10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended July 3, 2010

Commission file number 0-4063

G&K SERVICES, INC.

(Exact name of registrant as specified in its charter)

MINNESOTA	41-0449530
(State of incorporation)	(I.R.S. Employer Identification No.)

5995 OPUS PARKWAY
MINNETONKA, MINNESOTA 55343

(Address of principal executive offices)

Registrant’s telephone number, including area code (952) 912-5500

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on which Registered
Class A Common Stock (par value $0.50 per share)	The NASDAQ Stock Market LLC
Common Stock Purchase Rights	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(b) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o (do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of December 26, 2009 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the registrant’s voting common equity held by non-affiliates was approximately $465,041,067.

On August 20, 2010, 18,582,098 shares of the registrant’s Class A Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the registrant’s definitive proxy statement relating to the annual meeting of shareholders to be held in November 2010, which definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

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G&K Services, Inc.

Form 10-K

For the fiscal year ended July 3, 2010

Table of Contents

	PAGE
PART I
Item 1. Business		4
Item 1A. Risk Factors		6
Item 1B. Unresolved Staff Comments		11
Item 2. Properties		11
Item 3. Legal Proceedings		12
Item 4. Submission of Matters to a Vote of Security Holders		12
PART II
Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities		13
Item 6. Selected Financial Data		15
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 7A. Quantitative and Qualitative Disclosure About Market Risk		27
Item 8. Financial Statements and Supplementary Data		29
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		62
Item 9A. Controls and Procedures		62
Item 9B. Other Information		62
PART III
Item 10. Directors, Executive Officers and Corporate Governance		63
Item 11. Executive Compensation		63
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		63
Item 13. Certain Relationships and Related Transactions, and Director Independence		63
Item 14. Principal Accountant Fees and Services		63
PART IV
Item 15. Exhibits and Financial Statement Schedules		64
Signatures		66
EX-10.M
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EX-10.Q
EX-10.R
EX-10.S
EX-10.T
EX-21
EX-23
EX-24
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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PART I

ITEM 1. BUSINESS

G&K Services, Inc., founded in 1902 and headquartered in Minnetonka, Minnesota, is a market leader in providing branded work apparel and facility services programs that enhance image and safety in the workplace. We serve a wide variety of North American industrial, service and high-technology companies providing them with work apparel and facility services products such as floor mats, dust mops, wiping towels, restroom supplies and selected linen items. We believe that the existing North American rental market is approximately $7.0 billion, while the existing portion of the direct sale market targeted by us is approximately $5.0 billion.

We have over 160 locations in North America. These locations serve customers in 90 of the top 100 metropolitan markets in the United States and Canada.

We target our marketing efforts towards customers and industries in market segments that are expanding and need work apparel and facility services solutions. Further, we are dedicated to providing superior customer service and high quality products through multiple sales channels and best in class program management abilities.

Customers, Products and Services

We serve approximately 165,000 customers, from Fortune 100 companies to small and midsize firms. No single customer represents more than 2.0% of our total revenues. We serve customers in virtually all industries, including automotive, warehousing, distribution, transportation, energy, manufacturing, food processing, pharmaceutical, retail, restaurants, hospitality, and many others. Over 1.1 million people wear our work apparel every work day.

Customers use branded work apparel programs to meet a variety of critical business needs in the workplace, including:

• Image — work apparel helps companies project a professional image through their employees and frame the perception of credibility, knowledge, trust and a commitment to quality to their customers. Uniformed employees are perceived as trained, competent and dependable.

• Organization safety and security — work apparel helps identify employees working for a particular organization or department.

• Brand awareness — work apparel promotes a company’s brand identity and employees serve as “walking billboards.”

• Employee retention — work apparel enhances worker morale and helps build a teamwork attitude in addition to providing a tangible employee benefit.

• Worker protection — work apparel helps protect workers from difficult environments such as heavy soils, heat, flame or chemicals.

• Product protection — work apparel and facility services help protect products against sources of contamination in the food, pharmaceutical, and health care industries.

We provide our work apparel-rental customers with a full range of services and solutions. A consultative approach is used to advise and assist our customers in creating specialized solutions which include garment application decisions, setting service and distribution requirements and choosing the appropriate fabrics, styles and colors to meet their branding, identity and safety needs. We can quickly source and access new and used garments to provide rapid response as customer needs change due to increases, decreases or turnover in their work force. Professional cleaning, finishing, repair, embellishment and replacement of uniforms in use is a normal part of the rental service. Soiled uniforms are picked up at the customer’s location and returned clean and in good condition on a service cycle frequency that meets the needs of the customer with all merchandise subject to a rigorous seven point inspection program. The most common service cycle provides for weekly service.

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Work apparel rental programs offer flexibility in styles, colors and quantities as customer requirements change; assure consistent image with professional cleaning, finishing, repair and replacement of items in use; and provide freedom from the operating, labor, energy and maintenance expense, environmental exposure and management time necessary to administer an on premise laundry.

Our facility services programs provide a wide range of dust control, maintenance, hand care and hygiene products and services. They include floor mat offerings (traction control, logo, message, scraper and anti-fatigue), dust, microfiber and wet mops, wiping towels, fender covers, selected linen items and restroom hygiene products. These products support customers’ efforts in maintaining a clean, safe and attractive environment within their facilities for their employees and customers.

We also offer direct sale of work apparel through comprehensive uniform programs and through catalog programs. Comprehensive direct sale uniform programs to large national account customers are provided through our Lion Uniform Group (Lion). Lion serves many different industries and specializes in serving the security, transportation, airline and convenience store/retail industries. They handle all aspects of the uniform program, including design, sourcing, inventory management, distribution, embellishment, information reporting, customer service and program management. The direct sale uniform programs can be used for departments and/or customers that require highly customized and branded apparel particularly for customer facing employees, or for workers who do not start at the same location each day and need work apparel they can launder themselves and can be a more economical approach for high turnover positions. Direct sale and custom-embroidered logo apparel catalog programs are also offered to meet customer branded identity needs. Our catalog programs can be used for uniform programs employee rewards and recognition, trade shows, events or customer/vendor appreciation programs.

Acquisitions

We have participated in the industry consolidation from many family owned and small local providers to several large providers. Our acquisition strategy is focused on acquisitions that expand our geographic presence and/or expand our local market share and further leverage our existing production facilities.

We did not complete any acquisitions related to our uniform rental business during fiscal 2010 or fiscal 2009; however, we did make several small acquisitions in fiscal 2008. The pro forma effect of these acquisitions, had they been acquired at the beginning of fiscal year 2008 was not material individually or in the aggregate. The total purchase consideration, including related acquisition costs of these transactions, was $63.8 million in fiscal 2008. The total purchase price exceeded the estimated fair values of assets acquired and liabilities assumed by $51.7 million in fiscal 2008.

Competition

Customers in the work apparel and facility services industry choose suppliers primarily based upon the excellence of the service they receive and the quality, fit, comfort, price and breadth of products offered and the fit with their unique business environment and brand positioning needs. While we rank among the nation’s largest work apparel suppliers, we encounter competition from many companies in the geographic areas we serve. Competitors include large publicly held companies such as Cintas Corporation, UniFirst Corporation and others. We also compete with numerous regional and local businesses that vary by geographic region. We believe that we compete effectively in our lines of business because of the quality and breadth of our product line, segmented marketing solutions that meet customers’ unique needs, the service excellence we provide, and our proven ability as a trusted outsource partner.

Manufacturing and Suppliers

We manufactured approximately 55% of the work apparel garments that we placed into service in fiscal 2010. These garments are primarily manufactured in the Dominican Republic. Various outside vendors are used to supplement our additional product needs, including garments, floor mats, dust mops, wiping towels, linens and related products. We are not aware of any circumstances that would limit our ability to obtain raw materials to support the manufacturing process or to obtain garments or other items to meet our customers’ needs.

Environmental Matters

Our operations, like those of our competitors, are subject to various federal, state and/or local laws, rules and regulations respecting the environment, including potential discharges into wastewater and air and the generation, handling, storage,

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transportation and disposal of waste and hazardous substances. We generate certain amounts of waste in connection with our laundry operations, including detergent wastewater, wastewater sludge, waste oil and other residues. Some of these wastes are classified as hazardous under these laws. We continue to make significant investments in properly handling and disposing of these wastes to ensure compliance with these regulations.

We discuss certain legal matters in this Annual Report on Form 10-K under Part I, Item 1A. Risk Factors — Compliance with environmental laws and regulations could result in significant costs that adversely affect our operating results, Item 3. Legal Proceedings, Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations under Environmental Matters and Item 8. Financial Statements and Supplementary Data in Note 13 entitled “Commitments and Contingencies” of “Notes to Consolidated Financial Statements.” Any environmental liability relating to such matters could result in significant expenditures that, if aggregated and assumed to occur within a single fiscal year, could be material to our results of operations or financial position. While it is impossible to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits, legal matters, claims and environmental contingencies, based on information currently available and our best assessment of the ultimate amount and timing of environmental-related events, we believe that the cost of these environmental-related matters are not expected to have a material adverse effect on our results of operations of financial position. While we believe the possibility is remote, there is a potential that we may incur additional losses in excess of established reserves due to the imposition of clean-up obligations, the discovery of alleged contamination or other changes.

Employees

Our U.S. operations had approximately 6,200 employees as of July 3, 2010, which includes approximately 3,100 production employees and 3,100 sales, office, route and management personnel. Unions represent approximately 12% of our U.S. employees. Management believes its U.S. employee relations are satisfactory.

Our Canadian operations had approximately 1,300 employees as of July 3, 2010, which includes approximately 650 production employees and 650 sales, office, route and management personnel. Unions represent approximately 65% of our Canadian employees. Management believes its Canadian employee relations are satisfactory.

Foreign and Domestic Operations

Financial information relating to foreign and domestic operations is set forth in Note 14 of our Consolidated Financial Statements included in Item 8 of this Form 10-K.

Intellectual Property

We own a portfolio of registered trademarks, trade names and licenses, and certain U.S. and foreign process and manufacturing patents relating to our business. These proprietary properties, in the aggregate, constitute a valuable asset. We do not believe, however, that our business is dependent upon any single proprietary property or any particular group of proprietary properties.

Seasonality and Working Capital

We do not consider our business to be seasonal to any significant extent or subject to any unusual working capital requirements.

Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports are available free of charge, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. These reports are available on our website at http://www.gkservices.com. Information included on our website is not deemed to be incorporated into this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS

The statements in this section, as well as statements described elsewhere in this Annual Report on Form 10-K, or in other SEC filings, describe risks that could materially and adversely affect our business, financial condition and results of operations and

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the trading price of our securities. These risks are not the only risks that we face. Our business, financial condition and results of operations could also be materially affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations.

In addition, this section sets forth statements which constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar expressions and by the context in which they are used. Such statements are based upon our current expectations and speak only as of the date made. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ from those set forth in or implied by this Annual Report on Form 10-K. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs, lower sales volumes, the performance and costs of integration of acquisitions or assumption of unknown liabilities in connection with acquisitions, fluctuations in costs of materials and labor, costs and possible effects of union organizing activities, loss of key management, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, failure to achieve and maintain effective internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002, the initiation or outcome of litigation or governmental investigation, higher than assumed sourcing or distribution costs of products, the disruption of operations from catastrophic events, disruptions in capital markets, the liquidity of counterparties in financial transactions, changes in federal and state tax laws, economic uncertainties and the reactions of competitors in terms of price and service. We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made except as required by law.

Also note that we provide the following cautionary discussion of risks, uncertainties and assumptions relevant to our businesses. Actual results may differ from certain assumptions we have made causing actual events to vary from expected results. These are factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties.

General economic factors may adversely affect our financial performance.

General economic conditions may adversely affect our financial performance. Continued high levels of unemployment, inflation, tax rates and other changes in tax laws and other economic factors could adversely affect the demand for our products and services. Increases in labor costs, including healthcare and insurance costs, higher material costs for items, such as linens and textiles, higher fuel and other energy costs, higher interest rates, inflation, higher tax rates and other changes in tax laws and other economic factors could increase our costs of rental and direct sales and selling and administrative expenses and could adversely affect our operating results.

Increased competition could adversely affect our financial performance.

We operate in highly competitive industries and compete with national, regional and local providers. Product, design, price, quality, service and convenience to the customer are the primary competitive elements in these industries. If existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower prices, which could be detrimental to our operating results. Our competitors also generally compete with us for acquisition candidates, which can increase the price for acquisitions and reduce the number of available acquisition candidates. In addition, our customers and prospects may decide to perform certain services in-house instead of outsourcing such services. These competitive pressures could adversely affect our sales and operating results.

Risks associated with potential impairment of goodwill and intangible assets.

In fiscal 2009, we recorded a non-cash impairment charge of $107.0 million, which reduced the carrying value of our goodwill to $319.9 million as of June 27, 2009. We continue to monitor relevant circumstances, including customer spending levels, general economic conditions and the market price for our common stock, and the potential impact that such circumstances might have on the valuation of our goodwill. It is possible that changes in such circumstances, or in the numerous variables associated with the judgments, assumptions and estimates made by us in assessing the appropriate valuation of our goodwill, could require us to further reduce our goodwill and record related non-cash impairment charges. If we were required to further

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reduce our goodwill and record related non-cash impairment charges, our financial position and results of operations would be adversely affected.

Risks associated with the suppliers from whom our products are sourced could adversely affect our operating results.

The products we sell are sourced from a variety of domestic and international suppliers. Global sourcing of many of the products we sell is an important factor in our financial performance. All of our suppliers must comply with applicable laws, including, without limitation, labor and environmental laws, and otherwise be certified as meeting our required supplier standards of conduct. Our ability to find qualified suppliers who meet our standards, and to access products in a timely and efficient manner can be a significant challenge, especially with respect to suppliers located and goods sourced outside the United States. Political and economic stability in the countries in which foreign suppliers are located, the financial stability of suppliers, suppliers’ failure to meet our supplier standards, labor problems experienced by our suppliers, the availability of raw materials to suppliers, currency exchange rates, transport availability and cost, inflation and other factors relating to the suppliers and the countries in which they are located are beyond our control. In addition, United States and Canadian foreign trade policies, tariffs and other impositions on imported goods, trade sanctions imposed on certain countries, the limitation on the importation of certain types of goods or of goods containing certain materials from other countries and other factors relating to foreign trade are beyond our control. These and other factors affecting our suppliers and our access to products could adversely affect our operating results.

Failure to comply with the regulations of the U.S. Occupational Safety and Health Administration and other state and local agencies that oversee safety compliance could adversely affect our results of operation.

The Occupational Safety and Health Act of 1970, as amended, or “OSHA”, establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by OSHA and various record keeping, disclosure and procedural requirements. Various OSHA standards apply to our operations. We have incurred, and will continue to incur, capital and operating expenditures and other costs in the ordinary course of our business in complying with OSHA and other state and local laws and regulations. Any failure to comply with these regulations could result in fines by government authorities and payment of damages to private litigants and affect our ability to service our customers and adversely affect our results of operation.

Compliance with environmental laws and regulations could result in significant costs that adversely affect our operating results.

Our operating locations are subject to stringent environmental laws, rules and regulations relating to the protection of the environment and health and safety matters, including those governing the potential discharges of pollutants to the air and water, the management and disposal of hazardous substances and wastes and the clean-up of contaminated sites. The operation of our businesses entails risks under environmental laws and regulations. We could incur significant costs, including, without limitation, clean-up costs, fines, sanctions and claims by regulators or third parties for property damage and personal injury, as a result of violations or liabilities under these laws and regulations. As a result of violations of these laws and regulations, among other things, we could be required to reduce or cease use of certain equipment and/or limit or stop production at certain facilities. These consequences could have a material adverse affect on our results of operations and financial condition and disrupt customer relationships. We are currently involved in a limited number of legal matters and remedial investigations and actions at various locations. While it is impossible to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits, legal matters and environmental contingencies, based on information currently available and our assessment of the ultimate amount and timing of environmental-related events, we believe that the cost of these environmental-related matters are not reasonably likely to have a material adverse effect on our results of operations or financial position. It is possible, however, that our future financial position or results of operations for any particular future period could be materially affected by changes in our assumptions or strategies related to these contingencies, the imposition of clean-up obligations, and the discovery of alleged contamination or changes out of our control. In addition, potentially significant expenditures could be required to comply with environmental laws and regulations, including requirements that may be adopted or imposed in the future.

Under environmental laws, an owner or operator of real estate may be required to pay the costs of removing or remediating hazardous materials located on or emanating from property, whether or not the owner or operator knew of or was responsible for the presence of such hazardous materials. While we regularly engage in environmental due diligence in connection with

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acquisitions, we can give no assurance that locations that have been acquired or leased have been operated in compliance with environmental laws and regulations during prior periods or that future uses or conditions will not make us liable under these laws or expose us to regulator or third-party actions, including tort suits.

Additionally, we must maintain compliance with various permits and licenses issued to us in connection with our operations, or we must apply for and obtain such permits and licenses. Any failure on our part to maintain such compliance or to apply for and receive such permits and licenses could have a material effect on our ability to continue operations at a particular location. At each reporting period, we assess our operations to determine whether the costs of resolution of legal matters or of investigation and remediation of environmental conditions are probable and can be reasonably estimated, as well as the adequacy of our reserves with respect to such costs. At July 3, 2010, our reserves for environmental matters were approximately $3.2 million. We cannot guarantee that our reserves with respect to environmental matters will be sufficient or that the costs of resolution of legal matters or of remediation and investigation will not substantially exceed our reserves as new facts, circumstance or estimates arise.

Volatility in the global economy could adversely affect results.

Global financial markets have experienced disruption in recent years, including, among other things, volatility in security prices, diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. There can be no assurance that there will not be further change, which could lead to challenges in our business and negatively impact our financial results. The continued tightening of credit in financial markets adversely affects the ability of our customers and suppliers to obtain financing for significant purchases and operations and could result in a decrease in orders and spending for our products and services. In addition, changes in the economic environment could adversely impact assumptions we use to value our pension plan assets and obligations which could result in a material adverse impact to our financial results in future periods.

Fluctuations in demand for our products and services may harm our financial results and are difficult to forecast.

Current uncertainty in global economic conditions poses a risk to the overall economy as consumers and businesses may defer purchases in response to tighter credit and negative financial news. This could negatively impact our customers and consequently have a negative impact on our financial performance. If demand for our products and services fluctuates as a result of economic conditions or otherwise, our revenue and operating margin could be negatively impacted. Important factors that could cause demand for our products and services to fluctuate include:

• changes in business and economic conditions, including further downturns in specific industry segments and/or the overall economy;

• changes in consumer confidence caused by changes in market conditions, including changes in the credit market, expectations for inflation, and energy prices;

• competitive pressures, including pricing pressures, from companies that have competing products and services;

• changes in customer needs;

• changes in our customers’ employment levels, which impacts the number of users of our products and services;

• strategic actions taken by our competitors; and

• market acceptance of our products and services.

If our customers’ demand for our products and services decreases, our plant and manufacturing capacity could be underutilized, and we may be required to record an impairment on our long-lived assets, including facilities and equipment, as well as intangible assets, which would increase our expenses. The change in demand for our products and services, and changes in our customers’ needs, could have a variety of negative effects on our competitive position and our financial results, and, in certain cases, may reduce our revenue, increase our costs, lower our gross margin percentage, or require us to recognize impairments of our assets.

Legal proceedings that may adversely affect our financial condition and operating results.

From time to time we are party to various litigation claims and legal proceedings. Certain of these lawsuits or potential future lawsuits, if decided adversely to us or settled by us, may result in a liability that is material to our financial condition and operating results. We discuss these lawsuits and other litigation to which we are party in greater detail within Item 3. Legal Proceedings, Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations under Environmental Matters and Item 8. Financial Statements and Supplementary Data in Note 13 entitled “Commitments and Contingencies” of “Notes to Consolidated Financial Statements.”

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Risks associated with our acquisition strategy could adversely affect our operating results.

Historically, a portion of our growth has come from acquisitions. We continue to evaluate opportunities for acquiring businesses that may supplement our internal growth. However, there can be no assurance that we will be able to identify and purchase suitable operations. In addition, the success of any acquisition depends in part on our ability to integrate the acquired company. The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our management’s attention and our financial and other resources. Although we conduct due diligence investigations prior to each acquisition, there can be no assurance that we will discover all operational deficiencies or material liabilities of an acquired business for which we may be responsible as a successor owner or operator. The failure to successfully integrate these acquired businesses or to discover such liabilities could adversely affect our operating results.

Increases in fuel and energy costs could adversely affect our results of operations and financial condition.

Gasoline, diesel, natural gas and electricity represent a significant cost within our business. The price of these commodities, which are required to run our vehicles and equipment, can be unpredictable and can fluctuate based on events beyond our control, including geopolitical developments, supply and demand for oil and gas, actions by OPEC and other oil and gas producers, war, terrorism and unrest in oil producing countries, regional production patterns, limits on refining capacities, natural disasters and environmental concerns. Increases in these commodities could adversely affect our results of operations and financial condition.

Fluctuations in Canadian, Dominican Republic and Ireland currencies could have an adverse effect on our results of operations and financial condition.

Certain of our foreign revenues and operating expenses are transacted in local currencies. Therefore, our results of operations and certain receivables and payables are subject to foreign exchange rate fluctuations.

Failure to preserve positive labor relationships.

Significant portions of our Canadian labor force are unionized, and a lesser portion of United States employees are unionized. Competitors within our industry have been the target of unionization campaigns. While we believe that our Canadian and U.S. employee relations are satisfactory, we could experience pressure from labor unions similar to those faced by our competitors. If we do encounter pressure from labor unions, any resulting labor unrest could disrupt our business by impairing our ability to produce and deliver our products and services. In addition, significant union representation would require us to negotiate with many of our employees collectively and could adversely affect our results by restricting our ability to maximize the efficiency of our operations.

Inability to attract and retain employees could adversely impact our operations.

Our ability to attract and retain employees is important to our operations. Our ability to expand our operations is in part impacted by our ability to increase our labor force. In the event of a labor shortage, or in the event of a change in prevailing labor and/or immigration laws, we could experience difficulty in delivering our services in a high-quality or timely manner and we could be forced to increase wages in order to attract and retain employees, which would result in higher operating costs.

Loss of our key management or other personnel could adversely impact our business.

Our success is dependent on the skills, experience and efforts of our senior management and other key personnel. If, for any reason, one or more senior executives or key personnel were not to remain active in our company, our results of operations could be adversely affected.

Unexpected events could disrupt our operations and adversely affect our operating results.

Unexpected events, including, without limitation, fires at facilities, natural disasters, such as hurricanes and tornados, public health emergencies, war or terrorist activities, unplanned utility outages, supply disruptions, failure of equipment or systems or changes in laws and/or regulations impacting our business, could adversely affect our operating results. These events could result in disruption of customer service, physical damage or temporary closure of one or more key operating facilities, or the temporary disruption of information systems.

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Failure to achieve and maintain effective internal controls could adversely affect our business and stock price.

Effective internal controls are necessary for us to provide reliable financial reports. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. While we continue to evaluate our internal controls, we cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. If we fail to maintain the adequacy of our internal controls or if we or our independent registered public accounting firm were to discover material weaknesses in our internal controls, as such standards are modified, supplemented or amended, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Failure to achieve and maintain an effective internal control environment could cause us to be unable to produce reliable financial reports or prevent fraud. This may cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our stock price.

Failure to execute our business plan could adversely affect our business and stock price.

We are in the process of executing a new business plan with the goal of improving our financial performance. Successful execution of our business plan is not assured as there are several obstacles to success, including a continued difficult economic environment and a competitive industry. In addition, there can be no assurance that our efforts, if properly executed, will result in our desired outcome of improved financial performance.

Multi-Employer Union Pension plans may have a material adverse affect on our financial performance.

