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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Service Corp International Inc | NYSE:SCI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-2.01 | -2.89% | 67.59 | 70.185 | 67.19 | 69.94 | 1,298,466 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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Fee paid previously with preliminary materials:
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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.
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1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Service Corporation International
Proxy Statement and
2018 Annual Meeting Notice
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2017: Delivering Shareholder Value
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Total Shareholder Return
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GAAP Performance Measures
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Adjusted Performance Measures*
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Voting Matters
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How To Vote
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PROXY STATEMENT SUMMARY
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Corporate Governance Highlights and Changes
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Shareholder and Proxy Advisor Outreach
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Board Snapshot
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Director Nominees
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Continuing Directors
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Overview of Director Skills and Experience
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CORPORATE GOVERNANCE AT SERVICE CORPORATION INTERNATIONAL
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Proposal 1: Election of Directors
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Director Ownership of SCI Stock
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Consideration of Director Nominees
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Director Independence
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Change in Leadership Structure
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Risk Oversight
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No Shareholders Rights Plan
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Lead Independent Director
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Special Meeting of Shareholders
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Board Composition and Meetings
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Annual Board and Committee Evaluations
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Board Orientation and Education Program
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Executive Sessions
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Board Committees
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Director Compensation
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AUDIT COMMITTEE MATTERS
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Proposal 2: Proposal to Approve the Selection of the Independent Registered Public Accounting Firm
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Report of the Audit Committee
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Audit Fees and All Other Fees
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COMPENSATION DISCUSSION AND ANALYSIS
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Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation
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Introduction
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Executive Summary
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Key Features of Our Compensation Programs
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Consideration of 2017 "Say-on-Pay" Vote
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Compensation Philosophy and Process
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Annual Base Salaries
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Annual Performance-Based Incentives Paid in Cash
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Long-Term Incentive Compensation
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Other Compensation
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Further Executive Compensation Practices and Policies
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How We Make Compensation Decisions
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Compensation Committee Report
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EXECUTIVE COMPENSATION TABLES
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Summary Compensation Table
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Grants of Plan-Based Awards
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Outstanding Equity Awards at Fiscal Year End
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Option Exercises and Stock Vested
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Executive Deferred Compensation Plan
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Pension Plans
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Executive Employment Agreements
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Potential Payments Upon Termination
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CERTAIN TRANSACTIONS
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VOTING SECURITIES AND PRINCIPAL HOLDERS
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INTRODUCTION TO PROPOSALS 4, 5, AND 6
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Proposal 4: Proposal to Declassify the Board of Directors
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Proposal 5:
Proposal to Eliminate Certain Supermajority Vote Requirements in our Restated Articles of Incorporation and Bylaws
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Proposal 6: Proposal to Reduce the Supermajority Vote Requirement to Approve Business Combinations with Interested Shareholders
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Proposal 7: Shareholder Proposal to Require an Independent Board Chairman
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OTHER INFORMATION
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Information About the Meeting and Voting
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Proxy Solicitation
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Submission of Shareholder Proposals
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Other Business
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Section 16(a) Beneficial Ownership Reporting Compliance
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ANNEXES
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Annex A: Non-GAAP Financial Measures
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Annex B: 2017 Peer Group
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Annexes C-G: Amendments to Restated Articles of Incorporation and Bylaws
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Date and Time:
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Wednesday, May 23, 2018 at 9:00 a.m. Central Time
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Place:
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Conference Center, Heritage l and ll
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Service Corporation International
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1929 Allen Parkway
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Houston, Texas 77019
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Record Date:
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March 26, 2018
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Proposal
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Board Recommendation
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Page Number
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1.
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Election of Five Directors
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ü
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FOR each Director nominee
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2.
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Approval of Appointment of PricewaterhouseCoopers LLP, our Independent Registered Public Accounting Firm
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ü
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FOR
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3.
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"Say-on-Pay" Advisory Vote to Approve Executive Compensation
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FOR
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4.
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Approval of the Declassification of the Board of Directors
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ü
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FOR
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5.
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Approval of the Elimination of Certain Supermajority Vote Requirements in our Restated Articles of Incorporation and Bylaws
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ü
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FOR
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6.
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Approval of the Reduction of the Supermajority Vote Requirement to Approve Business Combinations with Interested Shareholders
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ü
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FOR
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7.
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Approval of the Shareholder Proposal to Require an Independent Board Chairman
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û
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AGAINST
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By Internet
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By Telephone
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By Mail
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In Person
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Vote your shares at www.proxyvote.com.
Have your Notice of Internet Availability or proxy card in hand for the 16-digit control number.
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Call toll-free number
1-800-690-6903.
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Sign, date, and return
the enclosed proxy card
or voting instruction form.
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To attend the
meeting in person,
you will need proof of
your share ownership
and valid picture I.D.
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For 2018,
there is an annual meeting website to make it even easier to access our annual meeting materials. At the annual meeting website, you can find an overview of the items for voting, our Proxy Statement and annual report to read online or to download, and a link to vote your shares.
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www.sciannualmeeting.com
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Tom Ryan answers questions received from shareholders over the course of 2017.
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1.
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Revenue Growth
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2.
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Leverage Scale
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3.
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Capital Deployment
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•
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Proposal 4: Proposal to declassify the board
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•
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Proposal 5: Proposal to eliminate certain supermajority vote requirements
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•
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Proposal 6: Proposal to reduce the supermajority vote requirements to approve business combinations with interested shareholders
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Lead Independent Director - Tony Coelho
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Key Duties and Responsibilities of Lead Independent Director:
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Preside over independent executive sessions held on a regular basis
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Serve as liaison to the Chairperson
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Engage in performance evaluation of directors and CEO
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Interview Director candidates
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Communicate with shareholders
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Consult with committee chairpersons
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Authorized to call a special meeting of the Directors*
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Anthony L. Coelho
Lead Independent Director
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Thomas L. Ryan
Chairman and CEO
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Alan R. Buckwalter, III
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Victor L. Lund
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John W. Mecom, Jr.
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Clifton H. Morris, Jr.
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Ellen Ochoa
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Robert L. Waltrip
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W. Blair Waltrip
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Marcus A. Watts
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Edward E. Williams
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Corporate Governance Highlights and Changes
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•
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The Nominating and Corporate Governance Committee has presented two new nominees for the Board of Directors. The Committee has considered the background and experience of Ms. Sara Martinez Tucker and Ms. Jakki Haussler. We believe each individually will bring valuable experience and diverse skills to our Board.
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•
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After 56 years of meaningful contributions, in order to recruit the next generation of leaders for our Board, Mr. R.L. Waltrip has decided not to seek another term as an elected member of our Board of Directors. As Mr. Waltrip is an icon and pioneer in our industry he will continue to serve in his capacity as Founder and Chairman Emeritus for the Company. Citing the same reasons as Mr. Waltrip and after over 35 years of service, Mr. John W. Mecom, Jr. has also informed the Board of his intention not to seek reelection once his term ends in May 2019.
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•
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If Proposal 4 is approved by shareholders then directors will be elected to a one-year term of office starting at the 2019 Annual Meeting of Shareholders, except Ms.
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The Board made changes to the Company's Bylaws to permit the Lead Director to call a special meeting of the Board and preside over Board meetings in the absence of the Board Chair.
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The Board made changes to the Company's Bylaws to permit the Chair of the Nominating and Corporate Governance Committee of the Board to preside over the Board meetings in the absence of the Board Chair, Lead Director and the Chief Executive Officer.
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The Board, in response to shareholder feedback, approved changes to the performance unit plan to add a return on equity modifier to the total shareholder return metric and changed the award denomination to share units rather than cash, which will be effective beginning January 1, 2018.
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Key Highlights
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Detail
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Reference Page
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Executive Compensation
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l
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We moved the return on equity metric from the short term compensation plan to a modifier in the long-term performance unit plan, which was previously solely based on total shareholder return.
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33
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l
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We eliminated the Umbrella Plan starting in 2018 due to certain changes in the Tax Act.
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We illustrated our alignment of pay and performance.
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Board-Related
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Board composition and refreshment remains a priority for us. We present two new nominees in this Proxy Statement. Ms. Sara Martinez Tucker and Ms. Jakki Haussler will bring diverse perspectives and experience to our Board of Directors. Mr. John W. Mecom, Jr. has communicated to the Company that he will not seek reelection for his seat next year. And lastly, in 2018, Mr. R.L. Waltrip decided not to seek another term as an elected member of our Board of Directors, but will still actively participate as Founder and Chairman Emeritus.
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We continue our annual Board and Committee evaluation process.
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l
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Strong Lead Independent Director. We created the role in 2016 with enhanced authority to call special Board meetings and to preside over Board meetings in the absence of the Chairman.
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Independent Audit, Compensation, and Nominating and Corporate Governance Committees
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We made changes to the Director's compensation.
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Shareholder Rights
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l
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Shareholder questions and concerns are communicated to and considered by the Board. Shareholders are allowed to call special meetings.
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l
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We conduct an annual "Say-on-Pay" vote
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Accounting White Paper
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l
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In response to shareholders' questions regarding the complexities of the Company's accounting for preneed sales, management published a white paper on its website in the fall of 2015, which has now been updated for the recent revenue recognition accounting standard change.
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You can view the
white paper at
under Featured Documents
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Board Snapshot
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Experience
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Skills
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Commitment
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With extensive experience in leadership positions and a proven record of success, our Board is qualified to oversee the Company’s strategy and management. The
Nominating and Corporate Governance Committee continually reviews and recommends enhancements to the Board’s leadership structure as
evidenced by the nominations of Jakki Hausler and Sara Martinez Tucker this year and Ellen Ochoa in 2015.
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Each Director brings a particular range of skills and expertise to the deliberations of the SCI Board, which facilitates constructive and challenging debate around the boardroom table (see page 13 for overview).
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The calendar of Board and Committee meetings is established to support the Board’s focus on strategic and long-term matters, while ensuring the discharge of its monitoring and oversight role effectively through high quality discussions and briefings.
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Director Age
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Meeting Attendance
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Personal Qualities
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The average age of our Board is 70. Including our two proposed nominees, the average decreases to 67. We believe the average age of our Directors gives our Board understanding and insight into the unique perspective of SCI’s consumer base. SCI’s average age of preneed cemetery consumers is the early sixties. The average age of preneed funeral consumers is the early seventies.
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During 2017, our Board had a 97% meeting attendance record. We also had two executive meetings to address specific items related to a litigation settlement and an acquisition. Please see page 20 for more information about our Board meetings and Director attendance.
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Our Directors bring innate personal qualities to the SCI boardroom that enable our Board to function effectively. Personal qualities exhibited in the boardroom include self-awareness, respect, integrity, independence, and the capacity to function effectively in challenging situations.
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Director Nominees
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Independent
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Age
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Director
Since
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Other
Public
Boards*
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Board Committee
Composition
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Name
Occupation
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N&
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Anthony L. Coelho, Lead Independent Director
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Former Majority Whip of the U. S. House of Representatives
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Independent business and political consultant
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YES
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75
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1991
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2
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●
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●
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●
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Jakki L. Haussler **
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Founder and CEO, Opus Capital Management
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YES
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60
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-
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2
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-
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-
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-
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Sara Martinez Tucker **
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Former Chief Executive Officer, National Math + Science
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Initiative, a non-profit organization to improve student
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performance in STEM subjects
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YES
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62
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-
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3
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-
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-
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-
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-
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Marcus A. Watts
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President, The Friedkin Group, an umbrella company
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overseeing various business interests that are principally
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automotive related
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YES
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59
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2012
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1
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●
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●
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C
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Edward E. Williams
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Professor Emeritus of Entrepreneurship, Rice University,
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Doctorate in Finance and Accounting
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YES
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72
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1991
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None
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●
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C
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Continuing Directors
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Independent
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Age
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Director
Since
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Other
Public
Boards*
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Board Committee
Composition
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Name
Occupation
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A
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C
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E
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N&
CG
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I
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Alan R. Buckwalter
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Former Chairman and CEO, Chase Bank of Texas
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YES
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71
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2003
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None
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●
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C
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●
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Victor L. Lund
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President and CEO, Teradata
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YES
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70
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2000
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1
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C
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●
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●
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John W. Mecom, Jr. ***
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Independent businessman who bought, developed, managed,
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and sold a variety of real estate and other business interests
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YES
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78
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1983
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None
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●
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●
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Clifton H. Morris, Jr.
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Chairman and CEO of JBC Funding, a corporate lending
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and investment firm
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YES
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82
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1990
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None
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●
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●
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Ellen Ochoa
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Director, NASA Johnson Space Center
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YES
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59
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2015
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None
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●
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●
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Thomas L. Ryan
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Chairman and CEO, Service Corporation International
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NO
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52
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2004
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2
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C
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W. Blair Waltrip
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Independent consultant, family and trust investments,
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and former senior executive of the Company
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NO
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63
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1986
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None
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●
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A:
Audit Committee
|
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●
:
Member
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C:
Compensation Committee
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C
:
Chair
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E:
Executive Committee
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N&CG:
Nominating & Corporate Governance Committee
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I:
Investment Committee
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Overview of Director Skills and Experience
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CEO Experience/Senior Leadership.
We believe Directors who have held significant leadership positions over an extended period, especially CEO positions, possess extraordinary leadership qualities and demonstrate a practical understanding of organizations, processes, strategy and risk management, and know how to drive change and growth.
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Industry.
The funeral and cemetery industry is unique and Directors with prior experience can help to shape and develop all aspects of the Company’s strategy.
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Financial.
Service Corporation International uses a broad set of financial metrics to measure its performance, and accurate financial reporting and robust auditing are critical to our success. We have added a number of Directors who qualify as Audit Committee financial experts, and we expect all of our Directors to have an understanding of finance, financial reporting processes, and internal controls.
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Marketing/Brand Management.
We employ a multi-brand strategy and also rely heavily on marketing our products and services on a preneed basis. Directors with marketing experience and/or brand management experience can provide expertise and guidance as we seek to expand brand awareness, enhance our reputation, and increase preneed sales.
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Investments/Financial Services.
Knowledge of financial markets, investment activities, and trust and insurance operations assists our Directors in understanding, advising on, and overseeing our investment strategies.
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Real Estate.
We own a significant amount of real estate. Directors with experience in real estate can provide insight into our tiered product/pricing strategy for our cemeteries as well as advice on best uses of our real estate.
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Technology or e-Commerce.
Directors with education or experience in relevant technology are useful for understanding our efforts to enhance the customer experience as well as improve our internal processes and operations.
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Business Development/Mergers and Acquisitions (M&A).
We seek to grow through acquisitions and development of new business operations. Directors with a background in business development and in M&A provide insight into developing and implementing strategies for growing our business.
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Government/Legal.
We operate in a heavily regulated industry. Directors who have a background in law or have served in government positions provide experience and insights that assist us in legal and regulatory compliance and help us work constructively with governmental and regulatory organizations in the areas we operate.
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Buckwalter
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Coelho
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(New) Haussler
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Lund
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Mecom
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Morris
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Ochoa
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Ryan
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(New) Tucker
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W.B. Waltrip
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Watts
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Williams
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CEO Experience/Senior
Leadership
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ü
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ü
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Industry
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Financial
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ü
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ü
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ü
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ü
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Marketing/Brand
Management
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ü
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ü
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Investments/Financial
Services
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ü
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ü
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ü
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Real Estate
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ü
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ü
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Technology or e-Commerce
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ü
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ü
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ü
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Business Development/M&A
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ü
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ü
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ü
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ü
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ü
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ü
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Government/Legal
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ü
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ü
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ü
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ü
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Proposal 1 : Election of Directors
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The Board of Directors will temporarily have 12 members. John W. Mecom, Jr. has communicated to the Company that he will not seek reelection for his seat next year. The Directors will be divided into three classes, each with a staggered term of three years. At this year’s Annual Meeting, shareholders will be asked to elect five Directors to the Board; four with three-year terms expiring in 2021, and a one year
|
term for Ms. Haussler, who is nominated to join the class of Directors whose term expires in 2019. Set forth below are profiles for each of the five candidates nominated by the Nominating and Corporate Governance Committee of the Board of Directors for election by shareholders at this year’s Annual Meeting. Directors are elected by a majority of votes cast.
|
The Board of Directors recommends that Shareholders vote “FOR” the following five nominees.
|
Director nominees
|
|||||||
Anthony L.
Coelho
|
|
Independent
|
Director Since:
1991
|
Age:
75
|
If Elected
Term Expires:
2021
|
Primary Qualifications:
|
|
|
|
Occupation
●
Former Majority Whip of the U.S. House of Representatives
●
Independent business and political consultant
Prior Political Experience
●
Chairman of the President’s Committee on Employment of People with Disabilities (1994-2001)
●
General Chairman of Al Gore’s Presidential campaign (1999-2000)
|
●
Majority Whip (1987-1989)
●
Member of U.S. House of Representatives (1978-1989); original sponsor/author of the Americans With Disabilities Act
Prior Business Experience
●
President/CEO of Wertheim Schroder Financial Services, grew $800 million firm to $4.5 billion over 6 years (1990-1995)
Current Public Board Positions
●
Vice Chairman, Esquire Financial Holdings, Inc.
●
AudioEye, Inc.
|
Select Past Public Board Positions
●
Chairman, Cyberonics
●
Chairman, Circus Circus Enterprises (now MGM Mirage)
●
Chairman, ICF Kaiser International, Inc.
●
Warren Resources, Inc.
Other Positions
●
Former Chairman and current Board member of the Epilepsy Foundation
Education
●
Loyola University Los Angeles
|
|||
Lead Independent
Director
|
|
Jakki L. Haussler
|
|
Independent
|
New Nominee
|
Age:
60
|
If Elected
Term Expires:
2019
|
Primary Qualifications:
|
|
|
|
Occupation
● Founder and CEO, Opus Capital Management (since 1996), an
independent registered investment
advisor, providing investment
solutions to institutions and high-
net worth individuals
Prior Business Experience
● Managing Director, Capvest
Venture Fund, LP (2000 - 2011) a
private equity fund for growth and
expansion stage companies
● Partner, Adena Ventures, LP
(1999 - 2010) a private equity fund targeting underserved markets
|
Current Public Board Positions
● Cincinnati Bell Inc.
● Morgan Stanley Funds
Other Positions
● Member, Board of Directors, The Victory Funds
● Member, Board of Directors, Best Transportation, a transportation management software company
● Member/Founder, Chase College of Law, Transaction Law Practice Center
● Board of Visitors, Chase College of Law
● Member, Northern Kentucky University Foundation Investment Committee
|
Education
● University of Cincinnati
● Salmon P. Chase College of Law, Northern Kentucky University
|
Marcus A.
Watts
|
|
Independent
|
Director Since:
2012
|
Age:
59
|
If Elected
Term Expires:
2021
|
Primary
Qualifications: |
|
|
|
Occupation
●
President, The Friedkin Group (since 2011), an umbrella company overseeing various business interests that are principally automotive related
Prior Business Experience
●
Vice Chairman and Managing Partner-Houston, Locke Lord LLP (1984-2010) with a focus on corporate and securities law, governance, and related matters
|
Current Public Board Positions
●
Cabot Oil & Gas Corporation
Current Other Board Positions
●
Board Chair, Federal Reserve Bank of Dallas (Houston Branch)
●
Board member, Highland Resources, Inc. (private real estate company)
●
Chairman, Greater Houston Partnership
●
Chairman, Board of Trustees, United Way of Greater Houston
|
Past Public Company Boards
●
Complete Production Services, Inc. (2007-2012) acquired by Superior Energy Services
●
Cornell Companies (2001-2005)
Education
●
Texas A&M University
●
Harvard Law School
|
Edward E.
Williams
|
|
Independent
|
Director Since:
1991
|
Age:
72
|
If Elected
Term Expires:
2021
|
Primary
Qualifications: |
|
|
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Occupation
●
Professor Emeritus of Entrepreneurship (since 2014), Rice University, Houston, TX
Prior Academic Experience
●
Henry Gardiner Symonds Professor, Professor of Statistics and Administrative Science (1978-2014)
●
Founded Rice University’s Entrepreneurship program in 1978, now one of the top such programs in the world
●
Associate Professor of Finance, McGill University (1970-1973)
●
Assistant Professor of
Economics, Rutgers University
(1968-1970)
|
Prior Business Experience
●
Founder and CEO, First Texas Venture Capital Corporation (1983-1992)
●
Texas Capital Investment Advisors, Inc. (1980-1995)
●
Trust Corporation International (1979-1986)
Other Academic Experience
●
2016 Entrepreneurship Educator of the Year Award, lifetime award presented by the U.S. Association for Small Business and Entrepreneurship
|
●
Author or co-author of 13 books and over 50 scholarly articles in Entrepreneurship, Finance, Economics, and Accounting including seminal critical analyses of the Efficient Market Hypothesis (initiated 45 years ago)
Education
●
Wharton School, University of Pennsylvania
●
PhD, (Finance and Accounting) University of Texas at Austin
|
Continuing Directors
|
|
|
|
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||
Alan R. Buckwalter
|
|
Independent
|
Director Since:
2003
|
Age:
71
|
Term Expires:
2019
|
Primary Qualifications:
|
|
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Occupation
●
Former Chairman and CEO, Chase Bank of Texas
Prior Business Experience
●
Chairman, J.P. Morgan Chase Bank, South Region (1995-2003)
●
President of Texas Commerce Bank (1990-1995)
●
Held various positions at Chemical Bank in corporate division (1970-1990)
|
Other Positions
●
Board member, Texas Medical Center
●
Chairman Emeritus and Board member, Central Houston, Inc.
Past Public Company Boards
●
Freeport-McMoRan, Inc. (2013-2015)
●
Plains Exploration and Production (2003-2013); subsequently acquired by Freeport-McMoRan, Inc.
|
Other Prior Positions
●
Board of Directors, Federal Reserve Bank of Dallas (Houston Branch)
Education
●
Fairleigh Dickinson University
|
Victor L.
Lund
|
|
Independent
|
Director Since:
2000
|
Age:
70
|
Term Expires:
2019
|
Primary Qualifications:
|
|
|
|
Occupation
●
President and CEO (May 2016), Teradata Corporation
Prior Business Experience
●
Chairman, DemandTec, a software company (2006-2012)
●
Chairman, Mariner Healthcare, Inc. (2002-2004)
●
Vice Chairman, Albertsons, Inc. (1999-2002)
|
●
22-year career with American Stores Company in various positions including Chairman, CEO, CFO and Corporate Controller 1977-1999
●
Audit CPA, Ernst & Ernst 1972-1977
Current Public Board Positions
●
Teradata Corporation, an information technology company
|
Past Public Company Boards
●
DemandTec
●
Delta Airlines
●
Del Monte Foods, Inc.
●
Mariner Healthcare, Inc.
●
Albertsons, Inc.
●
American Stores Company
●
NCR Corporation
Education
●
The University of Utah
●
MBA The University of Utah
|
John W.
