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:
[X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] 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) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined)
(4) Proposed maximum aggregate value of transaction:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of this filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[CINTAS LOGO]
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
Dear Shareholder:
We invite you to attend our Annual Meeting of Shareholders on October 25, 2000,
at 10:00 a.m. (Eastern Time) at the Company's Headquarters, 6800 Cintas
Boulevard, Cincinnati, Ohio. 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 the
meeting. I urge you to complete, sign, date and return your proxy card promptly
in the enclosed envelope.
Sincerely,
Richard T. Farmer
Chairman of the Board
September 5, 2000
<PAGE>
TABLE OF CONTENTS Page
----
GENERAL INFORMATION............................................................1
ELECTION OF DIRECTORS..........................................................2
PROPOSAL TO INCREASE AUTHORIZED SHARES OF COMMON STOCK.........................4
DIRECTOR COMPENSATION..........................................................4
BOARD COMMITTEES...............................................................4
COMPENSATION COMMITTEE REPORT..................................................4
PRINCIPAL SHAREHOLDERS.........................................................6
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP.................................7
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE........................8
SUMMARY COMPENSATION TABLE.....................................................9
OPTION GRANTS IN LAST FISCAL YEAR.............................................10
PERFORMANCE GRAPH.............................................................11
QUESTIONS.....................................................................12
APPENDIX A - AUDIT COMMITTEE CHARTER..........................................13
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF CINTAS CORPORATION
Time: 10:00 a.m., Eastern Time
Date: October 25, 2000
Place: Cintas Corporate Headquarters
6800 Cintas Boulevard
Cincinnati, Ohio
Purpose:
1. To establish the number of Directors to be elected at seven;
2. To elect seven Directors;
3. To approve an increase in authorized shares of Common Stock;
4. To conduct other business if properly raised.
Only shareholders of record on August 28, 2000 may vote at the meeting. The
approximate mailing date of the Proxy Statement and accompanying Proxy Card is
September 5, 2000.
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
September 5, 2000
<PAGE>
GENERAL INFORMATION
Who may vote
Shareholders of Cintas, recorded in our stock register on August 28, 2000, may
vote at the meeting. As of that date, Cintas had ---,---,--- shares of common
stock outstanding.
How to vote
You may vote in person at the meeting or by proxy. We recommend you vote by
proxy even if you plan to attend the meeting. You can always change your vote at
the meeting.
How 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 seven,
in favor of our director candidates and in favor of the increase in authorized
shares of Common Stock.
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 12.
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 seven director candidates receiving the most votes will be elected to fill
the seats on the Board. Approval of the proposal to increase authorized shares
of Common Stock requires the affirmative vote of a majority of the outstanding
shares of Common Stock. Approval of any other proposal requires the favorable
vote of a majority of the 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, including adjournment, will require
the affirmative 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 number of directors to be elected at seven, "FOR"
the election of all nominees for Directors proposed by the Board of Directors
and "FOR" approval of the increase in authorized shares of Common Stock.
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.
<PAGE>
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 manage 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 exact number to be established by shareholders or the
Board of Directors. The Board presently consists of eight directors and the
Board is recommending that this number be set at seven due to the retirement of
John S. Lillard.
The Board is nominating for election all of the following: Richard T. Farmer,
Robert J. Kohlhepp, Scott D. Farmer, Gerald V. Dirvin, James J. Gardner, Roger
L. Howe and Donald P. Klekamp. Proxies solicited by the Board will be voted for
the election of these nominees. All directors elected at the Annual Meeting will
be elected to hold office until the next annual meeting. In voting to elect
directors, shareholders are not entitled to cumulate their votes.
Most Cintas directors - including four of our seven nominees - are not Cintas
employees. Only non-employee directors serve on Cintas' Audit and Compensation
Committees. All seven directors are elected for one-year terms. Personal
information on each of our nominees is given below.
The Board met four times last year. Cintas' directors attended 100% of Board and
committee meetings.
If a director nominee becomes unavailable before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board names one.
The seven nominees receiving the highest number of votes cast for the positions
to be filled will be elected.
