[LOGO]
ARAMARK
PROSPECTUS ISPO 1999
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| For employees of |
| ARAMARK CORPORATION |
| and its subsidiaries who hold |
| INSTALLMENT STOCK PURCHASE OPPORTUNITIES |
| granted under the |
| ARAMARK OWNERSHIP PROGRAM |
-------------------------------------------------------
We are offering you an opportunity to participate in the
ownership of ARAMARK through the purchase of ARAMARK stock.
You can purchase shares of stock of ARAMARK by exercising
purchase opportunities we grant you. The purchase price for
these shares will equal the appraisal price for the stock at the
time you receive the grant.
You may pay for your shares by using one or more of five
payment methods. We describe the eligibility requirements and
the conditions for using each of these payment methods in this
prospectus.
Your ability to transfer stock that you purchase will be
limited because ARAMARK's stock is not traded publicly and
because you will be bound by the terms of a stockholders'
agreement.
This prospectus provides you with detailed information about
stock purchase opportunities. In addition, you may obtain
information about ARAMARK from documents that we file with the
U.S. Securities and Exchange Commission. We encourage you to
read this entire prospectus carefully.
----------------
SEE PAGE B-1 FOR FORMS AND INSTRUCTIONS.
FORMS ARE ALSO AVAILABLE ON THE ARAMARK WEB SITE
AT HTTP://WWW.ARAMARK.COM/STOCK
----------------
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY
OTHER SECURITIES COMMISSION OR SIMILAR AUTHORITY OF ANY STATE OR
COUNTRY HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this prospectus is December 1, 1999.
You should not assume that the information contained in this
prospectus is accurate as of any other date, and neither the
delivery of this prospectus nor any sale made through its use
shall create any implication to the contrary. This prospectus
does not constitute an offer or solicitation in any jurisdiction
in which such offer or solicitation is not authorized, or in any
jurisdiction in which ARAMARK is not qualified to make such an
offer or solicitation, or to anyone to whom it is unlawful to
make such offer or solicitation
<PAGE>
TABLE OF CONTENTS
Where You Can Find More Information .................... 2
Prospectus Summary ..................................... 3
Frequently Asked Questions ............................. 4
The ARAMARK Ownership Program .......................... 26
Description of Equity Securities ....................... 27
Experts ................................................ 28
Documents Incorporated by Reference .................... 28
Annex A - Stockholders' Agreement ...................... A-1
Annex B - Exercise Forms and Instructions .............. B-1
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy
statements, and other information with the U.S. Securities and
Exchange Commission. You may read and copy any reports,
statements, or other information that we file at the SEC's public
reference rooms in Washington, DC, New York, New York and
Chicago, Illinois. Please call the SEC at 800-SEC-0330 for
further information about the public reference rooms. Our SEC
filings are also available to the public from commercial document
retrieval services and at the web site maintained by the SEC at
http://www.sec.gov.
We have filed registration statements to register with the
SEC the common stock to be issued when you exercise a purchase
opportunity granted under the ARAMARK Ownership Program. As
allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statements or in
exhibits or amendments to the registration statements.
Upon your request, we will provide to you without charge a
copy of any or all of the documents to which we have referred,
other than exhibits to those documents. You should direct
written requests to ARAMARK Shareholder Services Group at First
Union National Bank, 123 South Broad Street, MCPA 1328,
Philadelphia, PA USA 19109 or telephone requests to 888-96-OWNER
(888-966-9637).
If you have not received a copy of our most recent annual
report on Form 10-K, or if you have any questions about the
ARAMARK Ownership Program or would like to obtain further
information, you should write the ARAMARK Shareholder Services
Group at First Union National Bank, 123 South Broad Street, MCPA
1328, Philadelphia, PA USA 19109 or call 888-96-OWNER
(888-966-9637).
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| |
| EMPLOYEES BASED IN QUEBEC |
| ---------------------------------------------------------------------- |
| En signant le formulaire d'exercice d'option, je confirme mon |
| souhait expres que tous les documents, certificts, avid et |
| conventions directement ou indirectement, relies a l'acquisition |
| de valeurs mobilieres d'ARAMARK (incluant le formulaire |
| d'exercice d'option) et tous les documents qui y sont integres |
| par renvoi (incluant la convention entre actionnaires) soient |
| rediges en langue anglaise. |
- ----------------------------------------------------------------------------
ARAMARK Corporation is a Delaware corporation with its
principal offices located at ARAMARK Tower, 1101 Market Street,
Philadelphia, PA 19107 (215-238-3000). When we use the word
"ARAMARK," we are referring to ARAMARK Corporation, to the
subsidiary for which you work, or to ARAMARK Corporation and its
subsidiaries collectively, as the context requires.
2
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information and may not
contain all of the information that is important to you. Before
you make a decision to invest in ARAMARK, you should read
carefully this entire prospectus, ARAMARK's most recent annual
report on Form 10-K, and the documents to which we have referred.
See "Where You Can Find More Information."
THE COMPANY
ARAMARK is a world leader in managed services, including food
and support services, uniform and career apparel, and educational
resources.
THE ARAMARK OWNERSHIP PROGRAM
The ARAMARK Ownership Program provides you with an
opportunity to purchase shares of ARAMARK.
Under the program you received an Installment Stock Purchase
Opportunity (ISPO) that entitles you to purchase a specific
number of shares in annual installments at a fixed price per
share.
Your grant certificate sets forth the installment periods
when you may purchase shares and the number of shares you may
purchase during each period. The purchase price per share is the
appraisal price at the time your purchase opportunity is granted.
During each installment, you may purchase up to the number of
shares specified for that installment. However, there is a
minimum purchase of 100 shares per installment. Any portion of
an annual installment you do not exercise during its exercise
period is canceled. You must purchase 100 shares in the first
installment, or your entire purchase opportunity for all
installments is canceled.
STOCKHOLDERS' AGREEMENT
All management stockholders are parties to a stockholders'
agreement. By purchasing shares under the program, you will be
agreeing to be bound by the terms of the stockholders' agreement.
The terms of the stockholders' agreement limit your ability
to transfer your shares. In addition, upon yourtermination of
employment, ARAMARK generally would, but is not required to,
repurchase your shares.
We have included a copy of the stockholders' agreement as
Annex A to this prospectus.
HOW TO PURCHASE SHARES
To purchase shares under the program you must
o complete the appropriate exercise forms (see page B-1) and
o pay the purchase price for the shares plus the amount of taxes
required to be withheld (as computed on the exercise form).
You may complete the forms using the ARAMARK exercise form
wizard on the ARAMARK web site at http://www.aramark.com/stock.
The form wizard does NOT transmit your completed forms to
ARAMARK. You will still need to print out and sign the forms,
and send the signed forms and the purchase price to ARAMARK.
PAYMENT FOR THE SHARES
You may pay for your shares, including any applicable
withholding taxes, by one or more of the following methods:
o using the ARAMARK deferred payment program.
o borrowing from a bank or other lender.
o selling ARAMARK shares that you already own.
o using ARAMARK shares that you already own in a stock-for-stock
exchange.
o using personal savings or other personal funds.
We describe the eligibility requirements and the conditions
for using each of these payment methods in this prospectus.
3
<PAGE>
FREQUENTLY ASKED QUESTIONS (FAQ)
To assist you in better understanding purchase opportunities
and the ARAMARK Ownership Program, we have answered certain
frequently asked questions. For more complete answers to your
questions, you should read the text of the stockholders'
agreement, to which we refer, attached as Annex A to this
prospectus. For your convenience, we have grouped the questions
and answers by topic.
TOPIC Q/A NOS.
- ----- --------
GENERAL ..................................................... 1 - 4
STOCK PURCHASE OPPORTUNITIES
General ................................................. 5 - 12
Installment Stock Purchase Opportunities (ISPOs) ........ 13 - 19
HOW TO PURCHASE AND PAY TAXES DUE
General ................................................. 20 - 27
Deferred Payment Program ................................ 28 - 41
Borrowing ............................................... 42
Sale of Currently-Owned Shares .......................... 43 - 44
Stock-for-Stock Exchanges ............................... 45 - 51
STOCK OWNERSHIP
General ................................................. 52 - 55
Transferring Shares ..................................... 56 - 59
Pledging Shares ......................................... 60 - 62
Appraisal Price ......................................... 63 - 68
SALES WHILE EMPLOYED
General ................................................. 69 - 71
Internal Market ......................................... 72
Emergency Buy-Back Program .............................. 73
Offer-to-Sell ........................................... 74 - 75
SALES UPON TERMINATION OF EMPLOYMENT
General ................................................. 76 - 82
Stock Repurchase Policy ................................. 83 - 85
Installment Notes ....................................... 86 - 88
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| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE UNITED STATES |
| --------------------------------------------------------------------- |
| THE LAWS OF YOUR COUNTRY MAY DIFFER FROM U.S. LAWS IN WAYS |
| THAT AFFECT THE STOCK PURCHASE OPPORTUNITIES AND THE ARAMARK |
| OWNERSHIP PROGRAM. ALTHOUGH THE ANSWERS TO MOST OF THE FOLLOWING |
| QUESTIONS GENERALLY APPLY TO EMPLOYEES BASED IN COUNTRIES OTHER |
| THAN THE U.S., AS WELL AS U.S. BASED EMPLOYEES, WE CHANGED THE |
| ANSWERS TO QUESTIONS AND ADDED QUESTIONS AND ANSWERS TO REFLECT |
| THE APPLICATION OF YOUR COUNTRY'S TAX AND SECURITIES LAWS. WE |
| IDENTIFY THESE QUESTIONS AND ANSWERS BY SHADING. YOU SHOULD READ |
| THESE IN CONJUNCTION WITH THE UNSHADED, GENERALLY APPLICABLE |
| INFORMATION TO WHICH THEY RELATE. |
| |
| THE APPLICATION OF YOUR COUNTRY'S LAWS TO THE VARIOUS ASPECTS |
| OF THE ARAMARK OWNERSHIP PROGRAM CAN BE COMPLEX AND CAN PRODUCE |
| UNINTENDED RESULTS. WE HAVE HAD THE ARAMARK OWNERSHIP PROGRAM |
| AND THESE QUESTIONS AND ANSWERS REVIEWED BY LEGAL AND TAX |
| ADVISORS FROM THE JURISDICTIONS INDICATED. HOWEVER, WE CANNOT |
| GUARANTY THE ACCURACY OF THE ANSWERS OR THEIR APPLICABILITY TO |
| YOUR PERSONAL SITUATION. YOU ARE URGED TO CONSULT LEGAL AND TAX |
| ADVISORS FAMILIAR WITH YOUR COUNTRY'S LAWS. |
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GENERAL
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1. Q: WHAT IS ARAMARK CORPORATION?
A: ARAMARK Corporation, through its subsidiaries, provides
and manages services, including food and support
services, uniform and career apparel, and educational
resources.
ARAMARK is an employee-owned company: Management employees
own more than 70% of the equity of ARAMARK, and
employee benefit plans own an additional 18% of the
equity.
2. Q: WHAT IS THE ARAMARK OWNERSHIP PROGRAM?
A: The ARAMARK Ownership Program is the name used generally
to describe the various documents, practices, and
policies under which ARAMARK provides selected
management and other key employees opportunities to
participate in the ownership of ARAMARK.
The program consists of
o our restated certificate of incorporation and
stockholders' agreement, which govern the rights of
ARAMARK stockholders generally,
o the Combined Stock Ownership Plan and the other
ownership and option plans, which govern the grants
of purchase opportunities, and
o the various ARAMARK practices and policies, such as
the internal market, the emergency buyback program,
the deferred payment program, and the stock
repurchase policy.
3. Q: WHO ADMINISTERS THE ARAMARK OWNERSHIP PROGRAM?
A: Generally, the Corporate Compensation and Benefits
Department, under the direction of the Human Resources,
Compensation and Public Affairs Committee of the board
of directors , administers the program. (See section
3.03 of the stockholders' agreement) Unless they
conflict with or are prohibited by the specific terms
of the stockholders' agreement, ARAMARK's ownership and
option plans, or specific grant certificates,
o decisions and interpretations of the committee, or of
the department, regarding the program are final and
binding on all participants; and
o the committee may amend, modify, discontinue, or vary
the terms of the program at any time for all
transactions generally or for any specific
transaction.
4. Q: WHAT CHANGES HAVE BEEN MADE TO THE ARAMARK OWNERSHIP
PROGRAM SINCE THE LAST ANNUAL INSTALLMENT PERIOD?
A: We list below the more significant changes.
o Deferred payment program. We increased the amounts
of purchase price you may defer for installments #4
through #6. (see Question 32)
o Stock repurchase policy. We improved the payment
terms under the stock repurchase policy. (see
Question 85)
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| EMPLOYEES BASED IN BELGIUM: |
| |
| o Receipt of new grant a taxable event. We understand |
| that, under recently enacted Belgian income tax laws, |
| the receipt of a new purchase opportunity grant after |
| January 1, 1999, is a taxable event. (See Question 11) |
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STOCK PURCHASE OPPORTUNITIES
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--GENERAL
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5. Q: WHAT IS A STOCK PURCHASE OPPORTUNITY?
A: Stock purchase opportunities allow selected management
employees to participate in the ownership of ARAMARK on
favorable terms. Specifically, your stock purchase
opportunity entitles you to purchase a specific number of
shares of ARAMARK common stock at a fixed price per share.
A stock purchase opportunity is sometimes called a stock
option.
5
<PAGE>
Your grant certificate sets the terms of your purchase
opportunity.
6. Q: HOW DOES ARAMARK AWARD STOCK PURCHASE OPPORTUNITIES?
A: The board of directors (or the committee), upon the advice
and recommendation of senior management, approves the
grant of opportunities to selected management employees.
ARAMARK then makes the grant by delivering to you a grant
certificate that sets the terms of your purchase
opportunity. A grant certificate is sometimes called an
option certificate.
Individual grants are generally made in connection with hires,
promotions, and other forms of recognition of performance.
7. Q: ARE THE SHARES OF COMMON STOCK BEING OFFERED THE SAME AS
THE SHARES OWNED BY CURRENT MANAGEMENT INVESTORS?
A: Yes, they are shares of class B common stock with the same
rights and obligations to which current management
investors are subject under the stockholders' agreement.
8. Q: AM I OBLIGATED TO PURCHASE SHARES?
A: No. Any exercise of all or any portion of your purchase
opportunity by you is strictly voluntary.
9. Q: WHAT IS THE PURCHASE PRICE PER SHARE?
A: We set the price per share at the time we grant the purchase
opportunity. The grant price per share appears on your
grant certificate and represents the appraisal price based
on the most recent available independent appraisal at the
time of grant. The grant price is sometimes called the
exercise price.
If the appraisal price has increased since the grant date, your
purchase opportunity will allow you to purchase shares at
a price below the current appraisal price.
10. Q: IS MY PURCHASE OPPORTUNITY ADJUSTED IN THE EVENT OF A COMMON STOCK
DIVIDEND, SPLIT, REORGANIZATION, MERGER, OR THE LIKE?
A: In such cases your purchase opportunity will be equitably
adjusted, if appropriate, as determined by the committee.
For unexercised purchase opportunities granted prior to September
1, 1998, the grant price per share has been divided by
three, and the number of shares subject to the purchase
opportunity has been multiplied by three, as a result of
the three-for-one stock split declared as of that date.
We annually distribute statements with the terms of each
holder's purchase opportunities, adjusted if appropriate,
for activity since the prior statement.
11. Q: WILL I OWE ANY TAXES WHEN I AM GRANTED A PURCHASE OPPORTUNITY?
A: No. All outstanding purchase opportunities are nonqualified
options for U.S. income tax purposes. Under current U.S.
tax laws, being granted a purchase opportunity is not a
taxable event.
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| EMPLOYEES BASED IN COUNTRIES OTHER THAN BELGIUM: |
| |
| We understand that under current income tax laws, at |
| the time of grant you will not recognize any taxable |
| income. |
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| EMPLOYEES BASED IN BELGIUM: |
| |
| We understand that, under current Belgian income tax |
| laws: |
| |
| o for purchase opportunities granted before January 1, |
| 1999, no income will be recognized by the employee at |
| time of grant; and |
| |
| o for purchase opportunities granted after January 1, |
| 1999, the receipt of a grant is a taxable event and |
| will subject you to tax. You may avoid the tax by |
| refusing to accept the grant within 60 days after it is |
| made. If you do not decline a grant, -tax liability |
| for that grant arises on the earlier of (1) the date |
| you exercise any part of that grant or (2) 60 days |
| after the grant is made. As of that time you will owe |
| tax equal to 15% of the grant price of the purchase |
| opportunities. If any of the purchase opportunities |
| can be exercised more than 5 years and 60 days after |
| the grant date, an additional 1% tax on the grant of |
| those purchase opportunities will be imposed. ARAMARK |
| understands that no tax withholding would be required |
| at the time of grant. You can obtain more information |
| from the local ARAMARK representative shown in the |
| mailing instructions. You should obtain additional |
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<PAGE>
| information and advice from your tax advisor. |
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| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S.: |
| |
| 12. Q: IS THERE ANY U.S. DOLLAR EXCHANGE RISK IN |
| INVESTING IN ARAMARK COMMON STOCK? |
| |
| A: Yes. Because the shares are valued in U.S. |
| dollars, the currency exchange risk is borne by the |
| employee. |
| |
| Generally, this exchange risk represents the |
| change in your country's currency as compared to |
| the U.S. dollar between the dates of purchase of |
| the shares and the sale of the shares. |
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- -- INSTALLMENT STOCK PURCHASE OPPORTUNITIES (ISPOS)
- -------------------------------------------------------------------------
13. Q: WHEN CAN I EXERCISE MY ISPO AND PURCHASE SHARES?
A: You may exercise your ISPO only for the amount authorized on
your grant certificate and only during the periods set
forth on the certificate. There is a minimum and maximum
number of shares you can purchase in each installment.
Generally, we grant an ISPO in six annual installments.
The typical installment exercise period is December 15 -
January 15 of each year. You should refer to your grant
certificate for the installment exercise periods
applicable to your ISPO.
14. Q: CAN I EXERCISE AN INSTALLMENT PRIOR TO ITS CORRESPONDING
INSTALLMENT EXERCISE PERIOD?
A: No. You may purchase shares only during the designated
installment exercise period.
15. Q: HOW MANY SHARES CAN I PURCHASE IN EACH INSTALLMENT?
A: In any installment, you may exercise up to the maximum number
of shares specified for that installment on your grant
certificate, but you cannot purchase less than 100 shares.
For unexercised ISPOs granted prior to September 1, 1998, the
number of shares has been multiplied by three as a result
of the three-for-one stock split declared as of that date.
We annually distribute statements with the terms of each
holder's purchase opportunities, adjusted if appropriate,
for activity since the prior statement.
16. Q: CAN I STILL EXERCISE A SUBSEQUENT INSTALLMENT EVEN IF I
DO NOT EXERCISE THE FIRST INSTALLMENT?
A: No. Unless you exercise the first installment for at least
100 shares prior to the end of the first exercise period,
the entire purchase opportunity for all installments will
be canceled.
17. Q: IF I EXERCISE THE FIRST INSTALLMENT, MUST I EXERCISE
ADDITIONAL INSTALLMENTS?
A: No. Exercise of any installment does not obligate you to
exercise any other installment.
18. Q: IF I DO NOT EXERCISE AN INSTALLMENT FOR THE MAXIMUM,
WHAT HAPPENS TO THE UNEXERCISED PORTION OF THE
INSTALLMENT?
A: Any unexercised portion of any installment will be canceled
upon expiration of the corresponding exercise period.
19. Q: WHAT IF MY EMPLOYMENT IS TERMINATED?
A: Your entire remaining unexercised ISPO is canceled if your
employment with ARAMARK and its subsidiaries, or any
entity designated by the board of directors in which
ARAMARK continues to own an equity interest, is terminated
for any reason.
You will own any shares you purchased through any prior exercises
of installments. However, all of the shares you own will
be subject to ARAMARK's right to repurchase set forth in
the stockholders' agreement.
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HOW TO PURCHASE AND PAY TAXES DUE
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- --GENERAL
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20. Q: HOW DO I PURCHASE SHARES OF COMMON STOCK?
A: To exercise an installment of your purchase opportunity and
purchase shares, you must
7
<PAGE>
deliver to ARAMARK
o your properly completed exercise forms and
o payment of the correct purchase price in U.S. dollars
plus the aggregate amount of applicable taxes required
to be withheld or collected.
You must deliver these items to our Philadelphia address shown
in the mailing instructions before the last day of the
exercise period. Instructions for computing taxes
required to be withheld are included on the exercise
forms.
You may complete the forms using the ARAMARK exercise form wizard
on the ARAMARK web site at http://www.aramark.com/stock.
The form wizard does not transmit your completed forms to
ARAMARK. You will still need to print out and sign the
forms and send the signed forms and the purchase price to
ARAMARK.
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| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S. AND CANADA: |
| |
| To exercise an installment of your purchase opportunity and |
| purchase shares, you must deliver to ARAMARK |
| |
| o your properly completed exercise forms and |
| |
| o payment of the correct purchase price in your own country's |
| currency plus the aggregate amount of applicable taxes |
| required to be withheld or collected. |
| |
| You must deliver these items to the local ARAMARK address |
| shown in the mailing instructions before the last day of the |
| exercise period. Instructions for computing the purchase |
| price and the taxes required to be withheld are included |
| on the exercise form. |
| |
| Withholding tax on your exercise will be paid |
| to the appropriate taxing authority, and your payroll |
| and tax records will be updated for the exercise by the |
| ARAMARK subsidiary company for which you work. |
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| CANADA BASED EMPLOYEES: |
| |
| As in prior years, the check you send to exercise your |
| opportunities should be drawn in U.S. dollars and should |
| be sent to the Philadelphia address shown in the mailing |
| instructions. |
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| SPAIN BASED EMPLOYEES: |
| |
| As well as completing the exercise forms, we understand that |
| you will be required to complete form MC-10A and file it with |
| the Directorate for Foreign Investments and Commercial |
| Transactions. |
| |
| In addition, if the aggregate purchase price for the |
| purchase opportunities that you are exercising is |
| more than 1,000,000 ptas. (including required |
| withholding), then you are also required to complete |
| form B3 and file it with your employer. |
| |
| If the aggregate purchase price for the purchase |
| opportunities that you are exercising is more than |
| 500,000 ptas. (including required withholding) and |
| you are obtaining all or part of the purchase price |
| from a bank, then you must notify the bank of the |
| details of the transaction. |
| |
| Copies of the required forms and form of |
| notification are available from the local ARAMARK |
| address shown in the mailing instructions. If you |
| complete and forward these government required forms |
| along with your completed exercise forms and |
| payment, then ARAMARK will file the completed forms |
| on your behalf. |
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21. Q: HOW DO I MAKE PAYMENT FOR THE PURCHASE PRICE?
