SEC Info - Cort Business Services Corp - ‘DEF 14A’ for 5/12/98

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Cort Business Services Corp – ‘DEF 14A’ for 5/12/98

As of: Tuesday, 3/31/98 · For: 5/12/98 · Accession #: 950164-98-54 · File #: 1-14146

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/31/98  Cort Business Services Corp       DEF 14A     5/12/98    1:40K                                    Adc Holdings Inc/FA

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit Description Pages Size

1: DEF 14A Definitive Proxy Statement 13 66K

DEF 14A 1st Page of 13 TOC ↑Top Previous Next ↓Bottom Just 1st
[CORT BUSINESS SERVICES LOGO]

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 12, 1998

To the Stockholders of CORT BUSINESS SERVICES CORPORATION:

NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of the Stockholders
of CORT BUSINESS SERVICES CORPORATION will be held at the Holiday Inn Fair Oaks,
Fairfax, Virginia, on Tuesday, May 12, 1998, at 2:00 p.m., local time, for the
purpose of:

(1) Electing seven directors (Proposal No. 1);

(2) Approving the appointment of independent accountants of the
Corporation for the fiscal year ending December 31, 1998 (Proposal No.
2); and

(3) Transacting such other business as may properly come before the
meeting.

The Board of Directors has fixed the close of business on March 30,
1998 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting and any adjournments thereof; only holders of
record of stock of the Corporation on that date are entitled to notice of and to
vote at the meeting and any adjournments. A list of stockholders will be
available at the time and place of the meeting and, during the 10 days prior to
the meeting, at the office of the Corporate Secretary, 4401 Fair Lakes Court,
Suite 300, Fairfax, Virginia 22033.

It is important that your shares be represented at the meeting
regardless of the number of shares that you own. Please complete and sign the
enclosed proxy card, which is being solicited by the Board of Directors of the
Corporation, and return it in the enclosed postage pre-paid envelope as soon as
you can, whether or not you plan to attend the meeting in person.

Respectfully,

FRANCES ANN ZIEMNIAK
Vice President of Finance, CFO
& Secretary
Dated: March 31, 1998

4401 FAIR LAKES COURT, SUITE 300, FAIRFAX, VIRGINIA 22033

DEF 14A 2nd Page of 13 TOC 1st Previous Next ↓Bottom Just 2nd
[CORT BUSINESS SERVICES LOGO]

4401 FAIR LAKES COURT, SUITE 300
FAIRFAX, VIRGINIA 22033

PROXY STATEMENT

General Information

This proxy statement is furnished in connection with the solicitation
of proxies to be used at the annual meeting of stockholders of CORT Business
Services Corporation (the "Corporation" or the "Company") to be held on May 12,
1998 at 2:00 p.m., local time, and at any adjournment thereof. The form of proxy
and this proxy statement are being mailed to stockholders on or about March 31,
1998. The Corporation's annual report to stockholders, including financial
statements, accompanies this notice and proxy statement, but is not incorporated
as part of the proxy statement and is not to be regarded as part of the proxy
solicitation material.

Proxies are solicited by the Board of Directors of the Corporation in
order to provide every stockholder an opportunity to vote on all matters
scheduled to come before the meeting, whether or not he or she attends the
meeting in person. When the enclosed proxy card is returned properly signed, the
shares represented thereby will be voted by the proxy holders named on the card
in accordance with the stockholder's directions. You are urged to specify your
choices by marking the appropriate boxes on the enclosed proxy card. If the
proxy is signed and returned without specifying choices, the shares will be
voted as recommended by the Board of Directors. A stockholder giving a proxy may
revoke it at any time before it is voted at the meeting by notifying the
Corporate Secretary in writing of such revocation, or by submitting another
proxy bearing a later date. If you do attend, you may, if you wish, vote by
ballot at the meeting, thereby canceling any proxy vote previously given.

If a stockholder wishes to give a proxy to someone other than those
designated on the proxy card, he or she may do so by crossing out the names of
the designated proxies and by then inserting the name of another person(s). The
signed proxy card should be presented at the meeting by the person(s)
representing the stockholder.

On March 17, 1998, there were 12,998,546 shares of Common Stock issued
and outstanding, each of which is entitled to one vote.

The holders of a majority of the outstanding shares must be present in
person or by phone at the annual meeting in order to constitute a quorum for the
purpose of transacting business at the meeting. Except for the election of
directors, the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present in person or by proxy at the meeting and entitled
to vote on the proposals is required to ratify and approve the proposals.
Directors are elected by a plurality of the votes cast by written ballot.
Abstentions are counted in tabulations of the votes cast by stockholders on the
proposals and will have the effect of a negative vote. Brokers who hold shares
in street name for customers have the authority to vote only on certain routine
matters in the absence of instruction from the beneficial owners. A broker
non-vote occurs when the broker does not have the authority to vote on a
particular proposal. Under applicable Delaware law, broker non-votes will not be
counted for purposes of determining whether any proposal has been approved.