The Board recommends you vote FOR each of the following candidates:
Richard T. Farmer1 Richard T. Farmer has been with Cintas and its
65 predecessors since 1957 and has served in his
present position since 1968. Prior to August 1,
1995, Mr. Farmer also served as Chief Executive
Officer. He is a Director of Fifth Third Bancorp,
a NASDAQ company, and its subsidiary The Fifth
Third Bank, Cincinnati, Ohio. He is also the
Chairman of Summer Hill, Inc.
Robert J. Kohlhepp1 Robert J. Kohlhepp has been a Director of Cintas
56 since 1979. He has been employed by Cintas 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 company.
<PAGE>
Scott D. Farmer Scott D. Farmer joined Cintas in 1981. He has
41 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. Dirvin3 Gerald V. Dirvin was elected a Director of Cintas
63 in 1993. Mr. Dirvin joined The Procter & Gamble
Company, a New 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, a NASDAQ company, and its
subsidiary the Fifth Third Bank, Cincinnati, Ohio.
James J. Gardner1 & 2 James J. Gardner served in various management
67 positions with Cintas from 1956 until his
retirement in 1988. Mr. Gardner has served as a
Director of the Company since 1969.
Roger L. Howe2 & 3 Roger L. Howe has been a Director of Cintas since
65 1979. He was the Chairman of the Board of U.S.
Precision Lens, Inc., until his retirement on
September 1, 1997. Mr. Howe held that position
in the firm for over five years. Mr. Howe is a
Director of Firstar Corporation, a New York Stock
Exchange company, and its subsidiary Firstar Bank,
N.A. and Convergys Corporation, a New York Stock
Exchange company.
Donald P. Klekamp2 Donald P. Klekamp was elected a Director of Cintas
68 in 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.
Ages are as of September 1, 2000.
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.
<PAGE>
PROPOSAL FOR THE INCREASE IN 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 300 million to 425 million. As of May 31, 2000, 168,281,506
shares were issued and outstanding and the Company had 8,950,375 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.
The affirmative vote of a majority 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. The proposed amendment is:
"Article Fifth, paragraph 1 is changed to read as follows: FIFTH: The maximum
number of shares which the Corporation is authorized to have outstanding is
425,000,000 shares of Common Stock, without par value."
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive a $12,000 annual retainer
for serving as a Director plus $2,250 for each meeting attended. Committee
members also receive $1,200 for each committee meeting attended. Committee
Chairmen receive an additional fee of $2,500 per year. Each Director was granted
an option to purchase 1,500 shares of Common Stock at an exercise price equal to
the market price on the date of grant. 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 key issues in greater detail than would be possible at full
Board meetings. Each committee reviews the results of its meetings with the full
Board. The Board of Directors does not have a nominating committee.
The Audit Committee of Cintas Corporation is composed of three independent
directors. The Audit Committee is governed by the Audit Committee Charter
adopted by the Board of Directors. A copy of the Audit Committee Charter is
attached as Appendix A to this Proxy Statement.
As set forth in the Audit Committee Charter, the Committee is responsible for
reviewing the Company's internal accounting operations. It also recommends the
employment of independent accountants and reviews the relationship between the
Company and its outside accountants.
Committee members: James J. Gardner, Roger L. Howe (Chairman) and Donald P.
Klekamp.
Meetings last year: Two.
The Compensation Committee is responsible for establishing compensation levels
for management.
The committee's report on executive compensation follows.
Committee members: Gerald V. Dirvin, Roger L. Howe and John S. Lillard
(Chairman).
Meetings last year: One.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation Policies
The Company's executive compensation policies are designed to support the
corporate objective of maximizing the long-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-term objectives can be
achieved are through incentive compensation plans and the issuance of options to
purchase the Company's Common Stock.
<PAGE>
The Committee has established three primary components of the Company's
executive compensation plan. The three components are:
o base compensation;
o performance incentive compensation;
o stock-based performance compensation through stock option grants.
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 2000 compensation since compensation levels were not in excess of the
amounts deductible under the law.
Base 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 Compensation
A 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.
Stock Option Grants
Executive compensation to reward past performance and to motivate future
performance is also provided through stock options granted under Cintas' Stock
Option 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. 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 2000 can be found on page 10.
