EXHIBIT 10.6

 

HEALTHSOUTH Corporation

 

AMENDED AND RESTATED 1993 CONSULTANTS STOCK OPTION PLAN

 

I. Purpose of the Plan. The purpose of the 1993 Consultants Stock Option Plan
(hereinafter called the “Plan”) of HEALTHSOUTH Corporation, a Delaware
corporation (hereinafter called the “Corporation”), is to provide incentive for
future endeavor and to advance the interests of the Corporation and its
stockholders by encouraging ownership of the Common Stock, par value $.01 per
share (hereinafter called the “Common Stock”), of the Corporation by consultants
or advisors of the Corporation, upon whose judgment, interest and continuing
special efforts the Corporation is largely dependent for the successful conduct
of its operations, and to enable the Corporation to compete effectively with
other enterprises for the services of such consultants and advisors as may be
needed for the continued improvement of the Corporation’s business, through the
grant of options to purchase shares of the Common Stock.

 

A. Participants; Outstanding Options. Options may be granted under the Plan to
such consultants and advisors of the Corporation and its subsidiaries as shall
be determined by the Board of Directors or by a Stock Option Committee appointed
by the Board of Directors as set forth in Section 5 of the Plan; provided,
however, that no Option may be granted to any person if such grant would cause
the Plan to cease to be an “employee benefit plan” as defined in Rule 405 of
Regulation C promulgated under the Securities Act of 1933, and that all such
consultants or advisors must render bona fide services to the Corporation or its
subsidiaries otherwise than in connection with the offer or sale of securities
in a capital-raising transaction.

 

B. Any Option issued prior to the adoption of the Plan (and not issued pursuant
to any other stock option plan of the Corporation) which remains unexercised in
whole or in part, which is granted to a person who is eligible to be granted
Options under the Plan, and which does not contain terms or conditions
inconsistent with the Plan, shall be deemed to have been issued pursuant to the
Plan. This Section 2(b) shall not, without more, be deemed to constitute a
modification or amendment to such Option; provided, however, that the Board of
Directors or the Committee, in their discretion, by resolution may expressly
modify or amend such Option to conform to the Plan or otherwise.

 

C. Any Option issued prior to the adoption of the Plan pursuant to any other
stock option plan of the Corporation which remains unexercised in whole or in
part, which was granted to a Director or Officer of the Corporation who has
ceased to be such a Director or Officer but who remains eligible to participate
in this Plan under the terms set forth in Section 2(a), which has not by its
terms expired or been terminated, and which does not contain terms or conditions
inconsistent with Plan, may, upon resolution of the Board of Directors, be
deemed have issued pursuant to the Plan, and the shares covered thereby shall be
treated as again available under such other stock option plan. This Section 2(c)
shall not, without more, be deemed to constitute a modification or amendment to
such Options; provided, however, that the Board of Directors or the Committee,
in their discretion, by resolution may expressly modify or amend such Option to
conform to the Plan or otherwise.

 

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II. Term of the Plan. The Plan shall become effective as of February 26, 1993.
The Plan shall terminate on the earliest of (a) February 25, 2003, (b) such time
as all shares of Common Stock reserved for issuance under the Plan have been
acquired through the exercise of Options granted under the Plan, or (c) such
earlier time as the Board of Directors of the Corporation may determine. Any
Option outstanding under the Plan at the time of its termination shall remain in
effect in accordance with its terms and conditions and those of the Plan. No
Option shall be granted under the Plan after February 25, 2003.

 

III. Stock Subject to the Plan. Subject to the provisions of Section 13, the
aggregate number of shares of Common Stock for which Options may be granted
under the Plan shall not exceed 4,500,000 shares. If, on or prior to the
termination of the Plan as provided in Section 3, an Option granted under the
Plan shall have expired or terminated for any reason without having been
exercised in full, the unpurchased shares covered thereby shall again become
available for the grant of Options under the Plan.

 

The shares to be delivered upon exercise of Options under the Plan shall be made
available, at the discretion of the Board of Directors, either from authorized
but previously unissued shares as permitted by the Certificate of Incorporation
of the Corporation or from shares re-acquired by the Corporation, including
shares of Common Stock purchased in the open market, and shares held in the
treasury of the Corporation.

