SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Name of Registrant as Specified in Its Charter:
Columbia/HCA Healthcare Corporation
Name of Person(s) Filing Proxy Statement:
SEIU Pension Funds
Payment of Filing Fee (check the appropriate box)
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j) (2).
[X ] $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 transaction
applies:
_____________________________________________________________
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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:
_____________________________________________________________
(1) Set forth the amount on which the filing fee is calculated
and state how it was determined.
[ ] 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:
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2) Form, Schedule or Registration Statement No:
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3) Filing Party: _________________________
Date Filed: _______________________________
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PRELIMINARY PROXY STATEMENT
SHAREHOLDER SOLICITATION FOR INDEPENDENT CANDIDATES FOR
COLUMBIA/HCA BOARD OF DIRECTORS
Date sent to shareholders [est]:
April 6, 1998
ANNUAL STOCKHOLDERS MEETING
Columbia/HCA Healthcare Corporation
May 14, 1998
[Location Time]
Nashville TN
New Columbia Shareholder Committee
c/o SEIU Master Trust
1343 L Street
Washington, D.C. 20005
Tel. (202) 898-3394
Fax (202) 898-3309
email: [email protected]
website: www.newcolumbia.com
Dear Fellow Columbia/HCA Shareholder:
I. ELECT HOWARD N. NEWMAN AND STEVEN M. H. WALLMAN TO THE
BOARD OF DIRECTORS
We urge you to vote for two independent candidates for the
Columbia/HCA board of directors: Steven M. H. Wallman (former
member of the Securities & Exchange Commission), and Howard N.
Newman (former head of the Medicare and Medicaid programs).
These candidates have not been nominated by the incumbent
board.
CANDIDATE STEVEN M.H. WALLMAN
Wallman, 44, served on the Securities and Exchange
Commission from 7/94 to 9/97. He is now a Senior Fellow
(non-resident) of the Brookings Institution and consultant and
entrepreneur. He serves on the Board of Directors of UOL
Publishing, Inc. Prior to being appointed by President Clinton to
the SEC, he was a partner in the Washington DC law firm
of Covington & Burling, where he practiced primarily securities
and corporation law. Education: MS and BS degrees from MIT; law
degree from Columbia University.
CANDIDATE HOWARD N. NEWMAN
Newman, 62, is a former head of the federal Medicare and
Medicaid programs who has also had substantial experience in the
management of health care institutions. He is currently a
professor in the Health Policy and Management program at the
Robert F. Wagner Graduate School of Public Service at New York
University, where he served as Dean from 1988-94.
Newman served as Administrator of the Health Care Financing
Administration (Medicare/Medicaid) from 7/80-1/81 and was
Commissioner of the Medical Services Administration (Medicaid)
from 2/70-8/74. He was the first President of the
Dartmouth-Hitchcock Medical Center in Hanover, NH in 1974-80, an
administrator at Pennsylvania Hospital (Philadelphia) in 1965-70,
an administrator at Roosevelt Hospital (NY) in 1957-65.
Educational degrees: BA & MBA from Dartmouth College, MS in
hospital administration from Columbia University, JD from Temple
University. Newman is an elected member of the Institute of
Medicine of the National Academy of Science and of the National
Academy of Social Insurance. He was a partner in the Washington
DC office of the law firm Powell, Golstein, Frazer and Murphy
where he practiced health care law prior to joining the faculty
at New York University.
SUPPORT THESE HIGHLY QUALIFIED CANDIDATES
The SEIU National Industry Pension Fund, a member Fund of
the SEIU Master Trust, is also one of a dozen institutional
shareholders which are named plaintiffs in the pending derivative
suit against present and former Columbia/HCA officers and
directors. That suit, McCall et al vs. Richard L. Scott et al,
alleges that the defendants caused or recklessly ignored the
actions which led to Columbia/HCA being exposed to financial risk
from the Medicare and Medicaid fraud investigations now being
conducted. Medicare and Medicaid account for more than 40% of
Columbia/HCA revenues.
Columbia/HCA's share price has dropped by 30%, from $42 3/8
on March 19, 1997 (just before the FBI raids became public
knowledge) to $29 1/2 on March 11, 1998.
