EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
     THIS AGREEMENT is made and entered into effective as of the 19th day of
December, 2005, (the “Effective Date”) by and between G&K SERVICES, INC., a
Minnesota corporation with its principal business office in the State of
Minnesota (“Employer”, as further defined in Section 1.10 below); and David
Miller a resident of the State of Minnesota (“Executive”).
INTRODUCTION

  A.   Employment. Executive is employed by Employer under this Agreement the
terms and conditions of this Agreement. As such, Executive is subject to the
same polices, terms and conditions as those described in the Employer’s employee
handbook, its Code of Ethics, policies, and employee benefit plans (as modified
from time to time by Employer), except as otherwise specifically provided in
this Agreement.     B.   Protection of Employer. In performing Executive’s
job-related duties and responsibilities for Employer, Executive will have
extensive access to Employer’s confidential design, manufacturing, distribution,
marketing and sales information which Employer has developed at great expense,
time and effort, as well as opportunities to cultivate valuable business
relationships with employees, customers and vendors of Employer. This
information is Confidential Information, as defined in Section 8 of this
Agreement, and its disclosure to a competitor would cause irreparable harm to
Employer. Therefore, Employer is not willing to offer Executive employment and
the additional benefits contained in this Agreement unless Executive signs this
Agreement, providing Employer with reasonable protection for its Confidential
Information as well as other the protections set forth below.

AGREEMENT
     In consideration of the facts recited above, which are a part of this
Agreement, and the parties’ mutual undertakings in this Agreement, Employer and
Executive agree as follows:
ARTICLE 1
DEFINITIONS
     Capitalized terms used generally in this Agreement will have their defined
meaning throughout the Agreement. The following terms will have the meanings set
forth below; unless the context clearly requires otherwise.
     1.1 “Agreement” means this Agreement, as it may be amended from time to
time.
     1.2 “Base Salary” means the total annual cash compensation payable to
Executive on a regular periodic basis under this Agreement Section 3.1, without
regard to any voluntary salary deferrals or reductions to fund employee
benefits.
     1.3 “Board” means the Board of Directors of Employer.

 

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     1.4 “Cause” has the meaning set forth in Section 4.2.
     1.5 “Change in Control” has the meaning set forth in Article 7.
     1.6 “Confidential Information” has the meaning set forth in Section 8.1.
     1.7 “Date of Termination” has the meaning set forth in Section 4.6.
     1.8 “Disability” means the unwillingness or inability of Executive to
perform the essential functions of Executive’s position (with or without
reasonable accommodation) under this Agreement for a period of ninety (90) days
(consecutive or otherwise) within any period of six (6) consecutive months
because of Executive’s incapacity due to physical or mental illness, bodily
injury or disease, if Executive has not returned to the full-time performance of
the Executive’s duties within ten (10) days after a Notice of Termination is
issued by Employer; provided, however, that if Executive (or Executive’s legal
representative) does not agree with a determination of the existence of a
Disability (or the existence of a physical or mental illness or bodily injury or
disease), this determination will be subject to the certification of a qualified
medical doctor mutually agreed to by Employer and Executive. In the absence of
agreement, each party will nominate a qualified medical doctor and the two
doctors will select a third doctor, who will make the determination as to
Disability. The decision of the designated physician will be binding upon the
parties.
     1.9 “Effective Date” has the meaning referred to in the first paragraph of
this Agreement.
     1.10 “Employer” means all of the following, jointly and severally: (a) G&K
Services, Inc., (b) any Subsidiary of G&K Services, Inc. and (c) any Successor
of G&K Services, Inc.
     1.11 “Executive” means the individual named in the first paragraph of this
Agreement.
     1.12 “Notice of Termination” has the meaning set forth in Section 4.6(a).
     1.13 “Plan” means any bonus or incentive compensation agreement, plan,
program, policy or arrangement sponsored, maintained or contributed to by
Employer, to which Employer is a party or under this Agreement which employees
of Employer are covered, including, without limitation, (a) any stock option or
any other equity-based compensation plan; (b) any annual or long-term incentive
(bonus) plan; (c) any employee benefit plan, such as a thrift, profit sharing,
deferred compensation, medical, dental, disability income, accident, life
insurance, automobile allowance, perquisite, fringe benefit, vacation, sick or
parental leave, separation or relocation plan or policy and (d) any other
agreement, plan, program, policy or arrangement intended to benefit employees or
executive officers of Employer.
     1.14 “Subsidiary” means any corporation or other business entity controlled
by Employer.
     1.15 “Successor” means any corporation, individual, group, association,
partnership, limited liability company, firm, venture or other entity or person
that, subsequent to the Effective Date, succeeds to the actual or practical
ability to control (either immediately or with the passage of time)
substantially all of Employer and/or Employer’s business and/or assets, directly
or indirectly, by merger, consolidation,
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recapitalization, purchase, liquidation, redemption, assignment, similar
corporate transaction, operation of law or otherwise.
ARTICLE 2
EMPLOYMENT AND DUTIES
     2.1 Employment. Under this Agreement the terms and conditions of this
Agreement, Employer offers and Executive accepts employment for an indefinite
term. Executive will serve in the capacity of President, US Rental Operations,
reporting to Employer’s Chief Executive Officer or, subject to Executive’s
rights under this Agreement, such other title and position as the Chief
Executive Officer will determine. This Agreement and Executive’s employment may
be terminated by Employer at any time and for any reason, with or without cause.
     2.2 Duties. While Executive is employed under this Agreement, and excluding
any periods of vacation, sick, disability or other leave to which Executive is
entitled, Executive agrees to devote substantially all of Executive’s attention
and time during normal business hours to the business and affairs of Employer
and to use Executive’s best efforts to perform faithfully and efficiently such
responsibilities assigned to Executive from time to time.
     Executive will comply with Employer’s policies and procedures including
those described in the Company’s employee handbook, Code of Ethics, policies,
and employee benefit plans of Employer, as modified from time to time by
Employer; provided, however, that to the extent these policies and procedures
are inconsistent with this Agreement, the provisions of this Agreement will
control.
     2.3 Relationship of Parties. The relationship between Employer and
Executive will be that of employer and employee. Except as otherwise
specifically provided in Article 4, nothing in this Agreement will be construed
to give Executive any interest in the assets of Employer. All of the records and
files pertaining to Employer’s suppliers, licensors, licensees and customers are
specifically acknowledged to be the property of Employer and not that of
Executive.
ARTICLE 3
COMPENSATION AND BENEFITS
     3.1 Base Salary. Commencing as of the Effective Date, Employer will pay
Executive a Base Salary at an annual rate of Two Hundred Ninety Thousand Dollars
($290,000.00), or such other annual rate as may from time to time be approved by
the Board. The Base Salary is to be paid in substantially equal regular periodic
payments in accordance with Employer’s regular payroll practices. If Executive’s
Base Salary is changed at any time during Executive’s employment by Employer,
the changed amount will become the Base Salary under this Agreement, subject to
any subsequent changes.
     3.2 Other Compensation and Benefits. While Executive is employed by
Employer under this Agreement:
     (a) Executive will have an annual incentive opportunity equal to fifty
