<PAGE>
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 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
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<PAGE>
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Core
Technologies (Pennsylvania), Inc. (the "Company") will be held at the offices of
Maris Equipment Company, Inc. at 110 Summit Drive, Exton, PA 19341 on May 2,
1997 at 9:00 a.m., local time, for the following purposes:
1. To elect four directors;
2. To amend the Company's 1993 Stock Option Plan; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has established the close of business on March
27, 1997 as the record date for the determination of stockholders entitled to
notice of and to vote at the meeting or any adjournments thereof. In order that
the meeting can be held and a maximum number of shares can be voted, whether or
not you plan to be present at the meeting in person, please fill in, date and
sign, and promptly return the enclosed Proxy in the return envelope provided for
your use. No postage is required if mailed in the United States.
By order of the Board of Directors,
GEORGE E. MITCHELL
President and Chief Executive Officer
110 Summit Drive
Exton, PA 19341
April 11, 1997
<PAGE>
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
110 Summit Drive
Exton, PA 19341
-------------
PROXY STATEMENT
The enclosed Proxy is solicited on behalf of the Board of Directors of
Core Technologies (Pennsylvania), Inc. (the "Company") for use at the Annual
Meeting of Stockholders on May 2, 1997 (such meeting and any adjournment or
adjournments thereof are referred to as the "Annual Meeting") for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders and in
this Proxy Statement. This Proxy Statement and the enclosed Proxy are being
mailed to stockholders on or about April 11, 1997.
Voting Securities
Only the holders of shares of common stock, par value $.01 per share
(the "Common Stock"), and Series A Redeemable Convertible Preferred Stock, par
value $.01 per share (the "Series A Shares"), of the Company (cumulatively, the
"Shares") of record at the close of business on March 27, 1997 (the "Record
Date") are entitled to receive notice of, and to vote at, the Annual Meeting. On
that date, there were 8,887,326 shares of Common Stock and 15,000 Series A
Shares outstanding and entitled to be voted at the Annual Meeting. Each share of
Common Stock is entitled to vote for up to four persons as directors and to cast
one vote on each other matter to be considered. Each Series A Share is entitled
to cast one vote for each share of Common Stock into which such Series A Shares
can be converted. At March 27, 1997, each Series A Share was convertible into
100 shares of Common Stock.
The four nominees for the Board of Directors receiving the highest
number of affirmative votes of the Shares present or represented and entitled to
be voted shall be elected as directors.
A majority of outstanding Shares will constitute a quorum for the
transaction of business at the Annual Meeting. Votes withheld from any director,
abstentions and broker non-votes will be counted for purposes of determining the
presence of a quorum for the transaction of business at the Annual Meeting.
Abstentions are counted in tabulations of the votes cast on proposals presented
to stockholders. Broker non-votes are not counted for purposes of determining
whether a proposal has been approved.
1
<PAGE>
Revocability of Proxy
Execution of the enclosed Proxy will not affect a stockholder's right
to attend the Annual Meeting and vote in person. A stockholder, in exercising
his right to vote in person at the Annual Meeting, effectively revokes all
previously executed Proxies. In addition, the Proxy is revocable at any time
prior to the effective exercise thereof by filing notice of revocation with the
Secretary of the Company or by filing a duly executed Proxy bearing a later
date.
Persons Making the Solicitation
The cost of solicitation of Proxies by the Company, including the
actual expenses incurred by brokerage houses, nominees and fiduciaries in
forwarding Proxy materials to beneficial owners, will be borne by the Company.
In addition to solicitation by mail, certain officers and other employees of the
Company may solicit Proxies in person, by mail, or by telephone.
Stockholder Proposals for 1998 Annual Meeting
Stockholders intending to present proposals at the next Annual Meeting
of Stockholders to be held in 1998 must notify the Company of the proposal no
later than December 10, 1997.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of March 1, 1997, the
Company's Common Stock beneficially owned by each person known to the Company to
be the beneficial owner of more than 5% of the outstanding Common Stock, and the
number of shares of Common Stock owned beneficially by each director, by each
named executive officer, and by all executive officers and directors as a group.
In addition to the information regarding the Company's Common Stock listed
below, as of March 1, 1997, there were 15,000 Series A Shares issued and
outstanding. All of such Series A Shares are owned of record by Safeguard
Scientifics (Delaware), Inc., a wholly owned subsidiary of Safeguard
Scientifics, Inc. ("Safeguard"), and consequently are beneficially owned by
Safeguard.
2
<PAGE>
Number of Percent of
Shares Owned(1) Class
--------------- ----------
Safeguard Scientifics (Delaware), Inc. (2).. 3,744,757 36.05%
103 Springer Building
3411 Silverside Road
Wilmington, DE 19803
Philip J. Donnelly ......................... 838,333 9.38%
110 Summit Drive
Exton, PA 19341
George E. Mitchell (3)...................... 1,504,834 16.9%
110 Summit Drive
Exton, PA 19341
Frederick B. Franks, III (4) ............... 892,083 10.00%
110 Summit Drive
Exton, PA 19341
W. Wayne Dunlop (4) ........................ 1,250 *
Anthony A. Nichols (4)...................... 25,938 *
Richard P. Richter (4)...................... 1,350 *
Michael H. Pelosi III(4).................... 67,500 *
Officers and directors
as a group (7 persons)(5)................ 3,327,288 37.0%
- -------------------------
(*) Less than 1%.
(1) Except as otherwise disclosed, the nature of beneficial ownership is the
sole power to vote and to dispose of the shares (except for shares held
jointly with spouse). 233,334 shares owned by Mr. Mitchell, and 233,333
shares each held by Mr. Franks and Mr. Donnelly, are redeemable by the
Company to satisfy exercises of employee stock options. See Item 13.
(2) Safeguard Scientifics (Delaware), Inc. is the record owner of 2,244,757
shares of Common Stock and 15,000 Series A Shares, which are presently
convertible into 1,500,000 shares of Common Stock. Such shares are
beneficially owned by Safeguard. All of the shares beneficially owned by
Safeguard have been pledged by Safeguard as collateral in connection with
its bank line of credit.
(3) Includes 300,000 shares of Common Stock held by Mr. Mitchell's spouse.
