SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Name of Registrant as Specified in Its Charter:
Universal Health Realty Income Trust
Name of Person(s) Filing Proxy Statement:
Culinary Workers Union, Local 226
Payment of Filing Fee (check the appropriate box)
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
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Preliminary Proxy Statement
For release to shareholders 1/23/99
Culinary Workers Union Local 226
1630 S. Commerce Street
Las Vegas, Nevada 89102
(702) 387-7064 tel.
(702) 385-1197 fax.
NOTICE OF INTENDED PROXY CONTEST
AT
UNIVERSAL HEALTH REALTY INCOME TRUST
(NYSE:UHT)
IS THE TRUST BEING RUN BY "INDEPENDENT" TRUSTEES?
To Fellow UHT shareholders:
We intend to solicit proxies at the next annual meeting for
the following proposal:
RESOLVED, that shareholders recommend the trustees support
amendment of the Declaration of Trust to prohibit so-called
"independent" trustees from having any business relationship
with the Trust's Advisor. "Business relationship" includes
not only personally doing business with the Advisor, but
also being an executive of a corporation (or other entity)
which does business with the Advisor, or which has on its
own board someone who is an executive of the Advisor.
Currently the Trust has an "Advisor", Universal Health Services,
Inc. ("UHS"), which is also the Trust's primary tenant. We
believe the best way to ensure that all transactions between the
Trust and UHS are fair to shareholders is to have a majority of
trustees be truly independent of UHS.
<PAGE>
We question whether such independence is achieved by the
current Declaration of Trust, the document governing the Trust.
While it requires that a majority of trustees be "independent",
it uses a narrow definition of that term.<F1>
Thus, for example, "independent" trustee Michael Walker is
CEO of Genesis Health Ventures, which has on its board of
directors the CEO of UHS, Alan Miller. Miller has even served on
the Genesis executive compensation committee which sets Walker's
pay.
"Independent" trustee James Dalton, Jr. is the CEO of Quorum
Health Group, which is involved in a 3-hospital joint venture
with UHS in the Las Vegas area.
Quorum's relationship with UHS was not disclosed in the
Trust's last proxy statement to shareholders. Are there other
undisclosed relationships?
We in no way suggest these trustees made improper decisions
- -- that would require analyzing data to which we do not have
access.
Rather, we simply believe shareholders should not have to
worry that "independent" trustees are favoring UHS at the Trust's
expense because of their private business relationships with UHS.
Please support our proposal to avoid conflicts-of-interest
among independent trustees overseeing the Trust.
------------------------------
<F1> That definition is as follows: "'Independent Trustee' shall
mean a Trustee who, in his individual capacity, (i) is not an
Affiliate of the Advisor and (ii) does not perform any services
for the Trust except as Trustee." The definition is further
narrowed by the Declaration defining "Affiliate" to ignore joint
venturers, suppliers, contractors, consultants, customers, joint
venturers, and other business relationships which might make the
trustee feel beholden to UHS: "'Affiliate' shall mean, as to any
Person, (i) any other Person directly or indirectly controlling,
controlled by or under common control with such person, (ii) any
other Person that owns beneficially, directly or indirectly, five
percent (5%) or more of the outstanding capital stock, shares or
equity interests of such Person, or (iii) any officer, director,
employee, general partner or trustee of such Person or of any
Person controlling, controlled by or under common control with
such Person (excluding trustees who are not otherwise an
Affiliate of such Person)."
<PAGE>
SUMMARY OF RELATIONSHIP BETWEEN THE TRUST AND UHS
In 1998, UHS subsidiaries were the principal tenants of 7 of
the 9 hospitals owned by the Trust. These leases accounted for
79% of the Trust's total revenues for the 5 years ended 12/31/97.
The Trust's officers are all also UHS officers. The Advisory
Agreement between the Trust and UHS is renewable annually,
subject to approval by a majority of independent trustees. The
Trust paid UHS $1.1 million for advisory services in FY 1997.
As of the last proxy statement, 2 of the 7 trustees were UHS
executives and therefore not deemed "independent" under the
current declaration of trust.