This solicitation of proxies is made on behalf of the Board of
Directors of the Corporation, and the cost of preparing, assembling, and mailing
the notice of annual meeting, proxy statement, and form of proxy will be borne
by the Corporation. In addition to the use of the mail, proxies may be solicited
by directors, officers and regular employees of the Corporation, without
additional compensation, in person or by telephone or facsimile.

DEF 14A 3rd Page of 13 TOC 1st Previous Next ↓Bottom Just 3rd
PROPOSAL NO. 1
ELECTION OF DIRECTORS

The Corporation's Board of Directors consists of seven directors, whose
terms expire annually.

Unless otherwise specified by the stockholders, the shares represented
by the proxies will be voted for the seven nominees for directors listed below.
Keith E. Alessi, Paul N. Arnold, Bruce C. Bruckmann, Michael A. Delaney, Charles
M. Egan, Gregory B. Maffei, and James A. Urry are nominated for terms which will
expire at the 1999 Annual Meeting of Stockholders. Each nominee for director has
consented to his nomination as a director and, so far as the Board and
Management are aware, will serve as a director if elected. The names and
biographical summaries of the seven persons who have been nominated to stand for
election at the 1998 Annual Meeting of Stockholders appear below.

MR. KEITH E. ALESSI Director Since October 1993

Mr. Alessi, age 43, is currently President, Chief Executive Officer and
Chairman of the Board of Directors of Telespectrum Worldwide, Inc. Mr.
Alessi was President and Chief Executive Officer of Jackson Hewitt Inc.
from June 1996 through March 1998. He was Vice Chairman and Chief Financial
Officer of Farm Fresh, Inc. (which filed voluntary bankruptcy as part of a
sale of the company in January 1998 and emerged from bankruptcy in February
1998) from June 1994 through June 1996. He had previously served in various
executive capacities, including President, with Farm Fresh from 1988 to
1992. Mr. Alessi was Chairman and Chief Executive Officer of Virginia
Supermarkets, Inc., from 1992 to 1994. He is also a Director of Town Sports
International, Inc.

MR. PAUL N. ARNOLD Director Since March 1993

Mr. Arnold, age 51, has been the Chief Executive Officer and a Director of
the Company since July 1992. Mr. Arnold has been with the Company and
Mohasco Corporation, the Company's former parent, for 29 years and has held
group management positions within the Company since 1976. He is also a
Director of Town Sports International, Inc.

MR. BRUCE C. BRUCKMANN Director Since March 1993

Mr. Bruckmann, age 44, is currently Managing Director of Bruckmann, Rosser,
Sherrill & Co., Inc. Mr. Bruckmann was a Vice President of Citicorp Venture
Capital Ltd., which is an affiliate of the Company, through 1993 and a
Managing Director from 1993 through 1994. He is also a Director of Mohawk
Industries, Inc., AmeriSource Health Corporation, Chromcraft-Revington,
Inc., Jitney-Jungle Stores of America, Inc., Anvil Knitwear, Inc. and Town
Sports International, Inc.

MR. MICHAEL A. DELANEY Director Since May 1995

Mr. Delaney, age 43, is currently a Managing Director of Citicorp Venture
Capital Ltd., which is an affiliate of the Company. From 1989 through 1997,
he was a Vice President of Citicorp Venture Capital Ltd. and from 1986
through 1989 he was Vice President of Citicorp Mergers and Acquisitions.
Mr. Delaney is also a Director of Aetna Industries, Inc., AmeriSource
Health Corporation, CLARK Material Handling Corporation, Delco Remy
International, Inc., Enterprise Media Inc., GVC Holdings, JAC Holdings, IKS
Corporation, Palomar Technologies, Inc., SC Processing, Inc., MSX
International and Triumph Group, Inc.

MR. CHARLES M. EGAN Director Since September 1993

Mr. Egan, age 61, has been the Chairman of the Company since 1994. Mr. Egan
has been with the Company since the acquisition of General Furniture
Leasing Company in September 1993. Mr. Egan joined General Furniture
Leasing Company in 1989 and became its President and Chief Executive
Officer in 1992. From 1985 to 1989, Mr. Egan was Executive Vice President
of Mohasco Corporation. Mr. Egan was President of CORT Furniture Rental
Corporation from 1980-1985.

