EXHIBIT
10.3
 
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is entered into and
effective as of the 9th day of February, 2016, by and between U. S. Physical
Therapy, Inc. a Nevada corporation ("Employer"), and Glenn D. McDowell
("Employee"), and supersedes that certain Employment Agreement between the
parties effective May 24, 2007, as amended March 8, 2013.  Employer and Employee
may be referred to herein collectively as the "Parties" and individually as a
"Party."  For the purposes of this Agreement, "Employer" includes U.S.P.T.
Management, Inc.; for the purposes of Sections 10, 11, and 12 "Employer" shall
include all subsidiaries and affiliates (as defined under the Securities
Exchange Act of 1934, as amended and regulations promulgated thereunder)
Section 1.                          Term.  Employer hereby continues the
employment of Employee and Employee hereby accepts continued employment with
Employer for a two-year term (the "Term") commencing as of January 1, 2016.  The
Term shall automatically renew as of the end of each expiring Term for an
additional two-year period.  For purposes hereof, the "Term" shall refer to the
current Term and any renewal of such Term.
Section 2.                          Duties of Employee.  Employee is engaged to
serve as Chief Operating Officer of Employer and to perform such duties and
responsibilities as are customarily performed by persons acting in such capacity
or such other duties as may be assigned by Employer from time to time.  Employee
shall report to the Employer's President and Chief Executive Officer and shall
perform his duties in accordance with the policies and objectives established by
Employer.
Section 3.                          Full-Time Employment.  Employee shall devote
substantially all of his working time and talent to the business of Employer
during the term hereof and shall diligently and to the best of his ability
perform all duties incident to his employment hereunder, using his best efforts
to promote the interests of Employer.  Employee agrees that he shall not serve
as an officer, director, consultant, or employee of any other person or entity,
whether or not for compensation, without the prior consent of the Employer's
Board of Directors.
Section 4.                          Base Compensation.  Subject to the terms and
conditions of this Agreement, as compensation for services rendered and
Employee's covenants and agreements under this Agreement, Employer shall pay to
Employee a base salary of FOUR HUNDRED THOUSAND AND NO/100THS DOLLARS
($400,000.00) per year (as adjusted from time to time, the "Base Compensation"),
payable in accordance with Employer's then-prevailing pay practices.  From time
to time (but at least once a year) Employer and Employee shall review Employee's
performance, and at that time Employer, in its sole discretion, shall determine
whether Employee's Base Compensation should be increased.  At no time during the
Term hereof will Employee's Base Compensation be decreased, without the express
written consent of Employee.
Section 5.                          Additional Compensation.  Subject to the
terms and conditions of this Agreement, in addition to the Base Compensation,
Employer may provide incentive compensation in the form of cash bonuses and
other incentive awards, including stock options and restricted shares.  The
amount of any cash bonus and the award of any additional stock options or
restricted shares is completely discretionary and will be determined solely by
the Board of Directors of Employer or a compensation committee thereof, taking
into consideration any factor the Board of Directors or compensation committee
deems relevant.
Section 6.                          Business Expenses.  Employer shall reimburse
Employee for business expenses directly and reasonably incurred in the
performance of his duties.
Section 7.                          Benefits and Plans.  Employee shall be
entitled to fringe benefits, including vacation days, sick and personal days and
company holidays pursuant to the Employer's paid time off plan as per the
Employer's employee handbook, and insurance (health, disability and life), and
Employee shall be entitled to participate, subject to all conditions of
eligibility, in any employee benefit plans which may be adopted by Employer,
including without limitation, qualified retirement plan(s), deferred
compensation plans, and salary continuation, disability insurance,
hospitalization insurance, major medical insurance, medical reimbursement and
life insurance benefit plans.  Also, Employer shall continue Employee's monthly
salary for a period of up to ninety (90) continuous days during any period of
Employee's sickness or disability.
Section 8.                          Termination.  This Agreement shall terminate
prior to the expiration of the Term hereof upon the occurrence of any one of the
following events:
(a)
Disability.  In the event that Employee is unable fully to perform his duties
and responsibilities hereunder to the full extent required by Employer by reason
of illness, injury or incapacity for ninety (90) consecutive days, this
Agreement may be terminated by Employee or Employer; provided, however, that
Employee shall continue to be compensated as provided in this Agreement during
such ninety- (90) day period and until termination under this Section 8 and
Employee also shall be paid, in a lump sum, a special benefit equal to two (2)
year's Base Compensation, and all Restricted Stock owned by Employee shall
immediately become Vested Shares, as such term is defined in the applicable
grant agreement and plan documents; and, provided further, that Employee will be
entitled to receive the benefits, rights and/or payments prescribed under any
employee welfare or benefit plan in which Employee was participating at the time
of such disability in accordance with the terms and conditions of such plans. 
In the event of any dispute under this Section 8, Employee shall submit to a
physical examination by a licensed physician selected by Employer and reasonably
acceptable to Employee.

(b)
Death.  In the event that Employee dies during the term hereof, Employer shall
pay to his executors, legal representatives or administrators an amount equal to
one (1) year's Base Compensation, and thereafter Employer shall have no further
liability or obligation hereunder to Employee's executors, legal
representatives, administrators, heirs or assigns or any other person claiming
under or through Employee; provided, however, that all Restricted Stock owned by
Employee shall immediately become Vested Shares, as such term is defined in the
applicable grant agreement and plan documents, and Employee's heirs, legal
representatives or administrators will be entitled to receive the benefits,
rights and/or payments prescribed under any employee welfare or benefit plans in
which Employee was participating at the time of his death in accordance with the
terms and conditions of such plans.

(c)
Cause.  Nothing in this Agreement shall be construed to prevent its termination
by Employer at any time for "cause".  For purposes of this Agreement, "cause"
shall mean (i) the willful and material failure of Employee to perform or
observe (other than by reason of disability as contemplated in paragraph 9(a))
any of the terms or provisions of this Agreement, including the failure of
Employee to follow the reasonable written directions of Employer's President and
Chief Executive Officer or Board of Directors, (ii) dishonesty or misconduct on
the part of Employee that is or is reasonably likely to be damaging or
detrimental to the business of Employer, (iii) conviction of a crime involving
moral turpitude, (iv) habitual insobriety or failure to perform duties due to
abuse of alcohol or drugs, or (v) misappropriation of funds.  Prior to
terminating this Agreement on account of Employee's failure to perform or
observe any of the terms and conditions of this Agreement (but not for any of
the other enumerated "causes" stated in (ii) through (v) above), Employer shall
give Employee thirty (30) days written notice and an opportunity to cure such
failure to the satisfaction of Employer.  Upon termination for cause, Employer
shall pay to Employee all sums due to Employee through the date of such
termination.  Following such a termination, Employer shall have no further duty
or obligation to Employee; provided, however, that Employee shall continue to be
bound by Sections 10 through 16.

(d)
Voluntary Resignation by Employee not for good reason.  Upon a voluntary
resignation by Employee not "for good reason" as defined in Section 9 F. herein,
Employer shall pay to Employee all sums due to Employee through the date of such
termination.  Following such a termination, Employer shall have no further duty
or obligation to Employee; provided, however, that Employee shall continue to be
bound by Sections 10 through 16.

Section 9.                          Special Benefits.
A.            Special Benefit in the Event of a Change in Control.  Employee
shall be entitled to a Change of Control benefit of $283,333 in the event of a
"Change in Control", defined as:
(a)
The transfer or sale by Employer of all or substantially all of the assets of
Employer whether or not this Agreement is assigned or transferred as a part of
such sale;

(b)
The transfer or sale of more than fifty percent (50%) of the outstanding shares
of Common Stock of Employer;

(c)
A merger or consolidation involving Employer in a transaction in which the
shareholders of Employer immediately prior to the merger or consolidation own
less than fifty percent (50%) of the company surviving the merger or
consolidation; or

(d)
A merger or consolidation involving Employer in a transaction in which the board
members of Employer after the merger or consolidation constitute less than fifty
percent (50%) of the board of the company surviving the merger or consolidation;
or

(e)
The voluntary or involuntary dissolution of Employer.

B.            In addition, in the event of a Change in Control, all Restricted
Stock owned by Employee shall immediately become Vested Shares, as such term is
defined in the applicable grant agreement and plan documents. Special Benefit in
the Event of Termination Without Cause or Resignation for Good Cause.
In the event of the termination of employment of Employee by Employer without
"cause" as cause is defined in Section 8(c) hereof, or the resignation of
employment by Employee  "for good reason" as defined in Section 9 F. hereof (in
either case, a "Termination Event"), Employee shall be entitled to the following
special benefits:
(i)  Two (2) years' Base Compensation; and
(ii) The greater of (i) the bonus paid or payable to Employee with respect to
last fiscal year of Employer completed prior to the occurrence of the
Termination Event or (ii) the average of the bonuses paid to Employee over the
three (3) fiscal years of Employer ending with last fiscal year of Employer
completed prior to the occurrence of the Termination Event; and
(iii) Employee's accrued but unused vacation days; and
(iv)            All Restricted Stock owned by Employee shall immediately become
Vested Shares, as such term is defined in the applicable grant agreement and
plan documents
The aggregate dollar amount of the special benefits described in subsections (i)
and (ii) above shall be aggregated and paid ratably on a bi-weekly basis over
the 24 month period following the Termination Event. If a Change in Control has
occurred prior to a Termination Event, Employee shall also be entitled to the
special benefits under this Section 9 B.
C.            Employee's accrued but unused vacation days shall be paid to
Employee within thirty (30) days of the actual date of the termination of
Employee's employment.
D.            In the event Employee's employment is terminated (whether by
Employer or Employee) as a result of a Termination Event, Employee shall be
entitled to such medical insurance benefits as he enjoyed prior to his
termination for the twenty-four months following such termination and at the
same cost to Employee of such benefits as in effect prior to such termination.
E.            Employee shall be entitled to the Change in Control benefit
specified in Section 9 A. only if he remains an employee of Employer to the date
of consummation of the Change in Control, unless Employee is terminated within
six (6) months prior to such date pursuant to a Termination Event or as the
result of disability or death as provided in Sections 8(a) and (b).  Should any
special benefits provided in this Section 9 become payable, the covenants
contained in Sections 10 through 16 hereof shall continue to apply, and should
Employee violate the terms of such covenants Employer may, in addition to any
legal or equitable remedies, cease payment of the benefits and terminate any and
all future payments otherwise called for under this Section 9.
F.            For purposes of this Agreement, "for good reason" means the
occurrence of any one or more of the following: (i) removal or other termination
of Employee as the Chief Operating Officer of Employer, without Employee's
express written consent; (ii) a reduction of Employee's duties, authority or
responsibilities or the assignment to Employee of such reduced duties, authority
or responsibilities, in either case without Employee's express written consent,
(iii) a reduction by Employer in Employee's Base Compensation without Employee's
express written consent; or (iv) the relocation of Employee to a facility or a
location more than 30 miles from Employee's then present office location without
Employee's express written consent.
Section 10.                          Non-Competition.  At all times that
Employee remains employed by the Employer and for a two (2) year period
following the termination of his employment under this Agreement for any reason,
Employee shall not, directly or indirectly, for himself or on behalf of any
other person or entity as an employee, employer, consultant, agent, lender,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, (i) invest, engage in, or permit his name
to be used in connection with any business that is in competition with Employer,
(ii) accept employment with or render services to a competitor of Employer, as a
director, officer, agent partner, employee or consultant, or (iii) solicit or
accept from any of the customers of Employer or from any person or entity whose
business Employer is soliciting, any business of the type which Employer is
engaged in or in which Employer is actively preparing to so engage, in each case
described in clauses (i), (ii) or (iii), within the Territory.  Employee shall
be prohibited from engaging in the activities described above within, or with
respect to any business in competition with the Employer located within, fifty
(50) miles of any of Employer's rehabilitation clinic locations (the
"Territory").
Notwithstanding the foregoing, Employee may own the voting common stock of any
publicly held corporation so long as it does not exceed more than five percent
(5%) of the outstanding stock thereof.
Section 11.                          Non-Solicitation.  For a two (2) year
period following the termination of the employment of the Employee under this
Agreement for any reason, Employee agrees not to, directly or indirectly, for
himself or on behalf of any other person or entity (a) solicit or induce, or
attempt to solicit or induce, any person employed by, or any agent of, Employer,
to terminate employee's or agent's relationship with Employer, nor (b) call on,
solicit or divert, or attempt to call on, solicit or divert any person, firm,
corporation or other entity who was or had been a customer or a patient referral
source (including, without limitation, any physician) of Employer who referred
ten or more customers or patients to Employer, who is a customer or a patient
referral source of Employer who has referred ten or more customers or patients
to Employer, or who is a prospective customer or a patient referral source of
Employer with whom Employee had contact as an employee of Employer and who,
within six months of such solicitation, Employer was or is actively recruiting
as a customer or patient referral source.
Section 12.                          Confidential Information.  Employee will
not, during or after the termination of this Agreement, disclose any trade
secrets, financial and accounting information, customer lists, customer mailing
lists, prospective customer lists, lists of referral sources or prospective
referral sources, or pricing, marketing or advertising plans or methods used by
Employer (the "Confidential Information") to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, nor shall
Employee make use of the Confidential Information for his own purposes or for
the benefit of any person, firm, corporation or other entity (except Employer)
under any circumstances during or after the termination of this Agreement.  On
demand of Employer, at any time, Employee shall immediately deliver all printed
or written Confidential Information to Employer.  To the extent that Employee's
property does not contain Confidential Information, Employee may remove all of
Employee's property (such as computer software and tapes) upon termination of
this Agreement.  Confidential Information does not include information that (i)
currently is generally available to or known by the public or hereafter becomes
generally available to or known by the public through no fault of Employee, (ii)
was already in the possession of Employee on the date of inception of Employee's
employment by Employer, or (iii) is obtained by Employee from a third party who
is under no obligation of confidence to Employer.
Section 13.                          Reasonableness of Restrictions.  Employee
agrees that (a) the covenants contained in Sections 10, 11 and 12 hereof are
necessary for the protection of Employer's business goodwill and trade secrets,
(b) a portion of the compensation paid to Employee under this Agreement is paid
in consideration of the covenants herein contained, the sufficiency of which
consideration is hereby acknowledged, and if the scope of any restriction
contained in Sections 10, 11 and 12 is too broad to permit enforcement of such
restriction to its full extent, then such restriction shall be enforced to the
maximum permitted by law, and the parties hereby consent that such scope may be
judicially modified accordingly in any proceeding brought to enforce such
restriction.
Section 14.                          Enforcement.  Employee acknowledges
Employee's employment with Employer is special and unique in character and that
Employee will acquire special skill and training and gain special knowledge
during Employee's employment with Employer, that the restrictions contained in
Sections 10, 11 and 12 hereof are reasonable and necessary to protect the
legitimate interests of Employer and its affiliates, that Employer would not
have entered into this Agreement in the absence of such restrictions, and that
any violation of any provision of those Sections will result in irreparable
injury to Employer.  Employee also acknowledges that Employer shall be entitled
to preliminary and permanent injunctive relief, without the necessity of proving
actual damages as well as an equitable accounting of all earnings, profits and
other benefits arising from any such violation, which rights shall be cumulative
and in addition to any other rights or remedies to which Employer may be
entitled.  The existence of any claim or cause of action of Employee against
Employer, whether predicated on this Agreement or otherwise,  shall not
constitute a defense to the enforcement by Employer of these covenants, except
for Employer's breach of this Agreement relating to its payment obligations to
Employee after the termination of Employee's employment under the terms of this
Agreement.
Section 15.                          Copy of Covenants.  Until the expiration of
the applicable restrictions, Employee will provide, and Employer similarly may
provide, a copy of the covenants contained in Sections 10, 11 and 12 of this
Agreement to any business or enterprise which Employee may (i) directly or
indirectly own, manage, operate, finance, join, control or participate in the
ownership, management operation, financing, or control of, (ii) serve as an
officer, director, employee, partner, principal, agent, representative,
consultant, lender or otherwise, or (iii) with which he may use or permit his
name to be used.
Section 16.                          Special Definition of Employer.  For the
purposes of Sections 10 through 15 above, the definition of Employer shall
include any subsidiary or affiliate of Employer, including all affiliated
physical therapy partnerships of Employer.
Section 17.                          Notices.  Any notices to be given hereunder
by either Party to the other may be effected in writing either by personal
delivery, via facsimile or by mail, registered or certified, postage prepaid
with return receipt requested:
If to Employer:
U.S. Physical Therapy, Inc.
 
1300 West Sam Houston Parkway South
 
Suite 300
 
Houston, Texas 77042
 
Attention: Chairman of the Board
   
If to Employee:
Glenn D. McDowell
 
12870 Kingsbridge Lane
Houston, Texas 77077
   

Mailed notices shall be addressed to the Parties at the addresses set forth
above, but each Party may change the address by written notice in accordance
with this Section 17.  Notices delivered personally or by facsimile shall be
deemed communicated upon actual receipt.  Mailed notices shall be deemed
communicated three (3) days after mailing.
Section 18.                          Entire Agreement.  This Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Employee by Employer, and
contains all of the covenants and agreements between the parties with respect to
such employment in any manner whatsoever.
Section 19.                          Headings.  The headings or titles to
sections in this Agreement are intended solely for convenience and no provision
of this Agreement is to be construed by reference to the heading or title of any
section.
Section 20.                          Amendment or Modification; Waiver.  No
provision of this Agreement may be amended, modified or waived unless such
amendment, modification or waiver is authorized by Employer and is agreed to in
writing, signed by Employee and by an officer of Employer (other than Employee)
thereunto duly authorized.  Except as otherwise specifically provided in this
Agreement, no waiver by any Party hereto of any breach by any other Party hereto
of any condition or provision of this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar provision or condition
at the same or at any prior or subsequent time nor shall the receipt or
acceptance of Employee's employment be deemed a waiver of any condition or
provision hereof.
Section 21.                          Assignability.  Employee shall not assign,
pledge or encumber any interest in this Agreement or any part thereof without
the express written consent of Employer, this Agreement being personal to
Employee.  This Agreement shall, however, inure to the benefit of Employee's
estate, dependents, beneficiaries and legal representatives.  This Agreement
shall not be assignable by Employer without the written consent of Employee
which will not be unreasonably withheld.  Subject to the terms of this
Agreement, Employer may merge or consolidate with or into, or transfer
substantially all of its assets to, another corporation or other form of
business organization without Employee's consent, and as a result of such
merger, consolidation or transfer, this Agreement shall bind the successor of
Employer resulting from such merger, consolidation or transfer.  No such merger,
consolidation or transfer, however, shall relieve the Parties from liability and
responsibility for the performance of their respective duties and obligations
hereunder.
Section 22.                          Governing Law.  This Agreement shall be
interpreted, construed and governed by and in accordance with the internal
substantive law of the State of Texas.
Section 23.                          Severability.  Each provision of this
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof.  In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect, and in substitution for any such provision held unlawful,
there shall be substituted a provision of similar import reflecting the original
intent of the Parties hereto to the extent permissible under law.

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day first
written above.

EMPLOYER:
 
U.S. PHYSICAL THERAPY, INC.

  
/s/ Jerald L. Pullins

By:    Jerald L. Pullins
 
Chairman of the Board of Directors
 
 
EMPLOYEE:
 
/s/ Glenn D. McDowell
 
GLENN D. McDOWELL