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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
(xx) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
(xx) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Duke Power Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
(xx) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
( ) Filing Fee of $ was previously paid on , 199 ,
the date the Preliminary Proxy Statement was filed.
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DUKE POWER COMPANY
422 SOUTH CHURCH STREET
CHARLOTTE, N.C. 28242
WILLIAM S. LEE
Chairman of the Board
and President March 21, 1994
Dear Shareholder:
It is my pleasure to invite you to our annual shareholders meeting, which
will be held on Thursday, April 28, 1994, at 10 a.m., in the O. J. Miller
Auditorium in the Electric Center, 526 South Church St., Charlotte, N.C.
During the meeting we will elect six Class III directors to a three-year
term expiring in 1997, act upon the ratification of the appointment of auditors
and transact any other business that may come before the meeting. William H.
Grigg, whom the Board elected in January as the Company's next Chairman,
President and Chief Executive Officer, will assume his new duties at the
meeting.
Dr. Robert L. Albright, who has served on the Board of Directors since
1985, will not be standing for reelection as he is moving to New Jersey to
assume his new executive post with The Educational Testing Service. We are
especially thankful to Dr. Albright for his invaluable service to the Company.
Since I will be retiring following my 65th birthday in June 1994, I too will not
be a candidate for reelection to the Board. I am deeply grateful for the
privilege of being part of the Duke Power team since 1955 and serving as
Chairman for the last 12 years.
The Board of Directors and I hope you can attend the meeting and look
forward to seeing you. Even if you plan to attend, please return your signed
proxy as soon as possible.
Sincerely,
(Signature of William S. Lee)
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DUKE POWER COMPANY
422 SOUTH CHURCH STREET
CHARLOTTE, N.C. 28242
NOTICE OF 1994 ANNUAL MEETING OF SHAREHOLDERS
March 21, 1994
To the Shareholders of
DUKE POWER COMPANY:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Duke
Power Company will be held in the O. J. Miller Auditorium in the Electric
Center, 526 South Church Street, Charlotte, N.C., on Thursday, April 28, 1994,
at 10 a.m., for the following purposes:
(1) to elect six directors who will constitute Class III of the Board
of Directors;
(2) to ratify the appointment of auditors; and
(3) to transact such other business as may come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 4, 1994 as
the record date for the determination of shareholders who will be entitled to
notice of and to vote at the meeting.
Each shareholder is requested to date, sign and return the accompanying
proxy in the enclosed return envelope, to which no postage need be affixed if
mailed in the United States.
By order of the Board of Directors,
ELLEN T. RUFF
SECRETARY
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DUKE POWER COMPANY
422 SOUTH CHURCH STREET
CHARLOTTE, N.C. 28242
PROXY STATEMENT
This proxy statement is furnished to the shareholders of Duke Power Company
(the Company) in connection with the solicitation of proxies to be used in
voting at the annual meeting of shareholders to be held on April 28, 1994. The
enclosed proxy is solicited on behalf of the Board of Directors of the Company.
Such proxy material was first forwarded to the shareholders on or about March
21, 1994.
Any shareholder giving a proxy may revoke it at any time prior to its use
at the meeting.
The Company will bear the cost of the solicitation of proxies including the
charges and expenses of brokerage firms and others for forwarding solicitation
material to beneficial owners of shares of the Common Stock of the Company. In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone or telegraph. Additionally, the Company has retained
Georgeson & Co. to solicit proxies in the same manner, at an anticipated cost to
the Company of approximately $12,500.
VOTING SECURITIES OUTSTANDING
Only holders of record of Common Stock at the close of business on March 4,
1994 will be entitled to vote at the meeting. On such date, there were
outstanding 204,859,339 shares of Common Stock, each share of which entitles the
holder to one vote.
As of March 4, 1994, the only beneficial owner of more than 5% of the
outstanding shares of Common Stock was The Duke Endowment, 100 North Tryon
Street, Charlotte, N.C. 28202, which owned 26,070,200 shares, or approximately
13%, of the outstanding Common Stock. The Duke Endowment is a common law trust
administered by fifteen trustees, who also constitute all of the trustees of The
Doris Duke Trust, 1515 Mockingbird Lane, Charlotte, N.C. 28209, another common
law trust, which, as of March 4, 1994, owned beneficially 3,906,396 shares, or
approximately 2%, of the outstanding Common Stock. The Duke Endowment has
announced its intention to sell up to 16 million of its shares of Common Stock.
A registration statement with respect to such sale was filed with the Securities
and Exchange Commission on March 2, 1994.
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ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of Directors
shall be divided into three classes, as nearly equal in size as possible. Each
year the directors of one class are elected to serve terms of three years.
Six persons have been nominated by the Board for election as directors to
Class III at this annual meeting to serve three-year terms and until their
successors are duly elected and qualified. The nominees are G. Alex Bernhardt,
Crandall C. Bowles, Robert J. Brown, George Dean Johnson, Jr., James G. Martin
and R. B. Priory. All of the Class III nominees are currently Class III
directors elected by the shareholders with the exception of Mr. Brown and Mr.
Martin.
Votes (other than votes withheld) will be cast pursuant to the accompanying
proxy for holders of Common Stock for the election of the nominees listed
unless, by reason of death or other unexpected occurrence, one or more of such
nominees shall not be available for election, in which event it is intended that
such votes will be cast for such substitute nominee or nominees as may be
determined by the persons named in such proxy. The Board of Directors has no
reason to believe that any of the nominees listed will not be available for
election as a director.
Directors are elected by a plurality of the votes cast by the holders of
the Common Stock of the Company at a meeting at which a quorum is present.
Plurality means that the individuals who receive the largest number of votes
cast are elected as directors up to the maximum number of directors to be chosen
at the meeting. Consequently, any shares not voted (whether by abstention,
broker nonvote or otherwise) have no impact in the election of directors except
to the extent the failure to vote for an individual results in another
individual receiving a larger number of votes.
