SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN Proxy Statement
SCHEDULE 14-A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
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 Rule 14a-11(c) or Rule 14a-12
BEVERLY ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
FOOD AND ALLIED SERVICE TRADES DEPARTMENT, AFL-CIO
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 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.
(1) Title of each class of securities to which transaction applies:
__________________________________
(2) Aggregate number of securities to which transactions applies:
__________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1) ________________________________________
(4) Proposed maximum aggregate value of transaction: ______________________
/ / Check box if any part of the fee is offset as provided by Exchange Act
rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid: ___________________________________________________
(2) Form, schedule or registration statement no.: _____________________________
(3) Filing party: _____________________________________________________________
(4) Date filed: _______________________________________________________________
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PRELIMINARY COPY
For the information of the Securities and Exchange Commission Only
(Revised 5/2/94)
INDEPENDENT STOCKHOLDERS' PROXY SOLICITATION
In Connection With The
1994 ANNUAL MEETING OF STOCKHOLDERS
OF
BEVERLY ENTERPRISES, INC.
May 19, 1994
Food and Allied Service Trades Department, AFL-CIO ("FAST") furnishes
this Proxy Statement in connection with its solicitation of proxies for use at
the Annual Meeting of Stockholders of Beverly Enterprises, Inc. ("Beverly" or
the "Company"), Fort Smith, Arkansas 72903. The meeting is now scheduled to be
held at the Holiday Inn, 700 Rogers Avenue, Fort Smith, Arkansas, on Thursday,
May 19, 1994 at 10:00 a.m., and proxies solicited with this Proxy Statement will
be used at that time and at all continuations and adjournments of the meeting
for the following purposes:
1. To elect seven members of the Board of Directors;
2. To consider and act upon a proposal regarding Amendment No. 1 to
the Beverly Enterprises, Inc. 1993 Long-Term Incentive Stock
Plan;
3. To consider and act upon a proposal regarding the Beverly
Enterprises, Inc. Annual Incentive Plan;
4. To consider and act upon a proposal regarding the Beverly
Enterprises, Inc. Non-Employee Directors' Stock Option Plan;
5. To ratify the appointment of Ernst & Young as independent
auditors for 1994;
6. To consider and act upon an Independent Stockholders' Resolution
recommending the preparation of a special report to the
stockholders on patient care related lawsuits filed against the
Company and issuance of instructions to legal counsel to refrain
from sealing court settlements involving the Company; and
7. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Copies of this Proxy Statement and form of proxy are being sent or
given to a number of stockholders on or about May , 1994.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
GREEN PROXY CARD AND MAIL IT IN THE
POSTAGE PRE-PAID ENVELOPE PROVIDED HEREWITH TO:
FAST, AFL-CIO
Room 4088
815 16th Street, NW
Washington, D.C. 20006
May , 1994
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INFORMATION CONCERNING FAST
FAST is an unincorporated labor organization, with principal offices in
Washington, D.C., that is a constitutional department of the American Federation
of Labor and Congress of Industrial Organizations (AFL-CIO). FAST is not the
authorized collective bargaining representative for any employees in patient
health care or other businesses that serve or may seek to serve as a supplier to
Beverly. FAST is the beneficial owner of 45 shares of the Company's common
stock. Two of FAST's affiliates, the Service Employees International Union
("SEIU") and the United Food and Commercial Workers International Union ("UFCW")
are the legal bargaining representatives of an estimated 10% of the Company's
employees.
SOLICITATION OF PROXIES
FAST expects to solicit proxies pursuant to this Proxy Statement
through the mail, by telephone and/or through personal interviews. FAST will
also request brokers, custodians and other nominees to forward solicitation
materials to beneficial owners of common stock, and such persons will be
reimbursed for their reasonable out-of-pocket expenses. Regular employees and
officers of FAST and of its affiliates may also solicit proxies personally and
by telephone, and they will not receive any additional compensation for such
solicitation. No specially engaged employees have been or will be employed to
solicit stockholders. This Proxy Statement will also be disseminated to a number
of stockholders, including institutional stockholders, directors of the Company
and a significant number of individual stockholders with large holdings.
The cost of the solicitation will be borne solely by FAST, and while
FAST does not know the exact cost of the solicitation at this time, FAST does
not expect it to exceed $30,000. Total expenditures to date, including printing
and postage expenses, have been approximately $5,000. FAST will not seek
reimbursement for the costs of this solicitation from the Company.
VOTING RIGHTS
The Company's Board of Directors has fixed the close of business on
March 21, 1994 as the record date for determining the stockholders of the
Company entitled to notice of and to vote at the Annual Meeting and at any
adjournment thereof. As of the record date, the Company had outstanding
83,046,602 shares of common stock. Each holder of record of outstanding shares
of common stock on the record date is entitled to one vote per share held on
each matter submitted to the Annual Meeting. Stockholders are not permitted to
cumulate votes for the purpose of electing directors or otherwise.
The presence in person or by proxy of the holders of a majority of the
shares entitled to vote will constitute a quorum for the transaction of business
at the Annual Meeting.
A plurality of the votes cast in person or by proxy and entitled to
vote at the Annual Meeting is required for the election of directors. The
affirmative vote of the holders of shares of common stock representing a
majority of votes is required for (a) the approval of Amendment No. 1 to the
Beverly Enterprises, Inc. 1993 Long-Term Incentive Stock Plan, (b) the approval
of the Beverly Enterprises, Inc. Annual Incentive Plan, (c) the approval of the
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Beverly Enterprises, Inc. Non-Employee Directors' Stock Option Plan, (d) the
ratification of the appointment of Ernst & Young as independent auditors for
1994, (e) the approval of such other matters (other than the election of
directors) as may properly come before the Annual Meeting, and (f) the
Independent Stockholders' Resolution on the report on patient care related
lawsuits against the Company.
Abstention and broker non-votes have the same effect as votes against
proposals presented to stockholders other than the election of directors. They
have no effect on the election of directors. A broker non-vote occurs when a
nominee holding shares for a beneficial owner votes on one proposal, but does
not vote on another proposal because the nominee does not have discretionary
voting power and has not received instruction from the beneficial owner.
REVOCATION RIGHTS
A stockholder who executes the enclosed proxy has the power to revoke
it at any time before it is exercised. A proxy may be revoked by filing with the
Secretary of the Company, Robert W. Pommerville, 1200 South Waldron Road, Fort
Smith, AR 72903 (i) a signed instrument revoking the proxy, or (ii) a duly
executed proxy bearing a later date. A proxy may also be revoked if the person
executing the proxy is present at the Annual Meeting and elects to vote in
person. If the proxy is not revoked, it will be voted by those therein named.
PROPOSAL 1
ELECTION OF DIRECTORS
One of the purposes of the Annual Meeting is to elect seven directors
to hold office until the 1995 Annual Meeting and until successors are elected
and duly qualified. The Board has nominated seven individuals to serve as
directors, all seven of whom, according to Management's 1994 Proxy Statement,
are presently directors of the Company.
Pages 3, 4 and 5 of Management's 1994 Proxy Statement (incorporated
herein by reference) sets forth the names and ages of the seven nominees and
describes the principal business experience of each, as well as the year each
first held Company office and/or served as a director, the number of shares each
beneficially owns and the percentage of outstanding shares owned by each
nominee. Information is also provided concerning the committees of the Board.
Unless otherwise directed on the proxy card, the proxy holders named
therein by FAST will vote the shares represented thereby FOR the election of the
nominees named in Management's 1994 Proxy Statement.
PROPOSAL 2
APPROVAL OF AMENDMENT NO. 1 TO THE BEVERLY ENTERPRISES, INC.
