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): March 6, 2006
HealthSouth Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-10315 63-0860407
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(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.
On March 6, 2006, a class action settlement agreement (the
"Settlement") was reached by all parties to an action consolidated on July 2,
2003 against, among others, HealthSouth Corporation ("HealthSouth" or the
"Company"), captioned IN RE HEALTHSOUTH CORP. ERISA LITIGATION, No.
CV-03-BE-1700 (N.D. Ala.) (the "ERISA Litigation"). This agreement supersedes a
partial settlement agreement previously executed on July 25, 2005 by, among
others, the Company.
Under the terms of the Settlement, and in consideration of an absolute
and unconditional release from all members of the plaintiff class of all claims
(collectively, the "Released Claims") asserted in the ERISA Litigation,
excluding all Securities Actions, Derivative Actions, and certain other claims
(each, as set forth in the Settlement), HealthSouth and its insurance carriers
have agreed, without admitting or denying the existence or validity of any of
the Released Claims, to pay $27 million to the plaintiff class via the
HealthSouth Corporation Employee Stock Benefit Plan (the "Plan"), of which the
Company is contributing $7 million and its insurance carriers are contributing
$20 million. In addition, the Company's former CFO Michael Martin is
contributing $350,000 and the Company's former CEO Richard Scrushy is
contributing $1,500,000 toward the settlement. HealthSouth will also contribute
the first million dollars of its net recovery, if any, from the $47 million
judgment recently entered against Richard Scrushy in derivative litigation,
which is currently on appeal. The Settlement is subject to approval by an
independent fiduciary on behalf of the Plan and final approval of the United
States District Court for the Northern District of Alabama (the "Court")
consummated.
Certain matters discussed herein constitute forward-looking statements
which represent HealthSouth's current expectations and beliefs concerning
future events that involve risks and uncertainties which could cause actual
results to differ materially from those currently anticipated. Such information
is based on numerous assumptions and involve a number of risks and
uncertainties, many of which are beyond the Company's control.
ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure included under Item 1.01 of this Current Report on Form
8-K is incorporated by reference into this Item 2.03.
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: March 10, 2006