UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 24, 2017
 
 
U.S. PHYSICAL THERAPY, INC.
(Exact name of registrant as specified in its charter)
 
 
 
         
Nevada
 
1-11151
 
76-0364866
(State or other jurisdiction
of incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
     
1300 West Sam Houston Parkway South,
Suite 300, Houston, Texas
 
77042
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant's telephone number, including area code: (713) 297-7000
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 
Item 5.02   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
 
                Compensatory Arrangements of Executive Officers.
 
       
        On March 24, 2017, the Compensation Committee approved and adopted the following incentive plans for the Senior Management which includes Mr. Reading, Chief Executive Officer ("CEO"), Mr. McAfee, Chief Financial Officer ("CFO"), and Mr. McDowell, Chief Operating Officer ("COO").

 
 • Objective Long-Term Incentive Plan for Senior Management for 2017
• Discretionary Long-Term Incentive Plan for Senior Management for 2017
• Objective Cash Bonus Plan for Senior Management for 2017
• Discretionary Cash Bonus Plan for Senior Management for 2017
 
The above plans are included as Exhibits 99.1, 99.2, 99.3 and 99.4 to this report. The discussions set forth below are qualified in their entirety by reference to such exhibits.
 
Objective Long- Term Incentive Plan for Senior Management for 2017 ("Objective LTIP"). Under the Objective LTIP, Executives have an opportunity to receive restricted stock awards ("RSAs") under the Amended and Restated 2003 Stock Incentive Plan, as further amended effective April 1, 2013 ("2003 Plan"), to be granted by the Compensation Committee (as the term "Committee" is defined in Section 1.8 of the 2003 Plan) in the first quarter of 2018. The following maximum amounts of RSAs may be granted under this Objective LTIP based on the Company’s 2017 consolidated pre-tax income (before charges/credits for changes in Mandatorily Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2017 related to this Objective Bonus Plan and all other management incentive plans): CEO = 11,000 shares; CFO = 5,500 shares; COO = 5,500 shares. For a complete description of the Objective LTIP refer to Exhibit 99.1, which plan is incorporated herein by reference.
 
Discretionary Long-Term Incentive Plan for Senior Management for 2017 ("Discretionary LTIP"). The Committee may, in its judgment and at its sole discretion, grant RSAs under the 2003 Plan, based on its evaluation of an Executive's performance and the collective corporate performance for 2017. The following shall be the maximum amount of shares that may be awarded under this program to each specified participant: CEO = up to 11,000 shares; CFO = up to 5,500 shares; COO = up to 5,500 shares. For a complete description of the Discretionary LTIP refer to Exhibit 99.2, which plan is incorporated herein by reference.
 
Objective Cash Bonus Plan for Senior Management for 2017 ("Objective Cash Bonus Plan"). Under the Objective Cash Bonus Plan, Executives have an opportunity to receive a cash bonus of up to 75% of the Executive's annual base salary for 2017 ("Base") based on the Company’s 2017 consolidated pre-tax income (before charges/credits for changes in Mandatorily Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2017 related to this Objective Bonus Plan and all other management incentive plans). The Base for Mr. Reading is $725,000, Mr. McAfee $470,000 and Mr. McDowell $470,000. For a complete description of the Objective Cash Bonus Plan refer to Exhibit 99.3, which plan is incorporated herein by reference.
 
Discretionary Cash Bonus Plan for Senior Management for 2017 ("Discretionary Cash Bonus Plan"). Under the Discretionary Cash Bonus Plan, each Executive has the potential to be awarded a cash bonus of up to 50% of his Base. This Discretionary Cash Bonus Plan shall be administered by the Committee and the Compensation Committee shall have the sole authority to grant awards and establish the amounts payable under this plan, make all determinations and interpret and construe all of the terms of this plan. For a complete description of the Discretionary Cash Bonus Plan refer to Exhibit 99.4, which plan is incorporated herein by reference.

 
 
 
Item 9.01
 
 
 
FINANCIAL STATEMENTS AND EXHIBITS
 
     
Exhibits
  
Description of Exhibits
   
99.1
  
  U. S. Physical Therapy, Inc. Long-Term Incentive Plan for Senior Management for 2017, effective March 24, 2017.
 99.2    U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2017, effective March 24, 2017.
 99.3    U. S. Physical Therapy, Inc. Objective Cash Bonus Plan for Senior Management for 2017, effective March 24, 2017
 99.4    U. S. Physical Therapy, Inc. Discretionary Cash Bonus Plan for Senior Management for 2017, effective March 24, 2017
 
** Furnished herewith.
 

 
SIGNATURE
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.
 
             
 
 
 
 
U.S. PHYSICAL THERAPY, INC.
       
Dated: March 30, 2017
 
 
 
By:
 
/s/ LAWRANCE W. MCAFEE
 
 
 
 
 
 
Lawrance W. McAfee
 
 
 
 
 
 
Chief Financial Officer
 
 
 
 
 
 
(duly authorized officer and principal financial
           and accounting officer)


















 
                                                                                                                                                                                                                                                            Exhibit 99.1

 
U.S. PHYSICAL THERAPY, INC. ("USPH")
OBJECTIVE LONG-TERM INCENTIVE PLAN FOR SENIOR MANAGEMENT
FOR 2017 ("Objective LTIP")

Purpose :  To incentivize and retain Executives eligible for this Objective LTIP, to achieve certain corporate earnings criteria and reward Executives when such criteria are achieved, and to align the long-term interests of Executives and shareholders of USPH by compensating the Executives in shares of USPH stock that vest over time, thereby increasing the Executives' equity interest in USPH.

Effective Date :  The effective date of this Objective LTIP and the establishment of performance goals and formula for the amount payable hereunder is March 24, 2017.

Eligibility :  The Executives of USPH eligible for this Objective LTIP are the Chief Executive Officer ("CEO"), the Chief Financial Officer ("CEO") and the Chief Operating Officer ("COO").

Vesting and Other Terms and Provisions :  Under this Objective LTIP, Executives have an opportunity to receive Restricted Stock Awards ("RSAs") under the U. S. Physical Therapy, Inc. 2003 Stock Incentive Plan (as amended) (the "2003 Plan"), to be granted by the Compensation Committee of the Board of Directors of USPH (as the term "Committee" is defined in Section 1.8 of the 2003 Plan) in the first quarter of 2018. Before any RSAs are granted, the Compensation Committee shall certify in writing that the performance goals have been obtained in accordance with Code Section 162(m), and any RSAs to be granted hereunder shall be made no later than March 15, 2018. The Executive must be employed by USPH or its affiliates from the Effective Date through the date of the grant to receive a RSA. All RSAs shall be granted subject to the terms of the 2003 Plan and the specific terms and conditions (including without limitation, restrictions in transfer and substantial risk of forfeiture) as determined by the Compensation Committee in its sole discretion. RSAs that are granted under this Objective LTIP will vest evenly over 16 quarters, beginning April 1, 2018 and ending January 1, 2022. To vest, Executive must be a full-time employee/officer of USPH at vesting date, except in the event of Death or Disability (as defined in the Executive's employment agreement with USPH) which will cause all unvested RSAs to vest. In the event of a Change in Control (as defined in Executive's employment agreement) occurring after the grant date while the Executive is a full-time employee/officer of USPH, any unvested RSAs will be fully vested at or contemporaneous and in conjunction with such Change in Control. The terms set forth above and all other terms of any RSA grant shall be set forth in a Restricted Stock Agreement between the Executive and USPH, to be signed by the Executive and by the Chairman of the Compensation Committee (on behalf of USPH).

Administration : The Compensation Committee has established this Objective LTIP under Article VII of the 2003 Plan and the RSAs, if any, granted hereunder are intended to meet the performance-based exception under Code Section 162(m). The Compensation Committee has authority to administer this Objective LTIP, grant awards and decide all questions of interpretation; provided, however, that the Compensation Committee shall have no discretion to increase the maximum award amounts that are payable as provided below and/or otherwise increase or modify an award which would disqualify the award for the performance-based exception under Code Section 162(m). There will be no acceleration of the grant of an award hereunder due to the Executive's termination for cause or without good reason or Executive's voluntary retirement that would violate Code Section 162(m) as provided under Revenue Ruling 2008-13. The Compensation Committee's determinations and interpretations under this Objective LTIP shall be final and binding on all persons.

