<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 13, 1995
REGISTRATION NO. 33-60683
--------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SERVICE CORPORATION INTERNATIONAL
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 74-1488375
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
1929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
(713) 522-5141
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES M. SHELGER, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SERVICE CORPORATION INTERNATIONAL
1929 ALLEN PARKWAY
HOUSTON, TEXAS 77019
(713) 522-5141
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE FOR EACH REGISTRANT)
------------------------
With a copy to:
ARTHUR H. ROGERS, ESQ. GERALD S. TANENBAUM, ESQ.
FULBRIGHT & JAWORSKI L.L.P. CAHILL GORDON & REINDEL
1301 MCKINNEY STREET EIGHTY PINE STREET
HOUSTON, TEXAS 77010 NEW YORK, NEW YORK 10005
(713) 651-5151 (212) 701-3000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT, AS DETERMINED BY MARKET CONDITIONS.
------------------------
If the only Securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the Securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2)(4)(5) FEE(2)
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<S> <C> <C> <C> <C>
Debt Securities................................. ( )
Common Stock(3)................................. ( $888,740,000 100% $888,740,000 $306,462.07 )
Warrants........................................ ( )
Series C Junior Participating Preferred Stock
Purchase Rights (currently traded with Common
Stock)........................................
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</TABLE>
(Footnotes on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO THAT
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
(Footnotes from cover)
---------------
(1) Such indeterminate principal amount of Debt Securities, and such
indeterminate number of shares of Common Stock and Warrants, as may from
time to time be issued at indeterminate prices.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. Pursuant to Rule 429 under the Securities Act of 1933,
as amended, the Prospectus included herein also relates to $111,260,000 of
Securities registered under Registration Statement No. 33-56069 for which a
registration fee of $38,365.51 was previously paid to the Commission. If any
of such previously registered Securities are offered prior to the effective
date of this registration statement, the amount of such Securities will not
be included in any Prospectus hereunder. The amount of Securities being
registered, together with the remaining Securities registered under
Registration Statement No. 33-56059, represents the maximum amount of
Securities that are expected to be offered for sale.
(3) Also includes such indeterminate number of shares of Common Stock as may be
issued upon conversion of or exchange for any Debt Securities that provide
for conversion or exchange into Common Stock or upon exercise of Warrants
for such Common Stock.
(4) Such amount represents the principal amount of any Debt Securities issued at
their principal amounts, the issue price rather than the principal amount of
any Debt Securities issued at an original issue discount, the amount
computed pursuant to Rule 457(c) for any Common Stock and the issue price of
any Warrants, but not the exercise price of any Securities issuable upon the
exercise of Warrants.
(5) No separate consideration will be received for the Common Stock issuable
upon conversion of or in exchange for Debt Securities.
<PAGE> 3
***************************************************************************
* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY *
* NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH *
* SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO *
* REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH *
* STATE. *
* *
***************************************************************************
SUBJECT TO COMPLETION DATED SEPTEMBER 13, 1995
PROSPECTUS
$1,000,000,000
SERVICE CORPORATION INTERNATIONAL
Company Debt Securities, Common Stock
and Common Stock Warrants
Service Corporation International (the "Company" or "SCI") may from time to time
offer (i) debt securities (the "Company Debt Securities"), which may be any of
senior debt securities (the "Company Senior Debt Securities"), senior
subordinated debt securities (the "Company Senior Subordinated Debt Securities")
or subordinated debt securities (the "Company Subordinated Debt Securities"), in
each case consisting of debentures, notes and/or other unsecured evidences of
indebtedness, (ii) Common Stock, par value $1.00 per share ("Common Stock" or
"SCI Common Stock"), along with Series C Junior Participating Preferred Stock
Purchase Rights, and (iii) warrants to purchase Common Stock ("Common Stock
Warrants"). The Company Debt Securities, the Common Stock, along with Series C
Junior Participating Preferred Stock Purchase Rights, and the Common Stock
Warrants are collectively referred to as the "Securities," and will have an
aggregate initial offering price of up to $1,000,000,000 or the equivalent
thereof if Debt Securities are denominated in a currency other than U.S. dollars
or in currency units. The Securities may be offered as separate series, in
amounts, at prices and on terms to be determined at the time of sale.
The accompanying Prospectus Supplement sets forth with regard to the Securities
in respect of which this Prospectus is being delivered the terms of such
Securities, including, where applicable, (i) in the case of Debt Securities, the
specific title (including whether senior, senior subordinated or subordinated
and whether or not convertible), aggregate principal amount, denominations
(which may be in U.S. dollars, in any other currency or in composite
currencies), maturity (which may be fixed or extendible), interest rate, if any
(which may be fixed or variable), and time of payment of any interest, any terms
for redemption at the option of the Company or the holder, any terms for sinking
fund payments, any class or classes of stock into which the Debt Securities are
convertible or exchangeable and other conversion or exchange terms, if any, any
covenants or events of default that are in addition to or different from those
described herein, any listing on a securities exchange, the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities, (ii) in the case of Common Stock, the initial public
offering price, and (iii) in the case of Common Stock Warrants, the duration,
exercise price, initial public offering price and any other terms in connection
with the offering and sale of such Common Stock Warrants.
The Company may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents. The accompanying
Prospectus Supplement sets forth the names of any underwriters or agents
involved in the sale of the Securities in respect of which this Prospectus is
being delivered, the principal amounts, if any, to be purchased by underwriters
and the compensation, if any, of such underwriters or agents.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 1995
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS, IF ANY, MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE
SECURITIES AND, IF THE SECURITIES ARE CONVERTIBLE, THE OUTSTANDING CLASS OR
CLASSES OF STOCK OF THE COMPANY INTO OR FOR WHICH THEY ARE CONVERTIBLE, AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON ANY SECURITIES EXCHANGE ON WHICH SUCH SECURITIES
MAY BE LISTED, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company or any underwriter, dealer or agent. Neither this Prospectus nor the
accompanying Prospectus Supplement constitutes an offer to sell or a
solicitation of any offer to buy Securities in any jurisdiction in which such
offer or solicitation is not authorized or in which the person making such offer
or solicitation is not qualified to do so or to any person to whom it is
unlawful to make such offer or solicitation.
In this Prospectus, references to "dollar" and "$" are to United States dollars,
and the terms "United States" and "U.S." mean the United States of America, its
states, its territories, its possessions and all areas subject to its
jurisdiction.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information................ 3
Incorporation of Certain Documents by
Reference.......................... 4
The Company.......................... 5
Recent Development................... 5
Use of Proceeds...................... 5
<CAPTION>
PAGE
----
<S> <C>
Description of Company Debt
Securities......................... 5
Description of Capital Stock......... 21
Description of Common Stock
Warrants........................... 24
Plan of Distribution................. 26
Legal Matters........................ 26
Experts.............................. 27
</TABLE>
2
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at 450 Fifth Street N.W., Washington,
D.C. 20549; 500 West Madison Street, Chicago, Illinois 60661; and 7 World Trade
Center, New York, New York 10048. Copies of such material can also be obtained
from the public reference section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Additional information regarding the Company and the Securities is contained in
the Registration Statement, of which this Prospectus is a part, and the exhibits
relating thereto (the "Registration Statement") filed with the Commission under
the Securities Act of 1933, as amended (the "Act"). For further information
pertaining to the Company and the Securities, reference is made to the
Registration Statement, which may be inspected without charge at the office of
the Commission at 450 Fifth Street N.W., Washington, D.C. 20549, and copies
thereof may be obtained from the Commission at prescribed rates. This Prospectus
and the accompanying Prospectus Supplement do not contain all the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements made in
this Prospectus and the accompanying Prospectus Supplement as to the contents of
any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, reference is made to the exhibit
for a more complete description of the matter involved, and each such statement
shall be deemed qualified in its entirety by such reference.
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<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by SCI with the Commission are
incorporated herein by reference:
(i) SCI's Annual Report on Form 10-K for the fiscal year ended December 31,
1994;
(ii) SCI's Quarterly Reports on Form 10-Q for the quarterly periods ended March
31, 1995 and June 30, 1995;
(iii) The Company's Current Report on Form 8-K dated June 7, 1995;
(iv) The Company's Current Report on Form 8-K dated July 10, 1995;
(v) The Company's Current Report on Form 8-K dated July 12, 1995;
(vi) The Company's Current Report on Form 8-K dated July 13, 1995;
(vii) The Company's Current Report on Form 8-K dated September 5, 1995;
(viii) The Company's Current Report on Form 8-K dated September 12, 1995;
(ix) Description of the Company's capital stock set forth under the caption
"Item 1. Description of Securities to be Registered -- Capital Stock" in the
Form 8, Amendment No. 3, dated September 15, 1982, to the Company's Registration
Statement on Form 8-A; and
(x) Description of the Company's preferred share purchase rights contained in
the Company's Registration Statement on Form 8-A dated July 26, 1988, as amended
by Amendment No. 1 thereto filed under cover of Form 8 and dated May 11, 1990.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing such documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the request of any such person, a copy of any or
all of the documents which are incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests should be directed to Service
Corporation International, 1929 Allen Parkway, Houston, Texas 77019, Attention:
James M. Shelger, Senior Vice President, General Counsel and Secretary,
telephone number: (713) 522-5141.
4
<PAGE> 7
THE COMPANY
The Company is the largest provider of funeral and cemetery services and
products in the world. As of June 30, 1995, the Company owned and operated 1,561
funeral homes, 246 cemeteries (including 105 funeral home and cemetery
combinations) and 110 crematoria located in 41 U.S. states, the District of
Columbia, Australia, Canada and the United Kingdom.
The Company was incorporated in Texas on July 5, 1962. The Company's principal
executive offices are located at 1929 Allen Parkway, Houston, Texas 77019,
telephone number: (713) 522-5141. As used herein, unless the context indicates
otherwise, the terms "Company" and "SCI" refer to the Company and its
subsidiaries.
RECENT DEVELOPMENT
As previously disclosed by the Company: the staff of the Division of Enforcement
of the Commission had undertaken an informal private investigation relating to,
among other things, disclosure about the change in the Company's accountants in
the Company's Form 8-K dated March 31, 1993, as amended; the staff intended to
recommend to the Commission that it institute a cease and desist proceeding
pursuant to Section 21C(a) of the Exchange Act against the Company; and the
Company had submitted an offer of settlement to the Commission with respect to
this matter.
On September 12, 1995, the staff advised the Company that the Commission had
approved acceptance of the offer of settlement submitted by the Company whereby
the Company would consent to the entry of an Order by the Commission, without
admitting or denying the facts, conclusions or findings in the Order. The staff
has advised that the Order would be entered shortly. The Order would provide
that the Commission found that the Company violated Section 13(a) of the
Exchange Act and Rules 12b-20 and 13a-11 thereunder in failing to disclose in
such Form 8-K a disagreement with its former accountants with respect to the
accounting for pre-need funeral sales. The Company never adopted the accounting
treatment in question. The Order would provide that the Company cease and desist
from committing any violation or future violation of Section 13(a) of the
Exchange Act and Rules 12b-20 and 13a-11 thereunder. The Order would not charge
any wrongdoing on the part of any officer, director or employee of the Company
nor would there be any monetary penalty imposed. The staff has advised the
Company that following the entry of the Order, the staff's investigation in this
matter would be concluded.
USE OF PROCEEDS
Except as may be otherwise set forth in the Prospectus Supplement accompanying
this Prospectus, the net proceeds to the Company from the sale or sales of the
Securities will be used for general corporate purposes including (without
limitation) repurchases of outstanding long-term debt securities, capital
expenditures, investments in subsidiaries, working capital, repayment of
borrowings under bank credit agreements, acquisitions and other business
opportunities.
