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 ENERGY CORPORATION
-----------------------
(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, 1997, on Form 10-K as filed with the
Securities and Exchange Commission as follows:
By including as an Exhibit thereto the registrant's Annual
Report on Form 11-K with respect to the Retirement Savings
Plan and the Employees' Stock Ownership Plan of Duke Energy
Corporation for the year ended December 31, 1997.
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 ENERGY CORPORATION
By____________________________
Richard J. Osborne
Executive Vice President
and Chief Financial Officer
Date: June 26, 1998
<PAGE>
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 Year Ended December 31, 1997
of
DUKE ENERGY CORPORATION RETIREMENT SAVINGS PLAN
and
DUKE ENERGY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
Issuer of Securities held pursuant to the Plans is
DUKE ENERGY CORPORATION, 422 South Church Street,
Charlotte, North Carolina 28242-0001
<PAGE>
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We consent to the incorporation by reference in Registration Statement No.
333-34655 of Duke Energy Corporation on Form S-8 of our report dated May 8, 1998
on the Duke Energy Corporation Retirement Savings Plan for the year ended
December 31, 1997 and our report dated April 3, 1998 on the Duke Energy
Corporation Employees' Stock Ownership Plan for the year ended December 31,
1997, appearing in this Annual Report on Form 11-K.
Deloitte & Touche LLP
Charlotte, North Carolina
June 25, 1998
<PAGE>
DUKE ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
WITH INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1997 AND 1996
<PAGE>
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TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits With Fund Information,
December 31, 1997 4
Statement of Net Assets Available for Benefits With Fund Information,
December 31, 1996 5
Statement of Changes in Net Assets Available for Benefits With Fund
Information, For the Year Ended December 31, 1997 6
Statement of Changes in Net Assets Available for Benefits With Fund
Information, For the Two Months Ended December 31, 1996 7
Notes to Financial Statements 8 -12
SUPPLEMENTAL SCHEDULES:
Line 27a - Schedule of Assets Held for Investment Purposes 13
Line 27d - Schedule of Reportable (5%) Transactions 14
2
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INDEPENDENT AUDITORS' REPORT
----------------------------
Duke Energy Corporation Retirement Savings Plan:
We have audited the accompanying Statements of Net Assets Available for Benefits
of Duke Energy Corporation Retirement Savings Plan (the Plan) as of December 31,
1997 and 1996, and the related Statements of Changes in Net Assets Available for
Benefits for the year ended December 31, 1997, and for the two months ended
December 31, 1996. 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 net assets available for benefits of the Plan at December 31, 1997
and 1996, and the changes in net assets available for benefits for the year
ended December 31, 1997 and for the two months ended December 31, 1996 in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
supplemental schedules have been subjected to the auditing procedures applied in
our audits of the basic financial statements and, in our opinion, are 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
May 8, 1998
3
<PAGE>
DUKE ENERGY CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1997
(TO BE FILED UNDER COVER OF FORM SE)
- --------------------------------------------------------------------------------
4
<PAGE>
DUKE ENERGY CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1996
(TO BE FILED UNDER COVER OF FORM SE)
- --------------------------------------------------------------------------------
5
<PAGE>
DUKE ENERGY CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(TO BE FILED UNDER COVER OF FORM SE)
- --------------------------------------------------------------------------------
6
<PAGE>
DUKE ENERGY CORPORATION RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE TWO MONTHS ENDED DECEMBER 31, 1996
(TO BE FILED UNDER COVER OF FORM SE)
- --------------------------------------------------------------------------------
7
<PAGE>
DUKE ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FOR THE TWO MONTHS ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN:
Participation and Purpose
- -------------------------
Effective January 1, 1997, the name of the Duke Power Company Stock
Purchase-Savings Program for Employees was changed to the Duke Power Company
Retirement Savings Plan. On June 18, 1997 this plan name was changed to the Duke
Energy Corporation Retirement Savings Plan (the Plan) in accordance with the
terms of a merger agreement between Duke Power Company and PanEnergy Corp. The
Plan is sponsored by Duke Energy Corporation and its affiliates, Crescent
Resources, Inc., Duke Engineering & Services, Inc. (including its wholly-owned
subsidiaries DE&S Northwest, Inc. and Intera, Inc.), Nantahala Power and Light
Company (Nantahala), Duke Energy International , Inc., Duke Project Services,
Inc., and, new in 1997, DukeSolutions, Inc. (collectively referred to as the
"Employing Company").
