DEF 14A of U S Physical Therapy Inc /NV, Apr 11, 2025

DEF 14A of U S Physical Therapy Inc /NV

Filed Apr 11, 2025 · FY20240001140361-25-013467

Open on EDGAR

  1. PROPOSAL 1 — ELECTION OF DIRECTORS

    PROPOSAL 1 — ELECTION OF DIRECTORS The accompanying proxy card, unless marked to the contrary, will be voted in favor of the election of Christopher J. Reading, Kathleen A. Gilmartin, Nancy J. Ham, Dr. Bernard A. Harris, Jr., Michael G. Mayrsohn, Anne B. Motsenbocker, Regg E. Swanson and Clayton K. Trier. All of these nominees, except Mr. Mayrsohn, are current directors standing for re-election at the Annual Meeting to serve until the next annual meeting of stockholders or until their successor is elected and qualified. Mr. Mayrsohn currently is the Chief Executive Officer of, and an owner in, the Company’s recently acquired MSO Metro, LLC (“Metro”) subsidiary in New York. The Governance and Nominating Committee, which consists solely of directors who are independent under the applicable New York Stock Exchange (“NYSE”) listing standards, recommended that from and after the Annual Meeting the Board consist of eight directors and recommended the nomination of all seven current directors and Mr. Mayrsohn. Based on that recommendation, the Board resolved that from and after the Annual Meeting the Board shall consist of eight directors and the Board nominated each of the foregoing eight nominees recommended by the Governance and Nominating Committee for election at the Annual Meeting. The Board of Directors has affirmatively determined that Messrs. Trier and Swanson, Dr. Harris and Mses. Gilmartin, Ham and Motsenbocker, are independent under the NYSE listing standards. Mr. Reading, who is an executive officer of the Company, and Mr. Mayrsohn, who is an executive officer of one of the Company’s subsidiaries, were determined not to be independent under the NYSE listing standards. The nominees for director are:

  2. PROPOSAL 1 — ELECTION OF DIRECTORS

    | Nominees: | Age | Director Since | Position(s) Held | | Christopher J. Reading | 61 | 2004 | Chairman of the Board of Directors and Chief Executive Officer | | Kathleen A. Gilmartin | 73 | 2018 | Director | | Dr. Bernard A. Harris, Jr. | 68 | 2005 | Lead Independent Director | | Anne B. Motsenbocker | 63 | 2022 | Director | | Regg E. Swanson | 71 | 2007 | Director | | Clayton K. Trier | 73 | 2005 | Director | | Nancy J. Ham | 63 | 2023 | Director | | Michael G. Mayrsohn | 38 | N/A | Chief Executive Officer of Metro |

  3. PROPOSAL 1 — ELECTION OF DIRECTORS

    Director Biographies:

  4. Race/Ethnicity: African American

    Race/Ethnicity: African American Dr. Bernard A. Harris joined our Board in 2005 and has served as our Lead Independent Director since May 2024. Since 2018, Dr. Harris has served as Chief Executive Officer and Managing Partner of Vesalius Ventures, Inc. He currently serves on the boards of Raytheon Technologies (NYSE: RTX), Solventum (NYSE: SOLV) and MassMutual. He served as a trustee/director for Salient and Barings investment funds. He also served as a board member for the National Academies of Science, Engineering and Medicine - Board on Health Sciences Policy, and is currently on the boards of the Texas Medical Center, Astronaut Scholarship Foundation and the Harris Foundation, which he founded. Dr. Harris is a former NASA astronaut, has logged more than 438 hours and traveled over 7.2 million miles in space. He was a mission specialist on the space shuttle Columbia in 1993 and a payload commander on space shuttle Discovery in 1995. He completed a residency in internal medicine at the Mayo Clinic, a National Research Council Fellowship in endocrinology at the NASA Ames Research Center and trained as a flight surgeon at the United States Air Force School of Aerospace Medicine. He is a fellow of the American College of Physicians, and a member of the American Academy of Arts and Sciences.

  5. Kathleen A. Gilmartin

    Kathleen A. Gilmartin

  6. Independent Director since 2018

    Independent Director since 2018

  7. Chairperson of the Compensation Committee

    Chairperson of the Compensation Committee

  8. Age: 73

    Age: 73

  9. Race/Ethnicity: Caucasian

    Race/Ethnicity: Caucasian

  10. Gender: Female

    Gender: Female Ms. Gilmartin joined our Board in May 2018. Ms. Gilmartin is the former President and Chief Executive Officer of Caring Brands International and Interim HealthCare Inc., providers of home healthcare, skilled nursing, therapy and hospice care. Ms. Gilmartin’s career spanned twenty-five years with Interim HealthCare Inc. where she served as President and Chief Executive Officer from September 2008 until her retirement in February 2017. Ms. Gilmartin served as a director of Caring Brands International and Interim Healthcare, Inc. from February 2017 through October 2021. Ms. Gilmartin served as a director of the Research Institute for Home Care (formerly the Alliance of Home Health Quality and Innovation), a non-profit, national consortium of home health care providers and organizations from 2009 through 2023. Since December 2022, Ms. Gilmartin has served as a director of Harmar Mobility LLC, a manufacturer of specialty mobility products and provider of a range of mobility and accessibility solutions. Ms. Gilmartin also serves as a director since December 2022 for 101 Mobility LLC, a national network of franchised providers that install and service mobility devices and solutions in client homes throughout the U.S. Ms. Gilmartin also serves as a director since November 2023, for Elevate Care International, a national network of franchised providers of non-medical personal care in the U.S., Canada and Ireland. Also, Ms. Gilmartin is a Registered Nurse.

  11. Gender: Female

    Gender: Female Ms. Motsenbocker joined our Board in January 2022. Ms. Motsenbocker was a Managing Director at J.P. Morgan Chase, a global financial services company, until she retired in 2021. Over her 36 years with the firm, she held roles of increasing responsibility focusing on helping companies develop and implement capital strategies, manage risk, achieve operational excellence, and grow organically and through mergers and acquisitions. In her final position, she was the functional Chief Executive Officer of the southwest region of the Commercial Bank, a position that she held for seven years. Since 2022, Ms. Motsenbocker has served as an independent director of CSW Industrials (NASDAQ: CSWI), a diversified industrial growth company, where she serves as the Chair of the Audit Committee. From 2016 to 2022, she was a Director of Children’s Health System of Texas, one of the nation’s largest pediatric healthcare systems, where she served as Chair of the HR and Compensation Committee and as a member of the Audit Committee. Since October 2022, Ms. Motsenbocker has served as a Director of the National Kidney Foundation. She also currently serves on the boards of the United Way Foundation of Metropolitan Dallas and the NACD of North Texas.

