<PAGE>
SCANA CORPORATION
Lynn M. Williams
Secretary
MARCH 17, 1998
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
FILED BY THE REGISTRANT X
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-6(e)(2))
X DEFINITIVE PROXY STATEMENT
Definitive Additional Materials Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
SCANA CORPORATION
------------------------
(Name of Registrant as Specified in Its Charter)
------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required. 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 (Set forth the amount on which the filing fee is
calculated and state how it was determined): (4) Proposed maximum
aggregate value of transaction:
------------------------
(5) Total fee paid:
------------------------
Fee paid previously 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.:
------------------------
25
<PAGE>
(3) Filing Party:
------------------------
(4) Date Filed:
------------------------
March 17, 1998
US Securities and Exchange Commission Judiciary Plaza 450 Fifth Street NW
Washington, DC 20549
Gentlemen:
We are transmitting for filing SCANA Corporation's definitive proxy
material, including the form of proxy, in connection with its 1998 Annual
Meeting of Shareholders to be held on Thursday, April 23, 1998. SCANA
Corporation's proxy materials will be mailed on or about March 17, 1998, to
shareholders of record as of March 10, 1998.
Attached as an appendix to the proxy statement is a copy of the Amended and
Restated Performance Share Plan which is being proposed for shareholder
approval. The shares of common stock that may be issued under the Plan have been
registered under the Securities Act of 1933, as amended.
Please call me at (803) 748-3683, if you have any comments or questions
regarding this transmission.
Thank you for your assistance in our efforts to file this document.
SINCERELY,
Lynn M. Williams Corporate Secretary lmw:rs
26
<PAGE>
[LOGO]
- --------------------------------------------------------------------------------
MARCH 17, 1998
TO OUR SHAREHOLDERS:
WE EXTEND TO YOU A CORDIAL INVITATION TO ATTEND THE 1998 ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON THURSDAY, APRIL 23, 1998, AT 10:00 A.M., EASTERN
DAYLIGHT TIME. THE MEETING WILL BE HELD IN THE BALLROOM OF THE ADAM'S MARK
HOTEL, 1200 HAMPTON STREET, COLUMBIA, SOUTH CAROLINA. THE MATTERS TO BE ACTED ON
AT THE MEETING ARE SET FORTH IN THE NOTICE OF ANNUAL MEETING. AT THE MEETING, WE
WILL REPORT ON THE COMPANY'S PROGRESS AND PLANS AND RESPOND TO YOUR QUESTIONS
AND COMMENTS.
IF YOU WILL NEED SPECIAL ASSISTANCE AT THE MEETING BECAUSE OF A DISABILITY,
PLEASE CONTACT THE OFFICE OF THE CORPORATE SECRETARY, MAIL CODE 134, SCANA
CORPORATION, 1426 MAIN STREET, COLUMBIA, SOUTH CAROLINA 29201.
WE WILL BE PROVIDING REFRESHMENTS PRIOR TO THE MEETING, WHICH WILL BE
AVAILABLE BEGINNING AT 9:00 A.M. PLEASE TAKE THIS OPPORTUNITY TO VIEW THE SCANA
DISPLAYS LOCATED IN THE RECEPTION AREA.
AT THE 1997 ANNUAL MEETING OF SHAREHOLDERS, 88.3% OF THE COMMON STOCK WAS
REPRESENTED IN PERSON OR BY PROXY. THOUGH THIS RESPONSE WAS GRATIFYING, WE WOULD
LIKE TO HAVE AN EVEN GREATER REPRESENTATION AT THE 1998 MEETING. THEREFORE,
WHETHER YOU OWN ONE SHARE OR MANY, IT IS IMPORTANT THAT YOU DATE, SIGN AND
RETURN YOUR PROXY AS SOON AS POSSIBLE. THE PROMPT RETURN OF YOUR PROXY WILL
REDUCE FOLLOW-UP WORK WITH ITS RELATED EXPENSE TO THE COMPANY.
SINCERELY,
/S/ WILLIAM B. TIMMERMAN
WILLIAM B. TIMMERMAN
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
M PRINTED ON RECYCLED PAPER
<PAGE>
[LOGO]
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS:
- --------------------------------------------------------------------------------
The 1998 Annual Meeting of Shareholders of SCANA Corporation (the "Company")
will be held on Thursday, April 23, 1998, at 10:00 A.M., Eastern Daylight Time,
in the ballroom of the Adam's Mark Hotel, 1200 Hampton Street, Columbia, South
Carolina. The matters to be considered and acted on by the shareholders at this
meeting are as follows:
1. the election of two Class I Directors;
2. the election of five Class II Directors;
3. the appointment of independent public accountants to audit the books of
the Company for the year ending December 31, 1998;
4. the approval of the amended and restated SCANA Corporation Performance
Share Plan;
and the transaction of such other business as may legally come before the
meeting.
Details of the matters to be acted on by the shareholders are set forth in
the Proxy Statement which begins on the following page.
All holders of issued and outstanding Common Stock of the Company of record
at the close of business on March 10, 1998, are entitled to notice of and to
vote at the meeting or any adjournment thereof. Seating space at the meeting
will be limited, therefore, only shareholders will be admitted.
By Order of the Board of Directors
Lynn M. Williams March 17, 1998
SECRETARY
PLEASE SIGN, DATE AND MAIL YOUR PROXY TODAY
IN THE ENVELOPE ENCLOSED
1
<PAGE>
[LOGO]
- --------------------------------------------------------------------------------
SCANA CORPORATION
1426 MAIN STREET
COLUMBIA, SOUTH CAROLINA 29201
------------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
APRIL 23, 1998
APPROXIMATE DATE OF FIRST MAILING TO SHAREHOLDERS: MARCH 17, 1998
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors of SCANA Corporation (herein called "SCANA" or the
"Company") to be used at the 1998 Annual Meeting of Shareholders of the Company
to be held on April 23, 1998, and at any adjournment thereof, with respect to
the matters referred to on the preceding page.
The Company's Annual Report to Shareholders for 1997, is being mailed along
with this Proxy Statement to each shareholder of record as of March 10, 1998
(the "Record Date").
VOTING PROCEDURE
The Annual Meeting is being called in order to consider and take action with
respect to the matters set forth in the Notice of Annual Meeting of Shareholders
on the preceding page, as more fully set forth below. Only holders of issued and
outstanding common stock of the Company ("Common Stock") on the Record Date, are
entitled to notice of and to vote at the meeting or any adjournment thereof. At
the Record Date, the Company had 107,222,913 outstanding shares of Common Stock,
each entitling the holder thereof to one vote per share.
Since many of our shareholders are unable to attend the Annual Meeting, the
Company's Board of Directors solicits proxies so that each shareholder has the
opportunity to vote on the proposals to be considered at the Annual Meeting.
When a proxy card is returned, properly signed and dated, the shares represented
thereby will be voted in accordance with the instructions on the proxy card.
However, if a shareholder does not return a signed proxy card, his or her shares
will not be voted by the Board-appointed Proxies.
Shareholders are urged to mark the boxes on the proxy card to indicate how
their shares are to be voted. If no choices are specified, the shares
represented by a properly signed and dated proxy card will be voted as
recommended by the Board of Directors. The proxy card also confers discretionary
authority on the Board-appointed Proxies to vote the shares represented by the
proxy on any other matter that is properly presented for action at the Annual
Meeting. As of the date of this Proxy Statement, the Board of Directors does not
know of any other matter which will come before the meeting. In the event that
any other matter legally comes before the meeting, the persons named in the
accompanying form of Proxy intend to vote all proxies in accordance with their
judgment on such a matter.
A shareholder who returns a proxy card may revoke it at any time before it
is voted by giving notice in writing to the Secretary of the Company, by
granting a subsequent proxy or by giving notice in person at the Annual Meeting.
If a shareholder participates in the SCANA Corporation Investor Plus Plan
("Investor Plus"), his proxy card represents both the number of shares
registered in his name and the number of full shares credited to his Investor
Plus account. All such shares will be voted in accordance with the instructions
on the proxy card.
2
<PAGE>
- --------------------------------------------------------------------------------
ELECTION OF DIRECTORS -- PROPOSALS 1 & 2
- --------------------------------------------------------------------------------
The Company's Restated Articles of Incorporation divide the Board of
Directors into three classes (I, II and III), with the members of each class
serving a three-year term.
At its April 24, 1997 meeting, the Board of Directors increased the number
of Class I Directors from two to four. James A. Bennett and Maceo K. Sloan were
elected to fill the two vacancies created. Under South Carolina Law, the terms
of office of Mr. Bennett and Mr. Sloan will expire at the 1998 Annual Meeting of
Shareholders. Therefore, the Board of Directors has nominated Mr. Bennett and
Mr. Sloan for election as Class I Directors to serve with the other two Class I
Directors for a term expiring in 2000.
The terms of the five Class II Directors presently in office will expire at
the 1998 Annual Meeting of Shareholders. All five of the Class II Directors
presently in office were elected at the 1995 Annual Meeting of Shareholders. The
terms of the Class II Directors elected at this meeting will expire at the
Annual Meeting of Shareholders in 2001. The Board of Directors has nominated
William B. Bookhart, Jr., Elaine T. Freeman, W. Hayne Hipp, F. Creighton
McMaster and John B. Rhodes as Class II Directors.
The accompanying proxy, unless you specify otherwise thereon, will be voted
for the election to the Board of Directors of the two nominees for Class I
Directors and the five nominees for Class II Directors. Should any nominee be
unavailable for election by reason of death or other unexpected occurrence, the
enclosed proxy may be voted with discretionary authority in connection with the
nomination and election of any substitute nominee.
Each holder of Common Stock of record at the close of business on March 10,
1998, is entitled to one vote per share so held for the election of each of the
persons nominated. Directors are elected by a plurality of the votes cast by the
holders of shares of the Company's Common Stock at a meeting at which a quorum
is present. "Plurality" means that if there are more nominees than positions to
be filled, the two individuals who receive the largest number of votes cast for
Class I Directors and the five individuals who receive the largest number of
votes cast for Class II Directors will be elected as directors. A vote indicated
as withheld from a nominee will not be cast for such nominee but will be counted
in determining the presence of a quorum.
The information set forth on the following pages concerning the nominees and
continuing directors has been furnished to the Company by such persons. Each
director of the Company is also a director of South Carolina Electric & Gas
Company, the principal subsidiary of the Company.
3
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL I -- NOMINEES FOR CLASS I DIRECTORS
TERMS TO EXPIRE AT THE ANNUAL MEETING IN 2000
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
JAMES A. BENNETT
Mr. Bennett is Senior Vice President and Director of Community Banking of First
Citizens Bank in Columbia, South Carolina, and has held this position since 1994.
From 1991 to 1994, he was President of Victory Savings Bank in Columbia, South
Carolina. Mr. Bennett, age 37, has been a director of the Company since 1997. He
is a member of the Audit Committee, the Nuclear Oversight Committee and the
Long-Term Compensation Committee.
MACEO K. SLOAN
Mr. Sloan is Chairman, President and Chief Executive Officer of Sloan Financial
Group, Inc., a holding company, and Chairman, President and Chief Executive
Officer of NCM Capital Management Group, Inc., an investment company, both of
which are located in Durham, North Carolina. He has held these positions for more
than five years. Mr. Sloan, age 48, has been a director of the Company since
1997. He is a member of the Executive Committee, the Management Development and
Corporate Performance Committee and the Long-Term Compensation Committee.
</TABLE>
4
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL 2 -- NOMINEES for CLASS II DIRECTORS
TERMS TO EXPIRE AT THE ANNUAL MEETING IN 2001
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
WILLIAM B. BOOKHART, JR.
Mr. Bookhart is a partner in Bookhart Farms, which operates a general farming
business in Elloree, South Carolina, and has held that position for more than
five years. Mr. Bookhart, age 56, has been a director of the Company since 1979.
He is a member of the Nuclear Oversight Committee, the Management Development and
Corporate Performance Committee and the Long-Term Compensation Committee.
ELAINE T. FREEMAN
Mrs. Freeman is the Executive Director of ETV Endowment of South Carolina, Inc.,
a non-profit organization located in Spartanburg, South Carolina, and has held
this position for more than five years. Mrs. Freeman, age 62, has been a director
of the Company since 1992, and also serves as a director of the National Bank of
South Carolina. She is Chairman of the Audit Committee and a member of the
Nuclear Oversight Committee and the Long-Term Compensation Committee.
W. HAYNE HIPP
Mr. Hipp is the President and Chief Executive Officer of The Liberty Corporation,
an insurance and broadcasting holding company headquartered in Greenville, South
Carolina, and has held these positions for more than five years. Mr. Hipp, age
58, has been a director of the Company since 1983, and also serves as a director
of The Liberty Corporation and Wachovia Corporation. He is a member of the
Executive Committee and the Audit Committee.
F. CREIGHTON MCMASTER
Mr. McMaster is the President and Manager of Winnsboro Petroleum Company, a
wholesale distributor of petroleum products located in Winnsboro, South Carolina,
and has held these positions for more than five years. Mr. McMaster, age 68, has
been a director of the Company since 1974, and also serves as a director of First
Union-South Carolina. He is Chairman of the Nuclear Oversight Committee and a
member of the Audit Committee and the Long-Term Compensation Committee.
JOHN B. RHODES
Mr. Rhodes is the Chairman and Chief Executive Officer of Rhodes Oil Company,
Inc., a distributor of petroleum products in Walterboro, South Carolina, and has
held these positions for more than five years. Mr. Rhodes, age 67, has been a
director of the Company since 1967. He is a member of the Management Development
and Corporate Performance Committee, the Nuclear Oversight Committee and the
Long-Term Compensation Committee.
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
CONTINUING DIRECTORS
CLASS I -- TERMS TO EXPIRE AT THE ANNUAL MEETING IN 2000
<TABLE>
<C> <S>
- --------------------------------------------------------------------------------
LYNNE M. MILLER
Ms. Miller, age 46, has been Chief Executive Officer of Environmental Strategies
Corporation, an environmental consulting and engineering firm headquartered in
Reston, Virginia, since February 1998. Prior to February 1998, she served as
President of Environmental Strategies Corporation for more than five years. She
is a member of the Executive Committee, the Nuclear Oversight Committee and the
Long-Term Compensation Committee.