Objective Goals And Amounts That May Be Awarded :  The maximum amount of RSAs that may be granted under this Objective LTIP based upon the achievement of the performance goals relating to 2017 USPH consolidated pre-tax income (before charges/credits for changes in Mandatorily Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2017 related to this and all other management incentive plans) are as follows: CEO = 11,000 shares; CFO = 5,500 shares; COO = 5,500 shares.

Performance Goals   Objective
      2017   Amount of Maximum Shares
     Pre-tax Income   That May Be Awarded
            $39,866,800
15.0%
$40,059,000
17.0%
$40,252,800
19.0%
$40,484,400
21.0%
$40,677,400
23.0%
$40,909,000
25.0%
$41,140,600
28.0%
$41,333,600
31.0%
$41,565,200
34.0%
$41,758.200
38.0%
$41,989,800
42.0%
$42,221,400
46.0%
$42,414,400
50.0%
$42,646,000
54.0%
$42,839,000
58.0%
$43,070,600
62.0%
$43,302,200
66.0%
$43,495,200
70.0%
$43,726,800 and over
75.0%

 
     
                                                                                                                                                                                                                                 
                                                                                                                                                          Exhibit 99.2

U.S. PHYSICAL THERAPY, INC. ("USPH")
DISCRETIONARY LONG-TERM INCENTIVE PLAN FOR SENIOR MANAGEMENT
FOR 2017 ("Discretionary LTIP")

Purpose :  To incentivize Executives eligible for this Discretionary LTIP to achieve certain strategic, operational, business growth & development and other criteria and reward Executives when such criteria are achieved, and to align the long-term interests of Executives and shareholders of USPH by compensating the Executives in shares of USPH stock that vest over time, thereby increasing the Executives' equity interest in USPH.

Effective Date :  This Discretionary LTIP is established effective March 24, 2017.

Description of Discretionary Awards Criteria :  In addition to any other awards under the U.S. Physical Therapy, Inc. 2003 Stock Incentive Plan (as amended) (the "2003 Plan") or any other long term incentive plan or bonus plan, policy or program of USPH, and not in lieu of any other such award or payment, the Compensation Committee of the Board of Directors of USPH (as the term "Committee" is defined in Section 1.8 of the 2003 Plan) may, in its judgment and at its sole discretion, grant Restricted Stock Awards ("RSAs") under the 2003 Plan, based on its evaluation of an Executive's performance and the collective corporate performance for 2017. The factors to be considered include:

1.
General operational management effectiveness relative to external environment
2.
Growth in earnings power and cash flow from operations
3.
Accretive acquisitions
4.
Clinic productivity and efficiency improvements
5.
Initiatives to enhance the overall quality of patient care
6.
Manage organic growth in our existing business segments
7.
Development of add-ons and/or new services that compliment or enhance existing business.
8.
Creative and effective sales and marketing
9.
Same store growth
10.
Regulatory compliance
11.
Maintaining adequate internal controls
12.
Management development and succession planning
13.
Corporate productivity and efficiency improvements
14.
Dividends, share repurchases and other effective means to deploy capital
15.
Investor relations and communication
16.
Cash flow, including management of accounts receivables
17.
Stock price performance


Participants :  Executives who will have an opportunity to be granted RSAs under this Discretionary LTIP shall be the Chief Executive Officer ("CEO"), the Chief Financial Officer ("CFO") and the Chief Operation Officer ("COO"). The following shall be the maximum amount of shares that may be awarded under this program to each specified participant: CEO = up to 11,000 shares; CFO = up to 5,500 shares; COO = up to 5,500 shares.

Administration :  The Compensation Committee shall administer this Discretionary LTIP. The Compensation Committee shall have the exclusive authority to interpret and construe the terms of this Discretionary LTIP and make all determinations under this plan, and its decisions shall be final and binding in all persons.


