-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vk5Dt3rD3pR8ECidijYWOjDZJhP0g9ofe7juSh77qTyqPraIloFG8r3/X1Jq2Mgo LOZYYJa5/DMa5udmMClvog== /in/edgar/work/0000950133-00-004084/0000950133-00-004084.txt : 20001013 0000950133-00-004084.hdr.sgml : 20001013 ACCESSION NUMBER: 0000950133-00-004084 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20001012 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TENET HEALTHCARE CORP CENTRAL INDEX KEY: 0000070318 STANDARD INDUSTRIAL CLASSIFICATION: [8062 ] IRS NUMBER: 952557091 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: SEC FILE NUMBER: 001-07293 FILM NUMBER: 738697 BUSINESS ADDRESS: STREET 1: 3820 STATE STREET CITY: SANTA BARBARA STATE: CA ZIP: 93105 BUSINESS PHONE: 8055637000 MAIL ADDRESS: STREET 1: P O BOX 31907 CITY: SANTA BARBARA STATE: CA ZIP: 93130 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL MEDICAL ENTERPRISES INC /NV/ DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TENET SHAREHOLDER COMMITTEE LLC CENTRAL INDEX KEY: 0001120103 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: M LEE PEARCE MD STREET 2: 1360 S OCEAN BLVD PH 5 CITY: POMPANO BEACH STATE: FL ZIP: 33062 MAIL ADDRESS: STREET 1: M LEE PEARCE MD STREET 2: 1360 S OCEAN BLVD PH 5 CITY: POMPANO BEACH STATE: FL ZIP: 33062 DFAN14A 1 w39771mbdfan14a.txt DEFINITIVE ADDITIONAL MATERIALS 1 SCHEDULE 14A 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 [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Proxy Statement [X] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 TENET HEALTHCARE CORPORATION - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) TENET SHAREHOLDER COMMITTEE, L.L.C. - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and 0-11. 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[ ] 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: - -------------------------------------------------------------------------------- 2 NOMINATING STATEMENT FOR DOCTOR PEARCE AT THE TENET HEALTHCARE ANNUAL MEETING OF SHAREHOLDERS October 11, 2000 My fellow shareholders and members of the Tenet Healthcare Corporation: I stand before you, on behalf of my fellow nominees, as victorious catalysts for change, grateful for the support of other shareholders who, together with us, have persuaded Tenet to take several meaningful first steps toward mainstream corporate governance and who have compelled management to focus on core economic issues and the need for improved performance. Today, I am proud to nominate for election to the Tenet Board of Directors the four nominees proposed by the Tenet shareholder Committee. In addition to myself, they are Ambassador Joseph M. Rodgers, former United States ambassador to France from 1985 - 1989 and recipient of the French Legion of Honor. He served as chief fundraiser for the Reagan-Bush 1984 Presidential Campaign and built over 200 HCA hospitals. He serves on the board of directors of many publicly traded companies, including: AMR Corporation/American Airlines, Inc., Gaylord Entertainment Company, Lafarge Corporation, and SunTrust Bank. Michael E. Gallagher is both a CPA and an MBA. He is an experienced hospital and healthcare executive, consultant, operator and the former Chairman, President and CEO of Healthnet. For the Board seat that Tenet eliminated following her nomination, I nominate Claire S. Farley, the past President of a Texaco unit with over $25 billion of annual revenues, a director of Boise Cascade Corporation and one of Fortune Magazine's Fifty Most Powerful Women In Business in 1998. Recently, she became the President and CEO of a healthcare internet start-up. As for myself, I have been a licensed physician for 45 years, and a former board member of three major health care companies. They are American Medical International ("AMI"), OrNda Health Corp., and Ivax Corporation. The first two companies, AMI and OrNda, are now part of Tenet Healthcare. I was a founder, builder and principal operator of three first-rate Florida hospitals. In each instance, my dedication to quality patient care and the pursuit of shareholder and investor interests, substantially increased the level of service for patients and the value received by all. I want to thank each of the nominees for the courage they demonstrated in persevering with me during this campaign to make Tenet better. Tenet has a miserable record on corporate governance. Indeed, it is one of the poorest in the S&P 500. Until we issued a wake up call, Tenet's directors and management who own less than 0.5% had forgotten that the company belongs to the other shareholders who own over 99.5% of the Company, who have no rights, except to elect a board over three years. Because of the pressures we - along with Institutional Shareholder Services ("ISS") and CalPers - have applied, Tenet has finally promised significant changes in corporate governance. These must not be empty pledges. Tenet must comply with the twice-expressed demand of its shareholders to abandon its staggered board. 