We participate in a number of union sponsored, collectively bargained multi-employer pension plans (“Union Plans”). We are responsible for our proportional share of any unfunded vested benefits related to the Union Plans. The funded status of these various plans has substantially deteriorated in the recent past. In the future, if local union employees vote to decertify their respective union, it could trigger a liability under the associated Union Plan, which could be greater than currently estimated amounts. The liability, if incurred, could have a material adverse impact on our financial performance. We do not have the ability to predict or influence the timing of the votes to decertify a Union. We may miss our projected earnings per share and operating results during any given quarter due to the inherent difficulty in predicting or controlling the events which precipitate a liability.

Cash generated from operations could be affected by a number of risks and uncertainties.

In fiscal 2011, we may actively seek and consider acquisitions of business assets. The consummation of any acquisition could affect our liquidity profile and level of outstanding debt. However, we believe that our earnings and cash flows from operations, existing credit facilities and our ability to obtain additional debt or equity capital, if necessary, will be adequate to finance acquisition opportunities.

Access to the capital markets, including bank financing, to provide sources of liquidity for general corporate purposes, including share repurchases.

Although we believe that we will be able to maintain sufficient access to the capital markets, changes in current market conditions, deterioration in our business performance, or adverse changes in the economy could limit our access to these markets. Although we cannot predict the availability of future funding, we do not believe that the current credit environment will impede our ability to access the capital markets because of our financial position.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We occupy over 160 facilities located in the United States, Canada, the Dominican Republic and Ireland. These facilities include our processing, branch, garment manufacturing, distribution and administrative support locations. We clean and supply rental items from approximately 53 facilities located in 41 cities in the United States, 9 cities in Canada and one city in Ireland. We own approximately 90% of our processing facilities, which average approximately 44,000 square feet in size.

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ITEM 3. LEGAL PROCEEDINGS

We are involved in a variety of legal actions relating to personal injury, employment, environmental and other legal matters arising in the normal course of business, including, without limitation, those described below.

On February 19, 2010, we settled the previously disclosed matter brought against us by the Commissioner of Environmental Protection of the State of Connecticut. The aggregate settlement amount was within previously established reserves.

In August 2008, we became aware that our Des Moines, Iowa facility allegedly violated the facility’s wastewater treatment permit. In addition, we became aware that this facility allegedly did not properly report its wastewater sampling results to the City of Des Moines. We promptly brought this matter to the attention of the City of Des Moines Attorney’s office and the City of Des Moines water reclamation authority. We also immediately launched our own investigation. As part of our investigation, we learned, among other things, that the City of Des Moines’ water reclamation authority was aware of the situation and had referred this matter to the U.S. Environmental Protection Agency (“U.S. EPA”). The U.S. EPA has also referred this matter to the U.S. Attorneys’ office in Des Moines, Iowa. We have reached settlement with the Des Moines Metropolitan Wastewater Reclamation Authority and resolved this matter with the city. We are in the midst of resolving this matter with the U.S. EPA and the U.S. Attorney.

On July 24, 2008, the U.S. EPA inspected our facility in South Chicago, Illinois. As part of its inspection, the U.S. EPA identified certain alleged deficiencies with respect to the operations at this facility, including potential recordkeeping violations and opportunities to improve the overall environmental compliance and permitting of the facility. The U.S. EPA provided written record of its inspection findings to us and identified alleged noncompliance with certain provisions of the Resource Conservation and Recovery Act. The U.S. EPA has subsequently visited this facility. We have responded to the U.S. EPA and will continue to work cooperatively with the U.S. EPA to resolve this matter.

In the summer and fall of 2008, the U.S. EPA inspected our facility in Manchester, New Hampshire. As part of its inspection, the U.S. EPA identified certain alleged deficiencies with respect to the operations at this facility, including potential recordkeeping violations and opportunities to improve the facility’s overall environmental compliance and permitting. The U.S. EPA requested additional information regarding our Manchester and Portsmouth, New Hampshire facilities to evaluate compliance with the Clean Air Act and applicable state and federal regulations, and the U.S. EPA issued a testing order at the Manchester facility. We have completed the requested testing and submitted a test report to the U.S. EPA and the New Hampshire Department of Environmental Services (“NHDES”). Subsequently, in September 2009, the U.S. EPA issued a Notice of Violation alleging noncompliance with state and federal laws concerning air emissions and permitting. We will continue to work cooperatively with the U.S. EPA to resolve this matter.

While we cannot predict the outcome of these matters with certainty, we currently do not expect any of these matters to have a material adverse effect on our results of operations or financial position. However, while we believe the possibility is remote, there is the potential that we may incur additional losses in excess of established reserves, and these losses could be material.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our Class A Common Stock is quoted on the Global Select Market of The NASDAQ Stock Market LLC under the symbol “GKSR.” The following table sets forth the high and low reported sales prices for the Class A Common Stock as quoted on the Global Select Market of The NASDAQ Stock Market LLC, for the periods indicated.

	High		Low
Fiscal 2010
1st Quarter	$	25.91	$	19.95
2nd Quarter		26.55		19.97
3rd Quarter		28.33		23.05
4th Quarter		28.83		20.09
Fiscal 2009
1st Quarter	$	38.15	$	30.08
2nd Quarter		35.45		18.73
3rd Quarter		21.00		15.32
4th Quarter		27.53		18.29

As of August 20, 2010, we had 873 registered holders of record of our common stock.

We paid dividends of $5.6 million in fiscal 2010, $5.2 million in fiscal 2009 and $4.0 million in fiscal 2008. Dividends per share were $0.30, $0.28 and $0.20 in fiscal years 2010, 2009 and 2008, respectively. We anticipate dividends in fiscal year 2011 to increase from $0.30 to $0.38 per share, which will result in approximately $7.1 million of dividends in fiscal year 2011. Our debt agreements contain restrictive covenants, which, under specific circumstances, could limit the payment of cash dividends we declare during any fiscal year.

The following table sets forth certain information as of July 3, 2010 with respect to equity compensation plans under which securities are authorized for issuance:

					Number of
					Securities
					Remaining Available
	Number of				for Future Issuance
	Securities to be		Weighted-Average		Under Equity
	Issued Upon Exercise		Exercise Price of		Compensation Plans
	of Outstanding		Outstanding		(Excluding
	Options, Warrants		Options, Warrants		Securities
	and Rights		and Rights		Reflected in Column
Plan Category(1)	(A)		(B)		(A))
Equity compensation plans approved by security holders:
2006 Equity Incentive Plan (2)		811,735	$	33.40		541,196
Employee Plans (3)		628,842		34.94		—
1996 Directors’ Stock Option Plan		40,500		35.79		—
Total:		1,481,077	$	34.13		541,196
Equity compensation plans not approved by stockholders:
None		—		—		—
Total		1,481,077	$	34.13		541,196

(1)	See Note 10 to our audited financial statements included in the accompanying financial statements.
(2)	Approved at the November 16, 2006 shareholder meeting.
(3)	Includes our 1989 Stock Option and Compensation Plan and 1998 Stock Option and Compensation Plan.

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ISSUER PURCHASE OF EQUITY SECURITIES

In May 2008, we announced the authorization to expand our share repurchase program from $100.0 million to $175.0 million, which increases the share repurchase program previously approved by our Board of Directors in May 2007. Under the program we did not repurchase any shares in fiscal 2010. In fiscal 2009, we repurchased 650,387 shares for $16.1 million. At the end of fiscal 2010, we had approximately $57.9 million remaining under this authorization. Our debt agreements contain restrictive covenants, which, under certain circumstances, could limit the amount of share repurchases.

STOCKHOLDER RETURN PERFORMANCE GRAPH

The following graph shows a five-year comparison of the cumulative total return on $100 invested in our Common Stock, the Standard and Poor’s (“S&P”) 500 Stock Index and a nationally recognized group of companies in the uniform services industry (the “Peer Index”). The companies included in the Old Peer Index are Angelica Corporation, Cintas Corporation, and UniFirst Corporation. The companies included in the New Peer Index are Cintas Corporation and UniFirst Corporation, which the company believes is the most appropriate comparison.

The graph illustrates the cumulative values at the end of each succeeding fiscal year resulting from the change in the stock price, assuming a dividend reinvestment.

Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright ^© 1980-2010.
Index Data: Copyright ^© Standard and Poor’s, Inc. Used with permission. All rights reserved.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain selected financial data. All amounts are in millions, except per share data.

	2010		2009			2008		2007		2006
Revenues	$	833.6	$	936.0		$	1,002.4	$	929.5	$	880.8
Net Income/(Loss)		28.6		(72.5	)		46.1		43.2		41.9
Per Share Data:
Basic earnings per share		1.56		(3.94	)		2.29		2.03		1.98
Diluted earnings per share		1.56		(3.94	)		2.27		2.02		1.97
Dividends per share		0.30		0.28			0.20		0.16		0.07
Total Assets		813.9		857.3			1,053.2		991.8		951.1
Long-Term Debt		160.4		224.8			280.4		149.0		195.4
Stockholders’ Equity		466.9		437.4			557.5		592.0		547.4

We utilize a 52-53 week fiscal year ending on the Saturday nearest June 30. Fiscal year 2010 was a 53 week year. Fiscal years 2006 through 2009 were 52 week years. The net loss in fiscal year 2009 is the result a non-cash impairment primarily related to goodwill which is fully discussed in Note 3 to our audited financial statements included in the accompanying financial statements.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and related notes thereto which are included herein. We utilize a 52-53 week fiscal year ending on the Saturday nearest June 30. Fiscal year 2010 was a 53 week year. Fiscal year 2009 and 2008 were 52 week years.

Overview

G&K Services, Inc., founded in 1902 and headquartered in Minnetonka, Minnesota, is a market leader in providing branded work apparel and facility services programs that enhance image and safety in the workplace. We serve a wide variety of North American industrial, service and high-technology companies providing them with work apparel and facility services products such as floor mats, dust mops, wiping towels, restroom supplies and selected linen items. We believe that the existing North American rental market is approximately $7.0 billion, while the existing portion of the direct sale market targeted by us is approximately $5.0 billion.

We have participated in the industry consolidation from family owned and small local providers to several large providers. Our acquisition strategy is focused on acquisitions that expand our geographic presence and/or expand our local market share and further leverage our existing production facilities.

Critical Accounting Policies

The discussion of the financial condition and results of operations are based upon the Consolidated Financial Statements, which have been prepared in conformity with United States generally accepted accounting principles. As such, management is required to make certain estimates, judgments and assumptions that are believed to be reasonable based on the information available. These estimates and assumptions affect the reported amount of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, the most important and pervasive accounting policies used and areas most sensitive to material changes from external factors. See Note 1 to the Consolidated Financial Statements for additional discussion of the application of these and other accounting policies.

Revenue Recognition and Allowance for Doubtful Accounts

Our rental business is largely based on written service agreements whereby we agree to collect, launder and deliver uniforms and other related products. The service agreements generally provide for weekly billing upon completion of the laundering process and delivery to the customer. Accordingly, we recognize revenue from rental operations in the period in which the

15

services are provided. Revenue from rental operations also includes billings to customers for lost or damaged uniforms and replacement fees for non-personalized merchandise that is lost or damaged. Direct sale revenue is recognized in the period in which the product is shipped.

We changed our business practices regarding the replacement of certain in-service towel and linen inventory and accordingly, during the fourth quarter of fiscal year 2010, we modified our revenue recognition policy related to the associated replacement fees. This revenue, which has historically been deferred and recognized over the estimated useful life of the associated in-service inventory, is now recognized upon billing. The effect of this change was to increase revenue and income from operations by $6.7 million, net income by $4.2 million and basic and diluted earnings per common share by $0.23 in fiscal year 2010.

Estimates are used in determining the collectability of accounts receivable. Management analyzes specific accounts receivable and historical bad debt experience, customer credit worthiness, current economic trends and the age of outstanding balances when evaluating the adequacy of the allowance for doubtful accounts. Significant management judgments and estimates are used in connection with establishing the allowance in any accounting period.

Inventories

Inventories consist of new goods and rental merchandise in service. We estimate our reserves for inventory obsolescence by periodically examining our inventory to determine if there are indicators that carrying values of the inventories exceed the net realizable value. Experience has shown that significant indicators that could require the need for additional inventory write-downs include the age of the inventory, anticipated demand for our products, historical inventory usage, revenue trends and current economic conditions. We believe that adequate reserves for inventory obsolescence have been made in the Consolidated Financial Statements, however, in the future, product lines and customer requirements may change, which could result in additional inventory write-downs. New goods are stated at lower of first-in, first-out (FIFO) cost or market, net of any reserve for obsolete or excess inventory. Merchandise placed in service to support rental operations is amortized into cost of rental operations over the estimated useful lives of the underlying inventory items, primarily on a straight-line basis, which results in a matching of the cost of the merchandise with the weekly rental revenue generated by the merchandise. Estimated lives of rental merchandise in service range from six months to three years. In establishing estimated lives for merchandise in service, management considers historical experience and the intended use of the merchandise.

We review the estimated useful lives of our in-service inventory assets on a periodic basis. During the fourth quarter of 2010, we completed an analysis of certain in-service inventory assets which resulted in the estimated useful lives for these assets being modified to better reflect the estimated periods in which the assets will remain in service. The effect of the change in estimate in fiscal year 2010 was not material.

Environmental Costs

We accrue various environmental related costs, which consist primarily of estimated cleanup costs, fines and penalties, when it is probable that we have incurred a liability and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, we accrue the minimum amount. This accrued amount reflects our assumptions regarding the nature of the remedy, and the outcome of discussions with regulatory agencies. Changes in the estimates on which the accruals are based, including unanticipated government enforcement actions, or changes in environmental regulations could result in higher or lower costs.

Accordingly, as investigations and other actions proceed, it is likely that adjustments in our accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on our results of operations or cash flows in a given period. While we cannot predict the ultimate outcome of these environmental matters, currently, none of these actions are expected to have a material adverse effect on our results of operations or financial position. While we believe the possibility is remote, there is the potential that we may incur additional losses in excess of established reserves and these losses could be material.

Accruals for environmental liabilities are included in the “Other” accrued expenses line item in the Consolidated Balance Sheets. Environmental costs are capitalized if they extend the life of the related property, increase its capacity, and/or mitigate or prevent future contamination. The cost of operating and maintaining environmental control equipment is charged to expense.

For additional information see Note 13, “Commitments and Contingencies”.

Impairments of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with applicable accounting standards. Recoverability of assets in

16

accordance with these standards compares the projected undiscounted future cash flows from use and disposition of assets to the carrying amounts of those assets. When the sum of projected undiscounted cash flows is less than the carrying amount, impairment losses are recognized. In determining such impairment losses, discounted cash flows are utilized to determine the fair value of the assets being evaluated. During the third quarter of fiscal 2009, we recorded an impairment loss of $19.7 million related to certain long-lived assets and included that loss in the “Goodwill and other impairment charges” line item in the Consolidated Statements of Operations. We did not record any impairment losses on long-lived assets in the Consolidated Financial Statements in fiscal 2010 or 2008.

For additional information see Note 3, “Goodwill and Other Impairment Charges”.

Goodwill and Intangible Assets

The carrying value of goodwill is reviewed annually in our fourth quarter for possible impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill may not be recoverable. Goodwill has been assigned to reporting units for purposes of impairment testing. Our reporting units are U.S. Rental operations, Canadian Rental operations and Direct Sales operations. The associated goodwill balances were $259.7 million, $63.4 million and $0, respectively, at July 3, 2010. There have been no changes to our reporting units or in the allocation of goodwill to each respective reporting unit in fiscal year 2008, 2009 or 2010.

The goodwill impairment test involves a two-step process. First, we assess whether the fair value of the reporting unit exceeds the carrying amount of the unit including goodwill. Our evaluation generally considers changes in the operating environment, competitive position, market trends, operating performance, quoted market prices for our equity securities, fair value models and research prepared by independent analysts, and if necessary, discounted cash flows. If the carrying amount of a reporting unit exceeds its fair value, we would perform a second test, and if necessary, reduce the reporting unit’s goodwill to its implied fair value. The second step requires us to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. There were no impairments of goodwill in fiscal 2010 or 2008.

During the second quarter of fiscal year 2009, there was a significant deterioration in general economic conditions and in the market value of our stock. The resulting decline in our market capitalization prompted us to conduct a goodwill analysis to determine if an impairment of goodwill existed as of December 27, 2008. Our analysis evaluated the estimated fair value of each reporting unit relative to the net book value. We prepared a discounted cash flow model to estimate fair value, which validated the reasonableness of the estimated market value plus a control premium. As a result of this analysis, no impairment was recorded as of December 27, 2008.

The significant job losses in the North American economy during the third quarter of fiscal year 2009 and the resultant decline in the employment levels of our customers and our associated financial results prompted us to update our assessment of goodwill and adjust our cash flow assumptions to reflect an extended economic downturn and more severe job losses than were previously considered in our interim goodwill impairment analysis at the end of the fiscal second quarter. The adjusted assumptions assumed that employment levels would continue to decline into fiscal 2010 and begin to moderately improve in fiscal 2011, returning to more normalized levels in fiscal 2012 and beyond. This revision of assumptions drove a decrease in the calculated fair values of the U.S. Rental and Direct Sales reporting units, which resulted in our goodwill impairment charge in the third quarter of fiscal year 2009. After completing the assessment, we determined that the carrying value of our U.S. Rental and Direct Sales reporting units exceeded the fair value and as described in Note 3, an impairment charge of $107.0 million was required. Please see the discussion of our sensitivity analysis in Note 3 for an understanding of the impact that each significant assumption has on the calculated fair values of each reporting unit.

Determining a reporting unit’s discounted cash flows requires significant management judgment with respect to sales, gross margin and selling, general and administrative (SG&A) expense rates, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures were based on our annual business plan and other forecasted results. Discount rates reflected a market-based weighted average cost of capital taking into consideration the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimated fair value of reporting units was based on the best information available as of the date of the assessment. The use of different assumptions would have increased or decreased estimated discounted future operating cash flows and could have increased or decreased any impairment charge. As identified in Note 3, the terminal growth rate we used in our discounted cash flow model was 2.5%-3.0%. While we do not believe historical operating results are necessarily indicative of future operating results, we believe our assumptions are reasonable when compared to our historical 10 year compound annual growth rate in operating cash flow of 3.3%.

17

We performed our annual goodwill impairment test as of June 27, 2009 and determined that no further impairment of goodwill occurred in fiscal year 2009.

Future events could cause management to conclude that impairment indicators exist and that goodwill and other intangibles associated with acquired businesses are impaired. Any resulting impairment loss could have a material impact on our financial condition and results of operations.

For additional information see Note 3, “Goodwill and Other Impairment Charges”.

Insurance

We carry large deductible insurance policies for certain obligations related to health, workers’ compensation, auto and general liability programs. These deductibles range from $0.4 million to $0.8 million. Estimates are used in determining the potential liability associated with reported claims and for losses that have occurred, but have not been reported. Management estimates generally consider historical claims experience, escalating medical cost trends, expected timing of claim payments and actuarial analyses provided by third parties. Changes in the cost of medical care, our ability to settle claims and the present value estimates and judgments used by management could have a material impact on the amount and timing of expense for any period.

Income Taxes

Provisions for federal, state, and foreign income taxes are calculated based on reported pre-tax earnings and current tax law. Significant judgment is required in determining income tax provisions and evaluating tax positions. We periodically assess our liabilities and contingencies for all periods that are currently open to examination or have not been effectively settled based on the most current available information. Where it is not more likely than not that our tax position will be sustained, we record our best estimate of the resulting tax liability and any applicable interest and penalties in the Consolidated Financial Statements.

Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory rates in effect for the year in which the differences are expected to reverse. We present the tax effects of these deferred tax assets and liabilities separately for each major tax jurisdiction. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that the changes are enacted. We record valuation allowances to reduce deferred tax assets when it is more likely than not that some portion of the asset may not be realized. We evaluate our deferred tax assets and liabilities on a periodic basis. We believe that we have adequately provided for our future income tax obligations based upon current facts, circumstances and tax law.

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Results of Operations

The percentage relationships to revenues of certain income and expense items for the three fiscal years ended July 3, 2010, June 27, 2009 and June 28, 2008, and the percentage changes in these income and expense items between years are presented in the following table:

	Percentage of Revenues									Percentage Change
	Years Ended									Between Years
	Fiscal 2010			Fiscal 2009			Fiscal 2008			FY 2010 vs. FY 2009			FY 2009 vs. FY 2008
Revenues:
Rental operations		93.1	%		92.0	%		92.4	%		(9.9	)%		(7.0	)%
Direct sales		6.9			8.0			7.6			(23.4	)		(2.1	)
Total revenues		100.0			100.0			100.0			(10.9	)		(6.6	)
Operating expenses:
Cost of rental operations		69.5			70.1			67.6			(10.6	)		(3.6	)
Cost of direct sales		74.0			74.2			72.6			(23.5	)		0.1
Total cost of sales		69.9			70.4			68.0			(11.7	)		(3.3	)
Selling and administrative		23.0			24.2			22.9			(15.2	)		(1.7	)
Goodwill and other impairment charges		—			13.5			—			(100.0	)		—
Income/(Loss) from operations		7.2			(8.1	)		9.0			178.4			(184.0	)
Interest expense		1.7			1.5			1.6			(1.1	)		(10.0	)
Income/(Loss) before income taxes		5.5			(9.6	)		7.5			150.8			(220.1	)
Provision/(Benefit) for income taxes		2.1			(1.9	)		2.9			197.6			(160.8	)
Net income/(loss)		3.4	%		(7.7	)%		4.6	%		139.5	%		(257.3	)%

Fiscal 2010 Compared to Fiscal 2009

Fiscal Years. We operate on a fiscal year ending on the Saturday closest to June 30. As a result, we will periodically have a fiscal year that consists of 53 weeks. Fiscal year 2010 had 53 weeks and fiscal year 2009 had 52 weeks. We estimate that the extra week of operations generated incremental revenue of approximately $15.0 million and incremental earnings of approximately $0.03 per share in fiscal year 2010.

Revenues. Total revenues in fiscal 2010 declined 10.9% to $833.6 million from $936.0 million in fiscal 2009.

Rental revenue decreased $84.8 million in fiscal 2010, a 9.9% decrease from fiscal 2009. The organic rental growth rate was negative 11.5%, a decrease from negative 5.25% in fiscal 2009. Our organic rental growth was negatively impacted by significantly reduced customer employment levels and lower new account sales due to adverse economic conditions. Organic rental revenue is calculated using rental revenue, adjusted to exclude foreign currency exchange rate changes, divestitures, acquisitions and the impact of the 53^rd week compared to prior-period results. We believe that the organic rental revenue reflects the growth of our existing rental business and is, therefore, useful in analyzing our financial condition and results of operations. In addition, rental revenue was positively impacted by $12.4 million, or 1.4%, compared to the prior year due to the favorable impact of foreign currency translation rates, $14.0 million due to the extra week and $6.7 million due to the modification of our revenue recognition policy related to certain towel and linen replacement fees. These positive impacts were offset by the divestiture of several operations that resulted in a decrease in rental revenue of approximately $22.3 million or 2.6%.

Direct sale revenue was $57.5 million in fiscal 2010, a 23.4% decrease from $75.0 million in fiscal 2009. The organic direct sale growth rate was approximately negative 28.25% in fiscal year 2010 compared to negative 1.5% in fiscal year 2009. The

19

decrease in direct sale revenue was due to the loss of a significant customer at the end of fiscal year 2009 and the continued difficult economic environment. Also, fiscal 2009 included increased revenues from the rollout of an apparel program to a major airline industry customer. These decreases were partially offset by several large new customer accounts and the impact of the extra week.

Cost of Rental. Cost of rental operations which includes merchandise, production and delivery expenses decreased 10.6% to $539.7 million in fiscal 2010 from $603.5 million in fiscal 2009. As a percentage of rental revenue, our gross margin from rental sales increased to 30.5% in fiscal 2010 from 29.9% in the prior fiscal year. During fiscal 2010, we experienced significant margin pressure resulting from our 11.5% negative organic rental growth, the impact of higher vehicle leasing costs and the impact of fixed costs absorbed over a lower revenue base. These decreases in rental gross margin were offset by a decrease in our merchandise expense related to more effectively using and sharing garments, lower energy prices and cost control efforts.

Cost of Direct Sales. Cost of direct sales decreased to $42.6 million in fiscal 2010 from $55.7 million in fiscal 2009. Gross margin from direct sales increased in fiscal 2010 to 26.0% from 25.8% in fiscal 2009. The slight increase in gross margin is primarily due to the change in product mix to include an increased percentage of higher margin items in fiscal 2010 compared to fiscal 2009.

Selling and Administrative. Selling and administrative expenses decreased 15.2% to $191.7 million in fiscal 2010 from $226.1 million in fiscal 2009. As a percentage of total revenues, selling and administrative expenses decreased to 23.0% in fiscal 2010 from 24.2% in fiscal 2009. The decrease is primarily the result of cost reduction activities, net gains associated with the sale, divestiture and write-down of certain business assets in fiscal 2010 of $4.0 million, environmental and severance expense in the prior year of $9.6 million that did not reoccur in the current year and lower selling expenses as a result of lower new account sales. These decreases were partially offset by the impact of fixed costs absorbed over a lower revenue base.

Goodwill and Other Impairment Charges. As discussed in Note 3 to the Consolidated Financial Statements, during fiscal year 2009, we conducted an impairment analysis for our goodwill and our intangible assets and long-lived assets. This analysis concluded that certain of our goodwill, intangible assets, and long-lived assets carrying values exceeded their related fair values by $126.7 million. This non-cash charge consisted of $107.0 million related to goodwill, $16.2 million related to long-lived assets and $3.5 million related to certain acquired customer lists.

Interest Expense. Interest expense was $13.8 million in fiscal 2010 as compared to $14.0 million in fiscal 2009. The decreased interest expense associated with the reduction in overall debt balances was partially offset by higher effective interest rates and increased debt closing costs amortization related to the new revolving credit agreement.

Provision for Income Taxes. Our effective tax rate for fiscal 2010 increased to 37.5% from 19.5% in fiscal 2009. The current year tax rate is lower than our statutory rate due to the adjustment of deferred tax liabilities related to Canada, the enactment of a provincial tax rate reduction and the favorable tax treatment on the sale of certain assets, offset by the reduction of a deferred tax asset associated with equity based compensation. The prior year tax rate was significantly lower than our statutory rate primarily due to the impact of nondeductible goodwill impairment charges, nondeductible environmental charges, and the write-off of deferred tax assets associated with certain expiring stock options. Both periods included adjustments resulting from the final calculation and filing of our annual income tax returns and the decrease in tax reserves for uncertain tax positions due to the expiration of certain tax statutes.

Fiscal 2009 Compared to Fiscal 2008

Fiscal Years. We operate on a fiscal year ending on the Saturday closest to June 30. As a result, we will periodically have a fiscal year with 53 weeks of results. Fiscal years 2009 and 2008 both had 52 weeks.

Revenues. Total revenues in fiscal 2009 declined 6.6% to $936.0 million from $1,002.4 million in fiscal 2008.

Rental revenue decreased $64.8 million in fiscal 2009, a 7.0% decrease from fiscal 2008. The organic industrial rental growth rate was approximately negative 5.25%, a decrease from approximately 3.0% in fiscal 2008. Our organic rental growth was negatively impacted by economic-driven customer attrition, reduced customer employment levels, lower usage levels and lower new account sales due to difficult economic conditions. Organic rental revenue is calculated using rental revenue, adjusted for foreign currency exchange rate changes and revenue from newly acquired businesses compared to prior-period results. We believe that the organic rental revenue reflects the growth of our existing rental business and is, therefore, useful in analyzing our financial condition and results of operations. In absolute dollars, rental revenue was negatively impacted by

20

approximately $20.8 million, or 2.3%, compared to the prior year rental revenue due to the unfavorable impact of foreign currency translation rates with Canada.

Direct sale revenue was $75.0 million in fiscal 2009, a 2.1% decrease from $76.6 million in fiscal 2008. The organic direct sale growth rate was approximately negative 1.5% in fiscal year 2009 compared to negative 9.5% in fiscal year 2008. The decrease in direct sale revenue was due to the non-renewal of a contract with a major customer during fiscal 2009 and by an economic driven decrease in demand from other customers, which was substantially offset by increased revenues from the rollout of an apparel program to a major airline industry customer.

Cost of Rental. Cost of rental operations, which includes merchandise, production and delivery expenses decreased 3.6% to $603.5 million in fiscal 2009 from $626.3 million in fiscal 2008. As a percentage of rental revenue, our gross margin from rental sales decreased to 29.9% in fiscal 2009 from 32.4% in the prior year. The decrease in rental gross margins resulted from the effect of fixed cost absorption on a lower sales volume, additional costs in fiscal 2009 associated with a recent change in compensation law of $3.3 million, a charge of $1.4 million associated with expense reduction actions and increased healthcare costs.

Cost of Direct Sales. Cost of direct sales increased to $55.7 million in fiscal 2009 from $55.6 million in fiscal 2008. Gross margin from direct sales decreased in fiscal 2009 to 25.8% from 27.4% in fiscal 2008. The decrease in gross margin is primarily due to the impact of fixed cost absorption associated with lower direct sales volume.

Selling and Administrative. Selling and administrative expenses decreased 1.7% to $226.1 million in fiscal 2009 from $230.0 million in fiscal 2008. As a percentage of total revenues, selling and administrative expenses increased to 24.2% in fiscal 2009 from 22.9% in fiscal 2008. The increase is primarily the result of approximately $4.6 million of expense associated with certain environmental reserves for fines, penalties and related expenses; approximately $5.0 million related to severance, including $2.9 million of severance costs contractually obligated to the former chief executive officer; and increased bad debt expense. These increases were partially offset by cost reduction efforts and lower incentive based compensation expense. In addition, we have maintained a consistent number of sales people, which has resulted in an increase in selling expense as a percentage of revenue due to the declining revenue base.

Goodwill and Other Impairment Charges. As discussed in Note 3 to the Consolidated Financial Statements, during fiscal year 2009, we conducted an impairment analysis for our goodwill and our intangible assets and long-lived assets. This analysis concluded that certain of our goodwill, intangible assets and long-lived assets carrying values exceeded their related fair values by $126.7 million. This non-cash charge consisted of $107.0 million related to goodwill, $16.2 million related to long-lived assets and $3.5 million related to certain acquired customer lists.

Interest Expense. Interest expense was $14.0 million in fiscal 2009 as compared to $15.5 million in fiscal 2008. The decrease was due primarily to significantly lower average debt balances and lower average interest rates.

Provision for Income Taxes. Our effective tax rate for fiscal 2009 decreased to 19.5% from 38.5% in fiscal 2008. This decrease is due to the nondeductible goodwill impairment charges, the result of lower book income, weakening of the Canadian dollar, and a decrease in tax reserve additions in the current year.

Liquidity, Capital Resources and Financial Condition

Financial Condition. We believe our financial condition is strong. In assessing our financial condition, we consider factors such as working capital, cash flows provided by operations, capital expenditures, and debt service obligations. We continue to fund our operations through a combination of cash flow from operations and debt financing. We believe we have sufficient access to capital markets to fund our operations.

Our primary sources of cash are net cash flows from operations and borrowings under our debt arrangements. Primary uses of cash are payments on indebtedness, capital expenditures, acquisitions, and general corporate purposes.

Working capital at July 3, 2010 was $137.1 million, a $1.3 million increase from $135.8 million at June 27, 2009.

Operating Activities. Net cash provided by operating activities was $72.7 million in fiscal 2010, $103.2 million in fiscal 2009 and $103.1 million in fiscal 2008. Cash provided by operations in fiscal 2010 decreased primarily due to lower net income, when the prior year impairment charge is excluded, and a decreased benefit from accounts receivable collections. Cash provided by operations increased slightly in fiscal year 2009, compared to fiscal year 2008 primarily as a result of strong cash

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collections on accounts receivable and a focus on inventory management. These improvements were mostly offset by lower net income.

Investing Activities. Net cash provided by investing activities was $4.9 million in fiscal 2010. Net cash used for investing activities was $23.3 million in fiscal 2009 and $94.1 million in fiscal 2008. In fiscal 2010, we disposed of certain business assets for $21.6 million, which was partially offset by capital expenditures of $16.7 million. In fiscal 2009, cash was used largely for acquisition of property, plant and equipment. In fiscal 2008, cash was largely used for acquisition of business assets and acquisition of property, plant and equipment.

Financing Activities. Financing activities used cash of $81.8 million in fiscal 2010, $78.3 million in fiscal 2009 and $19.4 million in fiscal 2008. Cash used for financing activities in fiscal 2010 was used primarily for repayment of debt. Cash used for financing activities in fiscal 2009 was used primarily for the repayment of debt and repurchases of our common stock. Cash used in fiscal 2008 was primarily the result of cash expended for our common stock share repurchase program, partially offset by net borrowings under our credit facilities. We paid dividends of $5.6 million in fiscal 2010, $5.2 million in fiscal 2009 and $4.0 million in fiscal 2008. Dividends per share were $0.30, $0.28, and $0.20 in fiscal years 2010, 2009 and 2008, respectively. We anticipate dividends in fiscal year 2011 to increase from $0.30 to $0.38 per share, which will result in an estimated total dividend of $7.1 million in fiscal year 2011.

Capital Structure. Total debt was $161.4 million at July 3, 2010, a decrease of $71.1 million from the prior year balance of $232.5 million. This decrease was primarily due to the decision to use our strong free cash flow to reduce debt obligations during fiscal year 2010. The ratio of debt to capitalization (total debt divided by the sum of the stockholder’s equity plus total debt) was 25.7% at fiscal year end 2010 a significant decrease from 34.7% at fiscal year end 2009.

We believe that we will be able to fund all of the currently anticipated cash requirements for fiscal 2011, including scheduled debt repayments, new investments in the business, share repurchases, dividend payments, and possible business acquisitions, from operating cash flow and our revolving credit facility.

On July 1, 2009, we completed a new $300.0 million, three-year unsecured revolving credit facility with a syndicate of banks, which expires on July 1, 2012. This facility replaced our $325.0 million unsecured revolving credit facility, which was scheduled to mature in August 2010. Borrowings in U.S. dollars under the new credit facility will, at our election, bear interest at (a) the adjusted London Interbank Offered Rate (“LIBOR”) for specified interest periods plus a margin, which can range from 2.25% to 3.25%, determined with reference to our consolidated leverage ratio or (b) a floating rate equal to the greatest of (i) JPMorgan’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBOR for a one month interest period plus 1.00%, plus, in each case, a margin determined with reference to our consolidated leverage ratio. Swingline loans will, at our election, bear interest at (i) the rate described in clause (b) above or (ii) a rate to be agreed upon by us and JPMorgan. Borrowings in Canadian dollars under the credit facility will bear interest at the greater of (a) the Canadian Prime Rate and (b) the Adjusted LIBOR for a one month interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1.00%.

As of July 3, 2010, borrowings outstanding under the revolving credit facility were $64.5 million. The unused portion of the revolver may be used for general corporate purposes, acquisitions, share repurchases, working capital needs and to provide up to $50.0 million in letters of credit. As of July 3, 2010, letters of credit outstanding against the revolver totaled $23.6 million and primarily relate to our property and casualty insurance programs. No amounts have been drawn upon these letters of credit. Availability of credit under this new facility requires that we maintain compliance with certain covenants. In addition, there are certain restricted payment limitations on dividends or other distributions, including share repurchases. The covenants under this agreement are the most restrictive when compared to our other credit facilities. The following table illustrates compliance with regard to the material covenants required by the terms of this facility as of July 3, 2010:

	Required Covenant Amount		Actual Covenant Amount
Maximum Leverage Ratio (Debt/EBITDA)		3.50		1.77
Minimum Interest Coverage Ratio (EBITDA/Interest Expense)		3.00		7.53
Minimum Net Worth	$	315.9	$	466.9

Our maximum leverage ratio and minimum interest coverage ratio covenants are calculated by adding back non-cash charges, as defined in our debt agreement.

Advances outstanding as of July 3, 2010 bear interest at a weighted average all-in rate of 3.03% (LIBOR plus 2.50%) for the Eurocurrency rate loans and an all-in rate of 3.25% (Lender Prime Rate) for overnight Swingline Base Rate loans. We also

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pay a fee on the unused daily balance of the revolving credit facility based on a leverage ratio calculated on a quarterly basis. At July 3, 2010 this fee was 0.3% of the unused daily balance.

We have $75.0 million of variable rate unsecured private placement notes. The notes bear interest at 0.60% over LIBOR and are scheduled to mature on June 30, 2015. The notes do not require principal payments until maturity. Interest payments are reset and paid on a quarterly basis. As of July 3, 2010, the outstanding balance of the notes was $75.0 million at an all-in rate of 1.13% (LIBOR plus 0.60%).

We maintain an accounts receivable securitization facility, whereby the lender will make loans to us on a revolving basis. The original amount of credit available to us under this facility was $50.0 million. Effective July 1, 2010, we voluntarily reduced the loan agreement’s facility limit to $40.0 million. All of the terms of the facility agreement remain unchanged. The amount of funds available under the loan agreement as of July 3, 2010 was $37.9 million, which was the amount of eligible receivables as of the prior month end less a calculated reserve requirement. The agreement will expire on September 26, 2012.

We are required to pay interest on outstanding loan balances at an annual rate of one month LIBOR plus a margin or, if the lender is funding the loan through the issuance of commercial paper to third parties, at an annual rate equal to the commercial paper rate plus a margin. In connection with the loan agreement, we granted a first priority security interest in certain of our U.S.-based receivables. As of July 3, 2010, there was $20.0 million outstanding under this loan agreement at an all-in interest rate of 1.49% (commercial paper plus 1.10%). We are also required to pay a fee on the unused balance of the facility.

We had $50.0 million, 8.4% unsecured fixed rate private placement notes with certain institutional investors. The 10-year notes had a nine-year average life with a final maturity on July 20, 2010. Beginning on July 20, 2004, and annually thereafter, we repaid $7.1 million of the principal amount at par. On January 20, 2010, we repaid these notes prior to their original maturity date and incurred additional costs associated with the prepayment of approximately $0.3 million which is included in the “Selling and administrative” line of the Consolidated Statements of Operations for fiscal year 2010.

See Note 7 of the Consolidated Financial Statements for details of our interest rate swap and hedging activities related to our outstanding debt.

The credit facilities, loan agreements, fixed rate notes and variable rate notes contain various restrictive covenants that among other matters require us to maintain a minimum stockholders’ equity and a maximum leverage ratio. These debt arrangements also contain customary representations, warranties, covenants and indemnifications. At July 3, 2010, we were in compliance with all debt covenants and only a material adverse change in our financial performance and condition could result in a potential event of default. In the unlikely situation that an event of default would be imminent, we believe that we would be able to successfully negotiate amended covenants or obtain waivers; however, certain financial concessions might be required. Our results of operations and financial condition could be adversely affected if amended covenants or waivers in acceptable terms could not be successfully negotiated.

Cash Obligations. Under various agreements, we are obligated to make future cash payments in fixed amounts. These include payments under the revolving credit facility, capital lease obligations and rent payments required under operating leases with initial or remaining terms in excess of one year.

The following table summarizes our cash payment obligations as of July 3, 2010 for the next five fiscal years and thereafter (in millions):

	Less than one year		One to three years		Three to five years		After five years		Total
Variable rate revolving credit facility	$	—	$	64.5	$	—	$	—	$	64.5
Variable rate notes		—		—		—		75.0		75.0
Variable rate loan		—		20.0		—		—		20.0
Other debt arrangements, including capital leases		1.0		0.9		—		—		1.9
Operating leases		25.4		35.0		18.5		7.5		86.4
Retirement benefit payments		2.2		5.1		5.5		17.7		30.5
Total contractual cash obligations	$	28.6	$	125.5	$	24.0	$	100.2	$	278.3

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As of July 3, 2010, we have entered into certain interest rate swap agreements whereby we have limited our exposure to future interest rate increases. See Note 7 to the Consolidated Financial Statements for a further discussion.

At July 3, 2010, we had approximately $229.8 million of available capacity under our revolving and accounts receivable credit facilities. However, borrowings would be limited to $180.5 million due to debt covenants. Our revolving credit facility contributes $162.6 million of liquidity while our accounts receivable securitization facility contributes $17.9 million based on the eligible receivables balance at July 3, 2010. We anticipate that we will generate sufficient cash flows from operations to satisfy our cash commitments and capital requirements for fiscal 2011 and to reduce the amounts outstanding under the revolving credit facility; however, we may utilize borrowings under the revolving credit facility to supplement our cash requirements from time to time. We estimate that capital expenditures in fiscal 2011 will be approximately $20-$30 million.

Off Balance Sheet Arrangements

At July 3, 2010, we had $23.6 million of stand-by letters of credit that were issued and outstanding, primarily in connection with our property and casualty insurance programs. No amounts have been drawn upon these letters of credit. In addition, we have outstanding operating leases with contractual obligations totaling $86.4 million related to facility, equipment and vehicle leases. We do not utilize special purpose entities to facilitate off-balance sheet financing arrangements.

Pension Obligations

Pension expense is recognized on an accrual basis over the employees’ approximate service periods. Pension expense is generally independent of funding decisions or requirements. We recognized expense for our defined benefit pension plan of $1.5 million, income of $0.2 million and income of $0.5 million in fiscal 2010, 2009 and 2008, respectively. At July 3, 2010, the fair value of our pension plan assets totaled $39.8 million. We anticipate making cash contributions of approximately $2.5 million in fiscal 2011.

Effective January 1, 2007, we froze our defined benefit pension plan and related supplemental executive retirement plan. Future growth in benefits has not occurred beyond December 31, 2006.

The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and the assumed discount rate. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. Pension expense increases as the expected rate of return on pension plan assets decreases. At July 3, 2010, we estimated that the pension plan assets will generate a long-term rate of return of 7.75%. This rate is lower than the assumed rate used at both June 27, 2009 and June 28, 2008 of 8.0%, and was developed by evaluating input from our outside actuary as well as long-term inflation assumptions. The expected long-term rate of return on plan assets at July 3, 2010 is based on an allocation of equity and fixed income securities. Decreasing the expected long-term rate of return by 0.5% (from 7.75% to 7.25%) would increase our estimated 2011 pension expense by approximately $0.2 million. Pension liability and future pension expense increase as the discount rate is reduced. We discounted future pension obligations using a rate of 5.60% at July 3, 2010, 6.90% at June 27, 2009 and 7.20% at June 28, 2008. Our outside actuary determines the discount rate by creating a yield curve based on high quality bonds. Decreasing the discount rate by 0.5% (from 5.60% to 5.10%) would increase our accumulated benefit obligation at July 3, 2010 by approximately $6.2 million and increase the estimated fiscal 2011 pension expense by approximately $0.6 million.

Future changes in plan asset returns, assumed discount rates and various other factors related to the participants in our pension plan will impact our future pension expense and liabilities. We cannot predict with certainty what these factors will be in the future. As part of our assessment of the expected return on plan assets, we considered the recent decline in the global equity markets and concluded that a 7.75% long term rate was appropriate.

Union Pension Plans

We participate in a number of union sponsored, collectively bargained multi-employer pension plans (“Union Plans”). We made contributions to these plans of $3.1 million, $3.2 million and $2.5 million in fiscal 2010, 2009 and 2008, respectively. These contributions are determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of hours worked. Several factors could result in potential funding deficiencies which could cause us to make significantly higher future contributions to these plans, including unfavorable investment performance, changes in demographics, and increased benefits to participants. At this time, we are unable to determine the amount of additional contributions, if any.

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We are responsible for our proportional share of any unfunded vested benefits related to the Union Plans. Under the applicable accounting rules, we are not required to record a liability for our portion of the withdrawal liability, if any, until we exit from the plan. In fiscal year 2009, we exited from one multi-employer pension plan and recorded a liability of $1.0 million. In fiscal year 2010, local union members at another facility voted to leave their union which resulted in recording a pension liability of $0.8 million. There are two locations that are currently considering whether to leave their union. If the members at these locations vote to decertify their unions, the decertification will result in a partial withdrawal from their Union Plan and we will be required to record an estimated liability of up to $1.3 million.

If a future withdrawal from a plan occurs, we will record our proportional share of any unfunded vested benefits. Based upon the most recent information available from the trustees managing the Union Plans, our share of the unfunded vested benefits for these plans is estimated to be approximately $20.0 to $26.0 million. This estimate includes our estimated liability associated with the pending decertifications previously discussed.

Share-based Payments

We grant share-based awards, including restricted stock and options to purchase our common stock. Stock option grants are for a fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. Share-based compensation for awards is recognized in the Consolidated Statements of Operations on a straight-line basis over the requisite service period. The amortization of share-based compensation reflects estimated forfeitures adjusted for actual forfeiture experience. We review our estimated forfeiture rates on an annual basis. As share-based compensation expense is recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from the exercise of stock options or release of restrictions on the restricted stock. At the time share-based awards are exercised, cancelled, expire or restrictions lapse, we recognize adjustments to income tax expense.

Impact of Inflation

In general, we believe that our results of operations are not significantly affected by moderate changes in the inflation rate. Historically, we have been able to manage the impacts of more significant changes in inflation rates through our customer relationships and a continued focus on operational productivity improvements. Our customer agreements generally provide for price increases consistent with the rate of inflation or 5.0%, whichever is greater.

Significant increases in energy costs, specifically natural gas and gasoline, can materially affect our results of operations and financial condition. Currently, energy costs represent approximately 4.1% of our total revenue.

Exit, Disposal and Related Activities

We continuously monitor our operations and related cost structure to ensure that our resource levels are appropriate and from time to time take various actions to ensure that these resources are utilized in the most efficient manner. These actions may consist of facility closures, divestitures, expansions and increases or decreases in staffing levels. During fiscal 2009 and 2010, we took a number of actions to adjust our business operations as a result of the changes in the economic environment. The most significant of these actions are discussed below.

In the first quarter of fiscal year 2009, we closed three processing plants, two branch locations, reduced selected headcount and outsourced our fleet maintenance function. As a result of these actions, we recorded approximately $2.6 million of expense in the Consolidated Statements of Operations during the quarter. These charges principally impacted our United States operating segment. Of these amounts, approximately $1.0 million was recorded in the “Cost of rental operations” line item and the remaining $1.6 million was recorded in the “Selling and administrative” line item. All severance associated with this action has been paid.

In the third quarter of fiscal year 2009, we restructured our workforce to better align our cost structure with our revenue levels. As a result of this action, we recorded approximately $0.9 million in severance costs in the Consolidated Statements of Operations. These charges impacted both our United States and Canadian operating segments and did not significantly impact any one line item on our Consolidated Statements of Operations. Substantially all severance costs related to these actions have been paid.

During the first quarter of fiscal year 2010, we continued to align our workforce and cost structure to better match our revenue levels. As a result, we reduced selected administrative, regional and corporate headcount, divested an unprofitable operation and recorded approximately $1.4 million in associated severance costs in the “Selling and administrative” line item. Of the

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$1.4 million in severance, $1.3 million was paid by July 3, 2010, with the remaining $0.1 million to be paid by October 31, 2010. These actions primarily impacted our United States operating segment.

In the second quarter of fiscal year 2010, we sold all of the customer lists and certain assets related to our U.S. Cleanroom operations. In addition, we disposed of a non-core linen operation at one of our production facilities. As a result of these transactions, including the associated asset impairment charges, we recognized a net gain of $1.2 million in the “Selling and administrative” line in the Consolidated Statements of Operations.

In the third quarter of fiscal year 2010, we sold a portion of the customer list and certain assets related to a non-core linen operation and refined our estimates related to the disposition of our Cleanroom operations. As a result of these transactions, including the associated impairment charges, we recognized a net gain of $2.5 million in the “Selling and administrative” line in the Consolidated Statements of Operations.