percent (50%) at target (100% achievement of objectives) under Employer’s
management incentive plan in effect for its 2006 fiscal year, and incentives
determined under Employer’s management incentive plans for future fiscal years.
For fiscal year 2006 there is no cap on the maximum payout on the
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management incentive plan for members of Employer’s Executive Team. Executive is
a member of Employer’s Executive Team. For fiscal year 2006 only, Employer
guarantees a minimum payout of fifty percent (50%) of Executive’s target
incentive opportunity, prorated based upon the Effective Date.
     (b) For fiscal year 2006 only, and as a bonus for signing and implementing
this Agreement, Employer will pay to Executive the sum of Twenty-Five Thousand
Dollars ($25,000.00) payable with Executive’s first paycheck as an employee.
     (c) As determined by the Board, Exertive may receive an initial grant of
stock option shares as approved by the Board, with three (3) year graded
vesting, and a grant of restricted stock shares with five (5) year graded
vesting. Executive will be eligible for an annual equity grant of stock,
starting as of the beginning of fiscal year 2007, as determined by the Board for
performance at target with potential upside for superior performance against
objectives.
     (d) Executive will be permitted to participate in all Plans for which
Executive is or becomes eligible as provided by the respective Plan terms.
Employer may, in its sole discretion, amend or terminate any Plan that provides
benefits generally to its employees or its executive officers.
     (e) As a member of Employer’s Executive Team, Executive will receive a
leased vehicle of Executive’s choice with a value of up to Fifty-Five Thousand
Dollars ($55,000.00), and will be eligible for a financial planning benefit of
up to Two Thousand Five Hundred ($2,500.00) annually, and an annual executive
physical paid for by Employer.
     (f) Executive is eligible for up to four (4) weeks paid vacation annually.
     (g) Executive will also be entitled to participate in or receive benefits
under any Plan made available by Employer in the future to its executives and
key management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of the Plans and the preceding provisions
of this Section 3.2.
     3.3 Limitation on Right to Deferred Compensation. The rights of Executive,
or Executive’s beneficiaries or estate, to any deferred compensation under this
Agreement will be solely those of an unsecured creditor of Employer. Neither
Executive nor any of Executive’s beneficiaries or estate will be entitled to
assign or transfer (except to Employer) any right to receive any part of any
deferred compensation amounts under this Agreement and, in the event of any
attempt to assign or transfer any of these amounts, Employer will have no
further liability under this Agreement for these amounts.
ARTICLE 4
TERMINATION
     Executive’s employment with the Employer may be terminated at any time as
follows:
     4.1 Death or Disability This Agreement and Executive’s employment under
this Agreement will, upon Executive’s death or Disability, terminate as of the
applicable Date of Termination.
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     4.2 Termination by Employer for Cause. Employer may terminate Executive’s
at will employment at any time for Cause, with or without advance notice (except
as otherwise provided in this Section 4.2). For purposes of this Agreement,
“Cause” means any of the following, with respect to Executive’s position of
employment with Employer:
     (a) Executive’s failure or refusal to perform the duties and
responsibilities set forth under this Agreement if the failure or refusal is not
due to Disability or a physical or mental illness or bodily injury or disease;
     (b) use of alcohol or drugs that interferes with the performance of
Executive’s obligations under this Agreement or Executive’s duties,
responsibilities and obligation as an employee of Employer;
     (c) Executive’s indictment for or conviction of (including entering a
guilty plea or plea of no contest to) a felony or of any crime involving moral
turpitude, fraud, dishonesty or theft;
     (d) any material dishonesty of Executive involving or affecting Employer;
     (e) any gross negligence or other willful or intentional act or omission of
Executive having the effect or reasonably likely to have the effect of injuring
the reputation, business or business relationships of Employer or Executive in a
material way;
     (f) any willful or intentional breach by Executive of a fiduciary duty to
Employer;
     (g) any court order or settlement agreement prohibits Executive’s continued
employment with Employer;
     (h) any willful or intentional breach by Executive of a written or oral
non-competition agreement, confidentiality agreement, proprietary information
agreement, trade secret agreement or any other agreement which would prevent
Executive from working for Employer and/or performing Executive’s duties at
Employer;
     (i) any willful or intentional breach by Executive of Employer’s standard
business practices and policies, including, without limitation, policies against
racial or sexual discrimination or harassment; and
     (j) any material breach by Executive (not covered by any of the above
clauses (a) through (i)) of any material term, provision or condition of this
Agreement, if the breach is not cured (to the extent curable) within five
(5) days after written notice of the breach is issued to Executive from
Employer.
     For purposes of this Section 4.2, no act, or failure to act, on Executive’s
part will be considered “dishonest,” “willful” or “intentional” unless done, or
omitted to be done, by Executive in bad faith and without reasonable belief that
Executive’s action or omission was in or not opposed to, the best interest of
Employer. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for
Employer will be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of Employer. Furthermore, the
term
