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Preliminary Proxy Statement
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☐
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☑
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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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PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
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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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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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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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3) Filing Party:
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4) Date Filed:
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Service Corporation International
Proxy Statement and
2017 Annual Meeting Notice
|
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2016: Delivering Shareholder Value
|
||||
|
||||
Total Shareholder Return
|
||||
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GAAP Performance Measures
|
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Adjusted Performance Measures*
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2017 Annual Meeting of Shareholders
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Voting Matters
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How To Vote
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Q&A WITH OUR CHAIRMAN AND CEO
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MESSAGE FROM OUR BOARD OF DIRECTORS
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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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Board Evolution
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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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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 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 2016 "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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Pension Plans
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Executive Deferred Compensation Plan
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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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Proposal 4: Frequency on "Say-on-Pay" Vote
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Proposal 5: Approval of the Amended and Restated 2016 Equity Incentive Plan
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Proposal 6: Shareholder Proposal to Require an Independent Board Chairman
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Proposal 7: Shareholder Proposal to Adopt Simple Majority Voting
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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: 2016 Peer Group
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Annex C: Amended and Restated 2016 Equity Incentive Plan
|
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Date and Time:
|
Wednesday, May 10, 2017 at 9:00 a.m. Central Time
|
||
Place:
|
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:
|
March 13, 2017
|
|
Proposal
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Board Recommendation
|
|
Page Number
|
||||
1.
|
Election of three Directors
|
|
ü
|
FOR each Director nominee
|
|
|||
2.
|
Approval of appointment of PricewaterhouseCoopers LLP, our independent registered public accounting firm
|
|
ü
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FOR
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|
|||
3.
|
"Say-on-Pay" advisory vote to approve executive compensation
|
|
ü
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FOR
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|
|||
4.
|
Frequency on "Say-on-Pay" vote
|
|
ü
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FOR ANNUAL VOTE
|
|
|||
5.
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Approval of the Amended and Restated 2016 Equity Incentive Plan
|
|
ü
|
FOR
|
|
|||
6.
|
Shareholder proposal to require an Independent Board Chairman
|
|
û
|
AGAINST
|
|
|||
7.
|
Shareholder proposal to adopt simple majority voting
|
|
û
|
AGAINST
|
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By Internet
|
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By Telephone
|
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By Mail
|
|
In Person
|
|
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|
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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.
|
|
Call toll-free number
1-800-690-6903.
|
|
Sign, date, and return
the enclosed proxy card
or voting instruction form.
|
|
To attend the
meeting in person,
you will need proof of
your share ownership
and valid picture I.D.
|
|
|
|
|
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|
|
For 2017,
we created 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.
|
|
www.sciannualmeeting.com
|
Tom Ryan answers questions received from shareholders over the course of 2016.
|
|
|
1.
|
Grow Revenue.
I believe the biggest challenge we face today in growing revenue is remaining relevant in the eyes of our consumers. The industry is continuing to change, as it's influenced by the Baby Boomer generation. It’s shifting to an experience and a focus on service rather than product offerings. Cremation continues to grow, so we are developing products and services that align with those preferences and continue to expand our footprint that serves the direct cremation consumer through our non-funeral home channel, SCI Direct. In our cemeteries, we continue to have a tiered inventory strategy that meets the
|
2.
|
Leverage Scale.
Our second strategy is leveraging scale, or as I like to say “why be big?” We continue to leverage our unparalleled scale by optimizing our network and driving down costs through supply chain management. We are investing in our preneed sales program, including accessing the premier financial partners in our industry to manage our $10 billion backlog of future funeral and cemetery revenue. We are also investing in best-in-class technology for our sales organization to enhance productivity.
|
3.
|
Capital Deployment.
Our third core strategy for long-term growth is maximization of capital deployment opportunities. Due to the stability of our cash flow generated from operations and our substantial amount of liquidity, we were able to deploy a significant amount of capital to grow the business and to return value to our shareholders in 2016. For the year, we invested $73 million in acquisitions (including Section 1031 exchange funds), $228 million in share repurchases, and $98 million in dividends. We will continue this disciplined capital deployment approach to target the best total return for our shareholders and deploy capital towards the highest relative return opportunity.
|
•
|
The trust assets, which are not available for use in our business until we provide services or merchandise to our customers. Accounting rules require us to put these assets on our balance sheet, supporting our backlog of preneed contracts and perpetual care obligations.
|
•
|
Our cemetery operations, which by their nature require us to maintain significant land available for future sales.
|
•
|
Our funeral operations (83% of the real estate is owned by us) reflect significant investments in buildings and land.
|
•
|
HMIS+.
HMIS+ is an in-house designed application that modernizes the atneed arrangement process. The platform utilizes high resolution images and embedded video, allowing the customer to better envision the offerings we provide. It also enables our arrangers to follow an efficient process flow in a streamlined and simplified manner. When HMIS+ is utilized, the results indicate a higher sales average and, even more importantly, higher customer satisfaction ratings. The rollout of HMIS+ was largely completed in 2016.
|
•
|
Salesforce.com.
Since our adoption and implementation of Salesforce as our customer relationship management system, we have experienced meaningful improvement in counselor effectiveness and efficiency. Using Salesforce
|
•
|
Preneed Sales Enablement Platform.
We piloted during 2016 and anticipate the launch of our new sales
|
•
|
Cemetery Flower Placement Program.
In 2017, we are launching our cemetery flower placement service utilizing a direct-to-customer portal. This will be a customer-focused service that sets us apart from other cemetery operators.
|
•
|
Websites.
In 2017, we will launch newly redesigned, contemporary websites for our approximately 1,800 Dignity Memorial locations. The newly designed websites will provide a mobile-enabled interface, a modern underlying architecture, a more engaging obituary experience, and will be designed to improve ranking in web search results.
|
|
Lead Independent Director - Tony Coelho
|
|
|
Key Duties and Responsibilities of Lead Independent Director:
●
Preside over independent executive sessions held on a regular basis
●
Serve as liaison to the Chairperson
●
Engage in performance evaluation of Directors and CEO
●
Interview Director candidates
●
Communicate with stockholders
●
Consult with committee chairpersons
|
|
|
|
|
|
|
|
Anthony L. Coelho
Lead Independent Director
|
|
Thomas L. Ryan
Chairman and CEO
|
|
Alan R. Buckwalter, III
|
|
Victor L. Lund
|
|
|
|
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|
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John W. Mecom, Jr.
|
|
Clifton H. Morris, Jr.
|
|
Ellen Ochoa
|
|
Robert L. Waltrip
|
|
|
|
|
|
|
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W. Blair Waltrip
|
|
Marcus A. Watts
|
|
Edward E. Williams
|
|
|
Corporate Governance Highlights and Changes
|
•
|
The Board appointed Tom Ryan as Chairman of the Board.
|
•
|
The Board appointed Tony Coelho to the newly created role of Lead Independent Director to strengthen and optimize the independence of the Board.
|
•
|
Marcus Watts succeeded Tony Coelho as Chair of the Nominating and Corporate Governance Committee.
|
•
|
We reduced the number of companies in our peer group used for benchmark studies and the long-term performance units plan based on total shareholder return (TSR Performance Units) for 2016.
|
•
|
During 2016, SCI and Meridian engaged with Institutional Shareholder Services (ISS) to discuss the metrics used in their report. We also had a face-to-face meeting with Glass Lewis to discuss concerns with their peer group selection (previously a majority of restaurants) as well as suggested adjustments to their
|
•
|
The Board approved an adjustment to the Board of Director's compensation program to address the changing regulatory environment, the enhanced role for Board committee leadership, and respond to feedback from our compensation consultant. The compensation changes will be effective August 1, 2017, with the change in total stock grants effective May 2018. See page 26 for details for the Director compensation changes.
|
•
|
We continue to make enhancements to the format and content of our proxy statement to provide a clear and detailed overview of topics important to our shareholders.
