AS FILED WITH THEAs filed with the Securities and Exchange Commission on April 4, 2014
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
ON OCTOBER 26, 1999 REGISTRATION NO. 333-84141 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.Washington, DC 20549
------------------------ AMENDMENT NO. 1 TOFORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------CARRIAGE SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OR OTHER JURISDICTION OF 76-6152006 INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 1300 POST OAK BLVD, SUITE 1500 HOUSTON, TEXAS(Exact Name of Registrant as Specified in its Charter)
Delaware | 76-0423828 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
3040 Post Oak Blvd., Suite 300
Houston, Texas 77056
(281) 556-7400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CARRIAGE SERVICES CAPITAL TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1300 POST OAK BLVD, SUITE 1500
HOUSTON, TEXAS 77056
(281) 556-7400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MELVIN C. PAYNE
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
(281) 556-7400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
T. MARK KELLY
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
HOUSTON, TEXAS 77002-6760
(713) 758-2222
(713) 758-2346 (FAX)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable332-8400
Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)
Copies to:
L. William Heiligbrodt Executive Vice President and Secretary 3040 Post Oak Blvd., Suite 300 Houston, Texas 77056 (713) 332-8400 | Kevin P. Lewis Vinson & Elkins L.L.P. 1001 Fannin Street, Suite 2500 Houston, TX 77002 (713) 758-2222 | |
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) |
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement becomes effective.
Statement.
If the only securities being registered on this Form are beingto be offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ]
¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ]
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
¨
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434,
please462(e) under the Securities Act, check the following box. [ ]
¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
CALCULATION OF REGISTRATION FEE
| ||||
Title of Each Class of Securities to be Registered | Proposed Maximum Aggregate Offering Price (1)(2) | Amount of Registration Fee (3) | ||
Senior Debt Securities and Subordinated Debt Securities | — | — | ||
Common Stock, par value $.01 per share | — | — | ||
Preferred Stock, par value $.01 per share | — | — | ||
Warrants | — | — | ||
Total | $350,000,000 | $45,080 | ||
| ||||
|
(2) | There is being registered hereunder such indeterminate number or amount of senior and subordinated debt securities, common stock, preferred stock and warrants as may from time to time be issued at indeterminate prices and as may be issuable upon conversion, redemption, exchange, exercise or settlement of any securities registered hereunder, including under any applicable anti-dilution provisions. |
(3) | Securities registered under Registration Statement No. 333-171711, initially filed by the registrant on January 14, 2011, remain unsold. Pursuant to Rule 457(p) of the Securities Act, the filing fee of $26,703 previously paid in connection with such unsold securities is being used to offset the registration fee currently due. As a result, a filing fee of $18,377 is being paid herewith. |
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Rule 457(c)Section 8(a) of the Securities Act of 1933, as amended, based upon
the average of the high and low prices on July 29, 1999. The total
registration fee due in connection withor until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is $26,584. $26,063 of the registration fee, which was calculated based upon an
incorrect offering price per security, was previously paid by the
registrants.
(2) Exclusive of accrued interestnot complete and distributions, if any.
(3) $93,750,000 in aggregate principal amount of Convertible Junior Subordinated
Debentures due 2029 (the "Convertible Junior Subordinated Debentures") of
Carriage Services, Inc. (the "Company") were issued and sold to Carriage
Services Capital Trust (the "Trust") in connection with the issuance by
the Trust of 1,875,000 of its 7% Convertible Preferred Securities (the
"Convertible Preferred Securities"). The Convertible Junior Subordinated
Debentures may be distributed, under certain circumstances, to the holders
of the Convertible Preferred Securities for no additional consideration.
(4) Such number of shares of Class A Common Stock, par value $.01 per share, of
the Company (the "Class A Common Stock") as are initially issuable upon
conversion of the Convertible Preferred Securities or the Convertible Junior
Subordinated Debentures registered hereunder. This Registration Statement
also covers such shares of Class A Common Stock aschanged. We may be issuable pursuant
to anti-dilution adjustments.
(5) Includes the rights of holders of the Convertible Preferred Securities under
the Preferred Securities Guarantee. No separate consideration will be
received for the Preferred Securities Guarantee.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING HOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES, IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 26, 1999
PROSPECTUS
1,875,000 CONVERTIBLE PREFERRED SECURITIES
CARRIAGE SERVICES CAPITAL TRUST
7% Convertible Preferred Securities
(liquidation amount $50 per Convertible Preferred Security)
guaranteed by, and convertible into Class A Common Stock of,
CARRIAGE SERVICES, INC.
------------------------
The Selling Holders may offer, from time to time:
o 7% convertible preferred securities of Carriage Services Capital
Trust
o convertible junior subordinated debentures due 2029 of Carriage
Services, Inc.
o shares of Class A common stock of Carriage Services, Inc.
Carriage Services Capital Trust is a Delaware business trust. The 7%
convertible preferred securities represent undivided beneficial ownership
interests in the assets of Carriage Services Capital Trust.
The Selling Holders maynot sell these securities from timeuntil the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to time directly to
purchasers or through agents, underwriters or dealers. If required, the names of
any other Selling Holders, agents or underwriters involved in the sale ofsell these securities and the applicable agent's commission, dealer's purchase price or
underwriter's discount, if any, will be set forth in a supplement to this
prospectus.
YOU SHOULD CAREFULLY CONSIDER MATTERS DISCUSSED UNDER THE CAPTION "RISK
FACTORS" BEGINNING ON PAGE 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectusit is , 1999
TABLE OF CONTENTS
PAGE
----
About this prospectus................ ii
Where you can find more
information........................ ii
Cautionary statement about forward-
looking statements................. iii
The Company.......................... 1
Risk factors......................... 2
Use of proceeds...................... 7
Accounting treatment................. 7
Ratios of earnings to fixed charges
and earnings to fixed charges plus
dividends.......................... 7
Carriage Services Capital Trust...... 8
Description of Convertible Preferred
Securities......................... 9
PAGE
----
Description of Convertible Junior
Subordinated Debentures............ 28
Description of Guarantee............. 36
Relationship among the Convertible
Preferred Securities, the
Convertible Junior Subordinated
Debentures and the Guarantee....... 39
Description of Company capital
stock.............................. 40
Federal income tax consequences...... 43
Certain ERISA considerations......... 50
Registration rights.................. 51
Selling holders...................... 52
Plan of distribution................. 55
Legal matters........................ 56
Experts.............................. 56
i
AS USED IN THIS PROSPECTUS, (I) THE "INDENTURE" MEANS THE CONVERTIBLE
JUNIOR SUBORDINATED INDENTURE, BETWEEN THE COMPANY AND WILMINGTON TRUST COMPANY,
AS TRUSTEE (THE "DEBENTURE TRUSTEE") RELATING TO CARRIAGE SERVICES CAPITAL
TRUST (THE "TRUST" OR THE "ISSUER"), (II) THE "DECLARATION" MEANS THE
AMENDED AND RESTATED DECLARATION OF TRUST RELATING TO THE ISSUER AMONG CARRIAGE
SERVICES, INC. (THE "COMPANY"), AS DEPOSITOR (THE "DEPOSITOR"), WILMINGTON
TRUST COMPANY AS PROPERTY TRUSTEE (THE "PROPERTY TRUSTEE"), WILMINGTON TRUST
COMPANY AS DELAWARE TRUSTEE (THE "DELAWARE TRUSTEE"), AND THE INDIVIDUALS
NAMED AS ADMINISTRATIVE TRUSTEES THEREIN (THE "ADMINISTRATIVE TRUSTEES")
(COLLECTIVELY WITH THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE, THE "ISSUER
TRUSTEES") AND (III) THE "GUARANTEE" MEANS THE GUARANTEE AGREEMENT BETWEEN
THE COMPANY AND WILMINGTON TRUST COMPANY (THE "GUARANTEE TRUSTEE").
ABOUT THIS PROSPECTUS
This prospectus contains summaries, believed to be accurate in all material
respects, of terms of certain agreements. These summaries are qualified in their
entirety by reference to the actual agreements, copies of which will be made
available to you upon request to us. While any 7% convertible preferred
securities (the "Convertible Preferred Securities"), convertible junior
subordinated debentures due 2029 (the "Convertible Junior Subordinated
Debentures") or Class A common stock issued upon conversion of such securities
remain outstanding, we will make available, upon request, to any holder and any
prospective purchaser of such securities the information required pursuant to
Rule 144A(d)(4) under the Securities Act during any period in which we are not subject to Section 13 or 15(d) of the Exchange Act.
No separate financial statements of the Issuer have been included herein.
We do not consider such financial statements material to the holders of
Convertible Preferred Securities because:
o all of the voting securities of the Issuer will be owned, directly or
indirectly, by us, and we are subject to the reporting requirements
under the Exchange Act;
o the Issuer has no independent operations but exists for the sole
purpose of issuing securities representing undivided beneficial
interests in the assets of the Issuer and investing the proceeds
thereof in Convertible Junior Subordinated Debentures issued by us;
and
o the obligations of the Issuer under the Trust Securities are fully and
unconditionally guaranteed by us to the extent that the Issuer has
funds available to meet such obligations. See "Description of
Convertible Junior Subordinated Debentures" and "Description of
Guarantee."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC located at
7 World Trade Center, Suite 1300, New York, New York 10048 and at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain information
on the operation of the SEC's public reference room in Washington, D.C. by
calling the SEC at 1-800-SEC-0330. We also file such information with the New
York Stock Exchange (the "NYSE"). Such reports, proxy statements and other
information may be read and copied at 30 Broad Street, New York, New York 10005.
In this prospectus we have incorporated by reference certain reports and
other information we have filed with the SEC. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any further filings made
ii
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act until
all of the securities are sold or this offering is terminated:
o Our Annual Report on Form 10-K for the year ended December 31, 1998;
o Our Current Reports on Form 8-K, filed April 13, 1999 and June 1,
1999;
o Our Current Report on Form 8-K/A, filed on June 11, 1999;
o Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999; and
o The description of our common stock contained in our Form 8-A dated
July 23, 1996 (as amended August 8, 1996) and April 28, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Carriage Services, Inc.
Attention: Investor Relations
1300 Post Oak Blvd., Suite 1500
Houston, Texas 77056
(281) 556-7400
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with different information. We are not makingsoliciting an offer ofto buy these securities in any state where the offer or sale is not permitted.
Prospectus
SUBJECT TO COMPLETION, DATED APRIL 4, 2014
CARRIAGE SERVICES, INC.
$350,000,000
Debt Securities
Preferred Stock
Common Stock
Warrants
This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a supplement to this prospectus that contains specific information about the offering. The supplement may also add, update or change information contained in this prospectus. You should carefully read this prospectus, all prospectus supplements and all other documents incorporated by reference in this prospectus before you invest in our securities. Our common stock is quoted on the New York Stock Exchange under the symbol “CSV.”
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISKS. RISKS ASSOCIATED WITH AN INVESTMENT IN OUR SECURITIES WILL BE DESCRIBED IN THE APPLICABLE PROSPECTUS SUPPLEMENT AND OUR PERIODIC AND OTHER REPORTS WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AS DESCRIBED IN “RISK FACTORS” ON PAGE 4. YOU SHOULD CAREFULLY CONSIDER THOSE RISK FACTORS BEFORE INVESTING.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2014.
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i
This prospectus is part of a “shelf” registration statement that we filed with the Securities and Exchange Commission (the “SEC”). Under this registration statement, we may sell any combination of the securities described in this prospectus from time to time in one or more offerings with an aggregate offering price of up to $350,000,000. This prospectus provides you with a general description of the securities we may offer. As permitted by the rules of the SEC, this prospectus does not contain all the information set forth in the registration statement. Each time we sell securities, we will provide a supplement to this prospectus that will contain specific information about the terms of that offering. That prospectus supplement may also add, update or change information contained in this prospectus. Before purchasing any securities, you should carefully read both this prospectus and any applicable prospectus supplement, together with the additional information described in this prospectus under the headings “Where You Can Find More Information” and “Incorporation by Reference.”
You should rely only on the information contained in this prospectus and in any applicable prospectus supplement, including any information incorporated by reference. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should not assume that the information appearing in this prospectus, any prospectus supplement or any document incorporated by reference is accurate as ofat any date other than as of the date of each such document. Our business, financial condition, results of operations and prospects may have changed since the date indicated on the frontcover page of thosesuch documents.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
The distribution of this prospectus may be restricted by law in certain jurisdictions. You should inform yourself about and observe these restrictions. This prospectus does not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which the documentsoffer or solicitation is not authorized, or in which the person making the offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make the offer or solicitation.
When used in this prospectus or in any supplement to this prospectus, the terms “Carriage,” the “Company,” “we,” “our” and “us” refer to Carriage Services, Inc. and its subsidiaries, unless otherwise indicated or the context otherwise requires.
We were incorporated in the State of Delaware in December of 1993 and are a leading provider of deathcare services and merchandise in the United States. We operate in two business segments: funeral home operations, which currently account for approximately 75% of our total revenue, and cemetery operations, which currently account for approximately 25% of our total revenue. At December 31, 2013, we operated 161 funeral homes in 26 states and 32 cemeteries in 10 states. We mainly serve suburban and rural markets, where we primarily compete with smaller, independent operators and believe we are a market leader (first or second) in most of our markets. We provide funeral and cemetery services and products on both an “at-need” (time of death) and “preneed” (planned prior to death) basis.
Our operations are reported in two business segments:
Funeral Home Operations. Funeral homes are principally service businesses that provide funeral services (traditional burial and cremation) and sell related merchandise, such as caskets and urns. Given the high fixed cost structure associated with funeral home operations, we believe the following key factors affect our profitability:
Cemetery Operations. Cemeteries are primarily a sales business providing interment rights (grave sites and mausoleums) and related merchandise, such as markers and memorials. Our cemetery operating results are impacted by the size and success of our sales organization, as approximately 48% of our cemetery revenues during the year ended December 31, 2013 were generated from preneed sales of interment rights and related merchandise and services. We believe that changes in the economy and consumer confidence may impact the amount of preneed cemetery revenues. Cemetery revenues generated from at-need service and merchandise sales generally are subject to many of the same key profitability factors as our funeral home business. Approximately 19% of our cemetery revenues during the year ended December 31, 2013 were attributable to investment earnings on trust funds and finance charges on installment contracts. Changes in the capital markets and interest rates affect this component of our cemetery revenues, along with changes that we make in the investment securities within the trust funds.
Our business strategy is based on strong, local leadership and entrepreneurial principles that we believe drive market share, revenue growth, and profitability in our local markets. The business strategy is executed through our “Standards Operating Model,” a decentralized and entrepreneurial operating model for our funeral home and cemetery businesses. To date, our Standards Operating Model has driven significant changes in our organization, leadership and operating practices. We use the Standards Operating Model to measure the sustainable revenue growth and earning power of our portfolio of deathcare businesses. Our Standards Operating Model emphasizes growing market share and improving long-term profitability by employing leadership and entrepreneurial principles that fit the nature of our local, personal service, high value business. Leadership qualities are evaluated using the 4E leadership characteristics – Energy, Energize Others, Edge and Execution. This model requires our local and corporate leaders to focus on the drivers of success that create long-term profitability and value for our stockholders. Our Standards Operating Model emphasizes:
Our business objectives include:
Additional information concerning our business and operations is incorporated by reference herein from our other filings made with the Securities and Exchange Commission and may be included in applicable prospectus supplements and any pricing supplements.
Our corporate offices are located at 3040 Post Oak Blvd., Suite 300, Houston, Texas 77056, and our telephone number is (713) 332-8400.
Investment in our securities subjects a shareholder to uncertainties and risks. Investors should carefully consider and evaluate all of the information included or incorporated by reference in this prospectus, including the risk factors described in our most recent annual report on Form 10-K, financial statements and related notes updated by our quarterly reports on Form 10-Q, as well as other SEC filings filed after such annual report. Our business, financial condition, liquidity or results of operations have the potential to be materially adversely affected if any of the risks were to actually occur.
Certain matters discussed in this prospectus, except for historical information contained here but including the information we incorporate by reference, contain
statements that constitute "forward-looking statements"are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act. These
statements appear in a numberAct of places1934, as amended (the “Exchange Act”). When used in this prospectus, words such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “plans,” “projects,” and similar expressions, as they relate to our Company or management, identify forward-looking statements. These statements include any projections of earnings, revenues, asset sales, cash flow, debt levels or other financial items; any statements of the documents we
incorporate by referenceplans, strategies and includeobjectives of management for future operation; any statements regarding our plans, beliefsfuture economic conditions or current expectations, including those plans, beliefsperformance; any statements of belief; and expectationsany statements of our
officers and directors with respect to, among other things:
o future acquisitions;
o expected future cost savings;
o future capital expenditures;
o trends affecting our future financial condition or resultsassumptions underlying any of operations; and
o our business strategy regarding future operations.
Any such forward-lookingthe foregoing. These statements are not assurancesbased on certain assumptions made by us based on management’s experience and perception of historical trends, industry conditions, market position, future performanceoperations, profitability, liquidity, capital resources and involveother factors believed to be appropriate. Management’s expectations and assumptions regarding our operations and other anticipated future developments are subject to risks, uncertainties and uncertainties. Actualother factors that could cause actual results mayto differ materially from the anticipated results.
The information contained in this prospectus, including the information set
forth under the heading "Risk Factors," identifies additional factors that
could affect our operating results and performance. We urge you to carefully
consider those factors.
All forward-looking statements attributable to us are expressly qualified
in their entirety by this cautionary statement.
iii
THE COMPANY
We are the fastest-growing and the fourth largest public death care company
in North America. We believe we are uniquely positioned to take advantage of the
consolidating death care industry due to our operating philosophy and our size.
We provide a complete range of services relating to funerals, burials and
cremations, as well as related products including caskets, burial vaults,
garments, cemetery interment rights and memorials. Our services and products are
sold both prior to and at the time of need.
Since 1993, our operations have grown significantly, primarily through
acquisitions. These acquisitions, in addition to our focus on operating
improvements, have driven our revenues, profit margins and earnings higher. Our
growth has been demonstrated by increasesor other expectations expressed in the following:
o Funeral homes operated, from 25 in 1993 to 181 at September 30, 1999;
o Cemeteries operated, from 2 in 1993 to 44 at September 30, 1999;
o Revenues, from $11.3 million for the year ended 1993 to $116.8 million
for the year ended December 31, 1998;
o Operating margins, from 0.7% for the year ended 1993 to 22.9% for the
year ended December 31, 1998; and
o Diluted earnings per share, from a $0.66 loss for the year ended 1993
to a $0.65 profit for the year ended December 31, 1998.