1993 LONG-TERM INCENTIVE STOCK PLAN
The Board has unanimously approved Amendment No. 1 to the 1993
Long-Term Incentive Stock Plan, and has directed that the Amendment No. 1 be
submitted for stockholder approval at the Annual Meeting. Amendment No. 1 will
become effective upon the affirmative vote of a majority of the shares of common
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stock voting at the Annual Meeting. On pages 5, 6 and 7 of Management's 1994
Proxy Statement (incorporated herein by reference), the Board describes the
Plan, the Amendment to the Plan and the Board's reasons for adopting it and for
seeking stockholder ratification thereof.
The Board of Directors of the Company recommends a vote FOR the
proposal to approve Amendment No.1 to the 1993 Long-Term Incentive Stock Plan.
Proxies received by FAST will be so voted unless a contrary choice is specified.
PROPOSAL 3
APPROVAL OF THE BEVERLY ENTERPRISES, INC.
ANNUAL INCENTIVE PLAN
The Board has unanimously approved the Beverly Enterprises, Inc. Annual
Incentive Plan and has directed that the Annual Incentive Plan be submitted for
stockholder approval at the Annual Meeting. On pages 7, 8 and 9 of Management's
1994 Proxy Statement (incorporated herein by reference), the Board describes the
Plan and the Board's reason for adopting it and for seeking stockholder
ratification thereof. The Annual Incentive Plan will become effective upon the
affirmative vote of a majority of the shares of common stock voting at the
Annual Meeting. A copy of the Annual Incentive Plan is attached as Exhibit A to
Management's 1994 Proxy Statement and is incorporated herein by reference.
Disclosure concerning executive compensation for the year ended December 31,
1993 is set forth on pages 15, 16, 17, 18 and 19 of Management's 1994 Proxy
Statement and is incorporated herein by reference.
FAST recommends a vote AGAINST the Annual Incentive Plan on the grounds
that the Proxy Statement does not include as a measure of a participant's
performance any criteria to ensure that quality patient care is delivered to
residents of the Company's facilities. In FAST's opinion, delivering quality
patient care is at least as important as earnings per share, return on equity,
revenue growth, cash flow and income and operating margins as a measure of
performance. FAST believes that the Company can devise objective criteria to
measure a participant's role in delivering quality patient care and that the
Annual Incentive Plan should be reconsidered by the stockholders when this has
been accomplished.
Unless otherwise directed on the proxy card, the proxy holders named
therein by FAST will vote AGAINST the proposal to approve the Beverly
Enterprises, Inc. Annual Incentive Plan.
PROPOSAL 4
APPROVAL OF THE BEVERLY ENTERPRISES, INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Board has unanimously approved adoption of the Beverly Enterprises,
Inc. Non-Employee Directors Stock Option Plan and has directed that the
Non-Employee Directors Stock Option Plan be submitted for stockholder approval
at the Annual Meeting. The Non-Employee Directors Stock Option Plan will become
effective upon the affirmative vote of a majority of the shares of common stock
voting at the Annual Meeting. A copy of the Non-Employee Directors Stock Option
Plan is attached as Exhibit B to Management's 1994 Proxy Statement and is
incorporated herein by reference. On pages 10, 11 and 12 of Management's 1994
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Proxy Statement (incorporated herein by reference), the Board describes the Plan
and the Board's reasons for adopting it and for seeking stockholder ratification
thereof.
Unless otherwise directed on the proxy card, the proxy holders named
therein by FAST will vote the shares represented thereby FOR approval of the
Non-Employee Directors Stock Option Plan.
PROPOSAL 5
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young as auditors for the Company for
the year ended December 31, 1994, subject to ratification by the stockholders.
Ernst & Young audited the Company's consolidated financial statements for the
year ended December 31, 1993 and, together with its predecessor, Arthur Young &
Company, has been the Company's auditors since 1965.
The Board of Directors of the Company recommends a vote FOR the
proposal to ratify the appointment of Ernst & Young as independent auditors for
1994. Proxies received by FAST will be so voted unless a contrary choice is
specified.