DESCRIPTION OF COMPANY DEBT SECURITIES
The Company Debt Securities will constitute any of Company Senior Debt
Securities, Company Senior Subordinated Debt Securities or Company Subordinated
Debt Securities and will be issued, in the case of Company Senior Debt
Securities, under a Senior Indenture (the "Senior Debt Indenture") dated as of
February 1, 1993, between the Company and The Bank of New York, as trustee; in
the case of Company Senior Subordinated Debt Securities, under a Senior
Subordinated Indenture (the "Senior Subordinated Debt Indenture") to be entered
into between the Company and Texas Commerce Bank National Association ("Texas
Commerce Bank"), as trustee; and, in the case of Company Subordinated Debt
Securities under a Subordinated Indenture (the "Subordinated Debt Indenture")
dated as of September 1, 1991 between the Company and Texas Commerce Bank, as
trustee. The Senior Debt Indenture, the Senior Subordinated Debt Indenture and
the Subordinated Debt Indenture are sometimes hereinafter referred to
individually as an "Indenture" and collectively as the "Indentures." Each of The
Bank of New York and Texas Commerce Bank (and any successors thereto as trustees
under the respective Indentures) is hereinafter referred to as the "Trustee"
with respect to
5
<PAGE> 8
the Indenture under which it acts as Trustee. The Indentures are filed as
exhibits to the Registration Statement. The following summaries of certain
provisions of the Indentures and the Company Debt Securities do not purport to
be complete, and such summaries are subject to the detailed provisions of the
applicable Indenture to which reference is hereby made for a full description of
such provisions, including the definition of certain capitalized terms used
herein but not otherwise defined herein. Whenever defined terms of the
applicable Indenture are referred to, such defined terms are incorporated herein
by reference as part of the statement made, and the statement is qualified in
its entirety by such reference. The Indentures are substantially identical,
except for certain covenants of the Company, events of default and provisions
relating to subordination and conversion.
The Company Debt Securities may be issued from time to time in one or more
series. The following description of the Company Debt Securities sets forth
certain general terms and provisions of the Company Debt Securities of all
series. The particular terms of each series of Company Debt Securities offered
by any Prospectus Supplement will be described therein.
PROVISIONS APPLICABLE TO COMPANY SENIOR DEBT SECURITIES, COMPANY SENIOR
SUBORDINATED DEBT SECURITIES AND COMPANY SUBORDINATED DEBT SECURITIES
General. The Company Debt Securities will be unsecured senior, senior
subordinated or subordinated obligations of the Company and may be issued from
time to time in one or more series. The Indentures will not limit the amount of
Company Debt Securities, Senior Indebtedness, debentures, notes or other types
of indebtedness that may be issued by the Company or any of its Subsidiaries nor
will they restrict transactions between the Company and its Affiliates, the
payment of dividends or the making of investments by the Company or the transfer
of assets by the Company to its Subsidiaries. The Company currently conducts
substantially all its operations through Subsidiaries. Consequently, the rights
of the Company to receive assets of any Subsidiary (and thus the ability of
holders of Company Debt Securities to benefit indirectly from such assets) are
subject to the prior claims of creditors of that Subsidiary. Other than as may
be set forth in any Prospectus Supplement, the Indentures and the Company Debt
Securities will not contain any covenants or other provisions that are intended
to afford holders of the Company Debt Securities special protection in the event
of a highly leveraged transaction by the Company. As of June 30, 1995, the
Company (including its subsidiaries) had outstanding approximately $1,387
million of secured debt or Senior Indebtedness and approximately $214 million of
unsecured subordinated debt. Such amounts included $398 million of indebtedness
of the Company's subsidiaries.
Reference is made to the Prospectus Supplement relating to any Company Debt
Securities for the following terms of and information relating to such Company
Debt Securities (to the extent such terms are applicable thereto): (i) the title
of such Company Debt Securities; (ii) classification as Company Senior Debt
Securities, Company Senior Subordinated Debt Securities or Company Subordinated
Debt Securities, aggregate principal amount, purchase price and denomination;
(iii) whether such Company Debt Securities that constitute Company Senior
Subordinated Debt Securities or Company Subordinated Debt Securities are
convertible into Common Stock and, if so, the terms and conditions upon which
such conversion will be effected including the initial conversion price or
conversion rate and any adjustments thereto in addition to or different from
those described herein, the conversion period and other conversion provisions in
addition to or in lieu of those described herein; (iv) the date or dates on
which such Company Debt Securities will mature; (v) the method by which amounts
payable in respect of principal of or premium, if any, or interest, if any, on
or upon the redemption of such Company Debt Securities may be calculated; (vi)
the interest rate or rates (or the method by which such will be determined), and
the dates from which such interest, if any, will accrue; (vii) the date or dates
on which any such interest will be payable; (viii) the place or places where and
the manner in which the principal of and premium, if any, and interest, if any,
on such Company Debt Securities will be payable and the place or places where
such Company Debt Securities may be presented for transfer and, if applicable,
conversion; (ix) the obligations, if any, of the Company to redeem, repay or
purchase such Company Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of a holder thereof or the right, if any, of the
Company to redeem, repay or purchase such Company Debt Securities at its option
and the period or periods within which, the price or prices at which and the
terms and conditions upon which such Company Debt Securities will be redeemed,
repaid or purchased pursuant to any such obligation or right (including the form
or method of payment thereof if other than cash); (x) any terms applicable to
such Company Debt Securities issued at an
6
<PAGE> 9
original issue discount below their stated principal amount, including the issue
price thereof and the rate or rates at which such original issue discount shall
accrue; (xi) any index used to determine the amount of payments of principal of
and any premium and interest on such Company Debt Securities; (xii) any special
United States federal income tax consequences; and (xiii) any other specified
terms of such Company Debt Securities, including any additional or different
events of default or remedies or any additional covenants provided with respect
to such Company Debt Securities, and any terms which may be required by or
advisable under applicable laws or regulations.
Unless otherwise specified in any Prospectus Supplement, the Company Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. No service charge will be made for any
transfer or exchange of any Company Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Company Debt Securities may bear interest at a fixed rate or a floating rate.
Company Debt Securities bearing no interest or interest at a rate that at the
time of issuance is below the prevailing market rate may be sold at a discount
below their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Company Debt Securities or to
certain Company Debt Securities issued at par that are treated as having been
issued at a discount for United States federal income tax purposes will be
described in the applicable Prospectus Supplement.
The Indentures and the Company Debt Securities will be governed by Texas law.
Global Securities. The Company Debt Securities of a series may be issued in
whole or in part in the form of one or more global securities ("Global
Securities") that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Company Debt Securities represented thereby, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to the nominee of the Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
The specific terms of the depositary arrangement with respect to a series of
Company Debt Securities will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global Security
or its nominee will credit, on its book-entry registration and transfer system,
the respective principal amounts of the individual Company Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Company Debt Securities or by the
Company if such Company Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be limited
to persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security or its nominee is the registered
owner of such Global Security, such Depositary or its nominee, as the case may
be, will be considered the sole owner or holder of the Company Debt Securities
of the series represented by such Global Security for all purposes under the
Indenture governing such Company Debt Securities. Except as provided below,
owners of beneficial interests in a Global Security will not be entitled to have
any of the individual Company Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Company Debt Securities in definitive form
and will not be considered the owners or holders thereof under the Indenture
governing such Company Debt Securities. Accordingly, each person owning a
beneficial interest in a
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<PAGE> 10
Global Security must rely on the procedures of the Depositary and, if the
beneficial owner is not a participant, on the procedures of the participant
through which the beneficial owner owns its interest, to exercise any rights of
a holder under the Indenture. The Company understands that under existing
practice, if the Company requests any action of the holders, or a beneficial
owner desires to take any action a holder is entitled to take, the Depositary
would act upon the instructions of, or authorize, the participant to take such
action.
Payments of principal of and premium, if any, and interest, if any, on
individual Company Debt Securities represented by a Global Security registered
in the name of a Depositary or its nominees will be made to the Depositary or
its nominee, as the case may be, as the registered owner of the Global Security
representing such Company Debt Securities. None of the Company, the Trustee for
such Company Debt Securities, any paying agent and the registrar for such
Company Debt Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Company Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Company Debt Securities
or its nominee, upon receipt of any payment of principal, premium or interest in
respect of a Global Security representing any such Company Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Company Debt Securities as shown on the records
of such Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such participants.
If the Depositary for a series of Company Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Company Debt Securities of such series in exchange for the
Global Security representing such series of Company Debt Securities. In
addition, the Company may at any time and in its sole discretion, subject to any
limitations described in the Prospectus Supplement relating to such Company Debt
Securities, determine not to have any Company Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue
individual Company Debt Securities of such series in exchange for the Global
Security or Securities representing such series of Company Debt Securities.
Further, if the Company so specifies with respect to the Company Debt Securities
of a series, an owner of a beneficial interest in a Global Security representing
Company Debt Securities of such series may, on terms acceptable to the Company
and the Depositary for such Global Security, receive individual Company Debt
Securities of such series in exchange for such beneficial interests, subject to
any limitations described in the Prospectus Supplement relating to such Company
Debt Securities. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to a physical delivery of individual Company
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Company Debt
Securities registered in its name. Individual Company Debt Securities of such
series so issued will be issued in denominations, unless otherwise specified by
the Company, of $1,000 and integral multiples thereof.
Consolidation, Merger, Sale. Each Indenture provides that the Company may
consolidate or merge with or into any other corporation, and may sell, lease,
exchange or otherwise dispose of all or substantially all of its property and
assets to any other corporation authorized to acquire and operate the same,
provided that in any such case (i) immediately after such transaction the
Company or such other corporation formed by or surviving any such consolidation
or merger, or to which such sale, lease, exchange or other disposition shall
have been made, will not be in default in the performance or observance of any
of the terms, covenants and conditions in the Indenture to be kept or performed
by the Company, (ii) the corporation (if other than the Company) formed by or
surviving any such consolidation or merger, or to which such sale, lease,
exchange or other disposition shall have been made, shall be a corporation
organized under the laws of the United States of America, any state thereof or
the District of Columbia, and (iii) the corporation (if other than the Company)
formed by such consolidation, or into which the Company shall have been merged,
or the corporation which shall have acquired or leased such property and assets,
shall assume, by a supplemental indenture, the Company's obligations under
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such Indenture. In case of any such consolidation, merger, sale, lease, exchange
or other disposition and upon any such assumption by the successor corporation,
such successor corporation shall succeed to and be substituted for the Company,
with the same effect as if it had been named in such Indenture as the Company
and subject to the conditions set forth in the Indenture, and the Company shall
be relieved of any further obligation under such Indenture and any Company Debt
Securities issued thereunder.
Discharge and Defeasance. The Company may discharge or defease its obligations
with respect to each series of Company Debt Securities as set forth below.
The Company may discharge all of its obligations (except those set forth below)
to holders of any series of Company Debt Securities issued under any Indenture,
which Company Debt Securities have not already been delivered to the Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year (or are to be called for redemption within one
year) by depositing with the Trustee cash or U.S. Government Obligations, or a
combination thereof, as trust funds in an amount certified to be sufficient to
pay when due the principal of and premium, if any, and interest, if any, on all
outstanding Company Debt Securities of such series and to make any mandatory
sinking fund payments thereon when due.
Unless otherwise provided in the applicable Prospectus Supplement, the Company
may also discharge at any time all of its obligations (except those set forth
below) to holders of any series of Company Debt Securities issued under any
Indenture (other than convertible Company Debt Securities) ("defeasance") if,
among other things: (i) the Company irrevocably deposits with the Trustee cash
or U.S. Government Obligations, or a combination thereof, as trust funds in an
amount certified to be sufficient to pay the principal of and premium, if any,
and interest, if any, on all outstanding Company Debt Securities of such series
when due and to make any mandatory sinking fund payments thereon when due, and
such funds have been so deposited for 91 days; (ii) such deposit will not result
in a breach or violation of, or cause a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and (iii)
the Company delivers to the Trustee an opinion of counsel to the effect that the
holders of such series of Company Debt Securities will not recognize income,
gain or loss for United States federal income tax purposes as a result of such
defeasance, and that such defeasance will not otherwise alter the United States
federal income tax treatment of principal and interest payments on such series
of Company Debt Securities. Such opinion of counsel must be based on a ruling of
the Internal Revenue Service or a change in United States federal income tax law
occurring after the date of the Indenture relating to the Company Debt
Securities of such series, since such a result would not occur under current tax
law.
In the event of such discharge and defeasance of a series of Company Debt
Securities, the holders thereof would be entitled to look only to such trust
funds for payment of the principal of and any premium and interest on such
Company Debt Securities.
Notwithstanding the foregoing, no discharge or defeasance described above shall
affect the following obligations to or rights of the holders of any series of
Company Debt Securities: (i) rights of registration of transfer and exchange of
Company Debt Securities of such series; (ii) rights of substitution of
mutilated, defaced, destroyed, lost or stolen Company Debt Securities of such
series; (iii) rights of holders of Company Debt Securities of such series to
receive payments of principal thereof and interest, if any, thereon when due and
to receive mandatory sinking fund payments, if any, thereon when due from the
trust funds held by the Trustee; (iv) the rights, obligations, duties and
immunities of the Trustee; (v) the rights of holders of Company Debt Securities
of such series as beneficiaries with respect to property deposited with the
Trustee payable to all or any of them; (vi) the obligations of the Company to
maintain an office or agency in respect of Company Debt Securities of such
series; and (vii) if applicable, the obligations of the Company with respect to
the conversion of Company Debt Securities of such series into Common Stock.
