GREENBRIAR CORPORATION
1755 Wittington Place, Suite 300
Dallas, Texas 75234
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 12, 2003
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 12, 2003
at One Hickory Centre, 1800 Valley View Lane, Second Floor, Dallas, TX 75234, to
consider and vote upon the following matters:
Election of three 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 3,
2003 can vote at the meeting.
A copy of our Annual Report on Form 10-K for 2002 accompanies this
Proxy Statement.
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
November 3, 2003
GREENBRIAR CORPORATION
1755 Wittington Place
Dallas, Texas 75234
(972)407-8400
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held December 12, 2003
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 November 3, 2003.
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 3, 2003 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 703,846 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 495 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. 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. Therefore, a stockholder's only option in the election of directors is to
vote for the nominees or to withhold authority of the proxy to vote for the
nominees.
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, 1755 Wittington Place, Dallas, Texas 75234.
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.
ELECTION OF DIRECTORS
Nominees
At the annual meeting, three directors will be elected to hold office until the
2004 annual meeting of stockholders. The company's bylaws, as amended, provide
that new directors are elected annually, existing directors serve the full term
for which they were elected 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 three members.
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 3, 2003
is set forth below in "Securities Ownership of Certain Beneficial Owners."
Nominees and Business Experience
Being elected at the Annual Meeting to Term to expire in 2004
-------------------------------------------------------------
Roz Campisi Beadle Ms. Beadle has a background in public relations and
Age 47 marketing. She is self employed and has, in the past
five years, worked with III Forks Restaurant and RB
Ranch. Ms. Beadle is also extremely active in various
civic and community services and is currently working
with the Congressional Medal of Honor Society and on
the Medal of Honor Host City Committee (Gainesville,
Texas, USA). Ms. Beadle is a Cutting Horse breeder
specializing in the registration, buying, selling and
veterinary care of the breed.
James E. Huffstickler Mr. Huffstickler is Chief Financial Officer of
Age 61 Sunchase America, Ltd., a multi- state property
management company. He is a graduate of the
University of South Carolina and has worked for
Southmark Management, Inc., a nationwide real estate
management company. Mr. Huffstickler is a certified
public accountant.
2
Dan Locklear Mr. Locklear is chief financial officer of Sunridge
Age 51 Management Group, a real estate management company.
Mr. Locklear has worked for Johnstown Management
Company, Inc. and Trammel Crow Company. Mr. Locklear
is a certified public accountant and a licensed real
estate broker in the State of Texas.
3
Incumbent Directors and Business Experience
Victor L. Lund Mr. Lund has been a director of the company since
Age 74 1996. He 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. Mr. Lund is President and Chief Executive
Officer of Wedgwood Services, Inc., a construction
services company not affiliated with Greenbriar
Corporation.
Gene S. Bertcher Mr. Bertcher became President and Chief Executive
Age 53 Officer of the Company in January 2003. He has been
Executive Vice President, Chief 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
4
STOCK OWNERSHIP
The following table sets forth as of November 3, 2003, 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 2002 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 one stock dividend effective at the close of
business on October 20, 2003.
