DEF 14A of Acadia Healthcare Company, Inc., Apr 9, 2024

DEF 14A of Acadia Healthcare Company, Inc.

Filed Apr 9, 2024 · FY20230001140361-24-018895

Open on EDGAR

  1. Continuing Directors

    Continuing Directors Each of the persons named below will continue to serve as a director until the annual meeting of stockholders in the year indicated and a successor is elected and takes office or until his or her earlier death, resignation or removal. Stockholders are not voting on the election of the Class II directors or Class III directors. The following table shows the names, ages, principal occupations and other directorships of each continuing director and the year in which each was first appointed or elected to our Board or that of our predecessor, Acadia Healthcare Company, LLC:

  2. Continuing Directors

    | Name | Age | Principal Occupation/Other Directorships | Director Since | | Class II Term Expiring in 2025 | | | | | Jason R. Bernhard | 58 | Mr. Bernhard is the Global Chief Operating Officer, Financial Advisory; Managing Director, Head of North America Healthcare Investment Banking; and a Vice Chairman of Investment Banking at Lazard, Inc. where he has served for more than 25 years. Our Board believes that Mr. Bernhard is qualified to serve as a director because of, among other things, his extensive corporate finance background and his general business and financial acumen. | 2019 | | William F. Grieco | 70 | Since March 2018, Mr. Grieco has served as Chief Compliance Officer of NX Development Corporation, the U.S. life sciences affiliate of Tokyo-based SBI Holdings, Inc., and since May 2021, has served as Senior Vice President and General Counsel. Also, since 2008, Mr. Grieco has served as the Managing Director of Arcadia Strategies, LLC, a legal and business consulting organization servicing healthcare, science and technology companies. From 2003 to 2008, he served as Senior Vice President and General Counsel of American Science and Engineering, Inc., an x-ray inspection technology company. From 2001 to 2002, he served as Senior Vice President and General Counsel of IDX Systems Corporation, a healthcare information technology company. Previously, from 1995 to 1999, he was Senior Vice President and General Counsel for Fresenius Medical Care North America, a dialysis service and products company. Prior to that, Mr. Grieco was a partner in the Healthcare Department at Choate, Hall & Stewart, a general service law firm. Mr. Grieco previously served on the board of directors of PHC, Inc. Our Board believes that Mr. Grieco is qualified to serve as a director because of, among other things, his extensive knowledge of and experience in the healthcare industry and his general business and financial acumen. | 2011 |

  3. Continuing Directors

    | Name | Age | Principal Occupation/Other Directorships | Director Since | | R. David Kelly | 60 | Since 2011, Mr. Kelly has served as the founder and managing partner of StraightLine Realty Partners, an alternative investment platform based in Dallas, Texas. Mr. Kelly also serves as founder, chairman, and Chief Executive Officer of Croesus and Company, and as managing director and co-founder of Serra Real Estate Capital, LLC. He previously served as a founding partner of Carleton Residential Properties from 1996 to 2011. Mr. Kelly has served on major institutional investor boards, including serving as trustee and Chairman of the Teacher Retirement System of Texas from 2007-2017, as well as multiple endowment, financial services and real estate boards. Our Board believes that Mr. Kelly is qualified to serve as a director because of, among other things, his extensive corporate finance and real estate background and his general business and financial acumen. | 2022 | | Reeve B. Waud | 60 | Mr. Waud founded the Company in 2005 and, most recently, has served as the Chairman of the Board since December 2018. Mr. Waud previously served as the Lead Director of the Board from April 2012 to December 2018. Mr. Waud formed Waud Capital Partners, L.L.C. (“WCP”) in 1993 and has served as the Managing Partner of WCP since that time. Prior to founding WCP, Mr. Waud was an investment professional at Golder, Thoma, Cressey, Rauner, Inc. (“GTCR”), a private equity investment group based in Chicago, Illinois. Before joining GTCR, Mr. Waud was in the Corporate Finance Group of Salomon Brothers Inc and was a founding member of its Venture Capital Group. He is a member of the Northwestern Memorial HealthCare finance committee and serves on the board of directors of the Northwestern Memorial HealthCare Foundation. In addition, he is a trustee and member of the finance committee of the Art Institute of Chicago. Mr. Waud has served on various for profit and non-profit boards, including the John G. Shedd Aquarium, the Economic Club of Chicago, the Illinois State Police Merit Board, and St. Paul’s School in Concord, New Hampshire. Our Board believes that Mr. Waud is qualified to serve as a director because of, among other things, his extensive knowledge of and experience in the healthcare industry and his general business and financial acumen. Mr. Waud was originally designated as a director by WCP. | 2005 | | Class III Term Expiring in 2026 | | | | | Michael J. Fucci | 65 | Prior to his retirement in September 2020, Mr. Fucci served as Chairman Emeritus of Deloitte U.S. He previously served as Executive Chairman of Deloitte U.S. from 2015 to 2019, Chief Operating Officer of Deloitte Consulting from 2009 to 2015 and held various management positions since 2003. Mr. Fucci also served as a member on both the Deloitte U.S. and Deloitte Global Boards of Directors. While at Deloitte U.S., he established and co-chaired the Board Leadership Forum, a coalition of Fortune 500 board chairs and lead directors. Our Board believes that Mr. Fucci is qualified to serve as a director because of, among other things, his extensive corporate finance background, corporate governance experience and his general business and financial acumen. | 2020 |

  4. Continuing Directors

    | Name | Age | Principal Occupation/Other Directorships | Director Since | | Patrice A. Harris, M.D., M.A. | 63 | Dr. Harris is a board-certified psychiatrist and the Co-Founder and Chief Executive Officer of eMed Digital Healthcare, a digital healthcare company. She is also a Visiting Professor at Columbia University Vagelos College of Physicians and Surgeons, Department of Psychiatry, an Adjunct Professor of Psychiatry and Behavioral Sciences at Emory University School of Medicine, and an Adjunct Clinical Assistant Professor in Psychiatry and Behavioral Sciences at Morehouse School of Medicine. Dr. Harris is a Fellow of the American Psychiatric Association (“APA”). She previously served as the President of the American Medical Association (“AMA”) from 2019 to 2020, and Chair of the AMA’s Opioid Task Force. Dr. Harris previously served on the Board of Trustees of the APA. Our Board believes that Dr. Harris is qualified to serve as a director because of, among other things, her extensive healthcare experience, particularly in the psychiatric and behavioral healthcare fields. | 2023 | | Wade D. Miquelon | 59 | Mr. Miquelon is currently founder and partner in Playmore Holdings, LLC, a beauty, health and leisure investment and operations company. Prior to his retirement in May 2023, Mr. Miquelon served as the President, Chief Executive Officer and a member of the board of directors of JOANN Inc. (NASDAQ: JOAN) (“Jo-Ann”), the nation’s leading fabric and craft specialty retailer. Prior to that, he served as the Chief Financial Officer and Executive Vice President of Jo-Ann. Prior to joining Jo-Ann, he served as Chief Financial Officer, Executive Vice President and President International for Walgreen Co. from June 2008 to August of 2014. From 2006 to 2008, he was Executive Vice President and Chief Financial Officer at Tyson Foods, Inc. Prior to that, Mr. Miquelon served Procter and Gamble in several positions of increasing responsibility in the U.S., Asia and Europe. Mr. Miquelon serves on the board of directors and as treasurer for the National 4-H Council. He has served on various for profit and non-profit boards including Jo-Ann, Alliance Boots, the Chicago Lyric Opera and the John G. Shedd Aquarium. Our Board believes that Mr. Miquelon is qualified to serve as a director because of, among other things, his extensive knowledge and background in public accounting and finance. | 2012 |

  5. Continuing Directors

    PROPOSAL 2: DECLASSIFICATION OF THE BOARD OF DIRECTORS The Board of Directors has approved, and recommends that the stockholders approve, an amendment to the Certificate of Incorporation to declassify the Board of Directors, and provide for an annual election of all directors (the “Amendment”). Section 3 of ARTICLE SIX of the Certificate of Incorporation, provides for three classes of directors, Class I, Class II and Class III (each a “Class”). Directors in each Class serve on the Board of Directors until the third succeeding annual meeting of stockholders after their election, and remain in office until their respective successors have been duly elected and qualified. After reviewing current corporate governance practices and considering the opinions of investors regarding the Board’s classification, the Board of Directors has concluded that it would be in the best interests of stockholders if the Company restructured the Board of Directors to provide for an annual election of all directors. The material terms of the Amendment are described below, and the form of the Amendment as adopted by our Board of Directors is attached to this Proxy Statement as Appendix A. Our Board of Directors has adopted resolutions, subject to stockholder approval, (i) to amend Section 3 of ARTICLE SIX of the Certificate of Incorporation to phase out director classification over a five-year period, and (ii) to amend Section 4 of ARTICLE SIX of the Certificate of Incorporation, so that, as amended, it would be restated in its entirety as follows: “Section 4. Majority Voting; Term of Office. A nominee for director shall be elected to the Board of Directors if a majority of the votes cast are in favor of such nominee’s election; provided, however, that, if the number of nominees for director exceeds the number of directors to be elected, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at any meeting of stockholders held to elect directors and entitled to vote on such election of directors. At each annual meeting of stockholders, directors will be elected to replace all of those whose terms expire at such annual meeting. At the annual meeting of stockholders held in 2025 and 2026, the successors of the class of directors whose term expires at such meeting shall be elected at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. At the annual meeting of stockholders held in 2027, the successors of the class of directors whose term expires at such meeting shall be elected at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the second year following the year of their election. At the annual meeting of stockholders held in 2028, the successors of the class of directors whose term expires at such meeting shall be elected at such meeting to hold office for a term expiring at the next annual meeting of stockholders. Beginning with the 2029 annual meeting of stockholders, each director shall be elected for a term expiring at the next succeeding annual meeting of stockholders, and until his or her successor is duly elected and qualified. Each newly elected director shall remain in office until their respective successors shall have been duly elected and qualified, or until his or her earlier death, resignation or removal. Nothing in this Certificate of Incorporation shall preclude a director from serving consecutive terms. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.” The Board of Directors believes that measures other than a classified board exist within the Company’s governing documents and under Delaware law that will allow the Company to continue to protect against unfair or hostile takeover practices. If the Amendment is approved by our stockholders, our Certificate of Incorporation will be modified as described above and in the Amendment such that for our annual meeting of stockholders in 2025 and 2026, the classes of directors whose terms expire at those meetings will be nominated for re-election for three-year terms, respectively; for our annual meeting of stockholders in 2027, the class of directors whose terms expire at such meeting will be nominated for re-election for a two-year term; for our annual meeting of stockholders in 2028, the class of directors whose terms expire at such meeting will be nominated for re-election for a one-year term; and our Board of Directors will be fully declassified, with all directors standing for annual election, beginning with the Company’s 2029 annual meeting of stockholders. The following table illustrates how our classified Board of Directors will be phased out if stockholders approve the Amendment, assuming no change in the number of our directors.

  6. Continuing Directors

    | Annual Meeting | Number of Directors to be Elected | Term of Directors Elected (Year of Expiration) | | 2024 | 3 | three-year term (expires 2027) | | 2025 | 4 | three-year term (expires 2028) | | 2026 | 3 | three-year term (expires 2029) | | 2027 | 3 | two-year term (expires 2029) | | 2028 | 4 | one-year term (expires 2029) | | 2029 | 10 | one-year term (expires 2030) |

  7. Continuing Directors

    If the Amendment is not approved by our stockholders, our Board of Directors will remain classified, and our directors will continue to be subject to the Certificate of Incorporation’s current classification, in which case each elected Class will serve a three-year term, and will be subject to re-election for a subsequent three-year term at the expiration of that Class’s term. Approval of the Amendment requires the affirmative vote of the holders of a majority of the shares of Common Stock outstanding on the record date and entitled to vote. Abstentions and broker non-votes will have the same legal effect as a vote against this proposal. The Board of Directors recommends that stockholders vote FOR the Amendment to the Certificate of Incorporation to declassify the Board of Directors in the form attached hereto as Appendix A. PROPOSAL 3: NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables our stockholders to vote to approve, on a non-binding advisory basis, the compensation of our Named Executive Officers as described below in the sections entitled “COMPENSATION DISCUSSION AND ANALYSIS” and “EXECUTIVE COMPENSATION.” Because your vote is advisory, it will not be binding on the Board of Directors or the Compensation Committee, override any decision made by the Board of Directors or the Compensation Committee or create or imply any additional fiduciary duty of the Board of Directors or the Compensation Committee. The Compensation Committee will, however, review the voting results and take them into consideration when making future decisions regarding executive compensation. Our executive compensation program is vital to our ability to attract, motivate and retain a highly experienced team of executives. We believe that the program is structured in a manner that supports our company and our business objectives. In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking our stockholders to indicate their support for the compensation of our Named Executive Officers disclosed in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote FOR the following resolution at the Annual Meeting: RESOLVED, that the Company’s stockholders approve, on a non-binding advisory basis, the compensation of the Named Executive Officers as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of stockholders pursuant to Item 402 of Regulation S-K, including the sections entitled “COMPENSATION DISCUSSION AND ANALYSIS” and “EXECUTIVE COMPENSATION.” Although the results of this advisory vote are not binding on the Board of Directors or the Compensation Committee, the Compensation Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation. The Board of Directors recommends that stockholders vote FOR the resolution to approve, on a non-binding advisory basis, the compensation of our Named Executive Officers. PROPOSAL 4: RATIFICATION OF APPOINTMENT OF