 

IV. Administration of the Plan. The Plan shall be administered by the Board of
Directors of the Corporation or by a Stock Option Committee which may be
appointed by the Board of Directors of the Corporation (hereinafter called the
“Committee”). If appointed, the Committee shall consist of three members of the
Board of Directors, and shall include the Chief Executive Officer of the
Corporation, and at least one Director who shall be an independent, outside
Director of the Corporation. The Board of Directors may, from time to time,
remove members from the Committee, and vacancies on the Committee shall be
filled by the Board of Directors. The Chief Executive Officer of the Corporation
shall act as Chairman of the Committee, and the Committee shall hold meetings at
such times and places as the Committee may determine. The acts of a majority of
the Committee, at any meeting thereof at which a quorum is present, or acts
reduced to or approved in writing by a majority of the members of the Committee,
shall be the valid acts of the Committee. If appointed, the Committee may itself
determine, or may, from time to time at its discretion, make recommendations to
the Board of Directors with respect to, the executives and key employees of the
Corporation and its subsidiaries who shall be granted Options and the number of
shares of Common Stock to be subject to each Option.

 

The interpretation and construction of any provision of the Plan or of any
Option granted under it by the Board of Directors or the Committee (within the
scope of their respective authorities) shall be final, conclusive and binding
upon all parties, including the Corporation, its stockholders and Directors, and
the consultants and advisors of the Corporation and its subsidiaries; provided,
however, that the Board of Directors shall have the power and authority to
overrule the Committee. No member of the Board of Directors or the Committee
shall be liable to the Corporation, any stockholder, any optionholder or any
consultant or advisor of the Corporation or its subsidiaries for any action or
determination made in good faith with respect to the Plan or any Option granted
under it. No member of the Board of Directors may vote on any Option to be
granted to him.

 

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The expenses of administering the Plan shall be borne by the Corporation.

 

A. Grant of Options. Options may be granted under the Plan by the Board of
Directors of the Corporation or by the Committee in accordance with the
provisions of Section 5 at any time prior to the termination of the Plan. In
making any determination as to consultants and advisors to whom Options shall be
granted and as to the number of shares to be covered by such Options, the Board
of Directors or the Committee, as the case may be, shall take into account the
duties of the respective consultants and advisors, their present and potential
contribution to the success of the Corporation, and such other factors as the
Board of Directors or the Committee shall deem relevant in connection with the
accomplishment of the purposes of the Plan.

 

B. Each Option granted under the Plan shall be granted pursuant to and subject
to the terms and conditions of a stock option agreement to be entered into
between the Corporation and the optionholder at the time of such grant. Each
such stock option agreement shall be in a form from time-to-time adopted for use
under the Plan by the Board of Directors (such form being hereinafter called a
“Stock Option Agreement”). Any such Stock Option Agreement shall incorporate by
reference all of the terms and provisions of the Plan as in effect at the time
of grant and may contain such other terms and provisions as shall be approved
and adopted by the Board of Directors.

 

C. Option Price. The purchase price of the shares of Common Stock covered by
each Option granted under the Plan shall be at least 100% of the fair market
value (but in no event less than the par value) of such shares at the time the
Option is granted, or such higher purchase price as shall be determined by the
Board of Directors or the Committee, as the case may be.

 

D. If the Common Stock is not listed upon a national securities exchange or
exchanges, such fair market value shall be as determined by the Board of
Directors of the Corporation (which determination shall be conclusive and
binding for all purposes) or, if applicable, shall be deemed to be the last
reported sale price for the Common Stock as quoted by brokers and dealers
trading in the Common Stock in the over-the-counter market (or if the Common
Stock shall be quoted by the National Association of Securities Dealers
Automatic Quotations system, then such NASDAQ quote) on the date preceding the
date on which the Option is granted. If the Common Stock is listed upon a
national securities exchange or exchanges, such fair market value shall be
deemed to be the closing price at which the shares of Common Stock were traded
on such securities exchange or exchanges on the date preceding the date on which
the Option is granted, or if no sale of the Common Stock was made on any
national securities exchange on such date, on the next preceding day on which
there was a sale of the Common Stock.

 

E. Notwithstanding any contrary provision contained in this Plan, the Board of
Directors or the Committee, as the case may be, may, in the exercise of their
business judgment,

 

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cancel outstanding Options and reissue new Options at a lower exercise price in
the event that the fair market value of the Common Stock at any time prior to
the date of exercise falls below the exercise price of Options previously
granted under the Plan.

 

V. Term of Options. The expiration date of an Option granted under the Plan
shall be as determined by the Board of Directors, the Committee or the
Independent Committee at the time of grant, provided that each such Option shall
expire not more than ten years after the date such Option was granted.

