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PROSPECTUS ISPO 1997
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ARAMARK CORPORATION
ARAMARK Ownership Program
Installment Stock Purchase Opportunities
18,823,703 Shares
Common Stock, Class B, $.01 Par Value
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ARAMARK Corporation is offering you an opportunity to participate in
the ownership of our Company. To enable you to acquire shares of stock in the
Company, we have granted to you a purchase opportunity.
In general, a purchase opportunity permits you to purchase shares of
stock of our Company at the appraisal price for the stock at the time you
received the grant.
To facilitate your ability to purchase stock, we have developed a
program that permits you to defer up to 75% of the purchase price of the stock
you buy. In addition to purchasing stock by personal check, you may sell or
exchange stock of our Company that you already own.
Your ability to transfer stock which you purchase will be limited
because our Company's stock is not traded publicly and because by exercising
your right to purchase stock through a purchase opportunity, you will become
bound by the terms of a Stockholders' Agreement.
This prospectus provides you with detailed information about stock
purchase opportunities. In addition, you may obtain information about the
Company from documents that we have filed with the Securities and Exchange
Commission ("SEC"). We encourage you to read this entire document carefully.
The Company has recently announced Share 100, a proposal to
restructure the ownership of the Company. See "Share 100."
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See Page B-1 For Forms And Instructions
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus is December 1, 1997. You should not assume
that the information contained in this prospectus is accurate as of any date
other than such date, and neither the delivery of this prospectus nor any sale
made through its use shall create any implication to the contrary. This
prospectus does not constitute an offer or solicitation in any jurisdiction in
which such offer or solicitation is not authorized or in any jurisdiction in
which the Company is not qualified to make such an offer or solicitation or to
anyone to whom it is unlawful to make such offer or solicitation.
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TABLE OF CONTENTS
Where You Can Find More Information...................................... 2
Prospectus Summary....................................................... 3
Share 100................................................................ 4
Questions and Answers.................................................... 5
About This Prospectus.................................................... 14
The ARAMARK Ownership Program............................................ 14
The Deferred Payment Program............................................. 15
U.S. Income Tax Considerations........................................... 16
Description of Equity Securities......................................... 17
Experts.................................................................. 18
Incorporation of Certain Documents by Reference.......................... 18
Annex A -- Amended and Restated Stockholders' Agreement.................. A-1
Annex B -- Exercise Forms and Instructions............................... B-1
WHERE YOU CAN FIND MORE INFORMATION
ARAMARK files annual, quarterly and special reports, and other
information with the SEC. You may read and copy any reports, statements or
other information the Company files at the SEC's public reference rooms in
Washington, DC, New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from commercial document
retrieval services and at the web site maintained by the SEC at
"http://www.sec.gov."
ARAMARK has filed registration statements to register with the SEC the
Common Stock to be issued when you exercise a purchase opportunity granted
under the ARAMARK Ownership Program. As allowed by SEC rules, this prospectus
does not contain in it all the information you can find in the registration
statements or exhibits or amendments to the registration statements.
The Company will provide without charge to each person holding a
purchase opportunity granted under the ARAMARK Ownership Program, upon the
request of such person, a copy of any or all of the documents which are
incorporated by reference herein, other than exhibits to such documents.
Written or telephone requests should be directed to ARAMARK Shareholder
Services Group at First Union National Bank toll free at 1-888-96-OWNER
(1-888-966-9637) at 123 South Broad Street, MCPA 1328, Philadelphia, PA USA
19109.
If you have not received a copy of ARAMARK`s most recent annual report
on Form 10-K, or if you have any questions about the ARAMARK Ownership Program
or would like to obtain further information, you should call the ARAMARK
Shareholder Services Group at First Union National Bank toll free at
1-888-96-OWNER (1-888-966-9637) at 123 South Broad Street, MCPA 1328,
Philadelphia, PA USA 19109.
ARAMARK Corporation is a Delaware corporation with its principal
offices located at ARAMARK Tower, 1101 Market Street, Philadelphia, PA 19107
(telephone 215-238-3000). When we use the word "Company" herein to describe
ARAMARK, we are referring to ARAMARK Corporation and its subsidiaries unless
the context otherwise requires.
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PROSPECTUS SUMMARY
This summary highlights selected information from this document and
may not contain all of the information that is important to you. You should
read carefully this entire document and the documents we have referred you to.
See "Where You Can Find More Information."
The Company
ARAMARK is a world leader in managed services including food and
support services, uniform and career apparel, educational resources, and
magazine distribution.
Share 100
The Company has recently announced Share 100, a proposal to
restructure the ownership of the Company. Share 100 will not directly affect
this exercise period because the exercise period will end January 15, prior to
Share 100. However, Share 100 will change all the shares you own, including
any shares you acquire during this exercise period. See "Share 100."
The ARAMARK Ownership Program
The ARAMARK Ownership Program provides you with an opportunity to
purchase shares of the Company at a price determined at the time your purchase
opportunity is granted.
Under the program you have received a grant certificate that entitles
you to purchase a specific number of shares.
Each Installment Stock Purchase Opportunity ("ISPO") has an
installment schedule that limits the number of shares of Common Stock that you
may purchase during each annual installment exercise period. Unless you
exercise the first installment by its expiration date for at least 100 shares,
your entire purchase opportunity for all installments will be canceled. You
may exercise any subsequent annual installment for up to the maximum number of
shares specified in your certificate for that installment. However, you may
not exercise any subsequent installment for less than 100 shares. Any portion
of an annual installment you do not exercise by the appropriate expiration
date is canceled.
Stockholders' Agreement
By purchasing stock under the program you will be agreeing to be bound
by the terms of a Stockholders' Agreement to which all stockholders are
parties.
Under the Stockholders' Agreement, the stock owned by you can only be
transferred in limited circumstances. In addition, upon your termination of
employment, the Company may, but is not generally obligated to, repurchase
your shares.
A copy of the Stockholders' Agreement is attached as Annex A to this
prospectus.
How to Purchase Shares
To purchase stock under the program you must (1) complete the
appropriate forms (see page B-1) and (2) pay the aggregate purchase price for
the stock plus the aggregate amount of taxes required to be withheld (as
computed in the exercise form).
Payment for the Shares
You may pay for your stock (including any applicable withholding
taxes) using any combination of the following:
(1) defer up to 75% of the total purchase price under the ARAMARK
Deferred Payment Program.
(2) sell ARAMARK shares that you already own if the Internal Market is
open at that time.
(3) use ARAMARK shares that you currently own in a stock-for-stock
exercise for up to the purchase price (not including required withholding
taxes).
(4) by personal check.
Other Factors
Before you make a decision to invest in our Company, we urge you to
read this prospectus and the Company's most recent annual report on Form 10-K
and other information that we have filed with the SEC. See "Where You Can Find
More Information."
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SHARE 100
If you already own stock, you recently had the opportunity to attend a
meeting explaining Share 100, which is ARAMARK's proposal to restructure the
ownership of the Company. Here are some key facts about Share 100, which you
will want to keep in mind during this exercise period.
Share 100 will not directly affect this exercise period because the
exercise period will end January 15, prior to Share 100. However, Share 100
will change all the shares you own, including any shares you acquire during
this exercise period.
Timetable
o In mid-January, we will mail to all shareholders a proxy statement with
full written details about the Share 100 proposal. However, you may not
receive the proxy statement until after the January 15 expiration of this
exercise period.
o You, along with all other owners of the Company, will have a chance to
vote on Share 100.
o If approved, Share 100 would go into effect immediately following
ARAMARK's annual stockholders' meeting currently scheduled for February
10.
What It Means
o If approved, it means that ARAMARK will be 100% employee-owned.
Currently, employees own about 80% of the Company, with the remaining 20%
held by outside investors. ARAMARK would repurchase this 20% plus a
portion of the ARAMARK shares held by ARAMARK's benefit plans using
approximately $440 million of additional bank borrowings.
o It also means that the structure of the Company's stock would change. To
give employees a greater opportunity to affect the value of their stock
ownership, Share 100 would create 2 types of stock:
1. Business Group-specific, with separate stock for each of our
principal Business Groups--Food and Support Services; Uniform and
Career Apparel; and Educational Resources.
2. Composite stock, which will consist of a blending of the three
Business Group stocks.
Both types of stock, Business Group and Composite, would start off
with the same appraisal price of $29.55 per share on February 10.
What You'll Get
o If you work for a Business Group, 50% of the stock you own as of February
10 would be exchanged for the stock of your Business Group, and the other
50% would be exchanged for the Composite stock. In other words, if you
owned 1,000 shares of ARAMARK Common stock, this would be exchanged for
500 shares of your Business Group Stock, and 500 shares of Composite
stock. If you work for Corporate, 100% of your ARAMARK Common stock would
be exchanged for Composite stock.
o This same apportionment will be applied to all outstanding shares
under any grant (s) you may hold.
o Shares will be exchanged automatically, unless you choose to take
cash. You will have the opportunity to choose, when you receive the
proxy statement in January.
o If you work for Magazine & Book, you will receive separate
communications.
For Your Records
o Following the upcoming exercise period, you'll receive a report which
will list all shares you have purchased to date, along with the dates
that these shares were issued to you. This will give you a snapshot view
of your stock ownership prior to the implementation of Share 100.
o After the annual shareholders' meeting on February 10, and assuming that
Share 100 is approved, you'll receive an ownership statement showing your
stock ownership and outstanding purchase opportunities both prior to
Share 100, as well as afterwards with the data expressed in terms of the
new classes of stock created as a result of Share 100. You'll also
receive an updated report.
o Assuming Share 100 is approved, retirement plan participants will receive
an updated statement in March reflecting Share 100's impact on Company
contributions invested in stock.
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QUESTIONS AND ANSWERS
To assist you in better understanding purchase opportunities and the
ARAMARK Ownership Program, we have raised below frequently asked questions and
have answered them for you. For more complete answers to your questions, you
should read the text of the Stockholders' Agreement (references to which
appear in the answers) attached as Annex A to this prospectus. For your
convenience, we have grouped the questions and answers by topic.
Topic Q/A
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General..................................................................1 - 2
Installment Stock Purchase Opportunities
General...........................................................3 - 13
How to Purchase and Pay Taxes Due.................................14 - 20
Deferred Payment Program..........................................21 - 32
Sale of Currently-Owned Shares....................................33 - 34
Stock-for-Stock Exercises.........................................35 - 41
Borrowing...........................................................42
Stock Ownership
General...........................................................43 - 46
Transferring Shares...............................................47 - 50
Pledging Shares...................................................51 - 53
Sales While Employed
General...........................................................54 - 55
Internal Market.....................................................56
Emergency Buy-Back Program..........................................57
Offer-to-Sell.......................................................58
Sales Upon Termination of Employment
General...........................................................59 - 64
Stock Repurchase Policy...........................................65 - 69
Installment Notes.................................................70 - 72
1. Q: What is ARAMARK Corporation?
A: The Company was formed by a group of investors led by senior
management in a management buyout transaction in 1984. Management
investors directly own more than 50% of the equity of the Company.
2. Q: Are the shares of Common Stock being offered the same as the shares
owned by current management investors?
A: Yes, they are shares of Class B Common Stock with the same rights and
obligations to which current management investors are subject under
the Stockholders' Agreement.
3. Q: What is an Installment Stock Purchase Opportunity (ISPO)?
A: The Board of Directors, upon the advice and recommendation of senior
management, has approved the grant of an opportunity to participate in
the ownership of ARAMARK to selected management employees. This is
called an Installment Stock Purchase Opportunity, and is made to you
in the form of a certificate of grant.
4. Q: Am I required to purchase shares?
A: No. Any exercise of all or any portion of your purchase opportunity by
you is strictly voluntary.
5. Q: What is the purchase price per share?
A: The price per share for all installments of your purchase opportunity
is set at the time your purchase opportunity is granted. The price
appears on your grant certificate and represents the Appraisal Price
based on the most recent available independent appraisal at the time
of grant. This price remains fixed throughout all of the installment
periods subject to adjustments for stock dividends, stock splits,
reorganizations, mergers or the like as described in Question 6 below.
For purchase opportunities granted prior to November 10, 1993, the
price per share has been decreased
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as a result of the stock split declared as of that date. Statements
with the adjusted terms of each holder's purchase opportunities are
distributed annually. Call 1-888-96-OWNER (1-888-966-9637) for the
current appraisal price.
6. Q: Is my purchase opportunity adjusted in the event of a Common Stock
dividend, split, reorganization, merger or the like?
A: In such cases your purchase opportunity will be equitably adjusted, if
appropriate, as determined by the Human Resources, Compensation and
Public Affairs Committee of the Board of Directors.
7. Q: When can I exercise my purchase opportunity and purchase shares?
A: Your purchase opportunity can be exercised only in the installments
authorized on your certificate and only during the corresponding
installment exercise periods. There is a minimum and maximum number of
shares you can purchase in each installment. The normal installment
exercise period is December 15 - January 15 of each year. You should
refer to your grant certificate for the installment exercise periods
applicable to your purchase opportunity.
8. Q: Can I exercise an installment prior to its corresponding installment
exercise period?
A: No. You may exercise an installment, and thereby purchase shares, only
during its corresponding installment exercise period.
9. Q: How many shares can I purchase in each installment?
A: In any installment, you may exercise up to the maximum number of
shares, but not less than the minimum number of shares, set forth for
such installment in your grant certificate. For purchase opportunities
granted prior to November 10, 1993, the number of shares have been
increased as a result of the stock split declared as of that date.
Statements with the adjusted terms of each holder's purchase
opportunities are distributed annually.
10. Q: Can I still exercise a subsequent installment even if I do not exercise
the first installment?
A: No. Unless the first installment is exercised for at least 100 shares,
the entire purchase opportunity for all installments will be canceled
upon the expiration of the first exercise period.
11. Q: If I exercise the first installment, must I exercise additional
installments?
A: No. Exercise of any installment does not obligate you
to exercise any other installment.
12. Q: If I do not exercise an installment for the maximum, what happens to
the unexercised portion of the installment?
A: Any unexercised portion of any installment will be canceled upon
expiration of the corresponding exercise period.
13. Q: What if my employment is terminated?
A: Your entire remaining unexercised purchase opportunity is canceled if
your employment with the Company and its subsidiaries (or any entity
designated by the board of directors in which the Company continues to
own an equity interest) is terminated for any reason. However, you will
own any shares you purchased pursuant to any prior exercises of
installments. These shares will be subject to the Company's right to
repurchase pursuant to the Stockholder's Agreement.
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14. Q: How do I purchase shares of Common Stock?
A: To exercise an installment of your purchase opportunity and purchase
shares, you must deliver to the Company before the last day of the
exercise period, at the address which appears on the exercise forms
included in this prospectus as Annex B, (1) your completed exercise
forms and (2) payment of the aggregate purchase price plus the
aggregate amount of applicable taxes required to be withheld or
collected. Instructions for computing taxes required to be withheld are
included on the exercise form.
15. Q: How do I make payment for the purchase price?
A: You may be eligible to use a combination of any of the following means
to pay for the aggregate purchase price (including any required
withholding taxes) upon exercise of your purchase opportunity:
(1) the ARAMARK Deferred Payment Program for up to 75% of the total
purchase price, (2) the sale of shares of Common Stock, (3) the use of
shares of Common Stock that you currently own in a stock-for-stock
exercise for up to the purchase price (not including any required
withholding taxes), and (4) by personal check.
Questions 16-19 apply to U.S.-based employees. Non-U.S. based employees should
check with their tax advisors concerning tax law requirements in their
countries.
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16. Q: What taxes will I owe when I exercise an installment?
A: All outstanding purchase opportunities are non-qualified options for
U.S. income tax purposes. Under current U.S. tax laws, when you
exercise an installment, the difference (if any) between the exercise
price and any higher Appraisal Price of the Common Stock at the time of
the exercise is considered ordinary taxable income. The Company is
required to withhold taxes at the time of the exercise. These include
U.S. income taxes, social security taxes (if appropriate), and
applicable state income and unemployment taxes (depending on the state
in which you are employed). Based on present law, 38% of the "spread"
between exercise price and Appraisal Price is normally withheld by the
Company and applied toward these taxes. This is not necessarily the
entire amount of tax that you will owe as a result of this exercise.
