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
(x ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Public Service Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(x ) $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: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) 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:
<PAGE>
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 26, 1996
TO THE SHAREHOLDERS:
Notice is hereby given that the next annual meeting of shareholders
of Public Service Company of North Carolina, Incorporated (the "Company")
will be held at the corporate office of the Company, 400 Cox Road,
Gastonia, North Carolina on Friday, January 26, 1996, at 9:00 a.m. for the
following purposes:
1. To elect four directors, each to serve for a three-year term
expiring in 1999 or until their successors are elected and qualified,
and to elect one director to serve for a two-year term expiring in 1998
or until his successor is elected and qualified;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending September 30,
1996; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed December 11, 1995 as the record date
for the determination of shareholders entitled to notice of and to vote at
the meeting.
For the Board of Directors
/s/ Charles E. Zeigler, Jr.
CHARLES E. ZEIGLER, JR.
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
December 20, 1995
THE FORM OF PROXY IS ENCLOSED TO ENABLE YOU TO VOTE YOUR SHARES AT
THE MEETING. YOU ARE URGED TO PROMPTLY MARK, SIGN, DATE AND RETURN THE
PROXY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES. THIS IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
DELAY IN RETURNING YOUR PROXY MAY SUBJECT THE COMPANY TO ADDITIONAL
EXPENSE. IF YOU ATTEND THE MEETING IN PERSON, YOU MAY WITHDRAW YOUR PROXY
AND VOTE YOUR SHARES IN PERSON IF YOU SO CHOOSE.
<PAGE>
PUBLIC SERVICE COMPANY OF NORTH CAROLINA,
INCORPORATED
400 Cox Road
Post Office Box 1398
Gastonia, North Carolina 28053-1398
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Public Service Company of North Carolina,
Incorporated (the "Company") for use at the annual meeting of shareholders of
the Company to be held on Friday, January 26, 1996, at 9:00 a.m., and at any
adjournment thereof. Unless the context requires otherwise, all references in
this Proxy Statement to the Company refer to Public Service Company of North
Carolina, Incorporated and its subsidiaries. This Proxy Statement and the
accompanying proxy card are first being mailed to shareholders on or about
December 20, 1995.
Only shareholders of record at the close of business on December 11, 1995
are entitled to vote at the meeting. As of November 30, 1995, the Company had
outstanding 18,765,708 shares of Common Stock, which shares constitute the only
class of stock of the Company entitled to notice of, and to vote at, the
meeting. As of the same date, the Company had approximately 11,600 shareholders
of record.
All proxies that are properly executed and received prior to the meeting
will be voted at the meeting. If a shareholder specifies how the proxy is to be
voted on any of the business to come before the meeting, the proxy will be voted
in accordance with such specification. If no specification is made, the proxy
will be voted for the election of directors and the approval of proposals two
and three. A shareholder may revoke a proxy, to the extent it has not been
exercised, at any time prior to its exercise, by giving written notice to the
Secretary of the Company, by executing and delivering a proxy with a later date
or by voting in person at the meeting. If a shareholder is a participant in the
Company's Automatic Dividend Reinvestment and Stock Purchase Plan, the enclosed
proxy includes any full shares held in his or her account.
The cost of soliciting proxies will be borne by the Company, including
expenses incurred in connection with preparing and mailing this Proxy Statement.
Such expenses will include charges by brokers, banks or their nominees, other
custodians and fiduciaries for forwarding proxy material to the beneficial
owners of shares held in the name of a nominee. The Company expects to solicit
proxies primarily by mail, but certain officers and employees of the Company may
also solicit in person, by telephone, telegram or other means without additional
compensation for their services other than their regular salaries.
ELECTION OF DIRECTORS
The Board of Directors on December 4, 1995, approved an increase in the
size of the Company's Board of Directors from 11 to 12, such increase to become
effective as of the date ofthe Company's annual meeting on January 26, 1996.
Upon the effectiveness of such increase, the Board of Directors will be divided
into three classes comprised of four directors whose terms expire in January
1997, 1998 and 1999, respectively. At the annual meeting, four directors are
to be elected to serve until the Company's annual meeting to be held in
January[nb]1999 or until their successors are elected and qualified, and one
director is to be elected to serve until the Company's annual meeting to
be held in January 1998 or until his successor is elected and qualified.
Two directors whose terms expire at this year's annual meeting have been
nominated by the Board of Directors to succeed themselves for terms
expiring in January 1999. They are Bert Collins and Charles E. Zeigler,
Jr. Two nominees, John W. Copeland and D. Wayne Peterson, have been nominated by
the Board of Directors to fill the board positions, vacated by the two retiring
board members, for terms expiring in January 1999. The other nominee, Ben R.