Award Grant Date :  Any RSAs granted under this program shall be granted under the 2003 Plan in the first quarter of 2018 after the Compensation Committee determines the amount, if any, of the RSAs to be granted to each participant but in all events on or before March 15, 2018. In addition, RSAs shall be granted only if the participant remains employed by USPH (or its affiliates) continuously from the Effective Date through the date of the grant of the RSA. All RSAs shall be granted in writing and subject to the terms of the 2003 Plan and the specific terms and conditions (including without limitation, restrictions in transfer and substantial risk of forfeiture) as determined by the Compensation Committee in its sole discretion. RSAs that are granted under this Objective LTIP will vest evenly over 16 quarters, beginning April 1, 2018 and ending January 1, 2022. To vest, Executive must be a full-time employee/officer of USPH at vesting date, except in the event of Death or Disability (as defined in the Executive's employment agreement with USPH) which will cause all unvested RSAs to vest. In the event of a Change in Control (as defined in Executive's employment agreement) occurring after the grant date while the Executive is a full-time employee/officer of USPH, any unvested RSAs will be fully vested at or contemporaneous and in conjunction with such Change in Control. The terms set forth above and all other terms of any RSA grant shall be set forth in a Restricted Stock Agreement between the Executive and USPH, to be signed by the Executive and by the Chairman of the Compensation Committee (on behalf of USPH).

Certain Tax Considerations :  The Compensation Committee in its discretion has determined that this program is not intended to meet the performance-based exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Any awards actually granted under this program shall be subject to Code Section 83(b).















                                                                                                                                                          Exhibit 99.3

U.S. PHYSICAL THERAPY, INC. ("USPH")
OBJECTIVE CASH BONUS PLAN FOR SENIOR MANAGEMENT
FOR 2017 ("OBJECTIVE BONUS PLAN")

Purpose :  To incentivize and retain Executives eligible for this Objective Bonus Plan to achieve certain corporate earnings criteria and reward Executive Officers of USPH when such criteria are achieved, and to align the long-term interests of Executives and shareholders of USPH.

Effective Date :  The effective date of this Objective Bonus Plan and the establishment of performance goals and formula for the amount payable hereunder is March 24, 2017.

Eligibility :  The Executives of USPH eligible for this Objective Bonus Plan are the Chief Executive Officer ("CEO"), the Chief Financial Officer ("CFO") and the Chief Operating Officer ("COO").

Description, Conditions and Payment Date :  Under this Objective Bonus Plan, Executives have an opportunity to receive a "Cash Bonus" of up to 75% of the Executive's annual base salary for 2017 ("Base") as performance awards under the U. S. Physical Therapy, Inc. 2003 Stock Incentive Plan (as amended). All amounts earned will be awarded by the Compensation Committee of the Board of Directors of USPH (the "Compensation Committee") in the first quarter of 2018. Before any Cash Bonus is paid, the Compensation Committee shall certify in writing that the performance goals have been obtained in accordance with Code Section 162(m), and any Cash Bonus paid hereunder shall be made in a lump-sum amount no later than March 15, 2018. The Executive must be continuously employed by USPH or its affiliates from the Effective Date through December 31, 2017 to receive the Cash Bonus.

Administration :  The Compensation Committee has authority to administer this Objective Bonus Plan, grant awards and decide all questions of interpretation; provided, however, that the Compensation Committee shall have no discretion to increase the maximum award amounts that are payable as provided below and/or otherwise increase or modify an award which would disqualify the award for the performance-based exception under Code Section 162(m). The Compensation Committee's determinations and interpretations under this Objective Bonus Plan shall be final and binding on all persons.