These candidates give shareholders an opportunity to vote
for highly-qualified directors independent of management, rather
than settling for the Board's hand-picked candidates. In light of
the ongoing fraud investigation of the Company, we believe Board
independence is crucial to restoring the Company's relations with
shareholders, regulators and consumers.
Seven current directors are defendants in the derivative
action: Thomas Frist (Chairman and CEO); R. Clayton McWhorter
(former Chairman of Columbia, former Chairman and CEO of
HealthTrust and former President and COO of HCA); Magdalena
Averhoff M.D. (physician investor at Columbia's Cedars Medical
Center in Miami); Frank Royal M.D. (physician with admitting
privileges at a Columbia hospital); T. Michael Long (partner,
Brown Brothers Harriman); William Young (owner, horse breeding
and warehousing companies), and Donald MacNaughton (former
Chairman and CEO of HCA). The only current directors not named
in the lawsuit are Carl Reichardt (former Chairman and
CEO of Wells Fargo); and Sister Judith Ann Karam (representative
of a religious healthcare organization involved in a joint
venture with the Company).
The four directors whose terms will expire at the 1998
meeting are Long, Young, Reichardt and MacNaughton. They are/are
not running for reelection [If not running: The incumbent Board
has nominated [insert names]. We do not oppose the election of
[insert two best Company nominees].] However, we urge you to
vote for Newman and Wallman instead of the other two nominees
because (1) Newman and Wallman are independent, highly qualified
and have the experience we believe the Company needs; (2)
Newman's experience heading federal agencies which provide more
than 40% of the Company's revenue, administering hospitals and
training hospital administrators equips him to make an important
contribution to solving the company's legal and operational
problems; (3) Wallman's SEC and securities law experience equips
him with the knowledge and experience needed to serve as an
independent shareholder advocate; (4) Both are willing to devote
the necessary time to the Company; they are not torn with
loyalties to many other boards.
We incorporate by reference all further information
concerning the directors election contained in the Company's 1998
proxy statement. We cannot offer assurance that the Company's
nominees will serve if elected with the Committee's nominees.
II. PROPOSAL TO BE VOTED ON BY SHAREHOLDERS
PROPOSAL TO GIVE EQUAL ACCESS TO THE COMPANY'S PROXY CARD
AND PROXY STATEMENT FOR ALL DULY-NOMINATED CANDIDATES FOR
DIRECTOR
"RESOLVED, that Article II, Section 11 of the Company's
bylaws be added to provide:
11. Equal Access to Proxy Statement and Proxy Card.
Management's proxy statement shall contain the same types and
amounts of information about each duly-nominated candidate for
director. Any and all proxy solicitation materials paid for by
the Company, including oral solicitations, shall contain the same
types and amount of information about each duly-nominated
candidate for director. "Duly-nominated candidate for director"
means any person who has been nominated as a candidate
for director of the Company in accordance with the provisions of
these bylaws or the Articles of Incorporation applicable to
nomination of candidates for director, without regard to whether
the person has been nominated by, or has been endorsed or
approved by, the Board of directors or any committee of the
Board, or whether the person has been nominated by a
shareholder."
Management opposes this proposal. This was predictable,
because the amendment would give shareholders a real choice in
the election of directors instead of only rubber-stamping
management's candidates.
Columbia management admits that the reason for its
opposition is that the amendment would give shareholders choices
- -- too many choices, management argues. Management asserts that
thousands of candidates might be nominated, which would make the
proxy statement and card too complicated. This is only wild,
baseless speculation. There is no evidence that any substantial
number of people have sought to become directors of Columbia. In
fact, other than candidates Newman and Wallman, we do not know of
any other shareholder-nominated candidates for director in the
history of the Company.
Moreover, the amendment would limit access to the Company's
proxy statement and card to only those candidates duly-nominated
in accordance with the Company's bylaws, a fact management
neglects to mention in its opposition.
Another specter raised by management is the notion that the
proxy statement will become a soapbox for candidates. The
proposed amendment, however, requires only that "the same types
and amounts of information" be given about each candidate. The
Company could limit information to the basic data required by SEC
rules, as it has done in the past. But if management were to
choose to make the proxy statement a place for its candidates to
express their views, equal time would have to be given to all
duly-nominated candidates.
What could be fairer?
We incorporate by reference the further information in the
Company's proxy statement on the shareholder proposals set for
shareholder vote.