THE INDUSTRY
The death care industry has attractive fundamental characteristics,
including highly fragmented ownership, barriers to entry and stable, predictable
demand. In the past several years, the industry has witnessed considerable
consolidation, yet less than 25% of the 1998 United States death care industry
revenues are represented by the four publicly traded death care companies.
Additionally, due to the recent acquisition of a fifth public competitor by
another competitor and announcements by the Company's two largest publicly held
competitors that they have significantly reduced their acquisition spending,forward-looking statements. Although we believe that the competitive landscape presents us with significant
opportunitiesexpectations reflected in such statements are reasonable, there is no assurance that such expectations will be correct. All of our forward-looking statements, whether written or oral, are expressly qualified by these cautionary statements and any other cautionary statements that may accompany such forward-looking statements. In addition, we disclaim any obligation to pursue various acquisition strategies at valuations that are
more attractive than those ofupdate any forward-looking statements to reflect events or circumstances after the recent past.
STRATEGY
Our business strategy is to build upon our reputation as a premier
operating company and to grow through attractive acquisition opportunities. Our
operating strategy is focused on increasing the revenues and profitability of
each operating location through improved personalized local service and
operating efficiencies. Our acquisition strategy emphasizes both geographic
expansion and concentration of existing operations through the acquisition of
premier funeral homes and cemeteries that have a strong local market presence.
Since our formation in 1991, our management team has focused on developing
an operating philosophy that emphasizes:
o providing the highest level of personalized service to client
families;
o comprehensive employee training;
o a decentralized management structure;
o establishing high standards of service, operational and financial
performance;
o measuring performance against such standards; and
o incentive compensation and broad-based employee stock ownership.
We believe our successful executiondate of this operating philosophy, combined
with fewer active public consolidators in the industry, will result in an
increasing number of highly attractive acquisition opportunities.
1
In 1998,prospectus.
Unless we acquired 48 funeral homes and seven cemeteries for an aggregate
consideration of approximately $159 million. In addition, through September 30,
1999, we have either acquired or executed non-binding letters of intent to
acquire 19 funeral homes and 14 cemeteries for consideration of approximately
$46 million.
Our principal executive office is located at 1300 Post Oak Blvd., Suite
1500, Houston, Texas 77056. Our telephone number is (713) 556-7400.
RECENT DEVELOPMENT
In October 1999, the Company loaned $1.2 million to the Company's Chairman
and Chief Executive Officer. The loan, which is unsecured, bears interest at the
rate of 5% per annum and is due November 30, 1999. Prior to the note's maturity,
the Company will consider its alternatives, which may include, among others,
repayment, extending its maturity, including it in a compensation package, or
some combination thereof.
RISK FACTORS
Prospective purchasers of the securities offered in this prospectus should
carefully review the information contained elsewhere in this prospectus and
should particularly consider the following matters.
RISKS RELATING TO THE COMPANY
WE MAY NOT BE ABLE TO IDENTIFY, FINANCE OR INTEGRATE ADDITIONAL ACQUISITIONS.
We have grown rapidly through acquisitions of funeral homes and cemeteries.
Although we believe we have an adequate infrastructure, we cannot assureinform you
that our current management, personnel and other corporate infrastructure will
be adequate to manage our growth. In addition, to the extent the success of our
strategy is contingent on making further acquisitions, we cannot assure you that
we will be able to identify and acquire acceptable acquisition candidates on
terms favorable to us or that we will be able to integrate such acquisitions
successfully without substantial costs, delays or other operational or financial
problems. Further, acquisitions involve a number of special risks, including
possible adverse effects on our operating results, diversion of management's
attention, failure to retain key acquired personnel, risks associated with
unanticipated events or liabilities and amortization of acquired intangible
assets, some or all of which could have a material adverse effect on our
business, financial condition and results of operations. In addition, to the
extent we are required to write down goodwill associated with acquisitions due
to a decline in the value of such acquired businesses, such write down could
have a material adverse effect on operating results.
We may finance future acquisitions through the incurrence of additional
bank indebtedness, the utilization of cash from operations, the issuance of
Class A common stock or other securities, or any combination thereof. In the
event that the Class A common stock does not maintain a sufficient market value,
or potential acquisition candidates are otherwise unwilling to accept Class A
common stock or other securities as part of the consideration for the sale of
their business, we may be required to utilize more of our cash resources or
available funds under our credit facility in order to finance future
acquisitions. If we do not have sufficient cash resources, our ability to make
acquisitions could be limited unless we are able to obtain additional capital
through debt or equity financings. We cannot assure you that we will be able to
obtain all the financing we will need in the future on terms we deem acceptable.
WE ARE DEPENDENT ON KEY EXECUTIVES AND PERSONNEL.
We depend to a large extent upon the abilities and continued efforts of
Melvin C. Payne, Chairman of the Board and Chief Executive Officer, Mark W.
Duffey, President, and our other senior management. The loss of the services of
the key members of our senior management could have a material adverse effect on
our continued ability to compete in the death care industry. We have entered
into employment agreements with our principal executive officers. Nonetheless,
our future success will depend upon our ability to attract and retain skilled
funeral home and cemetery management personnel.
2
CERTAIN STOCKHOLDERS CONTROL THE VOTING POWER.
Because our Class B common stock has ten votes per share, the holders of
Class B common stock control approximately 75% of our voting power. Through
their control of our Board of Directors, the holders of Class B common stock
effectively control the deferral of interest payments on the debentures, which
would result in the deferral of distributions on the Convertible Preferred
Securities. In addition, these stockholders are in a position to exert
substantial influence over the outcome of most corporate actions requiring
stockholder approval, including the election of directors, the future issuance
of common stock or other securities by us, the declaration of any dividend
payable on our common stock or future issuances of common stock and the approval
of transactions involving a change in control. The interests of this group could
conflict with the interests of our other stockholders.
A TAKEOVER WOULD BE DIFFICULT.
Certain provisions of our certificate of incorporation could make it more
difficult for a third party to acquire control of our company, even if such
change in control would be beneficial to stockholders. Our certificate of
incorporation allows us to issue preferred stock without stockholder approval.
Our certificate of incorporation also provides for a staggered board, limits who
may call special stockholders' meetings and limits stockholder action by written
consent. In addition, certain stockholders are party to a voting agreement which
prevents them from selling their shares to a competitor and requires them to
vote against a business combination with a competitor. These provisions could
make it more difficult for a third party to acquire us. See "Description of
Company Capital Stock."
THE RATE OF CREMATION IS INCREASING.
There is an increasing trend in the United States toward cremation.
According to industry studies, cremations represented approximately 24% of the
burials performed in the United States in 1997, as compared with approximately
10% in 1980. Compared to traditional funeral services, cremations have
historically generated similar gross profit percentages but lower revenues. A
substantial increase in the rate of cremations performed by us could have a
material adverse effect on our results of operations.
FEDERAL, STATE AND LOCAL REGULATIONS MAY CHANGE TO OUR DETRIMENT.
Our operations are subject to regulation, supervision and licensing under
numerous federal, state and local laws, ordinances and regulations, including
extensive regulations concerning trust funds, preneed sales of funeral and
cemetery products and services and various other aspects of our business. The
impact of such regulations varies depending on the location of our funeral homes
and cemeteries.
From time to time, states and other regulatory agencies have considered and
may enact additional legislation or regulations that could affect the death care
industry. For example, some states and regulatory agencies have considered or
are considering regulations that could require more liberal refund and
cancellation policies for preneed sales of products and services, prohibit
door-to-door or telephone solicitation of potential customers, increase trust
requirements and prohibit the common ownership of funeral homes and cemeteries
in the same market. If adopted in the states in which we operate, these and
other possible proposals could have a material adverse effect on our results of
operations.
THE DEATH RATE MAY DECREASE.
The death rate in the United States declined approximately 1% in 1997 and
approximately 2% in 1998, reversing a trend of an approximately 1% increase per
year since 1980. Industry studies indicate that the average age of the
population is increasing. Our financial results may be affected by any decline
in the death rate.
3
RISKS RELATING TO THE CONVERTIBLE PREFERRED SECURITIES
THE TRUST MAY NOT BE ABLE TO MAKE DISTRIBUTIONS ON THE CONVERTIBLE PREFERRED
SECURITIES IF THE COMPANY DEFAULTS ON ITS SENIOR DEBT BECAUSE ITS OBLIGATIONS TO
PAY ON THE DEBENTURES AND THE GUARANTEE ARE JUNIOR TO THE COMPANY'S PAYMENT
OBLIGATIONS UNDER ITS SENIOR DEBT.
Because of the subordinated nature of the guarantee and the debentures, the
Company:
o will not be permitted to make any payments of principal, including
redemption payments, or interest on the debentures if it defaults on
its senior debt, as described under "Description of Convertible
Junior Subordinated Debentures -- Subordination;"
o will not be permitted to make payments on the guarantee if it defaults
on any of its other liabilities, including senor debt, other than
liabilities that are equal or subordinate to the guarantee by their
terms as described under "Description of Guarantee -- Status of the
Guarantee;" and
o must pay all of its senior debt before it makes payments on the
Guarantee or the debentures if it becomes bankrupt, liquidates or
dissolves.
The Convertible Preferred Securities, the guarantee, and the debentures do
not limit the Company's ability or the ability of its subsidiaries to incur
additional indebtedness, including indebtedness that ranks senior to the
debentures and the guarantee. As of June 30, 1999, the Company had approximately
$170 million of senior debt.
THE DEBENTURES WILL BE EFFECTIVELY SUBORDINATED TO OBLIGATIONS OF THE COMPANY'S
SUBSIDIARIES.
Since the Company is principally a holding company, its right to
participate in any distribution of assets of any subsidiary upon that
subsidiary's dissolution, winding-up, liquidation or reorganization or otherwise
(and thus the ability of holders of the Convertible Preferred Securities to
benefit indirectly from the distribution), is subject to the prior claims of
creditors of that subsidiary, except to the extent that the Company may be a
creditor of that subsidiary and its claims are recognized. There are various
legal limitations on the extent to which some of the Company's subsidiaries may
extend credit, pay dividends or otherwise supply funds to, or engage in
transactions with, the Company or its other subsidiaries. The debentures will be
effectively subordinated to all indebtedness and other obligations of our
subsidiaries. Those subsidiaries are separate legal entities and have no
obligations to pay, or make funds available for the payment of, any amounts due
on the debentures, the Convertible Preferred Securities or the guarantee. At
June 30, 1999, our subsidiaries had total combined assets of $514 million, net
of receivables to the Company, and liabilities of $214 million, exclusive of net
payables to the Company.
THE COMPANY'S RIGHT TO DEFER INTEREST PAYMENTS ON THE DEBENTURES HAS TAX
CONSEQUENCES FOR YOU.
The Company can, on one or more occasions, defer interest payments on the
debentures for up to 20 consecutive quarterly periods unless an event of default
under the debentures has occurred and its continuing. The Company cannot,
however, defer interest payments beyond the earlier of the maturity date of the
debentures, which is June 1, 2029 or the date on which the debentures are
redeemed. If the Company defers interest payments on the debentures, the Trust
will also defer distribution payments on the Convertible Preferred Securities
and the Common Securities. During a deferral period, distributions will continue
to accumulate on the Convertible Preferred Securities.
If the Company defers payments of interest on the debentures, you will be
required to accrue interest income, as original issue discount, for the deferred
interest allocable to your share of Convertible Preferred Securities for United
States Federal income tax purposes. As a result, you will include that income in
gross income for United States Federal income tax purposes prior to your receipt
of any cash distributions. In addition, you will not receive cash from the trust
related to that income if you sell your Convertible Preferred Securities prior
to the record date on which those distributions are made. YOU SHOULD CONSULT
WITH YOUR OWN TAX ADVISOR REGARDING THE TAX
4
CONSEQUENCES OF AN INVESTMENT IN THE CONVERTIBLE PREFERRED SECURITIES. Please
read "Federal Income Tax Consequences -- Interest Income and Original Issue
Discount" and " -- Sales of Convertible Preferred Securities" for more
information regarding the tax consequences of holding and selling the
Convertible Preferred Securities.
THE COMPANY'S RIGHT TO DEFER INTEREST PAYMENTS ON THE DEBENTURES MAY AFFECT THE
MARKET PRICE OF THE CONVERTIBLE PREFERRED SECURITIES.
If the Company defers interest payments on the debentures in the future,
the market price of the Convertible Preferred Securities may not fully reflect
the value of accrued but unpaid interest on the debentures. If you sell
Convertible Preferred Securities during a deferral period, you may not receive
the same return on investment as someone who continues to hold Convertible
Preferred Securities. In addition, the Company's right to defer interest
payments on the debentures may mean that the market price for the Convertible
Preferred Securities will be more volatile than other securities that are not
subject to these rights.
THE TRUST MAY REDEEM THE CONVERTIBLE PREFERRED SECURITIES WITHOUT YOUR CONSENT
IF SPECIFIED TAX CHANGES OCCUR RELATING TO NON-DEDUCTIBILITY OF INTEREST
PAYMENTS ON THE DEBENTURES.
If specified tax changes occur relating to the non-deductibility of
interest payments on the debentures or if the Trust is at risk of being required
to register as an investment company under the Investment Company Act of 1940,
as more fully described under "Description of the Convertible Preferred
Securities -- Tax Event or Investment Company Event Redemption," the Company
may redeem all of the debentures. If that happens, the Trust will use the cash
it receives from the redemption of the debentures to redeem the Convertible
Preferred Securities and the Common Securities.
THE GUARANTEE ONLY GUARANTEES PAYMENTS ON THE CONVERTIBLE PREFERRED SECURITIES
IF THE TRUST HAS CASH AVAILABLE.
If the Company fails to make payments on the debentures, the Trust will not
be able to make the related distribution, redemption or liquidation payments on
the Convertible Preferred Securities. In those circumstances, you will not be
able to rely upon the Guarantee for payments of those amounts.
Instead, if the Company is in default under the debentures you may:
o rely on the property trustee for the Trust to enforce the Trust's
rights under the debentures; or
o directly sue the Company or seek other remedies to collect your pro
rata share of payments owed.
THE COMPANY MAY CAUSE THE CONVERTIBLE PREFERRED SECURITIES TO BE REDEEMED ON OR
AFTER JUNE 5, 2002 WITHOUT YOUR CONSENT.
The Company may redeem all or some of the debentures at its option at any
time on or after June 5, 2002. The redemption price you would receive in such an
event may vary, but will not be less than 100% of the principal amount to be
redeemed plus any accrued and unpaid interest. Please read "Description of
Convertible Junior Subordinated Debentures -- Redemption -- Optional
Redemption." You should assume that the Company will exercise its redemption
option if it is able to refinance the debentures at a lower interest rate or if
it is otherwise in the Company's interestprospectus supplement or any pricing supplement, we expect to redeem the debentures. If a
redemption occurs, the Trust will use the cash it receives from the redemption
of the debentures to redeem an equivalent amount of Convertible Preferred
Securities and Common Securities on a pro rata basis.
DISTRIBUTION OF THE DEBENTURES TO YOU MAY HAVE ADVERSE TAX AND OTHER
CONSEQUENCES FOR YOU.
The Company may terminate the Trust at any time. If that happens, the Trust
will redeem the Convertible Preferred Securities and the Common Securities by
distributing the debentures to you and the Company, as holder of the Common
Securities, on a pro rata basis.
5
Under current United States Federal income tax laws, a distribution of
debentures on the dissolution of the Trust would not be a taxable event to you.
Nevertheless, if the Trust is classified for United States Federal income tax
purposes as a corporation at the time it is dissolved, the distribution of the
debentures would be a taxable event to you. In addition, if there is a change in
law, a distribution of debentures on the dissolution of the Trust could also be
a taxable event to you.
The Company has no current intention of terminating the Trust and causing
the distribution of the debentures. However, there are no restrictions on its
ability to do so at any time. We anticipate that we would consider exercising
this right if expenses associated with maintaining the Trust were substantially
greater than currently expected.
The Company cannot predict the market prices for the debentures that may be
distributed. Accordingly, the debentures you receive on a distribution, or the
Convertible Preferred Securities you hold pending that distribution, may trade
at a discount to the price you paid to purchase the Convertible Preferred
Securities.
Because you may receive debentures, you should make an investment decision
about the debentures in addition to the Convertible Preferred Securities. You
should carefully review all the information regarding the debentures contained
in this prospectus.
TRADING PRICES OF THE CONVERTIBLE PREFERRED SECURITIES MAY NOT REFLECT THE VALUE
OF ACCRUED BUT UNPAID INTEREST ON THE DEBENTURES.
The Convertible Preferred Securities are a new series of securities with no
established trading market. The Convertible Preferred Securities may trade at a
price that does not fully reflect the value of accrued but unpaid interest on
the underlying debentures. For tax purposes if you dispose of your Convertible
Preferred Securities between record dates for payments of distributions you will
be required to:
o include accrued but unpaid interest on the debentures through the date
of disposition in your gross ordinary income as original issue
discount; and
o add that amount to your adjusted tax basis in your pro rata share of
the underlying debentures that you are deemed to have disposed of.
Accordingly, you will recognize a capital loss to the extent the selling price,
which may not fully reflect the value of accrued but unpaid interest, is less
than your adjusted tax basis, which will include accrued but unpaid interest. In
most instances, capital losses cannot be applied to offset ordinary income for
United States Federal income tax purposes.
ABSENCE OF PUBLIC MARKET.
There is no existing market for the Convertible Preferred Securities (or
the Convertible Junior Subordinated Debentures) and there can be no assurance as
to the liquidity of any markets that may develop for the Convertible Preferred
Securities (or the Convertible Junior Subordinated Debentures), the ability of
the holders to sell their Convertible Preferred Securities (or Convertible
Junior Subordinated Debentures) or at what price holders of the Convertible
Preferred Securities (or the Convertible Junior Subordinated Debentures) will be
able to sell such securities. Future trading prices of the Convertible Preferred
Securities (and the Convertible Junior Subordinated Debentures) will depend on
many factors including:
o prevailing interest rates;
o the Company's operating results; and
o the markets for similar securities.
