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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement
(Pursuant to Section 14(a) of the Securities Exchange Act of 1934)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CONTINUCARE CORPORATION
(Name of Registrant as Specified in Its Charter)
CONTINUCARE CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the Appropriate Box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Parties:
(4) Date Filed:
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CONTINUCARE CORPORATION
80 S.W. 8th Street, Suite 2350, Miami, Florida 33130
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held On March 5, 2002
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To the Shareholders of Continucare Corporation:
NOTICE IS HEREBY GIVEN that the 2001 Annual Meeting of Shareholders of
Continucare Corporation, a Florida corporation, will be held at 10:00 a.m.,
local time, on Tuesday, March 5, 2002, at the Hyatt Regency Miami, 400 S.E. 2nd
Avenue, Miami, Florida 33131 for the following purposes:
(1) The election of five members to our Board of Directors to hold
office until Continucare's 2002 Annual Meeting of Shareholders
or until their successors are duly elected and qualified;
(2) The transaction of such other business as may properly come
before the annual meeting and any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on January 17,
2002 as the record date for determining those shareholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournment(s) or postponement(s)
thereof.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors
Spencer J. Angel
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHIEF OPERATING OFFICER
Miami, Florida
February 13, 2002
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
2001 ANNUAL MEETING OF SHAREHOLDERS
OF
CONTINUCARE CORPORATION
--------------------------
PROXY STATEMENT
--------------------------
This proxy statement is furnished in connection with the solicitation
by the board of directors of Continucare Corporation, a Florida corporation, of
proxies from the holders of our common stock, par value $.0001 per share, for
use at the 2001 Annual Meeting of Shareholders of Continucare to be held at
10:00 a.m., local time, on Tuesday, March 5, 2002, at the Hyatt Regency, Miami,
400 S.E. 2nd Avenue, Miami, Florida 33131, or at any adjournments or
postponements thereof, pursuant to the foregoing notice of annual meeting of
shareholders. This proxy statement and the enclosed form of proxy are first
being sent to holders of our common stock on or about February 13, 2002.
Shareholders should review the information provided herein in
conjunction with the Continucare's 2001 annual report to shareholders, which
accompanies this proxy statement. Continucare's principal executive offices are
located at 80 S.W. 8th Street, Suite 2350, Miami, Florida 33130 and its
telephone number is (305) 350-7515.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of our board of directors.
The giving of a proxy does not preclude the right to vote in person should any
shareholder giving the proxy so desire. Shareholders have an unconditional right
to revoke their proxy at any time prior to the exercise thereof, either in
person at the annual meeting or by filing with Continucare's Secretary at our
headquarters a written revocation or duly executed proxy bearing a later date;
however, no such revocation will be effective until written notice of the
revocation is received by Continucare at or prior to the annual meeting.
The cost of preparing, assembling and mailing this proxy statement, the
notice of annual meeting of shareholders and the enclosed proxy is to be borne
by Continucare. In addition to the use of mail, our employees may solicit
proxies personally, by telephone and by facsimile. Our employees will receive no
compensation for soliciting proxies other than their regular salaries.
Continucare may request banks, brokers and other custodians, nominees and
fiduciaries to forward copies of the proxy material to their principals and to
request authority for the execution of proxies. We may reimburse such persons
for their expenses in so doing.
PURPOSES OF THE MEETING
At the annual meeting, our shareholders will consider and vote upon the
following matters:
(1) The election of five members to our board of directors to hold
office until our 2002 Annual Meeting of Shareholders or until
their successors are duly elected and qualified;
(2) The transaction of such other business as may properly come
before the annual meeting, including any adjournments or
postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted for the election of the nominees for director named below and in
favor of the other matters presented. In the event a shareholder specifies a
different choice by means of the enclosed proxy, his shares will be voted in
accordance with the specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The board of directors has set the close of business on January 17,
2002 as the record date for determining shareholders of Continucare entitled to
notice of and to vote at the annual meeting. As of the record date, there were
39,459,601 shares of common stock outstanding. Only the holders of issued and
outstanding shares of common stock are entitled to vote at the annual meeting.
Shareholders do not have the right to cumulate their votes, and are entitled to
one vote for each share held. Shareholders do not have rights of appraisal or
similar rights of dissenters under the Florida Business Corporation Act, with
respect to any of the proposals set forth in this proxy statement.
The attendance, in person or by proxy, of the holders of a majority of
the outstanding shares of common stock entitled to vote at the annual meeting is
necessary to constitute a quorum with respect to all matters presented.
Directors will be elected by a plurality of the votes cast by the shares of
common stock represented in person or by proxy at the annual meeting. Any other
matter that may be submitted to a vote of the shareholders will be approved if
the number of shares of common stock voted in favor of the matter exceeds the
number of shares voted in opposition to the matter, (unless such matter is one
for which a greater vote is required by law or by the Company's Articles of
Incorporation or Bylaws). If less than a majority of outstanding shares entitled
to vote are represented at the annual meeting, a majority of the shares so
represented may adjourn the annual meeting to another date, time or place, and
notice need not be given of the new date, time, or place if the new date, time,
or place is announced at the meeting before an adjournment is taken.
Prior to the annual meeting, we will select one or more inspectors of
election for the meeting. Such inspectors shall determine the number of shares
of common stock represented at the meeting, the existence of a quorum and the
validity and effect of proxies, and shall receive, count and tabulate ballots
and votes and determine the results thereof. Abstentions will be considered as
shares present and entitled to vote at the annual meeting and will be counted as
votes cast at the annual meeting, but will not be counted as votes cast for or
against any given matter.
A broker or nominee holding shares registered in its name, or in the
names of its nominee, which are beneficially owned by another person and for
which it has not received instructions as to voting from the beneficial owner,
has the discretion to vote the beneficial owner's shares with respect to the
election of directors. If a matter has been included in the proxy to which a
broker or nominee would not have discretionary voting power under applicable
American Stock Exchange rules, any broker or nominee "non-votes" would not be
considered as shares entitled to vote on the subject matter and therefore would
not be considered by the inspector when counting votes cast on the matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of January 17,
2002 concerning the beneficial ownership of the common stock by (i) each person
known by Continucare to be the beneficial owner of more than 5% of the
outstanding common stock, (ii) each of the directors and director nominees,
(iii) each named executive officer, and (iv) all of our executive officers and
directors as a group. All holders listed below have sole voting power and
investment power over the shares beneficially owned by them, except to the
extent such power may be shared with such person's spouse.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Common Stock(2)
------------------- ----------------------- ---------------
Spencer J. Angel.......................... 1,313,479 (3) 3.3
80 S.W. 8th Street
Miami, FL 33131
Charles M. Fernandez...................... 2,179,167 (4) 5.5
80 S.W. 8th Street
Miami, FL 33131
Dr. Phillip Frost......................... 20,396,550 (5) 50.4
4400 Biscayne Boulevard
Miami, FL 33137
2
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Common Stock(2)
------------------- ----------------------- ---------------
Janet L. Holt............................. 25,000 (6) *
80 S.W. 8th Street
Miami, FL 33131
Robert Cresci............................. 100,000 (6) *
c/o Pecks Management Partners, Ltd.
One Rockefeller Plaza
Suite 900
New York, NY 10020
Patrick Healy............................. 101,000 (6) *
c/o Mayo Health Plan
4168 South Point Parkway
Suite 102
Jacksonville, FL 32216
Richard C. Pfenniger, Jr.................. 5,000 *
c/o Whitman Education Group, Inc.
4400 Biscayne Boulevard
Miami, FL 33137
Strategic Investment Partners, Ltd........ 2,250,000 (7) 5.7
Kaya Flamboyan 9
Willemstad, Curacao
Netherlands Antilles
Pecks Management Partners Ltd............. 8,511,585(8) 19.9
One Rockefeller Plaza
Suite 900
New York, NY 10020
All directors and executive officers
as a group (6 persons)................. 24,115,196 (9) 58.3
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* Less than one percent.
(1) For purposes of this table, beneficial ownership is computed pursuant
to Rule 13d-3 under the Exchange Act; the inclusion of shares as
beneficially owned should not be construed as an admission that such
shares are beneficially owned for purposes of the Exchange Act. Under
the rules of the Securities and Exchange Commission, a person is deemed
to be a "beneficial owner" of a security he or she has or shares the
power to vote or direct the voting of such security or the power to
dispose of or direct the disposition of such security. Accordingly,
more than one person may be deemed to be a beneficial owner of the same
security.
(2) Based on 39,459,601 shares outstanding as of September 17, 2001.
(3) Includes (i) 800 shares held by Arkangel, Inc., an entity controlled by
Mr. Angel; (ii) 850,000 shares held by Harter Financial, Inc., an
entity controlled by Mr. Angel; (iii) 150,000 shares held directly by
Mr. Angel; (iv) 266,666 shares of common stock underlying options that
are currently exercisable, and (v) 46,013 shares of common stock
issuable upon conversion of a convertible promissory note.
(4) Includes (i) 1,816,667 shares of Common Stock are owned of record by
the Fernandez Family Limited Partnership, (ii) 27,500 shares held
directly by Mr. Fernandez and (iii) 335,000 shares of Common Stock
underlying options granted that are currently exercisable.
(5) Includes (i) 18,831,088 shares owed beneficially through Frost Nevada
Limited Partnership; (ii) 568,300 shares owned directly by Dr. Frost;
(iii) 797,162 shares of common stock issuable upon conversion of a
convertible promissory note and (iv) 200,000 shares of common stock
underlying options granted that are currently exercisable. See "Certain
Transactions".
(6) Represents shares of common stock underlying options that are currently
exercisable.
(7) Based on the most recent Schedule 13D/A, the Strategic Investment
Partners, Ltd. is deemed to have sole voting power and each of Quasar
Strategic Partners LDC, Quantum Industrial Partners LLC, QIH Management
Investors, L.P. and QIH Management, Inc., Soros Fund Management, LLC
and Mr. George Soros are deemed to have shared power.
(8) Includes 3,407,927 shares of Common Stock that may be issued upon the
conversion of Convertible Subordinated Notes.
(9) Includes 1,027,666 shares of Common Stock underlying options that are
currently exercisable and 843,175 shares of Common Stock that are
issuable upon conversion of promissory notes.
3
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Five persons are nominated for election as directors to serve until the
next annual meeting of shareholders and until each director's successor is duly
elected and qualified. Although we anticipate that all of the nominees will be
able to serve, if any nominee is unable or unwilling to serve at the time of the
annual meeting, proxies solicited hereunder will be voted in favor of the
remaining nominees, if any, and for such other persons as may be designated by
the board of directors, unless directed by a proxy to do otherwise.
Mr. Spencer J. Angel, Dr. Phillip Frost, Mr. Robert J. Cresci, Mr.
Patrick M. Healy and Mr. Richard C. Pfenniger, Jr. are the five persons
nominated as directors. With the exception of Mr. Pfenniger, each of the
director nominees is a current member of the board of directors. Biographical
information for the director nominees is set forth below.
MANAGEMENT
The executive officers, directors and director nominees of Continucare
are as follows:
Name Age Position
- ---- --- --------
Spencer J. Angel*............. 35 President, Chief Executive Officer, Chief Operating Officer
and Director
Janet L. Holt................. 55 Chief Financial Officer
Charles M. Fernandez.......... 39 Chairman of the Board
Phillip Frost, M.D.*.......... 65 Vice Chairman of the Board
Robert Cresci*................ 58 Director
Patrick Healy*................ 43 Director
Richard C. Pfenniger, Jr...... 46 Director Nominee
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* Director nominees.
SPENCER J. ANGEL has served as our President and Chief Executive
Officer since November 1999. From July 12, 1999 until his appointment as our
President and Chief Executive Officer, he served as our Executive Vice President
and Chief Operating Officer. Mr. Angel has served as a member of our board of
directors since September 30, 1999. Mr. Angel has served, since 1996, as
director and president of Harter Financial, Inc., a diversified financial
consulting firm. See "Certain Relationships and Related Transactions." In 1999,
Mr. Angel served as president and chief executive officer of Medical Laser
Technologies, Inc., a company that produces digital x-ray picture archiving and
communications systems for cardiac catheterization labs. He was the secretary,
treasurer and director of Autoparts Warehouse, Inc., an auto parts retail and
service company, from September 1997 to January 1999. From December 1994 through
August 1996 Mr. Angel was president of 5 East 41 Check Cashing Corp., a company
engaged in the payroll service and armored car business. From November 1991 to
1994 Mr. Angel was an associate attorney with Platzer, Fineberg & Swergold, a
law firm specializing in corporate financial reorganizations.
JANET L. HOLT was appointed as our Chief Financial Officer in January
2000. From July 1999 when she joined the Company until her appointment as our
Chief Financial Officer, Ms. Holt served as the Vice President of Finance -
Managed Care Division. Ms. Holt served as an audit Senior Manager at Ernst &
Young, LLP from November 1997 until joining Continucare. From June 1995 to
November 1997, Ms. Holt served as the Internal Auditor for InPhyNet Medical
Management, Inc., and she served as an audit manager with Deloitte & Touche, LLP
from 1992 to June 1995.
CHARLES M. FERNANDEZ, our Chairman of the Board, is the president and
chief executive officer and a director of Big City Radio, Inc. a company that
owns and operates a network of radio stations, since November 1999. Mr.
Fernandez co-founded Continucare in February 1996 and served as our Chairman of
the Board, President and Chief Executive Officer from our inception until
November 1, 1999, at which time he resigned as the President and Chief Executive
Officer. From July 1999 until November 1999, Mr. Fernandez served as the
chairman of
4
Hispanic Internet Holdings, Inc., a Spanish online service provider that was
acquired by Big City Radio in 1999. He has also served as the Vice-Chairman of
Healthcare2Net Solutions, an internet solutions company, since March 30, 2000.
Mr. Fernandez has also been a director of IVAX Corporation, a Florida
corporation ("IVAX") since June 1998.
PHILLIP FROST, M.D. has served as our Vice Chairman since September
1996. Dr. Frost has served, since 1987, as chairman of the board and chief
executive officer of IVAX, a pharmaceutical manufacturer. He served as IVAX's
president from July 1991 until January 1995. He was the Chairman of the
Department of Dermatology at Mt. Sinai Medical Center of Greater Miami, Miami
Beach, Florida from 1972 to 1990. Dr. Frost was Chairman of the Board of
Directors of Key Pharmaceutical, Inc. from 1972 to 1986. He is chairman of the
board of directors of Whitman Education Group, which is engaged in proprietary
education, a director of Northrup Grumman which is in the aerospace industry, a
director of IVAX Diagnostics, Inc., and a director of Ladenburg Thalmann
Financial Services, Inc. He is Chairman of the Board of Trustees of the
University of Miami and a member of the Board of Governors of the American Stock
Exchange.
ROBERT J. CRESCI has served as one of our directors since February
2000. He has been a Managing Director of Pecks Management Partners Ltd., an
investment management firm, since 1990. Mr. Cresci currently serves on the
boards of Sepracor, Inc., Aviva Petroleum Ltd., Film Roman, Inc., Castle Dental
Centers, Inc., Candlewood Hotel Co., SeraCare Inc., JFax.com, Inc., E-Stamp
Corporation and several private companies.
PATRICK M. HEALY has served as one of our directors since February
2000. He has served as president and chief administrative officer and as a
member of the board of directors for Mayo Health Plan, Inc. since its inception
in June 1996 until December 2001. Previously, Mr. Healy was president and chief
executive officer and member of the board of directors for Cleveland Clinic
Florida Health Plan from its inception in 1992 through 1996. Mr. Healy also
served as a regional director of operations-southeast region and executive
director Florida/Caribbean for The Travelers Insurance Company from 1990 through
1992.
RICHARD C. PFENNIGER, JR. has been the Chief Executive Officer and Vice
Chairman of Whitman Education Group, Inc. since 1997 and a director of Whitman
Education Group, Inc. since 1992. Mr. Pfenniger was Chief Operating Officer of
IVAX Corporation from 1994 to 1997. He served as Senior Vice President--Legal
Affairs and General Counsel of IVAX from 1989 to 1994, and as Secretary from
1990 to 1994.