Rudisill, II, has been nominated by the Board of Directors to fill the new board
position for the term expiring in January 1998. Two directors whose terms are
expiring, Plato P. Pearson, Jr. and Charles E. Zeigler, Sr., are retiring from
the Board of Directors under its mandatory retirement policy and will not stand
for reelection. Each of the five nominees has consented to being named in the
Proxy Statement and to serve if elected. If, prior to the annual meeting, any
one of the nominees should become unable to serve, the proxies solicited hereby
will be voted for such additional person as shall be designated by the Board of
Directors. The other seven members of the Board of Directors whose terms do not
expire this year will continue to serve in such capacity until their terms
expire and their successors are elected and qualified.
<PAGE>
Set forth below is a table showing the names and ages of the five nominees
for election and of the seven continuing members of the Board of Directors,
together with biographical information on each of them for the past five years.
<TABLE>
<CAPTION>
NAME, AGE AND YEAR
FIRST BECAME A DIRECTOR BIOGRAPHICAL INFORMATION
<S> <C>
NOMINEES FOR ELECTION AS DIRECTORS WHOSE TERMS EXPIRE IN 1999
BERT COLLINS (61) President and Chief Executive Officer, North
Director since 1993 Carolina Mutual Life Insurance Company, an
insurance company located in Durham, North
Carolina.
JOHN W. COPELAND (60) President, Ruddick Corporation, Charlotte, North
Carolina, the holding company for American &
Efird, Inc., Harris-Teeter, Inc. and Jordan
Graphics Inc.; President, Copeland Business
Service, Inc.; and Director, First Union
National Bank, Charlotte, North Carolina.
D. WAYNE PETERSON (59) President, Local Telecom Division, Sprint,
Kansas City, Missouri, a major domestic and
international telecommunications company.
CHARLES E. ZEIGLER, JR. (49) Chairman, President and Chief Executive Officer
Director since 1988 of the Company. Son of Charles E. Zeigler, Sr.
NOMINEE FOR ELECTION AS DIRECTOR WHOSE TERM EXPIRES IN 1998
BEN R. RUDISILL, II (52) President and Treasurer, Rudisill Enterprises,
Inc., Gastonia, North Carolina, a beverage
distributor and food broker; Co-owner and Vice
President, Tar Heel Leasing Company, an auto
and equipment leasing company.
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1998
WILLIAM C. BURKHARDT (58) President and Chief Executive Officer of Austin
Director since 1989 Quality Foods, Inc., Cary, North Carolina, a
baker and distributor of Austin Quality
Snacks; Director, Triangle Bancorp., Raleigh,
North Carolina; and Director, Kaiser
Permanente, Raleigh, North Carolina.
VAN E. EURE (40) Co-owner, General Manager and President, The
Director since 1993 Angus Barn, Ltd., which owns a restaurant
located in Raleigh, North Carolina.
WILLIAM L. O'BRIEN, JR. (56) Senior Vice President and Director,
Director since 1986 O'Brien/Atkins Associates, P.A., an
architectural and engineering firm located in
the Research Triangle Park area of North
Carolina.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND YEAR
FIRST BECAME A DIRECTOR BIOGRAPHICAL INFORMATION
<S> <C>
CONTINUING DIRECTORS WHOSE TERMS EXPIRE IN 1997
WILLIAM A. V. CECIL (67) President and Treasurer, The Biltmore Company,
Director since 1985 which owns and operates the Biltmore House and
Gardens in Asheville, North Carolina.
H. MAX CRAIG, JR. (64) Chairman of the Board and President, Gaston
Director since 1974 County Dyeing Machine Company, a manufacturer
of textile machinery; President, H. M. Craig
Metal and Supply Company; and Director, First
Citizens Bancshares, Incorporated, the holding
company for First Citizens Bank and Trust
Company.
B. FRANK MATTHEWS, II (68) Executive Vice President and Director, Matthews
Director since 1985 Belk Company, which owns and operates
department stores.
G. SMEDES YORK (54) President and Treasurer, York Properties, Inc.
Director since 1984 and Sam Bass Camera Shop, Inc.; President,
York Inns, Inc.
</TABLE>
3
<PAGE>
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 Chief Executive Officer, the other
executive officers named in the Summary Compensation Table, and the directors
and executive officers as a group, on November 30, 1995.
