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EX-31.1 - EX-31.1 - TIPTREE INC. | y04809exv31w1.htm |
EX-32.1 - EX-32.1 - TIPTREE INC. | y04809exv32w1.htm |
EX-31.2 - EX-31.2 - TIPTREE INC. | y04809exv31w2.htm |
EX-32.2 - EX-32.2 - TIPTREE INC. | y04809exv32w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
þ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2010
or
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission File Number: 001-33549
Care Investment Trust Inc.
(Exact name of Registrant as specified in its charter)
Maryland | 38-3754322 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation or organization) | Identification Number) |
780 Third Avenue, 21st Floor, New York, New York 10017
(Address of Registrants principal executive offices) (Zip Code)
(Address of Registrants principal executive offices) (Zip Code)
(212) 446-1410
(Registrants telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act: None
(Registrants telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities
Registered Pursuant to Section 12(g) of the Act: Common Stock,
par value $0.001 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes
o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K (§ 229.405) is not contained herein, and will not be contained, to the best of
registrants knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Act). Yes o No þ
State the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was last sold, or the
average bid and asked price of such common equity, as of the last day of the registrants most
recently completed second fiscal quarter: $107,671,122.
Indicate the number of shares
outstanding of each of the registrants classes of common stock, as
of the latest practicable date.
As of April 28, 2011, there were 10,145,049 shares, par value $0.001, of the registrants
common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
None.
Table of Contents
Item | Description | Page | ||||
PART III | ||||||
Item 10. | 4 | |||||
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Item 11. | 11 | |||||
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25 | ||||||
Item 12. | 25 | |||||
26 | ||||||
27 | ||||||
Item 13. | 27 | |||||
27 | ||||||
28 | ||||||
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30 | ||||||
Item 14. | 30 | |||||
30 | ||||||
30 | ||||||
30 | ||||||
30 | ||||||
PART IV | ||||||
Item 15. | 30 | |||||
Appendix A | A-1 |
2
EXPLANATORY NOTE
Care Investment Trust Inc. (the Company) is filing this Amendment No. 1 to Form 10-K on Form
10-K/A for the fiscal year ended December 31, 2010, in order to amend and restate Part III, Items
10 through 14 and Part IV, Item 15 of the report on Form 10-K that we originally filed with the
Securities and Exchange Commission (the SEC) on March 31, 2011.
This Form 10-K/A has been prepared and filed in reliance on General Instruction G to Form
10-K, which provides that registrants may provide the information required by Part III in a
definitive proxy statement or an amendment to the Form 10-K filed with the SEC within 120 days
after the end of the fiscal year covered by the report. The Company had initially planned to file
the Part III information in a definitive proxy statement. The Company has determined to instead
file this Form 10-K/A to provide the Part III information within the required time period. This
Form 10-K/A also amends Item 15 to update the exhibit list that was originally provided in the Form
10-K.
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the
Exchange Act), each item of the original Form 10-K that is amended by this Form 10-K/A is
restated in its entirety, and this Form 10-K/A is accompanied by currently dated certifications on
Exhibits 31.1 and 32.1 by the Companys Chief Executive Officer and Exhibits 31.2 and 32.2 by the
Companys Chief Financial Officer.
The original Form 10-K is therefore amended to: (i) delete the reference on the cover of the
original Form 10-K to the incorporation by reference of a definitive proxy statement into Part III
of such Form 10-K and (ii) revise Part III, Items 10 through 14 and Part IV, Item 15 of the
Companys original Form 10-K to include information previously omitted from the original Form 10-K.
Except as described above, no other changes have been made to the original Form 10-K. The
original Form 10-K continues to speak as of March 31, 2011, the date the Company filed the original
Form 10-K with the SEC, and other than as expressly indicated in this Form 10-K/A, the Company has
not updated the disclosures contained therein to reflect any events that have occurred at a date
subsequent to March 31, 2011. Accordingly, this Form 10-K/A should be read in conjunction with the
original Form 10-K and the Companys other reports filed thereafter.
FORWARD LOOKING STATEMENTS
Care Investment Trust Inc. (all references to Care, the Company, we, us, and our
mean Care Investment Trust Inc. and its subsidiaries) makes forward-looking statements in this
Form 10-K/A that are subject to risks and uncertainties. Forward-looking statements include all
statements that do not relate solely to historical or current facts and can be identified by the
use of words such as may, will, expect, believe, intend, plan, estimate, continue,
should and other comparable terms. These forward-looking statements include information about
possible or assumed future results of our business and our financial condition, liquidity, results
of operations, plans and objectives. They also include, among other things, statements concerning
anticipated revenue, income or loss, capital expenditures, dividends, capital structure, or other
financial terms as well as statements regarding subjects that are forward-looking by their nature.
The forward looking statements are based on our beliefs, assumptions, and expectations of our
future performance, taking into account the information currently available to us. These beliefs,
assumptions, and expectations can change as a result of many possible events or factors, not all of
which are known to us. If a change occurs, our business, financial condition, liquidity, and
results of operations may vary materially from those expressed in our forward looking statements.
You should carefully consider these risks that could cause actual results to vary from our forward
looking statements when you make a decision concerning an investment in our securities. We are not
obligated to publicly update or revise any forward looking statements, whether as a result of new
information, future events, or otherwise.
3
Part III
ITEM 10. Directors, Executive Officers and Corporate Governance.
DIRECTORS
Set forth below is the name, age, title and tenure of each director of the Company as of April
28, 2011 followed by a summary of each directors background and principal occupations. There are
no family relationships among any of the members of our Board of Directors. The directors serve one
year terms.
Directors
Name | Age | Director Since | ||||||
Michael G. Barnes (Chairman of
the Board) |
44 | 2010 | ||||||
Geoffrey N. Kauffman (Vice Chairman) |
52 | 2010 | ||||||
Flint D. Besecker (Lead Independent
Director & Chairman of the
Compensation, Nominating &
Governance Committee) |
45 | 2007 | ||||||
William A. Houlihan (Chairman of
the Audit Committee) |
55 | 2010 | ||||||
Jonathan Ilany |
58 | 2010 | ||||||
Salvatore V. (Torey) Riso, Jr. |
49 | 2010 | ||||||
J. Rainer Twiford |
58 | 2007 |
Michael G. Barnes has been a member of our Board of Directors since August 13, 2010, serving
as our Chairman, and also serves on our Executive Committee. He has served as the chief executive
officer and chairman of Tiptree Financial Partners, L.P. since its inception in 2007 and is a
founding partner of Tricadia Holdings, L.P. and its affiliated companies (Tricadia), which are
privately held and provide investment management services. Prior to the formation of Tricadia in
2003, Mr. Barnes spent two years as Head of Structured Credit Arbitrage within UBS Principal
Finance LLC, a wholly owned subsidiary of UBS Warburg, which conducts proprietary trading on behalf
of the firm. Mr. Barnes joined UBS in 2000 as part of the merger between UBS and PaineWebber Inc.
Prior to joining UBS, Mr. Barnes was a Managing Director and Global Head of the Structured Credit
Products Group of PaineWebber. Prior to joining PaineWebber in 1999, he spent 12 years at Bear,
Stearns & Co. Inc., the last five of which he was head of their Structured Transactions Group. Mr.
Barnes received his A.B. from Columbia College.
Mr. Barnes
was selected and qualified to serve as a member of our Board of
Directors because of his extensive experience in asset management, including the management of
credit assets, real estate, and for his experience in developing emerging and transitional
companies.
Geoffrey N. Kauffman has been a member of our Board of Directors since August 13, 2010,
serving as our Vice Chairman, and also serves on our Executive Committee. He has served as the
president and chief operating officer of Tiptree since its inception in 2007 and is President of
Muni Funding Company of America, LLC and a member of the Board of Directors of Philadelphia
Financial. Mr. Kauffman also has been a Managing Director of Tricadia since 2005. Since joining
Tricadia in 2005, Mr. Kauffman has been overseeing a variety of strategic acquisition opportunities
and permanent capital projects, including the development of Tiptree. Prior to joining Tricadia,
from 2002 to 2004, Mr. Kauffman was a partner with the Shidler Group in a similar capacity, with
his primary focus being the development of a credit derivative products company (CDPC). Before
joining the Shidler Group, from 1997 to 2001, Mr. Kauffman was involved in the launch of the CGA
Group of companies, which originated financial guarantee contracts. From 1997 through 1999, he was
the president, Chief Underwriting Officer and Principal Representative of CGA Bermuda, Ltd, the CGA
Groups Bermuda based insurance subsidiary. From 2000 to 2001, he was the president and chief
executive officer of CGA Investment Management. Prior to joining
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CGA, Mr. Kauffman was at AMBAC and the MBIA / AMBAC International joint venture in 1995 and 1996,
where he helped develop their international structured finance department. Prior to AMBAC, from
1989 to 1995, Mr. Kauffman was with FGICs ABS group and helped establish that business, focusing
on CDOs, asset backed securities and multi-seller conduit programs. Prior to FGIC, Mr. Kauffman
worked in the Investment Banking Division of Marine Midland Bank (now HSBC), where he focused on
middle market mergers and acquisitions and structured finance. Mr. Kauffman holds a B.A.
(Psychology) from Vassar College and an M.B.A. (Finance) from Carnegie Mellon University.
Mr. Kauffman was selected and qualified to serve as a member of our Board of
Directors because of his significant and diverse experience in financial transactions, particularly
credit transactions, and real estate, as well as his experience in developing emerging and
transitional companies.
Salvatore (Torey) V. Riso Jr. has served as our President and Chief Executive Officer since
December 2009, and was appointed to our Board of Directors on November 4, 2010, effective as of
November 16, 2010, and also serves on our Executive Committee. Mr. Riso formerly served as our
secretary and chief compliance officer from February 2008 until December 2009. He was employed by
CIT from September 2005 through November 2010, serving as senior vice president and chief counsel
of CIT Corporate Finance since March 2007. Prior to his position at CIT Corporate Finance, Mr. Riso
served as chief counsel for CIT Healthcare LLC, our former external manager (CIT Healthcare), and
other business units of CIT. Between 1997 and 2005, Mr. Riso was in private practice in the New
York office of Orrick Herrington & Sutcliffe LLP, where he worked in Orricks global finance
practice group. Mr. Riso received a B.A. in economics and history cum laude from UCLA, as well as a
J.D. from the Loyola Law School of Los Angeles.
Mr. Riso was selected and qualified to serve as a member of our Board of
Directors because of his experience in legal and finance matters and because of his intimate
knowledge of our Company.
Flint D. Besecker is our founder and has been a member of our Board of Directors since Care
was formed in 2007 and previously served as our Chairman. Mr. Besecker is a veteran of both the
commercial finance and healthcare industries and currently runs Firestone Asset Management, a
healthcare middle market private equity business he founded in 2008. Firestone owns a variety of
private equity investments focused on early stage life science drug development as well as
specialty pharmaceutical companies. In October 2010, Mr. Besecker was named chief executive officer
of The Center for Hospice & Palliative Care in Buffalo, New York. In addition, Mr. Besecker was
formerly a director and Chairman of the compensation committee of Allion Healthcare, a specialty
pharmaceutical company serving patients throughout the U.S. Mr. Besecker served as the president
and founder of our former external manager, CIT Healthcare LLC, and also served as president of CIT
Commercial Real Estate. Prior to joining CIT Group Inc. (CIT) in 2004, Mr. Besecker held a
variety of executive positions including managing director of GE Healthcare Financial Services,
executive vice president and chief risk officer of Heller Healthcare Finance and president and
co-founder of Healthcare Analysis Corporation. He also served as an officer of Healthcare Financial
Partners prior to its acquisition by Heller. He received a B.S. in Accounting from Canisius College
in 1988 and is a Certified Public Accountant.
Mr. Besecker was selected and qualified to serve as a member of our Board of
Directors because of his significant achievements with, and intimate knowledge of, the Company and
his extensive experience in healthcare and real estate.
