8-K

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: October 13, 2004
(Date of earliest event reported)

FIRST HEALTH GROUP CORP.

(Exact name of registrant as specified in its charter)

Delaware	0-15846	36-3307583
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3200 Highland Avenue
Downers Grove, IL 60515
(Address of principal executive offices, including zip code)

(630) 737-7900
(Registrant’s telephone number, including area code)

     Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

þ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

þ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement
	Item 9.01 Financial Statements and Exhibits
SIGNATURE
Exhibit Index
Form of Options Tender Agreement

Item 1.01 Entry into a Material Definitive Agreement

     On October 13, 2004, First Health Group Corp. (“First Health”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Coventry Health Care, Inc. (“Coventry”), pursuant to which First Health will merge with and into a wholly owned subsidiary of Coventry (the “Merger”). The Merger Agreement and the press release announcing the Merger were attached as exhibits to the Current Report on Form 8-K filed by First Health with the Securities and Exchange Commission on October 14, 2004.

     In connection with the Merger Agreement, First Health will commence an offer to purchase all of the outstanding options, whether or not vested, to purchase shares of First Health common stock (the “Option Tender Offer”). Upon consummation of the Option Tender Offer, First Health will pay cash to the holder of each validly tendered option in an amount for each option equal to the greater of (i) the amount by which $18.75 exceeds the exercise price of the option, if any, or (ii) $1.25, in each case less any applicable withholdings for taxes. The Option Tender Offer will be conditioned upon, among other things, satisfaction or waiver of all the conditions to the Merger set forth in the Merger Agreement. On or since October 13, 2004, certain holders of outstanding options to purchase shares of First Health common stock entered into agreements to, among other things, tender their options pursuant to the Option Tender Offer (the “Options Tender Agreement”). A copy of the form of Options Tender Agreement is attached as an exhibit to this Current Report on Form 8-K and is incorporated herein by reference. This summary of the Options Tender Agreement is qualified in its entirety by reference to the exhibit attached. We have listed below the name of each of our directors and executive officers that has entered into, or has advised us that he or she intends to enter into, an Options Tender Agreement, his or her position with First Health and the number of outstanding options held by such person as of October 13, 2004:

Name of Optionholder	Position with First Health	Number of Options
James C. Smith	Chairman of the Board		861,000
Edward L. Wristen	President and Chief Executive Officer, Director		1,149,998
William R. McManaman	Senior Vice President and Chief Financial Officer		250,000
Joseph E. Whitters	Executive Vice President		267,252
A. Lee Dickerson	Executive Vice President		375,000
Patrick G. Dills	Executive Vice President		267,252
Susan E. Oberling	Senior Vice President, Operations		133,300
Susan T. Smith	Vice President, Secretary and General Counsel		180,000

Name of Optionholder	Position with First Health	Number of Options
Michael J. Boskin, Ph.D.	Director		212,000
Daniel S. Brunner	Director		64,000
Raul Cesan	Director		80,000
Ronald H. Galowich	Director		180,000
Harold S. Handelsman	Director		170,000
Don Logan	Director		204,000
William Mayer	Director		80,000
David E. Simon	Director		156,000

Additional Information

     This announcement is neither an offer to purchase nor a solicitation of an offer to sell options to purchase shares of First Health common stock. The Option Tender Offer has not commenced. At the time the Option Tender Offer is commenced, First Health will file a tender offer statement on Schedule TO with the Securities and Exchange Commission. The tender offer statement (including an offer to purchase and related offer documents) will contain important information that First Health’s optionholders should read carefully before any decision is made with respect to the Option Tender Offer. The offer to purchase, and all other documents filed with the SEC in connection with the Option Tender Offer will be available when filed free of charge at the SEC’s web site, www.sec.gov.

     This communication is not a solicitation of a proxy from any security holder of First Health. First Health and Coventry intend to file a registration statement on Form S-4 with the SEC in connection with the Merger. The Form S-4 will contain a prospectus, a proxy statement and other documents for the stockholders’ meeting of First Health at which time the proposed transaction will be considered. The Form S-4, proxy statement and prospectus will contain important information about First Health, Coventry, the Merger and related matters. Investors and stockholders should read the Form S-4, the proxy statement and prospectus and the other documents filed with the SEC in connection with the Merger carefully before they make any decision with respect to the Merger. The Form S-4, proxy statement and prospectus, and all other documents filed with the SEC in connection with the Merger will be available when filed free of charge at the SEC’s web site, www.sec.gov.