  12. Director Qualifications

    Director Qualifications The Board of Directors believes that each of the directors and nominees for director listed above has the sound character, integrity, judgment and record of achievement necessary to be a member of the Board of Directors. In addition, each of the incumbent directors has exhibited during his or her prior service as a director the ability to operate cohesively with the other members of the Board of Directors and to challenge and question management in a constructive way. Moreover, the Board of Directors believes that each director and nominee for director brings a strong and unique background and skill set to the Board of Directors, giving the Board of Directors as a whole competence and experience in diverse areas, including corporate governance and board service, finance, management, leadership, compliance, technology and broad healthcare industry experience. Set forth below are certain specific experiences, qualifications and skills that led to the Board of Directors’ conclusion that each of the directors and nominees for director listed above should continue to serve as a director. Mr. Reading, as Chairman of the Board of Directors and Chief Executive Officer of the Company, provides the Board of Directors with a comprehensive knowledge of the Company, its history, and its businesses, having served the Company for 22 years. In addition, Mr. Reading brings to the Board of Directors his insight into the healthcare industry from over 40 years of experience in clinical care, operations and executive leadership positions in rehabilitation and ambulatory services companies. Dr. Harris brings to the Board of Directors a wide and varying set of experiences. He is a former astronaut, having completed two space shuttle missions, and recently honored as the 2022 recipient of the National Space Grant Distinguished Service Award. In addition, Dr. Harris is an internal medicine physician, which allows him to bring to the Board of Directors the perspective of an experienced healthcare professional. Dr. Harris’ service as Managing Partner of a venture capital firm also has afforded him with a wide range of experience in operating healthcare and technologies companies, and in investing in a variety of emerging technologies and informatics in the broad healthcare market. His service on the boards of National Academy of Medicine, the Texas Medical Center, and St. Luke’s Health System – Texas Division, provides him with a deep understanding of healthcare and healthcare services businesses. Also, Dr. Harris has two decades of experience with the Company, providing him with comprehensive knowledge of the Company and its structure, policies and management team, which he applies to his service as Lead Independent Director and Chair of the Nominating and Governance Committee. Ms. Gilmartin has extensive leadership experience in executive positions in healthcare companies, having served in executive leadership positions at Caring Brands International and Interim HealthCare Inc., providers of home healthcare, skilled nursing, therapy and hospice care. Also, she is a registered nurse. Ms. Gilmartin brings to the Board of Directors an in-depth knowledge of clinic practices and the regulatory and broad business environment of the healthcare industry. In addition, Ms. Gilmartin’s experience in overseeing the management of healthcare companies and performing clinical services as a nurse gives her the insight to advise the Board of Directors on a variety of business leadership and strategy matters, regulatory compliance, human resources and compensation related matters, which she applies to her service on the Compliance and Compensation Committees. Ms. Ham has extensive leadership experience in executive positions in healthcare technology companies, having served in executive leadership positions at WebPT, Healtheon, and Medicity, providers of healthcare technology solutions and tools to the healthcare provider industry. Ms. Ham brings to the Board of Directors an in-depth knowledge of the functioning of healthcare companies, and how technology solutions enhance communication, efficiencies and patient care. She also brings knowledge of the operations of clinic practices as well as the regulatory and broad business environment of the healthcare industry which she applies to her service on the Compliance Committee. Ms. Ham’s experience in the healthcare technology sector and with national healthcare insurance payers gives her the insight to advise the Board of Directors on a variety of business and strategy matters, including the use of ever-changing technological solutions to enhance business operations and patient care. Mr. Mayrsohn’s nomination to the Board of Directors relates to the Company’s 2024 acquisition of a 50% ownership interest in Metro, a management services organization that provides administrative and management elated services to 50 outpatient clinics in the Northeastern United States. Mr. Mayrsohn will bring to the Board his energy and experience in rapidly growing and operating outpatient physical therapy businesses. Since 2016 when Mr. Mayrsohn was promoted to CEO of Metro, he spearheaded an extraordinary growth of that business through the careful curation and development of a seasoned team, expansion into care delivery in the home, and a combination of acquisitions and denovo development. Mr. Mayrsohn will not be compensated for his role as a director, and he will continue to assist the Company through his leadership and expansion of MSO Metro, LLC throughout the Northeastern United States, along with helping the Company to further develop capabilities in home care delivery and pediatric interventions, among other initiatives. Ms. Motsenbocker brings to the Board of Directors a wealth of experience structuring and arranging syndicated loans and other capital-raising ventures during her more than 35 years of service at J.P. Morgan Chase, a global financial services company. She provides the Board of Directors with a thorough understanding of the capital markets. Ms. Motsenbocker’s experience in financial services also provides her with extensive finance and accounting knowledge which she applies to her service on the Audit and Compensation Committees. In addition, her service on the HR and Compensation Committee of Children’s Health System of Texas, one of the nation’s largest pediatric healthcare systems, provides her with experience with a healthcare company’s various human resources and compensation programs and strategies. Mr. Swanson brings to the Board of Directors his insight into the healthcare industry generally, and outpatient physical therapy business specifically as a result of his decades of leadership experience as a physical therapist and as chief executive at the Company’s largest clinic partnership, STAR Physical Therapy in Tennessee. Mr. Swanson has been a lifelong business leader and entrepreneur in healthcare and other ventures and, based on his strong passion to serve his community, he has helped to build not-for-profit facilities for housing, education and vocation for adults with special needs. Mr. Swanson uses this experience to advise the Board of Directors on industry and clinical related issues as well as compliance related matters which he applies to his service as Chair of the Compliance Committee and as a member of the Compensation Committee.

  13. Director Qualifications

    Mr. Trier has extensive experience in managing publicly-traded companies in services industries. He brings to the Board of Directors an in-depth knowledge of the regulatory and competitive environment of the healthcare industry, having served for many years as a director of St. Luke’s Health System, an operator of several hospitals in the greater Houston area, and the Baylor St. Luke’s Medical Center joint venture. Mr. Trier’s past service on the boards of directors of many other companies provides him with experience in corporate governance, audit, accounting and internal controls, and risk oversight, which he applies in his service on the Board of Directors. Also, Mr. Trier has two decades of experience with the Company, providing him with comprehensive knowledge of the Company and its structure, policies and management team. In addition, his previous experience as a certified public accountant and partner in a national accounting firm gives him insight and experience on accounting and financial matters, which he utilizes in his role as chair of the Audit Committee. The persons named on the proxy card will vote FOR all the nominees for director listed above unless you withhold authority to vote for one or more of the nominees. Under current regulations, a broker is prohibited from voting for directors without receiving instructions from you. As required by Nevada law, nominees will be elected by a plurality of the votes cast at the Annual Meeting. Abstentions and broker non-votes will not be treated as a vote for or against any particular nominee and will not affect the outcome of the election of directors. However, pursuant to the Company’s Corporate Governance Guidelines, in any uncontested election of directors, a nominee who receives more “withhold” votes than FOR votes shall tender his or her resignation to the Board. The Governance and Nominating Committee of the Board of Directors will promptly accept such resignation unless there are, in its opinion, highly unusual or mitigating circumstances, in which case the Governance and Nominating Committee may, by unanimous vote of its disinterested members, recommend to the Board to reject the tendered resignation, and the Board will promptly act on, without being bound to accept, that recommendation. All the nominees have consented to serve as directors. Our Board has no reason to believe that any of the nominees will be unable to act as a director. However, if any director is unable to serve, the Board may designate a substitute. If a substitute nominee is named, the persons named on the proxy card will vote FOR the election of the substitute nominee.

  14. Director Compensation Table

    Director Compensation Table The following table discloses the cash, equity awards and other compensation earned, paid or awarded, as the case may be, to each of the Company’s directors who are not Named Executive Officers during the fiscal year ended December 31, 2024.

  15. Director Compensation Table

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Option Awards | Non-equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | Kathleen A. Gilmartin | $85,000 | $150,090 | $— | $— | $— | $— | $235,090 | | Nancy J. Ham | $65,000 | $150,090 | $— | $— | $— | $— | $215,090 | | Dr. Bernard A. Harris, Jr. | $106,875 | $150,090 | $— | $— | $— | $— | $256,965 | | Edward L. Kuntz(3) | $77,500 | $— | $— | $— | $— | $— | $77,500 | | Anne B. Motsenbocker | $65,000 | $150,090 | $— | $— | $— | $— | $215,090 | | Regg E. Swanson | $75,000 | $150,090 | $— | $— | $— | $— | $225,090 | | Clayton K. Trier | $95,000 | $150,090 | $— | $— | $— | $— | $245,090 |

  16. Director Compensation Table

    | (1) Includes Retainer Fees, Chair Fees and Meeting Fees, all of which are described below. |

  17. Director Compensation Table

    | (2) A total of 1,424 shares of restricted common stock were granted to each director under the terms of the U.S. Physical Therapy 2003 Stock Incentive Plan, amended on March 1, 2022 (the “Amended 2003 Plan”). The restrictions lapsed as to 356 shares on each of July 1, 2024, October 1, 2024, January 1, 2025, and April 1, 2025. Amounts shown are the grant date fair value of the awards computed in accordance with FASB ASC Topic 718, which amounted to $105.4 per share. Assumptions used in the calculation of these amounts are included in “Note 17 — Equity Based Plans” of the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K filed with SEC on March 3, 2025. |

  18. Director Compensation Table

    | (3) Effective May 16, 2024, Mr. Edward L. Kuntz was no longer a member of the Board of Directors. |

  19. Compensation of Directors

    Compensation of Directors During 2024, each of our non-employee directors received a quarterly retainer fee (“Retainer Fee”) for serving as a member of our Board of Directors. The Retainer Fee was $16,250 per quarter. In addition, Lead Independent Director and Chair Fees were as follows: Lead Independent Director: $35,000; Chair of Audit Committee: $30,000; Chairs of Governance and Nominating Committee, Compensation Committee and Compliance Committee: $20,000. In addition, as noted above, in May 2024, each of the non-employee directors who were elected at the 2024 annual meeting received a grant of 1,424 shares of restricted stock under the terms of the Stock Incentive Plan. The restrictions on 356 shares of this grant lapsed on each of July 1, 2024, October 1, 2024, January 1, 2025 and April 1, 2025. The Board of Directors has not approved any further changes to director compensation thus far for 2025. Directors are also reimbursed for their out-of-pocket travel and related expenses incurred in attending Board and committee meetings.