Environmental Matters

We are currently involved in several environmental-related proceedings by certain governmental agencies, which relate primarily to allegedly operating certain facilities in noncompliance with required permits. In addition to these proceedings, in the normal course of our business, we are subject to, among other things, periodic inspections by regulatory agencies. We continue to dedicate substantial operational and financial resources to environmental compliance, and we remain fully committed to operating in compliance with all environmental laws and regulations. As of July 3, 2010, we had reserves of approximately $3.2 million related to these matters.

Descriptions of certain matters are as follows:

On February 19, 2010, we settled the previously disclosed matter brought against us by the Commissioner of Environmental Protection of the State of Connecticut. The aggregate settlement amount was within previously established reserves.

In August 2008, we became aware that our Des Moines, Iowa facility allegedly violated the facility’s wastewater treatment permit. In addition, we became aware that this facility allegedly did not properly report its wastewater sampling results to the City of Des Moines. We promptly brought this matter to the attention of the City of Des Moines Attorney’s office and the City of Des Moines water reclamation authority. We also immediately launched our own investigation. As part of our investigation, we learned, among other things, that the City of Des Moines’ water reclamation authority was aware of the situation and had referred this matter to the U.S. Environmental Protection Agency (“U.S. EPA”). The U.S. EPA has also referred this matter to the U.S. Attorneys’ office in Des Moines, Iowa. We have reached settlement with the Des Moines Metropolitan Wastewater Reclamation Authority and resolved this matter with the city. We are in the midst of resolving this matter with the U.S. EPA and the U.S. Attorney.

On July 24, 2008, the U.S. EPA inspected our facility in South Chicago, Illinois. As part of its inspection, the U.S. EPA identified certain alleged deficiencies with respect to the operations at this facility, including potential recordkeeping violations and opportunities to improve the overall environmental compliance and permitting of the facility. The U.S. EPA provided written record of its inspection findings to us and identified alleged noncompliance with certain provisions of the Resource Conservation and Recovery Act. The U.S. EPA has subsequently visited this facility. We have responded to the U.S. EPA and will continue to work cooperatively with the U.S. EPA to resolve this matter.

In the summer and fall of 2008, the U.S. EPA inspected our facility in Manchester, New Hampshire. As part of its inspection, the U.S. EPA identified certain alleged deficiencies with respect to the operations at this facility, including potential recordkeeping violations and opportunities to improve the facility’s overall environmental compliance and permitting. The U.S. EPA requested additional information regarding our Manchester and Portsmouth, New Hampshire facilities to evaluate compliance with the Clean Air Act and applicable state and federal regulations, and the U.S. EPA issued a testing order at the Manchester facility. We have completed the requested testing and submitted a test report to the U.S. EPA and the New Hampshire Department of Environmental Services (“NHDES”). Subsequently, in September 2009, the U.S. EPA issued a Notice of Violation alleging noncompliance with state and federal laws concerning air emissions and permitting. We will continue to work cooperatively with the U. S. EPA to resolve this matter.

While we cannot predict the outcome of these matters with certainty, we currently do not expect any of these matters to have a material adverse effect on our results of operations or financial position. However, while we believe the possibility is remote, there is the potential that we may incur additional losses in excess of established reserves, and these losses could be material.

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Adoption of New Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued revised guidance regarding accounting for business combinations. The guidance retains the requirement that the acquisition method of accounting (previously called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This guidance also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. We adopted this revised guidance effective at the beginning of fiscal year 2010. Our adoption did not impact our consolidated financial position or results of operations.

In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2010-06, “Improving Disclosures about Fair Value Measurements” (ASU 2010-06 or the ASU). The ASU amends ASC 820 to require a number of additional disclosures regarding fair value measurements. Specifically, the ASU requires entities to disclose the following:

- The amounts of significant transfers between level 1 and level 2 of the hierarchy and the reasons for the transfer.

- The reason for any transfer in or out of level 3.

- Information in the reconciliation of recurring level 3 measurements about purchases, sales, issuance and settlements on a gross basis.

- Additional information about both the valuation techniques and inputs used in estimating level 2 and level 3 fair value measurements.

The levels within the fair value hierarchy are defined in Note 6, to the Consolidated Financial Statements.

ASU 2010-06 was effective for our third quarter ended March 27, 2010, and did not impact our financial position or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are exposed to market risks. Market risk is the potential loss arising from adverse changes in interest rates, energy prices and foreign currency exchange rates. We do not enter into derivative or other financial instruments for speculative purposes.

Interest Rate Risk

We are subject to market risk exposure related to changes in interest rates. We use financial instruments such as interest rate swap agreements, to manage the interest rate on our fixed and variable rate debt. Under these arrangements, we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. Interest rate swap agreements are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures.

A sensitivity analysis was performed to measure our interest rate risk over a one-year period to changes in market interest rates for forecasted debt levels and interest rate swaps. The base rates used for the sensitivity analysis for variable debt and interest rate swaps is the three month LIBOR market interest rates at July 3, 2010. The credit spread is included in the base rates used in the analysis. The two scenarios include measuring the sensitivity to interest expense with an immediate 50 basis point change in market interest rates and the impact of a 50 basis point change distributed evenly throughout the year. Based on the forecasted average debt level, outstanding interest rate swaps and current market interest rates, the forecasted interest expense is $9.7 million. The scenario with an immediate 50 basis point change would increase or decrease forecasted interest by $0.2 million or 1.9%. The scenario that distributes the 50 basis point change would increase or decrease forecasted interest expense by $0.1 million or 1.2%.

For additional information regarding our debt see Note 5 to our Consolidated Financial Statements as well as the Liquidity, Capital Resources and Financial Condition section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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Energy Cost Risk

We are subject to market risk exposure related to changes in energy costs and, at times we use derivative financial instruments to manage the risk that changes in gasoline costs will have on our future financial results. Periodically, we purchase fuel commodity futures contracts to effectively hedge a portion of anticipated actual energy purchases. Under these contracts, we agree to exchange, at specified intervals, the difference between fixed and floating commodity prices calculated by reference to an agreed-upon notional principal amount.

A sensitivity analysis was performed to measure our energy cost risk over a one-year period for forecasted levels of unleaded and diesel fuel purchases. The sensitivity analysis that was performed assumed gasoline prices at July 3, 2010, hedged gallons of 0.6 million (including unleaded and diesel) and forecasted gasoline and diesel purchases over a one-year period. For each one percentage point increase or decrease in gasoline and diesel prices under these forecasted levels and prices, our forecasted energy cost would change by approximately $0.1 million.

Production costs at our plants are also subject to fluctuations in natural gas costs. To reduce our exposure to changes in natural gas prices, we utilize natural gas supply contracts in the normal course of business. These contracts meet the definition of “normal purchase” and, therefore, are not considered derivative instruments for accounting purposes.

Foreign Currency Exchange Risk

Our material foreign subsidiaries are located in Canada. The assets and liabilities of these subsidiaries are denominated in the Canadian dollar and, as such, are translated into U.S. dollars at the exchange rate in effect at the balance sheet date. Results of operations are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in results of operations.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Following is a summary of the results of operations for each of the quarters within the fiscal years ended July 3, 2010 and June 27, 2009. All amounts are in millions, except per share data.

QUARTERLY FINANCIAL DATA
G&K Services, Inc. and Subsidiaries (Unaudited)	First		Second		Third			Fourth
2010
Revenues	$	208.1	$	206.4	$	198.9		$	220.2
Gross Profit		60.3		60.7		59.2			71.1
Income from Operations		9.8		14.3		14.0			21.5
Net Income		3.3		7.2		7.0			11.1
Basic Earnings per Share		0.18		0.39		0.38			0.61
Diluted Earnings per Share		0.18		0.39		0.38			0.61
Dividends per Share		0.075		0.075		0.075			0.075
2009
Revenues	$	245.2	$	241.8	$	231.0		$	218.0
Gross Profit		71.3		74.5		68.4			62.6
Income/(Loss) from Operations		9.4		19.5		(112.3	)		7.4
Net Income/(Loss)		1.5		9.5		(86.3	)		2.8
Basic Earnings per Share		0.08		0.52		(4.74	)		0.16
Diluted Earnings per Share		0.08		0.52		(4.74	)		0.16
Dividends per Share		0.070		0.070		0.070			0.070

We utilize a 52-53 week fiscal year ending on the Saturday nearest June 30. Fiscal 2010 was a 53 week year with the extra week reported in the fourth quarter and fiscal year 2009 was a 52 week year. The net loss in the third quarter of fiscal year 2009, is the result of a non-cash impairment charge primarily related to goodwill which is fully discussed in Note 3 to our audited financial statements included in the accompanying financial statements.

29

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for G&K Services, Inc. (“the Company”) as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting was designed under the supervision of the Company’s principal executive officer, principal financial officer, principal accounting officer and other members of management, and effected by the Company’s Board of Directors, to provide reasonable assurance regarding the reliability of financial reporting and the preparation and presentation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

Our management completed an assessment of the Company’s internal control over financial reporting. This assessment was based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Based on this assessment, management has concluded that our internal control over financial reporting was effective as of July 3, 2010.

Ernst & Young LLP, the Company’s independent registered public accounting firm that audited the consolidated financial statements and schedule and the effectiveness of the Company’s internal control over financial reporting, has issued an unqualified attestation report on the Company’s effectiveness of internal control over financial reporting, as stated in their report which is included herein.

Any internal control system over financial reporting, no matter how well conceived and operated, has inherent limitations. As a result, even those systems determined to be effective can provide only reasonable, not absolute, assurance that the control objectives over the reliability of financial reporting and preparation and presentation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States are met.

/s/ Douglas A. Milroy  

Douglas A. Milroy 

Chief Executive Officer and Director
(Principal Executive Officer) 

/s/ Jeffrey L. Wright  

Jeffrey L. Wright 

Executive Vice President,
Chief Financial Officer and Director
(Principal Financial Officer)

30

/s/ Thomas J. Dietz  

Thomas J. Dietz 

Vice President and Controller
(Principal Accounting Officer) 

August 26, 2010

31

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
G&K Services, Inc.

We have audited the accompanying consolidated balance sheets of G&K Services, Inc. and subsidiaries (the Company) as of July 3, 2010, and June 27, 2009, and the related consolidated statements of operations, stockholders’ equity and comprehensive income/(loss), and cash flows for each of the three years in the period ended July 3, 2010. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of G&K Services, Inc. and subsidiaries at July 3, 2010, and June 27, 2009, and the consolidated results of their operations and their cash flows for each of the three years in the period ended July 3, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of July 3, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated August 26, 2010, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP  

Ernst & Young LLP 

Minneapolis, Minnesota
August 26, 2010

32

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
G&K Services, Inc.

We have audited G&K Services, Inc. and subsidiaries’ (the Company’s) internal control over financial reporting as of July 3, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, G&K Services, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of July 3, 2010, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of July 3, 2010, and June 27, 2009, and the related consolidated statements of operations, stockholders’ equity and comprehensive income/(loss), and cash flows for each of the three years in the period ended July 3, 2010, and our report dated August 26, 2010, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP  

Ernst & Young LLP 

Minneapolis, Minnesota
August 26, 2010

33

CONSOLIDATED STATEMENTS OF OPERATIONS

G&K Services, Inc. and Subsidiaries

	For the Fiscal Years Ended
	July 3,		June 27,			June 28,
	2010		2009			2008
(In thousands, except per share data)	(53 weeks)		(52 weeks)			(52 weeks)
Revenues
Rental operations	$	776,098	$	860,921		$	925,767
Direct sales		57,494		75,044			76,628
Total revenues		833,592		935,965			1,002,395
Operating Expenses
Cost of rental operations		539,711		603,524			626,270
Cost of direct sales		42,555		55,650			55,615
Selling and administrative		191,705		226,115			229,987
Goodwill and other impairment charges		—		126,719			—
Total operating expenses		773,971		1,012,008			911,872
Income/(Loss) from Operations		59,621		(76,043	)		90,523
Interest expense		13,849		13,996			15,543
Income/(Loss) before Income Taxes		45,772		(90,039	)		74,980
Provision/(Benefit) for income taxes		17,160		(17,575	)		28,901
Net Income/(Loss)	$	28,612	$	(72,464	)	$	46,079
Basic weighted average number of shares outstanding		18,299		18,389			20,138
Basic Earnings per Common Share	$	1.56	$	(3.94	)	$	2.29
Diluted weighted average number of shares outstanding		18,348		18,389			20,277
Diluted Earnings per Common Share	$	1.56	$	(3.94	)	$	2.27
Dividends per Share	$	0.30	$	0.28		$	0.20

The accompanying notes are an integral part of these Consolidated Financial Statements.

34

CONSOLIDATED BALANCE SHEETS
G&K Services, Inc. and Subsidiaries

	July 3,			June 27,
(In thousands, except share data)	2010			2009
ASSETS
Current Assets
Cash and cash equivalents	$	8,774		$	13,136
Accounts receivable, less allowance for doubtful accounts of $3,118 and $3,848		82,754			85,209
Inventories, net		126,325			141,616
Other current assets		17,509			18,213
Current income taxes receivable		3,770			3,028
Total current assets		239,132			261,202
Property, Plant and Equipment
Land		31,414			31,062
Buildings and improvements		154,200			158,842
Machinery and equipment		307,318			317,308
Automobiles and trucks		14,624			23,450
Less accumulated depreciation		(312,568	)		(313,926	)
Total property, plant and equipment		194,988			216,736
Other Assets
Goodwill		323,055			319,942
Customer contracts and non-competition agreements, net		22,634			29,539
Other, principally retirement plan assets		34,059			29,873
Total other assets		379,748			379,354
Total assets	$	813,868		$	857,292
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	25,944		$	29,134
Accrued expenses
Salaries and employee benefits		29,408			32,047
Other		42,070			53,087
Deferred income taxes		3,557			3,414
Current maturities of long-term debt		1,023			7,744
Total current liabilities		102,002			125,426
Long-Term Debt, net of Current Maturities		160,398			224,781
Deferred Income Taxes		1,242			1,893
Accrued Income Taxes — Long Term		10,113			12,016
Other Noncurrent Liabilities		73,217			55,820
Commitments and Contingencies (Notes 12 and 13)
Stockholders’ Equity
Common stock, $0.50 par value, non-convertible Class A, 400,000,000 shares authorized, 18,581,064 and 18,511,768 shares issued and outstanding		9,292			9,256
Additional paid-in capital		8,009			3,543
Retained earnings		444,986			421,953
Accumulated other comprehensive income		4,609			2,604
Total stockholders’ equity		466,896			437,356
Total liabilities and stockholders’ equity	$	813,868		$	857,292

The accompanying notes are an integral part of these Consolidated Financial Statements.

35

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME/(LOSS)
G&K Services, Inc. and Subsidiaries

										Accumulated Other
	Class A			Additional Paid-In						Comprehensive
(In thousands, except per share data)	Common Stock			Capital			Retained Earnings			Income/(Loss)			Stockholders’ Equity
Balance June 30, 2007	$	10,645		$	66,863		$	485,954		$	28,526		$	591,988
Comprehensive income:
Net income		—			—			46,079			—			46,079
Other comprehensive income (see Note 9)		—			—			—			6,833			6,833
Comprehensive Income														52,912
Cumulative effect of the adoption of FIN 48		—			—			(1,559	)		—			(1,559	)
Issuance of common stock under stock plans, net of income tax (282 shares)		141			4,216			—			—			4,357
Equity based compensation		—			5,932			—			—			5,932
Share repurchase program (2,470 shares, see Note 10)		(1,235	)		(77,011	)		(13,867	)		—			(92,113	)
Cash dividends ($0.20 per share)		—			—			(4,041	)		—			(4,041	)
Balance June 28, 2008		9,551			—			512,566			35,359			557,476
Comprehensive Loss:
Net loss		—			—			(72,464	)		—			(72,464	)
Other comprehensive loss (see Note 9)		—			—			—			(32,755	)		(32,755	)
Comprehensive Loss														(105,219	)
Issuance of common stock under stock plans, net of income tax (90 shares)		45			165			—			—			210
Equity based compensation		—			7,149			—			—			7,149
Share repurchase program (680 shares, see Note 10)		(340	)		(3,771	)		(12,936	)		—			(17,047	)
Cash dividends ($0.28 per share)		—			—			(5,213	)		—			(5,213	)
Balance June 27, 2009		9,256			3,543			421,953			2,604			437,356
Comprehensive income:
Net income		—			—			28,612			—			28,612
Other comprehensive income (see Note 9)		—			—			—			2,005			2,005
Comprehensive Income														30,617
Issuance of common stock under stock plans, net of income tax (88 shares)		44			340			—			—			384
Equity based compensation		—			4,513			—			—			4,513
Share repurchase program (16 shares, see Note 10)		(8	)		(387	)		—			—			(395	)
Cash dividends ($0.30 per share)		—			—			(5,579	)		—			(5,579	)
Balance July 3, 2010	$	9,292		$	8,009		$	444,986		$	4,609		$	466,896

     The accompanying notes are an integral part of these Consolidated Financial Statements.

36

CONSOLIDATED STATEMENTS OF CASH FLOWS
G&K Services, Inc. and Subsidiaries

	For the Fiscal Years Ended
	July 3,			June 27,			June 28,
	2010			2009			2008
(In thousands)	(53 weeks)			(52 weeks)			(52 weeks)
Operating Activities:
Net income/(loss)	$	28,612		$	(72,464	)	$	46,079
Adjustments to reconcile net income/(loss) to net cash provided by operating activities -
Depreciation and amortization		40,188			44,252			48,404
Goodwill and other impairment charges		—			126,719			—
Deferred income taxes		(1,824	)		(34,999	)		3,741
Share-based compensation		4,513			7,149			5,932
Changes in current operating items, exclusive of acquisitions/divestitures -
Accounts receivable and prepaid expenses		371			22,155			(10,068	)
Inventories		22,157			6,762			1,470
Accounts payable and other accrued expenses		(12,576	)		121			976
Other		(8,731	)		3,485			6,524
Net cash provided by operating activities		72,710			103,180			103,058
Investing Activities:
Property, plant and equipment additions, net		(16,710	)		(23,330	)		(27,057	)
Divestiture/(Acquisition) of business assets, net of cash		21,620			—			(63,820	)
Purchases of investments, net		—			—			(3,223	)
Net cash provided by (used for) investing activities		4,910			(23,330	)		(94,100	)
Financing Activities:
Payments of long-term debt		(7,535	)		(7,740	)		(7,534	)
(Payments of) Proceeds from revolving credit facilities, net		(68,710	)		(48,500	)		81,001
Cash dividends paid		(5,579	)		(5,213	)		(4,041	)
Net issuance of common stock, primarily under stock option plans		384			210			4,357
Purchase of common stock		(395	)		(17,047	)		(93,142	)
Net cash used for financing activities		(81,835	)		(78,290	)		(19,359	)
(Decrease) Increase in Cash and Cash Equivalents		(4,215	)		1,560			(10,401	)
Effect of Exchange Rates on Cash		(147	)		(1,075	)		293
Cash and Cash Equivalents:
Beginning of year		13,136			12,651			22,759
End of year	$	8,774		$	13,136		$	12,651
Supplemental Cash Flow Information:
Cash paid for -
Interest	$	13,161		$	14,214		$	15,560
Income taxes	$	13,502		$	11,162		$	22,950

The accompanying notes are an integral part of these Consolidated Financial Statements.

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in millions, except share and per share data)

1. Summary of Significant Accounting Policies

Nature of Business

G&K Services, Inc. is a market leader in providing branded work apparel and facility services programs that enhance image and safety in the workplace. We serve a wide variety of North American industrial, service and high-technology companies providing them with work apparel and facility services products such as floor mats, dust mops, wiping towels, restroom supplies and selected linen items. We also manufacture certain work apparel garments that are used to support our garment rental and direct purchase programs. We have two operating segments, United States (includes the Dominican Republic and Ireland operations) and Canada, which have been identified as components of our organization that are reviewed by our Chief Executive Officer to determine resource allocation and evaluate performance.

Basis of Presentation

Our Consolidated Financial Statements include the accounts of G&K Services, Inc. and all subsidiaries in which we have a controlling financial interest. Intercompany transactions and accounts are eliminated in consolidation.

Our fiscal year ends on the Saturday nearest June 30. All references herein to “2010”, “2009” and “2008”, refer to the fiscal years ended July 3, 2010, June 27, 2009 and June 28, 2008, respectively. Fiscal year 2010 consisted of 53 weeks, fiscal years 2009 and 2008 each consisted of 52 weeks.

We have evaluated subsequent events and have found none that require recognition or disclosure.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current year presentation. These reclassifications did not impact current or historical net income or stockholder’s equity.

Use of Estimates

The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts and disclosures reported therein. Due to the inherent uncertainty involved in making estimates, actual results could differ from our estimates.

Cash and Cash Equivalents

We consider all investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are recorded net of an allowance for expected losses and the fair value approximates the book value. The allowance, recognized as an amount equal to anticipated future write-offs, is based on the age of outstanding balances, analysis of specific accounts, historical bad debt experience and current economic trends.

Inventories

Inventories consist of new goods and rental merchandise in service. New goods are stated at lower of first-in, first-out (FIFO) cost or market, net of any reserve for obsolete or excess inventory. Merchandise placed in service to support rental operations is amortized into cost of rental operations over the estimated useful lives of the underlying inventory items, primarily on a straight-line basis, which results in a matching of the cost of the merchandise with the weekly rental revenue generated by the merchandise. Estimated lives of rental merchandise in service range from six months to three years. In establishing estimated lives for merchandise in service, management considers historical experience and the intended use of the merchandise.

We review the estimated useful lives of our in-service inventory assets on a periodic basis. During the fourth quarter of 2010, we completed an analysis of certain in-service inventory assets which resulted in the estimated useful lives for these assets being modified to better reflect the estimated periods in which the assets will remain in service. The effect of the change in estimate in fiscal year 2010 was not material.

38

We estimate our reserves for inventory obsolescence by periodically examining our inventory to determine if there are indicators that carrying values exceed the net realizable value. Experience has shown that significant indicators that could require the need for additional inventory write-downs include the age of the inventory, anticipated demand for our products, historical inventory usage, revenue trends and current economic conditions. We believe that adequate reserves for inventory obsolescence have been made in the Consolidated Financial Statements; however, in the future, product lines and customer requirements may change, which could result in additional inventory write-downs.

The components of inventories as of July 3, 2010 and June 27, 2009 are as follows:

	July 3,		June 27,
	2010		2009
Raw Materials	$	7.5	$	9.2
Work in Process		0.5		3.6
Finished Goods		49.0		55.1
New Goods	$	57.0	$	67.9
Merchandise In Service	$	69.3	$	73.7
Total Inventories	$	126.3	$	141.6

Property, Plant and Equipment

Property, plant and equipment are carried at cost. Depreciation is generally computed using the straight-line method over the following estimated useful lives:

	Life
	(Years)
Automobiles and trucks		3 to 8
Machinery and equipment		3 to 10
Buildings		20 to 33
Building improvements		10

Costs of significant additions, renewals and betterments, including external and certain internal computer software development costs, are capitalized. When an asset is sold or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and the gain or loss on disposition is reflected in earnings. Repair and maintenance costs are charged to operating expense when incurred. Depreciation expense for fiscal years 2010, 2009, and 2008 was $34.0 million, $37.0 million and $37.3 million, respectively and includes amortization of assets recorded under capital leases.

