As filed with the Securities and Exchange Commission on
September 24, 1998
Registration No. 333-____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
U.S. Physical Therapy, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
76-0364866
(I.R.S. employer identification no.)
3040 Post Oak, Blvd., Suite 222, Houston, Texas 77056
(Address of principal executive offices) (Zip code)
U.S. Physical Therapy, Inc.
1992 Stock Option Plan, as amended
(Full title of the plan)
J. Michael Mullin, Chief Financial Officer
U.S. Physical Therapy, Inc.
3040 Post Oak Blvd., Suite 222
Houston, Texas 77056
(Name and address of agent for service)
(713) 297-7000
(Telephone number, including area code, of agent for service)
<PAGE>
Copy to:
George P. Barsness, Esq.
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-5600
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered share price fee
Common 350,000 $ 9.9375(1) $ 3,478,125(1) $ 1,026.05
Stock, par
value $.01
Per share
(1) Estimated pursuant to Rule 457(h) under the Securities
Act of 1933, as amended, as of September 21, 1998 solely for the
purpose of calculating the registration fee.
This registration statement constitutes a combined prospectus
as such term is used in Rule 429 under the Securities Act of 1933,
as amended. The earlier filed registration statements to which
this registration statement relates are Registration Nos. 33-63446,
33-93040 and 333-30071.
Exhibit Index is on page 9
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
will be sent or given to employees as specified by Rule 428(b)(1).
In accordance with the instructions to Part I of Form S-8, such
documents will not be filed with the Commission either as part of
this registration statement or as prospectuses or prospectus
supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
U.S. Physical Therapy, Inc. (the "Registrant") hereby
incorporates by reference into this registration statement the
following documents:
(a) The Registrant's Annual Report on Form 10-KSB for the
year ended December 31, 1997;
(b) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998;
(c) The Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998;
(d) All reports filed with the Securities and Exchange
Commission pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 since December 31, 1997;
(e) The description of the Registrant's common stock
contained in the Registrant's Form 8-A filed with the Securities
and Exchange Commission on May 7, 1992; and
(f) All documents filed by the Registrant subsequent to the
date hereof pursuant to Sections 13(a), 13(c), 14, and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-
effective amendment which indicates that all securities offered
have been sold or which deregisters all securities remaining
unsold.
3<PAGE>
Item 4. Description of Securities.
A description of the Registrant's common stock, par value
$0.01 per share, is incorporated by reference under Item 3.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
(a) Article EIGHT of the Registrant's Articles of
Incorporation is set forth as Exhibit 28.1 to the Registrant's Form
S-8 Registration Statement (Registration No. 33-63446) filed with
the Securities and Exchange Commission on May 27, 1993 and is
incorporated herein by reference.
(b) Sections 78.751 and 78.752 of the General Corporation
Law of the State of Nevada, entitled "Indemnification of officers,
directors, employees and agents; advancement of expenses" and
"Insurance and other financial arrangements against liability of
directors, officers, employees and agents", respectively, are set
forth as Exhibit 28.2 to the Registrant's Form S-8 Registration
Statement (Registration No. 33-63446) filed with the Securities and
Exchange Commission on May 27, 1993 and are incorporated herein by
reference.
(c) The Registrant has in effect a policy of liability
insurance covering its directors and officers.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that, in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of the expenses incurred or paid by a director,
officer or controlling person of the Registrant of the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
4<PAGE>
securities being registered, the Registrant will, unless in the
opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit Number Description
4 1992 Stock Option Plan, as amended
5 Opinion of Hogan & Hartson L.L.P.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Hogan & Hartson L.L.P.
(See Exhibit 5)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
5<PAGE>
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) The undertaking concerning indemnification is set forth
under the response to Item 6.
6<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has
duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of
Houston, State of Texas, on this 24th day of September ,1998.
U.S. PHYSICAL THERAPY, INC.
By: /s/ Roy W. Spradlin
Roy W. Spradlin
President and Chief Executive
Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE
/s/ J. Livingston Kosberg Chairman of
J. Livingston Kosberg the Board Sept. 23, 1998
President, Chief
Executive Officer
and Director
/s/ Roy W. Spradlin (Principal
Roy W. Spradlin Executive Officer) Sept. 23, 1998
7<PAGE>
SIGNATURE TITLE DATE
/s/ Mark J. Brookner Vice Chairman of the
Mark J. Brookner Board of Directors Sept. 23, 1998
Chief Financial
Officer(Principal
/s/ J. Michael Mullin Financial and
J. Michael Mullin Accounting Officer) Sept. 23, 1998
/s/ Daniel C. Arnold
Daniel C. Arnold Director Sept. 23, 1998
/s/ George H. Hargrave
George H. Hargrave Director Sept. 23, 1998
/s/ James B. Hoover
James B. Hoover Director Sept. 23, 1998
/s/ Marlin W. Johnston
Marlin W. Johnston Director Sept. 23, 1998
Richard C.W. Mauran Director
Albert L. Rosen Director
8<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
4 1992 Stock Option Plan, as amended 10
5 Opinion of Hogan & Hartson L.L.P. 30
23.1 Consent of Ernst & Young LLP 33
23.2 Consent of Hogan & Hartson L.L.P.
(See Exhibit 5)
9<PAGE>
EXHIBIT 4
U.S. PHYSICAL THERAPY, INC.
