<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X]Preliminary Proxy Statement
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CORE, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
[X]$125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22 (a) (2) of Schedule 14A.
[_]$500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_]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 transactions 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:
----------------------------------------------------------------------------
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------------------------
(4) Date filed:
----------------------------------------------------------------------------
<PAGE>
[CORE DYNAMO SYMBOL]
CORE, INC.
18881 VON KARMAN AVENUE, SUITE 1750
IRVINE, CALIFORNIA 92715
----------------
NOTICE OF SPECIAL MEETING IN LIEU OF THE
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 21, 1996
----------------
A Special Meeting in lieu of the Annual Meeting of Stockholders of CORE,
INC. (the "Company") will be held at the Hyatt Regency, 17900 Jamboree
Boulevard, Irvine, California, on Monday, October 21, 1996, at 11:00 A.M.,
local time, for the following purposes:
1. To elect two Class II Directors to the Board of Directors of the Company
to serve for a three year term until the 1999 annual meeting of
stockholders and until their successors are duly elected and qualified;
2. To approve amendments to the Company's 1991 Stock Option Plan to
increase the number of shares issuable under the Plan from 600,000 to
1,200,000 and to change the formula pursuant to which non-employee
directors of the Company are granted options under the Plan;
3. To consider and vote upon a proposal to amend Article 3 of the Company's
Restated Articles of Organization to increase the number of authorized
shares of common stock, par value $0.10 per share, from 10,000,000 to
30,000,000; and
4. To transact such other business as may properly come before the meeting.
The stock transfer books will not be closed but only stockholders of record
at the close of business on September 9, 1996 will be entitled to notice of
and to vote at the meeting.
By order of the Board of Directors,
William E. Nixon,
Clerk
September 18, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING AND VOTE YOUR SHARES. IN THE
EVENT YOU CANNOT ATTEND, PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE
ENCLOSED SELF-ADDRESSED ENVELOPE. A STOCKHOLDER WHO EXECUTES AND RETURNS A
PROXY IN THE ACCOMPANYING FORM HAS THE POWER TO REVOKE SUCH PROXY AT ANY TIME
PRIOR TO THE EXERCISE THEREOF.
<PAGE>
[CORE DYNAMO SYMBOL]
CORE, INC.
18881 VON KARMAN AVENUE, SUITE 1750
IRVINE, CALIFORNIA 92715
----------------
PROXY STATEMENT
----------------
PROXY SOLICITATION AND EXPENSE
The accompanying proxy is solicited by the Board of Directors of CORE, INC.
("CORE" or the "Company"), for use at the Special Meeting in lieu of the
Annual Meeting of Stockholders to be held on Monday, October 21, 1996, at
11:00 A.M., local time, at the Hyatt Regency, 17900 Jamboree Boulevard,
Irvine, California. Proxies in the accompanying form, properly executed and
received prior to the meeting and not revoked, will be voted. A stockholder
who executes and returns a proxy in the accompanying form has the power to
revoke such proxy at any time prior to exercise thereof by notice in writing
received by the Clerk of the Company, by executing a later dated proxy, or by
attending the meeting and voting in person. It is expected that proxy
solicitation materials will be mailed to stockholders on or about September
18, 1996.
The expense of soliciting proxies in the accompanying form will be borne by
the Company. In addition to solicitations by mail, some solicitations may be
made by employees or agents of the Company by mail, telephone or personal
interview.
OUTSTANDING VOTING SECURITIES
On September 9, 1996, there were 7,121,588 shares of Common Stock, par value
$0.10 per share, of the Company ("Common Stock") outstanding, each of which is
entitled to one vote. Only holders of record at the close of business on
September 9, 1996 (the "Record Date") will be entitled to vote at the meeting.
The presence, either in person or by proxy, of the holders of a majority of
outstanding shares of Common Stock is necessary to constitute a quorum at the
meeting.
Abstentions and broker non-votes are each included in calculating the number
of shares present and voting for purposes of determining quorum requirements.
Abstentions are counted in tabulating the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
1. ELECTION OF CLASS II DIRECTORS
Shares represented by the enclosed proxy will, unless otherwise directed, be
voted to elect the nominees listed below to serve as Class II Directors for a
three year term until the 1999 annual meeting of stockholders and until their
successors are duly elected and qualified. In the event of a vacancy in the
list of nominees, the holders of the enclosed proxy will vote for the election
of a nominee acceptable to a majority of the members of the Board of
Directors. Management is not aware of any nominee who will be unable or
unwilling to stand for election or serve if elected.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
---- --- --------------
<S> <C> <C>
Richard H. Egdahl, M.D. 69 1985
John Pappajohn 68 1995
</TABLE>
2
<PAGE>
Assuming a quorum is present, the two persons receiving the two highest
totals of votes cast in favor of his or her election will be elected as Class
II Directors.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the
directors and executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
George C. Carpenter IV... 38 Chairman of the Board of Directors and Chief
Executive Officer
Craig C. Horton.......... 41 Director, President and Chief Operating Officer
William E. Nixon......... 35 Executive Vice President, Chief Financial
Officer, Treasurer and Clerk
Fredric L. Sattler....... 52 Executive Vice President
Ophelia Galindo.......... 38 Corporate Vice President, Product Management and
Technical Development
Leslie Alexandre, 38 Director
Dr.P.H.(1)..............
Stephen C. Caulfield(1).. 56 Director
Richard H. Egdahl, 69 Director
M.D.(2).................
John Pappajohn(1)(2)..... 68 Director
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
The Company's Board of Directors is divided into three classes, each of
whose members serve for staggered three-year terms. The term of the Class I
Directors (presently Dr. Alexandre and Mr. Caulfield) expires in 1998; the
term of the Class II Directors (presently Dr. Egdahl and Mr. Pappajohn)
expires in 1996; and the term of the Class III Directors (presently Mr.
Carpenter and Mr. Horton) expires in 1997. At each annual meeting of
stockholders, directors are elected for a three-year term to succeed the
directors of the same class whose terms are then expiring.
Executive officers of the Company are elected by the Board of Directors
annually and serve at the discretion of the Board of Directors.