The Initial Purchaser currently makes a market for the Convertible
Preferred Securities offered hereby; however, the Initial Purchaser is not
obligated to do so and such market making activity is subject to the limits
imposed by applicable law and may be discontinued at any time without notice.
6
YOU WILL HAVE LIMITED VOTING RIGHTS AS A HOLDER OF CONVERTIBLE PREFERRED
SECURITIES.
As a holder of Convertible Preferred Securities, you will have limited
voting rights relating only to the modification of the Convertible Preferred
Securities and, in specified circumstances, the exercise of the Trust's rights
as holder of the debentures and the Guarantee. Absent an event of default or
certain other special circumstances, only the Company can replace or remove any
of the trustees or increase or decrease the number of trustees.
THE COMPANY MAY NOT BE ABLE TO PAY DIVIDENDS ON CLASS A COMMON STOCK INTO WHICH
YOUR CONVERTIBLE PREFERRED SECURITIES MAY BE CONVERTED.
The Company has no obligation to pay dividends on the Class A common stock
into which your Convertible Preferred Securities may be converted. The
declaration and payment of dividends on common stock of the Company is subject
to, and will depend upon, among other things:
o the Company's future earnings and financial condition, liquidity and
capital requirements;
o the Company's ability to pay under its bank credit agreement;
o the general economic and regulatory climate; and
o other factors deemed relevant by the Company's Board of Directors.
The Company's credit agreement prohibits the Company from paying any
dividends on its Class A common stock, but allows the payment of required
dividends on its preferred stock.
USE OF PROCEEDS
The Selling Holders will receive all of thenet proceeds generated from the sale of the
securities offered by this prospectus. Neitherprospectus for general corporate purposes. General corporate purposes include the Company nor the Trust will
receive anyrepayment or refinancing of the proceeds from the sale of the securities offered by this
prospectus.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of the Companydebt, acquisitions and accordingly, the accounts of the Trust will be included in
the consolidated financial statements of the Company. The Convertible Preferred
Securities will be presented as a separate line item in the consolidated balance
sheet of the Company entitled "Company-obligated mandatorily redeemable
Convertible Preferred Securities of Carriage Services Capital Trust," and
appropriate disclosures about the Convertible Preferred Securities, the
Guarantee and the Convertible Junior Subordinated Debentures will be included in
the notes to the Company's consolidated financial statements. For financial
reporting purposes, the Company will record distributions payable on the
Convertible Preferred Securities as a financing charge to earnings in the
Company's statement of consolidated income.
RATIOSother capital requirements.
RATIO OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES PLUS DIVIDENDS
The following table containspresents our consolidated ratioshistorical ratio of earnings to fixed charges for the periods indicated.
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||
Ratio of earnings to fixed charges | 2.65 | 1.87 | 1.60 | 1.68 | 1.60 |
For purposes of computing the ratios of earnings to fixed charges and
earnings to fixed charges plus dividends:charges: (i) earnings consist of income from continuing operations before provision for income taxes plus fixed charges 7
"fixed charges"“fixed charges” consist of interest expensed and capitalized, amortization of debt discount and expense relating to indebtedness and the portion of rental expense representative of the interest factor attributable to leases for rental property. There were no dividends paid
or accrued during
DESCRIPTION OF DEBT SECURITIES
We will issue debt securities under an indenture between Carriage and a trustee that we will name in the periods presented above.
CARRIAGE SERVICES CAPITAL TRUST
Carriage Services Capital Trust isrelated prospectus supplement. If we offer senior debt securities, we will issue them under a statutory business trust that was
formedsenior indenture. If we issue subordinated debt securities, we will issue them under Delaware law on May 24, 1999.a subordinated indenture. The Trust's original declaration of
trust was amended and restatedterm “Trustee” as used in its entirety by the Company, as sponsor of the
Trust, and the trustees of the Issuer (the "Issuer Trustees") (as so amended
and restated, the "Declaration") on June 3, 1999 (the "Original Offering
Date"). The Company owns all the common securities issued by the Trust (the
"Common Securities" and, together with the Convertible Preferred Securities,
the "Trust Securities"). The Company directly or indirectly owns Common
Securities in an aggregate liquidation amount equal to 3% of the total capital
of the Issuer. Payment on the Common Securities will be made PRO RATA with the
Convertible Preferred Securities except that upon the occurrence and during the
continuance of an event of default under the Declaration, the rights of the
holders of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinatedthis prospectus refers to the rights of the holders of the Convertible Preferred Securities. The assets of the
Trust will consist principally of the Convertible Junior Subordinated
Debentures, and payments under the Convertible Junior Subordinated Debentures
will be the sole revenue of the Trust. The Trust exists for the exclusive
purposes of (i) issuing the Trust Securities representing undivided beneficial
interests in the assets of the Trust, (ii) investing the gross proceeds of the
Trust Securities in the Convertible Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees is initially
five. Three of the Issuer Trustees (the "Administrative Trustees") are
individuals who are employees or officers of or who are affiliated with the
Company. The fourth trustee is a financial institution that is unaffiliated with
the Company (the "Property Trustee"). The fifth trustee is an entity which
maintains its principal place of business in the State of Delaware (the
"Delaware Trustee"). Initially, Wilmington Trust Company, a Delaware banking
corporation, acts as Property Trustee and as Delaware Trustee until, in each
case, removed or replaced by the holder of the Common Securities or by holders
of a majority of the Convertible Preferred Securities in the case of an Event of
Default or certain other special circumstances. Wilmington Trust Company also
acts as indenture trustee under the Guarantee (the "Guarantee Trustee") and
under the Indenture (the "Debenture Trustee"). See "Description of
Guarantee" and "Description of Convertible Junior Subordinated Debentures."
In certain circumstances, the holders of a majority of the Convertible Preferred
Securities will be entitled to appoint one additional trustee (a "Special
Trustee"), who need not be an officer or employee of or otherwise affiliated
with the Company, who will have the same rights, powers and privileges as the
Administrative Trustees. See "Description of Convertible Preferred
Securities -- Voting Rights; Amendment of the Declaration."
The Property Trustee holds title to the Convertible Junior Subordinated
Debentures for the benefit of the holders of the Trust Securities and the
Property Trustee has the power to exercise all rights, powers and privileges
under the Indenture as the holder of the Convertible Junior Subordinated
Debentures. In addition, the Property Trustee maintains exclusive control of a
segregated non-interest bearing bank account (the "Property Account") to hold
all payments made in respect of the convertible Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities. The Guarantee Trustee
holds the Guarantee for the benefit of the holders of the Convertible Preferred
Securities. Subject to the right of the holders of the Convertible Preferred
Securities to appoint a Special Trustee, the Company, as the direct or indirect
holder of all the Common Securities, has the right to appoint, remove or replace any of the Issuer Trustees andabove indentures. References in this prospectus to increase or decrease the number of trustees,
PROVIDED that the number of trustees shall be at least three, a majority of
which shall be
8
Administrative Trustees. The Company pays all fees and expenses relatedan “Indenture” refer to the Trust andparticular indenture under which Carriage issues a series of debt securities. The debt securities will be governed by the offeringprovisions of the Convertible Preferred Securities (other than any
discounts, commissions, concessions or other compensation paid to any
underwriter, broker/dealer or agent in any offeringrelated Indenture and those made part of the Convertible Preferred
Securities subsequent to the Original Offering). See "Description of
Convertible Junior Subordinated Debentures."
The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration and the Delaware Business Trust Act, as amended (the
"Trust Act"). See "Description of Convertible Preferred Securities." The
Declaration, the Indenture and the Guarantee also incorporate by reference the
terms of the Trust Indenture Act. It is expected that, at the time the Shelf
Registration Statement becomes effective, the Declaration, the Indenture and the
Guarantee will be qualified under the Trust Indenture Act.
The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of the Company. See
"Incorporation of Certain Documents by Reference."
DESCRIPTION OF CONVERTIBLE PREFERRED SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees on behalf of
the Trust issued the Convertible Preferred Securities and the Common Securities
in fully registered form without interest coupons. The Convertible Preferred
Securities represent preferred undivided beneficial ownership interests in the
assets of the Trust and the holders thereof are entitled to a preference in
certain circumstances with respect to Distributions and amounts payable on
redemption of the Trust Securities or liquidation of the Trust over the Common
Securities, as well as other benefits as described in the Declaration. See
"-- Subordination of Common Securities." The Declaration will be qualified
under the Trust Indenture Act and incorporates certainof 1939.
This description is a summary of the material provisions of the Trust
Indenture Act. This summary of certain provisions of the Convertible Preferred
Securities, the Common Securitiesdebt securities and the Declaration doesIndentures. We urge you to read the forms of Indentures filed as exhibits to the registration statement of which this prospectus is a part because those Indentures, and not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisionsthis description, govern your rights as a holder of the Declaration, including the definitions thereindebt securities.
General
Any series of certain terms. The form of the Declaration is available upon request from the
Issuer Trustees.
GENERAL
Payments on the Convertible Preferred Securities debt securities:
The Indenture will not limit the Common Securities, except as described under "-- Subordination
of Common Securities." Legal title to the Convertible Junior Subordinated
Debentures is held by the Property Trustee on behalf of the Trust in trust for
the benefit of the holders of the Convertible Preferred Securities and Common
Securities. The Guarantee Agreement executed by the Company for the benefit of
the holders of the Convertible Preferred Securities provides for the Guarantee
on a subordinated basis with respect to the Convertible Preferred Securities but
does not guarantee payment of Distributions or amounts payable on redemption of
the Convertible Preferred Securities or on liquidation of the Trust when the
Trust does not have funds on hand available to make such payments. See
"Description of Guarantee."
DISTRIBUTIONS
Distributions accrue on the Convertible Preferred Securities from the date
of their original issuance at the annual rate of 7% of the stated liquidationtotal amount of $50 per each of the Convertible Preferred Securities, and are payable
quarterly in arrears on each March 1, June 1, September 1 and December 1 (each,
a "Distribution Date"), commencing September 1, 1999, to the person in whose
name each of the Convertible Preferred Securities is registered, subject to
certain exceptions, at the close of business on the fifteenth of the month next
preceding the applicable Distribution Date. The amount of Distributions payable
for any period willdebt securities that may be computed on the number of days elapsed in a 360-day year
consisting of twelve 30-day months. In the event that any Distribution Date is
not a Business Day, payment of the Distributions payable on such date will be
made on the next succeeding day that is a Business Day (and without any
additional Distributions or other payments in respect to any such delay) with
the same force and effect as if made on the date such payment was originally
9
payable. Accrued Distributions that are not paid on the applicable Distribution
Date will accrue additional Distributions on the amount thereof (to the extent
permitted by law), compounded quarterly from the relevant Distribution Date.
"Distribution" as used herein shall include quarterly distributions,
additional distributions on quarterly distributions not paid on the applicable
Distribution Date, Special Distributions and Additional Sums (as defined
herein), as applicable. See "Description of Convertible Junior Subordinated
Debentures -- Additional Sums" and "Registration Rights." A "Business Day"
shall mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York or Wilmington, Delaware are authorized or
required by law or executive order to remain closed, or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the rightissued. Debt securities under the Indenture to defer the payment of interest
on the Convertible Junior Subordinated Debentures at any time ormay be issued from time to time in separate series, up to the aggregate amount authorized for each such series.
We will prepare a period not exceeding 20 consecutive quarters with respect to each
Deferral Period, PROVIDED that no Deferral Period may extend beyond the Stated
Maturityprospectus supplement and either an indenture supplement or a resolution of the Convertible Junior Subordinated Debentures. See "Descriptionboard of Convertible Junior Subordinated Debentures -- Option to Extend Interest Payment
Date." As a consequence of any such election, quarterly Distributions on the
Convertible Preferred Securities by the Trust will be deferred during any such
Deferral Period. Deferred Distributions to which holdersdirectors of the Convertible
Preferred Securities are entitled will accumulate additional Distributions
thereon, compounded quarterly from the relevant payment date for such
Distributions during any such Deferral Period, to the extent permitted by
applicable law. During any such Deferral Period, the Company may not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respectissuer and accompanying officers’ certificate relating to any series of debt securities that we offer, which will include specific terms relating to some or all of the Company's capital stock (which
includes commonfollowing:
This description of debt securities will be no Debenture Eventdeemed modified, amended or supplemented by any description of Default and, consequently, no Eventany series of Default for
failuredebt securities set forth in a prospectus supplement related to makethat series.
The prospectus supplement will also describe any scheduled interest payment duringmaterial United States federal income tax consequences or other special considerations regarding the Deferral Period on the
date originally scheduled.
The Declaration may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consentapplicable series of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisionsdebt securities, including those relating to:
Interest payments on debt securities in certificated Convertible Preferred
Securities in definitive form of like tenor as such Convertible Preferred
Securities ("Certificated Convertible Preferred Securities") in denominations
of U. S. $1,000 and integral multiples thereof if (i) DTC notifies the Company
or the Issuer that it is unwilling or unable to continue as depositary for the
Global Convertible Preferred Securities or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act, (ii) the Company or the
Issuer in its discretion at any time determines not to have all of the
Convertible Preferred Securities evidenced by the Global Convertible Preferred
Securities or (iii) a default entitling the holders of the Convertible Preferred
Securities to accelerate the maturity thereof has occurred and is continuing.
Any of the Convertible Preferred Securities that is exchangeable pursuant to the
preceding sentence is exchangeable for Certificated Convertible Preferred
Securities issuable in authorized denominations and registered in such names as
DTC shall direct. Subject to the foregoing, the Global Convertible Preferred
Securities are not exchangeable, except for Global Convertible Preferred
Securities of the same aggregate denomination to be registered in the name of
DTC or its nominee. In addition, Certificated Convertible Preferred Securities
will bear the legend referred to under "Transfer Restrictions" (unless the
Company determines otherwise in accordance with applicable law) and will be
subject to the provisions of such legend.
PAYMENT AND PAYING AGENCY
Payments in respect of the Global Convertible Preferred Securities shall be
made to DTC, which shall credit the relevant accounts at DTC on the applicable
Distribution Dates, or, in respect of the Convertible Preferred Securities that
are not held by DTC, such payments shallmay be made by check mailed to the addressregistered holders or, if so stated in the applicable prospectus supplement, at the option of a holder, by wire transfer to an account designated by the holder.
Unless otherwise provided in the applicable prospectus supplement, debt securities may be transferred or exchanged at the office of the holder entitled thereto as such address shall appear onTrustee at which its corporate trust business is principally administered in the register. The
paying agent (the "Paying Agent") shall initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptableUnited States, subject to the Administrative Trustees andlimitations provided in the Company. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written noticeIndenture, without the payment of any service charge, other than any applicable tax or other governmental charge.
Any funds paid to the Property Trustee the
Administrative Trustees and the Company. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
26
The Property Trustee has informed the Trust that so long as it serves asany paying agent for the Convertible Preferred Securities, it anticipatespayment of amounts due on any debt securities that information regarding Distributions on the Convertible Preferred Securities,
including payment date, record date and redemption information,remain unclaimed for two years will be made
available through Wilmington Trust Company.
REGISTRAR, CONVERSION AGENT, PAYING AGENT AND TRANSFER AGENT
The Property Trustee acts as registrarreturned to us, and conversion agent for the
Convertible Preferred Securities.
The Property Trustee acts as initial paying agent and transfer agent for
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities and may designate additional or substitute
paying agents and transfer agents at any time. Registration of transfers of
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities will be effected without charge by or on behalf
of the Trust, but upon payment (with the giving of such indemnity as the
Administrative Trustees, the Property Trustee or the Company may require) in
respect of any tax or other government charges that may be imposed in relation
thereto. The Trust will not be required to register the transfer of or exchange
Restricted Certificated Convertible Preferred Securities and Certificated
Convertible Preferred Securities during the period beginning at the opening of
business 15 days before any selection of Restricted Certificated Convertible
Preferred Securities and Certificated Convertible Preferred Securities to be
redeemed and ending at the close of business on the day of that selection or
register the transfer of or exchange any Certificated Convertible Preferred
Securities, or portion thereof, called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Convertible Preferred
Securities or the Common Securities are entitled under the Declaration to vote,
then the Property Trustee shall take such action as is directed by the Company
and, if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act or classified as an association taxable as a corporation for United States
Federal income tax purposes (or in a way that would substantially increase the
risk that the Trust would be classified as other than a grantor trust for United
States Federal income tax purposes), and so that the Convertible Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States Federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the certificate of trust of the Trust or the Declaration,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the Trust
Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
27
DESCRIPTION OF CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
The Convertible Junior Subordinated Debentures were issued under a
Convertible Junior Subordi-nated Indenture (the "Indenture"), between the
Company and Wilmington Trust Company, as trustee (the "Debenture Trustee").
The Indenture will be qualified under the Trust Indenture Act and incorporates
certain provisions of the Trust Indenture Act. This summary of certain terms and
provisions of the Convertible Junior Subordinated Debentures and the Indenture
does not purport to be complete, and where reference is made to particular
provisions of the Indenture, such provisions, including the definitions of
certain terms, some of which are not otherwise defined herein, are qualified in
their entirety by reference to all of the provisions of the Indenture and those
terms made a part of the Indenture by incorporation of the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Trust Securities, the Trust invested
the proceeds thereof in Convertible Junior Subordinated Debentures issued by the
Company. Interest accrues on the Convertible Junior Subordinated Debentures from
the date of their original issuance at the annual rate of 7% of the principal
amount thereof and is payable quarterly in arrears on March 1, June 1, September
1 and December 1 (each, an "Interest Payment Date"), commencing September 1,
1999, to the person in whose name each Convertible Junior Subordinated Debenture
is registered, subject to certain exceptions, at the close of business on the
fifteenth of the month next preceding the applicable Interest Payment Date. It
is anticipated that, until the liquidation of the Trust, each Convertible Junior
Subordinated Debenture will be registered in the name of the Trust and held by
the Property Trustee for the benefit of the holders of the Trust Securities. The
amount of interest payable for any period will be computed on the basis of the
number of days elapsed in a 360-day year consisting of twelve 30-day months. In
the event that any Interest Payment Date is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on the applicable
Interest Payment Date. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law), compounded quarterly from the relevant Interest
Payment Date. The term "interest" as used herein shall include quarterly
interest payments, interest on quarterly interest payments not paid the
applicable Interest Payment Date, Special Interest and Additional Sums, as
applicable. See " -- Additional Sums" and "Registration Rights."
Unless previously redeemed or repurchased in accordance with the Indenture,
the Convertible Junior Subordinated Debentures will mature on June 1, 2029 (the
"Stated Maturity"). See "-- Redemption -- Repayment at Maturity; Redemption
of Convertible Junior Subordinated Debentures."
The Convertible Junior Subordinated Debentures are unsecured and rank
junior and are subordinate in right of payment to all Senior Debt. Because the
Company is principally a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise (and thus the ability of
holders of the Convertible Preferred Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Company may itself be recognized as a creditor of
such subsidiary. Accordingly, the Convertible Junior Subordinated Debentures
will be subordinated to all Senior Debt and effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, and holders of
Convertible Junior Subordinated Debentures shouldsecurities must look only to us for payment after that time.
Events of Default, Remedies and Notice
Events of Default
Unless otherwise specified in a supplement to the assetsIndenture, each of the Company for payments on the Convertible Junior Subordinated Debentures. The
Indenture does not limit the incurrence or issuancefollowing events will be an “Event of other secured or
unsecured debt of the Company, including Senior Debt, whetherDefault” under the Indenture orwith respect to a series of debt securities:
Exercise of Remedies
If an Event of Default, other than an Event of Default described in the fifth bullet point above, occurs and is continuing, the Trustee or the holders of at least 25% in aggregate outstanding
principal amount of the Convertible Junior Subordinated Debentures;outstanding debt securities of that series may declare the entire principal of, premium, if any, and accrued and unpaid interest, if any, on all the debt securities of that series to be due and payable immediately.
A default under the fourth bullet point above will not constitute an Event of Default until the Trustee or
(iv) failure by the Company to issue and deliver shares of Class A
common stock upon an election by a holder of Convertible Preferred
Securities to convert such Convertible Preferred Securities; or
(v) certain events in bankruptcy, insolvency or reorganization of the
Company; or
(vi) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
Convertible Junior Subordinated Debentures to the holders of Trust
Securities25% in liquidationprincipal amount of the Trust,outstanding debt securities of that series notifies us of the redemptiondefault and such default is not cured within 60 days after receipt of notice.
If an Event of Default described in the fifth bullet point above occurs, the principal of, premium, if any, and accrued and unpaid interest on all outstanding debt securities of all series will become immediately due and payable without any declaration of acceleration or other act on the part of the Trust
Securities of the Trust,Trustee or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration.
any holders.
The holders of a majority in aggregate outstanding principal amount of the Convertible Junior Subordinated Debenturesoutstanding debt securities of a series may rescind any declaration of acceleration by the Trustee or the holders with respect to the debt securities of that series, but only if:
If an Event of Default occurs and is continuing, the Trustee will be under no obligation, except as otherwise provided in the Indenture, to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee reasonable indemnity or security against any costs, liability or expense. No holder may pursue any remedy with respect to the Indenture or the debt securities of any series, except to enforce the right to receive payment of principal, premium or interest on its own debt securities when due, unless:
The holders of a majority in principal amount of the outstanding debt securities of a series have the right, subject to certain restrictions, to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee.Trustee or of exercising any right or power conferred on the Trustee with respect to that series of debt securities. The Debenture Trustee, however, may refuse to follow any direction that:
Notice of Event of Default
Within 30 days after the occurrence of an Event of Default, we are required to give written notice to the Trustee and indicate the status of the default and what action we are taking or proposes to take to cure the default. In addition, we are required to deliver to the Trustee, within 120 days after the end of each fiscal year, a compliance certificate indicating that we have complied with all covenants contained in the Indenture or whether any default or Event of Default has occurred during the previous year.
Within 90 days after the occurrence of any default known to it, the Trustee must mail to each holder a notice of the default. Except in the case of a default in the payment of principal, premium or interest with respect to any debt securities, the Trustee may withhold such notice, but only if and so long as the board of directors, the executive committee or a committee of directors or responsible officers of the Trustee in good faith determines that withholding such notice is in the interests of the holders.
Amendments and Waivers
We may supplement or amend the Indenture without the consent of any holder of debt securities to, among other things:
In addition, we may amend the Indenture if the holders of not less than 25%a majority in
aggregate outstanding principal amount of all debt securities of each series that would be affected then outstanding under the Convertible Junior Subordinated
DebenturesIndenture consent to it. We may declarenot, however, without the consent of each holder of outstanding debt securities of each series that would be affected, amend the Indenture to:
The consent of
Convertible Junior Subordinated Debentures fail to make such declaration, the holders is not necessary under the Indenture to approve the particular form of at least 25% in aggregate liquidation amountany proposed amendment. It is sufficient if such consent approves the substance of the Convertible
Preferred Securities shall haveproposed amendment. After an amendment under the Indenture requiring the consent of the holders becomes effective, we are required to mail to all holders a notice briefly describing the amendment. The failure to give, or any defect in, such right. notice, however, will not impair or affect the validity of the amendment.
The holders of a majority in aggregate outstanding principal amount of the Convertible Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-paymentoutstanding debt securities of the principal of the Convertible Junior
Subordinated Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee. Should the holders of Convertible Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate liquidation amount of the Convertible Preferred
Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Convertible Junior Subordinated Debentureseach affected thereby may,series, on behalf of all such holders, and subject to certain rights of the holdersTrustee, may waive:
Satisfaction and Discharge
The Indenture will be discharged and will cease to annul such declaration and waive such default,
the holdersbe of a majority in aggregate liquidation amount of the Convertible
Preferred Securities shall have such right. The Company is required to file
annually with the Debenture Trustee a certificatefurther effect as to whetherall outstanding debt securities of any series issued thereunder, when:
(a) either:
(1) all outstanding debt securities of that series that have been authenticated (except lost, stolen or destroyed debt securities that have been replaced or paid and debt securities for whose payment money has theretofore been deposited in trust and thereafter repaid to the issuer) have been delivered to the Trustee for cancellation; or
(2) all outstanding debt securities of that series that have not 32
Company is in compliance with all the conditions and covenants applicable to
it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee willfor cancellation have the right to declare the principal of and the
interest on the Convertible Junior Subordinated Debentures, and any other
amounts payable under the Indenture, to be forthwithbecome due and payable or will become due and payable at their stated maturity within one year or are to enforce itsbe called for redemption within one year under arrangements satisfactory to the Trustee and in any case we have irrevocably deposited with the Trustee as trust funds cash, certain U.S. government obligations or a combination thereof, in such amounts as will be sufficient, to pay the entire indebtedness of such debt securities not delivered to the Trustee for cancellation, for principal, premium, if any, and accrued interest to the stated maturity or redemption date;
(b) we have paid or caused to be paid all other rights as a creditorsums payable by us under the Indenture with respect to the Convertible Junior
Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CONVERTIBLE PREFERRED SECURITIESdebt securities of that series; and
(c) we have delivered to the Trustee an accountants’ certificate as to the sufficiency of the trust funds, without reinvestment, to pay the entire indebtedness of such debt securities at maturity.
Defeasance
At any time, we may terminate, with respect to debt securities of a particular series, all our obligations under such series of debt securities and the Indenture, which we call a “legal defeasance.” If we decide to make a Debenturelegal defeasance, however, we may not terminate our obligations specified in the Indenture, including those:
At any time we may also effect a “covenant defeasance,” which means we have elected to terminate our obligations under covenants applicable to a series of debt securities and described in the prospectus supplement applicable to such series, other than as described in such prospectus supplement, and any Event of Default resulting from a failure to observe such covenants.
The legal defeasance option may be exercised notwithstanding a prior exercise of the covenant defeasance option. If the legal defeasance option is exercised, payment of the affected series of debt securities may not be accelerated because of an Event of Default with respect to that series. If the covenant defeasance option is exercised, payment of the affected series of debt securities may not be accelerated because of an Event of Default specified in the fourth bullet point under “—Events of Default, Remedies and Notice—Events of Default” above or an Event of Default that is added specifically for such series and described in a prospectus supplement.
In order to exercise either defeasance option, we must:
No Personal Liability
Our shareholders, directors, officers, employees and incorporators will not be liable for:
By accepting a debt security, each holder will be deemed to have waived and released all such liability. This waiver and release are part of the Convertible Junior Subordinated
Debentures,consideration for the Trustissuance of the debt securities. This waiver may become subjectnot be effective, however, to the reporting obligationswaive liabilities under the Exchange Act. Notwithstanding any payments made to a holder of Convertible
Preferred Securities byFederal securities laws and it is the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Convertible Junior Subordinated Debentures, and the Company shall be subrogated
to the rightsview of the holdersSEC that such a waiver is against public policy.
No Protection in the Event of such Convertible Preferred Securities with
respect to payments on the Convertible Preferred Securities to the extenta Change of any
payments made by the Company to such holder in any Direct Action.
The holders of the Convertible Preferred Securities will not be able to
exercise directly any remedies, other than thoseControl
Unless otherwise set forth in the preceding
paragraph, available toprospectus supplement, the debt securities will not contain any provisions that protect the holders of the Convertible Junior Subordinated
Debentures unless there shall have been an Event of Default under the
Declaration. See "Description of Convertible Preferred Securities -- Events of
Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
with or into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and no person shall
consolidate with or merge with or into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, unless
(i) in case the Company consolidates with or merges with or into another person
or conveys or transfers its properties and assets substantially as an entirety
to any person, the successor person is organized under the laws of the United
States or any State of the United States or the District of Columbia, and such
successor person expressly assumes the Company's obligations on the Convertible
Junior Subordinated Debentures issued under the Indenture and shall have
provided for conversion rights in accordance with Article XIII of the Indenture;
(ii) immediately after giving effect thereto, no Debenture Event of Default, and
no event which, after notice or lapse of time or both, would become a Debenture
Event of Default, shall have occurred and be continuing; (iii) if at the time
any Convertible Preferred Securities are outstanding, such transaction is
permitted under the Declaration and the Guarantee and does not give rise to any
breach or violation of the Declaration or the Guarantee; and (iv) certain other
conditions as prescribeddebt securities in the Indenture are met.
The general provisionsevent of the Indenture do not afford holdersour change of the
Convertible Junior Subordinated Debentures protectioncontrol or in the event of a highly leveraged transaction, whether or not such transaction results in our change of control.
Provisions Relating only to the Senior Debt Securities
The senior debt securities will rank equally in right of payment with all of our other transaction involvingunsubordinated debt. The senior debt securities will be effectively subordinated, however, to all of our secured debt to the Company that may adversely affect
holdersextent of the Convertible Juniorvalue of the collateral for that debt, and they will be structurally subordinated to all debt and other liabilities of our subsidiaries. We will disclose the amounts of our secured debt in the prospectus supplement.
Provisions Relating only to the Subordinated Debentures.
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any
Convertible Junior Debt Securities
Subordinated Debentures issued thereunder shall be
subordinate andDebt Securities Subordinated to Senior Indebtedness
The subordinated debt securities will rank junior in right of payment to all of our Senior Debt toIndebtedness. “Senior Indebtedness” will be defined in a supplemental indenture or authorizing resolutions respecting any issuance of a series of subordinated debt securities, and the extent
provideddefinition will be set forth in the Indenture. Uponprospectus supplement.
Payment Blockages
The subordinated indenture will provide that no payment of principal, interest and any paymentpremium on the subordinated debt securities may be made in the event:
No Limitation on Amount of the acceleration of the maturity of the Convertible Junior
Subordinated Debentures, the holders of all Senior Debt outstanding at the time
of such acceleration
The subordinated indenture will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of the Convertible Junior Subordinated Debentures will be entitled to
receive or retain any payment in respect of the principal of, and premium and
interest, if any, on, the Convertible Junior Subordinated Debentures.
In the event that the Company shall default in the payment of any principal
of, or premium or interest, if any, on, any Senior Debt when the same becomes
due and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, and such default continues beyond the
period of grace, if any, specified in the instrument evidencing such Senior
Debt, then, unless and until such default shall have been cured or waived or
shall have ceased to exist or all Senior Debt shall have been paid, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise) shall
be made or agreed to be made for principal of, and premium and interest, if any,
on, the Convertible Junior Subordinated Debentures, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Convertible Junior Subordinated Debentures.
"Senior Debt" means (i) the principal of, and premium, if any, and
interest on, all obligations of every nature of the Company for money borrowed,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred, together with all fees, indemnities and expenses
payable under such obligations (ii) all obligations to make payment pursuant to
the terms of financial instruments, such as (a) securities contracts and foreign
currency exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or PARI PASSU in right of payment
with, the Convertible Junior Subordinated Debentures, (iii) indebtedness or
obligations of others of the kind described in both (i) and (ii) above for the
payment of which the Company is responsible or liable as guarantor or otherwise
and (iv) any deferrals, renewals or extensions of any such Senior Debt;
PROVIDED, HOWEVER, that Senior Debt shall not be deemed to include (a) any Debt
of the Company which, when incurred and without respect to any election under
Section 1111(b) of the United States Bankruptcy Code of 1978, was without
recourse to the Company, (b) trade accounts payable and accrued liabilities
arising in the ordinary course of business, (c) any Debt of the Company to any
of its subsidiaries, (d) Debt to any employee of the Company and (e) Debt which
by its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the holders of the Convertible Junior Subordinated
Debentures as a result of the subordination provisions of the Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt is
subject.
"Debt" means (i) the principal of, and premium and interest, if any, on,
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases,
34
(iv) guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which the Company is responsible for the payment of
such indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii) obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements.
The Indenture places no limitation onlimit the amount of Senior DebtIndebtedness that we may incur, unless otherwise indicated in the prospectus supplement.
Book Entry, Delivery and Form
The debt securities of a particular series may be incurred byissued in whole or in part in the Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Debt. At June 30, 1999, the
aggregate outstanding Senior Debtform of the Company was approximately $170 million.
The Indenture also places no limitation on the Debt of the Company's
subsidiaries, which is effectively senior in right of payment to the Convertible
Junior Subordinated Debentures. As of June 30, 1999, the Company's subsidiaries
had Debt and other liabilities of approximately $214 million.
REGISTRATION AND TRANSFER
Unless and until distributed to holders of the Trust Securities, the
Convertible Junior Subordinated Debenturesone or more global certificates that will be registereddeposited with the Trustee as custodian for The Depository Trust Company, New York, New York (“DTC”). This means that we will not issue certificates to each holder except in the namelimited circumstances described below. Instead, one or more global debt securities will be issued to DTC, who will keep a computerized record of its participants (for example, your broker) whose clients have purchased the debt securities. The participant will then keep a record of its clients who purchased the debt securities. Unless it is exchanged in whole or in part for a certificated debt security, a global debt security may not be transferred, except that DTC, its nominees and held by the Property Trustee. Should the Convertible Junior Subordinated
Debentures be distributedtheir successors may transfer a global debt security as a whole to holders of the Trust Securities, (i) beneficialone another.
Beneficial interests in the Convertible Junior Subordinated Debentures issued to holders of
beneficial interests in Global Convertible Preferred Securitiesglobal debt securities will be shown on, and transfers thereofof global debt securities will be effectedmade only through, records maintained by participants in DTC and (ii) Convertible Junior Subordinated Debentures issuedits participants.
DTC has provided us the following information: DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform
Commercial Code and a “clearing agency” registered under the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (“Direct Participants”) deposit with DTC. DTC also records the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through computerized records for Direct Participants’ accounts. This eliminates the need to holdersexchange certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations.
DTC’s book-entry system is also used by other organizations such as securities brokers and dealers, banks and trust companies that work through a Direct Participant. The rules that apply to DTC and its participants are on file with the SEC.
DTC is a wholly owned subsidiary of Restricted Certificated Convertible PreferredThe Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries.
We will wire all payments on the global debt securities to DTC’s nominee. We and the Trustee will treat DTC’s nominee as the owner of the global debt securities for all purposes. Accordingly, we, the Trustee and any paying agent will have no direct responsibility or liability to pay amounts due on the global debt securities to owners of beneficial interests in the global debt securities.
It is DTC’s current practice, upon receipt of any payment on the global debt securities, to credit Direct Participants’ accounts on the payment date according to their respective holdings of beneficial interests in the global debt securities as shown on DTC’s records. In addition, it is DTC’s current practice to assign any consenting or voting rights to Direct Participants whose accounts are credited with debt securities on a record date, by using an omnibus proxy. Payments by participants to owners of beneficial interests in the global debt securities, and voting by participants, will be governed by the customary practices between the participants and owners of beneficial interests, as is the case with debt securities held for the account of customers registered in fully registered, certificated form.
A“street name.” However, payments will be the responsibility of the participants and not of DTC, the Trustee or us.
Debt securities represented by a global debt security shallwill be exchangeable for Convertible Junior Subordinated
Debenturescertificated debt securities with the same terms in certificated form registered in the names of persons other than
Cede & Co.authorized denominations only if (i) if:
Governing Law
Each Indenture and all of the preceding sentence shall be
exchangeable for certificates registered in such names as DTC shall direct. It
is expected that such instructionsdebt securities will be based upon directions received by DTC
from its participants with respect to ownership of beneficial interests in such
global security.
Payments on Convertible Junior Subordinated Debentures held in global form
will be made to DTC, as the depositary for the Convertible Junior Subordinated
Debentures. In the case of Convertible Junior Subordinated Debentures issued in
certificated form, principal and interest will be payable, the transfer of the
Convertible Junior Subordinated Debentures will be registrable, and Convertible
Junior Subordinated Debentures will be exchangeable for Convertible Junior
Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate office of the Debenture Trustee in New York, New York,
or at the offices of any paying agent or transfer agent appointed by the
Company, PROVIDED that payment of interest may be made at the option of the
Company by check mailed to the address of the persons entitled thereto or by
wire transfer.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Convertible Preferred
Securities -- Form, Book-Entry Procedures and Transfer." If the Convertible
Junior Subordinated Debentures are distributed to the holders of the Trust
Securities upon the termination of the Trust, the form, book-entry and transfer
procedures with respect to the Convertible Preferred Securities as described
under "Description of Convertible Preferred Securities -- Form,
35
Book-Entry Procedures and Transfer"shall apply to the Convertible Junior
Subordinated Debentures MUTATIS MUTANDIS.
