10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 27, 2003

Commission file number 001-16807

ARAMARK CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
23-3086414
(I.R.S. Employer
Identification Number)

ARAMARK Tower
1101 Market Street
Philadelphia, Pennsylvania
(Address of principal executive offices)


19107
(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 o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x     No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Class A common stock outstanding at July 25, 2003: 91,910,303

Class B common stock outstanding at July 25, 2003: 93,831,962

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In Thousands)

ASSETS

	June 27, 2003		September27, 2002
Current Assets:
Cash and cash equivalents	$	39,774	$	31,572
Receivables		617,178		536,113
Inventories, at lower of cost or market		428,570		425,182
Prepayments and other current assets		114,828		88,218
Current assets of discontinued operations		—		17,307
Total current assets		1,200,350		1,098,392
Property and Equipment, net		1,149,086		1,069,868
Goodwill		1,355,606		1,298,808
Other Intangible Assets		322,086		240,777
Other Assets		359,775		296,203
Noncurrent Assets of Discontinued Operations		—		255,254
	$	4,386,903	$	4,259,302

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:
Current maturities of long-term borrowings	$	11,764		$	39,548
Accounts payable		415,401			486,112
Accrued expenses and other liabilities		770,046			723,806
Current liabilities of discontinued operations		—			54,096
Total current liabilities		1,197,211			1,303,562
Long-Term Borrowings		1,932,877			1,835,632
Deferred Income Taxes and Other Noncurrent Liabilities		284,204			254,198
Noncurrent Liabilities of Discontinued Operations		—			7,725
Shareholders’ Equity:
Class A common stock, par value $.01		1,116			1,387
Class B common stock, par value $.01		1,041			700
Capital surplus		905,295			821,242
Earnings retained for use in the business		748,838			553,037
Accumulated other comprehensive income (loss)		2,378			(18,671	)
Treasury stock		(686,057	)		(499,510	)
Total shareholders' equity		972,611			858,185
	$	4,386,903		$	4,259,302

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

1

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

(In Thousands, Except Per Share Amounts)

	FortheThreeMonthsEnded					FortheNineMonthsEnded
	June 27, 2003		June 28, 2002			June 27, 2003		June 28, 2002
Sales	$	2,340,554	$	2,136,498		$	6,859,800	$	6,175,082
Costs and Expenses:
Cost of services provided		2,118,788		1,923,856			6,228,382		5,594,115
Depreciation and amortization		66,163		56,686			192,599		170,484
Selling and general corporate expenses		27,150		29,973			86,519		86,294
Other income, net (Note 13)		—		(5,806	)		—		(43,695	)
		2,212,101		2,004,709			6,507,500		5,807,198
Operating income		128,453		131,789			352,300		367,884
Interest and Other Financing Costs, net		40,776		32,986			110,996		103,576
Income from continuing operations before income taxes		87,677		98,803			241,304		264,308
Provision for Income Taxes		23,826		33,530			81,227		94,028
Income from continuing operations		63,851		65,273			160,077		170,280
Income from discontinued operations, net		25,453		7,299			35,724		18,106
Net income	$	89,304	$	72,572		$	195,801	$	188,386
Earnings Per Share - Basic:
Income from continuing operations	$	.33	$	.34		$	.84	$	.90
Net income	$	.47	$	.37		$	1.02	$	.99
Earnings Per Share - Diluted:
Income from continuing operations	$	.33	$	.32		$	.81	$	.85
Net income	$	.45	$	.35		$	.99	$	.94

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

2

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(In Thousands)

	FortheNineMonthsEnded
	June 27, 2003			June 28, 2002
Cash flows from operating activities from continuing operations:
Income from continuing operations	$	160,077		$	170,280
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		192,599			170,484
Income taxes deferred		19,082			17,092
Gain on sale of investments		—			(45,320	)
Changes in noncash working capital		(131,084	)		(10,425	)
Net proceeds from sale of receivables		—			46,605
Other operating activities		(16,590	)		(13,667	)
Net cash provided by operating activities from continuing operations		224,084			335,049
Cash flows from investing activities from continuing operations:
Purchases of property and equipment		(180,678	)		(142,354	)
Disposals of property and equipment		17,938			8,079
Proceeds from sale of investments		—			76,964
Acquisition of certain businesses, net of cash acquired		(202,254	)		(865,491	)
Divestiture of certain businesses		248,077			4,235
Other investing activities		(10,584	)		15,614
Net cash used in investing activities from continuing operations		(127,501	)		(902,953	)
Cash flows from financing activities from continuing operations:
Proceeds from additional long-term borrowings		260,174			921,187
Payment of long-term borrowings		(217,637	)		(687,441	)
Proceeds from issuance of common stock		20,601			764,583
Repurchase of stock		(168,574	)		(441,653	)
Other financing activities		2,333			(6,604	)
Net cash provided by (used in) financing activities from continuing operations		(103,103	)		550,072
Net cash provided by discontinued operations		14,722			29,405
Increase in cash and cash equivalents		8,202			11,573
Cash and cash equivalents, beginning of period		31,572			24,799
Cash and cash equivalents, end of period	$	39,774		$	36,372

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

3

ARAMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1)CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

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. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company, the statements include all adjustments (which include only normal recurring adjustments) required for a fair statement of financial position, results of operations and cash flows for such periods. Prior period “Sales” and “Cost of services provided” have been reclassified to conform to the current period classification. The effect was not material. 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 our business activities and the possibility of changes in general economic conditions.

(2)DISCONTINUED OPERATIONS:

During the second quarter of fiscal 2003, the Company executed a definitive agreement for the sale of ARAMARK Educational Resources (AER) to Knowledge Learning Corporation, Inc. for approximately $250 million in cash. The sale closed on May 9, 2003, and resulted in an after-tax gain of $23.6 million.

AER is accounted for as a discontinued operation in the accompanying financial statements in accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” AER’s results of operations and cash flows have been removed from the Company’s results of continuing operations for all periods presented. All related disclosures have also been adjusted to reflect the discontinued operation. Summarized selected financial information from discontinued operations for fiscal 2003 (excluding the net gain) through the transaction closing date and for fiscal 2002 is as follows:

	ThreeMonthsEnded						Nine Months Ended
	June 27, 2003			June 28, 2002			June 27, 2003			June 28, 2002
	(in thousands)
Sales	$	37,060		$	119,350		$	264,277		$	348,715
Income before income taxes	$	3,129		$	12,018		$	20,174		$	29,811
Income tax provision		(1,228	)		(4,719	)		(8,002	)		(11,705	)
Net income	$	1,901		$	7,299		$	12,172		$	18,106

The assets and liabilities of the discontinued operation are stated separately in the condensed consolidated balance sheet. The primary asset and liability categories follow:

	September27, 2002
	(in thousands)
Receivables	$	12,184
Prepayments and other current assets		5,123
	$	17,307
Property and equipment, net	$	179,402
Goodwill		70,732
Other intangible assets		1,564
Other assets		3,556
	$	255,254
Accounts payable	$	15,081
Accrued expenses and other current liabilities		39,015
	$	54,096
Noncurrent liabilities	$	7,725

4

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(3)CAPITAL STOCK:

On December 14, 2001, the Company completed an initial public offering of 34.5 million shares of its Class B common stock at a price of $23.00 per share, raising approximately $742.9 million, net of issuance costs. Just prior to the completion of the initial public offering, old ARAMARK Corporation merged with its wholly owned subsidiary, ARAMARK Worldwide Corporation. Each outstanding ARAMARK old Class B and old Class A common share was exchanged for two shares and twenty shares, respectively, of the surviving corporation’s Class A common stock which had the effect of a two-for-one stock split. ARAMARK Worldwide’s name was changed to ARAMARK Corporation, and it succeeded to all the assets, liabilities, rights and obligations of old ARAMARK. Upon completion of the merger, the Amended and Restated Stockholders’ Agreement was terminated and the Company’s limited obligation to repurchase shares was eliminated.

Although the Class B shares contain the same economic interests in the Company as the Class A shares, the Class A shares entitle holders to ten votes per share, while the Class B stockholders are entitled to one vote per share. After the completion of the initial public offering, but prior to the stock buybacks discussed below, Class A shares constituted about 83% of the total outstanding stock and about 98% of the total voting power, while the Class B shares constituted about 17% of the total outstanding shares and about 2% of the total voting power.

On December 14, 2001, the Company purchased 3,276,700 Class A shares owned by employee benefit plans for $23.00 per share, resulting in a cash expenditure of $75.4 million. These shares, which are reflected as treasury shares, represented 10% of all Class A shares owned by these benefit plans at that time.

On December 17, 2001, the Company announced an offer to purchase up to 10% of its Class A common stock, excluding shares owned by benefit plans, for $23.00 per share. On January 25, 2002, the Company completed the tender offer for its Class A common stock and purchased 13.7 million shares for approximately $314 million.

During the first nine months of fiscal 2003, 4.3 million options were granted, to purchase common stock under the 2001 Equity Incentive Plan (2001 EIP). The options vest ratably over four years, with an exercise price equal to the fair market value at the date of grant. During the first nine months of fiscal 2003, employees purchased approximately 6.5 million shares or $29.6 million of common stock. Also, during the first nine months of fiscal 2003, approximately 32.6 million Class A shares were converted to Class B shares.

In May 2002, the Company announced the establishment of a Stock Repurchase Program. Under the Stock Repurchase Program, as amended, the Board of Directors approved the use of up to $350 million to repurchase shares of the Company’s Class A or Class B common stock. Repurchases are made in accordance with applicable securities laws in open market or privately negotiated transactions or otherwise, from time to time, depending on market conditions, and may be discontinued at any time. During the first nine months of fiscal 2003, the Company repurchased 7.6 million shares of Class B common stock at an aggregate cost of approximately $166.1 million, resulting in total repurchases of $236.4 million under the Stock Repurchase Program.

5

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(4)GOODWILL AND OTHER INTANGIBLE ASSETS:

At the beginning of the first quarter of fiscal 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets.” With the adoption of SFAS No. 142, goodwill is no longer subject to amortization, rather it is subject to at least an annual assessment for impairment by applying a fair value based test.

Goodwill, allocated by reportable segment, follows (in thousands):

	September27, 2002		Acquisitions		Translation and Other			June 27, 2003
Food and Support
Services – United States	$	977,174	$	34,248	$	(215	)	$	1,011,207
Food and Support
Services – International		53,328		597		5,871			59,796
Uniform and Career
Apparel – Rental		156,450		18,522		—			174,972
Uniform and Career
Apparel - Direct Marketing		111,856		—		(2,225	)		109,631
	$	1,298,808	$	53,367	$	3,431		$	1,355,606

Goodwill additions during the nine months ended June 27, 2003 reflect the acquisitions of Clinical Technology Services and Fine Host Corporation (see Note 11) in the Food and Support Services – United States segment and the acquisition of three regional uniform rental companies. These amounts may be revised upon final determination of the purchase price allocations.

Other intangible assets as of June 27, 2003 consist of (in thousands):

	GrossAmount		Accumulated Amortization			NetAmount
Customer relationship assets	$	461,689	$	(152,776	)	$	308,913
Other		25,776		(12,603	)		13,173
Total	$	487,465	$	(165,379	)	$	322,086

All intangible assets are amortizable and consist primarily of contract rights, customer lists and non-compete agreements. The intangible assets are being amortized on a straight-line basis over the expected period of benefit, 3 to 20 years. Intangible assets of approximately $117.5 million were acquired during the first nine months of fiscal 2003, primarily as part of the acquisitions of the Clinical Technology Services business, Fine Host Corporation and the three regional uniform rental companies. Amortization of intangible assets for the first nine months of fiscal 2003 was $36.6 million, including $1.2 million related to the writeoff of certain contract assets. Amortization for the first nine months of fiscal 2002 was $32.9 million.

(5)SUPPLEMENTAL CASH FLOW INFORMATION:

The Company made interest payments of $106.5 million and $96.6 million and income tax payments of $76.4 million and $62.0 million during the first nine months of fiscal 2003 and 2002, respectively.

Cash provided by operating activities includes the tax benefit from the employee exercise of non-qualified stock options of approximately $22.1 million and $36.0 million during the first nine months of fiscal 2003 and 2002, respectively.

6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(6)EARNINGS PER SHARE:

The Company follows the provisions of SFAS No. 128, “Earnings per Share.” Earnings applicable to common stock and common shares used in the calculation of basic and diluted earnings per share follow:

	ThreeMonthsEnded				NineMonthsEnded
	June 27, 2003		June 28, 2002		June 27, 2003		June 28, 2002
	(in thousands, except per share data)
Earnings:
Income from continuing operations	$	63,851	$	65,273	$	160,077	$	170,280
Net income	$	89,304	$	72,572	$	195,801	$	188,386
Shares:
Weighted average number of common shares outstanding used in basic earnings per share calculation		190,727		194,235		191,383		189,476
Impact of potential exercise opportunities under the ARAMARK Ownership and Equity Incentive Plans		5,648		10,449		7,111		11,197
Total common shares used in diluted earnings per share calculations		196,375		204,684		198,494		200,673
Basic earnings per common share:
Income from continuing operations	$	.33	$	.34	$	.84	$	.90
Net income	$	.47	$	.37	$	1.02	$	.99
Diluted earnings per common share:
Income from continuing operations	$	.33	$	.32	$	.81	$	.85
Net income	$	.45	$	.35	$	.99	$	.94

Options to purchase 7,865,651 shares were outstanding at June 27, 2003, but were not included in the computation of diluted earnings per common share for both the three and nine months ended June 27, 2003, as the effect would have been antidilutive.

The Company applies Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations in accounting for its stock option plans. Accordingly, no compensation expense has been recognized. If compensation cost for these plans had been determined using the fair-value method prescribed by SFAS No. 123, “Accounting for Stock Based Compensation,” the Company’s net income and earnings per share would have been reduced to the pro forma amounts as follow:

	Three Months Ended				Nine Months Ended
	June 27, 2003		June 28, 2002		June 27, 2003		June 28, 2002
	(in thousands, except per share data)
Net Income
As reported	$	89,304	$	72,572	$	195,801	$	188,386
Pro forma	$	86,134	$	70,790	$	186,849	$	184,184
Earnings per share
As reported:
Basic	$	0.47	$	0.37	$	1.02	$	0.99
Diluted	$	0.45	$	0.35	$	0.99	$	0.94
Pro forma:
Basic	$	0.45	$	0.36	$	0.98	$	0.97
Diluted	$	0.44	$	0.35	$	0.94	$	0.92

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(7)COMPREHENSIVE INCOME:

Pursuant to the provisions of SFAS No. 130, “Reporting Comprehensive Income”, comprehensive income includes all changes to shareholders’ equity during a period, except those resulting from investment by and distributions to shareholders. Components of comprehensive income include net income, changes in foreign currency translation adjustments, minimum pension liability and changes in the fair value of cash flow hedges (net of tax). Total comprehensive income was $102.8 million and $216.9 million for the three and nine months ended June 27, 2003, respectively, and $83.4 million and $196.2 million for the three and nine months ended June 28, 2002, respectively.

(8)ACCOUNTING FOR DERIVATIVE INSTRUMENTS:

The Company follows the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities—an Amendment of FASB Statement No. 133.” The Company utilizes derivative financial instruments, such as interest rate swaps and forward exchange contract agreements, to manage changes in market conditions related to debt obligations and foreign currency exposures. Through May 2003, the Company had $100 million of interest rate swap agreements, which were designated as cash flow hedging instruments, fixing the rate on a like amount of variable rate borrowings. These agreements expired in May 2003.Concurrent with the April 2002 issuance of the Company’s 7% notes, the Company entered into interest rate swaps, with notional amounts totaling $300 million, to receive fixed (7%)/pay variable (six month LIBOR). The swaps mature on May 1, 2007 and are designated as fair-value hedging instruments. Additionally, in connection with the August 2002 issuance of the Company’s 6.375% notes, in October 2002, the Company entered into interest rate swaps, with notional amounts totaling $300 million, to receive fixed (6.375%)/pay variable (six month LIBOR). The swaps mature on February 15, 2008 and are designated as fair-value hedging instruments. There were no material forward exchange contract agreements outstanding as of June 27, 2003.

The Company recognizes all derivatives on the balance sheet at fair value at the end of each quarter. 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. Amounts reclassified into earnings related to interest rate swap agreements are included in interest expense. During the first nine months of fiscal 2003 and 2002, respectively, credits of approximately $2.3 million (net of tax) and $3.5 million (net of tax) related to interest rate swaps were recorded in comprehensive income. As of June 27, 2003, there were no net unrealized losses related to interest rate swaps included in “Accumulated other comprehensive income (loss).” Changes in the fair value of a derivative that is designated as and meets all the required criteria for a fair value hedge are recognized currently in earnings, offset by recognizing currently in earnings the change in the fair value of the underlying hedged item. As of June 27, 2003, approximately $37.6 million has been included in “Other assets,” with an offsetting increase in “Long-term borrowings” in the condensed consolidated balance sheet related to fair value hedges. The hedge ineffectiveness for cash flow and fair value hedging instruments for the first nine months of fiscal 2003 and 2002 was not material. The counterparties to the above derivative agreements are major international banks. The Company continually monitors its positions and the credit ratings of its counterparties, and does not anticipate nonperformance by the counterparties.

