GREENBRIAR CORPORATION
14185 Dallas Parkway, Suite 650
Dallas, Texas 75254
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 28, 2001
Dear Stockholders of Greenbriar Corporation:
You are cordially invited to attend the annual meeting of stockholders of
Greenbriar Corporation to be held at 10:00 AM, local time on December 28, 2001
at 14185 Dallas Parkway, Suite 650, Dallas, Texas 75254, to consider and vote
upon the following matters:
Proposal 1. Election of two Class I directors to hold office in accordance
with the Articles of Incorporation and Bylaws of the company, and
the transaction of such other business that may properly come
before the meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on November 30, 2001
can vote at the meeting.
You are cordially invited to attend the annual meeting in person. Even if
you plan to attend the meeting, you are still requested to sign, date and return
the accompanying proxy in the enclosed addressed envelope. If you attend, you
may vote in person if you wish, even though you have sent your proxy.
By Order of the Board of Directors
/s/ Oscar Smith
- ---------------
Oscar Smith, Secretary
December 3, 2001
GREENBRIAR CORPORATION
14185 Dallas Parkway, Suite 650
Dallas, Texas 75254
(972)407-8400
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 28, 2001
The company is sending this proxy statement and the accompanying proxy card
to the holders of common stock and Series B preferred stock, of Greenbriar
Corporation, in connection with a solicitation of proxies by the board of
directors of the company from the stockholders for use at the annual meeting of
stockholders of the company. We are mailing this proxy statement and the
enclosed form of proxy beginning on or about December 7, 2001.
VOTING AND PROXY INFORMATION
Who May Vote
Holders of record of common stock and Series B preferred stock at the close
of business on November 30, 2001 are entitled to receive notice of and to vote
at the annual meeting. At the close of business on the record date there were
outstanding 293,248 shares of common stock and 615 shares of Series B preferred
Stock, the only outstanding securities of the company entitled to vote at the
annual meeting. The common stock is held by approximately 525 stockholders of
record and the preferred stock is closely held.
Required Votes
Each stockholder is entitled to one vote per share on all matters properly
brought before the stockholders at the annual meeting. Such votes may be cast in
person or by proxy. Abstentions may be specified as to the approval of the
Proposal and will not be counted toward the vote on the Proposal. Under the
rules of the American Stock Exchange, brokers holding shares for customers have
authority to vote on certain matters when they have not received instructions
from the beneficial owners and do not have such authority as to certain other
matters. The Exchange rules allow member firms of the Exchange to vote on the
Proposal without specific instructions from beneficial owners.
The directors will be elected by a plurality of the votes cast in person or
by proxy.
How to Vote
Votes may be cast in person at the annual meeting or by proxy using the
enclosed proxy card. A facsimile of the proxy will be accepted. All shares of
common stock and preferred stock that are represented at the annual meeting by
properly executed proxies received by the company prior to or at the annual
meeting and not revoked will be voted at the annual meeting in accordance with
the instructions indicated in their proxies. Unless instructions to the contrary
are specified in the proxy, each such proxy will be voted FOR the election as a
director of the nominees listed herein.
Proxies Can Be Revoked
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by filing with
the Secretary of the company, before the vote is taken at the annual meeting, a
written notice of revocation bearing a date later than the date of the proxy,
duly executing and delivering a subsequent proxy relating to the same shares or
attending the annual meeting and voting in person (although attendance at the
annual meeting will not in and of itself constitute a revocation of a proxy).
Any written notice of revocation should be sent to: Corporate Secretary,
Greenbriar Corporation, 14185 Dallas Parkway, Suite 650, Dallas, Texas 75254.
1
Expenses of Solicitation
The company will bear the expense of this solicitation, including the
reasonable costs incurred by custodians, nominees, fiduciaries and other agents
in forwarding the proxy material to you. The company will also reimburse
brokerage firms and other custodians and nominees for their expenses in
distributing proxy material to you. In addition to the solicitation made by this
proxy statement, certain directors, officers and employees of the company may
solicit proxies by telephone and personal contact.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
At the annual meeting, two Class I directors will be elected to hold office
until the 2004 annual meeting of stockholders. The company's Articles of
Incorporation provide that the directors are divided into three classes of equal
or approximately equal number and that the number of directors constituting the
board of directors will from time to time be fixed and determined by a vote of a
majority of the company's directors serving at the time of such vote. The board
of directors is now comprised of four members, with Class I consisting of two
member and Classes II and III consisting of one member each.
It is intended that the accompanying proxy, unless contrary instructions
are set forth therein, will be voted for the election of the nominees for
election as directors as set forth in the following table. If the nominees
become unavailable for election to the board of directors, the persons named in
the proxy may act with discretionary authority to vote the proxy for such other
persons as may be designated by the board of directors. However, the board is
not aware of any circumstances likely to render the nominees unavailable for
election. The withholding of authority or abstention will have no effect upon
the election of directors by holders of common stock and Series B preferred
stock because under Nevada law directors are elected by a plurality of the votes
cast, assuming a quorum is present. The presence of a majority of the
outstanding shares of common stock and Series B preferred stock, voting as one
class, will constitute a quorum. The shares held by each holder of common stock
and Series B preferred stock who signs and returns the enclosed form of proxy
will be counted for purposes of determining the presence of a quorum at the
meeting.
The following table sets forth certain information with respect to the
persons who will be the nominees for election at the annual meeting and the
other incumbent directors and executive officers of the company. Included within
the information below is information concerning the business experience of each
such person during the past five years. The number of shares of common stock
beneficially owned by each of the directors who own stock as of November 30,
2001 is set forth below in "Securities Ownership of Certain Beneficial Owners."
2
Nominees and Business Experience
Class I
Being elected at the Annual Meeting to Term to expire in 2004
- -------------------------------------------------------------
James R. Gilley Mr. Gilley has been Chairman of the company since November
Age 66 1989 and was President and Chief Executive Officer from
November 1989 until December 16, 1996. He was re-elected as
President and Chief Executive Officer on October 2, 1998.
Gene S. Bertcher Mr. Bertcher has been Executive Vice President, Chief
Age 52 Financial Officer and Treasurer of the company since
November 1989 and was a director from November 1989 until
September 1996. He was re-elected to the Board in 2000. Mr.
Bertcher is a certified public accountant
Incumbent Directors and Business Experience
Class II
Term expires in 2002
- --------------------
Victor L. Lund Mr. Lund has been a director of the company since 1996. He
Age 71 founded Wedgwood Retirement Inns, Inc. ("Wedgwood") in 1977.
Wedgwood became a wholly owned subsidiary of the company on
March 31, 1996. For most of Wedgwood's existence, Mr. Lund
was Chairman of the Board, President and Chief Executive
Officer, positions he held until Wedgwood was acquired by
the company. He continues to serve as Chairman of the board
of Wedgwood.
Class III
Term expires in 2003
- --------------------
Don C. Benton Mr. Benton has been a director of the company since June
Age 46 1994. He currently serves as a consultant to various Twelve
Step ministry programs. He was Director of Twelve Step
Ministries, Lovers Lane United Methodist Church of Dallas
from 1991 until 1997 and has been a consultant for Spiritual
Counseling and Education for the Addiction Recovery Center
since 1993. He also served in that capacity for the Argyle
Specialty Hospital. Mr. Benton is a Licensed Chemical
Dependency Counselor and a Certified Alcohol and Drug Abuse
Counselor.
Securities Ownership of Certain Beneficial Owners
The following table sets forth as of November 30, 2001, certain information
with respect to all stockholders known by the company to own beneficially more
than 5% of the outstanding common stock (which is the only outstanding class of
securities of the company, except for Series B preferred stock, the ownership of
which is immaterial), as well as information with respect to the company's
common stock owned beneficially by each director, director nominee, and current
executive officer whose compensation from the company in 2000 exceeded $100,000,
and by all directors and executive officers as a group. Unless otherwise
indicated, each of these stockholders has sole voting and investment power with
respect to the shares beneficially owned. All share numbers have been adjusted
to reflect the company's one for twenty-five reverse stock split at the close of
business on November 30, 2001.