CLASS III
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
(TERM EXPIRING IN 1997)
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(Photo) G. ALEX BERNHARDT, PRESIDENT AND DIRECTOR, BERNHARDT FURNITURE COMPANY, FURNITURE
MANUFACTURERS
Mr. Bernhardt, 50, was elected a director in 1991 and serves on the Audit Committee. He
has been associated with Bernhardt Furniture Company of Lenoir, North Carolina since
1965. He was named to his present position in 1976. He is a director of Robert Talbott,
Inc. and First Union Corporation. He serves as a trustee of Davidson College and a
member of the North Carolina Governor's Business Council. He is a director emeritus of
the American Furniture Manufacturers Association.
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(Photo) CRANDALL C. BOWLES, EXECUTIVE VICE PRESIDENT, SPRINGS INDUSTRIES, INC., HOME
FURNISHINGS, FINISHED FABRICS AND INDUSTRIAL TEXTILES COMPANY
Mrs. Bowles, 46, was elected a director in 1988 and serves on the Corporate Performance
Review Committee. She joined Springs Industries, Inc. in 1992 as an Executive Vice
President, having previously served as President of The Springs Company from 1982 until
joining Springs Industries, Inc. She is a director of Springs Industries, Inc. and
Wachovia Corporation.
(Photo) ROBERT J. BROWN, CHAIRMAN AND PRESIDENT, B&C ASSOCIATES, INC., MARKET RESEARCH AND
PUBLIC RELATIONS FIRM
Mr. Brown, 59, founded B&C Associates, Inc., High Point, North Carolina, in 1960 and
served as its President from 1960 until 1968 and its Chairman and President from 1973 to
the present. From 1968 until 1973, Mr. Brown was a Special Assistant to the President of
the United States, with oversight responsibility for community relations, civil rights,
emergency preparedness and day care. He is a director of First Union Corporation,
Pacific National Bank Financial Group, Sonoco Products Company, United National Bank and
North Carolina Citizens for Business and Industry. He serves on the boards of numerous
educational institutions and religious and service organizations.
(Photo) GEORGE DEAN JOHNSON, JR., PRESIDENT, DOMESTIC CONSUMER DIVISION, BLOCKBUSTER
ENTERTAINMENT CORPORATION
Mr. Johnson, 51, was elected a director in 1986 and serves on the Finance Committee. He
began his legal career in 1967 when he joined Johnson, Smith, Hibbard and Wildman. He
has served as President of the Domestic Consumer Division of Blockbuster Entertainment
Corporation since August, 1993. He is also Chairman of Johnson Development Associates,
Inc. He is a director of Blockbuster Entertainment Corporation, Ballenger Paving
Company, Inc., Graf Metallic of America, Inc., William Barnet & Son, Inc. and Morgan
Corp. He also serves as Chairman of the Board of Trustees of Converse College.
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(Photo) JAMES G. MARTIN, CHAIRMAN, RESEARCH DEVELOPMENT BOARD, CHARLOTTE-MECKLENBURG HOSPITAL
AUTHORITY
Mr. Martin, 58, has been Chairman of the Research Development Board of the
Charlotte-Mecklenburg Hospital Authority, located at Carolinas Medical Center,
Charlotte, North Carolina, since January, 1993. He served as Governor of the State of
North Carolina from 1985 to 1993 and was a member of the United States House of
Representatives, representing the Ninth District of North Carolina, from 1972 until
1984. Mr. Martin was a Mecklenburg County Commissioner from 1966 to 1972, and an
Associate Professor of Chemistry at Davidson College, Davidson, North Carolina, from
1960 to 1972. He is currently a director of J. A. Jones, Inc., Carolina Freight
Corporation and Meadowbrook Healthcare Services, Inc. He is Chairman of the Global
TransPark Foundation, Inc. and a member of the University of North Carolina Board of
Governors.
(Photo) R. B. PRIORY, EXECUTIVE VICE PRESIDENT, POWER GENERATION GROUP,
DUKE POWER COMPANY
Mr. Priory, 47, joined the Company in 1976 as a Design Engineer and was elected a
director in 1990. He was named Vice President, Design Engineering, in 1984; Senior Vice
President, Generation and Information Services, in 1988 and was appointed to his present
position in 1991. He serves on the Management, Retirement Plan and Stock
Purchase-Savings Program Committees. He is Chairman of Duke Engineering & Services,
Inc., President of Claiborne Energy Services, Inc., and is a director of J. A. Jones
Applied Research Corp. He serves on the boards of the Charlotte-Mecklenburg Education
Foundation, Discovery Place Science Museums Inc. and the North Carolina State University
Engineering Foundation. He is also a member of the board of visitors of the University
of North Carolina at Charlotte. He was recently elected to membership in the National
Academy of Engineering.
DIRECTORS CONTINUING IN OFFICE
(Photo) W. A. COLEY, EXECUTIVE VICE PRESIDENT, CUSTOMER GROUP,
DUKE POWER COMPANY
Mr. Coley, 50, joined the Company in 1966 and was elected a director in 1990. He was
named Vice President, Operation, in 1984; Vice President, Central Division, in 1986;
Senior Vice President, Power Delivery, in 1988; Senior Vice President, Customer Group,
in 1990 and was elected to his present position in 1991. He serves on the Management,
Retirement Plan and Stock Purchase-Savings Program Committees. He is a member of the
Board of Trustees of Charlotte Latin School and serves on the Public Library Board. He
is a director of the Charlotte Symphony and Carolina Pad and Paper Company. He is a
Class II Director with a term expiring in 1996.
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(Photo) JOE T. FORD, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, ALLTEL CORPORATION, DIVERSIFIED
TELECOMMUNICATIONS COMPANY
Mr. Ford, 56, was elected a director in 1993 and serves on the Audit Committee. He began
his career in telecommunications at Allied Telephone Company and served in a number of
executive positions before becoming President in 1977. Upon the merger of Allied with
Mid-Continent Telephone Corporation in 1983 to form ALLTEL Corporation, he was named
President of ALLTEL and held that title until 1993. He was named Chief Executive Officer
in 1987, and Chairman in 1991. He serves as a director of The Dial Corp. He is a Class
II director with a term expiring in 1996.
