TIPTREE INC.
10-Ks and 10-Qs
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934 (Amendment
No. )
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to § 240.14a-12
Care Investment Trust Inc.
(Name of Registrant as Specified in
its Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No
fee required.
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: |
| o | Fee paid previously with preliminary materials. |
| o | 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: |
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September 30,
2011
Dear Stockholder:
You are invited to attend the annual meeting of stockholders of
Care Investment Trust Inc. This year’s meeting will be
held on Thursday, November 3, 2011, at 10:00 a.m.,
Eastern Daylight Time, at the Care Investment Trust Inc.
corporate offices located at 780 Third Avenue, 29th Floor, New
York, NY 10017.
On or about September 30, 2011, we are delivering the
attached proxy statement, with the accompanying formal notice of
the meeting, which describes the matters expected to be acted
upon at the meeting. We urge you to review these materials
carefully and to take part in the affairs of our Company by
voting on the matters described in the accompanying proxy
statement. We hope that you will be able to attend the meeting.
Our directors and management team will be available to answer
questions. Afterwards, there will be a vote on the matters set
forth in the accompanying proxy statement.
Your vote is important. Whether you plan to attend the
meeting or not, please vote either over the Internet, by
toll-free telephone or by completing the enclosed proxy card and
returning it as promptly as possible. If you attend the meeting,
you may continue to have your shares of common stock voted as
instructed over the Internet, by toll-free telephone or in the
proxy card, or you may change your vote either by voting again
before 11:59 p.m., Eastern Daylight Time, on
November 2, 2011, the time at which the Internet and
telephone voting facilities close, or by submitting a proxy card
prior to or at the meeting.
Sincerely,
Salvatore (Torey) V. Riso, Jr.
President and Chief Executive Officer
Table of Contents
CARE
INVESTMENT TRUST INC.
780 Third Avenue,
21st Floor
New York, NY 10017
780 Third Avenue,
21st Floor
New York, NY 10017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
You are hereby invited to attend the 2011 Annual Meeting of
Stockholders of Care Investment Trust Inc.
| WHEN | Thursday, November 3, 2011, at 10:00 a.m., Eastern Daylight Time. | |
| WHERE | Care Investment Trust Inc. corporate offices, 780 Third Avenue, 29th Floor, New York, NY 10017. | |
| ITEMS OF BUSINESS |
• To elect seven (7) directors to serve until the
2012 annual meeting of stockholders or until their successors
are duly elected and qualified (Proposal 1);
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• To ratify the selection of KPMG LLP
(“KPMG”) as our independent registered public
accounting firm for the fiscal year ending December 31,
2011 (Proposal 2);
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• To approve, in an advisory (non-binding) vote, the
compensation of our named executive officers (Proposal 3);
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• To determine, in an advisory (non-binding) vote,
whether a stockholder vote to approve the compensation of our
named executive officers should occur every one, two or three
years (Proposal 4); and
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• To conduct such other business as may properly come
before the meeting or any adjournment or postponement thereof.
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| RECORD DATE | Stockholders of record as of the close of business on September 15, 2011 will be entitled to notice of and to vote at the 2011 Annual Meeting of Stockholders. A list of stockholders entitled to vote at the annual meeting will be available at the Annual Meeting and for ten (10) calendar days prior to the Annual Meeting, between the hours of 9:00 a.m. and 4:00 p.m., Eastern Daylight Time, at our corporate headquarters located at 780 Third Avenue, 21st Floor, New York, New York 10017. You may arrange to review this list by contacting our Senior Counsel, Chief Compliance Officer and Secretary, Danielle M. DePalma, at (212) 446-1412. | |
| VOTING BY PROXY OR PROXY AUTHORIZATION | Care Investment Trust Inc., on behalf of the Board of Directors, is soliciting your proxy to ensure that a quorum is present and that your shares are represented and voted at the 2011 Annual Meeting of stockholders. Whether or not you plan to attend the annual meeting, please vote either over the Internet, by toll-free telephone or by completing, signing, dating and promptly returning the enclosed proxy card in the postage-prepaid envelope provided. For specific instructions on voting, please refer to the instructions on the proxy card or the information forwarded by your broker, bank or other |
Table of Contents
| holder of record. If you attend the annual meeting, you may vote in person if you wish, even if you have previously voted. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote in person at the meeting, you must obtain a proxy issued in your name from such broker, bank or other nominee. | ||
| RECOMMENDATIONS | The Board of Directors recommends that you vote “FOR” each nominee for director (Proposal 1); “FOR” Proposal 2; “FOR” Proposal 3; and “3 YEARS” for Proposal 4. |
We encourage you to receive all proxy materials in the future
electronically to help us save printing costs and postage fees,
as well as natural resources in producing and distributing these
materials. If you wish to receive these materials electronically
next year, please follow the instructions on the proxy card.
By Order of our Board of Directors,
Danielle M. DePalma
Senior Counsel, Chief Compliance Officer and Secretary
New York, New York
September 30, 2011
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Table of Contents
CARE
INVESTMENT TRUST INC.
780 Third Avenue,
21st Floor
New York, NY 10017
780 Third Avenue,
21st Floor
New York, NY 10017
PROXY
STATEMENT
FOR 2011 ANNUAL MEETING OF STOCKHOLDERS
to be held on November 3, 2011
FOR 2011 ANNUAL MEETING OF STOCKHOLDERS
to be held on November 3, 2011
This proxy statement is furnished by Care Investment
Trust Inc. to our stockholders in connection with the
solicitation of proxies by our Board of Directors for use at the
2011 annual meeting (the “Annual Meeting”) of
stockholders to be held on Thursday, November 3, 2011, at
10:00 a.m., Eastern Daylight Time, at the Care Investment
Trust Inc. corporate offices, 780 Third Avenue, 29th Floor,
New York, NY 10017, and at any and all postponements or
adjournments of our Annual Meeting. References in this proxy
statement, unless the context requires otherwise, to
“Care,” the “Company,” “we,”
“our,” “ours,” and “us” refer to
Care Investment Trust Inc. and our consolidated
subsidiaries. The approximate date on which this proxy statement
and form of proxy solicited on behalf of the Board of Directors
is first being sent to our stockholders is September 30,
2011.
On August 13, 2010, we completed the sale of control of the
Company through a combination of a $55.7 million equity
investment by Tiptree Financial Partners, L.P.
(“Tiptree”) in newly issued common stock of the
Company at $9.00 per share (prior to the Company’s
announcement of a
three-for-two
stock split in September 2010) and a cash tender offer (the
“Tender Offer”) by the Company for up to 100% of the
Company’s issued and outstanding shares of common stock for
$9.00 per share (prior to the Company’s announcement of a
three-for-two
stock split in September 2010). Approximately 97.4% of
previously existing stockholders tendered their shares in
connection with the Tender Offer, and the Company simultaneously
issued to Tiptree approximately 6.19 million newly issued
shares of the Company’s common stock, representing
ownership of approximately 92.2% of the outstanding common
shares of the Company following the Tender Offer. The Tiptree
equity investment and the Tender Offer are referred to herein as
the “Tiptree Transaction.”
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL MEETING
What is
the purpose of the meeting?
At the Annual Meeting, stockholders will be asked to vote on:
| • | the election of seven (7) directors to serve until the 2012 annual meeting of stockholders or until their successors are duly elected and qualified (Proposal 1); | |
| • | the ratification of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2011 (Proposal 2); | |
| • | in an advisory (non-binding) vote, the compensation of our named executive officers (Proposal 3); | |
| • | in an advisory (non-binding) vote, whether a stockholder vote to approve the compensation of our named executive officers should occur every one, two, or three years (Proposal 4); and | |
| • | any other matters that may properly be brought before the Annual Meeting or at any adjournments or postponements thereof. |
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How does
the Board of Directors recommend I vote on these
proposals?
The Board of Directors recommends a vote:
| • | “FOR” the election of the following seven (7) nominees to the Board of Directors: Michael G. Barnes, William A. Houlihan, Jonathan Ilany, Geoffrey N. Kauffman, Salvatore (Torey) V. Riso, Jr., J. Rainer Twiford, and Jean-Michel (Mitch) Wasterlain (Proposal 1); | |
| • | “FOR” the ratification of the selection of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2011 (Proposal 2); | |
| • | “FOR” the approval of the compensation of our named executive officers (Proposal 3); and | |
| • | “3 YEARS” with respect to how frequently a stockholder vote to approve the compensation of our named executive officers should occur (Proposal 4). |
Who is
entitled to vote at the meeting?
If our records show that you were a holder of our common stock
at the close of business on September 15, 2011, which is
referred to in this proxy statement as the “record
date,” you are entitled to receive notice of the meeting
and to vote the shares of common stock that you held on the
record date.
How many
shares can vote?
As of the close of business on the record date,
10,161,249 shares of common stock of the Company were
issued and outstanding and entitled to vote. There is no other
class of voting securities outstanding. You are entitled to one
(1) vote for each share of common stock you held as of the
close of business on the record date.
What
constitutes a quorum?
A quorum of stockholders is necessary to hold a valid meeting. A
quorum will be present if at least a majority of the outstanding
shares entitled to vote are represented at the Annual Meeting.
As of the close of business on September 15, 2011, the
record date, there were 10,161,249 shares outstanding and
entitled to vote. Thus, 5,080,625 shares must be
represented at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum if you vote in
person at the Annual Meeting or if you submit a valid proxy (or
one is submitted on your behalf by your broker, bank or other
agent). Additionally, abstentions and broker non-votes will also
be counted towards the quorum requirement. If there is no
quorum, the Chairman of the Annual Meeting may adjourn the
meeting until a later date.
How do I
vote?
For Proposal 1 (election of directors), you may either vote
“FOR” all of the nominees to the Board of
Directors or you may “WITHHOLD” your vote for
all of the nominees or for any nominee that you specify. For
Proposal 2 (ratification of the appointment of KPMG) and
Proposal 3 (advisory (non-binding) vote on executive
compensation), you may vote “FOR” or
“AGAINST” such proposals or
“ABSTAIN” from voting. For Proposal 4
(advisory (non-binding) vote on the frequency of stockholder
votes on executive compensation), you may vote “1
YEAR,” “2 YEARS” or “3
YEARS” with respect to such proposal or
“ABSTAIN” from voting. The procedures for
voting are set forth below:
Stockholder of Record: Shares Registered in Your
Name. If you are a stockholder of record, you may
vote in person at the Annual Meeting or vote by giving your
proxy authorization over the Internet, by telephone or by
properly completing, signing and dating the accompanying proxy
card
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where indicated and mailing the card in the postage paid
envelope provided. Whether or not you plan to attend the
Annual Meeting, we encourage you to vote by proxy or to give
your proxy authorization to ensure that your votes are
counted. You may still attend the Annual Meeting and vote in
person if you have already voted by proxy or given your proxy
authorization.
| • | To vote in person, attend the Annual Meeting, and we will provide you with a ballot when you arrive. | |
| • | To give your proxy authorization over the Internet or by telephone, follow the instructions for accessing our proxy materials provided in the accompanying proxy card. | |
| • | To vote using a proxy card, complete, sign and date the accompanying proxy card and return it promptly in the postage paid envelope provided. If your signed proxy card is received by 11:59 p.m., Eastern Daylight Time, on November 2, 2011, then we will vote your shares as you direct. |
Beneficial Owner: Shares Registered in the Name of
Broker, Bank or Other Agent. If your shares of
common stock are held by a broker, bank or other nominee ( i.e.,
in “street name”), you will receive instructions from
your nominee, which you must follow in order to have your shares
of common stock voted. Such stockholders who wish to vote in
person at the Annual Meeting will need to obtain a proxy form
from the broker, bank or other nominee that holds their shares
of common stock of record.
How many
votes do I have?
For each proposal to be voted upon, you have one vote for each
share of common stock that you own as of close of business on
September 15, 2011.
How is my
vote counted?
If you vote through the Internet, by phone or properly execute
the accompanying proxy card, and if we receive it by
11:59 p.m., Eastern Daylight Time, on November 2,
2011, the shares of common stock that the proxy represents will
be voted in the manner specified on the proxy. If no
specification is made in the proxy, your shares of common stock
that the proxy represents will be voted in accordance with the
recommendations of our Board of Directors set forth in this
proxy statement. It is not anticipated that any matters other
than those set forth in the proxy statement will be presented at
the Annual Meeting. If other matters are presented, proxies will
be voted in accordance with the discretion of the proxy holders.
In addition, no stockholder proposals or nominations were
received on a timely basis, so no such matters may be brought to
a vote at the Annual Meeting.
What vote
is needed to approve each proposal?
| • | For Proposal 1 (election of directors), the vote of a plurality of all of the votes cast at the Annual Meeting at which a quorum is present is necessary for the election of a director. Therefore, the seven nominees for director receiving the most “FOR” votes will be elected. For purposes of the election of directors, abstentions and broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum. | |
| • | For Proposal 2 (ratification of the appointment of KPMG), the affirmative vote of a majority of all of the votes cast at a meeting at which a quorum is present is required for approval of Proposal 2. For purposes of the vote on Proposal 2, abstentions will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum. | |
| • | For Proposal 3 (advisory (non-binding) vote on executive compensation), the affirmative vote of a majority of all of the votes cast at a meeting at which a quorum is present is required for the approval of Proposal 3. For purposes of the vote on Proposal 3, abstentions and broker non- |
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| votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum. Regardless of how the shareholders vote on this matter, this vote is advisory and not binding on the Board of Directors or the Company in any way, and the Board of Directors or the Compensation, Nominating and Governance Committee (the “CNG Committee”) may determine that it is in the best interest of the Company to either maintain the current executive compensation structure or modify the compensation structure. |
| • | For Proposal 4 (advisory (non-binding) vote on the frequency of stockholder votes on executive compensation), the option of “1 YEAR,” “2 YEARS” or “3 YEARS” that receives a majority of all the votes cast at the Annual Meeting at which a quorum is present will be the frequency for the advisory vote on executive compensation that has been recommended by the Company’s stockholders. For purposes of this advisory vote, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum. In the event that no option receives a majority of the votes cast, we will consider the option that receives the most votes to be the option selected by the Company’s stockholders. In either case, this vote is advisory and not binding on the Board of Directors or the Company in any way, and the Board of Directors or the Compensation, Nominating and Governance Committee (the “CNG Committee”) may determine that it is in the best interest of the Company to hold an advisory vote on executive compensation more or less frequently than the option recommended by our stockholders. |
How are
“broker non-votes” and abstentions treated for
purposes of the proposals?
Abstentions do not constitute a vote “for” or
“against” either matter being voted on at the Annual
Meeting and will not be counted as “votes cast.”
Therefore, abstentions will have no effect on any of the
proposals. “Broker non-votes” will be treated in the
same manner as abstentions for purposes of the Annual Meeting.
Brokers, banks, or other agents that have not received voting
instructions from their clients cannot vote on their
clients’ behalf with respect to “non-routine”
proposals, but may vote their clients’ shares on
“routine” proposals. Proposal 1 (election of
directors), Proposal 3 (advisory (non-binding) vote on
executive compensation), and Proposal 4 (advisory
(non-binding) vote on the frequency of stockholder votes on
executive compensation) are non-routine proposals. Conversely,
Proposal 2 (ratification of appointment of KPMG) is a
routine proposal. In the event that a broker, bank, or other
agent indicates on a proxy that it does not have discretionary
authority to vote certain shares on a non-routine proposal, then
those shares will be treated as broker non-votes.
What
other information should I review before voting?
The proxy materials include our 2010 Annual Report, which is
comprised of our Annual Report on
Form 10-K
(as amended by that certain
Form 10-K/A
filed on April 29, 2011). In addition, our 2010 Annual
Report on
Form 10-K
is available, free of charge, on our website at
http://www.carereit.com.
The information found on, or accessible through, our website is
not incorporated into, and does not form a part of, this proxy
statement or any other report or document we file with or
furnish to the SEC. You may also obtain a copy of our 2010
Annual Report on
Form 10-K,
free of charge, by directing your request in writing to Care
Investment Trust Inc., 780 Third Avenue,
21st
Floor, New York, NY 10017, Attention: Danielle M. DePalma,
Senior Counsel, Chief Compliance Officer and Secretary.
Can I
change my vote after I submit my proxy card or give instructions
over the Internet or telephone?
Yes. After you have submitted a proxy, you may revoke it at any
time before it is voted by:
| • | filing a written notice revoking the proxy with our Secretary at our address; | |
| • | signing and forwarding to us a proxy with a later date; or |
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| • | appearing in person and voting by ballot at the Annual Meeting. |
Whether or not you vote using a traditional proxy card, through
the Internet or by telephone, you may use any of those three
methods to change your vote. Accordingly, you may change your
vote either by submitting a proxy card prior to or at the Annual
Meeting or by voting again before 11:59 p.m., Eastern
Daylight Time, on November 2, 2011, the time at which the
Internet and telephone voting facilities close. The later
submitted vote will be recorded and the earlier vote revoked. If
you attend the Annual Meeting, you may vote in person whether or
not you have previously given a proxy, but your presence
(without further action) at the meeting will not constitute
revocation of a previously given proxy.
How can I
determine the results of the voting at the Annual
Meeting?
Preliminary voting results will be announced at the Annual
Meeting. Final results will be announced in a Current Report on
Form 8-K,
which will be filed with the SEC within four business days after
the conclusion of the Annual Meeting.
Who is
soliciting my proxy?
This solicitation of proxies is made by and on behalf of our
Board of Directors. We will pay the cost of the solicitation of
proxies. In addition to the solicitation of proxies by mail, our
directors, officers and employees may solicit proxies personally
or by telephone.
No person is authorized on our behalf to give any information
or to make any representations with respect to the proposals
other than the information and representations contained in this
proxy statement, and, if given or made, such information
and/or
representations must not be relied upon as having been
authorized and the delivery of this proxy statement shall, under
no circumstances, create any implication that there has been no
change in our affairs since the date hereof.
Who
should I contact if I have any questions?
If you have any questions about the Annual Meeting, this Proxy
Statement, our proxy materials or your ownership of the
Company’s common stock, please contact Care Investment
Trust Inc., 780 Third Avenue, 21st Floor, New York,
New York 10017, Attention: Steven M. Sherwyn, Chief Financial
Officer and Treasurer or call our corporate number at
(212) 446-1410.
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PROPOSAL 1:
ELECTION OF DIRECTORS
Proposal
Our Board of Directors currently consists of seven
(7) members. On August 25, 2011, Flint D. Besecker
tendered his resignation as a director to the Company, effective
September 1, 2011. On September 19, 2011, in
accordance with authority given to them by our bylaws, the
remaining members unanimously appointed Jean-Michel (Mitch)
Wasterlain to the Board of Directors, having determined that
Mr. Wasterlain qualifies as an independent director. Except
for Mr. Wasterlain, the remaining six (6) directors
who are nominated for election were elected at the
Company’s previous annual meeting. Each director elected at
the Annual Meeting will be elected to serve until our next
annual meeting. All nominees for director have consented to be
named and have agreed to serve as directors if elected. We have
no reason to believe that any of the nominees will be unable to
accept election as a director. However, in the event that one or
more nominees are unable or unwilling to accept election or are
unable to serve for any reason, the persons named as proxies or
their substitutes will have authority, according to their
judgment, to vote or refrain from voting for such substitute as
may be designated by the Board of Directors.
Our bylaws provide that a majority of the entire Board of
Directors may establish, increase or decrease the number of
directors, provided that the number of directors shall never be
less than one (1), which is the minimum number required by the
Maryland General Corporation Law, nor more than fifteen (15).
Recommendation
The Board of Directors unanimously recommends a vote
“FOR” each nominee.
Information
Regarding the Nominees for Election
The following table and biographical descriptions set forth
certain information, as of September 15, 2011, with respect
to each nominee for election as director at the Annual Meeting,
all of whom currently serve as directors.
|
Name
|
Age
|
Director Since
|
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Michael G. Barnes (Chairman of the Board)
|
45 | 2010 | ||||||
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Geoffrey N. Kauffman (Vice Chairman of the Board)
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53 | 2010 | ||||||
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William A. Houlihan (Chairman of the Audit Committee &
Lead Director)
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56 | 2010 | ||||||
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Jonathan Ilany
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58 | 2010 | ||||||
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Salvatore (Torey) V. Riso, Jr.
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49 | 2010 | ||||||
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J. Rainer Twiford (Chairman of the Compensation,
Nominating & Governance Committee)
|
58 | 2007 | ||||||
|
Jean-Michel (Mitch) Wasterlain
|
54 | 2011 | ||||||
Michael G. Barnes has been a member of our Board
of Directors since August 13, 2010, and he currently serves
as our Chairman and as a member of our Executive Committee. He
has served as the chief executive officer and chairman of
Tiptree since its inception in 2007 and is a founding partner of
Tricadia Holdings, L.P. and its affiliated companies
(“Tricadia”), which are privately held and provide
investment management services. Prior to the formation of
Tricadia in 2003, Mr. Barnes spent two years as Head of
Structured Credit Arbitrage within UBS Principal Finance LLC, a
wholly owned subsidiary of UBS Warburg, which conducts
proprietary trading on behalf of the firm. Mr. Barnes
joined UBS in 2000 as part of the merger between UBS and
PaineWebber Inc. Prior to joining UBS, Mr. Barnes was a
Managing Director and Global Head of the Structured Credit
Products Group of PaineWebber. Prior to joining PaineWebber in
1999, he spent 12 years at Bear, Stearns & Co.
Inc., the
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last five of which he was head of their Structured Transactions
Group. Mr. Barnes received his A.B. from Columbia College.
Mr. Barnes was selected and qualified to serve as a member
of our Board of Directors because of his extensive experience in
asset management, including the management of credit assets,
real estate, and for his experience in developing emerging and
transitional companies.
Geoffrey N. Kauffman has been a member of our
Board of Directors since August 13, 2010, and he currently
serves as our Vice Chairman and as a member of our Executive
Committee. He has served as the president and chief operating
officer of Tiptree since its inception in 2007.
Mr. Kauffman also has been a Managing Director of Tricadia
since 2005. Since joining Tricadia in 2005, Mr. Kauffman
has been overseeing a variety of strategic acquisition
opportunities and permanent capital projects, including the
development of Tiptree. Prior to joining Tricadia, from 2002 to
2004, Mr. Kauffman was a partner with the Shidler Group in
a similar capacity, with his primary focus being the development
of a credit derivative products company (CDPC). Before joining
the Shidler Group, from 1997 to 2001, Mr. Kauffman was
involved in the launch of the CGA Group of companies, which
originated financial guarantee contracts. From 1997 through
1999, he was the president, Chief Underwriting Officer and
Principal Representative of CGA Bermuda, Ltd, the CGA
Group’s Bermuda based insurance subsidiary. From 2000 to
2001, he was the president and chief executive officer of CGA
Investment Management. Prior to joining CGA, Mr. Kauffman
was at AMBAC and the MBIA / AMBAC International joint
venture in 1995 and 1996, where he helped develop their
international structured finance department. Prior to AMBAC,
from 1989 to 1995, Mr. Kauffman was with FGIC’s ABS
group and helped establish that business, focusing on CDOs,
asset backed securities and multi-seller conduit programs. Prior
to FGIC, Mr. Kauffman worked in the Investment Banking
Division of Marine Midland Bank (now HSBC), where he focused on
middle market mergers and acquisitions and structured finance.
Mr. Kauffman holds a B.A. (Psychology) from Vassar College
and an M.B.A. (Finance) from Carnegie Mellon University.
Mr. Kauffman was selected and qualified to serve as a
member of our Board of Directors because of his significant and
diverse experience in financial transactions, particularly
credit transactions, and real estate, as well as his experience
in developing emerging and transitional companies.
William A. Houlihan has been a member of our Board
of Directors since August 13, 2010, and he currently serves
as Chairman of our Audit Committee and as our Lead Director. He
has more than 30 years of business and financial
experience. Since September 2009, he has served on the board of
directors and as the financial expert on the audit committee of
First Physicians Capital Group, Inc., a publicly-traded company
that owns ambulatory surgical centers and small hospitals.
Mr. Houlihan served on the board of directors of SNL
Financial, a privately-held company that maintains database
financial information on financial institutions, REITs, energy,
media and other companies, from November 2003 until June 2010.
During an eight-year period from 2001 through 2008,
Mr. Houlihan was a private investor while he served as
transitional chief financial officer for several distressed
companies: Sixth Gear, Inc. from October 2007 to November 2008,
Sedgwick Claims Management Services from August 2006 until
January 2007, Metris Companies from August 2004 to January 2006,
and Hudson United Bancorp from January 2001 to November 2003.
Mr. Houlihan also worked as an investment banker at UBS
from June 2007 to September 2007, J.P. Morgan Securities
from November 2003 to July 2004, KBW, Inc. from October 1996 to
January 2001, Bear, Stearns & Co., Inc. from April
1991 to October 1996, and Goldman Sachs & Co. from
June 1981 to April 1991. He also held several auditing and
accounting positions from June 1977 through June 1981.
Mr. Houlihan received a B.S., Magna Cum Laude in Accounting
in 1977 from Manhattan College, became licensed as a Certified
Public Accountant in 1979, and received his M.B.A. in Finance in
1983 from New York University Graduate School of Business.
Mr. Houlihan was selected and qualified to serve as a
member of our Board of Directors because of his diverse
financial experience, including his service on the boards of
directors of several small
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capitalization, high-growth companies, as chief financial
officer of transitional public and privately-held companies and
his extensive accounting background.
Jonathan Ilany has been a member of our Board of
Directors since August 13, 2010. He has been chairman of
the board of directors of Reliance First Capital, a privately
owned mortgage company, since 2008. Since 2005, Mr. Ilany
has been a private investor and passive partner at Mariner
Investment Group. Mr. Ilany was a partner at Mariner
Investment Group from
2000-2005,
responsible for hiring and setting up new trading groups,
overseeing risk management, and he was a senior member of the
investment committee and management committee of the firm. From
1996-2000,
Mr. Ilany was a private investor. From
1982-1995,
Mr. Ilany was an employee of Bear Stearns & Co.
He was nominated to the Board of Directors of the Company in
1988. From
1980-1982,
Mr. Ilany worked at Merrill Lynch. From
1971-1975,
Mr. Ilany served in the armored corps of the Israeli
Defense Forces and he was honorably discharged holding the rank
of First Lieutenant.
Mr. Ilany was selected and qualified to serve as a member
of our Board of Directors because of his extensive experience in
overseeing risk management and serving on the investment
committee and management committee of a major investment firm,
serving on the board of directors of various companies and his
experience with investing in real estate and real estate-related
assets.
Salvatore (Torey) V. Riso Jr. has served as our
President and Chief Executive Officer since December 2009, and
he was appointed to our Board of Directors in November 2010 and
also serves on our Executive Committee. Mr. Riso formerly
served as our secretary and chief compliance officer from
February 2008 until December 2009. He was employed by CIT Group
from September 2005 through November 2010, serving as senior
vice president and chief counsel of CIT Corporate Finance since
March 2007. Prior to his position at CIT Corporate Finance,
Mr. Riso served as chief counsel for CIT Healthcare LLC,
our former external manager (“CIT Healthcare”), and
other business units of CIT. Between 1997 and 2005,
Mr. Riso was in private legal practice in the New York
office of Orrick Herrington & Sutcliffe LLP, where he
worked in Orrick’s global finance practice group.
Mr. Riso received a B.A. in economics and history cum laude
from UCLA, as well as a J.D. from the Loyola Law School of Los
Angeles.
Mr. Riso was selected and qualified to serve as a member of
our Board of Directors because of his experience in legal and
finance matters and because of his intimate knowledge of our
Company.
J. Rainer Twiford has been a member of our
Board of Directors since the consummation of our initial public
offering in 2007 and currently serves as Chairman of our
Compensation, Nominating and & Governance Committee.
Since 1999, Mr. Twiford has been president of Brookline
Partners, Inc., an investment advisory company. Prior to joining
Brookline Partners, Mr. Twiford was a partner of Trammell
Crow Company from 1987 until 1991. Mr. Twiford is currently
a director of IPI, Inc., Smith of Georgia and Tracon
Pharmaceuticals, and previously served on the board of a
children’s behavioral health company. Mr. Twiford
received a BA and a Ph.D. from the University of Mississippi, an
M.A. from the University of Akron and a J.D. from the University
of Virginia.
Mr. Twiford was selected and qualified to serve as a member
of our Board of Directors because of his extensive high level
experience in the financial industry.
Jean-Michel (Mitch) Wasterlain has been a member
of our Board of Directors since September 2011. Since July 2010,
Mr. Wasterlain has been a Managing Partner and Founder of
Slate Realty Capital, a real estate merchant banking firm
focused on three primary business lines including advisory
services, debt and equity capital sourcing and principal
investments. Prior to forming Slate Realty Capital,
Mr. Wasterlain was President and CEO of ORIX Capital
Markets, the US real estate and structured finance arm of ORIX
Corporation (NYSE: ORIX). At ORIX, he was responsible for all
investments in real estate debt, equity, and securities, as well
as its special servicing business. In 2002, he joined NorthStar
Capital Investment to create a real estate debt investment
platform, which led to the IPO of NorthStar Realty Finance
Corporation (NYSE: NRF), a public REIT, in 2004. He served as
Chief Investment Officer of NRF and President of NS Advisors,
and had direct responsibility for the
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securities investment business and for NRF’s capital
markets financing activities. Prior to joining NorthStar,
Mr. Wasterlain was a Managing Director of CGA Investment
Management responsible for its real estate investment activities
from 1996 to 2001, and previously worked in distressed real
estate investing at ING Barings and in real estate investment
banking at Lehman Brothers. Mr. Wasterlain holds an MBA
from the Wharton School and a BA in Economics with Honors and
Distinction from Stanford University. He is a Founding Member of
the Board of Governors of the CRE Finance Council (formerly
CMSA).
Mr. Wasterlain was selected and qualified to serve as a
member of our Board of Directors because of his extensive high
level experience in the financial services and real estate
industries.
Executive
Officers and Executive Committee
Salvatore (Torey) V. Riso, Jr. has served as our President
and Chief Executive Officer since December 2009. Our Board of
Directors appointed Steven M. Sherwyn as our new Chief Financial
Officer and Treasurer in November 2010. Mr. Riso’s and
Mr. Sherwyn’s initial terms will end December 31,
2013 after which time their contracts shall extend through
automatic one-year renewals, unless either party gives at least
90 days prior written notice of nonrenewal.
Our Board of Directors, in August 2010, appointed an
“Executive Committee” comprised of Michael G. Barnes,
the Chairman of our Board of Directors, and Geoffrey N.
Kauffman, the Vice Chairman of our Board of Directors, and
delegated authority to the Executive Committee to implement the
policies of the Company, as determined by the Board of
Directors, and to assist in management of the Company’s
day-to-day
business, operations, activities, and affairs. Mr. Riso
joined the Executive Committee in November 2010 following his
appointment to our Board of Directors.
The following sets forth biographical information regarding
Steven M. Sherwyn as of September 15, 2011. The biographies
for Michael G. Barnes, Geoffrey N. Kauffman, and Salvatore
(Torey) V. Riso, Jr. are included above under
“Information Regarding the Nominees for Election.”
Steven M. Sherwyn, age 50, was appointed to
serve as our Chief Financial Officer and Treasurer on
November 4, 2010. Mr. Sherwyn has over 25 years
of finance, legal and real estate experience. Mr. Sherwyn
served as a director, senior director and managing director of
Hypo Real Estate Capital Corp. from 2004 to 2006, 2006 to 2007
and 2007 to 2008, respectively. He also served as chief
financial officer and treasurer for Quadra Realty Trust, a real
estate investment trust, from 2007 to 2008. Finally,
Mr. Sherwyn served as chief financial officer for Galiot
Capital Corporation from 2008 to 2009 and chief financial
officer and treasurer of Western Asset Mortgage Capital
Corporation in 2009, both real estate investment trusts.
Mr. Sherwyn is a graduate of The Wharton School of the
University of Pennsylvania with a B.S. in economics.
Mr. Sherwyn also received a J.D. from Stanford University
Law School and an LL.M. in taxation from New York University Law
School.
The Board
of Directors and its Committees
Our Board of Directors presently consists of seven
(7) members. Except for Jean-Michel (Mitch) Wasterlain, the
remaining six (6) directors were elected at the
Company’s previous annual meeting. Mr. Wasterlain was
appointed as a director by a unanimous vote of the Board of
Directors on September 19, 2011. The Board of Directors has
affirmatively determined that Messrs. Twiford, Houlihan,
Ilany, and Wasterlain are independent pursuant to the
independence standards of the New York Stock Exchange
(“NYSE”).
The Board of Directors currently has three (3) standing
committees: an Audit Committee, the CNG Committee and an
Executive Committee, as described above.
During fiscal year 2010, our Board of Directors held 15
meetings, our Special Committee of the Board of Directors held
10 meetings, our Audit Committee held 7 meetings, our CNG
Committee held 4 meetings, and our Executive Committee held 4
meetings. All of our current directors have attended at least
75% of the combined total number of meetings of our Board of
Directors and Committees of
4
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the Board on which they serve, if any, during 2010, with the
exception of Mr. Wasterlain who joined our Board of
Directors in September 2011.
Audit
Committee
Our Board of Directors has established an audit committee that
meets the definition provided by Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended. The Audit Committee
is comprised of three (3) of our independent directors:
Messrs. Houlihan, Ilany and Twiford. Additionally, our
Audit Committee members satisfy the definition of independence
imposed by the New York Stock Exchange Listed Company Manual and
Rule 10A-3
under the Securities Exchange Act of 1934, as amended.
Mr. Houlihan became Chairman of the committee on
August 13, 2010, and has been determined by our Board of
Directors to be an “audit committee financial expert”
as that term is defined in the Securities Exchange Act of 1934,
as amended.
The Audit Committee assists the Board of Directors in overseeing:
| • | our accounting and financial reporting processes; | |
| • | the quality and integrity and audits of our consolidated financial statements, and accounting and reporting processes; | |
| • | our compliance with legal and regulatory requirements; | |
| • | the qualifications and independence of our independent registered public accounting firm; and | |
| • | the performance of our independent registered public accounting firm and any internal auditors. |
The Audit Committee is also responsible for engaging the
independent registered public accounting firm, reviewing with
the independent registered public accounting firm the plans and
results of the audit engagement, approving professional services
provided by the independent registered public accounting firm
and considering the range of audit and non-audit fees.
Compensation,
Nominating and Governance Committee
The CNG Committee is comprised of three (3) of our
independent directors: Messrs. Twiford, Houlihan and Ilany.
Mr. Twiford became Chairman of the committee on
September 6, 2011. Mr. Besecker served as Chairman of
the committee until his resignation, effective September 1,
2011. The CNG Committee is responsible for:
| • | establishing our corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluating the Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the compensation of the Chief Executive Officer considering the Chief Executive Officer’s performance in light of such goals and objectives; | |
| • | reviewing and recommending to the Board of Directors the compensation of our executive officers (other than Chief Executive Officer), considering our corporate goals and objectives and evaluating such executive officer’s performance in light of such goals and objectives; | |
| • | overseeing the compensation policies and programs of our non-executive officer employees to determine whether such compensation policies and programs are functioning effectively and do not create any unreasonable risk to the Company, as well as reviewing the appropriateness of the compensation practices to determine if they are reasonably likely to have a material adverse effect on the Company; | |
| • | reviewing, evaluating, and recommending to the Board of Directors any incentive plan, or material revision thereto, and administering the same; | |
| • | supervising, controlling and evaluating the activities and performance of TREIT Management, LLC (“TREIT”), an affiliate of Tiptree, under the Services Agreement (defined below), |
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| reviewing our goals and objectives with respect to the Services Agreement and reviewing the compensation paid to TREIT pursuant to the Services Agreement; |
| • | reviewing and approving the disclosure regarding our compensation and benefit matters (and other items as may be required by Item 407(e)(5) to be disclosed in our compensation committee report) in our proxy statement and Annual Report; | |
| • | reviewing and discussing with the Company’s management the Compensation Discussion and Analysis required by Item 402; | |
| • | identifying, recruiting and recommending to the full Board of Directors qualified candidates for election as directors and recommending a slate of nominees for election as directors at the annual meeting of stockholders; | |
| • | developing and recommending to the Board of Directors corporate governance guidelines and policies; | |
| • | overseeing the evaluation of the structure, duties, size, membership and functions of the Board of Directors and its committees and recommending appropriate changes to the Board of Directors; and | |
| • | establishing procedures to exercise oversight of the evaluation of the Board of Directors and its committees and members (including a self-evaluation). |
Director
Compensation
The following table sets forth information regarding the
compensation paid to, and the compensation expense we recognized
with respect to, our Board of Directors as it was comprised
during the fiscal year ended December 31, 2010:
|
Fees Earned or |
||||||||||||
|
Paid in |
Stock |
|||||||||||
|
Cash |
Awards |
Total |
||||||||||
|
Name
|
($) | ($)(1) | ($) | |||||||||
|
Flint D.