|
Feature
|
|
Detail
|
|
Further Information
(page)
|
|
Board independence
|
|
●
11 directors, 8 independent directors
|
|
|
|
●
Strong Lead Independent Director, newly created role in 2016
|
|
||||
●
Independent Audit, Compensation, and Nominating and Corporate Governance Committees
|
|
||||
●
Regular meetings of Independent Directors
|
|
||||
Board effectiveness
|
|
●
Board evolution
|
|
|
|
●
Annual Board and Committee evaluation process
|
|
||||
●
Board orientation and education program
|
|
||||
Shareholder rights
|
|
●
Shareholder questions and concerns are communicated to and considered by the Board
|
|
|
|
●
Annual “Say-on-Pay” vote
|
|
||||
●
No shareholder rights plan or “poison pill”
|
|
||||
●
Shareholder ability to call special meetings
|
|
||||
Corporate governance practices
|
|
●
Majority voting standard in Director elections
|
|
|
|
●
Anti-hedging and anti-pledging policies applicable to all officers and Directors
|
|
||||
●
Claw-back policy applicable to all officers
|
|
||||
●
Stock ownership and retention guidelines for Directors and officers
|
|
||||
●
Active Board participation in management succession planning
|
23
|
|
|
We believe it is important to proactively
ENGAGE
our shareholders, using a
COLLABORATIVE
approach, and then
COMMUNICATE
the feedback to our Board to enhance our corporate governance practices.
|
Key Highlights
|
|
|
|
Reference
|
|
Executive Compensation
|
|
l
|
We have reduced the number of companies and provided more insight into the peer group we use for our long-term performance unit plan that is linked to a total shareholder return.
|
|
|
|
l
|
We have clarified our disclosures around performance metrics.
|
|
||
|
l
|
We have further illustrated our alignment of pay and performance.
|
|
||
Board-Related
|
|
l
|
Board composition and refreshment remains a priority for us. In 2015, we added a new member, Dr. Ellen Ochoa, to our board.
|
|
|
|
l
|
We have made changes to the Director's compensation.
|
|
||
|
l
|
We have highlighted the evolution of our Board.
|
|
|
|
Accounting White Paper
|
|
l
|
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.
|
|
You can view the
white paper at
under Featured Documents
|
Board Snapshot
|
Experience
|
|
Skills
|
|
Commitment
|
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 reviews and makes recommendations to the Board’s leadership structure as
evidenced by the nomination of Dr. Ellen Ochoa for election to the
Board in 2015.
|
|
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).
|
|
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.
|
Director Age
|
|
96% Meeting Attendance in 2016
|
|
Personal Qualities
|
The average age of our Board is 69. We believe this gives our Board a unique perspective and understanding 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.
|
|
|
|
Importantly, 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.
|
|
|
|
|
Board Evolution since 2012
|
ü
|
Appointed new Chairman
|
ü
|
Reallocation of committee composition
|
|
|
|
|
ü
|
Appointed Lead Independent Director
|
ü
|
Enhanced qualifications and diversity represented on the Board
|
|
|
||
ü
|
Added two new Directors
|
||
|
|
|
|
Director Nominees
|
|
|
Independent
|
|
Age
|
|
Director
Since
|
|
Other
Public
Boards*
|
|
Board Committee
Composition
|
||||||||
Name
Occupation
|
|
A
|
|
C
|
|
E
|
|
N&
CG
|
|
I
|
||||||||
Thomas L. Ryan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman and CEO, Service Corporation International
|
|
NO
|
|
51
|
|
2004
|
|
2
|
|
|
|
|
|
C
|
|
|
|
|
Clifton H. Morris, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman and CEO of JBC Funding, a corporate lending
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and investment firm
|
|
YES
|
|
81
|
|
1990
|
|
None
|
|
●
|
|
|
|
|
|
●
|
|
|
W. Blair Waltrip
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent consultant, family and trust investments,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and former senior executive of the Company
|
|
NO
|
|
62
|
|
1986
|
|
None
|
|
|
|
|
|
|
|
|
|
●
|
Continuing Directors
|
|
|
Independent
|
|
Age
|
|
Director
Since
|
|
Other
Public
Boards*
|
|
Board Committee
Composition
|
||||||||
Name
Occupation
|
|
A
|
|
C
|
|
E
|
|
N&
CG
|
|
I
|
||||||||
Alan R. Buckwalter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Chairman and CEO, Chase Bank of Texas
|
|
YES
|
|
70
|
|
2003
|
|
None
|
|
●
|
|
C
|
|
●
|
|
|
|
|
Anthony L. Coelho
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Majority Whip of the U. S. House of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Representatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent business and political consultant
|
|
YES
|
|
74
|
|
1991
|
|
2
|
|
|
|
●
|
|
●
|
|
●
|
|
|
Victor L. Lund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and CEO, Teradata
|
|
YES
|
|
69
|
|
2000
|
|
1
|
|
C
|
|
|
|
●
|
|
●
|
|
|
John W. Mecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Independent businessman who bought, developed, managed,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and sold a variety of real estate and other business interests
|
|
YES
|
|
77
|
|
1983
|
|
None
|
|
|
|
●
|
|
|
|
|
|
●
|
Ellen Ochoa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director, NASA Johnson Space Center
|
|
YES
|
|
58
|
|
2015
|
|
None
|
|
|
|
●
|
|
|
|
|
|
●
|
R. L. Waltrip
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Founder and Chairman Emeritus, Service Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
NO
|
|
86
|
|
1962
|
|
None
|
|
|
|
|
|
●
|
|
|
|
|
Marcus A. Watts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, The Friedkin Group, an umbrella company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
overseeing various business interests that are principally
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
automotive related
|
|
YES
|
|
58
|
|
2012
|
|
None
|
|
|
|
●
|
|
●
|
|
C
|
|
|
Edward E. Williams
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professor Emeritus of Entrepreneurship, Rice University,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Doctorate in Finance and Accounting
|
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YES
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71
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1991
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None
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●
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C
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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 Skill and Experience
|
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CEO Experience/Senior Leadership.
Directors who have served as CEO or in a senior leadership position are important to us, as they have the experience and perspective to analyze, shape, and oversee the execution of key operational and strategic initiatives.
|
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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.
We use a broad set of financial metrics to measure our operating and strategic performance. Directors who have financial experience can assist us in evaluating our performance, and can provide guidance on financial reporting and internal controls, as well as capital structure and financing activities.
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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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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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R.L. Waltrip
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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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ü
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ü
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ü
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Industry
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ü
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ü
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ü
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ü
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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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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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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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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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Proposal 1 : Election of Directors
|
The Board of Directors will consist of eleven members and 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 three Directors to the Board with three-year terms expiring in 2020.
|
Set forth below are profiles for each of the three 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 three nominees.
|
Clifton H.
Morris, Jr.
|
|
Independent
|
Director Since: 1990
|
Age: 81
|
If Elected
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, 55 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
|
W. Blair
Waltrip
|
|
Non-Independent
|
Director Since:
1986
|
Age:
62
|
If Elected
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
|
Continuing Directors
|
|
|
|
|
|
||
Alan R. Buckwalter
|
|
Independent
|
Director Since:
2003
|
Age:
70
|
Term Expires:
2019
|
Primary Qualifications:
|
|
|
|
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 in 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
|
Anthony L.
Coelho
|
|
Independent
|
Director Since:
1991
|
Age:
74
|
Term Expires:
2018
|
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 in 6 years (1990-1995)
Current Public Company Boards
●
Warren Resources, Inc.
●
AudioEye, Inc.
|
Select Past Public Company Boards
●
Chairman, Cyberonics
●
Chairman, Circus Circus Enterprises (now MGM Mirage)
●
Chairman, ICF Kaiser International, Inc.
Other Positions
●
Board member, Esquire Bank
●
Former Chairman and current Board member of the Epilepsy Foundation
Education
●
Loyola University Los Angeles
|
|||
Lead Independent
Director
|
|
Victor L.
Lund
|
|
Independent
|
Director Since:
2000
|
Age:
69
|
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. (1999-2002)
●
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 Company Boards
●
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:
77
|
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
|
Ellen
Ochoa
|
|
Independent
|
Director Since:
2015
|
Age:
58
|
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
|
●
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
|
R.L.
Waltrip
|
|
Non-Independent
|
Director Since:
1962
|
Age:
86
|
Term Expires:
2018
|
Primary
Qualifications:
|
|
|
|
Occupation
●
Founder and Chairman Emeritus, SCI (since 2016)
Prior Business Experience
●
Chairman of SCI (1962-2015)
●
CEO of SCI (1969-2005)
●
Founded SCI in 1962, took the company public in 1969
●
Started with family funeral business in the 1950’s; acquired additional funeral homes in the 1960’s; pioneered the clustering concept/efficiencies of scale in the funeral industry
|
●
Introduced M&A to the industry which changed the industry forever. As a result, he is the best known and highest regarded leader in the industry.
●
The network he began has now grown to more than 2,000 funeral service locations and cemeteries
Select Past Public Company Boards
●
Cash America International
●
Tankology Environmental, Inc.
|
Other Positions
●
Chairman, Board of Trustees, National Museum of Funeral History
Education
●
University of Houston
|
Marcus A.