Effective November 1, 1996, the plan year was changed from a fiscal year ending
on October 31 to a calendar year. The period from November 1, 1996 until
December 31, 1996 constituted a short plan year.
The purpose of the Plan is to provide an opportunity for eligible employees of
the Employing Company to enhance their long-range financial security through tax
deferred savings with the benefit of contributions by the Employing Company, to
diversify their investments under the Plan through optional selection among
certain mutual funds, and to acquire an interest in the Employing Company
through ownership of Duke Energy Corporation Common Stock (Common Stock), thus
enhancing the incentive for employees to contribute to the success of the
Employing Company. This defined contribution plan is subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
(ERISA).
Effective January 1, 1997 employees are eligible to enter and participate in the
Plan if they 1) have attained the age of eighteen and 2) have been an employee
throughout the three immediately preceding calendar months or have accrued 1,000
hours of service within a plan year. Prior to January 1, 1997 eligibility
requirements were similar, but employees were only allowed to join the Plan on
November 1, or May 1.
Contributions
- -------------
Participants may authorize payroll reductions from eligible earnings in the form
of company matched deferrals and non-company matched additional deferrals.
Effective January 1, 1997, employees may elect payroll reductions (subject to
certain limitations) of up to 10 percent of eligible earnings without regard to
years of service. Deferrals (subject to certain limitations) may range from 1
percent to 6 percent while the additional deferrals (subject to certain
limitations) may range from 1 percent to 4 percent. Both the deferrals and
additional deferrals of some highly compensated employees may be limited by
various
8
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provisions of the Internal Revenue Code. All deferrals and additional deferrals
are exempt from federal and state income tax withholding in the year they are
deferred, but both are subject to payroll taxes. Participant deferrals and
additional deferrals are intended to satisfy the requirements of Section 401(k)
of the Internal Revenue Code. The Employing Company shall contribute an amount
(subject to certain limitations) equal to 100 percent of the first 3 percent of
all deferrals and 50 percent of the next 3 percent of deferrals in any pay
period. Employing Company matching contributions are intended to satisfy the
requirements of Section 401(m) of the Internal Revenue Code, but they are not
subject to the restrictions of Section 401(k).
Prior to January 1, 1997 participants could elect deferrals from 1.5 percent to
5 percent of eligible earnings, depending upon years of employment. Participants
could also elect additional deferrals depending upon years of employment and
level of compensation. The Employing Company contributed an amount equal to 100
percent of deferrals in any pay period.
A participant who is employed by Nantahala is eligible to authorize deferrals
and additional deferrals in accordance with the provisions of the Plan
applicable on December 31, 1996. The Employing Company matching contribution for
an employee at Nantahala is based upon length of service.
Rollovers from Other Plans
- --------------------------
Rollovers from other plans represents amounts recorded when new employees who
elect enrollment in the Plan transfer account balances from other plans. The
majority of transfers during 1997 resulted from DukeSolutions, Inc.'s purchase
of an engineering company during the plan year.
Investments
- -----------
Subject to limitations discussed below, participants may invest the money in
their account in any or all of the funds offered in the Plan. Participants who
continue to hold U.S. Savings Bonds are restricted to investing in Duke Energy
Corporation Common Stock. Participants buy "units" of a fund based on its market
price. The value of an account is updated daily. Throughout the plan year, the
following funds were offered for investment:
o Duke Energy Corporation Common Stock Funds are invested solely in Duke
Energy Corporation Common Stock and
include a small percentage of
uninvested cash that may be used to
cover loans, transfers and
distributions.
o Dreyfus General Money Market Fund, Inc. The fund is invested in short-term
credit instruments including U.S.
Government securities, high quality
short-term securities of strong
corporations, certificates of
deposit, and other domestic and
foreign bank obligations. The fund
seeks to earn income at competitive
yields while preserving capital.
o Kemper U.S. Government Securities Fund The fund is invested in obligations
issued or guaranteed by the U.S.
government or its agencies. The fund
seeks high current income, liquidity
and
9
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security of principal. The value
of fund holdings fluctuates due to
changes in interest rates and other
market factors.
o Dreyfus S&P 500 Index Fund, Inc. The fund seeks to match the
investment results of the Standard &
Poor's (S&P) 500 Composite Stock
Price Index, which consists of 500
stocks selected by S&P to represent
a broad spectrum of the U.S.
economy.
o Twentieth Century Balanced Investors Fund The fund maintains approximately 60
percent of its assets in common
stocks that are considered by the
portfolio manager to have
better-than-average growth
prospects. The fund's remaining
assets are in bonds and other fixed
income securities. The fund seeks
capital growth and current income.
o American Funds New Perspective Fund The fund invests worldwide in a
diversified portfolio of stocks of
large, high quality companies. The
fund seeks long-term capital growth.