Besecker(2)
|
$ | 58,191 | $ | 360,276 | $ | 418,467 | ||||||
|
Gerald E. Bisbee,
Jr., Ph.D.(3)
|
$ | 36,691 | $ | 33,253 | $ | 69,945 | ||||||
|
Alexandra
Lebenthal(4)
|
$ | 7,778 | $ | 8,260 | $ | 16,038 | ||||||
|
Karen P.
Robards(5)
|
$ | 36,691 | $ | 33,253 | $ | 69,945 | ||||||
|
J. Rainer
Twiford(6)
|
$ | 54,424 | $ | 38,996 | $ | 93,420 | ||||||
|
Steven N.
Warden(7)
|
$ | 0 | $ | 0 | $ | 0 | ||||||
|
Michael G.
Barnes(8)
|
$ | 0 | $ | 0 | $ | 0 | ||||||
|
Geoffrey N.
Kauffman(9)
|
$ | 0 | $ | 0 | $ | 0 | ||||||
|
Salvatore (Torey) V. Riso,
Jr.(10)
|
$ | 0 | $ | 0 | $ | 0 | ||||||
|
William A.
Houlihan(11)
|
$ | 15,331 | $ | 5,743 | $ | 21,073 | ||||||
|
Jonathan
Ilany(12)
|
$ | 13,415 | $ | 5,743 | $ | 19,158 | ||||||
| (1) | Amounts recognized by the Company for financial statement reporting purposes in the fiscal year ended December 31, 2010. See Footnote 14 to our Consolidated Financial Statements in our most recent Annual Report on Form 10-K/A. In accordance with SEC rules, estimates of forfeitures related to service-based conditions have been disregarded. As discussed below, each independent director receives an annual retainer payable in cash and in unrestricted shares of our common stock. These unrestricted shares are granted in approximately equal amounts per quarter in arrears and are based on the closing price of our common stock on the last business day of each quarter. The grant date fair market value of our common stock as of the end of each of the fiscal quarters in 2010 were $8.92, $8.66, $5.00 and $4.75, respectively. | |
| (2) | On January 28, 2010, under the terms of our Equity Plan, 29,000 shares of restricted stock and restricted stock units previously issued to Mr. Besecker vested in connection with shareholder approval of the Company’s Plan of Liquidation. On December 10, 2009, Mr. Besecker was awarded a performance share award with a threshold, target and maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of the award assuming the achievement of the highest level of performance was $79,800. On February 23, 2010, our Board of Directors amended the performance |
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| share awards. See “Executive Compensation — Performance Share Awards to Mr. Riso and Mr. Hughes” in our most recent Annual Report on Form 10-K/A for more information on the amendment. On August 13, 2010, under the terms of our Equity Plan, the performance share award issued to Mr. Besecker vested in connection with shareholder approval of the change of control to Tiptree, and Mr. Besecker achieved the maximum award of 10,000 shares. | ||
| (3) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Mr. Bisbee vested in connection with shareholder approval of the Company’s Plan of Liquidation. Mr. Bisbee resigned from the Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. Before his resignation, Mr. Bisbee was an independent director of the Company based on the NYSE independence standards and the Company’s definition of an independent director. | |
| (4) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Ms. Lebenthal vested in connection with shareholder approval of the Company’s Plan of Liquidation. Ms. Lebenthal resigned from the Board of Directors on January 28, 2010. Before her resignation, Ms. Lebenthal was an independent director of the Company based on the NYSE independence standards and the Company’s definition of an independent director. | |
| (5) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Ms. Robards vested in connection with shareholder approval of the Company’s Plan of Liquidation. Ms. Robards resigned from the Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. Before her resignation, Ms. Robards was an independent director of the Company based on the NYSE independence standards and the Company’s definition of an independent director. | |
| (6) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Mr. Twiford vested in connection with shareholder approval of the Company’s Plan of Liquidation. | |
| (7) | Mr. Warden resigned from the Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. He received no annual retainer in connection with his service on our Board of Directors. | |
| (8) | Mr. Barnes was appointed to our Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. He receives no annual retainer in connection with his service on our Board of Directors. | |
| (9) | Mr. Kauffman was appointed to our Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. He receives no annual retainer in connection with his service on our Board of Directors. | |
| (10) | Mr. Riso was appointed to our Board of Directors on November 4, 2010, effective as of November 16, 2010. He receives no annual retainer in connection with his service on our Board of Directors. | |
| (11) | Mr. Houlihan was appointed to our Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. | |
| (12) | Mr. Ilany was appointed to our Board of Directors on August 13, 2010 in conjunction with the sale of control of the Company to Tiptree. |
Each independent director receives an annual retainer of
$50,000. The annual retainer payable to our independent
directors is payable quarterly in arrears, 70% in cash and 30%
in unrestricted stock. Any portion of the annual retainer that
an independent director receives in stock is granted pursuant to
our Equity Plan.
The Chairs of our Audit Committee and our CNG Committee are
entitled to receive an additional annual retainer of $5,000. The
annual retainer payable to our committee chairs is payable
quarterly in arrears in cash. In addition, we reimburse all
directors for reasonable
out-of-pocket
expenses incurred in connection with their services on our Board
of Directors.
Special
Equity Grant to Mr. Besecker
On January 28, 2010, under the terms of our Equity Plan,
29,000 restricted stock units previously issued to
Mr. Besecker vested in connection with shareholder approval
of the Company’s Plan of Liquidation. On December 10,
2009, Mr. Besecker was awarded a performance share award
with a Threshold, Target and Maximum award of 2,500, 5,000 and
10,000 shares, respectively. The grant date fair value of
the award assuming the achievement of the highest level of
performance is $79,800. On February 23, 2010, our Board of
Directors amended the performance share awards. See
“Executive Compensation — Performance Share
Awards to Mr. Riso and Mr. Hughes.” On
August 13, 2010, under the terms of the performance share
award and our Equity Plan, the performance share award issued to
Mr. Besecker vested in connection with shareholder approval
of the change of control to Tiptree, and Mr. Besecker
achieved the maximum award of 10,000 shares.
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CORPORATE
GOVERNANCE MATTERS
This section of our proxy statement contains information about a
variety of our corporate governance policies and practices. We
are committed to operating our business under strong and
accountable corporate governance practices. You are encouraged
to visit the corporate overview section of our corporate website
at
http://www.carereit.com
to view or to obtain copies of the Company’s Bylaws and
Charter, our respective charters of our Board Committees, our
Code of Business Conduct, Corporate Governance Guidelines and
our Securities Trading Policy. The information found on, or
accessible through, our website is not incorporated into, and
does not form a part of, this proxy statement or any other
report or document we file with or furnish to the SEC. You may
also obtain, free of charge, a copy of our Bylaws and Charter,
the respective charters of our Board Committees, Code of
Business Conduct and Corporate Governance Guidelines by
directing your request in writing to Care Investment
Trust Inc., 780 Third Avenue, 21st Floor, New York, NY
10017, Attention: Danielle M. DePalma, Senior Counsel, Chief
Compliance Officer and Secretary. Additional information
relating to the corporate governance of the Company is included
above in the section entitled “Proposal 1: Election of
Directors.”
Corporate
Governance Guidelines
Our Board of Directors has adopted Corporate Governance
Guidelines that address significant issues of corporate
governance and set forth procedures by which our Board of
Directors carries out its responsibilities. Among the areas
addressed by the Corporate Governance Guidelines are director
qualification standards, director responsibilities, director
relationship and access to management and independent advisors,
director compensation, director orientation and continuing
education, management succession, annual performance evaluation
of the Board of Directors and management responsibilities. Our
CNG Committee is responsible for assessing and periodically
reviewing the adequacy of the Corporate Governance Guidelines
and will recommend, as appropriate, proposed changes to the
Board of Directors.
Director
Resignation Policy
Previously, we maintained a director resignation policy that
required a director to tender his or her resignation if he or
she failed to receive a majority of the votes cast in our annual
director elections. On November 4, 2010, our Board of
Directors approved an amendment to our Corporate Governance
Guidelines to remove the director resignation policy.
Director
Independence
Our Board of Directors has determined that a majority of the
Board of Directors is composed of directors who meet the
independence requirements included in the New York Stock
Exchange Listed Company Manual). Messrs. Houlihan, Ilany,
Twiford and Wasterlain, representing a majority of the Board of
Directors, are independent pursuant to the independence
standards of the NYSE.
Code of
Business Conduct
Our Board of Directors has adopted a Code of Business Conduct
that applies to our directors, executive officers, as well as
employees of TREIT or its affiliates that provide services to
us. The Code of Business Conduct was designed to assist our
directors, executive officers and employees, as well as
employees of TREIT or its affiliates that provide services to
us, in complying with the law, resolving moral and ethical
issues that may arise and in complying with our policies and
procedures. Among the areas addressed by the Code of Business
Conduct are compliance with applicable laws, conflicts of
interest, use and protection of our Company’s assets,
confidentiality, communications with the public, accounting
matters, record keeping and discrimination and harassment.
8
Table of Contents
Communications
with our Board of Directors
We have a process by which stockholders
and/or other
parties may communicate with our Board of Directors, our
independent directors as a group or our individual directors.
Any such communications may be sent to our Board of Directors by
U.S. mail or overnight delivery and should be directed to
the Board of Directors, a Committee, the independent directors
as a group, or an individual director,
c/o Danielle
M. DePalma, Senior Counsel, Chief Compliance Officer and
Secretary, at Care Investment Trust Inc., 780 Third Avenue,
21st Floor, New York, NY 10017, who will forward such
communications on to the intended recipient. Any such
communications may be made anonymously. In addition, stockholder
communications can be directed to the Board of Directors by
calling the Corporate Governance Hotline listed on our website.
Whistleblowing
and Whistleblower Protection Policy
Our Audit Committee has established procedures for (1) the
receipt, retention and treatment of complaints received by our
Company regarding accounting, internal accounting controls or
auditing matters and (2) the confidential and anonymous
submission by our employees of concerns regarding questionable
accounting or auditing matters. If you wish to contact us to
report complaints or concerns relating to the financial
reporting of our Company, you may do so by contacting our Chief
Compliance Officer in writing,
c/o Danielle
M. DePalma, Senior Counsel, Chief Compliance Officer and
Secretary, Care Investment Trust Inc., 780 Third Avenue,
21st Floor, New York, NY 10017. Additionally, you may call
the Corporate Governance Hotline listed on our website. Any such
communications may be made anonymously.
Director
Attendance at Annual Meetings
Pursuant to our Corporate Governance Guidelines, we expect each
member of our Board of Directors to attend each annual meeting
of stockholders. Last year, seven of the seven directors
attended the annual meeting of the stockholders.
Identification
of Director Candidates
Our CNG Committee assists our Board of Directors in identifying
and reviewing director candidates to determine whether they
qualify for membership on the Board of Directors and for
recommending to the Board of Directors the director nominees to
be considered for election at our annual meetings of
stockholders.
In making recommendations to our Board of Directors, our CNG
Committee considers such factors as it deems appropriate. Though
the Company does not have a formal policy addressing diversity,
the Board of Directors and the CNG Committee believe that
diversity is an important attribute of the members who comprise
our Board of Directors and those members should represent an
array of backgrounds and experiences and should be capable of
articulating a variety of viewpoints. As such, directors should
have diversity with respect to background, skills and expertise,
industry knowledge and experience. The CNG Committee uses the
following general criteria for identifying director candidates:
| 1. | Directors should possess senior level management and decision-making experience; |
| 2. | Directors should have a reputation for integrity and abiding by exemplary standards of business and professional conduct; | |
| 3. | In selecting director nominees, the Board of Directors should seek candidates with the commitment and ability to devote the time and attention necessary to fulfill their duties and responsibilities to the Company and its stockholders; |
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| 4. | Directors should be highly accomplished in their respective field, with leadership experience in corporations or other complex organizations, including government, educational and military institutions; | |
| 5. | In addition to satisfying the independence criteria described in the Corporate Governance Guidelines, independent directors should be able to represent all stockholders of the Company; | |
| 6. | Directors who are expected to serve on a committee of the Board of Directors shall satisfy applicable legal requirements and other criteria established by any securities exchange on which our common stock is listed; |
| 7. | Directors should have the ability to exercise sound business judgment to provide advice and guidance to the Chief Executive Officer and Executive Committee with candor; and |
| 8. | The Board of Director’s assessment of a director candidate’s qualifications includes consideration of diversity, age, skills and experience in the context of the needs of the Board of Directors. |
The foregoing general criteria apply equally to the evaluation
of all potential independent and management director nominees,
including those individuals recommended by stockholders.
Our CNG Committee may solicit and consider suggestions of our
directors, Tiptree or its affiliates (including TREIT) or our
management regarding possible nominees. Our CNG Committee may
also procure the services of outside sources or third parties to
assist in the identification of director candidates.
Our CNG Committee may consider director candidates recommended
by our stockholders. Our CNG Committee will apply the same
standards in considering candidates submitted by stockholders as
it does in evaluating candidates submitted by members of our
Board of Directors, Tiptree or its affiliates (including TREIT)
or our management. Any recommendations by stockholders should
follow the procedures outlined under “Additional
Information — Stockholder Proposals” in this
proxy statement and should also provide the reasons supporting a
candidate’s recommendation, the candidate’s
qualifications and the candidate’s written consent to being
considered as a director nominee. In addition, any stockholder
recommending a director candidate should submit information
demonstrating the number of shares of common stock that he or
she owns.
Executive
Sessions of Independent Directors
In accordance with our Corporate Governance Guidelines, the
independent directors serving on our Board of Directors are
given an opportunity at each meeting to meet in executive
session without the presence of any directors or other persons
who are part of our management. Our executive sessions are
chaired by our Lead Director. Mr. Houlihan was appointed
Lead Director on September 6, 2011, replacing
Mr. Besecker who resigned as Lead Director, effective
September 1, 2011. Interested parties may communicate
directly with our Lead Director or our independent directors as
a group through the process set forth above under
“Communications with our Board of Directors.”
Current
Board Leadership Structure
Our Board of Directors is led by Michael G. Barnes, the Chairman
of the Board of Directors, and Geoffrey N. Kauffman, the Vice
Chairman of the Board of Directors. Mr. Barnes serves as
the chief executive officer and chairman of Tiptree.
Mr. Kauffman serves as the president and chief operating
officer of Tiptree. Tiptree is our majority stockholder and an
affiliate of TREIT, which provides advisory services to us
pursuant to a Services Agreement (discussed below).
Mr. Barnes and Mr. Kauffman are each executive
officers of TREIT. Our Board of Directors appointed an
“Executive Committee” comprised of our Chairman,
Michael G. Barnes, Vice Chairman, Geoffrey N. Kauffman
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and our President and Chief Executive Officer, Salvatore (Torey)
V. Riso, Jr., and delegated authority to the Executive
Committee to implement the policies of the Company, as
determined by the Board of Directors, to manage the
Company’s
day-to-day
business, operations, activities and affairs, including
participating in the review of the Company’s acquisition
opportunities, portfolio management, financing opportunities and
forecasting and capital budgeting. Because the Chairman and Vice
Chairman of the Board of Directors are not independent, the
Board of Directors appointed Mr. Houlihan to serve as the
Company’s Lead Director (replacing Flint D. Besecker in
such capacity following his resignation effective
September 1, 2011) and provide the following services
to the Company: preside at executive sessions of the independent
directors and preside at meetings of the Board of Directors when
the Chairman or Vice Chairman is not present.
To help ensure that the Board of Directors carries out its
oversight responsibilities, our Corporate Governance Guidelines
require the Board of Directors as a whole to maintain
independence from management. Pursuant to the Corporate
Governance Guidelines, a majority of the Board of Directors must
be independent. As of the date hereof, four (4) of our
current seven (7) directors have been determined to be
independent.
The Board of Directors believes that this structure is
appropriate due to TREIT’s position as advisor to the
Company pursuant to the Services Agreement (discussed in
“Certain Relationships and Related Transactions —
Transactions with Related Persons”). The Board of Directors
also believes that this structure allows the Company to better
utilize the experience of Mr. Barnes and Mr. Kauffman.
Board’s
Role in Risk Oversight
Our Board of Directors oversees our business in general,
including risk management and performance of the Chief Executive
Officer and other members of senior management, to assure that
the long-term interests of the stockholders are being served.
Each committee of our Board of Directors is also responsible for
reviewing the risk exposure related to such committee’s
areas of responsibility and providing input to senior management
on such risks.
Management and our Board of Directors have a process to
identify, analyze, manage and report all significant risks
facing us. Our Chief Executive Officer will regularly report to
the Board of Directors on significant risks facing us, including
legal, financial, operational and strategic risks. The Audit
Committee reviews with senior management significant risks
related to the Company and periodically reports to the Board of
Directors on such risks.
In addition, pursuant to its charter, the Audit Committee is
responsible for reviewing and discussing the Company’s
business risk management process, including the quality and
integrity of the Company’s financial statements, and
accounting and reporting processes; the Company’s
compliance with legal and regulatory requirements; the
independent registered public accounting firm’s
qualifications and independence; and the performance of the
Company’s internal audit and credit audit functions.
Furthermore, the Audit Committee evaluates key financial
statement issues and risks, their impact or potential effect on
reported financial information and the process used by
management to address such matters. At each Audit Committee
meeting, management briefs the committee on the current business
and financial position of the Company, as well as such items as
internal audits and independent audits.
CNG
Committee Interlocks and Insider Participation
The following non-employee directors are the current members of
the CNG Committee of the Board of Directors:
Messrs. Twiford, Houlihan and Ilany. During 2010, none of
the Company’s executive officers served as a director or
member of the CNG Committee of any other entity whose executive
officers served on the Company’s Board of Directors or CNG
Committee.
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AUDIT
COMMITTEE REPORT
The Audit Committee oversees our financial reporting process on
behalf of our Board of Directors, in accordance with our Audit
Committee Charter, which was approved in 2007 and amended in
2010. Management has the primary responsibility for the
preparation and presentation and integrity of our financial
statements and has represented to the Audit Committee that such
financial statements were prepared in accordance with generally
accepted accounting principles. In fulfilling its oversight
responsibilities, our Audit Committee reviewed the audited
financial statements in the Annual Report on
Form 10-K
for the year ended December 31, 2010 with management,
including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness
of significant judgments and the clarity of disclosures in the
financial statements.
Our Audit Committee reviewed with our independent auditors, who
are responsible for auditing our financial statements and for
expressing an opinion on the conformity of those audited
financial statements with accounting principles generally
accepted in the United States, their judgment as to the quality,
not just the acceptability, of our accounting principles and
such other matters as are required to be discussed with the
Audit Committee under Auditing Standards No. 114,
Communication with Audit Committees (which supersedes Statement
on Auditing Standards No. 61, as amended). Our independent
auditors also provided to the Audit Committee the written
disclosures required by the applicable requirements of the
Public Company Accounting Oversight Board relating to the
independent accountant’s communications with the Audit
Committee concerning independence. In addition, the Audit
Committee has discussed with our independent auditors the
auditors’ independence from both management and our Company.
Our Audit Committee discussed with our independent auditors the
overall scope and plans for their audit. Our Audit Committee met
with our independent auditors, with and without management
present, to discuss the results of their examinations, and the
overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above,
our Audit Committee recommended to our Board of Directors that
the audited financial statements be included in the Annual
Report on
Form 10-K
for the year ended December 31, 2010 for filing with the
SEC.
Submitted by our Audit Committee
William A. Houlihan (Chairman)
Jonathan Ilany
J. Rainer Twiford
Jonathan Ilany
J. Rainer Twiford
The foregoing report shall not be deemed incorporated by
reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of
1933, as amended, or under the Exchange Act of 1934, as amended,
except to the extent that we specifically incorporate this
information by reference, and shall not otherwise be deemed
filed under such Securities Act
and/or
Exchange Act.
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PROPOSAL 2:
RATIFICATION OF APPOINTMENT OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PUBLIC ACCOUNTING FIRM
Proposal
Our Audit Committee previously appointed the accounting firm of
Deloitte & Touche LLP (“Deloitte &
Touche”) to serve as our independent registered public
accounting firm for the fiscal year ending December 31,
2010, which appointment was ratified by our stockholders at our
2010 Annual Meeting of Stockholders. On April 12, 2011, the
Company dismissed Deloitte & Touche as its independent
registered public accounting firm. The decision to dismiss
Deloitte & Touche was made by the Company’s Audit
Committee. On April 18, 2011, the Company appointed KPMG
LLP (“KPMG”) as its independent registered public
accounting firm for the fiscal year ending December 31,
2011, subject to ratification of this appointment by our
stockholders. The decision to retain KPMG was also approved by
the Company’s Audit Committee.
The reports issued by Deloitte & Touche on the
Company’s consolidated balance sheets as of
December 31, 2010 and 2009 (Successor and Predecessor
periods, respectively, as a result of the Tiptree Transaction)
and consolidated statements of operations, stockholders’
equity and cash flows for the periods August 13, 2010 to
December 31, 2010 (Successor) and January 1, 2010 to
August 12, 2010 (Predecessor) and the years ended
December 31, 2009 and 2008 (Predecessor) did not contain
any adverse opinion or disclaimer of an opinion, nor were these
opinions qualified or modified as to uncertainty, audit scope or
accounting principles.
During the periods August 13, 2010 to December 31,
2010 (Successor) and January 1, 2010 to August 12,
2010 (Predecessor) and the years ended December 31, 2009
and 2008 (Predecessor), and through April 12, 2011, there
were no disagreements between the Company and
Deloitte & Touche on any matters of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Deloitte & Touche,
would have caused Deloitte & Touche to make reference
to the subject matter of the disagreements in its reports on the
Company’s consolidated financial statements for such year
and period. There were no reportable events, as defined in
Item 304(a)(1)(v) of
Regulation S-K,
that occurred during the periods and year referenced above and
through April 12, 2011.
Through April 12, 2011, the Company did not consult with
KPMG regarding any of the matters or events set forth in
Item 304(a)(2)(i) and (ii) of
Regulation S-K.
Deloitte & Touche had served as our independent
registered public accounting firm since our formation and is
considered by our management to be well-qualified. Similarly,
our management considers KPMG to be well-qualified. Both
Deloitte & Touche and KPMG have advised us that
neither it nor any member thereof has any direct or material
indirect financial interest in our Company or any of our
subsidiaries in any capacity.
A representative of KPMG will be present at the Annual Meeting,
will be given the opportunity to make a statement if he or she
so desires and will be available to respond to appropriate
questions. A representative of Deloitte & Touche will
not be present at the Annual Meeting, and will, therefore, not
be given the opportunity to make a statement if he or she so
desires and will not be available to respond to appropriate
questions.
As required by Instruction 2 to Item 304 of
Regulation S-K,
the Company has provided Deloitte & Touche and KPMG
with a copy of the disclosures contained in this Proxy Statement
with respect to the Company’s change of independent
registered public accounting firm and has given
Deloitte & Touche and KPMG the opportunity to present
their respective views with respect to any incorrect or
incomplete disclosures made by the Company. Neither
Deloitte & Touche nor KPMG submitted a statement to
the Company regarding any disagreement with the disclosures
provided herein.
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Audit and
Non-Audit Fees
The following table presents the aggregate fees billed by
Deloitte & Touche for the two most recent fiscal years
ended December 31, 2010 and 2009:
| 2010 | 2009 | |||||||
|
Audit
Fees(1)
|
$ | 860,650.00 | $ | 821,000.00 | ||||
|
Audit-Related
Fees(2)
|
— | — | ||||||
|
Tax
Fees(3)
|
— | — | ||||||
|
All Other Fees
|
— | — | ||||||
|
Total
Fees(4)
|
$ | 860,650.00 | $ | 821,000.00 | ||||
| (1) | Fees related to our annual audit, review of our quarterly reports on Form 10-Q, review of documents filed with the SEC, and the issuance of a consent. | |
| (2) | Fees related to financial accounting and reporting consultations. | |
| (3) | Fees related to tax compliance services and tax planning. | |
| (4) | Fees related to all other services not covered by the audit fees, audit-related fees and tax fees categories. |
Pre-Approval
Policies and Procedures of our Audit Committee
Our Audit Committee has sole authority (with the input of
management) to approve in advance all engagements of our
independent registered public accounting firm for audit or
non-audit services. All audit services provided by
Deloitte & Touche in 2010 and KPMG in 2011 were
pre-approved by our Audit Committee.
Ratification
The Board of Directors asks shareholders to ratify the selection
of KPMG as our independent registered public accounting firm.
Shareholder ratification of the appointment of KPMG as our
independent registered public accounting firm is not required by
our bylaws or other governing documents. However, the Board of
Directors is submitting the appointment of KPMG to the
shareholders for ratification as a matter of good corporate
governance. If the selection is not ratified, the Audit
Committee will consider whether it is appropriate to select
another registered public accounting firm. Even if the selection
is ratified, the Audit Committee, in its discretion, may select
a different registered public accounting firm at any time during
the year if it determines that such a change would be in the
best interests of the Company and our shareholders.
Recommendation
On behalf of the Audit Committee, the Board of Directors
unanimously recommends a vote “FOR” the ratification
of the appointment of KPMG as our independent registered public
accounting firm for the fiscal year ending December 31,
2011.
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COMPENSATION
DISCUSSION AND ANALYSIS
Overview
In the discussion that follows, we provide an overview and
analysis of our compensation programs and policies, the material
compensation decisions we have made under those programs and
policies with respect to our current executive officers and the
material factors that we considered in making those decisions.
Following this Compensation Discussion and Analysis, are a
series of tables containing specific data about the compensation
paid to our executive officers in 2010.
Executive
Overview and Compensation Program Objectives
In November 2010, we transitioned from an externally managed
REIT to a REIT with a hybrid structure, including internal
management and a Services Agreement with TREIT (as more fully
described below), which is an affiliate of Tiptree Capital
Management, LLC (“Tiptree Capital”), by which Tiptree,
our largest shareholder, is externally managed. Prior to this
transition, we had no employees and were managed by CIT
Healthcare. Of our current executive officers, Salvatore (Torey)
V. Riso, Jr., our Chief Executive Officer, was employed by
an affiliate of our former manager, while our Chief Financial
Officer, Steven M. Sherwyn, joined us in a formal capacity after
the transition from CIT Healthcare, and thus we did not pay any
cash compensation to our executive officers in such capacity
while we were managed by CIT Healthcare. In November 2010, in
conjunction with the termination of CIT Healthcare as our
external manager and our transition from an externally managed
REIT to a REIT with a hybrid structure, including internal
management and a Services Agreement with TREIT, we entered into
employment agreements with our Chief Executive Officer,
Mr. Riso and our Chief Financial Officer, Mr. Sherwyn
(the “Employment Agreements”), which were approved by
our CNG Committee, which consists of three of the members of our
Board of Directors, all of whom are independent.
Due to our recent transition from an externally-managed REIT to
a hybrid management structure containing components of both
internal and external management, part of our compensation
objective is to provide compensation packages that take into
account the level of responsibility and scope of duties of each
of our executive officers consistent with an internally managed
structure. In addition, the compensation packages are designed
to achieve our goals of promoting financial and operational
success by attracting, motivating and facilitating the retention
of key employees with outstanding talent and ability. The
compensation packages are also intended to reward the
achievement of specific short and long-term strategic goals that
are tied to creating stockholder value.
Our 2010 executive compensation packages consisted of two
components, which were designed to be consistent with our
compensation objectives: (i) base salary and
(ii) incentive payment. Because our executive officers were
only employed by the Company for two months in 2010, the 2010
executive compensation packages did not include a performance
based cash or equity bonus. We did, however, pay our executive
officers a one time incentive payment, as discussed below.
In structuring the 2010 executive compensation packages, the
Board of Directors and the CNG Committee focused primarily on
our policy of attracting and retaining executive officers with
outstanding abilities who could manage our Company effectively.
Thus, the Board of Directors and CNG Committee designed the 2010
base salaries to be competitive in the marketplace based on the
executive officers’ levels of skill and expertise. The
incentive payments to Mr. Riso were designed to attract him
to remain our President and Chief Executive Officer, which
required him to leave his employment with an affiliate of our
former manager, CIT Healthcare. The incentive payments to
Mr. Sherwyn were designed to attract him to join our
Company as Chief Financial Officer.
Compensation
Methodology
The CNG Committee is responsible for reviewing, evaluating and
approving the performance and compensation of the Chief
Executive Officer as well as recommending to the Board of
Directors the
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compensation of our Chief Financial Officer. The CNG Committee
reviewed the executive compensation structure developed in
conjunction with our transition from an externally managed REIT
to a REIT with a hybrid structure (including internal management
and a Services Agreement with TREIT) and authorized the
negotiation of the Employment Agreements by the Executive
Committee of our Board of Directors (which at the time was
comprised of Michael G. Barnes, the Chairman, and Geoffrey N.
Kauffman, the Vice Chairman) and ultimately approved the
Employment Agreements. Since then, Mr. Riso has become a
member of the Executive Committee. The Employment Agreements
entered into between us and our executive officers established
the executive compensation packages for 2010.
In structuring the compensation packages for 2010, the CNG
Committee was presented with compensation data for executives at
a peer group of other Healthcare REITs, with positions and
responsibilities comparable to those held by our executive
officers to help them consider a competitive level of executive
compensation, which consisted of the following companies:
|
HCP, Inc. Ventas, Inc. Health Care REIT, Inc. Nationwide Health Properties, Inc. Healthcare Realty Trust Incorporated Senior Housing Properties Trust |
Omega Healthcare Investors, Inc. Medical Properties Trust, Inc. National Health Investors, Inc. LTC Properties, Inc. Cogdell Spencer Inc. Universal Health Realty Income Trust |
This data consisted of base salary, cash bonus and equity award
information, as well as total direct compensation paid by each
of the peer companies as reflected in their proxy statements.
Although the CNG Committee reviewed compensation data for
executives at the peer companies with positions comparable to
those held by our executive officers, the CNG Committee did not
benchmark to a particular percentile or specific performance
metric, but rather used the peer group information to help guide
its compensation decisions.
As discussed above, a key priority for us is to attract, retain
and motivate a top quality management team. In order to attract
a high caliber management team, the compensation packages
offered must be competitive within the Healthcare REIT market,
as well as reflective of the executive’s level of skill and
expected contributions. The 2010 compensation packages for
Mr. Riso and Mr. Sherwyn were the result of the CNG
Committee’s understanding of the expected contributions in
connection with the retention of Mr. Riso and the
recruitment of Mr. Sherwyn, and the executive
officers’ level of skill and compensation paid to similar
positions within the peer group.
Executive
Compensation Program Elements
Base Salary: Base salary is intended to reward
core competence in the executive officers’ roles relative
to their skill and experience and is intended to be competitive
to amounts paid to executive officers of other Healthcare REITs.
Following the termination of CIT Healthcare as our external
manager and our transition from an externally managed REIT to a
REIT with a hybrid structure, including internal management and
a Services Agreement with TREIT, from November 16, 2010,
until December 31, 2010, Mr. Riso received a base
salary of $225,000 per annum (prorated for the partial calendar
year); and from November 1, 2010 until November 30,
2010 and from December 1, 2010 until December 31,
2010, Mr. Sherwyn received $150,000 and $200,000 per annum,
respectively (pro-rated for the partial calendar year).
Mr. Sherwyn also served as a consultant to the Company from
September 14, 2010 through October 31, 2010 while the
Company was still externally managed by CIT Healthcare. During
this period, he received total cash compensation of $20,194
related to consulting fees for services rendered.
Incentive Payment: As a part of our 2010
executive compensation packages, one-time cash and equity grants
were awarded to our executive officers. As discussed above,
these incentive payments were intended to assist in retaining
Mr. Riso as our Chief Executive Officer, which required him
to leave his employment with CIT Group, and recruit
Mr. Sherwyn to join our Company as Chief
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Financial Officer. The one-time cash and equity grants included
the following: for Mr. Riso, (i) a $100,000 cash
payment and (ii) a grant of 42,105 shares, with a
then- current market value of approximately $200,000; and for
Mr. Sherwyn, a grant of 10,000 shares, with a
then-current market value of $47,500.
2011
Executive Compensation Program
Unlike our 2010 executive compensation packages, our 2011
packages will consist of three components, which are designed to
be consistent with our compensation objectives: (i) base
salary; (ii) annual cash performance bonus; and
(iii) annual equity performance bonus, which are long-term
equity incentive compensation awards.
In structuring the 2011 executive compensation packages, the
Board of Directors and the CNG Committee considered how each
component promotes recruitment retention of high quality
executive personnel and motivates our management team to meet
and exceed corporate goals and objectives and, ultimately,
enhance shareholder value. Some of the compensation elements,
such as base salaries and annual cash performance bonuses, are
paid on a short-term or current basis. Other elements, such as
the annual equity performance bonuses are subject to multi-year
vesting schedules, and are paid over a longer-term basis. We
believe this mix of short- and long-term compensation allows us
to achieve our goals of attracting, retaining and motivating our
top executive officers. A substantial portion of the cash-based
compensation is comprised of an annual cash bonus that is
dependent on each of our executive officers’ performance
and the performance of the Company as a whole.
Base Salary: We set base salaries at levels
that compensate executive officers for their skill, experience
and contributions to our Company and are competitive with
amounts paid to executive officers of other Healthcare REITs. In
2011, Mr. Riso will receive a base salary of $250,000 and
Mr. Sherwyn will receive a base salary $200,000.
Annual Cash Performance Bonus: Annual cash
bonuses are primarily intended to motivate executive officers to
achieve specific operational and financial objectives. The
Employment Agreements provide for an annual bonus that, in 2011,
could range from $200,000 to $300,000 for Mr. Riso and from
$100,000 to $200,000 for Mr. Sherwyn if certain performance
Threshold, Target and Maximum targets established by the CNG
Committee are reached. For 2011, the targets set by the CNG
Committee are largely non-financial, event-driven targets
related to the restructuring and repositioning of the Company
following the acquisition of control of the Company by Tiptree
Financial in August 2010 and subsequent termination of its
external management agreements with CIT Healthcare. Target
events include settlement or disposition of certain litigation,
re-establishment of regular quarterly dividends, recruitment of
additional management depth, development of acquisition
prospects, development of financing alternatives and development
of corporate infrastructure.
Annual Equity Performance Bonus: Annual equity
bonuses are long-term compensation awards designed to align the
interests of our executive officers with those of our
stockholders. The equity awards granted to our executive
officers are generally subject to time-based vesting
requirements designed to promote the retention of management and
are intended to align the long-term performance and interests of
management to that of our shareholders. Beginning in 2011, the
Employment Agreements provide for an annual equity performance
bonus that, in 2011, could range in value from $125,000 to
$375,000 for Mr. Riso and from $150,000 to $250,000 for
Mr. Sherwyn if certain performance Threshold, Target and
Maximum targets that will be established by the CNG Committee
are reached. These targets are the same as those for annual cash
bonuses. These long-term equity incentive compensation awards
may consist of restricted stock, stock options, stock
appreciation rights or other types of equity bonus awards, as
determined by the CNG Committee and awarded pursuant to the 2007
Care Investment Trust Inc. Equity Plan (the “Equity
Plan”) or any other equity incentive plan in effect at the
time.
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Retirement
Plans
Our executive officers and other members of our Company are
eligible to participate in a 401(k) plan up to the maximum
amount permitted under the Internal Revenue Code of 1986, as
amended, or the Code.
Termination
and
Change-in-Control
Arrangements
Under the Employment Agreements, the current executive officers
are entitled to payments and benefits upon the occurrence of
specified events including termination of employment. The
specific terms of these arrangements are discussed under the
heading “Potential Payments Upon Termination or Change in
Control.” The terms of these arrangements were negotiated
as a part of the Employment Agreements and were considered
reasonable in light of our intention to retain Mr. Riso and
recruit Mr. Sherwyn to join our Company.
Equity
Compensation
Our CNG Committee, may, from time to time, grant equity awards
pursuant to our Equity Plan that is designed to align the
interests of our executive officers with those of our
stockholders, by allowing our executive officers to share in the
creation of value for our stockholders through stock
appreciation and dividends. The equity awards granted to our
executive officers are generally subject to time-based vesting
requirements designed to promote the retention of management and
to achieve strong performance for our Company. These awards
further provide flexibility to us in our ability to attract,
motivate and retain talented individuals. The Company did not
grant any equity awards to any of its executive officers in
2010, however, several grants issued to our current and former
executive officers during prior periods vested during 2010. A
more detailed discussion of the Equity Plan and the grants that
vested during 2010 is included under the heading “Narrative
to Summary Compensation Table for 2010 and Grants of Plan-Based
Awards Table For 2010 — Equity Compensation.”
Policy
with Respect to Section 162(m)
Section 162(m) of the Code generally disallows public
companies a tax deduction for compensation in excess of
$1,000,000 paid to their chief executive officers and certain of
their other executive officers unless certain performance and
other requirements are met. Our intent generally is to design
and administer executive compensation programs in a manner that
will preserve the deductibility of compensation paid to our
executive officers, and we believe that a substantial portion of
our current executive compensation program satisfies the
requirements for exemption from the $1,000,000 deduction
limitation. However, we reserve the right to design programs
that recognize a full range of performance criteria important to
our success, even where the compensation paid under such
programs may not be deductible. The CNG Committee will continue
to monitor the tax and other consequences of our executive
compensation program as part of its primary objective of
ensuring that compensation paid to our executive officers is
reasonable, performance-based and consistent with the goals of
our Company and its stockholders.
Interpretation of and changes in the tax laws and other factors
beyond the CNG Committee’s control may affect the
deductibility of certain compensation payments. The CNG
Committee will consider various alternatives to preserve the
deductibility of compensation payments and benefits to the
extent reasonably practicable and to the extent consistent with
its other compensation objectives.
Analysis
of Risk in Compensation Program
The structure of our Company’s compensation program is
designed to discourage our executive officers from engaging in
unnecessary and excessive risk taking. The compensation program
is structured to focus our executive officers’ attention on
financial and operating results in the near term and also to the
creation of stockholder value over the long term. Our CNG
Committee and Board of Directors considered the current risk
profile of our Company’s 2010 compensation packages when
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approving them and will continue to do so in the future. In
regard to future compensation packages, the CNG Committee will
note ways in which risk is effectively managed or mitigated,
including whether there is a balanced mix of the near term and
long term elements that will comprise those compensation
packages, whether there are varied performance metrics in our
executive officers’ annual cash and equity performance
bonuses and whether the CNG Committee has the ability to employ
discretion when awarding annual and long-term incentive
compensation. Accordingly, we believe that our compensation
program (i) promotes behavior that is focused on the
achievement of financial and operating metrics and supports
sustainable value creation for our stockholders and (ii) is
not reasonably likely to have a material adverse effect on the
Company.
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Table of Contents
COMPENSATION,
NOMINATING AND GOVERNANCE COMMITTEE REPORT
Our CNG Committee has reviewed and discussed the Compensation
Discussion and Analysis required by Item 402(b) of
Regulation S-K
with management and, based on such review and discussions, our
Compensation Committee recommended to our Board of Directors
that the Compensation Discussion and Analysis be included in
this Proxy Statement on Schedule 14A and the Company’s
Annual Report on
Form 10-K/A.
Submitted by our CNG Committee
J. Rainer Twiford (Chairman)
William A. Houlihan
Jonathan Ilany
J. Rainer Twiford (Chairman)
William A. Houlihan
Jonathan Ilany
20
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EXECUTIVE
COMPENSATION
Summary
Compensation
The following table sets forth information regarding the
compensation paid to our named executive officers by us in 2010,
2009 and 2008.
Summary
Compensation Table
|
Cash |
Stock |
|||||||||||||||||||
|
Salary |
Bonus |
Awards1 |
Total |
|||||||||||||||||
|
Name and Principal Position
|
Year | ($) | ($) | ($) | ($) | |||||||||||||||
|
Salvatore (Torey) V. Riso,
Jr.2
|
2008 | $ | — | $ | — | $ | 18,058 | $ | 18,058 | |||||||||||
|
President and Chief Executive Officer
|
2009 | — | — | 149,933 | 149,933 | |||||||||||||||
| 2010 | 28,125 | 100,000 | 290,000 | 418,125 | ||||||||||||||||
|
Steven M.
Sherwyn3
|
2010 | 29,167 | — | 47,500 | 76,667 | |||||||||||||||
|
Chief Financial Officer and Treasurer
|
||||||||||||||||||||
|
Paul F.
Hughes4
|
2009 | — | — | 110,131 | 110,131 | |||||||||||||||
|
Chief Financial Officer and Treasurer
|
2010 | — | — | 54,000 | 54,000 | |||||||||||||||
| (1) | Amounts recognized by the Company for financial statement reporting purposes in the fiscal years ended December 31, 2010, December 31, 2009 and December 31, 2008. For more information about equity grants, see Footnote 14 to our Consolidated Financial Statements in our Annual Report on Form 10-K for each of the years ended December 31, 2010, 2009 and 2008. In accordance with SEC rules, estimates of forfeitures related to service-based conditions have been disregarded. | |
| (2) | On December 10, 2009, Mr. Riso was awarded a performance share award with a Threshold, Target and Maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of the award assuming the achievement of the highest level of performance is $79,800. On February 23, 2010, our Board amended the performance share awards. See “Executive Compensation — Performance Share Awards to Mr. Riso and Mr. Hughes” for more information on the amendment. On August 13, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Riso vested in connection with shareholder approval of the change of control to Tiptree, and Mr. Riso achieved the maximum award of 10,000 shares. The stock award in the table above also includes 42,105 shares issued to Mr. Riso on January 3, 2011 as per the terms of his employment agreement which had a grant date fair value of $200,000 and was recognized by the Company as compensation expense for the fourth quarter in 2010. The salary portion of Mr. Riso’s compensation represents cash compensation earned from November 15, 2010 to December 31, 2010 subsequent to Care’s transition into a hybrid management structure. The 2010 bonus represents a $100,000 one-time cash payment made to Mr. Riso on January 3, 2011 as per the terms of his Employment Agreement. | |
| (3) | Mr. Sherwyn was appointed Chief Financial Officer and Treasurer of the Company on November 4, 2010 and thus was not an executive officer in 2008 or 2009. The stock award in the table above includes 10,000 shares issued to Mr. Sherwyn on January 3, 2011 as per the terms of his employment agreement which had a grant date fair value of $47,500 and was recognized by the Company as compensation expense for the fourth quarter in 2010. The salary portion of Mr. Sherwyn’s compensation in the table above represents cash compensation earned from November 1, 2010 to December 31, 2010 subsequent to Care’s transition to a hybrid management structure. Mr. Sherwyn also served as a consultant to the Company from September 14, 2010 through October 31, 2010 while the Company was still externally managed by CIT Healthcare. During this period, he received total cash compensation of $20,194 related to consulting fees for services rendered. | |
| (4) | Mr. Hughes was appointed Chief Financial Officer and Treasurer of the Company on March 16, 2009 and resigned on November 4, 2010 and thus was not an executive officer in 2008. While Mr. Hughes was an officer of the Company, he was also an employee of CIT Corporate Finance, of which CIT Healthcare, our former Manager, is a part of. On December 10, 2009, Mr. Hughes was awarded a performance share award with a Threshold, Target and Maximum award of 1,500, 3,000 and 6,000 shares, respectively. The grant date fair value of the award assuming the highest level of performance was $47,880. On February 23, 2010, our Board amended the performance share awards. See “Executive Compensation — Performance Share Awards to Mr. Riso and Mr. Hughes” for more information on the amendment. On August 13, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Hughes vested in connection with shareholder approval of the change of control to Tiptree and Mr. Hughes achieved the maximum award of 6,000 shares. |
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Grants of
Plan-Based Awards
The following table sets forth information about awards granted
to our named executive officers by us during the fiscal year
ended December 31, 2010.
Grants of
Plan-Based Awards Table
|
All Other |
Grant |
|||||||||||||||||||||||||||
|
Stock |
Date |
|||||||||||||||||||||||||||
|
Awards: |
Fair |
|||||||||||||||||||||||||||
|
Number of |
Market |
Value of |
||||||||||||||||||||||||||
|
Estimated Future Payouts Under |
Shares of |
Price on |
Stock and |
|||||||||||||||||||||||||
| Equity Incentive Plan Awards | Stock or | Grant | Option | |||||||||||||||||||||||||
|
Threshold |
Target |
Maximum |
Units |
Date |
Awards |
|||||||||||||||||||||||
|
Name
|
Grant Date | (#) | (#) | (#) | (#) | ($/Sh) | ($) | |||||||||||||||||||||
|
Salvatore (Torey) V. Riso, Jr.
|
— | (1) | — | — | — | — | — | — | ||||||||||||||||||||
|
Steven M. Sherwyn
|
— | (2) | — | — | — | — | — | — | ||||||||||||||||||||
|
Paul F. Hughes
|
— | — | — | — | — | — | — | |||||||||||||||||||||
| (1) | On January 3, 2011, as per the terms of his Employment Agreement, the Company issued 42,105 shares to Mr. Riso that had a grant date fair value of $200,000 based on our closing stock price on December 31, 2010 of $4.75 per share and was recognized by the Company as compensation expense for the fourth quarter in 2010. | |
| (2) | On January 3, 2011, as per the terms of his Employment Agreement, the Company issued 10,000 shares to Mr. Sherwyn that had a grant date fair value of $47,500 based on our closing stock price on December 31, 2010 of $4.75 per share and was recognized by the Company as compensation expense for the fourth quarter in 2010. |
Narrative
to Summary Compensation Table for 2010 and Grants of Plan-Based
Awards Table for 2010
The following discussion is intended to be read as a supplement
to (i) the “Summary Compensation Table” and the
“Grants of Plan-Based Awards Table” as well as the
footnotes to such tables and (ii) the disclosure under the
caption “Compensation Discussion and Analysis” above.
Accordingly, the following discussion should be read in
conjunction with such other disclosures.
Employment
Agreements
Beginning in November 2010 in conjunction with our transition
from an externally managed REIT to a REIT with a hybrid
structure, including internal management and a Services
Agreement with TREIT, we entered into Employment Agreements with
each of our executive officers. We have summarized the material
terms of these executive Employment Agreements under the caption
“Compensation Discussion and Analysis” and
“Executive Compensation — Potential Payments Upon
Termination or Change in Control.”
Equity
Compensation
Our CNG Committee, may, from time to time, grant equity awards
designed to align the interests of our executive officers with
those of our stockholders, by allowing our executive officers to
share in the creation of value for our stockholders through
stock appreciation and dividends. The equity awards granted to
our executive officers are generally subject to time-based
vesting requirements designed to promote the retention of
management and to achieve strong performance for our Company.
These awards further provide flexibility to us in our ability to
attract, motivate and retain talented individuals. Our Equity
Plan provides for the issuance of equity-based awards, including
stock options, stock appreciation rights, restricted stock,
restricted stock units, unrestricted stock awards and other
awards based on our common stock that may be made by us to our
directors and officers and to our other employees and advisors
and consultants who are providing services to the Company as of
the date of the grant of the award. Shares of common stock
issued to our independent directors with respect to their annual
retainer fees are also issued under this plan.
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Table of Contents
Our Board of Directors has delegated its administrative
responsibilities under the Equity Plan to our CNG Committee. In
its capacity as plan administrator, the CNG Committee has the
authority to make awards to eligible directors, officers,
employees, advisors and consultants, and to determine what form
the awards will take and the terms and conditions of the awards.
Grants of equity-based or other compensation to our chief
executive officer must also be approved by the independent
members of our Board of Directors.
The following grants were made in January 2011 to our current
executive officers but were recognized as compensation by the
Company in 2010:
Special Incentive Grant to Mr. Riso and
Mr. Sherwyn
On January 3, 2011 as per the terms of his Employment
Agreement, which was executed as part of Care’s transition
from an externally managed REIT to a REIT with a hybrid
structure, including internal management and a Services
Agreement with TREIT, Mr. Riso received 42,105 shares
that had a grant date fair value of $200,000 and was recognized
by the Company as compensation expense for the fourth quarter in
2010.
On January 3, 2011 as per the terms of his Employment
Agreement, which was executed as part of Care’s transition
from an externally managed REIT to a REIT with a hybrid
structure, including internal management and a Services
Agreement with TREIT, Mr. Sherwyn received
10,000 shares that had a grant date fair value of $47,500
and was recognized by the Company as compensation expense for
the fourth quarter in 2010.
The Company did not grant any equity awards to any of its
executive officers in 2010, however the grants described below
vested during 2010:
Special Equity Grant to Mr. Riso and Mr. Hughes
On March 12, 2009, our Board of Directors approved a
special grant of 10,486 restricted stock units to Mr. Riso.
The award was structured to vest in four equal installments
beginning on the first anniversary of the grant date
(March 12, 2010). Our Board of Directors granted the award
to Mr. Riso, which had a grant date fair value of $62,497
based on our closing stock price on March 12, 2009 of $5.96
per share, to recognize Mr. Riso’s continued service
to the Company. On January 28, 2010, under the terms of our
Equity Plan, these restricted stock units, in addition to 12,210
restricted stock units previously issued to Mr. Riso,
vested in connection with shareholder approval of the
Company’s Plan of Liquidation.
On May 7, 2009, our Board of Directors approved a special
grant of 13,333 restricted stock units to Mr. Hughes. The
award was structured to vest in four equal installments
beginning on the first anniversary of the grant date
(May 7, 2010). Our Board of Directors granted the award to
Mr. Hughes, which had a grant date fair market value of
$66,265 based on our closing stock price on May 7, 2009 of
$4.97 per share, to recognize Mr. Hughes’s service to
our company as the new chief financial officer and treasurer. On
January 28, 2010, under the terms of our Equity Plan, these
restricted stock units vested in connection with shareholder
approval of the Company’s Plan of Liquidation.
Performance Share Awards to Mr. Riso and
Mr. Hughes
On December 10, 2009, our Board of Directors awarded
Mr. Riso and Mr. Hughes performance share awards with
target levels of 5,000 and 3,000, respectively. These awards
were amended and restated on February 23, 2010, such that
the awards were triggered upon the execution, during 2010, of
one or more of the following transactions that results in a
return of liquidity to our stockholders within the parameters
expressed in the agreement: (i) a merger or other business
combination resulting in the disposition of all of the issued
and outstanding equity securities of the Company; (ii) a
tender offer made directly to our stockholders either by us or a
third party for at least a majority of our issued and
outstanding common stock; or (iii) the declaration of
aggregate distributions by our Board of Directors equal to or
exceeding $8.00 per share. If the net proceeds were less than
$7.50 per share, each individual would receive 50% of their
respective target awards. If the net proceeds were greater than
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Table of Contents
or equal to $7.50 per share and less than or equal to $7.99 per
share, each individual would receive his respective target
award. If the net proceeds were equal to or exceeded $8.00 per
share, each individual would receive 200% of his respective
target award. Each performance share award would accrue any
distributions declared during the award period without
duplication.
On August 13, 2010, under the terms of the performance
share award and our Equity Plan, the performance share award
issued to Mr. Riso and Mr. Hughes vested in connection
with shareholder approval in connection with the Tiptree
Transaction, and Mr. Riso and Mr. Hughes achieved the
maximum award of 10,000 shares and 6,000 shares,
respectively.
Compensation
Mix
As discussed in more detail in the section “Compensation
Discussion and Analysis,” in 2010, our compensation program
was comprised of the following two elements: (i) base
salary and (ii) initial payment. The base salary awarded to
the executive officers in 2010 was set at a level that was
competitive based on the executive officers’ level of skill
and experience. The initial payments were provided as a means of
incentivizing Mr. Riso to remain our Company’s Chief
Executive Officer and as a means of attracting Mr. Sherwyn
to join our Company.
Performance bonuses were not included in the 2010 executive
compensation packages because the executive officers were only
employees of our Company for less than two months in 2010, which
was not a sufficient amount of time to determine whether a
performance award was justifiable. Beginning in 2011, the
executive compensation packages will include an annual cash
bonus and an annual equity bonus. In implementing these
performance bonuses in 2011, the CNG Committee will seek to
achieve an appropriate balance among these elements to
incentivize our executive officers to focus on financial and
operating results in the near term and the creation of
stockholder value over the long term.
Outstanding
Equity Awards at Fiscal Year End
There were no Care equity awards outstanding as of
December 31, 2010, which is the end of our Company’s
fiscal year.
Option
Exercises and Stock Vested
We have not granted any stock options. Certain stock awards and
restricted stock unit and performance share awards issued to our
named executive officers, as further described in “Equity
Compensation,” vested during the fiscal year ended
December 31, 2010 and are set forth in the table below.
Option
Exercises and Stock Vested Table
| Stock Awards | ||||||||
|
Number of Shares |
||||||||
|
Acquired on |
Value Realized on |
|||||||
|
Vesting |
Vesting |
|||||||
|
Name
|
(#) | ($) | ||||||
|
Salvatore (Torey) V. Riso,
Jr.(1)
|
74,801 | $ | 477,469 | |||||
|
Steven M.
Sherwyn(2)
|
10,000 | 47,500 | ||||||
|
Paul F.
Hughes(3)
|
19,333 | 164,131 | ||||||
| (1) | On January 28, 2010, under the terms of our Equity plan, 22,696 restricted stock units previously issued to Mr. Riso vested in connection with shareholder approval of the Company’s Plan of Liquidation. On December 10, 2009, Mr. Riso was awarded a performance share award with a Threshold, Target and Maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of the award assuming the achievement of the highest level of performance was $79,800. On February 23, 2010, our Board of Directors amended the performance share awards. See “Executive Compensation — Performance Share Awards to Mr. Riso and Mr. Hughes” for more information on the amendment. On August 13, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Riso vested in connection with shareholder approval of the change of control to Tiptree, and Mr. Riso achieved the |
24
Table of Contents
| maximum award of 10,000 shares. Included as part of the stock that vested during 2010 in the table above is 42,105 shares issued to Mr. Riso on January 3, 2011 as per the terms of his Employment Agreement that had a grant date fair value of $200,000 and was recognized by the Company as compensation expense for the fourth quarter in 2010. | ||
| (2) | Included as part of the stock that vested during 2010 in the table above is 10,000 shares issued to Mr. Sherwyn on January 3, 2011 as per the terms of his Employment Agreement that had a grant date fair value of $47,500 and was recognized by the Company as compensation expense for the fourth quarter in 2010. | |
| (3) | On January 28, 2010, under the terms of our Equity plan, 13,333 restricted stock units previously issued to Mr. Hughes vested in connection with shareholder approval of the Company’s Plan of Liquidation. On December 10, 2009, Mr. Hughes was awarded a performance share award with a threshold, target and maximum award of 1,500, 3,000 and 6,000 shares, respectively. The grant date fair value of the award assuming the highest level of performance was $47,880. On February 23, 2010, our Board of Directors amended the performance share awards. See “Executive Compensation — Performance Share Awards to Mr. Riso and Mr. Hughes” for more information on the amendment. On August 13, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Hughes vested in connection with shareholder approval of the change of control to Tiptree, and Mr. Hughes achieved the maximum award of 6,000 shares. |
Pension
Benefits
Our named executive officers received no benefits in fiscal year
2010 from us under defined pension or defined contribution plans.
Nonqualified
Deferred Compensation
Our Company does not have a nonqualified deferred compensation
plan that provides for deferral of compensation on a basis that
is not tax-qualified for our named executive officers.
Other
Plans, Perquisites and Benefits
With limited exceptions, the CNG Committee’s policy is to
provide benefits to executive officers that are substantially
the same as those offered to other officers and employees of our
company at or above the level of vice president. In 2010, we did
not provide our executive officers with any perquisites or
personal benefits.
Potential
Payments Upon Termination or Change in Control
Severance
and Other Benefits Upon Termination of Employment
As described above under “Compensation Discussion and
Analysis,” the Employment Agreements we have entered into
with our current executive officers provide that our executive
officers will receive a base salary, a one time incentive
payment, an annual cash performance bonus (if certain
performance metrics are achieved) and an annual equity
performance bonus (if certain performance metrics are achieved),
and allow the executive officers to participate in benefit plans
and retirement plans of the Company that are generally available
to the other senior management employees of the Company. The
term of each Employment Agreement ends on December 31,
2013; thereafter, the employment period shall be automatically
extended for subsequent one year periods unless written notice
to the contrary is given by either Care or the executive officer
at least ninety days prior to the expiration of the employment
or renewal period. However, the employment period is subject to
earlier termination. The circumstances under which early
termination is possible and the payments the executive officers
will receive upon termination are discussed in more detail below.
The executive officers agreed that during their employment and
for two years following the date of termination, the executive
officers shall not, directly or indirectly, solicit or induce
any officer, director, employee, consultant, agent or joint
venture partner of the Company or any of its affiliates to
terminate his, her or its employment or other relationship with
the Company or any of its affiliates for the purposes of
associating with any competitor of the Company or any of its
affiliates. Additionally, the executive officers agreed that for
the one-year period following the termination of their
employment by either party for any reason (other than
(i) expiration of the term of the Employment Agreement due
to the Company’s notice not to renew the Employment Period,
(ii) termination by the Executive with Good Reason, or
(iii) termination by the Company of the Executive without
cause), he
25
Table of Contents
will not engage, directly or indirectly, whether as principal,
agent, representative, consultant, employee, partner,
stockholder, limited partner, other investor or otherwise,
within the United States, in any business that competes directly
with the principal businesses conducted by the Company as of the
date of termination, as defined in the Employment Agreements.
The executive officers have also agreed that they will hold in
confidence for the benefit of the Company, all of the
information and business secrets in respect of the Company and
its affiliates, and they will not, at any time before or after
their employment ends, willfully use, disclose or divulge any
such information, with a few limited exceptions as set forth in
the Employment Agreements. Additionally, they have agreed that
any Intellectual Property developed by them during their
employment is, and will always remain, solely the property of
the Company and that the executive officers shall have no rights
to such Intellectual Property.
The Employment Agreements contain certain definitions and
provisions that permit us to terminate the executive
officer’s for or without “cause,” which is
generally defined to mean that any of the following events
occurred:
(i) the conviction of, or a plea of nolo contendere
by, the executive officers for the commission of (1) a
felony, (2) any crime involving moral turpitude, deceit,
dishonesty or fraud or (3) any crime resulting in the
executive officer’s incarceration which our Board of
Directors determines to be detrimental to the best interests of
the Company;
(ii) continuing willful failure by the executive officer
for ten business days to substantially perform his duties under
the Employment Agreement (other than such failure resulting from
the executive officer’s incapacity due to physical or
mental illness or subsequent to the issuance of a notice of
termination by executive for good reason) after demand for
substantial performance is delivered by the Company in writing
that specifically identifies the manner in which the Company
believes the executive officer has not substantially performed
his duties; or
(iii) the executive officer’s theft or fraud relating
to the executive officer’s employment or the business of
the Company or its subsidiaries, willful misconduct that is
injurious to the Company or its subsidiaries, or willful
violation of any law, rule, regulation or policy with respect to
a material aspect of the business of the Company.
Under the Employment Agreements, an executive officer may
terminate his employment for “good reason” within
thirty days after the occurrence, without his written consent,
of one of the following events that has not been cured within
ten business days after written notice thereof has been given by
the executive officer to the Company:
(i) the assignment to the executive officer of duties
materially inconsistent with his status as, or removal of any
title of Chief Executive Officer and President (for
Mr. Riso) or Chief Financial Officer (for Mr. Sherwyn);
(ii) the Executive Officer is directed to directly report
to a person other than the CEO (in the case of
Mr. Sherwyn), the Board of Directors or a committee thereof
(unless the Employment Agreement is assigned to an external
management company);
(iii) a reduction by the Company in the executive
officer’s base salary, annual cash bonus opportunity or
annual equity bonus opportunity, or a material failure by the
Company to pay or provide any Base Salary or contractually
committed cash or equity bonus payment or amounts when due;
(iv) the requirement by the Company that the principal
place of performance of the executive officer’s services be
at a location more than fifty miles from the primary office of
the executive officer as of the effective date of the Employment
Agreement; or
(v) a material failure by the Company to comply with any
material provision of the Employment Agreement.
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Table of Contents
If the executive officers’ employment is terminated for any
reason (including the Company’s notice not to renew the
Employment Period and a termination by an executive officer for
good cause), except for a termination due to the executive
officer’s notice not to renew the employment or renewal
period upon expiration of the term of employment, by us for
cause, or by the executive officer without a good reason or on
account of death or disability, the executive officers will be
entitled to the following from us not later than 30 days
after the date of termination (or such earlier time as may be
required by applicable law): (i) Base Salary (at the rate
in effect at the time notice of termination is given) through
the date of termination to the extent theretofore unpaid,
(ii) the value of any vacation days earned but unused
through the date of termination, and (iii) reimbursement
for all business expenses properly incurred in accordance with
Company policy prior to the date of termination and not yet
reimbursed by the Company (collectively, the “Accrued
Obligations”). The executive officer shall also be entitled
to (i) the greater of (1) 12 months or
(2) the number of whole months between the termination date
and February 1, 2013 of such executive officer’s base
salary at the rate in effect at the time of termination from us
not later than 30 days after the date of termination;
(ii) health benefits until the earlier of (1) the
12 month anniversary of the date of termination and
(2) the date upon which executive receives similar health
benefits or is eligible to receive them from a subsequent
employer; (iii) full vesting of the Company’s equity
awards as of the termination date and (d) continuing
exercisability of all stock options and stock appreciation
rights for the lesser of (1) 12 months after the date
of termination or (2) the remainder of their term.
If our executive officers’ employment terminates on account
of death or disability, the executive officers or their estates
shall be entitled to the following: (i) the Accrued
Obligations from us not later than 30 days after the date
of termination (or such earlier time as may be required by
applicable law); (ii) not later than 30 days after the
date of termination, a pro-rated Annual Cash Bonus and Annual
Equity Bonus based upon the number of days in the year of
termination through the date of termination relative to
365 days, assuming for such purposes the performance
targets applicable to the Annual Cash Bonus and the Annual
Equity Bonus have been satisfied at the Target Bonus Level for
the year in which the date of termination occurs;
(iii) health benefits for 12 months following the date
of termination; (iv) full vesting of all Company equity
awards as of the date of termination; and (v) continuing
exercisability of all stock options and stock appreciation
rights for the lesser of (1) 12 months after the date
of termination or (2) the remainder of their term.
If our executive officers are terminated due to the executive
officer’s notice not to renew the employment period or
renewal period upon expiration of their term of employment, by
us for cause or if our executive officer’s employment shall
be terminated by the executive officer without Good Reason, the
executive officers will be entitled to the Accrued Obligations
from us not later than 30 days after the date of
termination (or such earlier time as may be required by
applicable law) and the Company shall have no additional
obligations to the executive officers.
In addition to the benefits described above, upon termination of
employment with us, the executive officers are generally
entitled to amounts or benefits earned or accrued during the
term of employment, including earned but unpaid salary. We have
calculated the amount of any potential payments as if the
termination occurred on December 31, 2010 and therefore
used the closing price of our common stock as reported on the
OTCQX on December 31, 2010, the last trading day of 2010.
In providing the estimated potential payments, we have made the
following general assumptions in all circumstances where
applicable:
| • | The date of termination is December 31, 2010; | |
| • | There is no accrued and unpaid salary; | |
| • | Executive officers are entitled to termination benefits, including those provided for in the 2010 Employment Agreements; | |
| • | The annual base salaries at the time of termination is equal to the annual base salaries effective as of December 31, 2010; |
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| • | There is no unpaid bonus for 2010; | |
| • | There is no unused vacation time; | |
| • | Our cost of continued healthcare benefits is constant over the benefit period; | |
| • | There are no unvested shares under the Company’s equity awards; and | |
| • | There is no unpaid reimbursement for expenses incurred prior to the date of termination. |
Estimated
Potential Payments upon Termination
|
Expiration of the |
||||||||||||||
|
Executive |
Term of the |
|||||||||||||
|
Officer’s Notice |
Employment |
|||||||||||||
|
not to Renew upon |
Agreement due to |
|||||||||||||
|
Expiration of |
the Company’s |
|||||||||||||
|
Term; |
notice not to |
|||||||||||||
|
Termination by |
renew; |
|||||||||||||
|
the Company for |
Termination |
|||||||||||||
|
Cause or by |
by the Company |
|||||||||||||
|
Executive |
Without Cause or |
|||||||||||||
|
without Good |
Termination by |
by Executive for |
||||||||||||
|
Executive Officer
|
Benefit | Reason | Death; Disability | Good Reason | ||||||||||
|
Salvatore (Torey) V. Riso, Jr.
|
Base Salary | $ | — | $ | — | $ | 468,750 | |||||||
| Severance(1) | 300,000 | 300,000 | 300,000 | |||||||||||
| Bonus Payment | — | — | — | |||||||||||
| Vacation | — | — | — | |||||||||||
| Healthcare | — | — | — | |||||||||||
| Vesting of Stock | — | 22,798 | 22,798 | |||||||||||
| Stock Options | — | — | — | |||||||||||
| Business Expenses | — | — | — | |||||||||||
| Total | $ | 300,000 | $ | 322,798 | $ | 791,548 | ||||||||
|
Steven M. Sherwyn
|
Base Salary | $ | — | $ | — | $ | 416,667 | |||||||
| Severance(2) | 47,500 | 47,500 | 47,500 | |||||||||||
| Bonus Payment | — | — | — | |||||||||||
| Vacation | — | — | — | |||||||||||
| Healthcare | — | 22,798 | 22,798 | |||||||||||
| Vesting of Stock | — | — | — | |||||||||||
| Stock Options | ||||||||||||||
| Business Expenses | — | — | — | |||||||||||
| Total | $ | 47,500 | $ | 70,298 | $ | 486,965 | ||||||||
| (1) | The severance award in the table above includes 42,105 shares issued to Mr. Riso on January 3, 2011 as per the terms of his Employment Agreement entered into on November 4, 2010 which had a grant date fair value of $200,000 as well as a $100,000 one-time cash payment for 2010 made to Mr. Riso on January 3, 2011, such amounts as per the terms of his Employment Agreement. | |
| (2) | The severance award in the table above includes 10,000 shares issued to Mr. Sherwyn on January 3, 2011 as per the terms of his Employment Agreement entered into on November 4, 2010 which had a grant date fair value of $47,500. |
Plan of
Liquidation
On January 28, 2010, our stockholders approved a plan of
liquidation, which was filed as Exhibit A to our definitive
proxy statement filed on December 28, 2009. Pursuant to the
terms of the restricted stock and restricted stock and
performance share grant instruments and our Equity Plans,
stockholder approval of the plan of liquidation resulted in the
accelerated vesting of restricted stock and restricted stock and
performance share awards.
28
Table of Contents
On March 12, 2009, our Board of Directors approved a
special grant of 10,486 restricted stock units to Mr. Riso.
The award was structured to vest in four equal installments
beginning on the first anniversary of the grant date
(March 12, 2010). Our Board of Directors granted the award
to Mr. Riso, which had a grant date fair value of $62,497
based on our closing stock price on March 12, 2009 of $5.96
per share, to recognize Mr. Riso’s continued service
to the Company. On January 28, 2010, under the terms of our
Equity Plan, these restricted stock units, in addition to 12,210
restricted stock units previously issued to Mr. Riso,
vested in connection with shareholder approval of the
Company’s Plan of Liquidation.
On May 7, 2009, our Board of Directors approved a special
grant of 13,333 restricted stock units to Mr. Hughes. The
award was structured to vest in four equal installments
beginning on the first anniversary of the grant date
(May 7, 2010). Our Board of Directors granted the award to
Mr. Hughes, which had a grant date fair market value of
$66,265 based on our closing stock price on May 7, 2009 of
$4.97 per share, to recognize Mr. Hughes’s service to
our company as the new chief financial officer and treasurer. On
January 28, 2010, under the terms of our Equity Plan, these
restricted stock units vested in connection with shareholder
approval of the Company’s Plan of Liquidation.
Tiptree
Transaction
On March 16, 2010, we entered into a definitive purchase
and sale agreement with Tiptree under which we agreed to sell
newly issued common stock to Tiptree at $9.00 per share (prior
to the Company’s announcement of a
three-for-two
stock split in September 2010) and to launch a cash tender
offer for up to all of our outstanding common stock at $9.00 per
share (prior to the Company’s announcement of a
three-for-two
stock split in September 2010). The Tiptree Transaction was
approved by our stockholders on August 13, 2010, resulting
in a change of control of the Company.
On December 10, 2009, Mr. Riso was awarded a
performance share award with a threshold, target and maximum
award of 2,500, 5,000 and 10,000 shares, respectively. The
grant date fair value of the award assuming the achievement of
the highest level of performance was $79,800. On
February 23, 2010, our Board of Directors amended the
performance share awards. See “Executive
Compensation — Performance Share Awards to
Mr. Riso and Mr. Hughes” for more information on
the amendment. On August 13, 2010, under the terms of the
performance share award and our Equity Plan, the performance
share award issued to Mr. Riso vested in connection with
shareholder approval of the change of control to Tiptree and
Mr. Riso achieved the maximum award of 10,000 shares.
On December 10, 2009, Mr. Hughes was awarded a
performance share award with a threshold, target and maximum
award of 1,500, 3,000 and 6,000 shares, respectively. The
grant date fair value of the award assuming the highest level of
performance was $47,880. On February 23, 2010, our Board of
Directors amended the performance share awards. See
“Executive Compensation — Performance Share
Awards to Mr. Riso and Mr. Hughes” for more
information on the amendment. On August 13, 2010, under the
terms of the performance share award and our Equity Plan, the
performance share award issued to Mr. Hughes vested in
connection with shareholder approval of the change of control to
Tiptree, and Mr. Hughes achieved the maximum award of
6,000 shares.
29
Table of Contents
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Beneficial
Owners of More Than 5% of Common Stock and Directors and Named
Executive Officers
The following table sets forth the beneficial ownership of our
common stock, as of September 15, 2011, for: (1) each
person known to us to be the beneficial owner of more than 5% of
our outstanding common stock; (2) each of our directors and
nominees for director; (3) each of our named executive
officers; and (4) our directors, nominees for director and
current named executive officers as a group. Except as otherwise
described in the notes below, the following beneficial owners
have sole voting power and sole investment power with respect to
all shares of common stock set forth opposite their respective
names.
In accordance with SEC rules, each listed person’s
beneficial ownership includes:
| • | all shares the investor actually owns beneficially or of record; | |
| • | all shares over which the investor has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund); and | |
| • | all shares the investor has the right to acquire within 60 days (such as upon exercise of options that are currently vested or which are scheduled to vest within 60 days). |
Unless otherwise indicated, all shares are owned directly and
the indicated person has sole voting and investment power.
Unless otherwise indicated, the business address for each
beneficial owner listed below shall be
c/o Care
Investment Trust Inc., 780 Third Avenue, 21st Floor,
New York, New York 10017.
|
Amount and Nature |
||||||||
|
of Beneficial |
||||||||
|
Ownership of |
Percent of |
|||||||
|
Name
|
Common Stock | Total(1) | ||||||
|
Michael G.
Barnes(2)(3)(4)
|
9,944,179 | 92.0 | % | |||||
|
Arif
Inayatullah(2)(3)(4)
|
9,944,179 | 92.0 | % | |||||
|
Tiptree Financial Partners,
L.P.(2)(3)
|
9,930,075 | 91.8 | % | |||||
|
Salvatore (Torey) V. Riso, Jr.
|
42,105 | * | ||||||
|
Steven M. Sherwyn
|
10,000 | * | ||||||
|
Paul F. Hughes
|
0 | * | ||||||
|
Geoffrey N. Kauffman
|
0 | * | ||||||
|
William A. Houlihan
|
2,440 | * | ||||||
|
Jonathan Ilany
|
2,440 | * | ||||||
|
J. Rainer Twiford
|
2,440 | * | ||||||
|
Jean-Michel (Mitch) Wasterlain
|
0 | * | ||||||
|
All Directors and Executive Officers as a Group
(9 Persons)(5)
|
10,003,604 | 92.5 | % | |||||
| * | The percentage of shares beneficially owned does not exceed one percent of the total shares of our common stock outstanding. | |
| (1) | As of September 15, 2011, 10,161,249 shares of common stock were issued and outstanding and entitled to vote. The percent of total for all of the persons listed in the table above is based on 10,813,749 shares which consists of 10,161,249 shares of our outstanding common stock plus 652,500 shares issuable pursuant to a warrant granted by the Company to our former manager CIT Healthcare that was subsequently purchased by Tiptree. | |
| (2) | In a Schedule 13D filed on August 13, 2010, Tiptree was deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended, to hold shared voting and dispositive power over 9,277,575 shares of our Common Stock. By virtue of serving as the manager of Tiptree with respect to our Common Stock, Tiptree Capital was deemed to have shared voting and dispositive power over the shares held by Tiptree. Likewise, Tricadia Holdings, L.P. (“Tricadia Holdings”), by virtue of being a direct owner of Tiptree Capital, was deemed to have shared voting and dispositive power over the shares held by Tiptree. |
30
Table of Contents
| Similarly, Tricadia Holdings GP, LLC (“Tricadia Holdings GP”), as general partner of Tricadia Holdings, was deemed to have shared voting and dispositive power over the shares held by Tiptree. Likewise, Arif Inayatullah and Michael G. Barnes, as direct owners of Tiptree Capital, were each deemed to have shared voting and dispositive power over the shares held by Tiptree. | ||
| (3) | In consideration of the amendment to the Management Agreement between the Company and CIT Healthcare and for CIT Healthcare’s continued and future services to Care, we granted our former Manager a warrant (the “2008 Warrant”) to purchase 435,000 shares of the Company’s common stock at $17.00 per share under the Company’s 2007 Manager Equity Plan (the “Manager Equity Plan”). The 2008 Warrant, which is immediately exercisable, expires on September 30, 2018 (see “Certain Relationships and Related Transactions — Transactions with Related Persons” below). As part of the Tiptree Transaction, Tiptree acquired the 2008 Warrant from CIT Healthcare for $100,000, and the terms of the 2008 Warrant were subsequently adjusted to provide for the purchase of 652,500 shares of the Company’s common stock at $11.33 per share as a result of the three-for-two stock split announced by the Company in September 2010. | |
| (4) | Arif Inayatullah and Michael G. Barnes each filed a Form 4 on August 9, 2011 because they were each deemed to indirectly own 14,104 shares of our Common Stock issued to TREIT as partial payment of the incentive fee due under the Services Agreement between the Company and TREIT. TREIT is owned by Tiptree Capital. By virtue of being a direct owner of Tiptree Capital, Tricadia Holdings was deemed to have shared voting and dispositive power over the shares held by TREIT. Similarly, Tricadia Holdings GP, as general partner of Tricadia Holdings, was deemed to have shared voting and dispositive power over the shares held by TREIT. Likewise, Arif Inayatullah and Michael G. Barnes, as direct owners of Tiptree Capital, were each deemed to have shared voting and dispositive power over the shares held by TREIT. | |
| (5) | None of the shares beneficially owned by our directors or executive officers have been pledged as security for an obligation. |
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors, and
persons who own more than 10% of a registered class of our
equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and persons who own
more than 10% of a registered class of our equity securities are
required to furnish us with copies of all Section 16(a)
forms that they file. To our knowledge, based solely on review
of the copies of such reports furnished to us, all
Section 16(a) filing requirements applicable to our
executive officers, directors and persons who own more than 10%
of a registered class of our equity securities were filed on a
timely basis, except for the following:
| • | Form 4 filed on behalf of Flint D. Besecker on February 4, 2010 for a disposition of 10,000 shares of common stock representing the amount of stock withheld to satisfy tax withholding obligations that occurred on January 28, 2010. | |
| • | Form 4 filed on behalf of Paul F. Hughes on February 4, 2010 for a disposition of 4,809 shares of common stock representing the amount of stock withheld to satisfy tax withholding obligations that occurred on January 28, 2010. | |
| • | Form 4 filed on behalf of Michael P. McDugall on February 4, 2010 for a disposition of 8,243 shares of common stock representing the amount of stock withheld to satisfy tax withholding obligations that occurred on January 28, 2010. | |
| • | Form 4 filed on behalf of Salvatore (Torey) V. Riso, Jr. on February 4, 2010 for a disposition of 9,025 shares of common stock representing the amount of stock withheld to satisfy tax withholding obligations that occurred on January 28, 2010. | |
| • | Form 4 filed on behalf of Steven N. Warden on August 13, 2010 for a disposition of 5,352 shares of common stock representing the amount of stock withheld to satisfy tax withholding obligations that occurred on January 28, 2010. |
31
Table of Contents
Equity
Compensation Plan Information
The following table summarizes information, as of
December 31, 2010, relating to our equity compensation
plans pursuant to which shares of our common stock or other
equity securities may be granted from time to time.
|
(c) |
||||||||||||
|
(a) |
Number of |
|||||||||||
|
Number of |
(b) |
Securities |
||||||||||
|
Securities to be |
Weighted- |
Remaining |
||||||||||
|
Issued Upon |
Average |
Available for |
||||||||||
|
Exercise of |
Exercise Price of |
Future Issuance |
||||||||||
|
Outstanding |
Outstanding |
Under Equity |
||||||||||
|
Options, Warrants |
Options, Warrants |
Compensation |
||||||||||
|
Plan Category
|
and Rights | and Rights | Plans(3) | |||||||||
|
Equity compensation plans approved by security holders
|
||||||||||||
|
Equity
Plan(1)
|
0 | N/A | 358,569 | |||||||||
|
Manager Equity
Plan(2)
|
652,500 | $ | 11.33 | 206,918 | ||||||||
|
Equity compensation plans not approved by security holders
|
N/A | N/A | N/A | |||||||||
|
Total
|
652,500 | N/A | 565,487 | |||||||||
| (1) | Our Equity Plan was adopted by our sole stockholder prior to our initial public offering on June 22, 2007. | |
| (2) | Our Manager Equity Plan was adopted by our sole stockholder prior to our initial public offering on June 22, 2007. The number of shares in Column (a) represents shares issuable upon exercise of a warrant that we granted to our former manager, CIT Healthcare, on September 30, 2008. See “Certain Relationships and Related Transactions — Transactions with Related Persons” below. On March 16, 2010, CIT Healthcare entered into a warrant purchase agreement with Tiptree, pursuant to which, our former Manager sold its warrant to purchase 435,000 shares of our common stock to Tiptree upon the closing of the Tiptree Transaction for $100,000. This warrant was adjusted to reflect the Company’s three-for-two stock split announced in September 2010 and is currently exercisable into 652,500 shares of the Company’s common stock at an exercise price of $11.33 per share. | |
| (3) | The number of shares available for issuance under the Equity Plan and the Manager Equity Plan were adjusted to reflect the three-for-two stock split announced by the Company in September 2010. |
32
Table of Contents
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Policies
and Procedures with Respect to Related Party
Transactions
Pursuant to the Related Person Transaction Policy set forth in
the Charter of the Audit Committee of the Board of Directors,
the “Related Person Transaction Policy” requires that
all related party transactions (generally, transactions
involving amounts exceeding $120,000 in which a related party
(directors, director nominees and executive officers or their
immediate family members, or stockholders owning 5% of more of
our outstanding stock) had or will have a direct or indirect
material interest) shall be subject to pre-approval or
ratification by the Audit Committee in accordance with the
following procedures. No related party transaction shall be
approved or ratified if such transaction is contrary to our best
interests.
Each party to a potential related party transaction is
responsible for notifying our Chief Compliance Officer (or such
other person as the Audit Committee may require) of the
potential related person transaction in which such person or any
immediate family member of such person may be directly or
indirectly involved as soon as he or she becomes aware of such
transaction. Except in circumstances where such transaction is
expected to qualify as an ordinary course transaction
(generally, (i) transactions that occur between Care or any
of its subsidiaries and an entity for which any related person
serves as an executive officer, partner, principal, member or
any similar executive or governing capacity, (ii) an
ordinary course transaction in which such related person has an
economic interest that does not afford such related person
control over such entity on terms and conditions no less
favorable to Care or (iii) immaterial relationships and
transactions in the Instructions to Item 404(a) of
Regulation S-K
of the Securities Act of 1933, as amended) such notification
should be made prior to the time that the transaction is entered
into and such notice shall provide the Chief Compliance Officer
(or such other person) a reasonable opportunity, under the
circumstances, for the required review of such transaction to be
conducted before execution. Our Chief Compliance Officer (or
such other person) will determine whether the transaction should
be submitted to the Audit Committee for consideration. Unless
the Committee otherwise determines after having been notified,
any proposed transaction directly between the Company and any
related party transaction should be reviewed and approved by the
Audit Committee prior to the time that such transaction is
entered into.
While our Chief Compliance Officer (or other person) should be
notified of any related party transaction that is expected to
qualify as an ordinary course transaction, ordinary course
transactions shall not be related person transactions and do not
require Audit Committee approval under our related person
transactions policy. Our Chief Compliance Officer (or such other
person) shall be responsible for making the initial
determination as to whether any transaction appears to be within
the scope required to be disclosed pursuant to Item 404(a)
of
Regulation S-K
or whether such transaction is, in fact, an ordinary course
transaction and must take all reasonable steps to ensure that
all related party transactions or any series of similar
transactions required to be disclosed pursuant to
Item 404(a) of
Regulation S-K
are presented to the Audit Committee for pre-approval or
ratification, if required under the Charter of the Audit
Committee, at such Committee’s next regularly scheduled
meeting, or by consent in lieu of a meeting if deemed
appropriate.
The Audit Committee shall review and assess the adequacy of our
related party transaction policy and procedures annually and
adopt any changes it deems necessary. Annually, each of our
executive officers and directors shall acknowledge their
familiarity and compliance with our Related Person Transaction
Policy.
As discussed below, Care and TREIT are parties to a services
agreement pursuant to which TREIT will provide certain advisory
services regarding the business and operations of the Company
and its subsidiaries. A Conflict of Interest Policy is included
in such services agreement. The Conflicts of Interest Policy
will govern the treatment of conflicts that arise in the course
of dealings between Care and the Manager under the services
agreement. The Related Person Transaction Policy shall govern
the treatment of conflicts of interest that arise outside of the
Conflicts of Interest Policy and shall in no way be deemed to
supersede or otherwise modify or contradict such Conflicts of
Interest Policy.
33
Table of Contents
Transactions
with Related Persons
Management
Agreement
In connection with our initial public offering, we entered into
a Management Agreement dated June 27, 2007 (the
“Management Agreement”) with CIT Healthcare, which
described the services to be provided by our former Manager and
its compensation for those services. Under the Management
Agreement, CIT Healthcare, subject to the oversight of our Board
of Directors, was required to conduct our business affairs in
conformity with the policies approved by our Board of Directors.
The Management Agreement had an initial term scheduled to expire
on June 30, 2011, which would automatically be renewed for
one-year terms thereafter unless terminated by us or CIT
Healthcare.
On September 30, 2008, we entered into an amendment (the
“Amendment”) to the Management Agreement between
ourselves and CIT Healthcare. Pursuant to the terms of the
Amendment, the Base Management Fee (as defined in the Management
Agreement) payable to our former Manager under the Management
Agreement was reduced from a monthly amount equal to
1/12
of 1.75% of the Company’s equity (as defined in the
Management Agreement) to a monthly amount equal to
1/12
of 0.875% of the Company’s equity. In addition, pursuant to
the terms of the Amendment, the Incentive Fee (as defined in the
Management Agreement) payable to CIT Healthcare pursuant to the
Management Agreement was eliminated and the Termination Fee (as
defined in the Management Agreement) payable to CIT Healthcare
upon the termination or non-renewal of the Management Agreement
was amended to equal the average annual Base Management Fee as
earned by our former Manager during the two years immediately
preceding the most recently completed fiscal quarter prior to
the date of termination times three, but in no event less than
$15.4 million. No termination fee would be payable if we
terminated the Management Agreement for cause.
As discussed more fully below in the section titled
“Transactions with Related Persons —
Warrant,” in consideration of the Amendment and for CIT
Healthcare’s continued and future services to the Company,
the Company granted CIT Healthcare warrants to purchase
435,000 shares of the Company’s common stock at $17.00
per share (the “Warrant”) under the Manager Equity
Plan adopted by the Company on June 22, 2007. The Warrant
may also be exercised on a cashless basis in whole or in part
pursuant to a warrant exchange. The number of shares issued
pursuant to the warrant exchange is determined by a formula set
forth in the Warrant. The Warrant, which is immediately
exercisable, expires on September 30, 2018.
On January 15, 2010, we entered into an Amended and
Restated Management Agreement (the “A&R Management
Agreement”) with CIT Healthcare. Pursuant to the terms of
the A&R Management Agreement, which became effective upon
approval of the Company’s plan of liquidation by our
stockholders on January 28, 2010, the Base Management Fee
was reduced to a monthly amount equal to: (i) $125,000 from
February 1, 2010 until the earlier of
(x) June 30, 2010 and (y) the date on which four
(4) of the Company’s six (6) then-existing
investments have been sold; then from such date
(ii) $100,000 until the earlier of
(x) December 31, 2010 and (y) the date on which
five (5) of the Company’s six (6) then-existing
investments have been sold; then from such date
(iii) $75,000 until the effective date of expiration or
earlier termination of the Agreement by either of the Company or
CIT Healthcare; provided, however, that notwithstanding the
foregoing, the base management fee shall remain at $125,000 per
month until the later of: (a) ninety (90) days after
the filing by the Company of a Form 15 with the SEC; and
(b) the date that the Company is no longer subject to the
reporting requirements of the Exchange Act. In addition, the
termination fee payable to CIT Healthcare upon the termination
or non-renewal of the Management Agreement was replaced by a
buyout payment of $7.5 million, payable in installments of:
(i) $2.5 million upon approval of the Company’s
plan of liquidation by our stockholders;
(ii) $2.5 million upon the earlier of
(a) April 1, 2010 and (b) the effective date of
the termination of the A&R Management Agreement by either
of the Company or CIT Healthcare: and
(iii) $2.5 million upon the earlier of
(a) June 30, 2011 and (b) the effective date of
the termination of the A&R Management Agreement by either
the Company or CIT Healthcare. The A&R Management Agreement
also provided CIT Healthcare with an incentive fee of
$1.5 million
34
Table of Contents
if: (i) at any time prior to December 31, 2011, the
aggregate cash dividends paid to the Company’s stockholders
since the effective date of the A&R Management Agreement
equaled or exceeded $9.25 per share or (ii) as of
December 31, 2011, the sum of: (x) the aggregate cash
dividends paid to the Company’s stockholders since the
effective date of the A&R Management Agreement and
(y) the aggregate distributable cash equals or exceeds
$9.25 per share. In the event that the aggregate distributable
cash equaled or exceeded $9.25 per share but for the impact of
payment of a $1.5 million incentive fee, the Company shall
have paid CIT Healthcare an incentive fee in an amount that
allows the aggregate distributable cash to equal $9.25 per
share. Under the A&R Management Agreement, the Mortgage
Purchase Agreement between us and CIT Healthcare was terminated
and all outstanding notices of our intent to sell additional
loans to CIT Healthcare were rescinded. The A&R Management
Agreement was to continue in effect, unless earlier terminated
in accordance with the terms thereof, until December 31,
2011.
On November 4, 2010, the Company entered into a
Termination, Cooperation and Confidentiality Agreement (the
“CIT Termination Agreement”) with CIT Healthcare.
Pursuant to the CIT Termination Agreement, the parties
terminated the A&R Management Agreement on
November 16, 2010 (the “Termination Effective
Date”). The CIT Termination Agreement also provides for a
180-day
cooperation period beginning on the Termination Effective Date
relating to the transition of management of the Company from CIT
Healthcare to the officers of the Company, a two (2) year
mutual confidentiality period and a mutual release of all claims
related to CIT Healthcare’s management of the Company.
Under the CIT Termination Agreement, the parties agreed that in
lieu of the payments otherwise required under the termination
provisions of the A&R Management Agreement, the Company
would pay to CIT Healthcare on the Termination Effective Date
$2.4 million plus any earned but unpaid monthly
installments of the base management fee due under the A&R
Management Agreement. Those amounts were paid in full in
November 2010. The Company previously paid $5.0 million of
this buyout fee during the first two quarters of 2010.
For the periods ended December 31, 2010 and 2009, we
recognized $8.8 million and $2.2 million,
respectively, in management fees and buyout payments made to CIT
Healthcare.
Services
Agreement
On November 4, 2010, the Company entered into a Services
Agreement (the “Services Agreement”) with TREIT, which
is an affiliate of Tiptree Capital, by which Tiptree, our
largest shareholder, is externally managed, pursuant to which
TREIT provides certain advisory services related to the
Company’s business as of the Termination Effective Date.
For such services, the Company pays TREIT a monthly base
services fee in arrears of one-twelfth of 0.5% of the
Company’s Equity (as defined in the Services Agreement), as
adjusted to account for Equity Offerings (as defined in the
Services Agreement), and a quarterly incentive fee equal to the
lesser of (i) 15% of the Company’s AFFO Plus
Gain/(Loss) On Sale (as defined in the Services Agreement) and
(ii) the amount by which the Company’s AFFO Plus Gain
/(Loss) on Sale exceeds an amount equal to Adjusted Equity
multiplied by the Hurdle Rate (as defined in the Services
Agreement). Twenty percent (20%) of any such incentive fee shall
be paid in shares of common stock of the Company, unless a
greater percentage is requested by TREIT and approved by an
independent committee of directors. The initial term of the
Services Agreement extends until December 31, 2013. Unless
terminated earlier in accordance with its terms, the Services
Agreement will be automatically renewed for one year periods
following such date unless either party elects not to renew. If
the Company elects to terminate without cause, or elects not to
renew the Services Agreement, a Termination Fee (as defined in
the Services Agreement) shall be payable by the Company to TREIT.
For the year ended December 31, 2010, we paid
$0.1 million in base service fees to TREIT. We did not pay
an incentive fee to TREIT for the fiscal year ended
December 31, 2010.
Michael Barnes, one of the Company’s directors, is the
Chief Executive Officer of TREIT. Additionally, Mr. Barnes
is the Chief Investment Officer and Chief Executive Officer of
Tiptree and an equity owner of Tricadia Holdings, which is the
parent of Tiptree Capital, the external manager of
35
Table of Contents
Tiptree. Mr. Barnes is the Chief Executive Officer of
Tiptree Capital. Furthermore, Mr. Barnes is a managing
member of Tricadia GP Holdings, which is the managing member of
Tricadia Capital, LLC, the General Partner of Tiptree.
Mr. Barnes is also a managing member of Tricadia Holdings
GP, the general partner of Tricadia Holdings. Because of his
positions, Mr. Barnes indirectly receives cash and share
compensation made by the Company to TREIT as payment of the base
and incentive fees under the Services Agreement.
Geoffrey Kauffman, one of the Company’s directors, is the
President of TREIT. Additionally, Mr. Kauffman is the
President and Chief Operating Officer of Tiptree, and he is the
President of Tiptree Capital, the external manager of Tiptree.
Because of his positions, Mr. Kauffman indirectly receives
cash and share compensation made by the Company to TREIT as
payment of the base and incentive fees under the Services
Agreement.
Warrant
In consideration of the Amendment and for CIT Healthcare’s
continued and future services to the Company, the Company
granted the Warrant to our former manager. The Warrant, which is
immediately exercisable, expires on September 30, 2018. As
part of the Tiptree Transaction, Tiptree, our largest
shareholder, acquired the Warrant from CIT Healthcare for
$100,000. The Warrant was adjusted to reflect the Company’s
three-for-two
stock split announced in September 2010 and is currently
exercisable into 652,500 shares of the Company’s
common stock at an exercise price of $11.33 per share for a
total value of $7,392,825. The Warrant may also be exercised on
a cashless basis in whole or in part pursuant to a warrant
exchange. The number of shares issued pursuant to the warrant
exchange is determined by a formula set forth in the Warrant.
Mortgage
Purchase Agreement
On September 30, 2008, we entered into a Mortgage Purchase
Agreement (the “MPA”) with CIT Healthcare in order to
secure a potential additional source of liquidity. The MPA
expired on September 30, 2009. Pursuant to the MPA, we had
the right, but not the obligation, to cause CIT Healthcare to
purchase our current senior mortgage assets at their
then-current fair market value, as determined by a third party
appraiser. However, the MPA provided that in no event would CIT
Healthcare be obligated to purchase any mortgage asset if
(a) CIT Healthcare had already purchased mortgage assets
with an aggregate sale price of $125.0 million pursuant to
the MPA or (b) the third-party appraiser determined that
the fair market value of such mortgage asset was greater than
105% of the then outstanding principal balance of such mortgage
asset. We had the right to exercise our rights under the MPA
with respect to any or all of the mortgage assets identified in
the MPA at any time or from time to time until the MPA expired
on September 30, 2009.
Pursuant to the MPA, we sold loans made to four
(4) borrowers with carrying amounts of $24.8 million,
$22.5 million, $2.9 million and $18.7 million for
total proceeds of $65.2 million. The sale of the first loan
closed in November of 2008 and the Company recorded a loss on
the sale of $2.4 million in the consolidated statement of
operations for the year ended December 31, 2008. The second
loan closed in February of 2009 at a loss of $4.5 million,
the third loan closed in August 2009 at its approximate net
carrying value and the fourth loan closed in September 2009 at a
loss of $1.3 million. In consideration of the A&R
Management Agreement, we agreed to terminate the MPA and rescind
all outstanding put notices under the MPA.
Purchase
and Sale Agreement
On March 16, 2010, the Company and Tiptree entered into a
purchase and sale agreement that was amended on July 6,
2010 (the “Purchase and Sale Agreement”), pursuant to
which, on August 13, 2010 the Company issued, and Tiptree
purchased, 6,185,050 newly issued shares of our common stock for
a purchase price of $9.00 per share (prior to the Company’s
announcement of a
three-for-two
stock split in September 2010) for a value of
$55.67 million. In the Purchase and Sale Agreement, we
agreed to use the proceeds from the issuance of common stock to
Tiptree to fund the tender offer for up to all of our
outstanding common stock at a fixed price of $9.00 per share
(prior to the Company’s
36
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announcement of a
three-for-two
stock split in September 2010). Pursuant to the effected tender
offer, and purchase of shares, Tiptree acquired approximately
92.2% of the issued and outstanding shares of the Company’s
common stock. Michael G. Barnes and Geoffrey N. Kauffman, both
of whom are directors of the Company and are executive officers
of Tiptree and other related entities, as discussed above in the
section titled “Transactions with Related
Persons — Services Agreement,” may be deemed to
have an indirect material interest in the purchase and sale
agreement because of their relationships with Tiptree and its
related entities.
Shared
Office Space
Beginning in November 2010, the Company began sharing office
space with Tiptree. The Company continues to share office space
with Tiptree at its corporate headquarters as per the terms of
the Services Agreement and does not receive any reimbursements
from Tiptree related to the current rent payments of
approximately $20k per month.
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PROPOSAL 3:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Proposal
The recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, or the Dodd-Frank Act and
Section 14A of the Securities Exchange Act of 1934 enables
our stockholders to vote to approve, on an advisory basis, the
compensation of our named executive officers as set forth in
this Proxy Statement. Specifically, this Proposal 3,
commonly known as a
“Say-On-Pay”
proposal, gives our stockholders the opportunity to express
their views on the compensation of our named executive officers.
This vote is not intended to address any particular form of
compensation but rather the overall compensation of our named
executive officers and the philosophy, policies and practices
described in this Proxy Statement. A more detailed discussion
regarding the compensation of our named executive officers is
provided under the captions “Compensation Discussion and
Analysis” and “Executive Compensation” above.
As described in detail under the heading “Compensation
Discussion and Analysis,” our compensation objective is to
provide compensation packages that take into account the level
of responsibility and scope of duties of each of our executive
officers consistent with an internally managed structure. In
addition, the compensation packages are designed to achieve our
goals of promoting financial and operational success by
attracting, motivating and facilitating the retention of key
employees with outstanding talent and ability. The compensation
packages are also intended to reward the achievement of specific
short and long-term strategic goals that are tied to creating
stockholder value. We encourage you to carefully review the
section of this proxy statement entitled “Compensation
Discussion and Analysis” for additional details on our
executive compensation program as well as the reasons and
processes for how our CNG Committee determined the structure and
amounts of the 2010 compensation of our named executive officers.
The vote for this Proposal 3 is advisory and is, therefore,
not binding upon the CNG Committee, our Board of Directors or
the Company. The vote on this resolution is not intended to
address any specific element of compensation, but rather relates
to the overall compensation of our named executive officers, as
described in this Proxy Statement in accordance with the
compensation disclosure rules of the Securities and Exchange
Commission. Our CNG Committee and our Board of Directors value
the opinions of our stockholders and, to the extent there is any
significant vote against the compensation of our named executive
officers as disclosed in this Proxy Statement, we will carefully
consider our stockholders’ concerns, and the CNG Committee
and our Board of Directors will evaluate whether any actions are
necessary to address such concerns.
We are asking our stockholders to indicate their support for the
compensation of our named executive officers as set forth in
this Proxy Statement. Accordingly, we will ask our stockholders
to vote “FOR” the following resolution at the Annual
Meeting:
“RESOLVED, that the stockholders of Care Investment
Trust Inc. approve, on an advisory basis, the compensation
of Care Investment Trust Inc.’s named executive
officers, as disclosed pursuant to Item 402 of
Regulation S-K,
including the Compensation Discussion and Analysis, executive
compensation tables and narrative discussion, as set forth in
this Proxy Statement.”
Recommendation
The Board of Directors recommends a vote “FOR”
Proposal 3.
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PROPOSAL 4:
ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE
COMPENSATION
Proposal
The Dodd-Frank Act and Section 14A of the Securities
Exchange Act of 1934 also enable our stockholders to indicate
how frequently we should seek an advisory vote on the
compensation of our named executive officers such as
Proposal 3 (advisory (non-binding) vote on executive
compensation). By voting, stockholders may indicate whether they
would prefer an advisory vote on named executive officer
compensation every “1 YEAR,” “2 YEARS,” or
“3 YEARS.” Shareholders also may, if they wish,
abstain from casting a vote on this proposal.
After careful consideration, our CNG Committee and our Board of
Directors have determined that an advisory vote on executive
compensation that occurs every “3 YEARS” is the most
appropriate alternative for the Company, and, therefore, our
Board of Directors recommends that you vote for a frequency of
“3 YEARS” for the advisory vote on executive
compensation.
The Board of Directors has determined that an advisory vote on
executive compensation that occurs once every three years is the
most appropriate alternative for the Company and, therefore, the
Board of Directors recommends that you vote for a three
year-interval for the advisory vote on executive compensation.
In determining to recommend that shareholders vote for a
frequency of once every three years, the Board of Directors
considered how an advisory vote at this frequency will provide
our shareholders with sufficient time to evaluate the
effectiveness of our overall compensation philosophy, policies
and practice in the context of our long-term business results
for the corresponding period, while avoiding over-emphasis on
short term variations in compensation and business results. An
advisory vote occurring once every three years will also permit
our shareholders to observe and evaluate the impact of any
changes to our executive compensation policies and practices
which have occurred since the last advisory vote on executive
compensation, including changes made in response to the outcome
of a prior advisory vote on executive compensation.
The vote for this Proposal 4 is advisory and is therefore
not binding upon the Compensation Committee, our Board of
Directors or the Company. Accordingly, although we value the
opinions of our stockholders and carefully consider their
concerns, the Compensation Committee and our Board of Directors
may decide that it is in the best interests of our stockholders
and the Company to hold an advisory vote on executive
compensation more or less frequently than the option that is
approved by our stockholders.
You may cast your vote on your preferred voting frequency by
choosing the option of “1 YEAR,” “2 YEARS,”
or “3 YEARS” or abstain from voting when you vote in
response to the resolution set forth below.
“RESOLVED, that the stockholders of Care Investment
Trust Inc. determine, on an advisory basis, whether the
stockholders of Care Investment Trust Inc. shall conduct an
advisory vote every one year, two years or three years regarding
the compensation of Care Investment Trust Inc.’s named
executive officers as disclosed pursuant to Item 402 of
Regulation S-K,
including the Compensation Discussion and Analysis, executive
compensation tables and narrative discussion, as set forth in
Care Investment Trust Inc.’s annual proxy
statements.”
Recommendation
The Board of Directors Recommends that you vote “3
YEARS” with respect to Proposal 4.
39
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ADDITIONAL
INFORMATION
Solicitation
of Proxies
We will pay the cost of solicitation of proxies. In addition to
the solicitation of proxies by mail, our directors, officers and
employees may also solicit proxies personally or by telephone
without additional compensation for such activities. We may also
request persons, firms and corporations holding shares in their
names or in the names of their nominees, which are beneficially
owned by others, to send proxy materials to and obtain proxies
from such beneficial owners. We will reimburse such holders for
their reasonable expenses.
Stockholder
Proposals
Proposals for Inclusion in the Proxy
Statement. Under the rules of the SEC, if a
stockholder wants to include a proposal for consideration in our
proxy statement and proxy card at our 2012 annual meeting of
stockholders, which the Company intends to hold on or about
June 29, 2012, the proposal must be received at corporate
headquarters located at Care Investment Trust Inc., 780
Third Avenue, 21st Floor, New York, NY 10017, Attn:
Danielle M. DePalma, Senior Counsel, Chief Compliance Officer
and Secretary, no later than 5:00 p.m., Eastern Daylight
Time, on March 1, 2012. Such proposals must comply with all
applicable requirements of
Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as
amended
(“Rule 14a-8”)
and our Third Amended and Restated Bylaws.
Proposals to be Offered at an Annual
Meeting. Under Article II, Section 10
of our Third Amended and Restated Bylaws, and as permitted by
the rules of the SEC, certain procedures are provided that a
stockholder must follow to nominate persons for election as
directors or to introduce an item of business at an annual
meeting if such matter is not intended to be considered for
inclusion in the proxy statement, pursuant to
Rule 14a-8.
These procedures provide that nominations for director nominees
and/or an
item of business to be introduced at an annual meeting of
stockholders must be submitted in writing by certified mail to
the Secretary of the Company at our corporate headquarters
located at Care Investment Trust Inc., 780 Third Avenue,
21st Floor, New York, NY 10017, Attn: Danielle M. DePalma,
Senior Counsel, Chief Compliance Officer and Secretary. We must
receive the notice of your intention to introduce a nomination
or proposed item of business at our 2012 Annual Meeting no
earlier than January 31, 2012 and no later than
5:00 p.m., Eastern Daylight Time, on March 1, 2012. In
addition, nominations for a non-incumbent director must be
accompanied by information concerning the proposed nominee,
including such information as is required by Article II,
Section 10 of our Third Amended and Restated Bylaws and the
SEC’s proxy rules.
Householding
of Proxy Materials
The SEC has adopted rules that permit companies and
intermediaries (such as banks and brokers) to satisfy the
delivery requirements for proxy statements and annual reports
with respect to two or more stockholders sharing the same
address by delivering a single proxy statement addressed to
those stockholders. This process, which is commonly referred to
as “householding,” potentially means extra convenience
for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are our
stockholders will be “householding” our proxy
materials. A single proxy statement will be delivered to
multiple stockholders sharing an address unless contrary
instructions have been received from the impacted stockholders.
Once you have received notice from your broker that they will be
“householding” communications to your address,
“householding” will continue until you are notified
otherwise or until you revoke your consent. If you did not
respond that you did not want to participate in householding,
you were deemed to have consented to the process. Stockholders
may revoke their consent at any time by contacting Care
Investment Trust Inc., 780 Third Avenue, 21st Floor,
New York, NY 10017, Attn:
40
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Steven M. Sherwyn, Chief Financial Officer and Treasurer or call
our corporate number at
(212) 446-1410.
Upon written or oral request, we will promptly deliver a
separate copy of this Proxy Statement, the Annual Report and any
other proxy materials, to any stockholder at a shared address to
which a single copy of any of those documents was delivered. To
receive a separate copy of this Proxy Statement, the Annual
Report and any other proxy materials, you may send a written
request to Care Investment Trust Inc., 780 Third Avenue,
21st Floor, New York, NY 10017, Attn: Danielle M. DePalma,
Senior Counsel, Chief Compliance Officer and Secretary, Phone
Number
(212) 446-1412.
In addition, if you are receiving multiple copies of this Proxy
Statement, Annual Report or other proxy materials, you can
request householding by contacting our Corporate Secretary in
the same manner.
OTHER
MATTERS
Our Board of Directors does not know of any matters other than
those described in this Proxy Statement that will be presented
for action at the Annual Meeting. If other matters are
presented, proxies will be voted in accordance with the best
judgment of the proxy holders.
By Order of our Board of Directors
Danielle M. DePalma
Senior Counsel, Chief Compliance Officer and Secretary
New York, New York
September 30, 2011
41
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|
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CARE INVESTMENT TRUST INC. 780 THIRD AVENUE 21ST FLOOR NEW YORK, NY 10017 |
VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 PM Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy
materials, you can consent to receiving all future proxy statements, proxy cards
and annual reports electronically via e-mail or the Internet. To sign up for electronic
delivery, please follow the instructions above to vote using the Internet and,
when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 PM Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we
have provided or return it to Care Investment Trust Inc., Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.
VOTE IN PERSON:
You may vote in person by attending the Annual Meeting. Please check the
meeting materials for any special requirements for meeting attendance. At the
meeting, you will need to request a ballot to vote.
|
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS
FOLLOWS: |
||||
| M38488-P16243 | KEEP THIS PORTION FOR YOUR RECORDS | |||
| DETACH AND RETURN THIS PORTION ONLY |
THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED.
| CARE INVESTMENT TRUST INC. | For All |
Withhold All |
For All Except |
To withhold authority to vote for any individual
nominee(s), mark “For All Except”
and write the
number(s) of the nominee(s) on the line below. |
|||||||||
| The Board of Directors recommends you vote “FOR ALL” on the following proposal: |
o |
o |
o |
||||||||||
| Vote on Directors |
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| 1. | Election of Directors | ||||||||||||
| Nominees: | |||||||||||||
|
01) Michael G. Barnes 05) Salvatore (Torey) V. Riso, Jr.
02) Geoffrey N. Kauffman 06) J. Rainer Twiford 03) William A. Houlihan 07) Jean-Michel (Mitch) Wasterlain 04) Jonathan Ilany |
|
||||||||||||
Vote on Proposal |
||||||||||||
The Board of Directors recommends you vote “FOR” the following proposals: |
For | Against | Abstain | |||||||||
| 2. | To ratify the selection of KPMG LLP as our independent
registered public accounting firm for the fiscal year ending December 31, 2011. |
o | o | o | ||||||||
| 3. | To approve, in an advisory (non-binding)
vote, the compensation of our named executive officers.
|
o | o | o | ||||||||
The Board of Directors recommends
you vote “3 YEARS” on the following proposal: |
||||||||||||
| 1 Year | 2 Years | 3 Years | Abstain | |||||||||
| 4. | To determine, in an advisory (non-binding) vote,
whether a stockholder vote to approve the compensation of our named executive officers should occur every 1 (one), 2 (two) or 3 (three) years.
|
o | o | o | o | |||||||
| NOTE: To conduct such other business as may properly come before the meeting or any adjournment or postponement thereof. | ||||||||||||
Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney,
executor, administrator, or other fiduciary, please give full title as such. Joint owners
should each sign personally. All holders must sign. If a corporation or partnership, please
sign in full corporate or partnership name, by duly authorized officer. |
||||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (If held jointly) | Date | |||||||||||
Table of Contents
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.
M38489-P16243
CARE INVESTMENT TRUST INC.
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 3, 2011
10:00 AM Local Time
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 3, 2011
10:00 AM Local Time
This proxy card is solicited on behalf of
The Board of Directors for the Annual Meeting of Stockholders on November 3, 2011
The Board of Directors for the Annual Meeting of Stockholders on November 3, 2011
The undersigned hereby appoints Steven M. Sherwyn and Salvatore (Torey) V.
Riso, Jr., and each of them, as proxies, with full power of substitution, to represent
and vote all of the undersigned’s shares of Care Investment Trust Inc. Common Stock held of
record as of the close of business on September 15, 2011 at the Annual Meeting of
Stockholders to be held on Thursday, November 3, 2011 at 10:00 AM Local Time at the Care
Investment Trust Inc. corporate offices, 780 Third Avenue, 29th Floor, New York, NY 10017, and any
adjournments or postponements thereof, upon all subjects that may properly come before the meeting,
including the matters described in the proxy statement furnished herewith, subject to any direction
indicated on the reverse side of this card. The shares of Common Stock you beneficially own will be voted
as you specify. If no directions are given, the proxies will vote “FOR ALL” nominees in Proposal
1, “FOR” Proposals 2 and 3 and “3 YEARS” on Proposal 4.
In the event that (i) any nominee herein becomes unable or unwilling to serve, or (ii) any other matter properly comes before
the meeting, the proxies are authorized to vote in the manner recommended by the
Board of Directors for such vote or, if no recommendation is made, in the discretion of the proxies.
Please mark, sign and date this proxy card and return it promptly in the enclosed postage-paid envelope so that
the shares may be represented at the Annual Meeting.
Continued and to be signed on reverse side
TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING iiiWhat is the purpose of the meeting? iiiHow does the Board of Directors recommend I vote on these proposals? ivWho is entitled to vote at the meeting? ivHow many shares can vote? ivWhat constitutes a quorum? ivHow do I vote? ivHow many votes do I have? vHow is my vote counted? vWhat vote is needed to approve each proposal? vHow are broker non-votes and abstentions treated for purposes of the proposals? viWhat other information should I review before voting? viCan I change my vote after I submit my proxy card or give instructions over the Internet or telephone? viHow can I determine the results of the voting at the Annual Meeting? viiWho is soliciting my proxy? viiWho should I contact if I have any questions? viiPROPOSAL 1: ELECTION OF DIRECTORSProposalRecommendationInformation Regarding the Nominees for ElectionExecutive Officers and Executive CommitteeThe Board of Directors and its CommitteesDirector CompensationCORPORATE GOVERNANCE MATTERSCorporate Governance GuidelinesDirector Resignation PolicyDirector IndependenceCode of Business ConductCommunications with our Board of DirectorsWhistleblowing and Whistleblower Protection PolicyDirector Attendance at Annual MeetingsIdentification of Director CandidatesExecutive Sessions of Independent DirectorsCurrent Board Leadership StructureBoards Role in Risk OversightCNG Committee Interlocks and Insider ParticipationAUDIT COMMITTEE REPORTPROPOSAL 2: RATIFICATION OF APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMProposalAudit and Non-Audit FeesPre-Approval Policies and Procedures of our Audit CommitteeRatificationRecommendation