News Release
November 19, 2003


CHARLOTTE, NC – Duke Energy announced today that the Compensation Committee of the board of directors has approved an employment agreement for Chairman and Chief Executive Officer Paul M. Anderson, which is stock based and tied directly to the performance of the company. Anderson will receive no base cash salary.

The agreement covers the period from Nov. 1, 2003, through Jan. 1, 2007, and requires Anderson to hold all shares of Duke Energy stock he receives under it until that date.

The three-year package includes the following key components:

  • Shares of common stock equivalents – a total of 285,000 shares that vest over time, beginning with 45,000 shares on Jan. 1, 2004. The remaining 240,000 shares will vest quarterly over the next three years, ending Jan. 1, 2007.
  • Performance shares – 360,000 shares that vest at the rate of 120,000 shares each year beginning in early 2005 if financial and company goals, established annually by the board of directors, are achieved. Any year that the goals are not achieved, Anderson forfeits the performance shares for that year.
  • Options – a one-time stock option grant of 1.1 million shares, granted on Nov. 17, 2003, with a strike price of $17.45. One-third of the options will vest each Nov.17 of 2004, 2005 and 2006, and Anderson has up to 10 years from the grant date to exercise them. The agreement prohibits him from exercising options before Jan. 1, 2007.
  • Cash dividend equivalents on all unvested common stock equivalents and performance shares when dividends are declared and paid on Duke Energy Corporation common stock.

Anderson has elected to defer receipt of common stock equivalent shares which vest, as well as any performance shares, until the completion of his employment.

The agreement includes no cash severance. In the event of a change of control, all stock and stock options awarded would vest upon the closing of the deal, as would be the case with other employees.

Anderson will participate in the company’s regular medical and dental benefit programs, but will not participate in other benefits plans, such as life insurance or the retirement plan. Consistent with company policy, Duke Energy will pay his relocation expenses to Charlotte.

Duke Energy is a diversified multinational energy company with an integrated network of energy assets and expertise. The company manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses – meeting the energy needs of customers throughout North America and in key markets around the world. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at:

Contact: Randy Wheeless
Phone: 704-382-8379
24-Hour Phone: 704-382-8333