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“Cause” will not include ordinary negligence or failure to act, whether due to
an error in judgment or otherwise, if Executive has exercised substantial
efforts in good faith to perform the duties reasonably assigned or appropriate
to the position.
     4.3 Termination by Executive for Good Reason. After a Change in Control (as
defined in Article 7), Executive may voluntarily resign from employment under
this Agreement with or without Good Reason (as this term is defined in
Section 7.1(f)).
     4.4 Voluntary Termination by Executive. Executive may, upon thirty
(30) days notice to Employer, terminate Executive’s at will employment at any
time for any reason. During the thirty (30) day period after notice is given
Executive agrees that, at Employer’s request and sole discretion, Executive will
continue to render Executive’s normal service to Employer to the best of
Executive’s ability, and Employer will continue to pay Executive the Base
Salary.
     4.5 Termination by Employer without Cause. Employer may, upon written
notice, terminate Executive’s at will employment without cause, at any time and
for any reason or no reason.
     4.6 Notice of Termination and Date of Termination.
     (a) For purposes of this Agreement, a “Notice of Termination” will mean a
notice that indicates the date on which termination of Executive’s employment is
effective. Any termination by Employer or by Executive under to this Agreement
(other than Executive’s death or a termination by mutual agreement) will be
communicated to the other party by submission of a written Notice of
Termination. If termination is by Employer For Cause or by Executive for Good
Reason, the Notice of Termination will set forth in reasonable detail the facts
and circumstances claimed to provide the basis for the termination, consistent
with the terms of this Agreement.
     (b) For purposes of this Agreement, “Date of Termination” will mean: (i) if
Executive’s employment is terminated due to death, the date of Executive’s
death; (ii) if Executive’s employment is terminated for Disability, thirty
(30) calendar days after the Notice of Termination is given; (iii) if
Executive’s employment is terminated by Employer for Cause or by Executive for
Good Reason, the date stated in the Notice of Termination; (iv) if Executive’s
employment is terminated by mutual agreement of the parties, the termination
date provided for in the agreement; or (v) if Executive’s employment is
terminated for any other reason, the date stated in the Notice of Termination
provided the date is no earlier than thirty (30) calendar days after the date on
which the Notice of Termination is submitted to the intended recipient, unless
an earlier date has been expressly agreed to by Executive in writing either
before or after receiving the Notice of Termination.
ARTICLE 5
PAYMENTS UPON TERMINATION
     5.1 Compensation during Disability. During any period in which Executive
fails to perform Executive’s duties under this Agreement as a result of
Executive’s incapacity due to physical or mental illness or bodily injury or
disease, Executive will continue to receive all Base Salary and other
compensation and benefits to which Executive is otherwise entitled under this
Agreement and any Plan, through Executive’s Date of Termination.
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     5.2 Compensation upon Termination by Reason of Death, Voluntary Termination
by Executive, For Cause by Employer or by Mutual Agreement. Except as provided
in Article 7, if Executive’s employment under this Agreement is terminated
(i) by Executive’s death, (ii) voluntarily by Executive, (iii) by Employer for
Cause, or (iv) by mutual agreement of the parties, then Employer will pay
Executive the Base Salary through the Date of Termination, plus any amounts to
which the Executive is entitled under this Agreement, and under any Plan as
provided by the Plan. Employer will also pay any retirement benefits to which
Executive is or becomes entitled under this Agreement or under any Plan, except
to the extent any benefits are forfeited under the terms of the Plan.
     5.3 Compensation Upon Termination by Employer Without Cause or Executive
for Good Reason. In the event either (i) Employer terminates Executive’s
employment under this Agreement without Cause; or (ii) Executive voluntarily
terminates employment under this Agreement for Good Reason [as this term is
defined in Section 7.1 (f)]; and, if Executive executes a written release
substantially in the form attached to this Agreement as Exhibit A and consistent
with this Section 6.3 (a “Release Agreement”), then
     (i) Employer will pay to Executive, as separation pay which Executive has
not earned and to which he is not otherwise entitled, an amount equal to eleven
(11) months of Executive’s monthly Base Salary in effect as of the Date of
Termination [in addition to a thirty day notice of termination set forth in
Section 4.6(b)]. Separation payment will be made to the Executive in weekly
payments beginning at least sixteen (16) days after Executive’s execution of the
Release Agreement, provided the Executive has not exercised rights to revoke or
rescind the release of claims as provided in the Release Agreement
     (ii) If Executive (or any individual eligible for group health Plan
benefits through Executive) is eligible under this Agreement, the Plan or
applicable law to continue participation in Employer’s group health Plan during
the separation pay period and does elect to continue these benefits, Employer
will, for that period during which Executive is entitled to receive separation
pay under Section 5.3(i), continue to pay Employer’s share of the cost of these
benefits as if Executive remained continuously employed with Employer throughout
the separation pay period but only while Executive or such other individual
continues to pay the balance of such cost. In the alternative, and under these
circumstances, Employer may elect, in its discretion, to pay to Executive on or
about the Date of Termination a lump sum calculated to represent Employer’s
share of the cost of these benefits.