Additional tax, including additional withholding and estimated tax
payments, may be required to meet your full tax liability due to this
exercise. You should discuss your particular situation with your tax
advisor.
17. Q: Will the Company report to the U.S. IRS the taxable income (if any)
that I realize upon the exercise of my purchase opportunity?
A: For U.S. based employees, the taxable income (if any) and the taxes
withheld will be reported on your W-2 form for the year in which the
purchase occurs. The purchase occurs at the time your completed
exercise forms and your purchase price payment are received and
processed by the Company.
For example, if your exercise forms and purchase price payment for the
appropriate installment are received by the Company in December 1997,
the taxable income and the taxes collected will be reported on your W-2
form for 1997; and if they are received in January 1998, the taxable
income and the taxes collected will be reported on your W-2 form for
1998. You may wish to consult with your tax advisor when considering
the time, within an installment exercise period, to exercise a purchase
opportunity.
18. Q: Can I compute the amount of withholding tax I must deposit with the
Company prior to exercising an installment?
A: Yes. A portion of the exercise form (included in this prospectus as
Annex B) leads you through the computation of the estimated amount to
be withheld or collected to cover applicable taxes.
19. Q: How are estimated withholding taxes applied?
A: It is possible (depending on your personal situation and the state in
which you are employed) that the amount estimated at 38% to be withheld
or collected will not be sufficient to cover the actual taxes the
Company is required to withhold at the time of exercise. In such event,
additional taxes may be withheld from subsequent paychecks. If the
actual amount required to be withheld is less than the estimated
amount, the difference will be refunded in a subsequent paycheck.
20. Q: How will I know what the Appraisal Price of the Common Stock is
during the exercise period when I can exercise an installment?
A: The Company's current practice is to have the Common Stock
independently appraised quarterly (December 1, March 1, June 1,
September 1) by an independent appraiser. The Appraisal Price at
December 1, 1997 was $24.90.
This information is generally communicated with the Chairman's
quarterly letter to shareholders. Additionally, recorded updates in the
Appraisal Price can be obtained by calling 1-888-96-OWNER.
21. Q: What is the Deferred Payment Program?
A: The Deferred Payment Program is a Company program that allows you to
purchase shares of Common Stock for certain installments pursuant to
your exercise of a stock purchase opportunity installment and to defer
paying a portion of the purchase price.
22. Q: Who is eligible to participate in the Deferred Payment Program?
A: Generally, you may participate in the Deferred Payment Program for the
fourth, fifth and sixth installment exercise for any purchase
opportunity.
23. Q: Will the Deferred Payment Program be offered for exercises in the
future?
A: The Company anticipates the Deferred Payment Program will be offered
annually for each fourth, fifth and sixth purchase opportunity
installment. However, the Board of Directors may cancel or modify the
Deferred Payment Program at any time.
24. Q: Do I have to participate in the Deferred Payment Program?
A: No. Any participation by you is strictly voluntary.
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25. Q: How much of the purchase price payment may I defer under the Deferred
Payment Program?
A: You may defer payment of up to 75% of the total purchase price
(including required withholding taxes) for the shares you are
purchasing through exercise of your purchase opportunity.
26. Q: How do I elect to participate in the Deferred Payment Program?
A: The exercise forms included in Annex B provide for your electing to
participate in the Deferred Payment Program. A portion of the exercise
form leads you through the election and computation of the amount of
payment you may defer.
27. Q: What are the terms of the Deferred Payment Program?
A: The deferred payment is due, plus interest, on the March 15 next
following the third anniversary of the date the purchase opportunity is
exercised. For example, for a purchase opportunity exercise in January
1998, the deferred payment is due on March 15, 2001. Interest accrues
at an interest rate to be established at the time the option is
exercised, and is payable at the same time the deferred payment is due.
(The interest rate is based on the current prime rate.) All of the
shares purchased pursuant to the purchase opportunity installment
exercise are pledged to secure the deferred payment obligation, and the
Company holds the share certificates as collateral. If you sell or
otherwise transfer any of the pledged shares, the entire deferred
payment becomes due at the time of the sale. If payment is not received
when due, ARAMARK will sell a sufficient number of shares to cover the
amount due.
Deferred obligations are demand obligations and, as such, may be called
at any time by the Company. The Company does not intend, but reserves
the right, to call obligations under the Deferred Payment Program.
28. Q: Can I delay the payment of my deferred obligation beyond the maturity
date?
A: On the maturity due date, you may choose to delay the payment of the
principal amount for an additional three years subject to the payment
of interest on the original maturity date. A deferred obligation may
only be extended once. Interest must still be paid on the original due
date. At the time of the extension, a new interest rate will be set for
the extension period. A separate form will be made available by the
Company prior to maturity.
29. Q: Will I be able to sell shares to pay my deferred payment obligation at
the time it becomes due?
A: The Company intends to allow you to sell shares at that time. However,
all repurchases of shares by the Company must be approved by the Board
of Directors and are subject to the ability of the Company to do so
under its financing agreements.
30. Q: Can I prepay my deferred payment obligation?
A: Yes. You may prepay all or a part of your deferred payment obligation
at any time before it becomes due. Partial payments are applied first
to interest due and then reduction of principal.
31. Q: What are the anticipated U.S. income tax consequences to me for
participation in the Deferred Payment Program?
A: The tax consequences of exercising your purchase opportunity
installment will not change. Generally, for U.S.-based employees the
interest paid at the time of making the deferred payment would be
treated under U.S. income tax law as "investment interest."
Accordingly, it may be deductible, but only to the extent of investment
income received during the year the interest is paid. "Investment
income" does not include any income taxed at the favorable capital
gains rate. As a result, you may not be able, or wish, to deduct
deferred payment interest when you pay it. However, investment interest
expense, including deferred payment interest, that is not deducted for
U.S. income tax purposes may be carried forward indefinitely until it
is used. You are urged to discuss this matter with your tax advisor.
32. Q: Will my obligation to pay the deferred payment be treated as debt
for my personal credit purposes?
A: Any decision regarding your personal credit, whether for a home
mortgage or otherwise, would be made by a lender. The Company
understands that generally the deferred payment obligation would be
treated as debt for personal credit purposes by lenders.
33. Q: How can I sell shares of Common Stock that I currently own to pay the
purchase price?
A: You may sell shares of Common Stock in the internal market that is
being conducted
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concurrently with the December 15 - January 15 installment exercise
period (See Question 56). If you exercise your purchase opportunity
during such internal market period, you may have the cash proceeds
of such sale applied to pay all or a portion of the purchase price.
The necessary forms and instructions are included in Annex B.
34. Q: What are the tax consequences if I sell Class B shares to raise cash
to exercise my purchase opportunity ?
A: For U.S.-based employees, the sale of Common Stock is a taxable event.
In most cases, any gain or loss upon disposition of shares (measured by
reference to the Appraisal Price of the shares on the date of exercise)
may be treated as capital gain or loss. The tax consequences of selling
shares are not affected by whether or not you use the proceeds of such
sale to exercise other purchase opportunities. Taxes due from the sale
of shares must be paid in addition to the taxes due on the exercise of
purchase opportunities. Again, you are urged to discuss your particular
situation with your tax advisor.
35. Q: What is a stock-for-stock exercise?
A: The effect of a stock-for-stock exercise is much the same as if you
sold shares and used the cash proceeds to pay a portion of the purchase
price. For U.S.-based employees, 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.
36. Q: What is the benefit of using the stock-for-stock exercise method?
A: You can avoid recognizing any gain for U.S. income tax purposes that
you would otherwise recognize if you sold shares that you currently own
and then used the cash proceeds to pay the exercise price.
37. Q: What are the tax consequences if I use the stock-for-stock exercise
method?
A: For U.S. income tax purposes, your taxable income from the
stock-for-stock exercise is the same as if it were an exercise for
cash: namely, your taxable income is equal to the difference between
the exercise price and the Appraisal Price and is taxable at ordinary
rates and subject to withholding.
The U.S. tax basis and holding period for the shares that you currently
own and use in the stock-for-stock exercise remain unchanged. The tax
basis of the additional shares you receive in the exercise is equal to
the current Appraisal Price at the time of the exercise and their
holding period commences with the date of exercise.
38. Q: How do I use the stock-for-stock exercise method?
A: A portion of the exercise form in Annex B leads you through the
computation of how many shares that you currently own will be needed in
your stock-for-stock exercise. You may use any shares that you (or you
and your spouse jointly) have owned for more than six months in a
stock-for-stock exercise, even shares that are pledged to ARAMARK in
the Deferred Payment Program.
39. Q: Who is eligible to use a stock-for-stock exercise?
A: Generally, you may use the stock-for-stock exercise method for the
fourth, fifth and sixth installment of a purchase opportunity or, if
you hold three or more exercisable purchase opportunities, you may use
the stock-for-stock exercise method for any installments.
40. Q: How much of the purchase price can be paid using the stock-for-stock
exercise method?
A: You may use the stock-for-stock exercise method to cover up to, but not
more than, the exercise price (not including any applicable withholding
taxes). For example, if the exercise price for 100 shares is $8.25 per
share, or $825.00, and the Appraisal Price at exercise is $20.00 per
share, then you may use 41 shares that you currently own in the
stock-for-stock exercise method to pay $820.00 of the exercise price,
with the balance of $5.00 (plus required withholding taxes) being paid
through the other available methods. You may not use 42 shares, because
42 times $20.00 (or $840.00) exceeds the exercise price of $825.00.
41. Q: What are the restrictions on the shares I use in a stock-for-stock
exercise?
A: You may use shares in a stock-for-stock exercise only if the shares are
owned by you (or you and your spouse jointly) and only if the shares
have been owned for more than six months. In addition, shares that you
use in the stock-for-stock exercise method, like the shares you acquire
in an exercise of a purchase opportunity, are not eligible for sale in
the internal market during the six months after the exercise.
42. Q: Can I borrow money to purchase the shares covered by my purchase
opportunity?
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A: Yes. Generally, if you wish to borrow money to purchase shares, you
must make your own financing arrangements with outside lenders.
However, for the exercise of the fourth, fifth and sixth installment of
purchase opportunities, you may elect to defer payment of up to 75% of
the total purchase price (including required withholding taxes) under
ARAMARK's Deferred Payment Program, in effect, borrowing money from the
Company (See Questions 21 through 32).
43. Q: Will I receive a stock certificate for the shares of Common Stock that
I purchase?
A: No. All shares will be issued in uncertificated form. You will receive
a profile report in place of a certificate after each transaction.
44. Q: Can I have the shares registered jointly in my name and my spouse's
name?
A: Yes, you can register shares in the names of you and your spouse as
joint tenants, provided both you and your spouse sign the exercise
form. (Introduction to the Stockholders' Agreement)
If you are utilizing the Deferred Payment Program, both of you must
also sign the Obligation Note, which is on the reverse side of the
exercise form.
45. Q: Will I receive dividends on the Common Stock?
A: If the Board of Directors declares a dividend, holders of Common Stock
on the dividend record date will be entitled to receive that dividend.
46. Q: Will I be entitled to vote on any matters submitted to a vote of
ARAMARK Corporation stockholders?
A: Yes, you will generally be free to vote your shares in any manner you
choose on any matters properly presented to the stockholders. (Section
16.04)
47. Q: May I transfer my shares of Common stock?
A: Generally, you may not sell or otherwise transfer your shares of Common
Stock (other than in certain limited instances). (Section 2.01)
48. Q: May I transfer my shares of Common Stock for estate or tax planning
purposes?
A: Yes. You may transfer your shares for estate or tax planning purposes
as gifts to your spouse, child, grandchild or parent or a trust for the
benefit of any of them or to a qualifying charitable organization. You
may also make other transfers to your family members, their trusts or
other entities if the transfer is approved by the Company's Board of
Directors. (Section 3.01)
<PAGE>
49. Q: Are these permitted transfers subject to any conditions?
A: Yes. The transferee must sign a document confirming that he or she is
acquiring the shares subject to all the terms and conditions of the
Stockholders' Agreement, and such document must be delivered to and
approved by the Company before the transfer. (Section 2.03(a))
50. Q: When will I be able to transfer my shares freely without having to
comply with the restrictions on transfer contained in the Stockholders'
Agreement?
A: Generally, the Stockholders' Agreement will continue in force unless
the stockholders who are parties to the Agreement and the Company vote
to terminate or change it. (Section 11)
51. Q: May I pledge my shares of ARAMARK Common Stock?
A: Yes, you may pledge your shares to a commercial bank, savings and loan
institution or any other lending or financial institution as security
for your indebtedness. However, you may do so only if the lender agrees
that, upon realization of its security, the lender will dispose of the
shares only in compliance with the terms of the Stockholders'
Agreement. (Section 3.02) If you are eligible and elect to participate
in ARAMARK's Deferred Payment Program, you will be required to pledge
shares to ARAMARK (See Question 27).
52. Q: Will the pledged shares be subject to the Stockholders' Agreement?
A: Yes.
53. Q: Will I be able to sell pledged shares in the internal market or
under the Emergency Buyback Program?
A: Yes. However, your entire deferred payment obligation will become due
at the time of such sale.
54. Q: Will I be able to sell shares back to the Company?
A: Yes. Primarily, you will be able to sell your shares to the Company in
the internal market. Secondly, the Company provides an
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Emergency Buyback Program to accommodate certain limited instances
when unanticipated emergencies arise. The Company anticipates that
the combination of the internal market and the emergency buyback
program should provide adequate liquidity to all management
investors on an orderly and equitable basis. The Company also
provides an offer-to-sell procedure for the shares that could be
utilized. These three methods for realizing liquidity are described
more fully below (See Questions 56, 57 and 58). Of course, the
ability of the Company to repurchase any shares is subject to the
Company's continued strong operating and financial performance.
(Section 3.03)
55. Q: Will the Company inform me prior to the time that I purchase from
the Company (through the exercise of a purchase opportunity or
otherwise) or sell to the Company (in the internal market or otherwise)
any of my shares of stock of any pending or potential transaction that
could increase or decrease the value of the stock?
A: No. The Company will not disclose any pending or potential transaction
in connection with your decision to purchase from or sell to the
Company any shares of Company stock owned by you. It is in the best
interests of the Company and the stockholders taken as a whole for the
Company to be able to conduct orderly transactions in Common Stock on a
continual basis (including in connection with the internal market and
repurchases upon termination of employment) and for the Company
concurrently to be able to consider from time to time on a confidential
basis potential transactions which could affect the fair market value
and/or the Appraisal Price of the shares. The Company does not disclose
publicly its projections or the status of any transaction that may be
under consideration. (Section 8)
56. Q: What is the internal market?
A: The internal market is a process whereby the Company, on a periodic
basis, offers to purchase some of your shares of Common Stock. At the
time of the offer, each management owner will then be able to decide
whether to accept or reject the offer. The internal market provides the
primary way for management owners to sell some of their stock holdings.
The Internal Market Policy approved for 1998 consists of four quarterly
repurchase periods, and subject to further review and approval by the
Board of Directors prior to each subsequent annual offering, is as
follows:
Offering December 15 to January 15; March 15 to
Periods: April 15; June 15 to July 15; September 15 to
October 15.
Offerees: All management owners.
Purchase Price: The most recent available Appraisal Price as
of : December 1, March 1, June 1, September 1.
Payment Terms: Cash
Individual Up to $50,000 or, if greater, 10% of shares
Guideline for owned (up to a maximum of $150,000); after
each Offering Share 100, up to $250,000. Requests for
Period: larger sales can be made by contacting either
Marie Paschall (215-238-3194) or William
Bourne (215-238-3213).
Required Shares owned for less than six months or
Holding Period: used in a Stock for Stock exchange within the
prior six months are not eligible for resale
in the internal market.
