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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CORE INDUSTRIES INC
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
CORE INDUSTRIES INC
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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 0-11:1
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(4) Proposed maximum aggregate value of transaction:
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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 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.:
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(3) Filing party:
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(4) Date filed:
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(1)Set forth the amount on which the filing fee is calculated and state how
it was determined.
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CORE INDUSTRIES INC
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JANUARY 9, 1996
The Annual Meeting of Stockholders of Core Industries Inc (the "Company")
will be held at the Northfield Hilton, 5500 Crooks Road (near I-75), Troy,
Michigan, on Tuesday, January 9, 1996, at 10:30 A.M. for the following purposes:
1. To elect three directors.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
All stockholders are cordially invited to attend, although only those
stockholders of record at the close of business on November 13, 1995 will be
entitled to vote at the meeting.
The Annual Report of the Company with financial statements for the fiscal
year ended August 31, 1995 is enclosed.
By Order of the Board of
Directors
LAWRENCE J. MURPHY
Executive Vice President and
Secretary
Dated: November 22, 1995
Bloomfield Hills, Michigan
IN ORDER TO INSURE THE PRESENCE OF A QUORUM, STOCKHOLDERS WHO DO NOT INTEND
TO BE PRESENT IN PERSON ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE THE ACCOMPANYING PROXY WHICH IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS.
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CORE INDUSTRIES INC
500 N. WOODWARD AVENUE, BLOOMFIELD HILLS, MICHIGAN 48304
(810) 642-3400
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD JANUARY 9, 1996
The enclosed proxy is solicited by the Board of Directors of Core
Industries Inc (the "Company") for use at the Annual Meeting of Stockholders to
be held on Tuesday, January 9, 1996. Any proxy received by management may be
revoked by notice in writing to Lawrence J. Murphy, Executive Vice President and
Secretary of the Company, at the Company's executive offices at 500 N. Woodward
Avenue, Bloomfield Hills, Michigan 48304, at any time before it is voted. If any
proxy is not so revoked, it will be voted at the meeting. As of November 13,
1995, the record date for the determination of stockholders entitled to vote at
the Annual Meeting, there were outstanding 9,827,181 shares of Common Stock, par
value $1.00 per share, each of which entitles the holder to one vote. It is
expected that this Proxy Statement and the enclosed proxy will be mailed
commencing Wednesday, November 22, 1995.
ELECTION OF DIRECTORS
The Board of Directors of the Company has designated Jay A. Alix, Richard
P. Kughn and David R. Zimmer as its nominees for election as directors, to hold
office until the Annual Meeting of Stockholders in 1999; Messrs. Alix, Kughn and
Zimmer were elected by the stockholders to their present terms as directors
which expire at this meeting.
It is intended that the shares represented by properly executed proxies in
the accompanying form will be voted for such nominees. Although it is
anticipated that the nominees will be able to serve, if at the time of the
meeting any nominee is unable or unwilling to serve, such shares will be voted
at the discretion of the proxies for a substitute nominee. The three individuals
receiving the most votes will be elected for the term indicated. The Company
expects that its officers and directors who are also stockholders will vote for
the nominees set forth below.
