Document:

HealthSouth Corporation 1995 Stock Option Plan, as amended

 EXHIBIT 10.7.1 
  
 HEALTHSOUTH Corporation 
  
 1995 STOCK OPTION PLAN 
  
 1. Purpose of the Plan. The purpose of the 1995 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 its Directors, executives and other key employees, 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 new Directors, executives and employees 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. It is intended that certain Options issued under the Plan and so designated pursuant to Section 6(c) hereof by the Committee (as defined in Section 5
hereof) shall qualify as “incentive stock options” (hereinafter called “ISOs”) under Section 422(b) of the Internal Revenue Code of 1986, as amended from time to time (hereinafter called the “Code”), and, where
applicable, the terms of the Plan shall be interpreted in accordance with such intention. Other Options may be issued under the Plan and designated by the Committee or such Independent Stock Option Committee, as the case may be, as non-qualified
stock options (hereinafter called “NQSOs”). Any Option issued under the Plan and not expressly designated as an ISO shall be conclusively deemed to be an NQSO. 
  
 2. Participants. Options may be granted under the Plan to Directors of the Corporation and to such executives and key
employees of the Corporation and its subsidiaries as shall be determined by the 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 provided further that no ISO may be granted to any person ineligible to be granted ISOs under
Section 422(b) of the Code. 
  
 3. Term of the Plan.
The Plan shall become effective as of June 6, 1995, subject to the approval by the holders of a majority of the shares of issued and outstanding Common Stock of the Corporation at the 1995 Annual Meeting of Stockholders of the Corporation. The Plan
shall terminate on the earliest of (a) June 5, 2005, (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 June 5, 2005. 
  
 4. Stock Subject to the
Plan. (a) 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 3,500,000 shares plus such number of shares as is added pursuant to Section 4(b),
and the maximum number of shares of Common Stock for which any individual may be granted Options under the Plan during any calendar year is 1,000,000. 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. Shares covered by Options surrendered in
connection with the 

  

 
exercise of other Options pursuant to Section 9(e) shall be deemed, for purposes of this Section 4, to have been exercised, and such shares shall not 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. 
  
 (b) The number of shares of Common Stock for which Options may be granted under the Plan shall automatically increase on the
first trading day of each calendar year during the term of the Plan, beginning with the 1996 calendar year, by an amount equal to 0.9% of the shares of Common Stock outstanding on December 31 of the immediately preceding year. However, such
additional shares shall be available only for the grant of NQSOs under the Plan and not for the grant of ISOs. 
  
 5. Administration of the Plan. With respect to the participation of executives and key employees of the Corporation and its
subsidiaries who are not also Directors of the Corporation, the Plan shall be administered by the Audit and Compensation Committee of the Board of Directors of the Corporation (hereinafter called the “Committee”). 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. The Committee shall determine 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. 
  
 With respect to the participation of non-employee Directors of the Corporation, each non-employee Director shall receive, as an annual grant, an NQSO to
purchase 25,000 shares of Common Stock on the date of adoption of the Plan and in each year thereafter, such Option to be granted at the Annual Meeting of the Board of Directors. The purchase price of the shares of Common Stock covered by each such
NQSO granted to a non-employee Director shall be 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, determined in accordance with Section 7(c) hereof. 
  
 The interpretation and construction of any provision of the Plan or of any
Option granted under it by the Committee shall be final, conclusive and binding upon all parties, including the Corporation, its stockholders and Directors, and the executives and employees of the Corporation and its subsidiaries. No member of the
Board of Directors or the Committee shall be liable to the Corporation, any stockholder, any optionholder or any employee 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. 
  
 The expenses of administering the Plan shall be borne by the Corporation. 
  
 6. Grant of Options. (a) Options may be granted under the Plan 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 Directors, executives and key employees to whom Options shall be granted and as to the number of shares to be covered by such
Options, the Committee shall take into account the duties of the respective Directors, executives and key employees, their present and potential contribution 

  

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to the success of the Corporation, and such other factors as 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 Committee (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 Committee. 
  
 (c) At the time of the grant of each Option under this Plan, the Committee shall determine whether such Option is to be designated as an ISO. If an Option
is to be designated as an ISO, then the provisions of Sections 6(d), 7(b) and 8(b) shall apply to such Options. The Stock Option Agreement relating to the grant of any option designated as an ISO shall reflect such designation. 
  
 (d) Notwithstanding any contrary provision contained in this Agreement, the
aggregate fair market value (determined as of the time each ISO is granted) of the shares of Common Stock with respect to which ISOs issued to any one person hereunder are exercisable for the first time during any calendar year shall not exceed
$100,000. 
  
 7. Option Price. (a) 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 Committee. 
  
 (b) Notwithstanding any
contrary provision contained in Section 7(a) hereof, no Option granted to any person who, at the time of such grant, owns, taking into account the attribution rules of Section 424(d) of the Code, stock possessing more than 10% of the total combined
voting power of all classes of the Corporation’s stock or of the stock of any of its corporate subsidiaries, may be designated as an ISO unless at the time of such grant the purchase price of the shares of Common Stock covered by such Option is
at least 110% of the fair market value (but in no event less than the par value) of such shares. 
  
