SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
EQUITY CORPORATION INTERNATIONAL
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------
(4) Date Filed:
---------------------------------------------------------------
<PAGE>
[ECI LETTERHEAD]
EQUITY CORPORATION INTERNATIONAL
415 South First Street, Suite 210
LUFKIN, TEXAS 75901
April 23, 1997
TO OUR STOCKHOLDERS:
You are cordially invited to attend the 1996 Annual Meeting of
Stockholders of Equity Corporation International, which will be held in the
First Floor Conference Room at 415 South First Street, Lufkin, Texas, on
Wednesday, May 21, 1997 at 10:00 a.m., local time. A Notice of the Annual
Meeting, Proxy Statement and form of proxy are enclosed with this letter.
We encourage you to read the Notice of the Annual Meeting and Proxy
Statement so that you may be informed about the business to come before the
meeting. Your participation in the Company's business is important, regardless
of the number of shares that you hold. To ensure your representation at the
meeting, please promptly sign and return the accompanying proxy card in the
postage-paid envelope.
In addition to the formal items of business to be brought before the
meeting, there will be a report on the Company's operations during 1996,
followed by a question and answer period.
We look forward to seeing you on May 21st.
Sincerely,
JAMES P. HUNTER, III
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 1997
To Our Stockholders:
The 1997 Annual Meeting of Stockholders of Equity Corporation
International will be held at 415 South First Street, First Floor Conference
Room, Lufkin, Texas, on Wednesday, May 21, 1997 at 10:00 a.m., local time, for
the following purposes:
1. To elect two Class II directors to serve until the annual
stockholders' meeting in 2000, or until their successors have been
elected and qualified;
2. To approve the appointment of Coopers & Lybrand L.L.P. as independent
accountants for the fiscal year ending December 31, 1997;
3. To approve the 1997 Equity Corporation International Employee Stock
Purchase Plan; and
4. To act upon such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on March 27, 1997
will be entitled to notice of and to vote at the meeting. A majority of the
outstanding stock entitled to vote is required for a quorum.
It is important that your shares be represented at the annual meeting
regardless of whether you plan to attend. THEREFORE, PLEASE MARK, SIGN AND DATE
THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING POSTPAID ENVELOPE AS
PROMPTLY AS POSSIBLE. If you are present at the meeting, and wish to do so, you
may revoke the proxy and vote in person.
By Order of the Board of Directors,
JAMES P. HUNTER, III
CHAIRMAN, PRESIDENT,
CHIEF EXECUTIVE OFFICER AND SECRETARY
Lufkin, Texas
April 23, 1996
<PAGE>
EQUITY CORPORATION INTERNATIONAL
415 SOUTH FIRST STREET, SUITE 210
LUFKIN, TEXAS 75901
--------------------------
PROXY STATEMENT
--------------------------
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of Equity
Corporation International, a Delaware corporation (the "Company"), for use at
the 1997 Annual Meeting of Stockholders (the "Meeting") to be held on May 21,
1997 and at any adjournments thereof. The Meeting will be held at 10:00 a.m.,
local time, at 415 South First Street, First Floor Conference Room, Lufkin,
Texas.
If the accompanying proxy is properly executed and returned, the shares it
represents will be voted at the Meeting in accordance with the directions noted
thereon or, if no direction is indicated, it will be voted in favor of the
proposals described in this Proxy Statement. In addition, the proxy confers
discretionary authority in the persons named in the proxy authorizing those
persons to vote, in their discretion, on any other matters properly presented at
the Meeting. The Board of Directors is not currently aware of any such other
matters. Any stockholder giving a proxy has the power to revoke it by oral or
written notice to the Secretary of the Company at any time before it is voted.
The Company will bear the cost of preparing and mailing proxy materials as
well as the cost of solicitation of proxies. The Company will reimburse banks,
brokerage firms, custodians, nominees and fiduciaries for their expenses in
sending proxy materials to the beneficial owners of the Company's shares. The
Company has retained American Stock Transfer & Trust Company ("American") to
assist in the solicitation of proxies. No additional fee beyond the $1,000
monthly fee paid to American to act as the Company's transfer agent, together
with American's out-of-pocket expenses, will be paid to American. In addition to
solicitation by mail, certain directors, officers and regular employees of the
Company and American may solicit proxies by telegram, facsimile or by hand
delivery.
The approximate date on which this Proxy Statement and the accompanying
proxy will first be sent to stockholders is April 23, 1997.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
At the close of business on March 27, 1997, the record date for the
determination of stockholders of the Company entitled to receive notice of and
to vote at the Meeting or any adjournments thereof, 20,695,983 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), were
outstanding. There are no other voting securities outstanding. Each share of
Common Stock is entitled to one vote upon each of the matters to be voted on at
the Meeting. The presence, in person or by proxy, of at least a majority of the
outstanding shares of Common Stock is required for a quorum. Directors of the
Company are elected by a plurality of the votes cast for directors. Accordingly,
shares that are withheld and broker non-votes will have no effect on the outcome
of the election of directors. Any other matters submitted to be voted upon will
be determined by a majority of the votes cast. Abstentions are counted as
"shares present" at the meeting for purposes of determining the presence of a
quorum and have the effect of a vote "against" any matter as to which they are
specified. Broker non-votes with respect to any matter are not considered
"shares present" and will not affect the outcome of the vote on such matter.
The following table sets forth, as of March 27, 1997, certain information
with respect to the shares of Common Stock beneficially owned by (i) each person
known by the Company to beneficially own more than five percent of the
outstanding Common Stock, (ii) each director of the Company, (iii) each
executive officer named in the Summary
1
<PAGE>
Compensation Table below and (iv) all directors and executive officers of the
Company as a group. Except as described below, each of the persons listed in the
table has sole voting and investment power with respect to the shares listed:
AMOUNT AND PERCENT OF
NATURE OF SHARES OF
BENEFICIAL COMMON STOCK
NAME OWNERSHIP OUTSTANDING
---- --------- -----------
First Union Corporation ........................ 1,206,116 5.8%
Keystone Investment Management Company
One First Union Center
Charlotte, North Carolina 28288-0137
James P. Hunter, III ........................... 583,340(1) 2.8%
Jack D. Rottman ................................ 132,950(2) *
W. Cardon Gerner ............................... 47,384(3) *
Billy C. Wells ................................. 28,850(4) *
William C. McNamara ............................ 21,100(5) *
J. Patrick Doherty ............................. 3,674(6) *
Jack T. Hammer ................................. 47,750(7) *
Thomas R. McDade ............................... 9,250(8) *
Kenneth W. Smith ............................... 35,062(9) *
All directors and executive officers
as a group (nine persons) .................... 909,360(10) 4.4%
- ----------
* Less than 1%
(1) Includes 105,200 shares of Common Stock issuable upon the exercise of
options outstanding under the Company's 1994 Long-Term Incentive Plan (the
"Incentive Plan") that are exercisable within 60 days after March 27, 1997.
Does not include 187,300 shares of Common Stock issuable upon the exercise
of options outstanding under the Incentive Plan that are not exercisable
within 60 days after March 27, 1997.
(2) Includes 67,700 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are exercisable within 60
days after March 27, 1997. Does not include 93,550 shares of Common Stock
issuable upon the exercise of options outstanding under the Incentive Plan
that are not exercisable within 60 days after March 27, 1997.
(3) Includes 47,384 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are exercisable within 60
days after March 27, 1997. Does not include 89,956 shares of Common Stock
issuable upon the exercise of options outstanding under the Incentive Plan
that are not exercisable within 60 days after March 27, 1997.
(4) Includes 28,700 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are exercisable within 60
days after March 27, 1997. Does not include 68,050 shares of Common Stock
issuable upon the exercise of options outstanding under the Incentive Plan
that are not exercisable within 60 days after March 27, 1997.
(5) Includes 17,500 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are exercisable within 60
days after March 27, 1997. Does not include 61,250 shares of Common Stock
issuable upon the exercise of options outstanding under the Incentive Plan
that are not exercisable within 60 days after March 27, 1997.
(6) Does not include 3,750 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are not exercisable
within 60 days after March 27, 1997.
2
<PAGE>
(7) Includes 6,250 shares of Common Stock issuable upon the exercise of options
outstanding under the Incentive Plan within 60 days after March 27, 1997.
Does not include 5,000 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are not exercisable
within 60 days after March 27, 1997.
(8) Includes 6,250 shares of Common Stock issuable upon the exercise of options
outstanding under the Incentive Plan within 60 days after March 27, 1997.
Does not include 5,000 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan that are not exercisable
within 60 days after March 27, 1997.
(9) Includes 18,750 shares of Common Stock issuable upon the exercise of
options outstanding under the Incentive Plan within 60 days after March 27,
1997. Does not include 11,250 shares of Common Stock issuable upon the
exercise of options outstanding under the Incentive Plan that are not
exercisable within 60 days after March 27, 1997.
(10) The shares of Common Stock shown as beneficially owned by the directors and
executive officers as a group include an aggregate of 297,734 shares of
Common Stock issuable upon the exercise of options outstanding under the
Incentive Plan that are exercisable within 60 days after March 27, 1997.
The shares of Common Stock shown as beneficially owned do not include an
aggregate of 525,106 shares of Common Stock issuable to the directors and
executive officers upon the exercise of options outstanding under the
Incentive Plan that are not exercisable within 60 days after March 27,
1997.
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors has nominated and urges you to vote FOR the election
of the two nominees identified below, each of whom is a member of the Company's
present Board of Directors. Each nominee has consented to be named in this Proxy
Statement and to serve as a director, if elected. Proxies solicited hereby will
be voted for both nominees unless stockholders specify otherwise in their proxy.
The affirmative vote of holders of a plurality of the Common Stock present in
person or by proxy at the Meeting and entitled to vote is required for election
of each of the nominees.
The Company's Amended and Restated Certificate of Incorporation ("Charter")
provides that the Board of Directors shall be staggered with respect to terms of
office into three classes. Each class of directors shall consist of an equal, or
as near to equal as possible, number of directors. At each annual meeting, the
successor or successors to the class of directors whose term shall expire in
that year shall be elected to hold office for a term of three years, so that the
term of office of one class of directors shall expire in each year. At the
Meeting, the Class II directors shall be elected for a term expiring at the 2000
annual meeting or until their successors have been duly elected and qualified.
The Company's Bylaws provide that the number of directors on the Board
shall be fixed from time-to-time by the Board of Directors. The Board in its
discretion and in accordance with such authority has currently fixed its size at
six members, of which one seat is currently vacant. No proxy will be voted for a
greater number of persons than the number of nominees named herein. If deemed in
the best interests of the Company, the Board of Directors may, subsequent to the
Meeting, increase its size and elect one or more additional qualified persons to
fill the vacancies which then exist pending the next annual meeting of
stockholders. Any increase or decrease in the number of directors constituting
the Board of Directors shall be apportioned among the classes so as to maintain
the number of directors in each class as near as possible to one-third the whole
number of directors as so adjusted. Any director elected or appointed to fill a
vacancy shall hold office for the remaining term of the class to which such
directorship is assigned.
It is intended that the proxies solicited hereby will be voted FOR the
election of all of the nominees for director listed below, unless authority to
do so has been withheld. If, at the time of or prior to the Meeting, any of the
nominees should be unable or decline to serve, the discretionary authority
provided in the proxy may be used to vote for a
3
<PAGE>
substitute or substitutes designated by the Board of Directors. The Board of
Directors has no reason to believe that any substitute nominee or nominees will
be required.
DIRECTORS AND NOMINEES FOR DIRECTOR
NOMINEES FOR DIRECTOR
The nominees for election as Class II directors whose terms of office, if
elected, will expire in 2000 and certain additional information with respect to
such persons are as follows:
KENNETH W. SMITH, 60, has been a director of the Company since May 1990.
He is a certified public accountant and has been in private practice in
Lufkin, Texas for the past 34 years. Prior to such time, he was a senior
accountant of the international accounting firm of Arthur Andersen & Co.
J. PATRICK DOHERTY, 42, was elected by the Board as a director effective
February 3, 1997. Mr. Doherty is a licensed attorney and has been a partner
in the law firm of Cochran, Rooke & Craft, L.L.P. since January 1985.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION
OF EACH OF THE ABOVE-NAMED NOMINEES, AND PROXIES EXECUTED AND RETURNED WILL BE
SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
CONTINUING DIRECTORS
The Company's three other directors will continue to serve in office until
the end of their respective terms or their earlier death, resignation or
removal. These three continuing directors are classified into Class III and
Class I based on their original classifications. The vacancy in Class II of the
Board of Directors occurring upon the resignation of Robert W. Loftis was filled
by the vote of the remaining directors by the election of J. Patrick Doherty.
The vacancy in Class III of the Board of Directors occurring upon the
resignation of T. Craig Benson in December, 1996 has not been filled. Pursuant
to the Company's Certificate of Incorporation, this vacancy may be filled either
by the majority vote of the remaining directors or, if the vacancy remains
unfilled at the time of the 1998 annual meeting of the Company's stockholders,
by vote of the Company's stockholders in the manner set forth above.
The Class III director's term of office will expire in 1998. Set forth
below is certain information concerning the Class III director.
JAMES P. HUNTER, III, 59, has been the President, Chief Executive
Officer and a director of the Company since May 1990 and Chairman of the
Board since June 1994. Prior to joining the Company, Mr. Hunter was a Vice
President of Service Corporation International ("SCI") from 1987 to 1990.
From 1988 to 1990, he was also Vice Chairman of SCI's Legislative Affairs
Committee. Prior to joining SCI, Mr. Hunter was President and Chief
Executive Officer of Oakley-Metcalf, Inc., a family-owned operator of
funeral homes in Lufkin and Nacogdoches, Texas, and was associated with
that firm for over 25 years. From 1985 to 1991, Mr. Hunter was a member of,
and during 1987 and 1988 the Chairman of, the Texas Funeral Service
Commission.
The Class I directors' terms of office will expire in 1999. Set forth below
is certain information concerning the Class I directors.
JACK T. HAMMER, 55, has been a director of the Company since December
1994. Mr. Hammer has been the Chairman, President and Chief Executive
Officer of Housing Systems, Incorporated, a company that owns and operates
conventional, low income and cooperative housing, since he organized that
company in 1970. Prior to 1992, he was active in the ownership and
management of Arlington Corp., a privately held death care company that was
subsequently acquired by SCI. Since January 1993, Mr. Hammer has also been
the President of Cemetery Management Consultants, a privately held company
that primarily invests in death care businesses.
4
<PAGE>
THOMAS R. MCDADE, 64, has been a director of the Company since December
1994. He is a licensed attorney and has been a partner in the law firm of
McDade & Fogler, L.L.P., Houston, Texas since 1992. From 1971 through 1991,
Mr. McDade was a partner in the law firm of Fulbright & Jaworski, L.L.P.,
Houston, Texas. Mr. McDade is also a director of The Coastal Corporation, a
publicly held energy conglomerate.
BOARD COMMITTEES
The Company's Board of Directors has established an Executive Committee, an
Audit Committee and a Compensation Committee. The Board of Directors does not
have a standing nominating committee. The Executive Committee has the authority
to exercise many of the powers of the Board during periods between regular
meetings of the Board. The current members of the Executive Committee are
Messrs. Hunter, Smith and Doherty. The Audit Committee's functions include
recommending to the Board of Directors the engagement of the Company's
independent public accountants, reviewing with such accountants the plans for
and the results and scope of their auditing engagement and certain other
matters, including the independence of such accountants. The current members of
the Audit Committee are Messrs. Hammer and Smith. The Compensation Committee
reviews compensation of directors, executive officers and key employees, makes
recommendations to the Board of Directors with respect to compensation matters
and administers the Incentive Plan. The current members of the Compensation
Committee are Messrs. McDade and Smith.
During 1996, the Board of Directors held 3 meetings. The Audit Committee
and the Compensation Committee held 2 and 4 meetings, respectively, during 1996.
No formal meetings of the Executive Committee were held during 1996, but such
committee and its members reviewed all acquisitions by the Company during 1996
and approved such acquisitions by unanimous written consents. During such fiscal
year, each member of the Board of Directors attended 75% or more of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by all committees of the Board of Directors on
which such director served.
DIRECTOR COMPENSATION
Each director who is not an employee of the Company is paid a quarterly
retainer of $2,500 and an additional quarterly retainer of $625 for directors
who also chair a committee, fees of $750 for each meeting of the Board of
Directors that they attend and $750 for each meeting of a committee of the Board
of Directors that they attend (other than any committee meeting held in
conjunction with a meeting of the Board of Directors), and is reimbursed for all
out-of-pocket expenses incurred in attending such meetings. In addition,
directors who are not employees of the Company or any subsidiary receive an
annual automatic grant of options to acquire 3,750 shares of Common Stock under
the Incentive Plan. The Company maintains directors' and officers' liability
insurance and its Charter and Bylaws provide for mandatory indemnification of
directors to the fullest extent permitted by Delaware law. The Company has
entered into indemnification agreements with all of its directors. In addition,
the Charter limits the liability of directors of the Company to the Company or
its stockholders for breaches of the directors' fiduciary duties to the fullest
extent permitted by Delaware law.
