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 Exchange Act of 1934
Date of Report (date of earliest event reported): May 10, 2005
HEALTHSOUTH Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-10315 63-0860407
(Commission File Number) (IRS Employer Identification No.)
One HEALTHSOUTH Parkway, Birmingham, Alabama 35243
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(Address of Principal Executive Offices, Including Zip Code)
(205) 967-7116
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(Registrant's Telephone Number, Including Area Code)
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 1.01 Entry into a Material Definitive Agreement
As previously reported in its Current Report on Form 8-K filed with
the Securities and Exchange Commission on April 18, 2005, Joel C. Gordon
resigned, effective May 10, 2005, from the Board of Directors of HEALTHSOUTH
Corporation (the "Company"), where he served as Chairman Emeritus.
In connection with Mr. Gordon's resignation, the Company entered into
a letter agreement with Mr. Gordon dated as of May 10, 2005 (the "Agreement"),
regarding certain matters relating to Mr. Gordon's retirement. The Agreement,
among other things, (a) acknowledges that Mr. Gordon's current indemnity
agreement remains in full force and effect following his resignation, (b) sets
forth the effect of Mr. Gordon's resignation on his outstanding stock options
and restricted stock grants and (c) provides that the Company will furnish
information to Mr. Gordon with respect to certain actions, suits, proceedings
or investigations involving the Company or any of its present or former
directors and that Mr. Gordon will cooperate in good faith with all reasonable
requests by the Company in connection with such actions, suits, proceedings or
investigations.
The description of the Agreement contained herein is qualified in its
entirety by reference to the Agreement, a copy of which is attached hereto as
Exhibit 10 and incorporated herein by reference.
ITEM 9.01. Financial Statements and Exhibits.
(c) Exhibits.
See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
HEALTHSOUTH CORPORATION
By: /s/ Gregory L. Doody
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Name: Gregory L. Doody
Title: Executive Vice President,
General Counsel and Secretary
Dated: May 10, 2005
EXHIBIT INDEX
Exhibit Number Description
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10 Letter Agreement dated as of May 10, 2005, between
HEALTHSOUTH Corporation and Joel C. Gordon.
EXHIBIT 10
LETTERHEAD OF HEALTHSOUTH
May 10, 2005
Joel C. Gordon
The Gordon Group
Suite 650
3102 West End Avenue
Nashville, TN 37203
Dear Joel:
This is to confirm our agreement with respect to the matters set forth
below, all of which have been agreed to in connection with your retirement from
the Board of Directors of HealthSouth Corporation (the "Company").
1. Indemnity Agreement. Reference is made to that certain Indemnity
Agreement ("Indemnity Agreement"), dated as of March 27, 2003, by and
between you ("Director") and the Company. The Company hereby
acknowledges, reaffirms and agrees that the Indemnity Agreement is
and will continue to be in full force and effect, enforceable in
accordance with the terms thereof, including after Director ceases to
be a member of the Company's Board of Directors.
2. Equity Awards. Reference is made to that certain memorandum to Jay
Grinney from Gregory L. Doody dated March 10, 2005 (the "Memorandum")
regarding the effect of Director's retirement from the Board on the
equity awards previously granted to Director by the Company. The
Company hereby agrees that as set forth in the Memorandum by virtue
of Director's retirement
a. all currently outstanding stock options (relating to 300,000
shares with varying strike prices) would terminate within three
months of Director's retirement in the event that they remain
unexercised;
b. the restricted stock granted to Director on January 1, 2005
(7,962 shares) would be forfeited; and
c. the remaining forfeiture provisions applicable to restricted
stock granted to Director on January 20, 2004 and March 1, 2005
shares (totaling 34,702 shares) would lapse.
3. Access to Information. The Company hereby agrees that, subject to
appropriate confidentiality undertakings by Director, applicable
attorney-client and other applicable privileges and to the extent not
otherwise precluded by applicable law or contrary to a request of
governmental authorities, at the request from time to time by
Director or Director's authorized representative, the Company shall,
and shall cause its General Counsel or his designees (or, if there is
no General Counsel, by its Chief Financial Officer or his designees)
to, furnish to Director or Director's authorized representatives
updates and other requested information with respect to any actions,
suits, or proceedings against, or any governmental investigations or
negotiations with third parties involving, the Company or any of its
present or former members of the Board of Directors, in each case
only to the extent that such matter (i) arises from facts that took
place prior to the date on which Director ceases to be a director of
the Company and (ii) reasonably relates to the interests of Director
(collectively, "Actions"). To the extent that any such requested
information constitutes legal advice or other information subject to
the attorney-client or related privilege, the Company shall provide
such information to Director, so long as such information will
continue to be subject to the attorney-client or other privilege (it
being understood that the Company will enter into joint defense or
other arrangements to protect the status of such information as
privileged, if such arrangement would be effective to provide such
protection), unless, (i) such information addresses a matter as to
which the parties have a conflict of interests, or (ii) the Company
has reasonably determined that providing such information will be
materially prejudicial to the Company; provided that the immediately
preceding clause (ii) shall not be a basis for denial of any Director
request for privileged information if such information refers to
Director or reflects Director's conduct or statements and, in such
case, such information shall be made available to Director under a
joint defense agreement, so long as it would remain privileged. In
addition, and subject to the same limitations as set forth in the two
preceding sentences, the Company agrees (a) to provide Director and
Director's authorized representatives with reasonable access to the
books and records of the Company and its subsidiaries with respect to
any such Action, (b) to cause its officers, employees, and advisors
to furnish Director with such information to the extent that such
information is necessary in connection with Director's evaluation or
defense of any such Action, and (c) to notify and consult with
Director and Director's authorized representatives before initiating
any Action within the scope of this paragraph 3. The Company has
designated the General Counsel of the Company as the point of contact
for Director and Director's authorized representatives to seek the
updates, documents, and other information contemplated by this
paragraph. Director acknowledges and agrees that Director's sole
remedy for any breach of this paragraph 3 shall be to seek specific
performance of the Company's obligations hereunder, so long as the
Company acts in good faith.
4. Insurance & Indemnification. In (i) resolving any coverage disputes
by insurers with respect to currently existing directors' and
officers' insurance policies that provide coverage for Actions that
relate to actions or omissions prior to Director's voluntary
resignation, (ii) seeking coverage under any currently existing
directors' and officers' insurance policies with respect to any
Action, or (iii) interpreting and applying the terms of the Indemnity
Agreement, the Company shall not enter into agreements or support or
take positions that disadvantage Director, or treat Director less
favorably, as compared to any then current director, because Director
is no longer a member of the Company's Board of Directors. Nothing
contained herein is intended to prohibit or limit the application of
any currently existing directors' and officers' insurance policy in
accordance with its terms. For purposes of this paragraph 4, the term
"currently existing directors' and officers' insurance policies" is
intended to include within its scope all insurance policies of the
Company obtained prior to May 10, 2005, including those that have
purportedly been rescinded or otherwise challenged by the issuers
thereof.
5. Cooperation. Director hereby agrees, subject to applicable
attorney-client privileges and other applicable privileges, to
cooperate in good faith with all reasonable requests by the Company
in connection with any governmental investigation or defense or
prosecution of any Action. The Company agrees to take due account of
Director's regular employment and other business obligations in
requesting Director to make personal appearances or travel and agrees
to reimburse Director for reasonable out-of-pocket travel and similar
expenses incurred by Director in response to the Company's requests.
The Company acknowledges and agrees that the Company's sole remedy
for any breach of this paragraph 5 shall be to seek specific
performance of the Director's obligations hereunder, so long as
Director acts in good faith.
6. Specific Performance. The Company and Director acknowledge and agree
that the Company or Director, as the case may be, will be irreparably
damaged if this agreement is not specifically enforced. Upon a breach
or threatened breach of any provision of this agreement by the
Company or Director, the other party to this agreement, shall, in
addition to all other remedies, be entitled to seek specific
performance.
7. Counterparts. This letter agreement may be executed in one or more
counterparts. All such counterparts shall constitute one and the same
agreement and shall become effective when one or more counterparts
have been signed by each party and delivered to the other party.
8. Governing Law. This letter agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Delaware, applied without giving effect to any conflicts-of-law
principles.
If the foregoing correctly and completely sets forth our
understanding, please sign the enclosed copy of this letter in the space
provided and return it to the Company.
Very truly yours,
HEALTHSOUTH CORPORATION
By: /s/ Gregory L. Doody
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Name: Gregory L. Doody
Title: Executive Vice President,
General Counsel and Secretary
Confirmed and agreed to as of the date first written above:
Joel C. Gordon
/s/ Joel C. Gordon
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