<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 8-K

                 Current Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934



Date of Report:  January 17, 1996




                             HEALTHSOUTH Corporation
            ---------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)




          Delaware                     1-10315                 63-0860407
     ------------------               ---------                ------------
      (State or Other                (Commission             (I.R.S. Employer
Jurisdiction of Incorporation        File Number)            Identification No.)
      or Organization)



 Two Perimeter Park South
    Birmingham, Alabama                                           35243
----------------------------                                   -------------
   (Address of Principal                                        (Zip Code)
     Executive Offices)



Registrant's Telephone Number,                                 (205) 967-7116
    Including Area Code:




<PAGE>



Item 2.           ACQUISITION OR DISPOSITION OF ASSETS


         Effective  January  17,  1996,  HEALTHSOUTH  Corporation,   a  Delaware
corporation  (the  "Company"),   through  its   wholly-owned   subsidiary,   SCA
Acquisition  Corporation,  a Delaware corporation (the "Subsidiary"),  completed
the  acquisition  of Surgical  Care  Affiliates,  Inc.,  a Delaware  corporation
("SCA"),  through a merger of the Subsidiary  into SCA. As  contemplated  by the
terms of the Amended and Restated  Plan and Agreement of Merger by and among the
parties, SCA is the surviving  corporation in the merger, and is wholly owned by
the Company.  SCA  stockholders  received 1.1726 shares of the Common Stock, par
value $.01 per share,  of the  Company for each share of the Common  Stock,  par
value $.25 per share, of SCA held by them. The exchange ratio represents a value
of $34.16 per share to SCA's stockholders,  resulting in an approximate value of
the transaction of $1,338,000,000.

         Prior to  consummation of the  acquisition,  SCA operated 67 outpatient
surgery centers in 24 states.


Item 7.           FINANCIAL STATEMENTS AND EXHIBITS


         (a)      Financial Statements of Businesses Acquired.

         The  required  audited  consolidated  financial  statements  of  SCA at
December 31, 1994 and 1993,  and the periods  then ended,  were filed with SCA's
Annual Report on Form 10-K for the fiscal year ended  December 31, 1994, and are
hereby  incorporated  herein by reference.  The required unaudited  consolidated
financial  statements of SCA at September  30, 1995,  and the period then ended,
were  filed  with  SCA's  Quarterly  Report on Form 10-Q for the  quarter  ended
September 30, 1995, and are hereby incorporated herein by reference.

         (b)      Pro Forma Financial Information.

         The required Pro Forma Consolidated Financial Statements of the Company
for the fiscal year ended  December 31, 1994, and at September 30, 1995, and the
period  then ended,  were filed with the  Company's  Current  Report on Form 8-K
dated  December  16, 1995,  as amended,  and are hereby  incorporated  herein by
reference.


                                      - 2 -

<PAGE>




         (c)      Exhibits.

                  (2)               Amended and Restated  Plan and  Agreement of
                                    Merger,  dated as of October 9, 1995, by and
                                    among    HEALTHSOUTH    Corporation,     SCA
                                    Acquisition  Corporation  and Surgical  Care
                                    Affiliates,  Inc.,  filed  as Annex A to the
                                    Prospectus  forming a part of the  Company's
                                    Registration Statement on Form S-4 (Reg. No.
                                    33-64935),  as filed with the  Commission on
                                    December  14, 1995,  is hereby  incorporated
                                    herein by reference.

                  (3)               Restated  Certificate  of  Incorporation  of
                                    HEALTHSOUTH Corporation, as filed on January
                                    17, 1996 with the  Secretary of State of the
                                    State of Delaware.

                  (99)-1            Audited consolidated financial statements of
                                    SCA at December  31, 1994 and 1993,  and the
                                    periods  then  ended,  as filed  with  SCA's
                                    Annual  Report on Form  10-K for the  fiscal
                                    year ended  December  31,  1994,  are hereby
                                    incorporated herein by reference.

                  (99)-2            Pro Forma Consolidated  Financial Statements
                                    of the  Company  for the  fiscal  year ended
                                    December  31,  1994,  and at  September  30,
                                    1995,  and the period then  ended,  as filed
                                    with the  Company's  Current  Report on Form
                                    8-K dated  December  16,  1995,  are  hereby
                                    incorporated herein by reference.


         The Registrant  undertakes to furnish  supplementally to the Commission
upon  request  a copy of any  Exhibit  to the  Amended  and  Restated  Plan  and
Agreement of Merger, incorporated by reference
herein as Exhibit (2).

                                      - 3 -

<PAGE>



                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:      January 29, 1996

                             HEALTHSOUTH Corporation


                             By  /s/ Richard M. Scrushy
                                 ----------------------------------------
                                            Richard M. Scrushy,
                                           Chairman of the Board
                                         and Chief Executive Officer



                                      - 4 -


<PAGE>



                                                                     Exhibit (3)


                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                             HEALTHSOUTH CORPORATION


         HEALTHSOUTH Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:

         1. The name of the Corporation is HEALTHSOUTH Corporation.

         The Corporation was originally incorporated under the name AMCARE, Inc.
The date of filing its original  Certificate of Incorporation with the Secretary
of State was February 22, 1984.