DEF 14A 4th Page of 13 TOC 1st Previous Next ↓Bottom Just 4th
MR. GREGORY B. MAFFEI Director Since November 1995

Mr. Maffei, age 37, is the Chief Financial Officer of Microsoft
Corporation. He joined Microsoft in April 1993, served as Treasurer from
1994 to 1996 and Vice President, Corporate Development from 1996 to 1997,
and was promoted to Chief Financial Officer in July 1997. Prior thereto,
Mr. Maffei was a Vice President of Citicorp Venture Capital Ltd., which is
an affiliate of the Company. Mr. Maffei is also a Director of Mobile
Telecommunications Technologies Corporation (Mtel).

MR. JAMES A. URRY Director Since March 1993

Mr. Urry, age 44, has been with Citibank, N.A. since 1981 serving as a Vice
President since 1986. He has been a Vice President of Citicorp Venture
Capital Ltd., which is an affiliate of the Company, since 1989. He is also
a Director of Airxcel, Inc., AmeriSource Health Corporation, CLARK Material
Handling Corporation, Hancor Holding Corporation, IKS Corporation, Palomar
Products Inc., and York International Corporation.

Although the Board of Directors and Management do not contemplate that
any of the nominees will be unable to serve, in the event that prior to the
meeting any of the nominees become unable to serve because of special
circumstances, the shares of stock represented by the proxies will be voted for
the election of a nominee who shall be designated by the Board.

The Board of Directors recommends that stockholders vote FOR the
election of Messrs. Alessi, Arnold, Bruckmann, Delaney, Egan, Maffei and Urry.

PROPOSAL NO. 2
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

Unless otherwise specified by the stockholders, the shares of stock
represented by the proxies will be voted for the approval of the appointment of
KPMG Peat Marwick LLP, a firm of independent accountants, to audit and report
upon the financial statements of the Corporation for the fiscal year 1998. KPMG
Peat Marwick LLP has been the independent accountants of CORT Furniture Rental
Corporation since 1972 and the Company since its formation in March 1993. In the
opinion of the Board of Directors and Management, KPMG Peat Marwick LLP is well
qualified to act in this capacity.

A representative of KPMG Peat Marwick LLP is expected to be present at
the annual meeting. The representative will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions. The Corporation has been advised by KPMG Peat Marwick LLP
that the firm has no financial interest, direct or indirect, in the Corporation,
other than serving as independent accountants during the period stated.

The Board of Directors recommends that stockholders vote FOR the
approval of the appointment of KPMG Peat Marwick LLP as independent accountants.

DEF 14A 5th Page of 13 TOC 1st Previous Next ↓Bottom Just 5th
Security Ownership of Certain Beneficial Owners and Directors and Officers

The following table sets forth certain information with respect to
beneficial ownership of Common Stock as of March 17, 1998 by (i) each of the
Company's directors and certain of its executive officers, (ii) each person who
is known by the Company to own beneficially more than 5% of the Company's common
stock and (iii) by all of the Company's directors and executive officers as a
group. The Company owns all of the issued and outstanding capital stock of CORT
Furniture Rental Corporation (CFR).

Common Stock
-------------------------------------
Number of Shares Percentage of Class
Directors:
Paul N. Arnold..........................181,662(2) 1.4%
Bruce C. Bruckmann......................161,239(2) 1.2%
Keith E. Alessi......................... 47,993(2) *
Gregory B. Maffei....................... 38,526(2) *
Charles M. Egan......................... 24,265(2) *
James A. Urry........................... 10,267(2) *
Michael A. Delaney...................... 4,334(2) *
Certain Executive Officers:
Lloyd Lenson............................108,954(2) *
Kenneth W. Hemm......................... 81,716(2) *
Steven D. Jobes......................... 64,763(2) *
Frances Ann Ziemniak.................... 57,608(2) *
Five Percent Stockholders:(3)
Citicorp Venture Capital, Ltd.(4)....... 5,778,518 44.5%
399 Park Avenue, 14th Floor
New York, New York 10043
The Kaufmann Fund, Inc. ................ 800,000 6.2%
140 East 45th Street, 43rd Floor
New York, New York 10017
T. Rowe Price Associates, Inc.(5).......
100 E. Pratt Street 745,400 5.7%
Baltimore, MD 21202
All Directors and Executive Officers as a group
(16 persons)...................... 887,995 6.6%

* Less than 1%.

(1) The Company has two authorized classes of common stock: Common Stock
(voting) and Class B Common Stock (nonvoting); however, there are no shares
of the Company's Class B Common Stock issued or outstanding.

(2) Includes shares under option which are exercisable or will become
exercisable within 60 days of March 17, 1998 of 138,556; 4,334; 667; 5,001;
8,951; 4,334; 4,334; 60,708; 42,817; 61,413; 35,631 for Messrs. Arnold,
Bruckman, Alessi, Maffei, Egan, Urry, Delaney, Lenson, Hemm, Jobes and Ms.
Ziemniak, respectively, and 448,727 in total for all Directors and
Executive Officers as a group.

(3) The Board of Directors and Management are not aware of any other person or
entity who holds beneficially more than 5% of the outstanding Common Stock
of the Corporation.

(4) Citicorp Venture Capital, Ltd. ("CVC") is a party to an agreement with the
Company, dated March 30, 1993, pursuant to which CVC is required by April
1, 1999 (or such later date as the Small Business Administration may
approve) to reduce (by conversion to non-voting stock or other disposition)
its ownership of the Company's Common Stock (voting) to a percentage at
which CVC will no longer be presumed to have control of the Company under
regulations of the Small Business Administration. In general, the
presumption of control exists so long as a person holds 20% or more of the
issuer's outstanding voting common stock.

(5) These securities are owned by various individual and institutional
investors including T. Rowe Price Small Cap Value Fund, Inc. (which owns
644,700 shares, representing 5.0% of the shares outstanding), which T. Rowe
Price Associates, Inc. ("Price Associates") serves as an investment adviser
with power to directinvestments and/or sole power to vote the securities.
For the purposes of the reporting requirements of the Securities Exchange
Act of 1934, Price Associates is deemed to be a beneficial owner of such
securities; however, Price Associates expressly disclaims that it is, in
fact, the beneficial owner of such securities.

DEF 14A 6th Page of 13 TOC 1st Previous Next ↓Bottom Just 6th
Board of Directors

The Corporation's Board of Directors held four meetings during fiscal
year 1997. All of the directors attended more than 75% of the meetings of the
Board of Directors and the Committees of the Board of Directors on which they
served, except Gregory B. Maffei and Michael A. Delaney.

Directors who are not employees of the Company or CVC receive a monthly
payment of $1,000, $500 for attendance at each meeting of the Board of Directors
and $500 for attendance at each meeting of a committee of the Board of Directors
and are reimbursed for expenses incurred in connection with attendance at
meetings of the Board of Directors or committees thereof. In addition, directors
not employed by the Company are entitled to receive options for Common Stock
pursuant to the 1997 Directors Stock Option Plan (the "Directors Plan").

The Company adopted the Directors Plan, which provides for the granting
of stock options on a non-discretionary basis to non-employee directors of the
Company. An aggregate of 50,000 shares of Common Stock have been reserved for
issuance under the Directors Plan. The Directors Plan provides for automatic
grants of options to purchase 2,000 shares of Common Stock to each of the
Company's non-employee directors on the business day immediately following the
Company's annual meeting of stockholders in calendar years 1997, 1998, 1999,
2000 and 2001, which options will become exercisable over a three-year period.
The option exercise price is equal to 100% of the fair market value of the
Common Stock on the date of grant of the option. Options granted to directors
under the Directors Plan will be treated as nonstatutory stock options under the
Internal Revenue Code, as amended. The Company granted 10,000 options in 1997
pursuant to the terms of the Directors Plan.

Committees of the Board

The standing Committees of the Board of Directors are the Audit,
Compensation and Directors Stock Option Committees.

The Audit Committee recommends the independent accountants to conduct
the annual audit of the books and accounts of the Corporation, and reviews the
adequacy of the Corporation's financial reporting, accounting systems and
controls. The Audit Committee also evaluates the Corporation's internal and
external auditing procedures. During fiscal year 1997, the Audit Committee,
which currently consists of Messrs. Alessi, Chairman; Bruckmann, and Maffei,
held two meetings.

The Compensation Committee reviews and approves salary and other
compensation of officers and administers certain benefit plans. The Compensation
Committee also has the authority to administer, grant and award stock options
under the Corporation's stock option plans. The Committee held three meetings
during fiscal year 1997. Current members of the Committee are Messrs. Urry,
Chairman; Bruckmann, and Delaney.

The Directors Stock Option Committee administers the Directors Plan.
The Committee held no meetings during fiscal year 1997. Current members of the
committee are Messrs. Arnold and Egan.

Report of the Compensation Committee of the Board of Directors on Executive
Compensation

Role of Committee. The Compensation Committee of the Board of Directors
(the "Committee") establishes, oversees and directs the Company's executive
compensation programs and policies and administers the Company's stock option
plans. The Committee seeks to align executive compensation with Company
objectives and strategies, management programs, business financial performance
and enhanced stockholder value. The Committee consists of independent outside
directors, none of whom is or was an officer or employee of the Company or CFR.

The Committee's objectives include (i) attracting and retaining
exceptional individuals as executive officers and (ii) providing key executives
with motivation to perform to the full extent of their abilities in an effort to
maximize Company performance to deliver enhanced value to the Company's
stockholders. The Committee believes it is important to place a greater
percentage of executive officers' compensation at risk, as compared to
non-executives, by tying compensation directly to the performance of the
business and value of the Common Stock. Executive compensation consists
primarily of an annual salary, bonuses linked to the performance of the Company
and long-term equity-based compensation.

Compensation. The annual salaries of the Company's executive officers
are set at levels designed to attract and retain exceptional individuals by
rewarding them for individual and Company achievements. The Committee reviews
the annual salary of each executive officer in relation to such officer's
performance and previous salaries and general market and industry conditions or
trends and makes appropriate adjustments. The Committee reviews executive
officers' salaries annually and to adjust such salaries based on each executive
officer's past performance, expected future contributions, the scope and nature
of responsibilities of, including changes in such responsibilities, and
competitive compensation data relating to such executive officer.

DEF 14A 7th Page of 13 TOC 1st Previous Next ↓Bottom Just 7th
The Committee believes that a portion of the executives' compensation
should be tied to the financial results of the Company in order to reward
individual performance and overall Company success. Each year, objective targets
are established for each offficer. Such targets include the Company's financial
targets, such as revenue, earnings and return on assets, as well as individual
strategic and operating targets. Additionally, a portion of each officer's bonus
is based on subjective criteria particular to each officer's individual
operating responsibilities. In 1997, the Company and the executive officers
exceeded these goals. Accordingly, Messrs. Arnold, Hemm, Jobes and Lenson and
Ms. Ziemniak earned bonuses attributable to the aforementioned targets and
objectives.

The Company has employee stock option plans in order to offer key
employees the opportunity to acquire an equity interest in the Company, thereby
aligning the interests of these employees more closely with the long term
interests of stockholders. Awards under these employee stock option plans may be
in the form of options, deferred stock, restricted stock or stock appreciation
rights. Options, which have a fixed exercise price and vest over a five-year
period, were granted to executive officers and other key employees in 1994 and
1995. In 1995, 1996 and 1997, the Company granted options to executive officers
which vest over a three-year period and have an exercise price equal to the
market value of the Common Stock on the date of grant.

1997 Chief Executive Officer Compensation. The Committee determined the
1997 compensation of Mr. Arnold, President and Chief Executive Officer, in
accordance with the above discussion. In addition, the Committee based Mr.
Arnold's bonus on his overall leadership and management of the Company.

Deductibility of Compensation. Section 162(m) of the Internal Revenue
Code imposes a $1 million limit on the deductibility of compensation paid to
executive officers of public companies. The Committee believes that all of the
compensation awarded to the Company's executive officers will be fully
deductible in accordance with this limit.

COMPENSATION COMMITTEE
James A. Urry, Chairman
Bruce C. Bruckmann
Michael A. Delaney

DEF 14A 8th Page of 13 TOC 1st Previous Next ↓Bottom Just 8th
Stockholder Return Performance Graph

The following graph compares the percentage change in cumulative total
stockholder return on the Company's Common Stock against the cumulative total
return of the Standard & Poor's 500 Index and the Dow Jones Other Industrial and
Commercial Services Index from the initial public offering price on November 17,
1995 to December 31, 1997. Cumulative total return to stockholders is measured
by dividing (x) the sum of (i) total dividends for the period (assuming dividend
reinvestment) plus (ii) per-share price change for the period by (y) the share
price at the beginning of the period. The graph is based on an investment of
$100 at the initial public offering price on November 17, 1995 in the Common
Stock and in each index.

[OBJECT OMITTED]

DEF 14A 9th Page of 13 TOC 1st Previous Next ↓Bottom Just 9th
Executive Compensation

The following table sets forth, for the fiscal years ended December 31,
1995, 1996, and 1997, certain information regarding the cash compensation paid
by the Company, as well as certain other compensation paid or accrued for those
years, to each of the five most highly compensated executive officers of the
Company, in all capacities in which they served:

[Enlarge/Download Table]

Summary Compensation Table
Long-Term
Compensation
------------
Annual Compensation Securities All
Name and -------------------------------- Other Annual Underlying Other
Principal Position Year Salary Bonus(1) Compensation(2) Options Compensation(3)
------------------ ---- ------ -------- --------------- ------- ---------------

Paul N. Arnold 1997 $233,750 $233,750 -- 4,500 $11,754
President & Chief 1996 223,750 190,188 -- 2,850 11,781
Executive Officer 1995 210,000 145,593 -- 128,467 8,983
Kenneth W. Hemm 1997 142,625 100,716 -- 3,500 23,939
Group Vice President 1996 132,764 91,363 -- 2,850 24,161
1995 125,591 74,639 -- 67,667 20,836
Steven D. Jobes 1997 125,140 87,723 -- 3,500 --
Vice President, Marketing, 1996 119,287 82,427 -- 2,850 --
Merchandising, Sales and 1995 116,707 68,306 -- 35,117 --
National Accounts
Lloyd Lenson 1997 136,125 69,301 -- 3,500 5,504
Group Vice President 1996 129,988 74,964 -- 2,850 5,193
1995 125,678 61,852 -- 43,167 5,323
Frances Ann Ziemniak(4) 1997 125,268 87,813
Vice President of Finance, 1996 120,400 83,196 $132,153 3,500 18,216
Chief Financial Officer 1995 88,593 51,676 -- 2,850 15,916
and Secretary -- 43,430 --

(1) The amounts shown consist of cash bonuses earned in the fiscal year
identified but paid in subsequent fiscal years.

(2) In 1996, the Company made payments to reimburse moving expenses ($74,820)
and to cover applicable taxes on reimbursed moving expenses ($57,333).

(3) The Company maintains an investment and profit-sharing defined contribution
retirement plan. All of the Company's employees are eligible to participate
after one year of service. The Company makes a matching contribution as a
percentage of the employee contributions. The Company may, at its
discretion, make additional contributions based on the Company's
performance. The amounts shown include both the matching contribution and
the Company's discretionary payment on behalf of the named executives in
which all of the above, except Ms. Ziemniak, are fully vested. In addition,
the amounts shown include the amounts allocated to certain management
employees in the defined contribution portion of the CORT Furniture Rental
Supplemental Executive Retirement Plan. The Company contributes a fixed
dollar amount per plan member with the total contribution allocated among
all plan members on the basis of their age and years of service.

(4) Ms. Ziemniak was hired in March 1995.

DEF 14A 10th Page of 13 TOC 1st Previous Next ↓Bottom Just 10th
Stock Options

Options Granted

The following table sets forth information regarding stock options
granted under the 1995 Stock-Based Incentive Compensation Plan (the "1995 Plan")
during the fiscal year 1997 to the named executive officers of the Company:

Option Grants in 1997

[Enlarge/Download Table]

Individual Grants
----------------------------------------------- Potential Realizable
Value at Assumed
Number of Annual Rates of Stock
Securities Percent of Total Price Appreciation
Underlying Options Granted for Option Term(2)
Options to Employees in Exercise Price Expiration ------------------
Name Granted(1) Fiscal Year (per share) Date 5% 10%
---- ---------- ----------- ----------- ---- --- ---

Paul N. Arnold 4,500 4.23% $25.50 05/14/07 $72,166 $182,882
Kenneth W. Hemm 3,500 3.3% $25.50 05/14/07 56,129 142,242
Steven D. Jobes 3,500 3.3% $25.50 05/14/07 56,129 142,242
Lloyd Lenson 3,500 3.3% $25.50 05/14/07 56,129 142,242
Frances Ann Ziemniak 3,500 3.3% $25.50 05/14/07 56,129 142,242

(1) Options under the 1995 Plan are exercisable when vested.

(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% and 10%, compounded
annually from the date the respective options were granted to their
expiration date and are not presented to forecast possible future
appreciation, if any, in the Common Stock. The potential realizable values
shown are net of the option exercise price, but do not include deductions
for taxes or other expenses associated with the exercise of the options or
the sale of the underlying shares. The actual realizable values, if any, on
the stock option exercises will depend on the future performance of the
Common Stock, the optionee's continued employment through applicable
vesting periods and the date on which the options are exercised.

The following table sets forth information regarding 1997 year-end
option values for the named executive officers of the Company:

[Enlarge/Download Table]

Aggregated Options Exercised in 1997 and 1997 Year-End Option Values

Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Options at Fiscal Year End at Fiscal Year End
on Value -------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------

Paul N. Arnold 3,000 $68,063 137,056 44,750 $4,525,022 $1,167,234
Kenneth W. Hemm -- -- 41,650 23,483 1,404,369 589,246
Steven D. Jobes 3,000 111,693 60,246 15,316 2,126,108 362,101
Lloyd Lenson -- -- 59,541 15,316 2,091,467 362,101
Frances Ann Ziemniak -- -- 34,464 15,316 1,099,357 362,101

Supplemental Executive Retirement Plan

The CORT Furniture Rental Supplemental Executive Retirement Plan (the
"SERP Plan") provides a supplement to the retirement benefits that certain key
management employees will receive from the Retirement Plan for Salaried and
Sales Employees of Mohasco Corporation (the "Mohasco Plan") and the CORT
Furniture Rental Investment Savings and Profit Sharing Retirement Plan (the
"401(k) Plan"). The SERP Plan consists of a defined benefit plan and a defined
contribution plan.

DEF 14A 11th Page of 13 TOC 1st Previous Next ↓Bottom Just 11th
Certain key management employees of the Company with at least five
years of service (employment) had been selected by the Board of Directors as
participants in the defined benefit portion of the SERP Plan. Such officers
include Messrs. Arnold, Lenson and Jobes. The defined SERP Plan benefits are a
function of service with the Company and Final Average Compensation (average
monthly compensation during the 36 consecutive months out of the last 60 months
of the participant's employment that produce the highest average). Compensation
includes salary, bonuses and 401(k) Plan salary deferrals. Benefits are equal to
a targeted percentage as determined by the Board of Directors upon selection of
the employee to participate in the SERP Plan--(55% in the case of Mr. Arnold and
50% in the case of Mr. Jobes and Mr. Lenson) of the Final Average Compensation
as of the date of the participant's retirement or termination of employment
multiplied by the ratio of the participant's actual years of service as of the
applicable event to the participant's years of service projected to the
participant's Normal Retirement Date (first day of the month after the date the
participant attains age 65). The benefits are reduced by (i) the annuity value
of Company contributions made on behalf of the participant to the 401(k) Plan
and (ii) the annuity benefit, on a single life basis only, payable to the
participant under the Mohasco Plan.

The estimated annual benefits payable upon retirement, expressed as a
straight life annuity, before reduction for the 401(k) Plan or the Mohasco Plan,
are as follows:

[Enlarge/Download Table]

TARGETED PERCENTAGE: 55%
Years of Service
------------------------------------------------------------------
Remuneration 15 20 25 30 35

$125,000 $ 65,528 $ 65,528 $ 65,528 $ 65,528 $ 65,528
150,000 78,634 78,634 78,634 78,634 78,634
175,000 91,739 91,739 91,739 91,739 91,739
200,000 104,845 104,845 104,845 104,845 104,845
225,000 117,951 117,951 117,951 117,951 117,951
250,000 131,056 131,056 131,056 131,056 131,056
300,000 157,268 157,268 157,268 157,268 157,268
400,000 209,690 209,690 209,690 209,690 209,690
450,000 235,901 235,901 235,901 235,901 235,901
500,000 262,113 262,113 262,113 262,113 262,113

TARGETED PERCENTAGE: 50%
Years of Service
------------------------------------------------------------------
Remuneration 15 20 25 30 35
$125,000 $ 59,571 $ 59,571 $ 59,571 $ 59,571 $ 59,571
150,000 71,485 71,485 71,485 71,485 71,485
175,000 83,399 83,399 83,399 83,399 83,399
200,000 95,314 95,314 95,314 95,314 95,314
225,000 107,228 107,228 107,228 107,228 107,228
250,000 119,142 119,142 119,142 119,142 119,142
300,000 142,971 142,971 142,971 142,971 142,971
400,000 190,627 190,627 190,627 190,627 190,627
450,000 214,456 214,456 214,456 214,456 214,456
500,000 238,284 238,284 238,284 238,284 238,284

As of December 31, 1997, Mr. Arnold was credited with 29 years of
service, Mr. Jobes with 26 years of service and Mr. Lenson with 19 years of
service.

Other key management employees have been selected by the Board of
Directors as participants in the defined contribution portion of the SERP Plan.
Such officers include Mr. Hemm and Ms. Ziemniak. Defined contribution benefits
are equal to the balance in an executive's SERP Account (the annual contribution
credited to such executive's account, adjusted to reflect gains, losses or
forfeitures incurred), as of the last day of the month in which the executive is
employed.

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A participant in either the defined benefit or defined contribution
portion of the SERP Plan whose employment with the Company is terminated without
Cause (i.e., other than as a result of willful gross misconduct materially or
demonstrably injurious to the Company or willful refusal to perform
substantially the duties reasonably assigned to him/her) or who has a
substantial reduction in duties and responsibilities or in compensation will
vest immediately in his SERP Plan benefit. In addition, such a participant
(other than the Chief Executive Officer) will be entitled to receive a lump sum
payment equal to the amount of compensation he/she received during the final six
or 12 months based on length of service (12 months in the case of Messrs.
Arnold, Hemm, Jobes and Lenson and six months in the case of Ms. Ziemniak) prior
to such event. The Chief Executive Officer is entitled to a severance payment of
twice this amount. Amounts paid by the Company under any employment agreement or
other severance arrangement will reduce the severance payment under the SERP
Plan. In addition, the Company and Mr. Arnold have agreed that one-half of such
severance payment will be paid in a lump sum and the remaining half will be paid
in eighteen equal monthly installments commencing one month after the date of
his termination. Each participant in the SERP Plan has agreed not to compete
with the Company for a period of 18 months following the termination of his/her
employment with the Company unless such participant's employment was terminated
without Cause.

