-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sa7n+r8ILTaXe0ghY2zZaqmZFqjzhTlpvm9GnA/l5YfQN9S/I/ifBQ2B3jHeKrM5 c3/aPsMRsU5tnanBV7g++g== 0000754737-96-000012.txt : 19960814 0000754737-96-000012.hdr.sgml : 19960814 ACCESSION NUMBER: 0000754737-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCANA CORP CENTRAL INDEX KEY: 0000754737 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 570784499 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08809 FILM NUMBER: 96611074 BUSINESS ADDRESS: STREET 1: 1426 MAIN ST STREET 2: P O BOX 764 CITY: COLUMBIA STATE: SC ZIP: 29201 BUSINESS PHONE: 8037483000 MAIL ADDRESS: STREET 1: MAIL CODE 051 CITY: COLUMBIA STATE: SC ZIP: 29218 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-8809 SCANA Corporation (Exact name of registrant as specified in its charter) South Carolina 57-0784499 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1426 Main Street, Columbia, South Carolina 29201 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (803) 748-3000 Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 104,974,417 Common Shares, without par value, as of June 30, 1996 SCANA CORPORATION INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Balance Sheets as of June 30, 1996 and December 31, 1995.................................... 3 Consolidated Statements of Income and Retained Earnings for the Periods Ended June 30, 1996 and 1995............. 5 Consolidated Statements of Cash Flows for the Periods Ended June 30, 1996 and 1995............................. 6 Notes to Consolidated Financial Statements............... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings........................................ 16 Item 4. Submission of Matters to a Vote of Security-Holders...... 16 Item 6. Exhibits and Reports on Form 8-K......................... 16 Signatures........................................................ 17 Exhibit Index..................................................... 18 2 PART I FINANCIAL INFORMATION SCANA CORPORATION CONSOLIDATED BALANCE SHEETS As of June 30, 1996 and December 31, 1995 (Unaudited) June 30, December 31, 1996 1995 (Thousands of Dollars) ASSETS Utility Plant: Electric................................................... $3,975,810 $3,539,068 Gas........................................................ 495,282 484,752 Transit.................................................... 3,824 3,768 Common..................................................... 88,060 91,616 Total.................................................... 4,562,976 4,119,204 Less accumulated depreciation and amortization............. 1,471,380 1,367,541 Total.................................................... 3,091,596 2,751,663 Construction work in progress.............................. 292,928 644,661 Nuclear fuel, net of accumulated amortization.............. 43,342 46,492 Acquisition adjustment-gas, net of accumulated amortization............................................. 24,509 26,172 Utility Plant, Net.................................... 3,452,375 3,468,988 Nonutility Property and Investments, net of accumulated depreciation and depletion................................. 334,108 314,207 Current Assets: Cash and temporary cash investments........................ 32,544 16,082 Receivables................................................ 231,896 211,173 Inventories (at average cost): Fuel..................................................... 40,812 61,499 Materials and supplies................................... 51,561 47,674 Prepayments................................................ 24,984 15,870 Accumulated deferred income taxes.......................... 19,759 20,186 Total Current Assets.................................. 401,556 372,484 Deferred Debits: Emission allowances........................................ 30,400 28,514 Unamortized debt expense................................... 12,820 13,432 Unamortized deferred return on plant investment............ 4,246 6,369 Nuclear plant decommissioning fund......................... 39,132 36,070 Other...................................................... 331,261 294,362 Total Deferred Debits................................. 417,859 378,747 Total....................................... $4,605,898 $4,534,426 See notes to consolidated financial statements. 3 SCANA CORPORATION CONSOLIDATED BALANCE SHEETS As of June 30, 1996 and December 31, 1995 (Unaudited) June 30, December 31, 1996 1995 (Thousands of Dollars) CAPITALIZATION AND LIABILITIES Stockholders' Investment: Common Equity: Common stock (without par value)......................... $1,093,497 $1,056,689 Retained earnings........................................ 528,192 497,991 Total Common Equity..................................... 1,621,689 1,554,680 Preferred Stock of Subsidiary (not subject to purchase or sinking funds)........................................ 26,027 26,027 Total Stockholders' Investment.......................... 1,647,716 1,580,707 Preferred Stock of Subsidiary, net (subject to purchase or sinking funds).......................................... 44,260 46,243 Long-term debt, net.......................................... 1,548,012 1,588,879 Total Capitalization.................................. 3,239,988 3,215,829 Current Liabilities: Short-term borrowings...................................... 131,245 112,524 Current portion of long-term debt.......................... 98,202 40,983 Current portion of preferred stock......................... 2,435 2,439 Accounts payable........................................... 130,462 138,778 Customer deposits.......................................... 14,259 13,643 Taxes accrued.............................................. 40,421 66,914 Interest accrued........................................... 26,731 25,884 Dividends declared......................................... 40,337 39,056 Other...................................................... 14,093 14,625 Total Current Liabilities............................. 498,185 454,846 Deferred Credits: Accumulated deferred income taxes.......................... 558,896 542,022 Accumulated deferred investment tax credits................ 85,897 87,719 Accumulated reserve for nuclear plant decommissioning...... 39,132 36,070 Other...................................................... 183,800 197,940 Total Deferred Credits................................ 867,725 863,751 Total....................................... $4,605,898 $4,534,426 See notes to consolidated financial statements. 4 SCANA CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Periods Ended June 30, 1996 and 1995 (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 (Thousands of Dollars, Except Per Share Amounts) OPERATING REVENUES: Electric.................................. $269,380 $239,004 $531,527 $469,578 Gas....................................... 80,113 71,116 212,018 184,275 Transit................................... 893 1,016 1,803 2,043 Total Operating Revenues.............. 350,386 311,136 745,348 655,896 OPERATING EXPENSES: Fuel used in electric generation.......... 66,697 54,273 124,131 106,124 Purchased power........................... 4,015 6,708 5,756 7,337 Gas purchased for resale.................. 54,482 44,958 140,586 110,363 Other operation........................... 57,694 57,599 113,913 113,729 Maintenance............................... 18,292 15,746 33,261 30,536 Depreciation and amortization............. 37,057 30,740 72,847 61,519 Income taxes.............................. 22,766 19,743 57,030 48,602 Other taxes............................... 22,936 20,357 45,992 41,628 Total Operating Expenses.............. 283,939 250,124 593,516 519,838 OPERATING INCOME............................ 66,447 61,012 151,832 136,058 OTHER INCOME: Allowance for equity funds used during construction..................... 1,601 2,455 3,306 4,923 Other income, net of income taxes......... 2,556 (15,358) 16,296 (9,530) Total Other Income.................... 4,157 (12,903) 19,602 (4,607) INCOME BEFORE INTEREST CHARGES AND PREFERRED STOCK DIVIDENDS................. 70,604 48,109 171,434 131,451 INTEREST CHARGES (CREDITS): Interest expense.......................... 32,356 33,819 64,951 67,171 Allowance for borrowed funds used during construction..................... (1,420) (2,726) (3,369) (5,434) Total Interest Charges, Net........... 30,936 31,093 61,582 61,737 INCOME BEFORE PREFERRED STOCK CASH DIVIDENDS OF SUBSIDIARY................... 39,668 17,016 109,852 69,714 PREFERRED STOCK CASH DIVIDENDS OF SUBSIDIARY (At stated rates).............. (1,368) (1,430) (2,739) (2,864) NET INCOME.................................. 38,300 15,586 107,113 66,850 RETAINED EARNINGS AT BEGINNING OF PERIOD.... 528,470 488,788 497,991 472,371 COMMON STOCK CASH DIVIDENDS DECLARED........ (38,578) (35,127) (76,912) (69,974) RETAINED EARNINGS AT END OF PERIOD.......... $528,192 $469,247 $528,192 $469,247 NET INCOME.................................. $ 38,300 $ 15,586 $107,113 $ 66,850 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (THOUSANDS) (Note 1C)............................... 104,824 97,414 104,491 97,026 EARNINGS PER WEIGHTED AVERAGE SHARE OF COMMON STOCK........................... $ .37 $ .16 $ 1.03 $ .69 CASH DIVIDENDS DECLARED PER SHARE OF COMMON STOCK............................. $ .3675 $ .36 $ .7350 $ .72 See notes to consolidated financial statements. 5 SCANA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the Periods Ended June 30, 1996 and 1995 (Unaudited) Six Months Ended June 30, 1996 1995 (Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income............................................ $ 107,113 $ 66,850 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation, depletion and amortization............ 92,440 112,742 Amortization of nuclear fuel........................ 7,933 9,488 Deferred income taxes, net.......................... 16,981 (4,686) Deferred investment tax credits, net................ (1,822) (1,815) Net regulatory asset - adoption of SFAS No. 109..... (185) (1,381) Dividends declared on preferred stock of subsidiary. 2,739 2,864 Equity in (earnings) losses of investees............ (2,133) (1,414) Nuclear refueling accrual........................... (2,697) 3,479 Allowance for funds used during construction........ (6,675) (10,357) Unamortized loss on reacquired debt................. 1,436 (3,959) Over (under) collections, fuel adjustment clauses... (443) 24,693 Early retirements................................... (5,920) (16,684) Emission allowances, net of AFC..................... (1,885) (2,645) Changes in certain current assets and liabilities: (Increase) decrease in receivables................. (20,723) 9,175 (Increase) decrease in inventories................. 16,800 6,992 (Increase) decrease in prepayments................. (9,114) (2,721) Increase (decrease) in accounts payable............ (8,316) (32,844) Increase (decrease) in taxes accrued............... (26,493) (28,722) Increase (decrease) in interest accrued ........... 847 716 Other, net.......................................... 17,168 (89) Net Cash Provided From Operating Activities............. 177,051 129,682 CASH FLOWS FROM INVESTING ACTIVITIES: Utility property additions and construction expenditures, net of AFC............................ (102,332) (142,890) Sale of interest in oil and gas properties............ 42,554 - Increase in other property and investments............ (92,972) (62,178) Net Cash Used For Investing Activities.................. (152,750) (205,068) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds: Issuance of First Mortgage Bonds.................... - 99,583 Issuance of notes and loans......................... 60,000 60,000 Issuance of other long-term debt.................... 30,720 64,254 Issuance of common stock............................ 37,083 32,910 Repayments: First and Refunding Mortgage Bonds.................. (22,000) (48,779) Redemption of notes................................. (61,912) (58,864) Preferred stock..................................... (1,987) (2,094) Dividend payments: Common stock........................................ (75,638) (68,731) Preferred stock of subsidiary....................... (2,747) (2,906) Short-term borrowings, net............................ 18,721 (3,637) Fuel and emission allowance financings, net........... 9,921 3,935 Net Cash Provided From (Used For) Financing Activities.. (7,839) 75,671 NET INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS............................ 16,462 285 CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1........ 16,082 12,938 CASH AND TEMPORARY CASH INVESTMENTS AT JUNE 30.......... $ 32,544 $ 13,223 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for - Interest (includes capitalized interest of $3,369 and $5,434)....... $ 62,791 $ 65,583 - Income taxes.......................... 40,337 45,501 See notes to consolidated financial statements.