A: You may be eligible to use one or more of the following
means to pay for your shares:
o Using the ARAMARK deferred payment program (see Questions 28
through 41).
o Borrowing from a bank or other lender (see Question 42).
o Selling ARAMARK shares that you already own (see
Questions 43 and 44).
o Using ARAMARK shares that you already own in a
stock-for-stock exchange (see Questions 45 through 51).
o Using personal savings or other personal funds.
We describe the eligibility requirements and the conditions
for using each of these payment methods in this
prospectus.
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| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S. AND CANADA: |
| |
| We understand that laws of countries outside |
8
<PAGE>
| the U.S. and Canada do not permit the variable |
| "like-kind" tax treatment accorded to stock-for-stock |
| exercises in the U.S. and Canada. Accordingly, |
| stock-for-stock exercises will not be available to |
| employees outside of the U.S. and Canada. |
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22. Q: WHAT TAXES WILL I OWE WHEN I EXERCISE A PURCHASE OPPORTUNITY?
A: When you exercise a purchase opportunity, if the appraisal
price is higher than the exercise price, the difference
is considered ordinary taxable income.
We are required to withhold or collect taxes at the time of
the exercise. These taxes include a required 28% for
U.S. income taxes, plus appropriate social security
taxes and applicable state income and unemployment
taxes.
Based on present law, we collect and apply toward these taxes
an amount equal to 38% of the difference between the
exercise price and appraisal price.
You may owe additional tax as a result of this exercise. You
should discuss your particular situation with your tax
advisor.
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| BELGIUM BASED EMPLOYEES: |
| |
| We understand that, under current Belgian income tax |
| laws: |
| |
| o for purchase opportunities granted before January |
| 1, 1999, upon exercise of a purchase opportunity, |
| you must treat as taxable income the excess of the |
| appraisal price over the exercise price; and |
| |
| o for purchase opportunities granted after January |
| 1, 1999, no income will be recognized by the |
| employee upon exercise of a purchase opportunity. |
| Tax in that case would be imposed as of the time a |
| purchase opportunity is granted. (See Question 11) |
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| CANADA BASED EMPLOYEES: |
| |
| We understand that, under current Canadian federal |
| income tax laws: |
| |
| o upon exercise of a purchase opportunity, the |
| employee must treat as a taxable benefit from |
| employment the excess of the appraisal price over |
| the exercise price; |
| |
| o the employee may be entitled to deduct one quarter |
| of the benefit in computing taxable income; and |
| |
| o if your cost basis in ARAMARK stock, combined with |
| that of any other "specified foreign property" you |
| own exceeds C$100,000 at any time during a year, you |
| are required to file Form T1135, "Foreign Income |
| Verification Statement", with Revenue Canada. You |
| are urged to discuss with your tax advisor whether |
| this requirement applies to you. |
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| CZECH REPUBLIC BASED EMPLOYEES: |
| |
| We understand that under current Czech income tax |
| laws, upon exercise of a purchase opportunity, you |
| must treat as employment type income the excess of |
| the appraisal price over the exercise price. |
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| GERMANY BASED EMPLOYEES: |
| |
| We understand that under current German income tax |
| laws: |
| |
| o upon exercise of a purchase opportunity, you must |
| treat as taxable income the excess of the appraisal |
| price over the exercise price; and |
| |
| o if the spread does not exceed one half of the |
| appraisal price and is less than DM300, the entire |
| spread may be excluded from income, provided you |
| hold the shares for at least six years. |
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| MEXICO BASED EMPLOYEES: |
| |
| We understand that under current Mexican income tax |
| laws, upon exercise of a purchase opportunity, you |
| must treat as taxable compensation from labor the |
| excess of the appraisal price over the exercise |
| price. This amount will be subject to income tax |
| plus appropriate social security taxes. |
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| SPAIN BASED EMPLOYEES: |
| |
| We understand that under current Spanish income tax |
| laws, upon exercise of a purchase opportunity, you |
| must treat as taxable salary compensation in kind |
| the excess of the appraisal price over the exercise |
| price. For exercises of purchase opportunities more |
| than two years after the opportunities were granted, |
| the resulting spread is treated as irregular taxable |
| salary compensation in kind. ARAMARK understands |
| that 30% of irregular taxable salary compensation in |
| kind may be excludable from taxation. |
----------------------------------------------------------------------
9
<PAGE>
----------------------------------------------------------------------
| UNITED KINGDOM BASED EMPLOYEES: |
| |
| We understand that under current United Kingdom |
| income tax laws, upon exercise of a purchase |
| opportunity, you must treat as taxable income the |
| excess of the appraisal price over the exercise |
| price. |
----------------------------------------------------------------------
23. Q: WILL ARAMARK REPORT THE TAXABLE INCOME THAT I REALIZE UPON THE
EXERCISE OF MY PURCHASE OPPORTUNITY?
A: For U.S. based employees, the taxable income and the taxes
withheld will be reported to the IRS on your W-2 form
for the year in which the purchase occurs. The
purchase occurs at the time we receive and process your
completed exercise forms and your purchase price
payment.
For example, if we receive your exercise forms and purchase
price payment for the appropriate installment in
December 1999, we will report the taxable income and
the taxes collected on your W-2 form for 1999; and if
we receive them in January 2000, we will report the
taxable income and the taxes collected on your W-2 form
for 2000. You may wish to consult with your tax
advisor when considering the time, within an
installment exercise period, to exercise a purchase
opportunity.
----------------------------------------------------------------------
| BELGIUM BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity that was |
| granted before January 1, 1999, then we will report |
| any taxable income and any taxes withheld on your |
| salary slip (281.10) and summary form (325.10) for |
| the year in which the purchase occurs. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity, then we will |
| report any taxable income and any available |
| one-quarter deduction to Revenue Canada on a T- 4 |
| form for the year in which the purchase occurs. |
| Reporting to provincial tax authorities will also be |
| made, as required. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CZECH REPUBLIC BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity, then we will |
| report to the financial authorities the taxable |
| income derived from employment and any taxes |
| withheld for the year in which the purchase occurs. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| GERMANY BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity, then we will |
| report the taxable income and any taxes withheld on |
| your wage tax card for the year in which the |
| purchase occurs. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| MEXICO BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity, then we will |
| report the taxable income and any taxes withheld for |
| the year in which the purchase occurs. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| SPAIN BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity, then we will |
| report the taxable salary compensation and any taxes |
| withheld for the year in which the purchase occurs. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| UNITED KINGDOM BASED EMPLOYEES: |
| |
| If you exercise a purchase opportunity, then we will |
| report the details of the transaction to the Inland |
| Revenue. |
----------------------------------------------------------------------
24. Q: HOW DO I COMPUTE THE AMOUNT OF WITHHOLDING TAX I MUST DEPOSIT WITH
ARAMARK WHEN EXERCISING AN INSTALLMENT?
A: A portion of the exercise form guides you through the
computation of the estimated amount to be withheld or
collected to cover applicable taxes. We included the
exercise form in this prospectus as Annex B, and it is
also available on the ARAMARK web site at
http://www.aramark.com/stock.
25. Q: HOW ARE ESTIMATED WITHHOLDING TAXES COLLECTED?
A: You must pay to ARAMARK the estimated withholding taxes,
as computed on the exercise form, at the time you
exercise an installment.
It is possible that the amount estimated at 38% to be withheld
or collected will not be sufficient to cover the actual
taxes we are required to withhold at the time of
exercise. IN SUCH EVENT, WE MAY WITHHOLD ADDITIONAL
TAXES FROM SUBSEQUENT PAYCHECKS. If the actual amount
required to be withheld is less than the estimated
amount, the difference will be refunded to you in a
subsequent paycheck.
----------------------------------------------------------------------
| BELGIUM BASED EMPLOYEES: |
| |
| We are required to withhold taxes at a rate based on |
| all of your income derived from employment. |
| |
| For exercises of purchase opportunities that were |
| granted before January 1, 1999, we will require you |
| to deposit 38% of the spread as |
10
<PAGE>
| an estimate of the required withholding taxes. |
| |
| This amount is not necessarily the entire amount of |
| tax that you will owe as a result of this exercise. |
| Additional tax may be required to meet your full tax |
| liability due to this grant or exercise. You should |
| discuss your particular situation with your tax |
| advisor. |
| |
| It is possible, depending on your personal |
| situation, that the amount estimated at 38% to be |
| withheld or collected will not be sufficient to |
| cover the actual taxes we are required to withhold |
| at the time of grant or exercise. IN SUCH EVENT, WE |
| MAY WITHHOLD ADDITIONAL TAXES FROM SUBSEQUENT |
| PAYCHECKS. If the actual amount required to be |
| withheld is less than the estimated amount, the |
| difference will be refunded to you in a subsequent |
| paycheck. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| We understand that it is the administrative position |
| of Revenue Canada that a taxable benefit recognized |
| upon the exercise of a purchase opportunity is not |
| subject to tax withholding. Therefore, we will not |
| require any deposit from you for taxes related to |
| your exercise. You are responsible for paying any |
| required tax, including any personal tax |
| installments. You are urged to discuss your |
| particular situation with your tax advisor. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CZECH REPUBLIC BASED EMPLOYEES: |
| |
| We understand that we are required to withhold taxes |
| for employment type of income at the rate used for |
| all of your income derived from employment. We will |
| require you to deposit 38% of the spread as an |
| estimate of the required withholding taxes. This |
| amount is not necessarily the entire amount of tax |
| that you will owe as a result of this exercise. |
| Additional tax may be required to meet your full tax |
| liability due to this exercise. You should discuss |
| your particular situation with your tax advisor. |
| |
| It is possible, depending on your personal |
| situation, that the amount estimated at 38% to be |
| withheld or collected will not be sufficient to |
| cover the actual taxes we are required to withhold |
| at the time of exercise. IN SUCH EVENT, WE MAY |
| WITHHOLD ADDITIONAL TAXES FROM SUBSEQUENT PAYCHECKS. |
| If the actual amount required to be withheld is less |
| than the estimated amount, the difference will be |
| refunded to you in a subsequent paycheck. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| GERMANY BASED EMPLOYEES: |
| |
| We understand that we are required to withhold taxes |
| for this income at a rate based on all of your |
| income derived from employment. We will require you |
| to deposit 38% of the spread as an estimate of the |
| required withholding taxes. This amount is not |
| necessarily the entire amount of tax that you will |
| owe as a result of this exercise. Additional tax |
| may be required to meet your full tax liability due |
| to this exercise. You should discuss your |
| particular situation with your tax advisor. |
| |
| It is possible, depending on your personal |
| situation, that the amount estimated at 38% to be |
| withheld or collected will not be sufficient to |
| cover the actual taxes we are required to withhold |
| at the time of exercise. IN SUCH EVENT, WE MAY |
| WITHHOLD ADDITIONAL TAXES FROM SUBSEQUENT PAYCHECKS. |
| If the actual amount required to be withheld is less |
| than the estimated amount, the difference will be |
| refunded to you in a subsequent paycheck. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| MEXICO BASED EMPLOYEES: |
| |
| We understand that we are required to withhold taxes |
| for taxable compensation from labor resulting from |
| the exercise of purchase opportunities at the same |
| rates as ordinary cash compensation. |
| |
| We will require you to deposit 38% of the spread as |
| an estimate of the required withholding taxes. This |
| amount is not necessarily the entire amount of tax |
| that you will owe as a result of this exercise. |
| Additional tax may be required to meet your full tax |
| liability due to this grant or exercise. You should |
| discuss your particular situation with your tax |
| advisor. |
| |
| It is possible, depending on your personal |
| situation, that the amount estimated at 38% to be |
| withheld or collected will not be sufficient to |
| cover the actual taxes we are required to withhold |
| at the time of exercise. IN SUCH EVENT, WE MAY |
| WITHHOLD ADDITIONAL TAXES FROM SUBSEQUENT PAYCHECKS. |
| If the actual amount required to be withheld is less |
| than the estimated amount, the difference will be |
| refunded in a subsequent paycheck. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| SPAIN BASED EMPLOYEES: |
| |
| We understand that we are required to withhold taxes |
| for taxable salary compensation in kind at the same |
| rates as ordinary cash salary. We will require you |
| to deposit 38% of the spread as an estimate of the |
| required withholding taxes. This amount |
11
<PAGE>
| is not necessarily the entire amount of tax that you will |
| owe as a result of this exercise. Additional tax |
| may be required to meet your full tax liability due |
| to this grant or exercise. You should discuss your |
| particular situation with your tax advisor. |
| |
| It is possible, depending on your personal |
| situation, that the amount estimated at 38% to be |
| withheld or collected will not be sufficient to |
| cover the actual taxes we are required to withhold |
| at the time of exercise. IN SUCH EVENT, WE MAY |
| WITHHOLD ADDITIONAL TAXES FROM SUBSEQUENT PAYCHECKS. |
| If the actual amount required to be withheld is less |
| than the estimated amount, the difference will be |
| refunded to you in a subsequent paycheck. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| UNITED KINGDOM BASED EMPLOYEES: |
| |
| We understand that we are required to account for |
| the income tax arising on exercise via the PAYE |
| system, in line with your salary and other payments. |
| We will require you to deposit 38% of the spread as |
| an estimate of the required withholding taxes. |
| |
| It is possible, depending on your personal |
| situation, that the amount estimated at 38% to be |
| withheld or collected will not be sufficient to |
| cover the actual taxes we are required to withhold |
| at the time of exercise. IN SUCH EVENT, WE MAY |
| WITHHOLD ADDITIONAL TAXES FROM SUBSEQUENT PAYCHECKS. |
| If the actual amount required to be withheld is less |
| than the estimated amount, the difference will be |
| refunded to you in a subsequent paycheck. |
| |
| By signing your exercise form, you will be giving |
| ARAMARK your authorization to collect 38% tax |
| withholding at the time of exercise and to make any |
| additional tax withholding from your subsequent pay |
| checks required to meet your PAYE obligation |
| following your exercise. |
----------------------------------------------------------------------
26. Q: HOW WILL I KNOW WHAT THE APPRAISAL PRICE OF THE COMMON STOCK IS?
A: Our current practice is to have the common stock
independently appraised quarterly - December 1, March 1,
June 1, September 1 - by an independent appraiser. The
appraisal price at December 1, 1999 was $15.20 (see
Questions 63 through 68).
----------------------------------------------------------------------
| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S. AND CANADA: |
| |
| 27. Q: How will I compute the purchase price of the common stock |
| in my own country's currency? |
| |
| A: You should contact the representative shown in the mailing |
| instructions to obtain the exchange rate to be used. |
----------------------------------------------------------------------
- -------------------------------------------------------------------------
- --DEFERRED PAYMENT PROGRAM
- -------------------------------------------------------------------------
28. Q: WHAT IS THE DEFERRED PAYMENT PROGRAM?
A: The deferred payment program allows you to defer paying a
portion of the purchase price when you purchase shares
of common stock.
29. Q: WHO IS ELIGIBLE TO PARTICIPATE IN THE DEFERRED PAYMENT PROGRAM?
A: Generally, you may participate in the deferred payment
program for the second or any subsequent installment
exercise.
30. Q: WILL THE DEFERRED PAYMENT PROGRAM BE OFFERED FOR EXERCISES IN THE
FUTURE?
A: We anticipate the deferred payment program will be offered
annually. However, the board of directors may cancel
or modify the deferred payment program at any time.
31. Q: DO I HAVE TO PARTICIPATE IN THE DEFERRED PAYMENT PROGRAM?
A: No. Any participation by you is strictly voluntary.
32. Q: HOW MUCH OF THE PURCHASE PRICE PAYMENT MAY I DEFER UNDER THE
DEFERRED PAYMENT PROGRAM?
A: You may defer payment of up to the following percentages of the
total purchase price, including required withholding taxes:
o to purchase any or all shares exercised in installment #2 for
up to 25% of the total purchase price of such shares,
o to purchase any or all shares exercised in installment #3 for
up to 50% of the total purchase price of such shares, and
o to purchase any or all shares exercised in
12
<PAGE>
installments #4 through #6 for up to 90% of the total
purchase price of such shares.
33. Q: HOW DO I ELECT TO PARTICIPATE IN THE DEFERRED PAYMENT PROGRAM?
A: You may use the exercise forms included in Annex B and
available on our web site at http://
www.aramark.com/stock to elect into the deferred
payment program. A portion of the exercise form guides
you through the election and computation of the amount
of payment you may defer.
34. Q: WHAT ARE THE TERMS OF THE DEFERRED PAYMENT PROGRAM?
A: Three year term. You must repay the deferred amount, plus
interest, on the March 15 following the third
anniversary of the date you exercise your purchase
opportunity. For example, for a purchase opportunity
exercised in January 2000, the deferred payment is due
on March 15, 2003. If you sell or otherwise transfer
any of such shares, the entire deferred payment becomes
due at the time of the sale.
8.5% interest rate. Interest will accrue on any deferred
payment at a fixed annual rate (currently 8.5% simple
interest) and will be payable at the time the deferred
payment is due. We may select a different interest
rate for use in future deferred payment obligations.
However, the interest rate at the time a deferred
payment obligation is entered into is fixed for the
entire term of the obligation.
Pledge of shares. We will hold as collateral shares with an
aggregate appraisal price equal to 133% of the amount
of the deferred payment (rounded up to whole shares)
until we receive the deferred payment. If payment is
not received when due, we will repurchase a sufficient
number of shares to cover the amount due.
Demand obligations. Deferred obligations are demand
obligations and, as such, may be called at any time.
We do not intend, but reserve the right, to call
obligations under the deferred payment program. If we
sell your obligation to a bank or other financial
institution, then that financial institution could
decide to call your obligation.
35. Q: DOES ARAMARK INTEND TO SELL MY DEFERRED PAYMENT OBLIGATION TO A BANK
OR OTHER FINANCIAL INSTITUTION?
A: Yes. We have sold almost all existing deferred payment
obligations of U.S. based employees to a financial
institution and currently intend to sell any new
deferred payment obligations. The financial
institution has not accelerated any deferred payment
obligations and has assured us that it does not
currently intend to do so. The financial institution
has stated that it would seriously consider
accelerating the deferred payment obligations if
o the pledge of shares securing the obligation ceased to be
valid,
o the appraisal price of the pledged shares falls
below 133% of the amount of the outstanding deferred
payment obligation,
o ARAMARK defaults in its obligations under its
primary credit agreement, or
o there is a material adverse downturn in ARAMARK's
business.
The financial institution has further stated, however, that it
would first offer to sell the obligations back to
ARAMARK prior to accelerating the obligations.
----------------------------------------------------------------------
| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S.: |
| |
| A: Not necessarily. The ARAMARK subsidiary in each |
| country will decide whether or not to sell the |
| deferred payment obligations of employees based in |
| that country, taking into account the applicable tax |
| consequences. |
----------------------------------------------------------------------
36. Q: CAN I DELAY THE PAYMENT OF MY DEFERRED PAYMENT OBLIGATION BEYOND THE
MATURITY DATE?
A: On the maturity due date, you may choose to delay the
payment of the principal amount for an additional three
years, but you must pay the interest on the original
maturity date. You may extend a deferred obligation
only once. Interest must still be paid on the original
due date. At the time of the extension, a new interest
rate will be set for the extension period. We will
make available the required extension forms prior to
maturity.
In addition, you may be able to refinance your deferred
payment obligation, including any
13
<PAGE>
interest under the bank loan program referred to in
Question 42 or under any arrangements you may make
with another outside lender. (See Question 42)
37. Q: WILL I BE ABLE TO SELL SHARES TO PAY MY DEFERRED PAYMENT OBLIGATION
AT THE TIME IT BECOMES DUE?
A: We intend to allow you to sell shares at that time.
However, all repurchases of shares by ARAMARK must be
approved by the board of directors and are subject to
our ability to do so under our loan agreements.
38. Q: CAN I PREPAY MY DEFERRED PAYMENT OBLIGATION?
A: Yes. You may prepay all or a part of your deferred
payment obligation at any time before it becomes due.
Partial payments are applied first to interest due and
then reduction of principal.
39. Q: WHAT ARE THE ANTICIPATED INCOME TAX CONSEQUENCES TO ME FOR
PARTICIPATION IN THE DEFERRED PAYMENT PROGRAM?
A: The tax consequences of exercising your purchase
opportunity installment will not change. Generally,
interest paid on money borrowed to pay the exercise
price for ARAMARK stock would be treated under U.S.
income tax law as investment interest. Accordingly, it
may be deductible, but only to the extent of investment
income received during the year the interest is paid.
"Investment income" does not include any income taxed
at the favorable capital gains rate. As a result, you
may not be able, or wish, to deduct deferred payment
interest when you pay it. However, investment interest
expense, including deferred payment interest, that is
not deducted for U.S. income tax purposes may be
carried forward indefinitely until it is used. You are
urged to discuss this matter with your tax advisor.
----------------------------------------------------------------------
| BELGIUM BASED EMPLOYEES: |
| |
| We understand that under current Belgian law, the |
| interest you pay would not be deductible for |
| personal income tax purposes. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| We understand that generally, under current Canadian |
| law, interest is deductible when it is paid to |
| acquire income-producing property. ARAMARK does not |
| now regularly pay dividends on its stock, nor are |
| such dividend payments planned for the foreseeable |
| future. As a result, we believe there may be an |
| issue whether interest paid under the deferred |
| payment program would be deductible for personal |
| income tax purposes. You are urged to discuss this |
| matter with your tax advisor. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CZECH REPUBLIC BASED EMPLOYEES: |
| |
| We understand that under current Czech law, the |
| interest you pay would not be deductible for |
| personal income tax purposes. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| GERMANY BASED EMPLOYEES: |
| |
| We understand that under current German tax law, |
| interest paid to acquire a capital asset such as |
| ARAMARK stock, is deductible only to the extent that |
| ordinary income, such as dividends, is derived from |
| that investment. ARAMARK does not now regularly pay |
| dividends on its stock, nor are such dividend |
| payments planned for the foreseeable future. As a |
| result, we believe that interest paid under the |
| deferred payment program probably would not be |
| deductible for personal income tax purposes. You |
| are urged to discuss this matter with your tax |
| advisor. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| MEXICO BASED EMPLOYEES: |
| |
| We understand that under current Mexican law, the |
| interest you pay would not be deductible for |
| personal income tax purposes. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| SPAIN BASED EMPLOYEES: |
| |
| We understand that under current Spanish law, the |
| interest you pay would not be deductible for |
| personal income tax purposes. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| UNITED KINGDOM BASED EMPLOYEES: |
| |
| We understand that under current United Kingdom law, |
| the interest you pay would not be deductible for |
| personal income tax purposes. |
----------------------------------------------------------------------
40. Q: WILL MY OBLIGATION TO PAY THE DEFERRED PAYMENT BE TREATED AS DEBT
FOR MY PERSONAL CREDIT PURPOSES?
A: Any decision regarding your personal credit, whether for a
home mortgage or otherwise, would be made by a lender.
We understand that generally the deferred payment
obligation would be treated as debt for personal credit
purposes by lenders.
14
<PAGE>
41. Q: MAY I PARTICIPATE IN THE DEFERRED PAYMENT PROGRAM IF I AM ALSO
PARTICIPATING IN THE BANK LOAN PROGRAM REFERRED TO IN QUESTION 42?
