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2003
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2000
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1999
Noon 1

The meeting was hosted by Rick Priory on March 20, 2000. Thanks to the employees who asked all the great questions. We need to continue to hold Dukes' feet to the fire.

Opening Comments by Rick Priory:
Rick Priory: "These meetings and your good questions give me an opportunity to learn what's on the minds of employees' and that's a perspective I value."

Advocate: Say what? You could have fooled us. These meetings seem to give you an opportunity to sharpen your skills at evading questions and baffling employees with rhetoric. The meetings are much like a political debate. You usually try to talk as much as possible and say as little as possible.

Questions:
Employee: "Rumor has it that one-time cash balance credits were given to Duke Energy executives in addition to their beginning cash balance amount. Is this true? If so, are there plans to revisit the opening balance transition for all employees?"

Answer: "Duke Energy executives were not given preferential treatment through the Retirement Cash Balance Plan (RCBP), including the determination of their opening cash balances. We currently have no plans to revisit the opening cash balance transition. However, we will continue to monitor and benchmark all of the benefit plans offered through our Life Tracks benefits program, and will make any necessary changes as appropriate. As was mentioned in the proxy statement mailed to all shareholders with the 1998 annual report, certain executives received one-time supplemental credits to accounts in non-qualified executive plans in connection with the discontinuance of an executive program in which they had been participating."

Advocate: First of all, it is not a rumor; it is a fact. Rick Priory had over a third of a million dollars added to his account. Executives did not have to receive preferential treatment in the determination of their opening cash balances. Money added to their accounts for any other reason has the effect of compensating for the money lost to the conversion. Senior manage does not care what pocket the money comes out of, as long as they get it. Perhaps we should have said "whose" pocket the money comes out of! This was a compensation the employees did not receive, and as stated, will not receive. To read the report that Duke Energy was required to file with the Securities and Exchange Commission, click the link below:

Securities and Exchange Commission

Employee: "Why was the conversion to cash balance [for Duke Power employees] done with the formula used? It seems the most equitable conversion would have been to use the new plan's basic rules and to pay employees the four, five, six or seven percent of their wages for all of their years of employment. This could have easily been done because these records are available from the old plan, which was based on your five highest years of salary."

Answer: "A number of methods for determining opening cash balance accounts could have been used with Duke Power's conversion to the Retirement Cash Balance Plan (RCBP). The intent of the method used was to ensure that all employees would have at least the same benefit they would have had under their previous plan at a certain crossover age (between ages 60 and 64 for most employees). If you have additional questions about your opening cash balance or the RCBP in general, you should call the Retirement Benefits Center."

Advocate: Yes, a number of methods could have been used. Some would have had no ill effect on employees; some would have been beneficial to employees. Duke chose the plan to hurt the employees the most and reap them the most of our money. The crossover at up to age 64 is precisely the problem. We were promised an early retirement at age 55, not 60, not, 64, not 70! This is also where age discrimination laws were violated. The EEOC was still accepting age discrimination charges against Duke Energy as of last week. Call the EEOC at 1-800-669-4000 and ask to speak to an investigator. Rhetoric will not get your pension back; action just might! All details should have been provided up front. We should not have to still be calling over three years after the fact to try to find out what really happened!

Employee: "The answer to the question concerning paid time off (holidays) for Duke Power employees seems to tell me that there are two different policies. There is a policy for power generation-fossil and nuclear generation. I don't understand how this type of policy can be so inconsistent between departments, especially since we are all in the business of producing electric energy for sale at the lowest possible price. This type of policy making doesn't seem to conform to the Code of Business Ethics."

Answer: "Paid time off policies vary from business unit to business unit based on business needs. If you have additional questions or concerns about paid time off within your business unit, you should talk with your business unit human resources representative."

Advocate: Nice question! The Code of Business Ethics was designed to be something cutesy to hang on the wall, not to be actually followed. To actually follow it would require a wholesale change of business practices, which would probably require a wholesale change out of senior management. Anyone can come up with a grandiose sounding code; it requires people of character to live up to it (Houston, we have a problem). Do you see what we mean by political non-answers? Words were mouthed, but nothing was said.

Employee: "What is the company policy regarding employees being on call? Our department has instituted a policy that requires us to be 'on call.' When on call, we must be at a phone where we can be reached or wear a pager. When called, we must return the call within 20 minutes, and be capable of being at work within one hour after responding to the initial call. We aren't compensated when on call. Does this policy follow company policy and wage and hour laws?"