(9)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. 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 buying and selling receivables generated by certain subsidiaries of the Company. Under the Receivables Facility, certain subsidiaries of the Company transfer without recourse all of their accounts receivable to ARAMARK Receivables, LLC. ARAMARK Receivables, LLC, in turn, has sold and, subject to certain conditions, may from time to time sell an undivided interest in these receivables up to $200 million. The Company has retained collection and administrative responsibility for the participating interest sold, and has retained an undivided interest in the transferred receivables of approximately $161.6 million and $183.9 million at June 27, 2003 and September 27, 2002, respectively, which is subject to a security interest. The agreement expires in March 2004. This two-step transaction is accounted for as a sale of receivables following the

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(9)ACCOUNTS RECEIVABLE SECURITIZATION (Continued):

provisions of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities—a Replacement of FASB Statement No. 125.” At June 27, 2003 and September 27, 2002, respectively, $149.9 million and $178.9 million of accounts receivable were sold and removed from the condensed consolidated balance sheet.

The loss on the sale of receivables was $2.8 million and $3.7 million for the first nine months of fiscal 2003 and 2002, respectively, and is included in “Interest and other financing costs, net.”

(10)SEGMENT INFORMATION:

Sales and operating income by reportable segment follow:

	Three Months Ended				Nine Months Ended
Sales	June 27, 2003		June 28, 2002		June 27, 2003		June 28, 2002
	(in thousands)
Food and Support Services - United States	$	1,623,463	$	1,488,107	$	4,712,854	$	4,195,924
Food and Support Services - International		362,701		298,948		1,052,255		894,634
Uniform and Career Apparel - Rental		253,517		250,458		759,281		752,632
Uniform and Career Apparel - Direct Marketing		100,873		98,985		335,410		331,892
	$	2,340,554	$	2,136,498	$	6,859,800	$	6,175,082

	Three Months Ended						Nine Months Ended
Operating Income	June 27, 2003			June 28, 2002			June 27, 2003			June 28, 2002
	(in thousands)
Food and Support Services - United States	$	85,897		$	86,704		$	227,206		$	204,923
Food and Support Services - International		16,181			11,771			47,252			34,551
Uniform and Career Apparel - Rental		28,869			30,136			80,868			89,760
Uniform and Career Apparel - Direct Marketing		4,201			3,867			18,832			18,583
		135,148			132,478			374,158			347,817
Corporate and Other		(6,695	)		(6,495	)		(21,858	)		(23,628	)
Other Income, net (Note 13)		—			5,806			—			43,695
Operating Income		128,453			131,789			352,300			367,884
Interest Expense, net		(40,776	)		(32,986	)		(110,996	)		(103,576	)
Income Before Income Taxes	$	87,677		$	98,803		$	241,304		$	264,308

“Food and Support Services—United States” operating income for the second quarter of fiscal 2003 includes approximately $6 million of business interruption proceeds, related to losses incurred as a result of the September 11, 2001 terrorist attacks. Additional proceeds from the business interruption coverage will be recognized in future periods as claims are settled. The second quarter of fiscal 2003 also includes approximately $6 million of costs related to the special manager meeting to launch our “Mission One” initiatives.

“Corporate and Other” in the second quarter of fiscal 2003 includes a gain of $1.4 million representing a residual cash payment from a previous divestiture.

“Food and Support Services - United States” operating income in the third quarter of fiscal 2002 includes approximately $3.2 million of business interruption proceeds, related to losses incurred as a result of the September 11, 2001 terrorist attacks.

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(10) SEGMENT INFORMATION: (Continued)

In the first and second fiscal quarters, within the Food and Support Services—United States segment, historically there has been a lower level of activity at the higher margin sports, entertainment and recreational food service operations which 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 which is partially offset by the effect of summer recess on the educational accounts. In addition, there is a seasonal increase in volume of directly marketed work clothing during the first fiscal quarter.

(11) ACQUISITIONS

During fiscal 2003, the Company acquired three regional uniform rental companies for a total of approximately $27 million in cash. The Company’s pro forma results of operations for fiscal 2003 and 2002 would not have been materially different than reported, assuming that these acquisitions had occurred at the beginning of the respective fiscal periods.

On September 30, 2002, the Company completed the acquisition of the Clinical Technology Services (CTS) business from Premier, Inc. for approximately $100 million in cash. Additionally, in mid-December 2002, the Company closed the acquisition of Fine Host Corporation, a food service management company, for approximately $100 million. The results of Fine Host Corporation have been included starting in the second quarter of fiscal 2003. These acquisitions were funded through borrowings under the revolving credit facility. The proforma results of operations for the first nine months of fiscal 2003 and 2002 would not have been materially different than reported, assuming that these acquisitions had occurred at the beginning of the respective periods.

During the third quarter of fiscal 2002, the Company completed the acquisition of the Harrison Conference Centers portfolio of conference centers and university hotels from Hilton Hotels Corporation for approximately $49 million in cash. The Company also acquired Long Beach Uniform, a direct retail and contract marketer of uniforms and public safety equipment in Southern California, for approximately $9.5 million in cash, and Uniform for Industry, a uniform rental company serving the New York City area, for approximately $10.4 million in cash. Each of these acquisitions was completed at or near the end of the third quarter, and had no material impact on the condensed consolidated financial statements.

On November 30, 2001, the Company completed the acquisition of the management services division of The ServiceMaster Company (ServiceMaster Management Services). The aggregate consideration for the transaction was approximately $790 million in cash plus costs of the acquisition, and was allocated to the assets acquired and liabilities assumed based on estimates of the respective fair values, as follows: approximately $(34) million to working capital; approximately $43 million to other noncurrent assets, net; and approximately $167 million to amortizable intangible assets. The excess of the purchase price over the net assets acquired was allocated to goodwill.

The results of ServiceMaster Management Services have been included in the accompanying condensed consolidated financial statements from the date of acquisition and are included in the Food and Support Services—United States segment. Had the acquisition of ServiceMaster Management Services occurred at the beginning of fiscal 2002, pro forma sales, net income and diluted earnings per share for the nine months ended June 28, 2002 would have been higher by approximately $0.2 billion, $1.5 million and $0.01 per share. These pro forma disclosures are based on historical results, adjusted for the impact of certain acquisition related items, such as: amortization of identified intangibles, increased interest expense on acquisition debt and the related income tax effects. Pro forma results do not reflect any synergies that might be achieved from the combined operations, and therefore, in management’s opinion, are not indicative of what actual results would have been if the acquisition had occurred at the beginning of fiscal 2002. Pro forma results are not intended to be a projection of future results.

10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(12) NEW ACCOUNTING PRONOUNCEMENTS:

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which is effective for exit or disposal activities that are initiated after December 31, 2002. Adoption of this pronouncement did not have a material effect on the Company’s financial statements.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees.” See Note 15.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure, an amendment of FASB Statement No. 123,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company has adopted the disclosure provisions of this statement (see Note 6) and can elect to adopt any of the three transitional recognition provisions of this statement prior to the end of the 2004 fiscal year.

In January 2003, the FASB issued Interpretation Number 46, “Consolidation of Variable Interest Entities” (FIN 46). This interpretation addresses consolidation by business enterprises of variable interest entities. The interpretation is not expected to have a material effect on the Company’s financial statements.

(13) OTHER INCOME:

In the second quarter of fiscal 2002, the Company sold its interests in the Boston Red Sox Baseball Club and a related entity, which controls the rights to broadcast Red Sox games. The sale resulted in a pre-tax gain of approximately $37.9 million. In the third quarter of fiscal 2002, the Company recorded a pretax net gain of $5.8 million, consisting of a gain ($7.4 million) on the sale of a residual interest in a previously divested business and charges ($1.6 million) incurred in connection with initiating the shareholder stock sale program in June 2002. These pretax gains are presented in “Other Income, net” in the accompanying condensed consolidated statements of income.

(14) FINANCING ACTIVITIES:

During the third quarter of fiscal 2003, the Company completed a tender offer for its 6-3/4% guaranteed notes due August 1, 2004 issued by ARAMARK Services, Inc. and guaranteed by ARAMARK Corporation. The total cash consideration paid for the purchase of the notes, including accrued interest, is $102 million. Additionally, during the third quarter of fiscal 2003, the Company retired a $45 million term loan due March 2005. These two transactions resulted in an extinguishment charge of $7.7 million which is included in “Interest and Other Financing Costs, net.”

During the second quarter of fiscal 2003, a Canadian subsidiary entered into a non-revolving credit facility, in the amount of C$25 million, which matures in September 2007. Interest is based on the Canadian Bankers Acceptance Rate (plus a spread of 1.50%), Canadian Prime Rate (plus a spread of 0.75%) or LIBOR (plus a spread of 1.50%). Proceeds were used to fund an acquisition in Canada.

During the first quarter of fiscal 2003, a subsidiary completed a private placement of 30 million GBP and 30 million Euro notes. The notes bear interest based on six-month GBP LIBOR (plus a spread of 2.32%) and six-month EURIBOR (plus a spread of 2.25%), respectively. Proceeds were used to repay borrowings primarily in the United Kingdom and Germany. The notes mature in November 2007.

11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(15) COMMITMENTS AND CONTINGENCIES:

ARAMARK has guaranteed certain indebtedness of two investee entities in the maximum amount of $27 million. Maturities of the guaranteed debt range from one to three years. Certain of the Company’s operating lease arrangements, primarily vehicle leases, with terms of one to eight years, contain provisions related to residual value guarantees. The maximum potential liability to ARAMARK under such arrangements was approximately $81.8 million at June 27, 2003. 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 June 27, 2003.

The Company may be exposed to liability resulting from the non-performance of certain indemnification obligations by an entity currently in bankruptcy from which the Company acquired a business in fiscal 2000. The amount of such exposure cannot be quantified at the present time due to uncertainty with respect to the number and amount of claims, if any, originating from or relating to the pre-acquisition period. The Company has $25 million of insurance coverage for such exposure with a $5 million retained loss limit.

The Company advanced funds to a concession services client which has filed for the equivalent of bankruptcy protection. At June 27, 2003, the client’s reorganization activities were substantially completed, and the carrying value of ARAMARK’s advance has been adjusted, without material effect on the consolidated financial statements.

During the second quarter of fiscal 2003, ARAMARK issued a demand, for overdue payment, to an insurance carrier with respect to certain outstanding insured claims. Subsequent to June 27, 2003, proceeds were received in full satisfaction of the claim.

During the third quarter of fiscal 2003, the Company reduced the provision for income taxes by approximately $8.4 million, based upon the settlement of certain of its open tax years.

The Company is party to certain claims and litigation. Such items include, among others, employment matters, compliance with various government regulations, contractual disputes and other matters arising in the normal course of business. The Company is vigorously defending these matters and believes that the ultimate resolution is not likely to have a material effect on the consolidated financial condition or results of operations.

(16) 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. ARAMARK Services, Inc. is the borrower under the Credit Agreement and certain other senior debt and incurs interest expense thereunder. The interest expense and certain administrative costs are only partially allocated to all of the other subsidiaries of the Company. The Company has fully and unconditionally guaranteed certain debt obligations of ARAMARK Services, Inc., its wholly-owned subsidiary, which totaled $1.9 billion as of June 27, 2003. The other subsidiaries do not guarantee any registered securities of the Company or ARAMARK Services, Inc., although certain other subsidiaries guarantee, along with the Company, certain other unregistered debt.

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
June 27, 2003
(In Millions)

ASSETS

	ARAMARK Services,Inc. and Subsidiaries		Other Subsidiaries		ARAMARK Corporation		Eliminations			Consolidated
Current Assets:
Cash and cash equivalents	$	28.9	$	10.8	$	0.1	$	—		$	39.8
Receivables		435.6		181.4		0.2		—			617.2
Inventories, at lower of cost or market		99.7		328.9		—		—			428.6
Prepayments and other current assets		96.6		14.0		4.2		—			114.8
Total current assets		660.8		535.1		4.5		—			1,200.4
Property and Equipment, net		417.4		729.3		2.4		—			1,149.1
Goodwill		890.3		465.3		—		—			1,355.6
Intercompany Receivable		1,414.0		765.8		—		(2,179.8	)		—
Investment in Subsidiaries		—		—		2,429.8		(2,429.8	)		—
Other Intangible Assets		262.7		59.4		—		—			322.1
Other Assets		253.1		103.9		2.7		—			359.7
	$	3,898.3	$	2,658.8	$	2,439.4	$	(4,609.6	)	$	4,386.9

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:
Current maturities of long-term borrowings	$	7.2	$	4.6	$	—	$	—		$	11.8
Accounts payable		321.5		74.4		19.5		—			415.4
Accrued expenses and other liabilities		525.2		230.8		14.0		—			770.0
Total current liabilities		853.9		309.8		33.5		—			1,197.2
Long-Term Borrowings		1,921.7		11.2		—		—			1,932.9
Deferred Income Taxes and Other Noncurrent Liabilities		173.6		91.3		19.3		—			284.2
Intercompany Payable		203.9		561.9		1,414.0		(2,179.8	)		—
Shareholders’ Equity		745.2		1,684.6		972.6		(2,429.8	)		972.6
	$	3,898.3	$	2,658.8	$	2,439.4	$	(4,609.6	)	$	4,386.9

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
September 27, 2002
(In Millions)

ASSETS

	ARAMARK Services,Inc. and Subsidiaries		Other Subsidiaries		ARAMARK Corporation		Eliminations			Consolidated
Current Assets:
Cash and cash equivalents	$	19.1	$	12.3	$	0.2	$	—		$	31.6
Receivables		343.1		192.5		0.4		—			536.0
Inventories, at lower of cost or market		98.6		326.6		—		—			425.2
Prepayments and other current assets		50.6		36.6		1.0		—			88.2
Current assets of discontinued operations		—		17.3		—		—			17.3
Total current assets		511.4		585.3		1.6		—			1,098.3
Property and Equipment, net		367.1		700.5		2.3		—			1,069.9
Goodwill		849.9		448.9		—		—			1,298.8
Intercompany Receivable		2,317.9		105.6		—		(2,423.5	)		—
Investment in Subsidiaries		—		—		2,337.4		(2,337.4	)		—
Other Intangible Assets		179.5		61.3		—		—			240.8
Other Assets		196.8		96.9		2.5		—			296.2
Noncurrent Assets of Discontinued Operations		—		255.3		—		—			255.3
	$	4,422.6	$	2,253.8	$	2,343.8	$	(4,760.9	)	$	4,259.3

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:
Current maturities of long-term borrowings	$	38.4	$	1.1	$	—	$	—		$	39.5
Accounts payable		352.3		101.4		32.5		—			486.2
Accrued expenses and other liabilities		508.9		198.2		16.7		—			723.8
Current liabilities of discontinued operations		—		54.1		—		—			54.1
Total current liabilities		899.6		354.8		49.2		—			1,303.6
Long-Term Borrowings		1,828.8		6.8		—		—			1,835.6
Deferred Income Taxes and Other Noncurrent Liabilities		146.1		80.2		28.0		—			254.3
Noncurrent Liabilities of Discontinued Operations		—		7.7		—		—			7.7
Intercompany Payable		942.5		72.5		1,408.5		(2,423.5	)		—
Shareholders’ Equity		605.6		1,731.8		858.1		(2,337.4	)		858.1
	$	4,422.6	$	2,253.8	$	2,343.8	$	(4,760.9	)	$	4,259.3

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the three months ended June 27, 2003
(In Millions)

	ARAMARK Services,Inc. and Subsidiaries			Other Subsidiaries		ARAMARK Corporation		Eliminations			Consolidated
Sales	$	1,650.8		$	689.8	$	—	$	—		$	2,340.6
Equity in Net Income of Subsidiaries		—			—		89.3		(89.3	)		—
Management Fee Income		—			—		7.0		(7.0	)		—
		1,650.8			689.8		96.3		(96.3	)		2,340.6
Costs and Expenses:
Cost of services provided		1,543.5			582.2		—		(6.9	)		2,118.8
Depreciation and amortization		37.7			28.4		—		0.1			66.2
Selling and general corporate expenses		12.7			7.7		6.8		—			27.2
		1,593.9			618.3		6.8		(6.8	)		2,212.2
Operating Income		56.9			71.5		89.5		(89.5	)		128.4
Interest and Other Financing Costs, net:
Interest expense, net		40.4			0.2		0.2		—			40.8
Intercompany interest, net		(8.9	)		9.1		—		(0.2	)		—
Interest and Other Financing Costs, net		31.5			9.3		0.2		(0.2	)		40.8
Income from continuing operations before income taxes		25.4			62.2		89.3		(89.3	)		87.6
Provision for Income Taxes		8.7			15.1		—		—			23.8
Income from continuing operations		16.7			47.1		89.3		(89.3	)		63.8
Income from discontinued operations, net		—			25.5		—		—			25.5
Net Income	$	16.7		$	72.6	$	89.3	$	(89.3	)	$	89.3

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the three months ended June 28, 2002
(In Millions)

	ARAMARK Services,Inc. and Subsidiaries			Other Subsidiaries			ARAMARK Corporation		Eliminations			Consolidated
Sales	$	1,441.4		$	695.1		$	—	$	—		$	2,136.5
Equity in Net Income of Subsidiaries		—			—			72.6		(72.6	)		—
Management Fee Income		—			—			8.3		(8.3	)		—
		1,441.4			695.1			80.9		(80.9	)		2,136.5
Costs and Expenses:
Cost of services provided		1,355.8			577.4			—		(9.4	)		1,923.8
Depreciation and amortization		30.1			26.5			—		0.1			56.7
Selling and general corporate expenses		16.5			5.8			6.1		1.6			30.0
Other income, net		—			(7.4	)		1.6		—			(5.8	)
		1,402.4			602.3			7.7		(7.7	)		2,004.7
Operating income		39.0			92.8			73.2		(73.2	)		131.8
Interest and Other Financing Costs, net:
Interest expense, net		32.6			(0.2	)		0.6		—			33.0
Intercompany interest, net		(4.3	)		4.9			—		(0.6	)		—
Interest and Other Financing Costs, net		28.3			4.7			0.6		(0.6	)		33.0
Income from continuing operations before income taxes		10.7			88.1			72.6		(72.6	)		98.8
Provision for Income Taxes		3.8			29.7			—		—			33.5
Income from continuing operations		6.9			58.4			72.6		(72.6	)		65.3
Income from discontinued operations, net		—			7.3			—		—			7.3
Net Income	$	6.9		$	65.7		$	72.6	$	(72.6	)	$	72.6

16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the nine months ended June 27, 2003
(In Millions)

	ARAMARK Services,Inc. and Subsidiaries			Other Subsidiaries		ARAMARK Corporation		Eliminations			Consolidated
Sales	$	4,998.9		$	1,860.9	$	—	$	—		$	6,859.8
Equity in Net Income of Subsidiaries		—			—		195.8		(195.8	)		—
Management Fee Income		—			—		22.7		(22.7	)		—
		4,998.9			1,860.9		218.5		(218.5	)		6,859.8
Costs and Expenses:
Cost of services provided		4,662.2			1,588.4		—		(22.3	)		6,228.3
Depreciation and amortization		108.6			83.8		—		0.2			192.6
Selling and general corporate expenses		41.9			22.6		21.9		0.2			86.6
		4,812.7			1,694.8		21.9		(21.9	)		6,507.5
Operating Income		186.2			166.1		196.6		(196.6	)		352.3
Interest and Other Financing Costs, net:
Interest expense, net		109.4			0.8		0.8		—			111.0
Intercompany interest, net		(26.7	)		27.5		—		(0.8	)		—
Interest and Other Financing Costs, net		82.7			28.3		0.8		(0.8	)		111.0
Income from continuing operations before income taxes		103.5			137.8		195.8		(195.8	)		241.3
Provision for Income Taxes		36.1			45.1		—		—			81.2
Income from continuing operations		67.4			92.7		195.8		(195.8	)		160.1
Income from discontinued operations, net		—			35.7		—		—			35.7
Net Income	$	67.4		$	128.4	$	195.8	$	(195.8	)	$	195.8

17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
For the nine months ended June 28, 2002
(In Millions)

	ARAMARK Services,Inc. and Subsidiaries			Other Subsidiaries			ARAMARK Corporation		Eliminations			Consolidated
Sales	$	4,331.9		$	1,843.2		$	—	$	—		$	6,175.1
Equity in Net Income of Subsidiaries		—			—			188.4		(188.4	)		—
Management Fee Income		—			—			26.0		(26.0	)		—
		4,331.9			1,843.2			214.4		(214.4	)		6,175.1
Costs and Expenses:
Cost of services provided		4,058.9			1,560.5			—		(25.3	)		5,594.1
Depreciation and amortization		91.5			78.6			—		0.4			170.5
Selling and general corporate expenses		43.2			19.8			21.8		1.5			86.3
Other income, net		(37.9	)		(7.4	)		1.6		—			(43.7	)
		4,155.7			1,651.5			23.4		(23.4	)		5,807.2
Operating income		176.2			191.7			191.0		(191.0	)		367.9
Interest and Other Financing Costs, net:
Interest expense, net		101.0			—			2.6		—			103.6
Intercompany interest, net		(12.2	)		14.8			—		(2.6	)		—
Interest and Other Financing Costs, net		88.8			14.8			2.6		(2.6	)		103.6
Income from continuing operations before income taxes		87.4			176.9			188.4		(188.4	)		264.3
Provision for Income Taxes		32.6			61.4			—		—			94.0
Income from continuing operations		54.8			115.5			188.4		(188.4	)		170.3
Income from discontinued operations, net		—			18.1			—		—			18.1
Net Income	$	54.8		$	133.6		$	188.4	$	(188.4	)	$	188.4

18

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the nine months ended June 27, 2003
(In Millions)

	ARAMARK Services,Inc. and Subsidiaries			Other Subsidiaries			ARAMARK Corporation			Eliminations		Consolidated
Net cash provided by (used in) operating activities from continuing operations	$	53.9		$	196.0		$	(25.8	)	$	—	$	224.1
Cash flows from investing activities from continuing operations:
Purchases of property and equipment		(97.5	)		(83.0	)		(0.2	)		—		(180.7	)
Disposals of property and equipment		13.8			4.1			—			—		17.9
Acquisition of certain businesses, net of cash acquired		(173.5	)		(28.7	)		—			—		(202.2	)
Divestiture of certain businesses		—			248.1			—			—		248.1
Other investing activities		(8.7	)		(1.9	)		—			—		(10.6	)
Net cash used in investing activities from continuing operations		(265.9	)		138.6			(0.2	)		—		(127.5	)
Cash flows from financing activities from continuing operations:
Proceeds from additional long-term borrowings		259.3			0.9			—			—		260.2
Payment of long-term borrowings		(212.5	)		(5.1	)		—			—		(217.6	)
Repurchase of stock		—			—			(168.6	)		—		(168.6	)
Proceeds from issuance of common stock		—			—			20.6			—		20.6
Other financing activities		(0.7	)		—			3.0			—		2.3
Change in intercompany, net		175.7			(346.6	)		170.9			—		—
Net cash provided by (used in) financing activities from continuing operations		221.8			(350.8	)		25.9			—		(103.1	)
Net cash provided by discontinued operations		—			14.7			—			—		14.7
Increase (decrease) in cash and cash equivalents		9.8			(1.5	)		(0.1	)		—		8.2
Cash and cash equivalents, beginning of period		19.1			12.3			0.2			—		31.6
Cash and cash equivalents, end of period	$	28.9		$	10.8		$	0.1		$	—	$	39.8

19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the nine months ended June 28, 2002
(In Millions)

	ARAMARK Services,Inc. and Subsidiaries			Other Subsidiaries			ARAMARK Corporation			Eliminations		Consolidated
Net cash provided by (used in) operating activities from continuing operations	$	192.7		$	176.7		$	(34.3	)	$	—	$	335.1
Cash flows from investing activities from continuing operations:
Purchases of property and equipment		(67.5	)		(74.8	)		—			—		(142.3	)
Disposals of property and equipment		8.7			(0.6	)		—			—		8.1
Proceeds from sale of investments		68.8			8.2			—			—		77.0
Divestiture of certain businesses		2.5			1.7			—			—		4.2
Acquisition of certain businesses, net of cash acquired		(843.6	)		(21.9	)		—			—		(865.5	)
Other investing activities		(9.5	)		25.4			(0.3	)		—		15.6
Net cash used in investing activities from continuing operations		(840.6	)		(62.0	)		(0.3	)		—		(902.9	)
Cash flows from financing activities from continuing operations:
Proceeds from additional long-term borrowings		921.2			—			—			—		921.2
Payment of long-term borrowings		(685.1	)		(2.4	)		—			—		(687.5	)
Proceeds from issuance of common stock		—			—			764.6			—		764.6
Repurchase of stock		—			—			(441.7	)		—		(441.7	)
Change in intercompany, net		420.0			(133.8	)		(286.2	)		—		—
Other financing activities		(4.4	)		—			(2.2	)		—		(6.6	)
Net cash provided by (used in) financing activities from continuing operations		651.7			(136.2	)		34.5			—		550.0
Net cash provided by discontinued operations		—			29.4			—			—		29.4
Increase (decrease) in cash and cash equivalents		3.8			7.9			(0.1	)		—		11.6
Cash and cash equivalents, beginning of period		17.3			7.1			0.4			—		24.8
Cash and cash equivalents, end of period	$	21.1		$	15.0		$	0.3		$	—	$	36.4

20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following discussion and analysis of our results of operations and financial condition for the three and nine-month periods ended June 27, 2003 and June 28, 2002 should be read in conjunction with the quarterly financial statements and notes thereto contained in this Form 10-Q and our audited consolidated financial statements, and the notes to those statements, for the fiscal year ended September 27, 2002. 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 results of operations and financial condition, certain financial measures may be considered “non-GAAP financial measures” under Securities and Exchange Commission rules. These rules require supplemental explanation and reconciliation, which is provided in Exhibit(s) 99.1 to this quarterly report on Form 10-Q, and is incorporated by reference herein.

CRITICAL ACCOUNTING ESTIMATES

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company’s significant accounting policies are described in the notes to the consolidated financial statements included in our 2002 Annual Report on Form 10-K filed with the Securities and Exchange Commission. 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. Direct marketing segment sales are recognized upon shipment.

Judgements and estimates of uncertainties are required in applying such accounting policies in certain areas. Following are some of the areas requiring significant judgements and estimates: cash flow and valuation assumptions in performing asset impairment tests of long-lived assets and goodwill; estimated costs to be incurred for environmental matters, contract disputes and litigation; and estimates of allowances for bad debts and inventory obsolescence.

There are numerous critical assumptions that may influence accounting estimates in these and other areas. We base our critical assumptions on our historical experience and on various other estimates we believe to be reasonable. Certain of the more critical assumptions include –

Asset Impairment Determinations

• 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.

•Client and customer preferences and behavior patterns.

Environmental Matters

•Government regulations and enforcement activity.

•Changes in remediation technology and practices.

•Financial obligations and credit worthiness of other responsible parties and insurers.

21

Litigation and Claims

•Interpretation of contractual rights and obligations.

•Government regulatory initiatives, investigations, activities and interpretations of regulations.

Bad Debt Risk

•Credit worthiness of specific customers and aging of customer balances.

•General and specific industry economic conditions as well as industry concentrations.

•Contractual rights and obligations.

Inventory Obsolescence

•History of customer demand and sales within specific product categories.

•Economic conditions within customer specific industries.

•Style and product changes.

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 revision.

RESULTS OF CONTINUING OPERATIONS

On May 9, 2003, the Company closed the sale of its Educational Resources segment (see Note 2). Accordingly, as required by generally accepted accounting principles, fiscal 2003 third quarter and year-to-date operating results, along with the comparable prior year periods, for this business are reported as “discontinued 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 nine month periods ended June 27, 2003 and June 28, 2002. The discussion that follows compares fiscal 2003 results of continuing operations to the fiscal 2002 results of continuing operations.

	Three Months Ended								Nine Months Ended
	June 27, 2003				June 28, 2002				June 27, 2003				June 28, 2002
Sales by Reportable Segment	$		%		$		%		$		%		$		%
	(dollars in millions)
Food & Support Services - United States	$	1,623.5	69	%	$	1,488.1	69	%	$	4,712.8	69	%	$	4,195.9	68	%
Food & Support Services - International		362.7	15	%		298.9	14	%		1,052.3	15	%		894.7	15	%
Uniform and Career Apparel - Rental		253.5	11	%		250.5	12	%		759.3	11	%		752.6	12	%
Uniform and Career Apparel - Direct Marketing		100.9	5	%		99.0	5	%		335.4	5	%		331.9	5	%
	$	2,340.6	100	%	$	2,136.5	100	%	$	6,859.8	100	%	$	6,175.1	100	%

	Three Months Ended										Nine Months Ended
	June 27, 2003					June 28, 2002					June 27, 2003					June 28, 2002
Operating Income by Reportable Segment	$			%		$			%		$			%		$			%
	(dollars in millions)
Food & Support Services - United States	$	85.9		67	%	$	86.7		66	%	$	227.2		65	%	$	204.9		56	%
Food & Support Services - International		16.2		13	%		11.8		9	%		47.3		13	%		34.5		9	%
Uniform and Career Apparel - Rental		28.9		22	%		30.1		23	%		80.9		23	%		89.8		24	%
Uniform and Career Apparel - Direct Marketing		4.2		3	%		3.9		3	%		18.8		5	%		18.6		5	%
Corporate and Other		(6.7	)	-5	%		(6.5	)	-5	%		(21.9	)	-6	%		(23.6	)	-6	%
		128.5		100	%		126.0		96	%		352.3		100	%		324.2		88	%
Other Income		0.0		0	%		5.8		4	%		0.0		0	%		43.7		12	%
	$	128.5		100	%	$	131.8		100	%	$	352.3		100	%	$	367.9		100	%

22

Consolidated Overview

Sales of $2.3 billion for the third quarter and $6.9 billion for the nine-month period increased 10% and 11%, respectively, over the prior year periods; with acquisitions and the favorable impact of foreign currency translation contributing 8% and 9% for the three and nine-month periods. The Food and Support Services - United States segment experienced high single digit sales growth in third quarter, while sales in the Uniform and Career Apparel Rental and Direct Marketing segments increased slightly. The Food and Support Services – International segment reported double-digit sales growth, which was favorably affected by the impact of foreign currency translation. For the nine-month period, the Food and Support Services segments experienced double-digit sales growth, while sales in the Uniform and Career Apparel Rental and Direct Marketing segments were essentially equal with the prior year period. Operating income for the third quarter was $128.5 million and $352.3 million for the nine-month period, a decrease of 3% and 4%, respectively, from the fiscal 2002 periods. Fiscal 2002 operating income in the third quarter included a $5.8 million pre-tax net gain resulting principally from the sale of a residual investment in a previously divested business, and in the fiscal 2002 nine-month period also included a pretax gain of $37.9 million from the sale of our ownership interests in the Boston Red Sox Baseball Club (presented as “Other Income” -see Note 13 to the condensed consolidated financial statements). Excluding other income, 2003 operating income increased 2% and 9% for the three and nine-month periods, with approximately 3% and 7% due to the impact of acquisitions and foreign currency translation. Continuing weak economic conditions and sluggish employment levels have continued to adversely affect all operating segments. Year-to-date operating income margin of 5.1% was lower than the prior year (5.2% - excluding other income), with margin improvements in the Food and Support Services – International segment being offset by margin declines in the Uniform and Career Apparel – Rental segment and softness in the Sports and Entertainment sector of the Food and Support Services – United States segment.

Interest and other financing costs, net for the three and nine-month periods was $40.8 million and $111 million, respectively, an increase of 24% and 7% over the prior year periods due to a debt extinguishment charge of $7.7 million related to the tender offer for the Company’s 6.75% Notes and the retirement of a term loan (see Note 14), with the impact of lower interest rates being largely offset by increased average borrowing levels. The effective income tax rate on income from continuing operations for the nine-month period was 33.7%, compared to 35.6% for the prior year nine-month period. The Company reduced its tax provision in the third quarter of fiscal 2003 by approximately $8.4 million, based on the settlement of certain open tax years (see Note 15). Also, the fiscal 2002 effective tax rate for the nine-month period was favorably impacted by a permanent book and tax basis difference on the investment sale noted above.

Income from continuing operations for the three and nine-month periods was $63.9 million and $160.1 million, compared to $65.3 million and $170.3 million in the respective prior year periods. The fiscal 2003 three and nine-month periods include the impact of the debt extinguishment ($4.7 million after-tax charge) and the $8.4 million tax adjustment noted above, and fiscal 2002 amounts include the divestiture gains noted above (after-tax gain of $6.4 million and $30.8 million for the three and nine-month periods, respectively). Net income for the three and nine-month periods was $89.3 million and $195.8 million, compared to $72.6 million and $188.4 million in the respective prior year periods. Net income for the fiscal 2003 three and nine-month periods includes the after-tax gain of $23.6 million related to the divestiture of the Educational Resources business.

Fiscal 2003 third quarter diluted earnings per share from continuing operations was $0.33 per share compared to $0.32 per share in fiscal 2002. The debt extinguishment loss and the tax provision adjustment resulted in a net increase of $0.02 per share in the fiscal 2003 third quarter. The divestiture gain increased earnings $0.03 per share in the fiscal 2002 third quarter. Diluted earnings per share (which includes discontinued operations) was $0.45 per share in fiscal 2003 compared to $0.35 per share in fiscal 2002. The impact of the gain on the sale of the Educational Resources business was $0.12 per share. The weighted average share count for the three-month period was 196 million shares and 205 million shares in fiscal 2003 and 2002, respectively.

For the nine-month period, diluted earnings per share from continuing operations was $0.81 per share compared to $0.85 per share in fiscal 2002. The debt extinguishment loss and the tax provision adjustment increased per share earnings by $0.02 in the fiscal 2003 period, while the divestiture and Red Sox gains increased per share earnings $0.15 in the fiscal 2002 period. Diluted earnings per share (which includes discontinued operations) was $0.99 per share in fiscal 2003 compared to $0.94 per share in fiscal 2002. The weighted average share count for the nine-month period was 198 million shares and 201 million shares in fiscal 2003 and 2002, respectively.

23

Segment Results

As noted above, operating results of the Educational Resources business are reported as discontinued operations and are not included in segment results. The following tables present a fiscal 2003/2002 comparison of reportable segment sales and operating income together with the amount of and percentage change between periods.

	Three Months Ended								Nine Months Ended
	June				Change				June				Change
Sales by Reportable Segment	2003		2002		$		%		2003		2002		$		%
	(dollars in millions)
Food & Support Services - United States	$	1,623.5	$	1,488.1	$	135.4	9	%	$	4,712.8	$	4,195.9	$	516.9	12	%
Food & Support Services - International		362.7		298.9		63.8	21	%		1,052.3		894.7		157.6	18	%
Uniform and Career Apparel - Rental		253.5		250.5		3.0	1	%		759.3		752.6		6.7	1	%
Uniform and Career Apparel - Direct Marketing		100.9		99.0		1.9	2	%		335.4		331.9		3.5	1	%
	$	2,340.6	$	2,136.5	$	204.1	10	%	$	6,859.8	$	6,175.1	$	684.7	11	%

	Three Months Ended											Nine Months Ended
	June						Change					June						Change
Operating Income by Reportable Segment	2003			2002			$			%		2003			2002			$			%
	(dollars in millions)
Food & Support Services - United States	$	85.9		$	86.7		$	(0.8	)	-1	%	$	227.2		$	204.9		$	22.3		11	%
Food & Support Services - International		16.2			11.8			4.4		37	%		47.3			34.5			12.8		37	%
Uniform and Career Apparel - Rental		28.9			30.1			(1.2	)	-4	%		80.9			89.8			(8.9	)	-10	%
Uniform and Career Apparel - Direct Marketing		4.2			3.9			0.3		9	%		18.8			18.6			0.2		1	%
Corporate and Other		(6.7	)		(6.5	)		(0.2	)	-3	%		(21.9	)		(23.6	)		1.7		7	%
		128.5			126.0			2.5		2	%		352.3			324.2			28.1		9	%
Other Income		0.0			5.8			(5.8	)	—			0.0			43.7			(43.7	)	—
	$	128.5		$	131.8		$	(3.3	)	-3	%	$	352.3		$	367.9		$	(15.6	)	-4	%

Food and Support Services—United States Segment

Food and Support Services—United States segment sales for the three and nine-month periods increased 9% and 12% over the prior year periods due to acquisitions (approximately 7% and 10%, respectively), net new accounts (approximately 2% and 1%, respectively) and increased volume (approximately 1% for the nine month period). Sales growth for the third quarter in the Healthcare/Corrections sector continued in the high single digits and sales growth in the Education sector was in the mid-single digits due primarily to increased volume at existing accounts. Continuing weak employment levels and the sluggish economy have continued to adversely impact sales growth in our economically sensitive businesses, with third quarter sales down about 2% in the Business Services sector (excluding acquisitions), which, however, compared favorably to the 7% decline in the second quarter. The Facilities Services sector sales growth (excluding acquisitions) continued in the low single digits during the current quarter. Sales in the Sports and Entertainment sector were about equal with the prior year, with increases due to additional NHL and NBA playoff games offset by fewer Major League Baseball games in the fiscal 2003 third quarter and lower average attendance, and significantly decreased visitations at National parks. Park visitation was reported down almost 15% from the prior year at several popular locations.

Segment operating income for the third quarter decreased 1% compared to the prior year period which included insurance proceeds of approximately $3 million related to our World Trade Center claim. For the third quarter, strong performance in the Healthcare/Corrections and Education sectors, continued realization of synergies from the ServiceMaster acquisition and effective cost controls in the Business Services sector, were offset by significantly reduced profitability in the Sports and Entertainment sector, due to continued softness in the tourist and convention center businesses, which continued to be adversely affected by lower visitation and spending levels, as well as fewer games and lower average attendance at Major League Baseball games. Operating income for the nine-month period of fiscal 2003 increased 11% compared to the prior year period, with acquisitions contributing approximately 7%. Included in fiscal 2003 results for the nine-month period are approximately $6 million of business interruption insurance proceeds related to our World Trade Center claim and approximately $6 million of costs related to a company-wide front-line managers meeting to launch our “Mission One” initiatives, both incurred in the second quarter of fiscal 2003.

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Food and Support Services—International Segment

Sales in the Food and Support Services—International segment for the three and nine-month periods increased 21% and 18% over the prior year. Excluding the impact of foreign currency translation, sales increased 6% for both the three and nine-month periods due to acquisitions (approximately 1% and 2% respectively) and net new accounts (approximately 5% and 4%, respectively). Sales growth in the United Kingdom was in the high single-digits and sales growth in Spain was in the low double-digits. Sales growth in Germany was in the low single-digits and sales in Canada, excluding acquisitions, were equal with the prior year period, reflective of the continuing economic weakness in these countries.

Operating income in this segment for both the three and nine-month periods increased 37% compared to the prior year periods. Excluding the impact of foreign currency translation, segment operating income for the three and nine-month periods increased 19% and 21%, with acquisitions contributing approximately 4% and 6%, respectively, of the increase. Base business growth rates were 15% for both the three and nine-month periods, driven principally by strong performances in Germany and Spain.

Uniform and Career Apparel—Rental Segment

Uniform and Career Apparel—Rental segment sales increased 1% for both the three and nine-month periods compared to the prior year due to acquisitions. Sales increases from net new business have been offset by reduced volume at existing accounts. Sales growth in this segment continues to be constrained by soft economic conditions and persistent low employment levels.

Operating income in this segment for the three and nine-month periods decreased 4% and 10% from the prior year periods. Net new sales growth and modest price increases were substantially offset by continued contraction in the base business, and while cost control and operational improvement initiatives mitigated to a large extent normal operating cost increases, increased medical and fuel costs and a very competitive business environment put continued downward pressure on margins compared to the prior year periods.

Uniform and Career Apparel—Direct Marketing Segment

Uniform and Career Apparel—Direct Marketing segment sales for the three and nine-month periods increased 2% and 1%, respectively, over the prior year periods, with the increase from an acquisition largely offset by a decrease in base business, particularly in work clothing products where sales continued to be constrained by sluggish economic conditions. Segment operating income for the three and nine-month periods increased 9% and 1%, respectively, from the prior year periods due primarily to the impact of the acquisition and a higher margin sales mix.

Corporate and Other

Corporate and other expenses, those administrative expenses not allocated to the business segments, were $6.7 million and $21.9 million for the three and nine-month periods of fiscal 2003, respectively, compared to $6.5 million and $23.6 million for the prior year periods. The fiscal 2003 nine-month period includes a gain of $1.4 million related to a residual payment from a previously divested entity.

Results of Discontinued Operations

As discussed above, on May 9, 2003 the Company closed the sale of its Educational Resources business to Knowledge Universe Corporation for $250 million in cash, subject to certain post closing adjustments. The proceeds were used to repay outstanding borrowings and the sale resulted in a net gain of $23.6 million. The results of this business are reflected in the accompanying condensed consolidated financial statements as discontinued operations for all periods presented in accordance with generally accepted accounting principles. Sales, operating income and income from discontinued operations for fiscal 2003 (excluding the net gain) through the transaction closing date and for fiscal 2002 are as follows:

	ThreeMonthsEnded				NineMonthsEnded
(In millions)	June 27,2003		June 28,2002		June 27,2003		June 28,2002
Sales	$	37.1	$	119.4	$	264.3	$	348.7
Operating income		3.1		12.0		20.2		29.8
Income from discontinued operations	$	1.9	$	7.3	$	12.1	$	18.1

25

OUTLOOK

As discussed above, the continuing weak economy and persistent low employment levels have had a negative effect on sales growth and operating results in our economically sensitive businesses and we expect this trend to continue into the fourth quarter of fiscal 2003. Difficult economic conditions are expected to affect results in both the Uniform and Career Apparel segments and in the Sports and Entertainment sector, particularly in the tourist and convention center business, and possibly at our Major League Baseball venues, based on continuing reduced attendance levels.

During the fourth quarter of fiscal 2002, certain of the Company’s insurance coverages were renewed with premium increases. Fiscal 2004 premiums for the Company’s casualty and general liability coverage will be renegotiated during the fourth quarter of fiscal 2003, and we currently expect further premium increases and that certain coverages, such as terrorist acts coverage, will be reduced. Management is evaluating alternative insurance arrangements in response to these changes.

FINANCIAL CONDITION AND LIQUIDITY

Reference to the condensed consolidated statements of cash flows will facilitate understanding of the discussion that follows. Those statements reflect the Educational Resources business as a discontinued operation.

Cash provided by operating activities from continuing operations for the nine-month period was $224.1 million in the fiscal 2003 period compared to $335.0 million in fiscal 2002, a decrease of $110.9 million. The reduction in the accounts receivable sale facility (see Note 9) earlier this year resulted in approximately $75.0 million of the decrease, as the level of receivable balances sold decreased during the current period. The remainder of the decrease resulted from higher working capital requirements, due in part to increased receivable balances and the timing of supplier and income tax payments, offset by higher income and non cash charges in the current period. Total debt increased $69.5 million from September 27, 2002, due primarily to the acquisitions of CTS and Fine Host (see below) and common stock repurchases, less repayments from the proceeds of the Educational Resources sale noted above.

On September 30, 2002, the Company completed the acquisition of the Clinical Technology Services (CTS) business from Premier, Inc. for approximately $100 million in cash. Additionally, in mid-December 2002, the Company closed the acquisition of Fine Host Corporation, a food service management company, for approximately $100 million. The Company funded the cash portion of these acquisitions through borrowings under the revolving credit facility.

During the third quarter of fiscal 2003, the Company completed a tender offer for its 6-3/4% guaranteed notes due August 1, 2004, issued by ARAMARK Services, Inc. and guaranteed by ARAMARK Corporation. The total cash consideration paid for the purchase of the notes, including accrued interest, was $102 million. Additionally, during the third quarter of fiscal 2003, the Company retired a $45 million term loan due March 2005. These two transactions resulted in an extinguishment charge of $7.7 million, which is included in “Interest and Other Financing Costs, net,” and were financed through borrowings under the Company’s $1 billion bank credit facility.

During the second quarter of fiscal 2003, a Canadian subsidiary of the Company entered into a non-revolving credit facility in the amount of C$25 million, which matures in September 2007. Interest on the facility is based on the Canadian Bankers Acceptance Rate (plus a spread of 1.50%), Canadian Prime Rate (plus a spread of 0.75%) or LIBOR (plus a spread of 1.50%). Proceeds were used to fund an acquisition in Canada.

During the first quarter of fiscal 2003, a subsidiary of the Company completed a private placement of 30 million GBP and 30 million Euro notes. The notes bear interest based on six-month GBP LIBOR (plus a spread of 2.32%) and six-month EURIBOR (plus a spread of 2.25%), respectively. Proceeds from the private placement were used to repay existing borrowings primarily in the United Kingdom and Germany. The private placement notes mature in November 2007. Also, in October 2002, the Company entered into interest rate swaps, with notional amounts totaling $300 million, to receive fixed (6.375%)/pay variable (six month LIBOR). The swaps mature on February 15, 2008 and are designated as fair-value hedging instruments.

The Company established a Stock Repurchase Program, under which the Board of Directors has approved the use of up to $350 million to repurchase shares of the Company’s common stock. Repurchases are to be made in accordance with applicable securities laws in open market or privately negotiated transactions or otherwise, from time to time, depending on market conditions, and may be discontinued at any time. During the first nine months of fiscal 2003, the Company repurchased approximately 7.6 million shares for $166.1 million, resulting in total repurchases under the authorization of $236.4 million.

26

At July 25, 2003, there was approximately $835 million of unused committed credit availability under our senior revolving credit facility. Additionally, the Company has a shelf registration statement on file with the SEC for the issuance of up to $400 million of debt securities. The Company currently expects to fund acquisitions, capital expenditures and other liquidity needs from cash provided from operating activities, normal disposals of property and equipment, and borrowings available under our credit facilities or registered or private note issuances. As of June 27, 2003, there was approximately $145.4 million outstanding in foreign currency borrowings.

The following table summarizes the Company’s future obligations for debt repayments, capital leases, future minimum rental and similar commitments under noncancelable operating leases and other long-term liabilities, as well as contingent obligations related to outstanding letters of credit and guarantees as of September 27, 2002. Other than the increase in debt described above, and the reduction in operating lease commitments as a result of the AER divestiture described in footnote (1) below, since September 27, 2002, there has been no material change in the Company’s future obligations for these obligations.

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Long-term borrowings	$	1,870,431	$	38,659	$	1,035,581	$	779,291	$	16,900
Capital lease obligations		5,136		1,195		2,252		1,116		573
Operating leases (1)		806,082		216,251		209,684		130,684		249,463
Purchasing obligations (2)		120,301		97,805		22,496		—		—
Other long-term liabilities reflected on the Registrant’s balance sheet under GAAP (3)		85,575		—		10,519		114		74,942
	$	2,887,525	$	353,910	$	1,280,532	$	911,205	$	341,878

	Amount of Commitment Expiration perPeriod
Other Commercial Commitments	Total Amounts Committed		Lessthan 1 year		1-3 years		3-5 years		Over 5 years
Letters of credit	$	32,978	$	15,981	$	16,997	$	—	$	—
Guarantees		26,803		—		26,803		—		—
	$	59,781	$	15,981	$	43,800	$	—	$	—

______________

(1) The operating lease commitments shown above include the following amounts related to the Educational Resources business, which was divested on May 9, 2003:

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		After 5 years
Operating leases	$	271,709	$	49,640	$	79,048	$	53,619	$	89,402

(2) Represents capital commitments in connection with several long-term concession contracts.

(3) Primarily represents certain unfunded employee retirement obligations.

27

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. 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 buying and selling receivables generated by certain subsidiaries of the Company. Under the Receivables Facility, certain subsidiaries of the Company transfer, without recourse, all of their accounts receivable to ARAMARK Receivables, LLC. ARAMARK Receivables, LLC, in turn, has sold and, subject to certain conditions, may from time to time sell an undivided interest in these receivables up to $200 million. The Company has retained collection and administrative responsibility for the participating interest sold, and has retained an undivided interest in the transferred receivables of approximately $161.6 million at June 27, 2003, which is subject to a security interest. The agreement expires in March 2004. This two-step transaction is accounted for as a sale of receivables following the provisions of SFAS No. 140.

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. ARAMARK may be exposed to liability resulting from the non-performance of certain indemnification obligations by an entity currently in bankruptcy from which ARAMARK acquired a business in fiscal 2000. The amount of such exposure cannot be quantified at the present time due to uncertainty with respect to the number and amount of claims, if any, originating from or relating to the pre-acquisition period. ARAMARK has $25 million of insurance coverage for such exposure with a $5 million retained loss limit. The Company advanced funds to a concession services client which has filed for the equivalent of bankruptcy protection. At June 27, 2003, the client’s reorganization activities were substantially completed, and the carrying value of ARAMARK’s advance has been adjusted. During the second quarter of fiscal 2003, ARAMARK issued a demand, for overdue payment, to an insurance carrier with respect to certain outstanding insured claims. Subsequent to June 27, 2003, proceeds were received in full satisfaction of the claim.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities,” which is effective for exit or disposal activities that are initiated after December 31, 2002. Adoption of this pronouncement did not have a material effect on the Company’s financial statements.

In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees.” See Note 15.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure, an amendment of FASB Statement No. 123,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company has adopted the disclosure provisions of this statement (see Note 6). The Company can elect to adopt any of the three transitional recognition provisions of this statement prior to the end of the 2004 fiscal year.

In January 2003, the FASB issued Interpretation Number 46, “Consolidation of Variable Interest Entities” (FIN 46). This interpretation addresses consolidation by business enterprises of variable interest entities. The interpretation is not expected to have a material effect on the Company’s financial statements.

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements that reflect our current views as to future events and financial performance with respect to our operations. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “aim,” “anticipate,” “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; increased operating costs; shortages of qualified personnel; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs; our ability to integrate and derive the expected benefits from our recent acquisitions; competition; decline in attendance at client facilities; unpredictability of sales and expenses due to contract terms and terminations; high leverage; claims relating to the provision of food services; costs of compliance with governmental regulations; liability associated with noncompliance with governmental regulations, including regulations pertaining to food services and the environment; and seasonality.

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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 and other significant instruments as of June 27, 2003, has not materially changed from September 27, 2002 (See Item 7A of the Annual Report on Form 10-K), with the exception of the interest rate swap agreements entered into in connection with the issuance of $300 million of 6.375% notes that mature on February 15, 2008, as described in Note 8 to the condensed consolidated financial statements.

ITEM 4. 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 of the end of the period covered by this report. Based on that evaluation, 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 proved 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.

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PART II - OTHER INFORMATION

ITEM 5. OTHER INFORMATION

ARAMARK Corporation’s (the “Company”) annual meeting of stockholders (“2003 Annual Meeting”) was held on February 4, 2003. At the 2003 Annual Meeting, the stockholders voted upon the election of four directors. The results of such vote were as follows:

	For	Withheld	BrokerNon-Votes
Name of nominee:
Patricia C. Barron	975,076,450	1,539,660	N/A
Robert J. Callander	976,508,010	108,100	N/A
Ronald R. Davenport	976,475,730	140,380	N/A
Ronald L. Sargent	976,498,010	118,100	N/A

The terms of the following directors of the Company continued after the 2003 Annual Meeting: Joseph Neubauer, Lawrence T. Babbio, Jr., Leonard S. Coleman, Jr., Thomas H. Kean, James E. Ksansnak, James E. Preston and Karl M. von der Heyden.

ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K

(a) —Exhibits:

3.1	Amended and Restated Certificate of Incorporation of ARAMARK Corporation.
10.1	Second Amendment to Stock Purchase Agreement, dated May 9, 2003, among Knowledge Schools, Inc., Knowledge Learning Corporation formerly known as Children’s Discovery Centers of America, Inc., ARAMARK Corporation, ARAMARK Organizational Services, Inc. and ARAMARK Educational Resources, Inc.
10.2	Agreement Relating to Employment and Post-Employment Competition with Timothy P. Cost.
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 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of L. Frederick Sutherland pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Reconciliation of non-GAAP financial measures.

(b) —Reports on Form 8-K:

On May 8, 2003, the Company filed a Form 8-K to furnish a document reflecting financial information adjusted to reflect the Company’s Educational Resources segment as a discontinued operation and a document explaining the Company’s revised earnings per share guidance. On May 8, 2003, the Company filed a second Form 8-K to furnish its earnings press release for the fiscal quarter ended March 28, 2003.

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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
August 11, 2003	/s/ JOHN M. LAFFERTY
	John M. Lafferty Senior Vice President, Controller and Chief Accounting Officer

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

ARAMARK CORPORATION

ARAMARK Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

(1) The present name of the Corporation is ARAMARK Corporation. The Corporation was originally incorporated under the name “ARAMARK Worldwide Corporation” and its original certificate of incorporation was filed with the office of the Secretary of the State of Delaware on June 28, 2001.

(2) This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the Delaware General Corporation Law (the “DGCL”).

(3) This Amended and Restated Certificate of Incorporation restates and integrates and further amends the certificate of incorporation of the Corporation, as heretofore amended, supplemented and/or restated (the “Certificate of Incorporation”).

(4) The text of the Certificate of Incorporation is amended and restated in its entirety as follows:

FIRST: NAME. The name of the Corporation is ARAMARK Corporation.

SECOND: ADDRESS. The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at this address is The Corporation Trust Company.

THIRD: PURPOSE. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

FOURTH: CAPITALIZATION. (A) The total number of shares of stock that the Corporation has authority to issue is 1,700,000,000, of which:

(i) 600,000,000 shares shall be shares of Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”);

(ii) 1,000,000,000 shares shall be shares of Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”); and

(iii) 100,000,000 shares shall be shares of Preferred Stock (the “Preferred Stock”), including 600,000 authorized shares of Series C Junior Participating Preferred Stock (the “Series C Preferred Stock”) and 20,000 authorized shares of Adjustable Rate Callable Nontransferable Series D Preferred Stock (the “Series D Preferred Stock”).

The Class A Common Stock and the Class B Common Stock are referred to collectively as the “Common Stock.” On the effective date of this Amended and Restated Certificate of Incorporation, each outstanding share of Class A-1 Common Stock, par value $0.01 per share, Class A-2 Common Stock, par value $0.01 per share and Class A-3 Common Stock, par value $0.01 per share shall be reclassified, changed and converted into a share of Class A Common Stock and each outstanding share of Class B-1 Common Stock, par value $0.01 per share, Class B-2 Common Stock, par value $0.01 per share, and Class B-3 Common Stock, par value $0.01 per share, shall be reclassified, changed and converted into a share of Class B Common Stock.

(B) The number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the votes entitled to be cast by the holders of the Common Stock, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the DGCL or any corresponding provision hereinafter enacted and no class shall be entitled to a separate class vote on any such increase or decrease.

FIFTH: COMMON STOCK.

The following is a statement of the relative powers, preferences and participating, optional or other special rights, and the qualifications, limitations and restrictions of the classes of Common Stock:

(1) General. Except as otherwise set forth in this Article Fifth, the relative powers, preferences and participating, optional or other special rights, and the qualifications, limitations or restrictions of each class of Common Stock shall be identical in all respects.

(2) Dividends; Stock Splits. Subject to the rights of the holders of Preferred Stock, holders of each class of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock of any corporation (other than the Common Stock of the Corporation and other than as set forth in the succeeding sentences) or property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor, and shall share equally on a per share basis in all such dividends and other distributions. If at any time a dividend or other distribution (collectively, a

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“share distribution”) payable in shares of Common Stock or any other securities of the Corporation or of any other person is to be made with respect to the Class A Common Stock or the Class B Common Stock, such share distribution may be declared and paid only as follows, and share distributions declared and paid as follows shall be deemed to be equal distributions for purposes of this paragraph:

(a) a share distribution consisting of (A) shares of Class A Common Stock or securities that are convertible into, exchangeable for or evidence the right to purchase shares of Class A Common Stock to holders of Class A Common Stock and (B) shares of Class B Common Stock or securities that are convertible into, exchangeable for or evidence the right to purchase shares of Class B Common Stock to holders of Class B Common Stock; or

(b) a share distribution consisting of shares of any class or series of securities of the Corporation or any other person other than Class A Common Stock or Class B Common Stock (and other than securities that are convertible into, exchangeable for or evidence the right to purchase shares of Class A Common Stock, or Class B Common Stock), either:

(A) on the basis of a distribution of identical securities, on an equal per share basis, to holders of shares of Class A Common Stock and Class B Common Stock; or

(B) on the basis of a distribution of one class or series of securities to holders of shares of Class A Common Stock and, on an equal per share basis, one class or series of securities to holders of shares of Class B Common Stock, provided that the securities so distributed (and, if applicable, the securities into which the distributed securities are convertible or for which they are exchangeable or which they evidence the right to purchase) do not differ in any respect other than their relative voting rights and related differences in designation, conversion and share distribution provisions; and provided further that (x) holders of shares of Class A Common Stock receive a class or series of securities having no more than 10 votes per share or convertible securities that are convertible into, exchangeable for or evidence the right to purchase securities with no more than 10 votes per share and having class voting rights identical to those for the shares of Class A Common Stock and (y) holders of shares of Class B Common Stock receive a class or series of securities having no more than one vote per share or convertible securities that are convertible into, exchangeable for or evidence the

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right to purchase securities with no more than one vote per share and having class voting rights identical to those for the shares of Class B Common Stock.

No class of Common Stock may be reclassified, subdivided or combined, unless the reclassification, subdivision or combination occurs simultaneously and in the same proportion for each class of Common Stock.

(3) Voting Rights.

(a) At every meeting of the stockholders of the Corporation in connection with the election of directors and all other matters submitted to a vote of stockholders: (i) every holder of record of shares of Class A Common Stock on the relevant record date shall be entitled to ten votes in person or by proxy for each share of Class A Common Stock registered in his or her name on the transfer books of the Corporation; and (ii) every holder of record of shares of Class B Common Stock on the relevant record date shall be entitled to one vote in person or by proxy for each share of Class B Common Stock registered in his or her name on the transfer books of the Corporation. Except as otherwise required by law or by this Article Fifth, the holders of each class of Common Stock shall vote together as a single class, on all matters with respect to which a vote of Stockholders of the Corporation is required under applicable law or under the Certificate of Incorporation of the Corporation or on which a vote of stockholders is otherwise duly called for by the Corporation, subject to the rights that may be conferred upon holders of Preferred Stock.

(b) Except as otherwise provided by law and by paragraph (3)(c) of this Article Fifth, the provisions of this Certificate of Incorporation shall not be modified, revised, altered or amended, repealed or rescinded, in whole or in part, without the approval of the holders of a majority of the votes entitled to be cast by the holders of each class of Common Stock, voting together as a single class; provided, however, that any proposal to modify, revise, alter or amend this Certificate of Incorporation in any manner that would alter or change the powers, preferences or special rights of the shares of any class of Common Stock so as to affect them adversely also will require the approval of the holders of a majority of the votes entitled to be cast by the holders of the shares of the class so affected by the proposed amendment, voting separately as a class. An increase in the authorized number of shares of any class or classes of stock of the Corporation or creation, authorization or issuance of any securities convertible into, or warrants, options or

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similar rights to purchase, acquire or receive, shares of any such class or classes of stock, shall be deemed not to affect adversely the powers, preferences or special rights of the shares of any class of Common Stock.

(c) Notwithstanding anything contained in this Certificate of Incorporation to the contrary or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class of the capital stock required by law, Articles Eighth, Ninth, Tenth and Eleventh shall not be modified, revised, altered or amended, repealed or rescinded, in whole or in part, without the affirmative vote of the holders of at least 80% of the votes entitled to be cast by the holders of the Common Stock, voting together as a single class.

(d) The Corporation may, as a condition to counting the votes cast by any holder of shares of Class A Common Stock at any annual or special meeting of stockholders or for any other purpose, require the furnishing of such affidavits or other proof as it may reasonably request to establish that the shares of Class A Common Stock held by such holder have not, pursuant to the provisions of paragraphs 6 or 7 of this Article Fifth, been converted into shares of Class B Common Stock.

(4) Liquidation. In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment in full of the amounts required to be paid to the holders of Preferred Stock, the remaining assets and funds of the Corporation shall be distributed pro rata to the holders of shares of Common Stock, without regard to class. For purposes of this paragraph (4), none of the following shall be considered a liquidation, dissolution or winding up of the Corporation within the meaning of this section: (a) a consolidation or merger of the Corporation with or into any other corporation or other entity; (b) a merger of any other corporation or other entity into the Corporation (whether or not the Corporation is the entity surviving the consolidation or merger); (c) a reorganization of the Corporation; (d) the purchase or redemption of all or part of the outstanding shares of any class or classes of the Corporation; (e) a sale or transfer of all or any part of the assets of the Corporation; or (f) a share exchange to which the Corporation is a party.

(5) Reorganization, Consolidation and Merger. In case of any reorganization or any consolidation of the Corporation with one or more other corporations or a merger of the Corporation with another corporation, each holder of a share of Common Stock of any class shall be entitled to receive with respect to that share the same kind and amount of shares of stock and other securities and property (including cash)

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receivable upon the reorganization, consolidation or merger by a holder of a share of any other class of Common Stock; provided that, if such consideration shall consist in any part of voting securities (or of options or warrants to purchase, or of securities convertible into or exchangeable for, voting securities), the holders of shares of Class A Common Stock may receive, on a per share basis, voting securities with 10 times the number of votes per share as those voting securities to be received by the holders of shares of Class B Common Stock (or options or warrants to purchase, or securities convertible into or exchangeable for, voting securities with 10 times the number of votes per share as those voting securities issuable upon exercise of the options or warrants to be received by the holders of the shares of Class B Common Stock, or into which the convertible or exchangeable securities to be received by the holders of the shares of Class B Common Stock may be converted or exchanged).

(6) Optional Conversion.

(a) Conversion. Each record holder of shares of Class A Common Stock may convert any or all of such shares into an equal number of shares of Class B Common Stock.

(b) Manner of Optional Conversion. A record holder of shares of Class A Common Stock may effect a voluntary conversion of any or all of those shares in accordance with this paragraph (6) by presenting to the Corporation the certificates, if any, for the number of shares to be converted, any required tax transfer stamps and a written notice by the record holder to the Corporation stating that such record holder desires to convert such shares into the same number of shares of Class B Common Stock and requesting that the Corporation issue such shares of Class B Common Stock to persons named therein, setting forth the number of shares of Class B Common Stock to be issued to each such person and the denominations in which the certificates therefor, if any, are to be issued. To the extent permitted by law, such a voluntary conversion shall be deemed to have been effected at the close of business on the date of surrender of certificates, if any, or the date of receipt by the Corporation of the notice of conversion, if the shares to be converted are uncertificated. Shares of Class B Common Stock may not be converted into any other class of Common Stock.

(7) Automatic Conversion; Non-Conversion.

(a) Transfers. Upon any direct or indirect Transfer of (i) record ownership of shares of Class A Common Stock other than in a Non-Conversion Transfer, or (ii) beneficial ownership of shares of Class A Common Stock if, had such transfer also been a transfer of

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record ownership of such shares of Class A Common Stock, such transfer would not have been a Non-Conversion Transfer, each share of Class A Common Stock so Transferred shall be and be deemed to be, automatically and without further act on the part of the holder thereof or the Corporation, converted into a share of Class B Common Stock. In such case, stock certificates, if any, formerly representing each share of Class A Common Stock shall thereupon and thereafter be deemed to represent such number of shares of Class B Common Stock into which such shares of Class A Common Stock could be converted pursuant to the terms hereof. Upon a Non-Conversion Transfer, there shall be no conversion.

(b) Upon Termination or Cessation of Employment. In addition, notwithstanding anything to the contrary herein, each share of Class A Common Stock held by an employee of the Corporation or any of its subsidiaries or affiliated companies (including joint ventures) or by a Transferee of such employee (including transferees who first acquired their shares of class B common stock of Former ARAMARK from employees prior to the merger of Former ARAMARK with and into the Corporation, pursuant to which merger such shares of Former ARAMARK class B common stock were converted into shares of Class A Common Stock) shall be and be deemed to be, in the event of the termination or cessation of the employment relationship between such employee and the Corporation, any of its subsidiaries and/or any of its affiliated companies (including joint ventures), automatically and without further act on the part of the holder thereof or the Corporation, converted into one share of Class B Common Stock on the date of such termination or cessation of employment.

(8) Manner of Transfer. Transfers of shares of Class A Common Stock and Class B Common Stock shall be registered on the books of the Corporation, and a new certificate therefor, if any, issued, upon presentation at the office of the Secretary of the Corporation (or at such additional place or places as may from time to time be designated by the Secretary of the Corporation) of the certificate, if any, for the shares, in proper form for Transfer, and such documentation as shall be reasonably satisfactory to the Corporation, including documentation of compliance with this Article Fifth.

(9) Manner of Conversion. Any person (other than a transferee in a Non-Conversion Transfer) who takes shares of Class A Common Stock in a Transfer that complies with the provisions of this Article Fifth may treat the endorsement on the certificate, if any, representing such shares, or the instrument of Transfer accompanying such shares, as authorizing such person on behalf of the Transferor to convert the shares in the manner provided in paragraph (7) of this Article Fifth for the purpose of

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registering the Transfer to such person of the shares of Class B Common Stock issuable upon conversion, and to give on behalf of the Transferor the written notice of conversion above required, and may convert such shares of Class A Common Stock accordingly.

(10) Treatment of Dividend upon Conversion. Upon any conversion of shares of Class A Common Stock into shares of Class B Common Stock pursuant to the provisions of paragraph (6) or paragraph (7), any dividend that has been declared on the shares of Class A Common Stock so converted for which the record date is prior to the conversion and the payment date is subsequent to the conversion shall be deemed to have been declared, and shall be payable, with respect to the shares of Class B Common Stock into or for which the shares of Class A Common Stock are so converted, and any such dividend that is declared on the shares of Class A Common Stock payable in shares of Class A Common Stock shall be deemed to have been declared, and shall be payable, in shares of Class B Common Stock.

(11) Reserve. The Corporation at all times shall reserve and keep available, out of its authorized but unissued Class B Common Stock at least the number of shares of Class B Common Stock that would become issuable upon the conversion of all shares of Class A Common Stock then outstanding.

(12) No Liability. In connection with any Transfer or conversion of any shares of any class of Common Stock pursuant to or as permitted by the provisions of this Article Fifth, or in connection with the making of any determination referred to in this Article Fifth, neither the Corporation nor any director, officer, employee or agent of the Corporation shall be liable in any manner for any action taken or omitted in good faith.

(13) Definitions. For purposes of this Article Fifth, the following terms have the following meanings:

(i) “Beneficial ownership” (including, with a correlative meaning, the terms “beneficially own” and “beneficial owner”) shall have the meaning assigned to such term in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, except that (a) a person shall be deemed to have “beneficial ownership” of all shares that such person has the right to acquire, whether such right is exercisable immediately or only after passage of time and (b) a person shall not be deemed to have “beneficial ownership” of shares pursuant to a voting, tender or like agreement or arrangement in connection with such shares, where such agreement or arrangement (1) is entered into by a holder or holders of Common Stock or Preferred Stock and one or more third parties in connection with a potential business combination involving the Corporation and (2) has been

8

approved by the Board of Directors of the Corporation prior to the entering into of such agreement or arrangement.

