<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ARAMARK Corporation
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
LOGO ARAMARK
Notice of Annual Meeting of Stockholders
To our Stockholders:
ARAMARK Corporation will hold its annual stockholders meeting on the
Sixteenth Floor of ARAMARK Tower, 1101 Market Street, Philadelphia,
Pennsylvania, on Tuesday, February 9, 1999, at 3:00 p.m. Philadelphia time, for
the following purposes:
1. To elect directors for the ensuing year.
2. To consider and act upon a proposal to amend and
restate the Certificate of Incorporation to eliminate
the automatic conversion of shares of Class B Common
Stock into shares of Class A Common Stock upon
termination of employment.
3. To consider and act upon a proposal to approve the
Senior Executive Annual Performance Bonus
Arrangement.
4. To transact such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on December 23,
1998 as the record date for determination of the stockholders entitled to notice
of and to vote at the meeting. During the ten days prior to the meeting,
stockholders may examine a stockholder list for any purpose germane to the
meeting at ARAMARK's offices at ARAMARK Tower, 1101 Market Street, Philadelphia,
Pennsylvania.
This year, stockholders can vote their shares by using a toll-free
telephone number or the internet (or by fax from outside the United States).
Instructions for using these convenient new services are provided on the proxy
card. Of course, you may still vote your shares by marking your votes on the
proxy card, signing and dating it, and mailing it in the envelope provided.
Whether or not you expect to attend the meeting in person, please vote
your shares in one of the ways described above.
Martin W. Spector
Executive Vice President
and Secretary
Dated: January 5, 1999
<PAGE>
LOGO ARAMARK
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
Solicitation by Board of Directors
We are furnishing this proxy statement in connection with the
solicitation by the Board of Directors of ARAMARK Corporation (ARAMARK or the
Company) of proxies for use at the annual stockholders meeting to be held on
February 9, 1999 and at any adjournment thereof. Stockholders may submit proxies
by mail or phone, or electronically via the internet (or by fax from outside the
United States) by following the instructions on the proxy card included with
this proxy statement. Stockholders who submit proxies may revoke them at any
time before they are voted by submitting a later-dated proxy, or by delivering
written notice of revocation to the Secretary of ARAMARK, or by personally
notifying the Secretary of ARAMARK at the meeting.
ARAMARK's executive offices are located at ARAMARK Tower, 1101 Market
Street, Philadelphia, Pennsylvania 19107 (telephone: 215-238-3000). We expect to
mail proxy cards and proxy statements to our stockholders on or about January 5,
1999.
Shares Outstanding and Voting Rights
Only holders of shares of Class A Common Stock and Class B Common Stock
of record at the close of business on December 23, 1998 are entitled to vote at
the meeting. On that date, 2,669,441 shares of Common Stock Class A and
62,256,942 shares of Common Stock Class B (together, the Common Stock) were
outstanding. Each holder of Common Stock entitled to vote will have the right to
one vote for each such share standing in his, her, or its name on the books of
ARAMARK.
All shares represented in person or by proxy will be counted for quorum
purposes. Where a stockholder does not specify a choice on a properly submitted
proxy, the shares will be voted as recommended by the Board of Directors. Where
a stockholder withholds a vote on the election of any director, such vote will
not be counted as entitled to vote (i.e., will not be counted as a vote cast)
with respect to that election. Abstentions will be counted as votes cast (i.e.,
will be counted as votes against) on any matter to which they relate.
<PAGE>
1. Election of Directors
Stockholders will elect ten directors by a plurality of the votes cast
at the meeting. The persons listed below are proposed to be elected to serve
until the next annual meeting of stockholders and the election and qualification
of their respective successors:
Joseph Neubauer Lee F. Driscoll, Jr.
James E. Ksansnak Mitchell S. Fromstein
Patricia C. Barron Edward G. Jordan
Robert J. Callander Thomas H. Kean
Ronald R. Davenport James E. Preston
If, due to circumstances not now foreseen, any of the nominees becomes
unavailable for election, the proxy agents named in the proxies will have the
right to vote for a substitute in each case, or the Board of Directors will take
appropriate action to reduce the number of directors.
2. Restated Certificate of Incorporation
The Board of Directors has unanimously approved an amendment and
restatement of the Company's Restated Certificate of Incorporation (the
Certificate) and directed that the proposed amendment and restatement (the
Amendment) be submitted to the stockholders for their approval. The Board
believes that the Amendment significantly simplifies the Certificate. The
following is a summary of the more significant changes provided by the
Amendment. A copy of the Amendment with changes from the Certificate marked is
attached as Annex A. Stockholders are urged to read the Amendment, which shows
the complete text of changes only summarized below as well as changes not
included in the summary.
Conversion of Stock upon Termination of Employment. The proposed
Amendment will eliminate the automatic conversion of Class B Common Stock into
Class A Common Stock upon a management investor's termination of employment with
ARAMARK.
Currently, when the employment of a management investor terminates, all
of the shares of Class B Common Stock held by the management investor and his
permitted transferees are automatically converted into shares of Class A Common
Stock on the basis of ten shares of Class B Common Stock converting into one
share of Class A Common Stock, with fractional shares being cashed out. The
Company still retains the right, under the Stockholders' Agreement, to Call, or
repurchase, such shares of Class A Common Stock at the Class B equivalent price
(i.e., the Appraisal Price applicable to the shares of Class B Common Stock had
such conversion not occurred).
In almost all instances, the Company exercises its Call right promptly
after a termination of employment. In these instances, the conversion happens
concurrently with repurchase pursuant to the Call: The shares of Class B Common
Stock are converted into Class A Common Stock, and then the shares of Class A
Common Stock are repurchased at the Class B equivalent price. As a result, the
repurchase transaction becomes more complex, and has the potential to confuse
and alienate the former management investor and his permitted transferees.
Although the Company has taken steps to simplify the process, it remains complex
and potentially confusing. This complexity is unnecessary and would be avoided
if the automatic conversion feature of the Class B Common Stock upon termination
of employment were eliminated.
2
<PAGE>
In the relatively few instances where the Company does not exercise its
Call right promptly, the Company still views these shares as the economic
equivalent of Class B Common Stock; in fact, the Stockholders Agreement
continues to treat these stockholders as management investors rather than
outside investors. However, these stockholders are recognized under corporation
law and under federal securities law as holders of Class A Common Stock with the
rights and privileges thereof. Accordingly, in some instances the Company has
been required to treat such holders economically as outside investors when it
would not otherwise have done so, and in other instances this complexity has
confused such holders. Elimination of the automatic conversion feature upon
termination of employment would allow the Company to treat shares of Common
Stock held by former employees and their permitted transferees as the economic
equivalent of shares held by management employees in all instances.
The automatic conversion feature upon termination of employment was
originally included in the Certificate to assure that voting power would be
concentrated in the stockholders who were current employees of the Company. The
Board of Directors has determined that this conversion feature is no longer
necessary and proposes to eliminate it.
Stockholder Approval. To be adopted, the proposed Amendment must
receive the affirmative vote of a majority of the outstanding shares of the
Class A Common Stock and the Class B Common Stock, voting as a single class, and
the affirmative vote of the holders of a majority of the outstanding shares of
Class B Common Stock, voting as a separate class.
The Board of Directors recommends a vote FOR the Amendment.
3. Senior Executive Annual Performance Bonus Arrangement
The Senior Executive Annual Performance Bonus Arrangement (Arrangement)
is intended to provide for an annual performance bonus for the chief executive
officer (CEO) and any other designated executive officer of the Company upon the
attainment of preestablished performance goals, which annual performance bonus
will be excluded from the computation of compensation for purposes of the U.S.
income tax deductibility limitation on executive officer compensation. The
proposed Arrangement extends the coverage of the current arrangement, which
currently applies only to the CEO, expands the list of metrics that the
Committee may select as annual performance goals, increases the maximum annual
performance bonus that may be paid, and extends the term of the arrangement for
an additional two years through fiscal year 2003.
Background. Current U.S. income tax laws deny a deduction for certain
compensation in excess of $1 million per year paid to the executive officers
required to be named under "Executive Compensation." Certain compensation,
including compensation based on the achievement of preestablished performance
goals (performance-based compensation), is not subject to this deduction limit.
For compensation to qualify for the performance-based compensation exclusion,
the material terms pursuant to which the performance-based compensation is to be
paid, including the performance goals, must be disclosed to, and approved by,
the stockholders prior to the payment.
In February 1997, the stockholders approved an arrangement that applied
only to Mr. Neubauer. All other executive officers participate in the Company's
management incentive bonus plan. (Although the award of bonuses under that plan
is based upon attainment of performance
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<PAGE>
goals, such plan does not meet the technical tax requirements for
performance-based compensation needed to assure income tax deductibility.)
The Board of Directors has approved and recommended for stockholder
approval a proposal to expand the bonus arrangement that currently applies only
to Mr. Neubauer. Under the proposed Arrangement, the committee administering the
Arrangement will have the flexibility to add additional senior executives as
participants to the Arrangement and thereby better assure that all bonus
payments will qualify as deductible compensation expense for the Company under
U.S. income tax laws. This Arrangement is designed to qualify as
performance-based compensation under current U.S. income tax laws. Participants
in the Arrangement for any fiscal year may not also participate in the
management incentive bonus plan for the same fiscal year. However, the
Arrangement does not limit the ability of the Board of Directors to adopt any
additional bonus plan or to pay any other compensation, including any additional
bonus, to any executive officer or other employee. Any such additional bonus
would not be considered performance-based compensation unless it complied with
the stockholder approval and other requirements of U.S. income tax laws.