Modification of the Indenture. Each Indenture provides that the Company and the
Trustee may enter into supplemental indentures without the consent of the
holders of the Company Debt Securities to (i) evidence the assumption by a
successor corporation of the obligations of the Company under such Indenture,
(ii) add covenants or new events of default for the protection of the holders of
such Company Debt Securities, (iii) cure any ambiguity or correct any
inconsistency in the Indenture, (iv) establish the form and terms of any series
of Company Debt Securities and to provide for adjustment of conversion rights,
(v) evidence the acceptance of appointment by a successor trustee, (vi) amend
the Indenture in any other manner which the Company may
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<PAGE> 12
deem necessary or desirable and which will not adversely affect the interests of
the holders of Company Debt Securities issued thereunder or (vii) in the case of
Senior Company Debt Securities, secure such Company Debt Securities.
Each Indenture also contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Company Debt Securities then Outstanding of each series
affected by such supplemental Indenture, to add any provisions to, or change in
any manner or eliminate any of the provisions of, such Indenture or modify in
any manner the rights of the holders of the Company Debt Securities of such
series; provided that the Company and the Trustee may not, without the consent
of the holder of each outstanding Company Debt Security affected thereby, (i)
extend the stated maturity of the principal of any Company Debt Security, reduce
the principal amount thereof, reduce the rate or extend the time of payment of
any interest thereon, reduce or alter the method of computation of any amount
payable on redemption, repayment or purchase thereof, reduce the portion of the
principal amount of any Original Issue Discount Security payable upon
acceleration or provable in bankruptcy, change the coin or currency in which
principal and interest, if any, are payable, impair or affect the right to
institute suit for the enforcement of any payment, repayment or purchase thereof
or, if applicable, adversely affect the right to convert Company Debt
Securities, any right of repayment at the option of the holder or (solely with
respect to the Senior Subordinated Debt Indenture) change, amend or modify the
subordination provisions of such Indenture or any of the definitions used in the
subordination provisions of such Indenture or consent to the departure from any
of the terms of the subordination provisions of such Indenture in each case in
any manner that would adversely affect the holders of any of the Company Senior
Subordinated Debt Securities issued thereunder or (ii) reduce the percentage in
aggregate principal amount of Company Debt Securities of any series issued under
such Indenture, the consent of the holders of which is required for any such
modification.
The Senior Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Company Senior Subordinated Debt Securities,
and the Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Company Subordinated Debt Securities, in each
case without the consent of each holder of Senior Indebtedness then outstanding
that would be adversely affected thereby.
Each of the Indentures provides that the term "Original Issue Discount Security"
means any Company Debt Security that provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to the terms of the Indenture.
In each of the Indentures, the definition of the term "Outstanding," with
reference to Company Debt Securities, provides that in determining whether the
holders of the requisite aggregate principal amount of Outstanding Company Debt
Securities of any or all series have given any request, demand, authorization,
direction, notice, consent or waiver under the applicable Indenture, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the portion of the principal amount
thereof that would be due and payable as of the date of such determination (as
certified by the Company to the Trustee) upon a declaration of acceleration of
the maturity thereof pursuant to the terms of the Indenture.
PROVISIONS APPLICABLE SOLELY TO COMPANY SENIOR DEBT SECURITIES
General. Company Senior Debt Securities will be issued under the Senior Debt
Indenture, and each series will rank pari passu as to the right of payment of
principal, premium, if any, and interest, if any, with each other series and
with all other Senior Indebtedness of the Company.
Events of Default. Unless otherwise specified in the Prospectus Supplement, an
Event of Default is defined under the Senior Debt Indenture with respect to the
Company Senior Debt Securities of any series issued thereunder as being any one
or more of the following events:
(i) default in the payment of any installment of interest upon any of the
Company Senior Debt Securities of such series as and when the same shall become
due and payable, and continuance of such default for a period of 30 days;
(ii) default in the payment of the principal of any of the Company Senior Debt
Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise;
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(iii) default in the payment or satisfaction of any sinking fund or other
purchase obligation with respect to Company Senior Debt Securities of such
series, as and when such obligation shall become due and payable;
(iv) failure on the part of the Company duly to observe or perform any other of
the covenants or agreements on the part of the Company in the Company Senior
Debt Securities of such series or in the Senior Debt Indenture continuing for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by the
Trustee by registered or certified mail, or to the Company and the Trustee by
the holders of at least 25 percent in aggregate principal amount of the Company
Senior Debt Securities of such series then Outstanding;
(v) without the consent of the Company, a court having jurisdiction shall enter
an order for relief with respect to the Company under the Bankruptcy Code or,
without the consent of the Company, a court having jurisdiction shall enter a
judgment, order or decree adjudging the Company a bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Bankruptcy Code or
applicable state insolvency law and the continuance of any such judgment, order
or decree is unstayed and in effect for a period of 60 consecutive days;
(vi) the Company shall institute proceedings for entry of an order for relief
with respect to the Company under the Bankruptcy Code or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent to,
reorganization, arrangement, composition or relief under the Bankruptcy Code or
any applicable state law, or shall consent to the filing of such petition or to
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of substantially all of its
property, or the Company shall make a general assignment for the benefit of
creditors as recognized under the Bankruptcy Code;
(vii) default under any bond, debenture, note or other evidence of Indebtedness
for money borrowed by the Company or any Subsidiary or under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
Subsidiary (other than Non-Recourse Indebtedness), whether such Indebtedness
exists on the date of the Senior Debt Indenture or shall thereafter be created,
which default shall have resulted in such Indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, or any default in payment of such Indebtedness (after
the expiration of any applicable grace periods and the presentation of any debt
instruments, if required), if the aggregate amount of all such Indebtedness
which has been so accelerated and with respect to which there has been such a
default in payment shall exceed $5,000,000, without each such default and
acceleration having been rescinded or annulled within a period of 30 days after
there shall have been given to the Company by the Trustee by registered mail, or
to the Company and the Trustee by the holders of at least 25 percent in
aggregate principal amount of the Company Senior Debt Securities of such series
then Outstanding, a written notice specifying each such default and requiring
the Company to cause each such default and acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" under the Senior
Debt Indenture; or
(viii) any other Event of Default provided with respect to the Company Senior
Debt Securities of such series.
If an Event of Default with respect to Company Senior Debt Securities of any
series then Outstanding occurs and is continuing, then and in each and every
such case, unless the principal of all of the Company Senior Debt Securities of
such series shall have already become due and payable, either the Trustee or the
holders of not less than 25 percent in aggregate principal amount of the Company
Senior Debt Securities of such series then Outstanding, by notice in writing to
the Company (and to the Trustee if given by Securityholders), may declare the
unpaid principal amount (or, if the Company Senior Debt Securities of such
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all the Company
Senior Debt Securities of such series and the interest, if any, accrued thereon
to be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in the Senior Debt
Indenture or in the Company Senior Debt Securities of such series contained to
the contrary notwithstanding. This provision, however, is subject to the
condition that, if at any time after the unpaid principal amount (or such
specified amount) of the Company Senior Debt Securities of such series shall
have been so declared due and payable and before any judgment or decree for the
payment of the
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moneys due shall have been obtained or entered, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all of the Company Senior Debt Securities of such series
and the principal of any and all Company Senior Debt Securities of such series
which shall have become due otherwise than by acceleration (with interest on
overdue installments of interest, if any, to the extent that payment of such
interest is enforceable under applicable law and on such principal at the rate
borne by the Company Senior Debt Securities of such series to the date of such
payment or deposit) and the reasonable compensation, disbursements, expenses and
advances of the Trustee, and any and all defaults under the Senior Debt
Indenture, other than the nonpayment of such portion of the principal amount of
and accrued interest, if any, on Company Senior Debt Securities of such series
which shall have become due by acceleration, shall have been cured or shall have
been waived in accordance with the Senior Debt Indenture or provision deemed by
the Trustee to be adequate shall have been made therefor -- then and in every
such case the holders of a majority in aggregate principal amount of the Company
Senior Debt Securities of such series then Outstanding, by written notice to the
Company and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon. If
any Event of Default with respect to the Company specified in clause (v) or (vi)
above occurs, the unpaid principal amount (or, if the Company Senior Debt
Securities of any series then Outstanding are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of each such series) and accrued interest on all Company Senior Debt
Securities of each series then Outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act by the Trustee
or any Securityholder. If the Trustee shall have proceeded to enforce any right
under the Senior Debt Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Company, the Trustee and the Securityholders shall be
restored respectively to their several positions and rights under the Senior
Debt Indenture, and all rights, remedies and powers of the Company, the Trustee
and the Securityholders shall continue as though no such proceeding had been
taken. Except with respect to an Event of Default pursuant to clause (i), (ii)
or (iii) above, the Trustee shall not be charged with knowledge of any Event of
Default unless written notice thereof shall have been given to the Trustee by
the Company, a paying agent or any Securityholder.
The Senior Debt Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee will be
under no obligation to exercise any of its rights or powers under the Senior
Debt Indenture at the request or direction of any of the holders of Company
Senior Debt Securities issued under the Senior Debt Indenture, unless such
holders shall have offered to the Trustee reasonable security or indemnity.
No holder of any Company Senior Debt Securities of any series then Outstanding
shall have any right by virtue of or by availing of any provision of the Senior
Debt Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to the Senior Debt Indenture or the Company Senior
Debt Securities or for the appointment of a receiver or trustee or similar
official, or for any other remedy under the Senior Debt Indenture or under the
Company Senior Debt Securities, unless such holder previously shall have given
to the Trustee written notice of default and of the continuance thereof, and
unless the holders of not less than 25 percent in aggregate principal amount of
the Company Senior Debt Securities of such series then Outstanding shall have
made written request to the Trustee to institute such action, suit or proceeding
in its own name as Trustee and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. Notwithstanding any other
provisions in the Senior Debt Indenture, however, the right of any holder of any
Company Senior Debt Security to receive payment of the principal of and
interest, if any, on such Company Senior Debt Security, on or after the
respective due dates expressed in such Company Senior Debt Security, or to
institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of such
holder.
The holders of at least a majority in aggregate principal amount of the Company
Senior Debt Securities of any series then Outstanding shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect
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to Company Senior Debt Securities of such series; provided, that (subject to
certain exceptions) the Trustee shall have the right to decline to follow any
such direction if the Trustee shall determine upon advice of counsel that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith shall determine that the action or proceeding so directed would
involve the Trustee in personal liability. The holders of 66 2/3% in aggregate
principal amount of the Company Senior Debt Securities of any series then
Outstanding may on behalf of the holders of all of the Company Senior Debt
Securities of such series waive any past default or Event of Default and its
consequences except a default in the payment of interest, if any, on, or the
principal of, the Company Senior Debt Securities of such series. Upon any such
waiver the Company, the Trustee and the holders of the Company Senior Debt
Securities of such series shall be restored to their former positions and rights
under the Senior Debt Indenture, respectively; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon. Whenever any default or Event of Default shall have been
waived as permitted, said default or Event of Default shall for all purposes of
the Senior Company Debt Securities and the Senior Debt Indenture be deemed to
have been cured and to be not continuing.
The Trustee shall, within 90 days after the occurrence of a default, with
respect to Company Senior Debt Securities of any series then Outstanding, mail
to all holders of Company Senior Debt Securities of such series, as the names
and the addresses of such holders appear upon the Company Senior Debt Securities
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of these provisions being hereby
defined to be the events specified in clauses (i), (ii), (iii), (iv), (v), (vi),
(vii) and (viii) of "-- Provisions Applicable Solely to Company Senior Debt
Securities -- Events of Default" above, not including periods of grace, if any,
provided for therein and irrespective of the giving of the written notice
specified in said clause (iv) or (vii) but in the case of any default of the
character specified in said clause (iv) or (vii) no such notice to
Securityholders shall be given until at least 60 days after the giving of
written notice thereof to the Company pursuant to said clause (iv) or (vii), as
the case may be); provided, that, except in the case of default in the payment
of the principal of or interest, if any, on any of the Company Senior Debt
Securities, or in the payment or satisfaction of any sinking fund or other
purchase obligation, the Trustee shall be protected in withholding such notice
if and so long as the Trustee in good faith determines that the withholding of
such notice is in the best interests of the Securityholders.
The Company is required to furnish to the Trustee annually a statement as to the
fulfillment by the Company of all of its obligations under the Senior Debt
Indenture.
