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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
TENET HEALTHCARE CORPORATION
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(Name of Registrant as Specified In Its Charter)
RICHARD B. SILVER
TENET HEALTHCARE CORPORATION
3820 STATE STREET
SANTA BARBARA, CALIFORNIA 93105
(805) 563-7000
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[TENET LETTERHEAD]
Jeffrey C. Barbakow
Chairman of the Board
Chief Executive Officer
August 30, 2000
Dear Fellow Shareholder:
Recently, M. Lee Pearce, M.D., of Miami Beach, Fla., an individual
shareholder, launched a proxy contest to elect himself and his associates to
Tenet's Board of Directors at our annual shareholders meeting on Oct. 11, 2000.
According to his filing, Dr. Pearce beneficially owns less than one-tenth of one
percent of Tenet's shares outstanding; his associates own no Tenet shares. His
committee, which he calls the "Tenet Shareholder Committee," is a committee of
one, with himself as the sole member.
HE IS ATTEMPTING TO REMOVE ME AND TWO OTHER DISTINGUISHED TENET DIRECTORS
FROM YOUR BOARD. The others are Father Lawrence Biondi, S.J., an educator who
since 1987 has been president of Saint Louis University, home of one of the
nation's finest medical schools; and Van B. Honeycutt, chairman, president and
chief executive officer of Computer Sciences Corporation, a publicly traded
company that is a leading provider of management consulting and information
technology solutions and services to industries and governments worldwide.
YOUR BOARD HAS CONSIDERED THE CRITICISMS MADE BY DR. PEARCE IN HIS
PROXY MATERIALS AND BELIEVES THEY ARE UNWARRANTED. If you know more about Dr.
Pearce, it may help you understand why we believe he may have launched this
proxy contest:
- Dr. Pearce has been a dissident shareholder in a number of
companies. Based on our research, he has a history of waging proxy
fights, initiating litigation and extracting a substantial premium
for his shares that was not available to other shareholders.
- Dr. Pearce and/or his associated entities have been involved in
protracted business disputes and litigation with Tenet. One of Dr.
Pearce's entities recently built an outpatient center across the
street from one of Tenet's hospitals in South Florida and
attempted to compete with that hospital. According to public
filings, the outpatient center and related businesses lost $25
million before being sold to long-time associates of Dr. Pearce
for $1, the assumption of liabilities and 79 percent of the
"adjusted proceeds" from lawsuits against "third parties,"
including Tenet.
WE BELIEVE DR. PEARCE'S ABILITY TO ACT INDEPENDENTLY IN THE BEST INTERESTS
OF ALL SHAREHOLDERS IS SUSPECT DUE TO THIS TRACK RECORD OF LITIGATION AND
COMPETITION WITH YOUR COMPANY.
FURTHER, WE BELIEVE TENET'S SUCCESS IN ENHANCING OPERATIONS AND MAXIMIZING
VALUE FOR OUR SHAREHOLDERS OFFERS THE BEST REBUTTAL TO DR. PEARCE'S CRITICISMS.
We have posted strong financial results and have implemented a compelling plan
to ensure that Tenet remains at the forefront of health care delivery. For
example:
- Tenet's earnings per share from operations grew 10 percent in fiscal
2000, in spite of absorbing a third straight year of
government-mandated Medicare cuts. In the two
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most recent quarters, growth in earnings per share from operations
accelerated to 20 percent or more. Clearly, our operational
strategies are working.
- We have excellent cost controls in place. Both labor and supplies
expense ratios have declined, despite upward pressure due to a
nationwide nurse shortage and rising pharmaceutical and technology
costs.
- Our cash flow from operations reached record highs in fiscal 2000.
- Our strong balance sheet grew even stronger in fiscal 2000. We paid
down $787 million in debt, improving key financial and credit
ratios.
- We have strong, competitive hospitals. Nearly two-thirds of our
facilities are in markets where Tenet holds the No. 1 or a strong
No. 2 market share position.
- Tenet's compliance and ethics programs are regarded as models in
this highly regulated industry.
- From Aug. 18, 1999 through Aug. 18, 2000, the year preceding
Dr. Pearce's filing, the value of Tenet's shares rose more than 89
percent. We are pleased by the overwhelming support we have received
from the investment community, including 24 "buy" or "strong buy"
recommendations from brokerage analysts.
Your board serves at the pleasure of the shareholders and is responsible
for serving the interests of ALL Tenet shareholders. It is a responsibility we
take very seriously. Since I became chairman and CEO in 1993, we have built a
strong board made up overwhelmingly of outside directors who are well-respected,
independent, successful individuals with the utmost integrity.
THEREFORE, WE URGE YOU TO VOTE FOR YOUR BOARD AND MANAGEMENT TEAM: JEFFREY
C. BARBAKOW, TENET CHAIRMAN AND CHIEF EXECUTIVE OFFICER; FATHER LAWRENCE BIONDI,
S.J.; AND VAN B. HONEYCUTT.
PLEASE VOTE THE WHITE PROXY CARD TODAY. PLEASE DO NOT RETURN ANY GOLD PROXY
CARD FOR ANY REASON. ONLY YOUR LATEST DATED PROXY CARD WILL BE COUNTED. IF YOU
HAVE QUESTIONS, PLEASE CALL OUR PROXY SOLICITOR:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street, 10th Floor
New York, NY 10004
(800) 223-2064 (Toll Free)
Banks and brokerage firms please call collect:
(212) 440-9800
We appreciate your continued support, and we look forward to a bright
future for your company.
Sincerely,
/s/ JEFFREY C. BARBAKOW
Jeffrey C. Barbakow
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