Chief Executive Officer Compensation
The Committee established 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 2000 on target levels of increases in earnings per share. The program
provided for no bonus if earnings per share did not increase 10% over the prior
year's earnings per share of $1.71 (prior to restatement for stock split). The
bonus potential ranged from 10% of base salary if earnings per share increased
by $.16 over the prior year up to a maximum of 90% if earnings per share
increased by $.37 over the prior year.
<PAGE>
RESPECTFULLY SUBMITTED BY THE MEMBERS OF THE COMPENSATION COMMITTEE,
John S. Lillard (Chairman), Gerald V. Dirvin, and Roger L. Howe
<PAGE>
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 28, 2000:
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
----------------------------------- --------------------- ------------
Richard T. Farmer1 37,899,6613 22.4%
James J. Gardner1 11,085,7944 6.6%
Joan A. Gardner1 11,085,7944 6.6%
Putnam Investment Management, Inc.2 8,443,6475 5.0%
--------------------------
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 The address of Putnam Investment Management, Inc. is One Post Office
Square, Boston, Massachusetts 02109.
3 Includes 80,340 shares owned by Mr. Farmer's wife, 6,809,744 shares held in
trust for Mr. Farmer's children, 110,070 shares owned by a corporation
controlled by Mr. Farmer, 15,119,820 shares held by a family partnership
and 15,000 shares which may be acquired pursuant to stock options which are
exercisable within 60 days.
4 Includes the following shares considered to be beneficially owned by both
Mr. & Mrs. Gardner: 219,334 shares held by a charitable trust established
by Mr. Gardner, 114,123 shares held by a corporation that is controlled by
Mr. Gardner, 7,446,410 shares held by various limited partnerships,
2,040,716 shares owned by Mrs. Gardner and 12,000 shares which may be
acquired pursuant to stock options exercisable within 60 days.
5 Includes 725,004 shares held by The Putnam Advisory Company, Inc. and
7,718,643 shares held by Putnam Investment Management, Inc.
<PAGE>
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 28, 2000.
Common Stock
Beneficially Owned (1)
--------------------------------
Name and Age of Amount and Nature of Percent
Beneficial Owner Position Beneficial Ownership of Class
------------------------- --------------------- ---------------------- --------
Richard T. Farmer Chairman of the 37,899,661(2) 22.4%
65 Board
Robert J. Kohlhepp Chief Executive 3,559,062(3) 2.1%
56 Officer and
Director
Scott D. Farmer President, Chief 698,767(4) *
41 Operating Officer
and Director
Gerald V. Dirvin Director 28,575 *
63
James J. Gardner Director 11,085,794(2) 6.6%
67
Roger L. Howe Director 1,060,059(5) *
65
Donald P. Klekamp Director 206,306(6) *
68
John S. Lillard Director 201,737(7) *
70
John S. Kean Senior Vice 77,939(8) *
60 President
Robert R. Buck Senior Vice 152,793(9) *
52 President and
President - Uniform
Rental Division
All Directors and
Executive Officers
as a Group (13 persons) 55,129,092(10) 32.6%
*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
- 60,000 shares; Mr. Dirvin - 12,375 shares; Mr. Howe - 12,375 shares; Mr.
Klekamp - 12,375 shares; Mr. Lillard - 10,875 shares; Mr. S. Farmer -
69,150 shares; and Mr. Buck - 9,080 shares.
(2) See Principal Shareholders on page 7.
(3) Includes 324,500 shares held in trust for members of Mr. Kohlhepp's family,
176,016 shares held by a corporation that is controlled by Mr. Kohlhepp and
1,833,025 shares held by a family partnership.
<PAGE>
(4) Includes 139,350 shares held in trust for members of Mr. Farmer's family,
4,038 shares owned by his immediate family and 83,880 shares held by a
limited partnership.
(5) Includes 161,472 shares owned by a limited partnership.
(6) Includes 177,774 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) 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 was responsible for operations in Louisiana,
Mississippi, Alabama, Arkansas and Tennessee. Mr. Kean retired from Cintas
Corporation on July 25, 2000.
(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 334,730 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 finance, accounting and
administration.
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 acquisitions and several other key administration areas.