5
<PAGE>
EXECUTIVE OFFICERS
Set forth below is certain information concerning the executive officers of
the Company, including the business experience of each during the past five
years:
Name Age Position With The Company
---- --- -------------------------
James P. Hunter, III 59 Chairman of the Board of Directors,
President and Chief Executive Officer
W. Cardon Gerner 42 Senior Vice President-- Chief Financial
Officer
William C. McNamara 49 Senior Vice President-- Cemetery Operations
Jack D. Rottman 49 Senior Vice President-- Corporate Development
Billy C. Wells 46 Vice President-- Funeral Operations
Certain biographical information concerning Mr. Hunter is set forth under
"Election of Directors -- Directors and Nominees for Director -- Continuing
Directors."
W. CARDON GERNER has been Senior Vice President -- Chief Financial
Officer since March 1995. For 17 years prior to joining the Company, Mr.
Gerner held various positions with the international accounting firm of
Ernst & Young LLP, including being a partner in such firm from October 1990
until March 1995.
WILLIAM C. MCNAMARA has been Senior Vice President -- Cemetery
Operations since April 1996. Prior to joining the Company, Mr. McNamara had
been employed in various capacities by subsidiaries of SCI since 1981, most
recently as Vice President of Preneed Funeral and Preneed Cemetery Sales
and Administration of SCI's Eastern Division, which included over 300
funeral home and cemetery operations.
JACK D. ROTTMAN has been Senior Vice President -- Corporate Development
of the Company since March 1994. Prior to joining the Company, Mr. Rottman
held various positions at SCI, including Vice President of Funeral Service
Operations from 1991 to 1993 and Vice President of Corporate Development
from 1987 to 1989. He was also Senior Vice President and a loan officer of
Provident Services, Inc., a wholly owned subsidiary of SCI, from 1989 to
1991.
BILLY C. WELLS has been Vice President -- Funeral Operations of the
Company since May 1990. Prior to joining the Company, Mr. Wells held
various management positions within SCI's funeral home operations, most
recently as Vice President of SCI's Regional Partner Division from January
1990 to May 1990.
The Company's officers are elected annually by, and serve at the pleasure
of, the Board of Directors, subject to the terms of any employment agreements.
6
<PAGE>
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is a committee of
outside directors that is responsible for administering the executive
compensation programs of the Company including awards under the Incentive Plan.
Pursuant to the authorization of the Board of Directors, the Compensation
Committee fixes the compensation of the Chief Executive Officer and the other
officers of the Company and is responsible for administering the Incentive Plan.
COMPENSATION PHILOSOPHY
The Company's executive compensation policies are designed to provide a
direct link between the interests of management and those of the Company's
stockholders, to provide competitive levels of compensation that integrate pay
with the Company's annual and long-term performance goals, to attract and retain
individuals with the leadership and technical skills to ensure the Company's
success with a view to increasing stockholder value, and to reward both
corporate and individual performance. To further those policies, the Company's
executive compensation programs include base salaries, annual performance-based
incentives and long-term incentive opportunities. In addition, a compensation
consultant is currently conducting a review of the compensation policies and
practices of the Company on behalf of the Compensation Committee which
determinations will be reviewed by the Compensation Committee during 1997.
BASE SALARIES
The base salaries paid to each of the officers of the Company are
established by employment agreements entered into between the Company and those
individuals. The Compensation Committee annually reviews the salaries to be paid
to its officers during each fiscal year. The base salaries called for in the
officer employment agreements were determined in part upon the advice of
independent consultants regarding the design of an overall executive
compensation program that would implement the Company's executive compensation
philosophy. In setting base salaries with respect to each officer, the
Compensation Committee takes into account the factors it deems relevant
(generally including the duties and levels of responsibility in each position,
individual job performance, experience, pay position within a range and market
comparisons) and exercises its discretion after assigning relative weight to
each such factor.
ANNUAL INCENTIVE COMPENSATION
The annual incentive compensation program adopted by the Company is
designed so that a major portion of the total compensation of the Company's
officers comes in the form of incentive bonuses. These bonuses are generally
linked to the achievement of Company performance goals during the year which
tend to increase stockholder value. The employment agreement of each of the
Chief Executive Officer, the Senior Vice President -- Cemetery Operations and
the Senior Vice President -- Chief Financial Officer of the Company provides for
an annual incentive bonus equal to 50% of base salary if the Company attains
certain levels of performance, including net income, established in the
Company's budget approved by the Board of Directors. The employment agreement of
the Senior Vice President -- Corporate Development provides for an annual
incentive bonus equal to 1% of the annual historical revenues of businesses
acquired by the Company during the year subject to an annual maximum of $75,000.
In addition, pursuant to their respective employment agreements, each Company
officer may also earn an annual incentive bonus, which is generally a specified
percentage of his base salary, at the discretion of the Compensation Committee,
taking into account the executive compensation philosophy of the Company.
During fiscal year 1996, the Company's attainment of performance goals
required the payment of bonuses to Messrs. Hunter, Gerner, McNamara and Rottman.
In addition, the Compensation Committee granted discretionary incentive bonuses
to each of Messrs. Hunter, Gerner, McNamara, Rottman and Wells.
7
<PAGE>
LONG-TERM INCENTIVE COMPENSATION
The Committee believes that stock-based long-term incentive compensation
opportunities should constitute an integral part of the Company's executive
compensation program. By offering the Company's key employees a stake in the
Company's long-term success, such programs provide an incentive for the
enhancement of stockholder value. To accomplish this objective, the Company may
from time to time provide designated employees with time vested stock options
and/or restricted stock and other stock based awards pursuant to its Incentive
Plan. Time vested stock option grants and restricted stock awards are intended
to align management and stockholders' interests and ensure the retention of key
selected employees by providing those individuals with the opportunity to
receive stock ownership in the Company.
An award of time vested stock options and/or restricted stock to a
particular employee is based on the employee's past performance and expectations
of the employee's future contributions to the Company. In determining whether
and to what extent to make such an award, the Compensation Committee considers
management's recommendation and advice from independent consultants.
During fiscal year 1996, the Compensation Committee awarded options
representing an aggregate of 363,267 shares of Common Stock to employees and
directors of the Company and its subsidiaries, of which 258,750 were granted to
the Company's executive officers listed in the Summary Compensation Table and
89,517 were granted to 75 other employees. In addition, options representing
15,000 shares of Common Stock were granted to the Company's current and former
non-employee directors pursuant to annual automatic grants of options under the
Incentive Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Hunter has served as the Chief Executive Officer of the Company since
its formation. Mr. Hunter's base salary in fiscal year 1996 was $225,000, as set
forth in his employment agreement with the Company.
For fiscal year 1996, Mr. Hunter was awarded a performance bonus of
$112,500 and a discretionary incentive bonus of $112,500. During December 1996,
Mr. Hunter also received 75,000 nonqualified stock options. Each of the
nonqualified stock options become exercisable in one-third increments on each of
the first three anniversaries of the date of grant.
In evaluating Mr. Hunter's performance and discretionary incentive bonuses
and options granted under the Incentive Plan for 1996, the Compensation
Committee took into consideration the Company's increased earnings in fiscal
year 1996, the successful acquisition program of the Company, the increase in
the market value of the stock of the Company in fiscal year 1996, Mr. Hunter's
increased responsibilities due to the growth in the size of the Company, the
succesful equity offering of stock of the Company, the Company's future earnings
prospects, Mr. Hunter's leadership and management skills and competitive
practices within the industry.
SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), disallows a corporation's deduction for remuneration paid to its chief
executive officer and its four other highest compensated officers in excess of
$1 million per person. As neither the Company's Chief Executive Officer nor any
of its four other highest compensated officers has received remuneration in
excess of such limitation in 1996 or is anticipated to receive remuneration in
excess of such limitation in 1997, the Compensation Committee has deferred
making any recommendation to the Company's Board of Directors as to what policy
the Company should adopt with respect to remuneration of the executive officers
of the Company in excess of such limitation, until such time as it appears
reasonably foreseeable that such limitation may be exceeded.
