holder thereof.
(e) EFFECTIVENESS
OF REDEMPTION. If notice of redemption has been duly given and if on or before the redemption date specified in the notice all
funds necessary for the redemption have been set aside by the Corporation, separate and apart from its other funds, in trust for
the pro rata benefit of the holders of the shares called for redemption, so as to be and continue to be available therefor, then,
notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after
the redemption date dividends shall cease to accumulate on all shares so called for redemption, all shares so called for redemption
shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease
and terminate, except only the right of the holders thereof to receive the amount payable on such redemption, without interest.
Any funds unclaimed at the end of two years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment
of the redemption price of such shares.
SECTION 8. VOTING RIGHTS.
(a) GENERAL. The holders of Series B Preferred Stock shall not have any voting rights except as set forth below or as otherwise
from time to time required by law.
(b) RIGHT TO ELECT TWO DIRECTORS UPON NONPAYMENT EVENTS. If and whenever dividends on any shares of Series B Preferred Stock
shall not have been paid for the equivalent of three semi-annual full Dividend Periods, whether or not consecutive (a “Nonpayment
Event”), the number of directors then constituting the Board of Directors shall automatically be increased by two and
the holders of Series B Preferred Stock, together with the holders of any outstanding shares of Voting Preferred Stock, voting
together as a single class, with each series having a number of votes proportionate to the aggregate liquidation preference of
the outstanding shares of such series, shall be entitled to elect the two additional directors (the “Preferred Stock Directors”),
provided that it shall be a qualification for election for any such Preferred Stock Director that the election of such director
shall not cause the Corporation to violate the corporate governance requirement of the New York Stock Exchange (or any other securities
exchange or other trading facility on which securities of the Corporation may then be listed or traded) that listed or traded companies
must have a majority of independent directors.
In the event that the
holders of the Series B Preferred Stock, and such other holders of Voting Preferred Stock, shall be entitled to vote for the election
of the Preferred Stock Directors following a Nonpayment Event, such directors shall be initially elected following such Nonpayment
Event only at a special meeting called at the request of the holders of record of at least 20% of the Series B Preferred Stock
or of any other such series of Voting Preferred Stock then outstanding (unless such request for a special meeting is received less
than 90 days before the date fixed for the next annual or special meeting of the stockholders of the Corporation, in which event
such election shall be held only at such next annual or special meeting of stockholders), and at each subsequent annual meeting
of stockholders of the Corporation. Such request to call a special meeting for the initial election of the Preferred Stock Directors
after a Nonpayment Event shall be made by written notice, signed by the requisite holders of Series B Preferred Stock or Voting
Preferred Stock, and delivered to the Secretary of the Corporation in such manner as provided for in Section 10 below, or as may
otherwise be required by law.
If and when all accumulated
and unpaid dividends on the Series B Preferred Stock shall have been paid in full through the most recently completed Dividend
Period following a Nonpayment Event, then the right of the holders of Series B Preferred Stock to elect the Preferred Stock Directors
shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event pursuant to this
Section 8 and the number of Dividend Periods in which dividends have not been paid shall be reset to zero), and, if and when
any rights of holders of Series B Preferred Stock and Voting Preferred Stock to elect the Preferred Stock Directors shall have
ceased, the terms of office of all the Preferred Stock Directors shall forthwith terminate and the number of directors constituting
the Board of Directors shall automatically be reduced accordingly.
Any Preferred Stock
Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series
B Preferred Stock and Voting Preferred Stock, when they have the voting rights described above (voting together as a single class).
So long as a Nonpayment Event shall continue, any vacancy in the office of a Preferred Stock Director (other than prior to the
initial election of Preferred Stock Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock
Director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding
shares of the Series B Preferred Stock and Voting Preferred Stock, when they have the voting rights described above (voting together
as a single class). Any such vote of stockholders to remove, or to fill a vacancy in the office of, a Preferred Stock Director
may be taken only at a special meeting of such stockholders, called as provided above for an initial election of Preferred Stock
Director after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual
or special meeting of the stockholders, in which event such election shall be held at such next annual or special meeting of stockholders).
The Preferred Stock Directors shall each be entitled to one vote per director on any matter that shall come before the Board of
Directors for a vote. Each Preferred Stock Director elected at any special meeting of stockholders or by written consent of the
other Preferred Stock Director shall hold office until the next annual meeting of the stockholders if such office shall not have
previously terminated as above provided.
(c)
OTHER VOTING RIGHTS. So long as any shares of Series B Preferred Stock are outstanding, in addition to any other vote or
consent of stockholders required by law or by the Certificate of Incorporation, the vote or consent of the holders of at least
66 2/3% of the shares of Series B Preferred Stock and any Voting Preferred Stock (subject to the last paragraph of this Section 8(c))
at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:
(i)
AUTHORIZATION OF SENIOR STOCK. Any amendment or alteration of the Certificate of Incorporation or this Certificate of Designation
to authorize or create, or increase the authorized amount of, any shares of any class or series of capital stock of the Corporation
ranking senior to the Series B Preferred Stock with respect to the payment of dividends and/or the distribution of assets on any
liquidation, dissolution or winding-up of the affairs of the Corporation;
(ii)
AMENDMENT OF SERIES B PREFERRED STOCK. Any amendment, alteration or repeal of any provision of the Certificate of Incorporation
or this Certificate of Designation so as to materially and adversely affect the special rights, preferences, privileges or voting
powers of the Series B Preferred Stock, taken as a whole; or
(iii)
SHARE EXCHANGES, RECLASSIFICATIONS, MERGERS AND CONSOLIDATIONS. Any consummation of a binding share exchange or reclassification
involving the Series B Preferred Stock, or of a merger or consolidation of the Corporation with another corporation or other entity,
unless in each case (x) the shares of Series B Preferred Stock remain outstanding or, in the case of any such merger or consolidation
with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference
securities of the surviving or resulting entity or its ultimate parent, and (y) such Series B Preferred Stock remaining outstanding
or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations
and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences,
privileges and voting powers, and limitations and restrictions thereof, of the Series B Preferred Stock immediately prior to such
consummation, taken as a whole;
provided, however, that for
all purposes of this Section 8(c), any increase in the amount of the authorized or issued Series B Preferred Stock or authorized
Preferred Stock, or the creation and issuance, or an increase in the authorized or issued amount, of any other series of Preferred
Stock ranking equally with and/or junior to the Series B Preferred Stock with respect to the payment of dividends (whether such
dividends are cumulative or non-cumulative) and/or the distribution of assets upon liquidation, dissolution or winding-up of the
affairs of the Corporation will not be deemed to materially and adversely affect the special rights, preferences, privileges or
voting powers of the Series B Preferred Stock.
If any amendment, alteration,
repeal, share exchange, reclassification, merger or consolidation specified in this Section 8(c) would materially and adversely
affect the Series B Preferred Stock and one or more, but not all, series of Voting Preferred Stock (including the Series B Preferred
Stock for this purpose), then only the Series B Preferred Stock and such series of Voting Preferred Stock as are materially and
adversely affected by and entitled to vote shall vote on the matter together as a single class (in lieu of all other series of
Voting Preferred Stock).
(d)
CHANGES FOR CLARIFICATION. To the fullest extent permitted by law, without the consent of the holders of the Series B Preferred
Stock, so long as such action does not adversely affect the special rights, preferences, privileges and voting powers, and limitations
and restrictions thereof, of the Series B Preferred Stock, the Corporation may amend, alter, supplement or repeal any terms of
the Series B Preferred Stock for the following purposes:
(i)
to cure any ambiguity, omission, inconsistency or mistake in any such agreement or instrument;
(ii)
to make any provision with respect to matters or questions relating to the Series B Preferred Stock that is not inconsistent
with the provisions of this Certificate of Designations and that does not adversely affect the rights of any holder of the Series
B Preferred Stock; or
(iii)
to make any other change that does not adversely affect the rights of any holder of the Series B Preferred Stock (other
than any holder that consents to such change).
In addition, without
the consent of the holders of the Series B Preferred Stock, the Corporation may amend, alter, supplement or repeal any terms of
the Series B Preferred Stock to conform the terms of the Series B Preferred Stock to the description thereof in the related prospectus
as supplemented and/or amended by the “Description of the Series B Preferred Stock” section of the preliminary prospectus
supplement for the Series B Preferred Stock, as further supplemented and/or amended by the related pricing term sheet.
(e) CHANGES
AFTER PROVISION FOR REDEMPTION. No vote or consent of the holders of Series B Preferred Stock shall be required pursuant to Section
8(b) or 8(c) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such subsections,
all outstanding shares of Series B Preferred Stock shall have been redeemed, or shall have been called for redemption upon proper
notice and sufficient funds shall have been set aside for such redemption, in each case pursuant to Section 7 above.
(f) PROCEDURES
FOR VOTING AND CONSENTS. The rules and procedures for calling and conducting any meeting of the holders of Series B
Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and
use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a
meeting or such consents shall be governed by any rules the Board of Directors or a duly authorized committee of the Board of
Directors, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of
the Certificate of Incorporation, the By-Laws and applicable law. Whether the vote or consent of the holders of
a plurality, majority or other portion of the shares of Series B Preferred Stock and any Voting Preferred Stock has been
cast or given on any matter on which the holders of shares of Series B Preferred Stock are entitled to vote shall be
determined by the Corporation by reference to the specified liquidation amounts of the shares voted or covered by the
consent.
SECTION 9. RECORD HOLDERS.
To the fullest extent permitted by applicable law, the Corporation and the Transfer Agent for the Series B Preferred Stock may
deem and treat the record holder of any share of Series B Preferred Stock as the true and lawful owner thereof for all purposes,
and neither the Corporation nor such Transfer Agent shall be affected by any notice to the contrary.
