SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. ............................]
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Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
ARAMARK CORPORATION
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(Name of Registrant as Specified in Its Charter)
ARAMARK CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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Item 22(a)(2) of Schedule 14A.
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14a-6(i)(3).
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1) Title of each class of securities to which transaction applies:
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was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
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paid previously. Identify the previous filing by registration statement
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LOGO ARAMARK
Notice of Annual Meeting of Stockholders
To our Stockholders:
The annual meeting of the stockholders of ARAMARK Corporation, a
Delaware corporation, will be held on the Sixteenth Floor of ARAMARK Tower, 1101
Market Street, Philadelphia, Pennsylvania, on Tuesday, February 13, 1996, at
3:00 p.m. Philadelphia time, for the following purposes:
1. To elect directors for the ensuing year.
2. To consider and act upon a proposal to approve the Combined Stock
Ownership Plan.
3. To consider and act upon a proposal to approve the Stock Unit
Retirement Plan.
4. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on December 28,
1995 as the record date for determination of the stockholders entitled to notice
of and to vote at the meeting. A list of such stockholders will be open for
examination by stockholders for any purpose germane to the meeting for a period
of ten days prior to the meeting at the offices of ARAMARK at ARAMARK Tower,
1101 Market Street, Philadelphia, Pennsylvania.
Whether or not you expect to attend the meeting in person, please fill
in, date and sign the enclosed proxy card and mail it in the enclosed return
envelope provided for that purpose.
Martin W. Spector
Executive Vice President
and Secretary
Dated: January 9, 1996
LOGO ARAMARK
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
Solicitation by Board of Directors
This statement is furnished in connection with the solicitation by the
Board of Directors of ARAMARK Corporation (herein called "ARAMARK" or the
"Company") of proxies for use at the annual meeting of its stockholders to be
held on February 13, 1996, and at any adjournment thereof. Stockholders who
execute proxy cards may revoke them at any time before they are voted by
delivering a later-dated proxy card or written notice of revocation to the
Secretary of ARAMARK, or by personally notifying the Secretary of ARAMARK at the
meeting.
ARAMARK's executive offices are located at ARAMARK Tower, 1101 Market
Street, Philadelphia, Pennsylvania 19107 (telephone: 215-238-3000). It is
expected that proxy cards and proxy statements will be mailed to stockholders on
or about January 9, 1996.
Shares Outstanding and Voting Rights
Only holders of shares of Common Stock Class A and Common Stock Class B
of record at the close of business on December 28, 1995 are entitled to vote at
the meeting. On that date, there were outstanding 2,104,632 shares of Common
Stock Class A and 22,696,752 shares of Common Stock Class B (together, the
"Common Stock"). Each holder of Common Stock entitled to vote will have the
right to one vote for each such share standing in his, her or its name on the
books of ARAMARK. Holders of Series C Preferred Stock are not entitled to notice
of, or to vote at, the meeting.
All shares represented in person or by proxy will be counted for quorum
purposes. Where a stockholder does not specify a choice on a properly signed and
dated proxy card, the shares will be voted as recommended by the Board of
Directors. Where a stockholder, by marking a proxy card, withholds a vote on the
election of any director, such vote will not be counted as entitled to vote
(i.e., will not be counted as a vote cast) with respect to that election.
Abstentions will be counted as votes cast (i.e., will be counted as votes
against) on any matter to which they relate.
1. Election of Directors
Eleven directors will be elected by a plurality of the votes cast at
the meeting. The persons listed below are proposed to be elected to serve until
the next annual meeting of stockholders and the election and qualification of
their respective successors:
Joseph Neubauer Lee F. Driscoll, Jr.
Robert J. Callander Mitchell S. Fromstein
Alan K. Campbell Edward G. Jordan
Ronald R. Davenport Thomas H. Kean
Philip L. Defliese Reynold C. MacDonald
James E. Preston
If, due to circumstances not now foreseen, any of the nominees becomes
unavailable for election, the proxy agents named in the proxy cards will have
the right to vote for a substitute in each case, or the Board of Directors will
take appropriate action to reduce the number of directors.
2. Combined Stock Ownership Plan
General. The 1987 Stock Option Plan ("1987 Plan") and the 1991 Stock
Ownership Plan (the "1991 Plan") are part of the ARAMARK Ownership Program. The
Program and the terms of purchase opportunities granted under the Program are
generally described under "The ARAMARK Ownership Program". The Plans are
proposed to be amended and combined (the "Combined Plan"), and a copy of the
Combined Plan is attached to the Proxy Statement, and is specifically
incorporated herein by reference.
The 1987 Plan was adopted by the Board of Directors in May 1987 and was
approved by stockholders in February 1988. The 1987 Plan provides for issuance
of up to 8,357,956 shares of Class B Common Stock through the granting of
incentive stock options and/or nonqualified options and purchase opportunities,
which for U.S. income tax purposes are intended to be nonqualified options. On
December 28, 1995, 2,803,023 purchase opportunities and options were outstanding
under the 1987 Plan and 23,879 shares were available for the granting of future
purchase opportunities and options.
The 1991 Plan was adopted by the Board of Directors in November 1991
and was amended in 1994. The 1991 Plan was approved by stockholders in February
1995. The 1991 Plan provides for issuance of up to 10,000,000 shares of Class B
Common Stock through the granting of nonqualified options and purchase
opportunities, which for U.S. income tax purposes are intended to be
nonqualified options. On December 28, 1995, 7,358,218 purchase opportunities and
options were outstanding under the 1991 Plan and 57,159 shares were available
for the granting of future purchase opportunities and options.
Each of the Plans allows the Company to offer, and under the Plans the
Company has offered, stock purchase opportunities to selected employees in three
different ways: the direct sale of shares, the grant of stock purchase
opportunities, and the grant of stock options.
Each of the Plans grants certain administrative authority to the Human
Resources, Compensation and Public Affairs Committee (the "Committee") which
consists of six members of the Board of Directors.
2
The Committee is authorized to grant purchase opportunities and to
determine the number of shares to be offered thereby to each selected key
employee. The term "key employee" is not defined in either Plan, and subject to
the express provisions of the Plan, the Committee has complete authority to
determine the employees who receive purchase opportunities thereunder. As a
result, the number of employees eligible to participate in either Plan is not
determinable.
The Company will use the net proceeds from the sale of shares pursuant
to exercises of purchase opportunities for general corporate purposes.
Neither Plan is subject to any provisions of the U.S. Employee
Retirement Income Security Act of 1974 or is "qualified" within the meaning of
Section 401(a) of the U.S. Internal Revenue Code.
Tax Consequences. With respect to the purchase opportunities, the
Company understands that, under current U.S. income tax laws, (i) no income will
be recognized to the employee at the time of grant; (ii) upon exercise of a
purchase opportunity, the employee must treat as ordinary income the difference,
if any, between the exercise price and any higher fair market value of the
Common Stock on the date of exercise; and (iii) assuming the shares received
upon exercise of such purchase opportunities constitute capital assets in the
employee's hands, any further gain or loss upon disposition of shares may be
treated as capital gain or loss. The Company further understands that tendering
shares already owned by the holder of a purchase opportunity in order to
exercise such purchase opportunity (a "stock-for-stock exercise," so called)
would be considered a "like-kind exchange" of existing shares for new shares and
would not be considered a sale of such previously acquired shares that would
result in the recognition of capital gain or loss by the employee. Upon exercise
of a purchase opportunity by an employee, the Company generally will be able to
treat as a deductible expense for U.S. income tax purposes the difference, if
any, between the exercise price and any higher fair market value of the Common
Stock on the date of exercise.
Proposed Amendments. The Combined Plan would increase by approximately
11 million the number of shares available under the Plans for the granting of
future purchase opportunities and options. Based on the number of purchase
opportunities outstanding on December 28, 1995, the available shares would
increase to 10,338,759 from the current level of 81,038. During the last three
fiscal years, the Company has granted 11,500,851 purchase opportunities to 4,523
employees under the ARAMARK Ownership Program. The Company's senior management
continues to believe that management ownership has significantly contributed to
the Company's success and desires to continue to use the Program to expand both
the number of management investors and their percentage ownership.
The Combined Plan would also allow the Committee to grant new purchase
opportunities, or amend outstanding purchase opportunities, to permit the
employee holder of the purchase opportunity to transfer the purchase opportunity
to immediate family members or trusts or partnerships for such family members.
Such transfers could be helpful to the employee for gift and estate planning.
However, the Company understands that any such transfer would not affect the
U.S. income tax consequences at the time the purchase opportunity is exercised
to either the employee or the Company. The Committee believes that this
transferability feature would be beneficial to the employee only in very limited
circumstances and does not anticipate making transferable purchase opportunities
generally.
3
The Combined Plan is also changed in certain respects to allow the
Company to obtain a tax benefit in connection with the exercise of purchase
opportunities by certain senior executives, even if the exercise has the effect
of increasing their compensation for U.S. income tax purposes over $1 million.
The U.S. Internal Revenue Code generally allows the Company to treat an amount
equal to the gain realized by an employee at the time of exercising a purchase
opportunity as a deductible expense. However, for certain senior executives with
taxable compensation in a fiscal year over $1 million, the amount in excess of
$1 million is not a deductible expense for the Company unless certain conditions
are met. For the exercise of purchase opportunities to meet such conditions, it
is necessary (i) to amend the Combined Plan to, among other things, limit
specifically the number of purchase opportunities that can be granted to any one
employee during any one year, and restrict the Committee membership to "outside
directors" who have not previously been officers of the Company and (ii) to have
the stockholders approve the Combined Plan. The Combined Plan specifically
limits to one million the number of purchase opportunities that can be granted
to any one employee during any one year and so restricts Committee membership.
The Committee has never granted more than one million purchase opportunities to
any one employee during any one year. The Combined Plan will also prohibit Mr.
Campbell from acting as a member of the Committee for purposes of administering
the Company's stock plans. Mr. Campbell is a former Executive Vice President of
ARAMARK Corporation and a member of the Human Resources, Compensation and Public
Affairs Committee and is not, therefore, considered to be an "outside director"
for these purposes.
The Combined Plan would also continue to allow Company officers and
directors to use the stock-for-stock method of exercising installment stock
purchase opportunities and options. The stock-for-stock method of exercise is
much the same as selling currently owned shares and then using the cash proceeds
to pay a portion of the exercise price. There is a significant tax difference,
however, in that no taxable capital gain is currently generated by the use of a
stock-for-stock exercise. Under current Securities and Exchange Commission
("SEC") regulations, an officer or director is prohibited from "profiting" upon
any purchase and sale, or sale and purchase, of Common Stock within a six month
period. Generally, a stock-for-stock exercise in January would be considered a
sale at the then-current appraisal price and could be "matched" with an earlier
purchase at a lower appraisal price, such as the receipt of an installment stock
purchase opportunity in the previous November. SEC regulations provide an
exemption from this result, but only if the plan under which the purchase
opportunity or option was granted has been approved by stockholders.
Accordingly, if the Combined Plan is approved, then officers and directors may
continue to use the stock-for-stock exercise method, to the same extent as other
employees, for exercising both currently outstanding and future grants of
purchase opportunities and options under the Combined Plan. In addition, the
Combined Plan is also being amended to ensure that the administration of the
Plan by the Committee is considered "disinterested" under current SEC
regulations, so that the grant of a purchase opportunity or an option will also
generally not be considered a purchase for these purposes.
4
Possible Additional Grants. Prior to the annual meeting of
stockholders, the Board may consider granting purchase opportunities to
employees (which may include directors) in excess of the number of shares
currently available under the Plans. Such grants, if made, would be subject to
approval of the Combined Plan by the stockholders. If the Board were to grant
purchase opportunities to members of the Committee, such grants would cause the
members of the Committee no longer to be considered "disinterested" under
current SEC regulations. In order to make grants to Committee members without
affecting the "disinterestedness" of the Committee, the Board could adopt
(without the need for additional stockholder approval) a new plan, substantially
similar to the Plans, to be used for grants of purchase opportunities to
directors and could modify the Combined Plan to make directors who are not also
employees of the Company ineligible to receive grants under the Combined Plans.
Stockholder Approval. If the Combined Plan is not approved, then the
1987 Plan and the 1991 Plan will continue unchanged and outstanding installment
purchase opportunities and options will not be affected. To be approved, the
Plan must receive the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or represented by proxy at the meeting
(voting as a single class).
The Board of Directors recommends a vote FOR the Plan.
3. Stock Unit Retirement Plan
General. The Stock Unit Retirement Plan (the "SURP") is a non-qualified
retirement plan for highly compensated employees who are not eligible to
participate in any Company-sponsored qualified retirement plan. A copy of the
SURP is attached to the Proxy Statement, and is specifically incorporated herein
by reference.