Description of the Arrangement. The Human Resources, Compensation and
Public Affairs Committee (the Committee) has been designated by the Board of
Directors to administer the provisions of the Arrangement. The Board retains the
authority to designate a different committee to administer the Arrangement. In
any event, only members of the Committee who are independent directors may vote
on matters relating to the Arrangement. The Committee is required generally to
designate participants and, for each participant, to set one or more performance
goals for a fiscal year not later than 90 days after the beginning of such
fiscal year.
The Committee may designate as participants for any fiscal year any
executive officer of the Company. This designation may vary from year to year,
and it is anticipated that it will be based primarily on the Committee's
judgment as to which executive officers are likely to be named in the Company's
proxy statement and are expected to have compensation in excess of $1 million.
For fiscal 1999, the Committee has designated Messrs. Leonard and Kiernan as
participants, in addition to Mr. Neubauer.
Under the Arrangement, the annual performance goals, which may differ
for each participant, must be based on attainment of target levels of or a
targeted percentage increase in, one or more of the following Company or
business group criteria: Earnings Before Interest and Taxes (EBIT), Return on
Net Assets (RONA), Net Income, After Tax Return on Investment (ATROI), Sales,
Revenues, Earnings Per Share, Total Shareholder Return, Return on Equity (ROE),
Return on Investment (ROI), Total Business Return, Return on Gross Investment
(ROGI), Operating Cash Flow or Free Cash Flow. The maximum annual performance
bonus payable to any participant in respect of any fiscal year under the
Arrangement is $3,000,000, or such lesser amount as may be set by the Committee
for such participant at the time it establishes the annual performance goals.
The Committee shall increase the attainment of performance goals to offset (a) a
change in accounting standards, (b) a significant acquisition or divestiture,
(c) a significant capital transaction, or (d) any other unusual, nonrecurring
items that are separately identified and quantified in ARAMARK's audited
financial statements, so long as such accounting change is required or such
transaction or nonrecurring item occurs after the goals for the fiscal year are
established. The Committee at its sole discretion may reduce, but may not
increase, the amount of the annual performance bonus that would be otherwise
payable under the Arrangement. In making this determination, the Committee may
take into
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consideration any and all factors relating to ARAMARK's and the participant's
performance for such fiscal year.
The Arrangement shall be effective, beginning for fiscal year 1999,
upon its approval by the stockholders of ARAMARK. The Committee may, without
further action by the stockholders, amend the Arrangement from time to time as
it deems desirable, provided that no such amendment may increase the employees
who may be designated as participants under the Arrangement, change the
permitted performance measures, increase the maximum bonus payable under the
Arrangement, or make any other change requiring further approval under U.S.
income tax laws. The Arrangement, unless earlier terminated, will be effective
for each of the five fiscal years 1999 through 2003. The Board of Directors may,
in its discretion, terminate the Arrangement at any time.
Stockholder Approval. If the Arrangement is not approved, then Mr.
Neubauer will continue to participate in the current CEO arrangement and other
executive officers will continue to participate in the management incentive
bonus plan to the same extent as in previous years. To be approved, the
Arrangement must receive the affirmative vote of the holders of a majority of
the shares of the Class A Common Stock and the Class B Common Stock present in
person or represented by proxy at the meeting (voting as a single class).
The Board of Directors recommends a vote FOR the Arrangement.
Directors
<TABLE>
<CAPTION>
Name (Age as of November 1, 1998) Office Held (Committee) Since
- --------------------------------- ------------------------ -----
<S> <C> <C>
Joseph Neubauer (57)............................ Chairman and Director (1)(2)(3) 1979
James E. Ksansnak (58).......................... Vice Chairman and Director 1997
Patricia C. Barron (55)......................... Director (1) 1997
Robert J. Callander (67)........................ Director (2)(3)(4)(5) 1986
Ronald R. Davenport (62)........................ Director (1)(4)(5) 1980
Lee F. Driscoll, Jr. (72)....................... Director (1) 1973
Mitchell S. Fromstein (70)...................... Director (3)(4) 1990
Edward G. Jordan (68)........................... Director (1)(2)(3) 1980
Thomas H. Kean (63)............................. Director (3)(4) 1994
James E. Preston (65)........................... Director (2)(3)(4) 1993
</TABLE>
- ---------------------
The numbers following the offices held by the directors indicate membership in
the following Board committees during fiscal 1998:
(1) Audit and Corporate Practices
(2) Executive
(3) Finance
(4) Human Resources, Compensation and Public Affairs
(5) Stock
Directors Meetings and Committees
ARAMARK's Board of Directors held 11 meetings during fiscal 1998. The
Board has certain standing committees, which are described below. During fiscal
1998, each director attended at least 75% of the aggregate of all Board meetings
and all meetings of committees on which he or she served.
5
<PAGE>
The Audit and Corporate Practices Committee reviews the periodic
financial reports and the accounting principles used by the Company and the
adequacy of the Company's system of internal controls. It also reviews with the
independent public accountants and the internal audit department the scope of
their audits, their audit reports, and any recommendation made by them to
determine whether these activities are reasonably designed to assure the
soundness of accounting and financial procedures. It recommends the action to be
taken with respect to the appointment of and approves the compensation of the
Company's independent public accountants and monitors compliance with the
Company's business conduct policy. It held four meetings during fiscal 1998.
The Executive Committee has the full power of the Board of Directors
when the Board is not in session, with specific limitations relating to certain
corporate governance or other corporate matters. The committee did not hold any
meetings in fiscal 1998.
The Finance Committee reviews the overall financial and business plans
of the Company, including capital expenditures, acquisitions and divestitures,
securities issuances and incurrences of debt, and the performance of the
Company's retirement benefit plans. It recommends to the Board specific
transactions involving the foregoing, and it has been empowered by the Board to
approve certain financial commitments and acquisitions and divestitures by the
Company up to specified levels. It held five meetings during fiscal 1998.
The Human Resources, Compensation and Public Affairs Committee consists
entirely of outside directors. The committee determines the base salary of each
of the Chairman and Chief Executive Officer and the President and Chief
Operating Officer (subject to review and approval by the Board) and approves the
salaries and bonuses paid to officers and other employees who are line of
business presidents or whose current or proposed base salary exceeds $200,000
per annum. It reviews appointments to senior management positions and the nature
and scope of the Company's employee benefit plans. It also reviews and
recommends the compensation of outside directors and reviews the Company's
contribution policy and practices for its retirement benefit plans. The
committee is also authorized to exercise the Company's rights and powers under
the Stockholders Agreement, including approval of grants of stock purchase
opportunities under the ARAMARK Ownership Program as well as the annual approval
of an internal market policy providing for the repurchase of shares from
management investors. It held five meetings during fiscal 1998.
The Stock Committee consists of two outside directors. The committee
has concurrent authority, with the Human Resources, Compensation and Public
Affairs Committee, to approve specific transactions involving Company stock
between officers and directors and the Corporation. It did not hold any meetings
during fiscal 1998.
Business Experience
The principal occupations of the Company's directors during the past
five years and other directorships currently held by the directors are as
follows:
Mr. Neubauer has been chief executive officer of the Company since
February 1983 and the chairman since April 1984; he was President of the Company
from February 1983 to May 1997. He is a director of Bell Atlantic Corporation,
CIGNA Corporation, Federated Department Stores, Inc., and First Union
Corporation.
6
<PAGE>
Mr. Ksansnak has been vice chairman of the Company since May 1997. From
February 1991 to May 1997, he was executive vice president of the Company; from
May 1986 to February 1991, he was senior vice president of the Company; and from
May 1986 to May 1997 he was chief financial officer of the Company. He is a
director of Advanta Corp. and CSS Industries, Inc.
Ms. Barron is executive-in-residence and senior fellow at the Leonard
N. Stern School of Business of New York University. She was vice president of
Business Operations Support of Xerox Corporation from April 1997 to July 1998.
From 1995 to 1997, she was president of Engineering Systems of Xerox Corporation
and from 1992 to 1994, was president of Office Document Products of Xerox
Corporation. She is a director of Frontier Corporation, Quaker Chemical
Corporation, Reynolds Metals Company, and Teleflex Corporation.
Mr. Callander is executive-in-residence at the Business School of
Columbia University. He was president of Chemical Bank and Chemical Banking
Corporation from August 1990 to June 1992. He is a director of Barnes Group,
Inc., Omnicom Group Inc., Scudder Global High Income Fund, Scudder New Asia
Fund, and The Korea Fund Inc.
Mr. Davenport has been the chairman of Sheridan Broadcasting
Corporation since 1972.
Mr. Driscoll was a partner in the Philadelphia law firm of Ballard,
Spahr, Andrews & Ingersoll from January 1984 until December 1990.
Mr. Fromstein has been chairman, president and chief executive officer
of Manpower Inc. since March 1976. He is a director of Manpower Inc.
Mr. Jordan was the chairman and chief executive officer of Consolidated
Rail Corporation from 1975 to 1981 and served as the president of The American
College from 1982 until 1987.
Former Governor Kean was the Governor of the State of New Jersey from
1982 until 1990. He has been the president of Drew University since 1990. He is
a director of Amerada Hess Corporation, Bell Atlantic Corporation, Fiduciary
Trust Company International, and United Health Care Corporation.
