CRA MANAGED CARE INC, DEF 14A, 1996-05-10

CRA MANAGED CARE INC
DEF 14A, 1996-05-10
MISC HEALTH & ALLIED SERVICES, NEC

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SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)

FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /

________________________________________________________________________________

Check the appropriate box:

/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

CRA Managed Care, Inc.
(Name of Registrant as Specified In Its Charter)

CRA Managed Care, Inc.
(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):

/ / $125 per Exchange Act Rules 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 transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

/X/ Fee paid previously with preliminary materials.

/ / 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:
________________________________________________________________________________
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CRA MANAGED CARE, INC.
NOTICE OF SPECIAL MEETING IN LIEU OF
THE 1996 ANNUAL MEETING OF STOCKHOLDERS

To Our Stockholders:

A Special Meeting of the Stockholders of CRA MANAGED CARE, INC. in lieu of
the 1996 Annual Meeting will be held on Tuesday, May 21, 1996, at 10:00 a.m. at
the offices of Hutchins, Wheeler & Dittmar, 101 Federal Street, Boston,
Massachusetts, for the following purposes:

1. To elect two directors, to serve for a term of three years as more fully
described in the accompanying Proxy Statement.

2. To consider and act upon a proposal to amend the CRA Managed Care, Inc.
1994 Time Accelerated Restricted Stock Option Plan to increase the number of
shares to be granted thereunder from 376,000 to 976,000.

3. To consider and act upon a proposal to ratify, confirm and approve the
selection of Arthur Andersen LLP as the independent certified public accountants
of the Company for fiscal year 1996.

4. To consider and act upon a proposed amendment to the Company's Articles
of Organization increasing the number of authorized shares of Common Stock, par
value $.01 per share, from 10,000,000 shares to 40,000,000 shares.

5. To consider and act upon any other business which may properly come
before the meeting.

The Board of Directors has fixed the close of business on April 5, 1996, as
the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.

The enclosed Amended and Restated Proxy Statement and Proxy are being
provided in order to add one matter for consideration by the Stockholders. Item
4, the proposal to increase the number of authorized shares of Common Stock, is
the only matter added to the Proxy Statement and Proxy previously mailed to the
Stockholders on April 19, 1996.

PLEASE COMPLETE AND RETURN THE ENCLOSED AMENDED AND RESTATED PROXY IN THE
ENVELOPE PROVIDED WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN
PERSON.

By order of the Board of Directors

Joseph F. Pesce,
Vice President - Finance and Administration,
Chief Financial Officer
and Treasurer

Boston, Massachusetts
May 10, 1996
<PAGE>

CRA MANAGED CARE, INC.
AMENDED AND RESTATED PROXY STATEMENT

This Amended and Restated Proxy Statement is furnished in connection with
the solicitation of proxies by the Board of Directors of CRA Managed Care, Inc.
(the "Company") for use at the Special Meeting of Stockholders in lieu of the
1996 Annual Meeting of Stockholders to be held on Tuesday, May 21, 1996, at the
time and place set forth in the notice of the meeting, and at any adjournments
thereof. This Amended and Restated Proxy Statement has been circulated in order
to add one matter for consideration by the Stockholders at the Special Meeting
of Stockholders in Lieu of the 1996 Annual Meeting. The additional matter for
consideration by the Stockholders is an increase in the number of authorized
shares of Common Stock, par value $.01 per share, as described herein. The
approximate date on which this Amended and Restated Proxy Statement and form of
proxy are first being sent to stockholders is May 10, 1996.

If the enclosed proxy is properly executed and returned, it will be voted
in the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in
favor thereof. Any person giving the enclosed form of proxy has the power to
revoke it by voting in person at the meeting, or by giving written notice of
revocation to the Clerk of the Company at any time before the proxy is
exercised.

The holders of a majority in interest of all Common Stock issued,
outstanding and entitled to vote are required to be present in person or be
represented by proxy at the meeting in order to constitute a quorum for the
transaction of business. The election of the nominee for director will be
decided by plurality vote. The affirmative vote of the holders of at least a
majority of the shares of Common Stock voting in person or by proxy at the
meeting are required to approve all other matters listed in the notice of the
meeting.

The Company will bear the cost of the solicitation. It is expected that the
solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, facsimile and in
person and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy materials to their principals at the
expense of the Company.

The Company's principal executive offices are located at 312 Union Wharf,
Boston, Massachusetts 02109, telephone number (617) 367-2163.

RECORD DATE AND VOTING SECURITIES

Only stockholders of record at the close of business on April 5, 1996 are
entitled to notice of and to vote at the meeting. On that date, the Company had
outstanding and entitled to vote 7,373,024 shares of Common Stock, par value
$.01 per share. Each outstanding share of the Company's Common Stock entitles
the record holder to one vote.

1. ELECTION OF DIRECTORS

The Board of Directors is divided into three classes, with each class as
nearly equal in number as possible. One class is elected each year for a term of
three years. It is proposed that the nominees listed below, whose term expires
at this meeting, be elected to serve a term of three years and until their
respective successors are duly elected and qualify or until such nominees sooner
die, resign or are removed. The Company presently has a Board of Directors of 6
members.

The persons named in the accompanying proxy will vote, unless authority is
withheld, for the election of the nominees named below. If either of such
nominees should become unavailable for election, which is not anticipated, the
persons named in the accompanying proxy will vote for such substitute or
substitutes as the Board of Directors may recommend. Neither nominee is related
to any executive officer of the Company or its subsidiaries.

1
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YEAR FIRST POSITION WITH THE COMPANY
ELECTED A OR PRINCIPAL OCCUPATION
NAME OF DIRECTOR AGE DIRECTOR DURING THE PAST FIVE YEARS
- ---------------- --- ---------- --------------------------
<S> <C> <C> <C>

NOMINATED FOR A TERM
ENDING IN 1999:

George H. Conrades......... 57 1994 Mr. Conrades has served as a
Director of the Company since
June 1994. Mr. Conrades has been
President and Chief Executive
Officer of BBN Corporation since
1994 and has served as Chairman
of its Board of Directors since
November 1995. From 1992 to 1994,
Mr. Conrades was a partner in
Conrades/Reilly Associates, a
business consulting company. From
1961 to 1992, Mr. Conrades held a
number of management positions
with International Business
Machines Corp., most recently as
Senior Vice President for
Corporate Marketing and Services.
Mr. Conrades is a director of BBN
Corporation, Westinghouse
Electric Corp. and Pioneer
Companies, Inc.

Jeffrey R. Jay, M.D........ 37 1994 Dr. Jay has served as a Director
of the Company since March 1994.
Dr. Jay has been a General
Partner of J. H. Whitney & Co.
("Whitney"), a private investment
firm, since 1993. From 1988 to
1993, Dr. Jay worked for Canaan
Partners, a venture capital firm.
Dr. Jay is a national advisory
member of the American Medical
Association's Physician Capital
Source Committee. Dr. Jay is a
graduate of Harvard Business
School and received his M.D. from
the Boston University School of
Medicine.

</TABLE>

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SERVING A TERM ENDING IN
1997:

Donald J. Larson........... 45 1978 Mr. Larson, a founder of the
Company, has served as President
and Chief Executive Officer of the
Company since January 1, 1996.
From 1988 through December 31,
1995, Mr. Larson served as
President and Chief Operating
Officer of the Company. Prior to
founding the Company, Mr. Larson
held the position of New England
Regional Manager at IntraCorp.
Inc., a division of Cigna
Corporation. Mr. Larson is a
graduate of Boston College and
Boston University.

Mitchell T. Rabkin, M.D.... 65 1995 Dr. Rabkin has served as a
Director of the Company since
February 1995. Since 1966, Dr.
Rabkin has been Chief Executive
Officer of Boston's Beth Israel
Hospital, where he currently holds
the rank of Professor of Medicine.
Dr. Rabkin is a graduate of
Harvard College and received his
M.D. from Harvard Medical School.

SERVING A TERM ENDING IN
1998:

Lois E. Silverman.......... 55 1978 Ms. Silverman, a founder of the
Company, has served as the
Chairman of the Board since March
1994 and as its Chief Executive
Officer from 1988 to December 31,
1995. Prior to founding the
Company, Ms. Silverman held the
position of Northeast Regional
Manager at IntraCorp., a division
of Cigna Corporation. Ms.
Silverman also serves as Trustee
and Officer of Beth Israel
Hospital and Overseer of Tufts
Medical School. Ms. Silverman is a
graduate of Beth Israel School of
Nursing. Ms. Silverman is also a
director of Sun Healthcare Group,
Inc.

</TABLE>

3
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William Laverack, Jr....... 39 1994 Mr. Laverack has served as a
Director of the Company since
March 1994. Mr. Laverack has been
a General Partner of Whitney, a
private investment firm, since
1993. From 1991 to 1993, Mr.
Laverack served as a Managing
Director of Gleacher & Co., Inc.,
an investment banking firm. From
1985 to 1991, Mr. Laverack served
as a Principal in the merchant
banking department of Morgan
Stanley & Co. Incorporated, an
investment banking firm. Mr.
Laverack is a graduate of Harvard
College and Harvard Business
School.

