SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 2, 1997
THE LOEWEN GROUP INC.
(Exact name of registrant as specified in its charter)
British Columbia, 1-12163 98-0121376
Canada (Commission File (IRS Employer
(State or other Number) Identification No.)
jurisdiction of
incorporation)
4126 Norland Avenue, Burnaby, British Columbia, Canada V5G 3S8
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 604-299-9321
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
The Loewen Group Inc., a corporation organized under
the laws of British Columbia, Canada ("Loewen"), is filing this
Current Report on Form 8-K solely for the purpose of updating the
description of its Common shares without par value ("Common
Shares"), contained in the Registration Statement on Form 20-F
filed by Loewen on March 30, 1990 (File No. 0-18429).
The following description does not purport to be
complete and is qualified in its entirety by reference to
Loewen's Altered Memorandum and Articles, as amended (the
"Charter Documents"), and Shareholder Protection Rights Plan
Agreement, as amended (the "Rights Plan"), contained in the
exhibits hereto.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital of Loewen consists of
990,000,000 shares without par value divided into 750,000,000
Common Shares, 40,000,000 Class A shares without par value
("Class A Shares"), and 200,000,000 First Preferred Shares
without par value ("First Preferred Shares").
COMMON SHARES
Each Common Share carries one vote on a poll (ballot)
at all meetings of shareholders, participates equally in any
dividend declared by the Board of Directors on such shares
(subject to the dividend priority of any First Preferred Shares)
and carries the right to receive (after the return of capital and
accrued but unpaid dividends on any First Preferred Shares) a
proportionate share of the assets of Loewen available for
distribution in the event of a liquidation. The Common Shares
and the Class A shares rank equally as to dividends and
distribution on winding up. See "_Class A Shares."
Holders of Common Shares have no conversion, redemption
or preemptive rights relating, and no sinking fund provisions are
applicable, to such shares. All of the currently outstanding
Common Shares are fully paid and nonassessable. The rights
attaching to the Common Shares may not be modified unless
authorized by three fourths of the votes cast by the Common
Shares at a meeting of the shareholders.
CLASS A SHARES
The Class A shares, which rank pari passu with the
Common Shares, were created in connection with the issuance of
warrants to the purchasers of certain subordinated debentures
issued by Loewen. All of the warrants to acquire Class A shares
were exercised by the debenture holders when Loewen made its
initial public offering, and all of the issued Class A shares
have
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been converted into Common Shares. Loewen has no current
intention to issue any Class A Shares.
FIRST PREFERRED SHARES
First Preferred Shares may be issued from time to time
in one or more series and in such numbers and with such special
rights and restrictions attached to each series as the Board of
Directors of Loewen determines. The First Preferred Shares, as a
class, are entitled to preference over the Common Shares and
shares of any other class ranking junior to the First Preferred
Shares with respect to the payment of dividends or the
distribution of assets in the event of the liquidation,
dissolution or winding up of Loewen, whether voluntary or
involuntary, or in the event of any other distribution of assets
of Loewen among its shareholders for the purpose of winding up
its affairs (a "Liquidation"). In the event of non-payment of
the full amount of dividends payable or any other amount payable
on winding up or other return of capital, the First Preferred
Shares of each series will participate ratably with the First
Preferred Shares of every other series in accordance with the
respective amounts payable.
SERIES A PREFERRED SHARES
In March 1988, the Board of Directors of Loewen
designated 1,000,000 First Preferred Shares as 7.75% Cumulative
Redeemable Convertible First Preferred Shares, Series A ("Series
A Preferred Shares"), all of which shares were issued on March
30, 1988. On or prior to May 29, 1990, all of the Series A
Preferred Shares were converted to Common Shares. Loewen has no
current intention to issue any Series A Preferred Shares.