SECTION 10. NOTICES.
All notices or communications in respect of Series B Preferred Stock shall be sufficiently given if given in writing and delivered
in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Designations, in the Certificate of Incorporation or By-Laws or by applicable law.
SECTION 11. NO PREEMPTIVE
RIGHTS. No share of Series B Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Corporation,
or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants,
rights or options, may be designated, issued or granted.
SECTION 12. NO OTHER
RIGHTS. The shares of Series B Preferred Stock shall not have any voting powers, preferences or relative, participating, optional
or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Certificate
of Incorporation or as provided by applicable law.
SECTION 13. NO CONVERSION
RIGHTS. The shares of Series A Preferred Stock shall not be convertible into any other class of stock.
SECTION 14. FORM.
(a)
CERTIFICATED SERIES B PREFERRED STOCK. The Series B Preferred Stock may be issued in the form of one or more definitive
shares in fully registered form in substantially the form attached to this Certificate of Designations as Exhibit A (“Certificated
Series B Preferred Stock”), which is incorporated in and expressly made a part of this Certificate of Designations. Each
Certificated Series B Preferred Stock shall reflect the number of shares of Series B Preferred Stock represented thereby, and may
have notations, legends, or endorsements required by law, stock exchange rules, agreements to which the Corporation is subject,
if any, or usage (provided that any such notation, legend, or endorsement is in a form acceptable to the Corporation). Each
Certificated Series B Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Corporation
in a written instrument to the Registrar.
(b) GLOBAL SERIES B PREFERRED STOCK. If The Depositary Trust Company or another depositary reasonably acceptable to the Corporation
(the “Global Depositary”) is willing to act as depositary for the Global Series B Preferred Stock, a holder
who is an Agent Member may request the Corporation to issue one or more shares of Series B Preferred Stock in global form with
the global legend (the “Global Legend”) as set forth on the form of Series B Preferred Stock certificate attached
to this Certificate of Designations as Exhibit A (“Global Series B Preferred Stock”), in exchange for the Certificated
Series B Preferred Stock held by such holder, with the same terms and of equal aggregate Liquidation Preference Amount. The Global
Series B Preferred Stock may have notations, legends, or endorsements required by law, stock exchange rules, agreements to which
the Corporation is subject, if any, or usage (provided that any such notation, legend, or endorsement is in a form acceptable to
the Corporation). Any Global Series B Preferred Stock shall be deposited on behalf of the holders of the Series B Preferred Stock
represented thereby with the Registrar, at the principal office of the Registrar at which at any particular time its registrar
business is administered, which is currently located at Equiniti Trust Company, 1110 Centre Pointe Curve, Suite 101, Mendota Heights,
MN 55120, as custodian for the Global Depositary, and registered in the name of the Global Depositary or a nominee of the Global
Depositary, duly executed by the Corporation and countersigned and registered by the Registrar as hereinafter provided. The aggregate
number of shares represented by each Global Series B Preferred Stock may from time to time be increased or decreased by adjustments
made on the records of the Registrar and the Global Depositary or its nominee as hereinafter provided. This Section 14(b)
shall apply only to Global Series B Preferred Stock deposited with or on behalf of the Global Depositary. The Corporation shall
execute and the Registrar shall, in accordance with this Section 14(b), countersign and deliver any Global Series B Preferred
Stock that (i) shall be registered in the name of Cede & Co. or other nominee of the Global Depositary and (ii) shall be delivered
by the Registrar to Cede & Co. or pursuant to instructions received from Cede & Co. or held by the Registrar as custodian
for the Global Depositary pursuant to an agreement between the Global Depositary and the Registrar. Members of, or participants
in, the Global Depositary (“Agent Members”) shall have no rights under this Certificate of Designations, with
respect to any Global Series B Preferred Stock held on their behalf by the Global Depositary or by the Registrar as the custodian
for the Global Depositary, or under such Global Series B Preferred Stock, and the Global Depositary may be treated by the Corporation,
the Registrar, and any agent of the Corporation or the Registrar as the absolute owner of such Global Series B Preferred Stock
for all purposes whatsoever.
Notwithstanding the
foregoing, nothing herein shall prevent the Corporation, the Registrar, or any agent of the Corporation or the Registrar from giving
effect to any written certification, proxy, or other authorization furnished by the Global Depositary or impair, as between the
Global Depositary and its Agent Members, the operation of customary practices of the Global Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Series B Preferred Stock. The holder of the Global Series B Preferred
Stock may grant proxies or otherwise authorize any Person to take any action that a holder is entitled to take pursuant to the
Global Series B Preferred Stock, this Certificate of Designations, or the Certificate of Incorporation. Owners of beneficial interests
in Global Series B Preferred Stock shall not be entitled to receive physical delivery of Certificated Series B Preferred Stock,
unless (x) the Global Depositary notifies the Corporation that it is unwilling or unable to continue as Global Depositary for the
Global Series B Preferred Stock and the Corporation does not appoint a qualified replacement for the Global Depositary within 90
days after such notice, (y) the Global Depositary ceases to be a “clearing agency” registered pursuant to Section 17A
of the Exchange Act when the depositary is required to be so registered and so notifies the Corporation, and the Corporation does
not appoint a qualified replacement for the Global Depositary within 90 days after such notice or (z) the Corporation in its sole
discretion and subject to the Global Depositary’s procedures determines that the Series B Preferred Stock shall be exchangeable
for Certificated Series B Preferred Stock. In any such case, the Global Series B Preferred Stock shall be exchanged in whole for
Certificated Series B Preferred Stock, with the same terms and of an equal aggregate Liquidation Preference Amount, and such Certificated
Series B Preferred Stock shall be registered in the name or names of the Person or Persons specified by the Global Depositary in
a written instrument delivered to the Transfer Agent and Registrar.
SECTION 15. CALCULATION
AGENT. Unless the Corporation has validly called all shares of the Series B Preferred Stock for redemption on the First Call Date,
the Corporation will appoint a banking institution or trust company as calculation agent with respect to the Series B Preferred
Stock prior to the Reset Dividend Determination Date preceding the First Call Date. If the Corporation is unable to appoint a calculation
agent using commercially reasonable efforts, the Corporation may appoint itself or an affiliate as calculation agent. The Corporation
may, in its sole discretion, remove the calculation agent in accordance with the agreement between the Corporation and the calculation
agent; provided that the Corporation shall appoint a successor calculation agent who shall accept such appointment
prior to the effectiveness of such removal. Upon any such removal or appointment, the Corporation shall send notice thereof in
accordance with Section 10 hereof.
[Remainder of Page Intentionally Left
Blank]
IN WITNESS WHEREOF,
DUKE ENERGY CORPORATION has caused this Certificate of Designations to be signed by its Assistant Corporate Secretary on this 11th
day of September, 2019.
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DUKE ENERGY CORPORATION
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By:
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/s/ Robert T. Lucas III
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Name:
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Robert T. Lucas III
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Title:
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Assistant Corporate Secretary
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[Signature Page to Series B Certificate of Designations]
Exhibit A
[FORM OF FACE
OF CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF ,
TO DUKE ENERGY CORPORATION OR EQUINITI TRUST COMPANY, AS TRANSFER AGENT (THE “TRANSFER AGENT”), AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
(AND ANY PAYMENT IS MADE TO ,
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF ),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER
HEREOF, , HAS AN INTEREST HEREIN.
TRANSFERS OF THIS [GLOBAL] SERIES B PREFERRED
STOCK SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS [GLOBAL] SERIES B PREFERRED STOCK SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN THE RELATED CERTIFICATE OF DESIGNATIONS. IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER
TO THE TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]
DUKE ENERGY CORPORATION
Incorporated under the laws of
the State of Delaware
4.875% SERIES B FIXED-RATE RESET CUMULATIVE
REDEEMABLE
PERPETUAL PREFERRED STOCK
CUSIP: 26441C BG9
ISIN: US26441CBG96
THIS CERTIFICATE
IS TRANSFERRABLE IN
NEW YORK, NY:
This is to certify
that is
the registered owner of shares
of fully paid and non-assessable 4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, $0.001 par
value and a liquidation preference of $1,000 per share of DUKE ENERGY CORPORATION, a Delaware corporation (the “Corporation”),
transferable on the books of the Corporation by the holder hereof, in person or by duly authorized attorney, upon surrender of
this Certificate properly endorsed. This Certificate is not valid unless countersigned and registered by the Transfer Agent and
Registrar.
Witness the facsimile
seal of the Corporation and the facsimile signatures of its duly authorized officers.
Dated:__________________
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DUKE ENERGY CORPORATION
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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[Impression of Corporation Seal]
Countersigned and registered
EQUINITI TRUST COMPANY
By:__________________________
Authorized Officer
[FORM OF REVERSE
OF CERTIFICATE]
DUKE ENERGY CORPORATION
The Corporation will
furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional
or special rights of each class of stock or series thereof of the Corporation and the qualifications, limitations or restrictions
of such preferences and/or rights. Such request should be addressed to the Corporation or the Transfer Agent.
The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according
to applicable laws or regulations:
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TEN COM -
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as tenants in common
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TEN ENT -
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as tenants by the entireties
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JT TEN -
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as joint tenants with rights of survivorship and not as tenants in common
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UNIF GIFT MIN ACT -
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Custodian
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(Cust)
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(Minor)
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under Uniform Gift to Minors Act
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(State)
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Additional abbreviations may also be used
though not in the above list.
For Value Received, the undersigned hereby sells, assigns and
transfers unto
(PLEASE INSERT
SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
(PLEASE PRINT
OR TYPEWRITE NAME AND ADDRESS,
INCLUDING ZIP CODE OF ASSIGNEE)
of the capital stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the
books of the within named Corporation with full power of substitution in the premises.