Objective Bonus Calculation :  Based on 2017 USPH consolidated pre-tax income (before charges/credits for changes in Mandatorily Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2017 related to this and all other management incentive plans), the goals and amounts payable are as follows:


      2017   Cash Bonus
 Pre-tax income         (Compared to Base)

$39,866,800
15.0%
$40,059,000
17.0%
$40,252,800
19.0%
$40,484,400
21.0%
 
$40,677,400
23.0%
$40,909,000
25.0%
$41,140,600
28.0%
$41,333,600
31.0%
$41,565,200
34.0%
$41,758.200
38.0%
$41,989,800
42.0%
$42,221,400
46.0%
$42,414,400
50.0%
$42,646,000
54.0%
$42,839,000
58.0%
$43,070,600
62.0%
$43,302,200
66.0%
$43,495,200
70.0%
$43,726,800 and over
75.0%

No Trust or Fund :  There shall be no separate trust or fund for this Objective Bonus Plan. Any amount payable hereunder shall be an unfunded obligation of USPH and shall be payable out of the general assets of USPH and no amount payable shall be assignable by the participant.





                                                                                                                                                  Exhibit 99.4


U.S. PHYSICAL THERAPY, INC. ("USPH")
DISCRETIONARY CASH BONUS PLAN FOR SENIOR MANAGEMENT
FOR 2017 ("DISCRETIONARY BONUS PLAN")

Purpose :  The purpose of this Discretionary Bonus Plan is to retain and incentivize the Executive Officers of USPH by providing an annual cash bonus opportunity to the Executives to reward them when certain individual and corporate subjective performance measures are achieved.

Participants :  Executives of USPH who shall be "Participants" in this Discretionary Bonus Plan are the Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and Chief Operating Officer ("COO"). In addition to awards under any other plan or program at USPH for which such Executives are eligible and not in lieu thereof, each Participant in this Discretionary Bonus Plan has the potential to be awarded a "Subjective Bonus" of up to 50% of the Participant's annual base salary for 2017 ("Base") pursuant to the subjective criteria as set forth below.

Effective Date :  This Discretionary Bonus Plan is established effective March 24, 2017.

Administration :  The Compensation Committee of the Board of Directors of USPH (the "Compensation Committee") shall administer this Discretionary Bonus Plan, and the Compensation Committee shall have the sole authority to interpret and construe all of the terms of this Discretionary Bonus Plan, establish the criteria for awards, determine the amounts payable under this plan, and grant awards. The amount, if any, of the Subjective Bonus payable to each participant in this Discretionary Bonus Plan shall be determined by the Compensation Committee in its sole discretion based upon subjective criteria described below. All decisions of the Compensation Committee shall be final and binding on all persons.

Payment Date :  All amounts payable hereunder shall be paid in cash in a lump sum amount after the Compensation Committee has determined that goals have been met and has calculated the amounts payable hereunder, in the first quarter of 2018 but no later than March 15, 2018. A Subjective Bonus shall be payable only if the Participant remains continuously employed from the Effective Date through the date of the determination of the amount payable by the Compensation Committee.

Subjective Bonus Calculation :  The Subjective Bonus criteria that have been established by the Compensation Committee and shall be used in the Compensation Committee's sole discretion to award up to 50% of Base for each participant are as follows:

1.
General operational management effectiveness relative to external environment
2.
Growth in earnings power and cash flow from operations
3.
Accretive acquisitions
4.
Clinic productivity and efficiency improvements
5.
Initiatives to enhance the overall quality of patient care
6.
Manage organic growth in our existing business segment
7.
Development of add-ons and/or new services that compliment or enhance existing business.
8.
Creative and effective sales and marketing
9.
Same store growth
10.
Regulatory compliance
11.
Maintaining adequate internal controls
12.
Management development and succession planning
 
13.
Corporate productivity and efficiency improvements
14.
Dividends, share repurchases and other effective means to deploy capital
15.
Investor relations and communication
16.
Cash flow, including management of accounts receivables
17.
Stock price performance

No Trust or Fund :  There shall be no separate trust or fund for this Discretionary Bonus Plan. Any amount payable hereunder shall be an unfunded obligation of USPH and shall be payable out of the general assets of USPH and no amount payable shall be assignable by the participant.

Certain Tax Considerations :  The Compensation Committee in its discretion has determined that this program is not intended to meet the performance-based exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").