Share-Based Compensation

12 Months Ended

Aug. 29, 2026

Share-Based Payment Arrangement [Abstract]

The Company adopted an equity incentive plan (the “2023 Plan”) in October 2023 and reserved 375,000 shares of Common Stock for issuance under the 2023 Plan. The 2023 Plan, which was approved by the Company’s shareholders in January 2024, replaced the Company’s 2010 stock incentive plan (the “2010 Plan”). Upon approval of the 2023 Plan by the Company’s shareholders, no further awards may be granted under the 2010 Plan. The 2023 Plan permits the award of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and unrestricted stock (collectively referred to as “Share-Based Awards”) as well as dividend equivalent rights and cash-based awards. As of August 29, 2026, the number of remaining shares available for future grants under the 2023 Plan was 312,887. Share-based compensation expense, which includes expense related to Share-Based Awards, has been recorded in the accompanying Consolidated Statements of Income in selling and administrative expenses.

All Share-Based Awards issued to management were recommended to the Board of Directors by the Compensation Committee and approved by the Board of Directors. All Share-Based Awards issued to the Company’s non-employee members of the Board of Directors (the “Directors”) were recommended to the Board of Directors by the Compensation Committee and approved by the Board of Directors.

In fiscal 2026, 2025 and 2024, the Company granted a total of 1,725, 1,662 and 1,475 shares of fully vested unrestricted stock, respectively, to its non-employee Directors. Accordingly, compensation expense related to the unrestricted stock granted in each of fiscal 2026, 2025 and 2024 was recognized on the date of grant.

In fiscal 2026, 2025 and 2024, the Company granted a total of 4,935, 4,938 and 5,004 stock appreciation rights, respectively, to its non-employee Directors. Such stock appreciation rights were fully vested upon grant, expire on the earlier of the eighth anniversary of the grant date or the second anniversary of the date that the Director ceases to be a member of the Board of Directors and must be settled in stock at the time of exercise. Accordingly, compensation expense related to the stock appreciation rights was recognized on the date of grant.

As of August 29, 2026, the total compensation cost not yet recognized related to non-vested Share-Based Awards was approximately $16.7 million. The weighted average period over which compensation cost for Share-Based Awards will be recognized is 1.81 years.

All stock appreciation rights issued to employees were granted with an exercise price equal to the fair value of the Company’s Common Stock on the date of grant. Stock appreciation rights generally vest one-third on each anniversary of the grant date over a three-year period and expire ten years after the grant date. Share-Based Awards granted to the Company’s non-employee Directors were fully vested as of the date of grant. Non-employee Director Share-Based Award grants in the form of stock appreciation rights expire on the earlier of the eighth anniversary of the grant date or the second anniversary of the date that the Director ceases to be a member of the Board of Directors.

Time-based restricted stock units granted to employees generally vest one-third on each anniversary of the grant date over a three-year period. Generally, performance-based restricted stock units granted to employees are earned based on whether and the extent to which the Company achieves certain revenue and operating margin targets.

The fair value of each stock appreciation right is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used:


Year ended	2026		2025		2024
Risk-free interest rate	3.79	%	4.26	%	4.85	%
Expected dividend yield	0.82	%	0.70	%	0.80	%
Expected life (in years)	5.69		5.65		5.54
Expected volatility	31.8	%	29.8	%	29.4	%

The weighted average fair value of Share-Based Awards granted in the form of stock appreciation rights during fiscal years 2026, 2025 and 2024 were $57.82, $64.32 and $55.97, respectively.

The following table summarizes the Share-Based Awards activity in the form of stock options and stock appreciation rights for fiscal 2026:


	Number of Shares	Weighted Average Exercise Price
Outstanding at August 30, 2025	268,384	$	172.81
Granted	42,600	169.50
Expired	(15,583)	189.93
Exercised	(60,975)	148.12
Forfeited	(307)	154.35
Outstanding at August 29, 2026	234,119	177.52

Exercisable at August 29, 2026	154,929	178.13

The following table summarizes the Share-Based Awards activity in the form of restricted stock units for fiscal 2026:


	Number of Shares	Weighted Average Grant Price
Unvested balance at August 30, 2025	136,397	$	180.81
Granted	73,181	163.29
Vested	(59,415)	182.87
Forfeited	(7,341)	166.87
Unvested balance at August 29, 2026	142,822	$	171.69

As described in Note 1, “Summary of Significant Accounting Policies,” under “Merger Agreement,” the Merger Agreement provides that, at the effective time of the First Merger, outstanding restricted stock unit awards, performance-based restricted stock unit awards and stock appreciation rights will be treated as either terminating or continuing awards, each as described in the Merger Agreement. Terminating awards will be canceled and converted into the right to receive the Merger Consideration, except that a terminating stock appreciation right whose exercise price exceeds the Company Final Price will be canceled for no consideration. Continuing awards will be assumed by Cintas and converted into Cintas restricted stock unit awards or stock-settled appreciation rights, with the number of shares and, for stock appreciation rights, the exercise price adjusted using the Equity Award Conversion Ratio. The number of shares subject to performance-based restricted stock units will be based on the Deemed Performance Level, and continuing awards will remain subject to time-based but not performance-based vesting conditions. As of August 29, 2026, the Mergers had not been completed, and no share-based compensation expense has been recorded as a result of the treatment of Share-Based Awards under the Merger Agreement. The unrecognized compensation cost and weighted average recognition period disclosed above do not reflect any effect of the completion of the Mergers.