The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended
8
<PAGE>
(the "Securities Act"), or under the Securities Exchange Act of 1934 , as
amended (the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Compensation Committee: Kenneth W. Smith, Chairman
Thomas R. McDade
SUMMARY COMPENSATION TABLE
The following table reflects all forms of compensation for the years ended
December 31, 1996, 1995 and 1994 to the Chief Executive Officer and the four
other most highly compensated executive officers of the Company based on 1996
salaries and bonuses (collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------------------------------- -----------
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL POSITIONS YEAR SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION
------------------- ---- ------ ----- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James P. Hunter, III..... 1996 $ 224,039 $225,000 $ --(1) 75,000 $2,655(2)
Chairman, President and 1995 $ 200,000 $ 58,500 $ --(1) 75,000 $2,575(2)
Chief Executive Officer 1994 $ 200,000 $200,000 $ --(1) 142,500 $2,343(2)
W. Cardon Gerner......... 1996 $ 142,692 $145,000 $ --(1) 52,500 $ 321(5)
Senior Vice President-- 1995(4) $ 109,038 $ 35,000 $46,428(3) 84,840 $ 223(5)
Chief Financial Officer 1994 $ -- $ -- $ -- -- $ --
William C. McNamara...... 1996(4) $ 100,977 $105,000 $ --(1) 78,750 $ 55(5)
Senior Vice President-- 1995 $ -- $ -- $ -- -- $ --
Cemetery Operations 1994 $ -- $ -- $ -- -- $ --
Jack D. Rottman.......... 1996 $ 147,692 $150,000 $70,531(6) 26,250 $ 281(5)
Senior Vice President-- 1995 $ 137,025 $ 75,000 $49,254(6) 22,500 $ 315(5)
Corporate Development 1994 $ 93,750 $109,980 $53,990(7) 112,500 $ 212(5)
Billy C. Wells........... 1996 $ 88,846 $ 90,000 $ --(1) 26,250 $ 200(5)
Vice President-- 1995 $ 81,054 $ 20,000 $ --(1) 10,500 $ 351(5)
Funeral Operations 1994 $ 65,000 $ 50,000 $ --(1) 60,000 $ 66(5)
</TABLE>
(1) Excludes certain perquisites and other personal benefits the amount of
which did not exceed the lesser of either $50,000 or 10% of the employee's
total annual salary and bonus.
(2) Represents compensation consisting of $375 from insurance premiums paid by
the Company with respect to term life insurance in each of 1996, 1995 and
1994 and $2,280, $2,200 and $1,968 attributable to the Company's payment of
split-dollar life insurance premiums in 1996, 1995 and 1994, respectively.
(3) Includes $31,851 reimbursed to the employee for closing costs in connection
with the sale of the employee's primary residence.
(4) Mr. Gerner became employed by the Company in March 1995 and Mr. McNamara
became employed by the Company in April 1996.
(5) Dollar value of insurance premiums paid by the Company with respect to term
life insurance for the benefit of the named executive officer.
(6) Includes $50,721 and $35,310 reimbursed to the employee in 1996 and 1995,
respectively, for interest on amounts borrowed by the employee to finance
shares purchased by him in June 1994.
(7) Includes $22,491 in closing costs paid in connection with the sale of the
employee's primary residence and $15,258 reimbursed to the employee for
interest on amounts borrowed by the employee to finance shares purchased by
him in June 1994.
9
<PAGE>
EMPLOYMENT ARRANGEMENTS; COVENANTS-NOT-TO-COMPETE
Each of the Company's executive officers has entered into an employment
agreement with the Company. Mr. Hunter's base salary for 1997 is $250,000, and
his employment agreement provides for a bonus of up to 50% of his annual base
salary if certain performance goals are achieved and an additional bonus of up
to 50% of his annual base salary payable in the discretion of the Board of
Directors. Mr. Rottman's base salary for 1997 is $157,500 and his employment
agreement provides for such incentive compensation as may be determined in the
discretion of the Board of Directors. In addition, under his employment
agreement, Mr. Rottman is entitled to an additional bonus of up to $75,000 per
year based upon the historical revenues of businesses acquired during such year.
The Company has also agreed to reimburse Mr. Rottman for the interest on amounts
borrowed by Mr. Rottman to finance the shares purchased by him in June 1994. Mr.
Gerner's base salary for 1997 is $155,000, and his employment agreement provides
for an annual bonus of up to 50% of his annual base salary if certain
performance goals are achieved and an additional bonus of up to 50% of his
annual base salary payable in the discretion of the Board of Directors. Mr.
McNamara's base salary for 1997 is $147,000, and his employment agreement
provides for a contractual incentive bonus of up to 50% of his annual base
salary if certain performance goals are achieved and an annual bonus of up to
50% of his annual base salary as may be determined by the Board of Directors.
Mr. Wells' base salary for 1997 is $100,000, and his employment agreement
provides for an annual bonus as may be determined in the discretion of the Board
of Directors. The base salary for each of the above-named officers was increased
from the minimum base salary levels provided in their respective employment
agreements and their base salaries in 1996 due to market comparisons and
competitive practices in the industry.
The employment agreement with Mr. Hunter has an initial term of five years
commencing February 1994 and may be terminated by Mr. Hunter at any time upon 30
days' prior written notice to the Company. In addition, the agreement contains a
covenant prohibiting Mr. Hunter from competing with the Company for a period of
12 months following the date of termination, provided that (i) the Company gives
written notice within 30 days of the date of termination that it intends to
enforce such provision and (ii) during such 12-month period the Company
continues payment of the salary to which Mr. Hunter was entitled immediately
prior to such termination.
Mr. Gerner's employment agreement had an initial term of two years
commencing March 1995. Mr. McNamara's employment agreement has an initial term
of two years commencing April 1996. Mr. Rottman's employment agreement had an
initial term of two years commencing March 1994. Mr. Wells' employment agreement
had an initial term of two years commencing July 1994. Each of the employment
agreements with Messrs. Gerner, McNamara, Rottman and Wells may be terminated by
either party upon two weeks' prior written notice. Unless terminated, the
employment agreements of Messrs. Gerner, McNamara, Rottman and Wells are
extended automatically for successive 12-month periods, and the agreements for
Messrs. Gerner, Rottman and Wells have been extended for such periods. Each
employment agreement also contains a covenant-not-to-compete with the Company
for a period of 12 months following the scheduled date of termination. During
the 12-month period following termination of Mr. Gerner, Mr. McNamara or Mr.
Rottman, the Company is required to continue payment of (i) if the employee was
terminated by the Company without "cause," the annual salary to which the
employee was entitled at the date of termination, or (ii) if employment was
terminated for any other reason, 50% of the employee's annual base salary if
termination occurs within the first two years of the employment term or 100% of
the employee's annual base salary if termination occurs thereafter. During the
12-month period following termination of Mr. Wells, the Company is required to
continue payment of the annual salary to which Mr. Wells was entitled at the
date of termination. Under certain circumstances, the Company may elect to
cancel any of Mr. Gerner's, Mr. McNamara's, Mr. Rottman's or Mr. Wells'
post-employment non-competition obligations and the Company's corresponding
payment obligations.
The Company maintains directors' and officers' liability insurance and its
Charter and Bylaws provide for mandatory indemnification of officers to the
fullest extent permitted by Delaware law. The Company has entered into
indemnification agreements with each of its executive officers.
10
<PAGE>
OPTION GRANTS TABLE
The following table reflects certain information regarding stock options
granted to the Named Executive Officers during fiscal 1996, including
adjustments for the Company's 3-for-2 stock split that occurred in October 1996:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE DATE
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION PRESENT
NAME GRANTED (1) FISCAL 1996 SHARE DATE VALUE (2)
---- ----------- ----------- ----- ---- ---------
<S> <C> <C> <C> <C> <C>
James P. Hunter, III......... 75,000 20.6% $ 18.25 12/19/06 $440,108
W. Cardon Gerner............. 52,500(3) 14.5 (3) (3) 301,881
William C. McNamara.......... 78,750(4) 21.7 (4) (4) 485,429
Jack D. Rottman.............. 26,250 7.2 18.25 12/19/06 154,038
Billy C. Wells............... 26,250 7.2 18.25 12/19/06 154,038
</TABLE>
(1) A total of 363,267 options were granted to employees and directors of the
Company and its subsidiaries in 1996. A total of 258,750 options were
granted to the executive officers, 89,517 options were granted to 75 other
employees and 15,000 options were granted to four of the Company's
non-employee directors, including Mr. T. Craig Benson. All options granted
to the executive officers in 1996 are non-qualified stock options ("NSOs").
The NSOs granted to Messrs. Hunter, Rottman and Wells become exercisable in
one-third increments on each of December 19, 1997, 1998 and 1999. All
options expire on the earlier of ten years from the date of grant or the
termination of employment. Notwithstanding the foregoing, all such options
shall be exercisable as to all shares subject to the option for one year
following the death or disability of the employee and for a period of three
years following the retirement of the employee at age 60 or older who has
completed at least five years of employment with the Company. In addition,
if employment is terminated for any reason other than death, disability or
qualified retirement, such options shall be exercisable for three months
following termination but only to the extent exercisable at the date of
termination. No stock appreciation rights ("SARs") or other instruments
were granted in tandem with the options reflected in this table.