III. VOTING RIGHTS AND PROCEDURES
The proxy card sent to you by the Company does not provide
a voting box for Wallman & Newman: you may wish to write in their
names, although we cannot offer any assurance as to whether the
Company will count such vote.
** You may vote on the proxy card enclosed herewith if you are
the "record holder" of the stock (meaning that your stock is held
in your own name). Most shareholders are not actually "record
holders" but instead hold through their broker, bank, or another
nominee -- which then has the responsibility of voting clients'
stock after obtaining instructions. Contact the record holder of
your stock for more information about how to vote for our
candidates or proposals. [**All paragraphs marked with ** will be
omitted in solicitations sent through ADP, brokers,
or other nominees.]
We will keep all proxy cards we receive confidential until
the meeting, unless ordered otherwise by a court.
You can readily change your vote if you have already voted.
A proxy can be revoked at any time prior to its being counted at
the meeting by (1) executing a later dated proxy card; (2)
appearing at the meeting to vote, or (3) delivering the
proxyholder or the Company's secretary written notice of
revocation prior to the date of the meeting. The Company's
offices are at One Park Plaza, Nashville TN 37203; telephone
(615) 344-9551.
The enclosed proxy card grants no discretionary authority:
the Committee will vote as you instruct us, and if matters come
before the meeting which are not set forth in the Company's proxy
statement or this proxy statement (which we do not anticipate, as
the Company's Certificate requires advance notice of any matter
to be presented), we will not vote your shares on those matters.
If you sign the enclosed card but do not direct us how to
vote on the proposal we will vote FOR the proposals and FOR
election of Newman and Wallman. All holders of common stock as
of _______________[record date] are entitled to vote. The
directors will be elected by plurality of shares voted for each
seat open. The affirmative vote of 75% of the outstanding stock
is required to enact the proposal. We incorporate herein by
reference the discussion in the Company's proxy statement of
voting requirements and outstanding securities.
IV. SOLICITATION
The participants in this solicitation will be the New
Columbia Shareholder Committee, Newman, Wallman, the SEIU Master
Trust (a trust for pension funds jointly administered by
SEIU officials and employers of SEIU members), and the Service
Employees International Union ("SEIU"). The Committee was formed
by the Trust and SEIU for the purposes of this solicitation and
welcomes additional members. The Trust now owns about 47,200
shares of the Company's common stock for SEIU National Industry
Pension Fund and other funds. In the past two years, the Trust
has had more than 60 transactions in company stock, having owned
121,200 shares as of 12/31/95. The SEIU National Industry
Pension Fund is one of the plaintiffs in the pending derivative
suit against current and former officers and directors of the
Company seeking a recovery for the Company. Other
plaintiffs include more than 10 public pension systems, including
New York State Common Retirement Fund and five New York City
Employee funds. The SEIU Master Trust has proposed a shareholder
resolution to give equal access to the Company's proxy card and
proxy statement for all duly-nominated candidates for director.
SEIU will bear the costs of this solicitation, which are
estimated at $30,000, which may include use of a professional
solicitor, and include the provision of counsel to the
candidates. It will not seek reimbursement from the Company. In
addition, its regular staff will solicit proxies, for which they
will receive no added compensation. The persons named in
the proxy card are SEIU President Andrew L. Stern and SEIU
Assistant Research Director Steve Askin. Proxies will be sought
by mail, fax, telephone and personal interview. Neither Newman
nor Wallman have worked for or received any compensation from any
other participant. SEIU has agreed to indemnify them from
expenses and claims arising from this solicitation. They have no
agreements or other arrangements with anyone about their conduct
as director if elected, nor about future transactions
involving the Company, nor regarding future employment by the
Company. None of the participants have any understandings or
arrangements with anyone with respect to the Company's
securities. Newman and Wallman do not own Company stock and have
not had any transactions in the Company's stock or with Company.
Local unions affiliated with SEIU represents about 1000 Company
employees. The Company reported as of 12/96 it had about 285,000
employees and 13 hospitals with some union representation. SEIU
locals regularly engage in negotiations over contracts
at different facilities and currently are doing so for
the Company's Los Robles facility (about 350 employees) and
recently negotiated a successor agreement at the Metrowest
facility. SEIU is currently engaged in an organizing effort at
the Company's Sunrise hospital in Las Vegas. None of these
facilities are on strike. Newman's business address: 4 Washington
Square North, Room 33, New York University, New York NY 10003.
