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. )
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|_| Preliminary Proxy Statement
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|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
CORE, 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)(4) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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|_| 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
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the Form or Schedule and the date of its filing.
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<PAGE>
[LOGO]
CORE
CORE, INC.
18881 Von Karman Avenue, Suite 1750
Irvine, California 92612
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NOTICE OF A SPECIAL MEETING IN LIEU OF THE
ANNUAL MEETING OF STOCKHOLDERS
July 27, 2000
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A Special Meeting in lieu of the Annual Meeting of Stockholders of CORE,
INC. ("CORE") will be held at 18881 Von Karman Avenue, Irvine, California on
Thursday, July 27, 2000, at 3:00 P.M., local time, for the following purposes:
1. To elect two Class III Directors to the Board of Directors of CORE
to serve for a three year term until the 2003 annual meeting of
stockholders;
2. To approve an amendment to CORE's 1997 Stock Option Plan to increase
the number of shares of CORE Common Stock issuable under the Plan
from 950,000 to 1,700,000; and
3. 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 June 8, 2000, will be entitled to notice of
and to vote at the meeting.
By order of the Board of Directors,
William E. Nixon,
Clerk
Irvine, California
June 21, 2000
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>
[LOGO]
CORE
CORE, INC.
18881 Von Karman Avenue, Suite 1750
Irvine, California 92612
---------------
PROXY STATEMENT
---------------
PROXY SOLICITATION AND EXPENSE
The accompanying proxy is solicited by the Board of Directors of CORE,
INC. ("CORE"), for use at a Special Meeting in lieu of the Annual Meeting of
Stockholders to be held on Thursday, July 27, 2000, at 3:00 P.M., local time, at
18881 Von Karman Avenue, 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 CORE, 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 June 22,
2000.
The expense of soliciting proxies in the accompanying form will be borne
by CORE. CORE has engaged Corporate Investor Communications, Inc. to assist in
the solicitation of proxies from stockholders, at a fee of $5,000. In addition,
employees or agents of CORE may make some solicitations by mail, telephone or
personal interview.
OUTSTANDING VOTING SECURITIES
On June 8, 2000, there were 9,089,064 shares of CORE's Common Stock, par
value $0.10 per share ("Common Stock") outstanding, each of which is entitled to
one vote. Only holders of record at the close of business on June 8, 2000 (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 will be counted toward determination
of a quorum. With respect to the matters to be acted on at the meeting,
abstentions and broker non-votes will neither count for nor against the proposal
to be voted upon.
1
<PAGE>
1. ELECTION OF CLASS III DIRECTORS
Shares represented by the enclosed proxy will, unless otherwise directed,
be voted to elect the nominees listed below to serve as Class III Directors for
a three year term until the 2003 annual meeting of stockholders. 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.
Name Age Director Since
---- --- --------------
George C. Carpenter IV 42 1995
Craig C. Horton 45 1995
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
III Directors.
Directors and Executive Officers of CORE
The following table sets forth certain information with respect to the
directors and executive officers of CORE.
Name Age Position
---- --- --------
George C. Carpenter IV 42 Chairman of the Board of Directors and Chief
Executive Officer
Craig C. Horton 45 Director, President, Chief Operating Officer
and General Manager, WorkAbility
William E. Nixon 39 Executive Vice President, Chief Financial
Officer, Treasurer and Clerk
Michael E. Darkoch 56 Senior Vice President, Client Development
R. Gary Dolenga 55 President, SSDC Corp.
James T. Fallon 36 Managing Director, Disability Reinsurance
Management Services, Inc.
Stuart T. Greer 40 General Manager, Peer Review Analysis
Lisa O. Hansen 37 Managing Director, Disability Reinsurance
Management Services, Inc.
Michael D. Lachance 45 Managing Director, Disability Reinsurance
Management Services, Inc.
Leslie Alexandre, Dr.P.H. (1) 42 Director
Stephen C. Caulfield (2) 59 Director
David M. Tourangeau (1) (2) 61 Director
Richard J. Towle (2) 47 Director
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
2
<PAGE>
CORE'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 the year 2001; the term
of the Class II Directors (presently Mr. Tourangeau and Mr. Towle) expires in
the year 2002; and the term of the Class III Directors (presently Mr. Carpenter
and Mr. Horton) expires in the year 2000. 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 CORE are elected by the Board of Directors on an
annual basis and serve at the discretion of the Board of Directors.
George C. Carpenter IV was re-elected a Class III Director at the June
1997 Annual Stockholders Meeting, and was elected the Chairman of the Board of
Directors and Chief Executive Officer of CORE effective with CORE's March 24,
1995 merger involving Core Management, Inc. Mr. Carpenter served as the Chief
Executive Officer and a Director of Core Management, Inc., a Delaware
corporation ("CMI") subsequently merged into CORE, since its formation in 1990.