The SURP was adopted by the Board of Directors in August 1989 in
response to changes in the U.S. Internal Revenue Code. These changes required as
a condition for the continuing "qualification" of employer-sponsored defined
contribution plans under Internal Revenue Code section 401(a) (and the resulting
U.S. income tax benefits for plan sponsors and participants) that there be a
substantial level of participation in such plans by "non-highly compensated"
employees as compared to the level of participation in such plans by "highly
compensated" employees. To ensure that the Company's Retirement Savings Plan
would continue to be qualified, the Company prohibited further participation by
certain employees and adopted the SURP for those employees. The SURP became
effective as of January 1, 1990 and was amended in 1995.
The SURP is intended to provide to the participants benefits similar to
those provided to employees in the Company's Retirement Savings Plan.
Participants in the SURP may defer up to 15% of their compensation; the Company
accrues interest on the participants' deferred compensation; the Company credits
each participant's account with a "matching" amount annually, equal to between
25% and 75% (60% for fiscal 1995) of the participant's first 6% of compensation
deferred in that year and limited to the same maximum as the Retirement Savings
Plan (currently $9,240); the Company match is in deferred stock units, which are
substantially equivalent to an investment in Class B Common Stock; and the
deferred compensation, accrued interest and shares of Common Stock are
distributed to the participant at the time of his or her termination of
employment. Shares which are distributed are subject to the Stockholders'
Agreement, and the Company's current policy is to repurchase such shares shortly
after their distribution at their then-current appraisal price.
The SURP, unlike the Retirement Savings Plan, is an unfunded plan. The
amounts payable as benefits are not set aside, but rather are carried on the
books of the Company as unsecured liabilities. Similarly, the deferred stock
units are not outstanding shares, but rather are obligations to issue shares in
the future.
5
As of September 30, 1995, there were 701 participants in the SURP, and
the aggregate of all accrued and unpaid benefits at that date was equal to
$21,089,750 plus 689,447 deferred stock units.
The SURP grants certain administrative authority to the Human
Resources, Compensation and Public Affairs Committee (the "Committee") which
consists of six members of the Board of Directors.
The Committee is authorized, among other things, to establish criteria
for participation in the SURP; to set the amount of the Company's match annually
(which each year has been equal to the percentage match for the Retirement
Savings Plan); and to set the rate of interest accruing on the participants'
deferred compensation (which currently is set as equal to the rate of return
provided by the interest income fund under the Retirement Savings Plan).
The SURP is subject only to those provisions of the U.S. Employee
Retirement Income Security Act of 1974 that apply to so called "top hat" plans.
These provisions include claims handling and claims appeal sections.
Tax Consequences. With respect to the SURP, the Company understands
that, under current U.S. income tax laws, (i) no income will be recognized to a
participant at the time he or she defers compensation, at the time interest
accrues on such deferred compensation or at the time the Company allocates
deferred stock units to his or her account; and (ii) upon distribution to the
participant of any deferred compensation or accrued interest thereon or shares
of stock, the participant must treat as ordinary income the amount of the money
and the fair market value of the shares distributed. The Company generally will
be able to treat as a deductible expense for U.S. income tax purposes the
compensation deferred, the interest accrued thereon and the fair market value of
the stock distributed, but not until the time, and only to the extent, such
money and shares are distributed to the participant.
Recent Amendments. The SURP was amended in 1995. The amendments allow
the Committee to establish rules for participants to elect to extend their
deferrals beyond the termination of their employment with the Company. By
extending the deferral of the distribution, a participant could also defer the
U.S. income tax consequences of such distribution. Tax-advantaged distribution
choices that generally are available for distributions from qualified retirement
plans (such as a "tax-free" roll-over into an individual retirement account) are
not available for distributions from the SURP, since it is not a qualified plan.
The amendments, however, would not allow the participant to defer additional
compensation earned after his or her termination of employment and would not
provide for additional allocations beyond his or her termination of employment.
In addition, at the time of termination of employment all of the Company's
allocations to the participant would convert into deferred preferred stock
units, and generally would be the equivalent of an investment in Series D
Preferred Stock, the terms of which are described below (rather than continuing
to be substantially equivalent to an investment in Class B Common Stock). The
Committee has not yet established any rules for such extended deferrals.
6
The amendments would also allow Company officers who participate in the
SURP to sell shares in the December-January internal market. Under current SEC
regulations, an officer is prohibited from "profiting" upon any purchase and
sale, or sale and purchase, of Common Stock within a six month period.
Generally, a Company match under the SURP in September would be considered a
purchase by the officer and could be "matched" with a sale of Common Stock in
the internal market in the following January. SEC regulations provide an
exemption from this result, but only if (i) the SURP delays for six months the
effectiveness of most elections an officer can make under the SURP, (ii) the
administration of the SURP by the Committee is considered "disinterested" under
current SEC regulations, and (iii) the SURP has been approved by stockholders.
The amendments delay, for six months after it is made, the effectiveness of any
election made under the SURP by an officer, except for the effectiveness of an
election to extend his or her deferral beyond his or her termination of
employment. In addition, under current SEC regulations, the administration of
the Plan by the Committee is considered "disinterested." Accordingly, if the
SURP is approved by the stockholders, then officers who participate in the SURP
may in the future also participate in the December-January internal market to
the same extent as other employees. To the extent the SEC amends its regulations
to provide a less restrictive exemption, the Board of Directors would be
authorized to eliminate this restriction on elections by officers.
Series D Preferred Stock. The Board of Directors has recently
designated a new series of Preferred Stock (the "Series D Preferred Stock"). The
Series D Preferred Stock has a cumulative dividend. The dividend does not have a
stated payment date. The dividend rate is initially 2.5% per annum and resets
annually to 50% of the One Year Treasury Rate (as defined). The par value is $1
per share and the liquidation value is $1,000 per share plus accrued and unpaid
dividends. The Series D Preferred Stock ranks equally with the Series C
Preferred Stock as to priority of payment of declared dividends and upon
liquidation. The Series D Preferred Stock generally has no voting rights except
as required by law. The Series D Preferred Stock is generally not transferable
(other than by will or the laws of descent or transfers consented to by the
Company). The Series D Preferred Stock is callable at the election of the
Company at any time in whole or on a selected basis at a price equal to the
liquidation value. The Series D Preferred Stock does not have the benefit of any
mandatory redemption or sinking fund, and is not convertible into any other
securities of the Company.
Stockholder Approval. If the SURP is not approved, then the current
version of the SURP will continue unchanged. To be approved, the SURP must
receive the affirmative vote of the holders of a majority of the shares of
Common Stock present in person or represented by proxy at the meeting (voting as
a single class).
The Board of Directors recommends a vote FOR the SURP.
7
Directors
Name (Age as of November 1, 1995) Office Held (Committee) Since
- --------------------------------- ----------------------- -----
Joseph Neubauer (54)............ Chairman and President 1979
and Director (1)(2)(3)
Robert J. Callander (64)........ Director(2)(3)(4) 1986
Alan K. Campbell (72)........... Director (4) 1980
Ronald R. Davenport (59)........ Director(1)(4) 1980
Philip L. Defliese (80)......... Director(1)(3) 1979
Lee F. Driscoll, Jr. (69)....... Director(1) 1973
Mitchell S. Fromstein (67)...... Director (3)(4) 1990
Edward G. Jordan (65)........... Director(1)(2)(3) 1980
Thomas H. Kean (60)............. Director (3) (4) 1994
Reynold C. MacDonald (77)....... Director(1)(2)(3) 1977
James E. Preston (62)........... Director(4) 1993
- ---------------------
The numbers following the offices held by the directors indicate
membership in the following Board committees during fiscal 1995:
(1) Audit and Corporate Practices
(2) Executive
(3) Finance
(4) Human Resources, Compensation and Public Affairs
Directors Meetings and Committees
ARAMARK's Board of Directors held 7 meetings during fiscal 1995. The
Board has certain standing committees which are described below. During fiscal
1995, each director attended at least 75% of the aggregate of all Board meetings
and all meetings of committees on which he served, except Mr. Fromstein who
attended 13 out of 19 such meetings.
The Audit and Corporate Practices Committee reviews the periodic
financial reports and the accounting principles used by the Company and the
adequacy of the Company's system of internal controls. It also reviews with the
independent public accountants and the internal audit department the scope of
their audits, their audit reports and any recommendation made by them to
determine whether these activities are reasonably designed to assure the
soundness of accounting and financial procedures. It recommends the action to be
taken with respect to the appointment, and approves the compensation, of the
Company's independent public accountants and monitors compliance with the
Company's business conduct policy. It held 4 meetings during fiscal 1995.
The Executive Committee, when acting by unanimous vote of all members,
has the full power of the Board of Directors when the Board is not in session,
with specific limitations relating to certain corporate governance or other
corporate matters. The Committee did not hold any meetings in fiscal 1995.
The Finance Committee reviews the overall financial and business plans
of the Company, including capital expenditures, acquisitions and divestitures,
securities issuances and incurrences of debt and the performance of the
Company's retirement benefit plans. It recommends to the Board specific
transactions involving the foregoing, and it has been empowered by the Board to
approve certain financial commitments and acquisitions and divestitures by the
Company up to specified levels. It held 6 meetings during fiscal 1995.
8
The Human Resources, Compensation and Public Affairs Committee consists
entirely of outside directors. The Committee determines the base salary of the
Chairman and President (subject to review and approval by the Board) and
approves the salaries and bonuses paid to officers and other employees who are
line of business presidents or whose current or proposed base salary exceeds
$200,000 per annum. It reviews appointments to senior management positions and
the nature and scope of the Company's employee benefit plans. It also reviews
and recommends the compensation of outside directors and reviews the Company's
contribution policy and practices for its retirement benefit plans. The
committee is also authorized to exercise the Company's rights and powers under
the Restated and Amended Stockholders' Agreement, including approval of grants
of stock purchase opportunities under the ARAMARK Ownership Program as well as
the annual approval of an internal market policy providing for the repurchase of
shares from management investors. It held 6 meetings during fiscal 1995.
Business Experience
The principal occupations during the past five years of the Company's
directors and other directorships currently held by directors are as follows:
Mr. Neubauer has been president and chief executive officer of the
Company since February 1983 and the chairman since April 1984. He is a director
of Bell Atlantic Corporation, Federated Department Stores, Inc., First Fidelity
Bancorporation, and Penn Mutual Life Insurance Co.
Mr. Callander is executive-in-residence at the Business School of
Columbia University. He was president of Chemical Bank and Chemical Banking
Corporation from August 1990 to June 1992. He is a director of Barnes Group,
Inc., Beneficial Corporation, Latin American Dollar Income Fund, New Asia Fund,
Omnicom Group Inc., and Scudder World Income Opportunities Fund.
Dr. Campbell was vice chairman of the Company from April 1984 to
February 1991 and was executive vice president from December 1980 until his
retirement in September 1990.
Mr. Davenport has been the chairman and president of Sheridan
Broadcasting Corporation since 1972. He is a director of Bell Atlantic -
Pennsylvania, Inc.
Mr. Defliese was the chairman and managing partner of Coopers & Lybrand
prior to his retirement in 1977. He was a professor at the Graduate School of
Business, Columbia University from 1977 until 1986 and has been Professor
Emeritus at Columbia since 1986.
Mr. Driscoll was a partner in the Philadelphia law firm of Ballard,
Spahr, Andrews & Ingersoll from January 1984 until December 1990.
Mr. Fromstein has been chairman, president and chief executive officer
of Manpower Inc. since March 1976. He is a director of Manpower Inc. and ARI
Network Services, Inc.
Mr. Jordan was the chairman and chief executive officer of Consolidated
Rail Corporation from 1975 to 1981 and served as the president of The American
College from 1982 until 1987. He is a director of Acme Metals Incorporated.
9
Former Governor Kean was the Governor of the State of New Jersey from
1982 until 1990. He has been the president of Drew University since 1990. He is
a director of Amerada Hess Corporation, Bell Atlantic Corporation, Beneficial
Corporation, Fiduciary Trust International and United Health Care Corporation.
Mr. MacDonald serves as a consultant to Acme Metals Incorporated. He
was chairman of Acme Metals Incorporated from June 1986 until May 1992. He is a
director of Acme Metals Incorporated and Kaiser Ventures Inc.
Mr. Preston has been the chairman, president, chief executive officer
and a director of Avon Products, Inc. since 1989. He is a director of Woolworth
Corporation and Reader's Digest Association.
Executive Compensation
The following table sets forth information with respect to the
compensation of the named executive officers for services in all capacities to
the Company in the years indicated.
Annual Compensation Stock All
Fiscal -------------------- Option Other
Name and Current Principal Position Year Salary Bonus Granted(#) Comp(1)
- ----------------------------------- ------ ------ ----- ---------- -------
Joseph Neubauer 1995 $820,000 $650,000 500,000 $15,000
Chairman, President and 1994 $790,000 $650,000 0 $5,500
Chief Executive Officer 1993 $760,000 $550,000 0 $17,000
Julian L. Carr, Jr. 1995 $337,000 $180,000 25,000 $5,500
Executive Vice President and 1994 $320,000 $215,000 0 $5,500
President of ARAMARK Health & 1993 $300,000 $205,000 0 $5,000
Education Services Group
James E. Ksansnak 1995 $342,000 $225,000 35,000 $5,500
Executive Vice President, 1994 $330,000 $235,000 0 $5,500
Chief Financial Officer 1993 $315,000 $195,000 0 $5,000
William Leonard 1995 $362,000 $325,000 70,000 $5,500
Executive Vice President, and 1994 $345,000 $240,000 0 $5,500
President of ARAMARK Global 1993 $290,000 $225,000 185,000 $14,000
Food & Support Services Group
Martin W. Spector 1995 $327,000 $200,000 10,000 $5,500
Executive Vice President, 1994 $317,000 $210,000 0 $5,500
General Counsel and 1993 $307,000 $175,000 0 $5,000
Secretary
L. Frederick Sutherland 1995 $280,000 $310,000 100,000 $5,500
Executive Vice President and 1994 $260,000 $200,000 0 $5,500
President of ARAMARK Uniform 1993 $215,000 $165,000 60,000 $5,000
Services Group
- ------------------------
(1) Other compensation includes employer contributions to the Stock
Unit Retirement Plan, plus for fiscal 1995 the value of interest
foregone and not recaptured by the Company relating to payment of
premiums for split dollar life insurance, plus for fiscal 1993
above-market interest accrued during the period on deferred
compensation. Above-market is defined as the portion of interest
in excess of 120% of the applicable federal long-term rate.
10
Stock Purchase Opportunities
The following table sets forth information with respect to the named
executive officers concerning individual grants of stock purchase opportunities
made in fiscal 1995.
Options Granted in Fiscal 1995
(Stock Purchase Opportunities)
Potential
Realizable Value at
Percentage of Assumed Annual Rates of
Total Options Stock Price Appreciation
Granted to All for Option Term(2)
Options Employees in ------------------------
Name Granted(1) Fiscal 1995 5% 10%
---- ------- -------------- -- ---
Joseph Neubauer 500,000 11.2% $1,735,751 $3,804,860
Julian L. Carr, Jr. 25,000 0.6% $86,788 $190,243
James E. Ksansnak 35,000 0.8% $121,503 $266,340
William Leonard 70,000 1.6% $243,005 $532,680
Martin W. Spector 10,000 0.2% $34,715 $76,097
L. Frederick Sutherland 100,000 2.2% $347,150 $760,972
- --------------------
(1) See "The ARAMARK Ownership Program." The options in the table are
cumulative installment stock purchase opportunities and were
granted in May 1995 at a per share exercise price of $13.50,
which was the appraisal price of the shares at the time of grant,
and expire on January 15, 2000.
(2) Realizable value refers to the assumed appraisal price of the
underlying shares at the time such purchase opportunity expires
minus the exercise price.
The following table sets forth information with respect to the named
executive officers concerning the exercise of options in fiscal 1995 and the
unexercised options held as of September 29, 1995.
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
(Stock Purchase Opportunities)
Number of Options Held Current Value of Options Held(2)
Shares ------------------------- --------------------------------
Acquired on Value Currently Not Currently Currently Not Currently
Name Exercise Realized(1) Exercisable Exercisable Exercisable Exercisable
---- -------- -------- ----------- ----------- ----------- -----------
Joseph Neubauer 85,176 $823,978 76,752 492,804 $386,808 $750,912
Julian L. Carr, Jr. 23,648 $191,564 32,460 39,620 $355,942 $142,854
James E. Ksansnak 18,832 $131,653 34,264 48,620 $398,123 $151,854
William Leonard 50,952 $325,838 49,800 206,480 $545,852 $778,510
Martin W. Spector 27,820 $252,965 69,480 24,412 $863,163 $117,346
L. Frederick Sutherland 26,392 $160,113 31,400 148,696 $279,426 $369,883
- --------------------
(1) Value realized refers to the appraisal price of the underlying
shares at the time the option was exercised minus the exercise
price of the option.
(2) Options currently exercisable and current values of options are
determined as of September 29, 1995. Current value of an option
refers to the appraisal price of the underlying shares minus the
exercise price of the option.
11
The following graph compares the five year cumulative return Class B
Common Stock (measured by the appraisal price) to the Standard & Poor's 500
Stock Index and the Dow Jones Consumer Non-Cyclical Index.
Five Year Cumulative Total Shareholder Return
250|------------------------------------------------------------------|
P | |
E | |
R | |
C | |
E | * |
N | # |
T | & |
| * |
O 200|------------------------------------------------------------------|
F | |
| & |
B | * |
A | & |
S | # |
E | |
| |
Y | # |
E 150|------------------------------------------------------------------|
A | # |
R | & # |
| * |
P | |
R | & |
I | * |
C | |
E | *&# |
100|----|----------|---------|-----------|-----------|-----------|----|
1990 1991 1992 1993 1994 1995
*=ARAMARK &=S&P 500 ADJ. #=Dow Jones: Consumer Non-Cyclical
Cumulative total return is stated as a percentage of the base year
(1990) stock price. Cumulative total return in a given year equals (i) the
cumulative amount of dividends paid since the base year, assuming dividend
reinvestment, plus the year-end stock price, (ii) divided by the base year stock
price.
ARAMARK Dow Jones
Fiscal Year Consumer
Ended ARAMARK S&P 500 Non-Cyclical
----- ------- ------- ------------
1990 100.00 100.00 100.00
1991 115.94 125.26 144.90
1992 137.68 146.07 158.11
1993 175.95 165.38 142.07
1994 208.29 172.51 168.04
1995 236.85 221.88 228.02
12
Directors who are employees of the Company are not paid directors'
fees. Directors who are not employees receive an annual retainer of $25,000 for
serving on the Board, $3,000 for services as chairman of a Board committee and
$1,000 for otherwise serving on a committee, and they receive meeting fees of
$1,000 per day for attendance at meetings of the Board, and for each committee
meeting.
The Company has employment agreements or arrangements with all of its
officers, under which they are currently being paid annual salaries ranging up
to $850,000. Generally, these are for indeterminate periods terminable by either
party upon notice ranging from eight weeks to six months. Mr. Neubauer's
agreement currently provides for services to February 17, 1998 (with automatic
renewals for successive three year terms unless terminated) at a current annual
base salary of $850,000 and for fully vested supplemental benefits upon his
death of 25% of his highest base salary payable to his surviving spouse, if any,
annually for life or upon his retirement, disability or termination for any
other reason of 50% of his highest base salary payable to him annually for life.
Upon termination by the Company without cause, Mr. Neubauer's management
incentive bonus shall be prorated through the time of termination; his base
salary at time of termination shall continue for a period of three years after
termination; and, his supplemental benefits shall commence at the end of such
three year period. In 1995, the Company entered into a split dollar life
insurance agreement with Mr. Neubauer. The agreement relates to life insurance
policies owned by a trust created by Mr. Neubauer. Pursuant to the agreement,
the Company pays a substantial portion of the premiums on the policies, such
amounts to be repaid from the proceeds of the policies upon their termination.
The current amount thus outstanding is $325,000. The Company will forego
charging interest in each fiscal year on such amount. However, the foregone
interest will be at least partially recaptured by the Company by reducing the
amount of the interest which would otherwise accrue on Mr. Neubauer's deferred
compensation. The Company holds a security interest in the policies to secure
the repayment of the premium amount paid by the Company. The arrangement
terminates upon the termination of Mr. Neubauer's employment (other than by
reason of his retirement). Mr. Neubauer also has an agreement with the Company
which provides for deferral of that portion of his salary and bonus payments
which, but for the deferral, would be subject to the U.S. tax deductibility
limitation on executive officer compensation. Messrs. Carr, Ksansnak, Leonard,
Spector, and Sutherland have current annual base salaries of $347,000, $354,000,
$385,000, $337,000, and $300,000 respectively. Several agreements (including the
above-referenced agreement with Mr. Neubauer) provide for the deferral of a part
of prior salary and bonus payments with interest, currently at the Moody's
long-term bond index rate, usually payable in equal monthly installments
beginning upon retirement, permanent disability, death or termination of
employment.
The Company currently has a severance pay policy, pursuant to which
severance payments are made to executive officers and certain other key
employees on the basis of continuous service, generally equal to between 3 and
18 months of pay if their employment is terminated for reasons other than cause
plus the continuation of certain other benefits during the period of such
payment.
13
Committee Report On Executive Compensation
The Company's compensation programs are designed to support the
Company's overall commitment to continued growth and quality services to
customers. The programs are intended, among other things, to enable ARAMARK to
recruit and retain the best performers, to provide compensation levels
consistent with the level of contribution and degree of accountability, to use
performance measures consistent with the Company's goals, to provide
compensation consistent with competitive market rates, and to include a
significant portion of incentive compensation.
Salary. Salary levels for all salaried employees are generally reviewed
annually. Guideline increases are established generally based upon overall
financial performance of the Company, the current rate of inflation and general
compensation levels in the industries in which the Company operates. For fiscal
1995, the guideline increase for executive officers, including the five named
individuals, was 3.5%. The specific salary increases for each individual
executive officer is based upon a review of his or her individual performance
and development. In the case of Mr. Neubauer, the review is conducted
independently by the Human Resources, Compensation and Public Affairs Committee
without any officers present, subject to final review and approval by the Board
of Directors of the Company; for all other executive officers, the individual's
supervisor and more senior executives, along with the corporate human resources
department, conduct the review and make a recommendation to the Committee. Mr.
Neubauer's salary was increased by 3.7% during fiscal 1995. The compensation
paid to Company executive officers during fiscal 1995 is not subject to the U.S.
tax deductibility limitation on executive officer compensation. If in future
fiscal years, the compensation payable to a Company executive officer would be
subject to such limitation, the Committee may take such limitation into
consideration in any review of the Company's compensation programs and their
application to executive officers.
Bonus. Senior executive officers participate in the Company's
management incentive bonus program. Bonuses are awarded annually based in part
upon the attainment of predetermined financial goals and in part upon the
attainment of individual objectives. Generally, non-financial objectives
represent 30% of the bonus potential and are established by the supervisor of
the executive. Financial goals generally represent 70% of the bonus potential.
An employee's bonus potential generally varies, as a percentage of total cash
compensation, dependent upon the level of responsibility of the employee's
position. The measures of financial performance used are for the business unit
which is either under the managerial direction of the participant or, if a staff
executive, is the unit on which the participant impacts most frequently and
significantly. In the case of Mr. Neubauer, the Committee awards a bonus based
on a general review of the Company's and Mr. Neubauer's performance. The
Committee believes this is appropriate for Mr. Neubauer's position as chief
executive officer, rather than establishing specific financial goals or
non-financial objectives. Mr. Neubauer was awarded 70% of his maximum bonus
potential for fiscal 1995.
14
Performance measures. The Company uses various financial measures to
evaluate the performance of the Company and its business units, with the
specific measures in some cases varying depending upon the line of business
involved. Generally, the measures used are Revenue Growth, EBIT, RONA and, in
addition, for overall corporate performance Net Income and ATROI. EBIT is
Earnings Before Interest and Taxes. RONA is Return on Net Assets. ATROI is After
Tax Return on Investment. Targets for each of these performance measures are
established annually in the Company's business plan, which is approved at the
beginning of the fiscal year by the Board of Directors.
Stock Purchase Opportunities. The Committee believes that management
ownership contributes to the Company's success, and supports senior management's
goal of expanding both the number of management investors and their percentage
ownership. The Committee, accordingly, grants stock purchase opportunities to
selected management employees. In addition, the Committee in 1994 implemented an
expanded ownership program, to further expand the number of management owners.
The terms of the installment stock purchase opportunities and the expanded
ownership opportunities are generally described under "The ARAMARK Ownership
Program." Individual grants are generally made by the Committee in connection
with hires, promotions and other recognition of performance. The amount of a
grant generally varies depending upon the level of responsibility of the
employee's position, the number of purchase opportunities previously granted,
and the number of shares owned. The individual's supervisor and other senior
executives, along with the corporate human resources department, make
recommendations to the Committee. The Company has in the past also made
broad-based grants to management employees.
Arrangement with Mr. Neubauer. The Committee believes that Mr.
Neubauer's leadership has been key to the Company's successful performance over
the last 10 years. During fiscal 1995 the Committee reviewed his compensation
arrangements with a view toward providing appropriate financial incentives for
Mr. Neubauer's continuing service as chairman and CEO. As a result of such
review and discussions with Mr. Neubauer, the Committee granted to Mr. Neubauer
500,000 cumulative installment stock purchase opportunities at a price per share
equal to the appraisal price at the date of the grant and recommended to the
Board (and the Board approved) a split dollar life insurance agreement with Mr.
Neubauer.
Compensation Committee Interlocks and Insider Participation. Mr.
Campbell, who was an Executive Vice President until his retirement in September
1990, is a member of the Committee.
Members of the Committee:
Robert J. Callander, Chair Mitchell S. Fromstein
Alan K. Campbell Thomas H. Kean
Ronald R. Davenport James E. Preston
15
Security Ownership of Certain Beneficial Owners and Management
The following table presents certain information as of
December 28, 1995 with respect to shares of the Common Stock and Preferred Stock
of the Company beneficially owned by each person known to the Company to be the
beneficial owner of more than 5% of the Common Stock (on a Class B equivalent
basis), by each director and by each named executive officer.