(4) Includes for Messrs. Franks, Dunlop, Nichols, Richter and Pelosi 53,750,
1,250, 1,250, 1,250 shares and 57,500 shares, respectively, which may be
acquired pursuant to stock options which are currently exercisable or which
will become exercisable by May 28, 1997.
(5) Includes 115,000 shares which may be acquired pursuant to stock options
which are currently exercisable or which will become exercisable by May 28,
1997. Includes, for purposes of this table, shares owned by Mr. Donnelly, a
Vice President of the Company. The Company has not designated Mr. Donnelly
as a policy-making executive officer for purposes of Section 16 of the
Exchange Act of 1934 and the regulations thereunder.
3
<PAGE>
Change of Control
There are no arrangements known to the Company, the operation of which
may at a subsequent date result in a change in control of the Company.
1. ELECTION OF DIRECTORS
It is intended that the persons named as Proxies for this Annual
Meeting will vote in favor of the election of the following nominees as
directors of the Company, to hold office until the Annual Meeting of
Stockholders in 1998 and until their successors are elected and have qualified.
All of the nominees are presently serving as directors of the Company. Each of
the nominees has consented to serve if elected. However, if any of the nominees
should become unavailable prior to the election, the holder of the Proxies may
vote the Proxies for the election of such other persons as the Board of
Directors may recommend, unless the Board of Directors reduces the number of
directors to be elected.
The Board of Directors unanimously recommends that Stockholders vote
FOR the election of the slate of nominees set forth in this Proposal. Proxies
received by the Board will be so voted unless Stockholders specify otherwise on
their Proxy cards. The four nominees receiving the highest number of affirmative
votes of the Shares present or represented and entitled to be voted shall be
elected as directors.
<TABLE>
<CAPTION>
Has Been
Principal Occupation and Business a Director
Name Experience During Last Five Years Since Age
- ---- --------------------------------- ----- ---
<S> <C> <C> <C>
George E. Mitchell President, Chairman and Chief Executive
Officer of the Company 1984 59
Anthony A. Nichols Chairman, Brandywine Realty Trust, 1988 57
a real estate investment trust. (1)(2)(4)
Richard P. Richter President Emeritus, Ursinus College(1)(3)(5) 1989 66
W. Wayne Dunlop Executive Vice President and Chief Operating 1995 50
Officer, Barclay White, Inc., a general
construction contracting and management
firm(1)(6)
</TABLE>
- ----------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Stock Option Committee.
4
<PAGE>
(4) Prior to August 1996, Mr. Nichols was President of the Nichols Company, an
owner and manager of commercial office and industrial space.
(5) Prior to January 1, 1995, Mr. Richter was President of Ursinus College.
(6) Mr. Dunlop has been Chief Operating Officer of Barclay White since
September 1995 and Executive Vice President since September 1994. Prior to
September 1994 he was a Senior Vice President of Barclay White.
Committees and Meetings of the Board of Directors
The Board of Directors held four (4) meetings and took action by
unanimous consent three (3) times in 1996. The Company's Board of Directors has
appointed standing Audit, Compensation and Stock Option Committees. The Audit
Committee, which met in February 1996, is authorized to conduct such reviews and
examinations as it deems necessary or desirable with respect to the practices
and procedures of the independent accountants, the scope of the audit,
accounting controls, practices and policies, the recommendation to the Board of
the independent accountants to be selected, and the relationship between the
Company and the independent accountants, including the availability of Company
records, information and personnel. The Compensation Committee, which currently
consists of Mr. Nichols only, and took action in February 1996, fixes
compensation levels, including incentive compensation for all officers and other
principal employees. The Stock Option Committee, which administers the Company's
stock option plans, currently consists of Dr. Richter only and took action in
December 1996. The Board does not have a Nominating Committee. All of the
directors attended at least 75% of the Board meetings and meetings of committees
of which they were members.
Directors' Compensation
Directors are elected annually and hold office until their successors
are elected and have qualified or until their earlier resignation or removal.
Directors who are not employees of the Company are paid a quarterly fee of
$1,000 and $400 for each Board meeting attended, including committee meetings
attended on a date other than a Board meeting date.
The Company also maintains a stock option plan for Non-Employee
Directors (the "Directors' Plan") which provides for the grant of options to
directors not otherwise employed by the Company, its parent or any of its
subsidiaries ("Eligible Director"). Each Eligible Director receives, as of the
date such person first becomes an Eligible Director, an option to purchase 5,000
shares of the Company's Common Stock at an option exercise price equal to the
fair market value of the Common Stock on the date of grant. All options granted
under the Directors' Plan vest in four equal annual installments beginning on
the first anniversary of the date of option grant and have a term of seven
years. During 1996, Mr. Nichols and Mr. Richter were each granted options for
10,000 shares of the Company's Common Stock exercisable at $.26 per share; Mr.
Dunlop was granted options for 5,000 shares at $.25 per share and 5,000 shares
at $.26 per share. No options were exercised by any Eligible Director during
1996.
5
<PAGE>
REPORT OF THE BOARD COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee")
determines compensation levels, including incentive compensation, for the
executives of the Company. Anthony A. Nichols is presently serving as the sole
member of the Compensation Committee.
Executive Compensation Policies
The Company was and is in a highly competitive industry. In order to
succeed, the Company believes that it must be able to attract and retain
qualified executives, promote among them the economic benefits of stock
ownership in the Company, and motivate and reward executives who, by their
industry, loyalty and exceptional service, make contributions of special
importance to the success of the business of the Company. The Company has
structured its executive compensation program to support the strategic goals and
objectives of the Company.
Base compensation levels and benefits for executives generally had been
set in previous years to be between the lower end and the midpoint of the scale
of compensation paid by comparable companies in the Company's principal
industry. Conversely, incentive programs were regarded to be above the midpoint
of the scale in the industry. In pursuing this philosophy, the Company believed
it could keep the fixed component of the compensation package at reasonable
levels while incenting its key executives and managers to achieve better than
average results. Therefore, the total cash compensation plan is made up of a
lower base and higher incentive opportunity which in total would be competitive
with comparable companies in the industry if the Company's objectives are
achieved. For the purpose of establishing these levels, the Company had reviewed
an evaluation by an independent compensation consultant of various published
industry salary surveys. In setting executive compensation packages for 1995 and
1996, the Committee considered an evaluation of executive compensation levels
for comparably-sized companies in the electrical contracting industry.