A: Yes. However, your eligibility for any bank loan program
is determined solely by that bank.
- -------------------------------------------------------------------------
- --BORROWING
- -------------------------------------------------------------------------
42. Q: CAN I BORROW MONEY TO PURCHASE THE SHARES COVERED BY MY PURCHASE
OPPORTUNITY?
A: Yes. Generally, if you wish to borrow money to purchase
shares, you must make your own financing arrangements
with outside lenders.
Wachovia Bank has developed a special loan program for ARAMARK
U.S. based employees. Information is available from Rose
Ajani or Steve Slewitzke at 800-724-8865. Eligibility
for this program is determined by the bank.
Of course, you are free to make your own arrangements with any
other lender. See Questions 60 through 62 concerning
your ability to pledge your shares to a lender.
----------------------------------------------------------------------
| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S.: |
| |
| Banks have developed special loan programs for |
| ARAMARK employees in some countries other than the |
| U.S. If you wish to borrow money to purchase |
| shares, you can contact the representative shown in |
| the mailing instructions to learn whether any bank |
| has developed a special loan program for ARAMARK |
| employees in your country. |
----------------------------------------------------------------------
- -------------------------------------------------------------------------
- --SALE OF CURRENTLY-OWNED SHARES
- -------------------------------------------------------------------------
43. Q: HOW CAN I SELL SHARES OF COMMON STOCK THAT I CURRENTLY OWN TO PAY
THE PURCHASE PRICE?
A: You may sell shares of common stock in the internal market
that is being conducted concurrently with the December 15
to January 15 installment exercise period (see Question
72). If you exercise your purchase opportunity during
such internal market period and sell ARAMARK shares you
currently hold, you may have the cash proceeds of such
sale applied to pay all or a portion of the purchase
price. The
15
<PAGE>
necessary forms and instructions are included in
Annex B.
44. Q: WHAT ARE THE TAX CONSEQUENCES IF I SELL SHARES TO RAISE CASH TO
EXERCISE MY PURCHASE OPPORTUNITY?
A: For U.S. based employees, the sale of common stock is a
taxable event. In most cases, any gain or loss upon
disposition of shares may be treated as capital gain or
loss.
The tax consequences of selling shares are not affected by
whether or not you use the proceeds of such sale to
exercise other purchase opportunities. Taxes due from
the sale of shares must be paid in addition to the taxes
due on the exercise of purchase opportunities.
You are urged to discuss your particular situation with your tax
advisor.
----------------------------------------------------------------------
| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S.: |
| |
| See the answers to Question 71, which address the applicable |
| tax consequences to employees based in countries other than |
| the U.S. |
----------------------------------------------------------------------
- -------------------------------------------------------------------------
STOCK-FOR-STOCK EXCHANGES
- -------------------------------------------------------------------------
----------------------------------------------------------------------
| EMPLOYEES BASED IN COUNTRIES OTHER THAN THE U.S. AND CANADA: |
| |
| WE UNDERSTAND THAT LAWS OF COUNTRIES OUTSIDE THE U.S. |
| AND CANADA DO NOT PERMIT THE FAVORABLE "LIKE-KIND" |
| TAX TREATMENT ALLOWED FOR STOCK-FOR-STOCK EXERCISES |
| IN THE U.S. AND CANADA. ACCORDINGLY, STOCK-FOR-STOCK |
| EXERCISES ARE NOT BENEFICIAL TO EMPLOYEES OUTSIDE THE |
| U.S. AND CANADA AND, THEREFORE, WILL NOT BE AVAILABLE |
| TO THEM. STOCK-FOR-STOCK EXERCISES IN OTHER |
| COUNTRIES WOULD BE TAXED THE SAME AS ACTUAL SALES OF |
| SHARES OF COMMON STOCK TO PAY FOR THE EXERCISE OF |
| PURCHASE OPPORTUNITIES. IF YOU WISH TO USE THE VALUE |
| OF SHARES YOU ALREADY HOLD TO HELP PAY FOR YOUR |
| EXERCISE, YOU SHOULD ACTUALLY SELL SHARES IN THE |
| INTERNAL MARKET, USING THE FORMS INCLUDED IN ANNEX B |
| (AND ALSO AVAILABLE ON THE ARAMARK WEB SITE AT |
| HTTP://WWW.ARAMARK.COM/STOCK). YOU ARE ENCOURAGED TO |
| CONSULT YOUR TAX ADVISOR REGARDING YOUR COUNTRY'S |
| SPECIFIC RULES FOR SUCH EXERCISES. |
----------------------------------------------------------------------
45. Q: WHAT IS A STOCK-FOR-STOCK EXCHANGE?
A: The effect of a stock-for-stock exchange is much the same as
if you sold shares and used the cash proceeds to pay a
portion of the purchase price. However, in countries
where stock-for-stock exchange is permitted, there is a
significant tax difference in that no taxable capital
gain is currently generated by the use of a
stock-for-stock exchange.
46. Q: WHAT IS THE BENEFIT OF USING THE STOCK-FOR-STOCK EXCHANGE METHOD?
A: Where stock-for-stock exchange is permitted, you can avoid
recognizing any gain for income tax purposes that you
would otherwise recognize if you sold shares that you
currently own and then used the cash proceeds to pay the
exercise price.
47. Q: WHAT ARE THE TAX CONSEQUENCES IF I USE THE STOCK-FOR-STOCK EXCHANGE
METHOD?
A: Where stock-for-stock exchange is permitted, your taxable
income from the stock-for-stock exchange is the same as
if it were an exercise for cash. Your taxable income is
equal to the difference between the exercise price and
the appraisal price and is taxable at ordinary rates and
subject to withholding.
The U.S. tax basis and holding period for the shares that you
currently own and use in the stock-for-stock exchange
remain unchanged. The tax basis of the additional shares
you receive in the exercise is equal to the current
appraisal price at the time of the exercise, and their
holding period commences with the date of exercise.
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| We understand that taxable income results only from |
| the exercise and is calculated as explained in |
| Question 22. There should be no capital gain or |
| loss on the disposition of the old shares. The tax |
| cost of the new shares you receive on the exercise |
| will be equal to the tax cost of the old shares plus |
| the amount of the taxable benefit (not reduced by |
| the deduction allowed for one quarter of the income |
| realized on exercise) included in your income in |
| respect of the new shares (plus any other cash you |
| pay towards the purchase price). This tax cost is |
| then averaged with the tax cost of other identical |
| shares held by the employee. |
----------------------------------------------------------------------
16
<PAGE>
48. Q: HOW DO I USE THE STOCK-FOR-STOCK EXCHANGE METHOD?
A: A portion of the exercise form guides you through the
computation of how many currently owned shares will be
needed in your stock-for-stock exchange. You may use any
shares that you, or you and your spouse jointly, have
owned for more than six months. You may even use shares
that are pledged to ARAMARK in the deferred payment
program.
49. Q: WHO IS ELIGIBLE TO USE A STOCK-FOR-STOCK EXCHANGE?
A: Generally, U.S. based and Canada based employees may use the
stock-for-stock exchange method for an exercise of any
installment.
50. Q: HOW MUCH OF THE PURCHASE PRICE CAN BE PAID USING THE STOCK-FOR-STOCK
EXCHANGE METHOD?
A: You may use the stock-for-stock exchange method to cover up
to, but not more than, the exercise price.
Stock-for-stock exchange may not be used to pay
applicable withholding taxes.
For example, if the exercise price for 100 shares is $3.25 per
share (totaling $325.00) and the appraisal price at
exercise is $10.00 per share, then
o you may use 32 shares that you currently own in the
stock-for-stock exchange method to pay $320.00 of the
exercise price with the balance of $5.00 (plus required
withholding taxes) being paid through the other available
methods.
o you may not use 33 shares, because 33 times
$10.00 (or $330.00) exceeds the exercise price of
$325.00.
51. Q: WHAT ARE THE RESTRICTIONS ON THE SHARES I USE IN A STOCK-FOR-STOCK
EXCHANGE?
A: You may use shares in a stock-for-stock exchange only if the
shares are owned by you, or you and your spouse jointly,
and only if you have owned the shares for more than six
months. In addition, shares that you use in the stock-
for-stock exchange method, like the shares you acquire in
an exercise of a purchase opportunity, are not eligible
for sale
17
<PAGE>
in the internal market during the six months after the
exercise.
- -------------------------------------------------------------------------
STOCK OWNERSHIP
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- --GENERAL
- -------------------------------------------------------------------------
52. Q: WILL I RECEIVE A STOCK CERTIFICATE FOR THE SHARES OF COMMON STOCK
THAT I PURCHASE?
A: No. All shares will be issued in uncertificated form. We
will send a profile report to you in place of a
certificate after each transaction.
Each December we distribute annual statements with the stock
holdings and terms of each holder's outstanding purchase
opportunities.
53. Q: CAN I HAVE THE SHARES REGISTERED JOINTLY IN MY NAME AND MY SPOUSE'S
NAME?
A: Yes. You can register shares in the names of you and your
spouse as joint tenants, provided both you and your
spouse sign the exercise form. See Questions 56 through
59 for more information.
If you are utilizing the deferred payment program, both of you
must also sign the Obligation Note, which is included
with the exercise forms.
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| To register shares as joint tenants in your name and |
| your spouse's name, you must first transfer the |
| shares to such joint holding following your exercise |
| of your purchase opportunity. Canadian securities |
| laws generally do not permit a trade of shares by |
| Canadian-resident holders. However, we obtained |
| relief from each of the Ontario and Quebec |
| Securities Commissions from restrictions on transfer |
| that otherwise would apply. The relief granted by |
| the commissions permits an employee to transfer |
| shares to prescribed groups of persons, including |
| his or her spouse (see Question 57). To register |
| shares in the names of you and your spouse as joint |
| tenants, both you and your spouse must sign the |
| exercise form. |
| |
| There may be tax consequences from registering |
| shares in joint name that differ from the |
| consequences of registering them in solely the |
| employee's name. You are urged to consult with your |
| tax advisor if you are considering registration in |
| joint name. |
----------------------------------------------------------------------
54. Q: WILL I RECEIVE DIVIDENDS ON THE COMMON STOCK?
A: If the board of directors declares a dividend, holders of
common stock on the dividend record date will be entitled
to receive that dividend.
55. Q: WILL I BE ENTITLED TO VOTE ON ANY MATTERS SUBMITTED TO A VOTE OF
ARAMARK CORPORATION STOCKHOLDERS?
A: Yes. You will generally be free to vote your shares in any
manner you choose on any matters properly presented to
the stockholders. (See sections 12 and 16.04 of the
stockholders' agreement)
- -------------------------------------------------------------------------
- --TRANSFERRING SHARES
- -------------------------------------------------------------------------
56. Q: MAY I TRANSFER MY SHARES OF COMMON STOCK?
A: Except in limited circumstances, you may not sell or
otherwise transfer your shares of common stock. (See
section 2.01 of the stockholders' agreement)
57. Q: MAY I TRANSFER MY SHARES OF COMMON STOCK FOR ESTATE OR TAX PLANNING
PURPOSES?
A: Yes. You may transfer your shares for estate or tax
planning purposes as gifts to your spouse, child,
grandchild, or parent or to a trust for the benefit of
any of them or to a qualifying charitable organization.
You may also make other transfers to your family members,
their trusts, or other entities if the transfer is
approved by the board of directors. (See section 3.01 of
the stockholders' agreement)
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| Canadian securities laws generally do not permit |
| trades of shares by Canadian-resident holders. We |
| obtained some relief from each of the Ontario and |
| Quebec Securities Commissions from restrictions on |
| transfer that otherwise would apply. |
18
<PAGE>
| The relief granted by the Ontario Securities |
| Commission permits Ontario-resident employees and |
| senior officers of ARAMARK Canada Ltd. and its |
| subsidiaries to transfer shares only to eligible |
| persons provided it is done in compliance with the |
| stockholders' agreement. Subsequent transfers of |
| shares are similarly restricted to other eligible |
| persons. Eligible persons are |
| |
| o spouses of employees; |
| |
| o minor children of employees; |
| |
| o corporations controlled by employees and/or their |
| spouses when the employee is an officer and director |
| of the corporation and when all the shares of the |
| corporation are owned at all times by any |
| combination of the employee, the spouse of the |
| employee, children of the employee, children of the |
| employee's spouse and offspring of children of the |
| employee; and |
| |
| o trusts in which all the beneficiaries are any |
| combination of the employee, the spouse of the |
| employee, children of the employee, children of the |
| employee's spouse and offspring of children of the |
| employee, and in which at least one of the trustees |
| is the employee. |
| |
| The relief granted by the Quebec Securities |
| Commission permits Quebec-resident holders of shares |
| to transfer shares in accordance with the |
| stockholders' agreement. Pursuant to the |
| stockholders' agreement, you may transfer your |
| shares for estate or tax planning purposes as gifts |
| to your spouse, child, grandchild, or parent or to a |
| trust for the benefit of any of them or to a |
| qualifying charitable organization. Pursuant to the |
| stockholders' agreement, you may also make other |
| transfers to your family members, their trusts, or |
| other entities if the transfer is approved by the |
| board of directors. (See section 3.01 of the |
| stockholders' agreement) |
| |
| We understand that when shares are gifted to |
| permitted transferees, a taxable disposition may be |
| deemed to occur, depending on the employee's |
| relationship to the permitted transferee. |
| Furthermore, subsequent dividends paid on shares |
| gifted to permitted transferees and gains realized |
| from subsequent sales of gifted shares may be |
| attributed back to the employee, again depending on |
| the employee's relationship to the permitted |
| transferee. You are urged to discuss with your tax |
| advisor the tax consequences of any gift of shares |
| that you may consider making. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| MEXICO BASED EMPLOYEES: |
| |
| We understand that transfers of shares to permitted |
| transferees may be treated as taxable dispositions |
| of those shares, subject to taxation. You are urged |
| to discuss with your tax advisor the tax |
| consequences of any gift of shares that you may |
| consider making. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| SPAIN BASED EMPLOYEES: |
| |
| We understand that transfers of shares to permitted |
| transferees may be treated as taxable dispositions |
| of those shares, subject to capital gain taxation. |
| You are urged to discuss with your tax advisor the |
| tax consequences of any gift of shares that you may |
| consider making. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| UK BASED EMPLOYEES: |
| |
| We understand that transfers of shares to permitted |
| transferees may be treated as taxable dispositions |
| of those shares, subject to capital gain taxation, |
| depending on the employee's relationship to the |
| permitted transferee. You are urged to discuss with |
| your tax advisor the tax consequences of any gift of |
| shares that you may consider making. |
----------------------------------------------------------------------
58. Q: ARE PERMITTED TRANSFERS SUBJECT TO ANY CONDITIONS?
A: Yes. The transferee must sign a form available from ARAMARK
confirming that he or she is acquiring the shares subject
to all the terms and conditions of the stockholders'
agreement. The form must be delivered to ARAMARK before
the transfer. (See section 2.03(a) of the stockholders'
agreement)
59. Q: WHEN WILL I BE ABLE TO TRANSFER MY SHARES FREELY
WITHOUT HAVING TO COMPLY WITH THE RESTRICTIONS ON
TRANSFER CONTAINED IN THE STOCKHOLDERS' AGREEMENT?
A: The stockholders' agreement will continue in force unless
the stockholders who are parties to the agreement and
ARAMARK vote to terminate or change it. (See section 11
of the stockholders' agreement)
- -------------------------------------------------------------------------
- --PLEDGING SHARES
- -------------------------------------------------------------------------
60. Q: MAY I PLEDGE MY SHARES OF ARAMARK COMMON STOCK?
A: Yes. You may pledge your shares to a
19
<PAGE>
commercial bank, savings and loan institution, or any
other lending or financial institution as security
for your indebtedness. However, you may do so only
if the lender agrees that, upon realization of its
security, the lender will dispose of the shares only
in compliance with the terms of the stockholders'
agreement. (See section 3.02 of the stockholders'
agreement) If you are eligible and elect to
participate in ARAMARK's deferred payment program,
you will be required to pledge shares to ARAMARK (see
Question 34).
61. Q: WILL THE PLEDGED SHARES BE SUBJECT TO THE STOCKHOLDERS'
AGREEMENT?
A: Yes.
62. Q: WILL I BE ABLE TO SELL PLEDGED SHARES IN THE INTERNAL
MARKET OR UNDER THE EMERGENCY BUYBACK PROGRAM?
A: Yes. However, for shares pledged to ARAMARK under the
deferred payment program, your entire deferred payment
obligation will become due at the time of such sale.
- -------------------------------------------------------------------------
- --APPRAISAL PRICE
- -------------------------------------------------------------------------
63. Q: WHAT IS THE APPRAISAL PRICE OF THE COMMON STOCK USED FOR?
A: The appraisal price is the price at which we grant stock
purchase opportunities to employees and the price at
which we repurchase common stock under the stockholders'
agreement. (See section 1.02 of the stockholders'
agreement)
64. Q: HOW WILL I KNOW WHAT THE APPRAISAL PRICE OF THE COMMON STOCK IS?
A: Our current practice is to have the common stock appraised
quarterly - December 1, March 1, June 1, September 1 - by
an independent appraiser. The appraisal price at
December 1, 1999 was $15.20.
We generally include the appraisal price with the Chairman's
quarterly letter to shareholders. Additionally, you can
obtain the most recent appraisal price by calling
888-96-OWNER.
65. Q: HOW HAS THE APPRAISAL PRICE PERFORMED?
A: The appraisal price, adjusted for stock splits, has
increased continually since the 1984 management buyout at
a compound annual rate of approximately 30%. The
adjusted appraisal price at each December for the last 10
years and the percentage increase year over year are set
forth in the following table. Of course, past
performance is no guaranty of future results.
APPRAISAL PRICE HISTORY
---------------------------------------------------------
DECEMBER 1, APPRAISAL PRICE PERCENTAGE INCREASE
1989 $ 2.00
1990 $ 2.39 19.5%
1991 $ 2.83 18.4%
1992 $ 3.39 19.8%
1993 $ 3.73 22.3%*
1994 $ 4.42 18.5%
1995 $ 4.92 11.3%
1996 $ 5.57 13.2%
1997 $ 8.30 49.0%
1998 $11.90 43.4%
1999 $15.20 27.7%
---------------------------------------------------------
* Includes effect of the special dividend paid in April 1993.
66. Q: WHO DETERMINES THE APPRAISAL PRICE?
A: Each year the board of directors selects an independent
appraisal firm to act as appraiser of the common stock.
Houlihan Lokey Howard & Zukin Financial Advisors, Inc. is
the current appraiser. We have used Houlihan for our
quarterly appraisals since 1994.
We paid Houlihan fees of approximately $200,000 plus
reimbursement of expenses for appraisal and other
services rendered to ARAMARK during the 12 months prior
to the date of this prospectus. In addition, we agreed
to indemnify Houlihan against enumerated liabilities that
it might incur in connection with the preparation of the
appraisal or otherwise as a result of the services that
it rendered.
67. Q: WHAT INFORMATION DOES THE APPRAISER CONSIDER IN RENDERING ITS
APPRAISALS?
A: In rendering its appraisals, Houlihan generally
o holds interviews and discussions with key senior
corporate officers at ARAMARK's corporate
headquarters in Philadelphia, Pennsylvania;
o reviews the history and nature of
20
<PAGE>
ARAMARK;
o reviews the financial data bearing on recent and
prospective operations, including ARAMARK's 10-K and
10-Q filings with the SEC, other recent filings with
the SEC, audited and interim financial statements,
and internal financial and operating segment data as
well as long-term financial forecasts of ARAMARK;
o reviews and analyzes ARAMARK's operating segments
and their prospects;
o examines industry and capital market information
deemed relevant to the assessment of investment risk
and investment return attributes of the common stock;
and
o analyzes any other factors that it considers
necessary under the circumstances.
ARAMARK data and forecasts reviewed by Houlihan include
operating results, business plans, and strategic plans
that are not made generally available to the stockholders
of ARAMARK.
68. Q: HOW DOES THE APPRAISER DETERMINE THE APPRAISAL PRICE?
A: The appraiser determines the appropriate methodology for its
appraisal. Houlihan currently bases its appraisals on
market capitalization approaches and on income
approaches, including discounted cash flow analysis, to
arrive at an aggregate equity value. Houlihan also gives
consideration to various qualitative factor
considerations, including limitations on the
marketability of the common stock resulting in part from
the restrictions imposed by the stockholders' agreement.
The most recent appraisal, dated December 1, 1999,
included an approximate 40% discount from aggregate
equity value with respect to qualitative factor
considerations.
- -------------------------------------------------------------------------
SALES WHILE EMPLOYED
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- --GENERAL
- -------------------------------------------------------------------------
69. Q: WILL I BE ABLE TO SELL SHARES BACK TO ARAMARK?
A: Yes. Primarily, you will be able to sell your shares to
ARAMARK in the internal market.
We also provide an emergency buyback program to accommodate
limited instances when unanticipated emergencies arise.
We anticipate that the combination of the internal market
and the emergency buyback program should provide adequate
liquidity to all management investors in an orderly and
equitable basis. We also provide an offer-to-sell
procedure that could be used. These three methods for
realizing liquidity are described more fully below (see
Questions 72, 73 and 74). Our ability to repurchase any
shares is subject to our continued strong operating and
financial performance. (See section 3.03 of the
stockholders' agreement)
70. Q: WILL ARAMARK INFORM ME PRIOR TO THE TIME THAT I
PURCHASE SHARES FROM ARAMARK (THROUGH THE EXERCISE OF A
PURCHASE OPPORTUNITY OR OTHERWISE) OR SELL SHARES TO
ARAMARK (IN THE INTERNAL MARKET OR OTHERWISE) OF ANY
PENDING OR POTENTIAL TRANSACTION THAT COULD INCREASE OR
DECREASE THE VALUE OF THE STOCK?
A: No. We will not disclose any pending or potential
transaction in connection with your decision to purchase
or sell any shares of ARAMARK stock. It is in the best
interests of ARAMARK and our stockholders taken as a
whole for ARAMARK to be able to conduct orderly
transactions in common stock on a continual basis
(including in connection with the internal market and
repurchases upon termination of employment) and for
ARAMARK concurrently to be able to consider from time to
time on a confidential basis potential transactions that
could affect the fair market value and/or the appraisal
price of the shares. We do not disclose publicly our
projections or the status of any transaction that may be
under consideration. (See section 8 of the stockholders'
agreement)
71. Q: WHAT ARE THE TAX CONSEQUENCES IF I SELL
SHARES?
A: For U.S. based employees, the sale of common stock is a
taxable event. In most cases, any gain or loss upon
disposition of shares (measured by reference to the
appraisal price of the shares on the date of
21
<PAGE>
exercise) may be treated as capital gain or loss.
You are urged to discuss your particular situation
with your tax advisor.