Limitation on Liens. The Company may not, nor may any Subsidiary, mortgage,
pledge, encumber or subject to any lien or security interest to secure any
obligation of the Company or any obligation of any Subsidiary (other than
obligations owing to the Company or a wholly owned Subsidiary) any assets,
whether owned as of the date the Senior Debt Indenture was executed or
thereafter acquired, without effectively providing that the Company Senior Debt
Securities shall be secured equally and ratably with (or prior to) such
obligation, unless, after giving effect thereto, the aggregate amount of all
such secured debt of the Company and its Subsidiaries (excluding secured
Indebtedness existing as of the date the Senior Debt Indenture was executed and
any extensions, renewals or refundings thereof that do not increase the
principal amount of Indebtedness so extended, renewed or refunded and excluding
secured Indebtedness incurred pursuant to clauses (i), (ii), (iii) and (iv) set
forth in this paragraph below) would not exceed 10% of Consolidated Net Worth of
the Company and its Subsidiaries; provided, that this restriction will not
prevent the Company or any Subsidiary: (i) from acquiring and retaining property
subject to mortgages, pledges, encumbrances, liens or security interests
existing thereon at the date of acquisition thereof, or from creating within one
year of such acquisition mortgages, pledges, encumbrances or liens upon property
acquired by it after the date of the Senior Debt Indenture, as security for
purchase money obligations incurred by it in connection with the acquisition of
such property, whether payable to the person from whom such property is acquired
or otherwise; (ii) from mortgaging, pledging, encumbering or subjecting to any
lien or security interest Current Assets to secure Current Liabilities; (iii)
from extending, renewing or refunding any Indebtedness secured by a mortgage,
pledge, encumbrance, lien or security interest on the same property theretofore
subject thereto, provided that the principal amount of such Indebtedness so
extended, renewed or refunded shall not be increased; or (iv) from securing the
payment of workmen's compensation or insurance premiums or from making good
faith pledges or deposits in connection with bids, tenders, contracts (other
than contracts for the payment of money) or leases, deposits to secure public
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or statutory obligations, deposits to secure surety or appeal bonds, pledges or
deposits in connection with contracts made with or at the request of the United
States Government or any agency thereof, or pledges or deposits for similar
purposes in the ordinary course of business.
"Consolidated Net Worth" means, at any date, the sum of (i) the par value (or
value stated on the books of the Company) of the capital stock of all classes of
the Company (including preferred stock), plus (or minus in the case of a
deficit) (ii) the amount of the consolidated surplus, whether capital or earned,
of the Company and its Subsidiaries, determined in accordance with generally
accepted accounting principles.
"Current Assets" of any Person includes all assets of such Person which would be
classified as current assets in accordance with generally accepted accounting
principles.
"Current Liabilities" of any Person includes all liabilities of such Person
which would be classified as current liabilities in accordance with generally
accepted accounting principles.
Limitation on Sale and Leaseback Transactions. Neither the Company nor any
Subsidiary will enter into any transaction with any bank, insurance company or
other lender or investor, or to which any such lender or investor is a party,
providing for the leasing to the Company or a Subsidiary of any real property
(except a lease for a temporary period not to exceed three years by the end of
which it is intended that the use of such real property by the lessee will be
discontinued) which has been or is to be sold or transferred by the Company or
such Subsidiary to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
real property unless either: (i) such transaction is the substantial equivalent
of a mortgage, pledge, encumbrance, lien or security interest which the Company
or any Subsidiary would have been permitted to create under the covenant
described in "-- Provisions Applicable Solely to Company Senior Debt
Securities -- Limitation on Liens" without equally and ratably securing the
Company Senior Debt Securities, or (ii) the Company within 120 days after such
transaction applied (and in any such case the Company covenants that it will so
apply) an amount equal to the greater of (a) the net proceeds of the sale of the
real property leased pursuant to such transaction or (b) the fair value of the
real property so leased at the time of entering into such transaction (as
determined by the Board of Directors), to the retirement of Funded Debt of the
Company; provided that the amount to be applied to the retirement of Funded Debt
of the Company shall be reduced by: (x) the principal amount of any Company
Senior Debt Securities (for this purpose if the Company Senior Debt Securities
of that series are Original Issue Discount Securities, the principal amount of
the Outstanding Company Senior Debt Securities of that series shall be computed
and adjusted as may be specified in the terms of that series) delivered within
120 days after such sale to the Trustee for retirement and cancellation and (y)
the principal amount of Funded Debt, other than Company Senior Debt Securities,
voluntarily retired by the Company within 120 days after such sale; provided,
that no retirement referred to in this clause (ii) may be effected by payment at
maturity or pursuant to any mandatory sinking fund payment or any mandatory
prepayment provision.
"Funded Debt" means Indebtedness for money borrowed which by its terms matures
at or is extendible or renewable at the option of the obligor to a date more
than 12 months after the date of the creation of such Indebtedness.
PROVISION APPLICABLE SOLELY TO COMPANY SENIOR SUBORDINATED DEBT SECURITIES
Prohibition on Incurrence of Senior Subordinated Debt. The Company will not
incur or suffer to exist Indebtedness that is or purports to be, pursuant to its
terms or the terms of any agreement relating thereto, senior in right of payment
to the Company Senior Subordinated Debt Securities and subordinate or junior in
right of payment to any other Indebtedness of the Company; provided, that no
Indebtedness of the Company shall be deemed to be subordinate to any other
Indebtedness of the Company solely by virtue of any such other Indebtedness
being secured or otherwise having the benefit of any lien or security interest.
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PROVISIONS APPLICABLE SOLELY TO COMPANY SENIOR SUBORDINATED DEBT SECURITIES AND
COMPANY SUBORDINATED DEBT SECURITIES
Events of Default. Unless otherwise specified in the Prospectus Supplement, an
Event of Default is defined under each of the Senior Subordinated Indenture and
Subordinated Indenture (together, the "Subordinated Indentures") with respect to
the Company Senior Subordinated Debt Securities and Company Subordinated Debt
Securities (together, the "Subordinated Securities") of any series issued under
such Indenture being as one or more of the following events:
(i) default in the payment of any installment of interest upon any of the
Subordinated Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days;
(ii) default in the payment of the principal of any of the Subordinated
Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise;
(iii) default in the payment or satisfaction of any sinking fund or other
purchase obligation with respect to Subordinated Securities of such series, as
and when such obligation shall become due and payable;
(iv) failure on the part of the Company duly to observe or perform any other of
the covenants or agreements on the part of the Company in the Subordinated
Securities of such series or in the Subordinated Indenture applicable to such
series continued for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Company by the Trustee by registered mail, or to the Company and the Trustee by
the holders of at least 25 percent in aggregate principal amount of the
Subordinated Securities of such series issued under the applicable Subordinated
Indenture then Outstanding;
(v) without the consent of the Company a court having jurisdiction shall enter
an order for relief with respect to the Company under the Bankruptcy Code or
without the consent of the Company a court having jurisdiction shall enter a
judgment, order or decree adjudging the Company a bankrupt or insolvent, or
enter an order for relief for reorganization, arrangement, adjustment or
composition of or in respect of the Company under the Bankruptcy Code or
applicable state insolvency law and the continuance or any such judgment, order
or decree is unstayed and in effect for a period of 60 consecutive days;
(vi) the Company shall institute proceedings for entry of an order for relief
with respect to the Company under the Bankruptcy Code or for an adjudication of
insolvency, or shall consent to the institution of bankruptcy or insolvency
proceedings against it, or shall file a petition seeking, or seek or consent to
reorganization, arrangement composition or relief under the Bankruptcy Code or
any applicable state law, or shall consent to filing of such petition or to the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of substantially all of its
property, or the Company shall make a general assignment for the benefit of
creditors as recognized under the Bankruptcy Code;
(vii) default under any bond, debenture, note or other evidence of Indebtedness
for money borrowed by the Company or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company, whether such Indebtedness
exists on the date of such Subordinated Indenture or shall thereafter be
created, which default shall have resulted in such Indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable, or any default in payment of such Indebtedness
(after the expiration of any applicable grace periods and the presentation of
any debt instrument, if required), if the aggregate amount of all such
Indebtedness which has been so accelerated and with respect to which there has
been such a default in payment shall exceed $5,000,000, without each such
default and acceleration having been rescinded or annulled within a period of 30
days after there shall have been given to the Company by the Trustee by
registered mail, or to the Company and the Trustee by the holders of at least 25
percent in aggregate principal amount of the Subordinated Securities of such
series then Outstanding, a written notice specifying each such default and
requiring the Company to cause each such default and acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
under the applicable Subordinated Indenture; or
(viii) any other Event of Default provided with respect to the Subordinated
Securities of such series under the applicable Subordinated Indenture.
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<PAGE> 18
If an Event of Default with respect to Subordinated Securities of any series
then Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Subordinated Securities of such series shall
have already become due and payable, either the Trustee or the holders of not
less than 25 percent in aggregate principal amount of the Subordinated
Securities of such series then Outstanding, by notice in writing to the Company
(and to the Trustee if given by Securityholders), may declare the unpaid
principal amount (or, if the Subordinated Securities of such series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) of all the Subordinated Securities of
such series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in the applicable Subordinated Indenture
or in the Subordinated Securities of such series contained to the contrary
notwithstanding. This provision, however, is subject to the condition that, if
at any time after the unpaid principal amount (or such specified amount) of the
Subordinated Securities of such series shall have been so declared due and
payable and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered, the Company shall pay or shall deposit with
the Trustee a sum sufficient to pay all matured installments of interest, if
any, upon all of the Subordinated Securities of such series and the principal of
any and all Subordinated Securities of such series which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest, if any, to the extent that payment of such interest is enforceable
under applicable law and on such principal at the rate borne by the Subordinated
Securities of such series to the date of such payment or deposit) and the
reasonable compensation, disbursements, expenses and advances of the Trustee,
its agents, attorneys and counsel, and any and all defaults under the applicable
Subordinated Indenture, other than the nonpayment of such portion of the
principal amount of and accrued interest, if any, on Subordinated Securities of
such series which shall have become due by acceleration, shall have been cured
or shall have been waived in accordance with the applicable Subordinated
Indenture or provision deemed by the Trustee to be adequate shall have been made
therefor -- then and in every such case the holders of a majority in aggregate
principal amount of the Subordinated Securities of such series then Outstanding,
by written notice to the Company and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon. If any Event of Default with respect to the Company
specified in clause (v) or (vi) above occurs, the unpaid principal amount (or,
if the Subordinated Securities of any series then Outstanding are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of each such series) and accrued interest on all Subordinated
Securities of each series then Outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act by the Trustee
or any Securityholder. If the Trustee shall have proceeded to enforce any right
under the applicable Subordinated Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Company, the Trustee and the Securityholders shall be
restored respectively to their several positions and rights under the applicable
Subordinated Indenture, and all rights, remedies and powers of the Company, the
Trustee and the Securityholders shall continue as though no such proceeding had
been taken. Except with respect to an Event of Default pursuant to clause (i),
(ii) or (iii) above, the Trustee shall not be charged with knowledge of any
Event of Default unless written notice thereof shall have been given to the
Trustee by the Company, a Paying Agent or any Securityholder.
Each of the Subordinated Indentures provides that, subject to the duty of the
Trustee during default to act with the required standard of care, the Trustee
will be under no obligation to exercise any of its rights or powers under such
Subordinated Indenture at the request or direction of any of the holders or
Subordinated Securities issued under the such Subordinated Indenture, unless
such holders shall have offered to the Trustee reasonable security or indemnity.
No holder of any Subordinated Securities of any series then Outstanding shall
have any right by virtue of or by availing of any provision of the applicable
Subordinated Indenture to institute any suit, action or proceeding in equity or
at law upon or under or with respect to such Subordinated Indenture or the
Subordinated Securities issued under such Subordinated Indenture or for the
appointment of a receiver or trustee or similar official, or for any other
remedy under such Subordinated Indenture or thereunder, unless such holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as provided in such Subordinated
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Indenture, and unless the holders of not less than 25 percent in aggregate
principal amount of the Subordinated Securities of such series then Outstanding
shall have made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee under such Subordinated Indenture and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding. Notwithstanding any other provisions in the applicable
Subordinated Indenture, but subject to the subordination provisions of the
applicable Subordinated Indenture, the right of any holder of any Subordinated
Security to receive payment of the principal of and interest, if any, on such
Subordinated Security, on or after the respective due dates expressed in such
Subordinated Security, or, if applicable, to convert such Subordinated Security
as provided in the applicable Subordinated Indenture, or to institute suit for
the enforcement of any such payment on or after such respective dates or for the
enforcement of any such right to convert shall not be impaired or affected
without the consent of such holder.