J. Rainer Twiford has been a member of our Board of Directors since the consummation of our
initial public offering in 2007. Since 1999, Mr. Twiford has been president of Brookline Partners,
Inc., an investment advisory company. Prior to joining Brookline Partners, Mr. Twiford was a
partner of Trammell Crow Company from 1987 until 1991. Mr. Twiford is currently a director of IPI,
Inc., Smith of Georgia and Tracon Pharmaceuticals, and previously served on the board of a
childrens behavioral health company. Mr. Twiford received a BA and a Ph.D. from the University of
Mississippi, an M.A. from the University of Akron and a J.D. from the University of Virginia.
Mr. Twiford was selected and qualified to serve as a member of our Board of
Directors because of his extensive high level experience in the financial industry.
Jonathan Ilany has been a member of our Board of Directors since August 13, 2010. He has been
chairman of the board of directors of Reliance First Capital, a privately owned mortgage company,
since 2008. Since 2005, Mr. Ilany has been a private investor and passive partner at Mariner
Investment Group. Mr. Ilany was a partner at Mariner Investment Group from 2000-2005, responsible
for hiring and setting up new trading groups, overseeing
5
risk management, and he was a senior member of the investment committee and management
committee of the firm. From 1996-2000, Mr. Ilany was a private investor. From 1982-1995, Mr.
Ilany was an employee of Bear Stearns & Co. He was nominated to the Board of Directors of the
Company in 1988. From 1980-1982, Mr. Ilany worked at Merrill Lynch. From 1971-1975, Mr. Ilany
served in the armored corps of the Israeli Defense Forces and he was honorably discharged holding
the rank of First Lieutenant.
Mr. Ilany
was selected and qualified to serve as a member of our Board of
Directors because of his extensive experience in overseeing risk management and serving on the
investment committee and management committee of a major investment firm, serving on the board of
directors of various companies and his experience with investing in real estate and real
estate-related assets.
William A. Houlihan has been a member of our Board of Directors since August 13, 2010. He has
more than 30 years of business and financial experience. Since September 2009, he has served on the
Board of Directors and as the financial expert on the audit committee of First Physicians Capital
Group, Inc., a publicly-traded company that owns ambulatory surgical centers and small hospitals.
Mr. Houlihan served on the board of directors of SNL Financial, a privately-held company that
maintains database financial information on financial institutions, REITs, energy, media and other
companies, from November 2003 until June 2010. During an eight-year period from 2001 through 2008,
Mr. Houlihan was a private investor while he served as transitional Chief Financial Officer for
several distressed companies: Sixth Gear, Inc. from October 2007 to November 2008, Sedgwick Claims
Management Services from August 2006 until January 2007, Metris Companies from August 2004 to
January 2006, and Hudson United Bancorp from January 2001 to November 2003. Mr. Houlihan also
worked as an investment banker at UBS from June 2007 to September 2007, J.P. Morgan Securities from
November 2003 to July 2004, KBW, Inc. from October 1996 to January 2001, Bear, Stearns & Co., Inc.
from April 1991 to October 1996, and Goldman Sachs & Co. from June 1981 to April 1991. He also held
several auditing and accounting positions from June 1977 through June 1981. Mr. Houlihan received a
B.S., Magna Cum Laude in Accounting in 1977 from Manhattan College, became licensed as a Certified
Public Accountant in 1979, and received his M.B.A. in Finance in 1983 from New York University
Graduate School of Business.
Mr. Houlihan
was selected and qualified to serve as a member of our Board of
Directors because of his diverse financial experience, including his service on the boards of
directors of several small capitalization, high-growth companies, as chief financial officer of
transitional public and privately-held companies and his extensive accounting background.
Director Independence
Our Corporate Governance Guidelines require that a substantial majority of the Board be
composed of independent directors who meet the independence criteria established by our Corporate
Governance Guidelines. For a director to be considered independent, the Board must affirmatively
determine that the director has no material relationship with Care (either directly or as a
partner, stockholder, or officer of an organization that has a relationship with Care). In
assessing the materiality of a directors relationship with Care, the Board broadly considers all
relevant facts and circumstances, not only from the standpoint of the director, but also that of
persons or organizations with which the director has an affiliation. The Board considers the
following criteria, among others, in determining whether a director qualifies as independent:
The director cannot have been an employee, or have an immediate family member who was an
executive officer (excluding any interim executive officer position), of Care during the preceding
three (3) years;
The director cannot receive, or have an immediate family member who has received at any time
during the previous three (3) years, more than $120,000 during any twelve (12) month period in
direct compensation from Care (excluding any interim executive officer position), other than
director and committee fees and pension or other forms of deferred compensation for prior service
(provided such compensation is not contingent on continued service);
The director cannot be a partner of or employed by, or have an immediate family member who was
a partner of or employed by, a present or former internal or external auditor of Care or any of
its consolidated subsidiaries and personally worked on Cares audit during the preceding three (3)
years;
6
The director cannot be employed, or have an immediate family member who was employed, as an
executive officer of another company where any of Cares present executives has served on such
companys compensation committee during the preceding three (3) years; and
The director cannot be an executive officer or an employee, or have an immediate family member
who was an executive officer, of a company that made payments to or received payments from Care in
an amount per year in excess of the greater of $1 million or 2% of such companys consolidated
gross revenues during the preceding three (3) years.
Our Definition of Independent Director is included as Appendix A to this Form 10-K/A. Our
Board of Directors has affirmatively determined, based upon its review of all relevant facts and
circumstances, that each of the following directors has no direct or indirect material relationship
with us and is independent under our Definition of an Independent Director: Messrs. Besecker,
Houlihan, Ilany, and Twiford. If Cares securities become listed for trading on any exchange, the
foregoing criteria may be replaced, if necessary, by the requirements in such exchanges rules applicable to
companies listed for trading on such exchange.
Audit Committee
Our Board of Directors has established an audit committee that meets the definition provided
by Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee is
comprised of three (3) of our independent directors: Messrs. Houlihan, Ilany and Twiford. In
addition to satisfying our definition of independence, our Audit Committee members satisfy the
definition of independence imposed by Rule 10A-3 under the Securities Exchange Act of 1934, as
amended. Mr. Houlihan chairs the committee and has been determined by our Board of Directors to be
an audit committee financial expert as that term is defined in the Securities Exchange Act of
1934, as amended.
The Audit Committee assists the Board of Directors in overseeing:
| our accounting and financial reporting processes; | ||
| the integrity and audits of our consolidated financial statements; | ||
| our compliance with legal and regulatory requirements; | ||
| the qualifications and independence of our independent auditors; and | ||
| the performance of our independent auditors and any internal auditors. |
The Audit Committee is also responsible for engaging the independent auditors, reviewing with
the independent auditors the plans and results of the audit engagement, approving professional
services provided by the independent auditors and considering the range of audit and non-audit
fees.
7
AUDIT COMMITTEE REPORT
The Audit Committee oversees our financial reporting process on behalf of our Board of
Directors, in accordance with our Audit Committee Charter, which was approved in 2007 and amended
in 2010. Management has the primary responsibility for the preparation and presentation and
integrity of our financial statements and has represented to the Audit Committee that such
financial statements were prepared in accordance with generally accepted accounting principles. In
fulfilling its oversight responsibilities, our Audit Committee reviewed the audited financial
statements in the Annual Report on Form 10-K for the year ended December 31, 2010 with management,
including a discussion of the quality, not just the acceptability, of the accounting principles,
the reasonableness of significant judgments and the clarity of disclosures in the financial
statements.
Our Audit Committee reviewed with our independent auditors, who are responsible for auditing
our financial statements and for expressing an opinion on the conformity of those audited financial
statements with accounting principles generally accepted in the United States, their judgment as to
the quality, not just the acceptability, of our accounting principles and such other matters as are
required to be discussed with the Audit Committee under Auditing Standards No. 114, Communication
with Audit Committees (which supersedes Statement on Auditing Standards No. 61, as amended). Our
independent auditors also provided to the Audit Committee the written disclosures required by the
applicable requirements of the Public Company Accounting Oversight Board relating to the
independent accountants communications with the Audit Committee concerning independence. In
addition, the Audit Committee has discussed with our independent auditors the auditors
independence from both management and our Company.
Our Audit Committee discussed with our independent auditors the overall scope and plans for
their audit. Our Audit Committee met with our independent auditors, with and without management
present, to discuss the results of their examinations, and the overall quality of our financial
reporting.
In reliance on the reviews and discussions referred to above, our Audit Committee recommended
to our Board of Directors that the audited financial statements be included in the Annual Report on
Form 10-K for the year ended December 31, 2010 for filing with the SEC.
Submitted by our Audit Committee
William A. Houlihan (Chairman)
Jonathan Ilany
J. Rainer Twiford
Jonathan Ilany
J. Rainer Twiford
8
EXECUTIVE COMMITTEE AND EXECUTIVE OFFICERS
Executive Committee
Our Board of Directors, in August 2010, appointed an Executive Committee comprised of Michael
G. Barnes, the Chairman of our Board of Directors, and Geoffrey N. Kauffman, the Vice Chairman of
our Board of Directors, and delegated authority to the Executive Committee to implement the
policies of the Company, as determined by the Board of Directors, to manage the Companys
day-to-day business, operations, activities and affairs, including participating in the review of
the Companys acquisition opportunities, portfolio management, financing opportunities and
forecasting and capital budgeting. Mr. Riso joined the Executive Committee in November 2010
following his appointment to our Board of Directors.
The biographies for Mr. Barnes, Mr. Kauffman and Mr. Riso are included above under ITEM 10 on Pages 4 and 5.
Directors, Executive Officers and Corporate Governance.
Executive Officers
Salvatore (Torey) V. Riso, Jr. has served as our President and Chief Executive Officer since
December 2009. Our Board of Directors appointed Steven M. Sherwyn as our new Chief Financial
Officer and Treasurer in November 2010. Mr. Risos and Mr. Sherwyns initial terms will end
December 31, 2013 after which time their contracts shall extend through automatic one-year
renewals, unless either party gives at least 90 days prior written notice of nonrenewal.
The following sets forth biographical information regarding Steven M. Sherwyn as of April 28,
2011. The biography for Mr. Riso is included above under ITEM 10 on Page 5. Directors, Executive Officers
and Corporate Governance.
Steven M. Sherwyn, age 50, was appointed to serve as our Chief Financial Officer and Treasurer
on November 4, 2010. Mr. Sherwyn has over 24 years of finance, legal and real estate experience.
Mr. Sherwyn served as a director, senior director and managing director of Hypo Real Estate Capital
Corp. from 2004 to 2006, 2006 to 2007 and 2007 to 2008, respectively. He also served as chief
financial officer and treasurer for Quadra Realty Trust, a real estate investment trust, from 2007
to 2008. Finally, Mr. Sherwyn served as chief financial officer for Galiot Capital Corporation from
2008 to 2009 and chief financial officer of Western Asset Mortgage Capital Corporation in 2009,
both real estate investment trusts. Mr. Sherwyn is a graduate of The Wharton School of the
University of Pennsylvania with a B.S. in economics. Mr. Sherwyn also received a J.D. from Stanford
University Law School and an LL.M. in taxation from New York University Law School.
CORPORATE GOVERNANCE
Code of Business Conduct, Code of Ethical Conduct and Board Committee Charters
Our Board of Directors has adopted a Code of Business Conduct and a Code of Ethical Conduct
that applies to our directors, executive officers and other employees. The Code of Business
Conduct and Code of Ethical Conduct were designed to assist our directors, executive officers and
other employees in complying with the law, resolving moral and ethical issues that may arise and in
complying with our policies and procedures. Among the areas addressed by the Code of Business
Conduct and Code of Ethical Conduct are compliance with applicable laws, conflicts of interest, use
and protection of our Companys assets, confidentiality, communications with the public, accounting
matters, record keeping and discrimination and harassment. We will provide to any person
without charge, upon request, a copy of the Code of Business Conduct
and Code of Ethical Conduct. You may request a copy of the Code of
Business Conduct and Code of Ethical Conduct by sending a written communication by U.S. mail or overnight delivery to the following
address c/o Steven M. Sherwyn, Chief Financial Officer and Treasurer, at Care Investment Trust
Inc., 780 Third Avenue, 21st Floor, New York, New York 10017.