WILLIAM B. TIMMERMAN
Mr. Timmerman has been Chairman of the Board and Chief Executive Officer of the
Company since March 1, 1997, and President of the Company since December 13,
1995. From August 21, 1996 until March 1, 1997, he was Chief Operating Officer of
the Company. From May 1, 1994 to December 13, 1995, he was Executive Vice
President, Chief Financial Officer and Controller of the Company. For more than
five years prior to May 1, 1994, he was Senior Vice President of the Company as
well as its Chief Financial Officer and Controller. Mr. Timmerman, age 51, has
been a director of the Company since 1991 and also serves as a director of
Powertel, Inc., ITC^DeltaCom, Inc., The Liberty Corporation and Wachovia Bank,
N.A. Mr. Timmerman is an ex-officio member of all Board Committees except the
Audit Committee and the Long-Term Compensation Committee.
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
CONTINUING DIRECTORS
CLASS III -- TERMS TO EXPIRE AT THE ANNUAL MEETING IN 1999
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
BILL L. AMICK
Mr. Amick is Chairman of the Board and Chief Executive Officer of Amick Farms,
Inc., a vertically integrated broiler operation in Batesburg, South Carolina, and
also serves as Chairman and Chief Executive Officer of Amick Processing, Inc. and
Amick Broilers, Inc. He has held these positions for more than five years. Mr.
Amick, age 54, has been a director of the Company since 1990. He is a member of
the Executive Committee, the Management Development and Corporate Performance
Committee and the Long-Term Compensation Committee.
WILLIAM T. CASSELS, JR.
Mr. Cassels is Chairman of the Board of Southeastern Freight Lines, Inc., a
trucking business in Columbia, South Carolina, and has held that position for
more than five years. Mr. Cassels, age 68, has been a director of the Company
since 1990. He serves as an advisory board member of Liberty Mutual Insurance
Group. He is a member of the Audit Committee, the Management Development and
Corporate Performance Committee and the Long-Term Compensation Committee.
HUGH M. CHAPMAN
Mr. Chapman retired from NationsBank South of Atlanta, Georgia, a division of
NationsBank Corporation of Charlotte, North Carolina, on June 30, 1997.
Previously, he served as Chairman of NationsBank South for more than 5 years. Mr.
Chapman, age 65, has been a director of the Company since 1988. He also serves as
a director of West Point-Stevens. He is Chairman of the Management Development
and Corporate Performance Committee and the Long-Term Compensation Committee and
a member of the Executive Committee.
LAWRENCE M. GRESSETTE, JR.
Mr. Gressette has been Chairman Emeritus of the Company since his retirement from
the Company on February 28, 1997. From February 1, 1990 until his retirement, he
was Chairman and Chief Executive Officer of the Company and all of its
subsidiaries. Mr. Gressette, age 66, has been a director since 1987. In addition,
he serves as a director of Wachovia Corporation and Powertel, Inc. Mr. Gressette
is Chairman of the Executive Committee and a member of the Long-Term Compensation
Committee.
</TABLE>
7
<PAGE>
SECURITY OWNERSHIP INFORMATION
- --------------------------------------------------------------------------------
The table set forth below indicates the shares of the Company's Common Stock
beneficially owned as of March 10, 1998, by each director and nominee, each of
the persons named in the Summary Compensation Table on page 12 (the "Named
Executive Officers") and the directors and current executive officers of the
Company as a group.
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE
BENEFICIAL OWNER OF OWNERSHIP (1)
<S> <C>
B. L. Amick 3,355
J. A. Bennett 669
W. B. Bookhart, Jr. 17,973
W. T. Cassels, Jr. 2,355
H. M. Chapman 6,345
E. T. Freeman 4,675
A. H. Gibbes 14,305
L. M. Gressette, Jr. 59,352
<CAPTION>
NAME OF AMOUNT AND NATURE
BENEFICIAL OWNER OF OWNERSHIP (1)
<S> <C>
W. Hayne Hipp 3,145
K. B. Marsh 9,760
F. C. McMaster 5,975
L. M. Miller 1,281
C. B. Novinger 5,285
J. B. Rhodes 9,052
J. L. Skolds 9,473
M. K. Sloan 581
W. B. Timmerman 28,567
</TABLE>
All directors, nominees and current executive officers as a group (18 persons)
TOTAL 188,264
TOTAL PERCENT OF CLASS 0.2%
The information set forth above as to the security ownership of Common Stock has
been furnished to the Company by such persons.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
NAME AMOUNT
AND ADDRESS OF AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
<S> <C> <C>
First Union Corporation 8,843,075 8.24%
("First Union")(2)
Post Office Box 1329
Greenville, South Carolina 29602
</TABLE>
The share ownership indicated above for First Union Corporation is based on a
Form 13G dated February 11, 1998 which was filed with the Securities and
Exchange Commission. Shares shown are shares held by subsidiaries of First Union
Corporation as Trustee under the Company's Employee Stock Purchase Savings Plan
and as such, represent shares owned by employees. Except as set forth above, to
the Company's knowledge as of March 10, 1998, no person owned beneficially 5% or
more of the Company's Common Stock.
- ------------------------
(1) Includes shares owned by close relatives, the beneficial ownership of which
is disclaimed by the director, nominee or Named Executive Officers, as
follows: Mr. Amick -- 480; Mr. Bookhart -- 5,029; Mr. Gibbes -- 90; Mr.
Gressette -- 1,060; and Mr. McMaster -- 2,000; and by all directors,
nominees and current executive officers -- 8,659 in total.
Includes shares purchased through December 31, 1997, but not thereafter, by
the Trustee under the Company's Stock Purchase Savings Plan (the "Savings
Plan").
(2) First Union has sole power to vote 83,562 of such shares, shared power to
vote 8,350 of such shares, sole power to dispose or direct the disposition
of 8,788,035 and shared power to dispose or to direct the disposition of
47,016 of such shares.
8
<PAGE>
- --------------------------------------------------------------------------------
DIRECTOR INFORMATION
- --------------------------------------------------------------------------------
BOARD MEETINGS AND STANDING COMMITTEES
During 1997, the Board of Directors of the Company held eight meetings. In
addition, directors attended meetings of standing committees of which they were
members. Each director attended at least 75% of the aggregate of meetings of the
Board of Directors and meetings of the committees on which he or she served
which were held during 1997.
EXECUTIVE COMMITTEE. The Executive Committee held six meetings during 1997.
This committee, except when limited by law, exercises all of the powers and
duties of the Board of Directors in the management of the Company when the Board
is not in session and which are not in conflict with specific powers conferred
by the Board upon any other committee. The Executive Committee (1) provides
counsel to the Chief Executive Officer; (2) reviews management's long-range
strategic plans, goals and objectives; (3) reviews budgets, financial plans,
plans for debt financing and the financing of acquisitions, investments and
capital expenditures of a major nature; (4) reviews and recommends actions
relating to dividends; (5) monitors advertising and philanthropic activities;
and (6) recommends levels of expenditures to the Board. The committee also
recommends the slate of director nominees to be presented for election at each
annual meeting of shareholders and recommends assignments of directors to serve
on Board Committees. Any shareholder may recommend to the Executive Committee
persons for nomination as director by writing to the Secretary of the Company
stating the full name, address and qualifications of each such person.
MANAGEMENT DEVELOPMENT AND CORPORATE PERFORMANCE COMMITTEE (THE "PERFORMANCE
COMMITTEE"). The Performance Committee held five meetings during 1997. This
committee (1) reviews the investment policies of the Company's Retirement Plan,
selects its investment managers and monitors the performance of such investment
managers; (2) recommends to the Board persons to serve as officers of the
Company (and its subsidiaries); (3) recommends to the Board salary and
compensation levels, including fringe benefits for officers and directors of the
Company; (4) reviews Company compensation plans; (5) provides direction
regarding the operation of the Company's Retirement Plan and other employee
welfare benefit plans; (6) reviews management's resources and development and
recommends to the Board succession plans for senior management; (7) reviews the
Company's active operating performance; (8) reviews the Company's performance in
regard to well-being of employees, including safety, health and equality of
treatment; (9) reviews outside relationships, including those with governments,
other businesses and the community; and (10) reviews the impact of regulations,
litigation and any public policy controversies that may affect the Company.
THE LONG-TERM COMPENSATION SUBCOMMITTEE OF THE PERFORMANCE COMMITTEE. The
Long-Term Compensation Subcommittee of the Performance Committee held two
meetings in 1997. The Long-Term Compensation Subcommittee of the Performance
Committee recommends to the Long-Term Compensation Committee awards to be made
under the SCANA Performance Share Plan (the "Performance Share Plan").
LONG-TERM COMPENSATION COMMITTEE. The Long-Term Compensation Committee held
two meetings during 1997. The Long-Term Compensation Committee administers the
Performance Share Plan.
AUDIT COMMITTEE. The Audit Committee held three meetings during 1997. The
Audit Committee (1) meets periodically with the Company's internal auditors and
independent public accountants to discuss and evaluate the scope and results of
audits and the Company's accounting procedures and controls; (2) reviews the
Company's financial statements before submission to the Board for approval prior
to dissemination to shareholders, the public or regulatory agencies; (3)
recommends to the Board (for appointment by the Board and ratification by the
shareholders) independent public accountants to be used by the Company; and (4)
maintains responsibility for the Company's compliance program.
NUCLEAR OVERSIGHT COMMITTEE. The Nuclear Oversight Committee held three
meetings in 1997. This committee (1) monitors the Company's nuclear operations;
(2) meets periodically with Company management to discuss and evaluate the
Company's nuclear operations, including regulatory matters, operating results,
training and other related topics; (3) participates in an annual meeting to
review overall past performance and future plans for nuclear operations; (4)
tours the Company's plant and training facilities at least once a year; (5) on a
periodic basis reviews with the Institute of Nuclear Power Operations that
organization's appraisal of the Company's nuclear operations; and (6)
periodically presents an independent report to the Board of Directors on the
status of the Company's nuclear operations.
9
<PAGE>
Compensation
- --------------------------------------------------------------------------------
FEES. During 1997, directors who were not employees of the Company were
paid $17,600 annually for services rendered, $1,800 for each Board meeting
attended and $850 for attendance at a committee meeting which is not held on the
same day as a regular meeting of the Board. The fee for attendance at a
telephone conference meeting is $200. The fee for attendance at a conference is
$850. In addition, directors are paid, as part of their compensation, travel,
lodging and incidental expenses related to attendance at meetings and
conferences.
The Board of Directors approved a plan effective January 1, 1997, whereby
non-employee directors receive on a quarterly basis, 41% of their annual fee in
shares of Common Stock. The purpose of the plan is to promote the achievement of
long-term objectives of the Company by linking the personal interests of the
non-employee directors to those of the Company's shareholders by paying a
portion of director compensation in stock. The Company believes this linkage
will further promote the achievement of its long-term objectives.
Directors who are employees of the Company or its subsidiaries receive no
compensation for serving as directors or attending meetings.
In addition to regular director fees which he began to receive following his
retirement, Mr. Gressette, as a Company retiree, received the retirement
benefits described in the Summary Compensation Table on page 12.
DEFERRAL PLAN. The Company has a plan (the "Voluntary Deferral Plan")
pursuant to which directors may defer all or a portion of the fees that are to
be paid to them in cash for services rendered and meeting attendance. Interest
is earned on the deferred amounts at a rate set by the Performance Committee.
Since January 1, 1997, the rate has been set at the announced prime rate of
Wachovia Bank, N.A. Mr. Cassels and Mr. Rhodes were the only directors
participating in the plan during 1997. Mr. Cassels became a participant in
January 1994, and Mr. Rhodes in July 1987. Interest credited to their deferral
accounts during 1997, was $8,609 and $27,228, respectively.
ENDOWMENT PLAN. Upon election to a second term, each director becomes
eligible to participate in the Directors' Endowment Plan, which provides for the
Company to make a tax deductible, charitable contribution totaling $500,000 to
institutions of higher education designated by the director. The plan is
intended to reinforce the Company's commitment to quality higher education and
is intended to enhance the Company's ability to attract and retain qualified
board members. A portion is contributed upon retirement of the director and the
remainder upon the director's death. The plan is funded in part through
insurance on the lives of the directors. Designated in-state institutions of
higher education must be approved by the Chief Executive Officer of the Company.
Any out-of-state designation must be approved by the Performance Committee. The
designated institutions are reviewed on an annual basis by the Chief Executive
Officer to assure compliance with the intent of the program.
Compensation Committee Interlocks and Insider Participation
- --------------------------------------------------------------------------------
During 1997, no officer, employee or former officer of the Company or any of
its subsidiaries, served as a member of the Long-Term Compensation Committee or
the Performance Committee, except Mr. Gressette, who served as an ex-officio,
non-voting member of the Performance Committee until his retirement in February
1997 and as a member of the Long-Term Compensation Committee following his
retirement, and Mr. Timmerman who has been an ex-officio, non-voting member of
the Performance Committee since March 1, 1997. Although Mr. Gressette and Mr.
Timmerman served as members of the Performance Committee during 1997, neither
participated in any of its decisions concerning executive officer compensation.
As a member of the Long-Term Compensation Committee following his retirement,
Mr. Gressette participated in the decisions regarding target awards made in 1997
under the Performance Share Plan.
Since January 1, 1997, the Company has engaged in business transactions with
entities with which Mr. Amick (a member of the Performance Committee and the
Long-Term Compensation Committee), Mr. Chapman (Chairman of both the Performance
Committee and the Long-Term Compensation Committee) and Mr. McMaster (a member
of the Long-Term Compensation Committee) are related.
Mr. Amick is the owner of Team Amick Motor Sports, a business that owns and
operates a NASCAR sanctioned racing car. This car participates in the Busch
Grand National Racing Series. The Company has entered into a shared sponsorship
agreement with Team Amick Motor Sports pursuant to which the Company will
receive promotional consideration associated with NASCAR racing for an annual
fee of $500,000.
Mr. Chapman was Chairman of NationsBank South, a division of NationsBank
Corporation, until his retirement
10
<PAGE>
on June 30, 1997. Since January 1, 1997, the Company has engaged in various
transactions in which affiliates of NationsBank Corporation acted as lender or
provider of lines of credit or credit support to the Company and its
subsidiaries. The amount paid during 1997 by the Company and its subsidiaries to
NationsBank Corporation affiliates on account of such transactions was $361,870.