Mr. Preston is the chairman and a director of Avon Products, Inc. and
has been chairman since 1989. He was also president and chief executive officer
of Avon Products, Inc. from September 1988 until June 1998. He is a director of
Reader's Digest Association and Venator Group, Inc.
Executive Compensation
The following table sets forth information with respect to the
compensation of the named executive officers for services in all capacities to
the Company in the years indicated.
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<TABLE>
<CAPTION>
Stock All
Fiscal Annual Compensation Options Other
Name and Current Principal Position Year Salary Bonus Granted(#)(1) Comp(2)
- ----------------------------------- ---- ------ ----- ------------- -------
<S> <C> <C> <C> <C> <C>
Joseph Neubauer 1998 $948,000 $1,000,000 0 $13,500
Chairman and Chief Executive Officer 1997 $900,000 $800,000 0 $6,000
1996 $850,000 $700,000 0 $14,500
James E. Ksansnak 1998 $400,000 $350,000 0 $6,500
Vice Chairman 1997 $368,000 $325,000 0 $6,000
1996 $354,000 $300,000 0 $6,000
William Leonard 1998 $500,000 $500,000 0 $6,500
President and Chief Operating Officer 1997 $437,500 $400,000 240,000 $6,000
1996 $385,000 $275,000 0 $6,000
Martin W. Spector 1998 $359,500 $235,000 0 $6,500
Executive Vice President, 1997 $345,000 $200,000 0 $6,000
General Counsel and Secretary 1996 $337,000 $200,000 0 $6,000
L. Frederick Sutherland 1998 $364,000 $235,000 0 $6,500
Executive Vice President and 1997 $347,000 $200,000 150,000 $6,000
Chief Financial Officer 1996 $314,000 $240,000 0 $6,000
</TABLE>
- ------------------------
(1) Adjusted for stock split effected in the form of a stock dividend
effective September 1, 1998.
(2) Other compensation includes employer contributions to the Stock
Unit Retirement Plan, plus with respect to Mr. Neubauer for fiscal
1998 and 1996, the value of interest foregone and not recaptured
by the Company relating to payment of premiums for split dollar
life insurance.
Stock Purchase Opportunities
ARAMARK granted more than 9,650,000 stock purchase opportunities to
more than 1,780 employees in fiscal 1998 (adjusted for the stock split effected
in the form of a stock dividend effective September 1, 1998). None were granted
to the named executive officers.
The following table sets forth information with respect to the named
executive officers concerning the exercise of options in fiscal 1998 and the
unexercised options held as of October 2, 1998.
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
(Stock Purchase Opportunities)(1)
<TABLE>
<CAPTION>
Number of Options Held Current Value of Options Held (3)
Shares --------------------------- --------------------------------
Acquired on Value Currently Not Currently Currently Not Currently
Name Exercise Realized (2) Exercisable Exercisable Exercisable Exercisable
---- -------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph Neubauer 900,000 $3,420,000 0 600,000 $0 $4,050,000
James E. Ksansnak 63,000 $239,400 0 42,000 $0 $283,500
William Leonard 259,860 $926,660 0 346,500 $0 $2,064,525
Martin W. Spector 0 $0 0 30,000 $0 $202,500
L. Frederick Sutherland 58,500 $239,130 0 448,500 $0 $2,963,205
</TABLE>
- --------------------
(1) Adjusted for stock split effected in the form of a stock dividend
effective September 1, 1998.
(2) Value realized refers to the appraisal price of the underlying
shares at the time the option was exercised minus the exercise
price of the option.
8
<PAGE>
(3) Options currently exercisable and current values of options are
determined as of October 2, 1998. Current value of an option
refers to the appraisal price of the underlying shares minus the
exercise price of the option.
The following graph compares the five year cumulative return of Class B
Common Stock (measured by the appraisal price) to the Standard & Poor's 500
Stock Index and the Dow Jones Consumer Non-Cyclical Index.
Five Year Cumulative Total Shareholder Return
P 350 |--------------------------------------------------------------------|
e | @* |
r | |
c | |
e | * |
n 300 |--------------------------------------------------------------------|
t | |
| |
o | |
f | |
| |
B 250 |--------------------------------------------------------------------|
a | # |
s | * # |
e | |
| |
Y | |
e 200 |--------------------------------------------------------------------|
a | @ |
r | * |
| |
P | # |
r | |
i 150 |-------------------------------------@------------------------------|
c | @# |
e | |
| @* |
| |
| |
100 |@#*----------#------------------------------------------------------|
1993 1994 1995 1996 1997 1998
@ ARAMARK # S&P 500 ADJ. * DOW JONES: CONSUMER NON-CYC.
Cumulative total return is stated as a percentage of the base year
(1993) stock price. Cumulative total return in a given year equals (i) the
cumulative amount of dividends paid since the base year, assuming dividend
reinvestment, plus the year-end stock price, (ii) divided by the base year stock
price.
<TABLE>
<CAPTION>
Dow Jones
Consumer
Fiscal Year ARAMARK S&P 500 Non-Cyclical
----------- ------- ------- ------------
<S> <C> <C> <C> <C>
1993 100.00 100.00 100.00
1994 118.28 103.45 118.29
1995 133.80 133.61 160.51
1996 155.16 160.57 208.46
1997 192.48 224.08 279.42
1998 330.85 245.56 325.89
</TABLE>
The ARAMARK Ownership Program
The ARAMARK Ownership Program is designed to provide an opportunity for
selected management employees of the Company and its subsidiaries to acquire an
ownership interest in the Company and thereby give them a more direct continuing
interest in the future success of the Company's business. Under the Ownership
Program, direct ownership in the Company has increased from 62 original
management investors in December 1984 to more than 2,000
9
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management investors owning more than 70% of the equity. At October 2, 1998,
management employees and directors held stock purchase opportunities and options
for 24,701,205 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 ARAMARK Ownership Program to expand both the number of management
investors and their percentage ownership.
Through installment stock purchase opportunities and expanded ownership
purchase opportunities, the Company has granted management employees an
opportunity to invest in, or to increase their investment in, the Company.
The purchase price for shares subject to either installment stock
purchase opportunities (ISPOs) or expanded ownership purchase opportunities
(EXPOs) is the Appraisal Price of the shares (based upon the most recent
available independent appraisal) on the date of the grant. Shares issued
pursuant to the exercise of purchase opportunities are subject to the
Stockholders Agreement. Generally, purchase opportunities are not transferable,
and each purchase opportunity is exercisable only by the employee to whom it is
granted.
Each installment stock purchase opportunity has an installment schedule
that limits the number of shares of Common Stock that may be purchased during
each annual installment exercise period. Unless the first installment is
exercised by its expiration date for a minimum number of shares, the entire
installment purchase opportunity is canceled. Thereafter, subsequent annual
installments may be exercised (subject to exercise of a minimum number of
shares) for up to the maximum number of shares specified in the certificate for
that installment. Any portion of an annual installment not exercised by the
appropriate expiration date is canceled. Each installment stock purchase
opportunity is exercisable only while the holder is an employee of the Company
or a subsidiary. The Company also grants cumulative ISPOs, which are similar to
regular ISPOs except that if a portion of an annual installment is not exercised
during the corresponding exercise period, then it is not canceled but rather may
be exercised during any subsequent exercise period.
Each expanded ownership purchase opportunity provides that once vested,
the entire opportunity or a portion (in 100 share increments), may be exercised
during any of the specified annual exercise periods. Upon termination of
employment, an employee can exercise his or her expanded ownership purchase
opportunity if it is vested, within three months after termination (but not
beyond its expiration date). If it is not vested at such time, the entire grant
is canceled.
In connection with the exercise of installment purchase opportunities
and non-qualified stock options, the Company has adopted a deferred payment
program whereby a portion of the purchase price for certain installments may be
deferred at the election of the employee for approximately six years. The
deferred payment obligation is a full recourse obligation of the individual,
accrues interest, and is secured by a pledge of shares of Common Stock. The
interest rate for deferred payment obligations incurred in the current exercise
period has been set at 7.75%. More than 400 employees (including executive
officers) are currently participating in the program. At fiscal year end, the
amount of the deferred payment obligations of Messrs. Neubauer, Ksansnak,
Leonard, Spector, and Sutherland were $5,422,841, $1,104,918, $2,292,432,
$811,973, and $742,114, respectively.
10
<PAGE>
Certain Relationships and Related Transactions
During fiscal 1998, the Company repurchased from four executive
officers and two directors (or their estates) 822,199 shares of Class B Common
Stock (adjusted for the stock split effected in the form of a stock dividend
effective September 1, 1998) at an average price per share of $10.04. The
Company also repurchased from one director 816 shares of Class A Common Stock
(after adjustment for the stock split) in the Company's tender offer at a price
of $166.70 per share ($16.67 per share on a class B equivalent basis). The
Company anticipates that it will continue to repurchase shares held by officers
and directors through the Company's internal market and following their
termination of employment or cessation as a director.