Common Stock
--------------------------------
Percent Preferred Stock
--------------------- ----------------------
Number of Voting Total Number Percent of
Shares(3) Power Outstanding of Shares Outstanding
--------- ------ ----------- --------- -----------
Trustees for various ARAMARK
employee benefit plans(1)(2) 9,823,110 4.0% 22.5% 0 0.0%
Joseph Neubauer 5,126,228 20.5% 11.7% 3,665 25.0%
Robert J. Callander 114,490 * * 0 *
Alan K. Campbell 230,160 * * 172 1.2%
Ronald R. Davenport 46,000 * * 0 *
Philip L. Defliese 96,000 * * 66 *
Lee F. Driscoll, Jr. 2,839 * * 82 *
Mitchell S. Fromstein 125,040 * * 36 *
Edward G. Jordan 120,000 * * 0 *
Thomas H. Kean 41,800 * * 0 *
Reynold C. MacDonald 108,000 * * 0 *
James E. Preston 56,000 * * 0 *
Julian L. Carr, Jr. 639,086 2.6% 1.5% 415 2.8%
James E. Ksansnak 726,247 2.9% 1.7% 200 1.4%
William Leonard 548,920 2.2% 1.3% 0 *
Martin W. Spector 858,296 3.4% 2.0% 300 2.0%
L. Frederick Sutherland 439,656 1.8% 1.0% 248 1.7%
All directors and executive
officers as a group (26 persons) 10,210,176 40.0% 23.0% 5,187 35.4%
All employees** and directors
as a group 25,780,442 92.5% 55.1% 9,767 66.7%
All employees**, directors and
employee benefit plans as a group 35,603,552 96.0% 76.0% 9,767 66.7%
- --------------------
(1) The address of this stockholder is ARAMARK Corporation, ARAMARK
Tower, 1101 Market Street, Philadelphia, PA 19107
(2) The trustees are Alan K. Campbell, James E. Ksansnak and Martin
W. Spector.
(3) Includes shares issuable upon the exercise of currently
exercisable stock purchase opportunities and options.
* Less than 1%.
** Includes children and other transferees for estate planning
purposes.
16
The ARAMARK Ownership Program
The ARAMARK Ownership Program (the "Program") is designed to provide an
opportunity for selected management employees of the Company and its
subsidiaries to acquire an ownership interest in the Company and thereby give
them a more direct continuing interest in the future success of the Company's
business. Under the Program, direct ownership in the Company has increased from
62 original management investors in December 1984 to approximately 1,000
management investors owning more than approximately 55% of the equity. At
December 28, 1995, management employees and directors held stock purchase
opportunities and options for 12,163,766 shares.
The Company's senior management believes that management ownership has
significantly contributed to the Company's success, and intends to continue to
use the Program to expand both the number of management investors and their
percentage ownership.
Through installment stock purchase opportunities and expanded ownership
purchase opportunities, the Company has granted to approximately 4,500
management employees an opportunity to invest in, or increase their investment
in, the Company.
The purchase price for shares subject to either installment stock
purchase opportunities ("ISPOs") or expanded ownership purchase opportunities
("EXPOs") is the appraisal price of the shares (based upon the most recent
available independent appraisal) on the date of the grant. Shares issued
pursuant to the exercise of purchase opportunities are subject to the Company's
Stockholders' Agreement. Generally, purchase opportunities are not transferable,
and each purchase opportunity is exercisable only by the employee to whom it is
granted.
Each installment stock purchase opportunity has an installment schedule
that limits the number of shares of common stock that may be purchased during
each annual installment exercise period. Unless the first installment is
exercised by its expiration date for a minimum number of shares, the entire
installment purchase opportunity is canceled. Thereafter, subsequent annual
installments may be exercised (subject to exercise of a minimum number of
shares) for up to the maximum number of shares specified in the certificate for
that installment. Any portion of an annual installment not exercised by the
appropriate expiration date is canceled. Each installment stock purchase
opportunity is exercisable only while an employee of the Company or a
subsidiary. The Company in 1995 also granted cumulative ISPOs which are similar
to regular ISPOs except that if a portion of an annual installment is not
exercised during the corresponding exercise period, then it is not canceled but
rather may be exercised during any subsequent exercise period.
Each expanded ownership purchase opportunity provides that once vested,
the entire opportunity or a portion (in 100 share increments) may be exercised
during any of the specified annual exercise periods. Upon termination of
employment, an employee can exercise his or her expanded ownership purchase
opportunity if it is vested, within three months after termination (but not
beyond its expiration date). If it is not vested at such time, the entire grant
is canceled. Expanded ownership opportunities were awarded to approximately
3,700 management employees who had not previously been granted installment stock
purchase opportunities. The size and the structure of the expanded ownership
opportunities were approved, taking into consideration the general compensation
levels of the recipients, the size of the cash investment that would be
required, the general suitability of such an investment to recipients generally,
the goal of encouraging management investors to retain the shares they acquire,
the potential dilution to existing stockholders, and the costs and additional
administrative requirements of such expanded ownership.
17
In connection with the exercise of installment purchase opportunities
and non-qualified stock options, ARAMARK has adopted a deferred payment program
whereby a portion of the purchase price for certain installments may be deferred
at the election of the employee for approximately three years. The deferred
payment obligation is a full recourse obligation of the individual, accrues
interest and is secured by a pledge of the shares of ARAMARK Common Stock
purchased. The interest rate for deferred payment obligations incurred in the
current exercise period has been set at 8.75%. Approximately 380 employees
(including executive officers) participated in the program in fiscal 1995. At
fiscal year end, the amount of the deferred payment obligations of Messrs.
Neubauer, Carr, Ksansnak, Leonard, Spector and Sutherland were $2,101,969,
$331,971, $528,819, $269,001, $239,172 and $224,576 respectively.
Certain Relationships and Related Transactions
During fiscal 1995, the Company repurchased from 5 executive officers
and 3 directors 34,246 shares of common stock at an average price per share of
$14.15 and 196 shares of preferred stock at prices equal to $1,000 per share
plus accrued and unpaid dividends to the respective dates of such repurchases.
The Company anticipates that it will continue to repurchase shares held by
officers and directors, through the Company's internal market, and following
their termination of employment or cessation as a director.
The Company, the members of management who are equity investors in the
Company and certain other investors (collectively, "Restricted Investors") are
parties to an amended and restated stockholders' agreement. Restricted Investors
are subject to certain restrictions on transfer, with the Company having certain
rights of first offer in the event of any sales or dispositions by Restricted
Investors or their estates. In addition, upon death, complete disability or
normal retirement of management investors or upon death or complete disability
of other individual Restricted Investors, such persons or their estates may
cause the Company to repurchase for cash up to 30% of their shares at the then
current appraisal price but only to the extent such repurchase by the Company is
permitted under the Company's credit agreement. Such repurchased shares may be
resold to others, including replacement personnel. In addition, it is
contemplated that shares which may be issued pursuant to exercise of employee
stock options and stock purchase opportunities would also be subject to the
stockholders' agreement.
Relationship with Independent Public Accountants
The Board of Directors is expected to reappoint the firm of Arthur
Andersen LLP as independent auditors for the Company for the 1996 fiscal year. A
representative of Arthur Andersen LLP is expected to be present at the annual
meeting and will be offered the opportunity to make a statement if desiring to
do so and will be available to respond to appropriate questions.
18
Financial Statements
A copy of the Company's annual report on Form 10-K for the fiscal year
ended September 29, 1995 has been delivered to stockholders. Stockholders are
referred to the report for financial and other information about the Company.
General
Proxies will be solicited by mail. Proxies may be solicited by
directors, officers and a small number of regular employees of the Company
personally or by mail, telephone or telegraph, but such persons will not be
specially compensated for such services. The entire cost of solicitation will be
borne by the Company.
Management does not intend to present, and does not have any reason to
believe that others will present, any item of business at the annual meeting
other than those specifically set forth in the notice of the meeting. However,
if other matters are presented for a vote, the proxy agents will have the right
to vote the shares represented by proxy cards on such matters in accordance with
their discretion.
Stockholder Proposals
Stockholders may submit proposals on matters appropriate for
stockholder action at future annual meetings of the Company in accordance with
regulations adopted by the Securities and Exchange Commission. For such
proposals to be considered for inclusion in the Company's proxy statement and
form of proxy for next year's annual meeting, they must be received by the
Company not later than September 11, 1996. Proposals should be directed to the
attention of the Corporate Secretary.
19
ARAMARK CORPORATION
Combined Stock Ownership Plan
(as proposed to be amended)
1. Purpose of Plan. The purpose of the Plan is to enable ARAMARK
Corporation and its Subsidiaries to continue to compete successfully in
attracting and retaining key employees and directors by making it possible for
them to purchase shares of the Company's Common Stock on terms which will give
them a more direct and continuing interest in the future success of the
Company's business. The Plan authorizes the granting of Incentive Stock Options,
nonqualified options, or any combination of the foregoing, to such key employees
and directors.
2. Definitions.
Board means the Board of Directors of the Company.
Certificate of Incorporation means the Company's Restated Certificate
of Incorporation, as it may be amended or restated from time to time.
Code means the Internal Revenue Code of 1986, as amended. Any reference
in the Plan to a section of the Code includes any amendments or successor
provisions to such section.
Committee of the Board means the committee consisting of those members
of either the Human Resources, Compensation and Public Affairs Committee or such
other committee of the Board consisting of two or more directors as may be
delegated authority to administer the Plan, who are disinterested persons
(within the meaning of Section (c)(2) of SEC Rule 16b-3 or any successor
provision) and also outside directors (within the meaning of Section 162(m) of
the Code and the Treasury regulations thereunder).
Company means ARAMARK Corporation, a Delaware corporation.
Employee means an officer or other key employee employed by the Company
or by a Subsidiary. It shall also include all members of the boards of directors
of the Company and Subsidiaries.
Incentive Stock Option means an option described in Section 422 of the
Code and the Treasury regulations thereunder.
1987 Plan means the 1987 Stock Option Plan, as amended.
1991 Plan means the 1991 Stock Ownership Plan, as amended.
Optionee means a person to whom an option has been granted under the
Plan which has not expired or been fully exercised or surrendered.
Plan means the Combined 1987 Stock Option Plan and 1991 Stock Ownership
Plan or either the 1987 Plan or the 1991 Plan, as the context may require.
Shares means shares of the Common Stock, Class B, par value $.01 per
share, of the Company.
Subsidiary means any corporation or other entity of which the Company
shall, directly or indirectly, own 50% or more of the equity, as determined for
purposes of the Plan by the Board or the Committee of the Board and any other
corporation or other entity in which the Company shall directly or indirectly
have an equity investment and which the Board or the Committee of the Board
shall in its sole discretion designate.
A-1
Combined Stock Ownership Plan
3. Limits on Options. The total number of Shares for which options may be
granted (including options previously granted and currently outstanding) to
Employees under the 1987 Plan shall not exceed in the aggregate 3,000,000 Shares
and under the 1991 Plan shall not exceed in the aggregate 17,500,000 Shares.
Incentive Stock Options may be granted under the 1987 Plan only. Shares for
which options have expired or have been surrendered or canceled without having
been exercised may again be optioned under the respective Plan. However, Shares
covered by options for which the Company elects under paragraph (c) of Section 7
to settle all or part of its obligation by making a substitute payment in cash,
Shares or a combination of both may not be optioned again under the Plan. The
maximum number of Shares with respect to which options may be granted during any
fiscal year under the Plan to any one Employee is 1,000,000 Shares. If an option
is canceled, such canceled option will be counted against the maximum number of
Shares that may be granted to any one Employee. If an exercise price of an
option is reduced after the grant, the transaction will be treated as a
cancellation of the option and a grant of a new option, unless such price change
is made as a result of a transaction described in Section 6.
4. Granting of Options.
(a) The Committee of the Board is authorized to grant options to
selected Employees until the Plan is terminated as hereinafter provided. The
number of Shares, if any, optioned in each year, the Employees to whom options
are granted, and the number of Shares optioned to each Employee selected shall
be wholly within the discretion of the Committee of the Board, subject only to
the limitations prescribed in paragraph (b) of this Section 4 and in Section 3.
(b) Notwithstanding anything herein to the contrary, only the Board is
authorized to grant options to an Employee who is a member of the Committee of
the Board and, for so long as the Optionee is a member of the Committee of the
Board, all decisions and determinations relating to such options shall be made
by the Board.
5. Terms of Stock Options. The terms of stock options granted under the
Plan shall be as follows:
(a) Price: The option price shall be fixed by the Board or the
Committee of the Board but shall in no event be less than the greater of (i)
100% of the fair market value of the Shares subject to the option on the date
the option is granted, or (ii) the par value of such Shares.