(ii) “Former ARAMARK” means the Delaware corporation of the same name as the Corporation, which corporation merged with and into its wholly owned subsidiary, ARAMARK Worldwide Corporation, with the Corporation as the surviving corporation.

(iii) “Initial Public Offering” means the initial public offering of the Class B Common Stock.

(iv) “Non-Conversion Transfer” means any of the following Transfers of shares of Class A Common Stock:

(a) Transfers to and among a stockholder’s spouse, children, grandchildren, parents, siblings, cousins, nieces, nephews, sons-in-law, daughters-in-law and entities (including trusts, partnerships and limited liability companies) established for estate planning or educational purposes;

(b) bona fide pledges to the Corporation, a commercial bank, savings and loan institution or any other lending or financial institution as security for indebtedness of the holder of the shares of Class A Common Stock being pledged; provided that the pledgee shall be bound by the applicable transfer restrictions; and

(c) Transfers approved as Non-Conversion Transfers by the Board of Directors of the Corporation prior to the Transfer.

(v) “Transfer” (including, with a correlative meaning, the terms “Transferred” and “Transferee”) means any sale, pledge, gift, assignment or other transfer of any share of Class A Common Stock or Class B Common Stock, including any sale, pledge, gift, assignment or other direct or indirect transfer or disposal of: (1) any shares of Class A Common Stock or Class B Common Stock; (2) any securities convertible into or exercisable or exchangeable for Class A Common Stock or Class B Common Stock; or (3) any shares of Class B Common Stock into which the shares of Class A Common Stock are convertible; provided, however, that the entering into of a voting, tender or like agreement or arrangement in connection with any such shares or securities shall not be deemed to constitute a Transfer where such agreement or arrangement (1) is entered into by a holder or holders of such shares or securities and one or more third parties in connection with a potential business combination involving the Corporation and (2) has been approved by the Board of Directors of the Corporation prior to the entering into of such agreement or arrangement.

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SIXTH: PREFERRED STOCK.

(A) The Board of Directors shall have authority to issue shares of Preferred Stock from time to time on such terms as it may determine, and to divide the Preferred Stock into one or more series. In connection with the creation of any such series, the Board of Directors shall have authority to fix by the resolution or resolutions providing for the issue of shares thereof the designations, voting powers, preferences and relative participating, optional or other special rights of such series, and the qualifications, limitations or restrictions thereof, to the full extent now or hereafter permitted by law.

(B) The following is a statement of the powers, preferences, rights, qualifications, limitations and restrictions of the Series D Preferred Stock:

(1) Designation. The Series D Preferred Stock shall consist of 20,000 shares. The number of authorized shares of Series D Preferred Stock may be increased by resolution of the Board of Directors.

(2) Rank.

(a) To the extent and the manner provided in this Article Sixth, the Series D Preferred Stock shall, with respect to dividend rights and rights on liquidation, rank (i) junior to or on parity with, as the case may be, any other stock of the Corporation, the terms of which shall specifically provide that such stock shall rank senior to, or on parity with, as the case may be, the Series D Preferred Stock with respect to dividend rights or rights on liquidation or both, and (ii) senior to any other stock of the Corporation.

(b) The following terms as used in this Article Sixth shall be deemed to have the meaning set forth in this section.

(i) The term “Participating Stock” shall mean the Common Stock and any other stock of the Corporation of any class which has the right to participate in the distribution of either earnings or assets of the Corporation without limit as to the amount or percentage.

(ii) The term “Parity Stock” with respect to Series D Preferred Stock shall mean the Series D Preferred Stock and all other stock of the Corporation ranking equally therewith as to the payment of dividends or the distribution of assets upon liquidation. The term “Dividend Parity Stock” with respect to Series D Preferred Stock shall mean the Series D Preferred Stock and all other stock of the Corporation ranking equally therewith as to the payment of dividends. The term “Liquidation Parity Stock” with respect to Series D Preferred Stock mean the Series D Preferred Stock

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and all other stock of the Corporation ranking equally therewith as to distribution of assets upon liquidation.

(iii) The term “Junior Stock” with respect to Series D Preferred Stock shall mean the Participating Stock and all other stock of the Corporation ranking junior thereto as to the payment of dividends and the distribution of assets upon liquidation. The term “Dividend Junior Stock” with respect to Series D Preferred Stock shall mean the Participating Stock and all other stock of the Corporation ranking junior thereto as to the payment of dividends. The term “Liquidation Junior Stock” with respect to Series D Preferred Stock shall mean the Participating Stock and all other stock of the Corporation ranking junior thereto as to distribution of assets upon liquidation.

(iv) The term “Senior Stock” with respect to Series D Preferred Stock shall mean all stock of the Corporation ranking senior thereto as to the payment of dividends or distribution of assets upon liquidation.

(3) Dividends.

(a) The holders of record of Series D Preferred Stock shall be entitled to receive, as and if declared by the Board of Directors, cumulative cash dividends thereon at the per annum rate per share equal to the Established Dividend Rate (as defined in paragraph (c)), and no more, but only out of funds legally available for the payment of such distributions under the DGCL. Dividends on the Series D Preferred Stock shall not be payable unless and until declared by the Board of Directors. Dividends shall accrue from the date of original issuance. Accumulations of dividends shall not bear interest.

(b) Unless dividends that have been declared and are payable upon the Series D Preferred Stock have been paid, no dividend or other distribution (except in Junior Stock) shall be declared or paid on Dividend Junior Stock and no amount shall be set aside for or applied to the redemption, purchase or other acquisition of (i) any Dividend Junior Stock or Liquidation Junior Stock other than by exchange therefor of Junior Stock or out of the proceeds of a substantially concurrent sale of shares of Junior Stock or (ii) any Parity Stock except in accordance with a purchase or exchange offer made simultaneously by the Corporation to all holders of record of Parity Stock which, considering the annual dividend rates and the other relative rights and preferences of such shares, in the opinion of the Board of Directors (whose determination shall be

11

conclusive), will result in fair and equitable treatment among all such shares.

(c) The “Established Dividend Rate” shall initially be $30.00, and shall be reset as provided in this paragraph. On each December 16, beginning December 16, 2001 and continuing so long as any shares of Series D Preferred Stock shall be outstanding, the Established Dividend Rate shall be reset as a rate equal to $1,000 multiplied by 50% of the One Year Treasury Rate that shall have been in effect at the close of business on the December 1 next preceding (or if such December 1 shall not have been a business day, the business day next preceding such December 1), rounded up to the nearest $1.00; provided, however, that the established Dividend Rate shall in no event be greater than $50.00. For purposes of the preceding sentence, the “One Year Treasury Rate” shall mean the rate for direct obligations of the United States having a constant maturity of 1-year, as published in H.15(519) under the heading “Treasury Constant Maturities”, or, if not so published by such December 16, such rate as determined in good faith by the Corporation, which determination absent manifest error shall be conclusive. The Corporation shall file with the duly appointed transfer agent for the Series D Preferred Stock a certificate stating the new Established Dividend Rate determined as provided in this paragraph and showing the computation thereof, and will cause a notice stating the new Established Dividend Rate and the computation thereof to be mailed to the holders of shares of Series D Preferred Stock.

(4) Liquidation Rights.

(a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of Series D Preferred Stock shall be entitled to receive from the assets of the Corporation, payment in cash, of $1,000 per share, plus a further amount equal to unpaid cumulative dividends on Series D Preferred Stock accrued to the date when such payments shall be made available to the holders thereof, and no more, before any amount shall be paid or set aside for, or any distribution of assets shall be made to the holders of Liquidation Junior Stock. If, upon such liquidation, dissolution or winding up, the amounts available for distribution to the holders of all Liquidation Parity Stock shall be insufficient to permit the payment in full to such holders of the preferential amounts to which they are entitled, then such amounts shall be paid ratably among the shares of Liquidation Parity Stock in accordance with the respective preferential amounts (including unpaid cumulative dividends, if any) payable with respect thereto if paid in full.

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(b) None of the following shall be considered a liquidation, dissolution or winding up of the Corporation within the meaning of this section: (1) a consolidation or merger of the Corporation with or into any other corporation or entity; (2) a merger of any other corporation or entity into the Corporation (whether or not the Corporation is the entity surviving the consolidation or merger); (3) a reorganization of the Corporation; (4) the purchase or redemption of all or part of the outstanding shares of any class or classes of the Corporation; (5) a sale or transfer of all or any part of the assets of the Corporation; or (6) a share exchange to which the Corporation is a party.

(5) Redemption.

(a) The Series D Preferred Stock may be called for redemption and redeemed at the option of the Corporation by resolution of the Board of Directors, in whole at any time or in part at any time or from time to time upon the notice hereinafter provided for in paragraph (c), by the payment therefor of the redemption price per share of $1,000 plus an amount equal to the accrued and unpaid cumulative dividends thereon to the date fixed by the Board of Directors as the redemption date. In addition, the Corporation may so call for redemption at any time all, but not less than all, of the shares of Series D Preferred Stock held by any person.

(b) There is no mandatory sinking fund for, or other required redemption of, the Series D Preferred Stock.

(c) Manner of Redemption.

(i) If less than all of the outstanding shares of Series D Preferred Stock shall be called for redemption (and such redemption is not pursuant to the second sentence of paragraph (a)), the particular shares to be redeemed shall be selected by lot or by such other equitable manner as may be prescribed by resolution of the Board of Directors.

(ii) Notice of redemption of any shares of Series D Preferred Stock shall be given by the Corporation by first-class mail, not less than 10 nor more than 60 days prior to the date fixed by the Board of Directors of the Corporation for redemption (the “redemption date”), to the holders of record of the shares to be redeemed at their respective addresses then appearing on the records of the Corporation. The notice of the redemption shall state: (1) the redemption date; (2) the redemption price; (3) if less than all outstanding shares of Series D Preferred Stock of the

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holder are to be redeemed, the identification of the shares of Series D Preferred Stock to be redeemed; (4) that dividends on the shares to be redeemed shall cease to accrue on the redemption date; and (5) the place or places where such shares of Series D Preferred Stock to be redeemed are to be surrendered for payment of the redemption price.

(iii) Notice having been mailed as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the redemption price of the shares called for redemption), dividends shall cease to accrue, and from and after the redemption date or such earlier date as funds shall be set aside for payment of the redemption price (unless default shall be made by the Corporation in providing money for the payment of the redemption price of the shares called for redemption) said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the redemption price) shall cease. Upon surrender in accordance with said notice of the certificates, if any, for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors of the Corporation shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the redemption price aforesaid.

(iv) Shares of Series D Preferred Stock redeemed by the Corporation shall be restored to the status of authorized and unissued shares of Preferred Stock, undesignated as to series, and, except as otherwise provided by the express terms of any outstanding series, may be reissued by the Corporation as shares of one or more series of Preferred Stock.

(6) Voting Rights.

(a) Except as expressly provided to the contrary in this Article Sixth or as otherwise required by law, the holders of Series D Preferred Stock shall have no right to vote at, or to participate in any meeting of stockholders of the Corporation, or to receive any notice of such meeting.

(b) Rights Upon Dividend Arrearage.

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(i) In the event dividends that have been declared and are payable upon the Series D Preferred Stock shall be in arrears, the number of directors constituting the full board shall be increased by two, and the holders of the Series D Preferred Stock voting noncumulatively and separately as a single series, shall be entitled to elect two members of the Board of Directors of the Corporation at the next annual meeting of stockholders of the Corporation or at a special meeting called as hereinafter provided in this section. Such voting rights of the holders of Series D Preferred Stock shall continue until all declared and unpaid dividends thereon shall have been paid in full, whereupon such special voting rights of the holders of Series D Preferred Stock shall cease (and the respective terms of the two additional directors shall thereupon expire and the number of directors constituting the full board shall be decreased by two) subject to being again revived from time to time upon the recurrence of the conditions described in this section as giving rise thereto.

(ii) At any time when such right of holders of Series D Preferred Stock to elect two additional directors shall have so vested, the Corporation may, and upon the written request of the holders of record of not less than 10% of the Series D Preferred Stock then outstanding shall, call a special meeting of holders of such Series D Preferred Stock for the election of directors. In the case of such a written request, such special meeting shall be held within 60 days after the delivery of such request, and, in either case, at the place and upon the notice provided by law and in the bylaws of the Corporation; except that the Corporation shall not be required to call such a special meeting if such request is received less than 120 days before the date fixed for the next ensuing annual meeting of stockholders of the Corporation; provided, that the holders of Series D Preferred Stock receive notice of such meeting and their right to vote thereat.

(iii) Whenever the number of directors of the Corporation shall have been increased by two as provided in this section, the number as so increased may thereafter be further increased or decreased in such manner as may be permitted by the bylaws of the Corporation and without the vote of the holders of Series D Preferred Stock. No such action shall impair the right of the holders of Series D Preferred Stock to elect and to be represented by two directors as provided in this section.

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(iv) The two directors elected as provided in this section shall serve until the next annual meeting of stockholders of the Corporation and until their respective successors shall be elected and qualified or the earlier expiration of their terms as provided in this section. No such director may be removed without the vote or consent of holders of a majority of the shares of Series D Preferred Stock. If, prior to the expiration of the term of any such director, a vacancy in the office of such director shall occur, such vacancy shall, until the expiration of such term in each case be filled by appointment made by the remaining director elected as provided in this section.

(7) Restrictions on Transfer. The shares of Series D Preferred Stock shall not be transferable (other than by will or the laws of descent), except that such shares may be transferred with the consent of the Board of Directors of the Corporation.

(8) No Conversion Rights. The holders of shares of Series D Preferred Stock shall not have the right to convert such shares into other securities of the Corporation.

SEVENTH: BOARD OF DIRECTORS. Subject to the rights of holders of Preferred Stock to elect additional directors under certain circumstances, the Corporation shall be governed in accordance with the following provisions:

(A) The Board of Directors of the Corporation shall consist of not less than seven and not more than fifteen members. The exact number of directors within such minimum and maximum shall be fixed solely by the Board of Directors. The directors shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, one class to hold office initially for a term expiring at the Annual Meeting of Stockholders held in 2002, another class to hold office initially for a term expiring at the Annual Meeting of Stockholders held in 2003, and another class to hold office initially for a term expiring at the Annual Meeting of Stockholders held in 2004, with the members of each class to hold office until their successor have been duly elected and qualified. At each Annual Meeting of Stockholders, the successors to the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the Annual Meeting of Stockholders held in the third year following the year of their election and until their successors have been duly elected and qualified.

(B) Advance notice of nominations for the election of directors, other than by the Board of Directors or a duly authorized committee thereof or any authorized officer of the Corporation to whom the Board of Directors or such committee shall have delegated such authority, and information concerning nominees, shall be given in the manner provided in the by-laws.

(C) Newly created directorships resulting from any increase in the authorized number of directors and any vacancies on the Board of Directors resulting from death, resignation,

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retirement, disqualification, removal from office or other cause shall be filled by a majority vote of the directors then in office, and directors so chosen shall hold office for a term expiring at the next Annual Meeting of Stockholders at which the term of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

EIGHTH: BY-LAWS. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter, amend and repeal the by-laws of the Corporation, without the assent or vote of the stockholders, in any manner not inconsistent with the laws of the State of Delaware or this Certificate of Incorporation of the Corporation. The stockholders may not amend the by-laws of the Corporation without the affirmative vote of the holders of at least 80% of the votes entitled to be cast by the holders of the Common Stock, voting together as a single class.

NINTH: INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer or trustee of another corporation, or as its representative in a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, trustee or representative or in any other capacity while serving as a director, officer, trustee or representative, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in this Article Ninth with respect to proceedings to enforce rights to indemnification and “advancement of expenses” (as defined below), the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

In addition to the right to indemnification conferred in this Article Ninth, an indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article Ninth or otherwise.

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If a claim under this Article Ninth is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article Ninth or otherwise shall be on the Corporation.

The rights to indemnification and to the advancement of expenses conferred in this Article Ninth shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation’s Certificate of Incorporation, by-laws, agreement, vote of stockholders or directors or otherwise.

The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article Ninth with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

The rights conferred upon indemnitees in this Article Ninth shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer or trustee and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article Ninth that adversely affects any right of an indemnitee or its

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successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

TENTH: LIMITATION OF DIRECTORS’ LIABILITY. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Article Tenth shall be prospective only, and shall not adversely affect any elimination or limitation of the personal liability of a director of the Corporation existing at the time of such repeal or modification.

ELEVENTH: MEETINGS OF STOCKHOLDERS. Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. Special meetings of stockholders of the Corporation may be called only by the Chairman of the Board of Directors or by the Board of Directors pursuant to a resolution. Business transacted at any special meeting of stockholders shall be confined to the purpose or purposes of the meeting as stated in the notice of the meeting.

