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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
Commission File No. 1-14146
CORT BUSINESS SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 54-1662135
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4401 Fair Lakes Court, Fairfax, VA 22033
(Address of principal executive offices) (Zip Code)
(703) 968-8500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Outstanding as of
Class August 7, 1997
----- --------------
Class A, $.01 par value 12,833,097
Class B, $.01 par value - 0 -
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Page __ of __ Pages
Exhibit Index on Page __
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CORT BUSINESS SERVICES CORPORATION
INDEX TO FORM 10-Q
Page No.
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets ...............................1
Unaudited Condensed Consolidated Statements of Operations ...........2
Unaudited Condensed Consolidated Statements of Cash Flows ...........3
Notes to Unaudited Condensed Consolidated Financial Statements ......4
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.........................5
Part II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS ............8
Item 6. EXHIBITS AND REPORTS ON FORM 8-K ..............................10
SIGNATURE.....................................................................11
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, June 30,
1996 1997
---- ----
(unaudited)
ASSETS
Cash and cash equivalents.......................... $ 123 $ 217
Accounts receivable, net........................... 11,011 15,550
Prepaid expenses................................... 4,224 4,273
Rental furniture, net.............................. 147,161 164,395
Property, plant and equipment, net................. 35,667 37,333
Other receivables and assets, net.................. 3,815 3,738
Goodwill, net...................................... 45,198 52,635
------ ------
Total assets.................................... $247,199 $278,141
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable................................... $ 4,157 $ 6,797
Accrued expenses................................... 27,491 30,026
Deferred revenue and security deposits............. 14,358 16,911
Revolving credit facility, secured and other....... 15,600 27,500
Senior notes, 12%.................................. 50,000 49,932
Deferred income taxes.............................. 10,441 10,441
------ ------
122,047 141,607
Stockholders' equity............................... 125,152 136,534
------- -------
Total liabilities and stockholders' equity...... $247,199 $278,141
======= =======
See accompanying notes to unaudited condensed consolidated financial statements.
- 1 -
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ---------------------
1996 1997 1996 1997
---- ---- ---- ----
Revenue:
Furniture rental................ $46,882 $59,679 $ 85,437 $115,232
Furniture sales................. 11,226 14,802 21,440 26,550
------- ------- -------- --------
Total revenue................. 58,108 74,481 106,877 141,782
Operating costs and expenses:
Cost of furniture rental........ 9,190 11,383 16,628 22,015
Cost of furniture sales......... 6,640 9,189 12,578 16,097
Selling, general and
administrative expenses..... 34,073 42,166 62,294 81,516
------- ------- -------- --------
Total costs and expenses...... 49,903 62,738 91,500 119,628
------- ------- -------- --------
Operating earnings............ 8,205 11,743 15,377 22,154
Interest expense.................. 2,264 2,253 4,045 4,238
------- ------- -------- --------
Income before income taxes...... 5,941 9,490 11,332 17,916
Income taxes...................... 2,458 3,883 4,689 7,379
------- ------- -------- --------
Net income...................... $ 3,483 $ 5,607 $ 6,643 $ 10,537
======= ======= ======== ========
Earnings per share................ $0.30 $0.41 $0.57 $0.77
Weighted average number of
shares used in computation...... 11,623 13,644 11,619 13,625
See accompanying notes to unaudited condensed consolidated financial statements.
- 2 -
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CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
June 30,
---------------------
1996 1997
---- ----
Cash flows from operating activities:
Net income......................................... $ 6,643 $ 10,537
Proceeds of disposals of rental furniture in
excess of gross profit........................... 12,090 14,341
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization:
Rental furniture depreciation ............... 11,934 16,309
Other depreciation and amortization.......... 1,629 2,342
Goodwill amortization........................ 390 735
Amortization of debt issuance costs.......... 337 360
Rental furniture inventory shrinkage........... 712 1,520
Changes in operating accounts, net............. 3,805 4,240
-------- --------
Net cash provided by operating activities.... 37,540 50,384
-------- --------
Cash flows from investing activities:
Purchases of rental furniture...................... (43,035) (45,373)
Purchases of portfolio acquisitions................ (217) (13,147)
Purchases of property, plant and equipment......... (3,479) (3,983)
Sales of property, plant and equipment............. 36 65
Purchase of Evans Rents............................ (27,725) --
-------- --------
Net cash used by investing activities........ (74,420) (62,438)
-------- --------
Cash flows from financing activities:
Issuance of common stock........................... 56 316
Borrowings on the line of credit................... 52,753 46,112
Repayments on the line of credit................... (15,153) (34,212)
Repayments of long term debt....................... (557) (68)
-------- --------
Net cash provided by financing activities.... 37,099 12,148
-------- --------
Net increase in cash and cash equivalents.... 219 94
Cash and cash equivalents at beginning of period..... 379 123
-------- --------
Cash and cash equivalents at end of period........... $ 598 $ 217
======== ========
Supplemental disclosures of cash flow information:
Tax benefit from exercise of stock options......... $ -- $ 529
Interest paid...................................... 3,579 3,743
Income taxes paid.................................. 4,117 5,332
See accompanying notes to unaudited condensed consolidated financial statements.
-3-
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CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting of
only normal recurring accruals, necessary for a fair presentation of the
consolidated financial position of CORT Business Services Corporation
("CORT" or the "Company") and Subsidiaries as of June 30, 1997, and the
results of their operations for the three months ended June 30, 1997 and
1996 and six months ended June 30, 1997 and 1996, and for cash flows for
the six months ended June 30, 1997 and 1996. The results of operations for
the six months ended June 30, 1997 are not necessarily indicative of the
results that may be expected for the full year. These condensed
consolidated financial statements are unaudited, and do not include all
related footnote disclosures.
The interim unaudited condensed consolidated financial statements should be
read in conjunction with the audited consolidated financial statements
included in the Company's 1996 Annual Report on Form 10-K.
(2) Acquisitions
On March 6, 1997, the Company acquired the stock of each of Levitt
Investment Company and McGregor Enterprises, Inc. and certain assets of
Alco Trade Show Services, Inc. These companies provide rental specialty
furniture for short term use at conventions and trade shows. In addition,
McGregor Enterprises, Inc. provides rental furniture in the "rent-to-rent"
segment of the furniture industry in Orlando, Florida. The cost of the
acquisitions, including expenses, was approximately $12.7 million, subject
to certain adjustments, in transactions accounted for as purchase business
combinations. The preliminary allocation of the purchase price over the net
assets acquired resulted in goodwill of approximately $7.6 million.
(3) Income Taxes
The Internal Revenue Service ("IRS") has proposed the disallowance of
certain deductions taken by Fairwood Corporation for a consolidated tax
group of which CORT Furniture Rental Corporation ("CFR") was previously a
member (the "Former Group") through the year ended December 31, 1988. The
IRS challenge includes the assertion that certain interest deductions taken
by the Former Group should be recharacterized as non-deductible dividend
distributions and that deductions for certain expenses related to the
acquisition of Mohasco Corporation (now Consolidated Furniture Corporation
("Consolidated")), CFR's former shareholder, be disallowed. Under IRS
regulations, the Company and each other member of the Former Group is
severally liable for the full amount of any Federal income tax liability of
the Former Group while CFR was a member of the Former Group, which could be
as much as approximately $31 million for such periods (including interest
through December 31, 1996). Under the agreement of sale for CFR,
Consolidated agreed to indemnify the Company in full for any consolidated
tax liability of the Former Group for the years during which CFR was a
member of the Former Group. In addition, the Company may have rights of
contribution against other members of the Former Group if the Company were
required to pay more than its equitable share of any consolidated tax
liability. Fairwood Corporation has indicated to the Company that it has
tentatively reached an agreement in principle with the IRS Appeals Officer
handling the case regarding a settlement of the principal issues in the
case. A final settlement on that basis would be substantially less than the
liability that would result from the proposed adjustments. The terms of
such a tentative settlement are subject to further review by the IRS and by
the Joint Committee on Taxation, and no assurance can be given that any
settlement will be reached with the IRS. The Company is not in a position
to determine the probable outcome and its impact on the Company's
consolidated financial statements, if any.
- 4 -
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CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(dollar figures in thousands)
Results of Operations
Three months ended June 30, 1997 as compared to three months ended June 30, 1996
Revenue
Total revenue increased 28.2% to $74,481 for the three months ended June 30,
1997 from $58,108 for the three months ended June 30, 1996. Furniture rental
revenue for the three months ended June 30, 1997 was $59,679, a 27.3% increase
from $46,882 for the corresponding period in 1996. Rental revenue growth before
the impact of acquisitions, estimated by excluding the Company's California, New
York City, Salt Lake City and trade show operations was approximately 14% which
reflects growth in the number of leases as well as revenue per lease. Furniture
sales increased 31.9% to $14,802. Approximately 16% of this increase is due to
an unusually large corporate sale.
Operating Costs and Expenses
Cost of furniture rental has decreased from 19.6% of furniture rental revenue in
1996 to 19.1% of furniture rental revenue in 1997. Cost of furniture sales
increased from 59.1% of furniture sales revenue in 1996 to 62.1% of furniture
sales revenue in 1997. Without the unusually large corporate sale, cost of
furniture sales for 1997 would be 60.0%.
Selling, general and administrative expenses totaled $42,166 or 56.6% of total
revenue for the quarter ended June 30, 1997 as compared to $34,073 or 58.6% of
total revenue for the quarter ended June 30, 1996. Excluding $425 of certain
charges associated with duplicate showrooms related to the Evans Rents
acquisition, selling, general and administrative expenses for 1996 would have
been 57.9%. Selling, general and administrative expenses as a percentage of
total revenue were favorably impacted in 1997 by the unusually large corporate
sale which had lower operating costs.
Operating Earnings
As a result of the changes in revenue, operating costs and expenses discussed
above, operating earnings were $11,743 or 15.8% of total revenue in the second
quarter of 1997 compared to $8,205 or 14.1% of total revenue in the second
quarter of 1996. Excluding the charges related to the Evans Rents acquisition,
operating earnings would have been 14.9% of total revenue for the quarter ended
June 30, 1996.
Six months ended June 30, 1997 as compared to six months ended June 30, 1996
Revenue
Total revenue increased 32.7% to $141,782 for the six months ended June 30, 1997
from $106,877 for the six months ended June 30, 1996. Furniture rental revenue
for the six months ended June 30, 1997 was $115,232, a 34.9% increase from
$85,437 for the six months ended June 30, 1996. Rental revenue growth before the
impact of acquisitions was approximately 14% which reflects growth in the number
of leases as well as revenue per lease. Furniture sales increased 23.8% to
$26,550 in the six months ended June 30, 1997 from $21,440 in the six months
ended June 30, 1996. Approximately 8% of this increase is due to the unusually
large corporate sale.
- 5 -
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(dollar figures in thousands)
Operating Costs and Expenses
Cost of furniture rental has decreased from 19.5% of furniture rental revenue in
1996 to 19.1% of furniture rental revenue in 1997. Cost of furniture sales
increased from 58.7% of furniture sales revenue in 1996 to 60.6% of furniture
sales revenue in 1997. Without the unusually large corporate sale, cost of
furniture sales for 1997 would be 59.4%.
Selling, general and administrative expenses totaled $81,516 or 57.5% of total
revenue for the six months ended June 30, 1997 as compared to $62,294 or 58.3%
of total revenue for the six months ended June 30, 1996. Excluding $425 of
certain charges associated with duplicate showrooms related to the Evans Rents
acquisition, selling, general and administrative expenses for 1996 would have
been 57.9%.
Operating Earnings
As a result of the changes in revenue, operating costs and expenses discussed
above, operating earnings were $22,154 or 15.6% of total revenue for the six
months ended June 30, 1997 compared to $15,377 or 14.4% of total revenue for the
six months ended June 30, 1996. Excluding the charges related to the Evans Rents
acquisition, operating earnings would have been 14.8% of total revenue for the
six months ended June 30, 1996.
Furniture Purchases
Furniture purchases totaled $45,373 in the six months ended June 30, 1997, an
increase of 5.4% from the $43,035 purchased in the six months ended June 30,
1996.
Liquidity and Capital Resources
The Company is a holding company with no independent operations, no material
obligations and no material assets other than its ownership of CFR. The Company
is dependent on the receipt of dividends or distributions from CFR to fund any
obligations. The Revolving Credit Facility (as defined below) and indenture
governing the Senior Notes restrict the ability of CFR to make advances and pay
dividends to the Company.
The Company's primary capital requirements are purchases of rental furniture
(including new furniture purchases and lease portfolio acquisitions) and debt
service. The Company purchases furniture throughout each year to replace
furniture which has been sold and to maintain adequate levels of rental
furniture to meet existing and new customer needs. As the Company's growth
strategies continue to be implemented, furniture purchases are expected to
increase.
The Company's other capital requirements consist primarily of purchases of
property, plant and equipment, including warehouse and showroom improvements,
warehouse and office equipment, and computer hardware. Net purchases of
property, plant and equipment were $3,443 and $3,918 for the six months ended
June 30, 1996 and 1997, respectively.
During the six months ended June 30, 1996 and 1997 net cash provided by
operations was $37,540 and $50,384, respectively. During the six months ended
June 30, 1996 and 1997 net cash used in investing activities was $74,420 and
$62,438, respectively. In 1996, approximately $27,725 was used for the
acquisition of Evans Rents and in 1997, approximately $13,147 was used for
portfolio acquisitions. The remaining cash used in investing activities consists
primarily of purchases of rental furniture. During the six months ended June 30,
1996 and 1997 net cash provided in financing activities was $37,099 and $12,148,
respectively. In 1996, approximately $27,725 was borrowed to acquire Evans
Rents.
- 6 -
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(dollar figures in thousands)
The Company is required to make semi-annual interest payments, in arrears on
March 1 and September 1, of approximately $3,000 ($6,000 annually) on the Senior
Notes. The Company will not be required to make principal repayments on the
Senior Notes until maturity.
CFR has available a revolving line of credit of $70,000, subject to certain
borrowing base restrictions, to meet acquisition and expansion needs as well as
seasonal working capital and general corporate requirements (the "Revolving
Credit Facility"). CFR had borrowings of $27,500 under the Credit Facility at
June 30, 1997.
The IRS has proposed the disallowance of certain deductions taken by Fairwood
Corporation for a consolidated tax group of which CFR was previously a member
(the "Former Group") through the year ended December 31, 1988. The IRS challenge
includes the assertion that certain interest deductions taken by the Former
Group should be recharacterized as non-deductible dividend distributions and
that deductions for certain expenses related to the acquisition of Consolidated,
CFR's former shareholder, be disallowed. Under IRS regulations, the Company and
each other member of the Former Group is severally liable for the full amount of
any Federal income tax liability of the Former Group while CFR was a member of
the Former Group, which could be as much as approximately $31 million for such
periods (including interest through December 31, 1996). Under the agreement of
sale for CFR, Consolidated agreed to indemnify the Company in full for any
consolidated tax liability of the Former Group for the years during which CFR
was a member of the Former Group. In addition, the Company may have rights of
contribution against other members of the Former Group if the Company were
required to pay more than its equitable share of any consolidated tax liability.
Fairwood Corporation has indicated to the Company that it has tentatively
reached an agreement in principle with the IRS Appeals Officer handling the case
regarding a settlement of the principal issues in the case. A final settlement
on that basis would be substantially less than the liability that would result
from the proposed adjustments. The terms of such a tentative settlement are
subject to further review by the IRS and by the Joint Committee on Taxation, and
no assurance can be given that any settlement will be reached with the IRS. The
Company is not in a position to determine the probable outcome and its impact on
the Company's consolidated financial statements, if any.
New Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share" ("Statement 128"). Statement 128 supersedes Accounting
Principles Board Opinion No. 15, "Earnings per Share" ("APB 15") and its related
interpretations, and promulgates new accounting standards for the computation
and manner of presentation of the Company's earnings per share. The Company is
required to adopt the provisions of Statement 128 for the year ending December
31, 1997. Earlier application is not permitted; however, upon adoption the
Company will be required to restate previously reported annual and interim
earnings per share in accordance with the provisions of Statement 128. The
Company does not believe that the adoption of Statement 128 will have a material
impact on the computation or manner of presentation of its earnings per share as
currently or previously presented under APB 15.
In June 1997, the Financial Accounting Standards Board issued Statement No. 130,
"Reporting Comprehensive Income" ("Statement 130"). Statement 130 establishes
standards for the reporting and display of comprehensive income and its
components in the financial statements. The Company is required to adopt the
provisions of Statement 130 for the year ending December 31, 1998. Earlier
application is permitted; however, upon adoption of Statement 130, CORT will be
required to reclassify previously reported annual and interim financial
statements. CORT believes that the disclosure of comprehensive income in
accordance with the provisions of Statement 130 will impact the manner of
presentation of its financial statements as currently and previously reported.
- 7 -
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY-HOLDERS
The Annual Meeting of Stockholders of the Company was held on May 14, 1997.
Set forth below is a description of the matters voted upon and the number
of votes cast for, against or withheld, as well as the number of
abstentions and broker nonvotes, as applicable to each such matter.
1. The following seven directors were elected to the Board of Directors
of the Company. There were no other nominees for director.
