Duke Energy Corporation (NYSE:DUK) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On February20, 2018, Duke Energy Corporation (the “Company”) entered into an Equity Distribution Agreement dated February20, 2018 (the “Equity Distribution Agreement”) with Wells Fargo Securities, LLC (“Wells Fargo”), Citigroup Global Markets Inc. (“Citigroup”) and J.P. Morgan Securities LLC (“J.P. Morgan”), each acting as agent for the Company (each, a “Sales Agent” and collectively, the “Sales Agents”) and Wells Fargo Bank, National Association, Citibank, N.A. and JPMorgan Chase Bank, National Association, each acting as forward purchaser (each, a “Forward Purchaser” and collectively, the “Forward Purchasers”), establishing an at-the-market equity distribution program (the “ATM Program”) to which the Company, through the Sales Agents, may issue, offer and sell up to an aggregate sales price of $1,000,000,000 of shares of the Company’s common stock, par value $0.001 per share (“Common Stock”) over a period of time and from time to time.
In addition to the issuance, offering and sale of shares of Common Stock through the Sales Agents, the Company may enter into one or more separate forward sale agreements (each, a “Forward Sale Agreement” and collectively, the “Forward Sale Agreements”) with the Forward Purchasers. In connection with each Forward Sale Agreement, the relevant Forward Purchaser will, at the Company’s request, borrow from third parties and, through its relevant agent, sell a number of shares of Common Stock equal to the number of shares of Common Stock that underlie the Forward Sale Agreement (each of Wells Fargo, Citigroup and J.P. Morgan, in its capacity as agent for a Forward Purchaser, a “Forward Seller” and collectively, the “Forward Sellers”).
The Company will not initially receive any proceeds from the sale of borrowed shares of Common Stock by a Forward Seller. The Company expects to receive proceeds from the sale of shares of Common Stock upon future physical settlement of the relevant Forward Sale Agreement with the relevant Forward Purchaser on dates specified by the Company on or prior to the maturity date of the relevant Forward Sale Agreement. If the Company elects to cash settle or net share settle a Forward Sale Agreement, the Company may not (in the case of cash settlement) or will not (in the case of net share settlement) receive any proceeds, and the Company may owe cash (in the case of cash settlement) or shares of Common Stock (in the case of net share settlement) to the relevant Forward Purchaser.
The shares of Common Stock will be offered at market prices prevailing at the time of sale. The sales proceeds from any shares of Common Stock sold through each Sales Agent under the Equity Distribution Agreement, after deducting such Sales Agent’s commission and any expenses payable by the Company and any transaction fees imposed by any governmental, regulatory or self-regulatory organization in connection with the sales, will be the Company’s net proceeds for the sale of the shares. In connection with each Forward Sale Agreement, the relevant Forward Seller will receive, reflected in a reduced initial forward price payable by the relevant Forward Purchaser under its Forward Sale Agreement, a specified commission relating to all borrowed shares of Common Stock sold during the applicable period by it as a Forward Seller.
The shares will be offered to the Company’s prospectus supplement, dated February20, 2018, and the Company’s automatic shelf registration statement on FormS-3, as amended (File No.333-213765) originally filed with the Securities and Exchange Commission (the “SEC”) on September23, 2016 and subsequently filed on January26, 2017.
The foregoing description of the Equity Distribution Agreement and the Forward Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Equity Distribution Agreement and the Formof Forward Sale Agreement, which are filed as Exhibits 99.1 and 10.1, respectively, and are incorporated herein by reference.
