Equity Based Plans

12 Months Ended

Dec. 31, 2025

17. Equity Based Plans

U.S. Physical Therapy Stock Incentive Plans

Amended and Restated 1999 Employee Stock Option Plan

The Amended and Restated 1999 Employee Stock Option Plan (the “Amended 1999 Plan”) permits the Company to grant to non-employee directors and employees of the Company up to 600,000 non-qualified options to purchase shares of common stock and restricted stock (subject to proportionate adjustments in the event of stock dividends, splits, and similar corporate transactions). The exercise prices of options granted under the Amended 1999 Plan are determined by the Compensation Committee. The period within which each option will be exercisable is determined by the Compensation Committee.

Amended and Restated 2003 Stock Option Plan

The Amended and Restated 2003 Stock Option Plan (the “Amended 2003 Plan”) permits the Company to grant to key employees and outside directors of the Company incentive and non-qualified options and shares of restricted stock covering up to 2,600,000 shares of common stock (subject to proportionate adjustments in the event of stock dividends, splits, and similar corporate transactions). As of December 31, 2025, there were 0.3 million shares remaining that can be subject to new awards under the Amended 2003 Plan.

Stock-based compensation expense related to the Amended 1999 Plan and Amended 2003 Plan was approximately $8.3 million, $7.8 million, and $7.7 million for the years ended December 31, 2025, 2024 and 2023 respectively. As of December 31, 2025, the remaining $11.7 million compensation expense will be recognized over a weighted average period of 2.47 years.

Restricted Stock Awards

During 2025, 2024 and 2023, the Company granted the following shares of restricted stock to directors, officers, and employees pursuant to its equity plans as follows:

			Weighted Average Fair
Year Granted	Number of Shares		Value Per Share
2025		110,079	$	88.98
2024		90,810	$	101.30
2023		73,384	$	102.79

During 2025, 2024 and 2023, the following shares were cancelled due to employee terminations prior to restrictions lapsing:

			Weighted Average Fair
Year Cancelled	Number of Shares		Value Per Share
2025		578	$	94.98
2024		2,339	$	103.81
2023		4,086	$	103.99

Generally, restrictions on the stock granted to employees lapse in equal annual installments on the following four anniversaries of the date of grant. For those shares granted to directors, the restrictions will lapse in equal quarterly installments during the first year after the date of grant. For those granted to officers, the restriction will lapse in equal quarterly installments during the four years following the date of grant.

There were 164,163 and 140,276 shares outstanding as of December 31, 2025, and December 31, 2024, respectively, for which restrictions had not lapsed. The restrictions will lapse from 2026 through 2029.

Metro Equity Incentive Plan

The MSO Metro LLC 2024 Incentive Plan (“Metro Plan”) was approved on October 31, 2024. The Metro Plan permits MSO Metro to grant to employee participants up to 5,000 Units of MSO Metro upon the attainment of certain EBITDA thresholds, subject to continuous employment. Upon vesting, the Units will contain both a call right and a put right at a fixed price based on the level of EBITDA that is reached. As the Units are subject to repurchase upon issuance at a fixed purchase price, the share-based compensation is classified as a liability.

The following table summarizes the Metro Plan activity during the years ended December 31, 2025 and December 31, 2024:

	Number of Units		Grant-Date Fair Value per Unit
Unvested as of January 1, 2024		-		-
Granted		4,650		1,530
Vested		-		-
Unvested as of December 31, 2024		4,650		1,530
Granted		-		-
Vested		-		-
Unvested as of December 31, 2025		4,650		1,530

The Company recognized $0.7 million of compensation expense related to the Metro Plan for the twelve months ended December 31, 2025. During the same period the fair value of the associated liability decreased $3.2 million. Unrecognized compensation expense related to the Metro Plan was $2.1 million as of December 31, 2025, to be amortized over a remaining period of approximately 4.0 years. There were no forfeitures during the twelve months ended December 31, 2025.