-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U0CVUPUeEtlGuVkrILkdBzRRYV9K04g5YyVN7L3IZIKLcHmKf2DpU9gNqUCbLKwa zaBuTJFZxsjWUg/J1jPBaw== 0001200952-02-000107.txt : 20021230 0001200952-02-000107.hdr.sgml : 20021230 20021230142632 ACCESSION NUMBER: 0001200952-02-000107 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20021230 GROUP MEMBERS: BRUNO TIPHINE GROUP MEMBERS: HAREDALE, LTD. GROUP MEMBERS: JAMES HENRY HILDEBRANDT GROUP MEMBERS: OLIVIER ROUX GROUP MEMBERS: RITA &BRUNO TIPHINE GROUP MEMBERS: THE D3 FAMILY FUND GROUP MEMBERS: THE DAVID &PATRICIA NIERENBERG 1993 IRREVOCABLE TRUST GROUP MEMBERS: TOXFORD CORP FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NIERENBERG DAVID CENTRAL INDEX KEY: 0001040899 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 19605 N E 8TH STREET CITY: CAMAS STATE: WA ZIP: 98607 BUSINESS PHONE: 3606048600 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PEDIATRIC SERVICES OF AMERICA INC CENTRAL INDEX KEY: 0000893430 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 581873345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44129 FILM NUMBER: 02871601 BUSINESS ADDRESS: STREET 1: 31O TECHNOLOGY PKWY CITY: NORCROSS STATE: GA ZIP: 30092-2929 BUSINESS PHONE: 7704411580 MAIL ADDRESS: STREET 1: 310 TECHNOLOGY PKWY CITY: NORCROSS STATE: GA ZIP: 30092-2929 SC 13D/A 1 dn_ps13a11.txt SCHEDULE 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 11 )* ------ Pediatric Services of America, Inc. (PSAI) - -------------------------------------------------------------------------------- (Name of Issuer) COMMON - -------------------------------------------------------------------------------- (Title of Class of Securities) 705323103 ------------------------------ (CUSIP Number) David Nierenberg, The D3 Family Fund, 19605 NE 8th St., Camas, WA 98607 360-604-8600 ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 30, 2002 ------------------------------- (Date of Event which Requires Filing of this Statement) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 of 18 SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 2 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The D3 Family Fund, L.P. (David Nierenberg is President of the General Partner, which is Nierenberg Investment Management Company.) -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Washington -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 905,830 (13.2%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 905,830 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 3 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Haredale, Ltd. -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION The Bahamas -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 20,000 common shares (0.3%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 20,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 4 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The David & Patricia Nierenberg 1993 Irrevocable Trust, Lawrence K. Orr, Trustee. June 11, 1993 -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Washington -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 10,000 common shares (0.1%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 10,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 5 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON James Henry Hildebrandt -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Canadian citizen resident in Hong Kong -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 3,000 common shares (0.0%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 3,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 6 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Toxford Corp. -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Channel Islands, British Isles -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 3,000 common shares (0.0%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 3,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 7 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Olivier Roux -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION French citizen resident in United Kingdom -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 7,500 common shares (0.1%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 7,500 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 8 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Bruno Tiphine -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION France -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 3,000 common shares (0.1%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 3,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------- SCHEDULE 13D/A -------------- CUSIP No. 705323103 Page 9 of 18 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Rita & Bruno Tiphine -------------------------------------------------------------------------- 2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ] (b) [ ] 3) SEC USE ONLY -------------------------------------------------------------------------- 4) SOURCE OF FUNDS WC -------------------------------------------------------------------------- 5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] -------------------------------------------------------------------------- 6) CITIZENSHIP OR PLACE OF ORGANIZATION Italy and France -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 4,500 common shares (0.1%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 4,500 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 956,830 shares (14.