In addition, during 1997, a NationsBank Corporation affiliate and a Company
subsidiary have engaged in options and futures transactions and forward
contracts relating to forecasted natural gas production. The amount paid during
1997 by the Company subsidiary to NationsBank Corporation affiliates on account
of such transactions was $7,602,582. It is anticipated that similar transactions
will continue in the future.
Mr. McMaster is the President and Manager of Winnsboro Petroleum Company.
Purchases from Winnsboro Petroleum Company totaling $61,819 for petroleum
products were made during 1997 by the Company and its subsidiaries. It is
anticipated that similar transactions will continue in the future.
11
<PAGE>
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
The following table contains information with respect to compensation paid or
accrued during the years 1997, 1996 and 1995, to the Chief Executive Officer of
the Company, to each of the other four most highly compensated executive
officers of the Company during 1997, who were serving as executive officers of
the Company at the end of 1997, and to L. M. Gressette, Jr., the Company's
former Chief Executive Officer, who retired on February 28, 1997.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
PAYOUTS
OTHER ANNUAL LTIP ALL OTHER
BONUS(1) COMPENSATION(2) PAYOUTS(3) COMPENSATION(4)
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
W. B. Timmerman 1997 400,634(5) 318,815 12,220 88,338 24,038
Chairman, President and 1996 335,266 196,832 6,399 109,819 20,116
Chief Executive Officer 1995 254,214 101,588 987 150,353 15,127
and Director--SCANA
Corporation
J. L. Skolds 1997 277,132 161,677 5,777 70,283 16,628
SCANA Group Executive- 1996 215,708 114,099 2,453 55,513 12,943
Electric Group; President 1995 176,156 74,151 54 76,128 10,569
and Chief Operating Officer--
South Carolina Electric
and Gas Company
A. H. Gibbes 1997 246,308 149,406 7,247 52,874 14,455
SCANA Group Executive- 1996 187,755 125,204 3,013 55,513 11,505
Gas Group; President-- 1995 154,183 61,350 0 76,128 9,240
South Carolina
Pipeline Corporation
C. B. Novinger 1997 213,521 104,276 5,315 52,874 12,811
Senior Vice President- 1996 188,875 75,667 2,436 55,513 7,678
Administration, 1995 172,929 61,350 205 76,128 5,694
Governmental and
Public Affairs--SCANA
Corporation
K. B. Marsh 1997 199,845 104,276 2,945 44,491 11,991
Vice President 1996 166,616 75,667 1,189 46,462 9,997
Chief Financial Officer and 1995 133,768 63,757 0 51,390 8,026
Controller--SCANA
Corporation
L. M. Gressette, Jr. 1997 132,584 79,704 0 167,003 399,950
Chairman Emeritus and 1996 483,952 274,320 5,998 285,408 29,037
Chairman of the 1995 449,246 197,500 65,779 390,156 26,955
Executive Committee--
SCANA Corporation
</TABLE>
(1) Payments under the Annual Incentive Plan described hereafter.
(2) For 1997, other annual compensation consists of life insurance premiums on
policies owned by Named Executive Officers and payments to cover taxes on
benefits of $9,521 and $2,699 for Mr. Timmerman; $4,694 and $1,083 for Mr.
Skolds; $6,352 and $895 for Mr.Gibbes; $4,813 and $502 for Mrs. Novinger;
and $2,681 and $264 for Mr. Marsh.
(3) Payments under the Performance Share Plan described hereafter.
(4) All other compensation for all Named Executive Officers except Mr.
Gressette, consists solely of Company contributions to defined contribution
plans based on the funding formula applicable to all Company employees. For
Mr. Gressette, all other compensation for 1997 consists of payments under
Company retirement plans of $378,681 and Company contributions to defined
contribution plans of $21,269.
(5) Reflects actual salary paid in 1997. Base salary of $425,006, as referenced
on page 18, became effective on May 1, 1997.
12
<PAGE>
Long-Term Incentive Plan Award Opportunities
- --------------------------------------------------------------------------------
The following table shows the target awards made in 1997 for potential
payment in 2000 under the Performance Share Plan, and estimated future payouts
under that plan at threshold, target and maximum levels for the Named Executive
Officers.
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE PAYOUTS UNDER
SHARES, PERIOD NON-STOCK PRICE-BASED PLANS
UNITS OR UNTIL -------------------------------------
OTHER MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
<S> <C> <C> <C> <C> <C>
W. B. Timmerman 11,030 1997-1999 4,412 11,030 16,545
J. L. Skolds 5,560 1997-1999 2,224 5,560 8,340
A. H. Gibbes 4,300 1997-1999 1,720 4,300 6,450
C. B. Novinger 3,010 1997-1999 1,204 3,010 4,515
K. B. Marsh 3,010 1997-1999 1,204 3,010 4,515
L. M. Gressette, Jr. 282 1997-1999 112 282 423
</TABLE>
Payouts occur when the Company's Total Shareholder Return ("TSR") is in the
top two-thirds of the PSP Peer Group, and will vary based on SCANA's ranking
against the peer group. Executives earn threshold payouts at the 33rd percentile
of three-year performance. Target payouts will be made at the 50th percentile of
three-year performance. Maximum payouts will be made when the TSR is at or above
the 75th percentile of the peer group. Payments will be made on a sliding scale
for performance between threshold and target and target and maximum. No payouts
will be earned if performance is at less than the 33rd percentile. Awards are
denominated in shares of SCANA Common Stock and may be paid in either stock or
cash or a combination of both.
Defined Benefit Plans
- --------------------------------------------------------------------------------
In addition to the qualified Retirement Plan for all employees, the Company
has Supplemental Executive Retirement Plans ("SERPs") for certain eligible
employees, including officers. A SERP is an unfunded plan which provides for
benefit payments in addition to those payable under a qualified retirement plan.
It maintains uniform application of the Retirement Plan benefit formula and
would provide, among other benefits, payment of Retirement Plan formula pension
benefits, if any, which exceed those payable under the Internal Revenue Code
("IRC") maximum benefit limitations.
The following table illustrates the estimated maximum annual benefits
payable upon retirement at normal retirement date under the Retirement Plan and
the SERPs.
13
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
SERVICE YEARS
FINAL -----------------------------------------------------
AVERAGE PAY 15 20 25 30 35
- -------------
<S> <C> <C> <C> <C> <C>
$ 150,000 41,965 55,953 69,942 83,930 86,668
200,000 56,965 75,953 94,942 113,930 117,918
250,000 71,965 95,953 119,942 143,930 149,168
300,000 86,965 115,953 144,942 173,930 180,418
350,000 101,965 135,953 169,942 203,930 211,668
400,000 116,965 155,953 194,942 233,930 242,918
450,000 131,965 175,953 219,942 263,930 274,168
500,000 146,965 195,953 244,942 293,930 305,418
550,000 161,965 215,953 269,942 323,930 336,668
600,000 176,965 235,953 294,942 353,930 367,918
650,000 191,965 255,953 319,942 383,930 399,168
700,000 206,965 275,953 344,942 413,930 430,418
750,000 221,965 295,953 369,942 443,930 461,668
800,000 236,965 315,953 394,942 473,930 492,918
</TABLE>
For all the Named Executive Officers for 1997, the compensation shown in the
column labeled "Salary" of the Summary Compensation Table is covered by the
Retirement Plan and/or a SERP. As of December 31, 1997, Messrs. Timmerman,
Skolds, Gibbes and Marsh had credited service under the Retirement Plan (or its
equivalent under the SERP) of 19, 11, 16 and 13 years, respectively, while Mrs.
Novinger had credited service of 27 years. Mr. Gressette currently is receiving
a monthly benefit of $28,380 under the Retirement Plan and a SERP. Benefits are
computed based on a straight-life annuity with an unreduced 60% surviving spouse
benefit. The amounts in the above table assume continuation of the primary
Social Security benefits in effect at January 1, 1998, and are not subject to
any deduction for Social Security or other offset amounts.
The Company also has a Key Employee Retention Plan (the "Key Employee
Retention Plan") covering officers and certain other executive employees that
provides supplemental retirement and/or death benefits for participants. Under
the plan, each participant may elect to receive either (i) a monthly retirement
benefit for 180 months upon retirement at or after age 65, equal to 25% of the
average monthly salary of the participant over his final 36 months of employment
prior to age 65, or (ii) an optional death benefit payable monthly to a
participant's designated beneficiary for 180 months, in an amount equal to 35%
of the average monthly salary of the participant over his final 36 months of
employment prior to age 65. In the event of the participant's death prior to age
65, the Company will pay to the participant's designated beneficiary for 180
months, a monthly benefit equal to 50% of such participant's base monthly salary
in effect at death.
All the Named Executive Officers are participating in the plan. Mr.
Gressette is receiving an annual benefit of $113,854 under the Key Employee
Retention Plan. The estimated annual retirement benefits payable at age 65,
based on projected eligible compensation (assuming increases of 4% per year) to
the other Named Executive Officers are as follows: Mr. Timmerman--$170,199; Mr.
Skolds--$135,858; Mr. Gibbes--$108,125; Mrs. Novinger --$100,453; and Mr.
Marsh--$119,695.
Termination, Severance and Change in Control Arrangements
- --------------------------------------------------------------------------------
Since its approval by the Board on December 18, 1996, the Company has
maintained an Executive Benefit Plan Trust (the "Trust"). The purpose of the
Trust and the related plans is to help retain and attract quality leadership in
key Company positions in the current transitional environment of the electric
utility industry. The Trust is used to receive Company contributions which may
be used to pay the deferred compensation benefits of certain directors,
executives and other key employees of the Company in the event of a Change in
Control (as defined in the Trust). All the Named Executive Officers participate
in certain of the plans listed below (the "Plans") which are covered by the
Trust.
(1) SCANA Corporation Voluntary Deferral Plan
(2) SCANA Corporation Supplementary Voluntary
Deferral Plan
(3) SCANA Corporation Key Employee Retention
Plan
14
<PAGE>
(4) SCANA Corporation Supplemental Executive
Retirement Plan
(5) SCANA Corporation Performance Share Plan
(6) SCANA Corporation Annual Incentive Plan
(7) SCANA Corporation Key Executive Severance
Benefits Plan
(8) SCANA Corporation Supplementary Key
Executive Severance Benefits Plan
The Trust and the Plans provide flexibility to the Company in responding to
a Potential Change in Control (as defined in the Trust) depending upon whether
the Change in Control would be viewed as being "hostile" or "friendly". This
flexibility includes the ability to deposit and withdraw Company contributions
up to the point of a Change in Control, and to affect the number of plan
participants who may be eligible for benefit distributions upon, or following, a
Change in Control. The Plans listed above at items (7) and (8) cover all the
Named Executive Officers except Mr. Gressette.
The Key Executive Severance Benefits Plan is operative as a "single trigger"
plan, meaning that upon the occurrence of a "hostile" Change in Control,
benefits provided under Plans (1) through (6) above would be distributed in a
lump sum. Under the terms of the Trust, in the event of a Change in Control that
would trigger operation of the Key Executive Severance Benefits Plan, Mr.
Gressette would receive immediate payout of all benefits under any of the Plans
in which he is then participating.
In contrast, the Supplementary Key Executive Severance Benefits Plan (the
"Supplementary Plan") is operative for a period of twenty-four months following
a Change in Control which prior to its occurrence is viewed as being "friendly".
In this circumstance, the Key Executive Severance Benefits Plan is inoperative.
The Supplementary Plan is a "double trigger" plan that would pay benefits in
lieu of those otherwise provided under plans (1) through (6) in either of two
circumstances: (a) the participant's involuntary termination of employment
without "Just Cause", or (b) the participant's voluntary termination of
employment for "Good Reason" (as these terms are defined in the Supplementary
Plan).
Benefit distributions relative to a Change in Control, as to which either
the Key Executive Severance Benefits Plan or the Supplementary Plan is
operative, will be grossed up to include estimated federal, state and local
income taxes and any applicable excise taxes owed by Plan participants on those
benefits, and paid in a lump sum. The benefit distributions would also be
calculated so as to include, in addition to other benefits:
(a) Three times the sum of: (1) the officer's annual
base salary in effect as of the Change in Control and (2) the larger of (i) the
officer's full targeted annual incentive opportunity in effect as of the Change
in Control under the Annual Incentive Plan or (ii) the officer's average of
actual annual incentive bonuses received during the prior three years under the
Annual Incentive Plan; and
(b) an amount equal to the projected cost for
coverage for three full years following the Change in Control as though the
officer had continued to be a Company employee with respect to medical coverage,
long-term disability coverage and either Life Plus (a special life insurance
program combining whole life and term coverages) or group term life coverage in
accordance with the officer's actual election, in each case so as to provide
substantially the same level of coverage and benefits as the officer enjoyed as
of the date of the Change in Control.
Benefit distributions pertaining to the Voluntary Deferral Plan would be
calculated as of the date of the Change in Control inclusive of interest
provided under the plan through such date, and benefits pertaining to the
Supplementary Voluntary Deferral Plan would be calculated to include any implied
dividends accruable under the plan through the date of the Change in Control.
Benefit distributions pertaining to the Key Employee Retention Plan would be
calculated inclusive of projected increases to each participant's base salary
using a fixed, market competitive rate as though the participant had reached the
earlier of age 65 or completed 35 years of service.
Benefit distributions pertaining to the Supplemental Executive Retirement
Plan would be calculated as an actuarial equivalent through the date of the
Change in Control with three additional years of compensation at the
participant's rate then in effect as though the participant had attained age 65
and completed 35 years of benefit service as of the date of the Change in
Control and without any early retirement or other actuarial reductions, which
benefit would then be reduced by the actuarial equivalent of the participant's
qualified plan benefit amount under the Retirement Plan.
Benefit distributions pertaining to the Performance Share Plan would be
equal to 100% of the target award as granted for all performance periods which
are not yet completed as of the date of the Change in Control. Benefit
distributions pertaining to the Annual Incentive Plan would be equal to 100% of
the target award.
15
<PAGE>
- --------------------------------------------------------------------------------
REPORT ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
SCANA's executive compensation program is designed to support the Company's
overall objective of creating shareholder value. This is accomplished through
the following:
- Hiring and retaining the high calibre of executive talent needed to
manage the Company today and to position it for the future.