6 SCANA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1996 (Unaudited) The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in SCANA Corporation's Annual Report on Form 10-K for the year ended December 31, 1995. These are interim financial statements and, because of temperature variations between seasons of the year, the amounts reported in the Consolidated Statements of Income are not necessarily indicative of amounts expected for the year. In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Principles of Consolidation The accounts of SCANA Corporation and its wholly owned subsidiaries (Company) are consolidated in the accompanying Consolidated Financial Statements. Certain investments are reported using the equity method of accounting. Significant intercompany balances and transactions have been eliminated in consolidation in compliance with Statement of Financial Accounting Standards No. 71 "Accounting for the Effects of Certain Types of Regulation" which provides that profits on intercompany sales to regulated affiliates are not eliminated if the sales price is reasonable and the future recovery of the sales price through the rate making process is probable. B. Basis of Accounting The Company prepares its financial statements in accordance with the provisions of Statement of Financial Accounting Standards No. 71 (SFAS 71), "Accounting for the Effects of Certain Types of Regulation." The accounting standard allows cost-based rate-regulated utilities, such as the Company, to recognize in their financial statements revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result, the Company has recorded, as of June 30, 1996, approximately $240 million and $60 million of regulatory assets and liabilities, respectively, including amounts recorded for accumulated deferred income tax assets and liabilities of approximately $86 million and $60 million, respectively. The electric regulatory assets of approximately $130 million (excluding accumulated deferred income tax assets) are being recovered through rates and, as discussed in Note 2, the Public Service Commission of South Carolina (PSC) has approved accelerated recovery of approximately $71 million of these assets. In the future, as a result of deregulation or other changes in the regulatory environment, the Company may no longer meet the criteria for continued application of SFAS 71 and would be required to write off its regulatory assets and liabilities. Such an event could have a material adverse effect on the Company's results of operations in the period the write-off is recorded. C. Stock Split On April 27, 1995, the Company's Board of Directors approved a two-for-one split of the Company's Common Stock effective at the close of business May 11, 1995. The weighted average number of common shares outstanding, earnings per weighted average share of common stock and cash dividends declared per share of common stock have been restated to reflect the stock split for the prior period reported. D. Reclassifications Certain amounts from prior periods have been reclassified to conform with the 1996 presentation. 7 2.RATE MATTERS: With respect to rate matters at June 30, 1996, reference is made to Note 2 of Notes to Consolidated Financial Statements in The Company's Annual Report on Form 10-K for the year ended December 31, 1995. On July 10, 1995 SCE&G filed an application with the PSC for an increase in retail electric rates. On January 9, 1996 the PSC issued an order granting SCE&G an increase of 7.34% which will produce additional revenues of approximately $67.5 million annually. The increase is being implemented in two phases. The first phase, an increase in revenues of approximately $59.5 million annually based on a test year, or 6.47%, commenced on January 15, 1996. The second phase will be implemented in January 1997 and will produce additional revenues of approximately $8.0 million annually, or .87% more than current rates. The PSC authorized a return on common equity of 12.0%. The PSC also approved establishment of a Storm Damage Reserve Account capped at $50 million and collected through rates over a ten-year period. Additionally, the PSC approved accelerated recovery of a significant portion of SCE&G's electric regulatory assets (excluding accumulated deferred income tax assets) and the transition obligation for postretirement benefits other than pensions, changing the amortization periods to allow recovery by the end of the year 2000. SCE&G's request to shift approximately $257 million of depreciation reserves from transmission and distribution assets to nuclear production assets was also approved. 3. RETAINED EARNINGS: The Restated Articles of Incorporation of the Company do not limit the dividends that may be payable on its common stock. However, the Restated Articles of Incorporation of SCE&G and the Indenture underlying certain of its bond issues contain provisions that may limit the payment of cash dividends on common stock. In addition, with respect to hydroelectric projects, the Federal Power Act may require the appropriation of a portion of the earnings therefrom. At June 30, 1996 approximately $15.1 million of SCE&G's retained earnings were restricted as to payment of cash dividends on common stock. 4. COMMITMENTS AND CONTINGENCIES: With respect to commitments at June 30, 1996, reference is made to Note 10 of Notes to Consolidated Financial Statements appearing in The Company's Annual Report on Form 10-K for the year ended December 31, 1995. No significant changes have occurred with respect to those matters as reported therein, except with regard to the Calhoun Park area site discussed in Note 4B below. Contingencies at June 30, 1996 are as follows: A. Nuclear Insurance The Price-Anderson Indemnification Act, which deals with the Company's public liability for a nuclear incident, currently establishes the liability limit for third-party claims associated with any nuclear incident at $8.9 billion. Each reactor licensee is currently liable for up to $79.3 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $10 million of the liability per reactor would be assessed per year. SCE&G's maximum assessment, based on its two- thirds ownership of Summer Station, would be approximately $52.9 million per incident but not more than $6.7 million per year. SCE&G currently maintains policies (for itself and on behalf of the PSA) with American Nuclear Insurers (ANI) and Nuclear Electric Insurance Limited (NEIL) providing combined property and decontamination insurance coverage of $1.9 billion for any losses at Summer Station. SCE&G pays annual premiums and, in addition, could be assessed a retroactive premium assessment not to exceed 7 1/2 times its annual premium in the event of property damage loss to any nuclear generating facility covered under the NEIL program. Based on the current annual premium, this retroactive premium assessment would not exceed $8.7 million. 8 To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that SCE&G's rates would not recover the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer. SCE&G has no reason to anticipate a serious nuclear incident at Summer Station. If such an incident were to occur, it could have a material adverse impact on the Company's financial position and results of operations. B. Environmental The Company has an environmental assessment program to identify and assess current and former operations sites that could require environmental cleanup. As site assessments are initiated, estimates are made of the cost, if any, to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from original estimates. Amounts estimated and accrued to date for site assessments and cleanup relate primarily to regulated operations; such amounts are deferred (approximately $16 million) and are being amortized and recovered through rates over a ten-year period for electric operations and an eight-year period for gas operations. The deferral includes the costs estimated to be associated with the matters discussed in the following paragraphs. SCE&G, the Company's principal subsidiary, owns four decommissioned manufactured gas plant sites which contain residues of by-product chemicals. SCE&G maintains an active review of the sites to monitor the nature and extent of the residual contamination. In September 1992 the Environmental Protection Agency (EPA) notified SCE&G, the City of Charleston and the Charleston Housing Authority of their potential liability for the investigation and cleanup of the Calhoun Park area site in Charleston, South Carolina. This site originally encompassed approximately 18 acres and included properties which were the locations for industrial operations, including a wood preserving (creosote) plant and one of SCE&G's decommissioned manufactured gas plants. The original scope of this investigation has been expanded to approximately 30 acres, including adjacent properties owned by the National Park Service and the City of Charleston, and private properties. The site has not been placed on the National Priority List, but may be added before cleanup is initiated. The potentially responsible parties (PRP) have agreed with the EPA to participate in an innovative approach to site investigation and cleanup called "Superfund Accelerated Cleanup Model," allowing the pre-cleanup site investigation process to be compressed significantly. The PRPs have negotiated an administrative order by consent for the conduct of a Remedial Investigation/Feasibility Study and a corresponding Scope of Work. Field work began in November 1993 and a draft Remedial Investigation report was submitted to the EPA in February 1995. SCE&G is currently resolving the comments of the EPA and other regulatory agencies related to the draft. SCE&G is also working with the City of Charleston to investigate possible contamination which may have migrated to the City's aquarium site from the manufactured gas plant. In 1994 the City of Charleston notified SCE&G that it considers SCE&G to be responsible for a projected $43.5 million increase in costs of the aquarium project attributable to delays resulting from contamination of the Calhoun Park area site. In May 1996 the City of Charleston and the Company agreed to settle all environmental claims the City may have against the Company involving the Calhoun Park area for a payment of $26 million over four years by the Company to the City. The settlement was executed by the City of Charleston and the Company on August 7, 1996 along with a 30-year electric franchise agreement. The amount of the settlement will be recovered through rates in the same manner as other amounts accrued for site assessments and cleanup as discussed above. The Company does not expect the settlement to have a material impact on the Company's financial position or results of operations. 