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The names of the nominees for election as directors and the directors
continuing in office and certain information about them are set forth in the
following tabulation:
NOMINEES FOR ELECTION AS DIRECTORS
(TO BE ELECTED FOR THE TERM INDICATED)
PERCENTAGE OF
COMPANY'S
COMMON OUTSTANDING
SHARES COMMON SHARES
NAME AND YEAR POSITION AND OFFICES PROPOSED BENEFICIALLY BENEFICIALLY OWNED
FIRST BECAME WITH COMPANY AND OTHER TERM OWNED AS OF AS OF
A DIRECTOR AGE PRINCIPAL OCCUPATION* EXPIRES NOV. 13, 1995 NOV. 13. 1995**
- -------------------- --- ----------------------------------- -------- ------------- ------------------
Jay A. Alix
(1992)............ 40 President, Jay Alix & Associates,
Southfield, Michigan, restructuring
and turn-around advisory firm...... 1999 33,481 --
Richard P. Kughn
(1988)............ 66 Chairman and Chief Executive
Officer, Kughn Enterprises, a sole
proprietorship engaged in the
management of various business
interests.......................... 1999 57,132 --
David R. Zimmer
(1992)............ 49 President and Chief Executive
Officer of the Company............. 1999 105,358 1.0
DIRECTORS CONTINUING IN OFFICE
PERCENTAGE OF
COMPANY'S
COMMON OUTSTANDING
SHARES COMMON SHARES
NAME AND YEAR POSITION AND OFFICES BENEFICIALLY BENEFICIALLY OWNED
FIRST BECAME WITH COMPANY AND OTHER TERM OWNED AS OF AS OF
A DIRECTOR AGE PRINCIPAL OCCUPATION* EXPIRES NOV. 13, 1995 NOV. 13. 1995**
- -------------------- --- ----------------------------------- -------- ------------- ------------------
Lawrence J. Murphy
(1992)............ 53 Executive Vice President and
Secretary of the Company........... 1997 34,816 --
Robert G. Stone, Jr.
(1976)............ 72 Chairman Emeritus, Kirby
Corporation, New York, N.Y., inland
and off-shore marine transportation
and diesel repair.................. 1997 3,375 --
Harold M. Marko
(1955)............ 70 Chairman Emeritus of the Company... 1998 427,236(1) 4.2
Alan E. Schwartz
(1960)............ 69 Partner, Honigman Miller Schwartz
and Cohn, Detroit, Michigan,
attorneys.......................... 1998 190,300(2) 1.9
- -------------------------
* The indicated occupations have been held by each director for the past five
years, except that: Mr. Kughn served as Chairman and Chief Executive
Officer of Lionel Trains, Inc. until September, 1995; Mr. Zimmer served as
President and Chief Executive Officer of New Venture Gear, Inc. from
January,
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1990 until March, 1992 (when he became President of Core Industries Inc);
Mr. Murphy served as Vice President-Finance and Secretary of the Company
from September, 1986 until October, 1990 (when he became Executive Vice
President and Secretary of the Company); Mr. Stone served as Chairman of
the Board of Kirby Corporation until April, 1995; and Mr. Marko served as
Chairman and Chief Executive Officer of the Company from January, 1986
until April, 1991.
** Ownership percentages not shown if less than 1%.
(1) In addition, 73,700 shares are owned by Mr. Marko's wife, as to which shares
Mr. Marko disclaims any beneficial interest.
(2) In addition, 15,471 shares are owned by Mr. Schwartz's wife, as to which
shares Mr. Schwartz disclaims any beneficial interest.
The shares and percentages indicated above include the following number of
shares that directors would have the right to acquire within 60 days of November
13, 1995 pursuant to the Company's stock option plans if the options were
exercised by them within such period: Mr. Alix -- 23,481 shares; Mr. Kughn --
56,132 shares; Mr. Zimmer -- 87,667 shares; Mr. Murphy -- 22,833 shares; Mr.
Marko -- 35,736 shares; and Mr. Schwartz -- 45,027 shares.
All directors named herein have sole voting power and sole investment power
with respect to shares of Common Stock beneficially owned.
All executive officers and directors of the Company as a group beneficially
owned 908,160 shares (9.0%) of Common Stock as of November 13, 1995, including
301,876 shares which they have the right to acquire within 60 days of November
13, 1995 pursuant to the Company's stock option plans if the options were
exercised by them within such period.
OTHER INFORMATION RELATING TO DIRECTORS
Mr. Kughn is a director of AAA Michigan and Chairman Emeritus of Lionel
L.L.C.
Mr. Zimmer is a director of Twin Disc, Incorporated.
Mr. Murphy is a director of Jabil Circuit, Inc.