3 It should do so, effective immediately, for all directors. It must appoint new, truly independent directors who are qualified, knowledgeable about healthcare, and free of any financial entanglements with the Company. Each director must own a meaningful equity stake in the Company, so that his interests are financially aligned with those of the shareholders. In addition, it must bury the poison pill and the blank check preferred stock. It must never ever again indulge in special stock deals, like Broadlane, that create incentives for senior management that conflict with the best interests of all shareholders. And it should join the vast majority of its fellow S&P 500 companies by reincorporating in Delaware, where shareholder's rights are more clearly defined. Credible studies have established that mainstream corporate governance practices, like those we have championed, and incorporation in Delaware increase shareholder value. Tenet's directors must direct management and hold them accountable. They must insist upon management's full disclosure of all material information concerning the Company - the good and the bad. Our nominees are committed - as we believe all directors should be - - to bringing Tenet into the mainstream of American corporate governance. In July, the Tenet Shareholder Committee challenged the Tenet Board to create sustainable economic growth for shareholders, rededicate Tenet to quality patient care and abandon Tenet's unacceptable corporate governance practices. On the economic front, we focused on improving cash flow, reducing debt, making Tenet's debt investment grade, enhancing receivables management and expanding EBITDA margins. In the last two quarters, Tenet has shown some improvement along with improving industry fundamentals. But two quarters do not make a track record of sustainable growth; nor does a substantial rise in stock price, even if it continues for another quarter or two. Keep in mind that Tenet's stock sold at $40.00 per share in April, 1998. The debt is still not investment grade and 97% of the much heralded fourth quarter reduction of $787 million was the result of asset sales, and only 3% was attributable to operating earnings. That is not a sustainable strategy for improving Tenet's debt to equity ratio and debt rating. Accounts receivable deteriorated from the fourth quarter of 1999 when compared to the first quarter of 2000. The 35 day difference between Tenet's accounts receivable aging of 80 days, and HCA's, 45 days, is indefensible and requires Tenet to borrow an additional $1 billion per year. Our nominees are committed - as we believe all directors should be - to a sustained focus on core economic issues for long-term sustainable growth in shareholder value. We strongly believe that healthcare is a profession and not merely a business. Unquestionably, there is an important financial component, but doctors, nurses, technicians and administrators are not fungible commodities to be exploited for short- term financial gain. 4 Quality patient care, delivered by dedicated professionals, must be the centerpiece of any hospital company. I say this as both a physician and as someone who knows how to profitably operate healthcare businesses. A quality hospital can never achieve profitability at the expense of patient care. In plain English: Quality patient care is an absolute prerequisite for good business and sustainable internal growth in this industry. Conscientious directors must be irrevocably committed to streamlining the corporate decision-making processes so that hospital administrators and care providers have the equipment, personnel and support they need to provide top quality patient care in each and every hospital and operating room. Directors must have the knowledge, the integrity and the fortitude to stamp out the fraud and abuse that is, unfortunately, all too prevalent in our Nation's health care delivery system. Our nominees are committed - as we believe all the directors should be - to sustained focus on the delivery of quality health care and the iron clad prevention of fraud and abuse. This proxy contest was totally avoidable. It was caused by an arrogant and entrenched management that refused to discuss or address the mainstream reform we proposed in our letter to the board, dated August 1, 2000. We are proud of what we have accomplished for all Tenet shareholders in the short period since July. In addition to the rising tide, our efforts, including this proxy contest, spurred the company to improved performance and contributed to the increased stock price. We urge you to vote for our slate. But win or lose, we intend to remain vigilant in holding Tenet's directors accountable to its shareholders on economic issues, on the delivery of quality health care, on the iron clad prevention of fraud and abuse, and on dramatically improved corporate governance. We again call upon management and the Board to fix the broken Tenet and unlock the unrealized potential of its franchise. Thank you. 5 THE TENET SHAREHOLDER COMMITTEE, L.L.C. FOR IMMEDIATE RELEASE Contact: Josh Pekarsky Sarah Zitter Milstein Kekst and Company (212) 521-4800 TENET SHAREHOLDER COMMITTEE SUCCEEDS IN BRINGING TENET'S CORPORATE GOVERNANCE ISSUES INTO SHARP FOCUS -- WILL CONTINUE HOLDING MANAGEMENT ACCOUNTABLE -- NEW YORK, NY, OCTOBER 11, 2000 - M. Lee Pearce, M.D., Chairman of the Tenet Shareholder Committee, today presented the committee's slate of four nominees for election to the Board of Directors of Tenet Healthcare Corporation (NYSE: THC) at the Company's annual meeting of shareholders held in Beverly Hills, California. Excerpts of Dr. Pearce's remarks follow: I stand before you, on behalf of my fellow nominees, as victorious catalysts for change, grateful for the support of other shareholders who, together with us, have persuaded Tenet to take several meaningful first steps toward mainstream corporate governance and who have compelled management to focus on core economic issues and the need for improved performance. Today, I am proud to nominate for election to the Tenet Board of Directors the four nominees proposed by the Tenet Shareholder Committee. I want to thank each of the nominees for the courage they demonstrated in persevering with me during this campaign to make Tenet better. Tenet has a miserable record on corporate