(Photo) STEVE C. GRIFFITH, JR., EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL,
DUKE POWER COMPANY
Mr. Griffith, 60, joined the Company in 1964 as Assistant General Counsel, was named
Secretary and Associate General Counsel in 1971 and was appointed General Counsel in
1975. He was named a Vice President in 1977 and a Senior Vice President in 1982 at which
time he was elected a director. He assumed his present position in 1991. He serves on
the Management, Retirement Plan and Stock Purchase-Savings Program Committees. He is a
Fellow of the American Bar Foundation and a member of the American Bar Association, the
North Carolina State Bar and the South Carolina Bar. He currently serves as Chair of the
American Bar Association's Section of Public Utility, Communications and Transportation
Law. He also serves on the Board of Governors of the Research Triangle Institute. He is
a Class I director with a term expiring in 1995.
(Photo) W. H. GRIGG, VICE CHAIRMAN OF THE BOARD,
DUKE POWER COMPANY
Mr. Grigg, 61, joined the Company in 1963, was named Vice President and General Counsel
in 1971 and became a director in 1972. He was elected Senior Vice President, Legal and
Finance, in 1975; Executive Vice President, Finance and Administration, in 1982;
Executive Vice President, Customer Group, in 1988; and to his present position in 1991.
In January 1994, he was elected by the Board of Directors to serve as Chairman of the
Board, President and Chief Executive Officer, effective April 28, 1994. He serves on the
Management, Finance and Stock Purchase-Savings Program Committees and as Chairman of the
Retirement Plan Committee. He is a director of Hatteras Income Securities, Inc., Nations
Fund, Inc., the Research Triangle Foundation and the Associated Electric and Gas
Insurers, Ltd. and a trustee of Johnson C. Smith University. He is a Class II director
with a term expiring in 1996.
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(Photo) PAUL H. HENSON, CHAIRMAN, KANSAS CITY SOUTHERN INDUSTRIES, INC., HOLDING COMPANY FOR
RAILROAD OPERATIONS AND FINANCIAL SERVICES
Mr. Henson, 68, was elected a director in 1976. He is Chairman of the Corporate
Performance Review Committee and also serves on the Nominating and Compensation
Committees. He became Chairman of the Board of Kansas City Southern Industries, Inc. in
1990 following retirement as Chairman of Sprint Corporation. He is a director of Armco
Inc., Hallmark Cards, Inc., Kansas City Southern Industries, Inc. and Sprint
Corporation. He is a Class I director with a term expiring in 1995.
(Photo) GEORGE R. HERBERT, VICE CHAIRMAN AND PRESIDENT EMERITUS, RESEARCH TRIANGLE INSTITUTE,
CONTRACT RESEARCH SERVICES
Mr. Herbert, 71, was elected a director in 1978 and serves as Chairman of the Audit
Committee. He served as President of the Research Triangle Institute from its creation
in 1958 until October 1, 1989, when he was elected to his present position. Previously,
he was Treasurer of American and Foreign Power Company for two years. He is a director
of CCB Financial Corp., Central Carolina Bank & Trust Company and Research Triangle
Foundation and a trustee emeritus of Duke University. He is a Class I director with a
term expiring in 1995.
(Photo) JAMES V. JOHNSON, RETIRED VICE CHAIRMAN AND DIRECTOR OF PUBLIC AFFAIRS,
COCA-COLA BOTTLING CO. CONSOLIDATED
Mr. Johnson, 70, a director since 1982, serves on the Audit Committee. He had been
associated with Coca-Cola Bottling Co. Consolidated or its affiliates from 1947 until
his retirement on December 31, 1987. He served as President and chief executive officer
from 1969 until 1980 when he became Vice Chairman and Director of Public Affairs. He is
a director of Coca-Cola Bottling Co. Consolidated and the Cato Corporation. He was a
member of the State Senate of North Carolina from 1960 to 1966 and Chairman of the
Senate Finance Committee in 1963 and 1964. He is a Class II director with a term
expiring in 1996.
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(Photo) W. W. JOHNSON, CHAIRMAN OF THE EXECUTIVE COMMITTEE, NATIONSBANK CORPORATION
Mr. Johnson, 63, was elected a director in 1984. He is Chairman of the Nominating
Committee and also serves on the Finance Committee. He is Chairman of the Executive
Committee of NationsBank Corporation. Mr. Johnson was, since 1980, Chairman of the Board
and Chief Executive Officer of Bankers Trust of South Carolina, which merged with
NationsBank Corporation in January 1986. He is a director of NationsBank Corporation,
ALLTEL Corporation and The Liberty Corporation. He is a Class I director with a term
expiring in 1995.
(Photo) MAX LENNON, PRESIDENT, CLEMSON UNIVERSITY
Dr. Lennon, 53, was elected a director in 1988 and serves on the Corporate Performance
Review Committee. Prior to assuming his present position, he was involved in higher
education from 1966 to 1986, his last tenure being at Ohio State University where he
served as Vice President of Agricultural Administration and Executive Dean for
Agriculture, Home Economics and Natural Resources for three years. He is a director of
First Union Corporation and Delta Woodside Industries, Inc. and a member of the Council
of Presidents, South Carolina Association of Colleges and Universities, and South
Carolina Forestry Commission. He is a Class II director with a term expiring in 1996.
(Photo) BUCK MICKEL, RETIRED VICE CHAIRMAN, FLUOR CORPORATION
Mr. Mickel, 68, was elected a director in 1976. He is Chairman of the Compensation
Committee and also serves on the Corporate Performance Review Committee. He had been
associated with Daniel International since 1947 and served as its Chairman from 1974 to
1987. He served as President and later Vice Chairman of Fluor Corporation during the
period from 1977 until retirement in 1987. He is a director of Emergent Corporation,
Fluor Corporation, Monsanto Company, The Liberty Corporation, NationsBank Corporation,
Delta Woodside Industries, Inc., RSI Holdings, Inc. and Insignia Financial Group, Inc.
He is a life trustee of Clemson University and Converse College. He is a Class I
director with a term expiring in 1995.
