Exhibit 10.3

 

AMENDMENT NO. 1

TO THE

TWELFTH SUPPLEMENTAL INDENTURE

 

This AMENDMENT NO. 1 TO THE TWELFTH SUPPLEMENTAL INDENTURE, dated as of April 3,
2006 (“Amendment No. 1”), among Duke Energy Corporation, a North Carolina
corporation (“Duke Energy”), Duke Energy Holding Corp., a Delaware corporation
(formerly named Deer Holding Corp.), as guarantor of the Notes (“Duke Holdco”)
and JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), a
national banking association, as trustee under the Indenture referred to below
(the “Trustee”).

 

WHEREAS, Duke Energy has heretofore entered into a Senior Indenture, dated as of
September 1, 1998 (the “Original Indenture”), with the Trustee, as supplemented
to the date hereof (as so supplemented, the “Indenture”);

 

WHEREAS, Duke Energy has heretofore entered into a Twelfth Supplemental
Indenture, dated as of May 7, 2003 (the “Twelfth Supplemental Indenture”), with
the Trustee, pursuant to which Duke Energy issued 1  3/4% Convertible Senior
Notes due 2023 (the “Convertible Notes”);

 

WHEREAS, Duke Energy and Duke Holdco have contemporaneously herewith entered
into the Fifteenth Supplemental Indenture, dated as of April 3, 2006 with the
Trustee, pursuant to which Duke Holdco fully and unconditionally guarantees,
among other things, the payment obligations of Duke Energy with respect to the
Notes as long as the Notes remain Outstanding;

 

WHEREAS, on May 3, 2005, Duke Energy incorporated Duke Holdco as a direct,
wholly-owned subsidiary of Duke Energy, and Duke Holdco incorporated Deer
Acquisition Corp., a North Carolina corporation (“Merger Sub A”), and Cougar
Acquisition Corp., a Delaware corporation (“Merger Sub B”), each as a direct,
wholly-owned subsidiary of Duke Holdco;

 

WHEREAS, Duke Energy entered into the Agreement and Plan of Merger, dated as of
May 8, 2005, as amended (the “Merger Agreement”), by and among Duke Energy,
Cinergy Corp., a Delaware corporation (“Cinergy”), Duke Holdco, Merger Sub A and
Merger Sub B, providing for the consummation of the business combination
contemplated therein;

 

WHEREAS, pursuant to the terms of the Merger Agreement, Merger Sub A shall merge
with and into Duke Energy (the “Duke Energy Merger”), in accordance with the
North Carolina Business Corporation Act (“NCBCA”), whereby Duke Energy shall be
the surviving corporation in the Duke Energy Merger and shall continue its
existence under the laws of the State of North Carolina and shall succeed to and
assume all the rights and obligations of Merger Sub A in accordance with the
NCBCA and, as a result of the Duke Energy Merger, shall be a direct,
wholly-owned subsidiary of Duke Holdco;

 

WHEREAS, following effectiveness of the Duke Energy Merger, Duke Energy shall
convert its form of organization into a limited liability company pursuant to a
plan of conversion adopted pursuant to Section 55-11A-11 of the NCBCA and
Section 57C-9A-02 of the North Carolina Limited Liability Company Act and shall
be renamed Duke Power Company LLC, all of whose membership or other equity
interests shall be held by Duke Holdco (the “Duke Energy Conversion” and,
together with the Duke Energy Merger, the “Duke Energy Reorganization”);

 

WHEREAS, following the Duke Energy Reorganization, Merger Sub B will merge with
and into Cinergy, with Cinergy as the surviving corporation (the “Cinergy
Merger” and, together with the Duke Energy Merger, the “Mergers”);

 

WHEREAS, Duke Energy is currently the direct owner of 100% of the issued and
outstanding equity interests of Duke Capital LLC, a Delaware limited liability
company (“Duke Capital”);

 

WHEREAS, following effectiveness of the Duke Energy Reorganization, Duke Energy
shall distribute to Duke Holdco all the issued and outstanding equity interests
of Duke Capital and, as a result, each of Duke Energy and Duke Capital shall be
a direct, wholly-owned subsidiary of Duke Holdco;

 