         2. This  Restated  Certificate  of  Incorporation  further  amends  and
restates  the  Restated  Certificate  of  Incorporation  of the  Corporation  by
inserting therein a new Article FOURTH.

         3. The text of the Restated Certificate of Incorporation, as amended or
supplemented  heretofore,  is further amended hereby to read as herein set forth
in full:


                                      - 5 -


<PAGE>



         "FIRST: The name of the Corporation is HEALTHSOUTH Corporation.

         SECOND:  The address of its registered  office in the State of Delaware
is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.

         THIRD:  The nature of the  business  or  purposes  to be  conducted  or
promoted are:

                  (a) To  engage  in the  business  of  providing  comprehensive
         rehabilitation  and clinical  healthcare  services on an ambulatory and
         inpatient basis in rehabilitation  clinics and hospitals to the general
         public through the provision of physician  services,  physical therapy,
         social   and/or    psychological,    respiratory    therapy,    cardiac
         rehabilitation,  pulmo-  nary  rehabilitation,   occupational  therapy,
         speech pathology,  prosthetic and orthotic devices, nursing care, drugs
         and biologicals,  supplies, appliances and equipment and other services
         and to do any and all things  necessary  and  appropriate  to carry out
         such business effectively,  including,  without limitation, the owning,
         leasing,  management  and  operation  of medical  facilities  and other
         physical properties,  either directly or indirectly, or in concert with
         others.

                  (b)  To  engage  in  any  lawful  act or  activity  for  which
         corporations may be organized under the General  Corporation Law of the
         State of Delaware.


         FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Two Hundred  Fifty-One  Million Five Hundred Thousand
(251,500,000)  shares,  consisting of Two Hundred  Fifty  Million  (250,000,000)
shares

                                      - 6 -

<PAGE>



of Common  Stock,  par value One Cent  ($.01) per share,  and One  Million  Five
Hundred  Thousand  (1,500,000)  shares of Preferred  Stock,  par value Ten Cents
($.10) per share.

         Shares of  Preferred  Stock may be issued from  time-to-time  in one or
more series,  each such series to have such distinctive  designation or title as
may be stated and  expressed  in this  Article  FOURTH or as may be fixed by the
Board of Directors prior to the issuance of any shares thereof. Each such series
of Preferred Stock shall have such voting powers,  full or limited, or no voting
powers, and such preferences and such relative, participating, optional or other
special rights (including,  without limitation,  the right to convert the shares
of such Preferred  Stock into shares of the  Corporation's  Common Stock at such
rate and upon such  terms and  conditions  as may be fixed by the  Corporation's
Board of Directors),  with such  qualifications,  limitations or restrictions of
such  preferences  or rights as shall be stated and  expressed  in this  Article
FOURTH  or in the  resolution  or  resolutions  providing  for the issue of such
series of Preferred  Stock as may be adopted from  time-to-time  by the Board of
Directors  prior to the issuance of any shares  thereof,  in accordance with the
laws of the State of Delaware.

         Except as may be otherwise  provided in this  Article  FOURTH or in the
resolution or resolutions providing for the

                                      - 7 -

<PAGE>



issue of a  particular  series,  the Board of  Directors  may from  time-to-time
increase the number of shares of any series  already  created by providing  that
any unissued shares of Preferred Stock shall constitute part of such series,  or
may decrease (but not below the number of shares thereof then  outstanding)  the
number of shares of any series  already  created by providing  that any unissued
shares  previously  assigned  to such  series  shall no longer  constitute  part
thereof.

         FIFTH:  The Board of Directors  shall have the power to make,  alter or
repeal the Bylaws of the Corporation at any meeting at which a quorum is present
by the affirmative vote of a majority of the whole Board of Directors.  Election
of Directors need not be by written ballot.

         SIXTH:  Special  Meetings of the stockholders of the Corporation may be
called only by the Board of Directors of the  Corporation by resolution  adopted
by a majority of the whole Board of Directors or in writing by the holders of at
least 20% of the  outstanding  shares  of the  Corporation  entitled  to vote in
elections of Directors.