Wallman's business address: 9332 Ramey Lane, Great Falls VA
22066-2025.
V. EXECUTIVE COMPENSATION/SECURITY OWNERSHIP OF DIRECTORS AND
EXECUTIVE OFFICERS
We incorporate herein by reference the information on these
matters contained in the Company's proxy statement.
VI. PROPOSALS FOR FUTURE MEETINGS
The deadline for submitting such proposals for inclusion in
the proxy statement for the 1999 annual meeting will be December
__ __, 1998.
VOTE NEWMAN & WALLMAN FOR COLUMBIA/HCA BOARD OF DIRECTORS
**IF YOU ARE A RECORD OWNER (I.E., YOU DO NOT OWN THROUGH
A BROKER, BANK OR OTHER NOMINEE), PLEASE RETURN THE ENCLOSED
PROXY CARD TO:
New Columbia Shareholder Committee
1343 L Street, N.W.
Washington D.C.
Fax 202-898-3309
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SOLICITED BY NEW COLUMBIA SHAREHOLDER COMMITTEE
for ANNUAL MEETING OF COLUMBIA/HCA SHAREHOLDERS
May 14, 1998
**FOR USE BY SHAREHOLDERS OF RECORD ONLY; DO NOT USE IF YOU OWN
THROUGH A BROKER, BANK OR OTHER NOMINEE (CONTACT US FOR HELP IN
GETTING A CARD FROM THEM)
The undersigned shareholder hereby appoints Andrew L.
Stern and Steven Askin proxies with full power of substitution to
vote for the undersigned at Columbia/HCA's 1998 annual meeting,
and at any adjournments thereof, on the matters set forth in the
Proxy Statement. The undersigned hereby directs this proxy
be voted in accordance with the instructions herein and grants no
discretionary authority. If not marked otherwise, this proxy
will be voted FOR the shareholder proposals and FOR election of
Newman and Wallman.
I. ELECTION OF DIRECTORS:
New Columbia Committee nominees: Steven M.H. Wallman, Howard N.
Newman
[ ] FOR all nominees
[ ] WITHHOLD AUTHORITY for all nominees
Instruction: To withhold authority to vote for election of one
or more persons nominated above by the New Columbia Shareholder
Committee, mark FOR above and cross out name(s) of persons
with respect to whom authority is withheld.
Company Nominees
The New Columbia Shareholder Committee intends to use this proxy
to vote for persons who have been nominated by Columbia/HCA
Healthcare Corporation to serve as directors, other than the
company nominees listed below. You may withhold authority to
vote for one or more additional company nominees, by writing the
name of the nominee(s) below. You should refer to the Company's
proxy statement and card for information concerning the company's
nominees.
The Committee cannot offer assurances that the Company's nominees
will serve if elected with the Committee's nominees.
Company nominees with respect to whom the Committee is not
seeking authority to vote for and WILL NOT exercise any such
authority:
________ and _________
Write in below the names of any additional company nominees
for which authority to vote is withheld:
_________________________________
II. PROPOSALS TO BE VOTED ON BY SHAREHOLDERS
A PROPOSAL TO GIVE EQUAL ACCESS TO THE COMPANY'S PROXY CARD
AND PROXY STATEMENT TO ALL DULY-NOMINATED CANDIDATES FOR
DIRECTOR
FOR [ ] AGAINST [ ] ABSTAIN [ ]
We recommend a vote FOR.
B DECLASSIFICATION OF BOARD OF DIRECTORS (ANNUAL ELECTION OF
ALL DIRECTORS)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE DATE, SIGN AND PROMPTLY MAIL IN THE SELF-ADDRESSED
ENVELOPE. PERSONS SIGNING IN REPRESENTATIVE CAPACITY SHOULD
INDICATE AS SUCH. IF SHARES ARE HELD JOINTLY, BOTH OWNERS
SHOULD SIGN.
SIGNATURE ________________________________ DATE ___________
PRINT NAME ________________________________
ADDRESS _____________________________________________________
___________________ ___________ __________________
ACCOUNT NO./SSN # OF SHARES TEL. NO./FAX NO.