PAYMENT AND PAYING AGENTS
Payment of the principal of, and premium and interest, if any, on, the
Convertible Junior Subordinated Debentures will be made at the office or agency
of the Company maintained for that purpose in New York, New York, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; PROVIDED, HOWEVER, that, at the
option of the Company, payment of interest may be made (except in the case of
Convertible Junior Subordinated Debentures that are held in global form) by
check mailed to each registered holder or by wire transfer. Payment of any
interest on any Convertible Junior Subordinated Debenture will be made to the
person in whose name such Convertible Junior Subordinated Debenture is
registered at the close of business on the record date for such interest, except
in the case of defaulted interest.
GOVERNING LAW
The Indenture and the Convertible Junior Subordinated Debentures are
governed by and will be construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The DebentureTrustee
We will enter into each Indenture with a Trustee has andthat is subjectqualified to all the duties and
responsibilities specified with respect to an indenture trusteeact under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exerciseAct of 1939, as amended, and with any other trustee chosen by us and appointed in a supplemental indenture for a particular series of the powers vested in it by the Indenture at the
request of any holder of Convertible Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liabilitydebt securities. We may maintain a banking relationship in the performanceordinary course of business with our Trustee and one or more of its duties ifaffiliates.
Resignation or Removal of Trustee
If the Debenture Trustee reasonably
believes that repaymenthas or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Guarantee was executed and delivered byacquires a conflicting interest within the Company concurrently with
the issuance by the Trustmeaning of the Convertible Preferred Securities for the
benefit of the holders from time to time of such Convertible Preferred
Securities. Wilmington Trust Company acts as trustee (the "Guarantee Trustee")
under the Guarantee Agreement. The Guarantee Agreement will be qualified under the Trust Indenture Act. This summary of certain provisions of the Guarantee
does not purport to be completeAct after a default has occurred and is continuing, the Trustee must either eliminate its conflicting interest within 90 days, apply to the SEC for permission to continue as trustee or resign, to the extent and in the manner provided by, and subject to and qualified in its entirety
by reference to, all of the provisions of, the Guarantee, includingTrust Indenture Act and the definitions thereinapplicable indenture. Any resignation will require the appointment of certaina successor trustee under the applicable indenture in accordance with the terms and the Trust Indenture Act. conditions of such indenture.
The Guarantee
Trustee will hold the Guarantee for the benefitmay resign or be removed by us with respect to one or more series of debt securities and a successor Trustee may be appointed to act with respect to any such series. The holders of a majority in aggregate principal amount of the holdersdebt securities of any series may remove the Trustee with respect to the debt securities of such series.
Limitations on Trustee if it is Our Creditor
Each indenture will contain certain limitations on the right of the Convertible Preferred Securities.
GENERAL
PursuantTrustee, in the event that it becomes a creditor of us, to the Guarantee, the Company irrevocably agreesobtain payment of claims in certain cases, or to payrealize on certain property received in full on
a subordinated basis,respect of any such claim as security or otherwise.
Annual Trustee Report to the extent set forth herein, the Guarantee Payments (as
defined herein)Holders of Debt Securities
The Trustee is required to submit an annual report to the holders of the Convertible Preferred Securities,debt securities regarding, among other things, the Trustee’s eligibility to serve as and
when due, regardless of any defense, right of set-off or counterclaim thatsuch, the Trust may have or assert other than the defense of payment. The following
payments with respect to the Convertible Preferred Securities, to the extent not
paid by or on behalfpriority of the Trust (the "Guarantee Payments"), will be subject
toTrustee’s claims regarding certain advances made by it, and any action taken by the Guarantee: (i) any accruedTrustee materially affecting the debt securities.
Certificates and unpaid Distributions requiredOpinions to be paid
on the Convertible Preferred Securities,Furnished to the extentTrustee
Each indenture will provide that, the Trust has funds
on hand available therefor at such time, (ii) the applicable Redemption Price
with respectin addition to Convertible Preferred Securities called for redemption, to the
extent that the Trust has funds on hand available therefor at such time, and
(iii) upon a voluntaryother certificates or involuntary dissolution, winding up or liquidation of
the Trust (other than in connection with the distribution of Convertible Junior
36
Subordinated Debentures to the holders of the Convertible Preferred Securities
or the redemption of all of the Convertible Preferred Securities) the lesser of
(a) the Liquidation Distribution, to the extent the Trust has funds available
therefor and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Convertible Preferred Securities upon liquidation
of the Trust after satisfaction of liabilities to creditors of the Trust as
required by applicable law. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to the
holders of the Convertible Preferred Securities or by causing the Trust to pay
such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Trust's obligations under the Convertible Preferred Securities, although it
will apply only to the extent that the Trust has funds sufficient to make such
payments, and is not a guarantee of collection. If the Company does not make
interest payments on the Convertible Junior Subordinated Debentures held by the
Trust, the Trust will not be able to pay Distributions on the Convertible
Preferred Securities and will not have funds legally available therefor.
The Guarantee ranks subordinate and junior in right of payment to all
Senior Debt. See "-- Status of the Guarantee." Because the Company is
principally a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of the holders of Convertible
Preferred Securities to benefit indirectly from any such distribution), is
subject to the prior claims of creditors of such subsidiary, except to the
extent the Company may itself be recognized as a creditor of that subsidiary.
Accordingly, the Company's obligations under the Guarantee are effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and claimants should look only to the assets of the Company for
payments thereunder. The Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Company, including Senior Debt, whether
under any indenture that the Company may enter into in the future or otherwise.
Taken together, the Company's obligations under the Guarantee, the
Declaration, the Convertible Junior Subordinated Debentures and the Indenture,
including the Company's obligation to pay the costs, expenses and other
liabilities of the Trust (other than the Trust's obligations to the holders of
the Trust Securities under the Trust Securities), provide, in the aggregate, a
full, irrevocable and unconditional guarantee of all of the Trust's obligations
under the Convertible Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Convertible Preferred Securities. See
"Relationship Among the Convertible Preferred Securities, the Convertible
Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of the Company and ranks
subordinate and junior in right of payment to all Senior Debt in the same manner
as Convertible Junior Subordinated Debentures.
The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other person or entity). The Guarantee is held
for the benefit of the holders of the Convertible Preferred Securities. The
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Trust or upon distribution to the holders of
the Convertible Preferred Securities of the Convertible Junior Subordinated
Debentures. The Guarantee does not place a limitation on the amount of
additional Senior Debtopinions that may be incurredspecifically required by the Company. The Company expects
from time to time to incur additional indebtedness constituting Senior Debt.
37
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Convertible Preferred Securities (in which case no
vote will be required), the Guarantee may not be amended without the prior
approval of the holders of not less than a majority of the aggregate liquidation
amount of the outstanding Convertible Preferred Securities. The manner of
obtaining any such approval will be as set forth under "Description of
Convertible Preferred Securities -- Voting Rights; Amendment of the
Declaration." All guarantees and agreements contained in the Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Convertible
Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder, PROVIDED,
HOWEVER, that except with respect to a default in payment of any Guarantee
Payment, the Company shall have received notice of default and shall not have
cured such default within 60 days after receipt of such notice. The holders of
not less than a majority in aggregate liquidation amount of the Convertible
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of the Convertible Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of the Convertible Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Convertible Preferred
Securities upon (i) full payment of the Redemption Price and accrued and unpaid
distributions with respect to all Convertible Preferred Securities, (ii)
distribution of the Convertible Junior Subordinated Debentures held by the Trust
to the holders of the Convertible Preferred Securities, (iii) liquidation of the
Trust or (iv) the distribution of Class A common stock to such holder in respect
of the conversion of such holder's Convertible Preferred Securities into Class A
common stock and will terminate completely upon full payment of the amounts
payable in accordance with the Declaration. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the Convertible Preferred Securities must restore payment of any sums paid
under the Convertible Preferred Securities or the Guarantee.
GOVERNING LAW
The Guarantee is governed by and will be construed in accordance with the
laws of the State of New York.
38
RELATIONSHIP AMONG THE CONVERTIBLE PREFERRED SECURITIES,
THE CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Convertible
Preferred Securities (to the extent the Trust has funds available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of Guarantee." Taken together, the
Company's obligations under the Convertible Junior Subordinated Debentures, the
Indenture, the Declaration and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Convertible Preferred Securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the Trust's obligations under the Trust Securities. If and to the extent that
the Company does not make payments on the Convertible Junior Subordinated
Debentures, the Trust will not pay Distributions or other amounts due on the
Convertible Preferred Securities. The Guarantee does not cover payment of
Distributions when the Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of Convertible Preferred
Securities is to institute a Direct Action. The obligations of the Company under
the Guarantee are subordinate and junior in right of payment to all Senior Debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Convertible Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Convertible Preferred
Securities, primarily because (i) the aggregate principal amount or applicable
Redemption Price of the Convertible Junior Subordinated Debentures will be equal
to the sum of the aggregate liquidation amount or applicable Redemption Price,
as applicable, of the Trust Securities; (ii) the interest rate payable on the
Convertible Junior Subordinated Debentures and interest and other payment dates
on the Convertible Junior Subordinated Debentures will match the Distribution
rate and Distribution and other payment dates for the Convertible Preferred
Securities; (iii) the Company shall pay for all costs, expenses and liabilities
of the Trust except the Trust's obligations to holders of Trust Securities under
such Trust Securities; and (iv) the Declaration further provides that the Trust
will not engage in any activity that is not consistent with the limited purposes
thereof.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, any payment under the Guarantee used to satisfy
the related payment of indebtedness under the Indenture.
ENFORCEMENT RIGHTS OF HOLDERS OF CONVERTIBLE PREFERRED SECURITIES
A holder of any of the Convertible Preferred Securities may institute a
legal proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination provisions of the Indenture provide that no paymentsindenture, every application by us for action by the Trustee shall be accompanied by a certificate of certain of our officers and an opinion of counsel (who may be madeour counsel) stating that, in respectthe opinion of the Convertible Junior Subordinated Debentures untilsigners, all conditions precedent to such Senior Debt hasaction have been paid in full or any payment default thereunder has been cured or waived. Failure
to make required payments on Convertible Junior Subordinated Debentures would
constitute an Event of Default under the Declaration.
39
LIMITED PURPOSE OF THE TRUST
The Convertible Preferred Securities evidence a beneficial interest in the
Trust, and the Trust exists for the sole purpose of issuing the Convertible
Preferred Securities and Common Securities and investing the proceeds of the
Trust Securities in Convertible Junior Subordinated Debentures.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the Trust involving the liquidation of the Convertible Junior Subordinated
Debentures, after satisfaction of the liabilities of creditors of the Trust as
requiredcomplied with by applicable law, the holders of the Trust Securities will be entitled
to receive, out of assets held by the Trust, the Liquidation Distribution in
cash. See "Description of Convertible Preferred Securities -- Liquidation of
the Trust and Distribution of Convertible Junior Subordinated Debentures." Upon
any voluntary or involuntary liquidation or bankruptcy of the Company, the
Property Trustee, as holder of the Convertible Junior Subordinated Debentures,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt as set forth in the Indenture, but entitled to
receive payment in full of principal and interest, before any stockholders of
the Company receive payments or distributions. Since the Company is the
guarantor under the Guarantee and has agreed to pay for all costs, expenses and
liabilities of the Trust (other than the Trust's obligations to the holders of
its Trust Securities), the positions of a holder of Convertible Preferred
Securities and a holder of Convertible Junior Subordinated Debentures relative
to other creditors and to stockholders of the Company in the event of
liquidation or bankruptcy of the Company are expected to be substantially the
same.
us.
DESCRIPTION OF COMPANY CAPITAL STOCK
Our
General
We are authorized capital stock consists of 50,000,000to issue 80,000,000 shares of common stock, par value $.01, of which 18,486,764 shares were issued and 70,000,000outstanding as of April 2, 2014, and 40,000,000 shares of preferred stock, par value $.01, per share. Theof which no shares were issued and outstanding as of April 2, 2014. Our common stock is divided into two classes: Class A commonquoted on the New York Stock Exchange under the symbol “CSV.” The following description of our capital stock is based on our certificate of incorporation and Class B common
stock.
COMMON STOCK
As of September 30, 1999, 15,908,000 shares of common stock were
outstanding, consisting of 12,383,000 shares of Class A common stockbylaws, as amended and 3,525,000 shares of Class B common stock.
currently in effect.
Common Stock
The holders of Class Aour common stock are entitled to one vote for each share
held on all matters submitted to a vote of common stockholders. The holders of
Class B common stock are entitled to ten votes for each share held on all matters submitted to a vote of common stockholders. Our common stock does not have cumulative voting rights, which means that the holders of a majority of the voting power of shares of common stock outstanding can elect all the directors, and the holders of the remaining shares will not be able to elect any directors. Each share of our common stock is entitled to participate equally in dividends, if, as and when declared by our Board of Directors, and in the distribution of assets in the event of liquidation, subject in all cases to any prior rights of outstanding shares of preferred stock. We have never paid cash dividends on our
common stock. Thestock outstanding. Our shares of our common stock have no preemptive rights, redemption rights or sinking fund provisions. TheAll outstanding shares of our
common stock are and the shares of Class A common stock issuable upon
conversion of the Convertible Preferred Securities will be upon issuance, duly authorized, validly issued, fully paid and nonassessable.
Certain holders of Class B common
Preferred Stock
Our preferred stock have entered into a voting
agreement. Pursuant to the voting agreement, each stockholder who is a party has
agreed not to sell hismay be issued in series, and shares of Class B common stock to a competitor of ourseach series will have such rights and not to vote in favor of any merger, consolidation or other similar business
combination with a competitor of ours. The term "competitor" is defined to
mean any person or entity who is engaged in the funeral service, cemetery,
crematory or related lines of business that, at the time of any proposed
disposition (as defined in the voting agreement), or at any time within the
12-month period preceding the date of the proposed disposition, has any
operations
40
within a 50-mile radius of any ofpreferences as may be fixed by our locations or an entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with us, and includes any other person or entity who
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with any such person or entity.
Each share of Class B common stock is convertible at any time, at the
option of the registered holder thereof, into one share of Class A common stock.
In addition, each share of Class B common stock automatically converts into one
share of Class A common stock upon a sale or transfer to anyone other than a
permitted transferee. In any event, all outstanding shares of Class B common
stock will be automatically converted into shares of Class A common stock on
December 31, 2001.
PREFERRED STOCK
We are authorized to issue 70,000,000 shares of preferred stock. Our Board of Directors may establish, without stockholder approval, one or more classes orin the resolution authorizing the issuance of that particular series. In designating any series of preferred stock, havingour Board of Directors has the authority, without further action by the holders of our common stock, to fix the rights, dividend rate, conversion rights, rights and terms of redemption, and the liquidation preferences of that series of preferred stock.
The prospectus supplement relating to any series of preferred stock we are offering will include specific terms relating to the offering. We will file the form of the preferred stock with the SEC before we issue any of it, and you should read it for provisions that may be important to you. The prospectus supplement will include some or all of the following terms:
The issuance of preferred stock however,by us could adversely affect the voting power of holders of our common stock and restrict their rights tothe likelihood that such holders will receive dividend payments and payments upon liquidation. Itliquidation and could also have the effect of delaying, deferring or preventing a change in control.
Ascontrol of September 30, 1999, outstanding preferred stock consisted of
1,182,500 shares of Series D preferred stock. us.
Delaware Anti-Takeover Law and Charter and Bylaw Provisions
The following descriptionCompany is a
summary of the Certificate of Amendment to the Certificate of Designation for
the Series D preferred stock, and it is qualified in its entirety by reference
to that document.
DIVIDENDS. The Series D preferred stock ranks, with respect to dividend
rights and distribution of assets on liquidation, senior and prior to common
stock and junior to, or on parity with, as the case may be, any other stock of
ours designated as senior to, or on parity with, as the case may be, Series D
preferred stock. Holders of Series D preferred stock are entitled to receive
cumulative annual cash dividends ranging from $.06 to $.07 per share payable
quarterly, depending upon when such shares were issued. Upon any voluntary or
involuntary liquidation, dissolution or winding up, the holders of Series D
preferred stock then outstanding will be entitled to receive an amount of cash
per share equal to $1.00, together with all accrued and unpaid dividends, after
any distribution is made on any senior securities and before any distribution is
made on any junior securities, including common stock. As long as any shares of
Series D preferred stock are outstanding, we may not pay a dividend (other than
stock dividends in common stock) or other distribution on or repurchase common
stock, directly or indirectly, unless all past due cumulative dividends on the
Series D preferred stock have been paid. The terms of Series D preferred stock
may be amended with the consent of the holders of a majority of the outstanding
shares of Series D preferred stock.
REDEMPTION. The Series D preferred stock is mandatorily redeemable by us
on December 31, 2001 (subject to conversion rights at any time on or prior to
November 30, 2001) at a redemption price of $1.00 per share plus all accrued and
unpaid dividends to the date of redemption. The Series D preferred stock is
redeemable, in whole or in part, at our option at any time during the period
commencing on August 8, 1998 and ending on December 31, 2001 (subject to
conversion rights up to 15 days prior to the redemption date) at a redemption
price of $1.00 per share plus accrued and unpaid dividends to the date of
redemption. Partial redemptions must be pro rata.
CONVERSION. The Series D preferred stock is convertible at any time into
Class B common stock at a conversion price equal to the average market price for
the ten days preceding the date of delivery of notice of conversion on the
principal securities market on which the Class A common stock is then traded. At
September 30, 1999, the conversion price was $8.50, yielding, a total of 139,117
shares of Class B common stock that would be issuable upon the conversion of the
1,182,500 shares of Series D preferred stock outstanding.
41
VOTING RIGHTS. The Series D preferred stock has general voting rights on
all issues submitted to stockholders. The number of votes to which each share of
Series D preferred stock is entitled is a fraction of a vote determined by
dividing $1.00 by the then effective conversion price per share and dividing the
resulting fraction by 20. The Series D preferred stock is entitled, as a
separate class, to vote upon (or consent to) any amendment to the charter,
bylaws or Certificate of Designation which would adversely affect the rights or
powers of the Series D preferred stock. The requisite vote for approval is a
majority of the shares of Series D preferred stock outstanding.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
We are a Delaware corporation and areis subject to Section 203 of the Delaware General Corporation Law. In general, Section 203 prevents an "interested stockholder"“interested stockholder” (defined generally as a person owning 15% or more of the company'sCompany’s outstanding voting stock) from engaging in a "business
combination"“business combination” (as defined in Section 203) with a companythe Company for three years following the date that person becomes an interested stockholder unless:
ounless (a) before that person became an interested stockholder, the company's
boardCompany’s Board of directorsDirectors approved the transaction in which the interested stockholder became an interested stockholder or approved the business combination; o(b) upon completion of the transaction that resulted in the interested stockholderstockholder’s becoming an interested stockholder, the interested stockholder owns at least 85% of the voting stock outstanding at the time the transaction commenced (excluding stock held by directors who are also officers of the companyCompany and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or o(c) following the transaction in which that person became an interested stockholder, the business combination is approved by the company's
boardCompany’s Board of directorsDirectors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
Under Section 203, these restrictions also do not apply to certain business combinations proposed by an interested stockholder following the announcement or notification of one of certain extraordinary transactions involving the companyCompany and a person who was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of a majority of the company'sCompany’s directors, if that extraordinary transaction is approved or not opposed by a majority of the directors who were directors before any person became an interested stockholder in the previous three years or who were recommended for election or elected to succeed such directors by a majority of such directors then in office.
Our
The Company’s Board of Directors is divided into three classes. The directors of each class are elected for three-year terms, with the terms of the three classes staggered so that directors from a single class are elected at each annual meeting of stockholders. Stockholders may remove a director only for cause upon the vote of holders of at least 80% of voting power of the outstanding shares of our common stock. In general, ourthe Board of Directors, not the stockholders, has the right to appoint persons to fill vacancies on the Board of Directors.
The charterAmended and Restated Certificate of Incorporation dated July 2, 1996, as amended, (the Amended and Restated Certificate of Incorporation and amendments thereto are herein collectively called the “Charter”) provides that special meetings of holders of our common stock may be called only by ourthe Company’s Board of Directors and that only such business proposed by the Board of Directors may be considered at special meetings of holders of our
common stock.
The charterCharter provides that the only business (including election of directors) that may be considered at an annual meeting of holders of our common stock, in addition to business proposed (or persons nominated to be directors) by ourthe directors of the Company, is business proposed (or persons nominated to be directors) by holders of our common stock who comply with the notice and disclosure requirements set forth in the certificate of incorporation.Charter. In general, the charterCharter requires that a stockholder give us
42
our common stock (meaning the date on which the meeting is first scheduled and not postponements or adjournments thereof) or (if later) ten days after the first public notice of the annual meeting is sent to holders of our common stock. In general, the notice must also contain information about the stockholder proposing the business or nomination, the stockholdersstockholder’s interest in the business, and (with respect to nominations for director) information about the nominee of the nature ordinarily required to be disclosed in public proxy solicitation statements. The stockholder also must submit a notarized letter from each of the stockholdersstockholder’s nominees stating the nomineesnominee’s acceptance of the nomination and indicating the nomineesnominee’s intention to serve as director if elected.
The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation'scorporation’s certificate of incorporation or bylaws, unless the corporation'scorporation’s certificate of incorporation or bylaws requires a greater percentage. The charterCharter provides that approval by the holders of at least 66 2/3%66.67% of the voting power of ourthe outstanding voting stock of the Company is required to amend the provisions of the charterCharter previously discussed and certain other provisions.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our
We may issue warrants to purchase any combination of senior or subordinated debt securities, common stock, is American Stock
Transfer & Trust Company.
FEDERAL INCOME TAX CONSEQUENCES
Inpreferred stock or other securities. Securities warrants may be issued independently or together with debt securities, preferred stock or common stock and may be attached to or separate from any offered securities. We will issue warrants under one or more warrant agreements between us and a warrant agent that we will name in the opinionapplicable prospectus supplement or any pricing supplement.
The prospectus supplement (or the pricing supplement) relating to any warrants we are offering will include specific terms relating to the offering. We will file the form of Vinson & Elkins L.L.P., counselany warrant agreement with the SEC, and you should read the warrant agreement for provisions that may be important to us,you. The terms of the followingprospectus supplement (or pricing supplement) may include:
We may sell the securities in and disposition of the Convertible Preferred Securities. Unless otherwise stated,
this summary deals only with the Convertible Preferred Securities held as
capital assets by holders who acquire the Convertible Preferred Securities upon
original issuance. The tax treatment of a holder may vary depending on its
particular situation. This summary does not deal with special classes of
holders, such as, for example, dealers in securities or currencies, banks,
thrifts, real estate investment trusts, regulated investment companies,
insurance companies, tax exempt organizations, foreign persons, persons holding
Convertible Preferred Securities as part of a straddle or as part of a hedging
or conversion transaction or other integrated investment, or persons whose
functional currency is notoutside the United States dollar. Further, it does not
include any description of alternative minimum tax consequencesthrough underwriters or the tax lawsdealers, directly to purchasers or through agents or through a combination of any state, local or foreign government that may be applicable toof these methods. The prospectus supplement (or a pricing supplement) will include the Convertible Preferred Securities. This summary is based on the Internal Revenue
Code, Treasury Regulations thereunder and administrative and judicial
interpretations thereof as of the date hereof, all of which are subject to
change (possibly on a retroactive basis). In particular, legislation was
previously proposed by the Clinton Administration in 1996 and 1997 that, if
enacted, could have adversely affected our ability to deduct interest on the
Convertible Junior Subordinated Debentures, which would in turn have permitted
us to cause a redemption of the Convertible Junior Subordinated Debentures and
therefore cause a redemption of the Convertible Preferred Securities. See
"Description of the Convertible Preferred Securities -- Special Event
Redemption." The authorities on which this summary is based are subject to
various interpretations, and it is therefore possible that the federal income
tax treatment of the ownership and disposition of Convertible Preferred
Securities may differ from the treatment described below.
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE TAX
CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF THE CONVERTIBLE PREFERRED
SECURITIES, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, UNDER FEDERAL INCOME TAX
LAWS AND ANY APPLICABLE STATE, LOCAL, FOREIGN AND OTHER TAX LAWS, INCLUDING THE
EFFECTS OF POSSIBLE FUTURE CHANGES IN SUCH LAWS.
CLASSIFICATION OF THE TRUST
In connection with the original issuance of the Convertible Preferred
Securities, Vinson & Elkins L.L.P., counsel to us, rendered its opinion
generally to the effect that, assuming full compliance with
43
Sale Through Underwriters or other
disposition of the Convertible Preferred Securities (or the Class A common stock
to which it was converted, or upon receipt of cashDealers
If we use underwriters in lieu of fractional shares
upon conversion of the Convertible Preferred Securities into Class A common
stock) unless (i) the Non-U.S. Holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition, and
certain other conditions apply, (ii) the gain is effectively connected with the
conduct by the Non-U.S. Holder of a trade or business in the United States, or
(iii) the Company is, or during the preceding five years has been, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code and either (a) if the Convertible Preferred
48
Securities are considered to be "regularly traded interests," the Non-U.S.
Holder beneficially owns (actually or constructively), or during the preceding
five years has beneficially owned (actually or constructively), more than five
percent of the Convertible Preferred Securities, or (b) if the Convertible
Preferred Securities are not considered to be regularly traded interests, the
Non-U.S. Holder beneficially owned (actually or constructively), on the date it
acquired any Convertible Preferred Securities, Convertible Preferred Securities
having a fair market value greater than the fair market value of five percent of
the Class A common stock. A Non-U.S. Holder will not be subject to tax on any
gain recognized upon the sale or other disposition of the Company Common Stock
unless such Non-U.S. Holder is described in sub-sections (i) or (ii) above, or
if the Company is, or during the preceding five years has been, a "United
States real property holding corporation" within the meaning of section
897(c)(2) of the Code and the Non-U.S. Holder beneficially owns (actually or
constructively), or during the preceding five years has beneficially owned
(actually or constructively), more than five percent of the Company Common
Stock.
A corporation is generally considered a "United States real property
holding corporation" if the fair market value of its United States real
property interests equals or exceeds 50% of the sum of the fair market value of
its worldwide real property interests plus its other assets used or held for use
in a trade or business. It is not clear whether the Company is, or has been
during the preceding five years, a "United States real property holding
corporation" and accordingly, Non-U.S. Holders should consult their own tax
advisors regarding the investment in the Convertible Preferred Securities.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Under current law, information reporting and backup withholding will not
apply to payments of principal and interest made by the Issuer or a paying agent
to a Non-U.S. Holder on a Convertible Preferred Securities; provided that the
certification described under "Payments of Interest" above is received; and
provided further that the payor does not have actual knowledge that the holder
is a U.S. person.
Payments of the proceeds from the sale by or redemption from a Non-U.S.
Holder of Convertible Preferred Securities, or any payment of the proceeds of the sale of Class A common stock, made to or through a foreign office of a
brokersecurities, the underwriters will not be subject to information reporting or backup with-
holding. However, ifacquire the broker is (i) a U.S. person, (ii) a controlled foreign
corporationsecurities for U.S. tax purposes, or (iii) a foreign person 50% or more of
whose gross income is effectively connected with a U.S. trade or business for a
specified three-year period, information reporting (but not backup withholding)their own account. The underwriters may apply to such payments, unless (a) such broker has documentary evidence in
its records thatresell the beneficial owner is not a U.S. person and certain other
conditions are met or (b) the beneficial owner otherwise establishes an
exemption. Payments of the proceeds from the sale of Convertible Preferred
Securities or Class A common stock to or through the U.S. office of a broker are
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies as to its non-U.S. status or otherwise establishes an
exemption from information reporting and backup withholding. If paid to an
address outside the United States, dividends on the Convertible Preferred
Securities and Class A Common Stock held by a Non-U.S. Holder generally will not
be subject to the information reporting and backup withholding requirements
described in this section. However, under the Final Regulations, dividend
payments will be subject to information reporting and backup withholding unless
certain certification requirements are satisfied.
Backup withholding is not an additional tax. Rather, any amounts withheld
from a payment to a holder under the backup withholding rules are allowed as a
refund or a credit against such holder's U.S. Federal income tax, provided that
the required information is furnished to the United States Internal Revenue
Service.
49
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (a "Plan") should consider the fiduciary standards of ERISA in the
context of the Plan's particular circumstances before authorizing an investment
in the Convertible Preferred Securities. Accordingly, among other factors, the
fiduciary should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA, whether the investment could result in an
improper delegation of fiduciary authority and whether the investment would be
consistent with the documents and instruments governing the Plan.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or
"disqualified persons" under the Code ("Parties in Interest") with respect
to such Plan. A violation of these "prohibited transaction" rules may result
in an excise tax or other liabilities under ERISA and/or Section 4975 of the
Code for such persons, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church plans
(as defined in Section 3(33) of ERISA) and foreign plans (as described in
Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Code.
Under a regulation (the "Plan Assets Regulation") issued by the United
States Department of Labor (the "DOL"), the assets of the Issuer would be
deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of
the Code if "plan assets" of the Plan were used to acquire an equity interest
in the Issuer and no exception were applicable under the Plan Assets Regulation.
An "equity interest" is defined under the Plan Assets Regulation as any
interest in an entity other than an instrument which is treated as indebtedness
under applicable local law and which has no substantial equity features and
specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Issuer would not be deemed to be "plan assets" of investing
Plans if, immediately after the most recent acquisition of any equity interest
in the Issuer, less than 25% of the value of each class of equity interests in
the Trust were held by Plans, other employee benefit plans not subject to ERISA
or Section 4975 of the Code (such as governmental, church and foreign plans),
and entities holding assets deemed to be "plan assets" of any Plan
(collectively, "Benefit Plan Investors"). No assurance can be given that the
value of the Convertible Preferred Securities held by Benefit Plan Investors
will be less than 25% of the total value of such Convertible Preferred
Securities at the completion of the initial offering or otherwise. All of the
Common Securities will be purchased and held by the Company.
Certain transactions involving the Issuer could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a Plan if the Convertible Preferred Securities were
acquired with "plan assets" of such Plan and assets of the Issuer were deemed
to be "plan assets" of Plans investing in the Issuer. For example, if the
Company is a Party in Interest with respect to an investing Plan (either
directly or by reason of its ownership of its subsidiaries), extensions of
credit between the Company and the Issuer (as represented by the Convertible
Junior Subordinated Debentures and the Guarantee) would likely be prohibited by
Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable administrative exemption
(see below). Because the assets of the Issuer may be considered "plan assets"
for ERISA purposes as a result of a Plan's acquisition and holding of
Convertible Preferred Securities, a Plan fiduciary should consider (a) whether
powers which potentially may be exercised by any person or entity with respect
to the Issuer or its assets would result in such person or entity being
potentially deemed to be a fiduciary and, therefore, a Party in Interest with
respect to a Plan acquiring or holding Convertible Preferred Securities and (b)
if so, whether such acquisition and holding could result in a delegation of
fiduciary authority which is
50
impermissible under the Plan's governing instruments or any investment
management agreement with the Plan. In making such determination, a Plan
fiduciary should note that prior to a default, the Issuer Trustees will have
only limited custodial and ministerial authority with respect to the assets of
the Issuer.
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Convertible Preferred Securities,
assuming that assets of the Trust were deemed to be "plan assets" of Plans
investing in the Issuer (see above). Those class exemptions are PTCE 96-23 (for
certain transactions determined by in-house asset managers), PTCE 95-60 (for
certain transactions involving insurance company general accounts), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE 90-1
(for certain transactions involving insurance company separate accounts) and
PTCE 84-14 (for certain transactions determined by qualified professional asset
managers).
Because the Convertible Preferred Securities may be deemed to be equity
interests in the Issuer for purposes of applying ERISA and Section 4975 of Code,
the Convertible Preferred Securities may not be purchased or held by any Plan,
any entity whose underlying assets include "plan assets" by reason of any
Plan's investment in an entity (a "Plan Asset Entity") or any person investing
"plan assets" of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any
purchaser of holder of the Convertible Preferred Securities or any interest
therein will be deemed to have represented by its purchase and holding thereof
that it either (a) is not a Plan or a Plan Asset Entity and is not purchasing
such securities on behalf of or with "plan assets" of any Plan or (b) is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14. See "Transfer Restrictions." Further, the fiduciaries of any Plan or
Plan Asset Entity which may purchase or hold Convertible Preferred Securities
will be deemed as a result of such acquisition or holding to have (a) directed
the Issuer to invest in the Convertible Preferred Securities, (b) authorized and
directed any of the actions taken or which may be taken with respect to the
Issuer and the Convertible Preferred Securities by any of the Company, the
Issuer Trustees, the Debenture Trustee, or the Guarantee Trustee as contemplated
by the Indenture, the Convertible Junior Subordinated Debentures or the
Guarantee and (c) to have appointed the Issuer Trustees.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the
Convertible Preferred Securities on behalf of or with "plan assets" of any
Plan consult with their counsel regarding the potential consequences if the
assets of the Issuer were deemed to be "plan assets" and the availability of
exemptive relief under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
REGISTRATION RIGHTS
The Company and the Trust entered into a registration agreement with the
Initial Purchaser (the "Registration Agreement") in connection with the
issuance and sale of the Convertible Preferred Securities (the "Original
Offering") for the benefit of the holders of the Convertible Preferred
Securities wherein the Company and the Trust agreed, at the Company's sole
expense, to (i) file as soon as practicable, but in no event more than 60 days
after the Original Offering Date a shelf registration (the "Shelf Registration
Statement") covering resales of the Convertible Preferred Securities, the
Guarantee, the Convertible Junior Subordinated Debentures and the related Class
A common stock issuable upon conversion thereof (the "Registerable
Securities"), (ii) use their best efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act within 150 days
after the Closing Date and (iii) use their best efforts to keep effective the
Shelf Registration Statement for two years or such other period as required
under Rule 144(k) of the Securities Act or any successor rule thereto or, if
earlier, such time as all of the applicable
51
Registerable Securities have been sold thereunder. The Company will provide to
each holder for whom such Shelf Registration Statement was filed copies of this
prospectus notify each such holder when the Shelf Registration Statement for the
Registerable Securities has become effective and take certain other actions as
are required to permit unrestricted resales of the Registerable Securities. A
holder that sells Registerable Securities pursuant to the Shelf Registration
Statement will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers, will be subject to
certain of the civil liability provisions under the Securities Act in connection
with such sales and will be bound by the provisions of the Registration
Agreement that are applicable to such a holder (including certain
indemnification rights and obligations).
If (i) within 150 days of the Original Offering Date the Shelf Registration
Statement has not been declared effective by the Commission, or (ii) in the
event that a Shelf Registration Statement is declared effective by the
Commission, the Company or the Trust fails to keep such Shelf Registration
Statement continuously effective and usable (subject to certain exceptions) for
the period required by the Registration Agreement (each such event referred to
in clauses (i) and (ii) a "Registration Default"), then additional interest
("Special Interest") will accrue on the Convertible Junior Subordinated
Debentures (including in respect of amounts accruing during any Deferral
Period), and corresponding additional distributions (the "Special
Distributions") will accrue on the Trust Securities, in each case from and
including the day following such Registration Default to but excluding the day
on which such Registration Default has been cured or has been deemed to have
been cured. Special Interest and Special Distributions will be paid in cash
quarterly in arrears on each Interest Payment Date commencing with the first
Interest Payment Date following the applicable Registration Default and will
accrue at a rate such that the interest rate or distribution rate, as the case
may, will be increased 0.50% per annum of the principal amount or liquidation
amount, as applicable. Following the cure of a Registration Default, Special
Interest and Special Distributions will cease to accrue with respect to such
Registration Default.
Each Registerable Security contains a legend to the effect that the holder
thereof, by its acceptance thereof, will be deemed to have agreed to be bound by
the provisions of the Registration Agreement.
The Registration Agreement is governed by, and will be construed in
accordance with, the laws of the State of New York. The summary herein of
certain provisions of the Registration Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of the Registration Agreement, a form of which is available upon
request to the Company. See "Where You Can Find More Information."
SELLING HOLDERS
The Convertible Preferred Securities were originally issued by the Trust
and sold by Credit Suisse First Boston Corporation (the "Initial Purchaser")
in a transaction exempt from the registration requirements of the Securities
Act, to persons reasonably believed by such Initial Purchaser to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act). The
holders named below and their transferees, pledgees, donees or successors
(collectively, the "Selling Holders") may from time to time offer and sell
pursuant to this prospectus any or all of the Convertible Preferred Securities,
any Convertible Junior Subordinated Debentures and Class A common stock issued
upon conversion of the Convertible Preferred Securities.
52
The following table sets forth information with respect to the Selling
Holders of the Convertible Preferred Securities and the respective number of
Convertible Preferred Securities and Class A common stock beneficially owned by
each Selling Holder that may be offered pursuant to this prospectus.
PRINCIPAL AMOUNT
OF CONVERTIBLE NUMBER OF
PREFERRED SHARES OF CLASS A NUMBER OF
SECURITIES COMMON SHARES OF CLASS A
BENEFICIALLY STOCK OWNED COMMON
OWNED AND PRIOR TO THE STOCK OFFERED
SELLING HOLDER OFFERED HEREBY OFFERING(1) HEREBY(2)
- ------------------------------------- ---------------- ----------------- -----------------
AAM/Zazove Institutional Income Fund,
L.P................................ $ 2,000,000 97,860 97,860
AFTRA Health Fund.................... $ 625,000 30,581 30,581
AIM Capital Development Fund......... $ 5,980,000 292,601 292,601
AIM VI Capital Development Fund...... $ 20,000 978 978
Argent Classic Convertible Arbitrage
Fund L.P........................... $ 6,250,000 305,812 305,812
Argent Classic Convertible Arbitrage
Fund (Bermuda) L.P................. $ 7,500,000 366,975 366,975
Argent Growth Fund Ltd............... $ 400,000 19,572 19,572
Brown & Williamson Tobacco Corp.
Master Retirement Trust............ $ 150,000 7,339 7,339
Buffalo High Yield Fund.............. $ 1,000,000 48,930 48,930
Castle Convertible Fund, Inc......... $ 1,000,000 48,930 48,930
Century National Insurance Company... $ 420,000 20,550 20,550
The Cincinnati Insurance Company..... $ 2,500,000 122,325 122,325
First Mercury Insurance
Company--Total Return.............. $ 30,000 1,467 1,467
Forest Alternative Strategies Fund II
LP A5M............................. $ 15,000 733 733
Forest Alternative Strategies Fund II
LP A5I............................. $ 25,000 1,223 1,223
Forest Convertible Fund.............. $ 300,000 14,679 14,679
Forest Fulcrum Fund LP............... $ 810,000 39,633 39,633
Forest Global Convertible Fund Series
A-5................................ $ 1,500,000 73,395 73,395
Forest Performance Fund.............. $ 200,000 9,786 9,786
GPTC Fixed Pension Fund.............. $ 400,000 19,572 19,572
GPTC Fixed Fund of Personal Trusts... $ 100,000 4,893 4,893
Great Plains Fixed Pension Fund...... $ 400,000 19,572 19,572
The Gabelli Global Convertible
Securities Fund.................... $ 200,000 9,786 9,786
Heritage Income Growth Trust......... $ 1,250,000 61,162 61,162
Jackson National Life/Eagle Care
Equity Series...................... $ 165,000 8,073 8,073
J.P. Morgan & Co. Inc................ $ 10,000,000 980,600 489,300
LLT Limited.......................... $ 25,000 1,223 1,223
The Long Family Charitable Remainder
Trust.............................. $ 25,000 1,223 1,223
MainStay Convertible Fund............ $ 1,500,000 73,395 73,395
MainStay Strategic Value Fund........ $ 150,000 7,339 7,339
MainStay VP Convertible Portfolio.... $ 750,000 36,697 36,697
Museum of Fine Arts, Boston.......... $ 2,300 112 112
National Union Fire Insurance Co. of
Pittsburgh......................... $ 1,125,000 55,046 55,046
New Hampshire Retirement System...... $ 13,600 665 665
New York Life Separate Account #7.... $ 825,000 40,367 40,367
The Northwestern Mutual Life
Insurance Company (includes 10,000
shares held in The Northwestern
Mutual Life Insurance Company Group
Annuity Separate Account).......... $ 7,500,000 366,975 366,975
Old United Life Custody Life......... $ 250,000 12,232 12,232
(TABLE CONTINUED ON FOLLOWING PAGE)
53
PRINCIPAL AMOUNT
OF CONVERTIBLE NUMBER OF
PREFERRED SHARES OF CLASS A NUMBER OF
SECURITIES COMMON SHARES OF CLASS A
BENEFICIALLY STOCK OWNED COMMON
OWNED AND PRIOR TO THE STOCK OFFERED
SELLING HOLDER OFFERED HEREBY OFFERING(1) HEREBY(2)
- ------------------------------------- ---------------- ----------------- -----------------
Pacific Life Insurance Company....... $ 1,000,000 48,930 48,930
Parker-Hannifin Corporation.......... $ 2,800 137 137
ProMutual............................ $ 8,500 415 415
Putnam Balanced Retirement Fund...... $ 6,500 318 318
Putnam Convertible Income-Growth
Trust.............................. $ 53,600 2,662 2,662
Putnam Convertible Opportunities and
Income Trust....................... $ 6,600 322 322
Quattro Offshore Fund, Ltd........... $ 250,000 12,232 12,232
Rhone-Poulenc Rorer Pension Plan..... $ 2,900 141 141
San Diego County Employees Retirement
Association........................ $ 2,000,000 97,860 97,860
SoundShore Holdings Ltd.............. $ 3,200,000 156,576 156,576
SoundShore Opportunity Holding Fund
Ltd................................ $ 1,250,000 61,162 61,162
TQA Vantage Fund, Ltd................ $ 750,000 36,697 36,697
TQA Vantage Plus Fund, Ltd........... $ 250,000 12,232 12,232
University of Rochester.............. $ 2,200 107 107
Westfield Life Insurance Company..... $ 425,000 20,795 20,795
---------------- ----------------- -----------------
Subtotal........................ $ 64,614,000 3,652,887 3,161,587
---------------- ----------------- -----------------
Unnamed holders of Convertible
Preferred Securities or any future
transferees, pledgees, donees or
successors of or from any such
named holder(3)(4)................. $ 29,136,000 1,425,601 1,425,601
---------------- ----------------- -----------------
Total........................... $ 93,750,000 5,078,488 4,587,188
================ ================= =================
- ------------
(1) Comprises the shares of Class A common stock into which the Convertible
Preferred Securities held by such Selling Holder are convertible at the
Initial Conversion Price and, in the case of J. P. Morgan & Co. Inc.,
includes 491,300 additional shares of Class A common stock which are not
offered pursuant to this prospectus. The conversion price and the number of
shares of Class A common stock issuable upon conversion of the Convertible
Preferred Securities are subject to adjustment under certain circumstances.
Accordingly, the number of shares of Class A common stock issuable upon
conversion of the Convertible Preferred Securities may increase or decrease
from time to time.
(2) Assumes conversion into Class A common stock of the full amount of
Convertible Preferred Securities held by the Selling Holder at the Initial
Conversion Price and the offering of such shares by such Selling Holder
pursuant to the registration statement of which this prospectus forms a
part. The conversion price and the number of shares of Class A common stock
issuable upon conversion of the Convertible Preferred Securities is subject
to adjustment under certain circumstances. Accordingly, the number of shares
of Class A common stock issuable upon conversion of the Convertible
Preferred Securities may increase or decrease from time to time. Fractional
shares will not be issued upon conversion of the Convertible Preferred
Securities; rather, cash will be paid in lieu of fractional shares, if any.
(3) No such holder may offer Convertible Preferred Securities or Class A common
stock pursuant to the registration statement of which this prospectus forms
a part until such holder is included as a Selling Holder in a supplement to
this prospectus.
(4) Assumes that the unnamed holders of Convertible Preferred Securities or
Class A common stock or any future transferees, pledgees, donees or
successors of or from any such unnamed holder do not beneficially own any
Class A common stock other than the Class A common stock issuable upon
conversion of the Convertible Preferred Securities at the Initial Conversion
Price.
54
None of the Selling Holders has, or within the past three years has had,
any position, office or other material relationship with the Trust or the
Company or any of their predecessors or affiliates.
Because the Selling Holders may, pursuant to this prospectus, offer all or
some portion of the Convertible Preferred Securities or Class A common stock
they presently hold, no estimate can be given as to the amount of the
Convertible Preferred Securities or shares of Class A common stock that will be
held by the Selling Holders upon termination of any such sales. In addition, the
Selling Holders identified above may have sold, transferred or otherwise
disposed of all or a portion of their Convertible Preferred Securities or Class
A common stock since the date on which they provided the information regarding
their Convertible Preferred Securities or Class A common stock, in transactions
exempt from the registration requirements of the Securities Act.
Only Selling Holders identified above who beneficially own the Convertible
Preferred Securities or Class A common stock set forth opposite each such
Selling Holder's name in the foregoing table on the effective date of the
registration statement of which this prospectus forms a part may sell such
Convertible Preferred Securities or Class A common stock pursuant to the
registration statement. The Company may from time to time include additional
Selling Holders in supplements to this prospectus.
The Company will pay the expenses of registering the Convertible Preferred
Securities and Class A common stock being sold hereunder.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to purchasers directly by the
Selling Holders. Alternatively, the Selling Holders may from time to time offer
the Offered Securities to or through underwriters, broker/dealers or agents, who
may receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Holders or the purchasers of such Offered
Securities for whom they may act as agents. The Selling Holders and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of
the Securities Act and any profit on the sale of such securities by them and any
underwriter, broker/dealer or agent may be deemed to be underwriting discounts
and commissions under the Securities Act.
The Offered Securities may be sold by the Selling Holders from time to time in one or more transactions, including negotiated transactions, at a fixed prices, at prevailing market prices
at the time of sale,public offering price or at varying prices determined at or prior to the time of sale, including at prevailing market prices or at negotiatedprices related to prevailing market prices. Such pricesUnderwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless we inform you otherwise in the prospectus supplement, the obligations of the underwriters to purchase the securities will be determined bysubject to conditions, and the Selling Holders. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) otherwise than on
such exchanges or in the over-the-counter market or (iv) through the writing of
options. At the time a particular offering of the Offered Securities is made, if
required, a Prospectus Supplementunderwriters will be distributed which will set forthobligated to purchase all the namesoffered securities if they purchase any of the Selling Holders, the aggregate amount and type of Offered
Securities being offered, and,them. The underwriters may change from time to the extent required, the terms of thetime any initial public offering including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Holdersprice and any discounts commissions or concessions allowed or reallowed or paid to broker/dealers.
To comply
During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include overallotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters also may impose a penalty bid, which means that selling concessions allowed to syndicate members or other broker-dealers for the offered securities lawssold for their account may be reclaimed by the syndicate if the offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of certain jurisdictions, if applicable,
the Offeredoffered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, the underwriters may discontinue these activities at any time.
If we use dealers in the sale of securities, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. The dealers participating in any sale of the securities may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. We will include in the prospectus supplement the names of the dealers and the terms of the transaction.
Financial Industry Regulatory Authority Rule 5110 requires FINRA members firms (unless an exemption applies) to satisfy the filing requirements of Rule 5110 in connection with the sale of the securities included in this Registration Statement on a principal or agency basis. FINRA Notice to Members 88-101 states that in the event any
securities are to be offered or sold in such jurisdictions onlyunder this prospectus through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions ro any exemption
from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engageda member of FINRA participating in a distribution of our securities, such member is responsible for insuring that a timely filing, if required, is first made with the Offered Securities mayCorporate Finance Department of FINRA and disclosing to FINRA the following:
Further, no FINRA member firm may receive compensation in excess of that allowable under FINRA rules, including Rule 5110, in connection with the sale of the Exchangesecurities by the Company under this prospectus, which total compensation may not exceed 8%.
Direct Sales and Sales Through Agents
We may sell the securities directly. In that event, no underwriters or agents would be involved. We may also sell the securities through agents we designate from time to time. In the prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions payable by us to the agent. Unless we inform you otherwise in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. We will describe the terms of any such sales in the prospectus supplement.
Delayed Delivery Contracts
If we so indicate in the prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the rulesfuture. The contracts would be subject only to those conditions described in the prospectus supplement. The prospectus supplement will describe the commission payable for solicitation of those contracts.
Remarketing
We may offer and regulations thereunder, which provisions may limit the timing of purchases and
sales ofsell any of the Offered Securitiessecurities in connection with a remarketing upon their purchase, in accordance with a redemption or repayment by their terms or otherwise, by one or more remarketing firms acting as principals for their own accounts or as our agents. We will identify any remarketing firm, the Selling Holders. Allterms of any remarketing agreement and the foregoing may affect the marketability of the Offered Securities.
Pursuantcompensation to be paid to the Registration Rights Agreement, all expenses ofremarketing firm in the registration ofprospectus supplement. Remarketing firms may be deemed underwriters under the Offered Securities will be paid byAct.
General Information
We may have agreements with the Company, including,
without limitation, Commission filing feesagents, dealers and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders
will pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally,underwriters to indemnify them against certain civil liabilities, including certain liabilities under the
securities Act, or will be entitled to contribution in connection therewith. The
Company and the Trust will be indemnified by the Selling Holders severally
against certain civil liabilities, including certain liabilities under the Securities Act, or to contribute with respect to payments that the agents, dealers or underwriters may be required to make. Agents, dealers and underwriters may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses.
Each series of offered securities will be entitleda new issue, and other than the common stock, which is listed on the NYSE, will have no established trading market. We may elect to contributionlist any series of offered securities on an exchange, but we are not obligated to do so. It is possible that one or more underwriters may make a market in connection therewith.
Pursuanta series of offered securities. However, they will not be obligated to the Registration Rights Agreement, the Company is required to
use its best efforts to keep the Registration Statement continuously effectivedo so and may discontinue market making at any time without notice. We cannot assure you that a liquid trading market for a periodany of two years from its effective date or such shorter period thatour offered securities will terminate upon the earlier of the date on which the Offered Securities
shall have been sold pursuant to the Registration Statement or the date on which
the Offered Securities are permitted to be freely sold or distributed to the
public pursuant to any exemption from the registration requirements of the
Securities Act (including in reliance on Rule 144(k) but excluding in reliance
on Rule 144A under the Securities Act). Notwithstanding the foregoing
obligations, the Company may, under certain circumstances, postpone or suspend
the filing or the effectiveness of the Registration Statement (or any amendments
or supplements thereto) or the sale of Offered Securities pursuant thereto.
develop.
The validity of the Convertible Preferred Securities, the Convertible
Junior Subordinated Debentures, the Guarantee and the Class A common stock
issuable upon conversionissuance of the Convertible Preferred Securitiessecurities offered in this prospectus will be passed upon for us by Vinson & Elkins L.L.P. CertainIf certain legal matters of Delaware law relating to the validityin connection with an offering of the Convertible
Preferred Securitiessecurities made by this prospectus and a related prospectus supplement are passed on by counsel for the underwriters of such offering, that counsel will be passed upon by Richards, Layton & Finger, P.A.
In connection withnamed in the offering, certain matters relatingapplicable prospectus supplement related to United States
Federal income tax considerations will be passed upon for the Company by Vinson
& Elkins L.L.P.
that offering.
The consolidated financial statements and schedules of Carriage Services, Inc. includedas of December 31, 2013 and 2012, and for each of the years in the annual report on Form 10-K for thethree year period ended December 31, 19982013, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2013 have been incorporated by reference in this prospectus and elsewhere in reliance upon the registration
statement have been audited by Arthur Andersenreports of KPMG LLP, independent registered public accountants, as indicated in their reports with respect thereto, and areaccounting firm, incorporated by reference herein in relianceand upon the authority of said firm as experts in giving said reports.
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CARRIAGE SERVICES
CAPITAL TRUST
7% CONVERTIBLE PREFERRED
SECURITIES
GUARANTEED TO THE EXTENT SET FORTH
HEREINaccounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement with the SEC under the Securities Act that registers the securities we may offer pursuant to this prospectus. The registration statement, including the attached exhibits, contains additional relevant information about Carriage. The rules and regulations of the SEC allow us to omit some information included in the registration statement from the prospectus.
We file annual, quarterly and current reports, proxy statements and other information electronically with the SEC. You may read and copy these reports, proxy statements and other information at the SEC’s public reference room at 100 F Street, N.E., Washington D.C. 20549 or at the SEC’s other public reference facilities. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. Our SEC filings are available on the SEC’s website athttp://www.sec.gov. We also make available free of charge on our website, athttp://www.carriageservices.com, all materials that we file electronically with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Section 16 reports and amendments to these reports as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC. Information contained on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.
INCORPORATION BY AND CONVERTIBLE INTO
CLASS REFERENCE
The SEC allows us to “incorporate by reference” into this prospectus the information we have filed with the SEC. This means that we can disclose important information to you without actually including the specific information in this prospectus by referring you to other documents filed separately with the SEC. These other documents contain important information about us, our financial condition and the results of our operations. The information we incorporate by reference is an important part of this prospectus. You should read the information incorporated by reference for more detail. Information that we file later with the SEC will automatically update and replace the information currently in this prospectus and information previously filed with the SEC.
We incorporate by reference into this prospectus the documents listed below, any filings we make with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all such documents we may file with the SEC after the date on which the registration statement that includes this prospectus was initially filed with the SEC until the termination of all offerings under such registration statement (excluding any portions thereof that are deemed to be furnished and not filed):
You may obtain any of the documents incorporated by reference in this prospectus from the SEC through the SEC’s website at the address provided above. You may also request a copy of any document incorporated by reference in this prospectus (including exhibits to those documents specifically incorporated by reference in this document), 1999
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Carriage Services, Inc.
3040 Post Oak Blvd., Suite 300
Houston, Texas 77056
(713) 332-8400
You should rely only on the information provided in and incorporated by reference into this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date indicated on these documents.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
DISTRIBUTION
The following table sets forth the estimated expenses (other than underwriting discounts and commissions) payable by Carriage Services, Inc. in connection with the distribution of the securities covered byoffering described in this Registration Statement. All of the expenses will be borne byamounts shown below are estimates, with the Company except as otherwise indicated.
Registration fee..................... $ 26,584
Fees and expensesexception of accountants..... 5,000
Fees and expenses of legal counsel... 30,000
Fees and expenses of Trustee and
counsel............................ 5,000
Printing and engraving expenses...... 5,000
Miscellaneous........................ 8,937
----------
Total........................... $ 80,521
==========
ITEM the SEC registration fee.
Securities and Exchange Commission registration fee | $ | 45,080 | ||
Financial Industry Regulatory Authority fee | * | |||
Printing Expenses | * | |||
Accounting fees and expenses | * | |||
Legal fees and expenses | * | |||
Trustee fees and expenses | * | |||
Miscellaneous expenses | * | |||
|
| |||
Total | * | |||
|
|
(*) | Estimated expenses are not presently known. The foregoing sets forth the general categories of expenses (other than underwriting discounts and commissions) that we anticipate to incur in connection with the offering of securities under this registration statement. An estimate of the aggregate expenses in connection with the issuance and distribution of the securities being offered will be included in the applicable prospectus supplement. |
15. INDEMNIFICATION OF DIRECTORSOFFICERS AND OFFICERS.
THE COMPANY
DIRECTORS
Item 20. Indemnification of Directors and Officers
The Company is empoweredfollowing summaries are qualified in their entirety by reference to the complete text of any statutes referred to below and the organizational documents of Carriage.
Indemnification of Directors and Officers of Carriage Services, Inc., a Delaware corporation
Section 145 of the Delaware General Corporation Law (the "DGCL"“DGCL”), subject to the procedures and limitations stated therein, to provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that suchthe person is or was a director, officer, employee or other agent of the company,corporation (an “officer or is or was serving atdirector”), if the request of the company as a director,
officer, employee or agent of another corporation or other enterprise, against
reasonable expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually incurred by him in connection with such action, suit
or proceeding, if such director, officer, employee or agentperson acted in good faith and in a manner hethe person reasonably believed to be in or not opposed to the best interests of the companycorporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe histhe person’s conduct was unlawful. The Company is
required by Section 145 to indemnify any personIndemnification may be made against reasonable expenses, (including attorneys' fees)including attorneys’ fees, judgments, fines and settlements paid in settlement actually and reasonably incurred by himthe person in connection with the proceeding; except, in an action by or in the right of the corporation, indemnification is limited to expenses, including attorneys’ fees, actually and reasonably incurred in the defense or settlement of the action. Additionally, no indemnification may be made without court order with respect to any claim, issue, or matter as to which the person shall have been adjudged to be liable to the corporation in the performance of that person’s duty to the corporation and its shareholders, or with respect to any settlement or expenses incurred in defending a pending action which settled without court approval. The termination of any action, suit or proceeding in which he isby judgment, order, settlement or conviction or upon a party because he isplea of nolo contendere or wasits equivalent does not, of itself, create a presumption that the person did not meet the standard of conduct required by the DGCL.
Section 145(c) provides that, to the extent that a present or former officer or director officer, employee or agent of the company or is or was serving at the
request of the company as a director, officer, employee or agent of another
corporation or other enterprise, if he has been successful on the merits or otherwise in the defense of theany action, suit or proceeding.proceeding, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by such person in connection therewith. Section 145145(b) adds that a court may also allowsorder indemnification if it determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances.
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Under Section 145(d) of the DGCL, unless ordered by a court, a corporation may not indemnify an officer or director if the person’s conduct did not satisfy the standards set forth above. The determination as to whether indemnification is permissible must be made as follows: (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum; (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (4) by the stockholders.
Section 145(g) provides that a corporation may purchase and maintain insurance on behalf of any sucha person who is or was an officer or director of the corporation against any liability asserted against himsuch person and incurred by such person in any such capacity, or arising out of hissuch person’s status as such, whether or not the corporation would have the power to indemnify himsuch person against such liability under the provisions ofDGCL. Section 145. In addition, Section 145 provides145(f) adds that the indemnification provided by, or granted pursuant to, its
provisionsthe DGCL is not exclusive of any other rights of indemnification to which a personthose seeking indemnification may be entitled under any bylaw, agreement, vote of shareholdersstockholders or disinterested directors or otherwise.
otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.
Article 10X of the Company's charterour Amended and Restated Certificate of Incorporation (the “Charter”) provides that the company shallwe will indemnify and hold harmless any person who was, is, or is threatened to be made a party to a proceeding by reason of the fact that he or sheshe: (1) is or was a director or officer of the companyCompany; or (2) while a director or officer of the company,Company, is or was serving at the request of the companyCompany as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, to the fullest extent permitted under the DGCL. Article X further provides that we may also indemnify any employee or agent to the fullest extent permitted under the DGCL. The right to indemnification under Article 10X of the charterCharter is a contract right which includes, with respect to directors and officers, the right to be paid by the companyCompany the expenses incurred in defending any such proceeding in advance of its disposition.
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The Declarationdisposition to the maximum extent permitted under the DGCL.
Article 8.0 of Trustour Amended and Restated By-Laws, as amended (the "Declaration"“By-Laws”), also provides that no Trustee,
affiliate of any Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, or any employee
or agent of the Trust or its affiliates (each an "Indemnified Person") shall
be liable, responsible or accountable in damages or otherwise to any officer,
director, shareholder, partner, member, representative or agent of the Trust,
any affiliate of the Trust or any holder of Trust Securities for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by the Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions. Thewe will indemnify our directors and officers, and are authorized to indemnify employees and agents, to the fullest extent permitted by the DGCL, except: (1) for any breach of the Company and the Regular Trustees are covered by insurance policies
indemnifying them against certain liabilities, including certain liabilities
arising under the Securities Acttheir duty of 1933, as amended (the "Securities Act"),
which might be incurred by them in such capacities and against which they cannot
be indemnified byloyalty to the Company or the Trust.Company’s stockholders; (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; or (3) for any transaction from which such director or officer derived an improper benefit. The Selling Holders will be
indemnified byBy-Laws also permit our Board of Directors to authorize the Company and the Trust, jointly and severally, against certain
civil liabilities, including certain liabilities under the Securities Act,advancement of expenses to any director or will be entitled to contribution in connection therewith. The Company and the
Trust will be indemnified by the Selling Holders severally against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith.
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filingofficer of the Company, undersubject to a written undertaking to repay such advance if it is later determined that the Securities Act orindemnitee does not satisfy the Exchange Act as indicated
in parenthesis:
EXHIBIT NO. DESCRIPTION
- -------------------------------------------------------------
4.1 -- Amended and Restated Certificatestandard of Incorporation, as amended, of
Carriage Services, Inc. (incorporated
by reference to Exhibit 3.1 to
Carriage Services, Inc.'s Annual
Report on Form 10-Kconduct required for its fiscal
year ended December 31, 1996).
4.2 -- Certificate of Amendment dated May 9,
1996 (incorporated by reference to
Exhibit 10.2 to Carriage Services,
Inc.'s Quarterly Report on Form 10-Q
for its fiscal quarter ended
September 30, 1997).
4.3 -- Certificate of Decrease, reducing the
authorized Series D Preferred Stock
(incorporated by reference to Exhibit
10.3 to Carriage Services, Inc.'s
Quarterly Report on Form 10Q for its
fiscal quarter ended September 30,
1997).
4.4 -- Certificate of Decrease, reducing the
authorized Series F Preferred Stock
(incorporated by reference to Exhibit
10.4 to Carriage Services, Inc.'s
Quarterly Report on Form 10-Q for its
fiscal quarter ended September 30,
1997).
4.5 -- Amended and Restated Bylaws of
Carriage Services, Inc. (incorporated
by reference to Exhibit 3.2 to
Carriage Services, Inc.'s
Registration Statement on Form S-1
(File No. 333-05545)).
*4.6 -- Certificate of Trust of Carriage
Services Capital Trust.
*4.7 -- Amended and Restated Declaration of
Trust of Carriage Services Capital
Trust, dated as of June 3, 1999,
among Carriage Services, Inc. as
Sponsor, Wilmington Trust Company as
Property Trustee, Wilmington Trust
Company as Delaware Trustee, and Mark
W. Duffey, Thomas C. Livengood and
Terry E. Sanford as Administrative
Trustees.
*4.8 -- Indenture for the Convertible Junior
Subordinated Debentures due 2029,
dated as of June 3, 1999, among
Carriage Services, Inc. as Issuer,
and Wilmington Trust Company as
Indenture Trustee.
4.9 -- Form of Carriage Services, Inc. Class
A common stock Certificate
(incorporated by reference to Exhibit
4.1 to Carriage Services, Inc.'s
Registration Statement on Form S-1
(File No. 333-05545).
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4.10 -- Form of Carriage Services Capital
Trust 7% Convertible Preferred
Securities (included in Exhibit 4.7).
4.11 -- Form of Carriage Services, Inc.
Convertible Junior Subordinated
Debentures due 2029 (included in
Exhibit 4.8)
*4.12 -- Preferred Securities Guarantee, dated
as of June 3, 1999, between Carriage
Services, Inc. as Guarantor, and
Wilmington Trust Company as Guarantee
Trustee.
*4.13 -- Common Securities Guarantee, dated as
of June 3, 1999, by Carriage
Services, Inc. as Guarantor.
*4.14 -- Amendment No. 1 to Amended and
Restated Declaration of Trust of
Carriage Services Capital Trust
included as Exhibit 4.7 herein.
**4.15-- Amendment No. 2 to Amended and
Restated Declaration of Trust of
Carriage Services Capital Trust.
*5.1 -- Opinion of Vinson & Elkins L.L.P. asindemnification. Additionally, pursuant to the legalityBy-Laws, the Chairman of our Board of Directors is authorized to enter into indemnification contracts with each director and officer of the Convertible
Preferred Securities, the Convertible
Junior Subordinated Debentures,
Preferred Securities Guarantee and
Class A common stock being registered
hereby.
*5.2 -- OpinionCompany.
16. EXHIBITS
The following is a list of Richards, Layton & Finger,
P.A. as to certain matters of
Delaware law.
**8.1 -- Opinion of Vinson & Elkins L.L.P. as
to certain tax matters.
*10.1 -- Registration Rights Agreement, dated
June 3, 1999, by and among Carriage
Services Capital Trust, Carriage
Services, Inc. and Credit Suisse
First Boston Corporation.
**23.1 -- Consent of Arthur Andersen LLP,
independent auditors.
23.2 -- Consent of Vinson & Elkins L.L.P.
(included in the opinionsexhibits filed as Exhibits 5.1 and 8.1).
24.1 -- Powers of Attorney (included on the
signature page of the initial filinga part of this Registration Statement)
*25.1 -- Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939, as amended, of Wilmington Trust
Company, as Indenture Trustee under
the Convertible Junior Subordinated
Debentures Indenture due 2029.
*25.2 -- Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939, as amended, of Wilmington Trust
Company as Property Trustee under the
Amended and Restated Declaration of
Trust.
*25.3 -- Form T-1 Statement of Eligibility
under the Trust Indenture Act of
1939, as amended, of Wilmington Trust
Company as Preferred Guarantee
Trustee under the Preferred
Securities Guarantee.
- ------------
* Previously filed.
** Filed herewith.
ITEM registration statement.
1.1** | Form of Underwriting Agreement. | |
4.1* | Form of Senior Debt Indenture. | |
4.2* | Form of Subordinated Debt Indenture. | |
4.3** | Form of Senior Debt Securities. | |
4.4** | Form of Subordinated Debt Securities. | |
4.5** | Form of Warrant Agreement. | |
4.6 | Amended and Restated Certificate of Incorporation, as amended, of the Company. Incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 1996. | |
4.7 | Certificate of Amendment dated May 7, 1997. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 1997. |
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4.8 | Certificate of Amendment dated May 7, 2002. Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2002. | |
4.9 | Amended and Restated Bylaws of the Company. Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-05545). | |
4.10 | Amendments to the Bylaws of the Company effective December 18, 2000. Incorporated by reference to Exhibit 3.9 to the Company’s Annual Report on Form 10-K for its year ended December 31, 2001. | |
4.11 | Amendments to the Bylaws of the Company effective May 20, 2008. Incorporated by reference to Exhibit to the Company’s current report on Form 8-K filed May 28, 2008. | |
5.1* | Opinion of Vinson & Elkins L.L.P. | |
12.1* | Statement Regarding the Computation of Ratio of Earnings to Fixed Charges. | |
23.1* | Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1). | |
23.2* | Consent of KPMG LLP. | |
24.1* | Power of Attorney (included on the signature pages of this Registration Statement). | |
25.1*** | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Trustee under the Senior Indenture for Senior Debt Securities. | |
25.2*** | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Trustee under the Subordinated Indenture for Subordinated Debt Securities. |
* | Filed herewith. |
** | To be filed as an Exhibit to a Current Report on Form 8-K or in a post-effective amendment to this registration statement. |
*** | To be filed under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended. |
17. UNDERTAKINGS
(a)
The registrantsundersigned registrant hereby undertake:
undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstandingstatement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the CommissionSEC pursuant to Rule 424(b) of the Securities Act if, in the aggregate, the changes in volume and price
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"Calculation“Calculation of Registration Fee"Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
PROVIDED, HOWEVER,
provided, however, that the undertakings set forth in clauses paragraphs (1)(i), (1)(ii) and (ii)(1)(iii) above do not apply if the registration statement is on Form S-3 and the information required to be included in a post-effective amendment by those clausesparagraphs is contained in periodic reports filed with or furnished to the Securities and Exchange CommissionSEC by the Companyregistrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
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(2) That, for the purpose of determining any liability under the Securities Act, of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The registrant hereby undertakes that:
(1)
(4) That, for purposesthe purpose of determining any liability under the Securities Act of 1933, the information omitted from the form ofto any purchaser:
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance uponon Rule 430A and
contained in a form of prospectus filed by the registrants430B relating to an offering made pursuant to Rule 424(b)415(a)(1)(i), (vii), or (4) or 497(h) under(x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of thisand included in the registration statement as of the time it was declared
effective.
(2) That, for purposeearlier of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains adate such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities offered therein,in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c)Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of any registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, of 1933, each filing of the Company'sundersigned registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan'splan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(d)
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrantsregistrant pursuant to the foregoing provisions, set forth in Item 15, or otherwise, the registrants haveregistrant has been advised that in the opinion of the Securities and Exchange CommissionSEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by athe registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(e)
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus or any prospectus supplement filed as part of this registration statement in reliance on Rule 430A and contained in a form of prospectus or prospectus supplement filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee under each of the indentures to act under subsection (a) of Section 310 of the Trust Indenture Act ("Act"of 1939, as amended (the “Act”), in accordance with the rules and regulations prescribed by the CommissionSEC under Section 305(6)305(b)(2) of the Act.
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SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
Carriage Services, Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 andRegistrant has duly caused this Registration Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Houston, State of Texas, on October 25, 1999.
CARRIAGE SERVICES, INC.
By: /s/ MELVINApril 4, 2014.
CARRIAGE SERVICES, INC. | ||
By: | /s/ L. William Heiligbrodt | |
L. William Heiligbrodt | ||
Executive Vice President and Secretary |
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Melvin C. PAYNE
----------------------
MELVIN C. PAYNE
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
Payne and L. William Heiligbrodt, and each of them acting individually, as his or her true and lawful attorney-in-fact and agent, with full power of each to act alone, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement (including post-effective amendments and any related registration statements filed pursuant to Rule 462 and otherwise), and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their substitute or resubstitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statementregistration statement has been signed below by the following persons on behalf of the Registrant and in the capacities indicatedand on the 25th day of October, 1999.
date indicated.
Signature | Title with Carriage Services, Inc. | Date | ||
/s/ Melvin C. | Chairman of the Board, Chief Executive Officer | April 4, 2014 | ||
Melvin C. Payne | and President | |||
(Principal Executive Officer) | ||||
/s/ L. William Heiligbrodt | Executive Vice President and Secretary | April 4, 2014 | ||
L. William Heiligbrodt | (Principal Financial Officer) | |||
/s/ Viki K. Blinderman | Chief Accounting Officer | April 4, 2014 | ||
Viki K. Blinderman | (Principal Accounting Officer) | |||
/s/ David J. DeCarlo | Vice Chairman of the Board and | April 4, 2014 | ||
David J. DeCarlo | ||||
/s/ Donald D. Patteson, Jr. | Director | April 4, 2014 | ||
Donald D. Patteson, Jr. | ||||
/s/ Barry K. Fingerhut | Director | April 4, 2014 | ||
Barry K. Fingerhut | ||||
/s/ Richard W. | Director | April 4, 2014 | ||
Richard W. |
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Exhibit Index
The following is a list of 1933,exhibits filed as amended, Carriage Services
Capital Trust has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Citya part of Houston,
State of Texas, on October 25, 1999.
CARRIAGE SERVICES CAPITAL TRUST
By: /s/ TERRY E. SANFORD
------------------------
TERRY E. SANFORD,
AS ADMINISTRATIVE TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on the 25th day of October, 1999.
SIGNATURES TITLE
--------------- ---------
/s/MARK W. DUFFEY Administrative Trustee
--------------------------
MARK W. DUFFEY
/s/THOMAS C. LIVENGOOD Administrative Trustee
--------------------------
THOMAS C. LIVENGOOD
/s/TERRY E. SANFORD Administrative Trustee
--------------------------
TERRY E. SANFORD
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 1, 1999
included in Carriage Services Inc.'s Form 10-K for the year ended December 31,
1998, and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
October 25, 1999
1.1** | Form of Underwriting Agreement. | |
4.1* | Form of Senior Debt Indenture. | |
4.2* | Form of Subordinated Debt Indenture. | |
4.3** | Form of Senior Debt Securities. | |
4.4** | Form of Subordinated Debt Securities. | |
4.5** | Form of Warrant Agreement. | |
4.6 | Amended and Restated Certificate of Incorporation, as amended, of the Company. Incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 1996. | |
4.7 | Certificate of Amendment dated May 7, 1997. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 1997. | |
4.8 | Certificate of Amendment dated May 7, 2002. Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2002. | |
4.9 | Amended and Restated Bylaws of the Company. Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-05545). | |
4.10 | Amendments to the Bylaws of the Company effective December 18, 2000. Incorporated by reference to Exhibit 3.9 to the Company’s Annual Report on Form 10-K for its year ended December 31, 2001. | |
4.11 | Amendments to the Bylaws of the Company effective May 20, 2008. Incorporated by reference to Exhibit to the Company’s current report on Form 8-K filed May 28, 2008. | |
5.1* | Opinion of Vinson & Elkins L.L.P. | |
12.1* | Statement Regarding the Computation of Ratio of Earnings to Fixed Charges. | |
23.1* | Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1). | |
23.2* | Consent of KPMG LLP. | |
24.1* | Power of Attorney (included on the signature pages of this Registration Statement). | |
25.1*** | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Trustee under the Senior Indenture for Senior Debt Securities. | |
25.2*** | Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of the Trustee under the Subordinated Indenture for Subordinated Debt Securities. |
* | Filed herewith. |
** | To be filed as an Exhibit to a Current Report on Form 8-K or in a post-effective amendment to this registration statement. |
*** | To be filed under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended. |
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