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------- Page 10 of 18 Item 1. Security and Issuer Common stock of Pediatric Services of America, Inc. (PSAI) 310 Technology Parkway, Norcross GA 30092-2929. Item 2. Identity and Background The D3 Family Fund, L.P., a Washington State partnership, whose principal business is investing in the equities of public micro-cap issuers. Located at 19605 N.E. 8th St., Camas, Washington 98607. No convictions or administrative proceedings. Item 3. Source and Amount of Funds or Other Consideration Source of funds is money invested in the partnership by its partners. Item 4. Purpose of Transaction Our ability to make things happen at PSAI is no longer constrained by the standstill agreement we made with the company two years ago. That agreement permitted us to buy over 15% of PSAI, but did so at the cost of our passivity. It has expired. While we are genuinely pleased with the company's recently announced changes in corporate governance (both of which we had advocated) and with the company's reiteration of earnings guidance for fiscal 2003, we remain extremely unhappy with how the company's Board of Directors has overcompensated the CEO. We expressed this concern directly to the Board, in writing, three times, from August through October. Since the Board resolved the compensation issues very differently than we recommended, we feel compelled to bring our objections public: now the outside shareholders, who own 95% of this company, will have the opportunity to hold this Board accountable for rewarding a CEO who failed to meet his publicly stated profit recovery goal. We view the Board's recent decisions to give the CEO a $200,000 cash bonus and to further enrich the terms of an already excessive golden parachute as provocative anti-shareholder actions. We therefore announce today our intent to vote all of our shares against the CEO's re-election to the Board unless his excessive compensation is immediately eliminated. We also insist that the Board commits to change materially the leadership and composition of the Board's Compensation Committee so that henceforth it will act as a forceful advocate of shareholder interests, rather than as a benefactor of the CEO. (See our letter to the Chairman of the Board, attached as Exhibit A.) Moreover, if PSA's Board does not take these actions, we will convene a special shareholders' meeting at which we will seek election to the Board of a new independent slate of directors which would wrest control of the Board away from the current directors to new ones who would serve as advocates for all shareholders. Item 5. Interest in Securities of the Issuer (a, b) D3 owns, and has sole voting and dispositive power over, 905,830 common shares of PSAI (13.2%). (c) Transactions in the last 60 days Date # Shares Price Paid -------- -------- ---------- 12/20/02 29,600 $6.06 (d) N/A (e) N/A Page 11 of 18 Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer N/A Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg President Nierenberg Investment Management Company, Inc., the General Partner Of The D3 Family Fund, L.P. Page 12 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) Haredale Ltd., a Bahamian corporation. (b) P.O. Box N-4465, Nassau, New Providence, The Bahamas. (c) Haredale is in the investment business at the address above. (d) None (e) None (f) The Bahamas. Item 3. Source and Amount of Funds or Other Consideration Haredale owns, and Mr. Nierenberg has sole voting and dispositive power over, its 20,000 shares. Source of funds is money invested in Haredale. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Haredale owns, and Mr. Nierenberg has sole voting and dispositive power over, its 20,000 shares. (c) Transactions in last 60 days: N/A (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Haredale pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for Haredale, Ltd. Page 13 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) The David & Patricia Nierenberg 1993 Irrevocable Trust, Lawrence K. Orr, Trustee, June 11, 1993 (b) Lawrence K. Orr, Trinity Ventures, 3000 Sand Hill Road, Bldg. 4, Suite 160, Menlo Park, CA 94025 (c) This is an irrevocable trust for the benefit of the Nierenberg children. (d) None (e) None (f) A California trust. Item 3. Source and Amount of Funds or Other Consideration Mr. Orr has sole voting and dispositive power over the trust's 10,000 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Mr. Orr has sole voting and dispositive power over the trust's 10,000 shares. (c) Transactions in last 60 days: N/A (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer The Trust pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for The Nierenberg Family 1993 Trust Page 14 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) James Henry Hildebrandt, a Canadian citizen resident in Hong Kong (b) c/o Bain & Co., Tenth Floor, One Pacific Place 88 Queensway, Hong Kong (c) Mr. Hildebrandt is a management consultant. (d) None (e) None (f) A Canadian resident in Hong Kong Item 3. Source and Amount of Funds or Other Consideration Mr. Hildebrandt owns, and Mr. Nierenberg has sole voting and dispositive power over, his 3,000 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Mr. Hildebrandt owns, and Mr. Nierenberg has sole voting and dispositive power over, his 3,000 shares. (c) Transactions in last 60 days: N/A (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Mr. Hildebrandt pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for James Henry Hildebrandt Page 15 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) Toxford Corp., a Channel Islands corporation (b) P.O. Box 3048, St. Andrew's House, Le Borlage, St. Peter Port, Guernsey, Channel Islands, British Isles (c) Toxford Corp. is in the investment business at the address above. (d) None (e) None (f) Channel Islands, British Isles Item 3. Source and Amount of Funds or Other Consideration Toxford Corp. owns, and Mr. Nierenberg has sole voting and dispositive power over, its 3,000 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Toxford Corp. owns, and Mr. Nierenberg has sole voting and dispositive power over, its 3,000 shares. (c) Transactions in last 60 days: N/A (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Toxford Corp. pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for Toxford Corp. Page 16 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) Olivier Roux, a French citizen resident in the U.K. (b) Talisman Management, Ltd., 37 Ixworth Place, London SW3, England (c) Mr. Roux is a management consultant (d) None (e) None (f) A french citizen resident in the United Kingdom Item 3. Source and Amount of Funds or Other Consideration Mr. Roux owns, and Mr. Nierenberg has sole voting and dispositive power over, his 7,500 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Mr. Roux owns, and Mr. Nierenberg has sole voting and dispositive power over, his 7,500 shares. (c) Transactions in last 60 days: N/A (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Mr. Roux pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of Mr. Roux's account. Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for Olivier R. Roux Page 17 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) Bruno Tiphine, a French citizen resident in the U.K. (b) 92 Fellows Road, London NW3 3JG, England (c) Mr. Tiphine is a management consultant (d) None (e) None (f) A French citizen resident in the United Kingdom Item 3. Source and Amount of Funds or Other Consideration Mr. Tiphine owns, and Mr. Nierenberg has sole voting and dispositive power over, his 3,000 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Mr. Tiphine owns, and Mr. Nierenberg has sole voting and dispositive power over, his 3,000 shares. (c) Transactions in last 60 days: Date # Shares Price Paid -------- -------- ---------- 11/14/02 3,000 $5.61 (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Mr. Tiphine pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of Mr. Tiphine's account Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for Haredale, Ltd. Page 18 of 18 Item 1. Security and Issuer Same as Item 1 on Page 4. Item 2. Identity and Background (a) Rita & Bruno Tiphine, Italian & French citizens resident in the United Kingdom (b) 92 Fellows Road, London NW3 3JG, England (c) Mrs. Tiphine is a homemaker & Mr. Tiphine is a management consultant (d) None (e) None (f) Italian & French citizens resident in the United Kingdom Item 3. Source and Amount of Funds or Other Consideration Mr. & Mrs. Tiphine own, and Mr. Nierenberg has sole voting and dispositive power over, their 4,500 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 4. Item 5. Interest in Securities of the Issuer (a, b) Mr. & Mrs. Tiphine own, and Mr. Nierenberg has sole voting and dispositive power over, their 4,500 shares. (c) Transactions in last 60 days: Date # Shares Price Paid -------- -------- ---------- 11/14/02 2,000 $5.61 11/15/02 2,500 5.63 (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Mr. & Mrs. Tiphine pay Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of their account. Item 7. Material to be Filed as Exhibits EXHIBIT 99.1 Letter dated December 29, 2002 to Edward K. Wissing, Chairman of the Board of Directors, Pediatric Services of America, Inc. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 30, 2002 /s/DAVID NIERENBERG - ------------------- ------------------------------------ Date David Nierenberg Authorized to trade for Rita & Bruno Tiphine EX-99.1 2 dn_ps13a11x99.txt LETTER TO MR. WISSING [The D3 Family Fund Logo] December 29, 2002 Mr. Edward K. Wissing Chairman of the Board of Directors Pediatric Services of America, Inc. 310 Technology Parkway Norcross, GA 30092 Dear Ed: While we are genuinely pleased with PSA's recent changes in corporate governance and the company's reiteration of earnings guidance for fiscal 2003, we remain extremely unhappy about the overcompensation of the company's CEO. As you know, on three separate occasions in the last several months we communicated in writing our concerns about his compensation to the board. The large bonus the board has just awarded him for 2002, plus the constructive termination protection just added to his severance package, show that the board's view and ours of what constitutes appropriate CEO compensation remain widely divergent. Therefore from now on we believe that we must communicate with the board and the public simultaneously. In that manner your outside shareholders, who own 95% of the company, will be in a better position to hold the board of directors accountable for its actions. We believe strongly, as a matter of first principle, that CEO compensation must be driven only by corporate performance and by the creation of shareholder value. CEO compensation is not an entitlement. PSA management forecast on two quarterly earnings calls that the company would exit fiscal 2002 at an EBITDA margin of 9%. On numerous other occasions over the past three years management stated that their goal was to restore profitability to this level by about this time. Management and the Street were right to focus on the EBITDA margin as the paramount goal. It is the most crucial indicator of the financial and operational health of this company. EBITDA restoration also shows the company's recovery from the brink of disaster several years ago. But instead of exiting the fourth fiscal quarter of 2002 at 9%, the company delivered only 6%. After he missed this crucial metric by one-third, a miss which earlier in the year caused the share price to tumble from 12 to 5, the board then "rewarded" the CEO with a $200,000 cash bonus for fiscal 2002, fully 55.5% of his base, gave him a 5% raise, and gilded the lily of an already excessive severance package. The board provided no detailed justification for these astonishing decisions in the draft proxy statement the company filed with the SEC on December 17, leaving shareholders' imaginations free to fill the resulting informational vacuum. We believe that a CEO who misses such a key goal by such a wide margin deserves no bonus at all. Such a CEO should be grateful that he still has a job. We believe that the board's decisions cannot stand. We ask that PSA not mail the draft proxy to the shareholders. We ask, instead, that you delay the annual meeting long enough so that you will have adequate time to bring the CEO's compensation down to earth and that you publish his revised contract and bonus in an amended proxy when rescheduling the meeting. We believe that the following five changes should be made in his compensation package: 1. The $200,000 bonus for 2002 should be reduced to zero. If already paid, the funds should be returned to the company. (We have no problem with the CFO's bonus. We believe that the improvements in the company's DSO's, in receivables quality, in the company's net debt level, and the management of insurance costs show that the CFO earned his bonus.) 2. The change in the CEO's severance package, enabling him to yank his golden parachute if a majority of directors, not previously approved by the board, are elected to the board, should be eliminated completely. This new provision is outrageous and indefensible; it rewards a CEO for misfeasance which causes him to lose control of the board. If the CEO is so anxious that he will not continue to serve without this new model parachute, perhaps the board should let him jump without it. In the real world accountability exists. Why should he be cocooned? 3. The economics of the severance package are also excessive, providing the CEO with up to 42 months of salary plus 150% of his prior year bonus plus full vesting plus full funding of deferred compensation. The immediate cash components alone could aggregate to as much as 38% of PSA's fully taxed operating profit for fiscal 2002! We believe that a founder/CEO certainly is entitled to severance protection, but we believe that a simple month of severance for each year of service to the company ought to be adequate for the CEO. Anything beyond that rewards incompetence and should be relinquished. 4. No public company CEO needs an $80,000 luxury automobile at company expense. A $20,000 vehicle should be perfectly adequate and that is what we recommend. If, for some reason, this CEO requires more, his salary is large enough for him to pay for it himself. 5. The CEO should have no more raises in his salary until the company returns to the 9% EBITDA margin. We are not opposed to raises for other executives or for the rank and file. We all live in a world where costs inflate. But this CEO nearly presided over the ruin of this company several years ago. Until he fully restores the company's profitability he should not receive further raises. It should be enough for him that he still has his job. The board Compensation Committee needs to be changed to bring its composition and its views into proper alignment with the economic realities of the Sarbanes-Oxley world of improved corporate governance. We do not expect these committee changes to occur before the upcoming annual meeting, but we would like to see them made by the middle of the new calendar year. Two changes are needed: first, PSAI needs to have a new Compensation Committee chair, one who is more independent of the CEO, one who has not served on the board of this company since its founding in 1989. Second, the majority of the members of the committee also need to be relatively new and fully independent so that they will serve as shareholder advocates, not as benefactors of the CEO. Unless all five of our CEO compensation suggestions are accepted by the board and implemented by the company before the annual meeting, we will vote all of our shares against the re-election of the CEO to the board and we will urge all other shareholders to do the same. In addition, unless all five CEO compensation changes are made and the Compensation Committee changes accepted for subsequent implementation, we will convene a special shareholder meeting, separate from the annual meeting, at which we will seek to elect a new independent slate of outside directors to take the majority of seats on the board. We would develop this slate in active consultation with the other outside shareholders of the company. Nominees would conceive of themselves as advocates for the best interests of all shareholders, rather than as benefactors or cronies of the CEO. The recent enactment of the Sarbanes-Oxley legislation signifies that the Congress, the SEC, and the White House see themselves as shareholder advocates. The nation is disgusted with corporate cronyism, angered by excessive executive compensation, and committed to seeing CEO compensation tightly and directly linked to performance which builds real long term shareholder value. This CEO and this board now must demonstrate persuasively that they embrace this new reality. Sincerely yours, /s/DAVID NIERENBERG David Nierenberg -----END PRIVACY-ENHANCED MESSAGE-----