Exhibit 10.1.4
 
This document is part of a prospectus covering securities that have been
registered under the Securities Act of 1933, as amended. This document may be
used only in connection with our offer and sale of the securities hereunder. You
cannot use this document to offer or sell the securities that you acquire
hereunder to anyone else. A paper version of this document and the other
documents constituting the complete prospectus are available upon request by
contacting Vicki Owens in the Human Resources department.

HEALTHSOUTH CORPORATION
 
PERFORMANCE SHARE UNIT AWARD AGREEMENT
(Pursuant to the Amended and Restated 2008 Equity Incentive Plan)
 
This Performance Share Unit Award Agreement (this “Award”) is granted in
Birmingham, Alabama by HealthSouth Corporation, a Delaware corporation (the
“Corporation”), pursuant to one or more Summaries of Grant (collectively, the
“Summary”) previously delivered to you as the person to whom the Option is
granted (“Grantee”) and/or displayed at the website of Smith Barney Benefit
Access® (www.benefitaccess.com). The Summary, which specifies the name of
Grantee, the date as of which the grant is made (the “Date of Grant”), the
relevant Performance Goals, the Performance Period, and other specific details
of the Award, and the acceptance of the Summary are incorporated herein by
reference.
 
1. GRANT OF AWARD. Upon the terms and conditions set forth herein and in
the Corporation’s Amended and Restated 2008 Equity Incentive Plan (the “Plan”),
a copy of which has been made available to Grantee electronically, the
Corporation hereby grants to Grantee an award of the number of performance share
units (the “Performance Share Units”) set forth in the Summary. The Award is
granted pursuant to the Plan and is subject in its entirety to all applicable
provisions of the Plan. Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Plan. The Corporation and Grantee agree
to be bound by all of the terms and conditions of the Plan, as amended from time
to time in accordance with its terms.
 
The Performance Goals applicable to the Performance Share Units and the
Performance Period are set forth in the Summary and incorporated by reference
herein and made a part hereof. Depending upon the extent, if any, to which the
Performance Goals have been achieved, and subject to compliance with the
requirements of Section 2 below, each Performance Share Unit shall entitle
Grantee to receive, at such time as is determined in accordance with the
provisions of Section 3 below, between 0 and 2 fully paid, non-assessable shares
of common stock, par value $0.01 per share, of the Corporation (the “Restricted
Common Stock”). The Committee shall, as soon as practicable following the last
day of the Performance Period, certify (i) the extent, if any, to which, each of
the Performance Goals has been achieved with respect to the Performance Period;
and (ii) the number of shares of Restricted Common Stock, if any, which, subject
to compliance with the requirements of Section 2, Grantee shall be entitled to
receive with respect to each Performance Share Unit (with such number of shares
of Restricted Common Stock being hereafter referred to as the “Share Delivery
Factor”). Such certification shall be final, conclusive and binding on Grantee,
and on all other persons, to the maximum extent permitted by law.

 
 

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Exhibit 10.1.4
 
2. VESTING OF PERFORMANCE SHARE UNITS.
 
(a)           The Performance Share Units are subject to forfeiture to the
Corporation until they become non-forfeitable in accordance with this Section 2.
Except as provided in this Section 2 and Section 15.8 of the Plan, the risk of
forfeiture will lapse on all Performance Share Units, and all Performance Share
Units shall thereupon become vested, only if Grantee remains employed by the
Corporation until the end of the Performance Period. The delivery of Restricted
Common Stock with respect to such Performance Share Units shall be made
following vesting based upon the extent to which the Performance Goals have been
achieved and as provided in Section 3 hereof.
 
(b) In the event that (i) the Corporation terminates Grantee’s employment with
the Corporation for any reason prior to the end of the Performance Period or
(ii) Grantee terminates employment with the Corporation for any reason (other
than death, Disability or Retirement) prior to such date, all Performance Share
Units shall be cancelled and forfeited, effective as of Grantee’s termination of
employment.
 
3. DELIVERY OF SHARES.
 
(a)           Except as provided in the following subsection (b) and Section
15.8 of the Plan, a certificate in the number of whole shares of Restricted
Common Stock (if any) equal to the product of (i) the number of vested
Performance Share Units multiplied by (ii) the Share Delivery Factor (with such
product rounded up to the next whole number) shall be registered in the name of
Grantee on the stock transfer books of the Corporation effective as of the date
of the Committee’s determination of the achievement of the Performance Goals as
provided for in Section 1 above. However, any certificates issued with respect
to Restricted Common Stock shall be held by the Corporation in escrow under the
terms hereof until the Restricted Common Stock becomes vested on the first
anniversary of the end of the Performance Period, at which time the Restricted
Common Stock shall become “vested Restricted Common Stock” and shall be
distributed to Grantee. Prior to becoming vested, the Restricted Common Stock
and any interest therein, may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution, so long as Grantee is employed by or providing services to the
Corporation as of the relevant date. In order to reflect the restrictions on
disposition of the shares of Restricted Common Stock issued pursuant to this
Award, the stock certificates for the shares of Restricted Common Stock issued
pursuant to this Award will be endorsed with a restrictive legend, in
substantially the following form:
 
"THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS, INCLUDING FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST
TRANSFER (THE “RESTRICTIONS”), CONTAINED IN THE HEALTHSOUTH CORPORATION AMENDED
AND RESTATED 2008 EQUITY INCENTIVE PLAN AND AN AGREEMENT ENTERED INTO BETWEEN
THE REGISTERED OWNER AND HEALTHSOUTH CORPORATION. ANY ATTEMPT TO DISPOSE OF
THESE SHARES IN CONTRAVENTION OF THE APPLICABLE RESTRICTIONS, INCLUDING BY WAY
OF SALE ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHERWISE, SHALL BE NULL,
VOID AND WITHOUT EFFECT.”
 
 
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Exhibit 10.1.4
 
 
Such legend shall be removed only on and after the date when the Restricted
Shares have become vested Restricted Common Stock. Grantee shall be entitled to
vote all Restricted Common Stock, and shall be entitled to receive, free of all
restrictions, ordinary cash dividends and dividends in the form of shares of
Common Stock thereon if any, to the extent permitted in the Plan. Grantee’s
right to receive any extraordinary dividends or other distributions with respect
to Restricted Common Stock prior to the shares becoming vested Restricted Common
Stock shall be at the sole discretion of the Committee, but in the event of any
such extraordinary dividends or distributions are paid to the holders of Common
Stock, the Committee shall take such action as may be appropriate to preserve
the value of, and prevent the unintended enhancement of the value of, the
Restricted Common Stock.
 
(b)           In the event that (i) the Corporation terminates Grantee’s
employment with the Corporation for any reason prior to the first anniversary of
the end of the Performance Period; or (ii) the Grantee terminates employment
with the Corporation for any reason (other than death) prior to such date, all
Restricted Common Stock held in escrow shall be cancelled and forfeited,
effective as of Grantee’s termination of employment.
 
 
(c)           Notwithstanding the foregoing subsection (b), if Grantee dies
prior to the first anniversary of the end of the Performance Period, the
certificate (or the indicia of ownership, as the case may be) for such number of
whole shares of Common Stock, shall be delivered (or provided, as the case may
be) to Grantee’s beneficiary or estate provided, that the beneficiary (or
estate) has otherwise complied with the requirements of Section 8 of this Award.
 
4. TAX CONSEQUENCES.
 
(a)           Grantee agrees to notify the Corporation immediately if Grantee
recognizes taxable income generated by the grant of this Award by the
Corporation to the Recipient pursuant to an election under Section 83(b) of the
Code.
 
(b)           Grantee acknowledges that the Corporation has not advised Grantee
regarding Grantee’s income tax liability in connection with the grant or vesting
of the Performance Share Units and the delivery of shares of Restricted Common
Stock in connection therewith. Grantee has reviewed with Grantee’s own tax
advisors the federal, state, and local and tax consequences of the grant and
vesting of the Performance Share Units and the delivery of shares of Restricted
Common Stock in connection therewith as contemplated by this Award. Grantee is
relying solely on such advisors and not on any statements or representations of
the Corporation or any of its agents. Grantee understands that the Grantee (and
not the Corporation) shall be responsible for Grantee’s own tax liability that
may arise as a result of the transactions contemplated by this Award.
 
(c)           Grantee shall pay to the Corporation promptly upon request, and in
any event, no later than at the time the Corporation determines that Grantee
will recognize taxable income in respect of the Performance Share Units, an
amount equal to the taxes the Corporation determines it is required to withhold
under applicable tax laws with respect to the Performance

 
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Exhibit 10.1.4
 
Share Units. Such payment shall be made in the form of (i) cash, (ii) shares of
Common Stock already owned for at least six months, (iii) delivering to the
Corporation, or having the Corporation withhold, a portion of the shares of
Common Stock otherwise to be delivered to Grantee with respect to the
Performance Share Units sufficient to satisfy the minimum withholding required
with respect thereto to the extent permitted by the Corporation, or (iv) in a
combination of such methods, as irrevocably elected by Grantee prior to the
applicable tax due date with respect to the Performance Share Units.
 
5. TRANSFERABILITY.
 
(a)           Except as provided below, or except to the minimal extent required
by law, the Performance Share Units are nontransferable and may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
Grantee, except by will or the laws of descent and distribution, and upon any
such transfer, by will or the laws of descent and distribution (or upon such
transfer required by law), the transferee shall hold such Performance Share
Units subject to all the terms and conditions that were applicable to Grantee
immediately prior to such transfer.
 
(b)           Upon any transfer by will or the laws of descent and distribution
(or upon any such transfer required by law), such transferee shall take the
Performance Share Units and the shares delivered in connection therewith (the
“Transferee Shares”) subject to all the terms and conditions that were (or would
have been) applicable to the Performance Share Units and the Transferee Shares
immediately prior to such transfer.
 
6. RIGHTS OF GRANTEE. Prior to the issuance, if any, of shares of Restricted
Common Stock to Grantee pursuant to the provisions of Section 3, Grantee shall
not have any rights of a shareholder of the Corporation on account of the
Performance Share Units.
 
 
7. UNFUNDED NATURE OF PERFORMANCE SHARE UNITS. The Corporation will not
segregate any funds representing the potential liability arising under this
Award. Grantee’s rights in respect of this Award are those of an unsecured
general creditor of the Corporation. The liability for any payment under this
Award will be a liability of the Corporation and not a liability of any of its
officers, directors or affiliates.
 
 
8. SECURITIES LAWS. The Corporation may condition delivery of certificates for
shares of Restricted Common Stock delivered for any vested Performance Share
Units upon the prior receipt from Grantee of any undertakings which it may
determine are required to assure that the certificates are being issued in
compliance with federal and state securities laws.
 
9. SECURITIES COMPLIANCE. The Corporation shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Award, the Corporation shall not be
obligated to issue any restricted or unrestricted Common Stock or other
securities pursuant to this Award if the issuance thereof would result in a
violation of any such law. Subject to Section 3 hereof, in order to comply with
any applicable securities laws, Grantee agrees that the Restricted Common Stock
shall only be sold by Grantee following registration of such Shares under the
Securities Act of 1933, as amended, or pursuant to an exemption therefrom. If
required by the authorities of

 
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Exhibit 10.1.4
 
any state in connection with the issuance of the shares, the legend or legends
required by such state authorities will also be endorsed on all such
certificates.
 
10. ACCELERATED VESTING FOR A CHANGE IN CONTROL OR OTHER REASON. Notwithstanding
anything to the contrary contained in this Award, all of the Performance Share
Units issued to Grantee pursuant to this Award shall also become vested in
accordance with Sections 15.5, 15.6, and 15.7 of the Plan. The delivery of
shares of Common Stock with respect to such Performance Share Units shall be
made as promptly as practicable following the conclusion of the Performance
Period based upon the extent to which the Performance Goals have been achieved,
unless otherwise determined by the Committee. With respect to Performance
Objectives applicable to any Award for which the performance period is not
complete, the Committee shall have the discretionary authority to determine
whether, and if so, the extent to which, (1) the performance period or the
Performance Objectives shall be deemed to be satisfied or waived following a
Change in Control, and (2) the Performance Objectives shall be modified,
adjusted or changed on account of the Change in Control. For purposes of this
Award, “Retirement” shall mean the voluntary termination of employment by a
Participant after attaining (a) age 65 or (b) in the event that the Participant
has been employed by the Company for ten (10) or more years on the date of such
termination, age 60.

 
11. APPLICABLE RECOUPMENT POLICY. Notwithstanding anything to the contrary
contained in this Award, this Award is subject to the terms of the Compensation
Recoupment Policy (the “Clawback Policy”) adopted by the Board of Directors of
the Corporation (the “Board”), published with other Plan materials on the
website of Smith Barney Benefit Access® (www.benefitaccess.com), and modified
from time to time to comply with applicable requirements of law or the listing
standards of The New York Stock Exchange. This Award may be cancelled in
accordance with the Clawback Policy in the event the Board or a committee
thereof determines that one of the events enumerated in the Clawback Policy has
occurred and that it is in the best interests of the Corporation to do so.
 
12. BINDING AGREEMENT. This Award shall be binding upon and shall inure to the
benefit of any successor or assign of the Corporation, and, to the extent herein
provided, shall be binding upon and inure to the benefit of Grantee’s
beneficiary or legal representatives, as the case may be.
 
13. ENTIRE AGREEMENT; AMENDMENT. This Award contains the entire agreement of the
parties with respect to the Performance Share Units granted hereby. This Award
may be amended in accordance with the provisions of Section 17.2 of the Plan.
 
14. ACCEPTANCE OF AGREEMENT. By accepting this Award electronically, including,
without limitation, by electronic acceptance by e-mail, Grantee confirms that
this Award is in accordance with Grantee’s understanding, and that Grantee
agrees to the terms of this Award, the Summary, and the terms of the Plan.
 
15. ADMINISTRATION OF THE PLAN; INTERPRETATION OF THE PLAN AND THE AWARD. The
Plan shall be administered by the Committee, pursuant to Section 5 of the Plan.
Furthermore, the interpretation and construction of any provision of the Plan or
of the Award by the Committee shall be final, conclusive and binding. In the
event there is any inconsistency or discrepancy between the provisions of this
Award and the provisions of the Plan, the provisions of the Plan shall prevail.

 
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