Common Stock
--------------------------------
Name and Address Number Percent
of Beneficial Owner of of
Shares Class
-------------------------------- --------------------------------
Sylvia M. Gilley(1 & 2) 186,884 25.5%
6211 Georgian Court
Dallas TX 75240
Victor L. Lund(3) 121,496 17.3%
816 NE 87th Avenue
Vancouver WA 98664
Floyd B. Rhoades(4) 89,534 12.4%
95 Argonaut Street
Aliso Viego CA 92656
Gene S. Bertcher(5) 1,260 <1.0%
1755 Wittington Place, Suite 300
Dallas TX 75254
Don C. Benton
Arrowhead Ranch
Route 1, Box 204 - -
Clarksville TX 75426
Roz Campisi Beadle
4103 Brook Tree Lane - -
Dallas TX 75287
James E. Huffstickler
1700 Abbey Place, Suite 111 - -
Charlotte NC 28209
Dan Locklear
1800 Valley View Lane - -
Suite 140
Dallas TX 75234
American Realty Trust, Inc.(6) 9,750 1.4%
1800 Valley View Lane
Suite 300
Dallas TX 75234
Basic Capital Management, Inc.(6) 7,077 1.0%
1800 Valley View Lane
Suite 300
Dallas TX 75234
5
Nevada Sea Investments, Inc.(6) 3,640 <1.0%
1800 Valley View Lane
Suite 300
Dallas TX 75234
International Health Products, Inc.(6) 16,916 2.4%
1800 Valley View Lane
Suite 300
Dallas TX 75234
One Realco Corporation (6) 14,496 2.1%
1800 Valley View Lane
Suite 300
Dallas TX 75234
Professional Investors Insurance 24,402 3.5%
Group, Inc. (6)
1800 Valley View Lane
Suite 300
Dallas TX 75234
Tacco Financial, Inc.(6) 18,460 2.6%
1800 Valley View Lane
Suite 300
Dallas TX 75234
All executive officers and directors as 122,756 17.5%
a group(five persons)
(1) The shares are owned by a grantor trust for the benefit of Sylvia M.
Gilley, the widow of James R. Gilley.
(2) Consists of 92,284 shares of common stock owned by JRG Investments Co.,
Inc., a corporation wholly owned by Sylvia M. Gilley ("JRG"); 11,000
shares of common stock owned by a grantor trust for the benefit of
Sylvia M. Gilley; options to James R. Gilley to purchase 20,000 shares
of common stock at $6.90 per share exercisable through December 31,
2009; options to James R. Gilley to purchase 20,000 shares of common
stock at $3.75 per share, exercisable through December 31, 2010;
options to James R. Gilley to purchase 20,000 shares of common stock at
$6.40 per share, exercisable through December 31, 2011; and 53,600
shares of common stock owned of record by Mrs. Gilley. The Gilley's
have pledged all of the shares in JRG to One Realco Corporation
(formerly known as Institutional Capital Corporation), a non-affiliated
entity, as collateral for repayment of a promissory note payable by JRG
to One Realco Corporation in the remaining principal amount of
$2,996,373.
(3) Consists of 121,496 shares of common stock owned by Mr. Lund.
(4) Consists of 69,534 shares of common stock owned by Mr. Rhoades, options
to Mr., Rhoades to purchase 20,000 shares of common stock at $175.00
per share.
(5) Consists of 1,260 shares of common stock owned by Mr. Bertcher.
(6) Based on a Schedule 13D, amended October 16, 2003, 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. The Form 13D
indicates that these entities and Mr. Phillips may be deemed a "Person"
within the meaning of Section 13D of the Securities Exchange Act of
1934.
6
EXECUTIVE COMPENSATION
The following tables set forth the compensation paid by the Company for services
rendered during the fiscal years ended December 31, 2002, 2001 and 2000 to the
Chief Executive Officer of the Company and to the other executive officers of
the Company whose total annual salary in 2002 exceeded $100,000, the number of
options granted to any of such persons during 2002 and the value of the
unexercised options held by any of such persons on December 31, 2002.
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, 2002 $12,000 - $5,500
Chairman, President and 2001 386,000 10,000 8,000
Chief Executive Officer 2000 460,000 10,000 5,500
Gene S. Bertcher, 2002 14,000 - $6,500
Executive Vice President and 2001 155,000 - 8,00
Chief Financial Officer 2000 185,000 - 4,500
(1) Constitutes directors' fees paid by the Company to the named individuals.
