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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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PENNSYLVANIA PHYSICIAN HEALTHCARE PLAN, INC.
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Pennsylvania Physicians Care
Gary C. Brown, M.D., MBA
Chairman of the Board
Memorandum
To: Shareholders
Re: URGENT REQUEST
Date: February 26, 1999
This memo is being sent to you because we still have not received your ballot
concerning the amendment to the bylaws. Every vote is needed. This question
requires a 90% affirmative response of all shareholders. 14% of shareholders
have still not voted.
As of today, over 94% of your fellow physicians who have returned their ballots
have voted yes. This includes many that have changed their vote to yes from a
previous negative or abstention vote. We urgently need you to respond and vote
in favor of the amendment to the Bylaws.
Richard Felice, our President & CEO, and I have spoken to many physicians over
the last few weeks concerning the lowering of the 90% rule. One consistent
question is, "Why the change in philosophy?" When we first set up this
organization, each physician was entitled to a single vote regardless of the
number of shares they held. Under the recent recapitalization, votes are now one
per share. It is now theoretically possible for a single shareholder or a small
group to gain 10% of the votes. This would effectively allow this person or
group to control the destiny of the company in any issue concerning the
ownership structure.
The proposal lowers the threshold vote to approve a major corporate
restructuring to two-thirds (2/3) of all outstanding shares - still a formidable
requirement. Any such proposal would have to be favored by a large majority of
shareholders to be adopted, yet the will of this large majority could not then
be frustrated by a small minority. We chose 2/3 because it is a high number but
still attainable. Virtually no public company ever gets a 90% response to
anything.
If we truly want to control our destiny in the future, we need to have a voting
structure that does not put an inordinate amount of power in the hands of so
few. The success of our company depends on our working together.
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I have also been asked, "Are we planning to sell the company?" The answer is a
resounding no. Change of ownership can include many scenarios. If we wanted to
buy or merge with another organization, there is often a third company formed
and the interests of the two organizations are merged into the new entity. Even
if we have the controlling interest, this would trigger the need for a 90% vote.
As you can see by the difficulty that we are having getting busy physicians to
return their ballots, this is not an easy task. You can imagine how much more
difficult it will be to get responses if we sell additional shares. We need this
bylaw change to have critical flexibility in a rapidly changing health care
environment.
I would once again remind you that this company was formed to give physicians a
voice in health care. If you do not vote, you have no voice. We have come much
further than many thought possible. As we begin this year, we have passed our
membership goals and now provide care for over 14,000 members. We are also busy
at work on expansion plans.
We must position ourselves for success. Please join the overwhelming majority of
your peers who have already mailed in their ballots with an affirmative vote.
The board feels that this question is critical to our future. We will continue
this effort until we reach our goal. Please take the time to respond.
If you have any questions or would like to discuss this effort, please call
Richard Felice at his direct line, 717-565-7400. Together our company can make a
difference. As Benjamin Franklin said, "if we do not hang together, most
assuredly we will all hang separately."
Please execute and mail your enclosed proxy card promptly.