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 re-elected a Class III Director at the June 1997
Annual Stockholders Meeting and was elected the President and Chief Operating
Officer of CORE on March 30, 1995. Mr. Horton was appointed General Manager,
WorkAbility in October 1999. Mr. Horton served as the President and a Director
of CMI from its formation in 1990. From 1988 to 1990, Mr. Horton was 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 CORE. Mr. Nixon joined CORE in December 1988 as
Controller. In September 1990, Mr. Nixon was elected Vice President, Finance and
Administration and in September 1991, he assumed the position of Treasurer. In
December 1993, Mr. Nixon was elected Chief Financial Officer of CORE. In
December 1994, Mr. Nixon was elected Executive Vice President and in March 1995,
he was elected Clerk. Prior to his employment with CORE, from 1985 to 1988, Mr.
Nixon served as a Senior Accountant at Gray, Gray and Gray, a public accounting
firm.
Michael E. Darkoch joined CORE in September 1997 and was elected Senior
Vice President, Client Development in December 1997. Mr. Darkoch came to CORE
from Caremark International, where he held senior management positions,
including Vice President of Corporate Account Management and Vice President of
Business Development. His background includes account management process design
and sales development. Mr. Darkoch has over 24 years of experience in the health
care industry.
R. Gary Dolenga joined CORE in June 1997 upon CORE's acquisition of
certain of the assets of Social Security Disability Consultants and Disability
Services, Inc. (collectively, "SSDC"). SSDC was formed by Mr. Dolenga in 1979.
For the 18 years prior to the acquisition of SSDC by CORE, Mr. Dolenga served as
the Managing Director and President of SSDC where he was responsible for the
administration, professional service and sales of the social security disability
benefits advocacy and Medicare coordination of benefits components of SSDC.
James T. Fallon joined CORE with Ms. Hansen and Mr. Lachance in September
1998 upon CORE's acquisition of Disability Reinsurance Management Services, Inc.
("Disability RMS"). Mr. Fallon was a founder of Disability RMS and has served as
a Managing Director of Disability RMS since its establishment in 1993.
Previously, from 1985 through 1993, Mr. Fallon held various sales and marketing
management positions with UNUM Life Insurance Company of America ("UNUM") and
UNUM's reinsurance division (later Duncanson & Holt).
3
<PAGE>
Stuart T. Greer is the General Manager of Peer Review Analysis. Mr. Greer
joined CORE as a Manager, Physician Review Services in November 1994. Prior to
joining CORE, Mr. Greer served as Director of Operations at Independent Medical
Examinations, Inc. Mr. Greer has over fourteen years of experience in medical
specialty consultation management and has held several positions with CORE,
including Director, Physician Review Services; Director, Peer Review Analysis;
and Managing Director, Peer Review Analysis. Mr. Greer was appointed General
Manager, Peer Review Analysis in October 1999.
Lisa O. Hansen joined CORE with Mr. Fallon and Mr. Lachance in September
1998 upon CORE's acquisition of Disability RMS. Ms. Hansen was a founder of
Disability RMS and has served as a Managing Director of Disability RMS since its
establishment in 1993. Ms. Hansen began her insurance career in Paul Revere Life
Insurance Company's sales force in 1984, then joined UNUM in 1985 where she held
several sales and marketing management positions within UNUM's reinsurance
division (later Duncanson & Holt.)
Michael D. Lachance joined CORE with Mr. Fallon and Ms. Hansen in
September 1998 upon CORE's acquisition of Disability RMS. Mr. Lachance was a
founder of Disability RMS and has served as a Managing Director of Disability
RMS since its establishment in 1993. In 1983, Mr. Lachance joined UNUM where he
spent over eleven years in a variety of Individual Disability and Group
Reinsurance management positions. Mr. Lachance earned his Fellow Society of
Actuaries ("FSA") designation in 1986.
Leslie Alexandre, Dr.P.H. has been a Director of CORE since 1995, and was
re-elected a Class I Director by CORE's stockholders in July 1998. Dr. Alexandre
served as a Director of CMI from 1993 until 1995. Dr. Alexandre has been
employed by the National Institutes of Health, Bethesda, Maryland, since June
1999. From August 1998 to May 1999, Dr. Alexandre was an independent health care
consultant. From 1995 to July 1998, Dr. Alexandre was Vice President, Corporate
Affairs and Marketing for Oncormed, Inc., a genomics services company. From 1992
to 1995, Dr. Alexandre was employed as Government Affairs Representative, Health
Policy for EDS, Inc., an information technology company. 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 has been a Director since 1994, and was re-elected a
Class I Director by CORE's stockholders in July 1998. Mr. Caulfield is Chairman
of The Chickering Group, a student health insurance company, where he has been
employed since February 1997. Prior to this position, Mr. Caulfield was a
Worldwide Partner of William M. Mercer, Incorporated, a management consulting
firm, where he had 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).
David M. Tourangeau was appointed a Class II Director in September 1998
and was re-elected to this position by CORE's stockholders in July 1999. Mr.
Tourangeau is retired from UNUM Corporation, where he served as an executive for
over 28 years, providing leadership as the Chief Investment Officer, and
subsequently as Senior Vice President of Group Pension and Senior Vice President
of Reinsurance Operations. Active in many non-profit organizations, Mr.
Tourangeau currently serves on the executive committee and board of directors of
Sweetser Children's Services.