1992 STOCK OPTION PLAN, AS AMENDED
Scope and Purpose of Plan
This U.S. Physical Therapy, Inc. 1992 Stock Option Plan (the
"Plan") provides for the granting of:
(a) Incentive Options (hereinafter defined) to certain key
employees of U.S. Physical Therapy, Inc., a Nevada corporation (the
"Corporation"), or of its Affiliates (hereinafter defined), and
(b) Nonstatutory Options (hereinafter defined) to certain
key employees and nonemployee directors of the Corporation or of
its Affiliates or of U.S. PT Management, Ltd., a Texas limited
partnership ("USPTM").
The purpose of the Plan is to provide an incentive for key
employees and directors of the Corporation or its Affiliates or
USPTM to remain in the service of the Corporation or its Affiliates
or USPTM, to extend to them the opportunity to acquire a
proprietary interest in the Corporation so that they will apply
their best efforts for the benefit of the Corporation, and to aid
the Corporation in attracting able persons to enter the service of
the Corporation and its Affiliates or USPTM.
SECTION 1. Definitions.
1.1 "Affiliates" shall mean (a) any corporation, other than
the Corporation, in an unbroken chain of corporations ending with
the Corporation if each of the corporations, other than the
Corporation, owns stock possessing fifty percent (50%) or more of
the total combined voting power of all classes of stock in one of
the other corporations in such chain and (b)any corporation, other
than the Corporation, in an unbroken chain of corporations
beginning with the Corporation if each of the corporations, other
than the last corporation in the unbroken chain, owns stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in
such chain.
10<PAGE>
1.2 "Agreement" shall mean the written agreement between
the Corporation and a Holder evidencing the Option granted by the
Corporation and the understanding of the parties with respect
thereto.
1.3 "Board of Directors" shall mean the board of directors
of the Corporation.
1.4 "Code" shall mean the Internal Revenue Code of 1986,
as amended.
1.5 "Committee" shall mean the committee appointed pursuant
to Section 3 hereof by the Board of Directors to administer this
Plan.
1.6 "Eligible Individuals" shall mean (a) key employees,
including officers and directors who are also employees of the
Corporation or of any of its Affiliates or of USPTM, (b)
nonemployee directors (including advisory directors) and officers
of the Corporation or of any of its Affiliates. Notwithstanding
the foregoing provisions of this Paragraph 1.6, to ensure that the
requirements of Subparagraph 3.1(a) are satisfied, the Board of
Directors may from time to time specify individuals who shall not
be eligible for the grant of Options or options or stock
appreciation rights or allocations of stock under any plan of the
Corporation or its Affiliates (as such terms are used in subsection
(d)(3) of Rule 16b-3 promulgated under the Act); provided, however,
that the Board of Directors may at any time determine that any
individual who has been so excluded from eligibility shall become
eligible for grants of Options and grants of such options or stock
appreciation rights or allocations of stock under any plans of the
Corporation and its Affiliates.
1.7 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.8 "Fair Market Value" shall mean:
(a) If shares of Stock of the same class are listed
or admitted to unlisted trading privileges on any national or
regional securities exchange at the date of determining the Fair
Market Value, the last reported sale price on such exchange on the
last business day prior to the date in question; or
11<PAGE>
(b) If shares of Stock of the same class shall not
be listed or admitted to unlisted trading privileges as provided in
Subparagraph 1.8(a) and sales prices therefor in the over-the-
counter market shall be reported by the National Association of
Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ")
National Market System at the date of determining the Fair Market
Value, the last reported sale price so reported on the last
business day prior to the date in question; or
(c) If shares of Stock of the same class shall not be
listed or admitted to unlisted trading privileges as provided in
Subparagraph 1.8(a) and sales prices therefor shall not be reported
by the NASDAQ National Market System as provided in Subparagraph
1.8(b), and bid and asked prices therefor in the over-the-counter
market shall be reported by NASDAQ (or, if not so reported, by the
National Quotation Bureau Incorporated) at the date of determining
the Fair Market Value, the average of the closing bid and asked
prices on the last business day prior to the date in question; and
(d) If shares of Stock of the same class shall not be
listed or admitted to unlisted trading privileges as provided in
Subparagraph 1.8(a) and sales prices or bid and asked prices
therefor shall not be reported by NASDAQ (or the National Quotation
Bureau Incorporated) as provided in Subparagraph 1.8(b) or
Subparagraph 1.8(c) at the date of determining the Fair Market
Value, the value determined in good faith by the Board of
Directors.
For purposes of valuing Incentive Options, the Fair Market Value of
Stock shall be determined without regard to any restriction other
than one which, by its terms, will never lapse.
1.9 "Holder" shall mean an Eligible Individual to whom an
Option has been granted.
1.10 "Incentive Options" shall mean stock options that are
intended to satisfy the requirements of section 422 of the Code.
1.11 "Nonstatutory Options" shall mean stock options that
are not intended to satisfy the requirements of section 422 of the
Code.
12<PAGE>
1.12 "Options" shall mean either Incentive Options or
Nonstatutory Options, or both.
1.13 "Securities Act" shall mean the Securities Act of 1933,
as amended.
1.14 "Stock" shall mean the Corporation's authorized common
stock, $0.01 par value per share, together with any other
securities with respect to which Options granted hereunder may
become exercisable.
SECTION 2. Stock and Maximum Number of Shares Subject to the Plan.
2.1 Description of Stock and Maximum Shares Allocated. The
Stock which may be issued upon the exercise of an Option may either
be unissued or reacquired shares of Stock, as the Board of
Directors may, in its sole and absolute discretion, from time to
time determine.