Mecom, Jr.
|
|
Independent
|
Director Since:
1983
|
Age:
78
|
Term Expires:
2019*
|
Primary Qualifications:
|
|
|
|
Occupation
●
Independent businessman who bought, developed, managed, and sold a variety of real estate and other business interests
Prior Business Experience
●
Principal owner, John Gardiner’s Tennis Ranch (2000-2011)
●
Owner, Rhino Pak, a contract blender and packer for the petroleum industry (2003-2007)
|
●
Chairman, John W. Mecom Company, primarily an oil and gas company (1976-2003)
●
Owner of New Orleans Saints NFL team (1967-1985)
●
Owner of Mecom Racing Team, which managed several Formula One racing teams - Indianapolis and Cam Am Series (1960-1967)
●
Hotel management, Houston International Hotels and Preferred Hotels Organization (1964-1985)
|
Education
●
University of Oklahoma
|
Clifton H.
Morris, Jr.
|
|
Independent
|
Director Since:
1990
|
Age:
82
|
Term Expires:
2020
|
Primary
Qualifications:
|
|
|
|
Occupation
●
Chairman and CEO of JBC Funding, a corporate lending and investment firm
Prior Business Experience
●
Founder and Chairman, AmeriCredit Corp., financing of automotive vehicles (1988-2010); sold in 2010 and now GM Financial
●
CFO, Cash America International (1984-1988)
|
●
VP of Treasury and other financial positions at SCI (1966-1971)
Other Positions
●
CPA, 56 years
●
Lifetime member of the Texas Society of Certified Public Accountants
●
Honorary member of the American Institute of Certified Public Accountants
|
Past Public Company Boards
●
AmeriCredit Corp.
●
Cash America International
Education
●
University of Texas at Austin
|
Ellen
Ochoa
|
|
Independent
|
Director Since:
2015
|
Age:
59
|
Term Expires:
2019
|
Primary Qualifications:
|
|
|
|
Occupation
●
Director of NASA Johnson Space Center (since 2013)
Prior Business Experience
●
Government Executive, Astronaut at NASA Johnson Space Center (1990-2012); first Hispanic female astronaut with nearly 1,000 hours in space
●
Branch Chief and Research Engineer, NASA Ames Research Center (1988-1990), led a group working primarily on optical systems for automated space exploration
|
●
Researcher, Sandia National Laboratories (1985-1988), investigated optical systems for performing information processing
Other Positions
●
Member, Board of Directors, Federal Reserve Bank of Dallas
●
Member, National Science Board
●
Chair, Nomination Committee, National Medal of Technology & Innovation
●
Fellow, American Institute of Aeronautics and Astronautics
●
Member, Board of Directors, Mutual of America
|
●
Fellow, American Association for the Advancement of Science
●
Director Emerita, former Vice Chair, Manned Space Flight Education Foundation
●
Former Board of Trustees, Stanford University
Education
●
San Diego State University
●
MS, PhD (Electrical Engineering), Stanford University
|
Thomas L.
Ryan
|
|
Non-Independent
|
Director Since:
2004
|
Age:
52
|
Term Expires:
2020
|
Primary Qualifications:
|
|
|
|
Occupation
●
Chairman (since 2016) and CEO (since 2005) of SCI
Prior Business Experience
●
President, SCI (2002-2015)
●
CEO European Operations, SCI (2000-2002)
●
Variety of financial management roles, SCI (1996-2000)
|
Current Public Board Positions
●
Weingarten Realty Investors
●
Chesapeake Energy
Other Positions
●
Board of Trustees, United Way of Greater Houston
●
Board of Directors, Genesys Works
●
Board member, University of Texas McCombs Business School Advisory Council
|
Past Public Company Boards
●
Texas Industries
Education
●
University of Texas at Austin
|
W. Blair
Waltrip
|
|
Non-Independent
|
Director Since:
1986
|
Age:
63
|
Term Expires:
2020
|
Primary
Qualifications:
|
|
|
|
Occupation
●
Independent Consultant, Family and Trust Investments, and Former Senior Executive of SCI
Prior Business Experience
●
Various positions at SCI including VP of Corporate Development, SVP of Funeral Operations, EVP of SCI’s real estate division, Chairman and CEO of SCI Canada, and EVP of SCI (1977-2000)
|
Other Positions
●
Treasurer, National Museum of Funeral History
●
Active real estate broker
Past Public Company Boards
●
Sanders Morris Harris Group, Inc (Edelman Financial)
|
Education
●
Sam Houston State University
|
Director Ownership of SCI Stock
|
Consideration of Director Nominees
|
•
|
Integrity, character, and accountability
|
•
|
Ability to provide wise and thoughtful counsel on a broad range of issues
|
•
|
Financial literacy and ability to read and understand financial statements and other indices of financial performance
|
•
|
Ability to work effectively with mature confidence as part of a team
|
•
|
Ability to provide counsel to management in developing creative solutions and in identifying innovative opportunities
|
•
|
Commitment to prepare for and attend meetings and to be accessible to management and other Directors
|
Director Independence
|
Change in Leadership Structure
|
Risk Oversight
|
No Shareholder Rights Plan
|
Lead Independent Director
|
•
|
Call Meetings of the Board.
The Lead Director will have authority to call meetings of the Board, upon proper notice given to the members in accordance with the Bylaws.
|
•
|
Preside over executive sessions.
The Lead Director will preside at all meetings of the Board at which the Chair is not present, including all meetings and executive sessions of the independent Directors.
|
•
|
Serve as liaison to the Chair.
The Lead Director will serve as the principal liaison between the independent Directors and the Chair. The Lead Director will be available to discuss any concerns the other independent Directors may have and to relay those concerns, where appropriate, to the Chair.
|
•
|
Board information, agendas, and meeting schedules.
The Lead Director will consult with the Chair regarding the information sent to the Board, including the quality, quantity, appropriateness and timeliness of such information and will consult with the Chairman on the scheduling of and agendas for Board meetings.
|
•
|
Engage in performance evaluation of Directors and CEO.
The Lead Director will work with the Nominating and Corporate Governance Committee in the process of evaluating the performance of the CEO and the Directors, including conveying evaluation feedback to those persons.
|
•
|
Interview Director candidates.
The Lead Director will interview Director candidates along with the
|
•
|
Communicate with stockholders.
As requested and deemed appropriate by the Board, the Lead Director will be available for consultation and direct communication with stockholders and other stakeholders.
|
•
|
Serve as the Board Chair on an interim basis.
The Lead Director will serve as the Chair on an interim basis in the event of the death or disability of the Chair or if circumstances arise in which the Chair may have an actual or perceived conflict of interest.
|
•
|
Perform other duties as requested.
The Lead Director will perform such other duties as the Board may from time to time delegate to assist the Board in fulfilling its responsibilities.
|
•
|
Consult with Committee Chairs.
In performing the duties described above, the Lead Director is expected to consult with the Chairs of the appropriate Board committees as needed and solicit their participation to avoid diluting the authority or responsibilities of such Committee Chairs.
|
Special Meeting of Shareholders
|
Board Composition and Meetings
|
Annual Board and Committee Evaluations
|
Board Orientation and Education Program
|
Executive Sessions
|
Board Committees
|
AUDIT COMMITTEE
|
Chair:
Victor L. Lund
Other members:
Alan R. Buckwalter, Clifton H. Morris, Jr., Edward E. Williams
Meetings in 2017:
Seven
|
Each member of the Audit Committee meets the independence requirements of the NYSE guidelines.
|
|
|
|
Key Oversight Responsibilities
|
|
|
|
●
|
Integrity of the financial statements
|
●
|
Engagement, qualifications, independence, and performance of the independent registered public accounting firm
|
●
|
Scope and results of the independent registered public accounting firm's report
|
●
|
Performance and effectiveness of our internal audit function
|
●
|
Policies with respect to risk assessment and risk management
|
●
|
Quality and adequacy of our internal controls, including reviewing our cybersecurity controls
|
●
|
Financial reporting activities and disclosure matters
|
Audit Committee in 2017
|
The Audit Committee met seven times in 2017, and the Committee attendance record was 96%. Four of the meetings were focused primarily on our quarterly financial reports and our related earnings releases. At each of these meetings, the Committee reviewed the documents in depth as well as reviewed the independent registered public accounting firm's report. The Committee regularly meets with the independent registered public accounting firm representatives outside the presence of management. Additionally the Committee meets regularly with individual members of management to discuss relevant matters. The Committee meets with the Company’s internal auditors outside the presence of management. The Committee also performs quarterly reviews of any legal matters that could have a significant impact on our financial statements and plays a vital role in assessing the management of financial risk. The report of the Audit Committee can be found on page 26.
|
COMPENSATION COMMITTEE
|
Chair:
Alan R. Buckwalter
Other members:
Anthony L. Coelho, John W. Mecom, Jr., Ellen Ochoa, Marcus A. Watts
Meetings in 2017:
Five
|
Each member of the Compensation Committee meets the independence requirements of the NYSE guidelines.
|
|
Key Oversight Responsibilities
|
●
|
Oversees our executive compensation and benefits policies and programs
|
●
|
Sets compensation for the Chairman and CEO
|
●
|
Reviews and approves compensation for all other executive officers
|
●
|
Determines appropriate individual and Company performance measures
|
●
|
Approves all executive employment contracts
|
●
|
Determines and ensures compliance with SCI stock ownership guidelines for officers
|
●
|
Assesses the risk of SCI’s compensation programs
|
Compensation Committee in 2017
|
The Compensation Committee met five times in 2017 with a 96% attendance record. The Committee devoted substantial time in its oversight of SCI’s compensation programs and its review of feedback received from shareholders. As a result of input received from shareholders, the Committee added a return on equity modifier to the total shareholder return metric in the performance unit plan. They also changed the denomination of the award to share units rather than cash units. The Committee’s full review of executive compensation matters and its decisions are discussed in the Compensation Discussion and Analysis beginning on page 29.
|
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
|
Chair:
Marcus A. Watts
Other members:
Anthony L. Coelho, Victor L. Lund, Clifton H. Morris, Jr.,
Meetings in 2017:
Four
|
Each member of the Nominating and Corporate Governance Committee meets the independence requirements of the NYSE guidelines.
|
|
Key Oversight Responsibilities
|
●
|
Composition of the Board and Board committees
|
●
|
Identification and recruitment of new candidates for the Board
|
●
|
Review process for renomination of current Board members and nominees recommended by shareholders
|
●
|
Development of corporate governance principles and practices
|
●
|
SCI’s enterprise risk management function, including oversight of cybersecurity risks
|
●
|
Succession planning for CEO and other SCI executives
|
●
|
Performance evaluation of the CEO, Board, and Board committees
|
●
|
Continuing education sessions for SCI Directors
|
Nominating and Corporate Governance Committee in 2017
|
The Nominating and Corporate Governance Committee met four times in 2017, and the Committee attendance record was 94%. The Committee spent a considerable amount of time in reviewing and making recommendations on the Board’s leadership structure, which resulted in the nomination of two new Directors. For more information regarding these two nominees, please see the nominees' profiles starting on page 13.
|
INVESTMENT COMMITTEE
|
Chair:
Edward E. Williams
Other members:
John W. Mecom, Jr., Ellen Ochoa, W. Blair Waltrip
Meetings in 2017:
Four
|
Key Oversight Responsibilities
|
●
|
Coordinates management of SCI’s preneed trust funds and perpetual care trust funds with independent trustees; SCI’s employee Investment Operating Committee, headed by SCI executives; as well as its wholly-owned registered investment advisor and a third party consultant
|
●
|
Reviews the management of the trust funds, performance of the trustees, and investment manager changes made by the trustees
|
●
|
Recommends investment policies and guidelines in conjunction with the Investment Operating Committee and wholly-owned registered investment advisor and third party consultant
|
●
|
Reviews SCI’s primary funeral preneed insurance provider
|
●
|
Monitors short-term cash investments of SCI and funds associated with SCI’s retirement plans
|
Investment Committee in 2017
|
The Investment Committee met four times in 2017, and the Committee attendance record was 100%. The Committee spent time providing guidance to monitor and improve the structure of SCI's preneed and perpetual care trust portfolio. Additionally, the Committee provided oversight of the financial condition of the Company’s primary prearranged funeral insurance provider.
|
EXECUTIVE COMMITTEE
|
Chair:
Thomas L. Ryan
Other members:
Alan R. Buckwalter, Anthony L. Coelho, Victor L. Lund, Robert L.
