<PAGE>
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
Registration Statement Under
The Securities Act of 1933
--------------------
HEALTHSOUTH Corporation
(Exact Name of Registrant as Specified in its Charter)
--------------------
Delaware 63-0860407
(State or Other Jurisdiction (I.R.S. Employer Identification Number)
of Incorporation or Organization)
Two Perimeter Park South, Birmingham, Alabama 35243
(Address of Principal Executive Offices) (Zip Code)
SURGICAL HEALTH CORPORATION 1992 STOCK OPTION PLAN
SURGICAL HEALTH CORPORATION 1993 STOCK OPTION PLAN
SURGICAL HEALTH CORPORATION 1994 STOCK OPTION PLAN
HERITAGE SURGICAL CORPORATION 1992 STOCK OPTION PLAN
HERITAGE SURGICAL CORPORATION 1993 STOCK OPTION PLAN
(Full Title of the Plan)
RICHARD M. SCRUSHY Copies to:
Chairman of the Board
and Chief Executive Officer WILLIAM W. HORTON
HEALTHSOUTH Corporation Group Vice President--Legal Services
Two Perimeter Park South, Suite 224W HEALTHSOUTH Corporation
Birmingham, Alabama 35243 Two Perimeter Park South, Suite 224W
(Name and address of agent for service) Birmingham, Alabama 35243
(205) 967-7116 (205) 967-7116
(Telephone number, including area code,
of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Title of Proposed Maximum Proposed Maximum Amount of
Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered (1) per Share (2) Price (2) Fee (2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, Par 1,184,702 shares $17.13 $20,293,946 $6,997.92
Value $.01 Per Share
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</TABLE>
(1) The amount being registered represents 1,184,702 authorized and
unissued shares reserved for issuance under the Plans.
(2) In accordance with Rule 457(h) promulgated under the Securities Act of
1933, these calculations are based upon a price of $17.13 per share, which
represents the average of the high and low prices for the shares as
reported on the New York Stock Exchange on June 13, 1995.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
There are hereby incorporated by reference in this Registration
Statement, and specifically made a part hereof, the following documents
heretofore filed by HEALTHSOUTH Corporation (the "Company") with the Securities
and Exchange Commission (the "Commission"), pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act"):
1. The Company's Registration Statement on Form S-4
(Registration No. 33-57987), as amended (relating to the acquisition by
the Company of Surgical Health Corporation).
2. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, as amended.
3. The Company's Proxy Statement used in connection with the
solicitation of proxies for the 1995 Annual Meeting of Stockholders,
held June 6, 1995.
4. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995.
5. The description of the Company's capital stock contained
in the Company's Registration Statement on Form 8-A filed on August 26,
1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the effective date of this Registration
Statement and prior to the filing of a post-effective amendment indicating that
all the securities offered hereby have been sold, or deregistering all such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
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Item 5. Interests of Named Experts and Counsel.
The legality of the issuance of the Common Stock offered pursuant to
this Registration Statement will be passed upon for the Company by Haskell
Slaughter Young & Johnston, Professional Association, 1200 AmSouth/Harbert
Plaza, 1901 Sixth Avenue North, Birmingham, Alabama 35203. At June 14, 1995
attorneys with the firm of Haskell Slaughter Young & Johnston, Professional
Association, owned beneficially an aggregate of 14,600 shares and held
currently-exercisable options to acquire an additional 15,000 shares of the
Company's Common Stock.
Item 6. Indemnification of Directors and Officers.
In June 1986, Delaware enacted legislation which authorized
corporations to eliminate the personal liability of directors to corporations
and their stockholders for monetary damages for breach or alleged breach of
directors' fiduciary "duty of care". Under prior Delaware law, directors were
accountable to corporations and their stockholders for monetary damages for
conduct constituting gross negligence in the exercise of their duty of care.
Although the 1986 statute does not change directors' duty of care, it enables
corporations to limit available relief to equitable remedies such as injunction
or rescission. Numerous complaints, not involving the Company, alleging breach
of directors' duty of care have been filed in connection with corporate mergers
and acquisitions, and the 1986 statute limits available remedies of stockholders
in connection with these transactions as well as in other circumstances. The
1986 statute has no effect on a director's liability for: (a) breach of the
director's duty of loyalty; (b) acts or omissions not in good faith or involving
intentional misconduct or knowing violations of law; (c) a corporation's illegal
payment of dividends; and (d) approval of any transaction from which the
director derives an improper personal benefit.
Pursuant to this Delaware statute, the Company has included in its
Restated Certificate of Incorporation, which became effective on October 1,
1986, a provision to eliminate the personal liability of its Directors for
monetary damages for breach or alleged breach of their duty of care. In
addition, the Company's Bylaws provide that the Company shall indemnify its
Directors and officers to the full extent permitted by Delaware law, including
in circumstances in which indemnification is otherwise discretionary under
Delaware law. The Company believes that these provisions are necessary to
attract and retain qualified persons as Directors and officers.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Company where indemnification will be required or
permitted. The Company is not aware of any threatened litigation or proceeding
which may result in a claim for indemnification by any Director or officer.
Item 7. Exemption from Registration Claimed.
Not applicable.
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<PAGE>
Item 8. Exhibits.
Exhibits (numbered in accordance with Item 601 of Regulation S-K).
Exhibit No. Exhibit
4(a) Surgical Health Corporation 1992 Stock Option Plan, filed
as Exhibit 10(aa) to Surgical Health Corporation's
Registration Statement on Form S-4 (Registration No.
33-70582), is hereby incorporated herein by reference.
4(b) Surgical Health Corporation 1993 Stock Option Plan, filed
as Exhibit 10(bb) to Surgical Health Corporation's
Registration Statement on Form S-4 (Registration No.
33-70582), is hereby incorporated herein by reference.
4(c) Surgical Health Corporation 1994 Stock Option Plan, filed
as Exhibit 10(pp) to Surgical Health Corporation's
Quarterly Report on Form 10-Q for the Quarter Ended
September 30, 1994, is hereby incorporated herein by
reference.
