DEF 14A: ATI Physical Therapy Sets Date for 2024 Annual Stockholders Meeting, Proposes Equity Incentive Plan Amendment

Sentiment:

Proxy Statement 26 April 2024 5:09 PM

📋All filings for Ati Physical Therapy, INC

ATI Physical Therapy will hold its 2024 Annual Meeting of Stockholders virtually on June 12, 2024, to vote on key proposals including director elections, auditor ratification, executive compensation, and an amendment to the equity incentive plan.

Summary

ATI Physical Therapy, Inc. will hold its 2024 Annual Meeting of Stockholders virtually on June 12, 2024, at 1:00 p.m. Central Time.
Stockholders of record as of April 15, 2024, are entitled to vote.
The meeting will address the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
Stockholders will elect nine directors for one-year terms.
There will be a non-binding advisory vote on the compensation of the Named Executive Officers.
Stockholders will vote on an amendment to the ATI Physical Therapy, Inc. 2021 Equity Incentive Plan to increase the number of shares available for issuance thereunder by 4,500,000 shares.
The Board of Directors recommends voting 'For' all proposals.
The proxy statement and annual report are available online at www.virtualshareholdermeeting.com/ATIP2024.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The company is seeking approval for routine matters and an amendment to the equity incentive plan, which suggests a positive outlook for attracting and retaining talent.

Positives

The company is providing stockholders with a virtual meeting option to increase access and reduce costs.
The Board is recommending 'For' votes on all proposals, indicating confidence in their strategic direction.
The company has a declassified Board of Directors, with directors being elected for one-year terms.

Risks

Failure to approve the amendment to the equity incentive plan could limit the company's ability to attract and retain key personnel.
The company's stock is subject to market fluctuations, as evidenced by the discussion of total shareholder return in the pay versus performance section.
The company is subject to various regulations and compliance requirements, including those related to healthcare, cybersecurity, and data privacy.

Future Outlook

The company is seeking to increase the number of shares available under the 2021 Equity Incentive Plan to ensure its ability to continue granting stock options and other awards, which are vital to its ability to attract and retain outstanding and highly skilled individuals.

Industry Context

The document provides insight into the corporate governance practices of a publicly traded healthcare company, including board composition, committee structures, and executive compensation. It also touches on the company's commitment to corporate social responsibility and its engagement with stakeholders.

Comparison to Industry Standards

The document mentions several peer companies used for executive compensation benchmarking, including Acadia Healthcare Company, Inc., Option Care Health, Inc., and U.S. Physical Therapy, Inc.
The discussion of director independence aligns with NYSE listing rules and SEC regulations.
The company's clawback policy is in line with Dodd-Frank Act requirements.
The document references Section 409A of the Code, indicating awareness of deferred compensation regulations.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Declassification	The company has a declassified Board of Directors, with directors being elected for one-year terms.	2023 Annual Meeting	The phasing in of annual elections of directors over this period is designed so that the term of any incumbent director will not be shortened, and to ensure a smooth transition to annual elections of all our directors over time.
Termination of Stockholders Agreement	Our Stockholders Agreement with the Advent Stockholders was terminated and Advent no longer has the right to designate director nominees for election to our Board.	June 15, 2023	Advent no longer has the right to designate director nominees for election to our Board.
Preferred Equityholders Rights	Our Preferred Equityholders have the right to appoint three additional directors to our Board (resulting in the right of the Preferred Equityholders to appoint a total of four directors to the Board).	June 15, 2023	The holders of Series A Preferred Stock designated Randy Raisman and Andrew Shannahan as their additional designees, and the Board appointed Mr. Raisman and Mr. Shannahan to the Board effective June 15, 2023.
Compensation Clawback Policy	The Company adopted a compensation Clawback Policy to comply with recently adopted rules of the NYSE, which require the recovery of certain forms of executive compensation in the case of accounting restatements resulting from a material error in an issuers financial statements.	November 2023	Pursuant to the terms of our Clawback Policy for Covered Executives (as defined in the Policy), if we are required to file an accounting restatement with the SEC to correct an error in previously issued financial statements, then we will recover (reimbursement or forfeiture) from any Covered Executives, any Incentive Compensation (as defined in the Policy) received by such Covered Executives during the last three fiscal years that exceeds the amount of Incentive Compensation that otherwise would have been received by the Covered Executives had it been determined based on the restated amounts.

Related Party Transactions

On June 15, 2023, the Company completed a debt restructuring transaction (the 2023 Debt Restructuring) including: (i) a delayed draw new money financing in an aggregate principal amount of $25.0 million, comprised of (A) 2L Notes and (B) shares of Series B Preferred Stock (the Series B Preferred Stock), which will provide the holder thereof with voting rights such that the holders thereof will have the right to vote on an as-converted basis, (ii) the exchange of $100.0 million of the aggregate principal amount of the term loans under the 2022 Credit Agreement (as defined below) held by certain of its Preferred Equityholders for 2L Notes and Series B Preferred Stock and (iii) certain other changes to the terms of the credit agreement, dated as of February 24, 2022, by and among by and among ATI Holdings Acquisition, Inc., Wilco Intermediate Holdings, Inc., Barclays Bank PLC, as Administrative Agent and Issuing Bank and the other lenders party thereto (as amended, the 2022 Credit Agreement), including modifications of the financial covenants thereunder and relief from the requirements related to the delivery of independent audit reports without a going concern explanatory paragraph.
Based on the voting rights associated with the Series B Preferred Stock attached to the 2L Notes as well as other terms to the 2023 Debt Restructuring, the Company determined that each of Knighthead, MAM and Onex Credit Partners, LLC (Onex Credit) became a related party on the Closing Date.
Andrew Shannahan, a member of our Board, is a Partner at Knighthead.
Randy Raisman, a member of our Board, is a Managing Director at MAM.
On the Closing Date, an additional $3.2 million of 2L Notes with stapled Series B Preferred Stock were issued in connection with the 2023 Debt Restructuring.
In connection with the 2023 Debt Restructuring, Knighthead, MAM and Onex Credit collectively exchanged a principal amount of $100.0 million of the Companys senior secured term loan for $100.0 million of 2L Notes stapled with a number of shares of Series B Preferred Stock.
Of the $100.0 million of 2L Notes issued, approximately $50.8 million were issued to Knighthead, $40.4 million were issued to MAM, and $8.8 million were issued to Onex Credit.

Stakeholder Impact

Approval of the equity incentive plan amendment could positively impact employees by providing them with additional opportunities for equity ownership.
The outcome of the advisory vote on executive compensation could influence future compensation decisions.
The election of directors will shape the company's leadership and strategic direction.
The ratification of the independent auditor ensures the integrity of the company's financial reporting.

Next Steps

Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
The company will hold its Annual Meeting of Stockholders on June 12, 2024.
The Board of Directors will consider the outcome of the advisory vote on executive compensation when making future decisions.

Key Dates

Date	Description
February 21, 2021	Date of the Merger Agreement between Wilco Holdco, Inc., and Fortress Value Acquisition Corp. II (FAII).
June 16, 2021	Business Combination Closing Date; Stockholders Agreement became effective.
June 17, 2021	ATI Physical Therapy, Inc. became a public company.
February 24, 2022	Issuance of Series A Senior Preferred Stock.
April 28, 2022	John Larsen ceased serving as Principal Executive Officer.
June 2, 2022	Annual meeting of stockholders approved an amendment to the Companys 2021 Plan.
June 15, 2023	Closing Date of the 2023 Debt Restructuring.
June 26, 2023	Schedule 13D filed by Onex Corporation.
June 27, 2023	Schedule 13D filed by Caspian Capital LP.
July 10, 2023	Form 3 filed by Advent International GP, LLC.
June 13, 2023	Stockholders approved an amendment to the Companys 2021 Plan.
February 8, 2024	Amendment No. 5 to the Schedule 13D filed by Knighthead Capital Management, LLC.
February 8, 2024	Amendment No. 1 to the Schedule 13D filed by Marathon Asset Management GP, L.L.C.
February 27, 2024	Filing of the Companys Annual Report on Form 10-K for the year ended December 31, 2023.
March 31, 2024	Date for security ownership information.
April 15, 2024	Record date for the Annual Meeting.
April 25, 2024	Board of Directors adopted the amendment to the 2021 Plan.
April 26, 2024	Proxy statement and form of proxy first made available to stockholders.
May 30, 2024	Date on or before which certain stock options will become exercisable.
June 11, 2024	Deadline for submitting votes by telephone or through the Internet (11:59 p.m. Eastern Time).
June 12, 2024	Date of the 2024 Annual Meeting of Stockholders (1:00 p.m. Central Time).
February 12, 2025	Earliest date for stockholders to submit notice of nominations or other proposals for the 2025 annual meeting.
March 14, 2025	Latest date for stockholders to submit notice of nominations or other proposals for the 2025 annual meeting.
April 11, 2025	Deadline for stockholders to provide notice of intent to solicit proxies in support of director nominees other than the Company's nominees.

Keywords

Annual Meeting, Proxy Statement, Stockholders, Board of Directors, Equity Incentive Plan, Executive Compensation, Director Election, Deloitte & Touche LLP, Audit Committee, Corporate Governance, ATI Physical Therapy

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