George C. Carpenter IV was appointed a Class III Director, and was elected
Chairman of the Board of Directors and Chief Executive Officer of the Company
by the Board effective with the Company's March 24, 1995 merger involving Core
Management, Inc. (the "CMI/PRA Merger"). Mr. Carpenter served as the Chief
Executive Officer and a Director of Core Management, Inc., a Delaware
corporation ("CMI") and now a wholly-owned subsidiary of the Company, since
its formation in 1990. In addition, Mr. Carpenter served as the Chairman,
Chief Executive Officer, Secretary and a Director of Core Management, Inc., a
California corporation and wholly-owned subsidiary of CMI ("CMI-California"),
from its formation in 1990. As a result of the reorganization of CMI-
California and Integrated Behavioral Health, a California corporation and
wholly-owned subsidiary of CMI ("IBH") in March 1993, Mr. Carpenter was
appointed as a director of IBH. From 1988 to 1990, Mr. Carpenter served as a
Vice President, Operations of The Health Data Institute, Inc., a provider of
utilization review, case management and analytic services and a developer of
related software, a subsidiary of Baxter International, Inc.
Craig C. Horton was appointed a Class III Director in March 1995 effective
with the CMI/PRA Merger, and was elected President and Chief Operating Officer
of the Company by the Board on March 30, 1995.
3
<PAGE>
Mr. Horton served as the President and a Director of CMI and CMI-California
from their respective formations in 1990, and also served as the acting Chief
Financial Officer of CMI from 1994 to 1995. In December 1994, Mr. Horton was
named as a Director and Chief Executive Officer of IBH. From 1988 to 1990, Mr.
Horton was a Vice President, Operations of The Health Data Institute, Inc., a
subsidiary of Baxter International, Inc.
William E. Nixon is the Executive Vice President, Chief Financial Officer,
Treasurer and Clerk of the Company. Mr. Nixon joined the Company in December
1988 as Controller. In June 1989, Mr. Nixon became Assistant Treasurer; in
September 1990, he was elected Vice President, Finance and Administration; in
September 1991, he assumed his present position as Treasurer. In December
1993, Mr. Nixon was elected Chief Financial Officer of the Company. In
December 1994, Mr. Nixon was elected Executive Vice President and in March
1995, he was elected Clerk. Prior to his employment with the Company, from
1985 to 1988, Mr. Nixon served as a Senior Accountant at Gray, Gray and Gray,
a public accounting firm.
Fredric L. Sattler became an Executive Vice President of the Company in
January 1996. Prior to his employment with the Company, Mr. Sattler was
employed as Vice President of National Benefit Resources of Minneapolis,
Minnesota in 1995 and as Vice President of NovaCare of King of Prussia,
Pennsylvania from 1994 to 1995. From 1981 to 1994 Mr. Sattler held various
offices with Northwestern National Life Insurance Co. (now known as ReliaStar
Financial Corp.) and its affiliates, including Vice President of Health Care
Management (1987 to 1994) and President and Chief Executive Officer (1991 to
1994) of NWNL Health Management Corp., a health management organization (HMO)
management company, wholly-owned by Northwestern National Life Insurance Co.
Ophelia Galindo was elected the Corporate Vice President, Product Management
and Technical Development of the Company by the Board on March 30, 1995.
Formerly, Ms. Galindo was employed by CMI, beginning in February 1986 as a
senior consultant; in June 1994, Ms. Galindo was promoted by CMI to be its
Vice President, Disability Analysis.
Leslie Alexandre, Dr.P.H., was appointed a Class I Director in March 1995,
effective with the CMI/PRA Merger, and was elected a Class I Director by the
Company's stockholders in July 1995. Formerly, Dr. Alexandre served as a
director of CMI from 1993 to 1995. Since February 1995, Dr. Alexandre has been
the Vice President, Corporate Affairs for OncorMed, Inc., a provider of
genetic testing and information services for the early detection and
management of cancer. From 1992 to 1995, Dr. Alexandre was employed as
Government Affairs Representative, Health Policy, for EDS, Inc., an
information technology company and subsidiary of General Motors. Prior to
joining EDS in 1992, Dr. Alexandre was Senior Health Legislative Assistant for
United States Senator David Durenberger. From January 1990 until the death of
U.S. Senator John Heinz in April 1991, she served as Professional Staff on the
Senate Special Committee on Aging. Prior to 1990, Dr. Alexandre was an
independent health care consultant.
Stephen C. Caulfield was appointed a Class I Director by the Board effective
December 1994, and was elected a Class I Director by the Company's
stockholders in July 1995. Mr. Caulfield is a Managing Director of William M.
Mercer, Incorporated, a management consulting firm, where he has specialized
in health care issues since 1987. Mr. Caulfield has more than 30 years of
experience in the health care field, having previously been employed as a
faculty member and Assistant Dean of the Albert Einstein College of Medicine
in New York, as the Director of Health Affairs and Regional Operations for the
United Mine Workers Multi-Employer Trust, and as the President and Chief
Executive Officer of Government Research Corporation, a consulting firm
previously located in Washington, D.C. (subsequently acquired by Hill and
Knowlton).
Richard H. Egdahl, M.D. has been a director since 1985, and was classified a
Class II Director in 1995 effective with the CMI/PRA Merger. Dr. Egdahl is the
Alexander Graham Bell Professor of Health Care Entrepreneurship at Boston
University. He was director of the Boston University Medical Center and
academic vice president for health affairs at Boston University from 1973 to
July 1996. A surgeon by training, Dr. Egdahl is professor of surgery at Boston
University School of Medicine (chairman 1964-73), in addition to professor of
public health in the Boston University School of Public Health and professor
of management in the Boston University School of Management. He is a
University Professor at Boston University and established the Boston
4
<PAGE>
University Health Policy Institute in 1975 and is its director. Dr. Egdahl is
a trustee of the Pioneer Group of Mutual Funds, a director of HPR, Inc. (a
developer of health care software and database products), a Trustee of Boston
Medical Center and a member of the Institute of Medicine of the National
Academy of Sciences.
