UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 14, 2007
Health Grades, Inc.
(Exact Name of Registrant as Specified in Charter)
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| Delaware | | 0-22019 | | 62-1623449 |
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(State or Other Jurisdiction
of Incorporation) | | (Commission File
Number) | | (IRS Employer
Identification No.) |
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500 Golden Ridge Road, Suite 100
Golden, Colorado | |
80401 |
| | | |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant’s telephone number, including area code(303) 716-0041
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:
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| o | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| o | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| o | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. 14d-2(b)) |
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| o | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01. Regulation FD Disclosure
The information in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933, except as shall be expressly set forth by specific reference in such filing.
As described more fully in Item 3 of our Annual Report on Form 10-K for the year ended December 31, 2006, we have provided indemnification to our Chief Executive Officer, Kerry R. Hicks, in connection with arbitration with Daniel C. Cadle, William Shaulis, Buckeye Retirement Co., LLC, Ltd. and The Cadle Company (collectively, the “collection agency parties”). Mr. Hicks claims against the collection agency parties included abuse of process, defamation and intentional infliction of emotional distress (“outrageous conduct”). The collection agency’s claims against Mr. Hicks included abuse of process and tortious interference.
On May 14, 2007, the arbitrator entered an award in favor of Mr. Hicks in connection with his claims of defamation and outrageous conduct. For these claims, the arbitrator awarded Mr. Hicks compensatory damages from the collection agency parties totaling $950,000. The arbitrator also awarded Mr. Hicks punitive damages totaling $950,000 against Daniel C. Cadle, Buckeye Retirement Co., LLC, Ltd and The Cadle Company and $10,000 against William Shaulis, Buckeye Retirement Co., LLC, Ltd. and The Cadle Company. With respect to the collection agency parties’ claims against Mr. Hicks, the arbitrator ruled in favor of Mr. Hicks. The arbitrator ruled against Mr. Hicks with respect to his abuse of process claim.
The award described above is in addition to the award made to Mr. Hicks in April 2005 of $400,000 for emotional distress and other maladies as well as attorneys’ fees of $15,587 with interest as a result of the corporate collection agency parties’ abuse of process. This award, which was affirmed by the 10th Circuit Court of Appeals in February 2007, has not been paid to Mr. Hicks.
Mr. Hicks has advised us that he intends to reimburse us for all indemnification expenses we have incurred and continue to incur, from the proceeds of any final awards paid to him, net of any income taxes payable by him resulting from the awards.
The most recent award, if not paid promptly, will be subject to confirmation by the U.S. District Court. We do not know whether the collection agency parties will appeal or otherwise contest the awards, what other actions the collection agency parties may take, when Mr. Hicks will be paid the awards, or when we may receive reimbursement for any or all of the indemnification expenses we have incurred and continue to incur in these matters.
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.
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| | HEALTH GRADES, INC.
(Registrant)
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| | By: | /s/ ALLEN DODGE | |
| | | Allen Dodge | |
| | | Executive Vice President and Chief Financial Officer | |
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Dated: May 17, 2007
