1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended Commission File
February 26, 2000 Number 1-8504
UNIFIRST CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2103460
(State of Incorporation) (IRS Employer ID Number)
68 Jonspin Road
Wilmington, Massachusetts 01887
(Address of principal executive offices)
Registrant's telephone number: (978) 658-8888
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of the registrant's Common Stock and Class B
Common Stock as of March 30, 2000 were 9,408,134 and 10,255,744 respectively.
2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) February 26, August 28, February 27,
2000 1999* 1999
- ---------------------------------------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash $ 2,405,000 $ 2,912,000 $ 6,932,000
Receivables 56,591,000 51,786,000 48,242,000
Inventories 24,682,000 27,194,000 29,024,000
Rental merchandise in service 57,573,000 55,631,000 52,372,000
Prepaid expenses 212,000 199,000 259,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total current assets 141,463,000 137,722,000 136,829,000
- ---------------------------------------------------------------------------------------------------------------------------------
Property and equipment:
Land, buildings and leasehold improvements 187,345,000 174,979,000 165,287,000
Machinery and equipment 198,956,000 190,722,000 179,351,000
Motor vehicles 49,898,000 49,396,000 45,254,000
- ---------------------------------------------------------------------------------------------------------------------------------
436,199,000 415,097,000 389,892,000
Less - accumulated depreciation 184,355,000 172,912,000 161,476,000
- ---------------------------------------------------------------------------------------------------------------------------------
251,844,000 242,185,000 228,416,000
- ---------------------------------------------------------------------------------------------------------------------------------
Other assets 87,481,000 85,720,000 80,452,000
- ---------------------------------------------------------------------------------------------------------------------------------
$480,788,000 $465,627,000 $445,697,000
=================================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term obligations $ 1,435,000 $ 1,911,000 $ 523,000
Notes payable 2,187,000 2,331,000 2,488,000
Accounts payable 18,125,000 17,659,000 18,572,000
Accrued liabilities 51,287,000 46,659,000 50,698,000
Accrued and deferred income taxes 10,078,000 7,754,000 3,865,000
- ---------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 83,112,000 76,314,000 76,146,000
- ---------------------------------------------------------------------------------------------------------------------------------
Long-term obligations, net of current maturities 113,977,000 111,194,000 88,602,000
Deferred income taxes 21,111,000 20,686,000 19,219,000
- ---------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, $1.00 par value; 2,000,000
shares authorized; none issued -- -- --
Common stock, $.10 par value; 30,000,000
shares authorized; issued
10,499,634 shares 1,050,000 1,050,000 1,022,000
Class B Common stock, $.10 par value; 20,000,000
shares authorized; issued and outstanding
10,255,744 shares 1,026,000 1,026,000 1,028,000
Treasury stock, 1,091,500 shares, at cost (20,049,000) (16,583,000) (5,631,000)
Capital surplus 12,438,000 12,438,000 12,464,000
Retained earnings 269,534,000 261,450,000 254,981,000
Accumulated other comprehensive income (1,411,000) (1,948,000) (2,134,000)
- ---------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 262,588,000 257,433,000 261,730,000
- ---------------------------------------------------------------------------------------------------------------------------------
$480,788,000 $465,627,000 $445,697,000
=================================================================================================================================
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Twenty-six Twenty-six Thirteen Thirteen
weeks ended weeks ended weeks ended weeks ended
February 26, February 27, February 26, February 27,
2000 1999 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Revenues $262,073,000 $236,401,000 $130,283,000 $120,066,000
- ----------------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Operating costs 164,523,000 140,808,000 82,684,000 74,320,000
Selling and administrative expenses 62,011,000 52,853,000 30,988,000 25,864,000
Depreciation and amortization 17,076,000 15,015,000 8,545,000 7,757,000
- ----------------------------------------------------------------------------------------------------------------------------------
243,610,000 208,676,000 122,217,000 107,941,000
- ----------------------------------------------------------------------------------------------------------------------------------
Income from operations 18,463,000 27,725,000 8,066,000 12,125,000
- ----------------------------------------------------------------------------------------------------------------------------------
Interest expense (income):
Interest expense 3,458,000 1,978,000 1,749,000 1,266,000
Interest income (165,000) (86,000) (46,000) (28,000)
