EXHIBIT 10.7.2

 

HEALTHSOUTH Corporation

 

NON-QUALIFIED STOCK OPTION AGREEMENT

(Pursuant to the 1995 Stock Option Plan)

 

OPTION granted in Birmingham, Alabama on                      (the “Date of
Grant”), by HEALTHSOUTH Corporation, a Delaware corporation (the “Corporation”),
to                      (the “Grantee”).

 

1. GRANT OF OPTION. The Corporation hereby grants to the Grantee the irrevocable
Option to purchase, on the terms and subject to the conditions herein set forth,
up to                      fully paid and nonassessable shares of the
Corporation’s Common Stock, par value $.01 per share, at the option price of
                     per share, being not less than 100% of the fair market
value of such Common Stock on the Date of Grant.

 

The Option is granted pursuant to the Corporation’s 1995 Stock Option Plan (the
“Plan”), a copy of which is attached hereto. The Option is subject in its
entirety to all the applicable provisions of the Plan as in effect on the Date
of Grant, which are hereby incorporated herein by reference.

 

2. PERIOD OF OPTION. Except as otherwise provided in the Plan, the Option is
cumulatively exercisable in installments in accordance with the following
schedule:

 

Year Beginning

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Percent of Shares

Subject to Option

Purchasable

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2004

   None  

2005

   33.3 %

2006

   33.3 %

2007

   33.3 %

2008

   100 %

 

The Option may be exercised from time to time during the option period as to the
total number of shares allowable under this Section 2, or any lesser amount
thereof. The Option is not exercisable before                      or after
                    .

 

NOTWITHSTANDING THE FOREGOING, THE OPTION MAY NOT BE EXERCISED UNTIL THE
CORPORATION COMPLIES WITH ITS REPORTING OBLIGATIONS UNDER THE FEDERAL SECURITIES
LAWS.

 

3. METHOD OF EXERCISE OF OPTION. The Option may be exercised in whole or in part
by the Grantee’s giving written notice, specifying the number of shares which
the Grantee elects to purchase and the date on which such purchase is to be made
to the Corporation or its designated broker.

 

The Grantee hereby confirms that he or she has been informed by the Corporation
that the Securities and Exchange Commission (the “SEC”) and the Department of
Justice have commenced investigations into the Corporation’s financial reporting
and related activity and, as a result, the Corporation has cautioned investors
not to rely on the corporation’s prior financial statements. In addition, the
Corporation has not filed any financial statements with the SEC since the third
quarter of 2002 and has retained PricewaterhouseCoopers LLP to conduct a
forensic review of the Corporation’s financial records. The Corporation is in
the process of reconstructing its financial records, and currently estimates
that it will not be in a position to file financial statements with the SEC
until 2005. Since the issuance of shares of the Corporation’s Common Stock upon
exercise of the Option must be registered under the Securities Act of 1933,
unless an exemption is available, THE OPTION MAY NOT BE EXERCISED UNTIL THE
CORPORATION COMPLIES WITH ITS REPORTING OBLIGATIONS UNDER THE FEDERAL SECURITIES
LAWS.

 

4. TRANSFERABILITY. The Option is not transferable otherwise than by will or
pursuant to the laws of descent and distribution, and is exercisable during the
Grantee’s lifetime only by the Grantee.

 

5. BINDING AGREEMENT. This Stock Option Agreement shall be binding upon and
shall inure to the benefit of any successor or assign of the Corporation, and,
to the extent herein provided, shall be binding upon and inure to the benefit of
the Grantee’s beneficiary or legal representatives, as the case may be.

 

6. ENTIRE AGREEMENT. This Stock Option Agreement contains the entire agreement
of the parties with respect to the Option granted hereby and may not be changed
orally but only by an instrument in writing signed by the party against whom
enforcement of any change, modification or extension is sought.

 

If the foregoing is in accordance with your understanding and approved by you.
please so confirm by signing and returning the duplicate of this Stock Option
Agreement enclosed for that purpose.

 

HEALTHSOUTH Corporation

By  

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Its

 

 

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The foregoing is in accordance with my understanding and is hereby confirmed and
agreed to as of the Date of Grant.

 

___________________________________________

 

__________________, Grantee