Compliance With Section 16(a) of the Securities Exchange Act of 1934

Based solely on review of the copies of the forms furnished to the
Company, or written representations that no form was required to be filed, the
Company believes that during the fiscal year ended December 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
beneficial owners of more than ten percent of the Company's Common Stock were
satisfied.

Employment Agreements

The Company has entered into employment agreements with Paul N. Arnold,
dated December 27, 1976, as amended on July 24, 1992 and August 18, 1993;
Kenneth W. Hemm, dated October 6, 1980; Steven D. Jobes dated August 1, 1984 and
Lloyd Lenson, dated April 27, 1987. Each of these agreements provides for a
minimum base salary and prohibits the Company from terminating the employee for
an initial period of time ranging from one to two years from the date of such
agreement. Thereafter, the Company may terminate any of these employees upon two
to six months' written notice or payment of two to six months' base salary.
However, the Company may terminate any of these employees without regard to the
minimum period of employment or the notice of severance payment requirements for
certain acts or omissions by such employee. Each of the employees has agreed not
to compete with the Company in a specified territory and not to disclose any
confidential information for periods ranging from one to two years following
termination of his employment with the Company.

Equity Share Agreement

Pursuant to an Equity Share Agreement dated April 20, 1994 (the
"Agreement") entered into in conjunction with the Company's relocation of one of
its Group Vice Presidents, the Company loaned such officer, Lloyd Lenson, and
his wife Eileen S. Lenson (collectively, "Lenson") the principal amount of
$225,000 (the "Loan Amount") to facilitate the purchase of a single family
dwelling in California. The Agreement provides that upon the occurrence of the
earliest of one of several specified events (a "Termination Event") Lenson will
repay the Loan Amount to the Company as adjusted pursuant to the Agreement.
Adjustment will be made to reflect the Agreement's grant to the Company of a
proportionate interest in any change of value between the total purchase price
of the house, as defined in the Agreement, and the fair market value of the
house on the date of the Termination Event. In December 1997, Lenson repaid the
Loan Amount pursuant to the terms of the Agreement.

1998 Stockholder Proposals

In the event that a stockholder desires to have a proposal included in
the proxy statement for the 1999 Annual Meeting of the Stockholders, the
proposal must be received by the Corporation in writing on or before December 1,
1998, by certified mail, return receipt requested, and must comply in all
respects with applicable rules and regulations of the Securities and Exchange
Commission, the laws of the state of Delaware and the Corporation's By-Laws
relating to such inclusion. Stockholder proposals may be mailed to the Corporate
Secretary, CORT Business Services Corporation, 4401 Fair Lakes Court, Suite 300,
Fairfax, Virginia 22033.

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OTHER BUSINESS

The Board of Directors and Management know of no matters to be
presented at the meeting other than those set forth in this proxy statement.
However, if any other business is properly brought before the meeting or any
adjournment thereof, the proxy holders will vote in regard thereto according to
their discretion insofar as such proxies are not limited to the contrary.

By order of the Board of Directors.

FRANCES ANN ZIEMNIAK
Secretary

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEF 14A’ Filing	Date	First	Last	Other Filings

	4/1/99	5		10-K, NT 10-K
	12/31/98	1		10-K, 10-K/A, NT 10-K
	12/1/98	12
For Period End:	5/12/98	1	2
Filed on:	3/31/98	1	2	10-K, 10-Q
	3/30/98	1
	3/17/98	2	5
	12/31/97	8	12	10-K
	12/31/96	9		10-K
	12/31/95	9
	11/17/95	8
	4/20/94	12
	8/18/93	12
	3/30/93	5
	7/24/92	12
				List all Filings

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Filing Submission 0000950164-98-000054 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Cort Business Services Corp – ‘DEF 14A’ for 5/12/98

As of: Tuesday, 3/31/98 · For: 5/12/98 · Accession #: 950164-98-54 · File #: 1-14146

Previous ‘DEF 14A’: ‘DEF 14A’ on 3/31/97 for 5/14/97 · Latest ‘DEF 14A’: This Filing

Definitive Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Definitive Proxy Solicitation Material — Schedule 14A
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