TWELFTH: CORPORATE ACTIONS. All rights to vote and all voting power shall be vested exclusively in the holders of Common Stock, except as otherwise expressly provided by the Board of Directors in connection with the issuance of any shares of Preferred Stock pursuant to Article Sixth of this Certificate of Incorporation or as otherwise expressly required by the law of the State of Delaware. At every meeting of stockholders duly called and held at which a quorum is present (i) in all matters other than the election of directors, a majority of the votes that could be cast at the meeting upon a given question and (ii) in the case of the election of directors, a plurality of the votes that could be cast at the meeting upon the election, by the holders who are present in person or by proxy, shall be necessary, in addition to any vote or other action that may be expressly required by the provisions of this Certificate of Incorporation or by the law of the State of Delaware, to decide the question or election.

THIRTEENTH: QUORUM. Except as otherwise provided by law, the presence, in person or by proxy, of the holders of record of shares of capital stock of the Corporation entitling the holders thereof to cast a majority of the votes entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote on the question shall constitute a quorum at all meetings of the stockholders, and every reference in this Certificate of Incorporation to a majority or other proportion of capital stock (or the holders thereof) for the purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital stock.

Except as otherwise provided by law, the presence, in person or by proxy, of the holders of record of shares of capital stock of the Corporation entitling the holders thereof to cast a majority of the votes entitled to be cast by the holders of shares of capital stock of the

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Corporation entitled to vote shall constitute a quorum at all meetings of the stockholders, and every reference in this Certificate of Incorporation to a majority or other proportion of capital stock (or the holders thereof) for the purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital stock.

If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the voting rights of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time.

If a notice of any adjourned meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held with those present constituting a quorum, then except as otherwise required by law, those present at such adjourned meeting, provided that they represent at least one third of the voting rights of the shares entitled to vote at such meeting shall constitute a quorum, and all matters shall be determined by a majority of the votes cast at such meeting.

FOURTEENTH: COMPROMISES/ARRANGEMENTS WITH CREDITORS / STOCKHOLDERS. Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed by the Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said Court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all stockholders or class of stockholders of the Corporation, as the case may be, and also on the Corporation.

FIFTEENTH: AMENDMENT. Subject to the provisions hereof, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

*  *  *

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(5) This Amended and Restated Certificate of Incorporation shall become effective at 9:00 am on June 8, 2003.

IN WITNESS WHEREOF, this Certificate of Incorporation which has been duly adopted in accordance with Sections 242 and 245 of the Delaware General Corporation Law, has been executed by a duly authorized officer on this 5th day of June, 2003.

ARAMARK Corporation
By:	/s/ Bart J. Colli
	Name:	Bart J. Colli
	Title:	Executive Vice President, General Counsel and Secretary

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EX-10.1

Exhibit 10.1

SECOND AMENDMENT

TO

STOCK PURCHASE AGREEMENT

SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of May 9, 2003 (“Second Amendment”), by and among Knowledge Schools, Inc., a Delaware corporation (“Holdings”), Knowledge Learning Corporation formerly known as Children’s Discovery Centers of America, Inc., a Delaware corporation, (the “Buyer”), and ARAMARK Corporation, a Delaware corporation (the “Parent”), ARAMARK Organizational Services, Inc., a Delaware corporation (the “Seller”), and ARAMARK Educational Resources, Inc., a Delaware corporation (the “Company”). The Buyer, the Parent, the Seller and the Company are sometimes referred to herein collectively as the “Parties” or individually as a “Party.”

PRELIMINARY STATEMENT:

WHEREAS, the Parties have entered into a Stock Purchase Agreement, dated as of March 3, 2003 as amended by a first amendment to the Stock Purchase Agreement dated March 14, 2003 (as so amended, the “Stock Purchase Agreement”), providing, among other things, for the sale by the Seller and purchase by the Buyer of all of the outstanding shares of the common stock, par value $0.01 per share (the “Company Shares”), of the Company; and

WHEREAS, each of Parent and Buyer desires to amend and supplement the Stock Purchase Agreement in certain respects as described in this Second Amendment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is hereby agreed between Parent and Buyer as follows:

1. Definitions.

Except as otherwise indicated herein or unless the context otherwise requires, capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Purchase Agreement.

2. Amendment of Definitions.

a. The definitions of “Closing Balance Sheet,” “Closing Working Capital” and “Estimated Closing Working Capital” in Section 1 of the Stock Purchase Agreement shall be deleted in their entirety.

b. Section 1 is hereby amended and supplemented by adding the following definitions in the appropriate place in alphabetical order:

“April 25 Balance Sheet” has the meaning set forth in Section 2(e)(i) below.”

“April 25 Working Capital” has the meaning set forth in Section 2(e)(i) below.”

3. Amendment to Section 2(b).

Section 2(b) is hereby amended and supplemented by adding the following sentence at the end thereof:

“Immediately following the issuance of the Note on the Closing Date, the Buyer shall cause Knowledge Universe Learning Corp., a Delaware corporation (“KULC”), to purchase the Note from the Seller for $25,000,000 in cash.”

4. Amendment to Section 2(d).

Section 2(d) is hereby amended and supplemented by adding the following new subsections (iii), (iv) and (v):

“(iii) At the Closing immediately following the issuance of the Note and the Warrant, the Seller shall deliver to the Buyer (for delivery to KULC) the Note and the Warrant accompanied by an executed Note and Warrant Purchase Agreement in the form of Exhibit [    ] and Buyer shall cause KULC to deliver to Seller Twenty-Five Million Dollars ($25,000,000) by wire transfer of immediately available funds to accounts specified by the Seller.

(iv) At the Closing immediately following payment of the purchase price for the Company Shares and the Note and the Warrant to Seller, Seller shall pay $114,504.17 in satisfaction of the IRB obligation of the Company owed to Riggs Bank.

(v) At the Closing immediately following payment of the purchase price for the Company Shares and the Note and the Warrant to Seller, Seller shall pay $2,046,039.39 to Buyer which amount represents the proceeds from the sale of CWLC #0416 Lindley Oaks.”

5. Amendment of Section 2(e).

Section 2(e) is hereby amended, supplemented and restated in its entirety to read as follows:

“(i) Working Capital Adjustment. Not later than ten (10) days after the Closing Date, the Parent and the Seller shall deliver to Buyer a consolidated balance sheet of the Company and its Subsidiaries as of April 25, 2003 (the “April 25 Balance Sheet”) showing the amount of the Working Capital of the Company as of April 25, 2003 (the “April 25 Working Capital”), together with a reasonably detailed explanation of the calculation thereof. The April 25 Balance Sheet shall be prepared in accordance with GAAP and on a basis consistent with the preparation of the Most Recent Balance Sheet. Following the Closing Date, the Company and Buyer shall provide to Parent and the Seller and Parent and Seller’s accountants full access to the Books and Records of the Company and its Subsidiaries, to the extent reasonably related to the preparation of the April 25 Balance Sheet. If the April 25 Working Capital is greater than negative $26,029,000 (e.g., negative $25,000,000), then within five (5) days after such delivery,

the Buyer shall pay to the Seller the amount of such difference in cash. If the April 25 Working Capital is less than negative $28,029,000 (e.g., negative $29,000,000), then within five (5) days after such delivery, the Seller shall pay to the Buyer the amount of such difference in cash. Any payment made pursuant to this § 2(e)(i) is referred to as the “Interim Adjustment.” As examples of the operation of this § 2(e)(i): (i) if April 25 Working Capital is negative $24,029,000, the Buyer would be required to pay the Seller $2,000,000 as an Interim Adjustment; and (ii) if April 25 Working Capital is negative $30,029,000, the Seller would be required to pay the Buyer $2,000,000 as an Interim Adjustment.

(ii) [Intentionally Omitted.]

(iii) Disputes. If Buyer disagrees with the calculation of the April 25 Working Capital or any element of the April 25 Balance Sheet relevant thereto, it shall notify Parent of such disagreement in writing within forty-five (45) days after receipt of the April 25 Balance Sheet, which notice shall set forth in detail the particulars of such disagreement. In the event that Buyer does not provide such a notice of disagreement within such forty-five (45) day period, Buyer shall be deemed to have accepted the April 25 Balance Sheet and the calculation of the April 25 Working Capital delivered by Parent, which shall be final, binding and conclusive for all purposes hereunder. In the event any such notice of disagreement is timely provided by Buyer, the Buyer and the Parent and the Seller shall use their commercially reasonable efforts for a period of forty-five (45) days (or such longer period as they may mutually agree) to resolve any disagreements with respect to the calculation of the April 25 Working Capital. If, at the end of such period, they are unable to resolve such disagreements, then PricewaterhouseCoopers LLP (or such other independent accounting firm of recognized national or regional standing as may be mutually selected by the Buyer and the Parent and the Seller) (the “Accounting Arbitrator”) shall resolve any remaining disagreements. The Accounting Arbitrator shall determine as promptly as practicable, but in any event within forty-five (45) days of the date on which such dispute is referred to the Accounting Arbitrator, based solely on written submissions forwarded by the Buyer and the Parent and the Seller to the Accounting Arbitrator within ten (10) days following the Accounting Arbitrator’s selection, whether or not the calculation of the April 25 Working Capital was prepared in accordance with the standards set forth in this §2(e) and (only with respect to the remaining disagreements submitted to the Accounting Arbitrator) whether and to what extent (if any) the April 25 Working Capital determination requires adjustment. The Accounting Arbitrator shall allocate its costs and expenses between the Buyer and the Seller based upon the percentage which the portion of the contested amount not awarded to each party bears to the amount actually contested by such party. In acting hereunder, the Accounting Arbitrator shall be entitled to the privileges and immunities of arbitrators. The determination of the Accounting Arbitrator shall be final, conclusive and binding on the parties. The date on which the April 25 Working Capital is finally determined in accordance with this §2(e) is referred to as the “Determination Date.”

(iv) Payment. The “Working Capital Adjustment Amount,” which may be positive or negative, shall mean, as applicable (i) if no Interim Adjustment was made

pursuant to §2(e)(i), the difference between the April 25 Working Capital and the Base Working Capital, (ii) if the Buyer paid the Seller an Interim Adjustment pursuant to §2(e)(i), the difference between (A) the April 25 Working Capital less the Interim Adjustment and (B) the Base Working Capital, or (iii) if the Seller paid the Buyer an Interim Adjustment pursuant to §2(e)(i), the difference between (A) the April 25 Working Capital plus the Interim Adjustment, and (B) the Base Working Capital. The “Base Working Capital” shall be negative $27,029,000. If the April 25 Working Capital (as adjusted for an Interim Adjustment, as applicable, as provided above) is greater than the Base Working Capital (such difference, the “Increase Amount”), then within five (5) days after the Determination Date, the Buyer shall pay to the Seller an amount equal to the Increase Amount, together with interest thereon calculated from the Closing Date to the date of payment at the Applicable Rate. If the Base Working Capital is greater than the April 25 Working Capital (as adjusted for an Interim Adjustment, as applicable, as provided above) (such difference, the “Deficit Amount”), then within five (5) days after the Determination Date the Parent and Seller shall pay to the Buyer an amount equal to the Deficit Amount, together with interest thereon calculated from the Closing Date to the date of payment at the Applicable Rate. As examples of the operation of this § 2(e)(i): (i) if no Interim Adjustment was made and if April 25 Working Capital is negative $25,029,000, then the Buyer shall pay the Seller $2,000,000 as the Increase Amount; (ii) if no Interim Adjustment was made and if April 25 Working Capital is negative $29,029,000, then the Seller shall pay the Buyer $2,000,000 as the Deficit Amount; (iii) if the Buyer paid the Seller an Interim Adjustment of $1,000,000 pursuant to §2(e)(i) and if April 25 Working Capital is negative $25,029,000, then the Buyer shall pay the Seller $1,000,000 as the Increase Amount; (iv) if the Buyer paid the Seller an Interim Adjustment of $2,000,000 pursuant to §2(e)(i) and if April 25 Working Capital is negative $27,029,000, then the Seller shall pay the Buyer $2,000,000 as the Deficit Amount; (v) if the Seller paid the Buyer an Interim Adjustment of $2,000,000 pursuant to §2(e)(i) and if April 25 Working Capital is negative $30,029,000, then the Seller shall pay the Buyer $1,000,000 as the Deficit Amount; and (vi) if the Seller paid the Buyer an Interim Adjustment of $1,000,000 pursuant to §2(e)(i) and if April 25 Working Capital is negative $26,029,000, then Buyer shall pay the Seller $2,000,000 as the Increase Amount.

(v) The parties hereto represent and warrant that since April 25, 2003, the Company and each of its Subsidiaries has operated their respective Businesses in the Ordinary Course of Business. Without limiting the generality of the foregoing, each of the parties hereto represents and warrants that since April 25, 2003, the Company and each of its Subsidiaries have not changed the manner or timing of the payment of accounts payable or other liabilities outside the Ordinary Course of Business or changed the manner or timing of collection of accounts receivable outside the Ordinary Course of Business or changed any other material aspect of their cash management processes. At the time of delivery of the April 25 Balance Sheet, Parent shall deliver to Buyer a schedule that reflects the activity in the intercompany accounts of Parent and the Company and all cash receipts and disbursements of the Company and its Subsidiaries, in each case for the period from April 26, 2003 to the Closing Date. For the avoidance of doubt, the parties acknowledge and agree that without limiting any rights that any party

may have under this Section 2(e)(v) there will be no further adjustment of the Purchase Price based on the amount of Working Capital after April 25, 2003. The parties agree that any indemnification claim for a breach of any of the representations in this Section 2(e)(v) shall not be subject to the Deductible Amount provided for in Sections 8(b)(i) and 8(c)(i) of this Agreement.”

6. Amendment of Section 4(v).

Section 4(v)(iv) of the Stock Purchase Agreement is hereby amended and supplemented by substituting the phrase “as of the Closing Date” for the phrase “on the Closing Balance Sheet” in the two instances in such Section where the phrase appears.

7. Amendment of Section 5(f).

Section 5(f) of the Stock Purchase Agreement is hereby amended and supplemented by adding the following phrase to the beginning of the first sentence of such Section:

“Except as required by Section 6(d) of this Agreement,”.

8. Amendment of Section 5(i).

Section 5(i) of the Stock Purchase Agreement is hereby amended and supplemented by adding the following sentence at the end of such Section:

“In addition, the Banc One Procurement Guarantee of Parent shall also be a Guarantee under this Agreement.”

9. Amendment of Section 6(d).

Section 6(d) of the Stock Purchase Agreement is hereby amended and supplemented by adding the following paragraph at the end of such Section:

“Notwithstanding anything in the Confidentiality Letter or this Agreement to the contrary, any party to this Agreement (and any employee, representative, or other agent of any party to this Agreement) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure; provided, however, that neither party (nor any employee, representative or other agent thereof) shall disclose (A) any information that is not relevant to an understanding of the U.S. federal income tax treatment of the transactions contemplated by this Agreement, including the identity of any party to this Agreement (or its employees, representatives or agents) or other information that could lead any person to determine such identity or (B) any information to the extent such disclosure could result in a violation of any federal or state securities laws.”

10. Amendment of Section 8(a).

Section 8(a) of the Stock Purchase Agreement is hereby amended and supplemented by adding the phrase “and §4(b)” after the word “§3(a)(iv)” in the 5^th line thereof.

11. Amendment of Section 8(b).

a. Subsections (A) and (B) of the proviso beginning on the 18^th line of Section 8(b)(i) of the Stock Purchase Agreement are hereby amended and supplemented by adding the phrase “(other than the representations set forth in Sections 3(a)(iv) and 4(b))” to each such subsection immediately after the phrase “contained in this Agreement”.

b. Section 8(b)(iv) of the Stock Purchase Agreement is hereby amended, supplemented and restated to read as follows:

“Seller agrees to reimburse Buyer for $280,000 which represents one half of the payable due in connection with the settlement of the class action complaint, Kathy Nelson v. Aramark Educational Resources, Inc., filed in the Circuit Court of Oregon, County of Multnomah, with respect to the periods prior to the Closing Date. Each of the Parent and the Seller agrees to indemnify the Buyer Indemnified Parties from and against any Adverse Consequences the Buyer Indemnified Parties may suffer resulting from, arising out of, or caused by any claim by Medallion employees in connection with or related to such class action with respect to the periods prior to the Closing Date; provided, however, that (A) the Parent and the Seller shall not have any obligation to indemnify the Buyer Indemnified Parties from and against any Adverse Consequences resulting from, arising out of, or caused by the matters described in this §8(b)(iv) (other than the $280,000 referenced above) until the Buyer Indemnified Parties have suffered Adverse Consequences, together with Adverse Consequences resulting from, arising out of, or caused by the breach of any representation or warranty as provided in §8(b)(i), in excess of the Deductible Amount, after which, subject to the other provisions of this §8, the Parent and the Seller shall be obligated to indemnify the Buyer Indemnified Parties from and against the amount of any excess Adverse Consequences above the Deductible Amount and (B) there will be an aggregate ceiling equal to $75,000,000 on the obligation of the Parent and the Seller to indemnify the Buyer Indemnified Parties from and against Adverse Consequences resulting from, arising out of, or caused by the matter described in this §8(b)(iv) and Adverse Consequences resulting from, arising out of, or caused by the breach of any representation or warranty as provided in §8(b)(i). To the extent any amount paid in settlement of this action by any of Parent or the Seller (including the $280,000 referenced above) is later returned to the Company or Buyer, the Company or Buyer, as the case may be, shall refund any such amounts to Parent.”