(b) Transferability: Options are not transferable otherwise than by
will or by the laws of descent and distribution. Notwithstanding the foregoing,
the Committee of the Board, by specifically so providing in the option
certificate, or the amended option certificate, may grant options, other than
Incentive Stock Options, that are transferable, without payment of
consideration, to immediate family members of the Optionee, or to a trust or
partnership for such family members, and may also amend outstanding options,
other than Incentive Stock Options, to provide for such transferability. No
option shall be subject, in whole or in part, to attachment, execution or levy
of any kind.
(c) Term: Each option shall expire and all rights thereunder shall end
at the expiration of such period as shall be fixed by the Board or the Committee
of the Board, which period shall end not later than ten years from the date on
which the option was granted, subject in all cases to earlier expiration as
provided in paragraphs (d) and (e) of this Section 5 in the event of termination
of employment, death, or permanent disability.
(d) Exercise: Except as provided in paragraph (e) of this Section 5, an
option shall be exercisable only by an Optionee (or his or her transferee
pursuant to paragraph (b) of this Section 5) and only while the Optionee is an
Employee of the Company or a Subsidiary or, unless his or her employment is
terminated for cause, within three months after he or she otherwise ceases to be
an Employee, but only if and to the extent the option was exercisable
immediately prior to termination of his or her service. In no event shall an
option be exercisable later than the end of the period fixed by the Board or the
Committee of the Board in accordance with the provisions of paragraph (c) of
this Section 5. The Board or the Committee of the Board, in either case, in its
sole discretion, may in whole or in part, accelerate the time at which
outstanding options may be exercised.
A-2
Combined Stock Ownership Plan
(e) Death or Disability of Employee: If an Optionee dies or becomes
permanently disabled within a period during which his or her option could have
been exercised the option may be exercised within twelve months after his or her
death or permanent disability (but not later than the end of the period fixed by
the Board or the Committee of the Board in accordance with the provisions of
paragraph (c) of this Section 5) by him or her (or his or her transferee
pursuant to paragraph (b) of this Section 5) or by those entitled under his or
her will or the laws of descent and distribution, but only if and to the extent
the option was exercisable immediately prior to his or her death or permanent
disability.
(f) Additional Terms: The Board or the Committee of the Board may
include at the time an option is granted such additional terms and conditions as
it deems desirable to the extent not inconsistent with the Plan.
(g) Restrictions on Incentive Stock Options: The following additional
restrictions shall be applicable to all Incentive Stock Options granted under
the Plan:
(i) An Employee who is a director of the Company or of a Subsidiary
shall not be eligible to receive such options unless he is also employed
by the Company or by a Subsidiary.
(ii) The aggregate fair market value (determined at the time the option
is granted) of stock with respect to which Incentive Stock Options are
exercisable for the first time by such Employee during any calendar year
shall not exceed $100,000.
(iii) No option shall be granted to an employee if immediately before
the option is granted the individual owns stock (within the meaning of
section 422 of the Code) possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or a
Subsidiary unless the option price is at least 110 percent of the fair
market value of the Shares subject to option and such option, by its
terms, is not exercisable after the expiration of five years from the date
the option is granted.
(h) Substitute Grants. Notwithstanding the foregoing, the Committee of
the Board may grant an option to an employee of another corporation who becomes
an Employee by reason of a corporate merger, consolidation, acquisition of stock
or property, reorganization or liquidation involving the Company or any of its
Subsidiaries in substitution for a stock option or restricted stock grant
granted by such corporation ("Substituted Stock Incentives"). The terms and
conditions of the substitute stock option may vary from the terms and conditions
required by the Plan and from those of the Substituted Stock Incentives. The
Committee of the Board shall prescribe the provisions of the substitute stock
options.
6. Change in Capital Structure.
(a) If the number of issued Shares is increased or reduced by change in
par value, combination, split-up, recapitalization, reclassification,
distribution of a dividend payable in stock, or the like, the number of Shares
for which options may be granted specified in Section 3 shall be appropriately
adjusted. The number of Shares previously optioned and not theretofore delivered
and the option prices therefor shall likewise be appropriately adjusted whenever
the number of issued Shares is increased or reduced by any such procedure after
the date or dates on which such Shares were optioned.
(b) In the event that the Company is succeeded by another corporation
in a reorganization, merger, consolidation, acquisition of property or stock,
separation or liquidation, the successor corporation shall assume the
outstanding options granted under this plan or shall substitute new options for
them.
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Combined Stock Ownership Plan
7. Delivery of Shares or Cash.
(a) An option shall be exercised by giving the Company written notice
of such election to exercise and of the number of Shares to be purchased, in
such form as the Board or the Committee of the Board shall have prescribed or
approved.
(b) No Shares shall be delivered upon the exercise of an option until
the option price has been paid in full in cash or, at the discretion of the
Board or the Committee of the Board, in whole or in part in Shares owned by the
Optionee, valued at fair market value on the date notice of exercise is received
by the Company.
(c) In lieu of delivering Shares under paragraph (b) of this Section 7,
the Board or the Committee of the Board may elect, in its sole discretion, to
settle all or part of its obligation to deliver Shares by making a substitute
payment of cash, Shares or a combination of cash and Shares equal in value to
any excess of the fair market value (as of the date notice of exercise is
received by the Company) of the Shares which the Board or the Committee of the
Board elects not to deliver over the option price for such Shares. If the Board,
or the Committee of the Board, elects to satisfy its obligation by electing to
make a substitute payment of cash, Shares or a combination of both pursuant to
this paragraph (c) of this Section 7, the person exercising the option shall be
relieved of paying the option price for the Shares for which a substitute
payment is made.
(d) If required by the Board no Shares will be delivered upon the
exercise of an option until the Optionee has given the Company (i) a
satisfactory written statement that he or she is acquiring the Shares for
investment and not with a view to the sale or distribution of any such Shares,
(ii) a satisfactory written opinion of counsel that exercise of the option and
delivery of Shares will be in compliance with all requirements of federal and
state securities laws, (iii) a written agreement not to sell any Shares received
upon the exercise of the option or any other shares of the Company that he or
she may then own or thereafter acquire except either (A) through a broker on the
New York Stock Exchange or another national securities exchange or (B) with the
prior written approval of the Company and (iv) a written agreement that may then
be in effect between the Company and any of its shareholders relating to the
transfer of Shares.
(e) If at any time the Board or the Committee of the Board shall
determine that (1) the listing, registration or qualification of Shares upon any
securities exchange or under any state or federal law, or (2) the consent or
approval of any government regulatory body is necessary or desirable as a
condition of, or in connection with, the transfer to the Optionee of Shares
hereunder, such transfer may not be consummated in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board or the
Committee of the Board.
8. Continuation of Employment. Neither the Plan nor any option granted
thereunder shall confer upon any employee any right to continue in the employ of
the Company or any Subsidiary or limit in any respect the right of the Company
or any Subsidiary to terminate his or her employment at any time.
9. Administration. The Board or the Committee of the Board may make such
rules and regulations and establish such procedures as it deems appropriate for
the administration of the Plan. In the event of a disagreement as to the
interpretation of the Plan or any amendment thereto or any rule, regulation or
procedure thereunder or as to any right or obligation arising from or related to
the Plan, the decision of the Board or, except as provided in paragraph (b) of
Section 4, the Committee of the Board shall be final and binding upon all
persons in interest including Employees, the Company and its shareholders. As
examples and not in limitation of the foregoing, the Committee of the Board may
adopt, amend, suspend, waive and rescind any rules or regulations and appoint
such agents as the Committee of the Board may deem necessary or advisable to
administer the Plan; correct any defect or reconcile any inconsistency in the
Plan and construe and interpret the Plan, any stock option and any rules or
regulations; and make any and all other decisions and determinations as may be
required under the terms of the Plan or as the Committee of the Board may
A-4
Combined Stock Ownership Plan
deem necessary or advisable for the administration of the Plan. The Committee of
the Board may delegate to officers or managers of the Company or any Subsidiary
the authority, subject to such terms as the Committee of the Board shall
determine, to perform administrative functions under the Plan.
10. Reservation of Shares. The Company shall reserve for issue or sale
upon exercise of outstanding options the appropriate number of Shares, and such
Shares shall be identified as those optioned under the Plan.
11. Withholding. Whenever the Company determines that it has an obligation
to withhold any federal, state or local tax by reason of the grant of an option
under the Plan or the delivery of Shares, cash or other property upon exercise
of an option granted under the Plan, the Company shall have the right to
withhold such tax or, where appropriate, to require the Optionee to remit to the
Company an amount sufficient to satisfy such federal, state or local withholding
obligation.
12 Duration of the Plan. No option shall be granted under the 1991 Plan
more than ten years after November 12, 1991, and no option shall be granted
under the 1987 Plan more than 10 years after May 11, 1987.
13. Amendment of the Plan. The Board without further action by the
shareholders may amend the Plan from time to time as it deems desirable;
provided that no such amendment shall increase the maximum number of Shares for
which options may be granted, or reduce the minimum option price, or modify the
class of employees eligible to receive options, or extend the maximum option
period, or permit the granting of options after November 12, 2001 for the 1991
Plan or after May 11, 1997 for the 1987 Plan.
14. Termination of the Plan. The Board may, in its discretion, terminate
the Plan at any time, but no such termination shall deprive Optionees of their
rights under outstanding options, except that the Board may, in connection with
the termination of the Plan, terminate any outstanding options by paying to the
Optionees an amount equal to the difference between the appraisal value of the
Shares and the exercise price.
15. Effective Date - Shareholder Approval. The 1991 Plan became effective
as of November 12, 1991. The 1991 Plan was originally submitted to and approved
by the shareholders of the Company at a meeting held in February, 1995. The 1987
Plan became effective as of May 12, 1987. The 1987 Plan was originally submitted
to and approved by shareholders of the Company at a meeting held in February,
1988. The proposed amendments to each Plan reflected in the Combined Plan shall
become effective upon the approval thereof by the shareholders of the Company.
16. SEC Rule 16b-3. - The Plan is intended to come within the safe harbor
provided by SEC Rule 16b-3 (or any successor provision) with respect to persons
who are subject to Section 16 of the Securities Exchange Act of 1934. Any
provision required by such Rule to be set forth in the Plan is incorporated
herein by reference, and any inconsistent provision herein (other than Section
13) is superseded.
17. IRC Section 162(m). The Plan is intended to come within the provisions
of Section 162(m) of the Code. Any provision required by such Section to be set
forth in the Plan is incorporated herein by reference, and any inconsistent
provision herein (other than Section 13) is superceded.
18. Governing Law. The validity, construction and effect of the Plan, any
rules and regulations relating to the Plan, and any options granted under the
Plan shall be determined in accordance with the laws of the State of Delaware,
without giving effect to principles of conflicts of laws, and applicable federal
laws.
A-5
Combined Stock Ownership Plan
ARAMARK CORPORATION
Stock Unit Retirement Plan
Effective as of January 1, 1990
As Amended and Restated as of November 14, 1995
Table Of Contents
Article I. Definitions and Construction..........................B-1
Article II. Participation.........................................B-5
Article III. Employee Contributions................................B-6
Article IV. Company Matching Contributions........................B-7
Article V. Accounts and Investment Treatment of Deferred
Compensation.......................................B-7
Article VI. Benefits on Separation from Service...................B-9
Article VII. Withdrawals during Employment........................B-10
Article VIII. Breaks in Service....................................B-10
Article IX. Administration.......................................B-11
Article X. No Segregation of Assets.............................B-12
Article XI. Amendment and Termination............................B-13
Article XII. Miscellaneous........................................B-13
ARTICLE I. Definitions and Construction.
1.1 Definitions. Whenever used in this Plan:
Account means any account established for a Participant as provided in
Section 5.1.
Account Balance means for each Participant, the total balance standing
to his Accounts under the Plan at the date of reference.
Affiliate means, with respect to any Company, (a) any corporation
(other than such Company) that is a member of a controlled group of corporations
(within the meaning of Section 414(b) of the Code), of which such Company is a
member; (b) any other related corporation designated as an affiliate by the
Parent Company; or (c) an organization which is a member of an affiliated
service group of which the Company is a member.
Age means age on last birthday.
ARAMARK means ARAMARK Services, Inc., a Delaware corporation.
Basic Salary Deferrals means, for each Participant, the deferrals
authorized by him in accordance with Section 3.1(a).
Break in Service means, for an Employee or a former Employee, a period
of at least twelve consecutive months during which he is not an Employee.
Cash Remuneration means net cash compensation paid by the Company,
computed after reduction for 401(k) contributions and other forms of
compensation required by Section 415(b) of the Code and the regulations
thereunder.
Code means the Internal Revenue Code of 1986, as amended from time to
time.
B-1
Stock Unit Retirement Plan
Committee means the Committee described in Section 9.2.
Company means, each with respect to its own employees, ARAMARK and such
subsidiary or affiliated companies as may from time to time participate in the
Plan by authorization of the Parent Company.