 

A. Exercise of Options. Each Option shall become exercisable in whole or in part
or in installments at such time or times as the Board of Directors or the
Committee may prescribe at the time the Option is granted and specify in the
Stock Option Agreement. No Option shall be exercisable after the expiration of
ten years from the date on which it was granted.

 

B. Notwithstanding any contrary provision contained herein, unless otherwise
expressly provided in the Stock Option Agreement, any Option granted hereunder
which is, by its terms, exercisable in installments shall become immediately
exercisable in full upon the occurrence of a Change in Control of the
Corporation. For purposes of this Section 9(b), “Change in Control” shall mean

 

1. the acquisition (other than from the Company) by any person, entity or
“group” (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, but excluding, for this purpose, the Corporation or its
subsidiaries, or any employee benefit plan of the Company or its subsidiaries
which acquires beneficial ownership of voting securities of the Company) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) of 25% or more of either the then-outstanding
shares of Common Stock or the combined voting power of the Company’s
then-outstanding voting securities entitled to vote generally in the election of
Directors; or

 

2. individuals who, as of February 26, 1993, constitute the Board of Directors
of the Corporation (as of such date, the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board of Directors; provided, however,
that any person becoming a Director subsequent to such date whose election, or
nomination for election, was approved by a vote of at least a majority of the
Directors then constituting the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of
Directors of the Company) shall be, for purposes of this Section 9(b)(ii),
considered as though such person were a member of the Incumbent Board; or

 

3. approval by the stockholders of the Company of a reorganization, merger,
consolidation or share exchange, in each case with respect to which persons who
were the stockholders of the Company immediately prior to such reorganization,
merger, consolidation or share exchange do not, immediately thereafter, own

 

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more than 75% of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged, consolidated or other
surviving entity’s then-outstanding voting securities, or a liquidation or
dissolution of the Corporation or the sale of all or substantially all of the
assets of the Corporation.

 

C. Options may be exercised by giving written notice to the Corporation of
intention to exercise, specifying the number of shares to be purchased pursuant
to such exercise in accordance with the procedures set forth in the Stock Option
Agreement. All shares purchased upon exercise of any Option shall be paid for in
full at the time of purchase in accordance with the procedures set forth in the
Stock Option Agreement. Except as provided in Section 9(d) hereof, such payment
shall be made in cash or through delivery of shares of Common Stock or a
combination of cash and Common Stock as provided in the Stock Option Agreement.
Any shares so delivered shall be valued at their fair market value determined as
of the date of exercise of the Option under the method set forth in Section 7(b)
hereof.

 

D. Payment for shares purchased upon exercise of any such Option may be made by
delivery to the Corporation of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Corporation an
amount of sale or loan proceeds sufficient to pay the exercise price.
Additionally, the Corporation will accept, in payment for shares purchased upon
exercise of any such Option, proceeds of a margin loan obtained by the
exercising optionholder from a broker, provided that the exercising optionholder
has, at the same time as delivery to the Corporation of a properly executed
exercise notice, delivered to the Corporation irrevocable instructions to the
Corporation to deliver share certificates directly to such broker upon payment
for such shares.

 

E. Nontransferability of Options. Options granted under the Plan shall be
assignable or transferable only by will or pursuant to the laws of descent and
distribution and shall be exercisable during the optionholder’s lifetime only by
him, except to the extent set forth in the following paragraphs.

 

F. Upon written notice to the Secretary of the Corporation, an optionholder may,
except as otherwise prohibited by applicable law, transfer options granted under
the Plan to one or more members of such optionholder’s immediate family, to a
partnership consisting only of members of such optionholder’s immediate family,
or to a trust all of whose beneficiaries are members of the optionholder’s
immediate family. For purposes of this section, an optionholder’s “immediate
family” shall be deemed to include such optionholder’s spouse, children and
grandchildren only.

 

G. Upon written notice to the Secretary of the Corporation, an optionholder may
transfer options to a charitable, educational or religious entity which has been
determined by the United States Internal Revenue Service to be exempt from
federal income taxation under the provisions of Section 501(c) of the Internal
Revenue Code of 1986, as amended, or any successor statutory provision.

 

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VI. Stockholder Rights of Optionholder. No holder of any Option shall have any
rights to dividends or other rights of a stockholder with respect to shares
subject to an Option prior to the purchase of such shares upon exercise of the
Option.