57. Q: What is the Emergency Buyback Program?
A: From time to time there may be compelling circumstances when an
unanticipated emergency arises which may cause a management owner to
request the Company to repurchase Class B shares. Each request will be
reviewed individually, taking into account all relevant circumstances.
58. Q: Will I be able to sell my shares in any other way?
A: The anticipated normal procedure for selling shares is through the
internal market. However, you could also offer a portion of your shares
to the Company at the current Appraisal Price of the Common Stock. In
the event your shares were not purchased by ARAMARK you could offer to
sell your shares within the next 90 days to a third party who agreed to
abide by all the terms of the Stockholders' Agreement, on the same
terms offered to ARAMARK. (Section 4)
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Upon termination for any reason, subject to the Company's right to Call
your shares (See Question 59), you could offer to sell your shares as
described above.
59. Q: If my employment with the Company and its subsidiaries is terminated
for any reason, does the Company have the right to require me to sell
my shares to the Company?
A: Yes. This right of the Company to require you to sell your shares is
described as a "Call." At any time during the 10 years following the
termination of your employment the Company has the right to Call any or
all of your shares and any or all of the shares of all of your
permitted transferees. The Company's intention is to exercise promptly
its Call right for all shares if you are terminated for any reason.
(Section 6)
60. Q: Do the Call rights apply to a termination of my employment with
ARAMARK and its subsidiaries which is beyond my control?
A: Yes. The Call rights apply to all terminations of employment with
ARAMARK and its subsidiaries without regard to cause, including death,
permanent and complete disability, voluntary or involuntary termination
of employment and retirement. For example, if ARAMARK were to sell the
division or subsidiary in which you work, then the Call rights would
apply even though you were continuing to work in the same division or
subsidiary, unless deemed that the surviving entity is considered an
affiliate. (Section 6)
61. Q: How will I be paid for my shares when they are Called?
A: The Company, in almost all cases, will purchase your shares at the
Appraisal Price of the Common Stock in effect as of your date of
termination of employment, without interest. However if the Company
gives notice it is exercising the Call more than 120 days after the
time of termination of employment, the Company will repurchase your
shares at the lesser of the Appraisal Price at the time of termination
plus 8% simple interest to the time of such notice, or the Appraisal
Price at the time of such notice. Under the terms of the Stockholders'
Agreement, payment will be in cash up to the least of 10% of the shares
called, $100,000, or your highest base salary, with the remainder paid
in installment notes.
(Section 6.02)
62. Q: What if ARAMARK cannot repurchase my shares pursuant to the exercise
of a Put or a Call because it would cause a default under one of
ARAMARK's loan agreements or would violate applicable law?
A: Your shares would be repurchased on the earliest practicable date when
such repurchase could be effected in compliance with such loan
agreement and applicable law. The price to be paid could be affected
because of such delay. (Section 10.01)
63. Q: If I voluntarily terminate my employment, the Company has the right
to call my shares of Common Stock. Will the Company inform me prior to
the time I terminate my employment of any pending or potential
transaction that could increase the value of the Common Stock?
A: No. The Company will not disclose any pending or potential transaction
in connection with your decision to terminate your employment (or in
connection with your decision to exercise a Put or in any other
circumstance). It is in the best interests of the Company and the
stockholders taken as a whole for the Company to be able to conduct
orderly transactions in Common Stock on a continual basis (including in
connection with the internal market and repurchases upon termination of
employment) and for the Company concurrently to be able to consider
from time to time on a confidential basis potential transactions which
could affect the fair market value and/or the Appraisal Price of the
shares. The Company does not disclose publicly its projections or the
status of any transaction that may be under consideration. (Section 8)
64. Q: Will I be able to require the Company to repurchase shares?
A: Generally, no. However, upon your death, Complete Disability or Normal
Retirement, you or your estate, as appropriate, subject to the
Company's financing agreements, can require the Company to purchase up
to 30% of your shares. This right to require the Company to purchase
shares is described as a "Put." The Company will be required to
purchase these shares for cash at the current Appraisal Price of the
Common Stock. The Company intends to purchase ("Call") your remaining
shares (See Question 59). However, in the event the Company does not
Call your shares, then you could offer to sell the remaining shares
(See Question 58). (Section 5)
65. Q: What is the Stock Repurchase Policy?
A: The Company's Stock Repurchase Policy provides for payment terms that
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are generally more favorable to you than the payment terms provided for
in the Stockholders' Agreement. This Policy, which is described below
(See Questions 66 through 71), may be amended, discontinued or varied
for all repurchase transactions generally or for any specific
repurchase transaction at any time by the Company without notice. The
Policy does not affect the total repurchase price which you will be
paid for your shares.
66. Q: If I terminate before age 55 and my shares are Called, what does the
Stock Repurchase Policy currently provide?
A: The initial cash payment will be a minimum of $125,000 (or your total
holdings, if less) and each annual principal installment on the
promissory note (if applicable) will be a minimum of $75,000 up to a
maximum of $150,000 with any remaining balance paid in the final
installment.
67. Q: If I terminate at or after age 55 but before Normal Retirement and
my shares are Called, what does the Stock Repurchase Policy currently
provide?
A: The total repurchase price will be paid in an initial cash payment of a
minimum of $125,000 (or your total holdings, if less) and subsequent
annual principal installments on the promissory note in equal amounts,
so that the entire repurchase price will have been paid before you
reach age 66. Each such payment under the promissory note is subject to
a minimum of $100,000 and a maximum of $300,000 with any remaining
balance paid in the final installment.
68. Q: If I terminate through Normal Retirement and my shares are Called
(or if I exercise my Put and the remainder of my shares are Called),
what does the Stock Repurchase Policy currently provide?
A: Generally, Normal Retirement means you are at least age 60 and you
retire from active employment. The initial cash payment will be 30% of
the total repurchase price (minimum of $125,000). The remainder of the
total repurchase price will be paid in equal annual principal
installments on the promissory note so that the entire repurchase price
will have been paid before you reach 66 (or if you are 63 or over, in 3
equal annual principal installments). Each such payment under the
promissory note is subject to a minimum of $100,000 and a maximum of
$300,000 with any remaining balance paid in the final installment.
69. Q: If I die or become Completely Disabled and my shares are Called (or
if my estate exercises its Put and the remainder of my shares are
Called), what does the Stock Repurchase Policy currently provide?
A: The initial cash payment will be 30% of the total repurchase price
(minimum of $125,000). The remainder of the total repurchase price
will be paid in three equal annual principal installments on the
promissory note. Each such payment under the promissory note is
subject to a minimum of $100,000 and a maximum of $300,000 with any
remaining balance paid in the final installment.
70. Q: What are the terms of the installment notes?
A: The Stockholders' Agreement provides for the following terms for the
installment notes. Annual cash payments will equal the least of 10% of
the principal, $100,000 or your highest base salary. At the end of the
10th year following termination, any remaining balance on the notes
will be paid in cash. Interest will be paid semi-annually and the rate
will be fixed at the Applicable Federal Rate which currently varies
approximately from 5.60 to 6.21 depending upon the term of the note.
(Section 1.08)
71. Q: Does the Stock Repurchase Policy provide for an alternative interest
rate on the promissory note?
A: Yes. In lieu of a fixed interest rate (equal to the Applicable Federal
Rate at the time of the repurchase) for the entire life of the
promissory note, you may make a one-time irrevocable election at the
time of repurchase for the rate to reset annually on the date of each
principal payment to the Applicable Federal Rate then in effect.
72. Q: If the Company purchases my shares using, in part, an installment
note, will I have to pay tax on the entire gain in the first year?
A: Generally, no. For U.S.-based employees, the purchase using a note
usually will qualify for installment treatment under the U.S. income
tax laws. You should be able to recognize taxable gain in proportion to
the cash payments of principal you will receive over the years. You
should consult with your tax advisor to determine if installment sale
treatment is advantageous to you and how you should report it on your
tax returns.
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ABOUT THIS PROSPECTUS
This prospectus relates to a maximum of 18,823,703 shares of the
Common Stock , $.01 par value ("Common Stock" or "Class B Common Stock"), of
ARAMARK Corporation ("ARAMARK" or the "Company") being offered to eligible
employees of the Company and its subsidiaries under the ARAMARK Ownership
Program (the "Program"). The Program consists of the 1984 Stock Option Plan
(the "1984 Option Plan"), the 1987 Stock Option Plan (the "1987 Option Plan")
and the 1991 Stock Ownership Plan (the "1991 Ownership Plan"). The latter two
Plans have been combined into the Combined Stock Ownership Plan.
THE ARAMARK OWNERSHIP PROGRAM
We have designed the ARAMARK Ownership Program (the "Program") 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 and continuing interest in the future success of the
Company's business.
Under the Program, the direct ownership in the Company has increased
from 62 original management investors in 1984 to approximately 1,300
management investors today owning approximately 51% of the equity. In
addition, at October 3, 1997, management employees held installment stock
purchase opportunities and stock options for an additional 8,944,212 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.
The Program has used or uses the 1984 Stock Option Plan and the
Combined Stock Ownership Plan. These Plans allow the Company to offer, and
under the Program the Company has offered, stock purchase opportunities to
selected employees in three different ways: the direct sale of shares, the
grant of installment stock purchase opportunities, and the grant of stock
options.
This prospectus relates to the grant and exercise of installment stock
purchase opportunities. Through installment stock purchase opportunities, the
Company granted to more than 1,150 management employees an opportunity to
invest in or increase their investment in, the Company. Shares for installment
stock purchase opportunities have been granted from the 1984 Option Plan and
may have been or may be granted from the Combined Stock Ownership Plan.
1984 Option Plan. The Board of Directors adopted and the stockholders
approved the 1984 Option Plan in December 1984 in connection with the
management buyout. The stockholders approved amendments to the Plan in
February 1987. The Plan provides for the issuance of shares of Common Stock
through the granting of incentive stock options and/or non-qualified options.
On October 3, 1997, 515,252 options were outstanding under the Plan. No
additional options can be granted under the Plan.
1987 Option Plan. The Board of Directors adopted the 1987 Option Plan
in May 1987 and stockholders approved the Plan in February 1988. In February
1996, the Plan became part of the Combined Stock Ownership Plan. The Plan
provides for the issuance of up to 8,813,191 shares of Common Stock through
the granting of incentive stock options and/or non-qualified options. On
October 3, 1997 2,489,206 options were outstanding under the Plan. No
additional options can be granted under the plan.
1991 Ownership Plan. The Board of Directors adopted the 1991 Ownership
Plan in November 1991 and amended it in 1994. Stockholders approved the Plan
in February 1995. In February 1996, the Plan became part of the Combined Stock
Ownership Plan. The Plan provides for the issuance of up to 21,155,259 shares
of Common Stock through the granting of non-qualified options. On October 3,
1997 5,767,254 options were outstanding under the Plan and 9,804,491 shares
were available for the grant of future options.
Combined Stock Ownership Plan. The Board of Directors adopted in 1995
and the stockholders approved in February 1996 the Combined Stock Ownership
Plan which amends and combines the 1987 Stock Option Plan and the 1991 Stock
Ownership Plan.
1996 Directors Stock Ownership Plan. The Board of Directors approved
the Directors Plan in February 1996. The Directors Plan provides for the
issuance of up to 250,000 shares of Common Stock through the granting of
nonqualified options to directors who are not employees of the Company. On
October 3, 1997, 172,500 options were outstanding under the Directors Plan and
75,000 were available for the grant of future options. This prospectus does
not relate to the grant or exercise of stock purchase
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opportunities under the Directors Plan, and references to the Plans do not
include the Directors Plan.
In accordance with the terms of the Plans, the purchase price for
shares subject to purchase opportunities granted under the Plans will not be
less than the fair market value of the shares (based upon the most recent
available independent appraisal) on the date of the grant. Shares issued
pursuant to the Plans are subject to the Stockholders' Agreement. The Plans
provide that the terms of options and purchase opportunities outstanding under
the Plans and the number of shares authorized under the Plans will be
appropriately adjusted upon the declaration of stock dividends and upon the
occurrence of certain other events.
The Plans grant certain authority to the Human Resources, Compensation
and Public Affairs Committee (the "Committee") which consists of six members
of the Board.
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 the Plans, and subject to
the express provisions of the Plans, 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 the Plans is not
determinable.
Purchase opportunities generally are not transferable. No purchase
opportunity can be subject to attachment, execution or levy of any kind. Each
purchase opportunity shall be exercisable only by the employee to whom it is
granted and only while an employee of ARAMARK or a subsidiary (or any other
entity in which ARAMARK continues to own an equity interest and which the
Board of Directors designates).
ARAMARK will use the net proceeds from the sale of shares pursuant to
exercises of purchase opportunities for general corporate purposes.
The Plans are not subject to any provisions of the Employee Retirement
Income Security Act of 1974 and are not "qualified" within the meaning of
Section 401(a) of the Internal Revenue Code.
The Board of ARAMARK or the Committee may establish appropriate
procedures for the administration of the Plans. It may also include at the
time a purchase opportunity is granted such additional terms and conditions as
it deems desirable to the extent such are not inconsistent with the Plans. The
decision of the Committee, or the Board for certain matters described in the
Plans, shall be final and binding upon all persons in interest, including
employees, ARAMARK and its stockholders.
The Board may amend the Plans from time to time as it deems desirable,
except that certain amendments would require stockholder approval.
Neither the Plans nor any purchase opportunity granted under the Plans
gives any employee the right to continue in the employ of ARAMARK or its
subsidiaries or limits in any respect the right of ARAMARK or any subsidiary
to terminate such employee.
The appraised fair market value of the Common Stock, as of December 1,
1997, was $24.90. Houlihan Lokey Howard & Zukin ("Houlihan"), a professional
independent appraiser, provided the appraisal of the fair market value of the
shares of Common Stock. Such appraisal was based on the financial condition
and results of operations of ARAMARK, a comparison of ARAMARK with other
companies with similar characteristics, and other factors prevailing at the
time it made such determination.
The Company has paid fees of approximately $115,000 plus reimbursement
of certain expenses to Houlihan for appraisal services rendered to the Company
during the 12 months prior to the date of this prospectus. In addition, the
Company has agreed to indemnify Houlihan against certain liabilities which it
might incur in connection with the preparation of the appraisal referred to
above or otherwise as a result of the services which it rendered.
THE DEFERRED PAYMENT PROGRAM
We designed the Deferred Payment Program to facilitate exercise of
installment stock purchase opportunities by giving employees the alternative
to defer payment of a portion of the purchase price generally beginning with
the fourth and subsequent installments (a Covered Installment).
We anticipate that the Deferred Payment Program will continue to be
offered. However, we may cancel or modify it at any time.
The Deferred Payment Program currently in effect will permit the
holder of a purchase opportunity to defer payment of up to 75% of the total
purchase price (including required withholding taxes) for the shares being
purchased under a Covered Installment. Accordingly, payment may be deferred
initially for up to 39 months in some cases. (In order to comply more clearly
with certain laws which may be applicable, ARAMARK has the right to require
the payment on demand. However, ARAMARK has no intention of exercising such
right but reserves the right to do so.) Interest will accrue on any deferred
payment at a fixed annual rate (currently 8.50% simple interest), and will be
payable at the time the deferred payment is due. ARAMARK may from time to time
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select a different interest rate for use in future deferred payment
obligations. However, the interest rate at the time a deferred payment
obligation is entered into is fixed for the entire term of the obligation. The
Company will hold as collateral all shares purchased under any purchase
opportunity in which any portion of the purchase price is financed under the
Deferred Payment Program until the deferred payment is received by the
Company. Failure to pay either principal and/or interest when due will result
in the sale of a sufficient number of shares to satisfy the obligation.
Deferred payment obligations may be prepaid at any time at the
election of the employee and will become due immediately in the event any
shares securing the deferred payment obligation are sold or otherwise
transferred by the stockholder (whether pursuant to a call of such shares by
ARAMARK upon termination of employment or otherwise). Holders of installment
stock purchase opportunities are not required to use the Deferred Payment
Program.
If you have any questions about the Deferred Payment Program, you
should call Marie Paschall at the ARAMARK Corporate Compensation and Benefits
Department (telephone: 215-238-3194) or ARAMARK Shareholder Services Group at
toll-free 1-888-96-OWNER (1-888-966-9637).
You may elect to defer the payment of the principal amount of your
Deferred Payment Obligation for one additional three year period. If the
payment date is extended, interest will accrue at a new interest rate set at
the time of the extension. You must pay the interest amount due on the
original maturity date and execute documentation required by the Company to
effect the payment extension and the new interest rate. Failure to execute
extension documentation and/or pay the interest due by the maturity date will
result in the sale of a sufficient number of shares to cover the balance due.
U.S. INCOME TAX CONSIDERATIONS
The following discussion is not intended to be a complete statement of
the U.S. income tax consequences of the granting and exercise of purchase
opportunities pursuant to the Plans or the disposition of shares acquired upon
exercise of such purchase opportunities. Because of the complexities of the
U.S. income tax law, you are urged to consult your own tax advisor. If you are
a non U.S.-based employee, you should consult with your tax advisor about tax
law requirements in your country.
ARAMARK 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 opportunity constitute
capital assets in the employee's hands, any gain or loss upon disposition of
shares (measured by reference to the fair market value of the shares on the
date of exercise) may be treated as capital gain or loss. These results would
apply whether or not shares are disposed of by the employee to raise cash to
exercise purchase opportunities. The Company is required to report to the IRS
the amount of gross proceeds received from the disposition of stock and the
employee is required to report that amount in his/her tax return. None of the
income from exercise of purchase opportunities or gain from the sale of stock
acquired through exercise of such purchase opportunities would be an item of
tax preference subject to AMT.
ARAMARK 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. For tax purposes, an employee electing
to make a stock-for-stock exercise would be considered to receive from the
exercise (1) the shares tendered, with the same basis and holding period to
the employee as the shares had prior to being tendered, (2) the additional
shares resulting from the exercise with a tax basis to the employee equal to
their current fair market value and a holding period commencing with the date
of exercise, and (3) ordinary taxable income equal to the difference between
the exercise price and the current fair market value of all of the shares
acquired through the exercise.
ARAMARK further understands that income recognized upon the exercise
of a purchase opportunity is subject to tax withholding and that it is
obligated to withhold or collect an amount equal to a portion of the tax
applicable to such income. (Federal Government requires at least 28%.)
Consequently, ARAMARK requires the exercising employee to deposit with ARAMARK
the amount of taxes required to be withheld or collected. The Company is
required to report to the IRS the amount of ordinary income generated by the
exercise of a purchase opportunity by including that amount as compensation in
the employee's form W-2, and the employee is required to report that amount in
his/her tax return.
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If payment of a portion of the exercise price is deferred under the
Deferred Payment Program, the interest paid would be treated as "investment
interest". Accordingly, it may be deductible, but only to the extent of
investment income received during the year the interest is paid. "Investment
income" does not include any income taxed at the favorable capital gains rate.
As a result, you may not be able, or wish, to deduct deferred payment interest
when you pay it. However, investment interest that is not deducted can be
carried forward and be deductible in future years to the extent of the
holder's investment income in such years. You are urged to discuss this matter
with your tax advisor. Similarly, to the extent that purchase opportunities
are exercised using other borrowed funds, the interest incurred on such
borrowing may be treated as "investment interest". You are urged to discuss
this matter as well with your tax advisor.
DESCRIPTION OF EQUITY SECURITIES
General
The authorized capital of the Company consists of 185,000,000 shares,
which includes 150,000,000 shares of Common Stock, Class B, par value $.01 per
share ("Common Stock" or "Class B Common Stock"); 25,000,000 shares of Common
Stock, Class A, par value $.01 per share ("Class A Common Stock"); 10,000,000
shares of Series Preferred Stock, par value $1.00 per share ("Series Preferred
Stock"). As of October 3, 1997, 20,450,100 shares of Class B Common Stock were
issued and outstanding (not including 9,361,242 shares subject to options,
installment stock purchase opportunities and deferred stock units granted and
outstanding under the Company's Plans), and 1,961,413 shares of Class A Common
Stock were issued and outstanding. No shares of series preferred stock are
issued and outstanding.
Management investors (approximately 1,300 persons at the date of this
prospectus) hold all of the shares of outstanding Class B Common Stock of the
Company. There is no established public trading market for the Common Stock of
the Company.
The following is a summary of certain provisions of the Restated
Certificate of Incorporation of the Company (the "Certificate of
Incorporation") and the By-Laws of the Company, as amended. The summary is
qualified in its entirety by reference to such documents filed as exhibits to
the Registration Statement of which this prospectus is a part.
The Class A Common Stock and the Class B Common Stock
Voting. Each share of Class A Common Stock and each share of Class B
Common Stock entitles the holder thereof to one vote on all matters submitted
to the stockholders.
All actions submitted to a vote of stockholders are voted upon by
holders of Class A Common Stock and Class B Common Stock voting together
except that the holders of Class A Common Stock and Class B Common Stock vote
separately as classes with respect to amendments to the Company's Certificate
of Incorporation that may alter or change the powers, preferences or special
rights of their respective classes of stock so as to affect them adversely,
and such other matters as may require class votes under the Delaware General
Corporation Law.
There is no provision in the Certificate of Incorporation permitting
cumulative voting.
Dividends and Other Distributions (including Distributions upon
Liquidation of the Company). Dividends on the Class A Common Stock and the
Class B Common Stock are paid when, as and if declared by the Board of
Directors and permitted under the Company's loan agreements. In respect of
rights to dividends and other distributions in cash, stock or property of the
Company (including distributions upon liquidation of the Company, after
provision for creditors of the Company and any shares of the Company's capital
stock having a preference on liquidation, dissolution or winding up of the
Company), each share of Class A Common Stock is entitled to ten times the
dividends and other distributions payable on each share of Class B Common
Stock when, as and if such dividends or distributions may be declared and/or
paid; provided, however, that in the case of dividends or other distributions
payable on the Class A Common Stock and the Class B Common Stock in capital
stock of the Company other than Preferred Stock, including distributions
pursuant to split-ups or divisions of the Class A Common Stock or the Class B
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Common Stock, only Class A Common Stock is distributed with respect to Class A
Common Stock and only Class B Common Stock is distributed with respect to
Class B Common Stock. In no event may either Class A Common Stock or Class B
Common Stock be split, divided or combined unless the other is split, divided
or combined equally.
Convertibility. The Class A Common Stock is not convertible. Subject
to the prior approval of the Board of Directors, the Class B Common Stock is
convertible at all times, in whole or in part, and without cost to the
stockholder, into Class A Common Stock on the basis of ten shares of Class B
Common Stock for each share of Class A Common Stock. Only full-time employees
and directors of the Company (and their Permitted Transferees while the
transferor is a full-time employee or director) may hold Class B Common Stock.
Upon any holder of Class B Common Stock ceasing to be a full-time employee or
director of the Company, such holder's Class B Common Stock automatically
converts into Class A Common Stock, on the basis of ten shares of Class B
Common Stock for each share of Class A Common Stock. The Board of Directors
may at any time order the conversion of all the Class B Common Stock into
Class A Common Stock on a ten-for-one basis. No fractions of shares of Class A
Common Stock would be issued on such conversion, but rather such amounts would
be paid in cash based on the market value (or, if the Company is not publicly
traded, the last appraised value) of the Class B Common Stock.
Other. The Class A Common Stock and Class B Common Stock do not carry
any preemptive rights enabling a holder to subscribe for or receive shares of
stock of the Company of any class or any other securities convertible into
shares of stock of the Company.
EXPERTS
The audited consolidated financial statements and related notes and
schedules included in the Company's Annual Report on Form 10-K for the year
ended October 3, 1997, incorporated by reference herein have been audited by
Arthur Andersen LLP, independent public accountants, as set forth in their
report also incorporated herein by reference. The financial statements and
schedules referred to above have been incorporated by reference herein in
reliance upon the reports of said firms and upon the authority of said firms
as experts. Subsequent audited financial statements of the Company and the
reports thereon of the Company's independent public accountants, to the extent
incorporated herein by reference, also will be so incorporated in reliance
upon the reports of those accountants and upon the authority of those
accountants as experts to the extent such accountants have audited those
financial statements and consented to the use in this prospectus of their
reports thereon.
The appraisal of Houlihan Lokey Howard & Zukin, independent securities
appraisers, and references thereto included in this prospectus have been
included herein in reliance upon the authority of said firm as an expert in
securities valuations.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC permits us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to part of this prospectus,
except for information superseded by information in this prospectus. This
prospectus incorporates by reference the documents set forth below that we
have previously filed with the SEC. These documents contain important
information about our Company and its finances.
(1) the Company's latest annual report on Form 10-K filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.
(2) All other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year of the annual report
referred to in (1) above.
(3) All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act.
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AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
OF
ARAMARK CORPORATION
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT dated as of the 14th day
of December, 1994, which further amends and restates the Amended and Restated
Stockholders' Agreement dated as of December 14, 1984 (the "Agreement"), by
and among ARAMARK CORPORATION (formerly The ARA Group, Inc. and ARA Holding
Company), a Delaware corporation ("ARAMARK"), and the parties identified on
the books of ARAMARK as "Management Investors" or their "Permitted
Transferees" or as "Individual Investors" or "Institutional Investors."
In consideration of the terms and conditions herein contained, the
parties hereto mutually agree as follows:
The parties hereto (other than ARAMARK) and any other person who
hereafter acquires equity securities of ARAMARK pursuant to the provisions of,
and subject to the restrictions and rights set forth in, this Agreement are
sometimes hereinafter referred to collectively, as the "Stockholders" or,
individually, as a "Stockholder." The Management Investors and the Individual
Investors are sometimes hereinafter referred to collectively as the "Investor
Group." Institutional Investors and Individual Investors are sometimes
hereinafter referred to collectively as "Outside Investors." Unless otherwise
explicitly set forth herein, the term "Management Investors" shall mean only
those individuals so identified on the books of ARAMARK, exclusive of such
individuals' respective heirs, Permitted Transferees (as identified on the
books of ARAMARK) or other Transferees (as defined in Section 2.03(a) hereof);
provided that the Board of Directors of ARAMARK may, from time to time and in
its sole discretion, designate any Stockholder then employed by ARAMARK or its
Subsidiaries a "Management Investor." Stockholders who are Permitted
Transferees are identified as such on the books of ARAMARK, along with the
identity of their respective transferors. Where a full-time employee or
director has acquired or acquires equity securities of ARAMARK in joint
tenancy with their spouses or in any other manner other than sole direct
ownership, such employee or director is deemed to be a Management Investor and
such record owner is deemed to be his or her Permitted Transferee.
A Transferee who is not already a party to this Agreement, by
executing the document referred to in Section 2.03(a) hereof, shall thereby
become entitled to the benefits of this Agreement and shall be deemed to be an
"Institutional Investor", except: if such Transferee is an employee of
ARAMARK, then he or she shall be deemed to be a "Management Investor"; if such
Transferee is a Transferee pursuant to Section 3.01 of an Individual Investor,
then he or she shall be deemed to be an "Individual Investor"; if such
Transferee is a Transferee pursuant to Section 3.01 of a Management Investor
(or of his or her Permitted Transferee), then he or she shall be deemed to be
a "Permitted Transferee" of such Management Investor. Determination of the
classification of a Stockholder by the Board of Directors shall be conclusive
and binding on all parties hereto.
ARAMARK's Class B Common Stock, par value $.01 per share ("Class B
Common Stock"), and Class A Common Stock, par value $.01 per share ("Class A
Common Stock") are collectively referred to herein as the "Common Stock," and
when so referred to shall be treated as one class to which all the provisions
of this Agreement apply.
Pursuant to ARAMARK's Restated Certificate of Incorporation (the
"Certificate of Incorporation"), upon the termination of employment of a
Management Investor, the shares of Class B Common Stock held by such
Management Investor and his or her Permitted Transferees shall be converted
into shares of Class A Common Stock; and upon any transfer of shares of Class
B Common Stock in accordance with the terms of this Agreement other than to a
Management Investor or Permitted Transferee of a Management Investor, such
shares shall be converted into shares of Class A Common Stock. Shares so
converted shall continue to be subject to the terms and conditions of this
Agreement.
For purposes of this Agreement only, the employment of a Management
Investor shall be deemed terminated if he or she shall cease to be a director
or an active, full-time employee of ARAMARK or its Subsidiaries. Such
termination of employment shall not change the designation of such person as a
Management Investor.
The parties hereto desire to restrict the sale, assignment, transfer,
encumbrance or other disposition of the Common Stock, including issued and
outstanding shares of Common Stock as well as
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shares of Common Stock which may be issued hereafter, or which may become
issuable pursuant to the exercise of options, and to provide for certain
rights and obligations with respect thereto as hereinafter provided.
1. Certain Definitions.
1.01 "Affiliate" shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with another Person.
1.02 "Appraisal Price" of shares of Common Stock shall mean the fair
market value of such shares, as determined by an Appraiser according to the
most recent existing appraisal of shares of Common Stock, which appraisal
shall be as of a date not more than six months prior to the use thereof. Such
determination by the Appraiser shall be conclusive and binding on all
Stockholders and ARAMARK. With respect to shares of Class A Common Stock
resulting from the conversion of shares of Class B Common Stock pursuant to
the terms of the Certificate of Incorporation, the "Appraisal Price of (an
equivalent number of) shares of Class B Common Stock" shall mean the Appraisal
Price, had the conversion not occurred, of such shares of Class B Common
Stock.
1.03 "Appraiser" shall mean a firm headquartered in the United States
of nationally recognized standing in the business of appraisal or valuation of
securities which does not own any stock of ARAMARK and which has been selected
by the Board of Directors to act as an independent appraiser. The Board of
Directors shall review its selection of an Appraiser annually.
1.04 "Call" or "Called" shall mean ARAMARK's option to purchase Common
Stock from the holder thereof referred to in Sections 6 and 7 hereof.
1.05 "Completely Disabled" and "Complete Disability" shall mean a
"permanent and total disability" as now defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code").
1.06 "Normal Retirement" shall mean voluntary termination of
employment with ARAMARK after attaining the age of 60, on at least 90 days
prior written notice of such termination, where the retiree does not intend
to, at the time of termination, and in fact does not, engage in full-time
employment following such termination other than employment that is with a
governmental or a charitable, non-profit organization and that is not
competitive with ARAMARK.
1.07 "Person" shall mean a corporation, an association, a partnership,
an organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.
1.08 "Promissory Note" shall mean a subordinated installment note of
ARAMARK substantially in the form of Exhibit A to this Agreement, with a
stated annual rate of interest equal to the Applicable Federal Rate (as such
term is defined in the Code) as of the issue date of the Promissory Note, as
determined by ARAMARK; with equal annual installments of principal equal in
amount to the least of (1) 10% of the original principal amount of the
Promissory Note, (2) the Management Investor's highest annual base salary as
an employee of ARAMARK, or (3) $100,000; and with the final installment of
principal equal to the outstanding balance and due at the final maturity; and
with the first installment of principal due on the April 15 or October 15
occurring closest to the first anniversary of the issue date of the Promissory
Note; and with the final maturity no later than the tenth anniversary of the
Management Investor's termination of employment; and with such other
insertions as ARAMARK shall reasonably make.
1.09 "Put" shall mean the option of the holder to cause ARA to
purchase Common Stock referred to in Section 5 hereof.
1.10 "Subsidiary" shall mean any corporation or other entity of which
ARAMARK shall, directly or indirectly, own 50% or more of the equity, as
determined for purposes of this Agreement by the ARAMARK Board of Directors
and any other corporation or other entity in which ARAMARK shall directly or
indirectly have an equity investment and which the ARAMARK Board of Directors
shall in its sole discretion designate.