The Company, the members of management who are equity investors in the
Company and certain other investors (collectively, Restricted Investors) are
parties to the Stockholders Agreement. Restricted Investors are subject to
certain restrictions on transfer, with the Company having certain rights of
first offer in the event of any sales or dispositions by Restricted Investors or
their estates. In addition, upon death, complete disability or normal retirement
of management investors or upon death or complete disability of other individual
Restricted Investors, such persons or their estates may cause the Company to
repurchase for cash up to 30% of their shares at the then current appraisal
price but only to the extent such repurchase by the Company is permitted under
the Company's credit agreement. Such repurchased shares may be resold to others,
including replacement personnel. In addition, it is contemplated that shares
that may be issued pursuant to exercise of employee stock options and stock
purchase opportunities would also be subject to the Stockholders Agreement.
Metropolitan Life Insurance Company holds a 6.79% promissory note,
which was issued by a subsidiary of the Company and is guaranteed by the
Company. The outstanding principal amount of the note is $125 million, payable
in $25 million annual installments beginning January 1999, with a final maturity
of January 2003.
Employment Agreements and Change of Control Arrangements
The Company has employment agreements or arrangements with all of its
officers under which they are currently being paid annual salaries ranging up to
$1,000,000. Generally, these are for indeterminate periods terminable by either
party upon notice, ranging from eight weeks to six months. Mr. Neubauer's
agreement currently provides for services to February 2001 (with automatic
renewals for successive three year terms unless terminated) at a current annual
base salary of $1,000,000 and for fully vested supplemental benefits upon his
death of 25% of his highest base salary payable to his surviving spouse, if any,
annually for life or upon his retirement, disability, or termination for any
other reason of 50% of his highest base salary payable to him annually for life.
Upon termination by the Company without cause, Mr. Neubauer's management
incentive bonus shall be prorated through the time of termination; his base
salary at time of termination shall continue for a period of three years after
termination; and his supplemental benefits shall commence at the end of such
three year period.
The Company has a split dollar life insurance agreement with Mr.
Neubauer. The agreement relates to life insurance policies owned by a trust
created by Mr. Neubauer. Pursuant to the agreement, the Company pays a
substantial portion of the premiums on the policies, such amounts to be repaid
from the proceeds of the policies upon their termination. The current amount
thus outstanding is $1,273,000. The Company foregoes charging interest in
11
<PAGE>
each fiscal year on such amount. However, the foregone interest is at least
partially recaptured by the Company by reducing the amount of the interest that
would otherwise accrue on Mr. Neubauer's deferred compensation. The Company
holds a security interest in the policies to secure the repayment of the premium
amount paid by the Company. The arrangement terminates upon the termination of
Mr. Neubauer's employment (other than by reason of his retirement).
Messrs. Ksansnak, Leonard, Spector, and Sutherland have current annual
base salaries of $400,000, $550,000, $360,000, and $394,000, respectively.
Several agreements provide for the deferral of a part of prior salary and bonus
payments with interest, currently at the Moody's long-term bond index rate,
usually payable in equal monthly installments beginning upon retirement,
permanent disability, death, or termination of employment.
The Company currently has a severance pay policy, pursuant to which
severance payments are made to executive officers and certain other key
employees on the basis of continuous service, generally equal to between 3 and
18 months of pay if their employment is terminated for reasons other than cause
plus the continuation of certain other benefits during the period of such
payment.
Compensation of Directors
Directors who are employees of the Company are not paid directors'
fees. Directors who are not employees receive an annual retainer of $30,000 for
serving on the Board, $3,000 for services as chairman of a Board committee and
$1,000 for otherwise serving on a committee, and they receive meeting fees of
$1,000 per day for attendance at meetings of the Board and for each committee
meeting.
Committee Report on Executive Compensation
The Company's compensation programs are designed to support the
Company's overall commitment to continued growth and quality services to
customers. The programs are intended, among other things, to enable the Company
to recruit and retain the best performers, to provide compensation levels
consistent with the level of contribution and degree of accountability, to use
performance measures consistent with the Company's goals, to provide
compensation consistent with competitive market rates, and to include a
significant portion of incentive compensation.
Salary. Salary levels for all salaried employees are generally reviewed
annually. Guideline increases are established generally based upon overall
financial performance of the Company, the current rate of inflation, and general
compensation levels in the industries in which the Company operates. For
increases effective at the beginning of fiscal 1998, the guideline increase for
executive officers, including the five named individuals, was 4.0%. The specific
salary increase for each individual executive officer is based upon a review of
his or her individual performance and development. In the case of Mr. Neubauer,
the review is conducted independently by the Human Resources, Compensation and
Public Affairs Committee without any officers present, subject to final review
and approval by the Board; for all other executive officers, the individual's
supervisor and more senior executives, along with the corporate human resources
department, conduct the review and make a recommendation to the Committee.
12
<PAGE>
Mr. Neubauer's salary was increased by 5.6% at the beginning of fiscal 1998 and
5.3% at the beginning of calendar 1999.
Bonus. Senior executive officers participate in the Company's
management incentive bonus program. Bonuses are awarded annually based, in part,
upon the attainment of predetermined financial goals and, in part, upon the
attainment of individual objectives. Generally, non-financial objectives
represent 30% of the bonus potential and are established by the supervisor of
the executive. Financial goals generally represent 70% of the bonus potential.
An employee's bonus potential generally varies as a percentage of total cash
compensation, dependent upon the level of responsibility of the employee's
position. The measures of financial performance used are for the business unit
that is either under the managerial direction of the participant or, if a staff
executive, is the unit on which the participant impacts most frequently and
significantly. In the case of Mr. Neubauer, the Committee awards a bonus
pursuant to the CEO Annual Performance Bonus Arrangement (the Arrangement).
Pursuant to the Arrangement, the Committee selected Revenue and Net Income as
the financial performance measures and set goals for each measure. The
attainment of the performance goals set by the Committee was increased to offset
the effect of a change in accounting mandated by the FASB's Emerging Issues Task
Force, the revenue reduction due to the magazine and book joint venture
transaction in July and the costs of the transaction, the additional interest
expense for borrowings to fund the tender offer in June, and the unusual
nonrecurring payment of premiums for the redemption of notes. All of the events
for which these adjustments were made occurred after the Committee set the goals
for each measure. All of these adjustments were also made to the bonus targets
under the management incentive bonus plan during fiscal 1998. Mr. Neubauer was
awarded 70% of his maximum bonus potential for fiscal 1998.
Performance measures. The Company uses various financial measures to
evaluate the performance of the Company and its business units, with the
specific measures in some cases varying depending upon the line of business
involved. Generally, the measures currently used are Revenue Growth, EBIT, ROGI,
and in addition, for overall corporate performance, Net Income. EBIT is Earnings
Before Interest and Taxes. ROGI is Return on Gross Investment. Targets for each
of these performance measures are established annually in the Company's business
plan, which is approved at the beginning of the fiscal year by the Board.
Stock Purchase Opportunities. The Human Resources, Compensation and
Public Affairs Committee believes that management ownership contributes to the
Company's success, and supports senior management's goal of expanding both the
number of management investors and their percentage ownership. The Human
Resources, Compensation and Public Affairs Committee, accordingly, grants stock
purchase opportunities to selected management employees. The terms of the stock
purchase opportunities are generally described under "The ARAMARK Ownership
Program." Individual grants are generally made by the Human Resources,
Compensation and Public Affairs Committee in connection with hires and
promotions, and other recognition of performance. The amount of a grant
generally varies depending upon the level of responsibility of the employee's
position, the number of purchase opportunities previously granted, and the
number of shares owned. The individual's supervisor and other senior executives,
along with the corporate human resources department, make recommendations to the
Human Resources, Compensation and Public Affairs Committee. The Company has in
the past also made broad-based grants to management employees.
13
<PAGE>
Members of the Human Resources, Compensation and Public Affairs Committee:
Robert J. Callander, Chair Ronald R. Davenport
James E. Preston The Honorable Thomas H. Kean
Mitchell S. Fromstein
Security Ownership of Certain Beneficial Owners and Management
The following table presents certain information as of December 23,
1998 with respect to shares of the Common Stock of the Company beneficially
owned by each person known to the Company to be the beneficial owner of more
than 5% of either class of the Common Stock, by each director, and by each named
executive officer.
<TABLE>
<CAPTION>
Class B Common Stock Class A Common Stock
-------------------------- -------------------------
Number of Percent of Number of Percent of
Shares (4) Outstanding Shares Outstanding
---------- ----------- ------ -----------
<S> <C> <C> <C> <C>
Trustees for various ARAMARK
employee benefit plans (1)(2) 0 * 1,658,058 62.1%
Metropolitan Life Insurance Company (3) 0 * 337,899 12.7%
Joseph Neubauer (1) 16,869,258 27.0% 0 *
James E. Ksansnak 2,199,671 3.5% 0 *
Patricia C. Barron 11,103 * 0 *
Robert J. Callander 347,418 * 0 *
Ronald R. Davenport 90,000 * 0 *
Lee F. Driscoll, Jr. 15,780 * 0 *
Mitchell S. Fromstein 399,891 * 0 *
Edward G. Jordan 351,000 * 0 *
Thomas H. Kean 381,000 * 0 *
James E. Preston 438,000 * 0 *
William Leonard 1,936,305 3.1% 0 *
Martin W. Spector 2,633,118 4.2% 0 *
L. Frederick Sutherland 1,479,156 2.4% 0 *
All directors and executive
officers as a group (21 persons) 29,348,033 46.0% 0 *
All employees **, directors and
employee benefit plans as a group 69,466,451 100.0% 1,658,058 62.1%
</TABLE>
- --------------------
(1) The address of this stockholder is ARAMARK Corporation, ARAMARK
Tower, 1101 Market Street, Philadelphia, PA 19107.
(2) The trustees are James E. Ksansnak, Brian Mulvaney, Martin W.
Spector and L. Frederick Sutherland.
(3) The address of this stockholder is One Madison Avenue, New York, NY
10010.
(4) Includes shares issuable upon the exercise of currently exercisable
stock purchase opportunities and options.
* Less than 1%.
** Includes children and other transferees for estate planning
purposes.
Relationship with Independent Public Accountants
The Board of Directors is expected to reappoint the firm of Arthur
Andersen LLP as independent auditors for the Company for the 1999 fiscal year. A
representative of Arthur
14
<PAGE>
Andersen LLP is expected to be present at the annual meeting and will be offered
the opportunity to make a statement if desiring to do so and will be available
to respond to appropriate questions.
Financial Statements
A copy of the Company's annual report on Form 10-K for the fiscal year
ended October 2, 1998 (annual report) has been delivered to stockholders.
Stockholders are referred to the annual report for financial and other
information about the Company. The consolidated financial statements and the
management's discussion and analysis of results of operation and financial
condition contained in the annual report are incorporated by reference into this
proxy statement.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements made in this proxy statement or made in the portions
of the annual report incorporated by reference into this proxy statement are
forward-looking statements. Because such statements include risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, those discussed in
the management's discussion and analysis of results of operations and financial
condition contained in the annual report.
Proxy Solicitation
Proxies will be solicited by mail. Proxies may be solicited by
directors, officers and a small number of regular employees of the Company
personally or by mail, telephone or telegraph, but such persons will not be
specially compensated for such services. The entire cost of solicitation will be
borne by the Company.
Discretionary Authority
Management does not intend to present, and does not have any reason to
believe that others will present, any item of business at the annual meeting
other than those specifically set forth in the notice of the meeting. However,
if other matters are presented for a vote, the proxy agents will have the right
to vote the shares represented by proxy cards on such matters in accordance with
their discretion.
Stockholder Proposals
Stockholders may submit proposals on matters appropriate for
stockholder action at future annual meetings of the Company in accordance with
regulations adopted by the Securities and Exchange Commission. Such proposals
must be received by the Company no later than September 7, 1999, to be
considered for inclusion in the Company's proxy statement and form of proxy for
next year's annual meeting and, in any event, must be received by the Company no
later than November 21, 1999, to be eligible for presentation for stockholder
action at next year's annual meeting. Proposals should be directed to the
attention of the Corporate Secretary.
15
<PAGE>
Annex A
RESTATED CERTIFICATE OF INCORPORATION
RESTATED CERTIFICATE OF INCORPORATION
OF
ARAMARK CORPORATION
(Originally Incorporated on September 7, 1984
under the name "ARA Acquiring Company")
FIRST: The name of the Corporation is ARAMARK CORPORATION.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of the Corporation's registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 185,000,000 shares, consisting
of (i) 10,000,000 shares of Series Preferred Stock, $1.00 par value per share
(the "Series Preferred Stock"), and (ii) 25,000,000 shares of Common Stock,
Class A, $.01 par value per share (the "Class A Common Stock"), and (iii)
150,000,000 shares of Common Stock, Class B, $.01 par value per share (the
"Class B Common Stock"). The Class A Common Stock and the Class B Common Stock
are referred to collectively as the "Common Stock".
The Board of Directors shall have the full authority permitted by law
to fix full or limited, or no voting power, and such other designations, powers,
preferences, and relative, participating, optional, special or other rights
(including, as examples and not as a limitation, multiple voting powers and
conversion rights), and qualifications, limitations or restrictions of any
series of the class of Series Preferred Stock that may be desired.
A statement of the designations, powers, preferences, and rights of
each class and series of stock, and the qualifications, limitations and
restrictions in respect thereof, is as follows:
4A. Common Stock
[A statement of the designations, powers, preferences, and rights of
the Common Stock, and the qualifications, limitations and restrictions in
respect thereof, is as follows:]
1. Classes.
The Common Stock shall be divided into two classes, the Class A Common
Stock and the Class B Common Stock. [The Common Stock shall be issuable only in
whole shares.] The powers, preferences and rights of the Class A Common Stock
and the Class B Common Stock, and the qualifications, limitations and
restrictions thereon, shall be in all respects identical, except as otherwise
provided in this Part 4A.
2. Dividends. Subject to any provision in this Article FOURTH
with respect to any stock of the Corporation to the contrary, out of the assets
of the Corporation which are by law available for the payment of dividends,
dividends and other distributions may be, but shall not be required to be,
declared and paid upon shares of Common Stock, and the holders of shares of
Class A Common Stock and Class B
Bracketted material omitted.
<PAGE>
Common Stock shall be entitled to receive the same dividends and other
distributions, ratably with the holder of one share of Class A Common Stock
entitled to receive ten times what the holder of one share of Class B Common
Stock is entitled to receive; provided, however, that in the case of dividends
or other distributions payable in Common Stock, only shares of Class B Common
Stock shall be distributed with respect to Class B Common Stock and only shares
of Class A Common Stock shall be distributed with respect to Class A Common
Stock, and any such distribution shall be made ratably, with the holder of one
share of Class A Common Stock entitled to receive the same number of shares of
Class A Common Stock as the number of shares of Class B Common Stock the holder
of one share of Class B Common Stock shall be entitled to receive; and provided
further, that the Board of Directors may declare and pay dividends and other
distributions with respect to the Class A Common Stock without declaring or
paying any dividend or other distribution with respect to the Class B Common
Stock.
3. Voting Rights.
(a) Subject to the special voting rights of the
holders of any other stock of the Corporation, the Common Stock (and any other
stock of the Corporation which may be entitled to vote with the holders of
Common Stock), voting as a single class except where the Class A Common Stock
and the Class B Common Stock (and such other stock) are required by law to vote
as separate classes or series on a particular matter, shall possess all of the
voting power of the Corporation with respect to the election of directors and
for all other purposes.
(b) Each share of Common Stock, whether Class A
Common Stock or Class B Common Stock, shall be entitled to one vote on all
matters submitted to a vote of the Corporation's stockholders.
4. Liquidation. Upon the liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, after provision for the
payment of creditors and after provision shall be made for holders of all shares
of stock of the Corporation having a preference upon liquidation, dissolution or
winding up, the remaining assets of the Corporation shall be distributed among
the holders of Common Stock, ratably, with the holder of one share of Class A
Common Stock entitled to receive ten times what the holder of one share of Class
B Common Stock is entitled to receive, and, to the extent provided in this
Article FOURTH, the holders of any other stock of the Corporation which may be
entitled to share in such distribution.
5. Conversion of Class B Common Stock.
(a) Optional Conversion. Each share of Class B Common
Stock may at any time, but only with the prior approval of the Board of
Directors, be converted at the election of the holder thereof into one-tenth of
a fully paid and nonassessable share of Class A Common Stock. Subject to the
terms of any such approval, the holder of shares of Class B Common Stock may
elect to convert any or all of such shares at one time or at various times in
such holder's discretion. Such right shall be exercised by delivering a written
notice of the election by the holder thereof to convert, in form satisfactory to
the agent for the registration of transfer of shares of Class B Common Stock and
to the Corporation, accompanied by any certificates representing the shares of
Class B Common Stock to be converted. [the surrender of the certificate
representing each share of Class B Common Stock to be converted to the agent for
the registration of transfer of shares of Class B Common Stock at its office, or
to the Corporation at its principal executive offices, accompanied by a written
notice of the election by the holder thereof to convert and (if so required by
the transfer agent or by the Corporation) by instruments of transfer, in form
satisfactory to the transfer agent and to the Corporation, duly executed by such
holder or the holder's duly authorized attorney.]
[(b) If a holder of Class B Common Stock ceases to be
either a director or full-time employee of the Corporation or any of its
Subsidiaries (a "Management Investor") or a Permitted Transferee of a person who
is then a Management Investor, then each share of Class B Common Stock held by
such holder shall thereupon be converted into one-tenth of a share of Class A
Common Stock effective ]
Bracketted material omitted.
2
<PAGE>
[immediately. No share of Class B Common Stock may be issued other than to a
Management Investor or a person who would be a Permitted Transferee of a
Management Investor, and any such share issued to any other person shall ipso
facto be converted into one-tenth of a share of Class A Common Stock effective
at the time of the purported issuance.]
(b) Mandatory Conversion. At any time when the Board
of Directors authorizes and directs the conversion of all the Class B Common
Stock into Class A Common Stock, then, at the time designated by the Board for
the occurrence of such event, each outstanding share of Class B Common Stock
shall be converted into one-tenth of a share of Class A Common Stock and no
further shares of Class B Common Stock may be issued thereafter.
(c) Manner of Conversion. In the event of any such
conversion pursuant to paragraph (a) or (b), any [the] certificate or
certificates representing shares of Class B Common Stock [held by such holders]
so converted shall thereupon and thereafter be deemed to represent the number of
shares of Class A Common Stock issuable upon such conversion; [whole shares of
Class A Common Stock issuable upon such conversion and the right to receive cash
in lieu of fractional shares pursuant to paragraph (f) hereof. Upon the
surrender of any such certificate to the agent for the registration of transfer
of shares of Class B Common Stock at its office, or to the Corporation at its
principal executive offices, such certificate shall be cancelled and a
certificate for the number of whole shares of Class A Common Stock to which he
shall be entitled, together with a cash adjustment for any fraction of a share
if not evenly convertible pursuant to paragraph (f) hereof, shall be issued and
delivered to the holder thereof as hereinafter provided.]
