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
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: _______________________________________________________________
<PAGE>
INDEPENDENT SHAREHOLDERS' PROXY SOLICITATION
IN CONNECTION WITH THE
1994 ANNUAL MEETING OF SHAREHOLDERS
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 Shareholders 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 Shareholders' Resolution
recommending the preparation of a special report to the shareholders
on patient care related lawsuits filed against 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 shareholders on or about May 3, 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
15 16TH STREET, NW
WASHINGTON, D.C. 20006
May 3, 1994
<PAGE>
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 Enterprises. 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 shareholders.
This proxy statement will also be disseminated to a number of
shareholders, including institutional shareholders, Company directors, and a
significant number of individual shareholders 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 shareholders of the Company
entitled to notice of and to vote at the 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 for each share held on every matter
submitted to the Meeting. Stockholders are not permitted to accumulate 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
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Incentive Stock Plan, (b) the approval of the Beverly Enterprises, Inc. Annual
Inc. Annual Incentive Plan,(c) the approval of the 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 then the election of directors) as may
properly come before the Annual Meeting, and (f) the Independent Shareholders'
Resolution on the report on patient care-related lawsuits.
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 received instruction from the beneficial owner.
REVOCATION RIGHTS
A shareholder who executes the enclosed proxy has the power to revoke it
at any time before its exercise. An exercised proxy may be revoked either 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 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 7 individuals to serve as directors,
all 7 of whom, according to Management's 1994 Proxy Statement, are presently
directors ofthe Company.
On pages 3, 4 and 5 of Management's 1994 Proxy Statement, the Board
provides the names and ages of the 7 nominees and describes principal business
experience of each, as well as the year each first held Company office and/or
served as a director, the shares each beneficially owns, and the percentage
holdings of outstanding shares for each nominee. Each nominee is presently a
director of the Company.
Unless otherwise directed on the proxy card, the proxy holders named
therein by FAST will vote FOR the election of the nominees named in the
Company's 1994 Proxy Statement.
PROPOSAL 2
AMENDMENT NO. 1 TO THE BEVERLY ENTERPRISES, INC.
1993 LONG-TERM INCENTIVE STOCK PLAN
The Board has proposed that the shareholders ratify the Board's Amendment
No. 1 to the 1993 Long-Term Incentive Stock Plan, and the Board of Directors
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 Stock voting at the Annual Meeting.
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On pages 5, 6, and 7 of Management's 1994 Proxy Statement, the Board
describes that Plan, and the Amendment to that Plan and the Board's reasons
for adopting it and for seeking shareholder 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 stockholders specify a contrary
choice.
PROPOSAL 3
APPROVAL OF THE BEVERLY ENTERPRISES, INC.
ANNUAL INCENTIVE PLAN
The Board has proposed that the stockholders approve the Beverly
Enterprises, Inc. Annual Incentive Plan. On pages 7 through 9 of Management's
1994 Proxy Statement, the Board describes that Plan and the Board's reason for
adopting it and for seeking shareholder ratification thereof.
FAST recommends a vote AGAINST the Annual Incentive Plan on the grounds
that the Proxy Statement does not include as a measure of the executive's
performance anything concerning ensuring 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 Performance Measures.
FAST believes that the Company can devise an objective criteria to
measure an executive's role in delivering quality patient care, and that the
Annual Incentive Plan should be reconsidered by the stockholders when this has
been accomplished.
PROPOSAL 4
APPROVAL OF THE BEVERLY ENTERPRISES, INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Board has proposed that the shareholders ratify the Board's adoption
of the Beverly Enterprises, Inc. Non-Employee Directors Stock Option Plan. On
pages 10, 11 and 12 of Management's 1994 Proxy Statement, the Board describes
that Plan and the Board's reasons for adopting it and for seeking shareholder
ratification thereof.
Unless otherwise directed on the enclosed Proxy, the persons named
therein will vote the shares represented thereby FOR the ratification of the
Non-Employee Directors Stock Option Plan as proposed by management in its 1994
Proxy Statement.
PROPOSAL 5
INDEPENDENT SHAREHOLDERS' RESOLUTION RECOMMENDING
THE PREPARATION OF A SPECIAL REPORT ON PATIENT CARE
RELATED LAWSUITS FILED AGAINST THE COMPANY
FAST proposes an Independent Shareholders' Resolution, set forth fully in
Exhibit A hereto, that recommends to the Board of Directors that the company
include in its annual 10-K filing and in a special report to the
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shareholders a listing of all pending and settled cases involving any and all
aspects of the patient care provided in its homes for the year being reported
to the SEC; and that the Board instruct all of its insurance carriers and
legal counsel that they refrain from sealing any court settlements involving
the Company in the future.
