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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Pennsylvania Physician Healthcare Plan, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PENNSYLVANIA PHYSICIAN HEALTHCARE PLAN, INC.
c/o PELINO & LENTZ, P.C.
1650 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103
---------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 2000
---------------------------
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of
Pennsylvania Physician Healthcare Plan, Inc. (the "Company") will be held at One
Liberty Place, thirty second floor, 1650 Market Street, Philadelphia,
Pennsylvania on Thursday, January 28, 2000, at 10:00 a.m. for the following
purposes:
1. To consider and vote upon the approval and adoption of the
Pennsylvania Physician Healthcare Plan, Inc. Plan of Complete
Dissolution, a copy of which is contained in Exhibit A attached to
this Proxy Statement, pursuant to which the Company will be
voluntarily dissolved in accordance with Section 1975 of Chapter 19
of the Pennsylvania Business Corporation Law of 1988, as amended;
and
2. To consider and transact such other business as may properly come
before the Meeting or any adjournment of postponement thereof.
Only Shareholders of record on November 30, 1999 are entitled to vote
at the Special Meeting.
THE BOARD OF DIRECTORS HOPES THAT YOU WILL FIND IT CONVENIENT TO ATTEND
THE SPECIAL MEETING IN PERSON, BUT WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE
SIGN, DATE AND RETURN THE ENCLOSED PROXY TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE SPECIAL MEETING. RETURNING YOUR PROXY DOES NOT DEPRIVE YOU OF
YOUR RIGHT TO ATTEND THE SPECIAL MEETING AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
T. Clark Phillip
Assistant Secretary
Philadelphia, Pennsylvania
December 20, 1999
<PAGE>
PENNSYLVANIA PHYSICIAN HEALTHCARE PLAN, INC.
c/o PELINO & LENTZ, P.C.
1650 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19103
---------------------------
PROXY STATEMENT
---------------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 28, 2000
This Proxy Statement is being furnished to our Shareholders in
connection with the solicitation of proxies by our Board of Directors for use at
a Special Meeting of Shareholders to be held on January 28, 2000, at 10:00 a.m.,
local time, at One Liberty Place, thirty second floor, 1650 Market Street,
Philadelphia, Pennsylvania, and at any adjournment or postponement thereof (the
"Meeting") . If you sign, date and return the enclosed proxy card, the shares
represented by the proxy card will be voted as you direct. You may revoke any
proxy at any time before it is exercised by giving written notice to our
Secretary.
This Proxy Statement is dated December 20, 1999 and is first being
mailed to stockholders along with the related form of proxy on or about December
20, 1999.
All shares of our common stock represented by valid Proxies, unless the
Shareholder otherwise specifies, will be voted (i) FOR approval of the Plan of
Complete Liquidation (the "Plan") and (ii) at the discretion of the Proxyholders
with regard to any other matters which may properly come before the Meeting and
any adjournment thereof.
Any Shareholder executing a Proxy retains the right to revoke it at any
time before it is exercised at the Meeting. A Proxy may be revoked by delivery
of written notice to our Secretary, by execution of a later Proxy or by voting
shares in person at the Meeting. If not revoked, all shares represented by
properly executed Proxies will be voted as directed therein.
Securities Entitled to Vote
Shareholders of record on November 30, 1999 are entitled to notice of
and to vote at the Meeting. On the record date, there were 4,087 shares of our
Class A voting common stock outstanding and 1,074 shares of our Class B
non-voting common stock outstanding.
At a Special Meeting of Shareholders held on January 9, 1999, the
holders of our Class A voting common stock and Class B non-voting common stock
approved a plan of recapitalization and amended and restated articles of
incorporation. Pursuant to the plan of recapitalization, effective January 1,
2000, all shares of our Class A common stock and Class B non-voting
<PAGE>
common stock are automatically converted into shares of common stock. The
conversion ratio is 400 shares of common stock for each Class A share and 100
shares of common stock for each Class B share. Each share of common stock is
entitled to one vote.