The holders of a majority in aggregate principal amount of the Subordinated
Securities of any series then Outstanding shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to Subordinated Securities of such series; provided, that (subject to
certain exceptions) the Trustee shall have the right to decline to follow any
such direction if the Trustee shall determine upon advice of counsel that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith shall determine that the action or proceeding so directed would
involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Subordinated Securities of any series then
Outstanding may on behalf of the holders of all of the Subordinated Securities
of such series waive any past default or Event of Default under the applicable
Subordinated Indenture and its consequences except a default in the payment of
interest, if any, on, or the principal of, the Subordinated Securities of such
series. Upon any such waiver the Company, the Trustee and the holders of the
Subordinated Securities of such series shall be restored to their former
positions and rights under the applicable Subordinated Indenture, respectively;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default shall have been waived as permitted, said default or Event of Default
shall for all purposes of the applicable Subordinated Securities and the
applicable Subordinated Indenture be deemed to have been cured and to be not
continuing.
The Trustee shall, within 90 days after the occurrence of a default, with
respect to Subordinated Securities of any series then Outstanding, mail to all
holders of Subordinated Securities of such series, as the names and the
addresses of such holders appear upon the applicable Subordinated Security
register, notice of all defaults known to the Trustee with respect to such
series, unless such defaults shall have been cured before the giving of such
notice (the term "defaults" for the purpose of these provisions being hereby
defined to be the events specified in clauses (i), (ii), (iii), (iv), (v), (vi),
(vii) and (viii) of " -- Provisions Applicable Solely to Company Senior
Subordinated Debt Securities and Company Subordinated Debt Securities -- Events
of Default" above, not including periods of grace, if any, provided for therein
and irrespective of the giving of the written notice specified in clause (iv) or
(vii) but in the case of any default of the character specified in said clause
(iv) or (vii) no such notice to Securityholders shall be given until at least 60
days after the giving of written notice thereof to the Company pursuant to said
clause (iv) or (vii), as the case may be); provided, that, except in the case of
default in the payment of the principal of or interest, if any, on any of the
Subordinated Securities, or in the payment or satisfaction of any sinking fund
or other purchase obligation, the Trustee shall be protected in withholding such
notice if and so long as the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Securityholders.
The Company is required to furnish to the Trustee annually a statement as to the
fulfillment by the Company of all of its obligations under the applicable
Subordinated Indenture.
Subordination. The Subordinated Securities will be subordinate and junior in
right to payment, to the extent set forth in the applicable Subordinated
Indenture, to all Senior Indebtedness (as defined below for each of the
Subordinated Indentures) of the Company. If the Company should default in the
payment of any principal of or premium or interest on any Senior Indebtedness
when the same becomes due and payable, whether at maturity
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<PAGE> 20
or at a date fixed for prepayment or by declaration of acceleration or
otherwise, then, upon written notice of such default to the Company by the
holders of such Senior Indebtedness or any trustee therefor and subject to
certain rights of the Company to dispute such default and subject to proper
notification of the Trustee, unless and until such default shall have been cured
or waived or shall have ceased to exist, no direct or indirect payment (in cash,
property, securities, by set-off or otherwise) will be made or agreed to be made
for principal of or premium, if any, or interest, if any, on the applicable
Subordinated Securities, or in respect of any redemption, retirement, purchase
or other acquisition of the applicable Subordinated Securities other than those
made in capital stock of the Company (or cash in lieu of fractional shares
thereof) pursuant to any conversion right of the Subordinated Securities or
otherwise made in capital stock of the Company.
"Senior Indebtedness" is defined in the Senior Subordinated Debt Indenture as
Indebtedness of the Company outstanding at any time except (i) any Indebtedness
of the Company that pursuant to its terms or the terms of any agreement relating
thereto or by operation of law is subordinate or junior in right of payment to
any other Indebtedness of the Company; provided, that no Indebtedness of the
Company shall be deemed to be subordinate to any other Indebtedness of the
Company solely by virtue of any such other Indebtedness being secured or
otherwise having the benefit of any lien or security interest, (ii) any
Indebtedness as to which, by the terms of the instrument creating or evidencing
the same, it is provided that such Indebtedness is not senior in right of
payment to the Company Senior Subordinated Debt Securities, (iii) the Company
Senior Subordinated Debt Securities, (iv) the Company's subordinated
indebtedness existing on the date of the Senior Subordinated Debt Indenture, (v)
any Indebtedness of the Company to a wholly owned Subsidiary of the Company,
(vi) interest accruing after the filing of a petition initiating certain
bankruptcy or insolvency proceedings unless such interest is an allowed claim
enforceable against the Company in a proceeding under federal or state
bankruptcy laws and (vii) trade accounts payable.
"Senior Indebtedness" is defined in the Subordinated Debt Indenture as
Indebtedness of the Company outstanding at any time except (i) any Indebtedness
as to which, by the terms of the instrument creating or evidencing the same, it
is provided that such Indebtedness is not senior in right of payment to the
Company Subordinated Debt Securities, (ii) the Company Subordinated Debt
Securities, (iii) the Company's subordinated indebtedness existing on the date
of the Subordinated Debt Indenture, (iv) any Indebtedness of the Company to a
wholly owned Subsidiary of the Company, (v) interest accruing after the filing
of a petition initiating certain bankruptcy or insolvency proceedings unless
such interest is an allowed claim enforceable against the Company in a
proceeding under federal or state bankruptcy laws and (vi) trade accounts
payable.
"Indebtedness" is defined in each Subordinated Indenture as, with respect to any
Person, (i)(a) the principal of and premium and interest, if any, on
indebtedness for money borrowed of such Person evidenced by bonds, notes,
debentures or similar obligations, including any guaranty by such person of any
indebtedness for money borrowed of any other Person, whether any such
indebtedness or guaranty is outstanding on the date of such Subordinated
Indenture or is thereafter created, assumed or incurred, (b) the principal of
and premium and interest, if any, on indebtedness for money borrowed, incurred,
assumed or guaranteed by such Person in connection with the acquisition by it or
any of its subsidiaries of any other businesses, properties or other assets and
(c) lease obligations which such Person capitalizes in accordance with Statement
of Financial Accounting Standards No. 13 promulgated by the Financial Accounting
Standards Board or such other generally accepted accounting principles as may be
from time to time in effect, (ii) any other indebtedness of such Person,
including any indebtedness representing the deferred and unpaid balance of the
purchase price of any property or interest therein, including any such balance
that constitutes a trade account payable, and any guaranty, endorsement or other
contingent obligation of such Person in respect of any indebtedness of another,
which is outstanding on the date of such Subordinated Indenture or is thereafter
created, assumed or incurred by such Person and (iii) any amendments,
modifications, refundings, renewals or extensions of any indebtedness or
obligation described as Indebtedness in clause (i) or (ii) above.
If (i) without the consent of the Company a court having jurisdiction shall
enter (a) an order for relief with respect to the Company under the United
States federal bankruptcy laws, (b) a judgment, order or decree adjudging the
Company as bankrupt or insolvent or (c) an order for relief for reorganization,
arrangement, adjustment or composition of or in respect of the Company under the
United States federal bankruptcy laws or state insolvency laws or (ii) the
Company shall institute proceedings for the entry of an order for relief with
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<PAGE> 21
respect to the Company under the United States federal bankruptcy laws or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy or
insolvency proceedings against it, or shall file a petition seeking, or seek or
consent to reorganization, arrangement, composition or similar relief under the
United States federal bankruptcy laws or any applicable state law, or shall
consent to the filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official in
respect of the Company or of substantially all of its property, or the Company
shall make a general assignment for the benefit of creditors, then all Senior
Indebtedness (including any interest thereon accruing after the commencement of
any such proceedings) will first be paid in full before any payment or
distribution, whether in cash, securities or other property, is made on account
of the principal of or premium, if any, or interest, if any, on the applicable
Subordinated Securities. In such event, any payment or distribution on account
of the principal of or premium, if any, or interest, if any, on the applicable
Subordinated Securities, whether in cash, securities or other property (other
than securities of the Company or any other corporation provided for by a plan
of reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in the subordination provisions with respect to the
applicable Subordinated Securities, to the payment of all Senior Indebtedness
then outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the applicable
Subordinated Securities will be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any interest thereon accruing
after the commencement of any such proceedings) has been paid in full. In the
event of any such proceeding, after payment in full of all sums owing with
respect to Senior Indebtedness, the holders of Subordinated Securities, together
with the holders of any obligations of the Company ranking on a parity with the
Subordinated Securities issued under the applicable Subordinated Indenture, will
be entitled to be repaid from the remaining assets of the Company the amounts at
the time due and owing on account of unpaid principal of or any premium or any
interest on the Subordinated Securities issued under the applicable Subordinated
Indenture and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or obligations of the Company ranking junior to the Subordinated
Securities issued under the applicable Subordinated Indenture and such other
obligations. If, notwithstanding the foregoing, any payment or distribution on
the Subordinated Securities issued under the applicable Subordinated Indenture
of any character, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Securities issued under the applicable Subordinated Indenture, to
the payment of all Senior Indebtedness then outstanding and to any securities
issued in respect thereof under any such plan or reorganization or
readjustment), shall be received by the Trustee or any holder of any
Subordinated Securities issued under the applicable Subordinated Indenture in
contravention of any of the terms of the applicable Subordinated Indenture, such
payment or distribution will be received in trust for the benefit of, and will
be paid over or delivered and transferred to, the holders of the Senior
Indebtedness then outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all such Senior Indebtedness in
full. In the event of the failure of the Trustee or any holder to endorse or
assign any such payment, distribution or security, each holder of Senior
Indebtedness is irrevocably authorized to endorse or assign the same.
Each of the Subordinated Indentures will provide that Senior Indebtedness shall
not be deemed to have been paid in full unless the holders thereof shall have
received cash, securities or other property equal to the amount of such Senior
Indebtedness then outstanding. Upon the payment in full of all Senior
Indebtedness, the holders of Subordinated Securities of each series shall be
subrogated to all rights of any holders of Senior Indebtedness to receive any
further payments or distributions applicable to such Senior Indebtedness until
the indebtedness evidenced by the Subordinated Securities of such series shall
have been paid in full, and such payments or distributions received by such
holders, by reason of such subrogation, of cash, securities or other property
that otherwise would be paid or distributed to the holders of Senior
Indebtedness with respect to such series, shall, as between the Company and its
creditors other than the holders of such Senior Indebtedness, on the one hand,
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and such holders, on the other hand, be deemed to be a payment by the Company on
account of such Senior Indebtedness, and not on account of the Subordinated
Securities of such series.
By reason of such subordination, in the event of the insolvency of the Company,
holders of Senior Indebtedness and holders of other obligations of the Company
that are not subordinated to Senior Indebtedness may receive more, ratably, than
holders of the Subordinated Securities. Such subordination will not prevent the
occurrence of an Event of Default or limit the right of acceleration in respect
of the Subordinated Securities.
Conversion. Each of the Subordinated Indentures will provide that a series of
Subordinated Securities may be convertible into Common Stock (or cash in lieu
thereof). The following provisions will apply to Company Debt Securities that
are convertible Subordinated Securities unless otherwise provided in the
Prospectus Supplement for such Company Debt Securities.
The holder of any convertible Subordinated Securities will have the right
exercisable at any time prior to maturity, subject to prior redemption by the
Company, to convert such Subordinated Securities into shares of Common Stock at
the conversion price or conversion rate set forth in the Prospectus Supplement,
subject to adjustment. The holder of convertible Subordinated Securities may
convert any portion thereof which is $1,000 in principal amount or any integral
multiple thereof.
In certain events, the conversion price or conversion rate will be subject to
adjustment as set forth in the applicable Subordinated Indenture. Such events
include issuance of shares of Common Stock as a dividend or distribution on the
Common Stock; subdivisions, combinations and reclassifications of the Common
Stock; redemption of the preferred share purchase rights associated with the
Common Stock; the issuance to all holders of Common Stock of rights or warrants
entitling the holders thereof (for a period not exceeding 45 days) to subscribe
for or purchase shares of Common Stock at a price per share less than the then
current market price per share of Common Stock (as determined pursuant to the
applicable Subordinated Indenture); and the distribution to substantially all
holders of Common Stock of evidences of indebtedness, equity securities
(including equity interests in the Company's Subsidiaries) other than Common
Stock, or other assets (excluding cash dividends paid from surplus) or
subscription rights or warrants (other than those referred to above). No
adjustment of the conversion price or conversion rate will be required unless an
adjustment would require a cumulative increase or decrease of at least 1% in
such price or rate. The Company has been advised by its counsel that certain
adjustments in the conversion price or conversion rate in accordance with the
foregoing provisions may result in constructive distributions to either holders
of the Subordinated Securities issued under the applicable Subordinated
Indenture or holders of Common Stock that would be taxable pursuant to Treasury
Regulations issued under Section 305 of the Internal Revenue Code of 1986, as
amended. The amount of any such taxable constructive distribution will be the
fair market value of the Common Stock that is treated as having been
constructively received, such value being determined as of the time the
adjustment resulting in the constructive distribution is made.
