CAPITAL STOCK AND SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

CAPITAL SOCK AND SHARE-BASED COMPENSATION

CAPITAL STOCK AND SHARE-BASED COMPENSATION

We are authorized by our Certificate of Incorporation to issue 60,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value. As of December 31, 2024, there were 38,307,521 and 32,776,148 shares of common stock issued and outstanding, respectively, and no shares of preferred stock issued or outstanding. Our Board of Directors is authorized to fix the dividend rights and terms, conversion and voting rights, redemption rights and other privileges and restrictions applicable to our preferred stock.

Share-Based Awards

On March 29, 2018, our Board of Directors and the Compensation Committee approved, subject to stockholder approval, the Amedisys, Inc. 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”). On June 6, 2018, our stockholders approved the 2018 Plan at the Company's annual meeting of stockholders. The 2018 Plan replaces our 2008 Omnibus Incentive Compensation Plan (the “2008 Plan”), which terminated on June 6, 2018 when the stockholders approved the 2018 Plan. The 2018 Plan, as amended to date, authorizes the grant of various types of equity-based awards, such as stock awards, restricted stock units, stock appreciation rights and stock options to eligible participants, which include all of our employees and all employees of our 50% or more owned subsidiaries, our non-employee directors and certain consultants. The vesting terms of the awards may be tied to continued employment (or, for our non-employee directors, continued service on the Board of Directors) and/or achievement of certain pre-determined performance goals. The 2018 Plan is administered by the Compensation Committee of our Board of Directors, which determines, within the provisions of the 2018 Plan, those eligible participants to whom, and the times at which, awards shall be granted. The Compensation Committee, in its discretion, may delegate its authority and duties under the 2018 Plan to specified officers; however, only the Compensation Committee may approve the terms of awards to our executive officers.

Equity-based awards may be granted for a number of shares not to exceed, in the aggregate, approximately 2.5 million shares of common stock. We had approximately 0.9 million shares available at December 31, 2024. Each equity-based award vests ratably over a one-year to four-year period, with the exception of those issued under contractual arrangements that specify otherwise.

The Company analyzes historical data of forfeited awards to develop an estimated forfeiture rate that is applied to the Company's non-cash compensation expense; however, all non-cash compensation expense is adjusted to reflect actual vestings and forfeitures.

Employee Stock Purchase Plan (“ESPP”)

There have been no purchases under our ESPP plan since the second quarter 2023 offering period as commencement of an offering period after the date of the Merger Agreement is prohibited under the Merger Agreement. Prior to this suspension, eligible employees were able to purchase our common stock at 85% of the market price at the time of purchase. The total number of shares of our common stock authorized for issuance under our ESPP is 4,500,000. The following is a detail of the purchases that were made under the plan:


Employee Stock Purchase Plan Period	Shares Issued	Price
2021 and Prior	3,195,155	$	18.98
January 1, 2022 to March 31, 2022	6,184	146.45
April 1, 2022 to June 30, 2022	10,814	89.35
July 1, 2022 to September 30, 2022	12,047	82.27
October 1, 2022 to December 31, 2022	11,498	71.01
January 1, 2023 to March 31, 2023	14,995	62.52
April 1, 2023 to June 30, 2023	10,915	77.72
July 1, 2023 to December 31, 2024	—	—
	3,261,608

ESPP expense included in general and administrative expense in our accompanying consolidated statements of operations was $0.3 million and $0.7 million for 2023 and 2022, respectively.

Stock Options

The price per share for stock options shall be no less than the greater of (a) 100% of the fair value of a share of common stock on the date the option is granted or (b) the aggregate par value of the shares of our common stock on the date the option is granted. If a stock option is granted to any owner of 10% or more of the total combined voting power of us and our subsidiaries, the price is to be at least 110% of the fair value of a share of our common stock on the date the award is granted. The contractual terms of stock options shall not exceed ten years from the date such option is granted. Stock options may be exercised during a period as determined by our Compensation Committee or as otherwise approved by our Compensation Committee.

We use the Black-Scholes option pricing model to estimate the fair value of our stock options. There were 55,280 and 33,656 options granted during 2023 and 2022, respectively. We did not grant options during 2024. Stock option compensation expense included in general and administrative expenses in our accompanying consolidated statements of operations was $0.9 million, $2.1 million and $1.7 million for 2024, 2023 and 2022, respectively.

The fair values of the stock option awards were estimated using the following assumptions for 2023 and 2022:


	For the Years Ended December 31,
	2024	2023	2022
Risk Free Rate	—	3.45% - 4.06%	1.91%
Expected Volatility	—	43.07% - 43.27%	40.97%
Expected Term	—	6.00 years	6.25 years
Weighted Average Fair Value	—	$39.70	$61.31
Dividend Yield	—	—%	—%

We used the simplified method to estimate the expected term for the stock options granted during 2023 and 2022 as adequate historical experience was not available to provide a reasonable estimate.

The following table presents our stock option activity for 2024:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Contractual Life (Years)
Outstanding options at January 1, 2024	245,338	$	130.82	6.19
Granted	—	—
Exercised	(4,291)	71.72
Canceled, forfeited or expired	(17,725)	161.03
Outstanding options at December 31, 2024	223,322	$	129.56	5.09
Exercisable options at December 31, 2024	180,976	$	133.31	4.43

The aggregate intrinsic value of our outstanding options and exercisable options at December 31, 2024 was $1.0 million and $0.8 million, respectively. Total intrinsic value of options exercised was $0.1 million, $0.2 million and $1.5 million for 2024, 2023 and 2022, respectively. The tax benefit from stock options exercised during the period amounted to less than $0.1 million, $0.1 million and $0.4 million for 2024, 2023 and 2022, respectively.

The following table presents our non-vested stock option activity for 2024:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested stock options at January 1, 2024	72,019	$	58.56
Granted	—	—
Vested	(22,413)	75.11
Forfeited	(7,260)	55.88
Non-vested stock options at December 31, 2024	42,346	$	50.26

At December 31, 2024, there was $0.5 million of unrecognized compensation cost related to stock options that we expect to be recognized over a weighted-average period of 0.9 years.

Non-Vested Stock Units

We refer to restricted stock units subject to service-based or a combination of service-based and performance-based vesting conditions as “non-vested stock units.” We issue non-vested stock unit awards that are service-based, performance-based or a combination of both with vesting terms ranging from one to four years. Based on the terms and conditions of these awards, we determine if the awards should be recorded as either equity or liability instruments. The compensation expense is determined based on the market price of our common stock at the date of grant, applied to the total number of units that are anticipated to vest, unless the award specifies differently. Shares of stock are not issued to the recipient until the stock unit awards have vested and after the pre-determined delivery date has occurred.

Non-Vested Stock Units – Service-Based ("Service-Based Non-Vested Stock Units")

Service-based non-vested stock unit compensation expense included in general and administrative expenses in our accompanying consolidated statements of operations was $27.1 million, $24.2 million and $12.1 million for 2024, 2023 and 2022, respectively.

The following table presents our service-based non-vested stock units activity for 2024:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested stock units at January 1, 2024	498,526	$	98.63
Granted	387,346	93.55
Vested	(169,747)	106.38
Canceled, forfeited or expired	(80,336)	97.41
Non-vested stock units at December 31, 2024	635,789	$	93.62

The weighted average grant date fair value of service-based non-vested stock units granted was $93.55, $81.18 and $115.07 in 2024, 2023 and 2022, respectively.

At December 31, 2024, there was $29.7 million of unrecognized compensation cost related to our service-based non-vested stock units that we expect to be recognized over a weighted average period of 1.8 years.

Non-Vested Stock Units – Service-Based and Performance-Based Awards ("Performance-Based Non-Vested Stock Units")

During 2023, we awarded performance-based awards to certain employees. The target level established by the award, which is based on the Company’s 2023 adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), provided for the recipients to receive an aggregate of 52,073 non-vested stock units if the target was achieved. For a select group of employees, if the target objective was surpassed to the point of achieving the projected maximum payout, the recipients would receive an additional aggregate of 51,756 non-vested stock units. The 2023 performance-based objective established by the award was satisfied at 127.23%. The number of non-vested stock units that were earned based on achievement of the Adjusted EBITDA measure will be adjusted upward or downward (from 75% to 125%) based on the Company’s three-year relative total shareholder return ("TSR") and will cliff vest after the end of the three-year performance period ending December 31, 2025.

Additionally, in connection with the appointment of our new chief executive officer, we awarded 62,641 performance-based non-vested stock units (at the target level of performance) to Mr. Ashworth on April 12, 2023, which will cliff vest on April 12, 2028, assuming Mr. Ashworth remains continuously employed on such date. The number of non-vested stock units that may be earned for this award is based on the Company's volume-weighted average price ("VWAP") market cap at the end of a three-year performance period to be determined as of December 31, 2025, with an actual payout of 50% to 300% of the target number of performance-based non-vested stock units, depending on the level of performance achieved once a threshold level of performance is met.

Performance-based non-vested stock units compensation expense included in general and administrative expenses in our consolidated statements of operations was $2.6 million, $2.4 million and $2.2 million for 2024, 2023 and 2022, respectively.

The following table presents our performance-based non-vested stock units activity for 2024:


	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested stock units at January 1, 2024	121,228	$	88.96
Granted	—	—
Vested	(6,525)	209.92
Canceled, forfeited or expired	(6,880)	104.17
Non-vested stock units at December 31, 2024	107,823	$	80.67

The weighted average grant date fair value of performance-based non-vested stock units granted was $82.00 and $133.70 in 2023 and 2022, respectively. We did not grant performance-based non-vested stock units during 2024.

At December 31, 2024, there was $5.8 million in unrecognized compensation costs related to our performance-based non-vested stock units that we expect to be recognized over a weighted average period of 2.4 years.

AMEDISYS INC 10-K