UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
   
___________________________________________
FORM 10-Q
 
___________________________________________
x
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 30, 2012
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 001-04762
___________________________________________
ARAMARK CORPORATION
(Exact name of registrant as specified in its charter)
  ___________________________________________
Delaware
95-2051630
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania
19107
(Address of principal executive offices)
(Zip Code)
(215) 238-3000
(Registrant’s telephone number, including area code)
___________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files).    Yes   x     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
x   (Do not check if a smaller reporting company)
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.
Common stock outstanding at April 27, 2012: 1,000 shares
 



TABLE OF CONTENTS
 
 
 
Page
 
 
 
ITEM 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ITEM 2.
 
ITEM 3.
 
ITEM 4.
 
 
 
 
 
 
 
ITEM 1.
 
ITEM 5.
 
ITEM 6.



Table of Contents

PART I—FINANCIAL INFORMATION
ITEM 1 .
FINANCIAL STATEMENTS
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share Amounts)
 
 
March 30, 2012
 
September 30, 2011
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
100,973

 
$
213,323

Receivables
1,351,856

 
1,252,266

Inventories, at lower of cost or market
487,191

 
450,848

Prepayments and other current assets
215,613

 
211,587

Assets held for sale
2,798

 
2,798

Total current assets
2,158,431

 
2,130,822

Property and Equipment, net
1,027,823

 
1,004,690

Goodwill
4,712,243

 
4,640,606

Other Intangible Assets
1,704,117

 
1,748,417

Other Assets
969,541

 
985,017

 
$
10,572,155

 
$
10,509,552

LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Current maturities of long-term borrowings
$
59,061

 
$
49,064

Accounts payable
756,088

 
775,455

Accrued expenses and other current liabilities
1,067,032

 
1,226,510

Total current liabilities
1,882,181

 
2,051,029

Long-Term Borrowings
5,757,560

 
5,588,614

Deferred Income Taxes and Other Noncurrent Liabilities
1,230,895

 
1,234,885

Common Stock Subject to Repurchase
169,328

 
158,061

Equity:
 
 
 
ARAMARK Shareholder’s Equity:
 
 
 
Common stock, par value $.01 (authorized: 1,000 shares; issued and outstanding: 1,000 shares)
—

 
—

Capital surplus
1,464,606

 
1,476,061

Earnings retained for use in the business
82,197

 
46,468

Accumulated other comprehensive loss
(47,586
)
 
(77,345
)
Total ARAMARK shareholder’s equity
1,499,217

 
1,445,184

Noncontrolling interest
32,974

 
31,779

Total equity
1,532,191

 
1,476,963

 
$
10,572,155

 
$
10,509,552


Th e accompanying notes are an integral part of these condensed consolidated financial statements.

1
Table of Contents


ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)
 
 
Three Months
Ended
 
Three Months
Ended
 
March 30, 2012
 
April 1, 2011
Sales
$
3,345,560

 
$
3,220,260

Costs and Expenses:
 
 
 
Cost of services provided
3,028,661

 
2,925,134

Depreciation and amortization
131,714

 
127,321

Selling and general corporate expenses
51,471

 
45,537

 
3,211,846

 
3,097,992

Operating income
133,714

 
122,268

Interest and Other Financing Costs, net
118,533

 
92,765

Income from Continuing Operations Before Income Taxes
15,181

 
29,503

Provision for Income Taxes
4,229

 
9,505

Income from Continuing Operations
10,952

 
19,998

Income from Discontinued Operations, net of tax
—

 
392

Net income
10,952

 
20,390

Less: Net income attributable to noncontrolling interest
1,064

 
—

Net income attributable to ARAMARK shareholder
$
9,888

 
$
20,390

 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2
Table of Contents

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)
 
 
Six Months
Ended
 
Six Months
Ended
 
March 30, 2012
 
April 1, 2011
Sales
$
6,768,172

 
$
6,504,766

Costs and Expenses:
 
 
 
Cost of services provided
6,104,367

 
5,874,384

Depreciation and amortization
263,580

 
253,812

Selling and general corporate expenses
99,635

 
90,460

 
6,467,582

 
6,218,656

Operating income
300,590

 
286,110

Interest and Other Financing Costs, net
227,347

 
201,911

Income from Continuing Operations Before Income Taxes
73,243

 
84,199

Provision for Income Taxes
23,172

 
25,755

Income from Continuing Operations
50,071

 
58,444

Income from Discontinued Operations, net of tax
297

 
347

Net income
50,368

 
58,791

Less: Net income attributable to noncontrolling interest
1,804

 
—

Net income attributable to ARAMARK shareholder
$
48,564

 
$
58,791


The accompanying notes are an integral part of these condensed consolidated financial statements.


3
Table of Contents


ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
 
 
Six Months
Ended
 
Six Months
Ended
 
March 30, 2012
 
April 1, 2011
Cash flows from operating activities:
 
 
 
Net income
$
50,368

 
$
58,791

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
263,580

 
256,706

Income taxes deferred
(30,621
)
 
(11,828
)
Share-based compensation expense
11,565

 
6,392

Changes in noncash working capital
(263,817
)
 
(211,611
)
Net change in proceeds from sale of receivables
—

 
(220,855
)
Other operating activities
26,267

 
(3,078
)
Net cash provided by (used in) operating activities
57,342

 
(125,483
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment, client contract investments and other
(149,731
)
 
(129,244
)
Disposals of property and equipment
4,611

 
8,925

Proceeds from divestitures
4,427

 
10,042

Acquisition of certain businesses, net of cash acquired
(150,352
)
 
(155,493
)
Other investing activities
593

 
6,517

Net cash used in investing activities
(290,452
)
 
(259,253
)
Cash flows from financing activities:
 
 
 
Proceeds from long-term borrowings
187,302

 
95,159

Payments of long-term borrowings
(17,771
)
 
(18,409
)
Net change in funding under the Receivables Facility
(1,975
)
 
245,650

Advance to Parent Company
(27,744
)
 
—

Proceeds from issuance of Parent Company common stock
5,152

 
2,329

Repurchase of Parent Company common stock
(12,462
)
 
(9,397
)
Other financing activities
(11,742
)
 
(2,317
)
Net cash provided by financing activities
120,760

 
313,015

Decrease in cash and cash equivalents
(112,350
)
 
(71,721
)
Cash and cash equivalents, beginning of period
213,323

 
160,929

Cash and cash equivalents, end of period
100,973

 
89,208

Less: Cash and cash equivalents included in assets held for sale
—

 
435

Cash and cash equivalents, end of period
$
100,973

 
$
88,773


The accompanying notes are an integral part of these condensed consolidated financial statements.


4
Table of Contents

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(Unaudited)
(In Thousands)

 
Total
 
Total
ARAMARK
Shareholder’s
Equity
 
Common
Stock
 
Capital
Surplus
 
Earnings
Retained
for Use
in the
Business
 
Accumulated
Other
Comprehensive
Loss
 
Noncontrolling
Interest
Balance, September 30, 2011
$
1,476,963

 
$
1,445,184

 
$
—

 
$
1,476,061

 
$
46,468

 
$
(77,345
)
 
$
31,779

Net income
49,805

 
48,564

 
 
 
 
 
48,564

 
 
 
1,241

Pension plan adjustments (net of tax)
772

 
772

 
 
 
 
 
 
 
772

 
 
Foreign currency translation adjustments (net of tax)
(5,232
)
 
(5,232
)
 
 
 
 
 
 
 
(5,232
)
 
 
Change in fair value of cash flow hedges (net of tax)
34,219

 
34,219

 
 
 
 
 
 
 
34,219

 
 
Capital contributions from issuance of Parent Company common stock
13,737

 
13,737

 
 
 
13,737

 
 
 
 
 
 
Compensation expense related to stock incentive plans
11,565

 
11,565

 
 
 
11,565

 
 
 
 
 
 
Tax benefits related to stock incentive plans
2,206

 
2,206

 
 
 
2,206

 
 
 
 
 
 
Increase in Parent Company common stock subject to repurchase obligation, net
(11,267
)
 
(11,267
)
 
 
 
(11,267
)
 
 
 
 
 
 
Purchases of Parent Company common stock
(27,696
)
 
(27,696
)
 
 
 
(27,696
)
 
 
 
 
 
 
Advance to Parent Company, net
(12,835
)
 
(12,835
)
 
 
 
 
 
(12,835
)
 
 
 
 
Distributions to noncontrolling interest
(46
)
 
 
 
 
 
 
 
 
 
 
 
(46
)
Balance, March 30, 2012
$
1,532,191

 
$
1,499,217

 
$
—

 
$
1,464,606

 
$
82,197

 
$
(47,586
)
 
$
32,974


The accompanying notes are an integral part of these condensed consolidated financial statements.


5

ARAMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1)
BASIS OF PRESENTATION :
ARAMARK Corporation (the “Company” or “ARAMARK”) was acquired on January 26, 2007 through a merger transaction with RMK Acquisition Corporation, a Delaware corporation controlled by investment funds associated with GS Capital Partners, CCMP Capital Advisors, J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC (collectively, the “Sponsors”), Joseph Neubauer, Chairman and former Chief Executive Officer of ARAMARK, and certain other members of the Company’s management. The acquisition was accomplished through the merger of RMK Acquisition Corporation with and into ARAMARK Corporation with ARAMARK Corporation being the surviving company (the “Transaction”).
The Company is a wholly-owned subsidiary of ARAMARK Intermediate Holdco Corporation, which is wholly-owned by ARAMARK Holdings Corporation (the “Parent Company”). ARAMARK Holdings Corporation, ARAMARK Intermediate Holdco Corporation and RMK Acquisition Corporation were formed for the purpose of facilitating the Transaction. The Company’s operating results are included in the consolidated federal tax returns filed by the Parent Company. Any realized tax effects or credits attributable to the Company’s operations accrue to the Company based upon the Parent Company’s procedures for allocating the costs and benefits to its subsidiaries. The income tax provisions in the accompanying Condensed Consolidated Statements of Income approximate the provisions that would be required if the Company were a separate taxpayer. All income tax payments are made by the Company on behalf of the Parent Company (see Note 17).
On March 30, 2007, ARAMARK Corporation was merged with and into ARAMARK Services, Inc. with ARAMARK Services, Inc. being the surviving corporation. In connection with the consummation of the merger, ARAMARK Services, Inc. changed its name to ARAMARK Corporation.
The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling financial interest is maintained. For those material consolidated subsidiaries in which the Company’s ownership is less than 100%, the outside stockholders’ interests are shown as noncontrolling interest in the accompanying condensed consolidated balance sheets. All significant intercompany transactions and accounts have been eliminated. The condensed consolidated financial statements exclude the accounts of ARAMARK Holdings Corporation and ARAMARK Intermediate Holdco Corporation, but do reflect the Sponsors’ investment cost basis allocated to the assets and liabilities acquired on January 26, 2007 and the Parent Company’s common stock subject to repurchase. See Note 17 for further discussion of ARAMARK Holdings Corporation.
The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited consolidated financial statements, and the notes to those statements, included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2011. The condensed consolidated balance sheet as of September 30, 2011 was derived from audited financial statements which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of the Company, the statements include all adjustments, which are of a normal, recurring nature, required for a fair presentation for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for a full year, due to the seasonality of some of the Company’s business activities and the possibility of changes in general economic conditions.
(2)
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE :
On September 30, 2011, the Company completed the sale of its wholly-owned subsidiary, Galls, LLC (“Galls”), for approximately $75.0 million in cash. The transaction resulted in a pretax loss of approximately $1.5 million (net of tax loss of approximately $12.0 million) during fiscal 2011. Galls is accounted for as a discontinued operation in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income. Galls’ results of operations have been removed from the Company’s results of continuing operations for all periods presented. Galls was previously included in the Uniform and Career Apparel segment. All related disclosures have also been adjusted to reflect the discontinued operation.

6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summarized selected financial information of discontinued operations is as follows (in thousands):
 
 
Three Months
Ended
 
Three Months
Ended
 
March 30, 2012
 
April 1, 2011 
Sales
$
—

 
$
41,544

Income before income taxes
—

 
648

Income tax provision
—

 
256

Income from discontinued operations
$
—

 
$
392

 
 
 
 
 
Six Months
Ended
 
Six Months
Ended
 
March 30, 2012
 
April 1, 2011 
Sales
$
—

 
$
81,363

Income before income taxes
491

 
579

Income tax provision
194

 
232

Income from discontinued operations
$
297

 
$
347

The assets of the discontinued operation are stated separately in the Condensed Consolidated Balance Sheets as held for sale, which consists of property.
(3)
ACQUISITIONS AND DIVESTITURES :
Fiscal 2012
On October 3, 2011, ARAMARK Refreshment Services, LLC, a subsidiary of the Company, purchased all of the outstanding shares of capital stock of Van Houtte USA Holdings, Inc. (doing business as “Filterfresh”), a provider of office coffee services in the United States, for cash consideration of approximately $145.2 million. The acquisition was financed with cash on hand and borrowings under the Company’s revolving credit facility. Under the terms of the purchase agreement, if a certain significant customer relationship was not maintained within a specific timeframe, the Company was entitled to a refund of a portion of the purchase price. During the second quarter of fiscal 2012, the Company received a refund of approximately $7.4 million related to the termination of such customer relationship.
As part of the acquisition of Filterfresh, the Company acquired a subsidiary with a redeemable noncontrolling interest. The Company classifies redeemable noncontrolling interests outside of shareholder’s equity in the Condensed Consolidated Balance Sheet in “Deferred Income Taxes and Other Noncurrent Liabilities.” As of March 30, 2012, the redeemable noncontrolling interest related to the subsidiary was approximately $10.2 million. For the three and six months ended March 30, 2012, net income attributable to redeemable noncontrolling interest was $0.3 million and $0.6 million, respectively. Distributions to redeemable noncontrolling interest was $0.4 million for the six months ended March 30, 2012.
For the three months and six months ended March 30, 2012, $28.9 million and $60.1 million of sales, respectively, and $0.3 million of net income and ($1.7) million of net loss, which includes planned transition and integration costs, respectively, were recorded in the Condensed Consolidated Statements of Income related to the acquisition. During fiscal 2011, approximately $0.7 million of pretax transaction-related costs related to the acquisition were recorded in earnings. The Company’s proforma results of operations for fiscal 2012 and fiscal 2011 would not have been materially different than reported, assuming the acquisition had occurred at the beginning of the prior year period.
Fiscal 2011
On March 18, 2011, ARAMARK Clinical Technology Services, LLC, a subsidiary of the Company, purchased the common stock of the ultimate parent company of Masterplan, a clinical technology management and medical equipment maintenance company, for cash consideration of approximately $154.2 million. Also acquired in the transaction was ReMedPar, an independent provider of sourced and refurbished medical equipment parts. During the first quarter of fiscal 2012, the Company sold MESA, a wholly-owned subsidiary acquired as part of the Masterplan acquisition, for cash consideration of approximately $4.2 million. The sale resulted in a reduction to goodwill of approximately $1.7 million. The Company’s proforma results of operations for fiscal 2011 would not have been materially different than reported.
 

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company followed the acquisition method of accounting in accordance with the accounting standard related to business combinations. The Company has finalized its assessment of the fair value of the assets acquired and liabilities assumed. The following table summarizes the fair values of the assets acquired and liabilities assumed in the acquisition (in thousands):
 
Purchase consideration
$
154,154

Current assets
$
29,906

Current liabilities
(31,396
)
Property and equipment
3,736

Other intangible assets
42,800

Goodwill
126,757

Other assets
314

Long-term borrowings
(767
)
Deferred income taxes and other noncurrent liabilities
(17,196
)
 
$
154,154

For the three and six months ended March 30, 2012, $27.2 million and $57.3 million of sales, respectively, and ($0.8) million and ($1.6) million of net loss, respectively, were recorded in the Condensed Consolidated Statements of Income related to the acquisition. For the three and six months ended April 1, 2011, $3.9 million of sales and ($0.2) million of net loss were recorded in the Condensed Consolidated Statements of Income in both periods related to the acquisition.

During the second quarter of fiscal 2011, the Company completed the sale of its 67% ownership interest in the security business of its Chilean subsidiary for approximately $10 million in cash and future consideration of approximately $4 million. The transaction resulted in a pretax gain of approximately $6.4 million (net of tax gain of approximately $4.8 million), which is included in “Cost of services provided” in the Condensed Consolidated Statements of Income. The results of operations and cash flows associated with the security business were not material to the Company's consolidated operations and cash flows.
(4)
SUPPLEMENTAL CASH FLOW INFORMATION :
The Company made interest payments of approximately $207.7 million and $180.9 million and income tax payments of approximately $55.0 million and $25.6 million during the six months ended March 30, 2012 and April 1, 2011, respectively.
(5)
COMPREHENSIVE INCOME :
Comprehensive income includes all changes to shareholder’s equity during a period, except those resulting from investment by and distributions to shareholders. Components of comprehensive income include net income (loss), changes in foreign currency translation adjustments (net of tax), pension plan adjustments (net of tax) and changes in the fair value of cash flow hedges (net of tax). For the three and six months ended March 30, 2012, total comprehensive income was approximately $30.4 million and $80.1 million, respectively. For the three and six months ended March 30, 2012, total comprehensive income attributable to ARAMARK shareholder was approximately $29.3 million and $78.3 million, respectively. For the three and six months ended April 1, 2011, total comprehensive income was approximately $52.7 million and $109.1 million, respectively. As of March 30, 2012 and September 30, 2011, “Accumulated other comprehensive loss” consists of pension plan adjustments (net of tax) of approximately ($33.3) million and ($34.1) million, respectively, foreign currency translation adjustment (net of tax) of approximately $19.6 million and $24.8 million, respectively, and fair value of cash flow hedges (net of tax) of approximately ($33.9) million and ($68.1) million, respectively.
(6)
GOODWILL AND OTHER INTANGIBLE ASSETS :
Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized and is subject to an impairment test that the Company conducts annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists, using discounted cash flows. Changes in total goodwill during the six months ended March 30, 2012 follow (in thousands):
 

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Segment
September 30, 2011  
 
Acquisitions and
Divestitures  
 
Translation  
 
March 30, 2012  
Food and Support Services—North America
$
3,613,370

 
$
65,882

 
$
26

 
$
3,679,278

Food and Support Services—International
453,996

 
—

 
5,518

 
459,514

Uniform and Career Apparel
573,240

 
211

 
—

 
573,451

 
$
4,640,606

 
$
66,093

 
$
5,544

 
$
4,712,243

The Food and Support Services—North America acquisitions and divestitures activity consists primarily of goodwill resulting from the fiscal 2012 Filterfresh acquisition and the final determination of the purchase price allocations related to Masterplan (see Note 3). The amounts for acquisitions during fiscal 2012 may be revised upon final determination of the purchase price allocations.
Other intangible assets consist of (in thousands):
 
March 30, 2012 
 
September 30, 2011 
 
Gross
Amount
 
Accumulated
Amortization
 
Net
Amount
 
Gross
Amount
 
Accumulated
Amortization
 
Net
Amount
Customer relationship assets
$
1,911,866

 
$
(969,864
)
 
$
942,002

 
$
1,852,531

 
$
(865,524
)
 
$
987,007

Trade names
762,863

 
(748
)
 
762,115

 
761,919

 
(509
)
 
761,410

 
$
2,674,729

 
$
(970,612
)
 
$
1,704,117

 
$
2,614,450

 
$
(866,033
)
 
$
1,748,417

Acquisition-related intangible assets consist of customer relationship assets, the ARAMARK trade name and other trade names. Customer relationship assets are being amortized principally on a straight-line basis over the expected period of benefit, 3 to 24 years, with a weighted average life of approximately 11 years. The ARAMARK and Seamless trade names are indefinite lived intangible assets and are not amortizable but are evaluated for impairment at least annually.
Amortization of intangible assets for the six months ended March 30, 2012 and April 1, 2011 was approximately $100.0 million and $94.9 million, respectively.
(7)
BORROWINGS :
On February 29, 2012, the Company entered into Amendment Agreement No. 2 (the “Amendment Agreement”) to the Amended and Restated Credit Agreement dated as of March 26, 2010 (as amended, the “Credit Agreement”). The Amendment Agreement extends the maturity date of an aggregate U.S. dollar equivalent of approximately $1,231.6 million of the Company’s term loans and $66.7 million of letter of credit deposits securing the Company’s synthetic letter of credit facility to July 26, 2016. The maturity dates of the extended term loans and letter of credit deposits will accelerate to October 31, 2014 if any of the Company’s senior fixed rate notes due 2015 or senior floating rate notes due 2015 remain outstanding on October 31, 2014. The Company’s senior fixed rate notes due 2015 and senior floating rate notes due 2015 mature on February 1, 2015.
The term loans extended include (i) $858.1 million of U.S. dollar denominated term loans borrowed by the Company; (ii) ¥5,150.9 million of yen denominated term loans borrowed by the Company; (iii) $75.4 million of U.S. dollar denominated term loans borrowed by a Canadian subsidiary of the Company; (iv) €30.4 million of Euro denominated term loans borrowed by an Irish subsidiary of the Company; (v) £82.3 million of sterling denominated term loans borrowed by a U.K. subsidiary of the Company; and (vi) €46.1 million of Euro denominated term loans borrowed by German subsidiaries of the Company. From and after the effective date of the Amendment Agreement, (A) the Eurocurrency rate margin and letter of credit fees with respect to the extended U.S. dollar denominated and Euro denominated term loans and letter of credit deposits increased 1.375% to 3.25%, (B) the margin on extended U.S. dollar denominated base rate term loans increased 1.375% to 2.25% and (C) the margins on extended yen denominated term loans and sterling denominated term loans increased 1.375% to 3.375%. The maturity date, interest margins and letter of credit fees for lenders not extending their loans or letters of credit deposits remain unchanged. Consenting lenders received a one-time amendment fee of approximately $3.2 million in the aggregate on their total loan commitments. For the three and six months ended March 30, 2012, approximately $7.5 million of third-party costs directly attributable to the amendment were expensed and are included in “Interest and Other Financing Costs, net” in the Condensed Consolidated Statements of Income. Approximately $4.5 million of the third-party costs were paid to entities affiliated with Goldman Sachs Capital Partners and J.P. Morgan Partners.
The Company’s 5.00% senior notes, contractually due in June 2012, have been classified as noncurrent in the accompanying condensed consolidated balance sheet as the Company has the ability and intent to finance the repayments through additional

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

borrowings under the senior secured credit agreement.
(8)
DERIVATIVE INSTRUMENTS :
The Company enters into derivative contractual arrangements to manage changes in market conditions related to interest on debt obligations, foreign currency exposures and exposure to fluctuating natural gas, gasoline and diesel fuel prices. Derivative instruments utilized during the period include interest rate swap agreements, foreign currency forward exchange contracts, and natural gas, gasoline and diesel fuel agreements. All derivative instruments are recognized as either assets or liabilities on the balance sheet at fair value at the end of each quarter. The counterparties to the Company’s contractual derivative agreements are all major international financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties. For designated hedging relationships, the Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items.
Cash Flow Hedges
The Company has entered into $1.0 billion and ¥5.0 billion of interest rate swap agreements, fixing the rate on a like amount of variable rate term loan borrowings and floating rate notes. During the six months ended March 30, 2012, $2.3 billion of interest rate swap agreements matured. Changes in the fair value of a derivative that is designated as and meets all the required criteria for a cash flow hedge are recorded in accumulated other comprehensive income (loss) and reclassified into earnings as the underlying hedged item affects earnings. As of March 30, 2012 and September 30, 2011, approximately ($27.0) million and ($56.3) million of unrealized net of tax losses related to the interest rate swaps were included in “Accumulated other comprehensive loss,” respectively. The hedge ineffectiveness for these cash flow hedging instruments during the six months ended March 30, 2012 and April 1, 2011 was immaterial.
The Company previously entered into a $169.6 million amortizing cross currency swap to mitigate the risk of variability in principal and interest payments on the Canadian subsidiary’s variable rate debt denominated in U.S. dollars. The agreement fixes the rate on the variable rate borrowings and mitigates changes in the Canadian dollar/U.S. dollar exchange rate. In March 2012, the cross currency swap was amended to match the terms of the Canadian subsidiary's debt that was impacted by the Amendment Agreement. A portion of the swap was amended and extended to match the terms related to its variable rate debt denominated in U.S. dollars that was extended under the Amendment Agreement. The Company has designated the swaps as cash flow hedges. During the six months ended March 30, 2012 and April 1, 2011, approximately ($2.8) million and ($5.2) million of unrealized net of tax losses related to the swap were added to “Accumulated other comprehensive loss,” respectively. Approximately $7.3 million and $7.1 million were reclassified to offset net translation gains (losses) on the foreign currency denominated debt during the six months ended March 30, 2012 and April 1, 2011, respectively. As of March 30, 2012 and September 30, 2011, unrealized net of tax losses of approximately ($6.1) million and ($10.6) million related to the cross currency swap were included in “Accumulated other comprehensive loss,” respectively. As a result of amending the cross currency swap, the hedge ineffectiveness was approximately $3.0 million, which is recorded in "Interest and Other Financing Costs, net". The Company expects the hedge to be highly effective in future periods. The hedge ineffectiveness for this cash flow hedging instrument during the six months ended April 1, 2011 was immaterial.
The Company entered into a series of pay fixed/receive floating natural gas hedge agreements based on a NYMEX price in order to limit its exposure to price increases for natural gas, primarily in the Uniform and Career Apparel segment. As of March 30, 2012, the Company has contracts for approximately 112,000 MMBtu’s outstanding for fiscal 2012 that are designated as cash flow hedging instruments. As of March 30, 2012 and September 30, 2011, approximately ($0.2) million and ($0.1) million of unrealized net of tax losses, respectively, were recorded in “Accumulated other comprehensive loss” for these contracts. There was no hedge ineffectiveness for the six months ended March 30, 2012 and April 1, 2011.
 

10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the net of tax effect of our derivatives designated as cash flow hedging instruments on Comprehensive Income (in thousands):
 
 
Three Months
Ended
March 30, 2012
 
Three Months
Ended
April 1, 2011
Interest rate swap agreements
$
13,225

 
$
17,960

Cross currency swap agreements
1,752

 
1,460

Natural gas hedge agreements
9

 
—

Gasoline and diesel fuel agreements
—

 
997

 
$
14,986

 
$
20,417

 
Six Months
Ended
March 30, 2012  
 
Six Months
Ended
April 1, 2011  
Interest rate swap agreements
$
29,301

 
$
38,867

Cross currency swap agreements
4,478

 
1,861

Natural gas hedge agreements
(61
)
 
92

Gasoline and diesel fuel agreements
—

 
1,489

 
$
33,718

 
$
42,309

Derivatives not Designated in Hedging Relationships
The Company entered into a series of pay fixed/receive floating gasoline and diesel fuel agreements based on the Department of Energy weekly retail on-highway index in order to limit its exposure to price fluctuations for gasoline and diesel fuel. As of March 30, 2012, the Company has contracts for approximately 3.7 million gallons outstanding for fiscal 2012 and fiscal 2013. During the six months ended March 30, 2012, the Company entered into contracts totaling approximately 1.6 million gallons. Prior to October 1, 2011, these contracts met the required criteria to be designated as cash flow hedging instruments; therefore, changes in the fair value of these contracts were recorded in accumulated other comprehensive income (loss) and reclassified into earnings as the underlying hedged item affects earnings. Beginning in first quarter of fiscal 2012, the Company elected to de-designate its gasoline and diesel fuel agreements for accounting purposes. As a result, on a prospective basis, changes in the fair value of these contracts will be recorded in earnings. Amounts previously recorded in accumulated other comprehensive income (loss) will continue to be reclassified into earnings as the underlying item affects earnings. During the six months ended March 30, 2012, the Company recorded a pretax gain of $1.3 million in the Condensed Consolidated Statement of Income for the change in the fair value of these agreements. As of March 30, 2012 and September 30, 2011, unrealized net of tax losses of approximately ($0.6) million and ($1.1) million were recorded in “Accumulated other comprehensive loss” for these contracts, respectively. The hedge ineffectiveness for the gasoline and diesel fuel hedging instruments for the six months ended April 1, 2011 was immaterial.
As of March 30, 2012, the Company had foreign currency forward exchange contracts outstanding with notional amounts of €56.6 million, £7.0 million and CAD25.0 million to mitigate the risk of changes in foreign currency exchange rates on short-term intercompany loans to certain international subsidiaries. Gains and losses on these foreign currency exchange contracts are recognized in income currently as the contracts were not designated as hedging instruments, substantially offsetting currency transaction gains and losses on the short term intercompany loans.
 

11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the location and fair value of the Company’s derivatives designated and not designated as hedging instruments in our Condensed Consolidated Balance Sheets (in thousands):
 
 
 
Balance Sheet Location
 
March 30, 2012
 
September 30, 2011 
ASSETS
 
 
 
 
 
 
Not designated as hedging instruments:
 
 
 
 
 
 
Foreign currency forward exchange contracts
 
Prepayments
 
$
—

 
$
2,856

Gasoline and diesel fuel agreements
 
Prepayments
 
225

 
—

Total derivatives
 
 
 
$
225

 
$
2,856

 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
Designated as hedging instruments:
 
 
 
 
 
 
Natural gas hedge agreements
 
Accounts Payable
 
$
288

 
$
187

Gasoline and diesel fuel agreements
 
Accounts Payable
 
—

 
1,894

Interest rate swap agreements
 
Accrued Expenses
 
227

 
49,349

Interest rate swap agreements
 
Other Noncurrent Liabilities
 
44,350

 
44,054

Cross currency swap agreements
 
Other Noncurrent Liabilities
 
42,077

 
35,551

 
 
 
 
86,942

 
131,035

 
 
 
 
 
 
 
Not designated as hedging instruments:
 
 
 
 
 
 
Foreign currency forward exchange contracts
 
Accounts Payable
 
85

 
—

 
 
 
 
$
87,027

 
$
131,035

The following table summarizes the location of (gain) loss reclassified from “Accumulated other comprehensive loss” into earnings for derivatives designated as hedging instruments in the Condensed Consolidated Statements of Income (in thousands):
 
 
 
Account
 
Three Months
Ended
March 30, 2012
 
Three Months
Ended
April 1, 2011
Interest rate swap agreements
 
Interest Expense
 
$
26,620

 
$
30,829

Cross currency swap agreements
 
Interest Expense
 
1,817

 
2,234

Natural gas hedge agreements
 
Cost of services provided
 
59

 
—

Gasoline and diesel fuel agreements
 
Cost of services provided
 
—

 
(448
)
 
 

 
$
28,496

 
$
32,615

 
 
Account
 
Six Months
Ended
March 30, 2012 
 
Six Months
Ended
April 1, 2011
Interest rate swap agreements
 
Interest Expense
 
$
55,458

 
$
58,430

Cross currency swap agreements
 
Interest Expense
 
3,930

 
4,418

Natural gas hedge agreements
 
Cost of services provided
 
129

 
158

Gasoline and diesel fuel agreements
 
Cost of services provided
 
—

 
(369
)
 
 
 
 
$
59,517

 
$
62,637

At March 30, 2012, the net of tax loss expected to be reclassified from “Accumulated other comprehensive loss” into earnings over the next twelve months based on current market rates is approximately $19.1 million.
 

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the location of (gain) loss for our derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Income (in thousands):
 

 
Account
 
Three Months
Ended
March 30, 2012
 
Three Months
Ended
April 1, 2011
Gasoline and diesel fuel agreements
 
Cost of services provided
 
$
(466
)
 
$
—

Foreign currency forward exchange contracts
 
Interest Expense
 
2,522

 
(6,016
)

 
 
 
$
2,056

 
$
(6,016
)

 
Account
 
Six Months
Ended
March 30, 2012
 
Six Months
Ended
April 1, 2011
Gasoline and diesel fuel agreements
 
Cost of services provided
 
$
(1,003
)
 
$
—

Foreign currency forward exchange contracts
 
Interest Expense
 
1,740

 
(6,482
)

 
 
 
$
737

 
$
(6,482
)
(9)
CAPITAL STOCK :
Pursuant to the Stockholders Agreement of the Parent Company, upon termination of employment from the Company or one of its subsidiaries, members of the Company’s management (other than Mr. Neubauer) who hold shares of common stock of the Parent Company can cause the Parent Company to repurchase all of their initial investment shares (as defined) or shares acquired as a result of the exercise of Installment Share Purchase Opportunities at appraised fair market value. Generally, payment for shares repurchased could be, at the Parent Company’s option, in cash or installment notes, which would be effectively subordinated to all indebtedness of the Company. The amount of this potential repurchase obligation has been classified outside of shareholder’s equity, which reflects the Parent Company’s investment basis and capital structure in the Company’s condensed consolidated financial statements. The amount of common stock subject to repurchase as of March 30, 2012 and September 30, 2011 was $169.3 million and $158.1 million, which is based on approximately 11.7 million and 12.4 million shares of common stock of the Parent Company valued at $14.45 and $12.73 per share, respectively. The fair value of the common stock subject to repurchase is calculated using discounted cash flow techniques and comparable public company trading multiples. Inputs used in the discounted cash flow analysis include the weighted average cost of capital, long-term revenue growth rates, long-term EBIT margins and residual growth rates. Inputs used in the comparable public company trading multiples include the last-twelve-months' EBITDA multiple, forward EBITDA multiples and control premium. During the six months ended March 30, 2012 and April 1, 2011, approximately $27.7 million and $19.7 million of common stock of the Parent Company was repurchased, respectively, and has been reflected in the Company’s condensed consolidated financial statements. The Stockholders Agreement, the senior secured credit agreement, the indenture governing the 8.50% senior notes due 2015, the indenture governing the senior floating rate notes due 2015 and the indenture governing the notes issued by the Parent Company contain limitations on the amount the Company can expend for such share repurchases.
(10)
SHARE-BASED COMPENSATION :
During the three months and six months ended March 30, 2012, share-based compensation expense was approximately $5.7 million, before taxes of $2.2 million, and approximately $11.6 million, before taxes of $4.5 million, respectively. During the three and six months ended April 1, 2011, share-based compensation expense was approximately $3.0 million, before taxes of $1.2 million, and approximately $6.4 million, before taxes of $2.5 million, respectively.
Stock Options
Time-Based Options
The compensation cost charged to expense during the three and six months ended March 30, 2012 for Time-Based Options was approximately $2.0 million and $4.1 million, respectively. The compensation cost charged to expense during the three and six months ended April 1, 2011 for Time-Based Options was approximately $2.6 million and $6.0 million, respectively. As of March 30, 2012, there was approximately $19.0 million of unrecognized compensation expense related to nonvested Time-Based Options, which is expected to be recognized over a weighted-average period of approximately 2.86 years.