Annual cash bonuses in 1996 were, and in 1997 will be based on Company
income and individual goals. At the beginning of each year, the Committee
approves a target range of income, and a range of potential bonus amounts for
the chief executive officer and each other executive officer, stated as a
percentage of base salary. Performance bonuses are awarded at year-end based on
the actual income compared to the target income, and the achievement of
individual objectives and individual contributions during the year to the
achievement by the Company of its financial and strategic objectives, which the
Board determines in its discretion.
Grants of Company stock options are intended to align the interests of
executives and key employees with the long-term interests of the Company's
stockholders, and to encourage executives and key employees to remain in the
Company's employ. Generally, grants are not made in every year, but are awarded
subjectively based on a number of factors, including the pre-tax operating
earnings of the Company, the individual's contributions to the achievement of
the Company's financial and strategic objectives, and the amount and remaining
term of options already held by an individual. The Stock Option Committee of the
Board administers the
6
<PAGE>
Company's stock option plan. In 1996, options for 25,000 shares were granted to
Michael H. Pelosi, III and options for 30,000 shares were issued to Frederick B.
Franks, III. See "Stock Options," below.
CEO Compensation
In 1994, the Compensation Committee authorized an increase in Mr.
Mitchell's base salary to $140,000. However, based on the Company's performance
during the first quarter and its cash flow problems, in April 1994, Mr. Mitchell
initiated a 16% reduction in his salary in order to conserve Company resources.
Mr. Mitchell continued to draw base salary at this reduced level in 1995. A
payment of $25,000 was made to Mr. Mitchell in March 1996, to partially
compensate him for the salary foregone in 1994 and 1995. Since the Company
failed to achieve the established target range of return on assets during 1995
and 1996, no bonus was paid to him for 1995 or 1996.
Other Executive Compensation
The Compensation Committee re-set executive salaries for 1994 for
certain executives based on its review of executive compensation in the
electrical contracting industry. Mr. Pelosi's compensation is governed by a
five-year employment agreement, and his salary was not adjusted. However, based
on the Company's performance during the first quarter and its cash flow
problems, in April and May 1994, all executives accepted salary reductions in
order to conserve Company resources. Mr. Pelosi (but no other executive
officers) received a bonus in 1995 and 1996. Mr. Franks received a payment of
$16,000 in March 1996, to compensate him for salary foregone in 1994 and 1995.
By the Compensation Committee:
Anthony A. Nichols
7
<PAGE>
Summary Compensation of Executive Officers
The following table sets forth information concerning compensation paid
to the Chief Executive Officer and to each other person who was an executive
officer of the Company at any time during 1996 and whose salary and bonus
exceeded $100,000 in 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
- ------------------------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation
---------------------------------------------------------------------------
Awards
---------------------
Securities
Other Annual Underlying All Other
Compensation Options/ Compensa-
Name and Principal Position Year Salary ($)(1) Bonus ($) ($)(2) SARS (#) tion ($)(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George E. Mitchell, (4) 1996 $117,600 $ 0 $18,331 0 $33,170
President, Chairman and 1995 142,600 0 17,733 0 32,106
Chief Executive Officer 1994 125,354 0 13,816 0 33,787
- ----------------------------------------------------------------------------------------------------------------------------------
Michael H. Pelosi III, (5) 1996 $100,000 $ 75,000 $ 0 25,000 $37,500
President, Airo Clean, Inc. 1995 99,801 5,465 0 50,000 37,500
1994 93,461 0 0 0 37,500
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick B. Franks, III (4) 1996 $100,000 0 $11,552 30,000 $18,222
Vice President-Finance 1995 108,154 0 11,194 0 17,587
and Chief Financial Officer 1994 92,154 0 7,491 0 17,747
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Includes annual compensation which has been deferred by the named
executives pursuant to the Company's 401(k) Tax Deferred Retirement and
Incentive Plan ("401(k) Plan").
(2) Represents amounts reimbursed during the fiscal year for the payment of
taxes. Perquisites and other personal benefits did not exceed the lesser of
$50,000 or 10% of any executive officer's salary and bonus and accordingly
have been omitted from the table as permitted by the rules of the
Securities and Exchange Commission.
(3) The stated amounts for fiscal 1996 include the following amounts for each
named executive officer: Company contributions under the 401(k) Plan -- Mr.
Mitchell, $0; Mr. Pelosi, $0; Mr. Franks, $0; term life and disability
premiums -- Mr. Mitchell, $26,589; Mr. Pelosi, $0; Mr. Franks, $14,536;
current dollar value of benefits to the named executives of the remainder
of split-dollar premiums paid by the Company -- Mr. Mitchell, $6,581; Mr.
Pelosi, $0; Mr. Franks, $3,686. residual salary payments agreed to in
connection with acquisition -- Mr. Mitchell, $0; Mr. Pelosi, $37,500; Mr.
Franks, $0.
(4) 1995 figure includes salary adjustment paid on March 15, 1996 to: Mr.
Mitchell, $25,000 and Mr. Franks, $16,000.
(5) Mr. Pelosi was elected as an executive officer of the Company in mid-1994.
8
<PAGE>
Stock Options
The following table sets forth information with respect to the number
of unexercised options and the value of unexercised in-the-money options at
December 31, 1996.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Securities Underlying
Shares Unexercised Value of Unexercised
Acquired Options/SARs at Fiscal Year-End in-the-Money Options/SARs
on (#)(1) at Fiscal Year-End ($)(1)
Exercise Value
Name (#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George E. Mitchell 0 $ 0 0 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Michael H. Pelosi III 0 $ 0 51,500 62,500 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Frederick B. Franks III 0 $ 0 50,000 30,000 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) On December 31, 1996, the fair market value of the Common Stock was $.26.
No options were in-the-money on that date.
During Fiscal Year 1996, Mr. Pelosi was granted options to purchase
25,000 shares, and Mr. Franks was granted options for 30,000 shares, of the
Company's Common Stock under the Company's 1993 Stock Option Plan. These options
were issued at the market price on the date of grant, expire seven years after
the date of grant, and vest in twenty-five percent increments annually beginning
one year from the date of grant. No options were granted to the Company's Chief
Executive Officer in 1996. The following table sets forth certain information
regarding the options granted to Mr. Pelosi and Mr. Franks in 1996:
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
===================================================================================================================================
Potential Realizable Value
at Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term
===================================================================================================================================
% of Total
Number of Options/
Securities SARs Exercise
Underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael H. Pelosi, III 25,000 4.7% $.26 12/16/03 $2,646 $6,617
====================================================================================================================================
15,000 2.8% $.45 05/03/02 $2,748 $ 6,403
Frederick B. Franks, III 15,000 2.8% $.26 12/16/02 $1,587 $ 3,670
------ ---- ------ -------
30,000 5.6% $4,335 $14,408
===================================================================================================================================
</TABLE>
9
<PAGE>
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
In connection with the acquisition of the assets of Airo Clean
Engineering, Inc. in 1993, Airo Clean, Inc. entered into a five-year employment
agreement with Michael H. Pelosi III providing for his employment through
February 1, 1998 as President of Airo Clean, Inc. at a minimum base salary of
$100,000. Mr. Pelosi has also received residual salary payments agreed to in
connection with the acquisition of $37,500 per year, terminating with 1996. The
agreement also provided for Mr. Pelosi to receive an incentive payment each year
equal to 3.75% of Airo Clean's net income, before allocated expenses and taxes,
in excess of $150,000 per year. In 1996, Mr. Pelosi orally agreed to replace
this bonus formula with a plan similar to the bonus plan used for the Company's
other executive officers. This plan consists of a formula based on pre-tax
earnings of Airo Clean, and individual goals evaluated in the discretion of the
Board. Airo Clean did not achieve this target in 1994, and consequently Mr.
Pelosi did not receive any incentive payment for 1994. In May 1994, in
recognition of the Company's liquidity problems, Mr. Pelosi accepted a temporary
salary reduction for the balance of 1994 in order to conserve Company resources.
In 1995, Airo Clean did achieve its target and Mr. Pelosi received a bonus of
$5,465. Mr. Pelosi received a bonus of $75,000 in 1996 under his new bonus plan.
Upon the termination of Mr. Pelosi's employment for reasons other than just
cause or voluntary resignation, he will be entitled to receive an amount equal
to his base salary for the balance of the term of the agreement. Pursuant to
this agreement, Mr. Pelosi has agreed to refrain from competing with the Company
until the earlier of February 1, 1998 or two years after the termination of his
employment.
STOCK PERFORMANCE GRAPH
The following chart compares the cumulative total stockholder return on
the Company's Common Stock for the period December 31, 1991 through December 31,
1996 with the cumulative total return on the NASDAQ Index and the cumulative
total return for a peer group index for the same period. Because the Company has
discontinued its furnishings operations, the Company has selected as a new peer
group SIC Code 1731--Electrical Contractors, which is the primary industry in
which the Company is continuing to operate.
220.00|------------------------------------------------------------------|
| |
| |
200.00|----------------------------------------------------------------@-|
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| |
180.00|------------------------------------------------------------------|
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| |
160.00|----------------------------------------------------@-------------|
| * |
| |
140.00|------------------------------------------------------------------|
| |
| @ |
120.00|------------------------@-----------------------------------------|
| |
| * |
100.00|*#@----------@----------------------------------------------------|
| |
| |
80.00|------------------------------------------------------------------|
| * |
| |
60.00|------------------------------------------------------------------|
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40.00|----------------------------------------------------------------*-|
| * |
| # |
20.00|------------------------------------------------------------------|
| |
| # # # |
0.00|--------------------------------------#---------------------------|
1991 1992 1993 1994 1995 1996
FISCAL YEAR ENDING
<TABLE>
<CAPTION>
COMPANY 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
CORE TECHNOLOGIES, INC. * 100 112.50 150.00 75.00 37.50 40.00
INDUSTRY INDEX # 100 27.57 8.21 2.96 4.66 5.59
BROAD MARKET @ 100 100.98 121.13 127.17 164.96 204.98
</TABLE>
10
<PAGE>
The above chart assumes that $100 was invested on December 31, 1991 in the
Company's Common Stock and in each of the comparison groups, and assumes
reinvestment of dividends.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company rents 21,580 square feet of office space used as its
headquarters in Exton, Pennsylvania. Prior to the third quarter of 1996, this
facility was owned by Safeguard; it has subsequently been transferred to
Brandywine Realty Trust, a Real Estate Investment Trust of which Anthony
Nichols, a director of the Company, is a Chairman. From April 1, 1995 through
April 1, 1996, this facility was leased from Safeguard on a month to month basis
with monthly rental payments of $11,539 and a monthly operating expense
allowance of $4,784, which expense allowance is subject to adjustment based upon
the Company's proportionate share of actual operating expenses. Beginning April
1, 1996, the Company paid a monthly rental of $12,588 plus the monthly operating
expense. The Company believes the lease terms are no less favorable than could
be obtained from an unrelated third party.
Prior to April 1, 1995, the Company also rented 4,600 sq. feet of
office space in Exton, Pennsylvania from Safeguard. The Company paid monthly
rental to Safeguard of $3,067 per month and an operating expense allowance of
$1,303 per month prior to the termination of the lease. All amounts paid to
Safeguard under the lease for this property have been charged to discontinued
operations on the Company's financial statements.
Safeguard currently has in place letters of credit in the aggregate
amount of $4,500,000 to guaranty the Company's bank loans through September 30,
2000. Safeguard has guaranteed varying amounts of the Company's debt in the
past. Safeguard received no monetary compensation for the extension of these
guarantees. The Company has agreed to indemnify Safeguard against loss resulting
from the above described guarantees.
In June 1994, Safeguard purchased from the Company 15,000 shares of its
Series A Redeemable Convertible Preferred Stock ("Series A Shares") for an
aggregate purchase price of $1.5 million. The Series A Shares are convertible
into shares of Common Stock based on a conversion price of $1.00 per share of
Common Stock. The conversion price and number of shares into which the Series A
Shares may be converted are subject to anti-dilutive adjustments. The Series A
Shares are entitled to a 6% per annum dividend payable out of legally available
funds. Dividends which are not declared and paid will accumulate. No dividends
have been declared to date. Unpaid, undeclared cumulative dividends as of
December 31, 1996 were $225,000. The Series A Shares are entitled to one vote
for each share of Common Stock into which such Series A Shares may be converted.
The Company may redeem the Series A Shares at any time and must redeem all
outstanding Series A Shares on June 1, 2001.
In March 1995, the Company sold all of the capital stock of CenterCore
Canada Limited to Safeguard for $10,000. CenterCore Canada had an intercompany
liability to the Company of approximately $369,300, which liability survived the
stock sale. In February 1996, Safeguard
11
<PAGE>
sold the assets of Safeguard Canada for a cash payment of $100,000 U.S. plus
contingent deferred payments equal to three percent of the purchaser's annual
consolidated revenues from all or any part of the business or assets sold to the
purchaser in the years 1996 through 2000, up to a maximum aggregate of $100,000.
The debt between CenterCore Canada and the Company was satisfied by CenterCore
Canada's assignment to the Company of the cash proceeds and the rights to the
contingent deferred payments.
Effective September 29, 1995, Safeguard contributed to the capital of
the Company 2,000,000 shares of the Company's Common Stock and sold to Mr.
Mitchell, Mr. Franks and Philip J. Donnelly, a Vice President of the Company, an
aggregate of 2,500,000 shares of the Company's Common Stock, at a price of $.10
per share, payable in the form of a five year, interest-bearing promissory note.
The promissory notes bear interest at a rate of 6.35% per annum and are payable
in full upon the maturity date, September 29, 2000. Each individual is required,
however, to prepay the outstanding balance to the extent of 25% of the proceeds
of any sale or other disposition of any of the shares purchased from Safeguard.
The parties estimated the fair market value of the shares to be $.10 as of the
date of issue, taking into account a discount for lack of liquidity, after the
Common Stock of the Company was delisted from NASDAQ.
Mr. Mitchell, Mr. Franks and Mr. Donnelly have entered into an
agreement with the Company pursuant to which they have deposited an aggregate of
700,000 of the shares acquired from Safeguard into escrow with the Company. The
Company may redeem these escrowed shares in order to satisfy exercises of
options under the Company's 1993 Stock Option Plan. The redemption price payable
by the Company will be equal to the exercise price payable by the individual
exercising the option.
In 1995, Safeguard advanced $887,000 to the Company to cover closing
costs of the sale of the furnishings business and payments to Maris' sureties.
The Company has issued to Safeguard a Subordinated Note to evidence this
obligation. The Subordinated Note accrues interest at 6% per annum. Interest and
principal are due on December 31, 2000 but the Subordinated Note is subordinated
to all the Company's obligations to its other lenders. Additionally, if the
Safeguard letter of credit can be cancelled prior to December 31, 2000,
Safeguard has agreed forgive all obligations under the Subordinated Note.
In connection with the Airo Clean acquisition in 1993, Airo Clean, Inc.
entered into a five-year employment agreement with Joseph P. Pelosi, the brother
of Michael H. Pelosi, III. The agreement provides for a minimum annual base
salary of $80,000, and provides for an incentive payment each year equal to
3.75% of Airo Clean's net income, before allocated expenses and taxes, in excess
of $150,000. During 1994, the Company paid Joseph Pelosi $80,000 plus normal
employee benefits. Joseph Pelosi, as well as Michael H. Pelosi, has accepted a
change in bonus formula to a plan similar to that used for other executive
officers of the Company. See "Executive Compensation - Employment Contracts and
Termination of Employment and Change in Control Arrangements."
12
<PAGE>
Also in connection with the Airo Clean acquisition, Airo Clean entered
into a lease for approximately 15,300 square feet of flex office, warehouse and
assembly space in Exton, PA from Michael Pelosi, Jr. and Lucille Pelosi, who are
the parents of Michael H. Pelosi, III. The lease continues through December
2001. During 1995, Airo Clean paid $110,000 as rent to Mr. and Mrs. Pelosi, and
also paid all operating expenses for the leased premises. The Company has
consolidated Airo Clean's operations into the Company's headquarters facility,
and sublet the Airo Clean space. Through the remaining term of the lease, the
rental paid by the sublettor will be $128,000 less than the rent to be paid by
the Company.
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE 1993 STOCK OPTION
PLAN
Background
At the Annual Meeting, the stockholders will be asked to approve an
amendment to the Company's 1993 Stock Option Plan. This amendment was adopted by
the Board, subject to Stockholder approval, on February 27, 1997. The 1993 Stock
Option Plan, as proposed to be amended, is hereinafter referred to as the "1993
Plan."
Proposed Amendment to the 1993 Plan
The proposed amendment to the 1993 Plan authorizes an increase in the
number of shares of Common Stock which may be issued upon exercise of options
granted or to be granted under the 1993 Plan by 500,000 shares of Common Stock,
from 1,200,000 to 1,700,000 shares of Common Stock in the aggregate.
Approval by Stockholders
Approval of the adoption of the amendment to the 1993 Plan requires the
affirmative vote of a majority of the votes cast at a meeting at which a quorum
representing a majority of all outstanding voting stock of the Company is
present, either in person or by proxy, and voting on the 1993 Plan. If not so
approved, then the 1993 Plan in the form as approved by the stockholders at the
1994 Annual Meeting, as amended at the 1995 Annual Meeting (increasing the
number of shares which could be issued upon exercise of options from 500,000 to
1,200,000), will remain in full force and effect and the aggregate number of
shares of Common Stock that are subject to options granted under the 1993 Plan
will not exceed 500,000 shares of Common Stock.
13
<PAGE>
DESCRIPTION OF THE 1993 PLAN
The following description of the 1993 Plan is intended merely as a summary of
the principal features of the 1993 Plan.
Purpose of the 1993 Plan
The purpose of the 1993 Plan is to provide additional incentive to
employees of the Company and its subsidiaries and to increase their proprietary
interest in the success of the enterprise to the benefit of the Company and its
stockholders.
Shares Subject to the 1993 Plan
Subject to the adjustment provisions discussed below, the maximum
number of shares of Common Stock which may be issued under the 1993 Plan is
currently 1,200,000, and, subject to Stockholder approval of this Proposal, will
be increased to 1,700,000. Such shares may be authorized but unissued shares of
Common Stock or previously issued but reacquired shares of Common Stock. Shares
subject to options which remain unexercised upon expiration, exchange of
existing options, or earlier termination of such options will again become
available for issuance in connection with stock options awarded under the 1993
Plan. On March 24, 1997, the average of the bid and asked prices as quoted by
the market makers of the Company's Common Stock was $.219 per share.
Administration
The 1993 Plan is administered by the Stock Option Committee, which
currently is composed of Director Richard P. Richter. The Stock Option Committee
has the authority to interpret the 1993 Plan; to establish appropriate rules and
regulations for the proper administration of the 1993 Plan; to select the
persons to whom options should be granted; to determine the number of shares to
be covered by such options, the times and dates at which such options shall be
granted, and whether the options shall be incentive stock options ("ISO") or
non-qualified stock options ("NQSO"); and generally to administer the 1993 Plan.
Eligibility
Employees (including any directors who are also employees) of the
Company or of any subsidiary who are significant contributors to the business of
the Company and its subsidiaries are eligible to participate in the 1993 Plan.
On April 1, 1997, there were approximately 87 persons considered eligible to
participate in the 1993 Plan.
Stock Options
The 1993 Plan requires that each optionee enter into a stock option
agreement with the Company which incorporates the terms of the option and such
other terms, conditions and restrictions, not inconsistent with the 1993 Plan,
as the Stock Option Committee may determine.
14
<PAGE>
The option price will be determined by the Stock Option Committee, but
may not, with respect to ISOs, be less than the greater of 100% of the fair
market value of the optioned shares of Common Stock or the par value thereof on
the date of grant. If the grantee of an ISO under the 1993 Plan owns more than
10% of the total combined voting power of all shares of stock of the Company or
of any parent or subsidiary of the Company, the option price cannot be less than
110% of the fair market value at the date of grant and the term of such option
cannot be more than five years.
The term of any other option granted under the 1993 Plan may not exceed
ten years. Options will become exercisable in such installments and on such
dates as the Stock Option Committee may specify. The Stock Option Committee may
accelerate the exercise date of any outstanding options, in its discretion, if
it deems such acceleration desirable. Any option held by an individual who dies
while employed by the Company or any subsidiary, or whose employment with the
Company and all subsidiaries is terminated, prior to the expiration date of such
option, will remain exercisable by the former employee or his personal
representative for a period of time following the employee's termination of
employment or death as provided for in the 1993 Plan and the applicable option
agreement. Options are not transferable except at death.
The 1993 Plan provides that the aggregate fair market value (determined
as of the time the ISO is granted) of the shares with respect to which ISOs are
exercisable for the first time by an optionee during any calendar year under the
1993 Plan and any other ISO plan of the Company, or any parent or subsidiary of
the Company, cannot exceed $100,000.
The option price is payable in cash or its equivalent or, in the
discretion of the Stock Option Committee, (i) in shares of Common Stock of the
Company previously acquired by the optionee, provided that if such shares were
acquired through exercise of an ISO, such shares have been held by the optionee
for a period of not less than the statutory holding periods described in the
Internal Revenue Code of 1986, as amended (the "Code"), on the date of exercise
(which as of April 1, 1997 are two years from the date of grant of the ISO and
one year following the date of transfer of the shares to the optionee), or if
such shares were acquired through exercise of an NQSO, such shares have been
held by the optionee for a period of more than one year on the date of exercise
and provided further that each optionee may use the procedure described in this
clause (i) only once during any six-month period; (ii) by delivering a properly
executed notice of exercise of the option to the Company and a broker, with
irrevocable instructions to the broker to promptly sell the underlying shares of
Common Stock and deliver to the Company the amount of sale proceeds necessary to
pay the exercise price of the option; or (iii) by delivery of a full recourse
promissory note. The Stock Option Committee also may elect to cash-out all or
part of the portion of the option to be exercised by paying optionee an amount,
in cash or stock, equal to the excess of the fair market value of the stock over
the exercise price on the effective date of such cash-out.
15
<PAGE>
Adjustments Upon Changes in Capitalization, Mergers and Other Events
The number of shares issuable under the 1993 Plan and upon the exercise
of options outstanding thereunder, and the exercise price of such options, are
subject to adjustment in the event of a stock split, stock dividend or similar
change in the capitalization of the Company. In the event of a merger,
consolidation or other specified corporate transactions, options will be assumed
by the surviving or successor corporation, if any. However, in the event of such
a corporate transaction, the 1993 Plan also authorizes the Stock Option
Committee to terminate options to the extent they are not exercised prior to
consummation of such a transaction, and to accelerate the vesting of options so
that they are immediately exercisable prior to the consummation of the
transaction.
Duration and Amendment of the 1993 Plan
The Board may amend or modify the 1993 Plan at any time, but no such
amendment or modification, without the approval of the stockholders, shall (a)
increase the amount of stock on which options may be granted, except pursuant to
the adjustment provisions of the 1993 Plan, (b) change the provision relating to
the eligibility of employees to whom options may be granted, or (c) materially
increase the benefits accruing to participants under the 1993 Plan; provided,
however, that no Stockholder approval will be required for an amendment or
modification pursuant to (a) and (b) above if the applicable sections of the
Code, and rules and regulations thereunder governing incentive stock options, do
not require Stockholder approval and, provided further, that no Stockholder
approval will be required for an amendment or modification pursuant to (c) above
if Rule 16b-3, or any successor provision promulgated pursuant to Section 16 of
the Securities Exchange Act of 1934, does not require Stockholder approval. The
1993 Plan will terminate on October 28, 2003 unless terminated earlier by the
Board. No options may be granted after such termination, but options outstanding
at the time of termination will remain exercisable in accordance with their
terms.
Federal Income Tax Consequences
Based on the advice of counsel, the Company believes that the normal
operation of the 1993 Plan should generally have, under the Code, and the
regulations and rulings thereunder, all as in effect on April 1, 1997, the
principal federal income tax consequences described below.
Incentive Stock Options.
If the requirements regarding ISOs set forth in the 1993 Plan are met,
ISOs granted under the 1993 Plan will be afforded favorable federal income tax
treatment under the Code. The optionee will not recognize taxable income and the
Company will not be entitled to a deduction upon the grant of an ISO. Moreover,
the optionee will not recognize taxable income (except alternative minimum
taxable income, if applicable) and the Company will not be entitled to a
deduction upon the exercise by the optionee of an ISO, provided the optionee was
an employee of the Company or any of its subsidiary corporations, as defined in
Section 424(f) of the Code, during the entire period from the date of grant of
the ISO until three months before the date of exercise.
16
<PAGE>
If the employment requirements described above are not met, the tax
consequences relating to NQSOs (discussed below) will apply.