governance. Indeed, it is one of the poorest in the S&P 500. Until we issued a wake up call, Tenet's directors and management who own less than 0.5% had forgotten that the company belongs to the other shareholders who own over 99.5% of the Company, who have no rights, except to elect a board over three years. Because of the pressures we - along with Institutional Shareholder Services ("ISS") and CalPERS - have applied, Tenet has finally promised significant changes in corporate governance. These must not be empty pledges. Tenet must comply with the twice-expressed demand of its shareholders to abandon its staggered board. It should do so, effective immediately, for all directors. It must appoint new, truly independent directors who are qualified, knowledgeable about healthcare, and free of any financial entanglements with the Company. Each director must own a meaningful equity stake in the Company, so that his interests are financially aligned with those of the shareholders. 6 In addition, it must bury the poison pill and the blank check preferred stock. It must never ever again indulge in special stock deals, like Broadlane, that create incentives for senior management that conflict with the best interests of all shareholders. And it should join the vast majority of its fellow S&P 500 companies by reincorporating in Delaware, where shareholders' rights are more clearly defined. Credible studies have established that mainstream corporate governance practices, like those we have championed, and incorporation in Delaware increase shareholder value. Tenet's directors must direct management and hold them accountable. They must insist upon management's full disclosure of all material information concerning the Company - the good and the bad. Our nominees are committed - as we believe all directors should be - - to bringing Tenet into the mainstream of American corporate governance. In July, the Tenet Shareholder Committee challenged the Tenet Board to create sustainable economic growth for shareholders, rededicate Tenet to quality patient care and abandon Tenet's unacceptable corporate governance practices. On the economic front, we focused on improving cash flow, reducing debt, making Tenet's debt investment grade, enhancing receivables management and expanding EBITDA margins. In the last two quarters, Tenet has shown some improvement along with improving industry fundamentals. But two quarters do not make a track record of sustainable growth; nor does a substantial rise in stock price, even if it continues for another quarter or two. Keep in mind that Tenet's stock sold at $40.00 per share in April 1998. The debt is still not investment grade and 97% of the much heralded fourth quarter reduction of $787 million was the result of asset sales, and only 3% was attributable to operating earnings. That is not a sustainable strategy for improving Tenet's debt to equity ratio and debt rating. Accounts receivable deteriorated from the fourth quarter of 1999 when compared to the first quarter of 2000. The 35 day difference between Tenet's accounts receivable aging of 80 days, and HCA's, 45 days, is indefensible and requires Tenet to borrow an additional $1 billion per year. Our nominees are committed - as we believe all directors should be - to a sustained focus on core economic issues for long-term sustainable growth in shareholder value. We strongly believe that healthcare is a profession and not merely a business. Unquestionably, there is an important financial component, but doctors, nurses, technicians and administrators are not fungible commodities to be exploited for short-term financial gain. Quality patient care, delivered by dedicated professionals, must be the centerpiece of any hospital company. I say this as both a physician and as someone who knows how to profitably operate healthcare businesses. A quality hospital can never achieve profitability at the expense of patient care. In plain English: Quality patient care is an absolute prerequisite for good business and sustainable internal growth in this industry. Conscientious directors must be irrevocably committed to streamlining the corporate decision-making processes so that hospital administrators and care providers have the equipment, personnel and support they need to provide top quality patient care in each and every hospital and operating room. Directors must have the knowledge, the integrity and the fortitude to stamp out the fraud and abuse that is, unfortunately, all too prevalent in our Nation's healthcare delivery system. Our nominees are committed - as we believe all the directors 7 should be - to sustained focus on the delivery of quality healthcare and the iron clad prevention of fraud and abuse. This proxy contest was totally avoidable. It was caused by an arrogant and entrenched management that refused to discuss or address the mainstream reform we proposed in our letter to the Board, dated August 1, 2000. We are proud of what we have accomplished for all Tenet shareholders in the short period since July. In addition to the rising tide, our efforts, including this proxy contest, spurred the company to improved performance and contributed to the increased stock price. We urge you to vote for our slate. But win or lose, we intend to remain vigilant in holding Tenet's directors accountable to its shareholders on economic issues, on the delivery of quality healthcare, on the iron clad prevention of fraud and abuse, and on dramatically improved corporate governance. We again call upon management and the Board to fix the broken Tenet and unlock the unrealized potential of its franchise. # # # -----END PRIVACY-ENHANCED MESSAGE-----