  8. Executive Summary

    | (i) attract and retain superior executives by providing the opportunity to earn competitive compensation packages, |

  9. Summary of 2023 Company Performance

    | ● | Adjusted EPS (as defined below) for purposes of our 2023 equity and non-equity incentive awards was $3.51 compared to our target level Adjusted EPS of $3.25 and our maximum level Adjusted EPS of $3.74. |

  10. Summary of 2023 Company Performance

    | ● | Adjusted EBITDA (as defined below) for purposes of our 2023 equity and non-equity incentive awards was approximately $680.4 million compared to our target level Adjusted EBITDA of $653.3 million and our maximum level Adjusted EBITDA of $751.3 million. |

  11. Summary of 2023 Company Performance

    | ● | Above Target Payment of 2023 Non-Equity Incentive Compensation. The Adjusted EBITDA and Adjusted EPS measures set forth in our non-equity incentive compensation plan for 2023 were achieved at 104.2% and 108.0% of target, respectively, which, along with the Compensation Committee’s evaluation of the achievement of certain non-financial goals, resulted in the payment of above-target (132.3%) cash bonuses to our Named Executive Officers as described below in the section entitled “Components of Executive Compensation - Annual Non-Equity Incentive Compensation.” |

  12. Summary of 2023 Company Performance

    | ● | Vesting of Certain Equity Awards at Above Target Levels. Based on actual 2023 Adjusted EPS and Adjusted EBITDA performance in relation to targets, the first tranche of the performance-vesting restricted stock units granted in 2023 were earned at an above-target level, the second tranche of the performance-vesting restricted stock units granted in 2022 were earned at an above-target level, and the performance-vesting restricted stock units granted in 2021 were earned at a maximum level, as described below in the section entitled “Components of Executive Compensation - Equity-Based Compensation.” |

  13. Summary of 2023 Company Performance

    | ● | For Named Executive Officers, Re-affirm our Approach of Allocating the Majority of Equity Value to Performance-Vesting Restricted Stock Unit Awards — Other than Ms. Dixon and Mr. Farley, 75% of overall long-term incentive value for each Named Executive Officer was delivered as performance-vesting restricted stock units and 25% as time-vesting restricted stock awards in 2023. For Ms. Dixon, pursuant to her employment agreement, approximately 58.3% of overall long-term incentive value is delivered as performance-vesting restricted stock units and approximately 41.7% as time-vesting restricted stock awards. For Mr. Farley, pursuant to his employment agreement, approximately 35.7% of overall long-term incentive value is delivered as performance-vesting restricted stock units and approximately 64.3% as time-vesting restricted stock awards. |

  14. Summary of 2023 Company Performance

    | ● | For Named Executive Officer Performance-Vesting Restricted Stock Units, Goals Set at Grant for Performance Measured Each Year of 2023-2025 Performance and Vesting Period — For each of our Named Executive Officers, the performance-vesting restricted stock units granted in 2023 will vest only if the Company meets or exceeds established Adjusted EPS and Adjusted EBITDA goals for each year of the 2023-2025 period, rather than measuring performance solely on a performance period three years out from grant. The Compensation Committee believes that structuring the awards to vest based on the Company’s actual Adjusted EPS and Adjusted EBITDA compared to Adjusted EPS and Adjusted EBITDA goals set contemporaneously with the grant date for the years ending December 31, 2023, 2024 and 2025 better aligns the Named Executive Officers’ compensation with achievement of the Company’s long-term growth strategy. |

  15. Summary of 2023 Company Performance

    | ● | Maintained Certain Non-Financial Goals as Component of Annual Non-Equity Incentive Awards— Maintained non-financial goals focused on (i) patient safety and outcomes and (ii) initiatives to help enhance our technology capabilities as qualitative measures for determining annual cash incentive awards. The Compensation Committee determined the continuation of such non-financial goals as an incentive plan metric better aligns the Named Executive Officers’ compensation with the Company’s mission and values and facilitate long-term stockholder value creation. |

  16. Compensation Process and Philosophy

    | ● | Link the interests of management with those of our stockholders by encouraging stock ownership and aligning performance equity awards with key performance indicators aligned with long-term stockholder returns; |

  17. Compensation Process and Philosophy

    | ✓ | Use peer market data for benchmarking and calibration |

  18. Compensation Process and Philosophy

    | ✓ | Consult with an independent compensation consultant |

  19. Compensation Process and Philosophy

    | ✓ | Utilize double trigger severance agreements upon a change in control |

  20. Compensation Process and Philosophy

    | No stock option repricing or exchanges without stockholder approvalX |

  21. Compensation Process and Philosophy

    | No tax gross-ups related to change in control or otherwiseX |

  22. Role of Compensation Consultant

    Role of Compensation Consultant Since 2018, the Compensation Committee has retained Pay Governance to advise it with respect to the Company’s executive compensation program. The Compensation Committee has considered the relationships that Pay Governance has had with the Company, the members of the Compensation Committee and our executive officers, and has taken into account the factors required by NASDAQ to be considered when assessing a consultant’s independence. For 2023, after considering such relationships and factors, the Compensation Committee determined that the work of Pay Governance did not raise any conflicts of interest. Outside of their direct engagement by the Compensation Committee as independent compensation consultants to the Compensation Committee with respect to executive compensation matters, Pay Governance did not provide other services to the Company in 2023.

  23. Peer Group Comparison

    Peer Group Comparison In late 2022, for purposes of setting 2023 compensation for our executive officers, Pay Governance assisted the Compensation Committee in establishing a peer group of publicly-traded healthcare companies generally similarly sized and with similar service offerings to us (the “2023 Peer Group”). The 2023 Peer Group consisted of the following companies:

  24. Peer Group Comparison

    | ● Amedisys, Inc. | ● Oak Street Health, Inc.(1) | | ● AMN Healthcare Services, Inc. | ● Option Care Health, Inc. | | ● Brookdale Senior Living Inc. | ● Pediatrix Medical Group, Inc. | | ● Chemed Corporation | ● Select Medical Holdings Corporation | | ● Encompass Health Corporation | ● Surgery Partners, Inc. | | ● The Ensign Group, Inc. | ● Universal Health Services, Inc. | | ● LHC Group, Inc.(1) | |

  25. Peer Group Comparison

    | (1) Ceased to be a publicly traded company during 2023. |

  26. Peer Group Comparison

    The 2023 Peer Group was established using similar criteria for selection of the prior year’s peer group selected by our Compensation Committee, specifically: industry, market capitalization, revenue and revenue growth, and adjusting for mergers and acquisition activity among peers.

  27. Components of Executive Compensation

    As illustrated in the charts below and consistent with our pay-for-performance philosophy, 86% of Mr. Hunter’s total direct compensation for 2023 and, on average, 88% of the other non-CEO Named Executive Officers’ (other than Messrs. Duckworth and Harrod) total direct compensation for 2023 was performance-based pay, with a significant emphasis on long-term performance and stockholder value creation. For the purposes of these charts, total direct compensation includes base salary, actual non-equity incentive compensation and the grant date fair value of our annual equity grants made in 2023. The stock awards portion of these charts assume that target performance goals for performance-vesting restricted stock units issued in 2023 are attained during the 2023 performance period in accordance with ASC 718. See “EXECUTIVE COMPENSATION – Summary Compensation Table” for more information about the compensation paid to our Named Executive Officers.

  28. Base Salary

    Base Salary Our Compensation Committee generally meets on an annual basis to review each Named Executive Officer’s base salary and to consider adjustments to each Named Executive Officer’s base salary for the following year. The base salaries under the employment agreements for our Named Executive Officers are subject to an annual review and potential increase in the sole discretion of the Compensation Committee. In setting base salaries for 2023, the Compensation Committee reviewed the composition of the relevant peer group and discussed peer group information with the Compensation Committee’s independent compensation consultants. For setting 2023 base salaries, Mr. Hunter provided the Compensation Committee with an evaluation of the individual performance and roles and responsibilities of each executive officer other than herself. The base salaries for the Named Executive Officers effective as of January 1, 2022 and 2023 were as follows:

  29. Annual Non-Equity Incentive Compensation

    Annual Non-Equity Incentive Compensation Annual non-equity incentive awards paid to our Named Executive Officers are a reward for the realization of established performance objectives. Our Compensation Committee annually adopts a cash bonus plan pursuant to the Company’s incentive compensation plan for each Named Executive Officer. The Compensation Committee generally meets in February or March to review whether and the extent to which performance objectives have been achieved for the prior year. All non-equity incentive awards are subject to the review and approval of the Compensation Committee, which has the discretion to adjust any and all such awards. 2023 Awards Annual non-equity incentive compensation payable to our Named Executive Officers for 2023 was based 80% on the Company-wide measures Adjusted EBITDA and Adjusted EPS and 20% on achieving certain non-financial goals, with each of Adjusted EBITDA and Adjusted EPS determining 40% of the total incentive award. For 2023, the non-financial goals focused on the Compensation Committee’s assessments of (i) patient safety and outcomes and (ii) initiatives to help enhance our technology capabilities. The Compensation Committee used these measures for determining annual cash incentive awards because they are important measures of our performance and the performance of our management, they drive our success and growth and they are key criteria by which management plans and analyzes our business. For purposes of determining 2023 non-equity incentive compensation, we define Adjusted EBITDA as the sum of the following: (a) net income (loss) from continuing operations, (b) interest expense, (c) income tax expense, (d) depreciation and amortization expense, (e) equity-based compensation expense, (f) transaction-related expenses (e.g. acquisition-related diligence and advisory costs, contract termination costs, etc.), (g) gain or loss on extinguishment of debt, (h) impairment and other non-cash gains and charges (e.g. gain or loss on disposal of property), (i) legal settlement costs, (j) severance and restructuring costs, and (k) gain or loss on foreign currency derivatives, as disclosed in or derived from the Company’s Annual Report on Form 10-K, press releases or other financial records, as appropriate. Adjusted EPS is defined as (a) adjusted income from continuing operations attributable to the Company divided by (b) diluted weighted-average shares outstanding. Adjusted income from continuing operations attributable to the Company is defined as the sum of (a) net income (loss) attributable to the Company; (b) income or loss from discontinued operations; and (c) provision for income taxes; plus the sum of (d) transaction-related expenses (e.g. acquisition-related diligence and advisory costs, contract termination costs, etc.); (e) gain or loss on extinguishment of debt; (f) impairment and other non-cash gains and charges (e.g. gain or loss on disposal of property); (g) legal settlement costs; (h) severance and restructuring costs; and (i) gain or loss on foreign currency derivatives; minus (j) adjusted income tax provision, as disclosed in or derived from the Company’s Annual Report on Form 10-K, press releases or other financial records, as appropriate. Adjusted EBITDA and Adjusted EPS are calculated net of non-equity incentive payments and excluding the impact of gains or losses as a result of foreign currency conversions or fluctuations in foreign currency exchange rates. A reconciliation of these non-GAAP financial measures can be found at the end of this Proxy Statement. The Compensation Committee did not make any adjustments in determining Adjusted EBITDA and Adjusted EPS goals for 2023 compensation plan purposes. The Company produced strong operating results in 2023. Based on the Company’s financial performance in 2023, our executive officers realized above target payouts under cash and equity incentive programs. The table below sets forth the threshold, target and maximum cash incentive award for 2023 (as a percentage of base salary) for each of the applicable Named Executive Officers.

  30. Annual Non-Equity Incentive Compensation

    | Name | Threshold(1) | Target | Maximum | | Christopher H. Hunter | 62.5% | 125% | 250% | | Heather Dixon | 42.5% | 85% | 170% | | Brian P. Farley | 42.5% | 85% | 170% | | John S. Hollinsworth | 42.5% | 85% | 170% | | David M. Duckworth | 42.5% | 85% | 170% | | Laurence L. Harrod | 42.5% | 85% | 170% |

  31. Annual Non-Equity Incentive Compensation

    (1) As described below, Named Executive Officers may receive an aggregate of less than the threshold percentage of their base salary listed above if performance exceeds the threshold level of one or more, but not all, of the applicable performance measures. These target and maximum percentages are no less than the target and maximum percentages that each executive is eligible to earn (as a percentage of base salary) pursuant to the employment agreements entered into with each applicable executive. The table below summarizes the performance measures and actual results applicable to our 2023 non-equity incentive awards. Straight-line interpolation is used to determine awards for performance between goal levels. Payout ranges reflect a percentage of a Named Executive Officer’s base salary.

  32. Annual Non-Equity Incentive Compensation

    | | Weighting | Threshold | Target | Maximum | Actual | % of Target | | (amounts in millions, other than EPS) | | | | | | | | Performance Metric | | | | | | | | Adjusted EBITDA | 40% | $588.0 | $653.3 | $751.3 | $680.4 | 104.2% | | Adjusted EPS | 40% | $2.93 | $3.25 | $3.74 | $3.51 | 108.0% | | Non-Financial Goals | 20% | – | – | – | – | 100.0% | | Performance Range (as % of Target measure) | | 90% | 100% | 115% | | | | Payout Range (CEO) | | 62.5% | 125.0% | 250.0% | | | | Payout Range (other NEOs) | | 42.5% | 85.0% | 170.0% | | |

  33. Annual Non-Equity Incentive Compensation

    For 2023, the non-financial goals focused on the Compensation Committee’s assessments of (i) patient safety and outcomes and (ii) initiatives to help enhance our technology capabilities. The patient safety and outcomes goal was measured based on patient experience evaluation results at our facilities and implementation of our selected electronic patient monitoring platform in certain of our facilities. The information technology (“IT”) initiatives goal was measured based on development of enterprise, full coverage networks at certain of our facilities and the completion of an enterprise cyber security maturity assessment. In February 2024, the Compensation Committee evaluated whether and the extent to which the performance goals for the 2023 annual non-equity incentive awards had been achieved. As a result of 2023 performance, the Named Executive Officers listed below received the following cash incentive payments with respect to 2023. The resulting payout for our applicable Named Executive Officers as a percentage of target was 132.3%. Pursuant to the terms of that certain Separation and Consulting Agreement with the Company, upon his resignation as Executive Vice President of Finance, Mr. Harrod remained eligible to earn a prorated portion of his 2023 annual non-equity incentive award subject to actual achievement of the 2023 performance goals. Mr. Duckworth did not earn any portion of his 2023 annual non-equity incentive award due to his resignation from the Company in 2023.

  34. Annual Non-Equity Incentive Compensation

    | Name | EBITDA Component | % of Target | EPS Component | % of Target | Non- Financial Component | % of Target | Total Cash Incentive Payment | % of Target | | Christopher H. Hunter | $638,361 | 127.7 | $765,306 | 153.1 | $250,000 | 100.0 | $1,653,667 | 132.3 | | Heather Dixon(1) | 143,605 | 127.7 | 172,162 | 153.1 | 56,240 | 100.0 | 372,007 | 132.3 | | Brian P. Farley(2) | 104,002 | 127.7 | 124,684 | 153.1 | 40,730 | 100.0 | 269,416 | 132.3 | | John S. Hollinsworth | 283,037 | 127.7 | 339,372 | 153.1 | 110,845 | 100.0 | 733,204 | 132.3 | | Laurence L. Harrod(3) | 136,100 | 127.7 | 163,165 | 153.1 | 53,301 | 100.0 | 352,566 | 132.3 |

  35. Annual Non-Equity Incentive Compensation

    (1) The amount payable to Ms. Dixon is a pro rata amount (47.9%) based on the date of her appointment as our Chief Financial Officer. (2) The amount payable to Mr. Farley is a pro rata amount (43.6%) based on the date of his appointment as our Executive Vice President, General Counsel and Secretary. (3) The amount payable to Mr. Harrod is a pro rata amount (50.7%) based on the date of his resignation as our Executive Vice President of Finance.

  36. Equity-Based Compensation

    Equity-Based Compensation Our Compensation Committee believes that time-vesting restricted stock and performance-vesting restricted stock units are key components to the compensation of our executive officers, and providing a mix of different types of equity awards is consistent with market practice for executive officers in our peer group. The Compensation Committee believes that time-vesting restricted stock and performance-vesting restricted stock units provide a substantial incentive to our Named Executive Officers by allowing them to directly participate in any increase in our long-term value. These incentives are intended to reward, motivate and retain the services of our Named Executive Officers. The Compensation Committee believes that a mix of equity awards aligns the interests of our Named Executive Officers with those of our stockholders and is consistent with our pay-for-performance philosophy. Equity-based awards are typically granted under the Company’s incentive compensation plan in March of each year. Equity Awards Granted in 2023 The Compensation Committee has established Adjusted EPS and Adjusted EBITDA as the core long-term metrics for purposes of performance vesting equity awards for our Named Executive Officers and for 2023 delivered a substantial portion of equity awards as performance based, generally with 75% of awards being performance-vesting restricted stock units and 25% of awards being time-vesting restricted stock (other than for our two new executive officers). Pursuant to their respective employment agreements, 58% of Ms. Dixon’s awards were performance-vesting restricted stock units and 42% of her awards were time-vesting restricted stock and 36% of Mr. Farley’s awards were performance-vesting restricted stock units and 64% of his awards were time-vesting restricted stock. In addition, awards of equity-based compensation are subject to the following parameters:

  37. Equity-Based Compensation

    Effective May 9, 2023, the Compensation Committee approved annual grants of the following number of performance-vesting restricted stock units (subject to the achievement of certain performance goals and continued employment) and shares of time-vesting restricted stock under the Incentive Plan to our Named Executive Officers, except that the equity awards granted to Ms. Dixon and Mr. Farley occurred on July 25, 2023 and July 26, 2023, respectively, in connection with their appointment as executive officers of the Company.

  38. Equity-Based Compensation

    | Name | Performance-Vesting Restricted Stock Units | Time-Vesting Restricted Stock | Grant Date Fair Value of Stock Awards(1) | | Christopher H. Hunter | 51,871 | 17,290 | $4,749,977 | | Heather Dixon | 46,077 | 32,912 | 6,000,004 | | Brian P. Farley | 10,000 | 18,000 | 2,126,880 | | John S. Hollinsworth | 16,021 | 5,340 | 1,467,073 | | David M. Duckworth | 17,064 | 5,688 | 1,562,607 | | Laurence L. Harrod | 14,861 | 4,954 | 1,360,894 |

  39. Equity-Based Compensation

    (1) Reflects the aggregate grant date fair value of such time-vesting restricted stock and performance-vesting restricted stock units, computed in accordance with ASC 718. The awards are described in more detail in the “EXECUTIVE COMPENSATION - Grants of Plan-Based Awards” section below. The allocation among performance-vesting restricted stock units (generally 75% of the total equity award) and time-vesting restricted stock (generally 25% of the total equity award) is not based on a formula approach but reflects the Compensation Committee’s view that most equity-based incentives should be performance-based and at risk. The Named Executive Officers must be employed by the Company at the time the performance-vesting restricted stock units and/or time-vesting restricted stock vest in order to receive the shares of Common Stock underlying each award, except in the case of certain terminations of employment as discussed under the heading “Executive Compensation - Potential Payments Upon Termination or Change in Control under the Employment Agreements.” An executive who retires prior to issuance may receive a pro rata share of any earned awards based on the date of retirement. Pursuant to the terms of that certain Transition Agreement with the Company, upon his resignation as Chief Financial Officer, Mr. Duckworth’s 2021 award of performance-vesting restricted stock units subject to 2023 performance goals remained outstanding and eligible to vest based on actual achievement of the applicable performance conditions and certain other conditions, but Mr. Duckworth forfeited his rights to all other outstanding equity awards. Similarly, under the terms of that certain Separation and Consulting Agreement, Mr. Harrod forfeited his rights to all outstanding equity awards. Performance-Vesting Restricted Stock Units. For the Named Executive Officers, the performance-vesting restricted stock units granted effective May 9, 2023 are earned in three equal annual installments based upon the achievement of a specified performance level of Adjusted EPS and Adjusted EBITDA for 2023, 2024, and 2025, but will not vest until the end of the full three-year period. On May 9, 2023, the Compensation Committee established the performance objectives for each of 2023, 2024 and 2025 for purposes of the vesting of restricted stock units. The Compensation Committee believes that Adjusted EPS and Adjusted EBITDA are the appropriate financial measures for determining vesting of performance-vesting restricted stock unit awards because each is an important measure of our performance and the performance of our management, each drives our success and growth, and each is a key criterion by which management plans and analyzes our business. The number of shares of Common Stock that may be issued upon vesting of the performance-vesting restricted stock units ranges from 0% to 200% of the total number of units set forth above in accordance with a formula based on our Adjusted EPS and Adjusted EBITDA, equally-weighted between such measures. None of the performance-vesting restricted stock units will vest for performance below 90.0% of the specified Adjusted EPS. Unearned performance awards in the performance period are forfeited. For 2023, the threshold award (as a percentage of the number of performance-vesting restricted stock units eligible for vesting based on the applicable performance period) for each applicable Named Executive Officer was 50%, the target award was 100% and the maximum award was 200%. For purposes of our 2023 awards of performance-vesting restricted stock units, our target level Adjusted EPS was $3.25 and target level Adjusted EBITDA was $653.3 million. The table below sets forth the number of shares of Common Stock that each applicable Named Executive Officer was eligible to earn for 2023 (as a percentage of the number of performance-vesting restricted stock units eligible to be earned based on 2023 performance), subject to continued employment throughout the full three-year performance and vesting period, based upon the Company’s actual Adjusted EPS and Adjusted EBITDA for 2023. For example, if our actual Adjusted EPS and Adjusted EBITDA for 2023 was $3.25 and $653.3 million, respectively, each applicable Named Executive Officer would earn the number of shares of Common Stock equal to 100% of the number of performance-vesting restricted stock units applicable to 2023 performance (or one-third of the total shares granted).

  40. Equity-Based Compensation

    In February 2024, the Compensation Committee evaluated whether and the extent to which the 2023 performance goals for the 2023 performance-vesting restricted stock unit awards had been achieved. The Compensation Committee determined that actual Adjusted EPS for 2023 was $3.51 and actual Adjusted EBITDA for 2023 was $680.4 million, resulting in approximately 153% and 128% of each portion of the 2023 performance-vesting restricted stock unit annual award being earned with respect to such measure as reflected in the table below (all of these earned shares are subject to continued time-based vesting through the full three-year period):

  41. Equity-Based Compensation

    | Name | 2023 Performance- Vesting Restricted Stock Unit Grant | Target Shares Subject to 2023 Performance(1) | Shares Allocated to each Measure | Shares Earned per Adjusted EPS | Shares Earned per Adjusted EBITDA | Total Shares Earned for 2023 Performance | | Christopher H. Hunter | 51,871 | 17,290 | 8,645 | 13,232 | 11,037 | 24,269 | | Heather Dixon | 46,077 | 15,360 | 7,680 | 11,755 | 9,805 | 21,560 | | Brian P. Farley | 10,000 | 3,334 | 1,667 | 2,552 | 2,128 | 4,680 | | John S. Hollinsworth | 16,021 | 5,340 | 2,670 | 4,087 | 3,409 | 7,496 |

  42. Equity-Based Compensation

    (1) Amounts reflect one-third of the grant. Messrs. Duckworth and Harrod did not earn any shares pursuant to the 2023 performance vesting restricted stock unit award due to their resignation from the Company in 2023. Time-Vesting Restricted Stock. The time-vesting restricted stock granted in 2023 vests 25% per year on the four successive anniversaries of the date of grant. 2022 Performance-Vesting Restricted Stock Unit Awards Earned On April 11, 2022, the Compensation Committee approved grants of the following number of performance-vesting restricted stock units under the Incentive Plan to our Named Executive Officers listed below:

  43. Equity-Based Compensation

    | Name | 2022 Performance-Vesting Restricted Stock Units | | Christopher H. Hunter | 47,323 | | John S. Hollinsworth | 15,128 | | David M. Duckworth | 15,384 | | Laurence L. Harrod | 13,398 |

  44. Equity-Based Compensation

    The performance-vesting restricted stock units granted in 2022 are earned in three equal annual installments based upon the achievement of specified performance levels of Adjusted EPS and Adjusted EBITDA for 2022, 2023, and 2024. On May 12, 2022, the Compensation Committee established the performance objectives for each of 2022, 2023 and 2024 for purposes of the vesting of restricted stock units. The Compensation Committee believes that Adjusted EPS and Adjusted EBITDA are the appropriate financial measures for determining vesting of performance-vesting restricted stock unit awards because each is an important measure of our performance and the performance of our management, each drives our success and growth, and each is a key criterion by which management plans and analyzes our business. The number of shares of Common Stock that may be issued upon vesting of the performance-vesting restricted stock units ranges from 0% to 200% of the total number of units set forth above in accordance with a formula based on our Adjusted EPS and Adjusted EBITDA, equally-weighted between such measures. None of the performance-vesting restricted stock units granted in 2022 will vest for performance below 90.0% of the specified Adjusted EPS. Unearned performance awards in the performance period are forfeited. For 2023 performance under the 2022 performance-vesting restricted stock unit awards, the threshold award (as a percentage of the number of performance-vesting restricted stock units eligible for vesting based on 2022 performance) for each applicable Named Executive Officer was 50%, the target award was 100% and the maximum award was 200%. For purposes of our 2022 awards of performance-vesting restricted stock units, our target level Adjusted EPS for 2023 was $3.38 and target level Adjusted EBITDA was $655.0 million. The table below sets forth the number of shares of Common Stock that each applicable Named Executive Officer was eligible to earn for 2023 performance under the 2022 performance-vesting restricted stock unit awards (as a percentage of the number of performance-vesting restricted stock units eligible for vesting based on 2023 performance), subject to continued employment throughout the performance period, based upon the Company’s actual Adjusted EPS and Adjusted EBITDA for 2023. For example, if our actual Adjusted EPS and Adjusted EBITDA for 2023 was $3.38 and $655.0 million, respectively, each applicable Named Executive Officer would earn the number of shares of Common Stock equal to 100% of the number of performance-vesting restricted stock units applicable to 2023 performance (or one-third of the total shares granted).