Richard J. Towle was appointed a Class II Director in September 1998 and
was re-elected to this position by CORE's stockholders in July 1999. Mr. Towle
is Senior Vice President of Boston University and serves as Chief Business
Officer for the Boston University Medical Center, including operational
management of Financial and Business Affairs, Facilities Management and
Information Technology. Mr. Towle also oversees the operations of several
University-wide departments, including the offices of Risk Management,
Personnel, Equal Opportunity, Family Resources, Campus Planning and Student
Health Services. Mr. Towle is a member of both the National Association of
College and University Business Officers and the Greater Boston Chamber of
Commerce Development and Transportation Committee.
4
<PAGE>
During 1999, there were seven meetings of the Board of Directors of CORE.
In 1999, each incumbent director attended at least 75% of the aggregate of all
meetings of the Board of Directors and all meetings held by all committees of
the Board on which such director served.
The Board of Directors of CORE has standing Audit and Compensation
Committees.
The members of the Audit Committee are Stephen C. Caulfield, David M.
Tourangeau and Richard J. Towle. The Audit Committee met three times in 1999.
The Audit Committee's primary function is to assist the Board of Directors in
fulfilling its oversight responsibilities with respect to (i) the annual
financial information to be provided to shareholders and the Securities and
Exchange Commission; (ii) the system of internal financial and accounting
controls that management has established; and (iii) the external audit process.
The duties of the Audit Committee include: reviewing with management and
independent accountants CORE's accounting and financial reporting controls and
significant accounting and reporting principles, practices and procedures
applied by CORE in preparing its financial statements; reviewing the scope of
the annual audit; inquiring as to the independence of the independent
accountants; reviewing the annual financial statements, the results of the
audit, and significant changes to the audit plans, if any; discussing and
responding to any significant recommendations that the independent accountants
may have; recommending to the Board of Directors the independent accountants to
be retained by CORE.
In 1999, the Compensation Committee of the Board of Directors consisted of
Leslie Alexandre, Richard H. Egdahl, M.D. and David Tourangeau for the period
January 1, 1999 through July 16, 1999 and Leslie Alexandre and David Tourangeau
beginning July 17, 1999. None of our executive officers serves as a member of
the Board of Directors or compensation committee of any entity that has one or
more of its executive officers serving as a member of our Board of Directors or
Compensation Committee. The Compensation Committee met four times in 1999. 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 CORE for salaries,
bonuses, incentive payments, stock options, or any other remuneration to any
officer or director of CORE. The Compensation Committee also serves as the
administrator of CORE's 1991 and 1997 Stock Option Plans under which grants of
stock options are made to employees and others.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of Forms 3, 4, and 5 (and amendments thereto)
furnished to CORE 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 CORE by reporting
persons, all persons subject to Section 16 of the Exchange Act with respect to
CORE have filed on a timely basis all reports required by Section 16(a) of the
Exchange Act during the most recent fiscal year.
5
<PAGE>
Executive Compensation
The following table sets forth information for 1999, 1998 and 1997
concerning the compensation paid or accrued by CORE and its subsidiaries to the
chief executive officer and certain other executive officers whose aggregate
salary and bonus exceeded $100,000 in the most recent fiscal year (the "Named
Executive Officers"). Although only principal capacities are listed, the
compensation figures include all compensation received in any capacity, for
services rendered during the fiscal years indicated.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
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Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Options (#) Compensation($)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George C. Carpenter IV 1999 223,775 2,500 (1)
Chairman of the Board of 1998 184,834 25,000 2,485 (1)
Directors and Chief Executive 1997 179,146 50,000 2,375 (1)
Officer
Craig C. Horton 1999 213,859 2,017 (1)
Director, President, Chief 1998 174,833 25,000
Operating Officer and General 1997 169,127 50,000
Manager, WorkAbility
William E. Nixon 1999 190,765 20,769
Executive Vice President, 1998 147,486 20,600 20,000
Chief Financial Officer, and 1997 143,127 25,000
Treasurer
James T. Fallon 1999 200,003 6,667 4,800 (1)
Managing Director, Disability 240 (2)
Reinsurance Management 9,218 (3)
Services, Inc. 1998 66,614 (4) 930 (1)
262 (2)
Lisa O. Hansen 1999 200,003 6,667 4,800 (1)
Managing Director, Disability 240 (2)
Reinsurance Management 9,218 (3)
Services, Inc. 1998 66,614 (4) 930 (1)
262 (2)
Michael D. Lachance 1999 200,003 6,667 4,800 (1)
Managing Director, Disability 532 (2)
Reinsurance Management 9,218 (3)
Services, Inc. 1998 66,614 (4) 871 (1)
408 (2)
</TABLE>
(1) Amount represents employer matching contributions made to CORE's 401(k)
plans on behalf of the named executive officer.
(2) Amount represents payments for life insurance premiums made on behalf of
the named executive officer.
(3) Amount represents imputed interest paid to the named executive officer.
(4) Mr. Fallon, Ms. Hansen and Mr. Lachance, the founders of Disability RMS,
joined CORE in September 1998 upon CORE's acquisition of Disability RMS.
See "Certain Transactions," below.