Dated:
NOTICE: THE SIGNATURE TO THE ASSIGNMENT
MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER.
Signature(s) Guaranteed:____________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
Exhibit 99.1
Execution Version
DUKE ENERGY CORPORATION
UNDERWRITING AGREEMENT
1,000,000 Shares of
4.875% Series B Fixed-Rate Reset Cumulative
Redeemable Perpetual Preferred Stock
September 9, 2019
Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Credit Suisse Securities (USA) LLC
Eleven Madison Avenue
New York, New York 10010
Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
As Representatives of the several Underwriters
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c/o
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Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
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Ladies and Gentlemen:
1. Introductory. DUKE ENERGY CORPORATION,
a Delaware corporation (the “Corporation”), confirms its agreement with Barclays Capital Inc., Credit Suisse
Securities (USA) LLC, Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC and each of the several Underwriters listed in
Schedule I hereto (collectively, the “Underwriters”), for whom you are acting as representatives (the “Representatives”),
with respect to the issue and sale by the Corporation, and the purchase by the Underwriters, acting severally and not jointly,
from the Corporation of an aggregate of 1,000,000 shares of the Corporation’s 4.875% Series B Fixed-Rate Reset Cumulative
Redeemable Perpetual Preferred Stock, par value $0.001 per share, with a liquidation preference of $1,000 per share (the “Shares”).
The terms of the Shares will be set forth in a certificate of designations (the “Certificate of Designations”)
to be filed by the Corporation with the Secretary of State of the State of Delaware.
The Corporation understands that the several
Underwriters propose to offer the Shares for sale upon the terms and conditions contemplated by (i) this Agreement and (ii) the
Base Prospectus, the Preliminary Prospectus and the Permitted Free Writing Prospectus (each, as defined below) issued at or prior
to the Applicable Time (as defined below) (such documents and information referred to in the foregoing subclause (ii) are collectively
referred to herein as the “Pricing Disclosure Package”).
2. Representations and Warranties of
the Corporation. The Corporation represents and warrants to, and agrees with, the several Underwriters that:
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(a)
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A registration statement, as amended (No. 333-213765), including a prospectus, relating to the Shares and certain other securities
has been filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933,
as amended (the “1933 Act”). Such registration statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, became effective upon filing with the Commission pursuant to Rule 462 of the rules and regulations
of the Commission under the 1933 Act (the “1933 Act Regulations”), and no stop order suspending the effectiveness
of such registration statement has been issued and no proceeding for that purpose or pursuant to Section 8A of the 1933 Act has
been initiated or threatened by the Commission (if prepared, any preliminary prospectus supplement specifically relating to the
Shares immediately prior to the Applicable Time included in such registration statement or filed with the Commission pursuant to
Rule 424(b) of the 1933 Act Regulations being hereinafter called a “Preliminary Prospectus”); the term “Registration
Statement” means the registration statement as deemed revised pursuant to Rule 430B(f)(1) of the 1933 Act Regulations
on the date of such registration statement’s effectiveness for purposes of Section 11 of the 1933 Act, as such section applies
to the Corporation and the Underwriters for the Shares pursuant to Rule 430B(f)(2) of the 1933 Act Regulations (the “Effective
Date”), including all exhibits thereto and including the documents incorporated by reference in the prospectus contained
in the Registration Statement at the time such part of the Registration Statement became effective; the term “Base Prospectus”
means the prospectus filed with the Commission on the date hereof by the Corporation; and the term “Prospectus”
means the Base Prospectus together with the prospectus supplement specifically relating to the Shares prepared in accordance with
the provisions of Rule 430B and promptly filed after execution and delivery of this Agreement pursuant to Rule 430B or Rule 424(b)
of the 1933 Act Regulations; any information included in such Prospectus that was omitted from the Registration Statement at the
time it became effective but that is deemed to be a part of and included in such registration statement pursuant to Rule 430B is
referred to as “Rule 430B Information;” and any reference herein to any Registration Statement, the Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein prior to the
date hereof; any reference to any amendment or supplement to the Preliminary Prospectus or Prospectus shall be deemed to refer
to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the “1934 Act”), and incorporated by reference in such Preliminary Prospectus
or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to
and include any annual report of the Corporation filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date
of the Registration Statement that is incorporated by reference in the Registration Statement. For purposes of this Agreement,
the term “Applicable Time” means 4:45 p.m. (New York City time) on the date hereof.
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(b)
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The Registration Statement, the Permitted Free Writing Prospectus specified on Schedule II hereto, the Preliminary Prospectus
and the Prospectus conform, and any amendments or supplements thereto will conform, in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations, and (A) the Registration Statement, as of its original effective date, as of the
date of any amendment and at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933
Act Regulations, and at the Time of Delivery, did not and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) (i) the Pricing
Disclosure Package, as of the Applicable Time, did not, (ii) the Prospectus and any amendment or supplement thereto, as of their
dates, will not, and (iii) the Prospectus as of the Time of Delivery will not, include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the Corporation makes no warranty or representation to the Underwriters with respect to
any statements or omissions made in reliance upon and in conformity with written information furnished to the Corporation by the
Representatives on behalf of the Underwriters specifically for use in the Registration Statement, the Permitted Free Writing Prospectus,
the Preliminary Prospectus or the Prospectus.
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(c)
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The Permitted Free Writing Prospectus specified on Schedule II hereto as of its issue date and at all subsequent times through
the completion of the public offer and sale of the Shares or until any earlier date that the Corporation notified or notifies the
Underwriters as described in Section 6(e) hereof did not, does not and will not include any information that conflicts with the
information (not superseded or modified as of the Effective Date) contained in the Registration Statement, the Preliminary Prospectus
or the Prospectus.
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(d)
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At the earliest time the Corporation or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)
of the 1933 Act Regulations) of the Shares, the Corporation was not an “ineligible issuer” as defined in Rule 405 of
the 1933 Act Regulations. The Corporation is, and was at the time of the initial filing of the Registration Statement, eligible
to use Form S-3 under the 1933 Act.
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(e)
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The documents and interactive data in eXtensible Business Reporting Language (“XBRL”) incorporated or deemed
to be incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, at the time they
were filed or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and,
when read together with the other information in the Prospectus, (a) at the time the Registration Statement became effective, (b)
at the Applicable Time and (c) at the Time of Delivery did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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(f)
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The compliance by the Corporation with all of the provisions of this Agreement and the Certificate of Designations has been
duly authorized by all necessary corporate action and the consummation of the transactions herein or therein contemplated, including
the issuance and sale of the Shares, and compliance by the Corporation with the terms and provisions hereof and thereof will not
conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Corporation or any of its Principal Subsidiaries
(as hereinafter defined) is a party or by which any of them or their respective property is bound or to which any of their properties
or assets is subject that would have a material adverse effect on the business, financial condition or results of operations of
the Corporation and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the amended
and restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), the amended
and restated By-Laws of the Corporation (the “By-Laws”) or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Corporation or its Principal Subsidiaries or any of their respective
properties that would have a material adverse effect on the business, financial condition or results of operations of the Corporation
and its subsidiaries, taken as a whole.
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(g)
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No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency
or body is required for the consummation by the Corporation of the transactions contemplated by this Agreement and the Certificate
of Designations in connection with the issuance of the Shares in accordance with the terms of the Certificate of Designations and
the issuance and sale of the Shares, except for (i) the approval of the North Carolina Utilities Commission, which has been received
as of the date of this Agreement and (ii) the filing of the Certificate of Designations with the Secretary of State of the State
of Delaware, and the registration under the 1933 Act of the Shares and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters.
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(h)
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This Agreement has been duly authorized, executed and delivered by the Corporation.
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(i)
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Each of Duke Energy Carolinas, LLC, a North Carolina limited liability company, Duke Energy Indiana, LLC, an Indiana limited
liability company, Progress Energy, Inc., a North Carolina corporation, Duke Energy Progress, LLC, a North Carolina limited liability
company, and Duke Energy Florida, LLC, a Florida limited liability company, is a “significant subsidiary” of the Corporation
within the meaning of Rule 1-02 of Regulation S-X under the 1933 Act (herein collectively referred to, along with Duke Energy Ohio,
Inc., an Ohio corporation, and Piedmont Natural Gas Company, Inc., a North Carolina corporation, as the “Principal Subsidiaries”).
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(j)
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The Shares, including the Certificate of Designations, have been duly authorized by the Corporation and, when the Shares have
been delivered and paid for in accordance with this Agreement at the Time of Delivery, will be validly issued, fully paid and nonassessable;
the Certificate of Designations sets forth the rights, preferences and priorities of the Shares and the holders of the Shares will
have the rights set forth in the Certificate of Designations upon filing with the Secretary of State in the State of Delaware;
the Shares and the Certificate of Designations will conform to the descriptions thereof contained in the Pricing Disclosure Package
and the Prospectus; and the stockholders of the Corporation have no statutory preemptive rights with respect to the Shares.
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(k)
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The Corporation’s authorized capital stock is as set forth in the Pricing Disclosure Package and the Prospectus and all
outstanding shares of common stock of the Corporation have been duly authorized and are validly issued, fully paid and nonassessable.
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(l)
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Any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument set forth on Schedule IV hereto or
filed or incorporated by reference as an exhibit to the Registration Statement or the Annual Report on Form 10-K of the Corporation
for the fiscal year ended December 31, 2018 or any subsequent Quarterly Report on Form 10-Q of the Corporation or any Current Report
on Form 8-K of the Corporation with an execution or a filing date after December 31, 2018, except to the extent that such agreement
is no longer in effect or to the extent that neither the Corporation nor any subsidiary of the Corporation is currently a party
to such agreement, are all indentures, mortgages, deeds of trust, loan agreements or other agreements or instruments that are material
to the Corporation.
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(m)
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The Corporation is not required to be qualified as a foreign corporation to transact business in Indiana, North Carolina, Ohio,
South Carolina and Florida.
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(n)
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Any pro forma financial statements of the Corporation and its subsidiaries and the related notes thereto incorporated by reference
in the Registration Statement, the Pricing Disclosure Package and the Prospectus have been prepared in accordance with the Commission’s
rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein.
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3. Purchase and Sale. Subject to
the terms and conditions set forth herein, the Corporation agrees to issue and sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Corporation, at a purchase price equal to $987.50 per Share,
the number of Shares set forth in Schedule I opposite the name of such Underwriter, plus any additional number of Shares which
such Underwriter may become obligated to purchase pursuant to the provisions of Section 9 hereof, subject, in each case, to
such adjustments among the Underwriters as the Representatives in their sole discretion shall make to eliminate any sales or purchases
of fractional Shares. The Underwriters hereby agree to make a payment to us in an amount equal to $2,500,000, including in respect
of expenses incurred by us in connection with the offering of the Shares.
4. Offering by the Underwriters.
It is understood that the several Underwriters propose to offer the Shares for sale to the public as set forth in the Pricing Disclosure
Package and the Prospectus. The Corporation acknowledges and agrees that the Underwriters may offer and sell Shares to or through
any affiliate of an Underwriter.
5. Payment and Delivery.
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(a)
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Payment for the Shares and the payment referred to in Section 3 herein shall be made by wire transfer in immediately available
funds to the account specified to the Representatives by the Corporation in connection with a closing at the offices of Hunton
Andrews Kurth LLP, 200 Park Avenue, 52nd Floor, New York, NY 10166, at 10:00 a.m., New York City time, on September 12, 2019, or
at such other time or place on the same or such other date, not later than the fifth Business Day thereafter, as the Representatives
and the Corporation may agree upon in writing. The time and date of such payment for the Shares is referred to herein as the “Time
of Delivery.” Payment for the Shares to be purchased at the Time of Delivery shall be made against delivery to the Representatives
for the respective accounts of the several Underwriters of the Shares to be purchased at the Time of Delivery, with any transfer
taxes payable in connection with the sale of such Shares duly paid by the Corporation. Delivery of the Shares shall be made through
the facilities of The Depository Trust Company (“DTC”) unless the Representatives shall otherwise instruct.
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(b)
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The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto shall be delivered at the offices
of Hunton Andrews Kurth LLP, 200 Park Avenue, 52nd Floor, New York, NY 10166, or at such other place as shall be mutually agreed
upon by you and the Corporation. For the purposes of this Section 5, “Business Day” shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York or Charlotte, North Carolina
are generally authorized or obligated by law or executive order to close.
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6. Covenants of the Corporation.
The Corporation covenants and agrees with the several Underwriters that:
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(a)
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The Corporation will cause the Preliminary Prospectus and the Prospectus to be filed pursuant to, and in compliance with, Rule
424(b) of the 1933 Act Regulations, and advise the Underwriters promptly of the filing of any amendment or supplement to the Registration
Statement, the Preliminary Prospectus or the Prospectus and of the institution by the Commission of any stop order proceedings
in respect of the Registration Statement, and will use its best efforts to prevent the issuance of any such stop order and to obtain
as soon as possible its lifting, if issued.
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(b)
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If at any time when a prospectus relating to the Shares (or the notice referred to in Rule 173(a) of the 1933 Act Regulations)
is required to be delivered under the 1933 Act any event occurs as a result of which the Pricing Disclosure Package or the Prospectus
as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary
at any time to amend the Pricing Disclosure Package or the Prospectus to comply with the 1933 Act, the Corporation promptly will
prepare and file with the Commission an amendment, supplement or an appropriate document pursuant to Section 13 or 14 of the 1934
Act which will correct such statement or omission or which will effect such compliance.
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(c)
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The Corporation, during the period when a prospectus relating to the Shares is required to be delivered under the 1933 Act,
will timely file all documents required to be filed with the Commission pursuant to Section 13 or 14 of the 1934 Act.
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(d)
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Without the prior consent of the Underwriters, the Corporation has not made and will not make any offer relating to the Shares
that would constitute a “free writing prospectus” as defined in Rule 405 of the 1933 Act Regulations, other than the
Permitted Free Writing Prospectus; each Underwriter, severally and not jointly, represents and agrees that, without the prior consent
of the Corporation, it has not made and will not make any offer relating to the Shares that would constitute a “free writing
prospectus” as defined in Rule 405 of the 1933 Act Regulations, other than the Permitted Free Writing Prospectus or a free
writing prospectus that is not required to be filed by the Corporation pursuant to Rule 433 of the 1933 Act Regulations (“Rule
433”); any such free writing prospectus (which shall include the pricing term sheet discussed in Section 6(e) below),
the use of which has been consented to by the Corporation and the Underwriters, is listed on Schedule II hereto and herein is called
the “Permitted Free Writing Prospectus.” The Corporation represents that it has treated or agrees that it will
treat the Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has
complied and will comply with the requirements of Rule 433 applicable to the Permitted Free Writing Prospectus, including timely
filing with the Commission where required, legending and record keeping.
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(e)
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The Corporation agrees to prepare a pricing term sheet specifying the terms of the Shares not contained in the Preliminary
Prospectus, substantially in the form of Schedule III hereto and approved by the Representatives on behalf of the Underwriters,
and to file such pricing term sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close
of business two business days after the date hereof.
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(f)
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The Corporation agrees that if at any time following the issuance of the Permitted Free Writing Prospectus any event occurs
as a result of which such Permitted Free Writing Prospectus would conflict with the information (not superseded or modified as
of the Effective Date) in the Registration Statement, the Pricing Disclosure Package or the Prospectus or would include an untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances then prevailing, not misleading, the Corporation will give prompt notice thereof to the Underwriters and,
if requested by the Underwriters, will prepare and furnish without charge to each Underwriter a free writing prospectus or other
document, the use of which has been consented to by the Underwriters, which will correct such conflict, statement or omission.
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(g)
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The Corporation will make generally available to its security holders, in each case as soon as practicable but not later than
60 days after the close of the period covered thereby, earnings statements (in form complying with the provisions of Rule 158 under
the 1933 Act, which need not be certified by independent certified public accountants unless required by the 1933 Act) covering
(i) a twelve-month period beginning not later than the first day of the Corporation’s fiscal quarter next following the Effective
Date of the Registration Statement and (ii) a twelve-month period beginning not later than the first day of the Corporation’s
fiscal quarter next following the date of this Agreement.
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(h)
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The Corporation will furnish to you, without charge, copies of the Registration Statement (four of which will include all exhibits
other than those incorporated by reference), the Pricing Disclosure Package and the Prospectus, and all amendments and supplements
to such documents, in each case as soon as available and in such quantities as you may reasonably request.
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(i)
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The Corporation will arrange or cooperate in arrangements, if necessary, for the qualification of the Shares for sale under
the laws of such jurisdictions as you designate and will continue such qualifications in effect so long as required for the distribution;
provided, however, that the Corporation shall not be required to qualify as a foreign corporation or to file any general consents
to service of process under the laws of any state where it is not now so subject.
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(j)
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The Corporation will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement and the printing of this Agreement and any Blue Sky Survey, (ii) the issuance
and delivery of the Shares, as specified herein, (iii) any fees associated with the filing of the Certificate of Designations with
the Secretary of State of the State of Delaware and the cost of preparing the Shares, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the Shares to the Underwriters, (iv) the fees and
disbursements of counsel for the Underwriters in connection with the qualification of the Shares under the securities laws of any
jurisdiction in accordance with the provisions of Section 6(i) hereof and in connection with the preparation of the Blue Sky Survey,
such fees not to exceed $5,000, (v) the printing and delivery to the Underwriters, in quantities as hereinabove referred to, of
copies of the Registration Statement and any amendments thereto, of the Preliminary Prospectus, of the Prospectus, of the Permitted
Free Writing Prospectus and any amendments or supplements thereto, (vi) any fees charged by independent rating agencies for rating
the Shares, (vii) any filing fee required by the Financial Industry Regulatory Authority, Inc., (viii) the costs of any depository
arrangements for the Shares with DTC or any successor depositary, (ix) any fees and expenses incurred in connection with the preparation
and filing of the Registration Statement relating to the Shares and, if applicable, any expenses and application fees related to
the listing of the Shares on the New York Stock Exchange and (x) the costs and expenses of the Corporation relating to investor
presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including,
without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior approval of the Corporation, travel and lodging expenses
of the Underwriters and officers of the Corporation and any such consultants, and the cost of any aircraft chartered in connection
with the road show; provided, however, the Underwriters shall reimburse a portion of the costs and expenses referred to in this
clause (x).
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(k)
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During a period of 30 days from the date of the Prospectus, the Corporation will not, without the prior written consent of
the Representatives, 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, lend or otherwise transfer, dispose of, directly or indirectly, any shares
of the Corporation’s securities that are substantially similar to the Shares or any securities convertible into or exercisable
or exchangeable for Shares.
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(l)
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The Corporation will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or
might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Corporation to
facilitate the sale or resale of the Shares or (ii) sell, bid for, or purchase the Shares to be issued and sold pursuant to this
Agreement, or pay anyone any compensation for soliciting purchases of the Shares to be issued and sold pursuant to this Agreement
other than the Underwriters.