Only a holder of record who is a "health professional" licensed in
Pennsylvania or elsewhere, a retired, but formerly licensed, "health
professional," a professional corporation (or other legally constituted
professional practice group) of "health professionals," an individual retirement
account or other retirement plan established by a person eligible to be a
Shareholder or in which such person is a participant or an employee or former
employee of us may vote on any of the matters presented at the Meeting (see
Exhibit "B" for certain "Definitions").
The holders of at least one-third (1/3) of the shares of common stock
entitled to vote must be present in person or represented by proxy at the
Meeting in order to constitute a quorum for the transaction of business. All
shares present in person or represented by proxy and entitled to vote are
counted for quorum purposes. Approval of the Plan requires the affirmative vote
of a majority of the votes cast. Abstentions are counted solely for the purpose
of determining whether a quorum is present.
THE COMPANY
General
We were organized in February, 1995 by Pennsylvania practicing
physicians to establish a physician-controlled managed care organization in
Pennsylvania.
On May 9, 1996 we filed an application with the Pennsylvania Department
of Health and the Pennsylvania Insurance Department (the "Insurance Department")
(together, the "Departments") for a license to operate a risk-assuming preferred
provider organization, or "PPO." Our license was granted in April, 1997.
Pursuant to this license, through October 1999 we operated a managed care
organization that offered a preferred provider organization plan in 23
contiguous counties in Pennsylvania to employers and other group purchasers of
health care plans.
We began marketing our initial PPO product to employer groups in April,
1997, with coverage beginning July 1, 1997. The PPO covered approximately 21,000
members through October 1999 and was our sole source of revenue.
On November 27, 1996 we filed an application with the Departments for a
license to operate a health maintenance organization, or "HMO." On March 22,
1999 our license was granted, permitting us to operate in three counties in
Pennsylvania. However, our HMO never became operational.
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Pennsylvania managed care laws and regulations govern the licensing and
operation of PPOs and HMOs in the Commonwealth of Pennsylvania. They require
that a managed care company possess an initial minimum net worth (generally, our
assets minus our liabilities) of $1,500,000 to operate an HMO and an additional
$1,175,000 for a risk-assuming PPO. In practice the Insurance Department
requires higher initial amounts equal to one fifteenth of projected fifth year
premium revenue. In addition to the net worth requirements, the Managed Care
Laws required that, before commencing the operation of our HMO, we deposit with
the Insurance Department cash or securities in a minimum amount of $100,000 to
insure against our insolvency. This deposit requirement was reviewed by the
Insurance Department at least annually. If we became unable to meet the
foregoing deposit and net worth requirements, or any more stringent requirements
that may be imposed, our PPO and HMO licenses may be revoked.
Recent Developments
During the second and third quarters of 1999 Physicians Care PPO, Inc.,
our PPO, which is our sole revenue generating subsidiary, incurred significantly
larger underwriting losses than anticipated. As a result of these losses, the
PPO's external cash requirements materially exceeded its internally generated
cash by an amount in excess of its ability to borrow or to access the capital
markets. We were unable to enter into any definitive arrangements to provide us
with the additional capital the PPO needed to fund its internal cash
requirements. Consequently, the PPO's net worth declined below that required by
Pennsylvania managed care laws and regulations.
On October 13, 1999, we met with the Insurance Department so that
satisfactory arrangements could be made to achieve a timely and orderly
cessation of the PPO's business, including the placing of subscribers with other
insurance providers. Although the Insurance Department had the authority to seek
a rehabilator to manage the PPO's day-to-day operations, it then advised us that
we had until October 25, 1999 to continue to remain in control in order to wind
up the PPO's affairs and also to continue to seek additional sources of funding.
The Insurance Department indicated that after that date it would assess the
PPO's financial condition, and, if no additional sources of funding were
obtained, the Insurance Department would seek an order from the Commonwealth
Court of Pennsylvania (the "Court") appointing a liquidator for the PPO.
We attempted to obtain additional capital from the Pennsylvania Medical
Society ("PMS") by the October 25, 1999 deadline set by the Insurance
Department. However, we were unable to come to a definitive arrangement with PMS
regarding the provision of additional capital.
Consequently, on October 24, 1999 the PPO consented to the entry of an
order of liquidation from the Court which placed the PPO under the control of
the Insurance Department and, among other things, revoked the PPO's license,
appointed a rehabilator and/or liquidator for the PPO, discharged the PPO's
employees, officers and directors, enjoined the PPO from
3
<PAGE>
transacting any further business and ordered that the PPO be dissolved. On
October 26, 1999 the Court issued its order.
