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:
/ / Preliminary proxy statement
/X/ 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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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"), 1200 South Waldron Road, 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 stockholders on patient
care related lawsuits filed against the Company and the 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 6, 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 408
815 16th Street, N.W.
Washington, D.C. 20006
May 6, 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 and the United Food and Commercial Workers International
Union 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
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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 than the
election of directors) as may properly come before the Annual Meeting, and (f)
the Independent Stockholders' Resolution 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, Arkansas 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 named
therein.
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 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
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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 Plan 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 Proxy
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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 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 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 current 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
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the Chief Executive Officer and to an independent quality
asurance 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
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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" 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 that 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 interest of
stockholders who are deprived of access to the details of the settlement.
Accordingly, FAST believes that Company counsel should not request that
records be sealed, and should also be instructed by the Company to object to
the sealing of records.
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
Malda Elaine Bullock Musser et al. vs. Beverly Enterprises, Inc. et al.
(93-101) in the 71st Judicial District of Harrison County, 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 Enterprises?
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 the Company's
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, a brief statement of the facts as alleged, the
Com-
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pany's response, the 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 Company'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 a 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 Indepen-
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dent Stockholders' Resolution cannot be counted in determining whether the
Independent Stockholders' Resolution has been approved by a majority of the
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 Stockholders' Resolution
Proposed by 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, this 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 to 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 LISTED 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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