Answer: "If non-exempt employees are not required to remain on the premises but must wear a beeper or be reachable by telephone, they are "waiting to be engaged," and are not paid, since they are completely relieved of their duties and can use the time effectively for their own purposes. This is in compliance with The Fair Labor Standards Act (FLSA). If you have additional questions concerning on-call duty within your business unit, you should talk with your manager/supervisor or with your business unit human resources representative."

Advocate: That is another great question! Unfortunately, it received a rather murky answer. (Farmer to the fox: "Is it legal for you to eat all my chickens?" Fox: "Sure is.") The Advocate recommends that you immediately contact the National Labor Relations Board. Duke had gotten away with so many things in the past, just because no one ever called their hand. It is time to call Dukes' hand on each deal. The NLRB has a six months Statute of Limitations, so do not delay. Records of time, date, and incidents are important. Get your ducks in a row. Click on the link below to look up your local NLRB. The important thing is to take action NOW! Take action with this and ALL other matters. It is alright to ask a question of management, if you want a good laugh. But, you know what you will always hear: "Blah, blah, blah, blah, blah, blah…no changes are being considered at this time; contact HR for more information."

CLICK HERE for the National Labor Relations Board

Employee: "We went through a difficult time with snow and ice in the Carolinas in late January. Local radio news listed office, road and school closings, and highway patrol warnings about hazardous road conditions. In years past, supervisors told employees to go home during these conditions. Not this time. An employee in our work group asked our supervisor when we might be told to leave, and was told there would be no across-the-board message; that if an employee felt his or her safety was in danger, he or she should leave. This wasn't communicated to everyone, only those who asked. For Duke Energy to take such an interest in our daily safety with safety meetings, videos, checklists, near-miss reporting, etc, how can the company risk the lives of employees by allowing them to stay until driving conditions are extremely hazardous? I've heard that Duke Energy will never announce that offices are closed, and that employees should make every effort to get to work. It's one thing to not announce externally that our offices are closed, but it's entirely different to announce to employees, especially non-essential employees that have no affect on the generation or distribution of electricity, that they should go home. Employees who work in essential job functions are informed up front about the criticality of working no matter the conditions."

Answer: "Inclement weather is covered within the scope of the policy on attendance, absences, and personal leaves of absence. The decision to send "non-essential" personnel home because of inclement weather rests with local management. As was the case this January, driving conditions can vary tremendously within typical commuting distances. Factors such as length of commute, type of vehicle and driving experience also impact individual comfort level with existing conditions. Therefore, management must balance customer/business needs, personnel safety, and fairness for all employees. As you mentioned, off-the-job safety is important to the company, employees and our families. Driving to and from work is considered an off-the-job activity. Each employee has a personal responsibility for evaluating the situation and making the best decision for his/her own safety. Vacation or making up the time, with supervisor approval, may be options in these circumstances."

Advocate: People, you have outdone yourselfs with all the excellent questions! Too bad you only receive rhetoric for answers. Employees have been killed trying to get to work in bad weather. You may have noticed that the more that money is involved in the picture, the less that safety is involved! As long as safety is free, it is preached through bull horns!

The February "Noon Report" meeting was held in Houston on 2/10/00. It was hosted by Rick Priory and Fred Fowler.

Opening Comments from Rick Priory:
Rick Priory said that forth-quarter revenues were up 48 percent, Global Asset Development EBIT increased 183 percent, Duke Energy Field Services' EBIT increased nearly 90 percent in 1999, and more than 570 percent in the fourth quarter alone, and Gas Transmission increased 17 percent.

Advocate: Employee's retirement pensions are still DOWN up to 50% and more! Also, holidays are down, insurance coverage is down, and trust in the company is WAY down!

Rick Priory: "When money begins flowing back toward value stocks, financial institutions, drug companies, auto industries and energy companies, we ought to get our fair share."

Advocate: The market is always right. If Duke stock is selling at $100 per share or $1 per share, that is the right price. If Rick Priory does not agree with the market price, that does not mean that the market is wrong; it means that Rick Priory is wrong! If Rick Priory sells stock today, he will get market price, not what he thinks it should sell for! Skid row is populated with people who thought that they knew more than the market. The market is capable of humbling these types in short order.

Rick Priory: "You are the ones who made it all happen."

Advocate: We are glad that he finally figured that out. Yes, the employees built the company and they make everything happen, and don't forget it. We were beginning to get the impression that Rick Priory thought that he alone built the company and made all things happen with his "deal flow."

