Continucare Corporation
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
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
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o Preliminary
proxy statement
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o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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þ Definitive
proxy statement
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o Definitive
Additional Materials
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o Soliciting
Material under
Rule 14a-12
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Continucare Corporation
(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):
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þ
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No fee required.
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o
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1) |
Title of each class of securities to which transaction applies:
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(2) |
Aggregate number of securities to which transaction applies:
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(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):
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(4) |
Proposed maximum aggregate value of transaction:
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o
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Fee paid previously with preliminary materials.
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o
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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.
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(1) |
Amount Previously Paid:
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(2) |
Form, Schedule or Registration Statement No.:
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January 8, 2008
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to
attend the Annual Meeting of Shareholders of Continucare
Corporation to be held at its executive offices, 7200 Corporate
Center Drive, Suite 600, Miami, Florida 33126 on Tuesday,
February 5, 2008 at 9:30 a.m. Eastern Standard
Time.
The attached Notice of Annual Meeting and Proxy Statement
describe the matters that we expect to be acted upon at the
Annual Meeting. At the Annual Meeting, you will have an
opportunity to meet management and ask questions.
Whether or not you plan to attend the Annual Meeting, it is
important that you vote your shares. Regardless of the number of
shares you own, please sign and date the enclosed proxy card and
promptly return it to us in the enclosed postage paid envelope.
If you sign and return your proxy card without specifying your
choices, your shares will be voted in accordance with the
recommendations of the Board of Directors contained in the Proxy
Statement.
We look forward to seeing you on February 5, 2008 and urge
you to return your proxy card as soon as possible.
Sincerely,
Richard C. Pfenniger, Jr.
Chairman, Chief Executive Officer and
President
CONTINUCARE
CORPORATION
7200 Corporate Center Drive, Suite 600, Miami, Florida
33126
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on Tuesday, February 5, 2008
To the
Shareholders of Continucare Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Continucare Corporation, a Florida corporation
(Continucare), will be held at 9:30 a.m., local
time, on Tuesday, February 5, 2008, at the executive
offices of Continucare Corporation, 7200 Corporate Center Drive,
Suite 600, Miami, Florida, 33126, for the following
purposes:
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(1)
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The election of seven members to Continucares Board of
Directors to hold office until Continucares next annual
meeting of shareholders or until their successors are duly
elected and qualified;
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(2)
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The ratification of the appointment of Ernst & Young
LLP as Continucares independent registered public
accounting firm; and
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(3)
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The transaction of such other business as may properly come
before the Annual Meeting and any adjournments or postponements
thereof.
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The Board of Directors has fixed the close of business on
January 2, 2008 as the record date for determining those
shareholders entitled to notice of, and to vote at, the Annual
Meeting and any adjournment(s) or postponement(s) thereof.
Whether or not you expect to be present, please sign, date and
return the enclosed proxy card in the enclosed pre-addressed
envelope as promptly as possible. No postage is required if
mailed in the United States.
By Order of the Board of Directors
Fernando L. Fernandez
Senior Vice President Finance, Chief
Financial Officer, Treasurer and
Secretary
Miami, Florida
January 8, 2008
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER YOU PLAN TO ATTEND THE MEETING, ALL SHAREHOLDERS ARE
RESPECTFULLY URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY CARD
AS PROMPTLY AS POSSIBLE. SHAREHOLDERS OF RECORD WHO EXECUTE A
PROXY CARD MAY REVOKE THEIR PROXY IN THE MANNER DESCRIBED IN THE
PROXY STATEMENT AND VOTE THEIR SHARES IN PERSON AT THE MEETING.
TABLE OF CONTENTS
ANNUAL
MEETING OF SHAREHOLDERS
OF
CONTINUCARE CORPORATION
PROXY
STATEMENT
This proxy statement is furnished in connection with the
solicitation by the Board of Directors of Continucare
Corporation (Continucare) of proxies from the
holders of Continucares common stock for use at the Annual
Meeting of Shareholders of Continucare to be held at
9:30 a.m., local time, on Tuesday, February 5, 2008,
at Continucares executive offices, 7200 Corporate Center
Drive, Suite 600, Miami, Florida, 33126 or at any
adjournments or postponements thereof, pursuant to the foregoing
Notice of Annual Meeting of Shareholders (the Annual
Meeting). This proxy statement and the enclosed form of
proxy are first being sent to shareholders on or about
January 8, 2008.
Shareholders should review the information provided herein in
conjunction with Continucares annual report to
shareholders, a copy of which accompanies this proxy statement.
Continucares principal executive offices are located at
7200 Corporate Center Drive, Suite 600, Miami, Florida
33126 and its telephone number is
(305) 500-2000.
INFORMATION
CONCERNING YOUR PROXY
The enclosed proxy is solicited on behalf of Continucares
Board of Directors. The giving of a proxy does not prevent a
shareholder of record to vote in person at the Annual Meeting
should a shareholder of record giving a proxy so desire.
Shareholders of record have an unconditional right to revoke
their proxy at any time prior to the vote at the Annual Meeting,
either in person at the Annual Meeting or by filing with
Continucares Secretary at Continucares headquarters
a written revocation or duly executed proxy bearing a later
date; however, no such revocation will be effective until
written notice of the revocation is received by Continucare at
or prior to the Annual Meeting. If you hold your shares
beneficially in street name through your broker, you
must obtain a signed proxy from the record holder in order to
vote the shares in person at the Annual Meeting.
The cost of preparing, assembling and mailing this proxy
statement, the Notice of Annual Meeting of Shareholders and the
enclosed proxy is to be borne by Continucare. In addition to the
use of mail, Continucares employees may solicit proxies
personally, by telephone and by facsimile. Continucares
employees will receive no compensation for soliciting proxies
other than their regular salaries. Continucare may request
banks, brokers and other custodians, nominees and fiduciaries to
forward copies of the proxy material to their principals and to
request authority for the execution of proxies. Continucare may
reimburse such persons for their expenses in so doing.
PURPOSES
OF THE MEETING
At the Annual Meeting, Continucares shareholders will
consider and vote upon the following matters:
(1) The election of seven members to Continucares
Board of Directors to hold office until Continucares next
Annual Meeting of Shareholders or until their successors are
duly elected and qualified;
(2) The ratification of the appointment of
Ernst & Young LLP as Continucares independent
registered public accounting firm; and
(3) The transaction of such other business as may properly
come before the Annual Meeting, including any adjournments or
postponements thereof.
Shares represented by valid proxies will be voted in the manner
specified in such proxy. Shares represented by valid proxies
which do not contain voting instructions as to a matter will be
voted FOR the election of the nominees for director named
below and FOR the ratification of the appointment of
Ernst & Young LLP as Continucares independent
registered public accounting firm. In the event that any other
business may properly come before the meeting, the shares
represented by valid proxies received pursuant to this
solicitation will be voted in the discretion
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of the proxy holder. In the event a shareholder specifies a
different choice by means of the enclosed proxy, his shares will
be voted in accordance with the specification so made.
OUTSTANDING
VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on
January 2, 2008 as the record date for determining
shareholders of Continucare entitled to notice of and to vote at
the Annual Meeting. As of the record date, there were
69,538,436 shares of common stock outstanding. Only the
record holders of issued and outstanding shares of common stock
as of the close of business on the record date are entitled to
vote at the Annual Meeting. Shareholders that own their shares
in street name through a stock brokerage account or
through a bank or nominee may attend the meeting but may not
grant a proxy or vote at the meeting. Instead, the broker, bank
or nominee is considered the record holder of those shares and
those shareholders must instruct the record holder how they wish
their shares to be voted. Shareholders are entitled to one vote
for each share held, and do not have the right to cumulate their
votes. Shareholders do not have rights of appraisal or similar
rights of dissenters under the Florida Business Corporation Act
with respect to any of the proposals set forth in this proxy
statement.
The attendance, in person or by proxy, of the holders of a
majority of the outstanding shares of common stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum
with respect to all matters presented. Directors will be elected
by a plurality of the votes cast by the shares of common stock
represented in person or by proxy at the Annual Meeting. The
appointment of Ernst & Young LLP as Continucares
independent registered public accounting firm will be ratified
if a majority of the shares of common stock represented in
person or by proxy at the Annual Meeting vote in favor of the
ratification of the appointment of Ernst & Young LLP
as Continucares independent registered public accounting
firm. Any other matter that may be submitted to a vote of the
shareholders will be approved if the number of shares of common
stock voted in favor of the matter exceeds the number of shares
voted in opposition to the matter, unless such matter is one for
which a greater vote is required by law or by Continucares
Articles of Incorporation or Bylaws. If less than a majority of
outstanding shares entitled to vote are represented at the
Annual Meeting, a majority of the shares so represented may
adjourn the Annual Meeting to another date, time or place, and
notice need not be given of the new date, time, or place if the
new date, time, or place is announced at the meeting before an
adjournment is taken.
Prior to the Annual Meeting, Continucare will select one or more
inspectors of election for the meeting. Such inspectors shall
determine the number of shares of common stock represented at
the meeting, the existence of a quorum and the validity and
effect of proxies, and shall receive, count and tabulate ballots
and votes and determine the results thereof. Abstentions will be
considered as shares present and entitled to vote at the Annual
Meeting and will be counted as votes cast at the Annual Meeting,
but will not be counted as votes cast for or against any given
matter. Accordingly, abstentions will have no effect on the
election of directors and will have the same effect as a vote
against the ratification of the appointment of Ernst &
Young LLP as Continucares independent registered public
accounting firm.