Compensation means, for any Eligible Employee for any Plan Year, his
annual base salary and sales commissions, recruiter commissions paid to
Employees of Spectrum Healthcare Services, Inc. and Correctional Medical
Services, Inc. (including amounts allocable to paid time off for vacations,
holidays, sick leave, and salary deferrals under the ARAMARK Deferred
Compensation Plan and excluding overtime, shift differentials, commissions other
than sales commissions, pay allowances, deferred compensation, bonuses and
related benefits), earned from the Company and paid to the Employee, computed
before reduction of Salary Deferrals under Section 3.1 of this Plan.
Covered Employee means an Employee employed by the Company or an
Affiliate on a salaried basis who is not (a) an employee employed by a joint
venture in which the Company is a joint venturer, or (b) a person in a position
designated by the Company or Affiliate as "Consultant. An Employee who is
neither a United States citizen nor a United States resident shall not become a
Covered Employee.
Deferred Stock Unit or DSU means a Deferred Common Stock Unit or a
Deferred Preferred Stock Unit.
Deferred Common Stock Unit or DCSU means the right to receive one whole
share of Employer Common Stock for each whole Deferred Common Stock Unit, and
cash for fractional Deferred Common Stock Units, in a Participant's account,
subject to conditions described in Section 5.7 herein. The stated value of a
Deferred Common Stock Unit is the most recent appraised value of a share of
Employer Common Stock. The total number of Deferred Common Stock Units which may
be issued under this Plan, net of any cancellations in accordance with the Plan,
shall not exceed in the aggregate 8,000,000. Upon a Separation from Service, the
Deferred Common Stock Units in a Participant's Matching Contributions Account
shall, unless distributed upon such Separation from Service pursuant to Section
6.1, or forfeited pursuant to Section 6.3, be converted into Deferred Preferred
Stock Units in accordance with Section 5.8.
Deferred Preferred Stock Unit or DPSU means the right to receive one
whole share of Employer Preferred Stock for each whole Deferred Preferred Stock
Unit, and cash for fractional Deferred Preferred Stock Units, in a Participant's
account, subject to the conditions described in Section 5.7 herein. The stated
value of a Deferred Preferred Stock Unit is the liquidation value of a share of
Employer Preferred Stock.
Early Retirement means, for any Employee, (a) attainment of Age 60 and
completion of ten or more Years of Service, or (b) incurrence of a total and
permanent disability.
Effective Date means January 1, 1990.
Eligible Employee means a Covered Employee who is eligible to make
contributions under the Plan as provided in Article II.
Employee means any person employed by the Company or an Affiliate.
Employer Stock means Employer Common Stock or Employer Preferred Stock.
Employer Common Stock means Common Stock, Class B, $.01 par value per
share, of the Parent Company.
Employer Preferred Stock means Preferred Stock, Series D, $1.00 par
value per share, of the Parent Company. The liquidation value of the Employer
Preferred Stock is $1,000 per share.
B-2
Stock Unit Retirement Plan
Employment Date means, for each Employee, the first day on which he
completes an hour for which he is paid or entitled to payment, direct or
indirect, from the Company or Affiliate, for the performance of duties. If an
Employee's Years of Service are canceled under Section 8.3 and cannot be
restored (because he cannot satisfy the requirement of Section 8.3(b)), his
Employment Date shall be the first day thereafter on which he completes such an
hour.
Fiscal Year means the fiscal year of ARAMARK.
Key Employee means any individual specifically approved for
participation in this Plan in accordance with the Rules and who is a management
or highly compensated employee.
Matching Contributions Account means, for each Participant, the Account
established under Section 5.3 to credit the Company's contributions under
Section 4.1.
Normal Retirement means, for any Employee, attainment of Age 65.
Parent Company means ARAMARK Corporation, a Delaware corporation.
Participant means an Employee or former Employee who has an Account
Balance under the Plan.
Period of Service means, for any Employee, the elapsed time between his
Employment Date and the date of reference, inclusive, disregarding any Break in
Service or any period during which he is not an Employee to the extent such
period falls within a period of at least twelve consecutive months in which he
has a Separation from Service by reason of resignation, discharge, or retirement
and completes no hours for which he is paid or entitled to payment, direct or
indirect, for the performance of duties. Where any portion of an Employee's
Period of Service is to be disregarded in determining Years of Service so that
non-successive periods must be aggregated, less than whole year periods shall be
aggregated on the basis that 365 days equal a whole year.
Period of Severance means, for any former Employee, the elapsed time
between his Separation from Service and the date he again becomes an Employee.
Plan means the Stock Unit Retirement Plan set forth herein.
Plan Administrative Committee means the Committee described in Article
IX which is charged with the responsibilities of administering the Plan in
accordance with the Rules.
Plan Year means the period from January 1, 1990 through September 30,
1990, and each twelve-consecutive-month period thereafter ending on September
30.
Qualified Retirement Plan means any retirement plan maintained by the
Company that is qualified under Code Section 401(a).
Retirement Savings Plan means the ARAMARK Retirement Savings Plan, a
Qualified Retirement Plan under which contributions are made pursuant to Code
Section 401(k).
Rules means the rules adopted by the Plan Administrative Committee
relating to the administration of the Plan.
Salary Deferral Account means, for each Participant, the Account
established for crediting the portion of his Account Balance attributable to
Salary Deferrals as provided in Section 5.1.
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Stock Unit Retirement Plan
Salary Deferral Percentage(s) means the percentage(s) of a
Participant's Compensation that he elects to defer under Section 3.1(a) and/or
3.1(b).
Salary Deferrals means, for each Participant, the deferrals authorized
by him as provided in Section 3.1(a) and/or 3.1(b).
Separation from Service means termination of an Employee's status as an
Employee, measured from the earlier of (a) the date the Employee resigns,
retires, is discharged or dies, or (b) the first anniversary of the first day of
absence for any other reason. In the case of an Employee who is absent from work
for maternity or paternity reasons, the twelve-consecutive month period
beginning on the first anniversary of the first date of such absence shall not
constitute a Break in Service. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence due to pregnancy of the
Employee; a birth of a child to the Employee; placement of a child with the
Employee in connection with the adoption of such child by the Employee; or care
for such child for the period beginning immediately following birth or
placement.
Sharing Participant means, for any Plan Year, a person who is an
Eligible Employee on the last day of the Plan Year (or is absent for reasons not
constituting a Separation from Service); or who has died during the Plan Year
while an Eligible Employee of the Company; or who has retired on account of
Early or Normal Retirement; or who was an Eligible Employee during the Plan Year
and who is an Employee (other than an Eligible Employee) on the last day of the
Plan Year, provided, however, that such Employee's Compensation shall be
determined by reference to his Compensation paid during his service as an
Eligible Employee. The term Sharing Participant shall not include any
Participant described in Section 7.4.
Supplemental Salary Deferrals means, for each Participant, the
deferrals authorized by him as provided in Section 3.1(b).
Year of Participation means, for any Employee, twelve months throughout
which he has made Salary Deferrals under this Plan, or any twelve-month period
during which he participated in any other Qualified Retirement Plan.
Year of Service means a credit used to determine whether a Covered
Employee has completed sufficient service to participate in the Plan, and to
determine whether a Participant has sufficient service to have a nonforfeitable
interest in his Account Balance attributable to his Matching Contributions
Account. Each Employee shall be credited with a number of Years of Service equal
to the length of his Period of Service, except that the following shall be
disregarded:
(a) any Break in Service (including any period immediately
following a Separation from Service which has lasted less than
twelve months as of the date of reference but ultimately does
last at least twelve months);
(b) any period before a Separation from Service prior to October
1, 1977; and
(c) any period for which his Years of Service are canceled under
Section 8.3 and are not restored under that Section (or, in
the case of a Break in Service that began before October 1,
1977, any period for which his Years of Service would have
been so canceled and not so restored if Article VIII had
applied when such Break in Service began).
1.2 Gender. The masculine gender shall include the feminine.
1.3 Notices. Any notice or filing to be made with the Committee or any
Company shall be made in accordance with the Rules.
B-4
Stock Unit Retirement Plan
ARTICLE II. Participation.
2.1 Eligible Employees as of Effective Date. Each Covered Employee who
satisfies the following requirements as of the Effective Date shall be eligible
to participate in the Plan as of such date:
(a) the Employee is identified as a Key Employee, and
(b) the Employee has completed one Year of Service, and
(c) the Employee is in active employment.
2.2 Other Eligible Employees. Each Covered Employee who is not eligible
to participate in the Plan on the Effective Date shall become eligible on the
first of the month coincident with or next following the later of the following:
(a) the first date on which the Employee is identified as a Key
Employee, or
(b) the first date on which the Employee completes one Year of Service.
2.3 Participation. Participation in the Plan by an Eligible Employee is
entirely voluntary and is subject to the following rules:
(a) Initial Participation on Effective Date. Each Employee who becomes
eligible to participate in the Plan on the Effective Date may
elect to participate as of such date by written notice to the Plan
Administrative Committee, on forms provided by such Committee.
Such written notice must be received by the Plan Administrative
Committee no later than December 31, 1989. Effective October 1,
1995, if such an Eligible Employee did not elect to participate as
of the Effective Date, he may elect to participate at a later date
by completing and submitting the appropriate forms, provided such
individual is an Eligible Employee at such date.
(b) Initial Participation after Effective Date. Any Employee who first
becomes eligible to participate in the Plan after the Effective
Date may elect to participate at any time after he completes the
eligibility requirements of Section 2.2; provided, such Employee
is an Eligible Employee at the time he elects to participate.
(c) Effective Date of Participation. The effective date of an
Employee's participation in the Plan shall be the first day of the
month in which the first authorized Salary Deferral is made.
(d) Continuation of Participation. If an Employee who becomes a
participant of this Plan ceases to be a Key Employee, his
eligibility for continued participation in this Plan shall be
subject to the Rules.
(e) No Duplication of Participation. Notwithstanding the foregoing
provisions of this Article, any Employee who is eligible to
participate in a Qualified Retirement Plan shall not be eligible
to participate in this Plan for the same period.
(f) Exceptions to Participation Requirements. The Plan Administrative
Committee, acting in accordance with the Rules, may waive the
eligibility requirements of Section 2.1 or Section 2.2 with
respect to any individuals the Committee specifically designates.
2.4 Beneficiary Designation. Each Participant shall have a beneficiary who
shall receive the death benefit, if any, payable under Section 6.2. Each
Participant's beneficiary shall be the person or persons designated by the
Participant on forms provided by the Committee for this purpose. A Participant
may change his beneficiary designation at any time by written notice to the
Committee, in a form approved by the Committee. If a Participant fails to elect
a beneficiary, or is not survived by a designated beneficiary, his beneficiary
shall be his estate.
B-5
Stock Unit Retirement Plan
ARTICLE III. Employee Salary Deferrals.
3.1 Salary Deferrals.
(a) Basic Salary Deferrals. Under an election procedure established by
the Committee, each Eligible Employee may direct the Company to
defer a percentage of his Compensation. The amount of the Basic
Salary Deferrals under this Section for an Eligible Employee shall
be at least 1% of his Compensation for the period to which the
election applies, and may, in multiples of 1%, be up to 6% (or
such higher percentage as the Parent Company may select from time
to time) of his Compensation, provided that in no event shall the
dollar amount of Basic Salary Deferrals under this paragraph on
behalf of any Participant in any Plan Year exceed the maximum
elective deferrals permitted under a qualified cash or deferred
plan pursuant to Section 402(g) of the Code for such Plan Year,
unless such condition is waived by the Parent Company.
(b) Supplemental Salary Deferrals. In addition to the Basic Salary
Deferrals provided for under paragraph (a) of this Section, the
Committee shall establish a procedure under which each Eligible
Employee may direct the Company to defer a supplemental percentage
of his Compensation. The amount of the Supplemental Salary
Deferrals under this Section for an Eligible Employee shall be an
amount which, when added to the Participant's Basic Salary
Deferrals for the Plan Year, totals not more than 15% (or such
higher percentage as the Parent Company may select from time to
time) of his Compensation for the period to which the election
applies.
(c) Notice to Plan Administrative Committee. An Eligible Employee who
wishes to defer Compensation under this Section for any period
shall, in the manner specified in the Rules, so notify the Plan
Administrative Committee and authorize the Committee to reduce his
Cash Remuneration for such period by the amount of his Salary
Deferral Percentage election.
3.2 Change in Contributions. A Participant may begin, stop, increase,
decrease, or resume his Salary Deferral Percentage(s) at any time; subject to
the maximums permitted under Section 3.1, by filing with the Plan Administrative
Committee a written notice authorizing the Committee to change such deferrals.
The appropriate change in the Participant's Cash Remuneration shall be made at
the earliest practicable date and in accordance with Section 3.1. Any such
change shall be effective only for Compensation earned or payable after such
election change is made, and a revocation or change in amount does not affect
amounts previously deferred. A Participant shall not be permitted to make up any
contributions which are omitted as a result of any reduction in rate.