PROPOSAL 6
INDEPENDENT STOCKHOLDERS' RESOLUTION RECOMMENDING
THE PREPARATION OF A SPECIAL REPORT ON PATIENT CARE
RELATED LAWSUITS FILED AGAINST THE COMPANY
FAST proposes an Independent Stockholders' Resolution, set forth fully
in Exhibit A hereto, that recommends to the Board of Directors that the Company
include in its Annual Report on Form 10-K and in a special report to the
stockholders a listing of all pending and settled cases involving any and all
aspects of the patient care provided in its facilities for the subject year; and
that the Company instruct all of its insurance carriers and legal counsel to
refrain from sealing court settlements involving the Company.
PRINCIPAL REASONS FOR ADOPTION
I. The primary business of the Company is providing care for elderly patients,
and private lawsuits are an indicator of whether such care is being
properly provided.
As of January 31, 1994 the Company operated 774 nursing facilities with
82,680 beds, making it the largest such operator in the United States.
FAST believes that one of the primary reasons patients' families place
their relatives in particular nursing homes is their evaluation of the home's
reputation for providing quality care. There are, of course, other reasons such
as location, cost and the reputation of competing facilities.
The Company apparently also believes that providing quality care is a
corporate objective. This is evidenced by the existence of a "Quality Assurance"
program, about which the Company writes in its Form 10-K:
"The Company has a Quality Assurance (`QA') program to ensure quality
care is maintained in each of its nursing facilities. The QA
department is headed by a Senior Vice President who reports directly
to the Chief
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Executive Officer and to an independent quality assurance committee of
the Board of Directors. The Company's nationwide QA network is made up
of approximately 250 health care professionals including registered
nurses, dieticians, social workers and other specialists. These
specialists visit each of the Company's nursing facilities several
times each year to conduct quality reviews and consultations. In
addition, a select QA team visits each facility annually to conduct a
detailed survey that requires several days of inspection, review and
training."
Also, in its 1992 Annual Report to stockholders, the Company writes:
"Quality is the cornerstone of Beverly's philosophy. We are
continually seeking ways to make a difference . . . our aim is to
achieve the highest practicable level of functioning of each resident.
We continue to bridge the gap between the perception and the actual
delivery of services."
The Company also reports in its current Form 10-K:
"The Company's nursing facilities are subject to compliance with
various federal, state and local health care statutes and regulations.
. . ."
The Company states further:
"The Company believes that its facilities are in substantial
compliance with the various Medicaid and Medicare regulatory
requirements currently applicable to them. In the ordinary course of
business, however, the Company receives notices of deficiencies for
failure to comply with various regulatory requirements. . . ."
The Company's disclosure regarding legal proceedings is similar in its
routine nature to the disclosure cited above. It states:
"There are various lawsuits and regulatory actions pending against the
Company arising in the normal course of business, some of which seek
punitive damages. The Company does not believe that the ultimate
resolution of these matters will have a material adverse effect on the
Company's financial position or results of operations."
FAST believes that this disclosure is much too narrow to enable
stockholders and investors to make informed judgements about the Company's
success in achieving its goal of providing quality patient care to the residents
of its facilities. Our research indicates that many of the lawsuits brought
against the Company involve wrongful death and negligence, matters of
significant importance not only to the patients and their relatives, but to
stockholders as well. While the prosecution of such claims is subject to many
considerations, such as relevant state laws, the relationship existing between
patients and their relatives and the Company's facilities, and the willingness
of private attorneys to pursue such claims, in FAST's opinion they are an
important indicator of the quality of the care provided in Company facilities.
Patient care related lawsuits can effectively serve as a "free market"
regulatory mechanism acting to alert Company officials to the existence of
serious problems in the Company's patient care delivery system and can provide
relevant information to stockholders and potential investors.