  20. COMPENSATION DISCUSSION AND ANALYSIS

    | • | Compensate executive officers within market standards. We believe that competitive pay, together with our significant growth opportunities and employee-centered corporate culture, allow us to attract and retain top-quality executives. To ensure the competitiveness of our compensation levels within the comparable markets for executive talent, we review our executive compensation program in comparison to pertinent market data and specified peer companies. |

  21. Compensation Policies and Practices

    | • | Well-Balanced Compensation Program. The structure of our executive compensation program includes a balanced mix of cash and equity compensation with a strong emphasis on performance-based and at-risk compensation. |

  22. Compensation Policies and Practices

    | • | Capped Annual Incentive Award Opportunities. The value of our NEO incentive awards is determined by performance-based metrics that promote long-term stockholder value. |

  23. Compensation Policies and Practices

    | • | Multi-Year Vesting Periods. Our vesting periods enhance retention and alignment with stockholders’ interests, our long-term incentive awards are comprised of time-based and performance-based equity awards that vest over multiple years. |

  24. Compensation Policies and Practices

    | • | Competitive Compensation Practices. The competitiveness of our executive compensation program is monitored annually by comparison to a group of peer companies that are comparable based on industry, revenue, market capitalization and other factors. |

  25. Compensation Policies and Practices

    | • | Double-Trigger Change in Control Benefits. Restricted stock grants are subject to “double trigger” vesting in connection with a change in control (i.e., awards that require a qualifying termination of employment in addition to a change in control in order to become fully vested). |

  26. Compensation Policies and Practices

    | • | Limited Perquisites. We provide our NEOs with limited perquisites that are narrowly tailored to enhance our retention of talent over the long term. |

  27. Role of the Independent Consultant

    Role of the Independent Consultant The Compensation Committee has the authority to retain a consultant or obtain advice from external legal, accounting or other advisors to assist in the evaluation of executive compensation. The Company retained Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant during 2024. Meridian provides executive and director compensation consulting services, including advice regarding the design and implementation of compensation programs, market information, regulatory updates and analyses, and trends on executive compensation and benefits. Interactions between Meridian and management are generally limited to discussions on behalf of the Compensation Committee or as required to fulfill requests at the Committee’s direction. During 2024, Meridian did not provide any other services to the Company. Based on these factors, the Company’s evaluation of Meridian’s independence pursuant to the requirements approved and adopted by the SEC and NYSE, and information provided by Meridian, the Company determined that the work performed by Meridian did not raise any conflicts of interest.

  28. Benchmarking

    Benchmarking To ensure that our executive compensation program is competitive, the Compensation Committee engaged Meridian to review data regarding executive compensation at peer group companies. The Compensation Committee uses the comparative peer group data as a point of reference for compensation, but not as the determinative factor. The purpose of the comparison data is not to supplant the analyses of internal pay equity, wealth accumulation and the individual performance of the executive officers that the Compensation Committee considers when making compensation decisions. The Compensation Committee has full discretion in determining the nature and extent of the use of comparative compensation data, including to elect not to use the data at all. There are very few directly comparable, publicly-traded peer companies in our sector, so in determining our peer group, we selected companies with similar industry focus, business complexity, and size and operating characteristics. The most recent targeted peer group consisted of the following companies:

  29. Benchmarking

    | • | Surgery Partners, Inc. |

  30. Benchmarking

    | • | ATI Physical Therapy, Inc. |

  31. Benchmarking

    | • | Ensign Group |

  32. Benchmarking

    | • | Appolo Medical Holdings |

  33. Benchmarking

    | • | RadNet, Inc. |

  34. Benchmarking

    | • | Addus HomeCare Corporation |

  35. Benchmarking

    | • | Cross Country Healthcare, Inc. |

  36. Benchmarking

    | • | Select Medical Corporation |

  37. Benchmarking

    | • | National Healthcare Corp. |

  38. Benchmarking

    For each of these companies, the Compensation Committee reviewed base salary information, annual cash incentives, annual equity incentives, and other compensation. In addition, the Compensation Committee reviews and considers the pay for performance and benchmarking information provided by proxy advisory firms relating to the Company’s prior fiscal year. The Compensation Committee considered the relative portion of overall executive compensation consisting of equity compensation as compared to cash compensation, objective versus subjective measures, and how the Company compared to the other publicly-traded companies in areas such as shareholder return, revenue and Adjusted EBITDA growth. Adjusted EBITDA is defined as earnings before interest income, interest expense, taxes, depreciation and amortization, changes in valuation of put-right liability, and contingent earn-out consideration, equity-based awards compensation expense, asset impairment charges and other extraordinary or unusual items, and the related portion for non-controlling interests. Considering all these factors and comparable company information, the Compensation Committee determined that the 2024 compensation program for the NEOs appropriately motivates the Company’s executives to manage the Company effectively and in a manner that is in the best interests of the Company and its stockholders.

  39. Annual Cash Incentive Compensation

    Annual Cash Incentive Compensation Based on individual and Company performance, incentive compensation opportunities are available to a wide range of our employees. We believe that incentive compensation is effective in reinforcing both the overall values of our Company and our specific operating goals. Incentive compensation programs are designed to focus employees’ attention on our key performance goals, to identify the expected levels of performance and to reward individuals who meet or exceed our expectations. The aggregate amounts available for incentive awards are determined by our overall financial performance. The actual awards paid to individual recipients, other than to executive officers, are formulated by management, generally payable on an annual basis and reviewed by the committee prior to payment. The committee formulates and determines incentive awards for Named Executive Officers. See “Summary Compensation Table” below. For 2024, the Company’s Chief Executive Officer, Chief Financial Officer, President and Chief Operating Officer, Chief Operating Officer – West and Executive Vice President and General Counsel (the “2024 Executive Participants”) were eligible to receive cash bonus awards and/or shares of restricted common stock under the Company’s Objective Cash/RSA Bonus Plan and Discretionary Cash/RSA Bonus Plan. For a detailed description of these plans, see the Company’s Current Report on Form 8-K filed with the SEC on March 7, 2024. Under the Objective Cash/RSA Bonus Plan, the 2024 Executive Participants were eligible to earn a bonus award, payable in cash and/or restricted common stock at the discretion of the Compensation Committee, having a value of up to 75% of their respective base salaries, dependent upon the Company achieving Adjusted EBITDA in the range of $78,500,000 to $85,000,000 or more. In determining Adjusted EBITDA for purposes of the Objective Cash/RSA Bonus Plan, the Objective Cash/RSA Bonus Plan provides that such determination shall be made before interest income, interest expense, taxes, depreciation and amortization, changes in valuation of put-right liability, and contingent earn-out consideration, equity-based awards compensation expense, and other extraordinary or unusual items, and related portion for non-controlling interests. Based on the Adjusted EBITDA for the year ended 2024 of $81,768,000, Objective Cash/RSA Bonus awards equal to 34% of base salary was paid on March 5, 2025, to the 2024 Executive Participants. Under the Discretionary Cash/RSA Bonus Plan, the Executive Participants were eligible to receive cash bonus awards and/or shares of restricted stock as determined by the Compensation Committee, having a value of up to 50% of their respective base salaries. The criteria established for each of the 2024 Executive Participants considered by the Compensation Committee in determining the respective awards for 2024 (the “2024 Executive Subjective Criteria”) were as follows: Mr. Reading – Chief Executive Officer

  40. Annual Cash Incentive Compensation

    | 1. | Company and Board leadership; |

  41. Annual Cash Incentive Compensation

    | 2. | Growth of the Company to include de novo, tuck in and acquired physical therapy partnerships and industrial injury prevention services (“IIP”) opportunities; |

  42. Annual Cash Incentive Compensation

    | 3. | Foster compliance and cybersecurity culture that is beneficial to our Company and stockholders; |

  43. Annual Cash Incentive Compensation

    | 4. | Oversee and support COO – East’s role in driving key Company objectives while strengthening our succession opportunities in key areas; and |

  44. Annual Cash Incentive Compensation

    | 5. | Achievement of financial goals and objectives for 2024. |

  45. Annual Cash Incentive Compensation

    Mr. Hendrickson – Chief Financial Officer

  46. Annual Cash Incentive Compensation

    | 1. | Net rate improvements through strategic negotiations and revenue cycle management; |

  47. Annual Cash Incentive Compensation

    | 2. | Effective and accurate Board and shareholder communication, guidance, modeling, projections and planning; |

  48. Annual Cash Incentive Compensation

    | 3. | Maintain effective capital structure to allow continued growth; |

  49. Annual Cash Incentive Compensation

    | 4. | Improve efficiencies in Finance/Accounts Payable through technology improvements and staffing adjustments; |

  50. Annual Cash Incentive Compensation

    | 5. | Maintain effective cost discipline across the Company and within the corporate services area; and |

  51. Annual Cash Incentive Compensation

    | 6. | Successful audit implementation. |

  52. Annual Cash Incentive Compensation

    Mr. Reeve – Chief Operating Officer-West

  53. Annual Cash Incentive Compensation

    | 1. | Align cost and revenue growth for physical therapy; |

  54. Annual Cash Incentive Compensation

    | 2. | Create development plan for top partnerships to ensure organic as well as acquired growth; |

  55. Annual Cash Incentive Compensation

    | 3. | Work on IIP opportunities for sales and expansion and cost and cost efficiency; |

  56. Annual Cash Incentive Compensation

    | 4. | Leadership development, succession and effective relationship integration to allow for seamless transitions to accommodate growth and succession-related changes; |

  57. Annual Cash Incentive Compensation

    | 5. | Maintain effective compliance culture; and |

  58. Annual Cash Incentive Compensation

    | 6. | Effective acquisition-related due diligence and integration coordination and execution. |

  59. Annual Cash Incentive Compensation

    Mr. Williams – President and COO-East

  60. Annual Cash Incentive Compensation

    | 1. | Ensure cost and revenue alignment to achieve Company’s operating plan in physical therapy and IIP business segments; |

  61. Annual Cash Incentive Compensation

    | 2. | Execute Company-wide development plan for de novo as well as acquired partnerships ensuring integration and forward trajectory; |

  62. Annual Cash Incentive Compensation

    | 3. | Assist with improved operational execution across key corporate departments; |

  63. Annual Cash Incentive Compensation

    | 4. | Develop effective leadership and relationships across the entirety of the Company with partners as well as key corporate staff to facilitate operational excellence, growth, and opportunity realization; and |