3.3 Contributions by Plan Participants Subject to Section 16 of the
Securities Exchange Act of 1934. Notwithstanding any provision in this Article
which may be to the contrary, and as provided by SEC Rule 16b-3(d)(1)(ii), any
election made in respect of the level of Basic Salary Deferral by an Eligible
Employee who is subject to Section 16 of the Securities Exchange Act of 1934 may
not be changed, modified or revoked prior to the time it becomes effective and
shall not become effective until at least six months after such election is
made, and each and every subsequent change to, or modification or revocation of,
such election shall not become effective until at least six months after it is
made. This Section 3.3 shall be deemed deleted (or otherwise appropriately
amended as determined by the Committee with the advice of counsel) upon receipt
by the Committee of a written opinion of legal counsel satisfactory to the
Committee that the restrictions herein provided are not necessary to assure
compliance with SEC Rule 16(b) or any successor provision.
B-6
Stock Unit Retirement Plan
ARTICLE IV. Matching Contributions.
4.1 Amount of Contributions. Except as provided under Section 4.3, promptly
after the end of each Plan Year, the Parent Company may grant to the Plan for
allocation to Matching Contribution Accounts of Sharing Participants a number of
Deferred Common Stock Units equal in stated value to a minimum of 25% and a
maximum of 75% of Sharing Participants' Basic Salary Deferrals for such Plan
Year. The percentage of Salary Deferrals on which the stated value of any Plan
Year's grant of DCSU's is to be based shall be the matching percentage
contributed by the Parent Company to the Retirement Savings Plan for the same
Fiscal Year.
4.2 Allocations to Participants. The DCSU's granted with respect to a Plan
Year shall be allocated only to the Matching Contribution Account of each
Participant who is a Sharing Participant for the Plan Year based upon his Basic
Salary Deferral for such Plan Year. Fractional DCSU's may be allocated.
4.3 Allocations to Account of Retired and Deceased Participants.
Notwithstanding the provisions of Sections 4.1 and 4.2, in the case of a Sharing
Participant whose employment terminates during a Plan Year by reason of death or
retirement (on or after Early or Normal Retirement Date), the final Company
contribution for such Participant for the Plan Year during which his termination
occurs shall be allocated to his Matching Contribution Account in the form of
dollars in lieu of DCSU's.
4.4 Changes in Capital and Corporate Structure. In the event of any change
in the outstanding shares of Employer Stock by reason of recapitalization,
reclassification, reorganization, stock split, reverse stock split, combination
of shares, stock dividend or similar transaction, the Committee or the Board of
Directors of the Company shall adjust, in an equitable manner, the number of
DSU's held in Matching Contribution Accounts under the Plan or otherwise
equitably adjust the balances in the accounts so that the effect is
substantially similar to that if the DSU's were outstanding shares immediately
prior to such transaction.
ARTICLE V. Accounts and Investment Treatment of Deferred Compensation.
5.1 Credits to Participants' Accounts. Accounts shall be established for
each Participant. Each Participant's Salary Deferrals shall be credited to his
Salary Deferral Account and each Participant's allocated DSU grants shall be
credited to his Matching Contributions Account.
5.2 Interest Credited to Salary Deferrals. Amounts deferred by a
Participant in accordance with his Salary Deferral election shall accrue
interest in the manner specified by the Committee in accordance with the Rules.
Deferred amounts shall begin to accrue interest as of the first day of the month
following the month in which they would otherwise have been paid to the
Participant.
5.3 Investment of Parent Company Matching Contributions. Except as provided
under Section 4.3, the Parent Company's matching contributions under Section 4.1
shall be made in the form of Deferred Common Stock Units.
5.4 Valuation of Salary Deferral Accounts. As of the last day of each
month, all interest accrued during that period shall be credited to the
Salary Deferral Accounts of Participants.
5.5 Valuation of Matching Contributions Accounts. For informational
purposes only, the stated value of a Participant's Matching Contributions
Account may be determined at any time by multiplying the number of Deferred
Stock Units allocated to his Matching Contributions Account by the stated value
of a share of appropriate Employer Stock plus amounts, if any, allocated to such
account under Section 4.3.
B-7
Stock Unit Retirement Plan
5.6 Effect of Distributions or Withdrawals. If a distribution or withdrawal
is made, the payment determination date shall be the last day of the month in
which the distribution is due or the withdrawal is requested. The Participant's
appropriate Account or Accounts shall be reduced by the amount distributed or
withdrawn. A distribution or withdrawal shall be paid as soon as reasonably
practicable after the payment determination date. The amount due any Participant
with respect to his Salary Deferral Account shall be determined by the
end-of-month valuations under Section 5.4. Subject to the provisions of Article
VI the payment due a Participant from his Matching Contributions Account shall
be the number of whole shares of Employer Stock issued in exchange for the whole
number of Deferred Stock Units (1) allocated to his Matching Contributions
Account as of the payment determination date or (2) subsequently allocated to
his Matching Contributions Account in respect of a Plan Year. Fractional
Deferred Stock Units remaining in a Participant's Matching Contributions Account
at time of distribution shall be converted to cash at the most recent stated
value of a share of Employer Stock and paid to the Participant in cash.
5.7 Distributions from Matching Contributions Accounts. Each whole Deferred
Stock Unit is exchangeable for one share of Employer Stock at the time of
distribution or withdrawal in accordance with Section 5.6. Parent Company shall
reserve for issuance the number of shares of Employer Stock necessary to allow
for issuance of Employer Stock upon exchange of Deferred Stock Units
outstanding.
Parent Company is under no obligation to issue Employer Stock unless:
(a) The Committee is satisfied that such issuance will be in
compliance with all requirements of federal and state
securities laws; and
(b) With respect to Deferred Common Stock Units, at the time of
distribution, the Participant or former Participant agrees to
enter into such written agreement that may then be in effect
between Parent Company and any of its stockholders relating
to, among other things, the transfer and voting of Parent
Company's shares and agrees to execute such other documents as
requested by Parent Company. Failure to promptly comply with
any such request shall result in the cancellation of any
obligation of the Parent Company to exchange shares of
Employer Stock for Deferred Stock Units whereupon such
Deferred Stock Units shall be canceled, void and of no effect.
The current agreement between Parent Company and its
stockholders provides that upon termination of employment of
an employee who owns stock of Parent Company, Parent Company
has the right to purchase such stock on terms described in
said agreement, and such provision would apply to shares
received in a distribution under this Plan.
Notwithstanding any other provision hereunder, Parent Company is not
obligated to take any action to cause a registration statement under the
Securities Act of 1933, or under any blue sky laws, to become effective with
respect to exchange of Deferred Stock Units for Employer Stock. If a
Participant's Deferred Stock Units are not able to be exchanged for Employer
Stock because of potential violation of federal and/or state securities laws,
Parent Company shall exchange such Participant's Deferred Stock Units at the
time such exchange may be made without being a violation of any such laws.
As provided by SEC Rule 16b-3(c)(1), for Plan Participants subject to
Section 16 of the Securities Exchange Act of 1934, such Deferred Stock Units
(and the shares of Employer Stock into which they are exchangeable) may not be
disposed of for at least six months after the end of the Plan Year for which
such DSUs were credited to the Participant's Matching Contributions Account.
5.8 Conversion of Deferred Common Stock Units into Deferred Preferred
Stock Units. All DCSUs ((including fractional DCSUs) in a Participant's Matching
Contributions Account, that are not otherwise forfeited pursuant to Section 6.3,
shall, upon a Separation from Service, be converted into DPSUs (including, where
appropriate, fractional DPSUs), unless distributed in accordance with Section
6.1. Such conversion shall be made on the basis of the stated value of the DCSUs
and the DPSUs at such time, so that as nearly as practicable the stated value of
the DCSUs in the Participant's Matching Contributions Account immediately before
the conversion shall be equal to the stated value of the DPSUs in the
Participant's Matching Contributions Account immediately after the conversion.
B-8
Stock Unit Retirement Plan
5.9 Growth in Deferred Preferred Stock Units. Whether or not dividends are
actually declared or paid on Employer Preferred Stock, until the date DPSUs in a
Participant's Matching Contributions Account are exchanged into Employer
Preferred Stock, the number of DPSUs in that Participant's Matching
Contributions Account shall be increased every year on December 1st by the
result of (1) multiplying the stated dividend rate of the Employer Preferred
Stock by the number of DPSUs in Participant's Matching Contributions Account
immediately prior to such increase and (2) dividing the product by $1,000. The
stated value of a Participant's Matching Contributions Account on the date the
DPSUs are exchanged into Employer Preferred Stock should be substantially equal
to the liquidation value of the number of shares of Employer Preferred Stock to
be issued on the date of conversion (including accrued dividends). When DPSU's
are exchanged into Employer Preferred Stock on a date other than December 1st,
the number of DPSU's being exchanged will be similarly increased to reflect that
portion of the year since the previous December 1st.
ARTICLE VI. Distribution on Separation from Service.
6.1 Termination of Employment on Account of Retirement or After Completion
of Two Years of Participation or Five Years of Service. A Participant's entire
Account Balance may be payable to him, in accordance with Section 6.5, following
a Separation from Service but only if his Separation from Service: (a) is on
account of Early or Normal Retirement, or, (b) except as provided in Section 6.4
below, occurs after he completes two or more Years of Participation or is
credited with five or more Years of Service.
6.2 Death. Upon the death of a Participant at any time, his entire Account
Balance shall be payable, in accordance with Section 5.6, to the beneficiary
designated or otherwise applicable pursuant to Section 2.4.
6.3 Termination of Employment Prior to Completing Two Years of
Participation or Five Years of Service. Except as provided in Section 6.1 and
Section 6.2, a Participant who ceases to be an Employee before completing two
Years of Participation and before receiving credit for five or more Years of
Service shall be paid his entire Account Balance other than his Matching
Contributions Account, which shall be forfeited, in accordance with Section 6.5.
6.4 Separation from Service for Cause. A Participant who ceases to be an
Employee before receiving credit for five or more Years of Service and whose
Separation from Service is on account of commission of a crime or other conduct
which directly and adversely affects the Company, or disclosure of confidential
information, or other aid and assistance to a competitor of the Company, shall
be paid his entire Account Balance other than his Matching Contributions
Account, which shall be forfeited. The determination of cause under this Section
shall be made by the Committee, and shall be final and binding on all parties.
6.5 Method of Payment. Payment of Accounts upon a distribution or
withdrawal shall be made in accordance with Section 5.6. The Participant or his
beneficiary shall receive distribution of his Salary Deferral Account, in a lump
sum in cash, and he or his beneficiary shall receive distribution of his
Matching Contributions Account in the form of whole shares of Employer Stock and
cash in exchange for any fractional Deferred Stock Units allocated to such
Account, or any amounts allocated under Section 4.3. Any Employer Common Stock
distributed under this Plan shall be subject to the Parent Company's right to
purchase such stock on terms described in the then-current agreement between
Parent Company and its stockholders, and any Employer Preferred Stock so
distributed shall be subject to the Parent Company's right to purchase such
stock in accordance with the Parent Company's Certificate of Incorporation.
Distribution of a Participant's Accounts shall be made in a single payment or in
installments pursuant to a valid election made by the Participant in accordance
with Section 9.2 and the Rules.
B-9
Stock Unit Retirement Plan
ARTICLE VII. Withdrawals During Employment.
7.1 Before Completing Two Years of Participation or Five Years of Service.
A Participant who has completed fewer than two Years of Participation and who
has fewer than five Years of Service to his credit may withdraw, subject to
Section 7.5, his Salary Deferral Account by filing a written notice with the
Plan Administrative Committee. In such event, his entire Matching Contributions
Account shall be forfeited.
7.2 After Completing Two Years of Participation or Five Years of Service. A
Participant who has completed two or more Years of Participation or who has to
his credit five or more Years of Service may, subject to Section 7.5, withdraw
all or a portion of his Salary Deferral Account by filing a written notice with
the Plan Administrative Committee.
7.3 Withdrawal of Matching Contributions Account. A Participant is not
permitted to withdraw any amounts from his Matching Contributions Account while
still an Employee.
7.4 Participation in the Plan after Withdrawal. A Participant who makes a
withdrawal under Section 7.1 or 7.2 shall be ineligible to receive any share of
the Company's contribution which otherwise would have been allocated to him
under Article IV for the Plan Year during which the withdrawal is made.
7.5 Special Rules Applicable to Withdrawals Prior to Termination of
Employment. Prior to termination of employment, a Participant may make
withdrawals from his Salary Deferral Account if approved by the Plan
Administrative Committee in its sole discretion. The Participant shall certify
in writing to the Plan Administrative Committee that the purpose of the
withdrawal is to meet an immediate and heavy financial need upon the Participant
which need cannot be met from other resources reasonably available to the
Participant, and shall provide such documentation to that effect as may be
requested by the Plan Administrative Committee to assist it in its
determination.
ARTICLE VIII. Breaks in Service.
8.1 Former Employees with a Year of Service. If a former Employee who has
at any time been credited with a Year of Service becomes a Covered Employee, he
shall become an Eligible Employee on the later of the date on which he so
becomes a Covered Employee or the day on which he would have become an Eligible
Employee if he had been a Covered Employee at all times between the date of his
Separation from Service and the date he so became an Eligible Employee.