Fractional shares of Common Stock will not be issued upon conversion, but, in
lieu thereof, the Company will pay a cash adjustment based on the then current
market price for the Common Stock. Upon conversion, no adjustments will be made
for accrued interest or dividends, and therefore convertible Subordinated
Securities surrendered for conversion between the record date for an interest
payment and the interest payment date (except convertible Subordinated
Securities called for redemption on a redemption date during such period) must
be accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive.
In the case of any consolidation or merger of the Company (with certain
exceptions) or any sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Company, the holder of
convertible Subordinated Securities, after the consolidation, merger, sale,
lease, exchange or other disposition, will have the right to convert such
convertible Subordinated Securities into the kind and amount of securities, cash
and other property that the holder would have been entitled to receive upon or
in connection with such consolidation, merger, sale, lease, exchange or other
disposition, if the holder had held the Common Stock issuable upon conversion of
such convertible Subordinated Securities issued under the applicable
Subordinated Indenture immediately prior to such consolidation, merger, sale,
lease, exchange or other disposition.
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CONCERNING THE TRUSTEES
Each of the Trustees is a depositary for funds of, makes loans to and performs
other services for the Company in the normal course of business.
In addition to serving as Trustee under the Senior Subordinated Indenture and
the Subordinated Indenture, Texas Commerce Bank also serves as Trustee under (i)
the Debenture Indenture (the "Debenture Indenture") dated as of June 15, 1992,
between the Company and Texas Commerce Bank, as trustee, and (ii) the Guarantees
of Notes of Subsidiaries Indenture (the "Guarantees Indenture") dated as of May
1, 1970, between the Company and Texas Commerce Bank, as trustee. Debt of the
Company issued pursuant to the Debenture Indenture and the Guarantees Indenture
constitutes Senior Indebtedness. As of June 30, 1995, the Company had
outstanding approximately $24 million principal amount of Senior Indebtedness
issued pursuant to the Debenture Indenture and approximately $56 million
principal amount of guarantees issued pursuant to the Guarantees Indenture.
SCI and certain of its affiliates maintain a deposit account and banking
relationship with The Bank of New York. The Bank of New York serves as Trustee
under the Senior Indenture pursuant to which unsecured debt securities of SCI
are outstanding representing approximately $836 million of Senior Indebtedness
as of June 30, 1995.
Pursuant to the Trust Indenture Act, a trustee under an indenture may be deemed
to have a conflicting interest, and may, under certain circumstances set forth
in the Trust Indenture Act, be required to resign as trustee under such
indenture, if the securities issued under such indenture are in default (as such
term is defined in such indenture) and the trustee is the trustee under another
indenture under which any other securities of the same obligor are outstanding,
subject to certain exceptions set forth in the Trust Indenture Act. In such
event, the obligor must take prompt steps to have a successor trustee appointed
in the manner provided in the indenture from which the trustee has resigned.
Pursuant to the Trust Indenture Act, Texas Commerce Bank, as trustee under the
Senior Subordinated Indenture, the Subordinated Indenture, the Debenture
Indenture and the Guarantees Indenture, could be required to resign as trustee
under one or more of such indentures should a default occur under one or more of
such indentures. In such event, the Company would be required to take prompt
steps to have a successor trustee or successor trustees appointed in the manner
provided in the applicable indenture or indentures.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 1,000,000 shares of
Preferred Stock, $1.00 par value per share (the "Preferred Stock"), and
200,000,000 shares of Common Stock. As of June 30, 1995, the Company had
outstanding 96,321,367 shares of Common Stock, and 25,356,127 shares were
reserved for future issuance. No shares of Preferred Stock were outstanding on
such date.
The following description of the Common Stock does not purport to be complete
and is qualified in its entirety by reference to applicable provisions of Texas
law, the Company's Restated Articles of Incorporation, as amended (the "Articles
of Incorporation"), the Company's Bylaws (the "Bylaws"), and the Rights
Agreement dated as of July 18, 1988, as amended (the "Rights Agreement"),
between the Company and Society National Bank, as successor agent thereunder
(the "Rights Agent").
COMMON STOCK
Subject to the prior rights of holders of shares of the Preferred Stock, the
holders of shares of Common Stock (i) are entitled to such dividends as may be
declared by the Board of Directors of the Company out of funds legally available
therefor; (ii) are entitled to one vote per share; (iii) have no preemptive or
conversion rights; (iv) are not subject to, or entitled to the benefits of, any
redemption or sinking fund provision; and (v) are entitled upon liquidation to
receive the assets of the Company remaining after the payment of corporate debts
and the satisfaction of liquidation preference of the Preferred Stock. Voting is
non-cumulative. The outstanding shares of Common Stock are fully paid and
non-assessable.
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<PAGE> 24
Under the terms of the credit agreements between the Company and its bank
lenders, there are no restrictions upon the payment of cash dividends on, or the
repurchase of, the Common Stock; except that under the terms of credit
agreements with certain banks SCI is required to maintain a net worth (as
defined) of $1.1 billion. This net worth requirement could from time to time
restrict the payment of dividends on the Common Stock. At June 30, 1995, the net
worth (as defined) was $1.469 billion.
The Transfer Agent and Registrar for the Common Stock is Society National Bank,
Houston, Texas.
CERTAIN PROVISIONS AFFECTING CONTROL OF THE COMPANY
The Articles of Incorporation contain various provisions that may be deemed to
have an anti-takeover effect. These provisions include the following: (i) the
requirement of a four-fifths vote of outstanding shares of capital stock (a) to
approve the merger of consolidation of the Company, or the exchange by the
Company of its securities, with a holder of 10% or more of the Company's capital
stock, (b) to remove directors with or without cause and (c) to amend or repeal
any of these provisions; (ii) the creation of a classified Board of Directors
consisting of three classes; (iii) the establishment of a minimum of nine and a
maximum of 15 directors; (iv) the ability of the directors, by four-fifths vote,
to remove a director subject to a majority vote of the shareholders; and (v) the
right of directors to fill vacancies on the board without the approval of
shareholders.
SHAREHOLDER RIGHTS PLAN
On July 18, 1988, the Board of Directors of the Company (i) declared a dividend
of one preferred share purchase right (a "Right") for each share of Common Stock
outstanding at the close of business on July 28, 1988 (the "Record Date") and
(ii) provided that one Right will be issued with each share of Common Stock that
shall become outstanding after the Record Date and prior to the earliest of the
Distribution Date (as hereinafter defined), the date the Rights are redeemed or
the date the Rights expire. Each Right entitles the registered holder to
purchase from the Company one one-hundred fiftieth interest in a share of Series
C Junior Participating Preferred Stock, $1.00 par value (a "Preferred Share"),
of the Company, at a price of $56 2/3 per one-hundred fiftieth interest (the
"Purchase Price"), upon the terms and subject to the conditions set forth in the
Rights Agreement.
Until the earlier of (i) ten days after a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the Common Stock outstanding or (ii) ten
business days after the commencement of, or public announcement of, a tender or
exchange offer the consummation of which would result in beneficial ownership by
a person or group of 20% or more of the Common Stock outstanding (the earlier of
such dates being called the "Distribution Date"), the Rights are evidenced, with
respect to any certificate for Common Stock outstanding as of the Record Date,
by such certificate together with a copy of a summary of rights and, with
respect to any certificate for Common Stock issued after the Record Date and
before the Distribution Date (or earlier redemption or expiration of the
Rights), by such certificate, which will bear notation incorporating the Rights
Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
(i) the Rights will be transferred with and only with the Common Stock and (ii)
the surrender for transfer of any certificate for Common Stock will also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of Common Stock as of the
close of business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire on
July 28, 1998, unless extended or earlier redeemed by the Company as described
below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment to prevent dilution in the event of certain actions taken by the
Company.
If the Company is acquired in a merger or other business combination or 50% or
more of its consolidated assets or earning power is sold, each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current Exercise Price (defined below) of the Right, that number of shares of
common stock of the Acquiring Person that, at the time of such transaction, will
have a market value of two times the exercise
22
<PAGE> 25
price of the Right. If any person becomes an Acquiring Person, each holder of a
Right, other than the Acquiring Person, will thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundred fiftieths of a Preferred Share
for which a Right is then exercisable (the "Exercise Price"), and in lieu of
Preferred Shares, such number of shares of Common Stock as shall equal the
result obtained by dividing the Exercise Price by 50% of the then current market
price per share of Common Stock at the date such person becomes an Acquiring
Person.
Under certain circumstances, after a person becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by the Acquiring Person, which are void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
At any time before a person has become an Acquiring Person, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right,
subject to adjustment (the "Redemption Price"). Immediately upon the action of
the Board of Directors to redeem the Rights, the Company will announce the
redemption, the right to exercise the Rights will terminate, and the only right
of the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause substantial
dilution to a person or group that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Company since the Board of Directors
may, at its option, at any time prior to the time a person has become an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at the Redemption Price.
PREFERRED STOCK
Under the Articles of Incorporation, SCI has the authority to issue 1,000,000
shares of Preferred Stock. The Board of Directors of SCI is empowered, without
approval of the shareholders, to cause shares of Preferred Stock to be issued in
one or more series, with the number of shares of each series and the rights,
preferences and limitations of each series to be determined by it. Among the
specific matters that may be determined by the Board of Directors are the rate
of dividends, redemption and conversion prices and terms and amounts payable in
the event of liquidation. Dividends on the Preferred Stock, both for the current
period and all past periods, must be paid or set apart for payment before any
dividends (other than in stock junior to the Preferred Stock) can be paid on the
Common Stock and before any other distribution on or redemption of any Common
Stock by the Company. The holders of Preferred Stock will be entitled to one
vote per share in the election of directors and on all matters submitted to
shareholders. The Company may not, without the approval of the holders of at
least two-thirds of the outstanding shares of Preferred Stock (and subject to
the provisions of the Articles of Incorporation referred to under "-- Certain
Provisions Affecting Control of the Company" above), among other things, amend
or repeal any provision of, or add any provision to, the Articles of
Incorporation or Bylaws of the Company if such action would alter or change the
preferences, rights, privileges or powers of, or the restrictions provided for
the benefit of, the Preferred Stock. Except for matters on which the Preferred
Stock is entitled to vote as a class, shares of outstanding Preferred Stock vote
together with the Common Stock. Voting is non-cumulative. If dividends payable
on any series shall be in arrears in an amount equivalent to six dividend
payments, the holders of Preferred Stock voting as a class have the right to
elect two directors to the Board of Directors to serve until all past due
dividends have been paid. Issuance of Preferred Stock could involve dilution of
the equity of the holders of Common Stock and restriction on the rights of such
shareholders to receive dividends. The Board of Directors has designated and
reserved for issuance 950,000 shares of the Company's Preferred Stock as Series
C Junior Participating Preferred Stock, which may be issued upon the exercise of
the preferred share purchase rights that are associated with the Common Stock.
See "-- Shareholder Rights Plan" above.
23
<PAGE> 26
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants (which may be titled either
"options" or "warrants") for the purchase of Common Stock. The Common Stock
Warrants may be issued independently or together with any Securities offered by
any Prospectus Supplement and may be attached to or separate from such
Securities. Each series of Common Stock Warrants will be issued under a separate
warrant agreement (a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as Warrant Agent, all as set forth in the
Prospectus Supplement relating to the particular issue of offered Common Stock
Warrants. The Warrant Agent will act solely as an agent of the Company in
connection with certificates representing Common Stock Warrants (the "Common
Stock Warrant Certificates") and will not assume any obligation or relationship
of agency or trust for or with any holders of Common Stock Warrant Certificates
or beneficial owners of Common Stock Warrants. The form of Warrant Agreement,
including the form of Common Stock Warrant Certificate representing the Common
Stock Warrants, is filed as an exhibit to the Registration Statement to which
this Prospectus pertains. The following summaries of certain provisions of the
form of Warrant Agreement and Common Stock Warrant Certificate do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Warrant Agreement and the Common Stock Warrant
Certificate.
GENERAL
Reference is made to the accompanying Prospectus Supplement relating to the
Common Stock Warrants, if Common Stock Warrants are offered, for the following
terms of the Common Stock Warrants:
(i) the offering price;
(ii) the number of shares of Common Stock purchasable upon exercise of each such
Common Stock Warrant and the price at which such number of shares of Common
Stock may be purchased upon such exercise;
(iii) the date on which the right to exercise such Common Stock Warrants shall
commence and the date on which such right shall expire (the "Expiration Date");
and
(iv) any other terms of such Common Stock Warrants (and the accompanying
Prospectus Supplement may state that any of the terms set forth herein is
inapplicable to such series).
