February 26, 2004, Columbia, SC - SCANA Corporation (NYSE: SCG) announced today that William B. Timmerman, chairman, president and CEO, exercised options to purchase 261,534 shares of SCANA common stock and sold the underlying shares between February 24 and February 25, 2004, netting approximately $1.9 million. He continues to hold approximately 82,000 shares of SCANA common stock directly or through Company benefit programs, and stock options to purchase 123,000 shares.
"The decision to exercise options and sell the underlying shares is an individual decision as a part of personal financial planning considerations, including asset diversification," said Kevin Marsh, senior vice president and chief financial officer. "Bill Timmerman's decision does not reflect any lack of confidence in the Company's future performance. He, as well as the rest of our management team, continues to have a substantial equity investment in SCANA Corporation."
Marsh noted that the exercise of options by SCANA's executives has no impact on the cost of service or on the rates paid by any of the Company's utility customers.
Stock options are a form of compensation that give employees and others the right to purchase a set number of shares of the Company's common stock at a preset price during a specified period of time in the future. Stock acquired through exercising options may be held or sold depending on an individual's personal financial planning goals. The value of an option is directly tied to the market price of the Company's common stock. If the price of the Company's common stock increases above the preset price, then the options have value. However, if the price of the stock drops below the preset price, the options have no current value.
"During the period 2000-2002, SCANA's board of directors granted nonqualified stock options to key employees under the Company's Long-Term Equity Compensation Plan," said Marsh. "The purpose of these options was to attract and retain the best possible employees by offering real ownership in the Company and to provide individual long-term financial incentives that were linked to long-term corporate performance driven by increasing shareholder value."
The value of the options granted to Timmerman and other key employees is based on the increase in the stock price since the options were awarded. Over the five-year period 1998 – 2003, which includes the period during which the options were granted, SCANA's common stock provided a total return (increase in stock price plus dividends) to shareholders of some 33 percent, significantly outperforming comparable utility indices. That solid performance was due in part to the success of the Company's investments in the telecommunications industry and its other non-regulated businesses. In addition, the conservative "never left the basics" strategic plan developed under Timmerman's leadership has kept the Company out of risky business ventures that have spelled trouble for other companies in recent years.
Marsh added that options covering a total of approximately two million shares, or less than two percent of the total number of common shares currently outstanding, were granted to key employees by the board during the 2000 – 2002 period. In 2002, the Company began purchasing shares of SCANA's common stock on the open market to offset dilution related to the exercise of these options. To date, approximately 350,000 shares of common stock have been repurchased.
"The number of shares repurchased is limited to the total number of options exercised," said Marsh.
SCANA Corporation, a Fortune 500 company headquartered in Columbia, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations, telecommunications and other energy-related businesses. Information about SCANA and its businesses is available on the Company's website at www.scana.com.