Environmental Liabilities

We accrue various environmental related costs, which consist primarily of estimated cleanup costs, fines and penalties, when it is probable that we have incurred a liability and the amount can be reasonably estimated. When a single amount cannot be reasonably estimated but the cost can be estimated within a range, we accrue the minimum amount. This accrued amount reflects our assumptions regarding the nature of the remedy and the outcome of discussions with regulatory agencies. Changes in the estimates on which the accruals are based, including unanticipated government enforcement actions, or changes in environmental regulations could result in higher or lower costs. Accordingly, as investigations and other actions proceed, it is likely that adjustments to our accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on our results of operations or cash flows in a given period. While we cannot predict the ultimate outcome of these environmental matters, currently, none of these actions are expected to have a material adverse effect on our results of operations or financial position. While we believe the possibility is remote, there is the potential that we may incur additional losses in excess of established reserves and these losses could be material.

Accruals for environmental liabilities are included in the “Other” accrued expenses line item in the Consolidated Balance Sheets. Environmental costs are capitalized if they extend the life of the related property, increase its capacity, and/or mitigate or prevent future contamination. The cost of operating and maintaining environmental control equipment is charged to expense.

For additional information see Note 13, “Commitments and Contingencies”.

39

Impairments of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable in accordance with applicable accounting standards. Recoverability of assets in accordance with these standards compares the projected undiscounted future cash flows from use and disposition of assets to the carrying amounts of those assets. When the sum of projected undiscounted cash flows is less than the carrying amount, impairment losses are recognized. In determining such impairment losses, discounted cash flows are utilized to determine the fair value of the assets being evaluated. During the third quarter of fiscal 2009, we recorded an impairment loss of $19.7 million related to certain long-lived assets and included that loss in the “Goodwill and other impairment charges” line item in the Consolidated Statements of Operations. We did not record any impairment losses on long-lived assets in the Consolidated Financial Statements in fiscal 2010 or 2008.

For additional information see Note 3, “Goodwill and Other Impairment Charges”.

Goodwill and Intangible Assets

The carrying value of goodwill is reviewed annually in our fourth quarter for possible impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill may not be recoverable. Goodwill has been assigned to reporting units for purposes of impairment testing. Our reporting units are U.S. Rental operations, Canadian Rental operations and Direct Sales operations. The associated goodwill balances were $259.7 million, $63.4 million and $0, respectively, at July 3, 2010. There have been no changes to our reporting units or in the allocation of goodwill to each respective reporting unit in fiscal years 2008, 2009, or 2010.

The goodwill impairment test involves a two-step process. First, we assess whether the fair value of the reporting unit exceeds the carrying amount of the unit including goodwill. Our evaluation generally considers changes in the operating environment, competitive position, market trends, operating performance, quoted market prices for our equity securities and fair value models and research prepared by independent analysts and, if necessary, discounted cash flows. If the carrying amount of a reporting unit exceeds its fair value, we would perform a second test and if necessary reduce the reporting unit’s goodwill to its implied fair value. The second step requires us to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit.

During the second quarter of fiscal year 2009, there was a significant deterioration in general economic conditions and in the market value of our stock. The resulting decline in our market capitalization prompted us to conduct a goodwill analysis to determine if an impairment of goodwill existed as of December 27, 2008. Our analysis evaluated the estimated fair value of each reporting unit relative to the net book value. We prepared a discounted cash flow model to estimate fair value, which validated the reasonableness of the estimated market value plus a control premium. As a result of this analysis, no impairment was recorded as of December 27, 2008. In the third quarter of fiscal year 2009, economic events and circumstances indicated that it was necessary to perform an additional assessment of our goodwill. As part of our assessment, we prepared a discounted cash flow analysis to determine the fair value of each reporting unit.

Determining a reporting unit’s discounted cash flows requires significant management judgment with respect to sales, gross margin and selling, general and administrative (SG&A) expense rates, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures are based on our annual business plan and other forecasted results. Discount rates reflect a market-based weighted average cost of capital taking into consideration the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimated fair value of reporting units are based on the best information available as of the date of the assessment. The use of different assumptions could increase or decrease the estimated future discounted operating cash flows and therefore, could increase or decrease any impairment charge. As identified in Note 3, the terminal growth rate we used in our discounted cash flow model was 2.5%-3.0%. While we do not believe historical operating results are necessarily indicative of future operating results, we believe our assumptions are reasonable when compared to our historical 10 year compound annual growth rate in operating cash flow of 3.3%. After completing the assessment we determined that the carrying value of our U.S. Rental and Direct Sales reporting units exceeded the fair value, and an impairment charge of $107.0 million was recorded.

We performed our annual goodwill impairment test as of June 27, 2009 and determined that no further impairment of goodwill occurred in fiscal year 2009. There were no impairments of goodwill in fiscal 2010 or 2008.

40

Future events could cause management to conclude that impairment indicators exist and that goodwill and other intangibles associated with acquired businesses are impaired. Any resulting impairment loss could have a material impact on our financial condition and results of operations.

For additional information see Note 3, “Goodwill and Other Impairment Charges”.

Retirement Plan Assets

Retirement plan assets consist primarily of mutual funds and cash equivalents, which are stated at their fair value as determined by quoted market prices, and the cash surrender values of life insurance policies.

Foreign Currency

For all significant foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are translated at the period-end exchange rates. Income statement accounts are translated using the average exchange rates prevailing during the year. Translation adjustments are reflected within “Accumulated other comprehensive income (loss)” in stockholders’ equity. Gains and losses from foreign currency transactions are included in net earnings for the period and were not material in fiscal 2010, 2009 or 2008.

Revenue Recognition

Our rental operations business is largely based on written service agreements whereby we agree to pick-up soiled merchandise, launder and then deliver clean uniforms and other related products. The service agreements generally provide for weekly billing upon completion of the laundering process and delivery to the customer. Accordingly, we recognize revenue from rental operations in the period in which the services are provided. Revenue from rental operations also includes billings to customers for lost or damaged uniforms and replacement fees for non-personalized merchandise that is lost or damaged. Direct sale revenue is recognized in the period in which the product is shipped. Total revenues do not include sales tax as we consider ourselves a pass-through conduit for collecting and remitting sales taxes.

We changed our business practices regarding the replacement of certain in-service towel and linen inventory and accordingly, during the fourth quarter of fiscal year 2010, we modified our revenue recognition policy related to the associated replacement fees. This revenue, which has historically been deferred and recognized over the estimated useful life of the associated in-service inventory, is now recognized upon billing. The effect of this change was to increase revenue and income from operations by $6.7 million, net income by $4.2 million, basic and diluted earnings per common share by $0.23 in fiscal year 2010.

Insurance

We carry large deductible insurance policies for certain obligations related to health, workers’ compensation, and auto and general liability programs. These deductibles range from $0.4 million to $0.8 million. Estimates are used in determining the potential liability associated with reported claims and for losses that have occurred, but have not been reported. Management estimates generally consider historical claims experience, escalating medical cost trends, expected timing of claim payments and actuarial analyses provided by third parties. Changes in the cost of medical care, our ability to settle claims and the present value estimates and judgments used by management could have a material impact on the amount and timing of expense for any period.

Income Taxes

Provisions for federal, state, and foreign income taxes are calculated based on reported pre-tax earnings and current tax law. Significant judgment is required in determining income tax provisions and evaluating tax positions. We periodically assess our liabilities and contingencies for all periods that are currently open to examination or have not been effectively settled based on the most current available information. When it is not more likely than not that our tax position will be sustained, we record our best estimate of the resulting tax liability and any applicable interest and penalties in the Consolidated Financial Statements.

Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using statutory rates in effect for the year in which the differences are expected to reverse. We present the tax effects of these deferred tax assets and liabilities separately for each major tax jurisdiction. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that the changes are enacted. We record valuation allowances to reduce deferred tax assets when it is more likely than not that

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some portion of the asset may not be realized. We evaluate our deferred tax assets and liabilities on a periodic basis. We believe that we have adequately provided for our future tax obligations based upon current facts, circumstances and tax law.

Per Share Data

Basic earnings per common share was computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share was computed similarly to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and other dilutive securities, including non-vested restricted stock, using the treasury stock method.

For the Fiscal Years Ended (In thousands)	2010		2009		2008
Weighted average number of common shares outstanding used in computation of basic earnings per share		18,299		18,389		20,138
Weighted average effect of non-vested restricted stock grants and assumed exercise of options		49		—		139
Shares used in computation of diluted earnings per share		18,348		18,389		20,277

Potential common shares of 1,486,000, 1,840,000, and 1,126,000 related to our outstanding stock options and restricted stock grants were excluded from the computation of diluted earnings per share for fiscal 2010, 2009 and 2008, respectively, as inclusion of these shares would have been anti-dilutive.

Derivative Financial Instruments

All derivative financial instruments are recognized at fair value and are recorded in the “Other current assets” or “Accrued expenses” line items in the Consolidated Balance Sheets. The accounting for changes in the fair value of a derivative financial instrument depends on whether it has been designated and qualifies as a hedging relationship and on the type of the hedging relationship. For those derivative financial instruments that are designated and qualify as hedging instruments, we designate the hedging instrument (based on the exposure being hedged) as cash flow hedges. We do not have any derivative financial instruments that have been designated as either a fair value hedge or a hedge of a net investment in a foreign operation. Cash flows associated with derivative financial instruments are classified in the same category as the cash flows hedged in the Consolidated Statements of Cash Flows.

In the ordinary course of business, we are exposed to market risks. We utilize derivative financial instruments to manage interest rate risk and commodity price risk and periodically foreign exchange risk. Interest rate swap contracts are entered into to manage interest rate risk associated with our fixed and variable rate debt. Futures contracts on energy commodities are entered into to manage the price risk associated with forecasted purchases of gasoline and diesel fuel used in our rental operations. Forward exchange contracts on foreign currencies are periodically entered into to manage the foreign currency exchange risk associated with firm commitments denominated in foreign currencies. We designate interest rate swap contracts as cash flow hedges of the interest expense related to variable rate debt and futures contracts on energy commodities as cash flow hedges of forecasted purchases of gasoline and diesel fuel.

For derivative financial instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative financial instrument is reported as a component of “Accumulated other comprehensive income” and reclassified into the Consolidated Statements of Operations in the same line item associated with the forecasted transaction and in the same period as the expenses from the cash flows of the hedged items are recognized. We perform an assessment at the inception of the hedge and on a quarterly basis thereafter, to determine whether our derivatives are highly effective in offsetting changes in the value of the hedged items. Any changes in the fair value resulting from hedge ineffectiveness, is immediately recognized as income or expense.

We do not engage in speculative transactions or fair value hedging nor do we hold or issue financial instruments for trading purposes.

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Share-based Payments

We grant share-based awards, including restricted stock and options to purchase our common stock. Stock option grants are for a fixed number of shares to employees and directors with an exercise price equal to the fair value of the shares at the date of grant. Share-based compensation for awards is recognized in the Consolidated Statements of Operations on a straight-line basis over the requisite service period. The amortization of share-based compensation reflects estimated forfeitures adjusted for actual forfeiture experience. Forfeiture rates are reviewed on an annual basis. As share-based compensation expense is recognized, a deferred tax asset is recorded that represents an estimate of the future tax deduction from the exercise of stock options or release of restrictions on the restricted stock. At the time share-based awards are exercised, cancelled, expire or restrictions lapse, we recognize adjustments to income tax expense.

Adoption of New Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued revised guidance regarding accounting for business combinations. The guidance retains the requirement that the acquisition method of accounting (previously called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This guidance also establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. We adopted this revised guidance effective at the beginning of fiscal year 2010. Our adoption did not impact our consolidated financial position or results of operations.

In January 2010, the FASB issued Accounting Standards Update No. 2010-06, “Improving Disclosures about Fair Value Measurements” (ASU 2010-06 or the ASU). The ASU amends ASC 820 to require a number of additional disclosures regarding fair value measurements. Specifically, the ASU requires entities to disclose the following:

- The amounts of significant transfers between level 1 and level 2 of the hierarchy and the reasons for the transfer.

- The reason for any transfer in or out of level 3.

- Information in the reconciliation of recurring level 3 measurements about purchases, sales, issuance and settlements on a gross basis.

- Additional information about both the valuation techniques and inputs used in estimating level 2 and level 3 fair value measurements.

The levels within the fair value hierarchy are defined in Note 6, to the Consolidated Financial Statements.

ASU 2010-06 was effective for our third quarter ended March 27, 2010, and did not impact our financial position or results of operations.

2. Business Combinations

We did not complete any acquisitions associated with our rental operations during fiscal 2009 or fiscal 2010; however, we did make several small acquisitions during fiscal 2008. The pro forma effects of these acquisitions, had they been acquired at the beginning of each fiscal year, were not material, either individually or in the aggregate. The total purchase consideration, including related acquisition costs, and purchase price adjustments from prior year acquisitions as well as the amounts exceeding the estimated fair values of assets acquired and liabilities assumed were as follows:

Fiscal Years	2010		2009		2008
Total purchase price and related acquisition costs	$	—	$	—	$	63.8
Goodwill		—		—		51.7

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3. Goodwill and Other Impairment Charges

The following table identifies the major components of the goodwill and other impairment charges that are reflected in the Consolidated Statements of Operations for fiscal year 2009:

Goodwill	$	107.0
Computer software		7.6
Property, plant and equipment		7.2
Customer contracts		3.5
Assets held for sale		1.4
Goodwill and other impairment charges	$	126.7

Goodwill

During the third quarter of fiscal 2009, we recorded a non-cash impairment charge of $107.0 million related to our goodwill. Of this amount, $100.0 million was associated with U.S. Rental operations and $7.0 million was related to Direct Sales operations. The goodwill impairment charges described above are recorded on the “Goodwill and other impairment charges” line of the Consolidated Statements of Operations.

The carrying value of goodwill is reviewed annually in our fourth quarter for possible impairment or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill may be impaired. During our annual test in the fourth quarter, we use a market valuation approach to determine fair value for each reporting unit.

In the third quarter of fiscal year 2009, the accelerated deterioration in the economic environment continued to negatively impact our operations. The resultant increased disparity between our carrying value and our market capitalization as of our interim measurement date of January 31, 2009 prompted us to perform an interim goodwill impairment test. Goodwill has been assigned to reporting units for purposes of impairment testing and consists of U.S. Rental operations, Canadian Rental operations and Direct Sales operations. The goodwill impairment test involves a two-step process. The first step is a comparison of each reporting unit’s fair value to its carrying value. During the third quarter of fiscal year 2009, we engaged a third party independent valuation consulting firm to assist in determining the fair value of each reporting unit. Based on consultation with our valuation specialist, we used both a market valuation and income valuation approach, weighted evenly, to determine the fair values of our reporting units. The income valuation was derived by discounting future forecasted cash flows using a market based weighted average cost of capital. The market valuation was derived by referencing a measure of invested capital compared to earnings and cash flows of a peer group of companies and applying the resultant multiples to our reporting units. The combination of these valuations produced an estimated fair value that was less than the carrying amount for the U.S. Rental and Direct Sales reporting units. The fair value of our Canadian Rental reporting unit exceeded its carrying amount by more than 20%. Since the carrying value of the U.S. reporting unit and the Direct Sales reporting unit exceeded its estimated fair value in the first step, a second step was performed, in which the reporting unit’s goodwill was written down to its implied fair value. In the second step, we are required to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets. The second step also requires, among other things, us to determine the estimated fair market value of our tangible and intangible assets. Any fair value in excess of amounts allocated to such net assets represents the implied fair value of goodwill for that reporting unit.

The goodwill impairment testing process is subject to inherent uncertainties and subjectivity. The fiscal year 2009 determination of the fair value required significant management judgment with respect to various assumptions, including revenue volume, gross margins, selling, general and administrative (SG&A) expense rates, capital expenditures, discount rates, terminal growth rates and the fair values of each reporting unit’s tangible and intangible assets and liabilities. The projected revenue levels, gross margins, SG&A rate, and capital expenditure assumptions in fiscal year 2009 were based on the annual business plan or other forecasted results. Discount rates reflected our estimate of a market-based weighted average cost of capital, which took into consideration the risks associated with the projected cash flows that resulted directly from the use of those assets in operations. The estimated fair value of each reporting unit was based on the best information available as of the date of our assessment in fiscal year 2009. The use of different assumptions would have increased or decreased the estimated fair value and could have materially increased or decreased the impairment charge. The discount rates that were used in step one and step two ranged from 9.7%-11.7% and included certain risk premiums. Our forecasted future cash flows considered both current and future economic conditions and a terminal growth rate of 2.5%-3.0%. If we had changed the discount rate by 50 basis points, we would have increased or decreased the calculated fair values of the U.S. Rental, Canadian Rental and Direct Sales reporting units by approximately $45 million, $10 million and $1 million, respectively. If the terminal growth rate

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had changed by 50 basis points, it would have increased or decreased the calculated fair values of the U.S. Rental, Canadian Rental and Direct Sales reporting units by approximately $25 million, $5 million and $0, respectively. If the fair values of the net assets of the impaired reporting units had increased or decreased by 5% compared to the values that were used in the preparation of the June 27, 2009 financial statements, the goodwill impairment charge would have increased or decreased related to the U.S. Rental and Direct Sales reporting units by approximately $20 million and $0, respectively.

As of July 3, 2010, the date of our most recent impairment test, the fair value exceeded the carrying value of our goodwill related to both our U.S. reporting unit and Canadian reporting unit by over 10%. All goodwill associated with our Direct Sales reporting unit had been previously written off.

Long-Lived Assets

Asset impairment charges in fiscal 2009 include $7.2 million related to properties held and used, $1.4 million related to properties held for sale, $7.6 million related to computer software and $3.5 million related to customer contracts associated with our Direct Sales reporting unit.

Long-lived assets held for use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In the third quarter of fiscal year 2009, as a result of the continued and accelerated deterioration in the economic environment and expectations regarding future operating performance, management took a series of actions to increase profitability and productivity. Due to a combination of these factors and actions, we determined that the carrying value of certain assets held and used exceeded their fair value. Determination of the recoverability of long-lived assets is based on an estimate of undiscounted future cash flows resulting from the use of those assets in operation. Measurement of an impairment loss for long-lived assets that we expect to hold and use is based on the fair value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value. As a result of our projected undiscounted future cash flows related to certain locations being less than the carrying value of those assets, an impairment charge of $7.2 million was required. The fair values of these asset groups were determined based on prices of similar assets.

In fiscal 2009, we made the decision to close and sell certain under-performing production facilities. In connection with this decision and the plan to dispose of these asset groups, we recorded an impairment charge of $1.4 million. The fair values of the asset groups to be disposed of were determined based on prices of similar assets.

In the third quarter of fiscal year 2009, due to the continued and accelerated deterioration in the economic environment and expectations regarding future operating performance, we tested our Direct Sales reporting unit’s long-lived assets for impairment. It was determined that the carrying value of certain computer software and customer contracts exceeded their associated fair values by approximately $7.6 million and $3.5 million, respectively. The estimated fair values were determined based on discounted future cash flows.

In fiscal year 2010, we reviewed our long-lived assets for impairment and determined that no indicators of impairment were present, therefore no impairment charge was recorded in fiscal year 2010.

4. Goodwill and Intangible Assets

Goodwill includes the following:

	United States			Canada			Total
Balance as of June 28, 2008	$	367.5		$	67.4		$	434.9
Impairment charges		(107.0	)		—			(107.0	)
Foreign currency translation and other		(0.3	)		(7.7	)		(8.0	)
Balance as of June 27, 2009		260.2			59.7			319.9
Acquisitions, net of purchase accounting adjustments		0.2			—			0.2
Divestitures		(0.5	)		(1.0	)		(1.5	)
Foreign currency translation and other		(0.2	)		4.7			4.5
Balance as of July 3, 2010	$	259.7		$	63.4		$	323.1

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Our intangible assets, which are included in “Other assets” on the Consolidated Balance Sheet, are as follows:

	July 3, 2010			June 27, 2009
Customer contracts	$	114.0		$	113.8
Accumulated amortization		(91.7	)		(85.0	)
Net	$	22.3		$	28.8
Non-competition agreements	$	11.1		$	11.0
Accumulated amortization		(10.8	)		(10.3	)
Net	$	0.3		$	0.7

The customer contracts include the combined value of the written service agreements and the related customer relationship. Intangible assets are amortized over a weighted average life of approximately 11 years.

Amortization expense was $6.2 million, $7.2 million and $11.1 million for fiscal 2010, 2009 and 2008, respectively. Estimated amortization expense for each of the next five fiscal years based on the intangible assets as of July 3, 2010 is as follows:

2011	$	5.8
2012		5.2
2013		4.1
2014		2.9
2015		2.0

5. Long-Term Debt

Debt as of July 3, 2010 and June 27, 2009 includes the following:

	2010			2009
Borrowings under unsecured revolving credit facility	$	64.5		$	142.0
Borrowings under unsecured variable rate notes		75.0			75.0
Borrowings under secured variable rate loans		20.0			—
Borrowings under unsecured fixed rate notes		—			14.3
Other debt arrangements including capital leases		1.9			1.2
		161.4			232.5
Less current maturities		(1.0	)		(7.7	)
Total long-term debt	$	160.4		$	224.8

On July 1, 2009, we completed a new $300.0 million, three-year unsecured revolving credit facility with a syndicate of banks, which expires on July 1, 2012. This facility replaced our $325.0 million unsecured revolving credit facility, which was scheduled to mature in August 2010. Borrowings in U.S. dollars under the new credit facility will, at our election, bear interest at (a) the adjusted London Interbank Offered Rate (“LIBOR”) for specified interest periods plus a margin, which can range from 2.25% to 3.25%, determined with reference to our consolidated leverage ratio or (b) a floating rate equal to the greatest of (i) JPMorgan’s prime rate, (ii) the federal funds rate plus 0.50% and (iii) the adjusted LIBOR for a one month interest period plus 1.00%, plus, in each case, a margin determined with reference to our consolidated leverage ratio. Swingline loans will, at our election, bear interest at (i) the rate described in clause (b) above or (ii) a rate to be agreed upon by us and JPMorgan. Borrowings in Canadian dollars under the credit facility will bear interest at the greater of (a) the Canadian Prime Rate and (b) the Adjusted LIBOR for a one month interest period on such day (or if such day is not a business day, the immediately preceding business day) plus 1.00%.

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As of July 3, 2010, borrowings outstanding under the revolving credit facility were $64.5 million. The unused portion of the revolver may be used for general corporate purposes, acquisitions, share repurchases, working capital needs and to provide up to $50.0 million in letters of credit. As of July 3, 2010, letters of credit outstanding against the revolver totaled $23.6 million and primarily relate to our property and casualty insurance programs. No amounts have been drawn upon these letters of credit. Availability of credit under this new facility requires that we maintain compliance with certain covenants. In addition, there are certain restricted payment limitations on dividends or other distributions, including share repurchases. The covenants under this agreement are the most restrictive when compared to our other credit facilities. The following table illustrates compliance with regard to the material covenants required by the terms of this facility as of July 3, 2010:

	Required Covenant Amount		Actual Covenant Amount
Maximum Leverage Ratio (Debt/EBITDA)		3.50		1.77
Minimum Interest Coverage Ratio (EBITDA/Interest Expense)		3.00		7.53
Minimum Net Worth	$	315.9	$	466.9

Our maximum leverage ratio and minimum interest coverage ratio covenants are calculated by adding back non-cash charges, as defined in our debt agreement.

Advances outstanding as of July 3, 2010 bear interest at a weighted average all-in rate of 3.03% (LIBOR plus 2.50%) for the Eurocurrency rate loans and an all-in rate of 3.25% (Lender Prime Rate) for overnight Swingline Base Rate loans. We also pay a fee on the unused daily balance of the revolving credit facility based on a leverage ratio calculated on a quarterly basis. At July 3, 2010 this fee was 0.3% of the unused daily balance.

We have $75.0 million of variable rate unsecured private placement notes. The notes bear interest at 0.60% over LIBOR and are scheduled to mature on June 30, 2015. The notes do not require principal payments until maturity. Interest payments are reset and paid on a quarterly basis. As of July 3, 2010, the outstanding balance of the notes was $75.0 million at an all-in rate of 1.13% (LIBOR plus 0.60%).