Corporate Governance Documents Available at Our Website
We are committed to operating our business under strong and accountable corporate governance
practices. You are encouraged to visit the corporate governance section of our corporate website
at http://www.carereit.com to view or to obtain copies of the respective charters of our Audit
Committee and Compensation, Nominating and
9
Governance Committee (the CNG Committee), our Code of Business Conduct, Code of Ethical Conduct,
Corporate Governance Guidelines and our Definition of an Independent Director.
Communications with our Board of Directors
We have a process by which stockholders and/or other parties may communicate with our Board of
Directors, our independent directors as a group or our individual directors. Any such
communications may be sent to our Board by U.S. mail or overnight delivery and should be directed
to the Board of Directors, a Committee, the independent directors as a group, or an individual
director, c/o Steven M. Sherwyn, Chief Financial Officer and Treasurer, at Care Investment Trust
Inc., 780 Third Avenue, 21st Floor, New York, New York 10017, who will forward such
communications on to the intended recipient. Any such communications may be made anonymously. In
addition, stockholder communications can be directed to the Board by calling the Care hotline
listed on our website.
Executive Sessions of Independent Directors
In accordance with our Corporate Governance Guidelines, the independent directors serving on
our Board of Directors have an opportunity to meet in executive session at the end of each
regularly scheduled Board meeting without the presence of any non-independent directors or other
persons who are part of our management. The executive sessions are chaired by Mr. Besecker, the
lead independent director. Interested parties may communicate directly with the presiding director
or non-management directors as a group through the process set forth above under Communications
with our Board of Directors.
10
ITEM 11. Executive Compensation.
COMPENSATION DISCUSSION AND ANALYSIS
Overview
In the discussion that follows, we provide an overview and analysis of our compensation
programs and policies, the material compensation decisions we have made under those programs and
policies with respect to our current executive officers and the material factors that we considered
in making those decisions. Following this Compensation Discussion and Analysis, beginning on Page
16 are a series of tables containing specific data about the compensation paid to our executive
officers in 2010.
Executive Overview and Compensation Program Objectives
In November 2010, we transitioned from an externally managed REIT to a REIT with a hybrid
structure, including internal management and a Services Agreement with TREIT Management LLC
(TREIT) (as more fully described under Item 13 below), which is an affiliate of Tiptree Capital
Management, LLC (Tiptree Capital), by which Tiptree Financial Partners, L.P. (Tiptree), our
largest shareholder, is externally managed. Prior to this transition, we had no employees and were
managed by CIT Healthcare LLC. Of our current executive officers, Salvatore (Torey) V. Riso, Jr.,
our Chief Executive Officer, was employed by an affiliate of our former manager, while our Chief
Financial Officer, Steven M. Sherwyn, joined us in a formal capacity after the transition from CIT
Healthcare, and thus we did not pay any cash compensation to our executive officers in such
capacity while we were managed by CIT Healthcare. In November 2010, in conjunction with the
termination of CIT Healthcare as our external manager and our transition from an externally managed
REIT to a REIT with a hybrid structure, including internal management and a Services Agreement with
TREIT, we entered into employment agreements with our Chief Executive Officer, Mr. Riso and our
Chief Financial Officer, Mr. Sherwyn (the Employment Agreements), which were approved by our CNG
Committee, which consists of four of the members of our Board of Directors (the Board), all of
whom are independent.
Due to our recent transition into an internally managed REIT, part of our compensation
objective is to provide compensation packages that take into account the level of responsibility
and scope of duties of each of our executive officers consistent with an internally managed
structure. In addition, the compensation packages are designed to achieve our goals of promoting
financial and operational success by attracting, motivating and facilitating the retention of key
employees with outstanding talent and ability. The compensation packages are also intended to
reward the achievement of specific short and long-term strategic goals that are tied to creating
stockholder value.
Our 2010 executive compensation packages consisted of two components, which were designed to
be consistent with our compensation objectives: (i) base salary and (ii) incentive payment.
Because our executive officers were only employed by the Company for two months in 2010, the 2010
executive compensation packages did not include a performance based cash or equity bonus. We did,
however, pay our executive officers a one time incentive payment, as discussed below on Page 12.
In structuring the 2010 executive compensation packages, the Board and the CNG Committee
focused primarily on our policy of attracting and retaining executive officers with outstanding
abilities who could manage our Company effectively. Thus, the Board and CNG Committee designed the
2010 base salaries to be competitive in the marketplace based on the executive officers levels of
skill and expertise. The incentive payments to Mr. Riso were designed to attract him to remain our
President and Chief Executive Officer, which required him to leave his employment with an affiliate
of our former manager, CIT Healthcare. The incentive payments to Mr. Sherwyn were designed to
attract him to join our Company as Chief Financial Officer.
Compensation Methodology
The CNG Committee is responsible for reviewing, evaluating and approving the performance and
compensation of the Chief Executive Officer as well as recommending to the Board the compensation
of our Chief Financial Officer. The CNG Committee reviewed the executive compensation structure
developed in conjunction with our transition from an externally managed REIT to a REIT with a
hybrid structure (including internal management and a Services Agreement with TREIT) and authorized
the negotiation of the Employment Agreements by the Executive Committee of our Board (which at the
time was comprised of Michael G. Barnes, the Chairman, and Geoffrey N. Kauffman, the Vice Chairman)
and ultimately approved the Employment Agreements. Since then,
11
Mr. Riso has become a member of the Executive Committee. The Employment Agreements entered into
between us and our executive officers established the executive compensation packages for 2010.
In structuring the compensation packages for 2010, the CNG Committee was presented with
compensation data for executives at a peer group of other Healthcare REITs, with positions and
responsibilities comparable to those held by our executive officers to help them consider a
competitive level of executive compensation, which consisted of the following companies:
HCP, Inc.
|
Omega Healthcare Investors, Inc. | |
Ventas, Inc.
|
Medical Properties Trust, Inc. | |
Health Care REIT, Inc.
|
National Health Investors, Inc. | |
Nationwide Health Properties, Inc.
|
LTC Properties, Inc. | |
Healthcare Realty Trust Incorporated
|
Cogdell Spencer Inc. | |
Senior Housing Properties Trust
|
Universal Health Realty Income Trust |
This data consisted of base salary, cash bonus and equity award information, as well as total
direct compensation paid by each of the peer companies as reflected in their proxy statements.
Although the CNG Committee reviewed compensation data for executives at the peer companies with
positions comparable to those held by our executive officers, the CNG Committee did not benchmark
to a particular percentile or specific performance metric, but rather used the peer group
information to help guide its compensation decisions.
As discussed above, a key priority for us is to attract, retain and motivate a top quality
management team. In order to attract a high caliber management team, the compensation packages
offered must be competitive within the Healthcare REIT market, as well as reflective of the
executives level of skill and expected contributions. The 2010 compensation packages for Mr. Riso
and Mr. Sherwyn were the result of the CNG Committees understanding of the expected contributions
in connection with the retention of Mr. Riso and the recruitment of Mr. Sherwyn, and the executive
officers level of skill and compensation paid to similar positions within the peer group.
Executive Compensation Program Elements
Base Salary: Base salary is intended to reward core competence in the executive officers
roles relative to their skill and experience and is intended to be competitive to amounts paid to
executive officers of other Healthcare REITs. Following the termination of CIT Healthcare as our
external manager and our transition from an externally managed REIT to a REIT with a hybrid
structure, including internal management and a Services Agreement with TREIT, from November 16,
2010, until December 31, 2010, Mr. Riso received a base salary of $225,000 per annum (pro-rated for
the partial calendar year); and from November 1, 2010 until November 30, 2010 and from December 1,
2010 until December 31, 2010, Mr. Sherwyn received $150,000 and $200,000 per annum, respectively
(pro-rated for the partial calendar year). Mr. Sherwyn also served as a consultant to the Company
from September 14, 2010 through October 31, 2010 while the Company was still externally managed by
CIT Healthcare. During this period, he received total cash compensation of $20,194 related to
consulting fees for services rendered.
Incentive Payment: As a part of our 2010 executive compensation packages, one-time cash and
equity grants were awarded to our executive officers. As discussed above, these incentive payments
were intended to assist in retaining Mr. Riso as our Chief Executive Officer, which required him to
leave his employment with CIT Group, and recruit Mr. Sherwyn to join our Company as Chief Financial
Officer. The one-time cash and equity grants included the following: for Mr. Riso, (i) a $100,000
cash payment and (ii) a grant of 42,105 shares, with a then-current market value of approximately
$200,000; and for Mr. Sherwyn, a grant of 10,000 shares, with a then-current market value of
$47,500.
2011 Executive Compensation Program
Unlike our 2010 executive compensation packages, our 2011 packages will consist of three
components, which are designed to be consistent with our compensation objectives: (i) base salary;
(ii) annual cash performance bonus; and (iii) annual equity performance bonus, which are long-term
equity incentive compensation awards.
In structuring the 2011 executive compensation packages, the Board and the CNG Committee
considered how each component promotes retention and motivates performance. Some of the
compensation elements, such as base salaries and annual cash performance bonuses, are paid out on a
short-term or current basis. Other elements, such as the annual equity performance bonuses are
subject to multi-year vesting schedules, and are paid out over a
12
longer-term basis. We believe this mix of short- and long-term elements allows us to achieve our
goals of attracting, retaining and motivating our top executives. Additionally, to emphasize
performance-based compensation, the compensation packages are designed so that a substantial
portion of the cash-based compensation may be earned through an annual cash bonus that is dependent
on each of our executive officers performance and the performance of the Company as a whole.
Base Salary: As discussed above, base salary is intended to reward core competence in our
executive officers roles relative to their skill, experience and contributions to our Company and
competitive to amounts paid to executive officers of other Healthcare REITs. In 2011, Mr. Riso
will receive a base salary of $250,000 and Mr. Sherwyn will receive a base salary $200,000.
Annual Cash Performance Bonus: Annual cash bonuses are primarily intended to motivate
executive officers to achieve specific operational and financial objectives. Beginning in 2011,
the Employment Agreements provide for an annual bonus that, in 2011, could range from $200,000 to
$300,000 for Mr. Riso and from $100,000 to $200,000 for Mr. Sherwyn if certain performance
Threshold, Target and Maximum targets that will be established by the CNG Committee are reached.
Annual Equity Performance Bonus: Annual equity bonuses are long-term compensation awards
designed to align the interests of our executive officers with those of our stockholders. The
equity awards granted to our executive officers are generally subject to time-based vesting
requirements designed to promote the retention of management and are intended to align the
long-term performance and interests of management to that of our shareholders. Beginning in 2011,
the Employment Agreements provide for an annual equity performance bonus that, in 2011, could range
in value from $125,000 to $375,000 for Mr. Riso and from $150,000 to $250,000 for Mr. Sherwyn if
certain performance Threshold, Target and Maximum targets that will be established by the CNG
Committee are reached. These long-term equity incentive compensation awards may consist of
restricted stock, stock options, stock appreciation rights or other types of equity bonus awards,
as determined by the CNG Committee and awarded pursuant to the 2007 Care Investment Trust Inc.
Equity Plan (the Equity Plan) or any other equity incentive plan in effect at the time.
Retirement Plans
Our executive officers and other members of our Company are eligible to participate in a
401(k) plan up to the maximum amount permitted under the Internal Revenue Code of 1986, as amended,
or the Code.
Termination and Change-in-Control Arrangements
Under the Employment Agreements, the current executive officers are entitled to payments and
benefits upon the occurrence of specified events including termination of employment. The specific
terms of these arrangements are discussed under the heading Potential Payments Upon Termination or
Change in Control on Page 20. The terms of these arrangements were negotiated as a part of the
Employment Agreements and were considered reasonable in light of our intention to retain Mr. Riso
and recruit Mr. Sherwyn to join our Company.
Equity Compensation
Our CNG Committee, may, from time to time, grant equity awards pursuant to our Equity Plan that is designed to align the interests of our executive officers with
those of our stockholders, by allowing our executive officers to share in the creation of value for
our stockholders through stock appreciation and dividends. The equity awards granted to our
executive officers are generally subject to time-based vesting requirements designed to promote the
retention of management and to achieve strong performance for our Company. These awards further
provide flexibility to us in our ability to attract, motivate and retain talented individuals. The
Company did not grant any equity awards to any of its executive officers in 2010, however several
grants vested during 2010. A more detailed discussion of the Equity Plan and the grants that
vested during 2010 is included under the heading Narrative to Summary Compensation Table for 2010
and Grants of Plan-Based Awards Table For 2010Equity Compensation beginning on Page 17 below.