<TABLE>
<CAPTION>
PERCENT
OF
NAME SHARES (1)(2) CLASS
<S> <C> <C>
Bert Collins................................................... 1,150 *
Charles E. Zeigler, Jr......................................... 12,950(4) *
Plato P. Pearson, Jr........................................... 1,971 *
Charles E. Zeigler, Sr......................................... 100,856 *
William C. Burkhardt........................................... 2,104 *
Van E. Eure.................................................... 635 *
William L. O'Brien, Jr......................................... 3,434 *
William A. V. Cecil............................................ 6,023 *
H. Max Craig, Jr............................................... 8,409 *
B. Frank Matthews, II.......................................... 12,552(3) *
G. Smedes York................................................. 6,000 *
Jerry W. Richardson............................................ 8,509 *
Fred L. Schmidt................................................ -- *
Robert D. Voigt................................................ 11,618 *
Franklin H. Yoho............................................... 1,018 *
Directors and executive officers
as a group (22 persons)...................................... 184,629 1.0%
</TABLE>
* Indicates beneficial ownership of less than 1% of the shares of Common Stock
of the Company outstanding on November 30, 1995.
(1) Includes shares, if any, held by each person's spouse.
(2) Includes each person's beneficial interest in full shares of the Company's
Common Stock, if any, credited to his or her account in the Company's
Automatic Dividend Reinvestment and Stock Purchase Plan.
(3) Of this number, 5,652 shares are owned directly by Mr. Matthews and 6,900
shares are owned by a trust over which Mr. Matthews as co-trustee shares
investment and voting power.
(4) Of this number, 10,091 shares are owned directly by Mr. Zeigler, Jr., 1,064
shares are owned by Mr. Zeigler, Jr.'s spouse and 1,795 shares are owned by
a trust over which Mr. Zeigler, Jr. as trustee has investment and voting
power.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board of
Directors. The Board meets regularly during the year to review the Company's
operations, strategic and business plans, major capital appropriations and other
significant developments affecting the Company and to act on matters requiring
Board approval. It also holds special meetings when important matters require
Board action. Members of senior management attend Board meetings as needed to
discuss the progress and plans relating to their areas of responsibility. During
the fiscal year ended September 30, 1995, there were four meetings of the Board
of Directors. Each director attended at least 75 percent of the aggregate of the
number of such meetings and the total number of meetings of all committees of
the Board on which he or she served with the exceptions of Mr. Craig and Mr.
Zeigler, Sr.
Because of the number of matters requiring Board consideration and to make
the most effective use of individual directors' capabilities, the Board has
established committees to devote attention to specific subjects and to assist
the Board in the discharge of its responsibilities. The Board has created an
Executive Committee, an Audit Committee and an Executive Compensation Committee.
The Company has no nominating committee. Information about the functions of each
committee, its current members, and the number of meetings held during the
fiscal year ended September 30, 1995 is provided below.
The Executive Committee acts as an advisory committee to the Chairman on
matters relating to the policies and business affairs of the Company and may
recommend nominees to be considered as successors to the Chairman or President
or as a director of the Company. During the intervals between meetings of the
Board, the Executive Committee has the same authority as the Board as to any
matters relating to the ordinary conduct of the business of the Company, but
does not have any authority as to any matters not relating to such
4
<PAGE>
ordinary conduct of business such as, for example, the authority to authorize an
amendment to the Company's Articles of Incorporation or to fill a vacancy on the
Board. The members of the Executive Committee, which met once during the fiscal
year ended September 30, 1995, are Charles E. Zeigler, Jr. (Chairman), H. Max
Craig, Jr., Plato P. Pearson, Jr., G. Smedes York and Charles E. Zeigler, Sr.
The Audit Committee recommends to the Board of Directors the engagement of
independent public accountants, approves the professional services to be
rendered by and considers the possible effect of such services on the
independence of the accountants, determines whether the independent public
accountants are presenting their reports on the Company's financial statements
in a competent and adequate manner, reviews the scope and results of annual
examinations and recommendations of the independent public accountants and
determines whether the internal controls of the Company are adequate. The
members of the Audit Committee, which met two times during the fiscal year ended
September 30, 1995, are William A. V. Cecil (Chairman), Bert Collins, H. Max
Craig, Jr., B. Frank Matthews, II and Charles E. Zeigler, Sr.
The Executive Compensation Committee recommends to the Board of Directors
the compensation of the various officers of the Company that, in the judgment of
such committee's members, should from time to time be fixed by the Board and
performs such other duties as are assigned to it by the Board. The Executive
Compensation Committee also recommends to the Board persons for election as
officers (except Chairman or President) of the Company. The Board has assigned
to such committee the responsibility of administering the Company's Incentive
Compensation Plan and its stock option plans. None of the members of such
committee may be employees of the Company, and none are eligible to receive
options under the Company's stock option plans. The members of the Executive
Compensation Committee, which met three times during the fiscal year ended
September 30, 1995, are William C. Burkhardt (Chairman), Van E. Eure, William L.
O'Brien, Jr., Plato P. Pearson, Jr. and G. Smedes York.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive an annual retainer
fee of $16,000, plus $600 for each board and committee meeting attended and
reimbursement of expenses for attending each meeting. The Company maintains a
deferred compensation plan (the "Deferred Compensation Plan") for its outside
directors pursuant to which such directors may elect to defer 50% or more of
their annual compensation, such deferred amount to be credited at the direction
of the participating outside director in the form of cash or stock units.
Pursuant to the Deferred Compensation Plan, during the fiscal year ended
September 30, 1995, Mr. Burkhardt elected to receive credit for 1,952 stock
units valued at $31,472 in lieu of cash compensation. Mr. Pearson elected to
receive credit for 985 stock units valued at $18,511 for the first six months of
the fiscal year ended September 30, 1995 and then he elected to defer receipt of
his cash compensation valued at $15,409 for the last six months of the fiscal
year. Upon retirement from the Board of Directors after age 65 and after serving
as a director for eight years or more, a director is entitled to lifetime
retirement compensation equal to the amount of the annual retainer fee in effect
on the date of retirement. The Company's By-laws provide that no director shall
be eligible for reelection who, on the date of his proposed election, shall have
reached, or who, within the twelve-month period immediately after such date,
would reach 70 years of age.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Effective August 1, 1992, the Company entered into a lease (the "Lease")
with Pearson's, Inc., a North Carolina corporation. Mr. Plato P. Pearson, Jr., a
director and a member of the Executive Committee and the Executive Compensation
Committee, is the President, a Director and the holder of 4.28 percent of the
outstanding shares of common stock of Pearson's, Inc. The Lease is a
modification and extension of a lease entered into on November 30, 1976 relating
to the lease of an office building located at 1422 Burtonwood Drive in Gastonia,
North Carolina (the "Property"). The Property consists of an approximately
11,313 square foot office building which is utilized by the Company for
commercial offices. Under the terms of the Lease, which expires on July 31,
2002, the Company is obligated to pay rent in the amount of $100,000 per year,
and to pay all ad valorem taxes and special assessments charged against the
Property. The Company believes that payments required to be made under the Lease
are no higher than current fair market lease rates in the geographic area in
which the Property is located and are at least as favorable to the Company as
could be obtained through an unrelated third party.
5
<PAGE>
COMPLIANCE WITH SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of the Company's Common Stock, to file with the Securities and Exchange
Commission reports of ownership and changes in ownership of Common Stock.
Officers, directors and greater than 10% beneficial owners are required by
Securities and Exchange Commission regulation to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, during the 1995 fiscal year, all filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with except that Ms. Eure and Mr. Yoho did not file a Form 4 on a
timely basis with respect to a purchase of Common Stock and a sale of Common
Stock, respectively.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Company, under the supervision of the Executive Compensation Committee
of the Board of Directors, has developed and implemented merit and incentive
compensation programs which seek to provide a direct relationship between
compensation provided to executive officers, and other eligible employees in the
upper job grades, and corporate business performance. The Executive Compensation
Committee is a standing committee of the Board composed entirely of outside
directors who are not officers or employees of the Company or any of its
subsidiaries and who have no interlocking relationships with the Company's
executive officers.
It is the philosophy of the Company's Board to set the base salaries of
executive officers at the average of a financial peer group of other mid-sized
natural gas local distribution companies ("LDCs"), with opportunities to earn
above the average based on excellent individual and corporate performance. This
peer group includes neighboring and other similarly sized LDCs which share
operating and financial characteristics with the Company. The goal of the
Company's executive compensation programs is to create competitive compensation
that will attract and retain quality leadership at the Company and link
compensation directly to corporate performance. Further, the Board believes the
performance on which executive officer compensation is based should be assessed
both on an annual basis and also over a longer period of time to ensure that
executive officers work to support both the Company's current objectives as well
as its strategic objectives.
