DEF 14A 1 ddef14a.htm ARAMARK CORPORATION--DEFINITIVE PROXY STATEMENT Aramark Corporation--Definitive Proxy Statement

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

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ARAMARK CORPORATION


(Name of Registrant as Specified in Its Charter)

 


(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

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LOGO

 

Notice of Annual Meeting of Stockholders

To our stockholders:

 

ARAMARK Corporation will hold its annual stockholders meeting at the Philadelphia Marriott Downtown, 1201 Market Street, Philadelphia, Pennsylvania, on Tuesday, February 7, 2006, at 2:00 p.m. Philadelphia time, for the following purposes:

 

  1.   To elect three Class II directors to serve until the 2009 annual meeting of stockholders;

 

  2.   To ratify the appointment of KPMG LLP as independent public accountants for fiscal 2006; and

 

  3.   To transact such other business as may properly come before the meeting.

 

The board of directors has fixed the close of business on December 12, 2005 as the record date for determination of the stockholders entitled to notice of and to vote at the meeting.

 

You can vote your shares by proxy using a toll-free telephone number or the internet (or by fax from outside the United States). We have provided instructions on the proxy card for using these convenient services. Of course, you may also vote your shares by marking your votes on the proxy card, signing and dating it, and mailing it in the envelope provided.

 

Whether or not you expect to attend the meeting in person, please vote your shares in one of the ways described above.

 

Bart J. Colli

Executive Vice President, General Counsel

and Secretary

 

January 5, 2006


LOGO

 

PROXY STATEMENT

 

ANNUAL MEETING OF STOCKHOLDERS

 

Solicitation by Board of Directors

 

We are furnishing this proxy statement in connection with the solicitation by the board of directors of ARAMARK Corporation (“we,” “our,” “us,” “ARAMARK” or the “Company”) of proxies for use at our annual stockholders meeting to be held on February 7, 2006, and at any adjournment or postponement of the meeting. Stockholders may submit proxies by mail or phone, or electronically via the internet, by following the instructions on the proxy card (for 401(k) Plan participants, the proxy/voting instruction card) included with this proxy statement. Stockholders who submit proxies may revoke them at any time before they are voted by submitting a later-dated proxy, delivering written notice of revocation to the Secretary of ARAMARK or voting by ballot at the meeting.

 

Our executive offices are located at ARAMARK Tower, 1101 Market Street, Philadelphia, Pennsylvania 19107 (telephone: 215-238-3000). This proxy statement and proxy card are being mailed to our stockholders on or about January 5, 2006.

 

Proxy Solicitation

 

We have hired Georgeson Shareholder Communications, Inc., a proxy solicitation firm, to assist us in soliciting proxies for a fee of $8,500 plus reasonable expenses.

 

Proxies will be solicited by mail. Proxies may also be solicited by Georgeson and by directors, officers and a small number of regular employees of ARAMARK personally or by mail, e-mail or telephone, but such persons (other than Georgeson) will not be specially compensated for such services. The entire cost of solicitation will be borne by ARAMARK.

 

Shares Outstanding and Voting Rights

 

We have two classes of common stock outstanding: class A common stock and class B common stock. Each holder of record of shares of class A common stock entitled to vote will have the right to ten votes for each such share of class A common stock held and each holder of record of shares of class B common stock entitled to vote will have the right to one vote for each such share of class B common stock held.

 

Only holders of shares of class A common stock and class B common stock of record at the close of business on December 12, 2005, are entitled to notice of and to vote at the meeting. On that date, 60,845,411 shares of class A common stock (representing a total of 608,454,110 votes) and 119,302,849 shares of class B common stock (together, the “common stock”) were outstanding.

 

Our amended and restated certificate of incorporation provides for a conversion of class A common stock into class B common stock if an employee that is the holder thereof leaves the Company. In addition, our amended and restated certificate of incorporation permits holders of our class A common stock to convert such shares into class B common stock at any time.

 

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Quorum and Vote Required

 

The presence in person or by proxy of the holders of record of shares of our common stock entitling the holders to cast a majority of the votes entitled to be cast by the holders of common stock entitled to vote will constitute a quorum for the transaction of business. Abstentions and broker “non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.

 

Directors are elected by a plurality of the votes cast. A plurality means that the nominees with the largest number of votes are elected as directors up to the maximum number of directors to be chosen at the meeting. Abstentions and broker non-votes will have no effect on the voting for the election of directors. Any other matters that may be acted upon at the meeting, including the ratification of accountants, will be determined by the affirmative vote of the holders of a majority of the votes of the shares having voting power represented in person or by proxy at the meeting and entitled to vote. An abstention is counted in the same manner as a vote against and a broker “non-vote” generally has no effect on the voting on these matters.

 

The board of directors is not aware of any matters that will be brought before the meeting other than those described in this proxy statement. However, if any other matters properly come before the meeting, the persons named on the enclosed proxy card will vote in their discretion on such matters.

 

PROPOSAL No. 1—ELECTION OF DIRECTORS

 

The board of directors has determined that three directors will be elected at the meeting and has set the size of the Board of directors at ten effective immediately prior to the meeting. At the meeting, three directors will be elected to hold office until the annual meeting of stockholders to be held in 2009 or until their successors have been elected and qualified. The persons listed below have been nominated by the board of directors to be elected as Class II directors:

 

Patricia C. Barron

  

Ronald L. Sargent

Ronald R. Davenport

    

 

In accordance with the Company’s Corporate Governance Guidelines, Robert J. Callander, who is currently more than 72 years of age, will not stand for re-election at the meeting. The size of the Board will be reduced effective at the conclusion of Mr. Callander’s term, which will be immediately prior to the 2006 annual meeting.

 

Unless contrary instructions are given, the shares represented by a properly executed proxy will be voted for the nominees listed above. All of the nominees are currently members of our board of directors. If, at the time of the meeting, one or more of the nominees has become unavailable to serve, shares represented by proxies will be voted for the remaining nominees and for any substitute nominee or nominees designated by the board of directors, unless the size of the board is reduced. The board of directors knows of no reason why any of the nominees will be unavailable or unable to serve.

 

The board of directors recommends that you vote “FOR” the election of these three persons.

 

Directors

 

Our amended and restated certificate of incorporation provides for a board of directors that is divided into three classes. One class is elected each year at the annual meeting of stockholders for a

 

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term of office expiring after three years. Class II directors have terms expiring at the annual meeting of stockholders to be held in 2006 and Class III directors have terms expiring at the 2007 annual meeting of stockholders and Class I directors have terms expiring at the annual meeting of stockholders to be held in 2008. Ms. Barron and Messrs. Davenport and Sargent are members of Class II; Messrs. Coleman, Kean, Ksansnak and Preston are members of Class I; and Messrs. Neubauer, Babbio and von der Heyden are members of Class III. Each director serves until the expiration of his or her term and thereafter until his or her successor is duly elected and qualified.

 

The following table presents the names and positions of our directors, their ages as of December 12, 2005, and the length of time they have been directors:

 

Name


   Age

  

Position


   Director Since

Joseph Neubauer

   64    Chairman and CEO and Director(2)+    1979

Lawrence T. Babbio, Jr.

   61    Director(2) (3)    1999

Patricia C. Barron

   62    Director(3)(5)    1997

Leonard S. Coleman, Jr.

   56    Director(1)(5)    2000

Ronald R. Davenport

   69    Director(2)(4) (5)(6)    1980

Thomas H. Kean

   70    Director(4)(5)    1994

James E. Ksansnak

   65    Director(3)    1997

James E. Preston

   72    Director(2) (3) (4) (6)    1993

Ronald L. Sargent

   50    Director(1) (4)    2002

Karl M. von der Heyden

   69    Director(1) (2) (3)    2001

(1)   Member of Audit and Corporate Practices Committee
(2)   Member of Executive Committee
(3)   Member of Finance Committee
(4)   Member of Compensation and Human Resources Committee
(5)   Member of Nominating and Corporate Governance Committee
(6)   Member of Stock Committee
+   Mr. Neubauer is an ex-officio member of the Finance Committee with full voting rights.

 

Joseph Neubauer has been our chairman and chief executive officer since September 2004. From January 2004 to September 2004, he served as our executive chairman. Mr. Neubauer also served as our chief executive officer from February 1983 to December 2003 and as our chairman from April 1984 to December 2003. He was our president from February 1983 to May 1997. He is a director of Verizon Communications Inc., Federated Department Stores, Inc. and Wachovia Corporation.

 

Lawrence T. Babbio, Jr. has been vice-chairman and president of Verizon Communications Inc. since July 2000. He was president and chief operating officer of Verizon from December 1998 until July 2000. He was president and chief executive officer of Verizon’s Network Group and chairman of Verizon’s Global Wireless Group from August 1997 until December 1998. From January 1995 to August 1997 he was vice chairman of Verizon Communications. He is a director of Hewlett-Packard Company.

 

Patricia C. Barron, who currently is retired, was a clinical associate professor at the Leonard N. Stern School of Business of New York University from September 1999 to September 2002 and prior to that was an executive-in-residence and senior fellow. She was vice president of Business Operations Support of Xerox Corporation from April 1997 to July 1998. From 1995 to 1997, she was president of Engineering Systems of Xerox Corporation and from 1992 to 1994, was president of Office Document Products of Xerox Corporation. She is a director of Quaker Chemical Corporation, Teleflex Corporation, Ultralife Batteries, Inc. and United States Services Automobile Association.

 

Leonard S. Coleman, Jr. has been senior advisor, Major League Baseball, since November 1999. From September 2001 to October 2002, he was the chairman of Arena Co. He was president,

 

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The National League of Professional Baseball Clubs, from 1994 to 1999. He is a director of Cendant Corporation, Churchill Downs Incorporated, H.J. Heinz Company, Omnicom Group, Inc. and Electronic Arts, Inc.