         SEVENTH: (a) Unless the conditions set forth in clauses (1) through (4)
of this Article SEVENTH,  Section (a) are satisfied, the affirmative vote of the
holders of Sixty-Six

                                      - 8 -

<PAGE>



and Two-Thirds  Percent  (66-2/3%) of all shares of the Corporation  entitled to
vote in  elections  of  Directors,  considered  for the purposes of this Article
SEVENTH as one class,  shall be required for the adoption or  authorization of a
business  combination  (as  hereinafter  defined)  with  any  other  entity  (as
hereinafter  defined)  if,  as of the  record  date  for  the  determination  of
stockholders entitled to notice thereof and to vote thereon, the other entity is
the beneficial owner, directly or indirectly,  of more than Twenty Percent (20%)
of the outstanding  shares of the  Corporation  entitled to vote in elections of
Directors, considered for the purposes of this Article SEVENTH as one class. The
Sixty-Six and Two-Thirds  Percent (66-2/3%) voting  requirement set forth in the
foregoing sentence shall not be applicable if:

                  (1) The cash, or fair market value of other consideration,  to
         be received per share by holders of the  Corporation's  Common Stock in
         the business combination is at least an amount equal to (A) the highest
         per share  price  paid by the  other  entity  in  acquiring  any of its
         holdings  of the  Corporation's  Common  Stock  plus (B) the  aggregate
         amount,  if any, by which Five Percent (5%) per annum of that per share
         price  exceeds the aggregate  amount of all dividends  paid in cash, in
         each case since the date on which the other entity  acquired the Twenty
         Percent (20%) interest;



                                      - 9 -

<PAGE>



                  (2) After the other entity has acquired a Twenty Percent (20%)
         interest and prior to the consummation of the business combination: (A)
         the  other   entity   shall  have  taken   steps  to  ensure  that  the
         Corporation's  Board of Directors included at all times  representation
         by continuing Director(s) (as hereinafter defined) proportionate to the
         stockholders  of the public holders of the  Corporation's  Common Stock
         not  affiliated  with the other entity  (with a continuing  Director to
         occupy any resulting  fractional board position);  (B) the other entity
         shall  not  have  acquired  any  newly  issued   shares,   directly  or
         indirectly, from the Corporation (except upon conversion of convertible
         securities  acquired by it prior to  obtaining a Twenty  Percent  (20%)
         interest or as a result of a pro rata share  dividend or share  split);
         and (C) the  other  entity  shall  not  have  acquired  any  additional
         outstanding  shares of the  Corporation's  Common  Stock or  securities
         convertible into shares of the  Corporation's  Common Stock except as a
         part of the transaction  that resulted in the other entity's  acquiring
         its Twenty Percent (20%) interest;

                  (3) The other  entity shall not have (A) received the benefit,
         directly or indirectly (except  proportionately  as a stockholder),  of
         any loans, advances,  guarantees, pledges or other financial assistance
         or tax credits provided by the Corporation or (B) made any major change
         in the  Corporation's  business or equity capital  structure without in
         either case the  approval  of at least a majority of all the  Directors
         and at  least  two-thirds  of the  continuing  Directors  prior  to the
         consummation of the business combination; and

                  (4) A proxy  statement  responsive to the  requirements of the
         Securities  Exchange  Act of 1934  shall  have  been  mailed  to public
         stockholders   of  the   Corporation  for  the  purpose  of  soliciting
         stockholder  approval  of  the  business  combination  and  shall  have
         contained   at  the  front   thereof,   in  a  prominent   place,   any
         recommendations  as to  the  advisability  (or  inadvisability)  of the
         business combination that the continuing Directors, or any of them, may
         choose  to  state  and,  if  deemed  advisable  by a  majority  of  the
         continuing Directors, an opinion of a reputable investment banking firm
         as to the fairness of the terms of the business  combination,  from the
         point of view of the remaining  public  stockholders of the Corporation
         (the investment banking firm to be selected by a majority

                                     - 10 -

<PAGE>



         of the  continuing  Directors  and to be paid a reasonable  fee for its
         services by the Corporation upon receipt of the opinion).


         The  provisions of this Article  SEVENTH shall also apply to a business
combination  with any  other  entity  that at any  time has been the  beneficial
owner,  directly  or  indirectly,  of more  than  Twenty  Percent  (20%)  of the
outstanding  shares  of  the  Corporation  entitled  to  vote  in  elections  of
Directors,  considered  for the purposes of this  Article  SEVENTH as one class,
notwithstanding  the fact that the other  entity has  reduced  its  shareholders
below Twenty  Percent (20%) if, as of the record date for the  determination  of
stockholders entitled to notice of and to vote on the business combination,  the
other entity is an "affiliate" (as hereinafter defined) of the Corporation.

         (b) As used in this Article SEVENTH,  (1) the term "other entity" shall
include any corporation,  person or other entity and any other entity with which
it or its  "affiliate"  or  "associate"  (as defined  below) has any  agreement,
arrangement,  or  understanding,  directly  or  indirectly,  for the  purpose of
acquiring,  holding, voting, or disposing of shares of the Corporation,  or that
is its  "affiliate"  or  "associate" as those terms are defined in Rule 12b-2 of
the General Rules and Regulations  under the Securities  Exchange Act of 1934 as
in effect on  September 1, 1986,  together  with the  successors  and assigns of
those persons in any transaction or series of

                                     - 11 -

<PAGE>



transactions not involving a public offering of the Corporation's  shares within
the meaning of the  Securities  Act of 1933; (2) an other entity shall be deemed
to be the  beneficial  owner of any  shares  of the  Corporation  that the other
entity (as defined above) has the right to acquire  pursuant to any agreement or
upon exercise of conversion rights,  warrants or options, or otherwise;  (3) the
outstanding  shares of any class of the Corporation  shall include shares deemed
owned  through  application  of clause (2) above but shall not include any other
shares  that may be  issuable  pursuant  to any  agreement  or upon  exercise of
conversion  rights,  warrants or options,  or otherwise;  (4) the term "business
combination"  shall  include (A) the sale,  exchange,  lease,  transfer or other
disposition by the  Corporation of all, or  substantially  all, of its assets or
business to any other entity,  (B) the  consolidation of the Corporation with or
its merger into any other  entity,  (C) the merger into the  Corporation  of any
other entity,  or (D) a combination or majority  share  acquisition in which the
Corporation  is the  acquiring  corporation  and its voting shares are issued or
transferred to any other entity or to stockholders of any other entity,  and the
term "business combination" shall also include any agreement,  contract or other
arrangement with an other entity providing for any of the transactions described
in (A) through (D) of this clause (4); (5) the term "continuing  Director" shall
mean either a person who was a member of the Corporation's Board of

                                     - 12 -

<PAGE>



Directors on August 15, 1986,  or a person who was elected to the  Corporation's
Board of Directors by the public  stockholders of the  Corporation  prior to the
time when the other entity acquired in excess of five percent (5%) of the shares
of the Corporation entitled to vote in the election of Directors, considered for
the purposes of this Article  SEVENTH as one class,  or a person  recommended to
succeed a continuing Director by a majority of the continuing Directors; and (6)
for the purposes of Article  SEVENTH,  Section (a),  clause (1), the term "other
consideration  to be  received"  shall mean shares of the  Corporation's  Common
Stock retained by its existing  public  stockholders  in the event of a business
combination  with the other  entity in which the  Corporation  is the  surviving
corporation.

         (c) A majority  of the  continuing  Directors  shall have the power and
duty to  determine  for the purposes of this  Article  SEVENTH,  on the basis of
information known to them,  whether (1) the other entity  beneficially owns more
than Twenty Percent (20%) of the outstanding shares of the Corporation  entitled
to vote in elections of  Directors,  (2) an other  entity is an  "affiliate"  or
"associate"  (as  defined  above)  of  another,  or (3) an other  entity  has an
agreement, arrangement or understanding with another.


                                     - 13 -

<PAGE>



         (d) Nothing  contained  in this Article  SEVENTH  shall be construed to
relieve any other entity from any fiduciary obligation imposed by law.

         EIGHTH:  Subject  to the last  sentence  of this  Article  EIGHTH,  the
Corporation  reserves the right to amend and repeal any  provision  contained in
this Certificate of Incorporation including,  without limiting the generality of
the foregoing,  the addition of a provision  requiring a  supermajority  vote of
stockholders  to remove  Directors.  The provisions set forth in Articles SIXTH,
SEVENTH and this Article EIGHTH of this Certificate of Incorporation  may not be
repealed  or amended in any  respect,  unless  such  action is  approved  by the
affirmative vote of the holders of Sixty-Six and Two-Thirds Percent (66-2/3%) of
all  shares of the  Corporation  entitled  to vote in  elections  of  Directors,
considered for purposes of this Article EIGHTH as one class.

         NINTH: No Director of this  Corporation  shall be personally  liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a  Director;  provided,  however,  that  this  Article  NINTH  shall not
eliminate the liability of a Director (a) for any breach of the Director's  duty
of loyalty to the Corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of

                                     - 14 -

<PAGE>


law, (c) under Section 174 of the General  Corporation  Law of Delaware,  or (d)
for any  transaction  from  which the  Director  derived  an  improper  personal
benefit.

         (4) In accordance  with the  applicable  provisions of Sections 242 and
245 of the  General  Corporation  Law of the State of  Delaware,  this  Restated
Certificate  of  Incorporation  has been duly  adopted by the  Directors  of the
Corporation and by vote of the stockholders.

         IN  WITNESS  WHEREOF,  said  HEALTHSOUTH  Corporation  has  caused  its
corporate  seal to be  hereunto  affixed  and this  Certificate  to be signed by
Anthony J. Tanner,  its  Executive  Vice  President,  and attested by William W.
Horton,  its Group Vice  President--Legal  Services,  this 17th day of  January,
1996.

                                       HEALTHSOUTH Corporation


                                       By   /s/ ANTHONY J. TANNER
                                          -------------------------
                                                Anthony J. Tanner
                                             Executive Vice President

[ CORPORATE SEAL ]

ATTEST:


By  /s/ WILLIAM W. HORTON
  ------------------------
      William W. Horton
     Assistant Secretary



                                     - 15 -
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SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 8-K

                 Current Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

Date of Report:  January 17, 1996

                             HEALTHSOUTH Corporation
            ---------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

          Delaware                     1-10315                 63-0860407
     ------------------               ---------                ------------
      (State or Other                (Commission             (I.R.S. Employer
Jurisdiction of Incorporation        File Number)            Identification No.)
      or Organization)

 Two Perimeter Park South
    Birmingham, Alabama                                           35243
----------------------------                                   -------------
   (Address of Principal                                        (Zip Code)
     Executive Offices)

Registrant's Telephone Number,                                 (205) 967-7116
    Including Area Code:
Item 2.           ACQUISITION OR DISPOSITION OF ASSETS

         Effective  January  17,  1996,  HEALTHSOUTH  Corporation,   a  Delaware
corporation  (the  "Company"),   through  its   wholly-owned   subsidiary,   SCA
Acquisition  Corporation,  a Delaware corporation (the "Subsidiary"),  completed
the  acquisition  of Surgical  Care  Affiliates,  Inc.,  a Delaware  corporation
("SCA"),  through a merger of the Subsidiary  into SCA. As  contemplated  by the
terms of the Amended and Restated  Plan and Agreement of Merger by and among the
parties, SCA is the surviving  corporation in the merger, and is wholly owned by
the Company.  SCA  stockholders  received 1.1726 shares of the Common Stock, par
value $.01 per share,  of the  Company for each share of the Common  Stock,  par
value $.25 per share, of SCA held by them. The exchange ratio represents a value
of $34.16 per share to SCA's stockholders,  resulting in an approximate value of
the transaction of $1,338,000,000.

         Prior to  consummation of the  acquisition,  SCA operated 67 outpatient
surgery centers in 24 states.

Item 7.           FINANCIAL STATEMENTS AND EXHIBITS

         (a)      Financial Statements of Businesses Acquired.

         The  required  audited  consolidated  financial  statements  of  SCA at
December 31, 1994 and 1993,  and the periods  then ended,  were filed with SCA's
Annual Report on Form 10-K for the fiscal year ended  December 31, 1994, and are
hereby  incorporated  herein by reference.  The required unaudited  consolidated
financial  statements of SCA at September  30, 1995,  and the period then ended,
were  filed  with  SCA's  Quarterly  Report on Form 10-Q for the  quarter  ended
September 30, 1995, and are hereby incorporated herein by reference.

         (b)      Pro Forma Financial Information.

         The required Pro Forma Consolidated Financial Statements of the Company
for the fiscal year ended  December 31, 1994, and at September 30, 1995, and the
period  then ended,  were filed with the  Company's  Current  Report on Form 8-K
dated  December  16, 1995,  as amended,  and are hereby  incorporated  herein by
reference.

                                      - 2 -
(c)      Exhibits.

                  (2)               Amended and Restated  Plan and  Agreement of
                                    Merger,  dated as of October 9, 1995, by and
                                    among    HEALTHSOUTH    Corporation,     SCA
                                    Acquisition  Corporation  and Surgical  Care
                                    Affiliates,  Inc.,  filed  as Annex A to the
                                    Prospectus  forming a part of the  Company's
                                    Registration Statement on Form S-4 (Reg. No.
                                    33-64935),  as filed with the  Commission on
                                    December  14, 1995,  is hereby  incorporated
                                    herein by reference.

                  (3)               Restated  Certificate  of  Incorporation  of
                                    HEALTHSOUTH Corporation, as filed on January
                                    17, 1996 with the  Secretary of State of the
                                    State of Delaware.

                  (99)-1            Audited consolidated financial statements of
                                    SCA at December  31, 1994 and 1993,  and the
                                    periods  then  ended,  as filed  with  SCA's
                                    Annual  Report on Form  10-K for the  fiscal
                                    year ended  December  31,  1994,  are hereby
                                    incorporated herein by reference.

                  (99)-2            Pro Forma Consolidated  Financial Statements
                                    of the  Company  for the  fiscal  year ended
                                    December  31,  1994,  and at  September  30,
                                    1995,  and the period then  ended,  as filed
                                    with the  Company's  Current  Report on Form
                                    8-K dated  December  16,  1995,  are  hereby
                                    incorporated herein by reference.

         The Registrant  undertakes to furnish  supplementally to the Commission
upon  request  a copy of any  Exhibit  to the  Amended  and  Restated  Plan  and
Agreement of Merger, incorporated by reference
herein as Exhibit (2).

