-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, VIDW7gV7N+FlfTTdO14XPFLH7ioIN3GiR10RC8wpbnkGpsFJDktPPUo44batdgLq kKT7deN5S/4Nje9ESIUnDg== 0000950110-94-000166.txt : 19940510 0000950110-94-000166.hdr.sgml : 19940510 ACCESSION NUMBER: 0000950110-94-000166 CONFORMED SUBMISSION TYPE: PREC14A CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940509 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BEVERLY ENTERPRISES INC /DE/ CENTRAL INDEX KEY: 0000812305 STANDARD INDUSTRIAL CLASSIFICATION: 8051 IRS NUMBER: 954100309 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PREC14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09550 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 1200 S WALDRON RD #155 CITY: FORT SMITH STATE: AR ZIP: 72903 BUSINESS PHONE: 5014526712 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FOOD & ALLIED SERVICE TRADES DEPT AFL CIO CENTRAL INDEX KEY: 0000922585 STANDARD INDUSTRIAL CLASSIFICATION: IRS NUMBER: 521072221 FILING VALUES: FORM TYPE: PREC14A BUSINESS ADDRESS: STREET 1: 815 - 16TH STREET, N.W. CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 2027377200 MAIL ADDRESS: STREET 1: 815 - 16TH STREET, N.W. CITY: WASHINGTON STATE: DC ZIP: 20006 PREC14A 1 PRE N&P BEVERLY ENTERPRISES & FOOD AND ALLIED SERV 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: _______________________________________________________________ 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 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 1 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. 2 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 3 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: 4 "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. 5 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. 6 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. 7 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 8 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. 9 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 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.
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. 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
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. / / -----END PRIVACY-ENHANCED MESSAGE-----