 

Ronald R. Davenport has been the chairman of Sheridan Broadcasting Corporation since 1972. He is a director of Mellon Private Asset Management.

 

Governor Thomas H. Kean was the Governor of the State of New Jersey from 1982 until 1990. Since July 2005, he has been president of THK Consulting. He was president of Drew University from 1990 until July 2005. He is a director of Amerada Hess Corporation, CIT Group Inc., Franklin Resources, Inc., The Pepsi Bottling Group, Inc. and UnitedHealth Group Incorporated.

 

James E. Ksansnak has been chairman of Tasty Baking Company since April 2003. From March 2001 until April 2003, Mr. Ksansnak was retired. He was our vice chairman from May 1997 until February 2001. From February 1991 to May 1997, he was our executive vice president; from May 1986 to February 1991, he was our senior vice president; and from May 1986 to May 1997, he was our chief financial officer. He is a director of CSS Industries, Inc. and Tasty Baking Company.

 

James E. Preston, who currently is retired, was the chairman of Avon Products, Inc. from January 1989 to May 1999 and its president and chief executive officer from September 1988 until June 1998. He is a director of Foot Locker, Inc.

 

Ronald L. Sargent has been the Chairman of Staples, Inc. since March 2005 and its President and Chief Executive Officer since February 2002. From November 1998 to February 2002, he served as President and Chief Operating Officer of Staples, Inc. and from October 1997 to November 1998 he served as President—North American Operations of Staples, Inc. Mr. Sargent is a director of Staples, Inc., Mattel, Inc. and The Yankee Candle Company.

 

Karl M. von der Heyden, who currently is retired, was the vice chairman of PepsiCo, Inc. from September 1996 until February 2001 and its vice chairman and chief financial officer from September 1996 to February 1998. Between December 1993 and August 1994 he was president and chief executive officer of Metallgesellschaft Corp. In May 1993, he retired as co-chairman and chief executive officer of RJR Nabisco Inc. He is a director of Federated Department Stores, Inc., DreamWorks Animation SKG Inc., PanAmSat Corp. and the New York Stock Exchange.

 

Directors’ Meetings and Committees

 

ARAMARK’s board of directors held seven meetings during fiscal 2005. The board has six standing committees, including the Audit and Corporate Practices Committee, the Finance Committee, the Compensation and Human Resources Committee, the Nominating and Corporate Governance Committee, the Executive Committee and the Stock Committee, each of which is described below.

 

During fiscal 2005, each director attended at least 75% of the aggregate of all board meetings and all meetings of committees on which he or she served. ARAMARK directors are expected to attend the Annual Meeting of Stockholders. Ten of our eleven directors attended the 2005 Annual Meeting of Stockholders.

 

The Audit and Corporate Practices Committee (the “Audit Committee”) consists entirely of directors whom the board has determined in its business judgment are independent as defined in the New York Stock Exchange (the “NYSE”) listing standards and the rules under Securities Exchange Act of 1934 as in effect on the date this proxy statement is first being mailed to stockholders. In addition, the board has determined that at least one member of the Audit Committee has accounting or related financial management expertise as defined in the same NYSE listing standards and that Karl M. von

 

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der Heyden is an audit committee financial expert as defined by the rules under the Securities Exchange Act of 1934. Mr. von der Heyden currently serves on the audit committees of four public companies. In accordance with NYSE rules, the board has determined that this simultaneous service does not impair Mr. von der Heyden’s ability to effectively serve on the Company’s Audit Committee. Members of the Audit Committee receive compensation from us only in the form of directors’ fees, as described below. The Audit Committee, which operates under a written charter adopted by our board of directors, reviews periodic financial reports with our management prior to filing with the Securities and Exchange Commission (the “SEC”). The Audit Committee also reviews the adequacy of our system of internal accounting controls with our financial and audit personnel and our outside auditor. In addition, the Audit Committee reviews with our independent public accountant the scope of its audits, its audit reports, any internal control recommendations and management’s responses to those recommendations and the matters required to be discussed by the auditor with the Audit Committee pursuant to the standards of the Public Company Accounting Oversight Board (United States). The Audit Committee has the authority to select, retain, compensate and terminate our independent public accountant, which reports directly to it. The Audit Committee also has sole responsibility for approving all audit and permitted non-audit services by our independent public accountant. The Audit Committee has established policies and procedures for the engagement of the independent public accountant to provide audit and permitted non-audit services. Finally, the Audit Committee also monitors compliance with our business conduct policy. The Audit Committee evaluates itself on an annual basis. The Audit Committee held eight meetings during fiscal 2005.

 

The Finance Committee reviews our long-term business direction and goals and the strategy for maintaining that direction and achieving those goals. In connection with this responsibility, the Finance Committee reviews with management and recommends to the board of directors our overall financial plans, including capital expenditures, our dividend policy, acquisitions and divestitures, securities issuances and incurrences of debt, and the performance of our retirement benefit plans. It also recommends to the board specific transactions involving these matters, and it has been empowered by the board to approve certain financial commitments and acquisitions and divestitures by us up to specified levels. The Finance Committee evaluates itself on an annual basis. The Finance Committee held four meetings during fiscal 2005.

 

The Corporate Governance and Human Resources Committee (the “Corporate Governance Committee”), which was replaced by Compensation and Human Resources Committee and the Nominating and Corporate Governance Committee in August 2005, was composed entirely of directors whom the board has determined in its business judgment are independent under the NYSE listing standards. Messrs. Preston, Callander, Davenport and Sargent served on the Corporate Governance Committee. The Corporate Governance Committee reviewed and approved corporate goals and objectives relevant to the compensation of our chairman and chief executive officer (the “CEO”), the executive officers of the Company and such other officers as the Corporate Governance Committee deemed necessary, and evaluated such individuals’ performance in light of those goals and objectives. The Corporate Governance Committee determined and approved the CEO’s compensation level based on this evaluation. In addition to its determination of such compensation, the Corporate Governance Committee made recommendations to the board with respect to other executive compensation, incentive-compensation plans and equity-based plans for other employees. In addition, the Corporate Governance Committee reviewed and recommended the compensation of non-employee directors and reviewed our contribution policy and practices for our retirement benefit plans. The Corporate Governance Committee developed Corporate Governance Guidelines, which the board adopted. The Corporate Governance Committee evaluated itself on an annual basis and was responsible for overseeing the evaluation of the board and management on an annual basis. In its role as the nominating committee, the Corporate Governance Committee recommended to the board nominations for membership to the board of directors. During fiscal 2005, the Corporate Governance Committee held four meetings.

 

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The Compensation and Human Resources Committee (the “Compensation Committee”), which is one of the successor committees to the Corporate Governance Committee established effective August 1, 2005 and which is composed entirely of directors whom the board has determined in its business judgment are independent under the NYSE listing standards, reviews and approves corporate goals and objectives relevant to the compensation of our CEO, the executive officers of the Company and such other officers as the Compensation Committee may deem necessary, and evaluates such individuals’ performance in light of those goals and objectives. The Compensation Committee determines and approves the CEO’s compensation level based on this evaluation. In addition to its determination of such compensation, the Compensation Committee makes recommendations to the board with respect to other executive compensation, incentive-compensation plans and equity-based plans for other employees. In addition, the Compensation Committee reviews and recommends the compensation of non-employee directors and reviews our contribution policy and practices for our retirement benefit plans. Finally, the Compensation Committee assists the Board and the CEO with the periodic review of management succession planning and development. The Compensation Committee evaluates itself on an annual basis. During fiscal 2005, the Compensation Committee held one meeting.

 

The Nominating and Corporate Governance Committee (the “Nominating Committee”) which is the other successor committee to the Corporate Governance Committee established effective August 1, 2005, is composed entirely of directors whom the board has determined in its business judgment are independent under the NYSE listing standards. The Nominating Committee is responsible for reviewing the Corporate Governance Guidelines and making changes to the Guidelines when it believes changes are necessary or appropriate. The Nominating Committee also oversees the structure of the Board’s committees and recommends the members to serve on such committees. The Nominating Committee evaluates itself on an annual basis and is responsible for overseeing the evaluation of the board and management on an annual basis. Finally, the Nominating Committee identifies individuals qualified to become directors and recommends to the board nominations for membership to the board of directors. During fiscal 2005, the Nominating Committee held one meeting.

 

The Executive Committee has the full power of the board of directors when the board is not in session, except where committee action is prohibited by Delaware law, the Securities Exchange Act of 1934 or NYSE listing standards. The Executive Committee held no meetings in fiscal 2005.

 

The Stock Committee has authority to approve specific transactions involving ARAMARK stock between our officers and directors and us. It did not hold any meetings during fiscal 2005.

 

From time to time, the board meets in executive session without members of management present. During these meetings, the chair of the board committee having jurisdiction over the predominate subject of the meeting presides at the meeting, rather than having one presiding director for all executive sessions, and otherwise the Committee chairs serve as presiding director of executive sessions on a rotating basis in alphabetical order of the Committee names. Interested parties who would like to communicate with our non-employee directors, should send a letter to the following address: ARAMARK Corporation, Attention: Non-Management Directors, 1101 Market Street, Philadelphia, PA 19107. Stockholders who would like to communicate with our Board of Directors as a whole should send a letter to the following address: ARAMARK Corporation, Attention: Board of Directors, 1101 Market Street, Philadelphia, PA 19107.

 

Independence

 

The board has adopted Corporate Governance Guidelines that contain categorical standards of director independence. No director will be considered “independent” unless the board of directors affirmatively determines that the director has no material relationship with ARAMARK (either directly, or as a partner, stockholder, director or officer of an organization that has a relationship with ARAMARK).

 

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When making “independence” determinations, the board broadly considers all relevant facts and circumstances, as well as any other facts and considerations specified by the NYSE, by law or by any rule or regulation of any other regulatory body or self-regulatory body applicable to ARAMARK. Notwithstanding the foregoing, none of the following relationships shall disqualify any director or nominee from being considered “independent” and such relationships shall be deemed to be an immaterial relationship with ARAMARK:

 

    A director’s or a director’s immediate family member’s ownership of five percent or less of the equity of an organization that has a relationship with ARAMARK;

 

    A director’s service as an executive officer or director of or employment by, or a director’s immediate family member’s service as an executive officer of, a company that makes payments to or receives payments from ARAMARK for property or services in an amount which, in any fiscal year, is less than the greater of $1 million or two percent of such other company’s consolidated gross revenues; or

 

    A director’s service as an executive officer of a charitable organization that received annual contributions from ARAMARK and its Foundation that have not exceeded the greater of $1 million or two percent of the charitable organization’s annual gross revenues (ARAMARK’s automatic matching of employee contributions will not be included in the amount of ARAMARK’s contributions for this purpose).

 

The board has made the determination that nine of our non-employee directors are independent under NYSE rules. Each of these directors also satisfies the categorical standards set forth above. The following directors were determined to be independent: Patricia C. Barron, Robert J. Callander, Leonard S. Coleman, Jr., Ronald R. Davenport, Thomas H. Kean, James E. Ksansnak, James E. Preston, Ronald L. Sargent and Karl M. von der Heyden.

 

Retained third-party director search firm

 

SpencerStuart, a search firm, was retained by the Corporate Governance Committee to assist in identifying and evaluating candidates for board membership who best satisfy ARAMARK’s criteria for directors. The Nominating Committee has now assumed responsibility for that relationship.

 

Stockholder suggestions for board nominees

 

The Nominating Committee is responsible for reviewing, advising, and reporting to the board regarding the board’s membership, structure, organization and performance, as well as director selection. In that capacity, the Nominating Committee considers candidates for directors proposed by members of the committee, other directors, management and ARAMARK stockholders. ARAMARK stockholders who wish to propose a candidate for nomination as a director must submit evidence of the proposing party’s share ownership, the name of the proposed candidate, a statement as to whether the candidate qualifies as “independent” under the NYSE standards of independence, all information relating to the proposed candidate as would be required to be disclosed in solicitations of proxies for the election of such candidate as a director pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and the candidate’s written consent to serve as a director, if elected. For a candidate to be considered for a particular annual meeting, the information must be received by the Secretary of the Company at the Company’s principal executive offices not less than 120 calendar days before the anniversary of the date the Company’s proxy statement was released to stockholders in connection with the previous year’s annual meeting. The Nominating Committee may, in its discretion, request additional information. The Board as a whole should possess all of the following core competencies: accounting and finance, management, crisis response, industry knowledge, leadership and strategy/vision, among others. All candidates will be evaluated in the same manner regardless of who recommended the candidate.

 

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Nominations of directors also may be made by stockholders. Any stockholder who wishes to nominate a candidate for the board of directors may do so in accordance with requirements set forth in our by-laws, including mailing a notice in accordance with our by-laws to the following address: ARAMARK Corporation, ARAMARK Tower, 1101 Market Street, Philadelphia, PA 19107, Attn: Secretary.

 

Corporate Governance

 

We have a business conduct policy that applies to all employees, which includes the code of ethics for our principal executive officer, our principal financial officer and our principal accounting officer or controller within the meaning of the SEC regulations adopted under the Sarbanes-Oxley Act of 2002. Our business conduct policy is posted under the Investor Relations section of our website at www.aramark.com. In addition, the charters of our Compensation Committee, our Nominating Committee and our Audit Committee as well as our Corporate Governance Guidelines are available under the Investor Relations section of our website at www.aramark.com. References to our website in this Proxy Statement are intended to be inactive textual references only.

 

Copies of our business conduct policy, the charters of our Compensation Committee, our Nominating Committee and our Audit Committee as well as our Corporate Governance Guidelines also are available at no cost to any stockholder who requests them by writing or telephoning us at the following address or telephone number:

 

ARAMARK Corporation

1101 Market Street

Philadelphia, PA 19107

Attention: Investor Relations

Telephone: (215) 238-3726

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own beneficially more than 10% of our common stock to file reports of ownership and changes in ownership of such stock with the SEC. Directors, executive officers and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all such forms they file. To our knowledge, our directors and executive officers complied during fiscal year 2005 with all currently applicable Section 16(a) filing requirements.

 

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Executive Compensation

 

Summary of Cash and Certain Other Compensation

 

The following table sets forth certain information concerning the compensation we paid to our chief executive officer and the four other most highly paid executive officers during fiscal 2005. We refer to these persons in this proxy statement as the “named executive officers.”

 

Summary Compensation Table

 

        Annual Compensation

 

Long-term

Compensation

Awards


 

All

Other
Compensation(4)


Name and Current

Principal Position


 

Fiscal

Year


  Salary

  Bonus(1)

 

Other Annual

Compensation(2)


  Restricted
Stock
Award ($)(3)


  Securities
Underlying
Options


 

Joseph Neubauer

Chairman and

Chief Executive Officer

  2005
2004
2003
  $
$
 
1,000,000
1,000,000
1,038,500
  $
 
 
1,600,000
800,000
1,500,000
  $
 
 
202,650
168,243
158,453
  $
 
 
400,000
200,000
—  
  200,000
—  
—  
  $
 
 
8,400
7,800
7,500

L. Frederick Sutherland

Executive Vice

President

and Chief Financial Officer

  2005
2004
2003
   
 
 
568,750
538,500
512,500
   
 
 
375,000
350,000
325,000
   
 
 
—  
—  
—  
   
 
 
418,557
373,877
—  
  50,000
45,000
—  
   
 
 
8,400
7,800
7,500

Bart J. Colli

Executive Vice President,

General Counsel and Secretary

  2005
2004
2003
   
 
 
492,500
459,200
442,500
   
 
 
365,000
325,000
300,000
   
 
 
—  
—  
—  
   
 
 
413,557
361,377
—  
  50,000
45,000
—  
   
 
 
10,152
10,200
7,500

Timothy P. Cost(5)

Executive Vice

President,

Corporate Affairs

  2005
2004
2003
   
 
 
468,750
443,300
127,500
   
 
 
355,000
325,000
215,000
   
 
 
—  
—  
—  
   
 
 
408,557
361,377
—  
  50,000
45,000
150,000
   
 
 
8,400
4,360
—  

Lynn B. McKee(6)

Executive Vice

President,

Human Resources

  2005
2004
2003
   
 
 
462,500
362,000
242,500
   
 
 
355,000
300,000
115,000
   
 
 
—  
—  
—  
   
 
 
408,557
451,279
—  
  50,000
63,000
18,750
   
 
 
8,400
7,800
7,500

(1)   The amounts in this column for 2005 include amounts of bonus deferred under the Management Stock Purchase Program (“MSPP”) for which the named executive officers received restricted stock units—for Mr. Neubauer, $400,000 (15,209 restricted stock units), for Mr. Sutherland, $187,500 (7,129 restricted stock units), for Mr. Colli, $182,500 (6,939 restricted stock units), and for Mr. Cost and Ms. McKee, $177,500 (6,749 restricted stock units). Restricted stock units received in lieu of bonus under the MSPP are immediately vested.
(2)  

The amounts disclosed in this column for 2005 include, with respect to Mr. Neubauer, $91,058 representing the Company’s payment of premiums for survivor insurance and $75,251 for Mr. Neubauer’s personal use of the Company’s airplane. The amounts disclosed in this column for 2004 include, with respect to Mr. Neubauer, $85,761 representing the Company’s payment of premiums for survivor insurance and $48,526 for Mr. Neubauer’s personal use of the Company’s airplane. The amounts disclosed in this column for 2003 include, with respect to Mr. Neubauer, $74,609 for Company payments of premiums for survivor insurance. In accordance with SEC rules, no disclosure is made with regard to officers whose perquisites are the lesser of either $50,000 or 10% of the total annual salary and bonus reported for the named executive officer.

 

9


(3)   The amounts in this column for 2005 include:
  (a)   The value of restricted stock units granted to each of the named executive officers as of the date of grant—for Messrs. Sutherland, Colli and Cost and Ms. McKee, $229,200 (10,000 restricted stock units). These restricted stock unit grants vest in equal annual installments on each of the first four anniversaries of the date of grant.
  (b)   Matching amounts contributed by the Company under the MSPP for each of the named executive officers—for Mr. Neubauer, $400,000 (15,209 restricted stock units), for Mr. Sutherland, $187,500, (7,129 restricted stock units), for Mr. Colli $182,500 (6,939 restricted stock units) and for Mr. Cost and Ms. McKee, $177,500 (6,749 restricted stock units). These matching restricted stock units vest in equal annual installments on each of the first four anniversaries of the date of grant.
  (c)   Dividend equivalents credited to each of the named executive officers in respect of their restricted stock units—for Messrs. Sutherland, Colli and Cost and Ms. McKee, $1,857. Dividends are credited in respect of all restricted stock units.

Each of the grants of restricted stock units listed in this column vests in equal annual installments on the first four anniversaries of the date of grant except for dividend equivalent restricted stock units, which vest at the same time as the restricted stock units to which they are attributable. The number and aggregate value of restricted stock units held by each of the executive officers on September 30, 2005 is as follows: for Mr. Neubauer, 15,043 restricted stock units with a value of $401,798, for Mr. Sutherland, 28,948 restricted stock units with a value of $773,201, for each of Messrs. Colli and Cost, 28,006 restricted stock units with a value of $748,040 and for Ms. McKee, 29,567 restricted stock units with a value of $789,734.

(4)   The amounts in this column include:
  (a)   Company contributions to the 2005 Stock Unit Retirement Plan: with respect to each of the Named Executive Officers $8,400 for 2005.
  (b)   In 2005, with respect to Mr. Colli, the payment of the $1,752 annual premium for his term life insurance.
(5)   Mr. Cost joined us in June 2003. Mr. Cost’s bonus amount for 2003 includes $65,000 paid to him as a signing bonus.
(6)   Ms. McKee became our Executive Vice President, Human Resources in May 2004.

 

Stock Options

 

Option Grants

 

The following table sets forth information with respect to the named executive officers concerning individual grants of stock options made in fiscal 2005.

 

Option Grants in Last Fiscal Year

 

    Individual Grants

  Potential Realizable
Value at
Assumed Annual Rates
of Stock
Price Appreciation for
Option
Term(2)


    Number of
Securities
Underlying Options
Granted


  Percent of Total
Options Granted to
Employees in 2005


    Exercise
Price(1)


 

Expiration

Date


 

Name


          5%

  10%

Joseph Neubauer

  200,000   5.68 %   $ 25.86   11/23/2014   $ 3,252,643   $ 8,242,836

L. Frederick Sutherland

  50,000   1.42 %   $ 22.92   11/1/2014     720,713     1,826,429

Bart J. Colli

  50,000   1.42 %   $ 22.92   11/1/2014     720,713     1,826,429

Timothy P. Cost

  50,000   1.42 %   $ 22.92   11/1/2014     720,713     1,826,429

Lynn B. McKee

  50,000   1.42 %   $ 22.92   11/1/2014     720,713     1,826,429

(1)   The exercise price of all option grants reflected in the table are equal to the closing price of our class B common stock on the New York Stock Exchange on the date of grant. Option grants listed in the table vest in equal annual installments on the first four anniversaries of the date of grant.
(2)  

Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. These gains are based on assumed rates of stock price appreciation of 5% and 10% compounded annually from the date the respective options were granted to their expiration date. The gains

 

10


 

shown are net of the option exercise price, but do not include deductions for taxes or other expenses associated with the exercises of the option or the sale of the underlying shares. The actual gains, if any, on the exercises of stock options will depend on the future performance of the common stock, the option holder’s continued employment through the option period, and the date on which the options are exercised.

 

Options Exercised and Unexercised

 

The following table sets forth information with respect to the named executive officers concerning the exercise of options in fiscal 2005 and unexercised options held as of September 30, 2005, the last day of fiscal 2005.

 

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

 

Name


  Shares
Acquired
on Exercise


  Value
Realized(1)


 

Number of Securities

Underlying Unexercised
Options(2)


 

Value of

Unexercised In-the-Money

Options at Fiscal Year
End(2)


      Exercisable

  Unexercisable

  Exercisable

  Unexercisable

Joseph Neubauer

  720,000   $ 13,154,400   —     200,000   $ —     $ 170,000

L. Frederick Sutherland

  53,332     995,175   11,250   83,750     3,825     200,975

Bart J. Colli

  209,332     3,806,096   71,250   119,750     226,425     562,535

Timothy P. Cost

  —       —     86,250   158,750     308,325     505,475

Lynn B. McKee

  17,332     308,603   28,250   122,666     53,068     394,549

(1)   Value realized equals the closing price of our class B common stock on the New York Stock Exchange at the time the option was exercised minus the exercise price of the option, multiplied by the number of shares for which the option was exercised.
(2)   Options exercisable and values of options are determined as of September 30, 2005. Value of an in-the-money option equals the closing price of our class B common stock on September 30, 2005 minus the exercise price of the option, multiplied by the number of shares underlying the option.

 

Employment Agreements and Change of Control Arrangements

 

General.    We have employment agreements or arrangements with all of our officers under which they are currently being paid annual salaries ranging up to $1,000,000. Generally, these contracts are for indeterminate periods terminable by either party, in most cases subject to advance notice and post-employment severance and benefit obligations.

 

Agreement with Mr. Neubauer.    Mr. Neubauer’s amended employment agreement was replaced with a new employment agreement on November 2, 2004. Mr. Neubauer’s current employment agreement is substantially similar to his previous employment agreement, except that his new agreement does not provide for a consulting period following termination of employment upon two years’ advance notice.

 

Under Mr. Neubauer’s current employment agreement, he is employed by us as our chairman and chief executive officer for a period beginning on the effective date of the employment agreement and ending on the second anniversary of a notice of termination of the employment agreement given by either party unless earlier terminated pursuant to its terms. The agreement provides for Mr. Neubauer to receive a base salary of $1,000,000, which will be reviewed periodically by the board in connection with its review of Mr. Neubauer’s performance. The board can increase, but not decrease, his salary in its discretion. Mr. Neubauer’s bonus is determined by the Compensation Committee pursuant to the terms of the Company’s Senior Executive Annual Performance Bonus Arrangement and Mr. Neubauer is eligible to participate in the Company’s 2001 Equity Incentive Plan and all retirement and welfare programs applicable to senior executives of the Company at benefit levels applicable to the Company’s chief executive officer.

 

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Mr. Neubauer’s employment agreement also provides that he will receive a supplemental retirement benefit for the duration of his life following his termination of employment, with a 50% survivor benefit for his surviving spouse for her lifetime. The annual supplemental retirement benefit will be equal to 50% of the sum of his base salary and his average bonus for the three years prior to his termination (or, if higher, his average annual bonus from 2001 to 2003), less any amounts payable under the survivor income protection plan in which Mr. Neubauer participates. Currently, the survivor income protection plan provides for a surviving spouse to receive the executive’s full base salary for one year after the executive’s death and one-half of the executive’s base salary for the subsequent nine years.

 

Mr. Neubauer’s current employment agreement also provides that, in general, after termination of Mr. Neubauer’s employment by us without cause or by Mr. Neubauer’s resignation with good reason (as each is defined in the agreement), including a resignation by Mr. Neubauer within 12 months following a change of control (as defined in the agreement), Mr. Neubauer will receive the following payments and benefits:

 

    A pro rata bonus for the year of termination based on his average bonus over the three immediately preceding years (or, if higher, 2001-2003);

 

    Lump sum payments of two times his base salary;

 

    A lump sum payment of two times his average bonus for the three years prior to his termination (or, if higher, 2001-2003);

 

    The supplemental retirement benefit mentioned above;

 

    Participation in the Company’s survivor income protection plan, certain health and welfare plans and other perquisites (such as his company car) for up to three years;

 

    Full vesting of his stock options and purchase opportunities;

 

    Participation in the Company’s executive health plan at his own expense for three years; and

 

    Other accrued but unpaid salary and benefits.

 

During his employment term and for a period of two years thereafter, Mr. Neubauer is subject to a non-competition covenant.

 

We have agreed to use our best efforts to cause Mr. Neubauer to be a member of our board during the term of Mr. Neubauer’s employment agreement. In addition, if any payment or benefit payable to Mr. Neubauer after a change in ownership or control of the Company would be considered a parachute payment subject to a federal excise tax, then we will pay Mr. Neubauer an additional payment or benefit to gross-up the amount of the excise tax.

 

Agreements with Messrs. Sutherland, Colli, Cost and Ms. McKee.    In 2006, Messrs. Sutherland, Colli and Cost and Ms. McKee will receive annual base salaries of $600,000, $525,000, $500,000 and $500,000, respectively.

 

We have entered into substantially similar agreements with Messrs. Sutherland, Colli, Cost and Ms. McKee (each, an “Executive”) relating to employment and post employment competition. The agreements generally provide for severance payments and other payments to be made to the Executive in the event that the Executive’s employment is terminated for any reason other than for cause (as defined in the agreements). Those benefits include severance payments on the basis of continuous service, generally equal to between 6 and 18 months of pay, plus the continuation of certain other benefits, including basic group medical and life insurance coverage, during the period of

 

12


such payment. The agreements contain non-competition provisions pursuant to which the Executive would be restricted from associating with or acquiring or maintaining an ownership interest in a competing business for a period of two years (or one year if employment is terminated by us other than for cause or is terminated by the employee for good reason after a change of control).

 

The agreements we have entered into with Messrs. Sutherland, Colli, Cost and Ms. McKee also provide for severance benefits if the Executive’s employment is terminated under certain circumstances in connection with a change in control of the Company. In general, if the Executive’s employment is terminated by us without cause or if the Executive resigns with good reason (as defined in the agreement) following a change in control, the Executive is entitled to cash severance benefits based on a multiple of two times the Executive’s base salary and target bonus (or the prior year’s actual bonus, if higher), a pro rata portion of the Executive’s target bonus for the fiscal year of termination based on the portion of the year during which he or she was employed, plus cash severance benefits of up to 18 months of pay based on the Executive’s length of service with the Company. The Executive is also entitled to continuation of certain welfare benefits for a period of 24 months and certain outplacement benefits. Under certain circumstances, the severance benefits payable under these agreements might constitute parachute payments subject to federal excise tax, in which case the Executive will receive a gross-up payment to compensate the Executive for the excise taxes.

 

The Company has entered into Indemnification Agreements with our directors and executive officers, among others, that provide substantially similar rights to which directors and officers are currently entitled pursuant to the Company’s certificate of incorporation and by-laws and that spell out further the procedures to be followed in connection with indemnification.

 

Compensation of Directors

 

From October 2, 2004 until May 9, 2005, each of our non-employee directors received an annual cash retainer of $50,000, payable in quarterly installments of $12,500, plus non-qualified stock options to purchase shares of our class A common stock, awarded quarterly. The number of shares subject to the quarterly option awards were calculated based on $12,500 worth of options on the date of grant, using the Black Scholes valuation methodology. From May 10, 2005 to September 30, 2005, each of our non-employee directors received an annual cash retainer of $62,500 per year, payable in quarterly installments of $15,625, plus quarterly grants of $15,625 worth of non-qualified stock options, using a Black Scholes valuation methodology. Beginning on October 1, 2005, the equity portion ($62,500) of our non-employee directors’ fees was divided between $36,250 worth of stock options, granted in quarterly installments of $9,062.50, based on a Black Scholes valuation methodology, and $26,250 worth of deferred stock units, granted in quarterly installments of $6,562.50.

 

Options have a 10-year term, are immediately 100% vested on the date of grant and have an exercise price equal to the fair market value of the underlying common stock on the date of grant. After a director’s retirement, the director may exercise all or any part of his or her options for a period ending on the earlier of ten years following his or her retirement or the expiration date.

 

The number of deferred stock units granted to our non-employee directors on a quarterly basis is equal to $6,562.50 divided by the closing price of our class B common stock on the date of grant. Deferred stock units are 100% vested upon grant, but are not paid out until six months after the termination of a director’s service.

 

Non-employee directors may elect to receive all or part of the annual cash retainer in the form of deferred shares and/or deferred cash. Under this deferral arrangement, the non-employee director is credited at the end of each quarter, under a notional deferral account, with the amount of cash deferred

 

13


and/or with a number of shares of our class A common stock calculated by dividing the amount of cash deferred by the closing price of a share of our class B common stock on the computation date. Each non-employee director who elects to receive deferred shares has the right to receive credit for dividends in his or her deferred stock account equal to the amount of the dividend multiplied by the quotient of the number of units in his or her deferred stock account on the record date divided by the fair market value of Company common stock on the dividend payment date. Deferred shares and deferred cash are issued or paid to the director on the third anniversary of the last day of the year in which the fees would have otherwise been paid to the director, unless the director elects to defer issuance or payment to a later date. Deferred cash accrues interest at a rate determined annually by us based on the Moody’s Corporate Bond Rate as of October. The interest rate for 2005 was 5.87% and will be 5.77% for 2006. Directors also are entitled to participate in the Company’s health and welfare plans. In addition, directors who are not our employees and who serve as chairman of a board committee receive an additional $10,000 each year.

 

Directors have stock ownership guidelines with respect to ARAMARK common stock that require directors to own ARAMARK stock with a market value of four times the annual retainer within four years of election to the Board.

 

Committee Report on Executive Compensation

 

Until July 31, 2005, the responsibilities of a compensation committee were assigned to the Corporate Governance Committee of the Board. Effective August 1, 2005, the functions previously performed by the Corporate Governance Committee were divided between the Nominating Committee and the Compensation Committee of the Board. At this time, the Compensation Committee assumed the Corporate Governance Committee’s compensation committee responsibilities. All of the members of the former Corporate Governance Committee were assigned to the Compensation Committee and Thomas H. Kean was added to the Compensation Committee. As used in this Report, the “Committee” means the committee of the Board that was assigned the responsibilities of a compensation committee at the time of the action or activity described – either the Corporate Governance Committee or the Compensation Committee, as applicable.

 

We discuss below our policies for compensating our executives and a number of other steps we took last year to strengthen the alignment of their interests with the long-term interests of our investors and other stakeholders. The Committee currently is composed of five directors all of whom have been determined by the Board to be “independent” directors within the meaning of the NYSE listing standards.

 

Compensation Philosophy.    ARAMARK’s compensation programs are designed to support ARAMARK’s overall commitment to continued growth and quality services to customers. The programs are intended, among other things, to enable ARAMARK to recruit and retain the best performers, to provide compensation levels consistent with the level of contribution and degree of accountability, to use performance measures consistent with ARAMARK’s goals, to provide compensation that is approximately the median of market rates and to include a significant portion of incentive compensation.

 

Salary.    Salary levels for the executive officers are reviewed at least annually. The specific salary increase for each executive officer in fiscal 2005 was based upon a review of his or her individual performance and development with published market data relating to over 500 companies used as a reference point, as well as, in the case of members of the Management Committee, a review of a select group of peer companies (the “Peer Companies”), which included Cintas, Compass Group PLC, FedEx, Marriott, McDonald’s, Sysco and Waste Management.

 

14


In connection with Mr. Neubauer’s reassuming the role of Chairman and Chief Executive Officer, the Committee and the Board approved a new employment agreement with Mr. Neubauer in November 2004. The Committee retained an outside consultant to advise it on Mr. Neubauer’s agreement. Mr. Neubauer’s employment agreement provides that his base salary will be $1,000,000 and that it may be increased at the discretion of the Board. The negotiations with respect to Mr. Neubauer’s contract, including the evaluation of his compensation, were conducted by the Committee without any corporate officers present, and were reviewed and approved by the full Board. Salaries for all other executive officers are reviewed by the CEO and in some cases, other executive officers, as appropriate, along with the Human Resources Services department. A review of competitive standards is conducted and recommendations are made to the Committee, for its review and approval.

 

Bonus.    In fiscal 2005, members of the Management Committee, which is composed of Messrs. Neubauer, Sutherland, Colli, Cost and Ms. McKee and John R. Donovan, Jr., Senior Vice President of the Company and President of ARAMARK Business, Sports and Entertainment, Andrew Kerin, Senior Vice President of the Company and President of ARAMARK Healthcare and Education, Ravi Saligram, Senior Vice President of the Company and President of ARAMARK International and Thomas Vozzo, Senior Vice President of the Company and President of ARAMARK Uniform and Career Apparel, participated in ARAMARK’s Senior Executive Annual Performance Bonus Arrangement (the “Bonus Arrangement”). Pursuant to the Bonus Arrangement, the Committee had selected the following financial performance measures in the indicated proportions for Messrs. Neubauer, Sutherland, Colli, Cost, Kerin, Donovan, Saligram and Vozzo and Ms. McKee: sales (40%), net income (40%) and return on gross investment (20%), and set goals for each measure. Mr. Neubauer was awarded 84% of his maximum bonus potential for fiscal 2005.

 

In the case of Messrs. Lafferty and Holland, our two other executive officers, who participated in ARAMARK’s Management Incentive Bonus Program, bonuses were awarded based, in part, upon ARAMARK’s sales, return on gross investment and net income and, in part, upon the attainment of individual objectives. Non-financial objectives represented 30% of the bonus target and were established by the executive’s supervisor. Financial goals represented 70% of the executive’s bonus target. The executive officers’ bonus targets generally represent approximately 40% of their base salaries.

 

Long Term Incentives.    Stock options and restricted stock units are granted in accordance with the ARAMARK 2001 Equity Incentive Plan. Individual grants are generally made by the Committee in accordance with competitive grant practices reflected in a published survey covering over 500 companies and the Peer Companies. In situations involving hires and promotions, grants were made to induce persons to accept employment or to recognize increased responsibility. The individual’s supervisor and other senior executives, along with the Human Resources Services department, make recommendations to the Committee.

 

In determining long term incentives for Mr. Neubauer, the Committee considers the Company’s performance (measured through return on gross investment (ROGI), net income and sales), the value of similar incentive awards to chief executive officers at the Peer Companies and the long term incentive awards that Mr. Neubauer has received in the past.

 

Each stock option granted under the 2001 Equity Incentive Plan permits the optionee, generally for a period of ten years unless employment is earlier terminated, to purchase shares of ARAMARK common stock at an exercise price equal to the market price on the date of grant. The options become exercisable in four equal annual installments.

 

Restricted stock units (“RSUs”) also are granted to officers and key employees of the Company under the 2001 Equity Incentive Plan. Those grants are evidenced by the delivery of an RSU Grant Certificate and vest in four equal annual installments.

 

15


Additional RSUs are awarded through the Management Stock Purchase Program (MSPP). This plan provides officers and other key employees the opportunity to defer up to 50% of their annual bonus (25% in the case of Mr. Neubauer) and receive instead RSUs representing shares of ARAMARK common stock with an aggregate market value equal to the amount of bonus deferred. The Company then awards additional RSUs equal to the number of RSUs received for bonus deferred. These matching RSUs vest in four equal annual installments.

 

Compliance with Internal Revenue Code Section 162(m).    Section 162(m) of the Internal Revenue Code disallows a Federal income tax deduction to publicly held companies for compensation paid to certain of their executive officers to the extent that compensation exceeds $1 million per covered officer in any fiscal year. This limitation applies only to compensation that is not considered performance-based. The ARAMARK 2001 Equity Incentive Plan has been structured so that any compensation paid in connection with the exercise of option grants made under the program is intended to qualify as performance-based compensation, which will not be subject to the $1 million limitation. The Bonus Arrangement, including RSUs awarded under the MSPP, has also been structured so that awards thereunder are intended to qualify as performance-based compensation not subject to the $1 million limitation. In implementing all compensation policies of the Company, the Committee strives to preserve the tax deductibility of compensation paid, to the extent that this objective does not impair the operation or effectiveness of the Company’s executive compensation plan. However, the Committee has maintained flexibility to enter into arrangements, which may result in payment of non-deductible compensation to executive officers of the Company.

 

James E. Preston, Chairman

  

Thomas H. Kean

Robert J. Callander

  

Ronald L. Sargent

Ronald R. Davenport

    

 

Equity Compensation Plan Information

 

The following table sets forth information about ARAMARK common stock that may be issued under all of ARAMARK’s existing equity compensation plans as of September 30, 2005, including the 2001 Equity Incentive Plan, the Combined Stock Ownership Plan and the Company’s Stock Unit Retirement Plans.

