PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER (this "Plan of Merger"), made and entered into as of the 17th day of
February, 1997, by and among HEALTHSOUTH Corporation, a Delaware corporation ("HEALTHSOUTH"),
REID ACQUISITION CORPORATION, a Delaware corporation (the "Subsidiary"), and HORIZON/CMS
HEALTHCARE CORPORATION, a Delaware corporation ("Horizon/CMS") (the Subsidiary and
Horizon/CMS being sometimes collectively referred to herein as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of HEALTHSOUTH, the Subsidiary and Horizon/CMS have
approved the merger of the Subsidiary with and into Horizon/CMS (the "Merger"), upon the terms and subject to
the conditions set forth in this Plan of Merger, whereby each share of Common Stock, par value $.001 per share,
of Horizon/CMS (the "Horizon/CMS Common Stock"), not owned directly or indirectly by Horizon/CMS, will
be converted into the right to receive the Merger Consideration (as hereinafter defined);
WHEREAS, each of HEALTHSOUTH, the Subsidiary and Horizon/CMS desires to make certain
representations, warranties, covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger; and
WHEREAS, for federal income tax purposes, it is intended that the Merger shall qualify as a reorganization under
the provisions of Section 368 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements contained
herein, the parties hereto do hereby agree as follows:
Section 1. The Merger.
1.1 The Merger. Upon the terms and conditions set forth in this Plan of Merger, and in accordance with the
Delaware General Corporation Law (the "DGCL"), the Subsidiary shall be merged with and into Horizon/CMS
at the Effective Time (as defined in Section 1.3). At the Effective Time, the separate corporate existence of the
Subsidiary shall cease and Horizon/CMS shall continue