12. Amendment of Section 8(c).

Section 8(c) of the Stock Purchase Agreement is hereby amended and supplemented by adding a new paragraph (v) which shall read as follows:

“(v) Each of Holdings and the Buyer agrees to indemnify the Seller Indemnified Parties from and against any Adverse Consequences the Seller Indemnified Parties may suffer under the Guaranty Agreement, dated as of May 9, 2003 by and between Parent and Gelco Corporation.”

13. Amendment of Section 9.

Sections 9(a)(i), 9(a)(ii) and 9(b) of the Stock Purchase Agreement are hereby amended and supplemented by substituting the term “April 25 Working Capital” for the term “Closing Working Capital” in each instance in such Sections where the term appears.

14. Amendment of Exhibit A.

Exhibit A of the Stock Purchase Agreement is hereby amended by deleting the current Exhibit A to the Stock Purchase Agreement and substituting therefore the Exhibit A attached hereto.

15. Miscellaneous.

(a) Except as expressly modified hereby, the Stock Purchase Agreement remains in full force and effect. Upon the execution and delivery hereof, the Stock Purchase Agreement shall thereupon be deemed to be amended and supplemented as hereinabove set forth as fully and with the same effect as if the amendments and supplements made hereby were originally set forth in the Stock Purchase Agreement, and this Second Amendment and the Stock Purchase Agreement shall henceforth be read, taken and construed as one and the same instrument, but such amendments and supplements shall not operate so as to render invalid or improper any action heretofore taken under the Stock Purchase Agreement.

(b) This Second Amendment may be executed in counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been signed by each of the parties hereto and delivered to Parent and Buyer.

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed as of the day and year first above written.

KNOWLEDGE SCHOOLS, INC.
By:	/s/ Adam Cohn
Title:	Vice President
CHILDREN’S DISCOVERY CENTERS OF AMERICA, INC. (to be renamed Knowledge Learning Corporation)
By:	/s/ Adam Cohn
Title:	Vice President
ARAMARK CORPORATION
By:	/s/ Barbara A. Austell
Title:	SVP Finance and Treasurer
ARAMARK ORGANIZATIONAL SERVICES, INC.
By:	/s/ Barbara A. Austell
Title:	SVP Finance and Treasurer
ARAMARK EDUCATIONAL RESOURCES, INC.
By:	/s/ Jeff Wheatley
Title:	President

EX-10.2

Exhibit 10.2

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; uniform and career apparel; and educational resources;

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, 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 avid others, and will generate good will which Employee acknowledges belongs to ARAMARK;

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NOW, THEREFORE, in consideration of Employee’s employment with ARAMARK, the award of non-qualified stock options under the ARAMARK 2001 Equity Incentive Plan, the severance and other post-employment benefits provided for herein (including pursuant to Exhibit A hereto), 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 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, policies or products, 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,

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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, provided, however, if Employee’s employment is (i) involuntarily terminated by ARAMARK for any reason other than Cause (as defined herein), or (ii) terminated by Employee for Good Reason (as defined in Exhibit A) at any time following a Change of Control (as defined in Exhibit A), then the term of the non-competition provision set forth herein will be modified to be one year following such termination of 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 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 (i) 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

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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: (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,

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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, sublicensable 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

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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 at 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 ARAMARK for any reason other than Cause, Employee shall be entitled to the following post-employment benefits:

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1. Severance Pay: Employee shall receive severance payments equivalent to Employee’s monthly base salary as of the effective date of termination for the number of months set forth on the following schedule:

Years of ARAMARK Continuous Service Completed from Last Hire Date	Months of Severance Pay
Less than 2	6
2	9
3	12
4	15
5 or More	18

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.”

2. Other Post-Employment Benefits

(a) Basic Group medical and life insurance coverage’s 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

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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) Employee’s leased vehicle shall be made available to Employee through the Severance Pay Period at which time Employee has the option to either purchase the vehicle in accordance with the Executive Leadership Council policy then in effect or return it to ARAMARK.

(c) Employee’s eligibility to participate in all other benefit and compensation plans, including, but not limited to the Management Incentive Bonus, Long Term Disability, Stock Unit Retirement, Deferred Compensation 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.

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B. Termination for “Cause shall he defined as termination of employment due to: (i) conviction of or entry of a plea of guilty or nolo contendere to a felony (or any similar crime for purposes of laws outside the United States), (ii) fraud or dishonesty, (iii) willful failure to perform assigned duties, (iv) willful violation of ARAMARK’s Business Conduct Policy or (v) intentionally working against the best interests of ARAMARK

C. If Employee is terminated by ARAMARK for reasons other than Cause, 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.

D. 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 I, 2, 3 or 4 above.

E. Employee’s receipt of severance and other post-employment benefits under this Agreement is contingent on (i) 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, this Agreement (including the attached Exhibit A) or any ARAMARK benefit plan pursuant to its terms, and (ii) the expiration of the applicable Age Discrimination in Employment Act revocation period without such release being revoked by Employee; provided, however, that this Article 6.E no longer shall apply following a Change of Control (as defined in the attached Exhibit A).

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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 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 and conversion of insurance.

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. This Agreement shall supersede and substitute for any previous post-employment or severance agreement between Employee and ARAMARK.

C. In the event of a Change of Control as defined in the attached Exhibit A, the provisions of Exhibit A shall apply to Employee.

D. 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

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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.

E. 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.

F. 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.

G. The terms of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, without regard to conflicts of laws principles thereof. For purposes of any action or proceeding, Employee irrevocably submits to the non-exclusive jurisdiction of the courts of Pennsylvania and the courts of the United States of America located in Pennsylvania for the purpose of any judicial proceeding arising out of or relating to this Agreement, and acknowledges that the designated for a have a reasonable relation to the Agreement and to the parties’ relationship with one another. Notwithstanding the provisions of this Article 8.G 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.

H. Employee expressly consents to the application of Article 8.G to any judicial action or proceeding arising out of or relating to this Agreement. ARAMARK

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shall have the right to serve legal process upon Employee in any manner permitted bylaw. In addition, Employee irrevocably appoints the General Counsel of ARAMARK Corporation (or any successor) as Employee’s agent for service of legal process in connection with any such action or proceeding and Employee agrees that service of legal process upon such agent, who shall promptly advise Employee of any such service of legal process at the address of Employee then in the records of ARAMARK, shall be deemed in every respect effective service of legal process upon Employee in any such action or proceeding.

I. 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.G and hereby agrees not to plead or claim the same.

J. 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.

K. Employee and ARAMARK acknowledge that for purposes of Article 6, Employee’s last hire date with ARAMARK is 6/18/03.

IN WITNESS WHEREOF, and intending to he legally bound, the parties hereto have caused this Agreement to be signed.

Date:	11/5/02	ARAMARK CORPORATION
		By	/s/ Brian G. Mulvaney
			Brian G. Mulvaney
		By	/s/ Timothy Cost
			Timothy Cost
		*       offer accepted upon successful closure of planned merger between Pfizer and Pharmacia (contingent)

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Schedule 1

Prior Works*

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

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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 Timothy P. Cost (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 6/18, 2003 (the “Effective Date”) and shall remain in effect until 6/18, 2006 (the “Term”); provided, however, that commencing with 6/18, 2004 and on each anniversary thereof (each an “Extension Date”), the Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto written notice before the applicable Extension Date that the Term shall not be so extended. Notwithstanding the foregoing, this Exhibit shall, if in effect on the date of a Change of Control, remain in effect until the later of three years following the 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 in the Change of Control. Payment of benefits under this Exhibit shall be in addition to, and not in lieu of, any benefits payable under the ARAMARK Corporation Agreement Relating to Employment arid Post-Employment Competition of which this Exhibit is a part, except as provided in Section 3(b) hereof. 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.

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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 forty days after the Termination Date; and

(4) in the case of a termination of employment by Executive for Good Reason, an amount equal to the severance pay specified in Article 6.A.1.of the attached Presidents’ Council Agreement (as defined in Section 8 hereof), payable according to the schedule set forth therein, determined as if Executive’s employment had been terminated by ARAMARK without Cause on 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 the event benefits are continued under this Section 3(b), such continued benefits shall be in lieu of those specified in Article 6.A.2.a of the attached Presidents’ Council Agreement (as defined in Section 8 hereof).

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c. Payment of Earned But Unpaid Amounts. Within forty 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, all compensation previously deferred by Executive but not yet paid 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.

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 he subject to reduction or offset in respect of any claims which the Company (or any other person or entity) may have against Executive.

5. Gross- Up.

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

17

such excise tax (such excise tax, together with any such interest and penalties, hereinafter collectively referred to as the “Excise Tax”), Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

b. All determinations required to be made under this Section 5, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment 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; provided that for purposes of determining the amount of any Gross-Up Payment, Executive shall be deemed to pay federal income tax at the highest marginal rates applicable to individuals in the calendar year in which any such Gross-Up Payment is to be made and deemed to pay state and local income taxes at the highest effective rates applicable to individuals in the state or locality of Executive’s residence or place of employment in the calendar year in which any such Gross-Up Payment is to be made net of the maximum reduction in federal income taxes that can be obtained from deduction of such state and local taxes, taking into account limitations applicable to individuals subject to federal income tax at the highest marginal rates. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 5, shall he paid by the Company to Executive (or to the appropriate taxing authority on Executive’s behalf) when due. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall so indicate to Executive in writing. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code, it is possible that the amount of the Gross-Up Payment determined by the Accounting Firm to be due to (or on behalf of) Executive was lower than the amount actually due (“Underpayment”). In the event that the Company exhausts its remedies pursuant to Section 5(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

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c. Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of any Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after Executive is informed in

19

writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall (i) give the Company any information reasonably requested by the Company relating to such claim. (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company. (iii) cooperate with the Company in good faith in order to effectively contest such claim and (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 5(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided. further, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; provided, further, that if Executive is required to extend the statute of limitations to enable the Company to contest such claim, Executive may limit this extension solely to such contested amount. The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest,. as the Case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

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d. If, after the receipt by Executive of an amount paid or advanced by the Company pursuant to this Section 5 Executive becomes entitled to receive any refund with

21

respect to a Gross-Up Payment, Executive shall (subject to the Company’s complying with the requirements of Section 5(c)) promptly pay to the Company the amount of such refund received (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to Section 5(c), a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of the Gross-Up Payment required to be paid.

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.

Executive shall, after the Termination Date, retain all rights to indemnification under applicable law or under the Company’s Certificate of Incorporation or By-Laws, as they may be amended or restated from time to time. 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 the Termination Date, for the three year period following the Termination Date, 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 ‘“Presidents’ Council Agreement”). This Exhibit shall not diminish in any way Executive’s rights under the terms of such Presidents’ Council 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 Presidents’ Council 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,

22

including attorneys’ fees and disbursements, of Executive if Executive prevails 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 he 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

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	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, supersedes all other prior agreements expressly concerning the effect of a Change of Control on 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.

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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. “Base Salary” means Executive’s annual rate of base salary in effect on the date in question.

3. “Bonus” means the amount payable to Executive under the Company’s applicable annual bonus plan with respect to a fiscal year of the Company.

4. “Cause” means “cause” as defined in the Presidents’ Council Agreement of which this Schedule A forms a part.

5. “Change of Control” means the first to occur of any of the following:

(a) any “person” or “group” (as described in the Act) (other than (i ) a person holding securities representing 10% or more of the combined voting power of the Company’s outstanding securities as of the date that the Company completes an initial public offering of its class B common stock (a “Pre-Existing Shareholder”), (ii) the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (iii) any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company), becomes the beneficial owner (as defined in Rule 13d-3 of the Act), directly or indirectly, of securities of the Company, representing (I) 20% or more of the combined voting power of the Company’s then-outstanding securities and (II) more of the combined voting power of the Company’s then-outstanding securities than the Pre-Existing Shareholders in the aggregate;

(b) during any period of twenty-four consecutive months (not including any period prior to the date that the Company completes an initial public offering of its class B common stock), individuals who at the beginning of such period constitute the Company’s Board of Directors, and any new director (other than a director nominated by any person (other than the Company) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control under (a), (c) or (d) of this Section 5) whose election by the Company’s Board of Directors or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the

25

period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof:

(c) the consummation of any transaction or series of transactions resulting in a merger or consolidation in which the Company is involved other than a merger or consolidation which would result in the shareholders of the Company immediately prior thereto continuing to own (either by remaining outstanding or by being converted into voting securities of the surviving entity), in the same proportion as immediately prior to the transaction(s), more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

(d) the complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company’s assets; or

(e) any other transaction so denominated by the Company’s Board of Directors.

6. “Code” means the Internal Revenue Code of 1986, as amended.

7. “Company” means ARAMARK Corporation and any successor or successors thereto.

8. “Good Reason” means any of the following actions on or after a Change of Control, without Executive’s express prior written approval, other than due to Executive’s Permanent Disability or death:

(a) any decrease in Base Salary or Target Bonus;

(b) any decrease in Executive’s pension benefit opportunities or any material diminution in the aggregate employee benefits, in each case, afforded to the Executive immediately prior to the Change of Control, but not including any such decrease or diminution that is inadvertent and that is cured within 30 days following written notice of such decrease or diminution by Executive to the Company;

(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);

(d) any relocation of Executive’s principal place of business of 35 miles or more, other than normal travel consistent with past practice; or

(e) Executive’s notice of termination of employment within the thirty-day period following the first day of the 13^th month following the Change of Control.

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Except with respect to Section 8(c) above, Executive shall have twelve months from the time Executive first becomes aware of the existence of Good Reason to resign for Good Reason.

9. “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.

10. “Target Bonus” means the target Bonus established for Executive, whether expressed as a percentage of Base Salary or a dollar amount.

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EX-31.1

Exhibit 31.1

I, Joseph Neubauer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ARAMARK Corporation;

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 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)) 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. 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

c. 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 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 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: August 11, 2003	/s/ JOSEPH NEUBAUER
	Joseph Neubauer Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, L. Frederick Sutherland, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ARAMARK Corporation;

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 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)) 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. 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

c. 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 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 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: August 11, 2003	/s/L. FREDERICK SUTHERLAND
	L. Frederick Sutherland Executive Vice President and Chief Financial Officer

EX-32.1

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 period ended June 27, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph Neubauer, Chief Executive Officer of the Company, 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 my 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.

/s/ JOSEPH NEUBAUER

Joseph Neubauer

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.

EX-32.2

Exhibit 32.2

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 period ended June 27, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, L. Frederick Sutherland, Chief Financial Officer of the Company, 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 my 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.

/s/ L. FREDERICK SUTHERLAND

L. Frederick Sutherland

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.

EX-99.1

Exhibit 99.1

ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES

(Unaudited)
(In Thousands, Except Per Share Amounts)

In the second quarter of fiscal 2002, ARAMARK sold its ownership interests in the Boston Red Sox and a related entity, resulting in a pre-tax gain of $37.9 million, which is reported as other income. In the third quarter of fiscal 2002, ARAMARK recorded a pre-tax gain of $5.8 million resulting principally from the sale of a residual interest in a previously divested business. These items have been excluded from the comparisons of operating income margins to enhance comparability due to the size and unusual nature of these items.

	NineMonthsEnded
	June27,2003		June28,2002
Operating Income Margins (GAAP)	5.1	%	6.0	%
Less: Other Income	0.0	%	-0.7	%
Operating Income Margins (as adjusted)	5.1	%	5.2	%

The impact of currency translation has been excluded from the comparison of results to enhance comparability in the Food and Support Services - International Segment by identifying the portion of the change in sales and operating income related to changes in foreign currency, which provides a comparison of results on a constant currency basis.

	ThreeMonthsEnded					% Change
	June27,2003		June28,2002
Food and Support Services - International - Sales (GAAP)	$	362,701	$	298,948		21	%
Less: Impact of Currency Translation		—		(42,633	)
Food and Support Services - International - Sales (as adjusted)	$	362,701	$	341,581		6	%

	ThreeMonthsEnded					% Change
	June27,2003		June28,2002
Food and Support Services - International - Operating Income (GAAP)	$	16,181	$	11,771		37	%
Less: Impact of Currency Translation		—		(1,833	)
Food and Support Services - International - Operating Income (as adjusted)	$	16,181	$	13,604		19	%

	NineMonthsEnded					% Change
	June27,2003		June28,2002
Food and Support Services - International - Sales (GAAP)	$	1,052,255	$	894,634		18	%
Less: Impact of Currency Translation		—		(101,556	)
Food and Support Services - International - Sales (as adjusted)	$	1,052,255	$	996,190		6	%

	NineMonthsEnded					% Change
	June27,2003		June28,2002
Food and Support Services - International - Operating Income (GAAP)	$	47,252	$	34,551		37	%
Less: Impact of Currency Translation		—		(4,345	)
Food and Support Services - International - Operating Income (as adjusted)	$	47,252	$	38,896		21	%