 

Plan category


   Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights(1)


    Weighted average
exercise price of
outstanding options,
warrants and rights


   Number of securities
remaining available
for future issuance
(excluding securities
reflected in column
(a))


 
     (a)

    (b)

   (c)

 

Equity compensation plans approved by security holders:

   15,466,117 (2)   $ 21.35    39,802,606 (3)

Equity compensation plans not approved by security holders:

   0     $ 0    0  
    

 

  

Total

   15,466,117     $ 21.35    39,802,606  
    

 

  


  (1)   Under the 2001 Equity Incentive Plan, options, stock appreciation rights, shares, restricted shares and restricted stock units may be granted, but the Plan does not separately segregate the shares used for each type of award. As of September 30, 2005, 39,802,606 shares were available for issuance under the 2001 Equity Incentive Plan.
  (2)  

Includes 2,218,366 shares issuable upon the conversion of deferred stock units issuable under the ARAMARK Corporation Stock Unit Retirement Plan at a rate of one share for each deferred stock unit. The deferred stock units convert into class A common stock for no additional consideration. Therefore, these shares are not included in the calculation of weighted average exercise price in column b. In addition, includes 350,177 shares issuable upon conversion of deferred stock units

 

16


 

awarded under the ARAMARK 2001 Stock Unit Retirement Plan. Awards issued under this plan are permitted by, and shares issuable upon conversion of the deferred stock units will be issued under, the 2001 Equity Incentive Plan. The deferred stock units convert into class B common stock for no additional consideration. Therefore, these shares are not included in the calculation of the weighted average exercise price in column b. The Deferred Compensation Plan for Directors also includes deferred stock awards permitted by, and shares issuable under, the 2001 Equity Incentive Plan, but as of September 30, 2005 there were no deferred stock awards outstanding under the Deferred Compensation Plan for Directors. Finally, this number includes 788,957 shares issuable upon the conversion of restricted stock units issuable under the 2001 Equity Incentive Plan at a rate of one share for each restricted stock unit. The restricted stock units convert into class A common stock or class B common stock for no additional consideration. Therefore, these shares are not included in the calculation of weighted average exercise price in column b.

  (3)   The 2001 Equity Incentive Plan provides that an additional 3% of our common stock outstanding as of the end of the prior calendar year becomes available under the Plan on each January 1 following the adoption of the Plan.

 

Certain Relationships and Related Transactions

 

Neubauer Registration Rights Agreement

 

In exchange for Mr. Neubauer’s agreement to relinquish the right under his employment agreement to the benefits of the provisions of the stockholders’ agreement as in effect prior to our public offering in December 2001, we entered into a registration rights agreement with Mr. Neubauer, the Neubauer Family Foundation and certain trusts of which Mr. Neubauer is the settlor. Under the registration rights agreement, we granted Mr. Neubauer and those related parties the right to require us, on three occasions, to register shares held by Mr. Neubauer and these related parties, as well as unlimited piggyback registration rights.

 

Other Transactions

 

We have a split dollar life insurance agreement with Mr. Neubauer. The agreement relates to life insurance policies owned by a trust created by Mr. Neubauer. Pursuant to the agreement, prior to 2003, we paid a substantial portion of the premiums on the policies, such amounts to be repaid from the proceeds of the policies upon their termination. At September 30, 2005, the amount of the premium repayment obligation was $2,497,692. We do not charge interest in each fiscal year on this amount. However, we have in the past captured at least some of the foregone interest because we reduced the amount of the interest that would otherwise accrue on Mr. Neubauer’s deferred compensation. We hold a security interest in the policies to secure the repayment of the premium amount paid by us. This arrangement terminates upon the termination of Mr. Neubauer’s employment (other than by reason of his retirement).

 

17


Security Ownership of Certain Beneficial Owners and Management

 

The following table sets forth certain information regarding beneficial ownership of our common stock as of December 12, 2005 (except as noted below) by (i) each person known to us to own beneficially more than five percent of either class of our common stock, (ii) our executive officers listed under “Executive Compensation—Summary of Cash and Certain Other Compensation,” (iii) each director and nominee for election as a director and (iv) all directors and executive officers as a group. Beneficial ownership is determined in accordance with SEC rules and means voting or investment power with respect to securities. Shares of common stock issuable upon the exercise of stock purchase opportunities and stock options exercisable currently or within 60 days of December 12, 2005 are deemed outstanding and to be beneficially owned by the person holding such purchase opportunity or option for purposes of computing such person’s percentage ownership, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The class B common stock column, for each listed person or persons, includes the shares of class B common stock issuable upon the conversion of such person or persons’ class A common stock and stock options. Except as otherwise noted, each person listed below, either alone or together with members of the person’s family sharing the same household, had sole voting and investment power with respect to the shares listed next to such person’s name.

 

     Shares Beneficially Owned

 
    

Class A

Common Stock


   

Class B

Common Stock


 

Name of Beneficial Owner


   Shares(1)

   %

    Shares(2)(3)

   %

 

Trustee for the RSP and the AUCA Plan(4)

   15,035,660    24.7 %   15,347,698    11.4 %

Ariel Capital Management(5)

   —      —       11,466,203    9.6 %

FMR Corp.(6)

   —      —       6,966,864    5.8 %

Wachovia Corporation(7)

   3,828,984    6.3 %   5,153,423    4.2 %

Joseph Neubauer(8)

   24,115,512    39.6 %   24,115,512    16.8 %

Lawrence T. Babbio, Jr.

   19,638    *     256,225    *  

Patricia C. Barron

   226,912    *     226,912    *  

Robert J. Callander(9)

   421,696    *     421,696    *  

Leonard S. Coleman, Jr.

   79,638    *     79,638    *  

Ronald R. Davenport

   136,138    *     136,138    *  

Thomas H. Kean

   703,458    1.2 %   703,458    *  

James E. Ksansnak(10)

   2,462,700    4.0 %   2,462,700    2.0 %

James E. Preston(11)

   629,638    1.0 %   629,638    *  

Ronald L. Sargent

   15,805    *     18,805    *  

Karl M. von der Heyden

   49,638    *     109,638    *  

L. Frederick Sutherland(12)

   1,820,663    3.0 %   1,880,663    1.6 %

Bart J. Colli

   239,416    *     239,416    *  

Timothy P. Cost

   114,719    *     114,719    *  

Lynn B. McKee

   145,172    *     145,172    *  

All current directors and executive officers as a group (21 persons)

   32,075,403    51.6 %   32,474,134    21.5 %

  (1)  

Applicable percentage of ownership is based on 60,845,411 shares of class A common stock outstanding on December 12, 2005. The numbers in this column include shares that are subject to stock purchase opportunities or stock options exercisable currently, or within 60 days of December 12, 2005, as follows: Mr. Neubauer 50,000 shares, Mr. Babbio 19,638 shares, Ms. Barron 19,638 shares, Mr. Callander 19,638 shares, Mr. Coleman 19,638 shares, Mr. Davenport 19,638 shares, Mr. Kean 19,638 shares, Mr. Ksansnak 19,638 shares, Mr. Preston 19,638 shares, Mr. Sargent 15,805 shares, Mr. von der Heyden 49,638 shares, Mr. Sutherland 35,000 shares, Mr. Colli 131,000 shares, Mr. Cost 110,000 shares, Ms. McKee 66,916 shares and all current directors and executive officers as a group 1,283,893 shares. The numbers in this column also

 

18


 

include shares that are deliverable within 60 days pursuant to grants of restricted stock units as follows: Mr. Neubauer 0 shares, Mr. Sutherland 1,900 shares, Mr. Colli 1,900 shares, Mr. Cost 1,900 shares, Ms. McKee 1,216 shares and all current directors and officers as a group, 14,694 shares. The numbers in this column also include shares representing, for each of the following individuals, his or her portion of the class A common stock held in the Company Composite Fund of the ARAMARK Retirement Savings Plan for Salaried Employees or the ARAMARK Uniform and Career Apparel Group Retirement Savings Plan for which the individual exercises voting and dispositive power as follows: Mr. Neubauer 122,409 shares, Mr. Sutherland, 52,742 shares, Ms. McKee, 19,316 shares and all current directors and executive officers as a group, 207,721 shares.

  (2)   For institutional investors, we have based the disclosure in this table on Schedules 13D and 13G filed with the SEC and received prior to the mailing date of this proxy statement. Amendments to Schedule 13G are required to be filed 45 days after the end of the calendar year. As a result, given our September fiscal year end, there may have occurred changes in the share holdings, as well as the list of the 5% holders, enumerated in this table which have not yet been reported in a Schedule 13G filing.
  (3)   Applicable percentage of ownership is based on 119,302,849 shares of class B common stock outstanding on December 12, 2005. For each listed person or persons, we have included the shares of class B common stock issuable upon the conversion of class A common stock for purposes of computing such person’s percentage ownership of class B common stock, but such shares are not deemed outstanding for the purpose of computing the percentage ownership of any other person. We have also included shares of class A common stock issuable upon the exercise of stock purchase opportunities or stock options exercisable currently or within 60 days of December 12, 2005.
  (4)   As reflected in the records of the Company’s transfer agent, as well as the Company’s own records, as of December 12, 2005, U.S. Trust holds 15,035,660 shares of class A common stock and 312,038 shares of class B common stock. The number of shares of class B common stock shown on the table includes 15,035,660 shares currently issuable upon conversion of an equal number of shares of class A common stock. According to Amendment No. 5 to Schedule 13G filed on April 8, 2005 by U.S. Trust Corporation, a holding company, United States Trust Company of New York, a New York State Chartered Bank and U.S. Trust Company, N.A., a National Bank. U.S. Trust Corporation is a wholly-owned subsidiary of The Charles Schwab Corporation, a publicly traded company. U.S. Trust Corporation has shared voting and dispositive power with respect to all of the shares it holds. United States Trust Company is the independent trustee of the Company stock fund portion of the ARAMARK Retirement Savings Plan for Salaried Employees and the ARAMARK Uniform and Career Apparel Group Retirement Savings Plan. U.S. Trust Corporation’s address is 14 West 47th Street, New York, NY 10036. The vote is passed through by U.S. Trust Corporation to the participants in the relevant plan.
  (5)   As reflected in Amendment No. 1 to Schedule 13G filed on February 14, 2005 by Ariel Capital Management, LLC, an investment adviser (“Ariel”). According to Ariel, it has sole voting power with respect to 10,133,088 shares and sole dispositive power with respect to 11,378,558 shares. All securities reported in Ariel’s Schedule 13G are owned by Ariel’s investment advisory clients, but, to Ariel’s knowledge, no one client owns more than 5% of ARAMARK’s class B common stock. Ariel’s address is: 200 East Randolph Drive, Suite 2900, Chicago, IL 60601. We believe that Ariel has acquired additional shares since the amendment to its 13G was filed and based on its Form 13F for the period ended September 30, 2005, as of such date, Ariel beneficially owned 15,549,094 shares of ARAMARK Class B Common Stock.
  (6)   As reflected in Amendment No. 4 to Schedule 13G filed on February 14, 2005 by FMR Corp., a parent holding company (“FMR”), and Edward C. Johnson, III and Abigail P. Johnson (together, the “Johnsons”), each, an individual. According to FMR, it has sole voting power with respect to 144,004 shares and sole dispositive power with respect to all such shares. According to the Johnsons, each has sole dispositive power with respect to all such shares. Various persons have the right to receive or the power to direct the receipt of the dividends from, or the proceeds from the sale of, the shares, but no one person’s interest in ARAMARK’s class B common stock is more than 5%. Fidelity Management and Research Co, an investment advisor and wholly-owned subsidiary of FMR, is the beneficial owner of 6,828,860 shares as a result of acting as investment advisor to various investment companies. The interest of Fidelity Management Trust Company, a bank and investment manager of institutional accounts, amounted to 119,000. In addition, Strategic Advisors, Inc., an investment advisor and wholly-owned subsidiary of FMR, beneficially owns 19,004 of the shares. The principal address of FMR Corp is 82 Devonshire Street, Boston, Massachusetts 02109.
  (7)  