A. Keith E. Alessi
Shares voted for: 11,446,340
Shares withheld: 38,146
Abstentions: N/A
Broker nonvotes: N/A
B. Paul N. Arnold
Shares voted for: 11,446,240
Shares withheld: 38,246
Abstentions: N/A
Broker nonvotes: N/A
C. Bruce C. Bruckmann
Shares voted for: 11,446,340
Shares withheld: 38,146
Abstentions: N/A
Broker nonvotes: N/A
D. Michael A. Delaney
Shares voted for: 11,446,260
Shares withheld: 38,226
Abstentions: N/A
Broker nonvotes: N/A
E. Charles M. Egan
Shares voted for: 11,446,340
Shares withheld: 38,146
Abstentions: N/A
Broker nonvotes: N/A
F. Gregory B. Maffei
Shares voted for: 11,446,260
Shares withheld: 38,226
Abstentions: N/A
Broker nonvotes: N/A
G. James A. Urry
Shares voted for: 11,446,260
Shares withheld: 38,226
Abstentions: N/A
Broker nonvotes: N/A
2. The accounting firm of KPMG Peat Marwick LLP was elected independent
accountants for the year ending December 31, 1997.
Shares voted for: 11,482,446
Shares withheld: 200
Abstentions: 1,840
Broker nonvotes: N/A
3. An amendment to the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of each class of the
Company's common stock was approved.
Shares voted for: 11,401,332
Shares withheld: 64,704
Abstentions: 18,450
Broker nonvotes: N/A
- 8 -
<PAGE>
4. The Company's Amended and Restated 1995 Stock-Based Incentive
Compensation Plan was adopted.
Shares voted for: 8,792,429
Shares withheld: 2,146,969
Abstentions: 21,250
Broker nonvotes: 523,838
5. The Company's 1997 Directors Stock Option Plan was adopted.
Shares voted for: 10,336,577
Shares withheld: 590,482
Abstentions: 21,850
Broker nonvotes: 535,577
- 9 -
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CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION (CONTINUED)
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (see Index on page E-1)
(b) Reports on Form 8-K:
None.
- 10 -
<PAGE>
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORT BUSINESS SERVICES CORPORATION
(Registrant)
Date: August 12, 1997 By: /s/ Frances Ann Ziemniak
--------------- ------------------------
Frances Ann Ziemniak
Vice President, Finance, CFO & Secretary
(Principal financial and principal
accounting officer)
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<TABLE>
<CAPTION>
Exhibit
Number Description Page
<S> <C> <C>
2.1 Stock Purchase Agreement, dated June 22, 1993, by and among the
Company, Interfinancial, Inc., General Furniture Leasing Company and
Fortis, Inc.; incorporated by reference to Exhibit 2.1 to CFR's
Registration Statement on Form S-1, No. 33-65094, filed on June 25,
1993
2.2 First Amendment to Stock Purchase Agreement, dated as of August 31,
1993, by and among the Company, Fortis, Inc., Interfinancial, Inc. and
General Furniture Leasing Company; incorporated by reference to Exhibit
2.2 to CFR's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1993
2.3 Assignment and Assumption Agreement, dated as of August 31, 1993,
between CFR and the Company; incorporated by reference to Exhibit 2.3
to CFR's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1993
2.4 Acquisition Agreement, dated March 15, 1996, by and among the Company,
CE Merger Sub Inc. and Evans Rents; incorporated by reference to
Exhibit 2.4 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995
3.1 Restated Certificate of Incorporation of the Company; incorporated by
reference to Exhibit 3.1 to Amendment No. 3 to the Company's
Registration Statement on Form S-1, No. 33-97568 filed on November 13,
1995
3.2 Amendment to Restated Certificate of Incorporation; incorporated by
reference to Appendix A to the Company's Definitive Proxy Statement on
Schedule 14A, filed as of March 31, 1997
3.3 By-laws of the Company; incorporated by reference to Exhibit 3.2 to
Amendment No. 3 to the Company's Registration Statement on Form S-1,
No. 33-97568 filed on November 13, 1995
4.1 Form of Indenture between CFR and United States Trust Company of New
York, as Trustee, with respect to CFR's 12% Senior Notes due 2000;
incorporated by reference to Exhibit 4.1 to Amendment No. 3 to the
Company's Registration Statement on Form S-1, No. 33-65094, filed on
August 20, 1993
4.2 First Supplemental Indenture between CFR and United States Trust
Company of New York, as Trustee, dated August 25, 1995; incorporated by
reference to Exhibit 4.2 to the Company's Registration Statement on
Form S-1, No. 33-97568 filed on September 29, 1995
4.3 Second Supplemental Indenture between CFR and United States Trust
Company of New York, as Trustee, dated September 29, 1995; incorporated
by reference to Exhibit 4.9 to Amendment No. 1 to the Company's
Registration Statement on Form S-1, No. 33-97568 filed on October 23,
1995
</TABLE>
E-1
<PAGE>
4.4 Warrant Agreement, dated September 1, 1993, between the Company and
United States Trust Company of New York, as Warrant Agent; incorporated
by reference to Exhibit 4.7 to the Company's Registration Statement on
Form S-1, No. 33-97568 filed on September 29, 1995
4.5 Amendment No. 1 to Warrant Agreement, dated February 1, 1994, between
the Company and United States Trust Company of New York, as Warrant
Agent; incorporated by reference to Exhibit 4.8 to the Company's
Registration Statement on Form S-1, No. 33-97568 filed on September 29,
1995
10.1 Credit Agreement dated as of November 21, 1995 by and among CFR, the
Company, the lenders identified therein, and NationsBank, N.A., as
agent; incorporated by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1995
10.2 First Amendment to Credit Agreement dated as of May 24, 1996 by and
among CFR, the Company, the lenders identified therein, and
NationsBank, N.A., as agent, incorporated by reference to Exhibit 10.18
to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1996
10.3 Stock Option, Securities Purchase and Stockholders Agreement, dated as
of January 18, 1994, by and among the Company, CFR, Citicorp Venture
Capital Ltd. and certain investors named therein; incorporated by
reference to Exhibit 4.6 to the Company's Registration Statement on
Form S-8, No. 33-72724, filed on December 9, 1993
10.4 Amendment 1 to New Cort Holdings Corporation and Subsidiaries Employee
Stock Option and Stock Purchase Plan as adopted by the Board of
Directors of the Company on December 21, 1993; incorporated by
reference to Exhibit 10.11 to CFR's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993
10.5 New Cort Holdings Corporation and Subsidiaries Employee Stock Option
and Stock Purchase Plan (1995 Plan Distribution) as adopted by the
Board of Directors of the Company on December 16, 1994; incorporated by
reference to Exhibit 10.13 to CFR's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1995
10.6 Form of First Amendment to Stockholders Agreement, dated as of November
13, 1995, by and among the Company, Citicorp Venture Capital Ltd., and
certain investors named therein; incorporated by reference to Exhibit
10.5 to Amendment No. 3 to the Company's Registration Statement on Form
S-1, No. 33-97568 filed on November 13, 1995
10.7 Registration Rights Agreement for Common Stock, dated as of January 18,
1994, by and among the Company, Citicorp Venture Capital Ltd. and
certain investors named therein; incorporated by reference to Exhibit
10.4 to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1994
10.8 CFR's Supplemental Executive Retirement Plan, dated October 28, 1992,
as revised effective January 1, 1993, restated through the Second
Amendment;
E-2
<PAGE>
incorporated by reference to Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1996
10.9 Agreement for Irrevocable Trust Under CORT Furniture Rental
Supplemental Executive Retirement Plan, dated June 1, 1996, between CFR
and Mentor Trust Company; incorporated by reference to Exhibit 10.9 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1996