(2) To calculate the present value of option grants in 1996, the Company has
used the Black-Scholes option pricing model. The actual value, if any, an
executive may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, so that there is no
assurance the value realized by an executive will be at or near the value
estimated by the Black-Scholes model. The estimated values under that model
are based on assumptions that include (i) a stock price volatility of
21.32%, (ii) a risk free interest rate of 5.69% for options granted in
March 1996, 6.35% for options granted in April 1996 and 6.07% for options
granted in December 1996, (iii) a dividend yield of 0.0 %, and (iv) an
expected life for all options of five years. The Securities and Exchange
Commission (the "Commission") requires disclosure of the potential
realizable value or present value of each grant. The Company's use of the
Black-Scholes model to indicate the present value of each grant is not an
endorsement of this valuation, which is based on certain assumptions, as
described above.
(3) Of the NSOs granted to Mr. Gerner, 26,250 NSOs are at an exercise price of
$18.00 and become exercisable in one-third increments on each of March 6,
1997, 1998 and 1999 and 26,250 NSOs are at an exercise price of $18.25 and
become exercisable in one-third increments on each of December 19, 1997,
1998 and 1999. The initial NSOs granted expire on March 6, 2006 and the
remaining 26,250 NSOs expire on December 19, 2006.
(4) Of the NSOs granted to Mr. McNamara, 52,500 are at an exercise price of
$19.25 and become exercisable in one-third increments on each of April 9,
1997, 1998 and 1999, and 26,250 are at an exercise price of $18.25 and
become exercisable in one-third increments on each of December 19, 1997,
1998 and 1999. The 52,500 NSOs expire on April 9, 2006 and the 26,250 NSOs
expire on December 19, 2006.
11
<PAGE>
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND DECEMBER 31, 1996 OPTION VALUES
The following table reflects certain information regarding the number of
unexercised options and the value of unexercised options outstanding at December
31, 1996. No SARs or other instruments were granted in tandem with the options
reflected in this table. No options were exercised by the Named Executive
Officers during fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1996 DECEMBER 31, 1996 (1)
------------------------------ -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James P. Hunter, III................ 105,200 187,300 $ 997,816 $1,026,959
W. Cardon Gerner.................... 19,317 118,023 180,228 683,517
William C. McNamara................. -- 78,750 -- 45,938
Jack D. Rottman..................... 67,700 93,550 690,741 676,772
Billy C. Wells...................... 28,700 68,050 291,011 445,887
</TABLE>
(1) Value determined by subtracting the exercise price from the market value of
the Common Stock on December 31, 1996, which was $19.50 per share based on
the average of the high and low sale prices on December 31, 1996,
multiplied by the number of shares underlying the options.
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return (change in year-end stock price plus
reinvested dividends) on the Company's Common Stock against the cumulative total
return of The S&P 500 Index and a Company-determined Composite Peer Group index
for the period commencing October 19, 1994 (the date trading in the Company's
Common Stock on The Nasdaq National Market commenced) and ended December 31,
1996. The Composite Peer Group represented below is comprised of The Loewen
Group, Inc., Stewart Enterprises, Inc. and SCI. Carriage Services, Inc. is not
included in the Composite Peer Group due to its limited trading history since
August 1996. The graph assumes that $100 was invested prior to the commencement
of trading of the Company's Common Stock on October 19, 1994, in the Company's
Common Stock, The S&P 500 Index and the Composite Peer Group, weighted on the
basis of market capitalization.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
OCT. 19, DEC. 31, DEC. 31, DEC. 31,
1994 1994 1995 1996
Equity Corporation International ..... $100 $102 $183 $231
S&P 500 Index ........................ $100 $103 $141 $174
Peer Group ........................... $100 $112 $152 $203
THE DATA SOURCE FOR THE ABOVE GRAPH IS STANDARD & POOR'S COMPUSTAT DATABASE.
The Stock Price Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this graph by
reference, and shall not otherwise be deemed filed under such Acts.
13
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and persons who own more than ten percent of the Common Stock, to file
reports of ownership and changes in ownership with the Commission and The Nasdaq
Stock Market. Based on the Company's review of the copies of such reports
received by the Company and on written representations received by the Company,
the Company believes that no director, officer or holder of more than ten
percent of the Common Stock failed to file on a timely basis the reports
required by Section 16(a) of the Exchange Act during fiscal 1996.
CERTAIN TRANSACTIONS
The executive officers of the Company will be eligible to participate in
the proposed 1997 Employee Stock Purchase Plan, if approved.
The Company entered into a Consulting Agreement, dated September 10, 1996,
with Mr. Hunter. This agreement calls for Mr. Hunter to provide consulting
services to the Company for a period of three years after Mr. Hunter ceases to
serve as a full time employee of the Company. During the period Mr. Hunter
provides such consulting services, the Company has agreed to pay Mr. Hunter a
monthly fee equal to the monthly salary in effect for Mr. Hunter during the last
month Mr. Hunter serves as the full time Chief Executive Officer of the Company.
The Company has engaged Mr. Doherty and the law firm of which Mr. Doherty
is a partner, Cochran, Rooke & Craft, L.L.P., in connection with acquisitions,
securities offerings and other general corporate matters. During 1996, the
Company paid an aggregate of $436,929 in fees to Cochran, Rooke & Craft, L.L.P.
in connection with services for such matters.
The Company intends that any transactions between the Company and its
officers, directors, principal stockholders, affiliates or advisors will be on
terms no less favorable to the Company than those reasonably obtainable from
third parties and will be approved or ratified by a majority of the Company's
independent directors.
PROPOSAL 2:
APPROVAL OF INDEPENDENT ACCOUNTANTS
GENERAL
The Board of Directors has appointed the firm of Coopers & Lybrand L.L.P.,
independent accountants, as the Company's independent public accountants for the
fiscal year ending December 31, 1997, subject to ratification by the Company's
stockholders. Representatives of Coopers & Lybrand L.L.P. are expected to be
present at the Meeting and will have an opportunity to make a statement, if they
so desire, and to respond to appropriate questions from those attending the
Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF COOPERS & LYBRAND L.L.P.'S APPOINTMENT, AND PROXIES EXECUTED AND RETURNED
WILL BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE INDICATED THEREON.
14
<PAGE>
PROPOSAL 3:
APPROVAL OF THE
1997 EQUITY CORPORATION INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
THE PROPOSAL AND REASONS FOR IT
On April 15, 1997, the Board of Directors of the Company adopted the 1997
Equity Corporation International Employee Stock Purchase Plan (the "1997 Plan"),
subject to approval by the Company's stockholders. The summary description that
follows is qualified by reference to the 1997 Plan, a copy of which is attached
hereto as EXHIBIT A. Capitalized terms used but not defined herein have the
meanings assigned to them in the 1997 Plan. In the event that stockholder
approval is not received, the 1997 Plan will be terminated.
The purpose of the 1997 Plan is to provide an incentive for present and
future employees of the Participating Companies (as defined) to acquire a
proprietary interest (or increase an existing proprietary interest) in the
Company through the purchase of Common Stock. It is the intention of the Company
that the 1997 Plan qualify as an "employee stock purchase plan" under Section
423 of the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly,
the provisions of the 1997 Plan shall be administered, interpreted and construed
in a manner consistent with the requirements of that section of the Code.
GENERAL
SHARES SUBJECT TO THE 1997 PLAN. The 1997 Plan authorizes the issuance of
up to 500,000 shares of Common Stock subject to adjustment for capital changes
pursuant to the exercise of options granted to participating employees.
ELIGIBILITY. Employees of the Company (and any other subsidiary the
Committee may from time to time designate) whose customary employment is more
than 20 hours per week and more than five months per calendar year are eligible
to participate in the 1997 Plan. As of December 31, 1996, approximately 1,600
employees would have been eligible to participate in the 1997 Plan.
Upon termination of the Participant's Continuous Employment (as defined)
prior to an Exercise Date for any reason, including retirement or death, the
payroll deductions credited to the Participant's account for that Option Period
will be returned to the Participant or, in the case of death, to the
Participant's estate, and the Participant's options to purchase shares under the
1997 Plan will be automatically terminated.
PARTICIPATION IN THE 1997 PLAN. An Eligible Employee electing to
participate in the 1997 Plan may make contributions only by payroll deductions.
At the time a Participant files the enrollment agreement with respect to an
Option Period, the Participant shall authorize payroll deductions to be made on
each payroll date during the Option Period in an amount of from 1% to 10% of the
Eligible Compensation (as defined) which the Participant receives on each
payroll date during such Option Period. The amount of such payroll deductions
shall be a whole percentage (i.e., 1%, 2%, 3%, etc.) of the Participant's
Eligible Compensation. A Participant may not change his designated percentage
during an Option Period.
All payroll deductions made for a Participant shall be deposited in the
Company's general corporate account and shall be credited to the Participant's
account under the 1997 Plan. No interest shall accrue or be credited with
respect to the payroll deductions of a Participant under the 1997 Plan. A
Participant may not make any additional payments into such account. All payroll
deductions received or held by the Company under the 1997 Plan may be used by
the Company for any corporate purpose, and the Company shall not be obligated to
segregate such payroll deductions.
On each Enrollment Date (as defined), subject to the limitations set forth
in the 1997 Plan, each Eligible Employee shall be granted an option to purchase
on the Exercise Date up to a number of shares of Common Stock determined by
15
<PAGE>
dividing such Eligible Employee's payroll deductions accumulated during the
Option Period ending on such Exercise Date by the Exercise Price. The Exercise
Price of each of the shares offered in a given Option Period shall be the lower
of: (i) 85% of the fair market value of a share of the Common Stock on the
applicable Enrollment Date, or (ii) 85% of the fair market value of a share of
the Common Stock on the applicable Exercise Date.
Notwithstanding any provision of the 1997 Plan to the contrary, no Eligible
Employee shall be granted an option under the 1997 Plan (i) if, immediately
after the grant, such Eligible Employee (or any other person whose stock would
be attributed to such Employee pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding options to purchase stock possessing 5% or more of
the total combined voting power or value of all classes of stock of the Company
or of any Subsidiary of the Company, or (ii) which permits such Eligible
Employee's rights to purchase stock under all employee stock purchase plans of
the Company and its Subsidiaries to accrue at a rate which exceeds $25,000 of
fair market value of such stock (determined at the time such option is granted)
for each calendar year in which such option is outstanding at any time.
Unless a Participant withdraws from the 1997 Plan, the Participant's option
for the purchase of shares will be exercised automatically on each Exercise
Date, and the maximum number of full shares subject to the option will be
purchased for the Participant at the applicable Exercise Price with the
accumulated payroll deductions in the Participant's account.
A Participant may withdraw all, but not less than all, of the payroll
deductions credited to the Participant's account under the 1997 Plan at any time
during an Option Period by giving written notice to the Company. All of the
Participant's payroll deductions credited to the Participant's account will be
paid to him promptly after receipt of the Participant's notice of withdrawal,
the Participant's participation in the 1997 Plan will be automatically
terminated, and no further payroll deductions for the purchase of shares will be
made. Payroll deductions will not resume on behalf of a Participant who has
withdrawn from the 1997 Plan unless written notice is delivered to the Company
within the enrollment period preceding the commencement of a new Option Period
directing the Company to resume payroll deductions. A Participant's withdrawal
from an Option Period will not affect the Participant's eligibility to
participate in a succeeding Option Period.
In the event a Participant ceases to be an Eligible Employee during an
Option Period, the Participant will be deemed to have elected to withdraw from
the 1997 Plan, the payroll deductions credited to the Participant's account will
be returned to the Participant, and the Participant's options to purchase shares
under the 1997 Plan will be terminated.
AMENDMENT AND TERMINATION OF THE 1997 PLAN. The Board may at any time, or
from time to time, amend the 1997 Plan in any respect; provided, however, that
the 1997 Plan may not be amended in any way that will cause rights issued under
the 1997 Plan to fail to meet the requirements for employee stock purchase plans
as defined in Section 423 of the Code or any successor thereto, including,
without limitation, shareholder approval if required.
The 1997 Plan and all rights of Eligible Employees shall terminate: (i) on
the first Exercise Date that Participants become entitled to purchase a number
of shares greater than the number of reserved shares remaining available for
purchase under the 1997 Plan; or (ii) at any time, at the discretion of the
Board. In the event that the 1997 Plan terminates under circumstances described
in (i) above, reserved shares remaining as of the termination date shall be sold
to Participants on a pro rata basis.
MISCELLANEOUS. Options to purchase Common Stock under the 1997 Plan are not
transferable by a Participant and are exercisable only by the Participant. The
1997 Plan shall be administered by a Committee to be appointed by, and serve at
the pleasure of, the Board.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain federal tax considerations for
employees participating in the 1997 Plan and certain federal tax effects to the
Company. However, the summary does not address every situation that may
16
<PAGE>
result. For example, it does not discuss state taxes or the tax implications
arising from a Participant's death. The 1997 Plan is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, and the
provisions of Section 401(a) of the Code are not applicable to the 1997 Plan.
1. Amounts deducted from an employee's pay under the 1997 Plan are
included in the employee's compensation subject to federal income and
social security taxes. The Company will withhold taxes on these amounts. An
employee will not recognize any additional income at the time he or she
elects to participate in the 1997 Plan, or purchases Common Stock under the
1997 Plan.
2. If an employee disposes of Common Stock purchased pursuant to the
1997 Plan within two years after the first business day of the Option
Period in which such Common Stock was purchased, the employee will
recognize ordinary compensation income at the time of disposition in an
amount equal to the excess of the fair market value of the Common Stock on
the day the Common Stock was purchased over the purchase price the employee
paid for the Common Stock. In addition, the employee generally will
recognize a capital gain or loss in an amount equal to the difference
between the amount realized upon the sale of the Common Stock and his or
her basis in the Common Stock (that is, his or her purchase price plus the
amount taxed as compensation income). If the shares have been held for more
than one year, such gain or loss will be long-term capital gain or loss.
3. If an employee disposes of Common Stock purchased pursuant to the
1997 Plan more than two years after the first business day of the Option
Period in which such Common Stock was purchased, the employee will
recognize as ordinary compensation income at the time of such disposition
an amount equal to the lesser of (a) the excess of the fair market value of
the Common Stock measured at the time of such disposition over the amount
paid for the Common Stock, or (b) 15% of the fair market value of the
Common Stock measured as of the first business day of the Option Period in
which the Common Stock was purchased. In addition, the employee generally
will recognize a long-term capital gain or loss in an amount equal to the
difference between the amount realized upon the disposition of the Common
Stock and his or her basis in the Common Stock (that is, his or her
purchase price plus the amount, if any, taxed as compensation income).
4. Although the amounts deducted from an employee's pay under the 1997
Plan generally are tax-deductible business expenses of the Company, the
Company generally will not be allowed any additional deduction by reason of
any employee's purchase of Common Stock under the 1997 Plan. However, if an
employee disposes of Common Stock purchased pursuant to the 1997 Plan
within two years after the first business day of the Option Period in which
such Common Stock was purchased, the Company will be entitled to a
deduction in an amount equal to the compensation income recognized by the
employee. If an employee disposes of Common Stock purchased under the 1997
Plan more than two years after the first business day of the Option Period
in which such Common Stock was purchased, the Company will not be entitled
to a deduction for federal income tax purposes with respect to such Common
Stock.
REQUIRED AFFIRMATIVE VOTE
The affirmative vote of holders of a majority of the shares of Common Stock
entitled to vote in person or by proxy at the 1997 Annual Meeting of
Stockholders is required to approve the 1997 Equity Corporation International
Employee Stock Purchase Plan. If not approved, the 1997 Plan will not become
effective.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE 1997 EQUITY CORPORATION INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN, AND
PROXIES EXECUTED AND RETURNED WILL BE SO VOTED UNLESS CONTRARY INSTRUCTIONS ARE
INDICATED THEREON.
17
<PAGE>
PROPOSALS OF STOCKHOLDERS
Any proposal of stockholders intended to be presented at the next annual
meeting must be received at the Company's principal executive offices no later
than December 24, 1997, and must otherwise comply with the requirements of the
Company's Bylaws and Rule 14a-8 under the Exchange Act, if the proposal is to be
considered for inclusion in the Company's proxy statement relating to such
meeting.
ANNUAL REPORT AND INFORMATION
FOR STOCKHOLDERS
A copy of the Company's Annual Report on Form 10-K for the Year Ended
December 31, 1996, including any financial statements and schedules thereto, is
included in the Company's 1996 Annual Report provided to the Company's
stockholders along with this Proxy Statement and also may be obtained without
charge by written request to Investor Relations, Equity Corporation
International, 415 South First Street, Suite 210, Lufkin, Texas 75901. Upon
payment of the Company's reasonable expense of furnishing the exhibits
requested, the Company will furnish any exhibit to the Form 10-K to any person
whose vote is solicited by this Proxy Statement.
OTHER BUSINESS
The Board of Directors of the Company is not aware of other matters to be
presented for action at the Meeting; however, if any such matters are presented
for action, it is the intention of the persons named in the accompanying proxy
to vote in accordance with their judgment.
