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): February 3, 2005
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 February 3, 2005, HEALTHSOUTH Corporation (the "Company")
announced the appointment of Joseph T. Clark to the position of President of
the Ambulatory Surgery Center Division of the Company, effective March 1,
2005. Mr. Clark has 26 years of healthcare industry experience. Mr. Clark
served as president and chief executive officer of Healthmark Partners, a
privately held healthcare company which operates specialty hospitals and
ambulatory surgery centers on a joint venture basis with physicians and
non-profit hospitals. Prior to his tenure at Healthmark, Mr. Clark worked for
Response Oncology, Inc., a publicly held specialty healthcare company, serving
over the years as chief financial officer, president, chief operating officer
and chief executive officer. Mr. Clark's experience also includes positions
with American Medical International, Inc. and Humana, Inc.
On February 3, 2005, the Company also announced the appointment of
James C. Foxworthy as Executive Vice President and Chief Administrative
Officer, effective March 1, 2005. Mr. Foxworthy served as corporate vice
president for business transformation at Temple-Inland, a public corporation
operating in various industry segments including corrugated packaging,
financial services and manufactured lumber products. Prior to Temple-Inland,
Mr. Foxworthy spent 18 years with Union Camp Corporation, a leading maker of
fine papers and packaging, where he served in a number of human resource roles
including division manager of industrial relations.
A copy of the press release announcing the appointment of Messrs.
Clark and Foxworthy is attached hereto as Exhibit 99 and is incorporated
herein by reference.
In connection with the appointment of Mr. Clark as President of the
Ambulatory Surgery Center Division, the Company entered into an Employment
Agreement with Mr. Clark (the "Clark Agreement"), which was executed on
February 3, 2005 but is effective as of March 1, 2005. Pursuant to the terms
of the Clark Agreement, Mr. Clark will receive an annual base salary of
$325,000. Mr. Clark will also be eligible to receive an annual cash bonus
targeted at 60% of his base salary in accordance with the Company's senior
management bonus plan, which is currently being developed. Mr. Clark will be
entitled to receive certain medical and life insurance benefits and other
employee benefits of the sort provided to other similarly-situated officers of
the Company and also reimbursement of certain costs of relocating to
Birmingham, Alabama, the location of the Company's headquarters.
The Clark Agreement also provides that Mr. Clark is to receive equity
incentives commensurate with Mr. Clark's positions and responsibilities with
the Company. The Clark Agreement provides for the Company under its existing
equity incentive program to grant annually to Mr. Clark 30,000 shares of
restricted stock and an annual option to purchase 55,000 shares of the
Company's common stock.
The Clark Agreement is effective for a term of two years beginning on
March 1, 2005. If the Clark Agreement is terminated by the Company without
cause, by Mr. Clark for good reason, or within sixty days following a change
of control of the Company, or by either party as a result of death or
disability, Mr. Clark will be entitled to receive (i) his base salary, any
outstanding bonus payments, payments in respect of accrued and unpaid vacation
and certain other payments due as of the date of termination, (ii) such vested
stock options and other benefits as Mr. Clark may be entitled to receive under
any equity incentive plan or any other stock option or other employee benefit
plan of the Company, and (iii) certain severance payments and benefits,
including up to twelve months of Mr. Clark's base salary as provided for in
the Clark Agreement. If the Clark Agreement is terminated by the Company for
cause or by Mr. Clark without good reason, Mr. Clark will be entitled to
receive (i) his base salary, any outstanding bonus payments, payments in
respect of accrued and unpaid vacation and certain other payments due as of
the date of termination and (ii) such vested stock options and other benefits
Mr. Clark may be entitled to receive under any stock option or other employee
benefit plan of the Company, but Mr. Clark will not be entitled to receive any
severance payments or certain other benefits he would be entitled to receive
were the Clark Agreement not terminated for cause or without good reason.
The Clark Agreement also contains certain non-competition and
non-disclosure provisions that are effective throughout the term of Mr.
Clark's employment and for a period of twelve and twenty-four months,
respectively, thereafter.
The foregoing description of the Clark Agreement is qualified in its
entirety by reference to the Clark Agreement, a copy of which is attached
hereto as Exhibit 10.1 and is incorporated herein by reference.