  5.4   Outplacement. Employer will, for a period of up to eleven (11) months
following Executive’s Date of Termination, reimburse Executive for all
reasonable expenses of a reputable outplacement organization selected by
Executive, but not to exceed $12,000.00 in the aggregate.     5.5   No
Additional Pay/Benefits. Except as specifically set forth above, no
post-termination payments or benefits will be provided to Executive following
the Date of Termination of Executive’s employment. No 401(k) contributions will
be paid by Employer based on post-termination separation pay. Further, Executive
will not be entitled to an incentive award

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under the Employer’s incentive Plans or any other bonus for any fiscal year, or
part thereof, during which post-termination separation pay is paid.
     Executive will not be required to mitigate Employer’s payment obligations
under this Article 5 by making any efforts to secure other employment, and
Executive’s commencement of employment with another employer will not reduce the
obligations of Employer under this Article 5.
ARTICLE 6
CHANGE IN CONTROL
     6.1 Definitions Relating to a Change in Control. The following terms will
have the meanings set forth below; unless the context clearly requires
otherwise:
     (a) “1934 Act” will mean the Securities Exchange Act of 1934, as amended
(or any successor provision), and applicable regulations.
     (b) “Beneficial Ownership” by a person or group of persons will be
determined in accordance with Regulation 13D (or any similar successor
regulation) promulgated by the Securities and Exchange Commission pursuant to
the 1934 Act. Beneficial Ownership of an equity security may be established by
any reasonable method, but will be presumed conclusively as to any person who
files a Schedule 13D report with the Securities and Exchange Commission
reporting the ownership.
     (c) “Change of Control” means the occurrence of any of the following
events:
     (i) any person or group of persons attains Beneficial Ownership of thirty
per cent (30%) or more of any equity security of Employer entitled to vote for
the election of directors;
     (ii) a majority of the members of the Board is replaced within a period of
less than two (2) years by directors not nominated and approved by the Board; or
     (iii) the stockholders of Employer approve an agreement to merge or
consolidate with or into another corporation or entity unrelated to Employer, or
an agreement to sell or otherwise dispose of all or substantially all of
Employer’s assets (including a plan of liquidation).
     (d) “Continuing Directors” are (i) directors who were in office prior to
the time any events described in paragraphs (c)(i), (c)(ii) or (c)(iii) of this
Section 6.1 have occurred, or any person that has publicly announced an
intention to acquire twenty per cent (20%) or more of any equity security of
Employer; (ii) directors in office for a period of more than two (2) years; and
(iii) directors nominated and approved by the Continuing Directors.
     (e) “Change in Control Termination” will mean that a Change in Control of
Employer has occurred, and either of the following events has also occurred
within one (1) year after the Change in Control: (i) Employer terminates the
Executive’s employment or this Agreement for any
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reason other than for Cause, Executive’s death or Executive’s Disability; or
(ii) Executive terminates Executive’s employment for Good Reason.
     (f) “Good Reason” will mean, with respect to a voluntary termination of
employment by Executive after a Change in Control, any of the following:
     (i) an adverse involuntary change in Executive’s status or position as an
executive officer of Employer, including, without limitation, (A) any adverse
change in Executive’s status or position as a result of a material diminution in
Executive’s duties, responsibilities or authority as of the day before the
Change in Control; (B) the assignment to Executive of any duties or
responsibilities that, in Executive’s reasonable judgment, are significantly
inconsistent with Executive’s duties, responsibilities or authority as of the
day before the Change in Control; or (C) any removal of Executive from, or any
failure to reappoint or reelect Executive to, a position with the same duties,
responsibilities or authority Executive had as of the day before the Change in
Control (except in connection with a termination of Executive’s employment for
Cause in accordance with Article 4, or as a result of Executive’s Disability or
death);
     (ii) a reduction by Employer in Executive’s Base Salary as in effect on the
day before the Change in Control;
     (iii) the taking of any action by Employer that would materially and
adversely affect the physical conditions existing, as of the day before the
Change in Control, under which Executive performs employment duties for
Employer;
     (iv) Employer’s requiring Executive to be based anywhere other than where
Executive’s office is located as of the day before the Change in Control, except
for required travel on Employer’s business to an extent substantially consistent
with business travel obligations that Executive had undertaken on behalf of
Employer as prior to the Change in Control;
     (v) any failure by Employer to obtain from any Successor an assumption of
this Agreement as contemplated by Section 6.1; or
     (vi) any purported termination by Employer of this Agreement or the
employment of the Executive at any time after a Change in Control that is not
expressly authorized by this Agreement; or any breach of this Agreement by
Employer at any time after a Change in Control, other than an isolated,
insubstantial and inadvertent failure that does not occur in bad faith and is
remedied by Employer within a reasonable period after Employer’s receipt of
notice of the failure from Executive.
     6.2 Benefits Upon a Change in Control Termination. If a Change in Control
Termination occurs with respect to Executive, Executive will be entitled to the
following benefits; provided, however, that to the extent Executive has already
received the same type of benefits under this Article 6 as a result of
Executive’s Change in Control Termination, Executive’s benefits under this
Section 6.2 will be offset by these other benefits to the extent necessary to
prevent duplication of benefits under this Agreement:
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          (a) all of the payments and benefits that Executive would have been
entitled to receive if the Change in Control Termination were described in
Section 5.3, and payment will be made in a lump sum on or before the tenth
(10th) calendar day following the Date of Termination; and
          (b) for a period of up to six (6) months following Executive’s Date of
Termination, Employer will reimburse Executive for all reasonable expenses
incurred by Executive [excluding any arrangement by which Executive prepays
expenses for a period of greater than thirty (30) days] in seeking employment
with another employer, including the fees of a reputable outplacement
organization selected by Employer, but not to exceed $12,000.00 in the
aggregate;
     Executive will not be required to mitigate Employer’s payment obligations
under this Agreement this Article 6 by making any efforts to secure other
employment; and Executive’s commencement of employment with another employer
will not reduce the obligations of Employer pursuant to this Article 6.
     6.3 Acceleration of Incentives. If upon the occurrence of a Change of
Control, the Board and a majority of the Continuing Directors [as this term is
defined in the G&K Services, Inc. 1998 Stock Option and Compensation Plan (the
“1998 Plan”)] determine that the economic incentives (including without
limitation stock options and awards of restricted stock) (the “Incentives”)
granted under this Agreement the 1998 Plan shall not accelerate immediately in
accordance with Section 11.12 of the 1998 Plan (or any successor provision),
then the following will nonetheless occur with respect to any and all Incentives
that are owned by Executive at the time of the Change of Control:
     (a) the restrictions set forth in the 1998 Plan on all shares of restricted
stock awards will lapse immediately;
     (b) all outstanding options and stock appreciation rights will become
exercisable immediately; and
     (c) All performance shares will be deemed to be met and payment made
immediately.
     6.4 Limitation on Severance Payment. Notwithstanding any provision
contained in this Agreement to the contrary, if any amount or benefit to be paid
or provided under this Article 6, or any other plan or agreement between
Executive and Employer would be an “Excess Parachute Payment,” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), or any successor provision thereto, but for the application of this
sentence, then the payments and benefits to be paid or provided under this
Agreement this Article 6 will be reduced to the minimum extent necessary (but in
no event to less than zero) so that no portion of any such payment or benefit,
as so reduced, constitutes an Excess Parachute Payment; provided, however, that
the foregoing reduction will be made only if and to the extent that such
reduction would result in an increase in the aggregate payment and benefits to
be provided to Executive, determined on an after-tax basis (taking into account
the excise tax imposed pursuant to Section 4999 of the Code, or any successor
provision thereto, any tax imposed by any comparable provision of state law, and
any applicable federal, state and local income taxes). If requested by Executive
or Employer, the determination of whether any reduction in such payments or
benefits to be provided under this Article 6 or otherwise is required pursuant
to the preceding sentence will be made by an independent accounting firm that is
a “Big-4 Accounting Firm” (or other accounting firm mutually acceptable to
Executive and Employer) not then-engaged as Employer’s independent public
auditor, at the expense of Employer, and the determination such independent
accounting firm will be final and binding on
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all parties. In making its determination, the independent accountant will
allocate a reasonable portion of the separation payment to the value of any
personal services rendered following the Change in Control and the value of any
non-competition agreement or similar agreements to the extent that such items
reduce the amount of the parachute payment. In the event that any payment or
benefit intended to be provided under this Article 6 or otherwise is required to
be reduced pursuant to this Section 6.4, Executive (in Executive’s sole
discretion) will be entitled to designate the payments and/or benefits to be so
reduced in order to give effect to this Section. Employer will provide Executive
with all information reasonably requested by Executive to permit Executive to
make such designation. In the event that Executive fails to make such
designation within ten (10) business days of receiving such information,
Employer may effect such reduction in any manner it deems appropriate.
ARTICLE 7
PROTECTION OF EMPLOYER
     7.1 Confidential Information. For purposes of this Article 7, “Confidential
Information” means information that is proprietary to Employer or proprietary to
others and entrusted to Employer; whether or not such information includes trade
secrets. Confidential Information includes, but is not limited to, information
relating to Employer’s business plans and to its business as conducted or
anticipated to be conducted, and to its past or current or anticipated products
and services. Confidential Information also includes, without limitation,
information concerning Employer’s customer lists or routes, pricing, purchasing,
inventory, business methods, training manuals or other materials developed for
Employer’s employee training, employee compensation, research, development,
accounting, marketing and selling. All information that Employer has a
reasonable basis to consider as confidential will be Confidential Information,
whether or not originated by Executive and without regard to the manner in which
Executive obtains access to this and any other proprietary information of
Employer.
Executive will not, during or after the termination of Executive’s employment
under this Agreement, (a) directly or indirectly use Confidential Information
for Executive’s own benefit; or (b) disclose any Confidential Information to, or
otherwise permit access to Confidential Information by, any person or entity not
employed by Employer or not authorized by Employer to receive such Confidential
Information, without the prior written consent of Employer. Executive will use
reasonable and prudent care to safeguard and protect and prevent the
unauthorized use and disclosure of Confidential Information. Furthermore, except
in the usual course of Executive’s duties for Employer, Executive will not at
any time remove any Confidential Information from the offices of Employer,
record or copy any Confidential Information or use for Executive’s own benefit
or disclose to any person or entity directly or indirectly competing with
Employer any information, data or materials obtained from the files or customers
of Employer, whether or not such information, data or materials are Confidential
Information.
     Upon any termination of Executive’s employment, Executive will collect and
return to Employer (or its authorized representative) all original copies and
all other copies of any Confidential Information acquired by Executive while
employed by Employer.
     The obligations contained in this Section 8.1 will survive for as long as
Employer in its sole judgment considers the information to be Confidential
Information. The obligations under this Agreement this Section 8.1 will not
apply to any Confidential Information that is now or becomes generally available
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to the public through no fault of Executive or to Executive’s disclosure of any
Confidential Information required by law or judicial or administrative process.
     7.2 Non-Competition. While employed by Employer and for a period of
eighteen (18) months following the date of Executive’s termination of employment
for any reason, Executive will not, directly or indirectly, alone or as an
officer, director, shareholder, partner, member, employee or consultant of any
other corporation or any partnership, limited liability company, firm or other
business entity:
     (a) engage in, have any ownership interest in, financial participation in,
or become employed by, any business or commercial activity in competition
(i) with any part of Employer’s business, as conducted anywhere within the
geographic area in which Employer has conducted its business within the three
(3) years before such date, or (ii) with any part of Employer’s contemplated
business with respect to which Executive has Confidential Information governed
by Section 7.1. For purposes of this paragraph, “ownership interest” will not
include beneficial ownership of less than one percent (1%) of the combined
voting power of all issued and outstanding voting securities of a publicly held
corporation whose stock is traded on a major stock exchange or quoted on NASDAQ;
     (b) call upon, solicit or attempt to take away any customers, accounts or
prospective customers of Employer;
     (c) solicit, induce or encourage any supplier of goods or services to
Employer to cease its business relationship with Employer, or violate any term
of any contract with Employer; or
     (d) solicit, induce or encourage any other employee of Employer to cease
employment with Employer, or otherwise violate any term of such employee’s
contract of employment with Employer.
     The restrictions set forth in this Section 7.2 will survive any termination
of this Agreement or other termination of Executive’s employment with Employer,
for whatever reason, and will remain effective and enforceable for the full
18-month period; provided, however, that such period will be automatically
extended and will remain in full force for an additional period equal to any
period in which Executive is proven to have violated any such restriction.
     7.3 Stipulated Reasonableness. Executive acknowledges that the nature of
Executive’s position, the period of time necessary to fill Executive’s position
in the event Executive’s employment is terminated, the period of time necessary
to allow customers of Employer’s business to become familiar with Executive’s
replacement, and the period of time necessary to cause an end to the
identification between Executive and Employer in the minds of Employers
customers and vendors, commands that the eighteen month (18) month
noncompetition period be imposed for the protection of Employer’s investment in
its business.
     7.4 Protection of Reputation. Executive will, both during and after the
termination of Executive’s employment under this Agreement, refrain from
communicating to any person, including without limitation any employee of
Employer, any statements or opinions that are negative in any way about Employer
or any of its past, present or future officials. In return, whenever Employer