     All documents filed with the SEC by First Health in connection with the Merger and the Option Tender Offer will be made available to investors free of charge by writing to: First Health Group Corp., 3200 Highland

Avenue, Downers Grove, Illinois 60515, Attn: Investor Relations. All documents filed with the SEC by Coventry in connection with the Merger will be made available to investors free of charge by writing to: Coventry Health Care, Inc., 6705 Rockledge Drive, Suite 900, Bethesda, Maryland 20817, Attn: Investor Relations.

     First Health, Coventry, their respective directors and executive officers may be deemed participants in the solicitation of proxies from First Health’s stockholders. Information concerning First Health’s directors and certain executive officers and their direct and indirect interests in First Health is contained in its proxy statement for its 2004 annual meeting of stockholders. Information concerning Coventry’s directors and certain executive officers and their direct and indirect interests in Coventry is contained in its proxy statement for its 2004 annual meeting of stockholders. Additional information regarding the interests of these participants in the Merger will be available in the proxy statement regarding the Merger. Investors can obtain free copies of these documents from the SEC’s web site, www.sec.gov.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.1       Form of Options Tender Agreement

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.

Dated: October 19, 2004

FIRST HEALTH GROUP CORP.
By:	/s/ Edward L. Wristen
	Name:	Edward L. Wristen
	Title:	President and Chief Executive Officer

Exhibit Index

Exhibit Number	Description
99.1	Form of Options Tender Agreement

EX-99.1

Exhibit 99.1

                   , 2004

FIRST HEALTH GROUP CORP.
Downers Grove, Illinois

     As you have been advised, First Health Group Corp. (“First Health”) is contemplating entering into a merger agreement with a subsidiary of Coventry Health Care, Inc. (“Coventry”), pursuant to which First Health would merge with such subsidiary and become a subsidiary of Coventry and each holder of common stock of First Health will receive shares of Coventry common stock and cash, as has been orally described to you when we provided you this letter (such consideration or any other price paid by Coventry in the merger being the “Deal Consideration”). In connection with such merger, Coventry and First Health intend to offer to holders of First Health stock options the election to have their options accelerated and cashed out, instead of being rolled over into options of Coventry pursuant to the merger agreement without additional vesting. The following briefly describes each of these treatments:

Cash-out of Options

     If you elect to cash-out all of your options, your options would become fully vested at the time of the merger and you would receive in cash, upon consummation of the merger (and only then), as to each option the greater of (1) the difference between the value of the Deal Consideration (cash and the average market value of Coventry Stock on the date of the signing) and the exercise price of the option, or (2) $1.25, in each case less applicable withholding for taxes.

Rollover of Options

     If you do not elect to cash-out your options, they will, pursuant to the merger agreement, be assumed by Coventry and converted in the merger into options to purchase Coventry stock. The vesting of your options would not accelerate. The conversion would be on the basis of the Deal Consideration and would protect any value or spread you have with respect to your current options:

For example: Robin holds 50 options to purchase First Health stock at $10 per share and 100 options to purchase First Health stock at $40 per share. Assuming that the Deal Consideration has a value of $18 per share of First Health stock and that Coventry shares have a value of $36 per share, or one share of Coventry stock for every two shares of First Health, Robin’s options would convert as follows:

50 First Health options would convert into options to purchase 25 Coventry shares at an exercise price equal to $20. Robin had $400 worth of value on her First Health options (50 x ($18 - $10) = $400). Upon conversion, Robin will still maintain $400 worth of value in the Coventry options (25 x ($36 - 20) = 400).

100 First Health options would convert into options to purchase 50 Coventry shares at an exercise price equal to $80 per share. Robin was out of the money by $22 per share or $2,200

total dollars ($40 - $18 = 22). Upon conversion Robin remains $2,200 out of the money ($80 - 36 = $44 x 50 = $2,200).

     First Health will be soliciting the consent of its option holders to the cash out of options in connection with the merger and will be forwarding an Offer to Purchase describing in more detail the terms of that offer. At this time, however, we are asking that you agree to cash out your shares in that offer. By signing and returning a copy of this letter you irrevocably agree to tender all of your options to purchase shares of First Health common stock pursuant to the Offer to Purchase. As such your options will be cashed-out as described above and pursuant to the Offer to Purchase, if such offer is effected and the merger with Coventry is consummated, you will have only the right to receive cash in exchange for the cancellation of your options.

     If you have any questions regarding the above, please contact Susan Smith at (630) 737-7545.

Regards,

Edward L. Wristen

President and Chief Executive Officer

First Health Group Corp.

Agreed to with the intent
to be legally bound:

Signature

Name:

Date: