UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 9, 2006 (March 7, 2006)
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HealthSouth Corporation
(Exact Name of Registrant as Specified in Charter)
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Delaware 000-14940 63-0860407
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
One HealthSouth Parkway
Birmingham, Alabama 35243
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (205) 967-7116
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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 5.03. Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.
On March 7, 2006, HealthSouth Corporation (the "Company"), closed its
previously announced sale of 400,000 shares of 6.50% Series A Convertible
Perpetual Preferred Stock (the "Series A Preferred Stock"). In connection
therewith, the Company filed with the Secretary of State of the State of
Delaware the Certificate of Designations of its Series A Preferred Stock. A
copy of the Certificate of Designations is attached hereto as Exhibit 3.1.
The Series A Preferred Stock has an initial liquidation preference of
$1,000 per share of Series A Preferred Stock, which is subject to accretion.
Holders of Series A Preferred Stock are entitled to receive, when and if
declared by the Company's Board of Directors, cash dividends at the rate of
6.50% per annum on the accreted liquidation preference per share, payable
quarterly in arrears on January 15, April 15, July 15 and October 15 of each
year, commencing on July 15, 2006. If the Company is prohibited by the terms
of its credit facilities, debt indentures or other debt instruments from
paying cash dividends on the Series A Preferred Stock, the Company may pay
dividends in shares of its common stock, or a combination of cash and shares
of its common stock, if the shares of its common stock delivered as payment
are freely transferable by the recipient thereof (other than by reason of the
fact that the recipient is the Company's affiliate) or if a shelf registration
statement relating to that common stock is effective to permit the resale
thereof. Shares of the Company's common stock delivered as dividends will be
valued at 95% of their market value. Unpaid dividends will accrete at an
annual rate of 8.0% per year for the relevant dividend period and will be
reflected as an accretion to the liquidation preference of the Series A
Preferred Stock. The Series A Preferred Stock is convertible, at the option of
the holder, at any time into shares of the Company's common stock at an
initial conversion price of $6.10 per share, which is equal to an approximate
conversion rate of approximately 163.9344 shares of common stock per share of
Series A Preferred Stock, subject to specified adjustments. On or after July
20, 2011, the Company may cause the shares of Series A Preferred Stock to be
automatically converted into shares of the Company's common stock at the
conversion rate then in effect if the closing sale price of the Company's
common stock for 20 trading days within a period of 30 consecutive trading
days ending on the trading day before the date the Company gives the notice of
forced conversion exceeds 150% of the conversion price of the Series A
Preferred Stock. If the Company is subject to a fundamental change, as defined
in the Certificate of Designations of the Series A Preferred Stock, each
holder of shares of Series A Preferred Stock has the right, subject to certain
limitations, to require the Company to purchase any or all of each such
holder's shares of Series A Preferred Stock at a purchase price equal to 100%
of the accreted liquidation preference, plus any accrued and unpaid dividends
to the date of purchase. In addition, if holders of the Series A Preferred
Stock elect to convert shares of Series A Preferred Stock in connection with
certain fundamental changes, the Company will in certain circumstances
increase the conversion rate for such shares of Series A Preferred Stock.
Each holder of Series A Preferred Stock has one vote for each share of
Series A Preferred Stock held by the holder on all matters voted upon by the
holders of the Company's common stock, as well as voting rights specifically
provided for in the Company's restated certificate of incorporation or as
otherwise from time to time required by law. In addition, if the Company fails
to repurchase shares of Series A Preferred Stock following a fundamental
change, then the holders of Series A Preferred Stock (voting separately as a
class with all other series of preferred stock upon which like voting rights
have been conferred and are exercisable) will be entitled to call a special
meeting of the Company's board of directors and, at the special meeting, vote
for the election of two additional directors to the Company's board of
directors. The term of office of all directors so elected will terminate
immediately upon the Company's repurchase of those shares of Series A
Preferred Stock.
The Series A Preferred Stock will be, with respect to dividend rights
and rights upon liquidation, winding-up or dissolution: 1) senior to all
classes of the Company's common stock and each other class of capital stock or
series of preferred stock established after the original issue date of the
Series A Preferred Stock (the "Issue Date"), the terms of which do not
expressly provide that such class or series ranks senior to or on a parity
with the Series A Preferred Stock as to dividend rights or rights upon the
Company's liquidation, winding-up or dissolution; 2) on a parity with any
class of capital stock or series of preferred stock established after the
Issue Date, the terms of which expressly provide that such class or series
will rank on a parity with the Series A Preferred Stock as to dividend rights
or rights upon the Company's liquidation, winding-up or dissolution; 3) junior
to each class of capital stock or series of preferred stock established after
the Issue Date, the terms of which expressly provide that such class or series
will rank senior to the Series A Preferred Stock as to dividend rights or
rights upon the Company's liquidation, winding-up or dissolution; and 4)
junior to all the Company's existing and future debt obligations and other
liabilities, including claims of trade creditors.
The foregoing description of the Series A Preferred Stock is qualified in
its entirety by reference to the Certificate of Designations, a copy of which
is attached hereto as Exhibit 3.1, and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
See Exhibit Index.
SIGNATURE
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.
HEALTHSOUTH CORPORATION
By: /s/ GREGORY L. DOODY
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Name: Gregory L. Doody
Title: Executive Vice President,
General Counsel and Secretary
Date: March 9, 2006
EXHIBIT INDEX
Exhibit No. Description
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3.1 Certificate of Designations of 6.50% Series A Convertible
Perpetual Preferred Stock, as filed with the Secretary of
State of the State of Delaware on March 7, 2006.