 

VII. Termination of Option. With respect to any Option which, by its terms, is
not exercisable for one year from the date on which it is granted, if an
optionholder’s relationship with, the Corporation or any of its subsidiaries
terminates within one year after the date an unexercised Option containing such
terms is granted under the Plan for any reason other than death, the Option
shall terminate on the date of termination of such employment or other
relationship. With respect to all Options granted under the Plan, if an
optionholder’s relationship with the Corporation is terminated by reason of his
death, the Option shall terminate one year after the date of death, unless the
Option otherwise expires. If an optionholder’s relationship with the Corporation
terminates for any reason other than as set forth above in this Section 12, the
Option shall terminate three months after the date of termination of such
relationship unless the Option earlier expires, provided that (a) if the
optionholder dies within such three-month period, the Option shall terminate one
year after the date of his death unless the Option earlier expires; (b) the
Board of Directors may, at any time prior to any termination of such employment
or other relationship under the circumstances covered by this Section 12,
determine in its discretion that the Option shall terminate on the date of
termination of such relationship with the Corporation; and (c) the exercise of
any Option after termination of such relationship with the Corporation shall be
subject to satisfaction of the conditions precedent that the optionholder
refrain from engaging, directly or indirectly, in any activity which is
competitive with any activity of the Corporation or any subsidiary thereof and
from otherwise acting, either prior to or after termination of such employment
or other relationship, in any manner inimical or in any way contrary to the best
interests of the Corporation and that the optionholder furnish to the
Corporation such information with respect to the satisfaction of the foregoing
condition precedent as the Board of Directors shall reasonably request. For
purposes of this Section 12, a “relationship with the Corporation” shall be
limited to any relationship that does not cause the Plan to cease to be an
“employee benefit plan” as defined in Rule 405 of Regulation C under the
Securities Act of 1933. The mere ownership of stock in the Corporation shall not
be deemed to be a “relationship with the Corporation”. The Company may, in its
discretion and subject to any otherwise existing contractual rights of an
optionholder, deliver to any optionholder written notice of the termination of
any relationship of such optionholder with the Corporation, and such the rights
of such optionholder and the Company under this Section 12 shall be determined
by reference to the effective date of termination specified in such notice.

 

Nothing in the Plan or in the Stock Option Agreement shall confer upon any
optionholder the right to continue in the employ of the Corporation or any of
its subsidiaries or in any other relationship thereto or interfere in any way
with the right of the Corporation to terminate such employment or other
relationship at any time.

 

A holder of an Option under the Plan may make written designation of a
beneficiary on forms prescribed by and filed with the Secretary of the
Corporation. Such beneficiary, or if no such designation of any beneficiary has
been made, the legal representative of such optionholder or such other person
entitled thereto as determined by a court of competent jurisdiction, may
exercise, in accordance with and subject to the provisions of this Section 12,
any unterminated and unexpired Option granted to such optionholder to the same
extent that the optionholder

 

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himself could have exercised such Option were he alive or able; provided,
however, that no Option granted under the Plan shall be exercisable for more
shares than the optionholder could have purchased thereunder on the date his
employment by, or other relationship with, the Corporation and its subsidiaries
was terminated.

 

VIII. Adjustment of and Changes in Capitalization. In the event that the
outstanding shares of Common Stock shall be changed in number or class by reason
of split-ups, combinations, mergers, consolidations or recapitalizations, or by
reason of stock dividends, the number or class of shares which thereafter may be
purchased through exercise of Options granted under the Plan, both in the
aggregate and as to any individual, and the number and class of shares then
subject to Options theretofore granted and the price per share payable upon
exercise of such Option shall be adjusted so as to reflect such change, all as
determined by the Board of Directors of the Corporation; provided, however, that
with respect to Options granted to Directors, such determination shall be made
by the Independent Committee. In the event there shall be any other change in
the number or kind of the outstanding shares of Common Stock, or of any stock or
other securities into which such Common Stock shall have been changed, or for
which it shall have been exchanged, then if the Board of Directors shall, in its
sole discretion, determine that such change equitably requires an adjustment in
any Option theretofore granted or which may be granted under the Plan, such
adjustment shall be made in accordance with such determination.

 

Notice of any adjustment shall be given by the Corporation to each holder of an
Option which shall have been so adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all purposes of the
Plan.

 

Fractional shares resulting from any adjustment in Options pursuant to this
Section 13 may be settled in cash or otherwise as the Board of Directors may
determine.

