##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
   Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to    Commission File Number:
    000-32057
  American Physicians Capital,
    Inc.
 (Exact name of registrant as
    specified in its charter)
   Michigan

38-3543910State or other jurisdiction
    of
    incorporation or organization)

(IRS employer
    identification number)    1301
    North Hagadorn Road, East Lansing, Michigan 48823 (Address
    of principal executive offices, including zip
    code)
   Registrants telephone number, including area code:
 (517) 351-1150
  þ o
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ




---



##### 



TABLE OF
    CONTENTS
  PART
    I.  FINANCIAL INFORMATIONItem 1
.

Financial
    Statements


3Condensed
    Consolidated Balance Sheets


3Condensed
    Consolidated Statements of Income


4Condensed
    Consolidated Statements of Shareholders Equity


5Condensed
    Consolidated Statements of Comprehensive Income


6Condensed
    Consolidated Statements of Cash Flows


7Notes to Condensed
    Consolidated Financial Statements


8Item 2
.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


11Item 3
.

Quantitative and
    Qualitative Disclosures About Market Risk


22Item 4
.

Controls and
    Procedures


24PART
    II.  OTHER INFORMATIONItem 2
.

Unregistered Sales
    of Equity Securities and Use of Proceeds


25Item 4
.

Submission of
    Matters to a Vote of Security Holders


26Item 6
.

Exhibits


26Signatures


27Exhibit
    Index


28Section 302 Certification of Chief Executive OfficerSection 302 Certification of Chief Financial OfficerSection 906 Certification of Chief Executive Officer and Chief Financial Officer   2




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##### Table of Contents



PART I.  FINANCIAL
    INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Balance Sheets
  June 30,


December 31,2007


2006(Unaudited)(In thousands, exceptshare data)ASSETSInvestments:Fixed-income securitiesAvailable-for-sale, at fair value

$
287,819


$
255,001Held-to-maturity, at amortized cost


502,125



505,572Other investments


9,631



6,476Total investments


799,575



767,049Cash and cash equivalents


78,275



108,227Premiums receivable


34,882



43,068Reinsurance recoverable


109,885



109,013Deferred federal income taxes


28,227



32,795Property and equipment, net of
    accumulated depreciation


11,298



9,775Other assets


23,307



25,888Total assets

$
1,085,449


$
1,095,815LIABILITIESUnpaid losses and loss adjustment
    expenses

$
680,124


$
688,031Unearned premiums


60,673



70,744Long-term debt


30,928



30,928Federal income taxes payable


1,903



189Other liabilities


36,181



37,113Total liabilities


809,809



827,005Commitments &
    ContingenciesShareholders
    EquityCommon stock, no par value,
    50,000,000 shares authorized: 11,082,199 and
    11,556,575 shares outstanding at June 30, 2007 and
    December 31, 2006, respectively






Additional
    paid-in-capital


23,113



41,106Retained earnings


249,773



222,935Accumulated other comprehensive
    income:Net unrealized appreciation on
    investments, net of deferred federal income taxes


2,754



4,769Total shareholders equity


275,640



268,810Total liabilities and
    shareholders equity

$
1,085,449


$
1,095,815    3




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Statements of Income
  Three Months Ended


Six Months EndedJune 30,


June 302007


2006


2007


2006(Unaudited)(In thousands, except per share data)Net premiums written

$
26,967


$
30,082


$
61,861


$
69,047Change in net unearned premiums


7,929



7,338



8,067



5,816Net premiums earned


34,896



37,420



69,928



74,863Investment income


11,152



11,569



22,329



22,672Net realized (losses) gains


(64
)


1,336



(66
)


1,348Other income


175



150



388



627Total revenues and other income


46,159



50,475



92,579



99,510Losses and loss adjustment expenses


12,916



25,796



35,278



52,673Underwriting expenses


7,566



7,734



14,927



15,411Investment expenses


230



228



417



397Interest expense


782



756



1,555



1,472General and administrative expenses


363



323



695



686Other expenses


(1
)


21



2



82Total expenses


21,856



34,858



52,874



70,721Income before federal income taxes


24,303



15,617



39,705



28,789Federal income tax expense


7,970



4,905



12,867



9,214Net income

$
16,333


$
10,712


$
26,838


$
19,575Net income  per common
    share 
    Basic

$
1.47


$
0.88


$
2.38


$
1.59Diluted

$
1.44


$
0.86


$
2.33


$
1.56    4




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Statements of Shareholders
    Equity
  AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding


Capital


Earnings


Income


Total(Unaudited)(In thousands, except share data)Balance, December 31, 2006


11,556,575


$
41,106


$
222,935


$
4,769


$
268,810Comprehensive incomeNet income










26,838







26,838Other comprehensive loss














(2,015
)


(2,015
)Total comprehensive income, net of
    taxes


















24,823Options exercised


18,025



215











215Shares tendered/netted in
    connection with option exercise


(3,201
)


(122
)










(122
)Excess tax benefits from
    share-based awards






315











315Fair value compensation of
    share-based awards






113











113Purchase and retirement of common
    stock


(489,200
)


(18,514
)










(18,514
)Balance, June 30, 2007


11,082,199


$
23,113


$
249,773


$
2,754


$
275,640   AccumulatedAdditional





OtherShares


Paid-in


Retained


ComprehensiveOutstanding(1)


Capital


Earnings


Income


Total(Unaudited)(In thousands, except share data)Balance, December 31, 2005


12,500,126


$
74,360


$
179,748


$
7,104


$
261,212Comprehensive incomeNet income










19,575







19,575Other comprehensive loss














(3,542
)


(3,542
)Total comprehensive income, net of
    taxes


















16,033Options exercised


75,600



723











723Shares tendered/netted in
    connection with option exercise


(8,289
)


(270
)










(270
)Excess tax benefits from
    share-based awards






679











679SFAS No. 123R adoption






(46
)










(46
)Fair value compensation of
    share-based awards






337











337Purchase and retirement of common
    stock


(630,900
)


(19,620
)










(19,620
)Forfeiture of restricted stock


(764
)














Balance, June 30, 2006


11,935,773


$
56,163


$
199,323


$
3,562


$
259,048     (1)
    
    Share amounts have been retroactively adjusted to reflect a
    three-for-two stock split effective November 1, 2006. See
    Note 2.   5




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Statements of Comprehensive
    Income
  Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(Unaudited)(In thousands)Net income

$
16,333


$
10,712


$
26,838


$
19,575Other comprehensive loss:Unrealized depreciation on
    available-for-sale investment securities arising during the
    period


(2,859
)


(2,158
)


(2,559
)


(4,744
)Amortization of net unrealized
    appreciation on held-to-maturity investment securities since the
    date of transfer from the available-for-sale category


(240
)


(272
)


(482
)


(557
)Adjustment for realized losses on
    investment securities included in net income


(60
)


(148
)


(60
)


(148
)Other comprehensive loss before tax


(3,159
)


(2,578
)


(3,101
)


(5,449
)Deferred federal income tax benefit


(1,106
)


(902
)


(1,086
)


(1,907
)Other comprehensive loss


(2,053
)


(1,676
)


(2,015
)


(3,542
)Comprehensive income

$
14,280


$
9,036


$
24,823


$
16,033    6




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Condensed Consolidated Statements of Cash Flows
  Six Months EndedJune 30,2007


2006(Unaudited)(In thousands)Cash flows from (for) operating
    activitiesNet income

$
26,838


$
19,575Adjustments to reconcile net
    income to net cash from operating activities:Depreciation and amortization


1,415



1,451Net realized losses (gains)


66



(1,348
)Deferred federal income taxes


5,654



7,793Excess tax benefits from
    share-based awards


(315
)


(679
)Share-based compensation


113



337Income on equity method investees


(96
)


(706
)Changes in:Unpaid loss and loss adjustment
    expenses


(7,907
)


5,962Unearned premiums


(10,071
)


(8,885
)Other assets and liabilities


11,276



4,135Net cash from operating
    activities


26,973



27,635Cash flows from (for) investing
    activitiesPurchasesAvailable-for-sale 
    fixed income


(56,234
)


(71,850
)Held-to-maturity  fixed
    income


(5,312
)


(188,188
)Other investments


(2,924
)


(262
)Property and equipment


(2,075
)


(175
)Proceeds from sales and maturitiesAvailable-for-sale 
    fixed income


19,984



50,015Held-to-maturity  fixed
    income


7,755



16,365Other investments


250



2,123Property and equipment


20



6Deconsolidation of PIC-Florida






(2,941
)Pending securities transactions






(53
)Net cash for investing
    activities


(38,536
)


(194,960
)Cash flows from (for) financing
    activitiesCommon stock repurchased


(18,514
)


(19,620
)Federal income tax effect of share
    based awards


315



679Change in payable for shares
    repurchased


(283
)


338Proceeds from stock options
    exercised


93



453Net cash for financing
    activities


(18,389
)


(18,150
)Net decrease in cash and cash
    equivalents


(29,952
)


(185,475
)Cash and cash equivalents,
    beginning of period


108,227



272,988Cash and cash equivalents, end
    of period

$
78,275


$
87,513    7




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial
    Statements  (Unaudited)
  1.
    Significant
    Accounting Policies  Basis
    of Consolidation and Reporting
    Form 10-Q Rule 10-01 Regulation S-X Form 10-Q
  Form 10-K
  Use of
    Estimates
      Software
    for Internal Use
  No. 98-1 (SOP 98-1), Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use. SOP 98-1,
 8




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial
    Statements  (Continued)
  Nature
    of Business
    Reclassification
    2.
    Stock
    Split    3.
    Effects
    of New Accounting Pronouncements       9




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##### Table of Contents



AMERICAN
    PHYSICIANS CAPITAL, INC. AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial
    Statements  (Continued)
  4.
    Income
    Per Share    Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In thousands, except per share data)Numerator for basic and diluted
    income per common share:Net income

$
16,333


$
10,712


$
26,838


$
19,575Denominator:Denominator for basic income per
    common share  weighted average shares outstanding


11,135



12,180



11,285



12,288Effect of dilutive stock options
    and awards


218



258



216



270Denominator for diluted income per
    common share  adjusted weighted average shares
    outstanding


11,353



12,438



11,501



12,558Net income 
    basic

$
1.47


$
0.88


$
2.38


$
1.59Net income 
    diluted

$
1.44


$
0.86


$
2.33


$
1.56    10




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
    Form 10-K
  
    Increased competition could adversely affect our ability to sell
    our products at premium rates we deem adequate, which may result
    in a decrease in premium volume.
    Our reserves for unpaid losses and loss adjustment expenses are
    based on estimates that may prove to be inadequate to cover our
    losses.
    An interruption or change in current marketing and agency
    relationships could reduce the amount of premium we are able to
    write.
    If we are unable to obtain or collect on ceded reinsurance, our
    results of operations and financial condition may be adversely
    affected.
    Our geographic concentration in certain Midwestern states and
    New Mexico ties our performance to the business, economic,
    regulatory and legislative conditions in those states.
    A downgrade in the A.M. Best Company rating of our primary
    insurance subsidiaries could reduce the amount of business we
    are able to write.
    Changes in interest rates could adversely impact our results of
    operation, cash flows and financial condition.
    The unpredictability of court decisions could have a material
    impact on our operations.
    Our business could be adversely affected by the loss of one or
    more key employees.
    The insurance industry is subject to regulatory oversight that
    may impact the manner in which we operate our business, our
    ability to obtain future premium rate increases, the type and
    amount of our investments, the levels of capital and surplus
    deemed adequate to protect policyholder interests, or the
    ability of our insurance subsidiaries to pay dividends to the
    holding company.
    Our status as an insurance holding company with no direct
    operations could adversely affect our ability to meet our debt
    obligations and fund future share repurchases.
    Legislative or judicial changes in the tort system may have
    adverse or unintended consequences that could materially and
    adversely affect our results of operations and financial
    condition.
    Our exit from various markets and lines of business may prove
    more costly than originally anticipated. 11