Watts
|
|
Independent
|
Director Since:
2012
|
Age:
58
|
Term Expires:
2018
|
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 Board Positions
●
Board Chair, Federal Reserve Bank of Dallas (Houston Branch)
●
Board member, Highland Resources, Inc. (private real estate company)
Past Public Company Boards
●
Complete Production Services, Inc. (2007-2012) acquired by Superior Energy Services
●
Cornell Companies (2001-2005)
|
Other Positions
●
Chairman, Board of Trustees, United Way of Greater Houston
●
Vice Chairman, Greater Houston Partnership
●
Board member, Houston Ballet
Education
●
Texas A&M University
●
Harvard Law School
|
Edward E.
Williams
|
|
Independent
|
Director Since:
1991
|
Age:
71
|
Term Expires:
2018
|
Primary
Qualifications: |
|
|
|
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 12 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
|
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
|
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 2016:
Seven
|
|
“The engagement of our Audit Committee is critical to managing the evolving risk profile and regulatory environment in which we operate.”
|
|
|
Victor L. Lund
|
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
|
●
|
Financial reporting activities and disclosure matters
|
Audit Committee in 2016
|
The Audit Committee met seven times in 2016, 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 reviews the documents in depth as well as reviews 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 and also meets regularly with individual members of management to discuss relevant matters. The Committee also 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 27.
|
COMPENSATION COMMITTEE
|
||
|
|
Chair:
Alan R. Buckwalter
Other members:
Anthony L. Coelho, John W. Mecom, Jr., Ellen Ochoa, Marcus A. Watts
Meetings in 2016:
Five
|
“Through our ongoing shareholder engagement, we received feedback that our shareholders favor incentive compensation tied to specific performance measures that are aimed at driving long-term performance and value creation. We believe the long-term incentives for our executive officers align with this philosophy.”
|
||
Alan R. Buckwalter
|
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 2016
|
The Compensation Committee met five times in 2016, and each member of the Committee attended all of its meetings. The Committee devoted substantial time in its oversight of SCI’s compensation programs, particularly setting compensation for our newly appointed Chairman and our Founder and Chairman Emeritus, and narrowing the benchmark peer group used for SCI’s long-term performance units plan. As part of this process, the Committee spent considerable time reviewing feedback received from shareholders about SCI’s compensation programs. The Committee’s review of executive compensation matters and its decisions, including changes made in response to input from our shareholders, is 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 2016:
Four
|
"An important role for the Nominating and Corporate Governance Committee in 2016 was the implementation of a new leadership structure that included the appointment of a new chairman and a Lead Independent Director.
|
||
Marcus A. Watts
|
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
|
●
|
Succession planning for CEO and other SCI executives
|
●
|
Performance evaluation of the CEO, Board, and committees
|
●
|
Continuing education sessions for SCI Directors
|
Nominating and Corporate Governance Committee in 2016
|
The Nominating and Corporate Governance Committee met four times in 2016, 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 appointment of a new Chairman, as well as creating a Lead Independent Director role. With the appointment of Tony Coehlo to the role of Lead Independent Director, Marcus Watts assumed the position of Committee Chair.
|
INVESTMENT COMMITTEE
|
||
|
|
Chair:
Edward E. Williams
Other members:
John W. Mecom, Jr., Ellen Ochoa, W. Blair Waltrip
Meetings in 2016:
Four
|
“In addition to providing continued guidance in 2016 helping to monitor and improve the structure of SCI’s $4.5 billion preneed and perpetual care trust portfolio, the Investment Committee oversaw the management of the Company’s corporate cash and retirement plans. Additionally, we monitored the capital surplus and investments of SCI’s largest preneed insurance provider to ensure proper oversight of the company’s preneed backlog.”
|
||
Edward E. Williams
|
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
|
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 2016:
None
|
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
|
Director Compensation
|
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
|
|
|
$
|
270,750
|
|
|
$
|
—
|
|
|
$
|
382,250
|
|
Anthony L. Coelho
|
|
124,042
|
|
|
270,750
|
|
|
6,358
|
|
|
401,150
|
|
||||
Victor L. Lund
|
|
115,500
|
|
|
270,750
|
|
|
—
|
|
|
386,250
|
|
||||
John W. Mecom, Jr.
|
|
100,000
|
|
|
270,750
|
|
|
820
|
|
|
371,570
|
|
||||
Clifton H. Morris, Jr.
|
|
95,000
|
|
|
270,750
|
|
|
411
|
|
|
366,161
|
|
||||
Ellen Ochoa
|
|
100,000
|
|
|
270,750
|
|
|
—
|
|
|
370,750
|
|
||||
W. Blair Waltrip
|
|
91,500
|
|
|
270,750
|
|
|
—
|
|
|
362,250
|
|
||||
Marcus A. Watts
|
|
107,000
|
|
|
270,750
|
|
|
—
|
|
|
377,750
|
|
||||
Edward E. Williams
|
|
110,500
|
|
|
270,750
|
|
|
5,869
|
|
|
387,119
|
|
•
|
The cash retainer, which is paid quarterly, will increase from $75,000 to $90,000.
|
•
|
Meeting attendance fees will be eliminated.
|
•
|
Individual retainers for committee chairs will increase in recognition of their more significant and time-consuming roles. We are changing the fees to more properly align their compensation with the increased responsibility as a committee chair.
|
Director Compensation Changes
|
|||||||
|
Prior to 8/1/2017
|
|
After 8/1/2017
|
||||
Cash retainer, paid quarterly
|
$
|
75,000
|
|
|
$
|
90,000
|
|
Stock grants, payable at annual meeting date
|
10,000 shares
|
|
|
$180,000 value in shares
|
|
||
|
|
|
|
||||
Individual retainers, payable quarterly:
|
|
|
|
||||
Lead Director
|
$
|
20,000
|
|
|
$
|
30,000
|
|
Audit Committee Chair
|
$
|
15,000
|
|
|
$
|
25,000
|
|
Compensation Committee Chair
|
$
|
10,000
|
|
|
$
|
20,000
|
|
Investment Committee Chair
|
$
|
10,000
|
|
|
$
|
15,000
|
|
Nominating and Corporate Governance Chair
|
$
|
10,000
|
|
|
$
|
15,000
|
|
|
|
|
|
||||
Attendance fee per meeting
|
$
|
2,000
|
|
|
—
|
|
Proposal 2: Proposal to Approve the Selection of 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, 2017. 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
|
|
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
|
|
|||||
2016
|
|
$
|
6,156,398
|
|
|
$
|
775,000
|
|
|
$
|
23,250
|
|
|
$
|
3,838
|
|
|
$
|
6,958,486
|
|
2015
|
|
$
|
5,225,693
|
|
|
$
|
—
|
|
|
$
|
15,000
|
|
|
$
|
3,600
|
|
|
$
|
5,244,293
|
|
1
|
Fees associated with the annual audit of the Company’s consolidated financial statements 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
|
All other fees in 2016 were primarily related to the review of our new general ledger system, Oracle, implemented in 2016.
|
3
|
Fees for tax services for 2016 were related to LLC tax preparation and for 2015 were related to compliance with the Foreign Account Tax Compliance Act.
|
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
|
R. L. Waltrip
|
|
Founder and Chairman Emeritus
|
•
|
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 16% market share and over $3 billion in revenue.
|
•
|
Increased adjusted earnings per share and adjusted operating cash flow before cash tax payments by 9% and 2%, respectively.
|
•
|
Reported adjusted operating cash flow of approximately $621 million and deployed $326 million to our shareholders through share buy-backs and an increased dividend.
|
•
|
Achieved a total shareholder return (TSR) of 191% over the last five fiscal years, approximately doubling the return of the S&P 500.
|
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 them
|
|
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 a claw-back policy.
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 TSR 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 (page
10
).
|
|
WHAT WE DON’T DO:
|
|
|
We do not allow tax gross-up.
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.
|
|
We do not allow hedging or pledging.
We have policies that prohibit officers and Directors from hedging or pledging their SCI stock ownership.
|
|
We do not allow the repricing of stock options.