  64. Annual Cash Incentive Compensation

    | 5. | Maintain effective compliance and cybersecurity culture. |

  65. Annual Cash Incentive Compensation

    Mr. Binstein – Executive Vice President, General Counsel and Secretary

  66. Annual Cash Incentive Compensation

    | 1. | Coordinate with CEO and other executives to facilitate growth through development; |

  67. Annual Cash Incentive Compensation

    | 2. | Assist in any compliance matters as needed to maintain an effective compliance culture and assist in any communications internally as needed with CCO and executive team; |

  68. Annual Cash Incentive Compensation

    | 3. | Maintain legal department in a manner which successfully supports our partners as well as our corporate and infrastructure needs; |

  69. Annual Cash Incentive Compensation

    | 4. | Assist CEO and other executives in evaluating new opportunities for growth whether acquired or de novo; and |

  70. Annual Cash Incentive Compensation

    | 5. | Coordinate and maintain corporate/board/shareholder meeting minutes and other records. |

  71. Annual Cash Incentive Compensation

    The Compensation Committee considered the performance of the 2024 Executive Participants against these criteria. Based on the review and scoring by the Compensation Committee of each of these criteria, the Compensation Committee awarded a bonus to each of the 2024 Executive Participants as a percentage of the maximum award value (i.e., maximum of 50% of base salary) as follows: Mr. Reading – 90% of the maximum award value; Mr. Reeve – 80% of the maximum award value; Mr. Williams – 80% of the maximum award value; Mr. Hendrickson – 80% of the maximum award value; and Mr. Binstein – 100% of the maximum award value. Accordingly, the Compensation Committee determined that the following awards would be paid in cash and as follows: Mr. Reading: $438,750; Mr. Williams: $260,000; Mr. Reeve: $250,000; Hendrickson: $200,000; and Mr. Binstein: $200,000. These cash bonuses were paid on March 5, 2025.

  72. Long-term Equity Incentive Awards

    Long-term Equity Incentive Awards The Objective Cash Bonus Plan, Discretionary Cash Bonus Plan, Objective Long-Term Incentive Plan, and Discretionary Long-Term Incentive Plan for 2024, collectively, are hereinafter referred to as the “2024 Executive Incentive Plan.” The Stock Incentive Plan is intended to align employee and outside director interests with stockholders’ interests, to provide incentives to our key employees by encouraging their ownership of our common stock and to aid us in attracting and retaining key employees, upon whose efforts our success and future growth depends. Equity grants are made at the discretion of the committee, which administers the Company’s equity compensation plans. The objective of such long-term equity-based awards, which generally vest over four years, is primarily to incentivize management and key employees for future performance rather than to reward specific past performance. Individual grant sizes are primarily determined based on the employee’s duties and level of responsibility and his or her ability to exert significant influence and make meaningful contributions to the overall future success of the Company and, to a lesser degree, organizational and individual performance. At the discretion of the committee, and based on the recommendation of management, equity grants may also be used as an incentive for candidates recruited to fill key positions and for existing employees who receive significant promotions with increased responsibilities. For the 2024 year, the 2024 Executive Participants were eligible to receive awards consisting of shares of restricted common stock under the Company’s Objective Long-Term Incentive Plan and Discretionary Long-Term Incentive Plan. For a detailed description of these plans, see the Company’s Current Report on Form 8-K filed with the SEC on March 7, 2024. Under the Objective Long-Term Incentive Plan, Mr. Reading was eligible to earn up to 12,500 shares of restricted common stock, Mr. Williams was eligible to earn up to 7,500 shares of restricted common stock, and Messrs. Reeve, Hendrickson and Binstein each were eligible to earn up to 5,000 shares of restricted common stock, dependent upon the Company achieving Adjusted EBITDA in the range of $78,500,000 to $83,500,000 or more. In determining Adjusted EBITDA for purposes of the Objective Cash/RSA Bonus Plan, the Objective Cash/RSA Bonus Plan provides that such determination shall be made before interest income, interest expense, taxes, depreciation, and amortization, changes in revaluation of put-right liability, equity-based awards compensation expense, and other extraordinary or unusual items, and related portion for non-controlling interests. Based on the Adjusted EBITDA of $81,768,000 for 2024, Mr. Reading was awarded 7,750 shares of restricted common stock under this Objective Long-Term Incentive Plan, Mr. Williams was awarded 4,650 shares of restricted common stock under this Objective Long-Term Incentive Plan and Messrs. Reeve, Hendrickson and Binstein each were awarded 3,100 shares of restricted common stock under this Objective Long-Term Incentive Plan. Under the Discretionary Long-Term Incentive Plan, Mr. Reading was eligible to earn up to 12,500 shares of restricted common stock, Mr. Willams was eligible to earn up to 7,500 shares of restricted common stock, and Messrs. Reeve, Hendrickson and Binstein each were eligible to earn up to 5,000 shares of restricted common stock, based upon a subjective determination of the committee. The committee determined for each 2024 Executive Participant such executive’s achievement of his respective Executive Subjective Criteria. Based on this review, the Compensation Committee determined that the achievement score for each of the 2024 Executive Participants was as follows: Mr. Reading – 100% of the maximum award value; Mr. Williams – 100% of the maximum award value; Mr. Reeve – 100% of the maximum award value; Mr. Hendrickson – 100% of the maximum award value; and Mr. Binstein – 100% of the maximum award value. For 2024, Mr. Reading was awarded 12,500 shares of restricted common stock under the Discretionary Long-Term Incentive Plan, Mr. Williams was awarded 7,500 shares of restricted common stock under the Discretionary Long-Term Incentive Plan and Messrs. Reeve, Hendrickson and Binstein each were awarded 5,000 shares of restricted common stock under the Discretionary Long-Term Incentive Plan. All shares of restricted common stock under the Equity Incentive Plans were granted on February 24, 2025, with restrictions on these shares lapsing evenly over 16 quarters starting on May 20, 2025.

  73. Post-Employment Benefits

    Post-Employment Benefits We have entered into employment agreements with our NEOs that provide for the payment of severance and other post-termination benefits depending on the nature of the termination, including severance payments in the event of a termination following a “change in control.” The committee believes that the terms and conditions of these agreements are reasonable and assist us in retaining the executive talent needed to achieve our objectives. In particular, the termination agreements, in the event of a “change in control,” help executives focus their attention on the performance of their duties in the best interests of the stockholders without being concerned about the consequences to them of a change in control and help promote continuity of senior management. Information regarding the specific payments that are applicable to each termination event, as well as the effect on unvested equity awards, is provided under the heading “Executive Compensation — Post Termination/Change-in-Control Benefits” below.

  74. Employment Agreements, Severance and Change in Control Benefits

    Employment Agreements, Severance and Change in Control Benefits The Company has entered into employment agreements with each of its executive officers.

  75. Employment Agreements, Severance and Change in Control Benefits

    | • | In 2019, the Company entered into an amended and restated employment agreement with Mr. Reading, which presently expires on December 31, 2025, and provides for automatic two-year renewals as of the expiration of the current term. |

  76. Employment Agreements, Severance and Change in Control Benefits

    | • | In 2018, the Company entered into an employment agreement with Mr. Reeve, which presently expires on February 28, 2026, and provides for an automatic two-year renewal as of the expiration of the current term. |

  77. Employment Agreements, Severance and Change in Control Benefits

    | • | In 2020, the Company entered into an employment agreement with Mr. Williams, which presently expires on July 1, 2025, and provides for an automatic two-year renewal as of the expiration of the current term. |

  78. Employment Agreements, Severance and Change in Control Benefits

    | • | In 2020, the Company entered into an employment agreement with Mr. Hendrickson, which presently expires on November 8, 2026, and provides for an automatic two-year renewal as of the expiration of the current term. |

  79. Employment Agreements, Severance and Change in Control Benefits

    | • | In 2022, the Company entered into an amended and restated employment agreement with Mr. Binstein, which expires on March 22, 2026, and provides for an automatic two-year renewal as of the expiration of the current term. |

  80. Employment Agreements, Severance and Change in Control Benefits

    Each of the employment agreements may be terminated by the Company prior to the expiration of their respective terms for cause or without cause, and due to the death or disability of the Executive Officer, as well as by the Executive Officer for good reason or based a disability. In the event of (A) an involuntary termination by the Company without “cause” (as defined in each of the Employment Agreements) or (B) a voluntary termination by the Executive Officer for “good reason” (as defined in each of the Employment Agreements), the affected Executive Officer is entitled to receive (1) salary continuation for two years, based on his base compensation then in effect, (2) the greater of: (a) the bonus paid or payable to the Executive Officer with respect to the last fiscal year completed prior to such termination, or (b) the average of the bonuses paid to the Executive Officer over the last three fiscal years of employment ending with the last fiscal year prior to such termination, (3) the Executive Officer’s accrued but unused vacation days, (4) an immediate acceleration of vesting for all outstanding equity incentive awards, and (5) medical insurance benefits currently in effect for the twenty-four months following such termination. If an Employment Agreement is terminated based on a qualified disability (as described in the Employment Agreements), the terminated Executive Officer is entitled to receive a lump-sum payment equal to two times such Executive Officer’s base compensation then in effect, as well as an immediate acceleration of vesting for all outstanding equity incentive awards. If an Employment Agreement is terminated based on the death of an Executive Officer, the Executive Officers’ estate (or his heirs) will receive a lump-sum payment equal to such Executive Officers base compensation then in effect, and all outstanding equity incentive awards held by such Executive Officer shall immediately vest. Finally, in the event of a termination of employment in connection with a “change in control” (as defined in the Employment Agreements), Messrs. Reading, Hendrickson, Reeve, Williams, and Binstein, as applicable, will be entitled to (A) a change of control benefit of $500,000 for Mr. Reading and $283,333 for Messrs. Hendrickson, Reeve, Williams and Binstein, and (B) the immediate acceleration of vesting for all outstanding equity incentive awards held by such individual. The employment agreement also provides for certain non-competition and non-solicitation covenants that extend up to two years after termination of employment. Messrs. Reading, Hendrickson, Reeve, Williams and Binstein’s employment agreements may each be terminated by the Company prior to the expiration of their term. See “Executive Compensation — Post Termination/Change-in-Control Benefits” below for a detailed discussion of the termination and change in control provisions contained in these agreements. We do not have any additional executive retention and severance arrangements or change in control agreements with our Named Executive Officers.