6
<PAGE>
The following two stock option tables summarize option grants and
exercises during 1999 for the Named Executive Officers, and the values of
options granted during 1999 and held by such persons at December 31, 1999.
Option Grants in 1999
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------
Potential Realizable Value
Number of % of Total at Assumed Annual Rates
Securities Options of Stock Price Appreciation
Underlying Granted to Exercise For Option Term (2)
Options Employees in Price Expiration ---------------------------------
Name Granted (#) Fiscal Year (1) ($/sh) Date 5% ($) 10% ($)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James T. Fallon 6,667 1.12% $8.063 4/20/2004 $14,852 $32,819
Lisa O. Hansen 6,667 1.12% $8.063 4/20/2004 $14,852 $32,819
Michael D. Lachance 6,667 1.12% $8.063 4/20/2004 $14,852 $32,819
</TABLE>
(1) The Company granted a total of 596,683 options to its employees and
consultants in 1999.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. These assumptions are not intended to forecast
future appreciation of CORE's stock price. The potential realizable value
computation does not take into account federal or state income tax
consequences of option exercises or sales of appreciated stock. This table
does not take into account any appreciation in the price of the Common
Stock to date.
Aggregated Option Exercises in 1999 and Year-End Option Values
The following table presents information regarding options exercised in
1999 and the value of options outstanding at December 31, 1999 for each of the
Named Executive Officers:
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at Year End (#) Year-End ($)(1)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
George C. Carpenter IV 95,000 $558,125 80,000/45,000 $156,500/$67,825
Craig C. Horton 95,000 $611,610 80,000/45,000 $156,500/$67,825
William E. Nixon 5,750 $29,095 88,200/26,800 $378,032/$43,658
James T. Fallon 0 N/A 1,333/5,334 $ 2,000/$8,001
Lisa O. Hansen 0 N/A 1,333/5,334 $ 2,000/$8,001
Michael D. Lachance 0 N/A 1,333/5,334 $ 2,000/$8,001
</TABLE>
(1) Based upon the closing price of $9.563 per share for CORE's Common Stock
as quoted by the Nasdaq National Market on December 31, 1999.
7
<PAGE>
Report of the Compensation Committee on Executive Compensation
The Compensation Committee has provided the following report:
The Compensation Committee of CORE, INC. is responsible for implementing
CORE's philosophy of structuring all executive compensation packages to enable
CORE to attract and retain qualified executives and to motivate such individuals
to maximize their efforts on behalf of CORE. The Compensation Committee, with
input from CORE's Chief Executive Officer, reviews and establishes the
compensation of CORE's executive officers. The Compensation Committee also
serves as administrator of CORE's 1991 and 1997 Stock Option Plans, under which
grants of stock options have been made to executive officers and others.
The Compensation Committee establishes compensation packages for CORE's
executive officers by following a policy of basing such executive's compensation
upon the executive's individual performance and contribution to the development
and financial success of CORE. In addition, when determining the baseline for
executives' compensation packages, the Compensation Committee considers the
compensation packages provided by companies within its industry which are of
comparable size to CORE and by companies outside the industry with which CORE
competes for executive talent.
In order to have a portion of each executive officer's compensation
contingent upon CORE's performance, executive officers' compensation packages
include grants of stock options to purchase shares of CORE's common stock. Stock
option grants are designed to align the interest of each executive officer with
CORE's stockholders and to provide each executive officer with a significant
incentive to manage CORE from the perspective of an owner with an equity stake
in CORE. When issued, stock option grants to executive officers have exercise
prices equal to the fair market value at grant and vest in installments over a
period of years, conditional upon the executive officer's continued service with
CORE. Therefore, the stock options will provide a value to the executive officer
only if the executive officer remains in service with CORE during the vesting
period.
In 1999 the Compensation Committee finalized the form of employment
agreement with CORE's executive officers. Effective July 15, 1999, employment
agreements were entered into between CORE and several of its executive officers,
with terms through December 31, 2000 (subject to automatic renewal).
Salaries. In establishing base salaries for 1999 for CORE's executive
officers, the Compensation Committee considered the following factors:
experience, personal performance, development and implementation of short term
and long term planning objectives, the salary levels for similar positions
within the industry in which CORE competes and in other industries, and
company-wide salary compatibility. The weight given to each of these factors
differed from individual to individual, as the Compensation Committee deemed
appropriate.
Bonuses. In 1999 the Compensation Committee retained Stern & Associates, a
human resources consulting firm, to assist CORE in establishing compensation for
its executive officers, including salary and bonus eligibility. In late 1999,
the Compensation Committee established an executive incentive plan which became
effective in 2000 and provides officers the opportunity to receive cash bonuses
of up to 25% to 40% of annual salary based on financial and performance
standards. Pursuant to the plan, quarterly cash bonuses can be earned by
executives based on achievement of objective quarterly financial targets for
each line of business (or, for the entire corporation in the case of the Chief
Executive Officer and the Chief Financial Officer). Additionally, the plan
provides for potential annual bonuses based on certain non-financial goals and
results as well as CORE's overall financial performance. CORE may also award
discretionary bonuses under extraordinary circumstances.
