SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities and Exchange Act of 1934
(Amendment No. ___))
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-(e)14a-6(e)(2))
[x][X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Cintas Corporation
-------------------------------------------------------- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)(1) Title of each class of securities to which transaction applies:
2)(2) Aggregate number of securities to which transaction applies:
3)(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined)
4)(4) Proposed maximum aggregate value of transaction:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identityidentify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of itsthis filing.
1)(1) Amount Previously Paid:
2)(2) Form, Schedule or Registration Statement No.:
3)(3) Filing Party:
4)(4) Date Filed:
FRONT[CINTAS LOGO]
NOTICE OF CARD
CINTAS CORPORATION PROXY FOR ANNUAL MEETING 6800 CINTAS BLVD., P.O. BOX 625737, CINCINNATI, OHIO 45262-5737
The undersigned hereby appoints RICHARD T. FARMER, ROBERT J. KOHLHEPP,
and WILLIAM C. GALE, or any of them, proxies of the undersigned, each with the
power of substitution,AND PROXY STATEMENT
Dear Shareholder:
We invite you to vote all shares of Common Stock which the undersigned
would be entitled to vote at theattend our Annual Meeting of Shareholders of Cintas
Corporation to be heldon October 21, 1998,20, 1999,
at 9:10:00 a.m. (Eastern Time) at The
Fifth Third Bank, 38 Fountain Square, Fifth Floor,the Company's Headquarters, 6800 Cintas
Boulevard, Cincinnati, Ohio 4520245040. At the meeting, you will hear a report on our
operations and have a chance to meet your directors and executives.
This booklet includes formal notice of the meeting and the proxy statement. The
proxy statement tells you more about the agenda and procedures for the meeting.
It also describes how the Board operates and gives personal information about
our director candidates.
Even if you only own a few shares, we want your shares to be represented at any adjournmentthe
meeting. I urge you to complete, sign, date and return your proxy card promptly
in the enclosed envelope.
Sincerely,
Richard T. Farmer
Chairman of such Meeting as specified below.
THE BOARDthe Board
August 31, 1999
TABLE OF CONTENTS
Page
----
GENERAL INFORMATION 1
ELECTION OF DIRECTORS RECOMMENDS A VOTE2
PROPOSAL FOR THE FOLLOWING
PROPOSALS:
1. Authority to establish the number of Directors to be elected at the Meeting
at eight.
FOR AGAINST ABSTAIN
2. Authority to elect eight nominees listed below.
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees
below) listed below
Richard T. Farmer; Robert J. Kohlhepp; Gerald V. Dirvin; Scott D. Farmer; James
J. Gardner; Roger L. Howe; Donald P. Klekamp; John S. Lillard
WRITE THE NAME OF ANY NOMINEE(S) FOR ----------------------
WHOM AUTHORITY TO VOTE IS WITHHELD ----------------------
(Continued on other side)
BACK OF CARD
3. Amendment to Articles of Incorporation to increase authorized shares of
Common Stock to 300 million shares.
FOR AGAINST ABSTAIN
4. In their discretion the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED1999 STOCK OPTION PLAN 4
DIRECTOR COMPENSATION 4
BOARD COMMITTEES 4
COMPENSATION COMMITTEE REPORT 5
PRINCIPAL SHAREHOLDERS 7
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP 8
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 9
SUMMARY COMPENSATION TABLE 10
OPTION GRANTS IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3.
___________________________, 1998 ------------------------------
Important: Please sign exactly
as name appears hereon indicating,
where proper, official position or
representative capacity. In the
case of joint holders, all should
sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSLAST FISCAL YEAR 11
PERFORMANCE GRAPH 12
QUESTIONS 13
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS Dear Shareholder:
We are pleased to invite you to attend our 1998 Annual Shareholders'
Meeting. The meeting will be held at 9:OF CINTAS CORPORATION
Time: 10:00 a.m., Eastern Time
at The Fifth Third
Bank, 38 Fountain Square, Fifth Floor,Date: October 20, 1999
Place: Cintas Corporate Headquarters
6800 Cintas Boulevard
Cincinnati, Ohio on Wednesday, October
21, 1998.
The purposes of this Annual Meeting are:45040
Purpose:
1. To establish the number of Directors to be elected at eight;
2. To elect eight Directors;
3. To amendApproval of the Articles of Incorporation to increase authorized shares
of Common1999 Stock to 300 million shares;Option Plan;
4. To transact suchConduct other business asif properly raised.
Only shareholders of record on August 20, 1999 may properly come before the
meeting or any adjournment thereof.
Following the formal meeting, we will discuss the Company's operations
during the last year and our plans for the future and answer your questions
regarding the Company. Board members and other officers of the Company will also
be available to discuss the Company's business with you.
Yours truly,
David T. Jeanmougin
Secretary
Dated: August 31, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, SIGN AND PROMPTLY
RETURN YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. PROXIES MAY BE REVOKED AT ANY
TIME PRIOR TO THE MEETING BY WRITTEN NOTICE OF REVOCATION DELIVERED TO THE
COMPANY'S SECRETARY, THE SUBMISSION OF A LATER PROXY OR BY ATTENDING THE MEETING
AND VOTING IN PERSON.
CINTAS CORPORATION
6800 CINTAS BOULEVARD
P.O. BOX 625737
CINCINNATI, OHIO 45262-5737
TELEPHONE (513) 459-1200
--------------------------------------
P R O X Y S T A T E M E N T
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 21, 1998
INTRODUCTION
The enclosed Proxy is solicited by the Board of Directors of Cintas
Corporation for usevote at the Annual Meeting of Shareholders to be held on October
21, 1998, and at any adjournment of the meeting. The
approximate mailing date of the Proxy Statement and the accompanying proxy cardProxy Card is
August 31, 1998.
VOTING AT ANNUAL MEETING1999.
Whether or not you plan to attend the meeting, please complete, sign, date and
promptly return your proxy card in the enclosed envelope.
David T. Jeanmougin
Secretary
August 31, 1999
GENERAL - -------
ShareholdersINFORMATION
Who may vote
Shareholders of Cintas, recorded in person or by proxy at the Shareholders' Meeting.
Proxies givenour stock register on August 20, 1999, may be revoked at any time prior to the meeting by filing with the
Company's Secretary either a written revocation or a duly executed proxy bearing
a later date, or by appearing at the meeting and voting in person. All shares
will be voted as specified on each properly executed proxy. If no choice is
specified, the shares will be voted as recommended by the Board of Directors.
As of August 21, 1998, the record date for determining shareholders
entitled to notice of and to
vote at the meeting,meeting. As of that date, Cintas had 104,879,612111,055,880 shares of Common
Stock outstanding.
Each share is entitledHow to one vote
on each matter
to be presentedYou may vote in person at the meeting or by proxy. We recommend you vote by
proxy even if you plan to attend the meeting. Only shareholders of record at the close of
business on August 21, 1998, will be entitled toYou can always change your vote at
the meeting.