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7. Conditions of the Obligations of the
Underwriters. The obligations of the several Underwriters to purchase and pay for the Shares at the Time of Delivery are subject
to the accuracy of the representations and warranties on the part of the Corporation herein, to the accuracy of the statements
of officers of the Corporation made pursuant to the provisions hereof, to the performance by the Corporation of its obligations
hereunder and to the following additional conditions precedent:
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(a)
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The Prospectus shall have been filed by the Corporation with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for filing by the 1933 Act Regulations and in accordance herewith and the Permitted Free Writing Prospectus shall
have been filed by the Corporation with the Commission within the applicable time periods prescribed for such filings by, and otherwise
in compliance with, Rule 433.
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(b)
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At or after the Applicable Time and prior to the Time of Delivery, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose or pursuant to Section 8A of the 1933 Act shall have been
instituted or, to the knowledge of the Corporation or you, shall be threatened by the Commission.
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(c)
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At or after the Applicable Time and prior to the Time of Delivery, the rating assigned by Moody’s Investors Service,
Inc., S&P Global Ratings or Fitch Ratings, Inc. (or any of their successors) to any debt securities or preferred stock of the
Corporation as of the date of this Agreement shall not have been lowered.
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(d)
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Since the respective most recent dates as of which information is given in the Pricing Disclosure Package and the Prospectus
and up to the Time of Delivery, there shall not have been any material adverse change in the condition of the Corporation, financial
or otherwise, except as reflected in or contemplated by the Pricing Disclosure Package and the Prospectus, and, since such dates
and up to the Time of Delivery, there shall not have been any material transaction entered into by the Corporation other than transactions
contemplated by the Pricing Disclosure Package and the Prospectus and transactions in the ordinary course of business, the effect
of which in your reasonable judgment is so material and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner contemplated by the Pricing Disclosure Package and
the Prospectus.
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(e)
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The Representatives shall have received an opinion of Robert T. Lucas III, Esq., Deputy General Counsel of Duke Energy Business
Services LLC (who in such capacity provides legal services to the Corporation), the service company subsidiary of the Corporation,
or other appropriate counsel reasonably satisfactory to the Representatives (which may include the Corporation’s other “in-house”
counsel), dated the Time of Delivery, to the effect that:
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(i)
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Each of Duke Energy Ohio, Inc., Progress Energy, Inc., and Piedmont Natural Gas Company, Inc. has been duly incorporated and
is validly existing in good standing under the laws of the jurisdiction of its incorporation and has the respective corporate power
and authority and foreign qualifications necessary to own its properties and to conduct its business as described in the Pricing
Disclosure Package and the Prospectus. Each of Duke Energy Carolinas, LLC, Duke Energy Florida, LLC, Duke Energy Indiana, LLC and
Duke Energy Progress, LLC has been duly organized and is validly existing and in good standing as a limited liability company under
the laws of the State of North Carolina, the State of Florida, the State of Indiana and the State of North Carolina, respectively,
and has full limited liability company power and authority necessary to own its properties and to conduct its business as described
in the Pricing Disclosure Package and the Prospectus.
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(ii)
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Each of the Corporation and the Principal Subsidiaries is duly qualified to do business in each jurisdiction in which the ownership
or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify,
considering all such cases in the aggregate, does not have a material adverse effect on the business, properties, financial condition
or results of operations of the Corporation and its subsidiaries taken as a whole.
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(iii)
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The Registration Statement became effective upon filing with the Commission pursuant to Rule 462 of the 1933 Act Regulations,
and, to the best of such counsel’s knowledge, no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are pending or threatened under the 1933 Act.
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(iv)
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The descriptions in the Registration Statement, the Pricing Disclosure Package and the Prospectus of any legal or governmental
proceedings are accurate and fairly present the information required to be shown, and such counsel does not know of any litigation
or any legal or governmental proceeding instituted or threatened against the Corporation or any of its Principal Subsidiaries or
any of their respective properties that would be required to be disclosed in the Registration Statement, the Pricing Disclosure
Package or the Prospectus and is not so disclosed.
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(v)
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This Agreement has been duly authorized, executed and delivered by the Corporation.
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(vi)
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The execution and filing of the Certificate of Designations have been duly authorized by the Corporation, and the Certificate
of Designations has been duly executed and filed with the Secretary of State of the State of Delaware.
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(vii)
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The execution, delivery and performance by the Corporation of this Agreement and the Certificate of Designations, and the consummation
by the Corporation of the transactions contemplated hereby and thereby, including the issuance and sale of the Shares and compliance
by the Corporation with all of the provisions of this Agreement and the Certificate of Designations, will not violate or contravene
any of the provisions of the Certificate of Incorporation or By-Laws of the Corporation or any statute or any order, rule or regulation
of which such counsel is aware of any court or governmental agency or body having jurisdiction over the Corporation or any of its
Principal Subsidiaries or any of their respective property, nor will such action conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Corporation or any of its Principal Subsidiaries is a party or by which
any of them or their respective property is bound or to which any of its property or assets is subject which affects in a material
way the Corporation’s ability to perform its obligations under this Agreement or the Certificate of Designations.
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(viii)
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No consent, approval, authorization, order, registration or qualification is required to authorize, or for the Corporation
to consummate the transactions contemplated by this Agreement or the Certificate of Designations, except for such consents, approvals,
authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and except as required in (i) Condition 7.6 of the order of the North
Carolina Utilities Commission dated September 29, 2016, in Docket Nos. E-7, Sub 1100, E-2, Sub 1095, and G-9, Sub 682 and (ii)
Condition 7.6(b) of the orders of the Public Service Commission of South Carolina dated July 11, 2012 and November 2, 2016, in
Docket No. 2011-158-E, which conditions have been complied with.
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(ix)
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The Shares have been duly authorized by the Corporation and when the Shares have been issued and delivered in accordance with
this Agreement at the Time of Delivery, will be validly issued, fully paid and nonassessable; the Certificate of Designations
will conform, as to legal matters, in all material respects to the descriptions thereof contained in the Pricing Disclosure Package
and the Prospectus; and the stockholders of the Corporation have no statutory preemptive rights with respect to the Shares.
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(x)
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The Shares conform as to legal matters in all material respects to the descriptions thereof in (i) the Base Prospectus under
the captions “Description of Preferred Stock” and (ii) the Pricing Disclosure Package and the Prospectus under the
captions “Description of the Series B Preferred Stock.”
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(xi)
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The Corporation’s authorized capital stock is as set forth in the Pricing Disclosure Package and the Prospectus and all
outstanding shares of common stock of the Corporation have been duly authorized and are validly issued, fully paid and nonassessable.
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Such counsel may state that his opinion
in paragraph (ix) is subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). Such counsel shall state that nothing has come to his attention
that has caused him to believe that each document incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, when filed, was not, on its face, appropriately responsive, in all material respects, to the requirements
of the 1934 Act and the 1934 Act Regulations. Such counsel shall also state that nothing has come to his attention that has caused
him to believe that (i) the Registration Statement, including the Rule 430B Information, as of its effective date and at each deemed
effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933 Act Regulations, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Pricing Disclosure Package at the Applicable Time contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading or (iii) that the Prospectus, as of its date or the Time of Delivery, contained or contains any
untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. Such counsel may also state that, except as otherwise
expressly provided in such opinion, he does not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in or incorporated by reference into the Registration Statement, the Pricing Disclosure Package or the Prospectus and
does not express any opinion or belief as to (i) the financial statements or other financial and accounting data contained or incorporated
by reference therein or excluded therefrom, including XBRL interactive data or (ii) the information in the Prospectus under the
caption “Book-Entry System.”
In rendering the foregoing opinion, such
counsel may state that he does not express any opinion concerning any law other than the law of the State of North Carolina or,
to the extent set forth in the foregoing opinions, the federal securities laws and may rely as to all matters of the laws of the
States of South Carolina, Ohio, Indiana and Florida on appropriate counsel reasonably satisfactory to the Representatives, which
may include the Corporation’s other “in-house” counsel). Such counsel may also state that he has relied as to
certain factual matters on information obtained from public officials, officers of the Corporation and other sources believed by
him to be reliable.
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(f)
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The Representatives shall have received an opinion or opinions of Hunton Andrews Kurth LLP, counsel to the Corporation, dated
the Time of Delivery, to the effect that:
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(i)
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The Corporation has been duly incorporated and is a validly existing corporation in good standing
under the laws of the State of Delaware.
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(ii)
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The Corporation has the corporate power and corporate authority to execute and deliver this Agreement and the Certificate of
Designations and to consummate the transactions contemplated hereby and thereby.
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(iii)
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This Agreement has been duly authorized, executed and delivered by the Corporation.
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(iv)
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The execution and delivery by the Corporation of this Agreement and the Certificate of Designations do not and the performance
of the Corporation’s obligations thereunder, including the issuance and sale of the Shares hereunder and thereunder, will
not (i) conflict with the Corporation’s Certificate of Incorporation or By-Laws, (ii) constitute a violation of, or a breach
of or default under, the terms of any of the contracts set forth on Schedule IV hereto or (iii) violate or conflict with, or result
in any contravention of, any Applicable Law. “Applicable Law” means the General Corporation Law of the State
of Delaware and those laws, rules and regulations of the States of New York and North Carolina and those federal laws, rules and
regulations of the United States of America, in each case that, in such counsel’s experience, are normally applicable to
transactions of the type contemplated by this Agreement (other than the United States federal securities laws, state securities
or Blue Sky laws, antifraud laws and the rules and regulations of the Financial Industry Regulatory Authority, Inc., the North
Carolina Public Utilities Act, the rules and regulations of the North Carolina Utilities Commission and the New York State Public
Service Commission and the New York State Public Service Law), but without our having made any special investigation as to the
applicability of any specific law, rule or regulation.