John Pappajohn was appointed a Class II Director in March 1995 effective
with the CMI/PRA Merger. Formerly, Mr. Pappajohn was a director of CMI from
its formation in 1990 to 1995; Mr. Pappajohn served on the Board of Directors
of Integrated Behavioral Health, a California corporation ("IBH"), from 1991
to the time of its acquisition by CMI in 1993. Since 1969, Mr. Pappajohn has
been the sole owner of Pappajohn Capital Resources, a venture capital fund,
and President of Equity Dynamics, Inc., a financial consulting firm in Des
Moines, Iowa. Mr. Pappajohn serves as a Director of the following public
companies: BioCryst Pharmaceuticals, Inc., Drug Screening Systems, Inc., Fuisz
Technologies Ltd., GalaGen, Inc., OncorMed, Inc., PACE Health Management
Systems, Inc., and United Systems Technologies, Inc.
Based solely on a review of Forms 3, 4 and 5 (and amendments thereto)
furnished to the Company pursuant to Rule 16a-3(e) under the Securities
Exchange Act of 1934 (the "Exchange Act") during and with respect to its most
recent fiscal year, as well as written representations furnished to the
Company by reporting persons with respect to the necessity of filing Form 5s,
all persons subject to Section 16 of the Exchange Act with respect to the
Company have filed on a timely basis all reports required by Section 16(a) of
the Exchange Act during the most recent fiscal year.
During 1995, there were nine meetings of the Board of Directors of the
Company. In 1995, each incumbent director attended at least 75% of the
aggregate of all meetings of the Board of Directors and of all meetings held
by all committees of the Board on which such director served during the period
that he or she served as a director.
The Board of Directors of the Company has a standing Audit Committee and a
standing Compensation Committee.
During January, February, and part of March, 1995, Barry M. Manuel, Dwight
B. Crane, and Charles W. Smith constituted the Audit Committee. In March 1995,
Richard Egdahl, Barry M. Manuel and John Pappajohn were elected as the members
of the Audit Committee. Dr. Manuel resigned as a Director in July 1995. The
Audit Committee met three times in 1995. The duties of the Audit Committee
include recommending the independent auditors to be selected; reviewing and
making a determination as to the independence of the auditors; reviewing and
approving any significant change in the scope of audit work; reviewing the
conduct and results of the audit by the independent auditors; reviewing
actions taken by or proposed by management as a result of recommendations made
by the independent auditors; and reviewing any memorandum prepared by the
independent auditors and referring any such memorandum to the Board of
Directors with the Committee's recommendations, if any, as to the appropriate
action to be taken.
During January, February, and part of March, 1995, Barry M. Manuel, John I.
Sandson, and Charles W. Smith were the members of the Compensation Committee.
In March 1995, Leslie Alexandre, Stephen C. Caulfield and John Pappajohn were
elected as the members of the Compensation Committee. The Compensation
Committee met five times in 1995. The duties of the Compensation Committee are
to review and make recommendations to the Board of Directors with respect to
outstanding or proposed employment agreements or arrangements, to review and
make recommendations to the Board of Directors with respect to any proposed
payment or grant by the Company for salaries, bonuses, incentive payments,
stock options, or any other remuneration to any officer or director of the
Company.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or accrued by the Company and its subsidiaries to each of its officers who was
either the chief executive officer, or an executive officer whose aggregate
salary and bonus exceeded $100,000 in the most recent fiscal year (the "Named
Executive Officers") during the fiscal years ending December 31, 1995, 1994
and 1993. Although only principal capacities are listed, the compensation
figures include all compensation received in any capacity, for services
rendered during the fiscal years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------ ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) COMPENSATION($)
- --------------------------- ---- --------- -------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
George C. Carpenter IV... 1995(1) 146,249 -- -- 95,000 --
Chairman of the Board of 1994(1) 112,028 -- 9,433(5) -- 1,541
Directors and Chief
Executive 1993(1) 94,000 -- 89,547(6) -- 35,044(4)
Officer
Craig C. Horton.......... 1995(1) 136,342 -- -- 95,000 --
Director, President and 1994(1) 108,821 -- 7,718(5) -- 156
Chief Operating Officer 1993(1) 94,000 -- -- -- 34,619(4)
William E. Nixon......... 1995 127,000 -- -- 56,750 --
Executive Vice
President, 1994 82,271 6,000 -- -- --
Chief Financial Officer, 1993 76,599 -- -- 5,750 --
and Treasurer
Alfred B. Lewis(2)....... 1995 31,250 -- -- -- 114,845(3)
Chairman and President 1994 119,503 -- -- -- --
1993 66,281 -- -- 50,000 --
</TABLE>
- --------
(1) Prior to the March 1995 merger involving the Company and Core Management,
Inc. (the "CMI/PRA Merger"), Mr. Carpenter and Mr. Horton were officers
and employees of Core Management, Inc. The compensation amounts for Mr.
Carpenter and Mr. Horton in this table for the periods prior to the
CMI/PRA Merger were paid by Core Management, Inc.
(2) Mr. Lewis joined the Company as its President on May 17, 1993 and became
Chairman of the Board of Directors on December 29, 1993. Mr. Lewis
resigned as a director and as Chairman of the Board effective March 24,
1995. Mr. Lewis' employment with the Company terminated as of March 27,
1995, although Mr. Lewis continued to receive severance payments pursuant
to his employment contract with the Company. Such severance payments
terminated March 26, 1996. The amounts appearing as compensation for
Mr. Lewis in fiscal 1995 include severance payments made by the Company.
(3) Mr. Lewis received severance payments of $114,845 in 1995 pursuant to his
employment contract with the Company.
(4) Includes $33,333 of compensation income charged (but not paid) to the
named executive officer as a result of a change in the accounting
treatment of certain loans made by the named executive officer to CMI or
its subsidiaries.
(5) Represents interest paid to the named executive officer with respect to
certain loans made by the named executive officer to CMI or its
subsidiaries.
(6) Represents relocation expenses incurred as well as additional amounts paid
to Mr. Carpenter to reimburse him for income taxes payable by him with
respect to such relocation expenses.