Common Stock Warrants for the purchase of Common Stock will be offered and
exercisable for U.S. dollars only and will be in registered form only.
Common Stock Warrant Certificates may be exchanged for new Common Stock Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration or transfer, and may be exercised at the corporate
trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement. Prior to the exercise of any Common Stock
Warrants, holders of such Common Stock Warrants will not have any rights of
holders of the Common Stock purchasable upon such exercise, including the right
to receive payments of dividends, if any, on the Common Stock purchasable upon
such exercise or to exercise any applicable right to vote.
EXERCISE OF COMMON STOCK WARRANTS
Each Common Stock Warrant will entitle the holder thereof to purchase such
shares of Common Stock at such exercise price as shall in each case be set forth
in, or calculable from, the Prospectus Supplement relating to the offered Common
Stock Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company)
unexercised Common Stock Warrants will become void.
Common Stock Warrants may be exercised by delivering to the Warrant Agent
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Common Stock purchasable upon such exercise together
with certain information set forth on the reverse side of the Common Stock
Warrant Certificate. Common Stock Warrants will be deemed to have been exercised
upon receipt of payment of the exercise price, subject to the receipt, within
five business days, of the Common Stock Warrant Certificate evidencing such
Common Stock Warrants. Upon receipt of such payment and the Common Stock Warrant
24
<PAGE> 27
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement, the Company will, as soon as practicable, issue and deliver the
Common Stock purchasable upon such exercise. If fewer than all of the Common
Stock Warrants represented by such Common Stock Warrant Certificate are
exercised, a new Common Stock Warrant Certificate will be issued for the
remaining amount of Common Stock Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
The Warrant Agreement for a series of Common Stock Warrants may be amended or
supplemented without the consent of the holders of the Common Stock Warrants
issued thereunder to effect changes that are not inconsistent with the
provisions of the Common Stock Warrants and that do not adversely affect the
interests of the holders of the Common Stock Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the exercise
price of, and the number of shares of Common Stock covered by, a Common Stock
Warrant are subject to adjustment in certain events, including: (i) the issuance
of Common Stock as a dividend or distribution on the Common Stock; (ii)
subdivisions and combinations of the Common Stock; (iii) the issuance to all
holders of Common Stock of certain rights or warrants entitling them to
subscribe for or purchase Common Stock within 45 days after the date fixed for
the determination of the shareholders entitled to receive such rights or
warrants, at less than the current market price (as defined in the Warrant
Agreement for such series of Common Stock Warrants); and (iv) the distribution
to all holders of Common Stock of evidences of indebtedness or assets of the
Company (excluding certain cash dividends and distributions described below) or
rights or warrants (excluding those referred to above). If the Company shall
distribute any rights or warrants to acquire capital stock pursuant to clause
(iv) above (the "Capital Stock Rights"), pursuant to which separate certificates
representing such Capital Stock Rights will be distributed subsequent to the
initial distribution of such Capital Stock Rights (whether or not such
distribution shall have occurred prior to the date of the issuance of a series
of Common Stock Warrants), such subsequent distribution shall be deemed to be
the distribution of such Capital Stock Rights; provided that the Company may, in
lieu of making any adjustment in the exercise price of, and the number of shares
of Common Stock covered by, a Common Stock Warrant upon a distribution of
separate certificates representing such Capital Stock Rights, make proper
provision so that each holder of such a Common Stock Warrant who exercises such
Common Stock Warrant (or any portion thereof) (a) before the record date for
such distribution of separate certificates shall be entitled to receive upon
such exercise shares of Common Stock issued with Capital Stock Rights and (b)
after such record date and prior to the expiration, redemption or termination of
such Capital Stock Rights shall be entitled to receive upon such exercise, in
addition to the shares of Common Stock issuable upon such exercise, the same
number of such Capital Stock Rights as would a holder of the number of shares of
Common Stock that such Common Stock Warrant so exercised would have entitled the
holder thereof to acquire in accordance with the terms and provisions applicable
to the Capital Stock Rights if such Common Stock Warrant was exercised
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment required pursuant to
clause (iv) of this paragraph.
No adjustment in the exercise price of, and the number of shares of Common Stock
covered by, a Common Stock Warrant will be made for regular quarterly or other
periodic or recurring cash dividends or distributions or for cash dividends or
distributions to the extent paid from retained earnings. No adjustment will be
required unless such adjustment would require a change of at least 1% in the
exercise price then in effect; provided that any such adjustment not so made
will be carried forward and taken into account in any subsequent adjustment; and
provided further that any such adjustment not so made shall be made no later
than three years after the occurrence of the event requiring such adjustment to
be made or carried forward. Except as stated above, the exercise price of, and
the number of shares of Common Stock covered by, a Common Stock Warrant will not
be adjusted for the issuance of Common Stock or any securities convertible into
or exchangeable for Common Stock, or securities carrying the right to purchase
any of the foregoing.
25
<PAGE> 28
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Company or (iii) a sale or conveyance to
another corporation of the property and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which holders of the
Company's Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in exchange for such
Common Stock, the holders of the Common Stock Warrants then outstanding will be
entitled thereafter to convert such Common Stock Warrants into the kind and
amount of shares of stock and other securities or property which they would have
received upon such reclassification, change, consolidation, merger, sale or
conveyance had such Common Stock Warrants been exercised immediately prior to
such reclassification, change, consolidation, merger, sale or conveyance.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents. The distribution of
the Securities may be effected from time to time in one or more transactions at
a fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices.
In connection with the sale of Securities, underwriters may receive compensation
from the Company or from purchasers of Securities for whom they may act as
agents in the form of discounts, concessions or commissions. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of
Securities may be deemed to be underwriters, and any discounts or commissions
received by them from the Company, and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the Act.
Any such underwriter or agent will be identified, and any such compensation
received from the Company will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company, pursuant to
contracts providing for payments and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Company. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the offered
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such other
agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by Fulbright & Jaworski L.L.P., Houston, Texas, special counsel for the
Company. Certain legal matters in connection with the Securities will be passed
upon for any underwriters by Cahill Gordon & Reindel (a partnership including a
professional corporation), New York, New York.
26
<PAGE> 29
EXPERTS
The consolidated financial statements of Service Corporation International at
December 31, 1994 and 1993, and for the years then ended appearing in Service
Corporation International's Annual Report (Form 10-K) for the year ended
December 31, 1994, have been audited by Coopers & Lybrand L.L.P., independent
accountants, and for the year ended December 31, 1992, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their respective
reports thereon incorporated herein by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Omnium de Gestion et de Financement
S.A. for the years ended December 31, 1994 and 1993, have been incorporated
herein in reliance upon the reports of Barbier Frinault & Associes, Membre d'
Arthur Andersen & Co., SC and PGA, independent accountants, appearing herein
upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Gibraltar Mausoleum Corporation and
subsidiaries for the year ended September 30, 1994, included in the Form 8-K
dated September 5, 1995 of Service Corporation International and incorporated
herein by reference have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated herein by reference
in reliance upon the report of Ernst & Young LLP given upon the authority of
such firm as experts in accounting and auditing.
27
<PAGE> 30
[SCI LOGO]
<PAGE> 31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate (except for the Securities and Exchange
Commission (the "Commission") registration fee) of the fees and expenses payable
by the Company in connection with the distribution of the Securities:
<TABLE>
<S> <C>
SEC registration fee........................................... $ 306,462
Printing costs................................................. 375,000
Legal fees and expenses........................................ 200,000
Accounting fees and expenses................................... 25,000
Blue Sky fees and expenses..................................... 45,000
Trustee fees and expenses...................................... 24,000
Rating agency fee.............................................. 250,000
Miscellaneous.................................................. 25,000
----------
Total................................................ $1,250,462
=========
</TABLE>
---------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Texas corporation.
Article 2.02-1 of the Texas Business Corporation Act (the "TBCA") provides that
any director or officer of a Texas corporation may be indemnified against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by him in connection with or in defending any action, suit or
proceeding in which he is or is threatened to be made a named defendant by
reason of his position as director or officer, provided that he conducted
himself in good faith and reasonably believed that, in the case of conduct in
his official capacity as director or officer, such conduct was in the
corporation's best interests, or, in all other cases, that such conduct was not
opposed to the corporation's best interests. In the case of any criminal
proceeding, a director or officer may be indemnified only if he had no
reasonable cause to believe his conduct was unlawful. If a director or officer
is wholly successful, on the merits or otherwise, in connection with such a
proceeding, such indemnification is mandatory.
Under the Company's Restated Articles of Incorporation, as amended (the
"Articles of Incorporation"), no director of the registrant will be liable to
the registrant or any of its shareholders for monetary damages for an act or
omission in the director's capacity as a director, except for liability (i) for
any breach of the director's duty of loyalty to the registrant or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for any transaction
for which the director received an improper benefit, whether or not the benefit
resulted from an action taken within the scope of the director's office, (iv)
for acts or omissions for which the liability of a director is expressly
provided by statute, or (v) for acts related to an unlawful stock repurchase or
dividend payment. The Articles of Incorporation further provide that, if the
statutes of Texas are amended to further limit the liability of a director, then
the liability of the Company's directors will be limited to the fullest extent
permitted by any such provision.
The Company's Bylaws provide for indemnification of officers and directors of
the registrant and persons serving at the request of the registrant in such
capacities for other business organizations against certain losses, costs,
liabilities and expenses incurred by reason of their positions with the
registrant or such other business organizations. The Company also has policies
insuring its officers and directors and certain officers and directors of its
wholly owned subsidiaries against certain liabilities for actions taken in such
capacities, including liabilities under the Securities Act of 1933, as amended
(the "Act").
II-1
<PAGE> 32
Reference is made to the Forms of Underwriting Agreements, filed as Exhibits 1.1
and 1.2 hereto, which contain provisions for indemnification of each of the
Company, its directors, officers and any controlling persons, by the
Underwriters against certain liabilities for information furnished by the
Underwriters.
For a statement of the Company's undertakings with respect to indemnification of
directors and officers, see Item 17 below.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
*1.1 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Equity Securities.
*1.2 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Company Debt Securities.
3.1 -- Restated Articles of Incorporation, as amended. (Incorporated by
reference to Exhibit 3.1 to Registration Statement No. 2-50721 on
Form S-1).
3.2 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit (4)(i)1 to Form 10-Q for the
fiscal quarter ended July 31, 1982).
3.3 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.1 to Form 10-Q for the fiscal
quarter ended July 31, 1983).
3.4 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.7 to Registration Statement
No. 33-8727 on Form S-3).
3.5 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to
Registration Statement No. 33-16678 on Form S-4).
3.6 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.8 to Registration Statement
No. 33-47097 on Form S-4).
3.7 -- Bylaws, as amended. (Incorporated by reference to Exhibit 3.7 to Form
10-K for the fiscal year ended December 31, 1991).
4.1 -- Senior Indenture, dated as of February 1, 1993, between SCI and the
Bank of New York, as Trustee. (Incorporated by reference to Exhibit
4.1 to Form 8-K dated January 26, 1993).
4.2 -- Senior Subordinated Indenture, dated as of , 1995, between
SCI and Texas Commerce Bank National Association, as Trustee.
(Incorporated by reference to Exhibit 4.2 to Registration Statement
No. 33-56069 on Form S-3).
4.3 -- Subordinated Indenture, dated as of September 1, 1991, between SCI
and Texas Commerce National Bank Association, as Trustee.
(Incorporated by reference to Exhibit 4.1 to Form 8-K dated October
23, 1991).
4.7 -- Rights Agreement dated as of July 18, 1988 between the Company and
Texas Commerce Bank National Association. (Incorporated by reference
to Exhibit 1 to Form 8-K dated July 18, 1988).
4.8 -- Amendment, dated as of May 10, 1990, to the Rights Agreement, dated
as of July 18, 1988, between the Company and Texas Commerce Bank
National Association. (Incorporated by reference to Exhibit 1 to Form
8-K dated May 10, 1990).
4.9 -- Agreement Appointing a Successor Rights Agent under Rights Agreement,
dated as of June 1, 1990, by the Company and Ameritrust Company
National Association. (Incorporated by reference to Exhibit 4.1 to
Form 10-Q for the fiscal quarter ended June 30, 1990).
*4.10 -- Undertaking to furnish instruments relating to long-term debt.
*5.1 -- Opinion of Fulbright & Jaworski L.L.P. regarding the Securities.