PRINCIPAL REASONS FOR ADOPTION
I. THE PRIMARY BUSINESS OF THE COMPANY IS PROVIDING CARE FOR THE ELDERLY,
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, 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 10-K:
"The Company has a Quality Assurance ('QA') program to ensure quality
care is maintained at each of its nursing facilities. The QA
department is headed by a Senior Vice-President who reports directly
to the Chief 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 shareholders, 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 10-K that:
"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 lawsuits filed against it is similar
in its routine nature to the disclosure cited above. It states:
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"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 operation."
FAST believes that this disclosure is much too narrow to be meaningful as
it relates to shareholders and investors being able to make judgements year to
year about the success in achieving the Company's 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 shareholders
as well.
While the bringing of these suits are subject to many considerations,
such as relevant state laws, the bonds existing between patients and their
relatives in the Company's facilities, and the willingness of private
attorneys to pursue such cases, in FAST's opinion, they are an important
indicator of the quality of the care provided in Company facilities.
Patient care related lawsuits are in a way a "free market" regulatory
mechanism acting to alert Company officials to the existence of serious
problems in their patient care delivery system.
Therefore, in FAST's opinion, they are "material" information for
shareholders and investors.
The Company's disclosure takes a narrow, strictly financial view of their
materiality. The statement: "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 operation" can, in our opinion, be
construed to mean the dollar value involved in the resolution of these suits
will not be significant.
It is generally understood that damages in lawsuits involving the
elderly, even in cases of gross negligence, return monetary damages much less
than in cases of similar circumstances involving younger people.
But the business of Beverly Enterprises is caring for the elderly. The
current disclosure does not speak to the nature of the cases, their number,
their status, or the substance of the charges being levied against the
Company. 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 shareholders and implemented by the
Company would provide shareholders and investors such information, thus
enabling them to make more informed decisions about their investment.
II. THE SEALING OF LAWSUITS AGAINST THE COMPANY DEPRIVES SHAREHOLDERS OF
IMPORTANT INFORMATION.
Discussions with plaintiff's attorneys indicate that Beverly Enterprises
and/or its 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.
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Judges will routinely agree to this if both parties stipulate to it. The
dynamic of settlement negotiations is such that plaintiff attorneys often feel
they can better negotiate more favorable financial settlements if they agree
to sealing.
While this may be in the interest of the plaintiff in these cases, it is,
in FAST's opinion, not necessarily in the interests of shareholders who are
deprived of access to the details of the settlement.
FAST's resolution, if adopted and implemented by the Company, would
result in all settlement information being available to the public and thus,
to shareholders.
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 Banks, Chairman of the Board 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 bases its opinion on a deposition Mr. Banks gave on November 9, 1993
in the case of Halda Elaine Bullock, et. al vs. Beverly Enterprises, Inc. et.
al (93-101) in the 71st Judicial District of Harrison, Texas.
The following were among the questions asked Mr. Banks and his answers as
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."
------------
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.
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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 in this case. That he could not, in FAST's opinion, indicates that
the Company 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 shareholders
would create a heightened awareness among all company employees about the
functional relationship between the health of patients in the Company's
facilities and the health of the Company's common stock. Such an awareness,
should it result in improved quality of care and, hence, fewer lawsuits being
successfully brought against the Company, might result in improved value for
shareholders.
IV. THE REPORT TO SHAREHOLDERS SHOULD BE BRIEF AND CONTAIN BASIC, MATERIAL
INFORMATION.
FAST believes the report to shareholders 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 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, if any.
FAST believes that such information should already be in possession of
Company officials. While it may not be organized as described above, FAST
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 report to shareholders on an
annual basis.
In FAST's opinion, there would be no increased costs associated with
including the report in the Com-pany's annual 10-K filing beyond additional
printing expenses.
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THE PROPOSED RESOLUTION IS, IN OUR OPINION, CONSISTENT WITH THE COMPANY'S
BY-LAWS AND WITH GOVERNING FEDERAL AND STATE LAW
The proposed Resolution recommends to the Board of Directors that the
Company include in its annual 10-K filing and in a special report to the
shareholders a listing of all pending and settled and/or decided cases
involving any and all aspects of patient care. In our opinion, this is within
the power of the shareholders to propose and the Board to implement.
Shareholders have the power to recommend actions to the Board of
Directors. Furthermore, Delaware General Corporation Law 141(c) authorizes the
Board of Directors, by resolution, to designate committees to hold power and
exercise the Board's power and authority to manage the business and affairs of
the company. FAST's proposal falls logically within the purview of an already
established Committee of the Board, namely, the Quality Assurance Committee.