sends or receives any Notice of Termination of Executive’s employment under this
Agreement, Employer will advise the members of its
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operating committee and executive committee (or any successors to such
committees), to refrain from negative communications about Executive to third
parties.
     7.5 Remedies. The parties declare and agree that it is impossible to
accurately measure in money the damages that will accrue to Employer by reason
of Executive’s failure to perform any of Executive’s obligations under this
Agreement this Article 7; and that any such breach will result in irreparable
harm to Employer, for which any remedy at law would be inadequate. Therefore, if
Employer institutes any action or proceeding to enforce the provisions of this
Article 7, Executive waives the claim or defense that such party has an adequate
remedy at law, Executive will not assert in any such action or proceeding the
claim or defense that such party has an adequate remedy at law, and Employer
will be entitled, in addition to all other remedies or damages at law or in
equity, to temporary and permanent injunctions and orders to restrain any
violations of this Article 7 by Executive and all persons or entities acting for
or with Executive.
     7.6 Survival. The provisions of Article 7 of this Agreement will survive
the termination of this Agreement or the termination of Executive’s employment
with Employer, and will remain in full force and affect following termination.
ARTICLE 8
GENERAL PROVISIONS
     8.1 Successors and Assigns; Beneficiary.
     (a) This Agreement will be binding upon and inure to the benefit of any
Successor of Employer, and any Successor will absolutely and unconditionally
assume all of Employer’s obligations under this Agreement. Upon Executive’s
written request, Employer will seek to have any Successor, by agreement in form
and substance satisfactory to Executive, assent to the fulfillment by Employer
of their obligations under this Agreement. Failure to obtain such assent prior
to the time a person or entity becomes a Successor (or where Employer does not
have advance notice that a person or, entity may become a Successor, within one
(1) business day after having notice that such person or entity may become or
has become a Successor) will constitute Good Reason for termination of
employment by Executive pursuant to Article 4.
     (c) This Agreement and all rights of Executive under this Agreement will
inure to the benefit of and be enforceable by Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees and any assignees permitted under this Agreement. If
Executive dies while any amounts would still be payable to Executive under this
Agreement if Executive had continued to live, all such amounts, unless otherwise
provided herein, will be paid in accordance with the terms of this Agreement to
Executive’s Beneficiary. Executive may not assign this Agreement, in whole or in
any part, without the prior written consent of Employer.
     (d) For purposes of this Section 8.1, “Beneficiary” means the person or
persons designated by Executive (in writing to Employer) to receive benefits
payable after Executive’s death pursuant to Section 8.1(c). In the absence of
any such designation or in the event that all of the persons so designated
predecease Executive, Beneficiary means the executor, administrator or personal
representative of Executive’s estate.
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     8.2 Litigation Expense. If any party is made or will become a party to any
litigation (including arbitration) commenced by or against the other party
involving the enforcement of any of the rights or remedies of such party, or
arising on account of a default of the other party in its performance of any of
the other party’s obligations under this Agreement, then the prevailing party in
such litigation will receive from the other party all costs incurred by the
prevailing party in such litigation, plus reasonable attorneys’ fees to be fixed
by the court or arbitrator (as applicable), with interest thereon from the date
of judgment or arbitrator’s decision at the rate of eight percent (8%) or, if
less, the maximum rate permitted by law.
     8.3 No Offsets. In no event will any amount payable to Executive pursuant
to this Agreement be reduced for purposes of offsetting, either directly or
indirectly, any indebtedness or liability of Executive to Employer.
     8.4 Notices. All notices, requests and demands given to or made pursuant
hereto will, except as otherwise specified herein, be in writing and be
personally delivered or mailed postage prepaid, registered or certified U. S.
mail, to any party as its address set forth on the last page of this Agreement.
Either party may, by notice under this Agreement, designate a changed address.
Any notice under this Agreement will be deemed effectively given and received:
(a) if personally delivered, upon delivery; or (b) if mailed, on the registered
date or the date stamped on the certified mail receipt.
     8.5 Captions. The various headings or captions in this Agreement are for
convenience only and will not affect the meaning or interpretation of this
Agreement. When used herein, the terms “Article” and “Section” mean an Article
or Section of this Agreement, except as otherwise stated.
     8.6 Governing Law. The validity, interpretation, construction, performance,
enforcement and remedies of or relating to this Agreement, and the rights and
obligations of the parties under this Agreement, will be governed by the
substantive laws of the State of Minnesota (without regard to the conflict of
laws rules or statutes of any jurisdiction), and any and every legal proceeding
arising out of or in connection with this Agreement will be brought in the
appropriate courts of the State of Minnesota, each of the parties hereby
consenting to the exclusive jurisdiction of said courts for this purpose.
     8.7 Construction. Wherever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under this Agreement
applicable law, but if any provision of this Agreement will be prohibited by or
invalid under this Agreement applicable law, such provision will be ineffective
only to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
     8.8 Waiver. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy under this Agreement will operate as a
waiver thereof; nor will any single or partial exercise of any right or remedy
under this Agreement preclude any other or further exercise thereof or the
exercise of any other right or remedy granted hereby or by any related document
or by law
     8.9 Modification. This Agreement may not be modified or amended except by
written instrument signed by the parties hereto.
     8.10 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties to this Agreement in reference to all the
matters agreed upon. This Agreement replaces
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in full all prior employment agreements or understandings of the parties to this
Agreement, and any and all such prior agreements or understandings are rescinded
by mutual agreement.
     8.11 Survival. The provisions of this Agreement which by their express or
implied terms extend (a) beyond the termination of Executive’s employment under
this Agreement (including, without limitation, the provisions relating to
separation compensation and effects of a Change in Control); or (b) beyond the
termination of this Agreement (including, without limitation the provisions in
Article 8 relating to confidential information, non-competition and
non-solicitation), will continue in full force and effect notwithstanding
Executive’s termination of employment under this Agreement or the termination of
this Agreement, respectively.
     8.12 Voluntary Agreement. Executive has entered into this Agreement
voluntarily, after having the opportunity to consult with an advisor chosen
freely by Executive.
     8.13 Remedies. No civil action may be commenced for any claim or dispute
relating to this Agreement or arising out of Executive’s employment with
Employer unless the parties, within thirty (30) days after the date of either
party’s written request, attempt in good faith to promptly resolve the claim or
dispute by negotiation at agreed time(s) and location(s). All negotiations are
confidential and will be treated as settlement negotiations. Notwithstanding the
foregoing, either party may seek equitable relief prior to such good faith
efforts to preserve the status quo pending the completion of such efforts.
     IN WITNESS WHEREOF, the parties have caused this Executive Employment
Agreement to be executed and delivered as of the Effective Date.

