Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SECTION 240.14a-11(c) or
SECTION 240.14a-12
U.S. Physical Therapy, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s)Filing Proxy Statement if other
than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
U.S. PHYSICAL THERAPY, INC.
3040 Post Oak Blvd., Suite 222
Houston, Texas 77056
(713) 297-7000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
_________________________
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of
Stockholders (the "Annual Meeting") of U.S. Physical Therapy, Inc.
(the "Company") will be held on Tuesday, May 19, 1998, at 10:00
a.m. (CDT), at the DoubleTree Hotel at Post Oak, 2001 Post Oak
Boulevard, Houston, Texas, for the following purposes:
(1) To elect ten directors; and
(2) To transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Pursuant to the Bylaws, the Board of Directors has fixed the
close of business on April 13, 1998 as the record date for the
determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only holders of common stock of record at the
close of business on that date will be entitled to notice of and to
vote at the Annual Meeting or any adjournments thereof.
In the event that there are not sufficient votes to approve
any one or more of the foregoing proposals at the time of the
Annual Meeting, the Annual Meeting may be adjourned in order to
permit further solicitation of proxies by the Company.
By Order of the Board of Directors
/s/ Mark J. Brookner
Mark J. Brookner
Chief Financial Officer
Houston, Texas
April 23, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL
MEETING, PLEASE SIGN, DATE AND COMPLETE THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
<PAGE>
U.S. PHYSICAL THERAPY, INC.
3040 Post Oak Blvd., Suite 222
Houston, Texas 77056
(713) 297-7000
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1998
_________________________
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished to stockholders of U.S.
Physical Therapy, Inc. (the "Company") in connection with the
solicitation by the Board of Directors of the Company of proxies to
be used at the 1998 Annual Meeting of Stockholders (the "Annual
Meeting") of the Company, to be held on Tuesday, May 19, 1998, at
10:00 a.m. (CDT), at the DoubleTree Hotel at Post Oak, 2001 Post
Oak Boulevard, Houston, Texas, and at any adjournments thereof.
The Annual Meeting has been called for the following purposes:
(1) to elect ten directors and (2) to transact such other business
as may properly come before the meeting or any adjournments
thereof. If the enclosed form of proxy is properly executed and
returned to the Company in time to be voted at the Annual Meeting,
the shares represented thereby will be voted in accordance with the
instructions marked thereon. Properly executed but unmarked
proxies will be voted FOR the election of the ten nominees of the
Board of Directors as directors. If any other matters are properly
brought before the Annual Meeting, the persons named in the
accompanying proxy will vote the shares represented by the proxies
on such matters as determined by a majority of the Board of
Directors. This Proxy Statement is initially being mailed to
stockholders on or about April 23, 1998.
The presence of a stockholder at the Annual Meeting will not
automatically revoke such stockholder's proxy. Stockholders may,
however, revoke a proxy at any time prior to its exercise by
delivering to the Company a duly executed proxy bearing a later
date, by attending the Annual Meeting and voting in person, or by
filing a written notice of revocation with Mark J. Brookner, Chief
Financial Officer of the Company, at 3040 Post Oak Blvd., Suite
222, Houston, Texas 77056.
The cost of soliciting proxies in the form enclosed herewith
will be borne by the Company. In addition to the solicitation of
proxies by mail, the Company, through its directors, officers and
regular employees, may also solicit proxies personally or by
telephone. The Company will also request persons, firms and
corporations holding shares in their names or in the name of their
nominees, which are beneficially owned by others, to send proxy<PAGE>
material to and obtain proxies from such beneficial owners and will
reimburse such holders for their reasonable expenses in doing so.
The securities which can be voted at the Annual Meeting
consist of shares of common stock of the Company with each share
entitling its owner to one vote on all matters. There is no
cumulative voting in the election of directors. The close of
business on April 13, 1998 has been fixed by the Board of Directors
as the record date for determination of stockholders entitled to
vote at the meeting. The number of shares of the Company's common
stock outstanding as of such date was 3,610,734. The presence, in
person or by proxy, of at least a majority of the total number of
outstanding shares of common stock is necessary to constitute a
quorum at the Annual Meeting. Directors of the Company will be
elected by a plurality vote of the votes cast at the Annual
Meeting. Abstentions and broker non-votes will be treated as votes
present for the purpose of determining a quorum at the Annual
Meeting. Broker non-votes will not be counted as shares entitled
to be voted on any matter.
A copy of the Annual Report to Stockholders for the year ended
December 31, 1997 accompanies this Proxy Statement. The Company
has filed an Annual Report on Form 10-KSB for the year ended
December 31, 1997 with the Securities and Exchange Commission (the
"SEC"). Stockholders may obtain, free of charge, a copy of the
Form 10-KSB by writing to U.S. Physical Therapy, Inc., 3040 Post
Oak Blvd., Suite 222, Houston, Texas 77056, Att'n: Investor
Relations.
ELECTION OF DIRECTORS
The Board of Directors is composed of ten members. All
directors hold office until the next annual meeting of stockholders
of the Company and then until their successors have been elected
and qualified. There are no arrangements or understandings between
the Company and any person pursuant to which such person has been
elected as a director.
At the Annual Meeting, ten directors will be elected for one-
year terms. Unless otherwise specified on the proxy, it is the
intention of the persons named in the proxy to vote the shares
represented by each properly executed proxy for the election as
directors of each of the persons named below as nominees of the
Board of Directors. The Board of Directors believes that such
nominees will stand for election and will serve if elected as
directors. However, if any person nominated by the Board of
Directors fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such other
person or persons as the Board of Directors may recommend.
2<PAGE>
Information As to Nominees
The following table sets forth the names of the Board of
Directors' ten nominees for election as directors. Each of these
persons currently serves as a director of the Company. Also set
forth is certain other information with respect to each such
person's age, the period during which he has served as a director
and positions currently held with the Company.
Position(s)
Director Held With
Nominees: Age (a) Since (b) the Company
J. Livingston 61 1990 Chairman of the
Kosberg Board
Roy W. Spradlin 49 1994 President, Chief
Executive Officer
and Director
Mark J. Brookner 53 1990 Chief Financial
Officer and Director
Daniel C. Arnold 68 1992 Director
Nelson Broms 78 1992 Director
George H. Hargrave 55 1990 Director
James B. Hoover 43 1993 Director
Marlin W. Johnston 66 1992 Director
Richard C.W. Mauran 65 1993 Director
Albert L. Rosen 74 1992 Director
(a) At March 31, 1998.
(b) Messrs. Kosberg, Hargrave and Brookner have served as
directors of each corporate predecessor (and subsidiaries
thereof) of the Company since the formation of the original
predecessor, National Rehab Associates, Inc., in June 1990.
Messrs. Hargrave and Brookner also served as officers of all
predecessors (and subsidiaries thereof) of the Company. Mr.
Kosberg served as an officer of certain, but not all,
predecessors (and subsidiaries thereof) of the Company.
The principal occupation of each nominee for the past five
years is set forth below.
3<PAGE>
J. Livingston Kosberg has served as Chairman of the Board of
the Company since April 1992 and as the Company's Chief Executive
Officer from April 1992 to August 1995. From September 1991 to
June 1995, Mr. Kosberg also served as Chairman of the Board and was
employed by CareerStaff Unlimited, Inc., which is a national
provider of temporary rehabilitation therapist staffing. Prior to
April 1992, Mr. Kosberg was primarily engaged in managing personal
investments through a variety of ventures and entities, including
National Rehab Associates, Inc., the Company's predecessor. Mr.
Kosberg was Chairman of the Board from April 1990 to April 1992,
and a member of the Board from May 1993 to March 1994, of
BioMedical Waste Systems, Inc., a medical waste treatment company.