We have policies that prohibit subsequent alterations of stock option pricing.
|
|
|
|
|
|
|
Compensation Philosophy and Process
|
Over 70% 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.
|
|
A fourth performance measure (Return on Equity) was added to the Incentive Compensation Plan in 2015.
|
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.
|
|
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 one-third per year.
|
|
Supports retention and furthers stock ownership.
|
|
|
|
|
TSR 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.
|
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
|
|
|
2016 Salary
|
|
2015 Salary
|
|
Change
|
|
% Change
|
|||||||
Thomas L. Ryan
|
|
$
|
1,200,000
|
|
|
$
|
1,200,000
|
|
|
$
|
—
|
|
|
—
|
%
|
Michael R. Webb
|
|
750,000
|
|
|
720,000
|
|
|
30,000
|
|
|
4.2
|
%
|
|||
Eric D. Tanzberger
|
|
550,000
|
|
|
540,000
|
|
|
10,000
|
|
|
1.9
|
%
|
|||
Sumner J. Waring, III
|
|
550,000
|
|
|
520,000
|
|
|
30,000
|
|
|
5.8
|
%
|
|||
R.L. Waltrip
|
|
952,000
|
|
|
952,000
|
|
|
—
|
|
|
—
|
%
|
Annual Performance-Based Incentives Paid in Cash
|
|
|
Target Award Opportunity
(% of Base Salary)
|
|
Thomas L. Ryan
|
|
120
|
%
|
Michael R. Webb
|
|
100
|
%
|
Eric D. Tanzberger
|
|
80
|
%
|
Sumner J. Waring, III
|
|
80
|
%
|
R.L. Waltrip
|
|
100
|
%
|
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
|
|
$
|
216,930
|
|
|
$
|
254,820
|
|
|
$
|
471,750
|
|
Michael R. Webb
|
|
122,359
|
|
|
143,731
|
|
|
266,090
|
|
|||
Eric D. Tanzberger
|
|
80,034
|
|
|
94,013
|
|
|
174,047
|
|
|||
Sumner J. Waring, III
|
|
80,034
|
|
|
94,013
|
|
|
174,047
|
|
|||
R.L. Waltrip
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
253,521
|
38
|
1,595,309
|
Michael R. Webb, President and Chief Operating Officer
|
|
4
|
105,634
|
27
|
723,853
|
Eric D. Tanzberger, Senior Vice President and Chief Financial Officer
|
|
3
|
58,099
|
10
|
201,354
|
Sumner J. Waring, III, Senior Vice President, North American Operations
|
|
3
|
58,099
|
17
|
333,994
|
R.L. Waltrip, Founder and Chairman Emeritus
|
|
3
|
100,563
|
52
|
1,745,059
|
At March 13, 2017, the Named Executive Officers have exceeded their ownership guideline levels for 2017.
|
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
|
|
2016
|
|
1,200,000
|
|
|
1,688,824
|
|
|
1,629,693
|
|
|
5,012,396
|
|
|
6,728
|
|
|
866,121
|
|
|
10,403,762
|
|
Chairman of the Board &
|
|
2015
|
|
1,241,154
|
|
|
1,674,400
|
|
|
1,600,055
|
|
|
4,784,755
|
|
|
—
|
|
|
980,638
|
|
|
10,281,002
|
|
Chief Executive Officer
|
|
2014
|
|
1,098,846
|
|
|
1,505,533
|
|
|
1,528,619
|
|
|
4,623,973
|
|
|
15,989
|
|
|
1,164,064
|
|
|
9,937,024
|
|
Michael R. Webb
|
|
2016
|
|
749,539
|
|
|
666,172
|
|
|
643,520
|
|
|
2,369,456
|
|
|
17,903
|
|
|
491,558
|
|
|
4,938,148
|
|
President &
|
|
2015
|
|
746,192
|
|
|
683,100
|
|
|
652,155
|
|
|
2,352,230
|
|
|
4,498
|
|
|
571,859
|
|
|
5,010,034
|
|
Chief Operating Officer
|
|
2014
|
|
684,231
|
|
|
677,055
|
|
|
685,705
|
|
|
2,406,497
|
|
|
32,906
|
|
|
684,313
|
|
|
5,170,707
|
|
Eric D. Tanzberger
|
|
2016
|
|
549,846
|
|
|
385,444
|
|
|
373,297
|
|
|
1,317,121
|
|
|
3,609
|
|
|
356,057
|
|
|
2,985,374
|
|
Senior Vice President &
|
|
2015
|
|
559,769
|
|
|
381,800
|
|
|
365,131
|
|
|
1,254,504
|
|
|
—
|
|
|
380,559
|
|
|
2,941,763
|
|
Chief Financial Officer
|
|
2014
|
|
518,846
|
|
|
363,765
|
|
|
367,939
|
|
|
1,262,107
|
|
|
9,217
|
|
|
476,040
|
|
|
2,997,914
|
|
Sumner J. Waring, III
|
|
2016
|
|
549,539
|
|
|
338,656
|
|
|
409,997
|
|
|
1,205,121
|
|
|
—
|
|
|
305,431
|
|
|
2,808,744
|
|
Senior Vice President
|
|
2015
|
|
538,500
|
|
|
340,400
|
|
|
326,836
|
|
|
1,146,041
|
|
|
—
|
|
|
370,483
|
|
|
2,722,260
|
|
North American Operations
|
|
2014
|
|
489,308
|
|
|
313,290
|
|
|
318,100
|
|
|
1,160,657
|
|
|
—
|
|
|
438,961
|
|
|
2,720,316
|
|
R.L. Waltrip
|
|
2016
|
|
952,000
|
|
|
—
|
|
|
—
|
|
|
2,518,862
|
|
|
—
|
|
|
220,366
|
|
|
3,691,228
|
|
Founder & Chairman
|
|
2015
|
|
988,616
|
|
|
—
|
|
|
—
|
|
|
2,571,793
|
|
|
—
|
|
|
264,577
|
|
|
3,824,986
|
|
Emeritus
|
|
2014
|
|
952,000
|
|
|
637,023
|
|
|
645,566
|
|
|
2,760,118
|
|
|
—
|
|
|
332,142
|
|
|
5,326,849
|
|
|
|
Year
|
|
Annual Performance Based
Incentive Paid in Cash
|
|
|
TSR Performance Units
(a)
|
|
|
Total Non-Equity Incentive
Plan Compensation
|
|
|||
Thomas L. Ryan
|
|
2016
|
|
$
|
1,692,396
|
|
|
$
|
3,320,000
|
|
|
$
|
5,012,396
|
|
|
|
2015
|
|
1,624,755
|
|
|
3,160,000
|
|
|
4,784,755
|
|
|||
|
|
2014
|
|
1,743,973
|
|
|
2,880,000
|
|
|
4,623,973
|
|
|||
Michael R. Webb
|
|
2016
|
|
881,456
|
|
|
1,488,000
|
|
|
2,369,456
|
|
|||
|
|
2015
|
|
886,230
|
|
|
1,466,000
|
|
|
2,352,230
|
|
|||
|
|
2014
|
|
994,497
|
|
|
1,412,000
|
|
|
2,406,497
|
|
|||
Eric D. Tanzberger
|
|
2016
|
|
517,121
|
|
|
800,000
|
|
|
1,317,121
|
|
|||
|
|
2015
|
|
498,504
|
|
|
756,000
|
|
|
1,254,504
|
|
|||
|
|
2014
|
|
562,107
|
|
|
700,000
|
|
|
1,262,107
|
|
|||
Sumner J. Waring, III
|
|
2016
|
|
517,121
|
|
|
688,000
|
|
|
1,205,121
|
|
|||
|
|
2015
|
|
480,041
|
|
|
666,000
|
|
|
1,146,041
|
|
|||
|
|
2014
|
|
538,657
|
|
|
622,000
|
|
|
1,160,657
|
|
|||
R.L. Waltrip
|
|
2016
|
|
1,118,862
|
|
|
1,400,000
|
|
|
2,518,862
|
|
|||
|
|
2015
|
|
1,171,793
|
|
|
1,400,000
|
|
|
2,571,793
|
|
|||
|
|
2014
|
|
1,372,118
|
|
|
1,388,000
|
|
|
2,760,118
|
|
|
(a)
|
TSR Performance Units for 2016 related to the performance period of 2014-2016. TSR Performance Units for 2015 related to the performance period of 2013-2015. TSR Performance Units for 2014 related to the performance period of 2012-2014.
|
|
|
|
(3)
|
This column sets forth the change in the actuarial present value of each executive’s accumulated benefit in 2016, 2015, and 2014 for the Supplemental Executive Retirement Plan for Senior Officers. The assumptions made for quantifying the present value of the benefits are set forth in note 14 to the consolidated financial statements included in the SCI 2016 Annual Report on Form 10-K.
|
|
|
||
(4)
|
All Other Compensation includes the following:
|
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
|
|
2/9/2016
|
|
|
|
$
|
1
|
|
|
$
|
1,440,000
|
|
|
$
|
2,880,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2/9/2016
|
|
1,840,000
|
|
|
460,000
|
|
|
1,840,000
|
|
|
3,680,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/9/2016
|
|
|
|
|
|
|
|
|
|
75,800
|
|
|
|
|
|
|
|
|
$
|
1,688,824
|
|
||||||||||||||
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
585,000
|
|
|
$
|
22.28
|
|
|
$
|
22.13
|
|
|
1,629,693
|
|
||||||||||
Michael R.