A quorum
consistsHow proxies work
Cintas' Board of Directors is asking for your proxy. Giving us your proxy means
you authorize us to vote your shares at the meeting in the manner you direct.
You may vote for all, some or none of our director candidates. You may also vote
for or against the other proposals or abstain from voting.
If you sign and return the enclosed proxy card, but do not specify how to vote,
we will vote your shares in favor of setting the number of directors at eight,
in favor of our director candidates and in favor of the presence1999 Stock Option Plan.
You may receive more than one proxy or voting card depending on how you hold
your shares. Shares registered in your name are covered by one card. If you hold
shares through someone else, such as a stockbroker, you may get material from
them asking how you want to vote.
Revoking a proxy
You may revoke your proxy before it is voted by submitting a new proxy with a
later date, by voting in person at the meeting or by notifying Cintas' Secretary
in writing at the address under "Questions?" on page 13.
Quorum
In order to carry on the business of the meeting, we must have a quorum. This
means at least a majority of the outstanding shares eligible to vote must be
represented at the meeting, either by proxy or in person.
Votes needed
The eight director candidates receiving the most votes will be elected to fill
the seats on the Board. Approval of the other proposals requires the favorable
vote of a majority of all shares
entitledthe votes cast. Only votes for or against a proposal
count. Abstentions and broker non-votes count for quorum purposes, but not for
voting purposes. Broker non-votes occur when a broker returns a proxy, but does
not have authority to vote on a particular proposal.
Attending in person
Only shareholders, their proxy holders and Cintas' guests may attend the
meeting.
Other matters
Any other matters considered at the meeting.
-2-
PRINCIPAL SHAREHOLDERS
- ----------------------
The following persons aremeeting, including adjournment, will require
the only shareholders knownaffirmative vote of a majority of shares voting.
Voting by proxy
All proxies properly signed will, unless a different choice is indicated, be
voted "FOR" establishing the Company to own
beneficially 5% or morenumber of its outstanding Common Stock as of the record date:
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- -------------------- -------------------- -----------
Richard T. Farmer(1) 25,505,4552 24.3%
James J. Gardner(1) 7,663,9653 7.3%
Joan A. Gardner(1) 7,663,9653 7.3%
- ------------------
(1) The address of Richard T. Farmer, James J. Gardner and Joan A. Gardner
is Cintas Corporation, 6800 Cintas Boulevard, P.O. Box 625737, Cincinnati, Ohio
45262-5737.
(2) Includes 53,560 shares owned by Mr. Farmer's wife, 3,371,534 shares
held in trust for Mr. Farmer's children, 68,580 shares owned by a corporation
controlled by Mr. Farmer and 30,000 shares which may be acquired pursuant to
stock options which are exercisable within 60 days.
(3) Includes the following shares considereddirectors to be beneficially ownedelected at eight, "FOR"
the election of all nominees for Directors proposed by
both Mr. & Mrs. Gardner: 165,733 shares held by a charitable trust established
by Mr. Gardner, 65,582 shares held by a corporation that is controlled by Mr.
Gardner, 5,887,422 shares held by a family partnership, 850,000 shares owned by
Mrs. Gardner, 210,000 shares held in trust for Mr. Gardner's children and 4,500
shares which may be acquired pursuant to stock options exercisable within 60
days.
- 3 -
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
- ------------------------------------------------------
The following table sets forth the beneficial ownership of the Company's
Common Stock by its directors, the named executive officers in the Summary
Compensation Table of the Proxy Statement and all directors and executive
officers as a group, as of August 21, 1998:
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
- ------------------------ -------------------- --------
Richard T. Farmer 25,505,455 (1) 24.3%
Robert J. Kohlhepp 2,436,862 (2) 2.3%
Gerald V. Dirvin 15,300 (3) *
James J. Gardner 7,663,965 (1) 7.3%
Roger L. Howe 702,956 (3)(4) *
Donald P. Klekamp 143,236 (3)(5) *
John S. Lillard 131,408 (6) *
Scott D. Farmer 458,454 (7) *
David T. Jeanmougin 40,740 (8) *
Robert R. Buck 126,424 (9) *
All Directors and Executive
Officers as a Group (13 persons) 37,354,220 (10) 35.6%
*Less than 1%
(1) See Principal Shareholders.
(2) Includes 40,000 shares held in trust for members of Mr. Kohlhepp's family,
127,344 shares held by a corporation that is controlled by Mr. Kohlhepp,
1,265,350 shares held by a family partnership and options for 44,500 shares
which are exercisable within 60 days.
(3) Includes options for 4,500 shares which are exercisable within 60 days.
(4) Includes 107,648 shares owned by a limited partnership.
(5) Includes 118,516 shares owned by Mr. Klekamp's wife.
- 4 -
(6) Includes options for 3,500 shares which are exercisable within 60 days.
Does not include 16,000 shares held in a charitable foundation controlled
by Mr. Lillard, of which Mr. Lillard disclaims beneficial ownership.
(7) Includes 91,400 shares held in trust for members of Mr. Farmer's family,
2,692 shares owned by his immediate family, 55,920 held by a limited
partnership and options for 60,200 shares which are exercisable within 60
days.
(8) Includes options for 36,400 shares which are exercisable within 60 days.
(9) Includes options for 6,800 shares which are exercisable within 60 days.
(10) Includes options for 215,200 shares which are exercisable within 60 days.
PROPOSAL NO. 1 AND NO. 2 - ELECTION OF DIRECTORS
- ------------------------------------------------
The By-laws of the Company call for the Board of Directors
and "FOR" approval of the 1999 Stock Option Plan.
If any other matters come before the meeting or any adjournment, each proxy will
be voted in the discretion of the individuals named as proxies on the card.
ELECTION OF DIRECTORS
(Item 1 and 2 on the Proxy Card)
The Board has nominated the director candidates named below.
The Board of Directors oversees the management of Cintas' long-term strategic
plans and exercises direct decision making authority in key areas, such as
declaring dividends. Just as important, the Board chooses the CEO, sets the
scope of his authority to havemanage the company's business day to day and evaluates
his performance. The Board also reviews development and succession plans for
Cintas' top executives.
The Company's By-Laws require that the Board of Directors consist of at least
three members with the specificexact number to be elected at the meeting established by shareholders. Atshareholders or the
present time, the Board of Directors. The Board presently consists of eight Directors,directors and the
Board is recommending that this number be retained.
The Board is nominating for reelectionelection all current Directors, namelyof the following: Richard T. Farmer,
Robert J. Kohlhepp, Scott D. Farmer, Gerald V. Dirvin, Scott D. Farmer, James J. Gardner, Roger
L. Howe, Donald P. Klekamp and John S. Lillard. Proxies solicited by the Board
will be voted for the election of the eight
nominees shown above.these nominees. All Directorsdirectors elected at the
Annual Shareholders' Meeting will be elected to hold office until the next Annual Meeting or untilannual meeting. In
voting to elect directors, shareholders are not entitled to cumulate their
successorsvotes.
Most Cintas directors - including five of our eight nominees - are not Cintas
employees. Only non-employee directors serve on Cintas' Audit and Compensation
Committees. All eight directors are elected and qualified.
Should anyfor one-year terms. Personal
information on each of theour nominees become unable to serve, proxies will be voted
for any substitute nominee designated by the Board. The Company has no reason to
believe that any nominee for election will be unable or unwilling to serve if
elected.
RECOMMENDATION OF THE BOARD OF DIRECTORS
- ----------------------------------------is given below.
The Board met six times last year. Cintas' directors attended 100% of Directors recommendsBoard and
committee meetings.
If a vote in favor of Proposal No.1 anddirector nominee becomes unavailable before the election, of the eight nominees proposed by the Board.
VOTE REQUIRED
- -------------
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES VOTING AT THE MEETING IS
REQUIRED TO APPROVE PROPOSAL NO. 1. ABSTENTIONS AND BROKER NON-VOTES WILL HAVE
NO EFFECT ON THIS VOTE. THE EIGHT NOMINEES RECEIVING THE HIGHEST NUMBER OF VOTES
CAST FOR THE POSITIONS TO BE FILLED WILL BE ELECTED.
- 5 -
PROPOSAL NO. 3 - AMENDMENT TO ARTICLES OF INCORPORATION TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK
- -----------------------------------------------------------
The Board of Directors of the Company has approved, and is recommending to
the shareholders for approval at the Annual Meeting, an amendment to Article
Five of the Articles of Incorporation to increase the number of authorized
shares of Common Stock from 120 million to 300 million. As of May 31, 1998,
104,610,716 shares were issued and outstanding and the Company had 1,210,700
additional shares reserved for issuance pursuant to stock option plans.
At the current level of authorized shares, the Company is unable to declare
any meaningful stock split. The Company has regularly utilized Common Stock in
acquisitions and intends to continue that practice. The Board of Directors
believes that the increase in authorized shares of Common Stock will enable the
Company to retain its flexibility in connection with possible future issuances
of stock.
Holders of Common Stock have no preemptive or other rights to subscribe for
additional shares. Additional shares may be issued without shareholder approval.
Further issuance of additional shares of Common Stock might dilute, under
certain circumstances, either shareholders= equity or voting rights. The
authorized but unissued shares of Common Stock could be used to discourage or
make more difficult an attempt to effect a change of control of the Company.
VOTE REQUIRED
- -------------
THE AFFIRMATIVE VOTE OF TWO-THIRDS OF THE SHARES ELIGIBLE TO VOTE ON THE
PROPOSED AMENDMENT IS REQUIRED FOR APPROVAL. ABSTENTIONS AND BROKER NON-VOTES
HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL.
OTHER MATTERS
- -------------
Any other matters considered at the meeting including adjournment will
require the affirmative vote of the majority of shares voting with abstentions
and broker non-votes having no effect.
VOTING BY PROXY
- ---------------
All proxies properly signed will, unless a different choice is indicated,
be voted "FOR" the establishment of the number of Directors at eight, "FOR" the
election of all eight nominees proposed by the Board unless authority is
withheldyour proxy card
authorizes us to vote for some or alla replacement nominee if the Board names one.
The eight nominees receiving the highest number of those nominees, and "FOR"votes cast for the amendmentpositions
to the Articles of Incorporation to increase the authorized shares of common stock.
If any other matters come before the meeting or any adjournment, each proxy
cardbe filled will be voted in the discretionelected.
- --------------------------------------------------------------------------------
The Board recommends you vote FOR each of the proxies named therein.
- 6 -
SHAREHOLDER PROPOSALS
- ---------------------
Shareholders who desire to have proposals included in the Notice for the
1999 Shareholders' Meeting must submit their proposals in writing to Cintas at
its offices on or before May 3, 1999.
The form of Proxy for the Company's Annual Meeting of Shareholders grants
authority to the designated proxies to vote in their discretion on any matters
that come before the meeting except those set forth in the Company's Proxy
Statement and except for matters as to which adequate notice is received. In
order for a notice to be deemed adequate for the 1999 Shareholders' Meeting, it
must be received prior to July 19, 1999.
APPOINTMENT OF INDEPENDENT AUDITORS
- -----------------------------------
The Board of Directors appointed Ernst & Young LLP as its certified public
accountants for fiscal 1999. Ernst & Young LLP has served as certified public
accountants for the Company in the past. A member of Ernst & Young LLP will be
present at the meeting to make a statement if desired and to answer questions of
shareholders.
- 7 -
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
- --------------------------------
The Directors and Executive Officers of Cintas Corporation are:
Name and Age Position
- ----------------------- --------------------------------------following candidates:
Richard T. Farmer(1) Chairman of the Board
63
Robert J. Kohlhepp(1) Chief Executive Officer and Director
54
Gerald V. Dirvin(3) Director
61
James J. Gardner(1)(2) Director
65
Roger L. Howe(2)(3) Director
63
Donald P. Klekamp(2) Director
66
John S. Lillard(3) Director
68
Scott D. Farmer President, Chief Operating Officer
39 and Director
Robert R. Buck Senior Vice President and
50 President - Uniform Rental Division
Karen L. Carnahan Vice President and Treasurer
44
William C. Gale Vice President and Chief
46 Financial Officer
David T. Jeanmougin Senior Vice President and Secretary
57
John S. Kean III Senior Vice President
58
Ages are as of September 1 1998.
(1) Member of the Executive Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Compensation Committee of the Board of Directors.
- 8 - Richard T. Farmer has been with the CompanyCintas and its
64 predecessors since 1957 and has served in his present
position with the Company since 1968. Prior to August 1, 1995, Mr. Farmer
also served as Chief Executive Officer. He is also a Director
of Fifth Third Bancorp, a NASDAQ company, and its
subsidiary The Fifth Third Bank, Cincinnati, Ohio, a National Market (NASDAQ) company.Ohio. He is
also the Chairman of Summerhill,Summer Hill, Inc.
Robert J. Kohlhepp 1 Robert J. Kohlhepp has been a Director of the CompanyCintas since
55 1979. He has been employed by the CompanyCintas since 1967 serving
in various executive capacities including Vice President -
Finance until 1979 when he became Executive Vice
President. He served in that capacity until October 23,
1984, when he was elected President, a position he held
until July 1997. Mr. Kohlhepp was elected to his present
position of Chief Executive Officer on August 1, 1995. He
is also a Director of The Mead Corporation, Dayton, Ohio,
a New York Stock Exchange (NYSE) company.
Scott D. Farmer Scott D. Farmer joined Cintas in 1981. He has served in
various management positions including President of Cintas
Sales Corporation, Vice President - National Account
Division and Vice President - Marketing and Merchandising.
He was elected a Director of Cintas in 1994. In July 1997,
he was elected President and Chief Operating Officer of
the Company.
Gerald V. Dirvin 3 Gerald V. Dirvin was elected a Director of Cintas in 1993.
62 Mr. Dirvin joined The Procter & Gamble Company, a
Cincinnati-based consumer goods marketing company and a
NYSENew York Stock Exchange company, in 1959 and served in
various management positions. He retired as Executive Vice
President and as a Director in 1994. Mr. Dirvin is also
a Director of Fifth Third Bancorp, Cincinnati, Ohio, a NASDAQ company, and
Northern Telecom Limited, Toronto, Canada, a NYSE company.its subsidiary the Fifth Third Bank, Cincinnati, Ohio.
James J. Gardner 1&2 James J. Gardner served in various management positions
66 with Cintas from 1956 until his retirement in 1988. Mr.
Gardner has served as a Director of the Company since
1969.
Roger L. Howe 2&3 Roger L. Howe has been a Director of Cintas since 1979.
64 He was the Chairman of the Board of U.S. Precision Lens,
Inc., a manufacturer of optics for the instrument,
photographic and television industries, until his
retirement on September 1, 1997. Mr. Howe had held that
position in the firm for over five years. Mr. Howe is a
Director of StarFirstar Banc Corporation, Cincinnati, Ohio, a NYSENew York Stock
Exchange company, and its subsidiary StarFirstar Bank,
National Association; Cincinnati Bell
Inc.,Convergys Corporation, a NYSENew York
Stock Exchange company; and Baldwin Piano and Organ
Company, a Loveland,Mason, Ohio, based company which is the largest domestic manufacturer of keyboard musical
instruments and a NASDAQ
company.
Donald P. Klekamp 2 Donald P. Klekamp was elected a Director of Cintas in
67 1984. Mr. Klekamp is a senior partner in the Cincinnati
law firm of Keating, Muething & Klekamp, P.L.L., which
serves as counsel for the Company.
John S. Lillard 3 John S. Lillard has been a Director of Cintas since 1978.
69 He is Chairman of Wintrust Financial Corporation, a bank
holding company in Illinois. He wasis a Founder of JMB
Institutional Realty Corporation, a registered investment
advisor, where he served as President from 1978 to 1991.
In 1991, he became Chairman-Founder until his retirement
in June 1996. He is also a Director of Stryker
Corporation, a Kalamazoo, Michigan based medical equipment
company, and a New York Stock Exchange company. He is also
a Director of Lake Forest Bank and Trust Company, a bank holding company.
Scott D. Farmer joined CintasCompany.
Ages are as of September 1, 1999.
1 Member of the Executive Committee of the Board of Directors.
2 Member of the Audit Committee of the Board of Directors.
3 Member of the Compensation Committee of the Board of Directors.
PROPOSAL FOR THE NEW STOCK OPTION PLAN
The Board is recommending that shareholders approve the Company's 1999 Stock
Option Plan. The Plan provides for the granting of options to purchase 6,000,000
shares of Common Stock. There remains only 523,620 shares available for grant
from the shares previously authorized by shareholders in 1981. He has served in various management
positions including President of Cintas Sales Corporation, Vice President -
National Account Division and Vice President Marketing and Merchandising. He was
elected a Director of Cintas in 1994. In July 1997, he was elected President and
Chief Operating Officerother stock option
plans of the Company. Robert R. Buck joinedWith the new option plan, any shares remaining from the
old plans will be terminated. The Board considers it advisable for Cintas in 1982. He served as Senior Vice President -
Finance and Chief Financial Officer from 1982 to
1991, and Senior Vice President
- - Midwest Region from 1991 to 1997. In July 1997, he was elected President -
Uniform Rental Division.
Karen L. Carnahan joined Cintas in 1979. She has held various accounting
and finance positions with the Company. In March 1992, she was elected Treasurer
of the Company and was elected Vice President of the Company in July 1997.
- 9 -
William C. Gale joined Cintas in April 1995. He is presently responsiblehave additional shares available for the areasgrant of finance, accountingoptions in order to provide
awards designed to attract and administration. Prior to joining
Cintas, Mr. Gale was associated with International Paper, a forest products,
paper and packaging company and a NYSE company where he served as auditor since
February 1994. Mr. Gale also held various financial executive positions between
1982 and1994 with Occidental Petroleum Corporation, an oil products and chemical
concern and a NYSE company.
David T. Jeanmougin joined Cintas in August 1991 as Senior Vice President -
Finance and was responsible for the areas of finance, accounting and
administration. He served in that capacity until April 1995, when he was named
Secretary of the Company and Senior Vice President. In this capacity he is
responsible for the area of acquisitions and several otherretain key administrative
areas.
John S. Kean III joined Cintas in August 1986 upon the acquisition of Red
Stick Services where he served as President. He was appointed Senior Vice
President in 1986 and is responsible for operations in Louisiana, Mississippi,
Alabama, Arkansas and Tennessee.
James J. Gardner is the brother-in-law of Richard T. Farmer. Scott D.
Farmer is the son of Richard T. Farmer. None of the other Executive Officers and
Directors are related.
BOARD ACTIONS AND COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
- ----------------------------------------------------------------
The Board of Directors met on four occasions in fiscal 1998. The Executive
Committee is entitled through authorizationemployees.
A committee established by the Board of Directors administers the Plan. The
Committee evaluates the duties of employees and by
Washington lawtheir present and potential
contributions to perform substantially all of the functions of the Board of
Directors between meetings of the Board. The Executive Committee took action by
written consent on thirty-seven occasions in fiscal 1998.
The Audit Committee reviews the Company's internal accounting operations,
monitors relationships between the Company and such other factors as it deems relevant in
determining key persons to whom options will be granted and the number of shares
covered by such grants. All employees of the Company are eligible to be
considered by the Committee for the grant of options.
The Plan provides that all options are to be granted with exercise prices of not
less than 100% of the last sale price for the Common Stock reported on the date
of grant. Options may be granted for varying periods of up to ten years. Options
may be granted either as Incentive Stock Options designed to provide certain tax
benefits under the Internal Revenue Code or as Non-Qualified Options without
such benefits. However, persons who beneficially own 10% or more of the
Company's outstanding Common Stock may not be granted incentive options for
terms exceeding five years and their exercise prices must be at least 110% of
market value at the time of grant. The closing sale price for the Company's
Common Stock on August 20, 1999 was $55.8125.
The right to exercise options will vest according to a schedule determined at
the time of grant which generally is at the rate of 20% per year commencing on
the fifth anniversary of the date of grant, with this right to exercise
cumulative to the extent not utilized in prior periods. The committee is
empowered to grant options with different vesting provisions. Options may be
exercised for cash or for the Company's common stock at its independent accountants and
recommendsfair market value.
If the employment of independent auditors.a person holding an option is terminated for any reason
other than death, total permanent disability or retirement, the option
terminates.
Persons who receive options incur no federal income tax liability at the time of
grant.
Persons exercising Non-Qualified Options recognize taxable income and the
Company has a tax deduction at the time of exercise to the extent of the
difference between market price on the day of exercise and the exercise price.
Persons exercising Incentive Stock Options do not recognize taxable income until
they sell the stock. Sales within two years of the date of grant or one year of
the date of exercise result in taxable income to the holder and a deduction for
the Company, both measured by the difference between the market price at the
time of sale and the exercise price. Sales after such period are treated as
capital transactions to the holder and the Company receives no deductions.
The Auditaffirmative vote of a majority of votes cast at the meeting is required to
approve the Plan.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $9,200 annual retainer
for serving as a Director plus $1,625 for each meeting attended. Committee
metmembers also receive $900 for each committee meeting attended. Directors who are
employees of the Company are not separately compensated for serving as
Directors.
BOARD COMMITTEES
The Board appoints committees to help carry out its duties. In particular, Board
committees work on two occasionskey issues in fiscal 1998.greater detail than would be possible at full
Board meetings. Each committee reviews the results of its meetings with the full
Board. The Compensation Committee establishes compensation levels for all
executives and administers the Company's stock option plans. This Committee met
on one occasion and took action by written consent on ten occasions in fiscal
1998.
The CompanyBoard of Directors does not have a nominating committee.
Outside directors are paid an annual fee of $9,200 plus $1,625The Audit Committee is responsible for each
Board meeting attended and $900 for each Committee meeting attended. Directors
who are executive officers are not paid Directors' fees nor do they participate
in the 1994 Directors' Stock Option Plan.
Section 16(a) of the Securities Exchange Act of 1934 requiresreviewing the Company's officers, directorsinternal
accounting operations. It also recommends the employment of independent
accountants and persons who own more than ten percent of a registered
class ofreviews the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. These persons
are required by SEC regulation to furnishrelationship between the Company with copies of all Section
16(a) forms they file. Based solely onand its review of the copies of such forms
received by it, or written representation from certain reporting persons that no
Form 5's were required for those persons, the Company believes that during the
period of June 1, 1997, through May 31, 1998, all filing requirements of such
persons were met.
- 10 -
EXECUTIVE COMPENSATION
- ----------------------
The following table summarizes the annualoutside
accountants.
Committee members: James J. Gardner, Roger L. Howe (Chairman) and
long-term compensation of the
Company's Chief Executive Officer and each of the Company's other four most
highly compensated Executive Officers for the years ended May 31, 1998, 1997 and
1996.
SUMMARY COMPENSATION TABLE
Annual Long Term
Compensation Compensation
-------------------- -------------
Shares
Other Annual Underlying All Other
Name and Principal Salary Bonus Compensation Option Compensation
Position Year ($) ($) ($) Grants (#) ($)(1)
- ---------------------- ------- -------- -------- ------------ ------------ ------------
Richard T. Farmer 1998 300,000 120,828 48,699(2) -- 179,562
Chairman of the 1997 286,867 188,759 48,522(2) 10,000 195,827
Board 1996 278,512 207,813 61,061(2) 20,000 209,340
Robert J. Kohlhepp 1998 300,000 246,667 58,650(3) -- 52,718
Chief Executive 1997 275,391 207,461 -- 10,000 55,454
Officer and Director 1996 267,370 174,202 -- 100,000 58,277
Scott D. Farmer 1998 250,000 165,556 -- 60,000 7,139
President, Chief 1997 180,000 32,563 -- 10,000 5,738
Operating Officer 1996 150,000 23,866 -- 10,000 6,183
and Director
Robert R. Buck 1998 250,000 194,450 -- 40,000 7,019
Senior Vice President 1997 230,000 185,745 -- 10,000 6,210
and President - 1996 200,000 161,869 -- 10,000 6,699
Uniform Rental
Division
David T. Jeanmougin 1998 229,237 82,780 -- 10,000 6,976
Senior Vice President 1997 220,420 72,518 -- -- 6,068
and Secretary 1996 214,000 69,715 -- 10,000 6,571
(1) The Company maintains a split-dollar life insurance program for Messrs. R.
Farmer and Kohlhepp. Under this program, the Company has purchased insurance
policies on the lives of Mr. R. Farmer and his wife and Mr. Kohlhepp and his
wife. Messrs. R. Farmer and Kohlhepp are responsible for a portion of the
premiums and the Company pays the remainder. Upon the death of Messrs. R. Farmer
or Kohlhepp and their spouses, the Company will receive that portion of the
benefits paid that equals the premiums paid by the Company on that policy. The
life insurance trust established by the decedent will receive the remainder of
the death benefits. The actuarially projected current dollar value of the
benefit to Messrs. R. Farmer and Kohlhepp of the premiums paid to the insurer
under these policies for the fiscal years ended May 31, 1998, 1997 and 1996 is
$172,046, $189,185 and $202,007, respectively, for Mr. R. Farmer and $45,363,
$49,483 and $51,348 respectively, for Mr. Kohlhepp. These amounts are included
above.
- 11 -
The Cintas Partners' Plan is a non-contributory employee stock ownership
plan and profit sharing plan with a 401(k) savings feature which covers
substantially all employees. Included above are the dollars contributed by the
Company pursuant to the Partners' Plan.
(2)Represents compensation associated with the use of the Company's
aircraft ($18,134, $20,078 and $52,766 in 1998, 1997 and 1996, respectively),
financial planning ($20,000 and $18,330 in 1998 and 1997 respectively) and other
expense reimbursements.
(3)Represents compensation associated with the use of the Company's
aircraft ($33,202), financial planning ($15,000) and other expense
reimbursements.
STOCK OPTIONS
- -------------
The following table sets forth information regarding stock options granted
to the executives named in the Summary Compensation Table during the fiscal year
ended May 31, 1998:
OPTION GRANTS IN LAST FISCAL YEAR
Percent of
Total Potential Realizable
Options Value at Assumed
Number of Granted Annual Rates of Stock
Shares to Price Appreciation for
Underlying Employees Exercise Option Term ($)
Options In Fiscal Price Expiration -----------------------------
Name Granted 1997 ($/Sh.) Date 5% 10%
- ------------ ----------- ---------- --------- ----------- ----------- ------
Richard T. __ N/A N/A N/A N/A N/A
Farmer
Robert J. -- N/A N/A N/A N/A N/A
Kohlhepp
Scott D. 60,000 5.5% 35.3125 07/28/07 1,332,470 3,376,742
Farmer
Robert R. 40,000 3.7% 35.3125 07/28/07 888,314 2,251,161
Buck
David T. 10,000 .9% 35.3125 07/28/07 222,078 562,790
Jeanmougin
- 12 -
The following table sets forth information regarding stock options
exercised by the executives named in the Summary Compensation Table during
fiscal 1998 and the value of in-the-money unexercised options held by them as of
May 31, 1998:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Option at May 31, 1998 May 31, 1998($)(1)
Acquired on Value --------------------------- ---------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ------------ ----------- ----------- ------------- ----------- -------------
Richard T. Farmer 20,000 665,000 20,000 20,000 537,344 490,781
Robert J. Kohlhepp 1,500 46,000 30,500 158,000 1,166,594 4,432,750
Scott D. Farmer 7,000 212,042 56,200 102,000 2,094,462 1,794,375
Robert R. Buck --- --- 3,200 74,800 110,200 1,372,175
David T. Jeanmougin --- --- 22,400 77,600 771,200 2,276,050
(1)Value is calculated as the difference between the fair market value of
the Common Stock on May 31, 1998 ($45.6875 per share) and the exercise price of
the options.
REPORT OF THE COMPENSATION COMMITTEE
- ------------------------------------Donald P. Klekamp.
Meetings last year: One.
The Compensation Committee of the Board of Directors is composed of three
independent, outside directors. The members of the Committeeresponsible for fiscal 1998
were Messrs. Dirvin, Howe and Lillard. The Committee has the overall
responsibility of reviewing and recommending specificestablishing compensation levels
for management.
The committee's report on executive officerscompensation follows.
Committee members: Gerald V. Dirvin, Roger L. Howe and
key management to the full Board of Directors. The
Committee is also charged with reviewing the performance of the executive
officers in relation to overall Company performance. The Company's stock option
plans are also administered by the Committee.John S. Lillard (Chairman).
Meetings last year: Two.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation decisions for fiscal
1998 followed the same pattern as fiscal 1997.Policies
The Company's executive compensation policies are designed to support the
corporate objective of maximizing the long termlong-term value of the Company to its
shareholders and employees. To achieve this objective, the Committee believes it
is important to provide competitive levels of compensation to attract and retain
the most qualified executives, to recognize individuals who exceed expectations
and to link closely overall corporate performance and executive pay. The methods
by which the Committee believes the Company's long termlong-term objectives can be
achieved are through incentive compensation plans and the issuance of options to
purchase the Company's common stock.
- 13 -Common Stock.
The Committee has established three primary components of the Company's
executive compensation plan. The three components are:
- base compensationcompensation;
- performance incentive compensationcompensation;
- stock-based performance compensation through stock option grantsgrants.
The Omnibus Budget Reconciliation Act of 1993 provides that compensation in
excess of $1,000,000 per year paid to the chief executive officer of a company
as well as the other executive officers listed in the compensation table will no
longer be deductible unless the compensation is performance-based and approved
by shareholders. This law was not considered by the Committee in determining
fiscal 19981999 compensation since compensation levels were not in excess of the
amounts deductible under the law.
BASE COMPENSATIONBase Compensation
- -----------------
The Committee annually reviews base salaries of executive officers. Factors
which influence decisions made by the Committee regarding base salaries are
levels of responsibility and potential for future responsibilities, salary
levels offered by competitors and overall performance of the Company. The
Committee's practice in establishing salary levels is based in part upon overall
Company performance and is not based upon any specific objectives or policies,
but reflects the subjective judgment of the Committee. However, specific annual
performance goals are established for each executive officer. Based on the
Committee's comparison of the Company's overall compensation levels as a percent
of revenues and net income to comparable companies in the industry, the
Committee believes its overall compensation levels are in the middle of the
range.
PERFORMANCE INCENTIVE COMPENSATIONPerformance Incentive Compensation
- ----------------------------------
TheA performance incentive compensation component, which is paid out in the form of
an annual cash bonus, was established by the Committee to provide a direct
financial incentive to achieve corporate and operating goals. The basis for
determining performance incentive compensation is strictly quantitative in
nature. At the beginning of each fiscal year, the Committee establishes a target
bonus for certain executives based on target levels of increases in earnings per
share. Cash bonuses paid to other executives are based on a percentage of
operating profits of the particular division served by that officer.
Those
percentages are not disclosed because they could be used to determine divisional
operating profits which are otherwise not publicly available.
STOCK OPTION GRANTS
Stock Option Grants
- -------------------
Executive compensation to reward past performance and to motivate future
performance is also provided through stock options granted under the 1992Cintas' Stock
Option Plan.Plans. The purpose of the plan is to encourage executive officers to
maintain a long-term stock ownership position in the Company in order that their
interests are aligned with those of the Company's shareholders. The Committee in
its discretion has the authority to determine participants in the plan, the
number of shares to be granted and the option price and term. The Committee has
not established specific stock option target awards for participants.
Consideration for
stock option awards are evaluated on a subjective basis and granted to
participants until an ownership position exists which is consistent with the
participant's current responsibilities. Options granted to executive officers in
Fiscal 19981999 can be found on page 11 under the Option Grants Table.
- 14 -
CHIEF EXECUTIVE OFFICER COMPENSATION11.
Chief Executive Officer Compensation
- ------------------------------------
The Committee establishesestablished Mr. Kohlhepp's base salary based primarily on a
subjective evaluation of the Company's prior year's financial results, past
salary levels and compensation paid to other chief executive officers in the
Company's industry. Based on the Committee's comparison of the Company's overall
compensation level for Mr. Kohlhepp as a percent of revenue and net income to
comparable companies in the industry, the Committee believes his overall
compensation level is in the middle of the range. The Committee also establishes
at the beginning of each year a performance incentive bonus arrangement for Mr.
Kohlhepp. Based on the Company's belief that shareholder value is best enhanced
by increases in earnings per share, the Committee based this arrangement for
fiscal 1999 on target levels of increases in earnings per share. The program
provided for no bonus if earnings per share did not exceed a minimum threshold
of a 10% increase over the prior year's earnings per share, which was $1.91 (prior to restatement
for stock split).$1.16. The
bonus potential ranged from 10% of base salary if earnings per share increased
by nineteen cents$.12 over the prior year up to a maximum of 90% if earnings per share
increased by forty-eight cents$.29 over the prior year.
RESPECTFULLY SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE, John S.
Lillard - Chairman(Chairman), Gerald V. Dirvin, and Roger L. Howe
PRINCIPAL SHAREHOLDERS
The following persons are the only shareholders known by the Company to own
beneficially 5% or more of its outstanding Common Stock as of August 20, 1999:
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- 15------------------ -------------------- -----------
Richard T. Farmer1 25,286,9542 22.8%
James J. Gardner1 7,589,5863 6.8%
Joan A. Gardner1 7,589,5863 6.8%
- --------------------------
1 The address of Richard T. Farmer, James J. Gardner and Joan A. Gardner is
Cintas Corporation, 6800 Cintas Boulevard, P.O. Box 625737, Cincinnati,
Ohio 45262-5737.
2 Includes 53,560 shares owned by Mr. Farmer's wife, 3,562,227 shares held in
trust for Mr. Farmer's children, 73,380 shares owned by a corporation
controlled by Mr. Farmer, 10,079,880 shares held by a family partnership
and 7,500 shares which may be acquired pursuant to stock options which are
exercisable within 60 days.
3 Includes the following shares considered to be beneficially owned by both
Mr. & Mrs. Gardner: 159,027 shares held by a charitable trust established
by Mr. Gardner, 65,582 shares held by a corporation that is controlled by
Mr. Gardner, 6,303,600 shares held by a family partnership, 44,927 shares
owned by Mrs. Gardner, 646,872 shares held in trust for Mr. Gardner's
children and 6,000 shares which may be acquired pursuant to stock options
exercisable within 60 days.
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP
These tables show how much Cintas Corporation common stock each executive
officer named in the summary compensation table and each director of Cintas
owned on August 20, 1999.
Common Stock Beneficially Owned(1)
Name and Age ---------------------------------
Beneficial Amount and Nature of Percent
Owner Position Beneficial Ownership of Class
- ------------------ ------------------------ --------------------- --------
Richard T. Farmer Chairman of the Board 25,286,954(2) 22.8%
64
Robert J. Kohlhepp Chief Executive Officer 2,444,522(3) 2.2%
55 and Director
Scott D. Farmer President, Chief 457,112(4) *
40 Operating Officer
and Director
Gerald V. Dirvin Director 16,800 *
62
James J. Gardner Director 7,589,586(2) 6.8%
66
Roger L. Howe Director 704,456(5) *
64
Donald P. Klekamp Director 142,611(6) *
67
John S. Lillard Director 132,908(7) *
69
David T. Jeanmougin Senior Vice President 56,745(8) *
58 and Secretary
Robert R. Buck Senior Vice President 124,646(9) *
51 and President - Uniform
Rental Division
All Directors and 37,052,036(10) 33.4%
Executive Officers
as a Group (13
persons)
*Less than 1%
(1) Included in the amount of Common Stock beneficially owned are the following
shares of common stock for options exercisable within 60 days: Mr. Kohlhepp
- 26,000 shares; Mr. Dirvin - 6,000 shares; Mr. Howe 6,000 shares; Mr.
Klekamp - 6,000 shares; Mr. Lillard - 5,000 shares; Mr. S. Farmer - 48,800
shares; Mr. Jeanmougin - 52,400 shares; and Mr. Buck - 453 shares.
(2) See Principal Shareholders on page 7.
(3) Includes 240,000 shares held in trust for members of Mr. Kohlhepp's family,
127,344 shares held by a corporation that is controlled by Mr. Kohlhepp and
1,265,350 shares held by a family partnership.
(4) Includes 91,400 shares held in trust for members of Mr. Farmer's family,
2,692 shares owned by his immediate family and 55,920 shares held by a
limited partnership.
(5) Includes 107,648 shares owned by a limited partnership.
(6) Includes 118,516 shares owned by Mr. Klekamp's wife.
(7) Does not include 16,000 shares held in a charitable foundation controlled
by Mr. Lillard of which Mr. Lillard disclaims beneficial ownership.
(8) David T. Jeanmougin joined Cintas in August 1991 as Senior Vice President -
Finance and was responsible for the areas of finance, accounting and
administration. He served in that capacity until April 1995 when he was
named Secretary of the Company and Senior Vice President. In this capacity
he is responsible for the area of acquisitions and several other key
administrative areas.
(9) Robert R. Buck joined Cintas in 1982. He served as Senior Vice President -
Finance and Chief Financial Officer from 1982 to 1991, and Senior Vice
President - Midwest Region from 1991 to 1997. In July 1997, he was elected
President - Uniform Rental Division.
(10) Includes options for 173,953 shares which are exercisable within 60 days.
The following is a description of our other executive officers:
Karen L. Carnahan joined Cintas in 1979. She has held various accounting and
finance positions with the Company. In March 1992, she was elected Treasurer of
the Company and was elected Vice President of the Company in July 1997.
William C. Gale joined Cintas in April 1995 as Vice President-Finance and Chief
Financial Officer. He is presently responsible for the areas of finance,
accounting and administration. Prior to joining Cintas, Mr. Gale was associated
with International Paper, a forest products, paper and packaging company and a
New York Stock Exchange company where he served as auditor since February 1994.
Mr. Gale also held various financial executive positions between 1982 and 1994
with Occidental Petroleum Corporation, an oil products and chemical concern and
a New York Stock Exchange company.
John S. Kean III joined Cintas in August 1986 upon the acquisition of Red Stick
Services where he served as President. He was appointed Senior Vice President in
1986 and is responsible for operations in Louisiana, Mississippi, Alabama,
Arkansas and Tennessee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent of the
Company's Common Stock to file reports of ownership with the Commission and to
furnish the Company with copies of these reports. Based solely upon its review
of reports received by it, or upon written representation from certain reporting
persons that no reports were required, Cintas believes that during fiscal 1999
all filing requirements were met, except that Forms 5 for Messrs. Dirvin, Howe,
Klekamp and Lillard to report an option grant, of 1,000 shares each, exempt from
the provisions of Section 16(b) were each filed late.
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
----------------- -------------------
Other Shares All
Annual Underlying Other
Compen- Option Compen
Name and Salary Bonus sation Grants -sation
Principal Position Year ($) ($) ($) (#) ($)(1)
- ------------------ ---- ------- ------- --------- ---------- -------
Richard T. Farmer 1999 345,000 172,500 58,856(2) -- 142,344
Chairman of the 1998 300,000 120,828 48,699(2) -- 179,562
Board 1997 286,867 188,759 48,522(2) 10,000 195,827
Robert J. Kohlhepp 1999 362,000 325,800 -- -- 47,072
Chief Executive 1998 300,000 246,667 58,650(3) -- 52,718
Officer and 1997 275,391 207,461 -- 10,000 55,454
Director
Scott D. Farmer 1999 304,000 212,800 -- -- 8,154
President, Chief 1998 250,000 165,556 -- 60,000 7,139
Operating Officer 1997 80,000 32,563 -- 10,000 5,738
and Director
Robert R. Buck 1999 270,000 225,207 -- -- 8,207
Senior Vice 1998 250,000 194,450 -- 40,000 7,019
President and 1997 230,000 185,745 -- 10,000 6,210
President -
Uniform Rental
Division
David T. Jeanmougin 1999 250,000 100,000 -- -- 7,901
Senior Vice 1998 229,237 82,780 -- 10,000 6,976
President and 1997 220,420 72,518 -- -- 6,068
Secretary
(1) The Company maintains a split-dollar life insurance program for Messrs. R.
Farmer and Kohlhepp. Under this program, the Company has purchased
insurance policies on the lives of Mr. R. Farmer and his wife, and Mr.