- ----------------------------------------------------------------------------------------------------------------------------------
3,293,000 1,892,000 1,703,000 1,238,000
- ----------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 15,170,000 25,833,000 6,363,000 10,887,000
Provision for income taxes 5,765,000 9,558,000 2,418,000 4,028,000
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $9,405,000 $16,275,000 $3,945,000 $6,859,000
==================================================================================================================================
Weighted average number of shares outstanding -
basic & diluted 19,676,735 20,653,305 19,663,878 20,691,018
==================================================================================================================================
Net income per share - basic & diluted $0.48 $0.79 $0.20 $0.33
==================================================================================================================================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
TWENTY-SIX TWENTY-SIX
WEEKS ENDED WEEKS ENDED
FEBRUARY 26, FEBRUARY 27,
2000 1999
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net Income $9,405,000 $16,275,000
Adjustments, net of acquisitions:
Depreciation 13,805,000 12,321,000
Amortization of other assets 3,271,000 2,694,000
Receivables (4,720,000) (3,068,000)
Inventories 2,559,000 1,446,000
Rental merchandise in service (1,740,000) (5,382,000)
Prepaid expenses (12,000) (19,000)
Accounts payable 341,000 3,920,000
Accrued liabilities 4,608,000 5,363,000
Accrued and deferred income taxes 2,291,000 1,237,000
Deferred income taxes 404,000 854,000
- ---------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 30,212,000 35,641,000
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired (533,000) (42,924,000)
Capital expenditures (23,160,000) (19,003,000)
Other assets, net (3,308,000) (6,422,000)
- ---------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (27,001,000) (68,349,000)
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase in debt 3,661,000 42,275,000
Reduction of debt (2,592,000) (1,088,000)
Repurchase of common stock (3,466,000) (5,631,000)
Cash dividends paid or payable (1,321,000) (1,246,000)
- ---------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (3,718,000) 34,310,000
- ---------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash (507,000) 1,602,000
Cash at beginning of period 2,912,000 5,330,000
===========================================================================================================================
Cash at end of period $2,405,000 $6,932,000
===========================================================================================================================
Supplemental disclosure of cash flow information:
Interest paid $3,496,000 $1,391,000
Income taxes paid 3,014,000 7,360,000
===========================================================================================================================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 26, 2000
1. These condensed consolidated financial statements have been prepared by
the Company without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations; however, the
Company believes that the information furnished reflects all adjustments
(consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary to a fair statement of results for the
interim period. It is suggested that these condensed consolidated
financial statements should be read in conjunction with the financial
statements and the notes, thereto, included in the Company's latest annual
report on Form 10-K. Results for an interim period are not indicative of
any future interim periods or for an entire fiscal year.
2. From time to time, the Company is subject to legal proceedings and claims
arising from the conduct of its business operations, including legal
proceedings and claims relating to personal injury, customer contract,
employment and environmental matters. In the opinion of management, such
proceedings and claims are not likely to result in losses which would have
a material adverse effect upon the financial position or results of
operations of the Company.
3. The components of comprehensive income for the twenty-six and thirteen
week periods ended February 26, 2000 and February 27, 1999 were as
follows:
Twenty-six Twenty-six Thirteen Thirteen
weeks ended weeks ended weeks ended weeks ended
February 26, February 27, February 26, February 27,
2000 1999 2000 1999
- ----------------------------------------------------------------------------------------------------------------------
Net income $9,405,000 $16,275,000 $3,945,000 $6,859,000
Other comprehensive income:
Foreign currency translation adjustments 537,000 573,000 452,000 281,000
-------------------------------------------------------------------------
Comprehensive income $9,942,000 $16,848,000 $4,397,000 $7,140,000
=========================================================================
4. Net income per share is calculated using the weighted average number of
common and dilutive potential common shares outstanding during the year.