2. Limitations on Transfers of Shares.
2.01 Transfers Prohibited Unless Specifically Permitted. No
Stockholder shall transfer any shares of Common Stock at any time, unless such
sale, assignment, pledge or encumbrance or other transfer shall have been
effected in accordance with the terms of Section 3, 4, 5, 6 or 7 of this
Agreement. ARAMARK shall not transfer upon its books any shares of Common
Stock held or owned by any of the Stockholders to any person except in
accordance with this Agreement.
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2.02 Inconsistent Agreements Prohibited. Unless approved by the Board
of Directors, no Stockholder shall grant any proxy or enter into or agree to
be bound by any voting trust with respect to Common Stock nor shall any
Stockholder enter into any stockholder agreement or arrangement of any kind
with any person with respect to Common Stock inconsistent with the provisions
of this Agreement (whether or not such agreement and arrangement is with other
Stockholders or holders of Common Stock that are not parties to this
Agreement), including but not limited to, any agreement or arrangement with
respect to the acquisition, disposition or voting of shares of Common Stock,
or act, for any reason, as a member of a group or in concert with any other
persons in connection with the acquisition, disposition or voting of shares of
Common Stock in any manner which is inconsistent with the provisions of this
Agreement.
2.03 Requirements for all Transfers.
(a) Transferee Must Agree to be Bound by Agreement. Unless
otherwise explicitly provided herein, no Stockholder shall sell,
assign, pledge, encumber or otherwise transfer any shares of
Common Stock to any person (all such persons, regardless of the
method of transfer, shall be referred to collectively as
"Transferees" and individually as a "Transferee") unless (a) such
Transferee shall have executed, as a condition to its acquisition
of shares (or, in the case of a Transferee by will or the laws of
descent, record ownership on the books of ARAMARK) of Common
Stock, an appropriate document confirming that such Transferee
takes such shares subject to all the terms and conditions of this
Agreement and (b) such document shall have been delivered to and
approved by ARAMARK prior to such Transferee's acquisition of
shares (or, in the case of a Transferee by will or the laws of
descent, record ownership on the books of ARAMARK) of Common
Stock. ARAMARK shall not unreasonably withhold or delay its
approval of any such document.
(b)Transfer Must Comply with Securities Laws. No Stockholder
shall sell, assign, pledge, encumber or otherwise transfer any
shares of Common Stock at any time if such action would
constitute a violation of any federal or state securities or blue
sky laws or a breach of the conditions to any exemption from
registration of the Common Stock under any such laws or a breach
of any undertaking or agreement of such Stockholder entered into
pursuant to such laws or in connection with obtaining an
exemption thereunder. Any Stockholder who proposes to sell,
assign, pledge, encumber or transfer any shares of Common Stock
may deliver to ARAMARK an opinion of counsel that such action
would not result in any such violation or breach. The delivery of
such opinion shall be deemed to establish compliance with the
provisions of this Section 2.03(b) unless, within ten days after
the receipt by ARAMARK of such opinion, counsel for ARAMARK shall
deliver an opinion that such action would result in any such
violation or breach (such opinion to state the basis of the legal
conclusions reached therein).
(c)Endorsement of Stock Certificates. Each certificate
representing shares of Common Stock shall bear endorsements
reading substantially as follows:
The securities represented by this certificate are
subject to the right of the Corporation to repurchase
such securities on the terms and conditions set forth
in a Stockholders' Agreement dated as of December 14,
1984, as the same may be amended from time to time, a
copy of which may be obtained from the Corporation or
from the holder of this instrument. No transfer of such
securities will be made on the books of the Corporation
unless accompanied by evidence of compliance with the
terms of such Agreement.
Such certificate shall bear any additional endorsement
which may be required for compliance with federal or state
securities or blue sky laws. In the case of uncertificated
shares of Common Stock, the books of ARAMARK
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shall bear appropriate notations reflecting the foregoing.
3. Certain Permitted Transfers of Shares.
3.01 Estate Planning Transfers, etc. Subject to the restrictions set
forth in Section 2.03 and Section 4.06, a Stockholder shall be entitled to
make the following transfers of shares of Common Stock: (A) if made for
nominal consideration or as gifts: (i) any transfer or assignment to any one
or more of the following relatives of the Stockholder - spouse, child,
grandchild, parent - or to a trust of which there are and continue to be,
during the term of this Agreement no principal beneficiaries other than one or
more of such relatives; (ii) any transfer to any charitable organization which
qualifies as such under Section 501 (c) (3) or any successor provision of the
Code; (iii) any transfer to a legal representative in the event any
Stockholder becomes mentally incompetent; (iv) any transfer of record title to
any nominee or custodian, provided that the Stockholder so transferring such
shares remains the beneficial owner thereof; (B) any transfer among members of
a family, their trusts or other entities, if approved by the Board of
Directors; (C) any transfer among Institutional Investors which became
Stockholders in December 1984; and (D) with respect to a corporate or
partnership Stockholder transfer between an Affiliate and such corporate or
partnership Stockholder (it being understood with respect to such Affiliate
that the later sale of such Affiliate as part of a sale or series of sales of
substantial assets other than Common Stock would not constitute an indirect
sale of Common Stock by such corporate or partnership Stockholder, and need
not be made within the terms of this Agreement, provided that an officer of
such institution certifies that such sale is not being undertaken to evade the
transfer restrictions herein).
3.02 Permitted Pledges. A Stockholder shall be entitled to pledge his
or her shares of Common Stock to ARAMARK, a commercial bank, savings and loan
institution or any other lending or financial institution as security for any
indebtedness of such Stockholder to such lender; provided that such lender
shall first agree not to dispose of such shares except in compliance with the
provisions of this Agreement.
3.03 Authority of Board of Directors to Approve Transfers; Actions by
Board of Directors. Notwithstanding any other provision of this Agreement, the
Board of Directors shall have the authority to approve any transfer, or class,
category or type of transfer, of Common Stock. Such authority of the Board of
Directors shall extend to, among other things, (i) the authority to create an
internal market for shares of the Company's stock pursuant to which Management
Investors would be offered the opportunity to sell a portion of their shares
at the times and on the terms set by the Board of Directors, and (ii) the
authority to waive entirely the restrictions (including, without limitation,
restrictions relating to rights of first offer and reoffer, calls upon
termination of employment and sales, transfers and other dispositions of
shares) set forth in this Agreement which relate to Management Investors and
which do not relate to Outside Investors. Any such approval may be revoked by
the Board at any time without notice and such revocation shall be effective
with respect to any action, including any or all transfers or proposed
transfers, unless, prior to such revocation, the shares have been presented to
the transfer agent for the purpose of registering such transfer, in proper
form and satisfying the requirements of Section 8-401 of the Uniform
Commercial Code or such other applicable law relating to the duty of an issuer
to register securities transfers.
The Board of Directors may delegate any and all authority it has under
this Agreement to any committee thereof and/or to any authorized officer or
agent.
4. Rights of First Offer and Reoffer of Shares.
4.01 Transfers by Management Investors.
(a) A Management Investor or Permitted Transferee may sell shares
of Common Stock, by complying with the terms of this Section 4.
The selling Management Investor shall first give written notice
(a "Management Investor's Notice") to ARAMARK stating such
selling Management Investor's desire to make such transfer, the
number of shares of Common Stock to be transferred (the "Offered
Management Shares"), and the price which the selling Management
Investor proposes to be paid for the Offered Management Shares,
which proposed price shall not be greater than the Appraisal
Price of (an equivalent number of) shares of Class B Common Stock
(the "First Offer Price").
(b)Upon receipt of the Management Investor's Notice, ARAMARK
shall have the irrevocable and exclusive option to buy up to all
of the Offered Management Shares at the First Offer Price;
provided, however, that ARAMARK shall not have the right to
purchase any of the Offered Management Shares unless either (i)
ARAMARK purchases all such Offered
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Management Shares, or (ii) such selling Management Investor
consents to the purchase of less than all of the Offered
Management Shares. ARAMARK's option under this Section 4.01(b)
shall be exercisable by a written notice to such selling
Management Investor, given within 45 days from the date of
receipt of the Management Investor's Notice.
4.02 Transfers by Outside Investors.
(a)An Outside Investor may sell shares of Common Stock, including
pursuant to the registration rights under Section 2.1 of
ARAMARK's Amended and Restated Registration Rights Agreement
amended and restated as of April 7, 1988 (the "Registration
Rights Agreement"), by complying with the terms of this Section
4. The selling Outside Investor shall first give written notice
(a "Seller's Notice") to ARAMARK stating such selling Outside
Investor's desire to make such transfer, the number of shares of
Common Stock to be transferred (the "Offered Investors' Shares"),
and the price which the selling Outside Investor proposes to be
paid for the Offered Investors' Shares (the "First Offer
Investors' Price").
(b)Upon receipt of the Seller's Notice, ARAMARK shall have the
irrevocable and exclusive option to buy up to all of the Offered
Investors' Shares at the First Offer Investors' Price; provided,
however, that ARAMARK shall not have the right to purchase any of
the Offered Investors' Shares unless either (i) ARAMARK purchases
all such Offered Investors' Shares, or (ii) such selling Outside
Investor consents to the purchase of less than all of the Offered
Investors' Shares. ARAMARK's option under this Section 4.02(b)
shall be exercisable by a written notice to such selling Outside
Investor, given within 45 days from the date of the receipt of
Seller's Notice.
4.03 Transfer of Offered Shares to Third Parties. If the Management
Investor's Notice or the Seller's Notice (collectively, the "Notice") required
to be given pursuant to Section 4.01 or 4.02, as the case may be, has been
duly given, and ARAMARK determines not to exercise its option to purchase the
Offered Management Shares or the Offered Investors' Shares (collectively, the
"Offered Shares") or determines (with the consent of the Stockholder who has
made the First Offer) to exercise its option to purchase less than all the
Offered Shares, then the Stockholder who has made such First Offer shall be
free, for a period of 90 days from the earlier of (i) the expiration of the
option period with respect to such First Offer pursuant to Section 4.01 or
4.02, as the case may be, or (ii) the date such Stockholder shall have
received written notice from ARAMARK stating that ARAMARK intends not to
exercise in whole or in part the option granted under Section 4.01 or 4.02, as
the case may be, to sell to any third-party Transferees the remaining Offered
Shares, at a price equal to or greater than the First Offer Price, in the case
of Management Investors or their Permitted Transferees, and the First Offer
Investors' Price, in the case of Outside Investors; provided, however, that
the Transferee complies with the provisions of Section 2.03; and provided
further that, in the case where such selling Stockholder is a Management
Investor or a Permitted Transferee, such Transferee shall have been approved
by ARAMARK as a suitable investor in a privately-owned services management
company. ARAMARK shall not unreasonably withhold or delay such approval.
Anything herein to the contrary notwithstanding, the 90-day period described
in this Section 4.03 shall be extended until the completion of all sales
pursuant to a registration statement, a request for which was made
substantially concurrently with the Notice.
4.04 Reoffers. In the event the proposed purchase price of a
third-party Transferee for the Offered Shares is less than the First Offer
Price or the First Offer Investors' Price, as the case may be, the Stockholder
desiring to sell at such lesser price shall not sell or otherwise transfer any
of the Offered Shares unless such selling Stockholder shall first reoffer the
Offered Shares at such lesser price to ARAMARK by giving written notice (the
"Reoffer Notice") to ARAMARK of such selling Stockholder's intention to make
such transfer at such lower price (the "Reoffer Price"). ARAMARK shall then
have an irrevocable and exclusive option to purchase all or part of the
Offered Shares at the Reoffer Price, exercisable in the same manner as
provided in Section 4.01 or 4.02, as the case may be. In the event ARAMARK
does not then elect to purchase all the remaining Offered Shares, or ARAMARK
elects (with the consent of the Stockholder desiring to sell) to purchase less
than all the remaining Offered Shares, the remaining Offered Shares may be
sold by such selling Stockholder within 30 days following the earlier of (i)
the expiration of the option period with respect to such Reoffer pursuant to
Section 4.01 or 4.02, as the case may be, or (ii) the last date on which such
selling Stockholder shall have received written notice from ARAMARK stating
that ARAMARK intends not to exercise in whole or in part the option
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granted in this Section 4.04, at a price equal to or greater than the Reoffer
Price; provided, however, that the Transferee complies with the provisions of
Section 2.03; and provided further that, in the case where such selling
Stockholder is a Management Investor or a Management Investor's Permitted
Transferee, such Transferee shall have been approved by ARAMARK as a suitable
investor in a privately-owned services management company. ARAMARK shall not
unreasonably withhold or delay such approval.
4.05 Waiting Period With Respect to Subsequent Transfers. In the event
that ARAMARK does not exercise its option to purchase any or all of the
Offered Shares at the First Offer Price or the First Offer Investors' Price,
as the case may be, or at the Reoffer Price, and the Stockholder desiring to
sell shall not have sold the remaining Offered Shares to any Transferee for
any reason before the expiration of the 30 day period described in Section
4.04 in the event of a Reoffer, or, if no Reoffer Notice is given, the 90 day
period described in Section 4.03, then such selling Stockholder shall not sell
any shares of Common Stock to any Transferee or other Stockholder (other than
to Permitted Transferees pursuant to Section 3.01) at any price for a period
of three months from the last day of such 30 or 90 day period, as the case may
be.
4.06 No Sales of Control.
(a) Subject to Section 4.06(b) and except as provided in Section
3.03 (transfers approved by the Board of Directors), no Person or
group of Persons, as defined in Section 13 (d) (3) of the
Securities Exchange Act of 1934 (the "Exchange Act"), including
for the purposes of this paragraph as part of such Person's
group, Transferees pursuant to Section 3.01, shall become
(whether through the purchase of shares pursuant to this
Agreement or otherwise or through any other action) the holder,
directly or indirectly, of 10% or more of either the outstanding
shares of Class A Common Stock or the outstanding shares of Class
B Common Stock. Any transaction resulting in a violation of this
Section 4.06(a) shall be void, and of no effect against ARAMARK,
and ARAMARK shall not record any such purported transfer on its
books. Two or more Stockholders owning in the aggregate 10% or
more of such outstanding shares shall not be deemed to be a group
of Persons for the purposes of this Section 4.06 solely because
such Stockholders are parties to this Agreement or because such
Stockholders are related by blood or marriage and/or because such
Stockholders are officers or directors of ARAMARK.
(b)The provisions of Section 4.06(a) shall not apply to the
acquisition by ARAMARK, directly or indirectly, of shares of
Common Stock, notwithstanding that as a result of such
acquisition any Person or group of Persons acting in concert
would own 10% or more of such outstanding shares subsequent to
such an acquisition, but shall apply to any subsequent
acquisition or other action by such Person or group of Persons.
4.07 Form of Consideration for Shares. No offer to purchase or to sell
shares of Common Stock shall be deemed to be a valid offer under this Section
4 unless the purchase price of such offer is payable in cash or securities
that can be readily valued by reference to quoted trading prices. The purchase
price of shares upon exercise of an option under this Section 4 in respect of
a Notice which specifies only cash as the form of consideration shall be
payable only in cash.
4.08 Merger Transaction. Subject to any applicable provisions of the
Certificate of Incorporation or any loan agreement or instruments to which
ARAMARK is a party, ARAMARK may enter into any agreement of merger to merge
with or into any other corporation; and, in such event, Sections 4.01 through
4.07 of this Agreement shall not be applicable to such merger and all shares
may be transferred for such consideration as approved by the Board of
Directors and the Stockholders in accordance with applicable law.
4.09 Transfers in a Public Offering. In the event a request is made
under Section 2.1 of the Registration Rights Agreement for a demand
registration, then the procedures set forth in Sections 4.02 through 4.05
shall be modified in the following respects:
(a)Such request shall also provide the information required to be
stated in a Seller's Notice, and shall also constitute a Seller's
Notice.
(b)Prior to the expiration of the 21 day period under the
Registration Rights Agreement within which ARAMARK is
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to file a registration statement covering the shares the holder
of which requested a demand registration, ARAMARK shall have
the irrevocable and exclusive option to buy all (and only all)
of the Offered Investors' Shares at the First Offer Investors'
Price, which shall be the proposed public offering price after
reduction for commissions, discounts and the like.