The Company's disclosure, although it may well be in compliance with
the relevant securities laws, takes a narrow, financially oriented view of the
significance of such information. The statement that "[t]he Company does not
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believe that the ultimate resolution of these matters will have a material
adverse effect on the Company's financial position or results of operations" is
intended, to mean that the dollar value involved in the resolution of these
claims will not be significant. However, the primary business of the Company is
caring for elderly patients. The current disclosure does not speak to the nature
of the claims, their number, their status, or the substance of the charges being
levied against Beverly. It does not speak to the question of large monetary
damages being awarded by juries, or agreed to by the Company in settlements,
which would indicate the Company's Quality Assurance program has not performed
as expected.
FAST's resolution, if adopted by the stockholders and implemented by
the Company, would provide stockholders and investors with such information,
thus enabling them to make more informed decisions about their investment.
II. The sealing of lawsuits against the Company deprives stockholders of
important information.
Discussions with plaintiffs' attorneys indicate that Beverly and/or
counsel for its insurance carriers routinely insist as a condition of settlement
of patient care related cases that such settlements be sealed from public
inspection. In addition to Federal and state statutes that may entitle
plaintiffs to preserve the confidentiality of settlements of such matters,
plaintiffs' counsel also from time to time desire that settlements be sealed
from public inspection to protect the privacy of an individual plaintiff. Judges
will routinely agree to this provision if both parties stipulate to it. The
dynamic of settlement negotiations is such that plaintiffs' attorneys often feel
that they can negotiate a more favorable financial settlement if they agree to
sealing. While this may be in the interest of an individual plaintiff, in FAST's
opinion it is not necessarily in the interests of stockholders who are deprived
of access to the details of the settlement.
FAST's resolution, if adopted by the stockholders and implemented by
the Company, would result in substantially all settlement information being made
available to the public and thus, to stockholders.
III. The Chief Executive Officer of the Company is not fully informed about the
status, content or number of lawsuits brought against the Company.
Mr. David R. Banks, Chairman of the Board, President and Chief
Executive Officer of the Company, in FAST's opinion is not fully informed about
the nature or import of the patient care lawsuits brought against the Company.
FAST's opinion is based in part on the responses provided by Mr. Banks to
questions posed by plaintiff's counsel on November 9, 1993 in the case of Halda
Elaine Bullock, et. al v. Beverly Enterprises, Inc. et. al (93-101) in the 71st
Judicial District of Harrison, Texas. The following questions and answers were
transcribed by Glenda Fuller, Certified Shorthand Reporter and Notary Public in
Travis County:
Question: Has any event that has occurred in the last 10 years made
you interested enough in the lawsuits that have been filed against
Beverly Enterprises to make an inquiry for a list of pending
lawsuits?"
Answer: I have asked at various times how many lawsuits we've had, but
I haven't done that in a long time."
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Question: Okay. Has anything transpired, any event in the last 10
years to cause interest enough on your part to make inquiry about the
number of pressure sore cases that have been filed against Beverly
Enterprise?
Answer: I haven't broken it down.
-------------------------
Question: You have never then asked for a breakdown of the nature of
the injuries or injuries precipitating death that have been involved
in lawsuits?
Answer: All I had asked is how many lawsuits do we have. I have never
broken them down.
-------------------------
Question: Have you ever asked or is there anything that has occurred
in the last 10 years that has stipulated [sic] interest on your part
to make inquiry about the number of cases where Beverly was being
accused of gross negligence?
Answer: Was the . . . if the question is have I asked how many times
we have had a lawsuit that violated, gross negligence, I said earlier
I've never broken them down. I have asked about suits and I've talked
about suits, but I've never asked the breakdown.
-------------------------
Question: can you tell me the amount of money that Beverly has paid in
the last 10 years in wrongful death cases?
Answer: No.
-------------------------
Question: Can you tell me the amount of money that Beverly has paid in
the last 10 years to settle lawsuits involving allegations of in-house
decubitis ulcers?
Answer: No.
FAST believes that the Chief Executive Officer of any nursing home
company should be able to answer with specific facts the questions posed to Mr.
Banks as set forth above. That he could not, in FAST's opinion, indicates that
the Company's management information system concerning quality of care issues
needs improvement. Adoption of FAST's resolution would compel increased
awareness of the importance of patient care lawsuits among Company executives,
including the Chairman and Chief Executive Officer.
In FAST's opinion, the provision of this information to stockholders
would create a heightened awareness among all employees about the functional
relationship between the health of patients in the Company's facilities and the
financial health of the Company. Such an awareness, should it result in improved
quality of care and, hence, fewer lawsuits being brought against the Company,
should result in increased value for stockholders.
IV. The report to stockholders should be brief and contain basic, material
information.
FAST proposes that the report to stockholders should contain, at a
minimum, the case name (plaintiff v. defendant), case number, date of filing,
court of jurisdiction, brief statement of the facts as alleged, the Company's
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response, current status of the case, and the facts of the judgement entered by
the court or settlement reached by the parties, including the amount of the
monetary award or settlement, if any.
FAST believes that such information is readily available to officers of
the Company. While it may not be organized as described above, FAST further
believes that the cost of initially organizing the information in this fashion
should be considered an investment in improving the Quality Assurance program.
The cost of maintaining this information system, in FAST's opinion, would be
minimal, as would the cost of preparing the annual report to stockholders.
In FAST's opinion, there would be no increased costs associated with
including the report in the Com-pany's Annual Report filing beyond additional
printing expenses. V. The proposed resolution is consistent with the Company's
by-laws and with governing federal and state law.
The proposed Independent Stockholders' Resolution recommends to the
Board of Directors that the Company include in its Annual Report on Form 10-K
and in a special report to the stockholders a listing of all pending, settled
and/or decided cases involving any and all aspects of patient care. In FAST's
opinion, this is within the power of the stockholders to propose and the Board
to implement.
Stockholders have the power to recommend actions to the Board of
Directors. Furthermore, Section 141(c) of the Delaware General Corporation Law
authorizes a Board of Directors, by resolution, to designate committees to
exercise such board's power and authority to manage the business and affairs of
a corporation. FAST's proposal falls logically within the purview of an already
established Committee of the Board, namely, the Quality Assurance Committee. As
set forth in Management's 1994 Proxy Statement, this Committee "monitors the
quality assurance process of the Company and reports to the Board on progress
made toward reaching quality assurance goals."
Majority Vote Needed To Adopt The Independent Stockholders' Resolution
Adoption of the proposed Independent Stockholders' Resolution will
require the affirmative vote of the majority of the shares having voting power
present in person or represented by valid proxy at the Annual Meeting. If you
execute the enclosed proxy by voting to ABSTAIN on the question of whether to
adopt the Independent Stockholders' Resolution, your proxy will effectively
serve as a vote AGAINST the proposal. Your shares will be voted FOR the
Independent Stockholders' Resolution if you execute the enclosed proxy without
specifically instructing the proxy holders named therein how to vote. In either
case, your shares will be counted as being "present" at the meeting.
In FAST's view, proxies executed pursuant to Management's 1994 Proxy
Statement and form of proxy dated April 19,1994 cannot be voted on the
Independent Stockholders' Resolution because Management failed to address in its
Proxy Statement the issues raised in the Independent Stockholders' Resolution
even though Management was aware as early as March 24, 1994 that FAST intended
to raise these issues. The Company, on the same day, received a copy of the
proposed Independent Stockholders' Resolution, which has not changed in
substance since March 24, 1992. Moreover, in FAST's opinion, proxies that cannot
be voted on the Independent Stockholders' Resolution cannot be counted in
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determining whether the Independent Stockholders' Resolution has been approved
by a majority of shares present at the Annual Meeting and eligible to vote on
this issue. However, if Management resolicits proxies that specifically address
the Independent Stockholders' Resolution, such proxies (and proxies granted
pursuant to Management's April 19, 1994 solicitation that are not subsequently
revoked) may be voted on the Independent Stockholders' Resolution and will be
counted in determining whether the Independent Stockholders' Resolution has been
duly approved.
FAST RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
INDEPENDENT STOCKHOLDERS ' RESOLUTION
* * * * * * * *
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL HOLDERS
Based on the information set forth in Management's 1994 Proxy Statement
at page 3 (incorporated herein by reference), as of March 21, 1994 the Company's
directors and executive officers beneficially owned, as a group, approximately
1,393,094 shares, or 1.6% of the Company's outstanding common stock. That number
includes shares that the individuals within that group have a right to acquire
beneficial ownership of within 60 days after March 21, 1994 through the exercise
of options under the Company's stock option plans.
On page 2 of Management's 1994 Proxy Statement (incorporated herein by
reference), the Board listed each person who, as of March 21, 1994, was known to
the Company to be the beneficial owner of 5% or more of the Company's common
stock, along with the amount and nature of the beneficial ownership and other
related information.
OTHER MATTERS
FAST knows of no other business to be presented at the Annual Meeting,
but if other matters do properly come before the Annual Meeting the proxy
holders named in the enclosed proxy will use their discretion to vote on such
matters in accordance with their best judgment.
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SUBMISSION OF STOCKHOLDER PROPOSALS
Federal securities rules require the Company to include certain
stockholder proposals and supporting statements in Management's Proxy Statement.
December 20, 1994 is the date by which proposals of stockholders intended to be
presented at the 1995 Annual Meeting of Stockholders must be received by the
Company for inclusion in the Company's proxy statement and form of proxy
relating to that meeting.
FOOD AND ALLIED SERVICE TRADES DEPARTMENT, AFL-CIO
PLEASE PROMPTLY COMPLETE, DATE AND SIGN THE ENCLOSED
GREEN PROXY CARD AND MAIL IT IN THE POSTAGE PRE-PAID
ENVELOPE PROVIDED HEREWITH OR FAX TO 202-737-7208
If your shares are held in the name of a broker, bank or nominee, only
it can sign a proxy card to vote your shares and only upon receipt of your
specific instructions to do so. Accordingly, please contact the person
responsible for your account and give him or her the appropriate instructions to
execute the GREEN proxy card.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR
SHARES PLEASE TELEPHONE (202) 737-7200.
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EXHIBIT A
Independent Stockholder Resolution
Proposed by the Food and Allied Service Trades Department, AFL-CIO
for the 1994 Annual Meeting of Stockholders of Beverly Enterprises, Inc.
Whereas, the primary business of Beverly Enterprises, Inc. is to
provide quality patient care to tens of thousands of America's elderly in its
nursing homes; and
Whereas, Beverly Enterprises, Inc. stated in its Annual Report on Form
10-K as filed for the year ended December 31, 1993: "There are various lawsuits
and regulatory actions pending against the Company arising in the normal course
of business, some of which seek punitive damages. The Company does not believe
that the ultimate resolution of these matters will have a material adverse
effect on the Company's financial position or results of operations."; and
Whereas, the filing of lawsuits against the Company charging among
other matters, wrongful death and neglect, are important indicators of the
Company's provision of care for its residents; and
Whereas, the lawsuits which are settled prior to trial are often sealed
as a result of settlement negotiations; and
Whereas, such settlement information is, relevant and material to the
decision making process of current stockholders and potential investors in the
Company's common stock;
Therefore Be It Resolved, that the stockholders of Beverly Enterprises,
Inc. recommend that the Board of Directors instruct all of the Company's
insurance carriers and legal counsel that they refrain from sealing any court
settlements involving the Company in the future; and be it further
Resolved, that the stockholders recommend to the Board of Directors
that the Company include in its Annual Report on Form 10-K and in a special
report to the stockholders a listing of pending, settled and decided cases
involving any and all aspects of the patient care provided in its facilities for
the year being reported on. The report should, at a minimum, include about each
case: its name, case number, date of filing, court of jurisdiction, basic facts
of the complaint, current status, and if a judgement has been entered or
settlement reached, the essential facts thereof including the amount of the
monetary award or settlement.