As reflected in Schedule 13G filed on January 27, 2005 by Wachovia Corporation, a parent holding company (“Wachovia”). According to Wachovia, it has sole voting power with respect to 4,979,821 shares, shared voting power with respect to 162,726 shares, sole dispositive power with respect to

 

19


 

947,628 shares and shared dispositive power with respect to 4,073,132 shares. Wachovia Bank, N.A. and Delaware Trust Capital, each a bank, hold the securities in a fiduciary capacity for their respective customers. As of the record date, 3,828,984 of the shares beneficially owned by Wachovia are held by trusts for the benefit of family members of Joseph Neubauer, for which Wachovia Corporation serves as trustee. The principal address of Wachovia Corporation is One Wachovia Center, Charlotte, North Carolina 28288-0137.

  (8)   The address of Mr. Neubauer is ARAMARK Corporation, ARAMARK Tower, 1101 Market Street, Philadelphia, PA 19107. The number of shares of class A common stock shown on the table includes 20,568,634 shares held directly by Mr. Neubauer, 3,374,469 shares held by The Neubauer Family Foundation (the “Foundation”), over which Mr. Neubauer has majority voting control, and 50,000 shares issuable currently or within 60 days upon exercise of outstanding stock options. The number of class A common stock also include 122,409 shares, which represents Mr. Neubauer’s portion of the class A common stock held in the Company Composite Fund of the ARAMARK Retirement Savings Plan for Salaried Employees for which he exercises voting and investment power.
  (9)   Mr. Callander is not standing for re-election as a Director at the February 2006 annual meeting.
  (10)   The number of shares of class A common stock shown on the table includes 710,114 shares held by the Echo Jupiter Limited Partnership, of which Mr. Ksansnak is the general partner, 90,556 shares held by the James E. Ksansnak Charitable Remainder Unitrust and 1,642,392 shares held by the James E. Ksansnak Irrevocable Trust dated 12/20/2000, which Mr. Ksansnak controls.
  (11)   Includes 303,600 shares held by Preston Associates Limited Partnership over which Mr. Preston has voting and dispositive power.
  (12)   Includes 678,000 shares of class A common stock held by two family partnerships for which Mr. Sutherland serves as a general partner and 232,290 shares held by Mr. Sutherland’s spouse in her own name. Also includes 60,000 shares of class B common stock held by the Chatham Foundation over which Mr. Sutherland has voting and dispositive power.

 

  *   Less than 1%.

 

20


Performance Graph

 

The following graph compares the cumulative return of our class B common stock (measured by the price reported on the New York Stock Exchange consolidated tape) to Standard & Poor’s 500 Stock Index and the Dow Jones Consumer Services Index, formerly the Dow Jones Consumer Noncyclical Index, during the same periods. The graph assumes the investment of $100 in our class B common stock, Standard & Poor’s 500 Stock Index and the Dow Jones Consumer Services Index on December 11, 2001, the date our class B common stock was first traded on the New York Stock Exchange. Dividend reinvestment has been assumed.

 

LOGO

 

Data points for the graph set forth above

Period Ended


     ARAMARK

     S&P 500

     Dow Jones
Consumer
Services


December 11, 2001

     100.00      100.00      100.00

December 31, 2001

     105.91      101.07      103.65

March 29, 2002

     103.94      101.35      105.01

June 28, 2002

     98.43      87.85      91.04

September 27, 2002

     86.02      73.90      78.44

December 27, 2002

     90.79      78.49      76.13

March 28, 2003

     90.75      77.79      78.20

June 27, 2003

     87.28      88.06      91.04

October 3, 2003

     100.98      93.17      97.24

January 2, 2004

     104.45      100.52      102.12

April 2, 2004

     108.87      103.85      106.52

July 2, 2004

     113.23      102.81      102.16

October 1, 2004

     96.61      103.76      101.20

December 31, 2004

     105.41      111.31      113.54

April 1, 2005

     104.70      108.34      108.33

July 1, 2005

     106.20      110.71      110.14

September 30, 2005

     106.85      114.21      108.65

 

21


Report of Audit and Corporate Practices Committee

 

The Audit Committee of our board of directors is composed of four directors, each of whom is an independent director under the New York Stock Exchange Rules and satisfies the additional independence criteria applicable to audit committee members. In addition, our board of directors has determined that Karl M. von der Heyden is an audit committee financial expert as defined by the rules under the Securities Exchange Act of 1934. The Audit Committee charter is available on the Investor Relations section of the ARAMARK website at www.aramark.com.

 

In the performance of its oversight function and in accordance with its responsibilities under its charter, the Audit Committee has reviewed and discussed with management and the independent auditors the Company’s audited financial statements as of and for the fiscal year ended September 30, 2005, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent auditors evaluation of the Company’s internal control over financial reporting.

 

The Audit Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended by the Auditing Standards Board of the American Institute of Certified Public Accountants.

 

Finally, the Audit Committee has received and reviewed the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as amended, has considered whether the provision of audit-related services, tax services and other non-audit services by the independent auditors to ARAMARK is compatible with maintaining the auditor’s independence, and has discussed with the auditors the auditors’ independence.

 

Based on the review and discussions referred to above, the Audit Committee recommended to the board of directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2005.

 

Members of the Audit and Corporate Practices Committee:

 

Karl M. von der Heyden, Chairman

  

Leonard S. Coleman, Jr.

Robert J. Callander

  

Ronald L. Sargent

 

PROPOSAL NO. 2—RATIFICATION OF ACCOUNTANTS

 

The Audit Committee has selected KPMG LLP (“KPMG”) to audit the accounts of the Company for the fiscal year ending September 29, 2006. Although action by the stockholders on this matter is not required, the Audit Committee believes it is appropriate to seek stockholder ratification of this selection to provide a forum for stockholders to express their views with regard to the Audit Committee’s selection. If the stockholders do not ratify the appointment of KPMG, the selection of independent public accountants may be reconsidered by the Audit Committee. The Company has been advised that representatives of KPMG will be present at the Annual Meeting with the opportunity to make a statement if the representatives desire to do so. It is expected that the KPMG representatives will be available to respond to appropriate questions.

 

The board of directors recommends a vote “FOR” the ratification of accountants.

 

22


Relationship with Independent Public Accountants

 

Set forth below is information relating to the aggregate fees billed by KPMG for professional services rendered for each of the last two fiscal years.

 

Audit Fees

 

The aggregate fees billed by KPMG for each of fiscal 2004 and fiscal 2005 for professional services rendered for the audit of our consolidated financial statements, and for the reviews of the unaudited consolidated financial statements included in our Quarterly Reports on Form 10-Q for the fiscal years, for the audit of the company’s internal control over financial reporting and for the attestation of management’s report on the effectiveness of internal control over financial reporting (beginning in fiscal 2005), or for services normally provided by our independent public accountant in connection with statutory or regulatory filings or engagements for those fiscal years were $2,286,512 and $5,551,926, respectively.

 

Audit-Related Fees

 

The aggregate fees billed by KPMG in each of fiscal 2004 and fiscal 2005 for assurance and related services that were reasonably related to performance of the audit or review of our consolidated financial statements and that are not reported under “Audit Fees” above were $1,157,664 and $685,340, respectively. These services consisted of compliance and employee benefit plan audits, reviews of registration statements, accounting consultation and other services.

 

Tax Fees

 

The aggregate fees billed by KPMG LLP in each of fiscal 2004 and fiscal 2005 for professional services rendered for tax compliance, tax advice and tax planning were $394,000 and $517,062, respectively. These services consisted primarily of international compliance assistance (for 2005, $129,256) and tax planning advice.

 

All Other Fees

 

No fees were billed by KPMG in fiscal 2004 and fiscal 2005 for products and services provided, other than the services noted above.