Webb
|
|
2/9/2016
|
|
|
|
1
|
|
|
750,000
|
|
|
1,500,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2/9/2016
|
|
726,000
|
|
|
181,500
|
|
|
726,000
|
|
|
1,452,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/9/2016
|
|
|
|
|
|
|
|
|
|
29,900
|
|
|
|
|
|
|
|
|
666,172
|
|
|||||||||||||||
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
231,000
|
|
|
22.28
|
|
|
22.13
|
|
|
643,520
|
|
||||||||||||
Eric D.
Tanzberger
|
|
2/9/2016
|
|
|
|
1
|
|
|
440,000
|
|
|
880,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2/9/2016
|
|
421,000
|
|
|
105,250
|
|
|
421,000
|
|
|
842,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/9/2016
|
|
|
|
|
|
|
|
|
|
17,300
|
|
|
|
|
|
|
|
|
$
|
385,444
|
|
||||||||||||||
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
134,000
|
|
|
22.28
|
|
|
22.13
|
|
|
373,297
|
|
||||||||||||
Sumner J.
Waring, III
|
|
2/9/2016
|
|
|
|
1
|
|
|
440,000
|
|
|
880,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2/9/2016
|
|
368,000
|
|
|
92,000
|
|
|
368,000
|
|
|
736,000
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2/9/2016
|
|
|
|
|
|
|
|
|
|
15,200
|
|
|
|
|
|
|
|
|
338,656
|
|
|||||||||||||||
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
86,522
|
|
|
22.28
|
|
|
22.13
|
|
|
241,033
|
|
||||||||||||
|
5/11/2016
|
|
|
|
|
|
|
|
|
|
|
|
30,478
|
|
|
22.28
|
|
|
26.95
|
|
|
168,964
|
|
||||||||||||
R.L. Waltrip
|
|
2/9/2016
|
|
|
|
1
|
|
|
952,000
|
|
|
1,904,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2/9/2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
|
2/9/2016
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
434,000
|
|
|
|
|
|
7.6250
|
|
|
2/9/2018
|
|
153,168
|
|
|
4,349,971
|
|
|
|
|
442,000
|
|
|
|
|
|
9.0850
|
|
|
2/8/2019
|
|
|
|
|
|||
|
|
387,000
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
|
|
|
|||
|
|
390,000
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
304,666
|
|
|
152,334
|
|
(1)
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
||
|
|
140,666
|
|
|
281,334
|
|
(2)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
—
|
|
|
585,000
|
|
(3)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
Michael R. Webb
|
|
202,000
|
|
|
|
|
|
7.6250
|
|
|
2/9/2018
|
|
62,667
|
|
|
1,779,743
|
|
|
|
|
214,000
|
|
|
|
|
|
9.0850
|
|
|
2/8/2019
|
|
|
|
|
|||
|
|
189,000
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
|
|
|
|||
|
|
181,000
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
136,666
|
|
|
68,334
|
|
(1)
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
||
|
|
57,333
|
|
|
114,667
|
|
(2)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
—
|
|
|
231,000
|
|
(3)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
Eric D. Tanzberger
|
|
93,700
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
35,334
|
|
|
1,003,486
|
|
|
|
|
93,400
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
73,333
|
|
|
36,667
|
|
(1)
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
||
|
|
32,100
|
|
|
64,200
|
|
(2)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
—
|
|
|
134,000
|
|
(3)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
Sumner J. Waring, III
|
|
83,300
|
|
|
|
|
|
11.1750
|
|
|
2/7/2020
|
|
31,067
|
|
|
882,303
|
|
|
|
|
82,400
|
|
|
|
|
|
15.2550
|
|
|
2/12/2021
|
|
|
|
|
|||
|
|
63,400
|
|
|
31,700
|
|
(1)
|
|
17.4050
|
|
|
2/11/2022
|
|
|
|
|
||
|
|
28,733
|
|
|
57,467
|
|
(2)
|
|
23.0000
|
|
|
2/10/2023
|
|
|
|
|
||
|
|
—
|
|
|
86,522
|
|
(3)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
|
|
—
|
|
|
30,478
|
|
(3)
|
|
22.2800
|
|
|
2/9/2024
|
|
|
|
|
||
R.L. Waltrip
|
|
—
|
|
|
64,334
|
|
(1)
|
|
17.4050
|
|
|
2/11/2022
|
|
12,200
|
|
|
346,480
|
|
|
|
Shares
Vesting
03/05/2017
|
|
|
Shares
Vesting
03/05/2018
|
|
|
Shares
Vesting
03/05/2019
|
|
Thomas L. Ryan
|
|
78,367
|
|
|
49,534
|
|
|
25,267
|
|
Michael R. Webb
|
|
32,833
|
|
|
19,867
|
|
|
9,967
|
|
Eric D. Tanzberger
|
|
18,266
|
|
|
11,301
|
|
|
5,767
|
|
Sumner J. Waring, III
|
|
15,999
|
|
|
10,001
|
|
|
5,067
|
|
R.L. Waltrip
|
|
12,200
|
|
|
—
|
|
|
—
|
|
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
|
|
700,000
|
|
|
$
|
14,471,117
|
|
|
84,699
|
|
|
$
|
2,095,242
|
|
Michael R. Webb
|
|
93,300
|
|
|
2,035,806
|
|
|
37,567
|
|
|
929,314
|
|
||
Eric D. Tanzberger
|
|
—
|
|
|
—
|
|
|
20,067
|
|
|
496,407
|
|
||
Sumner J. Waring, III
|
|
43,800
|
|
|
771,318
|
|
|
17,600
|
|
|
435,380
|
|
||
R.L. Waltrip
|
|
122,000
|
|
|
1,225,241
|
|
|
26,234
|
|
|
648,963
|
|
Pension Plans
|
Name
|
|
Number of Years
Credited Service
(#)
|
|
|
Present Value of
Accumulated
Benefit
($)
(1)
|
|
|
Payments During
Last Fiscal Year
($)
|
|
||
Thomas L. Ryan
|
|
21
|
|
|
$
|
167,108
|
|
|
$
|
—
|
|
Michael R. Webb
|
|
27
|
|
|
489,939
|
|
|
—
|
|
||
Eric D. Tanzberger
|
|
20
|
|
|
86,647
|
|
|
—
|
|
||
Sumner J. Waring, III
|
|
—
|
|
|
—
|
|
|
—
|
|
||
R. L. Waltrip
|
|
—
|
|
|
—
|
|
|
—
|
|
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
|
|
$
|
2,754,405
|
|
|
$
|
664,563
|
|
|
$
|
2,884,041
|
|
|
$
|
4,281,096
|
|
|
$
|
28,682,583
|
|
Michael R. Webb
|
|
1,177,105
|
|
|
371,565
|
|
|
1,799,393
|
|
|
275,412
|
|
|
17,471,205
|
|
|||||
Eric D. Tanzberger
|
|
541,290
|
|
|
232,505
|
|
|
574,263
|
|
|
140,386
|
|
|
6,157,566
|
|
|||||
Sumner J. Waring, III
|
|
123,716
|
|
|
224,685
|
|
|
193,464
|
|
|
180,225
|
|
|
3,293,665
|
|
|||||
R. L. Waltrip
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
Non-Equity Incentive Plan
Compensation
|