- Having a pay-for-performance philosophy that links rewards to both
overall corporate and specific business unit results.
- Placing a substantial portion of pay for senior executives "at-risk", and
aligning the interests of the executives with the long-term interests of
the shareholders through the Performance Share Plan.
- Balancing the elements of the compensation program to reflect the
Company's financial, customer-oriented and strategic goals.
We believe the program plays a vital role in keeping our executives focused
on enhancing shareholder value.
A description of the components of the Company's executive compensation
program follows. Following that is a discussion of the compensation paid or
accrued in 1997, to the Company's Chief Executive Officer.
ELEMENTS OF THE PROGRAM
Executive compensation consists primarily of three key components: base
salary, short-term incentive compensation ("Annual Incentive Plan") and
long-term incentive compensation ("Performance Share Plan").
Compensation levels for these components are established annually based on a
comparison to the "market" which consists of utilities of various sizes in
varying geographic locations (both in adjacent states as well as throughout the
United States) and smaller telecommunications companies. Results are adjusted
through regression analysis to account for differences in company size.
Approximately 65% of the "market" companies are included in the Performance
Share Plan Peer Group ("PSP Peer Group") shown in the Performance Graph on page
20. The Company believes that its most direct competitors for executive talent
are not necessarily all the companies included in the PSP Peer Group.
For 1997, compensation levels for all components of executive compensation
were slightly below the market median. At the end of 1996, the Company adopted a
philosophy of moving targets to competitive levels (market median) over the next
several years. The Company believes this is necessary with the increasingly
competitive nature of the utility industry in order to attract and retain a
highly competent executive team.
The following paragraphs describe in more detail each element of the
Company's compensation program for executive officers. In determining each
component of compensation, all elements of the compensation package, including
severance plans, insurance and other benefits, are considered.
BASE SALARIES
Executive salaries are reviewed annually by the Performance Committee.
Adjustments may be made on the basis of subjective assessment of individual
performance, relative levels of responsibility, prior experience, breadth of
knowledge and changes in market pay practices. For 1997, base salaries for
officers were moderately below the median of the "market" group described above.
ANNUAL INCENTIVE PLANS
The Company has Annual Incentive Plans for officers of SCANA and its
subsidiaries. The plans promote the Company's pay-for-performance philosophy, as
well as its goal of having a meaningful amount of executive pay "at-risk".
Through these plans, financial incentives are provided in the form of annual
cash bonuses.
Executives eligible for these plans are assigned threshold, target and
maximum bonus levels as a percentage of salary level. Bonuses earned are based
on the level to which preestablished goals are achieved. Award payouts may
increase to a maximum of 1.5 times target if performance exceeds the goals
established. Award payouts may decrease, generally to a minimum of one-half the
target-level awards, if performance is below targeted goals. Awards earned based
on the achievement of preestablished goals may nonetheless be decreased to zero,
if the Performance Committee in its discretion, determines that actual results
do not warrant the levels of payouts otherwise earned.
The various Annual Incentive Plans in which officers of SCANA and its
subsidiaries participate place their major emphasis on achieving profitability
targets, with the remaining emphasis focused upon meeting annual business
objectives relating to such matters as efficiency, quality of service, customer
satisfaction and progress toward the Company's strategic objectives for SCANA
and its various business units. These plans also allow for an adjustment of an
award based upon a subjective evaluation of individual performance. Each award
may be increased or decreased by no more than 20% based on this evaluation, but
in no case may an award exceed the maximum payout of 1.5 times target.
For 1997, the specific measures in each plan for the officers included in
the Summary Compensation Table on
16
<PAGE>
page 12 are described below. The relationship of performance to payouts for the
officers in each plan also is discussed.
- 1997 awards for officers of SCANA were based on two performance
categories. Seventy-five percent of the total 1997 target award was based
on SCANA earnings per share ("EPS") goals, a numerically measurable
target. An additional 25% was tied to the achievement of the annual
business objectives established in the Company's Strategic Plan. For
1997, SCANA's EPS results and achievement of annual business objectives
were above the goals established which resulted in the achievement of
111% of target. After the adjustment for individual performance by the
corporate officers, payouts ranged from 113% to 130% of the target award.
- 1997 awards for officers of South Carolina Electric & Gas Company
("SCE&G") were based on two performance categories: SCANA and SCE&G EPS
and achievement of annual business objectives (activities that focus on
improvements in various areas including existing operating procedures,
quality of service and product and human resources matters). The
weighting of the individual components for 1997 was EPS 75% and annual
business objectives 25%. For 1997, and after the adjustment for
individual performance, payouts ranged from 75% to 122% of the target
award.
- 1997 awards for officers of South Carolina Pipeline Corporation ("SCPC")
were based 75% on EPS and 25% on achievement of annual business
objectives related to operating and maintenance cost reduction. For 1997,
and after the adjustment for individual performance, payouts ranged from
129% to 149% of the target award.
LONG-TERM PERFORMANCE SHARE PLAN
The Performance Share Plan for officers of SCANA and its subsidiaries
measures the Company's Total Shareholder Return ("TSR") relative to a group of
peer companies over a three-year period. The PSP Peer Group includes 92 electric
and gas utilities, none of which have annual revenues of less than $100 million.
TSR is stock price increase over the three-year period, plus cash dividends
paid during the period, divided by stock price as of the beginning of the
period. Comparing the Company's TSR to the TSR of a large group of other
utilities reflects the Company's recognition that investors could have invested
their funds in other utility companies and measures how well SCANA did when
compared to others operating in similar interest, tax, economic and regulatory
environments.
Executives selected to participate in the Performance Share Plan are
assigned target award opportunities at the beginning of each three-year period
based primarily on their salary level. In determining award sizes, levels of
responsibilities and competitive practices also are considered. Awards under
this plan represent a significant portion of executives' "at-risk" compensation.
To provide additional incentive for executives, and to ensure that executives
are only rewarded when shareholders gain, actual payouts may exceed the median
of the "market" only when performance is above the 50th percentile of the peer
group. For lesser performance, awards will be at or below the "market" median.
Payouts occur when the Company's TSR is in the top two-thirds of the PSP
Peer Group, and vary based on SCANA's ranking against the peer group. Executives
earn threshold payouts of 0.4 times target at the 33rd percentile of three-year
performance. Target payouts will be made at the 50th percentile of three-year
performance. Maximum payouts will be made at 1.5 times target when SCANA's TSR
is at or above the 75th percentile of the peer group. No payouts will be earned
if performance is at less than the 33rd percentile. Awards are denominated in
shares of SCANA Common Stock and may be paid in stock or cash or a combination
of stock and cash.
For the three-year period from 1995 through 1997, SCANA's TSR was at the
46th percentile of the PSP Peer Group. This resulted in payouts at 85% of target
shares awarded to be paid in a combination of stock and cash. The Board of
Directors approved these payouts.
CONCLUSION
The combination of base salary, the Annual Incentive Plans and the
Performance Share Plan provides an opportunity to bring an officer's
compensation in total to the median market level. These three elements of
executive compensation are intended to provide increased motivation for
executives to contribute to the Company's overall future success, thus enhancing
the value of the Company for the shareholders' benefit, as well as to attract
and retain highly qualified executives.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Section 162(m) of the Internal Revenue Code ("Section 162(m)") establishes a
limit on the deductibility of annual compensation for certain executive officers
that exceeds $1,000,000. It is the general intention of the Company to meet the
requirements for deductibility under Section 162(m); however, the Company
reserves the right,
17
<PAGE>
where merited by changing business conditions or an executive's individual
performance, to authorize compensation payments which may not be fully
deductible by the Company. The Board of Directors will continue to re-examine
this policy on an ongoing basis.
COMPENSATION OF CHIEF EXECUTIVE OFFICER IN 1997
In 1997, the compensation of the Company's Chief Executive Officer, Mr.
Timmerman, consisted of the following:
-
Base salary of $425,006 which was derived by reference to executive pay
for the "market" group described above. This amount approximates the
median base salary for the market. Mr. Timmerman's salary increase of
$65,369 from 1996 to 1997 was based on his increased responsibilities as
he became Chairman and Chief Executive Officer on March 1, 1997, external
pay practices and the Performance Committee's subjective assessment of his
overall performance during the preceding year. Because this determination
was subjective, no one factor was assigned a particular weighting by the
Performance Committee.
-
For the year 1997, Mr. Timmerman's Annual Incentive Plan target award was
50% of the salary level for his position. Mr. Timmerman's 1997 award was
based on three factors: SCANA's EPS, achievement of strategic plan
objectives and the Performance Committee's subjective assessment of his
individual performance. Performance in these factors resulted in Mr.
Timmerman's receiving a payout of 130% of target.
-
In 1997, Mr. Timmerman's Performance Share Plan target award for the
period 1997 through 1999 was set at 60% of the salary level for his
position. This resulted in a target award of 11,030 performance shares.
The amount of the target award was determined by the Long-Term
Compensation Committee based on Mr. Timmerman's salary and level of
responsibility and competitive practices. As discussed above, SCANA's TSR
results relative to the PSP Peer Group for the 1995-1997 performance
period were at the 46th percentile ranking, resulting in an award payout
of 2,740 shares, 85% of target (3,220 performance shares granted to him in
1995, as adjusted for the May 1995 two for one stock split). The award was
approved by the Board of Directors and paid in shares of Common Stock
except to the extent of withholdings.
<TABLE>
<CAPTION>
THE MANAGEMENT DEVELOPMENT AND THE LONG-TERM
CORPORATE PERFORMANCE COMMITTEE COMPENSATION COMMITTEE BOARD OF DIRECTORS
<S> <C> <C>
H. M. Chapman, Chairman H. M. Chapman, Chairman H. M. Chapman
B. L. Amick B. L. Amick B. L. Amick
W. B. Bookhart, Jr. J. A. Bennett J. A. Bennett
W. T. Cassels, Jr. W. B. Bookhart, Jr. W. B. Bookhart,
Jr.
J. B. Rhodes W. T. Cassels, Jr. W. T. Cassels, Jr.
M. K. Sloan E. T. Freeman E. T. Freeman
*W. B. Timmerman L. M. Gressette, Jr. L. M. Gressette,
Jr.
F. C. McMaster W. Hayne Hipp
L. M. Miller F. C. McMaster
J. B. Rhodes L. M. Miller
M. K. Sloan J. B. Rhodes
M. K. Sloan
W. B. Timmerman
</TABLE>
* As noted on page 10, Mr. Timmerman is a non-voting member of the
Performance Committee and he did not participate in any of its decisions
concerning executive compensation.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate by reference future
filings, including this Proxy Statement, in whole or in part, the foregoing
report and the Performance Graph on page 20 shall not be incorporated by
reference into any such filings.
18
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE GRAPH
- --------------------------------------------------------------------------------
The following line graph compares the cumulative total shareholder return of
the Company assuming reinvestment of dividends with that of the PSP Peer Group,
the S&P Utilities and the S&P 500. The PSP Peer Group was chosen for comparison
since the Company's TSR is measured against this group to determine awards which
are paid under the Performance Share Plan. This group consists of 92 utilities
which are either electric, gas or a combination of both. The Peer Group was
adjusted from last year to reflect the following name changes: Duke Power
Company is now Duke Energy Company, Oklahoma Gas & Electric is now OGE Energy
Corporation, Pacific Gas & Electric is now PG&E Corporation and Puget Sound
Power & Light is now Puget Sound Energy, Inc. In addition, Portland General
Corporation merged with Enron Corporation to form Enron Oregon Corporation and
is no longer included in the group and Southwestern Public Service Company
merged into Public Service Company of Colorado to form New Century Energies,
Inc. The PSP Peer Group index was prepared by Hewitt Associates, a compensation
and benefits consulting company, and was approved by the Performance Committee.
The index consists of the following companies:
Allegheny Power System, Inc.
American Electric Power Co., Inc.
Atlantic Energy, Inc.
Baltimore Gas & Electric Co.
Bangor Hydro-Electric Co.
Black Hills Corporation
Boston Edison Co.
Carolina Power & Light Company
Central Hudson Gas & Electric Corp.
Central Louisiana Electric Co., Inc.
Central Maine Power Co.
Central Vermont Public Service Corp.
Central & South West Corporation
Cilcorp, Inc.
CINergy Corp.
CIPSCO, Inc.
Citizens Utilities
CMS Energy Corp.
Commonwealth Energy System
Consolidated Edison Co. of NY, Inc.
Delmarva Power & Light Co.
Dominion Resources, Inc.
DPL, Inc.
DQE, Inc.
DTE Energy Co.
Duke Energy Company
Eastern Utilities Associates
Edison International
El Paso Electric Co.
Empire District Electric Co.
Enova Corp.
Entergy Corp.
First Energy Corp.
Florida Progress Corporation
FPL Group, Inc.
General Public Utilities, Inc.
Green Mountain Power Corp.
Hawaiian Electric Industries, Inc.
Houston Industries, Inc.
Idaho Power Co.
IES Industries, Inc.
Illinova Corp.
Interstate Power Co.
IPALCO Enterprises, Inc.
Kansas City Power & Light Co.
KU Energy Corporation
LG&E Energy Corporation
Long Island Lighting Company
Madison Gas & Electric Company
MidAmerican Energy Holdings
Minnesota Power & Light Company
Montana Power Co.
Nevada Power Co.
New Century Energies, Inc.
New England Electric System
New York State Electric & Gas Corp.
Niagara Mohawk Power Corp.
NIPSCO Industries, Inc.
Northeast Utilities
Northern States Power Co.
Northwestern Public Service Co.
OGE Energy Corporation
Orange & Rockland Utilities, Inc.
Otter Tail Power Co.
Pacificorp
PECO Energy Corp.
PG&E Corporation
Pinnacle West Capital Corp.
Potomac Electric Power Co.
PP&L Resources, Inc.
Public Service Co. of New Mexico
Public Service Enterprise Group, Inc.
Puget Sound Energy, Inc.
Rochester Gas & Electric Co.
Sierra Pacific Resources
SIGCORP, Inc.
Southern Company
TECO Energy, Inc.
Texas Utilities Co.
TNP Enterprises, Inc.
Tucson Electric Power Co.
Unicom Corp.
Union Electric Co.
United Illuminating Co.
UNITIL Corp.
Utilicorp United, Inc.
Washington Water Power Co.
Western Resources, Inc.
Wisconsin Energy Corp.
WPL Holdings, Inc.
WPS Resources Corp.
19
<PAGE>
- --------------------------------------------------------------------------------
SCANA CORPORATION
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
SCANA CORPORATION, PERFORMANCE SHARE PLAN PEER GROUP,
S&P UTILITIES AND S&P 500
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SCANA S&P 500 UTILITIES S&P 500 PEER GROUP
<S> <C> <C> <C> <C>
1/1/93 $100 $100 $100 $100
1/1/94 $130 $114 $110 $111
1/1/95 $117 $105 $112 $98
1/1/96 $169 $149 $153 $128
1/1/97 $167 $154 $188 $129
1/1/98 $198 $192 $251 $164
</TABLE>
- ------------------------
Assumes $100 invested on January 1, 1993, in SCANA Corporation Common Stock, PSP
Peer Group and S&P Indexes.
*Total return assumes reinvestment of dividends.
20
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL 3 -- APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
Action is to be taken at the Annual Meeting with respect to the
recommendation of the Company's Board of Directors that Deloitte & Touche LLP be
appointed as independent public accountants to audit the books of the Company
for the year ending December 31, 1998. Deloitte & Touche LLP has been regularly
employed by the Company for many years to examine its books and accounts and for
other purposes, for which services their customary fees have been paid.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and will have an opportunity to make such statements as they may
desire. Such representatives are expected to be available to respond to
appropriate questions from shareholders.
The accompanying proxy, unless you specify otherwise thereon, will be voted
for the appointment of Deloitte & Touche LLP as independent public accountants.
The appointment of the accountants will be approved if a majority of the shares
represented at the meeting vote in favor of the appointment. Abstentions will be
counted in determining the presence of a quorum. Consequently, in determining
whether the appointment of the independent public accountants is approved, an
abstention will have the same effect as a negative vote.
- --------------------------------------------------------------------------------
PROPOSAL 4 -- APPROVAL OF THE AMENDED AND RESTATED PERFORMANCE SHARE PLAN
- --------------------------------------------------------------------------------
GENERAL
The Board of Directors is presenting for shareholder approval the SCANA
Corporation Performance Share Plan, as amended and restated effective January 1,
1998 (the "Amended Plan"). The Performance Share Plan now in effect (the
"Current Plan") was approved by the shareholders at the 1992 Annual Meeting and
subsequently amended by the Board of Directors on February 16, 1993 and December
18, 1996.
The Board of Directors believes it is important to link executive
compensation with achievement of the Company's long-term goal of increasing
shareholder value. Both the Current Plan and the Amended Plan are designed to
accomplish this by rewarding executives based on the performance of the Common
Stock relative to a peer group of companies. The Board of Directors believes the
plans foster attitudes of entrepreneurship and ownership in the minds of its
executives. Payouts under both the Current Plan and the Amended Plan may be made
in cash or shares of Common Stock or a combination of cash and shares of Common
Stock.
The principal reasons for amending and restating the Current Plan are (i) to
provide generally greater flexibility in connection with the making of awards
under the plan and (ii) to enable the Company to make awards that will qualify
as "performance-based compensation" under Section 162(m) of the Code ("Section
162(m)") which limits the deductibility of non-performance based compensation
paid to the chief executive officer and the other four most highly compensated
executive officers of a public company to $1,000,000 in any fiscal year.
Although Section 162(m) had no impact on the Company in 1997 and is currently
expected to have no impact on the Company during 1998, it may impact the Company
in future years. Therefore, the Board of Directors thought it in the best
interests of the Company to take steps to amend the Current Plan to take into
consideration Section 162(m). Under the Amended Plan, the committee which
administers the plan will have the flexibility to make awards that either
qualify or do not qualify as "performance-based compensation."
Both the Amended Plan and the Current Plan provide executives with
compensation based on the Company's shareholder return performance over a
three-year period (a "Performance Period"). The Current Plan permits up to 10
Performance Periods to be established, one beginning on January 1 of each year
1990 through 1999. The Amended Plan permits up to five performance periods to be
established, one beginning on January 1 of each year 1998 through 2002.
The Current Plan is administered by the Long-Term Compensation Committee, a
committee made up of non-employee directors, each of whom qualified as a
"disinterested director" under former Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended. The Amended Plan will be
administered by a committee (the "Performance Share Plan Committee") made up of
individuals each of whom is a "non-employee director" within the meaning of
current Rule 16b-3 and an "outside director" within the meaning of Section
1.162-27(e)(3) of the Treasury Regulations promulgated with respect to Section
162(m).
21
<PAGE>
Eligibility to participate in the Current Plan is restricted to certain key
employees of the Company and its subsidiaries whose salary is within grades E-3
through E-11. Under the Amended Plan, participation would be open to officer
executives in salary grades E-1 through E-12 and non-officer executives with
equivalent salaries. Currently, 36 individuals qualify for participation in the
Current Plan and 64 would qualify for participation in the Amended Plan. Under
both plans, eligible employees other than the Chief Executive Officer must be
nominated for participation by the Chief Executive Officer and selected by the
committee which administers the plan (the "committee") which also may include
the Chief Executive Officer for participation. Under both plans, participation
is determined at the beginning of each Performance Period and no employee is
automatically entitled to be nominated by the Chief Executive Officer or
selected by the committee for participation.
Under both plans, employees selected for participation are granted target
dollar awards for each Performance Period. Under the Current Plan, the Long-Term
Compensation Subcommittee ("Subcommittee") of the Performance Committee
recommends to the Long-Term Compensation Committee the target dollar awards
schedule for each Performance Period expressed as a percentage of salary control
points for each respective pay grade, which the Long-Term Compensation Committee
accepts or changes at its discretion during the first five months of each new
Performance Period. The Subcommittee may recommend, and the Long-Term
Compensation Committee may at its discretion accept, a different target dollar
awards schedule for each Performance Period. Each target dollar award is then
converted into a number of target shares by dividing the amount of the target
dollar award by the closing price of the Common Stock on the last trading day of
the year preceding the year in which the Performance Period begins. Under the
Amended Plan, target dollar awards will be made by the Performance Share Plan
Committee and there is no mandatory date before which awards must be made except
that, with respect to awards intended to qualify as "performance-based
compensation" under Section 162(m), such awards must be made within 90 days
after the commencement of the Performance Period. Under both plans, at the end
of each Performance Period, dividends will be treated as having been paid on the
target shares earned as though actual shares had been outstanding throughout the
period.
Under both plans, the amount of the payout at the end of each Performance
Period will be determined by the degree to which the Company has performed
relative to a peer group of utilities over the Performance Period. Under the
Current Plan, the Long-Term Compensation Committee determines the composition
and number of utilities in the peer group during the first five months of each
new Performance Period; however, the peer group may be revised subsequently in
order to preserve consistency when circumstances warrant. Under the Amended
Plan, each member of the peer group must have annual revenues in excess of $100
million and the Performance Share Plan Committee may change the composition of
the peer group from Performance Period to Performance Period. In addition, the
Performance Share Plan Committee may add to or modify the peer group in order to
maintain a group that is objectively comparable to the Company. For the
Performance Period beginning on January 1, 1997, the peer group is comprised of
92 electric and gas utilities. Both plans provide that if the Company's
shareholder return performance equals or exceeds the shareholder return
performance of 75% of the utilities in the peer group, the payout will be
determined by multiplying target shares by 150%. If the Company's shareholder
return performance is equal to or exceeds that of 50% but less than 75% of the
utilities in the peer group, the payout will be determined by multiplying the
target shares by a percentage between 100% and 148% depending upon the actual
percentage of peer group companies whose shareholder return performance is
exceeded. If the Company's shareholder return performance equals or exceeds that
of 33% but less than 50% of the utilities in the peer group, the payout amount
will be determined by multiplying the target shares by a percentage between 40%
and 95% depending upon the actual percentage of peer group companies whose
shareholder return performance is exceeded. If the Company's shareholder return
performance does not equal that of at least 33% of the utilities in the peer
group, there will be no payout. Notwithstanding the foregoing, under both plans,
the committee may increase or decrease the payout percentage to be made for
particular levels of performance. Under the Current Plan, such changes must be
made before June 1 of the first calendar year of the Performance Period. Under
the Amended Plan, there is no particular date before which the payout
percentages must be set; however, if an award is to qualify as
"performance-based compensation," the payout percentages for the award must be
determined in the first 90 days of the Performance Period. Under both plans, the
committee has the discretion to review all amounts determined under the formula
applicable to the particular Performance Period and adjust the final payout
amount for participants to reflect such factors as significant acquisitions or
divestitures by the Company or peer group companies. Such adjustments, if they
were to result in an increased payout, would cause the award to fail to qualify
as "performance-based compensation."
Under both plans, payment of awards, including dividends deemed earned, may
be made in cash, shares of Common Stock or a combination of cash and shares of
Common Stock in the discretion of the committee and are
22
<PAGE>
made in the year following the year in which the Performance Period ends. The
Amended Plan clarifies how payout amounts are determined as follows: (i) if
dividends deemed earned are paid in shares of Common Stock, the number of shares
issued will be determined by dividing the dividends deemed earned by the closing
price of a share of Common Stock on the last trading day of the Performance
Period and (ii) if shares earned are paid in cash, the amount to be paid will be
determined by multiplying the number of shares earned by the closing price of a
share of Common Stock on the last trading day of the Performance Period. Under
both plans, the maximum number of shares of Common Stock which may be issued
under the plan is 921,544 except that in the event of an increase or decrease in
the number of shares of Common Stock outstanding resulting from a subdivision or
consolidation of shares or other increase or decrease in such shares without the
receipt of consideration by the Company, the number of target shares awarded and
the number of shares of Common Stock which may be issued under the plan shall be
adjusted accordingly. Except for distributions on a Change in Control, as
described in "Executive Compensation--Termination, Severance and Change in
Control Arrangements." The Amended Plan provides that the maximum annual award
distributed to any participant under the plan shall not exceed an amount having
a value equal to 25,000 shares of Common Stock on the date of distribution.
Under the Current Plan, in the event of the death, disability or retirement
of a participant prior to the end of a Performance Period, the participant or
his beneficiary, will be eligible for a pro rata portion of the target award
based on (i) the Company's shareholder return performance through the end of the
year in which such event occurs and (ii) the amount of time during the
Performance Period in which the participant was employed by the Company. Under
the Amended Plan, a participant will be eligible for a pro rata award upon
death, disability or retirement; however, the amount of the award will be based
on the Company's performance over the entire Performance Period. Under both
plans, if a participant terminates his employment with the Company prior to the
end of a Performance Period for any other reason, the individual's target award
will be canceled unless the committee in the exercise of its discretion
determines that a performance payout should be made to the participant under the
circumstances. In no event would the amount of such award exceed the amount to
which the participant would have been entitled in the event of his death,
disability or retirement. Under both plans, awards under all outstanding cycles
will become immediately payable in the event of a Change in Control of the
Company as to which the Key Employee Severance Benefit Plan is subject. The
amount of the payment would be equal to the dollar amount of the original target
award together with an amount sufficient so that the amount retained by the
participant after deduction of any excise tax and income tax shall be equal to
the original target award.
Both plans provide that neither the target shares nor the benefits under the
plan may be transferred or assigned by a plan participant or his beneficiary.
The Board of Directors has the power to amend or terminate both plans at any
time. However, no such amendment may increase the total number of shares of
Common Stock which may be issued under the plan or with respect to the Amended
Plan, the maximum amount of any annual distribution to a single participant
without the approval of the shareholders.
The following number of target shares have been awarded to the following
persons and groups for the 1997-1999 Performance Period under the Current Plan:
W. B. Timmerman--11,030; J. L. Skolds--5,560; A. H. Gibbes--4,300; C. B.
Novinger--3,010; K. B. Marsh--3,010; L. M. Gressette, Jr.--282; all current
executive officers as a group (6 individuals)--29,340; and all other
participants as a group (31 individuals)--49,820 shares.
The foregoing is a summary of the material terms of the Current Plan and the
Amended Plan and is qualified in its entirety by reference to the plans
themselves, copies of which may be obtained by writing to the Corporate
Secretary, SCANA Corporation, 1426 Main Street, Columbia, South Carolina 29201.
TAX CONSIDERATIONS
The following discussion of the federal income tax consequences of the plans
is based on the Internal Revenue Code including the regulations promulgated
thereunder, and the judicial and administrative interpretations thereof as they
exist on the date hereof. There can be no assurance that the legal authorities
upon which this discussion is based will not be modified, revoked, supplemented,
amended, revised, reversed or overruled. Any change in such legal authorities
could alter the analysis set forth below. The federal income tax discussion
below is intended for general information only. No information is provided
regarding any state, local or foreign tax consequences of the plans.
With respect to a target dollar award or a target share, a participant does
not recognize income for federal income tax purposes at the time a target dollar
award or target share is granted. After the completion of a Performance Period
(or after a Change in Control), the Company will make payments for award values
(earned shares plus related dividends) in (1) cash, (2) shares of Common Stock
or (3) in a combination of cash and shares of Common Stock. The participant will
recognize ordinary income in
23
<PAGE>
the year of the payment equal to the amount of cash received and/or the value of
Common Stock received (as of the payment date).
Generally, in the year in which a participant recognizes the payment as
ordinary income, the Company is entitled to an income tax deduction (subject to
the provisions of Section 162(m) discussed below) in the amount of income
recognized by the participant. The Company and the participant will be subject
to applicable withholding and employment taxes with respect to amounts
recognized.
Under Section 162(m), the amount of compensation paid to the chief executive
officer and the other four most highly paid executive officers of the Company in
the year for which the deduction is claimed by the Company (including its
subsidiaries) is limited to $1,000,000 per person, except that compensation
which is performance-based will be excluded for purposes of calculating the
amount of compensation subject to this $1,000,000 limitation. The ability of the
Company to claim a deduction for compensation paid to any other executive
officer or employee of the Company is not affected by this provision. The
Amended Plan provides that the Performance Share Plan Committee may award grants
which either qualify as performance-based compensation or which do not qualify
as performance-based compensation. Awards under the Current Plan and awards
under the Amended Plan which do not qualify as performance-based compensation,
will be subject to the limitations on deductibility contained in Section 162(m).
Upon the sale or exchange of Common Stock acquired pursuant to the payment
of awards under the plans, a participant will recognize a capital gain or loss
equal to the difference between the amount received for the sale or exchange of
the Common Stock and the participant's basis in the Common Stock (generally the
amount of ordinary income recognized by the participant upon receipt of the
Common Stock). Generally, the applicable tax rate on such gain or loss will
depend on the date of acquisition and the holding period with respect to the
stock subject to the disposition and the tax rate applicable to other taxable
income of the participant in the year of the disposition of the Common Stock.
RECOMMENDATION OF THE BOARD
The Board of Directors recommends a vote FOR approval of the Amended Plan
and the accompanying proxy will be so voted unless you specify to the contrary
thereon. The Amended Plan will be approved if the holders of a majority of the
shares present, or represented, and entitled to vote at the 1998 Annual Meeting
of Shareholders approve the plan. If the Amended Plan is approved, it will be
effective for all target awards made after January 1, 1998 (none have been made
as of the date hereof) and the Current Plan will remain in effect for all target
awards made prior to January 1, 1998 except that all payouts of shares of Common
Stock under the plan to participants subject to the reporting requirements of
Section 16 of the Securities Exchange Act of 1934, as amended, will be subject
to the terms of the Amended Plan. If the Amended Plan is not approved, the
Current Plan will continue in effect.
24
<PAGE>
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial and periodic reports of ownership
with the Securities and Exchange Commission and the New York Stock Exchange.
Executive officers, directors and greater than 10% beneficial owners are
required by Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms and amendments they file.
Based solely on a review of the copies of such forms and amendments
furnished to the Company and written representations from the executive officers
and directors, the Company believes that during 1997 all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
10% beneficial owners were satisfied, except that one report covering one
transaction was filed late by Cathy B. Novinger.
SHAREHOLDER PROPOSALS
In order to be presented at the Company's 1999 Annual Meeting of
Shareholders, a shareholder proposal must be received at the principal office of
the Company, 1426 Main Street, Columbia, South Carolina 29201, by Tuesday,
November 17, 1998.
EXPENSES OF SOLICITATION
The cost of soliciting proxies relating to the Annual Meeting will be borne
by the Company. Directors, officers and employees of the Company may solicit
proxies from the larger shareholders, which solicitation may be made by
telephone, telegram or personal interview. In addition, upon the request of
brokers, dealers, banks and voting trustees and their nominees, who are holders
of record of shares of Common Stock on the Record Date, the Company will pay
their reasonable expenses for completing the mailing of copies of this Notice of
Meeting and Proxy Statement and of the enclosed form of Proxy to the beneficial
owners of such shares of Common Stock. The Company has retained Beacon Hill, 90
Broad Street, New York, NY 10004 , to assist in the solicitation of proxies from
brokers, dealers, banks and voting trustees and their nominees, at a fee of
$5,500, plus reasonable out-of-pocket expenses.
SCANA CORPORATION
/s/ Lynn M. Williams
Lynn M. Williams
Secretary
MARCH 17, 1998
25
<PAGE>
[LOGO]
<PAGE>
FORM OF PROXY
SCANA CORPORATION
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints W. B. Timmerman and K. B. Marsh, or
either of them, as proxies with full power of substitution, to vote all
shares of Common Stock standing in the undersigned's name on the books of the
Company, at the Annual Meeting of Shareholders on April 23, 1998, and at any
adjournment thereof, as instructed on the reverse hereof and in their
discretion upon all other matters which may properly be presented for
consideration at said meeting.
1. To elect the nominees listed on the reverse as Class I Directors for the
term specified.
2. To elect the nominees listed on the reverse as Class II Directors for the
term specified.
3. To approve the appointment of Deloitte & Touche LLP as independent
accountants for the Company.
4. To approve the Amended and Restated SCANA Performance Share Plan.
<PAGE>
PLEASE MARK VOTES /X/
Voting Instructions for Proposals 1 and 2
To vote for all nominees, mark the "For" box. To withhold voting for all
nominees, mark the "Withhold" box. To withhold voting for a particular
nominee, mark the "For All Except" box and enter the names(s) of the
exception(s) in the space provided; your shares will be voted for the
remaining nominees.
THE DIRECTORS RECOMMEND A VOTE "FOR" THE ELECTION OF ALL NOMINEES AS
DIRECTORS AND "FOR" PROPOSALS 3 AND 4.
<TABLE>
<S> <C> <C> <C>
1. Election of All Class I Nominees Listed Below--Term Expires 2000 For Withhold For All Except *
James A. Bennett, Maceo K. Sloan, * Exceptions: / / / / / /
2. Election of All Class II Nominees Listed Below--Term Expires 2001 For Withhold For All Except *
William B. Bookhart, Jr., Elaine T. Freeman, W. Hayne Hipp, / / / / / /
F. Creighton McMaster, John B. Rhodes
* Exceptions:
For Against Abstain
3. Approval of Appointment of Independent Accountants / / / / / /
4. Approval of the Amended and Restated SCANA Corporation For Against Abstain
Performance Share Plan / / / / / /
</TABLE>
Please sign, date and mail this card promptly in the postage prepaid return
envelope provided. If stock is held in the name of joint holders, each should
sign. If signing as a trustee, executor, etc., please so indicate.
Date ___________________________________, 1998
Sign here X __________________________________
exactly as name(s) appears on this card.
X __________________________________
IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL NOMINEES AS DIRECTORS AND "FOR" PROPOSALS 3
AND 4 ABOVE.
<PAGE>
SCANA CORPORATION
PERFORMANCE SHARE PLAN
(As Amended and Restated
Effective January 1, 1998)
<PAGE>
SCANA CORPORATION
PERFORMANCE SHARE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1. PURPOSE AND EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date of the Plan . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Gender and Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. ELIGIBILITY AND PARTICIPATION. . . . . . . . . . . . . . . . . . . . . 5
3.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 4. HOW THE PLAN WORKS . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Performance Periods and Cycles . . . . . . . . . . . . . . . . . . . . . 6
4.3 Target Awards and Target Shares. . . . . . . . . . . . . . . . . . . . . 6
4.4 Performance Criteria and Measurement . . . . . . . . . . . . . . . . . . 6
4.5 New Performance Award Periods. . . . . . . . . . . . . . . . . . . . . . 7
SECTION 5. AWARD DETERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Preliminary Determination. . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Final Determination. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. FORM AND TIMING OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Form and Timing of Payment . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Committee Certification. . . . . . . . . . . . . . . . . . . . . . . . . 10
6.3 Performance Award Tax Consequences . . . . . . . . . . . . . . . . . . . 10
6.4 Number of Corporation's Shares that may be Distributed . . . . . . . . . 10
6.5 Recapitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7. TERMINATION OF EMPLOYMENT. . . . . . . . . . . . . . . . . . . . . . . 12
7.1 General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Termination of Employment for Reasons Other Than Death, Disability or
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 8. BENEFICIARY DESIGNATION. . . . . . . . . . . . . . . . . . . . . . . . 13
8.1 Designation of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . 13
8.2 Death of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.3 Ineffective Designation. . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9. CHANGE IN CONTROL DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . 15
9.1 Accelerated Distributions Upon Change in Control . . . . . . . . . . . . 15
9.2 Tax Computation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.3 No Subsequent Recalculation of Tax Liability . . . . . . . . . . . . . . 15
SECTION 10. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.1 Employment/Participation Rights. . . . . . . . . . . . . . . . . . . . . 16
10.2 Nonalienation of Benefits. . . . . . . . . . . . . . . . . . . . . . . . 16
10.3 Transferability Restriction as to Target Shares. . . . . . . . . . . . . 16
10.4 Regarding the Securities Act of 1933 . . . . . . . . . . . . . . . . . . 16
10.5 Regarding Section 16 of the Securities Exchange Act of 1934. . . . . . . 17
10.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.7 No Individual Liability. . . . . . . . . . . . . . . . . . . . . . . . . 17
10.8 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11. PLAN ADMINISTRATION, AMENDMENT AND TERMINATION. . . . . . . . . . . . 18
11.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.2 Claims Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.3 Finality of Determination. . . . . . . . . . . . . . . . . . . . . . . . 18
11.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.5 Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.6 Incompetency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.7 Action by Corporation. . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.8 Notice of Address. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.9 Amendment and Termination. . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
ii
<PAGE>
SCANA CORPORATION
PERFORMANCE SHARE PLAN
(As Amended and Restated Effective January 1, 1998)
SECTION 1. PURPOSE AND EFFECTIVE DATE
1.1 Purpose of the Plan. The SCANA Corporation Performance Share Plan ("Plan")
is a long-term executive compensation incentive plan having as its purpose
the rewarding of superior performance with a variable component of pay.
The Plan provides as an element of executive compensation an award amount
tied directly to corporate performance over three years. The Plan is
intended to balance the short-term emphasis of the annual cash incentive
portion of the Executive Incentive Plan with a longer-term perspective and
to reinforce strategic goals by linking them to compensation.
The Plan is an incentive program within the context of Department of Labor
Regulation Section 2510.3-2(c), and as such is not an "employee pension
benefit plan" or "pension plan" for purposes of the Employee Retirement
Income Security Act of 1974, as amended, as the payouts hereunder are not
systematically deferred to the termination of covered employment or beyond
or to provide retirement income to executive employees.
Under Section 162(m) of the Internal Revenue Code of 1986, as amended and
the treasury regulations promulgated thereunder, the $1 million deduction
limitation on compensation paid to covered employees by a publicly held
corporation does not apply to qualified performance-based compensation.
Under the Plan, the Committee (as hereinafter defined) may award qualified
performance-based compensation (within the meaning of Treas. Reg. Section
1.162-27(e)) or the Committee may grant awards that do not qualify as
qualified performance-based compensation.
1.2 Effective Date of the Plan. The effective date of the Plan is January 1,
1990, as adopted by the Board of Directors of SCANA Corporation ("Board")
on April 25, 1990. The Plan was amended and restated by the Board on
February 18, 1992, effective as of January 1, 1992; the Target Awards for
the 1992 Cycle were made subject to the approval by SCANA Corporation
shareholders of the Plan which was received on April 22, 1992. The Plan
was amended on February 16, 1993 and December 18, 1996 and subject to
receiving shareholder approval at the 1998 annual meeting was amended and
restated in its entirety on February 17, 1998, to be effective for Target
Awards granted after January 1, 1998. Target Awards granted prior to
January 1, 1998 shall be governed by the terms of the Plan in effect prior
to this amendment and restatement; except that any issuances of the common
stock of the Corporation (as hereinafter defined) shall be subject to
Section 10.5.
iii
<PAGE>
SECTION 2. DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall have the
meanings set forth below, unless otherwise expressly provided herein or
unless a different meaning is plainly required by the context, and when
the defined meaning is intended, the term is capitalized:
(a) "Beneficial Owner" shall have the meaning ascribed to such term in
Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(b) "Beneficiary" means any person or entity who, upon a Participant's
death, is entitled to receive the Participant's benefits under the Plan in
accordance with Section 8 hereof.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Change in Control" means a change in control of the Corporation of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether
or not the Corporation is then subject to such reporting requirements;
provided that, without limitation, such a Change in Control shall be deemed
to have occurred if:
(1) Any Person (as defined in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof, including a "group" as such
term is used in Section 13(d)) is or becomes the Beneficial Owner,
directly or indirectly, of 25% or more of the combined voting power of
the outstanding shares of capital stock of the Corporation;
(2) During any period of two consecutive years (not including any
period prior to December 18, 1996) there shall cease to be a majority
of the Board comprised as follows: individuals who at the beginning of
such period constitute the Board and any new director(s) whose
election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved;
(3) The Securities and Exchange Commission (SEC) issues an order
under Section 9(a)(2) of the Public Utility Holding Act of 1935 (the
"1935 Act"), authorizing a third party to acquire 5% or more of the
Corporation's voting shares of capital stock;
(4) The shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other
than a merger or consolidation which would result in the voting shares
of capital stock of the Corporation outstanding immediately prior
thereto continuing to represent
2
<PAGE>
(either by remaining outstanding or by being converted into voting
shares of capital stock of the surviving entity) at least 80% of the
combined voting power of the voting shares of capital stock of the
Corporation or such surviving entity outstanding immediately after
such merger or consolidation; or the shareholders of the Corporation
approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation's assets; or
(5) The shareholders of the Corporation approve a plan of complete
liquidation, or sale or disposition of, South Carolina Electric & Gas
Company ("SCE&G"), South Carolina Pipeline Corporation or any
subsidiary of the Corporation designated by the Board as a "Material
Subsidiary," but such event shall represent a Change in Control only
with respect to a Participant who has been assigned exclusively to
SCE&G, South Carolina Pipeline Corporation or the affected Material
Subsidiary.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
(f) "Committee" means the committee established pursuant to Section 11.1
to administer the Plan.
(g) "Corporation" means SCANA Corporation, a South Carolina corporation,
or any successor thereto.
(h) "Covered Participant" means a Participant who is a "covered employee"
within the meaning of Section 1.162-27(c)(2) of the Treasury Regulations
promulgated with respect to Section 162 of the Code.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(j) "Participant" means an individual satisfying the eligibility
requirements of Section 3.
(k) "Plan" means this Amended and Restated Performance Share Plan.
(l) Year" means the calendar year.
2.2 Gender and Number. Except when otherwise indicated by the context, any
masculine terminology used herein also shall include the feminine and the
feminine shall include the masculine, and the use of any term herein in the
singular may also include the plural and the plural shall include the
singular.
3
<PAGE>
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Eligibility in the Plan is restricted to (a) those executives
of the Corporation and of subsidiaries of the Corporation who the Chief
Executive Officer of the Corporation ("CEO") nominates for participation,
and (b) the CEO. The underlying criteria for nomination is an executive
within salary grades E-1 through E-12 (or, in the case of a nonofficer
executive, a salary that is equivalent to the above enumerated grades), and
determination in the discretion of the CEO that the selected executive
serves in a role that is directly or indirectly (as per employment with a
Corporation subsidiary) key to the Corporation's success.
3.2 Participation. Participation in the Plan is restricted to (a) those
executives of the Corporation and of the subsidiaries of the Corporation
who are eligible to participate in the Plan pursuant to Section 3.1 of the
Plan, and (b) who are determined, in the discretion of the Committee, to
serve in a role that is directly or indirectly (as per employment with a
Corporation subsidiary) key to the Corporation's success. Participation
will be reevaluated and determined at the beginning of each Performance
Period. No executive shall have the right to be nominated by the CEO or
selected by the Committee for participation in the Plan. To the extent
that the Committee intends for an award to qualify as qualified
performance-based compensation, the Committee will need to make the
participation determination with respect to a Covered Participant not later
than 90 days after the commencement of the Performance Period (as defined
in Section 4.2).
4
<PAGE>
SECTION 4. HOW THE PLAN WORKS
4.1 Overview. The objective of the Plan is to measure the Corporation's Total
Shareholder Return (as defined in Section 4.4) over each Performance Period
relative to a peer group of utilities, and, based upon the performance
achieved, make a payout ranging from 0% to 150% of a target award ("Target
Award") expressed as a number of shares of the Corporation's common stock
("Target Shares") assigned to each Participant in accordance with the
Participant's control point (E-1 through E-12 classification or, in the
case of a nonofficer executive, the control point determined by the
Committee), the higher the pay grade the greater the number of Target
Shares.
4.2 Performance Periods and Cycles. Each performance period (a "Performance
Period") shall be a period of three consecutive calendar years, and shall
be designated as a cycle (a "Cycle"). Each calendar year shall begin a new
cycle, as demonstrated by the following:
<TABLE>
<CAPTION>
1998 1999 2000 2001 2002 2003
<S> <C> <C> <C> <C> <C> <C>
1998 Cycle: A A A
1999 Cycle: B B B
2000 Cycle: C C C
2001 Cycle: D D D
</TABLE>
4.3 Target Awards and Target Shares. Target Awards in dollars for each Cycle
are designated for each Participant as a function of a designated
percentage of the Participant's control point for his pay grade. The
Target Award in dollars for each Participant is then converted to a Target
Share designation by dividing the Target Award amount by the closing price
per share of the Corporation's common stock on December 31 (or last trading
date) of the calendar year immediately preceding the first calendar year of
the Cycle. To the extent that the Committee intends for an award to
qualify as qualified performance-based compensation, the Committee must
determine the Target Awards with respect to a Covered Participant not later
than 90 days after the commencement of the Performance Period (as defined
in Section 4.2).
4.4 Performance Criteria and Measurement. The Corporation's Total Shareholder
Return is measured over the three calendar years of each Cycle in
comparison to a peer group of electric and gas utilities each having annual
revenue in excess of $100 million. The Committee may change for each Cycle
the number of and/or individual composite companies of the peer group.
Subsequently within a Cycle and subject to the limitations contained in
Section 5.2, in response to circumstances affecting certain individual
companies of the peer group (e.g., merger), the Committee may find it
necessary to add to or otherwise modify the listing of companies comprising
the peer group. The purpose of any such change is to establish and
maintain a peer group that is objectively comparable to the Corporation to
promote consistency within and between Cycles as an underlying premise for
the integrity of performance evaluation. It is within this context, as an
additional corrective measure, that per Section 5.2 the
5
<PAGE>
Committee may adjust the payout amounts otherwise indicated per Section
5.1.
Total shareholder return ("Total Shareholder Return") for each Cycle is
calculated after the end of the third calendar year of the Cycle using the
following formula:
(A) Closing Stock Price at December 31st (or last trading date) of
the third calendar year of Cycle ("Ending Stock Price") less:
(B) Closing Stock Price at December 31st (or last trading date) of
the calendar year immediately preceding the first calendar year
of the Cycle ("Beginning Stock Price") plus:
(C) The sum of all cash dividends paid per share during the Cycle
equals:
(D) Net Number
Divide (D) by (B) to yield Total Shareholder Return
The result for the Corporation is then compared to the individual results
of the companies comprising the peer group to determine the award in
accordance with Section 5.
Calculations will be adjusted by the Committee as appropriate for
transactions described in Section 1.162-27(e)(2)(iii)(C) of the Treasury
Regulations (e.g. stock split, dividend, merger, etc.)
The computation of Total Shareholder Return also will be made for the
Corporation and each of the companies of the peer group after the close of
each of the first and second calendar years within each Cycle, with the
data for items (A) and (C) of the above formula. The annual computation
will render an on-going indication of the Corporation's comparative
economic performance to the peer group for the subject Cycle.
4.5 New Performance Award Periods. Subject to Section 11.9, new performance
award periods may be initiated under the Plan for five years from the
effective date of this amendment and restatement.
6
<PAGE>
SECTION 5. AWARD DETERMINATION
5.1 Preliminary Determination. The performance achieved during each three-year
Cycle will preliminarily indicate a payout as a percent of Target Shares
awarded as follows:
<TABLE>
<CAPTION>
As Compared Payout As A %
Performance To Peer of Target
Achieved Group Companies Awarded
------------------- ------------------- --------------------
<S> <C> <C>
Outstanding at or above 75 150% only (the
percentile maximum)
Target at or above 50 100% to 148%
percentile but less
than 75 percentile
Threshold at or above 33 40% to 95%
percentile but less
than 50 percentile
Below Threshold below 33 0%
percentile
</TABLE>
The Threshold and Target performance categories, unlike the other two
performance categories, renders payout on a sliding scale depending upon
where the Corporation's performance ranking lies in comparison to the
performance ranking of the individual companies comprising the peer group.
Addendum A, Total Shareholder Return Award Calculations, sets forth the
detailed table of payouts for the respective range of performance ranking
percentages. Performance Achieved is categorized per Addendum A in whole
percentages only, requiring the rounding of computational results to the
nearest whole number, with .5 results rounded up if the resulting whole
number would be an even number or rounded down if the resulting whole
number would be an odd number.
Notwithstanding the foregoing, the Committee may redefine for any Cycle the
above category levels of performance as well as the respective payout
percentages of Target Shares awarded. To the extent that the Committee
intends for an award to qualify as qualified performance-based
compensation, the Committee will need to redefine the performance levels
and payout percentages for a Covered Participant not later than 90 days
after the commencement of the applicable Performance Period.
5.2 Final Determination. The Committee will review the award amounts
determined based on the performance achieved and, at its discretion, adjust
the final payout amounts for all Participants in accordance with the
purposes expressed in Section 4.4.
In making adjustments, the Committee may consider factors such as, but not
limited to,
7
<PAGE>
the following:
(a) Significant acquisitions (or divestitures) within the Corporation's
affiliated group;
(b) Significant acquisitions or divestitures among peer group companies;
and
(c) Other unusual items of material consequence.
If the Committee's exercise of discretion pursuant to Section 4.4 or 5.2
results in an increase in the amount of compensation to be payable under the
Plan, the Committee's modifications made pursuant to Section 4.4 or 5.2 may
cause the performance awards for Covered Participants to fail to qualify as
qualified performance-based compensation. Except for distributions pursuant
to Section 9, the maximum annual award distributed to any employee under this
Plan (including amounts awarded pursuant to Section 5.3) shall not exceed an
amount having a value equal to the value of 25,000 shares of common stock of
the Corporation as of the date of distribution.
5.3 Dividends. After the end of a Cycle, dividends will be paid on the award
shares earned, 40% to 150% of Target Shares earned (the "Earned Shares"),
as if the Earned Shares had been outstanding during the entire Cycle as
provided in Section 6.1. The amount of such dividends payable will be
computed by multiplying the number of Earned Shares by the sum of all cash
dividends paid per share during the Cycle as noted in Section 4.4(C) above.
8
<PAGE>
SECTION 6. FORM AND TIMING OF PAYMENT
6.1 Form and Timing of Payment. Except as provided in Section 9, the award
values (Earned Shares plus related dividends) may be paid in shares of the
Corporation's common stock or in cash, or in any combination thereof.
Unless otherwise deferred in accordance with the terms of the Corporation's
Voluntary Deferral Plan, awards will be paid out as soon as possible after
the end of each Cycle except as provided in Section 9. If award dividends
are paid in stock, the number of shares to be issued will be determined by
dividing the amount of the award dividends earned by the closing stock
price at December 31st (or last trading date) of the third calendar year of
the Cycle. If Earned Shares are paid in cash, the amount to be paid shall
be determined by multiplying the number of Earned Shares by the closing
stock price at December 31st (or last trading date) of the third calendar
year of the Cycle.
6.2 Committee Certification. Prior to the payment of any performance awards to
a Covered Participant, the Committee shall certify in writing the
computation of the Covered Participant's performance awards (including the
extent that performance goals were in fact satisfied). For purposes of
satisfying the requirements of this section, approved minutes of the
Committee meeting in which the computation is made or reviewed will be
deemed to constitute written certification.
6.3 Performance Award Tax Consequences. The Committee shall administer and
construe the Plan in a manner so that no tax liability is incurred by the
participating executive until the performance awards are actually paid.
6.4 Number of Corporation's Shares that may be Distributed. The total number
of shares of the Corporation's common stock that may be distributed under
this Plan originally set at 500,000 shares, and having an undistributed
balance of 460,772 shares immediately prior to the 2-for-1 split of the
Corporation's common stock approved by the Board effective at the close of
business on May 11, 1995, per Resolution dated April 27, 1995, was on May
11, 1995 adjusted to an undistributed balance of 921,544 shares in
accordance with the recapitalization provision of the Plan (see Section
6.5), and as of the effective date of this Amended and Restated Plan
document, the undistributed balance is 849,712 shares. The shares to be
issued under this Plan may be either original issue shares or shares
purchased by the Plan in the open market.
With respect to any applicable Cycle under this Plan, if the maximum number
of shares of the Corporation's common stock which could be distributed as
to both Earned Shares and the related dividend awards thereon are not in
fact paid out after the end of the Cycle, then the number of shares of such
common stock not distributed shall be available for payouts under this Plan
with respect to subsequent Cycles.
6.5 Recapitalization. In the event of any increase or decrease in the total
number of shares of the Corporation's common stock resulting from a
subdivision or consolidation of shares or other capital adjustment or the
payment of a stock dividend or other increase or decrease in such shares
effected without receipt of consideration by the Corporation,
9
<PAGE>
the maximum number of shares of such common stock which may be
distributed under the Plan, the number of Target Shares awarded under
the Plan and the number of shares of the Corporation's common stock
covered by each outstanding Target Share award shall be adjusted
accordingly. Any such shares shall be subject to the same Plan
provisions as the shares originally covered under the award.
10
<PAGE>
SECTION 7. TERMINATION OF EMPLOYMENT
7.1 General Rule. If death, disability or early or normal retirement, as
defined in the SCANA Corporation Retirement Plan, occurs prior to the end
of one or more Cycles in which an executive was a Participant, the
Participant's performance award for each such Cycle will be paid as soon as
possible after the end of each cycle except as provided in Section 9. Any
award under this Section will be calculated as follows for each Cycle in
which the executive was a Participant:
(Target Shares) x (Payout % determined under Section 5.1 based
upon performance results determined under Section 4) x (the
fraction, the numerator of which is the number of months of
continuous employment completed of the Cycle, counting the month
of death, disability or retirement as though a full month of
employment, and the denominator of which is 36).
Added to this amount will be an award for dividends attributable to the
Earned Shares in accordance with Section 5.3 above, but for each incomplete
Cycle applicable only for the months of continuous employment completed,
counting the month of death, disability or retirement as though a full
month employment.
7.2 Termination of Employment for Reasons Other Than Death, Disability or
Retirement. If a Participant's employment is terminated for reasons other
than death, disability or normal or early retirement before the end of one
or more Cycles in which the executive is a Participant, the individual's
performance awards will be canceled and his tentative rights thereto
forfeited unless the Committee in the exercise of its discretion determines
that a performance payout should be made to the Participant under the
circumstances of the termination. In this latter event, the payout shall
be in whatever amount the Board determines, not to exceed, however, the
amount that would be calculated if Section 7.1 was applicable as to each
Cycle in which the executive was a Participant. Subject to Section 9, any
such payout will be made in accordance with the provisions of Section 7.1.
11
<PAGE>
SECTION 8. BENEFICIARY DESIGNATION
8.1 Designation of Beneficiary.
(a) A Participant shall designate a Beneficiary or Beneficiaries who, upon
the Participant's death, are to receive the amounts that otherwise
would have been paid to the Participant. All designations must be in
writing and signed by the Participant. A designation shall be
effective only if and when delivered to the Corporation during the
lifetime of the Participant. The Participant also may change the
Beneficiary or Beneficiaries by a signed, written instrument delivered
to the Corporation. The payment of amounts shall be in accordance
with the last unrevoked written designation of Beneficiary that has
been signed and delivered to the Corporation. All Beneficiary
designations shall be addressed to the Secretary of SCANA Corporation
and delivered to the office of the Secretary, and shall be processed
as indicated in subsection (b) below by the Secretary or by her
authorized designee.
(b) The Secretary of SCANA Corporation (or her authorized designee) shall,
upon receipt of the Beneficiary designation:
(1) ascertain that the designation has been signed, and if it has not
been, return it to the Participant to be signed; and
(2) if signed, stamp the designation "Received", indicate the date of
receipt, and initial the designation in the proximity of the
stamp.
8.2 Death of Beneficiary.
(a) In the event that all of the Beneficiaries named pursuant to Section
8.1 predecease the Participant, the amounts that otherwise would have
been paid to said Beneficiaries shall, where the designation fails to
redirect to alternate Beneficiaries in such circumstance, be paid to
the Participant's estate as the alternate Beneficiary.
(b) In the event that two or more Beneficiaries are named, and one or more
but less than all of such Beneficiaries predecease the Participant,
each surviving Beneficiary shall receive any dollar amount or
proportion of funds designated or indicated per the designation made
pursuant to Section 8.1, and the dollar amount or designated or
indicated share of each predeceased Beneficiary which the designation
fails to redirect to an alternate Beneficiary in such circumstance
shall be paid to the Participant's estate as an alternate Beneficiary.
12
<PAGE>
8.3 Ineffective Designation.
(a) In the event a Participant does not designate a Beneficiary, or if for
any reason a designation is entirely ineffective, the amounts that
otherwise would have been paid to the Beneficiary shall be paid to the
Participant's estate as the alternate Beneficiary.
(b) In the circumstance that designations are effective in part and
ineffective in part, to the extent that a designation is effective,
distribution shall be made so as to carry out as closely as
discernable the intent of the Participant, with the result that only
to the extent that a designation is ineffective shall distribution
instead be made to the Participant's estate as an alternate
Beneficiary.