If the optionee disposes of the Common Stock acquired under an ISO
after at least two years following the date of grant of the ISO and at least one
year following the date of transfer of the Common Stock to the optionee
following exercise of the ISO, the optionee will recognize a long-term capital
gain or loss equal to the difference between the amount realized upon the
disposition and the exercise price. Any net capital gain will be taxed at the
ordinary income tax rates, but only up to a maximum rate of 28%. Any net capital
loss can only be used to offset up to $3,000 per year ($1,500 per year in the
case of a married individual filing separately) of ordinary income.
If the optionee makes a disqualifying disposition of the Common Stock
(that is, disposes of the Common Stock within two years after the date of grant
of the ISO or within one year after the transfer of the Common Stock to the
optionee), but all other requirements of Section 422 of the Code are met, the
optionee will generally recognize ordinary income upon disposition of the Common
Stock in an amount equal to the lesser of (i) the fair market value of the
Common Stock on the date of exercise minus the exercise price, or (ii) the
amount realized on disposition minus the exercise price. However, in the case of
a disqualifying disposition made less than six months after the date of grant of
the option by a person subject to Section 16(b) of the Securities Exchange Act
of 1934, the determination of ordinary income under (i) above will generally be
based on the fair market value of the Common Shares as of the date which is six
months following the date the ISO was granted, unless the optionee makes an
election under Section 83(b) of the Code. Disqualifying dispositions of Common
Stock also may, depending upon the sales price, result in either long-term or
short-term capital gain or loss under the Code rules which govern other stock
dispositions.
If the requirements of Section 422 of the Code are not met, the Company
will be allowed a federal income tax deduction to the extent of the ordinary
income includible in the optionee's gross income in accordance with the
provisions of Section 83 of the Code (and Section 3402 of the Code, to the
extent applicable) and the regulations thereunder.
The use of Common Stock received upon the exercise of an ISO to pay the
exercise price in connection with the exercise of other ISOs within either the
two-year or one-year holding periods described above will constitute a
disqualifying disposition of the Common Stock so used which will result in
income (or loss) to the optionee and, to the extent of a recognized gain, a
deduction to the Company. If, however, these holding period requirements are met
and the number of shares of Common Stock received on the exercise does not
exceed the number of shares of Common Stock surrendered, the optionee will
recognize no gain or loss with respect to the surrendered Common Stock, and will
have the same basis and holding period with respect to the newly acquired shares
of Common Stock as with respect to the surrendered shares. To the extent that
the number of shares of Common Stock received exceeds the number surrendered,
the optionee's basis in such excess shares will equal the amount of cash paid by
the optionee upon the exercise of the option, and the optionee's holding period
with respect to such excess shares will begin on the date such shares are
transferred to the optionee. The tax treatment
17
<PAGE>
described above for shares of Common Stock newly received upon exercise is not
affected by using shares of Common Stock to pay the exercise price.
Non-qualified Stock Options
All other options granted under the 1993 Plan are NQSOs and will not
qualify for any special tax benefits to the optionee. Under present Treasury
Regulations, the Company's stock options are not deemed to have a readily
ascertainable value. Accordingly, an optionee will not recognize any taxable
income at the time he or she is granted an NQSO and the Company will not be
entitled to a deduction upon the grant of an NQSO.
Generally, an optionee will recognize ordinary income at the time of
exercise of an NQSO, in an amount equal to the excess of the fair market value
of the shares of Common Stock at the time of such exercise over the exercise
price. If, however, an optionee who is subject to Section 16(b) of the
Securities Exchange Act of 1934 exercises an NQSO less than six months after the
date it is granted, he or she will generally recognize ordinary income six
months after the NQSO is granted, unless he or she makes an election under
Section 83(b) of the Code to recognize income at an earlier date.
The Company will be entitled to a deduction to the extent of the
ordinary income recognized by an optionee in accordance with the rules of
Section 83 of the Code and the regulations thereunder. However, no deduction
will generally be allowed to the Company unless the Company deducts and
withholds federal income tax.
An optionee exercising an NQSO is subject to federal income tax on the
income recognized as a result of the exercise of an NQSO and federal Income tax
must be withheld. The Committee, in its discretion, may permit the optionee to
elect to surrender or deliver shares of Common Stock otherwise issuable upon
exercise, or previously acquired shares, in order to satisfy the federal income
tax withholding, subject to certain restrictions set forth in the 1993 Plan.
Such an election will result in a disposition of the shares of Common Stock
which are surrendered or delivered, and an amount will be included in the
optionee's income equal to the excess of the fair market value of such shares
over the optionee's basis in such shares.
If the optionee pays the exercise price in cash, the basis of the
shares of Common Stock received by an optionee upon the exercise of an NQSO is
the exercise price paid plus the amount recognized by the optionee as income
attributable to such shares upon such exercise. If the exercise price is paid in
cash, the optionee's holding period for such shares will begin on the day after
the date on which the optionee realized income with respect to the transfer of
such option shares, i.e., generally the day after the exercise date. Any net
capital gain realized by the optionee upon a subsequent disposition of any such
shares is subject to federal income tax on the income recognized at the ordinary
income tax rates, but only up to a maximum of 28%. Any loss realized on a
subsequent disposition, however, will be treated as a capital loss and thus can
only be used to offset up to $3,000 per year ($1,500 in the case of a married
individual filing separately) of ordinary income.
18
<PAGE>
If the optionee surrenders shares of Common Stock to pay the exercise
price, and the number of shares received on the exercise does not exceed the
number of shares surrendered, the optionee will recognize no gain or loss with
respect to the surrendered shares, and will have the same basis and holding
period with respect to the newly acquired shares as with respect to the
surrendered shares. To the extent that the number of shares of Common Stock
received exceeds the number surrendered, the fair market value of such excess
shares on the date of exercise, reduced by any cash paid by the optionee upon
such exercise, will be includible in the gross income of the optionee. The
optionee's basis in such excess shares will equal the sum of the cash paid by
the optionee upon the exercise of the option plus any amount included in the
optionee's gross income as a result of the exercise of the option and the
optionee's holding period with respect to such excess shares will begin on the
day following the date of exercise.
Other Tax Considerations
The 1993 Plan is not qualified under Section 401(a) of the Code and is
not subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended to date. The comments set forth in the above paragraphs are
only a summary of certain of the federal income tax consequences relating to the
1993 Plan. No consideration has been given to the effects of state, local and
other tax laws on the optionee or the Company.