  45. Equity-Based Compensation

    In February 2024, the Compensation Committee evaluated whether and the extent to which the 2023 performance goals for the 2022 performance-vesting restricted stock unit awards had been achieved. The Compensation Committee determined that actual Adjusted EPS for 2023 was $3.51 and actual Adjusted EBITDA for 2023 was $680.4 million, resulting in approximately 126% of each portion of the 2022 performance-vesting restricted stock unit annual award being earned with respect to such measure as reflected in the table below (all of these earned shares are subject to continued time-based vesting through the full three-year period):

  46. Equity-Based Compensation

    | Name | 2022 Performance- Vesting Restricted Stock Unit Grant | Target Shares Subject to 2023 Performance(1) | Shares Allocated to each Measure | Shares Earned per Adjusted EPS | Shares Earned per Adjusted EBITDA | Total Shares Earned for 2023 Performance | | Christopher H. Hunter | 47,323 | 15,774 | 7,887 | 9,897 | 9,925 | 19,822 | | John S. Hollinsworth | 15,128 | 5,042 | 2,521 | 3,164 | 3,172 | 6,336 |

  47. Equity-Based Compensation

    (1) Amounts reflect one-third of the grant. Messrs. Duckworth and Harrod did not earn any shares pursuant to the 2022 performance vesting restricted stock unit award due to their resignation from the Company in 2023. 2021 Performance-Vesting Restricted Stock Unit Awards Earned On April 23, 2021, the Compensation Committee approved grants of the following number of performance-vesting restricted stock units under the Incentive Plan to our Named Executive Officers listed below:

  48. Equity-Based Compensation

    | Name | 2021 Performance-Vesting Restricted Stock Units | | John S. Hollinsworth | 16,859 | | David M. Duckworth | 15,961 | | Laurence L. Harrod | 15,639 |

  49. Equity-Based Compensation

    The performance-vesting restricted stock units granted effective April 23, 2021 are earned based upon the achievement of a specified performance level of Adjusted EPS for 2023. The Compensation Committee established, on the grant date, the performance objectives for 2023 for purposes of the vesting of restricted stock units. The number of shares of Common Stock that may be issued upon vesting of the performance-vesting restricted stock units ranges from 0% to 200% of the total number of units set forth above in accordance with a formula based on our Adjusted EPS. None of the performance-vesting restricted stock units will vest for performance below 92.5% of the specified Adjusted EPS. Unearned performance awards in the performance period are forfeited. For our 2021 awards of performance-vesting restricted stock units, the threshold award (as a percentage of the number of performance-vesting restricted stock units eligible for vesting based on the applicable performance period) for each applicable Named Executive Officer was 50%, the target award was 100% and the maximum award was 200%. For purposes of our 2021 awards of performance-vesting restricted stock units to our Named Executive Officers listed below, our target level Adjusted EPS was $3.06. The table below sets forth the number of shares of Common Stock that that each applicable Named Executive Officer was eligible to earn for 2023 performance under the 2021 performance-vesting restricted stock unit awards (as a percentage of the number of performance-vesting restricted stock units eligible for vesting based on 2023 performance), subject to continued employment throughout the performance period, based upon the Company’s actual Adjusted EPS for 2023. For example, if our actual Adjusted EPS for 2023 was $3.06, each applicable Named Executive Officer would earn the number of shares of Common Stock equal to 100% of the number of performance-vesting restricted stock units granted.

  50. Equity-Based Compensation

    In February 2024, the Compensation Committee evaluated whether and the extent to which the performance goals for the 2021 performance-vesting restricted stock unit awards had been achieved. The Compensation Committee determined that actual Adjusted EPS for 2023 was $3.51, resulting in 200% of the 2021 performance-vesting restricted stock unit annual award being earned as reflected in the table below:

  51. Equity-Based Compensation

    | Name | 2021 Performance-Vesting Restricted Stock Units | Shares Earned Under 2021 Performance-Vesting Restricted Stock Units | | John S. Hollinsworth | 16,859 | 33,718 | | David M. Duckworth | 15,961 | 31,922 |

  52. Equity-Based Compensation

    (1) Amount reflects the grant multiplied by 200%. Mr. Harrod did not earn any shares pursuant to the 2021 performance vesting restricted stock unit award due to his resignation from the Company in 2023.

  53. Termination and Change-in-Control Arrangements

    Termination and Change-in-Control Arrangements Under the terms of the compensation plans and employment agreements with the Named Executive Officers, the Named Executive Officers are entitled to payments and benefits upon the occurrence of specified events including termination of employment. The specific terms of these arrangements are discussed under the heading “Executive Compensation - Potential Payments Upon Termination or Change in Control under the Employment Agreements.” The Compensation Committee believes that these arrangements are appropriate and necessary to attract and retain talented senior executives. The Compensation Committee believes that the potential payments and benefits provide security and encourage retention in the event of an actual or potential change in control, such as a sale or “hostile” takeover. The absence of such arrangements could impact our ability to hire talented executives and an executive’s willingness to work through a merger or sale transaction which could be beneficial to our stockholders.

  54. Summary Compensation Table

    Summary Compensation Table The following summary compensation table reflects the compensation paid or accrued by us with respect to each of the Named Executive Officers:

  55. Summary Compensation Table

    | Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | Christopher H. Hunter Chief Executive Officer | 2023 2022 | $1,000,000 1,000,000 | $– – | $4,749,977 4,500,022 | $1,653,667 915,202 | $962 – | $7,404,606 6,415,224 | | Heather Dixon(4) Chief Financial Officer | 2023 | 305,192 | – | 6,000,004 | 372,007 | – | 6,677,203 | | Brian P. Farley(5) Executive Vice President, General Counsel and Secretary | 2023 | 217,885 | – | 2,126,880 | 269,416 | 50,403 | 2,664,584 | | John S. Hollinsworth Executive Vice President of Operations | 2023 2022 2021 | 652,030 633,039 614,601 | – – – | 1,467,073 1,793,884 2,033,824 | 733,204 678,287 969,903 | 10,960 9,331 6,437 | 2,863,267 3,114,541 3,624,765 | | David M. Duckworth Former Chief Financial Officer | 2023 2022 2021 | 487,925(6) 674,264 654,625 | – – – | 1,562,607 1,803,013 1,941,749 | – 722,458 1,033,065 | 62,673 24,663 21,463 | 2,113,205 3,224,398 3,650,902 | | Laurence L. Harrod Former Executive Vice President of Finance | 2023 2022 2021 | 394,947(7) 600,575 583,083 | – – 410,000(8) | 1,360,894 1,601,401 1,886,643 | 352,566 643,503 920,164 | 19,255 9,619 6,764 | 2,127,662 2,855,098 3,806,654 |

  56. Summary Compensation Table

    __________

  57. Summary Compensation Table

    | (1) Reflects the aggregate grant date fair value of time-vesting restricted stock and performance-vesting restricted stock units granted to each applicable Named Executive Officer pursuant to the Incentive Plan, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Stock Compensation,” or ASC 718. The awards are described in more detail in the Grants of Plan-Based Awards section below. See Note 17 to the Consolidated Financial Statements contained in the Company’s 2023 Annual Report on Form 10-K for assumptions relevant to the valuation of stock awards. With respect to annual grants of performance-vesting restricted stock units, other than the 2021 performance-vesting restricted stock unit awards, the units vest over three years and the amounts for a given year assume that the performance goals are attained during a respective annual performance period in accordance with ASC 718. With respect to annual grants of performance-vesting restricted stock units in 2021, the units vest based upon the achievement of specified performance goals in 2023, and the amounts assume that such performance goals are attained during such performance period in accordance with ASC 718. |

  58. Summary Compensation Table

    The amounts relating to performance-vesting restricted stock unit awards for 2023 represent the sum of the grant date fair value of the target number of shares that may be earned pursuant to the target amount of the 2023 performance-vesting restricted stock unit award. The amounts relating to performance-vesting restricted stock unit awards for 2022 represent the sum of the grant date fair value of the target number of shares that may be earned pursuant to (a) the target amount of the 2022 performance-vesting restricted stock unit award, and (b) the third tranche of the 2020 performance-vesting restricted stock unit award, as applicable to each Named Executive Officer. The amounts relating to performance-vesting restricted stock unit awards for 2021 represent the sum of the grant date fair value of the target number of shares that may be earned pursuant to (a) the target amount of the 2021 performance-vesting restricted stock unit award, (b) the second tranche of the 2020 performance-vesting restricted stock unit award and (c) the third tranche of the 2019 performance-vesting restricted stock unit award, as applicable to each Named Executive Officer. Assuming that the maximum performance goals are attained during a respective annual performance period in accordance with ASC 718 for the applicable tranche of the performance-vesting restricted stock units granted in 2023, 2022 and 2021, (i) the aggregate grant date fair value of the annual grants of performance-vesting restricted stock units would have been, and (ii) the aggregate grant date fair value of the total stock awards (including awards of both time-vesting restricted stock and performance-vesting restricted stock units) would have been:

  59. Summary Compensation Table

    | Name | Year | 2023 RSU Awards | 2022 RSU Awards | 2021 RSU Awards | 2020 RSU Awards | 2019 RSU Awards | Total RSU Awards | Total Stock Awards | | Christopher H. Hunter | 2023 | $7,125,001 | $ – | $ – | $ – | $ – | $7,125,001 | $8,312,478 | | | 2022 | – | 7,000,018 | – | – | – | 7,000,018 | 8,000,031 | | Heather Dixon | 2023 | 7,000,018 | – | – | – | – | 7,000,018 | 9,500,013 | | Brian P. Farley | 2023 | 1,519,200 | – | – | – | – | 1,519,200 | 2,886,480 | | John S. Hollinsworth | 2023 | 2,200,645 | – | – | – | – | 2,200,645 | 2,567,396 | | | 2022 | – | 2,237,734 | – | 604,073 | – | 2,841,807 | 3,214,787 | | | 2021 | – | – | 2,074,331 | 604,030 | 697,802 | 3,376,164 | 3,721,906 | | David M. Duckworth | 2023 | 2,343,911 | – | – | – | – | 2,343,911 | 2,734,563 | | | 2022 | – | 2,275,601 | – | 571,891 | – | 2,847,492 | 3,226,759 | | | 2021 | – | – | 2,021,793 | 571,891 | 693,193 | 3,228,925 | 3,556,212 | | Laurence L. | 2023 | 2,041,307 | – | – | – | – | 2,041,307 | 2,381,548 | | Harrod | 2022 | – | 1,981,832 | – | 560,358 | – | 2,542,191 | 2,872,496 | | | 2021 | – | – | 1,924,223 | 560,316 | 647,339 | 3,131,878 | 3,452,582 |

  60. Summary Compensation Table

    See the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS - Components of Executive Compensation - Equity-Based Compensation” for more information about the time-vesting restricted stock and performance-vesting restricted stock units.

  61. Summary Compensation Table

    | (2) Reflects cash awards earned during the years indicated under the Incentive Plan. See the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS - Components of Executive Compensation - Annual Non-Equity Incentive Compensation” for more information. |

  62. Summary Compensation Table

    | (3) Represents certain long term care insurance benefits and 401(k) plan matching contributions by the Company to each Named Executive Officer, other than Ms. Dixon and Mr. Farley. For Mr. Farley, amounts include relocation benefits of $50,403. For Messrs. Duckworth and Harrod, amounts shown in this column for 2023 include unused paid time off and sick pay of $46,264 and $10,254, respectively, accrued through their resignation date. |

  63. Summary Compensation Table

    | (4) Ms. Dixon was appointed Chief Financial Officer effective July 10, 2023. |

  64. Summary Compensation Table

    | (5) Mr. Farley was appointed Executive Vice President, General Counsel and Secretary effective July 26, 2023. |

  65. Summary Compensation Table

    | (6) Includes $57,874 paid to Mr. Duckworth in his capacity as a consultant to the Company following his resignation as Chief Financial Officer effective July 10, 2023. |

  66. Summary Compensation Table

    | (7) Includes $61,859 paid to Mr. Harrod in his capacity as a consultant to the Company following his resignation as Executive Vice President of Finance effective June 30, 2023. |

  67. Summary Compensation Table

    | (8) Reflects Mr. Harrod’s second anniversary retention bonus pursuant to the terms of his Employment Agreement. |

  68. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth certain information regarding plan-based awards granted to the Named Executive Officers during 2023:

  69. Grants of Plan-Based Awards

    | | | | | | | | | | All Other | | | | | | | | | | | | Stock | | | | | | | | | | | | Awards: | | | | | | | | | | | | Number of | Grant Date Fair | | | | | Estimated Possible Payouts Under Non- | | | Estimated Future Payouts Under | | | Shares of | Value of Stock | | | | Grant | Equity Incentive Plan Awards(1) | | | Equity Incentive Plan Awards(2) | | | Stock or | and Option | | Name | Type | Date | Threshold | Target | Maximum | Threshold | Target | Maximum | Units(3) | Awards(4) | | Christopher H. Hunter | Bonus | N/A | $625,000 | $1,250,000 | $2,500,000 | – | – | – | – | $ – | | | RSA | 5/9/23 | – | – | – | – | – | – | 17,290 | 1,187,477 | | | 2023 RSU | 5/9/23 | – | – | – | 25,936 | 51,871 | 103,742 | – | 3,562,500(5) | | Heather Dixon | Bonus | N/A | 293,250 | 586,500 | 1,173,000 | – | – | – | – | – | | | RSA | 7/25/23 | – | – | – | – | – | – | 32,912 | 2,499,996 | | | 2023 RSU | 7/25/23 | – | – | – | 23,039 | 46,077 | 92,154 | – | 3,500,009(5) | | Brian P. Farley | Bonus | N/A | 233,750 | 467,500 | 935,000 | – | – | – | – | – | | | RSA | 7/25/26 | – | – | – | – | – | – | 18,000 | 1,367,280 | | | 2023 RSU | 7/25/26 | – | – | – | 5,000 | 10,000 | 20,000 | – | 759,600(5) | | John S. Hollinsworth | Bonus | N/A | 277,113 | 554,226 | 1,108,451 | – | – | – | – | – | | | RSA | 5/9/23 | – | – | – | – | – | – | 5,340 | 366,751 | | | 2023 RSU | 5/9/23 | – | – | – | 8,011 | 16,021 | 32,042 | – | 1,100,322(5) | | David M. Duckworth | Bonus | N/A | 295,159 | 590,318 | 1,180,636 | – | – | – | – | – | | | RSA | 5/9/23 | – | – | – | – | – | – | 5,688 | 390,652 | | | 2022 RSU | 5/9/23 | – | – | – | 8,532 | 17,064 | 34,128 | – | 1,171,956(5) | | Laurence L. Harrod | Bonus | N/A | 262,902 | 525,803 | 1,051,606 | – | – | – | – | – | | | RSA | 5/9/23 | – | – | – | – | – | – | 4,954 | 340,241 | | | 2022 RSU | 5/9/23 | – | – | – | 7,431 | 14,861 | 29,722 | – | 1,020,653(5) |

  70. Grants of Plan-Based Awards

    | (1) The estimated payouts shown reflect non-equity incentive awards granted under the Incentive Plan, where receipt is contingent upon the achievement of specified performance goals. The amounts in the “Threshold” column assume threshold performance for all of the specified performance goals. See the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Annual Non-Equity Incentive Compensation” for more information about the awards. |

  71. Grants of Plan-Based Awards

    | (2) Reflects the number of shares of Common Stock issuable upon vesting of performance-vesting restricted stock units granted under the Incentive Plan. The performance-vesting restricted stock units granted in 2023 to all applicable Named Executive Officers are earned based upon the achievement of certain performance goals in 2023, 2024 and 2025, and continued employment. See the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation - Equity-Based Compensation” for more information about the performance-vesting restricted stock units. |

  72. Grants of Plan-Based Awards

    | (3) Reflects shares of time-vesting restricted stock granted to all Named Executive Officers under the Incentive Plan, which will vest in four equal annual installments commencing one year after the date of grant. |

  73. Grants of Plan-Based Awards

    | (4) Reflects the aggregate grant date fair value computed in accordance with ASC 718. |

  74. Grants of Plan-Based Awards

    | (5) The amounts shown reflect the grant date fair value of the target number of shares subject to the 2023 annual award of performance-vesting restricted stock units assuming that target performance goals are attained during the performance period in accordance with ASC 718, continued employment throughout the performance period. For additional information, see the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Equity-Based Compensation - Equity Awards Granted in 2023.” |

  75. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table provides certain information with respect to the applicable Named Executive Officers regarding outstanding equity awards as of December 31, 2023 that represent potential amounts that may be realized in the future:

  76. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options(1) | | Option | Option | Number of Shares or Units of Stock That | Market Value of Shares or Units of Stock Held | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights | | Name | (Exercisable) | (Unexercisable) | Exercise Price | Expiration Date | Have Not Vested | that Have Not Vested(2) | That Have Not Vested | That Have Not Vested(2) | | Christopher H. Hunter | — | — | $— | — | 10,141(3) | $788,564 | — | $— | | | — | — | — | — | — | — | 94,646(4) | 7,359,673 | | | — | — | — | — | 17,290(5) | 1,344,470 | — | — | | | — | — | — | — | — | — | 103,742(6) | 8,066,978 | | Heather Dixon | — | — | — | — | 32,912(7) | 2,559,237 | — | — | | | — | — | — | — | — | — | 92,154(6) | 7,165,895 | | Brian P. Farley | — | — | — | — | 18,000(8) | 1,399,680 | — | — | | | — | — | — | — | — | — | 10,000(6) | 777,600 | | John S. Hollinsworth | 5,000 | — | 28.25 | 3/7/29 | — | — | — | — | | | — | — | — | — | 7,124(9) | 553,962 | — | — | | | — | — | — | — | 2,810(10) | 218,506 | — | — | | | — | — | — | — | — | — | 33,718(11) | 2,621,912 | | | — | — | — | — | 3,783(3) | 294,166 | — | — | | | — | — | — | — | — | — | 30,256(4) | 2,352,707 | | | — | — | — | — | 5,340(5) | 415,238 | — | — | | | — | — | — | — | — | — | 32,042(6) | 2,491,586 | | David M. Duckworth | — | — | — | — | — | — | 31,922(11) | 2,482,255 | | Laurence L. Harrod | — | — | — | — | — | — | — | — |

  77. Outstanding Equity Awards at Fiscal Year-End

    | (1) The amounts shown reflect stock options granted under the Incentive Plan. |

  78. Outstanding Equity Awards at Fiscal Year-End

    | (2) Based on the closing sales price of our Common Stock of $77.76 on The NASDAQ Global Select Market on December 29, 2023. |

  79. Outstanding Equity Awards at Fiscal Year-End

    | (3) One-third of these shares of time-vesting restricted stock vest on each of April 11, 2024, April 11, 2025 and April 11, 2026. |

  80. Outstanding Equity Awards at Fiscal Year-End

    | (4) Reflects the aggregate maximum number of shares that will vest upon the achievement of certain performance goals established for the annual award of performance-vesting restricted stock units granted in 2022 under the Incentive Plan and continued employment. See the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Equity-Based Compensation –2022 Performance-Vesting Restricted Stock Unit Awards Earned” for more information about the performance-vesting restricted stock units. |

  81. Outstanding Equity Awards at Fiscal Year-End

    | (5) One-fourth of these shares of time-vesting restricted stock vest on each of May 9, 2024, May 9, 2025, May 9, 2026 and May 9, 2027. |

  82. Outstanding Equity Awards at Fiscal Year-End

    | (6) Reflects the aggregate maximum number of shares that will vest upon the achievement of certain performance goals established for the annual award of performance-vesting restricted stock units granted in 2023 under the Incentive Plan and continued employment. See the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Equity-Based Compensation – Equity Awards Granted in 2023” for more information about the performance-vesting restricted stock units. |

  83. Outstanding Equity Awards at Fiscal Year-End

    | (7) One-fourth of these shares of time-vesting restricted stock vest on each of July 25, 2024, July 25, 2025, July 25, 2026 and July 25, 2027. |

  84. Outstanding Equity Awards at Fiscal Year-End

    | (8) One-fourth of these shares of time-vesting restricted stock vest on each of July 26, 2024, July 26, 2025, July 26, 2026 and July 26, 2027. |

  85. Outstanding Equity Awards at Fiscal Year-End

    | (9) These shares of time-vesting restricted stock vest on March 24, 2024. |

  86. Outstanding Equity Awards at Fiscal Year-End

    | (10) One-half of these shares of time-vesting restricted stock vest on each of April 23, 2024 and April 23, 2025. |

  87. Outstanding Equity Awards at Fiscal Year-End

    | (11) Reflects the aggregate maximum number of shares that will vest upon the achievement of certain performance goals established for the annual award of performance-vesting restricted stock units granted in 2021 under the Incentive Plan and continued employment. See the section in our Proxy Statement dated April 8, 2022 entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Equity-Based Compensation – Equity Awards Granted in 2021” for more information about the performance-vesting restricted stock units. |

  88. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The Named Executive Officers did not exercise options during 2023. The following table shows the amounts received by the applicable Named Executive Officers upon the exercise of stock options or the vesting of time-vesting restricted stock and performance-vesting restricted stock units during 2023:

  89. Option Exercises and Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Christopher H. Hunter | 3,380 | $247,653(1) | | Heather Dixon | – | – | | Brian P. Farley | – | – | | John S. Hollinsworth | 206,225 | 16,677,416(2) | | | 1,260 | 92,320(1) | | | 1,405 | 103,563(3) | | | 7,123 | 494,621(4) | | | 5,000 | 366,700(5) | | | 2,835 | 218,210(6) | | David M. Duckworth | 195,248 | 15,789,706(2) | | | 1,282 | 93,932(1) | | | 1,330 | 98,034(3) | | | 6,744 | 468,303(4) | | | 2,407 | 169,718(7) | | Laurence L. Harrod | 191,301 | 15,470,512(2) | | | 1,116 | 81,769(1) | | | 1,303 | 96,044(3) | | | 6,608 | 458,860(4) |

  90. Option Exercises and Stock Vested

    | (1) Based on the closing sales price of our Common Stock of $73.27 on the NASDAQ Global Select Market on April 10, 2023, the first business day immediately prior to the date that the shares of time-vesting restricted stock vested. |

  91. Option Exercises and Stock Vested

    | (2) Based on the closing sales price of our Common Stock of $80.87 on The NASDAQ Global Select Market on February 21, 2023, the date that the performance-vesting restricted stock units vested. See the section entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Equity-Based Compensation – 2020 Annual Awards” in our Proxy Statement dated March 24, 2021 for more information about the performance-vesting restricted stock units. |

  92. Option Exercises and Stock Vested

    | (3) Based on the closing sales price of our Common Stock of $73.71 on The NASDAQ Global Select Market on April 21, 2023, the first business day immediately prior to the date that the shares of time-vesting restricted stock vested. |

  93. Option Exercises and Stock Vested

    | (4) Based on the closing sales price of our Common Stock of $69.44 on The NASDAQ Global Select Market on March 23, 2023, the first business day immediately prior to the date that the shares of time-vesting restricted stock vested. |

  94. Option Exercises and Stock Vested

    | (5) Based on the closing sales price of our Common Stock of $73.34 on The NASDAQ Global Select Market on March 6, 2023, the first business day immediately prior to the date that the shares of time-vesting restricted stock vested. |

  95. Option Exercises and Stock Vested

    | (6) Based on the closing sales price of our Common Stock of $76.97 on The NASDAQ Global Select Market on August 11, 2023, the first business day immediately prior to the date that the shares of time-vesting restricted stock vested. |

  96. Option Exercises and Stock Vested

    | (7) Based on the closing sales price of our Common Stock of $70.51 on The NASDAQ Global Select Market on May 1, 2023, the first business day immediately prior to the date that the shares of time-vesting restricted stock vested. |

  97. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The following table shows the activity during 2023 and the aggregate balances held by each of our Named Executive Officers at December 31, 2023 under the Deferred Compensation Plan.

  98. Nonqualified Deferred Compensation

    | Name | Executive Contributions in 2023($)(1) | Company Contributions in 2023($) | Aggregate Earnings in 2023($) | Aggregate Withdrawals / Distributions($) | Aggregate Balance at December 31, 2023($)(2) | | Christopher H. Hunter | $– | $– | $– | $– | $– | | Heather Dixon | – | – | – | – | – | | Brian P. Farley | – | – | – | – | – | | John S. Hollinsworth | 58,369 | – | 14,762 | – | 125,428 | | David M. Duckworth | 148,319 | – | 310,959 | – | 2,184,906 | | Laurence L. Harrod | 693,007 | – | 257,631 | – | 2,620,814 |

  99. Nonqualified Deferred Compensation

    | (1) These amounts are included in the Summary Compensation Table above. |

  100. Nonqualified Deferred Compensation

    | (2) All amounts other than 2023 earnings are included in the Summary Compensation Table above. |

  101. Nonqualified Deferred Compensation

    Under the plan, participants may defer up to 50% of their annual base compensation and up to 100% of any performance-based compensation. Participants are fully vested in their deferral accounts as to amounts they elect to defer. No employer matching contributions are made to the Deferred Compensation Plan. Participants will be able to select from several fund choices and their deferred compensation account will increase or decrease in value in accordance with the performance of the funds selected. Participants may receive a distribution from the Deferred Compensation Plan upon a qualifying distribution event such as separation from service, disability, death, change in control or an unforeseeable emergency or on a specified date selected by a participant. Following a participant’s separation from the Company for any reason, the participant’s vested interest in the account is paid to the participant (or the participant’s beneficiary in the event of the participant’s death) either in a lump sum or up to ten annual installments, as elected by the participant. The Deferred Compensation Plan is intended to be an unfunded plan administered and maintained by the Company primarily for the purpose of providing deferred compensation benefits to participants.