 (c) 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 Automated Quotation system, then such NASDAQ quote) immediately prior to the commencement of the meeting of the Committee
at 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 last reported sale price at which the shares of Common Stock were traded on such
securities exchange or exchanges immediately prior to the commencement of the meeting of the Committee at which the Option is granted, or if no sale of the Common Stock was made on any national securities exchange on such date, then the closing
price per share of the Common Stock on such securities exchange or exchanges on the next preceding day on which there was a sale of the Common Stock. 
  

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 (d) The exercise price of any outstanding Options shall not be reduced during the term of such Options
except by reason of an adjustment pursuant to Section 13 hereof, nor shall the Committee or the Board of Directors cancel outstanding Options and reissue new Options at a lower exercise price in substitution for the canceled Options. 
  
 8. Term of Options. (a) The expiration date of an Option
granted under the Plan shall be as determined by the 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. 
  
 (b) Notwithstanding any contrary provision contained in Section 8(a) hereof,
no Option granted to any person who, at the time of such grant, owns, taking into account the attribution rules of Section 424(d) of the Code, stock possessing more than 10% of the total combined voting power of all classes of the Corporation’s
stock or of the stock of any of its corporate subsidiaries, may be designated as an ISO unless by its terms each such Option shall expire not more than five years after the date such Option was granted. 
  
 9. Exercise of Options. (a) Each Option shall become
exercisable in whole or in part or in installments at such time or times as 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 
  
 (i) 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 
  
 (ii) individuals who, as of June 6, 1995, 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 
  
 (iii) approval by the stockholders of the Company of a reorganization, merger, consolidation or share exchange, in each case with respect
to which persons who 

  

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were the stockholders of the Company immediately prior to such reorganization, merger, consolidation or share exchange do not, immediately thereafter, own
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 Sections 9(d) and 9(e)
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(c) 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) With respect to Directors and officers of the Corporation who are subject to reporting requirements under Section 16(a) of the Securities Exchange Act
of 1934, payment for shares purchased upon exercise of any Option granted hereunder may be made by surrender of outstanding Options issued under this Plan or any other stock option plan of the Corporation having a Spread (as defined below) equal to
the exercise price of the Options sought to be exercised. For purposes of this Section 9(e), the “Spread” with respect to any unexercised Option shall be equal to (i) the average price per share of Common Stock on the date of exercise, as
determined by the Corporation from any commercially available reporting service reflecting trading of the Common Stock on a national securities exchange, on the National Association of Securities Dealers Automated Quotation System, or in the over
the counter market, as applicable, less (ii) the exercise price of the surrender of the Option. All Options so surrendered will be deemed to have been exercised by the optionholder. Such surrender shall be evidenced in a form satisfactory to the
Secretary of the Corporation. 
  
 10. 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. 
  
 11. 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. 
  

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 12. 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 employment by, or other 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 employment by, or
other 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 employment by, or other 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 employment or other 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 employment or other relationship with the Corporation; and (c) the exercise of
any Option after termination of such employment or other 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”. 
  
 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 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 that the optionholder could have purchased thereunder on the date his employment by, or other relationship with, the Corporation and its subsidiaries
was terminated. 
  
 13. 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 therefore granted and the price per share
payable upon exercise of such Option shall be adjusted so as to reflect such 

  

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change, all as determined by the Board of Directors of the Corporation. 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. 
  
 14. 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 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 may 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. 

 
 15. 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 

  

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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 increase the number of shares subject to the Plan, 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. 

 
 16. 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. 
  
 17. Legal Matters. Every right of action by or on behalf of the Corporation or by any stock holder 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 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. 
  

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 AMENDMENT ADOPTED BY 
 BOARD OF DIRECTORS OF 
 HEALTHSOUTH Corporation 
  
 August 15, 1996 
  
 RESOLVED, that the provisions of the Corporation’s 1984 Incentive Stock
Option Plan 1988 Non-Qualified Stock Option Plan, 1989 Stock Option Plan, 1990 Stock Option Plan, 1991 Stock Option Plan, 1992 Stock Option Plan, 1993 Stock Option Plan 1993 Consultants’ Stock Option Plan and 1995 Stock Option Plan relating to
the transferability of options are hereby amended by substituting the following in lieu of the indicated section thereof: 
  
 Nontransferability of Options. (a) 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. 
  
 (b) 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. 
  
 (c) 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. 
  

 EXHIBIT A 
  

HEALTHSOUTH CORPORATION 
  
 1995 STOCK OPTION PLAN 
  
 Amendment 
  
 HealthSouth
Corporation, a Delaware corporation (the “Company”), having heretofore adopted the 1995 Stock Option Plan (the “Plan”), effective June 6, 1995 and having reserved the right under Section 15 thereof to amend the Plan, does hereby
amend Section 12 of the Plan such that Section 12 shall commence with the following sentence: 
  
 “Notwithstanding any provision in this Section 12 to the contrary, the Committee may, in its sole discretion, determine the exercise period of any Option, provided that in no event may the term of any Option
exceed ten (10) years.”Form of Non Qualified Stock Option Agreement

 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

	  	 Percent of Shares
 Subject to Option
 Purchasable

	 
	 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	 	

	 	 	 Its
	 	  

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

			
	
	___________________________________________
	  
 __________________,
Grantee

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]