Subject to the adjustments provided for in Paragraph 6.6, (i) the
aggregate number of shares of Stock to be issued pursuant to the
exercise of all Options granted hereunder may equal but shall not
exceed 995,000 shares of Stock and (ii) the maximum number of
shares of Stock subject to Options that may be granted to any
officer or other employee during any calendar year shall not exceed
100,000 shares of Stock.
2.2 Restoration of Unpurchased Shares. If an Option
granted hereunder expires or terminates for any reason during the
term of this Plan and prior to the exercise of the Option in full,
the shares of Stock subject to but not issued under such Option
shall again be available for Options granted hereunder subsequent
thereto.
SECTION 3. Administration of the Plan.
3.1 Committee. The Plan shall be administered by the
Committee. The Committee shall consist of not less than two
individuals. In the event that Stock is registered under Section
12 of the Exchange Act, all members of the Committee shall be
directors.
13<PAGE>
3.2 Duration, Removal, Etc. The members of the Committee
shall serve at the pleasure of the Board of Directors, which shall
have the power, at any time and from time to time, to remove
members from the Committee or to add members thereto. Vacancies on
the Committee, however caused, shall be filled by action of the
Board of Directors.
3.3 Meetings and Actions of Committee. The Committee shall
elect one of its members as its Chairman and shall hold its
meetings at such times and places as it may determine. All
decisions and determinations of the Committee shall be made by the
majority vote or decision of all of its members present at a
meeting; provided, however, that any decision or determination
reduced to writing and signed by all of the members of the
Committee shall be as fully effective as if it had been made at a
meeting duly called and held. The Committee may make any rules and
regulations for the conduct of its business that are not
inconsistent with the provisions hereof and with the bylaws of the
Corporation as it may deem advisable.
3.4 Committee's Powers. Subject to the express provisions
hereof, the Committee shall have the authority, in its sole and
absolute discretion, (a) to adopt, amend, and rescind
administrative and interpretive rules and regulations relating to
the Plan; (b) to determine the terms and provisions of the
respective Agreements (which need not be identical), including
provisions defining or otherwise relating to (i) subject to Section
6 of the Plan, the term and the period or periods and extent of
exercisability of the Options, (ii) the extent to which the
transferability of shares of Stock issued upon exercise of Options
is restricted, (iii) the effect of termination of employment upon
the exercisability of the Options, and (iv) the effect of approved
leaves of absence (consistent with any applicable regulations of
the Internal Revenue Service); (c) to accelerate the time of
exercisability of any Option that has been granted; (d) to construe
the terms of any Agreement and the Plan; and (e) to make all other
determinations and perform all other acts necessary or advisable
for administering the Plan, including the delegation of such
ministerial acts and responsibilities as the Committee deems
appropriate. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any
Agreement in the manner and to the extent it shall deem expedient
14<PAGE>
to carry it into effect, and it shall be the sole and final judge
of such expediency. The Committee shall have full discretion to
make all determinations on the matters referred to in this
Paragraph 3.4; such determinations shall be final, binding and
conclusive.
SECTION 4. Eligibility and Participation.
4.1 Eligible Individuals. Options may be granted hereunder
only to persons who are Eligible Individuals at the time of the
grant thereof. Notwithstanding any provision contained herein to
the contrary, a person shall not be eligible to receive an
Incentive Option hereunder unless he is an employee of the
Corporation or an Affiliate, nor shall a person be eligible to
receive an Incentive Option hereunder if he, at the time such
Option is granted, would own (within the meaning of Sections 422
and 424 of the Code) stock possessing more than ten percent (10%)
of the total combined voting power or value of all classes of stock
of the Corporation or of an Affiliate unless at the time such
Incentive Option is granted the exercise price per share of Stock
is at least one hundred and ten percent (110%) of the Fair Market
Value of each share of Stock to which the Incentive Option relates
and the Incentive Option is not exercisable after the expiration of
five (5) years from the date it is granted.
4.2 No Right to Option. The adoption of the Plan shall not
be deemed to give any person a right to be granted an Option.
SECTION 5. Grant of Options and Certain Terms of the Agreements.
Subject to the express provisions hereof, the Committee shall
determine which Eligible Individuals shall be granted Options
hereunder from time to time. In making grants, the Committee shall
take into consideration the contribution the potential Holder has
made or may make to the success of the Corporation or its
Affiliates or of USPTM and such other considerations as the Board
of Directors may from time to time specify. The Committee shall
also determine the number of shares subject to each of such
Options, and shall authorize and cause the Corporation to grant
Options in accordance with such determinations.
15<PAGE>
The date on which the Committee completes all action constituting
an offer of an Option to an individual, including the specification
of the number of shares of Stock to be subject to the Option, shall
be the date on which the Option covered by an Agreement is granted,
even though certain terms of the Agreement may not be at such time
determined and even though the Agreement may not be executed until
a later time. For purposes of the preceding sentence, an offer
shall be deemed made if the Committee has completed all such action
except communication of the grant of the Option to the potential
Holder. In no event, however, shall a Holder gain any rights in
addition to those specified by the Committee in its grant,
regardless of the time that may pass between the grant of the
Option and the actual execution of the Agreement by the Corporation
and the Holder.
Each Option granted hereunder shall be evidenced by an Agreement,
executed by the Corporation and the Eligible Individual to whom the
Option is granted, incorporating such terms as the Committee shall
deem necessary or desirable. More than one Option may be granted
hereunder to the same Eligible Individual and be outstanding
concurrently hereunder. In the event an Eligible Individual is
granted one or more Incentive Options and one or more Nonstatutory
Options, such grants shall be evidenced by separate Agreements, one
for each of the Incentive Option grants and one for each of the
Nonstatutory Option grants.
Each Agreement may contain or otherwise provide for conditions
giving rise to the forfeiture of the Stock acquired pursuant to an
Option granted hereunder or otherwise and such restrictions on the
transferability of shares of the Stock acquired pursuant to an
Option granted hereunder or otherwise as the Committee in its sole
and absolute discretion shall deem proper or advisable. Such
conditions giving rise to forfeiture may include, but need not be
limited to, the requirement that the Holder render substantial
services to the Corporation or its Affiliates or of USPTM for a
specified period of time.
SECTION 6. Terms and Conditions of Options.
All Options granted hereunder shall comply with, be deemed to
include, and shall be subject to the following terms and
conditions:
16 <PAGE>
6.1 Number of Shares. Each Agreement shall state the
number of shares of Stock to which it relates.
6.2 Exercise Price. Each Agreement shall state the
exercise price per share of Stock. The exercise price per share of
Stock subject to an Incentive Option shall not be less than the
greater of (a) the par value per share of the Stock or (b) 100% of
the Fair Market Value per share of the Stock on the date of the
grant of the Option. The exercise price per share of Stock subject
to a Nonstatutory Option shall not be less than the par value per
share of the Stock. The exercise price per share of Stock subject
to either an Incentive Option or a Nonstatutory Option shall be
determined by the Committee upon the granting of the Option,
subject to the restrictions set forth above.
6.3 Medium and Time of Payment, Method of Exercise, and
Withholding Taxes. The exercise price of an Option shall be
payable upon the exercise of the Option in a manner that is
acceptable to the Committee in its sole discretion, which form may
include cash, shares of Stock or a share or shares of Stock owned
by the Holder and surrendered for actual or deemed multiple
exchanges of shares of Stock, or any combination thereof. Exercise
of an Option shall not be effective until the Corporation has
received written notice of exercise, specifying the number of whole
shares to be purchased and accompanied by payment in full of the
aggregate exercise price of the number of shares purchased. The
Corporation shall not in any case be required to sell, issue, or
deliver a fractional share of Stock with respect to any Option.
The Committee may, in its discretion, require a Holder to pay to
the Corporation at the time of exercise of an Option or portion
thereof the amount that the Corporation deems necessary to satisfy
its obligation to withhold Federal, state or local income or other
taxes incurred by reason of the exercise. Where the exercise of an
Option does not give rise to an obligation to withhold Federal
income or other taxes on the date of exercise, the Corporation may,
in its discretion, require a Holder to place shares of Stock
purchased under the Option in escrow for the benefit of the
Corporation until such time as Federal income or other tax
withholding is no longer required with respect to such shares or
until such withholding is required on amounts included in the gross
income of the Holder as a result of the exercise of an Option or
17<PAGE>
the disposition of shares of Stock acquired pursuant thereto. At
such later time, the Corporation, in its discretion, may require a
Holder to pay to the Corporation the amount that the Corporation
deems necessary to satisfy its obligation to withhold Federal,
state or local income or other taxes incurred by reason of the
exercise of the Option or the disposition of shares of Stock. Upon
receipt of such payment by the Corporation, such shares of Stock
shall be released from escrow to the Holder.
6.4 Term, Time of Exercise, and Transferability of Stock
and Options. In addition to such other terms and conditions as may
be included in a particular Agreement granting an Option, an Option
shall be exercisable during a Holder's lifetime only by the Holder
or by the Holder's guardian or legal representative in accordance
with the next sentence. An Option shall not be transferable other
than by will or the laws of descent and distribution. The
provisions of the remainder of this Paragraph 6.4 shall apply to
the extent a Holder's Agreement does not expressly provide
otherwise.
If a Holder (a) voluntarily ceases to be an Eligible Individual
or (b) ceases to be an Eligible Individual by reason that his
status as such was terminated by the Corporation or one of its
Affiliates or by USPTM (with or without cause), the Option shall
terminate thirty days after such Holder ceases to be an Eligible
Individual.
Notwithstanding the foregoing, if a Holder ceases to be an
Eligible Individual by reason of (a) disability (as defined in
Section 22(e)(3) of the Code) or (b) death, then the Holder shall
have the right for twelve months after the date of disability or
death to exercise an Option to the extent such Option is
exercisable on the date of his disability.
That portion of the Option which is not exercisable on the date
the Holder ceases to be an Eligible Individual shall terminate and
be forfeited to the Corporation on the date of such cessation.
18<PAGE>
Notwithstanding any other provision of this Plan, no Incentive
Option shall be exercisable after the expiration of ten (10) years
from the date it is granted, or the period specified in Paragraph
4.1, if applicable. The Committee shall have authority to
prescribe in any Agreement that the Option evidenced thereby may be
exercised in full or in part as to any number of shares subject
thereto at any time or from time to time during the term of the
Option, or in such installments at such times during said term as
the Committee may prescribe. Except as provided above and unless
otherwise provided in any Agreement, an Option may be exercised at
any time or from time to time during the term of the Option. Such
exercise may be as to any or all whole (but no fractional) shares
which have become purchasable under the Option.
Within a reasonable time or such time as may be permitted by law
after the Corporation receives written notice that the Holder has
elected to exercise all or a portion of an Option, accompanied by
payment in full of the aggregate Option exercise price of the
number of shares of Stock purchased, the Corporation shall issue
and deliver a certificate representing the shares acquired in
consequence of the exercise and any other amounts payable in
consequence of such exercise. In the event that a Holder exercises
both an Incentive Option, or portion thereof, and a Nonstatutory
Stock Option, or a portion thereof, separate Stock certificates
shall be issued, one for the Stock subject to the Incentive Option
and one for the Stock subject to the Nonstatutory Stock Option.
The number of the shares of Stock transferable due to an exercise
of an Option under this Plan shall not be increased due to the
passage of time, except as may be provided in an Agreement.
However, this number of such shares of Stock which are transferable
may increase due to the occurrence of certain events which are
fully described in Paragraph 6.6.
Nothing herein or in any Option granted hereunder shall require
the Corporation to issue any shares upon exercise of any Option if
such issuance would, in the opinion of counsel for the Corporation,
constitute a violation of the Securities Act or any similar or
superseding statute or statutes, or any other applicable statute or
regulation, as then in effect. At the time of any exercise of an
Option, the Corporation may, as a condition precedent to the
exercise of such Option, require from the Holder of the Option (or
in the event of his death, his legal representatives, heirs,
19<PAGE>
legatees, or distributees) such written representations, if any,
concerning his intentions with regard to the retention or
disposition of the shares being acquired by exercise of such Option
and such written covenants and agreements, if any, as to the manner
of disposal of such shares as, in the opinion of counsel to the
Corporation, may be necessary to ensure that any disposition by
such Holder (or in the event of his death, his legal
representatives, heirs, legatees, or distributees), will not
involve a violation of the Securities Act or any similar or
superseding statute or statutes, or any other applicable state or
federal statute or regulation, as then in effect. Shares of Stock
issued upon exercise of any Option shall not be transferable until
after six months from the date the Option is granted. Certificates
for shares of Stock, when issued, may have the following or similar
legend (in the event the shares of stock covered by Options granted
under this Plan are not then registered under the Securities Act
and under applicable state securities laws), or statements of other
applicable restrictions, endorsed thereon, and, as described in the
preceding sentence, may not be immediately transferable:
The shares of Stock evidenced by this certificate have
been issued to the registered owner in reliance upon
written representations that these shares have been
purchased for investment. These shares have not been
registered under the Securities Act of 1933, as amended,
or any applicable state securities laws, in reliance upon
an exception from registration. Without such
registration, these shares may not be sold, transferred,
assigned or otherwise disposed of unless, in the opinion
of the Corporation and its legal counsel, such sale,
transfer, assignment or disposition will not be in
violation of the Securities Act of 1933, as amended,
applicable rules and regulations of the Securities and
Exchange Commission, and any applicable state securities
laws.
6.5 Limitation on Aggregate Value of Shares That May
Become First Exercisable During Any Calendar Year Under an
Incentive Option. Except as is otherwise provided in the second
paragraph of Paragraph 6.6, with respect to any Incentive Option
granted under this Plan, the sum of:
20<PAGE>
(a) the aggregate Fair Market Value of shares of Stock
subject to such Incentive Option that first become purchasable in
a calendar year under such Incentive Option, and
(b) the aggregate Fair Market Value of shares of Stock
or stock of any Affiliate (or a predecessor of the Corporation or
an Affiliate) subject to any other incentive stock option (within
the meaning of Section 422 of the Code) of the Corporation or its
Affiliates (or a predecessor corporation of any such corporation),
that first become purchasable in a calendar year under such
incentive stock option may not (with respect to any Holder) exceed
$100,000, with such Fair Market Value to be determined as of the
date the Incentive Option or such other incentive stock option is
granted.
For purposes of this Paragraph 6.5, "predecessor corporation"
means (i) a corporation that was a party to a transaction described
in Section 424(a) of the Code (or which would be so described if a
substitution or assumption under such section had been effected)
with the Corporation, (ii) a corporation which, at the time the new
incentive stock option (within the meaning of section 422 of the
Code) is granted, is an Affiliate of the Corporation or (iii) a
predecessor corporation of any such corporations.
6.6 Adjustments Upon Changes in Capitalization, Merger,
Etc. Notwithstanding any other provision hereof, in the event of
any change in the number of outstanding shares of Stock
(a) effected without receipt of consideration therefor
by the Corporation, by reason of a stock dividend, or split,
combination, exchange of shares or other recapitalization, merger,
or otherwise, in which the Corporation is the surviving
corporation, or
(b) by reason of a spin-off of a part of the Corporation
into a separate entity, or assumptions and conversions of
outstanding grants due to an acquisition by the Corporation of a
separate entity,(1) the aggregate number and class of the reserved
shares and the maximum number of shares subject to Options that may
be granted to any officer or other employee during any calendar
year, (2) the number and class of shares subject to each
outstanding Option and (3) the exercise price of each outstanding
21<PAGE>
Option shall be automatically adjusted to accurately and equitably
reflect the effect thereon of such change (provided, however, that
any fractional share resulting from such adjustment may be
eliminated) so that the total number of outstanding shares subject
to an Option shall be equivalent to the amount specified in
Paragraph 2.1 of the Plan. In the event of a dispute concerning
such adjustment, the Committee has full discretion to determine the
resolution of the dispute. Such determination shall be final,
binding and conclusive. The number of reserved shares or the
number of shares subject to any outstanding Option shall be
automatically reduced by any fraction included therein which
results from any adjustment made pursuant to this Paragraph 6.6.
The following provisions of this Paragraph 6.6 shall apply unless
a Holder's Agreement provides otherwise. In the event of:
(a) a dissolution or liquidation of the Corporation,
(b) a merger or consolidation (other than a merger
effecting a reincorporation of the Corporation in another state or
any other merger or a consolidation in which the stockholders of
the surviving corporation and their proportionate interests therein
immediately after the merger or consolidation are substantially
identical to the stockholders of the Corporation and their
proportionate interests therein immediately prior to the merger or
consolidation) in which the Corporation is not the surviving
corporation (or survives only as a subsidiary of another
corporation in a transaction in which the stockholders of the
parent of the Corporation and their proportionate interests therein
immediately after the transaction are not substantially identical
to the stockholders of the Corporation and their proportionate
interests therein immediately prior to the transaction; provided,
however, that the Board of Directors may at any time prior to such
a merger or consolidation provide by resolution that the foregoing
provisions of this parenthetical shall not apply if a majority of
the board of directors of such parent immediately after the
transaction consists of individuals who constituted a majority of
the Board of Directors immediately prior to the transaction), or
(c) a transaction in which any person becomes the owner
of 50% or more of the total combined voting power of all classes of
stock of the Corporation (provided, however, that the Board of
22<PAGE>
Directors may at any time prior to such transaction provide by
resolution that this subparagraph (c) shall not apply if such
acquiring person is a corporation and a majority of the board of
directors of the acquiring corporation immediately after the
transaction consists of individuals who constituted a majority of
the Board of Directors immediately prior to the acquisition of such
50% or more total combined voting power)the Plan and all Options
outstanding hereunder shall terminate, except to the extent
provision is made in writing in connection with such transaction
for the continuation of the Plan and/or the assumption of the
Options theretofore granted, or for the substitution for such
Options of new options covering the stock of a successor
corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kinds of shares and exercise
prices, in which event the Plan and Options theretofore granted
shall continue in the manner and under the terms so provided. In
the event of any such termination of the Plan, each individual
holding an Option shall have the right (subject to the general
limitations on exercise set forth in Section 6.4 above),
immediately prior to the occurrence of such termination and during
such period occurring prior to such termination as the Board of
Directors in its sole discretion shall determine and designate, to
exercise such Option in whole or in part, whether or not such
Option was otherwise exercisable at the time such termination
occurs. The Board shall send written notice of an event that will
result in such a termination to all individuals who hold Options
not later than the time at which the Corporation gives notice
thereof to its stockholders.
6.7 Rights as a Stockholder. A Holder shall have no
right as a stockholder with respect to any shares covered by his
Option until a certificate representing such shares is issued to
him. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash or other property) or distributions
or other rights for which the record date is prior to the date such
certificate is issued, except as provided in paragraph 6.6 hereof.
6.8 Modification, Extension and Renewal of Options.
Subject to the terms and conditions of and within the limitations
of the Plan, the Committee may modify, extend or renew outstanding
Options granted under the Plan, or accept the surrender of Options
outstanding hereunder (to the extent not theretofore exercised) and
23<PAGE>
authorize the granting of new Options hereunder in substitution
therefor (to the extent not theretofore exercised). The Committee
may not, however, without the consent of the Holder, modify any
outstanding Options so as to specify a higher or lower exercise
price or base amount or accept the surrender of outstanding
Incentive Options and authorize the granting of new Options in
substitution therefor specifying a higher or lower exercise price.
In addition, no modification of an Option granted hereunder shall,
without the consent of the Holder, alter or impair any rights or
obligations under any Option theretofore granted hereunder to such
Holder under the Plan, except as may be necessary, with respect to
Incentive Options, to satisfy the requirements of Section 422 of
the Code.
6.9 Furnish Information. Each Holder shall furnish to
the Corporation all information requested by the Corporation to
enable it to comply with any reporting or other requirement imposed
upon the Corporation by or under any applicable statute or
regulation.
6.10 Obligation to Exercise; Termination of Employment.
The granting of an Option hereunder shall impose no obligation upon
the Holder to exercise the same or any part thereof. In the event
of a Holder's termination of employment with the Corporation or an
Affiliate or USPTM, the unexercised portion of an Option granted
hereunder shall terminate in accordance with paragraph 6.4 hereof.
6.11 Agreement Provisions. The Agreements authorized
under the Plan shall contain such provisions in addition to those
required by the Plan (including, without limitation, restrictions
or the removal of restrictions upon the exercise of the Option and
the retention or transfer of shares thereby acquired) as the
Committee shall deem advisable. Each Agreement shall identify the
Option evidenced thereby as an Incentive Option and a Nonstatutory
Option, as the case may be, and no Agreement shall cover both an
Incentive Option and a Nonstatutory Option. Each Agreement
relating to an Incentive Option granted hereunder shall contain
such limitations and restrictions upon the exercise of the
Incentive Option to which it relates as shall be necessary for the
Incentive Option to which such Agreement relates to constitute an
incentive stock option, as defined in Section 422 of the Code.
24<PAGE>
SECTION 7. Duration of Plan.
No Incentive Options may be granted hereunder after the date that
is ten (10) years from the earlier of (a) the date the Plan is
adopted by the Board of Directors or (b) the date the Plan is
approved by stockholders of the Corporation. In addition, with
respect to shares of Stock not currently covered by an outstanding
Option, this Plan may be terminated at any time by the Board of
Directors.
SECTION 8. Amendment of Plan.
The Board of Directors may at any time terminate or from time to
time amend or suspend the Plan; provided, however, that no such
amendment shall, without approval of the stockholders of the
Corporation, except as provided in Section 6, (a) increase the
aggregate number of shares of Stock as to which Options may be
granted under the Plan; (b) increase the maximum period during
which Options may be exercised; or (c) extend the effective period
of the Plan. No Option may be granted during any suspension of the
Plan or after the Plan has been terminated and no amendment,
suspension or termination shall, without a Holder's consent, alter
or impair any of the rights or obligations under any Option
theretofore granted to such Holder under the Plan.
SECTION 9. General.
9.1 Application of Funds. The proceeds received by the
Corporation from the sale of shares pursuant to Options shall be
used for general corporate purposes.
9.2 Right of the Corporation and Affiliates to
Terminate. Nothing contained in the Plan, or in any Agreement,
shall confer upon any Holder the right to continue in the employ of
the Corporation or any Affiliate, or interfere in any way with the
rights of the Corporation or any Affiliate to terminate his
employment any time.
9.3 Authority of Committee. In addition to its
authority expressed herein, the Committee shall have full and
absolute discretion to make determinations under the Plan and any
Agreement and to interpret the provisions of the Plan and any
Agreement.
25<PAGE>
9.4 No Liability for Good Faith Determinations. Neither
the members of the Board of Directors nor any member of the
Committee shall be liable for any act, omission, or determination
taken or made in good faith with respect to the Plan or any Option
granted under it, and members of the Board of Directors and the
Committee shall be entitled to indemnification and reimbursement by
the Corporation in respect of any claim, loss, damage, or expense
(including attorneys' fees, the costs of settling any suit,
provided such settlement is approved by independent legal counsel
selected by the Corporation, and amounts paid in satisfaction of a
judgment, except a judgment based on a finding of bad faith)
arising therefrom to the full extent permitted by law and under any
directors and officers liability or similar insurance coverage that
may from time to time be in effect.
9.5 Information Confidential. As partial consideration
for the granting of each Option hereunder, the Agreement may, in
the Committee's sole and absolute discretion, provide that the
Holder shall agree with the Corporation that he will keep
confidential all information and knowledge that he has relating to
the manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by law
and may be given in confidence to the Holder's spouse, tax and
financial advisors, or to a financial institution to the extent
that such information is necessary to secure a loan. In the event
any breach of this promise comes to the attention of the Committee,
it shall take into consideration such breach, in determining
whether to recommend the grant of any future Option to such Holder,
as a factor militating against the advisability of granting any
such future Option to such individual.
9.6 Other Benefits. Participation in the Plan shall not
preclude the Holder from eligibility in any other stock option plan
of the Corporation or any Affiliate or any old age benefit,
insurance, pension, profit sharing, retirement, bonus, or other
extra compensation plans which the Corporation or any Affiliate has
adopted, or may, at any time, adopt for the benefit of its
employees.
9.7 Execution of Receipts and Releases. Any payment of
cash or any issuance or transfer of shares of Stock to the Holder,
or to his legal representative, heir, legatee, or distributee, in
26<PAGE>
accordance with the provisions hereof, shall, to the extent
thereof, be in full satisfaction of all claims of such persons
hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition
precedent to such payment, to execute a release and receipt
therefor in such form as it shall determine.
9.8 No Guarantee of Interests. Neither the Committee
nor the Corporation guarantees the Stock of the Corporation from
loss or depreciation.
9.9 Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including,
but not limited to, legal and accounting fees, shall be paid by the
Corporation or its Affiliates; provided, however, the Corporation
or an Affiliate may recover any and all damages, fees, expenses,
and/or costs arising out of any actions taken by the Corporation to
enforce its rights hereunder.
9.10 Corporation Records. Records of the Corporation or
its Affiliates regarding the Holder's period of employment,
termination of employment and the reason therefor, leaves of
absence, re-employment, and other matters shall be conclusive for
all purposes hereunder, unless determined by the Committee to be
incorrect.
9.11 Information. The Corporation and its Affiliates
shall, upon request or as may be specifically required hereunder,
furnish or cause to be furnished, all of the information or
documentation which is necessary or required by the Committee to
perform its duties and functions under the Plan.
9.12 No Liability of Corporation. The Corporation
assumes no obligation or responsibility to the Holder or his legal
representatives, heirs, legatees, or distributees for any act of,
or failure to act on the part of, the Committee.
9.13 Corporation Act. Any action required of the
Corporation shall be by resolution of its Board of Directors, by a
person authorized to act by resolution of the Board of Directors,
or by a person authorized to act by the bylaws of the Corporation.
27<PAGE>
9.14 Severability. If any provision of this Plan is held
to be illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions hereof, but
such provision shall be fully severable and the Plan shall be
construed and enforced as if the illegal or invalid provision had
never been included herein.
9.15 Notices. Whenever any notice is required or
permitted hereunder, such notice must be in writing and personally
delivered or sent by mail or by a nationally recognized courier
service. Any notice required or permitted to be delivered
hereunder shall be deemed to be delivered on the date on which it
is personally delivered, or, if mailed, whether actually received
or not, on the third business day after it is deposited in the
United States mail, certified or registered, postage prepaid,
addressed to the person who is to receive it at the address which
such person has previously specified by written notice delivered in
accordance herewith or, if by courier, 24 hours after it is sent,
addressed as described in this Section, or, if by facsimile
machine, the time mechanically recorded on the document by the
facsimile process. The Corporation or a Holder may change, at any
time and from time to time, by written notice to the other, the
address which it or he had previously specified for receiving
notices. Until changed in accordance herewith, the Corporation and
each Holder shall specify as its and his address for receiving
notices the address set forth in the Agreement pertaining to the
shares to which such notice relates.
9.16 Waiver of Notice. Any person entitled to notice
hereunder may waive such notice.
9.17 Successors. The Plan shall be binding upon the
Holder, his legal representatives, heirs, legatees, and
distributees, upon the Corporation, its successors, and assigns,
and upon the Committee and its successors.
9.18 Headings. The titles and headings of Sections and
Paragraphs are included for convenience of reference only and are
not to be considered in construction of the provisions hereof.
28<PAGE>
9.19 Governing Law. All questions arising with respect
to the provisions of the Plan shall be determined by application of
the laws of the State of Nevada except to the extent Nevada law is
preempted by federal law. Questions arising with respect to the
provisions of an Agreement that are matters of contract law shall
be governed by the laws of the state specified in the Agreement,
except to the extent preempted by federal law and except to the
extent that Nevada corporate law conflicts with the contract law of
such state, in which event Nevada corporate law shall govern. The
obligation of the Corporation to sell and deliver Stock hereunder
is subject to applicable laws and to the approval of any
governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Stock.
9.20 Word Usage. Words used in the masculine shall apply
to the feminine where applicable, and wherever the context of this
Plan dictates, the plural shall be read as the singular and the
singular as the plural.
SECTION 10. Approval of Stockholders.
The Plan shall take effect on the date it is adopted by the Board
of Directors. However, if this Plan is not approved by the holders
of a majority of the outstanding shares of equity securities of the
Corporation having voting rights within twelve months of the date
of adoption by the Board of Directors, none of the Options granted
hereunder shall constitute Incentive Options.
* * * *
29<PAGE>
EXHIBIT 5
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
September 24, 1998
Board of Directors
U.S. Physical Therapy, Inc.
3040 Post Oak Blvd., Suite 222
Houston, Texas 77056
Gentlemen:
We are acting as special counsel to U.S. Physical Therapy, Inc., a
Nevada corporation (the "Company"), in connection with its
registration statement on Form S-8 (the "Registration Statement")
filed with the Securities and Exchange Commission relating to an
additional 350,000 shares of the Company's common stock, par value
$.01 per share (the "Shares"), issuable in connection with the
Company's 1992 Stock Option Plan, as amended (the "Plan"). This
opinion letter is furnished to you at your request to enable you to
fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17
C.F.R. Section 229.601(b)(5), in connection with the Registration
Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. A copy of the Plan.
3. The Articles of Incorporation of the Company, as certified
by the by the Secretary of the Company on the date hereof
as then being complete, accurate and in effect.
30<PAGE>
Board of Directors
U.S. Physical Therapy, Inc.
September 24, 1998
Page 2
4. The Bylaws of the Company, as certified by the Secretary of
the Company on the date hereof as then being complete,
accurate and in effect.
5. Resolutions of the Board of Directors of the Company
adopted by unanimous written consent dated August 3, 1998,
as certified by the Secretary of the Company on the date
hereof as then being complete, accurate and in effect,
relating to the increase in the number of shares issuable
under the Plan and related matters.
6. Resolutions adopted by the stockholders of the Company at
a special meeting of the stockholders duly held on
September 9, 1998, as certified by the Secretary of the
Company on the date hereof as then being complete, accurate
and in effect, relating to such increase in the number of
shares issuable under the Plan and related matters.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural
persons, the accuracy and completeness of all documents submitted
to us, the authenticity of all original documents and the
conformity to the authentic original documents of all documents
submitted to us as copies (including telecopies). This opinion
letter is given, and all statements herein are made, in the context
of the foregoing.
This opinion letter is based as to matters of law solely on the
General Corporation Law of the State of Nevada ("Nevada General
Corporation Law"). We express no opinion herein as to any other
laws, statutes, regulations, or ordinances.
Based upon, subject to and limited by the foregoing, we are of the
opinion that the Shares, when issued and delivered in the manner
and on the terms described in the Plan, will be validly issued,
fully paid and nonassessable under the Nevada General Corporation
Law.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This
opinion letter has been prepared solely for your use in connection
with the filing of the Registration Statement on the date of this
31<PAGE>
Board of Directors
U.S. Physical Therapy, Inc.
September 24, 1998
Page 3
opinion letter and should not be quoted in whole or in part or
otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior
written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit
5 to the Registration Statement. In giving this consent, we do not
thereby admit that we are an "expert" within the meaning of the
Securities Act of 1933, as amended.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
32<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the 1992 Stock Option Plan, as
amended, of U.S. Physical Therapy, Inc. of our report dated
March 13, 1998, with respect to the consolidated financial
statements of U.S. Physical Therapy, Inc. and subsidiaries
incorporated by reference in the Annual Report (Form 10-KSB) for
the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
September 17, 1998
Houston, Texas Ernst & Young LLP
33