SERIES B PREFERRED SHARES
In June 1994, in connection with the 1994 Management
Equity Investment Plan (the "MEIP"), the Board of Directors of
Loewen designated 425,000 First Preferred Shares as Series B
Preferred Shares. As of the date hereof, no Series B Preferred
Shares have been issued. Each Series B Preferred Share will be
convertible into 10 Common Shares at any time before July 15,
2011. As and when cash dividends are declared on the Common
Shares, the holders of Series B Preferred Shares are entitled to
equivalent cash dividends in proportion to the conversion basis.
The Series B Preferred Shares are non-voting.
Participants in the MEIP were issued investment options
("Investment Options") to acquire debentures of LGII ("MEIP
Debentures"). In connection therewith, Loewen entered into an
exchange acknowledgment dated as of June 14, 1994, pursuant to
which Loewen will issue Series B Preferred Shares to participants
in the MEIP in exchange for their MEIP Debentures. Participants
in the MEIP have undertaken that, immediately upon exercising
their Investment Options, they will exchange the MEIP Debentures
acquired thereby for Series B Preferred Shares. Canadian
participants have further undertaken that, immediately upon such
exchange, they will convert their Series B Preferred Shares into
Common Shares. Pursuant to the MEIP, Raymond L. Loewen has
entered into a binding commitment to purchase MEIP Debentures.
At his option, Mr. Loewen may hold the Series B Preferred Shares
that he acquires on exchange of such MEIP Debentures. It is
unlikely that any participants in the MEIP will be
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entitled to
purchase MEIP Debentures, and exchange them for Series B
Preferred Shares, before June 15, 1999.
SERIES C PREFERRED SHARES
In December 1995, the Loewen Board of Directors
designated 880,000 First Preferred Shares as Series C Preferred
Shares. In May 1996, each Series C Preferred Share was
subdivided into ten Series C Preferred Shares; accordingly,
currently 8,800,000 First Preferred Shares are designated as
Series C Preferred Shares.
CLASSIFICATION OF THE BOARD OF DIRECTORS
The Board of Directors of Loewen presently consists of
fourteen members and four classes consisting of two classes of
four directors each and two classes of three directors each. One
class of directors is elected each annual general meeting of the
shareholders of Loewen, for a term expiring on the fourth annual
general meeting of the shareholders following their election. No
cumulative voting by the Common Shares is permitted or required
in connection with the voting of directors.
SHAREHOLDER PROTECTION RIGHTS PLAN AGREEMENT
On April 20, 1990, the Board of Directors of Loewen
approved the Rights Plan, which was confirmed by Loewen's
shareholders in accordance with the provisions of the Rights Plan
at the annual general meeting of Shareholders on May 24, 1990 and
re-confirmed for an additional five year period at the annual
general meeting of Shareholders on May 17, l995. The Rights Plan
is currently set to expire on April 20, 2000. This summary of
the Rights Plan does not purport to be complete and is qualified
in its entirety by reference to the text of the Rights Plan,
which is incorporated herein by reference. Certain capitalized
terms used below without definition are used as defined in the
Rights Plan.
The Rights Plan is intended to discourage unfair
takeover bid tactics and to give the Board of Directors time, if
there is an unsolicited bid, to pursue alternatives to maximize
shareholder value. To preserve the shareholders' right to
consider take-over bids on a fully-informed basis, the Rights
Plan provides that a bidder's position may be substantially
diluted if it does not either make a "Permitted Bid" directly to
all shareholders or negotiate with the Board for a waiver of the
Rights Plan's provisions.
Unless and until the Rights "separate", each Common
Share carries one Right, which is evidenced by the share
certificate and is transferable only along with the Common Share.
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The Rights would separate upon:
(1) the tenth day after the date of first public
announcement of a Take-over Bid or the intention of any one
(other than the Company or a subsidiary of the Company) to
make a Take-over Bid, other than a Permitted Bid;
(2) the tenth day after the date of first public
announcement of facts indicating that any person has become
the Beneficial Owner of 20% or more of the outstanding
Common Shares (unless otherwise exempt under the Rights
Plan);
(3) a Flip-over Transaction or Event, which is
generally either
a. a business combination whereby the Common
Shares would be changed; or
b. a sale of more than 50% of the consolidated
assets of the Company; or
(4) such earlier or later date as may be determined by
the Board of Directors, acting in good faith; provided that,
if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record
Time.
In the case of a Take-over Bid (so long as a Flip-in
Event has not occurred), each Right would entitle the holder
(other than the bidder) to acquire one Common Share for the
Exercise Price; in the other cases described above, each Right
would entitle the holder (other than the bidder) to acquire for
the Exercise Price, Common Shares (in the case of a Flip-in
Event) or common shares of the combined entity or purchaser (in
the case of a Flip-over Transaction or Event) having an aggregate
Market Price of two times the Exercise Price. The Exercise Price
is currently Cdn. $125 and is subject to anti-dilution
provisions.
Under the Rights Plan, a Flip-in Event will occur ten
days after the acquisition of Beneficial Ownership of more than
20% of the Common Shares except:
a. by way of a Permitted Bid (as defined herein);
b. by an acquirer who obtains a waiver from the Board;
c. as a result of the death of a Beneficial Owner of
Common Shares;
d. by a person who held more than 20% of the Common Shares
on April 20, 1990, who is "grandfathered" subject to a
number of restrictions (a "Grandfathered Person"); or
e. by registered pension plans whose governing legislation
does not permit them to hold more than 30% of Common Shares
and who acquire shares independently for investment.
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A "Permitted Bid" is a take-over bid that complies with all
applicable securities laws and is:
(1) for all Common Shares and to all holders, wherever
resident;
(2) made by a bidder who (with related parties) does
not own more than 5% of the Common Shares (unless the bidder
owned at least that percentage on April 20, 1990); and
(3) conditioned upon approval by a majority of the
votes cast by "Independent Shareholders" (those other than
certain shareholders who have acquired more than 20% of the
Common Shares or who have made a Takeover-Bid, their
Associates, Affiliate or persons acting jointly or in
concert with them), and expire no earlier than five business
days after the shareholders' meeting called to consider it.
To Loewen's knowledge, the only "Grandfathered Persons"
are Raymond L. Loewen and Anne Loewen. The holdings of a
Grandfathered Person can be increased by up to 2% of the Common
Shares without causing a Flip-in Event to occur. A person who
acquires Common Shares as a result of the death of a
Grandfathered Person or who buys all of the Common Shares
beneficially owned by a Grandfathered Person would also be a
Grandfathered Person, but to make a Permitted Bid such a buyer
would have to offer the other holders of Common Shares
consideration at least equal to that paid to the selling
Grandfathered Person.
ITEM 7. EXHIBITS.
99.1 Altered Memorandum of Loewen, filed with the
British Columbia Registrar of Companies (the
"Registrar") on June 21, 1996 (1)
99.2 Articles of Loewen, restated, filed with the
Registrar on March 1, 1988, as amended (2)
99.3 Shareholder Protection Rights Plan, dated as of
April 20, 1990, as amended on May 24, 1990 and
April 7, 1994 and reconfirmed on May 17, 1995 (3)
(1) Incorporated by reference from Loewen's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, filed on August 15, 1996
(File No. 1-12163).
(2) Incorporated by reference from Loewen's
Annual Report on Form 10-K for the year ended
December 31, 1995, filed on March 28, 1996, as
amended (File No. 0-18429).
(3) Incorporated by reference from Loewen's
Annual Report on Form 10-K for the year ended
December 31, 1994, filed on March 31, 1995 (File
No. 0-18429).
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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 hereunto duly authorized.
Dated: May 2, 1997
THE LOEWEN GROUP INC.
By: /s/ Dwight K. Hawes
Name: Dwight K. Hawes
Title: Vice-President, Finance
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