9 C. SCANA Communications, Inc. Guarantee A percentage of the projected annual revenues for the years 1996-2003 of certain fiber optic routes of a joint venture between SCANA Communications, Inc. (SCI), formerly MPX Systems, Inc., and a subsidiary of ITC Holding Company, Inc., a Georgia-based telecommunications holding company, has been guaranteed by SCI. The amount of such guarantee over the remaining portion of the eight-year period net of $27.2 million for revenue contracts obtained by the joint venture, is approximately $16.3 million. 10 SCANA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General Competition The electric utility industry has begun a major transition that could lead to expanded market competition and less regulatory protection. Future deregulation of electric wholesale and retail markets will create opportunities to compete for new and existing customers and markets. As a result, profit margins and asset values of some utilities could be adversely affected. The pace of deregulation, the future market price of electricity, and the regulatory actions which may be taken by the PSC and the Federal Energy Regulatory Commission (FERC) in response to the changing environment cannot be predicted. However, recent FERC actions will likely accelerate competition among electric utilities by providing for wholesale transmission access. In April, 1996 the FERC issued Order 888, which addresses open access to transmission lines and stranded cost recovery. Order 888 requires utilities under FERC jurisdiction that own, control or operate transmission lines to file nondiscriminatory open access tariffs that offer to others the same transmission service they provide themselves. The FERC has also permitted utilities to seek recovery of wholesale stranded costs from departing customers by direct assignment. Approximately 5% of the Company's electric revenues is under FERC jurisdiction. The Company is aggressively pursuing actions to position itself strategically for the transformed environment. To enhance its flexibility and responsiveness to change, the Company's electric and gas utility, SCE&G, operates Strategic Business Units. Maintaining a competitive cost structure is of paramount importance in the utility's strategic plan. SCE&G has undertaken a variety of initiatives, including reductions in operation and maintenance costs and in staffing levels. In January 1996 the PSC approved (as discussed under "Liquidity and Capital Resources") the accelerated recovery of SCE&G's electric regulatory assets and the shift of depreciation reserves from transmission and distribution assets to nuclear production assets. In May 1996 the FERC approved SCE&G's application establishing open access transmission tariffs and requesting authorization to sell bulk power to wholesale customers at market-based rates. The FERC also approved SCANA Energy Marketing's (SEM) application to become a power marketer. That designation will allow SEM, a subsidiary of the Company and a natural gas marketer, to buy and sell large blocks of electric capacity in wholesale markets. The Company believes that these actions as well as numerous others that have been and will be taken demonstrate its ability and commitment to succeed in the new operating environment to come. Regulated public utilities are allowed to record as assets some costs that would be expensed by other enterprises. If deregulation or other changes in the regulatory environment occur, the Company may no longer be eligible to apply this accounting treatment and may be required to eliminate such regulatory assets from its balance sheet. Such an event could have a material adverse effect on the Company's results of operations in the period the write-off is recorded. The Company reported approximately $240 million and $60 million of regulatory assets and liabilities, respectively, including amounts recorded for accumulated deferred income tax assets and liabilities of approximately $86 million and $60 million, respectively, on its balance sheet at June 30, 1996. Material Changes in Capital Resources and Liquidity From December 31, 1995 to June 30, 1996 Liquidity and Capital Resources The cash requirements of the Company arise primarily from SCE&G's operational needs, the Company's construction program and the need to fund the activities or investments of the Company's nonregulated subsidiaries. The ability of the Company's regulated subsidiaries to replace existing plant investment, as well as to expand to meet future demands for electricity and gas, will depend upon their ability to attract the necessary financial capital on reasonable terms. The Company's regulated subsidiaries recover the costs of providing services through rates charged to customers. Rates for regulated services are generally based on historical costs. As customer growth and inflation occur and the regulated subsidiaries expand their construction programs, it is necessary to seek increases in rates. As a result, the Company's financial position and results of operations are affected by the regulated subsidiaries' ability to obtain adequate and timely rate relief and in the future will be dependent on the Company's ability to compete in a deregulated environment (See Competition). 11 On July 10, 1995 SCE&G filed an application with the PSC for an increase in retail electric rates. On January 9, 1996 the PSC issued an order granting SCE&G an increase of 7.34% which will produce additional revenues of approximately $67.5 million annually. The increase is being implemented in two phases. The first phase, an increase in revenues of approximately $59.5 million annually based on a test year, or 6.47%, commenced on January 15, 1996. The second phase will be implemented in January 1997 and will produce additional revenues of approximately $8.0 million annually, or .87% more than current rates. The PSC authorized a return on common equity of 12.0%. The PSC also approved establishment of a Storm Damage Reserve Account capped at $50 million and collected through rates over a ten-year period. Additionally, the PSC approved accelerated recovery of a significant portion of SCE&G's electric regulatory assets (excluding accumulated deferred income tax assets) and the remaining transition obligation for postretirement benefits other than pensions, changing the amortization periods to allow recovery by the end of the year 2000. SCE&G's request to shift approximately $257 million of depreciation reserves from transmission and distribution assets to nuclear production assets was also approved. The following table summarizes how the Company generated funds for its property acquisitions and utility property additions and construction expenditures during the six months ended June 30, 1996 and 1995: Six Months Ended June 30, 1996 1995 (Thousands of Dollars) Net cash provided from operating activities $177,051 $129,682 Net cash provided from (used for) financing activities (7,839) 75,671 Cash provided from sale of oil and gas properties 42,554 - Cash and temporary cash investments available at the beginning of the period 16,082 12,938 Net cash available for property acquisitions and utility property additions and construction expenditures $227,848 $218,291 Funds used for utility property additions and construction expenditures, net of noncash allowance for funds used during construction $102,332 $142,890 Funds used for nonutility property additions $ 12,357 $ 11,474 On January 13, 1995 the Company closed a $60 million unsecured bank loan due January 12, 1996, and used the proceeds to pay off loans in a like total amount. In January 1996 the Company refinanced the loan with unsecured bank loans totaling $60 million due January 10, 1997 at initial interest rates between 5.684% and 5.730%, subject to reset quarterly at LIBOR plus a spread of nine to fifteen basis points. On August 7, 1996 the City of Charleston executed 30-year electric and gas franchise agreements with SCE&G. In consideration for the electric franchise agreement, the City will receive from SCE&G $25 million paid over seven years and SCE&G will donate to the City the existing transit assets in Charleston. The City has also agreed to settle environmental claims it may have against SCE&G involving the Calhoun Park area, where SCE&G and its predecessor companies operated a manufactured gas plant until the 1960's. SCE&G will pay the City $26 million over a four-year period to settle all claims. As part of the environmental settlement, SCE&G has agreed to construct an 1100 space parking garage on the Calhoun Park site and to transfer the facility to the City in exchange for a 20-year municipal bond backed by revenues from the parking garage and a mortgage on the parking garage. The total amount of the bond is not to exceed $16.9 million, the maximum expected project cost. SCE&G will contribute up to $500,000 per year to the City to defray the cost of underground wiring or other nonstandard service projects within scenic or historic districts of the City, which amounts will be matched by city funds. The City has agreed to limit such projects to those which can be paid for out of a combined pool of funds created by SCE&G's and the City's contributions. It is anticipated that the Company's payments for underground wiring/nonstandard service will be treated as investments in the electric distribution rate base by the Company's regulators. 12 The Company and Westvaco Corporation have formed a limited liability company, Cogen South LLC, which will build and operate a $170 million cogeneration facility at Westvaco's Kraft Division Paper Mill in North Charleston, S. C. The facility will provide industrial process steam for the Westvaco paper mill and shaft horsepower to enable SCE&G to generate up to 99 megawatts of electricity. Construction financing is being provided to Cogen South LLC by banks. In addition to the cogeneration partnership, Westvaco has entered into a 20-year contract with SCE&G for all its electricity requirements at SCE&G's standard industrial rate. Construction of the plant is scheduled to begin in August 1996 and the plant is expected to be operational in the fall of 1998. SCANA Communications, Inc., (SCI) a wholly owned subsidiary of SCANA, through a joint venture with a subsidiary of ITC Holding Company, Inc., a Georgia-based telecommunications holding company, has constructed a fiber optic network through Texas, Louisiana, Mississippi, Alabama and Georgia. The network, which cost approximately $70 million, consists of more than 900 miles of fiber optic lines. SCI holds an approximate 17% interest in InterCel, Inc. (InterCel), a publicly traded telecommunications company providing services in Georgia, Alabama and Maine. On March 6, 1996 InterCel entered into a definitive agreement with GTE Mobilnet Incorporated (GTE) to purchase GTE's PCS license for the Atlanta MTA. Closing of the InterCel purchase occurred on June 28, 1996. InterCel financed the purchase principally through a private placement of convertible preferred stock. SCI purchased $75 million of a series of InterCel non-voting preferred stock that is convertible to InterCel common stock after four years. SCANA Petroleum Resources, Inc. (SPR) and Fina Oil and Chemical Company (Fina) are parties to a joint exploration and development agreement providing for the exclusive oil and gas development rights on approximately 183,000 acres of onshore lands owned by Fina in Terrebonne and LaFourche Parishes in southern Louisiana. SPR and Fina are continuing an extensive 3-D seismic acquisition program on the property. Fina is the operator of the multi-million dollar seismic program, which is financed and owned on a 50-50 basis between the companies. SPR's participation in the seismic and drilling activity is financed largely with internal cash flows from the existing SPR operations. Drilling activities are expected to begin during the fourth quarter of 1996. On April 22, 1996, SPR closed a $46.7 million sale of substantially all of its oil and gas properties in the state of Oklahoma to ONEOK Resources Company, a subsidiary of ONEOK, Inc. Under the full cost method of accounting, the sale resulted in an adjustment of the Company's oil and gas reserves and associated costs and did not result in any gain or loss. There was no material affect on SPR's cost per barrel equivalent of reserves. Following the sale, over 95 percent of its remaining reserves are located on properties in East Texas, Louisiana, Mississippi and other onshore and offshore Gulf Coast areas. SPR 's long-term operating strategy will be focused on these areas. The Company anticipates that the remainder of its 1996 cash requirements will be met through internally generated funds, the sales of additional equity securities and medium-term notes and the incurrence of additional short-term and long-term indebtedness. The timing and amount of such financing will depend upon market conditions and other factors. The ratio of earnings to fixed charges for the twelve months ended June 30, 1996 was 3.51. The Company expects that it has or can obtain adequate sources of financing to meet its cash requirements for the next twelve months and for the foreseeable future. 