Option Grants Table
(Option Grants in Last Fiscal Year)
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year Per Share Date
---- ------- ----------- --------- ----
NONE
Aggregated Option Exercises in Last Fiscal
Year and FY-End Option Values
Value of Unexercised
Number of Securities In-the-Money
Shares Underlying Unexercised Options at 2002
Acquired Value Options at 2002 FY-End FY-End
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ------------------------- -------------------------
James R. Gilley - - 60,000 - - -
7
Stock Option Plan
The Board of Directors administers the Company's 1997 Stock Option Plan (the
"1997 Plan") and the 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. Under the two 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, neither Plan has a pre-set formula or
criteria for determining the number of options that may be granted. The exercise
price for an option granted is determined by the compensation committee, 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 compensation committee 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 50,000 shares of common stock under the 1997 Plan and 50,000 shares of
common stock under the 2000 Plan. As of November 3, 2003 no options have been
issued for the 1997 or 2000 Plans.
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 20,000 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 provided that Messrs. Gilley and Bertcher would
receive a salary of $12,000 and $14,000 per year. In addition, as in his
previous employment agreement Mr. Gilley would annually receive stock options
for 20,000 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
would receive partnership interests in each of these partnerships. Depending on
the circumstances Mr. Gilley would receive a limited partner interest of between
8% and 25.9%. Mr. Bertcher would receive a limited partner interest of between
4% and 10.5%. The company had 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 would serve as
the general partner for the partnerships for no additional compensation.
Mr. Gilley died on December 30, 2002 and Mr. Bertcher was named Chief Executive
Officer. The Board subsequently decided to return to salary based compensation
for Mr. Bertcher. Mr. Bertcher will receive a base salary of $130,000 for 2003.
8
REPORT OF INDEPENDENT DIRECTORS ON COMPENSATION
The compensation paid to the company's executive officers is reviewed and
approved annually by the independent members of the board of directors acting as
the Company's Compensation Committee. 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.
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.
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 Compensation
Committee believes 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.
Independent Directors
Victor L. Lund
Don C. Benton
AUDIT COMMITTEE REPORT
During the year 2001, due to the resignation of certain directors, the board of
directors was reduced to four persons. Due to the relatively small number of
board members it was decided by the board to eliminate all committees and
conduct all business directly with either the full board or, in certain
circumstances, with the two non-management directors. On January 14, 2002, the
board of directors reinstated the audit committee and made Victor L. Lund, Don
C. Benton and a new director, to be elected at the annual meeting as members. On
April 5, 2002, S. Louis Jackson was elected to the board of directors and named
to the Audit Committee.
The Audit Committee's duties and "charter," adopted by the board of directors on
December 9, 1991are to make recommendations for the accounting firm to serve as
the company's independent auditors, consult with the company's independent
auditors with regard to any audit plan adopted by the company, review the
company's financial statements with the management and the independent auditors
prior to publication, determine that no restrictions are placed by management on
the scope of implementation of the independent auditors' function and performing
such other functions as shall be appropriate to the effective discharge of all
such duties and responsibilities.
9
FINANCIAL INFORMATION
Financial Statement
The consolidated financial statements and auditor's report, the management
discussion and analysis of financial condition and results of operations,
information concerning the quarterly financial data for the fiscal year ended
December 31, 2002 and other information are included in the company's Form 10-K
which accompanies this proxy statement.
Independent Auditors
The board has, in accordance with the recommendation of its Audit Committee,
chosen the firm of Grant Thornton, LLP ("Grant Thornton") as independent
auditors for the company. Representatives of Grant Thornton are expected to be
present and to be available to respond to appropriate questions at the annual
meeting. They have the opportunity to make a statement if they desire to do so;
they have indicated that, as of this date, they do not.
Audit Fees
Grant Thornton's fees for our 2002 annual audit and review of interim financial
statements were $50,000.
Financial Information Systems Design and Implementation Fees
Grant Thornton did not render any professional services to the company in 2002
with respect to financial information systems design and implementation.