Mr. Stone is a director of the following corporations: Novacare, Russell
Reynolds Associates, Inc., Tandem Computers, Inc., Tejas Gas Corporation and
several funds managed by Scudder, Stevens & Clark. He is Director Emeritus of
The Chubb Corporation, Corning, Inc., The Japan Fund, and The Pittston Company.
Mr. Stone is also a Fellow of Harvard College.
Mr. Schwartz is a director of the following corporations: Comerica
Incorporated; The Detroit Edison Company; Handleman Company; Howell Industries,
Inc.; Pulte Corporation; and Unisys Corporation.
During the fiscal year ended August 31, 1995, the Board of Directors held
seven meetings. All of the directors attended at least 75 percent of their
respective board and committee meetings.
The Company has a standing Audit Committee. The members of the Audit
Committee are Jay A. Alix, Richard P. Kughn and Harold M. Marko. During fiscal
1995, the Audit Committee held two meetings. The duties of the Audit Committee
include recommending to the Board of Directors annually the appointment of the
independent auditors; reviewing with the independent auditors the scope and
results of the audit; reviewing the independent auditors' fees, including fees
for professional services unrelated to the audit; and reviewing
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with the independent auditors and management the adequacy of the Company's
accounting and financial controls.
The Company has a standing Compensation Committee. The members of the
Compensation Committee are Alan E. Schwartz and Robert G. Stone, Jr. During
fiscal 1995, the members of the Compensation Committee held two meetings as well
as informal discussions in lieu of formal committee meetings. The duties of the
Compensation Committee are: recommending to the Board of Directors the
compensation arrangements for senior management and directors; and recommending
to the Board compensation plans in which officers or directors are eligible to
participate.
The Company has a standing Executive Committee. The members of the
Executive Committee are Harold M. Marko, Alan E. Schwartz and David R. Zimmer.
During fiscal 1995, the Executive Committee held twelve meetings. The Executive
Committee has and may exercise the authority of the Board of Directors in the
management of the business of the Company between the meetings of the Board of
Directors.
The Company has a standing Nominating Committee. All of the members of the
Board of Directors serve as the Nominating Committee. The Nominating Committee
considers the performance of incumbent directors and recommends to the
stockholders nominees for election as directors. During fiscal 1995, the members
of the Nominating Committee held informal discussions in lieu of formal
committee meetings. The Nominating Committee will consider nominees for
directors recommended by stockholders, which recommendations should be submitted
to the Chairman of the Nominating Committee at the Company's executive offices
at 500 N. Woodward Avenue, Bloomfield Hills, Michigan 48304, no later than July
25, 1996.
During the fiscal year ended August 31, 1995, the Company engaged Jay Alix
& Associates, of which Jay A. Alix, a director of the Company, is President, to
provide professional services to the Company. Management of the Company believes
that all such services were provided by Jay Alix & Associates on an arms-length
basis.
PRINCIPAL BENEFICIAL OWNERS
The only person known by the Company to be the beneficial owner of more
than 5% of the Company's outstanding Common Stock is as follows:
SHARES BENEFICIALLY
OWNED (1)
---------------------
PERCENT
NAME AND ADDRESS NUMBER OF CLASS
- ------------------------------------------------------------------------ ------- --------
State of Wisconsin Investment Board..................................... 611,600 6.2%
P.O. Box 7842
Madison, Wisconsin 53707
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(1) Based upon information as of August 31, 1995 obtained from the stockholder.
The stockholder has sole voting power and sole investment power over such
shares.