|
|
||||||||||
|
|
Salary
|
|
Annual Performance-
Based Incentive
Paid In Cash
|
|
TSR
Performance
Units
|
|
Restricted Stock
Awards
|
||||||||
Thomas L. Ryan
|
|
$
|
120,000
|
|
|
$
|
324,951
|
|
|
$
|
632,000
|
|
|
$
|
1,677,454
|
|
Michael R. Webb
|
|
44,972
|
|
|
177,246
|
|
|
293,200
|
|
|
661,687
|
|
||||
Eric D. Tanzberger
|
|
32,991
|
|
|
49,850
|
|
|
75,600
|
|
|
382,849
|
|
||||
Sumner J. Waring, III
|
|
54,954
|
|
|
28,802
|
|
|
39,960
|
|
|
—
|
|
||||
R. L. Waltrip
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Thomas L. Ryan
|
$
|
19,255,105
|
|
Michael R. Webb
|
10,332,340
|
|
|
Eric D. Tanzberger
|
4,253,624
|
|
|
Sumner J. Waring, III
|
2,203,538
|
|
|
R.L. Waltrip
|
—
|
|
Fund Name
|
2016 Calendar Year Return
|
|
Advisor Managed Portfolio - Conservative
|
(0.76
|
)%
|
Advisor Managed Portfolio - Moderate
|
(0.85
|
)%
|
Advisor Managed Portfolio - Moderate Growth
|
(1.04
|
)%
|
Advisor Managed Portfolio - Growth
|
(0.86
|
)%
|
Advisor Managed Portfolio - Aggressive
|
(0.73
|
)%
|
American Funds International
|
(5.24
|
)%
|
Delaware VIP Int’l Value Equity Series
|
(0.80
|
)%
|
Deutsche VIP Small Cap Index
|
8.82
|
%
|
Fidelity VIP Contrafund
|
2.23
|
%
|
Fidelity VIP Index 500
|
3.80
|
%
|
Fidelity VIP Govt Money Market
|
0.06
|
%
|
Fidelity VIP Mid Cap
|
4.74
|
%
|
Invesco V.I. International Growth
|
(3.52
|
)%
|
Invesco V.I. American Value Mid Cap Value
|
6.96
|
%
|
Janus Aspen Enterprise Portfolio
|
0.29
|
%
|
LVIP Baron Growth Opportunities
|
0.39
|
%
|
Mainstay VP High Yield Corporate Bond
|
1.43
|
%
|
MFS VIT Value Series
|
4.48
|
%
|
Morgan Stanley UIF Emerging Market Debt
|
(4.06
|
)%
|
PIMCO VIT Real Return Bond
|
(2.27
|
)%
|
PIMCO VIT Total Return Bond
|
(2.57
|
)%
|
SCI General Account Fund
|
0.75
|
%
|
T. Rowe Price Limited-Term Bond
|
(0.49
|
)%
|
T. Rowe Price Blue Chip Growth
|
(0.39
|
)%
|
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
|
|
$
|
—
|
|
|
$
|
4,092,396
|
|
|
$
|
2,892,396
|
|
|
$
|
2,892,396
|
|
|
$
|
9,360,000
|
|
|
|
Long-Term Incentives
|
|
—
|
|
|
17,302,687
|
|
|
17,302,687
|
|
|
17,302,687
|
|
|
18,134,287
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
4,969,752
|
|
|
4,936,669
|
|
|
11,936,669
|
|
|
4,969,752
|
|
|||||
|
|
Total
|
|
—
|
|
|
26,364,835
|
|
|
25,131,752
|
|
|
32,131,752
|
|
|
32,464,039
|
|
|||||
Michael R. Webb
|
|
Salary and Bonus
|
|
|
|
2,381,456
|
|
|
1,631,456
|
|
|
1,631,456
|
|
|
5,250,000
|
|
||||||
|
|
Long-Term Incentives
|
|
7,212,477
|
|
|
7,212,477
|
|
|
7,212,477
|
|
|
7,212,477
|
|
|
7,533,997
|
|
|||||
|
|
Other Benefits
|
|
2,118,070
|
|
|
2,145,800
|
|
|
2,118,070
|
|
|
6,718,070
|
|
|
2,145,800
|
|
|||||
|
|
Total
|
|
9,330,547
|
|
|
11,739,733
|
|
|
10,962,003
|
|
|
15,562,003
|
|
|
14,929,797
|
|
|||||
Eric D. Tanzberger
|
|
Salary and Bonus
|
|
—
|
|
|
1,617,121
|
|
|
1,067,121
|
|
|
1,067,121
|
|
|
3,410,000
|
|
|||||
|
|
Long-Term Incentives
|
|
—
|
|
|
4,025,799
|
|
|
4,025,799
|
|
|
4,025,799
|
|
|
4,216,399
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
1,239,040
|
|
|
1,205,957
|
|
|
3,955,957
|
|
|
1,239,040
|
|
|||||
|
|
Total
|
|
—
|
|
|
6,881,960
|
|
|
6,298,877
|
|
|
9,048,877
|
|
|
8,865,439
|
|
|||||
Sumner J. Waring, III
|
|
Salary and Bonus
|
|
—
|
|
|
1,617,121
|
|
|
1,067,121
|
|
|
1,067,121
|
|
|
3,410,000
|
|
|||||
|
|
Long-Term Incentives
|
|
—
|
|
|
3,526,913
|
|
|
3,526,913
|
|
|
3,526,913
|
|
|
3,691,206
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
227,316
|
|
|
194,233
|
|
|
2,556,733
|
|
|
227,316
|
|
|||||
|
|
Total
|
|
—
|
|
|
5,371,350
|
|
|
4,788,267
|
|
|
7,150,767
|
|
|
7,328,522
|
|
|||||
R.L. Waltrip
|
|
Salary and Bonus
|
|
—
|
|
|
3,022,862
|
|
|
2,070,862
|
|
|
2,070,862
|
|
|
6,664,000
|
|
|||||
|
|
Long-Term Incentives
|
|
2,453,832
|
|
|
2,453,832
|
|
|
2,453,832
|
|
|
2,453,832
|
|
|
2,453,832
|
|
|||||
|
|
Other Benefits
|
|
—
|
|
|
23,206
|
|
|
—
|
|
|
150,000
|
|
|
23,206
|
|
|||||
|
|
Total
|
|
2,453,832
|
|
|
5,499,900
|
|
|
4,524,694
|
|
|
4,674,694
|
|
|
9,141,038
|
|
Name and Address of Beneficial Owner
|
|
Amount
Beneficially
Owned
|
|
Percent
of Class
|
|||
FMR LLC and Abigail P. Johnson
|
|
|
|
|
|
||
245 Summer Street
|
|
|
|
|
|
||
Boston, Massachusetts 02210
|
|
17,730,635
|
|
(1)
|
|
9.3
|
%
|
BlackRock, Inc.
|
|
|
|
|
|
||
55 East 52nd Street
|
|
|
|
|
|
||
New York, NY 10055
|
|
15,896,799
|
|
(2)
|
|
8.3
|
%
|
The Vanguard Group
|
|
|
|
|
|
||
100 Vanguard Blvd
|
|
|
|
|
|
||
Malvern, PA 19355
|
|
14,292,576
|
|
(3)
|
|
7.5
|
%
|
T. Rowe Price Associates, Inc.
|
|
|
|
|
|
||
100 E. Pratt Street
|
|
|
|
|
|
||
Baltimore, MD 21202
|
|
10,007,984
|
|
(4)
|
|
5.2
|
%
|
Name of Individual or Group
|
|
Shares
Owned
|
|
|
|
Right to Acquire Ownership
Under Options Exercisable
Within 60 Days
|
|
|
Total
|
|
|
Percent
of Class
|
|
Thomas L. Ryan
|
|
1,595,309
|
|
|
|
2,352,333
|
|
|
3,947,642
|
|
|
2.0
|
%
|
Michael R. Webb
|
|
723,853
|
|
|
|
1,182,666
|
|
|
1,906,519
|
|
|
1.0
|
%
|
Eric D. Tanzberger
|
|
201,354
|
|
|
|
405,966
|
|
|
607,320
|
|
|
*
|
|
Sumner J. Waring, III
|
|
333,994
|
|
|
|
273,965
|
|
|
607,959
|
|
|
*
|
|
R. L. Waltrip
|
|
1,745,059
|
|
(1)
|
|
—
|
|
|
1,745,059
|
|
|
*
|
|
Alan R. Buckwalter
|
|
109,343
|
|
|
|
—
|
|
|
109,343
|
|
|
*
|
|
Anthony L. Coelho
|
|
77,517
|
|
|
|
—
|
|
|
77,517
|
|
|
*
|
|
Victor L. Lund
|
|
203,751
|
|
|
|
—
|
|
|
203,751
|
|
|
*
|
|
John W. Mecom, Jr.
|
|
116,000
|
|
|
|
—
|
|
|
116,000
|
|
|
*
|
|
Clifton H. Morris, Jr.
|
|
198,782
|
|
(2)
|
|
—
|
|
|
198,782
|
|
|
*
|
|
Ellen Ochoa
|
|
20,477
|
|
|
|
—
|
|
|
20,477
|
|
|
*
|
|
W. Blair Waltrip
|
|
1,628,828
|
|
(3)
|
|
—
|
|
|
1,628,828
|
|
|
*
|
|
Marcus A. Watts
|
|
66,600
|
|
|
|
—
|
|
|
66,600
|
|
|
*
|
|
Edward E. Williams
|
|
164,932
|
|
|
|
—
|
|
|
164,932
|
|
|
*
|
|
Executive Officers and Directors as a Group (17 persons)
|
|
7,007,490
|
|
|
|
4,947,262
|
|
|
11,954,752
|
|
|
6.2
|
%
|
PROPOSAL 4
|
The Board of Directors recommends a vote of "EVERY ONE YEAR" on this proposal.
|
PROPOSAL 5
|
(1)
|
explicitly allow non-employee directors to be eligible participants thereunder,
|
(2)
|
add provisions giving non-employee directors the right to receive shares of common stock under the 2016 Plan and to set a maximum limit of $300,000 on the value of the annual equity retainer award that may be issued to each non-employee director, and,
|
(3)
|
increase the shares available for issuance under the 2016 Plan by approximately 410,000 shares (representing the deferred shares plus the net remaining shares available under the Service Corporation International Amended and Restated Director Fee Plan).
|
•
|
If an employee is employed by the Company on the date the Change of Control occurs and his or her employment is, within the twenty-four (24) month period commencing on the effective date of such Change of Control, involuntarily terminated, then immediately prior to such termination (i) each Award granted under this Plan to the employee shall become immediately vested and fully exercisable and any restrictions applicable to the Award shall lapse, and (ii) if the Award is an Option or SAR, the Award shall remain exercisable until the expiration of the remaining term of the Award;
|
•
|
If any Award is a Performance Grant, then each of the Performance Criteria shall be deemed to be satisfied at the target payment level as of the date the Change of Control occurs. If the Performance Grant requires continued service with the Company through a designated vesting date, then such Award shall be treated in the same manner as a Restricted Stock Unit award and the Performance Grant shall be paid at the target payment level on the date or dates, as applicable,
|
The Board of Directors recommends a vote "FOR" the approval of the Amended and Restated 2016 Equity Incentive Plan.
|
PROPOSAL 6
|
•
|
An average Director tenure of nearly 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 19 years.
|
•
|
Three former executives on the board.
|
•
|
Six out of eight independent board members with professional ties to Houston where the company is headquartered, including the three most recent appointees.
|
•
|
Excessive Director compensation with median independent director pay of $384,000, which is 42% higher than the S&P500 median of $270,000, even though SCI is an S&P400 midcap company; and chairman emeritus compensation of $952,000.
|
•
|
Two directors from the founding Waltrip family, even though the family holds less than 1% of the Company's stock.
|
•
|
An MSCI GMI Analyst Governance rating of D.
|
A.
|
Lead Director
|
•
|
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.
|
B.
|
Chairman and Chief Executive Officer
|
C.
|
Independent Directors
|
•
|
Mr. R. L. Waltrip, our former chairman, stepped down in 2015 and no longer receives long-term incentive compensation grants.
|
•
|
Our Board refreshment program resulted in the election of a new member, Dr. Ellen Ochoa, in 2015.
|
•
|
Our Board remains committed to adding new Directors to enhance our Board with diverse viewpoints, backgrounds, and expertise.
|
•
|
The Board recently updated and modified its compensation practices (see the Director Compensation section of this Proxy Statement).
|
The Board of Directors recommends a vote "AGAINST" the proposal.
|
PROPOSAL 7
|
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)
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
Net Income
|
|
|
Diluted EPS
|
|
|
Net Income
|
|
|
Diluted EPS
|
|
|
Net Income
|
|
|
Diluted EPS
|
|
||||||
Net income attributable to common stockholders, as reported
|
|
$
|
177.0
|
|
|
$
|
0.90
|
|
|
$
|
233.8
|
|
|
$
|
1.14
|
|
|
$
|
172.5
|
|
|
$
|
0.81
|
|
Pre-tax reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Impact of divestitures and impairment charges, net
|
|
26.8
|
|
|
0.14
|
|
|
(6.0
|
)
|
|
(0.02
|
)
|
|
(113.5
|
)
|
|
(0.53
|
)
|
||||||
Losses on early extinguishment of debt
|
|
22.5
|
|
|
0.11
|
|
|
6.9
|
|
|
0.03
|
|
|
29.7
|
|
|
0.14
|
|
||||||
Acquisition and integration costs
|
|
5.5
|
|
|
0.03
|
|
|
3.0
|
|
|
0.01
|
|
|
45.5
|
|
|
0.21
|
|
||||||
System transition costs
|
|
12.0
|
|
|
0.06
|
|
|
3.8
|
|
|
0.02
|
|
|
9.5
|
|
|
0.04
|
|
||||||
Pension termination settlement/Legal settlement
|
|
5.6
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|
0.06
|
|
||||||
Tax reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax benefit from special items
|
|
(17.2
|
)
|
|
(0.09
|
)
|
|
(2.3
|
)
|
|
(0.01
|
)
|
|
77.8
|
|
|
0.37
|
|
||||||
Change in certain tax reserves and other
|
|
20.9
|
|
|
0.11
|
|
|
3.0
|
|
|
0.01
|
|
|
3.2
|
|
|
0.01
|
|
||||||
Adjusted earnings from continuing operations and adjusted diluted earnings per share from continuing operations
|
|
$
|
253.1
|
|
|
$
|
1.29
|
|
|
$
|
242.2
|
|
|
$
|
1.18
|
|
|
$
|
237.0
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted weighted average shares outstanding (in thousands)
|
|
|
|
196,042
|
|
|
|
|
204,450
|
|
|
|
|
214,200
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Cash Flow
(In Millions)
|
|
Twelve Months Ended
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by operating activities, as reported
|
|
$
|
463.6
|
|
|
$
|
472.2
|
|
|
$
|
317.4
|
|
Premiums paid on early extinguishment of debt
|
|
20.5
|
|
|
6.5
|
|
|
24.8
|
|
|||
Acquisition, integration, and system transition costs
|
|
11.7
|
|
|
6.6
|
|
|
62.2
|
|
|||
Excess tax benefits from share-based awards
|
|
12.7
|
|
|
18.1
|
|
|
30.1
|
|
|||
Payments related to tax structure changes or divestitures
|
|
—
|
|
|
10.5
|
|
|
63.8
|
|
|||
Legal defense fees
|
|
—
|
|
|
—
|
|
|
10.3
|
|
|||
Adjusted operating cash flow
|
|
$
|
508.5
|
|
|
$
|
513.9
|
|
|
$
|
508.6
|
|
|
|
|
|
|
|
|
||||||
Cash tax payments
|
|
112.6
|
|
|
93.0
|
|
|
42.0
|
|
|||
Adjusted operating cash flow before cash tax payments
|
|
$
|
621.1
|
|
|
$
|
606.9
|
|
|
$
|
550.6
|
|
Adjusted Return on Equity
(In Millions)
|
|
Twelve Months Ended
December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income attributable to common stockholders, as reported
|
|
$
|
177.0
|
|
|
$
|
233.8
|
|
|
$
|
172.5
|
|
|
|
|
|
|
|
|
||||||
Adjusted earnings from continuing operations (see adjusted EPS reconciliation above)
|
|
253.1
|
|
|
242.2
|
|
|
237.0
|
|
|||
|
|
|
|
|
|
|
||||||
Total common stockholders' equity, as reported
|
|
1,092.7
|
|
|
1,184.7
|
|
|
1,368.7
|
|
|||
Average equity
|
|
1,138.7
|
|
|
1,276.7
|
|
|
1,419.4
|
|
|||
|
|
|
|
|
|
|
||||||
Add special items (see adjusted EPS reconciliation above)
|
|
76.1
|
|
|
8.4
|
|
|
64.6
|
|
|||
Less accumulated other comprehensive income
|
|
16.5
|
|
|
6.2
|
|
|
59.4
|
|
|||
|
|
|
|
|
|
|
||||||
Adjusted common stockholders' equity
|
|
1,152.3
|
|
|
1,186.9
|
|
|
1,373.9
|
|
|||
Average adjusted equity
|
|
1,169.6
|
|
|
1,280.4
|
|
|
1,403.6
|
|
|||
|
|
|
|
|
|
|
||||||
Return on equity
|
|
15.5
|
%
|
|
18.3
|
%
|
|
12.2
|
%
|
|||
Adjusted return on equity
|
|
21.6
|
%
|
|
18.9
|
%
|
|
16.9
|
%
|
|||
|
|
|
|
|
|
|
||||||
2013 items to calculate average equity:
|
|
|
|
|
|
|
||||||
Total common stockholders' equity, as reported
|
|
$
|
1,470.1
|
|
|
|
|
|
||||
Special items adjusted from EPS
|
|
51.5
|
|
|
|
|
|
|||||
Accumulated other comprehensive income
|
|
88.4
|
|
|
|
|
|
|||||
Adjusted common stockholders' equity
|
|
$
|
1,433.2
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
Annex B: 2016 Peer Group
|
ABERCROMBIE & FITCH CO.
|
|
EDWARDS LIFESCIENCES CORP.
|
|
MURPHY OIL CORPORATION
|
|
ADT CORP.
|
*
|
ENDO INTERNATIONAL PLC.
|
|
NOBLE ENERGY, INC.
|
|
AGILENT TECHNOLOGIES INC.
|
*
|
EP ENERGY CORP.
|
|
OUTERWALL INC.
|
|
ALEXION PHARMACEUTICALS INC.
|
|
EQT CORPORATION
|
|
PATTERSON COMPANIES INC.
|
|
AMERICAN TOWER CORPORATION
|
|
EQUIFAX INC.
|
*
|
PERKINELMER INC.
|
*
|
ANN INC.
|
|
EQUINIX, INC.
|
|
PITNEY BOWES INC.
|
|
APOLLO EDUCATION GROUP, INC.
|
|
EQUITY RESIDENTIAL
|
|
POLARIS INDUSTRIES INC.
|
|
ARCH COAL INC.
|
|
EXPRESS INC.
|
|
POPULAR INC.
|
|
ASCENA RETAIL GROUP INC.
|
|
EXTERRAN HOLDINGS INC
|
|
PROLOGIS INC.
|
*
|
ASPEN INSURANCE HLDGNS LTD.
|
*
|
FIRST AMERICAN FINANCIAL CORP
|
*
|
RANGE RESOURCES CORP.
|
|
BELK INC.
|
|
FOSSIL GROUP, INC.
|
|
REGENERON PHARMACEUTICALS
|
|
BON-TON STORES INC.
|
|
GARMIN LTD.
|
|
RENT-A-CENTER INC.
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BRINKS CO.
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*
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GENERAL GROWTH PROP, INC.
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SOUTHWESTERN ENERGY CO.
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BROOKDALE SENIOR LIVING INC.
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GENESIS ENERGY LP
|
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STEELCASE INC.
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C. R. BARD
|
*
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GNC HOLDINGS INC.
|
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SYMETRA FINANCIAL CORP.
|
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BRUNSWICK CORPORATION
|
*
|
GRAHAM HOLDINGS COMPANY
|
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TD AMERITRADE HOLDINGS CORP.
|
*
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CABELA’S INCORPORATED
|
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H&R BLOCK INC.
|
*
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TEEKAY CORP.
|
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CARTER'S, INC.
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HASBRO INC.
|
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TETRA TECH INC.
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CHICO’S FAS INC.
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HCC INSURANCE HOLDINGS INC.
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THE NASDAQ OMX GROUP INC
|
*
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CHURCH & DWIGHT CO. INC.
|
*
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HELMERICH & PAYNE, INC.
|
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TIFFANY & CO.
|
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CINTAS CORPORATION
|
*
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HERMAN MILLER CORPORATION
|
*
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TORCHMARK CORPORATION
|
*
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CIT GROUP INC.
|
|
HNI CORPORATION
|
*
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TRIPLE-S MANAGEMENT CORP.
|
|
CME GROUP INC.
|
*
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HOSPIRA INC.
|
|
TRUEBLUE INC.
|
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CNO FINANCIAL GROUP, INC.
|
*
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INTUITIVE SURGICAL INC.
|
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TUPPERWARE BRANDS CORP
|
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COACH, INC.
|
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IRON MOUNTAIN INC.
|
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ULTA SALON, COSM & FRAG INC.
|
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CONSOL ENERGY INC.
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KEMPER CORPORATION
|
*
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VARIAN MEDICAL SYSTEMS INC.
|
*
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COTY, INC.
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KEYCORP.
|
*
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VENTUS INC.
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CRESCENT POINT ENERGY CORP.
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LEGG MASON INC.
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*
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VWR CORP.
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CROWN CASTLE INTL CORP.
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LEGGETT & PLATT, INCORPORATED
|
*
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WATERS CORP.
|
*
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DCP MIDSTREAM PARTNERS LP
|
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LPL FINANCIAL HOLDINGS INC.
|
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WILLIAMS-SONOMA INC.
|
|
DENTSPLY SIRONA INC.
|
*
|
MAGELLAN MIDSTREAM PTNRS LP
|
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WOLVERINE WORLD WIDE
|
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DEVRY EDUCATION GROUP INC.
|
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MALLINCKRODT PLC.
|
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WPX ENERGY, INC.
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DSW INC.
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MCDERMOTT INTERNATIONAL INC.
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ZIMMER BIOMET HOLDINGS INC.
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EDGEWELL PERSONAL CARE CO.
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MERCURY GENERAL CORP.
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ZOETIS INC.
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EDUCATION MANAGEMENT CORP.
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MSC INDUSTRIAL DIRECT
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*
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Annex C: Amended and Restated Equity Incentive Plan
|
(a)
|
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”)) (a “
Person
”), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of Common Stock of the Company (the “
Outstanding Company Common Stock
”), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “
Outstanding Company Voting Securities
”); provided, however, that the following acquisitions shall not constitute a Change of Control under this subsection (a): (1) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege), (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (4) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or
|
(b)
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Individuals who, as of the effective date hereof, constitute the Board (the “
Incumbent Board
”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Plan whose election, or nomination for election by the Company’s shareholders, was approved by (i) a vote of at least a majority of the directors then comprising the Incumbent Board, or (ii) a vote of at least a majority of the directors then comprising the Executive Committee of the Board at a time when such committee was comprised of at least five members and all members of such committee were either members of the Incumbent Board or considered as being members of the Incumbent Board pursuant to clause (i) of this subsection (b), shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
|
(c)
|
Approval by the shareholders of the Company of a reorganization, merger or consolidation, in each case, unless, following such reorganization, merger or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger or consolidation, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger or consolidation, and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or
|
(d)
|
Approval by the shareholders of the Company of (i) a complete liquidation or dissolution of the Company, or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (A) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such corporation, and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.
|
(a)
|
Distribution of a Director Unit Account to a Director is intended to begin after termination of service as a Director, whether through retirement or otherwise, unless a Director has indicated in such Director’s Annual Election a specified date for such distribution to occur. If a Director has selected the distribution of the Director Unit Account to begin after termination of service as a Director, distributions shall commence on June 15 following a Director’s termination of service, unless such distribution is required to be delayed under Section 409A, in which case such distribution shall commence at the time this statutory delay has expired.
|
(b)
|
In each Annual Election, a Director shall elect the manner of distributions from the Director Unit Account for that Annual Election. For periods commencing on or after August 1, 2017, an Annual Election shall permit payment as either (i) in a single lump sum payment, or (ii) in approximately equal annual installments over a period of up to 5 years. A failure to timely make such election shall result in a single lump sum payment with respect to that Annual Election.
|
(c)
|
Distributions from a Director Unit Account shall be made in whole shares of Stock based on the number of shares equal to the whole number of Director Deferred Units credited to the Director Unit Account. No fractional shares shall be distributed and any account balance remaining after a distribution of Stock shall be paid in cash.
|
(d)
|
Distributions from a Director Unit Account shall be made in accordance with the Director’s Annual Elections. A Director may request that the time or manner of distribution selected in previously executed Annual Elections be changed. Any request by a Director to change the time/manner of such previously selected distribution must comply with the following:
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KEEP THIS PORTION FOR YOUR RECORDS
|
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DETACH AND RETURN THIS PORTION ONLY
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SERVICE CORPORATION INTERNATIONAL
PROXY SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
For The Annual Meeting of Shareholders May 10, 2017
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 10, 2017, 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 and 3; FOR 1 Year on proposal 4; FOR proposal 5; and AGAINST proposals 6 and 7.
Continued and to be signed on reverse side
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