  102. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    Potential Payments Upon Termination or Change in Control under the Employment Agreements We entered into an employment agreement with Mr. Hunter effective April 11, 2022, with Ms. Dixon effective July 10, 2023, with Mr. Farley effective July 26, 2023, and with Mr. Hollinsworth effective July 15, 2019 (collectively, the “Employment Agreements”). A summary of the Employment Agreements for each applicable Named Executive Officer is provided below. For more information about the compensation or benefits received by Messrs. Duckworth and Harrod related to their transition from the Company, see “EXECUTIVE COMPENSATION – Potential Payments Upon Termination or Change in Control under the Employment Agreements – Mr. Duckworth’s Payments related to his Resignation and – Mr. Harrod’s Payments related to his Resignation”. Compensation and Benefits The base salaries under the Employment Agreements are subject to an annual increase in the sole discretion of our Board. In addition to base salary, under the Employment Agreements the executives are entitled to participate, in their sole discretion, in all of our employee benefit programs for which senior executive employees are generally eligible. Each executive is also reimbursed for reasonable expenses incurred in connection with services performed under each executive’s Employment Agreement. Non-Competition and Non-Solicitation During the term of each Employment Agreement and for 12 months thereafter (in the case of Ms. Dixon and Messrs. Farley and Hollinsworth) or 24 months thereafter (in the case of Mr. Hunter), each such executive is prohibited from (i) directly or indirectly managing, controlling, consulting, rendering services for or participating, engaging or owning an interest in any business which derives 25% of its gross revenue from the business of providing behavioral healthcare and/or related services and (ii) directly or indirectly managing, controlling, rendering services for or participating or consulting with any unit, division, segment or subsidiary of any other business that engages in or otherwise competes with (or was organized for the purpose of engaging in or competing with) the business of providing behavioral healthcare and/or related services (subject to certain exceptions), in each case within any geographical area in which we engage in such businesses. During the term of each Employment Agreement and for 12 months thereafter (in the case of Ms. Dixon and Messrs. Farley and Hollinsworth) or 24 months thereafter (in the case of Mr. Hunter), each such executive is prohibited from directly or indirectly soliciting or hiring any employee or independent contractor of ours or directly or indirectly soliciting any customer, supplier, licensee, licensor or other business relation of ours. For Mr. Hunter, his non-compete and non-solicitation periods are reduced to 18 months if he is terminated without “Cause” or resigns with “Good Reason” during the period beginning 3 months prior to and 18 months following a “Change in Control” of the Company (the “Change in Control Period”). In addition, the executives are subject to customary confidentiality and non-disparagement obligations both during and following their employment with the Company. Retention Bonus Under the Employment Agreements for Ms. Dixon and Mr. Farley, each is entitled to receive a retention bonus equal to $300,000 and $400,000, respectively, for continued service through March 31, 2024. Severance Under the Employment Agreements for Ms. Dixon and Messrs. Farley, Hollinsworth and Hunter, if the executive is terminated without “Cause” or resigns with “Good Reason,” such executive is generally entitled to receive (subject to the satisfaction of certain conditions):

  103. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | Such executive’s base salary through the termination date; |

  104. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | Any accrued but unpaid cash bonus with respect to a completed performance period, and, for Ms. Dixon and Mr. Farley, any unpaid retention bonus; |

  105. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | Any unused and unpaid time off and sick pay accrued through the termination date, any incurred but unreimbursed business expenses as of the termination date, and all other payments, benefits or fringe benefits pursuant to any applicable compensation arrangement as of the termination date; |

  106. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | For Mr. Hunter, an amount equal to one and a half (1.5) times, and two (2) times, his base salary and target cash bonus as in effect on the termination date, depending on whether such termination occurs outside, or during, the Change of Control Period, respectively; |

  107. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | For Ms. Dixon and Messrs. Farley and Hollinsworth, an amount equal to such executive’s base salary and target cash bonus as in effect on the termination date; |

  108. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | For Ms. Dixon and Messrs. Farley and Hollinsworth, a prorated cash bonus amount for the calendar year in which the termination occurs, determined as if all of the subjective performance objectives for such year have been achieved at the target level; |

  109. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | An amount equal to the after-tax cost of the premiums for continued health and dental insurance for the executive and/or his or her dependents in accordance with COBRA for a specified period; |

  110. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | For Mr. Hunter, either full accelerated vesting of a prorated portion of outstanding performance-vesting equity awards (with outstanding performance conditions deemed satisfied at target levels) or delay of vesting and forfeiture of a prorated portion of outstanding performance-vesting equity awards, depending on whether such termination occurs outside, or during, the Change of Control Period, respectively; and |

  111. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | For Ms. Dixon and Messrs. Farley and Hollinsworth, full and immediate vesting of the time-vesting components of such executive’s outstanding annual equity and equity-based awards, and delay of vesting and forfeiture of such executive’s outstanding annual equity and equity-based awards that are subject to performance-vesting criteria (all such payments collectively, the “New Termination Payments”). |

  112. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    “Cause” (as defined in the Employment Agreements for Mr. Hunter) means the occurrence of one or more of the following with respect to the applicable executive; provided that no determination of “Cause” may be made under certain circumstances until Mr. Hunter has been given written notice detailing the specific Cause event and a period of thirty (30) business days following receipt of such notice to cure such event:

  113. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | the arrest and indictment for, conviction of or plea of nolo contendere to a felony or other crime involving moral turpitude or the conviction of any crime involving misappropriation, embezzlement or fraud with respect to the Company or any of its subsidiaries or any of their customers, suppliers or other business relations; |

  114. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | willful conduct outside the scope of his duties and responsibilities under his Employment Agreement that causes the Company or any of its subsidiaries substantial public disgrace or disrepute or demonstrable economic harm; |

  115. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | repeated failure to perform duties consistent with his Employment Agreement as reasonably directed by the Board; |

  116. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | any willful act or knowing omission of aiding or abetting a competitor of the Company or any of its subsidiaries to the disadvantage or detriment of the Company or any of its subsidiaries; |

  117. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | material breach of fiduciary duty or gross negligence in the performance of his duties to the Company or any of its subsidiaries; |

  118. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | intentional misconduct in the performance of his duties to the Company or any of its subsidiaries; |

  119. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | an administrative or other proceeding arising as a result of his action that results in his suspension or debarment from participation in any contracts with, or programs of, the United States or any of the fifty states or any agency or department thereof, or any finding of a governmental agency that he personally has engaged in misconduct in connection with his employment by the Company; |

  120. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | any other material breach by him of his Employment Agreement or material breach of any other agreement between him and the Company or any of its subsidiaries or any written policy of the Company or any of its subsidiaries; or |

  121. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | failure by him to, or notification from him of his intent not to, relocate to the greater Nashville, Tennessee area as requested by the Board. |

  122. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    “Cause” (as defined in the Employment Agreements for Ms. Dixon and Mr. Farley) means the occurrence of one or more of the following with respect to the applicable executive:

  123. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | the conviction of or plea of nolo contendere to a felony or other crime involving moral turpitude or the conviction of any crime involving misappropriation, embezzlement or fraud with respect to the Company or any of its subsidiaries or any of their customers, suppliers or other business relations; |

  124. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | conduct outside the scope of such executive’s duties and responsibilities under such Employment Agreement that causes the Company or any of its subsidiaries substantial public disgrace or disrepute or economic harm; |

  125. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | repeated failure to perform duties consistent with such Employment Agreement as reasonably directed by the Board; |

  126. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | any act or knowing omission aiding or abetting a competitor, supplier or customer of the Company or any of its subsidiaries to the disadvantage or detriment of the Company or any of its subsidiaries; |

  127. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | breach of fiduciary duty, gross negligence or willful misconduct with respect to the Company or any of its subsidiaries; |

  128. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | an administrative or other proceeding resulting in the suspension or debarment of such executive from participation in any contracts with, or programs of, the United States or any individual state or any agency or department thereof; or |

  129. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | any other material breach by such executive of such Employment Agreement or any other agreement between such executive and us, which is not cured to the reasonable satisfaction of the Board within thirty (30) days after written notice thereof to such executive. |

  130. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    “Cause” (as defined in the Employment Agreements for Mr. Hollinsworth) means the occurrence of one or more of the following with respect to such executive; provided that no determination of “Cause” may be made until such executive has been given written notice detailing the specific Cause event and a period of fifteen (15) business days following receipt of such notice to cure such event:

  131. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | the conviction of or plea of nolo contendere to a felony or the conviction of any crime involving misappropriation, embezzlement or fraud with respect to the Company or any of its subsidiaries or any of their customers, suppliers or other business relations; |

  132. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | willful conduct outside the scope of such executive’s duties and responsibilities under his Employment Agreement that causes the Company or any of its subsidiaries substantial public disgrace or disrepute or demonstrable economic harm; |

  133. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | repeated failure to perform duties consistent with his Employment Agreement as reasonably directed by the Board; |

  134. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | any willful act or knowing omission of aiding or abetting a competitor of ours to our disadvantage or detriment; |

  135. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | material breach of fiduciary duty, gross negligence or willful misconduct with respect to the Company or any of its subsidiaries; |

  136. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | an administrative or other proceeding arising as a result of such executive’s actions that results in the suspension or debarment of such executive from participation in any contracts with, or programs of, the United States or any individual state or any agency or department thereof, or any finding of a governmental agency that such executive personally has engaged in misconduct in connection with her employment by the Company or any predecessor employer; or |

  137. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | ● | any other material breach by such executive of his Employment Agreement or any other agreement between such executive and the Company or any of its subsidiaries. |

  138. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    “Good Reason” (as defined in the Employment Agreements) means if the applicable executive resigns his or her employment with the Company as a result of one or more of the following actions (in each case taken without the executive’s written consent): (i) a reduction in such executive’s base salary; (ii) a material diminution of such executive’s job duties or responsibilities inconsistent with the executive’s position; (iii) any other material breach by the Company of such Employment Agreement; or (iv) a relocation of the Company’s principal executive offices and corporate headquarters outside of a 30-mile radius of Nashville, Tennessee, or in the case of Ms. Dixon and Mr. Farley, Franklin, Tennessee, following relocation thereto in accordance with such Employment Agreement; provided that, none of the events described in clauses (i) through (iv) shall constitute Good Reason unless such executive shall have notified us in writing describing the event which constitutes Good Reason within ninety (90) days after the occurrence of such event and then only if we shall have failed to cure such event within thirty (30) days after our receipt of such written notice and such executive elects to terminate his or her employment as a result at the end of such thirty (30) day period. If an executive that is party to an Employment Agreement dies or becomes disabled, such executive is entitled to the Old Termination Payments (other than the amount equal to a multiple of the target annual cash bonus amount and the amount equal to a multiple of such executive’s base salary as in effect on the termination date) or New Termination Payments, as applicable; provided, that in the case of Mr. Hunter, his payment with respect to the annual cash bonus shall be a prorated cash bonus amount for the calendar year in which the termination occurs and he shall forfeit all outstanding equity awards other than a prorated portion of outstanding performance-vesting equity awards subject to the performance period preceding the termination date, and in the case of Ms. Dixon and Mr. Farley, such executive shall forfeit all outstanding equity awards. In the event that an executive becomes disabled not due to death, such executive is entitled to receive continued installment payments of such executive’s base salary as in effect on the termination date for a specified period of time. If we terminate an executive under an Employment Agreement for Cause or if any such executive resigns without Good Reason, such executive is only entitled to receive his or her unpaid base salary through the termination date and any bonus amount to which such executive is entitled by reference to the calendar year that ended on or prior to the termination date, and in the case of Messrs. Hollinsworth and Hunter, all other payments, benefits or fringe benefits pursuant to any applicable compensation arrangement as of the termination date. Upon any termination of employment under an Employment Agreement, whether voluntary or otherwise, such executive has the option to elect to continue health insurance coverage until the earlier of (A) such time as the executive is eligible to participate in another health plan or (B) the executive becomes eligible for Medicare. The tables below show the amounts that each Named Executive Officer employed as of December 31, 2023 would have received assuming that the Named Executive Officer’s employment was terminated or he or she died or became disabled effective December 31, 2023. As of December 31, 2023, none of the Named Executive Officers were entitled to any compensation or benefits for resignation or retirement, other than in the case of Mr. Duckworth, shares of Common Stock issued upon vesting of the performance-vesting restricted stock units awarded in 2021. Furthermore, the Employment Agreements (other than the Employment Agreement for Mr. Hunter) do not distinguish a termination following a change in control from a termination in another context. Therefore, a termination following a change in control will entitle a Named Executive Officer to severance benefits only if the Named Executive Officer’s employment is otherwise terminated without Cause by the Company or by the Named Executive Officer for Good Reason. Mr. Hunter

  139. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | Executive Benefits and Payments upon Termination | Involuntary Termination without Cause (outside of CoC Period)(1) | Involuntary Termination without Cause during CoC Period(2) | Death or Disability | | Base Salary | $1,500,000(3) | $2,000,000(3) | $500,000(4) | | Non-Equity Incentive Plan Compensation(5) | 3,125,000 | 3,750,000 | 1,250,000 | | Time-Vesting Restricted Stock (unvested)(6) | — | 2,133,035 | — | | Insurance Benefits | 51,327(7) | 68,436(7) | 17,109(8) | | Accrued Vacation(9) | 76,923 | 76,923 | 76,923 |

  140. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    Ms. Dixon

  141. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | Executive Benefits and Payments upon Termination | Involuntary Termination without Cause(1) | Death or Disability | | Base Salary | $690,000(3) | $345,000(4) | | Non-Equity Incentive Plan Compensation(5) | 1,173,000 | 586,500 | | Time-Vesting Restricted Stock (unvested)(6) | 2,559,237 | — | | Insurance Benefits | 25,837(7) | 12,919(8) | | Accrued Vacation(9) | 26,565 | 26,565 |

  142. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    Mr. Farley

  143. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | Executive Benefits and Payments upon Termination | Involuntary Termination without Cause(1) | Death or Disability | | Base Salary | $550,000(3) | $275,000(4) | | Non-Equity Incentive Plan Compensation(5) | 935,000 | 467,500 | | Time-Vesting Restricted Stock (unvested)(6) | 1,399,680 | — | | Insurance Benefits | 34,218(7) | 17,109(8) | | Accrued Vacation(9) | 19,546 | 19,546 |

  144. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    Mr. Hollinsworth

  145. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | Executive Benefits and Payments upon Termination | Involuntary Termination without Cause(1) | Death or Disability | | Base Salary | $652,030(3) | $326,015(4) | | Non-Equity Incentive Plan Compensation(5) | 1,108,451 | 554,226 | | Time-Vesting Restricted Stock (unvested)(6) | 1,481,872 | 1,481,872 | | Insurance Benefits | 32,928(7) | 10,976(8) | | Accrued Vacation(9) | 50,157 | 50,157 |

  146. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (1) The amounts shown would have been payable if we terminated the Named Executive Officer’s employment without Cause (as defined in his or her Employment Agreement) or if the Named Executive Officer resigned his or her employment for Good Reason (as defined in his or her Employment Agreement), provided that the Named Executive Officer had not breached the non-competition, non-solicitation, confidentiality and proprietary information provisions of his or her Employment Agreement. |

  147. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (2) The amounts shown would have been payable if we terminated Mr. Hunter’s employment without Cause (as defined in his or her Employment Agreement) or if Mr. Hunter resigned his employment for Good Reason (as defined in his Employment Agreement) during the Change of Control Period (as defined in his Employment Agreement), provided that Mr. Hunter had not breached the non-competition, non-solicitation, confidentiality and proprietary information provisions of his Employment Agreement. |

  148. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (3) The amount shown reflects, for Mr. Hunter, one and a half (1.5) and two (2) times his base salary depending on whether such termination occurs outside, or during, the Change of Control Period, respectively, for Ms. Dixon and Messrs. Farley and Hollinsworth, twelve months of his or her base salary, in each case such base salary as in effect on December 31, 2023 pursuant to the terms of the Employment Agreements (assuming that he or she is not in violation of the restrictive covenants set forth in his or her Employment Agreement or his General Release, if applicable). Pursuant to the Employment Agreements, base salary amounts are payable in regular installments over the course of the applicable severance period. |

  149. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (4) The amount shown reflects the Named Executive Officer’s base salary as in effect on December 31, 2023 payable for a period of six months in the event of disability pursuant to the terms of his or her Employment Agreement. |

  150. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (5) The amount shown reflects the cash incentive award for 2023 of 125% of the base salary for Mr. Hunter, two (2) times 85% of the base salary for Ms. Dixon and Messrs. Farley and Hollinsworth, assuming achievement of the performance goals at the target level, pursuant to the terms of the Employment Agreements and each of their non-equity incentive compensation plans for 2023. In addition, Mr. Hunter is entitled to an additional payment of one and a half (1.5) times and two (2) times his target annual cash bonus depending on whether such termination occurs outside, or during, the Change of Control Period, respectively. |

  151. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (6) The amount shown reflects the value of all unvested time-vesting restricted stock not intended to qualify as performance-based compensation for each Named Executive Officer (other than Mr. Hunter), which may immediately vest pursuant to the terms of his or her Employment Agreement depending on the type of termination, based on a market value of $77.76 per share as of December 29, 2023. Pursuant to the terms of his Employment Agreement, Mr. Hunter is only entitled to vest in unvested time-vesting restricted stock if such termination occurs within three months of a Change of Control. See “EXECUTIVE COMPENSATION – Outstanding Equity Awards at Fiscal Year-End.” Pursuant to each Named Executive Officer’s Employment Agreement, unvested performance-vesting restricted stock unit awards intended to qualify as performance-based compensation are not immediately forfeited at termination but remain subject to forfeiture restrictions related to pre-established performance goals until the results of the related goals have been satisfied. As of December 31, 2023, all unvested performance-vesting restricted stock units of each Named Executive Officer would remain subject to pre-established performance goals and would vest in future years based on future performance. See “EXECUTIVE COMPENSATION – Outstanding Equity Awards at Fiscal Year-End” for potential amounts that may be realized in the future with respect to each Named Executive Officer’s unvested performance-vesting restricted stock units as of December 31, 2023. |

  152. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (7) The amount shown reflects the cost of the premiums for continued health, dental and vision insurance for the Named Executive Officer or his or her dependents, in accordance with COBRA, for a period of 18 or 24 months for Mr. Hunter depending on whether such termination occurs outside, or during, the Change of Control Period, respectively, 18 months for Mr. Hollinsworth, and 12 months for Ms. Dixon and Mr. Farley, pursuant to the terms of the Employment Agreements. |

  153. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (8) The amount shown reflects the cost of the premiums for continued health, dental and vision insurance for the Named Executive Officer or his or her dependents, in accordance with COBRA, for a period of six months pursuant to the terms of his or her Employment Agreement. |

  154. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    | (9) The amount shown reflects unused paid time off, pursuant to the terms of the Named Executive Officer’s Employment Agreement and our paid time off policies. |

  155. Potential Payments Upon Termination or Change in Control under the Employment Agreements

    Mr. Duckworth’s Payments related to his Resignation Mr. Duckworth resigned as the Company’s Chief Financial Officer effective July 10, 2023, but continued to provide transition advisory services through February 28, 2024. In connection with such resignation and pursuant to the terms of a Transition Agreement with the Company, Mr. Duckworth received (a) approximately $46,000 for unused paid time off and sick pay accrued through his resignation date, and (b) approximately $58,000 of consulting fees post-resignation in 2023. In addition, Mr. Duckworth was entitled to receive additional shares of common stock in the future pursuant to performance-vesting restricted stock units previously granted to him in 2021 based upon the Company’s 2023 performance. Under the terms of such Transition Agreement, Mr. Duckworth forfeited his rights to any additional compensation, severance or other benefits, including all other outstanding equity and non-equity incentive awards. Mr. Harrod’s Payments related to his Resignation Mr. Harrod resigned as the Company’s Executive Vice President of Finance effective June 30, 2023, but continued to provide transition advisory services through December 31, 2023. In connection with such resignation and pursuant to the terms of a Separation and Consulting Agreement with the Company, Mr. Harrod received (a) approximately $10,000 for unused paid time off and sick pay accrued through his resignation date, and (b) approximately $62,000 of consulting fees post-resignation in 2023. In addition, Mr. Harrod remained eligible to earn a prorated portion of his 2023 annual non-equity incentive award subject to actual achievement of the 2023 performance goals. Under the terms of such Separation and Consulting Agreement, Mr. Harrod forfeited his rights to any additional compensation, severance or other benefits, including all other outstanding equity and non-equity incentive awards. 2021, 2022 and 2023 Performance Vesting Equity Awards As described in “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation – Equity-Based Compensation,” shares earned under performance-vesting restricted stock unit awards made in 2021, 2022 and 2023 are generally accumulated and released at the end of the applicable three-year term of the award. Given the longer payout for such awards, awards for an executive whose employment is terminated during the performance period due to death, disability, retirement, or without cause or for good reason may vest at the end of the performance period, subject to the Company’s achievement of the performance goals.

  156. Pay Ratio

    Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Hunter, our Chief Executive Officer:

  157. Pay Ratio

    | ● | the median of the annual total compensation of all employees of the Company (other than our former Chief Executive Officer) was $42,416; and |

  158. Pay Ratio

    | ● | the annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table included elsewhere in this Proxy Statement, was $7,404,606. |

  159. Pay Ratio

    Based on this information, for 2023, the ratio of the annual total compensation of Mr. Hunter, our Chief Executive Officer, to the median of the annual total compensation of all employees was 175 to 1. For purposes of the foregoing pay ratio disclosure, we were required to identify the median employee of all employees of the Company, without regard to their location, compensation arrangements or employment status (full-time versus part-time) and then determine the annual total compensation that “median employee” earned during 2023. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee in 2023, we took the following steps: Pursuant to applicable regulations, we are required to identify our median employee only once every three years. Accordingly, for purposes of determining the median annual total compensation of employees and the resulting pay ratio for 2023, we have used the 2023 compensation of the median employee that we identified as of December 31, 2021. We determined that, as of December 31, 2021, our employee population consisted of approximately 22,500 individuals working at the Company and its consolidated subsidiaries in the United States and Puerto Rico (as reported in Item 1, Business, in our Annual Report on Form 10-K for the year ended December 31, 2022). This population consisted of our full-time, part-time and temporary employees, but excluded approximately 800 employees of CenterPointe Behavioral Health System, LLC and its affiliates that we acquired on December 31, 2021. The inclusion of part-time and temporary employees substantially reduces the median of the annual total compensation of all of our employees. We prepared a list of employees at December 31, 2021 from our payroll records and evaluated total compensation. Total compensation includes salary, stock awards and non-equity incentive plan compensation. Compensation for full-time and part-time employees who commenced employment after January 1, 2021 was annualized. Compensation for temporary employees was not annualized. The SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies, including those within our peer group and industry.

  160. Pay Versus Performance

    Pay Versus Performance The following sets forth certain information regarding compensation actually paid to our Named Executive Officers during 2023 compared to certain measures of our financial performance:

  161. Pay Versus Performance

    | Year | Summary Comp. Table Total for CEO | | Comp. Actually Paid to CEO(3) | | Average Summary Comp. Table Total for Non-CEO NEOs(4) | Average Comp. Actually Paid to Non-CEO NEOs(3) | Value of Initial Fixed $100 Investment Based On: | | Net (Loss) Income (in thousands) | Adjusted EPS(7) | | | Christopher H. Hunter(1) | Debra K. Osteen(2) | Christopher H. Hunter(1) | Debra K. Osteen(2) | | | TSR(5) | Peer Group TSR(6) | | | | 2023 | $7,404,606 | $ N/A | $8,352,752 | $ N/A | $3,289,184 | $1,079,088 | $234 | $124 | $(15,661) | $3.51 | | 2022 | 6,415,224 | 2,620,043 | 8,482,132 | 17,102,308 | 3,040,751 | 9,817,787 | 248 | 118 | 280,033 | 3.19 | | 2021 | N/A | 9,853,107 | N/A | 29,812,731 | 3,656,112 | 8,870,858 | 183 | 147 | 195,562 | 2.70 | | 2020 | N/A | 5,131,395 | N/A | 17,648,915 | 2,604,425 | 6,550,425 | 151 | 134 | (669,199) | 2.81 |

  162. Pay Versus Performance

    | (1) Mr. Hunter was appointed Chief Executive Officer effective April 11, 2022. |

  163. Pay Versus Performance

    | (2) Ms. Osteen retired as Chief Executive Officer effective April 11, 2022. |

  164. Pay Versus Performance

    | (3) To calculate Compensation Actually Paid (“CAP”), the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation: |

  165. Pay Versus Performance

    CEO SCT Table to CAP Reconciliation:

  166. Pay Versus Performance

    | Name | Year | SCT Total | Deductions from SCT Total(a) | Additions to SCT Total(b) | CAP | | Christopher H. Hunter | 2023 | $7,404,606 | $4,749,977 | $5,698,123 | $8,352,752 | | | 2022 | 6,415,224 | 4,500,022 | 6,566,930 | 8,482,132 | | Debra K. Osteen | 2023 | – | – | – | – | | | 2022 | 2,620,043 | 1,059,857 | 15,542,122 | 17,102,308 | | | 2021 | 9,853,107 | 6,989,753 | 26,949,377 | 29,812,731 | | | 2020 | 5,131,395 | 2,789,779 | 15,307,298 | 17,648,915 |

  167. Pay Versus Performance

    Average Non-CEO NEOs SCT Table to CAP Reconciliation:

  168. Pay Versus Performance

    | Year | SCT Total | Deductions from SCT Total(a) | Additions to SCT Total(b) | CAP | | 2023 | $3,289,184 | $2,503,492 | $293,396 | $1,079,088 | | 2022 | 3,040,751 | 1,720,243 | 8,497,279 | 9,817,787 | | 2021 | 3,656,112 | 1,963,594 | 7,178,340 | 8,870,858 | | 2020 | 2,604,425 | 1,116,717 | 5,062,717 | 6,550,425 |

  169. Pay Versus Performance

    | (a) Represents the grant date fair value of equity-based awards granted each year calculated in accordance with ASC 718. |

  170. Pay Versus Performance

    | (b) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. The equity component of CAP is further detailed in the table below. For performance-vesting restricted stock unit awards, fair value amounts have been computed consistent with the methodology used in the Company’s Consolidated Financial Statements as of December 31, 2020, 2021, 2022 and 2023, respectively. |

  171. Pay Versus Performance

    Equity Component of CAP: Christopher H. Hunter

  172. Pay Versus Performance

    | Year | Fair Value of Current Year Equity Awards at Year End | Change in Value of Prior Years’ Awards Unvested at Year End | Change in Value of Prior Years’ Awards That Vested in the Year | Equity Value Included in CAP | | 2023 | $6,050,233 | $(321,521) | (30,589) | $5,698,123 | | 2022 | 6,566,930 | - | - | 6,566,930 | | 2021 | - | - | - | - | | 2020 | - | - | - | - |

  173. Pay Versus Performance

    Debra K. Osteen

  174. Pay Versus Performance

    | Year | Fair Value of Current Year Equity Awards at Year End | Change in Value of Prior Years’ Awards Unvested at Year End | Change in Value of Prior Years’ Awards That Vested in the Year | Equity Value Included in CAP | | 2023 | - | - | - | - | | 2022 | $9,972,986 | $7,341,244 | $(1,772,108) | $15,542,122 | | 2021 | 23,567,139 | 3,215,353 | 166,885 | 26,949,377 | | 2020 | 13,014,224 | 533,148 | 1,759,927 | 15,307,298 |

  175. Pay Versus Performance

    Average Non-CEO NEOs

  176. Pay Versus Performance

    | Year | Fair Value of Current Year Equity Awards at Year End | Change in Value of Prior Years’ Awards Unvested at Year End | Change in Value of Prior Years’ Awards That Vested in the Year | Fair Value of Forfeited Awards at Prior Year End | Equity Value Included in CAP | | 2023 | $2,182,972 | $(89,974) | (255,921) | (1,543,681) | $293,396 | | 2022 | 5,228,345 | 3,399,089 | (130,155) | - | 8,497,279 | | 2021 | 5,891,861 | 1,147,507 | 138,972 | - | 7,178,340 | | 2020 | 4,691,771 | 419,942 | (48,996) | - | 5,062,717 |

  177. Pay Versus Performance

    | (4) The Named Executive Officers, other than the CEO, reflected in the Pay Versus Performance table represent the following individuals for each of the years listed below |

  178. Pay Versus Performance

    | 2020 | 2021 | 2022 | 2023 | | David M. Duckworth | David M. Duckworth | David M. Duckworth | Heather Dixon | | Christopher L. Howard | Christopher L. Howard | Christopher L. Howard | Brian P. Farley | | John S. Hollinsworth | John S. Hollinsworth | John S. Hollinsworth | John S. Hollinsworth | | Laurence L. Harrod | Laurence L. Harrod | Laurence L. Harrod | David M. Duckworth | | | | | Laurence L. Harrod |

  179. Pay Versus Performance

    | (5) An investment of $100 is assumed to have been made in our Common Stock as of December 31, 2019. TSR was calculated by multiplying the initial investment of $100 by the quotient of the closing price of our Common Stock on December 31, 2020, 2021, 2022 and 2023, divided by our closing price on December 31, 2019. |

  180. Pay Versus Performance

    | (6) Reflects the cumulative total stockholder return for the S&P Health Care Services Select Industry Index (the “S&P HC Index”). An investment of $100 is assumed to have been made in the S&P HC Index as of December 31, 2019. Peer Group TSR was calculated by multiplying the initial investment of $100 by the quotient of the closing price of the S&P HC Index on December 31, 2020, 2021, 2022 and 2023 divided by the closing price on December 31, 2019, with dividends reinvested at the time they are paid. |

  181. Pay Versus Performance

    | (7) Adjusted EPS is a non-GAAP financial measure and the core long-term metric we use for purposes of evaluating performance for our compensation program, as further described in the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation - Annual Non-Equity Incentive Compensation.” |

  182. Pay Versus Performance

    Financial Performance Measures As further described in the section above entitled “COMPENSATION DISCUSSION AND ANALYSIS – Components of Executive Compensation,” the Company’s executive compensation program is heavily weighted to performance-based pay, with a significant emphasis on long-term performance and stockholder value creation. The Company primarily uses two core metrics for both its long-term and short-term incentive awards: Adjusted EPS and Adjusted EBITDA. The Company uses Adjusted EPS and Adjusted EBITDA to determine annual cash incentive awards and performance-based equity awards because they are important measures of our performance and the performance of our management, they drive our success and growth and they are key criteria by which management plans and analyzes our business. In addition, the Company uses certain non-financial measures to determine annual cash incentive awards in order to incentivize and align achievement for certain key qualitative metrics. Therefore, the most important financial performance measures (and only financial measures used in current plans/awards) used by the Company to link compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:

  183. Pay Versus Performance

    | ● | Adjusted EPS |

  184. Pay Versus Performance

    | ● | Adjusted EBITDA |

  185. Pay Versus Performance

    Analysis of the Information Presented in the Pay versus Performance Table As described in more detail in the sections entitled “COMPENSATION DISCUSSION AND ANALYSIS” and “EXECUTIVE COMPENSATION,” our executive compensation program reflects a variable pay-for-performance philosophy, with a significant emphasis on long-term performance and stockholder value creation. While we utilize several performance measures to align executive compensation with our performance, all of those measures are not presented in the Pay versus Performance table. Furthermore, while we are required to disclose our net income for each covered fiscal year, it is not a metric currently used in our executive compensation program. We generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with rules adopted by the SEC, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table. Comparison of Compensation Actually Paid and Company TSR The following graph reflects the relationship between our CEO and average non-CEO NEO “compensation actually paid” versus our cumulative TSR, assuming an initial fixed investment of $100 on December 31, 2019, for the years ended December 31, 2020, 2021, 2022 and 2023. Comparison of Compensation Actually Paid and Net Income The following graph reflects the relationship between our CEO and average non-CEO NEO “compensation actually paid” and our net income for the years ended December 31, 2020, 2021, 2022 and 2023. Comparison of Compensation Actually Paid and Adjusted EPS The following graph reflects the relationship between our CEO and average non-CEO NEO “compensation actually paid” and the our Adjusted EPS for the years ended December 31, 2020, 2021, 2022 and 2023. Comparison of Company TSR and Peer Group TSR The following graph reflects the relationship between the our TSR and the TSR of the peer group presented for this purpose, the S&P HC Index.

  186. Director Compensation

    Director Compensation The table below sets forth the 2023 compensation earned by or paid to our non-management directors. Mr. Hunter does not receive any additional compensation for his service as a director.

  187. Director Compensation

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | | Jason R. Bernhard | $102,000 | $159,998 | $261,998 | | E. Perot Bissell | 139,000 | 159,998 | 298,998 | | Michael J. Fucci | 129,500 | 159,998 | 289,498 | | Vicky B. Gregg | 137,000 | 159,998 | 296,998 | | William F. Grieco | 139,500 | 159,998 | 299,498 | | Patrice A. Harris, M.D., M.A. | 99,500 | 160,019 | 259,519 | | R. David Kelly | 96,975 | 159,998 | 256,973 | | Wade D. Miquelon | 129,500 | 159,998 | 289,498 | | Debra K. Osteen | 99,500 | 159,998 | 259,498 | | Reeve B. Waud | 241,970 | 159,998 | 401,968 |

  188. Director Compensation

    | (1) Includes annual retainers and fees associated with serving on a Board committee. Each of Messrs. Kelly and Waud elected to shares of our Common Stock in lieu of his annual cash retainer on May 18, 2023. The grant date fair value of such stock awards is computed by multiplying the total number of shares subject to the award by the closing market price of our Common Stock on the date immediately preceding the date of grant ($71.78). |

  189. Director Compensation

    | (2) This column reflects the grant date fair value of time-vesting restricted stock awards granted to directors calculated in accordance with ASC 718. On May 18, 2023, each non-management director elected or continuing to serve as a member of the Board, other than Dr. Harris, received an award of 2,229 shares of time-vesting restricted stock. The grant date fair value of time-vesting restricted stock awards is computed by multiplying the total number of shares subject to the award by the closing market price of our Common Stock on the date immediately preceding the date of grant ($71.78). After joining the Board, Dr. Harris received 2,137 shares of time-vesting restricted stock on October 26, 2023 based on the closing market price of our Common Stock on October 25, 2023 ($74.88). |

  190. Director Compensation

    As of December 31, 2023, each of Messrs. Bernhard, Bissell, Fucci, Grieco, Miquelon, and Waud, and Ms. Gregg held 4,615 shares of time-vesting restricted stock. As of December 31, 2023, Dr. Harris held 2,137 shares of time-vesting restricted stock, Mr. Kelly held 3,615 shares of time-vesting restricted stock, and Ms. Osteen held 3,765 shares of time-vesting restricted stock. Our Board of Directors adopted a compensation plan for non-management directors effective January 1, 2013, as amended in 2016, 2019, 2020 and 2023 (the “Directors Plan”), which provides:

  191. Director Compensation

    | ● | An annual cash retainer of $87,000; |

  192. Director Compensation

    | ● | An annual cash retainer of $15,000 for each member of the Audit and Risk Committee and $30,000 for the chair of the Audit and Risk Committee; |

  193. Director Compensation

    | ● | An annual cash retainer of $12,500 for each member of the Compensation Committee and $27,500 for the chair of the Compensation Committee; |

  194. Director Compensation

    | ● | An annual cash retainer of $10,000 for each member of the Nominating Committee and $22,000 for the chair of the Nominating Committee; |

  195. Director Compensation

    | ● | An annual cash retainer of $12,500 for each member of the Compliance Committee and $27,500 for the chair of the Compliance Committee; |

  196. Director Compensation

    | ● | An annual cash retainer of $15,000 for each member of the Finance Committee and $30,000 for the chair of the Finance Committee; |

  197. Director Compensation

    | ● | An annual cash retainer of $45,000 for the Lead Director (if applicable) and $125,000 for the Chairman of the Board (if held by a non-management director); |

  198. Director Compensation

    | ● | Additional cash compensation to be approved by the Chairman of the Board and Chairman of the Compensation Committee for each director who, at the discretion of the Chairman of the Board and Chairman of the Compensation Committee, devotes extraordinary time and effort to the Company; |

  199. Director Compensation

    | ● | An initial grant of time-vesting restricted stock having a value equal to $160,000; |

  200. Director Compensation

    | ● | An annual grant of time-vesting restricted stock having a value equal to $160,000; and |

  201. Director Compensation

    | ● | An annual director compensation limit of $600,000 earned in a given year, including both cash compensation and equity awards. |

  202. Director Compensation

    In addition to the compensation described above, we also reimburse our directors for travel and out-of-pocket expenses in connection with their attendance at meetings of our Board of Directors. Under the Directors Plan, all annual retainers shall be paid on the date of our annual meeting of stockholders (the “Annual Meeting Date”). Each year as of the Annual Meeting Date, each non-management member of our Board who is re-elected or who otherwise continues to be a member of the Board immediately thereafter is automatically granted under the Directors Plan, without further action by us, our Board of Directors, the Compensation Committee or our stockholders, shares of our time-vesting restricted stock having a value equal to $160,000. The value of the restricted shares shall be based on the closing trading price of our Common Stock on the trading day immediately preceding the Annual Meeting Date. All restricted shares issued to non-management directors shall vest over three years with such shares to vest 33⅓% per year on the three successive anniversary dates of the grant of time-vesting restricted stock beginning on the first anniversary of the grant date. Each non-management director may elect to have the Company pay all or a portion of his or her cash retainer(s) in shares of our Common Stock in lieu of cash. The number of shares issued shall be determined by dividing the dollar amount of the applicable retainer(s) by the fair market value of a share (based on the closing trading price of our Common Stock on the trading day immediately preceding the Annual Meeting Date), rounded down to the nearest whole share. In no case shall any fractional shares be issued. In lieu of any fractional shares, non-management directors shall be entitled to cash equal to the value of any fractional shares. Shares issued in lieu of cash shall be fully vested and unrestricted shares issued pursuant to the Company’s incentive compensation plan and shall be issued on the Annual Meeting Date or, if the shares cannot be delivered due to a Company blackout period, then the shares will be delivered on the first business day following the end of the blackout period. Any election by a non-management director to receive his or her retainer(s) in shares must be made no later than the expiration of the election period established by the Compensation Committee and can only be made during a period in which the Company is not in a quarterly or special blackout period pursuant to the Company’s insider trading policy and at a time in which the director does not have material, non-public information. Each of our directors is a party to an Indemnification Agreement with the Company pursuant to which we have agreed to indemnify and advance expenses to such director in connection with his or her service as our director, officer or agent to the fullest extent permitted by law and as set forth in each such agreement and, to the extent applicable, to maintain insurance coverage for each such director under our policies of directors’ and officers’ liability insurance.