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COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth information for each of the fiscal years
ending August 31, 1995, 1994 and 1993 concerning the compensation of the
Company's President and Chief Executive Officer and of the next four most highly
compensated executive officers whose total annual salary and bonus exceeded
$100,000:
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION(1)
FISCAL ----------------------- RESTRICTED STOCK
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) AWARDS($)(3) OPTIONS(#) OTHER
- ------------------------------ ------ --------- ----------- ---------------- ---------- ----------
David R. Zimmer............... 1995 $ 300,000 $ 200,803 $98,471 -- --
President and Chief 1994 291,667 152,015 -- 83,000 --
Executive Officer 1993 275,000 105,000 -- -- --
Lawrence J. Murphy............ 1995 195,000 108,400 -- -- --
Executive Vice President and 1994 190,000 84,311 -- 46,000 --
Secretary 1993 180,000 51,000 64,449 -- --
Raymond H. Steben, Jr. ....... 1995 151,667 73,855 -- -- --
Vice President - Finance and 1994 145,000 43,514 -- 30,000 --
Chief Financial Officer(4) 1993 30,301 6,042 10,823 -- --
James P. Dixon................ 1995 145,667 82,463 -- -- $62,888(5)
Vice President - Planning 1994 137,000 34,936 -- 14,000 --
1993 134,667 37,400 49,048 -- --
Thomas G. Hooper.............. 1995 110,000 44,926 -- -- --
Treasurer and Controller 1994 108,333 21,452 -- 12,000 --
1993 105,000 21,000 37,601 -- --
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(1) Other annual compensation, which was less than the lesser of $50,000 or 10%
of the individual's bonus and salary, is not shown.
(2) Inclusive of $112,303, $60,625, $41,305, $46,119 and $25,126 in 1995 and
$81,215, $36,536, $23,290, $18,854 and $15,136 in 1994 awarded to the five
named individuals, respectively, in unrestricted common stock of the Company
as part of the earned annual bonus.
(3) Restricted stock awarded in fiscal year 1993, with restrictions that lapse
on September 1, 1996.
(4) Mr. Steben was employed by the Company and appointed Vice President -
Finance and Chief Financial Officer on June 16, 1993.
(5) Mr. Dixon relocated his household during the fiscal year. Of the amount
shown, $58,382 is relocation reimbursement agreed to in fiscal year 1990.
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Option Grants in Last Fiscal Year
The Core Industries Inc 1993 Performance Incentive Plan approved by the
stockholders provides for the granting of stock options with respect to Common
Stock. No option grants were made during the fiscal year ended August 31, 1995
to any of the executive officers named in the Summary Compensation Table above.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Value
Table
The following table sets forth information concerning each exercise of
stock options during the fiscal year ended August 31, 1995 by each of the
executive officers named in the Summary Compensation Table above and the value
of unexercised options held by such persons as of August 31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY END(#) AT FISCAL YEAR END($)
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ----------- ----------- ------------- ----------- -------------
David R. Zimmer........... -- -- 87,667 95,333 $ 318,750 $ 212,500
Lawrence J. Murphy........ -- -- 22,833 30,667 4,219 --
Raymond H. Steben, Jr. ... -- -- 15,333 22,667 12,000 6,000
James P. Dixon............ -- -- 6,667 9,333 12,500 --
Thomas G. Hooper.......... -- -- 9,000 8,000 1,969 --
Pension Table
The Company has a tax-qualified Defined Benefit Pension Plan and a
nonqualified Benefit Equalization Plan, both of which cover salaried employees
of corporate headquarters and of certain divisions. The Defined Benefit Pension
Plan provides pension and disability benefits for covered employees. Employees
with five or more years of service are entitled to annual pension benefits
beginning at normal retirement age (65). The annual retirement benefit is equal
to 1.25% of the employee's final average compensation (substantially the same as
Annual Compensation as reported in the above Summary Compensation Table) plus
.65% of the employee's final average compensation in excess of the Social
Security taxable wage base multiplied by the employee's years of service. In no
event may the retirement benefit exceed 65% of the final average compensation.