More information about the trustees and the relationship
between UHS and the Trust is contained in the Trust's last proxy
statement at pp. 3-4 and pp. 13-15, incorporated herein by
reference.*
* You may obtain a copy of these materials from the SEC's EDGAR
database (www.sec.gov), or by contacting us at the address or
phone above.
VOTING PROCEDURE
We intend to solicit for the proposal using our own proxy
card and a revised proxy statement: look for these after you
receive your proxy card from the Trust. The Trust's proxy card
may not include the proposal. We intend to solicit at least a
majority of the voting power of the outstanding stock. The
Trust's annual shareholders meetings have occurred in early June
at the offices of UHS and the Trust, 367 South Gulph Road, King
of Prussia PA 19406, (610) 265-0688 (tel).
Passage of the proposal will require a favorable vote by a
majority of stock represented at the meeting. The proposal is
non-binding.<FN2>
A shareholder may revoke a proxy card any time prior to the
count at the meeting by (a) executing a new card; (b) sending
written notice of revocation to the Company's secretary, or (c)
attending the meeting and voting there.
- -----------------------------
<FN2> The super-majority requirement of the declaration of trust
makes it impractical to amend the declaration without trustee
support: the declaration provides it may not be amended by
shareholders unless 95 percent of stock eligible to vote actually
votes for an amendment. This voting requirement is lowered to 50%
if all (or all but one) trustees approve of the amendment.
<PAGE>
PROXY SOLICITATION
This solicitation is conducted by Culinary Workers Local
226, which owns 56 shares in the Trust. Culinary represents over
40,000 employees in Las Vegas, including approximately 100
employees at UHS' Valley Hospital. Culinary is negotiating with
UHS for a new agreement. Culinary has petitioned to compel
arbitration over a grievance concerning UHS's failure to apply
the agreement to Desert Springs Hospital after a majority of
Desert's unit employees designated Culinary as their
representative. No work stoppage or picketing has occurred.
Culinary does not ask for your support in these matters, and does
not believe them relevant to how you should vote as a Trust
shareholder. Neither hospital is owned by the Trust. Regardless
of the outcome of labor matters, Culinary will vote each proxy
card it receives in accordance with the shareholder's
instructions. Culinary will not ask you for any discretionary
voting authority: rather, it will vote your stock solely as you
have directed. Culinary will bear all solicitation costs
(anticipated at $5000) and will not seek reimbursement from the
Company. It intends to solicit proxies by mail, fax, phone, e-
mail and meetings using regular staff.
RECORD DATE/EXECUTIVE COMPENSATION/STOCK OWNERSHIP OF MANAGEMENT,
TRUSTEES AND 5% OWNERS/ELECTION OF TRUSTEES
We do not have information on these matters more current the
Trust's last proxy statement (pp. 1-4 and 6-19, incorporated by
reference herein).*
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals for
inclusion in management's proxy materials will appear in
management's upcoming proxy statement.
PLEASE RETURN THE ENCLOSED SURVEY TODAY.
For more information, contact our Research Analyst, John Canham-
Clyne, at (702) 387-7064
<PAGE>
SURVEY OF SHAREHOLDERS OF
UNIVERSAL HEALTH REALTY INCOME TRUST
This is a voluntary survey, not a proxy card, and cannot be
used to vote on the shareholder proposal. Your identity will be
kept confidential unless you specifically authorize to the
contrary. The information from your response will be used solely
for communicating about matters for shareholder vote.
YOUR VIEW OF THE SHAREHOLDER PROPOSAL REGARDING TRUSTEE
CONFLICTS- OF-INTEREST:
[ ] Strongly support
[ ] Likely to support
[ ] Likely to oppose because _____________________
[ ] Undecided
[ ] Please send me more information about the issues on which
Trust shareholders will be voting:
Mailing address: __________________________________
___________________________________
E-mail address: _________________________
Telephone: _________________ Fax: ___________
__________________________ _______________
PRINT SHAREHOLDER NAME # SHARES
Please return by March 15, 1999 in the enclosed envelope or fax
to (702) 385-1197.