13 SCANA CORPORATION Results of Operations For the Three and Six Months Ended June 30, 1996 As Compared to the Corresponding Periods in 1995 Earnings and Dividends Net income for the three and six months ended June 30, 1996 increased approximately $22.7 million and $40.3 million, respectively, when compared to the corresponding periods in 1995. The primary factors accounting for the improved earnings performance were higher electric margins and improved earnings at SPR which more than offset increases in operating expenses. SPR's net income for the three and six months ended June 30, 1996 increased by approximately $21.3 million and $27.4 million, respectively, when compared to the corresponding periods in 1995. A non-recurring after-tax gain of $5.7 million reported by SCI as a result of the business combination of Powertel PCS Partners and Intercel, Inc. in February 1996 is included in reported net income for the six months ended June 30, 1996. Allowance for funds used during construction (AFC) is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the balance sheet as construction work in progress) is capitalized. Both the equity and the debt portions of AFC are noncash items of nonoperating income which have the effect of increasing reported net income. AFC represented approximately 4% and 8% of income before income taxes for the six months ended June 30, 1996 and 1995, respectively. On February 20, 1996 the Company's Board of Directors declared a quarterly dividend on common stock of 36 3/4 cents per share, for the quarter ended March 31, 1996. The dividend was paid on April 1, 1996 to common stockholders of record on March 8, 1996. On April 25, 1996 the Company's Board of Directors declared a quarterly dividend on common stock of 36 3/4 cents per share for the quarter ended June 30, 1996. The dividend was paid on July 1, 1996 to common stockholders of record on June 10, 1996. Sales Margins The changes in the electric sales margins for the three and six months ended June 30, 1996, when compared to the corresponding periods in 1995, were as follows: Three Months Six Months Change % Change Change % Change (Millions) (Millions) Electric operating revenues $30.4 12.7 $61.9 13.2 Less: Fuel used in electric generation 12.4 22.9 18.0 17.0 Purchased power (2.7) (40.1) (1.6) (21.5) Margin $20.7 11.6 $45.5 12.8 The electric sales margins increased for the three and six months ended June 30, 1996, when compared to the corresponding periods in 1995 as a result of the combined impact of weather, the rate increase received by SCE&G in January 1996 and economic growth factors. 14 The changes in the gas sales margins for the three and six months ended June 30, 1996, when compared to the corresponding periods in 1995, were as follows: Three Months Six Months Change % Change Change % Change (Millions) (Millions) Gas operating revenues $ 9.0 12.6 $27.7 15.1 Less: Gas purchased for resale 9.5 21.2 30.2 27.4 Margin $(0.5) (2.0) $(2.5) (3.4) The decreases in the gas sales margins are primarily a result of higher gas costs and curtailments imposed on interruptible industrial customers as a result of abnormally cold weather in the first quarter of 1996. Other Operating Expenses Changes in other operating expenses, including taxes, for the three and six months ended June 30, 1996, when compared to the corresponding periods in 1995 are presented in the following table: Three Months Six Months Change % Change Change % Change (Millions) (Millions) Other operation and maintenance $ 2.7 3.6 $ 2.9 2.0 Depreciation and amortization 6.3 20.6 11.3 18.4 Income taxes 3.0 15.3 8.4 17.3 Other taxes 2.6 12.7 4.4 10.5 Total $14.6 10.1 $27.0 9.1 Other operation and maintenance expenses for the three and six months ended June 30, 1996 increased from 1995 levels primarily as a result of higher production costs attributable to the Cope Plant which was brought on line in January 1996. Increases in depreciation and amortization expenses for the three and six months comparisons reflect the addition of the Cope Plant and other additions to plant in service. The increases in income tax expense correspond to the increases in operating income. The increases in other taxes reflect higher property taxes resulting from property additions and higher millages and assessments. Other Income Other income, net of income taxes, for the three and six months ended June 30, 1996 increased $17.9 million and $25.8 million, respectively, when compared to the corresponding periods of 1995. The increases are due primarily to the improved earnings performance of SPR attributable to a noncash reserve adjustment recorded in the second quarter of 1995 and to higher gas prices and lower production costs. The gain reported by SCI, discussed under "Earnings and Dividends", is included in other income reported for the six months ended June 30, 1996. Interest Charges Interest expense, excluding the debt component of AFC, for the three and six months ended June 30, 1996 decreased $1.5 million and $2.2 million, respectively, when compared to the corresponding periods in 1995 primarily as a result of reductions in outstanding debt. 15 SCANA CORPORATION Part II OTHER INFORMATION Item 1. Legal Proceedings For information regarding legal proceedings see Note 2 "Rate Matters" and Note 4 "Commitments and Contingencies" of Notes to Consolidated Financial Statements. Items 2, 3 and 5 are not applicable. Item 4. Submission of Matters to a Vote of Security-Holders The Annual Meeting of the Shareholders of SCANA Common Stock (No Par Value) was held on April 25, 1996. The following matters were voted upon at the meeting. 1. To elect four (4) directors for the terms specified in the Proxy Statement. Number of Number of Shares Total Shares Voting Voting to Shares Nominee For Withhold Authority Voted Bill L. Amick 89,540,577 1,312,210 90,852,787 William T. Cassels, Jr. 89,513,004 1,339,783 90,852,787 Hugh M. Chapman 89,559,366 1,293,421 90,852,787 Lawrence M. Gressette, Jr. 89,520,147 1,332,640 90,852,787 2. To approve the appointment of Deloitte & Touche LLP as independent accountants for the Corporation Number of Shares FOR 90,171,750 AGAINST 322,892 ABSTAIN 358,145 TOTAL 90,852,787 Item 6. Exhibits and Reports on Form 8-K A. Exhibits Exhibits filed with this Quarterly Report on Form 10-Q are listed in the following Exhibit Index. Certain of such exhibits which have heretofore been filed with the Securities and Exchange Commission and which are designated by reference to their exhibit numbers in prior filings are hereby incorporated herein by reference and made a part hereof. B. Reports on Form 8-K None 16 SCANA CORPORATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SCANA CORPORATION (Registrant) August 13, 1996 By: s/K. B. Marsh K. B. Marsh, Vice President - Finance, Chief Financial Officer and Controller 17 SCANA CORPORATION EXHIBIT INDEX Sequentially Numbered Pages Number 2. Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession Not Applicable 3. Articles of Incorporation and By-Laws A. Restated Articles of Incorporation of SCANA Corporation as adopted on April 26, 1989 (Exhibit 3-A to Registration Statement No. 33-49145)........................................... # B. Articles of Amendment dated April 27, 1995 (Exhibit 4-B to Registration Statement No. 33-62421)............................................... # C. Copy of By-Laws of SCANA Corporation as revised and amended on June 18, 1996 (Filed herewith)........... 21 4. Instruments Defining the Rights of Security Holders, Including Indentures A. Articles of Exchange of South Carolina Electric & Gas Company and SCANA Corporation (Exhibit 4-A to Post-Effective Amendment No. 1 to Registration Statement No. 2-90438).................. # B. Indenture dated as of November 1, 1989 to The Bank of New York, Trustee (Exhibit 4-A to Registration No. 33-32107)........................... # C. Indenture dated as of January 1, 1945, from the South Carolina Power Company (the "Power Company") to Central Hanover Bank and Trust Company, as Trustee, as supplemented by three Supplemental Indentures dated respectively as of May 1, 1946, May 1, 1947 and July 1, 1949 (Exhibit 2-B to Registration No. 2-26459)............... # D. Fourth Supplemental Indenture dated as of April 1, 1950, to Indenture referred to in Exhibit 4C, pursuant to which the Company assumed said Indenture (Exhibit 2-C to Registration No. 2-26459)............................... # E. Fifth through Fifty-second Supplemental Indenture referred to in Exhibit 4C dated as of the dates indicated below and filed as exhibits to the Registration Statements and 1934 Act reports whose file numbers are set forth below......................................... # # Incorporated herein by reference as indicated. 18 SCANA CORPORATION EXHIBIT INDEX Number December 1, 1950 Exhibit 2-D to Registration No. 2-26459 July 1, 1951 Exhibit 2-E to Registration No. 2-26459 June 1, 1953 Exhibit 2-F to Registration No. 2-26459 June 1, 1955 Exhibit 2-G to Registration No. 2-26459 November 1, 1957 Exhibit 2-H to Registration No. 2-26459 September 1, 1958 Exhibit 2-I to Registration No. 2-26459 September 1, 1960 Exhibit 2-J to Registration No. 2-26459 June 1, 1961 Exhibit 2-K to Registration No. 2-26459 December 1, 1965 Exhibit 2-L to Registration No. 2-26459 June 1, 1966 Exhibit 2-M to Registration No. 2-26459 June 1, 1967 Exhibit 2-N to Registration No. 2-29693 September 1, 1968 Exhibit 4-O to Registration No. 2-31569 June 1, 1969 Exhibit 4-C to Registration No. 33-38580 December 1, 1969 Exhibit 4-Q to Registration No. 2-35388 June 1, 1970 Exhibit 4-R to Registration No. 2-37363 March 1, 1971 Exhibit 2-B-17 to Registration No. 2-40324 January 1, 1972 Exhibit 4-C to Registration No. 33-38580 July 1, 1974 Exhibit 2-A-19 to Registration No. 2-51291 May 1, 1975 Exhibit 4-C to Registration No. 33-38580 July 1, 1975 Exhibit 2-B-21 to Registration No. 2-53908 February 1, 1976 Exhibit 2-B-22 to Registration No. 2-55304 December 1, 1976 Exhibit 2-B-23 to Registration No. 2-57936 March 1, 1977 Exhibit 2-B-24 to Registration No. 2-58662 May 1, 1977 Exhibit 4-C to Registration No. 33-38580 February 1, 1978 Exhibit 4-C to Registration No. 33-38580 June 1, 1978 Exhibit 2-A-3 to Registration No. 2-61653 April 1, 1979 Exhibit 4-C to Registration No. 33-38580 June 1, 1979 Exhibit 4-C to Registration No. 33-38580 April 1, 1980 Exhibit 4-C to Registration No. 33-38580 June 1, 1980 Exhibit 4-C to Registration No. 33-38580 December 1, 1980 Exhibit 4-C to Registration No. 33-38580 April 1, 1981 Exhibit 4-D to Registration No. 33-49421 June 1, 1981 Exhibit 4-D to Registration No. 2-73321 March 1, 1982 Exhibit 4-D to Registration No. 33-49421 April 15, 1982 Exhibit 4-D to Registration No. 33-49421 May 1, 1982 Exhibit 4-D to Registration No. 33-49421 December 1, 1984 Exhibit 4-D to Registration No. 33-49421 December 1, 1985 Exhibit 4-D to Registration No. 33-49421 June 1, 1986 Exhibit 4-D to Registration No. 33-49421 February 1, 1987 Exhibit 4-D to Registration No. 33-49421 September 1, 1987 Exhibit 4-D to Registration No. 33-49421 January 1, 1989 Exhibit 4-D to Registration No. 33-49421 January 1, 1991 Exhibit 4-D to Registration No. 33-49421 February 1, 1991 Exhibit 4-D to Registration No. 33-49421 July 15, 1991 Exhibit 4-D to Registration No. 33-49421 # Incorporated herein by reference as indicated. 