6
<PAGE>
OPTION GRANTS IN 1995
The following table presents information regarding 1995 grants of options to
purchase shares of Common Stock for each of the Named Executive Officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------
POTENTIAL
REALIZABLE VALUE
NUMBER OF % OF AT ASSUMED ANNUAL
SECURITIES TOTAL RATES OF STOCK
UNDERLYING OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE FOR OPTION TERM (3)
GRANTED EMPLOYEES IN PRICE EXPIRATION --------------------
NAME (#) FISCAL YEAR(1) ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- -------- ---------- ----- ----------
<S> <C> <C> <C> <C> <C> <C>
George C. Carpenter IV.. 95,000 14.1% $3.13 4/27/2000 82,152 181,535
Craig C. Horton......... 95,000 14.1% $3.13 4/27/2000 82,152 181,535
William E. Nixon........ 50,000 7.4% $3.13 4/27/2000 43,238 95,545
1,000(2) * $2.94 12/31/96 240 486
5,750(2) * $2.94 5/17/99 3,643 7,846
Alfred B. Lewis......... -- -- -- -- -- --
</TABLE>
- --------
(1) The Company granted a total of 673,684 options to its employees and
consultants in 1995 (including repricing of 18,250 options and excluding
option grants to non-employee directors). See "Compensation of Non-
Employee Directors" and "Certain Transactions."
(2) Repricing of existing options.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. These assumptions are not intended to forecast
future appreciation of the Company's stock price. The potential realizable
value computation does not take into account federal or state income tax
consequences of option exercises or sales of appreciated stock. This table
does not take into account any appreciation in the price of the Common
Stock to date.
* Less than one (1%) percent.
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR-END OPTION VALUES
The following table presents information regarding options exercised in 1995
and the value of options outstanding at December 31, 1995 for each of the
Named Executive Officers:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
YEAR END (#) YEAR END ($)(1)
------------- -----------------
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
George C. Carpenter IV.. 0 N/A 19,000/76,000 $102,030/$408,120
Craig C. Horton......... 0 N/A 19,000/76,000 $102,030/$408,120
William E. Nixon........ 0 N/A 28,600/28,650 $154,486/$154,544
Alfred B. Lewis......... 0 N/A 0/0
</TABLE>
- --------
(1) Based upon the closing price of $8.50 per share for the Company's Common
Stock as quoted by Nasdaq--National Market System on December 29, 1995.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
The Company's stockholders voted to amend the 1991 Stock Option Plan with
respect to the compensation of non-employee directors at the March 1995
Special Stockholders Meeting. Effective in March 1995, each non-
7
<PAGE>
employee director was granted options to purchase 19,500 shares of Common
Stock. The options vest quarterly, over three years (1,625 shares per
quarter), subject to continued service as a director. Effective in November
1995, the Company's Board of Directors voted to increase the number of shares
vesting quarterly over three years from 1,625 per quarter to 3,000 per
quarter. This increase is subject to stockholder approval. See "Amendments to
1991 Stock Option Plan," below.
Mr. Pappajohn and Dr. Egdahl also received options from the Company for
other services rendered in 1995. See "Certain Transactions," below.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company entered into an employment agreement with Alfred B. Lewis,
effective as of May 17, 1993, pursuant to which the Company agreed to employ
Mr. Lewis as the President of the Company. Under the terms of his employment
agreement, Mr. Lewis was entitled to receive compensation and fringe benefits
provided for thereunder for a period of one year should his employment be
terminated by the Company following any change of control of the Company. Mr.
Lewis' employment with the Company was terminated on March 27, 1995. Mr. Lewis
received severance compensation, including certain fringe benefits, from the
Company.
The Company entered into an employment agreement with William E. Nixon, the
Company's Executive Vice President and Chief Financial Officer, effective as
of November 19, 1993, which has an initial one year term and is automatically
renewed on an annual basis unless written notice of non-renewal is delivered
prior to the scheduled renewal date. Pursuant to the agreement, Mr. Nixon is
entitled to receive compensation and fringe benefits for a period of six
months if his employment is terminated without cause by the Company, and for a
period of nine months if his employment is terminated by the Company within
one year of any change of control of the Company.
REPRICING OF OPTIONS
In May 1995, following the March 1995 CMI/PRA Merger, the Compensation
Committee reviewed the status of the Company's outstanding stock option
agreements with non-director employees of the Company. Several employees had
options with exercise prices ranging from $7.34 to $15.24, which were well
above the then current fair market value of the Company's Common Stock as
quoted on the Nasdaq--National Market System ("Nasdaq--NMS"). In order to make
meaningful the incentive goals of the stock options, on May 25, 1995, the
exercise prices of the options for all non-director employees with exercise
prices above $7.00 were repriced to $2.94 to reflect the then fair market
value of the Company's stock as quoted on Nasdaq--NMS. Stock options for 6,750
shares of the Company's Common Stock held by William E. Nixon, an executive
officer of the Company, were repriced as a result of this action.
8
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of the Common Stock as of August 31, 1996, by (i) each person who is
known by the Company to own beneficially more than five percent of the Common
Stock; (ii) each director of the Company; (iii) each Named Executive Officer;
and (iv) all directors and executive officers of the Company as a group.
Unless otherwise indicated, the address of the persons listed below is in care
of CORE, INC., 18881 Von Karman Avenue, Suite 1750, Irvine, California 92715.
<TABLE>
<CAPTION>
SHARES
NAME BENEFICIALLY OWNED(1) PERCENT OWNED
---- --------------------- -------------
<S> <C> <C>
Fiduciary Trust Company International...... 545,500(2) 7.9%
Two World Trade Center
New York, N.Y. 10048
John Pappajohn............................. 471,969(3) 6.7%
Craig C. Horton............................ 437,264(4) 6.2%
George C. Carpenter IV..................... 401,595(5) 5.7%
Richard H. Egdahl, M.D..................... 151,826(6) 2.2%
Stephen C. Caulfield....................... 104,776(7) 1.5%
William E. Nixon........................... 81,441(8) 1.2%
Leslie Alexandre........................... 38,575(9) *
All directors and executive officers as a
group
(9 individuals)........................... 1,791,336(10) 23.2%
</TABLE>
- --------
*Less than one percent.
(1)Except as otherwise indicated, represents sole voting and investment
power.
(2) Based on Schedule 13G, dated March 14, 1996. Includes 379,500 shares with
shared voting power and 15,000 shares with shared disposition power.
(3) Includes 70,200 shares owned by Mr. Pappajohn's wife, 40,200 shares owned
by an entity owned by Mr. Pappajohn's wife (Mr. Pappajohn disclaims
beneficial ownership of such 110,400 shares); also includes 26,800 shares
issuable pursuant to a warrant held by Mr. Pappajohn and 178,575 shares
issuable to Mr. Pappajohn pursuant to options (15,000 of which remain
subject to future vesting).
(4) Includes 1,000 shares held by Mr. Horton as custodian for Mr. Horton's
son and 145,000 shares issuable to Mr. Horton pursuant to options (97,000
of which remain subject to future vesting).
(5) Includes 265,595 shares held by Mr. Carpenter and his wife as joint
tenants and 145,000 shares issuable to Mr. Carpenter pursuant to options
(97,000 of which remain subject to future vesting).
(6) Includes 63,075 shares issuable to Dr. Egdahl pursuant to options (15,000
of which remain subject to future vesting).
(7) Includes 15,000 shares owned by Mr. Caulfield's wife, 2,500 shares held
in a trust for the benefit of Mr. Caulfield's son (Mr. Caulfield
disclaims beneficial ownership of such 2,500 shares) and 72,275 shares
issuable to Mr. Caulfield pursuant to options (15,000 of which remain
subject to future vesting).
(8) Includes 81,250 shares issuable to Mr. Nixon pursuant to options (39,200
of which remain subject to future vesting).
(9) Includes 38,575 shares issuable to Dr. Alexandre pursuant to options
(15,000 of which remain subject to future vesting).
(10) Includes 844,550 shares issuable pursuant to a warrant and options
(370,000 of which remain subject to future vesting).
9
<PAGE>
CERTAIN TRANSACTIONS
In February 1994, John Pappajohn, formerly a director and shareholder of
Core Management, Inc., ("CMI") and a current director and stockholder of the
Company, provided a $200,000 letter of credit as additional collateral for
CMI's obligations for loans to CMI by Silicon Valley Bank. In August 1994, Mr.
Pappajohn provided an additional letter of credit in the amount of $250,000 as
further collateral for such loans. In May 1994, Mr. Pappajohn agreed, upon
CMI's written request, to contribute $300,000 to CMI in the form of an equity
contribution or a subordinated loan. Mr. Pappajohn's obligation for this
contribution terminated on March 24, 1995 (the effective date of the CMI/PRA
Merger). In connection with a $500,000 line of credit extended by the Company
to CMI pursuant to the CMI/PRA Merger, in December, 1994, the Company pledged
$210,000 as collateral to Silicon Valley Bank, which replaced the $250,000
letter of credit previously provided to Silicon Valley Bank by Mr. Pappajohn,
as described above. In exchange for these pledges and his financial commitment
to CMI, the Board of Directors of CMI granted Mr. Pappajohn a warrant to
purchase shares of common stock of CMI. Such warrant expires three years from
the date of the grant. In connection with the CMI/PRA Merger, the warrant was
converted to cover 26,800 shares of Common Stock at an exercise price of $3.36
per share.
Pursuant to a consulting arrangement between Mr. Pappajohn and the Company,
the Board of Directors granted Mr. Pappajohn an option to purchase 100,000
shares of Common Stock in April 1995. This option was vested 50% at the date
of grant, and became fully vested in April 1996, based upon Mr. Pappajohn's
provision of consulting services to the Company during such one-year period.
The option has a five year term and an exercise price of $3.13 per share (the
fair market value of the Common Stock as quoted on the Nasdaq National Market
System on the date of grant).
Prior to the CMI/PRA Merger, George Carpenter and Craig Horton loaned CMI a
total of $200,000, which was used as security for CMI's line of credit with
Silicon Valley Bank. The loans from Mr. Carpenter and Mr. Horton were made
pursuant to unsecured promissory notes which bore interest at a rate of 10%
per annum and were paid in full in April 1995.
In April 1995, Richard H. Egdahl, a director of the Company, was granted an
option for the purchase of 5,000 shares of the Company's common stock for
services to be rendered with respect to the Company's strategic planning
committee. The option has a five year term and an exercise price of $3.13 per
share (the fair market value of the Common Stock as quoted on the Nasdaq
National Market System on the date of grant).
In March 1996, Stephen Caulfield and John Pappajohn, directors of the
Company, were each granted an option to purchase 40,000 shares of the Common
Stock for consulting services. The options have a five year term and an
exercise price of $12.25 per share (the fair market value of the Common Stock
as quoted on the Nasdaq National Market System on the date of grant).
2. AMENDMENTS TO 1991 STOCK OPTION PLAN
In 1991, the Company implemented the 1991 Stock Option Plan (the "1991
Plan") to attract and retain outstanding individuals to serve as employees,
directors, consultants, and other functionaries of the Company and to provide
additional incentive to such individuals to promote the success of the
Company's business. Presently, the total number of shares of the Company's
Common Stock for which options may be granted under the 1991 Plan is 600,000.
In 1995, with stockholder approval, the Company revised the compensation
paid to non-employee directors by eliminating cash payments for board meetings
attended and replacing such payments with grants of formula-based options
under the 1991 Plan to purchase shares of Common Stock. Beginning March, 1995,
each non-employee director became entitled to options to purchase a total of
19,500 shares of Common Stock as compensation for serving as a director. These
options vest quarterly, over a three-year period (1,625 shares per
10
<PAGE>
quarter), subject to continued service as a director during each quarter.
Additional options will be granted under the 1991 Plan to each director on the
third anniversary of his or her initial option grant date, subject to the same
vesting and continued service qualifications.
The Board of Directors has adopted amendments to the 1991 Plan, subject to
approval by the stockholders, (a) to increase the aggregate number of shares
for which options may be granted under the 1991 Plan from 600,000 to 1,200,000
for previously granted options and to ensure that a sufficient number of shares
are available to allow the Company to continue to use option grants to pursue
the general purposes of the 1991 Plan, and (b) to change the three-year formula
pursuant to which non-employee directors are granted options under the 1991
Plan from 19,500 shares (1,625 shares per quarter) to 36,000 shares (3,000
shares per quarter) to continue to attract and retain outstanding individuals
as non-employee directors while, at the same time, minimizing the immediate
impact on the cash flow of the Company.
The affirmative vote of at least a majority of the shares of the Company's
Common Stock represented in person or by proxy at the meeting (provided a
quorum is present) is required for the approval of these amendments. In the
event the amendments are not approved by the Company's stockholders: (i)
options for 124,000 shares of the Company's Common Stock granted to the four
Named Executive Officers in March 1996 would be terminated, (ii) the options
for 49,500 shares of Common Stock granted to the four non-employee directors in
November, 1996 in connection with the proposed change in the non-employee
directors' grant formula would be terminated, and (iii) the options for
approximately 285,500 shares of the Company's Common Stock granted to
approximately 400 employees beginning in November 1995 would lose their
incentive stock option status and be deemed granted to such employees outside
of the 1991 Plan. In the event of the termination of such options and loss of
incentive stock option status, the Company reserves the right to compensate
those individuals for the termination of previously granted options or the loss
of incentive stock option status of such options.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE AMENDMENTS TO THE 1991 PLAN.
SUMMARY DESCRIPTION OF 1991 PLAN
General. The Company established its Stock Option Plan in 1991. The Plan has
previously been amended with stockholders approval to increase the number of
shares issuable under the 1991 Plan. 11,309 shares of Common Stock have been
issued pursuant to option exercises under the 1991 Plan. Options for a total of
1,037,127 shares are outstanding under the 1991 Plan. Accordingly, the Company
is seeking stockholder approval to increase the total number of shares for
which options may be granted under the 1991 Plan from 600,000 to 1,200,000
shares of the Common Stock of the Company.
The options granted under the 1991 Plan may be either (i) "Incentive Stock
Options" as described in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"); or (ii) non-qualified stock options, which are not
Incentive Stock Options. Only employees of the Company may be granted Incentive
Stock Options. Non-employee directors, employees, consultants and any other
person may be granted non-qualified stock options. Consistent with Section 422
of the Code, the 1991 Plan provides that the exercise price of Incentive Stock
Options shall equal or exceed the fair market value of the stock on the date of
grant. Incentive Stock Options granted pursuant to the 1991 Plan are not
transferable, other than by will or by the laws of descent and distribution,
and may only be exercised while the optionee is an employee of the Company or
during the three-month period following termination of employment; provided,
however, that if the termination is due to total and permanent disability, the
Incentive Stock Options may be exercised for a period of twelve months after
the termination. The 1991 Plan does not require that non-qualified stock
options be subject to the limitations on price and transferability which are
required of Incentive Stock Options. To date, however, all non-qualified
options issued pursuant to the 1991 Plan have had exercise prices equal to the
fair market value of the Common Stock on the date of grant and have included
the limitations on transferability required of Incentive Stock Options. The
Company expects to continue its practice of establishing the exercise price of
stock options at the fair market value of the underlying stock on the date of
grant. The 1991 Plan is scheduled to terminate in 2001.
11
<PAGE>
The Plan provides that non-employee directors of the Company receive grants
of stock options pursuant to a formula for their services as directors.
Effective March 1995, pursuant to such formula, each non-employee director was
granted 19,500 options to purchase Common Stock. The options vest quarterly,
over three years (1,625 shares per quarter), subject to continued service as a
director. Subject to stockholder approval, the formula was revised in November
1995 and the number of options vesting quarterly over three years was
increased from 1,625 per quarter to 3,000 per quarter. See "Executive
Compensation--Compensation of Non-Employee Directors," above.
Administration. The 1991 Plan is administered by the Board of Directors of
the Company which, subject to the limitations on Incentive Stock Options
discussed above, has authority to determine the optionees, the number of
shares covered by an option, the option exercise price, the term of the
option, the vesting schedule and other terms and conditions. The Board of
Directors may delegate administration of the Plan, including the grant of
options thereunder, to the Compensation Committee of the Board. The 1991 Plan
has been revised to conform with the new Section 16b-3 rules under the
Exchange Act, effective August 15, 1996.
Federal Income Tax Consequences. The federal income tax consequences of an
optionee's participation in the 1991 Plan are complex and subject to change.
The following discussion is only a summary of the general rules applicable to
stock options.
The tax consequences of a stock option under the 1991 Plan depend on whether
the stock option is an ISO or a non-qualified stock option ("NQSO"). An
optionee will not recognize income at the time of a grant or exercise of an
ISO and the Company may not deduct the related expense at those times.
However, for purposes of the alternative minimum tax, the difference between
the exercise price and the fair market value of the stock will be included in
alternative minimum tax income. The optionee has a taxable event only upon a
later sale or disposition of the stock acquired pursuant to the exercise of
the ISO. The tax treatment of the disposition of the stock will depend on when
the optionee disposes of the stock. An optionee who sells stock acquired
pursuant to the exercise of an ISO within one year from the date of exercise
or within two years of the date of grant will recognize capital gain on the
sale of the stock and ordinary income equal to the difference between the
ISO's exercise price and the fair market value of the stock. An optionee who
disposes of stock after a date that is both two years after the grant and one
year after its exercise will recognize capital gain equal to the difference
between the amount received on disposition and the adjusted basis in the
stock.
A different set of rules govern NQSOs. There are no federal income tax
consequences to the optionee or the Company upon the grant of NQSOs with
exercise prices equal to fair market value on the date of grant. Upon exercise
of a NQSO, the optionee will recognize ordinary income in the amount by which
the fair market value of the stock option exceeds the exercise price of the
stock option. The Company is allowed a deduction for federal income tax
purposes equal to the amount of ordinary income recognized by the optionee at
the time of exercise of NQSOs. The optionee's holding period for purposes of
determining whether any subsequently realized gain or loss will be long-term
or short-term will begin at the time the optionee recognizes ordinary income.
The 1986 Stock Option Plan. The Company previously maintained the 1986 Stock
Option Plan, which was similar to the 1991 Stock Option Plan in all material
respects, except the 1986 Plan covered 137,500 shares of the Company's Common
Stock. The 1986 Stock Option Plan terminated in January 1996, and no further
options may be granted under this 1986 Plan; however, previously granted
options will remain outstanding. As of August 31, 1996, options for a total of
500 shares of Common Stock were outstanding under the 1986 Plan. 129,730
shares of Company Common Stock have been purchased pursuant to exercises of
options under the 1986 Plan.
Other Options. In connection with the CMI/PRA Merger in March 1995, options
previously granted by Core Management, Inc. were assumed by the Company and
converted into options for the purchase of 159,988 shares of Company Common
Stock. As of August 31, 1996, 128,108 of such options remained outstanding.
Additionally, from time to time, the Company has granted options outside of
any plan. As of August 31, 1996, a total of 313,548 options are outstanding
which were granted outside of any option plan.
12
<PAGE>
1991 PLAN BENEFITS
It is not possible to identify the future optionees who will receive stock
options under the 1991 Plan. The following table provides information with
respect to outstanding options as of August 31, 1996 under the 1991 Plan. Also,
see "Principal Stockholders," above, for stock and options held by executive
officers and directors.
<TABLE>
<CAPTION>
NUMBER OF OPTIONS
NAME AND PRINCIPAL POSITION UNDER 1991 PLAN
--------------------------- -----------------
<S> <C>
George C. Carpenter IV...................................... 145,000(1)
Chairman of the Board of Directors and Chief Executive
Officer
Craig C. Horton............................................. 145,000(1)
Director, President and Chief Operating Officer
William E. Nixon............................................ 80,750(2)
Executive Vice President, Chief Financial Officer and
Treasurer
Alfred B. Lewis(3).......................................... 0
Formerly Chairman and President
Leslie Alexandre............................................ 31,875(4)
Director
Stephen C. Caulfield........................................ 32,275(4)
Director
Richard H. Egdahl, M.D. .................................... 42,075(4)
Director
John Pappajohn.............................................. 31,875(4)
Director
Executive Officers as a Group............................... 469,750(5)
Directors as a Group
(excluding Executive Officers)............................. 138,100(6)
Employees as a Group
(excluding Executive Officers)............................. 369,902(7)
</TABLE>
- --------
(1) Includes options for 50,000 shares of the Company's Common Stock granted in
March 1996 which are subject to stockholder approval of the proposed
amendments to the 1991 Plan.
(2) Includes options for 24,000 shares of the Company's Common Stock granted in
March 1996 which are subject to stockholder approval of the proposed
amendments to the 1991 Plan.
(3) Mr. Lewis resigned as Chairman of the Board, Director and President
effective March 24, 1995.
(4) Includes options for 12,375 shares of the Company's Common Stock granted in
November 1995 in connection with the change in the formula grants to non-
employee directors which is subject to stockholder approval of the proposed
amendments to the 1991 Plan.
(5) Includes options for 124,000 shares of the Company's Common Stock granted
in March 1996 which are subject to stockholder approval of the proposed
amendments to the 1991 Plan.
(6) Includes options for 49,500 shares of the Company's Common Stock granted in
November 1995 in connection with the change in the formula grants to non-
employee directors which is subject to stockholder approval of the proposed
amendments to the 1991 Plan.
(7) Includes options for 124,000 shares of the Company's Common Stock granted
in November and December 1995 and March, April and August 1996 which are
subject to stockholder approval of the proposed amendments to the 1991
Plan.
13
<PAGE>
3. AMENDMENT TO ARTICLES OF ORGANIZATION TO INCREASE AUTHORIZED COMMON STOCK
The Company's Board has declared it to be advisable and has directed that
there be submitted to the stockholders of the Company a proposal to amend
Article 3 of the Company's Articles of Organization to effect an increase in
the number of authorized shares of Common Stock from 10,000,000 to 30,000,000
shares. In addition to the authorized shares of Common Stock, the Company's
Articles of Organization currently authorize the issuance of 500,000 shares of
Preferred Stock, in such series as may be designated by the Board of Directors.
No shares of Preferred Stock are outstanding.
As of the close of business on September 9, 1996, 7,121,588 shares of Common
Stock were issued and outstanding and 1,479,283 shares of Common Stock were
issuable under options and warrants.
If the amendment is approved, the increased number of authorized shares of
Common Stock will be available for issuance from time to time for such purposes
and consideration as the Board of Directors may approve, and no further vote of
stockholders of the Company will be required for such issuance, except as
provided under Massachusetts law, the rules of any national securities exchange
on which the Company's Common Stock is listed at such time or the rules of
NASDAQ, if applicable. The availability of additional shares of Common Stock
for issue without the delay and expense of obtaining the approval of
stockholders at a special meeting will afford the Company greater flexibility
in acting upon proposed transactions or financings. The Company currently has
no plans or arrangements with respect to any specific transaction or financing;
however, from time to time the Company may explore various acquisition
opportunities, and the Board of Directors believes that the availability of
additional Common Stock will afford the Company increased flexibility should
appropriate opportunities arise. There are no rights of appraisal or similar
rights of dissenters with respect to the proposal to increase the authorized
number of shares of Common Stock. Holders of shares of Common Stock are not
entitled to preemptive rights.
The additional shares of Common Stock for which authorization is sought would
be identical to the shares of Common Stock now authorized.