We maintain an accounts receivable securitization facility, whereby the lender will make loans to us on a revolving basis. The original amount of credit available to us under this facility was $50.0 million. Effective July 1, 2010, we voluntarily reduced the loan agreement’s facility limit to $40.0 million. All of the terms of the facility agreement remain unchanged. The amount of funds available under the loan agreement as of July 3, 2010 was $37.9 million, which was the amount of eligible receivables as of the prior month end less a calculated reserve requirement. The agreement will expire on September 26, 2012.

We are required to pay interest on outstanding loan balances at an annual rate of one month LIBOR plus a margin or, if the lender is funding the loan through the issuance of commercial paper to third parties, at an annual rate equal to the commercial paper rate plus a margin. In connection with the loan agreement, we granted a first priority security interest in certain of our U.S.-based receivables. As of July 3, 2010, there was $20.0 million outstanding under this loan agreement at an all-in interest rate of 1.49% (commercial paper plus 1.10%). We are also required to pay a fee on the unused balance of the facility.

We had $50.0 million, 8.4% unsecured fixed rate private placement notes with certain institutional investors. The 10-year notes had a nine-year average life with a final maturity on July 20, 2010. Beginning on July 20, 2004, and annually thereafter, we repaid $7.1 million of the principal amount at par. On January 20, 2010, we repaid these notes prior to their original maturity date and incurred additional costs associated with the prepayment of approximately $0.3 million which is included in the “Selling and administrative” line of the Consolidated Statements of Operations for fiscal year 2010.

See Note 7 of the Consolidated Financial Statements for details of our interest rate swap and hedging activities related to our outstanding debt.

The credit facilities, loan agreements, fixed rate notes and variable rate notes contain various restrictive covenants that among other matters require us to maintain a minimum stockholders’ equity and a maximum leverage ratio. These debt arrangements also contain customary representations, warranties, covenants and indemnifications. At July 3, 2010, we were in compliance with all debt covenants.

The fair value of our long-term debt is based on the amount that would be paid to transfer the liability to a credit-equivalent market participant at the measurement date. The fair value of the long-term debt under the unsecured revolving credit facility,

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unsecured variable rate notes and secured variable rate loans approximates their carrying value as of July 3, 2010 and June 27, 2009. The fair value of the unsecured fixed rate notes was zero and $14.7 million as of July 3, 2010 and June 27, 2009, respectively.

The following table summarizes payments due on long-term debt, including capital leases, as of July 3, 2010 for the next five fiscal years and thereafter:

2011	$	1.0
2012		65.2
2013		20.2
2014		—
2015 and thereafter		75.0

6. Fair Value Measurements

Generally accepted accounting principles (GAAP) defines fair value, establishes a framework for measuring fair value and establishes disclosure requirements about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We considered non-performance risk when determining fair value of our derivative financial instruments. The fair value hierarchy prescribed under GAAP contains three levels as follows:

Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

-  Quoted prices for similar assets or liabilities in active markets;
- -  Quoted prices for identical or similar assets in non-active markets;
- -  Inputs other than quoted prices that are observable for the asset or liability; and
- -  Inputs that are derived principally from or corroborated by other observable market data.

Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

We have not transferred any amounts between fair value levels during fiscal year 2010. In addition, to value our level 2 assets and liabilities, we obtained information from independent third parties for similar assets and liabilities in active markets.

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of July 3, 2010 and June 27, 2009:

	As of July 3, 2010
	Fair Value Measurements Using Inputs Considered as
	Level 1		Level 2		Total
Other current assets:
Derivative financial instruments	$	—	$	—	$	—
Other assets:
Non-qualified, non-contributory retirement plan assets		—		9.6		9.6
Non-qualified deferred compensation plan assets		16.9		—		16.9
Total assets	$	16.9	$	9.6	$	26.5
Accrued expenses:
Derivative financial instruments	$	—	$	5.2	$	5.2
Total liabilities	$	—	$	5.2	$	5.2

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	As of June 27, 2009
	Fair Value Measurements Using Inputs Considered as
	Level 1		Level 2		Total
Other current assets:
Derivative financial instruments	$	—	$	0.3	$	0.3
Other assets:
Non-qualified, non-contributory retirement plan assets		0.5		8.9		9.4
Non-qualified deferred compensation plan assets		15.5		—		15.5
Total assets	$	16.0	$	9.2	$	25.2
Accrued expenses:
Derivative financial instruments	$	—	$	9.5	$	9.5
Total liabilities	$	—	$	9.5	$	9.5

The fair value of cash, trade receivables and borrowings under the various credit agreements approximates the amounts recorded. We do not have any level 3 assets or liabilities.

7. Derivative Financial Instruments

We use interest rate swap contracts to limit exposure to changes in interest rates and balance the total debt that is subject to variable and fixed interest rates. The interest rate swap contracts we utilize effectively modify our exposure to interest rate risk by converting variable rate debt to a fixed rate without an exchange of the underlying principal amount. Approximately 81% of our outstanding variable rate debt had its interest payments modified using interest rate swap contracts at July 3, 2010.

In addition, we purchase fuel commodity futures contracts to limit exposure to energy prices and effectively hedge a portion of our anticipated gasoline and diesel fuel purchases. The objective of these hedges is to reduce the variability of cash flows associated with the forecasted purchases of those commodities without an exchange of the underlying commodity. Approximately 13% of our anticipated gasoline and diesel fuel purchases for the next twelve months are hedged using futures contracts at July 3, 2010.

We do not engage in speculative transactions or fair value hedging nor do we hold or issue financial instruments for trading purposes.

The following tables summarize the classification and fair value of the interest rate swap agreements and fuel commodity futures contracts, which have been designated as cash flow hedging instruments:

		Asset Derivatives Fair Value
Relationship:	Balance Sheet Classification:	July 3, 2010		June 27, 2009
Interest rate swap contracts	Other current assets	$	—	$	—
Fuel commodity futures contracts	Other current assets		—		0.3
Total derivatives designated as cash flow hedging instruments		$	—	$	0.3

		Liability Derivatives Fair Value
Relationship:	Balance Sheet Classification:	July 3, 2010		June 27, 2009
Interest rate swap contracts	Other accrued expenses	$	5.0	$	9.3
Fuel commodity futures contracts	Other accrued expenses		0.2		0.2
Total derivatives designated as cash flow hedging instruments		$	5.2	$	9.5

For our interest rate swap contracts that qualify for cash flow hedge designation, the related gains or losses on the contracts are deferred as a component of accumulated other comprehensive income or loss (net of related income taxes) until the interest expense on the related debt is recognized. As the interest expense on the hedged debt is recognized, the other comprehensive income or loss is reclassified to interest expense. Of the $3.7 million net loss deferred in accumulated other comprehensive income as of July 3, 2010, a $2.4 million loss is expected to be reclassified to interest expense in the next twelve months.

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As of July 3, 2010, we had interest rate swap contracts to pay fixed rates of interest and to receive variable rates of interest based on three-month London Interbank Offered Rate (“LIBOR”) on $105.0 million notional amount, of which, $20.0 million are forward starting interest rate swap contracts. Of the $105.0 notional amount, $30.0 million matures in the next 12 months, $50.0 million matures in 13-24 months and $25.0 million matures in 25-36 months. The average rate on the $105.0 million of interest rate swap contracts was 4.1% as of July 3, 2010. These interest rate swap contracts are highly effective cash flow hedges and accordingly, gains or losses on any ineffectiveness were not material to any period.

As our fuel commodity futures contracts qualify for cash flow hedge designation, the related gains or losses on these contracts are deferred as a component of other comprehensive income or loss (net of related income taxes) until the expense is recognized on the hedged commodity. Upon purchase of the hedged commodity, the other comprehensive income or loss is reclassified to “Cost of rental operations” line item in the Consolidated Statements of Operations. The $0.1 million loss deferred in other comprehensive income as of July 3, 2010 is expected to be reclassified to cost of rental operations in the next twelve months.

As of July 3, 2010, we had fuel commodity futures contracts to pay fixed prices of unleaded gasoline and diesel fuel and receive variable prices based on the Department of Energy (DOE) index on 0.6 million gallons, all of which will occur in the next twelve months. The weighted average fixed price on the 0.6 million gallons of fuel commodity futures contracts was $3.06 per gallon as of July 3, 2010. These commodity contracts have been designated as highly effective cash flow hedges and accordingly, gains or losses on any ineffectiveness was not material to any period.

The following tables summarize the amount of gain or loss recognized in accumulated other comprehensive income or loss and the classification and amount of gains or losses reclassified from accumulated other comprehensive income or loss into the Consolidated Statements of Operations for fiscal years 2010, 2009 and 2008 related to derivative financial instruments used in cash flow hedging relationships:

	Amount of Gain or (Loss) Recognized in Accumulated
	Other Comprehensive Income (Loss)
	For the Fiscal Years
Relationship:	2010			2009			2008
Interest rate swap contracts	$	(2.3	)	$	(6.4	)	$	(1.8	)
Fuel commodity futures contracts		(0.2	)		(1.9	)		1.9
Total derivatives designated as cash flow hedging instruments	$	(2.5	)	$	(8.3	)	$	0.1

		Amount of Gain or (Loss)
		Reclassified From Accumulated
		Other Comprehensive Income
		(Loss) to Consolidated
		Statements of Operations
		For the Fiscal Years
Relationship:	Statement of Operations Classification:	2010			2009			2008
Interest rate swap contracts	Interest expense	$	(3.6	)	$	(2.2	)	$	—
Interest rate swap contracts	Selling and Administrative		(0.1	)		—			—
Fuel commodity futures contracts	Cost of rental operations		—			(0.8	)		0.8
Total derivatives designated as cash flow hedging instruments		$	(3.7	)	$	(3.0	)	$	0.8

The following table summarizes the amount of gain or loss recognized in the Consolidated Statements of Operations for fiscal years 2010, 2009 and 2008 related to derivative financial instruments not designated as hedging instruments.

		Amount of Gain or (Loss) Recognized
		in Consolidated Statements of Operations
		For the Fiscal Years
Relationship:	Statement of Operations Classification:	2010			2009		2008
Interest rate swap contracts	Selling and Administrative	$	(0.3	)	$	—	$	—

8. Exit, Disposal and Related Activities

We continuously monitor our operations and related cost structure to ensure that our resource levels are appropriate and from time to time take various actions to ensure that these resources are utilized in the most efficient manner. These actions may

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consist of facility closures, divestitures, expansions and increases or decreases in staffing levels. During fiscal 2009 and 2010, we took a number of actions to adjust our business operations as a result of the changes in the economic environment. The most significant of these actions are discussed below.

In the first quarter of fiscal year 2009, we closed three processing plants, two branch locations, reduced selected headcount and outsourced our fleet maintenance function. As a result of these actions, we recorded approximately $2.6 million of expense in the Consolidated Statements of Operations during the quarter. These charges principally impacted our United States operating segment. Of these amounts, approximately $1.0 million was recorded in the “Cost of rental operations” line item and the remaining $1.6 million was recorded in the “Selling and administrative” line item. All severance associated with this action has been paid.

In the third quarter of fiscal year 2009, we restructured our workforce to better align our cost structure with our revenue levels. As a result of this action, we recorded approximately $0.9 million in severance costs in the Consolidated Statements of Operations. These charges impacted both our United States and Canadian operating segments and did not significantly impact any one line item on our Consolidated Statements of Operations. Substantially all severance costs related to these actions have been paid.

During the first quarter of fiscal year 2010, we continued to align our workforce and cost structure to better match our revenue levels. As a result, we reduced selected administrative, regional and corporate headcount, divested an unprofitable operation and recorded approximately $1.4 million in associated severance costs in the “Selling and administrative” line item. Of the $1.4 million in severance, $1.3 million was paid by July 3, 2010, with the remaining $0.1 million to be paid by October 31, 2010. These actions primarily impacted our United States operating segment.

In the second quarter of fiscal year 2010, we sold all of the customer lists and certain assets related to our U.S. Cleanroom operations. In addition, we disposed of a non-core linen operation at one of our production facilities. As a result of these transactions, including the associated asset impairment charges, we recognized a net gain of $1.2 million in the “Selling and administrative” line in the Consolidated Statements of Operations.

In the third quarter of fiscal year 2010, we sold a portion of the customer list and certain assets related to a non-core linen operation and refined our estimates related to the disposition of our Cleanroom operations. As a result of these transactions, including the associated impairment charges, we recognized a net gain of $2.5 million in the “Selling and administrative” line in the Consolidated Statements of Operations.

9. Comprehensive Income

The components of comprehensive income for fiscal years 2010, 2009 and 2008 are as follows:

	For the Fiscal Years
	2010			2009			2008
Net income/(loss)	$	28.6		$	(72.5	)	$	46.1
Other comprehensive income/(loss)
Foreign currency translation adjustments		9.2			(18.7	)		7.4
Pension benefit liabilities, net of tax $(5.4) million, $(5.4) million and $0.1 million, respectively		(8.4	)		(8.7	)		0.1
Derivative financial instruments gain or (loss) recognized, net of tax $(1.5) million, $(5.0) million and $0.1 million, respectively		(2.5	)		(8.3	)		0.1
Derivative financial instruments gain or (loss) reclassified, net of tax $2.3 million, $1.8 million and $(0.5) million, respectively		3.7			3.0			(0.8	)
Total other comprehensive income/(loss)		2.0			(32.7	)		6.8
Total comprehensive income/(loss)	$	30.6		$	(105.2	)	$	52.9

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The components of accumulated other comprehensive income, net of tax, are as follows:

	For the Fiscal Years
	2010			2009			2008
Foreign currency translation	$	25.2		$	16.0		$	34.7
Pension benefit liabilities		(16.8	)		(8.4	)		0.3
Derivative financial instruments		(3.8	)		(5.0	)		0.3
Accumulated other comprehensive income	$	4.6		$	2.6		$	35.3

10. Stockholders’ Equity

We issue Class A shares of our stock, and each share is entitled to one vote and is freely transferable.

In the fourth quarter of fiscal 2008, our Board of Directors authorized the expansion of our share repurchase program from $100.0 million to $175.0 million, which increases the share repurchase program previously approved by our Board of Directors in the fourth quarter of fiscal 2007. We may repurchase shares from time to time in the open market, privately negotiated or other transactions in accordance with applicable federal securities laws. The timing and the amount of the repurchases will be determined by us based on our evaluation of market conditions, share price and other factors. Under the program we did not repurchase any shares in fiscal 2010. In fiscal 2009, we repurchased 650,387 shares for $16.1 million, and in fiscal 2008, we repurchased 2,469,682 shares for $92.1 million. Cash spent on the repurchase of shares totaled $16.1 million during fiscal 2009 and $93.1 million during fiscal 2008. The amount of cash expended for fiscal 2008 includes $1.0 million for shares purchased on June 29, 2007, but due to timing, the $1.0 million cash payment was made on July 2, 2007. At the end of fiscal 2010, we had approximately $57.9 million remaining under this authorization.

We issue restricted stock units as part of our equity incentive plans. For the majority of the restricted stock units granted, the number of shares issued on the vesting date is net of the minimum statutory tax withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. Although shares withheld are not issued, they are treated as common stock repurchases in our financial statements, as they reduce the number of shares that would have been issued upon vesting.

Share-Based Payment Plans

On November 16, 2006, our shareholders approved the 2006 Equity Incentive Plan (the “2006 plan”). Under the 2006 plan, a maximum of 2,000,000 equity awards can be granted. Only 667,000 of the awards granted under the 2006 plan can be stock appreciation rights, restricted stock, restricted stock units, deferred stock units or stock. As of July 3, 2010, 541,196 equity awards were available for grant. The only plan available to grant equity compensation as of July 3, 2010, is the 2006 plan. Shares that were available but not granted under all previous plans have been deauthorized, and therefore, no additional shares remain available for grant.

The 2006 plan provides for certain stock awards, including stock options at fair market value and non-vested restricted shares, to our key employees and non-employee directors. Exercise periods for the stock options are generally limited to a maximum of 10 years and a minimum of one year. Stock options issued to employees generally vest over three years while restricted stock grants to employees generally vest over five years.

Compensation cost for share-based compensation plans is recognized on a straight-line basis over the requisite service period of the award (or to an employee’s eligible retirement date, if earlier). The amount of compensation cost that has been recognized in the Consolidated Statements of Operations was $4.5 million, $7.1 million, and $5.9 million for fiscal years 2010, 2009 and 2008, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $1.5 million, $2.7 million and $2.2 million for fiscal years 2010, 2009 and 2008, respectively. No amount of share-based compensation expense was capitalized during the periods presented.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model using the assumptions noted in the following table. Expected volatility is based on the historic volatility of our stock. We use historical data to estimate option exercises and employee terminations within the valuation model. The expected term of the options granted is derived from historical data and represents the period of time that options granted are expected to be

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outstanding. The risk free interest rate for each option is the interpolated market yield on a U.S. Treasury bill with a term comparable to the expected option term of the granted stock option.

	For the Fiscal Years
	2010			2009			2008
Expected share price volatility		21.34% - 23.12	%		20.8% - 31.2	%		19.5% - 23.5	%
Weighted average volatility		21.67	%		23.2	%		22.5	%
Expected annual dividend per share	$	0.30		$	0.28		$	0.20
Expected term (in years)		5-6			5-6			5-6
Risk free rate		1.95% - 3.01	%		1.5% - 3.3	%		2.5% - 4.4	%

A summary of stock option activity under our plans as of July 3, 2010, and changes during the year then ended is presented below:

						Weighted Average
						Remaining
				Weighted Average		Contractual Term		Aggregate Intrinsic
	Shares			Exercise Prices		(in years)		Value
Outstanding at June 27, 2009		1,804,718		$	35.50
Granted		172,886			22.79
Exercised		(15,634	)		24.89
Forfeited or expired		(480,893	)		35.44
Outstanding at July 3, 2010		1,481,077		$	34.13		5.84	$	0.0
Exercisable at July 3, 2010		1,018,296		$	35.29		5.07	$	0.0

The weighted-average fair value of stock options on the date of grant during the fiscal years ended 2010, 2009 and 2008 was $4.82, $7.69 and $10.64, respectively. The total intrinsic value of stock options exercised was less than $0.1 million for fiscal years 2010 and 2009 and $0.8 million for fiscal year 2008. As of July 3, 2010, there was $1.6 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our stock option plan.

We received total cash as a result of the exercise of stock options in fiscal years 2010, 2009 and 2008 of $0.3 million, $0.2 million and $4.2 million, respectively.

A summary of the status of our non-vested shares of restricted stock as of July 3, 2010 and changes during the year ended July 3, 2010, is presented below:

				Weighted-Average
	Shares			Grant-Date Fair Value
Non-vested at June 27, 2009		269,803		$	35.44
Granted		116,065			22.30
Vested		(67,543	)		36.68
Forfeited		(44,238	)		33.13
Non-vested at July 3, 2010		274,087		$	30.09

As of July 3, 2010, there was $6.1 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under our restricted stock plan. That expense is expected to be recognized over a weighted-average period of 3.5 years. The total fair value of shares vested during the fiscal years ended 2010, 2009 and 2008 was $2.5 million, $3.1 million and $1.7 million, respectively.

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11. Income Taxes

The components of the provision/(benefit) for income taxes are as follows:

Fiscal Years	2010		2009			2008
Current:
Federal	$	5.2	$	8.3		$	10.2
State and local		1.5		1.6			2.7
Foreign		5.2		6.4			9.5
		11.9		16.3			22.4
Deferred		5.3		(33.9	)		6.5
Provision/(Benefit) for Income Taxes	$	17.2	$	(17.6	)	$	28.9

The following table reconciles the United States statutory income tax rate with our effective income tax rate:

Fiscal Years	2010			2009			2008
| | |
United States statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal tax benefit		2.3	%		0.9	%		1.9	%
Foreign earnings taxed at different rates		(3.8	%)		1.9	%		(0.5	%)
Change in tax contingency reserve		0.6	%		0.6	%		0.9	%
Goodwill impairment		—			(15.8	%)		—
Non-deductible fines and penalties		—			(1.8	%)		—
Share-based compensation		2.9	%		(1.4	%)		0.2	%
Permanent differences and other, net		0.5	%		0.1	%		1.0	%
Effective income tax rate		37.5	%		19.5	%		38.5	%

The change in the tax contingency reserve in 2010 and 2008 was the result of the expiration of certain statutes offset by reserve additions during the year. The change in the tax contingency reserve in 2009 was the result of the expiration of certain statutes and the favorable resolution of other tax matters. The negative 15.8% impact on the effective tax rate in 2009 is due to the impact of the non-deductible goodwill impairment charges recorded in fiscal year 2009.

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows:

	2010			2009
Deferred tax liabilities:
Inventory	$	(17.5	)	$	(16.9	)
Depreciation		(8.9	)		(12.5	)
Intangibles		(25.0	)		(18.5	)
Total deferred tax liabilities		(51.4	)		(47.9	)
Deferred tax assets:
Accruals and reserves		43.1			40.5
Share-based payments		5.0			6.5
Derivative financial instruments		2.4			3.0
Other		1.4			1.1
Gross deferred tax assets		51.9			51.1
Less valuation allowance		(0.4	)		—
Total deferred tax assets		51.5			51.1
Net deferred tax assets	$	0.1		$	3.2

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Net deferred tax assets and liabilities are presented in the Consolidated Balance Sheet separately for each major tax jurisdiction. The net deferred tax assets and liabilities are presented in the Consolidated Balance Sheet as follows:

	2010		2009
Deferred tax assets:
Other current assets	$	2.0	$	4.1
Other, principally retirement plan assets		2.9		4.4
Net deferred tax assets		4.9		8.5
Deferred tax liabilities:
Deferred income taxes, current		3.6		3.4
Deferred income taxes, noncurrent		1.2		1.9
Net deferred tax liabilities		4.8		5.3
Net deferred tax assets	$	0.1	$	3.2

We recognize a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. During the fiscal year ended July 3, 2010, we established a $0.4 million valuation allowance for deferred tax assets related to foreign net operating loss carry-forwards, which totaled $2.8 million.

We have no foreign tax credit carry-forwards as of July 3, 2010.

We have not provided U.S. income taxes and foreign withholding taxes on undistributed earnings from our foreign subsidiaries of approximately $59.1 million as of both July 3, 2010 and June 27, 2009. These earnings are considered to be indefinitely reinvested in the operations of such subsidiaries.

We continue to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. Net tax-related interest and penalties were immaterial for the years reported. As of July 3, 2010 and June 27, 2009, we had $1.8 million and $2.1 million, respectively, of accrued interest and penalties related to uncertain tax positions, of which $1.2 million and $1.2 million would favorably affect our effective tax rate in any future periods, if recognized.

We file income tax returns in the United States, Canada and multiple state jurisdictions. We have substantially concluded on all U.S. Federal and Canadian income tax examinations through fiscal years 2006 and 2005, respectively. With few exceptions, we are no longer subject to state and local income tax examinations prior to fiscal year 2006.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Fiscal Year 2010			Fiscal Year 2009
Beginning balance	$	14.3		$	15.4
Tax positions related to current year:
Gross increase		2.0			2.9
Gross decrease		—			—
Tax positions related to prior years:
Gross increase		0.8			0.5
Gross decrease		(0.1	)		(0.4	)
Settlements		—			(0.9	)
Lapses in statutes of limitations		(4.2	)		(3.2	)
Ending balance	$	12.8		$	14.3

As of July 3, 2010 and June 27, 2009, the total amount of unrecognized tax benefits was $12.8 million and $14.3 million, respectively, of which $4.5 million and $4.0 million would favorably affect the effective tax rate, if recognized. We are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next 12 months.

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12. Employee Benefit Plans

Pension Plan and Supplemental Executive Retirement Plan

We have a noncontributory defined benefit pension plan (the “Pension Plan”) covering substantially all employees, except certain employees who are covered by union-administered plans. Benefits are based on the number of years of service and each employee’s compensation near retirement. We make annual contributions to the Pension Plan consistent with federal funding requirements.