19 SCANA CORPORATION EXHIBIT INDEX Sequentially Numbered Pages Number August 15, 1991 Exhibit 4-D to Registration No. 33-49421 April 1, 1993 Exhibit 4-E to Registration No. 33-49421 July 1, 1993 Exhibit 4-D to Registration No. 33-57955 F. Indenture dated as of April 1, 1993 from South Carolina Electric & Gas Company to NationsBank of Georgia, National Association (Filed as Exhibit 4-F to Registration Statement No. 33-49421)........................................... # G. First Supplemental Indenture to Indenture referred to in Exhibit 4-F dated as of June 1, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-49421)........................................... # H. Second Supplemental Indenture to Indenture referred to in Exhibit 4-F dated as of June 15, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-57955)........................................... # 10. Material Contracts Not Applicable 11. Statement Re Computation of Per Share Earnings Not Applicable 15. Letter Re Unaudited Interim Financial Information Not Applicable 18. Letter Re Change in Accounting Principles Not Applicable 19. Report Furnished to Security Holders Not Applicable 22. Published Report Regarding Matters Submitted to Vote of Security Holders Not Applicable 23. Consents of Experts and Counsel Not Applicable 24. Power of Attorney Not Applicable 27. Financial Data Schedule (Filed herewith) 99. Additional Exhibits Not Applicable 20 EX-3 2 Exhibit 3-C BY-LAWS OF SCANA CORPORATION As Revised and Amended June 18, 1996 21 BY-LAWS OF SCANA CORPORATION As Revised and Amended June 18, 1996 ARTICLE I OFFICES Section 1. The principal office of the Corporation, which shall also be designated as its registered office, shall be located in the City of Columbia, County of Richland, State of South Carolina. Section 2. The Corporation may also have offices and places of business at such other places, within or without the State of South Carolina, as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II SEAL Section 1. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "South Carolina". If authorized by the Board of Directors, the corporate seal may be affixed to any certificates of stock, bonds, debentures, notes or other engraved, lithographed or printed instruments, by engraving, lithographing or printing thereon such seal or a facsimile thereof, and such seal or facsimile thereof so engraved, lithographed or printed thereon shall have the same force and effect, for all purposes, as if such corporate seal had been affixed thereto by indentation. ARTICLE III STOCKHOLDERS' MEETINGS Section 1. Written or printed notices for annual or special meetings of stockholders shall state the place, day and hour of such meetings and, in case of special meetings, the purpose or purposes for which the meetings are called. Section 2. Annual meetings of stockholders for the election of Directors and for the transaction of any other business permitted by law to be transacted at the annual meeting of stockholders, and all special meetings of stockholders, for that or for any other purpose, shall be held at such time and place as shall be stated in a notice thereof. Annual meetings of stockholders shall be held on the last Thursday in April of each year, if not a legal holiday, and if a legal holiday, then on the next business day following, when they shall elect members of the Board of Directors in accordance with the provisions of the Corporation's Articles of Incorporation and transact such other business as may properly be brought before the meeting. Special meetings shall be held on such day and hour as shall be stated in 22 the notice of each meeting, or in a duly executed waiver of notice thereof. All meetings of stockholders shall be presided over by the Chairman of the Board, the Vice Chairman of the Board, if any, or, if there be none, or in his absence, by the President or a Vice President. Section 3. Except as otherwise provided by law, by the Articles of Incorporation as the same may be amended from time to time, or by these By-Laws as they may be amended from time to time, the holders of a majority of the shares of stock of the Corporation issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at any meeting of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at such meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power, by a majority vote of those present, to adjourn the meeting from time to time without notice (unless otherwise provided in Section 8 of this Article III) other than by announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which may have been transacted at the meeting as originally noticed provided notice of such adjourned meeting, when required by Section 8 of this Article III, shall have been given or waived. Section 4. At each meeting of the stockholders each stockholder having the right to vote shall be entitled to vote in person, or by proxy appointed by written or printed instrument executed by such stockholder or by his duly authorized attorney or by telegram or cablegram appearing to have been transmitted by such stockholder but, except as otherwise provided by statute, no proxy shall be valid after expiration of eleven months from the date of its execution. Every proxy shall be dated as of its execution and no proxy shall be undated or postdated. Every holder of record of stock having voting power shall be entitled to one vote for every share of stock standing in his name on the books of the Corporation. The vote for directors and, upon the demand of any stockholder or his duly authorized proxy, the vote upon any question before the meeting shall be by ballot. All elections shall be decided by a plurality of the votes cast by the holders of the shares entitled to vote at the meeting of stockholders and, except as otherwise provided by statute or by the Articles of Incorporation, all other questions shall be decided by a majority of the votes cast by holders of shares entitled to vote on such question at such meeting. 23 Section 5. The Secretary or the agent of the Corporation having charge of its stock transfer books shall, in advance of each meeting of stockholders, prepare a complete list of the stockholders entitled to vote at such meeting of stockholders or adjournment thereof, which list shall be arranged in alphabetical order with the address of and the number of shares held by each stockholder. Unless the record of stockholders kept by the Secretary or agent of the Corporation having charge of its stock transfer books readily shows, in alphabetical order or by alphabetical index, the information required to appear on such a list of stockholders, such list of stockholders shall, for a period commencing upon the date when notice of such meeting is given, and in no event less than 10 days prior to the date of such meeting, be kept on file at the registered office of the Corporation or at its principal place of business or at the office of its transfer agent or registrar, and shall be subject to inspection by any stockholder at any time during usual business hours. In any event, such list shall be produced and kept open at the time and place of such meeting and shall be subject to the inspection of any stockholder during the whole time of such meeting. Section 6. Special meetings of the stockholders for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board, by the Vice Chairman of the Board or by the President, and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of holders of ten per cent or more of the shares of stock of the Corporation issued and outstanding and entitled to vote at the proposed meeting. Such request shall state the purpose or purposes of the proposed meeting. Section 7. Business transacted at all special meetings shall be confined to the objects stated in the call; provided, however, that if all the stockholders of the Corporation entitled to vote shall be present in person or by proxy, any business pertaining to the affairs of the Corporation may be transacted. Section 8. Notice of annual meetings of stockholders and notice of any special meeting of stockholders for the election of directors or for any other purpose, unless otherwise provided by statute, shall be delivered personally or mailed, not less than ten nor more than fifty days before the meeting, to each person who appears on the books of the Corporation as a stockholder entitled to vote at said meeting. In the event of the adjournment of any meeting of stockholders, for whatever reason, for 30 days or more, notice of the adjourned meeting shall be delivered personally or mailed not less than ten nor more than fifty days before the date for such adjourned meeting to each person whose name appears on the books of the Corporation as a stockholder entitled to vote at said 24 adjourned meeting. Any such notice may be either written or printed, or partly written and partly printed, and if mailed it shall be directed to the stockholder at his address as it appears on the books of the Corporation. Such notice shall briefly state the business which it is proposed to present or to submit to such meeting. ARTICLE IV DIRECTORS Section 1. The property and business of the Corporation shall be managed by its Board of Directors. The number of directors which shall constitute the entire Board of Directors shall be fixed from time to time by the vote of a majority of the entire Board, but such number shall in no case be less than nine nor more than twenty. Each director shall own at least 100 shares of Common Stock of the Corporation. Except as otherwise provided by statute or in the Articles of Incorporation, the term of each director heretofore or hereafter elected shall be from the time of his election and qualification until the third annual meeting following his election and until his successor shall have been duly elected and shall have qualified. The vote of at least 80% of the shares of stock of the Corporation entitled to vote shall be required to remove an incumbent member of the Board of Directors except for cause. "For Cause" shall mean fraudulent or dishonest acts, or gross abuse of authority in discharge of duties to the Corporation and shall be established after written notice of specific charges and opportunity to meet and refute such charges. Section 2. In addition to the powers and authorities by these By-Laws expressly conferred upon them, the Board may exercise all such power of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. A director or officer of this Corporation shall not be disqualified by his office