Officers serve at the pleasure of the board of directors, subject to
the terms of any employment agreements. See "-Employment Agreements."
DIRECTOR COMPENSATION
Other than the chairman of the board of directors, our directors do not
currently receive any cash compensation for service on the board of directors
but may be reimbursed for certain expenses in connection with attendance at
board of director meetings or other meetings on our behalf. All of our directors
are eligible to receive options under our Stock Option Plan. See also "Certain
Relationships and Related Transactions."
Pursuant to an Agreement that we terminated in September 2001, Mr.
Fernandez received $50,000 during the fiscal year ended June 30, 2001 as
chairman of the board of directors.
COMMITTEES AND MEETINGS
During the fiscal year ended June 30, 2001, the board of directors held
seven meetings and took certain actions by unanimous written consent. With the
exception of Mr. Fernandez and Dr. Frost, each director attended at least 75% of
the aggregate of (i) the number of such meetings, and (ii) the number of
meetings of committees of the board of directors held during fiscal year 2001.
The compensation committee's current members are Messrs. Cresci
(Chairman), Healy and Fernandez. The compensation committee held one meeting
during fiscal year 2001. The primary function of the compensation committee is
to review and approve our compensation policies and practices, propose
compensation levels for directors and officers, and propose changes in our
benefit plans.
The audit committee's current members are Mr. Cresci (Chairman), Dr.
Frost and Mr. Healy.
5
In accordance with the rules of the American Stock Exchange, Messrs.
Cresci and Healy are independent directors. Dr. Frost is not an independent
director for the fiscal year ended June 30, 2001. In a private transaction with
certain noteholders, effective June 30, 2001, Frost Nevada Limited Partnership,
an entity controlled by Dr. Phillip Frost, purchased Convertible Subordinated
Notes due 2002 (the "Notes") in the principal amount of $6,219,511 (the
"Purchased Debt") and 9,640,244 shares of our common stock (the "Purchased
Shares"). Frost Nevada immediately exchanged the Purchased Debt for (i)
6,219,511 shares of our common stock and (ii) a convertible promissory note (the
"New Note") in the principal amount of $912,195, with an October 31, 2005
maturity date and interest at 7% due semi-annually. At such time Dr. Frost was
deemed to beneficially own 55.5% of our outstanding common stock, assuming
conversion of the New Note. Effective July 31, 2001, Frost Nevada sold
approximately 13% of the Purchased Shares, 13% of the shares of common stock
issued upon the conversion of the Purchased Debt and transferred 13% of the New
Note in a private transaction to a group of six investors. As a result of such
transactions, Dr. Frost and his affiliated entities beneficially own
approximately 50.4% of our common stock, assuming conversion of the New Note.
The Board believes it is in the best interest of Continucare and its
shareholders for Dr. Frost to serve as a member of the audit committee based on
his knowledge of Continucare's operations, its financial history and the
healthcare industry. Dr. Frost has been the vice chairman of Continucare since
September 1996 and a member of the audit committee since February 1999. The
audit committee held four meetings during the fiscal year ended June 30, 2001.
The duties and responsibilities of the audit committee include (i) recommending
to the Board the appointment of Continucare's auditors, (ii) reviewing the plan
and scope of audits, (iii) reviewing our significant accounting policies and
internal controls and (iv) having general responsibility for all audit related
matters. The board of directors adopted a written charter for the audit
committee, a copy of which was filed with the proxy statement for the 2000
annual meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Charles Fernandez, a member of the compensation committee since
March 2000, served as our president and chief executive officer until November
1999.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued by us to or on behalf of (i) our chief executive
officer, and (ii) the other executive officer who was serving as an executive
officer at the end of the last fiscal year, whose total annual salary and bonus,
determined as of the end of the fiscal year ended June 30, 2001, exceeded
$100,000 (hereinafter referred to as the "named executive officers").
SUMMARY COMPENSATION TABLE
Long-term
Annual Compensation Compensation
------------------------------------------- ------------------
Other
Annual
Name and Fiscal Compen- No. of Securities All Other
Principal Position Year Salary($) Bonus($) sation Underlying Options Compensation
- ------------------ ------ --------- -------- ------ ------------------ ------------
Spencer J. Angel,................ 2001 268,307 0 (1) 600,000(2) 0
President and Chief Executive 2000 207,867 0 (1) 0 0
Officer
Janet L. Holt,................... 2001 103,846 0 (1) 75,000(3) 0
Chief Financial Officer 2000 83,077 20,000 (1) 0 0
- -------------------
(1) The total perquisites and other personal benefits provided is less than
10% of the total annual salary and bonus to such officer.
(2) 100,000 stock options valued at approximately $68,750 (based on the
closing market price on the date of grant) were awarded on July 20,
2000. An additional 500,000 stock options were also awarded on July 20,
2000 valued at approximately $343,750 (based on the closing market
price on the date of grant) and vest ratably over three years.
(3) 75,000 stock options were awarded on July 20, 2000 valued at
approximately $51,600 (based on the closing market price on the date of
grant) and vest ratably over three years
6
OPTION GRANTS DURING FISCAL 2001
The following table sets forth certain information concerning grants of
stock options made during Fiscal 2001 to each of the named executive officers.
We did not grant any stock appreciation rights granted in Fiscal 2001.
INDIVIDUAL OPTION GRANTS IN FISCAL 2001
Potential Realizable Value At
Shares of Assumed Annual Rates of Stock Price
Common Stock % of Total Appreciation for Option Term (1)
Underlying Granted to Option Expiration -----------------------------------
Name Options Employees Price ($) Date 5% 10%
---- ------------ --------- --------- ---------- -- ---
Spencer J. Angel,
President and Chief
Executive Officer 600,000 23.0%(2) $.69 7/20/10 260,362 659,809
Janet L. Holt,
Chief Financial
Officer 75,000 2.9%(2) $.69 7/20/10 32,545 82,476
- ------------------
(1) The dollar amounts set forth in these columns are the result of
calculations at the five percent and ten percent rates set by the
Securities and Exchange Commission, and therefore are not intended to
forecast possible future appreciation, if any, of the market price of
the Common Stock.
(2) Based upon 2,611,000 total options granted to employees during Fiscal
2001
OPTION EXERCISES IN 2001 AND YEAR END OPTION VALUES
The following table sets forth information with respect to (i) the
number of unexercised options held by the named executive officers as of June
30, 2001, and (ii) the value as of June 30, 2001 of unexercised in-the-money
options. No options were exercised by any of the named executive officers in
Fiscal 2001.
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at June 30, 2001 at June 30, 2001 (1)
----------------------------------- -----------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Spencer J. Angel 100,000 500,000 0 0
Janet L. Holt 0 75,000 0 0
- ------------------
(1) Market value of shares covered by in-the-money options on June 30,
2001, less option exercise price. Options are in-the-money if the
market value of the shares covered thereby is greater than the option
exercise price.
EMPLOYMENT AGREEMENTS
Mr. Angel's employment agreement was for a one-year period commencing
July 12, 1999, with additional one-year automatic renewals and provides for an
annual base salary of $250,000. Additionally, he is eligible to receive a bonus
equal to 7% of our earnings before interest, taxes, depreciation and
amortization in excess of $3 million for the fiscal year. The agreement may be
terminated by either party with or without cause upon 60 days notice prior to an
anniversary date of the agreement. Pursuant to the terms of his agreement, Mr.
Angel is prohibited from competing with Continucare for a one year period
following termination of his employment with Continucare. In the event that Mr.
Angel is terminated without cause, Mr. Angel is entitled to his base salary for
the period of one year and any unpaid accrued bonus.
7
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission, the
compensation committee of the board of directors is required to provide a report
explaining the rationale and considerations that led to fundamental compensation
decisions affecting Continucare's executive officers during the past fiscal
year.
GENERAL. The compensation committee is comprised of non-employee
directors and is responsible for setting and administering policies that govern
annual compensation of Continucare's executive officers, as well as its stock
option plans. The compensation committee's general philosophy with respect to
the compensation of the executive officers is to offer competitive compensation
programs designed to attract key executives to Continucare and to recognize an
individual's contribution and personal performance. Such compensation programs
include a base salary as well as stock option plans designed to provide
long-term incentives. In addition, the compensation committee may recommend the
grant of discretionary bonuses to the executive officers. The committee did not
establish performance targets or adopt any bonus plan for fiscal 2001.
In establishing Continucare's executive compensation program, the
compensation committee takes into account current market data and compensation
trends for comparable companies, and gauges achievement of corporate and
individual objectives. In setting the compensation for Mr. Angel, Continucare's
President, Chief Executive Officer and Chief Operating Officer, the compensation
committee took into account his responsibilities and amounts paid to other
senior executives in the industry with comparable qualifications and experience.
Performance bonuses and stock options grants to executive officers in prior
fiscal years were structured to reinforce the achievement of both short and long
term corporate objectives in addition to fostering a long-term perspective
aligned with that of its shareholders.
Robert Cresci, Chairman
Patrick Healy
Charles Fernandez
AUDIT COMMITTEE REPORT
The audit committee of the Board has reviewed and discussed with
management Continucare's audited financial statements for the fiscal year ended
June 30, 2001. Additionally, it has received and reviewed the written
disclosures and the letter from Ernst & Young LLP, our independent auditors for
the fiscal year ending June 30, 2001, required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committee). The audit
committee has discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 of the Auditing Standards
Board of the American Institute of Certified Public Accountants. Based on these
discussions with Ernst & Young LLP, the audit committee members recommended
unanimously to the Board that the audited financial statements be included in
our Annual Report on Form 10-K for the fiscal year ended June 30, 2001.
Robert Cresci, Chairman
Patrick Healy
Dr. Phillip Frost
8
PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total
shareholder return on Continucare's common stock against the cumulative total
return of the AMEX Market Value Index and the NASDAQ Health Services Index for
the period of September 11, 1996 (the date Continucare listed its common stock
on the American Stock Exchange) to June 30, 2001.
[CHART]
Cumulative Total Return
-----------------------------------------------------------------------
9/11/96 6/97 6/98 6/99 6/00 6/01
------- ---- ---- ---- ---- ----
Continucare Corporation.......... 100.00 65.73 55.24 6.99 7.70 3.36
AMEX Market Value................ 100.00 113.08 141.85 159.89 188.32 186.70
Nasdaq Health Services........... 100.00 97.85 95.33 89.71 69.19 98.82
CERTAIN TRANSACTIONS
In a private transaction with certain noteholders, effective June 30,
2001, Frost Nevada Limited Partnership ("Frost Nevada"), an entity controlled by
Dr. Phillip Frost, Vice Chairman of our board of directors, purchased
Convertible Subordinated Notes due 2002 (the "Notes") in the principal amount of
$6,219,511 (the "Purchased Debt") and 9,640,244 shares of our common stock (the
"Purchased Shares"). Frost Nevada immediately exchanged the Purchased Debt for
(i) 6,219,511 shares of our common stock and (ii) a convertible promissory note
(the "New Note") in the principal amount of $912,195, with an October 31, 2005
maturity date and interest at 7% due semi-annually. At such time Dr. Frost was
deemed to beneficially own 55.5% of our outstanding common stock, assuming
conversion of the New Note.
Effective July 31, 2001, Frost Nevada sold approximately 13% of the
Purchased Shares, 13% of the shares of common stock issued upon the conversion
of the Purchased Debt and transferred 13% of the New Note in a private
transaction to a group of six investors. Spencer J. Angel, our President and
CEO, and an entity controlled by Mr. Angel comprise 40% of this investor group.
Mr. Fernandez has received fees as chairman of our board of directors.
See "Director Compensation".
9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
Continucare's directors and executive officers and persons who own more than ten
percent of Continucare's outstanding common stock, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of common stock. Such persons are required by SEC regulation to
furnish us with copies of all such reports they file.
To Continucare's knowledge, based solely on a review of the copies of
such reports furnished to Continucare and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners have been
satisfied.
10
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Continucare's independent public accountants for the fiscal years ended
June 30, 2001 were, and for the fiscal year 2002 will be the firm of Ernst &
Young LLP. It is expected that representatives of Ernst & Young LLP will (i)
attend the annual meeting, (ii) have an opportunity to make a statement if they
desire to do so, and (iii) be available to respond to appropriate questions.