The Employing Company reserves the right to change the investment funds offered
from time to time as conditions merit. Units in any fund listed above 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. The Plan is intended to satisfy the requirements of Section
404(c) of the Employee Retirement Income Security Act of 1974.
Participants' Accounts
- ----------------------
The deferrals and additional deferrals are invested as directed by the
participant. Employing Company matching contributions are applied to the
purchase of Common Stock. Shares of Common Stock may be issued directly by the
Employing Company or obtained by open market purchase. Shares and Common Stock
dividends are allocated to individual participant accounts in proportion to the
amounts of their deferrals, additional deferrals and related employer
contributions.
Vesting and Distribution
- ------------------------
All Employing Company matching contributions are 100 percent vested for all
participants. A participant may elect to receive distributions from his
accounts, other than his deferral accounts, immediately after they mature.
Employing Company matching contributions mature at the end of the 24th month
following the month in which the contributions are made to the accounts. A
participant may request a distribution from his deferral account, including his
additional deferral account and rollover account, made on a pretax basis, only
if he suffers a hardship or is at least age 59 1/2. A hardship distribution is
only allowed pursuant to Section 401(k) of the Internal Revenue Code.
Payment of Benefits
- -------------------
On termination of service for any reason, a participant, or his beneficiary, may
request the distribution of the balance in all of his accounts as of his date of
termination. A distribution shall be made as soon as
10
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practicable after the occasion for the distribution, except that a participant
may elect that a distribution be delayed until no later than April 1 of the
calendar year following the calendar year in which he attains age 70 1/2. A
beneficiary of a deceased participant may elect that a distribution be delayed
until a date that follows the occasion for distribution by not more than one
year.
Employee Loans Receivable
- -------------------------
Employee loans receivable are reflected in Duke Energy Corporation Common Stock.
Participants may borrow, with some limitations, from their fund accounts a
minimum of $500 up to a maximum equal to the lesser of $50,000 or 50 percent of
their account balance. Loan terms range from 1-5 years or up to 10 years for the
purchase of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at the rate charged by the trustee of
the Plan on similar commercial loans. Principal and interest is paid ratably
through monthly payroll deductions. Loan receipts will be reinvested based on
the participant's invested options at the time of repayment.
Rights Upon Termination
- -----------------------
The Employing Company expects and intends to continue the Plan indefinitely, but
has reserved the right to amend, suspend or terminate the Plan at any time. In
the event of termination of the Plan, the net assets of the Plan would be
distributed to participants based on the balances in their individual accounts
at the date of termination.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investment Valuation and Income Recognition
- -------------------------------------------
Investments are reported at fair market value. Shares of mutual funds are valued
at quoted market prices which represent the net asset value of shares held by
the Plan at year-end. Duke Energy Corporation Common Stock is valued at the
quoted market price at year-end. Participant loans are valued at cost plus
accrued interest which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis and dividends are recorded on the
ex-dividend date.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Reclassification
- ----------------
Certain amounts have been reclassified in the 1996 financial statements to
conform to the current presentation.
11
<PAGE>
3. 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. The Employing Company pays all administrative costs relating to
the Plan.
4. PLAN UNIT VALUATION:
Individual participant accounts are maintained on a unit value basis. In
accordance with the provisions of the Plan, the Trustee maintains separate units
of participation in the Plan and related net asset value per unit for the Duke
Energy Corporation Common Stock fund, since it is the only non-mutual fund. The
number of units and related net asset value per unit for this fund are as
follows:
1997 1996
---- ----
Units outstanding at December 31, 65,841,940 67,971,550
========== ==========
Net asset value per unit at:
December 31, $14.500813 $12.157004
September 30, 12.973315 N/A
June 30, 12.589361 N/A
March 31, 11.602165 N/A
5. TAX CONSEQUENCES OF THE PLAN:
The Internal Revenue Service has determined and informed the Employing Company
by a letter dated April 10, 1998, that the Plan is qualified and the trust which
forms a part of the Plan is exempt from federal income tax under the provisions
of Section 501(a) of the Internal Revenue Code. The trust is intended to satisfy
the requirements of the Internal Revenue Code for a tax-qualified plan.
12
<PAGE>
DUKE ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
LINE 27A - SCHEDULES OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997 AND 1996
(TO BE FILED UNDER COVER OF FORM SE)
- --------------------------------------------------------------------------------
13
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DUKE ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
LINE 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------------------------
Selling Gain/
Price Cost (Loss)
---------------- -------------- ---------------
For the Year Ended December 31, 1997:
Duke Energy Corporation Common Stock:
98 Purchases $ 22,049 $ -
168 Sales $ 56,965 33,205 23,760
Dreyfus General Money Market Fund, Inc.:
138 Purchases 30,011 -
122 Sales 23,213 23,213 -
Dreyfus S&P 500 Index Fund, Inc.:
186 Purchases 51,389 -
41 Sales 5,983 4,915 1,068
Wachovia Bank DTF Short Term Investment Fund:
227 Purchases 176,278 -
305 Sales 171,140 171,140 -
For the Two Months Ended December 31, 1996:
There were no reportable transactions in this period.
- -------------------------------------------------------------------------------------------------------------------------
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14
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DUKE ENERGY CORPORATION
EMPLOYEES' STOCK OWNERSHIP PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
WITH INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1997 AND 1996
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TABLE OF CONTENTS
-----------------
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Distributions 4
Statements of Changes in Net Assets Available for Plan Distributions 5
Notes to Financial Statements 6 - 8
SUPPLEMENTAL SCHEDULES:
Line 27a - Schedule of Assets Held for Investment Purposes 9
Line 27d - Schedule of Reportable (5%) Transactions 10
2
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INDEPENDENT AUDITORS' REPORT
Duke Energy Corporation Employees' Stock Ownership Plan:
We have audited the accompanying Statements of Net Assets Available for Plan
Distributions of Duke Energy Corporation Employees' Stock Ownership Plan (the
Plan) as of December 31, 1997 and 1996, and the related Statements of Changes in
Net Assets Available for Plan Distributions for the years then ended. 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 net assets available for plan distributions of the Plan at
December 31, 1997 and 1996, and the changes in net assets available for plan
distributions for the years then ended in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
supplemental schedules have been subjected to the auditing procedures applied in
our audit of the basic 1997 financial statements and, in our opinion, are 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 3, 1998
3
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DUKE ENERGY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN DISTRIBUTIONS
(Dollars In Thousands)
- --------------------------------------------------------------------------------------------
December 31,
------------
1997 1996
---- ----
ASSETS:
Investment in Duke Energy Corporation Common Stock
(1997 - 1,156,177 shares; 1996 - 1,213,092 shares) $ 64,030 $ 56,112
LIABILITIES:
Distributions payable to active participants - 175
Distributions payable to terminated participants - 29
------- -------
- 204
------- -------
NET ASSETS AVAILABLE FOR PLAN DISTRIBUTIONS $ 64,030 $ 55,908
======== ========
- ---------------------------------------------------------------------------------------------
See Notes to Financial Statements.
4
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DUKE ENERGY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN DISTRIBUTIONS
(Dollars In Thousands)
- ------------------------------------------------------------------------------------------------
Years Ended December 31,
------------------------
1997 1996
---- ----
INVESTMENT INCOME:
Dividends and interest $ 2,558 $ 2,504
Net appreciation (depreciation) in market value of
Duke Energy Corporation Common Stock 10,698 (1,276)
------- -------
13,256 1,228
------- -------
DISTRIBUTIONS TO PARTICIPANTS:
Active participants 1,408 937
Terminated participants 3,382 2,828
Participants electing distribution of dividends 344 349
------- -------
5,134 4,114
------- -------
NET INCREASE (DECREASE) 8,122 (2,886)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 55,908 58,794
------- -------
End of year $ 64,030 $ 55,908
========= ========
- -------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
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5
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DUKE ENERGY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1997AND 1996
- --------------------------------------------------------------------------------
1. Description of the Plan:
Purpose and Participation
- -------------------------
On June 18, 1997, the name of the Duke Power Company Employees' Stock Ownership
Plan was changed to the Duke Energy Corporation Employees' Stock Ownership Plan
(the Plan) in accordance with the terms of a merger agreement between Duke Power
Company and PanEnergy Corp. The Plan, which was frozen in 1987 in regards to
participation and contributions, was sponsored by the former Duke Power Company
and its affiliates, Crescent Resources, Inc. and Duke Engineering & Services,
Inc., (collectively referred to as the "Employing Company").
The Plan is a stock bonus plan and was designed to promote investment by
employees in the Employing Company. Employees were eligible to participate if
they (1) had attained the age of eighteen on the first day of the plan year, (2)
had been employees for the three immediately preceding calendar months, and (3)
were not members of a unit of employees covered by a collective bargaining
agreement which provided for retirement benefits not available to employees
generally. This defined contribution plan is subject to the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
(ERISA).
Contributions
- -------------
Prior to 1987, Employing Company contributions to the Plan were based on
investment tax credits and payroll-tax credits. All such tax credits have now
been repealed. Neither the Employing Company nor participants have made
contributions to the Plan since 1987 and future contributions based upon tax
credits are not anticipated.
Participants' Accounts
- ----------------------
Separate accounts by plan year are maintained for each participant to accumulate
any annual allocations and dividends earned thereon. At December 31, 1997 there
were 8,773 participant accounts in the Plan, including 1,463 accounts for
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 were made. All
contributions have been held in the Plan for at least seven years and are
available for distribution to the participants. Upon retirement or termination,
Plan account balances may be distributed or funds may be left in the Plan until
requested (up to age 70 1/2). The Plan allows participants to elect to receive,
in cash, dividends paid on shares held in their accounts.
The liability in 1996 for distributions payable to participants was estimated
based on the year end market price of Duke Energy Corporation's common stock. In
the 1996 financial statements, this liability was recorded on the face of the
Statement of Net Assets Available for Plan Distributions rather than disclosed
in the notes to the financial statements as a reconciling item between the Form
5500 and the financial statements. In 1997, there is no such liability recorded
on the financial statements or the Form 5500.
6
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Voting of Common Stock
- ----------------------
Each participant is entitled to exercise voting rights attributable to the
shares allocated to his account and is notified by the trustee prior to the time
that such rights are to be exercised. If a participant does not provide the
trustee with timely voting instructions, such participant's shares will be voted
in the discretion of the trustee.
Right to Amend or Terminate
- ---------------------------
The Employing Company has reserved the right to amend or terminate the Plan, at
any time, by resolution of the Management Committee of the Board of Directors of
Duke Energy Corporation. 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 the date of termination.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investment Valuation and Income Recognition
- -------------------------------------------
The common shares of Duke Energy Corporation are valued at fair market value
which is determined by quoted market price. Purchases and sales of securities
are recorded on a trade-date basis. Interest income is recorded on the accrual
basis and dividends are recorded on the ex-dividend date. Realized gains and
losses from security transactions are reported on the specific identification
method.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
3.TAX CONSEQUENCES OF THE PLAN:
The Plan has been approved by the Internal Revenue Service by a letter dated
September 7, 1995, as a qualified employees' trust under Sections 401 and 409(a)
of the Internal Revenue Code. The trust is exempt from income taxes under
Section 501(a) of the Code.
4. 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. The Employing Company pays all administrative costs relating to
the Plan.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
- -------------------------------------------------------
There were no differences between the financial statements and the Form 5500 in
1997 or 1996.
7
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6. RECLASSIFICATION:
Certain amounts in the 1996 financial statements have been reclassified to
conform to current presentation.
8
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DUKE ENERGY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
(Dollars In Thousands)
- --------------------------------------------------------------------------------
Duke Energy Corporation Common Stock:
Number of Shares 1,156,177
===============
Cost $ 25,291
===============
Fair Market Value $ 64,030
===============
9
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DUKE ENERGY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
LINE 27D - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars In Thousands)
- --------------------------------------------------------------------------------
Selling Gain/
Price Cost (Loss)
----------------------------------------
Duke Energy Corporation Common Stock:
7 Purchases $2,212 $ -
41 Sales $4,993 2,503 2,490
Wachovia Bank DTF Short Term Investment Fund:
26 Purchases 2,307 -
15 Sales 2,307 2,307 -
10
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