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(v)
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No Governmental Approval, which has not been obtained or taken and is not in full force and effect, is required to authorize,
or is required for, the execution or delivery of this Agreement and the Certificate of Designations by the Corporation or the consummation
by the Corporation of the transactions contemplated hereby or thereby, including the issuance and sale of the Shares, except for
(A) registration of the Shares under the 1933 Act, (B) such consents, approvals, authorizations, orders, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Shares by the
Underwriters and (C) the filing of the Certificate of Designations with the Secretary of the State of Delaware. “Governmental
Approval” means any consent, approval, license, authorization or validation of, or filing, qualification or registration
with, any Governmental Authority required to be made or obtained by the Corporation pursuant to Applicable Laws, other than any
consent, approval, license, authorization, validation, filing, qualification or registration that may have become applicable as
a result of the involvement of any party (other than the Corporation) in the transactions contemplated by this Agreement or because
of such parties’ legal or regulatory status or because of any other facts specifically pertaining to such parties and “Governmental
Authority” means any court, regulatory body, administrative agency or governmental body of the State of North Carolina,
the State of New York or the State of Delaware or the United States of America having jurisdiction over the Corporation under Applicable
Law but excluding the North Carolina Utilities Commission, the New York Public Service Commission and the Delaware Public Service
Commission.
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(vi)
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The Shares have been duly authorized by the Corporation and when the Shares have been issued and delivered in accordance with
this Agreement at the Time of Delivery, will be validly issued, fully paid and nonassessable; there are no preemptive rights
under federal or New York law or under the General Corporation Law of the State of Delaware to subscribe for or to purchase Shares;
there are no preemptive or other similar rights to subscribe for or to purchase Shares pursuant to the Certificate of Incorporation
or By-Laws of the Corporation or any agreement or other instrument filed or incorporated by reference therein, or as an exhibit
to, the Registration Statement.
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(vii)
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The Corporation is not and, solely after giving effect to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be subject to registration and regulation as an “investment company,”
as such term is defined in the Investment Company Act of 1940, as amended.
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(viii)
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The statements set forth in the Pricing Disclosure Package and the Prospectus under the caption “Underwriting (Conflicts
of Interest),” insofar as such statements purport to summarize certain provisions of this Agreement, fairly summarize such
provisions in all material respects.
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(ix)
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The statements set forth (i) under the caption “Description of Preferred Stock” that is included in the Base Prospectus
and (ii) under the caption “Description of the Series B Preferred Stock” in the Pricing Disclosure Package and the
Prospectus, insofar as such statements purport to summarize the terms of the Shares, fairly summarize such terms in all material
respects.
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(x)
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The statements set forth under the caption “Material U.S. Federal Income Tax Considerations,” in the Pricing Disclosure
Package and the Prospectus insofar as they purport to constitute summaries of matters of United States federal income tax law,
constitute accurate and complete summaries, in all material respects, subject to the qualifications set forth therein.
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The Representatives
shall also have received a statement of Hunton Andrews Kurth LLP, dated the Time of Delivery, to the effect that:
(i) no facts have come to such counsel’s
attention that have caused such counsel to believe that the documents filed by the Corporation under the 1934 Act and the 1934
Act Regulations that are incorporated by reference in the Preliminary Prospectus Supplement that forms a part of the Pricing Disclosure
Package and the Prospectus, when filed, were not, on their face, appropriately responsive in all material respects to the requirements
of the 1934 Act and the 1934 Act Regulations (except that in each case such counsel need not express any view as to the financial
statements, schedules and other financial and accounting information included or incorporated by reference therein or excluded
therefrom or compliance with XBRL interactive data requirements) (ii) the Registration Statement, at the Applicable Time and the
Prospectus, as of its date, appeared on their face to be appropriately responsive in all material respects to the requirements
of the 1933 Act and the 1933 Act Regulations (except that in each case such counsel need not express any view as to the financial
statements, schedules and other financial and accounting information included or incorporated by reference therein or excluded
therefrom or compliance with XBRL interactive data requirements) and (iii) no facts have come to such counsel’s attention
that have caused such counsel to believe that the Registration Statement, at the Applicable Time, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date and as of the Time of Delivery, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (except that in each case such counsel need not express any view
as to the financial statements, schedules and other financial and accounting information included or incorporated by reference
therein or excluded therefrom, including XBRL interactive data). Such counsel shall further state that, in addition, no facts have
come to such counsel’s attention that have caused such counsel to believe that the Pricing Disclosure Package, as of the
Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading (except that such counsel
need not express any view as to the financial statements, schedules and other financial and accounting information included or
incorporated by reference therein or excluded therefrom, or compliance with XBRL interactive data requirements).
In addition, such statement shall confirm
that the Prospectus has been filed with the Commission within the time period required by Rule 424 of the 1933 Act Regulations
and any required filing of the Permitted Free Writing Prospectus pursuant to Rule 433 has been filed with the Commission within
the time period required by Rule 433(d) of the 1933 Act Regulations. Such statement shall further state that, assuming the accuracy
of the representations and warranties of the Corporation set forth in Section 2 hereof, the Registration Statement became effective
upon filing with the Commission pursuant to Rule 462 of the 1933 Act Regulations, and that based solely on such counsel’s
review of the Commission’s website, no stop order suspending the effectiveness of the Registration Statement has been issued
and, to such counsel’s knowledge, no proceedings for that purpose have been instituted or are pending or threatened by the
Commission.
Hunton Andrews Kurth LLP may state that
its opinion in paragraph (viii) is subject to the effects of bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law). In addition, such counsel may state that it has relied as to certain factual matters on information
obtained from public officials, officers and representatives of the Corporation and that the signatures on all documents examined
by them are genuine, assumptions which such counsel have not independently verified.
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(g)
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The Representatives shall have received an opinion of Sidley Austin LLP, counsel for the Underwriters, dated the Time of Delivery,
with respect to the validity of the Shares, the Registration Statement, the Pricing Disclosure Package and the Prospectus, as amended
or supplemented, and such other related matters as you may require, and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such matters.
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(h)
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On or after the Applicable Time, there shall not have occurred any of the following: (i) a suspension or material limitation
in trading in securities generally or of the securities of the Corporation, on the New York Stock Exchange; or (ii) a general moratorium
on commercial banking activities in New York declared by either Federal or New York State authorities or a material disruption
in commercial banking services or securities settlement or clearance services in the United States; or (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect
of any such event specified in this subsection (h) in your reasonable judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at the Time of Delivery on the terms and in the manner contemplated
in the Pricing Disclosure Package and the Prospectus. In such event there shall be no liability on the part of any party to any
other party except as otherwise provided in Section 8 hereof and except for the expenses to be borne by the Corporation as provided
in Section 6(k) hereof.
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(i)
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The Representatives shall have received a certificate of the Chairman of the Board, the President, any Vice President, the
Secretary or an Assistant Secretary and any financial or accounting officer of the Corporation, dated the Time of Delivery, in
which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties
of the Corporation in this Agreement are true and correct as of the Time of Delivery, that the Corporation has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Time of Delivery, that the
conditions specified in Section 7(c) and Section 7(d) hereof have been satisfied, and that no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened by the
Commission.
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(j)
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At the time of the execution of this Agreement, the Representatives shall have received a letter dated such date, in form and
substance satisfactory to the Representatives, from Deloitte & Touche LLP, the Corporation’s independent registered public
accounting firm, containing statements and information of the type ordinarily included in accountants’ “comfort letters”
to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference
into the Registration Statement, the Pricing Disclosure Package and the Prospectus, including specific references to inquiries
regarding any increase in long-term debt (excluding current maturities), decrease in net current assets (defined as current assets
less current liabilities) or shareholders’ equity, change in the Corporation’s common stock, and decrease in operating
revenues or net income for the period subsequent to the latest financial statements incorporated by reference in the Registration
Statement when compared with the corresponding period from the preceding year, as of a specified date not more than three business
days prior to the date of this Agreement.
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(k)
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At the Time of Delivery, you shall have received from Deloitte & Touche LLP, a letter, dated the Time of Delivery, to the
effect that such accountants reaffirm the statements made in the letter furnished pursuant to subsection (j) of this Section 7,
except that the specified date referred to shall be a date not more than three business days prior to the Time of Delivery.
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(l)
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The Shares shall be eligible for clearance and settlement through DTC.
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(m)
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The Certificate of Designations shall have been filed on or before the Time of Delivery with the Secretary of State of the
State of Delaware.
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(n)
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The Corporation will furnish you with such conformed copies of such opinions, certificates, letters and documents as you reasonably
request.
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8. Indemnification. (a) The Corporation
agrees to indemnify and hold harmless each Underwriter, their respective officers, directors and selling agents, and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act, as follows:
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(i)
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against any and all loss, liability, claim, damage and expense whatsoever arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any amendment thereto) including the Rule 430B Information,
or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Preliminary
Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto), any Permitted Free Writing
Prospectus, any issuer free writing prospectus as defined in Rule 433 or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading,
unless such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with written
information furnished to the Corporation by the Representatives on behalf of the Underwriters expressly for use in the Registration
Statement (or any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment
or supplement thereto) or any Permitted Free Writing Prospectus;
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(ii)
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against any and all loss, liability, claim, damage and expense whatsoever to the extent of the aggregate amount paid in settlement
of any litigation, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission or any
such alleged untrue statement or omission, if such settlement is effected with the written consent of the Corporation; and
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(iii)
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against any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under (i) or (ii) of this Section 8.