By Order of the Board of Directors,
JAMES P. HUNTER, III
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Lufkin, Texas
April 23, 1997
18
<PAGE>
EXHIBIT A
1997 EQUITY CORPORATION INTERNATIONAL
EMPLOYEE STOCK PURCHASE PLAN
Equity Corporation International hereby establishes the 1997 Equity
Corporation International Employee Stock Purchase Plan (the "Plan"), the terms
of which are as set forth below.
1. DEFINITIONS.
As used in the Plan the following terms shall have the meanings set
forth below:
(a)"Account" means a ledger account established by the Company for a
Participant.
(b)"Board" means the Board of Directors of the Company.
(c)"Code" means the Internal Revenue Code of 1986, as amended.
(d)"Committee" means the Compensation Committee of the Board.
(e)"Common Stock" means the common stock, $0.01 par value, of Equity
Corporation International.
(f)"Company" means Equity Corporation International, a Delaware
corporation, or any successor.
(g)"Continuous Employment" means the absence of any interruption or
termination of service as an Eligible Employee with the Participating
Companies. Continuous Employment shall not be considered interrupted in the
case of an authorized leave of absence, provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
(h)"Eligible Compensation" means, with respect to each Participant, the
regular cash base compensation (wages, salary or commissions) paid to the
Participant by the Participating Companies each pay period during the
Option Period, including any elective salary deferral contributions made
therefrom pursuant to Code Sections 125, 129 or 401(k), but excluding
bonuses and all other items of compensation.
(i)"Eligible Employee" means an employee of the Participating Companies
who is customarily employed for at least 20 hours per week and more than
five months in a calendar year.
(j)"Enrollment Date" means the first day of each Option Period.
(k)"Exercise Date" means the last day of each Option Period.
(l)"Exercise Price" means the price per share of the shares of Common
Stock offered in a given Option Period determined as provided in Section 10
below.
(m)"Fair Market Value" means, with respect to a share of Common Stock as
of any Enrollment Date or Exercise Date, closing sales price per share of
the Common Stock for such date (or, in the event that the Common Stock is
not traded on such date, on the immediately preceding trading date), as
reported in THE WALL STREET JOURNAL for the Nasdaq National Market or, in
the event the Common Stock is listed on a stock exchange, the fair market
value per share shall be the closing sales price on such exchange on such
date (or, in the event that the Common Stock is not traded on such date, on
the immediately preceding trading date), as reported in THE WALL STREET
JOURNAL.
A-1
<PAGE>
(n)"Option Period" means each six-month period commencing on January 1
and terminating on the following June 30 or commencing on July 1 and
terminating on the following December 31; provided, however,
notwithstanding the foregoing the initial Option Period shall commence on
the later of (i) May 1, 1997 or (ii) the effective date of the S-8
Registration Statement covering the shares of Common Stock issuable under
the Plan and shall end on June 30, 1997.
(o)"Participant" means an Eligible Employee who has elected to
participate in the Plan by filing an enrollment agreement with the Company
as provided in Section 7 below.
(p)"Participating Companies" means the Company and each present and
future Subsidiary that the Committee, in its sole discretion, from time to
time designates to be a Participating Company.
(q)"Subsidiary" means any corporation, domestic or foreign, of which the
Company owns, directly or indirectly, not less than 50% of the total
combined voting power of all classes of stock or other equity interests and
that otherwise qualifies as a "subsidiary corporation" within the meaning
of Section 424(f) of the Code or any successor thereto.
2. PURPOSE OF THE PLAN.
The purpose of the Plan is to provide an incentive for present and
future employees of the Participating Companies to acquire a proprietary
interest (or increase an existing proprietary interest) in the Company through
the purchase of Common Stock. It is the intention of the Company that the Plan
qualify as an "employee stock purchase plan" under Section 423 of the Code.
Accordingly, the provisions of the Plan shall be administered, interpreted and
construed in a manner consistent with the requirements of that section of the
Code.
3. SHARES RESERVED FOR THE PLAN.
There shall be reserved for issuance and purchase by Participants under
the Plan an aggregate of 500,000 shares of Common Stock, subject to adjustment
as provided in Section 15 below. Shares of Common Stock subject to the Plan may
be newly issued shares or treasury shares. If and to the extent that any option
to purchase shares of Common Stock shall not be exercised for any reason or if
such right to purchase shares shall terminate as provided herein, the shares
that have not been so purchased hereunder shall again become available for the
purposes of the Plan unless the Plan shall have been terminated.
4. ADMINISTRATION OF THE PLAN.
(a)The Plan shall be administered by a Committee appointed by, and which
shall serve at the pleasure of, the Board. The Committee shall have authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to correct any defect or rectify any omission in this Plan
or to reconcile any inconsistency in this Plan or any option, and to make all
other determinations necessary or advisable for the administration of the Plan,
all of which actions and determinations shall be final, conclusive and binding
on all persons. The act or determination of a majority of the members of the
Committee shall be deemed to be the act or determination of the Committee.
(b)The Committee may request advice or assistance or employ such other
persons as it in its discretion deems necessary or appropriate for the proper
administration of the Plan, including, but not limited to employing a brokerage
firm, bank or other financial institution to assist in the purchase of shares,
delivery of reports or other administrative aspects of the Plan.
(c)All Eligible Employees granted options under the Plan shall have the
same rights and privileges; however, the Plan will not fail to satisfy this
requirement merely because the amount of Common Stock which may be purchased by
any Eligible Employee is determined on the basis of a uniform relationship to
the Eligible Compensation of Eligible
A-2
<PAGE>
Employees, or because the Plan provides that no Eligible Employee may purchase
more than a maximum amount of Common Stock as set forth under the Plan.
5. ELIGIBILITY TO PARTICIPATE IN THE PLAN.
Subject to the further provisions of the Plan, each Eligible Employee
who is employed by a Participating Company on an Enrollment Date shall be
eligible to participate in the Plan for the Option Period beginning on that
Enrollment Date.
6. OPTION PERIODS.
The Plan shall consist of consecutive Option Periods until the Plan is
terminated.
7. ELECTION TO PARTICIPATE IN THE PLAN.
(a)Each Eligible Employee may elect to participate in the Plan by
completing an enrollment agreement in the form provided by the Company and
filing such enrollment agreement with the Company prior to the applicable
Enrollment Date, unless another time for filing the enrollment form is set by
the Committee for all Eligible Employees with respect to a given Option Period.
(b)Payroll deductions for a Participant shall commence on the first
payroll date following the Enrollment Date and shall end on the last payroll
date in the Option Period to which such authorization is applicable, unless
sooner terminated by the Participant as provided in Section 12.
(c)Unless a Participant elects otherwise prior to the Enrollment Date of
the immediately succeeding Option Period, an Eligible Employee who is
participating in an Option Period as of the Exercise Date of such Option Period
shall be deemed (i) to have elected to participate in the immediately succeeding
Option Period and (ii) to have authorized the same payroll deduction for such
immediately succeeding Option Period as was in effect for such Participant
immediately prior to the succeeding Option Period.
8. PAYROLL DEDUCTIONS.
(a)All Participant contributions to the Plan shall be made only by
payroll deductions. At the time a Participant files the enrollment agreement
with respect to an Option Period, the Participant shall authorize payroll
deductions to be made on each payroll date during the Option Period in an amount
of from 1% to 10% of the Eligible Compensation which the Participant receives on
each payroll date during such Option Period. The amount of such payroll
deductions shall be a whole percentage (i.e., 1%, 2%, 3%, etc.) of the
Participant's Eligible Compensation.
(b)All payroll deductions made for a Participant may be deposited in the
Company's general corporate account and shall be credited to the Participant's
Account under the Plan. No interest shall accrue or be credited with respect to
the payroll deductions of a Participant under the Plan. A Participant may not
make any additional payments into such Account. All payroll deductions received
or held by the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.
(c)Except as provided in Section 12, a Participant may not change his
contribution election during an Option Period.
(d)Notwithstanding the foregoing, no Participant may make payroll
deductions during any year in excess of $21,250.
A-3
<PAGE>
9. GRANT OF OPTIONS.
(a)On the Enrollment Date of each Option Period, subject to the
limitations set forth in Sections 3 and 9(b) hereof, each Eligible Employee
shall be granted an option to purchase on the Exercise Date for such Option
Period (at the Exercise Price determined as provided in Section 10 below) up to
a number of shares of the Company's Common Stock determined by dividing such
Eligible Employee's payroll deductions accumulated during the Option Period
ending on such Exercise Date by 85% of the fair market value of a share of the
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower.