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(Photo) REECE A. OVERCASH, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
ASSOCIATES CORPORATION OF NORTH AMERICA, FINANCIAL SERVICES AND INSURANCE
Mr. Overcash, 67, was elected a director in 1976. He is Chairman of the Finance
Committee and also serves on the Compensation and Nominating Committees. He has served
as chief executive officer of Associates Corporation of North America since 1978 and as
Chairman of the Board since 1979. He is a director of National Gypsum Company and A. H.
Belo Corporation. He is a Class II director with a term expiring in 1996.
</TABLE>
COMMON STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is the number of shares of Common Stock of the Company
beneficially owned by the directors, the nominees for director, the Chief
Executive Officer, the other executive officers named in the
Summary Compensation Table, and directors and executive officers as a group, on
February 1, 1994:
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NAME SHARES
Robert L. Albright 1,382(1)
G. Alex Bernhardt 1,806(1)
Crandall C. Bowles 3,830(1)
Robert J. Brown 250(2)
W. A. Coley 14,677(3)(4)
Joe T. Ford 2,096(1)
Steve C. Griffith, Jr. 36,944(3)
W. H. Grigg 35,322(3)
Paul H. Henson 2,634(1)
George R. Herbert 3,015(1)
NAME SHARES
George Dean Johnson, Jr. 3,392(1)
James V. Johnson 4,947(1)
W. W. Johnson 11,392(1)
W. S. Lee 112,786(3)(5)
Max Lennon 1,184(1)
James G. Martin 100(2)
Buck Mickel 7,303(1)(6)
Reece A. Overcash, Jr. 9,022(1)
R. B. Priory 12,165(3)
Directors and executive officers as a
group (21 persons) 278,421(1)(2)(3)(4)(5)(6)
</TABLE>
No person listed in the table owned, nor did all directors and executive
officers as a group own, more than one percent of the shares of Common Stock
outstanding on February 1, 1994.
(1) Includes full shares held in trust under the arrangement for directors
described under the caption Executive CompensationDirectors' Fees.
(2) Shares held by Mr. Brown and Mr. Martin were acquired during February, 1994.
(3) Includes, as of December 31, 1993, full shares credited to the participant's
account under the Stock Purchase-Savings Program for Employees.
(4) Includes 1,100 shares owned by W. A. Coley's wife and 221 shares held as
custodian for his son. Beneficial ownership of all such shares is
disclaimed.
(5) Includes 49,960 shares held by a Grantor Retained Income Trust established
by W. S. Lee and 12,500 shares attributable to him as beneficiary of a trust
as well as 855 shares held by his wife, beneficial ownership of which is
disclaimed.
(6) Does not include 60,000 shares owned by The Daniel Foundation of South
Carolina, a charitable foundation located in Greenville, South Carolina. Mr.
Mickel has beneficial ownership of such shares as a trustee of the Daniel
Foundation.
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EXECUTIVE COMPENSATION
Below is information regarding compensation to the Chief Executive Officer
and the other four most highly compensated executive officers of the Company for
services to the Company for the years ended December 31, 1993, 1992 and 1991.
SUMMARY COMPENSATION TABLE
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ANNUAL COMPENSATION
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) COMPENSATION($) COMPENSATION($)*
W. S. Lee 1993 795,833 18,807 444,192
Chairman, President and 1992 750,000 11,546 803,039
Chief Executive Officer 1991 650,000
W. H. Grigg 1993 411,500 6,987 198,614
Vice Chairman of the Board 1992 384,000 3,736 225,587
1991 335,000
S. C. Griffith, Jr. 1993 322,015 7,034 149,617
Executive Vice President 1992 300,180 2,603 161,148
and General Counsel 1991 265,320
R. B. Priory 1993 287,250 1,172 90,109
Executive Vice President 1992 262,500 383 109,560
Power Generation Group 1991 214,120
W. A. Coley 1993 287,250 4,710 112,075
Executive Vice President 1992 262,500 1,278 125,725
Customer Group 1991 206,720
</TABLE>
In accordance with the transitional provisions applicable to the revised
rules on executive compensation disclosure adopted by the Securities and
Exchange Commission, amounts of Other Annual Compensation and All Other
Compensation are excluded for the Company's 1991 fiscal year.
* All Other Compensation column includes the following for 1993:
(i) Amounts contributed to the Stock Purchase-Savings Program for Employees as
follows: W. S. Lee, $7,746; W. H. Grigg, $8,994; S. C. Griffith, Jr.,
$6,414; R. B. Priory, $7,004; and W. A. Coley, $6,267.
(ii) Amounts earned by foregoing vacation pursuant to the Vacation Banking Plan
as follows: W. S. Lee, $15,385; W. H. Grigg, $23,885; S. C. Griffith, Jr.,
$18,693; R. B. Priory, $0; and W. A. Coley, $16,702.
(iii) Amounts earned under the Employee Incentive Plan for employees as
follows: W. S. Lee, $19,259; W. H. Grigg, $9,958; S. C. Griffith, Jr.,
$9,532; R. B. Priory, $7,986; and W. A. Coley, $8,158.
(iv) Amounts earned under the Executive Long-Term Incentive Plan as follows:
W. S. Lee, $225,280; W. H. Grigg, $101,389; S. C. Griffith, Jr., $79,348;
R. B. Priory, $70,899; and W. A. Coley, $70,899. These payments were made
in February, 1994 for the 1993 performance period. No awards were made
under this plan for the 1992 performance period.
(v) Amounts accrued under a make-whole arrangement under the Supplementary
Defined Contribution Plan designed to maintain the overall integrity of
the employee benefit plans as follows: W. S. Lee, $34,075; W. H. Grigg,
$8,640; S. C. Griffith, Jr., $6,908; R. B. Priory, $2,291; and W. A.
Coley, $6,900.
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(vi) Above-market interest earned on account balances in the Compensation
Deferral Plan as follows; W. S. Lee, $103,671; W. H. Grigg, $31,358; S. C.
Griffith, Jr., $20,124; R. B. Priory, $215; and W. A. Coley, $381.
(vii) Economic value of life insurance coverage provided under the Group Life
Insurance Plan as follows: W. S. Lee, $5,455; W. H. Grigg, $4,187; S. C.