NEW PLAN BENEFITS
The following table sets forth information with respect to the number
of options which were granted or which are expected to be granted to each of the
named individuals or groups under the 1993 Plan subject to Stockholder approval
at the Annual Meeting of the proposal contained in Proposal 2 above. The options
set forth in this table will be rescinded if such Stockholder approval is not
obtained.
<TABLE>
<CAPTION>
Name and Position (1) Number of Options Dollar Value ($)(2)
- -------------------------------------------- ----------------- -------------------
<S> <C> <C>
George E. Mitchell, President and 0 0
Chief Executive Officer
Frederick B. Franks, III, Vice President 0 0
and Chief Financial Officer
Michael H. Pelosi III, President 0 0
Airo Clean, Inc.
Executive Officers as a Group 0 0
Non-Executive-Officer Employees
as a Group 500,000 0
</TABLE>
(1) Non-Employee Directors have been excluded from the above table as they are
not eligible to participate in the 1993 Plan.
(2) All options granted under the 1993 Plan have an exercise price equal to or
greater than the fair market value of the Common Stock on the date of
grant. As optionees must pay the exercise price to the Company to acquire
the shares upon exercise of the option, the dollar value of benefits
received by or allocated to the optionees on the grant date was zero.
19
<PAGE>
Mr. Mitchell, Mr. Franks and Mr. Donnelly have entered into an
agreement with the Company pursuant to which they have deposited an aggregate of
700,000 shares of Common Stock into escrow, which the Company may redeem in
order to satisfy exercises of options under the 1993 Plan. See "Certain
Relationships and Transactions."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Proxy Statement incorporates by reference the Company's Annual
Report to Stockholders which is being delivered to Stockholders herewith in
respect to the annual stockholders meeting to which this Proxy Statement
relates.
INDEPENDENT PUBLIC ACCOUNTANTS
Since 1986, the Company has retained KPMG Peat Marwick LLP as its
independent public accountants, and it intends to retain KPMG Peat Marwick LLP
for the current year ending December 31, 1997. Representatives of KPMG Peat
Marwick LLP are expected to be present at the Annual Meeting, will have an
opportunity at the Annual Meeting to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Disclosure of Delinquent Filers Pursuant to Item 405 of Regulation S-K:
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities ("10%
Stockholders") to file reports of ownership and changes in ownership of Common
Stock and other equity securities of the Company with the Securities and
Exchange Commission ("SEC"). Officers, directors and 10% Stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
received by it and written representations from certain reporting persons that
no other reports were required for those persons, the Company believes that
during the period from January 1, 1996 to December 31, 1996, all Section 16(a)
filing requirements applicable to its officers, directors and 10% Stockholders
were complied with, except for one late Form 4 filed by Mr. Franks relating to
expiration of options.
20
<PAGE>
OTHER MATTERS
The Company is not aware of any other business to be presented at the
Annual Meeting. If any other matters should properly come before the Annual
Meeting, however, the enclosed Proxy confers discretionary authority with
respect thereto.
The Company's Annual Report to Stockholders for the year ended December
31, 1996, including financial statements and other information with respect to
the Company and its subsidiaries, is being mailed simultaneously to the
stockholders but is not to be regarded as proxy solicitation material.
Dated: April 11, 1997
21
<PAGE>
PROXY
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby constitute and appoint George E. Mitchell and Frederick B. Franks, III,
and each of them, my true and lawful agents and proxies with full power of
substitution in each, to vote all shares held of record by me, as directed, and
in their discretion, on all other matters which may properly come before the
1997 Annual Meeting of Stockholders of Core Technologies (Pennsylvania), Inc. to
be held on May 2, 1997, and at any adjournments thereof. I direct said proxies
to vote as specified on the reverse side.
PLEASE MARK, SIGN AND DATE THE PROXY CARD ON THE REVERSE SIDE
AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
+ FOLD AND DETACH HERE +
================================================================================
MISSION STATEMENT
Core Technologies is a diversified company dedicated to providing quality
products and services to customers needing a healthy air environment, and
adequate security in their workplace. Our growth will come through evolving
products and technologies enabling us to continually upgrade service solutions
in existing markets and aggressively explore now ones.
Our specific expertise:
o Advanced Air Filtration
o Indoor Air Quality Enhancements
o Clean Room Products and Services
o Portable Patient Isolation Chambers
o Broad-based Security, Life Safety and Access Control Systems for:
o Industrial and Commercial Applications
o State and Local Correctional Facilities
o Selected Transportation Markets
================================================================================
<PAGE>
The Board of Directors ("Board") recommends that stockholders vote FOR
Proposals I and II. If not otherwise specified, this Proxy will be voted FOR
the election of all nominees and FOR Proposal II.
Please mark [X]
your votes as
indicated in
this example
ELECTION OF DIRECTORS: To withhold authority to vote for any individual
nominee while voting for the remainder, strike a
line through the nominee's name in the list below:
FOR all nominees WITHHOLD
listed (except as AUTHORITY
marked to to vote for all Nominees: George E. Mitchell, Anthony A.
the contrary) Nominees Nichols, Richard P. Richter,
W. Wayne Dunlop
[ ] [ ]
I. PROPOSAL TO AMEND THE 1993 STOCK OPTION PLAN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
DATED:________________ 1997
___________________________
Signature
___________________________
Signature if held jointly
THIS PROXY MUST BE SIGNED EXACTLY
AS NAME APPEARS HEREIN. When shares are
held by joint tenants, both should
sign. Attorneys, executors, administrators,
trustees, etc, should give full title as
such. If a corporation, please sign in full
corporate name by duly authorized officer.
If a partnership, please sign in partnership
name by authorized person.
- --------------------------------------------------------------------------------
+ FOLD AND DETACH HERE +
CORE TECHNOLOGIES (PENNSYLVANIA), INC.
===================================================================
YOUR PROXY VOTE IS IMPORTANT, REGARDLESS OF
THE NUMBER OF SHARES YOU OWN.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
IN PERSON, PLEASE COMPLETE, DATE AND SIGN THE
ABOVE PROXY CARD AND RETURN IT WITHOUT DELAY
IN THE ENCLOSED ENVELOPE.
===================================================================