                      EMPLOYER:   G&K SERVICES, INC.:    
 
               
 
      By:   /s/ Richard L. Marcantonio
 
Chairman of the Board and    
 
          Chief Executive Officer    
 
               
 
  EXECUTIVE:       /s/ David M. Miller    
 
               

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EXHIBIT A
SEVERANCE AGREEMENT AND GENERAL RELEASE
Definitions. All the words used in this Severance Agreement and General Release
(this “Agreement”) have their plain meaning in ordinary English. Specific terms
used in this Agreement have the following meanings:

  1.   Words such as I and me include both me and anyone who has or obtains any
legal rights or claims through me. My name is _______________.     2.   “G&K”
means G&K Services, Inc., and its affiliated entities, and each of them, and
past or present officials, managers, agents, officers, directors, employees,
committees, insurers, indemnitors, successors or assigns of any of the foregoing
entities.

G&K’s Promises. In exchange for My Promises, G&K has promised to extend to me
the consideration set forth on a separate Severance Benefits Letter dated the
same date as this Agreement (the “Severance Benefits Letter”), but only if I
have not exercised my rights to revoke or rescind certain of my waivers as
provided in this Agreement.
My Claims. The claims I am releasing include all of my rights to any relief of
any kind from G&K including but not limited to:

  1.   All claims I have now, whether or not I now know about the claims;     2.
  All claims for attorney’s fees;     3.   All claims, through the date this
document is executed, for alleged discrimination against me and any other rights
and claims under the federal Age Discrimination in Employment Act (“ADEA”), the
Minnesota Human Rights Act (“MHRA”), the Minneapolis Civil Rights Act, and all
claims of any nature under any federal, state or local statute, ordinance or
other law;     4.   All claims arising out of my employment or my separation
from employment with G&K including, but not limited to, any alleged breach of
contract, wrongful termination, defamation, invasion of privacy or infliction of
emotional distress;     5.   All claims for any other alleged unlawful
employment practices arising out of or relating to my employment or my
separation from employment; and     6.   All claims for any other form of pay,
for example holiday pay, vacation pay and sick pay.     7.   All claims I have
under that certain Executive Employment Agreement dated _______________ (the
“Executive Employment Agreement”).

My Promises. In exchange for receiving the payments and other consideration set
forth in the Severance Benefits Letter, I hereby give up all my claims against
G&K. I fully and finally release, give up, and otherwise relinquish all of my
rights and claims against G&K, including for example rights and claims of
discrimination under the ADEA, MHRA, and Minneapolis Civil Rights Act and all
claims of any nature under any federal, state or local statute, ordinance or
other law. I will not bring any lawsuits or make any other demands against G&K,
except if necessary to enforce the provisions of the Severance Benefits Letter
or to determine if this Agreement is valid under the ADEA. The money and
benefits I will receive as set forth in the

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Severance Benefits Letter is full and fair payment for the release of all my
rights and claims and is in full satisfaction of G&K’s obligations under my
Executive Employment Agreement. G&K does not owe me anything in addition to what
I will receive under the Severance Benefits Letter.
Additional Agreements and Understandings.

  1.   My last day of employment is _______________, ______.     2.   My
obligations with respect to Protection of Employer all as more thoroughly set
forth in the Executive Employment Agreement shall survive my termination. This
Agreement replaces, supersedes, and nullifies any other prior oral or written
agreements between G&K and me as to any matter herein.     3.   I will keep the
terms of the Agreement and the Severance Benefits Letter confidential and make
no disclosures to anybody, except that I may make such disclosures to my
immediate family, legal and tax advisors. In return, G&K has agreed that the
terms of the Agreement will be disclosed internally only on a need to know
basis.     4.   I will refrain from communicating with any person, including
without limitation, any G&K employee, any statements or opinions that are
negative in any manner about the company and/or its officials.     5.   This
Agreement does not affect my participation or rights in any G&K fringe benefit
plan in which I participate. The Summary Plan Description of those benefits
remains in effect on such benefits.     6.   I am not waiving any rights or
claims under the ADEA that may arise after this date this Agreement is executed
by me.

Rights to Consider, Revoke and Rescind.

  1.   I understand that I am advised by G&K to consult an attorney prior to
signing this Severance Agreement and General Release.     2.   I further
understand that I have forty-five (45) days to consider my waiver of rights and
claims of age discrimination under the ADEA, beginning ____________, the date on
which I received this Agreement. If I sign this Agreement, I understand that I
will then be entitled to revoke my release of any rights and claims of age
discrimination under the ADEA within seven (7) days of executing it, and the
release of my ADEA rights and claims shall not become effective or enforceable
until the seven-day period has expired.     3.   I further understand that I
have the right to rescind my release of discrimination rights and claims under
the MHRA within fifteen (15) calendar days of the date upon which I sign this
Agreement. I understand that, if I desire to rescind my release of
discrimination rights and claims under the MHRA, I must put my rescission
request in writing and deliver it to G&K by hand or by mail within 15 calendar
days of the date of execution of this Agreement by me. If I deliver my
rescission request by mail, it must be:

  a.   postmarked within 15 calendar days of the day on which I sign this
Agreement;     b.   addressed to General Counsel, Legal Department, G&K
Services, Inc. 5995 Opus Parkway, Minnetonka, MN 55343; and,     c.   sent by
certified mail, return receipt requested.

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     I understand that if I revoke or rescind my waivers as provided above, all
of G&K’s obligations under the Severance Benefits Letter will immediately cease,
and G&K will not pay me any of the money or benefits in the Severance Benefits
Letter, other than those amounts listed in such Severance Benefits Letter, if
any, which specifically provide that I will be paid even if I revoke or rescind
the waivers.
     I have read this Agreement carefully and understand all of its terms. I
have had the opportunity to discuss this Agreement with my own attorney prior to
signing it. In agreeing to sign this Agreement, I have not relied on any
statements or explanations made by G&K, its agents or its attorneys, except
those contained in this Agreement and in the Severance Benefits Letter.

EXECUTIVE   G&K SERVICES, INC.   ____________________________________   By
____________________________________   ____________________________________
(Date)   Its ____________________________________     Date
__________________________________

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