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##### Table of Contents




    Applicable law and various provisions in our articles and bylaws
    may prevent and discourage unsolicited attempts to acquire
    APCapital that you may believe are in your best interests or
    that might result in a substantial profit to you.    Overview
    of the Companys Operations
        Critical
    Accounting Policies
    Form 10-K
  Software
    for Internal Use
  No. 98-1 (SOP 98-1), Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use. SOP 98-1,
   12




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##### Table of Contents



Description
    of Ratios Analyzed
    GAAP Ratios
    and Other GAAP Financial Measures
    Accident
    Year Loss Ratio
   13




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##### Table of Contents



Results
    of Operations  Three and Six Months Ended
    June 30, 2007 Compared to Three and Six Months Ended
    June 30, 2006
      For the Three Months Ended June 30,Change2007


2006


Dollar


Percentage(Dollars in thousands)Direct premiums written

$
27,847


$
32,402


$
(4,555
)


(14.1
)%Net premiums written

$
26,967


$
30,082


$
(3,115
)


(10.4
)%Net premiums earned

$
34,896


$
37,420


$
(2,524
)


(6.7
)%Losses and loss adjustment expensesCurrent year losses


25,814



28,674



(2,860
)


(10.0
)%Prior year losses


(12,898
)


(2,878
)


(10,020
)


348.2
%Total


12,916



25,796



(12,880
)


(49.9
)%Underwriting expenses


7,566



7,734



(168
)


(2.2
)%Total underwriting gain


14,414



3,890



10,524



270.5
%Other revenue (expense) itemsInvestment income


11,152



11,569



(417
)


(3.6
)%Net realized (losses) gains


(64
)


1,336



(1,400
)


(104.8
)%Other income


175



150



25



16.7
%Other expenses(1)


(1,374
)


(1,328
)


(46
)


3.5
%Total other revenue and expense
    items


9,889



11,727



(1,838
)


(15.7
)%Income before federal income taxes


24,303



15,617



8,686



55.6
%Federal income tax expense


7,970



4,905



3,065



62.5
%Net income

$
16,333


$
10,712


$
5,621



52.5
%Loss Ratio:Accident year


74.0
%


76.6
%






(2.6
)%Prior years


(37.0
)%


(7.7
)%






(29.3
)%Calendar year


37.0
%


68.9
%






(31.9
)%Underwriting expense ratio


21.7
%


20.7
%






1.0
%Combined ratio


58.7
%


89.6
%






(30.9
)%     (1)
    
    Other expenses includes investment expenses, interest expense,
    general and administrative expenses and other expenses as
    reported in the unaudited Condensed Consolidated Statements of
    Income included elsewhere in this report.  14




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##### Table of Contents



For the Six Months Ended June 30,Change2007


2006


Dollar


Percentage(Dollars in thousands)Direct premiums written

$
64,149


$
73,923


$
(9,774
)


(13.2
)%Net premiums written

$
61,861


$
69,047


$
(7,186
)


(10.4
)%Net premiums earned

$
69,928


$
74,863


$
(4,935
)


(6.6
)%Losses and loss adjustment expensesCurrent year losses


52,441



57,659



(5,218
)


(9.0
)%Prior year losses


(17,163
)


(4,986
)


(12,177
)


(244.2
)%Total


35,278



52,673



(17,395
)


(33.0
)%Underwriting expenses


14,927



15,411



(484
)


(3.1
)%Total underwriting gain


19,723



6,779



12,944



190.9
%Other revenue (expense) itemsInvestment income


22,329



22,672



(343
)


(1.5
)%Net realized (losses) gains


(66
)


1,348



(1,414
)


(104.9
)%Other income


388



627



(239
)


(38.1
)%Other expenses(1)


(2,669
)


(2,637
)


(32
)


1.2
%Total other revenue and expense
    items


19,982



22,010



(2,028
)


(9.2
)%Income before federal income taxes


39,705



28,789



10,916



37.9
%Federal income tax expense


12,867



9,214



3,653



39.6
%Net income

$
26,838


$
19,575


$
7,263



37.1
%Loss Ratio:Accident year


75.0
%


77.0
%






(2.0
)%Prior years


(24.5
)%


(6.6
)%






(17.9
)%Calendar year


50.5
%


70.4
%






(19.9
)%Underwriting expense ratio


21.3
%


20.6
%






0.7
%Combined ratio


71.8
%


91.0
%






(19.2
)%     (1)
    
    Other expenses includes investment expenses, interest expense,
    general and administrative expenses and other expenses as
    reported in the unaudited Condensed Consolidated Statements of
    Income included elsewhere in this report.   15




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##### Table of Contents



Premiums
    Written and Earned
    For the Three Months Ended June 30,


For the Six Months Ended June 30,Change








Change2007


2006


Dollar


Percentage


2007


2006


Dollar


Percentage(Dollars in thousands)


(Dollars in thousands)Direct premiums writtenMichigan

$
10,151


$
10,938


$
(787
)


(7.2
)%

$
19,414


$
19,328


$
86



0.4
%Illinois


7,497



9,751



(2,254
)


(23.1
)%


17,337



24,811



(7,474
)


(30.1
)%Ohio


5,686



6,085



(399
)


(6.6
)%


14,051



15,078



(1,027
)


(6.8
)%New Mexico


3,498



4,475



(977
)


(21.8
)%


8,952



9,779



(827
)


(8.5
)%Kentucky


623



777



(154
)


(19.8
)%


3,356



3,785



(429
)


(11.3
)%Other


392



381



11



2.9
%


1,039



1,156



(117
)


(10.1
)%Subtotal


27,847



32,407



(4,560
)


(14.1
)%


64,149



73,937



(9,788
)


(13.2
)%Exited lines of business






(5
)


5



(100.0
)%






(14
)


14



(100.0
)%Total

$
27,847


$
32,402


$
(4,555
)


(14.1
)%

$
64,149


$
73,923


$
(9,774
)


(13.2
)%          16




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##### Table of Contents



Loss
    and Loss Adjustment Expenses
        Underwriting
    Expenses
    Investment
    Income
    Income
    Taxes
   17




---



##### Table of Contents



Liquidity
    and Capital Resources
               18




---



##### Table of Contents



Financial
    Condition
    Statutory
    Capital and Surplus
    Reserves
    for Unpaid Losses and Loss Adjustment Expenses
   19




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##### Table of Contents



June 30, 2007 versus


June 30, 2007 versusJune 30,


December 31,


June 30,


December 31, 2006


June 30, 20062007


2006


2006


Change


% Change


Change


% Change(In thousands, except claim and per claim data)Net case reserves

$
289,332


$
311,142


$
348,717


$
(21,810
)


(7.0
)%

$
(59,385
)


(17.0
)%Number of open claims


2,124



2,256



2,558



(132
)


(5.9
)%


(434
)


(17.0
)%Average net case reserve per open
    claim

$
136,220


$
137,918


$
136,324


$
(1,698
)


(1.2
)%

$
(104
)


(0.1
)%Net IBNR reserves

$
256,668


$
241,068


$
202,867


$
15,600



6.5
%

$
53,801



26.5
%Total net reserves

$
546,000


$
552,210


$
551,584


$
(6,210
)


(1.1
)%

$
(5,584
)


(1.0
)%          20




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##### Table of Contents



Six Months Ended


Year EndedJune 30, 2007


December 31, 2006Beginning balance, gross

$
688,031


$
689,857Less, reinsurance recoverables


107,965



107,692Net reserves, beginning balance


580,066



582,165Deconsolidation of PIC-FL






(2,418
)Incurred related toCurrent year


52,441



113,338Prior years


(17,163
)


(12,880
)35,278



100,458Paid related toCurrent year


833



3,168Prior years


43,091



96,97143,924



100,139Net reserves, ending balance


571,420



580,066Plus, reinsurance recoverables


108,704



107,965Ending balance, gross

$
680,124


$
688,031Development as a % of beginning
    net reserves


(3.0
)%


(2.2
)%   Other
    Significant Balance Sheet Items
         21




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##### Table of Contents



Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-K Form 10-Q,
    Effects
    of New Accounting Pronouncements
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  General
   22




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##### Table of Contents



Qualitative
    Information About Market Risk
      Quantitative
    Information About Market Risk
    June 30, 2007


December 31, 2006Portfolio


Change in


Modified


Portfolio


Change in


ModifiedChange in Rates

Value


Value


Duration


Value


Value


Duration(Dollars in thousands)


(Dollars in thousands)+2%

$
271,968


$
(15,851
)


2.79


$
239,943


$
(15,058
)


2.88+1%


279,832



(7,987
)


2.84



247,111



(7,890
)


2.890


287,819







3.09



255,001







3.16-1%


297,421



9,602



3.14



263,350



8,349



3.23-2%


307,132



19,313



3.22



272,152



17,151



3.33  23




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##### Table of Contents



Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rule 13a-15(b).
  Changes
    in Internal Control Over Financial Reporting
   24




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##### Table of Contents



PART II.
    OTHER INFORMATION  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Total Number


Maximum Number (or Approximate DollarTotal





of Shares


Value) of Shares That May Yet BeNumber of


Average


Purchased as


Purchased Under the Plans or ProgramsShares


Price Paid


Part of Publicly


Discretionary


Discretionary


Rule 10b5-1Purchased


per Share


Announced Plans


Plan(a)


Plan(b)


Plan(c)For the month ended April 30,
    2007


39,800


$
39.13



39,800



70,204


$



$
31,027,177For the month ended May 31,
    2007


54,500


$
39.34



54,500



55,004


$
15,000,000


$
29,471,063For the month ended June 30,
    2007


22,500


$
40.67



22,500



55,004


$
15,000,000


$
28,556,037For the three months ended
    June 30, 2007


116,800


$
39.52



116,800



55,004


$
15,000,000


$
28,556,037     (a)
    
    In November 2005, the Board of Directors authorized the purchase
    of an additional five percent of the Companys outstanding
    common shares, which represents approximately
    637,500 shares, at the discretion of management as part of
    a repurchase program that began March 30, 2001 (referred to
    as the discretionary plan). This most recent
    authorization brings the total number of shares authorized to be
    repurchased under the discretionary plan to 6,060,659. The
    timing of the purchases and the number of shares to be bought at
    any time depend on market conditions and the Companys
    capital resources and requirements. The discretionary plan has
    no expiration date and may be terminated at any time.(b)
    
    On May 22, 2007, the Board of Directors authorized
    management to repurchase, at managements discretion,
    additional common shares with a cost of up to $15 million
    in the open market or in privately negotiated transactions
    during the Companys normal trading windows. The Company
    intends to deplete the November 2, 2005 authorization
    described in footnote (a) above before commencing
    repurchases under the new $15 million authorization.(c)
    
    On October 27, 2006, the Companys Board of Directors
    adopted a new stock repurchase plan for 2007 under
    Rule 10b5-1
    and authorized an additional share repurchase of
    $32 million of its common shares. In addition, the Board
    authorized the rollover into the 2007 plan of any unused dollars
    allocated to the 2006 10b5-1 plan, which equaled
    $6.4 million at December 31, 2006. The
    Rule 10b5-1
    plan share repurchases are made pursuant to a formula in the
    plan and are expected to continue until the entire
    authorizations are utilized, subject to conditions specified in
    the plan, but not later than December 31, 2007. The Company
    may terminate the plan at any time. 25




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders    Votes


VotesNominee

For


WithheldStephen H. Haynes, M.D.


10,553,098



201,222Mitchell A. Rinek, M.D.


10,553,098



201,222   BrokerFor


Against


Abstain


Non-VotesProposal to ratify appointment of
    BDO Seidman,
    LLP as the Companys independent registered 
    public accountants


10,747,164



4,282



2,874



   Item 6.
    Exhibits  Exhibits.
   26




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##### Table of Contents



SIGNATURES      By:
    /s/  R.
    Kevin Clinton     By:
    /s/  Frank
    H. Freund       27




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##### Table of Contents



EXHIBIT INDEX  Exhibit No.

Exhibit Description31
.1

Certification of Chief Executive
    Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.31
.2

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)
    under the Securities Exchange Act of 1934.32
.1

Certification of Chief Executive
    Officer and Chief Financial Officer pursuant to 18 U.S.C.
    Section 1350 and
    Rule 13a-14(b)
    under the Securities Exchange Act of 1934.  28