WHEREAS, Section 110(h)(iv) of the Twelfth Supplemental Indenture provides that,
upon the occurrence of any consolidation, merger or binding share exchange of
Duke Energy with another corporation as a result of which holders of shares of
common stock, no par value, of Duke Energy (“Duke Energy Common Stock”) shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Duke Energy Common Stock, then the
terms of the Convertible Notes shall be amended by execution of a supplemental

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indenture or otherwise, to provide that each Convertible Note shall be
convertible into the kind and amount of shares of stock, other securities or
property or assets (including cash) that the Holder of such Convertible Note
would have received upon such consolidation, merger or binding share exchange if
such Holder had converted such Convertible Note into the number of shares of
Duke Energy Common Stock issuable upon conversion of such Convertible Note
immediately prior to such consolidation, merger or binding share exchange;

 

WHEREAS, pursuant to Article II of the Merger Agreement, as a result of the Duke
Energy Merger each holder of Duke Energy Common Stock will receive one share of
Duke Holdco Common Stock for each share of Duke Energy Common Stock held by such
holder immediately prior to the Duke Energy Merger and, therefore, the
Convertible Notes shall be convertible into Duke Holdco Common Stock and at the
same conversion rate as such Convertible Notes were convertible into Duke Energy
Common Stock immediately prior to the Duke Energy Merger;

 

WHEREAS, the execution of Amendment No. 1 is authorized and permitted by the
Original Indenture and by the Twelfth Supplemental Indenture and all conditions
precedent provided for in the Original Indenture and the Twelfth Supplemental
Indenture relating to the execution of Amendment No. 1 have been complied with;
and

 

WHEREAS, this Amendment No. 1 shall be effective simultaneously with the
consummation of the Duke Energy Merger.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, Duke
Energy, Duke Holdco and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders from time to time of the Convertible Notes
(the “Holders”) as follows:

 

SECTION 101. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

 

SECTION 102. Amendments to the Twelfth Supplemental Indenture.

 

  (1) Section 1.02 of the Twelfth Supplemental Indenture is hereby amended by
deleting the definition of “Common Stock” and replacing it with the following
definition:

 

“Common Stock” means the common stock, no par value, of Duke Energy Holding
Corp., a Delaware corporation (“Duke Holdco”).

 

  (2) Section 1.02 of the Twelfth Supplemental Indenture is hereby amended by
adding the following definitions:

 

“Duke Holdco Board of Directors” means either the board of directors of Duke
Holdco or any duly authorized committee of that board.

 

“Duke Holdco Board Resolution” means a copy of a resolution certified by the
Secretary or an Assistant Secretary of Duke Holdco to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Duke Holdco Officers’ Certificate” means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of Duke Holdco,
and delivered to the Trustee.

 

“Merger Agreement” means the Agreement and Plan of Merger, dated as of May 8,
2005, as amended, by and among the Company, Cinergy Corp., a Delaware
corporation, Duke Holdco, Deer Acquisition Corp., a North Carolina corporation,
and Cougar Acquisition Corp., a Delaware corporation, providing for the
consummation of the business combination contemplated therein.

 

  (3) Section 1.02 of the Twelfth Supplemental Indenture is hereby amended by
deleting the term “Corporation” and replacing it with the term “Duke Holdco” in
the following definitions:

 

  (i) “Conversion Agent”;

 

  (ii) “Fundamental Change”; and

 

  (iii) “Spin-Off Market Price”.

 

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  (4) The Twelfth Supplemental Indenture is hereby amended by deleting the term
“Corporation” (and, with respect to Section 1.15, the term “Duke Energy
Corporation”) and replacing it with the term “Duke Holdco” in the following
Sections:

 

  (i) Section 1.10(c)(i) (last sentence only) and (iii);

 

  (ii) Section 1.10(d);

 

  (iii) Section 1.10(f);

 

  (iv) Section 1.10(g);

 

  (v) Section 1.10(h);

 

  (vi) Section 1.11(iii);

 

  (vii) Section 1.13 (only with respect to the Conversion Agent);

 

  (viii) Section 1.14 (except with respect to the calculation of interest
payable (including Contingent Interest and the conditions for the payment
thereof)). and

 

  (ix) Section 1.15.