In connection with the appointment of Mr. Foxworthy as Executive Vice
President and Chief Administrative Officer, the Company entered into an
Employment Agreement with Mr. Foxworthy (the "Foxworthy Agreement"), which was
signed on February 3, 2005, but is effective as of March 1, 2005. Pursuant to
the terms of the Foxworthy Agreement, Mr. Foxworthy will receive an annual
base salary of not less than $325,000. Mr. Foxworthy will also be eligible to
receive an annual cash bonus targeted at 60% of his base salary in accordance
with the Company's senior management bonus plan, which is currently being
developed. The Foxworthy Agreement provides that such bonus for the year
ending December 31, 2005 will not be less than $100,000. Mr. Foxworthy will be
entitled to receive certain medical and life insurance benefits and other
employee benefits and perquisites of the sort provided to other
similarly-situated officers of the Company and also reimbursement of certain
costs of relocating to Birmingham, Alabama, the location of the Company's
headquarters.
The Foxworthy Agreement also provides that Mr. Foxworthy is to
receive equity incentives commensurate with the incentives provided to
similarly-situated officers of the Company, upon terms no less favorable than
those applicable to such similarly-situated officers. The Foxworthy Agreement
provides for the Company under its existing equity incentive program to grant
annually to Mr. Foxworthy 30,000 shares of restricted stock and an annual
option to purchase 65,000 shares of the Company's common stock, with an
initial grant to be made on March 1, 2005.
The Foxworthy Agreement is effective for a term of three years
beginning on March 1, 2005. If the Foxworthy Agreement is terminated by the
Company without cause, by Mr. Foxworthy for good reason, or within sixty days
following a change of control of the Company, or by either party as a result
of death or disability, Mr. Foxworthy will be entitled to receive (i) his base
salary, any outstanding bonus payments, payments in respect of accrued and
unpaid vacation and certain other payments due as of the date of termination,
(ii) payment of other amounts, entitlements or benefits in accordance with the
applicable plans, programs and arrangements of the Company, (iii) such vested
stock options and other benefits as Mr. Foxworthy may be entitled to receive
under any equity incentive plan or any other stock option or other employee
benefit plan of the Company, (iv) relocation expenses to another location in
the continental United States of America, (v) certain severance payments and
benefits, including, in certain circumstances, Mr. Foxworthy's base salary for
a period equal to the greater of the then remaining term of the Foxworthy
Agreement or two years, as provided for in the Foxworthy Agreement and (vi)
all shares of restricted stock granted to Mr. Foxworthy pursuant to the
Foxworthy Agreement, with such shares of restricted stock being free of any
and all restrictions other than those required by the securities laws. If the
Foxworthy Agreement is terminated by the Company for cause or by Mr. Foxworthy
without good reason, Mr. Foxworthy will be entitled to receive (i) his base
salary, any outstanding bonus payments, and other payments due as of the date
of termination, (ii) payment of other amounts, entitlements or benefits in
accordance with the applicable plans, programs and arrangements of the Company
until such termination and (ii) such vested stock options and other benefits
Mr. Foxworthy may be entitled to receive under any stock option or other
employee benefit plan of the Company, but Mr. Foxworthy will not be entitled
to receive any severance payments or certain other benefits he would be
entitled to receive were the Foxworthy Agreement not terminated for cause or
without good reason.
The Foxworthy Agreement also contains certain non-competition and
non-disclosure provisions that are effective throughout the term of Mr.
Foxworthy's employment and for a period of twelve and twenty-four months,
respectively, thereafter. The Company also agreed that Mr. Foxworthy shall be
entitled to indemnification in connection with a litigation or proceeding
arising out of his acting as Chief Administrative Officer to the fullest
extent permitted under the Company's certificate of incorporation, by-laws and
by applicable law.
The foregoing description of the Foxworthy Agreement is qualified in
its entirety by reference to the Foxworthy Agreement, a copy of which is
attached hereto as Exhibit 10.2 and is 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 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
Dated: February 8, 2005
Exhibit Index
Exhibit No. Description
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99 Press Release of HEALTHSOUTH Corporation entitled "HEALTHSOUTH
FILLS FINAL LEADERSHIP POSITIONS" dated February 3, 2005.
10.1 Employment Agreement, dated as of February 3, 2005, between
HEALTHSOUTH Corporation and Joseph T. Clark.
10.2 Employment Agreement, dated as of February 3, 2005, between
HEALTHSOUTH Corporation and James C. Foxworthy.