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 2000
all filing requirements were met.
<PAGE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
--------------------------- ------------------------
Other
Annual Shares All Other
Compen- Underlying Compen-
Name and Salary Bonus sation Option sation
Principal Position Year ($) ($) ($) Grants (#) ($)(1)
------------------ ----- ------- ------- --------- ---------- ---------
Richard T. Farmer 2000 360,000 88,691 62,560(2) ---- 142,270
Chairman of the 1999 345,000 172,500 58,856(2) ---- 142,344
Board 1998 300,000 120,828 48,699(2) ---- 179,562
Robert J. Kohlhepp 2000 400,000 180,000 ---- 15,000 47,298
Chief Executive 1999 362,000 325,800 ---- ---- 47,072
Officer and 1998 300,000 246,667 58,650(3) ---- 52,718
Director
Scott D. Farmer 2000 340,000 119,000 ---- 15,000 8,291
President, Chief 1999 304,000 212,800 ---- ---- 8,154
Operating Officer 1998 250,000 165,556 ---- 60,000 7,139
and Director
Robert R. Buck 2000 300,000 240,456 ---- 7,500 8,302
Senior Vice 1999 270,000 225,207 ---- ---- 8,207
President and 1998 250,000 194,450 ---- 40,000 7,019
President-Uniform
Rental Division
John S. Kean 2000 234,000 92,572 ---- ---- 8,506
Senior Vice 1999 225,000 64,032 ---- ---- 8,316
President 1998 212,000 42,826 ---- ---- ----
(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, 2000, 1999 and 1998 is $133,468, $133,612 and
$172,046, respectively, for Mr. R. Farmer and $38,687, $38,529 and $45,363,
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
($28,537, $32,958 and $18,134 in 2000, 1999 and 1998, respectively),
financial planning ($25,000, $15,000 and $20,000 in 2000, 1999 and 1998,
respectively) and other expense reimbursements.
(3) Represents compensation associated with the use of the Company's aircraft
($33,202), financial planning ($15,000) and other expense reimbursements.
<PAGE>
STOCK OPTIONS
The following table sets forth information regarding stock options granted to
the executives named in the Summary Compensation Table during fiscal 2000:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Shares Total Options Price Appreciation for
Underlying Granted to Exercise Option Term ($)
Options employees in Price Expiration --------------------
Name Granted Fiscal 2000 ($/Sh.) Date 5% 10%
-------------------- ---------- -------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Richard T. Farmer -- N/A N/A N/A N/A N/A
Robert J. Kohlhepp 15,000 2.0% 41.9583 7/29/09 395,610 1,003,061
Scott D. Farmer 15,000 2.0% 41.9583 7/29/09 395,610 1,003,061
Robert R. Buck 7,500 1.0% 41.9583 7/29/09 197,905 501,530
John S. Kean -- N/A N/A N/A N/A N/A
</TABLE>
The following table sets forth information regarding stock options exercised by
the executives named in the Summary Compensation Table during fiscal 2000 and
the value of in-the-money unexercised options held by them as of May 31, 2000:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of Unexercised In-
Unexercised the-Money Options at
Shares Options at May 31, 2000 May 31, 2000($)(1)
Acquired on Value Realized ---------------------------- ---------------------------
Name Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
------------------- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard T. Farmer 30,000 693,750 11,250 3,750 305,625 101,875
Robert J. Kohlhepp 24,000 634,500 15,000 216,000 522,125 6,353,122
Scott D. Farmer 23,250 731,841 58,950 154,800 2,168,009 3,434,073
Robert R. Buck 4,721 123,179 680 108,900 23,896 2,520,661
John S. Kean 13,500 465,657 ---- ---- ---- ----
<FN>
(1) Value is calculated as the difference between the fair market value of the
Common Stock on May 31, 2000 ($44.00 per share) and the exercise price of
the options.