Anti-dilutive shares of 57,000 for the twenty-six weeks ended February 26,
2000 have been excluded from the weighted average number of common and
dilutive potential common shares outstanding.
6
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
FOR THE TWENTY-SIX WEEKS ENDED FEBRUARY 26, 2000
RESULTS OF OPERATIONS
TWENTY-SIX WEEKS OF FISCAL 2000 COMPARED WITH TWENTY-SIX WEEKS OF FISCAL 1999
Revenues. Revenues for the first twenty-six weeks of fiscal 2000 increased $25.7
million or 10.9% to $262.1 million as compared to $236.4 million for the first
twenty-six weeks of fiscal 1999. This increase can be attributed to growth from
existing operations (5.2%), acquisitions (4.7%) and price increases (1.0%).
Growth from existing operations was primarily from the conventional uniform
rental business (4.5%), and from the nuclear garment services business (0.7%).
The increase in revenues from acquisitions resulted from seven acquisitions made
in fiscal 1999 and one minor acquisition made in September 1999.
Operating Costs. Operating costs increased to $164.5 million for the first half
of fiscal 2000 as compared with $140.8 million for the same period of fiscal
1999 as a result of costs associated with increased revenues. As a percentage of
revenues, operating costs increased to 62.8% from 59.6% for these periods,
primarily due to higher labor costs. The Company also continues to assimilate
last year's acquisitions, deal with ongoing increases in fuel and other
operating costs and is being impacted by start up costs associated with the
construction of a new garment manufacturing plant in Mexico. There also
continues to be a negative impact from a comparative year-to-year increase in
merchandise expense. Last year the Company realized a benefit compared to this
year due to a change made effective July, 1998 in the estimated lives and
related amortization periods for rental merchandise in service, from primarily
12 months to primarily 15 months, which is more consistent with their respective
useful lives (although the Company believes its principal publicly-held
competitors amortize their garments over an average of 15 to 18 months).
Selling and Administrative Expenses. The Company's selling and administrative
expenses increased to $62.0 million, or 23.7% of revenues, for the first
twenty-six weeks of fiscal 2000 as compared with $52.9 million, or 22.4% of
revenues, for the same period in fiscal 1999. This increase was due primarily to
increased costs for professional sales training, national, catalog and internet
sales to support the Company's current and future revenue growth. The Company
also incurred increased costs to upgrade its Information Systems.
Depreciation and Amortization. The Company's depreciation and amortization
expense increased to $17.1 million, or 6.5% of revenues, for the first half of
fiscal 2000 as compared with $15.0 million, or 6.3% of revenues, for the same
period in fiscal 1999. This increase was due primarily to increased amortization
costs due to acquisitions and increased capital expenditures for information
systems hardware and software to upgrade certain Company-wide systems.
Net Interest Expense. Net interest expense was $3.3 million, or 1.3% of
revenues, for the first twenty-six weeks of fiscal 2000 as compared to $1.9
million, or 0.8% of revenues, for the same period in fiscal 1999. The increase
is primarily attributable to higher debt levels in the first half of fiscal
2000.
Income Taxes. The Company's effective income tax rate was 38.0% for the first
half of fiscal 2000 and 37.0% for the same period in fiscal 1999. The increase
is due primarily to higher state income taxes.
7
THIRTEEN WEEKS ENDED FEBRUARY 26, 2000 COMPARED TO THIRTEEN WEEKS ENDED
FEBRUARY 27, 1999
Revenues. Fiscal 2000 second quarter revenues increased $10.2 million or 8.5% to
$130.3 million as compared with $120.1 million for the fiscal 1999 second
quarter. This increase can be attributed to growth from existing operations
(4.8%), acquisitions (2.7%) and price increases (1.0%). Growth from existing
operations was primarily from the conventional uniform rental business (4.1%)
and from the nuclear garment services business (0.7%). The increase in revenues
from acquisitions resulted from five acquisitions made in fiscal 1999 and one
acquisition made in fiscal 2000.
Operating Costs. Operating costs increased to $82.7 million for the second
quarter of fiscal 2000 as compared with $74.3 million for the same period of
fiscal 1999 as a result of costs associated with increased revenues. As a
percentage of revenues, operating costs increased to 63.5% from 61.9% for these
periods primarily due to higher labor costs. The Company also continues to
assimilate last year's acquisitions, deal with ongoing increases in fuel and
other operating costs and is being impacted by start up costs associated with
the construction of a new garment manufacturing plant in Mexico. The impact of
the change in estimated service lives and related amortization periods for
rental merchandise in service, described in the year to date discussion above,
had less of an impact in the quarter to quarter comparison.
Selling and Administrative Expenses. The Company's selling and administrative
expenses increased to $31.0 million, or 23.8% of revenues, for the second
quarter of fiscal 2000 as compared with $25.9 million, or 21.5% of revenues for
the same period in fiscal 1999. This increase was due primarily to increased
costs for professional sales training, national, catalog and internet sales to
support the Company's current and future revenue growth. The Company also
incurred increased costs to upgrade its Information Systems.
Depreciation and Amortization. The Company's depreciation and amortization
expense increased to $8.5 million, or 6.5% of revenues, for the second quarter
of fiscal 2000 as compared with $7.7 million, or 6.4% of revenues, for the same
period in fiscal 1999. This increase was due primarily to increased amortization
and depreciation costs due to acquisitions.
Net Interest Expense. Net interest expense was $1.7 million, or 1.3% of
revenues, for the second quarter of fiscal 2000 as compared with $1.2 million,
or 1.0% of revenues, for the same period in fiscal 1999. The increase is
primarily attributable to higher debt levels in the fiscal 2000 second quarter.
Income Taxes. The Company's effective income tax rate was 38.0% for the second
quarter of fiscal 2000 and 37.0% for the same period in fiscal 1999. The
increase is due primarily to higher state income taxes.
8
LIQUIDITY AND CAPITAL RESOURCES
Shareholders' equity at February 26, 2000 was $262.6 million, or 69.5% of total
capitalization.
During the twenty-six weeks ended February 26, 2000 net cash provided by
operating activities ($30.2 million) was primarily used for capital expenditures
($23.2 million), repurchase of common stock ($3.5 million) and debt repayment
($2.6 million).
The Company had $2.4 million in cash and $11.7 million available on its $120
million unsecured line of credit with three banks as of February 26, 2000. This
agreement contains, among other things, a provision regarding net worth, which
the Company was out of compliance with as of February 26, 2000. The Company has
discussed this with the banks and expects to receive a waiver. The Company
believes its generated cash from operations and its borrowing capacity will
adequately cover its foreseeable capital requirements.
SEASONALITY
Historically, the Company's revenues and operating results have varied from
quarter to quarter and are expected to continue to fluctuate in the future.
These fluctuations have been due to a number of factors, including: general
economic conditions in the Company's markets; the timing of acquisitions and of
commencing start-up operations and related costs; the effectiveness of
integrating acquired businesses and start-up operations; the timing of nuclear
plant outages; capital expenditures; seasonal rental and purchasing patterns of
the Company's customers; and price changes in response to competitive factors.
In addition, the Company's operating results historically have been lower during
the second and fourth fiscal quarters than during the other quarters of the
fiscal year. The operating results for any historical quarter are not
necessarily indicative of the results to be expected for an entire fiscal year
or any other interim periods.
EFFECTS OF INFLATION
Inflation has had the effect of increasing the reported amounts of the Company's
revenues and costs. The Company uses the last-in, first-out (LIFO) method to
value a significant portion of inventories. This method tends to reduce the
amount of income due to inflation included in the Company's results of
operations. The Company believes that, through increases in its prices and
productivity improvements, it has been able to recover increases in costs and
expenses attributable to inflation.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
Forward looking statements contained in this quarterly report are subject to the
safe harbor created by the Private Securities Litigation Reform Act of 1995 and
are highly dependent upon a variety of important factors that could cause actual
results to differ materially from those reflected in such forward looking
statements. Such factors include those indicated in the section entitled "Risk
Factors" in the Company's Prospectus, dated March 18, 1998, as well as the risks
and uncertainties relating to the centralization of certain of the Company's
operations at its Owensboro, KY distribution facility and the Company's ability
to control manufacturing and operating costs. When used in this quarterly
report, the words "intend," "anticipate," "believe," "estimate," and "expect"
and similar expressions as they relate to the Company are included to identify
such forward looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
9
For information regarding quantitative and qualitative disclosures about market
risk, see the Company's discussion under Item 7A of its Annual Report on Form
10-K for the fiscal year ended August 28, 1999. Between August 28, 1999 and
February 26, 2000, there were no material changes in the Company's market risk.
10
PART II - OTHER INFORMATION
FORM 10-Q
UNIFIRST CORPORATION AND SUBSIDIARIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders was held on January 11, 2000. Aldo
Croatti and Albert Cohen were reelected to the Board of Directors. With respect
to Mr. Croatti, 7,638,527 shares of Common Stock and 10,254,864 shares of Class
B Common Stock were voted for his election and 327,596 shares of Common Stock
were voted against his election. With respect to Mr. Cohen, 7,638,527 shares of
Common Stock were voted for his election and 327,596 shares of Common Stock were
voted against his election. The terms of office of Ms. Cynthia Croatti and
Messrs. Ronald D. Croatti, Donald J. Evans and Reynold L. Hoover continued after
the meeting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
(10.1) UniFirst Corporation Profit Sharing Plan, as amended
effective January 1, 2000.
(27) Financial Data Schedule
(b) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
UNIFIRST CORPORATION
/s/ RONALD D. CROATTI
---------------------
Ronald D. Croatti
President and Chief Executive Officer
Date: April 11, 2000
/s/ JOHN B. BARTLETT
--------------------
John B. Bartlett
Senior Vice President
and Chief Financial Officer
1
EXHIBIT 10.1
AMENDMENT TO THE
UNIFIRST CORPORATION PROFIT SHARING PLAN
WHEREAS, Unifirst Corporation (the "Employer") established the Unifirst
Corporation Profit Sharing Plan (the "Plan") to provide retirement income and
other benefits for certain of its employees and their beneficiaries; and
WHEREAS, Section 401(k) of the Internal Revenue Code (the "Code") has been
amended, effective for years after 1999, to permit qualified 401(k) plans such
as the Plan to adopt certain "safe harbor" provisions which will make the Plan
easier to administer; and
WHEREAS, the Employer has determined to amend the Plan so that it will include
a "safe harbor" matching contribution feature in accordance with Code Section
401(k)(12)(B).
NOW, THEREFORE, effective as of January 1, 2000 the Plan is amended as follows:
1. The first, second, and third "bullet" clauses of Section 3.2 are amended to
read as follows:
- -- has completed at least one year of service under the elapsed time method
described in Section 2.2 before that last day of the plan year, except that
this condition is not a requirement to be allocated Code Section
401(k)(12)(B) matching contributions described in Section 5.2
- -- has been paid for 1,000 or more hours of service in the plan year,
except that:
-- effective as of January 1, 1994 this requirement need not be met if
the participant's status as an active employee ended during the plan
year due to retirement on or after normal retirement age, on account
of permanent and total disability, or death; and
-- effective as of January 1, 2000, this condition is not a requirement
to be allocated Code Section 401(k)(12)(B) matching contributions
described in Section 5.2.
- -- is employed or has "employment-type credit" and is a member of an eligible
employee class on the last day of such plan year, except that
1
2
this requirement need not be met if the participant was a member of
an eligible class and this status ended during the plan year due to
retirement on or after normal retirement age, on account of permanent
and total disability, or death; and
effective as of January 1, 2000, this condition is not a requirement
to be allocated Code Section 401(k)(12)(B) matching contributions
described in Section 5.2.
2. Section 4.1, which describes the sources of contributions to the Plan, is
amended by striking the first seven lines and replacing them with the
following eight lines so that it is clear that the Employer will contribute
Code Section 401(k)(12)(B) matching contributions to the Plan in addition
to such discretionary profit sharing contributions as its Board may
authorize:
4.1 SOURCES OF CONTRIBUTIONS. Contributions to the plan will be from the
following sources:
- -- The employer,
-- which will deposit amounts according to participants' Code Section
401(k) compensation reduction elections; and
-- which will make matching contributions to participants' account in
accordance with Code Section 401(k)(12)(B) and as described more fully in
Section 5.2; and
-- which may contribute additional discretionary profit sharing
amounts, if approved by its board, which amounts will be shared according to
ratios based on compensation and excess compensation, as described in Section
5.2; and
3. In Section 5.2 the first and second "bullet" clauses are amended and a new
third "bullet clause" is added:
- -- Amount of additional employer contributions. For each plan year each
participating employer in the plan will contribute the amount necessary to
make matching contributions to participants' accounts in accordance with
Code Section 401(k)(12)(B) and such additional "profit sharing" amounts as
its board of directors determines.
- -- Eligibility for additional employer matching and profit sharing
contributions and forfeitures. Code Section 401(k)(12)(B) matching
contributions and additional profit sharing employer contributions and
forfeitures will only be shared by participants who have satisfied the
special service requirements described in Section 3.2.
2
3
- -- How Code Section 401(k)(12)(B) matching contributions are to be allocated:
-- Step 1: in an amount equal to 100% of the participant's Code
section 401(k) deferrals, but not to exceed 3% of the participant's
compensation for the plan year; and
-- Step 2: in an amount equal to 50% of the participant's Code section
401(k) deferrals which exceed 3% of the participant's compensation for the plan
year, with no matching contribution required with respect to 401(k) deferrals
in excess of 5% of the participant's compensation for the plan year.
4. In Section 7.1 the first "bullet" clause is amended:
- -- A participant has fully vested interest at all times in his account
attributable to his own 401(k) deposits, to his 401(k)(12)(B) matching
contributions, to his "after-tax" employee contributions, if any, and to
his rollover accounts, if any.
5. Section 12.2 is amended by inserting the following new "bullet" clause as
the first clause:
- -- In any plan year in which the requirements of Code Section 401(k)(12) are
met, limitation of 401(k) percentages of highly compensated employees under
this Test 2 of this Section 12.2 is not required.
6. Sections 12.3 is amended by inserting the following new "bullet" clause as
the first clause:
- -- In any plan year in which the requirements of Code Section 401(k)(12) are
met, limitation of 401(m) percentages of highly compensated employees under
this Section 12.3 is not required.
IN WITNESS WHEREOF, this Amendment is adopted.
UniFirst Corporation
By: /s/ John B. Bartlett
----------------------
Title: Sr. Vice President
-------------------
Date: December 6, 1999
3
5
1,000
U.S. DOLLARS
6-MOS
AUG-26-2000
AUG-29-1999
FEB-26-2000
1
2,405
0
60,004
3,413
24,682
141,463
436,199
184,355
480,788
83,112
113,977
0
0
2,076
260,512
480,788
262,073
262,073
243,610
243,610
0
0
3,293
15,170
5,765
9,405
0
0
0
9,405
0.48
0.48