13
<PAGE>
SECTION 9. CHANGE IN CONTROL DISTRIBUTIONS
9.1 Accelerated Distributions Upon Change in Control. Notwithstanding anything
in this Plan to the contrary, upon the occurrence of a Change in Control,
as to which the Key Employee Severance Benefits Plan ("KESBP") was not
terminated prior to such Change in Control, all amounts (or remaining
amounts) owed under this Plan as of the date of such Change in Control
(referred to as each participant's "PSP Benefit") shall become immediately
due and payable. The PSP Benefit shall be an amount equal to 100% of the
targeted award as granted at the beginning of all Cycles which are not yet
completed as of the date of the Change in Control. Each Participant's PSP
Benefit determined under this Section 9.1 shall be paid to each Participant
(and his Beneficiary) in the form of a single lump sum payment of all such
amounts owed, together with an amount (the "Gross-Up Payment") such that
the net amount retained by each Participant after deduction of any excise
tax imposed by Section 4999 of the Code (or any similar tax that may
hereafter be imposed) on such benefits (the "Excise Tax") and any Federal,
state and local income tax upon the PSP Benefit and the Gross-Up Payment
provided for by this Section 9 shall be equal to the value of the
Participant's PSP Benefit.
9.2 Tax Computation. For purposes of determining the amount of the Gross-Up
Payment referred to in Section 9.1, whether any of a Participant's PSP
Benefit will be subject to the Excise Tax and the amounts of such Excise
Tax: (i) there shall be taken into account all other payments or benefits
received or to be received by a Participant in connection with a Change in
Control of the Corporation (whether pursuant to the terms of the Plan or
any other plan, arrangement or agreement with the Corporation, any person
whose actions result in a Change in Control of the Corporation or any
person affiliated with the Corporation or such person); and (ii) the amount
of any Gross-Up Payment payable with respect to any Participant (or his
Beneficiary) by reason of such payment shall be determined in accordance
with a customary "gross-up formula," as determined by the Committee in its
sole discretion.
9.3 No Subsequent Recalculation of Tax Liability. The Gross-Up Payments
described in the foregoing provisions of this Section 9 are intended and
hereby deemed to be a reasonably accurate calculation of each Participant's
actual income tax and Excise Tax liability under the circumstances (or such
tax liability of his Beneficiary), the payment of which is to be made by
the Corporation or any "rabbi trust" established by the Corporation for
such purposes. All such calculations of tax liability shall not be subject
to subsequent recalculation or adjustment in either an underpayment or
overpayment context with respect to the actual tax liability of the
Participant (or his Beneficiary) ultimately determined as owed.
14
<PAGE>
SECTION 10. GENERAL PROVISIONS
10.1 Employment/Participation Rights.
(a) Nothing in the Plan shall interfere with or limit in any way the right
of the Corporation to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the
employ of the Corporation.
(b) Nothing in the Plan shall be construed to be evidence of any agreement
or understanding, express or implied, that the Corporation will
continue to employ a Participant in any particular position or at any
particular rate of remuneration.
(c) No employee shall have a right to be selected as a Participant, or,
having been so selected, to be selected again as a Participant.
(d) Nothing in this Plan shall affect the right of a recipient to
participate in and receive benefits under and in accordance with any
pension, profit-sharing, deferred compensation or other benefit plan
or program of the Corporation.
10.2 Nonalienation of Benefits.
(a) No right or benefit under this Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber or
charge the same shall be void; nor shall any such disposition be
compelled by operation of law, except as may be applicable in the
circumstance of death of a Participant under South Carolina law or as
a result of a qualified domestic relations order.
(b) No right or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of the person
entitled to benefits under the Plan.
(c) If any Participant or Beneficiary hereunder should become bankrupt or
attempt to anticipate, alienate, sell, assign, pledge, encumber or
charge any right or benefit hereunder, then such right or benefit
shall, in the discretion of the Board cease, and the Board shall
direct in such event that the Corporation hold or apply the same or
any part thereof for the benefit of the Participant or Beneficiary in
such manner and in such proportion as the Board may deem proper.
10.3 Transferability Restriction as to Target Shares. Target Shares are not
transferrable by a Participant other than by will or the laws of descent
and distribution.
10.4 Regarding the Securities Act of 1933. The Corporation shall not be deemed
by reason of the granting of any Target Shares hereunder to have any
obligation to register any shares of the Corporation's common stock with
respect to this Plan under the Securities Act of 1933, as amended, or to
maintain in effect any registration of such shares, or to
15
<PAGE>
list such shares on any exchange. As a condition to the issuance or
transfer of shares of the Corporation's common stock to a Participant or to
his Beneficiary or legal representative, the Committee may require such
Participant, Beneficiary or legal representative to represent that the
shares of stock are taken for investment and not for resale and to make
such other representations as the Committee shall deem necessary to qualify
the issuance of the shares as exempt from the registration requirements of
the Securities Act of 1933 and any other applicable securities laws. The
Corporation reserves the right to place a legend on any stock certificate
issued pursuant to the Plan to further the purposes expressed herein.
10.5 Regarding Section 16 of the Securities Exchange Act of 1934. With respect
to persons subject to Section 16 of the Securities Exchange Act of 1934, or
any successor thereto ("Section 16"), transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Act. Accordingly, all issuances of shares of common
stock of the Corporation to persons subject to the reporting requirements
of Section 16 shall be, to the extent required by Section 16, approved by
the Committee or in another manner provided in Section 16 or subject to a
six month holding period. To the extent any provision of the Plan or
action by the Committee is deemed not in compliance with an applicable
condition of Rule 16b-3, that provision or action shall be deemed null and
void to the extent permitted by law and deemed advisable by the Committee.
10.6 Severability. If any particular provision of the Plan shall be found to
be illegal or unenforceable for any reason, the illegality or lack of
enforceability of such provision shall not affect the remaining provisions
of the Plan, and the Plan shall be construed and enforced as if the illegal
or unenforceable provision had not been included.
10.7 No Individual Liability. It is declared to be the express purpose and
intention of the Plan that no liability whatsoever shall attach to or be
incurred by the Committee, the shareholders, the officers or the directors
of the Corporation or any representative appointed hereunder by the
Committee, under or by reason of any of the terms or conditions of the
Plan.
10.8 Applicable Law. The Plan shall be governed by and construed in accordance
with the laws of the State of South Carolina, except to the extent governed
by applicable federal law.
16
<PAGE>
SECTION 11. PLAN ADMINISTRATION, AMENDMENT AND TERMINATION
11.1 In General. The Plan shall be administered by the Committee which shall
have the sole authority to construe and interpret the terms and provisions
of the Plan and determine the amount, manner and time of payment of any
benefits hereunder. The Committee shall consist of not less than three
persons who shall be members of the Board. Each member of the Committee
shall be at all times a "non-employee director" within the meaning of Rule
16b-3 of the General Rules and Regulations (Reg. Section 16b-3(C)(2)(i))
under the Exchange Act. Additionally, each member of the Committee shall
be at all times an "outside director" within the meaning of Section
1.162-27(e)(3) of the Treasury Regulations promulgated with respect to
Section 162 of the Code. Once designated and for as long as the
individuals qualify as members of the Committee, the Committee shall
continue to serve until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution thereof, fill vacancies however caused
and remove all members of the Committee.
A majority of the entire Committee shall constitute a quorum, and the
action of a majority of the members present at any meeting at which a
quorum is present shall be deemed the action of the Committee. In
addition, any decision or determination reduced to writing and signed by
all the members of the Committee shall be fully effective as if it had been
made by a majority vote at a meeting duly called and held. The Committee
shall maintain records and cause payments to be made hereunder, and the
requisite calculations, interpretations, determinations, regulations and,
subject to the provisions of Section 11.2, calculations of the Committee
shall be final and binding on all persons and parties concerned. The
Committee may adopt such rules as it deems necessary, desirable or
appropriate in administering the Plan.
11.2 Claims Procedure. Any person dissatisfied with the Committee's
determination of a claim for benefits hereunder must file a written request
for review with the Board. This request must include a written explanation
setting forth the specific reasons for the requested review. The Board
shall review the Committee's determination promptly and render a written
decision with respect to the claim. Such decision shall be final, binding
and conclusive upon all claimants under this Plan. The Board's exercise of
discretion under this Section may cause the performance awards for a
Covered Participant to fail to qualify as qualified performance-based
compensation.
11.3 Finality of Determination. The determination of the Board as to any
disputed questions arising under this Plan, including questions of
construction and interpretation, shall be final, binding and conclusive
upon all persons.
11.4 Expenses. The cost of payments from this Plan and the expenses of
administering the Plan shall be borne by the Corporation.
11.5 Tax Withholding. The Corporation shall have the right to deduct from all
payments made under the Plan any federal, state or local taxes required by
law to be withheld
17
<PAGE>
with respect to such payments.
11.6 Incompetency. Any person receiving or claiming benefits under the Plan
shall be conclusively presumed to be mentally competent and of age until
the Corporation receives written notice, in a form and manner acceptable to
it, that such person is incompetent or a minor, and that a guardian,
conservator, statutory committee under the South Carolina Code of Laws, or
other person legally vested with the care of his estate has been appointed.
In the event that the Corporation finds that any person to whom a benefit
is payable under the Plan is unable to properly care for his affairs, or is
a minor, then any payment due (unless a prior claim therefor shall have
been made by a duly appointed legal representative) may be paid to the
spouse, a child, a parent or a brother or sister, or to any person deemed
by the Corporation to have incurred expense for the care of such person
otherwise entitled to payment.
In the event a guardian or conservator or statutory committee of the estate
of any person receiving or claiming benefits under the Plan shall be
appointed by a court of competent jurisdiction, payments shall be made to
such guardian or conservator or statutory committee provided that proper
proof of appointment is furnished in a form and manner suitable to the
Corporation. Any payment made under the provisions of this Section 11.6
shall be a complete discharge of liability therefor under the Plan.
11.7 Action by Corporation. Any action required or permitted to be taken
hereunder by the Corporation or the Board shall be taken by the Board.
11.8 Notice of Address. Any payment made to a Participant or his Beneficiary
at the last known post office address of the distributee on file with the
Corporation, shall constitute a complete acquittance and discharge to the
Corporation and any director or officer with respect thereto, unless the
Corporation shall have received prior written notice of any change in the
condition or status of the distributee. Neither the Corporation nor any
director or officer shall have any duty or obligation to search for or
ascertain the whereabouts of a Participant or his Beneficiary.
11.9 Amendment and Termination. If approved by the shareholders of the
Corporation, the Corporation reserves the right to amend, modify or
terminate the Plan at any time by action of its Board without further
action of shareholders. However, no amendment will increase the total
number of shares of the Corporation's common stock that may be distributed
under the Plan beyond the number of shares indicated in Section 6.4 or the
maximum annual award set forth in Section 5.2 without obtaining shareholder
approval. Upon any such amendment, and except as provided hereunder, upon
the occurrence of a Change in Control of the Corporation, each Participant
and his Beneficiary shall be entitled only to such benefits as determined
by the Committee pursuant to such amendment. Upon any termination of the
Plan, and except as provided hereunder, upon the occurrence of a Change in
Control, no Participant or Beneficiary shall be entitled to any further
benefits hereunder, unless determined otherwise by the Committee, in its
sole discretion.
Notwithstanding the foregoing, and subject to Section 9, no amendment,
modification
18
<PAGE>
or termination of the Plan may be made, and no Participants may be added to
the Plan, upon or following a Change in Control of the Corporation without
the express written consent of all of the Plan's Participants covered by
the Plan at such time. In all events, however, the Corporation reserves
the right to amend, modify or delete the provisions of Section 9 at any
time prior to a Change in Control of the Corporation, pursuant to a Board
resolution adopted by a vote of at least two-thirds of the members of the
Board.
19
<PAGE>
ADDENDUM A
TOTAL SHAREHOLDER RETURN
AWARD CALCULATIONS
<TABLE>
<CAPTION>
PERFORMANCE PAYOUT AS A % OF
ACHIEVED TARGET SHARES AWARDED
------------------ ------------------------------
<S> <C>
33 40
34 44
35 48
36 51
37 55
38 59
39 63
40 66
41 70
42 74
43 78
45 81
46 85
47 89
48 93
49 95
50 100
51 102
52 104
53 106
54 108
55 110
56 112
57 114
58 116
59 118
60 120
61 122
62 124
63 126
64 128
65 130
66 132
67 134
68 136
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE PAYOUT AS A % OF
ACHIEVED TARGET SHARES AWARDED
------------------ ------------------------------
<S> <C> <C>
69 138
70 140
71 142
72 144
73 146
74 148
75 150
</TABLE>
A-2
<PAGE>
ADDENDUM B
SCANA CORPORATION
PERFORMANCE SHARE PLAN
DESIGNATION OF BENEFICIARY
To: Secretary of SCANA Corporation
I hereby designate the following person(s), trust(s) or estate, to be the
recipient(s) of any and all amounts which may become payable or may remain to
be paid upon my death under the SCANA Corporation Performance Share Plan.
<TABLE>
<CAPTION>
Beneficiary's Name
and Social Security Relationship
or Employer Beneficiary's to Dollars or
Identification No. Address Participant % Share
----------------------- ------------------- --------------- -------------
<S> <C> <C> <C>
</TABLE>
I hereby designate the following person, trust or estate as Alternate
Beneficiary with respect to the contingency events described in Sections
8.2(a) and 8.2(b) of this Plan.
<TABLE>
<CAPTION>
Alternate Beneficiary's
Name and Social Alternate Relationship
Security or Employer Beneficiary's to
Identification No. Address Participant
-------------------------- ---------------- ------------------
<S> <C> <C>
</TABLE>
Spouse's Consent: (Community Property States Only -- S.C. domiciliaries
ignore):
I hereby agree to the Beneficiary(ies) designated above:
___________________________________ ________________________
Spouse's Signature Date
I hereby revoke any Beneficiary designation previously made by me and reserve
the right to change this designation at any time by filing a new Designation
of Beneficiary form.
Signature of Participant _____________________________________________________
Date _______________________ Social Security Number ______________________
Signature of Corporate Secretary ______________________________________________
Date Received _________________________________________________________________
(Rev. 1996)