  81. Compensation of Named Executive Officers

    Compensation of Named Executive Officers Mr. Reading joined our Company in November 2003 as Chief Operating Officer, was promoted to President and Chief Executive Officer in 2004, and became Chairman of the Board of Directors and Chief Executive Officer in May 2024. Under his employment agreement with us (See “Employment and Consulting Agreements” above), Mr. Reading’s annual base salary is subject to adjustment by the Compensation Committee. For the last three years, his annual base salary was $927,000 (during 2022), $960,000 (during 2023), $975,000 (during 2024) and further increased to $1,004,250 effective as of January 1, 2025. During each of 2022, 2023 and 2024, Mr. Reading participated in an executive incentive plan specific to such year that was approved by the Compensation Committee and filed with the SEC on Form 8-K. In accordance with such executive incentive plans, Mr. Reading (i) was paid a cash bonus of $463,500 and was granted 10,000 shares of restricted stock for 2022, and (ii) was paid a cash bonus of $777,600 and was granted 16,200 shares of restricted stock for 2023. For 2024, Mr. Reading was paid a cash bonus of $770,250 on March 5, 2025, and was granted 20,250 shares of restricted stock on February 24, 2025. Mr. Reeve joined our Company in March 2018 as Chief Operating Officer–East. Under his employment agreement with us (see “Employment and Consulting Agreements” above), Mr. Reeve’s annual base salary is subject to adjustment by the Compensation Committee. Mr. Reeve’s annual base salary was $584,000 (during 2022), $605,000 (during 2023), $625,000 (during 2024) and was further increased to $643,750 effective as of January 1, 2025. During each of 2022, 2023 and 2024, Mr. Reeve participated in an executive incentive plan specific to such year that was approved by the Compensation Committee and filed with the SEC on Form 8-K. In accordance with such executive incentive plans, Mr. Reeve (i) was paid a cash bonus of $292,005 and was granted 5,000 shares of restricted stock for 2022, and (ii) was paid a cash bonus of $490,050 and was granted 8,100 shares of restricted stock for 2023. For 2024, Mr. Reeve was paid a cash bonus of $462,500 on March 5, 2025 and was granted 8,100 shares of restricted stock on February 24, 2025. Mr. Hendrickson joined our Company in November 2020 as Chief Financial Officer. Under his employment agreement with us (see “Employment and Consulting Agreements” above), Mr. Hendrickson’s annual base salary is subject to adjustment by the Compensation Committee. Mr. Hendrickson’s annual base salary was $463,000 during 2022, $480,000 during 2023, $500,000 during 2024 and was further increased to $515,000 effective as of January 1, 2025. During each of 2022, 2023 and 2024, Mr. Hendrickson participated in an executive incentive plan specific to such year that was approved by the Compensation Committee and filed with the SEC on Form 8-K. In accordance with such executive incentive plans, Mr. Hendrickson (i) was paid a cash bonus of $185,400 and was granted 3,750 shares of restricted stock for 2022 and (ii) was paid a cash bonus of $388,800 and was granted 8,100 shares of restricted stock for 2023. For 2024, Mr. Hendrickson was paid a cash bonus of $370,000 on March 5, 2025 and was granted 8,100 shares of restricted stock on February 24, 2025. Mr. Williams joined our Company on July 1, 2021 as Chief Operating Officer – East and was promoted to President effective as of May 21, 2024. Under his employment agreement with us (see “Employment and Consulting Agreements” above), Mr. Williams’ annual base salary is subject to adjustment by the Compensation Committee. Mr. Williams’ annual base salary was $467,010 during 2022, $540,000 during 2023, $650,000 during 2024 and was further increased to $669,500 effective as of January 1, 2025. During each of 2022, 2023 and 2024, Mr. Williams participated in an executive incentive plan specific to such year that was approved by the Compensation Committee and filed with the SEC on Form 8-K. In accordance with such executive incentive plans, Mr. Williams (i) was paid a cash bonus of $233,505 and was granted 5,000 shares of restricted stock for 2022, and (ii) was paid a cash bonus of $437,400 and was granted 8,100 shares of restricted stock for 2023. For 2024, Mr. Williams was paid a cash bonus of $481,000 on March 5, 2025 and was granted 12,150 shares of restricted stock on February 24, 2025. Mr. Binstein joined our Company in May 2011 as Vice President, General Counsel and Secretary, and was promoted to Executive Vice President in 2022. Mr. Binstein’s annual base salary was $340,000 during 2022, $375,000 during 2023, $400,000 during 2024 and was further increased to $425,000 effective as of January 1, 2025. During each of 2022, 2023 and 2024, Mr. Binstein participated in an executive incentive plan specific to such year that was approved by the Compensation Committee and filed with the SEC on Form 8-K. In accordance with such executive incentive plans, Mr. Binstein (i) was paid a cash bonus of $136,000 and was granted 3,750 shares of restricted stock for 2022, and (ii) was paid a cash bonus of $303,750 and was granted 8,100 shares of restricted stock for 2023. For 2024, Mr. Binstein was paid a cash bonus of $336,000 on March 5, 2025 and was granted 8,100 shares of restricted stock on February 24, 2025.

  82. Summary Compensation Table – Years Ended 2022 to 2024

    Summary Compensation Table – Years Ended 2022 to 2024 The following table sets forth the compensation paid or accrued for services rendered in all capacities on behalf of the Company during 2024, 2023, and 2022. to the Named Executive Officers employed during 2024.

  83. Summary Compensation Table – Years Ended 2022 to 2024

    | Name and Principal Position | Year | Salary ($) | Stock Awards(2) ($) | Option Awards ($) | Non- Equity Incentive Plan Compen- sation(3) ($) | Non- Qualified Deferred Compen- sation Earnings ($) | All Other Compen- sation(4) ($) | Total ($) | | Christopher J. Reading Chief Executive Officer | 2024 | 974,422 | 1,888,440 | — | 770,250 | — | 3,564 | 3,636,676 | | | 2023 | 958,731 | 1,632,482 | — | 777,600 | — | 3,564 | 3,372,377 | | | 2022 | 925,962 | 1,016,800 | — | 463,500 | — | 2,322 | 2,408,584 | | Carey P. Hendrickson Chief Financial Officer | 2024 | 499,231 | 755,376 | — | 370,000 | — | 3,564 | 1,628,171 | | | 2023 | 479,365 | 816,241 | — | 388,800 | — | 3,564 | 1,687,970 | | | 2022 | 462,981 | 381,300 | — | 185,400 | — | 3,564 | 1,033,245 | | Graham D. Reeve Chief Operating Officer - West | 2024 | 624,231 | 755,376 | — | 462,500 | — | 3,564 | 1,845,671 | | | 2023 | 604,193 | 816,241 | — | 490,050 | — | 2,322 | 1,912,806 | | | 2022 | 583,356 | 508,400 | — | 292,005 | — | 2,322 | 1,386,083 | | Eric J. Williams President, Chief Operating Officer - East | 2024 | 645,769 | 1,133,064 | — | 481,000 | — | 3,564 | 2,263,397 | | | 2023 | 537,193 | 816,241 | — | 437,400 | — | 2,322 | 1,793,156 | | | 2022 | 466,356 | 508,400 | — | 233,505 | — | 2,322 | 1,210,583 | | Richard S. Binstein(1) Executive Vice President, General Counsel and Secretary | 2024 | 399,039 | 755,376 | — | 336,000 | — | 3,564 | 1,493,979 | | | 2023 | 373,654 | 816,241 | — | 303,750 | — | 3,564 | 1,497,209 | | | 2022 | 339,085 | 381,300 | — | 136,000 | — | 3,564 | 859,949 |

