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 8, 2019

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:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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 4, 2019, the Compensation Committee approved and adopted the following incentive plans, effective March 4, 2019, for the Senior Management which includes Mr. Christopher Reading, Chief Executive Officer ("CEO"), Mr. Lawrance McAfee, Chief Financial Officer ("CFO"), Mr. Glenn McDowell, Chief Operating Officer - West ("COO West") and Mr. Graham Reeve, Chief Operating Officer – East (“COO East”), hereinafter referred to jointly as “Executives”.

 
·
Objective Long-Term Incentive Plan for Senior Management for 2019

 
·
Discretionary Long-Term Incentive Plan for Senior Management for 2019

 
·
Objective  Cash/RSA Bonus Plan for Senior Management for 2019

 
·
Discretionary Cash/RSA Bonus Plan for Senior Management for 2019

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 2019 ("Objective LTIP"). Under the Objective LTIP, Executives have an opportunity to receive restricted stock awards ("RSAs") under the 2003 Stock Incentive Plan (as amended) (the "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 2020. The following maximum amounts of RSAs may be granted under this Objective LTIP based on the Company’s 2019 consolidated pre-tax income (before charges/credits for changes in Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2019 related to this Objective Bonus Plan and all other management incentive plans):   CEO = 8,800 shares; CFO = 4,400 shares; COO East = 4,400 shares; and COO West 4,400 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 2019 ("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 individual Executive's performance and the collective corporate performance for 2019.   The following shall be the maximum amount of shares that may be awarded under this program to each specified participant:   CEO = up to 8,800 shares; CFO = up to 4,400 shares; COO West = up to 4,400 shares; and COO East = up to 4,400 shares. For a complete description of the Discretionary LTIP refer to Exhibit 99.2, which plan is incorporated herein by reference.

Objective Cash/RSA Bonus Plan for Senior Management for 2019 ("Objective Cash/RSA Bonus Plan") . Under the Objective Cash/RSA Bonus Plan, Executives have an opportunity to receive a bonus of up to 75% of the Executive's annual base salary for 2019 ("Base") based on the Company’s 2019 consolidated pre-tax income (before charges/credits for changes in Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2019 related to this Objective Bonus Plan and all other management incentive plans). This bonus is payable either in cash or by a grant of RSAs, as determined by the Committee in its sole discretion.   The Base for Mr. Reading is $770,000, Mr. McAfee $500,000, Mr. McDowell $500,000 and Mr. Reeve $470,000. For a complete description of the Objective Cash/RSA Bonus Plan refer to Exhibit 99.3, which plan is incorporated herein by reference.

Discretionary Cash/RSA Bonus Plan for Senior Management for 2019 ("Discretionary Cash/RSA Bonus Plan") . Under the Discretionary Cash/RSA Bonus Plan, each Executive has the potential to be awarded a bonus of up to 50% of his Base, payable either in cash or by a grant of RSAs, as determined by the Committee in its sole discretion.   This Discretionary Cash/RSA 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/RSA 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
   
U. S. Physical Therapy, Inc. Objective Long-Term Incentive Plan for Senior Management for 2019, effective March 4, 2019.
   
U. S. Physical Therapy, Inc. Discretionary Long-Term Incentive Plan for Senior Management for 2019, effective March 4, 2019.
   
U. S. Physical Therapy, Inc. Objective Cash/RSA Bonus Plan for Senior Management for 2019, effective March 4, 2019.
   
U. S. Physical Therapy, Inc. Discretionary Cash/RSA Bonus Plan for Senior Management for 2019, effective March 4, 2019.

* Filed 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 8, 2019
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 2019 (“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 4, 2019.

Eligibility :  The Executives of USPH eligible for this Objective LTIP are the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”), the Chief Operating Officer West (“COO West”) and the Chief Operating Officer East (“COO East”). Terms not defined herein shall have the meaning of such term as defined in the U.S. Physical Therapy, Inc. 2003 Stock Incentive Plan (as amended) (the “2003 Plan”).

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 2020. 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, 2020 and ending January 1, 2024, subject to acceleration of vesting in the Committee’s sole discretion and based on the occurrence of certain events, as more specifically defined in the applicable Restricted Stock Agreement between the Executive and USPH and/or in the Executive’s employment agreement with USPH.

Administration : The Compensation Committee has authority to administer this Objective LTIP, grant awards and decide all questions of interpretation. The Compensation Committee shall set out the vesting and other terms of an RSA in writing. 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 2019 USPH consolidated pre-tax income (before charges/credits for changes in Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2019 related to this and all other management incentive plans) are as follows: CEO = 8,800 shares; CFO = 4,400 shares; COO East = 4,400 shares; COO West = 4,400 shares.

Performance Goals
2019
Pre-tax Income
   
Objective
Amount of Maximum Shares
That May Be Awarded
 

       
$
46,455,052
     
30.0
%
$
46,687,328
     
34.0
%
$
46,920,765
     
38.0
%
$
47,155,369
     
42.0
%
$
47,391,146
     
46.0
%
$
47,628,102
     
50.0
%
$
47,866,242
     
56.0
%
$
48,105,574
     
62.0
%
$
48,346,101
     
68.0
%
$
48,587,832
     
76.0
%
$
48,830,771
     
84.0
%
$
49,074,925
     
92.0
%
$
49,320,300 and over      
100.0
%

Certain Tax Considerations :  Any awards actually granted under this program shall be subject to Code Section 83(b).


Exhibit 99.2

U.S. PHYSICAL THERAPY, INC. (“USPH”)
DISCRETIONARY LONG-TERM INCENTIVE PLAN FOR SENIOR MANAGEMENT
FOR 2019 (“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 4, 2019.

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 2019. The factors to be considered include:

CEO


1.
Corporate Leadership

2.
Cost Control

3.
Briotix Development

4.
Same Store Growth/ Visit Growth

5.
Compliance

6.
Acquisitions

CFO


1.
Succession and Transition

2.
Completion of 2019 Priority IT Projects

3.
Acquisition integration and financial reporting

4.
CBO efficiency and cost control

5.
Customer Service to our partners

6.
Successful Audit Completion

COO West


1.
B riotix success, integration and forward progress

2.
Cost Control at the clinic level and margin stability at Briotix

3.
Succession Plan – Operations regional bench development

4.
Compliance

5.
Same Store Growth/ Visit Growth

6.
Development

COO EAST


1.
Contract and Relationship Development with emphasis on the IRG transition from West to East

2.
Cost Control

3.
Compliance

4.
Development of East Team

5.
Same Store Growth/ Visit Growth

6.
Development

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”), the Chief Operation Officer West (“COO West”), and the Chief Operation Officer East (“COO East”). The following shall be the maximum amount of shares that may be awarded under this program to each specified participant: CEO = up to 8,800 shares; CFO = up to 4,400 shares; COO West = up to 4,400 shares; COO East = up to 4,400 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. The Compensation Committee shall set out the vesting and other terms of an RSA in writing

Award Grant Date :  Any RSAs granted under this program shall be granted under the 2003 Plan in the first quarter of 2020 after the Compensation Committee determines the amount, if any, of the RSAs to be granted to each participant. 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, 2020 and ending January 1, 2024, subject to acceleration of vesting based on the occurrence of certain events, as more specifically defined in the applicable Restricted Stock Agreement between the Executive and USPH and/or in the Executive’s employment agreement with USPH.

Certain Tax Considerations :  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/RSA BONUS PLAN FOR SENIOR MANAGEMENT
FOR 2019 (“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 4, 2019.

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

Description, Conditions and Payment Date :  Under this Objective Bonus Plan, Executives have an opportunity to receive   either a “Cash Bonus” Award or to be granted a Restricted Stock Award (“RSA”) having a value at the time of the Award  of up to 75% of the Executive’s annual base salary for 2019 (“Base”) as Performance Awards under the 2003 Plan. The Compensation Committee of the Board of Directors of USPH (the “Compensation Committee”) will, in its sole discretion, determine the amount and type of award to be made in the first quarter of 2020. No Executive will be entitled to any type of award or have a legally binding right to an award until the Compensation Committee, in its sole discretion, determines an award will be made, the amount and the type of award to be made.  No Executive will be entitled to elect between the Cash Bonus or RSA.  Before any Cash Bonus is made or an RSA is awarded under this Objective Bonus Plan, the Compensation Committee shall certify in writing that the performance goals have been obtained.  Any Cash Bonus award made hereunder shall be paid in a lump-sum amount, and any RSA granted, in each case no later than March 15, 2020. The Executive must be continuously employed by USPH or its affiliates from the Effective Date through December 31, 2019 to receive the Cash Bonus or an RSA.