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Common Stock
---------------------
Number Percent
Name and Address of of
of Beneficial Owner Shares Class
------------------- ------ -------
James R. Gilley(1 & 2) 115,074 34.4%
4265 Kellway Circle
Addison TX 75001
Sylvia M. Gilley(1 & 2) 115,074 34.4%
6211 Georgian Court
Dallas TX 75240
Victor L. Lund(3) 48,598 16.7%
816 NE 87th Avenue
Vancouver WA 98664
Floyd B. Rhoades(4) 38,119 12.7%
95 Argonaut Street
Aliso Viego CA 92656
Gene S. Bertcher(5) 3,160 1.1%
4265 Kellway Circle
Addison TX 75001
William A. Shirley, Jr.(6) 25,620 8.5%
2621 State Street
Dallas TX 75204
American Realty Trust, Inc.(7) 3,900 1.3%
10670 North Central Expressway
Suite 300
Dallas TX 75231
Basic Capital Management, Inc.(7) 5,650 1.9%
10670 North Central Expressway
Suite 600
Dallas TX 75231
Nevada Sea Investments, Inc.(7) 2,912 1.0%
10670 North Central Expressway
Suite 501
Dallas TX 75231
International Health Products, Inc.(7) 9,963 3.4%
10670 North Central Expressway
Suite 410
Dallas TX 75231
Davister Corporation (7) 10,048 3.5%
10670 North Central Expressway
Suite 410
Dallas TX 75231
Institutional Capital Corporation (7) 9,700 3.3%
10670 North Central Expressway
Suite 411
Dallas TX 75231
All executive officers, directors and 166,312 49.7%
director nominees as a group
(five persons)
(1) The shares are owned by a grantor trust for the benefit of Mr. and Mrs.
Gilley. Sylvia M. Gilley is the spouse of James R. Gilley.
(2) Consists of 36,914 shares of common stock owned by JRG Investments Co.,
Inc., a corporation wholly owned by James R. Gilley ("JRG"); 12,400 shares
of common stock owned by a grantor trust for the benefit of James R. and
Sylvia M. Gilley; options to James R. Gilley to purchase 8,000 shares of
common stock at $331.875 per share, exercisable through December 31, 2006;
options to James R. Gilley to purchase 8,000 shares of common stock at
$437.50 per share, exercisable through December 31, 2007; options to James
R. Gilley to purchase 8,000 shares of common stock at $62.50 per share,
exercisable through December 31, 2008; options to James R. Gilley to
purchase 8,000 shares of common stock at $17.25 per share exercisable
through December 31, 2009; options to James R. Gilley to purchase 8,000
shares of common stock at $9.50 per share, exercisable through December 1,
2010; a warrant to purchase 4,320 shares at an exercise price of $250.00
per share, exercisable through October 1, 2006, owned by the grantor trust
for the benefit of Mr. and Mrs. Gilley; and 21,440 shares of common stock
owned of record by Mrs. Gilley. Other than shares owned by the grantor
trust, Mrs. Gilley disclaims any beneficial ownership of the shares owned
by Mr. Gilley and JRG. Mr. Gilley and JRG disclaim beneficial ownership of
the shares owned by Mrs. Gilley. Mr. Gilley has pledged all of his shares
in JRG to Institutional Capital Corporation (formerly known as MS Holding
Corp.), a non-affiliated entity, as collateral for repayment of a
promissory note payable by JRG to Institutional Capital Corporation in the
remaining principal amount of $2,996,373. Of the shares of common stock
owned by the grantor trust, 8,000 shares were acquired by the trust from
the company in November 1993 in consideration of a $2,250,000 partial
recourse promissory note executed by the grantor trust and Mr. Gilley (as
co-maker). This note bears interest at an annual rate of 5.5% until
November 2003, when the entire principal balance and all accrued interest
is due. The note is collateralized by the 8,000 shares purchased by the
grantor trust, and the grantor trust and Mr. Gilley (as co-maker) have
personal recourse only for the first 20% of the principal balance.
4
(3) Consists of 48,598 shares of common stock owned by Mr. Lund.
(4) Consists of 30,072 shares of common stock owned by Mr. Rhoades, options to
Mr, Rhoades to purchase 8,000 shares of common stock at $437.50 per share,
and 47 shares owned by his spouse. Mr Rhoades disclaims beneficial
ownership of shares owned by his spouse.
(5) Consists of 1,840 shares of common stock issued for promissory notes of
$92,500, for which 520 shares are currently pledged as collateral, options
to purchase 800 shares of common stock for $281.25 per share, all of which
are vested.
(6) Includes 16,497 shares of common stock owned of record by Mr. Shirley and
9,123 shares of common stock which Mr. Shirley may acquire upon conversion
of certain limited partnership units.
(7) Based on a Schedule 13D, dated April 8, 1998, filed by each of these
entities and by Gene E. Phillips, each of these entities owns of record the
number of shares set forth for such entity in the table above and each of
such entities and Mr. Phillips disclaim they filed such Schedule 13D as a
"group". According to the Schedule 13D, Basic Capital Management, Inc. may
be deemed to beneficially own 12,462 shares, including the shares owned of
record by American Realty Trust, Inc. and Nevada Sea Investments, Inc., and
Mr. Phillips may be deemed to beneficially own all 42,173 shares owned of
record and beneficially by these six entities. In the Schedule 13D, Mr.
Phillips does not affirm beneficial ownership of any of these shares.
EXECUTIVE COMPENSATION
The following tables set forth the compensation paid by the company for
services rendered during the fiscal years ended December 31, 2000, 1999 and 1998
to the Chief Executive Officer of the company and to the other executive
officers of the company whose total annual salary in 2000 exceeded $100,000, the
number of options granted to any of such persons during 2000 and the value of
the unexercised options held by any of such persons on December 31, 2000.
Summary Compensation Table
Long Term
Compensation-
Number of
Shares of
Name and Annual Common Stock All
Principal Compensation- Underlying Other
Position Year Salary Options Compensation(1)
--------- ---- ------------- ------------- ---------------
James R. Gilley, 2000 $460,000 8,000 $5,500
Chairman, President and 1999 479,000 8,000 6,500
Chief Executive Officer 1998 414,000 8,000 6,500
Gene S. Bertcher, 2000 185,000 - 4,500
Executive Vice President and 1999 198,000 8,000 4,500
Chief Financial Officer 1998 162,000 4,000 -
Robert L. Griffis (2) 2000 100,000 - -
Senior Vice President 1999 111,000 - -
1998 90,000 1,200 -
(1) Constitutes directors' fees paid by the company to the named individuals.
(2) Mr. Griffis is no longer employed by the company.
5
Option Grants Table
(Option Grants in Last Fiscal Year)
Percent of
Number of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year Per Share Date
---- ---------- ------------- ----------- ----------
James R. Gilley 8,000 100% $9.50 12/31/10
Aggregated Option Exercises in Last Fiscal
Year and FY-End Option Values
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options at 2000
Shares Acquired Value Options at 2000 FY-End FY-End
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- --------------- -------- ----------- ------------- ----------- -------------
James R. Gilley -- -- 40,000 -- -- --
Gene S. Bertcher -- -- 800 -- -- --
Robert L. Griffis -- -- -- -- -- --
Stock Option Plan
The board of directors administers the company's 1992 Stock Option Plan, as
amended (the "1992 Plan"), 1997 Stock Option Plan (the "1997 Plan"), and 2000
Stock Option Plan (the "2000 Plan"), each of which provides for grants of
incentive and non-qualified stock options to the company's executive officers,
as well as its directors and other key employees and consultants in the case of
the 1997 Plan. Under the Plans, options are granted to provide incentives to
participants to promote long-term performance of the company and specifically,
to retain and motivate senior management in achieving a sustained increase in
stockholder value. Currently, none of the plans has a pre-set formula or
criteria for determining the number of options that may be granted. The exercise
price for an option granted under both Plans is determined by the board of
directors, in an amount not less than 100 percent of the fair market value of
the company's common stock on the date of grant. The board of directors reviews
and evaluates the overall compensation package of the executive officers and
determines the awards based on the overall performance of the company and the
individual performance of the executive officers. The company currently has
reserved 8,700 shares of common stock for issuance under the 1992 Plan, 20,000
shares of common stock under the 1997 Plan and 20,000 shares of common stock
under the 2000 Plan. As of the date of this proxy statement options have been
granted for all shares reserved under the 1992 Plan and all but 444 shares under
the 1997 Plan.
6
Employment Agreements
Until October 18, 2001, the company had an employment agreement with James
R. Gilley, Chairman, President and Chief Executive Officer, dated January 1,
1997, that provided for a three year term that recommenced each day. The
agreement provided for a base salary of $460,000 and 8,000 fully vested,
non-qualified stock options each year in lieu of any cash bonus.
Until October 18, 2001, the company had an employment agreement with Gene
S. Bertcher, Executive Vice President and Chief Financial Officer. The
agreement, dated January 1, 1997, provided for a two year term that recommenced
each day. The agreement provided for compensation of $180,000 per year and
discretionary bonus.