from dealing or contracting with the Corporation either as a vendor, purchaser or otherwise, nor shall any transaction or contract of this Corporation be void or voidable solely by reason of the fact that any director or officer or any firm of which any director or officer is a member or employee, or any corporation of which any director or officer is a shareholder, director, officer or employee, is in any way interested in such transaction or contract, provided that the material facts as to such interest and as to such transaction or contract are disclosed or known to the Board of Directors or the Executive Committee and noted in their respective minutes, or to the stockholders entitled to vote with respect thereto, as the case may be, and that such transaction or contract is or shall be authorized, ratified or approved either (1) by the vote of a 25 majority of a quorum of the Board of Directors or of the Executive Committee, or (2) by a majority of the votes cast by holders of shares of stock entitled to vote with respect thereto, without counting (except for quorum purposes) the vote of or shares held or controlled and voted by, as the case may be, any director so interested or member or employee of a firm so interested or a shareholder, director, officer or employee of a corporation so interested; nor shall any director or officer be liable to account to the Corporation for any profits realized by and from or through any such transaction, or contract of this Corporation authorized, ratified or approved as aforesaid by reason of the fact that he or any firm of which he is a member or employee, or any corporation of which he is a shareholder, director, officer or employee was interested in such transaction or contract. ARTICLE V MEETINGS OF THE BOARD Section 1. Within 10 days following the annual meeting of stockholders for the election of directors, the Chief Executive Officer shall call a meeting of the newly elected Board for the purpose of organization, election of officers and transaction of other business, such meeting to be held at such time, not later than 15 days after such annual meeting of stockholders, and place as shall be specified by the Chief Executive Officer. The Secretary or other officer performing his duties shall give notice, either personally or by mail or telegram, to each director not less than four business days before the meeting, provided, however, that no notice of such meeting need be given if all of the directors are present or if those not present sign waivers of notice either before or after the meeting. In the event that the Chief Executive Officer shall fail to call such meeting within 10 days after such annual meeting of stockholders, as aforesaid, the newly elected Board shall meet at the registered office of the Corporation, in Columbia, South Carolina, at 2:00 p.m. Columbia, South Carolina time, on the fifteenth day following such annual meeting of stockholders, if not a legal holiday, and if a legal holiday then on the next business day following. Section 2. Regular meetings of the Board may be held without notice at such time and place as shall from time to time be designated by the Board. Section 3. Special meetings of the Board may be called by the Chairman of the Board, the Vice Chairman of the Board or the President or any two directors and may be held at the time and place designated in the call and notice of the meeting. The Secretary or other officer performing his duties shall give notice either personally or by mail or telegram not less than twenty-four hours before the meeting. Meetings may be held at any time and place without notice if all the directors are present or if those not present sign waivers of notice either before or after the meeting. 26 Section 4. At all meetings of the Board a majority of the total number of directors then in office shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Articles of Incorporation or by these By-Laws. Section 5. Any regular or special meeting of the Board may be adjourned to any other time at the same or any other place by a majority of the directors present at the meeting, whether or not a quorum shall be present at such meeting, and no notice of the adjourned meeting shall be required other than announcement at the meeting. Section 6. Directors, other than those who are salaried officers or employees of the Corporation or of any affiliated Company, shall receive compensation for their services as directors at an annual rate as shall be set from time to time by resolution of the Board of Directors, payable in quarterly installments at the beginning of each quarter of the calendar year and, in addition thereto, each such director shall receive such compensation for each meeting of the Board, or of any committee of the Board, which he shall have attended, as shall be set by resolution of the Board of Directors, such additional compensation to be paid as soon as practicable after the date of such meeting. All directors shall be reimbursed for their reasonable expenses of attendance, if any, at each regular or special meeting of the Board of Directors. Section 7. Directors who are salaried officers or employees of the Corporation or of any affiliated Company and who are members of the Executive Committee shall receive no compensation for their services as such members in addition to such compensation as may be paid to them as officers or directors, but shall be reimbursed for their reasonable expenses, if any, in attending meetings of the Executive Committee, or otherwise performing their duties as members of the Executive Committee. ARTICLE VI EXECUTIVE AND OTHER COMMITTEES Section 1. The Board of Directors may, by vote of a majority of the full Board, designate three or more of their number to constitute an Executive Committee, to hold office for one year and until their respective successors shall be designated. Such Executive Committee shall advise with and aid the officers of the Corporation in all matters concerning its interests and the management of its business, and shall, between sessions of the Board, except as otherwise provided by law, have all the powers of 27 the Board of Directors in the management of the business and affairs of the Corporation, and shall have power to authorize the seal of the Corporation to be affixed to all papers which may require it. The taking of any action by the Executive Committee shall be conclusive evidence that the Board of Directors was not in session at the time of such action. The Board of Directors may, by vote of a majority of the full Board, appoint from among their number, one or more additional committees, consisting of three or more directors, which shall have such powers and duties as may be fixed by the resolution of the Board of Directors appointing such Committee. Section 2. The Executive Committee shall cause to be kept regular minutes of its proceedings, which may be transcribed in the regular minute book of the Corporation, and all such proceedings shall be reported to the Board of Directors at its next succeeding meeting, and shall be subject to revision or alteration by the Board, provided that no rights of third persons shall be affected by such revision or alteration. A majority of the Executive Committee shall constitute a quorum at any meeting. The Executive Committee may take action without a meeting on the written approval of such action by all the members of the Committee. The Board of Directors may by vote of a majority of the full Board fill any vacancies in the Executive Committee. The Executive Committee may, from time to time, subject to the approval of the Board of Directors, prescribe rules and regulations for the calling and conduct of meetings of the Committee, and other matters relating to its procedure and the exercise of its powers. Section 3. Other committees appointed by the Board shall cause to be kept regular minutes of their proceedings and in general the provisions as to procedure for such committees shall be that set forth above with respect to the Executive Committee. ARTICLE VII OFFICERS Section 1. The officers of the Corporation shall be elected by the Board of Directors. They shall include a President, one or more Vice Presidents, a Secretary, a Treasurer and a Controller and may include a Chairman of the Board and a Vice Chairman of the Board. In the event there shall be a Chairman of the Board and a Vice Chairman of the Board, the Board of Directors shall designate whether the Chairman of the Board, the Vice Chairman of the Board or the President shall be the Chief Executive Officer of the Corporation. If there shall be no Chairman of the Board or Vice Chairman of the Board, the President shall be the Chief Executive Officer of the Corporation. Any two or more of such offices except those of Treasurer and Controller may be occupied by the same person; provided, however, the same person may not act in more than one capacity where action by two or more officers is required. 28 Section 2. The Board of Directors, at its first meeting after the election of directors by the stockholders, shall elect from among its members, if it deems proper, a Chairman of the Board and a Vice Chairman of the Board. It shall also elect a President and one or more Vice Presidents, a Secretary, a Treasurer and a Controller, none of whom need be members of the Board. The Board of Directors, at any meeting, may elect such additional Vice Presidents, and such Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers, as it shall deem necessary, none of whom need be members of the Board. Section 3. The Board of Directors, at any meeting, may elect or appoint such other officers and agents as it shall deem necessary. The tenure and duties of such officers and agents shall be fixed by the Board of Directors or, in the absence of any action by the Board of Directors so fixing such tenure and duties, the tenure and duties shall be fixed by the Chief Executive Officer of the Corporation, or by such officers or department heads to whom he shall delegate such authority. Section 4. The salaries and compensation of the officers of the Corporation and of agents of the Corporation appointed by the Board shall be fixed by the Board of Directors. The salaries and compensation of all other employees of the Corporation shall, in the absence of any action by the Board of Directors, be fixed by the Chief Executive Officer of the Corporation. Section 5. The officers of the Corporation elected pursuant to Section 2 of this Article VII shall hold office until the first meeting of the Board of Directors after the next succeeding annual meeting of stockholders and until their successors are elected and qualify in their stead. The Chief Executive Officer may be removed at any time, with or without cause, by the affirmative vote of a majority of the total number of directors then in office. Any other officer or employee of the Corporation may be removed at any time, with or without cause, either (a) by vote of a majority of the directors present at any meeting of the Board of Directors at which a quorum is present, or (b) by vote of a majority of the members of the Executive Committee, or (c) by the Chief Executive Officer of the Corporation or by any officer who shall be exercising the powers of the Chief Executive Officer of the Corporation, or by any superior of such employee to whom such power of removal shall be delegated by the Chief Executive Officer of the Corporation or the officer exercising the powers of the Chief Executive Officers of the Corporation. 29 ARTICLE VIII CHIEF EXECUTIVE OFFICER Section 1. The Chief Executive Officer of the Corporation shall supervise, direct and control the conduct of the business of the Corporation subject, however, to the general policies determined by the Board of Directors and the Executive Committee, if there be one. He shall be a member of the Executive Committee and all committees appointed by the Board of Directors, except the Audit Committee and the Long-Term Compensation Committee and any committee or subcommittee making recommendations of performance awards in shares of Company stock, shall have the general powers and duties usually vested in the chief executive officer of a corporation, and shall have such other powers and perform such other duties as may be prescribed from time to time by law, by the By-Laws or by the Board of Directors. He shall, whenever it may in his opinion be necessary, prescribe the duties of officers and employees of the Corporation whose duties are not otherwise defined. He shall have power to remove at any time, with or without cause, any employee or officer of the Corporation. He may, in accordance with Section 5 of Article VII of these By-Laws, delegate such power of removal. ARTICLE IX CHAIRMAN OF THE BOARD Section 1. The Chairman of the Board, if there be one, shall preside at all meetings of the Board of Directors and of the stockholders, except when by statute the election of a presiding officer shall be required. He shall, if designated Chief Executive Officer pursuant to Section 1 of Article VII of these By-Laws, have all the powers and duties granted and delegated to the Chief Executive Officer by Section 1 of Article VIII of these By-Laws. In such event he may sign in the name of and on behalf of the Corporation any and all contracts, agreements or other instruments pertaining to matters which arise in the ordinary course of business of the Corporation and, if authorized by the Board of Directors or the Executive Committee, may sign in the name of and on behalf of the Corporation any other contracts, agreements or instruments of any nature pertaining to the business of the Corporation. He shall have such other powers and perform such other duties as may be prescribed from time to time by law, by the By-Laws or by the Board of Directors. 30 ARTICLE X THE VICE CHAIRMAN OF THE BOARD Section 1. The Vice Chairman of the Board shall, in the absence of the Chairman, preside at all meetings of the Board of Directors and of the stockholders, except when by statute the election of a presiding officer shall be required. He shall, if designated Chief Executive Officer pursuant to Section 1 of Article VII of these By-Laws, have all the powers and duties granted and delegated to the Chief Executive Officer by Section 1 of Article VIII of these By-Laws. In such event he may sign in the name of and on behalf of the Corporation any and all contracts, agreements or other instruments pertaining to matters which arise in the ordinary course of business of the Corporation and, if authorized by the Board of Directors or the Executive Committee, may sign in the name of and on behalf of the Corporation any other contracts, agreements or instruments of any nature pertaining to the business of the Corporation. He shall have such other powers and perform such other duties as may be prescribed from time to time by law, by the By-Laws or by the Board of Directors. ARTICLE XI THE PRESIDENT Section 1. The President shall, in the absence of the Chairman of the Board or the Vice Chairman of the Board, preside at all meetings of the Board of Directors and of the stockholders, except when by statute the election of a presiding officer shall be required. He shall, if designated Chief Executive Officer of the Corporation pursuant to Section 1 of Article VII of these By-Laws, have all the powers and duties granted and delegated to the Chief Executive Officer by Section 1 of Article VIII of these By-Laws. In the event there shall be a Chairman of the Board or a Vice Chairman of the Board who shall have been designated as Chief Executive Officer of the Corporation pursuant to Section 1 of Article VII of these By-Laws, then the President shall have such powers and duties as may be assigned to him by the Chairman of the Board or the Vice Chairman of the Board of Directors. In the absence or disability of the Chairman of the Board or the Vice Chairman of the Board, he shall have all the powers and duties of the Chairman of the Board or the Vice Chairman of the Board. 31 He may sign in the name of and on behalf of the Corporation any and all contracts, agreements or other instruments pertaining to matters which arise in the ordinary course of business of the Corporation and, if authorized by the Board of Directors or the Executive Committee, may sign in the name of and on behalf of the Corporation any other contracts, agreements or instruments of any nature pertaining to the business of the Corporation. He shall have such other powers and perform such other duties as may be prescribed from time to time by law, by the By-Laws or by the Board of Directors. ARTICLE XII THE VICE PRESIDENT Section 1. The Vice President shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors may prescribe. The Vice President may sign in the name of and on behalf of the Corporation contracts, agreements, or other instruments pertaining to matters which arise in the ordinary course of business of the Corporation, except in cases where the signing thereof shall be expressly delegated by the Board of Directors or the Executive Committee to some other officer or agent of the Corporation. If authorized by the Board of Directors or the Executive Committee, he may sign in the name of and on behalf of the Corporation any other contracts, agreements or instruments of any nature pertaining to the business of the Corporation. He shall have such other powers and perform such other duties as may be prescribed from time to time by law, by the By-Laws or by the Board of Directors. If there be more than one Vice President, the Board of Directors or the Chief Executive Officer of the Corporation shall assign to such Vice Presidents their respective duties. ARTICLE XIII THE SECRETARY Section 1. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for the committees appointed by the Board of Directors when required. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or Chief Executive Officer, under whose supervision he shall be. He shall be sworn to the faithful discharge of his duty. Any records kept by him shall be 32 the property of the Corporation and shall be restored to the Corporation in case of his death, resignation, retirement or removal from office. He or his agent shall be the custodian of the seal of the Corporation, the stock ledger, stock certificate book and minute books of the Corporation, and its committees, and other formal records and documents relating to the corporate affairs of the Corporation. Section 2. The Assistant Secretary or Assistant Secretaries shall assist the Secretary in the performance of his duties, exercise and perform his powers and duties, in his absence or disability, and such other powers and duties as may be conferred or required by the Board. ARTICLE XIV THE TREASURER Section 1. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors or as may be designated by persons to whom the Board of Directors delegates such authority. He shall disburse the funds of the Corporation in such manner as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation. He shall give the Corporation a bond if required by the Board of Directors in a sum, and with one or more sureties satisfactory to the Board, for the faithful performance of the duties of his office, and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. Section 2. The Assistant Treasurer or Assistant Treasurers shall assist the Treasurer in the performance of his duties, exercise and perform his powers and duties, in his absence or disability, and such other powers and duties as may be conferred or required by the Board. 33 ARTICLE XV THE CONTROLLER Section 1. The controller of the Corporation shall be the principal accounting officer of the Corporation. He shall have full control of all the books of the Corporation and keep a true and accurate record of all property owned by it, of its debts and of its revenues and expenses, and shall keep all accounting records of the Corporation other than the record of receipts and disbursements and those relating to deposit or custody of money and securities of the Corporation, which shall be kept by the Treasurer, and shall also make reports to the directors and others of or relating to the financial condition of the Corporation. He shall exhibit at all reasonable times his books of account and records to any director of the Corporation upon application during business hours at the office of the Corporation where such books of accounts and records are kept. He shall perform all duties generally incident to the office of Controller and shall have such other powers and duties as, from time to time, may be prescribed by law, by the By-Laws, or by the Board of Directors. Section 2. The Assistant Controller or Assistant Controllers shall assist the Controller in the performance of his duties, exercise and perform his powers and duties, in his absence or disability, and such other powers and duties as may be conferred or required by the Board of Directors. ARTICLE XVI VACANCIES Section 1. Except as otherwise provided by statute or in the Articles of Incorporation, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or any other cause shall be filled only by the Board of Directors then in office, although less than a quorum. A Director elected to fill a vacancy shall hold office until the next stockholders' meeting at which Directors of any class are elected. If the office of any officer of the Corporation shall become vacant for any reason, the Board of Directors, by a majority vote of those present at any meeting at which a quorum is present, may elect a successor or successors, who shall hold office for the unexpired term in respect of which such vacancy occurred. 34 ARTICLE XVII RESIGNATIONS Section 1. Any officer or any director of the Corporation may resign at any time, such resignation to be made in writing and to take effect from the time of its receipt by the Corporation, unless some time be fixed in the resignation, and then from that time. The acceptance of a resignation shall not be required to make it effective. A vacancy shall be deemed to exist upon receipt by the Corporation of such written resignation, and a successor may, then or thereafter, be elected to take office when such resignation becomes effective. ARTICLE XVIII DUTIES OF OFFICERS MAY BE DELEGATED Section 1. In case of the absence of any officer of the Corporation, or for any other reason the Board may deem sufficient, the Board may delegate, for the time being, the powers or duties, or any of them, of such officers to any other officer or to any director. ARTICLE XIX STOCK OF OTHER CORPORATIONS Section 1. The Board of Directors shall have the right to authorize any officer or other person on behalf of the Corporation to attend, act and vote at meetings, of the stockholders of any corporation in which the Corporation shall hold stock, and to exercise thereat any and all the rights and powers incident to the ownership of such stock and to execute waivers of notice of such meetings and calls therefor; and authority may be given to exercise the same either on one or more designated occasions, or generally on all occasions until revoked by the Board. In the event that the Board shall fail to give such authority it may be exercised by the Chief Executive Officer of the Corporation in person or by proxy appointed by him on behalf of the Corporation. ARTICLE XX CERTIFICATES OF STOCK Section 1. The certificates of stock of the Corporation shall be entered in the