Roy W. Spradlin has served as President and Chief Operating
Officer of the Company since May 1994. Effective August 1995, Mr.
Spradlin was named the Company's Chief Executive Officer. From
1991 to May 1994, Mr. Spradlin was President of outpatient clinics
for Pinnacle Rehabilitation Inc. ("Pinnacle"). Pinnacle is a
wholly-owned subsidiary of Pinnacle Care Inc., which provides
rehabilitation services in nursing homes, hospitals and owned and
operated outpatient physical therapy clinics. From 1988 through
1991, he was the Vice President of outpatient clinics in Missouri
and Kansas for Pinnacle.
Mark J. Brookner has served as Chief Financial Officer of the
Company from April 1992 to the present and has served as Secretary
and Treasurer during portions of that time. From August 1991
through June 1994, Mr. Brookner served as Vice President of the
corporate general partner of Therapists Unlimited, L.P., a
predecessor of CareerStaff Unlimited, Inc.
Daniel C. Arnold has been engaged primarily in managing
personal investments since April 1988, except for the period
February 1989 to April 1991, when he served as Chairman of the
Board and Chief Executive Officer of Farm & Home Financial
Corporation and its wholly-owned subsidiary, Farm & Home Savings
Association. In April 1991, Mr. Arnold retired from these
positions, except that he remained Chairman of the Boards until
retiring as such in October 1991. His directorships in these
institutions terminated on June 30, 1994 upon acquisition by
another company. He serves as a Director of Parkway Properties,
Inc., a real estate investment trust whose holdings are
predominately office buildings, and Belco Oil & Gas Corp., an oil
and gas exploration and production company. Mr. Arnold is also the
Chairman of the Board of Trustees of Baylor College of Medicine in
Houston, Texas.
Nelson Broms has been engaged primarily in managing personal
investments for more than the past five years. From August 1993
until June 1994, Mr. Broms was Chairman of the Board of Directors
and Chief Executive Officer of Ultra-Fem, Inc., a consumer products
4<PAGE>
company. Prior thereto, he was Senior Advisor to Primark, Inc., a
company engaged in information systems for financial entities.
Previously a director of Preferred Health Care, Ltd., Mr. Broms
currently serves as Vice Chairman of Cortecs (USA), Inc., a
biotechnology company, and a director of Mastercare Companies,
Inc., a managed-care, workers' compensation group, IQ Systems,
Inc., a computer chip company and Intelisys, an information
company.
George H. Hargrave served as President and Chief Operating
Officer of the Company from April 1992 until May 1994 at which time
he relinquished those responsibilities and was named Vice Chairman
of the Board of Directors. From May 1994 to April 1995, he also was
employed by the Company in the clinic development and operations
areas. From August 1991 through June 1994, Mr. Hargrave served as
President of the corporate general partner of Therapists Unlimited,
L.P., a predecessor of CareerStaff Unlimited, Inc. From 1986
through June 1990, Mr. Hargrave was Senior Vice President and Chief
Operating Officer for Med Rehab, Inc., a Tallahassee, Florida based
company that provided rehabilitation services in nursing homes and
hospitals, and owned and operated outpatient physical therapy
clinics.
James B. Hoover has been a general partner of Welsh, Carson,
Anderson & Stowe, a management buyout firm focused on the
acquisition of health care and information services companies since
November 1992. Prior thereto, Mr. Hoover was a general partner with
the investment banking firm of Robertson, Stephens & Company,
serving initially as a senior medical industry research analyst and
subsequently as manager of the firm's health care corporate finance
group. Mr. Hoover presently serves on the Board of Directors of
Housecall Medical Resources, Inc. and Centennial Healthcare
Corporation. Mr. Hoover served as a special advisor to the Board
of the Company from April 1992 until February 1993, when he was
elected a director of the Company.