  84. Summary Compensation Table – Years Ended 2022 to 2024

    | (1) Mr. Binstein was appointed executive officer on March 17, 2022. |

  85. Summary Compensation Table – Years Ended 2022 to 2024

    | (2) For 2024, stock awards were granted in accordance with the 2024 Executive Incentive Plan as shares of restricted stock under the terms of the Amended 2003 Plan as follows: Mr. Reading was awarded 7,750 shares of restricted common stock pursuant to Objective Long-Term Incentive Plan, Mr. Williams was awarded 4,650 shares and Messrs. Reeve, Hendrickson and Binstein each were awarded 3,100 shares of restricted common stock pursuant to the Objective Long-Term Incentive Plan. Mr. Reading was awarded 12,500 shares (pursuant to the Discretionary Long-Term Incentive Plan). Mr. William was awarded 7,500 shares and Messrs. Reeve, Hendrickson, Binstein were each awarded 5,000 shares (pursuant to the Discretionary Long-Term Incentive Plan). |

  86. Summary Compensation Table – Years Ended 2022 to 2024

    For 2023, stock awards were granted in accordance with the 2023 Executive Incentive Plan as shares of restricted stock under the terms of Amended 2003 Plan as follows: Mr. Reading was awarded 6,200 shares of restricted common stock pursuant to Objective Long-Term Incentive Plan, and Messrs. Williams, Reeve, Hendrickson and Binstein each were awarded 3,100 shares of restricted common stock pursuant to the Objective Long-Term Incentive Plan. Mr. Reading was awarded 10,000 shares (pursuant to the Discretionary Long-Term Incentive Plan). Messrs. Reeve, Williams, Hendrickson, Binstein were each awarded 5,000 shares (pursuant to the Discretionary Long-Term Incentive Plan). For 2022, stock awards were granted in accordance with the 2022 Executive Incentive Plan as shares of restricted stock under the terms of the Amended 2003 Plan as follows: Mr. Reading was awarded 10,000 shares (10,000 pursuant to the Discretionary Long-Term Incentive Plan). Messrs. Reeve and Williams were each awarded 5,000 shares (pursuant to the Discretionary Long-Term Incentive Plan). Messrs. Hendrickson and Binstein were each awarded 3,750 shares (pursuant to the Discretionary Long-Term Incentive Plan). For 2022, there were no shares granted under the Objective Long-Term Incentive Plan.

  87. Summary Compensation Table – Years Ended 2022 to 2024

    | (3) For 2024, the amounts represent the cash bonuses earned under the 2024 Executive Incentive Plan and paid in March 2025. For 2023, the amounts represent the cash bonuses earned under the 2023 Executive Incentive Plan and paid in March 2024. For 2022, the amounts represent the cash bonuses earned under the 2022 Executive Incentive Plan and paid in March 2023. See “Compensation Discussion and Analysis — Annual Cash Incentive Compensation” herein for further details. |

  88. Summary Compensation Table – Years Ended 2022 to 2024

    | (4) Represents the value of life insurance premiums for life insurance coverage provided to the Named Executive Officers. |

  89. Grants of Plan-Based Awards

    Grants of Plan-Based Awards

  90. Grants of Plan-Based Awards

    | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) : | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(2) : | | | Grant Date Fair Value of Stock Awards(3) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | Christopher J. Reading | 2/24/2025 | $146,250 | $789,750 | $1,218,750 | 3,750 | 20,250 | 25,000 | $2,137,500 | | Carey P. Hendrickson | 2/24/2025 | $75,000 | $405,000 | $625,000 | 1,500 | 8,100 | 10,000 | $855,000 | | Graham D. Reeve | 2/24/2025 | $93,750 | $506,250 | $781,250 | 1,500 | 8,100 | 10,000 | $855,000 | | Eric J. Williams | 2/24/2025 | $97,500 | $526,500 | $812,500 | 2,250 | 12,150 | 15,000 | $1,282,500 | | Richard S. Binstein | 2/24/2025 | $60,000 | $324,000 | $500,000 | 1,500 | 8,100 | 10,000 | $855,000 |

  91. Grants of Plan-Based Awards

    | (1) Under the non-equity incentive plan, Messrs. Reading, Reeve, Williams, Hendrickson and Binstein were entitled to earn 75% of their respective annual base salary dependent on the Company achieving Adjusted EBITDA in the range of $78,500,000 to $83,500,000 or more (“Objective Plan”). Messrs. Reading, Reeve, Williams, Hendrickson, and Binstein were also entitled to earn up to 50% of their respective annual base salary at the discretion of the Compensation Committee based on the achievement of pre-established subjective criteria (“Discretionary Plan”). The threshold, target and maximum amounts represents 15% (15% under the Objective Plan and 0% Discretionary Plan), 81% (31% Objective Plan and 50% Discretionary Plan) and 125% (75% Objective Plan and 50% Discretionary Plan) respectively, of each executive’s base salary. (For a more detailed discussion, see the above “Compensation Discussion and Analysis — Annual Cash Incentive Compensation” section.) Also, see the Summary Compensation Table above for actual amounts earned for 2024. The cash earned was paid on March 5, 2025, and the shares of restricted stock were granted on February 24, 2025. |

  92. Grants of Plan-Based Awards

    | (2) Under the equity incentive plans, each of the above were entitled to their respective number of shares detailed above based on achieving Adjusted EBITDA in the range of $78,500,000 to $83,500,000 or more (“Objective Plan”) and their respective number of shares at the discretion of the Compensation Committee based on the achievement of pre-established subjective criteria (“Discretionary Plan”). The threshold represents 30% of the eligible shares under the Objective Plan, the target represents 62% of the eligible shares under the Objective Plan and 100% of the eligible shares under the Discretionary Plan and the maximum represents 100% of the eligible shares under each of the Objective and Discretionary Plan. |

  93. Grants of Plan-Based Awards

    | (3) Amounts shown are the grant date fair value of the awards computed in accordance with FASB ASC Topic 718 which amounted to $85.50 per share. See “Note 17 — Equity Based Plans” of the Notes to the Consolidated Financial Statements in Item 8 of the Form 10-K, filed on March 3, 2025, for a description of the valuations and a description of the equity plans. |

  94. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table See “Employment Agreements, Severance and Change of Control Benefits” above and “Post-Termination/Change-in-Control Benefits” below for the material terms of our employment agreements with our Named Executive Officers. See “Compensation Discussion and Analysis” above for an explanation of the amount of salary and bonus in proportion to total compensation. See the footnotes to the Summary Compensation Table above and Grants of Plan-Based Awards table paid to the Named Executive Officers above for narrative disclosure with respect to those tables.

  95. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table shows outstanding awards of shares of restricted common stock that have not vested as of December 31, 2024, for each Named Executive Officer. The table does not include the grants of restricted stock made in 2025. There are no outstanding stock option awards for the Named Executive Officers as of December 31, 2024.

  96. Outstanding Equity Awards at Fiscal Year-End

    | | Stock Awards | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Christopher J. Reading | 25,739(2) | $2,283,307 | | Carey P. Hendrickson | 11,046(3) | $979,891 | | Graham D. Reeve | 12,884(4) | $1,142,940 | | Eric J. Williams | 11,806(5) | $1,047,310 | | Richard S. Binstein | 10,417(6) | $924,092 |

  97. Outstanding Equity Awards at Fiscal Year-End

    | (1) Calculated based on the closing market price of our common stock on December 31, 2024 of $88.71 per share. |

  98. Outstanding Equity Awards at Fiscal Year-End

    | (2) The restrictions on these shares of common stock granted as restricted stock lapsed or will lapse as follows: |

  99. Outstanding Equity Awards at Fiscal Year-End

    | 1/1/2025 | 3,587 | 3/6/2026 | 2,887 | 3/6/2027 | 1,637 | 3/6/2028 | 1,020 | | 5/20/2025 | 2,887 | 5/20/2026 | 1,637 | 5/20/2027 | 1,012 | | | | 8/20/2025 | 2,887 | 8/20/2026 | 1,637 | 8/20/2027 | 1,012 | | | | 11/20/2025 | 2,887 | 11/20/2026 | 1,637 | 11/20/2027 | 1,012 | | |

  100. Outstanding Equity Awards at Fiscal Year-End

    | (3) The restrictions on these shares of common stock granted as restricted stock lapsed or will lapse as follows: |

  101. Outstanding Equity Awards at Fiscal Year-End

    | 1/1/2025 | 1,208 | 3/6/2026 | 1,220 | 3/6/2027 | 746 | 3/6/2028 | 510 | | 5/20/2025 | 1,208 | 5/20/2026 | 740 | 5/20/2027 | 506 | | | | 8/20/2025 | 1,208 | 8/20/2026 | 740 | 8/20/2027 | 506 | | | | 11/20/2025 | 1,208 | 11/20/2026 | 740 | 11/20/2027 | 506 | | |

  102. Outstanding Equity Awards at Fiscal Year-End

    | (4) The restrictions on these shares of common stock granted as restricted stock lapsed or will lapse as follows: |

  103. Outstanding Equity Awards at Fiscal Year-End

    | 1/1/2025 | 1,792 | 3/6/2026 | 1,458 | 3/6/2027 | 826 | 3/6/2028 | 510 | | 5/20/2025 | 1,442 | 5/20/2026 | 818 | 5/20/2027 | 506 | | | | 8/20/2025 | 1,442 | 8/20/2026 | 818 | 8/20/2027 | 506 | | | | 11/20/2025 | 1,442 | 11/20/2026 | 818 | 11/20/2027 | 506 | | |