                                      - 3 -
SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:      January 29, 1996

                             HEALTHSOUTH Corporation

                             By  /s/ Richard M. Scrushy
                                 ----------------------------------------
                                            Richard M. Scrushy,
                                           Chairman of the Board
                                         and Chief Executive Officer

                                      - 4 -
Exhibit (3)

                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                             HEALTHSOUTH CORPORATION

         HEALTHSOUTH Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:

         1. The name of the Corporation is HEALTHSOUTH Corporation.

         The Corporation was originally incorporated under the name AMCARE, Inc.
The date of filing its original  Certificate of Incorporation with the Secretary
of State was February 22, 1984.

         2. This  Restated  Certificate  of  Incorporation  further  amends  and
restates  the  Restated  Certificate  of  Incorporation  of the  Corporation  by
inserting therein a new Article FOURTH.

         3. The text of the Restated Certificate of Incorporation, as amended or
supplemented  heretofore,  is further amended hereby to read as herein set forth
in full:

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"FIRST: The name of the Corporation is HEALTHSOUTH Corporation.

         SECOND:  The address of its registered  office in the State of Delaware
is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.

         THIRD:  The nature of the  business  or  purposes  to be  conducted  or
promoted are:

                  (a) To  engage  in the  business  of  providing  comprehensive
         rehabilitation  and clinical  healthcare  services on an ambulatory and
         inpatient basis in rehabilitation  clinics and hospitals to the general
         public through the provision of physician  services,  physical therapy,
         social   and/or    psychological,    respiratory    therapy,    cardiac
         rehabilitation,  pulmo-  nary  rehabilitation,   occupational  therapy,
         speech pathology,  prosthetic and orthotic devices, nursing care, drugs
         and biologicals,  supplies, appliances and equipment and other services
         and to do any and all things  necessary  and  appropriate  to carry out
         such business effectively,  including,  without limitation, the owning,
         leasing,  management  and  operation  of medical  facilities  and other
         physical properties,  either directly or indirectly, or in concert with
         others.

                  (b)  To  engage  in  any  lawful  act or  activity  for  which
         corporations may be organized under the General  Corporation Law of the
         State of Delaware.

         FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is Two Hundred  Fifty-One  Million Five Hundred Thousand
(251,500,000)  shares,  consisting of Two Hundred  Fifty  Million  (250,000,000)
shares

                                      - 6 -
of Common  Stock,  par value One Cent  ($.01) per share,  and One  Million  Five
Hundred  Thousand  (1,500,000)  shares of Preferred  Stock,  par value Ten Cents
($.10) per share.

         Shares of  Preferred  Stock may be issued from  time-to-time  in one or
more series,  each such series to have such distinctive  designation or title as
may be stated and  expressed  in this  Article  FOURTH or as may be fixed by the
Board of Directors prior to the issuance of any shares thereof. Each such series
of Preferred Stock shall have such voting powers,  full or limited, or no voting
powers, and such preferences and such relative, participating, optional or other
special rights (including,  without limitation,  the right to convert the shares
of such Preferred  Stock into shares of the  Corporation's  Common Stock at such
rate and upon such  terms and  conditions  as may be fixed by the  Corporation's
Board of Directors),  with such  qualifications,  limitations or restrictions of
such  preferences  or rights as shall be stated and  expressed  in this  Article
FOURTH  or in the  resolution  or  resolutions  providing  for the issue of such
series of Preferred  Stock as may be adopted from  time-to-time  by the Board of
Directors  prior to the issuance of any shares  thereof,  in accordance with the
laws of the State of Delaware.

         Except as may be otherwise  provided in this  Article  FOURTH or in the
resolution or resolutions providing for the

                                      - 7 -
issue of a  particular  series,  the Board of  Directors  may from  time-to-time
increase the number of shares of any series  already  created by providing  that
any unissued shares of Preferred Stock shall constitute part of such series,  or
may decrease (but not below the number of shares thereof then  outstanding)  the
number of shares of any series  already  created by providing  that any unissued
shares  previously  assigned  to such  series  shall no longer  constitute  part
thereof.

         FIFTH:  The Board of Directors  shall have the power to make,  alter or
repeal the Bylaws of the Corporation at any meeting at which a quorum is present
by the affirmative vote of a majority of the whole Board of Directors.  Election
of Directors need not be by written ballot.

         SIXTH:  Special  Meetings of the stockholders of the Corporation may be
called only by the Board of Directors of the  Corporation by resolution  adopted
by a majority of the whole Board of Directors or in writing by the holders of at
least 20% of the  outstanding  shares  of the  Corporation  entitled  to vote in
elections of Directors.

         SEVENTH: (a) Unless the conditions set forth in clauses (1) through (4)
of this Article SEVENTH,  Section (a) are satisfied, the affirmative vote of the
holders of Sixty-Six

                                      - 8 -
and Two-Thirds  Percent  (66-2/3%) of all shares of the Corporation  entitled to
vote in  elections  of  Directors,  considered  for the purposes of this Article
SEVENTH as one class,  shall be required for the adoption or  authorization of a
business  combination  (as  hereinafter  defined)  with  any  other  entity  (as
hereinafter  defined)  if,  as of the  record  date  for  the  determination  of
stockholders entitled to notice thereof and to vote thereon, the other entity is
the beneficial owner, directly or indirectly,  of more than Twenty Percent (20%)
of the outstanding  shares of the  Corporation  entitled to vote in elections of
Directors, considered for the purposes of this Article SEVENTH as one class. The
Sixty-Six and Two-Thirds  Percent (66-2/3%) voting  requirement set forth in the
foregoing sentence shall not be applicable if:

                  (1) The cash, or fair market value of other consideration,  to
         be received per share by holders of the  Corporation's  Common Stock in
         the business combination is at least an amount equal to (A) the highest
         per share  price  paid by the  other  entity  in  acquiring  any of its
         holdings  of the  Corporation's  Common  Stock  plus (B) the  aggregate
         amount,  if any, by which Five Percent (5%) per annum of that per share
         price  exceeds the aggregate  amount of all dividends  paid in cash, in
         each case since the date on which the other entity  acquired the Twenty
         Percent (20%) interest;

                                      - 9 -
(2) After the other entity has acquired a Twenty Percent (20%)
         interest and prior to the consummation of the business combination: (A)
         the  other   entity   shall  have  taken   steps  to  ensure  that  the
         Corporation's  Board of Directors included at all times  representation
         by continuing Director(s) (as hereinafter defined) proportionate to the
         stockholders  of the public holders of the  Corporation's  Common Stock
         not  affiliated  with the other entity  (with a continuing  Director to
         occupy any resulting  fractional board position);  (B) the other entity
         shall  not  have  acquired  any  newly  issued   shares,   directly  or
         indirectly, from the Corporation (except upon conversion of convertible
         securities  acquired by it prior to  obtaining a Twenty  Percent  (20%)
         interest or as a result of a pro rata share  dividend or share  split);
         and (C) the  other  entity  shall  not  have  acquired  any  additional
         outstanding  shares of the  Corporation's  Common  Stock or  securities
         convertible into shares of the  Corporation's  Common Stock except as a
         part of the transaction  that resulted in the other entity's  acquiring
         its Twenty Percent (20%) interest;

                  (3) The other  entity shall not have (A) received the benefit,
         directly or indirectly (except  proportionately  as a stockholder),  of
         any loans, advances,  guarantees, pledges or other financial assistance
         or tax credits provided by the Corporation or (B) made any major change
         in the  Corporation's  business or equity capital  structure without in
         either case the  approval  of at least a majority of all the  Directors
         and at  least  two-thirds  of the  continuing  Directors  prior  to the
         consummation of the business combination; and

                  (4) A proxy  statement  responsive to the  requirements of the
         Securities  Exchange  Act of 1934  shall  have  been  mailed  to public
         stockholders   of  the   Corporation  for  the  purpose  of  soliciting
         stockholder  approval  of  the  business  combination  and  shall  have
         contained   at  the  front   thereof,   in  a  prominent   place,   any
         recommendations  as to  the  advisability  (or  inadvisability)  of the
         business combination that the continuing Directors, or any of them, may
         choose  to  state  and,  if  deemed  advisable  by a  majority  of  the
         continuing Directors, an opinion of a reputable investment banking firm
         as to the fairness of the terms of the business  combination,  from the
         point of view of the remaining  public  stockholders of the Corporation
         (the investment banking firm to be selected by a majority

                                     - 10 -
of the  continuing  Directors  and to be paid a reasonable  fee for its
         services by the Corporation upon receipt of the opinion).

         The  provisions of this Article  SEVENTH shall also apply to a business
combination  with any  other  entity  that at any  time has been the  beneficial
owner,  directly  or  indirectly,  of more  than  Twenty  Percent  (20%)  of the
outstanding  shares  of  the  Corporation  entitled  to  vote  in  elections  of
Directors,  considered  for the purposes of this  Article  SEVENTH as one class,
notwithstanding  the fact that the other  entity has  reduced  its  shareholders
below Twenty  Percent (20%) if, as of the record date for the  determination  of
stockholders entitled to notice of and to vote on the business combination,  the
other entity is an "affiliate" (as hereinafter defined) of the Corporation.

         (b) As used in this Article SEVENTH,  (1) the term "other entity" shall
include any corporation,  person or other entity and any other entity with which
it or its  "affiliate"  or  "associate"  (as defined  below) has any  agreement,
arrangement,  or  understanding,  directly  or  indirectly,  for the  purpose of
acquiring,  holding, voting, or disposing of shares of the Corporation,  or that
is its  "affiliate"  or  "associate" as those terms are defined in Rule 12b-2 of
the General Rules and Regulations  under the Securities  Exchange Act of 1934 as
in effect on  September 1, 1986,  together  with the  successors  and assigns of
those persons in any transaction or series of

                                     - 11 -
transactions not involving a public offering of the Corporation's  shares within
the meaning of the  Securities  Act of 1933; (2) an other entity shall be deemed
to be the  beneficial  owner of any  shares  of the  Corporation  that the other
entity (as defined above) has the right to acquire  pursuant to any agreement or
upon exercise of conversion rights,  warrants or options, or otherwise;  (3) the
outstanding  shares of any class of the Corporation  shall include shares deemed
owned  through  application  of clause (2) above but shall not include any other
shares  that may be  issuable  pursuant  to any  agreement  or upon  exercise of
conversion  rights,  warrants or options,  or otherwise;  (4) the term "business
combination"  shall  include (A) the sale,  exchange,  lease,  transfer or other
disposition by the  Corporation of all, or  substantially  all, of its assets or
business to any other entity,  (B) the  consolidation of the Corporation with or
its merger into any other  entity,  (C) the merger into the  Corporation  of any
other entity,  or (D) a combination or majority  share  acquisition in which the
Corporation  is the  acquiring  corporation  and its voting shares are issued or
transferred to any other entity or to stockholders of any other entity,  and the
term "business combination" shall also include any agreement,  contract or other
arrangement with an other entity providing for any of the transactions described
in (A) through (D) of this clause (4); (5) the term "continuing  Director" shall
mean either a person who was a member of the Corporation's Board of

                                     - 12 -
Directors on August 15, 1986,  or a person who was elected to the  Corporation's
Board of Directors by the public  stockholders of the  Corporation  prior to the
time when the other entity acquired in excess of five percent (5%) of the shares
of the Corporation entitled to vote in the election of Directors, considered for
the purposes of this Article  SEVENTH as one class,  or a person  recommended to
succeed a continuing Director by a majority of the continuing Directors; and (6)
for the purposes of Article  SEVENTH,  Section (a),  clause (1), the term "other
consideration  to be  received"  shall mean shares of the  Corporation's  Common
Stock retained by its existing  public  stockholders  in the event of a business
combination  with the other  entity in which the  Corporation  is the  surviving
corporation.

         (c) A majority  of the  continuing  Directors  shall have the power and
duty to  determine  for the purposes of this  Article  SEVENTH,  on the basis of
information known to them,  whether (1) the other entity  beneficially owns more
than Twenty Percent (20%) of the outstanding shares of the Corporation  entitled
to vote in elections of  Directors,  (2) an other  entity is an  "affiliate"  or
"associate"  (as  defined  above)  of  another,  or (3) an other  entity  has an
agreement, arrangement or understanding with another.

                                     - 13 -
(d) Nothing  contained  in this Article  SEVENTH  shall be construed to
relieve any other entity from any fiduciary obligation imposed by law.

         EIGHTH:  Subject  to the last  sentence  of this  Article  EIGHTH,  the
Corporation  reserves the right to amend and repeal any  provision  contained in
this Certificate of Incorporation including,  without limiting the generality of
the foregoing,  the addition of a provision  requiring a  supermajority  vote of
stockholders  to remove  Directors.  The provisions set forth in Articles SIXTH,
SEVENTH and this Article EIGHTH of this Certificate of Incorporation  may not be
repealed  or amended in any  respect,  unless  such  action is  approved  by the
affirmative vote of the holders of Sixty-Six and Two-Thirds Percent (66-2/3%) of
all  shares of the  Corporation  entitled  to vote in  elections  of  Directors,
considered for purposes of this Article EIGHTH as one class.

         NINTH: No Director of this  Corporation  shall be personally  liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a  Director;  provided,  however,  that  this  Article  NINTH  shall not
eliminate the liability of a Director (a) for any breach of the Director's  duty
of loyalty to the Corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of

                                     - 14 -
law, (c) under Section 174 of the General  Corporation  Law of Delaware,  or (d)
for any  transaction  from  which the  Director  derived  an  improper  personal
benefit.

         (4) In accordance  with the  applicable  provisions of Sections 242 and
245 of the  General  Corporation  Law of the State of  Delaware,  this  Restated
Certificate  of  Incorporation  has been duly  adopted by the  Directors  of the
Corporation and by vote of the stockholders.

         IN  WITNESS  WHEREOF,  said  HEALTHSOUTH  Corporation  has  caused  its
corporate  seal to be  hereunto  affixed  and this  Certificate  to be signed by
Anthony J. Tanner,  its  Executive  Vice  President,  and attested by William W.
Horton,  its Group Vice  President--Legal  Services,  this 17th day of  January,
1996.

                                       HEALTHSOUTH Corporation

                                       By   /s/ ANTHONY J. TANNER
                                          -------------------------
                                                Anthony J. Tanner
                                             Executive Vice President

[ CORPORATE SEAL ]

ATTEST:

By  /s/ WILLIAM W. HORTON
  ------------------------
      William W. Horton
     Assistant Secretary

                                     - 15 -