8.2 Former Employees without a Year of Service. If a former Employee who
has never been credited with a Year Service becomes an Eligible Employee, he
shall become an Eligible Employee as provided in Article II, except that he
shall be treated as if he were not an Employee at any time prior to the end of
his last Break in Service.
8.3 Cancellation of Years of Service. An Employee's Years of Service and
Years of Participation shall be canceled for purposes of computing his
nonforfeitable interest in his Account Balance under Articles VI and VII if he
has a Separation from Service before he has met the requirements for Early or
Normal Retirement, or before he is credited with two Years of Participation, or
five Years of Service. If a former Employee again becomes an Employee his Years
of Service and Years of Participation shall be restored if he becomes an
Employee before incurring five consecutive Breaks in Service, or if he was at
any time a Participant in the Plan, and
(a) he is credited with a Year of Service after his prior Years of
Service were canceled; and
(b) he had to his credit when his Years of Service were canceled a
Period of Service longer than his longest Period of Severance that
follows the date his Years of Service were canceled.
B-10
Stock Unit Retirement Plan
ARTICLE IX. Administration.
9.1 Overall Responsibility. Parent Company, acting by resolution of its
Board of Directors or of a duly authorized Committee, shall have overall
responsibility and authority for the Plan including control and management of
the Accounts of the Plan, design of the Plan, the right to amend the Plan, the
exercise of all administrative functions provided in the Plan or necessary to
the operation of the Plan, except such functions as are assigned to other
persons pursuant to the Plan.
9.2 Committee.
(a) Appointment and Tenure. Parent Company shall appoint a Plan
Administrative Committee, which shall each consist of not less
than three members, each of whom (1) shall be a member of the
Board of Directors of the Parent Company, (2) shall not be an
Employee, and (3) shall be a disinterested person (within the
meaning of Section (c) (2) of SEC Rule 16b-3, or any successor
provision). The Committee shall hold office during the pleasure of
the Board of Directors of Parent Company, and such Board of
Directors shall fill all vacancies on the Committee.
(b) Action to be by Majority of Committee. Any act which this Plan
authorizes or requires the Committee to do may be done by a
majority of the members of the Committee at the time acting
hereunder; and the action of such majority of the members of the
Committee expressed from time to time by a vote at a meeting, or
in writing without a meeting, shall constitute the action of the
Committee and shall have the same effect for all purposes as if
assented to by all of the members of the Committee at the time in
office.
(c) Secretary of Committee. The Committee shall appoint a Secretary
who may or may not be a member of the Committee, and such other
agents or representatives as it may deem advisable, who need not
be members of the Committee but may or may not be Participants
under this Plan, to keep the records of the Committee and to
assist it in doing any other acts or things to be done or
performed by the Committee. The Secretary of the Committee shall
be Agent for Service of Process for the Plan.
(d) Disqualification to Vote. A member of the Committee who is also a
Participant hereunder shall not act, vote, or otherwise influence
a decision of the Committee relating solely to his own
participation under the Plan except that he may be counted present
for purposes of a quorum at any meeting of the Committee during
which such act, vote or decision is taken or made.
(e) Administrator of the Plan. The Plan Administrative Committee shall
be sole administrator of the Plan and as such have sole
responsibility and authority to control the operation and
administration of the Plan, including, without limiting the
generality of the foregoing, (i) determination of benefit
eligibility and amount and certification thereof, (ii) issuance of
directions to pay any fees, taxes, charges, or other costs
incidental to the operation and management by the administrator of
the Plan; (iii) issuance of directions as to the cash needs of the
Plan; (iv) the preparation and filing of all reports required to
be filed with any agency of the government; (v) compliance with
all disclosure requirements imposed by law; (vi) maintenance of
all books of account, records and other data as may be necessary
for proper administration of the Plan, (vii) approval of the
amount of employer contribution referred to in Section 4.1,
provided, however, that the Plan Administrative Committee may
delegate to other persons such of its functions (other than (vii)
above) as it deems appropriate.
(f) Rules of Administration. The Plan Administrative Committee shall
adopt such Rules and regulations for administration of the Plan as
it considers desirable, provided they do not conflict with the
Plan, and may construe the Plan, correct defects, supply omissions
and reconcile inconsistencies to the extent necessary to
effectuate the Plan and such action shall be conclusive. Records
of administration of the Plan shall be kept, and Employees and
their beneficiaries may examine records pertaining to themselves.
However, in the event of an extended Deferral, DCSU's shall be
converted into DPSU's in accordance with Section 5.8.
B-11
Stock Unit Retirement Plan
(g) Claims Procedure. The Committee shall adopt a written procedure
whereunder a Participant or beneficiary shall appeal any denial of
benefits claimed to be due such Participant or beneficiary.
(h) Compensation and Expenses. The members of the Committee shall
serve without compensation for services as such, but all normal
and reasonable expenses of the Committee shall be paid by ARAMARK.
(i) Reliance on Reports and Certificate. The Committee will be
entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports which will be furnished by any
accountant, controller, counsel, or other person who is employed
or engaged for such purposes.
(j) Liability and Responsibility of Committee. The members of the
Committee shall be fully protected in respect to any action taken
or suffered by them in good faith in reliance upon the advice of
its advisors. To the extent permitted by law, the Company shall
indemnify members of the Committee against any liability or loss
sustained by reason of any act or failure to act in such capacity
as Committee members, if such act or failure to act does not
involve willful misconduct. Such indemnification includes
attorneys' fees and other costs and expenses reasonably incurred
in defense of any action brought against such members by reason of
any such act or failure to act. No bond or other security shall be
required of any member of the Committee unless the member handles
funds or other property of the Plan.
(k) Elections to Extend Deferrals After a Separation from Service. In
addition to the other powers and authority granted under this
Section 9.2, the Plan Administrative Committee shall be
specifically authorized to adopt Rules to allow Participants to
elect to defer those distributions, that would otherwise be
payable upon a Separation from Service pursuant to Section 6.1, to
a time or times after the Separation from Service. Such Rules may
specify the manner in which any such election may be made, and for
example may provide, among other things, that any such election
must be made in writing prior to such Separation from Service, on
the forms established by the Plan Administrative Committee, and
that once made any such election is irrevocable.
9.3 Services of the Plan. Parent Company and the Committee may contract for
legal, investment advisory, medical, accounting, clerical, and other services to
carry out the Plan. The costs of such services shall be paid by ARAMARK.
9.4 Liability for Administration. Neither the Committee, the Company,
Parent Company, nor any of its directors, officers, or employees shall be liable
for any loss due to its error or omission in administration of the Plan unless
the loss is due to the gross negligence or willful misconduct of the party to be
charged.
ARTICLE X. No Segregation of Assets.
10.1 The Plan shall at all times be entirely unfunded and no provision
shall at any time be made with respect to segregating assets of the Company, or
any Affiliate, for payment of any benefits hereunder. No Participant or other
person shall have any interest in any particular assets of the Company by reason
of the right to receive a benefit under the Plan and any such Participant or
other person shall have only the rights of a general unsecured creditor of
ARAMARK with respect to any rights under the Plan.
B-12
Stock Unit Retirement Plan
ARTICLE XI. Amendment and Termination.
11.1 Amendment or Termination of Plan. The amendment and restatement of this
Plan shall be effective upon approval of the Plan as amended and restated by the
affirmative vote of the holders of a majority of the securities of the Parent
Company present, or represented, and entitled to vote at a meeting of such
shareholders. Any subsequent amendment shall be similarly approved if the
amendment would (a) materially increase the benefits accruing to Participants
under the Plan; (b) materially increase the number of shares of Employer Stock
which may be issued under the Plan; or (c) materially modify the requirements
for eligibility for participation in the Plan. Parent Company may terminate the
Plan or subject to the foregoing amend the Plan at any time by or pursuant to a
resolution of its Board of Directors.
11.2 Sale of Affiliate. In the event that a Participant in this Plan ceases
to be an Employee by reason of the sale or spin-off of an Affiliate, such
Participant shall be treated as a terminated employee and distribution of his
Account Balance under this Plan shall be made in accordance with Article VI.
ARTICLE XII. Miscellaneous.
12.1 No Assignment or Alienation of Benefits. Except as hereinafter provided
with respect to "family disputes," a Participant's Account may not be
voluntarily or involuntarily assigned or alienated. In cases of "family
dispute," the Company will observe the terms of the Plan unless or until ordered
to do otherwise by a state or Federal court. The term "family dispute" for
purposes of this Section 12.1 includes both marital disputes and support orders
for family members or other dependents. As a condition of participation, a
Participant agrees to hold the Company harmless from any claims that arise out
of the Company's obeying the final order of any state or Federal court, whether
such order effects a judgment of such court or is issued to enforce a judgment
or order of another court. In addition, for application only to Plan
Participants subject to Section 16 of the Securities Exchange Act of 1934, the
provisions of SEC Rule 16b-3(a)(2) (or any successor provision) are specifically
incorporated herein by reference.
12.2 Effect on Employment. This Plan shall not confer upon any person any
right to be continued in the employment of the Company or an Affiliate.
12.3 Facility of Payment. If ARAMARK deems any person incapable of receiving
benefits to which he is entitled by reason of minority, illness, infirmity, or
other incapacity, it may direct that payment be made directly for the benefit of
such person or to any person selected by ARAMARK to disburse it, whose receipt
shall be a complete acquittance therefore. Such payments shall, to the extent
thereof, discharge all liability of ARAMARK, the Company, and the party making
the payment.
12.4 Tax Withholding. Distributions from the Plan may be subject to tax
withholding for Federal, state, and local taxes. Participant, by agreeing to
participate in the Plan, consents to the timely withholding of such taxes,
either through a reduction in the amount of the distribution, withholding from
other amounts payable by Company to Participant, including salary and bonus
payments, or by payment to ARAMARK in cash of an appropriate amount in taxes.
12.5 Applicable Law. Except as provided by Federal law, the Plan shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, except for provisions relating to Employer Stock, which shall be
governed by and construed in accordance with the laws of the State of Delaware.
12.6 Effective Date. The foregoing provisions of this Plan shall apply to
individuals (or beneficiaries of individuals) who are Employees on or after the
Effective Date set forth under the title of the Plan, except as may otherwise be
provided in the Plan. The rights of any other individual (or beneficiary) shall
be determined by the provisions of the Plan as in effect on the date of such
individual's latest Separation from Service except as may be provided by
specific reference in any amendment adopted thereafter.
B-13
Stock Unit Retirement Plan
12.7 SEC Rule 16b-3. This plan is intended to come within the safe harbor
provided by SEC Rule 16b-3 (or any successor provision) with respect to persons
who are subject to Section 16 of the Securities Exchange Act of 1934. Any
provision required by such Rule to be set forth in this Plan is incorporated
herein by reference, and any inconsistent provision herein (other than Section
11.1) is superseded.
B-14
Stock Unit Retirement Plan
LOGO ARAMARK
ARAMARK CORPORATION
PROXY CARD
SOLICITED BY THE BOARD OF DIRECTORS
Joseph Neubauer, Martin W. Spector and Donald S. Morton (each with power of
substitution) are hereby authorized to vote all the shares which the undersigned
would be entitled to vote if personally present at the annual meeting of
stockholders of ARAMARK Corporation (the "Company") to be held on February 13,
1996 and at any adjournment, as follows:
1. Election of Directors
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the for all nominees listed below
contrary below)
R.J. Callander, A.K. Campbell, R.R. Davenport, P.L. Defliese,
L.F. Driscoll, Jr., M.S. Fromstein, E.G. Jordan, T.H. Kean,
R.C. MacDonald, J. Neubauer, J.E. Preston
(To withhold authority to vote FOR, write name(s) on line:
- --------------------------------------------------------)
2. To consider and act upon a proposal to approve the
Combined Stock Ownership Plan
[ ] FOR [ ] ABSTAIN [ ] AGAINST
3. To consider and act upon a proposal to approve the
Stock Unit Retirement Plan
[ ] FOR [ ] ABSTAIN [ ] AGAINST
4. In their discretion upon such other matters as may properly come before
this meeting
[ ] GRANT AUTHORITY [ ] WITHHOLD AUTHORITY
(Continued and to be signed on reverse side)
Any of the above-named proxy agents or their substitutes present and acting
at the meeting shall have all the powers conferred hereby.
If no choice is specified and the card is properly signed and returned, the
shares represented by the proxy card will be voted FOR the election of
directors, the approval of the Combined Stock Ownership Plan and the
approval of the Stock Unit Retirement Plan.
Dated:
------------------------ ---------------------------------
Signature of Stockholder
IMPORTANT: Please sign exactly as
your name or names appear hereon.
Joint owners should each sign
personally. If you sign as agent or
in another representative capacity,
please state the capacity in which
you sign.
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
LOGO ARAMARK
PLEASE INDICATE ANY ADDRESS CORRECTIONS OR CHANGES ABOVE.