10.10 Letter Agreement, dated July 24, 1992, between CFR and Paul N. Arnold;
incorporated by reference to Exhibit 10.16 to CFR's Registration
Statement on Form S-1, No. 33-65094, filed on June 25, 1993
10.11 Letter Agreement, dated August 18, 1993, between CFR and Paul N.
Arnold; incorporated by reference to Exhibit 10.26 to Amendment No. 5
to the Company's Registration Statement on Form S-1, No. 33-65094,
filed on August 25, 1993
10.12 Employment Agreement, dated September 1, 1994, between CFR and Charles
M. Egan; incorporated by reference to Exhibit 10.10 to CFR's Annual
Report on Form 10-K for the year ended December 31, 1994
10.13 Amended and Restated CORT Business Services Corporation 1995 Directors
Stock Option Plan adopted by the Board of Directors October 18, 1995
and amended and restated on May 14, 1997
10.14 Equity Share Agreement, between CFR and Lloyd and Eileen S. Lenson,
dated April 20, 1994; incorporated by reference to Exhibit 10.17 to the
Company's Registration Statement on Form S-1, No. 33-97568 filed on
September 29, 1995
10.15 Form of Senior Notes Purchase Agreement between CFR and certain holders
of CFR's 12% Senior Notes Due 2000, dated September 28, 1995;
incorporated by reference to Exhibit 10.18 to Amendment No. 2 to the
Company's Registration Statement on Form S-1, No. 33-97568 filed on
November 1, 1995
10.16 Private Exchange Commitment Letter by and among the Company, Citicorp
Venture Capital Ltd. and certain investors, dated September 28, 1995;
incorporated by reference to Exhibit 10.19 to Amendment No. 1 to the
Company's Registration Statement on Form S-1, No. 33-97568 filed on
October 23, 1995
10.17 Amended and Restated CORT Business Services Corporation 1995
Stock-Based Incentive Compensation Plan as adopted by the Board of
Directors on July 25, 1995 and amended and restated on May 14, 1997
10.18 CORT Business Services Corporation 1997 Directors Stock Option Plan, as
adopted by the stockholders of the Company at the Annual Meeting of
Stockholders on May 14, 1997; incorporated by reference to Appendix C
to the Company's Definitive Proxy Statement on Schedule 14A, filed as
of March 31, 1997
11.1 Statement re computation of per share earnings
27 Financial Data Schedules
E-3
EXHIBIT 10.13
AMENDED AND RESTATED
CORT BUSINESS SERVICES CORPORATION
1995 DIRECTORS STOCK OPTION PLAN
Adopted: October 18, 1995
Amended: November 14, 1995
Amended and Restated: May 14, 1997
<PAGE>
CORT BUSINESS SERVICES CORPORATION
DIRECTORS STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of the Plan is to assist the Company
and its Subsidiary in attracting and retaining services of experienced and
knowledgeable independent directors of the Company for the benefit of the
Company and its stockholders and to provide additional incentives for such
independent directors to continue to work for the best interests of the Company
and its stockholders through continuing ownership of its common stock.
2. Definitions
2.01 "1934 Act" means the Securities Exchange Act of 1934, as amended.
2.02 "Board" means the Board of Directors of the Company.
2.03 "Cause" shall have the meaning given to such term in Section 7.04
2.04 "Code" means the Internal Revenue Code of 1986, as amended.
2.05 "Committee" means the committee designated by the Board to administer
the Plan under Section 5. The Committee shall have at least two members, each of
whom shall be a member of the Board and shall not be an Eligible Director.
2.06 "Common Stock" means the Company's Common Stock, $0.01 par value per
share, or such other class or kind of shares or other securities resulting from
the application of Section 8.
2.07 "Company" means CORT Business Services Corporation, a Delaware
corporation, or any successor corporation.
2.08 "Eligible Director" means each director of the Company who is not
otherwise an employee of the Company or any Subsidiary.
2.10 "Fair Market Value" means, on any given date, the previous days'
closing price of actual sales of shares of Common Stock on the principal
national securities exchange on which
<PAGE>
the Common Stock is listed, or if not listed, as reported on the National
Association of Securities Dealers Automated Quotation System, on such date or,
if the Common Stock was not traded or reported on such date, on the last
preceding day on which the Common Stock was traded or reported.
2.11 "Grantee" means an Eligible Director to whom an Option is granted.
2.12 "Holder" means an Eligible Director or a Permitted Transferee, as
applicable.
2.13 "Initial Grant" shall have the meaning set forth in Section 3.
2.14 "Loan Exercise" shall have the meaning given to such term in Section
5.02.
2.15 "Mature Common Stock" means Common Stock owned for six months or more,
or such other period as the Committee may determine subject to applicable
accounting regulations, by the respective Holder.
2.16 "1934 Act" means the Securities Exchange Act of 1934, as amended.
2.17 "Option" means a non-qualified stock option granted from time to time
under Section 3 of the Plan.
2.18 "Option Exercise Period" means, with respect to shares of Common Stock
related to either an Initial Grant or a Secondary Grant (as defined in the
Plan), the period commencing when the shares of Common Stock granted pursuant to
an Option vest and ending ten years from the date of the Initial Grant.
2.19 "Permitted Transferee" means the spouse, parents, siblings, children
or grandchildren (in each case, natural or adopted) of a Grantee, any trust for
his or her benefit or the benefit of his or her spouse, parents, siblings,
children or grandchildren (in each case, natural or adopted), or any
corporation, limited liability company, partnership or similar entity in which
the direct and beneficial owner of all of the equity interest in such
corporation, limited liability company, partnership or similar entity is such
individual Grantee or Permitted Transferee (or any trust for the benefit of such
persons).
2
<PAGE>
2.20 "Plan" means the CORT Business Services Corporation 1995 Directors
Stock Option Plan herein set forth, as it may be amended from time to time.
2.21 "Registration Statement" means the Company's Form S-1 Registration
Statement (No. 33-97568), as amended, filed in connection with the Company's
proposed initial public offering of Common Stock.
2.22 "Rule 16b-3" means Rule 16b-3, or any successor rule, promulgated by
the SEC under the 1934 Act.
2.23 "SEC" means the Securities and Exchange Commission, or any successor
entity.
2.24 "Share Delivery Exercise" shall have the meaning given to such term in
Section 5.02.
2.25 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company (or any subsequent
parent of the Company) if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
3. Eligibility; Grant of Option(1)
An Option to acquire 4,000 shares of Common Stock shall be granted
(the "Initial Grant") to each Eligible Director on the day on which the initial
public offering of the shares of Common Stock to be issued pursuant to the
Registration Statement on Form S-1 (No. 33-97568) shall be consummated, subject
to approval of the Plan by the stockholders of the Company; provided, however,
that if Gregory B. Maffei shall become an Eligible Director on or before January
1, 1996, he shall receive an Initial Grant at the time he becomes an Eligible
Director and such Initial Grant shall consist of 5,000 shares of Common Stock.
Thereafter, upon the
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(1) All share amounts have been adjusted to reflect the 7.5-for-1 stock
combination declared in connection with the initial public offering
described in the Registration Statement.
3
<PAGE>
first anniversary of the date of the Initial Grant and provided that such
initial public offering is consummated, each Eligible Director shall be granted
an Option to acquire 2,000 shares of Common Stock (the "Secondary Grant").
4. Vesting and Forfeitures
4.01 A Holder shall become vested as to 33 1/3% of the shares of Common
Stock covered by the Option awarded under the Initial Grant on the first
anniversary of such Initial Grant, as to 66 2/3% of the shares of Common Stock
covered by the Option awarded under the Initial Grant on the second anniversary
of such Initial Grant and as to all of the shares of Common Stock covered by the
Option awarded in the Initial Grant on the third anniversary of such Initial
Grant. A Holder shall become vested as to 50% of the shares of Common Stock
related to the Option awarded under the Secondary Grant on the first anniversary
of such Secondary Grant and shall become vested as to 100% of the shares of
Common Stock related to the Option awarded in the Secondary Grant on the second
anniversary of such Secondary Grant.
4.02 If a Holder shall cease being a director of the Company for any reason
prior to the date on which any Option awarded hereunder is fully vested, the
shares subject to such Option which are not vested shall be forfeited and the
Holder shall have no further rights to exercise the Option with respect to such
unvested shares.
5. Administration and Implementation of Plan
5.01 The Plan shall be administered by the Committee, which shall have full
power to interpret and administer the Plan and full authority to act in
determining such terms and conditions of Options granted under the Plan which
are not otherwise inconsistent with the Plan.
5.02 The Committee's powers shall include, but not be limited to, the
power: (a) to establish an arrangement through registered broker-dealers whereby
temporary financing may be made available to a Holder by the broker-dealer,
under the rules and regulations of the Federal Reserve Board, for the purpose
4
<PAGE>
of assisting the Holder in the exercise of an Option; (b) to establish
procedures at the Committee's discretion, and if not prohibited by the
restrictions in the Company's and its Subsidiary's financing agreements, for a
Holder (i) to have withheld from the total number of shares to be acquired upon
the exercise of an Option that number of shares having a Fair Market Value,
which, together with such cash as shall be paid in respect of fractional shares,
shall equal the minimum statutory tax withholding obligation incurred by the
Holder upon such exercise, or (ii) to exercise an Option by delivering a number
of shares of Mature Common Stock already owned by such Holder having a Fair
Market Value that shall equal the option exercise price and/or the tax
withholding obligation incurred by the Holder upon such exercise (a "Share
Delivery Exercise"); and (c) to establish a loan program, or to cause its
Subsidiary to establish a loan program, if not prohibited by the restrictions in
the Company's and Subsidiary's financing agreements, to loan to a Holder who is
still a director of the Company at the time of exercise an amount sufficient to
satisfy the exercise price and/or tax obligation incurred by the Holder upon
such exercise and thereafter loan promptly to such Holder such additional
amounts sufficient to pay further withholding obligations as may be determined
from time to time to be payable as a result of such exercise (a "Loan
Exercise"). Any amounts loaned to such Holder shall be evidenced by a promissory
note from such Holder having such terms and conditions as are mutually agreed to
by the Committee and the Holder; provided, however, that such loan shall bear a
market rate of interest and shall not limit the recourse of the lender to any
particular assets of the Holder.
5.03 The Committee shall have the power to adopt regulations for carrying
out the Plan and to make changes in such regulations not inconsistent with the
Plan as it shall, from time to time, deem advisable. The Committee shall have
the power unilaterally and without approval of a Holder to amend an existing
Option in order to carry out the purposes of the Plan so long as such amendment
does not take away any benefit granted to a Holder by the Option and as long as
the amended Option is not inconsistent
5
<PAGE>
with the Plan and Rule 16b-3. Any interpretation by the Committee of the terms
and provisions of the Plan and the administration thereof, and all action taken
by the Committee, shall be final and binding on Holders.
6. Shares of Common Stock Subject to the Plan(2)
6.01 Subject to adjustment as provided in Section 8, the total number of
shares of Common Stock available for Options under the Plan shall be 50,000
shares of Common Stock.
6.02 The grant of an Option shall reduce the shares of Common Stock as to
which Options may be granted by the number of shares subject to such Option. Any
shares issued hereunder may consist, in whole or in part, of authorized and
unissued shares or treasury shares of Common Stock. If any shares subject to any
Option granted hereunder are forfeited or such Option otherwise terminates
without the issuance of such shares or the payment of other consideration in
lieu of such shares, the shares subject to such Option, to the extent of any
such forfeiture or termination, shall again be available for grants of Options
under the Plan. In the event there are insufficient shares of Common Stock
available for Options under the Plan to satisfy all of the Option grants under
Section 3 on the same day, such Option grants shall be reduced pro-rata.
7. Options
Options give an Eligible Director the right to purchase a specified
number of shares of Common Stock from the Company for a specified time period at
a fixed price. The grant of Options shall be subject to the following terms and
conditions:
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(2) All share amounts have been adjusted to reflect the 7.5-for-1 stock
combination declared in connection with the initial public offering
described in the Registration Statement.
6
<PAGE>
7.01 Option Grants:
Options shall be evidenced by Option award certificates. Such
certificates shall be uniform and not inconsistent with the requirements of the
Plan, and may contain such other provisions as the Committee shall deem
advisable.
7.02 Option Price: The price per share at which Common Stock may be
purchased upon exercise of an Option shall be the Fair Market Value of a share
of Common Stock on the date of grant; provided, however, that the Option price
for the Initial Grant shall be equal to the price to the public set forth on the
cover page of the definitive prospectus included in the Registration Statement.
7.03 Exercise of Option: Subject to Section 5 of this Plan, each Option
granted under this Plan may be exercised in full at one time or in part from
time to time only during the Option Exercise Period by the giving of written
notice, signed by the Holder, to the Company stating the number of shares of
Common Stock with respect to which the Option is being exercised, accompanied by
full payment for such shares pursuant to Section 7.05 hereof.
7.04 Transfer and Exercise: No Option shall be transferable by the Holder
except by will or the laws of descent and distribution; provided, however, that
Options may be pledged, assigned or transferred (i) during the Grantee's
lifetime by the Grantee to a Permitted Transferee, (ii) by a Permitted
Transferee to another Permitted Transferee or (iii) as otherwise permitted by
the Committee; provided, further, that any such transfer shall comply with all
terms and conditions established by the Committee. In the event of the death,
retirement or any other termination of Board service of a Holder except for
removal for Cause, the Option, if otherwise exercisable by the Holder at the
time of such termination, may be exercised upon the earlier of (A) the end of
the Option Exercise Period and (B) within one year after such termination. In
the event of termination for Cause, all previously granted Options shall be of
no further force and effect. Termination for "Cause" shall be defined as
termination on account of any act of (x) fraud or intentional misrepresentation,
or (y) embezzlement, misappropriation or conversion of assets or opportunities
of the Company or any Subsidiary.
7
<PAGE>
7.05 Payment of Option Price: The Option price of the shares of Common
Stock acquired upon the exercise of an Option shall be paid in full in cash at
the time of the exercise or, with the consent of the Committee in accordance
with Section 5.02, and if permitted by the restrictions in the Company's and its
Subsidiary's financing agreements pursuant to a Share Delivery Exercise.
8. Adjustments Upon Changes in Capitalization
In the event of a reorganization, recapitalization, stock split,
reverse stock split (other than the 7.5-for-1 reverse stock split declared in
connection with the Company's proposed initial public offering), spin-off,
split-off, split up, stock dividend, issuance of stock rights, combination of
shares, merger, consolidation or any other change in the corporate structure of
the Company affecting Common Stock, or any distribution to stockholders in
respect of stock other than a cash dividend, the Committee shall make the
adjustments in the number and kind of shares authorized by the Plan and any
adjustments to outstanding Options as it determines appropriate. No fractional
shares of Common Stock shall be issued upon exercise of an Option pursuant to
such an adjustment. The Fair Market Value of any fractional shares resulting
from adjustments pursuant to this section shall be paid in cash to the Holder.
If during the term of any Option granted hereunder the Company shall be merged
into or consolidated with or otherwise combined with a person or entity, or
there is a liquidation of the Company, then at the election of the Committee,
the Company may take such other action as the Committee shall determine to be
reasonable under the circumstances (and consistent with Rule 16b-3) to permit
the Holder to realize the value of such Option, including without limitation
paying cash to such Holder equal to the value of the Option or requiring the
acquiring corporation to grant options or stock to such Holder having a value
equal to the value of the Option.
8
<PAGE>
9. Effective Date, Termination and Amendment
The Plan shall become effective on October 31, 1995, subject to
stockholder approval. The Plan shall remain in full force and effect until the
earlier of 10 years from the date of its adoption by the Board, or the date it
is terminated by the Board. The Board shall have the power to amend the Plan,
subject to the foregoing limitation, or to suspend or terminate the Plan at any
time.
Termination of the Plan pursuant to this Section 9 shall not affect
Options outstanding under the Plan at the time of termination.
10. General Provisions
10.01 No Eligible Director shall have any claim or right to be granted an
Option hereunder. Neither this Plan nor any action taken hereunder shall be
construed as (i) giving any Holder any right to continue to be affiliated with
the Company, (ii) giving any Holder any equity or interest of any kind in any
assets of the Company, or (iii) creating a trust of any kind or a fiduciary
relationship of any kind between the Company and any such person. No Holder
shall have any of the rights of a stockholder with respect to shares of Common
Stock covered by an Option until such time as the Option has been exercised and
shares have been issued to such person.
10.02 Holders shall be responsible to make appropriate provision for all
taxes required to be withheld in connection with any Option, the exercise
thereof and the transfer of shares of Common Stock pursuant to this Plan. Such
responsibility shall extend to all applicable Federal, state, local or foreign
withholding taxes. In the case of the exercise of Options, the Company shall, at
the election of the Holder, but only with the consent of the Committee, and if
not prohibited by the restrictions in the Company's and its Subsidiary's
financing agreements, have the right to satisfy the applicable tax obligation
through a Share Delivery Exercise or a Loan Exercise.
9
<PAGE>
10.03 The Company shall not be obligated to deliver certificates for Common
Stock upon the exercise of an Option unless the Holder has made payment in full
for such Common Stock required by Sections 7.02 and 7.05 and has arranged for
withholding of all taxes required by Section 10.02.
10.04 Upon exercise of an Option, the Holder shall be required to make such
representations and furnish such information as may be reasonably required by
the Committee to permit the Company to issue or transfer the shares of Common
Stock in compliance with the provisions of applicable Federal or state
securities laws. The Company, in its discretion, may postpone the issuance and
delivery of shares of Common Stock upon any exercise of an Option until
completion of such registration or other qualification of such shares under any
Federal or state laws, or stock exchange listing, as the Company may consider
appropriate. The Company is not obligated to register or qualify the shares of
Common Stock issued pursuant to Options under Federal or state securities laws
and may refuse to issue such shares if neither registration nor exemption
therefrom is practical. The Board may require that prior to the issuance or
transfer of any shares of Common Stock upon exercise of an Option, the recipient
enter into a written agreement to comply with any restrictions on subsequent
disposition that the Committee deems necessary or advisable under any applicable
federal and state securities laws. Certificates representing the shares of
Common Stock issued hereunder may bear a restrictive legend to reflect such
restrictions.
10.05 To the extent that Federal laws (such as the 1934 Act, the Code or
the Employee Retirement Income Security Act of 1974, as amended) do not
otherwise control, the Plan and all determinations made and actions taken
pursuant hereto shall be governed by the law of the State of Delaware and
construed accordingly.
10
EXHIBIT 10.17
AMENDED AND RESTATED
CORT BUSINESS SERVICES CORPORATION
1995 STOCK-BASED INCENTIVE COMPENSATION PLAN
Date Adopted: July 25, 1995
Date Amended: May 14, 1997
<PAGE>
AMENDED AND RESTATED
CORT BUSINESS SERVICES CORPORATION
1995 STOCK-BASED INCENTIVE COMPENSATION PLAN
1. Purpose of the Plan
The purpose of the Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued employees by offering them a
greater stake in the Company's success and a closer identity with it, and to
encourage ownership of the Company's stock by such Employees.
2. Definitions
2.1 "Affiliate" means any entity other than the Subsidiaries in which the
Company has a substantial direct or indirect equity interest, as determined by
the Board.
2.2 "Award" means an award of Deferred Stock, Restricted Stock, Options or
SARs under the Plan.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Common Stock" means the Class A Common Stock of the Company, par value
$.01 per share, or such other class or kind of shares or other securities
resulting from the application of Section 10.
2.6 "Company" means CORT Business Services Corporation, a Delaware
corporation, or any successor corporation.
2.7 "Committee" means the committee designated by the Board to administer
the Plan under Section 4. The Committee shall have at least three members, each
of whom shall be a member of the Board, a Non-Employee Director and an Outside
Director.
2.8 "Deferred Stock" means an Award made under Section 6 of the Plan to
receive Common Stock at the end of a specified Deferral Period.
<PAGE>
2.9 "Deferral Period" means the period during which the receipt of a
Deferred Stock Award under Section 6 of the Plan will be deferred.
2.10 "Effective Date" shall have the meaning ascribed to such term in
Section 11 of the Plan.
2.11 "Employee" means an officer or other key employee of the Company, a
Subsidiary or an Affiliate including a director who is such an employee.
2.12 "Fair Market Value" means on any given date, the value per share of
the Common Stock as determined by the Committee if the Common Stock is not
traded in a public market, and, if the Common Stock is traded in a public
market, shall be, if the Common Stock is listed on a national securities
exchange or included in the NASDAQ Stock Market National Market System, the last
reported sale price thereof on such date, or, if the Common Stock is not so
listed or included, the mean between the last reported "bid" and "asked" prices
thereof on such date, as reported on NASDAQ or, if not so reported, as reported
by the National Daily Quotation Bureau, Inc. or as reported in the customary
financial reporting service, as applicable and as the Committee determines.
2.13 "Grantee" means an Employee to whom an Award is granted.
2.14 "Holder" means a Grantee or a Permitted Transferee, as applicable.
2.15 "Incentive Stock Option" means an Option intended to meet the
requirements of an incentive stock option as defined in section 422 of the Code
and designated as an Incentive Stock Option.
2.16 "1934 Act" means the Securities Exchange Act of 1934, as amended.
2.17 "Non-Employee Director" shall have the meaning given to such term in
Rule 16b-3.
2.18 "Non-Qualified Option" means an Option not intended to be an Incentive
Stock Option, and designated as a Non-Qualified Option.
2
<PAGE>
2.19 "Option" means any stock option granted from time to time under
Section 8 of the Plan.
2.20 "Outside Director" means a member of the Board who: (i) is not a
current employee of the Company, its Subsidiaries or Affiliates; (ii) is not a
former employee of the Company, its Subsidiaries or Affiliates who receives
during the year compensation for prior services with the Company, its
Subsidiaries or Affiliates (other than benefits under a tax-qualified retirement
plan); (iii) has not been an officer of the Company, its Subsidiaries or
Affiliates; and (iv) does not receive any remuneration from the Company, its
Subsidiaries or Affiliates (either directly or indirectly) in any capacity other
than as director. The requirements of this Section shall be interpreted and
applied in a manner consistent with the requirements of Treasury Regulationss.
SE 1.162-27(e)(3).
2.21 "Performance Goals" means a goal that must be met by the end of a
period specified by the Committee (but that is substantially uncertain to be met
before the grant of the Award) based upon: (i) the price of Common Stock, (ii)
the market share of the Company, its Subsidiaries or Affiliates (or any business
unit thereof), (iii) sales by the Company, its Subsidiaries or Affiliates (or
any business unit thereof), (iv) earnings per share of Common Stock, (v) return
on shareholder equity of the Company, or (vi) costs of the Company, its
Subsidiaries or Affiliates (or any business unit thereof).
2.22 "Permitted Transferee" means the spouse, parents, siblings, children
or grandchildren (in each case, natural or adopted) of a Grantee, any trust for
his or her benefit or the benefit of his or her spouse, parents, siblings,
children or grandchildren (in each case, natural or adopted), or any corporation
or partnership in which the direct and beneficial owner of all of the equity
interest in such corporation or partnership is such individual Grantee or
Permitted Transferee (or any trust for the benefit of such persons).
2.23 "Plan" means the CORT Business Services Corporation 1995 Stock-Based
Incentive Compensation Plan herein set forth, as amended from time to time.
3
<PAGE>
2.24 "Restricted Stock" means Common Stock awarded by the Committee under
Section 7 of the Plan.
2.25 "Restriction Period" means the period during which Restricted Stock
awarded under Section 7 of the Plan is subject to forfeiture.
2.26 "Rule 16b-3" means Rule 16b-3, or any successor thereto, promulgated
by the Securities and Exchange Commission under the 1934 Act.
2.27 "SAR" means a stock appreciation right awarded by the Committee under
Section 9 of the Plan.
2.28 "Retirement" means retirement from the active employment of the
Company, a Subsidiary or an Affiliate pursuant to the relevant provisions of the
applicable pension plan of such entity or as otherwise determined by the Board.
2.29 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company (or any subsequent
parent of the Company) if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
2.30 "Ten Percent Stockholder" means a person who on any given date owns,
either directly or indirectly (taking into account the attribution rules
contained in section 424(d) of the Code), stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or a
Subsidiary.
3. Eligibility
Any Employee is eligible to receive an Award.
4. Administration and Implementation of Plan
4.1 The Plan shall be administered by the Committee, which shall have full
power to interpret and administer the Plan and full authority to act in
4
<PAGE>
selecting the Employees to whom Awards will be granted, in determining the type
and amount of Awards to be granted to each such Employee, the terms and
conditions of Awards granted under the Plan and the terms of agreements which
will be entered into with Holders, so long as such terms, conditions and
agreements are not otherwise inconsistent with the Plan.
4.2 The Committee's powers shall include, but not be limited to, the power
to determine whether, to what extent and under what circumstances an Option may
be exchanged for cash, Restricted Stock, Deferred Stock or some combination
thereof; to determine whether, to what extent and under what circumstances an
Award is made and operates on a tandem basis with other Awards made hereunder;
to determine whether, to what extent and under what circumstances Common Stock
or cash payable with respect to an Award shall be deferred, either automatically
or at the election of the Holder (including the power to add deemed earnings to
any such deferral); to determine the effect, if any, of a change in control of
the Company upon outstanding Awards; and to grant Awards (other than Incentive
Stock Options) that are transferable by the Grantee.
4.3 The Committee shall have the power to adopt regulations for carrying
out the Plan and to make changes in such regulations not inconsistent with the
Plan as it shall, from time to time, deem advisable. The Committee shall have
the power unilaterally and without approval of a Holder to amend an existing
Award in order to carry out the purposes of the Plan so long as such an
amendment does not take away any benefit granted to a Holder by the Award and as
long as the amended Award comports with the terms of the Plan and Rule 16b-3.
Any interpretation by the Committee of the terms and provisions of the Plan and
the administration thereof, and all action taken by the Committee, shall be
final and binding on Holders.
4.4 The Committee may condition the grant of any Award or the lapse of any
Deferral or Restriction Period (or any combination thereof) upon the Grantee's
achievement of a Performance Goal that is established by the Committee before
the grant of the Award. The Committee shall have discretion to determine the
specific targets with respect to various categories of Performance Goals set
5
<PAGE>
forth in the definition thereof. Before granting an Award or permitting the
lapse of any Deferral or Restriction Period subject to this Section, the
Committee shall certify that an individual has satisfied the applicable
Performance Goal.
5. Shares of Stock Subject to the Plan
5.1 Subject to adjustment as provided in Section 10, the total number of
shares of Common Stock available for Awards under the Plan shall be 1,210,000
shares.
5.2 The maximum number of Awards that may be awarded to any Employee shall
not exceed 363,000 shares during the term of the Plan (the "Individual Limit").
Subject to Section 5.3 and Section 10, any Award that is cancelled or repriced
by the Committee shall count against the Individual Limit. Notwithstanding the
foregoing, the Individual Limit may be adjusted to reflect the effect on Awards
of any transaction or event described in Section 10.
5.3 Any shares of Common Stock issued by the Company shall reduce the
shares of Common Stock available for Awards under the Plan and shall be counted
against the Individual Limit. Any shares of Common Stock issued hereunder may
consist, in whole or in part, of authorized and unissued shares or treasury
shares of Common Stock. If any shares of Common Stock subject to any Award
granted hereunder are forfeited or such Award otherwise terminates without the
issuance of such shares or the payment of other consideration in lieu of such
shares, the shares subject to such Award, to the extent of any such forfeiture
or termination, shall again be available for Awards under the Plan.
6. Deferred Stock
An Award of Deferred Stock is an agreement by the Company to deliver
to the Holder a specified number of shares of Common Stock at the end of a
specified Deferral Period. Such an Award shall be subject to the following terms
and conditions.
6.1 Deferred Stock Awards shall be evidenced by Deferred Stock agreements.
Such agreements shall conform to the requirements of the Plan and may contain
such other provisions as the Committee shall deem advisable.
6
<PAGE>
6.2 Upon determination of the number of shares of Deferred Stock to be
awarded to a Holder, the Committee shall direct that the same be credited to the
Holder's account on the books of the Company but that issuance and delivery of
the same shall be deferred until the date or dates provided in Section 6.5
hereof. Prior to issuance and delivery hereunder the Holder shall have no rights
as a stockholder with respect to any shares of Deferred Stock credited to the
Holder's account.
6.3 Amounts equal to any dividends declared during the Deferral Period with
respect to the number of shares covered by a Deferred Stock Award will be paid
to the Holder currently, or deferred and deemed to be reinvested in additional
Deferred Stock, or otherwise reinvested on such terms as are determined at the
time of the Award by the Committee, in its sole discretion, and specified in the
Deferred Stock agreement.
6.4 The Committee may condition the grant of an Award of Deferred Stock or
the expiration of the Deferral Period upon the Grantee's achievement of one or
more Performance Goal(s) specified in the Deferred Stock agreement. If the
Grantee fails to achieve the specified Performance Goal(s), the Committee shall
not grant the Deferred Stock Award to the Holder, or the Holder shall forfeit
the Award and no Common Stock shall be transferred to him pursuant to the
Deferred Stock Award. Dividends paid during the Deferral Period on Deferred
Stock subject to a Performance Goal shall be reinvested in additional Deferred
Stock and the lapse of the Deferral Period for such Deferred Stock shall be
subject to the Performance Goal(s) previously established by the Committee.
6.5 The Deferred Stock agreement shall specify the duration of the Deferral
Period taking into account Grantee's termination of employment on account of
death, disability, Retirement or other cause. The Deferral Period may consist of
one or more installments. At the end of the Deferral Period or any installment
thereof the shares of Deferred Stock applicable to such installment credited to
the account of a Holder shall be issued and delivered to the Holder (or, where
appropriate, the Holder's legal representative) in accordance with the terms of
7
<PAGE>
the Deferred Stock agreement. The Committee may, in its sole discretion,
accelerate the delivery of all or any part of a Deferred Stock Award or waive
the deferral limitations for all or any part of a Deferred Stock Award.
7. Restricted Stock
An Award of Restricted Stock is a grant by the Company of a specified
number of shares of Common Stock to the Holder, which shares are subject to
forfeiture upon the happening of specified events. Such an Award shall be
subject to the following terms and conditions:
7.1 Restricted Stock shall be evidenced by Restricted Stock agreements.
Such agreements shall conform to the requirements of the Plan and may contain
such other provisions as the Committee shall deem advisable.
7.2 Upon determination of the number of shares of Restricted Stock to be
granted to the Holder, the Committee shall direct that a certificate or
certificates representing the number of shares of Common Stock be issued to the
Holder with the Holder designated as the registered owner. The certificate(s)
representing such shares shall be legended as to sale, transfer, assignment,
pledge or other encumbrances during the Restriction Period and deposited by the
Holder, together with a stock power endorsed in blank, with the Company, to be
held in escrow during the Restriction Period.
7.3 During the Restriction Period the Holder shall have the right to
receive dividends from and to vote the shares of Restricted Stock.
7.4 The Committee may condition the grant of an Award of Restricted Stock
or the expiration of the Restriction Period upon the Grantee's achievement of
one or more Performance Goal(s) specified in the Restricted Stock agreement. If
the Grantee fails to achieve the specified Performance Goal(s), the Committee
shall not grant the Restricted Stock to the Holder, or the Holder shall forfeit
the Award of Restricted Stock and the Common Stock shall be forfeited to the
Company.
7.5 The Restricted Stock agreement shall specify the duration of the
Restriction Period and the performance, employment or other conditions
(including termination of employment on account of death, disability, Retirement
8
<PAGE>
or other cause) under which the Restricted Stock may be forfeited to the
Company. At the end of the Restriction Period the restrictions imposed hereunder
shall lapse with respect to the number of shares of Restricted Stock as
determined by the Committee, and the legend shall be removed and such number of
shares delivered to the Holder (or, where appropriate, the Holder's legal
representative). The Committee may, in its sole discretion, modify or accelerate
the vesting and delivery of shares of Restricted Stock.
8. Options
Options give an Employee the right to purchase a specified number of
shares of Common Stock from the Company for a specified time period at a fixed
price. Options may be either Incentive Stock Options or Non-Qualified Stock
Options. The grant of Options shall be subject to the following terms and
conditions:
8.1 Option Grants: Options shall be evidenced by Option agreements. Such
agreements shall be uniform and not inconsistent with the requirements of the
Plan, and may contain such other provisions as the Committee shall deem
advisable.
8.2 Option Price: The price per share at which Common Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but,
in the case of grants of Incentive Stock Options, shall be not less than the
Fair Market Value of a share of Common Stock on the date of grant. In the case
of any Incentive Stock Option granted to a Ten Percent Stockholder, the option
price per share shall not be less than 110% of the Fair Market Value of a share
of Common Stock on the date of grant. The option price per share for
Non-Qualified Options may be less than the Fair Market Value of a share of
Common Stock on the date of grant.
8.3 Term of Options: The Option agreements shall specify when an Option may
be exercisable and the terms and conditions applicable thereto. The term of an
Option shall in no event be greater than ten (10) years (five (5) years in the
case of an Incentive Stock Option granted to a Ten Percent Stockholder) and no
Option may be exercisable sooner than six months from date of grant.
9
<PAGE>
8.4 Incentive Stock Options: Each provision of the Plan and each Option
agreement relating to an Incentive Stock Option shall be construed so that each
Incentive Stock Option shall be an incentive stock option as defined in section
422 of the Code, and any provisions of the Option agreement thereof that cannot
be so construed shall be disregarded. In no event may a Holder be granted an
Incentive Stock Option which does not comply with the grant and vesting
limitations prescribed by section 422(d) of the Code. Incentive Stock Options
may not be granted to employees of Affiliates.
8.5 Restrictions on Transferability: No Incentive Stock Option shall be
transferable otherwise than by will or the laws of descent and distribution and,
during the lifetime of the Grantee, shall be exercisable only by the Grantee.
Upon the death of a Grantee, the person to whom the rights have passed by will
or by the laws of descent and distribution may exercise an Incentive Stock
Option only in accordance with this Section 8.
8.6 Payment of Option Price: The option price of the shares of Common Stock
upon the exercise of an Option shall be paid in full in cash at the time of the
exercise or, with the consent of the Committee, in whole or in part in Common
Stock valued at Fair Market Value on the date of exercise. With the consent of
the Committee, payment upon the exercise of a Non-Qualified Option may be made
in whole or in part by Restricted Stock (based on the fair market value of the
Restricted Stock on the date the Option is exercised, as determined by the
Committee). In such case the Common Stock to which the Option relates shall be
subject to the same forfeiture restrictions originally imposed on the Restricted
Stock exchanged therefor.
8.7 Termination by Death: If a Grantee's employment by the Company, a
Subsidiary or Affiliate terminates by reason of death, any Option granted to
such Grantee (whether held by such Grantee or a subsequent Holder) may
thereafter be exercised (to the extent such Option was exercisable at the time
of death or on such accelerated basis as the Committee may determine at or after
grant) by, where appropriate, a subsequent Holder, if any, the Holder's
transferee or legal representative, for a period of six (6) months from the date
of death or until the expiration of the stated term of the Option, whichever
period is shorter.
10
<PAGE>
8.8 Termination by Reason of Retirement or Disability: If a Grantee's
employment by the Company, a Subsidiary or Affiliate terminates by reason of
disability (as determined by the Committee) or Retirement, any unexercised
Option granted to the Grantee (whether held by such Grantee or a subsequent
Holder) may thereafter be exercised by the Holder (or, where appropriate, the
Holder's transferee or legal representative), to the extent it was exercisable
at the time of termination or on such accelerated basis as the Committee may
determine at or after grant, for a period of three (3) months from the date of
such termination of employment or until the expiration of the stated term of the
Option, whichever period is shorter.
8.9 Other Termination: If a Grantee's employment by the Company, Subsidiary
or Affiliate terminates for any reason other than death, disability or
Retirement, all unexercised Options awarded to the Grantee (whether held by such
Grantee or a subsequent Holder) shall terminate on the date of such termination
of employment.
9. Stock Appreciation Rights
SARs give the Holder the right to receive, upon exercise of the SAR,
the increase in the Fair Market Value of a specified number of shares of Common
Stock from the date of grant of the SAR to the date of exercise. The grant of
SARs shall be subject to the following terms and conditions:
9.1 SARs are rights to receive a payment in cash, Common Stock, Restricted
Stock or Deferred Stock as selected by the Committee. The value of these rights,
which are determined by the appreciation in the number of shares of Common Stock
subject to the SAR, shall be evidenced by SAR agreements. Such agreements shall
conform to the requirements of the Plan and may contain such other provisions as
the Committee shall deem advisable. An SAR may be granted in tandem with all or
a portion of a related Option under the Plan ("Tandem SAR"), or may be granted
separately ("Freestanding SAR"). A Tandem SAR may be granted either at the time
of the grant of the Option or at any time thereafter during the term of the
11
<PAGE>
Option and shall be exercisable only to the extent that the related Option is
exercisable. In no event shall any SAR be exercisable within the first six (6)
months of its grant.
9.2 The base price of a Tandem SAR shall be the option price under the
related Option. The base price of a Freestanding SAR shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock, as
determined by the Committee, on the date of grant of the Freestanding SAR.
9.3 A SAR shall entitle the recipient to receive a payment equal to the
excess of the Fair Market Value of the shares of Common Stock covered by the SAR
on the date of exercise over the base price of the SAR. Such payment may be in
cash, shares of Common Stock, Deferred Stock, Restricted Stock or any
combination, as the Committee shall determine. Upon exercise of a Tandem SAR as
to some or all of the shares of Common Stock covered by the grant, the related
Option shall be cancelled automatically to the extent of the number of shares of
Common Stock covered by such exercise, and such shares shall no longer be
available for purchase under the Option pursuant to Section 8. Conversely, if
the related Option is exercised as to some or all of the shares of Common Stock
covered by the grant, the related Tandem SAR, if any, shall be cancelled
automatically to the extent of the number of shares of Common Stock covered by
the Option exercised.
9.4 SARs shall be subject to the same terms and conditions applicable to
Options as stated in sections 8.3, 8.5, 8.7, 8.8, 8.9. SARs shall also be
subject to such other terms and conditions not inconsistent with the Plan as
shall be determined by the Committee.
10. Adjustments upon Changes in Capitalization
In the event of a reorganization, recapitalization, stock split,
spin-off, split-off, split-up, stock dividend, issuance of stock rights,
combination of shares, merger, consolidation or any other change in the
corporate structure of the Company affecting Common Stock, or any distribution
to stockholders other than a cash dividend, the Board shall make appropriate
adjustment in the number and kind of shares authorized by the Plan and any
adjustments to outstanding Awards as it determines
12
<PAGE>
appropriate. No fractional shares of Common Stock shall be issued in connection
with an Award hereunder pursuant to such an adjustment. The Fair Market Value of
any fractional shares resulting from adjustments pursuant to this Section shall
be paid in cash to the Holder.
11. Effective Date, Termination and Amendment
The Plan, as amended, shall become effective on May 14, 1997 (the
"Effective Date"), subject to stockholder approval. The Plan shall remain in
full force and effect until the earlier of ten (10) years from the Effective
Date, or the date it is terminated by the Board. The Board shall have the power
to amend, suspend or terminate the Plan at any time.
Termination of the Plan pursuant to this Section 11 shall not affect
Awards outstanding under the Plan at the time of termination.
12. Transferability
Except as provided below, Awards may not be pledged, assigned or
transferred for any reason during the Holder's lifetime, and any attempt to do
so shall be void and the relevant Award shall be forfeited; provided, however
that each Non-Incentive Stock Option may be pledged, assigned or transferred (i)
during the Grantee's lifetime by the Grantee to a Permitted Transferee, (ii) by
a Permitted Transferee to another Permitted Transferee or (iii) as otherwise
permitted by the Committee; provided, further, that any such transfer shall
comply with all terms and conditions established by the Committee and any term,
condition or restriction contained in the agreement entered into with the
Holder. Any transferee of the Holder, including, but not limited to any
Permitted Transferee, shall, in all cases, be subject to the provisions of the
agreement between the Company and the Holder.
13. General Provisions
13.1 Nothing contained in the Plan, or any Award granted pursuant to the
Plan, shall confer upon any Employee any right with respect to continuance of
employment by the Company, a Subsidiary or Affiliate, nor interfere in any way
with the right of the Company, a Subsidiary or Affiliate to terminate the
employment of any Employee at any time.
13
<PAGE>
13.2 For purposes of this Plan, transfer of employment between the Company
and its Subsidiaries and Affiliates shall not be deemed termination of
employment.
13.3 Holders shall be responsible to make appropriate provision for all
taxes required to be withheld in connection with any Award, the exercise thereof
and the transfer of shares of Common Stock pursuant to this Plan. Such
responsibility shall extend to all applicable Federal, state, local or foreign
withholding taxes. In the case of the payment of Awards in the form of Common
Stock, or the exercise of Options or SARs, the Company shall, at the election of
the Holder, have the right to retain the number of shares of Common Stock whose
Fair Market Value equals the amount to be withheld in satisfaction of the
applicable withholding taxes. Agreements evidencing such Awards shall contain
appropriate provisions to effect withholding in this manner.
13.4 Without amending the Plan, Awards may be granted to Employees who are
foreign nationals or employed outside the United States or both, on such terms
and conditions different from those specified in the Plan as may, in the
judgment of the Committee, be necessary or desirable to further the purpose of
the Plan.
13.5 To the extent that Federal laws (such as the 1934 Act, the Code or the
Employee Retirement Income Security Act of 1974) do not otherwise control, the
Plan and all determinations made and actions taken pursuant hereto shall be
governed by the law of Delaware and construed accordingly.
13.6 The Committee may amend any outstanding Awards to the extent it deems
appropriate. Such amendment may be made by the Committee without the consent of
the Holder, except in the case of amendments adverse to the Holder, in which
case the Holder's consent is required to any such amendment.
13.7 The Plan, as amended and restated in its entirety herein, replaces and
supersedes all prior versions of the Plan.
14
Exhibit 11.1
CORT BUSINESS SERVICES CORPORATION AND SUBSIDIARIES
COMPUTATIONS OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income applicable to common shares:
Net income applicable to common shares $3,483,000 $5,607,000 $6,643,000 $10,537,000
========== ========== ========== ===========
Weighted average common shares outstanding for
primary earnings per share:
Average shares outstanding during the period 10,531,781 12,796,180 10,478,184 12,760,082
Unexercised stock options and warrants using
the treasury stock method 1,091,509 847,912 1,140,522 864,837
---------- ---------- ---------- -----------
Total weighted average common shares for
primary earnings per share 11,623,290 13,644,092 11,618,706 13,624,919
========== ========== ========== ===========
Weighted average common shares outstanding for
fully diluted earnings per common share:
Average shares outstanding during the period 10,531,781 12,796,180 10,478,184 12,760,082
Unexercised stock options and warrants using
the treasury stock method 1,118,273 890,049 1,170,284 923,589
---------- ---------- ---------- -----------
Total weighted average common shares for
fully diluted earnings per share 11,650,054 13,686,229 11,648,468 13,683,671
========== ========== ========== ===========
Earnings per common share:
Primary $ 0.30 $ 0.41 $ 0.57 $ 0.77
========== ========== ========== ===========
Fully diluted $ 0.30 $ 0.41 $ 0.57 $ 0.77
========== ========== ========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 217
<SECURITIES> 0
<RECEIVABLES> 17,778
<ALLOWANCES> 2,228
<INVENTORY> 164,395
<CURRENT-ASSETS> 0
<PP&E> 61,253
<DEPRECIATION> 23,290
<TOTAL-ASSETS> 278,141
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 128
<OTHER-SE> 136,406
<TOTAL-LIABILITY-AND-EQUITY> 278,141
<SALES> 26,550
<TOTAL-REVENUES> 141,782
<CGS> 16,097
<TOTAL-COSTS> 38,112
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 738
<INTEREST-EXPENSE> 4,238
<INCOME-PRETAX> 17,916
<INCOME-TAX> 7,379
<INCOME-CONTINUING> 10,537
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,537
<EPS-PRIMARY> 0.77
<EPS-DILUTED> 0.77
</TABLE>