Waltrip, Marcus A. Watts
Meetings in 2017:
Two
|
Key Oversight Responsibilities
|
●
|
Has authority to exercise many of the powers of the full Board between Board meetings
|
●
|
Is available to meet in circumstances when it is impractical to call a meeting of the full Board and there is urgency for Board discussion and decision making on a specific issue
|
Executive Committee in 2017
|
The Investment Committee met two times in 2017, and the Committee attendance record was 92%. The Committee spent time reviewing certain acquisitions and legal settlements.
|
Director Compensation
|
•
|
The annual Board retainer was increased from $75,000 to $90,000
|
•
|
Meeting attendance fees were eliminated.
|
•
|
Retainers for leadership positions on the Board were increased, as follows:
|
◦
|
Lead Director increased from $20,000 to $30,000
|
◦
|
Audit Committee Chair increased from $15,000 to $25,000
|
◦
|
Compensation Committee Chair increased from $10,000 to $20,000
|
◦
|
Investment Committee Chair increased from $10,000 to $15,000
|
◦
|
Nominating and Corporate Governance Committee Chair increased from $10,000 to $15,000
|
•
|
Annual stock grants will be based on a target value of $180,000 per Director, rather than the fixed 10,000 shares per Director. (Note that changes in the stock awards, which are granted at the annual shareholder meeting, will be effective May 2018.)
|
Name
|
|
Fees Earned
or Paid
in Cash
|
|
|
Stock
Awards(1)
|
|
|
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(2)
|
|
|
Total
|
|
||||
Alan R. Buckwalter
|
|
$
|
111,500
|
|
|
$
|
321,200
|
|
|
$
|
—
|
|
|
$
|
432,700
|
|
Anthony L. Coelho
|
|
120,000
|
|
|
321,200
|
|
|
1,655
|
|
|
442,855
|
|
||||
Victor L. Lund
|
|
116,000
|
|
|
321,200
|
|
|
—
|
|
|
437,200
|
|
||||
John W. Mecom, Jr.
|
|
95,000
|
|
|
321,200
|
|
|
3,311
|
|
|
419,511
|
|
||||
Clifton H. Morris, Jr.
|
|
95,500
|
|
|
321,200
|
|
|
1,655
|
|
|
418,355
|
|
||||
Ellen Ochoa
|
|
95,000
|
|
|
321,200
|
|
|
—
|
|
|
416,200
|
|
||||
W. Blair Waltrip
|
|
90,500
|
|
|
321,200
|
|
|
—
|
|
|
411,700
|
|
||||
Marcus A. Watts
|
|
108,000
|
|
|
321,200
|
|
|
—
|
|
|
429,200
|
|
||||
Edward E. Williams
|
|
108,000
|
|
|
321,200
|
|
|
7,788
|
|
|
436,988
|
|
Proposal 2: Proposal to Approve the Selection of the Independent Registered Public Accounting Firm
|
The Audit Committee of the Board of Directors of the Company has recommended PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) to serve as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2018. PricewaterhouseCoopers and its predecessors have audited the Company’s accounts since 1993. A representative of PricewaterhouseCoopers is expected to be present at the Annual Meeting, and such representative will have the opportunity to make a statement if he or she desires to do so and be available to respond to appropriate questions at such meeting. The Audit Committee wishes to submit the selection of PricewaterhouseCoopers for
|
|
shareholders’ approval at the Annual Meeting. If the shareholders do not give approval, the Audit Committee will reconsider its selection. The affirmative vote of the holders of a majority of shares represented at the Annual Meeting will be required for approval of this proposal.
|
|
The Board of Directors recommends that Shareholders vote “FOR” approval of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company.
|
Report of the Audit Committee
|
•
|
ensuring the integrity of the Company’s accounting functions and proper internal control over financial reporting,
|
•
|
ensuring the Company’s compliance with legal and regulatory risk and other compliance matters;
|
•
|
reviewing the independent registered public accounting firm’s qualifications, and
|
•
|
overseeing the performance of the Company’s internal audit function.
|
•
|
quarterly financial statements and the annual audited financial statements of the Company, including the Company's specific disclosures
|
•
|
earnings releases and guidance provided to analysts and rating agencies;
|
•
|
any major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles, and
|
•
|
issues as to the adequacy of the Company's internal controls, including those related to cybersecurity, and any special steps adopted in light of material control deficiencies.
|
|
Victor L. Lund, Chair
|
|
Alan R. Buckwalter
|
|
Clifton H. Morris, Jr.
|
|
Edward E. Williams
|
Audit Fees and All Other Fees
|
|
|
Audit fees
1
|
|
|
Audit-related fees
2
|
|
|
Tax
3
|
|
|
All other fees
4
|
|
|
Total
|
|
|||||
2017
|
|
$
|
5,720,298
|
|
|
$
|
332,000
|
|
|
$
|
63,000
|
|
|
$
|
4,000
|
|
|
$
|
6,119,298
|
|
2016
|
|
$
|
6,156,398
|
|
|
$
|
775,000
|
|
|
$
|
23,250
|
|
|
$
|
3,838
|
|
|
$
|
6,958,486
|
|
1
|
Fees associated with the annual audit of the Company’s consolidated financial statements in Form 10-K and the effectiveness of the Company’s internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, the reviews of the Company’s quarterly reports on Form 10-Q, and fees related to statutory audits.
|
2
|
Audit-related fees in 2017 were primarily related to the review of the new revenue recognition accounting standard adopted by the Company on January 1, 2018 and the 2017 issuance of $550.0 million 4.625% Senior Notes due December 2027. The 2016 fees were related to the Oracle implementation.
|
3
|
Fees for tax services for 2017 and 2016 were related to LLC tax preparation.
|
4
|
All other fees in both years were for research database licensing.
|
Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation
|
The Board of Directors recommends a vote “FOR” advisory approval of the resolution set forth above.
|
Introduction
|
Thomas L. Ryan
|
|
Chairman of the Board and Chief Executive Officer
|
Michael R. Webb
|
|
President and Chief Operating Officer
|
Eric D. Tanzberger
|
|
Senior Vice President, Chief Financial Officer
|
Sumner J. Waring, III
|
|
Senior Vice President, Operations
|
Gregory T. Sangalis
|
|
Senior Vice President, General Counsel and Secretary
|
•
|
align executive pay and benefits with the performance of the Company and shareholder returns while fostering a culture of highly ethical standards and integrity; and
|
•
|
attract, motivate, reward, and retain the broad-based management talent required to achieve our corporate objectives.
|
Executive Summary
|
•
|
Maintained our position as the largest provider in the Company’s industry, with 15%-16% market share and $3.1 billion in revenue.
|
•
|
Increased adjusted earnings per share by approximately 20% compared to 2016.
|
•
|
Adjusted operating cash flow excluding recurring cash taxes was approximately $687 million, which is an 11% increase over the prior year.
|
•
|
We deployed capital of $402 million to acquisitions, dividends, and share repurchases.
|
•
|
Achieved a total shareholder return (TSR) of 194% over the last five fiscal years, outpacing the return of the S&P 500 of 108%.
|
Over the course of the past several years, acting in the interests of the stockholders, the Compensation Committee in conjunction with management has adjusted compensation programs toward greater performance-based compensation. In addition, we have collectively modified or eliminated certain components of our programs to better align
|
|
with prevailing standards. The following are highlights of our compensation programs, including our emphasis on pay commensurate with performance and actions taken to align aspects of our programs with evolving standards.
|
WHAT WE DO:
|
|
|
ü
|
We pay for performance.
A significant portion of the compensation of our Named Executive Officers is directly linked to the Company’s performance, as demonstrated in the historical payouts related to our annual and long-term incentive plans.
|
|
ü
|
We require stock ownership.
We maintain stock ownership guidelines for officers and Directors. Under the guidelines, an officer should retain all SCI stock acquired from grants of restricted stock and stock options (net of acquisition and tax costs and expenses) until that officer has met the stock ownership guidelines.
|
|
ü
|
We have claw-backs.
The Company maintains claw-back provisions that are triggered in certain circumstances. If triggered, the provisions provide for a claw-back of annual performance-based incentives paid in cash, stock options, restricted stock, and performance units.
|
|
ü
|
We seek independent advice.
We engage independent consultants to review executive compensation and provide advice to the Compensation Committee.
|
|
ü
|
We have an ongoing shareholder outreach program.
As part of our commitment to effective corporate governance practices, we regularly engage with shareholders. We specifically discussed executive compensation along with other important topics (see page
9
).
|
|
WHAT WE DON’T DO:
|
|
X
|
We do not allow tax gross-ups.
We do not provide tax gross-ups in our compensation programs, and we do not have provisions in our executive employment agreements that provide for tax gross-ups in the event of a change of control of the Company.
|
X
|
We do not allow hedging or pledging.
We have policies that prohibit officers and Directors from hedging or pledging their SCI stock ownership.
|
X
|
We do not allow the repricing of stock options.
We have policies that prohibit subsequent alterations of stock option pricing.
|
|
|
|
|
|
|
Compensation Philosophy and Process
|
Approximately 3/4ths of our NEOs' compensation is performance-based.
|
Element
|
|
Description
|
|
Objective
|
|
Recent Changes
|
Annual Base Salary
page
34
|
|
Fixed cash element of compensation established within a competitive range of benchmark pay levels.
|
|
Serves to attract and retain executive talent and may vary with individual or due to marketplace competition or economic conditions.
|
|
Reduced peer group for 2016 benchmark studies.
|
Annual Performance-Based Incentive Compensation
page
34
|
|
Performance–based element of compensation tied to the attainment of performance measures. Paid in cash.
|
|
Rewards achievement of shorter term financial and operational objectives that we believe are primary drivers of our common stock price over time.
|
|
For 2018, we have transitioned return on equity to a modifier for the performance unit plan under Long-Term Incentive Compensation.
|
Long-Term Incentive Compensation
page
36
|
|
Stock Options
– granted at an exercise price equal to 100% of the fair market value of SCI common stock on the grant date and vest at a rate of 1/3rd per year.
|
|
Rewards for the Company’s stock price appreciation.
|
|
|
|
|
Restricted Stock
– awards are made in February each year at the same time as the stock option grants and vest at a rate of 1/3rd per year.
|
|
Supports retention and furthers stock ownership.
|
|
|
|
|
Performance Units
– The performance unit plan measures the three-year total shareholder return (“TSR”) relative to a comparator group of public companies (see Annex B).
|
|
Rewards for effective management of Company business over a multi-year period and delivering superior TSR.
|
|
>Reduced peer group for 2016 comparator group.
>Added a return on equity modifier for 2018 awards.
