Document:

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EXHIBIT 10(O)

G&K SERVICES, INC.

2006 EQUITY INCENTIVE PLAN

TERMS OF NON-QUALIFIED

NON-EMPLOYEE DIRECTOR STOCK OPTION

ANNUAL 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 Company has granted you a non-qualified stock option (the “Option”) pursuant to the
terms of the G&K Services, Inc. 2006 Equity Incentive Plan (the “Plan”). A copy of the Plan
is enclosed herewith. The terms of your Option 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.	 	Number of Shares Subject to the Option. Upon your acceptance of the Option, the
Option entitles you to purchase all or any part of two thousand four hundred (2,400) shares of
Class A Common Stock of the Company (the “Common Stock”), in accordance with the Plan.
You may accept the Option by logging into your account at http://www.melloninvestor.com and
selecting the ‘Acknowledge Grant’ button associated with your grant.
	 
	2.	 	Purchase Price. The purchase price of each share of Common Stock covered by the
Option shall be the “Exercise Price” set forth in the Grant Letter.
	 
	3.	 	Exercise and Vesting of Option. The Option is exercisable only to the extent that
all, or any portion thereof, has vested. Except as provided in paragraph 4 below, the Option
shall vest on the first anniversary of the “Grant Date” set forth in the Grant Letter
(“Vesting Date”). In the event that you cease to be a Director of the Company prior to the
Vesting Date, that portion of the Option scheduled to vest on the Vesting Date, shall not vest
and all rights to and under such non-vested Option will terminate.
	 
	4.	 	Term of Option.

	 	(a)	 	To the extent vested, and except as otherwise provided herein or in the Plan,
no Option is exercisable after the expiration of ten (10) years from the Grant Date
(such date to be hereinafter referred to as the “Expiration Date”).
	 
	 	(b)	 	Notwithstanding anything to the contrary herein, an Option shall automatically
become immediately exercisable in full upon the death of a Non-Employee Director.
	 
	 	(c)	 	A Non-Employee Director of the Company who shall cease to be such a
Non-Employee Director for any reason, including death, while holding an Option that

 

 

has not expired and has not been fully exercised, may, at any time within one year of the
date the Non-Employee Director ceased to be a Non-Employee Director (but in no event
after the Option has expired under the provisions of subparagraph 4(a) above), exercise
the Option with respect to any Common Stock as to which the Non-Employee Director could
have exercised on the date he or she ceased to be such a Non-Employee Director.

	5.	 	Method of Exercise. Subject to the terms and conditions set forth herein and in the
Plan, the Option may be exercised, in whole or in part, by logging into your account at
http://www.melloninvestor.com or calling the Mellon Executive Services at 1-800-851-1982 and
specifying the number of shares to be purchased and by paying in full the Purchase Price for
the number of shares of Common Stock with respect to which the Option is exercised. Subject to
the provisions of the Plan, such Purchase Price shall be paid in cash and/or in shares of
Common Stock of the Company or other property. In addition, you shall, on or about
notification to you of the amount due, pay promptly an amount sufficient to satisfy applicable
federal, state and local tax requirements, if any. In the event the Option shall be exercised
by any person other than you, such notice shall be accompanied by appropriate proof of the
right of such person to exercise the Option. The Company has no obligation to deliver shares
or cash upon exercise of the Option until all applicable withholding taxes have been paid or
provided for payment and until such shares are qualified for delivery under such laws and
regulations as may be deemed by the Company to be applicable thereto. Prior to the issuance of
shares of Common Stock upon the exercise of the Option, you will have no rights as a
shareholder.

	6.	 	Non Transferability. No stock Option may be transferred, pledged or assigned
otherwise than by will or the laws of descent and distribution. An Option may be exercised,
during your lifetime, only by you, or by your guardian or legal representative. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the Option contrary to
the provisions of the Plan or the provisions hereof, and the levy of any execution,
attachment, or similar process upon the Option, will be null and void and without effect.

	7.	 	Adjustment. In the event that the number of shares of Common Stock shall be increased
or decreased through a reorganization, reclassification, combination of shares, stock split,
reverse stock split, spin-off, dividend (other than regular, quarterly cash dividends), or
otherwise, then the Option shall be appropriately adjusted by the Committee, in number of
            shares or Purchase Price or both to reflect such increase or decrease, unless the Company
provides otherwise under the terms of such transaction. In the event there shall be any other
change in the number or kind of outstanding shares of Common Stock, or any stock or other
securities into which such shares of Common Stock 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.

	8.	 	Withholding. Pursuant to the provisions of the Plan, and as described in greater
detail therein, the Company will have the right to withhold from any payments made in
connection with the Option, or to collect as a condition of payment or delivery, any taxes
required by law to be withheld.

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	9.	 	Further Assurances. By accepting the Option, 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.

	10.	 	Third Party Beneficiaries. Nothing contained herein is intended or shall be construed
as conferring upon or giving to any person, firm or corporation other than you and the Company
any rights or benefits.

	11.	 	Entire Understanding. 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.

	12.	 	Governing Law. The agreement and understanding regarding the Option, 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.

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EXHIBIT 10(P)

G&K SERVICES, INC.

2006 EQUITY INCENTIVE PLAN

TERMS OF

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. 2006 Equity Incentive Plan
(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.
You may accept the Stock by logging into your account at http://www.melloninvestor.com and
selecting 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. 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 tax matters. You understand that Section
83 of the Internal Revenue Code of 1986, as

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	 	 	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
shares of Stock are purchased 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. 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 will 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
The agreement and understanding regarding the Stock 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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