Annual benefits under the Supplemental Executive Retirement Plan (“SERP”) are based on years of service and individual compensation near retirement. We have purchased life insurance contracts and other investments that could be used to fund the retirement benefits under this plan. The value of these insurance contracts and investments as of July 3, 2010 and June 27, 2009 were $9.6 million and $9.4 million, respectively.

We froze our Pension Plan and SERP effective January 1, 2007. Future growth in benefits has not occurred beyond December 31, 2006.

Applicable accounting standards require that the Consolidated Balance Sheet reflect the funded status of the pension and postretirement plans. The funded status of the plan is measured as the difference between the plan assets at fair value and the projected benefit obligation. We have recognized the aggregate of all under-funded plans within other noncurrent liabilities. The portion of the amount by which the actuarial present value of benefits included in the projected benefit obligation exceeds the fair value of plan assets, payable in the next 12 months, is reflected in accrued liabilities. The measurement date of the plan assets coincides with our fiscal year end. The fair value of the plan assets is determined by reference to unadjusted quoted market prices that are available in active markets for the identical assets at the measurement date.

Unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in “Accumulated other comprehensive income” in our Consolidated Balance Sheet. The difference between actual amounts and estimates based on actuarial assumptions will be recognized in other comprehensive income in the period in which they occur.

The estimated amortization from accumulated other comprehensive income into net periodic benefit cost during fiscal year 2011 is $2.0 million which is related primarily to net actuarial losses.

Obligations and Funded Status at July 3, 2010 and June 27, 2009

	Pension Plan						SERP
	2010			2009			2010			2009
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	52.3		$	47.0		$	10.8		$	10.5
Service cost		—			—			—			—
Interest cost		3.5			3.3			0.7			0.7
Actuarial loss		13.0			3.4			2.3			0.1
Benefits paid		(1.9	)		(1.4	)		(0.5	)		(0.5	)
Projected benefit obligation, end of year	$	66.9		$	52.3		$	13.3		$	10.8
Change in plan assets:
Fair value of plan assets, beginning of year	$	36.9		$	44.2		$	—		$	—
Actual return on plan assets		3.6			(6.9	)		—			—
Employer contributions		1.2			1.0			0.6			0.5
Benefits paid		(1.9	)		(1.4	)		(0.6	)		(0.5	)
Fair value of plan assets, end of year	$	39.8		$	36.9		$	—		$	—
Funded status-net amount recognized	$	(27.1	)	$	(15.4	)	$	(13.3	)	$	(10.8	)

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Amounts recognized in the Consolidated Balance Sheets consist of:

	Pension Plan						SERP
	2010			2009			2010			2009
Accrued benefit liability	$	(27.1	)	$	(15.4	)	$	(13.3	)	$	(10.8	)
Net amount recognized	$	(27.1	)	$	(15.4	)	$	(13.3	)	$	(10.8	)

	Pension Plan				SERP
	2010		2009		2010		2009
Accumulated other comprehensive loss related to:
Unrecognized net actuarial losses	$	11.4	$	13.8	$	2.3	$	0.2

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with an accumulated benefit obligation in excess of plan assets were $66.9 million, $66.9 million and $39.8 million, respectively, as of July 3, 2010 and $52.3 million, $52.3 million and $36.9 million, respectively, as of June 27, 2009. No pension plans had plan assets in excess of accumulated benefit obligations at July 3, 2010 or June 27, 2009.

Components of Net Periodic Benefit Cost

	Pension Plan									SERP
	2010			2009			2008			2010		2009		2008
Service cost	$	—		$	—		$	—		$	—	$	—	$	—
Interest cost		3.5			3.3			3.2			0.7		0.7		0.7
Expected return on assets		(3.0	)		(3.5	)		(3.7	)		—		—		—
Amortization of net loss		1.0			—			—			—		—		—
Net periodic benefit cost (income)	$	1.5		$	(0.2	)	$	(0.5	)	$	0.7	$	0.7	$	0.7

Assumptions

The following weighted average assumptions were used to determine benefit obligations for the plans at July 3, 2010 and June 27, 2009:

	Pension Plan						SERP
	2010			2009			2010			2009
Discount rate		5.60	%		6.90	%		5.50	%		6.90	%
Rate of compensation increase		N/A			N/A			N/A			N/A

The following weighted average assumptions were used to determine net periodic benefit cost for the plans for the years ended July 3, 2010 and June 27, 2009:

	Pension Plan						SERP
	2010			2009			2010			2009
Discount rate		6.90	%		7.20	%		6.90	%		7.05	%
Expected return on plan assets		8.00			8.00			N/A			N/A
Rate of compensation increase		N/A			N/A			N/A			N/A

We have a committee which, assisted by outside consultants, evaluates the objectives and investment policies concerning its long-term investment goals and asset allocation strategies. Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. To develop the expected long-term rate of return on asset assumptions, we consider the historical returns and the future expectations of returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of 7.75% and 8.00% expected return on plan assets for fiscal 2011 and 2010, respectively. As part of our assessment of the expected return on plan assets, we considered the recent decline in the global equity markets and concluded that these rates are appropriate.

Future changes in plan asset returns, assumed discount rates and various other factors related to the participants in our pension plan will impact our future pension expense and liabilities. We cannot predict with certainty what these factors will be in the future.

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Additional Information

The asset allocations in the pension plan at July 3, 2010 and June 27, 2009 are as follows:

	Target Asset			Actual Asset
	Allocations			Allocations
	2010			2010			2009
International equity		8-18	%		10.7	%		12.1	%
Large cap equity		20-40			28.1			29.9
Small cap equity		3-13			7.3			7.4
Absolute Return Strategy Funds		10-20			15.5			16.4
Fixed income		20-30			28.2			34.2
Long/short equity fund		5-15			10.2			—
Total		100	%		100	%		100	%

The asset allocation strategy for 2010 targets 20%-30% in high-quality fixed income instruments with the balance of the portfolio to be invested in a diversified and complimentary portfolio of equity vehicles. The objective is to achieve a long-term rate of return of 7.0%-9.5%. In determining investment options, all classes or categories of investments allowed by the Employee Retirement Income Security Act of 1974 (“ERISA”) are acceptable investment choices. As directed by ERISA, no single investment will comprise more than 10% of assets, except for certain government backed securities.

Pension assets consist primarily of listed common stocks and U.S. government and corporate obligations. We expect to contribute $2.5 million to our pension plan and $0.6 million to the SERP in fiscal year 2011.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension Plan		SERP
2011	$	1.6	$	0.6
2012		1.8		0.7
2013		1.9		0.7
2014		2.0		0.7
2015		2.1		0.7
2016 and thereafter		13.8		3.9

Union Pension Plans

We participate in a number of union sponsored, collectively bargained multi-employer pension plans (“Union Plans”). We contributed $3.1 million, $3.2 million and $2.5 million in fiscal 2010, 2009 and 2008, respectively to such plans. These contributions are determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of hours worked. Several factors could result in potential funding deficiencies which could cause us to make significantly higher future contributions to these plans, including unfavorable investment performance, changes in demographics, and increased benefits to participants. At this time, we are unable to determine the amount of additional contributions, if any.

We are responsible for our proportional share of any unfunded vested benefits related to the Union Plans. Under the applicable accounting rules, we are not required to record a liability for our portion of the withdrawal liability, if any, until we exit from the plan. In fiscal year 2009, we exited from one multi-employer pension plan and recorded a liability of $1.0 million. In fiscal year 2010, local union members at another facility voted to leave their union which resulted in recording a pension liability of $0.8 million. There are two locations that are currently considering whether to leave their union. If the members at these locations vote to decertify their unions, the decertification will result in a partial withdrawal from their Union Plan and we will be required to record an estimated liability up to $1.3 million. If a future withdrawal from a plan occurs, we will record our proportional share of any unfunded vested benefits.

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401(k) Plan

All full-time non-union, U.S. employees are eligible to participate in a 401(k) plan. We match a portion of the employee’s salary reduction contributions and provide investment choices for the employee. The matching contributions under the 401(k) plan made prior to January 1, 2007 vest over a five-year employment period, while matching contributions made after that date vest immediately. We incurred matching contribution expense of $5.5 million in fiscal 2010, $7.0 million in fiscal 2009 and $7.9 million in fiscal 2008.

Executive Deferred Compensation Plan

Under the Executive Deferred Compensation Plan (“DEFCO Plan”), we match a portion of designated employees’ contributions. Our matching contributions under the DEFCO Plan were $1.1 million in fiscal 2010, $1.3 million in fiscal 2009 and $1.5 million in fiscal 2008. The accumulated benefit obligation of $16.3 million as of July 3, 2010 and $14.9 million as of June 27, 2009 is included in “Other noncurrent liabilities” in the accompanying Consolidated Balance Sheets. We have purchased investments, including stable income and stock index managed funds, based on investment elections made by the employees, which may be used to fund the retirement benefits. The investments are recorded at estimated fair value based on quoted market prices and are included in “Other assets” in the accompanying Consolidated Balance Sheets. Offsetting unrealized gains and losses are included in income on a current basis. At July 3, 2010 and June 27, 2009, the estimated fair value of the investments was $16.3 million and $14.9 million, and the cost of the investments was $17.0 million and $17.9 million, respectively.

13. Commitments and Contingencies

We are involved in a variety of legal actions relating to personal injury, employment, environmental and other legal matters arising in the normal course of business, including, without limitation those described below.

Environmental Matters

We are currently involved in several environmental-related proceedings by certain governmental agencies, which relate primarily to allegedly operating certain facilities in noncompliance with required permits. In addition to these proceedings, in the normal course of our business, we are subject to, among other things, periodic inspections by regulatory agencies. We continue to dedicate substantial operational and financial resources to environmental compliance, and we remain fully committed to operating in compliance with all environmental laws and regulations. As of June 27, 2009 and July 3, 2010, we had reserves of approximately $4.6 million and $3.2 million respectively, related to these matters.

Descriptions of certain matters are as follows:

On February 19, 2010, we settled the previously disclosed matter brought against us by the Commissioner of Environmental Protection of the State of Connecticut. The aggregate settlement amount was within previously established reserves.

In August 2008, we became aware that our Des Moines, Iowa facility allegedly violated the facility’s wastewater treatment permit. In addition, we became aware that this facility allegedly did not properly report its wastewater sampling results to the City of Des Moines. We promptly brought this matter to the attention of the City of Des Moines Attorney’s office and the City of Des Moines water reclamation authority. We also immediately launched our own investigation. As part of our investigation, we learned, among other things, that the City of Des Moines’ water reclamation authority was aware of the situation and had referred this matter to the U.S. Environmental Protection Agency (“U.S. EPA”). The U.S. EPA has also referred this matter to the U.S. Attorneys’ office in Des Moines, Iowa. We have reached settlement with the Des Moines Metropolitan Wastewater Reclamation Authority and resolved this matter with the city. We are in the midst of resolving this matter with the U.S. EPA and the U.S. Attorney.

On July 24, 2008, the U.S. EPA inspected our facility in South Chicago, Illinois. As part of its inspections, the U.S. EPA identified certain alleged deficiencies with respect to the operations at this facility, including potential recordkeeping violations and opportunities to improve the overall environmental compliance and permitting of the facility. The U.S. EPA provided written record of its inspection findings to us and identified alleged noncompliance with certain provisions of the Resource Conservation and Recovery Act. The U.S. EPA has subsequently visited this facility. We have responded to the U.S. EPA and will continue to work cooperatively with the U.S. EPA to resolve this matter.

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In the summer and fall of 2008, the U.S. EPA inspected our facility in Manchester, New Hampshire. As part of its inspection, the U.S. EPA identified certain alleged deficiencies with respect to the operations at this facility, including potential recordkeeping violations and opportunities to improve the facility’s overall environmental compliance and permitting. The U.S. EPA requested additional information regarding our Manchester and Portsmouth, New Hampshire facilities to evaluate compliance with the Clean Air Act and applicable state and federal regulations, and the U.S. EPA issued a testing order at the Manchester facility. We have completed the requested testing and submitted a test report to the U.S. EPA and the New Hampshire Department of Environmental Services (“NHDES”). Subsequently, in September 2009, the U.S. EPA issued a Notice of Violation alleging noncompliance with state and federal laws concerning air emissions and permitting. We will continue to work cooperatively with the U.S. EPA to resolve this matter.

While we cannot predict the outcome of these matters with certainty, we currently do not expect any of these matters to have a material adverse effect on our results of operations or financial position. However, while we believe the possibility is remote, there is the potential that we may incur additional losses in excess of established reserves, and these losses could be material.

Leases

We lease certain facilities and equipment for varying periods. Most facility leases contain renewal options from one to five years. Management expects that in the normal course of business, leases will be renewed or replaced by other leases.

The following is a schedule as of July 3, 2010 of future minimum base rental payments for operating leases that had initial or remaining lease terms in excess of one year:

	Operating Leases
2011	$	22.3
2012		17.4
2013		13.9
2014		10.1
2015		7.1
2016 and thereafter		7.5
Total minimum lease payments	$	78.3

Total rent expense for operating leases, including those with terms of less than one year, was $33.1 million in fiscal 2010, $32.1 million in fiscal 2009 and $30.0 million in fiscal 2008.

14. Segment Information

We have two operating segments, United States (includes the Dominican Republic and Ireland Operations) and Canada, which have been identified as components of our organization that are reviewed by our Chief Executive Officer to determine resource allocation and evaluate performance. Each operating segment derives revenues from the branded identity apparel and facility services industry, which includes rental of garments, direct purchase items and non-apparel items such as floor mats, dust mops, wiping towels, selected linen items and restroom products. No single customer’s transactions accounted for more than 2.0% of our total revenues. Substantially all of our customers are in the United States or Canada.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 1). Corporate expenses are allocated to the segments based on segment revenue. We evaluate performance based on income from operations.

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The segment income from operations includes the impact of an intercompany management fee which is self-eliminated in the total income from operations below. The annual intercompany management fee was $8.5 million, $9.5 million and $9.9 million for fiscal years 2010, 2009 and 2008, respectively.

Financial information by segment is as follows:

	United
	States			Canada			Elimination			Total
2010
Revenues	$	688.0		$	145.6		$	—		$	833.6
Income from operations		42.5			17.1			—			59.6
Interest expense		13.8			—			—			13.8
Total assets		758.5			136.1			(80.7	)		813.9
Capital expenditures-net		15.9			0.8			—			16.7
Depreciation and amortization expense		34.5			5.7			—			40.2
Income tax expense		14.6			2.6			—			17.2
2009
Revenues	$	789.4		$	146.6		$	—		$	936.0
Income/(Loss) from operations		(87.1	)		11.1			—			(76.0	)
Interest expense		14.0			—			—			14.0
Total assets		809.7			137.8			(90.2	)		857.3
Capital expenditures-net		20.1			3.2			—			23.3
Depreciation and amortization expense		38.6			5.7			—			44.3
Income tax expense/(benefit)		(21.5	)		3.9			—			(17.6	)
2008
Revenues	$	820.3		$	182.1		$	—		$	1,002.4
Income from operations		64.7			25.8			—			90.5
Interest expense		15.4			0.1			—			15.5
Total assets		983.1			171.2			(101.1	)		1,053.2
Capital expenditures-net		27.2			(0.1	)		—			27.1
Depreciation and amortization expense		41.3			7.1			—			48.4
Income tax expense		20.4			8.5			—			28.9

G&K Services, Inc.
Schedule II — Valuation and Qualifying Accounts and Reserves
(In millions)

			Additions
	Balance at		Charged to Costs		Charged to Other				Balance at
Description	Beginning of Year		and Expenses		Accounts		Deductions		End of Year
Allowance for Doubtful Accounts
July 3, 2010	$	3.8	$	2.5	$	—	$	3.2	$	3.1
June 27, 2009	$	4.5	$	4.1	$	—	$	4.8	$	3.8
June 28, 2008	$	3.4	$	3.6	$	—	$	2.5	$	4.5
Inventory Reserve
July 3, 2010	$	2.3	$	0.4	$	—	$	0.3	$	2.4
June 27, 2009	$	2.2	$	0.8	$	—	$	0.7	$	2.3
June 28, 2008	$	2.3	$	0.7	$	—	$	0.8	$	2.2

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of July 3, 2010. Based on that evaluation, the chief executive officer and the chief financial officer concluded that our disclosure controls and procedures are effective in recording, processing, summarizing and timely reporting information required to be disclosed in the reports that we file or submit under the Exchange Act.

Management’s Annual Report on Internal Control Over Financial Reporting

The report of management required under this Item 9A is contained in Item 8 of this Annual Report on Form 10-K under the caption “Management’s Report on Internal Control Over Financial Reporting.”

Attestation Report of Registered Public Accounting Firm

The attestation report required under this Item 9A is contained in Item 8 of this Annual Report on Form 10-K under the caption “Report of Independent Registered Public Accounting Firm.”

Changes in Internal Controls

There were no changes in our internal control over financial reporting during the fourth quarter of fiscal 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Reference is made to information with respect to our Proxy Statement for the fiscal year 2010 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Reference is made to information with respect to our Proxy Statement for the fiscal year 2010 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Reference is made to information with respect to our Proxy Statement for the fiscal year 2010 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Reference is made to information with respect to our Proxy Statement for the fiscal year 2010 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Reference is made to information with respect to our Proxy Statement for the fiscal year 2010 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Form 10-K.

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PART IV, ITEM 15

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as a part of this report:

(1)	Financial Statements
	The Consolidated Financial Statements of the Registrant are set forth in Item 8 of Part II of this report.
(2)	Financial Statement Schedules
	All schedules for which provision is made in the applicable accounting regulations of the SEC have been omitted as not required or not applicable, or the information has been included elsewhere by reference in the financial statements and related notes.
(3)	Exhibits
	The following exhibits, as required by Item 601 of Regulation S-K are filed as a part of this report:
	3(a) Articles of Amendment and Restatement of the Registrant, as filed with the Secretary of State of Minnesota (incorporated herein by reference to Exhibit 3(i) to the Registrant’s Form 10-Q filed November 13, 2001).
	3(b) Amended and Restated Bylaws of the Registrant (incorporated herein by reference to the Registrant’s Form 10-Q filed February 2, 2007).
	4(a) Rights Agreement, dated as of September 17, 2001, by and between G&K Services, Inc. and Wells Fargo Bank Minnesota, National Association (incorporated by reference to the Registrant’s Form 8-K filing dated September 19, 2001).
	10(a) Amended and Restated 1996 Director Stock Option Plan, as amended March 10, 2004 (incorporated by reference to the Registrant’s definitive proxy statement on Schedule 14A filed on October 12, 2005).**
	10(b) 1998 Stock Option and Compensation Plan, as amended November 7, 2002 (incorporated by reference to the Registrant’s definitive proxy statement on Schedule 14A, exhibit A, filed on September 26, 2002). **
	10(c) Loan Agreement dated June 30, 2005 among G&K Services, Inc. and various institutional investors (incorporated by reference to Registrant’s Form 10-K filed September 15, 2005).
	10(d) Form of Executive Employment Agreement between Registrant and each of Douglas Milroy, Robert Wood, and Jeffrey Wright, dated March 1, 2007 (incorporated herein by reference to the Registrant’s Form 8-K filed March 19, 2007).**
	10(e) 2006 Equity incentive plan (incorporated herein by reference to the Registrant’s Form 10-Q filed February 2, 2007).**
	10(f) Amended and Restated Loan Agreement dated as of October 1, 2008 among G&K Receivables Corp., G&K Services, Inc., Three Pillars Funding LLC and Suntrust Robinson Humphrey, Inc. (incorporated herein by reference to Registrant’s exhibit 10.1 Form 8-K filed on October 6, 2008).
	10(g) Form of Executive Employment Agreement between Registrant and Timothy N. Curran dated October 23, 2008 (incorporated herein by reference to the Registrant’s exhibit 10.1 Form 8-K filed on October 29, 2008).**
	10(h) Form of Amended Executive Employment Agreement between Registrant and each of Timothy N. Curran, Douglas A. Milroy, Robert G. Wood and Jeffrey L. Wright, dated April 10, 2009 (incorporated herein by reference to the Registrant’s exhibit 10 Form 8-K filed April 14, 2009). **
	10(i) Form of Amended Executive Employment Agreement between Registrant and each of Douglas A. Milroy and Jeffrey L. Wright, dated May 7, 2009 (incorporated herein by reference to the Registrant’s exhibit 10 Form 8-K filed May 13, 2009). **
	10(j) Credit Agreement, dated July 1, 2009, by and among the Registrant, G&K Services Canada Inc., JPMorgan Chase Bank, N.A. and various lenders (incorporated herein by reference to the Registrant’s exhibit 10.1 Form 8-K filed July 2, 2009).

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	10(k) First Amendment, dated September 30, 2009, to the Amended and Restated Loan Agreement dated as of October 1, 2008 among G&K Receivables Corp., G&K Services, Inc., Three Pillars Funding LLC and Suntrust Robinson Humphrey, Inc. (incorporated herein by reference to Registrant’s exhibit 10.1 Form 8-K filed October 1, 2009).
	10(l) Voluntary Facility Limit Reduction, dated June 21, 2010, in accordance with the terms of the Amended and Restated Loan Agreement dated as of October 1, 2008 among G&K Receivables Corp., G&K Services, Inc., Three Pillars Funding LLC and Suntrust Robinson Humphrey, Inc. (incorporated herein by reference to Registrant’s exhibit 10.1 Form 8-K filed June 22, 2010).
	10(m) Terms of Non-Qualified Employee Stock Option (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(n) Terms of Non-Qualified Employee Stock Option for Chairman and CEO (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(o) Terms of Non-Qualified Non-Employee Director Stock Option (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(p) Terms of Restricted Stock Grant (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(q) Terms of Restricted Stock Grant with Three Year Cliff Vesting (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(r) Supplemental Executive Retirement Plan, amended and restated generally as of January 1, 2008 (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(s) Executive Deferred Compensation Plan, amended and restated generally as of January 1, 2008 (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
	10(t) Amended and Restated Director’s Deferred Compensation Plan, dated August 25, 2005 (incorporated herein by reference to the Registrant’s Form 10-K filed on August 26, 2010).**
21	Subsidiaries of G&K Services, Inc. *
23	Consent of Independent Registered Public Accounting Firm. *
24	Power of Attorney dated as of August 19, 2010. *
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
Footnotes:
*	Filed herewith
**	Compensatory plan or arrangement

(b) Exhibits

See exhibits listed under Item 15(a)(3).

(c) Financial Statement Schedules

See the financial statement schedules listed under Item 15(a)(2).