>Changed denomination to award in share units for 2018 awards.
|
Other Compensation
page
37
|
|
Retirement Plans
– Executive Deferred Compensation Plan and 401(k) Plan.
|
|
Provide financial security for retirement.
|
|
|
|
|
Perquisites and Personal Benefits
– reasonable benefits as described on page 38.
|
|
To enhance executive performance by facilitating effective management of personal matters.
|
|
|
Annual Base Salaries
|
|
|
2017 Salary
|
|
2016 Salary
|
|
Change
|
|
% Change
|
|||||||
Thomas L. Ryan
|
|
$
|
1,200,000
|
|
|
$
|
1,200,000
|
|
|
$
|
—
|
|
|
—
|
%
|
Michael R. Webb
|
|
750,000
|
|
|
750,000
|
|
|
—
|
|
|
—
|
%
|
|||
Eric D. Tanzberger
|
|
600,000
|
|
|
550,000
|
|
|
50,000
|
|
|
9.1
|
%
|
|||
Sumner J. Waring, III
|
|
570,000
|
|
|
550,000
|
|
|
20,000
|
|
|
3.6
|
%
|
|||
Gregory T. Sangalis
|
|
480,000
|
|
|
480,000
|
|
|
—
|
|
|
—
|
%
|
Annual Performance-Based Incentives Paid in Cash
|
Long-Term Incentive Compensation
|
*
|
Calculation of awards for performance levels between threshold and target or target and maximum are calculated using straight-line interpolation.
|
Other Compensation
|
Name
|
|
7.5%
Retirement
Contribution
|
|
|
Performance
Contribution
|
|
|
Total
|
|
|||
Thomas L. Ryan
|
|
$
|
226,904
|
|
|
$
|
287,714
|
|
|
$
|
514,618
|
|
Michael R. Webb
|
|
127,554
|
|
|
161,738
|
|
|
289,292
|
|
|||
Eric D. Tanzberger
|
|
90,635
|
|
|
114,925
|
|
|
205,560
|
|
|||
Sumner J. Waring, III
|
|
86,103
|
|
|
109,178
|
|
|
195,281
|
|
|||
Gregory T. Sangalis
|
|
67,944
|
|
|
86,153
|
|
|
154,097
|
|
Further Executive Compensation Practices and Policies
|
Title
|
|
Required Salary Multiple
|
Minimum Shares Required
|
Actual Salary Multiple
|
Actual Shares Owned
|
Thomas L. Ryan, Chairman of the Board and Chief Executive Officer
|
|
6
|
192,926
|
51
|
1,647,209
|
Michael R. Webb, President and Chief Operating Officer
|
|
4
|
80,386
|
28
|
572,266
|
Eric D. Tanzberger, Senior Vice President and Chief Financial Officer
|
|
3
|
48,232
|
13
|
214,194
|
Sumner J. Waring, III, Senior Vice President, Operations
|
|
3
|
45,820
|
22
|
335,457
|
Gregory T. Sangalis, Senior Vice President, General Counsel and Secretary
|
|
3
|
38,585
|
19
|
240,233
|
At March 26, 2018, the Named Executive Officers have exceeded their ownership guideline levels for 2018.
|
How We Make Compensation Decisions
|
Compensation Committee Report
|
|
|
|
|
|
Alan R. Buckwalter (Chairman)
|
|
Anthony L. Coelho
|
|
John W. Mecom, Jr.
|
|
|
|
|
|
|
|
|
|
|
Ellen Ochoa
|
|
Marcus A. Watts
|
|
|
|
|
|
|
|
Summary Compensation Table
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
|
Restricted
Stock
Awards
(1)
|
|
|
Option
Awards
(1)
|
|
|
Non-Equity
Incentive Plan
Compensation
(2)
|
|
|
Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(3)
|
|
|
All Other
Compensation
(4)
|
|
|
Total
|
|
Thomas L. Ryan
|
|
2017
|
|
1,200,000
|
|
|
1,851,525
|
|
|
1,841,178
|
|
|
5,525,380
|
|
|
10,642
|
|
|
687,969
|
|
|
11,116,694
|
|
Chairman of the Board
|
|
2016
|
|
1,200,000
|
|
|
1,688,824
|
|
|
1,629,693
|
|
|
5,012,396
|
|
|
6,728
|
|
|
866,121
|
|
|
10,403,762
|
|
Chief Executive Officer
|
|
2015
|
|
1,241,154
|
|
|
1,674,400
|
|
|
1,600,055
|
|
|
4,784,755
|
|
|
—
|
|
|
980,638
|
|
|
10,281,002
|
|
Michael R. Webb
|
|
2017
|
|
750,000
|
|
|
731,250
|
|
|
725,549
|
|
|
2,462,719
|
|
|
23,187
|
|
|
388,687
|
|
|
5,081,392
|
|
President
|
|
2016
|
|
749,539
|
|
|
666,172
|
|
|
643,520
|
|
|
2,369,456
|
|
|
17,903
|
|
|
491,558
|
|
|
4,938,148
|
|
Chief Operating Officer
|
|
2015
|
|
746,192
|
|
|
683,100
|
|
|
652,155
|
|
|
2,352,230
|
|
|
4,498
|
|
|
571,859
|
|
|
5,010,034
|
|
Eric D. Tanzberger
|
|
2017
|
|
599,039
|
|
|
429,975
|
|
|
429,088
|
|
|
1,452,460
|
|
|
6,055
|
|
|
265,156
|
|
|
3,181,773
|
|
Senior Vice President
|
|
2016
|
|
549,846
|
|
|
385,444
|
|
|
373,297
|
|
|
1,317,121
|
|
|
3,609
|
|
|
356,057
|
|
|
2,985,374
|
|
Chief Financial Officer
|
|
2015
|
|
559,769
|
|
|
381,800
|
|
|
365,131
|
|
|
1,254,504
|
|
|
—
|
|
|
380,559
|
|
|
2,941,763
|
|
Sumner J. Waring, III
|
|
2017
|
|
569,615
|
|
|
380,250
|
|
|
377,988
|
|
|
1,334,037
|
|
|
—
|
|
|
255,820
|
|
|
2,917,710
|
|
Senior Vice President
|
|
2016
|
|
549,539
|
|
|
338,656
|
|
|
409,997
|
|
|
1,205,121
|
|
|
—
|
|
|
305,431
|
|
|
2,808,744
|
|
Operations
|
|
2015
|
|
538,500
|
|
|
340,400
|
|
|
326,836
|
|
|
1,146,041
|
|
|
—
|
|
|
370,483
|
|
|
2,722,260
|
|
Gregory T. Sangalis
|
|
2017
|
|
480,000
|
|
|
310,050
|
|
|
308,163
|
|
|
1,025,922
|
|
|
—
|
|
|
277,986
|
|
|
2,402,121
|
|
Senior Vice President
|
|
2016
|
|
479,692
|
|
|
280,728
|
|
|
537,749
|
|
|
950,892
|
|
|
—
|
|
|
269,364
|
|
|
2,518,425
|
|
General Counsel and Secretary
|
|
2015
|
|
477,692
|
|
|
271,400
|
|
|
259,345
|
|
|
924,032
|
|
|
—
|
|
|
348,125
|
|
|
2,280,594
|
|
Name and Principal Position
|
|
Year
|
|
Annual Performance Based
Incentive Paid in Cash
|
|
|
Performance Units
(a)
|
|
|
Total Non-Equity Incentive
Plan Compensation
|
|
|||
Thomas L. Ryan
|
|
2017
|
|
$
|
1,825,380
|
|
|
$
|
3,700,000
|
|
|
$
|
5,525,380
|
|
Chairman of the Board
|
|
2016
|
|
1,692,396
|
|
|
3,320,000
|
|
|
5,012,396
|
|
|||
Chief Executive Officer
|
|
2015
|
|
1,624,755
|
|
|
3,160,000
|
|
|
4,784,755
|
|
|||
Michael R. Webb
|
|
2017
|
|
950,719
|
|
|
1,512,000
|
|
|
2,462,719
|
|
|||
President
|
|
2016
|
|
881,456
|
|
|
1,488,000
|
|
|
2,369,456
|
|
|||
Chief Operating Officer
|
|
2015
|
|
886,230
|
|
|
1,466,000
|
|
|
2,352,230
|
|
|||
Eric D. Tanzberger
|
|
2017
|
|
608,460
|
|
|
844,000
|
|
|
1,452,460
|
|
|||
Senior Vice President
|
|
2016
|
|
517,121
|
|
|
800,000
|
|
|
1,317,121
|
|
|||
Chief Financial Officer
|
|
2015
|
|
498,504
|
|
|
756,000
|
|
|
1,254,504
|
|
|||
Sumner J. Waring, III
|
|
2017
|
|
578,037
|
|
|
756,000
|
|
|
1,334,037
|
|
|||
Senior Vice President
|
|
2016
|
|
517,121
|
|
|
688,000
|
|
|
1,205,121
|
|
|||
Operations
|
|
2015
|
|
480,041
|
|
|
666,000
|
|
|
1,146,041
|
|
|||
Gregory T. Sangalis
|
|
2017
|
|
425,922
|
|
|
600,000
|
|
|
1,025,922
|
|
|||
Senior Vice President
|
|
2016
|
|
394,892
|
|
|
556,000
|
|
|
950,892
|
|
|||
General Counsel and Secretary
|
|
2015
|
|
368,032
|
|
|
556,000
|
|
|
924,032
|
|
Name
|
|
Contributions
To Deferred
Compensation Plan
(a)
|
|
|
Contributions to
401(k) Plan
(a)
|
|
|
Life Insurance
Related
(b)
|
|
|
Perquisites and
Other Personal
Benefits
(c)
|
|
Total All Other
Compensation
|
|
|||||||
Thomas L. Ryan
|
|
$
|
471,750
|
|
|
$
|
20,250
|
|
|
$
|
19,287
|
|
|
$
|
176,683
|
|
(d)
|
|
$
|
687,970
|
|
Michael R. Webb
|
|
266,091
|
|
|
20,250
|
|
|
24,672
|
|
|
77,674
|
|
(e)
|
|
388,687
|
|
|||||
Eric D. Tanzberger
|
|
174,047
|
|
|
20,250
|
|
|
5,440
|
|
|
65,418
|
|
(f)
|
|
265,155
|
|
|||||
Sumner J. Waring, III
|
|
174,047
|
|
|
20,250
|
|
|
5,044
|
|
|
56,479
|
|
(g)
|
|
255,820
|
|
|||||
Gregory T. Sangalis
|
|
142,695
|
|
|
16,200
|
|
|
14,393
|
|
|
104,698
|
|
(h)
|
|
277,986
|
|
Grants of Plan-Based Awards
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards
|
|
All Other
Restricted
Stock
Awards:
Number of
Shares of
Stock
|
|
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
|
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
|
|
Closing
Market
Price on
Date of
Grant
($/Sh)
|
|
|
Grant Date
Fair Value
of Stock
and Option
Awards
($)
|
|
||||||||||||||||
Name
|
|
Grant Date
|
|
Performance
Units(#)
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
||||||||||||||||||||
Thomas L.
Ryan
|
|
2/7/2017
|
|
|
|
$
|
1
|
|
|
$
|
1,500,000
|
|
|
$
|
3,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2/7/2017
|
|
1,990,000
|
|
|
497,500
|
|
|
1,990,000
|
|
|
3,980,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/7/2017
|
|
|
|
|
|
|
|
|
|
63,300
|
|
|
|
|
|
|
|
|
$
|
1,851,525
|
|
||||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
472,000
|
|
|
$
|
29.25
|
|
|
$
|
29.22
|
|
|
1,841,178
|
|
||||||||||
Michael R.
Webb
|
|
2/7/2017
|
|
|
|
1
|
|
|
750,000
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2/7/2017
|
|
785,000
|
|
|
196,250
|
|
|
785,000
|
|
|
1,570,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/7/2017
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
731,250
|
|
|||||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
186,000
|
|
|
29.25
|
|
|
29.22
|
|
|
725,549
|
|
||||||||||||
Eric D.