Griffith, Jr., $4,174; R. B. Priory, $450; and W. A. Coley, $1,248.
(viii) The cost to the Company of supplemental life insurance coverage under the
Supplementary Insurance Plan as follows: W. S. Lee, $30,121; W. H. Grigg,
$9,428; S. C. Griffith, Jr., $3,986; R. B. Priory, $1,204; and W. A.
Coley, $1,438.
(ix) The economic benefit of split-dollar life insurance coverage pursuant to
the Estate Conservation Plan as follows: W. S. Lee, $3,200; W. H. Grigg,
$775; S. C. Griffith, Jr., $438; R. B. Priory, $60; and W. A. Coley, $82.
The Company has an Employees' Retirement Plan (the Retirement Plan) and a
Supplemental Retirement Plan (the Supplemental Plan) (collectively, the
Retirement Plans) for employees of the Company and certain of its subsidiaries.
The Supplemental Plan will provide certain officers with retirement benefits
which they otherwise would have received under the Retirement Plan formula but
which may not be paid to them under the Retirement Plan due to limitations on
benefits imposed by the Internal Revenue Code or occasioned through operation of
the Retirement Plan and the Compensation Deferral Plan.
In general, employees who have attained age 21 are eligible to participate
in the Retirement Plans. In the event of retirement at or after age 65, an
eligible employee with 30 years of creditable service will, in general, be
entitled to payments from the Retirement Plans which, when added to such
employee's primary Social Security benefits, will provide such employee for life
with total annual retirement benefits ranging from 60% to 90% of highest average
annual compensation during any 60 consecutive month period of creditable
service. Benefits are also provided under the Retirement Plans in the event of
early retirement at or after age 55 with 10 years of creditable service or with
30 years of creditable service regardless of age and in the event of retirement
for disability. Surviving spouse benefits are available on an elective basis
with the participant bearing a portion of the incremental cost.
Employees who do not retire under the Retirement Plan but whose employment
terminates after they have completed at least five vesting credit years have
vested rights in benefits accrued prior to their termination date.
The Retirement Plan is wholly paid for by the Company and participating
subsidiaries, which have established a trust with a bank as trustee to which
contributions are made from time to time by the Company and participating
subsidiaries and from which the benefits under the Retirement Plan are paid. The
Supplemental Plan is administered by the Company and the benefits thereunder are
payable from the Company's general funds.
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The following table shows the estimated annual pension benefits payable
upon retirement (at age 65) under the Retirement Plans to persons in specified
remunerations and years-of-service classifications, allowing for reasonable
increases in existing compensation levels. The benefits listed in the table are
not subject to any deduction for Social Security benefits or other offset
amounts.
PENSION PLAN TABLE
<TABLE>
<S> <C> <C> <C> <C>
YEARS OF SERVICE
REMUNERATION 15 20 25 30
$100,000........................................................ $ 26,000 $ 35,000 $ 44,000 $ 53,000
150,000......................................................... 41,000 54,000 68,000 81,000
200,000......................................................... 55,000 73,000 91,000 110,000
250,000......................................................... 69,000 92,000 115,000 138,000
300,000......................................................... 83,000 111,000 139,000 167,000
350,000......................................................... 98,000 130,000 163,000 195,000
400,000......................................................... 112,000 149,000 187,000 224,000
450,000......................................................... 126,000 168,000 210,000 252,000
500,000......................................................... 140,000 187,000 234,000 281,000
550,000......................................................... 155,000 206,000 258,000 309,000
600,000......................................................... 169,000 225,000 282,000 338,000
650,000......................................................... 183,000 244,000 305,000 366,000
700,000......................................................... 197,000 263,000 329,000 395,000
750,000......................................................... 212,000 282,000 353,000 423,000
800,000......................................................... 226,000 301,000 377,000 452,000
</TABLE>
(1) Compensation covered by the Retirement Plans in 1993, 1992 and 1991 for each
executive officer listed in the above Summary Compensation Table is equal to
the amount shown as salary under such table.
(2) The number of years of service credited under the Retirement Plan at
December 31, 1993 was 30 for W. S. Lee, 30 for W. H. Grigg, 29 for S. C.
Griffith, Jr., 17 for R. B. Priory, and 28 for W. A. Coley. The maximum
number of years of service for benefits is 30.
(3) Amounts shown above represent estimated 50% joint and survivor annuity
benefits calculated by the Social Security integration formula.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph on page 14 shall not be incorporated by reference into any
such filings.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company, under the supervision of the Compensation Committee of the
Board of Directors, has developed and implemented compensation programs which
seek to provide a direct relationship between compensation provided to executive
officers and corporate performance.
COMPENSATION PHILOSOPHY
The Company has adopted a pay policy of setting total cash compensation for
its entire workforce between the 50th and 75th percentiles of the marketplace.
Consistent with this policy, it is the philosophy of the Board of
11
<PAGE>
Directors to set total compensation for its executive officers between the 50th
and 75th percentile. The marketplace for executive officers is defined as the
group of electric utilities comprising the Standard & Poor's Electric Utility
Index.
Total cash compensation for executive officers consists of base salary,
which is subject to annual merit increases, and incentives, which are awarded
through the Employee Incentive Plan and the Executive Long-Term Incentive Plan.
The use of incentives is intended to result in a direct relationship between
total compensation and corporate performance. Opportunity to increase
compensation beyond the 50th percentile of the marketplace is provided through
incentives, based on corporate performance. Similarly, compensation can fall
below the 50th percentile if corporate performance measures are not achieved and
incentives are not paid. The goal is to create a competitive compensation
program that will attract and retain quality leadership at the Company and link
compensation directly to corporate performance.
COMPENSATION PROCESS
In the early part of each year the Compensation Committee reviews the
compensation of the Company's executive officers (other than the Chief Executive
Officer) with the Chief Executive Officer and sets the compensation of the
executive officers for such year with modifications as it deems appropriate. The
review is based on performance evaluations of the individual executive officers
and on a comparison of their compensation with compensation and financial
performance data from the S&P Electric Utility Index companies using the
information provided in surveys such as the Edison Electric Institute Executive
Compensation Survey.
The Compensation Committee also reviews the compensation of the Chief
Executive Officer with assistance from the Company's human resources staff. It
recommends adjustments as appropriate, based on competitive compensation data
from the S&P Electric Utility Index companies, the Committee's assessment of the
Chief Executive Officer's performance and its expectation as to his future
contributions in leading the Company. The Committee's recommendation on
compensation for the Chief Executive Officer is ratified by the Board of
Directors, with inside directors neither present nor participating.
The Company is currently formulating a policy with respect to qualifying
compensation paid to its executive officers for deductibility under Section
162(m) of the Internal Revenue Code. As the need may arise, the Company will
consider the effect, if any, the provision may have upon the deductibility of
future executive compensation.
1993 COMPENSATION SUMMARY
MERIT INCREASES IN BASE SALARY
Increases in base salary were granted in February 1993 to the named
executives for 1993 based on individual and corporate performance for the 1992
performance period. Increases varied based upon individual performance, as
measured through the Company's job performance evaluation program, the
individual's current compensation relative to the competitive marketplace, and
achievement of corporate performance objectives.
The 1992 corporate performance measures taken into consideration were:
(i) total operating and maintenance cost per kilowatt hour sold not to
exceed 3.17 cents;
(ii) capital cost per customer equivalent not to exceed $136.54; and
(iii) return on equity of at least 12.5%, after adjustment to remove
the effects of the remand to the North Carolina Utilities Commission of the
1986 retail rate order.
12
<PAGE>
Having achieved these pre-established measures in 1992, the named
executives received increases in base salary ranging from 6.1% to 9.4%, which
were consistent with the Company's 1993 merit increase guidelines. These
guidelines provide guidance in salary decisions for the salaried workforce. The
Chief Executive Officer received a salary of $795,833 in 1993, representing a
6.1% increase over 1992. In recommending the increase of the Chief Executive
Officer to the Board, the Compensation Committee considered the attainment of
the corporate performance measures listed above, as well as W. S. Lee's
individual performance and his leadership in the electric utility industry.
INCENTIVE COMPENSATION
Short-term incentive awards were made through the 1993 Employee Incentive
Plan to full and part-time employees of the Company, including the named
executives, based on a pre-established awards formula and the achievement of
corporate and business unit measures established in late 1992. Examples of
business unit measures included reducing unit operating and maintenance costs
and maximizing power system generation. The formula awarded points based upon
the degree of achievement of each business unit's measures, with points adjusted
up or down based on the Company's return on equity. These points determined the
percentage of base salary awarded to each recipient. Varying point totals were
awarded among business units based upon the level of each unit's achievement of
its unit measures. The 1993 minimum return on equity threshold of 12.2% was
achieved and the named executives received awards from this plan ranging from
2.42% to 2.96% of base salary. The Chief Executive Officer received an award of
$19,259, representing 2.42% of his base salary. The differences in percentages
among the five executives reflect differences in business unit measures.
The Compensation Committee approved the implementation of a new Executive
Long-Term Incentive Plan to commence in 1992. The Plan was developed by the
Company with the advice of independent compensation consultants. The Plan has a
three-year phase-in period, with the initial performance periods in 1992 and
1993 covering one-year periods. Awards under the Plan were based on achievement
of three internal measures at minimum, target or maximum corporate performance
levels. The Plan requires that a minimum return on equity threshold of 12.5% be
achieved in order for awards to be made. For 1993, plan measures, target
performance levels and their respective weights were:
(i) return on equity of 13.0% (50%);
(ii) total operating and maintenance cost per kilowatt hour delivered
of 2.62 cents (30%); and
(iii) capital cost per customer equivalent of $145.50 (20%).
1993 maximum goals for return on equity and capital cost per customer
equivalent were 13.6% and $140.54, respectively. The Company exceeded these
maximum goals in 1993 by achieving a return on equity of 13.7% and capital cost
per customer equivalent of $123.65. The Company exceeded its minimum goal
regarding total operating and maintenance cost per kilowatt hour delivered of
2.67 cents, by achieving a level of 2.65 cents. As a result, the four named
executives received awards of 24.49% and the Chief Executive Officer received an
award of 28.16% of their respective base salaries as established in February,
1993.
This report has been provided by the Compensation Committee.
BUCK MICKEL, Chairman
PAUL H. HENSON
REECE A. OVERCASH, JR.
13
<PAGE>
PERFORMANCE GRAPH
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE
TOTAL RETURN AMONG DUKE POWER COMPANY,
S&P 500 INDEX AND S&P ELECTRIC UTILITY INDEX
Assumes $100 invested on Dec. 31, 1988
in Duke Power Common Stock, S&P 500
Index and S&P Electric Utility Index.
Assumes reinvestment of dividends.
(Performance Graph appears here--see appendix)
DIRECTORS' FEES
Directors who are not employees of the Company received during 1993 fixed
annual compensation of $24,000 and a fee of $1,000 for attendance at each
meeting of the Board of Directors, each committee meeting and other functions of
the Company requiring their presence, together with expenses of attendance. In
addition, each of the Chairmen of the Audit, Compensation, Nominating, Corporate
Performance Review and Finance Committees received annual compensation of
$3,500. A portion of the attendance fees for each nonemployee director is placed
in trust for the director's benefit and invested in Common Stock of the Company
at market price. An additional portion of annual compensation or attendance
fees, at the option of such director, may be placed in trust. Upon termination
of service, the director will then receive shares held for his or her benefit by
the trustee of the trust, including shares purchased with reinvested dividends.
Nonemployee directors also participate
14
<PAGE>
in retirement and compensation deferral plans which are intended to provide
benefits substantially similar to those afforded by the Company to directors who
are employees.
INFORMATION REGARDING THE BOARD OF DIRECTORS
The Board of Directors of the Company had a total of seven meetings during
1993. No director attended fewer than 75% of the total of such Board meetings
and the meetings of the committees upon which he or she served during the period
for which he or she was a director.
Among its standing committees the Company has an Audit Committee, a
Compensation Committee, a Nominating Committee, a Corporate Performance Review
Committee and a Finance Committee.
The Audit Committee consists of Robert L. Albright, G. Alex Bernhardt, Joe
T. Ford, George R. Herbert and James V. Johnson. This Committee recommends to
the Board of Directors the engagement of the independent auditors for the
Company, determines the scope of the auditing of the books and accounts of the
Company, reviews the reports submitted by the auditors, examines procedures
employed in connection with the Company's internal audit program and makes
recommendations to the Board of Directors as may be appropriate. There were six
meetings of this Committee during 1993.
The Compensation Committee consists of Paul H. Henson, Buck Mickel and
Reece A. Overcash, Jr. This Committee sets the salaries and other compensation
of all officers and directors of the Company and all other employees whose
salaries are at a monthly rate at or above a level as determined from time to
time by the Board of Directors, except that this Committee makes recommendations
to the Board of Directors regarding the salary of the Chief Executive Officer
for ratification by the Board, without the presence or participation of those
directors who are also employees of the Company. There were six meetings of this
Committee during 1993.
The Nominating Committee recommends to the Board of Directors the size and
composition of the Board of Directors and persons to be considered as successors
to the Chief Executive Officer. The Nominating Committee will consider nominees
for the Board of Directors recommended by shareholders. Recommendations by
shareholders should be forwarded to the Secretary of the Company and should
identify the nominee by name and provide pertinent information concerning his or
her background and experience. A shareholder recommendation must be received at
least ninety days prior to the date of the annual meeting of shareholders. The
Nominating Committee, consisting of Paul H. Henson, W. W. Johnson, W. S. Lee and
Reece A. Overcash, Jr., met twice in 1993.
The Corporate Performance Review Committee consists of Crandall C. Bowles,
Paul H. Henson, Max Lennon and Buck Mickel. The Corporate Performance Review
Committee monitors and makes recommendations for improving the overall
performance of the Company, and, at the policy level, determines the adequacy of
and support for the Company's emphasis on continuous improvement. The Committee
met six times during 1993.
The Finance Committee consists of W. H. Grigg, George Dean Johnson, Jr.,
W. W. Johnson, W. S. Lee and Reece A. Overcash, Jr. This Committee directs all
of the financial and fiscal affairs of the Company and makes recommendations to
the Board of Directors regarding dividend, financing and fiscal policies of the
Company. There were seven meetings of this Committee during 1993.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon recommendation of the Audit Committee, has
reappointed, subject to shareholder ratification, the firm of Deloitte & Touche,
certified public accountants, as independent auditors to make
15
<PAGE>
an examination of the accounts of the Company for the year 1994. If the
shareholders do not ratify this appointment, other certified public accountants
will be considered by the Board of Directors upon recommendation of the Audit
Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
A representative of Deloitte & Touche will, as in prior years, attend the
annual meeting and will have the opportunity to make a statement and be
available to respond to appropriate questions.
OTHER BUSINESS
The Board of Directors of the Company knows of no other matter to come
before the meeting. However, if any matter requiring a vote of the shareholders
should arise, it is the intention of the persons named in the enclosed form of
proxy for holders of Common Stock to vote such proxy in accordance with their
best judgment.
PROPOSALS FOR 1995 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1995 annual meeting
must be received by the Company by November 22, 1994 for possible inclusion in
the proxy material relating to such meeting.
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1993, WHICH IS REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, WILL BE MADE AVAILABLE TO SHAREHOLDERS TO WHOM THIS PROXY
STATEMENT IS MAILED, WITHOUT CHARGE, UPON WRITTEN REQUEST TO ALLEN STEWART,
INVESTOR RELATIONS DEPARTMENT, DUKE POWER COMPANY, P.O. BOX 1005, CHARLOTTE,
N.C. 28201-1005.
By order of the Board of Directors,
ELLEN T. RUFF
March 21, 1994 SECRETARY
16
<PAGE>
[Form of Proxy]
TO OUR SHAREHOLDERS:
Please let me encourage you to attend Duke Power's
annual shareholders meeting on April 28, 1994. This
year's meeting will begin at 10 a.m. in the Electric
Center's O. J. Miller Auditorium in Charlotte. I
hope to see you if you are able to attend.
Please take a moment to read the enclosed proxy and
return your ballot as soon as possible. Duke Power
benefits greatly from the participation of informed,
involved owners. Making your voice heard is one of
the best ways you can contribute to your Company's
success.
As always, we appreciate your continued interest
and support.
Sincerely,
W.S. Lee
Chairman of the Board and President
Directors recommend a vote "For" Items A and B below
A. Election of the six directors who will constitute Class III
of the Board of Directors. (pages 2-4)
(Duke Power Citizenship Service logo appears here)
To vote your shares for all director nominees, or to withhold
voting for all nominees, fill in the appropriate oval. If you
do not wish your shares voted for a particular director
nominee, fill in the "For*" oval and enter the name(s) of the
exception(s) in the space provided.
B. Ratification of Auditors, (page 15)
If you plan to attend the meeting, please indicate on proxy below
and see reverse for additional information. This detachable portion
may be presented for admission to the meeting.
(arrow)(arrow)BEFORE MAILING, PLEASE DETACH THIS PORTION.(arrow)(arrow)
(Duke Power Citizenship Service logo appears here) DUKE POWER
Please use a dark color:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Withhold
CORRECT MARK () A. For All For* Authority B. For Against Abstain
INCORRECT MARK ((check mark)) (x) (.) (.) (.) (.) (.) (.) (.)
</TABLE>
*Except for the following:
If you plan to attend
meeting, please check: ( )
SHARES HELD AS OF MARCH 4, 1994
Shares Account Number
Sign here as X
name(s)
appears above X Date ,1994
Please sign this proxy and return it promptly whether or not you
plan to attend the meeting. If signing for a corporation or
partnership or as agent, attorney or fiduciary, indicate the
capacity in which you are signing. Each joint owner should sign.
If you do attend the meeting and decide to vote by ballot, such
vote will supersede this proxy.