books of the Corporation as they are issued. No fractional shares of stock shall be issued. Certificates of stock shall be signed by the President or a Vice President and by the Secretary, or an Assistant Secretary, and the seal of the Corporation shall be affixed thereto. Such seal may be facsimile, engraved or printed. Where any certificate of stock is signed by a transfer agent or transfer clerk or by a registrar, the signatures of any such President, Vice President, Secretary or Assistant Secretary, upon such stock certificate may be facsimiles, engraved or printed. In case any such officer who has signed, or 35 whose facsimile signature has been placed upon, such certificate of stock, shall have ceased to be such officer before such certificate of stock is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to be such at the date of its issue. ARTICLE XXI TRANSFERS OF STOCK Section 1. Transfer of stock shall be made on the books of the Corporation only by the person named in the certificate or by attorney, lawfully constituted in writing, and upon surrender of the certificate therefor. ARTICLE XXII FIXING OF RECORD DATE Section 1. The Board of Directors is hereby authorized to fix a time, not less than ten (10) days nor more than fifty (50) days preceding the date of any meeting of stockholders or the date fixed for the payment of any dividend or the making of any distribution, or for the delivery of evidences of rights or evidences of interests arising out of any change, conversion or exchange of shares of stock, as a record date for the determination of the stockholders entitled to notice of and to vote at such meeting or entitled to receive any such dividend, distribution, rights or interest, as the case may be; and all persons who are holders of record of shares of stock at the date so fixed and no others, shall be entitled to notice of and to vote at such meeting, and only stockholders of record at such date shall be entitled to receive any such notice, dividend, distribution, rights or interests; and the stock transfer books shall not be closed during any such period. ARTICLE XXIII REGISTERED STOCKHOLDERS Section 1. The Corporation shall be entitled to treat the holders of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the statutes of the State of South Carolina. ARTICLE XXIV LOST CERTIFICATES Section 1. Whenever any stockholder shall desire a new certificate of stock to replace an original certificate of stock which has been lost, destroyed or wrongfully taken, he shall make application to the Corporation for the issuance of a new 36 certificate or certificates in replacement of the certificate or certificates which were lost, destroyed or wrongfully taken, and shall file with the Corporation a good and sufficient indemnity bond, together with an affidavit stating that the applicant is the bona fide owner of such share(s) of stock and specifying the number(s) of the certificate or certificates which were lost, destroyed or wrongfully taken, the particular circumstances of such loss, destruction or wrongful taking (including a statement that the share(s) represented by such certificate or certificates has or have not been transferred or otherwise disposed of by such applicant in any manner.) Upon completion by a stockholder of the requirements set forth in the preceding paragraph, the Corporation shall issue a certificate or certificates in replacement of the certificate or certificates referred to in such stockholder's application if such application is received by the Corporation before it has notice that such certificate or certificates has or have been acquired by a bona fide purchaser. ARTICLE XXV INSPECTION OF BOOKS Section 1. The Board of Directors shall have power to determine whether and to what extent, and at what time and places and under what conditions and regulations, the accounts and books of the Corporation (other than the books required by statute to be open to the inspection of stockholders), or any of them, shall be open to the inspection of stockholders, and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as such right may be conferred by the statutes of the State of South Carolina or by resolution of the directors or of the stockholders. ARTICLE XXVI CHECKS, NOTES, BONDS AND OTHER INSTRUMENTS Section 1. All checks or demands for money and notes of the Corporation shall be signed by such person or persons (who may but need not be an officer or officers of the Corporation) as the Board of Directors may from time to time designate or as may be designated by persons to whom the Board of Directors delegates such authority. The Board of Directors shall have authority to make provision, with proper safeguards, for the signatures to appear on all checks, including, but not by way of limitation, payroll checks, to be made by facsimile, whether engraved or printed. Whenever the seal of this Corporation is to be affixed to any instrument being executed on behalf of this Corporation, such seal shall be affixed thereto by the Secretary or an Assistant Secretary and the fact of such affixation shall be attested to by the person so affixing the seal. 37 ARTICLE XXVII RECEIPT FOR SECURITIES Section 1. All receipts for stocks, bonds or other securities received by the Corporation shall be signed by the Treasurer or an Assistant Treasurer, or by such other person or persons as the Board of Directors or Executive Committee shall designate. ARTICLE XXVIII FISCAL YEAR Section 1. The fiscal year shall begin the first day of January in each year. ARTICLE XXIX RESERVES Section 1. The Board of Directors shall have power to fix and determine, and from time to time to vary, the amount to be reserved as working capital; to determine whether any, or if any, what part of any, surplus shall be declared and paid as dividends, to determine the date or dates for the declaration or payment of dividends and to direct and determine the use and disposition of any surplus, and before payment of any dividend or making any distribution of surplus there may be set aside out of the surplus of the Corporation such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation. ARTICLE XXX NOTICES Section 1. In addition to the telegraphic notice permitted by Section 3 of Article V of these By-Laws, whenever under the provisions of these By-Laws notice is required to be given to any director, officer or stockholder, it shall not be construed to require personal notice, but such notice may be given in writing, by mail, by depositing a copy of the same in a post office, letter box or mail chute, maintained by the Post Office Department, in a postpaid sealed wrapper, addressed to such stockholder, officer or director, at his address as the same appears on the books of the Corporation. A stockholder, director or officer may waive any notice required to be given to him under these By-Laws. 38 ARTICLE XXXI INSPECTORS OF ELECTION Section 1. Prior to every meeting of the stockholders the Board of Directors may appoint any odd number of inspectors of election to act as inspectors at such meeting. In the event that inspectors shall not be so appointed, they shall be appointed by the person presiding at such meeting and if any inspector shall refuse to serve, or neglect to attend such meeting or his office becomes vacant, the person presiding at the meeting may appoint another inspector in his place. The inspectors appointed to act at any meeting of the stockholders shall, before entering upon the discharge of their duties, be sworn faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of their ability. ARTICLE XXXII DIRECTOR, OFFICER AND EMPLOYEE INDEMNIFICATION Section 1. The Corporation shall indemnify any and all of its employees, officers, or directors, or former officers or directors (including their heirs, executors, and administrators), or any person who may have served at its request or by its election, designation, or request as a member, agent, employee, director or officer of any other corporation or partner, trustee or otherwise, of any organization against expenses actually and necessarily incurred by them in connection with the defense or settlement of any action, suit or proceeding (which shall include any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or arbitrative) in which they, or any of them, are made parties, or a party, by reason of being or having been agents, employees, directors or officers of the Corporation, or of such other organization, except in relation to matters as to which any such agent, employee, director or officer or former employee, director or officer or person shall be adjudged in such action, suit or proceeding to be liable for willful misconduct in the performance of duty and to such matters, as shall be settled by agreement predicated on the existence of such liability. Such indemnity shall be in accordance with a written plan adopted by the Board of Directors, which plan shall be in accordance with the law of South Carolina. The indemnification provided hereby shall not be deemed exclusive of any other right to which anyone seeking indemnification hereunder may be entitled under any By-Law, agreement, or otherwise. The Corporation may purchase and maintain insurance on the behalf of any director, officer, agent, employee or former employee, director or officer or other person, against any liability asserted against them and incurred by them. 39 ARTICLE XXXIII AMENDMENTS Section 1. Except as otherwise provided in Section 2 below, any of these By-Laws may be altered, amended or repealed, and/or one or more By-Laws may be adopted, at a meeting of the stockholders, by a vote of the holders of a majority of all shares of stock entitled to vote to elect directors who are entitled to vote at such meeting, provided that written notice of such proposed alteration, amendment, repeal and/or adoption, as the case may be, shall have been given to all such stockholders at least ten days before such meeting. Any of these By-Laws may also be altered, amended or repealed, and/or one or more new By-Laws may be adopted, by the vote of a majority of all directors then in office, at a meeting of the Board of Directors, provided that the notice of such meeting includes therein notice of such alteration, amendment, repeal and/or adoption, as the case may be. At a meeting thereof, the stockholders, by the vote of the holders of a majority of all shares of stock entitled to vote to elect directors who are entitled to vote at such meeting, may repeal any alteration or amendment of these By-Laws made by the Board of Directors and/or reinstate any of these By-Laws repealed by the Board of Directors, and/or repeal any new By-Law adopted by the Board of Directors. Section 2. Notwithstanding the provisions of Section 1 above, any alteration, amendment or repeal by the stockholders of Section 1 of Article IV, Section 1 of Article XVI or this Section 2 of Article XXXIII of these By-Laws, or the adoption by the stockholders of any new By-Law inconsistent with any of such Sections, shall require the vote of the holders of at least 80% of all shares of stock entitled to vote to elect directors who are entitled to vote at such meeting. 40 EX-27 3
UT THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND THE CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS AND OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY FOR SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1995 JUN-30-1996 PER-BOOK 3,452,375 334,108 401,556 417,859 0 4,605,898 1,093,497 0 528,192 1,621,689 44,260 26,027 1,548,012 131,245 0 0 98,202 2,435 0 0 1,134,028 4,605,898 350,386 22,766 261,173 283,939 66,447 4,157 70,604 30,936 39,668 (1,368) 38,300 38,578 0 177,051 0.37 0
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