In the early part of each fiscal year, the Executive Compensation Committee
reviews the Chief Executive Officer's recommended base salary merit increases
for the Company's other executive officers, plus cash incentive plan and stock
option plan awards for the Company's other executive officers and other eligible
employees. Base salary merit increase and cash incentive award recommendations,
if any, are primarily based on corporate operating and financial performance, as
well as on individual performance, for the prior fiscal year. Merit increases
are also based on a review of peer group base salaries and executive officers'
individual contributions to the Company's strategic objectives. Stock option
recommendations, if any, are primarily based on executive officers' and other
eligible employees' individual performance during the prior fiscal year, but
also relate to performance judgments as to the past contributions of the
individual executive officers and other eligible employees and judgments as to
their individual contributions to the Company's strategic objectives. The
Executive Compensation Committee then recommends compensation for such executive
officers and other eligible employees, with such modification as it deems
appropriate, following review of (a) the Company's actual performance as
compared to its corporate financial goals for the prior fiscal year, (b)
individual executive officers' and other eligible employees' actual performance
as compared to their individual goals supporting the Company's financial and
operating objectives, (c) the Company's executive officer compensation levels
relative to its peer group and (d) periodic reports from independent
compensation consultants regarding the compensation competitiveness of the
Company. The Executive Compensation Committee also reviews the above types of
compensation for the Chief Executive Officer with the assistance of the
Company's human resources staff and recommends adjustments as deemed appropriate
based on the above compensation review criteria and its expectation as to his
future contributions in leading the Company. The Executive Compensation
Committee's compensation recommendations for all executive officers are acted on
by the Board. If prior fiscal year corporate financial goals are not achieved,
(a) executive officer and other eligible employee cash incentive awards are not
paid, even when individual goals are met, and (b) stock options awards may not
be granted.
Upon evaluating the Company's actual performance as compared to its fiscal
1995 corporate goals, the Executive Compensation Committee made the following
recommendation which was approved by the Board
6
<PAGE>
on November 17, 1995: to pay 12 executive officers and 103 other eligible
employees $330,940, representing 60% of the possible cash incentive pool. This
was based on the attainment of 50% of the earnings per share goal (60%
weighting), 50% of the gross margin growth goal (20% weighting) and 100% of the
operating income/gross margin efficiency goal (20% weighting). These three
payout percentages resulted from achieving the budgeted amounts for the three
goals. The minimum attainment level to earn a 100% payout of the first two goals
was 105% of their budgeted amounts. Additionally, the Executive Compensation
Committee and the Board accepted management's recommendation to continue for
fiscal 1996 the earnings per share (60% weighting), gross margin growth (20%
weighting), and operating income/gross margin efficiency (20% weighting) goals,
which are linked to growth in shareholder value. Effective November 17, 1995,
stock options totaling 120,000 shares at a grant price of $14.29 (90% of the
$15.88 average between the New York Stock Exchange high and low trading prices
on the grant date) were awarded to 12 executive officers and 103 other eligible
employees.
Deferred action on fiscal 1994 stock option grants was taken by the Board
at its January 27, 1995 meeting. Effective that date, stock options totaling
120,000 shares were granted to 13 executive officers and 47 other eligible
employees at a grant price of $12.86 (90% of the $14.29 average NASDAQ closing
price for the five consecutive trading days up through the grant date). The
number of non-executive officers eligible for cash incentive plan and stock
option plan awards was increased during fiscal 1995.
This report has been provided by the Executive Compensation Committee:
<TABLE>
<S> <C>
William C. Burkhardt (Chairman) Plato P. Pearson, Jr.
Van E. Eure G. Smedes York
William L. O'Brien, Jr.
</TABLE>
EXECUTIVE COMPENSATION
The Summary Compensation Table below includes compensation paid by the
Company for services rendered for the fiscal years ended September 30, 1995,
1994 and 1993 for the Chief Executive Officer and the four other most highly
compensated executive officers (as of September 30, 1995) as determined by total
salary and bonus payments.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
OTHER ANNUAL AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY (1) BONUS COMPENSATION (2) OPTIONS (#) COMPENSATION (3)
<S> <C> <C> <C> <C> <C> <C>
Charles E. Zeigler, Jr. 1995 $256,200 $29,455 $ 30,523 7,559 $4,500(4)
Chairman, President and 1994 237,003 55,800 70,798 7,298 3,375(4)
Chief Executive Officer 1993 229,219 27,500 -- 9,804 4,497
Jerry W. Richardson 1995 131,700 11,205 16,606 3,750 3,951
Senior Vice President -- 1994 124,604 22,400 40,590 3,635 3,738
Engineering 1993 122,250 12,000 50,890 5,529 3,667
Robert D. Voigt 1995 124,896 14,275 15,954 4,538 3,747
Senior Vice President -- 1994 115,620 27,100 40,157 4,407 3,469
Corporate Development and 1993 112,063 14,000 41,135 4,413 3,362
Chief Financial Officer
Franklin H. Yoho 1995 116,750 13,695 30,238 4,538 3,503
Senior Vice President -- 1994 98,482 29,700 5,175 4,407 2,954
Marketing and Gas Supply 1993 91,612 11,500 -- 3,676 2,505
Fred L. Schmidt 1995 113,750 13,145 -- 4,538 3,413
Senior Vice President -- 1994 103,333 24,300 12,679(5) 4,407 2,350
Human Resources 1993 75,000 13,000 -- -- --
</TABLE>
(1) Includes for the years indicated amounts contributed on a pre-tax basis to
the Special Savings and Retirement Plan (the Company's 401(k) plan) by each
of the named executive officers.
(2) Includes for the years indicated the difference between the price paid by
the named executive officers for Common Stock of the Company purchased from
the Company upon the exercise of stock options and the fair market value of
such Common Stock. Also includes for the years indicated the amount paid to
the named executive officers for dividend equivalents accrued from the grant
date.
(3) Consists of for the years indicated contributions by the Company to the
Special Savings and Retirement Plan.
(4) Mr. Zeigler, Jr. participated in the Special Savings and Retirement Plan at
the maximum level permitted by such plan. Contributions by the Company for
Mr. Zeigler, Jr. for fiscal 1994 are lower than the prior year due to a
change in the timing of Company contributions during fiscal 1994.
(5) Includes reimbursement of moving expenditures for the indicated year.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows stock options granted in the fiscal year ending
September 30, 1995 to the Chief Executive Officer and the four other most highly
compensated officers (as of September 30, 1995):
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
% OF
TOTAL GRANT
NUMBER OF OPTIONS DATE
SECURITIES GRANTED MARKET PRESENT
UNDERLYING TO EXERCISE PRICE ON VALUE
OPTIONS EMPLOYEES OR BASE DATE OF (BLACK-
GRANTED IN FISCAL PRICE GRANT EXPIRATION SCHOLES)
NAME (#) YEAR ($/SH) ($/SH) DATE (2)
<S> <C> <C> <C> <C> <C> <C>
Charles E. Zeigler, Jr..................... 7,559 6.3% $12.86 $14.38 1/27/00 $ 27,968
Jerry W. Richardson........................ 3,750 3.1 12.86 14.38 1/27/00 13,875
Robert D. Voigt............................ 4,538 3.8 12.86 14.38 1/27/00 16,791
Franklin H. Yoho........................... 4,538 3.8 12.86 14.38 1/27/00 16,791
Fred L. Schmidt............................ 4,538 3.8 12.86 14.38 1/27/00 16,791
</TABLE>
(1) All options were granted on January 27, 1995 with an exercise price equal to
90% of the average closing for the five consecutive trading days up through
the grant date, as reported on the NASDAQ National Market System. An
optionee must remain employed by the Company for at least two years from the
date of grant before the right to exercise an option accrues. Options become
fully and immediately exercisable in the event of a change in control of the
Company, and in the event of an optionee's retirement, disability or death.
In the event of such retirement, disability or death, options shall
terminate one year from such date. If an optionee's employment with the
Company is terminated for any reason other than his retirement, disability
or death, options held by such optionee shall terminate three months from
such date. No option may be exercised more than five years from the date of
its grant. Stock options granted prior to September 30, 1993 had a dividend
equivalents feature pursuant to which the optionee received a cash payment
equal to the dividends that would have been paid on the optioned stock if
that stock had been outstanding from the date of grant to the date of
exercise. The Company accrued compensation expense for such dividend
equivalents monthly, at the same time regular dividends were accrued. After
a regular meeting of the Company's Board of Directors held on November 10,
1993, the Board deleted the dividend equivalents feature from the Company's
stock option plans, effective September 30, 1993. With respect to accrued
dividend equivalents on options issued and outstanding on September 30,
1993, the Company paid optionees an aggregate of $426,474, which amount is
equal to 100% of the dividend equivalents accrued on such options through
September 30, 1993. Such amount was paid in two equal installments on
December 15, 1993 and November 30, 1994. With respect to accrued dividend
equivalents on options issued and outstanding after September 30, 1993,
dividend equivalents accrue quarterly and are paid by the Company annually
at the end of each option year; provided, however, that no dividend
equivalents will accrue for a quarter if the Company's closing Common Stock
price on the dividend record date with respect to such quarter does not
exceed $16.25 per share. With respect to accrued dividend equivalents on
options issued and outstanding on September 30, 1994, the Company paid
optionees an aggregate of $57,659, which amount is equal to 100% of the
accrued dividend equivalents on such options through September 30, 1994.
Such amount was paid on November 30, 1994. After a regular meeting of the
Company's Board of Directors on November 17, 1995, the Board approved an
adjustment to its dividend equivalents rights feature whereby dividend
equivalents on stock option grants made on or after such date will accrue
quarterly if the Company's closing Common Stock price on the dividend record
date with respect to such quarter exceeds the closing Common Stock price on
the initial grant date. The closing price of the Company's Common Stock on
November 17, 1995, the latest option grant date, was $15.88.
(2) The values shown in this column have been calculated through standard
application of the Black-Scholes pricing model. The actual value an
executive officer receives from a stock option is dependent on future market
conditions, and there can be no assurance that the amount reflected as
"Grant Date Present Value" will actually be realized. In addition, the value
shown does not take into account risk factors such as nontransferability and
limits on exercise.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
The following table shows the aggregated stock option exercises in the
fiscal year ended September 30, 1995 and the stock option values for the Chief
Executive Officer and the four other most highly compensated officers (as of
September 30, 1995):
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Charles E. Zeigler, Jr.......... -- $ -- 21,930 14,857 $72,922 $45,808
Jerry W. Richardson............. -- -- 11,433 7,385 35,924 22,767
Robert D. Voigt................. -- -- 10,317 8,945 35,305 27,575
Franklin H. Yoho................ 4,929 23,363 3,677 8,945 2,040 27,575
Fred L. Schmidt................. -- -- -- 8,945 -- 27,575
</TABLE>
8
<PAGE>
EMPLOYEE RETIREMENT PLANS
The table below illustrates the approximate amounts of annual normal
retirement benefits payable under the Company's Retirement Plans.
<TABLE>
<CAPTION>
ANNUAL BENEFITS AT RETIREMENT WITH
AVERAGE YEARS OF CREDITED SERVICE
COMPENSATION 10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C>
$120,000 25,315 37,973 50,630 63,288 75,946 88,603
140,000 29,815 44,723 59,630 74,538 89,446 104,353
160,000 34,315 51,473 68,630 85,788 102,946 120,103
180,000 38,815 58,223 77,630 97,038 116,446 135,853
200,000 43,315 64,973 86,630 108,288 129,946 151,603
220,000 47,815 71,723 95,630 119,538 143,446 167,353
240,000 52,315 78,473 104,630 130,788 156,946 183,103
260,000 56,815 85,223 113,630 142,038 170,446 198,853
280,000 61,315 91,973 122,630 153,288 183,946 214,603
300,000 65,815 98,723 131,630 164,538 197,446 230,353
320,000 70,315 105,473 140,630 175,788 210,946 246,103
340,000 74,815 112,223 149,630 187,038 224,446 261,853
</TABLE>
The Company has a noncontributory, defined benefit retirement plan (the
"Retirement Plan") and a benefit restoration plan (the "Restoration Plan")
(collectively, the "Retirement Plans"), which cover all full-time employees,
including officers, upon their attaining age 21 and completing one year of
service. The purpose of the Restoration Plan is to provide certain employees
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.
A participant in the Retirement Plans becomes fully vested prior to normal
retirement at age 65 upon the completion of five years of service. Benefits are
also provided under the Retirement Plans in the event of early retirement at or
after age 55 and the completion of at least ten years of service and in the
event of retirement for disability after completion of five years of service.
Benefits under the Retirement Plans are based upon application of a formula to
the specified average compensation and years of credited service (up to a
maximum of 35 years) at normal retirement age. Benefit amounts are computed on a
straight life annuity basis. Compensation covered by the Retirement Plans
consists of the amount shown as "Salary" in the Summary Compensation Table. The
benefits are not subject to any deduction for social security payments.
Estimated credited years of service under the Retirement Plans for the
individuals named in the Summary Compensation Table are as follows: Charles E.
Zeigler, Jr., 8.8 years, Jerry W. Richardson, 27.0 years, Robert D. Voigt, 20.2
years, Franklin H. Yoho, 6.6 years and Fred L. Schmidt, 2.6 years.