(c)In the event the public offering price (after reduction for
commissions, discounts and the like) is more than 10% lower than
the First Offer Investors' Price, or the number of shares
included in the offering is reduced to less than 75% of the
shares as to which the Seller's Notice was delivered (otherwise
than by reason of a cut down by the Underwriter) then Section
4.04 shall apply, but such section shall not otherwise apply to
any sale pursuant to a registration statement.
(d)In the event all of the Offered Investors' Shares are elected
to be purchased, the demand registration shall be held in
abeyance pending the closing of such purchase in accordance with
this Agreement.
5. Put of Shares upon Death, Complete Disability or Normal Retirement.
5.01 Put in Event of Death, Complete Disability or Normal Retirement.
Subject to any instruments or agreements of ARAMARK from time to time in
effect restricting or otherwise governing the repurchase or retirement of
shares of ARAMARK's capital stock (the "Loan Agreements") and to applicable
law, unless a Call pursuant to Section 6.01 shall have been exercised by
ARAMARK, upon the death, Complete Disability or Normal Retirement of any
Investor Group member, at the option of such Investor Group member, such
Investor Group member's estate, heirs or personal representative, and such
Investor Group member's Permitted Transferees (other than Permitted
Transferees specified in Section 3.01(A)(ii)) (collectively, the "Holders" of
such Investor Group member's shares) and within 30 days of receipt by ARAMARK
of a Seller's Notice from such Holders, which notice must be given within 30
days from the date of the appointment of a personal representative of such
Investor Group member, the date he or she became Completely Disabled, or the
date of his or her Normal Retirement, ARAMARK shall purchase from such Holders
the shares of Common Stock held by such Holders specified in such Seller's
Notice up to 30% of such shares so held at a purchase price determined in
accordance with Section 5.02. ARAMARK shall be under no obligation to purchase
such shares unless it shall have received a Seller's Notice from such Holders
in accordance with this Section 5.01.
5.02 Purchase Price of Put Shares. The purchase price for the shares
of Common Stock purchased pursuant to Section 5.01 shall be the Appraisal
Price of (an equivalent number of) shares of Class B Common Stock, for the
shares of a Holder of a Management Investor's shares, and shall be the
Appraisal Price of shares of Class A Common Stock for the shares of a Holder
of an Individual Investor's shares. ARAMARK shall satisfy its obligation to
purchase shares upon the exercise of any Put granted under Section 5.01 with
cash.
6. Call of Shares upon Termination of Employment.
6.01 Call in Event of Termination. Unless the shares of Common Stock
held by a Management Investor and his or her Permitted Transferees have been
earlier sold pursuant to Section 4 (rights of first offer and reoffer),
including the earlier recording of the transfer of such shares on the books of
ARAMARK, ARAMARK shall have an exclusive and irrevocable option, at any time
and from time to time during the period of 10 years following the termination
of employment of such Management Investor for any reason whatsoever (including
without limitation death, Complete Disability or Normal Retirement) to make a
purchase or purchases of up to all of the shares of Common Stock owned by such
Management Investor and his or her Permitted Transferees, at a purchase price,
with respect to any such exercise, determined in accordance with Section 6.02.
6.02 Purchase Price. The purchase price per share for any shares of
Common Stock purchased pursuant to Section 6.01 shall be the lesser of (i) the
Appraisal Price of (an equivalent number of) shares of Class B Common Stock at
the time ARAMARK gives notice that it is exercising its Call option and (ii)
the Appraisal Price of (an equivalent number of) shares of Class B Common
Stock at the date of termination of employment, plus in the case where ARAMARK
gives notice it is exercising its Call option more than 120 days after the
date of termination of employment, 8% simple interest on such amount from the
date of termination of employment through the date ARAMARK gives notice that
it is exercising its Call option. ARAMARK shall satisfy its obligations to
purchase shares upon the exercise of such Calls with
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cash up to the least of $100,000, or the Management Investor's highest annual
base salary as an employee of ARAMARK, or 10% of the aggregate purchase price
for such Called shares and, at the Company's option, with cash and/or
Promissory Notes valued at their principal amount for the remainder.
7. Involuntary Transfer of Shares.
7.01 Certain Involuntary Transfers; Seller's Notice. Except for
involuntary transfers (by foreclosure or otherwise) to ARAMARK of shares of
Common Stock pledged to ARAMARK, in the event a Stockholder shall
involuntarily transfer directly or indirectly any or all of his or her shares,
for any reason other than as a result of those events specified in Section 6,
such Stockholder shall give written notice within 30 days of such involuntary
transfer (the "Stockholder Notice") to ARAMARK, with a copy to the Transferee,
stating the fact that the involuntary transfer occurred, the reason therefor,
the date of the transfer, the name and address of the Transferee and the
number of shares acquired by the Transferee (the "Acquired Shares"). For
purposes of this Section 7 an involuntary transfer shall include, without
limitation, a court-ordered transfer, constructive trust or other device
designed to transfer economic benefit of share ownership.
7.02 Right to Repurchase. For a period of 60 days from the date of
receipt of the Stockholder Notice or, failing receipt of such notice, 60 days
from the date ARAMARK sends written notice to the Transferee that the transfer
is deemed to be an involuntary transfer subject to repurchase under this
Agreement, ARAMARK shall have an irrevocable and exclusive option to buy all
of the Acquired Shares, exercisable in the same manner as provided in Section
4.01, and the provisions of such applicable Section shall be followed in their
entirety except that the purchase price shall be as provided in Section 7.03.
7.03 Purchase Price. The purchase price for shares purchased pursuant
to Section 7.02 shall be payable in cash and shall be equal to the Appraisal
Price of (an equivalent number of) shares of Class B Common Stock at the time
ARAMARK gives notice that it is exercising its Call option.
8. Limited Access to Information.
8.01 No Duty to Disclose Information. Each of the parties to this
Agreement acknowledges and agrees that it is in the best interests of ARAMARK
and the Stockholders taken as a whole for ARAMARK to be able to conduct
orderly transactions in Common Stock on a continual basis (including in
connection with the internal market and repurchases upon termination of
employment and otherwise), and for ARAMARK concurrently to be able to consider
from time to time on a confidential basis potential transactions which could
affect the fair market value and/or the Appraisal Price of the Common Stock.
Each of the parties to this Agreement acknowledges and agrees that, at the
time of a sale by a Stockholder of shares of Common Stock pursuant to this
Agreement, there may have occurred or be proposed or pending an event or a
transaction that could affect the Appraisal Price of the Common Stock, and
that the Appraisal Price of the Common Stock (and, accordingly, the repurchase
price) may be substantially less than the fair market value as of the current
date, and further acknowledges and agrees that ARAMARK may have valid business
reasons not to, and in any case shall not be required to, disclose any event
or transaction that may have occurred or be proposed or pending at the time of
any such sale.
8.02 Sale of ARAMARK Following Call. In the event that any entity,
person, or any group of persons acting in concert (excluding the Management
Investors as a group), acquires in any manner shares of Common Stock with 50%
of the ordinary voting rights of the outstanding shares of Common Stock or in
the event of the redemption or repurchase of all the shares of Common Stock in
connection with a sale of all or substantially all the assets of ARAMARK, or
the winding up, dissolution or liquidation of ARAMARK, within 90 days from the
date of a sale pursuant to Section 6.01 then, subject to the Loan Agreements,
ARAMARK and/or the purchaser of such shares of Common Stock with 50% of the
ordinary voting rights of the outstanding shares of Common Stock shall pay to
the Holders whose shares have been so purchased the excess, if any, of the
amount per share realized by ARAMARK's stockholders upon such acquisition,
redemption, repurchase, winding up, dissolution or liquidation over the
purchase price per share paid to such Holders pursuant to Section 6 less the
interest paid on any Promissory Notes paid as consideration for such stock and
less a financing cost for carrying such stock for any cash received, based on
an interest rate equal to the rate paid by ARAMARK under the Loan Agreements
at the date of payment hereunder, for the period from the date of payment to
such Holders pursuant to Section 6 to the date of such acquisition,
redemption, repurchase, winding up, dissolution or liquidation, for each share
purchased by ARAMARK. Determination of whether or not any such payment is
appropriate, and the amount of such payment, shall be made by the Board of
Directors; and such determination shall be conclusive and binding on all
parties hereto.
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9. No Right to Continued Employment. Neither this Agreement nor the ownership
of Common Stock by a Management Investor shall confer upon any Management
Investor any right to continue in the employ of ARAMARK or any of its
Subsidiaries or limit in any respect the right of ARAMARK or its Subsidiaries
to terminate his or her employment at any time.
10. Closing.
10.01 Closing Date; Purchase Price. Any selling Stockholder and ARAMARK,
as purchaser, of shares of Common Stock pursuant to Section 4, 5, 6 or 7 shall
mutually determine a closing date (the "Closing Date") which, unless this
Agreement otherwise explicitly provides, shall be not more than 60 business
days after ARAMARK gives notice that it will purchase such shares; provided,
however, that absent agreement, the Closing Date shall be the business day
determined by ARAMARK. In respect of shares of Common Stock distributed by any
employee benefit plan upon termination of employment, the Closing Date shall
be such date selected by ARAMARK consistent with the orderly administration of
such plan.
Notwithstanding anything in this Agreement to the contrary, the Closing
Date may be delayed in any case in which ARAMARK cannot, in compliance with
the Loan Agreements or applicable law, purchase any shares of Common Stock
that it is otherwise obligated to purchase until the earliest practicable date
when such closing may be effected in compliance with such Loan Agreements or
applicable law. The closing shall be held at 11:00 a.m., local time, at the
offices of ARAMARK or at such other time or place as the parties may agree.
The determination date of the Appraisal Price shall be appropriately
changed if the Closing Date is delayed in accordance with the foregoing
paragraph.
10.02 Shares No Longer Outstanding. If a selling Stockholder shall fail
to deliver the certificates representing the shares of Common Stock to be sold
or shall otherwise fail to perform any obligation required to be performed at
the closing and ARAMARK shall have been ready to purchase such shares at the
closing, then effective at the closing, such shares shall no longer be deemed
to be outstanding, and all rights of the holder thereof as stockholder of
ARAMARK (except the right to receive from ARAMARK the purchase price therefor)
shall cease.
10.03 Deliveries at Closing; Method of Payment of Purchase Price. On the
Closing Date, any selling Stockholder shall deliver certificates with
appropriate transfer tax stamps affixed and with stock powers endorsed in
blank, representing the shares of Common Stock to be purchased, and ARAMARK,
as purchaser shall deliver to such Stockholder the purchase price which is
payable in cash (or by wire transfer or check) and the other consideration, if
any, to be given in exchange for such shares. In addition, if the person
selling shares is the personal representative of a deceased Stockholder, the
personal representative shall also deliver to the purchaser or purchasers (i)
copies of letters testamentary or letters of administration evidencing his or
her appointment and qualification, (ii) a certificate issued by the Internal
Revenue Service pursuant to Section 6325 of the Code discharging the shares
being sold from liens imposed by the Code and (iii) an estate tax waiver
issued by the state of the decedent's domicile.
11. Term. The terms and provisions of this Agreement which relate to
Management Investors may be terminated by an instrument in writing signed by
Management Investors who hold, in combination with their Permitted
Transferees, at least the majority of the Common Stock held by Management
Investors and their Permitted Transferees and by ARAMARK. The terms and
provisions of this Agreement which relate to Outside Investors shall terminate
on April 7, 2008 or, if earlier, on the closing date of the first to occur of
(i) any merger or other business combination of ARAMARK with or into any other
corporations, except a merger or other business combination in which the
stockholders of ARAMARK immediately prior thereto constitute more than a
majority of the stockholders (by value of equity securities held) following
such merger, and (ii) the sale of shares of Class A Common Stock to the public
pursuant to an underwritten, registered public offering under the Securities
Act of 1993, as amended (the "Securities Act") as a result of which offering
the public (including for this purpose all purchasers in the underwriting
irrespective of any relationship with ARAMARK) owns 10% or more of the
outstanding shares of Class A Common Stock, provided such shares have a fair
market value equal to at least $25,000,000 at the time of the offering.
Notwithstanding the foregoing, the restrictive terms and provisions set
forth herein with respect to the rights and obligations of Management
Investors shall terminate, effective upon or after the occurrence of a public
offering pursuant to clause (ii) above, to the extent the existence of such
terms and provisions would impair the ability of ARAMARK to list its Common
Stock on the New York Stock Exchange or, in the written opinion of the lead
underwriter, significantly impair the value of the Common Stock proposed to be
sold in a public offering.
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12. Registration of Common Stock. In the event of any registration under the
Securities Act and public offering of Common Stock, each Stockholder shall, at
a meeting convened for the purpose of amending the Certificate of
Incorporation, vote to increase the authorized number of shares of Common
Stock and, if necessary, to subdivide the outstanding shares of Common Stock
of ARAMARK, in both instances as recommended by a majority of the members of
the Board in order to effectuate such public offering.
13. Injunctive Relief. It is acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties fail to
comply with any of the obligations herein imposed on them and that in the
event of any such failure, an aggrieved person will be irreparably damaged and
will not have an adequate remedy at law. Any such person shall, therefore, be
entitled to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.
14. Notices. All notices, statements, instructions or other documents required
to be given hereunder, shall be in writing and shall be given either
personally, or by mailing the same in a sealed envelope, first-class mail,
postage prepaid, addressed to ARAMARK at its principal offices to the
attention of the General Counsel and to the other parties at their addresses
reflected in the stock records of ARAMARK, or sent by telegram, telex,
telecopy or similar form of telecommunication. Each Stockholder, by written
notice given to ARAMARK in accordance with this Section 14 may change the
address to which notices, statements, instructions or other documents are to
be sent to such Stockholder. All notices, statements, instructions and other
documents hereunder that are mailed shall be deemed to have been given on the
date of mailing.
15. Cooperation. ARAMARK agrees that it will use all reasonable efforts under
the circumstances to help any Stockholder desiring to dispose of its Common
Stock pursuant to the provisions of this Agreement to do so.
16. Miscellaneous.
16.01 Successor and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties, and their respective successors and
assigns. The provisions of this Agreement are for the sole benefit of the
parties hereto and their heirs, executors, administrators, legal
representatives, successors and assigns, and they shall not be construed as
conferring any rights on any other persons. If any Transferee of any
Stockholder shall acquire any shares of Common Stock, in any manner, whether
by operation of law or otherwise, such shares shall be held subject to all of
the terms of this Agreement, and by taking and holding such shares such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement.
ARAMARK may assign to any other Person its rights with respect to any
specific transaction pursuant to Section 4, 5, 6 or 7, provided that Person
complies with the provisions of Section 2.03.
16.02 Governing Law. Regardless of the place of execution, this
Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to agreements made and to be wholly performed
in such State.
16.03 Headings. Paragraph headings are inserted herein for convenience
only and do not form a part of this Agreement.
16.04 Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the transactions
contemplated herein, supersedes all prior written agreements and negotiations
and oral understandings, if any, and may not be amended, supplemented or
discharged except by performance or by an instrument in writing signed by the
holders of at least three-fourths of the Common Stock held by the
Institutional and Individual Investors (taken as a whole), and by Management
Investors who hold (in combination with their Permitted Transferees) at least
a majority of the Common Stock held by Management Investors and their
Permitted Transferees, and by ARAMARK. In the event of the amendment or
modification of this Agreement in accordance with its terms, the Stockholders
shall cause the Board of Directors of ARAMARK to meet within 30 days following
such amendment or modification or as soon thereafter as is practicable for the
purpose of amending the Certificate of Incorporation and By-Laws of ARAMARK,
as may be required as a result of such amendment or modification, and
proposing such amendments to the stockholders of ARAMARK entitled to vote
thereon, and such action shall be the first action to be taken at such
meeting.
This amended and restated Agreement shall become effective upon the
later of (i) December 14, 1994 and (ii) the date ARAMARK has received and
holds duly executed (and not previously rescinded) instruments in writing
approving such amended and
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restated Agreement from the required parties as provided in this Section
16.04.