The unfunded Benefit Equalization Plan provides for the payment of additional
amounts to covered employees so that the total amount paid will equal the
pension benefit which would have been calculated under the Defined Benefit
Pension Plan formula without regard to the limitations added to the Defined
Benefit Pension Plan to conform to Section 415 of the Internal Revenue Code of
1986. The following table shows estimated annual retirement benefits payable
under both plans to an employee at normal
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retirement age of 65 on a single life annuity basis assuming a Social Security
taxable wage base of an employee currently age 60:
YEARS OF SERVICE
FINAL AVERAGE ----------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------- -------- -------- -------- -------- --------
$125,000..................... $ 32,876 $ 43,834 $ 54,793 $ 65,751 $ 76,710
150,000..................... 40,001 53,334 66,668 80,001 93,335
175,000..................... 47,126 62,834 78,543 94,251 109,960
200,000..................... 54,251 72,334 90,418 108,501 126,585*
225,000..................... 61,376 81,834 102,293 122,751* 143,210*
250,000..................... 68,501 91,334 114,168 137,001* 159,835*
300,000..................... 82,751 110,334 137,918* 165,501* 193,085*
350,000..................... 97,001 129,334* 161,668* 194,001* 226,335*
400,000..................... 111,251 148,334* 185,418* 222,501* 259,585*
450,000..................... 125,501* 167,334* 209,168* 251,001* 292,500*
500,000..................... 139,751* 186,334* 232,918* 279,501* 325,000*
- -------------------------
* Section 415 of the Internal Revenue Code limits the benefits which can be paid
from any funded pension plan that qualifies for federal tax exemption. The
amount for calendar year 1995 is $120,000.
The credited years of service under the Company's pension plans to each of
the persons named above are: David R. Zimmer - 3 years; Lawrence J. Murphy - 14
years; Raymond H. Steben, Jr. - 2 years; James P. Dixon - 5 years; and Thomas G.
Hooper - 14 years.
Compensation of Directors
The current standard arrangement for compensation of directors is as
follows: officers of the Company who are directors do not receive any additional
compensation for services as a director. Each director who is not an officer of
the Company receives a director fee in the annual amount of $11,000 plus $1,500
for each board meeting attended up to a maximum of $13,500 in meeting fees.
There are six regularly scheduled board meetings per year. An additional sum of
$1,000 per meeting is paid for attendance at a committee meeting if such meeting
falls on a day on which a meeting of the entire Board of Directors is not held.
Non-employee directors may elect to defer compensation for services as a
director until the person ceases to be a director. All deferred amounts are held
in the general funds of the Company and bear interest at the prime rate from the
date such fees would otherwise be paid. Two directors have elected to defer
their compensation pursuant to this plan.
The non-employee directors of the Company are eligible to participate in
the Company's 1991 Director Discounted Stock Option Plan, which was approved by
the stockholders on January 12, 1993. Under that Plan, directors may elect to
receive stock options exercisable at either 50% or 75% of market value on each
January 1 in lieu of director fees payable in cash. The number of options
granted annually is that number of options which provides aggregate discount
from market value equal to the cash fees forfeited. Under the Plan, 200,000
shares were reserved for issuance. Three of the Company's directors elected to
participate in the 1991 Director Discounted Stock Option Plan in fiscal 1995,
and stock options for a total of 28,128 shares (exercisable at $7.3594 per
share) were granted to them in fiscal 1995. All such options have a term of 10
years, and none had been exercised as of August 31, 1995.
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Compensation Committee Interlocks and Insider Participation
All the members of the Compensation Committee are non-employee directors of
the Company and are not former officers of the Company or its subsidiaries. No
executive officer of the Company serves as a member of the board of directors or
on the compensation committee of a corporation for which any of the directors on
the Compensation Committee or the Board of Directors is an executive officer.
Alan E. Schwartz, a director of the Company and a member of the
Compensation Committee, is a partner in the law firm of Honigman Miller Schwartz
and Cohn. The Company used the services of this firm during fiscal 1995 and
continues to use the firm's services as to certain matters in fiscal 1996. The
Company may retain the firm further should its legal expertise be appropriate in
meeting particular legal needs. Work done for the Company in fiscal 1995
accounted for less than one-third of one percent (.33%) of Honigman Miller
Schwartz and Cohn's annual revenues.
REPORT OF THE COMPENSATION COMMITTEE
INTRODUCTION AND ORGANIZATION
The Compensation Committee of the Board of Directors is composed entirely
of non-employee directors. It reviews and develops compensation programs for key
management, evaluates executive performance, administers the Company's
compensation programs and makes compensation recommendations to the full Board
of Directors. The Committee periodically retains an independent consultant to
assist it in assessing the appropriateness of the Company's compensation
programs.
GENERAL POLICIES
The primary objectives of the Company's executive compensation programs
are: 1) to attract and retain highly capable executives to manage the Company's
businesses; 2) to offer appropriate incentives to achieve the goals and
objectives of the Company and, in particular, to enhance stockholder value; and
3) to encourage stock ownership by the Company's executives to further enhance
the mutuality of interests with stockholders.
The Compensation Committee implements this policy with a compensation
program consisting of three components: base salaries, annual incentive awards
and stock option grants. These elements are discussed below, as well as the
basis for the compensation awarded to Mr. Zimmer.
Base Salary. The initial element of executive compensation is base salary.
Annual base salary is determined for each of the Company's key executives based
upon experience, sustained performance in leadership and accomplishment, and an
evaluation of the responsibilities of the position held by the executive.
Included in this evaluation is a comparison to comparable positions at
equivalently sized diversified manufacturing companies. The Committee expects
that base salaries will typically range near the midpoint of such survey data
with a slight bias to being short of the midpoint. It is anticipated that the
annual and long term incentives will provide an appropriate opportunity for
above average compensation dependent upon performance.
Annual Incentive Awards. The second component of each key executive's
compensation is participation in the Company's Annual Incentive Plan. The
Committee's policy is to provide management with a significant incentive
opportunity linked to achieving the Company's annual financial and operational
goals, all of which are intended to increase stockholder value. It is the
intention of the Committee that a higher percentage of total annual compensation
be incentive related than in comparable companies. Further, the stockholders
have
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previously approved the 1993 Stock Bonus Plan which allows selected executives
and managers to predesignate a portion of the prospective annual incentive to be
paid in Common Stock of the Company, valued at fair market as of a date
determined by the Committee. The Committee believes that this feature encourages
stock ownership by the executives and more closely links their interests to
stockholder value.
In 1995, management's opportunity to earn incentive awards was dependent
upon the Company's achievement of economic value added (EVA) and net earnings
per share relative to standards set by the Committee. Based on the continuing
operations results, the Committee awarded the officers of the Company 100% of
the target 1995 award, of which all the officers had previously chosen to
designate 50% to be paid in Company stock. Pursuant to the plan, the designation
occurred before November 15, 1994. The value of the stock was $9.0625 per share
on the designation date. The value of the awarded stock was $11.50 per share on
August 31, 1995, resulting in management experiencing a 26.9% gain on the stock
related element of the bonus.
For fiscal 1996, the Committee has established goals predicated upon
earnings per share and EVA. As a result, the Committee believes that the Company
has aligned the financial interests of the management with those of the
Company's stockholders.
Long Term Incentives. As previously indicated, the Committee believes that
stock ownership by executives and compensation plans that foster alignment of
management's interests with those of stockholders are in the mutual interest of
both stockholders and management. The 1993 Performance Incentive Plan is
designed to provide executives with stock options as an additional incentive to
maximize stockholder value. During fiscal 1995 the Committee did not grant
options to purchase Company stock to the executives, as those granted in fiscal
1994 were expected to cover two years. A key feature of the options granted in
1994, which were granted at market value, is the provision under which they may
be exercised. The value of the Company's stock must grow 15% and maintain an
average of that value for thirty calendar days during the first three years
following the grant for one third of the grant to become eligible for exercise
by the executive. The Company's stock must increase in value another 15% (or 32%
in total) during the first three years following the grant for the second
one-third of the grant to be exercisable. Finally, the stock must increase in
value another 15% (or 52% in total from the grant price during the three year
period) for the final third to become exercisable. If the value of the stock
fails to increase as specified in the three years, the right to exercise the
options is deferred to not sooner than nine and one-half years from the date of
grant. No options became exercisable under these provisions during fiscal 1995.