 

  (5) The Twelfth Supplemental Indenture is hereby amended by deleting the term
“Officers’ Certificate” and replacing it with the term “Duke Holdco Officers’
Certificate” in the following Sections:

 

  (i) Section 1.10(g);

 

  (ii) Section 1.10(h); and

 

  (iii) Section 1.14 (except with respect to the calculation of interest payable
(including Contingent Interest and the conditions for the payment thereof)).

 

  (6) The Twelfth Supplemental Indenture is hereby amended by deleting the terms
“Board of Directors” and “Board Resolution” and replacing them with the
respective terms “Duke Holdco Board of Directors” and “Duke Holdco Board
Resolutions” in the following Sections:

 

  (i) Section 1.10(g); and

 

  (ii) Section 1.10(h).

 

  (7) Section 1.10(b) of the Twelfth Supplemental Indenture is hereby amended by
deleting it in its entirety and replacing it with the following:

 

“The Conversion Rate. The initial Conversion Rate is 42.3908 shares of Duke
Energy common stock issuable upon conversion of $1,000 principal amount of a
Senior Convertible Note, subject to adjustments as herein set forth and, upon
the consummation of the Duke Energy Merger the Conversion Rate shall be 42.3908
shares of Duke Holdco Common Stock issuable upon conversion of $1,000 principal
amount of a Senior Convertible Note, subject to adjustments as herein set forth
(the “Conversion Rate”). A Holder may convert a portion of the principal amount
of Senior Convertible Notes if the portion is $1,000 or an integral multiple
thereof.”

 

  (8) Section 1.10(e) of the Twelfth Supplemental Indenture is hereby amended by
deleting the term “Corporation” and replacing it with the phrase “Corporation or
Duke Holdco”.

 

SECTION 103. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder, partner or agent of Duke Holdco
shall have any liability for any obligations of Duke Energy or Duke Holdco under
the Notes, the Guarantee, the Indenture or this Amendment No. 1 or for any claim
based on, in respect of, or by reason of, such obligations or their creation.

 

SECTION 104. Provisions Binding on Successors. All the covenants, stipulations,
premises and agreements made in Amendment No. 1 by Duke Energy and Duke Holdco
shall bind their respective successors and assigns whether so expressed or not.

 

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SECTION 105. Governing Law. THIS AMENDMENT NO. 1 SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.

 

SECTION 106. Execution and Counterparts. Amendment No. 1 may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

 

SECTION 110. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

 

SECTION 111. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of Amendment No. 1
or for or in respect of the recitals contained herein, all of which recitals are
made solely by Duke Energy and Duke Holdco.

 

SECTION 112. Full Force and Effect. Except as expressly amended hereby, the
Indenture shall remain in full force and effect in accordance with the
provisions thereof on the date thereof.

 

SECTION 113. Effectiveness of Amendment No. 1. Amendment No. 1 shall be
effective simultaneously with the consummation of the Duke Energy Merger.

 

SECTION 114. Supplemental Indenture. This Amendment No. 1 shall constitute a
supplemental indenture for all purposes of the Indenture.

 

SECTION 115. Notation on Convertible Notes. Convertible Notes authenticated and
delivered after the execution and delivery of this Amendment No. 1 shall, at the
expense of Duke Holdco, bear the following notation, which may be stamped or
imprinted thereon:

 

“In accordance with Amendment No. 1, dated as of April 3, 2006, to the Twelfth
Supplemental Indenture, dated as of May 7, 2003, to the Indenture, subject to
the procedures set forth in the Indenture and at any time during the periods
specified in the fourth paragraph of the reverse of this Security, this Security
is convertible into Common Stock of Duke Energy Holding Corp., a Delaware
corporation, and is no longer convertible into Common Stock of Duke Energy
Corporation.”

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.

 

DUKE ENERGY CORPORATION By:        

Name: David L. Hauser

Title:     Group Vice President and
Chief Financial Officer

 

Attest:                                         
                                                                   Name: Title:

 

DUKE ENERGY HOLDING CORP. By:        

Name: Robert T. Lucas III

Title:     Assistant Secretary

 

Attest:                                         
                                                                   Name: Title:

 

JPMORGAN CHASE BANK, N.A.,

as Trustee

By:        

Name: 

Title:     

 

Attest:                                         
                                                                   Name: Title: