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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ARAMARK Corporation
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
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[GRAPHIC OMITTED]
Notice of Annual Meeting of Stockholders
To our stockholders:
ARAMARK Corporation will hold its annual stockholders meeting on the
sixteenth floor of ARAMARK Tower, 1101 Market Street, Philadelphia,
Pennsylvania, on Tuesday, February 8, 2000, at 3:00 p.m. Philadelphia time, for
the following purposes:
1. To elect directors for the ensuing year.
2. To transact such other business as may properly come
before the meeting.
The board of directors has fixed the close of business on December 22,
1999 as the record date for determination of the stockholders entitled to notice
of and to vote at the meeting. During the ten days prior to the meeting,
stockholders may examine a stockholder list for any purpose germane to the
meeting at ARAMARK's offices at ARAMARK Tower, 1101 Market Street, Philadelphia,
Pennsylvania.
You can vote your shares by using a toll-free telephone number or the
internet (or by fax from outside the United States). We have provided
instructions for using these convenient services on the proxy card. Of course,
you may also vote your shares by marking your votes on the proxy card, signing
and dating it, and mailing it in the envelope provided.
Whether or not you expect to attend the meeting in person, please vote
your shares in one of the ways described above.
Martin W. Spector
Executive Vice President
and Secretary
Dated: January 6, 2000
<PAGE>
[GRAPHIC OMITTED]
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
Solicitation by Board of Directors
We are furnishing this proxy statement in connection with the
solicitation by the board of directors of ARAMARK Corporation (ARAMARK or the
Company) of proxies for use at the annual stockholders meeting to be held on
February 8, 2000, and at any adjournment of the meeting. Stockholders may submit
proxies by mail or phone, or electronically via the internet (or by fax from
outside the United States) by following the instructions on the proxy card
included with this proxy statement. Stockholders who submit proxies may revoke
them at any time before they are voted by submitting a later-dated proxy, or by
delivering written notice of revocation to the Secretary of ARAMARK, or by
personally notifying the Secretary of ARAMARK at the meeting.
ARAMARK's executive offices are located at ARAMARK Tower, 1101 Market
Street, Philadelphia, Pennsylvania 19107 (telephone: 215-238-3000). We expect to
mail proxy cards and proxy statements to our stockholders on or about January 6,
2000.
Shares Outstanding and Voting Rights
Only holders of shares of class A common stock and class B common stock
of record at the close of business on December 22, 1999, are entitled to vote at
the meeting. On that date, 2,536,390 shares of common stock class A and
61,838,205 shares of common stock class B (together, the common stock) were
outstanding. Each holder of common stock entitled to vote will have the right to
one vote for each such share standing in his, her, or its name on the books of
ARAMARK.
All shares represented in person or by proxy will be counted for quorum
purposes. Where a stockholder does not specify a choice on a properly submitted
proxy, the shares will be voted as recommended by the board of directors. Where
a stockholder withholds a vote on the election of any director, such vote will
not be counted as entitled to vote (i.e., will not be counted as a vote cast)
with respect to that election. Abstentions will be counted as votes cast (i.e.,
will be counted as votes against) on any matter to which they relate.
<PAGE>
1. Election of Directors
Stockholders will elect nine directors by a plurality of the votes cast at
the meeting. The persons listed below are proposed to be elected to serve until
the next annual meeting of stockholders and the election and qualification of
their respective successors:
Joseph Neubauer Ronald R. Davenport
James E. Ksansnak Edward G. Jordan
Lawrence T. Babbio, Jr. Thomas H. Kean
Patricia C. Barron James E. Preston
Robert J. Callander
If, due to circumstances not now foreseen, any of the nominees becomes
unavailable for election, the proxy agents named in the proxies will have the
right to vote for a substitute in each case, or the board of directors will take
appropriate action to reduce the number of directors.
ARAMARK has agreed to use its best efforts to cause Mr. Neubauer's election
to, and retention on, ARAMARK's board during the term of Mr. Neubauer's
employment agreement. See "Employment Agreements and Change of Control
Arrangements."
Directors
<TABLE>
<CAPTION>
Name (Age as of November 1, 1999) Office Held (Committee) Since
- --------------------------------- ------------------------ -----
<S> <C> <C>
Joseph Neubauer (58)............................ Chairman and Director (1)(2)(3) 1979
James E. Ksansnak (59).......................... Vice Chairman and Director 1997
Lawrence T. Babbio, Jr. (54).................... Director 1999
Patricia C. Barron (56)......................... Director (1) 1997
Robert J. Callander (68)........................ Director (2)(3)(4)(5) 1986
Ronald R. Davenport (63)........................ Director (1)(4)(5) 1980
Edward G. Jordan (69)........................... Director (1)(2)(3) 1980
Thomas H. Kean (64)............................. Director (3)(4) 1994
James E. Preston (66)........................... Director (2)(3)(4) 1993
</TABLE>
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The numbers following the offices held by the directors indicate membership
in the following board committees during fiscal 1999:
1. Audit and Corporate Practices
2. Executive
3. Finance
4. Human Resources, Compensation and Public Affairs
5. Stock
Directors Meetings and Committees
ARAMARK's board of directors held six meetings during fiscal 1999. The
board has certain standing committees, which are described below. During fiscal
1999, each director attended at least 75% of the aggregate of all board meetings
and all meetings of committees on which he or she served.
The Audit and Corporate Practices Committee reviews the periodic financial
reports and the accounting principles used by ARAMARK and the adequacy of
ARAMARK's system of internal controls. It also reviews with the independent
public accountants and the internal audit department the scope of their audits,
their audit reports, and any recommendation made by them to determine whether
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these activities are reasonably designed to assure the soundness of accounting
and financial procedures. It recommends the action to be taken with respect to
the appointment of and approves the compensation of ARAMARK's independent public
accountants and monitors compliance with ARAMARK's business conduct policy. It
held four meetings during fiscal 1999.
The Executive Committee has the full power of the board of directors when
the board is not in session, with specific limitations relating to certain
corporate governance or other corporate matters. The committee did not hold any
meetings in fiscal 1999.
The Finance Committee reviews the overall financial plans of ARAMARK,
including capital expenditures, acquisitions and divestitures, securities
issuances and incurrences of debt, and the performance of ARAMARK's retirement
benefit plans. It recommends to the board specific transactions involving the
foregoing, and it has been empowered by the board to approve certain financial
commitments and acquisitions and divestitures by ARAMARK up to specified levels.
It held four meetings during fiscal 1999.
The Human Resources, Compensation and Public Affairs Committee consists
entirely of outside directors. The committee determines the base salary of each
of the chairman and chief executive officer and the president and chief
operating officer (subject to review and approval by the board) and approves the
salaries and bonuses paid to officers and other employees who are line of
business presidents or whose current or proposed base salary exceeds $200,000
per annum. It reviews appointments to senior management positions and the nature
and scope of ARAMARK's employee benefit plans. It also reviews and recommends
the compensation of outside directors and reviews ARAMARK's contribution policy
and practices for its retirement benefit plans. The committee is also authorized
to exercise ARAMARK's rights and powers under the Stockholders Agreement,
including approval of grants of stock purchase opportunities under the ARAMARK
Ownership Program as well as the annual approval of an internal market policy
providing for the repurchase of shares from management investors. It held five
meetings during fiscal 1999.
The Stock Committee consists of two outside directors. The committee has
concurrent authority, with the Human Resources, Compensation and Public Affairs
Committee, to approve specific transactions involving ARAMARK stock between
officers and directors and ARAMARK. It did not hold any meetings during fiscal
1999.
Business Experience
The principal occupations of ARAMARK's directors during the past five years
and other directorships currently held by the directors are as follows:
Mr. Neubauer has been chief executive officer of ARAMARK since February
1983 and the chairman since April 1984; he was president of ARAMARK from
February 1983 to May 1997. He is a director of Bell Atlantic Corporation, CIGNA
Corporation, Federated Department Stores, Inc., and First Union Corporation.
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Mr. Ksansnak has been vice chairman of ARAMARK since May 1997. From
February 1991 to May 1997, he was executive vice president of ARAMARK; from May
1986 to February 1991, he was senior vice president of ARAMARK; and from May
1986 to May 1997, he was chief financial officer of ARAMARK. He is a director of
Advanta Corp. and CSS Industries, Inc.
Mr. Babbio has been president and chief operating officer of Bell Atlantic
Corporation since December 1998. He was president and chief executive officer of
Bell Atlantic's Network Group and chairman of Bell Atlantic's Global Wireless
Group from August 1997 until December 1998. From January 1995 to August 1997 he
was vice chairman of Bell Atlantic Corporation and prior to that was executive
vice president and chief operating officer of Bell Atlantic. He is a director of
Bell Atlantic Corporation, Compaq Computer Corporation and Grupo Iusacell, S.A.
de C.V.
Ms. Barron has been clinical associate professor at the Leonard N. Stern
School of Business of New York University since September 1999 and prior to that
was an executive-in-residence and senior fellow. She was vice president of
Business Operations Support of Xerox Corporation from April 1997 to July 1998.
From 1995 to 1997, she was president of Engineering Systems of Xerox Corporation
and from 1992 to 1994, was president of Office Document Products of Xerox
Corporation. She is a director of Frontier Corporation, Quaker Chemical
Corporation, Reynolds Metals Company, and Teleflex Corporation.
Mr. Callander is executive-in-residence at the Business School of Columbia
University. He was president of Chemical Bank and Chemical Banking Corporation
from August 1990 to June 1992. He is a director of Barnes Group, Inc., Omnicom
Group Inc., Scudder Global High Income Fund, Scudder New Asia Fund, and The
Korea Fund Inc.
Mr. Davenport has been the chairman of Sheridan Broadcasting Corporation
since 1972.
Mr. Jordan was the chairman and chief executive officer of Consolidated
Rail Corporation from 1975 to 1981 and served as the president of The American
College from 1982 until 1987.
Former Governor Kean was the Governor of the State of New Jersey from 1982
until 1990. He has been the president of Drew University since 1990. He is a
director of Amerada Hess Corporation, Bell Atlantic Corporation, Fiduciary Trust
Company International, The Pepsi Bottling Group, Inc. and United Health Care
Corporation.
Mr. Preston was the chairman of Avon Products, Inc. from 1989 to 1999 and
president and chief executive officer from September 1988 until June 1998. He is
a director of Cyberian Outpost, Inc., Reader's Digest Association and Venator
Group, Inc.
Executive Compensation
The following table sets forth information with respect to the compensation
of the named executive officers for services in all capacities to ARAMARK in the
years indicated.
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Executive Compensation
<TABLE>
<CAPTION>
Stock All
Fiscal Annual Compensation Options Other
Name and Current Principal Position Year Salary Bonus(1) Granted(#)(2) Comp(3)
- ----------------------------------- ---- ------ ------ ------------- -------
<S> <C> <C> <C> <C> <C>
Joseph Neubauer 1999 $999,000 $1,100,000 0 $37,000
Chairman and Chief Executive Officer 1998 $948,000 $1,000,000 0 $13,500
1997 $900,000 $800,000 0 $6,000
William Leonard 1999 $549,000 $550,000 0 $6,500
President and Chief Operating Officer 1998 $500,000 $500,000 0 $6,500
1997 $437,500 $400,000 240,000 $6,000
Charles E. Kiernan 1999 $447,500 $729,000 500,000 $6,500
Executive Vice President and
President, Food and Support Services
L. Frederick Sutherland 1999 $390,000 $275,000 0 $6,500
Executive Vice President and 1998 $364,000 $235,000 0 $6,500
Chief Financial Officer 1997 $347,000 $200,000 150,000 $6,000
Brian G. Mulvaney 1999 $325,000 $275,000 0 $6,500
Executive Vice President, Human 1998 $259,000 $217,000 300,000 $6,500
Resources and Public Affairs 1997 $230,000 $140,000 120,000 $6,000
</TABLE>
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1. The bonus amount for Mr. Kiernan for fiscal 1999 includes a special
one-time bonus of $409,000 in connection with his hire in October 1998.
2. Adjusted for stock split effected in the form of a stock dividend
effective September 1, 1998.
3. Other compensation includes employer contributions to the Stock Unit
Retirement Plan, plus with respect to Mr. Neubauer for fiscal 1999 and
1998, the value of interest foregone and not recaptured by ARAMARK
relating to payment of premiums for split dollar life insurance.
Stock Purchase Opportunities
The following table sets forth information with respect to the named
executive officers concerning individual grants of stock purchase opportunities
made in fiscal 1999.
Options Granted in Fiscal 1999
(Stock Purchase Opportunities)
<TABLE>
<CAPTION>
Potential
Realizable Value at
Percentage of Assumed Annual Rates of
Total Options of Stock Price Appreciation
Granted to All for Option Term(2)
Options Employees in -------------------------------
Name Granted(1) Fiscal 1999 5% 10%
---- -------- ----------- -- ---
<S> <C> <C> <C> <C>
Joseph Neubauer 0 0.0% $0 $0
William Leonard 0 0.0% $0 $0
Charles E. Kiernan 500,000 10.2% $1,080,404 $2,339,948
L. Frederick Sutherland 0 0.0% $0 $0
Brian G. Mulvaney 0 0.0% $0 $0
</TABLE>
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1. See "The ARAMARK Ownership Program." The options granted to Mr. Kiernan
comprise 200,000 cumulative installment stock purchase opportunities
(CISPOs) and 300,000 installment stock purchase opportunities (ISPOs). All
were granted in October 1998 at a per share exercise price of $11.25, which
was the appraisal price of the shares at the time of grant. The CISPOs
expire on January 15, 2004 and the ISPOs expire on varying dates through
January 15, 2004.
2. Realizable value refers to the assumed appraisal price of the underlying
shares at the time such purchase opportunity expires minus the exercise
price.
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The following table sets forth information with respect to the named
executive officers concerning the exercise of options in fiscal 1999 and the
unexercised options held as of October 1, 1999.
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
(Stock Purchase Opportunities)
<TABLE>
<CAPTION>
Number of Options Held Current Value of Options Held(2)
Shares -------------------------- --------------------------------
Acquired on Value Currently Not Currently Currently Not Currently
Name Exercise Realized(1) Exercisable Exercisable Exercisable Exercisable
---- -------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph Neubauer 0 $0 0 600,000 $0 $5,820,000
William Leonard 82,500 $634,950 0 264,000 $0 $2,262,000
Charles E. Kiernan 30,000 $19,500 0 470,000 $0 $1,386,500
L. Frederick Sutherland 108,500 $819,730 0 340,000 $0 $3,217,000
Brian G. Mulvaney 89,766 $654,742 0 441,750 $0 $3,031,575
</TABLE>
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1. Value realized refers to the appraisal price of the underlying
shares at the time the option was exercised minus the exercise
price of the option.
2. Options currently exercisable and current values of options are
determined as of October 1, 1999. Current value of an option
refers to the appraisal price of the underlying shares minus the
exercise price of the option.
Five Year Cumulative Total Shareholder Return
The following graph compares the five year cumulative return of class B
common stock (measured by the appraisal price) to the Standard & Poor's 500
Stock Index and the Dow Jones Consumer Non-Cyclical Index.
Five Year Cumulative Total Shareholder Return
[GRAPH]
Cumulative total return is stated as a percentage of the base year (1994)
stock price. Cumulative total return in a given year equals (i) the cumulative
amount of dividends paid since the base year, assuming dividend reinvestment,
plus the year-end stock price, (ii) divided by the base year stock price.
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Dow Jones
Consumer
Fiscal Year ARAMARK S&P 500 Non-Cyclical
----------- ------- ------- ------------
1994 100.00 100.00 100.00
1995 113.11 129.54 135.69
1996 126.46 155.97 176.23
1997 156.21 218.37 236.22
1998 263.47 239.47 275.51
1999 332.55 306.01 281.48
The ARAMARK Ownership Program
The ARAMARK Ownership Program is designed 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 continuing
interest in the future success of ARAMARK's business. Under the Ownership
Program, direct ownership in ARAMARK has increased from 62 original management
investors in December 1984 to more than 2,000 management investors owning more
than 70% of the equity. At October 1, 1999, management employees and directors
held stock purchase opportunities and options for 20,529,608 shares.
ARAMARK's senior management believes that management ownership has
significantly contributed to ARAMARK's success and intends to continue to use
the ARAMARK Ownership Program to expand both the number of management investors
and their percentage ownership. Through stock purchase opportunities, ARAMARK
has granted management employees an opportunity to invest in, or to increase
their investment in, ARAMARK.
The purchase price for shares subject to stock purchase opportunities is
the appraisal price of the shares (based upon the most recent available
independent appraisal) on the date of the grant. Shares issued pursuant to the
exercise of purchase opportunities are subject to the Stockholders Agreement.
Generally, purchase opportunities are not transferable, and each purchase
opportunity is exercisable only by the employee to whom it is granted.
Each installment stock purchase opportunity (ISPO) has an installment
schedule that limits the number of shares of common stock that may be purchased
during each annual installment exercise period. Unless the first installment is
exercised by its expiration date for a minimum number of shares, the entire
installment purchase opportunity is canceled. Thereafter, subsequent annual
installments may be exercised (subject to exercise of a minimum number of
shares) for up to the maximum number of shares specified in the certificate for
that installment. Any portion of an annual installment not exercised by the
appropriate expiration date does not become vested but rather is canceled. Each
installment stock purchase opportunity is exercisable only while the holder is
an employee or director of ARAMARK or a subsidiary.
ARAMARK also grants cumulative ISPOs, which are similar to regular ISPOs
except that if a portion of an annual installment is not exercised during the
corresponding exercise period, then it becomes vested and is not canceled, and
may be exercised during any subsequent exercise period. Other stock purchase
opportunities, similar to cumulative ISPOs, provide that once vested, the entire
opportunity or a portion (in 100 share increments) may be exercised during any
of the specified annual exercise periods. Upon termination of employment, an
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employee can exercise his or her stock purchase opportunity if it is vested,
within three months after termination (but not beyond its expiration date). If
it is not vested at such time, the purchase opportunity is canceled.
In connection with the exercise of ISPOs and non-qualified stock options,
ARAMARK has adopted a deferred payment program whereby a portion of the purchase
price for certain installments may be deferred at the election of the employee
for approximately six years. ARAMARK has sold to a financial institution most of
the outstanding deferred payment obligations previously incurred and anticipates
it will also sell most of the deferred payment obligations incurred in the
current exercise period. The deferred payment obligation is a full recourse
obligation of the individual, accrues interest, and is secured by a pledge of
shares of common stock. The interest rate for deferred payment obligations
incurred in the current exercise period has been set at 8.5%. More than 529
employees (including executive officers) are currently participating in the
program. At fiscal year end, the amount of the deferred payment obligations of
Messrs. Neubauer, Leonard, Sutherland and Mulvaney were $5,744,456, $2,784,497,
$1,244,750, and $1,680,456, respectively.
Certain Relationships and Related Transactions
During fiscal 1999, ARAMARK repurchased from five current and/or former
executive officers and directors and/or their permitted transferees 105,250
shares of class B common stock at an average price per share of $12.96. ARAMARK
anticipates that it will continue to repurchase shares held by officers and
directors through ARAMARK's internal market and following their termination of
employment or cessation as a director. ARAMARK has an agreement with Martin W.
Spector, executive vice president, secretary and general counsel of ARAMARK, in
connection with Mr. Spector's retirement, to repurchase from Mr. Spector and his
permitted transferees 2,658,636 shares of class B common stock at a price of
$15.20 per share. ARAMARK intends to acquire from James E. Ksansnak, vice
chairman and director of ARAMARK, approximately 80% of the capital stock of a
corporation owned by Mr. Ksansnak for nominal consideration, and to terminate
that corporation's 401(k) plan and distribute the 654,913 shares of ARAMARK
class B common stock held by the plan to Mr. Ksansnak, as the plan's sole
participant.
ARAMARK, the members of management who are equity investors in ARAMARK and
certain other investors (collectively, Restricted Investors) are parties to the
Stockholders Agreement. Restricted Investors are subject to certain restrictions
on transfer, with ARAMARK having certain rights of first offer in the event of
any sales or dispositions by Restricted Investors or their estates. In addition,
upon death, complete disability or normal retirement of management investors or
upon death or complete disability of other individual Restricted Investors, such
persons or their estates may cause ARAMARK to repurchase for cash up to 30% of
their shares at the then current appraisal price but only to the extent such
repurchase by ARAMARK is permitted under ARAMARK's credit agreement. Such
repurchased shares may be resold to others, including replacement personnel. In
addition, it is contemplated that shares that may be issued pursuant to exercise
of employee stock options and stock purchase opportunities would also be subject
to the Stockholders Agreement.
Metropolitan Life Insurance Company holds a 6.79% promissory note, which
was issued by a subsidiary of ARAMARK and is guaranteed by ARAMARK. The
outstanding principal amount of the note is $100 million, payable in $25 million
annual installments each January, with a final maturity of January 2003.
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Employment Agreements and Change of Control Arrangements
ARAMARK has employment agreements or arrangements with all of its officers
under which they are currently being paid annual salaries ranging up to
$1,000,000. Generally, these are for indeterminate periods terminable by either
party upon notice, ranging from eight weeks to six months.
Mr. Neubauer's agreement provides for his services as chief executive
officer at a current annual base salary of $1,000,000 plus a bonus under the
applicable bonus plan. In addition, upon his disability or other termination he
will receive supplemental benefits of 50% of the sum of his base salary plus his
average bonus over the prior three years (average bonus) annually for life, and
upon his death his surviving spouse, if any, will receive 25% of the sum of his
base salary plus the average bonus annually for life. Upon his termination, his
stock purchase opportunities will become vested and immediately exercisable, and
he shall serve as a consultant to ARAMARK for two years at an annual
compensation rate equal to his base salary. His supplemental benefits will begin
at the same time the consulting period begins. His employment may be terminated
by either party upon two years notice. Upon termination by ARAMARK "without
cause" or Mr. Neubauer's "resignation for good reason" (which terms are defined
in the agreement), he will receive a lump sum payment equal to the sum of four
times his base salary plus two times his average bonus.
ARAMARK has agreed to use its best efforts to cause Mr. Neubauer's election
to, and retention on, ARAMARK's board during the term of Mr. Neubauer's
agreement. In addition, if any payment or benefit payable after a change in
ownership or control of ARAMARK would be a so-called parachute payment subject
to a federal excise tax, then ARAMARK will gross-up such payment or benefit to
cover the excise tax. ARAMARK has agreed to apply to Mr. Neubauer`s stock
holdings and purchase opportunities the current terms of the ARAMARK Ownership
Program, with only such future changes that are not adverse to Mr. Neubauer, and
to waive any changes that are adverse.
ARAMARK has a split dollar life insurance agreement with Mr. Neubauer. The
agreement relates to life insurance policies owned by a trust created by Mr.
Neubauer. Pursuant to the agreement, ARAMARK pays a substantial portion of the
premiums on the policies, such amounts to be repaid from the proceeds of the
policies upon their termination. The current amount thus outstanding is
$1,291,957. ARAMARK foregoes charging interest in each fiscal year on such
amount. However, the foregone interest is at least partially recaptured by
ARAMARK by reducing the amount of the interest that would otherwise accrue on
Mr. Neubauer's deferred compensation. ARAMARK holds a security interest in the
policies to secure the repayment of the premium amount paid by ARAMARK. The
arrangement terminates upon the termination of Mr. Neubauer's employment (other
than by reason of his retirement).
Messrs. Leonard, Kiernan, Sutherland and Mulvaney have current annual base
salaries of $600,000, $510,000, $425,000, and $360,000, respectively. Several
agreements provide for the deferral of a part of prior salary and bonus payments
with interest, currently at the Moody's long-term bond index rate, usually
payable in equal monthly installments beginning upon retirement, permanent
disability, death, or termination of employment.
ARAMARK currently has a severance pay policy, pursuant to which severance
payments are made to executive officers and certain other key employees on the
basis of continuous service, generally equal to between 3 and 18 months of pay
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if their employment is terminated for reasons other than cause plus the
continuation of certain other benefits during the period of such payment.
Compensation of Directors
Directors who are employees of ARAMARK are not paid directors' fees.
Directors who are not employees receive an annual retainer of $30,000 for
serving on the board, $3,000 for services as chairman of a board committee and
$1,000 for otherwise serving on a committee. They also receive meeting fees of
$1,000 per day for attendance at meetings of the board and for each committee
meeting.
Committee Report on Executive Compensation
ARAMARK's compensation programs are designed to support ARAMARK's overall
commitment to continued growth and quality services to customers. The programs
are intended, among other things, to enable ARAMARK to recruit and retain the
best performers, to provide compensation levels consistent with the level of
contribution and degree of accountability, to use performance measures
consistent with ARAMARK's goals, to provide compensation consistent with
competitive market rates, and to include a significant portion of incentive
compensation.
Performance measures. ARAMARK uses various financial measures to evaluate
the performance of ARAMARK and its business units, with the specific measures in
some cases varying depending upon the line of business involved. Generally, the
measures currently used are Sales Growth, EBIT, ROGI, and in addition, for
overall corporate performance, Net Income. EBIT is Earnings Before Interest and
Taxes. ROGI is Return on Gross Investment. Targets for each of these performance
measures are established annually in ARAMARK's business plan, which is approved
at the beginning of the fiscal year by the board.
Salary. Salary levels for all salaried employees are generally reviewed
annually. Guideline increases are established generally based upon overall
financial performance of ARAMARK, the current rate of inflation, and general
compensation levels in the industries in which ARAMARK operates. For increases
effective at the beginning of calendar 2000, the guideline increase for
executive officers, including the five named individuals, was 4.0%. The specific
salary increase for each individual executive officer is based upon a review of
his or her individual performance and development. In the case of Mr. Neubauer,
the review is conducted independently by the Human Resources, Compensation and
Public Affairs Committee without any officers present, subject to final review
and approval by the board; for all other executive officers, the individual's
supervisor and more senior executives, along with the corporate human resources
department, conduct the review and make a recommendation to the Committee. The
terms of Mr. Neubauer's employment contract were revised during fiscal 1999
without any change to his salary (see "Employment Agreements and Change of
Control Arrangements").
Bonus. Senior executive officers participate in ARAMARK's management
incentive bonus program. Bonuses are awarded annually based, in part, upon the
attainment of predetermined financial goals and, in part, upon the attainment of
individual objectives. Generally, non-financial objectives represent 30% of the
bonus potential and are established by the supervisor of the executive.
Financial goals generally represent 70% of the bonus potential. An employee's
bonus potential generally varies as a percentage of total cash compensation,
dependent upon the level of responsibility of the employee's position. The
measures of financial performance used are for the business unit that is either
10
<PAGE>
under the managerial direction of the participant or, if a staff executive, is
the unit on which the participant impacts most frequently and significantly. In
the case of Messrs. Neubauer, Leonard and Kiernan, the Committee awards bonuses
pursuant to the Senior Executive Annual Performance Bonus Arrangement rather
than the management incentive bonus program. Pursuant to the arrangement, the
Committee selected Revenues, Net Income and ROGI of ARAMARK as the financial
performance measures for Messrs. Neubauer and Leonard and Sales, EBIT and ROGI
of ARAMARK's food and support services business for Mr. Kiernan, and set goals
for each measure. As required by the arrangement, the attainments of the
Revenues and Sales performance goals set by the Committee were increased to
offset the effects of the revenues and sales reductions due to the divestiture
of a business operation and the attainment of the Net Income performance goal
set by the Committee was increased to offset the net income reduction resulting
from a business acquisition. All of the events for which these adjustments were
made occurred after the Committee set the goals for each measure. Mr. Neubauer
was awarded 63% of his maximum bonus potential for fiscal 1999.
Stock Purchase Opportunities. The Human Resources, Compensation and Public
Affairs Committee believes that management ownership contributes to ARAMARK's
success, and supports senior management's goal of expanding both the number of
management investors and their percentage ownership. The Human Resources,
Compensation and Public Affairs Committee, accordingly, grants stock purchase
opportunities to selected management employees. The terms of the stock purchase
opportunities are generally described under "The ARAMARK Ownership Program."
Individual grants are generally made by the Human Resources, Compensation and
Public Affairs Committee in connection with hires and promotions, and other
recognition of performance. The amount of a grant generally varies depending
upon the level of responsibility of the employee's position, the number of
purchase opportunities previously granted, and the number of shares owned. The
individual's supervisor and other senior executives, along with the corporate
human resources department, make recommendations to the Human Resources,
Compensation and Public Affairs Committee. ARAMARK has in the past also made
broad-based grants to management employees.
Members of the Human Resources, Compensation and Public Affairs Committee:
Robert J. Callander, Chair Ronald R. Davenport
James E. Preston The Honorable Thomas H. Kean
Mitchell S. Fromstein
11
<PAGE>
Security Ownership of Certain Beneficial Owners and Management
The following table presents certain information as of December 22, 1999
with respect to shares of the common stock of ARAMARK beneficially owned by each
person known to ARAMARK to be the beneficial owner of more than 5% of either
class of the common stock, by each director nominated for reelection, and by
each named executive officer.
<TABLE>
<CAPTION>
Class B Common Stock Class A Common Stock
--------------------------- --------------------------
Number of Percent of Number of Percent of
Shares(1) Outstanding Shares Outstanding
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Trustees for various ARAMARK
employee benefit plans(2,3) 0 * 1,708,564 67.4%
Metropolitan Life Insurance Co.(4) 0 * 337,899 13.3%
Joseph Neubauer 17,123,388 27.4% 0 *
James E. Ksansnak 2,186,980 3.5% 0 *
Lawrence T. Babbio, Jr. 25,000 * 0 *
Patricia C. Barron 75,800 * 0 *
Robert J. Callander 349,918 * 0 *
Ronald R. Davenport 96,000 * 0 *
Edward G. Jordan 319,500 * 0 *
Thomas H. Kean 387,000 * 0 *
James E. Preston 444,000 * 0 *
William Leonard 2,029,585 3.3% 0 *
Charles E. Kiernan 75,000 * 0 *
L. Frederick Sutherland 1,762,056 2.8% 0 *
Brian G. Mulvaney 843,386 1.4% 0 *
All directors and executive
officers as a group (22 persons) 30,345,059 47.8% 0 *
All employees, directors and
employee benefit plans as a group(5) 69,500,789 100.0% 1,851,373 73.0%
</TABLE>
- -------------------
1. Includes shares issuable upon the exercise of currently
exercisable stock purchase opportunities and options.
2. The address of this stockholder is ARAMARK Corporation, ARAMARK
Tower, 1101 Market Street, Philadelphia, PA 19107.
3. The trustees are James E. Ksansnak, Brian G. Mulvaney, Martin W.
Spector and L. Frederick Sutherland.
4. The address of this stockholder is One Madison Avenue, New York,
NY 10010.
5. Includes former employees and permitted transferees (primarily
children and other transferees for estate planning purposes).
* Less than 1%.
Relationship with Independent Public Accountants
The board of directors is expected to reappoint the firm of Arthur
Andersen LLP as independent auditors for ARAMARK for the 2000 fiscal year. A
representative of Arthur Andersen LLP is expected to be present at the annual
meeting and will be offered the opportunity to make a statement if desiring to
do so and will be available to respond to appropriate questions.
12
<PAGE>
Financial Statements
A copy of ARAMARK's annual report on Form 10-K for the fiscal year
ended October 1, 1999 (annual report) has been delivered to stockholders.
Stockholders are referred to the annual report for financial and other
information about ARAMARK.
Proxy Solicitation
Proxies will be solicited by mail. Proxies may be solicited by
directors, officers and a small number of regular employees of ARAMARK
personally or by mail or telephone, but such persons will not be specially
compensated for such services. The entire cost of solicitation will be borne by
ARAMARK.
Discretionary Authority
Management does not intend to present, and does not have any reason to
believe that others will present, any item of business at the annual meeting
other than those specifically set forth in the notice of the meeting. However,
if other matters are presented for a vote, the proxy agents will have the right
to vote the shares represented by proxy cards on such matters in accordance with
their discretion.
Stockholder Proposals
Stockholders may submit proposals on matters appropriate for
stockholder action at future annual meetings of ARAMARK in accordance with
regulations adopted by the Securities and Exchange Commission. Such proposals
must be received by ARAMARK no later than September 8, 2000, to be considered
for inclusion in ARAMARK's proxy statement and form of proxy for next year's
annual meeting and, in any event, must be received by ARAMARK no later than
November 22, 2000, to be eligible for presentation for stockholder action at
next year's annual meeting. Proposals should be directed to the attention of the
Corporate Secretary.
13
<PAGE>
ARAMARK CORPORATION
PROXY CARD
SOLICITED BY THE BOARD OF DIRECTORS
Joseph Neubauer, Martin W. Spector and Donald S. Morton (each with power of
substitution) are hereby authorized to vote all the shares which the undersigned
would be entitled to vote if personally present at the annual meeting of
stockholders of ARAMARK Corporation (the "Company") to be held on February 8,
2000 and at any adjournment.
IF YOU SPECIFY A CHOICE AS TO THE ACTION TO BE TAKEN ON AN ITEM, THIS PROXY WILL
BE VOTED IN ACCORDANCE WITH SUCH CHOICE. IF YOU DO NOT SPECIFY A CHOICE, IT WILL
BE VOTED FOR ITEMS 1 AND 2 AND AT THE DISCRETION OF THE PROXY HOLDER AS TO ANY
OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
see other side
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
YOUR VOTE IS IMPORTANT!
You can vote in one of three ways:
1. Call toll free 1-888-297-9580 in the United States on a Touch Tone telephone
and follow the instructions on the reverse side. There is NO CHARGE to you
for this call. Outside the United States you may fax your signed proxy card
to 201-433-3971
or
2. Vote by Internet at our Internet Address: http://www.proxyvoting.com/aramark
or
3. Mark, sign and date your proxy card and return it promptly in the enclosed
envelope.
PLEASE VOTE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
Please mark ---------
your votes as | |
indicated in | X |
this example | |
---------
<TABLE>
<CAPTION>
<S> <C>
1. Election of Directors Nominees: 01 Lawrence T. Babbio, Jr., 02 Patricia C. Barron, 03 Robert J. Callander,
04 Ronald R. Davenport, 05 Edward G. Jordan, 06 Thomas H. Kean, 07 James E. Ksansnak,
08 Joseph Neubauer, 09 James E. Preston
(To withhold authority to vote FOR, write name(s) on line: __________________________
_____________________________________________________________________________________)
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
--------- ---------
| | | |
| | | |
| | | |
--------- ---------
2. In their discretion, the proxies are authorized to vote
upon such other matters as may properly come before the
meeting and at any adjournments thereof.
Dated
-----------------------------------------------
----------------------------------------------------
(Signature)
----------------------------------------------------
(Signature if held jointly)
Please sign exactly as name appears. If shares are
held as joint tenants, both joint tenants should
sign. Attorneys-in-fact, executors, administrators,
trustees, guardians, corporation officers or others
signing in a representative capacity should indicate
the capacity in which they are signing.
</TABLE>
- --------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
<PAGE>
VOTE BY TELEPHONE OR INTERNET
QUICK * * * EASY * * * IMMEDIATE
Your telephone or internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
<TABLE>
<CAPTION>
<S> <C>
VOTE BY PHONE: You will be asked to enter a Control Number located in the box in the lower right of this form.
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION A: To vote as the Board of Directors recommends on proposal 1, press 1
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OPTION B: If you choose to vote differently on proposal 1, press 0. You will hear these instructions:
- ------------------------------------------------------------------------------------------------------------------------------------
Proposal 1 - To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees, press 9 To WITHHOLD FOR AN
INDIVIDUAL nominee, Press 0 and listen to the instructions
When asked, you must confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS http://www.proxyvoting.com/aramark
</TABLE>
IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD
THANK YOU FOR VOTING.
<TABLE>
<CAPTION>
<S> <C>
IN THE UNITED STATES ==================================
Call * * Toll Free * * On a Touch Tone Telephone
1-888-297-9580 - ANYTIME
There is NO CHARGE to you for this call.
Outside the United States
FAX TO : 201-433-3971
==================================
CONTROL NUMBER
for Telephone/Internet Voting
</TABLE>