<PAGE>
Duke Power Company (Map appears here--
Annual Meeting of Shareholders see appendix)
April 28, 1994 at 10:00 a.m.
O.J. Miller Auditorium - Electric Center
526 South Church Street
Charlotte, NC
DUKE POWER COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints W.S. Lee, R.J. Osborne and Ellen T. Ruff,
and each of them, proxies, with the powers the undersigned would possess
if personally present, and with full power of substitution, to vote all
shares of Common Stock of Duke Power Company of the undersigned at the
annual meeting of shareholders to be held in the Electric Center, 526
South Church Street, Charlotte, North Carolina, on April 28, 1994, and
at any adjournment thereof, upon all subjects that may come before the
meeting, including the matters described in the proxy statement furnished
herewith, subject to any directions indicated on the reverse side of this
card. If no directions are given, the individuals designated above will
vote for the election of all Class III director nominees, in accord with
the directors' recommendation on the other subject listed on the reverse of
this card and at their discretion on any other matter that may come before
the meeting.
Your vote for the election of Class III directors may be indicated on the
reverse. Nominees are - G. Alex Bernhardt, Crandall C. Bowles, Robert J.
Brown, George Dean Johnson, Jr., James G. Martin, and R. B. Priory.
If you do not sign and return a proxy, or attend the meeting, your shares
cannot be voted.
Please sign on reverse and return promptly in the enclosed return envelope.
<PAGE>
[Alternative Form of Proxy for Certain Employee
Stock Plan Shareholders]
TO PARTICIPANTS OF THE DUKE POWER COMPANY STOCK
COMPANY STOCK PURCHASE-SAVINGS PROGRAM AND/OR
EMPLOYEE STOCK OWNERSHIP PLAN (ESOP):
The enclosed proxy material is being sent to you as
a participant in one or both of the above named plans.
You are the beneficial owner of the shares credited
to your account(s) and are entitled to direct the
voting of these shares of all matters presented to
shareholders at the Annual Meeting on April 28,
1994.
If you do not take advantage of the opportunity to
vote your shares, your Stock Purchase-Savings Program
shares will be voted according to the rules of the
New York Stock Exchange in a manner which may not
reflect your wishes. Your ESOP shares will not be
voted at the meeting of shareholders if you do
not sign and return a proxy or attend the meeting.
I would therefore urge you to complete and return
the enclosed proxy even though you may have
already returned a proxy for the other shares you
own.
W.S. Lee
Chairman of the Board and President
Directors recommend a vote "For" Items A and B below
A. Election of the six directors who will constitute Class III
of the Board of Directors. (pages 2-4)
(Duke Power Citizenship Service logo appears here)
To vote your shares for all director nominees, or to withhold
voting for all nominees, fill in the appropriate oval. If you
do not wish your shares voted for a particular director
nominee, fill in the "For*" oval and enter the name(s) of the
exception(s) in the space provided.
B. Ratification of Auditors, (page 15)
(arrow)(arrow)BEFORE MAILING, PLEASE DETACH THIS PORTION.(arrow)(arrow)
(Duke Power Citizenship Service logo appears here) DUKE POWER
Please use a dark color:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Withhold
CORRECT MARK () A. For All For* Authority B. For Against Abstain
INCORRECT MARK ((check mark)) (x) (.) (.) (.) (.) (.) (.) (.)
</TABLE>
*Except for the following:
If you plan to attend
meeting, please check: ( )
SHARES HELD AS OF MARCH 4, 1994
ESOP Stock Purchase-
Savings Program
Sign here as X
name(s)
appears above X Date ,1994
Please sign this proxy and return it promptly whether or not you
plan to attend the meeting. If signing for a corporation or
partnership or as agent, attorney or fiduciary, indicate the
capacity in which you are signing. Each joint owner should sign.
If you do attend the meeting and decide to vote by ballot, such
vote will supersede this proxy.
<PAGE>
DUKE POWER COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints W.S. Lee, R.J. Osborne and Ellen T. Ruff,
and each of them, proxies, with the powers the undersigned would possess
if personally present, and with full power of substitution, to vote all shares
of Common Stock of Duke Power Company of the undersigned at the annual meeting
of shareholders to be held in the Electric Center, 526 South Church Street,
Charlotte, North Carolina, on April 28, 1994, and at any adjournment thereof,
upon all subjects that may come before the meeting, including the matters
described in the proxy statement furnished herewith, subject to any directions
indicated on the reverse side of this card. If no directions are given, the
individuals designated above will vote for the election of all Class III
director nominees, in accord with the directors' recommendation on the other
subject listed on the reverse of this card and at their discretion on any
other matter that may come before the meeting.
Your vote for the election of Class III directors may be indicated on the
reverse. Nominees are - G. Alex Bernhardt, Crandall C. Bowles, Robert J.
Brown, George Dean Johnson, Jr., James G. Martin, and R. B. Priory.
If you do not take advantage of the opportunity to vote your shares, your Stock
Purchase-Savings Program shares will be voted according to the rules of the
New York Stock Exchange in a manner which may not reflect your wishes. Your
ESOP shares will not be voted at all.
Please sign on reverse and return promptly in the enclosed return envelope.
***************************************************************************
APPENDIX
On the Dear Shareholder page the signature of William S. Lee appears where
indicated.
On Pages 2 through 8 corresponding photos of nominees and directors
listed appears next to each nominee's or director's name.
On Page 14 the Performance Graph appears where indicated. The plot
points are as listed below:
1988 1989 1990 1991 1992 1993
Duke Power Co. $100 $129 $149 $180 $195 $239
S&P 500 $100 $132 $128 $166 $179 $197
S&P Electric Utility Index $100 $133 $137 $178 $188 $212
On the front side of each Proxy Card the Duke Power Citizenship Service
logo appears in the background behind the text that starts with
"To vote your shares" . The Duke Power Citizenship Service logo also
appears before the text "Please use a dark color" on both proxy cards.
On the back side of the "To Our Shareholders" proxy card a map of
a portion of the central business district of Charlotte, N.C.,
where the Company's main office is located, appears where indicated.