[(e) The issuance of a certificate for shares of
Class A Common Stock upon conversion of shares of Class B Common Stock shall be
made without charge for any stamp or other similar tax in respect of such
issuance. However, if any such certificate is to be issued in a name other than
that of the holder of the share or shares of Class B Common Stock converted, the
person or persons requesting issuance thereof shall pay to the transfer agent or
to the Corporation the amount of any tax which may be payable in respect of any
such transfer, or shall establish to the satisfaction of the transfer agent or
of the Corporation that such tax has been paid. As promptly as practicable after
the surrender for conversion of a certificate representing shares of Class B
Common Stock and the payment of any tax as herein before provided, the
Corporation will deliver or cause to be delivered at the office of the transfer
agent to, or upon the written order of, the holder of such certificate, a
certificate or certificates representing the number of whole shares of Class A
Common Stock issuable upon such conversion, issued in such name or names as such
holder may direct together with a cash adjustment for any fraction of a share as
provided pursuant to paragraph (f) hereof, if not evenly convertible. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of the surrender of the certificate representing shares of
Class B Common Stock (if on such date the transfer books of the Corporation
shall be closed, then immediately prior to the close of business on the first
date thereafter that said books shall be open) or, in the case of a conversion
under paragraph (b) or (c) of this Section, immediately upon the event giving
rise to the conversion, andthe person or persons in whose name or names the
certificate representing shares of Class A Common Stock are to be issued] all
rights of such holder arising from ownership of shares of Class B Common Stock
shall cease at such time, and such holder shall be treated for all purposes as
having become the record holder of such shares of Class A Common Stock at such
time and shall have and may exercise all the rights and powers appertaining
thereto. No adjustments in respect of any past dividends and other distributions
shall be made upon the conversion of any share of Class B Common Stock.
[provided, however, that if any share of Class B Common Stock shall be converted
subsequent to the record date for the payment of a dividend or other
distribution on shares of Class B Common Stock but prior to such payment, the
registered holder of such shares at the close of business on such record date
shall be entitled to receive the dividend or other distribution payable to
holders of Class B Common Stock.] The Corporation shall at all times reserve and
keep available, solely for the purpose of issue upon conversion of outstanding
shares of Class B Common Stock, such number of shares of Class A Common Stock as
may be issuable upon the conversion of all such outstanding shares of Class B
Common Stock. [provided that the Corporation may deliver shares of Class A
Common Stock held in the treasury of the Corporation.]
Bracketted material omitted.
3
<PAGE>
[(f) No fractions of shares of Class A Common Stock
are to be issued upon conversion, but in lieu thereof the Corporation will pay
therefor in cash, a sum equal to the number of shares of Class B Common Stock
not evenly convertible multiplied by the per share fair market value of the
Class B Common Stock, as determined by an Appraiser according to the most recent
existing appraisal; provided, however, that such appraisal shall be as of a date
not more than six months prior to its use hereunder. Stock.]
4B. Series D Stock
1. Designation. There shall be a series of Series
Preferred Stock which shall consist of 20,000 shares and shall be designated as
Adjustable Rate Callable Nontransferable Series D Preferred Stock (the "Series D
Stock"). The number of authorized shares of Series D Stock may be increased by
resolution of the Board of Directors.
2. Rank.
(a) Rank of Series D Stock. To the extent and in the
manner provided in this Part 4B, the Series D Stock shall, with respect to
dividend rights and rights on liquidation, rank (i) junior to or on parity with,
as the case may be, any other stock of the Corporation, the terms of which shall
specifically provide that such stock shall rank senior to, or on parity with, as
the case may be, the Series D Stock with respect to dividend rights or rights on
liquidation or both, and (iii) senior to any other stock of the Corporation.
(b) Certain Definitions. The following terms as used
in this Part 4B shall be deemed to have the meanings set forth in this section.
(1) The term "Participating Stock" shall mean the
Common Stock and any other stock of the Corporation of any class which has the
right to participate in [dividends and distributed] the distribution of either
earnings or assets of the Corporation without limit as to the amount or
percentage.
(2) The term "Parity Stock" with respect to
Series D Stock shall mean the Series D Stock and all other stock of the
Corporation ranking equally therewith as to the payment of dividends or the
distribution of assets upon liquidation. The term "Dividend Parity Stock" with
respect to Series D Stock shall mean the Series D Stock and all other stock of
the Corporation ranking equally therewith as to the payment of dividends. The
term "Liquidation Parity Stock" with respect to Series D Stock shall mean the
Series D Stock and all other stock of the Corporation ranking equally therewith
as to distribution of assets upon liquidation.
(3) The term "Junior Stock" with respect to
Series D Stock shall mean the Participating Stock and all other stock of the
Corporation ranking junior thereto as to the payment of dividends and the
distribution of assets upon liquidation. The term "Dividend Junior Stock" with
respect to Series D Stock shall mean the Participating Stock and all other stock
of the Corporation ranking junior thereto as to the payment of dividends. The
term "Liquidation Junior Stock" with respect to Series D Stock shall mean the
Participating Stock and all other stock of the Corporation ranking junior
thereto as to distribution of assets upon liquidation.
(4) The term "Senior Stock" with respect to
Series D Stock shall mean all stock of the Corporation ranking senior thereto as
to the payment of dividends or distribution of assets upon liquidation.
3. Dividends.
(a) Cumulative Dividends. The holders of record of
Series D Stock shall be entitled to receive, as and if declared by the Board of
Directors, cumulative cash dividends thereon at the per
Bracketted material omitted.
4
<PAGE>
annum rate per share equal to the Established Dividend Rate (as defined in
paragraph (c)), and no more, but only out of funds legally available for the
payment of such distributions under the General Corporation Law of the State of
Delaware. Dividends on the Series D Stock shall not be payable unless and until
declared by the Board of Directors. Dividends shall accrue from the date of
original issuance. Accumulations of dividends shall not bear interest.
(b) Limitations Upon Dividend Arrearage. Unless
dividends that have been declared and are payable upon the Series D Stock have
been paid, no dividend or other distribution (except in Junior Stock) shall be
declared or paid on Dividend Junior Stock and no amount shall be set aside for
or applied to the redemption, purchase or other acquisition of (i) any Dividend
Junior Stock or Liquidation Junior Stock other than by exchange therefor of
Junior Stock or out of the proceeds of a substantially concurrent sale of shares
of Junior Stock or (ii) any Parity Stock except in accordance with a purchase or
exchange offer made simultaneously by the Corporation to all holders of record
of Parity Stock which, considering the annual dividend rates and the other
relative rights and preferences of such shares, in the opinion of the Board of
Directors (whose determination shall be conclusive), will result in fair and
equitable treatment among all such shares.
(c) The "Established Dividend Rate" shall initially
be $25.00, and shall be reset as provided in this paragraph. On each December
16, beginning December 16, 1998 and continuing so long as any shares of Series D
Stock shall be outstanding, the Established Dividend Rate shall be reset at a
rate equal to $1,000 multiplied by 50% of the One Year Treasury Rate that shall
have been in effect at the close of business on the December 1 next preceding
(or if such December 1 shall not have been a business day, the business day next
preceding such December 1), rounded up to the nearest $1.00; provided, however,
that the Established Dividend Rate shall in no event be greater than $50.00. For
purposes of the preceding sentence, the "One Year Treasury Rate" shall mean the
rate for direct obligations of the United States having a constant maturity of
1-year, as published in H.15(519) under the heading "Treasury Constant
Maturities", or, if not so published by such December 16, such rate as
determined in good faith by the Corporation, which determination absent manifest
error shall be conclusive. The Corporation shall file with the duly appointed
transfer agent for the Series D Stock a certificate stating the new Established
Dividend Rate determined as provided in this paragraph and showing the
computation thereof, and will cause a notice stating the new Established
Dividend Rate and the computation thereof to be mailed to the holders of shares
of Series D Stock.
4. Liquidation Rights.
(a) Liquidation Value. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, the
holders of Series D Stock shall be entitled to receive from the assets of the
Corporation, payment in cash, of $1,000 per share, plus a further amount equal
to unpaid cumulative dividends on Series D Stock accrued to the date when such
payments shall be made available to the holders thereof, and no more, before any
amount shall be paid or set aside for, or any distribution of assets shall be
made to the holders of Liquidation Junior Stock. If, upon such liquidation,
dissolution or winding up, the amounts available for distribution to the holders
of all Liquidation Parity Stock shall be insufficient to permit the payment in
full to such holders of the preferential amounts to which they are entitled,
then such amounts shall be paid ratably among the shares of Liquidation Parity
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto if paid in full.
(b) Actions Not Considered Liquidation. None of the
following shall be considered a liquidation, dissolution or winding up of the
Corporation within the meaning of this section: (1) a consolidation or merger of
the Corporation with or into any other corporation; (2) a merger of any other
corporation into the Corporation; (3) a reorganization of the Corporation; (4)
the purchase or redemption of all or part of the outstanding shares of any class
or classes of the Corporation; (5) a sale or transfer of all or any part of the
assets of the Corporation; or (6) a share exchange to which the Corporation is a
party.
5
<PAGE>
5. Redemption.
(a) Optional Redemption. The Series D Stock may be
called for redemption and redeemed [out of funds legally available therefor] at
the option of the Corporation by resolution of the Board of Directors, in whole
at any time or in part at any time or from time to time upon the notice
hereinafter provided for in paragraph (c), by the payment therefor of the
redemption price per share of $1,000 plus an amount equal to the accrued and
unpaid cumulative dividends thereon to the date fixed by the Board of Directors
as the redemption date. In addition, the Corporation may so call for redemption
at any time all, but not less than all, of the shares of Series D Stock held by
any person.
(b) No Mandatory Redemption. There is no mandatory
sinking fund for, or other required redemption of, the Series D Stock.
(c) Manner of Redemption.
(1) If less than all of the outstanding shares of
Series D Stock shall be called for redemption (and such redemption is not
pursuant to the second sentence of paragraph (a)), the particular shares to be
redeemed shall be selected by lot or by such other equitable manner as may be
prescribed by resolution of the Board of Directors.
(2) Notice of redemption of any shares of Series
D Stock shall be given by the Corporation by first-class mail, not less than 10
nor more than 60 days prior to the date fixed by the Board of Directors of the
Corporation for redemption (the "redemption date"), to the holders of record of
the shares to be redeemed at their respective addresses then appearing on the
records of the Corporation. The notice of the redemption shall state: (1) the
redemption date; (2) the redemption price; (3) if less than all outstanding
shares of Series D Stock of the holder are to be redeemed, the identification of
the shares of Series D Stock to be redeemed; (4) that dividends on the shares to
be redeemed shall cease to accrue on the redemption date; and (5) the place or
places where such shares of Series D Stock to be redeemed are to be surrendered
for payment of the redemption price.
(3) Notice having been mailed as aforesaid, from
and after the redemption date (unless default shall be made by the Corporation
in providing money for the payment of the redemption price of the shares called
for redemption), dividends on the shares of Series D Stock so called for
redemption shall cease to accrue, and from and after the redemption date or such
earlier date as funds shall be set aside for payment of the redemption price
(unless default shall be made by the Corporation in providing money for the
payment of the redemption price of the shares called for redemption) said shares
shall no longer be deemed to be outstanding, and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon surrender in accordance with
said notice of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid.
(4) Shares of Series D Stock redeemed by the
Corporation shall be restored to the status of authorized and unissued shares of
Series Preferred Stock, undesignated as to series, and, except as otherwise
provided by the express terms of any outstanding series, may be reissued by the
Corporation as shares of one or more series of Series Preferred Stock.
6. Voting Rights.
(a) No Voting Rights Generally. Except as expressly
provided to the contrary in this Part 4B or as otherwise required by law, the
holders of Series D Stock shall have no right to vote at, or to participate in,
any meeting of stockholders of the Corporation, or to receive any notice of such
meeting.
Bracketted material omitted.
6
<PAGE>
(b) Rights Upon Dividend Arrearage.
(1) In the event dividends that have been
declared and are payable upon the Series D Stock shall be in arrears, the number
of directors constituting the full board shall be increased by two, and the
holders of the Series D Stock voting noncumulatively and separately as a single
series together with the holders of any other shares of Series Preferred Stock
having the right to elect directors as a series under circumstances when
dividends are in arrears, shall be entitled to elect two members of the Board of
Directors of the Corporation at the next annual meeting of stockholders of the
Corporation or at a special meeting called as hereinafter provided in this
section. Such voting rights of the holders of Series D Stock shall continue
until all declared and unpaid dividends thereon shall have been paid in full,
whereupon such special voting rights of the holders of Series D Stock shall
cease (and the respective terms of the two additional directors shall thereupon
expire and the number of directors constituting the full board shall be
decreased by two) subject to being again revived from time to time upon the
recurrence of the conditions described in this section as giving rise thereto.
(2) At any time when such right of holders of
Series D Stock to elect two additional directors shall have so vested, the
Corporation may, and upon the written request of the holders of record of not
less than 10% of the Series D Stock then outstanding (or 10% of all Series
Preferred Stock having the right to vote for such directors in case holders of
shares of other series of Series Preferred Stock shall also have the right to
elect directors as a class in circumstances when dividends are in arrears)
shall, call a special meeting of holders of such Series D Stock (and other
series of Series Preferred Stock, if applicable) for the election of directors.
In the case of such a written request, such special meeting shall be held within
60 days after the delivery of such request, and, in either case, at the place
and upon the notice provided by law and in the bylaws of the Corporation; except
that the Corporation shall not be required to call such a special meeting if
such request is received less than 120 days before the date fixed for the next
ensuing annual meeting of stockholders of the Corporation; provided, that the
holders of Series D Stock receive notice of such meeting and their right to vote
thereat.
(3) Whenever the number of directors of the
Corporation shall have been increased by two as provided in this section, the
number as so increased may thereafter be further increased or decreased in such
manner as may be permitted by the bylaws of the Corporation and without the vote
of the holders of Series D Stock. No such action shall impair the right of the
holders of Series D Stock to elect and to be represented by two directors as
provided in this section.
(4) The two directors elected as provided in this
section shall serve until the next annual meeting of stockholders of the
Corporation and until their respective successors shall be elected and qualified
or the earlier expiration of their terms as provided in this section. No such
director may be removed without the vote or consent of holders of a majority of
the shares of Series D Stock (or holders of a majority of shares of Series
Preferred Stock having the right to vote in the election of such director in
case holders of shares of other series of Series Preferred Stock shall also have
the right to elect such director as a class). If, prior to the expiration of the
term of any such director, a vacancy in the office of such director shall occur,
such vacancy shall, until the expiration of such term, in each case be filled by
appointment made by the remaining director elected as provided in this section.
7. Restrictions on Transfer. The shares of Series D Stock
shall not be transferable (other than by will or the laws of descent), except
that such shares may be transferred with the consent of the Board of Directors
of the Corporation.
8. No Conversion Rights. The holders of shares of Series D
Stock shall not have the right to convert such shares into other securities of
the Corporation.
FIFTH: Subject to the rights of holders of Series Preferred Stock to
elect additional directors under certain circumstances, the Corporation shall be
governed in accordance with the following provisions:
7
<PAGE>
5A. Number of Directors The Board of Directors of the Corporation shall
consist of not less than nine and not more than 19 members and the Chief
Executive Officer of the Corporation shall always be one of the members. The
exact number of directors within such minimum and maximum shall be fixed by the
Board of Directors.
5B. Election Directors need not be elected by written ballot.
[SIXTH: The following terms shall have the accompanying defined
meanings:
1. "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 the Corporation and
which has been selected by the Board of Directors to act as an independent
appraiser.
2. "Permitted Transferee" shall have the meaning as defined in
the Stockholders' Agreement.
3. "Stockholders' Agreement" shall mean the Amended and
Restated Stockholders' Agreement dated as of December 14, 1994, by and among the
Corporation and the persons named therein as the same may be amended and a copy
of which is on file with the Secretary of the Corporation.
4. "Subsidiary" shall mean any corporation or other entity of
which the Corporation shall, directly or indirectly, own 50% or more of the
equity, as determined by the Board of Directors and any other corporation or
other entity in which the Corporation shall directly or indirectly have an
equity investment and which the Board of Directors shall in its sole discretion
designate.]
SIXTH [SEVENTH]: The By-Laws of the Corporation may be made, altered,
amended, changed, added to or repealed by the Board of Directors of the
Corporation without the assent or vote of the stockholders.
SEVENTH [EIGHTH]: Each person who was or is made a party or is
threatened to be made a party to or is involuntarily involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or a person of whom he is the
legal representative is or was a director or officer of the Corporation or is or
was serving at the request of the Corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer or representative or in any other capacity while
serving as a director, officer or representative shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended, against
all expenses, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by him in connection therewith; provided,
however, that the Corporation shall indemnify any such person seeking indemnity
in connection with an action, suit or proceeding (or part thereof) initiated by
such person only if action, suit or proceeding (or part thereof) was authorized
by the Board of Directors. Such right shall be a contract right and shall
include the right to be paid by the Corporation expenses incurred in defending
any such proceeding in advance of its final disposition upon delivery to the
Corporation of an undertaking, by or on behalf of such person, to repay all
amounts so advanced if it should be determined ultimately that such person is
not entitled to be indemnified under this section or otherwise.
If a claim under this Article is not paid in full by the Corporation
within ninety days after a written claim has been received by the Corporation,
the claimant unpaid may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and if successful in whole
or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking
has been tendered to the Corporation) that the
Bracketted material omitted.
8
<PAGE>
claimant has not met the standards of conduct which make it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claim, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant had not met the applicable standard of conduct.
The rights conferred by this Article shall not be exclusive of any
other right which such person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, By-Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
The Corporation may maintain insurance, at its expense, to protect
itself and any such director, officer or representative against any such
expense, liability or loss, whether or not the Corporation would have the power
to indemnify him against such expense, liability or loss under the Delaware
General Corporation Law.
EIGHTH [NINTH]: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Restated Certificate of
Incorporation in the manner now or hereafter prescribed by law, and all rights
and powers conferred herein on stockholders, directors and officers are subject
to this reserved power.
NINTH [TENTH]: Whenever a compromise or arrangement is proposed between
the Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed by the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said Court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the Court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all stockholders or class of
stockholders of the Corporation, as the case may be, and also on the
Corporation.
TENTH [ELEVENTH]: To the fullest extent permitted by the Delaware
General Corporation Law as the same exists or may hereafter be amended, a
director of this Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as director.
Bracketted material omitted.
<PAGE>
Annex B
ARAMARK Corporation
Senior Executive Annual Performance Bonus Arrangement
General. This Arrangement is intended to provide for an annual performance bonus
for the CEO and other designated Senior Executives upon the attainment of annual
performance goals established by the Committee, which annual performance bonus
will be excluded from the computation of compensation for purposes of federal
income tax deductibility limitation on executive officer compensation. This
Arrangement shall supersede the Management Incentive Bonus Plan, unless
otherwise indicated herein.
Definitions.
ARAMARK means ARAMARK Corporation, a Delaware corporation, and any
successor.
CEO means the Chief Executive Officer of ARAMARK or the individual or
individuals acting in that capacity.
Committee means the committee of those members of either the Human
Resources, Compensation and Public Affairs Committee or such other compensation
committee of the ARAMARK board of directors consisting of two or more directors
as may be delegated authority to administer this Arrangement, who are outside
directors within the meaning of Section 162(m).
Participant means the CEO and the other Senior Executives designated to
participate in this Arrangement.
Section 162(m) means section 162(m) under the Internal Revenue Code of
1986, as amended, or any successor provision and the regulations promulgated
thereunder.
Senior Executive means the CEO and any other executive officer of
ARAMARK or of any subsidiary of ARAMARK.
Participation. The CEO and the other Senior Executives shall be eligible to be
designated as Participants in this Arrangement. This Arrangement shall apply
only to the CEO and to those additional Senior Executives designated as
Participants by the Committee.
Performance Measures. The annual performance goals shall be based on attainment
of target levels of, or a targeted percentage increase in, one or more of the
following Company or business group criteria: (1) Earnings Before Interest and
Taxes ("EBIT"), (2) Return on Net Assets ("RONA"), (3) Net Income, (4) After Tax
Return on Investment ("ATROI"), (5) Sales, (6) Revenues, (7) Earnings Per Share,
(8) Total Shareholder Return, (9) Return on Equity ("ROE"), (10) Return on
Investment ("ROI"), (11) Total Business Return, (12) Return on Gross Investment
("ROGI"), (13) Operating Cash Flow or (14) Free Cash Flow.
Individual Maximum Amounts. The maximum annual performance bonus payable to any
Participant in respect of any fiscal year under this Arrangement is $3,000,000,
or such lesser amount as may be set by the Committee at the time it establishes
the annual performance goals.
Administration
Committee. The Committee shall have the sole and exclusive authority to
administer this Arrangement, including the interpretation of the terms hereof.
The Committee shall be entitled to rely on information, opinions, reports and
statements presented to the Committee by officers, employees and outside
professionals and experts, including ARAMARK's financial statements.
<PAGE>
Setting of Annual Goals. The Committee shall, for each fiscal year,
designate in writing the Participants, establish in writing the individual
maximum amount for each Participant, and establish in writing the performance
goal or goals for each Participant based on the performance measures listed
above, not later than 90 days after the beginning of such fiscal year so long
as, at that time, the attainment of such performance goal or goals is
substantially uncertain (within the meaning of Section 162(m)). The Committee
may establish different performance measures and different individual maximum
amounts for each Participant.
Adjustment for Extraordinary Items. The Committee shall increase the
attainment of performance goals to offset (i) a change in accounting standards,
(ii) a significant acquisition or divestiture, (iii) a significant capital
transaction, or (iv) any other unusual, nonrecurring items which are separately
identified and quantified in ARAMARK's audited financial statements, so long as
such accounting change is required or such transaction or nonrecurring item
occurs after the goals for the fiscal year are established.
Negative Discretion. At the time the extent of attainment of the annual
performance goals is determined by the Committee, the Committee at its sole
discretion may reduce, but may not increase, the amount of the annual
performance bonus that would be otherwise payable to a Participant under this
Arrangement. The Committee may take into consideration any and all factors
relating to ARAMARK's and the Participant's performance for such fiscal year.
Payment Only Upon Attainment. An annual performance bonus shall be paid
to a Participant under this Arrangement only in accordance with the terms of
this Arrangement and only upon the attainment of the annual performance goals
established, adjusted and applied by the Committee for such Participant. Except
as explicitly provided herein, no waiver or modification of the goals may be
made. The Committee shall be the sole and exclusive arbiter of the extent, if
any, to which the annual performance goals have been attained, and the amount of
the annual performance bonus payable hereunder.
Certification of Attainment. Prior to the payment of any annual
performance bonus to any Participant under this Arrangement, the Committee shall
certify in writing the extent to which the annual performance goals for such
Participant have been attained.
Additional Terms. Unless otherwise specifically provided by this Arrangement or
by the Committee or unless not permitted by Section 162(m), the administrative
terms of the ARAMARK management incentive bonus plan shall apply, including by
way of example terms relating to such matters as the ability to defer receipt of
payment of an annual performance bonus.
Stockholder Approval. This Arrangement shall be effective, beginning for fiscal
year 1999, upon its approval by the stockholders of ARAMARK.
Amendment. The Committee may, without further action by the stockholders, amend
the Arrangement from time to time as it deems desirable; provided, that no such
amendment may increase the employees who may receive compensation under the
Arrangement, change the permitted performance measures, increase the maximum
bonus payable under the Arrangement or make any other change requiring further
stockholder approval under Section 162(m).
Duration and Termination. This Arrangement, unless earlier terminated, shall be
effective for each of the five fiscal years 1999 through 2003. The board of
directors may, in its discretion, terminate this Arrangement at any time.
2
SENIOR EXECUTIVE ANNUAL PERFORMANCE BONUS ARRANGEMENT
<PAGE>
LOGO ARAMARK
ARAMARK CORPORATION
PROXY CARD
SOLICITED BY THE BOARD OF DIRECTORS
Joseph Neubauer, Martin W. Spector and Donald S. Morton (each with power of
substitution) are hereby authorized to vote all the shares which the undersigned
would be entitled to vote if personally present at the annual meeting of
stockholders of ARAMARK Corporation (the "Company") to be held on February 9,
1999 and at any adjournment.
IF YOU SPECIFY A CHOICE AS TO THE ACTION TO BE TAKEN ON AN ITEM, THIS PROXY WILL
BE VOTED IN ACCORDANCE WITH SUCH CHOICE. IF YOU DO NOT SPECIFY A CHOICE, IT WILL
BE VOTED FOR ITEMS 1, 2 AND 3 AND AT THE DISCRETION OF THE PROXY HOLDER AS TO
ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
see other side
* FOLD AND DETACH HERE *
YOUR VOTE IS IMPORTANT!
You can vote in one of three ways:
1. Call toll free 1-888-297-9580 in the United States on a Touch Tone
telephone and follow the instructions on the reverse side. There is NO
CHARGE to you for this call. Outside the United States you may fax your
signed proxy card to 201-433-3971
or
2. Vote by Internet at our Internet Address: http://www.proxyvoting.com/aramark
or
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
Please mark
your votes as
indicated in
this example /X/
1. Election of Directors
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
/ / / /
Nominees: 01 Patricia C. Barron, 02 Robert J. Callander, 03 Ronald R. Davenport,
04 Lee F. Driscoll, Jr., 05 Mitchell S. Fromstein, 06 Edward G. Jordan,
07 Thomas H. Kean, 08 James E. Ksansnak, 09 Joseph Neubauer, 10 James E. Preston
(To withhold authority to vote FOR, write name(s) on line:
)
- ----------------------------------------------------------
2. To consider and act upon a proposal to amend and restate the Certificate of
Incorporation to eliminate the automatic conversion of shares of Class B
Common Stock into shares of Class A Common Stock upon termination of
employment.
FOR AGAINST ABSTAIN
/ / / / / /
3. To consider and act upon a proposal to approve the Senior Executive Annual
Performance Bonus Agreement.
FOR AGAINST ABSTAIN
/ / / / / /
4. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting and at any adjournments
thereof.
Dated
-----------------------------
----------------------------------
(Signature)
----------------------------------
(Signature if held jointly)
Please sign exactly as name appears.
If shares are held as joint tenants,
both joint tenants should sign.
Attorneys-in-fact, executors,
administrators, trustees, guardians,
corporation officers or others
signing in a representative capacity
should indicate the capacity in which
they are signing.
* FOLD AND DETACH HERE *
<PAGE>
VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE
Your telephone or internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
VOTE BY PHONE: You will be asked to enter a Control Number located in the box
in the lower right of this form.
OPTION A: To vote as the Board of Directors recommends on All proposals:
Press 1
OPTION B: If you choose to vote on each item separately, press 0. You will
hear these instructions:
Item 1 - To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9 To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0
and listen to the instructions
Item 2 - To vote FOR, press 1; AGAINST, press 9; ABSTAIN,
press 0. The instructions are the same for all remaining items to
be voted.
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://www.proxyvoting.com/aramark
IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD
THANK YOU FOR VOTING.
IN THE UNITED STATES
Call * * Toll Free * * On a Touch Tone Telephone
1-888-297-9580 - ANYTIME
There is NO CHARGE to you for this call.
OUTSIDE THE UNITED STATES
FAX TO : 201-433-3971
--------------------------------------
--------------------------------------
CONTROL NUMBER
for Telephone/Internet Voting