Kohlhepp and his wife. Messrs. R. Farmer and Kohlhepp are responsible for a
portion of the premiums and the Company pays the remainder. Upon the death
of Messrs. R. Farmer or Kohlhepp and their spouses, the Company will
receive that portion of the benefits paid that equals the premiums paid by
the Company on that policy. The life insurance trust established by the
decedent will receive the remainder of the death benefits. The actuarially
projected current dollar value of the benefit to Messrs. R. Farmer and
Kohlhepp of the premiums paid to the insurer under these policies for the
fiscal years ended May 31, 1999, 1998 and 1997 is $133,612, $172,046 and
$189,185, respectively, for Mr. R. Farmer and $38,529, $45,363 and $49,483,
respectively, for Mr. Kohlhepp. These amounts are included above.
The Cintas Partners' Plan is a non-contributory employee stock ownership
plan and profit sharing plan with a 401(k) savings feature which covers
substantially all employees. Included above are the dollars contributed by
the Company pursuant to the Partners' Plan.
(2) Represents compensation associated with the use of the Company's aircraft
($32,958, $18,134 and $20,078 in 1999, 1998 and 1997, respectively),
financial planning ($15,000, $20,000 and $18,330 in 1999, 1998 and 1997,
respectively) and other expense reimbursements.
(3) Represents compensation associated with the use of the Company's aircraft
($33,202), financial planning ($15,000) and other expense reimbursements.
STOCK OPTIONS
No Stock Options were granted to the executives named in the Summary
Compensation Table during the fiscal year ended May 31, 1999.
The following table sets forth information regarding stock options exercised by
the executives named in the Summary Compensation Table during fiscal 1999 and
the value of in-the-money unexercised options held by them as of May 31, 1999:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Value of Unexercised In-
Unexercised the-Money Options at
Shares Value Options at May 31, 1999 May 31, 1999($)(1)
Acquired on Realized -------------------------- ---------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------- ------------ --------- ----------- ------------- ----------- -------------
Richard T. Farmer 10,000 563,750 20,000 10,000 853,125 411,875
Robert J. Kohlhepp 28,500 1,923,125 16,000 144,000 828,000 6,492,625
Scott D. Farmer 10,200 566,525 50,000 98,000 2,711,250 3,409,875
Robert R. Buck 6,800 247,600 ---- 71,200 ---- 2,520,450
David T. Jeanmougin ---- ---- 36,400 63,600 1,896,150 2,932,350
(1) Value is calculated as the difference between the fair market value of the
Common Stock on May 31, 1999 ($63.50 per share) and the exercise price of
the options.
COMMON STOCK PERFORMANCE GRAPH
- ------------------------------
The following graph summarizes the cumulative return on $100 invested in the
Company's Common Stock, the S & P 500 Stock Index and the common stocks of a
representative group of companies in the uniform related industry (the "Peer
Index"). The companies included in the Peer Index are Angelica Corporation, G &
K Services, Inc., and UniFirst Corporation and Unitog Company. National Service
Industries which is no longer in the same line of business as the peer group is
no longer included in the peer group.Corporation. Total shareholder return was based on
the increase in the price of the stock and assumed investmentreinvestment of all
dividends. Further, total return was weighted according to market capitalization
of each company. The companies in the Peer Index are not the same as those
considered by the Compensation Committee.
MEASUREMENT PERIOD CINTAS S&P 500 PEER
PERIOD(QUARTER END) CORP 500 INDEX GROUP
(QUARTER END)
- ------------------------------- ------ ------- -------------- ------
MAY, 93 100 100 100
AUG, 93 106 104 105
NOV, 93 105 104 111
FEB, 94 115 106 116
MAY, 94 114 104 114
AUG, 94 116 109 115
NOV, 94 126 105 109
FEB, 95 139 114 110
MAY, 95 127 125 119
AUG, 95 139 133 133
NOV, 95 169 144 141
FEB, 96 178 153 155
MAY, 96 198 161 180
NOV, 96 224 184 185
FEB, 97 199 193 166
MAY, 97 230 208 169
AUG, 97 259 222 187
NOV, 97 289 237 197
FEB, 98 317 261 216
MAY, 98 341 272 203
AUG, 98 266 230 194
NOV, 98 359 281 203
FEB, 99 464 300 201
MAY, 99 416 316 184
SHAREHOLDER PROPOSALS FOR NEXT YEAR
Shareholders who desire to have proposals included in the Notice for the 2000
Shareholders' Meeting must submit their proposals in writing to Cintas at its
offices on or before May 4, 2000.
The form of Proxy for the Company's Annual Meeting of Shareholders grants
authority to the designated proxies to vote in their discretion on any matters
that come before the meeting except those set forth in the Company's Proxy
Statement and except for matters as to which adequate notice is received. In
order for a notice to be deemed adequate for the 2000 Shareholders' Meeting, it
must be received prior to July 20, 2000.
OTHER MATTERS
Cintas knows of no other matters to be presented at the meeting other than those
specified in the Notice.
By order ofQUESTIONS?
If you have questions or need more information about the Board of Directors.annual meeting, write
to:
David T. Jeanmougin, Secretary
6800 Cintas Blvd.
P. O. Box 625737
Cincinnati, OH 45262-5737
or call (513) 459-1200.
For information about your record holding call the Fifth Third Bank Shareholder
Services at 1-800-837-2755. We also invite you to visit Cintas' Internet site at
www.Cintas-corp.com. Internet site materials are for your general information
and are not part of this proxy solicitation.
FRONT OF CARD
CINTAS CORPORATION PROXY FOR ANNUAL MEETING
6800 Cintas Blvd., P.O. Box 625737, Cincinnati, Ohio 45262-5737
The undersigned hereby appoints RICHARD T. FARMER, ROBERT J. KOHLHEPP,
and WILLIAM C. GALE, or any of them, proxies of the undersigned, each with the
power of substitution, to vote all shares of Common Stock which the undersigned
would be entitled to vote at the Annual Meeting of Shareholders of Cintas
Corporation to be held October 20, 1999, at 10:00 a.m. (Eastern Time) at the
Company's Headquarters, 6800 Cintas Boulevard, Cincinnati, Ohio 45040 and at any
adjournment of such Meeting as specified below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. Authority to establish the number of Directors to be elected at the Meeting
at eight.
FOR AGAINST ABSTAIN
2. Authority to elect eight nominees listed below.
FOR all nominees listed below (except as WITHHOLD AUTHORITY to vote for all
marked to the contrary) nominees listed below
Richard T. Farmer; Robert J. Kohlhepp; Scott D. Farmer; Gerald V. Dirvin; James
J. Gardner; Roger L. Howe; Donald P. Klekamp; John S. Lillard
WRITE THE NAME OF ANY NOMINEE(S) FOR
WHOM AUTHORITY TO VOTE IS WITHHELD
(Continued on other side)
BACK OF CARD
3. Approval of the 1999 Stock Option Plan.
FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
, 1999 _________________________________
Important: Please sign exactly as
name appears hereon indicating,
where proper, official position
or representative capacity. In
the case of joint holders, all
should sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS