SHARE-BASED COMPENSATION:

In connection with the Transaction, the Parent Company established the ARAMARK Holdings Corporation 2007 Management Stock Incentive Plan (the "2007 MSIP"). Incentive awards under the 2007 MSIP may be granted to employees or directors of, or consultants to, the Parent Company or one of its affiliates, including the Company, in the form of non-qualified stock options, unvested shares of common stock, the opportunity to purchase shares of common stock and other awards that are valued in whole or in part by reference to, or are otherwise based on, the fair market value of the Parent Company’s shares. The 2007 MSIP permits the granting of awards of up to 40.4 million shares of common stock of the Parent Company. As of September 28, 2012, there were 5.2 million shares available for grant. Under the 2007 MSIP, the terms of the awards are fixed at the grant date.

The Parent Company adopted an amended and restated ARAMARK Holdings Corporation 2007 MSIP (the Amended Stock Incentive Plan) on June 21, 2011. The Amended Stock Incentive Plan incorporates certain changes from prior amendments to the 2007 MSIP and provides for the grant of Installment Stock Purchase Opportunities. The Amended Stock Incentive Plan also provides that shares repurchased by the Parent Company from former employees will become eligible for issuances as stock options or purchased stock.

Share-based compensation expense charged to expense for fiscal 2012, fiscal 2011 and fiscal 2010 was approximately $15.7 million, before taxes of approximately $6.1 million, approximately $17.3 million, before taxes of approximately $6.8 million, and approximately $21.3 million, before taxes of approximately $8.3 million, respectively. The compensation expense recognized is classified as "Selling and general corporate expenses" in the Consolidated Statements of Income. No compensation expense was capitalized.

Cash received from option exercises during fiscal 2012, fiscal 2011 and fiscal 2010 was $6.7 million, $1.0 million and $0.1 million, respectively. For fiscal 2012, fiscal 2011 and fiscal 2010, the amount of tax benefits included in “Other financing activities” in the Consolidated Statements of Cash Flows was $4.5 million, $0.7 million and ($0.1) million, respectively.

Stock Options

Each award of stock options under the Amended Stock Incentive Plan is comprised of two types of stock options. One-half of the options awarded vest solely based upon continued employment over a specific period of time, generally four years (“Time-Based Options”). One-half of the options awarded vest based both upon continued employment and upon the achievement of a level of earnings before interest and taxes (“EBIT”), as defined in the 2007 MSIP, over time, generally four years (“Performance-Based Options”). The Performance-Based Options may also vest in part or in full upon the occurrence of specific return-based events. The exercise price for Time-Based Options and Performance-Based Options equals the fair value of the Parent Company’s stock on the date of the grant. All options remain exercisable for ten years from the date of grant.

Time-Based Options

The fair value of the Time-Based Options granted was estimated using the Black-Scholes option pricing model and the weighted-average assumptions noted in the table below. Since the Company’s stock is not publicly traded, the expected volatility is based on an average of the historical volatility of the Company’s competitors’ stocks over the expected term of the stock options. The expected life represents the period of time that options granted are expected to be outstanding and is calculated using the simplified method prescribed by Securities and Exchange Commission (“SEC”) rules and regulations due to the lack of history. The risk-free rate is based on the U.S. Treasury security with terms equal to the expected life of the option as of the grant date.



	Fiscal Year Ended	Fiscal Year Ended	Fiscal Year Ended
	September 28, 2012	September 30, 2011	October 1, 2010
Expected volatility	30%	30%	30%
Expected dividend yield	0%	0%	0%
Expected life (in years)	6.25	6.25	6.25
Risk-free interest rate	1.04% - 1.61%	1.41% - 2.86%	2.04% - 3.31%

The weighted-average grant-date fair value of Time-Based Options granted during fiscal 2012, fiscal 2011 and fiscal 2010 was $4.57, $4.42 and $5.10 per option, respectively.

Compensation expense for Time-Based Options is recognized on a straight-line basis over the vesting period during which employees perform related services. Approximately $8.5 million, $10.3 million and $14.1 million was charged to expense during fiscal 2012, fiscal 2011 and fiscal 2010 for Time-Based Options, respectively. The Company has applied a forfeiture assumption of 8.7% per annum in the calculation of such expense.

As of September 28, 2012, there was approximately $18.0 million of unrecognized compensation expense related to nonvested Time-Based Options, which is expected to be recognized over a weighted-average period of approximately 2.66 years.

A summary of Time-Based Options activity is presented below:



Options	Shares (000s)		Weighted- Average Exercise Price		Aggregate Intrinsic Value ($000s)		Weighted-Average Remaining Term (Years)
Outstanding at September 30, 2011	15,982		$	8.73
Granted	2,699		$	14.17
Exercised	(2,195	)	$	7.52
Forfeited and expired	(775	)	$	11.45
Outstanding at September 28, 2012	15,711		$	9.70	$	85,945	6.5
Exercisable at September 28, 2012	10,025		$	7.98	$	72,062	5.2
Expected to vest at September 28, 2012	5,093		$	12.63	$	12,948	8.6

The total intrinsic value of Time-Based Options exercised during fiscal 2012, fiscal 2011 and fiscal 2010 was $15.0 million, $8.9 million and $1.8 million, respectively. The total fair value of Time-Based Options that vested during fiscal 2012, fiscal 2011 and fiscal 2010 was $7.9 million, $15.8 million and $11.0 million, respectively.

Performance-Based Options

The fair value of the Performance-Based Options was estimated using the Black-Scholes option pricing model and the weighted-average assumptions noted in the table below. Since the Company’s stock is not publicly traded, the expected volatility is based on an average of the historical volatility of the Company’s competitors’ stocks over the expected term of the stock options. The expected life represents the period of time that options granted are expected to be outstanding and is calculated using the simplified method prescribed by SEC rules and regulations due to the lack of history. The risk-free rate is based on the U.S. Treasury security with terms equal to the expected life of the option as of the grant date.



	Fiscal Year Ended	Fiscal Year Ended	Fiscal Year Ended
	September 28, 2012	September 30, 2011	October 1, 2010
Expected volatility	30%	30%	30%
Expected dividend yield	0%	0%	0%
Expected life (in years)	5.0 - 6.0	5.5 - 7.0	5.5 - 7.0
Risk-free interest rate	0.73% - 1.04%	1.43% - 2.86%	1.41% - 3.31%

The weighted-average grant-date fair value of the Performance-Based Options granted during fiscal 2012, fiscal 2011 and fiscal 2010 was $3.91, $4.21 and $4.98 per option, respectively.

Compensation expense for Performance-Based Options is recognized on a principally straight-line basis over the requisite performance and service periods. The Company recognized compensation expense of approximately $3.6 million, $5.1 million and $6.7 million during fiscal 2012, fiscal 2011 and fiscal 2010 for Performance-Based Options, respectively. The Company has applied a forfeiture assumption of 8.7% per annum in the calculation of such expense.

On June 21, 2011, the Parent Company Board approved new annual and cumulative EBIT targets for fiscal 2011 and beyond. Approximately 3.7 million options were affected by these modifications. The fair values of these Performance-Based Options were revalued at the award modification date. The fair value of the Performance-Based Options modified during fiscal 2011 was estimated using the Black-Scholes option pricing model and the following weighted-average assumptions: estimated volatility (30%), expected dividend yield (0%), expected life (3.5-6.8 years) and risk-free interest rate (0.69%-2.27%). The weighted-average fair value of the Performance-Based Options modified during fiscal 2011 was $4.66 per option.

On June 21, 2011, the Parent Company Board also agreed that for awards granted on or after June 21, 2011, annual and cumulative EBIT targets for future fiscal years beginning after fiscal 2011 will be set within 90 days of the beginning of each fiscal year. The Amended Stock Incentive Plan also provides that if an annual EBIT target is established for fiscal 2012 or later years for options granted after June 21, 2011 that is less than the annual EBIT target for such fiscal year for outstanding stock options, the EBIT target for such outstanding options will be reduced to the lower EBIT target.

On December 9, 2009, the Parent Company Board waived the EBIT target for fiscal 2009 with respect to approximately 1.1 million options representing 35% of the portion of the Performance-Based Options whose vesting was subject to the achievement of the Company’s fiscal 2009 EBIT target. Accordingly, such portion of the Performance-Based Options vested when the time-based vesting requirement of such options was satisfied. The fair value of these Performance-Based Options was revalued at the award modification date. The fair value of the Performance-Based Options modified during fiscal 2010 was estimated using the Black-Scholes option pricing model and the following weighted-average assumptions: expected volatility (30%), expected dividend yield (0%), expected life (3.60-6.80 years) and risk-free interest rate (1.23%-3.04%). The weighted-average fair value of the Performance-Based Options modified during fiscal 2010 was $5.19 per option.

A summary of Performance-Based Options activity is presented below:



Options	Shares (000s)		Weighted- Average Exercise Price		Aggregate Intrinsic Value ($000s)		Weighted-Average Remaining Term (Years)
Outstanding at September 30, 2011	16,051		$	8.73
Granted	2,699		$	14.17
Exercised	(1,045	)	$	7.25
Forfeited and expired	(1,776	)	$	9.41
Outstanding at September 28, 2012	15,929		$	9.68	$	87,487	6.4
Exercisable at September 28, 2012	5,391		$	8.12	$	38,019	5.3
Expected to vest at September 28, 2012	—		$	—	$	—	0

The total intrinsic value of Performance-Based Options exercised during fiscal 2012, fiscal 2011 and fiscal 2010 was $7.5 million, $5.0 million and $1.5 million, respectively. The total fair value of Performance-Based Options that vested during fiscal 2012, fiscal 2011 and fiscal 2010 was $6.7 million, $0 million and $5.5 million, respectively.