A broker or nominee holding shares registered in its name, or in
the names of its nominee, which are beneficially owned by
another person and for which it has not received instructions as
to voting from the beneficial owner, has the discretion to vote
the beneficial owners shares with respect to the election
of directors and the ratification of the appointment of
Ernst & Young LLP as Continucares independent
registered public accounting firm. Broker non-votes
occur when a broker, bank or other nominee who holds shares in
street name for a beneficial owner does not have
discretionary authority to vote on a matter and has not received
instructions on how to vote from the beneficial owner of the
shares. Broker non-votes will have no effect on the
election of directions or the ratification of the appointment of
Ernst & Young LLP as Continucares independent
registered public accounting firm.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of
December 19, 2007 concerning the beneficial ownership of
the common stock by (i) each person known by Continucare to
be the beneficial owner of more than 5% of the outstanding
common stock, (ii) each of Continucares directors,
(iii) each Named Executive Officer (as defined in the
Compensation Discussion and Analysis Section below), and
(iv) all of Continucares current executive officers
and directors as a group. All holders listed below have sole
voting power and investment power
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over the shares beneficially owned by them, except to the extent
such power may be shared with such persons spouse. Unless
noted otherwise, the address of each person listed below is 7200
Corporate Center Drive, Suite 600, Miami, Florida 33126.
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Name and Address
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Amount and Nature of
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Percent of
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of Beneficial Owner
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Beneficial Ownership(1)
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Common Stock(2)
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Robert Cresci
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365,000
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(3)
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*
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c/o Pecks Management Partners Ltd.
One Rockefeller Plaza
Suite 900
New York, NY 10020
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Luis Cruz, M.D.
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5,551,119
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(4)(5)
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8.0
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%
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3233 Palm Avenue
Hialeah, FL 33012
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Neil Flanzraich
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265,000
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(7)
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*
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4400 Biscayne Boulevard
Miami, FL 33137
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Phillip Frost, M.D.
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25,594,801
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(8)
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36.7
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%
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4400 Biscayne Boulevard
Miami, FL 33137
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Fernando L. Fernandez
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400,000
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(9)
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*
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Luis H. Izquierdo
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343,750
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(9)
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*
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Jacob Nudel, M.D.
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165,000
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(10)
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*
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One Isla Bahia Drive
Fort Lauderdale, FL 33316
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Richard C. Pfenniger, Jr.
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1,552,500
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(11)
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2.2
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%
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Gemma Rosello
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106,250
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(9)
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*
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A. Marvin Strait
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85,000
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(12)
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*
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2 North Cascade Avenue
Suite 1300
Colorado Springs, CO 80903
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Jose M. Garcia, Sr.
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4,780,204
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(5)(6)
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6.9
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%
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Carlos Garcia
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3,380,204
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(5)(6)
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4.9
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%
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Pecks Management Partners Ltd.
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6,511,584
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(13)
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9.4
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%
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One Rockefeller Plaza
Suite 900
New York, NY 10020
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All directors and executive officers as a group (10 persons)
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34,428,420
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47.9
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%
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Less than one percent. |
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(1) |
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For purposes of this table, beneficial ownership is computed
pursuant to
Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the
Exchange Act); the inclusion of shares as
beneficially owned should not be construed as an admission that
such shares are beneficially owned for purposes of the Exchange
Act. |
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Based on 69,603,736 shares of common stock outstanding as
of December 19, 2007. |
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Includes 165,000 shares of common stock underlying options
that are currently exercisable or exercisable within
60 days after December 19, 2007. |
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Luis Cruz, M.D. does not hold any shares of common stock in
his individual name, but rather may be deemed the beneficial
owner of the shares of common stock held by Luis Cruz
Irrevocable Trust A, Luis Cruz Irrevocable Trust B,
Luis Irrevocable Trust C and Luis Cruz Irrevocable
Trust D (the Trusts), of which trusts
Dr. Cruz is the sole trustee. Includes 25,000 shares
of common stock underlying options that are currently
exercisable or exercisable within 60 days after
December 19, 2007 by Dr. Cruz. |
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(5) |
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On October 12, 2006, Jose M. Garcia, Sr., Carlos Garcia and
the Trusts (the Group), collectively, as a group,
filed a Schedule 13D with regard to the shares of common
stock beneficially owned by the Group. |
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Includes 25,000 shares of common stock underlying options
that are currently exercisable or exercisable within
60 days after December 19, 2007. |
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(7) |
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Includes 65,000 shares of common stock underlying options
that are currently exercisable or exercisable within
60 days after December 19, 2007. |
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(8) |
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Includes (i) 24,310,488 shares of common stock
beneficially owned through Frost Gamma Investments Trust;
(ii) 819,313 shares of common stock beneficially owned
through Frost Nevada Limited Partnership;
(iii) 400,000 shares of common stock owned directly by
Dr. Frost; and (iv) 65,000 shares of common stock
underlying options that are currently exercisable or exercisable
within 60 days after December 19, 2007. |
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(9) |
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Represents shares of common stock underlying options that are
currently exercisable or exercisable within 60 days after
December 19, 2007. |
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(10) |
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Includes 65,000 shares of common stock underlying options
that are currently exercisable or exercisable within
60 days after December 19, 2007. |
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(11) |
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Includes 959,470 shares of common stock underlying options
that are currently exercisable or exercisable within
60 days after December 19, 2007. |
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(12) |
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Includes 58,334 shares of common stock underlying options
that are currently exercisable or exercisable within
60 days after December 19, 2007. |
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(13) |
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The information set forth herein is based solely on the most
recent Schedule(s) 13G/A filed with the Securities and Exchange
Commission (the SEC) by the entity and, accordingly,
may not reflect its respective holdings as of the date of this
proxy statement. |
ELECTION
OF DIRECTORS
(Proposal No. 1)
Nominees
for Election as Director
Seven persons are nominated for election as directors to serve
until the next Annual Meeting of Shareholders and until each
directors successor is duly elected and qualified.
Although Continucare anticipates that all of the nominees will
be able to serve, if any nominee is unable or unwilling to serve
at the time of the Annual Meeting, proxies solicited hereunder
will be voted in favor of the remaining nominees, if any, and
for such other persons as may be designated by the Board of
Directors, unless directed by a proxy to do otherwise.
The following table sets forth the names and ages of the
director nominees. Each director nominee is a current director
of Continucare who has been nominated for re-election at the
Annual Meeting.
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Name
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Age
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Richard C. Pfenniger, Jr.
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52
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Luis Cruz, M.D.
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46
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Robert J. Cresci
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64
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Neil Flanzraich
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64
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Phillip Frost, M.D.
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71
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Jacob Nudel, M.D.
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59
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A. Marvin Strait
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74
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The following is biographical information for the director
nominees.
Richard C. Pfenniger, Jr. has served as one of
Continucares directors since March 2002. In September
2002, Mr. Pfenniger was appointed Chairman of
Continucares Board of Directors. In October 2003, he was
appointed as Continucares Chief Executive Officer and
President. Mr. Pfenniger served as the Chief Executive
Officer and Vice Chairman of Whitman Education Group, Inc. from
1997 through June 2003. From 1994 to 1997, Mr. Pfenniger
served as the Chief Operating Officer of IVAX Corporation, and,
from 1989 to 1994, he served as the Senior Vice President-Legal
Affairs and General Counsel of IVAX Corporation.
Mr. Pfenniger currently serves as a director of GP
Strategies Corporation (corporate education and training) and
Cellular Technical Services Company, Inc. (medical devices).
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Luis Cruz, M.D. has served as one of
Continucares directors and as Vice Chairman of the Board
of Directors since October 2006. In October 2006, Dr. Cruz
was appointed Vice Chairman of Continucares Board of
Directors pursuant to a one year employment agreement with
Continucare which expired in October 2007 and Dr. Cruz, who
is no longer an employee of Continucare, continues to serve as
Vice Chairman of the Board. Prior to joining Continucare,
Dr. Cruz served as an executive officer of each of Miami
Dade Health and Rehabilitation Services, Inc., Miami Dade Health
Centers, Inc., West Gables Open MRI Services, Inc., Kent
Management Systems, Inc., Pelu Properties, Inc., Peluca
Investments, LLC and Miami Dade Health Centers One, Inc.
(collectively, the MDHC Companies). Continucare
acquired the MDHC Companies effective October 1, 2006.
Robert J. Cresci has served as one of Continucares
directors since February 2000. He has been a Managing Director
of Pecks Management Partners Ltd., an investment management
firm, since 1990. Mr. Cresci currently serves on the Boards
of Directors of Sepracor, Inc. (pharmaceuticals), Luminex
Corporation (biotechnology), j2 Global Communications, Inc.
(telecommunications) and several private companies.
Neil Flanzraich has served as one of Continucares
directors since March 2002. Mr. Flanzraich is a private
investor. From May 1998 until February 2006, he served as the
Vice Chairman and President of IVAX Corporation.
Mr. Flanzraich served as Chairman of the Life Sciences
Legal Practices Group of Heller Ehrman White &
McAuliff, a law firm, from 1995 to 1998. From 1981 to 1994,
Mr. Flanzraich served in various capacities at Syntex
Corporation and as a member of the Corporate Executive
Committee. From 1994 to 1995, after Syntex Corporation was
acquired by Roche Holding Ltd., Mr. Flanzraich served as
Senior Vice President and General Counsel of Syntex (U.S.A.)
Inc., a Roche subsidiary. Mr. Flanzraich was Chairman of
the Board of Directors of North American Vaccine, Inc. from 1989
to 2000. Mr. Flanzraich also currently serves on the Boards
of Directors of Javelin Pharmaceuticals, Inc. (pharmaceuticals),
Neurochem, Inc. (pharmaceuticals), Rae Systems, Inc. (gas
detection and security monitoring systems), Equity One, Inc.
