unf-def14a_20200114.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

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Check the appropriate box:

 

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Definitive Proxy Statement

 

 

Definitive Additional Materials

 

 

Soliciting Material under §240.14a-12

UNIFIRST CORPORATION

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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UNIFIRST CORPORATION

68 Jonspin Road

Wilmington, Massachusetts 01887

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held On Tuesday, January 14, 2020

The Annual Meeting of Shareholders (the “Annual Meeting”) of UniFirst Corporation (the “Company”) will be held at the corporate offices of the Company located at 68 Jonspin Road, Wilmington, Massachusetts 01887 on Tuesday, January 14, 2020 at 10:00 A.M. for the following purposes:

 

1.

To elect three Class II Directors, nominated by the Board of Directors, each to serve for a term of three years until the 2023 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified;

 

2.

To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 29, 2020; and

 

3

To consider and act upon any other matters which may properly come before the meeting or any adjournment or postponement thereof.

Proposal 1 above relates solely to the election of three Class II Directors of the Company nominated by the Board of Directors and does not include any other matters relating to the election of directors, including, without limitation, the election of directors nominated by any shareholder of the Company.

The Board of Directors has fixed the close of business on November 15, 2019 as the record date for the Annual Meeting. All shareholders of record on that date are entitled to receive notice of and to vote at the meeting.

Under Securities and Exchange Commission rules, the Company is providing access to the proxy materials for the Annual Meeting to shareholders via the Internet. Accordingly, you can access the proxy materials at www.edocumentview.com/UNF. Instructions for accessing the proxy materials and voting are described below and in the Annual Shareholder Meeting Notice (the “Notice”) that you received. Please review the proxy materials prior to voting.

 


Your vote is very important. If you hold your shares in your own name as a holder of record with our transfer agent, you may vote by one of the following methods:

 

1.

BY INTERNET, by going to the Internet web address www.envisionreports.com/UNF and following the instructions on the Notice you received and on the website. In order to vote via the Internet, you must use the numbers provided in the shaded bar of the Notice. Proxies submitted by the Internet must be received by 11:59 P.M., Eastern Time, on January 13, 2020.

 

2.

BY TELEPHONE, if you received printed copies of the proxy materials by mail in accordance with the instructions in the Notice, by dialing 1-800-652-VOTE (8683) within the United States, U.S. territories, and Canada any time on a touch tone telephone and following the instructions provided by the recorded message. In order to vote via telephone, you must use the numbers provided in the proxy card. Proxies submitted by telephone must be received by 11:59 P.M., Eastern Time, on January 13, 2020.

 

3.

BY PROXY CARD, if you received printed copies of the proxy materials by mail in accordance with the instructions in the Notice, by completing, dating, signing, and returning the proxy card in the postage-prepaid envelope provided. If you vote by Internet or telephone, please do not mail your proxy card. Your proxy card must be received prior to the Annual Meeting.

If you are a stockholder of record and attend the Annual Meeting, you may vote in person by ballot even if you have previously voted by Internet, by telephone or by returning your proxy card. Any proxy may be revoked by delivery of a later dated proxy.

If your shares are held by a broker, bank or other nominee in street name, please follow the instructions you receive from your broker, bank or other nominee to have your shares voted. If your shares are held by a broker, bank or other nominee in street name and you wish to vote in person at the Annual Meeting, you will need to obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of record prior to attending the meeting and voting.

 

 

By Order of the Board of Directors,

 

 

 

SCOTT C. CHASE, Secretary

 

Wilmington, Massachusetts

December 5, 2019

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE REVIEW THE PROXY MATERIALS, INCLUDING OUR 2019 ANNUAL REPORT ON FORM 10-K, AT WWW.EDOCUMENTVIEW.COM/UNF AND VOTE BY INTERNET AT WWW.ENVISIONREPORTS.COM/UNF, BY TELEPHONE OR BY PROXY CARD IN ACCORDANCE WITH THE INSTRUCTIONS IN THIS PROXY STATEMENT AND THE NOTICE. IF YOU ATTEND THE MEETING, YOU MAY CONTINUE TO HAVE YOUR SHARES VOTED AS INSTRUCTED IN THE PROXY OR YOU MAY WITHDRAW YOUR PROXY AT THE MEETING AND VOTE YOUR SHARES IN PERSON. IF YOUR SHARES ARE HELD IN STREET NAME, PLEASE FOLLOW THE INSTRUCTIONS YOU RECEIVE FROM YOUR BROKER, BANK OR OTHER NOMINEE TO HAVE YOUR SHARES VOTED.

Important

Please note that due to security procedures, if you decide to attend the Annual Meeting, you will be required to show a form of picture identification to gain access to the offices of UniFirst Corporation. Please contact the Company’s Investor Relations group at (978) 658-8888 if you plan to attend the Annual Meeting.

 

 

 


UNIFIRST CORPORATION

68 Jonspin Road

Wilmington, Massachusetts 01887

 

 

PROXY STATEMENT FOR 2020 ANNUAL MEETING OF SHAREHOLDERS

to be held on January 14, 2020

at 10:00 A.M. at the corporate offices of UniFirst Corporation

located at 68 Jonspin Road,

Wilmington, Massachusetts 01887

 

General Information

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of UniFirst Corporation (the “Company”, “UniFirst”, “we”, “our” or “us”) for use at the 2020 Annual Meeting of Shareholders to be held on Tuesday, January 14, 2020 (the “Annual Meeting”) and at any adjournments or postponements thereof. This Proxy Statement and the accompanying Notice of Annual Meeting of Shareholders are first being made available to shareholders on or about December 5, 2020.

The Board of Directors has fixed the close of business on November 15, 2019 as the “Record Date” for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. As of the close of business on the Record Date, there were outstanding and entitled to vote 15,301,836 shares of common stock, par value $0.10 per share (“Common Stock”), and 3,643,009 shares of Class B common stock, par value $0.10 per share (“Class B Common Stock”). Transferees after such date will not be entitled to vote at the Annual Meeting. Each share of Common Stock is entitled to one vote per share. Each share of Class B Common Stock is entitled to ten votes per share.

As more fully described in this Proxy Statement, the purposes of the Annual Meeting are (1) to elect three Class II Directors nominated by the Board of Directors, each to serve for a term of three years until the 2023 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified; (2) to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 29, 2020; and (3) to consider and act upon any other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof.

With respect to the election of three Class II Directors, a plurality of the votes cast by holders of shares of Common Stock and Class B Common Stock, voting together as a single class and represented in person or by proxy at the Annual Meeting and entitled to vote thereon, is necessary to elect Steven S. Sintros, Thomas S. Postek and Raymond C. Zemlin. Votes may be cast “For” or “Withhold” with respect to the election of each of Messrs. Sintros, Postek and Zemlin. With respect to the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm and each other matter expected to be voted upon at the Annual Meeting, the affirmative vote of a majority of the votes cast by holders of shares of Common Stock and Class B Common Stock, voting together as a single class and represented in person or by proxy at the Annual Meeting and entitled to vote thereon, is required for approval. Votes may be cast “For”, “Against” or “Abstain” on the proposal to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 29, 2020.

The representation in person or by proxy of at least a majority of all Common Stock and Class B Common Stock issued, outstanding and entitled to vote at the Annual Meeting shall constitute a quorum for the transaction of business. Consistent with applicable law, the Company intends to count abstentions and broker non-votes for the purpose of determining the presence or absence of a quorum for the transaction of business. A broker “non-vote” refers to shares held by a broker or nominee that does not have the authority, either express or discretionary, to vote on a particular matter. Any shares not voted (whether by abstention, broker non-vote or otherwise) will have no impact on the election of Directors, except to the extent that in a contested election the failure to vote for an individual results in another individual receiving a larger percentage of votes, and no impact on the proposal to ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 29, 2020 or any other matter which may properly come before the Annual Meeting or any adjournment or postponement thereof.

3


Your vote is very important. If you hold your shares in your own name as a holder of record with our transfer agent, you may vote by one of the following methods:

 

1.

BY INTERNET, by going to the Internet web address www.envisionreports.com/UNF and following the instructions on the Annual Shareholder Meeting Notice (the “Notice”) you received and on the website. In order to vote via the Internet, you must use the numbers provided in the shaded bar of the Notice. Proxies submitted by the Internet must be received by 11:59 P.M., Eastern Time, on January 13, 2020.

 

2.

BY TELEPHONE, if you received printed copies of the proxy materials by mail in accordance with the instructions in the Notice, by dialing 1-800-652-VOTE (8683) within the United States, U.S. territories, and Canada any time on a touch tone telephone and following the instructions provided by the recorded message. In order to vote via telephone, you must use the numbers provided in the proxy card. Proxies submitted by telephone must be received by 11:59 P.M., Eastern Time, on January 13, 2020.

 

3.

BY PROXY CARD, if you received printed copies of the proxy materials by mail in accordance with the instructions in the Notice, by completing, dating, signing, and returning the proxy card in the postage-prepaid envelope provided. If you vote by Internet or telephone, please do not mail your proxy card. Your proxy card must be received prior to the Annual Meeting.

If you are a stockholder of record and you attend the Annual Meeting, you may vote in person by ballot even if you have previously voted by Internet, by telephone or by returning your proxy card. Any proxy may be revoked by delivery of a later dated proxy.

If your shares are held by a broker, bank or other nominee in street name, please follow the instructions you receive from your broker, bank or other nominee to have your shares voted. If your shares are held by a broker, bank or other nominee in street name and you wish to vote in person at the Annual Meeting, you will need to obtain a “legal proxy” from the broker, bank or other nominee that holds your shares of record prior to attending the meeting and voting.