Installment Stock Purchase Opportunities

Installment Stock Purchase Opportunities (“ISPOs”) provide the grantee the option to purchase shares of the Parent Company’s common stock. ISPO awards are divided into five equal installments. The first installment, which represents 20% of the total award, vests immediately upon grant and will be exercisable until the first anniversary of the grant date. At least 25% of the first installment must be exercised or the entire grant (including the remaining four installments) will expire and any part of the first installment that is not exercised during the exercise period will also expire, in each case on the first anniversary of the grant date. If the exercise conditions of the first installment are met, the remaining four installments will vest on December 15th of the first calendar year following the year in which the ISPO is granted, and on each of the three anniversaries of such date, respectively, and will be exercisable for 31 days thereafter. Any of these remaining four installments that becomes vested but is not exercised during its respective exercise period will expire at the end of its exercise period, but the holder may still exercise any subsequent installments when they vest in future years.

The fair value of the ISPOs was estimated using the Black-Scholes option pricing model and the following weighted-average assumptions noted in the table below. Since the Company’s stock is not publicly traded, the expected volatility is based on an average of the historical volatility of the Company’s competitors’ stocks over the expected term of the stock options. The expected life represents the period of time that options granted are expected to be outstanding and is calculated using the simplified method prescribed by SEC rules and regulations due to the lack of history. The risk-free rate is based on the U.S. Treasury security with terms equal to the expected life of the option as of the grant date.



	Fiscal Year Ended	Fiscal Year Ended
	September 28, 2012	September 30, 2011
Expected volatility	30%	30%
Expected dividend yield	0%	0%
Expected life (in years)	2.5	2.5
Risk-free interest rate	0.24% - 0.31%	0.33% - 0.68%

The weighted-average grant-date fair value of ISPOs granted during fiscal 2012 and fiscal 2011 was $2.80 and $2.47 per option, respectively.

Compensation expense for ISPOs is recognized on a straight-line basis over the vesting period during which employees perform related services. The Company recorded approximately $1.0 million and $0.8 million of compensation expense related to these awards during fiscal 2012 and fiscal 2011, respectively. The Company has applied a forfeiture assumption of 8.7% per annum in the calculation of such expense.

As of September 28, 2012, there was approximately $2.4 million of unrecognized compensation expense related to nonvested ISPOs, which is expected to be recognized over a weighted-average period of approximately 3.70 years.

A summary of ISPOs activity is presented below:



Options	Shares (000s)		Weighted- Average Exercise Price		Aggregate Intrinsic Value ($000s)		Weighted-Average Remaining Term (Years)
Outstanding at September 30, 2011	977		$	12.69
Granted	920		$	14.67
Exercised	(216	)	$	13.86
Forfeited and expired	(278	)	$	12.69
Outstanding at September 28, 2012	1,403		$	13.81	$	1,911	3.7
Exercisable at September 28, 2012	63		$	14.46	$	45	.5
Expected to vest at September 28, 2012	1,207		$	13.65	$	1,838	9.2

The total intrinsic value of ISPOs exercised during fiscal 2012 was $0.2 million. The total fair value of ISPOs that vested during fiscal 2012 was $0.9 million.

Seamless Unit Options

During fiscal 2011, Seamless established the Seamless North America 2011 Equity Incentive Plan (the "Plan"). The Plan allows for the issuance of unit options and other equity-based awards in Seamless. The unit options awarded vest solely based on continued employment over a specific period of time, generally four years. The Company recognized compensation expense of approximately $2.1 million and $0.1 million for Seamless unit options during fiscal 2012 and fiscal 2011, respectively. During fiscal 2012 and fiscal 2011, Seamless granted approximately 3.5 million and 6.0 million unit options, respectively.

Deferred Stock Units

Deferred stock units are issued only to non-employee members of the Board of Directors of the Parent Company who are not representatives of one of the Sponsors and represent the right to receive shares of the Parent Company’s common stock in the future. Each deferred stock unit will be converted to one share of the Parent Company’s common stock six months and one day after the date on which such director ceases to serve as a member of the Board of Directors. The grant-date fair value of deferred stock units is based on the fair value of the Parent Company’s common stock. Since the deferred stock units are fully vested upon grant, compensation expense for the entire award is recognized immediately upon grant. The Company granted 34,480 deferred stock units during fiscal 2012. The compensation cost charged to expense during fiscal 2012, fiscal 2011 and fiscal 2010 for deferred stock units was approximately $0.5 million, $1.0 million and $0.5 million, respectively.