William E. Nixon, Executive Vice President, Chief Executive Officer and
Treasurer received a cash bonus of $20,769 for 1999 services. In February 2000,
the Compensation Committee awarded cash bonuses to the following executive
officers: Craig Horton, President, Chief Operating Officer and General Manager,
WorkAbility ($10,000), William E. Nixon, Executive Vice President, Chief
Financial Officer and Treasurer ($10,000), James T. Fallon, Managing Director,
Disability RMS ($20,000), Lisa O. Hansen, Managing Director, Disability RMS
($20,000), and Michael D. Lachance, Managing Director, Disability RMS ($20,000).
8
<PAGE>
Stock Options. To provide long term incentive compensation to CORE's
executive officers and other employees, CORE's policy is to grant stock options
which vest over several years. 20,001 stock options were granted to CORE's
executive officers in 1999 under CORE's 1997 Stock Option Plan. The factors in
granting these stock options and the factors the Compensation Committee expects
to continue to follow in granting future stock options to executive officers
include the following: the officer's position with CORE, the officer's salary,
the size of comparable awards made to individuals in similar positions within
the industry, the officer's increased responsibility as a result of the growth
of CORE's operations, the officer's personal performance in recent periods and
company-wide compatibility.
Compensation of the Chief Executive Officer. In applying the above factors
in establishing the compensation for 1999 for George C. Carpenter IV, CORE's
Chief Executive Officer, the Compensation Committee sought to establish a level
of base salary competitive with that paid by companies within the industry which
are of comparable size to CORE and by companies outside of the industry with
which CORE competes for executive talent. CORE entered into an employment
agreement with Mr. Carpenter effective July 15, 1999 providing for his then
annual salary of $220,000 (subject to review and increases) and eligibility for
cash bonuses and stock option grants. The employment agreement also provides
that Mr. Carpenter is entitled to receive compensation and fringe benefits for a
period of 12 months if his employment is terminated without cause by CORE, and
for a period of 18 months if his employment is terminated without cause within
12 months of a change in control of CORE.
Pursuant to CORE's executive incentive plan, for the year 2000, Mr.
Carpenter will be eligible for both quarterly and annual cash bonuses of up to
40% of his 2000 salary based on CORE's financial results and personal and
company performance.
Although no stock options were granted to Mr. Carpenter in 1999, CORE
expects to continue its past policy of granting options to purchase shares of
CORE Common Stock to its chief executive officer that equally vest over several
years and have an exercise price equal to the market price on the date of the
grant, which is consistent with the Compensation Committee's goal of making a
significant percentage of Mr. Carpenter's future total compensation contingent
upon CORE's performance and Mr. Carpenter's continuing services to CORE.
The Compensation Committee reviewed and approved Mr. Carpenter's
compensation package for 1999. After considering the compensation factors
outlined above, pursuant to which Mr. Carpenter's compensation package, like
those of all other executive officers, is determined, the Committee believes
that Mr. Carpenter's compensation for 1999 was reasonable.
The Compensation Committee of CORE, INC.
Leslie Alexandre
David M. Tourangeau
Compensation of Non-Employee Directors
In March 1998, CORE granted each non-employee director options for the
purchase of up to 36,000 shares of CORE's common stock at the then fair market
exercise price of $13.75 per share. The options vest quarterly, subject to
continued service as a Director, through the year 2000. Accordingly, 12,000
options vested in 1999 to each of the non-employee directors for their 1999
services.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
George C. Carpenter IV, Craig C. Horton and William E. Nixon each entered
into an employment agreement with CORE, effective July 1999. Each employment
agreement has an initial term through December 31, 2000 and is automatically
renewed on an annual basis unless written notice of intent not to renew is
delivered by either party thirty (30) days prior to the scheduled end of the
initial or subsequent term. Pursuant to the agreements, Mr. Carpenter is
entitled to an annual base salary of not less than $220,000, Mr. Horton is
entitled to a base annual salary of not less than $210,000 and Mr. Nixon is
entitled to an annual base salary of not less than $180,000. Mr. Carpenter, Mr.
Horton and Mr. Nixon are each entitled to receive compensation and fringe
benefits for a period of 12 months if their employment is terminated without
cause by CORE, and for a period of eighteen (18) months if their employment is
terminated without cause within twelve (12) months of a change in control of
CORE (as described in the employment agreements).
9
<PAGE>
In connection with the acquisition of Disability RMS, James T. Fallon,
Lisa O. Hansen and Michael D. Lachance each entered into an employment agreement
with Disability RMS providing for a base annual salary of not less than $195,950
through September 30, 2000 (subject to extension through September 30, 2001 at
the election of the executive).
Performance Graph
The graph below compares the cumulative stockholder return on CORE's
Common Stock for the five fiscal years ended December 31, 1999 with the
cumulative total return on the Nasdaq Health Services Index and the Nasdaq Total
Return Index (US) over the same period (assuming the investment of $100 in each
of CORE's Common Stock, the Nasdaq Health Services Index and the Nasdaq Total
Return Index (US) on December 31, 1994). The stock price performance shown on
the graph below is not necessarily indicative of future price performance.