16.05 Inspection. A copy of this Agreement shall be filed with the
Secretary of ARAMARK and kept with the records of ARAMARK and shall be made
available for inspection by any stockholder of ARAMARK at the principal
offices of ARAMARK.
16.06 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signature Pages Omitted]
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EXHIBIT A
(to Amended and Restated
Stockholders' Agreement)
THIS NOTE IS NOT TRANSFERABLE UNLESS AS A CONDITION
PRECEDENT TO THE EFFECTIVENESS OF ANY TRANSFER THE
PAYEE HAS OBTAINED THE WRITTEN CONSENT OF THE
COMPANY AS TO THE PROPOSED TRANSFER.
$__________ Philadelphia, Pennsylvania
________________, 19___
SUBORDINATED INSTALLMENT NOTE
1. For value received, ARAMARK CORPORATION (formerly The ARA Group,
Inc. and ARA Holding Company), a Delaware corporation (the "Company"), hereby
promises to pay to (the "Payee") the sum of $ in equal, annual
installments of $ and one final installment of $ on each [April/October] 15
commencing on [April/October] 15, 19 , and to pay simple interest at the rate of
% per annum on the unpaid balance thereof, semi-annually in arrears on each
April 15 and October 15.
2. The Payee may not sell, assign or otherwise transfer or encumber
any portion of this Note or interest herein without first procuring the
written consent of the Company, which consent the Company is under no
obligation to provide. No transfer of this Note shall be effective unless such
transfer is in compliance with the foregoing, including the requirements set
forth in the legend provided for above.
3. Both the principal of this Note and interest thereon are payable in
lawful money of the United States of America at 1101 Market Street,
Philadelphia, PA 19107, or such address of any subsequent principal executive
office of the Company within the United States of America as the Company shall
designate in writing to the Payee, or at the option of the Company, by check
mailed to the Payee at such address for the Payee as is indicated on the books
of the Company.
4. This Note may be prepaid in full, or in part, any time, without
premium or penalty. All prepayments shall be applied first to accrued interest
and then to installments of principal in the order of their maturities.
5. The indebtedness evidenced by this Note and the payment of the
principal of and interest on this Note are hereby expressly subordinated, to
the extent and in the manner hereinafter set forth, to the prior payment in
full of all Senior Indebtedness.
5.1 "Senior Indebtedness" means the principal of, premium, if any,
interest and any other amounts due on (1) all Indebtedness incurred, assumed
or guaranteed by the Company, either before or after the date hereof,
(excluding any debt which by the terms of the instrument creating or
evidencing the same is not superior in right of payment to this Note),
including, without limitation, (a) any amount payable with respect to any
lease, conditional sale or installment sale agreement or other financing
instrument or agreement which in accordance with generally accepted accounting
principles is, at the date hereof or at the time the lease, conditional sale
or installment sale agreement or other financing instrument or agreement is
entered into, or assumed or guaranteed by, directly or indirectly, the
Company, required to be reflected as a liability on the face of the balance
sheet of the Company, (b) any amounts payable in respect to any interest rate
exchange agreement, currency exchange agreement or similar agreement and (c)
any subordinated indebtedness of a corporation merged with or into or acquired
by the Company; and (2) any renewals or extensions or refunding of any such
Senior Indebtedness or evidences of indebtedness issued in exchange for such
Senior Indebtedness.
5.2 "Indebtedness" means (a) all items, except items of capital stock
or of surplus or of general contingency reserves or of reserves for deferred
income taxes, which in accordance with generally accepted
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accounting principles in effect on the date hereof should be included in
determining total liabilities as shown on the liability side of a balance
sheet of the Company as at the date of which Indebtedness is to be determined,
(b) all indebtedness secured by any mortgage, pledge, lien or conditional sale
or other title retention agreement existing on any property or asset owned or
held by the Company, whether or not such indebtedness shall have been assumed,
and (c) all indebtedness of others which the Company has directly or
indirectly guaranteed, endorsed, discounted or agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in respect of
which the Company has agreed to supply or advance funds or otherwise to become
liable directly or indirectly with respect thereto, including, without
limitation, indebtedness arising out of the sale or transfer of accounts or
notes receivable or any moneys due or to become due.
6. In the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether voluntary or involuntary and whether in
bankruptcy, insolvency or receivership proceedings, or upon an assignment for
the benefit of creditors or any readjustment of debt, arrangement or
composition among creditors or any other marshalling of the assets and
liabilities of the Company or otherwise), then holders of Senior Indebtedness
shall first be paid in full, or provision made for such payment, before any
payment or distribution, directly or indirectly (including by way of set off)
is made upon the principal of or interest on this Note, and to that end the
holders of Senior Indebtedness shall be entitled to receive in payment thereof
any payment or distribution of assets of the Company, whether in cash or
property or securities, which may be payable or deliverable in any such
proceeding in respect of this Note. The Payee irrevocably authorizes, empowers
and directs all receivers, custodians, trustee, liquidators, conservators and
others having authority in the premises to effect all such payments and
deliveries. Notwithstanding any statute, including without limitation the
Federal Bankruptcy Code, any rule of law or bankruptcy procedures to the
contrary, the right of the holders of the Senior Indebtedness to have all of
the Senior Indebtedness paid and satisfied in full prior to the payment of any
amounts due the payee under this Note shall include, without limitation, the
right of the holders of the Senior Indebtedness to be paid in full all
interest accruing on the Senior Indebtedness due them after the filing of any
petition by or against the Company in connection with any bankruptcy or
similar proceeding or any other proceeding referred to in paragraph 6 hereof,
prior to the payment of any amounts in respect of the Note, including, without
limitation, any interest due to the Payee accruing after such date.
7. No payment, directly or indirectly (including by way of set off),
shall be made by the Company with respect to the principal of or interest on
this Note if (i) an event of default has happened with respect to any Senior
Indebtedness, as defined therein or in the instrument under which the same is
outstanding which if occurring prior to the stated maturity of such Senior
Indebtedness, permits holders thereof upon the giving of notice or passage of
time, or both, to accelerate the maturity thereof ("Senior Indebtedness
Default") and has not been cured, (ii) a payment by the Company to or for the
benefit of Payee would, immediately after giving effect thereto, result in a
Senior Indebtedness Default, or (iii) full payment of all amounts then due for
principal of (or premium, if any), interest or any other amounts due on Senior
Indebtedness shall not then have been made or duly provided for. Upon the
occurrence of any events described in (i), (ii) or (iii) described above,
notwithstanding any event of default under this Note by the Company, the Payee
may not accelerate the maturity of all or any portion of this Note, or take
any action towards collection of all or any portion of this Note or
enforcement of any rights, powers or remedies under this Note, or applicable
law until the earlier of the date on which a Senior Indebtedness Default (or
in the case of (iii) required payments shall have been duly provided for) have
been cured or such Senior Indebtedness has been paid in full.
8. In the event that, notwithstanding the foregoing, the Company shall
make any payment prohibited by Section 6 or 7, then, except as hereinafter in
this Section otherwise provided, unless and until any such Senior Indebtedness
Default shall have been cured or waived or shall cease to exist, such payment
shall be held in trust for the benefit of and shall be paid over to the
holders of Senior Indebtedness or their representative or representatives or
to the trustee or trustees under any indenture under which any instrument
evidencing the Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay in full all Senior
Indebtedness then due, after giving effect to any concurrent payment to the
holders of such Senior Indebtedness.
9. Subject to the payment in full of all Senior Indebtedness at the
time outstanding, the Payee shall be subrogated to the rights of the holders
of Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to the Senior Indebtedness until this Note shall be paid in
full, and no payments or distributions to the holders of Senior Indebtedness
by or on behalf of the Company from the proceeds that would otherwise be
payable to the Payee, or by or on behalf of the Payee, shall as between the
Company and the Payee, be deemed to be a payment by the Company to or for the
account of holders of Senior Indebtedness.
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10. No holder of Senior Indebtedness shall be prejudiced in his or her
right to enforce subordination of this Note by any act on the part of the
Company. The above provisions in regard to subordination are intended solely
for the purpose of defining the relative rights of the Payee on the one hand,
and the holders of Senior Indebtedness, on the other hand, and nothing
contained in this Note is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Indebtedness and the Payee, the
obligation of the Company, which is absolute and unconditional, to pay to the
Payee, subject to the rights of the holders of Senior Indebtedness, the
principal of and interest on this Note as and when the same shall become due
and payable in accordance with its terms, subject to the rights, if any, under
the above subordination provisions, of holders of Senior Indebtedness to
receive cash, property or securities of the Company payable in respect
thereof.
11. The principal of this Note and accrued unpaid interest thereon
shall (if not already due and payable) upon written demand by the Payee become
due and payable forthwith, if there shall have been a default in the payment
of any interest on, or principal of, this Note when it becomes due and payable
(but only if such payment is not prohibited by the provisions of this Note),
and such default shall have continued for a period of 30 days after written
notice of such default shall have been given to the Company and shall be
continuing at the time of such written demand.
12. No course of dealing between the Company and the Payee or any
delay on the part of the Payee in exercising any rights under this Note shall
operate as a waiver of any rights of the Payee.
13. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given when delivered, or deposited in the
mails, first-class, postage prepaid, or delivered to a telegraph office for
transmission, if to the Payee, at such address for the Payee as is indicated
on the books of the Company or if to the Company, at the address of the
principal executive offices of the Company as provided above.
14. This Note shall be governed by the laws of the State of Delaware.
ARAMARK CORPORATION
By: ______________________________
Treasurer
<PAGE>
GENERAL INSTRUCTIONS TO FORMS--ISPO--B-1
In this section, you will find the forms that you will need in order to
complete al of your stock-related transactions. Several copies of each
form have been included. These forms have been color-coded for ease of
reference. As you complete the forms, have the following materials handy, as
you will need to transfer information from them onto the form(s):
o Certificate of Grant--if you are exercising the first installment of a grant.
o Ownership Statement
We urge you to carefully read this Prospectus, as well as all of the other
materials you have received, so that you will be fully informed of the terms
and conditions of the stock purchase program and the payment options available
to you.
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<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
There are up to four ways to finance your stock purchase under the Program. Of course, you may choose to utilize a combination of
the methods listed below.
- ------------------------------------------------------------------------------------------------------------------------------------
DEFERRED INTERNAL STOCK-FOR-
CASH PAYMENT MARKET STOCK
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Who Is All grant holders. Those exercising the 4th, 5th, All owners who have held Those exercising the
Eligible? or 6th installments of a grant. shares at least 6 months 4th, 5th, or 6th
from purchase or from installments of a grant.
stock-for-stock exchange Those with three or
date. more exercisable
Installment Stock
Purchase Opportunity
grants can use for
any installment.
---
- ------------------------------------------------------------------------------------------------------------------------------------
What Is It? Payment in full at Postponing payment of up to Selling shares back to the Exchanging shares you
the time of 75% of your purchase amount. company and applying all or own (at the current
exercise. (Interest, due at the end of part of the proceeds toward appraisal price), for
the deferral period, will be the purchase of more shares. new ones (at your
charged.) grant exercise price).
- ------------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING CHART LISTS THE FORMS TO BE COMPLETED AND RETURNED ACCORDING
TO THE INSTRUCTIONS AT THE BOTTOM OF THE PAGE.
- ------------------------------------------------------------------------------------------------------------------------------------
FOR THIS TRANSACTION . . . COMPLETE AND SUBMIT THESE FORMS . . . AND ALSO SEND IN . . .
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred Stock
Payment Internal Your Check Certificates or
Obligation(1) Market Payable To Confirmation
(Beige) - On Worksheet/ Stock-For- ARAMARK Statements
Exercise Reverse Of Request Stock For Any For Shares
Form(1) Exercise Form(2) Worksheet Balance To Be Sold Or
(Beige) Form (Green) (Gray)(2) Exchanged
- ------------------------------------------------------------------------------------------------------------------------------------
Stock Exercise (Purchase) X X
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred Payment X X X
- ------------------------------------------------------------------------------------------------------------------------------------
Stock Sale(3) (If applied to purchase) X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
Stock-For-Stock Exercise X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) Complete a separate form for each exercise.
(2) For multiple transactions, compile onto one form per registered owner.
(Note: If shares are held jointly in your and your spouse's names, that
is considered as one owner.
(3) If you are not applying proceeds toward a purchase, only submit the
Internal Market form and the Stock Certificate(s) (or Confirmation
Statement) for the shares you are selling.
U.S. EMPLOYEES and EMPLOYEES in countries other than Germany, Belgium and
United Kingdom: Send this completed form and your check, made payable to
ARAMARK Corporation, in U.S. Currency to: First Union National Bank, N.A.,
Shareholder Services Group, P.O. Box 13675, Philadelphia, PA 19101-9024 or 123
South Broad Street, MCPA1328, Philadelphia, PA 19109. You may wish to use the
enclosed postage-paid return envelope. Be sure to mail your materials far
enough in advance to reach the Shareholder Services Group by the deadline of
January 15, 1998.
EMPLOYEES in Germany, Belgium or United Kingdom: If you live in Germany,
Belgium or the United Kingdom, send this completed form and your check to your
Human Resources Department by January 9, 1998. Your check should be in your
own country's currency, payable to ARAMARK Corporation.
<PAGE>
EXERCISE FORM -- See General Instructions, page B-1
SECTION I - WORKSHEET
<TABLE>
<CAPTION>
- -------------------------------- ----------------------------------------------
DETERMINING YOUR COST FOR SHARES Note: Calculations are done in U.S. Dollars*
- -------------------------------- ----------------------------------------------
DEFINITION SOURCE
- ---------- ------
<S> <C> <C>
1 Grant Date ...................................................... Ownership Statement................................ 1
-------
2 This Year's Installment Number .................................. Ownership Statement................................ 2
-------
3 Number of Shares Now Exercisable ................................ Ownership Statement................................ 3
-------
4 Exercise Price Per Share ........................................ Ownership Statement................................ 4 $
-------
5 Number of Shares You Want To Exercise............................ Minimum 100 - Maximum can't exceed Line 3 ........ 5
-------
6 Total Cost of Shares ..................................... Line 4 x Line 5 ................................... 6 $
-------
- ---------------------------------------------------------------------
CALCULATING YOUR TAX WITHHOLDINGS, APPLICABLE TO U.S. BASED EMPLOYEES
- ---------------------------------------------------------------------
7 Appraisal Price Per Share .......................................................................................... 7 $24.90
-------
8 Appraisal Price x Shares Exercised ............................ Line 5 x Line 7 .................................... 8 $
-------
9 Total Appreciation Subject To Taxes ........................... Line 8 - Line 6 .................................... 9 $
-------
10 Total Withholding Tax Due At Purchase(38%) .................... Line 9 x .38........................................ 10 $
-------
11 Total Amount Due ........................................ Line 6 + Line 10.................................... 11 $
-------
- --------------------------------------------------------------------------------
DETERMINING YOUR DEFERRAL -- INSTALLMENTS 4, 5 OR 6 ONLY - ALSO COMPLETE REVERSE
- --------------------------------------------------------------------------------
12 Maximum Amount Eligible To Be Deferred ........................ Line 11 x .75 for Installments 4, 5, or 6 .......... 12 $
-------
13 Payment Amount You Want To Defer(also complete reverse side)... Can't exceed Line 12 - Enter "0" if no deferral .... 13 $
-------
14 Balance After Deferral ........................................ Line 11 - Line 13 .................................. 14 $
-------
- ----------------------------
EXCHANGING OR SELLING SHARES
- ----------------------------
15 Number Of Shares Exchanged .................................... Line 6 of gray Stock-For-Stock Worksheet ........... 15 $
-------
16 Appraisal Price x Shares Exchanged............................. Line 7 of gray Stock-For-Stock Worksheet ........... 16 $
-------
17 Proceeds From Internal Market - Enclose certificates
and green worksheet ........................................ Lines 5 a-e of green Internal Market Worksheet ..... 17 $
-------
- ----------------
EXERCISE SUMMARY
- ----------------
18 Total Cash Due -- Send Check For This Amount in U.S. Dollars* . Line 14 - Line 16 - Line 17 ....................... 18 $
-------
19 Shares Exercised .............................................. Line 5 ............................................ 19
-------
20 Shares Exchanged - Enclose certificates and gray worksheet .... Line 15 ........................................... 20
-------
21 Number of New Shares Acquired ................................. Line 19 - Line 20 ................................. 21
-------
</TABLE>
* Employees in Germany, Belgium or United Kingdom will need to convert this
amount to their own country's currency. See mailing instructions below.
