SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
DUKE POWER COMPANY
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends its Annual Report for the
fiscal year ended December 31, 1994, on Form 10-K as filed with the
Securities and Exchange Commission on March 31, 1995, as follows:
By including as an Exhibit thereto the registrant's Annual
Report on Form 11-K with respect to the Stock Purchase-Savings
Program for Employees and the Employees' Stock Ownership Plan of
Duke Power Company for the fiscal years ended October 31, 1994
and December 31, 1994, respectively.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by
the undersigned, thereunto duly authorized.
DUKE POWER COMPANY
By____________________________
Ellen T. Ruff
Date: April 26, 1995 Secretary
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended October 31, 1994
of
DUKE POWER COMPANY STOCK PURCHASE-SAVINGS PROGRAM FOR EMPLOYEES
and
For the Year Ended December 31, 1994
of
DUKE POWER COMPANY EMPLOYEES' STOCK OWNERSHIP PLAN
Issuer of Securities held pursuant to the Program and Plan is
DUKE POWER COMPANY, 422 South Church Street,
Charlotte, North Carolina 28242-0001
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DUKE POWER COMPANY
STOCK PURCHASE-SAVINGS PROGRAM FOR EMPLOYEES
Statement of Participants' Investment as of October 31, 1994 and 1993,
Statement of Changes in Participants' Investment for the fiscal years
ended October 31, 1994, 1993 and 1992, Supplemental Schedules and
Independent Auditors' Report
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TABLE OF CONTENTS Page
Independent Auditors' Report
Financial Statements 2
Statement of Participants' Investment as
of October 31, 1994 and 1993 3
Statement of Changes in Participants'
Investment for the fiscal years
ended October 31, 1994, 1993 and 1992 4
Notes to Financial Statements 5-10
Schedule I - Investments in Securities 11
Schedule II - Participants' Investment 12-13
Schedule III - Changes in Participants'
Investment 14-15
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INDEPENDENT AUDITORS' REPORT
Duke Power Company Stock Purchase-Savings Program for Employees:
We have audited the accompanying Statement of Participants' Investment
of the Duke Power Company Stock Purchase-Savings Program for Employees
(the Program) as of October 31, 1994 and 1993, and the related Statement
of Changes in Participants' Investment for each of the three years in
the period ended October 31, 1994. These financial statements are the
responsibility of the Program's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the participants' investment in the Program at
October 31, 1994 and 1993 and the changes in participants' investment
for each of the three years in the period ended October 31, 1994 in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements of the Program taken as a whole. The
supplemental information of investment in securities, participants'
investment and changes in participants' investment is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding participants'
investment and changes in participants' investment by the individual funds,
and is not a required part of the basic financial statements. This supplemental
information is the responsibility of the Program's management. Such
supplemental information by fund has been subjected to the auditing procedures
applied in our audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
Deloitte & Touche LLP
Charlotte, North Carolina
April 21, 1995
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PAGES 3-4
STATEMENTS OF PARTICIPANTS' INVESTMENT AND
STATEMENTS OF CHANGES IN PARTICIPANTS' INVESTMENT
FILED UNDER FORM SE.
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DUKE POWER COMPANY
STOCK PURCHASE-SAVINGS PROGRAM FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PROGRAM
Purpose and Participation
The purpose of the Duke Power Company Stock Purchase-Savings
Program for Employees (the "Program") is to provide an opportunity for
eligible employees of Duke Power Company (the "Company") and its
affiliates, Crescent Resources, Inc., Nantahala Power and Light Company,
Duke Energy Corp., and Duke Engineering & Services, Inc., to enhance
their long-range financial security through tax deferred savings with
the benefit of contributions by the employer, and to acquire an interest
in the Company through ownership of Duke Power Company Common Stock
("Common Stock"), thus enhancing the incentive for employees to contribute
to the success of the Company.
Contributions
A participant may make contributions to the Program by authorizing
payroll reductions from eligible earnings as defined in the Program.
In addition to matched contributions ("Deferrals"), a participant may
authorize additional payroll reductions without matching employer
contributions ("Additional Deferrals"). The employer contributes out of
current or accumulated earnings an amount equal to 100% of the amount of
Deferrals in each month. The Deferrals which a participant may elect
range from 1.5 percent to 5 percent of eligible earnings, depending upon
years of employment. The Additional Deferrals which a participant may
elect are dependent upon years of employment and the participant's level
of compensation. Both the Deferrals and Additional Deferrals of some
highly compensated participants may be limited by various provisions of
the Internal Revenue Code. All employee Deferrals and Additional
Deferrals are exempted from federal and state income tax withholdings.
However, both are subject to payroll taxes.
Investments
Prior to April 1, 1993, participants could invest only in Common Stock or in
U.S. Savings Bonds. The employer matching contribution was always invested in
Common Stock. Beginning on April 1, 1993, new investment options were offered
to those participants who did not have U.S. Savings Bonds in their account.
Participants who continue to hold U.S. Savings Bonds were restricted to
investing in Common Stock and Savings Bonds; however, U.S. Savings Bonds
were eliminated as an investment option effective on and after November
1, 1993. On and after April 1, 1993, the employer matching contribution
will continue to be invested in the Duke Power Company Common Stock.
Program participants may invest, subject to limitations discussed below,
the money in their account in any or all of the funds offered in the
Program. Each
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participant buys "units" of a fund based on its market
price. The value of an account is updated daily. Initially, the total
amount of the participants' accounts was transferred to the Duke Power
Company Common Stock Fund. Between April 1, 1993, and March 31, 1994,
participants could transfer up to 10 percent per month of their
investment in the Duke Power Company Common Stock Fund, excluding
unmatured employer matching contributions, to any of the other funds.
After April 1, 1994, the 10 percent limit no longer applies. Throughout
the plan year, the following funds were offered for investment:
(bullet)American Funds New Perspective - Objective is long-term
capital growth through
worldwide investments.
(bullet)Dreyfus General Money Market Fund, Inc. - Diversified, open-ended
mutual fund that seeks to
provide as high a level of
current income as is
consistent with the
preservation of
capital and maintenance
of liquidity.
(bullet)Dreyfus Peoples Index Fund, Inc. - Objective is to provide
investment results that
correspond to the price
and yield performance of
publicly traded common
stocks in the aggregate,
as represented by the
Standard & Poor's 500
Composite Stock Price
Index.
(bullet)Duke Power Common Stock Fund - Consists solely of Duke
Power Company Common Stock
and a small percentage of
uninvested cash that may
be used to cover loans,
transfers, and
distributions.
(bullet)Kemper U.S. Government Securities Fund- Offers high current
income, liquidity and
security of principal.
(bullet)Twentieth Century Balanced Investors Fund -Objective is capital
growth and current income.
The Company reserves the right to change the investment funds offered
from time to time as conditions merit. Units in any fund that is
deleted would be liquidated and transferred to another fund of the
participant's choice. The selection from available investment funds is the
sole responsibility of each participant.
Participants' Accounts
Monthly, the participants' deductions and employer contributions for
Common Stock are applied to the purchase of shares. Shares may be
issued directly by the Company or obtained by open market purchase. The
shares are allocated to the individual accounts of the participants in
proportion to the amounts of their deductions and related employer
contributions. Dividends on Common Stock are
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applied in the same manner, and the purchased shares are allocated to
individual accounts in proportion to the shares on which the dividends
are paid.
The number of participant accounts in the Program for the class years
ended October 31, 1994, 1993 and 1992 were 19,085, 19,097 and 19,711
respectively.
Vesting and Distribution
Prior to April 1, 1993, only the employer contributions on behalf of any
employee with at least five years of service were vested and were not
subject to forfeiture. As of April 1, 1993, all Company contributions
are 100% vested for all participants. The participants' Deferrals,
Additional Deferrals, and employer contributions during the program year
are paid into a class formed for that year. At the end of the program
year, the class is closed and no further payments for that class are
made. The participants' deductions and employer contributions and
earnings thereon, excluding the 401(k) plan (see Note 4), including vacation
pay contributions and performance goals contributions, may be distributed to
the participants upon maturity of each class year or may be retained in
the Program.
As of April 1, 1993, automatic distributions of maturing
program year funds were discontinued. Instead, program participants were
able to withdraw matured funds at any time. A cash payout option has
also been added to the program, permitting participants to take
withdrawals in either Duke Power Company Common Stock or cash.
Early withdrawals of a participant's payroll deductions are permitted
(excluding the 401(k) plan, except under certain circumstances).
Also, under the 401(k) plan, employees may borrow, with some
limitations, from their account. The loan interest rate is based on the
rate charged by the Trustee (See Note 5) on similar commercial loans and
the normal repayment period can be up to 60 months (See Note 6).
The liability for distributions to matured classes is estimated at the
Program's year end based on the October 31st market price of Duke Power
Company's Common Stock.
Rights Upon Termination
The Company expects and intends to continue the Program indefinitely,
but has reserved the right to amend, suspend or terminate the Program at
any time. In the event of termination of the Program, the net assets of
the Program would be distributed to the participants based on the
balances in their individual accounts at the date of termination.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting.
Administrative Costs
The Company pays all administrative costs relating to the Program.
3. APPRECIATION IN MARKET VALUE OF INVESTMENTS
The total cost, market value and net change in unrealized appreciation
in market value of Duke Power Company Common Stock and other fund
investments at October 31, 1994, 1993 and 1992 are summarized in the
following schedule:
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PAGE 9
APPRECIATION OF MARKET VALUE OF INVESTMENTS
FILED UNDER FORM SE.
4. TAX CONSEQUENCES OF THE PROGRAM
The trust which forms a part of the Program is exempt from federal
income tax under the provision of Section 501(a) of the Internal Revenue
Code.
Program participants are not taxed on either the income earned or
employer contributions until such time as distributions are made. Also,
under the 401(k) plan, employees' deductions from their pay are based on
pre-tax earnings. Therefore, the employees' current taxable income, and
thus current income taxes, are reduced.
As a result of the Tax Reform Act of 1986, the Internal Revenue Service
on January 1, 1987, began imposing a 10 percent additional tax on the
taxable portion of a withdrawal or distribution from the Program. This tax is
in addition to regular income tax. Distributions after age 59 1/2 or upon
separation from service after attaining the age 55, disability or death are
not subject to the additional tax. Also exempt are qualifying distributions
that are rolled over to an Individual Retirement Account (IRA). Previously,
the rollovers were allowed only for certain distributions (e.g. termination
of employment). Beginning January 1, 1993, a change in the Internal
Revenue Code allows any distribution to be rolled over to a qualified
IRA.
Also, effective January 1, 1993, the Code requires in some cases that
20% of the taxable portion of any distribution other than a distribution
of Duke Power Company Common Stock be withheld for federal income tax.
Withholding is not required when the Trustee for the Program transfers
the distribution directly to an IRA sponsored by the participant.
5. THE TRUSTEE
All Program assets are held by the Trustee, Wachovia Bank of North
Carolina, N.A., Winston-Salem, North Carolina.
6. EMPLOYEE LOANS
Effective November 1, 1992, the Program was amended to enable a
participant to borrow up to 100 percent of his/her vested account
balance. Prior to that date, a participant could borrow only 50 percent
of his/her vested account balance.
7. ACCOUNTING FOR EMPLOYEE LOANS
For plan year ending October 31, 1993, a change in the accounting method
used to report employee loans took place. The effect of this change was
to increase participants' investment by $17,542,988.
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PAGES 11-15.
SUPPLEMENTAL SCHEDULES FILED UNDER FORM SE.
Insert pages 11-15.
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DUKE POWER COMPANY
EMPLOYEES' STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Plan Distributions as of
December 31, 1994 and 1993, Statements of Changes in Net Assets
Available for Plan Distributions for the Years Ended December 31, 1994,
1993 and 1992, and Independent Auditors' Report
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TABLE OF CONTENTS
Page
Independent Auditors' Report 3
Financial Statements
Statements of Net Assets Available for Plan
Distributions as of December 31, 1994 and 1993 4
Statements of Changes in Net Assets Available for
Plan Distributions for the Years Ended December
31, 1994, 1993 and 1992 5
Notes to Financial Statements 6-9
NOTE: Schedules I, II and III are omitted because of the
absence of conditions under which they are
required, or because the required information is
included in the financial statements or notes
thereto.
2
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INDEPENDENT AUDITORS' REPORT
Duke Power Company Employees' Stock Ownership Plan:
We have audited the accompanying Statements of Net Assets Available
for Plan Distributions of Duke Power Company Employees' Stock
Ownership Plan (the Plan) as of December 31, 1994 and 1993, and the
related Statements of Changes in Net Assets Available for Plan
Distributions for each of the three years in the period ended
December 31, 1994. These financial statements are the
responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Plan at December
31, 1994 and 1993 and the changes in its net assets available for
plan distributions for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Charlotte, North Carolina
April 21, 1995
3
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DUKE POWER COMPANY EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN DISTRIBUTIONS
AS OF DECEMBER 31, 1994 AND 1993
(DOLLARS IN THOUSANDS)
NOTES 1994 1993
INVESTMENTS IN DUKE POWER COMPANY
COMMON STOCK - At quoted market
value (1994 - 1,259,953 shares;
1993 - 1,343,861 shares) 4 $48,039 $56,946
LESS LIABILITY FOR: 1
Distributions payable to
matured class participants 0 3,003
Distributions payable to
participants 42 0
Distributions payable to
terminated participants 334 44
TOTAL LIABILITIES $ 376 $ 3,047
NET ASSETS AVAILABLE FOR PLAN
DISTRIBUTIONS $47,663 $53,899
See notes to financial statements.
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DUKE POWER COMPANY EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN DISTRIBUTIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(DOLLARS IN THOUSANDS)
NOTES 1994 1993 1992
INCREASES/(DECREASES)
Dividends and interest $2,421 $2,470 $2,517
Net increase (decrease) in
unrealized appreciation in
market value of Duke Power
Company common stock 4 (8,051) 5,556 (5,130)
Distributions and realized
gain related to distributions
of appreciated securities: 1
Matured class
participants 1,096 (1,865) 1,628
Terminated participants (1,316) (669) (12)
Participants electing
distribution of dividends (386) (463) (522)
NET INCREASE / (DECREASE) (6,236) 5,029 (1,519)
BALANCE, BEGINNING OF YEAR 53,899 48,870 50,389
BALANCE, END OF YEAR $47,663 $53,899 $48,870
See notes to financial statements.
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DUKE POWER COMPANY
EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
Purpose and Participation - Duke Power Company and its affiliates,
Crescent Resources, Inc. and Duke Engineering and Services, Inc.,
(collectively referred to as the "Employing Company"), have adopted
an Employee Stock Ownership Plan (the Plan) for their employees.
The Plan is a stock bonus plan designed to promote investment by
employees in Duke Power Company. Employees are eligible to
participate if they (1) have attained the age of eighteen on the
first day of the plan year, (2) have been employees for the three
immediately preceding calendar months, and (3) are not members of a
unit of employees covered by a collective bargaining agreement
which provides for retirement benefits not available to employees
generally. The plan year consists of a calendar 12 months.
The Plan was amended in December 1987 to allow participants to
elect to receive, in cash, dividends paid on shares held in their
accounts.
Contributions - Employing Company contributions to the Plan were
based on payroll-tax credits as provided by the "Economic Recovery
Tax Act of 1981." Contributions to the Plan were made in amounts
equal to one-half of one percent of the annual compensation of all
employees under the Plan as prescribed by the law. Beginning in
1987, the tax credit was repealed due to the Tax Reform Act of
1986. The Company has not made a contribution to the Plan since
1987 and does not anticipate making any further contributions to
the Plan at this time.
Participants' Accounts - Separate accounts by plan year are
maintained for each participant to accumulate any annual
allocations and dividends earned thereon.
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At December 31, 1994 there were 9,775 participant accounts in the
Plan, including 1,178 accounts of persons terminated from
employment who were eligible to receive their vested benefits.
Vesting and Distributions - The Plan provides for immediate
vesting. Distributions for a plan year are available at the end of
the seventh plan year after contributions are made. As of February
1994, all contributions have been held in the Plan for at least
seven years and are available for distribution to the participants.
Plan account balances may be distributed upon retirement or termination,
or funds may be left in the Plan until requested (up to age 70 1/2).
The liability for distributions payable to a matured class and
terminated participants is estimated at year end based on the year
end market price of Duke Power Company's common stock. Differences
between estimated distribution and actual distribution amounts are
reflected in the subsequent year's "distributions and realized gain
related to distribution of appreciated securities."
Right Upon Termination - The Employing Company has reserved the
right to amend or terminate the Plan, at any time, by resolution of
the Board of Directors of Duke Power Company and the Trustee. If
the Plan were terminated, all assets of the Plan would be
distributed to the individual participants based upon the balances
in their individual accounts at date of termination.
2. BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual
basis of accounting.
3. ADMINISTRATIVE COSTS
The Company pays all administrative costs relating to the Program.
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4. INVESTMENTS IN DUKE POWER COMPANY COMMON STOCK
The net change in unrealized appreciation in market value of
investments for the years ended December 31, 1994, 1993 and 1992
is as follows (dollars in thousands):
Net
Market Unrealized
Value Cost Appreciation
1994:
December 31, 1994 $48,039 $24,065 $23,974
December 31, 1993 56,946 24,921 32,025
Net Change $(8,907) $(856) $(8,051)
Net
Market Unrealized
Value Cost Appreciation
1993:
December 31, 1993 $56,946 $24,921 $32,025
December 31, 1992 51,773 25,304 26,469
Net Change $5,173 $(383) $5,556
Net
Market Unrealized
Value Cost Appreciation
1992:
December 31, 1992 $51,773 $25,304 $26,469
December 31, 1991 61,610 30,011 31,599
Net Change $(9,837) $(4,707) $(5,130)
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5. TAX CONSEQUENCES OF THE PLAN
The Plan, as amended, has been approved by the Internal Revenue
Service as a qualified employees' trust under Sections 401 and
409(a) of the Internal Revenue Code. The Plan is exempt from
income taxes under Section 501(a) of the Code.
Plan participants are not taxed on either the income earned or
Employing Company contributions until distributions are made.
Beginning January 1, 1990, the Internal Revenue Code imposed a 10
percent additional federal income tax on the taxable portion of the
Plan's distributions, unless the employee has reached age 59 1/2.
The 10 percent additional tax does not apply to certain
distributions that are specifically exempted by the Code:
termination of employment after reaching age 55, disability or
death. Also exempt are qualifying distributions that are rolled
over to an Individual Retirement Account (IRA). On or after
January 1, 1993, the Code requires, in some cases, that 20% of the
taxable portion of any distribution (other than a distribution of
Duke Power Company common stock) must be withheld for federal
income tax. Withholding is not required where the trustee for the
program transfers the distribution directly to an individual
retirement arrangement sponsored by the participant.
6. THE TRUSTEE
In accordance with terms of a trust agreement, the Trustee,
Wachovia Bank of North Carolina, N.A., holds all investments, and
makes distributions to participants.
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective
Amendment No. 11 to Registration Statement No. 2-72172 of Duke Power
Company on Form S-8 of our reports dated April 21, 1995, appearing in
this Annual Report on Form 11-K with respect to the Duke Power Company
Stock Purchase-Savings Program for Employees for the fiscal year ended
October 31, 1994 and the Duke Power Company Employees' Stock Ownership
Plan for the year ended December 31, 1994.
Deloitte & Touche LLP
Charlotte, North Carolina
April 21, 1995
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