2018 Annual Meeting of Shareholders

Proposal 6: Proposal to reduce the supermajority vote requirements to approve business combinations with interested shareholders

The Board of Directors is submitting proposed amendments to Article Eight and Article Twelve, Section 1(e) of our Restated Articles of Incorporation (the “Articles of Incorporation”) to reduce the supermajority vote requirement for approval of business combinations with a 10% or greater shareholder of the Company (an “Interested Shareholder”), so that, once the amendments are fully effective, such transactions must be approved by the affirmative vote of the holders of at least two-thirds of all of the outstanding shares of capital stock entitled to vote (and, relatedly, any amendment to this provision shall require the affirmative vote of the holders of at least two-thirds of all of the outstanding shares of capital stock entitled to vote). Currently, the merger or consolidation of the Company, or the exchange by the Company of its securities, with an Interested Shareholder must be approved by the affirmative vote of the holders of at least four-fifths of all outstanding shares of capital stock entitled to vote (and, relatedly, any amendment to this provision currently requires the affirmative vote of the holders of at least four-fifths of all of the outstanding shares of capital stock entitled to vote).

              This proposal results from an ongoing review of corporate governance matters by the Nominating and Corporate Governance Committee (the “Committee”) and the Board. In its review, the Committee and the Board considered the advantages of maintaining the current, higher supermajority vote requirement in light of SCI’s current circumstances, including that such requirement may protect minority shareholders from an Interested Shareholder acting in its own self-interest to the detriment of other shareholders and that extraordinary transactions should have the support of a broad consensus of the Company’s shareholders. While the Committee and the Board continue to believe that these are important considerations, the Committee and the Board also considered the potential advantages of reducing the supermajority vote requirement in light of SCI’s current circumstances, including that the current requirement is burdensome to achieve, particularly with respect to transactions that were approved in advance by the Board. The Committee and the Board also considered the views of our shareholders regarding the current, higher supermajority voting requirement to approve business combinations with Interested Shareholders, including the support of the holders of a majority of our outstanding Common Stock for a shareholder proposal to eliminate this requirement at our 2017 Annual Meeting of Shareholders. In addition, the Committee and the Board considered the views expressed in recent outreach efforts to holders of approximately 62% of our capital stock. Finally, if this proposal is approved, then the Committee and the Board believe that it would be consistent with our ongoing efforts to adopt “best practices” in corporate governance.

              After carefully considering these factors, including consideration of advice from outside experts, the Committee recommended to the Board the reduction of the supermajority vote requirement for the approval of business combinations with Interested Shareholders. A copy of the proposed amendments to our Articles of Incorporation is attached to this Proxy Statement as Annex G. Our Board has approved the amendment to our Articles of Incorporation and recommends that shareholders adopt the amendments to our Articles of Incorporation by voting in favor of this proposal.

              Under Article Twelve, Section 1(e) of our Articles of Incorporation, this proposal must be approved by the affirmative vote of the holders of at least four-fifths of the outstanding shares of capital stock of the Company entitled to vote thereon. Accordingly, this proposal will be approved, and the proposed amendments to the Articles of Incorporation adopted, upon the affirmative vote of the holders of four-fifths of our outstanding capital stock. Abstentions, broker non-votes and failures to vote will have the same effect of an “Against” vote on this proposal. This proposal is not conditioned upon the approval of any other proposal in this Proxy Statement. If this proposal is not approved, the affirmative vote of the holders of at least four-fifths of our outstanding shares of capital stock will continue to be required to approve business combinations with Interested Shareholders.

The Board of Directors recommends a vote "FOR" the proposal.