  104. Outstanding Equity Awards at Fiscal Year-End

    | (5) The restrictions on these shares of common stock granted as restricted stock lapsed or will lapse as follows: |

  105. Outstanding Equity Awards at Fiscal Year-End

    | 1/1/2025 | 1,408 | 3/6/2026 | 1,138 | 3/6/2027 | 826 | 3/6/2028 | 510 | | 5/20/2025 | 1,408 | 5/20/2026 | 818 | 5/20/2027 | 506 | | | | 8/20/2025 | 1,414 | 8/20/2026 | 818 | 8/20/2027 | 506 | | | | 11/20/2025 | 1,130 | 11/20/2026 | 818 | 11/20/2027 | 506 | | |

  106. Outstanding Equity Awards at Fiscal Year-End

    | (6) The restrictions on these shares of common stock granted as restricted stock lapsed or will lapse as follows: |

  107. Outstanding Equity Awards at Fiscal Year-End

    | 1/1/2025 | 1,240 | 3/6/2026 | 1,048 | 3/6/2027 | 746 | 3/6/2028 | 510 | | 5/20/2025 | 1,045 | 5/20/2026 | 740 | 5/20/2027 | 506 | | | | 8/20/2025 | 1,045 | 8/20/2026 | 740 | 8/20/2027 | 506 | | | | 11/20/2025 | 1,045 | 11/20/2026 | 740 | 11/20/2027 | 506 | | |

  108. Stock Vested Table

    Stock Vested Table The following table shows the number of shares of our common stock acquired by each of our NEOs during 2024 upon the “vesting” of restricted stock (“vesting” refers to lapse of restrictions). As of December 31, 2024, there were no outstanding stock options for each of our NEOs.

  109. Stock Vested Table

    | | Stock Awards | | | Name | Number of shares acquired on vesting (#) | Value realized on Vesting(1) | | Christopher J. Reading | 14,246 | $1,352,089 | | Carey P. Hendrickson | 5,254 | $499,386 | | Graham D. Reeve | 7,106 | $674,451 | | Eric J. Williams | 5,126 | $487,334 | | Richard S. Binstein | 4,685 | $445,071 |

  110. Stock Vested Table

    | (1) The value realized on vesting is computed by multiplying the number of shares by stock by the market value of the underlying shares on the vesting date. The closing price of the stock is used as the market value. |

  111. Pay Ratio

    Pay Ratio The Company analyzed the annual total compensation for all of its employees and the employees of its consolidated subsidiaries (including part-time – “on call”– and full-time employees as per SEC rules), other than our CEO, in order to identify the employee with the median annual total compensation. In making this determination, the Company examined only payroll records of individuals who were employed by the Company or one of its consolidated subsidiaries on December 31, 2024. No cost-of-living adjustments were made to any such employee’s compensation, but the Company did annualize the compensation of individuals who commenced employment after January 1, 2024. After the median compensated employee was identified, that employee’s annual total compensation for fiscal year 2024 was determined in the same manner as if such individual was a named executive officer for 2024 whose compensation was required to be determined in accordance with SEC rules and reported in our “Summary Compensation Table” on page 30. Based on the foregoing, the annual total compensation of such employee, as determined in accordance with SEC rules, was $44,829. As provided in our Summary Compensation Table, the annual total compensation for our CEO for the 2024 fiscal year was $3,636,676, which was 81.1 to 1.0 times the annual total compensation of our median compensated employee for the 2024 fiscal year. The above figures were reported in accordance with SEC rules. However, the Company believes that a more accurate disclosure would exclude “on-call” employees who have no set schedule and work only on an as-needed basis, which may be a few times a year. If these on-call employees were excluded from the determination of our median compensated employee for the 2024 fiscal year, the annual total compensation would be $52,850 resulting in a ratio of the annual total compensation of our CEO to such employee of 68.8 to 1.0. Because a significant amount of our CEO’s compensation for 2024 was in the form of equity compensation, and only a very small number of our employees receive equity compensation, we thought it would be helpful to our stockholders to see how the above ratios are impacted by excluding equity compensation. Excluding equity compensation, the annual total compensation of our median compensated employee was $44,829 and the annual total compensation for our Chief Executive Officer would be $1,748,236, resulting in a ratio of 39.0 to 1.0 if on-call employees are included. If on-call employees are excluded, the ratio is 33.1 to 1.0.

  112. Pay Versus Performance

    Pay Versus Performance The Company’s compensation objectives and philosophy, which are discussed above, are designed to reward the contributions of its NEOs to the Company’s financial performance and provide compensation which is sufficient to attract and retain individuals who are motivated to contribute to the Company’s financial performance. To achieve these goals, the Company has implemented incentive plans which tie a significant portion of each NEOs compensation to pre-determined financial goals. For the years ended December 31, 2024, and December 31, 2023, the most important financial performance measure used by the Company to link executive compensation actually paid to the executive officers was Adjusted EBITDA which is described in the accompanying footnotes below. For the years ended December 31, 2022, 2021 and 2020, the most important financial performance measure used by the Company to link executive compensation actually paid to the executive officers was Operating Results, which is described in the accompanying footnotes below. The following table summarizes the executive compensation earned by the Company’s Principal Executive Officer (“PEO”), and other Named Executive Officers, the executive compensation actually paid to the Company’s PEO and other NEOs, and certain financial performance measures of the Company for the years ended December 31, 2024, 2023, 2022, 2021, and 2020.

  113. Pay Versus Performance

    | Year(1) | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(5) ($) | Average Summary Compensation Table Total for non-PEO NEOs(1) ($) | Average Compensation Actually Paid to non-PEO NEOs(5) ($) | Value of Initial Fixed $100 Investment Based on | | Net Income(2) ($) | Operating Results(3) ($) | Adjusted EBITDA(6) ($) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return(4) ($) | | | | | 2024 | $3,636,676 | $3,512,156 | $1,807,805 | $1,750,070 | 74 | 121 | $45,600,000 | $36,912,000 | $81,768,000 | | 2023 | $3,372,377 | $3,822,626 | $1,722,785 | $1,865,290 | 77 | 120 | $37,220,000 | $36,265,000 | $77,717,000 | | 2022 | $2,408,584 | $1,859,559 | $1,122,465 | $920,090 | 67 | 117 | $43,407,000 | $35,034,000 | $73,661,000 | | 2021 | $4,143,576 | $3,275,545 | $1,454,841 | $1,110,753 | 79 | 121 | $57,924,000 | $40,842,000 | $73,780,000 | | 2020 | $2,961,147 | $2,446,657 | $1,056,375 | $829,949 | 100 | 100 | $52,491,000 | $38,435,000 | $70,017,000 |

  114. Pay Versus Performance

    | 1) | The PEO is Christopher J. Reading for each of the years presented. The non-PEO NEOs for are Carey P. Hendrickson, Eric J. Williams, Graham D. Reeve, and Richard Binstein for the years 2024, 2023 and 2022, Carey P. Hendrickson, Eric J. Williams, Glenn D. McDowell, and Graham D. Reeve for 2021 and Carey P. Hendrickson, Lawrance W. MacAfee, Glenn D. McDowell, and Graham D. Reeve for 2020. |

  115. Pay Versus Performance

    | 2) | Net income includes earnings attributable to non-controlling interests. |

  116. Pay Versus Performance

    | 3) | Operating Results, a non-GAAP measure, equals net income attributable to Company stockholders less, changes in revaluation of a put-right liability, any relief funds, clinic closure costs, changes in fair value of contingent earn-out consideration, business acquisition related costs, non-cash impairment charges and any allocations to non-controlling interests, all net of taxes. Operating Results per share also excludes the impact of the revaluation of redeemable non-controlling interest and the associated tax impact. |

  117. Pay Versus Performance

    | 4) | On August 14, 2012, our common stock began trading on the NYSE. The Total Shareholder Return assumes that $100 was invested in our common stock and the common stock on each of the companies listed on The NYSE Healthcare Index (the Company’s Peer Group), on December 31, 2020 and that any dividends were reinvested. |

  118. Pay Versus Performance

    | 5) | For a computation of compensation actually paid to the PEO and average compensation actually paid to non-PEO NEOs, please refer to the subsequent table. |

  119. Pay Versus Performance

    | 6) | Adjusted EBITDA, a non-GAAP measure, is defined as net income attributable to the Company stockholders before interest income, interest expense, taxes, depreciation, amortization, change in fair value of contingent earn-out consideration, payments received from the federal government under the Corona virus Aid, Relief and Economic Security Act, changes in revaluation of put-right liability, equity-based awards compensation expense, clinic closure costs, non-cash impairment charges, business acquisition related costs and other income and related portions for non-controlling interests. |

  120. Pay Versus Performance

    The following table outlines the adjustments made to the compensation earned by the PEO and other NEOs, as presented in the Summary Compensation Table on page 30, to derive the compensation actually paid to the PEO and other NEOs.

  121. Pay Versus Performance

    | | Adjustments | | | | | | | | Year | Summary Compensation Table Total ($) | Less: Reported Value of Stock Awards ($)(1) | Plus: Year End Fair Value of Restricted Stock Awards Granted During the Year ($)(2)(3) | Plus: Change in Fair Value of Outstanding and Unvested Restricted Stock Awards ($)(2)(3) | Plus: Changes in Fair Value of Restricted Stock in Prior Years that Vested During the Year ($)(2)(3) | Dividends paid on Unvested Restricted Stock Awards During the Fiscal Year ($)(4) | Compensation Actually Paid ($) | | PEO | | | | | | | | | 2024 | $3,636,676 | $1,888,440 | $1,796,378 | $(114,023) | $25,217 | $56,348 | $3,512,156 | | 2023 | $3,372,377 | $1,632,482 | $1,508,868 | $288,036 | $235,956 | $49,871 | $3,822,626 | | 2022 | $2,408,584 | $1,016,800 | $810,300 | $(411,395) | $22,404 | $46,466 | $1,859,559 | | 2021 | $4,143,576 | $2,120,100 | $1,911,000 | $(613,844) | $(81,371) | $36,284 | $3,275,545 | | 2020 | $2,961,147 | $1,533,056 | $1,346,800 | $180,251 | $(518,261) | $9,776 | $2,446,657 | | Non-PEO NEOs | | | | | | | | | 2024 | $1,807,805 | $849,798 | $808,370 | $(51,114) | $10,309 | $24,498 | $1,750,070 | | 2023 | $1,722,785 | $816,241 | $754,434 | $108,759 | $76,874 | $18,679 | $1,865,290 | | 2022 | $1,122,465 | $444,850 | $354,506 | $(132,671) | $5,768 | $14,872 | $920,090 | | 2021 | $1,454,841 | $706,539 | $537,469 | $(157,849) | $(26,493) | $9,325 | $1,110,753 | | 2020 | $1,056,375 | $484,122 | $447,571 | $63,051 | $(256,345) | $3,419 | $829,949 |

  122. Pay Versus Performance

    | (1) Represents the grant date fair value of restricted stock awards earned and as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year. These shares were issued in March of the succeeding year. |

  123. Pay Versus Performance

    | (2) Adjustments are equal to (i) the year-end fair value of restricted stock awards granted during the applicable year that are earned but not issued and therefore deemed outstanding and unvested as of the end of the year, (ii) the amount of the change in fair value as of the end of the applicable year (from the end of the prior fiscal year) of any restricted stock awards granted in prior years that are outstanding and unvested as of the end of the applicable year, and (iii) for restricted stock awards granted in prior years that vest in the applicable year, an amount equal to the change in fair value as of the vesting date (from the end of the prior fiscal year). |

  124. Pay Versus Performance

    | (3) Restricted stock awards are valued using the market price of our stock. The closing market price of our stock was $88.71, $93.14, $81.03, $95.55, and $120.25 as of December 31, 2024, 2023, 2022, 2021, and 2020, respectively. The closing market price of our stock when the PEO and other NEOs’ restricted stock awards vested was $93.14 on January 1, 2024, $112.15 on April 1, 2024, $91.31 on July 1, 2024, $82.99 on October 1, 2024, $81.03 on January 1, 2023, $97.91 on April 1, 2023, $121.39 on July 1, 2023, $91.73 on October 1, 2023, $95.55 on January 1, 2022, $103.76 on April 1, 2022, $112.30 on July 1, 2022, $76.02 on October 1, 2022, $120.25 on January 1, 2021, $110.21 on April 1, 2021, $119.34 on July 1, 2021, $111.55 on October 1, 2021, $114.35 on January 1, 2020, $59.00 on April 1, 2020, $81.02 on July 1, 2020 and $86.88 on October 1, 2020. |

  125. Pay Versus Performance

    | (4) Includes dividends paid and declared on outstanding and unvested shares as of December 31, 2024, 2023, 2022, 2021 and 2020. Dividends declared per common share were $1.76, $1.72, $1.64, $1.46, and $0.32 for the fiscal years ended December 31, 2023, 2022, 2021 and 2020, respectively. |

  126. Pay Versus Performance

    Relationship between Pay and TSR The graph below illustrates the relationship between compensation actually paid to the PEO and other NEOs, the cumulative total stockholder return (“TSR”) on $100 invested in the Company at the close of the market on December 31, 2020, with dividends being reinvested on the date paid through December 31, 2024, and the cumulative TSR of the NYSE Health Care Index. The NYSE Health Care Index TSR is calculated in a similar manner as the Company’s TSR. Relationship between Pay and Net Income The graph below illustrates the relationship between compensation actually paid to the PEO and other NEOs and the Company’s net income. Relationship between Pay and Operating Results The graph below illustrates the relationship between compensation actually paid to the PEO and other NEOs and the Company’s After-tax Operating Results. Relationship between Pay and Adjusted EBITDA The graph below illustrates the relationship between compensation actually paid to the PEO and other NEOs and the Company’s Adjusted EBITDA.

  127. Christopher J. Reading Chairman of the Board of Directors and Chief Executive Officer

    | Executive Benefits and Payments Upon Termination(1) | Voluntary Termination or For Cause | Without Cause | Executive Resigns For Good Reason | In Conjunction with a Change In Control | | Compensation | | | | | | Severance(2) | $— | $1,950,000 | $1,950,000 | $1,950,000 | | Annual Cash Incentive(3) | — | 770,250 | 770,250 | 770,250 | | Change of Control Benefit(4) | — | — | — | 500,000 | | Restricted Stock (Unvested and (Accelerated)(5) | — | 2,283,307 | 2,283,307 | 2,283,307 | | Benefits and Perquisites | | | | | | Health and Dental Coverage(6) | — | 53,454 | 53,454 | 53,454 | | Total | $— | $5,057,011 | $5,057,011 | $5,557,011 |

  128. Carey P. Hendrickson Chief Financial Officer

    | Executive Benefits and Payments Upon Termination(1) | Voluntary Termination or For Cause | Without Cause | Executive Resigns For Good Reason | In Conjunction with a Change In Control | | Compensation | | | | | | Severance(2) | $— | $1,000,000 | $1,000,000 | $1,000,000 | | Annual Cash Incentive(3) | — | 370,000 | 370,000 | 370,000 | | Change of Control Benefit(4) | — | — | — | 283,333 | | Restricted Stock (Unvested and (Accelerated)(5) | — | 979,891 | 979,891 | 979,891 | | Benefits and Perquisites | | | | | | Health and Dental Coverage(6) | — | 36,783 | 36,783 | 36,783 | | Total | $— | $2,386,674 | $2,386,674 | $2,670,007 |

  129. Graham D. Reeve Chief Operating Officer – West

    | Executive Benefits and Payments Upon Termination(1) | Voluntary Termination or For Cause | Without Cause | Executive Resigns For Good Reason | In Conjunction with a Change In Control | | Compensation | | | | | | Severance(2) | $— | $1,250,000 | $1,250,000 | $1,250,000 | | Annual Cash Incentive(3) | — | 462,500 | 462,500 | 462,500 | | Change of Control Benefit(4) | — | — | — | 283,333 | | Restricted Stock (Unvested and (Accelerated)(5) | — | 1,142,940 | 1,142,940 | 1,142,940 | | Benefits and Perquisites | | | | | | Health and Dental Coverage(6) | — | 34,959 | 34,959 | 34,959 | | Total | $— | $2,890,399 | $2,890,399 | $3,173,732 |

  130. Eric J. Williams President and Chief Operating Officer - East

    | Executive Benefits and Payments Upon Termination(1) | Voluntary Termination or For Cause | Without Cause | Executive Resigns For Good Reason | In Conjunction with a Change In Control | | Compensation | | | | | | Severance(2) | $— | $1,300,000 | $1,300,000 | $1,300,000 | | Annual Cash Incentive(3) | — | 481,000 | 481,000 | 481,000 | | Change of Control Benefit(4) | — | — | — | 283,333 | | Restricted Stock (Unvested and (Accelerated)(5) | — | 1,047,310 | 1,047,310 | 1,047,310 | | Benefits and Perquisites | | | | | | Health and Dental Coverage(6) | — | 53,454 | 53,454 | 53,454 | | Total | $— | $2,881,764 | $2,881,764 | $3,165,097 |

  131. Richard S. Binstein Executive Vice President, General Counsel and Secretary

    | Executive Benefits and Payments Upon Termination(1) | Voluntary Termination or For Cause | Without Cause | Executive Resigns For Good Reason | In Conjunction with a Change In Control | | Compensation | | | | | | Severance(2) | $— | $800,000 | $800,000 | $800,000 | | Annual Cash Incentive(3) | — | 336,000 | 336,000 | 336,000 | | Change of Control Benefit(4) | — | — | — | 283,333 | | Restricted Stock (Unvested and (Accelerated)(5) | — | 924,092 | 924,092 | 924,092 | | Benefits and Perquisites | | | | | | Health and Dental Coverage(6) | — | — | — | — | | | — | 37,234 | 37,234 | 37,234 | | Total | $— | $2,097,326 | $2,097,326 | $2,380,659 |