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:
Genesis Health Ventures, Inc.
Name of Person(s) Filing Proxy Statement:
Service Employees International Union
Payment of Filing Fee (check the appropriate box)
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
<PAGE>
PRELIMINARY PROXY STATEMENT
SHAREHOLDER SOLICITATION FOR PROPOSAL TO DECLASSIFY THE BOARD OF
GENESIS HEALTH VENTURES
Date sent to shareholders [est]:
January 22, 1999
ANNUAL STOCKHOLDERS MEETING
Genesis Health Ventures, Inc.
February [date], 1999
101 East State Street
Kennett Square, PA 19348
Service Employees International Union
1313 L Street
Washington, D.C. 20005
Tel. (202) 898-3237
Fax (202) 898-3309
Dear Fellow Genesis Shareholder:
We are sponsoring a shareholder proposal to declassify the
Company's board of directors: that is, have all directors stand
for election annually.
We believe the Company's poor performance calls for
corporate governance reform designed to promote shareholder value
and increase management accountability. Expanding the role of
shareholders in the governance of the corporation is especially
important in light of the Company's disappointing results:
Over the last year the price of the Company's shares
has declined approximately 70%, reaching a five year
low of $7 per share on December 22, 1998.
The Company's financial performance has substantially
deteriorated over the past year. Over the four
quarters ending on September 30, 1998, net loss to the
Company totaled $25.9 million, compared with net income
of $47.5 million for the previous four quarters.
The Company's standing in the credit markets has
deteriorated. On November 3, 1998, Standard & Poor's
placed the Company on CreditWatch with negative
implications. According to the Company's most recent
filing on Form 10-K, the Company renegotiated with its
bank lenders to make the financial covenants for
certain loans less restrictive and increased the
interest rates applying to certain loans on December
15, 1998.
We will make the following proposal at the shareholders meeting:
RESOLVED: The shareholders of Genesis Health Ventures, Inc.
("Company") urge the Board of Directors to take the
necessary steps, in compliance with state law, to declassify
the Board of Directors so that all directors are elected
annually. The declassification shall be done in a manner
that does not affect the unexpired terms of directors
previously elected.
Genesis Health Ventures' board is divided into three classes
of directors serving staggered three-year terms. This means that
an individual director faces elections only once every three
years, and shareholders only vote on roughly one-third of the
board each year.
The election of corporate directors is a primary avenue in
the American corporate governance system for shareholders to
influence corporate affairs and assure accountability of
management for the Company's financial performance. We believe
staggering of director terms prevents shareholders from annually
registering their views effectively on the performance of the
board and each director.
There is no reason to be concerned that annual election of
all directors would leave our Company without experienced Board
members: this could happen only if a majority of shareholders
were convinced that retaining present board members would be
harmful to the company.
We believe of greater concern is that staggered elections
insulate Board members and senior executives from the
consequences of poor performance by denying shareholders the
opportunity to quickly replace a Board pursuing failed policies.
Whether or not you believe the current Board and management
team is performing satisfactorily, we believe it is in your best
interest as a shareholder to be able to take definitive action if
the Board fails to realize the full potential of the Company.
Declassification of boards has become increasingly popular
with shareholders in recent years. In 1998, a majority of
shareholders at Eastman Kodak, Bristol-Myers Squibb, Bausch &
Lomb and Federated Stores (among other companies) voted in favor
of proposals asking management to repeal the classified board.
Stockholders also voted overwhelmingly in favor of a company-
sponsored resolution to declassify the board of directors at
Columbia/HCA Healthcare Corporation.
Allowing shareholders to annually register their views on
the performance of the Board collectively and each director
individually is, in our view, one of the best methods to insure
the Company will be managed in the best interests of the
shareholders.
We urge you to vote FOR this proposal.
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VOTING PROCEDURE AND VOTING RIGHTS
We asked management to include this proposal in its upcoming
proxy statement and proxy card, but do not know whether it will
do so. Our card (enclosed) grants us no discretionary authority
to vote on matters not listed. If you sign the enclosed card but
do not direct us how to vote, we will vote FOR the
declassification proposal, [management proposals] and FOR the
election of all nominated directors.
Approval of our proposal requires an affirmative vote of a
majority of shares voted, but is non-binding. We incorporate by
reference management's discussion in its proxy statement (pp. __)
of voting rights and procedures.
** 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 proposal. [**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 or agency. 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 101 East State
Street, Kennett Square PA 19348; telephone 610-444-6350. Only
holders of record of shares of Common and preferred Stock as of
the close of business on December [record date], 1998 will be
entitled to vote.
SOLICITATION
The participants in this solicitation are the Service
Employees International Union ("SEIU") and its staff. SEIU
beneficially owns [number of] shares of company common stock. We
expect to spend about $5,000 on the solicitation. Solicitation
will be done by phone, fax, letter and personal interview by our
staff and regular consultants, for which they will receive no
added compensation. Local unions affiliated with SEIU represent
Company employees at 35 facilities. SEIU locals regularly engage
in negotiations for contracts covering such facilities and
currently are doing so for 9 facilities. SEIU also regularly
engages in organizing activity at Company facilities. We intend
to solicit holders of a majority of the Company's voting stock.
The proxyholders named on our card are SEIU staff.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS/EXECUTIVE
COMPENSATION/ELECTION OF DIRECTORS
We incorporate herein by reference the information contained
on these subjects in management's 1999 proxy statement.
PROPOSALS FOR FUTURE MEETINGS
The deadline for submitting such proposals for inclusion in
the Company's proxy statement for the 2000 annual meeting will be
[date], 1999.
PLEASE VOTE FOR THE PROPOSAL TO DECLASSIFY THE 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:
Service Employees International Union
1313 L St. NW
Washington, DC 20005
Fax 202-898-3309
<PAGE>
PROXY
SOLICITED BY SEIU for ANNUAL MEETING OF GENESIS HEALTH VENTURES
SHAREHOLDERS
February [date ], 1999
**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 _______proxies with
full power of substitution to vote for the undersigned at Genesis
Health Ventures' 1999 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 all
proposals below and FOR the election of all nominated directors.
I. ELECTION OF DIRECTORS:
Nominees: ___________
[ ] FOR all nominees except __________
[ ] WITHHOLD AUTHORITY for all nominees
II. PROPOSALS TO BE VOTED ON BY SHAREHOLDERS
A DECLASSIFICATION OF BOARD OF DIRECTORS (ANNUAL ELECTION OF
ALL DIRECTORS)
FOR [ ] AGAINST [ ] ABSTAIN [ ]
We recommend a vote FOR
B [Company Proposal]
FOR [ ] AGAINST [ ] ABSTAIN [ ]
C [Company Proposal]
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.