Shares represented by a properly executed proxy received prior to the times above and not revoked will be voted at the Annual Meeting as directed on the proxy. If a properly executed proxy is submitted and no instructions are given, the proxy (1) will be voted “For” the election of each of the three nominees for Class II Director of the Company named in this Proxy Statement, each to serve for a term of three years until the 2023 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified, and (2) will be voted “For” the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 29, 2020. It is not anticipated that any matter other than those set forth in this Proxy Statement will be presented at the Annual Meeting. If other matters are presented, proxies will be voted in accordance with the discretion of the proxy holders. The Board of Directors recommends a vote (1) “For” the election of each of the three nominees for Class II Director of the Company named in this Proxy Statement, each to serve for a term of three years until the 2023 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified, and (2) “For” the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending August 29, 2020.

A shareholder of record may revoke a proxy at any time before it has been exercised by (1) filing a written revocation with the Secretary of the Company at the address of the Company set forth above, (2) properly casting a new vote via the Internet or by telephone at any time before the closure of the Internet or telephone voting facilities, (3) filing a duly executed proxy bearing a later date, or (4) appearing in person and voting by ballot at the Annual Meeting. Any shareholder of record as of the Record Date attending the Annual Meeting may vote in person whether or not a proxy has been previously given, but the presence (without further action) of a shareholder at the Annual Meeting will not constitute revocation of a previously given proxy. Any written revocation of a proxy should be sent to UniFirst Corporation, 68 Jonspin Road, Wilmington, MA 01887, Attention: Secretary prior to the vote at the Annual Meeting.

4


If your shares are held through a broker, bank or other nominee and you instructed your broker, bank or other nominee to vote your shares by following the instructions that the broker, bank or other nominee provided to you, you may change your voting instructions by submitting new voting instructions to your broker, bank or other nominee prior to the deadline for voting.

The expense of this proxy solicitation will be borne by the Company. In addition to the solicitation of proxies by mail, on the Internet websites www.edocumentview.com/UNF and www.envisionreports.com/UNF and by telephone, the Directors, officers and employees of the Company may also solicit proxies personally, by telephone or by mail without special compensation for such activities. The Company may also request persons, firms and corporations holding shares in their names or in the names of their nominees, which are beneficially owned by others, to send proxy material to and obtain proxies from such beneficial owners. The Company will reimburse such holders for their reasonable expenses in connection therewith.

The Company’s 2019 Annual Report to Shareholders, including the Company’s audited financial statements for the fiscal year ended August 31, 2019 (the “2019 fiscal year”), is being made available to shareholders concurrently with this Proxy Statement at www.edocumentview.com/UNF and www.envisionreports.com/UNF.

5


PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors of the Company is currently composed of seven members, divided into three classes of two, three and two directors, respectively. Generally, one class is elected each year at the Annual Meeting of Shareholders and the Directors in each class serve for a term of three years and until their respective successors are duly elected and qualified. As the term of one class expires, a successor class is elected at each Annual Meeting of Shareholders.

At the Annual Meeting, three Class II Directors will be elected to serve until the 2023 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified. The Board of Directors has nominated Steven S. Sintros, Thomas S. Postek and Raymond C. Zemlin as Class II Directors to be elected by holders of Common Stock and Class B Common Stock voting together as a single class (collectively, the “Nominees”).

The Board of Directors has determined that Messrs. Postek and Zemlin are “independent” under the rules of the New York Stock Exchange.

Unless otherwise instructed, the persons named in the proxy will vote the shares to which the proxy relates “FOR” the election of the Nominees to the Board of Directors. While the Company has no reason to believe that any of the Nominees will be unable to serve as a Director, in the event any of the Nominees should become unavailable to serve at the time of the Annual Meeting, it is the intention of the persons named in the proxy to vote such proxy for such other person or persons as the Board of Directors may recommend.

Vote Required

The affirmative vote of a plurality of the votes cast by holders of shares of Common Stock and Class B Common Stock, voting together as a single class and represented in person or by proxy at the Annual Meeting and entitled to vote thereon, is required to elect each of Steven S. Sintros, Thomas S. Postek and Raymond C. Zemlin.

Recommendation

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF STEVEN S. SINTROS, THOMAS S. POSTEK AND RAYMOND C. ZEMLIN AS CLASS II DIRECTORS.

Information Regarding Nominees and Directors

The following table sets forth certain information with respect to the three nominees for election as Class II Directors at the Annual Meeting and those continuing Directors of the Company whose terms expire at the Annual Meetings of Shareholders in 2021 and 2022, based on information furnished to the Company by each Director.

Class II Nominees for Election at 2020 Annual Meeting – Nominated to Serve for a Term that Expires in 2023

 

Age

 

Director

Since

 

 

 

 

 

 

 

 

 

 

Thomas S. Postek

 

77

 

2008

 

 

 

 

 

Mr. Postek has served as Director of the Company since 2008. He is a CFA charter holder and has been affiliated with CIBC Private Wealth Management and its predecessor. Mr. Postek was a member of the Board of Directors of Lawson Products, Inc., a publicly traded distributor of fasteners and other industrial supplies from 2005 to May 2019. From 1986 to 2001, Mr. Postek was a partner and principal of William Blair & Company, LLC. Mr. Postek brings to the Board of Directors extensive financial industry experience as well as a long-standing understanding of the Company’s industry and its competitors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven S. Sintros

 

46

 

2017

 

 

 

 

 

Mr. Sintros joined the Company in 2004. Mr. Sintros has served as our President and Chief Executive Officer and a Director since July 2017. He previously served as our Chief Financial Officer from January 2009 until January 2018. He has overall responsibility for management of the Company. Prior to taking the role of Chief Financial Officer, Mr. Sintros held various financial roles within the Company. Mr. Sintros brings to the Board his executive leadership experience and his significant knowledge of, and experience with, the Company and its industry.

 

 

 

 

6


 

 

 

 

 

 

 

 

 

 

Raymond C. Zemlin

 

64

 

2017

 

 

 

 

 

Mr. Zemlin has served as Director of the Company since January 2017 and as Chairman of the Board since October 2017. Mr. Zemlin was a partner in the law firm Goodwin Procter LLP until his retirement in September 2017. Mr. Zemlin joined Goodwin Procter LLP in 1980 and became a partner in 1988. While at Goodwin Procter LLP, he focused primarily on securities law, mergers and acquisitions, corporate finance and governance matters for public companies. Mr. Zemlin brings to the Board of Directors an in-depth knowledge of the Company and the industries in which it operates combined with over 35 years of legal expertise and experience.

 

 

 

 

 

Class I Continuing Directors - Term Expires in 2021

 

Age

 

Director

Since

 

 

 

 

 

 

 

 

 

 

Kathleen M. Camilli (1)

 

60

 

2012

 

 

 

 

 

Ms. Camilli has served as Director of the Company since January 2012. She is Founder and Principal of Camilli Economics, LLC, which provides clients, including corporations and investment organizations, with “real world” economic guidance for smart business and financial decisions. Ms. Camilli has served on the Board of Directors of AGF Management Limited, an investment management firm listed on the Toronto Stock Exchange, since June 2015. Ms. Camilli served on the Board of Directors of MASSBANK Corp., a bank holding company, from 2003 to 2008. Ms. Camilli brings to the Board of Directors her substantial experience as an economist for several of the leading financial institutions in the world.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Iandoli

 

74

 

2007

 

 

 

 

 

Mr. Iandoli has served as Director of the Company since 2007. He has been Chief Executive Officer of PEAK Technical Staffing USA, a provider of technical staffing, since August 2013. Mr. Iandoli previously served as Director of Strategic Staffing at PEAK Technical Staffing USA from 2007 to August 2013. He served for over 30 years as a senior executive and President of TAC Worldwide Companies, a contract labor firm serving the automotive and high-tech industries. Mr. Iandoli was President of the Executive Committee at the Larz Anderson Auto Museum from 2007 to January 2014. Mr. Iandoli brings to the Board of Directors his extensive executive leadership and operational experience.

 

 

 

 

 

Class III Continuing Directors - Term Expires in 2022

 

Age

 

Director

Since

 

 

 

 

 

 

 

 

 

 

Phillip L. Cohen (1)

 

88

 

2000

 

 

 

 

 

Mr. Cohen has served as Director of the Company since 2000. He was elected Chair of the Audit Committee in 2003. Mr. Cohen has more than 39 years of accounting, auditing and financial reporting experience in a broad range of industries. He was a partner with international accounting firm Arthur Andersen & Co. LLP from 1965 until his retirement in 1994 and has been a corporate director of several firms (Nortek, Inc., Bike Athletic Co., S/R Industries, Inc.), financial consultant and private trustee since that date. He is a former Director and Treasurer of the Greater Boston Convention and Visitors Bureau and is a Director of Kazmaier Associates, Inc. Mr. Cohen brings to the Board of Directors his extensive public accounting and financial industry experience.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cynthia Croatti

 

64

 

1995

 

 

 

 

 

Ms. Croatti joined the Company in 1980. She has served as Director since 1995, Treasurer since 1982 and Executive Vice President since 2001. In addition, she has primary responsibility for overseeing the human resources function of the Company. Ms. Croatti brings to the Board of Directors her detailed knowledge of the Company and the Company’s industry and her executive leadership experience.

 

 

 

 

 

 

(1)

The Company has designated Ms. Camilli and Mr. Cohen as the Directors to be elected by the holders of Common Stock voting separately as a single class.

7


Meetings of the Board of Directors and Its Committees

Board of Directors. The Company’s Board of Directors is divided into three classes, and the members of each class serve for staggered three-year terms. The Board is currently composed of two Class I Directors (Ms. Camilli and Mr. Iandoli), three Class II Directors (Messrs. Postek, Sintros and Zemlin) and two Class III Directors (Mr. Cohen and Ms. Croatti). The terms of the continuing Class I and III Directors will expire upon the election and qualification of Directors at the Annual Meeting of Shareholders in 2021 and 2022, respectively. At each Annual Meeting of Shareholders, Directors generally will be elected for a full term of three years to succeed those Directors whose terms are expiring. The Board of Directors held six meetings during the Company’s 2019 fiscal year.

Audit Committee. During the 2019 fiscal year, the Audit Committee consisted of Messrs. Cohen (Chair) and Postek and Ms. Camilli. The Audit Committee held five meetings during fiscal 2019. The Audit Committee is responsible for assisting the Board of Directors in its oversight of (1) the integrity of the Company’s financial statements and reporting process, (2) the qualifications, independence and performance of the Company’s independent registered public accounting firm, (3) the performance of the Company’s internal audit function, and (4) the Company’s compliance with legal and regulatory requirements. The Board of Directors and the Audit Committee have adopted a written Audit Committee Charter, which is reviewed annually and revised from time to time. A current copy of the Audit Committee Charter, as amended and restated, is available on the Company’s website at www.unifirst.com. The Board of Directors has determined that each of the members of the Audit Committee is “independent” under the rules of the New York Stock Exchange and the Securities and Exchange Commission (the “SEC”) and has determined that Phillip L. Cohen and Thomas S. Postek are “audit committee financial experts” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board of Directors and the Audit Committee have adopted a Statement of Corporate Policy and Code of Business Conduct, a current copy of which is available on the Company’s website at www.unifirst.com. The Company’s Audit Committee Complaint Procedure is also available on the Company’s website at www.unifirst.com.

Compensation Committee. During the 2019 fiscal year, the Compensation Committee consisted of Messrs. Iandoli (Chair), Cohen, Postek and Zemlin and Ms. Camilli. The Compensation Committee met on five occasions during fiscal 2019. The Compensation Committee is responsible for reviewing and approving the Company’s executive compensation program, recommending awards under the Company’s equity compensation plans and establishing the compensation for the Company’s Chief Executive Officer. The Board of Directors has determined that each of the members of the Compensation Committee is “independent” under the rules of the New York Stock Exchange. The Board of Directors and the Compensation Committee have adopted a written Compensation Committee Charter, which is reviewed annually and revised from time to time. A current copy of the Compensation Committee Charter is available on the Company’s website at www.unifirst.com.

Nominating and Corporate Governance Committee. During the 2019 fiscal year, the Nominating and Corporate Governance Committee consisted of Messrs. Zemlin (Chair), Cohen and Iandoli. The Nominating and Corporate Governance Committee met on four occasions in fiscal 2019. The Nominating and Corporate Governance Committee reviews and evaluates potential nominees for election or appointment to the Board of Directors and recommends such nominees to the full Board of Directors. The Board of Directors and the Nominating and Corporate Governance Committee have adopted a written Nominating and Corporate Governance Committee Charter, which is reviewed annually and revised from time to time. A current copy of the Nominating and Corporate Governance Committee Charter is available on the Company’s website at www.unifirst.com. The Board of Directors has determined that each of the members of the Nominating and Corporate Governance Committee is “independent” under the rules of the New York Stock Exchange. The Nominating and Corporate Governance Committee’s policy is to review and consider all Director candidates recommended by any of the Company’s Directors or shareholders. Such review and consideration is to proceed in accordance with the Company’s By-laws, Corporate Governance Guidelines and Policy Regarding New Director Nominations. See “Other Matters — Shareholder Proposals” for a summary of certain of these requirements. While neither the Board of Directors nor the Nominating and Corporate Governance Committee has a specific policy with respect to diversity, the Policy Regarding New Director Nominations provides that the Nominating and Corporate Governance Committee believes that director candidates should have a background that is complementary to that of the existing Board members so as to provide management and the Board of Directors with a diversity and freshness of views. The Nominating and Corporate Governance Committee is also responsible for developing and recommending to the Board of Directors a set of Corporate Governance Guidelines applicable to the Company and periodically reviewing such guidelines and recommending any changes to those guidelines to the Board of Directors. The current Corporate Governance Guidelines are available on the Company’s website at www.unifirst.com. In addition, the Nominating and Corporate Governance Committee maintains a Policy Regarding New Director Nominations, a current copy of which is available on the Company’s website at www.unifirst.com. Since this policy was adopted, there have been no material changes to the procedures by which shareholders may recommend nominees to the Board of Directors.

8


Each Director attended at least 75% of all of the meetings of the Board of Directors and of the committees of which the Director was a member held during the last fiscal year. Our Annual Meeting of Shareholders is generally held to coincide with one of the Board’s regularly scheduled meetings. Directors are strongly encouraged to attend the Annual Meeting. Each of the Directors attended the 2019 Annual Meeting of Shareholders.

Please note that information contained in our website is not incorporated by reference in, or considered to be a part of, this Proxy Statement.

Independence of Board Members

The Board of Directors has determined that each of Messrs. Cohen, Iandoli, Postek and Zemlin and Ms. Camilli is an “independent director” in accordance with the corporate governance rules of the New York Stock Exchange as a result of having no material relationship with the Company other than (1) serving as a Director and a Board Committee member, (2) receiving related fees as disclosed in this Proxy Statement and (3) having beneficial ownership of the Company’s securities as disclosed in the section of this Proxy Statement entitled - “Security Ownership of Management, Directors, Director Nominees and Principal Shareholders.”

Board Leadership Structure

Mr. Sintros serves as our President and Chief Executive Officer and as Director, and Mr. Zemlin, an independent Director, serves as Chairman of the Board. The Board of Directors believes that having independent Board leadership ensures strong independent oversight. Mr. Zemlin presides at all meetings of the Board of Directors and chairs the executive sessions of independent Directors, who regularly meet in executive sessions at which only independent Directors are present. Mr. Zemlin also provides input to Mr. Sintros and makes suggestions regarding meeting agendas. Mr. Zemlin, from time to time, provides feedback to the President and Chief Executive Officer on executive sessions and facilitates discussion among the independent Directors outside of meetings of the Board of Directors.

Risk Oversight

The Board of Directors is responsible for overseeing the Company’s risk assessment and management function, considering the Company’s major financial risk exposures and evaluating the steps that the Company’s management has taken to monitor and control such exposures. For example, the Board of Directors receives periodic reports from senior management on areas of material risk to the Company, including operational, financial, legal and regulatory and reputational risks. The Company believes that the leadership structure of the Board of Directors supports effective oversight of risk assessment and management.

Risk Considerations in the Company’s Compensation Programs

In connection with the Compensation Committee’s compensation reviews, the Compensation Committee assesses whether the Company’s compensation policies and practices are reasonably likely to have a material adverse effect on the Company. Based on its review, the Compensation Committee believes that the mix and design of the Company’s compensation plans and policies do not encourage employees to assume excessive risk and therefore are not reasonably likely to have a material adverse effect on the Company. In making this determination, the Compensation Committee considered a number of matters, including the following elements of the Company’s executive compensation plans and policies: (1) the Company sets performance goals that the Company believes are reasonable in light of past performance and market conditions; (2) the long-term vesting for the Company’s equity incentive awards helps to align the interests of management with those of the Company’s shareholders in respect of the Company’s long-term performance; (3) a range of levels of performance under the Company’s cash incentive bonus plans and its CEO incentive equity awards results in corresponding levels of compensation under those plans, rather than an “all-or-nothing” approach; and (4) achievement of the targets under the Company’s bonus plans is based on the satisfaction of corporate performance metrics such as revenues, earnings per share and adjusted operating margin, which serves to minimize the impact of excessive risk-taking by any individual member of management.

Evaluation Program of the Board of Directors and its Committees

In order to maintain the Company’s governance standards, the Board of Directors, and each committee thereof, is required to undertake annually a formal self-evaluation process. As part of this process, the members of the Board of Directors and each committee thereof evaluate a number of competencies, including, but not limited to, its structure, roles, processes, composition, development, dynamics, effectiveness and involvement.

9


Meetings of Independent Directors

The independent Directors of the Company meet in executive sessions outside the presence of management. The presiding Director for these meetings is Mr. Zemlin. Any interested party or shareholder who wishes to make their concerns known to the independent Directors may avail themselves of the same procedures provided below under the heading “Communication with the Board of Directors”. The Company’s Audit Committee Complaint Procedure is available on the Company’s website at www.unifirst.com.

Communication with the Board of Directors

Any interested party or shareholder who wishes to communicate with any of the Company’s Directors or the Board of Directors as a group, may do so by writing to the Board of Directors, or such individual Director(s) c/o Chief Financial Officer, UniFirst Corporation, 68 Jonspin Road, Wilmington, MA 01887. The Company recommends that all correspondence be sent via certified U.S. mail, return receipt requested. All correspondence received by the Chief Financial Officer will be forwarded by him promptly to the appropriate addressee(s).

Director Stock Ownership Policy

The Board of Directors has a stock ownership policy. Under the policy, Directors are expected to own shares of the Company’s stock having a value at least equal to four times the annual retainer fees for Directors. The policy provides a four-year phase-in period. The Board of Directors believes that this policy helps to align the interests of the Directors with those of the Company’s shareholders.

Policy Against Pledging Company Shares

The Board of Directors has a policy that generally prohibits a non-employee Director from pledging Company shares without the express prior approval of the Compensation Committee. Similarly, the policy also prohibits a non-employee Director from holding Company shares in a margin account or making such shares held in a brokerage account available as collateral for a margin feature. Based on information furnished to the Company by each non-employee Director, no Company shares owned by any non-employee Director are held in a margin account, serve as collateral for any loan or are subject to any pledge obligation.

10


Security Ownership of Management, Directors, Director Nominees and Principal Shareholders

The following table sets forth as of November 15, 2019 certain information concerning shares of Common Stock and Class B Common Stock beneficially owned by (i) each Director and Nominee, (ii) each of the named executive officers of the Company identified below under the heading “Summary Compensation Table” and (iii) all executive officers, Directors and Nominees as a group (including Michael A. Croatti and William M. Ross), in each case based solely on information furnished by such individuals. Except as otherwise specified, the named beneficial owner has sole voting and investment power. The information in the table reflects shares outstanding of the Company’s Common Stock and Class B Common Stock on November 15, 2019, restricted stock units which are vested as of, or will vest within 60 days after, November 15, 2019 and stock appreciation rights which are vested as of, or will vest within 60 days after, November 15, 2019 and are exercisable based on the closing price of the Company’s Common Stock on November 15, 2019.

 

Name of Beneficial Owner

 

Amount and

Nature of

Beneficial

Ownership

 

 

Percentage of

All Outstanding

Shares(1)

 

 

Percentage of

Voting

Power(1)

 

Steven S. Sintros(2)(6)

 

 

23,439

 

 

*

 

 

*

 

Shane F. O’Connor

 

 

 

 

 

 

 

 

 

Cynthia Croatti(2)(3)

 

 

12,000

 

 

*

 

 

*

 

David M. Katz(2)

 

 

8,000

 

 

*

 

 

*

 

David A. DiFillippo(2)(4)

 

 

22,220

 

 

*

 

 

*

 

Kathleen M. Camilli(2)(5)

 

 

5,382

 

 

*

 

 

*

 

Phillip L. Cohen(2)(5)

 

 

23,811

 

 

*

 

 

*

 

Michael Iandoli(2)(5)

 

 

9,903

 

 

*

 

 

*

 

Thomas S. Postek(2)(5)

 

 

40,359

 

 

*

 

 

*

 

Raymond C. Zemlin(2)(5)

 

 

4,988

 

 

*

 

 

*

 

All Directors, Nominees and executive officers as a

group(2)(7)

(12 persons)

 

 

208,103

 

 

1.1

 

 

1.2%

 

 

 

*

Less than 1%.

 

(1)

The percentages have been determined in accordance with Rule 13d-3 under the Exchange Act. As of November 15, 2019, a total of 18,944,845 shares of common stock were outstanding, of which 15,301,836 were shares of Common Stock entitled to one vote per share and 3,643,009 were shares of Class B Common Stock entitled to ten votes per share. Each share of Class B Common Stock is convertible into one share of Common Stock.

 

(2)

Includes 17,032 fully vested stock appreciation rights owned by Mr. Sintros, 8,000 fully vested stock appreciation rights owned by Mr. Katz, 12,000 fully vested stock appreciation rights owned by Ms. Croatti, 16,000 fully vested stock appreciation rights owned by Mr. DiFillippo, 9,276 fully vested stock appreciation rights owned by each of Messrs. Cohen and Postek, 4,903 fully vested stock appreciation rights owned by Mr. Iandoli and 2,988 fully vested stock appreciation rights owned by each of Ms. Camilli and Mr. Zemlin.

 

(3)

Ms. Croatti owns the fully vested stock appreciation rights listed in footnote 2. The information presented does not include any shares owned by Ms. Croatti’s children, as to which shares Ms. Croatti disclaims any beneficial interest. Ms. Croatti is a shareholder and director of each of the general partners of The Queue Limited Partnership and The Red Cat Limited Partnership, which respectively own 672,775 and 1,015,717 shares of Class B Common Stock. The general partners of The Queue Limited Partnership and The Red Cat Limited Partnership own 199 and 3 shares of Class B Common Stock, respectively. Ms. Croatti is trustee and a beneficiary of The Marie Croatti QTIP Trust, which owns 4,374 shares of Class B Common Stock. The information presented for Ms. Croatti does not include any shares owned by The Queue Limited Partnership, The Red Cat Limited Partnership, their respective general partners or The Marie Croatti QTIP Trust. In addition, the information presented for Ms. Croatti does not include any shares beneficially owned by certain other trusts for which Ms. Croatti is a trustee and certain entities for which Ms. Croatti serves as manager and which, in the aggregate, beneficially own 68,534 shares of Common Stock and 170,497 shares of Class B Common Stock.

 

(4)

Mr. DiFillippo owns 6,220 shares of Common Stock and the fully vested stock appreciation rights listed in footnote 2. In addition, the information presented for Mr. DiFillippo does not include 450 shares of Common Stock beneficially owned by his children, as to which shares Mr. DiFillippo disclaims any beneficial interest.

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(5)

Mr. Postek owns 31,083 shares of Common Stock and the fully vested stock appreciation rights listed in footnote 2. Mr. Cohen owns 14,535 shares of Common Stock and the fully vested stock appreciation rights listed in footnote 2. Mr. Iandoli owns 5,000 shares of Common Stock and the fully vested stock appreciation rights listed in footnote 2. Ms. Camilli owns 2,394 shares of Common Stock and the fully vested stock appreciation rights listed in footnote 2. Mr. Zemlin owns 2,000 shares of Common Stock with respect to which he has shared voting and investment power with his spouse and the fully vested stock appreciation rights listed in footnote 2.

 

(6)

Mr. Sintros owns 2,410 shares of Common Stock, the fully vested stock appreciation rights listed in footnote 2, 1,507 stock appreciation rights which will vest on November 27, 2019, 1,030 stock appreciation rights which will vest on December 14, 2019, 855 time-based restricted stock units which will vest on November 27, 2019 and 605 time-based restricted stock units which will vest on December 14, 2019.

 

(7)

Includes the Directors, Nominees and named executive officers set forth in the table above and the two other executive officers of the Company, Messrs. Croatti and Ross.

To the knowledge of the Company, the following are the only beneficial owners of more than 5% of the outstanding shares of Common Stock or Class B Common Stock of the Company as of November 15, 2019. All information presented is based solely on information provided by each beneficial owner.

 

Name of Beneficial Owner

 

Amount and

Nature of

Beneficial

Ownership

 

 

Percentage of

All

Outstanding

Shares(1)

 

 

Percentage of

Voting

Power(1)

 

BlackRock, Inc.(2)

 

 

2,245,583

 

 

 

11.9

%

 

 

4.3

%

Vanguard Group Inc.(3)

 

 

1,584,589

 

 

 

8.4

 

 

 

3.1

 

The Ronald D. Croatti Trust—1993(4)

 

 

1,098,770

 

 

 

5.8

 

 

 

21.2

 

The Red Cat Limited Partnership(5)

 

 

1,015,720

 

 

 

5.4

 

 

 

19.6

 

The Queue Limited Partnership(6)

 

 

672,974

 

 

 

3.6

 

 

 

13.0

 

Cecelia Levenstein(7)

 

 

542,907

 

 

 

2.9

 

 

 

8.8

 

 

 

(1)

The percentages have been determined in accordance with Rule 13d-3 under the Exchange Act. As of November 15, 2019, a total of 18,944,845 shares of common stock were outstanding, of which 15,301,836 were shares of Common Stock entitled to one vote per share and 3,643,009 were shares of Class B Common Stock entitled to ten votes per share. Each share of Class B Common Stock is convertible into one share of Common Stock.

 

(2)

BlackRock, Inc. beneficially owns shares of Common Stock representing 14.7% of such class. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. The Company has relied solely upon information contained in a Schedule 13F filed with the Securities and Exchange Commission by BlackRock, Inc. on November 8, 2019.

 

(3)

Vanguard Group Inc. beneficially owns shares of Common Stock representing 10.4% of such class. The address of Vanguard Group Inc. is 100 Vanguard Blvd., Malvern, PA 19355. The Company has relied solely upon information contained in a Schedule 13F filed with the Securities and Exchange Commission by Vanguard Group Inc. on November 14, 2019.

 

(4)

The Ronald D. Croatti Trust—1993 owns 1,098,770 shares of Class B Common Stock representing 30.2% of such class. Carol Croatti and Matthew Croatti are the trustees of The Ronald D. Croatti Trust—1993. The address of The Ronald D. Croatti Trust—1993 is c/o UniFirst Corporation, 68 Jonspin Road, Wilmington, MA 01887.

 

(5)

The Red Cat Limited Partnership owns 1,015,717 shares of Class B Common Stock representing 27.4% of such class. The general partner of The Red Cat Limited Partnership is Red Cat Management Associates, Inc., which has sole voting and dispositive power over the shares owned by The Red Cat Limited Partnership. The Ronald D. Croatti Trust—1993 and Cynthia Croatti are the sole shareholders and Carol Croatti and Cynthia Croatti are the directors of Red Cat Management Associates, Inc. In addition, Red Cat Management Associates, Inc. owns 3 shares of Class B Common Stock directly, which are included in the table above. The address of The Red Cat Limited Partnership is c/o UniFirst Corporation, 68 Jonspin Road, Wilmington, MA 01887.

12


 

(6)

The Queue Limited Partnership owns 672,775 shares of Class B Common Stock representing 18.5% of such class. The general partner of The Queue Limited Partnership is Queue Management Associates, Inc., which has sole voting and dispositive power over the shares owned by The Queue Limited Partnership. The Ronald D. Croatti Trust—1993, Cynthia Croatti and Cecelia Levenstein are the sole shareholders and Carol Croatti, Cynthia Croatti and Cecilia Levenstein are the directors of Queue Management Associates, Inc. In addition, Queue Management Associates, Inc. owns 199 shares of Class B Common Stock directly, which are included in the table above. All decisions by the directors of Queue Management Associates, Inc. must be made unanimously. The address of The Queue Limited Partnership is c/o UniFirst Corporation, 68 Jonspin Road, Wilmington, MA 01887.

 

(7)

Ms. Levenstein owns 444,349 shares of Class B Common Stock representing 12.2% of such class, and 98,558 shares of Common Stock. Ms. Levenstein is a shareholder and director of the general partner of The Queue Limited Partnership, which owns 672,775 shares of Class B Common Stock. The general partner of The Queue Limited Partnership owns 199 shares of Class B Common Stock directly. The information presented for Ms. Levenstein does not include any shares owned by The Queue Limited Partnership or Queue Management Associates, Inc. In addition, the information presented for Ms. Levenstein does not include any shares beneficially owned by certain other trusts for which Ms. Levenstein is a trustee and, which, in the aggregate, beneficially own 120,742 shares of Class B Common Stock. The address of Ms. Levenstein is c/o UniFirst Corporation, 68 Jonspin Road, Wilmington, MA 01887.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Compensation Committee of our Board of Directors, in collaboration with management, develops and implements our compensation policies. The Compensation Committee also reviews and establishes the compensation paid to our executive officers. We believe we provide an appropriate and competitive total compensation package to our executive officers through a combination of base salary, annual cash incentive bonuses, long-term equity incentive compensation and broad-based benefits programs. We place significant emphasis on pay for performance-based incentive compensation, which is designed to reward our executive officers based on the achievement of predetermined corporate goals.

This Compensation Discussion and Analysis describes our compensation objectives, policies and practices with respect to our President and Chief Executive Officer, Senior Vice President and Chief Financial Officer, and our other three most highly-compensated executive officers as determined in accordance with applicable Securities and Exchange Commission rules (collectively, our “named executive officers”).

Our named executive officers in fiscal 2019 were Mr. Sintros, our President and Chief Executive Officer, Shane F. O’Connor, our Senior Vice President and Chief Financial Officer, Cynthia Croatti, our Executive Vice President and Treasurer, David M. Katz, our Senior Vice President, Sales and Marketing, and David A. DiFillippo, our Senior Vice President, Operations.

Objectives of Our Executive Compensation Programs

Our compensation programs for our named executive officers are designed to achieve the following objectives:

 

attract and retain talented and experienced executives in the highly competitive uniform rental and sales industry;

 

motivate and reward executives whose knowledge, skills and performance are critical to our success and the furtherance of our long-term strategic plan;

 

align the interests of our executives and shareholders by motivating executives to increase shareholder value and by rewarding executives when shareholder value increases;

 

provide a competitive compensation package which is weighted heavily towards pay for performance, and in which a significant portion of total compensation is determined by corporate and individual performance and the creation of shareholder value;

13


 

ensure fairness among our executive officers by recognizing the contributions each executive makes to our success; and

 

foster a shared commitment among executives by coordinating their corporate and individual goals.

Our Executive Compensation Programs and Plans

We designed our executive compensation programs and plans to achieve the objectives described above. Our executive compensation primarily consists of base salary, annual cash incentive bonuses under an executive bonus plan and CEO Cash Incentive Bonus Plan, or CEO Bonus Plan, that are tied to the achievement of predetermined corporate performance goals, long-term equity incentive compensation and broad-based benefits programs.

Within the context of the overall objectives of our compensation programs, we typically determine the specific amounts of compensation to be paid to each of our named executive officers based on a number of factors:

 

the performance of our named executive officers in prior years;

 

the roles and responsibilities of our named executive officers;

 

the individual experience and skills of our named executive officers;

 

for each named executive officer, other than our Chief Executive Officer, the evaluations and recommendations of our Chief Executive Officer; and

 

the amounts of compensation being paid to our other named executive officers.

In addition, we rely on our understanding of the amount of compensation paid by our principal competitors and similarly situated companies to their executives with comparable roles and responsibilities as a market check for the compensation decisions we make.

Each of the primary elements of our executive compensation is discussed in detail below, including a description of how each element fits into the overall compensation of our named executive officers. We also discuss below the amounts of compensation paid to our named executive officers for fiscal 2019 under each of these elements. In the descriptions below, we highlight particular compensation objectives that we have designed specific elements of our executive compensation program to address. However, it should be noted that we have designed our compensation programs to complement each other and collectively serve all of our executive compensation objectives described above. Accordingly, whether or not specifically mentioned below, we believe that each element of our executive compensation program serves each of our objectives to a greater or lesser extent.

Our CEO Compensation Program

In fiscal 2017, the Compensation Committee designed our initial compensation arrangements with Mr. Sintros upon his appointment as our Chief Executive Officer.   In connection with the design of our CEO compensation program, we engaged Pearl Meyer & Partners, LLC ("Pearl Meyer"), a third party compensation consulting firm, to assist us.  We considered and confirmed Pearl Meyer’s independence and noted that Pearl Meyer does not perform other work for the Company or its executives.

At our request in fiscal 2017, Pearl Meyer prepared and presented to us detailed materials to assist us with the design of our compensation program for Mr. Sintros. As part of its presentation, Pearl Meyer compared the compensation of Mr. Sintros to the compensation of the CEOs of a group of reference companies. These reference companies were Advanced Disposal Services, Inc., Casella Waste Systems, Inc., Cintas Corporation, Comfort Systems USA, Inc., Covanta Holding Corporation, Healthcare Services Group, Inc., Insperity, Inc., Iron Mountain Incorporated, Kforce Inc., MSA Safety Incorporated, Rollins, Inc., Stericycle, Inc., Tetra Tech, Inc., Waste Connections, Inc. and Watts Water Technologies, Inc (the “reference companies”). These reference companies were selected by Pearl Meyer based on comparability to the Company with respect to one or more of revenues, market capitalization, asset size and industry. Pearl Meyer also compared the compensation of Mr. Sintros to a subset of the above-mentioned reference companies (the “subset reference companies”) consisting of Advanced Disposal Services, Inc., Covanta Holding Corporation, Healthcare Services Group, Inc. and Watts Water Technologies, Inc. Pearl Meyer performed the comparison to the subset reference companies because those companies had CEOs with short tenures of three or fewer years, and Mr. Sintros had been recently appointed as our Chief Executive Officer.

14


Based on such comparisons to reference companies and the subset reference companies, Pearl Meyer proposed a three-year roadmap of increasing compensation for Mr. Sintros such that his target total direct compensation in (1) year two (fiscal 2019) would approximate the 21st percentile of CEO total direct compensation at the subset reference companies with short-tenured CEOs and the 12th percentile of CEO total direct compensation at the reference companies and (2) year three (fiscal 2020) would approximate the 50th percentile of CEO total direct compensation at the subset reference companies with short-tenured CEOs and the 30th percentile of CEO total direct compensation at the reference companies.  Pearl Meyer noted that total direct compensation consists of base salary, cash incentive bonus and long-term equity awards.  

Pearl Meyer recommended a pay mix for Mr. Sintros consisting of base salary, cash incentive bonus and long-term equity awards, which such recommendation we used in connection with the design of our CEO compensation program for Mr. Sintros.  Following the design of the program, we entered into an Employment Agreement with Mr. Sintros in December 2017, which is described below.  

The amounts we paid Mr. Sintros for fiscal 2019 for base salary, cash incentive bonus and long-term equity awards are described below along with the amounts paid to our other named executive officers in fiscal 2019.  In addition, the terms of our fiscal 2019 equity award agreements with Mr. Sintros are described below.  In determining the compensation of Mr. Sintros for fiscal 2019 described below, we engaged Egon Zehnder, an independent consulting firm, to assist us in reviewing the performance of Mr. Sintros in fiscal 2018.

Terms of CEO Compensation Program

Employment Agreement with Mr. Sintros

On December 14, 2017, we entered into an Employment Agreement with Mr. Sintros, which provides for his employment for a term of three years, subject to earlier termination as set forth in the agreement. The initial annual base salary paid to Mr. Sintros was $500,000 through the end of fiscal 2018. Thereafter, the base salary payable to Mr. Sintros is reviewed on an annual basis consistent with the Company’s usual practices for senior executives. In addition, Mr. Sintros is entitled to participate in the Company’s executive cash bonus plan in the same manner as other senior executives of the Company and the Company’s CEO Bonus Plan.

Mr. Sintros is also entitled to participate in the Company’s long-term equity incentive program as determined by the Compensation Committee and the Board of Directors.

In the event that the Company terminates the employment of Mr. Sintros without cause or Mr. Sintros terminates his employment for good reason, each as defined in the Employment Agreement, Mr. Sintros will be entitled to receive (i) a pro-rated cash bonus, if any, for the fiscal year in which his employment is terminated and (ii) an amount equal to two times the sum of (a) his base salary then in effect and (b) his target cash bonus for the fiscal year in which his employment is terminated. Mr. Sintros has agreed under the Employment Agreement not to compete with the Company or to solicit the Company’s employees or customers for a period of 24 months following his termination.

Performance-Based Restricted Stock Unit Award Agreement with Mr. Sintros

On November 27, 2018, we recommended that the Board of Directors enter into a Restricted Stock Unit Award Agreement (the “Performance-Based RSU Agreement”) with Mr. Sintros pursuant to which the Company granted 2,737 restricted stock units (the “Performance RSUs”) to Mr. Sintros. The number of Performance RSUs to be earned will depend on whether and the extent to which the Company achieves certain consolidated revenues and adjusted operating margins as set forth in the Performance-Based RSU Agreement during fiscal 2019 (collectively, the “Performance Criteria”). The revenue metric is subject to adjustment to take into account the impact of any deterioration of the Canadian dollar to U.S. dollar exchange rate from 0.78 U.S. dollars to 1.0 Canadian dollar. The adjusted operating margin metric is based on the Company’s operating income, net of certain non-cash items, including depreciation, intangibles amortization, and stock-based compensation, and subject to adjustments for changes in generally accepted accounting principles impacting operating income, any losses, costs or expenses relating to claims, litigation, regulatory investigations, or environmental investigations and remediation in excess of $1.0 million, any losses, costs or expenses associated with natural catastrophes, wars, terrorism, business interruption or similar events, any gain recognized related to a legal settlement in connection with a previous project to update our CRM systems, and certain outside contractor costs or internal payroll costs with respect to the Company’s initiative to update its customer relationship management (CRM) systems that are expensed for financial statement purposes.

15


The threshold, target and maximum numbers of Performance RSUs eligible to be earned under the Performance-Based RSU Agreement are 1,540, 2,138 and 2,737, respectively. With respect to consolidated revenues in fiscal 2019, 770 Performance RSUs could be earned upon threshold performance of $1,765,000,000 in revenue, 1,069 Performance RSUs could be earned upon target performance of $1,775,000,000 in revenue, and 1,369 Performance RSUs could be earned upon maximum performance of $1,785,000,000. With respect to adjusted operating margin in fiscal 2019, 770 Performance RSUs could be earned upon threshold performance of 14.50%, 1,069 Performance RSUs could be earned upon target performance of 15.50%, and 1,368 Performance RSUs could be earned upon maximum performance of 16.50%.

Performance RSUs earned upon achievement of the Performance Criteria are fully vested.

Time-Based Restricted Stock Unit Award Agreement with Mr. Sintros

On November 27, 2018, we entered into a Restricted Stock Unit Award Agreement (the “Time-Based RSU Agreement”) with Mr. Sintros pursuant to which the Company granted 4,276 restricted stock units (the “Time-Based RSUs”) to Mr. Sintros. The Time-Based RSUs will vest 20% per year on each anniversary of the grant date with the first vesting occurring on the first anniversary of the grant date. Such vesting is subject to the continued employment of Mr. Sintros on each such vesting date.

Stock Appreciation Right Award Agreement with Mr. Sintros

On November 27, 2018, we entered into a Stock Appreciation Right Award Agreement (the “SAR Agreement”) with Mr. Sintros pursuant to which the Company granted 7,538 stock-settled stock appreciation rights to Mr. Sintros. Such stock appreciation rights have an exercise price of $146.17, expire 10 years from the grant date and vest and become exercisable 20% per year on each anniversary of the grant date with the first vesting occurring on the first anniversary of the grant date. Such vesting is subject to the continued employment of Mr. Sintros on each such vesting date.

Base Salary - Named Executive Officers

We pay our named executive officers a base salary, which we review and determine annually. We believe that a competitive base level of compensation is a necessary element of any compensation program that is designed to attract and retain talented and experienced executive officers who will facilitate the accomplishment of our long-term strategic plan and increase shareholder value. We also believe that attractive base salaries can motivate and reward executive officers for their overall performance. The base salaries paid to our named executive officers reflect the general performance of our named executive officers during prior years, their roles and responsibilities, and their experience, skills and contributions.  With respect to Mr. Sintros, we also considered the performance review conducted by Egon Zehnder in setting his fiscal 2019 annual base salary.

The base salaries set forth in the “Summary Compensation Table” below reflect the base salaries earned by our named executive officers in fiscal 2019. We determined the base salaries of our named executive officers other than Mr. Sintros on a calendar year basis. The base salary for Mr. Sintros was determined on a fiscal year basis pursuant to his Employment Agreement. For fiscal 2019, we paid Mr. Sintros an annual base salary of $600,000. For calendar 2019, consistent with the recommendation of Mr. Sintros, we increased Mr. O’Connor’s annual base salary from $335,000 to $353,425, Ms. Croatti’s annual base salary from $483,754 to $503,104, Mr. Katz’s annual base salary from $394,782 to $412,547 and Mr. DiFillippo’s annual base salary from $364,501 to $379,081.

Annual Cash Incentive Bonuses - Named Executive Officers

Consistent with our emphasis on performance incentive compensation programs, our named executive officers are eligible to receive annual cash incentive bonuses primarily based on their performance as measured against predetermined corporate financial goals that we establish. The primary objective of our annual cash incentive bonuses is to motivate our named executive officers and to reward them for meeting our short-term objectives using a performance-based compensation program with objectively determinable goals. Our annual cash incentive bonuses also align the interests of our named executive officers and our shareholders by providing our executives with incentives to increase shareholder value and a reward for doing so. To further incent our President and Chief Executive Officer, we adopted a CEO Bonus Plan, under which Mr. Sintros is entitled to participate pursuant to his Employment Agreement. Under the CEO Bonus Plan, Mr. Sintros is eligible to earn an additional bonus based on the achievement of Company-wide performance objectives.

16


Executive Bonus Plan

Under our executive bonus plan, our named executive officers have the potential to earn annual cash incentive bonuses at a level that represents a meaningful portion of our named executive officers’ cash compensation. For fiscal 2019, our executive bonus plan provided for potential annual cash incentive bonuses of up to 34% of the named executive officer’s salary earned for the fiscal year. Potential bonus payments under our executive bonus plan are linked to objective criteria set forth in the plan. Our named executive officers can earn annual cash incentive bonuses based on predetermined goals tied to corporate revenues, earnings per share and customer retention.

At the beginning of the fiscal year, we set a fiscal year target for corporate revenues for purposes of our executive bonus plan. Each executive can earn a bonus of up to 10% of his or her salary earned during the fiscal year in question if actual revenues exceed a predetermined percentage of the target revenues. The amount of the bonus depends on the amount by which actual revenues varied from target revenues. To achieve the maximum bonus for the revenues goal, actual revenues must be 101.5% or more of the target revenues. In addition, if actual revenues are less than 99.5% of target revenues, then no bonus would be earned on account of the revenues goal. The executive bonus plan for fiscal 2019 included potential adjustments to actual revenues to take into account the impact of any deterioration of the Canadian dollar to U.S. dollar exchange rate from 0.78 U.S. dollars to 1.0 Canadian dollar.

At the beginning of the fiscal year, we also set a fiscal year target for consolidated diluted earnings per share (EPS) for purposes of our executive bonus plan. Each executive can earn a bonus of up to 20% of his or her salary earned during the fiscal year in question if actual EPS exceed a predetermined percentage of the target EPS. In addition, the executive bonus plan for fiscal 2019 included potential adjustments to actual EPS to take into account Company costs and expenses in excess of $1.0 million associated with claims, litigation, regulatory or environmental matters, certain outside contractor costs or internal payroll costs with respect to the Company’s initiative to update its customer relationship management (CRM) systems, asset impairment, changes in generally accepted accounting principles and any gain recognized related to a legal settlement in connection with a previous project to update our CRM systems. The amount of the bonus depends on the amount by which actual EPS, subject to potential adjustment, varied from target EPS. To achieve the maximum bonus for the EPS goal, the actual EPS, subject to potential adjustment, must equal or exceed 104% of the target EPS. In addition, if actual EPS, subject to potential adjustment, is less than 96% of target EPS, then no bonus would be earned on account of the EPS goal.

Our executive bonus plan also provides for annual cash incentive bonuses of up to 4% of base salary for our named executive officers based on customer retention, but only if a bonus is otherwise earned with respect to either the revenues goal or the EPS goal.

In establishing our targeted bonus opportunities under the executive bonus plan, we consider the incentives that we want to provide to our executives and our historical practices. For fiscal 2019, we established the following corporate financial goals under our executive bonus plan. With respect to revenues, target revenues were set at $1.775 billion. Our actual revenues for fiscal 2019 were $1.809 billion. As a result, based on the percentage achievement levels, the named executive officers earned a 10% bonus on account of the revenues goal.

With respect to EPS, target EPS for fiscal 2019 was set at $6.85. Our actual EPS for fiscal 2019 was $9.33 and our adjusted EPS under the executive bonus plan was $8.38. Based on that percentage achievement level, the named executive officers earned a 20% bonus on account of the EPS goal.

With respect to customer retention levels, at our fiscal 2019 revenue growth rate, the named executive officers earned a bonus of 3% based on this criterion.

For fiscal 2019, our named executive officers received the following annual cash incentive bonuses under our executive bonus plan:

 

Name

 

Bonus

 

 

% of Base

Salary

 

Steven S. Sintros

 

$

198,000

 

 

33%

 

Shane F. O'Connor

 

$

116,886

 

 

33%

 

Cynthia Croatti

 

$

167,130

 

 

33%

 

David M. Katz

 

$

136,842

 

 

33%

 

David A. DiFillippo

 

$

125,929

 

 

33%

 

17


CEO Bonus Plan

In addition to the executive bonus plan, Mr. Sintros is entitled to participate in our CEO Bonus Plan pursuant to his Employment Agreement discussed above. Under the CEO Bonus Plan, Mr. Sintros could earn an additional bonus for fiscal 2019 based on the achievement of Company-wide performance objectives. As described above, Mr. Sintros was eligible to receive a target cash bonus under the CEO Bonus Plan of 30% of his base salary for fiscal 2019. Under the CEO Bonus Plan, each fiscal year we set annual target bonus levels and Company-wide performance goals for our President and Chief Executive Officer. For fiscal 2019, we set the total bonus levels under the CEO Bonus Plan at a threshold of $120,000, a target of $180,000 and a maximum of $240,000 based on the achievement of corresponding levels of revenues and adjusted operating margin. The revenue metric is subject to adjustment to take into account the impact of any deterioration of the Canadian dollar to U.S. dollar exchange rate from 0.78 U.S. dollars to 1.0 Canadian dollar. The adjusted operating margin metric is based on the Company’s operating income, net of certain non-cash items, including depreciation, intangibles amortization, and stock-based compensation, and subject to adjustments for changes in generally accepted accounting principles impacting operating income, any losses, costs or expenses relating to claims, litigation, regulatory investigations, or environmental investigations and remediation in excess of $1.0 million, any losses, costs or expenses associated with natural catastrophes, wars, terrorism, business interruption or similar events, any gain recognized related to a legal settlement in connection with a previous project to update our CRM systems, and certain outside contractor costs or internal payroll costs with respect to the Company’s initiative to update its customer relationship management (CRM) systems that are expensed for financial statement purposes.

The total bonus potential under the CEO Bonus Plan is split evenly between the revenues performance goals and the adjusted operating margin performance goals. For fiscal 2019, the revenues performance goals were set at a minimum goal of $1.765 billion, a target goal of $1.775 billion and a maximum goal of $1.785 billion. For fiscal 2019, the adjusted operating margin performance goals were set at a minimum goal of 14.5%, a target goal of 15.5% and a maximum goal of 16.5%.

We determined that the Company’s fiscal 2019 revenues of $1.809 billion represented performance at the maximum level and determined that Mr. Sintros had earned a cash bonus of $120,000 with respect to fiscal 2019 revenues. We also determined that the Company’s fiscal 2019 adjusted operating margin of 17.6% represented performance at the maximum level and determined that Mr. Sintros had earned a cash bonus of $120,000 with respect to fiscal 2019 adjusted operating margin.

CEO MBO Bonus

In accordance with the terms of our Employment Agreement with Mr. Sintros, we determined that Mr. Sintros would be eligible to receive in fiscal 2019 a cash bonus of up to 16% of his base salary based on the achievement of certain MBOs. As discussed above, we set three potential MBOs for Mr. Sintros for fiscal 2019. First, we determined that Mr. Sintros would be entitled to a cash bonus of $24,000 for developing and continuing to refine a management succession plan. Second, we determined that Mr. Sintros would be entitled to a cash bonus of up to $24,000 for developing and executing on a plan to reduce lost accounts. Third, we determined that Mr. Sintros would be entitled to a bonus of up to $24,000 for developing and executing on a plan to reduce employee turnover.  Finally, we determined that Mr. Sintros would be entitled to a bonus of up to $24,000 for overseeing our customer relationship management systems project and ensuring that the project stayed on track. We determined that Mr. Sintros achieved each of his MBOs in fiscal 2019 and approved an aggregate cash bonus of $96,000 to be paid to Mr. Sintros on account of such MBOs.

Long-Term Equity Incentive Compensation—Named Executive Officers

We grant long-term equity incentive awards to our named executive officers as part of our total compensation package. We use long-term equity incentive awards as part of our emphasis on performance-based incentive compensation. Our long-term equity incentive awards align the interests of our named executive officers and our shareholders by providing our executives with incentives to increase shareholder value and a reward for doing so. We generally grant long-term incentive awards once each year to each of our named executive officers.

We awarded stock-settled stock appreciation rights (“SAR”) and restricted stock units to our named executive officers in fiscal 2019. With respect to SARs, the recipient receives the value (in shares) of the appreciation in the market price of the Company’s Common Stock from the grant date to the exercise date. The SARs, other than the SARs awarded to Mr. Sintros in fiscal 2019, are subject to a five-year cliff-vesting schedule under which the SARs become vested and exercisable in full after five years from the date of grant and expire ten years after the grant date. The restricted stock units granted to our named executive officers, other than those awarded to Mr. Sintros in fiscal 2019, are subject to a five-year cliff vesting schedule under which the restricted stock units vest in full after five years from the date of grant. The SARs and time-based restricted stock units granted to Mr. Sintros in fiscal 2019 vest in equal annual amounts over a five-year period. The Company refers to its SARs herein as “Share-Based Awards”.

18


In fiscal 2019, we granted the following SARs to the following named executive officers:

 

Name

 

Number of Securities

Underlying SARs

 

 

Exercise or Base Price

of SAR Awards ($/Sh)

 

Steven S. Sintros

 

 

7,538

 

 

$

146.17

 

Shane F. O’Connor

 

 

1,297

 

 

$

152.38

 

Cynthia Croatti

 

 

1,634

 

 

$

152.38

 

David M. Katz

 

 

1,297

 

 

$

152.38

 

David A. DiFillippo

 

 

1,297

 

 

$

152.38

 

 

In fiscal 2019, we granted the following time-based restricted stock units to the following named executive officers:

 

Name

 

Number of Time-Based

Restricted Stock Units

 

Steven S. Sintros

 

 

4,276

 

Shane F. O’Connor

 

 

1,231

 

Cynthia Croatti

 

 

1,551

 

David M. Katz

 

 

1,231

 

David A. DiFillippo

 

 

1,231

 

 

In fiscal 2019, we also granted performance-based restricted stock units to Mr. Sintros as described above under “-Performance-Based Restricted Stock Unit Award Agreement with Mr. Sintros.” Subsequent to fiscal 2019, we determined that all 2,737 performance-based restricted stock units awarded to Mr. Sintros were earned. We determined that the Company’s fiscal 2019 revenues of $1.809 billion represented performance at the maximum level and determined that Mr. Sintros had earned 1,369 of such performance-based restricted stock units with respect to fiscal 2019 revenues. We also determined that the Company’s fiscal 2019 adjusted operating margin of 17.6% represented performance at the maximum level and determined that Mr. Sintros had earned 1,368 of such performance-based restricted stock units with respect to fiscal 2019 adjusted operating margin. All of such earned performance-based restricted stock units vested in full upon being earned.

Broad-Based Benefits Programs and Perquisites

All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical, dental and vision care coverage, disability insurance, life insurance and the UniFirst Corporation Profit Sharing Plan. In addition, certain of our full-time employees, including our named executive officers, may participate in the UniFirst Corporation Unfunded Supplemental Executive Retirement Plan. In fiscal 2019, our named executive officers also received certain perquisites and personal benefits set forth in the “Summary Compensation Table” below. We provide these benefits to retain and attract talented executives with the skills and experience to further our long-term strategic plan.

Our Executive Compensation Process

The Compensation Committee of our Board of Directors is primarily responsible for establishing the compensation paid to our named executive officers. The Board of Directors has determined that each member of the Compensation Committee is “independent” as that term is defined under the applicable rules of the New York Stock Exchange. In determining executive compensation, our Compensation Committee annually reviews the performance of our named executive officers with our Chief Executive Officer, and our Chief Executive Officer makes recommendations to our Compensation Committee with respect to the appropriate base salary, annual cash incentive bonus payments and grants of long-term equity incentive awards for each of our named executive officers. Our Compensation Committee annually reviews the performance of our Chief Executive Officer and establishes the appropriate base salary, annual cash incentive bonus payments and grants of long-term equity incentive awards to be paid to him.  In determining the compensation of Mr. Sintros for fiscal 2019 described above, we engaged Egon Zehnder, an independent consulting firm, to assist us in reviewing the performance of Mr. Sintros in fiscal 2019. In general, we do not engage in a formal benchmarking process in setting the compensation for our executives. However, as discussed above, we benchmarked against reference companies and subset reference companies in determining the compensation of Mr. Sintros in connection with his appointment as Chief Executive Officer in July 2017.

19


Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2019 for filing with the Securities and Exchange Commission.

 

 

 

Compensation Committee

 

 

 

 

 

Michael Iandoli (Chair)

Kathleen M. Camilli

Phillip L. Cohen

Thomas S. Postek

Raymond C. Zemlin

 

Summary Compensation Table

The following table sets forth summary information concerning the annual compensation for the years ended August 31, 2019, August 25, 2018 and August 26, 2017, respectively, awarded to, earned by or paid to our President and Chief Executive Officer, Senior Vice President and Chief Financial Officer and our other three most highly-compensated executive officers (collectively, for purposes of the tables set forth in this Proxy Statement, our “named executive officers”):

 

Name and

Principal

Position

 

Year

 

Salary

(1)

 

 

Bonus

 

 

Share-

Based

Awards

(2)

 

 

Stock

Awards

(3)

 

 

Non-

Equity

Incentive

Plan

Compensation

 

 

Change in

Pension

Value

and

Nonqualified

Deferred

Compensation

Earnings

(4)

 

 

All Other

Compensation

 

 

 

 

Total

 

Steven S. Sintros

 

2019

 

$

611,321

 

 

$

96,000

 

 

$

312,525

 

 

$

1,025,090

 

 

$

438,000

 

 

$

207,254

 

 

$

31,952

 

 

(6)

 

$

2,722,142

 

President and

 

2018

 

$

500,000

 

 

$

65,000

 

 

$

249,975

 

 

$

750,089

 

 

$

310,000

 

 

$

55,524

 

 

$

30,362

 

 

 

 

$

1,960,950

 

Chief Executive

 

2017

 

$

392,916

 

 

$

7,858

 

 

$

138,560

 

 

$

 

 

$

113,946

 

 

$

 

 

$

26,912

 

 

 

 

$

680,192

 

Officer (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shane F. O’Connor

 

2019

 

$

360,996

 

 

$

 

 

$

62,515

 

 

$

187,580

 

 

$

116,886

 

 

$

133,741

 

 

$

33,203

 

 

(8)

 

$

894,921

 

Senior Vice

 

2018

 

$

212,599

 

 

$

180,000

 

 

$

58,783

 

 

$

176,358

 

 

$

 

 

$

144,847

 

 

$

14,553

 

 

 

 

$

787,140

 

President and Chief

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Officer (7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cynthia Croatti

 

2019

 

$

516,128

 

 

$

 

 

$

78,759

 

 

$

236,341

 

 

$

167,130

 

 

$

532,128

 

 

$

31,952

 

 

(9)

 

$

1,562,438

 

Executive Vice

 

2018

 

$

476,956

 

 

$

 

 

$

75,001

 

 

$

225,041

 

 

$

152,626

 

 

$

42,126

 

 

$

29,647

 

 

 

 

$

1,001,397

 

President and

 

2017

 

$

457,056

 

 

$

9,141

 

 

$

207,840

 

 

$

 

 

$

132,546

 

 

$

12,111

 

 

$

28,593

 

 

 

 

$

847,287

 

Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David M. Katz

 

2019

 

$

422,607

 

 

$

 

 

$

62,515

 

 

$

187,580

 

 

$

136,842

 

 

$

140,111

 

 

$

31,952

 

 

(10)

 

$

981,607

 

Senior Vice

 

2018

 

$

389,234

 

 

$

 

 

$

58,752

 

 

$

176,384

 

 

$

124,555

 

 

$

32,351

 

 

$

30,526

 

 

 

 

$

811,802

 

President, Sales and

 

2017

 

$

374,265

 

 

$

7,485

 

 

$

138,560

 

 

$

 

 

$

108,537

 

 

$

19,696

 

 

$

28,768

 

 

 

 

$

677,311

 

Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David A. DiFillippo

 

2019

 

$

388,894

 

 

$

 

 

$

62,515

 

 

$

187,580

 

 

$

125,929

 

 

$

315,616

 

 

$

31,955

 

 

(11)

 

$

1,112,489

 

Senior Vice

 

2018

 

$

359,379

 

 

$

 

 

$

58,752

 

 

$

176,384

 

 

$

115,001

 

 

$

22,843

 

 

$

30,574

 

 

 

 

$

762,933

 

President,

 

2017

 

$

345,555

 

 

$

6,911

 

 

$

138,560

 

 

$

 

 

$

100,211

 

 

$

 

 

$

28,735

 

 

 

 

$

619,972

 

Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Fiscal 2019 consisted of 53 weeks, while fiscal 2017 and fiscal 2018 consisted of 52 weeks.  The base salary amounts for fiscal 2019 reflect the impact of the additional week, including the timing of our bi-weekly pay periods.

 

20


 

(2)

The amounts shown represent the aggregate grant date fair value related to the grant of stock appreciation rights to our named executive officers in fiscal 2019, 2018 and 2017, respectively, calculated in accordance with FASB ASC Topic 718 (excluding the effect of any estimate of future forfeitures). Additional information concerning our financial reporting of stock appreciation rights is presented in Notes 1 and 12 to our Consolidated Financial Statements set forth in our Annual Report on Form 10-K for the year ended August 31, 2019, Notes 1 and 12 to our Consolidated Financial Statements set forth in our Annual Report on Form 10-K for the year ended August 25, 2018 and in Notes 1 and 12 to our Consolidated Financial Statements set forth in our Annual Reports on Form 10-K for the year ended August 26, 2017. See the “Outstanding Equity Awards at Fiscal Year-End – 2019” table below for additional details regarding the stock appreciation rights that were granted to our named executive officers in fiscal 2019, 2018 and 2017.

 

(3)

The amounts shown represent the aggregate grant date fair value related to the grant of restricted stock units to our named executive officers in fiscal 2019, calculated in accordance with FASB ASC Topic 718 (excluding the effect of any estimate of future forfeitures). Additional information concerning our financial reporting of restricted stock units is presented in Notes 1 and 12 to our Consolidated Financial Statements set forth in our Annual Report on Form 10-K for the year ended August 31, 2019. See the “Outstanding Equity Awards at Fiscal Year-End – 2019” table below for additional details regarding the restricted stock units that were granted to our named executive officers in fiscal 2019.

 

(4)

Amounts reported in this column for fiscal 2019 represent the present value of the accumulated benefit obligation as of August 31, 2019 minus the present value of the accumulated benefit obligation as of August 25, 2018 under the UniFirst Corporation Unfunded Supplemental Executive Retirement Plan, as amended (“SERP”). Amounts reported in this column for fiscal 2018 represent the present value of the accumulated benefit obligation as of August 25, 2018 minus the present value of the accumulated benefit obligation as of August 26, 2017 under our SERP. Amounts reported in this column for fiscal 2017 represent the present value of the accumulated benefit obligation as of August 26, 2017 minus the present value of the accumulated benefit obligation as of August 27, 2016 under our SERP. As of August 26, 2017, such changes in the present value of the accumulated benefit obligation relative to August 27, 2016 were $(4,937) with respect to Mr. Sintros and $(1,234) with respect to Mr. DiFillippo. However, SEC disclosure regulations state that negative changes should not be reflected in the Summary Compensation Table. Accordingly, such changes with respect to Messrs. Sintros and DiFillippo are reflected in the table as “$0” with respect to 2017. Our obligation has been estimated assuming benefits commence at normal social security retirement age and using FASB ASC Topic 715 assumptions for mortality, assumed payment form and discount rates in effect at the measurement dates. Since the Company does not credit interest at above-market rates, no interest amounts are included in these totals. See the “Pension Benefits Table – Fiscal 2019” below for additional details about the accumulated benefits of each named executive officer under our SERP with respect to fiscal 2019. See the “Pension Benefits Table – Fiscal 2018” in our Proxy Statement for the 2019 Annual Meeting of Shareholders filed with the Securities and Exchange Commission on November 29, 2018 for additional details about the accumulated benefits of each named executive officer under our SERP with respect to fiscal 2018. See the “Pension Benefits Table – Fiscal 2017” in our Proxy Statement for the 2018 Annual Meeting of Shareholders filed with the Securities and Exchange Commission on November 30, 2017 for additional details about the accumulated benefits of each named executive officer under our SERP with respect to fiscal 2017.

 

(5)

Mr. Sintros also served as our Chief Financial Officer in fiscal 2018 until the Board of Directors appointed Mr. O’Connor as our Chief Financial Officer effective as of January 5, 2018.

 

(6)

Includes car allowance ($12,450), 401(k) contributions ($11,200) and profit sharing plan contribution ($8,302). The components of “All Other Compensation” for 2017 and 2018 for Mr. Sintros were reported in our 2017 and 2018 proxy statements.

 

(7)

Mr. O’Connor became our Chief Financial Officer effective as of January 5, 2018.

 

(8)

Includes car allowance ($12,450), 401(k) contributions ($12,451) and profit sharing plan contribution ($8,302). The components of “All Other Compensation” for 2018 for Mr. O’Connor were reported in our 2018 proxy statement.

 

(9)

Includes car allowance ($12,450), 401(k) contributions ($11,200) and profit sharing plan contribution ($8,302). The components of “All Other Compensation” for 2017 and 2018 for Ms. Croatti were reported in our 2017 and 2018 proxy statements.

21


 

(10)

Includes car allowance ($12,450), 401(k) contributions ($11,200) and profit sharing plan contribution ($8,302). The components of “All Other Compensation” for 2017 and 2018 for Mr. Katz were reported in our 2017 and 2018 proxy statements.

 

(11)

Includes car allowance ($12,450), 401(k) contributions ($11,203) and profit sharing plan contribution ($8,302). The components of “All Other Compensation” for 2017 and 2018 for Mr. DiFillippo were reported in our 2017 and 2018 proxy statements.

Grants of Plan-Based Awards – Fiscal 2019

The following table contains information related to a non-equity incentive plan award made to our Chief Executive Officer under our CEO Bonus Plan and restricted stock unit awards and Share-Based Awards granted to our named executive officers under our Amended and Restated 2010 Stock Option and Incentive Plan during fiscal 2019:

 

 

 

 

 

 

 

Estimated Possible Payouts Under

Non-Equity Incentive Plan

Awards

 

Estimated Possible Payouts

Under Equity Incentive Plan

Awards

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Grant Date

 

Approval

Date

 

Threshold

($)

 

Target

($)

 

Maximum

($)

 

Threshold

(#)

 

Target

(#)

 

Maximum

(#)

 

All Other

Stock

Awards:

Number of

Securities

Underlying

Awards

 

All Other

Share-

Based

Awards:

Number of

Securities

Underlying

Awards

 

Exercise

or Base

Price of

Share-

Based

Awards

($/Sh)(1)

 

 

Grant

Date

Fair Value

of Stock

and

Share-

Based

Awards($)

(2)

 

Steven S.

 

11/27/2018

 

11/27/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,538 (3)

 

 

146.17

 

 

 

312,525

 

Sintros

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President and

 

11/27/2018

 

11/27/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

4,276 (4)

 

 

 

 

 

 

 

625,023

 

Chief Executive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Officer

 

11/27/2018

 

11/27/2018

 

120,000 (5)

 

180,000 (5)

 

240,000 (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/27/2018

 

11/27/2018

 

 

 

 

 

 

 

1,540 (6)

 

2,138 (6)

 

2,737 (6)

 

 

 

 

 

 

 

 

 

400,067

 

Shane F.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

O’Connor

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,297 (7)

 

 

152.38

 

 

 

62,515

 

Senior Vice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chief Financial

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

1,231 (8)

 

 

 

 

 

 

 

187,580

 

Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cynthia Croatti

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,634 (7)

 

 

152.38

 

 

 

78,759

 

Executive Vice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President and

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

1,551 (8)

 

 

 

 

 

 

 

236,341

 

Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David M. Katz

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,297 (7)

 

 

152.38

 

 

 

62,515

 

Senior Vice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President, Sales

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

1,231 (8)

 

 

 

 

 

 

 

187,580

 

and Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David A.

 

10/22/2018

 

10/22/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,297 (7)

 

 

152.38

 

 

 

62,515

 

DiFillippo

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Vice

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

President,

 

10/22/2018

 

10/22/2018