4(d) Heritage Surgical Corporation 1992 Stock Option Plan.
4(e) Heritage Surgical Corporation 1993 Stock Option Plan.
5 Opinion of Haskell Slaughter Young & Johnston,
Professional Association.
23(a) Consent of Ernst & Young LLP.
23(b) Consent of Haskell Slaughter Young & Johnston,
Professional Association is contained within Opinion of
Counsel included as Exhibit 5.
24 Powers of Attorney (See Signature Page).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
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<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a Director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Birmingham, State of Alabama, on June 14, 1995.
HEALTHSOUTH Corporation
By RICHARD M. SCRUSHY
----------------------------------
Richard M. Scrushy
Chairman of the Board
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose name appears
below constitutes and appoints Richard M. Scrushy and Aaron Beam, Jr., and each
of them, his attorney-in-fact, with power of substitution for him or her in any
and all capacities, to sign any amendments, supplements or other instruments he
or she deems necessary or appropriate, and to file the same, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitute may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Capacity Date
RICHARD M. SCRUSHY Chairman of the Board June 14, 1995
------------------ and Chief Executive Officer
(Richard M. Scrushy) and Director
AARON BEAM, JR. Executive Vice President and June 14, 1995
--------------- Chief Financial Officer and Director
(Aaron Beam, Jr.) (Principal Financial Officer)
WILLIAM T. OWENS Senior Vice President and Controller June 14, 1995
---------------- (Principal Accounting Officer)
(William T. Owens)
RICHARD F. CELESTE Director June 14, 1995
------------------
(Richard F. Celeste)
JOHN S. CHAMBERLIN Director June 14, 1995
------------------
(John S. Chamberlin)
C. SAGE GIVENS Director June 14, 1995
--------------
(C. Sage Givens)
CHARLES W. NEWHALL III Director June 14, 1995
----------------------
(Charles W. Newhall III)
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GEORGE H. STRONG Director June 14, 1995
----------------
(George H. Strong)
PHILLIP C. WATKINS Director June 14, 1995
------------------
(Phillip C. Watkins)
JAMES P. BENNETT Director June 14, 1995
----------------
(James P. Bennett)
LARRY R. HOUSE Director June 14, 1995
--------------
(Larry R. House)
ANTHONY J. TANNER Director June 14, 1995
-----------------
(Anthony J. Tanner)
P. DARYL BROWN Director June 14, 1995
--------------
(P. Daryl Brown)
II-6
<PAGE>
EXHIBIT 4(d)
HERITAGE SURGICAL CORPORATION
1992 STOCK OPTION PLAN
ARTICLE 1
PURPOSE OF THE PLAN
This 1992 Stock Option Plan (hereinafter referred to as the "Plan")
dated May 1, 1992, for Heritage Surgical Corporation (hereinafter referred to as
the "Company") is intended to advance the interests of the Company by providing
officers and other key employees who have substantial responsibility for the
direction and management of the Company with additional incentive for them to
promote the success of the Company's business, to provide such employees with a
proprietary interest in the success of the Company, to maintain competitive
compensation levels, and to provide incentive to remain in the continuous employ
of the Company.
ARTICLE 2
ADMINISTRATION OF THE PLAN
2.1 Administrator. The Board of Directors of the Company (hereinafter
referred to as the "Board") shall appoint a Stock Option Plan Administrator
(hereinafter referred to as the "Administrator"), who shall have authority,
subject to the provisions of the Plan, in his discretion: (i) to determine the
employees of the Company (from among the class of employees eligible under
Article 3 hereof to receive options under the Plan) to whom options shall be
granted; (ii) to determine the time or times at which options shall be granted;
(iii) to establish the option price of the shares subject to each option, which
price shall be set in accordance with the provisions of Article 5; (iv) to
determine, subject to Article 7 hereof, the time or times when each option shall
become exercisable and the duration of the exercise period; (v) to issue to each
option recipient a letter notifying the employee of such receipt along with
information concerning the duration of time and manner in which the option is
exercisable; and (vi) to interpret the Plan and to prescribe, amend, and rescind
rules and regulations relating to it. The interpretation and construction of any
provision of the Plan by the Administrator shall be final and conclusive.
2.2 Stock Option Plan Committee. The Board of Directors, at its
discretion, may also appoint two additional individuals who, with the
Administrator, shall serve as the Stock Option Plan Committee (the "Committee").
If such a Committee is established by the Board, then all decisions delegated to
the Administrator in Section 2.1 shall be made by the Committee by majority vote
at a meeting duly called and held. Committee members other than the
Administrator shall be appointed to serve a one-year term, but may serve an
<PAGE>
unlimited number of terms on the Committee. The Committee may appoint a
secretary to keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable. The
Committee may consult with counsel, who may be counsel to the Company.
2.3 Indemnity of Committee Members. Any individual who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of the corporation) by
reason of the fact that he is or was serving as Administrator or as a Committee
member shall be indemnified by the Company against expenses (including
reasonable attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith for the purpose that he reasonably believed
to be in the best interest of the Company and, in criminal actions or
proceedings, in addition, had no reasonable cause to believe that his conduct
was unlawful.
2.4 Types of Awards Under Plan. Options granted under the plan shall be
designated as Incentive Stock Options, described in Article 4, or Non-Qualified
Stock Options, described in Article 5.
2.5 Eligible Employees. Options may be granted only to persons who are
key employees of the Company. The term "key employees" as such term is used in
the Plan shall include officers, directors, executives, supervisory personnel,
as well as other employees of the Company. The Administrator shall issue to each
option recipient ("Optionee") a letter notifying the employee of such receipt
along with information concerning the type of option granted and the duration of
time and manner in which the option is exercisable.