On October 3, 2001 the company settled a dispute with a significant
preferred shareholder. As part of the settlement the company transferred eleven
assisted living communities to that shareholder. While the company and its
senior executives believe the settlement was very favorable to the company they
also recognized that, due to the reduced size of the company, it would be
necessary to reduce overhead costs.
On October 18, 2001 the employment contracts with Messrs. Gilley and
Bertcher were amended to reduce the cash drain to the company. The original
employment contracts provided that any reduction in compensation would trigger a
required severance payment within five days to Messrs. Gilley and Bertcher of
$1,380,000 and $360,000 respectively. Messrs. Gilley and Bertcher have agreed to
accept notes from the company for the amounts if paid timely. These notes are
non-interest bearing and are not due until December 31, 2004. There are certain
acceleration provisions that will only be effective if the company violates the
terms of the amended employment contracts.
The amended employment contracts provide that Messrs. Gilley and Bertcher
will receive a salary of $12,000 per year. In addition, as in his previous
employment agreement Mr. Gilley will annually receive stock options for 8,000
shares of common stock. These options are exercisable at the market price of the
company's stock at the time the options are granted and are in lieu of any cash
bonus Mr. Gilley might have otherwise received.
The amended employment contracts also provide for incentive compensation
for Messrs. Gilley and Bertcher. The company has agreed to conduct its future
business through the use of limited partnerships. Messrs. Gilley and Bertcher
will receive partnership interests in each of these partnerships. Depending on
the circumstances Mr. Gilley will receive a limited partner interest of between
8% and 25.9%. Mr. Bertcher will receive a limited partner interest of between 4%
and 10.5%. The company has agreed that during the term of the employment
contacts, which expire on December 31, 2004, all property acquisitions shall be
made using a partnership structure. An affiliate of Mr. Gilley will serve as the
general partner for the partnerships for no additional compensation.
Compensation Review
The compensation paid to the company's executive officers is reviewed and
approved annually by the independent members of the board of directors. In
addition to approving annual compensation for the company's executive officers,
the independent directors approve any incentive awards for executive officers
and other key employees, any stock option grants and additional benefits such as
the company's 401(k) plan.
The company's compensation philosophy is to attract, retain and reward
executives who have shown they are capable of leading the company in achieving
its business objectives and performance goals. These objectives include
preserving and increasing the company's asset value; positioning the company's
operations in geographic markets offering long term, profitable growth
opportunities; preserving and enhancing shareholder value and keeping the
company competitive in its marketing and operations. The accomplishment of these
objectives is measured against conditions prevalent in the assisted living
industry. In recent years the industry has grown to be a highly competitive
industry for residents, real estate and services in a rapidly changing regional
and national environment.
7
The board of directors determined that the primary forms of executive
compensation should be the incentive system discussed above. The company's
performance is a key consideration (to the extent that such performance can be
fairly attributed or related to an executive's performance) and each executive's
responsibilities and capabilities are key considerations. The independent
directors strive to keep executive compensation competitive for comparable
positions in other corporations where possible. In addition, the independent
directors believe in equity compensation wherein executives will be additionally
rewarded based on increasing the company's shareholder value. Base salaries are
predicated on a number of factors, including:
o recommendation of the Chief Executive Officer;
o knowledge of similarly situated executives at other companies;
o the executive's position and responsibilities within the company;
o the board of directors' subjective evaluation of the executive's
contribution to the company's performance;
o the executive's experience and
o the term of the executive's tenure with the company.
Chief Executive Officer Compensation
The board of directors reviewed the compensation of the Chief Executive
Officer in connection with the amendment to his Employment Agreement described
above. The board approved the compensation plan set forth in that agreement as
the best means to accomplish the company's objectives.
8
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a $100
investment in the company's common stock on December 31, 1996 through December
31, 2000, based on the company's closing stock price on December 31, for each of
those years. The same information is provided for the Standard & Poor's 500
index and, from 1996 through 2000 for an industry peer group1.
- -----------------------------
1 The company considers its peer group to be public companies whose
business is primarily in the assisted living industry. Those companies
are Alterra Healthcare Corporation, ARV Assisted Living, Inc.,
Assisted Living Concepts, Inc., Emeritus Corporation, Regent Assisted
Living, Inc. and Sunrise Assisted Living, Inc. Since December 31,
2000, Assisted Living Comcepts and Regent Assisted Living, Inc. have
been removed from major stock exchange listing.