Approval of the amendment to the Articles of Organization concerning an
increase in the number of authorized shares of common stock requires the
affirmative vote of the holders of a majority of the outstanding shares of CORE
Common Stock entitled to vote. Accordingly, for the purpose of the vote
concerning the amendment to the Articles of Organization only, the failure of
any CORE stockholder to be present or represented by proxy at the CORE
Stockholders Meeting or an abstention by such stockholder or a broker non-vote
will have the same effect as if that stockholder (or broker) were to vote
against the proposed amendment. In the event that the amendment to increase the
number of authorized shares of Common Stock from 10,000,000 to 30,000,000 is
not approved, there will be no increase in the number of authorized shares of
Common Stock.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE AMENDMENT TO THE ARTICLES OF ORGANIZATION.
14
<PAGE>
ANNUAL REPORT
A copy of the Company's 1995 Annual Report accompanies this Proxy Statement,
but does not constitute part of the proxy solicitation materials.
ANY PERSON FROM WHOM PROXIES FOR THIS MEETING ARE SOLICITED MAY OBTAIN FROM
THE COMPANY, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995,
INCLUDING THE FINANCIAL STATEMENTS THEREIN AND THE RELATED SCHEDULES, BY
WRITTEN REQUEST ADDRESSED TO WILLIAM E. NIXON, TREASURER, CORE, INC., 18881
VON KARMAN AVENUE, SUITE 1750, IRVINE, CALIFORNIA 92715. ANY SUCH REQUEST FROM
A BENEFICIAL OWNER OF STOCK NOT REGISTERED IN HIS OR HER NAME MUST CONFIRM
THAT HE OR SHE WAS A BENEFICIAL OWNER OF SUCH STOCK ON SEPTEMBER 9, 1996.
RELATIONSHIP WITH CERTIFIED PUBLIC ACCOUNTANTS
The accounting firm of Ernst & Young served as the Company's independent
auditors for 1995. A representative of Ernst & Young is expected to be present
at the stockholders' meeting with the opportunity to make a statement and to
respond to appropriate questions from stockholders. The Board of Directors of
the Company has requested that the Audit Committee recommend an accounting
firm to serve as the Company's independent auditors for 1996.
During the Company's three most recent fiscal years, there were no
disagreements with Ernst & Young on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure
which if not resolved to the satisfaction of Ernst & Young would have caused
the firm to make a reference to the subject matter of the disagreement in
connection with its report.
STOCKHOLDER PROPOSALS
Proposals of security holders intended to be presented at the next Annual
Meeting of Stockholders must be received by the Company at CORE, INC., 18881
Von Karman Avenue, Suite 1750, Irvine, California 92715 on or before December
13, 1996.
OTHER BUSINESS
It is not anticipated that any business except that described in this Proxy
Statement will be brought before the meeting. Management is not aware of any
matters proposed to be presented to the meeting by any other person. However,
if any other business should properly come before the meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the proxy
in accordance with their best judgment on such business.
15
<PAGE>
PROXY
PROXY
CORE, INC.
Special Meeting in lieu of Annual Meeting of Stockholders
October 21, 1996
The undersigned hereby appoints George C. Carpenter IV and Craig C. Horton or
any one or more of them as proxy or proxies of the undersigned with full power
of substitution, to vote at the Special Meeting in lieu of Annual Meeting of
Stockholders of CORE, INC., to be held on Monday, October 21, 1996, at 11:00
A.M. local time, at the Hyatt Regency, 17900 Jamboree Boulevard, Irvine,
California, and at any and all adjournments thereof, according to the number of
votes that the undersigned would be entitled to vote and with all powers the
undersigned would possess if personally present at said meeting. The following
purposes for which this proxy may be exercised are set forth in the Notice of
the Special Meeting in lieu of Annual Meeting of Stockholders and are more fully
set forth in the Proxy Statement.
The undersigned hereby ratifies and confirms all that said proxy or proxies may
do by virtue hereof. The proxies are authorized to vote in their discretion
with respect to matters not known or determined at the date of the Proxy
Statement. A majority of said proxies as shall be present and acting at the
meeting shall have or may exercise all of the powers of proxies hereunder, or if
only one be present and acting, then that one shall have and may exercise all of
said powers. Receipt of the Notice of the Special Meeting and Proxy Statement
is hereby acknowledged.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE ON THE REVERSE. IN THE ABSENCE OF SPECIFICATIONS, THIS
PROXY WILL BE VOTED "FOR" THE NOMINEES NAMED HEREIN AND "FOR" PROPOSAL NUMBERS
2, 3, AND 4.
IMPORTANT PLEASE DATE, SIGN, AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
________________________________________ _________________________________
________________________________________ _________________________________
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
1.) The proposal to elect the following For held Except
nominees as Class II Directors: [_] [_] [_]
Richard H. Egdahl, M.D. and John Pappajohn
If you do not wish your shares voted "FOR" a particular nominee, mark the "For
All Except" box and strike a line through the nominee(s) name in the list above.
Your shares will be voted for the remaining nominees.
RECORD DATE SHARES:
- ------------------------------------------------
REGISTRATION
- ------------------------------------------------
---------------------
Please be sure to sign and date this Proxy. Date
- ---------------------------------------------------------------------
Shareholder sign here_________________Co-owner sign here_____________
2.) To approve amendments to the Company's For Against Abstain
1991 Stock Option Plan to increase
the number of shares issuable under the [_] [_] [_]
Plan from 600,000 to 1,200,000 and
to change the formula pursuant to which
non-employee directors of the Company
are granted options Under the Plan.
3.) To approve the proposed amendment to For Against Abstain
Article 3 of the Company's Restated
Articles of Organization to increase the [_] [_] [_]
number of authorized shares of common
stock, par value $0.10 per share, from
10,000,000 to 30,000,000; and
4.) In their discretion, the proxies are For Against Abstain
authorized to vote upon any other
business that may properly come before [_] [_] [_]
the meeting.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH CARD DETACH CARD
CORE, INC.
Dear Stockholder:
Please take note of the important information enclosed with this Proxy Ballot.
There are a number of issues related to the management and operation of your
Company that require your immediate attention and approval. These are discussed
in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Special Meeting in lieu of Annual
Meeting of Stockholders, October 21, 1996
Thank you in advance for your prompt consideration of these matters.
Sincerely,
CORE, INC.
