Document:

exv4w1

Exhibit 4.1

G&K SERVICES, INC.

RESTATED EQUITY INCENTIVE PLAN (2010)

	1.	 	Purpose. The purpose of the G&K Services, Inc. Restated Equity Incentive Plan (2010)
(the “Plan”) is to motivate directors, key employees and advisors to produce a superior return
to the shareholders of G&K Services, Inc. by offering them an opportunity to participate in
shareholder gains, by facilitating stock ownership and by rewarding them for achieving a high
level of corporate financial performance. The Plan is also intended to facilitate recruiting
and retaining talented executives for key positions by providing an attractive capital
accumulation opportunity. The Plan was initially adopted by the Board (as defined below) as
the G&K Services, Inc. 2006 Equity Incentive Plan on August 23, 2006, and approved by the
shareholders at the annual meeting of shareholders held November 16, 2006. The Plan as
restated was adopted by the Board on August 19, 2010, subject to the approval of shareholders
at the annual meeting of shareholders scheduled for November 4, 2010.
	 
	2.	 	Definitions.

	 	2.1.	 	The following terms, whenever used in this Plan, shall have the meanings set
forth below:

	 	(a)	 	“Affiliate” means any corporation or limited liability company,
a majority of the voting stock or membership interests of which is directly or
indirectly owned by the Company, and any partnership or joint venture
designated by the Committee in which any such corporation or limited liability
company is a partner or joint venturer.
	 
	 	(b)	 	“Award” means a grant made under this Plan in the form of
Performance Shares, Restricted Stock, Restricted Stock Units, Options,
Performance Units, Stock Appreciation Rights, or Stock Awards.
	 
	 	(c)	 	“Award Agreement” means a written agreement or other
communication evidencing the terms and conditions of an Award in the form of
either an agreement to be executed by both the Participant and the Company (or
an authorized representative of the Company) or a certificate, notice, term
sheet or similar communication.
	 
	 	(d)	 	“Beneficiary” means the person or persons determined in
accordance with Section 13.
	 
	 	(e)	 	“Board” means the Board of Directors of the Company.
	 
	 	(f)	 	“Change in Control” means the occurrence of any of the
following events:

	 	(i)	 	any “Person” within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”)
(other than the Company or any company owned, directly or indirectly,
by the shareholders of the Company in substantially the same
proportions

 

 

	 	 	 	as their ownership of stock of the Company) becomes the “Beneficial
Owner” within the meaning of Rule 13d-3 promulgated under the Act of
30% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election
of directors; excluding, however, any circumstance in which such
beneficial ownership resulted from any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or by any corporation controlling, controlled by, or under
common control with, the Company;
	 
	 	(ii)	 	a change in the composition of the Board since
August 23, 2006, (the “Effective Date”), such that the individuals who,
as of such date, constituted the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of such Board;
provided that any individual who becomes a director of the Company
subsequent to the Effective Date whose election, or nomination for
election by the Company’s shareholders, was approved by the vote of at
least a majority of the directors then comprising the Incumbent Board
shall be deemed a member of the Incumbent Board; and provided further
that any individual who was initially elected as a director of the
Company as a result of an actual or threatened election contest, as
such terms are used in Rule 14a-12 of Regulation 14A promulgated under
the Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person or entity other than the Board
shall not be deemed a member of the Incumbent Board;
	 
	 	(iii)	 	a reorganization, recapitalization, merger or
consolidation (a “Corporate Transaction”) involving the Company, unless
securities representing 60% or more of the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors of the Company or the corporation resulting from
such Corporate Transaction (or the parent of such corporation) are held
subsequent to such transaction by the person or persons who were the
beneficial holders of the outstanding voting securities entitled to
vote generally in the election of directors of the Company immediately
prior to such Corporate Transaction, in substantially the same
proportion as their ownership immediately prior to such Corporate
Transaction; or
	 
	 	(iv)	 	the sale, transfer or other disposition of all
or substantially all of the assets of the Company.

	 	(g)	 	“Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the rulings and regulations issued thereunder.

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	 	(h)	 	“Committee” has the meaning set forth in Section 3.
	 
	 	(i)	 	“Company” means G&K Services, Inc., a Minnesota corporation.
	 
	 	(j)	 	“Deferred Stock Units” has the meaning set forth in Section 9.
	 
	 	(k)	 	“Employee” means an individual who is a common law employee
(including an officer or director who is also an employee) of the Company or an
Affiliate.
	 
	 	(l)	 	“Fair Market Value” means, on a given date, (i) if there should
be a public market for the Shares on such date, the price at which a Share was
last sold (i.e., closing market price) on the principal United States market
for the Shares, or, if no sale of Shares shall have been reported on such
principal United States market on such date, then the immediately preceding
date on which sales of the Shares have been so reported shall be used, and (ii)
if there should not be a public market for the Shares on such date, the Fair
Market Value shall be the value established by the Committee in good faith.
	 
	 	(m)	 	“Incentive Stock Option” means any Option designated as such
and granted in accordance with the requirements of Section 422 of the Code.
	 
	 	(n)	 	“Non-Qualified Stock Option” means an Option other than an
Incentive Stock Option.
	 
	 	(o)	 	“Option” means a right to purchase Stock awarded under Section
10.
	 
	 	(p)	 	“Other Stock-Based Awards” means Awards granted pursuant to
Section 12.
	 
	 	(q)	 	“Participant” means a person described in Section 5 designated
by the Committee to receive an Award under the Plan.
	 
	 	(r)	 	“Performance Cycle” means the period of time as specified by
the Committee over which Performance Shares or Performance Units are to be
earned.
	 
	 	(s)	 	“Performance Shares” means an Award made pursuant to Section 6
which entitles a Participant to receive Shares, their cash equivalent, or a
combination thereof, based on the achievement of performance targets during a
Performance Cycle.
	 
	 	(t)	 	“Performance Units” means an Award made pursuant to Section 6
which entitles a Participant to receive cash, Stock, or a combination thereof,
based on the achievement of performance targets during a Performance Cycle.

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	 	(u)	 	“Plan” means the G&K Services, Inc. Restated Equity Incentive
Plan (2010), as amended from time to time.
	 
	 	(v)	 	“Qualifying Performance Criteria” has the meaning set forth in
Section 16.2.
	 
	 	(w)	 	“Restricted Stock” means Stock granted under Section 7 that is
subject to restrictions imposed pursuant to said Section.
	 
	 	(x)	 	“Restricted Stock Unit” means a grant under Section 9 of the
right to receive a Share subject to vesting and such other restrictions imposed
pursuant to said Section, together with dividend equivalents with respect to
such Share if and as so determined by the Committee.
	 
	 	(y)	 	“Share” means a share of Stock.
	 
	 	(z)	 	“Stock” means the Class A Common Stock, $.50 par value per
share, of the Company, as such class of Stock may be redesignated or renamed
from time to time.
	 
	 	(aa)	 	“Stock Appreciation Right” means a right awarded to a
Participant pursuant to Section 11 that entitles the Participant to receive, in
cash, Stock or a combination thereof, as determined by the Committee, an amount
equal to or otherwise based on the excess of (a) the Fair Market Value of a
Share at the time of exercise over (b) the exercise price of the right, as
established by the Committee on the date the Award is granted.
	 
	 	(bb)	 	“Stock Award” means an award of Stock granted to a Participant
pursuant to Section 8.
	 
	 	(cc)	 	“Term” means the period during which an Option or Stock
Appreciation Right may be exercised or the period during which the restrictions
placed on a Restricted Stock Unit or Restricted Stock are in effect.

	 	2.2.	 	Gender and Number. Except when otherwise indicated by context,
reference to the masculine gender shall include, when used, the feminine gender and any
term used in the singular shall also include the plural.