The value of the Company's stock must average greater than $17.61 and $20.25 for
more than thirty days before November 8, 1996 for the second and third
traunches, respectively, to become eligible for exercise by the executives. The
Committee believes this arrangement clearly links management's interest with the
stockholders' interest. In addition, the Committee believes this program
requires significantly more performance from management, who therefore have more
at risk than their counterparts in most other companies.
Chief Executive Officer Compensation. Mr. Zimmer's base compensation for
the 1995 fiscal year was $300,000, a 2.9% increase from the prior year. Based on
studies by an independent consultant, the Committee believes this base
compensation to be consistent with its philosophy of maintaining base salaries
slightly below the median range for comparably sized diversified manufacturing
companies, and thereby placing a somewhat higher percentage of Mr. Zimmer's
total compensation dependent directly upon performance. In addition, Mr. Zimmer
was awarded a bonus of $200,803, of which $88,500 was paid in cash and $112,303
was awarded in the Company's common stock. The basis of the award was directly
related to specific earnings per share and EVA objectives and achievement
against those objectives. As part of the choice provided to the Company's
officers under the 1993 Stock Bonus Plan, Mr. Zimmer had predesignated 50% of
any award to be paid in
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unrestricted stock of the Company. Because the Company's stock increased in
value between the designation and award dates, Mr. Zimmer's award was increased
$23,803 relative to what it would have been had he not accepted the market risk
accepted by stockholders. Mr. Zimmer was not granted any options during the
fiscal year, as those options granted in the previous year were intended to
cover a two year period. As previously discussed, the exercisability of those
options prior to nine and one-half years from grant date depends upon
significant improvement in the price of the Company's stock. The number of
options granted Mr. Zimmer was based in part upon a review of total compensation
paid by other companies. However, with the stock price improvement restriction
on exercisability, the Committee believes these options are significantly more
at risk than options generally granted by other companies.
In total, the Committee believes Mr. Zimmer's compensation package is
competitive, but significantly more at risk based upon performance in terms of
EVA, earnings per share and stock value, than the compensation paid to chief
executive officers by comparable companies. In short, his actual compensation is
highly tied to value being added to the Company's stockholders. Mr. Zimmer did
not participate in the approval of his own compensation, but he did participate
in the discussion of the Company's performance and he made recommendations
concerning the compensation of executives reporting to him.
By The Compensation Committee
Alan E. Schwartz
Robert G. Stone, Jr.
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PERFORMANCE GRAPHS
The following graphs compare the cumulative stockholder return for the
Company's common stock with the cumulative total return of the Standard & Poor's
500 Composite Index and the Standard & Poor's Diversified Manufacturers Index
for the past five and four years. The latter graph is presented to show
stockholder return since the Company's major restructuring in 1992.
INDEXED FIVE YEAR TOTAL RETURN
MEASUREMENT PERIOD CORE INDUS- S&P DIVERSI-
(FISCAL YEAR COVERED) TRIES FIED MFR. S&P 500
1990 100 100 100
1991 86 127 127
1992 104 125 137
1993 191 158 158
1994 147 176 166
1995 166 230 202
10.7% 18.2% 15.2%
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INDEXED FOUR YEAR TOTAL RETURN
MEASUREMENT PERIOD CORE INDUS- S&P DIVERSI-
(FISCAL YEAR COVERED) TRIES FIED MFR. S&P 500
1991 100 100 100
1992 121 98 108
1993 222 124 124
1994 171 139 131
1995 193 181 159
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INFORMATION CONCERNING INDEPENDENT AUDITORS
The Board of Directors of the Company engaged Coopers & Lybrand L.L.P.,
certified public accountants, as independent auditors for the Company for the
fiscal year ending August 31, 1995. The selection of auditors by the Board was
made upon the recommendation of the Audit Committee of the Board. The Audit
Committee will make a recommendation to the Board of Directors with respect to
the fiscal year ended August 31, 1996 in due course.