</TABLE>

INFORMATION CONCERNING THE BOARD OF DIRECTORS

During fiscal 1995, there were 9 meetings of the Board of Directors of the
Company. All of the directors attended at least 75% of the aggregate of (i) the
total number of meetings of the Board of Directors during which they served as
director and (ii) the total number of meetings held by committees of the Board
of Directors on which they served. The Board of Directors does not have a
Nominating Committee. Ms. Silverman and Mr. Larson each received compensation as
employees of the Company. See "Compensation Committee Interlocks and Insider
Participation -- Certain Relationships and Related Transactions." During 1995,
the Company also reimbursed the travel expenses of Messrs. Laverack and Jay in
the aggregate amount of approximately $23,897, in connection with their
attending meetings of the Board of Directors of the Company. Directors of the
Company who are not employees of the Company receive a fee of $2,000 for each
board meeting attended.

The Board of Directors has a Compensation Committee whose present members
are Donald J. Larson, Jeffrey R. Jay, M.D. and William Laverack, Jr. The
Compensation Committee determines the compensation to be paid to key officers of
the Company and administers the Company's stock option plans. During fiscal year
1995, there were 4 meetings of the Compensation Committee.

The Company also has an Audit Committee whose present members are George H.
Conrades and William Laverack, Jr. The Audit Committee reviews with the
Company's independent auditors the scope of the audit for the year, the results
of the audit when completed and the independent auditors' fee for services
performed. The Audit Committee also recommends independent auditors to the Board
of Directors and reviews with management various matters related to its internal
accounting controls. During fiscal 1995, there were 2 meetings of the Audit
Committee.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND OFFICERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 5, 1996, (i) by each person
(or group of affiliated persons) known by the Company to be the beneficial owner
of more than 5% of the outstanding Common Stock, (ii) each Director, (iii) the
Company's Chief Executive Officer and the Company's other executive officers
named in the Summary Compensation Table elsewhere in this Proxy Statement and
(iv) all of the Company's executive officers and Directors as a group. Except as
indicated in the footnotes to this table, the Company believes that the persons
named in this table have sole voting and investment power with respect to all
the shares of Common Stock indicated.
<TABLE>
<CAPTION>

NUMBER PERCENT
OF OF
NAME SHARES(1) CLASS
---- --------- -----

<S> <C> <C>
Lois E. Silverman (2)......................... 622,470 8.3%

Donald J. Larson (3).......................... 1,174,530 15.8%

Joseph F. Pesce (4)........................... 22,240 .3%

John A. McCarthy, Jr. (5)..................... 15,286 .2%

Anne E. Kirby (6)............................. 20,986 .3%

George H. Conrades (7)........................ 7,833 .1%

Jeffrey R. Jay, M.D. (8)...................... 2,075,581 27.9%

William Laverack, Jr. (8)..................... 2,075,581 27.9%

Mitchell T. Rabkin, M.D. (7).................. 8,033 .1%

J.H. Whitney & Co. (9)........................ 2,075,581 27.9%

Morgan Stanley Group, Inc. (10)
Morgan Stanley Asset Management, Inc. (11).... 467,400 6.3%

All executive officers and directors as
a group (9 persons) (12)..................... 3,946,959 53.0%

- ---------------------
</TABLE>

(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission and includes general voting power and/or
investment power with respect to securities. Shares of Common Stock subject
to options and warrants currently exercisable or exercisable within 60 days
of April 5, 1996 are deemed outstanding for computing the percentage of a
person holding such options but are not deemed outstanding for computing
the percentage of any other person. Except as otherwise specified below,
the persons named in the table above have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned by
them.

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(2) The address of this stockholder is c/o CRA Managed Care, Inc., 312 Union
Wharf, Boston, Massachusetts 02109. Includes 23,500 shares held of record
by The Michael E. Silverman 1995 Irrevocable Trust dated March 13, 1995 and
23,500 shares held of record by The Susan E. Bender 1995 Irrevocable Trust
dated March 13, 1995.

(3) The address of this stockholder is c/o CRA Managed Care, Inc., 312 Union
Wharf, Boston, Massachusetts 02109. Includes 18,750 shares held of record
by trusts created for the benefit of Mr. Larson's children.

(4) Includes 20,740 shares of Common Stock issuable pursuant to currently
exercisable stock options.

(5) Includes 15,100 shares of Common Stock issuable pursuant to currently
exercisable stock options.

(6) Includes 19,800 shares of Common Stock issuable pursuant to currently
exercisable stock options.

(7) Includes 7,833 shares of Common Stock issuable pursuant to currently
exercisable stock options.

(8) The address of these directors is c/o J.H. Whitney & Co., 177 Broad Street,
Stamford, Connecticut 06901. Consists of 2,075,581 shares held of record by
Whitney, the Whitney 1990 Equity Fund, L.P. ("Whitney Equity Fund") and the
Whitney Subordinated Debt Fund, L.P. ("Whitney Debt Fund") that Dr. Jay and
Mr. Laverack may be deemed to beneficially own due to their relationship
with such entities. Such beneficial ownership is disclaimed by both Dr. Jay
and Mr. Laverack.

(9) The address of this stockholder is 177 Broad Street, Stamford, Connecticut
06901, Attention: Jeffrey R. Jay, M.D. These shares are held of record by
Whitney and its affiliates as follows: (i) Whitney-305,726 shares of Common
Stock; (ii) the Whitney Equity Fund-1,222,893 shares of Common Stock; and
(iii) the Whitney Debt Fund-546,962 shares of Common Stock.

(10) The address of this stockholder is 1585 Broadway, New York, New York
10036. Ownership based
upon Schedule 13G filed on or before February 14, 1996.

(11) The address of this stockholder is 1221 Avenue of the Americas, New York,
New York 10020. Ownership upon Schedule 13G filed on or before February
14, 1996.

(12) Includes 71,306 shares of Common Stock issuable pursuant to currently
exercisable stock options. Includes 2,075,581 shares held of record by
Whitney, the Whitney Equity Fund and the Whitney Debt Fund that Dr. Jay and
Mr. Laverack may be deemed to beneficially own due to their relationship
with such entities. Such beneficial ownership is disclaimed by both Dr. Jay
and Mr. Laverack.

6
<PAGE>

COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

The Compensation Committee (the "Committee") of the Board of Directors has
furnished the following report on executive compensation.

EXECUTIVE COMPENSATION PHILOSOPHY

Under the supervision of the Committee, the Company has developed and
implemented executive compensation policies, plans and programs which seek to
enhance the profitability and value of the Company. The primary objective is to
align closely the financial interests of the Company's executives with those of
its stockholders. The Committee believes that equity ownership by management is
beneficial in conforming management and stockholder interests in the enhancement
of stockholder value.

The Committee's philosophy is to integrate management pay with the
achievement of annual financial performance goals. The compensation package for
each officer is designed to recognize individual initiative and achievement. In
establishing compensation, the Committee incorporates a number of factors to
promote both long and short-term performance of the Company. These factors
include earnings, market share growth, cost control efforts, balance sheet
strength and organizational developments. The compensation for individual
executives is based on both company and personal goals, with varying weight
being given to individual factors for particular executives.

The Committee believes that the Company's overall executive compensation
package should enable the Company to obtain and retain the services of top
executives. The Company operates with a small team of top executives who are
given significant and extensive responsibilities. These executives' duties
encompass overall strategic policy of the Company and day-to-day activities in
sales, customer communications, product development, marketing and other similar
activities. The compensation package is intended to reflect these broad
responsibilities.

The Company's compensation package for its executive officers consists of
base salary, annual bonuses, stock option grants and, for certain executive
officers, other benefits.

BASE SALARY

The Committee sets base salary at the minimum level deemed sufficient to
attract and retain qualified executives. By restricting the role of base salary
in the compensation package, more of an executive's compensation can be paid in
the form of incentives which encourage and reward performance. The base salaries
of individual executives are set in light of the responsibilities of the
position held and the experience of the individual, with a recognition of the
Company's requirements for the top executives to perform many varied tasks.

ANNUAL BONUSES

The Committee establishes company performance targets based on the
Company's operating earnings each year in connection with potential annual
bonuses granted under a current management incentive bonus plan. Executive
officers are eligible to receive cash bonuses based upon the achievement of such
predetermined performance targets and the executive officer's individual
performance, as determined by the Chief Executive Officer of the Company and
approved by the Committee. Special awards may also be

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awarded under the current management incentive bonus plan as determined by the
Chief Executive Officer and approved by the Committee.

LONG-TERM INCENTIVES

The Company's stock option program is intended to provide additional
incentive to build shareholder value, to reward long-term corporate performance
and to promote employee loyalty through stock ownership. Information with
respect to stock options held by executive officers (including options granted
during the year ended December 31, 1995) is included in the tables following
this report. The vesting of options granted has historically been dependent upon
the achievement of predetermined performance goals. Nevertheless, the amount
realized by a recipient from an option grant will depend on the future
appreciation in the price of the Company's Common Stock.

