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.
<PAGE>
Preliminary Proxy Statement
For release to shareholders 2/3/99
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) <F1>
IS THE TRUST BEING RUN BY "INDEPENDENT" TRUSTEES?
To Fellow UHT shareholders:
We <F2> intend to solicit proxies at the next annual
meeting for the following proposal:
WHEREAS, under the current Declaration of Trust, a majority of
trustees must be "Independent Trustees"; a majority of
Independent" trustees must approve the Trust's agreement with its
Advisor (UHS), which is also the Trust's primary tenant;
BUT WHEREAS the term "Independent Trustee" is currently defined
by the Declaration to allow such trustees to personally be major
suppliers or customers of UHS, or be executives of major
suppliers or customers or joint venturers of UHS, or executives
of companies which have UHS officers on their own boards,
including even these boards' executive compensation committees;
WHEREFORE, shareholders recommend that trustees support
amending section 1.4(l) of the Declaration to read as follows:
"'Independent trustee' shall mean a trustee who (i) is not an
Affiliate of the Advisor and personally performs no services for
the Trust except as trustee; and (ii) in the last 3 years has not
personally engaged in (or served as an officer, director, general
partner, employee, or trustee of any business entity which
engaged in) any of the following: (a) being in a partnership or
joint venture with the Advisor or Trust; or (b) having on its own
governing board any executive of the Advisor or Trust; or (c)
buying from or selling to the Advisor or Trust more than $10,000
in goods, services or property in any year."
Currently the Trust's primary "Advisor", Universal Health
Services, Inc. ("UHS"), 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.
___________________
<F1> Proxy card not included at this time; enclosed is a
voluntary survey.
____________________
<F2>This solicitation is conduct by Culinary Workers Local
226, which owns UHT stock and also represents employees of UHT's
Advisor, UHS. For more information, see section below entitled
"Proxy Solicitation."
<PAGE>
We question whether such independence is achieved by the
current Declaration of Trust, the document governing the Trust.
While a majority of trustees are currently deemed
"independent" by the Declaration, a narrow definition of that
term has been used.<F3>
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. <F4>
We in no way suggest these trustees made improper decisions
- -- that would require analyzing data to which we do not have
access.
____________________
<F3> Section 1.4(l) of the Declaration currently
provides: "'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." This 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)."
Section 1.4(c).
________________
<F4>We express no view as to whether such disclosure was
required by law.
<PAGE>
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. <F5>
Please support our proposal to avoid conflicts-of-interest
among independent trustees overseeing the Trust.
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.
___________________________
<F5> Our proposal, if implemented, would not prohibit Dalton
or Walker from serving: they simply would no longer be deemed
"independent" trustees. Assuming the 3 other trustees currently
deemed "Independent" would remain so, the board would need to
either add one more Independent Trustee or have one fewer non-
independent trustee. Our proposal does not specify when it should
be implemented: if the board decides to pursue the proposal, it
would need to present it for shareholder ratification; we expect
this would be timed so as not to cut off terms of any existing
trustees. It is possible that introduction of, voting upon or
adoption of the proposal might positively or negatively impact
the relationship between the Trust and UHS.
<PAGE>
VOTING PROCEDURE
The Trust's proxy card may not include the proposal. We
intend to solicit for the proposal using our own proxy card and
an additional proxy statement: look for these after
you receive your proxy card from the Trust. We intend to
send these to 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.<FN6>
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.
PROXY SOLICITATION
We are not currently asking you to vote on the
proposal. This solicitation is conducted by Culinary Workers
Local 226, which owns 56 shares in the Trust. Culinary has
interests in UHS activities beyond its UHT stock ownership:
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 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.
- -----------------------------
<FN6> 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>
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 : you will have a
chance to vote upon receiving our proxy card later. Your
identity will be kept confidential unless you specifically
authorize to the contrary. Responses will be used solely for
communications withshareholders and management 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.