9
Certain Relationships and Related Transactions
The following paragraphs describe certain transactions between the company
and any stockholder beneficially owning more than 5% of the outstanding common
stock, the executive officers and directors of the company and members of the
immediate family or affiliates of any of them, which occurred since the
beginning of the 1998 fiscal year.
On November 19, 1993 the company sold 8,000 unregistered shares of its
common stock to The April Trust, a grantor trust for the benefit of James R.
Gilley, Chairman, President and Chief Executive Officer of the company, and his
wife, at a price equal to the closing price of the shares on the American Stock
Exchange on that date ($281.25) per share for consideration consisting of a
$2,250,000 promissory note (for which Mr. Gilley is a co-maker) for the full
purchase price thereof, of which 20% of the principal amount of the note is a
recourse obligation of Mr. Gilley and the grantor trust and the balance of the
note is non- recourse. The note bears interest at a rate of 5.5% per annum,
which accrues and is payable along with all principal upon maturity on November
18, 2003, and is secured by a pledge of the stock back to the company to hold as
collateral for payment of the note pending payment in full. On December 16,1996,
the compensation committee extended the due date of the note to November 18,
2008.
Gene S. Bertcher, an officer of the company, is indebted to the company for
an aggregate of $92,500, for notes issued in payment for shares of Common Stock.
Mr. Bertcher's notes are secured by a pledge of 520 shares of common stock. Such
notes bear interest at a rate equal to any cash or stock dividends declared on
the purchased stock and are due in a single installment for each such note on or
before October 1, 2002.
As part of the Wedgwood Acquisition and as an accommodation to the sellers
to assist them to help achieve a tax-free acquisition, James R. Gilley and
members of his family agreed to contribute a retail property in North Carolina
to the company in exchange for 27,000 shares of the company's Series D preferred
stock. Mr. Gilley and his family had owned the retail property for over five
years. The consideration received by James R. Gilley and members of his family,
valued at $3,375,000, was based upon an independent appraisal of the North
Carolina shopping center. The Series D preferred stock is unregistered, has no
trading market unless converted to common stock and is entitled to one vote per
share on all matters to come before a meeting of stockholders. The Series D
preferred stock bears a cumulative quarterly dividend of 9.5% per year, which
approximates the cash flow Mr. Gilley and his family members were receiving from
the retail property prior to its contribution to the company. Mr. Gilley and his
family members and affiliates transferred all of the shares of Series D
preferred stock to The April Trust effective April 1997. On July 1, 2001 the
Series D Preferred Stock was converted to a note due June 30, 2004. The note
bears interest at the rate of 10% per annum.
The company agreed to register the shares of common stock into which the
Series E preferred stock was converted, in connection with the Wedgwood
Acquisition, a large percentage of which is held by Victor L. Lund, under
limited circumstances, as follows: commencing two years after the closing of the
Wedgwood Acquisition, the company agreed to give the holders of such shares the
right to demand registration of all or a portion of the common stock provided at
least a majority of the shares join in such demand and the company agreed to
give the holders of the common stock "piggy-back" registration rights to include
all or a portion of the shares in any other registration statement filed by the
company under the Securities Act (other than on Form S-8 or Form S-4), subject
to certain rights of the company not to include all or a portion of such shares
under certain circumstances. The company agreed to pay all expenses of the
demand or piggy-back registration, other than underwriting fees, discounts and
commissions.
The company's executive officers will participate in the profits and loss
derived from the company's future involvement in real estate and senior living
properties (see Employment Agreements above).
It is the policy of the company that all transactions between the company
and any officer or director, or any of their affiliates, must be approved by
non-management members of the board of directors of the company. All of the
transactions described above were approved.
10
Organization of the Board of Directors
During the year 2000 the board of directors held two meetings. The
executive committee men once, the audit committee met twice and the compensation
committee met twice.
During the year 2001, due to the resignation of certain directors, the
board of directors has been reduced to four persons. Due to the relatively small
number of board members it was decided by the board to eliminate the committees
and conduct all business directly with either the full board or, in certain
circumstances, with the two non-management directors.