</FN>
</TABLE>
<PAGE>
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. Total shareholder return was based on
the increase in the price of the stock and assumed reinvestment 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 PEER
(QUARTER END) CORP 500 INDEX GROUP
------------------ ------ --------- -----
MAY, 95 100 100 100
AUG, 95 109 106 111
NOV, 95 133 115 119
FEB, 96 141 122 134
MAY, 96 156 128 156
AUG, 96 158 126 146
NOV, 96 177 147 162
FEB, 97 157 154 150
MAY, 97 182 166 149
AUG, 97 204 177 165
NOV, 97 228 189 178
FEB, 98 250 208 202
MAY, 98 269 217 186
AUG, 98 240 191 192
NOV, 98 324 233 201
FEB, 99 418 249 199
MAY, 99 375 263 182
AUG, 99 303 267 156
NOV, 99 271 282 135
FEB, 00 237 278 78
MAY, 00 392 290 92
<PAGE>
SHAREHOLDER PROPOSALS FOR NEXT YEAR
Shareholders who desire to have proposals included in the Notice for the 2001
Shareholders' Meeting must submit their proposals in writing to Cintas at its
offices on or before May 8, 2001.
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 2001 Shareholders' Meeting, it
must be received prior to July 21, 2001.
OTHER MATTERS
Cintas knows of no other matters to be presented at the meeting other than those
specified in the Notice.
QUESTIONS?
If you have questions or need more information about the 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.
<PAGE>
APPENDIX A
CINTAS CORPORATION
AUDIT COMMITTEE CHARTER
Organization
The Audit Committee of the Board of Directors shall be comprised of three
directors who are independent of management and the Company.
Statement of Policy
The Audit Committee shall provide assistance to the directors in fulfilling
their responsibility to the shareholders, potential shareholders, and investment
community relating to corporate accounting, reporting practices of the Company,
and the quality and integrity of financial reports of the Company. In so doing,
it is the responsibility of the Audit Committee to maintain free and open
communication between the directors, the independent auditors, and the financial
management of the Company.
Responsibilities
o Obtain the full Board of Directors' approval of this Charter and review and
reassess this Charter as conditions dictate.
o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Company and its divisions
and subsidiaries.
o Have a clear understanding with the independent auditors that they are
ultimately accountable to the Board of Directors and the Audit Committee,
as the shareholders' representatives, who have the ultimate authority in
deciding to engage, evaluate, and if appropriate, terminate their services.
o Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit for the current year and the
procedures to be utilized.
o Review with the independent auditors and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the Company, and elicit any recommendations for the improvement
of such internal controls or particular areas where new or more detailed
controls or procedures are desirable.
o Review reports received from regulators and other legal and regulatory
matters that may have a material effect on the financial statements or
related Company compliance policies.
o Inquire of management and the independent auditors about significant risks
or exposures and assess the steps management has taken to minimize such
risks to the Company.
o The Chairman of the Audit Committee shall review the quarterly financial
statements with financial management and the independent auditors prior to
the filing of the Form 10-Q to understand the findings and opinions as to
disclosure and content of the financial statements.
o Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders.
o Provide sufficient opportunity for the independent auditors to meet with
the members of the Audit Committee without members of management present.
<PAGE>
o Report the results of the annual audit to the Board of Directors.
o On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional services
as required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees.
o Discuss the matters discussed at each committee meeting with, the Board of
Directors.
o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
o Review the Company's disclosure in the proxy statement for its annual
meeting of shareholders that describes that the Committee has satisfied its
responsibilities under this Charter for the prior year. In addition,
include a copy of this Charter in the annual report to shareholders or the
proxy statement at least triennially or the year after any significant
amendment to the Charter.
<PAGE>
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 25, 2000, at 10:00 a.m. (Eastern Time) at the Company's
Headquarters, 6800 Cintas Boulevard, Cincinnati, Ohio 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 seven.
FOR AGAINST ABSTAIN
2. Authority to elect seven nominees listed below.
FOR all nominees listed below (except WITHHOLD AUTHORITY to vote for all
as 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
WRITE THE NAME OF ANY NOMINEE(S) FOR
----------------------------------
WHOM AUTHORITY TO VOTE IS WITHHELD
----------------------------------
(Continued on other side)
<PAGE>
BACK OF CARD
3. Amendment to Articles of Incorporation to increase authorized shares of
Common Stock to 425 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 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.
-----------------------------, 2000 ----------------------------------------
----------------------------- 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