Tanzberger
|
|
2/7/2017
|
|
|
|
1
|
|
|
540,000
|
|
|
1,080,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2/7/2017
|
|
462,000
|
|
|
115,500
|
|
|
462,000
|
|
|
924,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/7/2017
|
|
|
|
|
|
|
|
|
|
14,700
|
|
|
|
|
|
|
|
|
$
|
429,975
|
|
||||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
110,000
|
|
|
29.25
|
|
|
29.22
|
|
|
429,088
|
|
||||||||||||
Sumner J.
Waring, III
|
|
2/7/2017
|
|
|
|
1
|
|
|
513,000
|
|
|
1,026,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2/7/2017
|
|
409,000
|
|
|
102,250
|
|
|
409,000
|
|
|
818,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
380,250
|
|
||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
96,900
|
|
|
29.25
|
|
|
29.22
|
|
|
377,988
|
|
||||||||||||
Gregory T. Sangalis
|
|
2/7/2017
|
|
|
|
1
|
|
|
384,000
|
|
|
768,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2/7/2017
|
|
333,000
|
|
|
83,250
|
|
|
333,000
|
|
|
666,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
10,600
|
|
|
|
|
|
|
|
|
310,050
|
|
||||||||||||||
|
2/7/2017
|
|
|
|
|
|
|
|
|
|
|
|
79,000
|
|
|
29.25
|
|
|
29.22
|
|
|
308,163
|
|
Outstanding Equity Awards at Fiscal Year End
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||||||
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
|
|
Option
Exercise Price
($)
|
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(4)
(#)
|
|
|
Market Value of
Shares or Units
of Stock That
Have Not Vested
($)
|
|
||
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
||||||||||||
Thomas L. Ryan
|
|
342,000
|
|
|
|
|
|
9.0850
|
|
|
2/8/2019
|
|
138,101
|
|
|
5,153,929
|
|
|
|
|
387,000
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
|
|
|
|||
|
|
390,000
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
457,000
|
|
|
|
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
|||
|
|
281,333
|
|
|
140,667
|
|
(1)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
195,000
|
|
|
390,000
|
|
(2)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
—
|
|
|
472,000
|
|
(3)
|
|
29.2500
|
|
|
2/7/2025
|
|
|
|
|
||
Michael R. Webb
|
|
214,000
|
|
|
|
|
|
9.0850
|
|
|
2/8/2019
|
|
54,834
|
|
|
2,046,405
|
|
|
|
|
189,000
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
|
|
|
|||
|
|
181,000
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
205,000
|
|
|
|
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
|||
|
|
114,666
|
|
|
57,334
|
|
(1)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
77,000
|
|
|
154,000
|
|
(2)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
—
|
|
|
186,000
|
|
(3)
|
|
29.2500
|
|
|
2/7/2025
|
|
|
|
|
||
Eric D. Tanzberger
|
|
110,000
|
|
|
|
|
|
17.4050
|
|
|
2/11/2022
|
|
31,768
|
|
|
1,185,582
|
|
|
|
|
64,200
|
|
|
32,100
|
|
(1)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
44,666
|
|
|
89,334
|
|
(2)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
—
|
|
|
110,000
|
|
|
|
29.2500
|
|
|
2/7/2025
|
|
|
|
|
||
Sumner J. Waring, III
|
|
95,100
|
|
|
|
|
|
17.4050
|
|
|
2/11/2022
|
|
28,068
|
|
|
1,047,498
|
|
|
|
|
57,466
|
|
|
28,734
|
|
(1)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
28,840
|
|
|
57,682
|
|
(2)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
10,159
|
|
|
20,319
|
|
(2)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
—
|
|
|
96,900
|
|
(3)
|
|
29.2500
|
|
|
2/7/2025
|
|
|
|
|
||
Gregory T. Sangalis
|
|
71,400
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
22,934
|
|
|
855,897
|
|
|
|
|
68,700
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
76,700
|
|
|
|
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
|||
|
|
45,600
|
|
|
22,800
|
|
(1)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
32,333
|
|
|
64,667
|
|
(2)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
—
|
|
|
79,000
|
|
(3)
|
|
29.2500
|
|
|
2/7/2025
|
|
|
|
|
|
|
Shares
Vesting
03/05/2018
|
|
|
Shares
Vesting
03/05/2019
|
|
|
Shares
Vesting
03/05/2020
|
|
|
Total Shares Vesting
|
|
Thomas L. Ryan
|
|
70,634
|
|
|
46,367
|
|
|
21,100
|
|
|
138,101
|
|
Michael R. Webb
|
|
28,200
|
|
|
18,300
|
|
|
8,334
|
|
|
54,834
|
|
Eric D. Tanzberger
|
|
16,201
|
|
|
10,667
|
|
|
4,900
|
|
|
31,768
|
|
Sumner J. Waring, III
|
|
14,334
|
|
|
9,400
|
|
|
4,334
|
|
|
28,068
|
|
Gregory T. Sangalis
|
|
11,667
|
|
|
7,733
|
|
|
3,534
|
|
|
22,934
|
|
Option Exercises and Stock Vested
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||
Name
|
|
Number of Shares
Acquired on
Exercise
(#)
|
|
|
Value Realized
on Exercise
($)
|
|
|
Number of Shares
Acquired on Vesting
(#)
(1)
|
|
|
Value Realized
on Vesting
($)
(1)
|
|
||
Thomas L. Ryan
|
|
534,000
|
|
|
$
|
13,013,867
|
|
|
78,367
|
|
|
$
|
2,438,585
|
|
Michael R. Webb
|
|
202,000
|
|
|
5,468,342
|
|
|
32,833
|
|
|
1,021,681
|
|
||
Eric D. Tanzberger
|
|
187,100
|
|
|
4,062,553
|
|
|
18,266
|
|
|
568,392
|
|
||
Sumner J. Waring, III
|
|
165,700
|
|
|
3,067,331
|
|
|
15,999
|
|
|
497,849
|
|
||
Gregory T. Sangalis
|
|
152,700
|
|
|
4,076,108
|
|
|
12,967
|
|
|
403,501
|
|
Executive Deferred Compensation Plan
|
Name
|
|
Executive
Contributions
in Last FY
(1)
($)
|
|
|
Registrant
Contributions
in Last FY
(2)
($)
|
|
|
Aggregate
Earnings in
Last FY
(3)
($)
|
|
|
Aggregate
Distributions/ Withdrawals
($)
|
|
|
Aggregate
Balance at
Last FYE
(4)
($)
|
|
|||||
Thomas L. Ryan
|
|
$
|
2,972,105
|
|
|
$
|
471,750
|
|
|
$
|
8,325,027
|
|
|
$
|
—
|
|
|
$
|
40,451,464
|
|
Michael R. Webb
|
|
1,249,391
|
|
|
266,091
|
|
|
4,514,800
|
|
|
—
|
|
|
23,501,486
|
|
|||||
Eric D. Tanzberger
|
|
597,188
|
|
|
174,047
|
|
|
1,301,837
|
|
|
(191,522
|
)
|
|
8,039,116
|
|
|||||
Sumner J. Waring, III
|
|
177,474
|
|
|
174,047
|
|
|
648,278
|
|
|
(77,632
|
)
|
|
4,215,833
|
|
|||||
Gregory T. Sangalis
|
|
528,553
|
|
|
142,695
|
|
|
1,587,574
|
|
|
(494,230
|
)
|
|
7,822,080
|
|
|
|
|
|
Non-Equity Incentive Plan
Compensation
|
|
|
||||||||||
|
|
Salary
|
|
Annual Performance-
Based Incentive
Paid In Cash
|
|
TSR
Performance
Units
|
|
Restricted Stock
Awards
|
||||||||
Thomas L. Ryan
|
|
$
|
120,000
|
|
|
$
|
338,479
|
|
|
$
|
664,000
|
|
|
$
|
1,849,626
|
|
Michael R. Webb
|
|
45,000
|
|
|
176,291
|
|
|
297,600
|
|
|
730,500
|
|
||||
Eric D. Tanzberger
|
|
35,942
|
|
|
51,712
|
|
|
80,000
|
|
|
429,534
|
|
||||
Sumner J. Waring, III
|
|
56,962
|
|
|
51,712
|
|
|
68,800
|
|
|
—
|
|
||||
Gregory T. Sangalis
|
|
28,800
|
|
|
106,621
|
|
|
83,400
|
|
|
309,732
|
|
Thomas L. Ryan
|
$
|
22,674,074
|
|
Michael R. Webb
|
11,881,010
|
|
|
Eric D. Tanzberger
|
5,027,419
|
|
|
Sumner J. Waring, III
|
2,551,939
|
|
|
Gregory T. Sangalis
|
1,199,406
|
|
Fund Name
|
2017 Calendar Year Return
|
|
Advisor Managed Portfolio - Aggressive Allocation
|
19.12
|
%
|
Advisor Managed Portfolio - Conservative Allocation
|
6.50
|
%
|
Advisor Managed Portfolio - Growth Allocation
|
16.62
|
%
|
Advisor Managed Portfolio - Moderate Allocation
|
10.08
|
%
|
Advisor Managed Portfolio - Moderate Growth Allocation
|
14.07
|
%
|
American Funds IS International - Class 1
|
32.46
|
%
|
Deutsche Small Cap Index VIP - Class A Shares
|
14.33
|
%
|
DFA VA US Targeted Value
|
9.77
|
%
|
Fidelity VIP Gov't Money Market - Initial Class
|
0.67
|
%
|
Fidelity VIP Index 500 - Initial Class
|
21.71
|
%
|
Invesco V.I. International Growth - Series I Shares
|
23.00
|
%
|
Janus Henderson VIT Enterprise - Instl Shares
|
27.42
|
%
|
LVIP Baron Growth Opportunities - Service Class
|
27.24
|
%
|
MainStay VP High Yield Corporate Bond - Initial Class
|
6.86
|
%
|
MFS VIT International Value - Initial Class
|
27.14
|
%
|
MFS VIT Mid Cap Value - Initial Class
|
13.67
|
%
|
MFS VIT Value Series - Initial Class
|
17.65
|
%
|
Morgan Stanley UIF Emerging Markets Debt - Class I
|
9.71
|
%
|
PIMCO VIT Real Return - Admin Shares
|
3.66
|
%
|
PIMCO VIT Total Return - Admin Shares
|
4.91
|
%
|
SCI General Account Fund
|
3.00
|
%
|
SCI Stock Fund
|
31.41
|
%
|
T. Rowe Price Blue Chip Growth
|
36.17
|
%
|
T. Rowe Price Limited-Term Bond
|
1.05
|
%
|
Voya Russell Mid Cap Index - Class I
|
17.97
|
%
|
Pension Plans
|
Name
|
|
Number of Years
Credited Service
(#)
|
|
|
Present Value of
Accumulated
Benefit
($)
(1)
|
|
|
Thomas L. Ryan
|
|
22
|
|
|
$
|
177,750
|
|
Michael R. Webb
|
|
28
|
|
|
513,126
|
|
|
Eric D. Tanzberger
|
|
21
|
|
|
92,702
|
|
|
Sumner J. Waring, III
|
|
—
|
|
|
—
|
|
|
Gregory T. Sangalis
|
|
—
|
|
|
—
|
|
Executive Employment Agreements
|
Potential Payments Upon Termination
|
|
|
|
|
Voluntary
Termination
|
|
|
Involuntary
Not for Cause
Termination
|
|
|
Disability
|
|
|
Death
|
|
|
Change
of Control
Involuntary or
Good Reason
Termination
|
|
|||||
Thomas L. Ryan
|
|
Salary and Bonus
|
|
$
|
—
|
|
|
$
|
4,225,380
|
|
|
$
|
3,025,380
|
|
|
$
|
3,025,380
|
|
|
$
|
9,360,000
|
|
|
|
Long-Term Incentives
|
|
3,700,000
|
|
|
3,700,000
|
|
|
3,700,000
|
|
|
3,700,000
|
|
|
7,530,000
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
5,808,320
|
|
|
5,781,615
|
|
|
12,781,615
|
|
|
5,808,320
|
|
|||||
|
|
Total
|
|
3,700,000
|
|
|
13,733,700
|
|
|
12,506,995
|
|
|
19,506,995
|
|
|
22,698,320
|
|
|||||
Michael R. Webb
|
|
Salary and Bonus
|
|
—
|
|
|
2,450,719
|
|
|
1,700,719
|
|
|
1,700,719
|
|
|
5,250,000
|
|
|||||
|
|
Long-Term Incentives
|
|
1,512,000
|
|
|
1,512,000
|
|
|
1,512,000
|
|
|
1,512,000
|
|
|
3,023,000
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
2,410,153
|
|
|
2,386,500
|
|
|
6,986,500
|
|
|
2,410,153
|
|
|||||
|
|
Total
|
|
1,512,000
|
|
|
6,372,872
|
|
|
5,599,219
|
|
|
10,199,219
|
|
|
10,683,153
|
|
|||||
Eric D. Tanzberger
|
|
Salary and Bonus
|
|
—
|
|
|
1,808,460
|
|
|
1,208,460
|
|
|
1,208,460
|
|
|
3,720,000
|
|
|||||
|
|
Long-Term Incentives
|
|
844,000
|
|
|
844,000
|
|
|
844,000
|
|
|
844,000
|
|
|
1,727,000
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
1,407,069
|
|
|
1,380,364
|
|
|
4,130,364
|
|
|
1,407,069
|
|
|||||
|
|
Total
|
|
844,000
|
|
|
4,059,529
|
|
|
3,432,824
|
|
|
6,182,824
|
|
|
6,854,069
|
|
|||||
Sumner J. Waring, III
|
|
Salary and Bonus
|
|
—
|
|
|
1,718,037
|
|
|
1,148,037
|
|
|
1,148,037
|
|
|
3,534,000
|
|
|||||
|
|
Long-Term Incentives
|
|
756,000
|
|
|
756,000
|
|
|
756,000
|
|
|
756,000
|
|
|
1,533,000
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
239,533
|
|
|
212,828
|
|
|
2,575,328
|
|
|
239,533
|
|
|||||
|
|
Total
|
|
756,000
|
|
|
2,713,570
|
|
|
2,116,865
|
|
|
4,479,365
|
|
|
5,306,533
|
|
|||||
Gregory T. Sangalis
|
|
Salary and Bonus
|
|
—
|
|
|
1,385,922
|
|
|
905,922
|
|
|
905,922
|
|
|
2,784,000
|
|
|||||
|
|
Long-Term Incentives
|
|
600,000
|
|
|
600,000
|
|
|
600,000
|
|
|
600,000
|
|
|
1,238,000
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
1,058,186
|
|
|
1,038,680
|
|
|
3,401,180
|
|
|
1,058,186
|
|
|||||
|
|
Total
|
|
600,000
|
|
|
3,044,108
|
|
|
2,544,602
|
|
|
4,907,102
|
|
|
5,080,186
|
|
Name and Address of Beneficial Owner
|
|
Amount
Beneficially
Owned
|
|
Percent
of Class
(6)
|
|||
BlackRock, Inc.
