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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): December 6, 2006
PEDIATRIX MEDICAL GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Florida 001-12111 65-0271219
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
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1301 Concord Terrace
Sunrise, Florida 33323
(Address of principal executive office)
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Registrant's telephone number, including area code (954) 384-0175
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Effective December 6, 2006, Mr. Lawrence M. Mullen resigned as a
member of the Board of Directors of Pediatrix Medical Group, Inc. (the
"Company") and a member of the Company's Audit Committee. To fill the vacancy on
the Audit Committee created by Mr. Mullen's resignation, the Board of Directors
has appointed Waldemar A. Carlo, M.D., a director of the Company since June
1999, to the Committee.
Item 8.01. Other Events.
On December 6, 2006, the Company issued a press release (the "Press
Release") announcing an update with respect to its previously disclosed internal
voluntary review of its historical stock option practices and the closing by the
Federal Trade Commission of its investigation of the Company's 2001 acquisition
of Magella Healthcare Corporation. A copy of the Press Release is attached as
Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by
reference in its entirety.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 -- Press Release dated December 6, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PEDIATRIX MEDICAL GROUP, INC.
Date: December 6, 2006 By: /s/ Karl B. Wagner
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Name: Karl B. Wagner
Title: Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated December 6, 2006.
Exhibit 99.1
Pediatrix Provides Update on Stock Option Review
Announces Closing of FTC Investigation, With No Action Taken On
Pediatrix's 2001 Magella Acquisition
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Dec. 6, 2006--Pediatrix
Medical Group, Inc. (NYSE:PDX) today announced an update with respect
to its previously disclosed internal voluntary review of its
historical stock option practices and the closing by the Federal Trade
Commission of its investigation of the Company's 2001 acquisition of
Magella Healthcare Corporation.
Stock Option Review
The Company's review of its historical stock option practices is
being conducted by Pediatrix's Audit Committee with the assistance of
independent outside legal counsel and forensic accountants and with
the full cooperation of the Company's management. The review covers
all stock options granted from the date of the Company's initial
public offering in 1995 through the year to date in 2006. Although the
Committee has not completed its work or reached final conclusions, on
December 5, 2006, the Company's Board of Directors received a
preliminary oral status report from the Committee regarding its
activities to date. Among other things, this report noted that, based
on evidence reviewed to date, the Committee expects to conclude that
there were deficiencies in the process by which options were granted
at the Company, including instances of backdating of option grants as
well as inadequate procedures which resulted in or permitted the
misdating of option grants.
The Audit Committee also reported that it has not yet completed
its analysis of the financial impact of the improper dating of the
Company's stock options, including possible equity compensation
charges to the Company's income statements and related tax effects.
The Committee told the Board, however, that its tentative calculations
indicate that the Company may have to recognize additional
compensation expense of approximately $28 million, in the aggregate,
on a pre-tax basis for the 1995 through 2006 period. The Audit
Committee emphasized, however, that this amount reflects preliminary
consideration of appropriate financial reporting measurement dates for
improperly dated stock options and, accordingly, these amounts are
subject to further review and could change significantly. Moreover,
this estimate and the underlying analysis of the stock option grants
have not yet been reviewed by the Company's independent public
accountants or the Company's management. The Company has also not yet
determined whether any restatement of the Company's historical
financial statements will be required.
The Company also announced that Lawrence M. Mullen has resigned
from Pediatrix's Board of Directors following the Audit Committee's
preliminary report. Mr. Mullen, a member of the Audit Committee,
recused himself from its independent stock option review. During his
tenure as Chief Financial Officer of the Company from 1995 to 1998,
Chief Operating Officer from August, 1998 to May, 2000 and thereafter
as a Vice President in charge of special projects until his retirement
in April, 2001, Mr. Mullen had a significant role in the
administration of the Company's stock option program and practices. To
fill the vacancy on the Audit Committee created by Mr. Mullen's
resignation, the Board of Directors has appointed Waldemar A.
Carlo, M.D., a Director of the Company since June 1999.
The Company voluntarily contacted the staff of the Securities and
Exchange Commission regarding the Committee review and is cooperating
with an informal investigation by the staff regarding this matter. The
Committee is working to complete its review and to take or recommend
appropriate remedial measures, including enhanced stock option
granting procedures, as soon as possible.
FTC Investigation Completed
Pediatrix also announced that it has been notified that the
Federal Trade Commission has closed its investigation of Pediatrix's
2001 acquisition of Magella Healthcare Corporation with a finding that
no further action is warranted by the Commission. The FTC had
initiated a retrospective review of the Magella acquisition in June
2002.
About Pediatrix
Pediatrix Medical Group, Inc. is the nation's leading provider of
newborn, maternal-fetal and pediatric physician subspecialty services.
Pediatrix physicians and advanced nurse practitioners are reshaping
the delivery of maternal-fetal and newborn care by identifying best
demonstrated processes and participating in clinical research to
enhance patient outcomes and provide high-quality, cost-effective
care. Founded in 1979, its neonatal physicians provide services at
more than 240 NICUs, and through Obstetrix, its perinatal physicians
provide services in many markets where Pediatrix's neonatal physicians
practice. Combined, Pediatrix and its affiliated professional
corporations employ more than 890 physicians in 32 states and Puerto
Rico. Pediatrix is also the nation's largest provider of newborn
hearing screens and newborn metabolic screening. Additional
information is available at www.pediatrix.com.
Certain statements and information in this press release may be
deemed to be "forward-looking statements" within the meaning of the
Federal Private Securities Litigation Reform Act of 1995.
Forward-looking statements may include, but are not limited to,
statements relating to our objectives, plans and strategies, and all
statements (other than statements of historical facts) that address
activities, events or developments that we intend, expect, project,
believe or anticipate will or may occur in the future are
forward-looking statements. These statements are often characterized
by terminology such as "believe", "hope", "may", "anticipate",
"should", "intend", "plan", "will", "expect", "estimate", "project",
"positioned", "strategy" and similar expressions, and are based on
assumptions and assessments made by Pediatrix's management in light of
their experience and their perception of historical trends, current
conditions, expected future developments and other factors they
believe to be appropriate. Any forward-looking statements in this
press release are made as of the date hereof, and Pediatrix undertakes
no duty to update or revise any such statements, whether as a result
of new information, future events or otherwise. Forward-looking
statements are not guarantees of future performance and are subject to
risks and uncertainties. Important factors that could cause actual
results, developments, and business decisions to differ materially
from forward-looking statements are described in Pediatrix's most
recent Annual Report on Form 10-K, including the section entitled
"Risk Factors". Additional factors include, but are not limited to,
uncertainties related to: the time needed to complete the Audit
Committee's inquiry into historic stock option grant practices;
whether or not the Audit Committee's inquiry will require the
restatement of Pediatrix financial statements; the financial reporting
impact of improperly dated stock options; the tax effects of
improperly dated stock options; the potential discovery of accounting
errors or other adverse facts and possible regulatory action or
litigation.
CONTACT: Pediatrix Medical Group, Inc., Fort Lauderdale
Bob Kneeley, Director, Investor Relations
954-384-0175, x-5300
bob_kneeley@pediatrix.com