----------------------------------------------------------------------
| BELGIUM BASED EMPLOYEES: |
| |
| We understand that any gain is exempt from the |
| Belgian income tax. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| We understand that, under current Canadian federal |
| income tax laws, the sale of shares is a taxable |
| event with the following effect. |
| |
| The amount by which the sale price exceeds (or are |
| exceeded by) the adjusted cost base of the shares |
| plus any costs of sale will be treated as capital |
| gain (or capital loss) of the employee. |
| |
| The adjusted cost base of the shares acquired on the |
| exercise of the purchase opportunity will be equal |
| to the exercise price plus the amount of the taxable |
| benefit realized. The adjusted cost base of the |
| shares will be computed in Canadian dollars, using |
| the Canada-U.S. exchange rate prevailing on the date |
| of exercise. The adjusted cost base of all shares |
| received on the exercise of a purchase opportunity |
| will then be averaged with the adjusted cost base of |
| other identical shares owned by the employee. |
| |
| The tax consequences of selling shares are not |
| affected by whether you use the proceeds of such |
| sale to exercise other purchase opportunities. |
| Taxes due from the sale of shares must be paid in |
| addition to the taxes due on the exercise of |
| purchase opportunities. |
| |
| You are urged to discuss your particular situation |
| with your tax advisor, including the records you |
| need to keep to properly determine, from time to |
| time, the average adjusted cost base of your shares. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CZECH REPUBLIC BASED EMPLOYEES: |
| |
| We understand that if you sell the shares more than |
| six months after you exercise your purchase |
| opportunity, then any gain is exempt from the Czech |
| income tax. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| GERMANY BASED EMPLOYEES: |
| |
| We understand that if you sell the shares more than |
| 12 months after you exercise your purchase |
| opportunity, then any gain is exempt from the German |
| income tax. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| MEXICO BASED EMPLOYEES: |
| |
| We understand that for Mexican income tax purposes, |
| the sale of stock is a taxable event. In most |
| cases, any gain or loss upon disposition of shares |
| may be treated as capital gain or loss. We |
| understand that capital gains may be taxed in Mexico |
| at the same rates as ordinary income but that |
| certain adjustments to the tax basis of the stock |
| may be made, increasing that basis and offsetting |
| the effects of inflation during the period you held |
| the stock. You are urged to discuss your particular |
| situation with your tax advisor. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| SPAIN BASED EMPLOYEES: |
| |
| We understand that for Spanish income tax purposes, |
| the sale of common stock is a taxable event. In |
| most cases, any gain or loss upon disposition of |
| shares may be treated as capital gain or loss. We |
| understand that capital gains may be taxed in Spain |
| under several alternative rules, depending on how |
| long you held the shares. You are urged to discuss |
| your particular situation with your tax advisor. |
| |
| As well as completing the internal market forms, you |
| will be required to complete form MC-10B and file it |
| with the Directorate for Foreign Investments and |
| Commercial Transactions. |
| |
| In addition, if the aggregate sale price for the |
| shares that you are selling is more than 1,000,000 |
| ptas., then you are also required to complete form |
| B3 and file it with a registered financial entity. |
| |
| In addition, if the aggregate sale price for the |
| purchase opportunities that you are exercising is |
| more than 500,000 ptas. (including required |
| withholding) and you are depositing all or part of |
| the sale price into a bank, then you must notify the |
| bank of the details of the transaction. |
| |
| You should consult with your tax advisor to help you |
| complete and file any required forms and notices. |
| Accurate reporting of the transaction is your |
| obligation. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| UNITED KINGDOM BASED EMPLOYEES: |
| |
| We understand that selling shares is a taxable event |
| under capital gains rules. Capital gains tax would |
| be calculated on the proceeds less |
22
<PAGE>
| the appraisal price of the shares at the time of exercise. |
| |
| An annual exemption, currently (pound)6,800, may be |
| available to offset this charge. You should discuss |
| your particular situation with your tax advisor. |
----------------------------------------------------------------------
- -------------------------------------------------------------------------
- --INTERNAL MARKET
- -------------------------------------------------------------------------
72. Q: WHAT IS THE INTERNAL MARKET?
A: The internal market is a process whereby, on a periodic
basis, we offer to purchase some of your shares of common
stock. At the time of the offer, each management owner
will then be able to decide whether to accept or reject
the offer. The internal market provides the primary way
for management owners to sell some of their stock
holdings.
The internal market policy approved for 2000 consists of four
quarterly repurchase periods, and subject to further
review and approval by the board of directors prior to
each subsequent annual offering, is as follows:
- -------------------------------------------------------------------------
| INTERNAL MARKET |
| --------------- |
| |
| OFFERING PERIODS: |
| December 15 to January 15; |
| March 15 to April 15; |
| June 15 to July 15; |
| September 15 to October 15. |
|-----------------------------------------------------------------------|
| OFFEREES: |
| All management owners. |
|-----------------------------------------------------------------------|
| PURCHASE PRICE: |
| The most recent available appraisal price as of |
| December 1, March 1, June 1, September 1. |
|-----------------------------------------------------------------------|
| PAYMENT TERMS: |
| Cash. |
|-----------------------------------------------------------------------|
| INDIVIDUAL GUIDELINE FOR EACH OFFERING PERIOD: |
| Up to $250,000. Requests for larger sales can be made |
| by contacting either Marie Paschall (215-238-3194) or |
| Russell Garrison (215-238-3238). |
|-----------------------------------------------------------------------|
| REQUIRED HOLDING PERIOD: |
| Shares owned for less than six months or used in a |
| stock-for-stock exchange within the prior six months |
| are not eligible for resale in the internal market. |
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- --EMERGENCY BUYBACK PROGRAM
- -------------------------------------------------------------------------
73. Q: WHAT IS THE EMERGENCY BUYBACK PROGRAM?
A: From time to time there may be compelling circumstances when
an unanticipated emergency arises, which may cause a
management owner to request us to repurchase shares.
Each request will be reviewed individually, taking into
account all relevant circumstances.
- -------------------------------------------------------------------------
- --OFFER-TO-SELL
- -------------------------------------------------------------------------
74. Q: WILL I BE ABLE TO SELL MY SHARES IN ANY OTHER WAY?
A: The anticipated typical procedure for selling shares is
through the internal market. However, you may also offer
a portion of your shares to us at the current appraisal
price of the common stock. In the event we do not
purchase your shares, you could offer to sell your shares
within the next 90 days to a third party who agrees to
abide by all the terms of the stockholders' agreement, on
the same terms offered to us. (See section 4 of the
stockholders' agreement)
Upon termination for any reason, subject to our right to call
your shares (see Question 76), you could offer to sell
your shares as described above.
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| We understand that the Canadian securities laws |
| generally do not allow any sale of shares other than |
| sales back to ARAMARK. However, as described under |
| Question 57 above, we have obtained some relief from |
| Canadian securities laws that would permit, in the |
| case of Ontario-resident employees, a sale of shares |
| to eligible persons and, in the case of |
| Quebec-resident holders of shares, a sale of shares |
| to a third party, provided that the transfers are |
| made in compliance with the stockholders' agreement |
| and further trades by such transferees will be |
| subject to the same limitations. |
----------------------------------------------------------------------
75. Q: ARE THERE ANY RESTRICTIONS TO WHOM I CAN SELL MY SHARES?
A: Yes. The stockholders' agreement provides that even if we
do not purchase your shares, you cannot sell your shares
to anyone who we do not approve as a suitable investor in
a privately-owned services management company or to
anyone who would hold more than 10% of the common stock
after sale. However, we have agreed to waive these
restrictions.
- -------------------------------------------------------------------------
SALES UPON TERMINATION OF EMPLOYMENT
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
- --GENERAL
- -------------------------------------------------------------------------
76. Q: IF MY EMPLOYMENT WITH ARAMARK AND ITS SUBSIDIARIES IS
TERMINATED FOR ANY REASON, DOES ARAMARK HAVE THE RIGHT TO
REQUIRE ME TO SELL MY SHARES TO ARAMARK?
A: Yes. Our right to require you to sell your shares is
described as a call. At any time during the 10 years
following the termination of your employment, we have the
right to call any or all of your shares and any or all of
the shares of all of your permitted transferees. We
intend to exercise promptly our call right for all shares
if you are terminated for any reason. (See section 6 of
the stockholders' agreement)
77. Q: DO THE CALL RIGHTS APPLY TO A TERMINATION OF MY EMPLOYMENT WITH
ARAMARK AND ITS SUBSIDIARIES THAT IS BEYOND MY CONTROL?
A: Yes. The call rights apply to all terminations of
employment with ARAMARK and its subsidiaries without
regard to cause, including death, permanent and complete
disability, voluntary or involuntary termination of
employment, and retirement. For example, if we were to
sell the division or subsidiary in which you work, then
the call rights would apply even though you were
continuing to work in the same division or subsidiary.
(See section 6 of the stockholders' agreement)
78. Q: HOW WILL I BE PAID FOR MY SHARES WHEN THEY ARE CALLED?
A: In almost all cases, we will purchase your shares at the
appraisal price of the common stock in effect as of your
date of termination of employment. If we give notice
that we are exercising the call more than 120 days after
the time of termination of employment, we will repurchase
your shares at the lesser of the appraisal price at the
time of termination plus 8% simple interest to the time
of such notice, or the appraisal price at the time of
such notice. (See section 6.02 of the stockholders'
24
<PAGE>
agreement) See Questions 83 through 88 for a description
of the payment terms.
79. Q: WHAT IF ARAMARK CANNOT REPURCHASE MY SHARES PURSUANT TO
THE EXERCISE OF A PUT, DESCRIBED BELOW, OR A CALL BECAUSE
IT WOULD CAUSE A DEFAULT UNDER ONE OF ARAMARK'S LOAN
AGREEMENTS OR WOULD VIOLATE APPLICABLE LAW?
A: Your shares would be repurchased on the earliest practicable
date when such repurchase could be effected in compliance
with such loan agreement and applicable law. The price
to be paid could be affected because of such delay. (See
section 10.01 of the stockholders' agreement)
80. Q: IF I VOLUNTARILY TERMINATE MY EMPLOYMENT, ARAMARK HAS
THE RIGHT TO CALL MY SHARES OF COMMON STOCK. WILL
ARAMARK INFORM ME PRIOR TO THE TIME I TERMINATE MY
EMPLOYMENT OF ANY PENDING OR POTENTIAL TRANSACTION THAT
COULD INCREASE THE VALUE OF THE COMMON STOCK?
A: No. We will not disclose any pending or potential
transaction in connection with your decision to terminate
your employment (or in connection with your decision to
exercise a put or in any other circumstance). It is in
the best interests of ARAMARK and our stockholders taken
as a whole for ARAMARK to be able to conduct orderly
transactions in common stock on a continual basis
(including in connection with the internal market and
repurchases upon termination of employment) and for
ARAMARK concurrently to be able to consider from time to
time on a confidential basis potential transactions that
could affect the fair market value and/or the appraisal
price of the shares. We do not disclose publicly our
projections or the status of any transaction that may be
under consideration. (See section 8 of the stockholders'
agreement)
81. Q: WILL I BE ABLE TO REQUIRE ARAMARK TO REPURCHASE SHARES?
A: Generally, no. However, upon your death, complete
disability or normal retirement, you or your estate, as
appropriate, subject to our financing agreements, can
require us to purchase up to 30% of your shares. This
right to require us to purchase shares is described as a
put. We will be required to purchase these shares for
cash at the current appraisal price of the common stock.
We intend to purchase (call) your remaining shares (see
Question 76). However, in the event we do not call your
shares, then you could offer to sell to a third party the
remaining shares (see Question 74). (See section 5 of
the stockholders' agreement)
82. Q: WHAT ARE THE TAX CONSEQUENCES IF I SELL SHARES?
A: The tax consequences from the sale of shares upon
termination of employment are substantially similar to
the tax consequences of sales while employed. See the
answers to Question 71 which address the applicable tax
consequences to U.S. based employees and employees based
in countries other than the U.S. See Question 88
regarding installment treatment in cases in which an
installment note is used to pay a portion of the sale
price. You are urged to discuss your particular
situation with your tax advisor.
- -------------------------------------------------------------------------
- --STOCK REPURCHASE POLICY
- -------------------------------------------------------------------------
83. Q: WHAT IS THE STOCK REPURCHASE POLICY?
A: Our stock repurchase policy provides for payment terms that
are generally more favorable to you than the payment
terms provided for in the stockholders' agreement. (See
section 1.08 of the stockholders' agreement) This policy,
which is described below (see Question 85), may be
amended, discontinued, or varied for all repurchase
transactions generally or for any specific repurchase
transaction at any time by ARAMARK without notice. The
policy does not affect the total repurchase price that
you will be paid for your shares.
84. Q: ARE THERE ANY CONDITIONS TO GETTING THE GENERALLY MORE FAVORABLE
PAYMENT TERMS UNDER THE STOCK REPURCHASE POLICY?
A: Yes. To qualify for the payment terms under the stock
repurchase policy, you must agree
25
<PAGE>
to the release contained in ARAMARK's standard
repurchase agreement. Otherwise, you will receive
the payment terms provided for in the stockholders'
agreement.
85. Q: WHAT DOES THE STOCK REPURCHASE POLICY CURRENTLY PROVIDE
IF I TERMINATE MY EMPLOYMENT AND MY SHARES ARE CALLED, OR
IF I AM ENTITLED TO EXERCISE A PUT AND DO SO, AND THE
REMAINDER OF MY SHARES ARE CALLED?
A: You will receive a cash payment plus, depending upon the
total repurchase price, an installment note with up to
three annual principal installments, as set forth in the
following table.
------------------------------------------------------------------
| STOCK REPURCHASE POLICY |
|----------------------------------------------------------------|
| TOTAL REPURCHASE |
| PRICE* PAYMENTS |
|----------------------------------------------------------------|
| Up to $600,000 Initial payment of total |
| repurchase price* |
|----------------------------------------------------------------|
| Up to $1,200,000 Initial payment of $600,000 |
| plus one installment of balance |
|----------------------------------------------------------------|
| Up to $1,800,000 Initial payment of $600,000 |
| plus one installment of $600,000|
| plus second installment of |
| balance |
|----------------------------------------------------------------|
| Up to $2,400,000 Initial payment of $600,000 |
| plus two installments of |
| $600,000 each plus third |
| installment of balance |
|----------------------------------------------------------------|
| More than $2,400,000 Initial payment of 25% plus |
| three equal installments |
| of balance |
------------------------------------------------------------------
* After repayment of any deferred payment obligations
- -------------------------------------------------------------------------
- --INSTALLMENT NOTES
- -------------------------------------------------------------------------
86. Q: WHAT ARE THE TERMS OF THE INSTALLMENT NOTES?
A: The annual principal payments on the installment notes are
set pursuant to the stock repurchase policy. Interest
will be paid semi-annually and the rate will be fixed at
the applicable federal rate, which currently varies
approximately from 5.66% to 6.37%, depending on the term
of the note. (See section 1.08 of the stockholders'
agreement) The form of installment note, including the
subordination terms, is set forth in Exhibit A to the
stockholders' agreement.
87. Q: DOES THE STOCK REPURCHASE POLICY PROVIDE FOR AN
ALTERNATIVE INTEREST RATE ON THE PROMISSORY NOTE?
A: Yes. Instead of a fixed interest rate for the entire life
of the promissory note, you may make a one-time
irrevocable election at the time of repurchase for the
rate to reset annually on the date of each principal
payment to the applicable federal rate then in effect.
88. Q: IF ARAMARK PURCHASES MY SHARES USING, IN PART, AN
INSTALLMENT NOTE, WILL I HAVE TO PAY TAX ON THE ENTIRE
GAIN IN THE FIRST YEAR?
A: You may be able to defer tax on some or all of your gain.
For U.S. based employees, the purchase using a note
usually will qualify for installment treatment under the
U.S. income tax laws. You should be able to recognize
taxable gain in proportion to the cash payments of
principal you will receive over the years. You should
consult with your tax advisor to determine if installment
sale treatment is advantageous to you and how you should
report it on your tax returns.
----------------------------------------------------------------------
| BELGIUM BASED EMPLOYEES: |
| |
| We understand that gain on the sale of shares is |
| tax-exempt. The interest payable on the installment |
| note, however, is treated as movable income and is |
| taxable at a rate of 15%. Also, there may be an |
| additional 15% withheld under U.S. tax laws. You |
| should consult with your tax advisor to determine if |
| installment sale treatment is advantageous to you |
| and how you should report it on your tax returns. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CANADA BASED EMPLOYEES: |
| |
| We understand that you may be able to defer tax on |
| some or all of your gain. The purchase using a note |
| usually will qualify for installment treatment under |
| the Canadian income tax laws. You should be able to |
| recognize the taxable gain in proportion to the |
| cumulative cash payments of principal you will |
| receive over the years if you file Revenue Canada |
| form T2017 with your tax returns, but at a minimum |
| you must recognize one fifth of the gain each year |
| for five years. The interest payable on the |
26
<PAGE>
| installment is subject to a withholding tax of 10%, |
| which can be claimed as a foreign tax credit or |
| deducted on your tax return. You should consult |
| with your tax advisor to determine if installment |
| sale treatment is advantageous to you and how you |
| should report it on your tax returns. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| CZECH REPUBLIC BASED EMPLOYEES: |
| |
| We understand that if the shares have been held at |
| least six months, the gain is tax-exempt. The |
| interest paid on the installment note, however, is |
| treated as capital income. You should consult with |
| your tax advisor to determine if installment sale |
| treatment is advantageous to you and how you should |
| report it on your tax returns. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| GERMANY BASED EMPLOYEES: |
| |
| We understand that if the shares have been held at |
| least 12 months, the gain is tax-exempt. The |
| interest payable on the installment note, however, |
| is treated as interest income. Any interest income |
| from the installment note is taxable income to the |
| extent your total dividend and interest income in |
| any calendar year exceeds the following amounts: |
| |
| o for calendar year 1999 and before, DM 6,100 (or DM |
| 12,200 for jointly filing married employees); and |
| |
| o for calendar year 2000 and after, DM 3100 (or DM |
| 6,200 for jointly filing married employees). |
| |
| You should consult with your tax advisor to |
| determine if installment sale treatment is |
| advantageous to you and how you should report it on |
| your tax returns. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| MEXICO BASED EMPLOYEES: |
| |
| We understand that you may be able to defer tax on |
| some or all of your gain. The purchase using a note |
| usually will qualify for installment treatment under |
| Mexican income tax laws. You should be able to |
| recognize taxable gain in proportion to the cash |
| payments of principal you will receive over the |
| years. The interest payable on the installment is |
| subject to a withholding tax of 15%, which you may |
| be able to claim as a foreign tax credit or deduct |
| on your tax return. You should consult with your |
| tax advisor to determine if installment sale |
| treatment is advantageous to you and how you should |
| report it on your tax returns. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| SPAIN BASED EMPLOYEES: |
| |
| We understand that you may be able to defer tax on |
| some or all of your gain. The purchase using a note |
| usually will qualify for installment treatment under |
| Spanish income tax laws. You should be able to |
| recognize taxable gain in proportion to the cash |
| payments of principal you will receive over the |
| years. The interest payable on the installment is |
| subject to a withholding tax of 10%, which you may |
| be able to claim as a foreign tax credit or deduct |
| on your tax return. You should consult with your |
| tax advisor to determine if installment sale |
| treatment |
27
<PAGE>
| is advantageous to you and how you should |
| report it on your tax returns. |
----------------------------------------------------------------------
----------------------------------------------------------------------
| UNITED KINGDOM BASED EMPLOYEES: |
| |
| We understand that you may not be able to defer tax |
| on your gain. The selling of shares for an |
| installment note is a taxable event under United |
| Kingdom capital gains tax laws. In addition, any |
| interest paid on the note will be subject to income |
| tax. You should consult with your tax advisor to |
| determine if installment sale treatment is |
| advantageous to you and how you should report it on |
| your self assessment form. |
----------------------------------------------------------------------
<PAGE>
THE ARAMARK OWNERSHIP PROGRAM
We designed the ARAMARK Ownership Program to provide an
opportunity for selected management employees of ARAMARK and its
subsidiaries to acquire an ownership interest in ARAMARK and
thereby give them a more direct and continuing interest in the
future success of our business.
Under the Program, the direct ownership in ARAMARK has
increased from 62 original management investors in 1984 to
approximately 2,500 management investors today, owning directly
approximately 70% of the equity. In addition, at October 1,
1999, management employees held stock purchase opportunities for
an additional 20,529,608 shares.
ARAMARK's senior management believes that management
ownership significantly contributes to our success, and intends
to continue to use the program to expand both the number of
management investors and their percentage ownership.
The program has used or uses the 1984 Stock Option Plan and
the Combined Stock Ownership Plan. These plans allow us to
continue offering stock purchase opportunities (sometimes called
options) to selected employees.
This prospectus relates to the grant and exercise of
installment stock purchase opportunities. Through installment
stock purchase opportunities, we have granted to management
employees an opportunity to invest in, or increase their
investment in, ARAMARK.
1984 Option Plan. The board of directors adopted and the
stockholders approved the 1984 Option Plan in December 1984 in
connection with the management buyout. The stockholders approved
amendments to the plan in February 1987. The plan provides for
the issuance of shares of common stock through the granting of
incentive stock options and/or nonqualified options. On October
1, 1999, 312,600 stock purchase opportunities were outstanding
under the plan. No additional stock purchase opportunities can
be granted under the plan.
Combined Stock Ownership Plan. In 1995, the board of
directors adopted and in February 1996 the stockholders approved
the Combined Stock Ownership Plan, which amends and combines the
1987 Stock Option Plan and the 1991 Stock Ownership Plan.
1987 Option Plan. The board of directors adopted the 1987
Option Plan in May 1987, and stockholders approved the plan in
February 1988. In February 1996, the plan became part of the
Combined Stock Ownership Plan. The plan provides for the
issuance of shares of common stock through the granting of
incentive stock options and/or nonqualified options. On October
1, 1999, 3,080,916 stock purchase opportunities were outstanding
under the plan. No additional stock purchase opportunities can
be granted under the plan.
1991 Ownership Plan. The board of directors adopted the 1991
Ownership Plan in November 1991 and amended it in 1994.
Stockholders approved the plan in February 1995. In February
1996, the plan became part of the Combined Stock Ownership Plan.
The plan provides for the issuance of shares of common stock
through the granting of nonqualified options. On October 1,
1999, 16,611,395 stock purchase opportunities were outstanding
under the plan and 20,990,139 were available for future grants.
1996 Directors Stock Ownership Plan. The board of directors
approved the directors plan in February 1996. The directors plan
provides for the issuance of shares of common stock through
grants of nonqualified options to directors who are not employees
of ARAMARK. On October 1, 1999, 524,697 stock purchase
opportunities were outstanding under the directors plan and
145,200 were available for future grants. This prospectus does
not relate to the grant or exercise of stock purchase
opportunities under the directors plan, and references to the
plans do not include the directors plan.
28
<PAGE>
In accordance with the terms of the plans, the purchase price
for shares will not be less than the fair market value of the
shares, based on the most recent available independent appraisal,
on the date of the grant. Shares issued under the plans are
subject to the stockholders' agreement. The plans provide that
the terms of purchase opportunities outstanding under the plans
and the number of shares authorized under the plans will be
appropriately adjusted upon the declaration of stock dividends
and upon the occurrence of other events described in the plans.
The plans grant authority to the Human Resources,
Compensation and Public Affairs Committee, which consists of five
members of the board of directors.
The plans authorize the committee to grant purchase
opportunities and to determine the number of shares to be offered
to each selected key employee. The term "key employee" is not
defined in the plans, and subject to the express provisions of
the plans, the committee has complete authority to determine the
employees who receive purchase opportunities. As a result, the
number of employees eligible to participate in the plans is not
determinable.
Generally, you may not transfer purchase opportunities. No
purchase opportunity can be subject to attachment, execution, or
levy of any kind. Generally, each purchase opportunity shall be
exercisable only by the employee to whom it is granted and only
while an employee of ARAMARK or a subsidiary or any other entity
in which ARAMARK continues to own an equity interest and which
the board of directors designates.
We will use the net proceeds from the sale of shares pursuant
to exercises of purchase opportunities for general corporate
purposes.
The plans are not subject to any provisions of the Employee
Retirement Income Security Act of 1974 and are not qualified
within the meaning of Section 401(a) of the Internal Revenue
Code.
The board of directors or the committee may establish
appropriate procedures for the administration of the plans. At
the time a purchase opportunity is granted, it may also include
additional terms and conditions that are not inconsistent with
the plans. The decision of the committee, or the board for
certain matters described in the plans, shall be final and
binding on all persons in interest, including employees, ARAMARK,
and its stockholders.
The Board may amend the plans as it deems desirable, except
that certain amendments also require stockholder approval.
Neither the plans nor any purchase opportunity granted under
the plans gives any employee the right to continue in the employ
of ARAMARK or its subsidiaries or limits in any respect the right
of ARAMARK or any subsidiary to terminate such employee.
DESCRIPTION OF EQUITY SECURITIES
GENERAL
The authorized capital of ARAMARK consists of 185,000,000
shares. Approximately 2,500 management investors hold all of the
outstanding shares of class B common stock. There is no
established public trading market for the common stock of
ARAMARK. The capitalization of ARAMARK as of October 1, 1999
was:
------------------------------------------------------------------
| CAPITALIZATION |
|----------------------------------------------------------------|
| CLASS PAR VALUE AUTHORIZED OUTSTANDING |
|----------------------------------------------------------------|
| class B common $ .01/share 150,000,000 65,569,596 |
|----------------------------------------------------------------|
| class A common $ .01/share 25,000,000 2,719,453 |
|-----------------------------------------------------------------
| preferred $1.00/share 10,000,000 0 |
------------------------------------------------------------------
As of October 1, 1999, there were 20,529,608 purchase
opportunities outstanding.
THE CLASS A COMMON STOCK AND THE CLASS B COMMON STOCK
The following summarizes material provisions of ARAMARK's
restated certificate of incorporation.
Voting. A holder is entitled to one vote for each share of
class A common stock and each share of class B common stock that
he or she holds.
Generally, class A and class B common stockholders vote
together. Holders of class A common stock and class B common
stock vote separately as classes on amendments to ARAMARK's
certificate of incorporation that may alter or change the powers,
preferences or special rights of their classes so as to affect
them adversely, and such other matters as may require class votes
under the Delaware General Corporation Law. The certificate of
incorporation does not provide for cumulative voting.
Dividends and Other Distributions -- including Distributions
upon Liquidation of ARAMARK. Dividends on the class A common
stock and the class B common stock are paid when declared by the
board of directors and permitted under ARAMARK's loan agreements.
When the board declares a dividend or other distribution, each
share of class A common stock is entitled to ten times the
dividends and other distributions paid to each share of class B
common stock. If the board declares a dividend or distribution
that is paid in common stock, only class A common stock will be
distributed to class A stockholders and only class B common stock
will be distributed to class B stockholders. In no event may
either class A common stock or class B common stock be split,
divided or combined unless the other is split, divided or
combined equally.
Convertibility. The class A common stock is not convertible.
Subject to the prior approval of the board of directors, the
class B common stock is convertible at all times, in whole or in
part, and without cost to the stockholder, into class A common
stock on the basis of ten shares of class B common stock for each
share of class A common stock. The board of directors may at any
time order the conversion of all the class B common stock into
class A common stock on a ten-for-one basis.
No Preemptive Rights. The class A common stock and class B
common stock do not carry any preemptive rights enabling a holder
to subscribe for or receive shares of stock of ARAMARK or any
other securities convertible into shares of stock of ARAMARK.
EXPERTS
The audited consolidated financial statements and schedules
incorporated by reference in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports
with respect thereto, and are included herein in reliance upon
the authority of said firm as experts in giving said reports.
We included the appraisal of Houlihan Lokey Howard & Zukin
Financial Advisors, Inc., independent securities appraisers, and
refer to that appraisal in this prospectus in reliance on the
authority of Houlihan as an expert in securities valuations.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC permits us to "incorporate by reference" information
into this prospectus, which means that we can disclose important
information to you by referring you to another document filed
separately with the SEC. The information incorporated by
reference is deemed to be part of this prospectus, except for
information superseded by information in this prospectus. This
prospectus incorporates by reference the following documents.
These documents contain important information about ARAMARK and
its finances.
(1) ARAMARK's latest annual report on Form 10-K filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended.
(2) All other reports filed by ARAMARK pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
year of the annual report referred to in (1) above.
(3) All documents subsequently filed by ARAMARK pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
116733
30
<PAGE>
ANNEX A
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
OF
ARAMARK CORPORATION
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT dated as of the 14th
day of December, 1994, which further amends and restates the Amended and
Restated Stockholders' Agreement dated as of December 14, 1984 (the
"AGREEMENT"), by and among ARAMARK CORPORATION (formerly The ARA Group,
Inc. and ARA Holding Company), a Delaware corporation ("ARAMARK"), and
the parties identified on the books of ARAMARK as "MANAGEMENT INVESTORS"
or their "PERMITTED TRANSFEREES" or as "INDIVIDUAL INVESTORS" or
"INSTITUTIONAL INVESTORS".
In consideration of the terms and conditions herein contained, the
parties hereto mutually agree as follows:
The parties hereto (other than ARAMARK) and any other person who
hereafter acquires equity securities of ARAMARK pursuant to the
provisions of, and subject to the restrictions and rights set forth in,
this Agreement are sometimes hereinafter referred to collectively, as
the "STOCKHOLDERS" or, individually, as a "STOCKHOLDER." The Management
Investors and the Individual Investors are sometimes hereinafter
referred to collectively as the "INVESTOR GROUP." Institutional
Investors and Individual Investors are sometimes hereinafter referred to
collectively as "OUTSIDE INVESTORS." Unless otherwise explicitly set
forth herein, the term "MANAGEMENT INVESTORS" shall mean only those
individuals so identified on the books of ARAMARK, exclusive of such
individuals' respective heirs, Permitted Transferees (as identified on
the books of ARAMARK) or other Transferees (as defined in Section
2.03(a) hereof); provided that the Board of Directors of ARAMARK may,
from time to time and in its sole discretion, designate any Stockholder
then employed by ARAMARK or its Subsidiaries a "MANAGEMENT INVESTOR."
Stockholders who are Permitted Transferees are identified as such on the
books of ARAMARK, along with the identity of their respective
transferors. Where a full-time employee or director has acquired or
acquires equity securities of ARAMARK in joint tenancy with their
spouses or in any other manner other than sole direct ownership, such
employee or director is deemed to be a Management Investor and such
record owner is deemed to be his or her Permitted Transferee.
A Transferee who is not already a party to this Agreement, by
executing the document referred to in Section 2.03(a) hereof, shall
thereby become entitled to the benefits of this Agreement and shall be
deemed to be an "INSTITUTIONAL INVESTOR", except: if such Transferee is
an employee of ARAMARK, then he or she shall be deemed to be a
"MANAGEMENT INVESTOR"; if such Transferee is a Transferee pursuant to
Section 3.01 of an Individual Investor, then he or she shall be deemed
to be an "INDIVIDUAL INVESTOR"; if such Transferee is a Transferee
pursuant to Section 3.01 of a Management Investor (or of his or her
Permitted Transferee), then he or she shall be deemed to be a "PERMITTED
TRANSFEREE" of such Management Investor. Determination of the
classification of a Stockholder by the Board of Directors shall be
conclusive and binding on all parties hereto.
ARAMARK's Class B Common Stock, par value $.01 per share ("CLASS B
COMMON STOCK"), and Class A Common Stock, par value $.01 per share
("CLASS A COMMON STOCK") are collectively referred to herein as the
"COMMON STOCK," and when so referred to shall be treated as one class to
which all the provisions of this Agreement apply.
Pursuant to ARAMARK's Restated Certificate of Incorporation (the
"CERTIFICATE OF INCORPORATION"), upon the termination of employment of a
Management Investor, the shares of Class B Common Stock held by such
Management Investor and his or her Permitted Transferees shall be
converted into shares of Class A Common Stock; and upon any transfer of
shares of Class B Common Stock in accordance with the terms of this
Agreement other than to a Management Investor or Permitted Transferee of
a Management Investor, such shares shall be converted into shares of
Class A Common Stock. Shares so converted shall continue to be subject
to the terms and conditions of this Agreement.
For purposes of this Agreement only, the employment of a Management
Investor shall be deemed terminated if he or she shall cease to be a
director or an active, full-time employee of ARAMARK or its
Subsidiaries. Such termination of employment shall not change the
designation of such person as a Management Investor.
<PAGE>
The parties hereto desire to restrict the sale, assignment,
transfer, encumbrance or other disposition of the Common Stock,
including issued and outstanding shares of Common Stock as well as
shares of Common Stock which may be issued hereafter, or which may
become issuable pursuant to the exercise of options, and to provide for
certain rights and obligations with respect thereto as hereinafter
provided.
1. CERTAIN DEFINITIONS.
1.01 "AFFILIATE" shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with another Person.
1.02 "APPRAISAL PRICE" of shares of Common Stock shall mean the fair
market value of such shares, as determined by an Appraiser according to
the most recent existing appraisal of shares of Common Stock, which
appraisal shall be as of a date not more than six months prior to the
use thereof. Such determination by the Appraiser shall be conclusive
and binding on all Stockholders and ARAMARK. With respect to shares of
Class A Common Stock resulting from the conversion of shares of Class B
Common Stock pursuant to the terms of the Certificate of Incorporation,
the "APPRAISAL PRICE OF (AN EQUIVALENT NUMBER OF) SHARES OF CLASS B
COMMON STOCK" shall mean the Appraisal Price, had the conversion not
occurred, of such shares of Class B Common Stock.
1.03 "APPRAISER" shall mean a firm headquartered in the United
States of nationally recognized standing in the business of appraisal or
valuation of securities which does not own any stock of ARAMARK and
which has been selected by the Board of Directors to act as an
independent appraiser. The Board of Directors shall review its
selection of an Appraiser annually.
1.04 "CALL" or "CALLED" shall mean ARAMARK's option to purchase
Common Stock from the holder thereof referred to in Sections 6 and 7
hereof.
1.05 "COMPLETELY DISABLED" and "COMPLETE DISABILITY" shall mean a
"permanent and total disability" as now defined in Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the "CODE").
1.06 "NORMAL RETIREMENT" shall mean voluntary termination of
employment with ARAMARK after attaining the age of 60, on at least 90
days prior written notice of such termination, where the retiree does
not intend to, at the time of termination, and in fact does not, engage
in full-time employment following such termination other than employment
that is with a governmental or a charitable, non-profit organization and
that is not competitive with ARAMARK.
1.07 "PERSON" shall mean a corporation, an association, a
partnership, an organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.
1.08 "PROMISSORY NOTE" shall mean a subordinated installment note of
ARAMARK substantially in the form of Exhibit A to this Agreement, with a
stated annual rate of interest equal to the Applicable Federal Rate (as
such term is defined in the Code) as of the issue date of the Promissory
Note, as determined by ARAMARK; with equal annual installments of
principal equal in amount to the least of (1) 10% of the original
principal amount of the Promissory Note, (2) the Management Investor's
highest annual base salary as an employee of ARAMARK, or (3) $100,000;
and with the final installment of principal equal to the outstanding
balance and due at the final maturity; and with the first installment of
principal due on the April 15 or October 15 occurring closest to the
first anniversary of the issue date of the Promissory Note; and with the
final maturity no later than the tenth anniversary of the Management
Investor's termination of employment; and with such other insertions as
ARAMARK shall reasonably make.
1.09 "PUT" shall mean the option of the holder to cause ARA to
purchase Common Stock referred to in Section 5 hereof.
1.10 "SUBSIDIARY" shall mean any corporation or other entity of
which ARAMARK shall, directly or indirectly, own 50% or more of the
equity, as determined for purposes of this Agreement by the ARAMARK
Board of Directors and any other corporation or other entity in which
ARAMARK shall directly or indirectly have an equity investment and which
the ARAMARK Board of Directors shall in its sole discretion designate.
A-2
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
<PAGE>
2. LIMITATIONS ON TRANSFERS OF SHARES.
2.01 TRANSFERS PROHIBITED UNLESS SPECIFICALLY PERMITTED. No
Stockholder shall transfer any shares of Common Stock at any time,
unless such sale, assignment, pledge or encumbrance or other transfer
shall have been effected in accordance with the terms of Section 3, 4,
5, 6 or 7 of this Agreement. ARAMARK shall not transfer upon its books
any shares of Common Stock held or owned by any of the Stockholders to
any person except in accordance with this Agreement.
2.02 INCONSISTENT AGREEMENTS PROHIBITED. Unless approved by the
Board of Directors, no Stockholder shall grant any proxy or enter into
or agree to be bound by any voting trust with respect to Common Stock
nor shall any Stockholder enter into any stockholder agreement or
arrangement of any kind with any person with respect to Common Stock
inconsistent with the provisions of this Agreement (whether or not such
agreement and arrangement is with other Stockholders or holders of
Common Stock that are not parties to this Agreement), including but not
limited to, any agreement or arrangement with respect to the
acquisition, disposition or voting of shares of Common Stock, or act,
for any reason, as a member of a group or in concert with any other
persons in connection with the acquisition, disposition or voting of
shares of Common Stock in any manner which is inconsistent with the
provisions of this Agreement.
2.03 REQUIREMENTS FOR ALL TRANSFERS.
(a) TRANSFEREE MUST AGREE TO BE BOUND BY AGREEMENT. Unless
otherwise explicitly provided herein, no Stockholder shall sell, assign,
pledge, encumber or otherwise transfer any shares of Common Stock to any
person (all such persons, regardless of the method of transfer, shall be
referred to collectively as "TRANSFEREES" and individually as a
"TRANSFEREE") unless (a) such Transferee shall have executed, as a
condition to its acquisition of shares (or, in the case of a Transferee
by will or the laws of descent, record ownership on the books of
ARAMARK) of Common Stock, an appropriate document confirming that such
Transferee takes such shares subject to all the terms and conditions of
this Agreement and (b) such document shall have been delivered to and
approved by ARAMARK prior to such Transferee's acquisition of shares
(or, in the case of a Transferee by will or the laws of descent, record
ownership on the books of ARAMARK) of Common Stock. ARAMARK shall not
unreasonably withhold or delay its approval of any such document.
(b) TRANSFER MUST COMPLY WITH SECURITIES LAWS. No Stockholder
shall sell, assign, pledge, encumber or otherwise transfer any shares of
Common Stock at any time if such action would constitute a violation of
any federal or state securities or blue sky laws or a breach of the
conditions to any exemption from registration of the Common Stock under
any such laws or a breach of any undertaking or agreement of such
Stockholder entered into pursuant to such laws or in connection with
obtaining an exemption thereunder. Any Stockholder who proposes to
sell, assign, pledge, encumber or transfer any shares of Common Stock
may deliver to ARAMARK an opinion of counsel that such action would not
result in any such violation or breach. The delivery of such opinion
shall be deemed to establish compliance with the provisions of this
Section 2.03(b) unless, within ten days after the receipt by ARAMARK of
such opinion, counsel for ARAMARK shall deliver an opinion that such
action would result in any such violation or breach (such opinion to
state the basis of the legal conclusions reached therein).
(c) ENDORSEMENT OF STOCK CERTIFICATES. Each certificate
representing shares of Common Stock shall bear endorsements reading
substantially as follows:
"The securities represented by this certificate are subject to the
right of the Corporation to repurchase such securities on the terms and
conditions set forth in a Stockholders' Agreement dated as of December
14, 1984, as the same may be amended from time to time, a copy of which
may be obtained from the Corporation or from the holder of this
instrument. No transfer of such securities will be made on the books of
the Corporation unless accompanied by evidence of compliance with the
terms of such Agreement."
Such certificate shall bear any additional endorsement which may be
required for compliance with federal or state securities or blue sky
laws. In the case of uncertificated shares of Common Stock, the books
of ARAMARK shall bear appropriate notations reflecting the foregoing.
3. CERTAIN PERMITTED TRANSFERS OF SHARES.
3.01 ESTATE PLANNING TRANSFERS, ETC. Subject to the restrictions
set forth in Section 2.03 and Section 4.06, a Stockholder shall be
entitled to make the following transfers of shares of Common
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Stock: (A) if made for nominal consideration or as gifts: (i) any
transfer or assignment to any one or more of the following relatives of the
Stockholder - spouse, child, grandchild, parent - or to a trust of which
there are and continue to be, during the term of this Agreement no
principal beneficiaries other than one or more of such relatives; (ii) any
transfer to any charitable organization which qualifies as such under
Section 501 (c) (3) or any successor provision of the Code; (iii) any
transfer to a legal representative in the event any Stockholder becomes
mentally incompetent; (iv) any transfer of record title to any nominee or
custodian, provided that the Stockholder so transferring such shares
remains the beneficial owner thereof; (B) any transfer among members of a
family, their trusts or other entities, if approved by the Board of
Directors; (C) any transfer among Institutional Investors which became
Stockholders in December 1984; and (D) with respect to a corporate or
partnership Stockholder transfer between an Affiliate and such corporate or
partnership Stockholder (it being understood with respect to such Affiliate
that the later sale of such Affiliate as part of a sale or series of sales
of substantial assets other than Common Stock would not constitute an
indirect sale of Common Stock by such corporate or partnership Stockholder,
and need not be made within the terms of this Agreement, provided that an
officer of such institution certifies that such sale is not being
undertaken to evade the transfer restrictions herein).
3.02 PERMITTED PLEDGES. A Stockholder shall be entitled to pledge
his or her shares of Common Stock to ARAMARK, a commercial bank, savings
and loan institution or any other lending or financial institution as
security for any indebtedness of such Stockholder to such lender;
provided that such lender shall first agree not to dispose of such
shares except in compliance with the provisions of this Agreement.
3.03 AUTHORITY OF BOARD OF DIRECTORS TO APPROVE TRANSFERS; ACTIONS
BY BOARD OF DIRECTORS. Notwithstanding any other provision of this
Agreement, the Board of Directors shall have the authority to approve
any transfer, or class, category or type of transfer, of Common Stock.
Such authority of the Board of Directors shall extend to, among other
things, (i) the authority to create an internal market for shares of the
Company's stock pursuant to which Management Investors would be offered
the opportunity to sell a portion of their shares at the times and on
the terms set by the Board of Directors, and (ii) the authority to waive
entirely the restrictions (including, without limitation, restrictions
relating to rights of first offer and reoffer, calls upon termination of
employment and sales, transfers and other dispositions of shares) set
forth in this Agreement which relate to Management Investors and which
do not relate to Outside Investors. Any such approval may be revoked by
the Board at any time without notice and such revocation shall be
effective with respect to any action, including any or all transfers or
proposed transfers, unless, prior to such revocation, the shares have
been presented to the transfer agent for the purpose of registering such
transfer, in proper form and satisfying the requirements of Section
8-401 of the Uniform Commercial Code or such other applicable law
relating to the duty of an issuer to register securities transfers.
The Board of Directors may delegate any and all authority it has
under this Agreement to any committee thereof and/or to any authorized
officer or agent.
4. RIGHTS OF FIRST OFFER AND REOFFER OF SHARES.
4.01 TRANSFERS BY MANAGEMENT INVESTORS.
(A) A Management Investor or Permitted Transferee may sell
shares of Common Stock, by complying with the terms of this Section 4.
The selling Management Investor shall first give written notice (a
"MANAGEMENT INVESTOR'S NOTICE") to ARAMARK stating such selling
Management Investor's desire to make such transfer, the number of shares
of Common Stock to be transferred (the "OFFERED MANAGEMENT SHARES"), and
the price which the selling Management Investor proposes to be paid for
the Offered Management Shares, which proposed price shall not be greater
than the Appraisal Price of (an equivalent number of) shares of Class B
Common Stock (the "FIRST OFFER PRICE").
(B) Upon receipt of the Management Investor's Notice, ARAMARK
shall have the irrevocable and exclusive option to buy up to all of the
Offered Management Shares at the First Offer Price; provided, however,
that ARAMARK shall not have the right to purchase any of the Offered
Management Shares unless either (i) ARAMARK purchases all such Offered
Management Shares, or (ii) such selling Management Investor consents to
the purchase of less than all of the Offered Management Shares.
ARAMARK's option under this Section 4.01(b) shall be
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exercisable by a written notice to such selling Management Investor,
given within 45 days from the date of receipt of the Management Investor's
Notice.
4.02 TRANSFERS BY OUTSIDE INVESTORS.
(A) An Outside Investor may sell shares of Common Stock,
including pursuant to the registration rights under Section 2.1 of
ARAMARK's Amended and Restated Registration Rights Agreement amended and
restated as of April 7, 1988 (the "REGISTRATION RIGHTS AGREEMENT"), by
complying with the terms of this Section 4. The selling Outside Investor
shall first give written notice (a "SELLER'S NOTICE") to ARAMARK stating
such selling Outside Investor's desire to make such transfer, the number
of shares of Common Stock to be transferred (the "OFFERED INVESTORS'
SHARES"), and the price which the selling Outside Investor proposes to
be paid for the Offered Investors' Shares (the "FIRST OFFER INVESTORS'
PRICE").
(B) Upon receipt of the Seller's Notice, ARAMARK shall have the
irrevocable and exclusive option to buy up to all of the Offered
Investors' Shares at the First Offer Investors' Price; provided,
however, that ARAMARK shall not have the right to purchase any of the
Offered Investors' Shares unless either (i) ARAMARK purchases all such
Offered Investors' Shares, or (ii) such selling Outside Investor
consents to the purchase of less than all of the Offered Investors'
Shares. ARAMARK's option under this Section 4.02(b) shall be
exercisable by a written notice to such selling Outside Investor, given
within 45 days from the date of the receipt of Seller's Notice.
4.03 TRANSFER OF OFFERED SHARES TO THIRD PARTIES. If the Management
Investor's Notice or the Seller's Notice (collectively, the "NOTICE")
required to be given pursuant to Section 4.01 or 4.02, as the case may
be, has been duly given, and ARAMARK determines not to exercise its
option to purchase the Offered Management Shares or the Offered
Investors' Shares (collectively, the "OFFERED SHARES") or determines
(with the consent of the Stockholder who has made the First Offer) to
exercise its option to purchase less than all the Offered Shares, then
the Stockholder who has made such First Offer shall be free, for a
period of 90 days from the earlier of (i) the expiration of the option
period with respect to such First Offer pursuant to Section 4.01 or
4.02, as the case may be, or (ii) the date such Stockholder shall have
received written notice from ARAMARK stating that ARAMARK intends not to
exercise in whole or in part the option granted under Section 4.01 or
4.02, as the case may be, to sell to any third-party Transferees the
remaining Offered Shares, at a price equal to or greater than the First
Offer Price, in the case of Management Investors or their Permitted
Transferees, and the First Offer Investors' Price, in the case of
Outside Investors; provided, however, that the Transferee complies with
the provisions of Section 2.03; and provided further that, in the case
where such selling Stockholder is a Management Investor or a Permitted
Transferee, such Transferee shall have been approved by ARAMARK as a
suitable investor in a privately-owned services management company.
ARAMARK shall not unreasonably withhold or delay such approval.
Anything herein to the contrary notwithstanding, the 90-day period
described in this Section 4.03 shall be extended until the completion of
all sales pursuant to a registration statement, a request for which was
made substantially concurrently with the Notice.
4.04 REOFFERS. In the event the proposed purchase price of a
third-party Transferee for the Offered Shares is less than the First
Offer Price or the First Offer Investors' Price, as the case may be, the
Stockholder desiring to sell at such lesser price shall not sell or
otherwise transfer any of the Offered Shares unless such selling
Stockholder shall first reoffer the Offered Shares at such lesser price
to ARAMARK by giving written notice (the "REOFFER NOTICE") to ARAMARK of
such selling Stockholder's intention to make such transfer at such lower
price (the "REOFFER PRICE"). ARAMARK shall then have an irrevocable and
exclusive option to purchase all or part of the Offered Shares at the
Reoffer Price, exercisable in the same manner as provided in Section
4.01 or 4.02, as the case may be. In the event ARAMARK does not then
elect to purchase all the remaining Offered Shares, or ARAMARK elects
(with the consent of the Stockholder desiring to sell) to purchase less
than all the remaining Offered Shares, the remaining Offered Shares may
be sold by such selling Stockholder within 30 days following the earlier
of (i) the expiration of the option period with respect to such Reoffer
pursuant to Section 4.01 or 4.02, as the case may be, or (ii) the last
date on which such selling Stockholder shall have received written
notice from ARAMARK stating that ARAMARK intends not to exercise in
whole or in part the option granted in this Section 4.04, at a price
equal to or greater than the Reoffer Price; provided, however, that the
Transferee complies with the provisions of Section 2.03; and provided
further that, in the case where such selling Stockholder is a Management
Investor or a Management Investor's Permitted Transferee, such
Transferee shall have been approved by ARAMARK
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as a suitable investor in a privately-owned services management
company. ARAMARK shall not unreasonably withhold or delay such approval.
4.05 WAITING PERIOD WITH RESPECT TO SUBSEQUENT TRANSFERS. In the
event that ARAMARK does not exercise its option to purchase any or all
of the Offered Shares at the First Offer Price or the First Offer
Investors' Price, as the case may be, or at the Reoffer Price, and the
Stockholder desiring to sell shall not have sold the remaining Offered
Shares to any Transferee for any reason before the expiration of the 30
day period described in Section 4.04 in the event of a Reoffer, or, if
no Reoffer Notice is given, the 90 day period described in Section 4.03,
then such selling Stockholder shall not sell any shares of Common Stock
to any Transferee or other Stockholder (other than to Permitted
Transferees pursuant to Section 3.01) at any price for a period of three
months from the last day of such 30 or 90 day period, as the case may
be.
4.06 NO SALES OF CONTROL.
(A) Subject to Section 4.06(b) and except as provided in
Section 3.03 (transfers approved by the Board of Directors), no Person
or group of Persons, as defined in Section 13 (d) (3) of the Securities
Exchange Act of 1934 (the "EXCHANGE ACT"), including for the purposes of
this paragraph as part of such Person's group, Transferees pursuant to
Section 3.01, shall become (whether through the purchase of shares
pursuant to this Agreement or otherwise or through any other action) the
holder, directly or indirectly, of 10% or more of either the outstanding
shares of Class A Common Stock or the outstanding shares of Class B
Common Stock. Any transaction resulting in a violation of this Section
4.06(a) shall be void, and of no effect against ARAMARK, and ARAMARK
shall not record any such purported transfer on its books. Two or more
Stockholders owning in the aggregate 10% or more of such outstanding
shares shall not be deemed to be a group of Persons for the purposes of
this Section 4.06 solely because such Stockholders are parties to this
Agreement or because such Stockholders are related by blood or marriage
and/or because such Stockholders are officers or directors of ARAMARK.
(B) The provisions of Section 4.06(a) shall not apply to the
acquisition by ARAMARK, directly or indirectly, of shares of Common
Stock, notwithstanding that as a result of such acquisition any Person
or group of Persons acting in concert would own 10% or more of such
outstanding shares subsequent to such an acquisition, but shall apply to
any subsequent acquisition or other action by such Person or group of
Persons.
4.07 FORM OF CONSIDERATION FOR SHARES. No offer to purchase or to
sell shares of Common Stock shall be deemed to be a valid offer under
this Section 4 unless the purchase price of such offer is payable in
cash or securities that can be readily valued by reference to quoted
trading prices. The purchase price of shares upon exercise of an option
under this Section 4 in respect of a Notice which specifies only cash as
the form of consideration shall be payable only in cash.
4.08 MERGER TRANSACTION. Subject to any applicable provisions of
the Certificate of Incorporation or any loan agreement or instruments to
which ARAMARK is a party, ARAMARK may enter into any agreement of merger
to merge with or into any other corporation; and, in such event,
Sections 4.01 through 4.07 of this Agreement shall not be applicable to
such merger and all shares may be transferred for such consideration as
approved by the Board of Directors and the Stockholders in accordance
with applicable law.
4.09 TRANSFERS IN A PUBLIC OFFERING. In the event a request is made
under Section 2.1 of the Registration Rights Agreement for a demand
registration, then the procedures set forth in Sections 4.02 through
4.05 shall be modified in the following respects:
(A) Such request shall also provide the information required to
be stated in a Seller's Notice, and shall also constitute a Seller's
Notice.
(B) Prior to the expiration of the 21 day period under the
Registration Rights Agreement within which ARAMARK is to file a
registration statement covering the shares the holder of which requested
a demand registration, ARAMARK shall have the irrevocable and exclusive
option to buy all (and only all) of the Offered Investors' Shares at the
First Offer Investors' Price, which shall be the proposed public
offering price after reduction for commissions, discounts and the like.
(C) In the event the public offering price (after reduction for
commissions, discounts and the like) is more than 10% lower than the
First Offer Investors' Price, or the number of shares included in the
offering is reduced to less than 75% of the shares as to which the
Seller's Notice was delivered (otherwise than by reason of a cut down by
the Underwriter) then Section 4.04 shall apply,
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but such section shall not otherwise apply to any sale pursuant to a
registration statement.
(D) In the event all of the Offered Investors' Shares are
elected to be purchased, the demand registration shall be held
in abeyance pending the closing of such purchase in accordance
with this Agreement.
5. PUT OF SHARES UPON DEATH, COMPLETE DISABILITY OR NORMAL
RETIREMENT.
5.01 PUT IN EVENT OF DEATH, COMPLETE DISABILITY OR NORMAL
RETIREMENT. Subject to any instruments or agreements of ARAMARK from
time to time in effect restricting or otherwise governing the repurchase
or retirement of shares of ARAMARK's capital stock (the "LOAN
AGREEMENTS") and to applicable law, unless a Call pursuant to Section
6.01 shall have been exercised by ARAMARK, upon the death, Complete
Disability or Normal Retirement of any Investor Group member, at the
option of such Investor Group member, such Investor Group member's
estate, heirs or personal representative, and such Investor Group
member's Permitted Transferees (other than Permitted Transferees
specified in Section 3.01(A)(ii)) (collectively, the "HOLDERS" of such
Investor Group member's shares) and within 30 days of receipt by ARAMARK
of a Seller's Notice from such Holders, which notice must be given
within 30 days from the date of the appointment of a personal
representative of such Investor Group member, the date he or she became
Completely Disabled, or the date of his or her Normal Retirement,
ARAMARK shall purchase from such Holders the shares of Common Stock held
by such Holders specified in such Seller's Notice up to 30% of such
shares so held at a purchase price determined in accordance with Section
5.02. ARAMARK shall be under no obligation to purchase such shares
unless it shall have received a Seller's Notice from such Holders in
accordance with this Section 5.01.
5.02 PURCHASE PRICE OF PUT SHARES. The purchase price for the
shares of Common Stock purchased pursuant to Section 5.01 shall be the
Appraisal Price of (an equivalent number of) shares of Class B Common
Stock, for the shares of a Holder of a Management Investor's shares, and
shall be the Appraisal Price of shares of Class A Common Stock for the
shares of a Holder of an Individual Investor's shares. ARAMARK shall
satisfy its obligation to purchase shares upon the exercise of any Put
granted under Section 5.01 with cash.
6. CALL OF SHARES UPON TERMINATION OF EMPLOYMENT.
6.01 CALL IN EVENT OF TERMINATION. Unless the shares of Common
Stock held by a Management Investor and his or her Permitted Transferees
have been earlier sold pursuant to Section 4 (rights of first offer and
reoffer), including the earlier recording of the transfer of such shares
on the books of ARAMARK, ARAMARK shall have an exclusive and irrevocable
option, at any time and from time to time during the period of 10 years
following the termination of employment of such Management Investor for
any reason whatsoever (including without limitation death, Complete
Disability or Normal Retirement) to make a purchase or purchases of up
to all of the shares of Common Stock owned by such Management Investor
and his or her Permitted Transferees, at a purchase price, with respect
to any such exercise, determined in accordance with Section 6.02.
6.02 PURCHASE PRICE. The purchase price per share for any shares of
Common Stock purchased pursuant to Section 6.01 shall be the lesser of
(i) the Appraisal Price of (an equivalent number of) shares of Class B
Common Stock at the time ARAMARK gives notice that it is exercising its
Call option and (ii) the Appraisal Price of (an equivalent number of)
shares of Class B Common Stock at the date of termination of employment,
plus in the case where ARAMARK gives notice it is exercising its Call
option more than 120 days after the date of termination of employment,
8% simple interest on such amount from the date of termination of
employment through the date ARAMARK gives notice that it is exercising
its Call option. ARAMARK shall satisfy its obligations to purchase
shares upon the exercise of such Calls with cash up to the least of
$100,000, or the Management Investor's highest annual base salary as an
employee of ARAMARK, or 10% of the aggregate purchase price for such
Called shares and, at the Company's option, with cash and/or Promissory
Notes valued at their principal amount for the remainder.
7. INVOLUNTARY TRANSFER OF SHARES.
7.01 CERTAIN INVOLUNTARY TRANSFERS; SELLER'S NOTICE. Except for
involuntary transfers (by foreclosure or otherwise) to ARAMARK of shares
of Common Stock pledged to ARAMARK, in the event a Stockholder shall
involuntarily transfer directly or indirectly any or all of his or her
shares, for any reason other than as a result of those events
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specified in Section 6, such Stockholder shall give written notice
within 30 days of such involuntary transfer (the "STOCKHOLDER NOTICE") to
ARAMARK, with a copy to the Transferee, stating the fact that the
involuntary transfer occurred, the reason therefor, the date of the
transfer, the name and address of the Transferee and the number of shares
acquired by the Transferee (the "ACQUIRED SHARES"). For purposes of this
Section 7 an involuntary transfer shall include, without limitation, a
court-ordered transfer, constructive trust or other device designed to
transfer economic benefit of share ownership.
7.02 RIGHT TO REPURCHASE. For a period of 60 days from the date of
receipt of the Stockholder Notice or, failing receipt of such notice, 60
days from the date ARAMARK sends written notice to the Transferee that
the transfer is deemed to be an involuntary transfer subject to
repurchase under this Agreement, ARAMARK shall have an irrevocable and
exclusive option to buy all of the Acquired Shares, exercisable in the
same manner as provided in Section 4.01, and the provisions of such
applicable Section shall be followed in their entirety except that the
purchase price shall be as provided in Section 7.03.
7.03 PURCHASE PRICE. The purchase price for shares purchased
pursuant to Section 7.02 shall be payable in cash and shall be equal to
the Appraisal Price of (an equivalent number of) shares of Class B
Common Stock at the time ARAMARK gives notice that it is exercising its
Call option.
8. LIMITED ACCESS TO INFORMATION.
8.01 NO DUTY TO DISCLOSE INFORMATION. Each of the parties to this
Agreement acknowledges and agrees that it is in the best interests of
ARAMARK and the Stockholders taken as a whole for ARAMARK to be able to
conduct orderly transactions in Common Stock on a continual basis
(including in connection with the internal market and repurchases upon
termination of employment and otherwise), and for ARAMARK concurrently
to be able to consider from time to time on a confidential basis
potential transactions which could affect the fair market value and/or
the Appraisal Price of the Common Stock. Each of the parties to this
Agreement acknowledges and agrees that, at the time of a sale by a
Stockholder of shares of Common Stock pursuant to this Agreement, there
may have occurred or be proposed or pending an event or a transaction
that could affect the Appraisal Price of the Common Stock, and that the
Appraisal Price of the Common Stock (and, accordingly, the repurchase
price) may be substantially less than the fair market value as of the
current date, and further acknowledges and agrees that ARAMARK may have
valid business reasons not to, and in any case shall not be required to,
disclose any event or transaction that may have occurred or be proposed
or pending at the time of any such sale.
8.02 SALE OF ARAMARK FOLLOWING CALL. In the event that any entity,
person, or any group of persons acting in concert (excluding the
Management Investors as a group), acquires in any manner shares of
Common Stock with 50% of the ordinary voting rights of the outstanding
shares of Common Stock or in the event of the redemption or repurchase
of all the shares of Common Stock in connection with a sale of all or
substantially all the assets of ARAMARK, or the winding up, dissolution
or liquidation of ARAMARK, within 90 days from the date of a sale
pursuant to Section 6.01 then, subject to the Loan Agreements, ARAMARK
and/or the purchaser of such shares of Common Stock with 50% of the
ordinary voting rights of the outstanding shares of Common Stock shall
pay to the Holders whose shares have been so purchased the excess, if
any, of the amount per share realized by ARAMARK's stockholders upon
such acquisition, redemption, repurchase, winding up, dissolution or
liquidation over the purchase price per share paid to such Holders
pursuant to Section 6 less the interest paid on any Promissory Notes
paid as consideration for such stock and less a financing cost for
carrying such stock for any cash received, based on an interest rate
equal to the rate paid by ARAMARK under the Loan Agreements at the date
of payment hereunder, for the period from the date of payment to such
Holders pursuant to Section 6 to the date of such acquisition,
redemption, repurchase, winding up, dissolution or liquidation, for each
share purchased by ARAMARK. Determination of whether or not any such
payment is appropriate, and the amount of such payment, shall be made by
the Board of Directors; and such determination shall be conclusive and
binding on all parties hereto.
9. NO RIGHT TO CONTINUED EMPLOYMENT. Neither this Agreement nor the
ownership of Common Stock by a Management Investor shall confer upon any
Management Investor any right to continue in the employ of ARAMARK or
any of its Subsidiaries or limit in any respect the right of ARAMARK or
its Subsidiaries to terminate his or her employment at any time.
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10. CLOSING.
10.01 CLOSING DATE; PURCHASE PRICE. Any selling Stockholder and
ARAMARK, as purchaser, of shares of Common Stock pursuant to Section 4,
5, 6 or 7 shall mutually determine a closing date (the "CLOSING DATE")
which, unless this Agreement otherwise explicitly provides, shall be not
more than 60 business days after ARAMARK gives notice that it will
purchase such shares; provided, however, that absent agreement, the
Closing Date shall be the business day determined by ARAMARK. In
respect of shares of Common Stock distributed by any employee benefit
plan upon termination of employment, the Closing Date shall be such date
selected by ARAMARK consistent with the orderly administration of such
plan.
Notwithstanding anything in this Agreement to the contrary, the
Closing Date may be delayed in any case in which ARAMARK cannot, in
compliance with the Loan Agreements or applicable law, purchase any
shares of Common Stock that it is otherwise obligated to purchase until
the earliest practicable date when such closing may be effected in
compliance with such Loan Agreements or applicable law. The closing
shall be held at 11:00 a.m., local time, at the offices of ARAMARK or at
such other time or place as the parties may agree.
The determination date of the Appraisal Price shall be appropriately
changed if the Closing Date is delayed in accordance with the foregoing
paragraph.
10.02 SHARES NO LONGER OUTSTANDING. If a selling Stockholder shall
fail to deliver the certificates representing the shares of Common Stock
to be sold or shall otherwise fail to perform any obligation required to
be performed at the closing and ARAMARK shall have been ready to
purchase such shares at the closing, then effective at the closing, such
shares shall no longer be deemed to be outstanding, and all rights of
the holder thereof as stockholder of ARAMARK (except the right to
receive from ARAMARK the purchase price therefor) shall cease.
10.03 DELIVERIES AT CLOSING; METHOD OF PAYMENT OF PURCHASE PRICE.
On the Closing Date, any selling Stockholder shall deliver certificates
with appropriate transfer tax stamps affixed and with stock powers
endorsed in blank, representing the shares of Common Stock to be
purchased, and ARAMARK, as purchaser shall deliver to such Stockholder
the purchase price which is payable in cash (or by wire transfer or
check) and the other consideration, if any, to be given in exchange for
such shares. In addition, if the person selling shares is the personal
representative of a deceased Stockholder, the personal representative
shall also deliver to the purchaser or purchasers (i) copies of letters
testamentary or letters of administration evidencing his or her
appointment and qualification, (ii) a certificate issued by the Internal
Revenue Service pursuant to Section 6325 of the Code discharging the
shares being sold from liens imposed by the Code and (iii) an estate tax
waiver issued by the state of the decedent's domicile.
11. TERM. The terms and provisions of this Agreement which relate
to Management Investors may be terminated by an instrument in writing
signed by Management Investors who hold, in combination with their
Permitted Transferees, at least the majority of the Common Stock held by
Management Investors and their Permitted Transferees and by ARAMARK.
The terms and provisions of this Agreement which relate to Outside
Investors shall terminate on April 7, 2008 or, if earlier, on the
closing date of the first to occur of (i) any merger or other business
combination of ARAMARK with or into any other corporations, except a
merger or other business combination in which the stockholders of
ARAMARK immediately prior thereto constitute more than a majority of the
stockholders (by value of equity securities held) following such merger,
and (ii) the sale of shares of Class A Common Stock to the public
pursuant to an underwritten, registered public offering under the
Securities Act of 1993, as amended (the "SECURITIES ACT") as a result of
which offering the public (including for this purpose all purchasers in
the underwriting irrespective of any relationship with ARAMARK) owns 10%
or more of the outstanding shares of Class A Common Stock, provided such
shares have a fair market value equal to at least $25,000,000 at the
time of the offering.
Notwithstanding the foregoing, the restrictive terms and provisions
set forth herein with respect to the rights and obligations of
Management Investors shall terminate, effective upon or after the
occurrence of a public offering pursuant to clause (ii) above, to the
extent the existence of such terms and provisions would impair the
ability of ARAMARK to list its Common Stock on the New York Stock
Exchange or, in the written opinion of the lead underwriter,
significantly impair the value of the Common Stock proposed to be sold
in a public offering.
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12. REGISTRATION OF COMMON STOCK. In the event of any registration
under the Securities Act and public offering of Common Stock, each
Stockholder shall, at a meeting convened for the purpose of amending the
Certificate of Incorporation, vote to increase the authorized number of
shares of Common Stock and, if necessary, to subdivide the outstanding
shares of Common Stock of ARAMARK, in both instances as recommended by a
majority of the members of the Board in order to effectuate such public
offering.
13. INJUNCTIVE RELIEF. It is acknowledged that it will be
impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on
them and that in the event of any such failure, an aggrieved person will
be irreparably damaged and will not have an adequate remedy at law. Any
such person shall, therefore, be entitled to injunctive relief,
including specific performance, to enforce such obligations, and if any
action should be brought in equity to enforce any of the provisions of
this Agreement, none of the parties hereto shall raise the defense that
there is an adequate remedy at law.
14. NOTICES. All notices, statements, instructions or other
documents required to be given hereunder, shall be in writing and shall
be given either personally, or by mailing the same in a sealed envelope,
first-class mail, postage prepaid, addressed to ARAMARK at its principal
offices to the attention of the General Counsel and to the other parties
at their addresses reflected in the stock records of ARAMARK, or sent by
telegram, telex, telecopy or similar form of telecommunication. Each
Stockholder, by written notice given to ARAMARK in accordance with this
Section 14 may change the address to which notices, statements,
instructions or other documents are to be sent to such Stockholder. All
notices, statements, instructions and other documents hereunder that are
mailed shall be deemed to have been given on the date of mailing.
15. COOPERATION. ARAMARK agrees that it will use all reasonable
efforts under the circumstances to help any Stockholder desiring to
dispose of its Common Stock pursuant to the provisions of this Agreement
to do so.
16. MISCELLANEOUS.
16.01 SUCCESSOR AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties, and their respective
successors and assigns. The provisions of this Agreement are for the
sole benefit of the parties hereto and their heirs, executors,
administrators, legal representatives, successors and assigns, and they
shall not be construed as conferring any rights on any other persons.
If any Transferee of any Stockholder shall acquire any shares of Common
Stock, in any manner, whether by operation of law or otherwise, such
shares shall be held subject to all of the terms of this Agreement, and
by taking and holding such shares such person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement.
ARAMARK may assign to any other Person its rights with respect to
any specific transaction pursuant to Section 4, 5, 6 or 7, provided that
Person complies with the provisions of Section 2.03.
16.02 GOVERNING LAW. Regardless of the place of execution, this
Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware applicable to agreements made and to be wholly
performed in such State.
16.03 HEADINGS. Paragraph headings are inserted herein for
convenience only and do not form a part of this Agreement.
16.04 ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the
entire agreement among the parties hereto with respect to the
transactions contemplated herein, supersedes all prior written
agreements and negotiations and oral understandings, if any, and may not
be amended, supplemented or discharged except by performance or by an
instrument in writing signed by the holders of at least three-fourths of
the Common Stock held by the Institutional and Individual Investors
(taken as a whole), and by Management Investors who hold (in combination
with their Permitted Transferees) at least a majority of the Common
Stock held by Management Investors and their Permitted Transferees, and
by ARAMARK. In the event of the amendment or modification of this
Agreement in accordance with its terms, the Stockholders shall cause the
Board of Directors of ARAMARK to meet within 30 days following such
amendment or modification or as soon thereafter as is practicable for
the purpose of amending the Certificate of Incorporation and By-Laws of
ARAMARK, as may be required as a result of such amendment or
modification, and proposing such amendments to the stockholders of
ARAMARK entitled to vote thereon, and such action shall be the
A-10
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
<PAGE>
first action to be taken at such meeting.
This amended and restated Agreement shall become effective upon the
later of (i) December 14, 1994 and (ii) the date ARAMARK has received
and holds duly executed (and not previously rescinded) instruments in
writing approving such amended and restated Agreement from the required
parties as provided in this Section 16.04.
16.05 INSPECTION. A copy of this Agreement shall be filed with the
Secretary of
ARAMARK and kept with the records of ARAMARK and shall be made
available for inspection by any stockholder of ARAMARK at the principal
offices of ARAMARK.
16.06 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[Signature Pages Omitted]
A-11
AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
<PAGE>
EXHIBIT A
(to Amended and Restated
Stockholders' Agreement)
THIS NOTE IS NOT TRANSFERABLE UNLESS AS A CONDITION PRECEDENT TO
THE EFFECTIVENESS OF ANY TRANSFER THE PAYEE HAS OBTAINED THE WRITTEN
CONSENT OF THE COMPANY AS TO THE PROPOSED TRANSFER.
$_________________________
Philadelphia, Pennsylvania
____________________, 19__
SUBORDINATED INSTALLMENT NOTE
1. For value received, ARAMARK CORPORATION (formerly The ARA Group,
Inc. and ARA Holding Company), a Delaware corporation (the "COMPANY"),
hereby promises to pay to __________ (the "PAYEE") the sum of $_____ in
_______ equal, annual installments of $______ and one final installment
of $______ on each [April/October] 15 commencing on [April/October] 15,
19__, and to pay simple interest at the rate of ___% per annum on the
unpaid balance thereof, semi-annually in arrears on each April 15 and
October 15.
2. The Payee may not sell, assign or otherwise transfer or encumber
any portion of this Note or interest herein without first procuring the
written consent of the Company, which consent the Company is under no
obligation to provide. No transfer of this Note shall be effective
unless such transfer is in compliance with the foregoing, including the
requirements set forth in the legend provided for above.
3. Both the principal of this Note and interest thereon are payable
in lawful money of the United States of America at 1101 Market Street,
Philadelphia, PA 19107, or such address of any subsequent principal
executive office of the Company within the United States of America as
the Company shall designate in writing to the Payee, or at the option of
the Company, by check mailed to the Payee at such address for the Payee
as is indicated on the books of the Company.
4. This Note may be prepaid in full, or in part, any time, without
premium or penalty. All prepayments shall be applied first to accrued
interest and then to installments of principal in the order of their
maturities.
5. The indebtedness evidenced by this Note and the payment of the
principal of and interest on this Note are hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, to
the prior payment in full of all Senior Indebtedness.
5.1 "SENIOR INDEBTEDNESS" means the principal of, premium, if any,
interest and any other amounts due on (1) all Indebtedness incurred,
assumed or guaranteed by the Company, either before or after the date
hereof, (excluding any debt which by the terms of the instrument
creating or evidencing the same is not superior in right of payment to
this Note), including, without limitation, (a) any amount payable with
respect to any lease, conditional sale or installment sale agreement or
other financing instrument or agreement which in accordance with
generally accepted accounting principles is, at the date hereof or at
the time the lease, conditional sale or installment sale agreement or
other financing instrument or agreement is entered into, or assumed or
guaranteed by, directly or indirectly, the Company, required to be
reflected as a liability on the face of the balance sheet of the
Company, (b) any amounts payable in respect to any interest rate
exchange agreement, currency exchange agreement or similar agreement and
(c) any subordinated indebtedness of a corporation merged with or into or
<PAGE>
acquired by the Company; and (2) any renewals or extensions or
refunding of any such Senior Indebtedness or evidences of indebtedness
issued in exchange for such Senior Indebtedness.
5.2 "INDEBTEDNESS" means (a) all items, except items of capital
stock or of surplus or of general contingency reserves or of reserves
for deferred income taxes, which in accordance with generally accepted
accounting principles in effect on the date hereof should be included in
determining total liabilities as shown on the liability side of a
balance sheet of the Company as at the date of which Indebtedness is to
be determined, (b) all indebtedness secured by any mortgage, pledge,
lien or conditional sale or other title retention agreement existing on
any property or asset owned or held by the Company, whether or not such
indebtedness shall have been assumed, and (c) all indebtedness of others
which the Company has directly or indirectly guaranteed, endorsed,
discounted or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire, or in respect of which the Company has
agreed to supply or advance funds or otherwise to become liable directly
or indirectly with respect thereto, including, without limitation,
indebtedness arising out of the sale or transfer of accounts or notes
receivable or any moneys due or to become due.
6. In the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether voluntary or involuntary and
whether in bankruptcy, insolvency or receivership proceedings, or upon
an assignment for the benefit of creditors or any readjustment of debt,
arrangement or composition among creditors or any other marshalling of
the assets and liabilities of the Company or otherwise), then holders of
Senior Indebtedness shall first be paid in full, or provision made for
such payment, before any payment or distribution, directly or indirectly
(including by way of set off) is made upon the principal of or interest
on this Note, and to that end the holders of Senior Indebtedness shall
be entitled to receive in payment thereof any payment or distribution of
assets of the Company, whether in cash or property or securities, which
may be payable or deliverable in any such proceeding in respect of this
Note. The Payee irrevocably authorizes, empowers and directs all
receivers, custodians, trustee, liquidators, conservators and others
having authority in the premises to effect all such payments and
deliveries. Notwithstanding any statute, including without limitation
the Federal Bankruptcy Code, any rule of law or bankruptcy procedures to
the contrary, the right of the holders of the Senior Indebtedness to
have all of the Senior Indebtedness paid and satisfied in full prior to
the payment of any amounts due the payee under this Note shall include,
without limitation, the right of the holders of the Senior Indebtedness
to be paid in full all interest accruing on the Senior Indebtedness due
them after the filing of any petition by or against the Company in
connection with any bankruptcy or similar proceeding or any other
proceeding referred to in paragraph 6 hereof, prior to the payment of
any amounts in respect of the Note, including, without limitation, any
interest due to the Payee accruing after such date.
7. No payment, directly or indirectly (including by way of set off),
shall be made by the Company with respect to the principal of or
interest on this Note if (i) an event of default has happened with
respect to any Senior Indebtedness, as defined therein or in the
instrument under which the same is outstanding which if occurring prior
to the stated maturity of such Senior Indebtedness, permits holders
thereof upon the giving of notice or passage of time, or both, to
accelerate the maturity thereof ("SENIOR INDEBTEDNESS DEFAULT") and has
not been cured, (ii) a payment by the Company to or for the benefit of
Payee would, immediately after giving effect thereto, result in a Senior
Indebtedness Default, or (iii) full payment of all amounts then due for
principal of (or premium, if any), interest or any other amounts due on
Senior Indebtedness shall not then have been made or duly provided for.
Upon the occurrence of any events described in (i), (ii) or (iii)
described above, notwithstanding any event of default under this Note by
the Company, the Payee may not accelerate the maturity of all or any
portion of this Note, or take any action towards collection of all or
any portion of this Note or enforcement of any rights, powers or
remedies under this Note, or applicable law until the earlier of the
date on which a Senior Indebtedness Default (or in the case of (iii)
required payments shall have been duly provided for) have been cured or
such Senior Indebtedness has been paid in full.
8. In the event that, notwithstanding the foregoing, the Company
shall make any payment prohibited by Section 6 or 7, then, except as
hereinafter in this Section otherwise provided, unless and until any
such Senior Indebtedness Default shall have been cured or waived or
shall cease to exist, such payment shall be held in trust for the
benefit of and shall be paid over to the holders of Senior Indebtedness
or their representative or representatives or to the trustee or trustees
under any indenture
2
EXHIBIT A TO AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
<PAGE>
under which any instrument evidencing the Senior Indebtedness may have
been issued, as their respective interests may appear, to the extent
necessary to pay in full all Senior Indebtedness then due, after giving
effect to any concurrent payment to the holders of such Senior
Indebtedness.
9. Subject to the payment in full of all Senior Indebtedness at the
time outstanding, the Payee shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until this
Note shall be paid in full, and no payments or distributions to the
holders of Senior Indebtedness by or on behalf of the Company from the
proceeds that would otherwise be payable to the Payee, or by or on
behalf of the Payee, shall as between the Company and the Payee, be
deemed to be a payment by the Company to or for the account of holders
of Senior Indebtedness.
10. No holder of Senior Indebtedness shall be prejudiced in his or
her right to enforce subordination of this Note by any act on the part
of the Company. The above provisions in regard to subordination are
intended solely for the purpose of defining the relative rights of the
Payee on the one hand, and the holders of Senior Indebtedness, on the
other hand, and nothing contained in this Note is intended to or shall
impair, as between the Company, its creditors other than the holders of
Senior Indebtedness and the Payee, the obligation of the Company, which
is absolute and unconditional, to pay to the Payee, subject to the
rights of the holders of Senior Indebtedness, the principal of and
interest on this Note as and when the same shall become due and payable
in accordance with its terms, subject to the rights, if any, under the
above subordination provisions, of holders of Senior Indebtedness to
receive cash, property or securities of the Company payable in respect
thereof.
11. The principal of this Note and accrued unpaid interest thereon
shall (if not already due and payable) upon written demand by the Payee
become due and payable forthwith, if there shall have been a default in
the payment of any interest on, or principal of, this Note when it
becomes due and payable (but only if such payment is not prohibited by
the provisions of this Note), and such default shall have continued for
a period of 30 days after written notice of such default shall have been
given to the Company and shall be continuing at the time of such written
demand.
12. No course of dealing between the Company and the Payee or any
delay on the part of the Payee in exercising any rights under this Note
shall operate as a waiver of any rights of the Payee.
13. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered, or
deposited in the mails, first-class, postage prepaid, or delivered to a
telegraph office for transmission, if to the Payee, at such address for
the Payee as is indicated on the books of the Company or if to the
Company, at the address of the principal executive offices of the
Company as provided above.
14. This Note shall be governed by the laws of the State of
Delaware.
ARAMARK CORPORATION
By: ______________________
Treasurer
21761
3
EXHIBIT A TO AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
<PAGE>
ISPO
GENERAL INSTRUCTIONS TO FORMS
In this section, you will find the forms that you will need in order to
complete all of your stock-related transactions. Several copies of each form
have been included. These forms have been color-coded for ease of reference.
As you complete the forms, have your Ownership Statement handy, as you will
need to transfer information from it onto the form(s). Alternatively, you can
use the Stock Exercise Wizard and Personalized Data form to produce the
Exercise and Deferred Obligation Note forms.
We urge you to carefully read this Prospectus, as well as all of the other
materials you have received, so that you will be fully informed of the terms
and conditions of the stock purchase program and the payment options available
to you.
- ------------------------------------------------------------------------
| EMPLOYEES BASED IN QUEBEC: En signant le formulaire d'exercice |
| d'option, je confirme mon souhait expres que tous les documents, |
| certificts, avid et conventions directement ou indirectement, relies |
| a l'acquisition de valeurs mobilieres d'ARAMARK (incluant le |
| formulaire d'exercice d'option) et tous les documents qui y sont |
| integres par renvoi (incluant la convention entre actionnaires) |
| soient rediges en langue anglaise. |
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
THERE ARE UP TO FOUR WAYS TO FINANCE YOUR STOCK PURCHASE UNDER THE
PROGRAM. OF COURSE, YOU MAY CHOOSE TO USE A COMBINATION OF THE
METHODS LISTED BELOW.
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEFERRED INTERNAL
CASH PAYMENT MARKET STOCK-FOR-STOCK
- ------------------------------------------------------------------------------------------------------------------
WHO IS All grant holders. Those exercising the All owners who have Owners who have held
ELIGIBLE? 2nd, 3rd, 4th, 5th, held shares at least shares at least 6 months.
or 6th installments 6 months from Can be used for any ISPO
of a grant. purchase or from installment. Only
stock-for-stock available to employees
exchange date. in U.S. and Canada.
- ------------------------------------------------------------------------------------------------------------------
WHAT IS IT? Payment in full Postponing payment Selling shares back Exchanging shares
at the time of of up to 90% of your to the company and you own (at the
exercise. purchase amount, applying all or part current appraisal
including of the proceeds price), for new ones
withholding taxes toward the purchase (at your grant
(% varies by of more shares. exercise price).
installment number).
Interest, due at the
end of the deferral
period, will be
charged.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
For a summary of the forms to be completed based on the types of transactions,
please see the reverse side of this page.
(OVER)
<PAGE>
ISPO
GENERAL INSTRUCTIONS TO FORMS (CONT.'D)
THE FOLLOWING CHART LISTS THE FORMS TO BE COMPLETED AND RETURNED ACCORDING TO
THE INSTRUCTIONS AT THE BOTTOM OF THE EXERCISE FORM.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THIS TRANSACTION... | COMPLETE AND SUBMIT THESE FORMS... | AND ALSO SEND IN...
- -------------------------|--------------------------------------------------------------------------|------------------------------
| | | | | | | Stock
| | Deferred | | Direct | | |Certificates or
| | Payment | | Deposit | | | Confirmation
| | Obligation | | Authorization| | Your | Statements
| | Note(2) - On | Internal | Form For | | Check Payable| For Shares To
| | Reverse Of | Market | Internal | Stock-For- | To ARAMARK | Be Sold,
| Exercise | Note | Request Form/| Market | Stock | For Any | Exchanged,
| Form(1) | Worksheet | Worksheet (3)| Sales(5) | Worksheet(6)| Balance(4) | or Held
- -------------------------|---------------|--------------|--------------|--------------|-------------|--------------|---------------
Stock Exercise | | | | | | (checkmark) |
(Purchase) | (checkmark) | | | | | |
- -------------------------|---------------|--------------|--------------|--------------|-------------|--------------|---------------
Deferred Payment | (checkmark) | (checkmark) | | | | (checkmark) |
- -------------------------|---------------|--------------|--------------|--------------|-------------|--------------|---------------
Bank Loan | (checkmark) | (checkmark) | | | | (checkmark) |
| | (WORKSHEET | | | | |
| | ONLY) | | | | |
- -------------------------|---------------|--------------|--------------|--------------|-------------|--------------|---------------
Stock Sale(3) (If | (checkmark) | | (checkmark) | (checkmark) | | (checkmark) | (checkmark)
applied to purchase) | | | | | | |
- -------------------------|---------------|--------------|--------------|--------------|-------------|--------------|---------------
Stock-For-Stock Exercise | (checkmark) | | | | (checkmark) | (checkmark) | (checkmark)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Complete a separate form for each exercise (either from the Prospectus
or Stock Exercise Wizard).
(2) For multiple transactions, compile onto one form from Prospectus per
registered owner, or submit Deferred Obligation Note produced by the
Stock Exercise Wizard. (Note: If shares are held jointly in your and
your spouse's names, that is considered as one owner.)
(3) Compile onto one form per registered owner. If you are not applying
proceeds toward a purchase, only submit the Internal Market form and
the Stock Certificate(s) (or confirmation statement) for the shares
you are selling.
(4) Contact the person listed for your country on Page B-4.
(5) U.S. employees only.
(6) Compile onto one form per registered owner.
SEE PAGE B-4, CONTACT LIST AND MAILING INSTRUCTIONS, FOR PAYMENT AND
MAILING INSTRUCTIONS AS WELL AS THE DATE THAT YOUR EXERCISE FORMS AND
PAYMENT MUST BE RECEIVED BY ARAMARK OR YOUR COUNTRY'S HEADQUARTERS, IF
APPLICABLE.
<PAGE>
ISPO
EXERCISE FORM - SEE GENERAL INSTRUCTIONS, PAGE B-1
SECTION I - WORKSHEET (EXPIRES 1/15/00)
<TABLE>
<CAPTION>
- ------------------------------------
| DETERMINING YOUR COST FOR SHARES |
- ------------------------------------
<S> <C> <C>
DEFINITION SOURCE
---------- ------
1 Grant Date ............................. Ownership Statement ....................... 1 ______
2 This Year's Installment Number ......... Ownership Statement ....................... 2 ______
3 Number of Shares Now Exercisable ....... Ownership Statement ....................... 3 ______
4 Grant Price Per Share .................. Ownership Statement ....................... 4 $_____
5 Number of Shares You Want To Exercise .. Minimum 100 - Maximum can't exceed Line 3.. 5 ______
6 TOTAL COST OF SHARES ................ Line 4 x Line 5 ........................... 6 $_____
- ------------------------
| CALCULATING YOUR TAX |
- ------------------------
7 Current Appraisal Price Per Share
(December 1999 Quarterly Appraisal) ... ........................................... 7 $15.20
8 Appraisal Price x Shares Exercised .... Line 5 x Line 7 ........................... 8 $_____
9 Total Appreciation Subject To Taxes ... Line 8 - Line 6 ........................... 9 $_____
10 Total Withholding Tax Due At Purchase.. Line 9 x .38 (Canada-based employees
enter "0") ................................ 10 $_____
11 TOTAL AMOUNT DUE ................... Line 6 + Line 10 .......................... 11 $_____
- -----------------------------------------------------------------
| DETERMINING YOUR DEFERRAL - INSTALLMENTS 2, 3, 4, 5 OR 6 ONLY |
| (ALSO COMPLETE WHITE DEFERRED PAYMENT OBLIGATION NOTE) |
- -----------------------------------------------------------------
12 Payment Amount You Want To Defer ...... Line 6, White Deferred Payment Worksheet... 12 $_____
13 Balance After Deferral ................ Line 11 - Line 12 ......................... 13 $_____
- ----------------------------------------------
| EXCHANGING OR SELLING SHARES OR BANK LOANS |
- ----------------------------------------------
14 Number Of Shares Exchanged (U.S. and
Canada Employees Only)................. Line 6, gray Stock-For-Stock Worksheet .... 14 ______
15 Appraisal Price x Shares Exchanged .... Line 7, gray Stock-For-Stock Worksheet .... 15 $_____
16 Proceeds From Internal Market - Enclose
certificates & green worksheet ........ Line 5, green Internal Market Worksheet ... 16 $_____
17 Proceeds From Authorized Bank Loan
For This Exercise (If applicable) ..... Bank Name _________________________________ 17 $_____
(Be sure to complete Items 11 and 12 on white Deferred Payment Obligation Worksheet)
- --------------------
| EXERCISE SUMMARY |
- --------------------
18 TOTAL CASH DUE (EVERYONE MUST COMPLETE): Line 13 - Line 15 - Line 16 - Line 17 ..... 18 $_____
19 EMPLOYEES OUTSIDE U.S. AND CANADA:
Currency Exchange Rate* ............... Units of your country's currency
per U.S. Dollar ........................... 19 ______
20 EMPLOYEES OUTSIDE U.S. AND CANADA:
Total Cash Due (send check for this
amount in your own country's currency
to the contact person listed on
page B-4) ............................. Line 18 x Line 19 (Local Currency)......... 20 ______
21 SHARES EXERCISED ...................... Line 5 .................................... 21 ______
22 SHARES EXCHANGED - Enclose Certificates
And Gray Worksheet .................... Line 14 ................................... 22 ______
23 NUMBER OF NEW SHARES ACQUIRED ......... Line 21 - Line 22 ......................... 23 ______
- -------------------------------------------------------------------------------------------------
COMPANY USE ONLY FOR EMPLOYEES OUTSIDE THE U.S. AND CANADA (OPTIONAL)
24 Withholding Tax Paid By Employee ...... Lesser of Line 10 and Line 18 ............. 24 $_____
25 Withholding Tax Payable By
Parent Company ........................ Line 10 - Line 24 ......................... 25 $_____
26 Withholding Tax Payable To
Local Government ...................... Line 19 x (Line 24 + Line 25)
(Local Currency) .......................... 26 ______
27 Purchase Price Paid By Employee ....... Line 18 - Line 24 ......................... 27 $_____
28 Net Due To (From) Parent Company ...... Line 27 - Line 25 ......................... 28 $_____
29 Employee's Taxable Income From Exercise Line 9 x Line 19 (Local Currency) ......... 29 ______
- -------------------------------------------------------------------------------------------------
*Available from contact listed on page B-4, or reverse side of this form for Contact List
and Mailing Instructions.
</TABLE>
SECTION II - REGISTRATION AND SIGNATURES
SHARES MUST BE REGISTERED INITIALLY EITHER IN YOUR NAME OR IN THE NAMES OF YOU
AND YOUR SPOUSE, AS JOINT TENANTS. IF SHARES ARE TO BE REGISTERED JOINTLY IN
THE NAMES OF BOTH YOU AND YOUR SPOUSE, YOU MUST PRINT BOTH NAMES BELOW, ENTER
BOTH OF YOUR SOCIAL SECURITY NUMBERS, IF APPLICABLE, AND YOU BOTH MUST SIGN.
IF YOU ARE DEFERRING PAYMENT, YOU (AND YOUR SPOUSE, IF APPLICABLE) MUST ALSO
COMPLETE AND SIGN THE DEFERRED PAYMENT OBLIGATION FORM. YOUR SHARES WILL BE
REGISTERED TO THE ADDRESS TO WHICH THE PROSPECTUS CONTAINING THE EXERCISE FORM
WAS MAILED. IF YOU HAVE MOVED OR THE ADDRESS IS OTHERWISE INCORRECT, PLEASE
COMPLETE AND RETURN THE BLUE ADDRESS CHANGE CARD.
I/We hereby represent, warrant, and agree as follows:
A. I/We have received and read copies of (a) the Prospectus dated December 1,
1999, including the Amended and Restated Stockholders' Agreement and (b)
ARAMARK's annual report on Form 10-K.
B. I/We have full power and authority to enter into the Amended and Restated
Stockholders' Agreement.
C. By signing below, I/We hereby execute and deliver and agree to be bound by
the Amended and Restated Stockholders' Agreement.
D. I/We will, upon request, execute any additional documents necessary or
desirable for me/us to become a party to the Amended and Restated
Stockholders' Agreement.
E. By signing below, I/we agree to permit additional amounts to be withheld
and/or refunded in subsequent pay periods to meet tax withholding calculated
by the company.
PRINT NAME(S) SIGNATURE(S) SOCIAL SECURITY NUMBER DATE
____________________ ___________________ ________________________ _________
____________________ ___________________ ________________________ _________
HOME PHONE #: ___________________ BUSINESS PHONE #: _________________
BUSINESS UNIT: __________________ COMPONENT #: ______________________
SEE PAGE B-4 OR REVERSE SIDE OF THIS FORM, CONTACT LIST AND MAILING
INSTRUCTIONS, FOR PAYMENT AND MAILING INSTRUCTIONS AS WELL AS THE DATE THAT
YOUR EXERCISE FORMS AND PAYMENT MUST BE RECEIVED BY ARAMARK OR YOUR COUNTRY'S
HEADQUARTERS, IF APPLICABLE.
11/99 EXPIRATION: JANUARY 15, 2000
<PAGE>
CONTACT LIST AND MAILING INSTRUCTIONS
EMPLOYEES IN THE UNITED STATES, PUERTO RICO, VIRGIN ISLANDS, AND CANADA -
Exercise materials must be received by ARAMARK by January 15, 2000. Payment
must be made to ARAMARK in U.S. dollars.
CONTACT: MAIL TO:
Shareholder Services Group First Union National Bank, N.A.,
1-888-96-OWNER Shareholder Services Group
(1-888-966-9637) ... at one of the following addresses:
IF USING REGULAR MAIL:
P. O. Box 13675
Philadelphia, PA 19101-9024
IF USING CERTIFIED/RETURN RECEIPT
OR OVERNIGHT MAIL:
123 South Broad Street, MCPA 1328
Philadelphia, PA 19109
- ------------------------------------------------------------------------------
For the countries listed below, contact the representative indicated to obtain
the exchange rate and specific instructions regarding your stock transactions.
Exercise materials and payment must be received by that ARAMARK location no
later than January 10, 2000.
UNITED KINGDOM AND SCOTLAND
- ---------------------------
Contact: Gordon Campbell Mail to: Gordon Campbell
Phone: 011-44-1189-596761 ARAMARK Plc
FAX: 011-44-1189-580039 Honey End Lane, Tilehurst,
E-Mail: [email protected] Reading, Berks RG30 4QL,
England
GERMANY AND CZECH REPUBLIC
- --------------------------
Contact: Uli Boepple Mail to: Uli Boepple
Phone: (xx49/61-02) 745-280 ARAMARK GmbH
FAX: (xx49/61-02) 745-200 Martin - Behaim - Strasse 6,
E-Mail: [email protected] 63263 Neu Isenburg,
Germany
BELGIUM
- -------
Contact: Jean-Paul Fajgenblat Mail to: Jean-Paul Fajgenblat
Phone: 02/663.49.40 ARAMARK Belgium
FAX: 02-663.49.60 Europe House, Rue Maurice
E-mail: [email protected] Charlent, 53, 1160
BRUXELLES, Belgium
MEXICO
- ------
Contact: Jorge Dominguez Mail to: Jorge Dominguez
Phone: 011-525-281-5080 ARAMARK , Mexico, S.A. De C.V.
FAX: 011-525-280-9661 Alejandro Dumas 145, Colonia Palanco
E-Mail: [email protected] 11560, Mexico, D.F.
SPAIN
- -----
Contact: Miguel A. Vazquez Mail to: Miguel A. Vazquez
Phone: 011-34-93-240-2141 ARAMARK Spain
FAX: 011-34-93-240-2450 c/.Aribau, 200-210
E-Mail: [email protected] E-08036 BARCELONA, Spain
<PAGE>
ISPO
DEFERRED PAYMENT OBLIGATION - SEE GENERAL INSTRUCTIONS, PAGE B-1
=====================================================================
| INSTRUCTIONS |
| |
| 1. Insert the Total Amount Being Deferred (Line 7 from the |
| Deferred Payment Obligation Note Worksheet on the reverse) in |
| the first paragraph below. |
| |
| 2. Insert the Total Shares Pledged to ARAMARK (Line 18 from the |
| Deferred Payment Obligation Note Worksheet on the reverse) in |
| the second paragraph below. |
| |
| 3. PRINT AND SIGN YOUR NAME EXACTLY AS ON THE NOTE WORKSHEET |
| AND APPLICABLE EXERCISE FORMS. IF YOUR SPOUSE SIGNED THE |
| EXERCISE FORM, HE/SHE MUST ALSO SIGN THIS DEFERRED PAYMENT |
| OBLIGATION FORM. By signing this form, your spouse joins in |
| the agreement you are making to pay the amount of the Deferred |
| Payment Obligation. |
=====================================================================
I/We promise to pay to the order of ARAMARK CD Company (a subsidiary of
ARAMARK Corporation) if deferring less than $5,000 or ARAMARK Corporation
if deferring $5,000 or more, $_____________, and to pay interest from
January 15, 2000 at the rate of 8.5% per year, simple interest. Payment of
the deferred obligation and interest will be due March 15, 2003, or on
demand by the applicable payee, and may be prepaid at any time.
I/We grant to the applicable payee a security interest in ______________
shares of ARAMARK Common Stock (the "Pledged Shares") and agree that the
Pledged Shares will be held as collateral by the applicable payee until the
amount is paid in full. I/We understand and agree that, with respect to
the Pledged Shares, ARAMARK Corporation will comply with instructions from
the applicable payee without my/our further consent. If the amount is not
paid when due, the applicable payee will be entitled to exercise the legal
remedies available under applicable law. If any of the Pledged Shares are
to be sold or otherwise transferred, then the amount will become due
immediately.
This agreement may be assigned by the applicable payee at any time and will
be governed by the laws of the Commonwealth of Pennsylvania.
__________________________________ __________________________________
(Print Name) (Print Name)
__________________________________ __________________________________
(Signature) (Signature)
_________________ _________________
(Date) (Date)
SEE PAGE B-4, CONTACT LIST AND MAILING INSTRUCTIONS, FOR PAYMENT AND
MAILING INSTRUCTIONS AS WELL AS THE DATE THAT YOUR FORMS AND PAYMENT MUST
BE RECEIVED BY ARAMARK OR YOUR COUNTRY'S HEADQUARTERS, IF APPLICABLE.
EXPIRATION: JANUARY 15, 2000
<PAGE>
ISPO
DEFERRED PAYMENT OBLIGATION NOTE WORKSHEET
ALL DEFERRED PAYMENT OBLIGATIONS MUST BE IN SAME REGISTRATION NAME.
COMPLETE SEPARATE WORKSHEET AND NOTE PER REGISTRATION.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Registration Name (Please print) Social Security/Account # Date
________________________________________________________ _____________________________________ __________
| | | | | |
|______________________________________________________| |___________________________________| |________|
Use one Column for each exercise
involving a Deferred Payment
Obligation
-----------------------------------
| Exercise |
-----------------------------------
LINE # SOURCE #1 #2 #3 #4 #5
-----------------------------------
1 Grant Date Line 1 on beige exercise form | | | | | |
-----------------------------------
-----------------------------------
2 Installment # Line 2 on beige exercise form | | | | | |
-----------------------------------
-----------------------------------
3 Total Amount Due Line 11 on beige exercise form | | | | | |
-----------------------------------
-----------------------------------
4 Maximum Percent Select applicable percent based | | | | | |
Deferral Allowed upon answer on line 2 -----------------------------------
Installment #2 - 25%
Installment #3 - 50%
Installment #4, 5, and 6 - 90%
5 Maximum Dollar Line 3 multiplied by Line 4 -----------------------------------
Deferral Allowed | | | | | |
-----------------------------------
6 Actual Amount Cannot exceed Line 5. Enter on -----------------------------------
You Want to Defer Line 12 of beige exercise form | | | | | |
-----------------------------------
TOTAL PAYMENT AMOUNT YOU WANT TO DEFER TO BE POSTED TO THE DEFERRED PAYMENT
OBLIGATION NOTE.
7 Total Amount being Add all amounts on Line 6.
Deferred Record this amount on the reverse ----------
side of this Deferred Obligation | |
Note as the total amount being deferred. 7 ----------
----------
CALCULATION OF SHARES TO BE HELD BY ARAMARK FOR DEFERRED PAYMENT OBLIGATION | |
8 Minimum Value of Collateral Required (Line #7 multiplied by 1.33) 8 ----------
9 Current Appraisal Price Per Share (December 1, 1999 appraisal price) 9 $15.20
----------
10 Number of Shares Needed as Collateral (Line #8 divided by | |
Line #9; round up to next whole share) 10 ----------
11 Bank providing Name of bank recorded on Line #17 of beige exercise form 11__________________________
loan (if applicable)
----------
12 Number of shares required by outside bank (per bank documentation) from | |
current exercises to be held as collateral. 12 ----------
-----------------------------------
| | | | | |
13 Shares being Line 23 of beige exercise form 13 -----------------------------------
acquired in
each exercise
----------
14 Total shares Add Line 13 for all exercises | |
being acquired 14 ----------
----------
15 Shares remaining from current exercises available for | |
use as collateral (Line 14 minus Line 12) 15 ----------
----------
16 Additional shares, if any, needed to collateralize ARAMARK deferral (Line 15 less Line 10) | |
If the result is zero or more, enter result on Line 16A 16A ----------
----------
| |
If the result is less than 0 (meaning you have a collateral shortage), 16B ----------
enter result on Line 16B and complete Line 17 until Line 17G equals Line 16B
Cert/Conf# #shares
17 Other shares to be Identify other previously ------------ ------------
pledged to ARAMARK acquired shares that are to 17A ____________ ____________
be held by ARAMARK by 17B ____________ ____________
Certificate or 17C ____________ ____________
Confirmation #. Shares 17D ____________ ____________
cannot be pledged for 17E ____________ ____________ ----------
any other deferred 17F ____________ ____________ | |
obligation or loan Total 17A through 17F ................ 17G ----------
18 Total Shares ----------
Pledged to ARAMARK Line 17G + Line 15 (must equal Line 10) | |
Record this amount on reverse as Total 18 ----------
Shares Pledged to ARAMARK
</TABLE>
THIS COMPLETED FORM AND UNSIGNED STOCK CERTIFICATES ON LINE 17 MUST BE
SUBMITTED AND RECEIVED IN ACCORDANCE WITH THE INSTRUCTIONS ON PAGE B-4 OR
ON THE REVERSE SIDE OF THE EXERCISE FORM.
EXPIRATION : January 15, 2000
<PAGE>
ISPO
SECTION I - INTERNAL MARKET SALE REQUEST FORM
(USE ONE FORM PER REGISTERED OWNER.)
INSTRUCTIONS: In this Section, you will be listing the certificate number(s)
shown on the Certificate Profile Report that you are enclosing, indicating the
number of shares listed on each, and the number of shares you would like to
sell.
NAME(S) (PLEASE PRINT): ACCOUNT # ("HID" NUMBER ON CERTIFICATE
PROFILE REPORT):
- ------------------------------------- --------------------------------------
| | | |
| | | |
| ------------------------------ | | ------------------------------- |
- ------------------------------------- --------------------------------------
-----------------------------------
| SALE OF COMMON SHARES - CLASS B |
-----------------------------------
NO. OF SHARES TO
NO. OF SHARES SHOWN BE SOLD FROM THIS
LINE CERTIFICATE/RECEIPT ON THE CERTIFICATE CERTIFICATE/
NO. NUMBER ENCLOSED PROFILE REPORT RECEIPT NUMBER
---- ------------------- ------------------- -----------------
Example: U99-1234* 1,000 750
- ------------------------------- ------------------- -----------------
1 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
2 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
3 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
4 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
5 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
6 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
7 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
8 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
9 | | | | | |
| | | | | |
- --------|---------------------| |-----------------| |---------------|
10 | | | | | |
| | | | | |
- ------------------------------- ------------------- -----------------
TOTAL SHARES SHOWN TOTAL SHARES TO
(ADD LINES 1 BE SOLD (ADD LINES
THROUGH 10) 1 THROUGH 10)
------------------- -----------------
A | | B | |
------------------- -----------------
(COPY B TO LINE 1
ON REVERSE SIDE)-->
- -----------------------------------------------------
TOTAL COMMON SHARES LEFT | | |
OVER (A - B = C) | C | |
- -----------------------------------------------------
NOTE: Shares used in a stock-for-stock exchange or purchased within the prior
six (6) months CANNOT be sold.
*Shares that do not begin with a "U" are certificated and stock certificates
MUST BE ATTACHED.
COMPLETE SECTIONS II AND III ON REVERSE SIDE OF THIS FORM.
FORM: B EXPIRATION: JANUARY 15, 2000
<PAGE>
ISPO
SECTION II - INTERNAL MARKET WORKSHEET - SEE GENERAL INSTRUCTIONS
PLEASE COMPLETE THE REVERSE SIDE FIRST. (USE ONE FORM PER REGISTERED OWNER.)
- ------------------------- ----------------------
| SALE OF COMMON SHARES | ACCOUNT # | |
- ------------------------- ----------------------
1 Number of Common Shares to be Sold
(Section I - Line B): ............................. 1 ______
2 Sale Price Per Common Share (December 1, 1999
Appraisal Price): ................................. 2 $15.20
3 Total Sale Price of Common Shares
(Line 1 x Line 2) ................................. 3 $_____
NOTE: IF SHARES TO BE SOLD ARE PLEDGED UNDER A PRIOR DEFERRED PAYMENT
OBLIGATION, LINES 4A, B, AND C MUST ALSO BE COMPLETED.
- ----------------------------------
| DISTRIBUTION OF TOTAL PROCEEDS |
- ----------------------------------
4 AMOUNT TO BE APPLIED TO PAY OFF RELATED DEFERRED PAYMENT OBLIGATION (write
"N/A" if not applicable). Call the ARAMARK Shareholder Services Group at
1-888-96-OWNER to obtain the exact amounts of Principal Due and Accrued
Interest Due.
Note number(s) to be paid off ....#______________
(a) Principal Due: 4(A)$_____
(b) Accrued Interest Due: 4(B)$_____
Total Deferred Payment Due (Line 4a + Line 4b):.... 4(C)$_____
5 AMOUNT TO BE APPLIED TO THE PURCHASE OF NEW SHARES
(a) Grant Date:__________ ......................... 5(A)$_____
(b) Grant Date:__________ ......................... 5(B)$_____
(c) Grant Date:__________ ......................... 5(C)$_____
(d) Grant Date:__________ ......................... 5(D)$_____
(e) Total (Lines 5a + 5b + 5c + 5d): .............. 5(E)$_____
6 AMOUNT TO BE APPLIED TO PAYOFF BANK
LOAN AT ________________; LOAN #_______________ 6 $_____
7 ESTIMATED CASH BACK TO YOU (Line 3 minus Line 4c
minus Line 5e minus Line 6) (For both the Deferred
Payment Program and bank loans, loan payoffs will be
calculated based on the date the sale is processed.) 7 $_____
8 TOTAL DISTRIBUTION (Line 4c + Line 5e + Line 6 +
Line 7) Total must equal Line 3: ................. 8 $_____
SECTION III - INTERNAL MARKET REQUEST FORM
- --------------
| SIGNATURES |
- --------------
By signing below, you are offering to sell to ARAMARK the shares indicated on
Line 1, subject to the terms and conditions of the Internal Market. You also
are acknowledging that: you have full authority to sell the shares; you have
received and read Form 10-K for fiscal 1999; you are under no obligation to
sell; and the offer price is the most recent appraisal price, reflecting the
shares' current lack of marketability and is substantially less than it would
be if the shares were publicly traded. The Board reserves the right to reduce
on a pro rata basis the number of Class B shares sold by all management owners
in the Internal Market, depending upon the overall number of Class B shares
submitted to the Company for sale. Subject to complying with applicable laws
and regulations (including SEC Rule 13e-3), the Company will not repurchase
shares of Class B Common stock from any stockholder if the repurchase causes
such shares to be held-of-record by less than 300 holders.
PLEASE SIGN BELOW EXACTLY AS YOUR NAME(S) APPEARS ON THE STOCK CERTIFICATE(S)
OR CERTIFICATE PROFILE REPORT.
PRINT NAME(S) SIGNATURE(S) DATE
_________________________________________________________________________
_________________________________________________________________________
Mailing Address: _______________________________________________________
Daytime Phone Number: _________________________
Please indicate payment method you would prefer (if not completed a
check will be issued):
Check /___/ (checkbox) Direct Deposit /___/ (checkbox)
(Complete attached Direct Deposit Authorization form.)
THE COMPLETED FORMS AND STOCK CERTIFICATES, IF ANY, MUST BE RECEIVED AT THE
SHAREHOLDER SERVICES GROUP NO LATER THAN JANUARY 15, 2000. (IF CERTIFICATES
WERE NOT SENT TO YOU FOR THE SHARES, ATTACH A COPY OF THE CERTIFICATE PROFILE
REPORT IN LIEU OF CERTIFICATES.) Send the form(s), stock certificate(s) or
Certificate Profile Report to: First Union National Bank, N.A., Shareholder
Services Group, P.O. Box 13675, Philadelphia, PA 19101-9024, or 123 South
Broad Street, Floor 11-MBO MCPA 1328, Philadelphia, PA 19109. If you are
selling shares in the Internal Market in order to exercise and purchase
shares, please refer to the Prospectus Contact List and Mailing Instructions.
EXPIRATION: JANUARY 15, 2000
<PAGE>
=========================================
| DIRECT DEPOSIT AUTHORIZATION FORM FOR |
| ARAMARK INTERNAL MARKET SALES |
=========================================
*****DIRECT DEPOSITS CAN ONLY BE MADE INTO ACCOUNTS
HELD AT UNITED STATES BANKS*****
Please attach a voided check and fill in the information below.
PLEASE PRINT CLEARLY
- -------------------------------------------------------------------------
NAME OF FINANCIAL INSTITUTION BANK PHONE NUMBER
- ------------------------------------
TRANSIT ROUTING NUMBER
--------------------------------
| --> Attach Voided Check Here |
TYPE OF ACCOUNT: --------------------------------
CHECKING /___/ (checkbox) SAVINGS /___/ (checkbox)
____________________________________
BANK ACCOUNT NUMBER
_______________________________________________________________________
BANK ACCOUNT NAME (OWNER[S] OF THE BANK ACCOUNT)
=========================================================================
| I /We hereby authorize ARAMARK to initiate a credit entry to my/our |
| account indicated above. |
| |
| _____________________________________________________________________ |
| SIGNATURE OF REGISTERED OWNER OF STOCK DATE |
| |
| _____________________________________________________________________ |
| SIGNATURE OF REGISTERED OWNER OF STOCK DATE |
| |
| _____________________________________________________________________ |
| DAYTIME PHONE NUMBER E-MAIL ADDRESS |
| |
| FIRST UNION NATIONAL BANK WILL CONTACT YOU ONCE YOUR DEPOSIT |
| HAS BEEN MADE. AT THAT TIME, PLEASE CONTACT YOUR BANK TO |
| VERIFY YOU HAVE RECEIVED THE FUNDS. IF YOUR BANK ADVISES YOU |
| THAT THE FUNDS HAVE NOT BEEN RECEIVED, YOU SHOULD CALL FIRST |
| UNION NATIONAL BANK AT 1-888-96-OWNER. |
=========================================================================
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
ISPO
STOCK-FOR-STOCK WORKSHEET - See General Instructions, p. B-1
NOTE: STOCK-FOR-STOCK TRANSACTIONS ARE AVAILABLE FOR ALL INSTALLMENTS.
(USE ONE FORM PER REGISTERED OWNER.) STOCK-FOR-STOCK EXCHANGES ARE
ADVANTAGEOUS FOR ONLY U.S. AND CANADA BASED EMPLOYEES UNDER CURRENT TAX
LAWS, THEREFORE THEY ARE NOT AVAILABLE TO EMPLOYEES BASED IN COUNTRIES
OTHER THAN THE U.S. AND CANADA.
- ------------------------------------------------------------------------------
| EMPLOYEE NAME (PLEASE PRINT) | SOCIAL SECURITY OR ACCOUNT NUMBER | DATE |
| | | |
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
USE ONE COLUMN FOR EACH EXERCISE
INVOLVING A STOCK-FOR-STOCK EXCHANGE
---------------------------------------------
| EXERCISE* |
---------------------------------------------
LINE # DEFINITION SOURCE |#1 #2 #3 #4 #5 TOTAL
-------------------------------------------------------
1 Grant Date Grant Date on | | | | | | |
Exercise Form | | | | | | N/A |
-------------------------------------------------------
-------------------------------------------------------
2 This Year's Installment # on | | | | | | |
Installment # Exercise Form | | | | | | N/A |
-------------------------------------------------------
-------------------------------------------------------
3 Maximum Dollar Amount Cost of Shares on | | | | | | |
Eligible To Be Covered Exercise Form |$ | $ | $ | $ | $ | $ |
By Exchange | | | | | | |
-------------------------------------------------------
-------------------------------------------------------
4 Approximate Dollar Amount of Line 3 you | | | | | | |
Value Of Shares You wish to cover via | | | | | | |
Wish To Exchange Stock-For-Stock (can't |$ | $ | $ | $ | $ | $ |
exceed Line 3) -------------------------------------------------------
-------------------------------------------------------
5 Current Appraisal December Quarterly | | | | | | |
Price Per Share Appraisal |$15.20 | $15.20 | $15.20 | $15.20 | $15.20 | $15.20 |
-------------------------------------------------------
-------------------------------------------------------
6 Number Of Shares Line 4 (above) divided | | | | | | |
To Be Exchanged by Line 5 (above). | | | | | | |
Rounded down to | | | | | | |
next full share -------------------------------------------------------
(Transfer to Line 14 of Exercise Form
or to Exercise Wizard)
-------------------------------------------------------
7 Appraisal Price x Line 5 (above) x Line | | | | | | |
Shares Exchanged 6 (above) |$ | $ | $ | $ | $ | $ |
-------------------------------------------------------
(Transfer to Line 15 of Exercise Form
or to Exercise Wizard)
SHARE EXCHANGE SUMMARY
----------------------
NUMBER OF SHARES TO BE EXCHANGED
-------------------------------------------------------
CERTIFICATE SHARES SHOWN | |
NUMBER(S) ON THIS | |
ENCLOSED CERTIFICATE |#1 #2 #3 #4 #5 TOTAL |
--------------------------------------------------------------------------------------------
Note: Use additional | | | | | | | | |
Stock-For-Stock |--------------|---------------------|-------|--------|--------|--------|--------|---------|
Worksheets if you | | | | | | | | |
are submitting |--------------|---------------------|-------|--------|--------|--------|--------|---------|
more than 5 stock | | | | | | | | |
certificates |--------------|---------------------|-------|--------|--------|--------|--------|---------|
| | | | | | | | |
|--------------|---------------------|-------|--------|--------|--------|--------|---------|
| | | | | | | | |
--------------------------------------------------------------------------------------------
-------------------------------------------------------
| | | | | | |
TOTALS | | | | | | |
-------------------------------------------------------
-------------------------------------------------------
| MUST EQUAL LINE 6 ABOVE FOR EACH |
| EXERCISE AND IN TOTAL |
-------------------------------------------------------
</TABLE>
THIS COMPLETED FORM AND UNSIGNED STOCK CERTIFICATES MUST BE SUBMITTED AND
RECEIVED IN ACCORDANCE WITH THE CONTACT LIST AND MAILING INSTRUCTIONS ON
PAGE B-4 OR ON THE REVERSE SIDE OF THE EXERCISE FORM.
*Information from this form can be used in the Stock Exercise Wizard to
calculate and generate your Exercise Form.
EXPIRATION: JANUARY 15, 2000
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