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of Time-Based Options activity is presented below:
 
Options
Shares
(000s)
 
Weighted-
Average
Exercise
Price
Outstanding at September 30, 2011
15,982

 
$
8.73

Granted
1,914

 
$
13.84

Exercised
(1,126
)
 
$
7.66

Forfeited and expired
(570
)
 
$
11.26

Outstanding at March 30, 2012
16,200

 
$
10.24

Performance-Based Options
Approximately $2.5 million and $5.6 million was charged to expense during the three and six months ended March 30, 2012 for Performance-Based Options, respectively. During the three and six months ended April 1, 2011, $0 was charged to expense for Performance-Based Options. As of March 30, 2012, there was approximately $4.6 million of unrecognized compensation expense related to nonvested Performance-Based Options, which is expected to be recognized over a weighted-average period of approximately 1 year.
A summary of Performance-Based Options activity is presented below:
 
Options
Shares
(000s)
 
Weighted-
Average
Exercise
Price
Outstanding at September 30, 2011
16,051

 
$
8.73

Granted
1,914

 
$
13.84

Exercised
(498
)
 
$
7.15

Forfeited and expired
(1,354
)
 
$
9.25

Outstanding at March 30, 2012
16,113

 
$
9.35

Installment Stock Purchase Opportunities (“ISPOs”)
The Company recorded approximately $0.1 million and $0.3 million of compensation expense related to these awards during the three and six months ended March 30, 2012, respectively. As of March 30, 2012, there was approximately $1.6 million of unrecognized compensation expense related to nonvested ISPOs, which is expected to be recognized over a weighted-average period of approximately 3.80 years. During the six months ended March 30, 2012, the Company granted 300,000 ISPOs at a weighted-average exercise price of $14.01.
Seamless Unit Options
The Company recognized compensation expense of approximately $0.6 million and $1.1 million for Seamless unit options during the three and six months ended March 30, 2012, respectively. During the six months ended March 30, 2012, Seamless granted approximately 2.2 million unit options.
Deferred Stock Units
The Company granted 31,140 deferred stock units during the six months ended March 30, 2012. The compensation cost charged to expense during the three and six months ended March 30, 2012 for deferred stock units was approximately $0.5 million in each period. The Company granted 28,480 deferred stock units during the six months ended April 1, 2011. The compensation cost charged to expense during the three and six months ended April 1, 2011 for deferred stock units was approximately $0.4 million in each period.
(11) ACCOUNTS RECEIVABLE SECURITIZATION :
The Company has an agreement (the Receivables Facility) with several financial institutions whereby it sells on a continuous basis an undivided interest in all eligible trade accounts receivable, as defined in the Receivables Facility. The maximum amount of the facility is $250 million, which expires in January 2013. Pursuant to the Receivables Facility, the Company formed ARAMARK Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote subsidiary. ARAMARK

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Receivables, LLC was formed for the sole purpose of buying and selling receivables generated by certain subsidiaries of the Company. Under the Receivables Facility, the Company and certain of its subsidiaries transfer without recourse all of their accounts receivable to ARAMARK Receivables, LLC. As collections reduce previously transferred interests, interests in new, eligible receivables are transferred to ARAMARK Receivables, LLC, subject to meeting certain conditions. At March 30, 2012 and September 30, 2011, the amount of outstanding borrowings under the Receivables Facility was $223.9 million and $225.9 million and is included in “Long-Term Borrowings”, respectively. The Receivables Facility has been classified as noncurrent in the accompanying condensed consolidated balance sheet as the Company has the ability and intent to finance the repayments through additional borrowings under the senior secured credit agreement or through refinancing of the Receivables Facility.
(12)
EQUITY INVESTMENTS :
The Company’s principal equity method investment is its 50% ownership interest in AIM Services Co., Ltd., a Japanese food and support services company (approximately $254.3 million and $269.7 million at March 30, 2012 and September 30, 2011, respectively, which is included in “Other Assets” in the Condensed Consolidated Balance Sheets). Summarized financial information for AIM Services Co., Ltd. follows (in thousands):

 
Three Months
Ended
 
Three Months
Ended
 
March 30, 2012
 
April 1, 2011 
Sales
$
475,894

 
$
429,942

Gross profit
51,695

 
52,127

Net income
6,763

 
9,066

 
Six Months
Ended
 
Six Months
Ended
 
March 30, 2012
 
April 1, 2011 
Sales
$
960,096

 
$
867,389

Gross profit
110,339

 
109,750

Net income
17,595

 
20,728

ARAMARK’s equity in undistributed earnings of AIM Services Co., Ltd., net of amortization related to purchase accounting for the Transaction, was $2.3 million and $6.7 million for the three and six months ended March 30, 2012, respectively. ARAMARK’s equity in undistributed earnings of AIM Services Co., Ltd., net of amortization related to purchase accounting for the Transaction, was $3.5 million and $9.1 million for the three and six months ended April 1, 2011, respectively.
(13)
BUSINESS SEGMENTS :
Sales and operating income by reportable segment follow (in thousands):
 
 
Three Months
Ended
 
Three Months
Ended
Sales  
March 30, 2012
 
April 1, 2011 
Food and Support Services—North America
$
2,336,609

 
$
2,212,307

Food and Support Services—International
671,679

 
677,280

Uniform and Career Apparel
337,272

 
330,673

 
$
3,345,560

 
$
3,220,260

 

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 
Three Months
Ended
 
Three Months
Ended
Operating Income  
March 30, 2012
 
April 1, 2011 
Food and Support Services—North America
$
101,074

 
$
88,465

Food and Support Services—International
22,289

 
19,875

Uniform and Career Apparel
23,543

 
25,157

 
146,906

 
133,497

Corporate
(13,192
)
 
(11,229
)
Operating Income
133,714

 
122,268

Interest and other financing costs, net
(118,533
)
 
(92,765
)
Income from Continuing Operations Before Income Taxes
$
15,181

 
$
29,503

 
 
 
 
Six Months
Ended
 
Six Months
Ended
Sales  
March 30, 2012
 
April 1, 2011 
Food and Support Services—North America
$
4,733,857

 
$
4,480,343

Food and Support Services—International
1,356,518

 
1,349,716

Uniform and Career Apparel
677,797

 
674,707

 
$
6,768,172

 
$
6,504,766

 
 
Six Months
Ended
 
Six Months
Ended
Operating Income
March 30, 2012
 
April 1, 2011 
Food and Support Services—North America
$
227,319

 
$
216,836

Food and Support Services—International
42,843

 
32,455

Uniform and Career Apparel
56,585

 
59,686

 
326,747

 
308,977

Corporate
(26,157
)
 
(22,867
)
Operating Income
300,590

 
286,110

Interest and other financing costs, net
(227,347
)
 
(201,911
)
Income from Continuing Operations Before Income Taxes
$
73,243

 
$
84,199

In the first and second fiscal quarters, within the Food and Support Services—North America segment, historically there has been a lower level of activity at the sports, entertainment and recreational food service operations that is partly offset by increased activity in the educational operations. However, in the third and fourth fiscal quarters, historically there has been a significant increase at sports, entertainment and recreational accounts that is partially offset by the effect of summer recess on the educational accounts.
Food and Support Services—North America operating income for the six months ended March 30, 2012 includes planned transition and integration costs of $4.3 million related to the Filterfresh acquisition and a favorable risk insurance adjustment of $1.7 million related to favorable claims experience. Food and Support Services—North America operating income for the six months ended April 1, 2011 includes other income recognized of $7.8 million related to a compensation agreement signed with the National Park Service (NPS) under which the NPS agreed to pay down a portion of our investment (possessory interest) in certain assets at one of our NPS sites in the Sports & Entertainment sector, severance related expenses of $2.6 million and a favorable risk insurance adjustment of $0.9 million related to favorable claims experience.
Food and Support Services—International operating income for the three and six months ended March 30, 2012 includes a favorable adjustment of $1.5 million related to a non-income tax settlement in the U.K. in both periods and $0.4 million and $1.7 million of severance related expenses, respectively. Food and Support Services—International operating income for the three and six months ended April 1, 2011 includes a gain of $6.4 million related to the divestiture of the Company’s 67% ownership interest in the security business of its Chilean subsidiary (see Note 3) in both periods, favorable non-income tax settlements in the U.K. of $5.3 million in both periods, a goodwill and other intangible assets impairment charge of $5.3 million related to our India operations in both periods and severance related expenses of $2.9 million and $9.7 million,

16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

respectively.
Uniform and Career Apparel operating income for the six months ended March 30, 2012 includes a favorable risk insurance adjustment of $5.7 million related to favorable claims experience and severance related expenses of $4.0 million. Uniform and Career Apparel operating income for the three and six months ended April 1, 2011 includes a gain of $2.6 million related to a property settlement of an eminent domain claim. Uniform and Career Apparel operating income for the six months ended April 1, 2011 also includes a risk insurance adjustment of $4.8 million related to favorable claims experience and severance related expenses of $1.3 million.
Corporate expenses include share-based compensation expense (see Note 10). Corporate expenses for the six months ended April 1, 2011 include severance related expenses of $1.0 million.
Interest and Other Financing Costs, net, for the three and six months of fiscal 2012 includes $10.5 million in both periods of third-party costs related to the amendment of the senior secured credit agreement that extended the maturity date of $1,231.6 million of the Company's outstanding term loans (see Note 7) and the amendment of the Company's Canadian subsidiary cross currency swap. Interest and Other Financing Costs, net, for the three and six month periods of fiscal 2011 includes interest income of approximately $14.1 million in both periods related to favorable non-income tax settlements in the U.K.
(14)
NEW ACCOUNTING STANDARD UPDATES :
In January 2010, the FASB issued an accounting standard update that requires new disclosures about recurring and non-recurring fair value measurements. The new disclosures include significant transfers into and out of level 1 and 2 measurements and changes the current disclosure requirement of level 3 measurement activity from a net basis to a gross basis. The standard also clarifies existing disclosure guidance about the level of disaggregation, inputs and valuation techniques. The new and revised disclosures were effective for ARAMARK in fiscal 2010, except for the revised disclosures about level 3 measurement activity, which became effective for ARAMARK in the first quarter of fiscal 2012 (see Note 16).
 
 
In May 2011, the FASB issued an accounting standard update that is intended to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The new standard does not extend the use of fair value but rather provides clarification of existing guidance and additional disclosures. The Company adopted this guidance prospectively beginning in the second quarter of fiscal 2012. The standard update has resulted in expanded disclosures, specifically regarding level 3 fair value measurements (see Note 9 and Note 16).
In September 2011, the FASB issued an accounting standard update that simplifies how entities test goodwill for impairment. The amendment permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The update does not address impairment testing of the indefinite-lived intangibles. The guidance is effective for the Company beginning in fiscal 2013; however, early adoption is permitted. The Company is currently evaluating the impact of this pronouncement.
In June 2011, the FASB issued an accounting standard update that modifies the presentation of comprehensive income in the financial statements. The standard requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This standard eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. In December 2011, the FASB issued an accounting standard update which deferred the portion of this update related to the presentation of reclassification adjustments between other comprehensive income and net income. The guidance is effective retrospectively for the Company beginning in the first quarter of fiscal 2013. The Company is currently evaluating the impact of this pronouncement.
In September 2011, the FASB issued an accounting standard update that requires companies participating in multiemployer pension plans to disclose more information about their involvement in the plans, specifically related to the amount of employer contributions made to each significant plan and to all plans in the aggregate, whether an employer’s contributions represent more than 5% of total contributions to the plan, whether any plans are subject to a funding improvement plan, the expiration date(s) of the collective bargaining agreement(s) and any minimum funding arrangements, the most recent certified funded status of the plan, as determined by the plan’s “zone status,” (required by the Pension Protection Act of 2006) and a description of the nature and effect of any changes affecting comparability for each period an income statement is presented. The guidance is effective for the Company’s 2012 fiscal year-end. The Company is currently evaluating the impact of this pronouncement.
In December 2011, the FASB issued an accounting standard update that requires companies with financial instruments and derivative instruments that are offset on the balance sheet or subject to a master netting arrangement to provide additional

17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

disclosures regarding the instruments impact on a company’s financial position. The guidance is effective for the Company beginning in the first quarter of fiscal 2014. The Company is currently evaluating the impact of this pronouncement.
(15)
COMMITMENTS AND CONTINGENCIES :
Certain of the Company’s lease arrangements, primarily vehicle leases, with terms of one to eight years, contain provisions related to residual value guarantees. The maximum potential liability to the Company under such arrangements was approximately $97.0 million at March 30, 2012 if the terminal fair value of vehicles coming off lease was zero. Consistent with past experience, management does not expect any significant payments will be required pursuant to these arrangements. No amounts have been accrued for guarantee arrangements at March 30, 2012.
From time to time, the Company is a party to various legal actions and investigations involving claims incidental to the conduct of its business, including actions by clients, customers, employees, government entities and third parties, including under federal and state employment laws, wage and hour laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims statutes, minority business enterprise and women owned business enterprise statutes, contractual disputes, antitrust and competition laws and dram shop laws. Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or cash flows. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or cash flows.
The Company has been informed that an Illinois state civil action has been filed against a subsidiary of the Company by an unnamed Relator under the Illinois Whistleblower Reward and Protection Act in the Circuit Court of Cook County, Illinois County Department, Law Division. The action alleges, among other things, that the subsidiary has not complied with the requirement to contract with minority owned and women owned businesses in connection with its contracts with Cook County and seeks monetary damages. The Company has accrued its best estimate of this potential liability as of March 30, 2012.
  (16) FAIR VALUE OF ASSETS AND LIABILITIES :
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows:
•
Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets
•
Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument
•    Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement
Recurring Fair Value Measurements
The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, borrowings and derivatives. Management believes that the carrying value of cash and cash equivalents, accounts receivable and accounts payable are representative of their respective fair values. In conjunction with the fair value measurement of the derivative instruments, the Company made an accounting policy election to measure the credit risk of its derivative instruments, that are subject to master netting agreements, on a net basis by counterparty portfolio. The fair value of the Company’s debt at March 30, 2012 and September 30, 2011 was $5,833.5 million and $5,505.7 million, respectively. The carrying value of the Company’s debt at March 30, 2012 and September 30, 2011 was $5,816.6 million and $5,637.7 million, respectively. The fair values were computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the respective periods. The inputs utilized in estimating the fair value of the Company's debt has been classified as level 2 in the fair value hierarchy levels.
At March 30, 2012 and September 30, 2011, the following financial assets and financial liabilities were measured at fair value on a recurring basis using the type of inputs shown (in thousands):
 

18

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 
March 30, 2012
 
September 30, 2011
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Total
Assets:
 
 
 
 
 
 
 
 
 
Foreign currency forward exchange contracts
$
—

 
$
—

 
$
—

 
$
—

 
$
2,856

Gasoline and diesel fuel agreements
—

 
225

 
—

 
225

 
—

Total assets measured at fair value on a recurring basis
$
—

 
$
225

 
$
—

 
$
225

 
$
2,856

 

 

 

 

 

Liabilities:

 

 

 

 

Interest rate swap agreements
$
—

 
$
44,577

 
$
—

 
$
44,577

 
$
93,403

Cross currency swap agreements
—

 
42,077

 
—

 
42,077

 
35,551

Natural gas hedge agreements
—

 
288

 
—

 
288

 
187

Gasoline and diesel fuel agreements
—

 
—

 
—

 
—

 
1,894

Foreign currency forward exchange contracts
—

 
85

 
—

 
85

 
—

Total liabilities measured at fair value on a recurring basis
$
—

 
$
87,027

 
$
—

 
$
87,027

 
$
131,035

Common Stock Subject to Repurchase
$
—

 
$
—

 
$
169,328

 
$
169,328

 
$
158,061

The following table presents the changes in financial instruments for which level 3 inputs were significant to their valuation for the six months ended March 30, 2012 (in thousands):
 
 
Common Stock
Subject to
Repurchase
Balance at September 30, 2011
$
158,061

Issuances of Parent Company common stock
806

Repurchases of Parent Company common stock
(9,746
)
Change in fair market value of Parent Company common stock
20,207

Balance at March 30, 2012
$
169,328

(17)
ARAMARK HOLDINGS CORPORATION (PARENT COMPANY) :
ARAMARK Holdings Corporation has 600.0 million common shares authorized, approximately 214.0 million common shares issued and approximately 203.2 million common shares outstanding as of March 30, 2012.
On April 18, 2011, the Parent Company completed a private placement of $600 million, net of a 1% discount, in aggregate principal amount of 8.625% / 9.375% Senior Notes due 2016 (the Parent Company Notes). Interest on the Parent Company Notes accrues at the rate of 8.625% per annum with respect to interest payments made in cash and 9.375% per annum with respect to any payment in-kind interest. The Parent Company Notes are obligations of the Parent Company, are not guaranteed by the Company and its subsidiaries and are structurally subordinated to all existing and future indebtedness and other liabilities of the Company and its subsidiaries, including trade payables, the senior secured revolving credit facility, the senior secured term loan facility, 8.50% senior notes due 2015, senior floating rate notes due 2015 and 5.00% senior notes due 2012. The Parent Company is obligated to pay interest on the Parent Company Notes in cash to the extent the Company has sufficient capacity to distribute such amounts to the Parent Company under the covenants relating to the Company’s outstanding indebtedness, including the senior secured revolving credit facility, the senior secured term loan facility, the 8.50% senior notes due 2015 and the senior floating rate notes due 2015. If the Company does not have sufficient covenant capacity to distribute such amounts to the Parent Company, the Parent Company will have the ability to pay the interest on the Parent Company Notes through the issuance of additional notes.
At March 30, 2012, ARAMARK Holdings Corporation had long-term borrowings of $595.0 million, net of discount, interest payable of $21.2 million and unamortized deferred financing costs on the Parent Company Notes of $12.2 million. For the

19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

three and six months ended March 30, 2012, ARAMARK Holdings Corporation recorded Interest and Other Financing Costs, net, of $13.7 million and $27.4 million, respectively. In November 2011, the Company distributed approximately $27.7 million to the Parent Company as an advance which was used to pay the interest on the Parent Company Notes. During the first quarter of fiscal 2012, the advance was reduced by approximately $14.9 million, reflecting a non-cash reduction in the Company’s income taxes payable due to the tax benefit attributable to the interest on the Parent Company Notes.
(18)
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF ARAMARK CORPORATION AND SUBSIDIARIES :
The following condensed consolidating financial statements of ARAMARK Corporation and subsidiaries have been prepared pursuant to Rule 3-10 of Regulation S-X.
These condensed consolidating financial statements have been prepared from the Company’s financial information on the same basis of accounting as the condensed consolidated financial statements. Interest expense and certain administrative costs are partially allocated to all of the subsidiaries of the Company. Goodwill and other intangible assets have been allocated to all of the subsidiaries of the Company based on management’s estimates. On January 26, 2007, in connection with the Transaction, the Company issued 8.50% senior notes due 2015 and senior floating rate notes due 2015. The senior notes are jointly and severally guaranteed on a senior unsecured basis by substantially all of the Company’s existing and future domestic subsidiaries (excluding the receivables facility subsidiary) (“Guarantors”). Each of the Guarantors is wholly-owned, directly or indirectly, by the Company. All other subsidiaries of the Company, either direct or indirect, do not guarantee the senior notes (“Non-Guarantors”). The Guarantors also guarantee certain other unregistered debt.
 
 

20

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
March 30, 2012
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
22.5

 
$
38.7

 
$
39.7

 
$
—

 
$
100.9

Receivables
2.8

 
271.7

 
1,077.3

 
—

 
1,351.8

Inventories, at lower of cost or market
15.9

 
388.3

 
83.1

 
—

 
487.3

Prepayments and other current assets
5.2

 
121.6

 
88.8

 
—

 
215.6

Assets held for sale
—

 
2.8

 
—

 
—

 
2.8

Total current assets
46.4

 
823.1

 
1,288.9

 
—

 
2,158.4

 
 
 
 
 
 
 
 
 
 
Property and Equipment, net
37.1

 
763.2

 
227.6

 
—

 
1,027.9

Goodwill
173.0

 
3,766.3

 
772.9

 
—

 
4,712.2

Investment in and Advances to Subsidiaries
6,857.7

 
460.6

 
189.7

 
(7,508.0
)
 
—

Other Intangible Assets
46.7

 
1,371.1

 
286.4

 
—

 
1,704.2

Other Assets
69.3

 
558.6

 
343.7

 
(2.0
)
 
969.6

 
$
7,230.2

 
$
7,742.9

 
$
3,109.2

 
$
(7,510.0
)
 
$
10,572.3

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
Current maturities of long-term borrowings
$
0.7

 
$
11.4

 
$
47.0

 
$
—

 
$
59.1

Accounts payable
138.9

 
306.2

 
311.0

 
—

 
756.1

Accrued expenses and other liabilities
139.8

 
676.3

 
250.9

 
0.1

 
1,067.1

Total current liabilities
279.4

 
993.9

 
608.9

 
0.1

 
1,882.3

Long-term Borrowings
4,948.5

 
33.9

 
775.2

 
—

 
5,757.6

Deferred Income Taxes and Other Noncurrent Liabilities
333.8

 
678.6

 
218.5

 
—

 
1,230.9

Intercompany Payable
—

 
5,628.0

 
1,080.2

 
(6,708.2
)
 
—

Common Stock Subject to Repurchase
169.3

 
—

 
—

 
—

 
169.3

Total Equity
1,499.2

 
408.5

 
426.4

 
(801.9
)
 
1,532.2

 
$
7,230.2

 
$
7,742.9

 
$
3,109.2

 
$
(7,510.0
)
 
$
10,572.3




21

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
September 30, 2011
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
137.4

 
$
32.2

 
$
43.7

 
$
—

 
$
213.3

Receivables
3.1

 
241.9

 
1,007.3

 
—

 
1,252.3

Inventories, at lower of cost or market
16.1

 
356.6

 
78.1

 
—

 
450.8

Prepayments and other current assets
31.9

 
118.5

 
61.2

 
—

 
211.6

Assets held for sale
—

 
2.8

 
—

 
—

 
2.8

Total current assets
188.5

 
752.0

 
1,190.3

 
—

 
2,130.8

 
 
 
 
 
 
 
 
 
 
Property and Equipment, net
38.3

 
751.6

 
214.8

 
—

 
1,004.7

Goodwill
173.1

 
3,766.1

 
701.4

 
—

 
4,640.6

Investment in and Advances to Subsidiaries
6,609.0

 
250.7

 
180.9

 
(7,040.6
)
 
—

Other Intangible Assets
51.4

 
1,442.7

 
254.3

 
—

 
1,748.4

Other Assets
75.5

 
554.5

 
357.0

 
(2.0
)
 
985.0

 
$
7,135.8

 
$
7,517.6

 
$
2,898.7

 
$
(7,042.6
)
 
$
10,509.5

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
Current maturities of long-term borrowings
$
0.7

 
$
10.0

 
$
38.3

 
$
—

 
$
49.0

Accounts payable
132.9

 
335.1

 
307.4

 
—

 
775.4

Accrued expenses and other liabilities
218.2

 
770.0

 
238.3

 
0.1

 
1,226.6

Total current liabilities
351.8

 
1,115.1

 
584.0

 
0.1

 
2,051.0

Long-term Borrowings
4,833.7

 
34.7

 
720.2

 
—

 
5,588.6

Deferred Income Taxes and Other Noncurrent Liabilities
347.0

 
695.7

 
192.1

 
—

 
1,234.8

Intercompany Payable
—

 
5,352.7

 
1,158.7

 
(6,511.4
)
 
—

Common Stock Subject to Repurchase
158.1

 
—

 
—

 
—

 
158.1

Total Equity
1,445.2

 
319.4

 
243.7

 
(531.3
)
 
1,477.0

 
$
7,135.8

 
$
7,517.6

 
$
2,898.7

 
$
(7,042.6
)
 
$
10,509.5


 
 

22

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the three months ended March 30, 2012
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
Sales
$
253.6

 
$
2,013.2

 
$
1,078.8

 
$
—

 
$
3,345.6

Costs and Expenses:
 
 
 
 
 
 
 
 
 
Cost of services provided
236.6

 
1,803.4

 
988.7

 
—

 
3,028.7

Depreciation and amortization
4.7

 
94.9

 
32.1

 
—

 
131.7

Selling and general corporate expenses
14.9

 
30.1

 
6.5

 
—

 
51.5

Interest and other financing costs
108.2

 
(0.2
)
 
10.5

 
—

 
118.5

Expense allocations
(102.4
)
 
96.5

 
5.9

 
—

 
—

 
262.0

 
2,024.7

 
1,043.7

 
—

 
3,330.4

Income (Loss) from Continuing Operations before Income Taxes
(8.4
)
 
(11.5
)
 
35.1

 
—

 
15.2

Provision (Benefit) for Income Taxes
(2.5
)
 
(7.9
)
 
14.6

 
—

 
4.2

Equity in Net Income of Subsidiaries
16.9

 
—

 
—

 
(16.9
)
 
—

Income (loss) from Continuing Operations
11.0

 
(3.6
)
 
20.5

 
(16.9
)
 
11.0

Income from Discontinued Operations, net of tax
—

 
—

 
—

 
—

 
—

Net income (loss)
11.0

 
(3.6
)
 
20.5

 
(16.9
)
 
11.0

Less: Net income attributable to noncontrolling interest
—

 
—

 
1.1

 
—

 
1.1

Net income (loss) attributable to ARAMARK shareholder
$
11.0

 
$
(3.6
)
 
$
19.4

 
$
(16.9
)
 
$
9.9

 
 

23

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the six months ended March 30, 2012
(in millions)
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
Sales
$
510.3

 
$
4,093.0

 
$
2,164.9

 
$
—

 
$
6,768.2

Costs and Expenses:
 
 
 
 
 
 
 
 
 
Cost of services provided
480.7

 
3,634.3

 
1,989.4

 
—

 
6,104.4

Depreciation and amortization
9.6

 
189.2

 
64.8

 
—

 
263.6

Selling and general corporate expenses
28.9

 
57.8

 
12.9

 
—

 
99.6

Interest and other financing costs
208.3

 
(0.2
)
 
19.2

 
—

 
227.3

Expense allocations
(198.1
)
 
186.3

 
11.8

 
—

 
—

 
529.4

 
4,067.4

 
2,098.1

 
—

 
6,694.9

Income (Loss) from Continuing Operations before Income Taxes
(19.1
)
 
25.6

 
66.8

 
—

 
73.3

Provision (Benefit) for Income Taxes
(6.0
)
 
8.1

 
21.1

 
—

 
23.2

Equity in Net Income of Subsidiaries
63.5

 
—

 
—

 
(63.5
)
 
—

Income from Continuing Operations
50.4

 
17.5

 
45.7

 
(63.5
)
 
50.1

Income from Discontinued Operations, net of tax
—

 
0.3

 
—

 
—

 
0.3

Net income
50.4

 
17.8

 
45.7

 
(63.5
)
 
50.4

Less: Net income attributable to noncontrolling interest
—

 
—

 
1.8

 
—

 
1.8

Net income attributable to ARAMARK shareholder
$
50.4

 
$
17.8

 
$
43.9

 
$
(63.5
)
 
$
48.6


 

 
 

24

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the three months ended April 1, 2011
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
Sales
$
246.3

 
$
1,971.3

 
$
1,002.7

 
$
—

 
$
3,220.3

Costs and Expenses:
 
 
 
 
 
 
 
 
 
Cost of services provided
234.2

 
1,763.4

 
927.5

 
—

 
2,925.1

Depreciation and amortization
5.0

 
95.8

 
26.5

 
—

 
127.3

Selling and general corporate expenses
12.3

 
27.3

 
6.0

 
—

 
45.6

Interest and other financing costs
100.2

 
—

 
(7.4
)
 
—

 
92.8

Expense allocations
(98.8
)
 
92.3

 
6.5

 
—

 
—

 
252.9

 
1,978.8

 
959.1

 
—

 
3,190.8

Income (loss) from Continuing Operations before Income Taxes
(6.6
)
 
(7.5
)
 
43.6

 
—

 
29.5

Provision (benefit) for Income Taxes
(2.0
)
 
(4.7
)
 
16.2

 
—

 
9.5

Equity in Net Income of Subsidiaries
25.0

 
—

 
—

 
(25.0
)
 
—

Income (loss) from Continuing Operations
20.4

 
(2.8
)
 
27.4

 
(25.0
)
 
20.0

Income from Discontinued Operations, net of tax
—

 
0.4

 
—

 
—

 
0.4

Net income (loss)
$
20.4

 
$
(2.4
)
 
$
27.4

 
$
(25.0
)
 
$
20.4


 
 

25

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the six months ended April 1, 2011
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
Sales
$
501.2

 
$
4,031.5

 
$
1,972.1

 
$
—

 
$
6,504.8

Costs and Expenses:
 
 
 
 
 
 
 
 
 
Cost of services provided
466.6

 
3,577.3

 
1,830.5

 
—

 
5,874.4

Depreciation and amortization
10.1

 
191.6

 
52.1

 
—

 
253.8

Selling and general corporate expenses
25.7

 
53.3

 
11.5

 
—

 
90.5

Interest and other financing costs
201.7

 
0.2

 
—

 
—

 
201.9

Expense allocations
(199.2
)
 
188.3

 
10.9

 
—

 
—

 
504.9

 
4,010.7

 
1,905.0

 
—

 
6,420.6

Income (loss) from Continuing Operations before Income Taxes
(3.7
)
 
20.8

 
67.1

 
—

 
84.2

Provision (benefit) for Income Taxes
(1.1
)
 
5.4

 
21.4

 
—

 
25.7

Equity in Net Income of Subsidiaries
61.4

 
—

 
—

 
(61.4
)
 
—

Income from Continuing Operations
58.8

 
15.4

 
45.7

 
(61.4
)
 
58.5

Income from Discontinued Operations, net of tax
—

 
0.3

 
—

 
—

 
0.3

Net income
$
58.8

 
$
15.7

 
$
45.7

 
$
(61.4
)
 
$
58.8


 
 

26

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the six months ended March 30, 2012
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
Net cash provided by operating activities
$
7.1

 
$
16.4

 
$
36.7

 
$
(2.9
)
 
$
57.3

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment and client contract investments and other
(5.7
)
 
(97.0
)
 
(47.1
)
 
—

 
(149.8
)
Disposals of property and equipment
0.9

 
1.8

 
1.9

 
—

 
4.6

Proceeds from divestiture
—

 
0.3

 
4.2

 
—

 
4.5

Acquisitions of businesses, net of cash acquired
—

 
(138.6
)
 
(11.8
)
 
—

 
(150.4
)
Other investing activities
0.4

 
(0.5
)
 
0.7

 
—

 
0.6

Net cash used in investing activities
(4.4
)
 
(234.0
)
 
(52.1
)
 
—

 
(290.5
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term borrowings
117.0

 
(0.3
)
 
70.6

 
—

 
187.3

Payments of long-term borrowings
(0.3
)
 
(5.9
)
 
(11.6
)
 
—

 
(17.8
)
Net change in funding under the Receivables Facility
—

 
—

 
(2.0
)
 
—

 
(2.0
)
Advance to Parent Company
(27.7
)
 
—

 
—

 
—

 
(27.7
)
Proceeds from issuance of Parent Company common stock
5.2

 
—

 
—

 
—

 
5.2

Repurchase of Parent Company common stock
(12.5
)
 
—

 
—

 
—

 
(12.5
)
Other financing activities
(8.5
)
 
(2.7
)
 
(0.5
)
 
—

 
(11.7
)
Change in intercompany, net
(190.8
)
 
233.0

 
(45.1
)
 
2.9

 
—

Net cash provided by (used in) financing activities
(117.6
)
 
224.1

 
11.4

 
2.9

 
120.8

Increase (decrease) in cash and cash equivalents
(114.9
)
 
6.5

 
(4.0
)
 
—

 
(112.4
)
Cash and cash equivalents, beginning of period
137.4

 
32.2

 
43.7

 
—

 
213.3

Cash and cash equivalents, end of period
$
22.5

 
$
38.7

 
$
39.7

 
$
—

 
$
100.9


 
 

27

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the six months ended April 1, 2011
(in millions)
 
 
ARAMARK
Corporation  
 
Guarantors  
 
Non
Guarantors
 
Eliminations
 
Consolidated
Net cash provided by (used in) operating activities
$
27.0

 
$
69.8

 
$
(200.4
)
 
$
(21.9
)
 
$
(125.5
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Purchases of property and equipment and client contract investments and other
(5.0
)
 
(95.0
)
 
(29.3
)
 
—

 
(129.3
)
Disposals of property and equipment
0.3

 
5.2

 
3.5

 
—

 
9.0

Proceeds from divestitures
—

 
—

 
10.0

 
—

 
10.0

Acquisitions of businesses, net of cash acquired
—

 
(155.5
)
 
—

 
—

 
(155.5
)
Other investing activities
0.9

 
11.0

 
(5.4
)
 
—

 
6.5

Net cash used in investing activities
(3.8
)
 
(234.3
)
 
(21.2
)
 
—

 
(259.3
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from long-term borrowings
73.8

 
—

 
21.4

 
—

 
95.2

Payments of long-term borrowings
(5.4
)
 
(6.8
)
 
(6.2
)
 
—

 
(18.4
)
Net change in funding under the Receivables Facility
—

 
—

 
245.7

 
—

 
245.7

Proceeds from issuance of Parent Company common stock
2.3

 
—

 
—

 
—

 
2.3

Repurchase of Parent Company common stock
(9.4
)
 
—

 
—

 
—

 
(9.4
)
Other financing activities
0.1

 
(2.4
)
 
—

 
—

 
(2.3
)
Change in intercompany, net
(151.3
)
 
167.7

 
(38.3
)
 
21.9

 
—

Net cash provided by (used in) financing activities
(89.9
)
 
158.5

 
222.6

 
21.9

 
313.1

Increase (decrease) in cash and cash equivalents
(66.7
)
 
(6.0
)
 
1.0

 
—

 
(71.7
)
Cash and cash equivalents, beginning of period
79.4

 
33.0

 
48.5

 
—

 
160.9

Cash and cash equivalents, end of period
12.7

 
27.0

 
49.5

 
—

 
89.2

Less: Cash and cash equivalents included in assets held for sale
—

 
0.4

 
—

 
—

 
0.4

Cash and cash equivalents, end of period
$
12.7

 
$
26.6

 
$
49.5

 
$
—

 
$
88.8




28

ITEM 2 .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations for the three and six months ended March 30, 2012 and April 1, 2011 should be read in conjunction with the Company’s audited consolidated financial statements, and the notes to those statements, included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2011.
ARAMARK Corporation (the “Company” or “ARAMARK”) was acquired on January 26, 2007 through a merger transaction with RMK Acquisition Corporation, a Delaware corporation controlled by investment funds associated with GS Capital Partners, CCMP Capital Advisors, J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC (collectively, the “Sponsors”), Joseph Neubauer, Chairman and former Chief Executive Officer of ARAMARK, and certain other members of the Company’s management. The acquisition was accomplished through the merger of RMK Acquisition Corporation with and into ARAMARK Corporation with ARAMARK Corporation being the surviving company (the “Transaction”).
The Company is a wholly-owned subsidiary of ARAMARK Intermediate Holdco Corporation, which is wholly-owned by ARAMARK Holdings Corporation (the “Parent Company”). ARAMARK Holdings Corporation, ARAMARK Intermediate Holdco Corporation and RMK Acquisition Corporation were formed for the purpose of facilitating the Transaction.
On March 30, 2007, ARAMARK Corporation was merged with and into ARAMARK Services, Inc. with ARAMARK Services, Inc. being the surviving corporation. In connection with the consummation of the merger, ARAMARK Services, Inc. changed its name to ARAMARK Corporation.
Our discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, opinions, expectations, anticipations, intentions and beliefs. Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under the Special Note About Forward-Looking Statements and elsewhere in this Quarterly Report on Form 10-Q. In the following discussion and analysis of financial condition and results of operations, certain financial measures may be considered “non-GAAP financial measures” under Securities and Exchange Commission (“SEC”) rules. These rules require supplemental explanation and reconciliation, which is provided elsewhere in this Quarterly Report on Form 10-Q.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The Company’s significant accounting policies are described in the notes to the consolidated financial statements included in our fiscal 2011 Annual Report on Form 10-K filed with the SEC. As described in such notes, the Company recognizes sales in the period in which services are provided pursuant to the terms of our contractual relationships with our clients. Sales from direct marketing activities are recognized upon shipment.
In preparing our financial statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, sales and expenses. These estimates and assumptions are most significant where they involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters susceptible to change, and where they can have a material impact on our financial condition and operating performance. We discuss below the more significant estimates and related assumptions used in the preparation of our condensed consolidated financial statements. If actual results were to differ materially from the estimates made, the reported results could be materially affected.
Asset Impairment Determinations
Goodwill and the ARAMARK and Seamless trade names are indefinite lived intangible assets that are not amortizable and are subject to an impairment test that we conduct annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists, using discounted cash flows. The Company performs its assessment of goodwill at the reporting unit level. Within the Food and Support Services—International segment, each country is evaluated separately since such operating units are relatively autonomous and separate goodwill balances have been recorded for each entity.
With respect to our other long-lived assets, we are required to test for asset impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, the Company compares the sum of the future expected cash flows from the asset, undiscounted and without interest charges, to the asset’s carrying value. If the sum of the future expected cash flows from the asset is less than the carrying value, an impairment would be recognized for the difference between the estimated fair value and the carrying value of the asset.
 

29
Table of Contents


In making future cash flow analyses of various assets, the Company makes assumptions relating to the following:
•
The intended use of assets and the expected future cash flows resulting directly from such use;
•
Comparable market valuations of businesses similar to ARAMARK’s business segments;
•
Industry specific economic conditions;
•
Competitor activities and regulatory initiatives; and
•
Client and customer preferences and behavior patterns.
We believe that an accounting estimate relating to asset impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our consolidated statement of income.
Environmental Loss Contingencies
Accruals for environmental loss contingencies (i.e., environmental reserves) are recorded when it is probable that a liability has been incurred and the amount can reasonably be estimated. Management views the measurement of environmental reserves as a critical accounting estimate because of the considerable uncertainty surrounding estimation, including the need to forecast well into the future. We are involved in legal proceedings under federal, state, local and foreign environmental laws in connection with our operations or businesses conducted by our predecessors or companies that we have acquired. The calculation of environmental reserves is based on the evaluation of currently available information, prior experience in the remediation of contaminated sites and assumptions with respect to government regulations and enforcement activity, changes in remediation technology and practices, and financial obligations and creditworthiness of other responsible parties and insurers.
Litigation and Claims
The Company is a party to various legal actions and investigations including, among others, employment matters, compliance with government regulations, including import and export controls and customs laws, federal and state employment laws, including wage and hour laws, immigration laws, human health and safety laws, dram shop laws, environmental laws, false claim statutes, minority business enterprise and women owned business enterprise statutes, contractual disputes and other matters, including matters arising in the ordinary course of business. These claims may be brought by, among others, the government, clients, customers, employees and third parties. Management considers the measurement of litigation reserves as a critical accounting estimate because of the significant uncertainty in some cases relating to the outcome of potential claims or litigation and the difficulty of predicting the likelihood and range of potential liability involved, coupled with the material impact on our results of operations that could result from litigation or other claims. In determining legal reserves, management considers, among other issues:
•
Interpretation of contractual rights and obligations;
•
The status of government regulatory initiatives, interpretations and investigations;
•
The status of settlement negotiations;
•
Prior experience with similar types of claims;
•
Whether there is available insurance; and
•
Advice of counsel.
Allowance for Doubtful Accounts
We encounter risks associated with sales and the collection of the associated accounts receivable. We record a provision for accounts receivable that are considered to be uncollectible. In order to calculate the appropriate provision, management analyzes the creditworthiness of specific customers and the aging of customer balances. Management also considers general and specific industry economic conditions, industry concentrations, such as exposure to small and medium-sized businesses, the non-profit healthcare sector and the automotive, airline and financial services industries, and contractual rights and obligations. Management believes that the accounting estimate related to the allowance for doubtful accounts is a critical accounting estimate because the underlying assumptions used for the allowance can change from time to time and uncollectible accounts could potentially have a material impact on our results of operations.
 

30
Table of Contents

Inventory Obsolescence
We record an inventory obsolescence reserve for obsolete, excess and slow-moving inventory, principally in the Uniform and Career Apparel segment. In calculating our inventory obsolescence reserve, management analyzes historical and projected data regarding customer demand within specific product categories and makes assumptions regarding economic conditions within customer specific industries, as well as style and product changes. Management believes that its accounting estimate related to inventory obsolescence is a critical accounting estimate because customer demand in certain of our businesses can be variable and changes in our reserve for inventory obsolescence could materially affect our results of operations.
Income Taxes
We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year and for deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our condensed consolidated financial statements or tax returns. We must make assumptions, judgments and estimates to determine our current provision for income taxes and also our deferred tax assets and liabilities and any valuation allowance to be recorded against a deferred tax asset. Our assumptions, judgments and estimates relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in our condensed consolidated financial statements. Our assumptions, judgments and estimates relative to the amount of deferred income taxes take into account estimates of the amount of future taxable income, and actual operating results in future years could render our current assumptions, judgments and estimates inaccurate. Any of the assumptions, judgments and estimates mentioned above could cause our actual income tax obligations to differ from our estimates.
Share-Based Compensation
We value our employee share-based awards using the Black-Scholes option valuation model. The Black-Scholes option valuation model uses assumptions of expected volatility, the expected dividend yield of our stock, the expected term of the awards and the risk-free interest rate. Since our stock is not publicly traded, the expected volatility is based on an average of the historical volatility of our competitors’ stocks over the expected term of the share-based awards. The dividend yield assumption is based on our history and expected future dividend payouts. The expected term of share award represents the weighted-average period the share award is expected to remain outstanding. The expected term was calculated using the simplified method permitted under SEC rules and regulations due to the lack of history. The risk-free interest rate assumption is based upon the rate applicable to the U.S. Treasury security with a maturity equal to the expected term of the option on the grant date.
As share-based compensation expense recognized in the Condensed Consolidated Statements of Income is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The authoritative accounting pronouncement for share-based compensation expense requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on our historical experience.
For the Performance-Based Options, management must assess the probability of the achievement of the earnings before interest and taxes (“EBIT”) targets, as defined in the ARAMARK Holdings Corporation 2007 Management Stock Incentive Plan. If the EBIT targets are not probable of achievement, changes in the recognition of share-based compensation expense may occur. Management makes its probability assessments based on the Company’s actual and projected results of operations.
Management believes that the accounting estimate related to the expense of share-based awards is a critical accounting estimate because the underlying assumptions can change from time to time and, as a result, the compensation expense that we record in future periods may differ significantly from what we have recorded in the current period with respect to similar instruments.
Fair Value of Financial Assets and Financial Liabilities
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows:
•
Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets
•
Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets,

31
Table of Contents

and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument
•
Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement
 
We disclosed the fair values of our assets and liabilities in Note 16 to the condensed consolidated financial statements. Management believes that the carrying value of cash and cash equivalents, accounts receivable and accounts payable are representative of their respective fair values. The fair value of the Company’s debt was computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the period. The fair values for interest rate swap agreements, foreign currency forward exchange contracts and natural gas, gasoline and diesel fuel agreements are based on quoted market prices from various banks for similar instruments, adjusted for the Company and the counterparties’ credit risk. The Company performs an independent review of these values to determine if they are reasonable. The fair value of our derivative instruments are impacted by changes in interest rates, foreign exchange rates, and the prices of natural gas, gasoline and diesel fuel. The fair value of our common stock subject to repurchase is derived principally from unobservable inputs. Management believes that the accounting estimate related to the fair value of our financial assets and financial liabilities is a critical accounting estimate due to its complexity and the significant judgments and estimates involved in determining fair value in the absence of quoted market prices.
*****
Critical accounting estimates and the related assumptions are evaluated periodically as conditions warrant, and changes to such estimates are recorded as new information or changed conditions require.
RESULTS OF OPERATIONS
The following tables present our sales and operating income from continuing operations, and related percentages, attributable to each operating segment, for the three and six months ended March 30, 2012 and April 1, 2011 (dollars in millions).

 
 
Three Months Ended
 
Six Months Ended
 
 
March 30, 2012
 
April 1, 2011
 
March 30, 2012
 
April 1, 2011
Sales by Segment
 
$
 
%
 
$
 
%
 
$
 
%
 
$
 
%
Food and Support Services – North America
 
$
2,336.6


70
 %

$
2,212.3


69
 %

$
4,733.9


70
 %

$
4,480.3


69
 %
Food and Support Services – International
 
671.7


20
 %

677.3


21
 %

1,356.5


20
 %

1,349.7


21
 %
Uniform and Career Apparel
 
337.3


10
 %

330.7


10
 %

677.8


10
 %

674.7


10
 %
 
 
$
3,345.6

 
100
 %
 
$
3,220.3

 
100
 %
 
$
6,768.2

 
100
 %
 
$
6,504.7

 
100
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
March 30, 2012
 
April 1, 2011
 
March 30, 2012
 
April 1, 2011
Operating Income by Segment
 
$
 
%
 
$
 
%
 
$
 
%
 
$
 
%
Food and Support Services – North America
 
$
101.1


76
 %

$
88.4


72
 %

$
227.3


76
 %

$
216.8


76
 %
Food and Support Services – International
 
22.3


17
 %

19.9


16
 %

42.9


14
 %

32.5


11
 %
Uniform and Career Apparel
 
23.5


17
 %

25.2


21
 %

56.5


19
 %

59.7


21
 %
 
 
146.9


110
 %

133.5


109
 %

326.7


109
 %

309.0


108
 %
Corporate
 
(13.2
)

-10
 %

(11.2
)

-9
 %

(26.1
)

-9
 %

(22.9
)

-8
 %
 
 
$
133.7

 
100
 %
 
$
122.3

 
100
 %
 
$
300.6

 
100
 %
 
$
286.1

 
100
 %
Consolidated Overview
Sales of $3.3 billion for the second quarter of fiscal 2012 and $6.8 billion for the six month period represented an increase of 4% over both the prior year periods. This increase is primarily attributable to growth in the Higher Education business and the Sports & Entertainment and Healthcare sectors of the Food and Support Services—North America segment and growth in Ireland, Germany, Spain, Chile and Argentina in our Food and Support Services—International segment and the impact of acquisitions (approximately 1% in both periods). This increase was partially offset by the sales decline in the U.K. in our Food and Support Services—International segment.
Operating income was $133.7 million and $300.6 million for the three and six month periods of fiscal 2012 compared to $122.3

32
Table of Contents

million and $286.1 million in the prior year period, respectively. This increase is primarily attributable to profit growth in our Higher Education business, our Healthcare sector and in Chile and Germany. The six month period of fiscal 2012 also includes a favorable risk insurance adjustment of $7.4 million related to favorable claims experience, of which $5.7 million relates to our uniform rental business, planned transition and integration costs of $4.3 million related to the Filterfresh acquisition and severance related charges of $5.7 million in the Uniform and Career Apparel segment and Food and Support Services—International segment. The second quarter of fiscal 2011 includes a gain on the sale of the Company's 67% ownership interest in the security business of its Chilean subsidiary, favorable non-income tax settlements in the U.K., a goodwill and other intangible assets impairment charge and severance related charges, which result in an increase of operating income in the quarter of approximately $1.9 million. The six month period of fiscal 2011 includes the items mentioned above and other income related to a compensation agreement signed with the National Park Service (NPS) under which the NPS agreed to pay down a portion of our investment (possessory interest) in certain assets at one of our NPS sites in our Sports & Entertainment sector and a favorable risk insurance adjustment, which result in an increase of operating income for the six month period of approximately $5.3 million.
 
Interest and other financing costs, net, for the three and six month periods of fiscal 2012 increased approximately $25.8 million and $25.4 million from the prior year periods, respectively, primarily due to the $7.5 million of third-party costs incurred related to the March 2012 amendment that extended the U.S. dollar equivalent of approximately $1,231.6 million of the Company's term loans and the approximately $3.0 million of hedge ineffectiveness incurred related to the Company's amendment of its cross currency swaps. In addition, the Company recorded in the second quarter of fiscal 2011 interest income related to $14.1 million of favorable non-income tax settlements in the U.K. The effective income tax rate for the second quarter of fiscal 2012 was 27.9% compared to 32.2% in the prior year period. The effective income tax rate for the six months of fiscal 2012 was 31.6% compared to 30.6% in the prior year period. The change in both periods principally reflects the relative mix and amount of U.S. and non-U.S. income or loss and the impact of tax credits relative to pretax amounts.
Income from continuing operations for the three and six month periods of fiscal 2012 was $11.0 million and $50.1 million, respectively, compared to $20.0 million and $58.4 million in the prior year periods, respectively. Income from discontinued operations, net of tax, for the three and six month periods of fiscal 2012 was $0 and $0.3 million, respectively, as compared to $0.4 million and $0.3 million in the prior year periods, respectively. Net income attributable to noncontrolling interest for the three and six month periods of fiscal 2012 was $1.1 million and $1.8 million, respectively.
Segment Results
The following tables present a fiscal 2012/2011 comparison of segment sales and operating income from continuing operations together with the amount of and percentage change between periods (dollars in millions).
 
 
Three Months Ended
 
Six Months Ended
Sales by Segment
 
March 30, 2012
 
April 1, 2011
 
Change
 
March 30, 2012
 
April 1, 2011
 
Change
 
$
 
%
 
 
$
 
%
Food and Support Services – North America
 
$
2,336.6

 
$
2,212.3

 
$
124.3

 
6
 %
 
$
4,733.9

 
$
4,480.3

 
$
253.6

 
6
 %
Food and Support Services – International
 
671.7

 
677.3

 
(5.6
)
 
-1
 %
 
1,356.5

 
1,349.7

 
6.8

 
1
 %
Uniform and Career Apparel
 
337.3

 
330.7

 
6.6

 
2
 %
 
677.8

 
674.7

 
3.1

 
0
 %
 
 
$
3,345.6

 
$
3,220.3

 
$
125.3

 
4
 %
 
$
6,768.2

 
$
6,504.7

 
$
263.5

 
4
 %
 
 
Three Months Ended
 
Six Months Ended
Operating Income by Segment
 
March 30, 2012
 
April 1, 2011
 
Change
 
March 30, 2012
 
April 1, 2011
 
Change
 
$
 
%
 
 
$
 
%
Food and Support Services – North America
 
$
101.1

 
$
88.4

 
$
12.7

 
14
 %
 
$
227.3

 
$
216.8

 
$
10.5

 
5
 %
Food and Support Services – International
 
22.3

 
19.9

 
2.4

 
12
 %
 
42.9

 
32.5

 
10.4

 
32
 %
Uniform and Career Apparel
 
23.5

 
25.2

 
(1.7
)
 
-7
 %
 
56.5

 
59.7

 
(3.2
)
 
-5
 %
Corporate
 
(13.2
)
 
(11.2
)
 
(2.0
)
 
18
 %
 
(26.1
)
 
(22.9
)
 
(3.2
)
 
14
 %
 
 
$
133.7

 
$
122.3

 
$
11.4

 
9
 %
 
$
300.6

 
$
286.1

 
$
14.5

 
5
 %

Food and Support Services—North America Segment
Food and Support Services—North America segment sales for the three and six month periods of fiscal 2012 increased 6% over both the prior year periods, primarily due to growth in the Higher Education business and the Sports & Entertainment and Healthcare sectors and the positive impact of acquisitions (approximately 3% in both periods). The Business & Industry sector had mid-single

33
Table of Contents

digit sales growth for the second quarter and high-single digit sales growth for the six month period of fiscal 2012 primarily due to base business growth in our food and facilities services businesses and the Filterfresh acquisition. The Education sector had mid-single digit sales growth for the second quarter and for the six month period of fiscal 2012, due to base and net new business growth in our Higher Education food and facilities services businesses. The Healthcare sector had high-single digit sales growth for the second quarter and for the six month period of fiscal 2012 primarily due to base business growth and the acquisition of Masterplan within the healthcare technologies business. The Sports & Entertainment sector had mid-single digit sales growth for the second quarter and low-single digit sales growth for the six month period of fiscal 2012 primarily related to growth in our National Hockey League venues.
Operating income for the second quarter of fiscal 2012 was $101.1 million compared to $88.4 million in the prior year period primarily due to the profit growth in our Higher Education business and Healthcare sector. Operating income for the six month period of fiscal 2012 was $227.3 million compared to $216.8 million in the prior year period as profit growth in our Higher Education business and Healthcare sector more than offset planned transition and integration costs of $4.3 million related to the Filterfresh acquisition and the other income recognized in the first quarter of fiscal 2011 of $7.8 million related to a compensation agreement signed with the NPS under which the NPS agreed to pay down a portion of our investment (possessory interest) in certain assets at one of our NPS sites in our Sports & Entertainment sector.
Food and Support Services—International Segment
Sales in the Food and Support Services—International segment for the three month period of fiscal 2012 decreased 1% compared to the prior year period as growth in Ireland, Germany, Spain, Argentina, Chile and China was more than offset by the negative impact of foreign currency translation (approximately -3%), divestitures (approximately -2%) and the sales decline in U.K. Sales in the Food and Support Services—International segment for the six month period of fiscal 2012 increased 1% compared to the prior year period as growth in Ireland, Germany, China, Chile and Argentina more than offset the negative impact of foreign currency translation (approximately -2%) and divestitures (approximately -2%) and the sales decline in U.K.
 
Operating income for the second quarter of fiscal 2012 was $22.3 million compared to $19.9 million in the prior year period. This increase is primarily attributable to profit growth in Spain, Germany and Chile and a favorable adjustment of $1.5 million related to a non-income tax settlement in the U.K., which more than offset the negative impact of foreign currency translation (approximately -3%) and the profit decline in the U.K. and our equity method investee in Japan. Operating income for the six month period of fiscal 2012 was $42.9 million compared to $32.5 million in the prior year period. This increase is primarily attributable to profit growth in Germany, Spain and Chile and a reduction in severance related expenses, which more than offset the profit decline in our equity method investee in Japan. Operating income in the second quarter and six months ended of fiscal 2011 includes a gain of $6.4 million related to the divestiture of the Company’s 67% ownership interest in the security business of its Chilean subsidiary, favorable non-income tax settlements in the U.K. of $5.3 million, a goodwill and other intangible assets impairment charge of $5.3 million related to our India operations and severance related expenses of $2.9 million and $9.7 million, respectively.
Uniform and Career Apparel Segment
Uniform and Career Apparel segment sales increased 2% for the three month period of fiscal 2012 compared to the prior year period, primarily due to an increase in our rental business, and were flat for the six month period of fiscal 2012.
Operating income for the second quarter of fiscal 2012 was $23.5 million compared to $25.2 million in the prior year period. This decrease is due to investments into growing our sales force and higher energy costs in fiscal 2012 and a gain of $2.6 million recorded in the second quarter of fiscal 2011 related to a property settlement of an eminent domain claim. Operating income for the six month period of fiscal 2012 was $56.5 million compared to $59.7 million in the prior year period. Operating income in the six month period of fiscal 2012 includes a favorable risk insurance adjustment of $5.7 million compared to $4.8 million in the prior year period. Operating income for the six month period of fiscal 2012 includes severance related charges of $4.0 million compared to $1.3 million in the prior year period.
Corporate
Corporate expenses, those administrative expenses not allocated to the business segments, were $13.2 million for the second quarter of fiscal 2012 compared to $11.2 million for the prior year period. For the six month period of fiscal 2012, corporate expenses were $26.1 million compared to $22.9 million for the prior year period. The increase is mainly due to the increase in share-based compensation expense (see Note 10 to the condensed consolidated financial statements) which more than offset the prior year charges for headcount reductions.


34
Table of Contents

LIQUIDITY AND CAPITAL RESOURCES
Reference to the Condensed Consolidated Statements of Cash Flows will facilitate understanding of the discussion that follows.
Cash provided by operating activities was $57.3 million in the six month period of fiscal 2012 compared to cash used in operating activities of $125.5 million in the comparable period of fiscal 2011. The principal components (in millions) of the net change of $182.8 million were:
 
•
Decrease in the total of net income and noncash charges
$
(15.2
)
•
Impact of accounting change related to accounts receivable securitization
220.9

•
Increased working capital requirements
(52.2
)
•
Other, net
29.3

 
 
$
182.8

The net change in cash flows provided by operating activities was driven by the new accounting treatment for the Company’s accounts receivable securitization agreement. On October 2, 2010, the Company adopted new accounting guidance that affected the presentation of its accounts receivables securitization program, through which the Company sells eligible accounts receivables on a revolving basis. As a result of implementing the new guidance, funding under the agreement of $220.9 million on October 2, 2010 was reflected in the Company’s Condensed Consolidated Statement of Cash Flows as a use of cash from the securitization of accounts receivables under net cash used in operating activities and as a source of cash under net cash provided by financing activities. As expected and consistent with historical patterns, working capital was a use of cash for us during the first half of fiscal 2012. The change in working capital requirements relates principally to changes in Accounts Receivable (approximately $13.2 million), primarily due to the overall growth in the business and the timing of collections, Inventory (approximately $16.5 million), primarily due to the growth of the business, Accounts Payable (approximately $3.9 million), due to timing of disbursements and Accrued Expenses (approximately $19.3 million) related to estimated income tax payments. The “Other, net” caption reflects adjustments to net income in the current year and prior year periods related to nonoperating gains and losses.
During the first quarter of fiscal 2012, ARAMARK Refreshment Services, LLC, a subsidiary of the Company, acquired all of the outstanding shares of common stock of Van Houtte USA Holdings, Inc. (doing business as “Filterfresh”), a refreshment services company, for approximately $145.2 million. The acquisition was financed with cash on hand and borrowings under the Company’s revolving credit facility. Under the terms of the purchase agreement, if a certain significant customer relationship was not maintained within a specific timeframe, the Company was entitled to a refund of a portion of the purchase price. During the second quarter of 2012, the Company received a refund of approximately $7.4 million related to the termination of such customer relationship. During the second quarter of fiscal 2011, ARAMARK Clinical Technology Services, LLC, a subsidiary of the Company, purchased the common stock of the ultimate parent company of Masterplan, a clinical technology management and medical equipment maintenance company, for cash consideration of approximately $154.2 million (see Note 3 to the condensed consolidated financial statements). Also acquired in the transaction were ReMedPar, an independent provider of sourced and refurbished medical equipment parts. During the second quarter of fiscal 2011, the Company completed the sale of the Company's 67% ownership interest in a security business in its Chilean subsidiary for approximately $10 million in cash and future consideration of approximately $4 million.
During the second quarter of fiscal 2011, the Company received proceeds of $7.8 million related to a compensation agreement signed with the National Park Service (NPS) under which the NPS agreed to pay down a portion of our investment (possessory interest) in certain assets at one of our NPS sites in our Sports & Entertainment sector.
On February 29, 2012, the Company entered into Amendment Agreement No. 2 (the “Amendment Agreement”) to the Amended and Restated Credit Agreement dated as of March 26, 2010 (as amended, the “Credit Agreement”). The Amendment Agreement extends the maturity date of an aggregate U.S. dollar equivalent of approximately $1,231.6 million of the Company’s term loans and $66.7 million of letter of credit deposits securing the Company’s synthetic letter of credit facility to July 26, 2016. The maturity dates of the extended term loans and letter of credit deposits will accelerate to October 31, 2014 if any of the Company’s senior fixed rate notes due 2015 or senior floating rate notes due 2015 remain outstanding on October 31, 2014. The Company’s senior fixed rate notes due 2015 and senior floating rate notes due 2015 mature on February 1, 2015. The term loans extended include (i) $858.1 million of U.S. dollar denominated term loans borrowed by the Company; (ii) ¥5,150.9 million of yen denominated term loans borrowed by the Company; (iii) $75.4 million of U.S. dollar denominated term loans borrowed by a Canadian subsidiary of the Company; (iv) €30.4 million of Euro denominated term loans borrowed by an Irish subsidiary of the Company; (v) £82.3 million of sterling denominated term loans borrowed by a U.K. subsidiary of the Company; and (vi) €46.1 million of Euro denominated term loans borrowed by German subsidiaries of the Company. From and after the effective date of the

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Amendment Agreement, (A) the Eurocurrency rate margin and letter of credit fees with respect to the extended U.S. dollar denominated and Euro denominated term loans and letter of credit deposits increased 1.375% to 3.25%, (B) the margin on extended U.S. dollar denominated base rate term loans increased 1.375% to 2.25% and (C) the margins on extended yen denominated term loans and sterling denominated term loans increased 1.375% to 3.375%. The maturity date, interest margins and letter of credit fees for lenders not extending their loans or letters of credit deposits remain unchanged. Consenting lenders received a one-time amendment fee of approximately $3.2 million in the aggregate on their total loan commitments. For the three and six months ended March 30, 2012, approximately $7.5 million of third-party costs directly attributable to the amendment were expensed and are included in “Interest and Other Financing Costs, net” in the Condensed Consolidated Statements of Income. Approximately $4.5 million of the third-party costs were paid to entities affiliated with Goldman Sachs Capital Partners and J.P. Morgan Partners.
 
On April 18, 2011, the Parent Company completed a private placement of $600 million, net of a 1% discount, in aggregate principal amount of 8.625% / 9.375% Senior Notes due 2016 (the Parent Company Notes). Interest on the Parent Company Notes accrues at the rate of 8.625% per annum with respect to interest payments made in cash and 9.375% per annum with respect to any payment in-kind interest. The Parent Company Notes are obligations of the Parent Company, are not guaranteed by the Company and its subsidiaries and are structurally subordinated to all existing and future indebtedness and other liabilities of the Company and its subsidiaries, including trade payables, the senior secured revolving credit facility, the senior secured term loan facility, 8.50% senior notes due 2015, senior floating rate notes due 2015 and 5.00% senior notes due 2012. The Parent Company is obligated to pay interest on the Parent Company Notes in cash to the extent the Company has sufficient capacity to distribute such amounts to the Parent Company under the covenants relating to the Company’s outstanding indebtedness, including the senior secured revolving credit facility, the senior secured term loan facility, the 8.50% senior notes due 2015 and the senior floating rate notes due 2015. If the Company does not have sufficient covenant capacity to distribute such amounts to the Parent Company, the Parent Company will have the ability to pay the interest on the Parent Company Notes through the issuance of additional notes. In November 2011, the Company distributed approximately $27.7 million to the Parent Company as an advance, which was used to pay the interest on the Parent Company Notes. During the first quarter of fiscal 2012, the advance was reduced by approximately $14.9 million, reflecting a non-cash reduction in the Company’s income taxes payable due to the tax benefit attributable to the interest on the Parent Company Notes.
The Company’s 5.00% senior notes, contractually due in June 2012, have been classified as noncurrent in the accompanying consolidated balance sheet as the Company has the ability and intent to finance the repayments through additional borrowings under the senior secured credit agreement.
Management believes that the Company’s cash and cash equivalents and the unused portion of our committed credit availability under our senior secured revolving credit facility (approximately $448.0 million and $473.4 million at April 27, 2012 and March 30, 2012, respectively) will be adequate to meet anticipated cash requirements to fund working capital, capital spending, debt service obligations, refinancings and other cash needs. We believe we enjoy a strong liquidity position overall and we will continue to seek to invest strategically but prudently in certain sectors and geographies. Over time, the Company has repositioned its service portfolio so that today a significant portion of the operating income in our Food and Support Services—North America segment comes from sectors such as education, healthcare and corrections, which we believe to be economically less sensitive. In addition, we have worked to further diversify our international business by geography and sector. The Company also monitors its cash flow and the condition of the capital markets in order to be prepared to respond to changing conditions.
As of March 30, 2012, the senior secured term loan facility consisted of the following subfacilities: a U.S. dollar denominated term loan to the Company in the amount of $475.6 million (un-extended) and $2,265.5 million (extended); a yen denominated term loan to the Company in the amount of ¥5,137.3 million (extended); a U.S. dollar denominated term loan to a Canadian subsidiary in the amount of $85.9 million (un-extended) and $75.6 million (extended); a Euro denominated term loan to an Irish subsidiary in an amount of €11.3 million (un-extended) and €30.4 million (extended); a sterling denominated term loan to a U.K. subsidiary in an amount of £33.3 million (un-extended) and £82.3 million (extended); and a Euro denominated term loan to German subsidiaries in the amount of €18.3 million (un-extended) and €46.1 million (extended). As of March 30, 2012, there was approximately $497.4 million outstanding in foreign currency borrowings.
Covenant Compliance
The senior secured credit agreement contains a number of covenants that, among other things, restrict our ability to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends, make distributions or repurchase our capital stock; make investments, loans or advances; repay or repurchase any notes, except as scheduled or at maturity; create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material

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agreements governing the notes (or any indebtedness that refinances the notes); and fundamentally change the Company’s business. The indenture governing the 8.50% senior notes due 2015 and the senior floating rate notes due 2015 contains similar provisions. As of March 30, 2012, we were in compliance with these covenants.
Under the senior secured credit agreement and the indenture governing the 8.50% senior notes due 2015 and the senior floating rate notes due 2015, we are required to satisfy and maintain specified financial ratios and other financial condition tests and covenants. Our continued ability to meet those financial ratios, tests and covenants can be affected by events beyond our control, and we cannot assure you that we will meet those ratios, tests and covenants.
EBITDA is defined for purposes of these covenants as net income (loss) plus interest and other financing costs, net, provision (benefit) for income taxes, and depreciation and amortization. Adjusted EBITDA is defined for purposes of these covenants as EBITDA, further adjusted to give effect to adjustments required in calculating covenant ratios and compliance under our senior secured credit agreement and the indenture. EBITDA and Adjusted EBITDA are not presentations made in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), are not measures of financial performance or condition, liquidity or profitability, and should not be considered as an alternative to (1) net income, operating income or any other performance measures determined in accordance with U.S. GAAP or (2) operating cash flows determined in accordance with U.S. GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.
Our presentation of EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Because not all companies use identical calculations, these presentations of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. We believe that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information about the calculation of certain financial covenants in the senior secured credit agreement and the indenture. Adjusted EBITDA is a material component of these covenants. For instance, our senior secured credit agreement and the indenture contain financial ratios that are calculated by reference to Adjusted EBITDA. Non-compliance with the maximum Consolidated Secured Debt Ratio contained in our senior secured credit agreement could result in the requirement to immediately repay all amounts outstanding under such agreement, while non-compliance with the Interest Coverage Ratio contained in our senior secured credit agreement and the Fixed Charge Coverage Ratio contained in the indenture could prohibit us from being able to incur additional indebtedness, other than the additional funding provided for under the senior secured credit agreement and pursuant to specified exceptions, and make certain restricted payments.
 
The following is a reconciliation of net income (loss) attributable to ARAMARK shareholder, which is a U.S. GAAP measure of our operating results, to Adjusted EBITDA as defined in our debt agreements. The terms and related calculations are defined in the senior secured credit agreement and indenture.
 
(dollars in millions)
 
Three Months
Ended
March  30, 2012

Three Months
Ended
December  30, 2011

Three Months
Ended
September  30, 2011

Three Months
Ended
July 1, 2011

Twelve Months
Ended
March  30, 2012
Net income (loss) attributable to ARAMARK shareholder
 
$
9.9

 
$
38.7

 
$
41.8

 
$
(0.5
)
 
$
89.9

Interest and other financing costs, net
 
118.5

 
108.8

 
111.1

 
113.3

 
451.7

Provision (benefit) for income taxes
 
4.2

 
18.9

 
(13.1
)
 
(3.6
)
 
6.4

Depreciation and amortization
 
131.7

 
131.9

 
128.0

 
128.7

 
520.3

EBITDA
 
264.3

 
298.3

 
267.8

 
237.9

 
1,068.3

Share-based compensation expense (1)     
 
5.7

 
5.9

 
5.5

 
5.4

 
22.5

Unusual or non-recurring (gains)/losses (2)      
 
—

 
—

 
10.7

 
—

 
10.7

Pro forma EBITDA for equity method investees (3)     
 
6.3

 
8.0

 
5.0

 
4.1

 
23.4

Pro forma EBITDA for certain transactions (4)  
 
—

 
(0.1
)
 
3.2

 
3.6

 
6.7

Seamless North America, LLC EBITDA (5)     
 
(5.3
)
 
(2.9
)
 
(3.9
)
 
(3.6
)
 
(15.7
)
Other (6)     
 
1.1

 
7.5

 
7.8

 
3.3

 
19.7

Adjusted EBITDA
 
$
272.1

 
$
316.7

 
$
296.1

 
$
250.7

 
$
1,135.6

 

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(1)
Represents share-based compensation expense resulting from the application of accounting for stock options, Installment Stock Purchase Opportunities and deferred stock unit awards (see Note 10 to the condensed consolidated financial statements).
(2)
During the three months ended September 30, 2011, the Company realized a pretax loss of approximately $1.5 million (net of tax loss of approximately $12.0 million) on the sale of the Galls business and an additional $1.3 million gain on the sale of the 67% ownership interest in a security business in our Chilean subsidiary.
(3)
Represents our estimated share of EBITDA from our AIM Services Co., Ltd. equity method investment not already reflected in our EBITDA. EBITDA for this equity method investee is calculated in a manner consistent with consolidated EBITDA but does not represent cash distributions received from this investee.
(4)
Represents the annualizing of estimated EBITDA from acquisitions and divestitures made during the period.
(5)
During the third quarter of fiscal 2011, the Company sold a noncontrolling ownership interest in Seamless North America, LLC. The terms of the sale agreement stipulated that Seamless North America, LLC cease to qualify as a Restricted Subsidiary under the senior secured credit agreement, and as a result, its EBITDA for all periods presented must be excluded from the Company’s consolidated Adjusted EBITDA.
(6)
Other includes certain other miscellaneous items (the three months ended December 30, 2011, September 30, 2011 and July 1, 2011 include approximately $6.7 million, $5.9 million and $2.3 million, respectively, of severance and other related costs incurred by the Company).
Our covenant requirements and actual ratios for the twelve months ended March 30, 2012 are as follows:
 
 
Covenant
Requirements
 
Actual
Ratios
Maximum Consolidated Secured Debt Ratio (1)
4.75x
 
3.22x
Interest Coverage Ratio (Fixed Charge Coverage Ratio) (2)
2.00x
 
2.60x
 
(1)
Our senior secured credit agreement requires us to maintain a maximum Consolidated Secured Debt Ratio, defined as consolidated total indebtedness secured by a lien to Adjusted EBITDA, of 5.875x, being reduced over time to 4.25x by the end of 2013. Consolidated total indebtedness secured by a lien is defined in the senior secured credit agreement as total indebtedness outstanding under the senior secured credit agreement, capital leases, advances under the Receivables Facility and any other indebtedness secured by a lien reduced by the lesser of the amount of cash and cash equivalents on our balance sheet that is free and clear of any lien and $75 million. Non-compliance with the maximum Consolidated Secured Debt Ratio could result in the requirement to immediately repay all amounts outstanding under such agreement, which, if the Company’s revolving credit facility lenders failed to waive any such default, would also constitute a default under our indenture.
(2)
Our senior secured credit agreement establishes an incurrence-based minimum Interest Coverage Ratio, defined as Adjusted EBITDA to consolidated interest expense, the achievement of which is a condition for us to incur additional indebtedness and to make certain restricted payments. If we do not maintain this minimum Interest Coverage Ratio calculated on a pro forma basis for any such additional indebtedness or restricted payments, we could be prohibited from being able to incur additional indebtedness, other than the additional funding provided for under the senior secured credit agreement and pursuant to specified exceptions, and make certain restricted payments, other than pursuant to certain exceptions. The minimum Interest Coverage Ratio is 2.00x for the term of the senior secured credit agreement. Consolidated interest expense is defined in the senior secured credit agreement as consolidated interest expense excluding interest income, adjusted for acquisitions and dispositions, further adjusted for certain non-cash or nonrecurring interest expense and our estimated share of interest expense from one equity method investee. The indenture includes a similar requirement which is referred to as a Fixed Charge Coverage Ratio.
The Company and its subsidiaries, affiliates or significant shareholders may from time to time, in their sole discretion, purchase, repay, redeem or retire any of the Company’s outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of the Company’s outstanding indebtedness.
Pursuant to the Stockholders Agreement of the Parent Company, upon termination of employment from the Company or one of its subsidiaries, members of the Company’s management (other than Mr. Neubauer) who hold shares of common stock of the Parent Company can cause the Parent Company to repurchase all of their initial investment shares (as defined) or shares acquired as a result of the exercise of Installment Share Purchase Opportunities at appraised fair market value. Generally, payment for shares repurchased could be, at the Parent Company’s option, in cash or installment notes. The amount of common stock subject to repurchase as of March 30, 2012 was $169.3 million, which is based on approximately 12.4 million shares of common stock of the

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Parent Company valued at $14.45 per share. The Stockholders Agreement, the senior secured credit agreement, the indenture governing the 8.50% senior notes due 2015, the indenture governing the senior floating rate notes due 2015 and the indenture governing the notes issued by the Parent Company contain limitations on the amount that can be expended for such share repurchases.
The Company has an agreement (the Receivables Facility) with several financial institutions whereby it sells on a continuous basis an undivided interest in all eligible accounts receivable, as defined in the Receivables Facility. The maximum amount of the Receivables Facility is $250 million, which expires in January 2013. Pursuant to the Receivables Facility, the Company formed ARAMARK Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote subsidiary. ARAMARK Receivables, LLC was formed for the sole purpose of transferring receivables generated by certain subsidiaries of the Company. Under the Receivables Facility, the Company and certain of its subsidiaries transfer without recourse all of their accounts receivable to ARAMARK Receivables, LLC. As collections reduce previously transferred interests, interests in new, eligible receivables are transferred to ARAMARK Receivables, LLC, subject to meeting certain conditions. As of March 30, 2012, approximately $223.9 million was outstanding under the Receivables Facility and is included in “Long-Term Borrowings” in the Condensed Consolidated Balance Sheet. Amounts borrowed under the Receivables Facility fluctuate monthly based on the Company’s funding requirements and the level of qualified receivables available to collateralize the Receivables Facility. The Receivables Facility has been classified as noncurrent in the accompanying condensed consolidated balance sheet as the Company has the ability and intent to finance the repayments through additional borrowings under the senior secured credit agreement or through refinancing of the Receivables Facility.
The Company’s business activities do not include the use of unconsolidated special purpose entities, and there are no significant business transactions that have not been reflected in the accompanying financial statements. The Company is self-insured for a limited portion of the risk retained under its general liability and workers’ compensation arrangements. Self-insurance reserves are recorded based on actuarial analyses.
LEGAL PROCEEDINGS
Our business is subject to various federal, state and local laws and regulations governing, among other things, the generation, handling, storage, transportation, treatment and disposal of water wastes and other substances. We engage in informal settlement discussions with federal, state, local and foreign authorities regarding allegations of violations of environmental laws in connection with our operations or businesses conducted by our predecessors or companies that we have acquired, the aggregate amount of which and related remediation costs we do not believe should have a material adverse effect on our financial condition or results of operations.
From time to time, we are a party to various legal actions and investigations involving claims incidental to the conduct of our business, including actions by clients, customers, employees, government entities and third parties, including under federal and state employment laws, wage and hour laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims statutes, minority business enterprise and women owned business enterprise statutes, contractual disputes, antitrust and competition laws and dram shop laws. Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, we do not believe that any such current actions are likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or cash flows.
 
We have been informed that an Illinois state civil action has been filed against a subsidiary of the Company by an unnamed Relator under the Illinois Whistleblower Reward and Protection Act in the Circuit Court of Cook County, Illinois County Department, Law Division. The action alleges, among other things, that the subsidiary has not complied with the requirement to contract with minority owned and women owned businesses in connection with its contracts with Cook County and seeks monetary damages. The Company intends to vigorously defend the action.
NEW ACCOUNTING STANDARD UPDATES
See Note 14 of the Notes to Condensed Consolidated Financial Statements for a full description of recent accounting standard updates, including the expected dates of adoption.
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views as to future events and financial performance with respect to our operations. These statements can be

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identified by the fact that they do not relate strictly to historical or current facts. They use words such as “aim,” “anticipate,” “are confident,” “estimate,” “expect,” “will be,” “will continue,” “will likely result,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in conjunction with a discussion of future operating or financial performance.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that might cause such a difference include: unfavorable economic conditions, including ramifications of any future terrorist attacks or increased security alert levels; increased operating costs, including increased food costs, labor-related, energy or product sourcing and distribution costs; shortages of qualified personnel or increases in labor costs; the impact on our business of healthcare reform legislation; costs and possible effects of further unionization of our workforce; liability resulting from our participation in multi-employer defined benefit pension plans; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration issues and costs; our ability to integrate and derive the expected benefits from our recent acquisitions; competition; a decline in attendance at client facilities; the unpredictability of sales and expenses due to contract terms and terminations; the impact of natural disasters or a flu pandemic on our sales and operating results; the risk that clients may become insolvent; the risk that our insurers may become insolvent or may liquidate; the contract intensive nature of our business, which may lead to client disputes; high leverage; claims relating to the provision of food services; costs of compliance with governmental regulations and government investigations; liability associated with noncompliance with our business conduct policy and governmental regulations, including regulations pertaining to food services, the environment, the Federal school lunch program, Federal and state employment and wage and hour laws, minority business enterprise and women-owned business enterprise statutes, human health and safety laws and import and export controls and customs laws; dram shop compliance and litigation; contract compliance and administration issues, inability to retain current clients and renew existing client contracts; a determination by customers to reduce their outsourcing and use of preferred vendors; seasonality; our competitor’s activities or announced planned activities; the effect on our operations of increased leverage and limitations on our flexibility as a result of increased restrictions in our debt agreements; potential future conflicts of interest between our Sponsors and other stakeholders; the impact on our business if we are unable to generate sufficient cash to service all of our indebtedness; the inability of our subsidiaries to generate enough cash flow to repay our debt; risks related to the structuring of our debt; our potential inability to repurchase our notes upon a change of control; and other risks that are set forth in the “Risk Factors,” “Legal Proceedings” and “Management Discussion and Analysis of Financial Condition and Results of Operations” sections and other sections of our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Forward-looking statements speak only as of the date made. We undertake no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they are made. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements included in this report or that may be made in other filings with the Securities and Exchange Commission or elsewhere from time to time by, or on behalf of, us.
ITEM 3 .
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to the impact of interest rate changes and manage this exposure through the use of variable-rate and fixed-rate debt and by utilizing interest rate swaps. We do not enter into contracts for trading purposes and do not use leveraged instruments. The market risk associated with debt obligations as of March 30, 2012 has not materially changed from September 30, 2011 (See Item 7A of our Annual Report on Form 10-K for the year ended September 30, 2011). See Note 8 of the Condensed Consolidated Financial Statements for a discussion of the Company’s derivative instruments and Note 16 for the disclosure of the fair value and related carrying value of the Company’s debt obligations as of March 30, 2012.
ITEM 4 .
CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
 
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, management, with the participation of the Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this report, are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

40

(c) Change in Internal Control over Financial Reporting
No change in the Company’s internal control over financial reporting occurred during the Company’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION
ITEM  1 .    LEGAL PROCEEDINGS
See Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Legal Proceedings” for a description of the Company’s legal proceedings.

ITEM 5.     OTHER INFORMATION

Third Amended and Restated Management Stock Incentive Plan

On May 7, 2012, the Board of Directors of the Parent Company approved the Third Amended and Restated 2007 Management Stock Incentive Plan (the “Stock Incentive Plan”), which increased the number of shares of the Parent Company reserved for issuance under the Stock Incentive Plan by 2,210,000 to account for equity grants to be made to the Company's new Chief Executive Officer and President. A copy of the Stock Incentive Plan is attached as Exhibit 10.1 to this Form 10-Q and is incorporated herein by reference.

Form of Non Qualified Stock Option Agreement

Stock options granted under the Stock Incentive Plan have been, and will in the future be, awarded pursuant to a Non-Qualified Stock Option Agreement with Parent Company (the “Option Agreement”). On May 7, 2012, the Board of Directors of the Parent Company approved a new form of Option Agreement that eliminates the provision that allows for the vesting of previously unvested performance based stock options in the first three years of the grant if the Sponsors achieve a return of 200% of their initial investment. Instead, the Option Agreement provides for catch up vesting of previously unvested performance based stock options if the Sponsors achieve an internal rate of return of 15% or more at any time during the term of the stock option. A copy of the Option Agreement is attached as Exhibit 10.2 to this Form 10-Q and is incorporated herein by reference.

Form of Non Qualified Installment Stock Purchase Opportunity Agreement

Installment stock purchase opportunities (“ISPOs”) granted under the Stock Incentive Plan have been, and will in the future be, awarded pursuant to a Non-Qualified Installment Stock Purchase Opportunity Agreement with the Parent Company (the “ISPO Agreement”). On May 7, 2012, the Board of Directors of the Parent Company approved a new form of ISPO Agreement that requires a grantee who exercises his or her ISPO to wait six months before exercising the put for shares acquired upon such ISPO exercise under the Parent Company's Stockholders Agreement. A copy of the ISPO Agreement is attached as Exhibit 10.3 to this Form 10-Q and is incorporated herein by reference.

Election of CEO and President; Compensation Arrangements for CEO and President; Resignation of Current CEO

On May 8, 2012, the Company announced that Eric Foss has been elected Chief Executive Officer and President of the Company, effective May 7, 2012, and, in connection with his election, has been elected as a member of the Board of Directors of the Parent Company and the Company, effective May 7, 2012. Joseph Neubauer, who was until May 7, 2012, Chairman of the Board of Directors and Chief Executive Officer, stepped down as the Company's Chief Executive Officer, effective May 7, 2012. Mr. Neubauer will remain as Chairman of the Board of Directors of the Parent Company and will remain an employee of the Company. Mr. Neubauer will also remain on the Board of Directors of the Company.

Mr. Foss

Mr. Foss, 53, led the Pepsi Beverages Company, a major division of PepsiCo, as CEO beginning in 2010. During his tenure, he guided the reintegration of The Pepsi Bottling Group, Inc. (PBG) and Pepsi Americas (PAS) into PepsiCo. Prior to the merger of PBG/PAS with PepsiCo, Foss was CEO of the publicly traded PBG from 2006 to 2010, a member of the board of directors of PBG from 2006 to 2008 and Chairman of the board of directors of PBG from 2008 to 2010. Throughout his 30 years in the Pepsi system, he has been recognized as an accomplished business leader, a world class operator and a builder of talented and diverse teams. Mr. Foss currently serves on the board of directors of UDR, Inc. and Cigna Corporation.
 
The Company entered into a new employment letter agreement (the “Agreement”), dated May 7, 2012, with Mr. Foss. The Agreement provides that Mr. Foss will serve as Chief Executive Officer and President of the Company and will be elected to the Board of Directors of the Parent Company so long as the Company is controlled by investment funds associated with or designated

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by GS Capital Partners, CCMP Capital Investors, J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus. Thereafter, Mr. Foss, while he remains the Chief Executive Officer and President, will be included as a nominee for election to the Board of Directors of the Parent Company at each annual shareholders meeting. The Company also elected Mr. Foss to the Board of Directors of the Company, effective May 7, 2012. Mr. Foss is employed with the Company “at-will” and may be terminated by the Company at any time, subject to the severance provisions contained in the Agreement. Mr. Foss's annual base salary will be $1,350,000, and is subject to periodic review by the Compensation and Human Resources Committee of the Board of Directors of the Parent Company (the “Committee”). The Committee may, in its discretion, increase Mr. Foss's annual base salary. Mr. Foss's annual cash bonus will be determined by the Committee pursuant to the terms of the Company's Senior Executive Annual Performance Bonus Plan, provided that Mr. Foss will receive a bonus in an amount equal to $1,012,500 in respect of fiscal year 2012 and have a target bonus of 150% of his annual base salary for fiscal year 2013. With respect to fiscal year 2013, the Company has committed to providing a total annual compensation package to Mr. Foss based on total annual compensation values at the 75th percentile of the Company's market peer group of companies. In addition, Mr. Foss will receive a one-time signing bonus of $500,000 and is eligible to participate in all retirement, welfare and perquisite programs applicable to senior executives of the Company at benefit levels applicable to such senior executives.

Mr. Foss will be offered the opportunity and has agreed to invest $3,750,000 (“Cash Investment Opportunity”) through the purchase of common stock of the Parent Company (“Common Stock”) at a per share purchase price equal to the fair market value (i.e., the appraisal price of the Common Stock on the date of purchase) of one share of Common Stock. Any Common Stock purchased by Mr. Foss pursuant to his Cash Investment Opportunity will be deemed to be “Original Shares” (as defined in the Parent Company's Stockholders Agreement) entitling Mr. Foss to certain rights with respect to put and call options as described in the Stockholders Agreement. In addition, Mr. Foss will receive an option to purchase 500,000 shares of Common Stock pursuant to the terms of the form of Installment Stock Purchase Opportunity Agreement (“ISPO Grant”), which ISPO Grant is divided into five equal installments, with the first installment exercisable immediately upon grant and the remaining four installments exercisable in equal installments on each anniversary over a four year period. Mr. Foss will exercise the first installment for 100,000 shares of Common Stock promptly following the date of grant. Mr. Foss will also receive an option to purchase 1,450,000 shares of Common Stock pursuant to the terms of the form of Nonqualified Stock Option Agreement (“NQSO Grant”), one-half of which NQSO Grant will be subject to service vesting conditions (“Time NQSOs”) and the other half will be subject to both service and performance vesting conditions (“Performance NQSOs”), except that the tranche of Performance NQSOs that would vest based on the Company's performance in respect of fiscal year 2012 will become fully vested so long as Mr. Foss remains employed with the Company through the applicable vesting date. In addition, any other NQSO Grants that Mr. Foss may receive in the future will be granted under the Stock Incentive Plan (or any successor plan), and Mr. Foss will be required to hold Common Stock having a fair market value equal to six times his base salary.
      
Upon a termination of Mr. Foss' employment by the Company without Cause or a resignation by Mr. Foss for Good Reason (each capitalized term as defined in the Agreement) that occurs prior to a Change of Control (as defined in the Agreement), Mr. Foss would receive (i) a pro-rata portion of his annual bonus for the year of termination, based on actual performance of the Company, (ii) two times his then base salary paid over 24 months, (iii) two times his then most recent actual annual cash bonus, if any, paid over 24 months, (iv) continued participation in the Company's medical and life insurance programs on the same terms as in effect immediately prior to his termination, for a period of 24 months, (v) continued payment of his car allowance, if provided at the time of termination, for a period of 24 months, and (vi) immediate vesting of Time NQSOs that would have vested in the 24 month period following his termination date, but for his termination of employment.

Upon a termination of Mr. Foss' employment by the Company without Cause or a resignation by Mr. Foss for Good Reason that occurs during the three-year period following a Change of Control, Mr. Foss would receive (a) a pro-rata portion of his annual target bonus (in effect on the date of the Change of Control or on the date of termination, whichever is higher (the “Target Bonus”)), in a lump sum, (b) two times his base salary (in effect on the date of the Change of Control or on the date of termination, whichever is higher), payable over 24 months, (c) two times the higher of his Target Bonus or his most recent annual bonus, whichever is higher, payable over 24 months, (d) outplacement counseling in an amount not to exceed 20% of his base salary, for a period of 24 months, (e) treatment of equity awards in accordance with the terms of the applicable plans and agreements, and (f) the payments and benefits described in clauses (iv) and (v) in the preceding paragraph.

Upon any termination of employment, Mr. Foss would also receive any accrued amounts (earned but unpaid salary and benefits) owed to him by the Company. The Agreement also provides that if any payments to Mr. Foss in connection with a change in control of the Company would constitute excess parachute payments that are subject to excise taxes under Section 4999 of the Code, such payments will be subject to a reduction to avoid any such excise taxes that may be due, if such reduction results in Mr. Foss retaining a greater after-tax amount than if Mr. Foss paid the excise taxes otherwise due. Mr. Foss is not eligible to receive a gross-up payment in respect of any such excise taxes he may pay. During his employment term and for a period of two years thereafter, Mr. Foss would be subject to restrictions on competition with the Company. Copies of the Agreement, Mr. Foss' Agreement Relating to Employment and Post-Employment Competition and his Indemnification Agreement are attached to this Form 10-Q as

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Exhibits 10.4, 10.5 and 10.6, respectively, and are incorporated herein by reference.

Mr. Neubauer

  In connection with the resignation of Mr. Neubauer as Chief Executive Officer, the Company entered into a letter agreement, dated May 7, 2012, providing for Mr. Neubauer's continued employment with the Company and his continued role as Chairman of the Board of Directors of the Parent Company. A copy of the letter agreement is attached as Exhibit 10.7 to this Form 10-Q and is incorporated herein by reference.





ITEM 6 .    EXHIBITS
 
  3.1
Certificate of Incorporation of ARAMARK Corporation (incorporated by reference to Exhibit 3.1 to ARAMARK Corporation's Current Report on Form 8-K filed with the SEC on April 5, 2007, pursuant to the Exchange Act (file number 001-16807)).
  3.2
By-laws of ARAMARK Corporation (incorporated by reference to Exhibit 3.2 to ARAMARK Corporation's Current Report on Form 8-K filed with the SEC on April 5, 2007, pursuant to the Exchange Act (file number 001-16807)).
10.1
ARAMARK Holdings Corporation Third Amended and Restated 2007 Management Stock Incentive Plan.

10.2
Form of Non Qualified Stock Option Agreement.
10.3
Form of Non Qualified Installment Stock Purchase Opportunity Agreement.
10.4
Letter Agreement dated May 7, 2012 between ARAMARK Corporation and Eric Foss.
10.5
Agreement Relating to Employment and Post-Employment Competition dated May 7, 2012 between ARAMARK Corporation and Eric Foss.
10.6
Indemnification Agreement dated May 7, 2012 between Eric Foss and ARAMARK Corporation.
10.7
Letter relating to Joseph Neubauer's Employment Agreement dated May 7, 2012.
31.1
Certification of Joseph Neubauer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of L. Frederick Sutherland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Joseph Neubauer and L. Frederick Sutherland pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
The following financial information from ARAMARK Corporation’s Quarterly Report on Form 10-Q for the period ended March 30, 2012 formatted in XBRL: (i) Condensed Consolidated Balance Sheets as of March 30, 2012 and September 30, 2011; (ii) Condensed Consolidated Statements of Income for the three months ended March 30, 2012 and April 1, 2011; (iii) Condensed Consolidated Statements of Income for the six months ended March 30, 2012 and April 1, 2011; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended March 30, 2012 and April 1, 2011; (v) Condensed Consolidated Statement of Equity for the six months ended March 30, 2012; and (vi) Notes to Condensed Consolidated Financial Statements.

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
ARAMARK CORPORATION
 
 
May 9, 2012
/s/ JOSEPH MUNNELLY
 
Joseph Munnelly
 
Senior Vice President, Controller
and Chief Accounting Officer

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EXHIBIT INDEX
 
  3.1
Certificate of Incorporation of ARAMARK Corporation (incorporated by reference to Exhibit 3.1 to ARAMARK Corporation's Current Report on Form 8-K filed with the SEC on April 5, 2007, pursuant to the Exchange Act (file number 001-16807)).
  3.2
By-laws of ARAMARK Corporation (incorporated by reference to Exhibit 3.2 to ARAMARK Corporation's Current Report on Form 8-K filed with the SEC on April 5, 2007, pursuant to the Exchange Act (file number 001-16807)).
10.1
ARAMARK Holdings Corporation Third Amended and Restated 2007 Management Stock Incentive Plan
10.2
Form of Non Qualified Stock Option Agreement.
10.3
Form of Non Qualified Installment Stock Purchase Opportunity Agreement.
10.4
Letter Agreement dated May 7, 2012 between ARAMARK Corporation and Eric Foss.
10.5
Agreement Relating to Employment and Post-Employment Competition dated May 7, 2012 between ARAMARK Corporation and Eric Foss.
10.6
Indemnification Agreement dated May 7, 2012 between Eric Foss and ARAMARK Corporation.
10.7
Letter relating to Joseph Neubauer's Employment Agreement dated May 7, 2012.
31.1
Certification of Joseph Neubauer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of L. Frederick Sutherland pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Joseph Neubauer and L. Frederick Sutherland pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101
The following financial information from ARAMARK Corporation’s Quarterly Report on Form 10-Q for the period ended March 30, 2012 formatted in XBRL: (i) Condensed Consolidated Balance Sheets as of March 30, 2012 and September 30, 2011; (ii) Condensed Consolidated Statements of Income for the three months ended March 30, 2012 and April 1, 2011; (iii) Condensed Consolidated Statements of Income for the six months ended March 30, 2012 and April 1, 2011; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended March 30, 2012 and April 1, 2011; (v) Condensed Consolidated Statement of Equity for the six months ended March 30, 2012; and (vi) Notes to Condensed Consolidated Financial Statements.




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Exhibit 10.1
ARAMARK HOLDINGS CORPORATION
THIRD AMENDED AND RESTATED
2007 MANAGEMENT STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the THIRD AMENDED AND RESTATED ARAMARK CORPORATION 2007 MANAGEMENT STOCK INCENTIVE PLAN (the “ Plan ”) is to further the growth and success of ARAMARK Holdings Corporation, a Delaware corporation (the “ Company ”), and its Affiliates (as hereinafter defined) by enabling directors and employees of, or consultants to, the Company or any of its Affiliates to acquire Shares (as hereinafter defined), thereby increasing their personal interest in such growth and success and to provide a means of rewarding outstanding performance by such persons to the Company and/or its Affiliates. Awards granted under the Plan shall include nonqualified stock options (referred to herein as “ Options ”), restricted shares of Common Stock (“ Restricted Stock ”), the opportunity to purchase shares of Common Stock (“ Purchased Stock ”) and such Other Stock-Based Awards as the Board may determine (collectively, the “ Awards ”).
ARTICLE II
DEFINITIONS
As used in the Plan, the following terms shall have the meanings set forth below:
“ Adoption Agreement ” means an agreement between the Company and an individual eligible to become a Participant or a holder of Shares, pursuant to which such individual agrees to become a party to the Stockholders Agreement.
“ Affiliate ” means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, such Person or any other entity designated by the Board in which the Company or an Affiliate has an interest. As used in this definition, the term “control,” including the correlative terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies (whether through the ownership of securities or any partnership or other ownership interests, by contract or otherwise) of a Person. The term “Affiliate” shall not include at any time any portfolio companies of any of the Sponsor Stockholders or any of their Affiliates, other than

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the Company and its Subsidiaries.
“ Award ” has the meaning set forth in Article I hereof.
“ Award Agreement ” means any writing setting forth the terms of an Award that has been duly authorized and approved by the Board or the Committee.
“ Award Committee ” has the meaning set forth in Section 3.3(b) hereof.
“ Board ” means the Board of Directors of the Company.
“ Cause ” means, with respect to a Participant: (i) if such Participant is at the time of termination a party to any employment, consulting or other similar agreement (any such agreement, an “ Individual Agreement ”) that defines such term, the meaning given in such Individual Agreement; (ii) otherwise if such Participant is at the time of termination a party to an Award Agreement which was entered into under this Plan and defines such term, the meaning given in the Award Agreement; and (iii) in all other cases, such Participant’s (A) commission of a felony or a crime of moral turpitude; (B) commission of a willful and material act of dishonesty involving the Company; (C) material breach of the Company’s Business Conduct Policy that causes harm to the Company or its business reputation; or (D) willful misconduct that causes material harm to the Company or its business reputation.
“ Change of Control ” has the meaning set forth in the Stockholders Agreement.
“ Closing Date ” has the meaning ascribed thereto in the Agreement and Plan of Merger made and entered into as of the 8th day of August, 2006, by and among RMK Acquisition Corporation, a Delaware corporation, RMK Finance LLC, a Delaware limited liability company, and the Company (the “ Merger Agreement ”).
“ Code ” means the Internal Revenue Code of 1986, as amended.
“ Committee ” means the Compensation and Human Resources Committee of the Board or such other committee appointed by the Board to administer the Plan (and, before the time that the Board appoints such committee and such committee first meets to take action, the Board).
“ Common Stock ” means the common stock of the Company, par value $.01 per share.
“ Company ” has the meaning set forth in Article I hereof.
“ Corporate Transaction ” has the meaning set forth in Section 7.1 hereof.

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“ Deferred Stock Unit ” or “ DSU ” means the right to receive one whole Share for each whole Deferred Stock Unit, and cash for fractional Deferred Stock Units, upon the terms and conditions set forth in the respective Award Agreement granting the Award.
“ Disability ” means, unless the Award granted to the applicable Participant is subject to Section 409A of the Code, with respect to each Participant, the Participant is (1) unable to perform the material and substantial duties of the Participant’s Regular Occupation (as defined herein below) due to the Participant’s sickness or injury; and (2) the Participant is under the regular care of a qualified doctor; and (3) the Participant has incurred a 20% or more loss in the Participant’s monthly earnings due to that sickness or injury (or such other definition of disability that results in a termination of employment and commencement of receipt of benefits under the Company or its Affiliate’s long term disability plan, as in effect at the applicable time (the “ LTD Plan ”)). In the event that the Award granted to the applicable Participant is subject to Section 409A of the Code, the term Disability, shall instead have the meaning of “Disability” as defined under Section 409A of the Code or any successor provision of the Code at the applicable time. For purposes of this definition, the term “ Regular Occupation ” means the occupation the Participant is routinely performing when the Participant’s Disability begins, which shall be determined by the LTD Plan Claims Administrator as provided in the LTD Plan.
“ Effective Date ” means January 25, 2007 (the date the Plan was adopted by the Board and approved by the shareholders of the Company).
“ Excess ” has the meaning set forth in Section 7.2 hereof.
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Fair Market Value ” means (1) on the Closing Date, the price the Sponsor Stockholders paid to acquire the Common Stock and (2) as of any subsequent, specified date, if the Common Stock is listed on a national securities exchange, the closing price of the Common Stock on any national securities exchange or any national market system (including, but not limited to, The NASDAQ National Market) on that date, or if no prices are reported on that date, on the last preceding date on which such prices of the Common Stock are so reported. If the Common Stock is not then listed on any national securities exchange but is traded over the counter at the time determination of its Fair Market Value is required to be made, its Fair Market Value shall be deemed to be equal to the average between the reported high and low sales prices of Common Stock on the most recent date on which Common Stock was publicly traded. If the Common Stock is not publicly traded at the time a determination of its Fair Market Value is to be made, then “Fair Market Value” shall have the meaning set forth in the Stockholders Agreement. In connection with any of the foregoing, solely to the extent necessary to avoid causing an Option or an Other Stock-Based Award (if and where applicable) to be deemed deferred compensation within the meaning of Section 409A of the Code, the Board may deviate from such meaning and determine Fair Market Value in such manner as it deems appropriate, reasonable and in good faith is required to comply with Section 409A of the Code, after consultation with counsel to the Company, but in all cases will make such determination in a manner that is as

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close as possible to that set forth herein.
“ IPO ” has the meaning set forth in the Stockholders Agreement.
“ Installment Stock Purchase Opportunity Option ” or “ ISPO Option ” means those Options that the Committee (or Award Committee, as applicable) have designated as “ISPO Options”, which constitute Options that have limited periods of exercisability, as set forth in the relevant Award Agreement.
“ Net Exercise ” means a Participant’s ability to exercise an Option by directing the Company to deduct from the shares of Common Stock issuable upon exercise of his Options a number of Shares having an aggregate Fair Market Value equal to the sum of the aggregate Option Price therefor plus the amount of the Participant’s Tax Withholding, and the Company shall thereupon issue to the Participant the net remaining number of Shares after such deductions.
“ Notice ” has the meaning set forth in Section 5.6 hereof.
“ Option ” has the meaning set forth in Article I hereof.
“ Option Price ” has the meaning set forth in Section 5.4 hereof.
“ Option Shares ” has the meaning set forth in Section 5.6(b) hereof.
“ Original Shares ” has the meaning set forth in the Stockholders Agreement.
“ Other Stock-Based Awards ” has the meaning set forth in Section 6.1 hereof.
“ Participant ” has the meaning set forth in Section 4.1 hereof.
“ Performance Based Awards ” has the meaning set forth in Section 3.5 hereof.
“ Person ” shall include an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
“ Plan ” has the meaning set forth in Article I hereof.
“ Public Offering ” has the meaning set forth in the Stockholders Agreement.
“ Reserved Shares ” means, subject to adjustment in accordance with Section 7.1 below: (1) an aggregate number of Shares equal to 15.5% of the fully-diluted Common Stock of

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the Company as of immediately after the Closing Date (the “ Fully Diluted Equity ”), up to 11% of which will be granted at or within ninety days following the Closing Date (the “ Initial Grant Pool ”) and the remainder of which will be granted in future years; provided that any amount of Shares subject to the Initial Grant Pool that are not granted within such ninety-day period, and any related Returned Shares, may be granted under an Award at any time during the term of this Plan; plus (2) the aggregate number of Shares that constitute Original Shares (other than those held by Joseph Neubauer or any of the Sponsor Stockholders) (and any related Returned Shares); plus (3) 400,000 Shares available exclusively for issuance under the Plan pursuant to Awards of Deferred Stock Units to non-employee directors of the Company (and any related Returned Shares); plus (4) 2,210,000 Shares in the aggregate, available exclusively for issuance under the Plan pursuant to Awards to be made in June 2012 to the then new Chief Executive Officer of the Company (“New CEO Grants”).
“ Retirement ” means with respect to a Participant the retirement of such Participant upon or after achieving age 60 and five (5) years of employment with the Company, any of its Affiliates, and/or any of their respective predecessors.
“ Returned Shares ” has the meaning set forth in Section 3.6(b) hereof.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Shares ” means shares of Common Stock.
“ Spin-off ” means any distribution without consideration of shares of a Subsidiary to shareholders of the Company.
“ Sponsor Stockholders ” has the meaning set forth in the Stockholders Agreement.
“ Sponsor Investment ” means direct or indirect investments in Shares made by the Sponsor Stockholders on or after the Closing Date, but excluding any purchases or repurchases of Shares on any securities exchange or any national market system after an IPO. Any direct or indirect investments in Shares made by the Sponsor Stockholders after the Closing Date shall be included in this definition except in the event and to the extent that the Sponsor Stockholders waive such inclusion herein for any purpose under this Plan.
“ Stockholders Agreement ” means the Stockholders Agreement, dated on or about January 26, 2007, among the Company and the holders party thereto, as it is amended, supplemented, restated or otherwise modified from time to time.
“ Subsidiary ” means any corporation or other entity of which the Company owns securities or interests having a majority, directly or indirectly, of the ordinary voting power in electing the board of directors, managers, general partners or similar governing Persons thereof.
“ Tax Withholding ” means a Participant’s minimum tax withholding with respect

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to any Award granted hereunder.
“ Termination Date ” means the tenth anniversary of the Effective Date.
“ Termination of Relationship ” means (i) if the Participant is an employee of the Company or any Affiliate, the termination of the Participant’s employment with the Company and its Affiliates for any reason; (ii) if the Participant is a consultant to the Company or any Affiliate, the termination of the Participant’s consulting relationship with the Company and its Affiliates for any reason; and (iii) if the Participant is a director of the Company or any Affiliate, the termination of the Participant’s service as a director of the Company or such Affiliate for any reason; including, in the case of clauses (i), (ii) or (iii), as a result of such Affiliate no longer being a Affiliate of the Company because of a sale, divestiture or other disposition of such Affiliate by the Company (whether such disposition is effected by the Company or another Affiliate thereof). Notwithstanding the foregoing, unless otherwise approved by the Chief Executive Officer of the Company (provided that such authority shall be effective only to the extent that neither its existence nor its exercise would result in imposition of taxes under Section 409A of the Code), a Termination of Relationship shall not be deemed to have occurred if a Participant remains an employee or director of the Company or any Affiliate, but a Termination of Relationship shall be deemed to have occurred if a Participant remains a consultant of the Company or any Affiliate.
“ Vested Options ” means Options that have vested in accordance with the applicable Award Agreement.
ARTICLE III
ADMINISTRATION OF THE PLAN; SHARES SUBJECT TO THE PLAN
Section 3.1.      Committee .
The Plan shall be administered by the Committee.
Section 3.2.      Procedures .
The Committee shall adopt such rules and regulations as it shall deem appropriate concerning the holding of meetings and the administration of the Plan, which shall be consistent with the current practice of the Compensation and Human Resources Committee of ARAMARK CORPORATION as of the Effective Date.
Section 3.3.      Interpretation; Powers of Committee .
Except as may otherwise be expressly reserved to the Board as provided herein, and with respect to any Award, except as may otherwise be provided in the Award Agreement

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evidencing such Award or an Individual Agreement between the Participant and Company, the Committee shall have all powers with respect to the administration of the Plan, including the authority to:
(a)      determine eligibility and the particular persons who will receive Awards;
(b)      grant Awards to eligible persons, determine the price and number of securities to be offered or awarded to any of such persons, determine the other specific terms and conditions of Awards consistent with the express limits of the Plan, establish the installments (if any) in which such Awards will become exercisable or will vest and the respective consequences thereof (or determine that no delayed exercisability or vesting is required), and establish the events of termination or reversion of such Awards; provided , however , that the Committee may also delegate, at any time and from time to time, to any sub-committee of the Committee and the Board may also delegate, at any time and from time to time, to any other committee of the Board (in either case which shall consist of one or more members of the Committee or Board, respectively, and may consist solely of the Chief Executive Officer of the Corporation so long as he or she is a member of the Committee or Board, respectively) (an “ Award Committee ”), subject to such guidelines as the Board, the Committee or the Award Committee may establish from time to time, the authority to grant Awards under the Plan
(c)      approve the forms of Award Agreements, which need not be identical either as to type of Award or among Participants;
(d)      construe and interpret the provisions of the Plan and any Award Agreement or other agreement defining the rights and obligations of the Company and Participants under the Plan, make factual determinations with respect to the administration of the Plan, further define the terms used in the Plan, and prescribe, amend and rescind rules and regulations relating to the administration of the Plan;
(e)      cancel, modify, or waive the Company’s rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding Awards held by Participants, subject to any required consent under Article X;
(f)      accelerate or extend the exercisability or extend the term of any or all outstanding Awards, subject to any consent required under ARTICLE X; and
(g)      make all other determinations and take such other action as contemplated by this Plan or as may be necessary or advisable for the administration of this Plan and the effectuation of its purposes, other than the amendment of any Plan provision, which power and authority shall be held by the Board and subject to the Stockholders Agreement.
All decisions of the Board or the Committee, as the case may be, shall be made in good faith and shall be conclusive and binding on all Participants in the Plan.

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Section 3.4.      Terms of Certain Award Agreements .
Notwithstanding anything else set forth in this Plan document to the contrary, any grants of Options shall be made using the form attached hereto as Exhibit A with only such changes as may be made by the Board solely with respect to the Option Price (to the extent required to comply with Section 5.4 of this Plan), the EBIT Targets (as such term is defined in Exhibit A) for any applicable Fiscal Years subsequent to those identified in Exhibit A and the Sponsor shareholder return targets, the date on which the vesting of the Options shall commence (namely, to reflect the later grant date of the Options), and any other terms as the Board may determine appropriate; provided that the Committee may make changes to the form to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award or to aid in the administration of the Plan or any Award, in the manner and to the extent the Committee deems necessary or desirable. Fifty percent of Options granted will vest upon the attainment of performance goals, and fifty percent of Options will vest in equal annual installments on each of the first four anniversaries of the applicable date of grant, in each case in a manner substantially similar to the manner set forth in the Award Agreement attached as Exhibit A (subject to the changes noted in the preceding sentence). In connection with all of the foregoing, the Committee shall in good faith consider making additional Award grants following the fourth anniversary of the Closing Date. In addition to the foregoing, Participants who are non-employee directors of the Company may be granted Deferred Stock Units upon the terms and conditions pursuant to an Award Agreement attached hereto as Exhibit B with such changes as may be made by the Board; provided that the Committee may make changes to the form to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award or to aid in the administration of the Plan or any Award in the manner and to the extent the Committee deems necessary or desirable. Notwithstanding the foregoing, with respect to ISPO Options, the Committee may approve the forms of Award Agreements, which need not be identical among Participants.

Section 3.5.      Compliance with Code Section 162(m) .
In the event the Company becomes a “publicly-held corporation” as defined in Code §162(m)(2), the Company may establish a committee of outside directors meeting the requirements of Code §162(m)(2) to (i) approve Awards that might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes by the Company pursuant to Code §162(m); and (ii) administer the Plan. In such event, the powers reserved to the Committee in the Plan shall be exercised by such compensation committee. In addition, to the extent Code §162(m) is applicable, Awards under the Plan may be granted upon satisfaction of the conditions to such grants provided pursuant to Code §162(m) and any Treasury Regulations promulgated thereunder. In connection with the foregoing, (i) subject to adjustment in accordance with Section 7.1, the maximum number of Shares for which Options, and any Other Stock-Based Awards that are intended to qualify as performance-based compensation under Code §162(m) (“ Performance Based Awards ”), may be granted during any calendar year to any Participant shall be 7,500,000, and (ii) the maximum amount of a Performance Based Award that can be paid in cash to any Participant during any calendar year shall be $90,000,000.

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Section 3.6.      Number of Shares .
(a)      Subject to the provisions of Article VII (relating to adjustments upon changes in capital structure and other corporate transactions), the aggregate number of Shares with respect to which Awards may be granted under the Plan shall not exceed the Reserved Shares.
(b)      Shares that are subject to or underlie Options granted under the Plan that expire, are redeemed as part of a Net Exercise settlement or as part of the payment of any Option Price, or for any reason are canceled or terminated without having been exercised (or Shares subject to or underlying the unexercised portion of any Options, in the case of Options that were partially exercised at the time of their expiration, cancellation or termination), including in any such instance any Options, or Shares subject to or underlying Options, that are purchased by the Company from the Participants pursuant to the Stockholders Agreement or otherwise, and Shares that were Purchased Stock or other Shares issued in exchange for shares of common stock of the Company in connection with the Merger by a Participant, that are purchased by the Company from the Participants pursuant to the Stockholders Agreement or otherwise, shall again become available for subsequent Awards of Options or of Purchased Stock under the Plan (any Shares so expired, redeemed, cancelled, terminated or purchased, “ Returned Shares ”). In addition to the foregoing, Shares that are subject to Awards of Deferred Stock Units or New CEO Grants that are forfeited without settlement of Shares, and Shares purchased by the Company from any Participants who are non-employee directors of the Company or former Management Stockholders pursuant to the Stockholders Agreement or otherwise, shall again only become available for subsequent Awards of Deferred Stock Units or New CEO Grants, respectively, under the Plan, and for all purposes of this Plan shall be included in the term “Returned Shares” as defined in the immediately preceding sentence.
Section 3.7.      Reservation of Shares .
The number of Shares reserved for issuance with respect to Awards granted under the Plan shall at no time be less than the maximum number of Shares which may be issued or delivered at any time pursuant to outstanding Awards.
ARTICLE IV
ELIGIBILITY
Section 4.1.      General .
Awards may be granted under the Plan only to persons who are employees or directors of, or consultants to, the Company or any of its Affiliates on the date of the grant. Each

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such person to whom an Award is granted under the Plan is referred to herein as a “ Participant. ”
ARTICLE V
STOCK OPTIONS
Section 5.1.      General .
Options may be granted under the Plan at any time and from time to time on or prior to the Termination Date. Each Option granted under the Plan shall be subject to the terms and conditions set forth in the Plan. Each Option shall be evidenced by an Award Agreement incorporating the terms and provisions of the Plan that shall be executed by the Company and the Participant. The Award Agreement shall specify the number of Shares for which such Option shall be exercisable, the Option Price (as defined in Section 5.4 below) for such Shares and the other terms and conditions of the Option.
Section 5.2.      Vesting .
The Committee, in its sole discretion, shall determine whether and to what extent any Options are subject to vesting based upon the Participant’s continued service to, or the Participant’s performance of duties for, the Company and its Subsidiaries, and/or upon any other basis.
Section 5.3.      Date of Grant .
Except as may be otherwise provided in an Award Agreement or as may be required by applicable law, the date of grant of an Option under this Plan shall be the date as of which the Committee approves the grant.
Section 5.4.      Option Price .
The “ Option Price ” shall be the exercise price per Share of any Option granted under this Plan, to be determined by the Committee and set forth in the Award Agreement. In no event, however, may the Committee determine an Option Price that is less than the Fair Market Value of the Share on the date of grant.
Section 5.5.      Payment of Option Price and Tax Withholding .
The aggregate Option Price (and any Tax Withholding due) shall, to the extent permitted by applicable law, be paid:
(a)      in cash (by wire transfer of immediately available funds to a bank account

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of the Company, by delivery of a certified check payable to the Company);
(b)      by surrender of shares of Common Stock (by delivery of such shares or by attestation) with a Fair Market Value equal to the Option Price; provided that such Shares have been held by the Participant for such period, if any, as may be required from time to time by the Committee in order to satisfy applicable generally accepted accounting principles);
(c)      pursuant to a Net Exercise arrangement; provided , however , that in such event, the Committee may exercise its discretion to limit or prohibit the use of a Net Exercise solely with respect to Tax Withholding if the Committee determines in good faith that to allow for a Net Exercise with respect to Tax Withholding would result in a material negative impact on the Company’s and its Subsidiaries, near-term liquidity needs; provided, further , however , that solely with respect to an ISPO Option, a Net Exercise arrangement may be limited or prohibited as provided in the Award Agreement;
(d)      if the Common Stock is a class of securities then listed or admitted to trading on any national securities exchange or traded on any national market system (including, but not limited to, The Nasdaq National Market), in compliance with any cashless exercise program authorized by the Board or the Committee for use in connection with the Plan at the time of such exercise (but, subject in any case, to the applicable limitations of Rule 16b-3 under the Exchange Act); or
(e)      a combination of the methods set forth in this Section 5.5 .
Section 5.6.      Notice of Exercise .
A Participant (or other person, as provided in Section 8.2 ) may exercise an Option (for the Shares represented thereby) granted under the Plan in whole or in part (but for the purchase of whole Shares only), as provided in the Award Agreement evidencing his Option, by delivering a notice (the “ Notice ”) to the Company in accordance with the Option exercise notice practices and procedures in effect at ARAMARK CORPORATION as of the Effective Date. In accordance therewith, the Notice may include the following:
(a)      that the Participant elects to exercise the Option;
(b)      the number of Shares with respect to which the Option is being exercised (the “ Option Shares ”);
(c)      the method of payment for the Option Shares (which method must be available to the Participant under the terms of his Award Agreement);
(d)      the date upon which the Participant desires to consummate the purchase of the Option Shares (which date must be prior to the termination of such Option); and

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(e)      any additional provisions with respect to Notice consistent with the Plan as the Committee may from time to time require.
The exercise date of an Option shall be the date on which the Company receives the Notice and any payment due from the Participant. Such Notice shall also contain, to the extent such Participant is not then a party to the Stockholders Agreement (and the Stockholders Agreement has not been terminated prior to such date), an Adoption Agreement, in form and substance satisfactory to the Board pursuant to which the Participant agrees to become a party to the Stockholders Agreement.
ARTICLE VI
OTHER EQUITY AWARDS
Section 6.1.      Other Equity-Based Awards .
Subject to the Stockholders Agreement (including, without limitation, Section 1.09(a)) and subject to the Reserved Shares limit referred to in Section 3.6(a) of this Plan, the Committee may grant or sell awards of Shares, including awards of Restricted Stock, Purchased Stock (including the right to purchase shares on one or more dates that are up to 18 months after the date a Participant becomes employed by the Company or any of its Affiliates or is admitted to the Executive Leadership Council of the Company or any of its Affiliates or is promoted to an eligible employment band, which right the Committee shall provide to such newly hired, admitted or promoted employees as the Chief Executive Officer of the Company may recommend) and awards that are valued in whole or in part by reference to, or are otherwise based on the Fair Market Value of, Shares, including, without limitation, awards of Deferred Stock Units (such other awards, the “ Other Stock-Based Awards ”). Such Other Stock-Based Awards shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive, or vest with respect to, one or more Shares (or the equivalent cash value of such Shares) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance objectives. Other Stock-Based Awards may be granted alone or in addition to any other Awards under the Plan. Subject to the provisions of the Plan and the Stockholders’ Agreement, the Committee shall determine to whom and when other equity-based Awards will be made, the number of Shares to be awarded under (or otherwise related to) such Awards; whether such Awards shall be settled in cash, Shares or a combination of cash and Shares; and all other terms and conditions of such awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable).
Section 6.2.      Issuance of Shares to Participants .
The Company shall issue Shares to a Participant upon the entry by the Company into the stockholder records of the Company in the name of the Participant (or other person

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exercising the applicable Option in accordance with the provisions of Section 8.2 ) of the number of Shares acquired by the Participant under the Plan, whether upon exercise of an Option (in which case such issuance shall occur as soon as practicable after receipt of the Notice and payment of the aggregate Option Price for such Shares) or otherwise; provided that the Company, in its sole discretion, may elect to not issue any fractional Shares upon the exercise of an Option (determining the fractional Shares after aggregating all Shares issuable to a single holder as a result of an exercise of an Option for more than one Share) and, in lieu of issuing such fractional Shares, shall pay the Participant the Fair Market Value thereof. Neither the Participant nor any person exercising an Option in accordance with the provisions of Section 8.2 shall have any privileges as a stockholder of the Company with respect to any Shares of stock issuable upon exercise of an Option granted under the Plan until the date of entry of the stockholdings of the Participant into the stockholder records of the Company representing such Shares pursuant to this Section 6.2 .
ARTICLE VII
ADJUSTMENTS
Section 7.1.      Changes in Capital Structure .
(a)      Subject to Section 7.2 , in the event of a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of the Company, an extraordinary cash dividend, separation, Spin-off or a reorganization, the Committee shall act in good faith and make appropriate and equitable substitutions or adjustments, as applicable, to: (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the number and kind of Shares or other securities subject to outstanding Awards; (C) performance metrics and targets underlying outstanding Awards; and (D) the Option Price of outstanding Options.
(b)      In the event of a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation, disaffiliation, or similar event affecting the Company or any of its Subsidiaries (each, a “ Corporate Transaction ”), the Committee shall act in good faith and make appropriate and equitable substitutions or adjustments, as applicable, to (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the number and kind of Shares or other securities subject to outstanding Awards; (C) performance metrics and targets underlying outstanding Awards; and (D) the Option Price of outstanding Options. In the case of a Corporate Transaction that does not constitute a Change of Control, the Committee shall act in good faith and make appropriate and equitable substitutions or adjustments, which, in addition to those identified in the immediately preceding sentence, may also include, without limitation, (1) the cancellation of outstanding Awards in exchange for, on a per Share basis, the same amount and kind of consideration, in the same proportion, as that received by each Sponsor Stockholder in respect of each Share held (directly or indirectly) by the Sponsor Stockholder (less, in the event an Award is an Option, the applicable Option Price); and

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(2) the substitution of other property (including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the Shares subject to outstanding Awards.
(c)      In the case of a Corporate Transaction that does constitute a Change in Control, unless any given Participant agrees otherwise with respect to his or her own Awards, all then outstanding Awards shall be cancelled in exchange for, on a per Share basis, the same amount and kind of consideration, in the same proportion, as that received by each Sponsor Stockholder in respect of each Share held (directly or indirectly) by the Sponsor Stockholder (less, in the event an Award is an Option, the applicable Option Price).
Section 7.2.      Extraordinary Cash Distributions .
In the event of an extraordinary cash distribution on Shares subject to an Option, the Option Price of such Option shall be reduced by the amount of such cash distribution (the “Adjustment Amount”), but only to the extent permitted without subjecting such Option to Section 409A of the Code. If the Adjustment Amount exceeds the reduction permitted without subjecting such Option to Section 409A of the Code (such excess, the “ Excess ”), then, if and when the Option becomes a Vested Option, the holder thereof shall receive, in addition to the Shares subject to such Option, an amount in cash or in the form of additional Shares having a value equal to the Excess.
ARTICLE VIII
RESTRICTIONS ON AWARDS
Section 8.1.      Compliance With Securities Laws .
(a)      No Awards shall be granted under the Plan, and no Shares shall be issued and delivered pursuant to Awards granted under the Plan, unless and until the Company and/or the Participant shall have complied with all applicable Federal, state or foreign registration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction.
(b)      The Committee in its discretion may, as a condition to the delivery of any Shares pursuant to any Award granted under the Plan, require under the Award Agreement that the applicable Participant (i) represent in writing that the Shares received pursuant to such Award are being acquired for investment and not with a view to distribution and (ii) make such other representations and warranties as are deemed reasonably appropriate by the Committee. Stock certificates representing Shares acquired under the Plan that have not been registered under the Securities Act shall, if required by the Committee, bear such legends as may be required by the Stockholders Agreement and the applicable Award Agreement.

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Section 8.2.      Nonassignability of Awards .
(a)      No Award granted under this Plan shall be assignable or otherwise transferable by the Participant, except by designation of a beneficiary, by will or by the laws of descent and distribution. An Award may be exercised during the lifetime of the Participant only by the Participant, unless the Participant becomes subject to a Disability. If a Participant dies or becomes subject to a Disability, his Options shall thereafter be exercisable, during the period specified in the applicable Award Agreement (as the case may be), by the Participant subject to a Disability by his designated beneficiary or if no beneficiary has been designated in writing, by his executors or administrators to the full extent (but only to such extent) to which such Options were exercisable by the Participant at the time of (and after giving effect to any vesting that may occur in connection with) his death or Disability.
(b)      Before granting any Awards or issuing any Shares under the Plan to any person who is not already a party to the Stockholders Agreement, the Company shall obtain an executed Adoption Agreement from such person, unless a Public Offering shall have already occurred prior to such grant or issuance.
Section 8.3.      No Right to an Award or Grant .
Neither the adoption of the Plan nor any action of the Board or the Committee shall be deemed to give an employee, director or consultant any right to be granted an Option to purchase Common Stock, receive an Award under the Plan except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then only to the extent of and on the terms and conditions expressly set forth in the Award Agreement. The Plan will be unfunded. The Company will not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the payment of any Award.
Section 8.4.      No Evidence of Employment or Service .
Nothing contained in the Plan or in any Award Agreement shall confer upon any Participant any right with respect to the continuation of his employment by or service with the Company or any of its Subsidiaries or interfere in any way with the right of the Company or any such Subsidiary, in its sole discretion (subject to the terms of any separate agreement to the contrary), at any time to terminate such employment or service or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award.
Section 8.5.      No Liability with Respect to Any Corporate Action .
Subject to Section 3.4 and Article XIII, nothing contained in the Plan or in any Award Agreement will be construed to prevent the Company or any Subsidiary or Affiliate of the Company from taking any corporate action which is deemed by the Company or by its Subsidiaries and Affiliates to be appropriate or in its best interest and no Participant or beneficiary of a Participant will have any claim against the Company or any affiliate as a result

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of any such corporate action.
ARTICLE IX
TERM OF THE PLAN
This Plan shall become effective on the Effective Date and shall terminate on the Termination Date. No Awards may be granted after the Termination Date. Any Award outstanding as of the Termination Date shall remain in effect and the terms of the Plan will apply until such Award terminates as provided in the Plan or the applicable Award Agreement.
ARTICLE X
AMENDMENT OF PLAN
Subject to any applicable provision of the Stockholders Agreement, the Plan may be modified or amended in any respect, and at any time or from time to time, by the Board or by the Committee with the prior approval of the Board. Notwithstanding the foregoing, the Plan may not be modified or amended as it pertains to any existing Award Agreement without the consent of an applicable Participant where such modification or amendment would materially impair the rights of such Participant. In addition, no such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required by applicable law or regulation or the listing standards of the securities exchange, which is, at the applicable time, the principal market for the Common Stock.
ARTICLE XI
CAPTIONS
The use of captions in the Plan is for convenience. The captions are not intended to provide substantive rights.
ARTICLE XII
WITHHOLDING TAXES
Upon any exercise or payment of any Award, the Participant shall be required to pay or provide for payment of the amount of any Tax Withholding which the Company or any Subsidiary may be required to withhold with respect to any exercise of an Option or other payment of an Award; provided , that to the extent permitted by applicable law or as otherwise

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provided in the Award Agreement, the Participant may satisfy such payment obligations to the Company through (i) the deduction from any amount payable to the Participant in cash or securities in respect of the Award the amount of any taxes which the Company may be required to withhold with respect to such exercise or payment; or (ii) in accordance with the provisions of Section 5.5(c) hereof, the reduction of the number of Shares to be delivered to the Participant in connection with such exercise or payment by the appropriate number of Shares, valued at their then Fair Market Value, to satisfy the minimum Tax Withholding obligation; provided , however , that in such event, the Committee may exercise its discretion to limit or prohibit the use of Shares for such Tax Withholding if the Committee determines in good faith that to allow for the use of such Shares with respect to Tax Withholding would result in a material negative impact on the Company’s and its Subsidiaries, near-term liquidity needs; provided, further , however , that solely with respect to an ISPO Option, a Net Exercise arrangement may be limited or prohibited as provided in the Award Agreement. In no event will the value of Shares withheld under clause (ii) above exceed the minimum amount of required Tax Withholding under applicable law.
ARTICLE XIII
CODE SECTION 409A COMPLIANCE
If any term, distribution or settlement of an Award, or any other action by the Company (including by the Committee) pursuant to the terms of this Plan or an Award Agreement, subjects a Participant to tax under Section 409A of the Code, the Company shall indemnify and hold harmless the Participant for any taxes, interest and penalties the Participant may incur under Section 409A of the Code as a result thereof, such that on a net-after-tax basis, the Participant shall not be liable for any such taxes, interest or penalties, or for any taxes, interest or penalties imposed upon the Company’s provision of such indemnity. The Company and the Participant shall cooperate in good faith, and consult with tax counsel to the Company, to restructure the Award and the Award Agreement (which may require the provision of an alternative payment or benefit, but which shall not convey an economic benefit to the Participant that is diminished in value to the Participant other than in a de minimis manner) in a manner that will cause the Participant to not be subject to such taxes, interest and penalties in respect of the Award and the Award Agreement (or any such restructured arrangement).
ARTICLE XIV
SECTION 16 COMPLIANCE
In the event that the Company becomes subject to Section 16 of the Exchange Act, it is intended that the Plan and any Award made to a Participant subject to Section 16 of the Exchange Act will meet all of the requirements of Rule 16b-3. Accordingly, unless otherwise provided by the Committee, if any provisions of the Plan or any Award would disqualify the Plan or the Award, or would otherwise not comply with Rule 16b-3, such provision or Award will be

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construed or deemed amended to conform to Rule 16b-3.
ARTICLE XV
OTHER PROVISIONS
Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.
ARTICLE XVI
NUMBER AND GENDER
With respect to words used in the Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, and vice versa, as the context requires.
ARTICLE XVII
MISCELLANEOUS
Section 17.1.      Affiliate Employees .
In the case of a grant of an Award to an employee or consultant of any Affiliate of the Company, the Company may, if the Committee so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Affiliate, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Affiliate will transfer the shares of Common Stock to the employee or consultant in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled shall revert to the Company.
Section 17.2.      Foreign Employees and Foreign Law Considerations .
The Committee may grant Awards to individuals who are eligible to participate in the plan who are foreign nationals, who are located outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause the Company to be subject to) legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, or subplans as

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may be necessary or advisable to comply with such legal or regulatory provisions.
Section 17.3.      Information Delivery .
The Company will provide the following information to all Participants who hold Options until such times as the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or is no longer relying on the exemption from registration of stock options under the Exchange Act as provided in Rule 12h-1(f)(1) of the Exchange Act; provided that the Company’s obligation to provide any such information may be subject to any confidentiality requirements imposed by the Company:
The information described in Rules 701(e)(3), (4), and (5) under the Securities Act every six months, with the financial statements being not more than 180 days old and with such information provided either by physical or electronic delivery to the Participants who hold Options or by written notice to the Participants who hold Options of the availability of the information on an Internet site that may be password-protected and of any password needed to access the information.
ARTICLE XVIII
GOVERNING LAW
All questions concerning the construction, interpretation and validity of the Plan and the instruments evidencing the Awards granted hereunder shall be governed by and construed and enforced in accordance with the domestic laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of this Plan, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
* * * * * *
As adopted by the Board and the shareholders of ARAMARK Holdings Corporation on January 25, 2007; amended and restated and approved by the Board on November 13, 2007 and by the shareholders of ARAMARK Holdings Corporation on November 13, 2007; amended as approved by the Board on January 23, 2008; amended as approved by the Board on December 9, 2009; amended as approved by the Board on March 1, 2010; as amended and restated and approved by the Board on June 21, 2011 and by the shareholders of ARAMARK Holdings Corporation on June 21, 2011; and as amended and restated and approved by the Board on February 7, 2012 and by the shareholders of ARAMARK Holdings Corporation on February 9, 2012; and as amended and restated and approved by the Board on May 7, 2012 [and by the shareholders of ARAMARK Holdings Corporation on May __, 2012.]

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EXHIBIT 10.2
CERTIFICATE OF GRANT
Discretionary Stock Option Award
This certifies that the Participant:
[Name]
has been granted the non-qualified stock options described in this Certificate of Grant to purchase shares of ARAMARK Holdings Corporation Common Stock in accordance with the Vesting Schedule indicated below:
VESTING SCHEDULE
Time Based Options
Performance Based Options*
Vesting Date
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]

Grant Price:   []
Number of Shares:   []
Date of Grant:   []
Participant Account Number:   []
Grant Number:   []
Expiration Date:   []
This Option Award is subject to the terms and conditions of the attached Non-Qualified Stock Option Agreement (the “Option Agreement”).
*
Vesting is subject to the achievement of certain financial targets or the occurrence of certain events as described in the Option Agreement.
FORM OF NON QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) dated as of [Insert date] between ARAMARK HOLDINGS CORPORATION , a Delaware corporation (the “ Company ”), and the Optionee set forth on the Certificate of Grant and signature page to this Agreement (the “ Optionee ”).
WHEREAS, pursuant to the Agreement and Plan of Merger (the “ Merger Agreement ”) made and entered into as of the 8th day of August, 2006, by and among RMK Acquisition Corporation, a Delaware corporation (“ MergerCo ”), RMK Finance LLC, a Delaware limited liability company, and Aramark Corporation, MergerCo has been merged with and into Aramark Corporation, with Aramark Corporation surviving the merger as a wholly-owned subsidiary of the Company (the “ Transaction ”);
WHEREAS, the Company, acting through the Committee (as such term is defined in the Plan) or a subcommittee thereof, has agreed to grant to the Optionee, as of the Date of Grant set forth on the Certificate of Grant to which this Agreement is attached (the “ Grant Date ”), an option under the Aramark Holdings Corporation 2007 Management Stock Incentive Plan (as amended, the “ Plan ”) to purchase a number of shares of Common Stock on the terms and subject to the conditions set forth in this Agreement and the Plan; and

WHEREAS, the Optionee is, in connection with the execution of this Agreement, to become a

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party to the Stockholders Agreement (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the promises and of the mutual agreements contained in this Agreement, the parties hereto hereby agree as follows:
Section 1. The Plan . The terms and provisions of the Plan are hereby incorporated into this Agreement as if set forth herein in their entirety. In the event of a conflict between any provision of this Agreement and the Plan, the provisions of the Agreement shall control. A copy of the Plan has been provided to the Optionee. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Plan or the Stockholders Agreement, as the case may be.

Section 2. Option; Option Price . Effective on the Grant Date, on the terms and subject to the conditions of the Plan and this Agreement, the Company hereby grants to the Optionee the option (the “ Option ”) to purchase the number of Shares set forth on the Certificate of Grant to which this agreement is attached, at the Option Price equal to $[Insert current appraisal price]. One-half of the Option consists of options with time-based vesting (“ Time-Based Options ”), and one-half of the Option consists of options with performance-based vesting (“ Performance-Based Options ”). The payment of the Option Price may be made, at the election of the Optionee, in any manner authorized under Section 5.5 of the Plan as such section is in effect on the date of this Agreement. The Option is not intended to qualify for federal income tax purposes as an “incentive stock option” within the meaning of Section 422 of the Code.

Section 3. Term . The term of the Option (the “ Option Term ”) shall commence on the Grant Date and expire on the tenth anniversary of the Grant Date, unless the Option shall have sooner been terminated in accordance with the terms of the Plan (including, without limitation, Article V of the Plan) or this Agreement.

Section 4. Vesting . Subject to the Optionee's not having a Termination of Relationship and except as otherwise set forth in Section 7, the Options shall become non-forfeitable and exercisable (any Options that shall have become non-forfeitable and exercisable pursuant to Section 4, the “Vested Options”) according to the following provisions:

(a) Time-Based Options .

(i) Twenty-five percent (25%) of the Time-Based Options shall become Vested Options on each of the first four anniversaries of the [Grant Date][Other Date Specified by Board or Committee or Sub-Committee] (each, a “ Vesting Date ”), subject to the Optionee's continued employment with the Company through the applicable Vesting Date.

(ii) Notwithstanding Section 4(a)(1), in the event of (A) a Change of Control, each outstanding Time-Based Option which has not theretofore become a Vested Option pursuant to Section 4(a)(i) shall become a Vested Option concurrently with consummation of such event, and (B) a Termination of Relationship as a result of the Optionee's death, Disability, or Retirement (each, a “ Special Termination ”), the installment of Time-Based Options scheduled to vest during the 12-month period immediately following such Special Termination shall become Vested Options, and the remaining Time-Based Options which are not then Vested Options shall be forfeited.

(b) Performance-Based Options .

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(i) Twenty-five percent (25%) of the Performance-Based Options shall become Vested Options on each Vesting Date, subject to the Optionee's continued employment with the Company through the applicable Vesting Date and the achievement of the applicable EBIT performance target for the applicable fiscal year of the Company relating to the applicable Vesting Date (each such fiscal year, a “ Fiscal Year ”, and each such EBIT performance target, once so established, an “ EBIT Target ”); provided that for each Fiscal Year set forth on Schedule 1 to this Agreement, the Committee shall establish an EBIT Target within the first ninety days of each such Fiscal Year and communicate such EBIT Target to the Optionee promptly following such time through the delivery of an updated Schedule 1 to this Agreement.

(ii) Notwithstanding Section 4(b)(i), but, except as otherwise provided in Section 4(b)(ii)(E)) below, subject to the Optionee's continued employment with the Company through the applicable vesting event:

(A) in the event that the EBIT Target is not achieved for any particular Fiscal Year set forth on Schedule 1 to this Agreement (other than the Final Fiscal Year as defined on Schedule 1) (any such Fiscal Year, a “ Missed Year ”), if the cumulative EBIT earned as of the end of any subsequent Fiscal Year equals or exceeds the Cumulative EBIT Target (as determined by the Committee at the same time that each EBIT Target for each such subsequent Fiscal Year is established and as set forth on the relevant updated Schedule 1 to this Agreement) for such subsequent Fiscal Year (any such Fiscal Year, a “ Catch-up Year ”), then all installments of Performance-Based Options that did not become vested in respect of any Missed Year will nevertheless become Vested Options on the same date that the installment of Performance-Based Options that otherwise vests in respect of such Catch-up Year pursuant to this Section 4(b) (see the attached Schedule 2 for an example hereof);

(B) upon the consummation of a Return-Based Vesting Event (as defined below), all then-unvested Performance-Based Options shall become Vested Options concurrently with the consummation of such event;

(C) upon the consummation of a Qualified Partial Liquidity Event (as defined below), a portion of the then-unvested Performance-Based Options (in the order set forth below) shall become Vested Options concurrently with the consummation of such event, such that the total percentage of Performance-Based Options that have become Vested Options immediately after the consummation of such Qualified Partial Liquidity Event shall, after taking into account any Performance-Based Options that had become Vested Options pursuant to any other provision of Section 4(b) prior to such Qualified Partial Liquidity Event, be equal to the Partial Liquidity Vesting Percentage (as defined below) (see the attached Schedule 2 for an example hereof);

(D) upon the occurrence, prior to the conclusion of the Final Fiscal Year, of a Change of Control that is not a Return-Based Vesting Event, a percentage of the then-unvested Performance-Based Options which would have been eligible for vesting based on EBIT performance for the Fiscal Year during which the Change in Control occurs and those eligible for any subsequent Fiscal Years, equal to (x) 100% multiplied by (y) a quotient, the numerator of which is the aggregate number of Performance-Based Options that previously became Vested Options prior to the Fiscal Year in which such Change of Control occurs, and the denominator of which is the aggregate number of Performance-

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Based Options that were eligible to become Vested Options if all EBIT Targets were achieved prior to the Fiscal Year during with the Change in Control occurs, shall become Vested Options concurrently with consummation of such a Change of Control (see the attached Schedule 2 for an example hereof); and

(E) in the event of a Special Termination, all installments of unvested Performance-Based Options that would have vested during the 12-month period immediately following such Special Termination (the “ Special Termination Vesting Period ”) in accordance with the other provisions of this Section 4(b) if no such termination had occurred during such period (including in the event that any such installments would have vested based on (x) the achievement of the Cumulative EBIT Target for the Fiscal Year immediately following the Fiscal Year in which the Special Termination occurs in accordance with Section 4(b)(ii)(A) or (y) the occurrence during the Special Termination Vesting Period of a Return-Based Vesting Event, a Qualified Partial Liquidity Event or a Change of Control that is not a Return-Based Vesting Event, in accordance with Section 4(b)(ii)(B), Section 4(b)(ii)(C), or Section 4(b)(ii)(D), respectively) shall become Vested Options on the applicable Vesting Date(s) that occur during the Special Termination Vesting Period (see the attached Schedule 2 for an example hereof).

For purposes of Section 4(b)(ii)(C) above, the then-unvested Performance-Based Options shall become Vested Options in the manner set forth therein, in the following order, to the extent applicable: first, any then-unvested Performance-Based Options from any prior Missed Years (beginning with the earliest Missed Year and each subsequent Missed Year); second, the then-unvested Performance-Based Options eligible for vesting based on EBIT performance for the Fiscal Year in which the Qualified Partial Liquidity Event occurs; and third, any then-unvested Performance-Based Options eligible for vesting based on EBIT performance for the Fiscal Year immediately subsequent to the Fiscal Year in which the Qualified Partial Liquidity Event occurs and each subsequent Fiscal Year.
(c) Except as otherwise provided above with respect to a Special Termination, upon a Termination of Relationship for any reason, the unvested portion of the Option (i.e. , that portion which does not constitute Vested Options) shall terminate and cease to be outstanding on the date the Termination of Relationship occurs and shall no longer be eligible to become Vested Options, provided, however, that if upon the date the Termination of Relationship occurs, the Committee is unable to determine if the EBIT Target for the Fiscal Year immediately preceding the year in which the Termination of Relationship occurs has been met, any unvested portion of the Option that could vest based upon such determination shall not terminate until such determination is made (and shall vest if the applicable EBIT Target is achieved in accordance with Section 4(b)(ii) above)).

(d) Certain Definitions .

(i) A “ Return-Based Vesting Event ” shall be deemed to occur upon the achievement by the Sponsor Stockholders of a Sponsor IRR (or, during the Special Termination Vesting Period, the Special Termination Sponsor IRR) that would equal or exceed 15%.

(ii) A “ Qualified Partial Liquidity Event ” shall mean any disposition, whether in an IPO or other public offering, or any sale or other private transaction to any person or entity, of a portion of the Sponsor Investment (including any Change of Control, transfer

4

from one Investor Group to another Investor Group, or LP Transfer (as defined below), but excluding, for the avoidance of doubt, a Spin-off, unless and until such shares are themselves disposed of or realized upon for cash and/or liquid or marketable equity or debt securities), or a recapitalization, resulting in the achievement by the Sponsor Stockholders of a Sponsor IRR (or, during the Special Termination Vesting Period, the Special Termination Sponsor IRR) that would equal or exceed 15% when measured with respect to such disposed or otherwise realized upon portion (and all previously liquidated, disposed of or otherwise realized (in cash or marketable securities, taking into account Section 4(d)(vi)) upon portions) of the Sponsor Investment.

(iii) The “ Partial Liquidity Vesting Percentage ” shall equal the percentage of the Sponsor Investment liquidated, disposed of or otherwise realized upon in a Qualified Partial Liquidity Event; provided that, if immediately following such event, the Sponsor Stockholders have liquidated, disposed of or otherwise realized upon 80% or more of the Sponsor Investment, then the Partial Liquidity Vesting Percentage shall equal 100%.

(iv) “ Sponsor IRR ” means the pretax compounded annual internal rate of return realized by the Sponsor Stockholders on the Sponsor Investment, based on the aggregate amount invested by the Sponsor Stockholders for all Sponsor Investment and the aggregate value and amount of cash and liquid or marketable debt or equity securities (excluding securities of the Company and, in the event of a Spin-off, securities of a Subsidiary (“ Subsidiary Stock ”), unless and until such shares are themselves disposed of or realized upon for cash and/or liquid or marketable equity or debt securities) actually received by the Sponsor Stockholders or in respect of all Sponsor Investment, assuming all Sponsor Investment were purchased by one Person and were held continuously by such Person. The Sponsor IRR shall be determined based on the actual time of each Sponsor Investment and the actual cash and liquid or marketable debt or equity securities received (in each case, measured at the time of receipt) by the Sponsor Stockholders in respect of all Sponsor Investment and including, as a return on each Sponsor Investment, any cash dividends, cash distributions or cash sales by the Company or any Affiliate in respect of such Sponsor Investment during such period, any transaction fees received in connection with the Transaction, and, in the event of any distribution of Shares by a Sponsor Stockholder to its general or limited partners, members, managers or stockholders (in each such case, other than a distribution by a Sponsor Stockholder to another member of such Sponsor Stockholder's Investor Group) in accordance with such Sponsor Stockholder's governing documents (an “ LP Transfer ”), the Fair Market Value of such Shares on such distribution date (the “ LP Transfer Value ”), but excluding any amounts payable to the Sponsor Stockholders as expense reimbursements and indemnification payments.

(v) In the event of a Special Termination, the term “ Special Termination Sponsor IRR ” shall have the same meaning as “Sponsor IRR”, except that the Sponsor IRR shall also be determined by including in such calculation the following, as of the date of such termination: (x) if no IPO has occurred at such time, the Fair Market Value of the Common Stock and the fair market value (determined in a manner consistent with the manner in which the Fair Market Value is determined under the Plan) of any Subsidiary Stock then held by the Sponsor Stockholders; or (y) following an IPO, the fair market value of each of the Common Stock and any Subsidiary Stock then held by the Sponsor Stockholders, calculated based on the average trading price of the applicable stock over the 30 trading-day period prior to the applicable potential Vesting Date (the amounts in clauses (x) and (y), collectively, the “ Special Termination Valuations ”).

5


All decisions by the Committee with respect to any calculations pursuant to this Section 4 shall be made in good faith after consultation with senior management and shall be final and binding on the Optionee absent manifest error by the Committee.
Section 5. Restriction on Transfer/Stockholders Agreement . The Option may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by the Optionee, except (i) if permitted by the Board or the Committee, (ii) by will or the laws of descent and distribution or (iii) pursuant to beneficiary designation procedures approved by the Company. The Option shall not be subject to execution, attachment or similar process. Shares of Common Stock acquired pursuant to the exercise of Options hereunder will be subject to the Stockholders Agreement. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of this Agreement or the Stockholders Agreement shall be null and void and without effect.

Section 6. Optionee's Employment . Nothing in this Agreement or in the Option shall confer upon the Optionee any right to continue in the employ of the Company or any of its Subsidiaries or interfere in any way with the right of the Company and its Subsidiaries, in their sole discretion, to terminate the Optionee's employment or to increase or decrease the Optionee's compensation at any time.

Section 7. Termination . The Option shall automatically terminate and shall become null and void, be unexercisable and be of no further force and effect upon the earliest of:

(a) so long as the Optionee remains employed by the Company or one of its Affiliates, the tenth anniversary of the Grant Date;

(b) in the case of a Termination of Relationship due to a Special Termination, (i) with respect to any Time-Based Options and Performance-Based Options that are vested as of the Termination of Relationship, the first anniversary of the Termination of Relationship, and (ii) with respect to any Performance-Based Option that becomes a Vested Option pursuant to Section 4(b)(ii)(E), the later of the first anniversary of the Termination of Relationship and the 90th day following the last Vesting Date (if any) that occurs during the Special Termination Vesting Period;

(c) in the case of a Termination of Relationship other than (x) for Cause or (y) due to a Special Termination, the 90th day following the Termination of Relationship; and

(d) the day of the Termination of Relationship in the case of a Termination of Relationship for Cause.

Section 8. Securities Law Representations . The Optionee acknowledges that, unless and until the Option and the Shares are registered under the Securities Act on a Form S-8, the Option and the Shares are not being registered under the Securities Act, based, in part, on either (i) reliance upon an exemption from registration under Securities and Exchange Commission Rule 701 promulgated under the Securities Act or (ii) the fact that the Optionee is an “accredited investor”(as defined under the Securities Act and the rules and regulations promulgated there under), and, in each of (i) and (ii) above, a comparable exemption from qualification under applicable state securities laws, as each may be amended from time to time. The Optionee, by executing this Agreement, hereby agrees that the Optionee shall make such representations as may be required to be made by the Optionee upon any acquisition of Shares hereunder as set forth in

6

the Stockholders Agreement, as such representations, if any, shall be required to be made at such time. The Optionee further represents the following, as of the date hereof:

The Optionee represents and warrants that (i) such party has full legal power, authority and right to execute and deliver, and to perform its obligations under, this Agreement, and (ii) this Agreement has been duly and validly executed and delivered by such party and constitutes a valid and binding agreement of such party enforceable against such party in accordance with its terms.
•
The Optionee has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Option and the restrictions imposed on any Shares purchased upon exercise of the Option.
•
The Optionee is aware that the Option may be of no practical value, that any value it may have depends on its vesting and exercisability as well as an increase in the Fair Market Value of the underlying Shares to an amount in excess of the Option Price, and that any investment in common shares of a closely held corporation such as the Company is non-marketable, non-transferable and could require capital to be invested for an indefinite period of time, possibly without return, and at substantial risk of loss.
•
The Optionee has read and understands the restrictions and limitations set forth in the Stockholders Agreement, the Plan and this Agreement.
•
The Optionee has not relied upon any oral representation made to the Optionee relating to the Option or the purchase of the Shares on exercise of the Option or upon information presented in any meeting or material relating to the Option or the Shares.
•
The Optionee understands and acknowledges that, if and when the Optionee exercises the Option, (a) any certificate evidencing the Shares (or evidencing any other securities issued with respect thereto pursuant to any stock split, stock dividend, merger or other form of reorganization or recapitalization) when issued shall bear any legends which may be required by applicable federal and state securities laws, and (b) except as otherwise provided in this Agreement or under the Stockholders Agreement or the Registration Rights Agreement (as such term is defined in the Stockholders Agreement), the Company has no obligation to register the Shares or file any registration statement under federal or state securities laws.

Section 9. [Intentionally Omitted .]

Section 10. [Intentionally Omitted .]

Section 11. Notices . All notices, claims, certifications, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given and delivered if personally delivered or if sent by nationally-recognized overnight courier, by telecopy, email or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:

If to the Company, to it at:
If to the Company, to:
ARAMARK Holdings Corporation
ARAMARK Tower
1101 Market Street
Philadelphia, PA 19107-2988

7

Attention: Head of Human Resources

With a copy to:
ARAMARK Holdings Corporation
ARAMARK Tower
1101 Market Street
Philadelphia, PA 19107-2988
Attention: General Counsel

If to the Optionee, to him at the address set forth on the signature page hereto; or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such notice or other communication shall be deemed to have been received (a) in the case of personal delivery, on the date of such delivery (or if such date is not a business day, on the next business day after the date of delivery), (b) in the case of nationally-recognized overnight courier, on the next business day after the date sent, (c) in the case of telecopy transmission, when received (or if not sent on a business day, on the next business day after the date sent), and (d) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.
The Company shall, reasonably promptly upon the occurrence of any vesting pursuant to Section 4(b)(ii)(E) above, provide notice to the Optionee of such vesting (it being understood that a failure to so provide such notice shall not result in an extension of the applicable Option exercise period, but shall constitute a breach of this Agreement).
Section 12. Waiver of Breach . The waiver by either party of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any other or subsequent breach.

Section 13. Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.
Section 14. Withholding . As a condition to exercising this Option in whole or in part, the Optionee will pay, or make provisions satisfactory to the Company for payment of, any Federal, state, local and other applicable taxes required to be withheld in connection with such exercise in a manner that is set forth in Section 5.6 of the Plan.

Section 15. Adjustment to Option; Registration of Shares . In the event of any event described in Article VII of the Plan occurring after the Grant Date, the adjustment provisions (including cash payments) as provided for under Article VII of the Plan shall apply. The Company shall, concurrently with the closing of a Public Offering, register all Shares subject to an Option by filing a Form S-8 with the U.S. Securities Exchange Commission.


8

Section 16. Section 409A of the Code . If any term, distribution or settlement of this Agreement, or any other action by the Company (including by the Committee) pursuant to the terms of the Plan or this Agreement, would subject the Optionee to tax under Section 409A of the Code, the Company shall indemnify and hold harmless the Optionee for any taxes, interest and penalties the Optionee may incur under Section 409A of the Code as a result thereof, such that on a net-after-tax basis, the Optionee shall not be liable for any such taxes, interest or penalties, or for any taxes, interest or penalties imposed upon the Company's provision of such indemnity. The Company and the Optionee shall cooperate in good faith, and consult with tax counsel to the Company, to restructure the Option and this Agreement (which may require the provision of an alternative payment or benefit, but which shall not convey an economic benefit to the Optionee that is diminished in value to the Optionee other than in a de minims manner) in a manner that will cause the Optionee to not be subject to such taxes, interest and penalties in respect of the Option and this Agreement (or any such restructured arrangement).

Section 17. Modification of Rights; Entire Agreement . The Optionee's rights under this Agreement and the Plan may be modified only to the extent expressly provided under this Agreement or under Article X or Article XIV of the Plan. This Agreement and the Plan (and the other writings referred to herein, including the Stockholders Agreement or the Registration Rights Agreement) constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior written or oral negotiations, commitments, representations and agreements with respect thereto.

Section 18. Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 19. Waiver of Jury Trial; Legal Fees . Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, trial by jury in any suit, action or proceeding arising hereunder or under any other agreement regarding any option to purchase Shares that may be granted to the Optionee under the Plan after the date of this Agreement. In the event of any dispute regarding any term of this Option, the Company shall promptly reimburse the Optionee for all legal fees and expenses the Optionee incurs in connection with such dispute if the Optionee prevails in such dispute on a substantial portion of the claims under such dispute.

Section 20. FOREFEITURE IF AGREEMENT NOT EXECUTED IN 90 DAYS . THIS AGREEMENT AND THE OPTION SHALL AUTOMATICALLY TERMINATE AND SHALL BECOME NULL AND VOID AND BE OF NO FURTHER FORCE AND EFFECT, AND THE OPTIONEE SHALL HAVE NO FURTHER RIGHTS UNDER THIS AGREEMENT, IF THE OPTIONEE DOES NOT RETURN AN EXECUTED COUNTERPART TO THIS AGREEMENT TO THE COMPANY WITHIN 90 DAYS OF THE GRANT DATE .

9


Section 21. Counterparts . This Agreement may be executed in one or more counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts together shall constitute but one agreement.

10


IN WITNESS WHEREOF, the parties hereto have executed this Nonqualified Stock Option Agreement as of the date first written above.
ARAMARK HOLDINGS CORPORATION
 
 
 
 
By:
 
 
 
 
Lynn B. McKee
 
Executive Vice President, Human Resources
 
 
 
 
 
 
 

 
OPTIONEE
 
 
(Signature of Optionee)
 
 
 
(Print Name of Optionee)
 
 





11

Schedule 1 (for grants on or prior to June 30, 2012)
EBIT Targets
(in millions)
Year
Annual
EBIT Target
Cumulative
EBIT Target
2012
$834.7
$N/A
2013
$[]*
$[]*
2014
$[]*
$[]*
2015 (the “Final Fiscal Year”)
$[]*
$[]*
EBIT shall mean for any Fiscal Year, net income increased by (i) net interest expense and (ii) the provision for income taxes; all determined in accordance with U.S. generally accepted accounting principles (GAAP) consistently applied on a consolidated basis. For this purpose EBIT shall:
1.
Exclude any extraordinary gains or losses, cumulative effect of a change in accounting principle, income or loss from disposed or discontinued operations and any gains or losses on disposed or discontinued operations, all as determined in accordance with GAAP.
2.
Exclude any gain or loss greater than $2 million attributable to asset dispositions, contract terminations and similar items, provided that losses on contract terminations and asset dispositions in connection with client contract terminations shall be limited in any given Fiscal Year to $5 million.
3.
Exclude any increase in amortization or depreciation resulting from the application of purchase accounting to the Transaction, including the current amortization of existing acquired intangibles.
4.
Exclude any gain or loss from the early extinguishment of indebtedness including any hedging obligations or other derivative instrument.
5.
Exclude any impairment charge or similar asset write off required by GAAP.
6.
Exclude any non cash compensation expense resulting from the application of SFAS No. 123R or similar accounting requirements.
7.
Exclude any expenses or charges related to any equity offering, acquisition, disposition, recapitalization, refinancing or similar transaction, including the Transaction.
8.
Exclude any transaction, management, monitoring, consulting, advisory and related fees and expenses paid or payable to the Sponsor Stockholders.
9.
Exclude the effects of changes in foreign currency translation rates from such rates used in the calculation of the EBIT Targets based on the 2011 Business Plan approved by the Board.
10.
Exclude the impact that the 53rd week of operations will have on the Company's financial results during any 53 week fiscal year referenced in this Schedule.

The final EBIT calculation for any Fiscal Year will be subject to review and approval by the Committee.
The EBIT Targets shall be adjusted for acquisitions as follows:
1.
For acquisitions having purchase consideration of less than $20 million each, there shall be no adjustment until the aggregate consideration for all such acquisitions exceeds $20 million in any Fiscal Year and then the EBIT Targets shall be adjusted to the extent the consideration for all such acquisitions exceeds $20 million. The amount of the adjustment shall be based on the last twelve months earnings of the acquired business, provided however, that the last twelve months earnings shall be adjusted, if necessary, to reflect the sustainable underlying profitability of the acquired business. If the purchase consideration for all such acquisitions is less than $20 million in any Fiscal Year, the amount by which $20 million exceeds such

12

aggregate consideration shall be carried forward to future Fiscal Years for purposes of making this determination under this sub paragraph a).
2.
For acquisitions having purchase consideration of more than $20 million each, the EBIT Targets shall be adjusted based on the pro forma used to approve the acquisition.

The EBIT Targets will be adjusted for divestitures of a business by the amount of the last twelve months earnings of the divested business.
                                       
*
The Committee shall establish these targets in accordance with Section 4(b) of the Agreement to which this Schedule 1 is attached, which targets shall be deemed incorporated into this Schedule 1 as and when the Committee establishes such targets and the Company provides written notice of each such target to the Optionee.



13

Schedule 1 (for grants after June 30, 2012)
EBIT Targets
(in millions)
Year
Annual
EBIT Target
Cumulative
EBIT Target
2013
$[]*
$N/A
2014
$[]*
$[]*
2015
$[]*
$[]*
2016 (the “Final Fiscal Year”)
$[]*
$[]*
EBIT shall mean for any Fiscal Year, net income increased by (i) net interest expense and (ii) the provision for income taxes; all determined in accordance with U.S. generally accepted accounting principles (GAAP) consistently applied on a consolidated basis. For this purpose EBIT shall:
1.
Exclude any extraordinary gains or losses, cumulative effect of a change in accounting principle, income or loss from disposed or discontinued operations and any gains or losses on disposed or discontinued operations, all as determined in accordance with GAAP.
2.
Exclude any gain or loss greater than $2 million attributable to asset dispositions, contract terminations and similar items, provided that losses on contract terminations and asset dispositions in connection with client contract terminations shall be limited in any given Fiscal Year to $5 million.
3.
Exclude any increase in amortization or depreciation resulting from the application of purchase accounting to the Transaction, including the current amortization of existing acquired intangibles.
4.
Exclude any gain or loss from the early extinguishment of indebtedness including any hedging obligations or other derivative instrument.
5.
Exclude any impairment charge or similar asset write off required by GAAP.
6.
Exclude any non cash compensation expense resulting from the application of SFAS No. 123R or similar accounting requirements.
7.
Exclude any expenses or charges related to any equity offering, acquisition, disposition, recapitalization, refinancing or similar transaction, including the Transaction.
8.
Exclude any transaction, management, monitoring, consulting, advisory and related fees and expenses paid or payable to the Sponsor Stockholders.
9.
Exclude the effects of changes in foreign currency translation rates from such rates used in the calculation of the EBIT Targets based on the 2011 Business Plan approved by the Board.
10.
Exclude the impact that the 53rd week of operations will have on the Company's financial results during any 53 week fiscal year referenced in this Schedule.

The final EBIT calculation for any Fiscal Year will be subject to review and approval by the Committee.
The EBIT Targets shall be adjusted for acquisitions as follows:
1.
For acquisitions having purchase consideration of less than $20 million each, there shall be no adjustment until the aggregate consideration for all such acquisitions exceeds $20 million in any Fiscal Year and then the EBIT Targets shall be adjusted to the extent the consideration for all such acquisitions exceeds $20 million. The amount of the adjustment shall be based on the last twelve months earnings of the acquired business, provided however, that the last twelve months earnings shall be adjusted, if necessary, to reflect the sustainable underlying profitability of the acquired business. If the purchase consideration for all such acquisitions is less than $20 million in any Fiscal Year, the amount by which $20 million exceeds such

14

aggregate consideration shall be carried forward to future Fiscal Years for purposes of making this determination under this sub paragraph a).
2.
For acquisitions having purchase consideration of more than $20 million each, the EBIT Targets shall be adjusted based on the pro forma used to approve the acquisition.

The EBIT Targets will be adjusted for divestitures of a business by the amount of the last twelve months earnings of the divested business.
                                   
*
The Committee shall establish these targets in accordance with Section 4(b) of the Agreement to which this Schedule 1 is attached, which targets shall be deemed incorporated into this Schedule 1 as and when the Committee establishes such targets and the Company provides written notice of each such target to the Optionee.




15

Schedule 2
Examples of Application of Certain Provisions of Section 4(b)(ii)
For ease of reference, the following is based on the following hypothetical EBIT targets (assuming for these purposes that all EBIT targets have been set):
EBIT Targets
Year
Annual EBIT
Target
Cumulative
EBIT Target
First Fiscal Year
$10.00
N/A
Second Fiscal Year
$15.00
$25.00
Third Fiscal Year
$20.00
$45.00
Fourth Fiscal Year
$25.00
$60.00

Section 4(b)(ii)(A)
First Fiscal Year: EBIT is $8.00. No Performance-Based Options for First Fiscal Year vest.
Second Fiscal Year: Annual EBIT is $16.00, Cumulative EBIT is $24.00. Performance-Based Options for Second Fiscal Year vest because annual EBIT Target is achieved, Performance-Based Options for First Fiscal Year do not vest because Cumulative EBIT Target is not achieved .
Third Fiscal Year: Annual EBIT is $25.00, Cumulative EBIT is $49.00. Performance-Based Options for Third Fiscal Year vest because annual EBIT is achieved; Performance-Based Options for First Fiscal Year also vest because Cumulative EBIT Target is achieved .
Section 4(b)(ii)(C)
First Fiscal Year: EBIT is $12.00. Performance-Based Options for First Fiscal Year vest (i.e., 25% of all Performance-Based Options are vested) .
Second Fiscal Year: EBIT is $14.00. No Performance-Based Options for Second Fiscal Year vest (i.e., Optionee is still only vested in 25% of all Performance-Based Options).
Third Fiscal Year: A Qualified Partial Liquidity Event occurs where the Partial Liquidity Vesting Percentage is 75%. Performance-Based Options for Second Fiscal Year vest and, whether or not either of the EBIT Targets for Third Fiscal Year is achieved, the Performance-Based Options for Third Fiscal Year will also vest, such that the Optionee will be 75% vested in all Performance-Based Options .
Section 4(b)(ii)(D)
First Fiscal Year: EBIT is $16.00. Performance-Based Options for First Fiscal Year vest (i.e., 100% of all Performance-Based Options that were eligible to vest in First Fiscal Year are vested) .
Second Fiscal Year: EBIT is $14.00. No Performance-Based Options for Second Fiscal Year vest (i.e., Optionee is only 50% vested in all Performance-Based Options that were eligible to vest in First Fiscal Year and Second Fiscal Year combined) .
Third Fiscal Year: A Change of Control that is not a Return-Based Vesting Event occurs. 50% of the Performance-Based Options for Third Fiscal Year and Fourth Fiscal Year will become vested.

16

Section 4(b)(ii)(B) and (E)
First Fiscal Year: EBIT is $8.00. No Performance-Based Options for First Fiscal Year vest .
Second Fiscal Year: EBIT is $14.00. No Performance-Based Options for First Fiscal Year or Second Fiscal Year vest .
January of Third Fiscal Year: Optionee's employment terminates due to Retirement.
August of Third Fiscal Year: A Return-Based Vesting Event occurs. All Performance-Based Options (for First Fiscal Year through Fourth Fiscal Year) vest, even though the event occurs after the Optionee's employment terminates, because the event occurs within 12 months after the termination of employment .



17


        
Exhibit 10.3
        
CERTIFICATE OF GRANT
Installment Stock Purchase Opportunity Award
This certifies that the Participant :
[Name]
has been granted the non-qualified stock options described in this Certificate of Grant to purchase shares of ARAMARK Holdings Corporation Common Stock in accordance with the Vesting Schedule indicated below :
VESTING SCHEDULE
Installment
Number of Shares Vested
Vesting Date
Minimum Exercisable
Expiration Date  If the relevant Expiration Date is not a business day, then the relevant Expiration Date shall not occur until the next business day following the relevant Expiration Date.
1
[20% of Total Shares]
[Grant Date]
100 up to [25% rounded up]
The first anniversary of the Grant Date.
2
[20% of Total Shares]
December 15, ____ December 15 of calendar year following year of Grant Date, and each of the next 3 anniversaries thereof.
100
[31 Days after Vesting]
3
[20% of Total Shares]
December 15, ____
100
[31 Days after Vesting]
4
[20% of Total Shares]
December 15, ____
100
[31 Days after Vesting]
5
[20% of Total Shares]
December 15, ____
100
[31 Days after Vesting]

Option Price : [ •]
Number of Shares : [•]
Grant Date : [•]
Participant Account Number : [•]
Grant Number : [•]
Expiration Date : [•]

This Option Award is subject to the terms and conditions of the attached Non-Qualified Installment Stock Purchase Opportunity Agreement (the “ Agreement ”).
                                                      
1 - If the relevant Expiration Date is not a business day, then the relevant Expiration Date shall not occur until the next business day following the relevant Expiration Date.
2 - December 15 of calendar year following year of Grant Date, and each of the next 3 anniversaries thereof.

1


FORM OF NON QUALIFIED INSTALLMENT STOCK PURCHASE OPPORTUNITY AGREEMENT (this “ Agreement ”) dated as of [ ][ ], 20[12][13] between ARAMARK HOLDINGS CORPORATION , a Delaware corporation (the “ Company ”), and the participant set forth on the Certificate of Grant and signature page to this Agreement (the “ Participant ”).
WHEREAS , the Company, acting through the Committee (as such term is defined in the Plan) or a subcommittee thereof, has agreed to grant to the Participant, as of the date of grant set forth on the Certificate of Grant to which this Agreement is attached (the “ Grant Date ”), an option under the Aramark Holdings Corporation Amended and Restated 2007 Management Stock Incentive Plan (the “ Plan ”) to purchase a number of shares of Common Stock on the terms and subject to the conditions set forth in this Agreement and the Plan; and
WHEREAS , the Participant is either already, or in connection with the execution of this Agreement is to become, a party to the Stockholders Agreement (as such term is defined in the Plan).
NOW , THEREFORE , in consideration of the promises and of the mutual agreements contained in this Agreement, the parties hereto hereby agree as follows:
Section 1. The Plan . The terms and provisions of the Plan are hereby incorporated into this Agreement as if set forth herein in their entirety. In the event of a conflict between any provision of this Agreement and the Plan, the provisions of the Agreement shall control. A copy of the Plan has been provided to the Participant. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Plan or the Stockholders Agreement, as the case may be.

Section 2. Option; Option Price . Effective on the Grant Date, on the terms and subject to the conditions of the Plan and this Agreement, the Company hereby grants to the Participant the option (the “ Option ”) to purchase the number of Shares set forth on the Certificate of Grant to which this agreement is attached, at the Option Price equal to $ [the most recent quarterly appraisal price of one share of Common Stock] . The payment of the Option Price may be made, at the election of the Participant and in accordance with Section 9 hereof. The Option is not intended to qualify for federal income tax purposes as an “incentive stock option” within the meaning of Section 422 of the Code.

Section 3. Term .

(i) The term of the Option (the “ Option Term ”) shall commence on the Grant Date and expire in accordance with Section 8 below.

Section 4. Vesting and Exercisability .

(a) Subject to the Participant not having a Termination of Relationship and except as otherwise set forth in Section 8 hereof, the Options shall become vested and exercisable (any Options that shall have become vested and exercisable pursuant to this Section 4 , the “ Vested Options ,” and the date on which the Options have become vested and exercisable, the “ Vesting Date ”) according to the following provisions:

(i) Twenty percent (20%) of the Option shall become Vested Options immediately on the Grant Date (the “ Installment 1 Option ”).


2


(ii) Twenty percent (20%) of the Option shall become Vested Options on each December 15 th occurring after the first through fourth anniversaries of the Grant Date, subject to the Participant's continued employment with the Company through the applicable Vesting Date (the “ Installment 2 Option ,” “ Installment 3 Option ,” “ Installment 4 Option ,” and “ Installment 5 Option ,” respectively, and collectively, the “ Option Installments ”), as set forth on the Certificate of Grant to which this Agreement is attached.

(b)            Notwithstanding Section 4(a)(i) and Section 4(a)(ii) , in the event of a Change of Control, each outstanding Option which has not theretofore become a Vested Option pursuant to Section 4(a)(i) or Section 4(a)(ii) , or otherwise been terminated pursuant to Section 8 hereof, shall become a Vested Option concurrently with consummation of such event.

Section 5.      Minimum Exercise . At the time of exercise, the Participant shall exercise no less than a portion of the Vested Options equal to one-hundred (100) underlying Shares for each of the Installment 1 Option, Installment 2 Option, Installment 3 Option, Installment 4 Option and Installment 5 Option.

Section 6.      Restriction on Transfer/Stockholders Agreement .

(a) The Option may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by the Participant, except (i) if permitted by the Board or the Committee or (ii) by will or the laws of descent and distribution. The Option shall not be subject to execution, attachment or similar process. Shares of Common Stock acquired pursuant to the exercise of Options hereunder will be subject to the Stockholders Agreement. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions of this Agreement or the Stockholders Agreement shall be null and void and without effect.
(b)            Notwithstanding Section 6.01 of the Stockholders Agreement, Shares acquired upon the exercise of the Option may not be subject to a Put Purchase (as defined in the Stockholders Agreement) and may not otherwise be sold, unless such Shares have been held for at least six months (or such other period necessary in order to satisfy applicable generally accepted accounting principles) by the Participant.

Section 7.     Participant's Employment . Nothing in this Agreement or in the Option shall confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries or interfere in any way with the right of the Company and its Subsidiaries, in their sole discretion, to terminate the Participant's employment or to increase or decrease the Participant's compensation at any time.

Section 8.     Termination of Option .
(a) The Option shall automatically terminate and be of no further force and effect as follows:

(i) With respect to the Installment 1 Option (and all other Option Installments), on the first anniversary of the Vesting Date, unless the Participant exercises at least twenty-five percent (25%) of the Installment 1 Option prior to such first anniversary; provided , further , that if a Termination of Relationship occurs prior to the first anniversary of the Vesting Date, the Installment 1 Option (and all other Option Installments) shall terminate, if not exercised, on the earlier of: (i) the first anniversary of the Vesting Date, (ii) the 31 st

3


day following the date of termination or (iii) the date the Termination of Relationship occurs, if such Termination of Relationship is for Cause by the Company and its Subsidiaries; and

(ii) if the Option has not otherwise terminated pursuant to clause (i) hereof, with respect to each of the Installment 2 Option, Installment 3 Option, Installment 4 Option and Installment 5 Option, on the 31 st day following the applicable Vesting Date; provided , that that if a Termination of Relationship occurs during any 31-day period following a Vesting Date, the Option Installment that has become vested on such Vesting Date (and any remaining Option Installment) shall terminate, if not exercised, on the earlier of (i) the 31 st day following such Vesting Date and (ii) the date the Termination of Relationship occurs, if such Termination of Relationship is for Cause by the Company and its Subsidiaries.

(b)            Except as otherwise provided above in Section 8(a)(i) and (ii), the unvested portions of the Option (i.e., those Option Installments that have not yet become Vested Options) shall terminate and cease to be outstanding on the date on which the Termination of Relationship occurs and shall no longer be eligible to be a Vested Option.

Section 9.     Payment of Option Price and Tax Withholding

(a) The aggregate Option Price and any Federal, state, local and other applicable taxes (individually or collectively, a “ Tax ”) required to be withheld in connection with the exercise of any portion of the Option shall, to the extent permitted by applicable law, be paid:

(i) in cash (by wire transfer of immediately available funds to a bank account of the Company, by delivery of a certified check payable to the Company);

(ii) in the case of the aggregate Option Price only, by surrender of shares of Common Stock (by delivery of such shares or by attestation) previously held by the Participant prior to the exercise of the Option, having a Fair Market Value equal to the Option Price; so long as such Shares have been held by the Participant for such period, if any, as may be required from time to time by the Committee in order to satisfy applicable generally accepted accounting principles; provided , however , that the Participant may not pay by surrender of shares of Common Stock if the Option Price is greater than the Fair Market Value per Share on the date of exercise; and provided further , that as a condition to paying by surrender of shares of Common Stock hereunder, the Participant is deemed to have acknowledged and agreed to the provisions of Section 6(b) of this Agreement;

(iii) if the Common Stock is a class of securities then listed or admitted to trading on any national securities exchange or traded on any national market system (including, but not limited to, The Nasdaq National Market), in compliance with any cashless exercise program authorized by the Board or the Committee for use in connection with the Plan at the time of such exercise (but, subject in any case, to the applicable limitations of Rule 16b-3 under the Exchange Act); or

(iv) by any other manner authorized by the Committee (or Award Committee, as applicable); provided , however , that (unless otherwise determined by any such Committee) neither the aggregate Option Price nor any Tax may be paid pursuant to a Net Exercise arrangement.

4


Section 10.     Securities Law Representations . The Participant acknowledges that, unless and until the Option and the Shares are registered under the Securities Act on a Form S-8, the Option and the Shares are not being registered under the Securities Act, based, in part, on either (i) reliance upon an exemption from registration under Securities and Exchange Commission Rule 701 promulgated under the Securities Act or (ii) the fact that the Participant is an “accredited investor” (as defined under the Securities Act and the rules and regulations promulgated thereunder), and, in each of (i) and (ii) above, a comparable exemption from qualification under applicable state securities laws, as each may be amended from time to time. The Participant, by executing this Agreement, hereby agrees that the Participant shall make such representations as may be required to be made by the Participant upon any acquisition of Shares hereunder as set forth in the Stockholders Agreement, as such representations, if any, shall be required to be made at such time. The Participant further represents the following, as of the date hereof:

The Participant represents and warrants that (i) such party has full legal power, authority and right to execute and deliver, and to perform its obligations under, this Agreement, and (ii) this Agreement has been duly and validly executed and delivered by such party and constitutes a valid and binding agreement of such party enforceable against such party in accordance with its terms.
•
The Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the Option and the restrictions imposed on any Shares purchased upon exercise of the Option.
•
The Participant is aware that the Option may be of no practical value, that any value it may have depends on its vesting and exercisability as well as an increase in the Fair Market Value of the underlying Shares to an amount in excess of the Option Price, and that any investment in common shares of a closely held corporation such as the Company is non-marketable, non-transferable and could require capital to be invested for an indefinite period of time, possibly without return, and at substantial risk of loss.
•
The Participant has read and understands the restrictions and limitations set forth in the Stockholders Agreement, the Plan and this Agreement.
•
The Participant has not relied upon any oral representation made to the Participant relating to the Option or the purchase of the Shares on exercise of the Option or upon information presented in any meeting or material relating to the Option or the Shares.
•
The Participant understands and acknowledges that, if and when the Participant exercises the Option, (a) any certificate evidencing the Shares (or evidencing any other securities issued with respect thereto pursuant to any stock split, stock dividend, merger or other form of reorganization or recapitalization) when issued shall bear any legends which may be required by applicable federal and state securities laws, and (b) except as otherwise provided in this Agreement or under the Stockholders Agreement or the Registration Rights Agreement (as such term is defined in the Stockholders Agreement), the Company has no obligation to register the Shares or file any registration statement under federal or state securities laws.

Section 11.     Notices . All notices, claims, certifications, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given and delivered if personally delivered or if sent by nationally-recognized overnight courier, by telecopy, email or by registered or certified mail, return receipt requested and postage prepaid, addressed as

5


follows:

If to the Company, to it at:
If to the Company, to:
ARAMARK Holdings Corporation
ARAMARK Tower
1101 Market Street
Philadelphia, PA 19107-2988
Attention: Head of Human Resources

With a copy to:
ARAMARK Holdings Corporation
ARAMARK Tower
1101 Market Street
Philadelphia, PA 19107-2988
Attention: General Counsel

If to the Participant, to him at the address set forth on the signature page hereto; or to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such notice or other communication shall be deemed to have been received (a) in the case of personal delivery, on the date of such delivery (or if such date is not a business day, on the next business day after the date of delivery), (b) in the case of nationally-recognized overnight courier, on the next business day after the date sent, (c) in the case of telecopy transmission, when received (or if not sent on a business day, on the next business day after the date sent), and (d) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.
Section 12.     Waiver of Breach . The waiver by either party of a breach of any provision of this Agreement must be in writing and shall not operate or be construed as a waiver of any other or subsequent breach.

Section 13.     Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

Section 14.      Adjustment to Option; Registration of Shares . In the event of any event described in Article VII of the Plan occurring after the Grant Date, the adjustment provisions (including cash payments) as provided for under Article VII of the Plan shall apply. The Company shall, concurrently with the closing of a Public Offering, register all Shares subject to an Option by filing a Form S-8 with the U.S. Securities Exchange Commission.


6


Section 15.     Section 409A of the Code . If any term, distribution or settlement of this Agreement, or any other action by the Company (including by the Committee) pursuant to the terms of the Plan or this Agreement, would subject the Participant to tax under Section 409A of the Code, the Company shall indemnify and hold harmless the Participant for any taxes, interest and penalties the Participant may incur under Section 409A of the Code as a result thereof, such that on a net-after-tax basis, the Participant shall not be liable for any such taxes, interest or penalties, or for any taxes, interest or penalties imposed upon the Company's provision of such indemnity. The Company and the Participant shall cooperate in good faith, and consult with tax counsel to the Company, to restructure the Option and this Agreement (which may require the provision of an alternative payment or benefit, but which shall not convey an economic benefit to the Participant that is diminished in value to the Participant other than in a de minimis manner) in a manner that will cause the Participant to not be subject to such taxes, interest and penalties in respect of the Option and this Agreement (or any such restructured arrangement).

Section 16.     Modification of Rights; Entire Agreement . The Participant's rights under this Agreement and the Plan may be modified only to the extent expressly provided under this Agreement or under Article X or Article XIV of the Plan. This Agreement and the Plan (and the other writings referred to herein, including the Stockholders Agreement or the Registration Rights Agreement) constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior written or oral negotiations, commitments, representations and agreements with respect thereto.

Section 17.     Severability . It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 18.     Waiver of Jury Trial; Legal Fees . Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, trial by jury in any suit, action or proceeding arising hereunder or under any other agreement regarding any option to purchase Shares that may be granted to the Participant under the Plan after the date of this Agreement. In the event of any dispute regarding any term of this Option, the Company shall promptly reimburse the Participant for all legal fees and expenses the Participant incurs in connection with such dispute if the Participant prevails in such dispute on a substantial portion of the claims under such dispute.

Section 19.     FOREFEITURE IF AGREEMENT NOT EXECUTED IN 90 DAYS . THIS AGREEMENT AND THE OPTION SHALL AUTOMATICALLY TERMINATE AND SHALL BECOME NULL AND VOID AND BE OF NO FURTHER FORCE AND EFFECT, AND THE PARTICIPANT SHALL HAVE NO FURTHER RIGHTS UNDER THIS AGREEMENT, IF THE PARTICIPANT DOES NOT RETURN AN EXECUTED COUNTERPART TO THIS AGREEMENT TO THE COMPANY WITHIN 90 DAYS OF

7


THE GRANT DATE .

Section 20.     Counterparts . This Agreement may be executed in one or more counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts together shall constitute but one agreement.

IN WITNESS WHEREOF , the parties hereto have executed this Nonqualified Stock Option Agreement as of the date first written above.
ARAMARK HOLDINGS CORPORATION
By:
 
 
 
Name:
 
 
Title:
 


PARTICIPANT
 
                                                                 
(Signature of Participant)


                                                                 
(Print Name of Participant)
 



8

Exhibit 10.4

May 7, 2012

Eric Foss
_________________
_________________

Dear Eric:

On behalf of ARAMARK Corporation (the “ Company ”), I am extremely pleased to offer you the position of Chief Executive Officer and President of the Company (“ CEO ”), in accordance with the general terms and conditions of this letter agreement. As CEO, you will report to the Board of Directors of the ARAMARK Holdings Corporation (the “ Board ”) and will have such duties and authorities as are set forth in the Company’s by-laws or as are assigned from time to time by the Board. You will also be elected to and serve as a member of the Board, without additional compensation for such service, so long as the Company is controlled by investment funds associated with or designated by GS Capital Partners, CCMP Capital Investors, J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus. Thereafter, you will be included as a nominee for election to the Board at each annual shareholders meeting which occurs while you are CEO, in accordance with the Company’s by-laws. Your employment with the Company will be at-will and may be terminated by the Company at any time, subject to the terms and conditions of that certain ARAMARK Corporation Agreement Relating to Employment and Post-Employment Compensation to be executed by and between you and the Company in the form attached to this letter agreement as Exhibit A.

With respect to compensation for your services as CEO, you will receive the following compensation and benefits, from which the Company shall be entitled to withhold any amount required by law:

(i)
The Company shall pay you a base salary (“ Base Salary ”) at the initial rate of $1,350,000 per annum, payable in accordance with the customary payroll practices for senior executives of the Company. The compensation committee of the Board (“ Committee ”) shall review your performance on a periodic basis and, in its sole discretion, may (but is not required to) increase your Base Salary. Any such increased salary shall thereafter be your Base Salary.

(ii)
You will receive a guaranteed six month pro-rated bonus for fiscal year 2012. The amount of the bonus will be equal to $1,012,500 (calculated based on the amount of the full year annual target bonus of $2,025,000 set forth in clause (iii) below multiplied by one-half), payable at such time as bonuses are paid in respect of fiscal year 2012 under the Company’s Bonus Plan (as defined below).

(iii)
Commencing in fiscal year 2013, the Company shall provide you with an annual cash target bonus opportunity that will be determined annually by the Committee, with an initial target of 150% of your Base Salary (your “ Target Bonus ”), payable upon the Company’s achievement of certain performance targets established annually by the Committee, consistent with current practice based on management’s recommendation of the annual business plan, all pursuant to the terms of the Company’s Senior Executive Annual Performance Bonus Plan (the “ Bonus Plan ”).

(iv)
With respect to fiscal year 2013, your total annual cash (i.e., your Base Salary and Target Bonus


opportunity) and equity-based compensation package will be based on total annual compensation values at the 75 th percentile of our market peer group of companies at the time the Committee shall establish your fiscal year total annual compensation package (the “ 75 th Percentile ”), which package will be determined by the Committee in consultation with the Company’s third-party compensation consultant, consistent with the Company’s valuation practices as in effect on the date of this letter. The equity-based portion of such total annual compensation package for fiscal year 2013 will be comprised solely of NQSO Grants (as defined below) valued on a Black-Scholes basis consistent with the Company’s practice as in effect on the date of this letter, to be granted in the month of June 2013. With respect to your total annual compensation package in respect of fiscal year 2014, the Company shall take into consideration your total annual compensation framework in respect of fiscal years 2012 and 2013 (including the fact that your total annual compensation package will have been targeted at the 75 th Percentile, the fact that your compensation included NQSO Grants and other relevant factors), with the actual total annual compensation package for such fiscal year to be determined by the Committee in good faith based on your and the Company’s performance. Any NQSO Grants that are a part of your total annual compensation package for fiscal year 2012, 2013 and any fiscal year thereafter will be granted pursuant to the Company’s Management Stock Incentive Plan, as the same may be amended from time to time (or any successor plan), with one half of such options to be subject to service vesting conditions and the remaining one half to be subject to both service vesting and performance vesting conditions.

(v)
You (and your dependants, as applicable) will be eligible to participate in such employee benefit plans, and receive such perquisites, as senior executives of the Company are eligible to participate in and receive, respectively, from time to time. The Company will also reimburse you for reasonable business expenses in accordance with the Company’s reimbursement policy.

(vi)
You will be entitled to all perquisites that are from time to time applicable to the Chairman and Chief Executive Officer and other senior executives of the Company under the Company’s policies in place from time to time.

(vii)
You will be entitled to (A) a one-time signing bonus of $500,000, which is intended to compensate you for expenses relating to commuting and relocating, and (B) other benefits under the Company’s relocation policy that is from time to time applicable to senior executives of the Company.

In addition to the foregoing, you will receive the following opportunities to acquire shares of common stock of our parent company, ARAMARK Holdings Corporation’s common stock (“ Common Stock ”):

(a)
Promptly after the Company receives its next valuation report of the Common Stock (anticipated to occur in the month of June 2012), you will make an initial investment of $3,750,000 in the Common Stock at a per share purchase price equal to the fair market value of one share of Common Stock on the date of such purchase. You will be asked to sign a subscription agreement relating to the investment which will provide, among other things, that you will become a party to the Stockholders Agreement and Registration Rights Agreement referred to below, you will be a “Senior Manager” and “Management Stockholder” under such Agreements and the shares purchased will be treated in the same manner as “Original Shares” under such Agreements.

(b)
You will be granted an installment stock purchase opportunity to purchase 500,000 shares of Common Stock, which option shall have a per share exercise price equal to the fair market value of one share of Common Stock on the date of grant of such option. We anticipate that the date of grant of this option will be in the month of June 2012 and will be pursuant to the form of Installment Stock Purchase Opportunity Agreement attached as Exhibit B to this letter agreement


(such option, an “ ISPO Grant ”). The first tranche of the ISPO Grant will cover 100,000 shares of Common Stock, and will be immediately exercisable upon grant in order for you to make an investment in our Common Stock, which you will exercise promptly following such date of grant.

(c)
With respect to fiscal year 2012, you will also be entitled to a grant of a non-qualified stock options to purchase shares of Common Stock, which option shall have a per share exercise price equal to the fair market value of one share of Common Stock on the date of grant of such option. We anticipate that the date of grant of this option will be in the month of June 2012 and will be pursuant to the form of Non Qualified Stock Option Agreement attached to this letter agreement as Exhibit C (any option granted pursuant to such form, a “ NQSO Grant ”). The NQSO Grant to be made to you in June 2012 will be comprised of a “time vesting” option on 725,000 shares of Common Stock, which option will vest subject to your continued service with the Company, and a “performance vesting” option on 725,000 shares of Common Stock, which option will vest subject both to your continued service with the Company and the requirement that the Company achieve certain performance conditions; provided , however , that the “performance vesting” portion of the NQSO Grant to be made in June 2012 that is scheduled to vest based on the Company’s achievement of the EBIT Target (as such term is defined in Exhibit C attached hereto) in respect of fiscal year 2012 shall become fully vested on the relevant Vesting Date (as defined in Exhibit C) so long as you remain employed with the Company through such vesting date, whether or not such EBIT Target is in fact achieved in fiscal year 2012. Except as provided in the proviso of the foregoing sentence, all of the ISPO Grants and NQSO Grants to be made to you will be subject to terms and conditions that are similar to those applied to the ISPO Grants and NQSO Grants held by other members of ARAMARK’s Management Committee (except as otherwise modified by the forms of the agreement attached to this letter agreement), and the forms of the agreements containing such terms and conditions which have been provided to you as attached to this letter agreement, as well as the Stockholders Agreement, as amended and the Registration Rights Agreement previously provided to you (all such agreements, the “ Equity Agreements ”). Note that, for the avoidance of doubt, none of your equity-based compensation referenced in this letter agreement or otherwise constitute “employee benefits” as such term is used in the definition of “Good Reason” contained in Schedule A of Exhibit A to this letter agreement.

Additionally, as CEO, you will be required to hold Common Stock having a fair market value equal to six times your Base Salary, all in accordance with ARAMARK’s stock ownership guidelines, as in effect from time to time.

You hereby represent to the Company that the execution and delivery of this letter agreement by you and the performance by you of your duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which you are a party or otherwise bound. You shall be entitled to serve on up to two (2) boards of directors or trustees of a business corporation or other for-profit business entity; provided that you agree that your appointment to and continued service on any such board of directors (other than the two boards of directors on which you serve as of the date hereof) shall be subject to the prior approval of the Board. You shall also be entitled to serve on such other not-for-profit boards of directors as you may elect; provided, however, that you agree that substantially all of your business time shall be spent in the furtherance of your duties under this letter agreement.

 



The offer of employment hereunder is subject to your satisfactory completion of the Company’s hiring procedures. If the foregoing terms and conditions (including the terms of the agreement set forth in Exhibit A attached to this letter agreement and the Equity Agreements) are acceptable and agreed to by you, please countersign on the line provided below to signify such acceptance and agreement and return the executed copy to the undersigned. This letter agreement will be subject to the laws of the State of Pennsylvania.

Sincerely,

/s/ ROBERT J. CALLANDER
Robert J. Callander
Chairman, Compensation and
Human Resources Committee
ARAMARK Holdings Corporation
                        
                

Accepted and agreed this 7 th day of May, 2012.    
            
/s/ ERIC FOSS
Eric Foss


Exhibit 10.5
ARAMARK CORPORATION
AGREEMENT RELATING TO EMPLOYMENT AND
POST-EMPLOYMENT COMPETITION
This Agreement is between the undersigned individual (“Employee”) and ARAMARK CORPORATION (“ARAMARK”).
RECITALS
WHEREAS, ARAMARK is a leading provider of managed services to business and industry, private and public institutions, and the general public, in the following business groups: food and support services and uniform and career apparel;
WHEREAS, ARAMARK has a proprietary interest in its business and financial plans and systems, methods of operation and other secret and confidential information, knowledge and data (“Proprietary Information”) which includes, but is not limited to, all confidential, proprietary or non-public information, ideas and concepts; annual and strategic business plans; financial plans, reports and systems including, profit and loss statements, sales, accounting forms and procedures and other information regarding costs, pricing and the financial condition of ARAMARK and its business segments and groups; management development reviews, including information regarding the capabilities and experience of ARAMARK employees; intellectual property, including patents, inventions, discoveries, research and development, compounds, recipes, formulae, reports, protocols, computer software and databases; information regarding ARAMARK’s relationships with its clients, customers, and suppliers and prospective clients, partners, customers and suppliers; policy and procedure manuals, information regarding materials and documents in any form or medium (including oral, written, tangible, intangible, or electronic) concerning any of the above, or any past, current or future business activities of ARAMARK that is not publicly available; compensation, recruiting and training, and human resource policies and procedures; and data compilations, research, reports, structures, compounds, techniques, methods, processes, know-how;
WHEREAS, all such Proprietary Information is developed at great expense to ARAMARK and is considered by ARAMARK to be confidential trade secrets;
WHEREAS, Employee, as a senior manager, will have access to ARAMARK’s Proprietary Information, directly in the course of Employee’s employment, and indirectly through interaction with and presentations by other ARAMARK senior managers at the Executive Leadership Institute, Executive Leadership Council meetings, Management Committee meetings, Executive Committee meetings, Presidents’ Council meetings and the like;
WHEREAS, ARAMARK will introduce Employee to ARAMARK clients, customers, suppliers and others, and will encourage, and provide resources for, Employee to develop personal relationships with ARAMARK’s clients, customers, suppliers and others;


WHEREAS, ARAMARK will provide specialized training and skills to Employee in connection with the performance of Employee’s duties at ARAMARK which training involves the disclosure by ARAMARK to Employee of Proprietary Information;
WHEREAS, ARAMARK will be vulnerable to unfair post-employment competition by Employee because Employee will have access to and knowledge of ARAMARK’s Proprietary Information, will have a personal relationship with ARAMARK’s clients, customers, suppliers and others, and will generate good will which Employee acknowledges belongs to ARAMARK;
NOW, THEREFORE, in consideration of Employee’s employment with ARAMARK, the opportunity to receive the grant of options to purchase common stock of ARAMARK Holdings Corporation (“Holdings”), severance and other post-employment benefits provided for herein (including pursuant to Exhibit A hereto to which Employee acknowledges he or she is not otherwise entitled), and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Employee agrees to enter into this Agreement with ARAMARK as a condition of employment pursuant to which ARAMARK will limit Employee’s right to compete against ARAMARK and right to solicit ARAMARK’s employees, customers, clients or suppliers during and following termination of employment on the terms set forth in this Agreement. Intending to be legally bound, the parties agree as follows:
ARTICLE 1. NON-DISCLOSURE AND NON-DISPARAGEMENT : Employee shall not, during or after termination of employment, directly or indirectly, in any manner utilize or disclose to any person, firm, corporation, association or other entity, except where required by law, any Proprietary Information which is not generally known to the public, or has not otherwise been disclosed or recognized as standard practice in the industries in which ARAMARK is engaged. Employee shall, during and after termination of employment, refrain from making any statements or comments of a defamatory or disparaging nature to any third party regarding ARAMARK, or any of ARAMARK’s officers, directors, personnel, other service providers, policies or products or services, other than to comply with law.
ARTICLE 2. NON-COMPETITION :
 
A.    Subject to Article 2. B. below, Employee, during Employee’s period of employment with ARAMARK, and for a period of two years following the voluntary or involuntary termination of employment, shall not, without ARAMARK’s written permission, which shall be granted or denied in ARAMARK’s sole discretion, directly or indirectly, associate with (including, but not limited to, association as a sole proprietor, owner, employer, partner, principal, investor, joint venturer, shareholder, associate, employee, member, consultant, contractor or otherwise), or acquire or maintain ownership interest in, any Business which is competitive with that conducted by or developed for later implementation by ARAMARK at any time during the term of Employee’s employment. For purposes of this Agreement, “Business” shall be defined as a person, corporation, firm, LLC, partnership, joint venture or other entity. Nothing in the foregoing shall prevent Employee from investing in a competitive Business that is or becomes publicly traded, if Employee’s ownership is as a passive investor of less than 1% of the outstanding publicly traded stock of the Business.


 
B.    The provision set forth in Article 2.A above, shall apply to the full extent permitted by law (i) in all fifty states, and (ii) each foreign country, possession or territory in which ARAMARK may be engaged in, or have plans to engage in, business (x) during Employee’s period of employment, or (y) in the case of a termination of employment, as of the effective date of such termination or at any time during the twenty-four month period prior thereto.

C.    Employee acknowledges that these restrictions are reasonable and necessary to protect the business interests of ARAMARK, and that enforcement of the provisions set forth in this Article 2 will not unnecessarily or unreasonably impair Employee’s ability to obtain other employment following the termination (voluntary or involuntary) of Employee’s employment with ARAMARK. Further, Employee acknowledges that the provisions set forth in this Article 2 shall apply if Employee’s employment is involuntarily terminated by ARAMARK for Cause; as a result of the elimination of employee’s position; for performance-related issues; or for any other reason or no reason at all.
 
ARTICLE 3. NON-SOLICITATION : During the period of Employee’s employment with ARAMARK and for a period of two years following the termination of Employee’s employment, regardless of the reason for termination, Employee shall not, directly or indirectly, except in the performance of his duties to ARAMARK: (i) induce or encourage any employee of ARAMARK to leave the employ of ARAMARK, (ii) hire any individual who was an employee of ARAMARK as of the date of Employee’s termination of employment or within a six month period prior to such date, or (iii) induce or encourage any customer, client, supplier or other business relation of ARAMARK to cease or reduce doing business with ARAMARK or in any way interfere with the relationship between any such customer, client, supplier or other business relation and ARAMARK.
ARTICLE 4. DISCOVERIES AND WORKS : Employee hereby irrevocably assigns, transfers, and conveys to ARAMARK to the maximum extent permitted by applicable law Employee’s right, title and interest now or hereinafter acquired, in and to all Discoveries and Works (as defined below) created, invented, designed, developed, improved or contributed to by Employee, either alone or jointly with others, while employed by ARAMARK and within the scope of Employee’s employment and/or with the use of ARAMARK’s resources. The terms “Discoveries and Works” include all works of authorship, inventions, intellectual property, materials, documents, or other work product (including, without limitation, Proprietary Information, patents and patent applications, patentable inventions, research, reports, software, code, databases, systems, applications, presentations, textual works, graphics and audiovisual materials). Employee shall have the burden of proving that any materials or works created, invented, designed, developed, contributed to or improved by Employee that are implicated by or relevant to employment by ARAMARK are not implicated by this provision. Employee agrees to (i) keep accurate records and promptly notify, make full disclosure to, and execute and deliver any documents and to take any further actions requested by ARAMARK to assist it in validating, effectuating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of its rights hereunder, and (ii) renounce any and all claims, including, without limitation, claims of ownership and royalty, with respect to all Discoveries and Works and all other property owned or licensed by ARAMARK. Any Discoveries and Works that, within six months after the


termination of Employee’s employment with ARAMARK, are made, disclosed, reduced to a tangible or written form or description, or are reduced to practice by Employee and which pertain to the business carried on or products or services being sold or developed by ARAMARK at the time of such termination shall, as between Employee and ARAMARK, be presumed to have been made during such employment with ARAMARK. Employee acknowledges that, to the fullest extent permitted by law, all Discoveries and Works shall be deemed “works made for hire” under the Copyright Act of 1976, as amended, 17 U.S.C. Section 101. Employee hereby grants ARAMARK a perpetual, nonexclusive, royalty-free, worldwide, assignable, sub licensable license under all rights and intellectual property rights (including patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) in any Works and Discoveries, for all purposes in connection with ARAMARK’s current and future business, that Employee has created, invented, designed, developed, improved or contributed to prior to Employee’s employment with ARAMARK that are relevant to or implicated by such employment (“Prior Works”). Any Prior Works are disclosed by Employee in Schedule 1.
ARTICLE 5. REMEDIES : Employee acknowledges that in the event of any violation by Employee of the provisions set forth in Articles 1, 2, 3 or 4 above, ARAMARK will sustain serious, irreparable and substantial harm to its business, the extent of which will be difficult to determine and impossible to fully remedy by an action at law for money damages. Accordingly, Employee agrees that, in the event of such violation or threatened violation by Employee, ARAMARK shall be entitled to an injunction before trial before any court of competent jurisdiction as a matter of course upon the posting of not more than a nominal bond, in addition to all such other legal and equitable remedies as may be available to ARAMARK. If ARAMARK is required to enforce the provisions set forth in Articles 2 and 3 above by seeking an injunction, Employee agrees that the relevant time periods set forth in Articles 2 and 3 shall commence with the entry of the injunction. Employee further agrees that, in the event any of the provisions of this Agreement are determined by a court of competent jurisdiction to be invalid, illegal, or for any reason unenforceable as written, such court shall substitute a valid provision which most closely approximates the intent and purpose of the invalid provision and which would be enforceable to the maximum extent permitted by law.
ARTICLE 6. POST-EMPLOYMENT BENEFITS :
 
A.
If Employee’s employment is terminated by (x) ARAMARK for any reason other than Cause or (y) Employee for Good Reason (as defined in the attached Schedule A ), then subject to Article 6.D below, Employee shall be entitled to the following post-employment payments and benefits:
 
     1.     Severance Pay
(a)
Employee shall receive severance payments equivalent to Employee’s monthly base salary, as of the effective date of termination (and without regard to any reduction in violation of this Agreement or which gives rise to Good Reason) for twenty-four (24) calendar months. Severance payments shall commence with the Employee’s effective date of termination and shall be made in accordance with ARAMARK’s normal payroll cycle. The period during which Employee receives


severance payments shall be referred to as the “Severance Pay Period.”
(b)
Employee shall receive an amount equal to two times Employee’s most recent actual annual Bonus, payable ratably in regular installments at the same time as payments are made to Employee under Section 1(a) above.

(c)
Employee shall receive a payment equal to the Bonus, if any, that Employee would have been entitled to receive for the year in which the termination occurs based on ARAMARK’s actual achievement of the performance targets applicable to such Bonus, pro-rated based on the percentage of the year that shall have elapsed through the Employee’s termination date, payable when such Bonus would have otherwise been payable to Employee had Employee’s employment not terminated.
(d)
For the avoidance of doubt, solely for purposes of subsections (b) and (c) above, Employee’s actual annual Bonus with respect to fiscal year 2012 shall be deemed to equal his full year Target Bonus (as set forth in the CEO Agreement).
      2.     Other Post-Employment Benefits

 (a)
Basic Group medical and life insurance coverages shall continue under then prevailing terms during the Severance Pay Period; provided, however, that if Employee becomes employed by a new employer during that period, continuing coverage from ARAMARK will become secondary to any coverage afforded by the new employer. Employee’s share of the premiums will be deducted from Employee’s severance payments. Basic Group medical coverage provided during such period shall be applied against ARAMARK’s obligation to continue group medical coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Upon termination of basic group medical and life coverages, Employee may convert such coverages to individual policies to the extent allowable under the terms of the plans providing such coverages.

(b)
If ARAMARK is providing Employee with a car allowance at the time of the Employee’s termination, such car allowance will continue to be paid through the Severance Pay Period. At the expiration of the Severance Pay Period, the Employee will cease being paid a car allowance.
(c)
Notwithstanding anything in any applicable agreement to the contrary, on the Employee’s termination date Employee shall become immediately vested in the next two tranches of any then unvested and outstanding Time Options that would, but for Employee’s termination of employment, have become vested within the twenty-four (24) months following the termination date. Such vested Time Options shall otherwise be subject to all other terms and conditions contained in their respective NQSO Grant agreement. For purposes of this Agreement, the term “NQSO Grant”


means any grant of options to purchase shares of common stock of Holdings, and the term “Time Option” means any NQSO Grant that by its terms becomes vested solely due to Employee’s continued employment with ARAMARK, in each case as granted under the Holdings 2007 Management Stock Incentive Plan, as amended from time to time (or any successor plan) and pursuant to a Non-Qualified Stock Option Agreement between Holdings and Employee (and which does not, for the avoidance of doubt, include any NQSO Grants that vest subject both to Employee’s continued employment with ARAMARK and the achievement by ARAMARK of any performance conditions nor any NQSO Grant that is under an Installment Stock Purchase Opportunity Agreement).
(d)
Employee’s eligibility to participate in all other benefit and compensation plans, including, but not limited to the Senior Executive Annual Performance Bonus, Long Term Disability, any nonqualified retirement plans, and any stock option or ownership plans, shall terminate as of the effective date of Employee’s termination unless provided otherwise under the terms of a particular plan, provided , however , that participation in plans and programs made available solely to Executive Leadership Council members, including, but not limited to the Executive Leadership Council Medical Plan, shall cease as of the effective date of termination or the date Employee’s Executive Leadership Council membership ceases, whichever occurs first. Employee, however, shall have certain rights to continue the Executive Leadership Council Medical Plan under COBRA.
(e)
Within thirty days after the effective date of Employee’s termination for any reason, ARAMARK shall pay Employee the portion of the Base Salary earned but unpaid through the termination date, any bonus earned but unpaid as of the termination date for any previously completed fiscal year of ARAMARK, to the extent not previously deferred under a particular deferred compensation plan, and reimbursement for any unreimbursed expenses properly incurred by Employee in accordance with Company policies prior to the termination date. Employee shall also receive such employee benefits, if any, to which Employee may be entitled from time to time under the employee benefit or fringe benefit plans, policies or programs of the Company, in accordance with their respective terms, other than any Company severance policy (payments and benefits in this subsection (e), the “Accrued Benefits”).
B.
Termination for “Cause” shall be defined as termination of employment due to: (i) conviction or plea of guilty or no contest to, a felony or a misdemeanor involving moral turpitude that has a substantial adverse effect on Employee’s qualifications or ability to perform his duties; (ii) willful and continued failure to substantially perform duties after written notice, (iii) willful and continuous failure to perform lawfully assigned duties that are consistent with the Employee’s position with ARAMARK, (iv) willful violation of ARAMARK’s Business Conduct Policy that causes material harm to ARAMARK or its reputation, or (v) intentionally working against the best interests of ARAMARK; in any case of conduct described in clause (ii)-(v), only if such conduct continues beyond fifteen business days after receipt by the Employee from ARAMARK of a written demand to cure such conduct. Termination of Employee’s employment with ARAMARK for “Cause” shall


require a vote of the majority of ARAMARK’s Board of Directors at a meeting after notice to Employee of such meeting at which Employee and counsel have a reasonable opportunity to be heard.

C.
If Employee is terminated by ARAMARK for reasons other than Cause or Employee resigns for Good Reason, Employee will receive the severance payments and other post-employment benefits during the Severance Pay Period even if Employee commences other employment during such period provided such employment does not violate the terms of Article 2, and subject to the provisions of Article 6.F.

D.
Notwithstanding anything else contained in this Article 6 to the contrary, ARAMARK may choose not to commence (or to discontinue) providing any payment or benefit unless and until Employee executes and delivers, without revocation, a release in a form reasonably acceptable to ARAMARK, as described in Article 6.F, within 60 days following Employee’s termination of employment; provided , however , that subject to receipt of such executed release, ARAMARK shall commence providing such payments and benefits within 75 days following the date of termination of Employee’s employment.

E.
In addition to the remedies set forth in Article 5, ARAMARK reserves the right to terminate all severance payments and other post-employment benefits if Employee violates the covenants set forth in Articles 1, 2, 3 or 4 above in any material respect.

F.
Employee’s receipt of severance and other post-employment benefits under this Agreement (including under Exhibit A attached hereto) is contingent on (i) Employee’s compliance with the provisions of Articles 1, 2, 3 and 4 and (ii) Employee’s execution of a release in a form reasonably acceptable to ARAMARK, except that such release shall not include any claims by Employee to enforce Employee’s rights under, or with respect to, (1) this Agreement (including the attached Exhibit A ), (2) the Certificate of Incorporation and By-laws of ARAMARK or any parent corporation thereof, (3) any indemnification agreement between the Employee and any of ARAMARK or any parent corporation thereof, (4)  the Stockholders Agreement dated on or about January 26, 2007 among ARAMARK Holdings Corporation and the holders party thereto (the “Stockholders Agreement”) and any other agreement referenced therein (including the Registration Rights and Coordination Committee Agreement entered into by ARAMARK Holdings Corporation and the holders party thereto), and the ARAMARK Holdings Corporation 2007 Management Stock Incentive Plan and any award agreements granted thereunder, or (5) any ARAMARK benefit plan pursuant to its terms, and (iii) the expiration of the applicable Age Discrimination in Employment Act revocation period without such release being revoked by Employee.
ARTICLE 7. TERM OF EMPLOYMENT : Employee acknowledges that ARAMARK has the right to terminate Employee’s employment at any time for any reason whatsoever, provided , however , that any termination by ARAMARK for reasons other than Cause or by Employee for Good Reason shall result in the severance and the post-employment benefits described in Article 6 above, to become due in accordance with the terms of this Agreement subject to the conditions set forth in this Agreement. Employee further acknowledges that the severance payments made and other benefits provided by ARAMARK are in full satisfaction of any obligations


ARAMARK may have resulting from ARAMARK’s exercise of its right to terminate Employee’s employment, except for those obligations which are intended to survive termination such as the payments to be made pursuant to retirement plans, deferred compensation plans, conversion of insurance, and the plans and other documents and agreements referred to in Article 6.F above.
ARTICLE 8. MISCELLANEOUS :
A.
As used throughout this Agreement, ARAMARK includes ARAMARK Corporation and its subsidiaries and affiliates or any corporation, joint venture, or other entity in which ARAMARK Corporation or its subsidiaries or affiliates has an equity interest in excess of ten percent (10%).

B.
In addition to Employee’s protections under the Indemnification Agreement entered into by the parties, a copy of which is attached as Exhibit B, Employee shall, after any termination of employment, retain all rights to indemnification under applicable law or any agreement (including, without limitation, the Stockholders Agreement), or under ARAMARK’s or any parent corporation’s Certificate of Incorporation or By-Laws at a level that is at least as favorable to the Employee as that currently provided. In addition, ARAMARK shall maintain Director’s and Officer’s liability insurance on behalf of Employee, at the level in effect immediately prior to such date of termination, for the three-year period following the date of termination, and throughout the period of any applicable statute of limitations.

C.
In the event that it is reasonably determined by ARAMARK that, as a result of the deferred compensation tax rules under Section 409A of the Internal Revenue Code of 1986, as amended (and any related regulations or other pronouncements thereunder) (“the Deferred Compensation Tax Rules”), any of the payments and benefits that Employee is entitled to under the terms of this Agreement (including under Exhibit A ) may not be made at the time contemplated by the terms hereof or thereof, as the case may be, without causing Employee to be subject to tax under the Deferred Compensation Tax Rules, ARAMARK shall, in lieu of providing such payment or benefit when otherwise due under this Agreement, instead provide such payment or benefit on the first day on which such provision would not result in Employee incurring any tax liability under the Deferred Compensation Tax Rules; which day, if Employee is a “specified employee” within the meaning of the Deferred Compensation Tax Rules, shall be the first day following the six-month period beginning on the date of Employee’s termination of employment; provided , further , that to the extent that the amount of payments due under Article 6.A are not subject to the Deferred Compensation Tax Rules by virtue of the application of Treas. Reg Sec. 1.409A-1(b)(9)(iii)(A), such payments may be made prior to the expiration of such six-month period. In addition, in the event that any payments or benefits that ARAMARK would otherwise be required to provide under this Agreement cannot be provided in the manner contemplated herein without subjecting Employee to tax under the Deferred Compensation Tax Rules, ARAMARK shall provide such intended payments or benefits to Employee in an alternative manner that conveys an equivalent economic benefit to Employee as soon as practicable as may otherwise be permitted under the Deferred Compensation Tax Rules. For purposes of the Deferred Compensation Tax Rules, each payment made under this Agreement


(including, without limitation, each installment payment due under Article 6.A) shall be designated as a “separate payment” within the meaning of the Deferred Compensation Tax Rules.

D.
Notwithstanding anything else set forth in this Agreement (including Exhibit A ) to the contrary, ARAMARK shall reimburse Employee for the legal fees and costs Employee has incurred in the negotiation of this Agreement and that certain employment letter agreement with ARAMARK dated concurrently herewith, in an amount not to exceed $50,000.

E.
In the event of a Change of Control as defined in the attached Exhibit A , the provisions of Exhibit A shall apply to Employee. Further, pursuant to the Deferred Compensation Tax Rules, ARAMARK, in its discretion, is permitted to accelerate the time and form of payments provided under the deferred compensation arrangement set forth in this Agreement (including Exhibit A ), where the right to the payment arises due to a termination of the arrangement within the 30 days preceding or the 12 months following a change in control event (as defined in the Deferred Compensation Tax Rules).

F.
If Employee’s employment with ARAMARK terminates solely by reason of a transfer of stock or assets of, or a merger or other disposition of, a subsidiary of ARAMARK (whether direct or indirect), such termination shall not be deemed a termination of employment by ARAMARK for purposes of this Agreement, provided that ARAMARK requires the subsequent employer, by agreement, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that ARAMARK would be required to perform it if no such transaction had taken place. In such case, ARAMARK acknowledges and agrees that ARAMARK may only assign this Agreement and ARAMARK’s rights hereunder, and particularly Articles 1, 2, 3 and 4, with the advance written approval by Employee. In such case, Employee agrees that ARAMARK may assign this Agreement and all references to “ARAMARK” contained in this Agreement shall thereafter be deemed to refer to the subsequent employer.

G.
Employee shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise. No amounts payable under this Agreement shall be subject to reduction or offset in respect of any claims which the Company (or any other person or entity) may have against Employee.

H.
Employee hereby represents to the Company that the execution and delivery of this Agreement by Employee and ARAMARK and the performance by Employee of Employee’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Employee is a party or otherwise bound.
 
I.
In the event any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

J .
The terms of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, without regard to conflicts of laws principles thereof. In the event of any


controversy among the parties hereto arising out of, or relating to, this Agreement which cannot be settled amicably by the parties, such controversy shall be finally, exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance with the American Arbitration Association rules by a single independent arbitrator. Such arbitration process shall take place in the Philadelphia, Pennsylvania metropolitan area. The decision of the arbitrator shall be final and binding upon all parties hereto and shall be rendered pursuant to a written decision, which contains a detailed recital of the arbitrator’s reasoning. Judgment upon the award rendered may be entered in any court having jurisdiction thereof. Notwithstanding the provisions of this Article 8.J, ARAMARK may, in its discretion, bring an action or special proceeding in any court of competent jurisdiction for the purpose of seeking temporary or preliminary relief pending resolution of a dispute. ARAMARK shall pay Employee’s legal expenses and costs should Employee prevail on any substantial portion of the claims in such proceeding.
K.
Employee expressly consents to the application of Article 8.J to any dispute or proceeding arising out of or relating to this Agreement. ARAMARK shall have the right to serve legal process upon Employee in any manner permitted by law.
    
L.
Employee hereby waives, to the fullest extent permitted by applicable law, any objection that Employee now or hereafter may have to personal jurisdiction or to the laying of venue of any action or proceeding brought in any court referenced in Article 8.J and hereby agrees not to plead or claim the same.

M.
Notwithstanding any other provision of this Agreement, ARAMARK may, to the extent required by law, withhold applicable federal, state and local income and other taxes from any payments due to Employee hereunder.

N.
This Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company and Employee, and their respective heirs, legal representatives, successors and assigns. If ARAMARK shall be merged into or consolidated with another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation.



IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have caused this Agreement to be signed.
 
 
 
 
 
 
Date: May 7, 2012
 
ARAMARK CORPORATION
 
 
 
 
 
By:
 
/s/ ROBERT J. CALLANDER
 
 
 
 
Robert J. Callander
Chairman, Compensation and Human Resources Committee
ARAMARK Holdings Corporation


EMPLOYEE


By:     /s/ ERIC FOSS


Schedule 1
Prior Works*


*    If no Prior Works are listed, Employee certifies that there are none.
 



EXHIBIT A
TERMINATION PROTECTION PROVISIONS
THIS is an Exhibit A to, and forms a part of, the ARAMARK Corporation Agreement Relating to Employment and Post-Employment Competition between Eric Foss (the “Executive”) and ARAMARK Corporation.
 
     1.     Defined Terms .
Unless otherwise indicated, capitalized terms used in this Exhibit which are defined in Schedule A shall have the meanings set forth in Schedule A.
 
     2.     Effective Date; Term .
This Exhibit shall be effective as of May 7, 2012 (the “Effective Date) and shall remain in effect until the later of three years following a Change of Control and the date that all of the Company’s obligations under this Exhibit have been satisfied in full.
      3.     Change of Control Benefits .
If Executive’s employment with the Company is terminated at any time within the three years following a Change of Control by the Company without Cause, or by Executive for Good Reason (the effective date of either such termination hereafter referred to as the “Termination Date”), Executive shall be entitled to the payments and benefits provided hereafter in this Section 3 and as set forth in this Exhibit. If Executive’s employment by the Company is terminated prior to a Change of Control by the Company (i) at the request of a party (other than the Company) involved in the Change of Control or (ii) otherwise in connection with or in anticipation of a Change of Control that subsequently occurs, Executive shall be entitled to the benefits provided hereafter in this Section 3 and as set forth in this Exhibit, and Executive’s Termination Date shall be deemed to have occurred immediately following the Change of Control. Payment of benefits under this Exhibit shall be in lieu of any benefits payable under Article 6.A of the CEO Agreement (as defined in Section 8 hereof) of which this Exhibit is a part. Notice of termination without Cause or for Good Reason shall be given in accordance with Section 13, and shall indicate the specific termination provision hereunder relied upon, the relevant facts and circumstances and the Termination Date.
 
     a.     Severance Payments . The Company shall pay Executive cash benefits equal to:

 
(1)    two times Executive’s Base Salary in effect on the date of the Change of Control or the Termination Date, whichever is higher; provided that if any reduction of the Base Salary has occurred, then the Base Salary on either date shall be as in effect immediately prior to such reduction, payable in regular installments at such times as would otherwise be the Company’s usual payroll practice over a period of two years; and



 
(2)    the higher of: (A) two times Executive’s Target Bonus in effect on the date of the Change of Control or the Termination Date, whichever is greater; or (B) two times Executive’s most recent actual annual Bonus, payable in either case ratably in regular installments at the same time as payments are made to Executive under Section 3(a)(1) above; provided that if any reduction of the Target Bonus has occurred, then the Target Bonus on either date shall be as in effect immediately prior to such reduction; and

 
(3)    Executive’s Target Bonus (as determined in (2), above) multiplied by a fraction, the numerator of which shall equal the number of days Executive was employed by the Company in the Company fiscal year in which the Termination Date occurs and the denominator of which shall equal 365, payable as a cash lump sum within sixty days after the Termination Date.

 
b.     Continuation of Benefits . Until the second anniversary of the Termination Date, the Company shall at its expense provide Executive and Executive’s spouse and dependents with medical, life insurance and disability coverages at the level provided to Executive immediately prior to the Change of Control; provided , however , that if Executive becomes employed by a new employer, continuing coverage from the Company will become secondary to any coverage afforded by the new employer. In addition, if ARAMARK is providing Executive with a car allowance at the time of the Executive’s termination, such car allowance will continue to be paid through the Severance Pay Period (as defined in the CEO Agreement). At the expiration of the Severance Pay Period, the Executive will cease being paid a car allowance.

 
c.     Payment of Earned But Unpaid Amounts . Within thirty days after the Termination Date, the Company shall pay Executive the Base Salary through the Termination Date, any Bonus earned but unpaid as of the Termination Date for any previously completed fiscal year of the Company, to the extent not previously deferred under a particular deferred compensation plan, and reimbursement for any unreimbursed expenses properly incurred by Executive in accordance with Company policies prior to the Termination Date. Executive shall also receive such employee benefits, if any, to which Executive may be entitled from time to time under the employee benefit or fringe benefit plans, policies or programs of the Company, other than any Company severance policy (payments and benefits in this subsection (c), the “Accrued Benefits”).

  
d.     Outplacement Counseling . For the two-year period following the Termination Date (or, if earlier, the date Executive first obtains full-time employment after the Termination Date), the Company shall reimburse all reasonable expenses incurred by Executive for professional outplacement services by qualified consultants selected by Executive, in an amount not to exceed 20% of the Executive’s Base Salary in effect on the date of the Change of Control or the Termination Date, whichever is higher. All such reimbursement payments shall be made prior to the


last day of the second calendar year following the calendar year in which the Termination Date occurs.

 
e.     Vesting of Other Benefits . Executive shall be entitled to such accelerated vesting of outstanding equity-based awards or retirement plan benefits as is specified under the terms of the applicable plans, agreements and arrangements.
        
     4.     Mitigation .
Executive shall not be required to mitigate damages or the amount of any payment provided for under this Exhibit by seeking other employment or otherwise, and, subject to Section 3(b), compensation earned from such employment or otherwise shall not reduce the amounts otherwise payable under this Exhibit. No amounts payable under this Exhibit shall be subject to reduction or offset in respect of any claims which the Company (or any other person or entity) may have against Executive.
 
     5.     Excise Tax Consequences .

     a.    In the event it shall be determined that any payment, benefit or distribution (or combination thereof) by the Company, any of its affiliates, or one or more trusts established by the Company for the benefit of its employees, to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Exhibit, or otherwise) (a “Payment”) is subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, hereinafter collectively referred to as the “Excise Tax”), if
the net after‑tax amount of the such Payments, after Executive has paid all taxes due thereon (including, without limitation, taxes due under Section 4999 of the Code) is less than the net after-tax amount of all such Payments and benefits otherwise due to Executive in the aggregate, if such aggregate Payments were reduced to an amount equal to 2.99 times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), then the aggregate amount of the payments and benefits shall be reduced to an amount that will equal 2.99 times the Executive’s base amount. To the extent such aggregate parachute payment amounts are required to be so reduced, the parachute payment amounts due to the Executive (but no non-parachute payment amounts) shall be reduced in the following order: (i) payments and benefits due under Section 3.a of this Exhibit shall be reduced (if necessary, to zero) with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity fully valued (without regard to any discounts for present value) for purposes of the calculation to be made under Section 280G of the Code for purposes of this Section 5 (the “280G Calculation”) in reverse order of when payable; and (iii) payments and benefits due in respect of any options or stock appreciation rights with regard to Holdings equity securities valued under the 280G Calculation based on time of vesting shall be reduced in an order that is most beneficial to the Executive.

      b.    All determinations required to be made under this Section 5, including whether and when a cutback is to be made, and the assumptions to be utilized in arriving at such determination, shall be made by such nationally recognized certified public accounting firm as


may be designated by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and Executive within ten business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company.

c.    Notwithstanding anything contained in this Agreement or any other
agreement between the Executive and the Company or any of its subsidiaries to the contrary, the Executive and the Company shall in good faith attempt to agree on steps to ensure that no payments to which the Executive would otherwise be entitled to receive pursuant to this Agreement or any such other agreement will be “parachute payments” (as defined in Section 280G(b)(2) of the Code).

6.     Termination for Cause .
Nothing in this Exhibit shall be construed to prevent the Company from terminating Executive’s employment for Cause. If Executive is terminated for Cause, the Company shall have no obligation to make any payments under this Exhibit, except for the Accrued Benefits.
 
     7.     Indemnification; Director’s and Officer’s Liability Insurance .

In addition to Executive’s protections under the Indemnification Agreement entered into by the parties, a copy of which is attached as Exhibit B to the CEO Agreement, Executive shall, after any termination of employment, retain all rights to indemnification under applicable law or any agreement (including, without limitation, the Stockholders Agreement), or under the Company’s or any parent corporation’s Certificate of Incorporation or By-Laws, as they may be amended or restated from time to time, at a level that is at least as favorable to Executive as that currently provided. In addition, the Company shall maintain Director’s and Officer’s liability insurance on behalf of Executive, at the level in effect immediately prior to such date of termination, for the three-year period following the date of termination, and throughout the period of any applicable statute of limitations.

     8.     Executive Covenants .
This is an Exhibit A to, and forms a part of, an agreement with the Company relating to employment and post-employment competition (the “CEO Agreement”). This Exhibit shall not diminish in any way Executive’s rights under the terms of such CEO Agreement, except that Executive’s receipt of benefits under this Exhibit is contingent upon Executive’s compliance in all material respects with all of the terms and conditions of the CEO Agreement.
 
     9.     Costs of Proceedings .
Each party shall pay its own costs and expenses in connection with any legal proceeding (including arbitration), relating to the interpretation or enforcement of any provision of this Exhibit, except that the Company shall pay such costs and expenses, including attorneys’


fees and disbursements, of Executive if Executive prevails on any substantial portion of the claims in such proceeding.
      10.     Assignment .
Except as otherwise provided herein, this Exhibit shall be binding upon, inure to the benefit of and be enforceable by the Company and Executive and their respective heirs, legal representatives, successors and assigns. If the Company shall be merged into or consolidated with another entity, the provisions of this Exhibit shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement, expressly to assume and agree to perform this Exhibit in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. The provisions of this Section 10 shall continue to apply to each subsequent employer of Executive hereunder in the event of any subsequent merger, consolidation or transfer of assets of such subsequent employer. 
     11.     Withholding .
Notwithstanding any other provision of this Exhibit, the Company may, to the extent required by law, withhold applicable federal, state and local income and other taxes from any payments due to Executive hereunder.
 
     12.     Applicable Law .
This Exhibit shall be governed by and construed in accordance with the laws of the State of Pennsylvania, without regard to conflicts of laws principles thereof.
 
     13.     Notice .
For the purpose of this Exhibit, any notice and all other communication provided for in this Exhibit shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
If to the Company:
ARAMARK Corporation
ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania 19107


Attention: General Counsel
If to Executive:
To the most recent address of Executive set forth in the personnel records of the Company.
 
     14.     Entire Agreement; Modification .
This Exhibit constitutes the entire agreement between the parties and, except as expressly provided herein or in Article 6.F of the CEO Agreement or in any benefit plan of the Company or of any of its affiliates, supersedes all other prior agreements expressly concerning the effect of a Change of Control occurring after the date of this Agreement with respect to the relationship between the Company and Executive. This Exhibit is not, and nothing herein shall be deemed to create, a contract of employment between the Company and Executive. This Exhibit may be changed only by a written agreement executed by the Company and Executive. 
     15.     Severability .
In the event any one or more of the provisions of this Exhibit shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected thereby.
 




Schedule A
CERTAIN DEFINITIONS
As used in this Exhibit, and unless the context requires a different meaning, the following terms, when capitalized, have the meaning indicated:
 
 
1
“ Act ” means the Securities Exchange Act of 1934, as amended.
 
 
2
“ Affiliate ” shall have the meaning set forth in the Stockholders Agreement.
 
 
3
“ Base Salary ” means Executive’s annual rate of base salary in effect on the date in question.
 
 
4
“ Bonus ” means the amount payable to Executive under the Company’s applicable annual bonus plan with respect to a fiscal year of the Company.
 
 
5
“ Cause ” means “cause” as defined in the CEO Agreement of which this Schedule A forms a part.
 
 
6
“ Change of Control ” means the first to occur of any of the following:
(i) The acquisition by any individual entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, other than the Investor Groups and their Affiliates (the “ Permitted Holders ”), directly or indirectly, of beneficial ownership of equity securities of the Company representing more than 50% of the voting power of the then-outstanding equity securities of the Company entitled to vote generally in the election of directors (the “ Company Voting Securities ”); provided , however , that for purposes of this subsection (i), the following shall not constitute a Change of Control: (A) any acquisition by the Company or any Sponsor Stockholder, (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or (C) any acquisition by any Person pursuant to a transaction which complies with clauses (A) and (B) of subsection (ii) below; or
(ii) The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the purchase of assets or stock of another entity (a “ Business Combination ”), in each case, unless immediately following such Business Combination, (A) all or substantially all of the beneficial owners of the Company Voting Securities immediately prior to such Business Combination beneficially own more than 50% of the then-outstanding combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the entity resulting from such


Business Combination in substantially the same proportion (relative to each other) as their ownership immediately prior to such Business Combination of the Company Voting Securities, and (B) no Person (excluding the Permitted Holders) beneficially owns, directly or indirectly, more than a majority of the combined voting power of the then-outstanding voting securities of such entity except to the extent that such ownership of the Company existed prior to the Business Combination; or
(iii) A majority of the members of the Company’s Board of Directors are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the current members of the Company’s Board of Directors before such replacement or is not contemplated by the Stockholders Agreement as in effect on the date hereof.
Notwithstanding paragraphs (i) through (iii) above, in no event will a Change of Control be deemed to occur if the Permitted Holders maintain a direct or indirect Controlling Interest in the Company. A “ Controlling Interest ” in an entity shall mean beneficial ownership of more than 50% of the voting power of the outstanding equity securities of the entity.
 
7
“ Code ” means the Internal Revenue Code of 1986, as amended.
 
 
8
“ Company ” means ARAMARK Corporation or any of its parents and any successor or successors thereto.
 
 
9
“ Good Reason ” means any of the following actions, without Executive’s express prior written approval, other than due to Executive’s Permanent Disability or death:
 
 
(a)
any reduction in Executive’s Base Salary or Target Bonus opportunity, other than, prior to a Change of Control, an across-the-board reduction applicable to all senior executives of ARAMARK;
 
 
(b)
a material decrease in Executive’s employee benefits, in the aggregate;
 
 
 
 
(c)
any diminution in Executive’s title or reporting relationship, or substantial diminution in duties or responsibilities (other than solely as a result of a Change of Control in which the Company immediately thereafter is no longer publicly held or independent)   including   the requirement that Executive report to any person or entity other than the Board of Directors of Holdings; provided , that no such diminution shall occur solely as a result of, on or after a Change of Control, the requirement that Executive report to a Board of Directors of any of ARAMARK Corporation, Holdings or any successor entity to either of the foregoing in such a Change of Control ; or
 


 




(d)

a relocation of Executive’s principal place of employment in the Philadelphia metropolitan area by more than 35 miles in a direction that is further away from Executive’s current residence as of the date of the CEO Agreement excluding, for the avoidance of doubt, any relocation from the Philadelphia metropolitan area in a direction that is closer to Executive’s current residence as of the date of the CEO Agreement; or
 
 
 
 
(e)
any failure by the Company or any parent corporation to timely pay or provide in any material respect to Executive the compensation and benefits and the opportunities to acquire common stock of ARAMARK Holdings Corporation as set forth in the CEO Agreement or any amounts or benefits under this Agreement.
Executive shall have 90 days from the time Executive first becomes aware of the existence of Good Reason to given notice to ARAMARK of the event giving rise to a claim of Good Reason and of his intent to resign for Good Reason; if ARAMARK does not cure the conduct giving rise to such claim within 30 days of receipt of such notice, Executive shall have 30 days thereafter during which he may resign for Good Reason, but if Executive does not resign within such 30-day period, Executive shall have waived his rights to resign for Good Reason as a result of such event despite the fact that such event may be ongoing. Further, if ARAMARK does remedy such conduct within the relevant 30-day period, ARAMARK shall not be required to pay or provide any of the payments and benefits otherwise provided in this Agreement (including under Exhibit A).
 
10
“ Permanent Disability ” means “permanent disability” as defined in the Company’s long-term disability plan as in effect from time to time, or if there shall be no plan, the inability of Executive to perform in all material respects Executive’s duties and responsibilities to the Company or any affiliate for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period by reason of a physical or mental incapacity.
 
 
11
“ Permitted Holder ” shall have the same meaning as set forth in the Stockholders Agreement.
 
 
12
“ Target Bonus ” means the target Bonus established for Executive in respect of any given year, whether expressed as a percentage of Base Salary or a dollar amount.



Exhibit 10.6
ARAMARK CORPORATION
Indemnification Agreement
THIS AGREEMENT is effective the 7th day of May, 2012, between ARAMARK Corporation , a Delaware corporation (the “Company”), and Eric Foss (“Indemnitee”), whose address is ________________________________.
RECITALS
WHEREAS, it is essential to the Company to retain and attract as directors, officers and other certain key employees the most capable persons available;
WHEREAS, Indemnitee is a member of the Board of Directors, a corporate officer of the Company (a “Designated Officer”) or an employee of the Company designated by the Board of Directors to have the benefit of this Agreement (a “Designated Employee”) and in such capacity is performing a valuable service for the Company;
WHEREAS, the By-laws of the Company provide for the indemnification of its directors and officers to the full extent authorized or permitted by the Delaware General Corporation Law (the “Corporate Statute”);
WHEREAS, the Corporate Statute specifically provides that it is not exclusive, and thereby contemplates that contracts may be entered into between the Company and the members of its Board of Directors, its officers or other employees which provide for broader indemnification of such directors, officers and other employees;
WHEREAS, developments with respect to the terms and availability of Directors and Officers Liability Insurance (“D&O Insurance”) and with respect to the application, amendment and enforcement of statutory, Certificate of Incorporation and By-law indemnification provisions generally, have raised questions concerning the availability of such insurance and if available, the adequacy and reliability of the protection afforded to directors, Designated Officers and Designated Employees thereby;
WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal liability in order to enhance Indemnitee’s service or continued service to the Company in an effective manner and in part to provide Indemnitee with specific contractual assurance that the indemnification protection provided by the Company’s By-laws will be available to Indemnitee (regardless of, among other things, any amendment to or revocation of such By-laws, change in the composition of the Company’s Board of Directors, or acquisition transaction relating to the Company), and in order to induce Indemnitee to provide or to continue to provide services to the Company as a director, Designated Officer or Designated Employee thereof, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses and other costs to Indemnitee to the full extent permitted by law and as set forth in this Agreement;


NOW, THEREFORE, in consideration of the premises and of Indemnitee commencing or continuing to serve the Company directly or, at its request, another enterprise or entity, including, without limitation, any benefit plan, and intending to be legally bound hereby, the parties hereby agree as follows:
AGREEMENT
1
Certain Definitions.  
(a) “Change of Control” shall mean (i) The acquisition by any individual entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, other than the Investor Groups and their Affiliates (the “Permitted Holders”), directly or indirectly, of beneficial ownership of equity securities of ARAMARK Holdings Corporation (“Holdings”) or the Company representing more than 50% of the voting power of the then-outstanding equity securities of Holdings or the Company entitled to vote generally in the election of directors (the “Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following shall not constitute a Change of Control: (A) any acquisition by the Company or by any Sponsor Stockholder, (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Holdings, the Company or any Subsidiary, or (C) any acquisition by any Person pursuant to a transaction which complies with clauses (A) and (B) of subsection (ii) below; or
(ii) The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of Holdings or the Company or the purchase of assets or stock of another entity (a “Business Combination”), in each case, unless immediately following such Business Combination, (A) all or substantially all of the beneficial owners of Holdings’ or the Company’s Voting Securities immediately prior to such Business Combination beneficially own more than 50% of the then-outstanding combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination in substantially the same proportion (relative to each other) as their ownership immediately prior to such Business Combination of the Company Voting Securities, and (B) no Person (excluding the Permitted Holders) beneficially owns, directly or indirectly, more than a majority of the combined voting power of the then-outstanding voting securities of such entity except to the extent that such ownership of Holdings or the Company existed prior to the Business Combination.
Notwithstanding paragraphs (i) and (ii) above, in no event will a Change of Control be deemed to occur if the Permitted Holders maintain a direct or indirect Controlling Interest in Holdings or the Company. A “Controlling Interest” in an entity shall mean beneficial ownership of more than 50% of the voting power of the outstanding equity securities of the entity.
Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Stockholders Agreement, dated January 26, 2007, as amended, by and among Holdings, ARAMARK Intermediate HoldCo Corporation, and the stockholders


named therein.
(b) “ Expenses ”: include attorneys’ fees and all other costs, travel expenses, fees of experts, transcripts costs, filing fees, witness fees, telephone charges, postage, delivery service fees, expenses and obligations of any nature whatsoever paid or incurred in connection with investigating, defending, prosecuting, being a witness in or participating in (including on appeal), or preparing to investigate, defend, prosecute, be a witness in or participate in any claim, action, suit or proceeding or inquiry or investigation, formal or informal, including, without limitations, any appeal for which a claim for indemnification may be made hereunder.
(c) “ Potential Change in Control ”: shall be deemed to have occurred if (i) Holdings or the Company enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; (ii) any person or entity (including Holdings or the Company) publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or (iii) the Board of Directors adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.
(d) “ Independent Counsel ”: an attorney or a law firm (either being referred to as a “person”) who is experienced in matters of corporate law and who shall not have otherwise performed material services for the Company or Indemnitee within the immediately preceding five years, other than services as Independent Counsel hereunder and who shall not have performed services for any other party to the proceeding giving rise to the claim for indemnification hereunder. Independent Counsel shall not be any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement, nor shall Independent Counsel be any person who has been sanctioned or censured for ethical violations of applicable standards of professional conduct in the last five years.
(e) “ Final Judgment ”: a final (not interlocutory) judgment or other adjudication of a court or arbitration or administrative body of competent jurisdiction as to which there is no further right or option of appeal or the time within which an appeal must be filed has expired without such filing.
Capitalized terms used herein and not otherwise defined herein shall have the meaning set forth in the Stockholders Agreement, dated January 26, 2007, as amended, by and among Holdings, ARAMARK Intermediate HoldCo Corporation, and the stockholders named therein.
2
Maintenance of Insurance; Limitations.  
(a) The Company currently has in force and effect several policies of D&O Insurance (collectively, the “Insurance Policy”). The Company agrees to furnish a copy of the Insurance Policy to Indemnitee upon request. The Company agrees that, so long as Indemnitee shall continue to serve as a director, or Designated Officer of the Company (or


shall at the request of the Company serve as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise) and thereafter so long as Indemnitee shall be subject to any possible claim, or threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative, formal or informal, by reason of the fact that Indemnitee was a director or Designated Officer of the Company (or served in any of said other capacities), the Company will, subject to the limitations set forth in Section 2(b) hereof, endeavor to purchase and maintain in effect for the benefit of Indemnitee one or more valid, binding and enforceable policy or policies of D&O Insurance providing, in all respects, coverage at least comparable to that provided pursuant to the Insurance Policy.
(b) The Company shall not be required to maintain the Insurance Policy or such other policy or policies of D&O Insurance in effect if, in the sole business judgment of the then Board of Directors of the Company, (i) such insurance is not reasonably available, (ii) the premium cost for such insurance is substantially disproportionate to the amount of coverage, or (iii) the coverage provided by such insurance is so limited by exclusions that there is a disproportionately insufficient benefit from such insurance.
3
Indemnification of Indemnitee.  
The Company agrees to hold harmless, indemnify and defend Indemnitee to the fullest extent authorized or permitted by the provisions of the Corporate Statute and to such greater extent as the Corporate Statute or other applicable law may thereafter from time to time permit.
4
Additional Indemnity.  
(a) Subject to the exclusions set forth in Section 5 hereof, the Company further agrees to hold harmless, indemnify and defend Indemnitee against any and all reasonable Expenses, and all liability and loss including, without limitation, judgments, excise taxes, penalties, fines and amounts paid or to be paid in settlement, actually incurred by Indemnitee in connection with any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative, investigative, formal or informal (including an action by or in the right of the Company) to which Indemnitee is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Indemnitee is, was or at any time becomes a director, Designated Officer, Designated Employee or agent of the Company, or is or was serving or at any time serves at the request of the Company as a director, officer, trustee, employee, agent, fiduciary or “party in interest” (as defined in ERISA) of, or with respect to, or the Company’s representative in, another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise.
(b) Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of having served as a director, Designated Officer, Designated Employee or agent of the Company or at the request of the Company as a director, officer, trustee, employee, agent, fiduciary or “party in interest” (as defined in ERISA) of, or with


respect to, or the Company’s representative in, another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, a witness in any proceeding to which he is not a party, he shall be indemnified against all Expenses actual and reasonably incurred by Indemnitee or on his behalf in connection therewith.
5
Limitations on Indemnity.  
(a) No indemnification pursuant to Section 3 or Section 4 hereof shall be paid by the Company:
(i) on account of remuneration paid to Indemnitee if it shall be determined by a Final Judgment that such remuneration was in violation of law;
(ii) on account of any suit in which a Final Judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; or
(iii) if a Final Judgment establishes that such indemnification is not lawful.
(b) The Company’s indemnification obligations under this Agreement shall be reduced to the extent payment is made to or for the benefit of Indemnitee pursuant to any D&O Insurance purchased and maintained by the Company.
(c) To the extent Indemnitee’s claim for indemnification under this Agreement arises out of Indemnitee’s service at the request of the Company as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, the Company’s indemnification obligation hereunder shall be limited to that amount required in excess of any indemnification and/or insurance provided to Indemnitee by such other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise. Indemnitee hereby also agrees that any indemnification obligation of the Company under the Company’s certificate of incorporation or bylaws with respect to such a claim shall also be subject to this limitation.
6
Continuation of Indemnity.  
All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director, Designated Officer and/or Designated Employee of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible claim, or threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative, formal or informal, by reason of the fact that Indemnitee was a director, Designated Officer, Designated Employee or agent of the Company or was serving in any other capacity described in this Section 6.


7
Notification and Defense of Claim.  
Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company shall not relieve it from any liability which it may have to Indemnitee. With respect to any such action, suit or proceeding as to which Indemnitee notifies the Company of the commencement thereof:
(a) the Company shall be entitled to participate therein at its own expense;
(b) except as otherwise provided below, to the extent that it may wish, the Company jointly with any other indemnifying party similarly notified shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election so to assume the defense thereof, the Company shall not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ his own chosen counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Indemnitee, unless (i) the employment of such counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of such action, suit or proceeding or (iii) the Company shall not in fact have employed its counsel to assume the defense of such action, in each of which cases the fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the conclusion described in (ii) of this Section 7(b); and
(c) the Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Company’s written consent. The Company shall not settle any action or claim in any manner which would impose any penalty, equitable remedy or injunctive or other relief or limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold their consent to any proposed settlement.
8
Procedures for Determination of Entitlement to Indemnification.  
(a) Initial Request . To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall promptly advise the Board of Directors in writing that Indemnitee has requested indemnification.
(b) Method of Determination . If such a determination is required as a matter of law as


a condition to indemnification, a determination with respect to Indemnitee’s entitlement to indemnification shall be made as follows:
(i) if a Change in Control has occurred, unless Indemnitee shall request in writing that such determination be made in accordance with clause (ii) of this Section 8(b), the determination shall be made by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee;
(ii) if a Change of Control has not occurred, the determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who are not and were not a party to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee (“Disinterested Directors”). In the event that a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, the determination shall be made by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee.
(c) Selection, Payment, Discharge of Independent Counsel . In the event the determination of entitlement of indemnification is to be made by Independent Counsel pursuant to Section 8(b) hereof, the Independent Counsel shall be selected, paid, and discharged in the following manner:
(i) If a Change of Control has not occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected.
(ii) If a Change of Control has occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event clause (i) of this Section 8(c) shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected.
(iii) Following the initial selection described in clauses (i) and (ii) of this Section 8(c), Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection has been received, deliver to the other party a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1(d) hereof, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit.
(iv) Either the Company or Indemnitee may petition a court of competent jurisdiction if the parties have been unable to agree on the selection of Independent Counsel within 20 days after receipt by the Company of a written request for indemnification pursuant to Section 8(a) hereof. Such petition may request a determination whether an objection to the party’s selection is without merit and/or seek the appointment as Independent Counsel of a person selected by the court or by such


other person as the court shall designate. A person so appointed shall act as Independent Counsel under Section 8(b) hereof.
(v) The Company shall pay any and all reasonable fees of Independent Counsel, and the reasonable expenses incurred by such Independent Counsel, in connection with acting pursuant to this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 8(c), regardless of the manner in which such Independent Counsel was selected or appointed.
(vi) Upon due commencement of any judicial proceeding pursuant to Section 11(b) hereof, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
(d) Cooperation . Indemnitee shall cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification under this Agreement, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. If a determination is made that Indemnitee is entitled to indemnification under this Agreement (including if such indemnification is subject to Section 5(c)), Indemnitee shall continue to provide the Company with such documentation and information and to provide such other cooperation as the Company may reasonably request. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the Company shall be borne by the Company and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
9
Presumptions and Effect of Certain Proceedings.  
(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.
(b) The termination of any action, suit or proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in accordance with any standard of conduct that may be a condition to indemnification.
(c) For purposes of any determination of good faith, Indemnitee shall be deemed to


have acted in good faith if Indemnitee’s action is based on the records or books of account of the Company, including financial statements, or on information supplied to Indemnitee by the officers of the Company in the course of their duties, or on the advice of legal counsel for the Company or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company. The provisions of this Section 9(c) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standards for indemnification set forth in this Agreement.
(d) The knowledge and/or actions or failure to act of any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
10
Advance of Expenses, Judgments, Etc.  
(a) The Expenses incurred by Indemnitee in defending any claim, action, investigation, formal or informal, request for documents or information, responding to any subpoena or other legal process, suit or proceeding pursuant to which a claim for Indemnification may be applied for by Indemnitee pursuant to this Agreement, shall be advanced by the Company at the request of Indemnitee. Any judgments, fines or amounts to be paid in settlement shall also be advanced by the Company to Indemnitee upon request.
(b) Prior to the advancement of Expenses by the Company pursuant to this Section 10, Indemnitee must, if required by law, provide an undertaking that if it shall ultimately be determined in a Final Judgment that Indemnitee was not entitled to be indemnified, or was not entitled to be fully indemnified, Indemnitee shall promptly repay to the Company all amounts advanced or the appropriate portion thereof so advanced.
11
Enforcement.  
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Company hereby in order to induce Indemnitee to commence or continue serving as a director, Designated Officer and/or Designated Employee of the Company, and/or at the request of the Company as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise, and acknowledges that Indemnitee is relying upon this Agreement in commencing or continuing in such capacity.
(b) If (i) a determination is made that Indemnitee is not entitled to indemnification under this Agreement, (ii) an advancement of Expenses, judgments, fines or amounts to be paid in settlement or other amounts pursuant to Section 11 hereof is not made within 15 days after receipt by the Company of a request therefor, (iii) a determination of entitlement to indemnification pursuant to Section 8 hereof has not been made within 90 days after


receipt by the Company of the request therefor, or (iv) payment of indemnification is not made within 10 days after a determination has been made that Indemnitee is entitled to indemnification, then Indemnitee may bring an action against the Company to recover the unpaid amount of the claim. In the event Indemnitee is required to bring any action to enforce rights or to collect moneys due under this Agreement, the Company shall reimburse Indemnitee for all of the Indemnitee’s Expenses in bringing and pursuing such action, whether or not Indemnitee is successful in such action, unless the court or other adjudicative body determines that such action for enforcement brought by Indemnitee was frivolous.
(c) In the event that a determination shall have been made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 11 shall be conducted in all respects as a de novo trial on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If a Change of Control shall have occurred, in any judicial proceeding commenced pursuant to this Section 11 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(d) If a determination shall have been made or deemed to have been made pursuant to Section 8 or 9 of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 11, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(e) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced to enforce this Agreement, including a judicial proceeding commenced pursuant to this Section 11, that the procedures and presumptions of this Agreement are not valid, binding and enforceable or that there is not sufficient consideration for this Agreement and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.
12
Establishment of Trust.  
In the event of a Potential Change in Control other than a Potential Change in Control approved by the Board of Directors of the Company prior to the Change in Control or in the event of such a Change in Control that has been so approved, if the Board determines in its discretion that this Section 12 should still apply, the Company shall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee; and from time to time upon written request of Indemnitee the Company shall fund such trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred, and any and all judgments, fines, penalties and settlement amount actually paid or claimed, reasonably anticipated or proposed to be paid, in connection with any pending or competed action, suit or proceeding pursuant to which a claim for indemnification or advancement may be applied for by


Indemnitee pursuant to this Agreement. The amount or amounts to be deposited in the trust pursuant to the foregoing funding obligation shall be determined by Independent Counsel. The terms of the trust shall provide that upon a Change in Control (i) the trust shall not be revoked or the principal thereof invaded, without the written consent of Indemnitee, (ii) the trustee shall advance, within 15 days after receipt of a request by Indemnitee, any and all Expenses, judgments, fines or settlement amounts to Indemnitee for which funding has been provided (and Indemnitee hereby agrees to reimburse the trust under the circumstances under which Indemnitee would be required to reimburse the Company under Section 10 hereof), (iii) the trust shall continue to be funded by the Company in accordance with the funding obligations set forth above, (iv) the trustee shall promptly pay to Indemnitee, from and to the extent such trust has been funded, all amounts for which Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in such trust shall revert to the Company upon a final determination by Independent Counsel or a Final Judgment, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The trustee shall be an Independent Counsel or another independent person agreed upon by the Company and the Indemnitee. Nothing in this Section 12 shall relieve the Company of any of its obligations under this Agreement or under applicable law, the Company’s Certificate of Incorporation or By-Laws. All income earned on the assets held in the trust shall be reported as income by the Company for federal, state, local and foreign tax purposes. Notwithstanding the foregoing, the Company shall have the right, in its sole discretion, in lieu of creating and funding such trust, to purchase and maintain one or more bonds or other forms of adequate security from an insurance company, surety company or similar source reasonably acceptable to Indemnitee, for the amounts which it would otherwise be required to place in trust pursuant to this Section 12.
13
Other Rights and Remedies.  
The indemnification and other rights provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled or hereafter acquire under any provision of law, the Company’s Certificate of Incorporation or By-laws, other agreement, vote of shareholders or directors or otherwise, as to action in Indemnitee’s official capacity while occupying any of the positions or having any of the relationships referred to in this Agreement, and shall continue after Indemnitee has ceased to occupy such position or have such relationship, respecting acts or omissions of Indemnitee while Indemnitee occupied such position or had such relationship. No amendment, alteration or repeal of this Agreement or any provision hereof shall be effective as to Indemnitee with respect to any action taken or omitted by Indemnitee while occupying any of the positions or having any of the relationships referred to in this Agreement prior to such amendment, alteration or repeal.
14
Notices.  
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to


whom said notice or other communications shall have been directed, (ii) mailed by certified or registered mail with postage prepaid, or by Federal Express or similar service providing receipt against delivery, and (iii) telefaxed and received with a confirming copy received by the method described in (ii) above and shall be deemed received on the earlier of actual receipt or the third business day after the date on which it is so mailed:
(a) if to Indemnitee, to the address set forth above or to such other address as may be furnished to the Company by Indemnitee by notice similarly given; or
(b) if to the Company, to:
ARAMARK Corporation
1101 Market Street
Philadelphia, PA 19107-2988
Attn: Corporate Secretary
215-413-8808 (facsimile)
or to such other address as may be furnished to Indemnitee by the Company by notice similarly given.
15
Subrogation.  
In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee in respect of such payment against one or more third parties (including without limitation D&O Insurance, if applicable). Indemnitee shall execute all documents and instruments necessary or desirable for such purpose, and shall do everything that may be reasonably necessary to secure such rights at the Expense of the Company, including the execution of such documents and instruments reasonably necessary or desirable to enable the Company effectively to bring suit to enforce such rights.
16
No Construction as Employment Agreement.  
Nothing contained herein shall be construed as giving Indemnitee any right to be retained as a director, officer or employee of the Company or in any capacity with any other entity referred to in Section 6 hereof, or in the employ of the Company or of any such other entity.
17
Severability.  
The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including without limitation each portion of this Agreement containing any provision held to be invalid, void or otherwise


unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
18
No Third Party Beneficiaries.  
Nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement other than any estate, heir, executor or administrator of or other successor to Indemnitee.
19
Governing Law; Binding Effect; Amendment, Termination, Assignment and Waiver.  
(a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.
(b) This Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and their respective successors and assigns (including without limitation any direct or indirect successor by purchase, merger, consolidation or otherwise to all, substantially all, or a substantial part, of the business and/or assets of the Company), and spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(c) No amendment, modification, termination, cancellation or assignment of this Agreement shall be effective unless in writing signed by both parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless executed in writing by the party making the waiver nor shall any such waiver constitute a continuing waiver.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of the day and year first above written.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARAMARK Corporation
/s/ ERIC FOSS
 
By:

 /s/ ROBERT J. CALLANDER
ERIC FOSS
 
 
 
Robert J. Callander
Chairman, Compensation and
Human Resources Committee
ARAMARK Holdings Corporation



E xhibit 10.7
May 7, 2012

Mr. Joseph Neubauer
_________________
_________________
_________________

Dear Joe:

We would like to memorialize certain changes to your Employment Agreement with ARAMARK Corporation dated as of November 2, 2004, as previously amended (your “Employment Agreement”). As we have previously discussed, your Employment Agreement is amended by this letter agreement as follows:

•
Effective May 7, 2012, you will cease to be the Chief Executive Officer of ARAMARK Corporation, but you will remain as the Chairman of the Board and your duties will be consistent with that of a Chairman. Your ceasing to be the Chief Executive Officer will not be treated as a “Good Reason” event or otherwise constitute a termination of your employment for purposes of your Employment Agreement or otherwise.

For ease of reference, all capitalized terms used in this letter are as defined in the Employment Agreement.

Please sign where indicated below to acknowledge that your Employment Agreement will be revised as set forth above, effective upon your signature, and return such signed copy to my attention at your earliest convenience.

                
ARAMARK CORPORATION


/s/ ROBERT J. CALLANDER
Robert J. Callander
Chairman, Compensation and
Human Resources Committee
ARAMARK Holdings Corporation



/s/ JOSEPH NEUBAUER
Joseph Neubauer




  EXHIBIT 31.1
CERTIFICATIONS
I, Joseph Neubauer, Chairman, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of ARAMARK Corporation for the quarter ended March 30, 2012.
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 9, 2012
 
 
/s/ JOSEPH NEUBAUER
Joseph Neubauer
Chairman
(principal executive officer)






EXHIBIT 31.2
CERTIFICATIONS
I, L. Frederick Sutherland, Executive Vice President and Chief Financial Officer, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of ARAMARK Corporation for the quarter ended March 30, 2012.
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 9, 2012
 
 
/s/ L. FREDERICK SUTHERLAND
L. Frederick Sutherland
Executive Vice President and
Chief Financial Officer







EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ARAMARK Corporation (the “Company”) on Form 10-Q for the fiscal quarter ended March 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Joseph Neubauer, Chairman of the Company, and L. Frederick Sutherland, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on each of our knowledge:
(1)
The Report fully complies with the requirements of section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 9, 2012
 
                                
 
/s/ JOSEPH NEUBAUER
Joseph Neubauer
Chairman
(principal executive officer)
 
                                
 
/s/ L. FREDERICK SUTHERLAND
L. Frederick Sutherland
Executive Vice President and Chief Financial Officer



A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.