AUDIT FEES
The aggregate fees billed by Ernst & Young LLP for the audit of the
Continucare's annual financial statements for the fiscal year ended June 30,
2001 and for its reviews of the financial statements included in Continucare's
Form 10-Qs for the fiscal year ended June 30, 2001, were approximately $152,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Continucare was not billed by Ernst & Young LLP for financial
information systems design and implementation for the fiscal year ended June 30,
2001.
OTHER FEES
The aggregate of all other fees billed to Continucare by Ernst & Young
LLP were approximately $51,000 for the fiscal year ended June 30, 2001. The
audit committee has considered and determined that the fees paid to Ernst &
Young LLP for other audit-related services is compatible with Ernst & Young
LLP's independence.
OTHER BUSINESS
As of the date of this proxy statement, the board of directors knows of
no other business to be presented at Continucare's 2001 annual meeting of
shareholders. If any other business should properly come before Continucare's
2001 annual meeting of shareholders, the persons named in the accompanying proxy
will vote thereon as in their discretion they may deem appropriate, unless they
are directed by a proxy to do otherwise.
SHAREHOLDER PROPOSALS
Shareholders interested in presenting a proposal for consideration at
our 2002 annual meeting of shareholders may do so by following the procedures
prescribed in Rule 14a-8 promulgated by the Securities and Exchange Act of 1934.
To be eligible for inclusion in our proxy statement and form of proxy relating
to the meeting, shareholder proposals must be received by our Corporate
Secretary no later than October 16, 2002. Any shareholder proposal submitted
other than for inclusion in our proxy materials for that meeting must be
delivered to us no later than December 30, 2002, or such proposal will be
considered untimely. If a shareholder proposal is received after December 30,
2002, we may vote in our discretion as to the proposal all of the shares for
which we have received proxies for the 2002 annual meeting of shareholders.
By Order of the board of directors,
Spencer J. Angel
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND CHIEF OPERATING OFFICER
Miami, Florida
February 13, 2002
11
CONTINUCARE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF
OF THE COMPANY'S BOARD OF DIRECTORS
COMMON STOCK
The undersigned, a holder of common stock of Continucare Corporation, a Florida
corporation, hereby appoints Spencer J. Angel and Janet Holt, and each of them,
acting alone, as proxies for the undersigned, each with full power of
substitution, and hereby authorizes them to represent and to vote, as designated
on the reverse side, all of the shares of stock of the Company held of record by
the undersigned at the close of business on January 17, 2002 at the Annual
Meeting of Shareholders of the Company, to be held on Tuesday, March 5, 2002, at
10:00 a.m., local time, at the Hyatt Regency Miami, 400 S.E. 2nd Avenue, Miami,
Florida 33131, and at any adjournments or postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND THE
OTHER PROPOSALS SET FORTH.
(1) ELECTION OF DIRECTORS SPENCER J. ANGEL, DR. PHILLIP FROST, ROBERT J.
CRESCI, PATRICK M. HEALY AND RICHARD C. PFENNIGER, JR., as directors.
[ ] VOTE FOR all nominees listed above, except as marked to the
contrary below.
[ ] VOTE WITHHELD from all nominees listed above.
[ ] VOTE FOR all nominees listed above, except vote withheld from
the following nominees (if any): ______________________________.
(2) Upon such other matters as may properly come before the Annual Meeting
and any adjournments thereof. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before
the Annual Meeting, and any adjournments or postponements thereof.
(see reverse side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED `FOR' ALL OF THE PROPOSALS.
The undersigned hereby acknowledges receipt of (1) the Notice of Annual Meeting
for the 2001 Annual Meeting, (2) the proxy statement and (3) the Company's 2001
Annual Report to Shareholders.
Dated _________________________ , 2002
--------------------------------------
(Signature)
--------------------------------------
(Signature if held jointly)
IMPORTANT: Please sign exactly as your name appears and mail it promptly even
though you now plan to attend the meeting. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENVELOPE
PROVIDED.
NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.