NOTICE OF SETTLEMENT OF CLASS ACTION LAWSUIT PERTAINING TO ST.FRANCIS MEDICAL CENTER EMPLOYEES' RETIREMENT PLAN

If you are a vested participant in the St. Francis Medical Center Employees' Retirement Plan ("Pension Plan"), you are a member of the proposed Class and therefore your rights will be affected by a proposed settlement of the class action lawsuit entitled Orlowski, et al., v. St. Francis et. al., Civil Action No. GD 02-17811. (You are not a member of the Class if the Pension Plan previously purchased an annuity for you.) In this Notice, we refer to the proposed settlement as "Settlement Agreement." This Settlement Agreement, dated as of October 20, 2003, for which Court approval is now sought, is between Plaintiffs THEODORE ORLOWSKI and LAWRENCE J. GLADORA (hereinafter "Plaintiffs") on behalf of themselves and the Class, and JOHN R. McGinley, JR. as LIQUIDATING RECEIVER of Defendants ST. FRANCIS HEALTH SYSTEM, ST. FRANCIS MEDICAL CENTER, ST. FRANCIS HOSPITAL CRANBERRY, and ST. FRANCIS HEALTH CARE SERVICES, INC. ("St. Francis Entities."), and Defendant RAYMOND J. KHOURY ("Khoury"). The Settlement Agreement is subject to approval of the Court of Common Pleas of Allegheny County (the "Court"). It will not be effective until approved by the Court.

If you are a vested Pension Plan participant, you should have received a more detailed notice in the mail describing the Settlement Agreement. If you believe you are a vested participant but did not receive a mailed notice (for example, because of a change in address), contact the Liquidating Receiver at the address listed below. The complete terms of the Settlement Agreement are on file with the Court, and can be viewed in the Court Clerk's office, at 17th Floor, Frick Bldg., Grant Street & Forbes Ave., Pittsburgh, PA 15219. Also, at the St. Francis website (www.stfrancisorphanscourt.com) and the websites of Specter Specter Evans & Manogue, P.C., (www.ssem.com) and Stember Feinstein Krakoff (www.sfklaw.net), you can view a copy of this Notice, the Settlement Agreement itself, and the Petition for Termination filed in August 2003.

In a Class Action complaint filed September 20, 2002, Plaintiffs allege that they and others similarly situated are participants in the Pension Plan, and that St. Francis Entities and Khoury are obligated to provide all pension benefits promised to them. Plaintiffs further allege that St. Francis Entities and Khoury are failing to live up to this obligation by attempting to limit participants' pensions to the amount the employer and fiduciaries have chosen to deposit into the Pension Plan (which presently consists of approximately $49 million). Finally, Plaintiffs allege that the assets in the Pension Plan are insufficient to provide all of the benefits promised to participants.

SUMMARY OF SETTLEMENT BENEFITS TO BE PROVIDED UNDER THE PROPOSED SETTLEMENT AGREEMENT

The Liquidating Receiver shall, pursuant to the Settlement Agreement, (i) cause $13,000,000 from the Estate's Assets to be contributed to the Pension Plan, (ii) amend and terminate the Pension Plan, and (iii) distribute the assets of the Pension Plan. As represented in the Petition for Termination filed in August 2003, the Pension Plan's assets consisted of $49,275,832. The Settlement Agreement provides that an additional $13,000,000 from the Estate's Assets will be added to the Pension Plan, so that the total of approximately $62,000,000 will be distributed to participants. If there are funds remaining after the wind up of the Estate in accordance with the global settlement reached with representatives of other claimants and Class Counsel, then Class Counsel may petition the Court for a distribution to the Class from any excess monies held by the Estate.

HEARING ON PROPOSED SETTLEMENT AND RIGHT TO OBJECT

A hearing to consider final approval of the Settlement Agreement shall be held by the Court on November 26, 2003 at 10:00 a.m., at Frick Bldg., 17th Floor, Grant Street & Forbes Ave., Pittsburgh, PA 15219.

Attendance at the hearing is not required in order to receive the benefit of the Settlement Agreement. However, class members wishing to have their objections to the Settlement Agreement heard and considered must file written objections by November 21, 2003.

However, no Class Member's objection shall be heard or considered (and no papers or briefs submitted in support of such objection shall be considered) unless, by November 21, 2003, the objection in writing and copies of all supporting papers and briefs are delivered upon counsel at the following addresses:

Class Counsel for vested participants of the Pension Plan
Specter Specter Evans & Manogue, P.C.
The 26th Floor, Koppers Building
Pittsburgh, PA 15219

Counsel for the Liquidating Receiver
Eckert Seamans Cherin & Mellott, LLC
U.S. Steel Tower
600 Grant Street, 44th Floor
Pittsburgh, PA 15219

Counsel for the St. Francis Entities
Kirkpatrick & Lockhart LLP
Henry W. Oliver Bldg
535 Smithfield St.
Pittsburgh, PA 15222

Any Class Member who fails to timely object in the manner described in this paragraph shall be deemed to have waived such objection, shall be forever barred from raising such objection in this action, and shall be bound by the judgment.

Additional Information. Any questions Class Members have about the matters contained in this Notice should NOT be directed to the Court but should be directed in writing to Class Counsel at any of the following addresses:

Joseph N. Kravec, Jr., Esquire
Specter Specter Evans & Manogue, P.C.
The 26th Floor, Koppers Building
Pittsburgh, PA 15219

John Stember, Esquire
Stember Feinstein Krakoff
1705 Allegheny Building
Pittsburgh PA 15219

William T. Payne, Esquire
1007 Mt. Royal Boulevard
Pittsburgh, PA 15223-1027

Edward A. Olds, Esquire
1007 Mt. Royal Boulevard
Pittsburgh PA 15223-1027

Any correction or changes of name or address should NOT be directed to the Court, but should be directed in writing to the Liquidating Receiver at the following address:

Liquidating Receiver
P.O. Box 2606
Pittsburgh, PA 15230-2606

Dated: October 20, 2003

Prothonotary of the Court of Common
Pleas of Allegheny County
City-County Building
Grant Street and Forbes Avenue
Pittsburgh, PA 15219

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