(real estate) and Chipotle Mexican Grill, Inc. (a chain of
Mexican restaurants).
Phillip Frost, M.D. has served as one of
Continucares directors since January 2004. Dr. Frost
formerly served on Continucares Board of Directors as Vice
Chairman from September 1996 until April 2002. Dr. Frost
presently serves as the Chairman of the Board and Chief
Executive Officer of Opko Health, Inc. (specialty
pharmaceuticals) and is Vice Chairman of the Board of Directors
of TEVA Pharmaceuticals, Ltd. (pharmaceuticals) and Chairman of
the Board of Ladenburg Thalmann Financial Services, Inc.
(security brokerage). He is also a director of Northrop Grumman
Corporation (aerospace), Modigene Inc. (biopharmaceuticals) and
Ideation Acquisition Corporation (acquisition company). He
served as the Chairman of the Board of Directors and Chief
Executive Officer of IVAX Corporation from 1987 to 2006. He
served as President of IVAX Corporation from July 1991 until
January 1995. He was the Chairman of the Department of
Dermatology at Mt. Sinai Medical Center of Greater Miami, Miami
Beach, Florida from 1972 to 1990. Dr. Frost was Chairman of
the Board of Directors of Key Pharmaceuticals, Inc. from 1972 to
1986. Dr. Frost is a member of the Board of Trustees of the
University of Miami and a member of the Board of Governors as
well as Co-Vice Chairman of the American Stock Exchange.
Jacob Nudel, M.D. has served as one of
Continucares directors since October 2002. He is a private
investor who founded MEDWerks.com Corp., where he served as
Chairman from 2000 to 2005. From 1995 to 2000, Dr. Nudel
served as Chief Executive Officer of Allied Health Group, Inc.
From 1992 to 2000, Dr. Nudel also served as Chief Executive
Officer of Florida Specialty Network, Inc.
A. Marvin Strait has served as one of
Continucares directors since March 2004. Mr. Strait
presently practices as a Certified Public Accountant under the
name A. Marvin Strait, CPA. He has practiced in the field of
public accountancy in Colorado for over 40 years. He
presently serves as a member of the Board of Trustees of the
Colorado Springs Fine Arts Center Foundation, the Sam S. Bloom
Foundation, The Penrose-St. Francis Health Foundation and Peak
Education. He also presently serves as a member of the Board of
Directors and Chairman of the Audit Committee of Sturm Financial
Group, Inc., RAE Systems, Inc., GP Strategies Corporation and on
the Community Advisory Panel of American National Bank.
Mr. Strait previously served as the Chairman of the Board
of Directors of the American Institute of Certified Public
Accountants (AICPA), as President of the Colorado
Society of Certified Public Accountants and the Colorado State
Board of Accountancy, and serves as a permanent member of the
AICPA Governing Council.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH
OF THE NOMINEES IDENTIFIED ABOVE.
5
Identification
of Executive Officers
The following individuals are Continucares executive
officers:
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Name
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Age
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Position
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Richard C. Pfenniger, Jr.
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52
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Chairman of the Board, Chief Executive Officer and President
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Fernando L. Fernandez
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46
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Senior Vice President Finance, Chief Financial
Officer, Treasurer and Secretary
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Luis H. Izquierdo
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52
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Senior Vice President Marketing and Business
Development
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Gemma Rosello
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Executive Vice President Operations
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Luis Cruz, M.D.
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Vice Chairman of the Board
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With the exception of Dr. Cruz, who was a party to a
one-year employment agreement with Continucare which expired
October 1, 2007, all officers serve until they resign or
are replaced or removed at the pleasure of the Board of
Directors.
The following additional information is provided for the
executive officers shown above who are not directors of
Continucare or nominees for directors.
Fernando L. Fernandez was appointed as Continucares
Senior Vice President Finance, Chief Financial
Officer, Treasurer, and Secretary in June 2004.
Mr. Fernandez, a certified public accountant, served as
Senior Vice President Finance, Chief Financial
Officer, Treasurer, and Secretary of Whitman Education Group,
Inc. from 1996 until 2003. Prior to and since his service at
Whitman Education Group, Inc., Mr. Fernandez served as
Chief Financial Officer of several private investment entities
owned by Phillip Frost, M.D. Prior to 1991,
Mr. Fernandez served as Audit Manager for
PricewaterhouseCoopers LLP (formerly Coopers &
Lybrand) in Miami. Mr. Fernandez serves as a director of
IVAX Diagnostics, Inc. (diagnostic reagent kits).
Luis H. Izquierdo was appointed as Continucares
Senior Vice President Marketing and Business
Development in January 2004. Mr. Izquierdo served as Senior
Vice President and as a member of the Board of Directors for
Neighborhood Health Partnership from 2002 to 2004.
Mr. Izquierdo was Senior Vice President of Marketing and
Sales for Foundation Health, Florida from 1999 through 2001.
From 1997 through 1999, Mr. Izquierdo served as Senior Vice
President and Chief Marketing Officer for Oral Health Services.
From 1995 to 1997, Mr. Izquierdo served as the Vice
President, Corporate Marketing and Sales for Physicians
Corporation of America, and, from 1992 to 1995, he served as the
Senior Vice President, Marketing and Sales for CAC-Ramsay Health
Plans.
Gemma Rosello was appointed as Continucares
Executive Vice President Operations in October 2006.
Ms Rosello had previously served Continucare as its Senior Vice
President Operations from May 2005. Prior to joining
Continucare, Ms. Rosello was the Medicare Business
Development Director for AvMed Health Plan. She served as Vice
President of Health Services for Neighborhood Health Plan from
2003 to 2004. From 1993 to 2002, she served as the Chief
Executive Officer of Medical Utilization Review Associates
(MURA), a management service organization, and Apex Health
Services which managed Medicare, Medicaid and commercial full
risk contracts with national and regional payors. Prior to her
work in the managed care arena, Ms. Rosello served as Chief
Operating Officer for an acute medical/surgical non-profit
hospital in Miami, Florida.
CORPORATE
GOVERNANCE
Pursuant to Continucares bylaws and the Florida Business
Corporation Act, Continucares business and affairs are
managed under the direction of the Board of Directors. Directors
are kept informed of Continucares business through
discussions with management, including the Chief Executive
Officer and other senior officers, by reviewing materials
provided to them and by participating in meetings of the Board
of Directors and its committees. The Board of Directors and each
of its committees are authorized to retain financial, legal and
other advisors. The Board of Directors reviews its performance
annually.
Continucare has adopted a Code of Conduct and Ethics applicable
to its directors, officers and employees including its Chief
Executive Officer, Chief Financial Officer and principal
accounting officer. A copy of Continucares Code of Conduct
and Ethics is available on Continucares website at
www.continucare.com.
6
Continucare intends to post amendments to or waivers from its
Code of Conduct and Ethics (to the extent applicable to its
Chief Executive Officer, Chief Financial Officer or principal
accounting officer or to its directors) on its website.
Continucares website is not part of this proxy statement.
Determining
Director Independence
The Board of Directors reviewed each directors
independence in December 2007. The Board of Directors considered
transactions and relationships between each director or any
member of his or her immediate family and Continucare and its
subsidiaries and affiliates. The Board of Directors also
examined transactions and relationships between directors or
their known affiliates and members of Continucares senior
management or their known affiliates. The purpose of this review
was to determine whether any such relationships or transactions
were inconsistent with a determination that the director is
independent under applicable laws and regulations and the
American Stock Exchange (the AMEX) listing
standards. The Board of Directors affirmatively determined that
a majority of Continucares directors, including
Mr. Cresci, Mr. Flanzraich, Dr. Frost,
Dr. Nudel, and Mr. Strait, are independent
directors within the meaning of the listing standards of AMEX
and applicable law. As required by the AMEX, Continucares
independent directors meet at least annually in executive
session without the presence of its non-independent directors or
management.
Committees
of the Board of Directors and Meeting Attendance
During the fiscal year ended June 30, 2007 (Fiscal
2007), the Board of Directors held three meetings and took
certain actions by unanimous written consent. Each director
other than Dr. Frost and Mr. Flanzraich attended at
least 75% of the aggregate of (i) the number of such
meetings (held during the period for which he was a director),
and (ii) the number of meetings of committees of the Board
of Directors held during Fiscal 2007. Continucare has no formal
policy requiring its directors to attend its annual meeting of
shareholders, but Drs. Frost and Cruz and
Messrs. Cresci, Strait, Nudel and Pfenniger, attended
Continucares last annual meeting of shareholders.
The Board of Directors has established Audit, Compensation,
Nominating and Executive Committees. The Board of Directors has
adopted a written charter for each of these four committees.
The Audit
Committee
The Audit Committee currently consists of Mr. Cresci,
Mr. Flanzraich, Dr. Nudel and Mr. Strait
(Chairman). The Board of Directors has determined that all
current members of the Audit Committee are financially
literate, financially sophisticated, and
independent within the meaning of the listing
standards of the AMEX and applicable SEC regulations. The Board
of Directors has determined that Mr. Strait meets the
attributes of an audit committee financial expert
within the meaning of SEC regulations.
The Audit Committee held eight meetings during Fiscal 2007. The
duties and responsibilities of the Audit Committee include
(i) recommending to the Board of Directors the appointment
of Continucares independent registered public accounting
firm, (ii) reviewing the plan and scope of audits,
(iii) reviewing Continucares significant accounting
policies and internal controls, and (iv) having general
responsibility for the oversight of all audit related matters.
The Board of Directors adopted an amended and restated written
charter for the Audit Committee, which is available on
Continucares website at www.continucare.com. A report from
the Audit Committee is included at page 19.
