Apr 1 - Knight Ridder/Tribune Business News - Stan Choe The Charlotte Observer, N.C.

If all goes as anticipated, Duke Energy Corp. on Monday will finish its merger with Cinergy Corp., making Charlotte home to the country's biggest utility.

The closing will also mean a new chief executive leading Duke: Jim Rogers, the CEO and chairman of Cinergy, will take control at closing. The former lawyer is in the midst of moving to a downtown Charlotte apartment, as he jumps into learning the 101-year-old history of Duke and starts his house-hunting in the area.

He talked with the Observer about how he will tackle his first 100 days as Duke CEO, his thoughts on Charlotte as a headquarters city and what he plans to do with the $23 million in change-in-control benefits he's getting because of the merger.

Questions and answers have been edited for content and clarity.

Q. What are your immediate short-term plans? You'll probably be spending much of Monday signing the merger papers with lawyers.

The lawyers do it without me, which is a happy thing.

Over the next days, it's going to be internal. I'm going to spend a lot of time meeting with people at the power plants and customer operations and call centers, learning more about the business.

Next week, I am meeting with a group of retirees in Greenville. I thought it would be good to meet with some people that have a long, vested interest in the company. I might get some very good advice from them.

I'm not going to be out giving speeches; my hope is to have hundreds of conversations, understand what Duke is all about.

Q. You've professed your pride in never having to lay off any workers in the past. Now, it looks like Duke hasn't gotten enough volunteers to leave the company, and you may have to force layoffs of 200 to 250 workers to meet the goal of 1,500 cuts.

Well, we've got a lot of people volunteering (to leave with a severance package) so far. We haven't completed the process. One of the things we're offering people is to be redeployed in the company; we'll give them the opportunity of being redeployed or taking the severance.

The target of 1,500 is over several years. We're off to a fast start with about 800 people volunteering in various places. My projection is that there is a very good chance we can get this down without layoffs. I'm still working to achieve the reductions we need without having to resort to that.

Q. Many are predicting a wave of consolidation sweeping the energy industry. How safe do you think Charlotte is as a headquarters city?

I think Duke -- we will become, at least for some short period, the largest utility in the United States. When the Exelon-PSEG merger closes, we'll drop to second.

We've got a strong base to build off of, and we can continue to build off that base we have in Charlotte.

I think that First Union was originally headquartered in Charlotte. We're building a base in a similar way that First Union did.

Q. You have said you plan to take a new employment contract with Duke, one similar to what Paul Anderson had as Duke CEO and chairman, which paid him exclusively in stock. When do you plan on this?

It's done. My contract looks almost identical to Paul's. I will be compensated in all stock and options.

There is no cash salary, although I get dividends off the stock. I'll be cheering for the dividend.

I've made a place. I will be the single largest individual shareholder of Duke. (As of, he owned 792,021 shares of Cinergy, worth about $36 million and which will convert to Duke stock at the merger's closing. Cinergy closed Friday at $45.41, down 72 cents.) In my 17, almost 18 years as CEO, I've been paid in stock a lot. I have never sold a share of stock.

I have exercised options and sold options. The money was always put back into stock. I've built up a lot of ownership, just because I think it's the right place for me to be.

Having an identity of interest with the shareholders is important. Being paid in stock says that I am focused on the right things -- earnings, dividends and on growing the business.

Q. You are receiving about $23 million in change-in-control benefits because of the merger. What are you planning to do with those dollars?

I said put them in the bank. Plus, I have to buy a house in Charlotte.

Q. You've said in the past you like the charter that Anderson gives to workers as a way to instill a sense of ethics. (The charter lists the company's promises to serve customers, shareholders and regulators.) Are you planning on doing something similar?

I'm actually adopting the charter. I had a chance to review it; I could have tweaked a word here or there. It's become very important to people at Duke and will become very important to all of the people at the new Duke.

Q. Duke has been hit in the Carolinas especially hard by the demise of textile mills and other industrials -- traditionally heavy power users. How concerned are you?

I think one of our top missions for our company is to work with local and state officials to attract more investment into the areas where we operate.

You need the Toyotas; you need the major new facilities. But also, as our economy's changed, you really need to attract a lot of businesses that are IQ businesses. It's not just manufacturing, it's attracting good software companies and companies that match up with the future.

While they may not be huge consumers of energy, they do create jobs. That's in addition to, not in lieu of (manufacturing).

Q. Do you feel like everyone's on the same page in terms of profit growth -- whether it be slower, as Duke has been targeting recently, or quicker like in the late '90s?

We learned some lessons in the late '90s and early this decade. You need to be realistic about how you grow; you've got to be able to live up to promises that you make. You're much better off underpromising and overperforming. I believe in underpromising and overdelivering.

That's how companies got in trouble in the late '90s -- they overpromised. It's seductive to do when you're in my job; you've got to resist the temptation.

Q. You have been active in the arts through the cities you've lived in. How involved in this community are you planning to be?

I'm going to be slow to sign up, until I get my feet on the ground. I want to be very active and involved in supporting the arts and the whole Charlotte community. I want to make sure we get all our people involved. It's very important to have our people involved in every significant organization in Charlotte, as I suspect we are today.

I chaired the United Way here (in Cincinnati) back in '97. I have a long history of chairing capital campaigns. I think that it's important to use your time to reinvest in the community, creating a great place that allows you to attract talent.

Q. Is there anything else you'd like to say?

How excited I am about leading this company. It's a company with a great tradition, and they have been leaders in the industry through the decades. I am proud to be selected and proud to have an opportunity to lead Duke. It's a company I've admired throughout my career. I'm looking forward to living and working in Charlotte.