 

IX. Securities Acts Requirements. No Option granted pursuant to the Plan shall
be exercisable in whole or in part, and the Corporation shall not be obligated
to sell any shares of Common Stock subject to any such Option, if such exercise
and sale would, in the opinion of counsel for the Corporation, violate the
Securities Act of 1933 or other Federal or state statutes having similar
requirements, as they may be in effect at that time. Each Option shall be
subject to the further requirement that, at any time that the Board of Directors
or the Committee, as the case may be, shall determine, in their respective
discretion, that the listing, registration or qualification of the shares of
Common Stock subject to such Option under any securities exchange requirements
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such Option or the issuance of shares thereunder, such
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of Directors or the
Committee, as the case may be.

 

As a condition to the issuance of any shares upon exercise of an Option under
the Plan, the Board of Directors or the Committee, as the case may be, may
require the optionholder to furnish a written representation that he is
acquiring the shares for investment and not with a view

 

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to distribution of the shares to the public and a written agreement restricting
the transferability of the shares solely to the Corporation, and may affix a
restrictive legend or legends on the face of the certificate representing such
shares. Such representation, agreement and/or legend shall be required only in
cases where in the opinion of the Board of Directors or the Committee, as the
case may be, and counsel for the Corporation, it is necessary to enable the
Corporation to comply with the provisions of the Securities Act of 1933 or other
Federal or state statutes having similar requirements, and any stockholder who
gives such representation and agreement shall be released from it and the legend
removed at such time as the shares to which they applied are registered or
qualified pursuant to the Securities Act of 1933 or other Federal or state
statutes having similar requirements, or at such other time as, in the opinion
of the Board of Directors or the Committee, as the case may be, and counsel for
the Corporation, the representation and agreement and legend cease to be
necessary to enable the Corporation to comply with the provisions of the
Securities Act of 1933 or other Federal or state statutes having similar
requirements.

 

X. Amendment of the Plan. The Plan may, at any time or from time to time, be
terminated, modified or amended by the stockholders of the Corporation by the
affirmative vote of the holders of a majority of the outstanding shares of the
Corporation’s Common Stock entitled to vote. The Board of Directors of the
Corporation may, insofar as permitted by law, from time to time with respect to
any shares of Common Stock at the time not subject to Options, suspend or
discontinue the Plan or revise or amend it in any respect whatsoever; provided,
however, that, without approval of the stockholders of the Corporation, no such
revision or amendment shall decrease the price at which the Options may be
granted, permit exercise of Options unless full payment is made at the time of
exercise (except as so provided in Section 9 hereof), extend the period during
which Options may be exercised, or change the provisions relating to adjustment
to be made upon changes in capitalization.

 

XI. Changes in Law. Subject to the provisions of Section 15, the Board of
Directors shall have the power to amend the Plan and any outstanding Options
granted thereunder in such respects as the Board of Directors shall, in its sole
discretion, deem advisable in order to incorporate in the Plan or any such
Option any new provision or change designed to comply with or take advantage of
requirements or provisions of the Code or any other statute, or Rules or
Regulations of the Internal Revenue Service or any other Federal or state
governmental agency enacted or promulgated after the adoption of the Plan.

 

XII. Legal Matters. Every right of action by or on behalf of the Corporation or
by any stockholder against any past, present or future member of the Board of
Directors, officer or employee of the Corporation arising out of or in
connection with this Plan shall, irrespective of the place where such action may
be brought and irrespective of the place of residence of any such Director,
officer or employee, cease and be barred by the expiration of three years from
whichever is the later of (a) the date of the act or omission in respect of
which such right of action arises, or (b) the first date upon which there has
been made generally available to stockholders an annual report of the
Corporation and a proxy statement for the Annual Meeting of Stockholders
following the issuance of such annual report, which annual report and proxy
statement alone or together set forth, for the related period, the aggregate
number of shares for which Options were granted; and any and all right of action
by any employee or executive of the

 

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Corporation (past, present or future) against the Corporation arising out of or
in connection with this Plan shall, irrespective of the place where such action
may be brought, cease and be barred by the expiration of three years from the
date of the act or omission in respect of which such right of action arises.

 

This Plan and all determinations made and actions taken pursuant hereto shall be
governed by the law of Delaware, applied without giving effect to any
conflicts-of-law principles, and construed accordingly.

 

As amended and restated through February 1, 2002.

 

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