Any stockholder who wishes to recommend a prospective nominee for the board
of directors for consideration by the board for the election in 2002 may write:
Corporate Secretary, 14185 Dallas Parkway, Suite 650, Dallas, Texas 75254, on or
before January 1, 2002.
Compensation of Directors
The company pays each director a fee of $2,500 per year plus a meeting fee
of $1,000 for members of management and $2,000 for non-management directors for
each board meeting attended.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3, 4 and 5 furnished to the company
pursuant to Rule 16a-3(e) promulgated under the Securities Exchange Act of 1934
(the "Exchange Act"), or upon written representations received by the company,
the company is not aware of any failure by any director, officer or beneficial
owner of more than 10% of the company's common stock to file with the Securities
and Exchange Commission, on a timely basis, any Form 3, 4 or 5 relating to 1998.
ANNUAL REPORT
The annual report to stockholders, including consolidated financial
statements, for the year ended December 31, 2000, accompanies the proxy material
being mailed to all stockholders. The annual report is not a part of the proxy
solicitation material. The annual report is the company's Form 10-K for 2000,
including the financial statements and schedules, as filed with the Securities
Exchange Commission. A stockholder may also request copies of any exhibit to the
Form 10-K, and the company will charge a fee to cover expenses to prepare and
send any exhibits. You may request these from: Corporate Secretary, Greenbriar
Corporation, 14185 Dallas Parkway, Suite 650, Dallas, Texas 75254.
OTHER MATTERS
The board of directors does not intend to bring any other matters before
the annual meeting and has not been informed that any other matters are to be
presented to the annual meeting by others. In the event that other matters
properly come before the annual meeting or any adjournments thereof it is
intended that the persons named in the accompanying proxy and acting thereunder
will vote in accordance with their best judgment.
11
DEADLINE FOR SUBMISSION
OF PROPOSALS TO BE PRESENTED
AT THE 2002 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who intends to present a proposal at the 2002 annual
meeting of stockholders must file such proposal with the company by March 2,
2002 for possible inclusion in the company's proxy statement and form of proxy
relating to the meeting.
By Order of the Board of Directors
/s/ Oscar Smith
Oscar Smith, Secretary
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Greenbriar Corporation
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby acknowledges receipt of the notice of annual meeting
of stockholders of Greenbriar Corporation, to be held at the offices of the
company at 14185 Dallas Parkway, Suite 650, Dallas, Texas 75254, on December 28,
2001, beginning at 10:00 a.m., Dallas Time, and the proxy statement in
connection therewith and appoints James R. Gilley and Gene S. Bertcher, and each
of them, the undersigned's proxies with full power of substitution for and in
the name, place and stead of the undersigned, to vote upon and act with respect
to all of the shares of common stock and Series B preferred stock of the company
standing in the name of the undersigned, or with respect to which the
undersigned is entitled to vote and act, at the meeting and at any adjournment
thereof.
The undersigned directs that the undersigned's proxy be voted as follows:
1. ELECTION OF [ ] FOR the Class 1 nominees [ ] WITHHOLD AUTHORITY
DIRECTORS listed below (except as marked to vote for the Class I
to the contrary below) nominees listed below
Class I nominees: James R. Gilley, Gene S. Bertcher
(Instruction: To withhold authority to vote any individual nominee, write
that nominee's name on the line provided below.)
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2. IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER WHICH MAY PROPERLY COME
BEFORE THE MEETING.
This proxy will be voted as specified above. If no specification is made, this
proxy will be voted for the election of the Class I director nominees in item 1
above.
The undersigned hereby revokes any proxy heretofore given to vote or act with
respect to the common stock or Series B preferred stock of the company and
hereby ratifies and confirms all that the proxies, their substitutes, or any of
them may lawfully do by virtue hereof.
If more than one of the proxies named shall be present in person or by
substitute at the meeting or at any adjournment thereof, the majority of the
proxies so present and voting, either in person or by substitute, shall exercise
all of the powers hereby given.
Please date, sign and mail this proxy in the enclosed envelope. No postage is
required.
Date , 2001
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Signature of Stockholder
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Signature of Stockholder
Please date this proxy and sign your name exactly as it
appears hereon. Where there is more than one owner, each
should sign. When signing as an attorney, administrator,
executor, guardian or trustee, please add your title as
such. If executed by a corporation, the proxy should be
signed by a duly authorized officer.