Rick Priory: "We have an opportunity to create tremendous value for employees and shareholders this year with an exciting incentive plan."

Advocate: It is highly unusual for Rick Priory to admit the existence of employees. Perhaps he has been reading and learning. He has a lot more to learn.

Questions from the Floor:
Employee: "How long do you anticipate it'll take before the media or the "outside World" begins viewing Duke Energy as an energy company rather than as an electric utility?"

Rick Priory: "Not much longer, I hope!"

Advocate: Hope and fear have decimated many in the marketplace. The market is always right!

Rick Priory: "We have to continuously remind the media, and other outside audiences, that we're not simply an electric utility. Eventually, they'll catch on."

Advocate: The market NEVER has to "catch on." The market is always right. Rick Priory may have to catch on.

Rick Priory: "On Wall Street, I refuse to speak at utility conferences; I remind them that's not who we are."

Advocate: Denial will not help. Rick Priory can hold his breath until his face turns red; the market does NOT care.

Employee: "Is it possible to set up the Code of Business Ethics questionnaire similar to the way the benefits enrollment was conducted last year? If there are no changes, simply have a button to click, or require no submission at all therefore indicating nothing has changed during the previous year? This would eliminate some of the grumbling when the questionnaire rolls around."

Fred Fowler: "We probably will have changes each year to the questionnaire, making it impossible for us to bypass on-line completion. As important as ethical behavior throughout the enterprise is, completing a simple, annual questionnaire isn't really too much of an inconvenience. It also ensures that employees will have an opportunity refocus on our Code of Ethics each year and how it relates to their teammates as well as their own actions."

Advocate: It is interesting to note that the Code of Business Ethics was not formulated until AFTER the cash balance pension conversion. Did the pension conversion weigh so heavily on the Duke executives' minds that they came up with the ethics code to atone for their sins? That's very doubtful! Ethics codes were a fad at the time and Duke was copying other companies, as they usually do. The pension conversion must be grandfathered regarding the ethics code. Because there is not one shred of ethics in the whole mess! The pension conversion was unethical, underhanded, deceitful, immoral, unconscionable, inequitable, unjust, dishonest, conniving, corrupt, misleading, ambiguous, unprincipled, unscrupulous, deceptive, unfair, and exploiting. And then, Duke rolled out the high and mighty Code of Business Ethics! Add hypocritical to the list.

Employee: "Could you please give us more detail about the asbestos impact to earnings in electric operations?"

Fred Fowler: "Our fourth quarter results included a one-time charge of $800 million for contingency reserves related to construction activity on Duke Power's electric generating plants in the 1960s and 1970s."

Advocate: It is about time some money was set aside for these employees and former employees. At least 30 former Duke employees have asbestosis related cancer right now. For a long time these former employees were just shoved to the side and ignored.

Employee: "Do executives get the same incentive percentage as the rest of employees?"

Fred Fowler: "All incentive targets are market-based, compared to similar positions in companies comparable in size and scope to Duke Energy. Therefore, there is variation by job level. The different business units have flexibility to set their own unique measures. Some groups have only financial measures such as EPS and EBIT, while others use additional goals specific to their groups such as safety measures and personal or team goals. The EPS and EBIT results used are the same for all participants, although the weighting on each item may vary. Consistent with this philosophy, DEFS has its own set of formulas used for calculating incentives for its employees."

Advocate: That means "no."

Employee: "Has the company considered changing the Retirement Cash Balance Plan (RCBP) to allow employees to have investment options similar to those available through the Retirement Savings Plan (RSP), which would allow better opportunity for growth for the money invested in this account?"

Fred Fowler: "At this time, no changes are planned for the RCBP."

Advocate: Court rulings and/or new legislation are subject to change the plan of "no changes."

Employee: "Over the past year, cash balance plans received considerable publicity. This has led to a flurry of activity by Congress, the IRS, the Department of Labor, and the Equal Employment Opportunity Commission. Many employees have requested the Duke Energy cash balance plan formula, but were told we couldn't have this information. How can we be sure that our starting balances are correct without the conversion formula? Do you think Congress will require employers to change back to final pay pension plans for long-service employees? Duke Energy should disclose all information to employees on the cash balance plan, if not our trust in management is lowered."

Fred Fowler: "There are a lot of issues floating around regarding cash balance plans."

Advocate: If ALL the laws were adhered to in a conservative manner to protect the employees' earned pension, there would be NO issues "floating around!" When every possible loophole in the law is exploited to the fullest extent, and each legality is stretched to the limit with outlandish interpretations, sometimes one gets caught. That's when stuff starts floating around.