Comparison of Five-Year Cumulative Total Return
Among CORE's Common Stock, Nasdaq Health Services Index and
Nasdaq Total Return Index (US)
Comparison chart appears here
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
CORE, INC. Common Stock $ 100.00 $ 242.86 $ 250.00 $ 335.71 $ 171.43 $ 273.23
Nasdaq Health Services Stocks 100.00 127.01 126.80 130.10 110.28 89.86
Nasdaq Market Index 100.00 141.34 173.90 213.07 300.44 556.91
</TABLE>
10
<PAGE>
Principal Stockholders
The following table sets forth information as of May 31, 2000, regarding
the beneficial ownership of CORE's Common Stock by (i) each person who is known
by CORE to own beneficially more than five percent (5%) of CORE's Common Stock;
(ii) each director of CORE; (iii) each Named Executive Officer of CORE
identified in the Summary Compensation Table set forth herein; and (iv) all
directors and executive officers of CORE as a group. Unless otherwise indicated,
the address of the persons listed below is in care of CORE, INC., 18881 Von
Karman Avenue, Irvine, California 92612.
<TABLE>
<CAPTION>
Number of Shares Percent
Name Beneficially Owned (1) Owned
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Credit Suisse Asset Management, LLC
153 East 53rd Street
New York, New York 10022 1,417,500 (2) 15.6%
John Pappajohn
c/o Equity Dynamics
2116 Financial Center
Des Moines, IA 50309 474,269 (3) 5.2%
George C. Carpenter IV 488,556 (4) 5.3%
Craig C. Horton 431,218 (5) 4.7%
James T. Fallon 262,517 (6) 2.9%
Lisa O. Hansen 262,517 (7) 2.9%
Michael D. Lachance 262,517 (8) 2.9%
Stephen C. Caulfield 161,776 (9) 1.8%
William E. Nixon 115,941 (10) 1.3%
Leslie Alexandre 84,575 (11) *
David M. Tourangeau 37,000 (12) *
Richard J. Towle 36,000 (13) *
All directors and executive officers as a group (13 individuals) 2,549,419 (14) 25.1%
</TABLE>
* Less than one percent.
(1) Except as otherwise indicated, represents sole voting and investment
power.
(2) Based on Schedule 13G/A, dated February 16, 2000.
(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 49,000 shares issuable
to Mr. Pappajohn pursuant to options, all of which are fully vested.
(4) Includes 318,556 shares held jointly by Mr. Carpenter and his wife and
170,000 shares issuable to Mr. Carpenter pursuant to options (71,000 of
which remain subject to future vesting).
(5) Includes 1,000 shares held by Mr. Horton as custodian for Mr. Horton's son
and 170,000 shares issuable to Mr. Horton pursuant to options (71,000 of
which remain subject to future vesting).
(6) Includes 31,667 shares issuable to Mr. Fallon pursuant to options (24,001
of which remain subject to future vesting).
(7) Includes 31,667 shares issuable to Ms. Hansen pursuant to options (24,001
of which remain subject to future vesting).
(8) Includes 31,667 shares issuable to Mr. Lachance pursuant to options
(24,001 of which remain subject to future vesting).
(9) Includes 15,000 shares owned by Mr. Caulfield's wife and 101,000 shares
issuable to Mr. Caulfield pursuant to options (18,500 of which remain
subject to future vesting).
(10) Includes 21,941 shares held jointly by Mr. Nixon and his wife and 94,000
shares issuable to Mr. Nixon pursuant to options (42,000 of which remain
subject to future vesting).
(11) Includes 65,075 shares issuable to Dr. Alexandre pursuant to options
(6,000 of which remain subject to future vesting).
11
<PAGE>
(12) Includes 36,000 shares issuable to Mr. Tourangeau pursuant to options
(15,000 of which remain subject to future vesting).
(13) Includes 36,000 shares issuable to Mr. Towle pursuant to options (15,000
of which remain subject to future vesting).
(14) Includes 1,067,778 shares issuable pursuant to options (394,106 of which
remain subject to future vesting).
Certain Transactions
On September 1, 1998, CORE acquired all the shares of stock of Disability
Reinsurance Management Services, Inc. ("Disability RMS"), pursuant to a Capital
Stock Purchase Agreement dated as of August 31, 1998 (the "Stock Purchase
Agreement"). Pursuant to the Stock Purchase Agreement, all the shares of
Disability RMS stock were acquired in exchange for CORE's cash payment of $20
million, the issuance of 480,000 shares of CORE common stock and the future
issuance of up to an additional 375,000 shares of CORE common stock, based upon
the future performance of Disability RMS. Effective April 1, 2000, CORE and
Disability RMS entered into an Agreement and Amendment to Capital Stock Purchase
Agreement (the "Agreement and Amendment") with James T. Fallon, Lisa O. Hansen,
Michael D. Lachance, David C. Mitchell and David K. Rich (collectively, the
"former stockholders of Disability RMS") whereby CORE agreed to make full
payment of the additional consideration of 375,000 shares of CORE common stock.