Marlin W. Johnston has been a management consultant with Tonn
& Associates since September 1993. During 1992 and 1993, Mr.
Johnston served as a management consultant to the Texas Department
of Health and the Texas Department of Protective and Regulatory
Services.
Richard C.W. Mauran has been engaged primarily in managing
personal investments for more than the past five years. Mr. Mauran
was appointed a director of the Company in August 1993. He also
serves on the Board of Directors of French Fragrances Inc., a
perfume company.
5<PAGE>
Albert L. Rosen retired as President and General Manager of
the San Francisco Giants major league baseball team in December
1992. He had served in such position since September 1985.
Corporate Governance and Other Matters
The Board of Directors has appointed an Audit Committee whose
members currently consist of Messrs. Broms and Johnston. The Audit
Committee is responsible for engaging the Company's independent
auditors and reviewing with them the scope and timing of their
audit services and any other services they are asked to perform,
their report on the Company's financial statements following
completion of their audit and the Company's policies and procedures
with respect to internal accounting and financial controls. The
Audit Committee met three times during 1997.
The Board has a Compensation Committee, the current members of
which are Messrs. Arnold, Rosen and Hoover. The Compensation
Committee reviews matters concerning compensation of employees of
the Company. During 1997, the Compensation Committee held three
meetings.
The Board has a Stock Option Committee, the current members of
which are Messrs. Kosberg and Hargrave. The Stock Option Committee
reviews matters concerning the Company's 1992 Stock Option Plan and
the Executive Option Plan. During 1997, the Stock Option Committee
held two meetings.
In November 1994, the Board of Directors established the
Executive Committee whose members are Messrs. Kosberg, Arnold and
Hoover. The Executive Committee assists management by providing
advice and recommendations when needed and performs such other
services as delegated by the Board of Directors. During 1997, the
Executive Committee did not hold any meetings.
In August 1997, the Board of Directors established the
Corporate Compliance Committee, with Messrs. Broms and Johnston
serving as members. During 1997, the Corporate Compliance
Committee held four meetings.
There is no separate Nominating Committee of the Board of
Directors.
During 1997, the Company's Board of Directors held four
meetings. No incumbent director attended fewer than 75% of the
total number of meetings of the Board of Directors of the Company
and of all committees of the Board of Directors of the Company on
which he served, except Mr. Mauran who attended two of four
meetings.
6<PAGE>
Compensation of Directors
Directors who are also employees of the Company are not
compensated separately for serving on the Board. Each of the
Company's directors who are not employees of the Company received
$3,500 for attendance at each regular meeting of the Board of
Directors. Directors are also reimbursed for their out-of-pocket
travel and related expenses incurred in attending all Board and
committee meetings. In December 1997, Messrs. Arnold, Broms,
Hoover, Johnston, Rosen and Mauran each received ten-year non-
qualified options to purchase 6,000 shares of the Company's common
stock. The exercise price of these options, which were granted
under the Company's 1992 Stock Option Plan, is $11.50 per share.
Mr. Kosberg received $75,000 for serving as Chairman of the Board
in 1997.
EXECUTIVE COMPENSATION
Compensation
The following table shows the compensation paid by the Company
and its subsidiaries during 1997, 1996 and 1995 to the Company's
Chief Executive Officer and the Company's other executive officer
(the "named executive officers").
Summary Compensation Table
Long-Term
Compensation
Annual Compensation Awards
Name and Securities
Principal Fiscal Underlying
Position(s) Year Salary Bonus Options(#)
Roy W. Spradlin (a) 1997 $165,000 $ 35,000 15,000
President and Chief 1996 150,000 30,000 15,000
Executive Officer 1995 125,000 25,000 50,000
Mark J. Brookner 1997 $130,000 $20,000 --
Chief Financial 1996 125,000 20,000 10,000
Officer 1995 110,000 15,000 15,000
(a) Mr. Spradlin became President and Chief Operating Officer in
May 1994. In August 1995, he was named Chief Executive
Officer.
Option Grants
The following table contains information with respect to
grants of stock options to each of the named executive officers
during the year ended December 31, 1997.
7<PAGE>
Option Grants in 1997 Fiscal Year
Individual Grants
Number of
Securities % of Total
Underlying Options Exercise
Options Granted to or Base
Granted Employees In Price Expiration
Name (#)(a) Fiscal Year ($/Sh) Date
Roy W. Spradlin 15,000 20% $9.125 8/20/07
(a) The options vest one-fourth on each of the second, third,
fourth and fifth anniversaries of the date of grant. Vesting
will be accelerated in the event of a "change in control" of
the Company (defined generally as the acquisition of 50% or
more of the Company's outstanding voting stock, a change in a
majority of the Board of Directors or a merger, consolidation
or acquisition of all or substantially all of the assets of
the Company), subject to certain limitations if vesting would
result in adverse tax consequences to the optionee. The
option exercise price equaled the fair market value of a share
of the Company's common stock on the date of grant, as
determined in accordance with the Company's 1992 Stock Option
Plan.
Option Exercises and Holdings
The following table sets forth the 1997 year-end value of all
unexercised in-the-money options held by the named executive
officers. No options were exercised by either of the named
executive officers during 1997.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Value of Securities
Underlying Unexercised
Number of Securities In-the-Money Options
Underlying Unexercised at FY-End ($)(a)
Options At FY-End (#) Exercisable/
Name Exercisable/Unexercisable Unexercisable
Roy W. Spradlin 47,500/112,500 $147,625/$269,750
Mark J. Brookner 31,250/28,750 40,275/54,025
8<PAGE>
(a) Market value of underlying securities at year-end of $11.75
per share minus the exercise or base price of in-the-money
options at year-end.
Employment Agreements
Mr. Spradlin has entered into an amended and restated
employment agreement with the Company dated as of February 24,
1998, which supersedes his amended and restated employment
agreement with the Company dated as of February 21, 1997. Under
his new employment agreement, Mr. Spradlin is employed as President
and Chief Executive Officer for a five-year term ending on February
21, 2002. Pursuant to the terms of his new employment agreement,
Mr. Spradlin's base salary is $165,000, subject to review at least
annually with increases based on performance. Additionally, Mr.
Spradlin is eligible to receive cash bonuses payable at the
discretion of the Board of Directors and, subject to conditions of
eligibility, is entitled to participate in any employee benefit
plans adopted by the Company. Mr. Spradlin's new employment
agreement may be terminated by the Company prior to the expiration
of its five-year term in the event (i) he becomes disabled for 90
consecutive days or (ii) his employment is terminated for "cause"
(as defined in the agreement). In the event that (i) Mr. Spradlin's
employment is terminated without "cause," (ii) the Company sells all
or substantially all of its assets, (iii) more than 50% of the
Company's outstanding common stock is transferred or sold by the
Company's stockholders, (iv) the Company completes a merger or
consolidation in which the stockholders of the Company immediately
prior to the merger or consolidation own less than 50% of the
surviving company or (v) the Company is dissolved in a voluntary or
involuntary dissolution, Mr. Spradlin would be entitled to receive
a lump sum termination/severance benefit equal to one and one-half
times his annual salary plus bonus for the then most recent 12-
month period. Under his new employment agreement, in the event of
his death, Mr. Spradlin's heirs or beneficiaries would become
entitled to receive a payment equal to one year's annual salary.
Mr. Spradlin's new employment agreement further contains a covenant
not to compete during its five-year term and for a one year period
following the termination of his employment.
Certain Transactions
In May 1994, the Company completed the issuance and sale of
$3,000,000 aggregate principal amount of 8% Convertible
Subordinated Notes, Series C due June 30, 2004 (the "Series C
Notes"). The Series C Notes were issued at par in a private
placement to Sloan Financial Corporation ("Sloan Financial"), a
company which is controlled by one of the Company's directors, Mr.
9<PAGE>
Richard C. W. Mauran. The Series C Notes are convertible, at the
option of the holder, into the number of whole shares of common
stock of the Company determined by dividing the principal amount
converted by $10.00, subject to adjustment upon the occurrence of
certain events. Interest on the Series C Notes is payable at a
rate of 8% per annum, payable quarterly. Holders of Series C Notes
also have certain registration rights with respect to the
underlying common shares. Sloan Financial also owns $2,000,000
aggregate principal amount of the Company's 8% Convertible
Subordinated Notes due June 30, 2003 (the "Notes"), which were
issued by the Company at par in June 1993. The conversion price of
the Notes is also $10.00, subject to adjustment as provided in the
Notes. Interest on the Notes is also payable quarterly at an
annual rate of 8%, and holders of the Notes possess certain
registration rights with respect to the underlying shares. See
"Principal Holders of Voting Securities."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and officers to file with the SEC initial
reports of ownership of the Company's equity securities and to file
subsequent reports when there are changes in such ownership. The
Company believes that during 1997 all Section 16(a) filing
requirements applicable to the Company's directors and officers
were complied with on a timely basis, except for two late filings
of Form 4, Statement of Changes in Beneficial Ownership, by Mr.
Broms relating to a total of five transactions.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP acts as the Company's independent public
accountants. Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting. They will be given an
opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
STOCK OWNED BY MANAGEMENT
The following table sets forth information as of April 13,
1998 with respect to the shares of the Company's common stock
beneficially owned by each director of the Company, each of the
named executive officers and by all directors and executive
officers as a group. Except as otherwise indicated, the business
address of each such person is 3040 Post Oak Blvd., Suite 222,
Houston, Texas 77056.
10<PAGE>
Amount and
Nature of Percent of
Name and Address Beneficial Common Stock
of Beneficial Owner Ownership (a) Outstanding
Daniel C. Arnold, Director 173,500(b) 4.73%
1001 Fannin Street,
Suite 720
Houston, TX 77002-6707
Nelson Broms, Director 35,000 *
305 Main Street
Ridgefield, CT 06877
Mark J. Brookner, 117,500 3.22
Chief Financial Officer
and Director
George H. Hargrave, 167,000 4.63
Director
505 Moraine Way
Heath, TX 75087
James B. Hoover, Director 75,000(c) 2.05
Welsh, Carson, Anderson
& Stowe
One World Financial Center,
Suite 3601
New York, NY 10281
Marlin W. Johnston, Director 47,000 1.29
Arboretum Plaza One, #350
9442 Capital of Texas
Highway North
Austin, TX 78759
J. Livingston Kosberg, 498,330(d) 13.80
Chairman of the Board
Richard C.W. Mauran, 532,000(d) 12.84
Director
Sloan Financial Corporation
31 Burton Ct.
Franklins Row
London, SW 3, England
Albert L. Rosen, Director 85,000 2.33
15 Mayfair Drive
Rancho Mirage, CA 92270
11<PAGE>
Roy W. Spradlin, President, 53,750 1.47
Chief Executive Officer
and Director
All directors and 1,784,080 40.08
executive officers as a
group (10 persons)
* Less than 1%.
(a) In accordance with Rule 13d-3 under the Securities Exchange
Act of 1934 (the "1934 Act"), a person is deemed to be the
beneficial owner, for purposes of this table, of any shares of
the Company's common stock if he has or shares voting power or
investment power with respect to such security, or has the
right to acquire beneficial ownership at any time within 60
days from April 13, 1998. As used herein, "voting power" is
the power to vote or direct the voting of shares and
"investment power" is the power to dispose or direct the
disposition of shares. All persons shown in the table above
have sole voting and investment power, unless otherwise
indicated. This table includes 323,250 shares of common stock
subject to outstanding options which are exercisable within 60
days from April 13, 1998. Of such shares, Messrs. Arnold,
Broms, Brookner, Hoover, Johnston, Spradlin, Mauran and Rosen,
hold options to purchase 45,000, 35,000, 42,500, 45,000,
35,000, 53,750, 32,000 and 35,000 shares, respectively. This
table also includes 217,500 shares that can be acquired upon
conversion of $2,175,000 aggregate principal amount of the
Company's outstanding 8% Convertible Subordinated Notes due
June 30, 2003 and 300,000 shares that can be acquired upon
conversion of $3,000,000 aggregate principal amount of the
Company's outstanding 8% Convertible Subordinated Notes,
Series C due June 30, 2004.
(b) Includes 50,000 shares owned by the Arnold Family Limited
Partnership; 16,000 shares owned by the Bintliff 1990 Limited
Partnership; 50,000 shares owned by Arnold 1997 Limited
Partnership; and 12,500 shares that can be acquired upon
conversion of $125,000 aggregate principal amount of the
Company's outstanding 8% Subordinated Notes due June 30, 2003
held by the Arnold Family Limited Partnership. Mr. Arnold is
the managing general partner of the Arnold Family Limited
partnership and the Arnold 1997 Limited Partnership and a
general partner of the Bintliff 1990 Limited Partnership. As
such, he has shared voting and dispositive power over the
shares held by the three partnerships. Mr. Arnold disclaims
beneficial ownership of these securities except to the extent
of his pecuniary interest therein.
12<PAGE>
(c) Includes 5,000 shares that can be acquired upon conversion of
$50,000 aggregate principal amount of the Company's
outstanding 8% Convertible Subordinated Notes due June 30,
2003 owned by Mr. Hoover.
(d) See "Principal Holders of Voting Securities."
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth information as of April 13,
1998 with respect to the ownership of shares of common stock by the
persons known to management to be the beneficial owners of more
than 5% of the Company's outstanding common stock. The information
is based on the most recent statements on Schedule 13D or 13G filed
on behalf of such persons or on other information available to the
Company.
Amount and
Nature of Percent of
Name and Address Beneficial Common Stock
of Beneficial Owner Ownership Outstanding
J. Livingston Kosberg 498,330(a) 13.80%
3040 Post Oak Blvd.,
Suite 222
Houston, Texas 77056
Clarence E. Mayer 337,500(b) 9.35
5847 San Felipe,
Suite 1700
Houston, Texas 77057
Richard C.W. Mauran 532,000(c) 12.84
Sloan Financial
Corporation
31 Burton Ct.
Franklins Row
London, SW 3, England
J. Carlo Cannell d/b/a 187,200(d) 5.18
Cannell Capital Management
750 Battery Street
San Francisco,
California 94111
(a) The Schedule 13G of Mr. Kosberg dated February 16, 1993 states
that such amount includes 56,250 shares held by the Dolores
Wilkenfeld Trust and 442,080 shares held by the Livingston
Kosberg Trust. Mr. Kosberg is the trustee of both trusts and
13<PAGE>
the income beneficiary of the Livingston Kosberg Trust. Mr.
Kosberg does not hold any shares individually in his own name.
The reported share amount excludes 1,170 shares held by Mr.
Kosberg's wife and 48,000 shares held by Mr. Kosberg's three
children and their spouses. Mr. Kosberg disclaims beneficial
ownership of such shares.
(b) The Schedule 13D of Mr. Mayer dated February 16, 1993 states
that he has sole voting and dispositive power over the entire
number of such shares.
(c) Includes 200,000 shares of Company common stock that may be
acquired by Sloan Financial Corporation ("Sloan Financial"),
of which Mr. Mauran is the controlling stockholder, upon
conversion of $2,000,000 aggregate principal amount of the
Company's outstanding 8% Convertible Subordinated Notes due
June 30, 2003 owned by Sloan Financial and 300,000 shares of
Company common stock that may be acquired by Sloan Financial
upon conversion of $3,000,000 aggregate principal amount of
the Company's outstanding 8% Convertible Subordinated Notes,
Series C, due June 30, 2004 owned by Sloan Financial. The
Schedule 13D of Sloan Financial and Mr. Mauran states that
they possess shared voting and shared dispositive power over
the entire number of such shares. Also includes 32,000
director options held by Mr. Mauran.
(d) The Schedule 13D of J. Carlo Cannell d/b/a Cannell Capital
Management ("Cannell") dated July 23, 1997 states that Cannell
has sole voting and dispositive power over the entire number
of such shares.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
TO BE PRESENTED AT 1999 ANNUAL MEETING OF STOCKHOLDERS
Any proposal intended to be presented by any stockholder for
action at the 1999 Annual Meeting of Stockholders of the Company
must be received by the Company on or before December 24, 1998 in
order for the proposal to be considered for inclusion in the proxy
statement and form of proxy relating to the 1999 Annual Meeting.
Nothing in this paragraph shall be deemed to require the Company to
include in its proxy statement and form of proxy relating to the
1999 Annual Meeting any stockholder proposal which does not meet
all of the requirements for inclusion established by the SEC in
effect at the time such proposal is received.
14<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
of the Company does not know of any other matters to be presented
for action by the stockholders at the 1998 Annual Meeting. If,
however, any other matters not now known are properly brought
before the meeting, the persons named in the accompanying proxy
will vote such proxy in accordance with the determination of a
majority of the Board of Directors.
By Order of the Board of Directors
/s/ Mark J. Brookner
Mark J. Brookner
Chief Financial Officer
Houston, Texas
April 23, 1998
15<PAGE>
U.S. PHYSICAL THERAPY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS -- May 19, 1998
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of U.S. Physical Therapy, Inc.
(the "Company") hereby appoints J. Livingston Kosberg and Mark J.
Brookner, and each of them, with full power of substitution in
each, as proxies to cast all votes, as designated below, which the
undersigned stockholder is entitled to cast at the 1998 Annual
Meeting of Stockholders of the Company to be held on Tuesday, May
19, 1998, at 10:00 a.m. (CDT), at the DoubleTree Hotel at Post Oak,
2001 Post Oak Boulevard, Houston, Texas, and at any adjournments
thereof, upon the following matters.
This proxy will be voted as directed by the undersigned
stockholder. UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1 AND
IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF
DIRECTORS AS TO OTHER MATTERS.
The undersigned stockholder hereby acknowledges receipt of the
Notice of Annual Meeting and Proxy Statement, and hereby revokes
any proxy or proxies heretofore given. This proxy may be revoked
at any time before its exercise.
(continued and to be signed and dated on reverse side)
<PAGE>
1. Election of ten directors for one-year terms. Nominees: J.
Livingston Kosberg, Roy W. Spradlin, Mark J. Brookner, Daniel
C. Arnold, Nelson Broms, George H. Hargrave, James B. Hoover,
Marlin W. Johnston, Richard C.W. Mauran and Albert L. Rosen.
FOR all nominees listed WITHHOLD AUTHORITY
above (except as marked to vote for all nominees
to the contrary below). listed.
(INSTRUCTION: To withhold authority to vote for any individual
nominee, print that nominee's name on the space provided below.)
___________________________________________
2. As determined by a majority of the Company's Board of
Directors, the proxies are authorized to vote upon such other
business as may properly come before the meeting, or any
adjournments thereof.
Please date and sign exactly as
name appears hereon and return in
the enclosed envelope.
Date:_________________________
______________________________
Signature of Stockholder or
Authorized Representative
(Only one signature is required
in the case of stock ownership
in the name of two or more
persons.
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