Also on October 24, 1999, Physicians Care HMO, Inc., our HMO
subsidiary, which had not yet commenced operations, agreed to return its license
to the Insurance Department. On November 3, 1999 the Insurance Department issued
an order, as amended on November 8, 1999, pursuant to which it required us to
transfer $1 million of the HMO's $1.5 million statutory net worth deposit to the
PPO in order to provide for the payment of outstanding claims. As a result, the
Insurance Department has provided for the liquidation of the PPO and for the
payment of claims of its creditors.
We entered into an arrangement with certain of the Blue Cross/Blue
Shield plans doing business in the PPO's service area whereby these plans agreed
to offer coverage without medical underwriting to all of the PPO's members
effective November 1, 1999.
Through November 30, 1999, we leased 13,123 square feet of office space
in Harrisburg, Pennsylvania under a lease expiring in February, 2003. On
November 11, 1999, we entered into an agreement of termination and release
whereby the lease was terminated effective November 30, 1999 and we were
released from all claims under the lease. In exchange for the termination, we
made a payment to the landlord equal to two months' rent and transferred title
to the landlord of the property comprising 60 office cubicles, together with
related furniture and phone systems. We also subleased an additional 2,700
square feet of office space at the same location under a sublease which expired
by its terms in December, 1999.
We are not currently a party to any litigation.
We have now ceased all managed care operations. Other than our
remaining cash balances, our assets consist solely of a small amount of computer
equipment. All but two of our employees (our Chief Executive Officer and our
Chief Financial Officer) have been dismissed. At November 30, 1999 we had total
assets of approximately $300,000 and total liabilities of approximately
$500,000.
THE PROPOSAL
APPROVAL OF PLAN OF COMPLETE LIQUIDATION
General
On December 9, 1999, our Board of Directors unanimously approved and
adopted the Plan and directed that the Plan be submitted to a vote of the
Shareholders at the Meeting. The resolutions adopting the proposed Plan and the
proposed Plan itself are attached to this Proxy Statement as Exhibit A. In
general the Plan provides that, if approved by our Shareholders, we will wind up
our affairs and be dissolved. The Plan is described in more detail below.
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<PAGE>
All references to and summaries of the Plan in this Proxy Statement are
qualified in their entirety by reference to the Plan. The Plan will become
effective on the date on which the Plan is adopted by the requisite vote of the
Shareholders. The Plan provides that the liquidation will be completed within 12
months. As promptly as practical after the effective date of the Plan and upon
the filing of Articles of Dissolution in the Pennsylvania Department of State,
we will be dissolved pursuant to Section 1975 of the Pennsylvania Business
Corporation law of 1988, as amended (the "PBCL").
Terms of the Plan of Complete Liquidation
In accordance with Section 1975 of the PBCL, we will notify potential
claimants of the dissolution and pay existing liabilities. Any claims of
creditors against us, not otherwise released, which are not asserted within two
(2) years after the filing of the Articles of Dissolution will be forever
barred. The liquidation is expected to commence as soon as practical after
approval of the Plan by the Shareholders. Any sales of our assets will be made
in private transactions on such terms as are approved by our officers. It is not
anticipated that any further Shareholder votes will be solicited with respect to
the approval of the specific terms of any particular sales of assets approved by
our officers.
Although the Plan provides that, subject to the payment or provision
for payment of our indebtedness and other obligations, the cash proceeds of any
asset sales together with other available cash will be used to make a pro rata
distribution in cash to the holders of shares of our common stock in complete
cancellation of all of our stock, our liabilities substantially exceed our
assets and therefore it is extremely unlikely that available cash and amounts
received from the sale of assets will be adequate to provide for our
obligations, liabilities and expenses and to make cash distributions to
Shareholders. Therefore, upon our liquidation, all shares of our common stock
will be canceled.
We have closed our stock transfer records and discontinued recording
transfers of our shares and, thereafter, certificates representing our shares
are not assignable or transferable on our books except by will, intestate
succession or operation of law.