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In no case shall the Corporation be liable under this indemnity
agreement with respect to any claim made against any Underwriter or any such controlling person unless the Corporation shall be
notified in writing of the nature of the claim within a reasonable time after the assertion thereof, but failure so to notify the
Corporation shall not relieve it from any liability which it may have otherwise than under subsections 8(a) and 8(b). The Corporation
shall be entitled to participate at its own expense in the defense, or, if it so elects, within a reasonable time after receipt
of such notice, to assume the defense of any suit brought to enforce any such claim, but if it so elects to assume the defense,
such defense shall be conducted by counsel chosen by it and approved by the Underwriter or Underwriters or controlling person or
persons, or defendant or defendants in any suit so brought, which approval shall not be unreasonably withheld. In any such suit,
any Underwriter or any such controlling person shall have the right to employ its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person unless (i) the Corporation and such Underwriter
shall have mutually agreed to the employment of such counsel, or (ii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and the Corporation and such Underwriter or such controlling
person shall have been advised by such counsel that a conflict of interest between the Corporation and such Underwriter or such
controlling person may arise and for this reason it is not desirable for the same counsel to represent both the indemnifying party
and also the indemnified party (it being understood, however, that the Corporation shall not, in connection with any one such action
or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters
and all such controlling persons, which firm shall be designated in writing by you). The Corporation agrees to notify you within
a reasonable time of the assertion of any claim against it, any of its officers or directors or any person who controls the Corporation
within the meaning of Section 15 of the 1933 Act, in connection with the sale of the Shares.
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(b)
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Each Underwriter, severally and not jointly, agrees that it will indemnify and hold harmless the Corporation, its directors
and each of the officers of the Corporation who signed the Registration Statement and each person, if any, who controls the Corporation
within the meaning of Section 15 of the 1933 Act to the same extent as the indemnity contained in subsection (a) of this Section,
but only with respect to statements or omissions made in the Registration Statement (or any amendment thereto), the Preliminary
Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or any Permitted Free Writing
Prospectus, in reliance upon and in conformity with written information furnished to the Corporation by the Representatives on
behalf of the Underwriters expressly for use in the Registration Statement (or any amendment thereto), the Preliminary Prospectus,
the Pricing Disclosure Package, the Prospectus (or any amendment or supplement thereto) or any Permitted Free Writing Prospectus.
In case any action shall be brought against the Corporation or any person so indemnified based on the Registration Statement (or
any amendment thereto), the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus (or any amendment or supplement
thereto) or any Permitted Free Writing Prospectus and in respect of which indemnity may be sought against any Underwriter, such
Underwriter shall have the rights and duties given to the Corporation, and the Corporation and each person so indemnified shall
have the rights and duties given to the Underwriters by the provisions of subsection (a) of this Section.
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(c)
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No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding and does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified party.
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(d)
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If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party
in respect of any and all loss, liability, claim, damage, and expense whatsoever (or actions in respect thereof) that would otherwise
have been indemnified under the terms of such indemnity, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of such loss, liability, claim, damage or expense (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Corporation on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the notice required above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Corporation on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such loss, liability, claim, damage or expense (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative benefits received by the Corporation on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Corporation bear to the total compensation received by the Underwriters in respect of the underwriting
discount as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Corporation on the one hand or the Underwriters on the other and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Corporation
and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were determined by
pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in this Section. The amount paid or payable by an
indemnified party as a result of the losses, liabilities, claims, damages, or expenses (or actions in respect thereof) referred
to above in this Section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section, no Underwriter
shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by
it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute are several in proportion
to their respective underwriting obligations and not joint.
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9. Default by One or More of the Underwriters.
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(a)
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If any Underwriter shall default in its obligation to purchase the number of Shares which it has agreed to purchase hereunder
at the Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on
the terms contained herein. If within twenty-four hours after such default by any Underwriter you do not arrange for the purchase
of such Shares, then the Corporation shall be entitled to a further period of twenty-four hours within which to procure another
party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Corporation that you have so arranged for the purchase of such Shares, or the Corporation notifies you
that it has so arranged for the purchase of such Shares, you or the Corporation shall have the right to postpone the Time of Delivery
for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration
Statement, the Pricing Disclosure Package or the Prospectus, or in any other documents or arrangements, and the Corporation agrees
to file promptly any amendments to the Registration Statement, the Pricing Disclosure Package or the Prospectus which may be required.
The term “Underwriter” as used in this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with respect to such Shares.
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(b)
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If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you
or the Corporation as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not
exceed one-tenth of the aggregate number of all the Shares to be purchased at the Time of Delivery, then the Corporation shall
have the right to require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter agreed to purchase
hereunder at the Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based
on the number of Shares which such Underwriter agreed to purchase hereunder at the Time of Delivery) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
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(c)
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If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you
or the Corporation as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-tenth
of the aggregate number of all the Shares to be purchased at the Time of Delivery, or if the Corporation shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or
the Corporation, except for the expenses to be borne by the Corporation as provided in Section 6(k) hereof and the indemnity and
contribution agreement in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.
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10.
Survival. The respective indemnities, rights of contribution, agreements, representations, warranties and other statements
of the Corporation or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any
Underwriter or the Corporation, or any of its officers or directors or any controlling person, and shall survive delivery of and
payment for the Shares.
11.
Reliance on Your Acts. In all dealings hereunder, the Representatives shall act on behalf of each of the Underwriters,
and the Corporation shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by the Representatives.
12.
No Fiduciary Relationship. The Corporation acknowledges and agrees that (i) the purchase and sale of the Shares pursuant
to this Agreement is an arm’s-length commercial transaction between the Corporation on the one hand, and the Underwriters
on the other hand, (ii) in connection with the offering contemplated hereby and the process leading to such transaction, each Underwriter
is and has been acting solely as a principal and is not the agent or fiduciary of the Corporation or its shareholders, creditors,
employees, or any other party, (iii) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor
of the Corporation with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Corporation on other matters) and no Underwriter has any obligation to the
Corporation with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (iv)
the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ
from those of the Corporation, and (v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with
respect to the transaction contemplated hereby and the Corporation has consulted its own legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.
13.
Recognition of the U.S. Special Resolution Regimes.
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(i)
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In the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to
a proceeding under a U.S. Special Resolution Regime (as defined below), the transfer from such Underwriter of this Agreement, and
any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective
under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of
the United States or a state of the United States.
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(ii)
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In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate (as defined below)
of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under
this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default
Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States
or a state of the United States.
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As used in this Section 13:
“BHC Act Affiliate”
has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. §
1841(k).
“Covered Entity”
means any of the following:
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(i)
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a “covered entity” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 252.82(b);
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(ii)
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a “covered bank” as that term is defined in, and interpreted in accordance with, 12
C.F.R. § 47.3(b); or
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(iii)
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a “covered FSI” as that term is defined in, and interpreted in accordance with, 12
C.F.R. § 382.2(b).
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“Default Right” has
the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1,
as applicable.
“U.S. Special Resolution
Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II
of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
14.
Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed or telecopied
and confirmed to Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate Registration (Fax no.:
(646) 834-8133); Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010, Attention: IBCM-Legal (Fax
no.: (212) 743-1953); Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, Attention: Registration Department;
J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention: Equity Syndicate Desk; or, if sent to the
Corporation, will be mailed or telecopied and confirmed to it at 550 S. Tryon Street, Charlotte, North Carolina 28202, (Fax no.:
(980) 373-3699), attention of Assistant Treasurer; provided, however, that any notice to an Underwriter pursuant to Section 8
hereof shall be delivered or sent by mail or telecopy to such Underwriter at its address or telecopy number set forth in its Underwriters’
Questionnaire or telex constituting such Questionnaire, which address or telecopy number will be supplied to the Corporation by
the Representatives. Any such communications shall take effect upon receipt thereof.
15.
Business Day. As used herein, the term “business day” shall mean any day when the Commission’s
office in Washington, D.C. is open for business.
16.
Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Corporation
and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons, officers
and directors referred to in Section 8 hereof and their respective successors, heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and their respective
successors and said controlling persons, officers and directors and their respective successors, heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of Shares from any Underwriter shall be deemed to be
a successor or assign by reason merely of such purchase.
17.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same instrument.
18.
Applicable Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall
be governed by, and construed in accordance with, the laws of the State of New York.
If the foregoing is in accordance with
your understanding, kindly sign and return to us two counterparts hereof, and upon confirmation and acceptance by the Underwriters,
this letter and such confirmation and acceptance will become a binding agreement between the Corporation, on the one hand, and
each of the Underwriters, on the other hand, in accordance with its terms.
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Very truly yours,
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DUKE ENERGY CORPORATION
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By:
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/s/ John L. Sullivan, III
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Name: John L. Sullivan, III
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Title: Assistant Treasurer
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[Remainder of Page Intentionally
Left Blank]
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Confirmed and accepted as of the date first
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above written.
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Barclays Capital Inc.
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By:
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/s/ Andrew N. Pocius
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Name: Andrew N. Pocius
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Title: Managing Director
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Credit Suisse Securities (USA) LLC
|
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By:
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/s/ Nevin Bhatia
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Name: Nevin Bhatia
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Title: Managing Director
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Goldman Sachs & Co. LLC
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By:
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/s/ Adam Greene
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Name: Adam Greene
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Title: Managing Director
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J.P. Morgan Securities LLC
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By:
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/s/ Robert Bottamedi
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Name: Robert Bottamedi
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Title: Executive Director
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On behalf of themselves and each of the Underwriters listed
on Schedule I hereto.