According to the Company's proxy 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
Adoption of the proposed 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 Meeting. If you execute the enclosed proxy
by voting to ABSTAIN on the question of whether to adopt the Resolution, your
proxy will effectively serve as a vote AGAINST the proposal. Your shares will
be voted FOR the Resolution if you execute the enclosed Proxy without
specifically instructing FAST 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 Proxy Statement
and form of Proxy dated April ,1994 cannot be in any way voted on the
Resolution because Management failed to address in its Proxy materials the
issues raised in the 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 Resolution, which has not changed in
substance since March 24, 1992. Moreover, in FAST's opinion, proxies that
cannot be voted on the Resolution cannot be counted in determining whether the
Resolution has been approved by a majority of shares present at the Meeting
and eligible to vote on this issue. However, if Management resolicits proxies
that specifically address the resolution, such proxies (and proxies granted
pursuant to Management's April , 1994 solicitation that are not subsequently
revoked) may be voted on the Resolution and will be counted in determining
whether the Resolution has been duly approved.
FAST RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
INDEPENDENT SHAREHOLDERS' RESOLUTION
* * * * * * * *
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL HOLDERS
Based on the Board's 1994 Proxy Statement, at page 3, FAST believes that,
as of March 21, 1994, the Company's directors and officers beneficially owned,
as a group, approximately 1,393,094 shares, or 1.6% of the
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Company's outstanding common stock. That number includes shares as to which
the individuals within that group have a right to acquire beneficial ownership
within 60 days after March 21, 1994 through the exercise of options under the
Company's Stock Option Plans.
On page 2 of the Board's 1994 Proxy Statement, 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 Meeting, but if
other matters do properly come before the Meeting the persons named in the
enclosed Proxy will use their discretion to vote on such matters in accordance
with their best judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS
Federal securities rules require the Company to include certain
shareholder 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 SHAREHOLDER RESOLUTION
PROPOSED BY THE FOOD AND ALLIED SERVICE TRADES DEPARTMENT, AFL-CIO
FOR THE 1994 ANNUAL MEETING OF SHAREHOLDERS 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. states in its most recent 10-K filed
with the Securities and Exchange Commission: "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, in our view, material to the
decision-making process of current shareholders and potential investors in the
Company's common stock;
THEREFORE BE IT RESOLVED, that the shareholders 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 shareholders recommend to the Board of Directors that
the company include in its annual 10-K filing and in a special report to the
shareholders a listing of pending, settled and decided cases involving any and
all aspects of the patient care provided in its homes for the year being
reported on to the SE. 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 to include the amount of the monetary
award.
A-1
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INDEPENDENT SHAREHOLDERS' PROXY
SOLICITED ON BEHALF OF
THE FOOD AND ALLIED SERVICE TRADES DEPARTMENT, AFL-CIO
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
BEVERLY ENTERPRISES, INC.
TO BE HELD ON MAY 19, 1994
The undersigned hereby 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 Proxy Statement, FOR the APPROVAL of Amendment No. 1 to
the Beverly Enterprises, Inc. 1993 Long-Term Inventive 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 Shareholders' Proposal recommending the preparation of a
special report of the shareholders on patient care related lawsuits filed
against the Company.
<PAGE>
<TABLE>
<CAPTION>
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 / / WITHHOLD AUTHORITY TO VOTE FOR EACH NOMINEE
ABOVE / /
(INSTRUCTION: To withhold authority to vote for any individual nominee or
nominees, write that name or names on the
space provided below.)
_____________________________________________________________________________________
__________________________________
If any nominee name above declines or is unable to serve as a director, the
person named as proxies, and each of them
shall have full discretion to vote for any other person who may be
nominated.
<S> <C> <C> <C> <S>
<C> <C> <C>
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 Enter- prises, Inc.
Annual
prises, Inc. 1993 Incentive Plan
Long-Term Incentive
Plan
APPROVAL DISAPPROVAL ABSTENTION
APPROVAL DISAPPROVAL ABSTENTION
OF OF WITH RESPECT TO
OF OF WITH RESPECT TO
4. The Beverly Enter / / / / / / 5. Appointment of
Ernst / / / / / /
-prises, Inc. Non- & Young as
Independent
Employee Directors' Auditors for 1994
Stock Option Plan
APPROVAL DISAPPROVAL ABSTENTION
OF OF WITH RESPECT TO
6. Independent Share- / / / / / /
holders Resolution
on lawsuit report
</TABLE>
NOTE: Please sign exactly as name
appears on this Proxy. When shares are
held by joint tenants, both should sign.
When signing as attorney, an 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
PLEASE DATE, SIGN AND RETURN person and so request.
PROMPTLY IN THE ACCOMPANYING
ENVELOPE. Votes must be indicated (X) in Black or
Blue Ink. / /