(b)Notwithstanding any provision of the Plan to the contrary, no
Eligible Employee shall be granted an option under the Plan (i) if, immediately
after the grant, such Eligible Employee (or any other person whose stock would
be attributed to such Employee pursuant to Section 424(d) of the Code) would own
stock and/or hold outstanding options to purchase stock possessing 5% or more of
the total combined voting power or value of all classes of stock of the Company
or of any Subsidiary of the Company, or (ii) which permits such Eligible
Employee's rights to purchase stock under all employee stock purchase plans of
the Company and its Subsidiaries to accrue at a rate which exceeds $25,000 of
fair market value of such stock (determined at the time such option is granted)
for each calendar year in which such option is outstanding at any time.
10.EXERCISE PRICE.
The Exercise Price of each of the shares offered in a given Option
Period shall be the lower of: (i) 85% of the Fair Market Value of a share of the
Common Stock on the applicable Enrollment Date, or (ii) 85% of the Fair Market
Value of a share of the Common Stock on the applicable Exercise Date.
11.EXERCISE OF OPTIONS.
Unless a Participant withdraws from the Plan as provided in Section 12,
the Participant's option for the purchase of shares will be exercised
automatically on each Exercise Date, and the maximum number of shares subject to
the option will be purchased for the Participant at the applicable Exercise
Price with the accumulated payroll deductions in the Participant's Account.
12.WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a)A Participant may withdraw all but not less than all of the payroll
deductions credited to the Participant's Account under the Plan at any time by
giving written notice to the Company. All of the Participant's payroll
deductions credited to the Participant's Account will be paid to him promptly
after receipt of the Participant's notice of withdrawal, the Participant's
participation in the Plan will be automatically terminated, and no further
payroll deductions for the purchase of shares will be made. Payroll deductions
will not resume on behalf of a Participant who has withdrawn from the Plan
unless written notice is delivered to the Company within the enrollment period
preceding the commencement of a new Option Period directing the Company to
resume payroll deductions.
(b)Upon termination of the Participant's Continuous Employment prior to
the Exercise Date of the Option Period for any reason, including retirement or
death, the payroll deductions credited to the Participant's Account will be
returned to the Participant or, in the case of death, to the Participant's
estate, and the Participant's options to purchase shares under the Plan will be
automatically terminated.
(c)In the event a Participant ceases to be an Eligible Employee during
an Option Period, the Participant will be deemed to have elected to withdraw
from the Plan, the payroll deductions credited to the Participant's Account will
be returned to the Participant, and the Participant's options to purchase shares
under the Plan will be terminated.
(d)A Participant's withdrawal from an Option Period will not affect the
Participant's eligibility to participate in a succeeding Option Period.
A-4
<PAGE>
13.TRANSFERABILITY.
Options to purchase Common Stock granted under the Plan are not
transferable by a Participant and are exercisable only by the Participant.
14.REPORTS.
Individual Accounts will be maintained for each Participant in the Plan.
Statements of Accounts will be given to participating Employees semi-annually
promptly following each Exercise Date, which statements will set forth the
amounts of payroll deductions, the per share purchase price, the number of
shares purchased and the remaining cash balance, if any.
15.ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a)If the outstanding shares of Common Stock are increased or decreased,
or are changed into or are exchanged for a different number or kind of shares,
as a result of one or more reorganizations, restructurings, recapitalizations,
reclassifications, stock splits, reverse stock splits, stock dividends or the
like, upon authorization of the Committee, appropriate adjustments may be made
in the number and/or kind of shares, and the per share option price thereof,
which may be issued in the aggregate and to any Participant upon exercise of
options granted under the Plan.
(b)In the event of the proposed dissolution or liquidation of the
Company, each Option Period will terminate immediately prior to the consummation
of such proposed action, unless otherwise provided by the Committee. In the
event of a proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another corporation, each
option under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Committee determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the
Participant shall have the right to exercise the option as to all of the
optioned stock, including shares as to which the option would not otherwise be
exercisable. If the Committee makes an option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Committee shall notify the Participant that the option shall be fully
exercisable for a stated period, which shall not be less than 10 days from the
date of such notice, and the option will terminate upon the expiration of such
period.
(c)In all cases, the Committee shall have full discretion to exercise
any of the powers and authority provided under this Section 15, and the
Committee's actions hereunder shall be final and binding on all Participants. No
fractional shares of stock shall be issued under the Plan pursuant to any
adjustment authorized under the provisions of this Section 15.
16.AMENDMENT OF THE PLAN.
The Board may at any time, or from time to time, amend the Plan in any
respect; provided, however, that the Plan may not be amended in any way that
will cause rights issued under the Plan to fail to meet the requirements for
employee stock purchase plans as defined in Section 423 of the Code or any
successor thereto, including, without limitation, shareholder approval if
required.
17.TERMINATION OF THE PLAN.
The Plan and all rights of Eligible Employees hereunder shall terminate:
(a)on the Exercise Date that Participants become entitled to purchase a
number of shares greater than the number of reserved shares remaining
available for purchase under the Plan; or
(b)at any time, at the discretion of the Board.
A-5
<PAGE>
In the event that the Plan terminates under circumstances described in
Section 17(a) above, reserved shares remaining as of the termination date shall
be sold to Participants on a pro rata basis.
18.NOTICES.
All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
19.SHAREHOLDER APPROVAL.
The Plan shall be subject to approval by the shareholders of the Company
within twelve months after the date the Plan is adopted by the Board of
Directors. If such shareholder approval is not obtained prior to the first
Exercise Date, the Plan shall be null and void and all Participants shall be
deemed to have withdrawn on such Exercise Date pursuant to Section 12.
20.CONDITIONS UPON ISSUANCE OF SHARES.
(a)The Plan, the grant and exercise of options to purchase shares of
Common Stock under the Plan, and the Company's obligation to sell and deliver
shares upon the exercise of options to purchase shares shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may, in the opinion of
counsel for the Company, be required. In the event the Company is required to
obtain from any commission or agency authority to issue any stock certificate,
the inability of the Company to obtain from any such commission or agency
authority that counsel for the Company deems necessary for the lawful issuance
of any such certificate will relieve the Company from liability to any
Participant, except to return to him the amount of the balance in his account.
(b)The Company may make such provisions as it deems appropriate for
withholding of amounts that the Company determines it is required to withhold
pursuant to applicable tax laws in connection with the purchase or sale by a
Participant of any Common Stock acquired pursuant to the Plan. The Company may
require a Participant to satisfy any relevant tax requirements before
authorizing any issuance of Common Stock to such Participant.
A-6
<PAGE>
PROXY
EQUITY CORPORATION INTERNATIONAL
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
ANNUAL MEETING MAY 21, 1997
The undersigned having received the notice and accompanying Proxy
Statement for said meeting hereby constitutes and appoints JAMES P. HUNTER, III
and W. CARDON GERNER (the "Proxy Committee"), and each of them, his true and
lawful agents and proxies with power of substitution in each, to represent and
vote at the Annual Meeting to be held on May 21, 1997, or at any adjournment
thereof on all matters coming before said meeting, all shares of EQUITY
CORPORATION INTERNATIONAL which the undersigned may be entitled to vote. The
above proxies are hereby instructed to vote as shown on the reverse side of this
card.
(Continued on Reverse Side)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
EQUITY CORPORATION INTERNATIONAL
MAY 21, 1997
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
A Please mark your
votes as in this
example
FOR all nominees WITHHOLD
(except as marked AUTHORITY to vote
below) for all nominees Class II Nominees:
1. ELECTION Kenneth W. Smith
OF [ ] [ ] J. Patrick Doherty
DIRECTORS
For, except vote withheld from the following directors(s):
- ----------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of Independent Accountants. [ ] [ ] [ ]
3. Approval of the 1997 Equity Corporation [ ] [ ] [ ]
International Employee Stock Purchase Plan.
4. In the discretion of the Proxy Committee
upon other matters as may properly come
before the meeting.
Please mark this box [ ]
if you will personally
be attending the meeting.
This Proxy, when properly executed, will be voted in the manner
directed by the undersigned stockholder. If no direction is made,
this proxy will be voted FOR proposals (1), (2) and (3). The Proxy
Committee is authorized to vote in their discretion on any other
matters that may properly come before the meeting.
You are encouraged to specify your choices by marking the
appropriate boxes above, but you need not mark any boxes if you
wish to vote in accordance with the Board of Directors' recommendations.
The Proxy Committee cannot vote your shares unless you sign and
return this card.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD USING THE ENCLOSED ENVELOPE.
SIGNATURE(S)______________________________________________ DATE _______________.
NOTE: Executors, administrators, trustees, etc., please give full title as such.
If a corporation, please sign in full corporate name by a duly authorized
officer. Joint owners should each sign personally.
