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Duke Energy CORP 8-K Report, Executive Changes (Nov 28, 2006)

Filed November 28, 2006For Securities:DUKDUKBDUK-PA

Summary

This 8-K filing from Duke Energy Corporation (DUK), filed on November 27, 2006, primarily concerns executive compensation for 2007 and a temporary suspension of trading in employee benefit plans related to an upcoming corporate event. The company's Compensation Committee has set performance goals for executive officers' 2007 short-term incentives (STI), which will be 80% weighted on financial measures, specifically ongoing earnings per share (EPS), with a target of $1.15 per share for Duke Energy. For Spectra Energy Corp, the expected STI target EPS is $1.40 per share. These targets are non-GAAP measures excluding special items. Furthermore, the filing details a "blackout period" affecting several 401(k) plans administered by Duke Energy and Spectra Energy. This suspension of participant transactions in Duke Energy Common Stock Fund and Spectra Energy Common Stock Fund is scheduled to occur from December 29, 2006, until the week of January 5, 2007, to facilitate the processing of trades and the receipt of Spectra Energy shares in connection with an anticipated spinoff. This blackout period also imposes trading restrictions on directors and executive officers of both companies under Sarbanes-Oxley Act regulations.

Key Highlights

  • 1Duke Energy sets 2007 short-term incentive (STI) performance goals for executive officers, weighted 80% on financial measures and 20% on individual objectives.
  • 2The primary financial measure for the 2007 STI at Duke Energy is ongoing earnings per share (EPS) with a target of $1.15 per share.
  • 3Spectra Energy Corp is expected to have a 2007 STI financial measure based on ongoing EPS with a performance target of $1.40 per share.
  • 4Both Duke Energy's and Spectra Energy's 2007 STI targets are non-GAAP measures, excluding "special items."
  • 5A temporary trading suspension (blackout period) is announced for Duke Energy and Spectra Energy Common Stock Funds within several 401(k) plans.
  • 6The blackout period is expected from December 29, 2006, to the week of January 5, 2007, to accommodate a Spectra Energy spinoff.
  • 7Directors and executive officers will be restricted from trading Duke Energy or Spectra Energy common stock during the blackout period due to Sarbanes-Oxley Act provisions.

Frequently Asked Questions

This 8-K filing primarily announces the performance targets for Duke Energy's and Spectra Energy's 2007 short-term incentive (STI) plans for executives and details a temporary trading suspension for company stock held in employee 401(k) plans related to an upcoming spinoff.

For Duke Energy, the 2007 STI is weighted 80% on ongoing earnings per share (EPS), with a target of $1.15 per share. For Spectra Energy, the expected EPS target for its 2007 STI is $1.40 per share. These targets are based on non-GAAP measures.

The trading suspension, or "blackout period," is necessary to allow the plan's recordkeeper to process outstanding trades and allocate Spectra Energy shares into the respective stock funds in preparation for the planned spinoff of Spectra Energy, expected to occur around January 2, 2007.

The trading suspension affects participants in the Duke Energy Retirement Savings Plan, Spectra Energy Retirement Savings Plan, and certain Cinergy Corp 401(k) plans. Additionally, directors and executive officers of both Duke Energy and Spectra Energy are prohibited from trading their respective company's common stock during this blackout period due to Sarbanes-Oxley Act regulations.