9
<PAGE>
PERFORMANCE GRAPH
The line graph set forth below charts performance (on an annual basis) of
an investment in the Company's Common Stock against each of the Standard &
Poor's 500 Index (the "S&P 500 Index") and the Standard & Poor's Utilities Index
(the "S&P Utilities Index"), in each case assuming an investment of $100 on
September 30, 1990 and cumulation and reinvestment of all dividends paid
thereafter through September 30, 1995. The following graph is presented pursuant
to rules of the Securities and Exchange Commission. The stock price performance
comparisons below shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended, except to the extent that the Company specifically
incorporates this graph by reference, and shall not otherwise be deemed filed
under such acts. While total stockholder return is an important criterion of
corporate performance, it is subject to the vagaries of the equity market, which
affect common stock price performance. There can be no assurance that the
Company's Common Stock price performance will continue into the future with the
same or similar trends depicted in the graph below.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN graph appears here. Plot
points are as follows:
9/90 9/91 9/92 9/93 9/94 9/95
Public Service Company of
North Carolina, Inc. $100 $127 $208 $222 $183 $215
S&P 500 Index $100 $131 $146 $165 $171 $221
S&P Utilities Index $100 $116 $133 $165 $143 $183
10
<PAGE>
SHAREHOLDER PROPOSALS AND NOMINATIONS
Shareholder proposals relating to the Company's 1997 annual meeting of
shareholders must be received by the Company no later than August 20, 1996, to
be considered for inclusion in the proxy statement to be furnished to
shareholders in connection with the solicitation of proxies by the Board of
Directors for use at such meeting.
The Executive Committee will consider nominees for the Board of Directors
recommended by shareholders. Recommendations by shareholders must be forwarded
to the Secretary of the Company and must identify the nominee by name and
provide pertinent information concerning his or her background and experience. A
shareholder recommendation must be received at least 90 days prior to the date
of the annual meeting of shareholders, which is regularly held on the last
Friday in January.
Shareholders should send their proposals and names of proposed nominees to
the attention of the Company's Secretary at the Company's corporate office, 400
Cox Road, Post Office Box 1398, Gastonia, North Carolina 28053-1398.
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected Arthur Andersen LLP as independent
public accountants to audit the accounts and financial statements of the Company
for the fiscal year ending September 30, 1996. Arthur Andersen LLP has acted for
the Company in this capacity since 1951. A representative of such firm is
expected to attend the annual meeting to answer appropriate questions from
shareholders and to make a statement if he or she so desires.
OTHER MATTERS
The Board of Directors of the Company knows of no matters that will be
presented for consideration at the annual meeting other than those set forth in
this Proxy Statement. However, if any other matters shall come before the
meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
We ask that you promptly execute the enclosed proxy and return it in the
enclosed envelope that requires no postage if mailed in the United States.
For the Board of Directors
/s/ Charles E. Zeigler, Jr.
CHARLES E. ZEIGLER, JR.
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
December 20, 1995
A COPY OF THE COMPANY'S LATEST ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES
THERETO, WILL BE PROVIDED WITHOUT CHARGE UPON WRITTEN REQUEST TO JACK G. MASON,
TREASURER, PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED, POST OFFICE
BOX 1398, GASTONIA, NORTH CAROLINA 28053-1398.
11
<PAGE>
******************************************************************************
APPENDIX
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS -- JANUARY 26, 1996
The undersigned hereby appoints CHARLES E. ZEIGLER, SR., PLATO P. PEARSON,
JR. and H. MAX CRAIG, JR., and each of them, with full power of substitution,
attorneys and proxies to appear and vote, as indicated below, all of the shares
of Common Stock of Public Service Company of North Carolina, Incorporated that
the undersigned would be entitled to vote at the annual meeting of shareholders
to be held on January 26, 1996 and at any and all adjournments thereof. The
Board of Directors recommends a vote FOR the following items:
<TABLE>
<S> <C> <C> <C>
1. Election of Directors. FOR the nominees FOR the nominees listed below WITHHOLD AUTHORITY to vote for
listed below [ ] except as marked to the contrary [ ] the nominees listed below [ ]
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
strike a line through the nominee's name in the list below.)
<TABLE>
<S> <C> <C> <C> <C>
Bert Collins John W. Copeland D. Wayne Peterson Ben R. Rudisill, II Charles E. Zeigler, Jr.
</TABLE>
2. Proposal to ratify the selection of Arthur Andersen LLP as independent
public accountants. FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof. FOR [ ] AGAINST [ ] ABSTAIN [ ]
(continued and to be signed on reverse side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and when
properly executed will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this proxy will be voted
FOR all nominees for Director and FOR Proposals 2 and 3.
Signed:
Signed:
Please sign exactly as your name
appears hereon. If the holder is a
corporation or partnership, please
sign its name and add your own name
and title. When signing as attorney,
executor, administrator, trustee or
guardian, please also give your full
title. If shares are held jointly
EACH holder must sign.
Dated:
IMPORTANT: Please mark, sign and date this proxy and return it promptly in the
enclosed envelope. No postage is required if mailed in the United
States.
<PAGE>