 

Pre-approval of services

 

The Audit Committee annually reviews and pre-approves the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee. The Audit Committee has also adopted a Pre-Approval Policy that contains a list of pre-approved services, which the Audit Committee may revise from time to time, based on subsequent determinations. The Audit Committee has delegated pre-approval authority to the chairman of the Audit Committee, or in his absence or unavailability, to another specified member of the Audit Committee. The chairman of the Audit Committee or such specified member will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. All of our audit-related fees and tax fees were pre-approved by the Audit Committee or the chairman of the Committee.

 

Financial Statements

 

A copy of our 2005 Annual Report is being delivered to stockholders with this Proxy Statement. Stockholders are referred to the Annual Report for financial and other information about us.

 

23


Advance Notice Procedures

 

In accordance with our by-laws, notice relating to nominations for director or proposed business to be considered at the 2007 annual meeting of stockholders must be given no earlier than October 22, 2006 nor later than November 21, 2006. These requirements do not affect the deadline for submitting stockholder proposals for inclusion in the proxy statement. Stockholders may request a copy of the by-law provisions discussed above from the Secretary, ARAMARK Corporation, ARAMARK Tower, 1101 Market Street, Philadelphia, Pennsylvania 19107.

 

Stockholder Proposals

 

Stockholders may submit proposals on matters appropriate for stockholder action at annual meetings in accordance with regulations adopted by the SEC. Any proposal that an eligible stockholder desires to have presented at the 2007 annual meeting of stockholders concerning a proper subject for inclusion in the proxy statement and for consideration at the annual meeting will be included in our proxy statement and related proxy card if we receive it no later than September 7, 2006.

 

Householding

 

SEC rules permit a single set of annual reports and proxy statements to be sent to any household at which two or more stockholders reside if they appear to be members of the same family. Each stockholder continues to receive a separate proxy card. This procedure is referred to as householding. We have instituted householding with respect to our stockholders of record. Accordingly, a single proxy statement and annual report will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders.

 

Once a stockholder has received notice from the Company that the Company will be householding communications to the stockholder’s address, householding will continue until the stockholder is notified otherwise or until the stockholder revokes his or her consent. If at any time a stockholder no longer wishes to participate in householding and would prefer to receive a separate proxy statement and annual report, he or she should notify the Company’s transfer agent, Mellon Investor Services, at the address or phone number set forth below. Any stockholder can receive a copy of the Company’s proxy statement and annual report by contacting the ARAMARK Shareholder Services Group at Mellon Investor Services, Newport Office Center VII, 480 Washington Blvd., Jersey City, NJ 07310 or by calling Mellon Investor Services at: 800-803-6180.

 

Stockholders who currently receive multiple copies of the proxy statement and annual report at their address and would like to request householding of their communications should contact the Company’s transfer agent, Mellon Investor Services.

 

24


LOGO

 

ARAMARK CORPORATION

PROXY CARD

SOLICITED BY THE BOARD OF DIRECTORS

Joseph Neubauer, Bart J. Colli and Harold B. Dichter (each with power of substitution) are hereby authorized to vote all the shares which the undersigned would be entitled to vote if personally present at the annual meeting of stockholders of ARAMARK Corporation (the “Company”) to be held on February 7, 2006 and at any adjournments or postponements.

IF YOU SPECIFY A CHOICE AS TO THE ACTION TO BE TAKEN ON AN ITEM, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SUCH CHOICE. IF YOU DO NOT SPECIFY A CHOICE, IT WILL BE VOTED FOR PROPOSALS 1 AND 2 AND AT THE DISCRETION OF THE PROXY HOLDER AS TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.

see other side

Address Change/Comments (Mark the corresponding box on the reverse side)

FOLD AND DETACH HERE

YOUR VOTE IS IMPORTANT!

You can vote in one of three ways:

1. Call toll free 1-866-540-5760 on a Touch Tone telephone and follow the instructions on the reverse side. There is NO CHARGE to you for this call. Outside the United States you may fax your signed proxy card to 201-680-4671. You must fax both the front and back of the card.

or

2. Vote by Internet at our Internet Address: http://www.proxyvoting.com/rmk or

3. Mark, sign and date your proxy card and return it promptly in the enclosed envelope.

PLEASE VOTE


LOGO

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.

Please Mark Here for Address Change or Comments

SEE REVERSE SIDE

Please mark your votes as indicated in this example

1. Election of Directors

FOR all nominees listed below (except as marked to the contrary)

WITHHOLD AUTHORITY to vote for all nominees listed below

Nominees:

01 Patricia C. Barron, 02 Ronald R. Davenport, 03 Ronald L. Sargent

(To withhold authority to vote FOR write name(s) on line:

2. Proposal to ratify the appointment of KPMG LLP as independent public accountants for fiscal 2006.

FOR AGAINST ABSTAIN

3. In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting and at any adjournments or postponements thereof.

Signature Signature Date

Please sign exactly as name appears. If shares are held as joint tenants, both joint tenants should sign. Attorneys-in-fact, executors, administrators, trustees, guardians, corporation officers or others signing in a representative capacity should indicate the capacity in which they are signing.

FOLD AND DETACH HERE

Vote by Internet or Telephone or Mail

24 Hours a Day, 7 Days a Week

Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to annual meeting day for Common Stockholders.

Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

Internet http://www.proxyvoting.com/rmk

Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.

OR

Telephone

1-866-540-5760

Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.

OR

Mail

Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.

If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.


LOGO

 

If you wish to vote all of your 401(k) Plan shares in the same manner as shares held outside the Plans, you do NOT need to complete the section below. Simply mark your voting instructions on the front of this card.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES FOR DIRECTORS AND FOR THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS

FOR all nominees listed below (except as marked to the contrary)

WITHHOLD AUTHORITY to vote for all nominees listed below

Nominees:

01 Patricia C. Barron, 02 Ronald R. Davenport, 03 Ronald L. Sargent

(To withhold authority to vote FOR write name(s) on line:

2. Proposal to ratify the appointment of KPMG LLP as independent public accountants for fiscal 2006.

FOR AGAINST ABSTAIN

FOLD AND DETACH HERE

Proxy/Voting Instruction Card Solicited by the Board of Directors for the Annual Meeting of Stockholders on February 7, 2006

401(k) Plan Participants’ Voting Instructions

When casting your vote, you are directing the trustee of the ARAMARK Retirement Savings Plan for Salaried Employees and ARAMARK Uniform and Career Apparel Group Retirement Savings Plan to vote the ARAMARK shares credited to your account(s) under the Plan(s) in accordance with your instructions, and in accordance with the judgment of the trustee upon other business as may properly come before the meeting and any adjournments or postponements thereof. When you vote these shares, you should consider your long-term interests as a Plan participant.

In addition, you are also directing the trustee to vote shares held in the Plans that have not been voted by other Plan participants and shares that have not yet been credited to participants’ accounts, in the same proportion as those shares for which timely voting instructions are received by the trustee. When you direct the vote of these shares, you have a special responsibility to consider the long-term interests of other participants.

Voting on the front of this proxy/voting instruction card will be deemed an instruction to the trustee to apply the same vote for shares held outside the Plans to shares credited to your accounts under ARAMARK Retirement Savings Plan for Salaried Employees and ARAMARK Uniform and Career Apparel Group Retirement Savings Plan and shares not voted or shares that have not yet been credited to Plan participants’ accounts, if applicable.


LOGO

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.

1. Election of Directors

FOR all nominees listed below (except as marked to the contrary)

WITHHOLD AUTHORITY to vote for all nominees listed below

Nominees:

01 Patricia C. Barron, 02 Ronald R. Davenport, 03 Ronald L. Sargent

(To withhold authority to vote FOR write name(s) on line:

Please mark your votes as indicated in this example

2. Proposal to ratify the appointment of KPMG LLP as independent public accountants for fiscal 2006.

FOR AGAINST ABSTAIN

3. In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the meeting and at any adjournments or postponements thereof.

MARK THIS BOX IF YOU WANT TO VOTE YOUR 401(K) PLAN SHARES DIFFERENTLY ON THE REVERSE SIDE

Joseph Neubauer, Bart J. Colli and Harold B. Dichter (each with power of substitution) are hereby authorized to vote all the shares which the undersigned would be entitled to vote if personally present at the annual meeting of stockholders of ARAMARK Corporation (the “Company”) to be held on February 7, 2006 and at any adjournments or postponements.

IF YOU SPECIFY A CHOICE AS TO THE ACTION TO BE TAKEN ON AN ITEM, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SUCH CHOICE. IF YOU DO NOT SPECIFY A CHOICE, IT WILL BE VOTED FOR PROPOSALS

1 AND 2 AND AT THE DISCRETION OF THE TRUSTEE OR

PROXY HOLDER AS TO ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.

Signature Signature Date

Please sign exactly as name appears. If shares are held as joint tenants, both joint tenants should sign. Attorneys-in-fact, executors, administrators, trustees, guardians, corporation officers or others signing in a representative capacity should indicate the capacity in which they are signing.

FOLD AND DETACH HERE

Vote by Internet or Telephone or Mail

24 Hours a Day, 7 Days a Week

Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to annual meeting day for Common Stockholders.

Internet and telephone voting is available through 11:59 PM Eastern Time January 31, 2006 for 401(k) Plan Participants.

Your Internet or telephone vote authorizes the named proxies or the trustee, as applicable, to vote your shares in the same manner as if you marked, signed and returned your proxy/voting instruction card.

Internet http://www.proxyvoting.com/rmk-emp

Use the Internet to vote your proxy. Have your proxy/voting instruction card in hand when you access the web site.

OR

Telephone

1-866-540-5760

Use any touch-tone telephone to vote your proxy. Have your proxy/voting instruction card in hand when you call.

OR

Mail

Mark, sign and date your proxy/voting instruction card and return it in the enclosed postage-paid envelope.

If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy/voting instruction card.