Fred Fowler: "Conversions were handled in a variety of ways at different companies."

Advocate: True. But, the majority were designed to take money from the employees. Any other reason given is a deception.

Fred Fowler: "We're comfortable with the approach we used."

Advocate: We understand that YOU are "comfortable." It is the employees who lost 50% or more of their retirement benefits who are NOT too comfortable!

Fred Fowler: "In addition to the details shared through the On Track benefits newsletters, enrollment materials and benefits summary plan descriptions (SPDs), we have consistently provided information about the transition to the cash balance plan to employees who request it."

Advocate: You will be provided with the minimum amount of information required by law. How many people have you heard say, "Duke answered all of my pensions questions in complete detail and I am fully satisfied with their answers"? And, if Duke had any intention of giving a full and honest disclosure, you would not have to ask for it repeatedly. A COMPLETE explanation would have been given the first day. But, this shell game was never intended to provide a full and honest disclosure. Trickery and deception do mix well with honest disclosures.

Rick Priory hosted this session on 1/17/00.

Employee: "Will Duke provide any form of compensation to Charlotte employees affected by the sale of the gravel parking lots (where employees now park for free)?"

Rick Priory: "At this time, there are no plans for the company to provide additional employee parking spaces or compensation to subsidize parking."

Translation: Taking a devastating chunk of your retirement benefits, which you will never recover from, was not enough! You will continue to be shook down, penny pinched, and squeezed out of every benefit possible as long as you remain with the company. You will be given the opportunity to do more with less, for less!

Employee: "After reading several Noon Reports about pay and benefits, I want to know if human resources can publish a list of job classifications with competitive salary information."

Rick Priory: "We don't typically publish lists of job classifications and salaries because they may vary across the corporation due to the different markets in which our various business units compete."

Translation: At Duke Energy we know that knowledge is power. We prefer to keep you ignorant and powerless. You will be much less of a bother that way.

Employee: "When we call the Retirement Benefits Center, we can get a current cash balance account balance amount and a statement that we will receive, at retirement, either that amount or the prior plan protected benefit, whichever is greater. Since we have already earned that benefit from the prior plan, can the Center provide that amount as well?"

Rick Priory: "The information you mention can be obtained by calling the Retirement Benefits Center at 1-888-465-1300, and using the "benefit estimate" process (option #2) through the voice response unit (VRU)."

Translation: I'll pretend that I did not understand the question. I know that all employees want to know just exactly how much money they lost due to the cash balance plan conversion. But, we did not go to all the effort that we have to hide that information, just to give it to you because you asked. Now quickly, ask me something about "deal flow."

Employee: "At this time in our work group employees not working eight-hour schedules five days each week lose two hours per day of holiday pay or have to work extended hours or use vacation. Holidays should be by the day schedule. When scheduled 10 hours on a holiday pay should be for 10 hours. I was told if I work a four-hour schedule on a holiday, I loose four hours of pay on that day that will not carry over to the next holiday. Will the holiday hours paid ever equal the number of holidays given?"

Rick Priory: "Paid time off benefits may vary from business unit to business unit, based on business needs. To get answers to any questions concerning paid time off in your business unit, you should talk with your department or business unit human resources representative."

Translation: How did you like the "pass the old buckaroo?" I know that you received 10 hours of holiday pay for a 10 hour work day for years with no problems. But, that was before I rolled in. Now the squeeze is on. Can you picture a turnip in a vice?

Employee: "When did we decide that restrooms were appropriate venues for disseminating company information? Someone in the College Street facility has decided that our Safety Guiding Principles should be displayed on restroom stall doors. This must say a lot about our existing communication processes."

Rick Priory: "Departments have safety steering teams made up of departmental employees who develop safety awareness programs and initiatives without direct oversight from the corporation."

Translation: We really thought that was the most appropriate place for the Safety Guiding Principles. That is where all of our principles eventually end up.

Employee: "If you and the Board of Directors feel the stock is undervalued, how many shares has each member of the BOD bought with their own money (options and gifts don't count) in the past year?"

Rick Priory: "Information concerning stock ownership by directors and certain officers is disclosed in the company's proxy statement and various other public filings as required by the SEC. Additional stock ownership information is not disclosed."

Translation: Look! Buying stock involves risk. We do not want risk. We just want the money. By exercising cheap options while the stock is at inflated prices, we are GUARANTEED a profit! Just like you are guaranteed a retirement pension (snicker, snicker).