|
|
|
|
|
|
||
55 East 52nd Street
|
|
|
|
|
|
||
New York, NY 10055
|
|
16,476,818
|
|
(1)
|
|
8.8
|
%
|
The Vanguard Group
|
|
|
|
|
|
||
100 Vanguard Blvd
|
|
|
|
|
|
||
Malvern, PA 19355
|
|
15,810,893
|
|
(2)
|
|
8.4
|
%
|
T. Rowe Price Associates, Inc.
|
|
|
|
|
|
||
100 E. Pratt Street
|
|
|
|
|
|
||
Baltimore, MD 21202
|
|
11,349,610
|
|
(3)
|
|
6.0
|
%
|
FMR LLC and Abigail P. Johnson
|
|
|
|
|
|
||
245 Summer Street
|
|
|
|
|
|
||
Boston, MA 02210
|
|
13,905,055
|
|
(4)
|
|
7.4
|
%
|
Select Equity Group, L.P.
|
|
|
|
|
|
||
380 Lafayette Street, 6th Floor
|
|
|
|
|
|
||
New York, NY 10003
|
|
10,346,070
|
|
(5)
|
|
5.5
|
%
|
(6)
|
As of the Company's shares outstanding on October 25, 2017 of 187,470,180 as reported on the cover page of the Company's third quarter Form 10-Q.
|
Name of Individual or Group
|
|
Shares
Owned
|
|
|
|
Right to Acquire Ownership
Under Options Exercisable
Within 60 Days
|
|
|
Total
|
|
|
Percent
of Class
(6)
|
|
Thomas L. Ryan
|
|
1,647,209
|
|
(1)
|
|
2,545,333
|
|
|
4,192,542
|
|
|
2.2
|
%
|
Michael R. Webb
|
|
572,266
|
|
|
|
1,177,000
|
|
|
1,749,266
|
|
|
*
|
|
Eric D. Tanzberger
|
|
214,194
|
|
|
|
332,299
|
|
|
546,493
|
|
|
*
|
|
Sumner J. Waring, III
|
|
335,457
|
|
|
|
291,599
|
|
|
627,056
|
|
|
*
|
|
Gregory T. Sangalis
|
|
240,233
|
|
|
|
376,199
|
|
|
616,432
|
|
|
*
|
|
Alan R. Buckwalter
|
|
80,343
|
|
|
|
—
|
|
|
80,343
|
|
|
*
|
|
Anthony L. Coelho
|
|
75,440
|
|
|
|
—
|
|
|
75,440
|
|
|
*
|
|
Victor L. Lund
|
|
215,406
|
|
|
|
—
|
|
|
215,406
|
|
|
*
|
|
John W. Mecom, Jr.
|
|
126,000
|
|
|
|
—
|
|
|
126,000
|
|
|
*
|
|
Clifton H. Morris, Jr.
|
|
208,782
|
|
(2)
|
|
—
|
|
|
208,782
|
|
|
*
|
|
Ellen Ochoa
|
|
30,707
|
|
|
|
—
|
|
|
30,707
|
|
|
*
|
|
R. L. Waltrip
|
|
1,194,288
|
|
(3)
|
|
—
|
|
|
1,194,288
|
|
|
*
|
|
W. Blair Waltrip
|
|
1,602,935
|
|
(4)
|
|
—
|
|
|
1,602,935
|
|
|
*
|
|
Marcus A. Watts
|
|
76,600
|
|
(5)
|
|
—
|
|
|
76,600
|
|
|
*
|
|
Edward E. Williams
|
|
164,860
|
|
|
|
—
|
|
|
164,860
|
|
|
*
|
|
Executive officers and Directors as a Group (18 persons)
|
|
7,135,033
|
|
|
|
5,360,928
|
|
|
12,495,961
|
|
|
6.6
|
%
|
PROPOSAL 4
|
The Board of Directors recommends that you vote “FOR” Proposal 4, to approve amendments to our Restated Articles of Incorporation and our Bylaws to declassify the Board of Directors.
|
PROPOSAL 5
|
•
|
Removal of Directors.
Currently, Article Twelve, Section (1)(d) of our Articles of Incorporation and Article II, Section 1(d) of our Bylaws requires the affirmative vote of the holders of at least four-fifths of all outstanding shares of capital stock to remove directors with or without cause (except removal may be effected by the affirmative vote of the holders of a simple majority of the outstanding shares of capital stock if the Board recommends removal of the director).
|
•
|
Amendment of Provisions of our Articles of Incorporation
. Currently, Article Twelve, Section 1(e) of our Articles of Incorporation requires the affirmative vote of the holders of at least four-fifths of all outstanding shares of capital stock to amend or repeal, or adopt any provision inconsistent with, the following provisions of our Articles of Incorporation: Article Eleven (Amendment of Bylaws), Article Twelve (Number and Term of Office of Directors) and Article Eight (Approval of Business Combinations). Consistent with the default voting requirements set forth in the Texas Business Organizations Code, currently a vote of the holders of at least two-thirds of all outstanding shares of capital stock is required to amend any provision of our Articles of Incorporation other than those set forth above.
|
•
|
Amendment of Certain Provisions of our Bylaws
. Currently, Article Eleven of our Articles of Incorporation and Article VII of our Bylaws requires the affirmative vote of the holders of at least four-fifths of all outstanding shares of capital stock to amend or repeal, or adopt any provision inconsistent with, the following provisions of our Bylaws: Article VII (Amendment of Bylaws) and
|
The Board of Directors recommends a vote "FOR" the proposal.
|
PROPOSAL 6
|
The Board of Directors recommends a vote "FOR" the proposal.
|
PROPOSAL 7
|
•
|
An average Director tenure of more than 22 years.
|
•
|
Four independent Directors with more than a quarter of a century service apiece, including the lead independent director.
|
•
|
A Nominating and Corporate Governance Committee with an average director tenure of more than 18
years.
|
•
|
Six out of eight independent board members with professional ties to Houston where the company is headquartered, including the three most recent appointees.
|
•
|
Two directors from the founding Waltrip family, even though the family holds less than 2% of the Company's stock.
|
•
|
An MSCI ESG Manager Governance score of 2.9 out of 10.
|
A.
|
Lead Director
|
•
|
Calling meetings of the Board;
|
•
|
Upon request, being available for consultation and direct communication with shareholders;
|
•
|
Presiding at executive sessions of the independent directors;
|
•
|
Serving as the liaison between the Chairman and the independent directors;
|
•
|
Presiding at all meetings of the Board at which the Chairman is not present;
|
•
|
Being available to consult with the Chairman regarding information sent to the Board, scheduling, and agendas of Board meetings;
|
•
|
Being available to consult with the chairpersons of the Board committees.
|
A.
|
Chairman and Chief Executive Officer
|
B.
|
Independent Directors
|
•
|
Mr. R. L. Waltrip, our former chairman, stepped down from that position in 2015 and has decided that he will no longer serve as a director at the end of his current term in May of 2018.
|
•
|
After thirty-five years of service, Mr. Mecom has provided notice that he does not intend to seek another term as director in May of 2019.
|
•
|
Our succession planning resulted in the election of a new member, Dr. Ellen Ochoa, in 2015 and the nominations of Ms. Jakki Haussler and Ms. Sara Martinez Tucker in 2018.
|
•
|
These changes will:
|
◦
|
reduce average director tenure to 17 years in 2018;
|
◦
|
reduce average director tenure to 14 years in 2019; and
|
◦
|
reduce the number of independent directors who reside in Houston to three out of nine in 2019.
|
•
|
Our Board is committed to a succession plan that adds new directors who will enhance our Board with diverse viewpoints, backgrounds, and expertise as demonstrated by all three of its most recent nominees.
|
The Board of Directors recommends a vote "AGAINST" the proposal.