</TABLE>
II-2
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
12.1 -- Ratio of Earnings to Fixed Charges. (Incorporated by reference to
Exhibit 12.1 to Form 10-Q for the fiscal quarter ended June 30,
1995.)
12.2 -- Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements. (Incorporated by reference to Exhibit 12.1 to
Form 10-K for the fiscal year ended December 31, 1994).
12.3 -- Ratio of Earnings to Fixed Charges, (incorporated by reference to
Exhibit 12.2 to Form 10-Q for the fiscal quarter ended March 31,
1995).
*23.1 -- Consent of Fulbright & Jaworski L.L.P. (included in their opinion
filed as Exhibit 5.1).
**23.2 -- Consent of Independent Accountants (Coopers & Lybrand L.L.P.).
**23.3 -- Consent of Independent Auditors (Ernst & Young LLP).
**23.4 -- Consent of Independent Accountants (Barbier Frinault & Associes,
Membre d' Arthur Andersen & Co., SC and PGA).
**23.5 -- Consent of Independent Auditors (Ernst & Young LLP).
*24 -- Powers of Attorney.
*25.1 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Debt Securities to be issued
pursuant to the Senior Debt Indenture, dated as of February 1, 1993,
between SCI and The Bank of New York, as Trustee.
*25.2 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Subordinated Debt Securities to be
issued pursuant to the Senior Subordinated Debt Indenture, dated as
of , 1995, between SCI and Texas Commerce Bank
National Association, as Trustee.
*25.3 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Subordinated Debt Securities to be issued
pursuant to the Subordinated Debt Indenture, dated as of September 1,
1991, among SCI and Texas Commerce Bank National Association, as
Trustee.
</TABLE>
---------------
* Previously filed.
** Filed herewith.
(b) FINANCIAL STATEMENT SCHEDULES.
Financial statement schedules for the three years ended December 31, 1994.
<TABLE>
<CAPTION>
SCHEDULE
<S> <C>
II Valuation and Qualifying Accounts
</TABLE>
The Information required by Schedule II for the three years ended December 31,
1994 is incorporated herein by reference to the Company's Annual Report on Form
10-K filed with the Securities and Exchange Commission for the fiscal year ended
December 31, 1994, as amended.
ITEM 17. UNDERTAKINGS.
(a) The undersigned hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
II-3
<PAGE> 34
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned hereby undertake that, for purposes of determining any
liability under the Act, each filing of SCI's annual report pursuant to Section
13(a) or 15(d) or the Exchange Act (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the undersigned
pursuant to the foregoing provisions, or otherwise, the undersigned have been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. If a
claim for indemnification against such liabilities (other than the payment by
the undersigned of expenses incurred or paid by a director, officer or
controlling person of the undersigned in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the undersigned will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned hereby undertake to provide to the underwriters at the
closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned hereby undertake that:
(1) For purposes of determining any liability under the Act, the information
omitted from the form of prospectus filed as part of a registration statement in
reliance upon Rule 430A and contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be
deemed to be part of the registration statement as of the time it was declared
effective.
(2) For purposes of determining any liability under the Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned hereby undertake to file an application for the purpose of
determining the eligibility of the applicable trustees to act under subsection
(a) of Section 310 of the Trust Indenture Act, as amended, in accordance with
the Rules and Regulations prescribed by the Commission under Section 305(b)(2)
of that Act.
II-4
<PAGE> 35
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SERVICE CORPORATION
INTERNATIONAL CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS, ON THIS 12TH DAY OF
SEPTEMBER, 1995.
SERVICE CORPORATION INTERNATIONAL
By: /s/ JAMES M. SHELGER
--------------------------------
James M. Shelger
Senior Vice President, General
Counsel and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and September 12, 1995
------------------------------------------- Chief Executive Officer
R. L. Waltrip
* Senior Vice President September 12, 1995
------------------------------------------- and Chief Financial
George R. Champagne Officer (Principal
Financial Officer)
* Managing Director -- September 12, 1995
------------------------------------------- Financial Reporting
Wesley T. McRae (Principal Accounting
Officer)
* Director September 12, 1995
-------------------------------------------
Anthony L. Coelho
* Director September 12, 1995
-------------------------------------------
Douglas M. Conway
* Director September 12, 1995
-------------------------------------------
Jack Finkelstein
* Director September 12, 1995
-------------------------------------------
A. J. Foyt, Jr.
* Director September 12, 1995
-------------------------------------------
James J. Gavin, Jr.
* Director September 12, 1995
-------------------------------------------
James H. Greer
* Director September 12, 1995
-------------------------------------------
L. William Heiligbrodt
* Director September 12, 1995
-------------------------------------------
B. D. Hunter
</TABLE>
II-5
<PAGE> 36
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director September 12, 1995
--------------------------------------------
John W. Mecom, Jr.
* Director September 12, 1995
--------------------------------------------
Clifton H. Morris, Jr.
* Director September 12, 1995
--------------------------------------------
Samuel W. Rizzo
* Director September 12, 1995
--------------------------------------------
E. H. Thornton, Jr.
* Director September 12, 1995
--------------------------------------------
W. Blair Waltrip
* Director September 12, 1995
--------------------------------------------
Edward E. Williams
*By: /s/ JAMES M. SHELGER
----------------------------------------
James M. Shelger
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 37
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
*1.1 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Equity Securities.
*1.2 -- Form of Underwriting Agreement between SCI and the Underwriter(s)
with respect to Company Debt Securities.
3.1 -- Restated Articles of Incorporation, as amended. (Incorporated by
reference to Exhibit 3.1 to Registration Statement No. 2-50721 on
Form S-1).
3.2 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit (4)(i)1 to Form 10-Q for the
fiscal quarter ended July 31, 1982).
3.3 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.1 to Form 10-Q for the fiscal
quarter ended July 31, 1983).
3.4 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.7 to Registration Statement
No. 33-8727 on Form S-3).
3.5 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 4.1 to Amendment No. 3 to
Registration Statement No. 33-16678 on Form S-4).
3.6 -- Articles of Amendment to Restated Articles of Incorporation.
(Incorporated by reference to Exhibit 3.8 to Registration Statement
No. 33-47097 on Form S-4).
3.7 -- Bylaws, as amended. (Incorporated by reference to Exhibit 3.7 to Form
10-K for the fiscal year ended December 31, 1991).
4.1 -- Senior Indenture, dated as of February 1, 1993, between SCI and the
Bank of New York, as Trustee. (Incorporated by reference to Exhibit
4.1 to Form 8-K dated January 26, 1993).
4.2 -- Senior Subordinated Indenture, dated as of , 1995, between
SCI and Texas Commerce Bank National Association, as Trustee.
(Incorporated by reference to Exhibit 4.2 to Registration Statement
No. 33-56069 on Form S-3).
4.3 -- Subordinated Indenture, dated as of September 1, 1991, between SCI
and Texas Commerce National Bank Association, as Trustee.
(Incorporated by reference to Exhibit 4.1 to Form 8-K dated October
23, 1991).
4.7 -- Rights Agreement dated as of July 18, 1988 between the Company and
Texas Commerce Bank National Association. (Incorporated by reference
to Exhibit 1 to Form 8-K dated July 18, 1988).
4.8 -- Amendment, dated as of May 10, 1990, to the Rights Agreement, dated
as of July 18, 1988, between the Company and Texas Commerce Bank
National Association. (Incorporated by reference to Exhibit 1 to Form
8-K dated May 10, 1990).
4.9 -- Agreement Appointing a Successor Rights Agent under Rights Agreement,
dated as of June 1, 1990, by the Company and Ameritrust Company
National Association. (Incorporated by reference to Exhibit 4.1 to
Form 10-Q for the fiscal quarter ended June 30, 1990).
*4.10 -- Undertaking to furnish instruments relating to long-term debt.
*5.1 -- Opinion of Fulbright & Jaworski L.L.P. regarding the Securities.
12.1 -- Ratio of Earnings to Fixed Charges. (Incorporated by reference to
Exhibit 12.1 to Form 10-Q for the fiscal quarter ended June 30,
1995.)
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
12.2 -- Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements. (Incorporated by reference to Exhibit 12.1 to
Form 10-K for the fiscal year ended December 31, 1994).
12.3 -- Ratio of Earnings to Fixed Charges, (incorporated by reference to
Exhibit 12.2 to Form 10-Q for the fiscal quarter ended March 31,
1995).
*23.1 -- Consent of Fulbright & Jaworski L.L.P. (included in their opinion
filed as Exhibit 5.1).
**23.2 -- Consent of Independent Accountants (Coopers & Lybrand L.L.P.).
**23.3 -- Consent of Independent Auditors (Ernst & Young LLP).
**23.4 -- Consent of Independent Accountants (Barbier Frinault & Associes,
Membre d' Arthur Andersen & Co., SC and PGA).
**23.5 -- Consent of Independent Auditors (Ernst & Young LLP).
*24 -- Powers of Attorney.
*25.1 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Debt Securities to be issued
pursuant to the Senior Debt Indenture, dated as of February 1, 1993,
between SCI and The Bank of New York, as Trustee.
*25.2 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Senior Subordinated Debt Securities to be
issued pursuant to the Senior Subordinated Debt Indenture, dated as
of , 1995, between SCI and Texas Commerce Bank
National Association, as Trustee.
*25.3 -- Statement of Eligibility and Qualification Under the Trust Indenture
Act of 1939 of a Corporation Designated to Act as Trustee on Form T-1
with respect to the Company Subordinated Debt Securities to be issued
pursuant to the Subordinated Debt Indenture, dated as of September 1,
1991, among SCI and Texas Commerce Bank National Association, as
Trustee.
</TABLE>
---------------
* Previously filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 2 to
the registration statement on Form S-3 (File No. 33-60683) of our report, which
includes an explanatory paragraph pertaining to accounting changes, dated March
10, 1995 on our audits of the consolidated financial statements and financial
statement schedule of Service Corporation International as of December 31, 1994
and 1993, and for the years then ended, which report is included in the Annual
Report on Form 10-K for the year ended December 31, 1994. We also consent to
the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Houston, Texas
September 13, 1995
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 2 to Form S-3 (Registration Statement No. 33-60683) and related
Prospectus of Service Corporation International for the registration of up to
$1,000,000,000 of (i) debt securities (the "Company Debt Securities"), which
may be any of senior debt securities (the "Company Senior Debt Securities"),
senior subordinated debt securities (the "Company Senior Subordinated Debt
Securities") or subordinated debt securities (the "Company Subordinated Debt
Securities"), in each case consisting of debentures, notes and/or other
unsecured evidences of indebtedness, (ii) Common Stock, par value $1.00 per
share ("Common Stock" or "SCI Common Stock"), along with Series C Junior
Participating Preferred Stock Purchase Rights, and (iii) warrants to purchase
Common Stock ("Common Stock Warrants") and to the incorporation by reference
therein of our report dated February 8, 1993, with respect to the consolidated
financial statements and schedules of Service Corporation International
included in its Annual Report (Form 10K) for the year ended December 31, 1992,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
September 13, 1995
<PAGE> 1
EXHIBIT 23.4
BARBIER FRINAULT & ASSOCIES PGA
Membre d'Arthur Andersen & Co, SC Tour Franklin
Tour Gan - Cedex 13 101, Terrasse Boieldieu - Cedex 11
92082 Paris-La Defense 2 92082 Paris-La Defense 8
As independant accountants, we hereby consent to the incorporation by reference
in Amendment No. 2 to the registration statement of Service Corporation
International, on Form S-3 (File No 33-60683) of our report dated April 6, 1995,
on our audits of the consolidated financial statemnts of Omnium de Gestion et
de Financement S.A. as of December 31, 1994 and 1993, and for the two years
then ended, which report is included in Form 8-K dated September 5, 1995.
We also consent to the reference to our firm under the caption "Experts".
Paris-La Defense, France,
September 13, 1995
/s/ CHRISTIAN CHOCHON /s/ BRUNO BIZET
----------------------------- -------------------------------
BARBIER FRINAULT & ASSOCIES PGA
Christian Chochon Bruno Bizet
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in Amendment
No. 2 to the Registration Statement No. 33-60683 on Form S-3 and related
Prospectus of Service Corporation International for the registration of
$1,000,000,000 of debt securities, common stock and common stock warrants and to
the incorporation by reference therein of our report dated December 22, 1994,
with respect to the consolidated financial statements of Gibraltar Mausoleum
Corporation and subsidiaries for the year ended September 30, 1994 included in
the Form 8-K filed by Service Corporation International September 5, 1995 with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
September 13, 1995
Indianapolis, Indiana