Pursuant to this Agreement and Amendment, effective April 1, 2000 Mr. Fallon,
Ms. Hansen and Mr. Lachance each received 101,250 shares of CORE common stock,
representing each of their 27% interests as former stockholders of Disability
RMS.
In 1996, at the request of CORE, Mr. Nixon, Executive Vice President,
Chief Financial Officer and Treasurer relocated his principal residence to
California. In connection with this requested relocation, CORE loaned Mr. Nixon
approximately $80,000 for the purpose of enabling him to relocate and purchase a
home. As of March 31, 2000, the loan balance is approximately $35,000. The loan
bears interest at the lowest rate required to avoid the imputation of interest.
12
<PAGE>
2. AMENDMENT TO 1997 STOCK OPTION PLAN
In 1997, the stockholders approved the adoption of the CORE, INC. 1997
Stock Option Plan (the "1997 Plan"), which provides for the granting of options
to purchase shares of Common Stock to CORE's employees, consultants and others.
The purpose of the 1997 Plan is to promote the interests of CORE and its
stockholders by encouraging and enabling eligible employees of CORE (including
CORE's subsidiaries) and other persons affiliated with CORE to acquire stock in
CORE. CORE believes that the granting of stock options, including both
"Incentive Stock Options" and "non-ISOs" will stimulate the efforts of such
persons, strengthen their desire to remain with CORE, provide them with a more
direct interest in its welfare and assure a closer identification between them
and CORE. Presently, the total number of shares of CORE's Common Stock for which
options may be granted under the 1997 Plan is 950,000.
The Board of Directors has adopted an amendment to the 1997 Plan, subject
to approval by the stockholders, to increase the aggregate number of shares for
which options may be granted under the 1997 Plan from 950,000 to 1,700,000 for
previously granted options and to ensure that a sufficient number of shares are
available to allow CORE to continue to use option grants to pursue the general
purpose of the 1997 Plan.
The affirmative vote of at least a majority of the shares of CORE's Common
Stock represented in person or by proxy at the meeting and voting (provided a
quorum is present) is required for the approval of this amendment to the 1997
Plan. In the event the amendment is not approved by CORE's stockholders: (i)
options for 245,000 shares of CORE's Common Stock granted to executive officers
on March 29, 2000 would be terminated, (ii) options for 25,000 shares of Common
Stock granted to one non-employee director on March 29, 2000 would be
terminated, and (iii) options for 235,000 shares of CORE's Common Stock granted
to approximately 125 employees on March 29, 2000 would lose their incentive
stock option status and be deemed granted to such persons outside of the 1997
Plan. In the event of the termination of such options and loss of incentive
stock option status, CORE 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.
CORE'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
THE AMENDMENT TO THE 1997 PLAN.
Summary Description of the 1997 Plan
General. The options granted under the 1997 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 CORE 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 1997 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 1997 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 CORE 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 1997 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 1997 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. CORE 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 1997 Plan is
scheduled to terminate in 2007.
13
<PAGE>
Administration. The 1997 Plan is subject to administration by the Board of
Directors of CORE 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 has
delegated administration of the Plan, including the grant of options thereunder,
to the Compensation Committee of the Board. The Board of Directors appoints the
members of the Compensation Committee, fills vacancies on the Compensation
Committee and has the power to replace members of the Compensation Committee
with other eligible persons at any time. The current members of the Compensation
Committee are Leslie Alexandre and David M. Tourangeau.
Federal Income Tax Consequences. The federal income tax consequences of an
optionee's participation in the 1997 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 1997 Plan depend on
whether the stock option is an Incentive Stock Option ("ISO") or a non-qualified
stock option ("non-ISO"). An optionee will not recognize income at the time of a
grant or exercise of an ISO and CORE 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 non-ISOs. There are no federal income tax
consequences to the optionee or CORE upon the grant of non-ISOs with exercise
prices equal to fair market value on the date of grant. Upon exercise of a
non-ISO, 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. CORE 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
non-ISOs. 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.
14
<PAGE>
1997 Plan Benefits
Employees, directors, consultants and others are eligible to receive
option grants under the 1997 Plan. Since stock option grants under the 1997 Plan
are made at the discretion of the Compensation Committee, potential future stock
option grants are not reasonably ascertainable. The following table provides
information with respect to outstanding options as of May 31, 2000 under the
1997 Plan, including options granted under the 1997 Plan in March 2000 that are
subject to stockholder approval of the proposed amendment to the 1997 Plan.
<TABLE>
<CAPTION>
Number of Options
Name and Principal Position under the 1997 Plan *
--------------------------- ---------------------
<S> <C>
George C. Carpenter IV 120,000 (1)
Chairman of the Board of Directors and Chief Executive Officer
Craig C. Horton 120,000 (1)
Director, President, Chief Operating Officer and General Manager, WorkAbility
William E. Nixon 70,000 (2)
Executive Vice President, Chief Financial Officer and Treasurer
James T. Fallon 31,667 (2)
Managing Director, Disability Reinsurance Management Services, Inc.
Lisa O. Hansen 31,667 (2)
Managing Director, Disability Reinsurance Management Services, Inc.
Michael D. Lachance 31,667 (2)
Managing Director, Disability Reinsurance Management Services, Inc.