No Liquidating Distributions
Our liabilities are substantially greater than our assets. Therefore,
we believe it is extremely unlikely that Shareholders will receive any
liquidating distribution.
Sales of Our Assets
The Plan gives our officers the authority to sell all of our assets.
Sales of our assets will be made on such terms as are approved by our officers
and will be conducted through privately negotiated sales. Any sales will only be
made if determined that any such sale is in the best interests of the
Shareholders. It is not anticipated that any further Shareholder votes will be
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<PAGE>
solicited with respect to the approval of the specific terms of any particular
sales of assets approved by the officers. We do not anticipate amending or
supplementing this Proxy Statement to reflect any such agreement or sale. The
prices at which we will be able to sell our assets will depend largely on
factors beyond our control, including, without limitation, the rate of
inflation, changes in interest rates, the condition of financial markets and the
availability of financing to prospective purchasers of the assets. In addition,
we may not obtain as high a price for a particular property as we might secure
if we were not in liquidation.
Our Conduct Following Adoption of the Plan
Following approval of the Plan by our Shareholders, our activities will
be limited to winding up our affairs, taking such action as may be necessary to
preserve the value of our assets and distributing the proceeds from the sale of
our assets in accordance with the Plan. We will seek to liquidate all of our
assets in such manner and upon such terms as we, in our absolute discretion,
determine to be in the best interests of our Shareholders.
Following approval of the Plan by our Shareholders, we shall continue
to indemnify our officers, directors, employees and agents in accordance with
our amended and restated articles of incorporation, amended and restated
by-laws, any contractual arrangements and the PBCL for actions taken in
connection with the Plan and the winding up of our affairs. Our obligation to
indemnify such persons may be satisfied out of the proceeds from the sale of our
assets. The Board of Directors, in their absolute discretion, are authorized to
obtain and maintain insurance as may be necessary to cover our indemnification
obligations under the Plan.
Payment of Liabilities
Under the PBCL we are required in connection with our dissolution to
pay or provide for payment of all of our liabilities and obligations. Following
approval of the Plan by our Shareholders, we will attempt to pay all expenses
and fixed and other known liabilities with the proceeds from the sale of our
assets. We are currently unable to estimate with precision the exact amount of
those payments which may be required, but any such amount will be deducted
before the determination of amounts available for distribution to Shareholders.
After our liabilities, expenses and obligations have been satisfied, it is
extremely unlikely that any remaining funds will be available for cash payments
to our Shareholders.
Regulatory Approvals
Except for our compliance with the applicable rules and regulations of
the Securities and Exchange Commission in connection any distribution by us of
our assets in the form of cash payments to our Shareholders, no United States
federal or state regulatory requirements must be complied with or approvals
obtained in connection with the liquidation.
6
<PAGE>
Certain Federal Income Tax Consequences
The following discussion is a general summary of the material Federal
income tax consequences of the Plan to our Shareholders, but does not purport to
be a complete analysis of all the potential tax effects. The discussion
addresses neither the tax consequences that may be relevant to particular
categories of investors subject to special treatment under certain Federal
income tax laws (such as dealers in securities, banks, insurance companies,
tax-exempt organizations, and foreign individuals and entities) nor any tax
consequences arising under the laws of any state, local or foreign jurisdiction.
The discussion is based upon the Internal Revenue Code of 1986, Treasury
Regulations, Internal Revenue Service (the "IRS") rulings, and judicial
decisions now in effect, all of which are subject to change at any time; any
such changes may be applied retroactively. The following discussion has no
binding effect on the IRS or the courts and assumes that we will liquidate
substantially in accordance with the Plan.
Our liabilities substantially exceed our assets and it is therefore
extremely unlikely that any distributions will be made to our Shareholders. As a
general rule, the loss on a Shareholder's investment in us may be recognized
only when the securities are determined to be "worthless." Securities may be
considered to be worthless when there is no reasonable hope and expectation that
they will have any value in the future.
In the extremely unlikely event that distributions were to be made to
our Shareholders, distributions pursuant to the Plan may occur at various times
and in more than one tax year. No assurance can be given that the tax treatment
described herein will remain unchanged at the time of such distributions. The
following discussion presents our opinion. No ruling has been requested from the
IRS with respect to the anticipated tax treatment of the Plan and we will not
seek an opinion of counsel with respect to the anticipated tax treatment. The
failure to obtain a ruling from the IRS or an opinion of counsel results in less
certainty that the anticipated tax treatment summarized herein will be obtained.
If any of the conclusions stated herein proves to be incorrect, the result could
be increased taxation at the corporation and/or shareholder level, thus reducing
the benefit to our Shareholders and us from the liquidation.
Consequences to Us
After the approval of the Plan and until the liquidation is completed,
we will continue to be subject to income tax on our taxable income. We will
recognize gain or loss on sales of our property pursuant to the Plan. Cash
distributions to Shareholders will not result in any tax consequences to us. It
is not anticipated that the sale of our assets will result in any significant
gain or loss or the recognition of any significant tax obligations.
Consequences to Shareholders
We believe that it is extremely unlikely that Shareholders will receive
any distribution. Nevertheless, in the extremely unlikely event that a
distribution is made as a result
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<PAGE>
of the liquidation, it is our belief that Shareholders will recognize gain or
loss equal to the difference between (i) the amount of cash distributed to them
and (ii) their tax basis for their Class A Shares or Class B Shares. A
Shareholder's tax basis in his or her shares will depend upon various factors,
including the Shareholder's cost and the amount and nature of any distributions
received with respect thereto.
A Shareholder's gain or loss will be computed on a per share basis. In
the extremely unlikely event we were to make more than one liquidating
distribution, each would be allocated proportionately to each share of stock
owned by a Shareholder. The value of each liquidating distribution will be
applied against and reduce a Shareholder's tax basis in his or her shares of
stock. Gain will be recognized by reason of a liquidating distribution only to
the extent that the aggregate value of such distributions received by a
Shareholder with respect to a share exceeds his or her tax basis for that share.
Any loss will generally be recognized only when the final distribution from us
has been received and then only if the aggregate value of the liquidating
distributions with respect to a share is less than the Shareholder's tax basis
for that share. Gain or loss recognized by a Shareholder will be capital gain or
loss provided the shares are held as capital assets. Gain resulting from
distributions from a corporation pursuant to a plan of liquidation is therefore
generally capital gain rather than ordinary income. Ordinary income would result
in the event of the receipt of a distribution, not in liquidation, that is
characterized as a dividend for tax purposes, subject, in the case of corporate
holders, to a dividends received deduction. If it were to be determined that
distributions made pursuant to the Plan were not liquidating distributions, the
result could be treatment of the distributions as either dividends, return of
capital distributions or capital gain distributions. After the close of our
taxable year, if any distributions were made, we will provide Shareholders and
the IRS with a statement of the amount of cash distributed to the Shareholders
during that year.
THE FOREGOING SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS
INCLUDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE TO
ANY SHAREHOLDER. THE TAX CONSEQUENCES OF THE PLAN OF COMPLETE LIQUIDATION MAY
VARY DEPENDING UPON THE PARTICULAR CIRCUMSTANCES OF THE SHAREHOLDER. WE
RECOMMEND THAT EACH SHAREHOLDER CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE
TAX CONSEQUENCES OF THE PLAN OF DISSOLUTION.
Dissolution
Upon completion of the distribution of the proceeds from the sale of
our assets and the cancellation and redemption of our shares, our remaining
officers will take all the necessary steps and execute all the necessary
documents to bring about our dissolution in accordance with Laws of the
Commonwealth of Pennsylvania.
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Amendment
The resolution adopting the Plan provides that our Board of Directors may
modify, amend or terminate the Plan, notwithstanding Shareholder approval, to
the extent permitted by the PBCL.
Appraisal Rights
Under the PBCL, our Shareholders are not entitled to dissenters rights of
appraisal in connection with the matters to be voted on at the Meeting.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE TO
APPROVE THE ADOPTION OF THE PLAN OF COMPLETE LIQUIDATION.
Security Ownership of Management
The following table sets forth the number of shares of our Class A
voting common stock and Class B non-voting common stock held of record as of
November 30, 1999 by each of our three highest paid persons, who were officers
or directors during 1999, as well as the number of shares held of record owned
by all of our officers and directors as a group.
<TABLE>
<CAPTION>
Shares of Class A Common Shares of Class B Common
Stock Owned of Record Stock Owned of Record
---------------------------- ----------------------------
Name of Owner Number of Shares Percentage Number of Shares Percentage
- ------------- ---------------- ---------- ---------------- ----------
<S> <C> <C> <C> <C>
Richard A. Felice(1) 0 0 0 0
T. Clark Phillip(2) 0 0 0 0
Jack J. Jaroh(2) 0 0 0 0
All directors and officers 27 1% 21 2%
as a group (23)(3)
</TABLE>
- -----------------
(1) Owns options to purchase (i) 15,000 shares of Common Stock, granted April
30, 1999, which vest in equal annual increments over a three-year period
from the date grant and (ii) 1,000 shares of Common Stock, granted in
consideration of attendance at certain Board of Directors meetings, which
vest in equal annual increments over a three-year period from the
respective dates of grant. All options are exercisable at a price of $20.00
per share.
(2) Owns options to purchase 15,000 shares of Common Stock at a price of $20.00
per share, granted April 30, 1999, which vest in equal annual increments
over a three-year period from the date grant.
(3) Includes one share of Class A common stock held by a pension and profit
sharing plan with respect to which a Director acts as co-trustee.
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To our knowledge, no person owns more than 10% of any class of our securities.
Our directors may be regarded as our "parents", as that term is defined under
the Securities Act of 1933.
Independent Accountants
Representatives of Deloitte & Touche, LLP, our independent accountants,
are not expected to be present at the Meeting.
Cost of Solicitation
We will bear the cost of solicitation of proxies from Shareholders. In
addition to the use of mails, proxies may be solicited by telephone by our
officers and directors who will not be specially compensated for these services.
Other Matters
Our Board of Directors is not aware of any matters not set forth in
this proxy statement which may come before the Meeting. If, however, any such
matter properly comes before the Meeting, the persons named in the proxies will
vote the shares represented thereby in accordance with their judgment.
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EXHIBIT A
RESOLUTIONS OF THE SHAREHOLDERS
ADOPTING THE PLAN OF COMPLETE LIQUIDATION
RESOLVED, that the Shareholders of the Company adopt the following Plan
of Complete Liquidation:
PLAN OF COMPLETE LIQUIDATION
1. From and after the date of the adoption of this Plan, the Company
shall not engage in normal business activities. The officers of the Company
shall wind up the operations and the affairs of the Company in the manner
provided in Section 1975 of the Pennsylvania Business Corporation Law of 1988,
as amended, shall to the extent practicable liquidate those assets of the
Company that are not in liquid form and shall distribute pro rata to its
Shareholders all of the Company's assets, subject to all unpaid obligations,
liabilities and expenses of the Company, in complete cancellation of all of the
Company's stock.
2. The foregoing distribution, if any, and cancellation shall be made
and completed within 12 months of the date of the adoption of this Plan.
3. Upon completion of the distribution of assets and the cancellation
of the stock of the Company, the officers of the Company shall take all the
necessary steps and shall execute all the necessary documents to bring about the
dissolution of the Company in accordance with Laws of the Commonwealth of
Pennsylvania.
FURTHER RESOLVED, that the proper officers of this Company be and are
hereby authorized, empowered and directed to take all the necessary steps and
execute all the necessary documents to effect the foregoing Plan of Complete
Liquidation of this Company in accordance with the laws of the Commonwealth of
Pennsylvania and, within 30 days after the adoption of this resolution, to file
Form 966 with the District Director of the Internal Revenue, Pennsylvania,
together with a certified copy of this resolution.
FURTHER RESOLVED, that the Board of Directors reserves the power to
amend, modify or terminate the foregoing Plan in any respect prior to the time
it has become effective.
<PAGE>
EXHIBIT B
DEFINITIONS
As used in the proxy statement, the following term shall have the
definition indicated.
"Health professional" shall mean and include physicians,
podiatrists, dentists, oral surgeons, optometrists, pharmacists, chiropractors,
nurses, nurse practitioners, physical or occupational therapists and physicians'
assistants and other similar licensed professional persons.