<PAGE>
SECTION II - REGISTRATION AND SIGNATURES
Shares must be registered initially either in your name or in the names of
you and your spouse, as joint tenants. If shares are to be registered jointly
in the names of both you and your spouse, you must print both names below,
enter your Social Security number, if applicable, and you both must sign. If
you are deferring payment, you (and your spouse, if applicable) must also
complete and sign the reverse side. Your shares will be registered to the
address to which the Prospectus containing the exercise form was mailed. If
you have moved or the address is otherwise incorrect, please complete and
return the blue Address Change Card.
I/We hereby represent, warrant, and agree as follows:
A. I/We have received and read copies of (a) the Prospectus dated December 1,
1997, including the Amended and Restated Stockholders' Agreement and (b)
ARAMARK's annual report on Form 10-K.
B. I/We have full power and authority to enter into the Amended and Restated
Stockholders' Agreement.
C. By signing below, I/We hereby execute and deliver and agree to be bound by
the Amended and Restated Stockholders' Agreement.
D. I/We will, upon request, execute any additional documents necessary or
desirable for me/us to become a party to the Amended and Restated
Stockholders' Agreement.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Print Name(s) Signature(s) Social Security Number Date
- ----------------------------- ---------------------------- ------------------------------ ---------------
- ----------------------------- ---------------------------- ------------------------------ ---------------
<S> <C> <C> <C>
Home Phone #: Business Phone #: Business Unit: Component #:
-------------- -------------------- ------------------ --------------
</TABLE>
MAILING INSTRUCTIONS:
U.S. EMPLOYEES and EMPLOYEES in countries other than Germany, Belgium and
United Kingdom: Send this completed form and your check, made payable to
ARAMARK Corporation, in U.S. Currency to: First Union National Bank, N.A.,
Shareholder Services Group, P.O. Box 13675, Philadelphia, PA 19101-9024 or 123
South Broad Street, MCPA1328, Philadelphia, PA 19109. You may wish to use the
enclosed postage-paid return envelope. Be sure to mail your materials far
enough in advance to reach the Shareholder Services Group by the deadline of
January 15, 1998.
EMPLOYEES in Germany, Belgium or United Kingdom: If you live in Germany,
Belgium or the United Kingdom, send this completed form and your check to your
Human Resources Department by January 9, 1998. Your check should be in your
own country's currency, payable to ARAMARK Corporation.
<TABLE>
<CAPTION>
<S> <C> <C>
For Transfer Agent Check Number Check Amount $
---------------- ------------------------
<S> <C> <C> <C>
use only: Account # Deferred Amount $ Shares Exchanged
-------------------- --------------------- ---------------
</TABLE>
Expiration: 1/15/98
<PAGE>
DEFERRED PAYMENT OBLIGATION -- See General Instructions, page B-1
- --------------------------------------------------------------------------------
INSTRUCTIONS
1. Insert the Payment Amount You Want To Defer (Line 13 from the Exercise
Form) in the first paragraph below.
2. Insert the Number of New Shares Acquired (Line 21 from the Exercise Form)
in the second paragraph below.
3. Print and sign your name exactly as on the Exercise Form. If your spouse
signed the Exercise Form, he/she must also sign this Deferred Payment
Obligation form. By signing this form, your spouse joins in the agreement
you are making to pay the amount of the Deferred Payment Obligation.
- --------------------------------------------------------------------------------
I/We promise to pay to the order of ARAMARK CD Company (a subsidiary of
ARAMARK Corporation) if deferring less than $5,000 or ARAMARK Corporation if
deferring $5,000 or more, $______, and to pay interest from the date the
associated exercise is effected at the rate of 8.5% per year, simple interest.
Payment of the deferred obligation and interest will be due March 15, 2001, or
on demand by the applicable payee, and may be prepaid at any time.
I/We grant to the applicable payee a security interest in ______ shares of
ARAMARK Common Stock (the "Pledged Shares") and agree that the Pledged Shares
will be held as collateral by the applicable payee until the amount is paid in
full. If the amount is not paid when due, the applicable payee will be
entitled to exercise the legal remedies available under applicable law. If any
of the Pledged Shares are to be sold or otherwise transferred, then the amount
will become due immediately.
This agreement may be assigned by the applicable payee at any time and will be
governed by the laws of the Commonwealth of Pennsylvania.
- ----------------------------------------- -------------------------------------
(Print Name) (Print Name)
- ----------------------------------------- -------------------------------------
(Signature) (Signature)
- ----------------------------------------- -------------------------------------
(Date) (Date)
THIS COMPLETED FORM MUST BE RECEIVED AT THE ARAMARK SHAREHOLDER SERVICES GROUP
NO LATER THAN JANUARY 15, 1998.
Employees in Germany, the United Kingdom, and Belgium should submit all forms
to their Human Resources Department no later than January 9, 1998.
<PAGE>
SECTION I -- INTERNAL MARKET SALE REQUEST FORM
Use one form per registered owner.
INSTRUCTIONS: In this Section, you will be listing the certificate(s) or
confirmation statement(s) that you are enclosing, and indicating the number of
shares listed on each, and the number of shares you would like to sell.
NAME (PLEASE PRINT) ACCOUNT OR SOCIAL SECURITY NUMBER
- ----------------------------------------- ----------------------------------
- ----------------------------------------- ----------------------------------
----------------------------------------------
SALE OF COMMON SHARES -- CLASS B
----------------------------------------------
<TABLE>
<CAPTION>
NO. OF SHARES NO. OF SHARES TO
CERTIFICATE/ SHOWN ON THIS BE SOLD FROM THIS
LINE STATEMENT LINE CERTIFICATE/ LINE CERTIFICATE/
NO. NUMBER ENCLOSED NO. STATEMENT NO. STATEMENT
--- --------------- --- --------- --- ---------
<S> <C> <C> <C> <C> <C>
1a 1a 1a
--------- --------------------------- -------- -------------------------- -------- --------------------------
1b 1b 1b
--------- --------------------------- -------- -------------------------- -------- --------------------------
1c 1c 1c
--------- --------------------------- -------- -------------------------- -------- --------------------------
1d 1d 1d
--------- --------------------------- -------- -------------------------- -------- --------------------------
1e 1e 1e
--------- --------------------------- -------- -------------------------- -------- --------------------------
1f 1f 1f
--------- --------------------------- -------- -------------------------- -------- --------------------------
1g 1g 1g
--------- --------------------------- -------- -------------------------- -------- --------------------------
1h 1h 1h
--------- --------------------------- -------- -------------------------- -------- --------------------------
1i 1i 1i
--------- --------------------------- -------- -------------------------- -------- --------------------------
1j 1j 1j
--------- --------------------------- -------- -------------------------- -------- --------------------------
TOTAL SHARES TO BE
SOLD
(COPY 1l TO LINE 1 ON
TOTAL SHARES REVERSE SIDE)
SHOWN
- -------------------------------------- ----------------------------------- -------- --------------------------
1k TOTAL SHARES 1k 1l
(ADD 1a - 1j IN EACH COLUMN)
- -------------------------------------- -------- ----------------------------------- -------------------------
TOTAL COMMON SHARES LEFT
OVER (1k MINUS 1l) 1m
- -------------------------------------- -------- -----------------------------------
</TABLE>
Note: Shares used in a stock-for-stock exchange or purchased within prior six
(6) months cannot be sold. If shares to be sold are pledged under a prior
Deferred Payment Obligation, Lines 4a, b, and c on front of form must also be
completed.
Complete Sections II and III on reverse side of this form.
EXPIRATION: 1/15/98
(Please see reverse.)
<PAGE>
SECTION II -- INTERNAL MARKET WORKSHEET -- See General Instructions, p. B-1
PLEASE COMPLETE THE REVERSE SIDE FIRST. (Use one form per registered owner.)
<TABLE>
<CAPTION>
- --------------------------------------
SALE OF COMMON SHARES
- --------------------------------------
<S> <C> <C> <C>
1 Number of Common Shares to be Sold (Section I, Line 1l):......................................... 1
------
2 Sale Price Per Common Share (December 1, 1997 appraisal price):.................................. 2 $24.90
------
3 Total Sale Price of Common Shares (Line 1 x Line 2).............................................. 3 $
------
Note: If shares to be sold are pledged under a prior Deferred Payment Obligation, Lines 4a, b, and c must also be
completed.
- --------------------------------------------------
DISTRIBUTION OF TOTAL PROCEEDS
- --------------------------------------------------
4 Amount to be Applied to Pay Off Related Deferred Payment Obligation* (write "N/A" if not applicable)
(a) Principal Due:.............................................................................. 4(a) $
------
(b) Accrued Interest Due:....................................................................... 4(b) $
------
(c) Total Deferred Payment Due (Line 4a + Line 4b):............................................. 4(c) $
------
5 Amount to be Applied to Current Exercise (if applicable)
(a) Grant Date:__________....................................................................... 5(a) $
------
(b) Grant Date:__________....................................................................... 5(b) $
------
(c) Grant Date:__________....................................................................... 5(c) $
------
(d) Grant Date:__________....................................................................... 5(d) $
------
(e) Grant Date:__________....................................................................... 5(e) $
------
(f) Total (Lines 5a + 5b + 5c + 5d + 5e):....................................................... 5(f) $
------
6 Cash Back to You (Line 3 minus Line 4c minus Line 5f):........................................... 6 $
------
7 Total Distribution (Line 4c + Line 5f + Line 6) - Total must equal Line 3:....................... 7 $
------
</TABLE>
SECTION III -- INTERNAL MARKET REQUEST FORM
- --------------------
SIGNATURES
- --------------------
By signing below, you are offering to sell to ARAMARK the shares indicated in
Line 1, subject to the terms and conditions of the Internal Market. You also
are acknowledging that: you have full authority to sell the shares; you have
received and read Form 10-K for fiscal 1997; you are under no obligation to
sell; and the offer price is the most recent appraisal price, reflecting the
shares' current lack of marketability and is less than it would be if the
shares were publicly traded. The Board reserves the right to reduce on a pro
rata basis the number of Class B shares sold by all management owners in the
Internal Market, depending upon the overall number of Class B shares submitted
to the Company for sale. Subject to complying with applicable laws and
regulations (including SEC Rule 13e-3), the Company will not repurchase shares
of Class B Common stock from any stockholder if the repurchase causes such
shares to be held of record by less than 300 holders. Please sign below
exactly as your name(s) appear on the stock certificate(s).
Print Name(s) Social Security or Account Number(s)
- ------------------------------------- ---------------------------------------
- ------------------------------------- ---------------------------------------
Signature(s) Date
- ------------------------------------- ---------------------------------------
- ------------------------------------- ---------------------------------------
- ----------------------------------
DELIVERY ADDRESS(ES)
- ----------------------------------
<PAGE>
================================================================================
Send Check For Net Sale Proceeds To: Send Stock Certificate(s)** To:
- ------------------------------------- ---------------------------------------
- ------------------------------------- ---------------------------------------
================================================================================
* Call the ARAMARK Shareholder Services Group at 1-888-96-OWNER to obtain
the exact amounts of Principal Due and Accrued Interest Due.
** In cases where the number of shares on the stock certificate(s) or
confirmation statement(s) you are submitting exceeds the number of shares
you are selling, a certificate for the balance will be sent to you upon
request, by indicating an address above. If your shares are pledged to an
outside lender, the lender may require that the stock certificate for
unsold shares be returned to the lender.
U.S. EMPLOYEES and EMPLOYEES in countries other than Germany, Belgium and
United Kingdom: Send this completed form and, if applicable, your check, made
payable to ARAMARK Corporation, in U.S. Currency to: First Union National
Bank, N.A., Shareholder Services Group, P.O. Box 13675, Philadelphia, PA
19101-9024 or 123 South Broad Street, MCPA1328, Philadelphia, PA 19109. You
may wish to use the enclosed postage-paid return envelope. Be sure to mail
your materials far enough in advance to reach the Shareholder Services Group
by the deadline of January 15, 1998.
EMPLOYEES in Germany, Belgium or United Kingdom: If you live in Germany,
Belgium or the United Kingdom, send this completed form and, if applicable,
your check to your Human Resources Department by January 9, 1998.
EXPIRATION: 1/15/98
<PAGE>
STOCK-FOR-STOCK WORKSHEET -- See General Instructions, p. B-1
Note: Stock-for-stock transactions are only available for Installments 4,
5, or 6, OR for any installment if you have 3 or more exercisable Installment
Stock Purchase Opportunity Grants. (Use one form per registered owner.)
<TABLE>
- --------------------------------------------------- ------------------------------------------------------- -----------------------
<S> <C> <C>
Employee Name (please print) Social Security or Account Number Date
- --------------------------------------------------- ------------------------------------------------------- -----------------------
</TABLE>
<TABLE>
<CAPTION>
Use One Column For Each Exercise
Involving a Stock-For-Stock Exchange
--------------------------------------------------------
EXERCISE
--------------------------------------------------------
Line
# Definition Source #1 #2 #3 #4 #5 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------- ---------- ----------- ---------- ---------- ----------
1 Grant Date Line 1 on beige Exercise
Form
N/A
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
2 This Year's Installment # Line 2 on beige Exercise
Form
N/A
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
3 Maximum Dollar Amount Line 6 on beige Exercise
Eligible To Be Covered By Form
Exchange $ $ $ $ $ $
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
4 Approximate Dollar Value Portion of Line 3 you wish
Of Shares You Wish To to cover via
Exchange Stock-For-Stock (can't $ $ $ $ $ $
exceed Line 3)
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
5 Current Appraisal Price Per
Share
$24.90 $24.90 $24.90 $24.90 $24.90 $24.90
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
6 Number Of Shares To Be Line 4 (above) / Line 5
Exchanged (above). Rounded down to
next full share
---------- ---------- ----------- ---------- ---------- ----------
(Transfer to Line 15 of beige Exercise Form)
---------- ---------- ---------- ----------- ---------- ----------
7 Appraisal Price x Shares Line 5 (above) x Line 6
Exchanged (above)
$ $ $ $ $ $
---------- ---------- ---------- ----------- ---------- ----------
(Transfer to Line 16 of beige Exercise Form)
</TABLE>
<PAGE>
SHARE EXCHANGE SUMMARY
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE EXCHANGED
----------------------------------------------------------------
Certificate Shares Shown
Number(s) On This
Enclosed Certificate #1 #2 #3 #4 #5 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
------------ ------------------ ---------- ---------- ---------- ---------- ---------- ---------
------------ ------------------ ---------- ---------- ---------- ---------- ---------- ---------
------------ ------------------ ---------- ---------- ---------- ---------- ---------- ---------
Note: Use additional
Stock-For-Stock Worksheets
if you are submitting more than ------------ ------------------ ---------- ---------- ---------- ---------- ---------- ---------
5 stock certificates
------------ ------------------ ---------- ---------- ---------- ---------- ---------- ---------
------------ ------------------ ---------- ---------- ---------- ---------- ---------- ---------
----------------------------------------------------------------
Totals
----------------------------------------------------------------
Must Equal Line 6 Above For Each Exercise And In Total
----------------------------------------------------------------
</TABLE>
THIS COMPLETED FORM AND UNSIGNED STOCK CERTIFICATES MUST BE RECEIVED AT THE
ARAMARK SHAREHOLDER SERVICES GROUP NO LATER THAN JANUARY 15, 1998.
Employees in Germany, the United Kingdom, and Belgium should submit all forms
to their Human Resources Department no later than January 9, 1998.
EXPIRATION: 1/15/98