Executive Group 487,751 (3)
Non-Executive Director Group 179,000 (2)
Non-Executive Officer Employee Group 698,770 (4)
</TABLE>
* Subject to vesting over 3 years (for non-employee directors) or 4 years
(for employees, including executive officers).
(1) Includes options for 45,000 shares of CORE's Common Stock granted on March
29, 2000 which are subject to stockholder approval of the proposed
amendment to the 1997 Plan.
(2) Includes options for 25,000 shares of CORE's Common Stock granted on March
29, 2000 which are subject to stockholder approval of the proposed
amendment to the 1997 Plan.
(3) Includes options for 245,000 shares of CORE's Common Stock granted on
March 29, 2000 which are subject to stockholder approval of the proposed
amendment to the 1997 Plan.
(4) Includes options for 235,000 shares of CORE's Common Stock granted on
March 29, 2000, the incentive stock option status of which are subject to
stockholder approval of the proposed amendment to the 1997 Plan.
15
<PAGE>
ANNUAL REPORT
A copy of CORE's 1999 Annual Report accompanies this Proxy Statement, but
does not constitute part of the proxy solicitation materials.
ANY STOCKHOLDER MAY OBTAIN FROM CORE, WITHOUT CHARGE, A COPY OF ITS ANNUAL
REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1999, INCLUDING THE FINANCIAL STATEMENTS THEREIN AND THE RELATED
FINANCIAL STATEMENT SCHEDULE, BY WRITTEN REQUEST ADDRESSED TO WILLIAM E. NIXON,
TREASURER, CORE, INC., 18881 VON KARMAN AVENUE, SUITE 1750, IRVINE, CALIFORNIA
92612.
RELATIONSHIP WITH CERTIFIED PUBLIC ACCOUNTANTS
The accounting firm of Ernst & Young LLP served as CORE's independent
auditors for 1999. A representative of Ernst & Young LLP 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 CORE has requested that the Audit Committee recommend an accounting
firm to serve as CORE's independent auditors for the year 2000.
During CORE's three most recent fiscal years, there were no disagreements
with Ernst & Young LLP 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 LLP would have caused the firm to
make a reference to the subject matter of the disagreement in connection with
its report.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for stockholder
action at subsequent annual meetings of CORE stockholders consistent with SEC
Rule 14a-8, which in certain circumstances may require the inclusion of
qualifying proposals in CORE's proxy statement. For such proposals to be
considered for inclusion in CORE's proxy statement and proxy relating to CORE's
2001 Annual Meeting of Stockholders, all applicable requirements of Rule 14a-8
must be satisfied and such proposals must be received by CORE on or before
February 23, 2001 at CORE, INC., 18881 Von Karman Avenue, Suite 1750, Irvine,
California 92612, Attention: Clerk.
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.
16
<PAGE>
|X| PLEASE MARK VOTES AS IN THIS EXAMPLE
--------------------------------------------------------------------------------
CORE, INC.
--------------------------------------------------------------------------------
Mark box at right if an address change or comment has been noted on the
reverse side of this card. |_|
CONTROL NUMBER:
RECORD DATE SHARES:
1. The proposal to elect the following nominees as For All With- For All
Class III Directors: Nominees hold Except
(01) George C. Carpenter IV |_| |_| |_|
(02) Craig C. Horton
NOTE: If you do not wish your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through that nominee's name. Your shares
will be voted for the remaining nominee.
For Against Abstain
2. The proposal to approve an amendment to CORE,
INC.'s 1997 Stock Option Plan to increase the |_| |_| |_|
number of shares Issuable under the Plan from
950,000 to 1,700,000.
For Against Abstain
3. In their discretion, the proxies are authroized
to vote upon any other business that may |_| |_| |_|
properly come before the meeting.
-------------------
Please be sure to sign and date this Proxy. Date
--------------------------------------------------------------------------------
-------Stockholder sign here-------------------------Co-owner sign here---------
DETACH CARD DETACH CARD
CORE, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Ballor.
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 rights to
vote your shares.
Please mark the boxes on this proxy card to indicate how your shares will 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 the Annual
Meeting of Stockholders, July 27, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
CORE, INC.
<PAGE>
CORE, INC.
Special Meeting in lieu of the Annual Meeting of Stockholders
July 27, 2000
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 the Annual Meeting of
Stockholders of CORE, INC., to be held on Thursday, July 27, 2000, at 3:00 p.m.,
local time, at 18881 Von Karman Avenue, Irvine, California and any and all
adjourments 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 a Special Meeting in lieu of
the Annual Meeting of Stockholders and are more fully described in the Proxy
Statement.
The undersigned hereby ratifies and confirms all that said proxy or proxies may
do by virtue hereor. 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 or 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 a Special Meeting in lieu of the Annual 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 2 (THE APPROVAL
OF AN AMENDMENT TO CORE, INC.'S 1997 STOCK OPTION PLAN) AND PROPOSAL 3.
--------------------------------------------------------------------------------
IMPORTANT:
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPLY IN THE ENCLOSED
ENVELOPE, THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THIS
COMPANY.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
____________________________________ _____________________________________
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