The
Compensation Committee
The Compensation Committee currently consists of Mr. Cresci
(Chairman), Dr. Nudel, Mr. Strait and
Mr. Flanzraich. The Board of Directors has determined that
all of the current members of the Compensation Committee are
independent within the meaning of the listing
standards of the AMEX. The Compensation Committee held four
meetings during Fiscal 2007. The Compensation Committee provides
assistance to the Board of Directors in fulfilling its
responsibilities relating to compensation of Continucares
directors and executive officers. It reviews and determines the
compensation of the Chief Executive Officer and determines or
makes recommendations with respect to the compensation of
Continucares other executive officers. It also assists the
Board of Directors in the administration of Continucares
equity-based compensation plans. The Board of Directors adopted
a written charter for the Compensation Committee, which is
available on Continucares website at www.continucare.com.
7
The
Nominating Committee
The Nominating Committee currently consists of Dr. Frost
(Chairman), Mr. Cresci, Mr. Flanzraich, Dr. Nudel
and Mr. Strait. The Board of Directors has determined that
all of the current members of the Nominating Committee are
independent within the meaning of the listing
standards of the AMEX. The Nominating Committee is responsible
for identifying and recommending individuals qualified to become
directors and recommending appointments to the committees of the
Board of Directors. The Board of Directors adopted a written
charter for the Nominating Committee, which is available on
Continucares website at www.continucare.com.
The Nominating Committee held one meeting during Fiscal 2007.
The Nominating Committee expects it will generally identify
candidates for director through the business and other
organizational contacts of the directors and management.
Candidates for director will be selected on the basis of the
contributions the Nominating Committee believes that those
candidates can make to the Board of Directors and to management
and on such other qualifications and factors as the Nominating
Committee considers appropriate. In assessing potential new
directors, the Nominating Committee will seek individuals from
diverse professional backgrounds who the Nominating Committee
believes will provide a broad range of experience and expertise.
Director candidates should have a reputation for honesty and
integrity, strength of character, mature judgment and experience
in positions with a high degree of responsibility. In addition
to reviewing a candidates background and accomplishments,
candidates for director nominees will be reviewed in the context
of the current composition of the Board of Directors and the
evolving needs of Continucare. The Nominating Committee will
consider recommendations for director nominees submitted by
shareholders. All such recommendations must be delivered in
accordance with the provisions of Continucares bylaws and
addressed to Continucares Chief Executive Officer who will
forward such shareholder recommendations to the Nominating
Committee for consideration. Continucare also requires that the
members of its Board of Directors be able to dedicate the time
and resources sufficient to ensure the diligent performance of
their duties on Continucares behalf, including attending
Board of Directors and applicable committee meetings. In
addition to identifying and recommending qualified candidates to
serve as directors, the Nominating Committee studies and makes
recommendations to the Board of Directors concerning the size of
the Board of Directors.
The
Executive Committee
The Executive Committee currently consists of Mr. Cresci,
Dr. Frost, Dr. Nudel and Mr. Pfenniger
(Chairman). The Executive Committee is responsible for
exercising certain powers of the full Board of Directors during
intervals between meetings of the full Board of Directors.
Compensation
Committee Interlocks and Insider Participation
Continucares Compensation Committee has four members:
Robert J. Cresci (Chairman), Neil Flanzraich, Jacob Nudel, M.D,
and A. Marvin Strait. There are no interlocking relationships
between members of Continucares Compensation Committee and
the compensation committees of other companies board of
directors.
Certain
Relationships and Related Transactions
The Audit Committee reviews and approves transactions in which
Continucare was or is to be a participant, where the amount
involved exceeded or will exceed $120,000 annually and any of
Continucares directors, executive officers or their
immediate family members had or will have a direct or indirect
material interest. While this policy is not in writing, the
Audit Committee is responsible for reviewing and, if
appropriate, approving or ratifying any related party
transactions. The related party transaction will not be approved
unless at a minimum it is for the benefit of Continucare and is
upon terms no less favorable to Continucare than if the related
party transaction was with an unrelated third party. In Fiscal
2007, no related party transaction occurred where this process
was not followed.
Continucare has entered into agreements with Centers of Medical
Excellence, Inc., an entity owned by Dr. Luis Cruz and
Messrs. Jose and Carlos Garcia pursuant to which this
entity will act as one of Continucares independent
physician affiliates in connection with the provision of primary
care health services to a limited number of Medicare Advantage
members enrolled in plans sponsored by CarePlus Health Plans,
Inc. The arrangement is on substantially similar terms to those
between Continucare and its other independent physician
affiliates under at risk arrangements where Continucare provides
medical utilization services and pays a primary care capitation
fee to the provider. Under this arrangement, CarePlus pays
Continucare a global per member capitation fee and Continucare
in turn
8
pays a monthly primary care capitation fee to Centers of Medical
Excellence based on the number of CarePlus Medicare Advantage
members who have selected Centers of Medical Excellence as their
primary care provider. Centers of Medical Excellence is also
eligible to receive a bonus from Continucare if it operates in
cumulative surplus.
On October 1, 2006, Continucare completed its acquisition
(the Acquisition) of substantially all of the assets
of Miami Dade Health and Rehabilitation Services, Inc.
(MDHRS), Miami Dade Health Centers, Inc., West
Gables Open MRI Services, Inc., Kent Management Systems, Inc.
(Kent), Pelu Properties, Inc. (Pelu),
Peluca Investments, LLC, and Miami Dade Health Centers One, Inc.
(collectively, the MDHC Companies). Upon completion
of the Acquisition, Continucare entered into a registration
rights agreement with the MDHC Companies and their principal
shareholders, including Luis Cruz, M.D., Continucares
Vice Chairman. Pursuant to the terms of the registration rights
agreement, Continucare filed a registration statement with the
SEC with respect to the shares subject to the agreement and
maintained the effectiveness of the registration statement until
October 1, 2007.
Upon completion of the Acquisition, Continucare entered into
one-year employment agreements with each of Luis
Cruz, M.D., Jose Garcia and Carlos Garcia, the principal
shareholders of the MDHC Companies. Under these employment
agreements, Dr. Cruz was employed as Continucares
Vice Chairman at an annual salary of $225,000 and was appointed
to Continucares Board of Directors, Mr. Jose Garcia
was employed as Continucares Executive Vice President at
an annual salary of $275,000, and Mr. Carlos Garcia was
employed as Continucares President Diagnostics
Division at an annual salary of $225,000. Pursuant to the terms
of the employment agreements, each of Dr. Cruz and
Messrs. Jose and Carlos Garcia also received options to
acquire 100,000 shares of Continucares common stock
at a per share exercise price of $2.59, the closing price of
Continucares common stock on October 2, 2006. The
options vest ratably over a term of four years and have a term
of ten years from the date of the grant. Each of these
employment agreements expired October 1, 2007 and
Dr. Cruz and Mr. Carlos Garcia are no longer employees
of Continucare, although Dr. Cruz continues to serve as the
Vice Chairman of the Board of Directors. Mr. Jose Garcia
remains an employee of Continucare on an at-will basis at an
annual salary of $190,000.
Upon completion of the Acquisition, Continucare became a party
to two lease agreements with certain of the MDHC Companies and
their affiliates. Effective October 1, 2006, Kent assigned
to Continucare a lease agreement between Kent and Pelu, dated
May 1, 2006, pursuant to which Continucare leased from
Pelu, an entity wholly-owed by Dr. Luis Cruz and
Messrs. Jose and Carlos Garcia, an 8,000 square foot
warehouse in Hialeah, Florida for a five-year term expiring
April 30, 2011 with monthly rent ranging from $3,031.67 per
month during the first year to $3,412.17 per month during the
fifth year. Continucare terminated this lease effective
September 30, 2007. Also effective October 1, 2006,
MDHRS assigned to Continucare a lease agreement dated
January 1, 2000 between MDHRS and Cruz & Cruz
Partnership, an affiliate of Dr. Luis Cruz pursuant to
which Continucare is leasing a medical clinic from
Cruz & Cruz Partnership for a monthly rent of $32,100.
Communications
with the Board of Directors and Non-Management
Directors
Shareholders who wish to communicate with the Board of
Directors, any individual director or the non-management
directors as a group can write to Continucares Chairman
and Chief Executive Officer, Richard C. Pfenniger, Jr. The
letter should include a statement indicating that the sender is
a shareholder of Continucare. Depending on the subject matter,
an officer of Continucare will either:
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forward the letter to the director or directors to whom it is
addressed;
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attempt to handle the inquiry directly if it relates to routine
or ministerial matters, including requests for
information; or
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not forward the letter if it is primarily commercial in nature
or if it is determined to relate to an improper or irrelevant
topic.
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A member of management will, at each meeting of the Board of
Directors, present a summary of any non-routine or
non-ministerial, relevant and proper letters received since the
last meeting that were not forwarded to the Board of Directors
and will make those letters available to the Board of Directors
upon request.
Compensation
of Directors
Continucares Compensation Committee recommends director
compensation to the Board. In developing its recommendation, the
Compensation Committee strives to set a mix of cash and
equity-based compensation in
9
amounts which fairly compensate the directors for their expected
time commitments and responsibilities in serving on the Board
and which aligns the directors interests with the long
term interests of shareholders. In Fiscal 2007, each of
Continucares non-employee directors received a cash
retainer of $20,000 for his service on the Board. In addition,
for Fiscal 2007, the Chairman of each of the Nominating
Committee and the Compensation Committee received an additional
cash retainer of $2,500 and the Chairman of the Audit Committee
received an additional cash retainer of $5,000. Also, each of
Continucares non-employee Board members were granted fully
vested options to purchase 25,000 shares of common stock
during Fiscal 2007.