ARTICLE 3
SHARES OF STOCK SUBJECT TO THE PLAN
There will be reserved for use upon the exercise of options to be
granted from time to time under the Plan (subject to the provisions of Article
11 hereof) an aggregate of 700,000 shares of the no par value Common Stock
(hereinafter called the "Common Stock") of the Company, which shares may be in
whole or in part, as the Board shall from time to time determine, authorized but
unissued shares of the Common Stock or issued shares of the Common Stock that
shall have been reacquired by the Company. Any shares subject to an option under
the Plan, which option for any reason expires or is terminated unexercised as to
such shares, may again be subjected to an option under the Plan. The Company
shall not be required to issue or deliver any certificate for shares of its
stock purchased upon the exercise of any part of an option before (i) the
admission of such shares to listing on any stock exchange on which the stock of
the Company may then be listed, (ii) completion of any registration or other
qualification of such shares under any state or federal law or ruling or
regulation of any governmental regulatory body that the Company shall, in its
sole discretion, determine is necessary or advisable, and (iii) the Board shall
have been advised by counsel that compliance with all applicable legal
requirements has been satisfied.
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<PAGE>
ARTICLE 4
INCENTIVE STOCK OPTIONS
4.1 Award of Incentive Stock Options. The Administrator may, from time
to time and subject to the provisions of the Plan and such other conditions as
the Administrator may prescribe, grant to any Eligible Employee one or more
Incentive Stock Options ("ISO") to purchase the number of shares of common stock
of the Company designated by the Administrator. The Administrator may specify a
schedule that shall determine the dates upon which the Optionee shall become
vested in his right to exercise the option granted. It is intended that such
options issued as ISOs under the Plan will qualify as ISOs under ss. 422 of the
Internal Revenue Code of 1986, as amended or replaced from time to time
(hereinafter referred to as the "Code"), and the terms of the Plan shall be
interpreted in accordance with this intention.
4.2 Price Limitations on Incentive Stock Options. The option price for
an option issued as an ISO shall not be less than 100% of the fair market value
of the stock (as determined in Article 6 hereof) on the date the option is
granted.
4.3 Maximum Amount of ISO Grant. The aggregate fair market value of the
stock (as determined in Article 6 hereof) for which any employee may exercise
for the first time options designated as ISOs in any calendar year (under this
or any other stock option plan established by the Company) shall not exceed
$100,000.
4.4 Term and Exercise. Each ISO shall be exercisable by its terms, and
may be exercised at any time thereafter during a period of ten (10) years from
the date of grant (the "Option Term"). No ISO shall be exercisable after the
expiration of the Option Term.
4.5 Additional Price and Term Limitations for 10% Shareholders. No
Incentive Stock Option ("ISO") granted to any employee who at the time of such
grant owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company may be designated as an ISO unless at the
time of such grant the option price is fixed at not less than 110% of the fair
market value of the stock (as determined in Article 6 hereof) subject to the
option, and exercise of such option is prohibited by its terms after the
expiration of five (5) years from the date such option is granted.
ARTICLE 5
NON-QUALIFIED STOCK OPTIONS
5.1 Award of Non-Qualified Stock Options. The Administrator may, from
time to time and subject to the provisions of the Plan and such other conditions
as the Administrator may prescribe, grant to any Eligible Employee one or more
Non-Qualified Stock Options ("NSO") to purchase a designated number of shares of
Common Stock at a specified
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<PAGE>
option price. The Administrator may specify a schedule that shall determine the
dates upon which the Optionee shall become vested in his right to exercise the
option granted.
5.2 Stock Option Price. The option price of a NSO shall be the fair
market value of the stock at the date of grant, provided that the Administrator
may set such price at a different value at its discretion.
5.3 Term and Exercise. Each NSO shall be exercisable by its terms, and
may be exercised at any time thereafter during a period of ten (10) years from
the date of grant (the "Option Term"). No NSO shall be exercisable after the
expiration of the Option Term.
ARTICLE 6
DETERMINATION OF FAIR MARKET VALUE
For purposes of this Plan, the "fair market value" of the Company's
Common Stock shall be determined as of the designated date by the public
accounting firm currently serving as the Company's auditors, provided such firm
is qualified to give opinions in the area of stock valuation, or by another
qualified public accounting firm qualified to give such opinions selected by the
Board. Such determination shall be set forth in a written opinion prepared by
the public accounting firm and delivered to the Administrator.
ARTICLE 7
DILUTION OR OTHER AGREEMENT
In the event that additional shares of Common Stock are issued pursuant
to a stock split or a stock dividend, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be increased
proportionately with no increase in the total purchase price of the shares then
so covered, and the number of shares of Common Stock reserved for the purpose of
the Plan shall be increased by the same proportion. In the event that the shares
of Common Stock of the Company from time to time issued and outstanding are
reduced by a reverse stock split or stock redemption, the number of shares of
Common Stock then covered by each outstanding option granted hereunder shall be
reduced proportionately with no reduction in the total price of the shares then
so covered, and the number of shares of Common Stock reserved for the purposes
of the Plan shall be reduced by the same proportion. In the event that the
Company should transfer assets to another corporation and distribute the stock
of such other corporation without the surrender of Common Stock of the Company,
and if such distribution is not taxable as a dividend and no gain or loss is
recognized by reason of ss. 355 of the Code, or some similar section, then the
total purchase price of the shares covered by each outstanding option shall be
reduced by an amount that bears the same ratio to the total purchase price then
in effect as the market value of the stock distributed in respect of a share of
the Common Stock of the Company, immediately following the distribution, bears
to the aggregate of the market value at such
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<PAGE>
time of a share of Common Stock of the Company and the stock distributed in
respect thereof. All such adjustments shall be made by the Administrator, whose
determination upon the same shall be final and binding upon the Optionee. No
fractional shares shall be issued, and any fractional shares resulting from the
computations pursuant to this Article 6 shall be eliminated from the respective
option. No adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional Common Stock or other
securities.
ARTICLE 8
CERTAIN LIMITATIONS ON RIGHT TO EXERCISE
8.1 Employment Requirement and Holding Period.
8.1.1 Unless the option granted to an Optionee includes a
specific vesting schedule, each option granted under this Plan shall be
fully exercisable after five (5) years of continuous employment of the
Optionee with the Company immediately following the date the option is
granted, with 20% of the total options granted becoming exercisable on
the anniversary date of the option grant each year, until all options
are fully vested.
8.1.2 No option may be exercised unless the Optionee is, at
the time of such exercise, in the employ of the Company and shall have
been continuously so employed since the grant of his option, except as
provided in Section 10 hereof. Absence or leave approved by the
management of the Company shall not be considered an interruption of
employment for any purpose under the Plan.
8.1.3 Any option in which the Optionee is fully vested shall
be exercisable in full, or in any increment of at least 1,000 shares,
only if the Optionee chooses to exercise such option and to pay for
such option in the manner set forth in Section 8.2 hereof (i.e., with
cash, a certified bank check, shares of the Company's Common Stock, or
any combination of the foregoing in an amount equal to the full option
price of the shares being purchased).
8.1.4 The Optionee shall not dispose of stock received
pursuant to his exercise of an ISO at any time during the one (1) year
period following the date of transfer of such share to the Optionee,
except as provided in Section 10.3 hereof.
8.1.5 Notwithstanding the foregoing, the Administrator may, in
its sole discretion, (a) prescribe longer time periods and additional
requirements with respect to the exercise of an option and (b)
terminate in whole or in part such portion of any option that has not
yet become exercisable at such time if the Administrator determines
that the Optionee is not performing satisfactorily the
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<PAGE>
duties to which he was assigned on the date the option was granted or
duties of at least equal responsibility.
8.2 Payment. The exercise of any option shall be contingent upon
receipt by the Company of cash, a certified bank check to its order, shares of
the Company's Common Stock, or any combination of the foregoing in an amount
equal to the full option price of the shares being purchased. For purposes of
this paragraph, shares of the Company's Common Stock that are delivered in
payment of the option price shall be valued at their fair market value (as
determined in Article 6 hereof) applied as of the date of the exercise of the
option.
8.3 Status of a Stockholder. No Optionee or his legal representative,
legatees, or distributees, as the case may be, will be, or will be deemed to be,
a holder of any share subject to an option unless and until certificates for
such shares are issued to him or them under the terms of the Plan. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
8.4 Nonexercisable. In no event may an option be exercised after the
expiration of its term.
8.5 Reduction in Reserved Stock. Exercise of an option shall result in
a decrease in the number of shares of Common Stock that thereafter may be
available under the Plan by the number of shares as to which the option is
exercised.
ARTICLE 9
ASSIGNABILITY
Each option granted under this Plan shall be transferable only by will
or the laws of descent and distribution and shall be exercisable, during his
lifetime, only by the employee to whom the option is granted. Except as
permitted by the preceding sentence, no option granted under the Plan or any of
the rights and privileges thereby conferred shall be transferred, assigned,
pledged, or hypothecated in any way (whether by option of law or otherwise), and
no such option, right, or privilege shall be subject to execution, attachment,
or similar process. Upon any attempt so to transfer, assign, pledge,
hypothecate, or otherwise dispose of the options, or of any right or privilege
conferred thereby, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option, right or privilege, the option
and such rights and privileges shall immediately become null and void.
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<PAGE>
ARTICLE 10
EFFECT OF TERMINATION OF EMPLOYMENT,
DEATH OR DISABILITY
10.1 Termination of Employment.
10.1.1 In the event of the termination of employment of an
Optionee during the period after the date of issuance of an option to
him by reason of voluntary separation on the part of the Optionee
without the consent of the Company, any unexercised option or options
theretofore granted to him under this Plan shall terminate as of the
date of separation.
10.1.2 Notwithstanding the restrictions of subparagraph 8.1.2
hereof, in the event of the termination of employment of an Optionee by
reason discharge by the Company anytime after the date of issuance of
an option to him, Optionee shall have the right to exercise any options
granted to him under this Plan which have not expired and in which he
is vested within 30 days after the effective date of his discharge, at
which time all options issued to him under the Plan shall terminate.
10.2 Retirement. Notwithstanding the restrictions of subparagraph 8.1.2
hereof, if the employment of an Optionee shall be terminated by the Company
because of the Optionee's retirement at his Retirement Date (as defined in
Section 10.5 hereof), the Optionee shall have the right to exercise such option
or options held by him, to the extent that such options have not expired, at any
time within thirty (30) days after such retirement.
10.3 Deaths. In the event that an Optionee shall die while employed by
the Company or shall die within thirty (30) days after retirement at his
Retirement Date (as defined in Section 10.5 hereof), any option or options
granted to him under this Plan and not theretofore exercised by him or expired
shall be exercisable to the extent the Optionee had a vested right in such
options at the time of his death by the estate of the Optionee or by any person
who acquired such option or options by bequest or inheritance from the Optionee
at any time within one (1) year after the death of the Optionee. References
hereinabove to the Optionee shall be deemed to include any person entitled to
exercise the option after the death of the Optionee under the terms of this
Plan.
10.4 Permanent and Total Disability. In the event of the termination of
employment of an Optionee by reason of the Optionee's permanent and total
disability, such Optionee shall have the right, notwithstanding the provisions
of subparagraph 8.1.2 hereof, to exercise all vested options held by him to the
extent such options have not previously expired or been exercised, at any time
within one year after such termination. The term "permanent and total
disability" shall, for the purposes of this Plan, be defined in the same manner
as such term is defined in ss. 22(e)(3) of the Code.
10.5 Retirement Date. For the purposes of this Plan, "Retirement Date"
shall mean any date an employee is otherwise entitled to retire under the
Company's retirement
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plans and shall include normal retirement at age sixty-five (65), early
retirement at age sixtytwo (62), and retirement at age sixty (60) after thirty
(30) years of service if such retirement options have been adopted by the
Company.
ARTICLE 11
LISTING AND REGISTRATION OF SHARES
Each option shall be subject to the requirement that if at any time the
Administrator shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any securities
exchange or under any state or federal 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 issue or purchase of shares
thereunder, such option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the
Administrator.
ARTICLE 12
EXPIRATION AND TERMINATION OF THE PLAN
Options may be granted under the Plan at any time or from time to time
as long as the total number of shares optioned or purchased under this Plan does
not exceed 700,000 shares of Common Stock. The Plan may be abandoned or
terminated at any time by the Board except with respect to any options then
outstanding under the Plan. No option shall be granted pursuant to the plan
after March 14, 2003.
ARTICLE 13
AMENDMENT OF PLAN
The Board may at any time and from time to time modify and amend the
Plan in any respect; provided, however, that no such amendment shall: (i)
increase (except in accordance with Article 7) the maximum number of shares for
which options may be granted under the Plan either in the aggregate or to any
individual employee; or (ii) reduce (except in accordance with Article 7) the
minimum option prices that may be established under the Plan; or (iii) extend
the period or periods during which options may be granted or exercised; or (iv)
change the provisions relating to the determination of employees to whom options
shall be granted and the number of shares to be covered by such options; or (v)
change the provisions relating to adjustments to be made upon changes in
capitalization; or (vi) change the method for the selection of the Administrator
or the Committee as provided by Article
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<PAGE>
2 hereof. The termination or any modification or amendment of the Plan shall
not, without the consent of an employee, affect his rights under an option
theretofore granted to him.
ARTICLE 14
APPLICABILITY OF PLAN TO
OUTSTANDING STOCK OPTIONS
This Plan shall not affect the terms and conditions of any incentive
stock options or nonqualified stock options granted to any employee of the
Company under any other plan relating to nonqualified stock options; nor shall
it affect any of the rights of any employee to whom such an incentive stock
option or nonqualified stock option was granted.
ARTICLE 15
INTERPRETATION
The terms of this Plan concerning the issue of ISOs are subject to all
present and future regulations and rulings of the Secretary of the Treasury or
his delegate relating to the qualification of ISOs under ss. 422 of the Code. If
any provision of the Plan applicable to ISOs conflicts with any such regulation
or ruling, then that provision of the Plan shall be void and of no effect.
ARTICLE 16
MISCELLANEOUS
16.1 Optionees' Rights. Nothing contained in this Plan shall be deemed
to give any Optionee the right to be retained in the service of the Company or
to interfere with the right of the Company to discharge any Optionee or Company
at any time regardless of the effect which such discharge shall have upon him as
an Optionee.
16.2 Construction of Agreement. This Plan shall be construed and
enforced according to the Code and the laws of the State of Tennessee, other
than its laws respecting choice of law, to the extent not preempted by the Code.
16.3 Gender and Number. Wherever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where
they would so apply.
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<PAGE>
16.4 Headings. The headings and subheadings of this Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
ARTICLE 17
EFFECTIVE DATE OF PLAN
This Plan shall become effect on May 1, 1992, upon the adoption of the
Plan by the Board and the approval of 51% of the shareholders within twelve (12)
months before or after the adoption of the Plan by the Board.
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<PAGE>
EXHIBIT 4(e)
HERITAGE SURGICAL CORPORATION
1993 STOCK OPTION PLAN
ARTICLE 1
PURPOSE OF THE PLAN
This 1993 Stock Option Plan (hereinafter referred to as the "Plan")
dated March 15, 1993, for Heritage Surgical Corporation (hereinafter referred to
as the "Company") is intended to advance the interests of the Company by
providing officers and other key employees who have substantial responsibility
for the direction and management of the Company with additional incentive for
them to promote the success of the Company's business, to provide such employees
with a proprietary interest in the success of the Company, to maintain
competitive compensation levels, and to provide incentive to remain in the
continuous employ of the Company.
ARTICLE 2
ADMINISTRATION OF THE PLAN
2.1 Administrator. The Board of Directors of the Company (hereinafter
referred to as the "Board") shall appoint a Stock Option Plan Administrator
(hereinafter referred to as the "Administrator"), who shall have authority,
subject to the provisions of the Plan, in his discretion: (i) to determine the
employees of the Company (from among the class of employees eligible under
Article 3 hereof to receive options under the Plan) to whom options shall be
granted; (ii) to determine the time or times at which options shall be granted;
(iii) to establish the option price of the shares subject to each option, which
price shall be set in accordance with the provisions of Article 5; (iv) to
determine, subject to Article 7 hereof, the time or times when each option shall
become exercisable and the duration of the exercise period; (v) to issue to each
option recipient a letter notifying the employee of such receipt along with
information concerning the duration of time and manner in which the option is
exercisable; and (vi) to interpret the Plan and to prescribe, amend, and rescind
rules and regulations relating to it. The interpretation and construction of any
provision of the Plan by the Administrator shall be final and conclusive.
2.2 Stock Option Plan Committee. The Board of Directors, at its
discretion, may also appoint two additional individuals who, with the
Administrator, shall serve as the Stock Option Plan Committee (the "Committee").
If such a Committee is established by the Board, then all decisions delegated to
the Administrator in Section 2.1 shall be made by the Committee by majority vote
at a meeting duly called and held. Committee members other than the
Administrator shall be appointed to serve a one-year term, but may serve an
<PAGE>
unlimited number of terms on the Committee. The Committee may appoint a
secretary to keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable. The
Committee may consult with counsel, who may be counsel to the Company.
2.3 Indemnity of Committee Members. Any individual who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of the corporation) by
reason of the fact that he is or was serving as Administrator or as a Committee
member shall be indemnified by the Company against expenses (including
reasonable attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith for the purpose that he reasonably believed
to be in the best interest of the Company and, in criminal actions or
proceedings, in addition, had no reasonable cause to believe that his conduct
was unlawful.
2.4 Types of Awards Under Plan. Options granted under the plan shall be
designated as Incentive Stock Options, described in Article 4, or Non-Qualified
Stock Options, described in Article 5.
2.5 Eligible Employees. Options may be granted only to persons who are
key employees of the Company. The term "key employees" as such term is used in
the Plan shall include officers, directors, executives, supervisory personnel,
as well as other employees of the Company. The Administrator shall issue to each
option recipient ("Optionee") a letter notifying the employee of such receipt
along with information concerning the type of option granted and the duration of
time and manner in which the option is exercisable.
ARTICLE 3
SHARES OF STOCK SUBJECT TO THE PLAN
There will be reserved for use upon the exercise of options to be
granted from time to time under the Plan (subject to the provisions of Article
11 hereof) an aggregate of 1,000,000 shares of the no par value Common Stock
(hereinafter called the "Common Stock") of the Company, which shares may be in
whole or in part, as the Board shall from time to time determine, authorized but
unissued shares of the Common Stock or issued shares of the Common Stock that
shall have been reacquired by the Company. Any shares subject to an option under
the Plan, which option for any reason expires or is terminated unexercised as to
such shares, may again be subjected to an option under the Plan. The Company
shall not be required to issue or deliver any certificate for shares of its
stock purchased upon the exercise of any part of an option before (i) the
admission of such shares to listing on any stock exchange on which the stock of
the Company may then be listed, (ii) completion of any registration or other
qualification of such shares under any state or federal law or ruling or
regulation of any governmental regulatory body that the Company shall, in its
sole discretion, determine is necessary or advisable, and (iii) the Board shall
have been advised by counsel that compliance with all applicable legal
requirements has been satisfied.
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<PAGE>
ARTICLE 4
INCENTIVE STOCK OPTIONS
4.1 Award of Incentive Stock Options. The Administrator may, from time
to time and subject to the provisions of the Plan and such other conditions as
the Administrator may prescribe, grant to any Eligible Employee one or more
Incentive Stock Options ("ISO") to purchase the number of shares of common stock
of the Company designated by the Administrator. The Administrator may specify a
schedule that shall determine the dates upon which the Optionee shall become
vested in his right to exercise the option granted. It is intended that such
options issued as ISOs under the Plan will qualify as ISOs under ss. 422 of the
Internal Revenue Code of 1986, as amended or replaced from time to time
(hereinafter referred to as the "Code"), and the terms of the Plan shall be
interpreted in accordance with this intention.
4.2 Price Limitations on Incentive Stock Options. The option price for
an option issued as an ISO shall not be less than 100% of the fair market value
of the stock (as determined in Article 6 hereof) on the date the option is
granted.
4.3 Maximum Amount of ISO Grant. The aggregate fair market value of the
stock (as determined in Article 6 hereof) for which any employee may exercise
for the first time options designated as ISOs in any calendar year (under this
or any other stock option plan established by the Company) shall not exceed
$100,000.
4.4 Term and Exercise. Each ISO shall be exercisable by its terms, and
may be exercised at any time thereafter during a period of ten (10) years from
the date of grant (the "Option Term"). No ISO shall be exercisable after the
expiration of the Option Term.
4.5 Additional Price and Term Limitations for 10% Shareholders. No
Incentive Stock Option ("ISO") granted to any employee who at the time of such
grant owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company may be designated as an ISO unless at the
time of such grant the option price is fixed at not less than 110% of the fair
market value of the stock (as determined in Article 6 hereof) subject to the
option, and exercise of such option is prohibited by its terms after the
expiration of five (5) years from the date such option is granted.
ARTICLE 5
NON-QUALIFIED STOCK OPTIONS
5.1 Award of Non-Qualified Stock Options. The Administrator may, from
time to time and subject to the provisions of the Plan and such other conditions
as the Administrator may prescribe, grant to any Eligible Employee one or more
Non-Qualified Stock Options ("NSO") to purchase a designated number of shares of
Common Stock at a specified
- 3 -
<PAGE>
option price. The Administrator may specify a schedule that shall determine the
dates upon which the Optionee shall become vested in his right to exercise the
option granted.
5.2 Stock Option Price. The option price of a NSO shall be the fair
market value of the stock at the date of grant, provided that the Administrator
may set such price at a different value at its discretion.
5.3 Term and Exercise. Each NSO shall be exercisable by its terms, and
may be exercised at any time thereafter during a period of ten (10) years from
the date of grant (the "Option Term"). No NSO shall be exercisable after the
expiration of the Option Term.
ARTICLE 6
DETERMINATION OF FAIR MARKET VALUE
For purposes of this Plan, the "fair market value" of the Company's
Common Stock shall be determined as of the designated date by the public
accounting firm currently serving as the Company's auditors, provided such firm
is qualified to give opinions in the area of stock valuation, or by another
qualified public accounting firm qualified to give such opinions selected by the
Board. Such determination shall be set forth in a written opinion prepared by
the public accounting firm and delivered to the Administrator.
ARTICLE 7
DILUTION OR OTHER AGREEMENT
In the event that additional shares of Common Stock are issued pursuant
to a stock split or a stock dividend, the number of shares of Common Stock then
covered by each outstanding option granted hereunder shall be increased
proportionately with no increase in the total purchase price of the shares then
so covered, and the number of shares of Common Stock reserved for the purpose of
the Plan shall be increased by the same proportion. In the event that the shares
of Common Stock of the Company from time to time issued and outstanding are
reduced by a reverse stock split or stock redemption, the number of shares of
Common Stock then covered by each outstanding option granted hereunder shall be
reduced proportionately with no reduction in the total price of the shares then
so covered, and the number of shares of Common Stock reserved for the purposes
of the Plan shall be reduced by the same proportion. In the event that the
Company should transfer assets to another corporation and distribute the stock
of such other corporation without the surrender of Common Stock of the Company,
and if such distribution is not taxable as a dividend and no gain or loss is
recognized by reason of ss. 355 of the Code, or some similar section, then the
total purchase price of the shares covered by each outstanding option shall be
reduced by an amount that bears the same ratio to the total purchase price then
in effect as the market value of the stock distributed in respect of a share of
the Common Stock of the Company, immediately following the distribution, bears
to the aggregate of the market value at such
- 4 -
<PAGE>
time of a share of Common Stock of the Company and the stock distributed in
respect thereof. All such adjustments shall be made by the Administrator, whose
determination upon the same shall be final and binding upon the Optionee. No
fractional shares shall be issued, and any fractional shares resulting from the
computations pursuant to this Article 6 shall be eliminated from the respective
option. No adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional Common Stock or other
securities.
ARTICLE 8
CERTAIN LIMITATIONS ON RIGHT TO EXERCISE
8.1 Employment Requirement and Holding Period.
8.1.1 Unless the option granted to an Optionee includes a
specific vesting schedule, each option granted under this Plan shall be
fully exercisable after five (5) years of continuous employment of the
Optionee with the Company immediately following the date the option is
granted, with 20% of the total options granted becoming exercisable on
the anniversary date of the option grant each year, until all options
are fully vested.
8.1.2 No option may be exercised unless the Optionee is, at
the time of such exercise, in the employ of the Company and shall have
been continuously so employed since the grant of his option, except as
provided in Section 10 hereof. Absence or leave approved by the
management of the Company shall not be considered an interruption of
employment for any purpose under the Plan.
8.1.3 Any option in which the Optionee is fully vested shall
be exercisable in full, or in any increment of at least 1,000 shares,
only if the Optionee chooses to exercise such option and to pay for
such option in the manner set forth in Section 8.2 hereof (i.e., with
cash, a certified bank check, shares of the Company's Common Stock, or
any combination of the foregoing in an amount equal to the full option
price of the shares being purchased).
8.1.4 The Optionee shall not dispose of stock received
pursuant to his exercise of an ISO at any time during the one (1) year
period following the date of transfer of such share to the Optionee,
except as provided in Section 10.3 hereof.
8.1.5 Notwithstanding the foregoing, the Administrator may, in
its sole discretion, (a) prescribe longer time periods and additional
requirements with respect to the exercise of an option and (b)
terminate in whole or in part such portion of any option that has not
yet become exercisable at such time if the Administrator determines
that the Optionee is not performing satisfactorily the
- 5 -
<PAGE>
duties to which he was assigned on the date the option was granted or
duties of at least equal responsibility.
8.2 Payment. The exercise of any option shall be contingent upon
receipt by the Company of cash, a certified bank check to its order, shares of
the Company's Common Stock, or any combination of the foregoing in an amount
equal to the full option price of the shares being purchased. For purposes of
this paragraph, shares of the Company's Common Stock that are delivered in
payment of the option price shall be valued at their fair market value (as
determined in Article 6 hereof) applied as of the date of the exercise of the
option.
8.3 Status of a Stockholder. No Optionee or his legal representative,
legatees, or distributees, as the case may be, will be, or will be deemed to be,
a holder of any share subject to an option unless and until certificates for
such shares are issued to him or them under the terms of the Plan. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
8.4 Nonexercisable. In no event may an option be exercised after the
expiration of its term.
8.5 Reduction in Reserved Stock. Exercise of an option shall result in
a decrease in the number of shares of Common Stock that thereafter may be
available under the Plan by the number of shares as to which the option is
exercised.
ARTICLE 9
ASSIGNABILITY
Each option granted under this Plan shall be transferable only by will
or the laws of descent and distribution and shall be exercisable, during his
lifetime, only by the employee to whom the option is granted. Except as
permitted by the preceding sentence, no option granted under the Plan or any of
the rights and privileges thereby conferred shall be transferred, assigned,
pledged, or hypothecated in any way (whether by option of law or otherwise), and
no such option, right, or privilege shall be subject to execution, attachment,
or similar process. Upon any attempt so to transfer, assign, pledge,
hypothecate, or otherwise dispose of the options, or of any right or privilege
conferred thereby, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option, right or privilege, the option
and such rights and privileges shall immediately become null and void.
- 6 -
<PAGE>
ARTICLE 10
EFFECT OF TERMINATION OF EMPLOYMENT,
DEATH OR DISABILITY
10.1 Termination of Employment.
10.1.1 In the event of the termination of employment of an
Optionee during the period after the date of issuance of an option to
him by reason of voluntary separation on the part of the Optionee
without the consent of the Company, any unexercised option or options
theretofore granted to him under this Plan shall terminate as of the
date of separation.
10.1.2 Notwithstanding the restrictions of subparagraph 8.1.2
hereof, in the event of the termination of employment of an Optionee by
reason discharge by the Company anytime after the date of issuance of
an option to him, Optionee shall have the right to exercise any options
granted to him under this Plan which have not expired and in which he
is vested within 30 days after the effective date of his discharge, at
which time all options issued to him under the Plan shall terminate.
10.2 Retirement. Notwithstanding the restrictions of subparagraph 8.1.2
hereof, if the employment of an Optionee shall be terminated by the Company
because of the Optionee's retirement at his Retirement Date (as defined in
Section 10.5 hereof), the Optionee shall have the right to exercise such option
or options held by him, to the extent that such options have not expired, at any
time within thirty (30) days after such retirement.
10.3 Deaths. In the event that an Optionee shall die while employed by
the Company or shall die within thirty (30) days after retirement at his
Retirement Date (as defined in Section 10.5 hereof), any option or options
granted to him under this Plan and not theretofore exercised by him or expired
shall be exercisable to the extent the Optionee had a vested right in such
options at the time of his death by the estate of the Optionee or by any person
who acquired such option or options by bequest or inheritance from the Optionee
at any time within one (1) year after the death of the Optionee. References
hereinabove to the Optionee shall be deemed to include any person entitled to
exercise the option after the death of the Optionee under the terms of this
Plan.
10.4 Permanent and Total Disability. In the event of the termination of
employment of an Optionee by reason of the Optionee's permanent and total
disability, such Optionee shall have the right, notwithstanding the provisions
of subparagraph 8.1.2 hereof, to exercise all vested options held by him to the
extent such options have not previously expired or been exercised, at any time
within one year after such termination. The term "permanent and total
disability" shall, for the purposes of this Plan, be defined in the same manner
as such term is defined in ss. 22(e)(3) of the Code.
10.5 Retirement Date. For the purposes of this Plan, "Retirement Date"
shall mean any date an employee is otherwise entitled to retire under the
Company's retirement
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<PAGE>
plans and shall include normal retirement at age sixty-five (65), early
retirement at age sixtytwo (62), and retirement at age sixty (60) after thirty
(30) years of service if such retirement options have been adopted by the
Company.
ARTICLE 11
LISTING AND REGISTRATION OF SHARES
Each option shall be subject to the requirement that if at any time the
Administrator shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any securities
exchange or under any state or federal 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 issue or purchase of shares
thereunder, such option may not be exercised in whole or in part unless and
until such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the
Administrator.
ARTICLE 12
EXPIRATION AND TERMINATION OF THE PLAN
Options may be granted under the Plan at any time or from time to time
as long as the total number of shares optioned or purchased under this Plan does
not exceed 700,000 shares of Common Stock. The Plan may be abandoned or
terminated at any time by the Board except with respect to any options then
outstanding under the Plan. No option shall be granted pursuant to the plan
after March 14, 2003.
ARTICLE 13
AMENDMENT OF PLAN
The Board may at any time and from time to time modify and amend the
Plan in any respect; provided, however, that no such amendment shall: (i)
increase (except in accordance with Article 7) the maximum number of shares for
which options may be granted under the Plan either in the aggregate or to any
individual employee; or (ii) reduce (except in accordance with Article 7) the
minimum option prices that may be established under the Plan; or (iii) extend
the period or periods during which options may be granted or exercised; or (iv)
change the provisions relating to the determination of employees to whom options
shall be granted and the number of shares to be covered by such options; or (v)
change the provisions relating to adjustments to be made upon changes in
capitalization; or (vi) change the method for the selection of the Administrator
or the Committee as provided by Article
- 8 -
<PAGE>
2 hereof. The termination or any modification or amendment of the Plan shall
not, without the consent of an employee, affect his rights under an option
theretofore granted to him.
ARTICLE 14
APPLICABILITY OF PLAN TO
OUTSTANDING STOCK OPTIONS
This Plan shall not affect the terms and conditions of any incentive
stock options or nonqualified stock options granted to any employee of the
Company under any other plan relating to nonqualified stock options; nor shall
it affect any of the rights of any employee to whom such an incentive stock
option or nonqualified stock option was granted.
ARTICLE 15
INTERPRETATION
The terms of this Plan concerning the issue of ISOs are subject to all
present and future regulations and rulings of the Secretary of the Treasury or
his delegate relating to the qualification of ISOs under ss. 422 of the Code. If
any provision of the Plan applicable to ISOs conflicts with any such regulation
or ruling, then that provision of the Plan shall be void and of no effect.
ARTICLE 16
MISCELLANEOUS
16.1 Optionees' Rights. Nothing contained in this Plan shall be deemed
to give any Optionee the right to be retained in the service of the Company or
to interfere with the right of the Company to discharge any Optionee or Company
at any time regardless of the effect which such discharge shall have upon him as
an Optionee.
16.2 Construction of Agreement. This Plan shall be construed and
enforced according to the Code and the laws of the State of Tennessee, other
than its laws respecting choice of law, to the extent not preempted by the Code.
16.3 Gender and Number. Wherever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where
they would so apply.
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<PAGE>
16.4 Headings. The headings and subheadings of this Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
ARTICLE 17
EFFECTIVE DATE OF PLAN
This Plan shall become effect on March 15, 1993, upon the adoption of
the Plan by the Board and the approval of 51% of the shareholders within twelve
(12) months before or after the adoption of the Plan by the Board.
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<PAGE>
Exhibit 5
Haskell Slaughter Young & Johnston,
Professional Association
1200 AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203-2618
June 13, 1995
HEALTHSOUTH Corporation
Two Perimeter Park South
Birmingham, Alabama 35243
Re: Registration Statement on Form S-8 --
Surgical Health Corporation 1992, 1993 and 1994 Stock Option Plans;
Heritage Surgical Corporation 1992 and 1993 Stock Option Plans
Gentlemen:
We have served as counsel for HEALTHSOUTH Corporation, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended, of an aggregate of 1,184,702 shares (the "Shares") of the
Company's authorized Common Stock, par value $.01 per share, to be issued to
participants of the Company's Surgical Health Corporation 1992 Stock Option
Plan, Surgical Health Corporation 1993 Stock Option Plan, Surgical Health
Corporation 1994 Stock Option Plan, Heritage Surgical Corporation 1992 Stock
Option Plan and Heritage Surgical Corporation 1993 Stock Option Plan (the
"Plans"), pursuant to the Company's Registration Statement on Form S-8 relating
thereto (the "Registration Statement"). This opinion is furnished to you
pursuant to the requirements of Form S-8.
In connection with this opinion, we have examined and are familiar with
originals or copies (certified or otherwise identified to our satisfaction) of
such documents, corporate records and other instruments relating to the
incorporation of the Company and to the authorization and issuance of the Shares
and the authorization and adoption of the Plan as we have deemed necessary and
appropriate.
Based upon the foregoing, and having regard for such legal
considerations we have deemed relevant, it is our opinion that:
1. The Shares have been duly authorized.
2. Upon issuance, sale and delivery of the Shares as contemplated in
the Registration Statement and the Plans, the Shares will be legally issued,
fully paid and nonassessable.
<PAGE>
HEALTHSOUTH Corporation
June 13, 1995
Page 2
We do hereby consent to the reference to our firm under the heading
"Interests of Named Experts and Counsel" in the Registration Statement and to
the filing of this Opinion as an Exhibit thereto.
Very truly yours,
HASKELL SLAUGHTER YOUNG & JOHNSTON
Professional Association
By /s/ BEALL D. GARY, JR.
---------------------------------
Beall D. Gary, Jr.
<PAGE>
EXHIBIT 23(a)
Consent of Ernst & Young LLP,
Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the Surgical Health Corporation
1992 Stock Option Plan, Surgical Health Corporation 1993 Stock Option Plan,
Surgical Health Corporation 1994 Stock Option Plan, Heritage Surgical
Corporation 1992 Stock Option Plan and Heritage Surgical Corporation 1993 Stock
Option Plan of HEALTHSOUTH Corporation and to the incorporation by reference
therein of our report dated February 24, 1995, with respect to the consolidated
financial statements and schedules of HEALTHSOUTH Rehabilitation Corporation
included in its Annual Report (Form 10-K) for the year ended December 31, 1994,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Birmingham, Alabama
June 13, 1995