	3.	 	Administration.

	 	3.1.	 	Administration of the Plan. The Plan shall be administered by the
Compensation Committee of the Board or such other committee selected by the Board and
consisting of two or more members of the Board (the “Committee”). Any power of the
Committee may also be exercised by the Board, except to the extent that the grant or
exercise of such authority would cause any Award or transaction to become subject to
(or lose an exemption under) the short-swing profit recovery provisions of Section 16
of the Act, or cause an Award not to qualify for treatment as “performance based
compensation” under Section 162(m) of the

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	 	 	 	Code. To the extent that any permitted action taken by the Board conflicts with
action taken by the Committee, the Board action shall control. The Committee may
delegate any or all aspects of the day-to-day administration of the Plan to one or
more officers or employees of the Company or any Affiliate, and/or to one or more
agents.
	 
	 	3.2.	 	Powers of the Committee. Subject to the express provisions of this
Plan, the Committee shall be authorized and empowered to take all actions that it
determines to be necessary or appropriate in connection with the administration of this
Plan, including, without limitation: (i) to prescribe, amend and rescind rules and
regulations relating to this Plan and to define terms not otherwise defined herein;
(ii) to determine which persons are eligible to be granted Awards under Section 5, to
which of such persons, if any, Awards shall be granted hereunder and the timing of any
such Awards; (iii) to grant Awards to Participants and determine the terms and
conditions of Awards, including the number of Shares subject to Awards, the exercise or
exercise price of such Shares, the circumstances under which Awards become exercisable
or vested or are forfeited or expire, and the extent to which reimbursement to the
Company or any Affiliate of any payment of cash or Shares under any Award shall be
required, which terms may but need not be conditioned upon the passage of time,
continued employment, the satisfaction of performance criteria, the occurrence of
certain events, or other factors; (iv) to establish and certify the extent of
satisfaction of any performance goals or other conditions applicable to the grant,
issuance, exercisability, vesting, and/or ability to retain any Award; (v) to prescribe
and amend the terms of Award Agreements or other documents relating to Awards made
under this Plan (which need not be identical) and the terms of or form of any document
or notice required to be delivered to the Company by Participants under this Plan; (vi)
to determine whether, and the extent to which, adjustments are required pursuant to
Section 25; (vii) to interpret and construe this Plan, any rules and regulations under
this Plan, and the terms and conditions of any Award granted hereunder, and to make
exceptions to any such provisions in good faith and for the benefit of the Company; and
(viii) to make all other determinations deemed necessary or advisable for the
administration of this Plan.
	 
	 	3.3.	 	Determinations by the Committee. All decisions, determinations and
interpretations by the Committee regarding the Plan, any rules and regulations under
the Plan, and the terms and conditions of or operation of any Award granted hereunder,
shall be final and binding on all Participants, Beneficiaries, heirs, assigns or other
persons holding or claiming rights under the Plan or any Award. The Committee shall
consider such factors as it deems relevant, in its sole and absolute discretion, to
making such decisions, determinations and interpretations including, without
limitation, the recommendations or advice of any officer or other employee of the
Company and such attorneys, consultants and accountants as it may select.

	4.	 	Shares Available Under the Plan; Limitation on Awards.

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	 	4.1.	 	Aggregate Limits. Subject to adjustment as provided in Section 25, the
aggregate number of Shares issuable pursuant to all Awards under this Plan shall not
exceed 3,000,000 Shares. Awards of Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Deferred Stock Units, and Stock cannot exceed 1,000,000 Shares
of the 3,000,000 Shares authorized. Awards of Performance Units that entitle a
Participant to a payment only of cash (and not of Stock) shall not reduce the number of
Shares available for issuance under the Plan. Shares available for issuance under the
Plan may be increased by the number of adjusted Company Shares available for issuance
under any equity incentive plan assumed by the Company in connection with a merger or
other acquisition but only if and to the extent determined by the Committee in its sole
discretion. The Shares issued pursuant to Awards granted under this Plan may consist,
in whole or in part, of authorized but unissued Stock or treasury Stock not reserved
for any other purpose.
	 
	 	4.2.	 	Issuance of Shares. For purposes of this Section 4, the aggregate
number of Shares available for Awards under this Plan at any time shall not be reduced
by Shares subject to Awards that have been canceled, expired, or forfeited, but shall
be reduced by the portion of Awards settled in cash (other than Awards of Performance
Units that entitle a Participant to a payment only of cash and not of Stock) or
withheld in connection with the exercise or settlement of an Award. Net Share counting
shall not be used to determine the number of Shares available for Awards, nor shall
Shares tendered in connection with the exercise of an Award affect the number of Awards
available for issuance under the Plan.
	 
	 	4.3.	 	Tax Code Limits. No Participant may be awarded in any calendar year
Awards covering an aggregate of more than 250,000 Shares, which limits shall be
calculated and adjusted pursuant to Section 25 only to the extent that such calculation
or adjustment will not affect the status of any Award theretofore issued or that may
thereafter be issued as “performance based compensation” under Section 162(m) of the
Code. The maximum amount payable pursuant to that portion of a Performance Unit granted
under this Plan in any calendar year to any Participant that is intended to satisfy the
requirements for “performance based compensation” under Section 162(m) of the Code
shall be a dollar amount not to exceed $5,000,000.

	5.	 	Participation. Participation in the Plan shall be limited to Employees, prospective
employees, directors or advisors of the Company or an Affiliate selected by the Committee.
Options intending to qualify as Incentive Stock Options may only be granted to Employees of
the Company or any subsidiary within the meaning of the Code. Participation is entirely at the
discretion of the Committee, and is not automatically continued after an initial period of
participation.
	 
	6.	 	Performance Shares and Performance Units. An Award of Performance Shares or
Performance Units under the Plan shall entitle the Participant to future payments or Shares or
a combination thereof based upon the level of achievement with respect to one

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	 	 	or more pre-established performance criteria (including Qualifying Performance Criteria)
established for a Performance Cycle.

	 	6.1.	 	Amount of Award. The Committee shall establish a maximum amount of a
Participant’s Award, which amount shall be denominated in Shares in the case of
Performance Shares or in dollars in the case of Performance Units.
	 
	 	6.2.	 	Communication of Award. Each Award Agreement evidencing an Award of
Performance Shares or Performance Units shall contain provisions regarding (i) the
target and maximum amount payable to the Participant pursuant to the Award, (ii) the
performance criteria and level of achievement versus the criteria that shall determine
the amount of such payment, (iii) the Performance Cycle as to which performance shall
be measured for determining the amount of any payment, (iv) the timing of any payment
earned by virtue of performance, (v) restrictions on the alienation or transfer of the
Award prior to actual payment, (vi) forfeiture provisions and (vii) such further terms
and conditions, in each case not inconsistent with this Plan, as may be determined from
time to time by the Committee.
	 
	 	6.3.	 	Performance Criteria. Performance criteria established by the Committee
shall relate to corporate, group, unit or individual performance, and may be
established in terms of earnings, growth in earnings, ratios of earnings to equity or
assets, or such other measures or standards determined by the Committee; provided,
however, that the performance criteria for any portion of an Award of Performance
Shares or Performance Units that is intended by the Committee to satisfy the
requirements for “performance-based compensation” under Code Section 162(m) shall be a
measure based on one or more Qualifying Performance Criteria selected by the Committee
and specified at the time the Award is granted. Multiple performance targets may be
used and the components of multiple performance targets may be given the same or
different weighting in determining the amount of an Award earned, and may relate to
absolute performance or relative performance measured against other groups, units,
individuals or entities.
	 
	 	6.4.	 	Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, the amount paid under an Award of Performance Shares or Performance
Units on account of either financial performance or personal performance evaluations
may be reduced by the Committee on the basis of such further considerations as the
Committee shall determine.
	 
	 	6.5.	 	Payment of Awards. Following the conclusion of each Performance Cycle,
the Committee shall determine the extent to which performance criteria have been
attained, and the satisfaction of any other terms and conditions with respect to an
Award relating to such Performance Cycle. The Committee shall determine what, if any,
payment is due with respect to an Award and whether such payment shall be made in cash,
Stock or a combination thereof. Payment shall be made in a lump sum or installments, as
determined by the Committee at the time the Award is granted, commencing as promptly as
practicable following the end of the

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	 	 	 	applicable Performance Cycle, subject to such terms and conditions and in such form
as may be prescribed by the Committee. Payment in Stock may be in Restricted Stock
or Restricted Stock Units, as determined by the Committee at the time the Award is
granted.
	 
	 	6.6.	 	Termination of Employment. Unless the Committee provides otherwise:

	 	(a)	 	Due to Death or Disability. If a Participant who is an
Employee ceases to be an Employee or if a Participant who is a director ceases
to be a director before the end of a Performance Cycle, in either case by
reason of death or permanent disability, the Performance Cycle for such
Participant for the purpose of determining the amount of Award payable shall
end at the end of the calendar quarter immediately preceding the date on which
said Participant ceased to be an Employee or director, as the case may be. The
amount of an Award payable to a Participant (or the Beneficiary of a deceased
Participant) to whom the preceding sentence is applicable shall be paid at the
end of the Performance Cycle, and shall be that fraction of the Award computed
pursuant to the preceding sentence, the numerator of which is the number of
calendar quarters during the Performance Cycle during all of which said
Participant was an Employee or director and the denominator of which is the
number of full calendar quarters in the Performance Cycle.
	 
	 	(b)	 	Due to Reasons Other Than Death or Disability. Upon any
other termination of employment as an Employee or director of a Participant
during a Performance Cycle, participation in the Plan shall cease and all
outstanding Awards of Performance Shares or Performance Units to such
Participant shall be cancelled.

	7.	 	Restricted Stock Awards. An Award of Restricted Stock under the Plan shall consist of
Shares, the grant, issuance, retention, vesting and/or transferability of which are subject,
during specified periods of time, to such conditions and terms as the Committee deems
appropriate. Restricted Stock granted pursuant to the Plan need not be identical, but each
grant of Restricted Stock must contain and be subject to the terms and conditions set forth
below.

	 	7.1.	 	Award Agreement. Each Award of Restricted Stock shall be evidenced by
an Award Agreement. Each Award Agreement shall contain provisions regarding (i) the
number of Shares subject to the Award or a formula for determining such number, (ii)
the purchase price of the Shares, if any, and the means of payment, (iii) such terms
and conditions on the grant, issuance, vesting and/or forfeiture of the Restricted
Stock as may be determined from time to time by the Committee, (iv) restrictions on the
transferability of the Award and (v) such further terms and conditions, in each case
not inconsistent with this Plan, as may be determined from time to time by the
Committee. Shares issued under an Award of Restricted Stock may be issued in the name
of the Participant and held by the Participant or held by the Company, in each case as
the Committee may provide.

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	 	7.2.	 	Vesting and Lapse of Restrictions. The grant, issuance, retention,
vesting and/or settlement of Shares of Restricted Stock shall occur at such time and in
such installments as determined by the Committee or under criteria established by the
Committee. The Committee shall have the right to make the timing of the grant and/or
the issuance, ability to retain, vesting and/or settlement of Shares of Restricted
Stock subject to continued employment, passage of time and/or such performance criteria
as deemed appropriate by the Committee.
	 
	 	7.3.	 	Rights as a Shareholder. Unless otherwise determined by the Committee,
a Participant shall have all voting, dividend, liquidation and other rights with
respect to Restricted Stock held by such Participant as if the Participant held
unrestricted Stock; provided that the unvested portion of any award of Restricted Stock
shall be subject to any restrictions on transferability or risks of forfeiture imposed
pursuant to Sections 7.1, 7.2 and 7.4. Unless the Committee otherwise determines or
unless the terms of the applicable Award Agreement or grant provides otherwise, any
non-cash dividends or distributions paid with respect to shares of unvested Restricted
Stock shall be subject to the same restrictions and vesting schedule as the Shares to
which such dividends or distributions relate.
	 
	 	7.4.	 	Termination of Employment. Unless the Committee provides otherwise:

	 	(a)	 	Due to Death or Disability. If a Participant who is an
Employee ceases to be an Employee or if a Participant who is a director ceases
to be a director prior to the lapse of restrictions on Shares of Restricted
Stock, in either case by reason of death or permanent disability, all
restrictions on Shares of Restricted Stock held for the Participant’s benefit
shall immediately lapse.
	 
	 	(b)	 	Due to Reasons Other Than Death or Disability. Upon any
other termination of employment as an Employee or director prior to the lapse
of restrictions, participation in the Plan shall cease and all Shares of
Restricted Stock held for the benefit of a Participant shall be forfeited by
the Participant.

	 	7.5.	 	Certificates. The Committee may require that certificates representing
Shares of Restricted Stock be retained and held in escrow by a designated employee or
agent of the Company or any Affiliate until any restrictions applicable to Shares of
Restricted Stock so retained have been satisfied or lapsed. Each certificate issued in
respect to an Award of Restricted Stock may, at the election of the Committee, bear the
following legend:
	 
	 	 	 	“This certificate and the shares of stock represented hereby are subject to the
terms and conditions (including forfeiture provisions and restrictions against
transfer) contained in the G&K Services, Inc. Restated Equity Incentive Plan (2010)
and the Restricted Stock Award. Release from such terms and conditions shall obtain
only in accordance with the provisions of the Plan and the Award, a

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	 	 	 	copy of each of which is on file in the office of the Secretary of G&K Services,
Inc.”

	8.	 	Stock Awards.

	 	8.1.	 	Grant. A Participant may be granted one or more Stock Awards under the
Plan. Stock Awards shall be subject to such terms and conditions, consistent with the
other provisions of the Plan, as may be determined by the Committee.
	 
	 	8.2.	 	Rights as a Shareholder. A Participant shall have all voting, dividend,
liquidation and other rights with respect to Shares issued to the Participant as a
Stock Award under this Section 8 upon the Participant becoming the holder of record of
the Shares granted pursuant to such Stock Award; provided that the Committee may impose
such restrictions on the assignment or transfer of Shares awarded pursuant to a Stock
Award as it considers appropriate.

	9.	 	Restricted Stock Units. Restricted Stock Units are Awards denominated in units under
which the issuance of Shares is subject to such conditions and terms as the Committee deems
appropriate. Restricted Stock Units granted pursuant to the Plan need not be identical, but
each grant of Restricted Stock Units must contain and be subject to the terms and conditions
set forth below. Restricted Stock Units may be granted without vesting or forfeiture
restrictions. Such Restricted Stock Units may also be called “Deferred Stock Units,” in the
discretion of the Committee.

	 	9.1.	 	Award Agreement. Each Award of Restricted Stock Units shall be
evidenced by an Award Agreement. Each Award Agreement shall contain provisions
regarding (i) the number of Restricted Stock Units subject to such Award or a formula
for determining such number, (ii) the purchase price of the Shares subject to the
Award, if any, and the means of payment, (iii) such terms and conditions on the grant,
issuance, vesting and/or forfeiture of the Restricted Stock Units as may be determined
from time to time by the Committee, (iv) restrictions on the transferability of the
Award, and (v) such further terms and conditions in each case not inconsistent with
this Plan as may be determined from time to time by the Committee.
	 
	 	9.2.	 	Vesting and Lapse of Restrictions. The grant, issuance, retention,
vesting and/or settlement of Restricted Stock Units shall occur at such time and in
such installments as determined by the Committee or under criteria established by the
Committee. The Committee shall have the right to make the timing of the grant and/or
the issuance, ability to retain, vesting and/or settlement of Restricted Stock Units
subject to continued employment, passage of time and/or such performance criteria as
deemed appropriate by the Committee.
	 
	 	9.3.	 	Rights as a Shareholder. Participants shall have no voting rights with
respect to Shares underlying Restricted Stock Units unless and until such Shares are
reflected as issued and outstanding shares on the Company’s stock ledger. Shares
underlying Restricted Stock Units shall be entitled to dividends or dividend

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	 	 	 	equivalents only to the extent provided by the Committee. If an Award of
Restricted Stock Units includes dividend equivalents, an amount equal to the
dividends that would have been paid if the Restricted Stock Units had been issued
and outstanding Shares as of the record date for the dividends shall be paid to the
Participant in cash subject to applicable withholding taxes in accordance with the
terms of the Award as determined by the Committee, to the extent consistent with
Section 409A of the Code.
	 
	 	9.4.	 	Termination of Employment. Unless the Committee provides otherwise:

	 	(a)	 	Due to Death or Disability. If a Participant who is an
Employee ceases to be an Employee or if a Participant who is a director ceases
to be a director, in either case by reason of the Participant’s death or
permanent disability, all restrictions on the Restricted Stock Units of the
Participant shall lapse in accordance with the terms of the Award as determined
by the Committee.
	 
	 	(b)	 	Due to Reasons Other Than Death or Disability. For
Awards designated Restricted Stock Units by the Committee, if a Participant
ceases employment as an Employee or director for any reason other than death or
permanent disability, all Restricted Stock Units of the Participant and all
rights to receive dividend equivalents thereon shall immediately terminate
without notice of any kind and shall be forfeited by the Participant. The
forgoing sentence shall not apply to an Award designated as a Deferred Stock
Unit by the Committee unless the Committee provides to the contrary in the
Award.

	10.	 	Options. The Committee may grant an Option or provide for the grant of an Option,
either from time-to-time in the discretion of the Committee or automatically upon the
occurrence of specified events, including, without limitation, the achievement of performance
goals (which may include Qualifying Performance Criteria). Except to the extent provided
herein, no Participant (or Beneficiary of a deceased Participant) shall have any rights as a
shareholder with respect to any Shares subject to an Option granted hereunder until said
Shares have been issued. Options granted pursuant to the Plan need not be identical, but each
Option must contain and be subject to the terms and conditions set forth below.

	 	10.1.	 	Type of Option; Number of Shares. Each Option shall be evidenced by an
Award Agreement identifying the Option represented thereby as an Incentive Stock Option
or Non-Qualified Stock Option, as the case may be, and the number of Shares to which
the Option applies.
	 
	 	10.2.	 	Exercise Price. The exercise price under each Option shall be
established by the Committee and shall not be less than the Fair Market Value of the
Shares subject to the Option on the date of grant; provided, however, that the exercise
price per Share with respect to an Option that is granted in connection with a merger
or other acquisition as a substitute or replacement award for options held by

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	 		 	optionees of the acquired entity may be less than 100% of the Fair Market Value on
the date such Option is granted.
	 
	 	10.3.	 	Exercisability. The Committee shall have the right to make the timing
of the ability to exercise any Option subject to continued employment, the passage of
time and/or such performance requirements as deemed appropriate by the Committee.
	 
	 	10.4.	 	Exercise Term. Each Option shall have a Term established by the
Committee, provided that no Incentive Stock Option shall be exercisable after ten years
from the date of grant.
	 
	 	10.5.	 	Payment for Shares. The exercise price of the Shares with respect to
which an Option is exercised shall be payable at the time of exercise in accordance
with procedures established by the Company. The exercise price of any Option may be
paid in cash or, to the extent allowed by the Committee, an irrevocable commitment by a
broker to pay over such amount from a sale of the Shares issuable under an Option, the
delivery (either physically or by attestation) of previously-owned Shares, or a
combination thereof.
	 
	 	10.6.	 	No Repricing. Other than in connection with a change in the Company’s
capitalization (as described in Section 25), an Option may not be re-priced without
shareholder approval (including canceling previously awarded Options and re-granting
them with a lower exercise price).
	 
	 	10.7.	 	No Reload Grants. Stock Options shall not be granted under the Plan in
consideration for and shall not be conditioned upon the delivery of Shares to the
Company in payment of the exercise price and/or tax withholding obligation under any
other employee stock option or stock appreciation right.
	 
	 	10.8.	 	Incentive Stock Options. In the case of an Incentive Stock Option,
each Option shall be subject to any terms, conditions and provisions as the Committee
determines necessary or desirable in order to qualify the Option as an Incentive Stock
Option. Notwithstanding anything to the contrary in this Section 10, in the case of an
Incentive Stock Option (a) if the Participant owns stock possessing more than 10
percent of the combined voting power of all classes of stock of the Company (a “10%
Shareholder”), the exercise price of such Option must be at least 110 percent of the
Fair Market Value of the Common Stock on the date of grant, and the Option must expire
within a period of not more than five years from the date of grant, and (b) termination
of employment will be deemed to occur when the person to whom an Award was granted
ceases to be an employee (as determined in accordance with Section 3401(c) of the Code
and the regulations promulgated thereunder) of the Company and its subsidiaries.
Options designated as Incentive Stock Options may not be issued more than ten years
after the date that the Plan was adopted, or the date the Plan was approved by
shareholders, whichever is later. If this Plan as restated is approved by the
shareholders in accordance with Minnesota Statute Section 302A.437, at the next annual
meeting,

12

 

	 	 	 	the Plan shall be considered to have been adopted as of the date of the next annual
meeting with respect to the number of Shares available for issuance as of that date.
Notwithstanding anything in this Section 10 to the contrary, Options designated as
Incentive Stock Options shall not be eligible for treatment under the Code as
Incentive Stock Options (and shall be deemed Non-Qualified Stock Options) to the
extent that either (i) the aggregate Fair Market Value of Shares (determined as of
the time of grant) with respect to which such Options are exercisable for the first
time by the Participant during any calendar year (under all plans of the Company and
any Affiliate) exceeds $100,000, taking Options into account in the order in which
they were granted, and (ii) such Options otherwise remain exercisable but are not
exercised within three months of termination of employment (or such other period of
time provided in Section 422 of the Code).
	 
	 	10.9.	 	Termination of Employment.

	 	(a)	 	Due to Death or Disability. If a Participant who is an
Employee ceases to be an Employee or if a Participant who is a director ceases
to be a director in either case by reason of death or permanent disability,
each outstanding Option shall become exercisable to the extent and for such
period or periods determined by the Committee but not beyond the expiration
date of said Option. If a Participant dies before exercising all outstanding
Options, the outstanding Options shall be exercisable by the Participant’s
Beneficiary.
	 
	 	(b)	 	Due to Reasons Other Than Death or Disability. Unless
the Committee provides otherwise, upon any other termination of employment as
an Employee or director, all rights of the Participant under this Plan shall
immediately terminate without notice of any kind.

	11.	 	Stock Appreciation Rights.

	 	11.1.	 	General. An Award of a Stock Appreciation Right shall entitle the
Participant, subject to terms and conditions determined by the Committee to receive
upon exercise of the right an amount equal to or otherwise based on the excess of (a)
the Fair Market Value of a Share at the time of exercise over (b) the exercise price of
the right, as established by the Committee on the date the Award is granted. Stock
Appreciation Rights may be granted to Participants from time to time either in tandem
with, or as a component of, an Option granted under Section 10, other Awards granted
under the Plan or stock options granted under any other Company equity compensation
plan (“tandem SARs”) or without reference to other Awards or stock options
(“freestanding SARs”). Any Stock Appreciation Right granted in tandem with an Option
may be granted at the same time such Option is granted or at any time thereafter before
exercise or expiration of such Option. The Committee may provide that the exercise of a
tandem SAR will be in lieu of the exercise of the stock option or Award in connection
with which the tandem SAR was granted. A tandem SAR may not be exercised at any time
when the per Share Fair Market Value of the Shares to which it relates does not exceed
the exercise

13

 

	 	 	 	price of the Option associated with the tandem SAR. The provisions of Stock
Appreciation Rights need not be the same with respect to each grant or each
recipient. All freestanding SARs shall be granted subject to the same terms and
conditions applicable to Options as set forth in Section 10, and all tandem SARs
shall have the same vesting, exercisability, forfeiture and termination provisions
as such Award or stock option to which they relate. Subject to the foregoing
sentence and the terms of the Plan, the Committee may impose such other conditions
or restrictions on any Stock Appreciation Right as it shall deem appropriate.
	 
	 	11.2.	 	Exercise Price. The per Share price for exercise of Stock Appreciation
Rights shall be determined by the Committee, but shall be a price that is equal to or
greater than 100% of the Fair Market Value of the Shares subject to the Award on the
date of grant; provided, however, that the per Share exercise price with respect to a
Stock Appreciation Right that is granted in connection with a merger or other
acquisition as a substitute or replacement award for stock appreciation rights held by
awardees of the acquired entity may be less than 100% of the Fair Market Value on the
date such Award is granted.
	 
	 	11.3.	 	No Repricing. Other than in connection with a change in the Company’s
capitalization (as described in Section 25), a Stock Appreciation Right may not be
re-priced without shareholder approval (including canceling previously awarded Stock
Appreciation Rights and re-granting them with a lower exercise price).
	 
	 	11.4.	 	No Reload Grants. Stock Appreciation Rights shall not be granted under
the Plan in consideration for and shall not be conditioned upon the delivery of Shares
to the Company in payment of the exercise price and/or tax withholding obligation under
any other employee stock option or stock appreciation right.
	 
	 	11.5.	 	Termination of Employment.

	 	(a)	 	Due to Death or Disability.

	 	(i)	 	If a Participant who is an Employee ceases to
be an Employee or if a Participant who is a director ceases to be a
director, in either case by reason of death or permanent disability,
each outstanding freestanding SAR shall become exercisable to the
extent and for such period or periods determined by the Committee but
not beyond the expiration date of said Stock Appreciation Right.
	 
	 	(ii)	 	If a Participant who is an Employee ceases to
be an Employee or if a Participant who is a director ceases to be a
director, in either case by reason of death or permanent disability,
each outstanding tandem SAR shall become exercisable to the extent and
for such period or periods determined by the Committee but not beyond
the expiration date of said Stock Appreciation Right. If a Participant

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	 	 	 	dies before exercising all tandem SARs, the outstanding tandem SARs
shall be exercisable by the Participant’s Beneficiary.

	 	(b)	 	Due to Reasons Other Than Death or Disability. Unless
the Committee provides otherwise, upon any other termination of employment as
an Employee or director, all rights of the Participant under this Plan shall
immediately terminate without notice of any kind.

	 	11.6	 	Payment. Upon exercise of a Stock Appreciation Right, payment shall be
made in the form of cash, Shares or a combination thereof as determined by the
Committee at the time the Award is granted. However, notwithstanding any other
provisions of this Plan, in no event may the payment (whether in cash or Stock) upon
exercise of a Stock Appreciation Right exceed an amount equal to 100% of the Fair
Market Value of the Shares subject to the Stock Appreciation Right at the time of
grant.

	12.	 	Other Stock-Based Awards. The Committee, in its sole discretion, may grant or sell
Awards of Shares and Awards that are valued in whole or in part by reference to, or are
otherwise based on the Fair Market Value of, Shares. Such Other Stock-Based Awards shall be in
such form, and dependent on such conditions, as the Committee shall determine, including,
without limitation, the right to receive, or vest with respect to, one or more Shares (or the
equivalent cash value of such Shares) upon the completion of a specified period of service,
the occurrence of an event and/or the attainment of performance objectives. Other Stock-Based
Awards may be granted alone or in addition to any other Awards granted under the Plan. Subject
to the provisions of the Plan, the Committee shall determine the number of Shares to be
awarded to a Participant under (or otherwise related to) such Other Stock-Based Awards;
whether such Other Stock-Based Awards shall be settled in cash, Shares or a combination of
cash and Shares; and all other terms and conditions of such Awards (including, without
limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded
and issued shall be fully paid and non-assessable).
	 
	13.	 	Nontransferability of Rights. Unless the Committee provides otherwise, (i) no rights
under any Award will be assignable or transferable and no Participant or Beneficiary will have
any power to anticipate, alienate, dispose of, pledge or encumber any rights under any Award,
and (ii) the rights and the benefits of any Award may be exercised and received during the
lifetime of the Participant only by the Participant or by the Participant’s legal
representative. The Participant may, by completing and signing a written beneficiary
designation form which is delivered to and accepted by the Company, designate a beneficiary to
receive any payment and/or exercise any rights with respect to outstanding Awards upon the
Participant’s death. If at the time of the Participant’s death there is not on file a fully
effective beneficiary designation form, or if the designated beneficiary did not survive the
Participant, the person or persons surviving at the time of the Participant’s death in the
first of the following classes of beneficiaries in which there is a survivor, shall have the
right to receive any payment and/or exercise any rights with respect to outstanding Awards:

15

 

	 	(a)	 	Participant’s surviving spouse;
	 
	 	(b)	 	Equally to the Participant’s children, except that if any of the Participant’s
children predecease the Participant but leave descendants surviving, such descendants
shall take by right of representation the share their parent would have taken if
living;
	 
	 	(c)	 	Participant’s surviving parents equally;
	 
	 	(d)	 	Participant’s surviving brothers and sisters equally; or
	 
	 	(e)	 	The legal representative of the Participant’s estate.

	 	 	If a person in the class surviving dies before receiving any payment and/or exercising any
rights with respect to outstanding Awards (or the person’s share of any payment and/or
rights in case of more than one person in the class), that person’s right to receive any
payment and/or exercise any rights with respect to outstanding Awards will lapse and the
determination of who will be entitled to receive any payment and/or exercise any rights with
respect to outstanding Awards will be determined as if that person predeceased the
Participant.
	 
	14.	 	Termination of Employment.

	 	14.1.	 	Transfers of employment between the Company and an Affiliate, or between
Affiliates, will not constitute termination of employment for purposes of any Award.
	 
	 	14.2.	 	Subject to compliance with applicable law, the Committee may specify whether
any authorized leave of absence or absence for military or government service or for
any other reasons will constitute a termination of employment for purposes of the Award
and the Plan.

	15.	 	Change in Control. In the event of a Change in Control after the Effective Date, the
Committee may (subject to Sections 25 and 30), but shall not be obligated to, (a) accelerate,
vest or cause the restrictions to lapse with respect to, all or any portion of an Award, (b)
cancel Awards for fair value (as determined in the sole discretion of the Committee) which, in
the case of Options and Stock Appreciation Rights, may equal the excess, if any, of the value
of the consideration to be paid in the Change in Control transaction to holders of the same
number of Shares subject to such Options or Stock Appreciation Rights (or, if no consideration
is paid in any such transaction, the Fair Market Value of the Shares subject to such Options
or Stock Appreciation Rights) over the aggregate exercise price of such Options or Stock
Appreciation Rights, and which for Performance Shares and Performance Units may be determined
as if the Performance Cycle ended as of the close of the calendar quarter preceding the
consummation of the Corporate Transaction, with a pro rata portion of the Award payable based
upon the number of completed calendar quarters in the Performance Cycle, (c) provide for the
issuance of substitute Awards that will substantially preserve the otherwise applicable terms
of any affected Awards previously granted hereunder as determined by the Committee in its sole
discretion, or (d) provide that for a period of at least 30 days prior

16

 

	 	 	to the Change in Control, Options or Awards shall be exercisable as to all Shares subject
thereto and that upon the occurrence of the Change in Control, such Option or Awards shall
terminate and be of no further force and effect.
	 
	16.	 	Qualifying Performance-Based Compensation.

	 	16.1.	 	General. The Committee may specify that all or a portion of any Award
is intended to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code; provided that the performance criteria for any portion of
an Award that is intended by the Committee to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code shall be a measure
based on one or more Qualifying Performance Criteria selected by the Committee and
specified at the time such Award is granted. The Committee shall certify the extent to
which any Qualifying Performance Criteria has been satisfied, and the amount payable as
a result thereof, prior to payment, settlement or vesting of any Award that is intended
to satisfy the requirements for “performance-based compensation” under Section 162(m)
of the Code. Notwithstanding satisfaction of any performance goals, the number of
Shares issued or the amount paid under an Award may be reduced by the Committee on the
basis of such further considerations as the Committee shall determine.
	 
	 	16.2.	 	Qualifying Performance Criteria. For purposes of this Plan, the term
“Qualifying Performance Criteria” shall mean any one or more of the following
performance criteria, either individually, alternatively or in any combination, applied
to either the Company as a whole or to a business unit or Affiliate, either
individually, alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a
pre-established target, to previous years’ results or to a designated comparison group,
in each case as specified and determined by the Committee: (a) cash flow, (b) earnings
per share of the Company, (c) earnings before interest, taxes and amortization, (d)
share price performance, (e) return on capital, (f) return on assets or net assets, (g)
revenue, (h) net earnings or net income, (i) operating income or net operating income,
(j) operating profit or net operating profit, (k) operating margin or profit margin,
(l) return on operating revenue, (m) return on invested capital, (n) market segment
share, (o) brand recognition/acceptance, (p) customer satisfaction, (q) return on
equity, (r) total shareholder return, (s) growth in sales, (t) productivity ratios, (u)
expense targets, (v) working capital targets, or (w) operating efficiencies. The
Committee may appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during a
Performance Cycle: (i) asset write-down, (ii) litigation or claim judgments or
settlements, (iii) the effect of changes in or under provisions under tax laws,
accounting principles or other such laws or provisions affecting reported results, (iv)
accruals for reorganizations or restructuring programs, and (v) any extraordinary
nonrecurring items as described in FASB Accounting Standards Codification 255-20,
formerly Accounting Principles Board Opinion No. 30, and/or in management’s discussion
and analysis of financial condition and results of operations appearing in the
Company’s

17

 

	 	 	 	annual report to shareholders for the applicable year. Any Qualifying Performance
Criteria must be objectively determinable, must be established by the Committee
while the outcome for the Performance Cycle is substantially uncertain and while no
more than 90 days, or if less, 25 percent of the number of days in the Performance
Cycle have passed, and must otherwise meet the requirements of Section 162(m) of the
Code.

	17.	 	Effective Date of the Plan. The Plan was initially adopted by the Board on August 23,
2006, as the G&K Services, Inc. 2006 Equity Incentive Plan and was approved by the
shareholders at their November 16, 2006 annual meeting. The Plan as restated herein, including
the increase in the number of Shares available for issuance, was approved by the Board on
August 19, 2010, subject to approval of the shareholders at their next annual meeting. If this
Plan as restated is not approved by the shareholders in accordance with Minnesota Statute
Section 302A.437, at the next annual meeting, the Plan as restated shall be void, but the Plan
as in existence before its restatement shall remain in effect. The Plan shall remain available
for the grant of Awards until all shares available for grant have been awarded and all Awards
have been settled. Notwithstanding the foregoing, the Plan may be terminated at such earlier
time as the Board may determine. Termination of the Plan will not affect the rights and
obligations of the Participants and the Company arising under Awards theretofore granted and
then in effect.
	 
	18.	 	Right to Terminate Employment. Nothing in the Plan shall confer upon any Participant
the right to continue in the employment of the Company or any Affiliate or affect any right
which the Company or any Affiliate may have to terminate employment of the Participant.
	 
	19.	 	Compliance With Laws; Listing and Registration of Shares. All Awards granted under
the Plan (and all issuances of Stock or other securities under the Plan) shall be subject to
all applicable laws, rules and regulations, and to the requirement that if at any time the
Committee shall determine that the listing, registration or qualification of the Shares
covered thereby upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a condition of,
or in connection with, the grant of such Award or the issuance or purchase of Shares
thereunder, such Award may not be exercised in whole or in part, or the restrictions on such
Award shall not lapse, unless and until such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not acceptable to the
Committee.
	 
	20.	 	Conditions and Restrictions Upon Securities Subject to Awards. The Committee may
provide that the Shares issued upon exercise of an Option or Stock Appreciation Right or
otherwise subject to or issued under an Award shall be subject to such further agreements,
restrictions, conditions or limitations as the Committee in its discretion may specify prior
to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement
of such Award, including without limitation, conditions on vesting or transferability,
forfeiture or repurchase provisions and method of payment for the Shares issued upon exercise,
vesting or settlement of such Award (including the actual or constructive surrender of Shares
already owned by the Participant) or payment of taxes

18

 

	 	 	arising in connection with an Award. Without limiting the foregoing, such restrictions may
address the timing and manner of any re-sales by the Participant or other subsequent
transfers by the Participant of any Shares issued under an Award, including without
limitation (a) restrictions under an insider trading policy or pursuant to applicable law,
(b) restrictions designed to delay and/or coordinate the timing and manner of sales by the
Participant and holders of other Company equity compensation arrangements, and (c)
restrictions as to the use of a specified brokerage firm for such re-sales or other
transfers.
	 
	21.	 	Withholding Taxes. The Company or an Affiliate shall be entitled to: (a) withhold
and deduct from future wages of a Participant (or from other amounts that may be due and owing
to a Participant from the Company or an Affiliate), including all payments under this Plan, or
make other arrangements for the collection of (including through the sale of Shares otherwise
issuable pursuant to the applicable Award), all legally required amounts necessary to satisfy
any and all federal, state, local and foreign withholding and employment-related tax
requirements attributable to an Award, including, without limitation, the grant, exercise or
vesting of, or payment of dividends with respect to, an Award or a disqualifying disposition
of Common Stock received upon exercise of an Incentive Stock Option; or (b) require a
Participant promptly to remit the amount of such withholding to the Company before taking any
action with respect to an Award. To the extent specified by the Committee, withholding may be
satisfied by withholding Stock to be received upon exercise or vesting of an Award or by
delivery to the Company of previously owned Stock. In addition, the Company may reasonably
delay the issuance or delivery of Shares pursuant to an Award as it determines appropriate to
address tax withholding and other administrative matters.
	 
	22.	 	Deferral of Payments. The Committee may, in an Award Agreement or otherwise, provide
for the deferred delivery of Shares upon settlement, vesting or other events with respect to
Restricted Stock or Restricted Stock Units, or in payment or satisfaction of an Award of
Performance Shares or Performance Units. Notwithstanding anything herein to the contrary, in
no event will any deferral of the delivery of Shares or any other payment with respect to any
Award be allowed if the Committee determines, in its sole discretion, that the deferral would
result in the imposition of additional tax under Section 409A(1)(B) of the Code. Shares that
are allocated after the Effective Date in connection with the deferral of an Award under the
Director Deferred Compensation Plan (which includes dividend equivalents that are to be
allocated under that plan after the Effective Date in connection with deferrals under the 1996
Director Stock Option Plan) or Shares that are allocated after the Effective Date under any
other deferred compensation plan allowing for payment in Shares that refers specifically to
this Plan, shall be issued under this Plan. Such issuances shall reduce the number of Shares
available for Awards under this Plan.
	 
	23.	 	No Liability of Company. The Company and any Affiliate which is in existence or
hereafter comes into existence shall not be liable to a Participant, Beneficiary or any other
person as to: (a) the non-issuance or sale of Stock as to which the Company has been unable
to obtain from any regulatory body having jurisdiction over the matter, the authority deemed
by the Company’s counsel to be necessary to the lawful issuance and

19

 

	 	 	sale of any Shares
hereunder; (b) any tax consequence to any Participant, Beneficiary or
other person due to the receipt, exercise or settlement of any Award granted hereunder; or
(c) any provision of law or legal restriction that prohibits or restricts the transfer of
Shares issued pursuant to any Award.
	 
	24.	 	Amendment, Modification and Termination of the Plan. The Board or Committee may at
any time terminate, suspend or modify the Plan, except that the Board or Committee will not,
without authorization of the shareholders of the Company, effect any change (other than
through adjustment for changes in capitalization as provided in Section 25) which will:

	 	(a)	 	increase the total amount of Stock which may be awarded under the Plan;
	 
	 	(b)	 	increase the individual maximum limits in Section 4.3;
	 
	 	(c)	 	change the class of persons eligible to participate in the Plan;
	 
	 	(d)	 	reduce the exercise price of outstanding Options or Stock Appreciation Rights;
or
	 
	 	(e)	 	otherwise amend the Plan in any manner requiring shareholder approval by law or
under listing requirements of any exchange or interdealer quotation system on which the
Shares are listed.

	 	 	No termination, suspension, or modification of the Plan will adversely affect any right
acquired by any Participant or any Beneficiary under an Award granted before the date of
termination, suspension, or modification, unless otherwise agreed to by the Participant;
but, it will be conclusively presumed that any adjustment for changes in capitalization
provided for in Section 25 does not adversely affect any right.
	 
	25.	 	Adjustment for Changes in Capitalization.

	 	(a)	 	In the event that the number of Shares shall be increased or decreased through
a reorganization, reclassification, combination of shares, stock split, reverse stock
split, spin-off, stock dividend, or otherwise, then each Share that has been authorized
for issuance under the Plan, whether such Share is then currently subject to or may
become subject to an Award under the Plan, as well as the per share limits set forth in
Section 4, shall be appropriately adjusted by the Committee to reflect such increase or
decrease, unless the Company provides otherwise under the terms of such transaction.
The terms of any outstanding Award shall also be adjusted by the Committee as to price,
number of Shares subject to such Award and other terms to reflect the foregoing events.
	 
	 	(b)	 	In the event there shall be any other change in the number or kind of
outstanding Shares, or any stock or other securities into which such Shares shall have
been changed, or for which it shall have been exchanged, whether by reason of a merger,
consolidation or otherwise, then the Committee shall, in its sole discretion, determine
the appropriate adjustment, if any, to be effected. In addition, in the event of such
change described in this subsection the Committee

20

 

	 	 	 	may accelerate the time or times at
which any Award may be exercised and may
provide for cancellation of such accelerated Awards that are not exercised within a
time prescribed by the Committee in its sole discretion. Notwithstanding anything to
the contrary herein, any adjustment to Options granted pursuant to this Plan
intended to qualify as Incentive Stock Options shall comply with the requirements,
provisions and restrictions of the Code, and no change shall be made that would
result in the imposition of additional tax under Section 409A(1)(B) of the Code.
	 
	 	(c)	 	No right to purchase fractional Shares shall result from any adjustment in
Awards pursuant to this Section 25. In case of any such adjustment, the Shares subject
to the Award shall be rounded down to the nearest whole Share. Notice of any adjustment
shall be given by the Company to each Participant, which shall have been so adjusted
and such adjustment (whether or not notice is given) shall be effective and binding for
all purposes of the Plan.

	26.	 	Transferability. Unless the Award Agreement (or an amendment thereto authorized by
the Committee) expressly states that the Award is transferable, no Award granted under this
Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged,
hypothecated or otherwise transferred in any manner, other than by will or the laws of descent
and distribution. The Committee may grant an Award or amend an outstanding Award to provide
that the Award is transferable or assignable (a) in the case of a transfer without the payment
of any consideration, to any “family member” as such term is defined in Section A.1(a)(5) of
the General Instructions to Form S-8 under the Securities Act of 1933, as such may be amended
from time to time, and (b) in any transfer described in clause (i) or (ii) of Section
A.1(a)(5) of the General Instructions to Form S-8 under the 1933 Act as amended from time to
time, provided that following any such transfer or assignment the Award will remain subject to
substantially the same terms applicable to the Award while held by the Participant to whom it
was granted, as modified as the Committee shall determine appropriate, and as a condition to
such transfer the transferee shall execute an agreement agreeing to be bound by such terms;
provided further, that an Incentive Stock Option may be transferred or assigned only to the
extent consistent with Section 422 of the Code. Any purported assignment, transfer or
encumbrance that does not qualify under this Section 26 shall be void and unenforceable
against the Company.
	 
	27.	 	International Participants. With respect to Participants who reside or work outside
the United States of America and who are not (and who are not expected to be) “covered
employees” within the meaning of Section 162(m) of the Code, the Committee may, in its sole
discretion, amend the terms of the Plan or Awards with respect to such Participants in order
to conform such terms with the requirements of local law or to obtain more favorable tax or
other treatment for a Participant, the Company or an Affiliate. Notwithstanding the provisions
of Sections 10.2 and 11.2, where applicable foreign law requires that a compensatory stock
right be priced based upon a specific price averaging method and period, an Award granted in
accordance with such applicable foreign law will be treated as meeting the requirements of
Section 10.2 or 11.2, provided that the averaging period does not exceed 30 days.

21

 

	28.	 	Other Benefit Plans. All Awards shall constitute a special incentive payment to the
Participant and shall not be taken into account in computing the amount of salary or
compensation of the Participant for the purpose of determining any benefits under any pension,
retirement, profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement between the Company and the Participant, unless such plan or agreement
specifically provides otherwise.
	 
	29.	 	Choice of Law. The Plan shall be governed by and construed in accordance with the
laws of the State of Minnesota without regard to conflicts of laws, and except as otherwise
provided in the pertinent Award agreement, any and all disputes between a Participant and the
Company or any Affiliate relating to an Award shall be brought only in a state or federal
court of competent jurisdiction sitting in Minneapolis, Minnesota.
	 
	30.	 	Section 409A. Notwithstanding other provisions of the Plan or any Award agreements
thereunder, no Award shall be granted, deferred, accelerated, extended, paid out or modified
under this Plan in a manner that would result in the imposition of an additional tax under
Section 409A of the Code upon a Participant. In the event that it is reasonably determined by
the Committee that, as a result of Section 409A of the Code, payments in respect of any Award
under the Plan may not be made at the time contemplated by the terms of the Plan or the
relevant Award agreement, as the case may be, without causing the Participant holding such
Award to be subject to taxation under Section 409A of the Code, the Company will make such
payment on the first day that would not result in the Participant incurring any tax liability
under Section 409A of the Code.

22exv4w2

Exhibit 4.2

G&K SERVICES, INC.

RESTATED EQUITY INCENTIVE PLAN (2010)

TERMS OF EMPLOYEE

RESTRICTED STOCK GRANT

Pursuant to a letter (the “Grant Letter”) addressed and delivered to you from G&K Services,
Inc. (the “Company”), and subject to your acceptance in accordance with paragraph 1 below,
the Compensation Committee (the “Committee”) of the Company’s Board of Directors has
granted you restricted shares of Class A Common Stock, $0.50 par value per share, of the Company
(the “Stock”) pursuant to the terms of the G&K Services, Inc. Restated Equity Incentive
Plan (2010) (the “Plan”). A copy of the Plan is enclosed herewith. The terms of your Stock
are governed by the provisions of the Plan generally and the specific terms set forth below. Your
Grant Letter and this statement of terms are your Award Agreement under the Plan. In the event of
any conflict or inconsistency between the terms set forth below and the provisions of the Plan, the
provisions of the Plan shall govern and control.

	1.	 	Grant of Stock

Subject to your acceptance in accordance with this paragraph 1, the Company grants you the
aggregate number of shares of Stock set forth in the Grant Letter, in accordance with the Plan.
To accept the Stock, within 14 days of the Grant Date, you must log into your account at
www.bnymellon.com/shareowner/equityaccess and select the ‘Acknowledge Grant’ button associated
with your grant. Upon such acceptance, the Stock shall be issued of record in your name in
“book-entry” form, without stock certificates, and shall be registered on the books of the
Company maintained by the Company’s transfer agent.
	 
	2.	 	Rights of Employee

Upon the acceptance and issuance of the Stock, you will become a shareholder with respect to the
Stock and shall have all of the rights of a shareholder with respect to such Stock, including
the right to vote such Stock and to receive all dividends and other distributions paid with
respect to such Stock; provided, however, that such Stock shall be subject to the restrictions
set forth in paragraph 3 below.
	 
	3.	 	Restrictions

You agree that at all times prior to the vesting of the Stock as contemplated by paragraph 4
below:

	 	a)	 	You will not sell, transfer, pledge, hypothecate or otherwise encumber the Stock; and
	 
	 	b)	 	If your employment with the Company is voluntarily or involuntarily terminated for any
reason whatsoever, or you violate the terms of any confidentiality agreement,
non-solicitation covenant or covenant not to compete, however delineated, subject to
paragraph 4 below, you will, for no consideration, forfeit and transfer to the Company all
 shares of Stock that remain subject to the restrictions set forth in this paragraph 3.
	 
	 	c)	 	Subject to the lapse of the restrictions set forth in subsections (a) and (b) of this
paragraph 3, the Stock registered on the books of the Company maintained by the Company’s
transfer agent shall bear such restrictive notations and be subject to such stop transfer
instructions as the Company shall deem necessary or appropriate in light of such
restrictions.

 

 

	4.	 	Lapse of Restrictions

The restrictions set forth in paragraph 3 above shall lapse on one-fifth of the Stock on the one
year anniversary of the “Grant Date” set forth in the Grant Letter, and one-fifth of the
Stock on each of the next four successive anniversaries of such date (each individually a
“Vesting Date”). In the event that you cease to be an employee of the Company prior to any
Vesting Date, the Stock scheduled to vest on such Vesting Date, and all Stock scheduled to vest
in the future, shall not vest and all rights to and under such non-vested Stock will terminate.
Within 30 days after the date that the restrictions set forth in subsections (a) and (b) of
Section 3 have lapsed with respect to shares of Stock and such shares have become vested, free
and clear of all restrictions, except as provided in the Plan, the Company shall instruct its
transfer agent to remove any restrictive notations and stop transfer instructions placed on the
Stock register in connection with such restrictions.
	 
	5.	 	Copy of Plan

By the accepting the Stock, you acknowledge receipt of a copy of the Plan, the terms and
conditions of which are hereby incorporated herein by reference and made a part hereof by
reference as if set forth in full.
	 
	6.	 	Administration

The agreement and understanding regarding the Stock shall at all times be subject to the terms
and conditions of the Plan. The Committee shall have the sole and complete discretion with
respect to all matters reserved to it by the Plan and decisions of the Committee with respect
thereto and to the terms set forth herein shall be final and binding upon you. In the event of
any conflict between the provisions set forth herein and those set forth in the Plan, the
provisions of the Plan shall govern and control.
	 
	7.	 	Continuation of Employment

The agreement and understanding regarding the Stock shall not confer upon you, and shall not be
construed to confer upon you, any right to continue in the employ of the Company for any period
of time, and shall not limit the rights of the Company in its sole discretion, to terminate your
employment at any time, with or without cause, for any reason or no reason, or to change your
assignment or rate of compensation.
	 
	8.	 	Withholding of Tax

To the extent that the receipt of the Stock or the lapse of any restrictions thereon results in
income to you for federal or state income tax purposes, you shall deliver to the Company at the
time of such receipt or lapse, as the case may be, such amount of money or shares of
unrestricted Stock, as permitted by the Plan, as the Company may require to meet its withholding
obligation under applicable tax laws or regulations, and, if you fail to do so, the Company is
authorized to withhold from any cash or Stock remuneration then or thereafter payable to you any
tax required to be withheld by reason of such resulting compensation income.
	 
	9.	 	Section 83(b) Election

You understand that you (and not the Company) shall be responsible for your own federal, state,
local or foreign tax liability and any of your other tax consequences that may arise as a result
of the transactions contemplated herein. You shall rely solely on the determinations of your
tax advisors or your own determinations, and not on any statements or representations by the
Company or any of its agents, with regard to all such

2

 

	 	 	tax matters. You understand that Section 83 of the Internal Revenue Code of 1986, as amended
(the “Code”), taxes as ordinary income the difference between the amount paid for the
Stock and the fair market value of the Stock as of the date restrictions on the Stock lapse. In
this context, “restriction” includes, without limitation, the vesting restrictions set forth in
paragraph 3 hereof. You understand that you may elect to be taxed at the time the Award of
restricted Stock is made rather than when and as the restrictions on the Stock lapse or expire
by filing an election under Section 83(b) of the Code with the Internal Revenue Service within
thirty (30) days from the Grant Date, as defined in your Grant Letter. In the event you file an
election under Section 83(b) of the Code, such election shall contain all information required
under the applicable treasury regulation(s) and you shall deliver a copy of such election to the
Company contemporaneously with filing such election with the Internal Revenue Service. YOU
ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE
ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF YOU REQUEST THAT THE COMPANY OR ITS
REPRESENTATIVES MAKE THIS FILING ON YOUR BEHALF.

	10.	 	Further Assurances

By accepting the Stock discussed herein, you agree to execute such papers, agreements,
assignments, or documents of title as may be necessary or desirable to effect the purposes
described herein and carry out its provisions.
	 
	11.	 	Governing Law

The agreement and understanding regarding the Stock, and its interpretation and effect, shall be
governed by the laws of the State of Minnesota applicable to contracts executed and to be
performed therein.
	 
	12.	 	Amendments

Except as provided in the Plan, this Award Agreement may be amended only by a written agreement
executed by the Company and you.
	 
	13.	 	Entire Agreement

The provisions set forth herein and those contained in the Grant Letter and the Plan embody the
entire agreement and understanding between you and the Company with respect to the matters
covered herein, in the Grant Letter and in the Plan, and such provisions may only be modified
pursuant to a written agreement signed by the party to be charged.

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