CHIEF EXECUTIVE OFFICER COMPENSATION

The Compensation Committee reviewed and approved the compensation of Lois
E. Silverman, the Chief Executive Officer of the Company during 1995. Ms.
Silverman participated in the Executive Bonus Plan, with her bonus tied to
corporate profit goals. Her maximum possible bonus was 100% of her base salary.
The Compensation Committee believes Ms. Silverman was paid a reasonable salary,
and her bonus was based upon the same corporate financial goals as the other
officers of the Company. Ms. Silverman was not eligible for stock options. Since
Ms. Silverman is a significant shareholder in the Company, her rewards as Chief
Executive Officer in 1995 reflect increases in value enjoyed by all other
shareholders.

COMPENSATION COMMITTEE

Donald J. Larson
Jeffrey R. Jay, M.D.
William Laverack, Jr.

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COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION

GENERAL

Messrs. Larson, Jay and Laverack served as members of the Compensation
Committee during fiscal 1995. Neither Dr. Jay nor Mr. Laverack was an officer or
employee of the Company or any of its subsidiaries during fiscal 1994. Mr.
Larson served as the Company's President and Chief Operating Officer during
fiscal 1995.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On March 8, 1994, the Company completed a recapitalization ("the
Recapitalization"), pursuant to which the Company redeemed an aggregate of 49.0%
of the then outstanding shares of Common Stock from Ms. Silverman and Mr. Larson
for a total consideration of $28,260,000 and $27,152,000, respectively,
consisting of cash and an aggregate of $5,000,000 in 10.0% Junior Subordinated
Notes due 2002 (the "Junior Subordinated Notes"). To finance these redemptions
and related expenses, the Company (i) issued 604,537 shares of Common Stock at
$4.15 per share and 1,698,463 shares of Series A Convertible Preferred Stock,
$.01 par value per share ("Series A Convertible Preferred Stock") at $5.89 per
share representing, in the aggregate, 49.0% of the Company's capital stock on a
fully-diluted basis (giving effect to the conversion of the Series A Convertible
Preferred Stock into shares of Common Stock on a one-for-one basis) to Whitney,
the Whitney Equity Fund and First Union Corporation ("First Union"); (ii)
borrowed $17,000,000 in term loans and $5,000,000 in revolving credit under a
loan agreement, dated March 8, 1991, with First Union National Bank of North
Carolina (the "Loan Agreement"); and (iii) issued $19,000,000 principal amount
of 10.101% Senior Subordinated Notes due March 8, 2001 (the "Senior Subordinated
Notes") to the Whitney Debt Fund and $2,000,000 principal amount of Senior
Subordinated Notes to First Union. Dr. Jay and Mr. Laverack are general partners
of Whitney, the Whitney Equity Fund and the Whitney Debt Fund. The Company
entered into the Recapitalization in order to provide liquidity to the Company's
founders, Ms. Silverman and Mr. Larson. Management of the Company also believed
that the Recapitalization, by aligning the organizational and capital structure
of the Company with that of other private companies with professional investors,
would allow the Company to (i) attract experienced and qualified outside
directors, such as Mr. Conrades and Dr. Rabkin who, based on their prior
business or related experience, could assist management with operational issues
as well as the strategic direction of the Company; (ii) access the financial and
managerial advice and experience of J.H. Whitney & Co., a private investment
firm, which has invested in other similarly situated companies; and (iii) make
the Company more attractive to other professional investors, to the extent the
Company needs to raise additional capital, who would not ordinarily invest in a
closely-held company.

Ms. Silverman and Mr. Larson are the trustees and beneficiaries of Colonial
Realty Trust, which leases thirteen office spaces to the Company for an annual
aggregate consideration of $726,000. In connection with the Recapitalization,
the Company renegotiated all of its leases with Colonial Realty Trust to what
the Company believes were fair market rental rates at the time of the
Recapitalization.

Whitney was paid an equity placement fee of $500,000 in connection with the
issuance of the Preferred Stock, a debt placement fee of $630,000 in connection
with the issuance of the Senior Subordinated Notes and a management fee of
$100,000 for 1994. The Company's obligation to pay Whitney a management fee was
terminated effective as of January 1, 1995.

In connection with the Recapitalization, the Company entered into a
Stockholders' Agreement (the ''Stockholders' Agreement'') and a Registration
Rights Agreement (the ''Registration Rights Agreement'') with Whitney, the
Whitney Equity Fund, the Whitney Debt Fund, First Union, Ms. Silverman and Mr.
Larson.

9
<PAGE>

The Stockholders' Agreement provided for, among other things, restrictions
on transfer of shares, rights of first refusal, tag along rights and election of
directors. The Company's current directors were elected pursuant to the terms of
the Stockholders' Agreement, which requires all the parties to this agreement to
vote their shares of the Company's capital stock in favor of a board of
directors consisting of one member designated by each of Whitney, the Whitney
Equity Fund, Ms. Silverman and Mr. Larson, plus from one to three additional
outside directors selected by the members of the Board designated by Whitney,
the Whitney Equity Fund, Ms. Silverman and Mr. Larson. Upon the closing of the
initial public offering of Common Stock in May, 1995, the Stockholders'
Agreement terminated.

Pursuant to the Registration Rights Agreement, holders of at least 25.0% of
the shares of Common Stock subject to the Registration Rights Agreement
(excluding Mr. Silverman and Mr. Larson) may require the Company to effect the
registration of shares of Common Stock held by such parties for sale to the
public on three occasions, subject to certain conditions and limitations. In
addition, under the terms of the Registration Rights Agreement, if the Company
proposes to register any of its securities under the Securities Act of 1933, as
amended, whether for its own account or otherwise, the parties to the
Registration Rights Agreement (including Ms. Silverman and Mr. Larson) are
entitled to receive notice of such registration and to include their shares
therein, subject to certain conditions and limitations. The Company has agreed
to pay fees, costs and expenses of any registration effected on behalf of the
parties to the Registration Rights Agreement (other than underwriting discounts
and commissions).

Lois E. Silverman and Donald J. Larson are each party to separate
employment agreements with the Company, dated as of March 8, 1994 (the
''Employment Agreements''). Mr. Larson agreed to devote his full time and best
efforts to the performance of his duties to the Company. The Employment
Agreements have initial terms of five years unless earlier terminated as
provided therein; Ms. Silverman may terminate her Employment Agreement as of
March 8, 1997, if notice is provided one year prior to such date. The terms of
the Employment Agreements may be automatically renewed for additional one year
terms, subject to limitations contained therein. The Company may terminate Ms.
Silverman and/or Mr. Larson for cause, as defined therein, and Ms. Silverman and
Mr. Larson may terminate their respective Employment Agreements for Good Reason,
as defined therein. The Employment Agreements contain provisions pursuant to
which Ms. Silverman and Mr. Larson agree not to disclose any proprietary
information of the Company and also agree not to compete with the Company (in
the U.S., Canada or any other country in which the Company does business, or
took steps to do business before termination of their employment), or solicit
its employees, for the term of the Employment Agreements and up to two years
after termination of employment, for any reason. Mr. Larson is to receive an
annual salary of $250,000 and is allowed to participate in a bonus plan (the
''Executive Bonus Plan''). Both Ms. Silverman and Mr. Larson also receive
similar benefits made available by the Company to its executive employees.

Ms. Silverman's employment agreement was amended as of January 24, 1996 in
connection with her resignation as Chief Executive Officer of the Company
(effective January 1, 1996). Pursuant to this amendment, Whitney and its
affiliates and Mr. Larson have agreed to vote their shares of Common Stock in
their favor of electing Ms. Silverman as a director of the Company, and she is
to remain an employee of the Company, through March 8, 1999, so long as she
continues to hold at least one-third of the number of shares of Common Stock of
the Company which she held on January 24, 1996. Ms. Silverman is to continue in
the role as Chairman of the Board of Directors of the Company and remains
subject to the termination rights contained in her employment agreement. Ms.
Silverman is to receive an annual salary of $250,00 per year during the six
month period commencing January 1, 1996 and thereafter will be paid an annual
salary of $100,000 and is no longer entitled to participate in the Executive
Bonus Plan. Ms. Silverman was also granted one demand registration right under
the Registration Rights Agreement, subject to certain conditions and limitations

The Company hired Joseph F. Pesce as its Chief Financial Officer commencing
October 3, 1994 pursuant to an offer letter dated September 9, 1994. In such
letter, the Company agreed to pay Mr. Pesce salary at the annual rate of
$200,000 during 1994 and at the annual rate of $225,000 during 1995. Mr. Pesce
also

10
<PAGE>

received a $50,000 bonus at the commencement of his employment with the Company
and $25,000 cash compensation in consideration of certain benefits forfeited
upon termination of his prior employment. Mr. Pesce received a $50,000 bonus
upon attainment of certain performance criteria in 1995, and is also entitled to
receive one year of severance benefits in the event his employment by the
Company is terminated without cause.

The Company entered into letter agreements, dated June 30, 1995, with each
of Mr. Pesce, Mr. McCarthy and Ms. Kirby, pursuant to which such individuals are
entitled to receive one year's salary, along with certain other benefits, in the
event the employment of such individuals is terminated (i) by the Company
without Cause (as defined therein), (ii) by said employee with Good Reason (as
defined therein) or (iii) a change in control of the Company takes place and
said employees are not offered employment by any successor entity on
substantially the same terms and responsibilities he or she had immediately
prior to such change in control.

11
<PAGE>

PERFORMANCE GRAPH

The graph set forth below compares the change in the Company's cumulative total
stockholder return on its Common Stock (as measured by dividing (i) the sum of
(A) the cumulative amount of dividends for the period indicated, assuming
dividend reinvestment, and (B) the difference between the Company's share price
at the end of the period and May 3, 1995, the date the Company's Common Stock
commenced trading on the Nasdaq National Market; by (ii) the share price at
December 31, 1995 with the cumulative total return of the Nasdaq Stock Market
(U.S.) Index and the cumulative total return of the Nasdaq Health Service Stocks
Index (assuming the investment of $100 in the Company's Common Stock, the Nasdaq
Stock Market (U.S.) Index and the Nasdaq Non-Financial Stocks Index on December
31, 1995, and reinvestment of all dividends). During 1995, the Company paid no
dividends.

[GRAPH APPEARS HERE]

Nasdaq Nasdaq
Measurement period Health Services Stock
(Fiscal Year Covered) CRA Index Market (U.S.)
- --------------------- -------- ----- -------------
<S> <C> <C> <C>
Measurement PT -
05/03/95 $100.00 $100.00 $100.00

FYE 12/31/95 $136.72 $137.57 $125.72

</TABLE>

12
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth all compensation awarded to, earned by or paid to
the Company's Chief Executive Officer and each of the Company's four most highly
compensated executive officers (other than the Chief Executive Officer) whose
total annual salary and bonus exceeded $100,000 for all services rendered in all
capacities to the Company and its subsidiaries for the Company's fiscal year
ended December 31, 1995 (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

Long Term
Compensation
----------------
Awards
----------------
Annual Compensation Securities
------------------------------------------------------ Underlying
Name and Other Annual Options/ All Other
Principal Position Year Salary Bonus Compensation SARs(#)(2) Compensation (3)
- ----------------------------------- ---- ------ ----- --------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>

Lois E. Silverman 1995 $250,000 $ 87,500 --- --- $4,620
Chairman of the Board and 1994 258,654 --- --- --- 3,880
Chief Executive Officer(1)

Donald J. Larson 1995 $250,000 $ 87,500 --- --- $4,620
President and Chief 1994 258,654 98,000(4) --- --- 3,880
Operating Officer

Joseph F. Pesce 1995 $225,000 $134,375 $1,575(5) 9,700 $2,250
Vice President-Finance 1994 50,000(6) 50,000(7) --- 47,000 ___
and Administrative, Chief
Financial Officer and Treasurer

John A. McCarthy, Jr. 1995 $144,192 $ 56,250 $ 586(5) 28,500 $1,484
Vice President-Corporate 1994 59,231(6) 15,000 --- 23,500 ---
Development
Anne E. Kirby 1995 $140,400 $ 52,500 $ 586(5) 5,000 $2,868
Vice President-Marketing 1994 137,554 15,000 --- 47,000 3,051

- --------------
</TABLE>
(1) Ms. Silverman resigned her position as Chief Executive Officer effective
January 1, 1996.

(2) Represents the number of shares of Common Stock issuable upon exercise of
options granted to the Named Executive Officers in 1995.

(3) Represents matching contributions by the Company to its 401(k) Plan.

(4) This amount was paid by the Company to Mr. Larson as a bonus in connection
with the Recapitalization.

(5) Represents the discount received on the purchase of stock pursuant to the
CRA Managed Care, Inc 1995 Employee Stock Purchase Plan.

(6) Messrs. Pesce and McCarthy joined the Company in October 1994 and August
1994, respectively. On an annualized basis, such individuals would have been
paid cash compensation in excess of the amounts shown in the table for 1994.

(7) Does not include an additional $25,000 paid to Mr. Pesce in consideration of
certain benefits forfeited upon termination of his prior employment.

13
<PAGE>

GRANTS OF STOCK OPTIONS

The following table sets forth certain information with respect to
individual grants of stock options to the Named Executive Officers during the
year ended December 31, 1995.

1995 OPTION GRANTS
<TABLE>
<CAPTION>

Individual Grants Potential Realization
---------------------------------- Value at Assumed Annual
% of Total Rates of Stock Price
Options Appreciation for Option
Granted to Term(1)
Option Employees Exercise Expiration -----------------------
Name Grants(2) in 1995 Price Date 5% 10%
---- --------- ------- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Lois E. Silverman.......... ---- ---- ---- ---- ---- ----
Donald J. Larson........... ---- ---- ---- ---- ---- ----
Joseph F. Pesce(3)......... 4,700 3.85% $ 5.89 7/31/05 $18,537 $ 47,710
5,000 4.10 22.75 4/24/06 76,196 196,040
------ ----- ------- --------
9,700 7.95% 94,733 234,750

John A. McCarthy, Jr. (3).. 23,500 19.26 5.89 7/31/05 92,685 238,549
5,000 4.10 22.75 4/24/06 76,196 196,040
------ ----- ------- --------
28,500 23.36% 168,881 434,589

Anne E. Kirby(4)........... 5,000 4.10 22.75 4/24/06 76,196 196,040

- ---------------------
</TABLE>

(1) The potential realizable value of the options reported above was calculated
by assuming 5% and 10% annual rates of appreciation above the exercise price
of the Common Stock from the date of grant of the options until the
expiration of the options. These assumed annual rates of appreciation were
used in compliance with the rules of the Securities and Exchange Commission
and are not intended to forecast future price appreciation of the Common
Stock of the Company or to take into account the immediate increase in
potential realizable value that will occur. The actual value realized from
the options could be higher or lower than the values reported above,
depending upon the future appreciation or depreciation of the Common Stock
during the option period, the optionholder's continued employment through
the option period and the timing of exercise of the options.

(2) These options provide for accelerated vesting each year with respect to ten
to twenty percent of the shares subject to the option in the event certain
financial tests are met, commencing with respect to the fiscal year ended
December 31, 1995.

(3) Does not include options to purchase 20,000 shares at $22.12 per share and
25,000 shares at $36.12 per share granted after December 31, 1995.

(4) Does not include options to purchase 10,000 shares at $36.12 per share
granted after December 31, 1995.

14
<PAGE>

STOCK OPTION EXERCISES AND DECEMBER 31, 1995 STOCK OPTION VALUE

Set forth in the table below is information concerning the value of stock
options held at December 31, 1995 by the Named Executive Officers of the
Company. None of the Named Executive Officers exercised any stock options during
the year ended December 31, 1995.

AGGREGATE OPTION EXERCISES IN LAST FISCAL
YEAR AND OPTION VALUES AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-The-Money Options
Options at December 31, 1995 at December 31, 1995(1)
Shares Acquired ------------------------------ ------------------------------

Name on Exercise Value Realized Exercisable Unexercisable Exercisable Unexercisable

Lois E. Silverman.......... ---- ---- ---- ---- ---- ----
Donald J. Larson........... ---- ---- ---- ---- ---- ----
Joseph F. Pesce............ ---- ---- 20,740 35,960 $315,544 $510,881
John A. McCarthy, Jr....... ---- ---- 15,100 36,900 225,389 525,907
Anne E. Kirby.............. ---- ---- 19,800 32,200 300,518 450,777
George H. Conrades......... ---- ---- 7,833 15,667 125,215 250,433
Mitchell T. Rabkin......... ---- ---- ---- 23,500 ---- 375,648
</TABLE>
__________

(1) The amounts set forth represent the difference between the fair market value
of the Common Stock underlying the options at December 31, 1995 ($21.88 per
share) and the exercise price of the options ($5.89 for options granted on
or prior to January 31, 1995 and $22.75 for options granted on October 24,
1995), multiplied by the applicable number of options.

2 . AMENDMENT TO THE CRA MANAGED CARE, INC. 1994 TIME
ACCELERATED RESTRICTED STOCK OPTION PLAN

GENERAL INFORMATION

The 1994 Time Accelerated Restricted Stock Option Plan (the "1994 Plan").
The 1994 Plan is intended to encourage ownership of the stock of the Company by
employees of the Company and its subsidiaries, to induce qualified personnel to
enter and remain in the employ of the Company or its subsidiaries and to provide
additional incentive for participants to promote the success of the Company's
business.

The total number of shares of the Company's Common Stock for which options
may be granted under the 1994 Plan is 376,000 shares, subject to proportional
adjustment for capital changes. Shares issued under the 1994 Plan may be either
authorized but unissued shares, or treasury shares. If an option granted under
the 1994 Plan expires or terminates, the shares of stock allocable to the
unexercised portion of the option may again be optioned thereunder. Set forth
below is a summary of the material provisions of the 1994 Plan.

15
<PAGE>

PROPOSED AMENDMENT TO THE 1994 PLAN

The Board of Directors has adopted an amendment to the 1994 Plan, subject
to approval by the stockholders, to increase the aggregate number of shares that
may be granted thereunder from 376,000 to 976,000 in order to ensure that a
sufficient number of shares are available for option grants in the future.

Set forth below is a summary of the principal provisions of the 1994 Plan.
The Board of Directors recommends that the stockholders approve the amendment to
the 1994 Plan. The affirmative vote of the holders of at least a majority of
the Common Stock voting in person or by proxy at the meeting will be required
for the approval of the amendment to the 1994 Plan.

ADMINISTRATION, TERMINATION AND AMENDMENT

The 1994 Plan is currently administered by the Board of Directors of the
Company. The directors are divided into 3 classes, each consisting of 2
directors. Each year a single class of directors is elected for a three year
term. No member of the Board of Directors shall act upon any matter exclusively
effecting any option granted or to be granted to himself or herself under the
1994 Plan. The decision of the Board of Directors as to all questions of
interpretation and application of the 1994 Plan shall be final, binding and
conclusive on all persons.

The Board of Directors may, at its discretion, delegate its powers, duties
and responsibilities to a committee consisting of two or more directors, each of
whom is a disinterested person as that term is defined in the 1994 Plan. The
members of the committee are appointed by the Board of Directors and the Board
may at any time appoint a member or members of the committee in substitution for
or in addition to the member or members then in office and may fill vacancies on
the committee however caused.

For purposes of the 1994 Plan, the term "disinterested person" has the
meaning assigned to that term in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (the "1934 Act").

The Company may modify, amend or terminate the 1994 Plan at any time,
provided that without the approval of the holders of at least a majority of the
outstanding shares of Common Stock, the Company may not increase the maximum
number of shares for which options may be granted under the 1994 Plan or change
the designation of the class of persons eligible to receive options under the
1994 Plan or make any other change in the 1994 Plan which requires stockholder
approval under applicable law or regulations. Termination or any modification
or amendment of the 1994 Plan shall not, without the consent of the optionee,
affect his or her rights under an option theretofore granted to him or her.
Unless sooner terminated, the 1994 Plan will terminate fifteen years and six
months from June 6, 1994 (the date upon which the 1994 Plan was adopted by the
Board of Directors of the Company).

ELIGIBILITY TO PARTICIPATE

The individuals who are eligible to receive options under the 1994 Plan are
key employees of the Company or its subsidiaries, but directors who are not
otherwise employees of the Company or a subsidiary are not eligible. Options
granted to eligible individuals are non-qualified options which are not intended
to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").

TERMS AND PROVISIONS OF OPTIONS

The exercise price of options granted under the 1994 Plan is the fair
market value for the Common Stock underlying the option at the time the option
is granted. If the Common Stock of the Company is then listed on any national
securities exchange or on Nasdaq National Market System, the fair market value
shall be the mean between the high and low sales prices, if any, on the largest
such exchange on the date of the grant of the option

16
<PAGE>

or, if none, shall be determined by taking a weighted average of the means
between the highest and lowest sales prices on the nearest date before and the
nearest date after the date of the grant in accordance with Treasury Regulations
Section 25.2512-2. If the shares are not then listed on any such exchange, the
fair market value of such shares shall be the mean between the closing "Bid" and
the closing "Ask" prices, if any, as reported on the National Association of
Securities Dealers Automated Quotation System other than the National Market
System ("Nasdaq") for the date of the grant of the option, or, if none, shall be
determined by taking a weighted average of the means between the highest and
lowest sales prices on the nearest date before and the nearest date after the
date of grant in accordance with Treasury Regulations Section 25.2512-2. If the
shares are not then listed on such exchange or quoted in Nasdaq, fair market
value shall be the mean between the average of the "Bid" and the average of the
"Ask" prices, if any, as reported in the National Daily Quotation Service for
the date of the grant of the option, or, if none, shall be determined by taking
a weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the fair market value cannot be
determined under the preceding three sentences, it shall be determined in good
faith by the Board of Directors.

Options granted under the 1994 Plan are not exercisable until the tenth
anniversary of the date of grant, provided, however, that the exercisability of
such option may be accelerated on such terms as may be set forth in the
agreement evidencing such options as determined by the Board of Directors.

The duration of any option granted under the 1994 Plan shall be specified
by the Board of Directors, but in no event shall an option be exercisable after
the expiration of ten years and six months from the date of grant.

Options shall be exercised by giving written notice to the Company, signed
by the person exercising the option, stating the number of shares with respect
to which the option is being exercised, accompanied by payment of the option
price of such shares, which payment shall be made in cash or with the consent of
the Company, in whole or in part in shares of the Common Stock of the Company
already owned by the person exercising the option.

Options granted to any participant who ceases to be an employee of the
Company or one of its subsidiaries, other than by death, may be exercised within
30 days after the date the participant ceases to be an employee, or prior to the
date on which the option expires by its terms, whichever is earlier, but shall
thereafter terminate, unless such termination of employment is because the
participant has become disabled within the meaning of Section 23(e)(3) of the
Code, in which event such option may be exercised prior to the last day of the
sixth month after the date on which such participant ceases to be an employee,
but, in any event, prior to the date on which the option expires by its terms.
In case of termination of employment other than by death, the option shall be
exercisable only to the extent that the right to purchase shares under such
option has accrued and is in effect on the date of such termination of
employment.

In the event of death of an optionee, the option must be exercised prior to
the last day of the twelfth month after the date of death of such participant or
prior to the date on which the option expires by its terms, whichever is
earlier.

An option that is subject to early termination as discussed above shall be
exercisable only to the extent that the right to purchase shares under such
option has accrued and is in effect on the date of termination.

The high and low sale prices of the Company's Common Stock on the Nasdaq
National Market on May 6, 1996 were $42.75 and $40.75, respectively.

17
<PAGE>

TAX EFFECTS

Options granted under the 1994 Plan are non-qualified stock options, and
are not intended to meet the requirements of Section 422 of the Code.

No income is recognized by the optionee on the grant of a non-qualified
stock option. On the exercise by an optionee of a non-qualified option,
generally the excess of the fair market value of the stock when the option is
exercised over its cost to the optionee will be (a) taxable to the optionee as
ordinary income and (b) generally deductible for income tax purposes by the
Company.

The Internal Revenue Service will treat the exercise of a non-qualified
stock option with already owned stock of the Company as two transactions.
First, there will be a tax-free exchange of the old shares for a like amount of
new shares under Section 1036 of the Code, with the new shares retaining the
bases and holding periods of the old shares. Second, the issuance of additional
new shares (representing the spread between the fair market value of all the new
shares and the option price) is taxable to the employee as ordinary income under
Section 83 of the Code, as is the case with any non-qualified option. The new
shares will have a basis equal to the spread between the fair market value of
the new shares and the option price.

The optionee's tax basis in his stock will equal his cost for the stock
plus the amount of ordinary income he had to recognize with respect to the non-
qualified stock option. Accordingly, upon a subsequent disposition of stock
acquired upon the exercise of a non-qualified option, the optionee will
recognize short-term or long-term capital gain or loss, depending upon the
holding period of the stock, equal to the difference between the amount realized
upon disposition of the stock by the optionee and his basis in the stock.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE AMENDING THE 1994 PLAN.

DISCLOSURE REGARDING THE CRA MANAGED CARE, INC. 1994 NON-QUALIFIED STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS

GENERAL

The 1994 Non-Qualified Stock Option Plan for Non-Employee Directors (the
"Director Plan") was adopted by the Board of Directors on June 6, 1994 and
approved by the stockholders of the Company on June 6, 1994. The Director Plan
is intended to attract and retain the services of experienced and knowledgeable
independent directors who are not employees of the Company for the benefit of
the Company and its stockholders and to provide additional incentive for such
directors to continue to work in the best interests of the Company and its
stockholders through continuing ownership of its Common Stock.

The Director Plan provides for the grant of non-qualified options not
intended to meet the requirements of Section 422 of the Code for the purchase of
shares of the Company's Common Stock to each Director of the Company who is not
otherwise an employee of the Company. The maximum number of shares for which
options may be granted under the Director Plan shall not exceed 94,000 shares in
the aggregate, subject to adjustment for changes in capitalization.

18
<PAGE>

ADMINISTRATION, TERMINATION AND AMENDMENT

The Director Plan is administered by a Committee (the "Committee")
consisting of two or more members, each of whom is a disinterested person as
that term as defined in the Director Plan. The members of the committee are
appointed by the Board of Directors and the Board may at any time appoint a
member or members of the committee in substitution for or in addition to the
member or members then in office and may fill vacancies on the committee however
caused. No person shall be appointed to the committee who has been within one
year of his appointment to the committee granted or awarded any equity
securities pursuant to the Director Plan or any other plan of the Company or any
of its affiliates entitling participants therein to acquire stock, stock options
or stock appreciation rights of the Company or any of its affiliates, and no
person shall be a member of the committee who is not a Director of the Company.
Decisions of this committee as to all questions of interpretation and
application of this Plan shall be final and binding on all persons. On April 5,
1996, the members of the Committee were Lois E. Silverman, Donald J. Larson,
Jeffrey R. Jay and William Laverack, Jr.

For purposes of the Director Plan, the term "disinterested person" as the
meaning assigned to that term in Rule 16b-3 promulgated under the 1934 Act.

The Director Plan will terminate fifteen years from the date upon which it
was approved by the stockholders, but the Board of Directors may at any time
terminate, modify or amend it; provided, however, that no modification or
amendment may be made more than once every six months other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the rules
thereunder, if the effect of such amendment or modification would be to change
the (i) the requirements for eligibility under the Director Plan, (ii) the
timing of the grants of options to be granted under the Director Plan or the
exercise price or vesting schedule thereof; or (iii) the number of shares
subject to options to be granted under the Director Plan either in the aggregate
or to one director. Any amendment to the provisions of the Director Plan which
(i) materially increases the number of shares which may be subject to options
granted thereunder, (ii) materially increases the benefits accruing to
participants, or (iii) materially modifies the requirements for eligibility to
participate in the Director Plan shall be subject to approval by the
stockholders of the Company. Termination or any modification or amendment of
the Director Plan shall not, without the consent of an optionee, affect such
optionee's rights under an option previously granted.

TERMS AND PROVISIONS OF OPTIONS

The exercise price for options granted under the Director Plan is the fair
market value of the Company's Common Stock covered by the option on the date of
grant. The options granted under the Director Plan shall become exercisable at
such time as is set forth in the agreement evidencing such options.

Options granted under the Director Plan are not assignable or transferable
by the optionee other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act, or the rules thereunder, or to
a trust created for the benefit of the optionee, the optionee's spouse, or a
family member of the optionee or the optionee's spouse. To the extent that the
right to exercise an option has accrued, an option may be exercised in full or
in part by giving written notice, signed by the person or persons exercising the
option, to the Company, stating the number of shares with respect to which the
option is being exercised, accompanied by payment in full for such shares which
payment may be in cash or in whole or in part in shares of the Common Stock of
the Company already owned for a period of at least six months by the person or
persons exercising the option, valued at fair market value, on the date of
exercise; provided, however, that there shall be no such exercise at any one
time as to fewer than 100 shares, or all of the remaining shares then
purchasable by the person or persons exercising the option if fewer than 100
shares.

19
<PAGE>

In the event of the death of an optionee, the option granted under the
Director Plan may be exercised, to the extent that the optionee was entitled to
do so on the date of death by the estate of the optionee, any person or persons
who acquired the right to exercise such option by bequest or inheritance or
otherwise by reason of the death of the optionee. The option may be exercised
at any time within ten years after the date of grant of such option.

In the event that an optionee ceases to be a director of the Company, other
than by virtue of death, the option granted to such optionee may be exercised
only to the extent that the right to exercise the option has accrued and is in
effect on the date that the optionee ceased to be a director. The option may be
exercised at any time within ten years after the grant of such option unless the
termination as a director was by the Company for cause, in which case the option
shall terminate immediately at the time the optionee ceases to be a director of
the Company.

The Director Plan provides that the number of shares issuable thereunder
shall be adjusted to prevent dilution in the event of any reorganization,
merger, consolidation, recapitalization, reclassification, stock split-up,
combination of shares or stock dividend.

The high and low sales prices of the Company's Common Stock on the Nasdaq
National Market on May 6, 1996 were $42.75 and $40.75, respectively.

TAX EFFECTS

Options granted under the Director Plan are intended to be non-qualified
stock options.

No income is recognized by the optionee on the grant of a non-qualified
stock option. On the exercise by an optionee of a non-qualified option, the
excess of the fair market value of the stock when the option is exercised over
its cost to the optionee will be (a) taxable to the optionee as ordinary income
and (b) generally deductible for income tax purposes by the Company.

The optionee's tax basis in his stock will equal his cost for the stock
plus the amount of ordinary income he had to recognize with respect to the non-
qualified stock option. Accordingly, upon a subsequent disposition of stock
acquired upon the exercise of a non-qualified option, the optionee will
recognize short-term or long-term capital gain or loss, depending upon the
holding period of the stock and the difference between the amount realized upon
disposition of the stock by the optionee and his basis in the stock.

20
<PAGE>

DISCLOSURE REGARDING THE CRA MANAGED CARE, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN

GENERAL INFORMATION

The 1995 Employee Stock Purchase Plan (the "Stock Purchase Plan") is
intended to provide a means whereby eligible employees may purchase Common Stock
of the Company through payroll deductions. The Stock Purchase Plan is intended
to provide a further incentive for employees to promote the best interests of
the Company and to encourage stock ownership by employees in order that they may
participate in the Company's economic growth.

Two Hundred Thirty-Five Thousand shares of the Common Stock of the Company
may be issued pursuant to the Stock Purchase Plan. The shares issued pursuant
to the Stock Purchase Plan shall be either shares of the Company's authorized
but unissued Common Stock or shares of Common Stock reacquired by the Company
and held as treasury shares. The number of shares issuable under the Stock
Purchase Plan is subject to appropriate adjustment in the event of a stock
split, a subdivision or consolidation of shares of Common Stock, capital
adjustments or payments of stock dividends or distributions or other increases
or decreases in the outstanding shares of Common Stock effected without receipt
of consideration by the Company.

Set forth below is a summary of the principal provisions of the Stock
Purchase Plan.

ELIGIBILITY

All persons employed by the Company or one of its subsidiaries are eligible
to participate in the Stock Purchase Plan, except (i) persons whose customary
employment is less than twenty hours per week or five months or less per year;
and (ii) persons who have been employed by the Company for less than six months
on the first day of the purchase period, with the exception of persons
previously eligible. In addition, persons who are deemed for purposes of
Section 423(b)(3) of the Code, to own stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or a
subsidiary are ineligible to participate in the Stock Purchase Plan. Employment
will be treated as continuing intact while a participating employee is on
military leave or other bona fide leave of absence, for up to 90 days or for so
long as such employee's right to re-employment is guaranteed by statute or
contract, if longer than 90 days.

ADMINISTRATION

The Stock Purchase Plan shall be administered by the Board of Directors or
the Committee appointed from time to time by the Board of Directors. Committee
members shall be ineligible to participate under the Stock Purchase Plan. All
members of the Committee shall serve at the discretion of the Board. The Board
of Directors or the Committee, if one has been appointed, is vested with full
authority to make, administer and interpret such equitable rules and regulations
regarding the Stock Purchase Plan as it may deem advisable. Determinations by
the Board of Directors, or the Committee, as to the interpretation and operation
of the Stock Purchase Plan shall be final and conclusive.

The Stock Purchase Plan was adopted by the Board of Directors and approved
by the Company's stockholders on March 15, 1995 and April 28, 1995,
respectively, and became effective on May 10, 1995. The Stock Purchase Plan
will continue in effect through June 30, 2004, provided, however, that the Board
of Directors shall have the right to terminate the Stock Purchase Plan at any
time. In the event of the expiration of the Stock Purchase Plan or its
termination, all options then outstanding under the Stock Purchase Plan shall
automatically be cancelled and the entire amount credited to the account of each
participant hereunder shall be refunded to each such participant. In addition,
the Board of Directors may amend the Stock Purchase Plan at any time without the
consent of the participants, but no such amendment shall adversely affect
options previously granted under the

21
<PAGE>

Stock Purchase Plan and no such amendment (without approval by the Company's
stockholders) may: (a) increase the total number of shares of Common Stock which
may be purchased by all participants, (b) change the class of employees eligible
to receive options under the Stock Purchase Plan; (c) decrease the purchase
price; (d) extend a purchase period thereunder; or (e) extend the term of the
Stock Purchase Plan. The termination of the Stock Purchase Plan is not to be
deemed an action which adversely affects options previously granted under the
Stock Purchase Plan.

OPERATION OF THE STOCK PURCHASE PLAN

There shall be two "purchase periods" within each full calendar year, one
commencing on January 1 of each calendar year and continuing through June 30 of
such calendar year, and the second commencing on July 1 of each calendar year
and continuing through December 31 of such calendar year. The first purchase
period commenced on July 1, 1995. Eligible employees may elect to become
participants in the Stock Purchase Plan for a purchase period by completing a
stock purchase agreement prior to the first day of the purchase period for which
the election is made. The election to participate is effective for the purchase
period for which it is made and there is no limit on the number of purchase
periods for which an eligible employee may elect to become a participant in the
Stock Purchase Plan. In the stock purchase agreement, the participating
employee authorizes regular payroll deductions amounting to such full percentage
of the participant's basic compensation as the participant shall designate.
Such payroll deductions cannot amount to less than one percent (1%) nor more
than ten percent (10%) of the participant's basic compensation and cannot exceed
$25,000 per year.

All sums deducted from the basic compensation of participants will be
credited to a stock purchase account established for each participant on the
books of the Company, but prior to use of such funds for the purchase of shares
of the Company's Common Stock in accordance with the Stock Purchase Plan, the
Company may use such funds for any valid corporate purpose. The Company is
under no obligation to pay interest on funds credited to a participant's stock
purchase account in any event.

The purchase price of shares of the Company's Common Stock under the Stock
Purchase Plan is the lower of (i) eighty-five percent (85%) of the fair market
value of a share of Common Stock for the first business day of the relevant
purchase period, or (ii) eighty-five percent (85%) of such value for the
relevant exercise date. The fair market value on a given day is the mean
between the high and low sales prices of a share of Common Stock of the Company
in the over-the-counter market. Each participating employee receives an option,
effective on the first day of the purchase period, to purchase shares of Common
Stock on the exercise date, which is the last business day of the purchase
period. The number of shares which a participant may purchase under the option
is the quotient of the aggregate payroll deductions in the purchase period
authorized by the participant, divided by the purchase price. No employee can
be granted an option under the Stock Purchase Plan to purchase shares of the
Company's Common Stock having a fair market value (as of the date the option to
purchase is granted) in any one calendar year of in excess of $25,000. No
employee can be granted an option in one purchase period for more than 500
shares, or such other number of shares as determined from time to time by the
Board or the Committee, as the case may be. The Stock Purchase Plan defines
basic compensation as the regular rate of salary or wages in effect immediately
prior to a purchase period, before any deductions or withholdings, and excluding
overtime, bonuses, sales commissions and amounts paid in reimbursement for
expenses.

Each participating employee automatically and without any act on his part
will be deemed to have exercised his option on the exercise date of the purchase
period in which he is participating, to the extent that the balance in the
participant's account under the Stock Purchase Plan is sufficient to purchase,
at the purchase price in effect for the purchase period, whole shares of the
Company's stock subject to his option. A participant has the right to cancel
his participation in the Stock Purchase Plan for a purchase period by delivering
a notice of cancellation to the Company not later than ten (10) days before the
exercise date for such purchase period. In the event of such cancellation, the
participant will receive in cash the amount credited to his account. Any
participant

22
<PAGE>

who so withdraws from the Stock Purchase Plan may again become a participant at
the start of the next purchase period.

Upon dissolution or liquidation of the Company or a merger or consolidation
in which the Company is not the surviving entity, every option outstanding under
the Stock Purchase Plan shall terminate, and each participant shall be refunded
the sums then in his account.

Shares of Common Stock purchased under the Stock Purchase Plan shall be
deemed to have been issued and sold at the close of business on the exercise
date, and prior to that date a participant shall not have any rights or
privileges as a shareholder of the Company with respect to such shares. Shares
purchased under the Stock Purchase Plan shall be registered either in the
participant's name or jointly in the names of the participant and his spouse as
the participant shall designate in his stock purchase agreement. Such
designation may be changed at any time by filing notice with the Company.

Upon the participant's death or other termination of employment, his
participation in the Stock Purchase Plan shall cease and the entire balance
credited to his account under the Stock Purchase Plan shall be automatically
refunded to him, or (in the event of death) to the participant's designated
beneficiary, if any, under a group insurance plan of the Company covering him,
or otherwise to his estate.

The right to purchase shares of Common Stock under the Stock Purchase Plan
is exercisable only by the participant during his lifetime and is not
transferable by him. The grant of an option under the Stock Purchase Plan does
not imply any right to continued employment with the Company for any
participant.

The high and low sale prices of the Company's Common Stock on the Nasdaq
National Market on May 6, 1996 were $42.75 and $40.75, respectively.

TAX EFFECTS

The Stock Purchase Plan is not a "qualified plan" within the meaning of
Section 401(a) of the Code. The Stock Purchase Plan is designed to satisfy the
requirements of Section 423 of the Code. Accordingly, an employee incurs no tax
liability on the grant of an option to purchase shares under the Stock Purchase
Plan nor on the acquisition of the shares upon exercise of the option.

An employee will obtain favorable tax treatment on the disposition of
shares acquired under the Stock Purchase Plan if the shares are held by the
employee for at least two years from the first day of the purchase period in
which the shares are purchased. Dispositions of the shares after the expiration
of the two year period are called "qualifying dispositions." Upon a qualifying
disposition, there will be included in the employee's gross income as
compensation taxable at ordinary income rates (and not as capital gain) the
lesser of (1) ten percent (10%) of the fair market value of the shares on the
first day of the purchase period or (2) the amount by which the fair market
value of the shares at the time of disposition exceeded the actual purchase
price. The basis of the employee's shares, which is initially equal to the
actual purchase price, is increased by an amount equal to the amount includable
as compensation in his or her gross income, and any gain or loss computed with
reference to such adjusted basis which is recognized at the time of the
disposition will be long-term capital gain or loss.

If an employee sells the shares before the expiration of the required
holding period, which is a disqualifying disposition, the employee realizes
ordinary income (compensation) in the year of the disposition to the extent of
the excess of the fair market value of the shares on the last day of the
purchase period over the actual purchase price. The basis of the employee's
shares, which is initially equal to the actual purchase price, is increased by
an amount equal to the amount includable as compensation in his or her gross
income, and any gain or loss computed with reference to such adjusted basis
which is recognized at the time of disposition will be capital gain or loss,
either short term or long term, depending upon the holding period for the
shares.

23
<PAGE>

The Company is not entitled to a deduction for amounts treated as ordinary
income to an employee except to the extent of ordinary income recognized by an
employee upon a disqualifying disposition.

Special tax rules may apply to persons subject to Section 16(b) of the 1934
Act.

NEW PLAN BENEFITS

It is not possible to state the employees who will receive stock options or
awards under the 1994 Plan or the Stock Purchase Plan in the future, nor the
amount of options or awards which will be granted thereunder. The following
table provides information with respect to options granted through April 30,
1996 under the 1994 Plan and the Stock Purchase Plan. The table also provides
information as to options which have been granted through April 30, 1996 under
the Director Plan. See "Ratification, Confirmation and Approval of, and
Amendment to, the CRA Managed Care, Inc., 1994 Time Accelerated Restricted Stock
Option Plan", "Ratification, Confirmation and Approval of the CRA Managed Care,
Inc. 1994 Non-Qualified Stock Option Plan for Non-Employee Directors" and
"Ratification, Confirmation and Approval of the CRA Managed Care, Inc. 1995
Employee Stock Purchase Plan" for a description of the options which are
provided for under those plans.

1994 Plan Director Plan Stock Purchase Plan
-------------------- -------------------- -------------------------

Dollar Number Dollar Number Dollar Number
Name and Position Value(1) of Units Value of Units Value(2) of Units
- ----------------- -------- -------- ------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>

Lois E. Silverman, Chairman
of the Board........................... ---- ---- ---- ---- ---- ----

Donald J. Larson, President, Chief
Executive Officer and Director......... ---- ---- ---- ---- ---- ----

Joseph F. Pesce, Vice President-Finance
and Administration, Chief Financial
Officer and Treasurer.................. ---- 101,700 ---- ---- $ 1,575 500

John A. McCarthy, Vice
President-Corporate Development........ ---- 97,000 ---- ---- 586 186

Anne E. Kirby, Vice President-Marketing. ---- 62,000 ---- ---- 586 186

George H. Conrades, Director............ ---- ---- (3) 23,500 ---- ----

Jeffrey R. Jay, Director................ ---- ---- ---- ---- ---- ----

William Laverack, Jr.................... ---- ---- ---- ---- ---- ----

Mitchell T. Rabkin...................... ---- ---- (3) 23,500 ---- ----

Executive Officers as a Group........... (4) 260,700 ---- ---- $ 2,747 872

Directors as a Group (excluding
Executive Officers).................... ---- ---- (3) 47,000 ---- ----

</TABLE>

24
<PAGE>

1994 Plan Director Plan Stock Purchase Plan
-------------------- -------------------- -------------------------

Employees as a Group (excluding
Executive Officers).................... (5) 371,050 ---- ---- $54,895 17,427

</TABLE>

(1) The dollar value of the options is equal to the difference between the
exercise price of the options granted and the fair market value of the Company's
Common Stock at the date of the exercise.

(2) The dollar value of the options is equal to the difference between the
exercise price of the options granted and the fair market value of the Company's
Common Stock at the date of exercise. The exercise price per share was $18.73.

(3) The dollar value of the options is equal to the difference between the
exercise price of the options granted and the fair market value of the Company's
Common Stock at the date of exercise. The exercise price per share is $5.89.

(4) The exercise price per share is $5.89 for 145,700 of the options above which
were granted on or prior to January 31, 1995, $22.75 for 15,000 of options which
were granted on October 24, 1995, $22.12 for 40,000 of the options granted on
January 3, 1996 and $36.12 for 60,000 options granted on April 10, 1996.

(5) The exercise price per share is $5.89 for 110,450 of the options above which
were granted on or prior to January 31, 1995, $22.75 for 78,800 of options
granted on October 24, 1995, and $36.12 for 181,800 of options granted on April
10, 1996.

3. INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors has appointed Arthur Andersen LLP, as independent
accountants to audit the consolidated financial statements of the Company and
its subsidiaries for the fiscal year ending December 31, 1996. Arthur Andersen
LLP, certified public accountants, has served as independent accountants since
1994 to audit the financial statements of the Company. Upon the recommendation
of the Company's Board of Directors, effective December 5, 1994, the Company
engaged Arthur Andersen LLP to serve as the Company's independent accountants,
dismissing KPMG Peat Marwick LLP. KPMG Peat Marwick LLP's report on the
Company's financial statements for the years ended December 31, 1992 and 1993
did not contain an adverse opinion or disclaimer of opinion nor were any reports
qualified or modified as to uncertainty, audit scope or accounting principles.
The change in independent accountants did not result from any disagreement
between the Company and KPMG Peat Marwick LLP on any matter of accounting
principles, practices, financial statement disclosure or auditing scope or
procedure.

A representative of Arthur Andersen LLP is expected to be present at the
meeting and will have the opportunity to make a statement if he or she so
desires and to respond to appropriate questions.

25
<PAGE>

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF ARTHUR
ANDERSEN LLP.

4. PROPOSED AMENDMENT INCREASING THE NUMBER OF SHARES
OF COMMON STOCK WHICH THE COMPANY HAS THE AUTHORITY TO ISSUE
FROM 10,000,000 SHARES TO 40,000,000 SHARES

On April 29, 1996, the Board of Directors adopted the following resolution:

RESOLVED: That this Board of Directors deems it advisable that the Articles of
Organization of this corporation be amended so as to increase the
total number of shares of Common Stock which this corporation shall
have authority to issue from 10,000,000 shares, with a par value of
$.01 per share, to 40,000,000 shares, with a par value of $.01 per
share.

The Board of Directors also directed that the proposed amendment be
submitted for action at the Meeting of Stockholders to be held on May 21, 1996.

Increase in Number of Shares of Common Stock. If approved by the
stockholders, the amendment will authorize the Company to issue an additional
30,000,000 shares of the Company's Common Stock, par value $.01 per share. As
of April 5, 1996 there were 10,000,000 shares of Common Stock authorized, of
which 7,373,024 shares were outstanding, 467,050 shares were reserved for
issuance pursuant to the Company's stock option plans and 216,701 shares were
reserved for issuance pursuant to the Company's Employee Stock Purchase Plan.
The Board of Directors is empowered under the Articles of Organization of the
Company to issue shares of authorized stock without further stockholder
approval. The holders of the Company's Common Stock do not have preemptive
rights.

Appraisal Rights in Respect of the Proposed Amendment. Under the applicable
provisions of the Massachusetts Business Corporation Law, the Company's
stockholders have no appraisal rights with respect to the proposed amendment.

Recommendation of the Board of Directors. The Board of Directors believes
that the number of authorized shares of Common Stock should be increased by
30,000,000 to provide sufficient shares for use for such corporate purposes as
may be determined advisable by the Board of Directors, without further action or
authorization by the stockholders. Such corporate purposes might include the
acquisition of capital funds through the sale of stock, the acquisition of other
corporations or properties, or the declaration of stock dividends in the nature
of a stock split. The Board of Directors believes that the availability of
shares would afford the Company flexibility in considering and implementing any
of the corporate transactions enumerated. The Company considers potential
acquisitions on a regular basis and may issue shares of Common Stock in
connection therewith. On May 7, 1996, the Company filed a registration
statement on Form S-3 with the Securities and Exchange Commission in connection
with a proposed public offering of 2,500,000 shares of Common Stock (assuming no
exercise of the underwriters' over-allotment option), of which 1,100,000 shares
are being offered by the Company and 1,400,000 shares are being offered by
certain existing stockholders. On May 6, 1996, the Company signed a definitive
agreement to acquire all outstanding capital stock of QMC3, Inc., a leading
managed care company servicing the automobile insurance market, in exchange for
249,816 shares of the Company's Common Stock. Except for such proposed
issuances, there are no current agreements, arrangements, or understandings with
respect to the issuance of any of the shares of Common Stock which would be
authorized by the amendment.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT.

26
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons owning more than 10% of the outstanding
Common Stock of the Company to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% holders of Common Stock of the Company are required by
Securities and Exchange Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.

Mr. Pesce and Ms. Kirby each were late in reporting two transactions on one
Form 4. Mr. McCarthy was late in reporting one transaction on one Form 4.

TIME FOR SUBMISSION OF STOCKHOLDER PROPOSALS

Under regulations adopted by the Securities and Exchange Commission, any
proposal submitted for inclusion in the Company's Proxy Statement relating to
the Annual Meeting of Stockholders to be held in 1997 must be received at the
Company's principal executive offices in Boston, Massachusetts on or before
December 20, 1996. Receipt by the Company of any such proposal from a qualified
stockholder in a timely manner will not ensure its inclusion in the proxy
material because there are other requirements in the proxy rules for such
inclusions.

OTHER MATTERS

Management knows of no matters which may properly be and are likely to be
brought before the meeting other than the matters discussed herein. However, if
any other matters properly come before the meeting, the persons named in the
enclosed proxy will vote in accordance with their best judgment.

The cost of this solicitation will be borne by the Company. It is expected
that the solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra compensation
for their activities) may also solicit proxies by telephone, telegraph and in
person and arrange for brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to their principals at the
expense of the Company.

10-K REPORT

THE COMPANY WILL PROVIDE EACH BENEFICIAL OWNER OF ITS SECURITIES WITH A
COPY OF AN ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION FOR THE COMPANY'S MOST RECENT FISCAL YEAR, WITHOUT CHARGE, UPON
RECEIPT OF A WRITTEN REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE SENT TO
MARTHA KUPPENS, CRA MANAGED CARE, INC., 312 UNION WHARF, BOSTON, MASSACHUSETTS
02109.

27
<PAGE>

VOTING PROXIES

The Board of Directors recommends an affirmative vote on all proposals
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendations.

By order of the Board of Directors

JOSEPH F. PESCE,
Vice President - Finance and Administration
Chief Financial Officer
and Treasurer

May 10, 1996

28
<PAGE>

CRA MANAGED CARE, INC.
1996 ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 1996

[X] Please mark votes as in this example.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. SHARES WILL
BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES
REPRESENTED WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS AS FORTH IN
THE PROXY STATEMENT AND FOR PROPOSALS 2, 3 AND 4.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING MATTERS
DESCRIBED IN THE PROXY STATEMENT FOR THE MEETING.

WITHHOLD VOTE FOR ALL NOMINEES
LISTED. [_]
1. ELECTION OF TWO DIRECTORS TO SERVE FOR A TERM OF THREE YEARS.

NOMINEES: GEORGE H. CONRADES AND JEFFREY R. JAY, M.D.
[_]
--------------------------
To withhold authority to vote
for any individual nominee,
check the box immediately
above and write that nominee's
name on the space provided.
FOR ALL NOMINEES LISTED(except as marked to the contrary) [_]

2. Proposal to amend the CRA Managed Care, Inc. 1994 Time Accelerated
Restricted Stock Option Plan to increase the number of shares to be
granted thereunder from 376,000 to 976,000.
FOR [_] AGAINST [_] ABSTAIN [_]

3. Proposal to ratify, confirm and approve the selection of Arthur
Andersen LLP as the independent certified public accountants of the
Company for fiscal year 1996.
FOR [_] AGAINST [_] ABSTAIN [_]

4. Proposal to amend the Company's Articles of Organization increasing
the number of authorized shares of Common Stock, par value $.01 per
share, from 10,000,000 shares to 40,000,000 shares.
FOR [_] AGAINST [_] ABSTAIN [_]

5. In their discretion, the proxies are authorized to vote upon other
business as may properly come before the meeting, all as set out in
the Notice and Proxy Statement relating to the meeting, receipt of
which is hereby acknowledged.

Mark here if you plan to attend the Meeting [_]

AMENDED AND RESTATED PROXY

CRA MANAGED CARE, INC.
1996 ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 1996

The undersigned hereby appoints Donald J.
Larson and Joseph F. Pesce and each of them,
with full power of substitution, attorneys
and proxies to vote all shares of stock the
undersigned is entitled to vote at the
Special Meeting in lieu of the 1996 Annual
Meeting of Stockholders of CRA Managed Care,
Inc. to be held May 21, 1996 at 10:00 a.m. at
the offices of Hutchins, Wheeler & Dittmar,
101 Federal Street, Boston, Massachusetts and
at any adjournments thereof, with all powers
which the undersigned would possess if
personally present, upon such business as may
properly come before the meeting, as set
forth on the reverse side, hereby revoking
any proxy heretofore given.

Mark here for address change and note Dated: ___________________ , 1996
below [_]

---------------------------------
(Signature)
---------------------------------
(Signature)
PLEASE DATE AND SIGN THIS PROXY
IN THE SPACE PROVIDED AND RETURN
IT IN THE ENCLOSED ENVELOPE,
WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING IN PERSON.
Please sign exactly as your
name(s) appear(s) hereon. When
shares are held by more than one
person, all owners should sign.
When signing as attorney,
executor, administrator, trustee
or guardian, please give full
title as such. If a corporation,
please sign in full corporate
name by President or other
authorized officer. If a
partnership, please in
partnership name by authorized
person.