All Other Fees
Grant Thornton's fees for all other professional services rendered to the
company during 2002 were $152,000, including audit related services of $93,000
and non-audit services of $59,000. Audit related services included fees for
statutory audits, lender required audits and accounting consultations. Non-audit
services included fees for tax preparation and tax consultations.
The Audit Committee considers that the services rendered by Grant Thornton are
compatible with maintaining Grant Thornton's independence in conducting the
company's audit.
Audit Committee
Victor L. Lund
Don C. Benton
10
PERFORMANCE GRAPH
The following graph compares the cumulative total return on a $100 investment in
the company's common stock on December 31, 1998 through December 31, 2002, 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
1998 through 2002 for an industry peer group (1).
[GRAPHIC OMITTED]
-------------------
1 The company considers its peer group to be public companies whose
business is primarily in the assisted living industry. Those companies
are American Retirement Corporation, ARV Assisted Living, Inc.,
Assisted Living Concepts, Inc., Emeritus Corporation and Sunrise
Assisted Living, Inc.
11
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, former 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 was a co-maker) for the full
purchase price thereof, of which 20% of the principal amount of the note was a
recourse obligation of Mr. Gilley and the grantor trust and the balance of the
note was non-recourse. Interest on the note was payable at a rate of 5.5% per
annum, which accrued and was payable along with all principal upon maturity on
November 18, 2003, and was 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. Subsequent to Mr. Gilley's death his family and the
Company mutually agreed to cancel the note and return the stock held as
collateral to the Company. Further, the 20% recourse obligation was satisfied by
reducing certain debts owed to the Gilley family by $450,000.
Gene S. Bertcher, president and chief executive officer of the company, was
indebted to the company for an aggregate of $92,500, for notes issued in payment
for shares of Common Stock. Mr. Bertcher's notes were secured by a pledge of 520
shares of common stock. Interest on the notes accumulate at a rate equal to any
cash or stock dividends declared on the purchased stock and was due in a single
installment for each such note on or before October 1, 2003. On October 1, 2003
the collateral was returned to the Company and the debt was cancelled.
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.
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 so approved.
Organization of the Board of Directors
During the year 2002 the board of directors held four meetings.
On January 14, 2002, the board of directors reinstated the audit committee and
made Victor L. Lund and Don C. Benton members with one additional member to be
named from newly elected independent directors. On April 5, 2002, S. Louis
Jackson was elected to the board and named a member of the audit committee.
The board of directors acts as a committee of the whole for purposes of
nominations and executive compensation.
Any stockholder who wishes to recommend a prospective nominee for the board of
directors for consideration by the board for the election in 2004 may write:
Corporate Secretary, 1755 Wittington Place, Suite 300, Dallas, Texas 75234, on
or before January 1, 2004.
Compensation of Directors
12
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 2002.
ANNUAL REPORT
The annual report to stockholders, including consolidated financial statements,
for the year ended December 31, 2002, 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 2002,
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, 1755 Wittington Place, Suite 300, Dallas, Texas 75234.
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.
DEADLINE FOR SUBMISSION
OF PROPOSALS TO BE PRESENTED
AT THE 2004 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder who intends to present a proposal at the 2004 annual meeting of
stockholders must file such proposal with the company by January 1, 2004 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
13
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 One Hickory Centre, 1800
Valley View Lane, Third Floor, Dallas, Texas 75234, on December 12, 2003,
beginning at 10:00 a.m., Dallas Time, and the proxy statement in connection
therewith and appoints Gene S. Bertcher and Oscar Smith, 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 All nominees [ ] WITHHOLD AUTHORITY
DIRECTORS listed below (except as marked to vote for the
to the contrary below) nominee listed below
Nominees: Roz Campesi Beadle, James E. Huffstickler, Dan Locklear
(Instruction: To withhold authority to vote any individual nominee, write
that nominee's name on the line provided below.)
____________________________________________________________________________
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 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 _________________________________, 2003
____________________________________________
Signature of Stockholder
____________________________________________
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.