SCHEDULE I
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Underwriter
|
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Total Number of
Shares to be
Purchased
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Barclays Capital Inc.
|
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230,000
|
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Credit Suisse Securities (USA) LLC
|
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230,000
|
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Goldman Sachs & Co. LLC
|
|
|
230,000
|
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J.P. Morgan Securities LLC
|
|
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230,000
|
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Regions Securities LLC
|
|
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23,000
|
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Santander Investment Securities Inc.
|
|
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23,000
|
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The Williams Capital Group, L.P.
|
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23,000
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CastleOak Securities, L.P.
|
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3,700
|
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Drexel Hamilton, LLC
|
|
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3,700
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Siebert Cisneros Shank & Co., L.L.C.
|
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3,600
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Total Shares
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1,000,000
|
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SCHEDULE II
Pricing Disclosure Package
1) Base
Prospectus
2) Preliminary
Prospectus Supplement dated September 9, 2019
3) Permitted
Free Writing Prospectus
a) Pricing
Term Sheet attached as Schedule III hereto
SCHEDULE III
Filed pursuant to Rule 433
September 9, 2019
Relating to
Preliminary Prospectus Supplement dated
September 9, 2019
to
Prospectus dated March 25, 2019
Registration Statement No. 333-213765
DUKE ENERGY CORPORATION
1,000,000 Shares of
4.875% Series B Fixed-Rate Reset Cumulative
Redeemable Perpetual Preferred Stock
(Liquidation Preference of $1,000 Per
Share)
Pricing Term Sheet
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Issuer:
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Duke Energy Corporation (the “Issuer”)
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Security:
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4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share (“Preferred Stock”).
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Liquidation Preference:
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$1,000 per share of Preferred Stock
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Size:
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$1,000,000,000
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Term:
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Perpetual
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Dividend Rate:
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The initial dividend rate for the Preferred Stock from and including the date of original issue to, but excluding, September 16, 2024 (the “First Call Date”) will be 4.875% per annum of the $1,000 liquidation preference per share of Preferred Stock. On and after the First Call Date, the dividend rate on the Preferred Stock for each Reset Period (as defined herein) will be equal to the Five-year U.S. Treasury Rate (as defined herein) as of the most recent Reset Dividend Determination Date (as defined herein) plus a spread of 3.388%.
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Dividend Payment Dates:
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March 16 and September 16, commencing on March 16, 2020
A pro-rated initial dividend on the Preferred
Stock will be payable on March 16, 2020 in an amount equal to approximately $24.9167 per share of Preferred Stock, when, as and
if declared by the Board or any duly authorized committee of the Board.
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Trade Date:
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September 9, 2019
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Settlement Date:
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September 12, 2019 (T+3)
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Optional
Redemption:
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The
Issuer may, at its option, redeem the Preferred Stock:
· in
whole or in part, from time to time, on the First Call Date or on any subsequent Reset Date (as defined herein) at a redemption
price in cash equal to $1,000 per share of Preferred Stock; or
· in
whole but not in part, at any time within 120 days after the conclusion of any review or appeal process instituted by the Issuer
following the occurrence of a Ratings Event (as defined herein), at a redemption price in cash equal to $1,020 per share of Preferred
Stock (102% of the liquidation preference of $1,000 per share),
plus, in each case,
all accumulated and unpaid dividends (whether or not declared) to, but excluding, such redemption date.
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Public Offering Price:
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$1,000 per share of Preferred Stock
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Underwriting Discount:**
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$12.50 per share of Preferred Stock
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No Listing:
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The Issuer does not intend to apply to list the Preferred Stock on any securities exchange.
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Joint Book-Running Managers:
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Barclays Capital Inc.
Credit Suisse Securities (USA) LLC
Goldman Sachs & Co. LLC
J.P. Morgan Securities LLC
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Co-Managers:
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Regions Securities LLC
Santander Investment Securities Inc.
The Williams Capital Group, L.P.
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Junior Co-Managers:
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CastleOak Securities, L.P.
Drexel Hamilton, LLC
Siebert Cisneros Shank & Co., L.L.C.
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CUSIP/ISIN:
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26441C BG9 / US26441CBG96
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________________
** The Underwriters have agreed to make
a payment to the Issuer in an amount equal to $2,500,000, including in respect of expenses incurred by the Issuer in connection
with the offering of the Preferred Stock.
“Five-year U.S. Treasury Rate”
means, as of any Reset Dividend Determination Date, as applicable, (i) an interest rate (expressed as a decimal) determined to
be the per annum rate equal to the arithmetic mean of the five most recent daily yields to maturity for U.S. Treasury securities
with a maturity of five years from the next Reset Date and trading in the public securities markets or (ii) if there is no such
published U.S. Treasury security with a maturity of five years from the next Reset Date and trading in the public securities markets,
then the rate will be determined by interpolation between the arithmetic mean of the five most recent daily yields to maturity
for each of the two series of U.S. Treasury securities trading in the public securities market, (A) one maturing as close as possible
to, but earlier than, the Reset Date following the next succeeding Reset Dividend Determination Date, and (B) the other maturity
as close as possible to, but later than, the Reset Date following the next succeeding Reset Dividend Determination Date, in each
case as published in the most recent H.15. If the Five-year U.S. Treasury Rate cannot be determined pursuant to the methods described
in clauses (i) or (ii) above, then the Five-year U.S. Treasury Rate will be the same interest rate determined for the prior Reset
Dividend Determination Date.
“H.15” means the weekly statistical
release designated as such, or any successor publication, published by the Board of Governors of the U.S. Federal Reserve System.
“Most recent H.15” means the
H.15 published closest in time but prior to the close of business on the second business day prior to the applicable Reset Date.
“Reset Date” means the First
Call Date and each date falling on the fifth anniversary of the preceding Reset Date.
“Reset Dividend Determination Date”
means, in respect of any Reset Period, the day falling two business days prior to the beginning of such Reset Period.
“Reset Period” means the period
from and including the First Call Date to, but excluding, the next following Reset Date and thereafter each period from and including
each Reset Date to, but excluding, the next following Reset Date.
“Ratings Event” means that
any nationally recognized statistical rating organization as defined in Section 3(a)(62) of the Securities Exchange Act of 1934,
as amended, or in any successor provision thereto, that then publishes a rating for us (a “rating agency”) amends,
clarifies or changes the criteria it uses to assign equity credit to securities such as the Preferred Stock, which amendment, clarification
or change results in:
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·
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the shortening of the length of time the
Preferred Stock is assigned a particular level of equity credit by that rating agency as compared to the length of time they would
have been assigned that level of equity credit by that rating agency or its predecessor on the initial issuance of the Preferred
Stock; or
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·
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the lowering of the equity credit (including
up to a lesser amount) assigned to the Preferred Stock by that rating agency as compared to the equity credit assigned by that
rating agency or its predecessor on the initial issuance of the Preferred Stock.
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The issuer has filed a registration
statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information
about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus
if you request it by calling Barclays Capital Inc. toll-free at 888-603-5847, Credit Suisse Securities (USA) LLC toll-free at 800-221-1037,
Goldman Sachs & Co. LLC toll-free at 866-471-2526 or J.P. Morgan Securities LLC at 212-834-4533.
SCHEDULE IV
Material Agreements
Credit Agreement, dated as of November 18, 2011, among Duke
Energy Corporation, Duke Energy Carolinas, LLC, Duke Energy Ohio, Inc., Duke Energy Indiana, Inc. and Duke Energy Kentucky, Inc.,
as Borrowers, the lenders listed therein, Wells Fargo Bank, National Association, as Administrative Agent, Bank of America, N.A.
and The Royal Bank of Scotland plc, as Co Syndication Agents and Bank of China, New York Branch, Barclays Bank PLC, Citibank, N.A.,
Credit Suisse AG, Cayman Islands Branch, Industrial and Commercial Bank of China Limited, New York Branch, JPMorgan Chase Bank,
N.A. and UBS Securities LLC, as Co-Documentation Agents, as amended by Amendment No. 1 and Consent, dated as of December 18, 2013
and by Amendment No. 2 and Consent, dated as of January 30, 2015, each between Duke Energy Corporation, Duke Energy Carolinas,
LLC., Duke Energy Ohio, Inc., Duke Energy Indiana, Inc., Duke Energy Kentucky, Inc., Duke Energy Progress, Inc., Duke Energy Florida,
Inc., the lenders party thereto, the issuing lenders party thereto and Wells Fargo Bank, National Association, as further amended
by Amendment No. 3 and Consent, dated as of March 16, 2017, among Duke Energy Corporation, Duke Energy Carolinas, LLC, Duke Energy
Ohio, Inc., Duke Energy Indiana, LLC, Duke Energy Kentucky, Inc., Duke Energy Progress, LLC, Duke Energy Florida, LLC, and Piedmont
Natural Gas Company, Inc., the lenders party thereto, the issuing lenders party thereto, and Wells Fargo Bank, National Association,
and as further amended by Amendment No. 4 and Consent, dated as of March 18, 2019, among Duke Energy Corporation, Duke Energy Carolinas,
LLC, Duke Energy Ohio, Inc., Duke Energy Indiana, LLC, Duke Energy Kentucky, Inc., Duke Energy Progress, LLC, Duke Energy Florida,
LLC, and Piedmont Natural Gas Company, Inc., the Lenders party thereto, the Issuing Lenders party thereto, and Wells Fargo Bank,
National Association, as Administrative Agent and Swingline Lender.
Credit Agreement, dated as of May 15, 2019, among Duke Energy
Corporation, as Borrower, the lenders listed therein, The Bank of Nova Scotia, as Administrative Agent, PNC Bank, National Association,
Sumitomo Mitsui Banking Corporation and TD Bank, N.A., as Co-Syndication Agents, Bank of China, New York Branch, BNP Paribas, Santander
Bank, N.A. and U.S. Bank National Association, as Co-Documentation Agents and The Bank of Nova Scotia, PNC Capital Markets LLC,
Sumitomo Mitsui Banking Corporation and TD Bank, N.A., as Joint Lead Arrangers and Joint Bookrunners.