Coopers & Lybrand L.L.P. have been independent auditors for the Company
since 1994. Representatives of Coopers & Lybrand L.L.P. will be present at the
Annual Meeting of Stockholders with an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
On January 11, 1994, the Company's Board of Directors, acting upon the
recommendation of the Company's Audit Committee of the Board of Directors,
selected Coopers & Lybrand L.L.P. to replace Deloitte & Touche L.L.P. as its
certified public accountants. Deloitte & Touche L.L.P. was replaced as the
Company's certified public accountants as of that date.
The reports of Deloitte & Touche L.L.P. on the Company's financial
statements for the two fiscal years prior to its dismissal did not contain an
adverse opinion or a disclaimer of opinion, nor were the reports qualified as to
uncertainty, audit scope or accounting principles. There were no disagreements
with Deloitte & Touche L.L.P. on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure during
the Company's two fiscal years, or any subsequent interim period, preceding the
dismissal of Deloitte & Touche L.L.P. None of the kinds of events listed in Item
304(a)(1)(v) of Regulation S-K occurred within the Company's two fiscal years,
or any subsequent interim period, preceding the dismissal of Deloitte & Touche
L.L.P.
EXPENSES OF SOLICITATION
All expenses of soliciting proxies for the Annual Meeting, including the
preparing, assembling and mailing of this Proxy Statement and the additional
material furnished the stockholders herewith, will be borne by the Company. The
Company will also reimburse brokers and other nominees for their services in
forwarding proxy materials to principals. In addition to the use of the mails,
proxies may be solicited by telephone, personal interviews and otherwise.
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OTHER BUSINESS
Management is not aware of any matter which is to be presented for action
at the Annual Meeting other than the matters set forth herein. Should any other
matter requiring a vote of the stockholders arise, the proxies in the enclosed
form confer upon the persons entitled to vote the shares represented by such
proxies, discretionary authority to vote the same in respect to any such other
matter in accordance with their best judgment.
Stockholder proposals intended to be presented at the 1997 Annual Meeting
must be received by the Company at its principal executive offices for inclusion
in the 1997 Proxy Statement no later than July 25, 1996.
For the Board of Directors
LAWRENCE J. MURPHY
Executive Vice President and Secretary
November 22, 1995
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PROXY PROXY
CORE INDUSTRIES, INC
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 9, 1996
The undersigned Stockholder of Core Industries, Inc. hereby appoints
Harold M. Marko and Lawrence J. Murphy and each of them, proxies, with power of
substitution, to vote at the Annual Meeting of Stockholders of said Company to
be held at the Northfield Hilton, 5500 Crooks Road at I-75, Troy, Michigan on
Tuesday, January 9, 1996 at 10:30 a.m., EST, or at any postponement or
adjournment thereof.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
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CORE INDUSTRIES INC
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
1. ELECTION OF DIRECTORS-- FOR WITHHOLD FOR (Except withhold for Nominee written below)
Nominees: Jay A. Alix, Richard P. Kughn and [] [] [] ______________________________________________________
David R. Zimmer
THE BOARD OF DIRECTORS FAVORS A VOTE FOR
2. In the discretion of the proxies, in the transaction of such ITEM 1. THE SHARES REPRESENTED BY THIS PROXY WILL BE
other business which may properly come before the meeting. VOTED AS DIRECTED, BUT WHERE NO DIRECTION IS GIVEN, THOSE
SHARES WILL BE VOTED FOR SUCH ITEM.
Dated:________________________________, 1995
Signature(s)________________________________
____________________________________________
sign exactly as name appears above. When shares are
held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please
sign in full corporate name by President or other
authorized officer. If a partnership, please sign in
partnership name by authorized person.
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