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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934
----------------------------
DATE OF EARLIEST EVENT REPORTED: DECEMBER 21, 1998
EQUITY CORPORATION INTERNATIONAL
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-24728 75-2521142
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
415 SOUTH FIRST STREET, SUITE 210
LUFKIN, TEXAS 75901
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (409) 631-8700
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ITEM 5. OTHER EVENTS
AMENDMENT TO STOCKHOLDER RIGHTS AGREEMENT
The Company has amended its Stockholder Rights Agreement to include
Service Corporation International, or its affiliates or associates, as Persons
not considered Acquiring Persons. Additionally, no Person shall be deemed to be
an Acquiring Person, and no Shares Acquisition Date, Distribution Date or
Section 11(a)(ii) Trigger Date shall be deemed to occur, by reason of the
approval, execution and delivery of the Agreement and Plan of Merger dated as of
August 6, 1998, as amended by the First Amendment to Agreement and Plan of
Merger dated as of December 14, 1998, by and among the Company, SCI and SCI
Delaware Funeral Services, Inc., a Delaware corporation and a wholly owned
subsidiary of SCI, or the announcement or consummation of the transactions
contemplated thereby.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
4.1 Third Amendment to Stockholder Rights Agreement, dated as of
December 21, 1998, between the Company and American Stock
Transfer & Trust Company, as Rights Agent.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
EQUITY CORPORATION INTERNATIONAL
By: /s/ W. Cardon Gerner
--------------------------------------------
W. Cardon Gerner
Senior Vice President and Chief Financial
Officer
(Principal Financial Officer
and Duly Authorized Officer)
Date: December 21, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
4.1 Third Amendment to Stockholder Rights Agreement, dated as
of December 21, 1998, between the Company and American
Stock Transfer & Trust Company, as Rights Agent.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
THIRD AMENDMENT
TO
STOCKHOLDER RIGHTS AGREEMENT
This Third Amendment to the Stockholder Rights Agreement (this
"Amendment") between Equity Corporation International, a Delaware corporation
(the "Company"), and American Stock Transfer & Trust Company, a New York
corporation, as Rights Agent (the "Rights Agent"), is dated as of December 21,
1998. Capitalized terms used herein but not defined shall have the meanings
assigned to such terms in the Stockholder Rights Agreement.
RECITALS:
WHEREAS, the Company and the Rights Agent have previously entered into
a Stockholder Rights Agreement dated as of October 13, 1994 and amended pursuant
to a certain First Amendment to Stockholder Rights Agreement dated as of
September 10, 1996, and a certain Second Amendment to Stockholder Rights
Agreement dated as of April 17, 1997 (the "Stockholder Rights Agreement"); and
WHEREAS, Section 26 of the Stockholder Rights Agreement provides that
prior to the Distribution Date (as defined therein) and subject to certain
exceptions, the Company and the Rights Agent shall, if the Company's Board of
Directors (including a majority of the Continuing Directors (as defined
therein)) so directs, supplement or amend any provision of the Stockholder
Rights Agreement without the approval of any holders of certificates
representing the Company's Common Shares (as defined therein); and
WHEREAS, the date of this Amendment is prior to the Distribution Date;
and
WHEREAS, the Board of Directors of the Company (including a majority of
the Continuing Directors) has directed that the Company and the Rights Agent
amend the Stockholder Rights Agreement pursuant to this Amendment;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereby agree as follows:
1. The definition of "Acquiring Person" in Section 1(a) of the
Stockholder Rights Agreement shall be amended and restated in its entirety to
read as follows:
""Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but
shall not include (i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee benefit plan of
the Company or any Subsidiary of the Company or any Person or entity
holding shares of capital stock of the Company for or pursuant to the
terms of any such plan, in its capacity as an agent or trustee for any
such plan, or (iv) Service Corporation International, a Texas
corporation ("SCI"), or any Affiliate or Associate of SCI, if SCI or
any Affiliate or Associate of SCI shall be the Beneficial Owner of 20%
or more of the Common Shares of the Company then outstanding as a
result of the approval, execution or delivery of the Merger Agreement
(as such term is hereinafter defined), or the announcement or
consummation of the transactions contemplated thereby. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" (A) as the
result of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 20% or more of
the
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Common Shares of the Company then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 20% or more of the
Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be an "Acquiring
Person" unless upon the consummation of the acquisition of such
additional Common Shares such Person does not own 20% or more of the
Common Shares then outstanding or (B) by reason of the approval,
execution or delivery of the Agreement and Plan of Merger dated as of
August 6, 1998, as amended by the First Amendment to Agreement and Plan
of Merger dated as of December 14, 1998, by and among the Company, SCI
and SCI Delaware Funeral Services, Inc., a Delaware corporation and a
wholly owned subsidiary of SCI (the "Merger Agreement"), or the
announcement or consummation of the transactions contemplated thereby."
2. The definition of "Shares Acquisition Date" in Section 1(o) of the
Stockholder Rights Agreement shall be amended and restated in its entirety to
read as follows:
""Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such. Notwithstanding anything else set forth in this
Agreement, no Distribution Date shall be deemed to have occurred solely
by reason of the approval, execution or delivery of the Merger
Agreement, or the announcement or consummation of the transactions
contemplated thereby."
3. Section 3(a) of the Stockholder Rights Agreement shall be amended
and restated in its entirety to read as follows:
"(a) Until the earlier of (i) the close of business on the
30th day after the Shares Acquisition Date and (ii) the close of
business on the 30th day after the date that a tender or exchange offer
by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company, any entity holding shares of capital stock of the Company for
or pursuant to the terms of any such plan, in its capacity as an agent
or trustee for any such plan, SCI or any Affiliate or Associate of SCI)
is first published or sent or given within the meaning of Rule 14d-2(a)
(or any successor rule) of the General Rules and Regulations under the
Exchange Act, the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 20% or more
of the then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
Common Shares registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be certificates
for the Rights) and not by separate certificates and (y) the Rights and
interests therein will be transferable only in connection with the
transfer of the associated Common Shares. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more Rights
certificates, in substantially the form of Exhibit B hereto (a "Rights
Certificate"), evidencing one Right for each Common Share so held,
subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per Common Share has been made
pursuant to Section 11(n) hereof, then at the time of distribution of
the Rights Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates." Notwithstanding anything
else set forth in this Agreement, no Distribution Date shall be
Exhibit 4.1 - Page 2
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deemed to have occurred solely by reason of the approval, execution and
delivery of the Merger Agreement, or the announcement or consummation
of the transactions contemplated thereby."
4. Section 11(a)(iii) of the Stockholder Rights Agreement shall be
amended and restated in its entirety to read as follows:
"(iii) In the event that the number of Common Shares which are
authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon exercise of a
Right (the "Current Value"), over (2) the Purchase Price (such excess,
the "Spread") and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) other equity securities of the Company (including, without
limitation, shares, or units of shares of preferred stock which the
Company's Board of Directors in office at the time has determined upon
Board Approval have the same value as the Common Shares (such shares or
units of shares of preferred stock, the "common stock equivalents")),
(4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the
Current Value, where such aggregate value has been determined by Board
Approval of the Company's Board of Directors in office at the time
based upon the advice of a nationally recognized investment banking
firm selected by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within 30 days following the
later of (x) the first occurrence of the date on which a Person has
become an Acquiring Person or the Shares Acquisition Date and (y) the
date on which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date," provided that no such Section
11(a)(ii) Trigger Date shall occur by reason of the approval, execution
or delivery of the Merger Agreement, or the announcement or
consummation of the transactions contemplated thereby), then the
Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the
Company's Board of Directors shall determine by Board Approval that it
is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary, but not more than
90 days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such period as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action
need be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Shares on such
date."
5. Section 24(a) of the Stockholder Rights Agreement shall be amended
and restated in its entirety to read as follows:
"(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to holders of its Preferred Shares or to
make any other distribution to the holders of its Preferred Shares
(other
Exhibit 4.1 - Page 3
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than a regular periodic cash dividend at a rate not in excess of 125%
of the rate of the last regular periodic cash dividend theretofore
paid), or (ii) to offer to the holders of its Preferred Shares rights
or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), or (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole)
to any other Person (other than pursuant to the Merger Agreement and
the transactions contemplated by the Merger Agreement), or (v) to
effect the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or consolidation
of the Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares), then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Rights
Certificate, in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes
of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or
(ii) above at least ten days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, in the
case of any action covered by clause (vi) above at least ten days prior
to the record date for determining holders of the Common Shares for
purposes of such action, and in the case of any such other action, at
least ten days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, whichever shall be the earlier."
6. Except as amended by this Amendment, the Stockholder Rights
Agreement shall remain in full force and effect.
7. This Amendment may be executed in any number of counterparts, and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Exhibit 4.1 - Page 4
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above written.
EQUITY CORPORATION INTERNATIONAL
By: /s/ W. Cardon Gerner
------------------------------------
Name: W. Cardon Gerner
Title: Senior Vice President and
Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Herbert J. Lemmer
------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
Exhibit 4.1 - Page 5