|
Information About the Meeting and Voting
|
●
|
Bylaws of SCI
|
●
|
Charters of the Audit Committee, the Compensation Committee, Investment Committee and the Nominating and Corporate Governance Committee
|
●
|
Corporate Governance Guidelines
|
●
|
Principles of Conduct and Ethics for the Board of Directors
|
●
|
Code of Conduct and Ethics for Officers and Employees
|
Proxy Solicitation
|
Submission of Shareholder Proposals
|
Other Business
|
Section 16(a) Beneficial Ownership Reporting Compliance
|
|
Annex A: Non-GAAP Financial Measures
|
Adjusted Earnings and Adjusted EPS
|
|
Twelve Months Ended December 31,
|
||||||||||||||||||||||
(In Millions, except diluted EPS)
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
|
|
Net Income
|
|
|
Diluted EPS
|
|
|
Net Income
|
|
|
Diluted EPS
|
|
|
Net Income
|
|
|
Diluted EPS
|
|
||||||
Net income attributable to common stockholders, as reported
|
|
$
|
546.7
|
|
|
$
|
2.84
|
|
|
$
|
177.0
|
|
|
$
|
0.90
|
|
|
$
|
233.8
|
|
|
$
|
1.14
|
|
Pre-tax reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impact of divestitures and impairment charges, net
|
|
(7.0
|
)
|
|
(0.04
|
)
|
|
26.8
|
|
|
0.14
|
|
|
(6.0
|
)
|
|
(0.02
|
)
|
||||||
Losses on early extinguishment of debt
|
|
0.3
|
|
|
—
|
|
|
22.5
|
|
|
0.11
|
|
|
6.9
|
|
|
0.03
|
|
||||||
Acquisition, integration, and integration costs
|
|
—
|
|
|
—
|
|
|
17.5
|
|
|
0.09
|
|
|
6.8
|
|
|
0.03
|
|
||||||
Legal settlements, net of insurance recoveries
|
|
11.5
|
|
|
0.06
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Pension termination settlement
|
|
12.8
|
|
|
0.07
|
|
|
5.6
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
||||||
Tax reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax benefit from special items
|
|
(5.7
|
)
|
|
(0.03
|
)
|
|
(17.2
|
)
|
|
(0.09
|
)
|
|
(2.3
|
)
|
|
(0.01
|
)
|
||||||
Change in certain tax reserves and other
(1)
|
|
(260.1
|
)
|
|
(1.35
|
)
|
|
20.9
|
|
|
0.11
|
|
|
3.0
|
|
|
0.01
|
|
||||||
Earnings excluding special items and diluted earnings per share excluding special items
|
|
$
|
298.5
|
|
|
$
|
1.55
|
|
|
$
|
253.1
|
|
|
$
|
1.29
|
|
|
$
|
242.2
|
|
|
$
|
1.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted weighted average shares outstanding
|
|
|
|
192.2
|
|
|
|
|
196.0
|
|
|
|
|
204.5
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Cash Flow
(In Millions)
|
|
Twelve Months Ended
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities, as reported
|
|
$
|
502.3
|
|
|
$
|
463.6
|
|
|
$
|
472.2
|
|
Premiums paid on early extinguishment of debt
|
|
—
|
|
|
20.5
|
|
|
6.5
|
|
|||
Acquisition, integration, and system transition costs
|
|
—
|
|
|
11.7
|
|
|
6.6
|
|
|||
Legal settlements, net of insurance recoveries
|
|
11.5
|
|
|
—
|
|
|
|
||||
Excess tax benefits from share-based awards
(1)
|
|
—
|
|
|
12.7
|
|
|
18.1
|
|
|||
Payments related to IRS tax settlement (on prior year audits)
(2)
and tax structure changes
|
|
34.2
|
|
|
—
|
|
|
10.5
|
|
|||
Pension termination settlement
|
|
6.3
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by operating activities excluding special items
|
|
$
|
554.3
|
|
|
$
|
508.5
|
|
|
$
|
513.9
|
|
|
|
|
|
|
|
|
||||||
Recurring cash tax payments
|
|
132.7
|
|
|
112.6
|
|
|
93.0
|
|
|||
Adjusted operating cash flow before recurring cash tax payments
|
|
$
|
687.0
|
|
|
$
|
621.1
|
|
|
$
|
606.9
|
|
Adjusted Return on Equity
(In Millions)
|
|
Twelve Months Ended
December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income attributable to common stockholders, as reported
|
|
$
|
546.7
|
|
|
$
|
177.0
|
|
|
$
|
233.8
|
|
|
|
|
|
|
|
|
||||||
Earnings excluding special items (see adjusted EPS reconciliation above)
|
|
298.5
|
|
|
253.1
|
|
|
242.2
|
|
|||
|
|
|
|
|
|
|
||||||
Total common stockholders' equity, as reported
|
|
1,409.4
|
|
|
1,092.7
|
|
|
1,184.7
|
|
|||
Average equity
|
|
1,251.1
|
|
|
1,138.7
|
|
|
1,276.7
|
|
|||
|
|
|
|
|
|
|
||||||
Impact of special items (see adjusted EPS reconciliation above)
|
|
(248.2
|
)
|
|
76.1
|
|
|
8.4
|
|
|||
Less accumulated other comprehensive income
|
|
41.9
|
|
|
16.5
|
|
|
6.2
|
|
|||
|
|
|
|
|
|
|
||||||
Adjusted common stockholders' equity
|
|
1,119.3
|
|
|
1,152.3
|
|
|
1,186.9
|
|
|||
Average adjusted equity
|
|
1,135.8
|
|
|
1,169.6
|
|
|
1,280.4
|
|
|||
|
|
|
|
|
|
|
||||||
Return on equity
|
|
43.7
|
%
|
|
15.5
|
%
|
|
18.3
|
%
|
|||
Adjusted return on equity
|
|
26.3
|
%
|
|
21.6
|
%
|
|
18.9
|
%
|
|||
|
|
|
|
|
|
|
Annex B: 2017 Peer Group
|
AARON'S INC.
|
|
EP ENERGY CORP.
|
*
|
PATTERSON COMPANIES INC.
|
|
ABERCROMBIE & FITCH
|
|
EQT CORPORATION
|
|
PEABODY ENERGY CORP.
|
|
ADT CORP.
|
|
EQUIFAX INC.
|
*
|
PERKINELMER INC.
|
*
|
AGILENT TECHNOLOGIES INC.
|
*
|
EQUINIX, INC.
|
|
PITNEY BOWES INC.
|
*
|
ALEXION PHARMACEUTICALS INC.
|
|
EXPRESS INC.
|
|
POLARIS INDUSTRIES INC.
|
|
AMERICAN TOWER INC.
|
|
FMC TECHNOLOGIES INC.
|
|
POPULAR INC.
|
*
|
AMERICAN EAGLE OUTFITTERS INC.
|
|
FOSSIL GROUP, INC.
|
|
PROLOGIS INC.
|
*
|
APOLLO EDUCATION GROUP INC.
|
|
GARMIN LTD.
|
|
RANGE RESOURCES CORP.
|
|
ARCH COAL INC.
|
|
GENERAL GROWTH PPTYS INC.
|
|
REGENERON PHARMACEUTICALS
|
|
ASCENA RETAIL GROUP INC.
|
|
GENESIS ENERGY LP
|
|
RENT-A-CENTER INC.
|
|
AUTOZONE INC.
|
*
|
GNC HOLDINGS INC.
|
|
RESTORATION HARDWARE HOLDINGS
|
|
BARD (C.R.) INC.
|
*
|
GRAHAM HOLDINGS COMPANY
|
|
SOUTHWESTERN ENERGY CO.
|
|
BON-TON STORES INC.
|
|
HANOVER INSURANCE GROUP INC.
|
*
|
SPECTRA ENERGY CORP.
|
|
BRINKS CO.
|
*
|
HASBRO INC.
|
|
STEELCASE INC.
|
|
BROOKDALE SENIOR LIVING INC.
|
|
HELMERICH & PAYNE
|
|
STERIS PIC
|
*
|
BRUNSWICK CORP.
|
*
|
HILL-ROM HOLDINGS INC.
|
|
TD AMERITRADE HOLDING CORP.
|
*
|
CABELA’S INC.
|
|
HNI CORP.
|
*
|
TEEKAY CORP.
|
|
CERNER CORP.
|
|
HUNTINGTON BANCSHARES
|
*
|
TETRA TECH INC.
|
|
CHICO’S FAS INC.
|
|
IMS HEALTH HOLDINGS INC.
|
|
TIFFANY & CO.
|
|
CHURCH & DWIGHT INC.
|
|
INTUITIVE SURGICAL INC.
|
|
TORCHMARK CORP.
|
*
|
CINTAS CORP
|
*
|
IRON MOUNTAIN INC.
|
|
TRIPLE-S MANAGEMENT CORP.
|
|
CME GROUP INC.
|
|
KEMPER CORP/DE
|
*
|
TRUEBLUE INC.
|
|
CNO FINANCIAL GROUP, INC.
|
*
|
KEYCORP
|
*
|
VARIAN MEDICAL SYSTEMS INC.
|
*
|
COMERICA INC.
|
*
|
LEGG MASON INC.
|
*
|
VENTAS INC.
|
|
COTY, INC.
|
|
LEGGETT & PLATT INC.
|
*
|
VISTEON CORP.
|
|
CRESCENT POINT ENERGY CORP.
|
|
LPL FINANCIAL HOLDINGS INC.
|
|
VORNADO REALITY TRUST
|
*
|
CROWN CASTLE INTL CORP.
|
|
LULULEMON ATHLETICA INC.
|
|
WATERS CORP.
|
*
|
DCP MIDSTREAM PARTNERS LP
|
|
MALLINCKRODT PLC
|
|
WELLTOWER INC.
|
|
DENTSPLY SIRONA INC.
|
*
|
MARATHON OIL CORP.
|
|
WILLIAMS-SONOMA INC
|
|
DEVRY EDUCATION GROUP INC.
|
|
MCDERMOTT INTL INC.
|
|
WOLVERINE WORLD WIDE
|
|
DSW INC.
|
|
MERCURY GENERAL CORP.
|
|
ZIMMER BIOMET HOLDINGS INC.
|
|
EDGEWELL PERSONAL CARE CO.
|
|
MILLER (HERMAN) INC.
|
*
|
ZOETIS INC.
|
|
EDWARDS LIFESCIENCES CORP.
|
|
MSC INDUSTRIAL DIRECT
|
*
|
|
|
ENCANA CORP.
|
|
MURPHY OIL CORP.
|
|
|
|
ENDO INTERNATIONAL PIC
|
|
NASADAQ INC.
|
*
|
|
|
Annex C: Proposal 4 - Amendment to Restated Articles of Incorporation
|
Annex D: Proposal 4 - Amendment to the Bylaws
|
Annex E: Proposal 5 - Amendment to Restated Articles of Incorporation
|
Annex F: Proposal 5 - Amendment to the Bylaws
|
Annex G: Proposal 6 - Amendment to Restated Articles of Incorporation
|
|
|
|
|
KEEP THIS PORTION FOR YOUR RECORDS
|
|
|
|
|
DETACH AND RETURN THIS PORTION ONLY
|
|
|
|
|
|
|
|
|
|
|
|
SERVICE CORPORATION INTERNATIONAL
PROXY SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders May 23, 2018
The undersigned hereby appoints Thomas L. Ryan, Gregory T. Sangalis and Eric D. Tanzberger, and each or any of them as attorneys, agents and proxies of the undersigned with full power of substitution, for and in the name, place and stead of the undersigned, to attend the annual meeting of shareholders of Service Corporation International (the "Company") to be held in the Conference Center, Heritage I and II, Service Corporation International, 1929 Allen Parkway, Houston, Texas at 9:00 a.m. Central Time on May 23, 2018, and any adjournment(s) thereof, and to vote thereat the number of shares of Common Stock of the Company which the undersigned would be entitled to vote if personally present as indicated on the reverse side hereof and, in their discretion, upon any other business which may properly come before said meeting. This proxy, when properly executed, will be voted in accordance with your indicated directions.
If no direction is made, this proxy will be voted FOR the election of directors, FOR proposals 2, 3, 4, 5 and 6; and AGAINST proposal 7.
Continued and to be signed on reverse side
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