Effective October 1, 2006, Continucare appointed Luis
Cruz, M.D. to its Board of Directors and entered into a
one-year employment agreement with Dr. Cruz pursuant to
which Dr. Cruz was employed as Vice Chairman of
Continucares Board of Directors at an annual salary of
$225,000. Dr. Cruz was re-elected as a director at
Continucares annual meeting of shareholders on
February 7, 2007. Dr. Cruzs employment agreement
expired effective October 1, 2007 and while he is no longer
an employee, he continues to serve as Vice Chairman of the Board
of Directors. Pursuant to Dr. Cruzs employment
agreement, Dr. Cruz was granted options to acquire
100,000 shares of Continucares common stock at a per
share exercise price of $2.59. The options vest ratably over a
term of four years and have a term of ten years from the date of
the grant. In October 2007, 75,000 unvested options were
cancelled upon Dr. Cruzs termination of employment.
Director
Compensation-Fiscal 2007
The following table sets forth certain information regarding the
compensation paid to the Companys non-employee directors
for their service during the fiscal year ended June 30,
2007.
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Change in
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Pension Value
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and Nonqualified
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Non-Equity
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Deferred
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Fees Earned or
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Name
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Paid in Cash
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Awards
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Awards(1)
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Compensation
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Earnings
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Compensation
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Total
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Robert J. Cresci
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$22,500
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$26,660
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$49,100
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Neil Flanzraich
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$20,000
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$26,608
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$46,608
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Phillip Frost, M.D.
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$22,500
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$26,660
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$45,000(2)
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$94,160
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Jacob Nudel, M.D.
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$20,000
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$26,660
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$46,660
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A. Marvin Strait
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$25,000
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$28,520
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$53,520
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(1) |
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Represents the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended June 30, 2007,
in accordance with FAS 123(R), without taking into account
an estimate of forfeitures related to service-based vesting of
stock option grants, including amounts from awards granted prior
to Fiscal 2007. Assumptions used in the calculation of these
amounts are included in footnote 7 to Continucares audited
financial statements for the fiscal year ended June 30,
2007 included in Continucares Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
September 12, 2007. There were no forfeitures during Fiscal
2007. The grant date fair value of the stock option awards
granted during Fiscal 2007 computed in accordance with
FAS 123(R) was $1.07 per share. The table below sets forth
the aggregate number of stock options of each non-employee
director outstanding as of June 30, 2007: |
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Stock Options
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Robert J. Cresci
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165,000
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Neil Flanzraich
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65,000
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Phillip Frost, M.D.
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65,000
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Jacob Nudel, M.D.
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65,000
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A. Marvin Strait
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58,334
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Represents the amount of a
Hart-Scott-Rodino
Antitrust Improvements Act filing fee paid by Continucare on
behalf of Dr. Frost in April 2007 in connection with a
filing relating to his acquisition of Continucare common stock
in a private transaction with a third party. |
10
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Overview
of Compensation Program
Continucares Compensation Committee administers the
compensation program for Continucares executive officers
and also determines compensation for directors. The Compensation
Committee reviews and determines all executive officer
compensation, administers Continucares equity incentive
plans (including reviewing and approving grants to
Continucares executive officers), makes recommendations to
shareholders with respect to proposals related to compensation
matters and generally consults with management regarding
employee compensation programs.
The Compensation Committees charter reflects these
responsibilities, and the Compensation Committee and the Board
periodically review and, if appropriate, revise the charter. The
Board determines the Compensation Committees membership.
Robert J. Cresci, Neil Flanzraich, Jacob Nudel, M.D. and A.
Marvin Strait, C.P.A., each of whom are non-employee independent
directors, comprise the Compensation Committee. The Compensation
Committee meets at regularly scheduled times during the year,
and it may also hold specially scheduled meetings and take
action by written consent. At Board meetings, the Chairman of
the Compensation Committee reports on Compensation Committee
actions and recommendations, with all discussions of executive
compensation occurring in executive sessions of the Board.
Continucares executive officers, each of whom are included
in the Summary Compensation Table below, are Richard C.
Pfenniger, Jr., Chairman of the Board, Chief Executive
Officer and President, Fernando L. Fernandez, Senior Vice
President Finance, Chief Financial Officer,
Treasurer and Secretary, Luis H. Izquierdo, Senior Vice
President Marketing and Business Development, Gemma
Rosello, Executive Vice President Operations and
Luis Cruz, M.D., Vice Chairman of the Board of Directors.
Throughout this Proxy Statement, these individuals are sometimes
referred to collectively as the Named Executive
Officers.
Compensation
Philosophy and Objectives
The core objectives of Continucares compensation programs
are to secure and retain the services of high quality executives
and to provide compensation to Continucares executives
that are commensurate and aligned with Continucares
performance and advances both short-and long-term interests of
Continucare and its shareholders. Continucare seeks to achieve
these objectives through three principal compensation programs:
a base salary, long-term equity incentives, in the form of
periodic grants of stock options, and an annual cash incentive
bonus. Base salaries are designed primarily to attract and
retain talented executives. Annual cash incentives are designed
to motivate and reward the achievement of selected financial
goals, generally tied to profitability. Periodic grants of stock
options are designed to provide a strong incentive for achieving
long-term results by aligning interests of our executives with
those of our shareholders, while at the same time encouraging
our executives to remain with Continucare. The Compensation
Committee does not use benchmarking against peer groups to
establish the compensation levels of the Named Executive
Officers nor does it retain a compensation consultant to advise
them on compensation issues. The Compensation Committee believes
that Continucares compensation program for the Named
Executive Officers is appropriately based upon the performance
of Continucare and the performance and level of responsibility
of the executive officer.
Role
of Executive Officers in Compensation Decisions
The Compensation Committee makes all compensation decisions for
the Named Executive Officers. Continucares Chief Executive
Officer works closely with the Compensation Committee on
compensation matters. The Chief Executive Officer annually
reviews the performance of each of the Named Executive Officers
(other than the Chief Executive Officer, whose performance is
reviewed by the Compensation Committee) and the compensation
paid to those individuals during the past fiscal year, and makes
recommendations regarding compensation to be paid to those
individuals during the next fiscal year. The conclusions reached
and recommendations based on these reviews, including those with
respect to setting and adjusting base salary, annual cash
incentive awards and stock option awards, are presented to the
Compensation Committee. Following a review of these conclusions
and recommendations, the Compensation Committee will make
compensation decisions for these executives as it deems
appropriate, including approving the Chief Executive
Officers recommendations or modifying upward or
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downward any recommended amounts or awards to the Named
Executive Officers. The Compensation Committee meets with the
Chief Executive Officer annually to discuss his performance, but
ultimately decisions regarding his compensation are made solely
by the Compensation Committee based on its deliberations.
Named
Executive Officer Compensation Components
For the fiscal year ended June 30, 2007, base salary, an
annual cash incentive bonus opportunity and long-term equity
incentive compensation were the principal components of
compensation for the Named Executive Officers, however, as
discussed below, no cash incentive bonuses were paid for Fiscal
2007 under the annual incentive program because the threshold
financial performance target was not met.
A significant portion of total compensation is comprised of base
salary, which enables Continucare to attract and retain talented
executive management through the payment of reasonable current
income. Long-term equity incentives, in the form of stock
options which generally vest over a period of three or four
years, also form a meaningful percentage of overall compensation
which is tied directly to increases in the price of
Continucares common stock and also serves the goal of
retaining key management. Finally, the annual cash incentive
bonus, which historically has been a smaller portion of total
cash compensation, provides additional current income to
encourage the attainment of annual profitability goals. In
making decisions with respect to any element of a Named
Executive Officers compensation, the Compensation
Committee considers the total compensation that may be awarded
to the executive. There is no pre-established target or formula
for allocating among these three elements of compensation.
Rather, the Compensation Committee strives to apportion a mix
between cash and equity compensation to provide meaningful
current income and to motivate the attainment of long-term value
for our shareholders.
The Compensation Committee generally makes determinations
regarding Named Executive Officer compensation at the regularly
scheduled meeting of the Compensation Committee following
completion of each fiscal year, which meeting typically occurs
in September. At this meeting, the Compensation Committee will
typically determine base salaries for the upcoming fiscal year,
the amount of any cash incentive bonus payable to the Named
Executive Officers under the annual cash incentive plan for the
preceding fiscal year, the terms of the annual cash incentive
plan for the upcoming fiscal year and the grant of any equity
incentive awards.
Base
Salary
The Compensation Committee approves each Named Executive
Officers base salary by considering the individuals
duties and responsibilities. In setting base salaries for the
Named Executive Officers, the Compensation Committee undertakes
an annual review in consultation with and based upon
recommendations from the Chief Executive Officer. The
Compensation Committees review includes, among other
things, the functional and decision-making responsibilities of
each position, the significance of the Named Executive
Officers specific area of individual responsibility to
Continucares financial performance and achievement of
overall goals and the experience and past performance and
expected future contribution of each executive officer.
Decisions regarding increases in salary also take into account
the executives current salary. With respect to base salary
decisions for the Chief Executive Officer, the Compensation
Committee makes an assessment of Mr. Pfennigers past
performance as Chief Executive Officer and its expectations as
to his future contributions to Continucare, as well as the
factors described above for the other Named Executive Officers,
including evaluating his individual performance and
Continucares financial condition, operating results and
attainment of strategic objectives. The Compensation Committee
generally does not approve a material increase in base salary,
absent a significant promotion or other significant change in
responsibility of the executive officer. In determining
increases in base salaries for Fiscal 2008, the Compensation
Committee considered the continued improvement in
Continucares results and financial condition under
Mr. Pfennigers leadership and the efforts of the
other Named Executive Officers, the completion of the
acquisition of the MDHC Companies and the integration of their
operations within Continucare and the successful completion of
the initial compliance with the requirements for maintaining
effective internal controls over financial reporting under
Section 404 of the Sarbanes Oxley Act.
The Chief Executive Officers Fiscal 2007 base salary
increased 6.1% from Fiscal 2006 and the other Named Executive
Officers Fiscal 2007 base salaries increased in the range
of 2.3% to 7.5% from Fiscal 2006. For Fiscal 2008, the
Compensation Committee has approved an increase of 7.1% in the
Chief Executive Officers base salary
12
from Fiscal 2007 and increases ranging from 4.5% to 7.5% in the
base salaries of the other Named Executive Officers.
Effective October 1, 2006, in connection with
Continucares acquisition of the MDHC Companies, the
Compensation Committee approved a one-year employment agreement
with Dr. Cruz pursuant to which Dr. Cruz is employed
as Vice Chairman of Continucares Board of Directors at an
annual salary of $225,000. The employment agreement for
Dr. Cruz expired on October 1, 2007 and was not
renewed and Dr. Cruz is no longer an employee of
Continucare, although he continues to serve as Vice Chairman of
the Board of Directors.
Long-Term
Equity Incentive Compensation
Continucares long-term equity incentive compensation
program provides an opportunity for the Named Executive Officers
to increase their stake in Continucare through grants of options
to purchase shares of Continucares Common Stock and
encourages the Named Executive Officers to manage Continucare
from the perspective of an owner with an equity stake in the
business. Each grant allows the executive to acquire shares of
common stock at an exercise price equal to the closing price of
our common stock on the grant date over a specified period of
time not to exceed 10 years. Generally, the options become
exercisable in a series of installments over a three or
four-year period, contingent upon the executive officers
continued employment with Continucare. Accordingly, the option
grant will provide a positive return to the executive officer
only if he or she remains employed by Continucare during the
vesting period, and then only if the market price of the shares
appreciates over the option term.
The Compensation Committees grant of stock options to the
Named Executive Officers is entirely discretionary, subject to
any limitations set by Continucares Amended and Restated
2000 Stock Option Plan, and is generally made on a
once-a-year
basis. Decisions by the Compensation Committee regarding grants
of stock options to the Named Executive Officers (other than the
Chief Executive Officer) are generally made based upon the
recommendation of the Chief Executive Officer, and includes the
consideration of the executive officers current position
with Continucare, the executive officers past and expected
future performance and the other factors discussed in the
determination of base salaries. In addition, the Compensation
Committee considers the number of outstanding and previously
granted options of the executive, as well as the other
components of his or her total compensation in determining the
appropriate grant. In Fiscal 2007, all of the Named Executive
Officers were granted options to purchase shares of
Continucares common stock, with an exercise price equal to
the market value of the common stock on the date of grant, and
which vest in equal annual amounts over a four-year period.
Continucare generally has approved grants of stock options in
specific amounts as part of an executive officers initial
employment with Continucare. The option grant to Dr. Cruz
during Fiscal 2007 was made in October 2006 pursuant to the
terms of his employment agreement with Continucare. Continucare
does not have any program or practice to time annual or other
grants of stock options in coordination with the release of
material non-public information or otherwise.
Annual
Cash Incentive Program
Continucare maintains an annual cash incentive bonus plan which
provides for the payment of cash bonuses to eligible members of
Continucares management team, including the Named
Executive Officers. The purpose of the cash incentive bonus plan
is to provide incentives to those employees who have the ability
to impact operating performance to address and achieve annual
performance goals and to participate in Continucares
growth and profitability. Under the terms of the plan for Fiscal
2007, a pool is established from which any bonuses would be paid
in an amount equal to 20% of the amount by which
Continucares pre-tax earnings for Fiscal 2007 exceeded a
pre-determined threshold. Distributions of awards from the bonus
pool to eligible employees, including the Named Executive
Officers are determined by the Compensation Committee, which
considers the recommendations of the Chief Executive Officer for
all participants other than himself. The bonus payable from the
pool to the Chief Executive Officer is based solely upon
Compensation Committee deliberations. No bonuses were paid under
the plan for Fiscal 2007 because the amount of pre-tax earnings
for Fiscal 2007 did not exceed the threshold amount and,
accordingly, no bonus pool was established.
The Compensation Committee approved an annual cash incentive
bonus plan for Fiscal 2008 under the same general framework as
the Fiscal 2007 plan. The plan for Fiscal 2008 was approved by
the Compensation Committee at a meeting held in September 2007,
which was its first meeting after completion of
Continucares fiscal year ended
13
June 30, 2007. Under the terms of the plan for Fiscal 2008,
a bonus pool will be established in an amount equal to 15% of
the amount by which Continucares pre-tax earnings exceed a
pre-determined threshold. The pre-tax income threshold is based
upon Continucares Fiscal 2008 budget and for this and
other competitive reasons, Continucare has not disclosed the
specific dollar value of the financial target. The Compensation
Committee believes that the threshold target provides a
meaningful incentive to executives to improve performance in a
manner that is consistent with the interests of
Continucares shareholders. As with the annual cash
incentive plan for Fiscal 2007, no bonuses will be payable under
the plan for Fiscal 2008 if the threshold financial performance
target is not exceeded.
Other
Compensation and Benefits
Named Executive Officers receive additional compensation in the
form of vacation, medical, 401(k), and other benefits generally
available to all of Continucares full time employees.
While Continucare generally does not provide perquisites to its
executive officers, certain Named Executive Officers received
modest automobile allowances and Continucare paid medical and
life insurance premiums on behalf of all of the Named Executive
Officers which exceed the premiums paid by Continucare on behalf
of its non-executive employees.
Internal
Revenue Code Limits on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally
disallows a tax deduction to public corporations for
compensation over $1,000,000 paid for any fiscal year to the
corporations chief executive officer and four other most
highly compensated executive officers as of the end of any
fiscal year. However, the statute exempts qualifying
performance-based compensation from the deduction limit if
certain requirements are met.
The Compensation Committee believes that it is generally in
Continucares best interest to attempt to structure
performance-based compensation, including stock option grants
and annual bonuses, to the Named Executive Officers, each of
whom are subject to Section 162(m), in a manner that
satisfies the statutes requirements for full tax
deductibility for the compensation. However, the Compensation
Committee also recognizes the need to retain flexibility to make
compensation decisions that may not meet Section 162(m)
standards when necessary to enable Continucare to meet its
overall objectives, even if Continucare may not deduct all of
the compensation. However, because of ambiguities and
uncertainties as to the application and interpretation of
Section 162(m) and the regulations issued thereunder, no
assurance can be given, notwithstanding Continucares
efforts, that compensation intended by the Company to satisfy
the requirements for deductibility under Section 162(m)
will in fact do so.
14
Compensation
of Named Executive Officers
Summary
Compensation Table-Fiscal 2007
The following table sets forth certain summary information
concerning compensation paid or accrued by Continucare to or on
behalf of the Named Executive Officers (as defined in the
Compensation Discussion and Analysis section above)
for the fiscal year ended June 30, 2007. With the exception
of Dr. Luis Cruz who was a party to a one-year employment
agreement with Continucare which expired October 1, 2007,
Continucare does not have employment agreements with any of the
Named Executive Officers.
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Change in
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Pension
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Value and
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Nonqualified
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Non-Equity
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Deferred
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Name and Principal Position
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Fiscal Year
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Salary
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Bonus
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Awards
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Awards(2)
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Compensation
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Earnings
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Compensation(3)
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Total
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Richard C. Pfenniger, Jr.,
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2007
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$346,077
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$259,195
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$14,312
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$619,584
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Chairman of the Board,
President and Chief
Executive Officer
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Gemma Rosello,
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2007
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$211,596
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$146,004
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$13,416
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$371,016
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Executive Vice
President Operations
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Fernando L. Fernandez,
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2007
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$198,038
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$273,951
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$14,312
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$486,301
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Senior Vice President-Finance,
Chief Financial Officer,
Treasurer and Secretary
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Luis H. Izquierdo,
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2007
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$218,789
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$127,883
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$11,956
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$358,628
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Senior Vice President-Marketing
and Business Development
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Luis Cruz, M.D.(1)
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2007
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$168,750
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$50,775
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$10,969
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$230,494
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Vice Chairman of the Board of Directors
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(1) |
|
Dr. Cruz was not employed by Continucare during all of the
fiscal year ended June 30, 2007. Information regarding the
compensation of Dr. Cruz set forth above relates only to
the portion of the fiscal year ended June 30, 2007 during
which he was employed by Continucare. In connection with
Continucares acquisition of the MDHC Companies,
Continucare entered into a one-year employment agreement with
Dr. Cruz effective October 1, 2006 pursuant to which
Dr. Cruz was employed as Vice Chairman of
Continucares Board of Directors at an annual salary of
$225,000. The employment agreement for Dr. Cruz expired on
October 1, 2007 and was not renewed. Dr. Cruz is no
longer an employee of Continucare although he continues to serve
as Vice Chairman of the Board of Directors. |
|
(2) |
|
Represents the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended June 30, 2007,
in accordance with FAS 123(R), without taking into account an
estimate of forfeitures related to service-based vesting, of
stock option grants, including amounts from awards granted prior
to Fiscal 2007. Assumptions used in the calculation of these
amounts are included in footnote 7 to Continucares audited
financial statements for the fiscal year ended June 30,
2007 included in Continucares Annual Report on
Form 10-K
filed with the Securities and Exchange Commission on
September 12, 2007. There were no forfeitures during Fiscal
2007. Additional information regarding these stock options
awarded to the Named Executive Officers in Fiscal 2007,
including the grant date fair value of such stock options, is
set forth in the Grants of Plan-Based Awards
Fiscal 2007 table below. |
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(3) |
|
Includes the amount of the insurance premiums paid by
Continucare on behalf of the Named Executive Officers that
exceed the insurance premiums paid by Continucare on behalf of
its non-executive employees, and also includes car allowances of
$6,231 paid to each of Ms. Rosello and Mr. Izquierdo. |
15
Grants of
Plan-Based Awards Fiscal 2007
The following table sets forth certain information concerning
grants of awards to the Named Executive Officers pursuant to
Continucares non-equity and equity incentive plans in the
fiscal year ended June 30, 2007.
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All Other
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All Other
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Estimated Possible
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Stock
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Option
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Exercise
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Payouts Under
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Estimated Future
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Awards:
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Awards:
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or Base
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Grant Date
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Non-Equity
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Payouts Under
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Number of
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Number of
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Price of
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Fair Value
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Incentive Plan
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Equity Incentive
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Shares of
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Securities
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Option
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of Stock
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Grant
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Awards(1)
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Plan Awards
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Stock or
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Underlying
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Awards
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and Option
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Name
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Date
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Threshold
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Target
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Maximum
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Threshold
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Target
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Maximum
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Units
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Options(2)
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($/Sh)
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Awards(3)
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Richard C. Pfenniger, Jr.
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9/12/06
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N/A
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N/A
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150,000
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$2.77
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$
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228,000
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Gemma Rosello
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9/12/06
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N/A
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N/A
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75,000
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$2.77
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$
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114,000
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Fernando Fernandez
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9/12/06
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N/A
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N/A
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50,000
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$2.77
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$
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76,000
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Luis Izquierdo
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9/12/06
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N/A
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N/A
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25,000
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$2.77
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$
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38,000
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Luis Cruz, M.D.
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10/1/06
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N/A
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N/A
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100,000
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(4)
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$2.59
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$
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140,000
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(1) |
|
Represents the estimated possible payouts of cash awards under
Continucares annual incentive plan which is tied to
financial performance goals. No cash awards were made under the
formula-based component of Continucares annual incentive
plan for Fiscal 2007 as reflected under Non-Equity
Incentive Plan Compensation in the Summary
Compensation Table above. Continucares annual
incentive plan is more fully described in the Compensation
Discussion and Analysis section beginning on page 11.
No threshold payment is disclosed because no payments would be
payable under the annual incentive plan if the threshold level
of pre-tax profits are attained because no bonus pool is created
until pre-tax profits exceed the threshold amount. Further, no
target amount is provided because no target amounts were
established and no maximum amount is presented because this plan
does not limit the maximum potential payout. |
|
(2) |
|
All options are to purchase shares of Continucares common
stock were granted under Continucares Amended and Restated
2000 Stock Option Plan. Each grant vests 25% over the first four
years from the date of grant. |
|
(3) |
|
Represents the grant date fair value computed in accordance with
FAS 123(R). |
|
(4) |
|
Dr. Cruz was awarded options to acquire 100,000 shares
of Continucares common stock par value $.0001 per share
pursuant to his employment agreement with Continucare effective
October 1, 2006 in connection with Continucares
acquisition of the MDHC Companies. |
16
Outstanding
Equity Awards at Fiscal Year-End 2007
The following table sets forth certain information regarding
equity-based awards held by the Named Executive Officers as of
June 30, 2007.
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Option Awards
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Equity Incentive
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Number of
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Plan Awards:
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Securities Underlying
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Number of Securities
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Option
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Option
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Unexercised Options
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Underlying Unexercised
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Exercise
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Expiration
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Name
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Exercisable
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Unexercisable
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Unearned Options
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Price
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Date
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Richard C. Pfenniger, Jr.
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821,970
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$
|
0.66
|
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10/1/13
|
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50,000
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150,000
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(1)
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2.42
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12/6/15
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37,500
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112,500
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(2)
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2.77
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9/12/16
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150,000
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(3)
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2.51
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9/11/17
|
|
Gemma Rosello
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50,000
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50,000
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(4)
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$
|
2.69
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5/26/15
|
|
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18,750
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56,250
|
(1)
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|
|
|
|
|
|
2.42
|
|
|
|
12/6/15
|
|
|
|
|
18,750
|
|
|
|
56,250
|
(2)
|
|
|
|
|
|
|
2.77
|
|
|
|
9/12/16
|
|
|
|
|
|
|
|
|
75,000
|
(3)
|
|
|
|
|
|
|
2.51
|
|
|
|
9/11/17
|
|
Fernando L. Fernandez
|
|
|
350,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1.98
|
|
|
|
6/14/14
|
|
|
|
|
18,750
|
|
|
|
56,250
|
(1)
|
|
|
|
|
|
|
2.42
|
|
|
|
12/6/15
|
|
|
|
|
12,500
|
|
|
|
37,500
|
(2)
|
|
|
|
|
|
|
2.77
|
|
|
|
9/12/16
|
|
|
|
|
|
|
|
|
75,000
|
(3)
|
|
|
|
|
|
|
2.51
|
|
|
|
9/11/17
|
|
Luis H. Izquierdo
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
$
|
1.51
|
|
|
|
1/5/14
|
|
|
|
|
18,750
|
|
|
|
56,250
|
(1)
|
|
|
|
|
|
|
2.42
|
|
|
|
12/6/15
|
|
|
|
|
6,250
|
|
|
|
18,750
|
(2)
|
|
|
|
|
|
|
2.77
|
|
|
|
9/12/16
|
|
|
|
|
|
|
|
|
50,000
|
(3)
|
|
|
|
|
|
|
2.51
|
|
|
|
9/11/17
|
|
Luis Cruz, M.D.
|
|
|
25,000
|
|
|
|
75,000
|
(5)
|
|
|
|
|
|
$
|
2.59
|
|
|
|
10/2/16
|
|
|
|
|
(1) |
|
Vests in four equal annual installments beginning on
December 6, 2006. |
|
(2) |
|
Vests in four equal annual installments beginning on
September 12, 2007. |
|
(3) |
|
Vests in four equal annual installments beginning on
September 11, 2008. |
|
(4) |
|
Vests in four equal annual installments beginning on
May 26, 2006. |
|
(5) |
|
75,000 unvested shares were cancelled in October 2007 upon
termination of employment. |
Option
Exercises Fiscal 2007
No stock options were exercised by the Named Executive Officers
in the fiscal year ended June 30, 2007.
Potential
Payments upon Termination or
Change-in-Control
The Named Executive Officers, with the exception of
Dr. Cruz whose employment agreement expired October 1,
2007, do not have employment agreements with Continucare and are
all employed on an at will basis. Continucare does
not have arrangements with any of its Named Executive Officers
providing for additional benefits or payments in connection with
a termination of employment, change in job responsibility or
change-in-control.
Grants of stock options to all employees eligible to receive
such grants under Continucares Amended and Restated 2000
Stock Option Plan vest immediately in the event of a change in
control; therefore, no separate disclosure is presented herein
with respect to the acceleration of stock options held by the
Named Executive Officers upon a change of control under the
terms of this stock option plan.
Section 16(a)
Beneficial Ownership Reporting Compliance of the Securities
Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934
requires Continucares directors and executive officers and
persons who own more than ten percent of Continucares
outstanding common stock, to file with the SEC initial
17
reports of ownership and reports of changes in ownership of
common stock. Such persons are required by SEC regulation to
furnish us with copies of all such reports they file.
To Continucares knowledge, based solely on a review of the
copies of such reports furnished to it and written
representations that no other reports were required, Continucare
believes that all Section 16(a) filing requirements
applicable to Continucares officers, directors and greater
than ten percent beneficial owners were complied with.
RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
CONTINUCARES
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal No. 2)
The Audit Committee of the Board of Directors has appointed
Ernst & Young LLP as Continucares independent
registered public accounting firm for the fiscal year ending
June 30, 2008. Ernst & Young LLP served as the
independent registered public accounting firm for Continucare in
Fiscal 2007 and Fiscal 2006.
Fees to
Independent Registered Public Accounting Firm
The following table presents fees for professional services
rendered by Ernst & Young LLP for the audit of
Continucares annual financial statements and quarterly
review of interim financial statements, fees for audit-related
services, tax services and all other services for Fiscal 2007
and 2006.
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Audit fees(a)
|
|
$
|
1,452,844
|
|
|
$
|
426,160
|
|
Audit related fees(b)
|
|
|
|
|
|
|
|
|
Tax fees(c)
|
|
|
26,400
|
|
|
|
67,292
|
|
All other fees(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,479,244
|
|
|
$
|
493,452
|
|
|
|
|
(a) |
|
Audit fees consist of audit and review work performed in the
preparation of financial statements, including the Fiscal 2007
audit of effectiveness of internal controls over financial
reporting, as well as fees related to technical accounting and
auditing consultations, assistance with SEC filings and audit
procedures related to the Acquisition of the MDHC Companies. The
auditors were not required to audit the effectiveness of
Continucares internal controls over financial reporting in
Fiscal 2006. |
|
(b) |
|
No audit related fees were incurred in Fiscal 2007 and 2006. |
|
(c) |
|
Tax fees consist of services provided for tax compliance, tax
advice and tax planning. |
|
(d) |
|
No other fees were incurred in Fiscal 2007 and 2006. |
All audit related services, tax services and other services were
pre-approved by the Audit Committee, which concluded that the
provision of such services by Ernst & Young LLP was
compatible with the maintenance of that firms independence
in the conduct of its auditing functions. The Audit Committee
must review and pre-approve both audit and permitted non-audit
services provided by the independent auditors and shall not
engage the independent auditors to perform any non-audit
services prohibited by law or regulation. At each Audit
Committee meeting, the Audit Committee receives updates on the
services actually provided by the independent auditors, and
management may present additional services for pre-approval. The
Audit Committee has delegated to the Chairman of the Audit
Committee the authority to evaluate and approve engagements on
behalf of the Audit Committee in the event that a need arises
for pre-approval between regular Audit Committee meetings. If
the Chairman of the Audit Committee so approves any such
engagements, he will report that approval to the full Audit
Committee at the next Audit Committee meeting.
Each year, the independent registered public accounting
firms retention to audit the Companys financial
statements, including the associated fee, is approved by the
Audit Committee before the filing of the preceding years
Annual Report on
Form 10-K.
A representative of Ernst & Young LLP is expected to
be present at the Annual Meeting, will have the opportunity to
make a statement if he desires and will be available to respond
to appropriate questions from shareholders.
18
Vote
Required and Recommendation
The Board of Directors recommends a vote in favor of the
ratification of the appointment of Ernst & Young LLP
as Continucares independent registered public accounting
firm for the fiscal year ending June 30, 2008. The
affirmative vote of a majority of the votes of common stock
present in person or by proxy at the Annual Meeting and entitled
to vote will be required to ratify the appointment of
Ernst & Young LLP. If the appointment is not ratified,
the Audit Committee will select other independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS CONTINUCARES INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
Audit
Committee Report
The Audit Committee of the Board of Directors is responsible
for, among other things, monitoring:
|
|
|
|
|
the integrity of Continucares financial statements;
|
|
|
|
Continucares system of internal controls; and
|
|
|
|
the independence, qualifications and performance of
Continucares independent registered public accounting firm.
|
Continucares management is responsible for the
preparation, presentation and integrity of Continucares
financial statements, and Continucares accounting and
financial reporting process, including the system of internal
control, and procedures to assure compliance with applicable
accounting standards and applicable laws and regulations.
Continucares independent registered public accounting firm
is responsible for auditing those financial statements and
expressing an opinion as to their conformity with
U.S. generally accepted accounting principles and for
expressing an opinion on the effectiveness of Continucares
internal control over financial reporting. The Audit
Committees responsibility is to independently monitor and
review these processes and to review and discuss
managements report on Continucares internal control
over financial reporting. However, the Audit Committee must
rely, without independent verification, on the information
provided to it and on the representations made by management and
the independent registered public accounting firm. Accordingly,
although the Audit Committee consults with and discusses these
matters and its questions and concerns with management and
Continucares independent registered public accounting
firm, its oversight cannot provide an independent basis to
assure that management has maintained appropriate accounting and
financial reporting principles or appropriate internal control
and procedures consistent with accounting standards and
applicable laws and regulations. Furthermore, the Audit
Committees considerations and discussions cannot assure
that the audit of Continucares financial statements has
been carried out in accordance with U.S. generally accepted
auditing standards, that the financial statements are presented
in accordance with U.S. generally accepted accounting
principles or that Continucares registered public
accounting firm is in fact independent.
In this context, the Audit Committee held eight meetings during
Fiscal 2007. The meetings were designed, among other things, to
facilitate and encourage communication among the Audit
Committee, management, and Continucares independent
registered public accounting firm, Ernst & Young LLP.
The Audit Committee discussed with Continucares
independent registered public accounting firm, with and without
management present, the results of their examinations and their
evaluations of Continucares financial statements and
internal control over financial reporting.
The Audit Committee reviewed and discussed the audited financial
statements for the fiscal year ended June 30, 2007 with
management and Ernst & Young LLP. The Audit Committee
also discussed with Ernst & Young LLP matters required
to be discussed with audit committees under U.S. generally
accepted auditing standards, including, among other things,
matters related to the conduct of the audit of
Continucares financial statements and the matters required
to be discussed by Statement on Auditing Standards No. 61,
as amended (Communication with Audit Committees) by Statement on
Accounting Standards Nos. 89 and 90 and
Rule 2-07
of
Regulation S-X
and PCAOB Auditing Standard No. 2. The Audit
Committees discussions also included a discussion of the
background and experience of the Ernst & Young LLP
audit team assigned to Continucare and the quality control
procedures established by Ernst & Young LLP.
19
Ernst & Young LLP has provided to the Audit Committee
the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions
with Audit Committees), and the Audit Committee discussed with
the independent auditors their independence from Continucare.
When considering Ernst & Young LLPs
independence, the Audit Committee considered whether their
provision of services to Continucare beyond those rendered in
connection with their audit and review of Continucares
financial statements was compatible with maintaining their
independence. The Audit Committee also reviewed, among other
things, the nature of the non-audit services provided and the
amount of fees paid to Ernst & Young LLP for their
audit and non-audit services, both separately and in the
aggregate.
Based on the Audit Committees review and its meetings,
discussions and reports, and subject to the limitations on its
role and responsibilities referred to above and in the Audit
Committee Charter, the Audit Committee recommended to the Board
of Directors that Continucares audited financial
statements for the year ended June 30, 2007 be included in
Continucares Annual Report on
Form 10-K.
Robert J.
Cresci
Neil Flanzraich
Jacob Nudel, M.D.
A. Marvin Strait, C.P.A., Chairman
OTHER
BUSINESS
As of the date of this proxy statement, the Board of Directors
knows of no other business to be presented at the Annual
Meeting. If any other business should properly come before the
Annual Meeting, the persons named in the accompanying proxy will
vote thereon as in their discretion they may deem appropriate,
unless they are directed by a proxy to do otherwise.
AVAILABLE
INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file at the SECs public reference rooms in
Washington, D.C., New York, New York, and Chicago,
Illinois. Please call the SEC at
1-800-SEC-0330
for further information on the public reference rooms. Our SEC
filings are also available to the public from the SECs
website at
http://www.sec.gov.
In addition, you can inspect the reports, proxy statements and
other information we file at the offices of the American Stock
Exchange, Inc., 86 Trinity Place, New York, New York 10006.
Our website address is www.continucare.com. We make available
free of charge on or through our internet website our Annual
Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
and amendments to those reports, including exhibits thereto,
filed or furnished pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 as soon as reasonably
practicable after such material has been filed with, or
furnished to, the SEC. Our website does not constitute part of
this proxy statement.
20
SHAREHOLDER
PROPOSALS
Shareholders interested in presenting a proposal for
consideration at Continucares next annual meeting of
shareholders may do so by following the procedures prescribed in
Rule 14a-8
promulgated by the Exchange Act. To be eligible for inclusion in
Continucares proxy statement and form of proxy relating to
that meeting, shareholder proposals must be received by
Continucares Corporate Secretary no later than
September 10, 2008. Any shareholder proposal submitted
other than for inclusion in Continucares proxy materials
for that meeting must be delivered to us no later than
October 10, 2008, or such proposal will be considered
untimely. If a shareholder proposal is received after
September 10, 2008, Continucare may vote in
Continucares discretion as to the proposal all of the
shares for which Continucare has received proxies for that
meeting.
By Order of the Board of Directors,
Fernando L. Fernandez
Senior Vice President Finance, Chief
Financial Officer, Treasurer and Secretary
Miami, Florida
January 8, 2008
21
CONTINUCARE CORPORATION
7200 CORPORATE CENTER DRIVE, SUITE 600
MIAMI, FLORIDA 33126
ANNUAL MEETING OF SHAREHOLDERS
OF CONTINUCARE CORPORATION
FEBRUARY 5, 2008
PROXY
This Proxy is solicited on behalf of the Board of Directors of Continucare Corporation.
The undersigned hereby appoints Richard C. Pfenniger, Jr. and Fernando L. Fernandez, and each
of them, acting alone, with the power to appoint his or her substitute, as proxies to represent the
undersigned and vote as designated on the reverse side, all of the shares of Common Stock of
Continucare Corporation held of record by the undersigned at the close of business on January 2,
2008, at the Annual Meeting of Shareholders to be held on February 5, 2008, and at any adjournment
or postponement thereof.
Please complete, date and sign this Proxy on the reverse side, and mail it promptly in the
enclosed envelope.
(Continued and to be signed on the reverse side)
(continued from reverse side)
The Board of Directors of Continucare Corporation unanimously recommends a vote FOR all of
the nominees for director and FOR the ratification of the appointment of Ernst & Young LLP as
Continucare Corporations independent registered public accounting firm.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
OR BLACK INK AS SHOWN HERE [X]
1. Election of seven directors.
NOMINEES:
Richard C. Pfenniger, Jr.
Luis Cruz, M.D.
Robert J. Cresci
Neil Flanzraich
Phillip Frost, M.D.
Jacob Nudel, M.D.
A. Marvin Strait
|
|
|
o |
|
WITHHOLD AUTHORITY
FOR ALL NOMINEES |
|
|
|
o |
|
FOR ALL EXCEPT
(See instructions below) |
INSTRUCTION: To withhold authority to
vote for any individual nominee(s),
mark FOR ALL EXCEPT and write the
nominees name(s) below.
To change the address on your account,
please check the box at right and
indicate your new address in the
address space above. Please note that
changes to the registered name(s) on
the account may not be submitted via
this method. o
2. |
|
Ratification of the appointment of Ernst & Young LLP as
Continucare Corporations independent registered public accounting firm. |
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN |
o
|
|
o
|
|
o |
3. |
|
In their discretion, the proxy holders are authorized to vote
upon such other matters as may properly come before the meeting or
any postponement or adjournment thereof. |
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1 AND FOR PROPOSAL 2.
|
|
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE. |
|
|
|
|
|
|
|
|
The undersigned acknowledges receipt of the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement for the February 5, 2008 meeting.
Signature of Shareholder
_____________________
Date: _________ Signature of Shareholder _____________________
Date: _________
NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each shareholder should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.