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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
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DATE OF EARLIEST EVENT REPORTED: JANUARY 19, 1999
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 2. ACQUISITION OR DISPOSITION OF ASSETS.
CONSUMMATION OF MERGER OF EQUITY CORPORATION INTERNATIONAL WITH A WHOLLY OWNED
SUBSIDIARY OF SERVICE CORPORATION INTERNATIONAL
Effective on January 19, 1999, pursuant to an 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 (the "Merger
Agreement"), by and among Service Corporation International, a Texas corporation
("SCI"), SCI Delaware Funeral Services, Inc., a Delaware corporation and a
wholly owned subsidiary of SCI ("Merger Sub"), and Equity Corporation
International, a Delaware corporation ("ECI"), Merger Sub merged with and into
ECI (the "Merger"), with ECI surviving the Merger as a wholly owned subsidiary
of SCI. The closing of the transactions contemplated by the Merger Agreement
took place on January 19, 1999. Pursuant to the terms of the Merger Agreement,
each outstanding share of ECI common stock, par value $.01 per share, issued and
outstanding immediately prior to the effective time of the Merger ("ECI Common
Stock") (excluding any shares held in ECI's treasury and held by any direct or
indirect wholly owned subsidiary of ECI) was converted into the right to receive
0.71053 validly issued, fully paid and nonassessable shares of common stock, par
value $1.00 per share, of SCI ("SCI Common Stock"). Approximately 15,515,126
shares of SCI Common Stock will be issued to ECI stockholders, representing
approximately 5.6% of the outstanding SCI common stock after the Merger. ECI
Common Stock is no longer transferable and certificates evidencing shares of ECI
Common Stock represent only the right to receive, without interest, shares of
SCI Common Stock. Cash will be paid in lieu of fractional shares of SCI Common
Stock. The consideration of the Merger was determined through negotiations
between the managements of ECI and SCI and was approved by their respective
boards of directors. The stockholders of ECI approved the Merger at a special
meeting on December 31, 1998.
Under the Merger Agreement, each unexpired and unexercised outstanding
ECI stock option to purchase shares of ECI Common Stock under (a) the ECI
Amended and Restated 1994 Long-Term Incentive Plan, the ECI 1998 Long-Term
Incentive Plan and the ECI 1997 Employee Stock Purchase Plan (the "ECI Stock
Plans") or (b) any stock plan or agreement of ECI, which by its terms is not
extinguished in the Merger, was converted into an option to purchase the number
of shares of SCI Common Stock equal to 0.71053 times the number of shares of ECI
Common Stock which could have been obtained prior to the Merger, at an exercise
price per share equal to the exercise price of each such share of ECI Common
Stock subject to such option divided by 0.71053. SCI also assumed the
obligations of ECI under the ECI Stock Plans.
On January 19, 1999, SCI and ECI issued a joint press release
announcing the consummation of the Merger. A copy of the press release is filed
as Exhibit 99.1 to this Current Report on Form 8-K. The contents of such Exhibit
are incorporated herein by reference.
ITEM 5. OTHER EVENTS
EXECUTION OF FIRST SUPPLEMENTAL INDENTURE
As of January 19, 1999, SCI, ECI and Bankers Trust Company, a banking
corporation duly organized and existing under the laws of the State of New York,
as Trustee, entered into a First Supplemental Indenture (the "Supplemental
Indenture") with respect to the Indenture, dated as of February 25, 1998,
between ECI and Bankers Trust Company (the "Original Indenture"), pursuant
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to which ECI issued 4 1/2% Convertible Subordinated Debentures due 2004,
redeemable at the election of ECI at any time after February 1, 2001 (the
"Debentures"). Pursuant to the Supplemental Indenture, SCI became a co-obligor
with respect to the payment obligations of ECI arising under the Original
Indenture and the Debentures. Additionally, the Debentures became convertible
into shares of SCI Common Stock. The Debentures will rank pari passu with all
senior indebtedness of SCI that is unsecured. SCI also assumed filing all
reports and other information as required by the Securities Exchange Act of
1934, as amended. SCI shall include in the notes to its consolidated financial
statements "summarized financial information" concerning ECI as required by the
Securities and Exchange Commission. A copy of the Supplemental Indenture is
filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
FEDERAL TRADE COMMISSION APPROVES MERGER
On January 19, 1999, SCI and ECI issued a joint press release
announcing that the Federal Trade Commission (the "FTC") has accepted the
Agreement Containing Consent Order signed by SCI and the FTC staff in December
1998, resolving regulatory concerns of the FTC staff with regard to the Merger.
A copy of the press release is filed as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Exhibits.
2.1 Agreement and Plan of Merger dated as of August 6,
1998, by and among Service Corporation
International, SCI Delaware Funeral Services, Inc.
and Equity Corporation International (incorporated
by reference to Appendix A to the Proxy
Statement/Prospectus included as part of Service
Corporation International's Registration Statement
on Form S-4 (File No. 333-66957)).
2.2 First Amendment to Agreement and Plan of Merger
dated as of December 14, 1998 (incorporated by
reference to Appendix A to the Supplement to Proxy
Statement/Prospectus included as part of a Rule
424(b) Prospectus to Service Corporation
International's Registration Statement on Form S-4
(File No. 333-66957)).
*4.1 First Supplemental Indenture, dated as of January
19, 1999, by Service Corporation International and
Equity Corporation International to Bankers Trust
Company.
*99.1 Joint press release dated January 19, 1999 issued by
Service Corporation International and Equity
Corporation International.
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*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EQUITY CORPORATION INTERNATIONAL
By: /s/ W. Cardon Gerner
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W. Cardon Gerner
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer
and Duly Authorized Officer)
Date: January 19, 1999
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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2.1 Agreement and Plan of Merger dated as of August 6, 1998, by and among
Service Corporation International, SCI Delaware Funeral Services,
Inc. and Equity Corporation International (incorporated by reference
to Appendix A to the Proxy Statement/Prospectus included as part of
Service Corporation International's Registration Statement on Form
S-4 (File No. 333-66957)).
2.2 First Amendment to Agreement and Plan of Merger dated as of December
14, 1998 (incorporated by reference to Appendix A to the Supplement
to Proxy Statement/Prospectus included as part of a Rule 424(b)
Prospectus to Service Corporation International's Registration
Statement on Form S-4 (File No. 333-66957)).
*4.1 First Supplemental Indenture, dated as of January 19, 1999, by and
among Service Corporation International, Equity Corporation
International and Bankers Trust Company.
*99.1 Joint press release dated January 19, 1999 issued by Service
Corporation International and Equity Corporation International.
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*Filed herewith.
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EXHIBIT 4.1
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SERVICE CORPORATION INTERNATIONAL
AND
EQUITY CORPORATION INTERNATIONAL
TO
BANKERS TRUST COMPANY
AS TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
Dated as of January 19, 1999
Supplementing and Amending Indenture Dated as of February 25, 1998
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of January 19, 1999 and
effective and conditioned upon the consummation of the Merger (as defined below)
(this "Supplemental Indenture"), is by and among Equity Corporation
International, a corporation duly organized and existing under the laws of the
State of Delaware ("ECI"), having its principal executive office at 415 South
First Street, Suite 210, Lufkin, Texas 75901, Service Corporation International,
a corporation duly organized and existing under the laws of the State of Texas
("SCI"), having its principal executive office at 1929 Allen Parkway, Houston,
Texas 77019, and Bankers Trust Company, a banking corporation duly organized and
existing under the laws of the State of New York, as Trustee (the "Trustee").
RECITALS OF ECI AND SCI
1. ECI has executed and delivered to the Trustee its Indenture, dated
as of February 25, 1998 (the "Indenture"), to provide for the issuance of its 4
1/2% Convertible Subordinated Debentures due 2004 in an original principal
amount of $143,750,000, all of which are currently outstanding (the
"Securities").
2. Effective at such time as a Certificate of Merger is filed with the
Secretary of State of the State of Delaware, SCI Delaware Funeral Services,
Inc., a Delaware corporation and a wholly owned subsidiary of SCI ("Merger
Sub"), will be merged with and into ECI pursuant to the provisions of the
General Corporation Law of the State of Delaware (the "Merger"), as a result of
which ECI will become a wholly owned subsidiary of SCI.
3. Each share of common stock of ECI which is issued and outstanding
immediately prior to the Merger will be, by virtue of the Merger and without any
action on the part of the holder thereof, converted into the number of shares of
the common stock, par value $1.00 per share, of SCI (the "SCI Shares")
determined by the provisions 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 ECI, SCI and Merger Sub.
4. In connection with the Merger, ECI and SCI, pursuant to appropriate
resolutions of their respective boards of directors, have duly determined to
make, execute and deliver to the Trustee this Supplemental Indenture in order to
reflect the results of the Merger as required by the Indenture and to provide
for SCI to become a co-obligor with respect to certain obligations of ECI
arising under the Indenture and the Securities.
5. Pursuant to Section 4.11 of the Indenture, ECI, as the survivor to
the Merger, and SCI, as the company whose shares will be issued upon conversion
of the Securities, are required to execute and deliver to the Trustee an
indenture, supplemental to the Indenture, prior to the consummation of the
Merger.
6. The Indenture provides that, without the consent of any Holders, ECI
and the Trustee may enter into a supplemental indenture to comply with Section
4.11 of the Indenture, among other things.
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7. The Board of Directors of ECI has determined that the provisions of
this Supplemental Indenture are considered reasonably necessary to protect the
interests of the Holders of the Securities.
8. ECI has determined that this Supplemental Indenture may therefore be
entered into without the consent of any Holder in accordance with Section 11.1
of the Indenture.
9. ECI and SCI have duly authorized the execution and delivery of this
Supplemental Indenture and all things necessary have been done to make this
Supplemental Indenture a valid agreement of ECI and SCI, in accordance with its
terms.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises, it is mutually agreed, for
the equal and proportionate benefit of the respective Holders from time to time
of the Securities, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 INDENTURE TERMS.
Capitalized terms used but not defined in this Supplemental Indenture
have the respective meanings assigned to them in the Indenture.
ARTICLE TWO
CONCERNING THE SECURITIES
SECTION 2.1 CONVERSION PRIVILEGE.
The Holder of each Security outstanding on the date hereof shall have
the right from and after the effective date hereof, during the period such
Security shall be convertible as specified in Section 4.1 of the Indenture, to
convert such Security only into the number of SCI Shares, and cash in lieu of
fractional SCI Shares, receivable upon the effectiveness of the Merger by a
holder of the number of shares of Common Stock of the Company into which such
Security could have been converted immediately prior to the Merger, subject to
adjustment as provided in Section 2.2 herein.
SECTION 2.2 CONVERSION PRICE.
The price at which SCI Shares shall be delivered upon conversion of the
Securities (the "Conversion Price") shall be the price specified in paragraph 8
of the Securities, as adjusted in accordance with Article 4 of the Indenture
prior to the Merger. For
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events subsequent to the effective date of this Supplemental Indenture, the
Conversion Price shall be adjusted in a manner as nearly equivalent as may be
practical to the adjustments provided for in Article 4 of the Indenture.
SECTION 2.3 SCI AS A CO-OBLIGOR.
ECI, SCI and the Trustee hereby agree that as of the effective date of
this Supplemental Indenture, SCI shall become a co-obligor with ECI (but not as
a successor to ECI) under the Indenture, as modified by this Supplemental
Indenture, and the Securities, and shall be jointly and severally liable with
ECI for the due and punctual payment of the principal of (and premium, if any)
and interest on the Securities, as fully and effectively as if SCI had
originally been an obligor under such Securities; provided, however, that SCI is
not assuming, or becoming a co-obligor for, the performance of any obligation or
liability of ECI under the Indenture or the Securities other than such payments;
provided further, that the obligations of SCI under the Indenture, as
supplemented by this Supplemental Indenture, and the Securities shall be (i)
subordinate and junior in right of payment to the prior payment in full of all
secured indebtedness of SCI, (ii) rank pari passu in right of payment with all
Senior Indebtedness of SCI that is unsecured, and (iii) rank senior in right of
payment to all subordinated indebtedness of SCI. "Senior Indebtedness of SCI"
means indebtedness which is not by its terms subordinate or junior in any
respect to any other indebtedness or other obligation of SCI.
SECTION 2.4 SEC REPORTS.
In the event that ECI is no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, SCI shall file all
reports and other information and documents which it is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and within 15 days
after it files them with the SEC, SCI shall file copies of all such reports,
information and other documents with the Trustee. In such event, the notes to
the consolidated financial statements of SCI shall include "summarized financial
information" concerning ECI as required by the SEC. The Trustee acknowledges
that ECI, in the event it is no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, will not be required to prepare
separate financial statements pursuant to Section 6.2 of the Indenture.
ARTICLE THREE
CONCERNING THE TRUSTEE
SECTION 3.1 TERMS AND CONDITIONS.
The Trustee accepts this Supplemental Indenture and agrees to perform
the duties of the Trustee upon the terms and conditions herein and in the
Indenture set forth.
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SECTION 3.2 NO RESPONSIBILITY.
The Trustee shall not be responsible in any manner whatsoever for or in
respect of (i) the validity or sufficiency of this Supplemental Indenture, the
authorization or permissibility of this Supplemental Indenture pursuant to the
terms of the Indenture or the due execution thereof by ECI or SCI or (ii) the
recitals herein contained, all such recitals being made by ECI and SCI. The
Trustee shall not be responsible in any manner to determine the correctness of
provisions contained in this Supplemental Indenture relating either to the kind
or amount of securities receivable by Holders of Securities upon the conversion
of their Securities after the Merger or to any adjustment provided herein.
ARTICLE FOUR
EFFECT OF EXECUTION AND DELIVERY HEREOF
From and after the execution and delivery of this Supplemental
Indenture, (i) the Indenture shall be deemed to be amended and modified as
provided herein, (ii) this Supplemental Indenture shall form a part of the
Indenture, (iii) except as modified and amended by this Supplemental Indenture,
the Indenture shall continue in full force and effect, (iv) the Securities shall
continue to be governed by the Indenture, as modified and amended by this
Supplemental Indenture, and (v) every Holder of Securities heretofore and
hereafter authenticated and delivered under the Indenture shall be bound by this
Supplemental Indenture.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 5.1 HEADINGS DESCRIPTIVE.
The headings of the several Articles and Sections of this Supplemental
Indenture are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Supplemental Indenture.
SECTION 5.2 RIGHTS AND OBLIGATIONS OF THE TRUSTEE.
All of the provisions of the Indenture, including but not limited to
the compensation and indemnity obligations pursuant to Section 9.7 of the
Indenture, with respect to the rights, privileges, immunities, powers and duties
of the Trustee shall be applicable in respect of this Supplemental Indenture as
fully and with the same effect as if set forth herein in full. In the event ECI
defaults solely in its payment obligations under clauses (1) or (2) of Section
8.1 of the Indenture, the Trustee shall immediately make written demand upon SCI
for such payment obligations. Upon any default by SCI in such payment
obligations, any remedy which the Trustee or any security holder is authorized
to bring against ECI under Article 8 of the Indenture may be brought, under the
same circumstances and conditions (including notice requirements), against SCI.
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SECTION 5.3 SUCCESSORS AND ASSIGNS.
This Supplemental Indenture shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto and the Holders of any Securities then outstanding.
SECTION 5.4 COUNTERPARTS.
This Supplemental Indenture may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same instrument.
SECTION 5.5 GOVERNING LAW.
This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
EQUITY CORPORATION INTERNATIONAL
By: /s/ James P. Hunter, III
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Name: James P. Hunter, III
Title: Chairman, President and
Chief Executive Officer
SERVICE CORPORATION INTERNATIONAL
By: /s/ James M. Shelger
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Name: James M. Shelger
Title: Senior Vice President, General
Counsel and Secretary
BANKERS TRUST COMPANY, as Trustee
By: /s/ Ednora G. Linares
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Name: Ednora G. Linares
Title: Assistant Vice President
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EXHIBIT 99.1
SERVICE CORPORATION INTERNATIONAL AND
EQUITY CORPORATION INTERNATIONAL
JOINTLY ANNOUNCE COMPLETION OF MERGER
HOUSTON, TEXAS, January 19, 1999...Service Corporation International (NYSE:
SRV) ("SCI") and Equity Corporation International (NYSE: EQU) ("ECI") jointly
announced today the consummation of the previously announced merger between ECI
and a wholly-owned subsidiary of SCI (the "Merger"). As determined in accordance
with the merger agreement, the stockholders of ECI will receive 0.71053 of a
share of SCI common stock for each share of ECI common stock.
SCI and ECI also announced that the Federal Trade Commission has accepted the
Agreement Containing Consent Order signed by SCI and the FTC staff in December
1998, resolving regulatory concerns of the FTC staff with regard to the Merger.
SCI affiliates now operate approximately 3,700 funeral locations and 500
cemeteries in 18 countries on five continents, as a result of the merger.
For additional information contact:
SCI: Todd A. Matherne, Vice President & Treasurer Tel: (713) 525-5243
Media:
Kate Inverarity, Brunswick Group Tel: (212) 333-3810
ECI: W. Cardon Gerner, Chief Financial Officer Tel: (409) 631-8703
Media:
Michael Porter, Porter LeVay & Rose Tel: (212) 564-4700
Other Service Corporation International and press releases are available through
Company News On-Call by fax, (800) 758-5804, extension 104532, or at HYPERLINK
http://www.prnewswire.com http://www.prnewswire.com or SCIAEs homepage:
http://www.sci-corp.com.