Policy with Respect to Section 162(m)
Section 162(m) of the Code generally disallows public companies a tax
deduction for compensation in excess of $1,000,000 paid to their chief executive officers and
certain of their other executive
13
officers unless certain performance and other requirements are met. Our intent generally is to
design and administer executive compensation programs in a manner that will preserve the
deductibility of compensation paid to our executive officers, and we believe that a substantial
portion of our current executive compensation program satisfies the requirements for exemption from
the $1,000,000 deduction limitation. However, we reserve the right to design programs that
recognize a full range of performance criteria important to our success, even where the
compensation paid under such programs may not be deductible. The CNG Committee will continue to
monitor the tax and other consequences of our executive compensation program as part of its primary
objective of ensuring that compensation paid to our executive officers is reasonable,
performance-based and consistent with the goals of our Company and its stockholders.
Interpretation of and changes in the tax laws and other factors beyond the CNG Committees
control may affect the deductibility of certain compensation payments. The CNG Committee will
consider various alternatives to preserve the deductibility of compensation payments and benefits
to the extent reasonably practicable and to the extent consistent with its other compensation
objectives.
Analysis of Risk in Compensation Program
The structure of our Companys compensation program is designed to discourage our executive
officers from engaging in unnecessary and excessive risk taking. The compensation program is
structured to focus our executive officers attention on financial and operating results in the
near term and also to the creation of stockholder value over the long term. Our CNG Committee and
Board of Directors considered the current risk profile of our Companys 2010 compensation packages
when approving them and will continue to do so as they further develop the 2011 compensation
packages. In regard to the 2011 compensation packages, the CNG Committee will note ways in which
risk is effectively managed or mitigated, including whether there is a balanced mix of the near
term and long term elements that will comprise our 2011 compensation packages, whether there are
varied performance metrics in our executive officers annual cash and equity performance bonuses
and whether the CNG Committee has the ability to employ discretion when awarding annual and
long-term incentive compensation. Accordingly, we believe that our compensation program (i)
promotes behavior that is focused on the achievement of financial and operating metrics and supports
sustainable value creation for our stockholders and (ii) is not reasonably likely to have a
material adverse effect on the Company.
14
COMPENSATION, NOMINATING AND GOVERNANCE COMMITTEE REPORT
Our CNG Committee has reviewed and discussed the Compensation Discussion and Analysis required
by Item 402(b) of Regulation S-K with management and, based on such review and discussions, our
Compensation Committee recommended to our Board of Directors that the Compensation Discussion and
Analysis be included in this annual report on Form 10-K/A.
Submitted by our CNG Committee
Flint D. Besecker (Chairman)
William A. Houlihan
Jonathan Ilany
J. Rainer Twiford
William A. Houlihan
Jonathan Ilany
J. Rainer Twiford
15
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth information regarding the compensation paid to our named
executive officers by us in 2010, 2009 and 2008.
Summary Compensation Table
Salary | Cash Bonus | Stock Awards(1) | Total | |||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($) | ($) | |||||||||||||||
Salvatore (Torey) V. Riso, Jr.(2) |
2008 | $ | | $ | | $ | 18,058 | $ | 18,058 | |||||||||||
President and Chief Executive Officer |
2009 | | | 149,933 | 149,933 | |||||||||||||||
2010 | 28,125 | 100,000 | 290,000 | 418,125 | ||||||||||||||||
Steven M. Sherwyn(3) Chief Financial Officer and Treasurer |
2010 | 29,167 | | 47,500 | 76,667 | |||||||||||||||
Paul F. Hughes (4) |
2009 | | | 110,131 | 110,131 | |||||||||||||||
Chief Financial Officer and Treasurer |
2010 | | | 54,000 | 54,000 |
(1) | Amounts recognized by the Company for financial statement reporting purposes in the fiscal years ended December 31, 2010, December 31, 2009 and December 31, 2008. For more information about equity grants, see Footnote 14 to our Consolidated Financial Statements in our Annual Report on Form 10-K for each of the years ended December 31, 2010, 2009 and 2008. In accordance with SEC rules, estimates of forfeitures related to service-based conditions have been disregarded. | |
(2) | On December 10, 2009, Mr. Riso was awarded a performance share award with a Threshold, Target and Maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of the award assuming the achievement of the highest level of performance is $79,800. On February 23, 2010, our Board amended the performance share awards. See Executive Compensation Performance Share Awards to Mr. Riso and Mr. Hughes on Page 18 for more information on the amendment. On August 12, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Riso vested in connection with shareholder approval of the change of control to Tiptree Financial Partners, L.P., and Mr. Riso achieved the maximum award of 10,000 shares. The stock award in the table above also includes 42,105 shares issued to Mr. Riso on January 3, 2011 as per the terms of his employment agreement which had a grant date fair value of $200,000 and was recognized by the Company as compensation expense for the fourth quarter in 2010. The salary portion of Mr. Risos compensation represents cash compensation earned from November 15, 2010 to December 31, 2010 subsequent to Cares transition into an internally-managed company. The 2010 bonus represents a $100,000 one-time cash payment made to Mr. Riso on January 3, 2011 as per the terms of his employment agreement. | |
(3) | Mr. Sherwyn was appointed Chief Financial Officer and Treasurer of the Company on November 4, 2010 and thus was not an executive officer in 2008 or 2009. The stock award in the table above includes 10,000 shares issued to Mr. Sherwyn on January 3, 2011 as per the terms of his employment agreement which had a grant date fair value of $47,500 and was recognized by the Company as compensation expense for the fourth quarter in 2010. The salary portion of Mr. Sherwyns compensation in the table above represents cash compensation earned from November 1, 2010 to December 31, 2010 subsequent to Cares transition to its new management structure. Mr. Sherwyn also served as a consultant to the Company from September 14, 2010 through October 31, 2010 while the Company was still externally managed by CIT Healthcare. During this period, he received total cash compensation of $20,194 related to consulting fees for services rendered. | |
(4) | Mr. Hughes was appointed Chief Financial Officer and Treasurer of the Company on March 16, 2009 and resigned on November 4, 2010 and thus was not an executive officer in 2008. On December 10, 2009, Mr. Hughes was awarded a performance share award with a Threshold, Target and Maximum award of 1,500, 3,000 and 6,000 shares, respectively. The grant date fair value of the award assuming the highest level of performance was $47,880. On February 23, 2010, our Board amended the performance share awards. See Executive Compensation Performance Share Awards to Mr. Riso and Mr. Hughes on Page 18 for more information on the amendment. On August 12, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Hughes vested in connection with shareholder approval of the change of control to Tiptree Financial Partners, L.P., and Mr. Hughes achieved the maximum award of 6,000 shares. |
16
Grants of Plan-Based Awards
The following table sets forth information about awards granted to our named executive
officers by us during the fiscal year ended December 31, 2010.
Grants of Plan-Based Awards Table
All Other | ||||||||||||||||||||||||||||
Stock Awards: | Grant Date | |||||||||||||||||||||||||||
Number of | Market | Fair Value of | ||||||||||||||||||||||||||
Estimated Future Payouts Under | Shares of | Price on | Stock and | |||||||||||||||||||||||||
Equity Incentive Plan Awards | Stock or | Grant | Option | |||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Units | Date | Awards | ||||||||||||||||||||||
Name | Date | (#) | (#) | (#) | (#) | ($/Sh) | ($) | |||||||||||||||||||||
Salvatore (Torey) V. Riso, Jr. |
| (1) | | | | | | | ||||||||||||||||||||
Steven M. Sherwyn |
| (2) | | | | | | | ||||||||||||||||||||
Paul F. Hughes |
| | | | | | |
(1) | On January 3, 2011, as per the terms of his employment agreement, the Company issued 42,105 shares to Mr. Riso which had a grant date fair value of $200,000 and was recognized by the Company as compensation expense for the fourth quarter in 2010. | |
(2) | On January 3, 2011, as per the terms of his employment agreement, the Company issued 10,000 shares to Mr. Sherwyn which had a grant date fair value of $47,500 and was recognized by the Company as compensation expense for the fourth quarter in 2010. |
Narrative to Summary Compensation Table for 2010 and Grants of Plan-Based Awards Table for 2010
The following discussion is intended to be read as a supplement to (i) the Summary
Compensation Table and the Grants of Plan-Based Awards Table as well as the footnotes to such
tables and (ii) the disclosure under the caption Compensation Discussion and Analysis above.
Accordingly, the following discussion should be read in conjunction with such other disclosures.
Employment Agreements
Beginning in November 2010 in conjunction with our transition from an externally managed REIT
to a REIT with a hybrid structure, including internal management and a Services Agreement with
TREIT, we entered into employment agreements with each of our executive officers. We have
summarized the material terms of these executive employment agreements under the caption
Compensation Discussion and Analysis beginning on page 11 above and Executive Compensation
Potential Payments Upon Termination or Change in Control beginning on page 20 below.
Equity Compensation
Our CNG Committee, may, from time to time, grant equity awards designed to align the interests
of our executive officers with those of our stockholders, by allowing our executive officers to
share in the creation of value for our stockholders through stock appreciation and dividends. The
equity awards granted to our executive officers are generally subject to time-based vesting
requirements designed to promote the retention of management and to achieve strong performance for
our Company. These awards further provide flexibility to us in our ability to attract, motivate and
retain talented individuals. Our Equity Plan provides for the issuance of equity-based awards, including stock options, stock appreciation
rights, restricted stock, restricted stock units, unrestricted stock awards and other awards based
on our common stock that may be made by us to our directors and officers and to our other employees
and advisors and consultants who are providing services to the Company as of the date of the grant
of the award. Shares of common stock issued to our independent directors with respect to their
annual retainer fees are also issued under this plan.
Our Board of Directors has delegated its administrative responsibilities under the Equity
Plan to our CNG Committee. In its capacity as plan administrator, the CNG Committee has the
authority to make awards to eligible directors, officers, employees, advisors and consultants, and
to determine what form the awards will take
17
and the terms and conditions of the awards. Grants of equity-based or other compensation to our
chief executive officer must also be approved by the independent members of our Board.
The following grants were made in January 2011 to our current executive officers
but were recognized as compensation by the Company in 2010:
Special
Incentive Grant to Mr. Riso and Mr. Sherwyn
On January 3, 2011 as per the terms of his employment agreement which was executed as part of
Cares transition from an externally managed REIT to a REIT with a hybrid structure, including
internal management and a Services Agreement with TREIT, Mr. Riso received 42,105 shares which had
a grant date fair value of $200,000 and was recognized by the Company as compensation expense for
the fourth quarter in 2010.
On January 3, 2011 as per the terms of his employment agreement which was executed as part of
Cares transition from an externally managed REIT to a REIT with a hybrid structure, including
internal management and a Services Agreement with TREIT, Mr. Sherwyn received 10,000 shares which
had a grant date fair value of $47,500 and was recognized by the Company as compensation expense
for the fourth quarter in 2010.
The Company did not grant any equity awards to any of its executive officers in 2010, however
the grants described below vested during 2010:
Special
Equity Grant to Mr. Riso and Mr. Hughes
On March 12, 2009, our Board of Directors approved a special grant of 10,486 restricted stock
units to Mr. Riso. The award was structured to vest in four equal installments beginning on the
first anniversary of the grant date (March 12, 2010). Our Board of Directors granted the award to
Mr. Riso, which had a grant date fair value of $62,497 based on our closing stock price on March
12, 2009 of $5.96 per share, to recognize Mr. Risos continued service to the Company. On January
28, 2010, under the terms of our Equity Plan, these restricted stock units, in addition to 12,210
restricted stock units previously issued to Mr. Riso, vested in connection with shareholder
approval of the Companys Plan of Liquidation.
On May 7, 2009, our Board of Directors approved a special grant of 13,333 restricted stock
units to Mr. Hughes. The award was structured to vest in four equal installments beginning on the
first anniversary of the grant date (May 7, 2010). Our Board of Directors granted the award to Mr.
Hughes, which had a grant date fair market value of $66,265 based on our closing stock price on May
7, 2009 of $4.97 per share, to recognize Mr. Hughess service to our company as the new chief
financial officer and treasurer. On January 28, 2010, under the terms of our Equity Plan, these
restricted stock units vested in connection with shareholder approval of the Companys Plan of
Liquidation.
Performance
Share Awards to Mr. Riso and Mr. Hughes
On December 10, 2009, our Board of Directors awarded Mr. Riso and Mr. Hughes performance share
awards with target levels of 5,000 and 3,000, respectively. These awards were amended and restated
on February 23, 2010, such that the awards were triggered upon the execution, during 2010, of one
or more of the following transactions that results in a return of liquidity to our stockholders
within the parameters expressed in the agreement: (i) a merger or other business combination
resulting in the disposition of all of the issued and outstanding equity securities of the Company;
(ii) a tender offer made directly to our stockholders either by us or a third party for at least a
majority of our issued and outstanding common stock; or (iii) the declaration of aggregate
distributions by our Board equal to or exceeding $8.00 per share. If the net proceeds were less
than $7.50 per share, each individual would receive 50% of their respective target awards. If the
net proceeds were greater than or equal to $7.50 per share and less than or equal to $7.99 per
share, each individual would receive his respective target award. If the net proceeds were equal
to or exceeded $8.00 per share, each individual would receive 200% of his respective target award.
Each performance share award would accrue any distributions declared during the award period
without duplication.
On August 12, 2010, under the terms of the performance share award and our Equity Plan, the
performance share award issued to Mr. Riso and Mr. Hughes vested in connection with shareholder
approval in connection with the Tiptree transaction, and Mr. Riso and Mr. Hughes achieved the maximum
award of 10,000 shares and 6,000 shares, respectively.
18
Compensation Mix
As discussed in more detail in the section Compensation Discussion and Analysis beginning on
Page 11 above, in 2010, our compensation program was comprised of the following two elements: (i)
base salary and (ii) initial payment. The base salary awarded to the executive officers in 2010
was set at a level that was competitive based on the executive officers level of skill and
experience. The initial payments were provided as a means of incentivizing Mr. Riso to remain our
Companys Chief Executive Officer and as a means of attracting Mr. Sherwyn to join our Company.
Performance bonuses were not included in the 2010 executive compensation packages because the
executive officers were only employees of our Company for two months
in 2010, which was not a
sufficient amount of time to determine whether a performance award was justifiable. Beginning in
2011, the executive compensation packages will include an annual cash bonus and an annual equity
bonus. In implementing these performance bonuses in 2011, the CNG Committee will seek to achieve
an appropriate balance among these elements to incentivize our executive officers to focus on
financial and operating results in the near term and the creation of stockholder value over the
long term.
Outstanding Equity Awards at Fiscal Year End
There were no Care equity awards outstanding as of December 31, 2010, which is the end of our
Companys fiscal year.
Option Exercises and Stock Vested
We have not granted any stock options. Certain stock awards and restricted stock unit and
performance share awards issued to our named executive officers, as further described in Equity
Compensation on Page 13, vested during the fiscal year ended December 31, 2010 and are set forth
in the table below.
Option Exercises and Stock Vested Table
Stock Awards | ||||||||
Number of Shares | ||||||||
Acquired on | Value Realized on | |||||||
Vesting | Vesting | |||||||
Name | (#) | ($) | ||||||
Salvatore (Torey) V. Riso, Jr. (1) |
74,801 | $ | 477,469 | |||||
Steven M. Sherwyn (2) |
10,000 | 47,500 | ||||||
Paul F. Hughes (3) |
19,333 | 164,131 |
(1) | On January 28, 2010, under the terms of our Equity plan, 22,696 restricted stock units previously issued to Mr. Riso vested in connection with shareholder approval of the Companys Plan of Liquidation. On December 10, 2009, Mr. Riso was awarded a performance share award with a Threshold, Target and Maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of the award assuming the achievement of the highest level of performance is $79,800. On February 23, 2010, our Board amended the performance share awards. See Executive Compensation Performance Share Awards to Mr. Riso and Mr. Hughes on Page 18 for more information on the amendment. On August 12, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Riso vested in connection with shareholder approval of the change of control to Tiptree |
19
Financial Partners, L.P., and Mr. Riso achieved the maximum award of 10,000 shares. Included as part of the stock which vested during 2010 in the table above is 42,105 shares issued to Mr. Riso on January 3, 2011 as per the terms of his employment agreement which had a grant date fair value of $200,000 and was recognized by the Company as compensation expense for the fourth quarter in 2010. | ||
(2) | Included as part of the stock which vested during 2010 in the table above is 10,000 shares issued to Mr. Sherwyn on January 3, 2011 as per the terms of his employment agreement which had a grant date fair value of $47,500 and was recognized by the Company as compensation expense for the fourth quarter in 2010. | |
(3) | On January 28, 2010, under the terms of our Equity plan, 13,333 restricted stock units previously issued to Mr. Hughes vested in connection with shareholder approval of the Companys Plan of Liquidation. On December 10, 2009, Mr. Hughes was awarded a performance share award with a threshold, target and maximum award of 1,500, 3,000 and 6,000 shares, respectively. The grant date fair value of the award assuming the highest level of performance was $47,880. On February 23, 2010, our Board amended the performance share awards. See Executive Compensation Performance Share Awards to Mr. Riso and Mr. Hughes on Page 18 for more information on the amendment. On August 12, 2010, under the terms of the performance share award and our Equity Plan, the performance share award issued to Mr. Hughes vested in connection with shareholder approval of the change of control to Tiptree Financial Partners, L.P., and Mr. Hughes achieved the maximum award of 6,000 shares. |
Pension Benefits
Our named executive officers received no benefits in fiscal year 2010 from us under defined
pension or defined contribution plans.
Nonqualified Deferred Compensation
Our Company does not have a nonqualified deferred compensation plan that provides for deferral
of compensation on a basis that is not tax-qualified for our named executive officers.
Other Plans, Perquisites and Benefits
With limited exceptions, the compensation committees policy is to provide benefits to
executive officers that are substantially the same as those offered to other officers and employees of our
company at or above the level of vice president. In 2010, we did not provide our executive
officers with any perquisites or personal benefits.
Potential Payments Upon Termination or Change in Control
Severance and Other Benefits Upon Termination of Employment
We have provided our executive officers with employment contracts that provide certain
benefits depending on the circumstances surrounding their termination of employment with us. In
addition to the benefits described below, upon termination of employment with us, the executive
officer is generally entitled to amounts or benefits earned or accrued during the term of
employment, including earned but unpaid salary. We have calculated the amount of any potential
payments as if the termination occurred on December 31, 2010 and therefore used the closing price
of our common stock as reported on the OTCQX on December 31, 2010, the last trading day of 2010.
As described above under Description of Employment Agreements, the employment agreements we
have with our current executive officers provide for payments of severance and other benefits upon
termination of employment.
If the executive officers employment is terminated for any reason (including the
Companys notice not to renew the Employment Period), except for a termination due to the expiration of the term of employment, by us for cause, a
voluntary resignation without a good reason or on account of death or disability, the executive
officers will be entitled to the following (collectively, the Accrued Obligations): (i)
Base Salary (at the rate in effect at the time notice of termination is given) through the date of
termination to the extent theretofore unpaid, (ii) the value of any vacation days earned but unused
through the
20
date of termination, and (iii) reimbursement for all business expenses properly incurred in
accordance with Company policy prior to the date of termination and not yet reimbursed by the
Company. The executive officer shall also be entitled to (i) the greater of (1) 12 months or (2)
the number of whole months between the termination date and February 1, 2013 of such executive
officers base salary
at the rate in effect at the time of termination; (ii) health
benefits until the earlier of (1) the 12 month anniversary of
the date of termination and (2) the date upon which executive receives similar health benefits or
is eligible to receive them from a subsequent employer; (iii) full vesting of the Companys equity
awards as of the termination date and (d) continuing exercisability of all stock options and stock
appreciation rights for the lesser of (1) 12 months after the
date of termination or (2) the remainder of their term.
If our executive officers employment terminates on account of death or disability, the
executive officers or their estates shall be entitled to the following: (i) the Accrued
Obligations; (ii) a pro-rated Annual Cash Bonus and Annual Equity Bonus based upon the number of
days in the year of termination through the date of termination relative to 365 days, assuming for
such purposes the performance targets applicable to the Annual Cash Bonus and the Annual Equity
Bonus have been satisfied at the Target Bonus Level for the year in which the date of termination
occurs; (iii) health benefits for 12 months following the date
of termination; (iv) full vesting of all Company equity awards as of the date of
termination; and (v) continuing exercisability of all stock options and stock appreciation rights
for the lesser of (1) 12 months after the date of
termination or (2) the remainder of their term.
If our executive officers are terminated due to the expiration of their term of employment,
by us for cause or if our executives employment
shall be terminated without Good Reason, the executive officers will be entitled to the Accrued
Obligations and the Company shall have no additional obligations to the executive officers.
In providing the estimated potential payments, we have made the following general assumptions
in all circumstances where applicable:
| The date of termination is December 31, 2010; | ||
| Executive officers are entitled to termination benefits, including those provided for in the 2010 employment agreements; | ||
| The annual base salaries at the time of termination is equal to the annual base salaries effective as of December 31, 2010; | ||
| There is no unpaid bonus for 2010; | ||
| There is no unused vacation time; | ||
| Our cost of continued healthcare benefits is constant over the benefit period; | ||
| There are no unvested shares under the Companys equity awards; and | ||
| There is no unpaid reimbursement for expenses incurred prior to the date of termination. |
21
Estimated Potential Payments upon Termination
Expiration of | ||||||||||||||
Term and | ||||||||||||||
Termination by | ||||||||||||||
the Company for | ||||||||||||||
Cause or by | ||||||||||||||
Executive | Termination | |||||||||||||
without Good | Termination by | Without Cause or | ||||||||||||
Executive Officer | Benefit | Reason | Death; Disability | for Good Reason | ||||||||||
Salvatore (Torey) V. Riso, Jr. |
Base Salary | $ | | $ | | $ | 468,750 | |||||||
Severance(1) | 300,000 | 300,000 | 300,000 | |||||||||||
Bonus Payment | | | | |||||||||||
Vacation | | | | |||||||||||
Healthcare | | 22,798 | 22,798 | |||||||||||
Vesting of Stock | | | | |||||||||||
Stock Options | | |||||||||||||
Business Expenses | | | | |||||||||||
Total | $ | 300,000 | $ | 322,798 | $ | 791,548 | ||||||||
Steven M. Sherwyn |
Base Salary | $ | | $ | | $ | 416,667 | |||||||
Severance(2) | 47,500 | 47,500 | 47,500 | |||||||||||
Bonus Payment | | | | |||||||||||
Vacation | | | | |||||||||||
Healthcare | | 22,798 | 22,798 | |||||||||||
Vesting of Stock | | | | |||||||||||
Stock Options | ||||||||||||||
Business Expenses | | | | |||||||||||
Total | $ | 47,500 | $ | 70,298 | $ | 486,965 |
(1) | The severance award in the table above includes 42,105 shares issued to Mr. Riso on January 3, 2011 as per the terms of his employment agreement entered into on November 4, 2010 which had a grant date fair value of $200,000 as well as a $100,000 one-time cash payment for 2010 made to Mr. Riso on January 3, 2011, such amounts as per the terms of his employment agreement. | |
(2) | The severance award in the table above includes 10,000 shares issued to Mr. Sherwyn on January 3, 2011 as per the terms of his employment agreement entered into on November 4, 2010 which had a grant date fair value of $47,500. |
Plan of Liquidation
On January 28, 2010, our stockholders approved a plan of liquidation, which was filed as
Exhibit A to our definitive proxy statement filed on December 28, 2009. Pursuant to the terms of
the restricted stock and restricted stock and performance share grant instruments and our Equity
Plans, stockholder approval of the plan of liquidation resulted in the accelerated vesting of
restricted stock and restricted stock and performance share awards.
On March 12, 2009, our Board of Directors approved a special grant of 10,486 restricted
stock units to Mr. Riso. The award was structured to vest in four equal installments beginning on
the first anniversary of the grant date (March 12, 2010). Our Board of Directors granted the award
to Mr. Riso, which had a grant date fair value of $62,497 based on our closing stock price on March
12, 2009 of $5.96 per share, to recognize Mr. Risos continued service to the Company. On January
28, 2010, under the terms of our Equity Plan, these restricted stock units, in addition to 12,210
restricted stock units previously issued to Mr. Riso, vested in connection with shareholder
approval of the Companys Plan of Liquidation.
On May 7, 2009, our Board of Directors approved a special grant of 13,333 restricted stock
units to Mr. Hughes. The award was structured to vest in four equal installments beginning on the
first anniversary of the
22
grant
date (May 7, 2010). Our Board of Directors granted the award to Mr. Hughes, which had a grant date
fair market value of $66,265 based on our closing stock price on May 7, 2009 of $4.97 per share, to
recognize Mr. Hughess service to our company as the new chief financial officer and treasurer. On
January 28, 2010, under the terms of our Equity Plan, these restricted stock units vested in
connection with shareholder approval of the Companys Plan of Liquidation.
Tiptree Transaction
On March 16, 2010, we entered into a definitive purchase and sale agreement with Tiptree
Financial Partners, L.P. (Tiptree) under which we agreed to sell newly issued common stock to
Tiptree at $9.00 per share and to launch a cash tender offer for up to all of our outstanding
common stock at $9.00 per share (the Tiptree Transaction). The Tiptree Transaction was approved
by our stockholders on August 13, 2010, resulting in a change of control of the Company.
On December 10, 2009, Mr. Riso was awarded a performance share award with a threshold, target
and maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of
the award assuming the achievement of the highest level of performance is $79,800. On February 23,
2010, our Board amended the performance share awards. See Executive Compensation Performance
Share Awards to Mr. Riso and Mr. Hughes on Page 18 for more information on the amendment. On
August 12, 2010, under the terms of the performance share award and our Equity Plan, the
performance share award issued to Mr. Riso vested in connection with shareholder approval of the
change of control to Tiptree and Mr. Riso achieved the maximum award of 10,000 shares.
On December 10, 2009, Mr. Hughes was awarded a performance share award with a threshold,
target and maximum award of 1,500, 3,000 and 6,000 shares, respectively. The grant date fair value
of the award assuming the highest level of performance was $47,880. On February 23, 2010, our
Board amended the performance share awards. See Executive Compensation Performance Share Awards
to Mr. Riso and Mr. Hughes on Page 18 for more information on the amendment. On August 12, 2010,
under the terms of the performance share award and our Equity Plan, the performance share award
issued to Mr. Hughes vested in connection with shareholder approval of the change of control to
Tiptree, and Mr. Hughes achieved the maximum award of 6,000 shares.
DIRECTOR COMPENSATION
Director Compensation
The following table sets forth information regarding the compensation paid to, and the
compensation expense we recognized, with respect to our Board of Directors during the fiscal year
ended December 31, 2010:
Director Compensation Table
Fees Earned or Paid | ||||||||||||
in Cash | Stock Awards | Total | ||||||||||
Name | ($) | ($)(1) | ($) | |||||||||
Flint D. Besecker(2) |
$ | 58,191 | $ | 360,276 | $ | 418,467 | ||||||
Gerald E. Bisbee, Jr., Ph.D.(3) |
36,691 | 33,253 | 69,945 | |||||||||
Alexandra Lebenthal(4) |
7,778 | 8,260 | 16,038 | |||||||||
Karen P. Robards(5) |
36,691 | 33,253 | 69,945 | |||||||||
J. Rainer Twiford(6) |
54,424 | 38,996 | 93,420 | |||||||||
Steven N. Warden(7) |
0 | 0 | 0 | |||||||||
Michael G. Barnes(8) |
0 | 0 | 0 | |||||||||
Geoffrey N. Kauffman(9) |
0 | 0 | 0 | |||||||||
Salvatore (Torey) V. Riso, Jr. (10) |
0 | 0 | 0 | |||||||||
William A. Houlihan(11) |
15,331 | 5,743 | 21,073 | |||||||||
Jonathan Ilany(12) |
13,415 | 5,743 | 19,158 |
(1) | Amounts recognized by the Company for financial statement reporting purposes in the fiscal year ended December 31, 2010. See Footnote 14 to our Consolidated Financial Statements in our Annual Report on Form 10-K. In accordance with SEC rules, estimates of forfeitures related to service-based conditions have been disregarded. As discussed below, each independent director receives an annual retainer payable in cash and |
23
in unrestricted shares of our common stock. These unrestricted shares are granted in approximately equal amounts per quarter in arrears and are based on the closing price of our common stock on the last business day of each quarter. The grant date fair market value of our common stock as of the end of each of the fiscal quarters in 2010 were $8.92, $8.66, $5.00 and $4.75, respectively. | ||
(2) | On January 28, 2010, under the terms of our Equity Plan, 29,000 shares of restricted stock and restricted stock units previously issued to Mr. Besecker vested in connection with shareholder approval of the Companys Plan of Liquidation. On December 10, 2009, Mr. Besecker was awarded a performance share award with a threshold, target and maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant date fair value of the award assuming the achievement of the highest level of performance was $79,800. On February 23, 2010, our Board amended the performance share awards. See Executive Compensation Performance Share Awards to Mr. Riso and Mr. Hughes for more information on the amendment. On August 12, 2010, under the terms of our Equity Plan, the performance share award issued to Mr. Besecker vested in connection with shareholder approval of the change of control to Tiptree Financial Partners, L.P., and Mr. Besecker achieved the maximum award of 10,000 shares. | |
(3) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Mr. Bisbee vested in connection with shareholder approval of the Companys Plan of Liquidation. Mr. Bisbee resigned from the Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. | |
(4) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Ms. Lebenthal vested in connection with shareholder approval of the Companys Plan of Liquidation. Ms. Lebenthal resigned from the Board of Directors on January 28, 2010. | |
(5) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Ms. Robards vested in connection with shareholder approval of the Companys Plan of Liquidation. Ms. Robards resigned from the Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. | |
(6) | On January 28, 2010, under the terms of our Equity Plan, 1,000 shares of restricted stock previously issued to Mr. Twiford vested in connection with shareholder approval of the Companys Plan of Liquidation. | |
(7) | Mr. Warden resigned from the Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. He received no annual retainer in connection with his service on our Board of Directors. | |
(8) | Mr. Barnes was appointed to our Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. He receives no annual retainer in connection with his service on our Board of Directors. | |
(9) | Mr. Kauffman was appointed to our Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. He receives no annual retainer in connection with his service on our Board of Directors. | |
(10) | Mr. Riso was appointed to our Board of Directors on November 4, 2010, effective as of November 16, 2010. He receives no annual retainer in connection with his service on our Board of Directors. | |
(11) | Mr. Houlihan was appointed to our Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. | |
(12) | Mr. Ilany was appointed to our Board of Directors on August 12, 2010 in conjunction with the sale of control of the Company to Tiptree Financial Partners, L.P. |
Each independent director receives an annual retainer of $50,000. The annual retainer payable
to our independent directors is payable quarterly in arrears, 70% in cash and 30% in unrestricted
stock. Any portion of the annual retainer that an independent director receives in stock is granted
pursuant to our Equity Plan.
The Chairs of our Audit Committee and our CNG Committee are entitled to receive an additional
annual retainer of $5,000. The annual retainer payable to our committee chairs is payable
quarterly in arrears in cash. In addition,
24
we reimburse all directors for reasonable out-of-pocket expenses incurred in connection with their
services on our Board of Directors.
Special Equity Grant to Mr. Besecker
On January 28, 2010, under the terms of our Equity Plan, 29,000 restricted stock units
previously issued to Mr. Besecker vested in connection with shareholder approval of the Companys
Plan of Liquidation. On December 10, 2009, Mr. Besecker was awarded a performance share award with
a Threshold, Target and Maximum award of 2,500, 5,000 and 10,000 shares, respectively. The grant
date fair value of the award assuming the achievement of the highest level of performance is
$79,800. On February 23, 2010, our Board amended the performance share awards. See Executive
Compensation Performance Share Awards to Mr. Riso and Mr. Hughes on Page 18 for more
information on the amendment. On August 12, 2010, under the terms of the performance share award
and our Equity Plan, the performance share award issued to Mr. Besecker vested in connection with
shareholder approval of the change of control to Tiptree Financial Partners, L.P., and Mr. Besecker
achieved the maximum award of 10,000 shares.
Compensation Committee Interlocks and Insider Participation
There are no compensation committee interlocks and none of our executive officers participate
on our CNG Committee.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
The following table sets forth the beneficial ownership of our common stock, as of April 28,
2011, for: (1) each person known to us to be the beneficial owner of more than 5% of our
outstanding common stock; (2) each of our directors; (3) each of our current executive officers as
of April 28, 2011; and (4) our directors and current executive officers as a group. Except as
otherwise described in the notes below, the following beneficial owners have sole voting power and
sole investment power with respect to all shares of common stock set forth opposite their
respective names.
In accordance with SEC rules, each listed persons beneficial ownership includes:
| all shares the investor actually owns beneficially or of record; | ||
| all shares over which the investor has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund); and | ||
| all shares the investor has the right to acquire within 60 days (such as upon exercise of options that are currently vested or which are scheduled to vest within 60 days). |
Unless otherwise indicated, all shares are owned directly and the indicated person has sole
voting and investment power. Unless otherwise indicated, the business address for each beneficial
owner listed below shall be c/o Care Investment Trust Inc., 780 Third Avenue, 21st
Floor, New York, New York 10017.
25
Amount and Nature | ||||||||
of Beneficial | ||||||||
Ownership of | Percent of | |||||||
Name | Common Stock | Total(1) | ||||||
Tiptree Financial Partners, L.P.(2) |
9,277,575 | 92.2 | % | |||||
Salvatore (Torey) V. Riso, Jr. |
42,105 | * | ||||||
Steven M. Sherwyn |
10,000 | * | ||||||
Michael G. Barnes(2) |
0 | * | ||||||
Geoffrey N. Kauffman |
0 | * | ||||||
Flint D. Besecker |
2,018 | * | ||||||
William A. Houlihan |
1,916 | * | ||||||
Jonathan Ilany |
1,916 | * | ||||||
J. Rainer Twiford |
1,916 | * | ||||||
All Directors and Executive Officers as a Group (8 Persons) (3) |
59,871 | * |
* | The percentage of shares beneficially owned does not exceed one percent of the total shares of our common stock outstanding | |
(1) | As of April 28, 2011, 10,145,049 shares of common stock were issued and outstanding and entitled to vote. The percent of total for all of the persons listed in the table above is based on such 10,145,049 shares of common stock. | |
(2) | In a Schedule 13D filed on August 13, 2010, Tiptree Financial Partners, L.P. was deemed, pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended, to hold shared voting and dispositive power over 9,277,575 shares of our Common Stock. By virtue of serving as the external manager of Tiptree Financial Partners, L.P. with respect to our Common Stock, Tiptree Capital Management, LLC (TCM) was deemed to have shared voting and dispositive power over the shares held by Tiptree Financial Partners, L.P. Likewise, Tricadia Holdings, L.P. (Tricadia Holdings), by virtue of being a direct owner of TCM, was deemed to have shared voting and dispositive power over the shares held by Tiptree Financial Partners, L.P. Similarly, Tricadia Holdings GP, L.P., as general partner of Tricadia Holdings, was deemed to have shared voting and dispositive power over the shares held by Tiptree Financial Partners, L.P. Likewise, Arif Inayatullah and Michael G. Barnes, as direct owners of TCM, were each deemed to have shared voting and dispositive power over the shares held by Tiptree Financial Partners, L.P. | |
(3) | None of the shares beneficially owned by our directors or executive officers have been pledged as security for an obligation. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers and directors, and persons who own more than 10% of a registered class of our equity
securities, to file reports of ownership and changes in ownership with the SEC. Officers,
directors and persons who own more than 10% of a registered class of our equity securities are
required to furnish us with copies of all Section 16(a) forms that they file. To our knowledge,
based solely on review of the copies of such reports furnished to us, all Section 16(a) filing
requirements
26
applicable to our executive officers, directors and persons who own more than 10% of a registered
class of our equity securities were filed on a timely basis.
Equity Compensation Plan Information
The following table summarizes information, as of December 31, 2010, relating to our equity
compensation plans pursuant to which shares of our common stock or other equity securities may be
granted from time to time.
(c) | |||||||||||||||
(a) | Number of | ||||||||||||||
Number of | (b) | securities | |||||||||||||
securities to be | Weighted- | remaining | |||||||||||||
issued upon | average | available for | |||||||||||||
exercise of | exercise price of | future issuance | |||||||||||||
outstanding | outstanding | under equity | |||||||||||||
options, warrants | options, warrants | compensation | |||||||||||||
Plan category | and rights | and rights | Plans | ||||||||||||
Equity compensation plans approved by security holders |
|||||||||||||||
Equity Plan(1) |
0 | N/A | 238,514 | ||||||||||||
Manager Equity Plan(2) |
652,500 | $ | 11.33 | 65,445 | |||||||||||
Equity compensation plans not approved by security holders |
N/A | N/A | N/A | ||||||||||||
Total |
652,500 | N/A | 303,959 |
(1) | Our Equity Plan was adopted by our sole stockholder prior to our initial public offering on June 22, 2007. | |
(2) | Our 2007 Manager Equity Plan was adopted by our sole stockholder prior to our initial public offering on June 22, 2007. The number of shares in Column (a) represents shares issuable upon exercise of a warrant that we granted to our former manager, CIT Healthcare, on September 30, 2008. See Certain Relationships and Related Transactions below. On March 16, 2010, CIT Healthcare entered into a warrant purchase agreement with Tiptree, pursuant to which, our former Manager sold its warrant to purchase 435,000 shares of our common stock to Tiptree upon the closing of the Tiptree Transaction for $100,000. This warrant was adjusted to reflect the Companys three-for-two stock split announced in September 2010 and is currently exercisable into 652,500 shares of the Companys common stock at an exercise price of $11.33 per share. |
ITEM 13. Certain Relationships and Related Transactions, and Director Independence.
Policies and Procedures With Respect to Related Party Transactions
Our Charter of the Audit Committee of the Board of Directors requires that all related party
transactions (generally, transactions involving amounts exceeding $120,000 in which a related party
(directors and executive officers or their immediate family members, or stockholders owning 5% of
more of our outstanding stock) had or will have a direct or indirect material interest) shall be
subject to pre-approval or ratification by the Audit Committee in accordance with the following
procedures. No related party transaction shall be approved or ratified if such transaction is
contrary to our best interests.
Each party to a potential related party transaction is responsible for notifying our
Chief Compliance Officer (or such other person as the Audit Committee may require) of the potential
related person transaction in which such person or any immediate family member of such person may
be directly or indirectly involved as soon as he or she becomes aware of such transaction. Except
in circumstances where such transaction is expected to qualify as an ordinary course transaction
(generally, (i) transactions that occur between Care on any of its subsidiaries and an entity for
which any related person serves as an executive officer, partner, principal, member or any
similar executive or governing capacity, (ii) an ordinary course transaction in which such related
person has an economic interest that does not afford such related person control over such entity
on terms and conditions no less favorable to Care or (iii) immaterial relationships and
transactions in the Instructions to Item 404(a) of Regulation S-K of the Securities Act of 1933, as
amended) such notification should be made prior to the time that the transaction is entered into
and such notice shall provide the Chief Compliance Officer (or such other person) a reasonable
opportunity, under the circumstances, for the required review of such transaction to be conducted
before execution. Our Chief Compliance Officer (or such other person) will determine whether the
transaction should be submitted to the Audit Committee for consideration. Unless the Committee
otherwise determines after having been notified, any proposed
27
transaction directly between the Company and any related party transaction should be reviewed and approved
by the Audit Committee prior to the time that such transaction is entered into.
While our Chief Compliance Officer (or other person) should be notified of any related
party transaction that is expected to qualify as an ordinary course exception, ordinary course
exceptions shall not be related person transactions and do not require Audit Committee approval
under our related person transactions policy. Our Chief Compliance Officer (or such other
person) shall be responsible for making the initial determination as to whether any transaction
appears to be within the scope required to be disclosed pursuant to Item 404(a) of Regulation S-K
or whether such transaction is, in fact, an ordinary course transaction and must take all
reasonable steps to ensure that all related party transactions or any series of similar
transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K are presented to
the Audit Committee for pre-approval or ratification, if required under the Charter of the Audit
Committee, at such Committees next regularly scheduled meeting, or by consent in lieu of a meeting
if deemed appropriate.
The Audit Committee shall
review and assess the adequacy of our related party transaction
policy and procedures annually and adopt any changes it deems necessary. Annually, each of our
executive officer and director shall acknowledge their familiarity and compliance with our related
person transaction policy.
Management Agreement
In connection with our initial public offering, we entered into a Management Agreement with
CIT Healthcare LLC (CIT Healthcare), which described the services to be provided by our former
Manager and its compensation for those services. Under the Management Agreement, CIT Healthcare,
subject to the oversight of our board of directors, was required to conduct our business affairs in
conformity with the policies approved by our board of directors. The Management Agreement had an
initial term scheduled to expire on June 30, 2010, which would automatically be renewed for
one-year terms thereafter unless terminated by us or CIT Healthcare.
On September 30, 2008, we entered into an amendment (the Amendment) to the Management
Agreement between ourselves and CIT Healthcare. Pursuant to the terms of the Amendment, the Base
Management Fee (as defined in the Management Agreement) payable to our former Manager under the
Management Agreement was reduced from a monthly amount equal to 1/12 of 1.75% of the Companys
equity (as defined in the Management Agreement) to a monthly amount equal to 1/12 of 0.875% of the
Companys equity. In addition, pursuant to the terms of the Amendment, the Incentive Fee (as
defined in the Management Agreement) payable to CIT Healthcare pursuant to the Management Agreement
was eliminated and the Termination Fee (as defined in the Management Agreement) payable to CIT
Healthcare upon the termination or non-renewal of the Management Agreement was amended to equal the
average annual Base Management Fee as earned by our former Manager during the two years immediately
preceding the most recently completed fiscal quarter prior to the date of termination times three,
but in no event less than $15.4 million. No termination fee would be payable if we terminated the
Management Agreement for cause.
In consideration of the Amendment and for CIT Healthcares continued and future services to
the Company, the Company granted CIT Healthcare warrants to purchase 435,000 shares of the
Companys common stock at $17.00 per share (the Warrant) under the Manager Equity Plan adopted by
the Company on June 21, 2007 (the Manager Equity Plan). The Warrant, which is immediately
exercisable, expires on September 30, 2018.
On January 15, 2010, we entered into an Amended and Restated Management Agreement (the A&R
Management Agreement) with CIT Healthcare. Pursuant to the terms of the A&R Management Agreement,
which became effective upon approval of the Companys plan of liquidation by our stockholders on
January 28, 2010, the Base Management Fee was reduced to a monthly amount equal to: (i) $125,000
from February 1, 2010 until the earlier of (x) June 30, 2010 and (y) the date on which four (4) of
the Companys six (6) then-existing investments have been sold; then from such date (ii) $100,000
until the earlier of (x) December 31, 2010 and (y) the date on which five (5) of the Companys six
(6) then-existing investments have been sold; then from such date (iii) $75,000 until the effective
date of expiration or earlier termination of the Agreement by either of the Company or CIT
Healthcare; provided, however, that notwithstanding the foregoing, the base management fee shall
remain at $125,000 per month until the later of: (a) ninety (90) days after the filing by the
Company of a Form 15 with the SEC; and (b) the date that the Company is no longer subject to the
reporting requirements of the Exchange Act. In addition, the termination fee payable to CIT
Healthcare upon the termination or non-renewal of the Management Agreement was replaced by a buyout
payment of $7.5 million, payable in installments of: (i) $2.5 million upon approval of the
Companys plan of liquidation by our stockholders; (ii) $2.5 million upon the earlier of (a) April
1,
28
2010 and (b) the effective date of the termination of the A&R Management Agreement by either of the
Company or CIT Healthcare; and (iii) $2.5 million upon the earlier of (a) June 30, 2011 and (b) the
effective date of the termination of the A&R Management Agreement by either the Company or CIT
Healthcare. The A&R Management Agreement also provided CIT Healthcare with an incentive fee of $1.5
million if: (i) at any time prior to December 31, 2011, the aggregate cash dividends paid to the
Companys stockholders since the effective date of the A&R Management Agreement equaled or exceeded
$9.25 per share or (ii) as of December 31, 2011, the sum of: (x) the aggregate cash dividends paid
to the Companys stockholders since the effective date of the A&R Management Agreement and (y) the
aggregate distributable cash equals or exceeds $9.25 per share. In the event that the aggregate
distributable cash equaled or exceeded $9.25 per share but for the impact of payment of a $1.5
million incentive fee, the Company shall have paid CIT Healthcare an incentive fee in an amount
that allows the aggregate distributable cash to equal $9.25 per share. Under the A&R Management
Agreement, the Mortgage Purchase Agreement between us and CIT Healthcare was terminated and all
outstanding notices of our intent to sell additional loans to CIT Healthcare were rescinded. The
A&R Management Agreement was to continue in effect, unless earlier terminated in accordance with
the terms thereof, until December 31, 2011.
On November 4, 2010, the Company entered into a Termination, Cooperation and Confidentiality
Agreement (the CIT Termination Agreement) with CIT Healthcare. Pursuant to the CIT Termination
Agreement, the parties terminated the A&R Management Agreement on November 16, 2010 (the
Termination Effective Date). The CIT Termination Agreement also provides for an 180 day
cooperation period beginning on the Termination Effective Date relating to the transition of
management of the Company from CIT Healthcare to the officers of the Company, a two (2) year mutual
confidentiality period and a mutual release of all claims related to CIT Healthcares management of
the Company. Under the CIT Termination Agreement, the parties agreed that in lieu of the payments
otherwise required under the termination provisions of the A&R Management Agreement, the Company
would pay to CIT Healthcare on the Termination Effective Date $2.4 million plus any earned but
unpaid monthly installments of the base management fee due under the A&R Management Agreement.
Those amounts were paid in full in November 2010. The Company previously paid $5.0 million of this
buyout fee during the first two quarters of 2010.
For the period ended December 31, 2010, we recognized $8.8 million in management fee and
buyout fee expense related to payments made to CIT Healthcare.
Services Agreement
On November 4, 2010, the Company entered into a Services Agreement (the Services Agreement)
with TREIT pursuant to which TREIT provides certain advisory services related to the Companys
business as of the Termination Effective Date. For such services, the Company pays TREIT a monthly
base services fee in arrears of one-twelfth of 0.5% of the Companys Equity (as defined in the
Services Agreement) and a quarterly incentive fee of 15% of the Companys AFFO Plus Gain/(Loss) On
Sale (as defined in the Services Agreement) so long as and to the extent that the Companys AFFO
Plus Gain /(Loss) on Sale exceeds an amount equal to Equity multiplied by the Hurdle Rate (as
defined in the Services Agreement). Twenty percent (20%) of any such incentive fee shall be paid in
shares of common stock of the Company, unless a greater percentage is requested by TREIT and
approved by an independent committee of directors. The initial term of the Services Agreement
extends until December 31, 2013. Unless terminated earlier in accordance with its terms, the
Services Agreement will be automatically renewed for one year periods following such date unless
either party elects not to renew. If the Company elects to terminate without cause, or elects not
to renew the Services Agreement, a Termination Fee (as defined in the Services Agreement) shall be
payable by the Company to TREIT.
For the year ended December 31, 2010, we paid $0.1 million in base services fee expense to
TREIT Management.
Warrant
In consideration of the Amendment and for CIT Healthcares continued and future services to
the Company, the Company granted our former manager warrants to purchase 435,000 shares of the
Companys common stock at $17.00 per share (the Warrant) under the Manager Equity Plan adopted by
the Company on June 21, 2007 (the Manager Equity Plan). The Warrant, which is immediately
exercisable, expires on September 30, 2018. As part of the Tiptree Transaction, Tiptree acquired
the Warrant from CIT Healthcare for $100,000. This warrant was adjusted to reflect the Companys
three-for-two stock split announced in September 2010 and is currently exercisable into 652,500
shares of the Companys common stock at an exercise price of $11.33 per share.
29
Director Independence
A discussion of our director
independence policies is included above beginning on Page 6 under
the section titled Director Independence.
ITEM 14. Principal Accountant Fees and Services.
Audit Fees
Fees for audit services totaled approximately $821,000 in 2009, which represent audit fees
associated with our annual audit, review of our quarterly reports on Form 10-Q, review of documents
filed with the SEC, and a consent.
Fees for audit services totaled approximately $860,650 in 2010, which represent audit fees
associated with our annual audit, reviews of our quarterly reports on Form 10-Q, review of
documents filed with the SEC, and a consent.
Audit-Related Fees
There were no fees for audit-related services in 2009 or 2010.
Tax Fees, All Other Fees
There were no tax fees or other fees paid to Deloitte & Touche LLP in 2009 or 2010.
Pre-Approval Policies and Procedures of our Audit Committee
Our Audit Committee has sole authority (with the input of management) to approve in advance
all engagements of our independent auditors for audit or non-audit services. All audit services
provided by Deloitte & Touche LLP in 2010 were pre-approved by our Audit Committee.
30
Part IV
ITEM 15. Exhibits and Financial Statement Schedules
(b) Exhibits.
Below is the Exhibit Index filed with our Companys 10-K that we originally filed with the SEC
on March 31, 2011.
Exhibit No. | Description | |
3.1
|
Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Companys Form 10-Q (File No. 001-33549), filed on August 14, 2007 and herein incorporated by reference). | |
3.2
|
Second Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Companys Form 8-K (File No. 001-33549), filed on August 16, 2010 and herein incorporated by reference). | |
3.3
|
Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Companys Form 8-K (File No. 001-33549), filed on September 3, 2010 and herein incorporated by reference). | |
3.4
|
Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.2 to the Companys Form 10-Q (File No. 001-33549), filed on August 14, 2007 and herein incorporated by reference). | |
3.5
|
Second Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.2 to the Companys Form 8-K (File No. 001-33549), filed on June 25, 2010 and herein incorporated by reference). |
31
Exhibit No. | Description | |
3.6
|
Third Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.1 to the Companys Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference). | |
4.1
|
Form of Certificate for Common Stock (previously filed as Exhibit 4.1 to the Companys Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference). | |
10.1
|
Warrant to Purchase Common Stock, dated as of September 30, 2008 (previously filed as Exhibit 10.2 to the Companys Form 8-K (File No. 001-33549), filed on October 2, 2008 and herein incorporated by reference). | |
10.2
|
Multifamily Note, dated as of June 26, 2008 (previously filed as Exhibit 10.2 to the Companys Form 8-K (File No. 001-33549), filed on July 2, 2008 and herein incorporated by reference). | |
10.3
|
Exceptions to Non-Recourse Guaranty, dated as of June 26, 2008 (previously filed as Exhibit 10.3 to the Companys Form 8-K (File No. 001-33549), filed on July 2, 2008 and herein incorporated by reference). | |
10.4
|
Master Lease Agreement, dated as of June 26, 2008 (previously filed as Exhibit 10.4 to the Companys Form 8-K (File No. 001-33549), filed on July 2, 2008 and herein incorporated by reference). | |
10.5
|
Purchase and Sale Contract, dated as of May 14, 2008 (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on May 20, 2008 and herein incorporated by reference). | |
10.6
|
Performance Share Award Agreement under the 2007 Care Investment Trust Inc. Equity Plan, dated as of May 12, 2008 (previously filed as Exhibit 10.4 to the Companys Form 10-Q (File No. 001-33549), filed on November 14, 2008 and herein incorporated by reference). | |
10.7
|
Restricted Stock Unit Agreement Under the 2007 Care Investment Trust Inc. Equity Plan, dated as of April 8, 2008 (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on April 14, 2008 and herein incorporated by reference). | |
10.8
|
Form of Restricted Stock Unit Agreement Under the 2007 Care Investment Trust Inc. Equity Plan (previously filed as Exhibit 10.2 to the Companys Form 8-K (File No. 001-33549), filed on April 14, 2008 and herein incorporated by reference). | |
10.9
|
Contribution and Purchase Agreement, dated as of December 31, 2007 (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on January 4, 2008 and herein incorporated by reference). | |
10.10
|
Care Investment Trust Inc. Equity Plan (previously filed as Exhibit 10.4 to the Companys Form 10-Q (File No. 001-33549), filed on August 14, 2007 and herein incorporated by reference). | |
10.11
|
Care Investment Trust Inc. Manager Equity Plan (previously filed as Exhibit 10.5 to the Companys Form 10-Q (File No. 001-33549), filed on August 14, 2007 and herein incorporated by reference). | |
10.12
|
Form of Restricted Stock Agreement under the 2007 Care Investment Trust Inc. Equity Plan (previously filed as Exhibit 10.5 to the Companys Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference). | |
10.13
|
Form of Restricted Stock Agreement under the 2007 Care Investment Trust Inc. Equity Plan (previously filed as Exhibit 10.6 to the Companys Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference). | |
10.14
|
Form of Restricted Stock Agreement under the 2007 Care Investment Trust Inc. Manager Equity Plan (previously filed as Exhibit 10.8 to the Companys Form S-11, as amended (File No. 333- |
32
Exhibit No. | Description | |
141634), filed on June 7, 2007 and herein incorporated by reference). | ||
10.15
|
Form of Indemnification Agreement (previously filed as Exhibit 10.9 to the Companys Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference). | |
10.16
|
Loan Purchase Agreement with CapitalSource Bank dated September 15, 2009 (previously filed as Exhibit 10.1 to the Companys Form 10-Q (File No. 001-33549), filed on November 9, 2009 and herein incorporated by reference). | |
10.17
|
Loan Purchase and Sale Agreement dated as of October 6, 2009, by and between Care Investment Trust Inc. and General Electric Capital Corporation (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on November 18, 2009 and herein incorporated by reference). | |
10.18
|
Form of Performance Share Award Granted to the Companys Chairman of the Board and Executive Officers dated December 10, 2009 and amended and restated on February 23, 2010 (previously filed as Exhibit 10.30 to the Companys Form 10-K (File No. 001-33549), filed on March 16, 2010 and herein incorporated by reference). | |
10.19
|
Purchase and Sale Agreement by and between Care Investment Trust Inc. and Tiptree Financial Partners, L.P., dated as of March 16, 2010 (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on March 16, 2010 and herein incorporated by reference). | |
10.20
|
First Amendment to Purchase and Sale Agreement by and between Care Investment Trust Inc. and Tiptree Financial Partners, L.P., dated as of July 6, 2010 (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on July 7, 2010 and herein incorporated by reference). | |
10.21
|
Registration Rights Agreement by and between Care Investment Trust Inc. and Tiptree Financial Partners, L.P., dated as of March 16, 2010 (previously filed as Exhibit 10.2 to the Companys Form 8-K (File No. 001-33549), filed on March 16, 2010 and herein incorporated by reference). | |
10.22
|
Termination, Cooperation and Confidentiality Agreement (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference). | |
10.23
|
Employment Agreement by and between Salvatore (Torey) Riso, Jr. and Care Investment Trust Inc. (previously filed as Exhibit 10.2 to the Companys Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference). | |
10.24
|
Employment Agreement by and between Steven M. Sherwyn and Care Investment Trust Inc. (previously filed as Exhibit 10.3 to the Companys Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference). | |
10.25
|
Omnibus Agreement by and between Care Investment Trust Inc. and several of its subsidiaries and affiliated parties and Jean-Claude Saada, Cambridge Holdings, Inc. and several affiliated partnerships and other affiliated parties (previously filed as Exhibit 10.1 to the Companys Form 8-K (File No. 001-33549), filed on April 19, 2011 and herein incorporated by reference). | |
21.1
|
Subsidiaries of the Company (previously filed as Exhibit 21.1 to the Companys Form 10-K (File No. 001-33549), filed on March 31, 2011 and herein incorporated by reference). | |
23.1
|
Consent of Deloitte & Touche, dated as of March 16, 2011 (previously filed as Exhibit 23.1 to the Companys Form 10-K (File No. 001-33549), filed on March 31, 2011 and herein incorporated by reference). | |
31.1
|
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* | |
31.2
|
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
33
Exhibit No. | Description | |
32.1
|
Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | |
32.2
|
Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** |
* | Filed herewith | |
** | Furnished herewith |
34
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Care Investment Trust Inc. |
||||
By: | /s/ Steven M. Sherwyn | |||
Steven M. Sherwyn | ||||
Chief Financial Officer and Treasurer | ||||
April 28, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been duly
signed below by the following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature | Title | Date | ||
/s/ Salvatore (Torey) V. Riso, Jr.
|
President, Chief Executive | April 28, 2011 | ||
Salvatore (Torey) V. Riso, Jr.
|
Officer and Director | |||
(Principal Executive Officer) | ||||
/s/ Steven M. Sherwyn
|
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
April 28, 2011 | ||
/s/ Michael G. Barnes
|
Chairman of the Board of Directors | April 28, 2011 | ||
/s/ Geoffrey N. Kauffman
|
Vice Chairman | April 28, 2011 | ||
/s/ Flint D. Besecker
|
Director | April 28, 2011 | ||
/s/ William A. Houlihan
|
Director | April 28, 2011 | ||
/s/ J. Rainer Twiford
|
Director | April 28, 2011 | ||
/s/ Jonathan Ilany
|
Director | April 28, 2011 |
35
Appendix A
DEFINITION OF INDEPENDENT DIRECTOR
For purposes of this definition, immediate family member includes a persons spouse,
parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and
sisters-in-law, and anyone (other than domestic employees) who shares such persons home.
A director shall be an independent director if such director:
1. is affirmatively determined by the Board, after consideration of all relevant facts and
circumstances, as having no material relationship with Care (either directly or as a partner,
shareholder or officer of an organization that has a relationship with Care);
2. is not currently, and has not at any time during the last three years been, an employee of Care
or any of its affiliates;
3. does not have an immediate family member who is, or has been in the last three years, an
executive officer (excluding any interim executive officer position) of Care or any of its
affiliates;
4. has not received direct compensation during any twelve-month period within the last three years
of more than $120,000 from Care or any of its affiliates, other than director and committee fees,
fees as an interim executive officer and pension or other forms of deferred compensation for prior
service (provided such compensation is not contingent in any way on continued service);
5. has no immediate family members who have received direct compensation during any twelve-month
period within the last three years of more than $120,000 from Care or any of its affiliates as an
executive officer;
6. is not a partner of or employed by, and no member of such directors immediate family is a
partner of, the internal or external auditor of Care or any of its consolidated subsidiaries, and
no such directors immediate family is an employee of the internal or external auditor of Care and
personally works on Cares audit, nor was any member of such directors immediate family within the
last three years a partner of the internal or external auditor of Care and personally worked on
Cares audit;
7. is not employed and has not, and no immediate family member of such director is employed or has,
within the prior three years been employed as an executive officer of another company where any of
Cares present executives serves on that companys compensation committee; and
8. is not an executive officer or an employee, and no immediate family member of such director is
an executive officer, of another company (A) that has made payments to Care in an amount which, in
any of the last three fiscal years, accounts for at least 2% or $1 million, whichever is greater,
of Cares consolidated gross revenues, or (B) that has received payments from Care in an amount
which, in any of the last three fiscal years, accounts for at least 2% or $1 million, whichever is
greater, of such other companys consolidated gross revenues; provided, however that if Cares
securities become listed for trading on any Exchange, the foregoing definition of independent
director shall be replaced with the definition of independent director contained in such
Exchanges rules applicable to companies listed for trading on such Exchange.
1 | For purposes of determining independence, all references to Care shall mean Care Investment Trust Inc. and each of its consolidated subsidiaries, if any. |
A - 1