Administration :  The Compensation Committee has authority to administer this Objective Bonus Plan, grant awards, determine whether any such awards shall be made as a Cash Bonus Award or as an RSA, and decide all questions of interpretation. The Compensation Committee shall set out the vesting and other terms of an RSA in writing. 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 2019 USPH consolidated pre-tax income (before charges/credits for changes in Redeemable Non-Controlling interests and any extraordinary items and after consideration of the compensation expense required to be reported in 2019 related to this and all other management incentive plans), the goals and amounts payable are as follows:

2019
Pre-tax income
   
Potential Bonus Value
(Compared to Base)
 
$
46,455,052
     
15.0
%
$
46,687,328
     
17.0
%
$
46,920,765
     
19.0
%
$
47,155,369
     
21.0
%
$
47,391,146
     
23.0
%
$
47,628,102
     
25.0
%
$
47,866,242
     
28.0
%
$
48,105,574
     
31.0
%
$
48,346,101
     
34.0
%
$
48,587,832
     
38.0
%
$
48,830,771
     
42.0
%
$
49,074,925
     
46.0
%
$
49,320,300
     
50.0
%
$
49,566,901
     
54.0
%
$
49,814,736
     
58.0
%
$
50,063,809
     
62.0
%
$
50,314,128
     
66.0
%
$
50,565,699
     
70.0
%
$
50,818,527 or more      
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.

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.


Exhibit 99.4

U.S. PHYSICAL THERAPY, INC. (“USPH”)
DISCRETIONARY CASH/RSA BONUS PLAN FOR SENIOR MANAGEMENT
FOR 2019 (“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 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”), Chief Operating Officer West (“COO West”), and Chief Operating Officer East (“COO East”). 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 2019 (“Base”) pursuant to the subjective criteria as set forth below. The Subjective Bonus shall be made as either a “Cash Bonus” Award or a Restricted Stock Award (“RSA”), as determined in the sole discretion of the Compensation Committee of the Board of Directors of USPH (the “Compensation Committee”).  The Compensation Committee shall have the sole discretion to determine the amount and type of award (whether a Cash Bonus Award or an RSA) will be made.  No Participant shall be entitled to a Subjective Bonus and shall have no legally binding right to a Subjective Bonus until the Compensation Committee determines the amount and type of award to be made.  No Participant will be entitled to elect any type of award to be made.

Effective Date :  This Discretionary Bonus Plan is established effective March 4, 2019.

Administration :  The Compensation Committee shall administer this Discretionary Bonus Plan, and 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 determine whether such awards under this plan shall be made as a Cash Bonus Award or as an RSA. 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.

Award and Payment Date :  The Compensation Committee shall make award determinations in the first quarter of 2020.  A fter the Compensation Committee has determined that goals have been met and has calculated the awards to be made hereunder, the Cash Bonus Award shall be paid, and the RSA shall be granted to the applicable Participant in the first quarter of 2020 but no later than March 15, 2020. 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 grant an award of a Subjective Bonus having a value as of the date of the award of up to 50% of Base for each participant are as follows:

CEO


1.
Corporate Leadership

2.
Cost Control

3.
Briotix Development

4.
Same Store Growth/ Visit Growth

5.
Compliance

6.
Acquisitions

CFO


1.
Succession and Transition

2.
Completion of 2019 Priority IT Projects

3.
Acquisition integration and financial reporting

4.
CBO efficiency and cost control

5.
Customer Service to our partners

6.
Successful Audit Completion

COO West


1.
B riotix success, integration and forward progress

2.
Cost Control at the clinic level and margin stability at Briotix

3.
Succession Plan – Operations regional bench development

4.
Compliance

5.
Same Store Growth/ Visit Growth

6.
Development

COO EAST


1.
Contract and Relationship Development with emphasis on the IRG transition from West to East

2.
Cost Control

3.
Compliance

4.
Development of East Team

5.
Same Store Growth/ Visit Growth

6.
Development

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.

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