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INDEPENDENT STOCKHOLDERS' PROXY
SOLICITED ON BEHALF OF
FOOD AND ALLIED SERVICE TRADES DEPARTMENT, AFL-CIO
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
BEVERLY ENTERPRISES, INC.
TO BE HELD ON MAY 19, 1994
The undersigned hereby revokes all prior proxies given by the
undersigned and appoints Robert F. Harbrant, Jeffrey L. Fiedler and Keith R.
Mestrich, each of them, as proxies, each with the power to appoint his
substitute, to represent and to vote as designated below, all the shares of
common stock of Beverly Enterprises, Inc. held of record by the undersigned on
March 21, 1994 at the Annual Meeting of Stockholders to be held on May 19, 1994
or any adjournment thereof.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. This Proxy when properly
executed will be voted in the manner directed herein by the undersigned. If no
specification is made, the Proxy will be voted FOR the election of the directors
named in the Independent Stockholders' Proxy Statement, FOR the APPROVAL of
Amendment No. 1 to the Beverly Enterprises, Inc. 1993 Long-Term Incentive Stock
Plan, AGAINST the APPROVAL of the Beverly Enterprises, Inc. Annual Incentive
Plan, FOR the APPROVAL of the Beverly Enterprises, Inc. Non-Employee Directors'
Stock Option Plan, FOR the appointment of Ernst & Young as independent auditors
for 1994, and FOR the Independent Stockholders' Proposal recommending the
preparation of a special report of the stockholders on patient care related
lawsuits filed against the Company and instructions to counsel that settlements
by the Company not be sealed.
(Continued and to be signed and dated on the reverse side.)
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1. Election of Directors: Beryl F. Anthony, Jr., David R. Banks, Curt F. Bradbury,
James R. Greene, Jon E.M. Jacoby, Louis W. Menk
and Will K. Weinstein.
FOR EACH NOMINEE LISTED ABOVE / / WITHHOLD
AUTHORITY TO VOTE FOR EACH NOMINEE ABOVE / /
(INSTRUCTION: To withhold authority to vote for any individual nominee or nominees,
check the box opposite "For Each Nominee Listed
Above" and write the name or names of such individual nominee or nominees on the
space provided below.)
_____________________________________________________________________________________
______________________________________________
If any nominee named above declines or is unable to serve as a director, the persons
named as proxies, and each of them, shall have
full discretion to vote for any other person who may be nominated.
APPROVAL DISAPPROVAL ABSTENTION
APPROVAL DISAPPROVAL ABSTENTION
OF OF WITH RESPECT TO
OF OF WITH RESPECT TO
2. Amendment No. 1 to / / / / / / 3. The Beverly
Enter- / / / / / /
the Beverly Enterprises, prises, Inc.
Annual
Inc. 1993 Long-Term Incentive
Plan
Incentive Stock Plan
APPROVAL DISAPPROVAL ABSTENTION
APPROVAL DISAPPROVAL ABSTENTION
OF OF WITH RESPECT TO
OF OF WITH RESPECT TO
4. The Beverly Enterprises, Inc. / / / / / / 5. Appointment
of Ernst & / / / / / /
Non-Employee Directors' Young as
Independent
Stock Option Plan Auditors for
1994
APPROVAL DISAPPROVAL ABSTENTION
OF OF WITH RESPECT TO
6. Independent Stockholders' / / / / / /
Resolution on patient care
related lawsuits
NOTE: Please sign exactly as name appears on this Proxy. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign full corporate name by President or other authorized
officer. if a partnership, please sign in partnership name by authorized person.
Date: ___________________________________________________________________ , 1994
________________________________________________________________________________
________________________________________________________________________________
Signature of Stockholder(s)
Please sign, date and return today in the enclosed envelope. This Proxy will not
be used if you attend the meeting in person and so request.
Votes must be indicated (X) in black or blue ink.
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