65

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 26, 2010	G&K SERVICES, INC. (Registrant)
	By:	/s/ Douglas A. Milroy
		Douglas A. Milroy
		Chief Executive Officer and Director
		(Principal Executive Officer)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K has been signed below on the 26^th day of August, 2010, by the following persons on behalf of the registrant and in the capacities indicated:

/s/ Douglas A. Milroy	Chief Executive Officer (Principal Executive Officer) and Director
Douglas A. Milroy
*	Director
John S. Bronson
*	Director
Lynn Crump-Caine
*	Director
J. Patrick Doyle
*	Director
Wayne M. Fortun
*	Director
Ernest J. Mrozek
*	Chairman of the Board and Director
M. Lenny Pippin
*	Director
Alice M. Richter
/s/ Jeffrey L. Wright	Executive Vice President, Chief Financial Officer and Director
Jeffrey L. Wright
/s/ Thomas J. Dietz	Vice President and Controller
Thomas J. Dietz

*By:	/s/ Douglas A. Milroy
	Douglas A. Milroy
	Attorney-in-fact

67

EX-10.M

EXHIBIT 10(M)

G&K SERVICES, INC.
2006 EQUITY INCENTIVE PLAN

TERMS OF NON-QUALIFIED
EMPLOYEE STOCK OPTION

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 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 the aggregate number of shares of Class A Common Stock of the Company (the “Common Stock”) set forth in the Grant Letter as “G&K Stock Option shares,” 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 in three (3) equal installments, such installments to begin on the first anniversary of the “Grant Date” set forth in the in the Grant Letter and continuing on each of the next two anniversaries thereof (each individually, a “Vesting Date”) until the Option is fully vested. In the event that you cease to be an employee of the Company prior to any Vesting Date, that portion of the Option scheduled to vest on such Vesting Date, and all portions of the Option scheduled to vest in the future, shall not vest and all rights to and under such non-vested portions of the 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)	In the event your employment is terminated for any reason other than death or disability (other than for cause or voluntary on your part and without written consent of the Company), the Option shall be exercisable by you (to the extent that you shall have been entitled to do so at the termination of your employment) at any time within three (3) months after such termination of employment, but in no event later than the Expiration Date. In the event of any termination of your employment that is either (i) for cause or (ii) voluntary on your part and without the written consent of the Company, the Option, to the extent not theretofore exercised, shall forthwith terminate.
(c)	In the event of your death while you are an employee of the Company or any of its subsidiaries or within three (3) months after termination of employment (other than for cause or voluntary on your part and without written consent of the Company), the Option may be exercised (to the extent that you shall have been entitled to do so at the date of death) by the person to whom the Option is transferred by will or the applicable laws of descent and distribution at any time within twelve (12) months after the date of death, but in no event later than the Expiration Date.
(d)	In the event your employment is terminated by the Company as a result of a disability, the Option shall be exercisable by you (to the extent that you shall have been entitled to do so at the termination of your employment) at any time within twelve (12) months after such termination of employment, but in no event later than the Expiration Date. For purposes of this Option, you will be considered to have a “disability” if you have physical, mental or emotional limits caused by a current sickness or injury and, due to these limits, you are not able to perform, on a full-time basis, the major duties of your own job (e.g., if you are required, on average, to work more than 40 hours per week, you will not be considered to have a “disability” if you are able to perform the major duties of your employment for 40 hours per week); you will not be considered to have a disability if you perform any work for wage or profit, and the loss of a professional or occupational license will not, in and of itself, constitute a “disability.”
(e)	In the event your employment is terminated as a result of a qualified retirement from the Company, the Option shall be exercisable by you (to the extent that you shall have been entitled to do so on the date of your retirement) at any time within the three (3) year period following the date of such qualified retirement, but in no event later than the Expiration Date. For purposes of this Option, your retirement from the Company shall be considered a “qualified retirement” if such retirement is voluntary and, at the time of such retirement, you are at least 60 years of age and have been employed by the Company on a continuous basis for a period of at least five years.

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 1-866-4GK-SERV and specifying the number of shares to be purchased and by paying in full the Purchase Price for the number of

2

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. 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.	Reservation of Right to Terminate Employment. Your employment, subject to the provisions of any agreement between you and the Company, shall be at the pleasure of the Board of Directors of the Company or other employing corporation, and nothing contained herein shall restrict any right of the Company or any other employing corporation to terminate your employment at any time, with or without cause.
8.	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.
9.	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.

3

10.	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.
11.	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.
12.	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.
13.	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.

4

EX-10.N

EXHIBIT 10(N)

G&K SERVICES, INC.
2006 EQUITY INCENTIVE PLAN — FOR CHAIRMAN AND CEO

TERMS OF NON-QUALIFIED
EMPLOYEE STOCK OPTION

Pursuant to your Compensation Statement (the “Compensation Statement”) delivered to you from G&K Services, Inc. (the “Company”), the Board of Directors (the “Board”) of 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”), and in accordance with your Executive Employment Agreement dated December 22, 2006 (the “Employment Agreement”). 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 of the Employment Agreement. Your Option grant is subject to the following:

1.	Number of Shares Subject to the Option. After your acknowledgment of the Option, the Option entitles you to purchase all or any part of the aggregate number of shares of Class A Common Stock of the Company (the “Common Stock”) set forth in the Compensation Statement as “G&K Stock Option shares,” in accordance with the Plan and the Employment Agreement. You may acknowledge 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 Compensation Statement.
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 the Employment Agreement , the Option shall vest in three (3) equal installments, such installments to begin on the first anniversary of the “Grant Date” set forth in the in the Compensation Statement and continuing on each of the next two anniversaries thereof (each individually, a “Vesting Date”) until the Option is fully vested. In the event that you cease to be an employee of the Company prior to any Vesting Date, then, except as otherwise specifically provided herein and in the Employment Agreement, that portion of the Option scheduled to vest on such Vesting Date, and all portions of the Option scheduled to vest in the future, shall not vest and all rights to and under such non-vested portions of the Option will terminate.

However, if you (i) shall have reached the age of 59¹/2, (ii) shall have given the Company a written Notice of Termination at least six months in advance of the Date of Termination stated in the Notice, and (iii) thereafter shall retire from your employment with the Company on a Date of Termination that is consistent with such notice, then effective as of that Date of Termination all restrictions on exercise will automatically lapse. The restrictions shall also lapse if you are terminated by the Company without Cause or due

to your Disability. Capitalized terms used in this paragraph that are not defined in this agreement are defined in the Employment Agreement.

4.	Term of Option. To the extent vested, and except as otherwise provided in the Employment Agreement, 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”).
5.	Method of Exercise. Subject to the terms and conditions set forth herein and in the Plan and the Employment Agreement, the Option may be exercised, in whole or in part, by logging into your account at http://www.melloninvestor.com or calling 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. 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.	Administration. The agreement and understanding regarding the Stock shall at all times be subject to the terms and conditions of the Plan and the Employment Agreement. 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 and the Employment Agreement, the provisions of the Plan and the Employment Agreement shall govern and control.
8.	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,

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with or without cause, for any reason or no reason, or to change your assignment or rate of compensation, consistent with the Employment Agreement.

9.	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. 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.
10.	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.
11.	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.
12.	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.
13.	Entire Understanding. The provisions set forth herein and those contained in the Compensation Statement, the Plan, and the Employment Agreement embody the entire agreement and understanding between you and the Company with respect to the matters covered herein, in the Compensation Statement and in the Plan, the Employment Agreement and such provisions may only be modified pursuant to a written agreement signed by the party to be charged.
14.	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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EX-10.O

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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EX-10.P

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

2

	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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EX-10.Q

EXHIBIT 10(Q)

G&K SERVICES, INC.
2006 EQUITY INCENTIVE PLAN

TERMS OF
RESTRICTED STOCK GRANT – THREE YEAR CLIFF VESTING

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 the Company’s Class A Common Stock, $0.50 par value per share (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.

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 One hundred percent (100%) of the restrictions set forth in paragraph 3 above shall lapse on the Stock on the three year anniversary of the “Grant Date” set forth in the Grant Letter.. 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

2

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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EX-10.R

EXHIBIT 10(R)

Prepared By:
Leonard, Street and Deinard/AMB
Professional Association
150 S. Fifth Street #2300
Minneapolis, MN 55402
(612) 335-1500

G & K SERVICES

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(Amended and restated generally as of January 1, 2008)

ii

G & K SERVICES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

TABLE OF CONTENTS

ARTICLE 1 The Plan	1
1.01 Establishment, Amendments and Restatements	1
1.02 Purpose of Plan; Compliance with Code Section 409A	2
1.03 Adoption by Affiliates	2
1.04 Plan Benefits Exempt from Compliance with Code Section 409A	2
1.05 Freezing of Plan	4
ARTICLE 2 Definitions	4
ARTICLE 3 Participation	8
3.01 In General	8
3.02 Participation Conditions	8
3.03 No New Participants After December 31, 2006	8
ARTICLE 4 Amount and time for commencement of Lifetime Benefits	9
4.01 Normal Retirement Benefits	9
4.02 Early Retirement Benefit	9
4.03 Election of Commencement Date for Early Retirement Benefit	10
4.04 Election to Delay Benefits Payable Due to Disability	13
4.05 Form of Payment	13
4.06 Non-Duplication of Benefits; Effect of Re-employment on Benefit Payments	14
4.07 Withholding or Advance Benefit Distribution for FICA Taxes	14
4.08 Six Month Delay of Benefit Payments to Specified Employees	15
4.09 Tax Withholding from Benefit Payments	17
4.10 Delay of Payments for Compliance with Laws or Contractual Obligations	17
4.11 Time of Payment Generally	18
ARTICLE 5 Vesting and Forfeitures	18
5.01 Five-Year Cliff Vesting	18
5.02 Non-Competition	18
ARTICLE 6 Survivorship Benefits	19
6.01 Death Prior to Retirement	19
6.02 After Commencement of Benefits	19
ARTICLE 7 Beneficiary	19
7.01 Recipient of Payments	19
7.02 Beneficiary Designation	19
ARTICLE 8 Form of Payment of Lifetime Benefits	20
8.01 Election of Benefit Form and Permitted Changes	20
8.02 Optional Forms	21
8.03 No Election Made	22
ARTICLE 9 Claims and Review Procedure	22

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9.01 Claims Procedure	22
9.02 Review Procedure	23
9.03 Disability Claim for Benefits	23
9.04 Review of a Denied Disability Claim	24
9.05 Deadline to File Claim	24
9.06 Exhaustion of Administrative Remedies	24
9.07 Deadline to File Legal Action	24
9.08 Committee Discretion; Court Review	24
ARTICLE 10 Administration	25
10.01 Administration	25
10.02 Powers of the Retirement Committee	25
10.03 Actions of the Plan Sponsor and Retirement Committee	25
10.04 Delegation	25
10.05 Reports and Records	25
10.06 Correction of Plan Errors	25
ARTICLE 11 Amendment and Termination	26
11.01 Right to Amend and Terminate	26
11.02 Protection of Participants upon Amendment and Termination	26
11.03 Plan Termination Procedures and Restrictions	26
ARTICLE 12 Miscellaneous	28
12.01 No Guaranty of Employment	28
12.02 Life Insurance and Funding	28
12.03 Non-Alienation	28
12.04 Applicable Laws	29
12.05 Form of Communication	29
12.06 Captions	29
12.07 Severability	29
12.08 Binding Instrument	30
EXHIBIT A-1	31
EXHIBIT A-2	33

ii

G & K SERVICES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(Amended and restated generally as of January 1, 2008)

ARTICLE 1
THE PLAN

     1.01 Establishment, Amendments and Restatements.

     (a) Plan and Plan Sponsor. As of January 1, 1989, G&K Services, Inc. (the “Plan Sponsor”), established for the benefit of certain executive and professional employees, a supplemental retirement benefit plan known as the “G&K Services, Inc. Supplemental Executive Retirement Plan” (as amended, the “Plan”). The Plan remains in effect and is intended as a supplement to the Plan Sponsor’s existing frozen defined benefit pension plan intended to be qualified under section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Pursuant to Section 11.01 of the Plan, it has been amended from time to time and was last restated in a document effective as of January 1, 2004. Since then, it has been further amended by a First Amendment dated April 25, 2005, a Second Amendment dated December 6, 2006, and a Third Amendment also dated December 6, 2006.

     (b) 2008 Plan Restatement. Except as otherwise specified herein, this amendment and restatement of the Plan is effective as of January 1, 2008. This instrument incorporates all previous amendments, including (i) the First Amendment, which required that the Plan be operated in compliance with Code section 409A, as of January 1, 2005 (except for Exempt Benefits); (ii) the Second Amendment, which changed the payment election provisions and certain other provisions in a manner intended to comply with Code section 409A, retroactively as of January 1, 2005, and changed certain administrative provisions; and (iii) the Third Amendment, which suspended the accrual of any additional accrued benefits under the Plan during any period after December 31, 2006, without terminating the Plan or the Trust. This amended and restated Plan document also clarifies some provisions and amends some provisions to comply with Treasury Regulations issued in 2007 under Code section 409A, but is not intended to enhance or adversely affect any Plan benefits or related rights or features in any material way, except to the extent necessary to comply with Code section 409A (with respect to those Plan benefits subject to Code section 409A).

     (c) Executive Retirement Trust. Pursuant to Section 12.02 of the Plan, the Plan Sponsor also established a Trust under a written agreement dated in December 1989, and entitled “G&K Services, Inc. Executive Retirement Trust.” That agreement has been amended by a First Amendment dated December 6, 2006, which made changes necessary to comply with Code section 409A, and other administrative changes requested by the Trustee. The Plan Sponsor intends to request that the Trustee approve a Second Amendment of that agreement that would be intended to comply with Treasury Regulations issued in 2007 under Code section 409A. The Trustee who is currently

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receiving and holding Employer Group contributions under that Trust, with respect to this Plan, is Wells Fargo Bank, N.A.

     1.02 Purpose of Plan; Compliance with Code Section 409A.

     (a) Purpose. The purpose of the Plan is to provide designated executive and professional employees of the Employer Group with additional retirement, Disability and death benefits, subject to certain conditions intended to encourage their continued strong interest in the Employer Group’s success.

     (b) Compliance with Code Section 409A. During the period between January 1, 2005, and December 31, 2007, the Plan Sponsor and the Retirement Committee have, except to the extent otherwise provided in Section 1.04, operated and administered the Plan in a manner that complied in good faith with Code section 409A, Internal Revenue Service Notice 2005-1, the Proposed Regulations issued under Code section 409A on October 4, 2005, Internal Revenue Service Notice 2006-79 and subsequent guidance issued under Code section 409A, notwithstanding any contrary provisions of the Plan other than Section 1.04. During the period between January 1, 2008 and December 31, 2008, this Plan shall, except to the extent otherwise provided in Section 1.04, be interpreted, operated and administered in a manner intended to comply in good faith with Code section 409A, Internal Revenue Service Notice 2005-1 (and other Notices that have not been revoked for 2008), and the Treasury Regulations issued thereunder. After December 31, 2008, this Plan shall, except to the extent otherwise provided in Section 1.04, be interpreted, operated and administered in a manner intended to comply with Code section 409A and the Treasury Regulations issued thereunder.

1.03 Adoption by Affiliates. With the consent of the Plan Sponsor, this Plan has been adopted by certain of its Affiliates (as defined below) for the benefit of such of its executive and professional employees as each such Affiliate recommended for designation by the Retirement Committee before January 1, 2008.

     1.04 Plan Benefits Exempt from Compliance with Code Section 409A.

     (a) Treatment of Exempt Benefits. Notwithstanding any contrary provisions of the Plan other than this Section 1.04, to the extent any Participant’s Plan benefit was no longer subject to forfeiture under Article 5 of the Plan as of December 31, 2004, because the Participant had attained age 65 while still employed as of that date; the Participant had died while still employed before that date; or the Participant had terminated employment on or before December 31, 2001, and had not competed with the Company during the 3-year period after termination of employment (an “Exempt Benefit”), the Exempt Benefit shall be separately accounted for under the Plan, administered and paid after 2004 without regard to Code section 409A or any Plan amendment adopted after December 31, 2004, except for (i) this Section 1.04 (including any amendments thereto); (ii) Section 10 of the Second Amendment (dated in 2006), which is now Section 4.07 of this instrument and is intended to comply with Code section 3121(v)(2); (iii) Section 4.05(b) of this instrument, which allows accelerated payment of small benefit amounts; (iv) Section 8.02, which requires annuity payments to be made

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monthly; and (v) any other amendment that is not a material modification (as defined in subsection (c) below) of the Plan (or the Trust established under Section 12.02) made after October 3, 2004, with respect to the Exempt Benefit.

     (b) Exempt Benefit Amounts. The amount of a Participant’s Exempt Benefit, if any, shall initially be equal to the Actuarial Equivalent present value, determined as of December 31, 2004, of the amount to which the Participant would have been entitled under the Plan if he or she had voluntarily terminated employment with the Employer Group on that date (or his or her actual termination date, if earlier), and received payment of benefits with the maximum value available under the Plan on the earliest possible date allowed under the Plan for commencement of benefits following any such termination. Notwithstanding the preceding sentence, a Participant’s Exempt Benefit may increase, if at all, to the Actuarial Equivalent present value of that portion of the Plan benefit that the Participant actually becomes entitled to receive as of a date after December 31, 2004, under the terms of the Plan as in effect on October 3, 2004, without regard to any service to the Employer Group after December 31, 2004, or any other events affecting the amount of, or the entitlement to, the Participant’s Plan benefits (other than the Participant’s survival or a Participant or Retirement Committee election under the terms of the Plan with respect to the time or form of payment of an available Plan benefit).

     (c) Material Modifications. A modification of the Plan is a “material modification” only if a benefit or right existing as of October 3, 2004, is materially enhanced or a new material benefit or right is added (whether or not permitted under Code section 409A); and such material enhancement or addition affects any Exempt Benefit; provided, however, that the none of the following actions is a material modification:

     (i) the Retirement Committee or any member of the Employer Group exercises its discretion over the time and manner of payment of an Exempt Benefit, to the extent such discretion is expressly provided under the terms of the Plan as in effect on October 3, 2004, which are set forth in the amended and restated Plan document effective as of January 1, 2004 (the “2004 Plan Document”), to the extent such discretion has not been limited or eliminated by any provision of this Plan document that applies to Exempt Benefits;

     (ii) a Participant’s exercise of any right permitted under the 2004 Plan Document with respect to an Exempt Benefit, to the extent such right has not been limited or eliminated by any provision of this Plan document that applies to Exempt Benefits;

     (iii) any reduction, limitation or elimination of an existing benefit or right with respect to an Exempt Benefit; or

     (iv) any modification, such as Section 4.05(b) of this instrument, that allows the Employer Group or the Retirement Committee to require distribution of the entire vested Plan benefit of a Participant, an Alternate Payee or a Beneficiary (including an Exempt Benefit and any benefits under any other

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Employer Group arrangements that must be aggregated with this Plan under Code section 409A) in a lump sum that does not exceed the applicable dollar amount under Code section 402(g)(1)(B) ($15,500 in 2007 and 2008).

     1.05 Freezing of Plan. As provided in the Third Amendment of the Plan (dated in December 2006) and this Plan document, the Plan Sponsor has amended this Plan to suspend the accrual of any additional accrued benefits under the Plan, by reason of any Compensation increases or additional service with the Employer Group during any period after December 31, 2006, but the Plan Sponsor does not currently intend to terminate the Plan. The Plan Sponsor also intends to (a) allow accrued benefits that are not vested under this Plan as of that date to become vested thereafter only if the Participants with such non-vested accrued benefits earn sufficient additional years of continuous service and refrain from competition under Section 5.02 of the Plan; and (b) continue the existence of the Plan until all of the accrued benefits of Participants and their Beneficiaries have either been forfeited or have become vested and distributed to them under the Plan, unless the Plan is terminated before then.

ARTICLE 2
DEFINITIONS

     2.01 Use of Definitions. Whenever used in the Plan, the following words and phrases shall have the meanings set forth below unless the context plainly requires a different meaning. When the defined meaning is intended, each of the following terms is capitalized.

     2.02 “Actuarial Equivalent” means a benefit of equal value computed as of a particular date, by using the applicable actuarial assumptions and factors stated in the Exhibit As attached hereto and applicable as of the date or dates set forth therein, each of which is hereby made a part of the Plan.

     2.03 “Affiliate” means, effective as of January 1, 2005, any business entity or other person with whom the Plan Sponsor would be treated as a single employer as part of either (a) a controlled group of corporations described in Code section 414(b), or (b) a group of trades or businesses (whether or not incorporated) that are under common control as described in Code section 414(c), or some combination of such groups.

     2.04 “Alternate Payee” means a Participant’s former spouse who is entitled to receive any share of the Participant’s Plan benefits under Section 12.03(b).

     2.05 “Average Annual Compensation” of a Participant means twenty percent (20%) of the total Compensation received by a Participant during the period of five (5) consecutive calendar years, within his last ten (10) consecutive calendar years as an employee of the Employer Group, which produces the highest Average Annual Compensation; provided, however, that a calculation of Average Annual Compensation shall not include any calendar years (or Compensation received) after December 31, 2006.

     2.06 “Beneficiary” means a person designated pursuant to Section 7.02, to receive certain survivor benefits hereunder in the event of the death of a Participant or an Alternate Payee.

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     2.07 “Code” means the Internal Revenue Code of 1986, as amended. References to a Code section shall be deemed to be to that section as it now exists and to any successor provision. Except as otherwise provided in Section 1.02(b), any references to a section of the Code shall also include any Treasury Regulations issued thereunder, and any other applicable guidance issued thereunder by the Internal Revenue Service.

     2.08 “Compensation” means the total amount of all payments made by the Employer Group to or for a Participant for services rendered to the Employer Group, including commissions, overtime pay and bonuses. In addition, Compensation for a Plan Year or other period shall include all amounts otherwise defined herein as Compensation, which would have been payable to a Participant during that period, but were instead contributed by the Employer Group pursuant to salary reduction agreements to a “cafeteria plan” under Code section 125; to a qualified transportation arrangement under Code section 132(f)(4); to the Employer’s “401(k) Savings Plan,” established in March 1986, and as amended from time to time, containing a “cash-or-deferred” arrangement within Code section 401(k); or to the Plan Sponsor’s “Executive Deferred Compensation Plan” established as of January 1, 1989, and as amended from time to time.

     Compensation shall not include employee expense reimbursements, director’s fees, contributions made by the Employer Group under any deferred compensation plan (including without limitation this Plan and the Plan Sponsor’s Executive Deferred Compensation Plan), payments made by the Employer Group for group insurance, hospitalization and like benefits, nor contributions made by the Employer Group under any other employee benefit plan, except that Compensation shall include Employer Group contributions made pursuant to any salary reduction agreements described in the preceding paragraph. Furthermore, Compensation does not include any form of remuneration (including without limitation severance pay) that is paid to a Participant after his or her Termination of Employment, unless such remuneration (including without limitation cash paid in lieu of vacation time) was earned before such Termination of Employment.

     In clarification of the deferred compensation and employee benefit plan exclusions above, Compensation does not include any distributions from a plan of deferred compensation, regardless of whether such amounts are includible in the gross income of the Participant when distributed; amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option described in Part II, Subchapter D, Chapter 1, Subtitle A of the Code; or other amounts that receive special tax benefits, such as premiums for group term life insurance.

     Compensation shall also not include any cash bonuses paid after August 31, 2003, to any Participant to assist the Participant in paying income taxes resulting from either the issuance of stock in the Plan Sponsor to the Participant pursuant to the Plan Sponsor’s 2006 Equity Incentive Plan, as amended (or any predecessor, successor or modification to such plan), or any employment termination-related restrictions related to such stock; provided, however, that this paragraph shall not reduce the amount of Plan benefits payable to any Participant who commenced distribution of such benefits on or before October 1, 2003, or the rights of a

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Participant to the amount of vested benefits (if any) he or she would have been entitled to receive at Normal Retirement Date, if his or her Termination of Employment had occurred on or before October 1, 2003.

     2.09 “Disability” means, with respect to Exempt Benefits, the Participant’s disability as defined in the Plan Sponsor’s long-term disability plan then covering the Participant, which disability continues for at least 180 days. Disability means with respect to other benefits, that the Participant, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, either:

     (a) is unable to engage in any substantial gainful activity;

     (b) has received income replacement benefits for a period of not less than three months under such long-term disability plan or any other accident and health plan covering employees of the Employer Group; or

     (c) has been determined to be totally disabled by the Social Security Administration.

     Disability under subsections (a) and (b) shall be determined by a physician selected by the Employer Group. A Participant shall cooperate with the Employer Group, including making the Participant reasonably available for examination by physicians at the Employer Group’s request and at the Employer Group’s expense to determine whether or not the Participant has a Disability.

     2.10 “Effective Date” means January 1, 1989, the effective date that this Plan was first adopted. Except as otherwise provided herein, this amendment and restatement of the Plan is generally effective January 1, 2008, but such date shall not be considered the Effective Date for purposes of determining any Participant’s Entry Date.

     2.11 “Employer Group” means the Plan Sponsor and all of its Affiliates.

     2.12 “Entry Date” means that date as of which a Participant is first designated a Participant under Section 3.01, which date shall be any January 1 that is not earlier than the Effective Date, and no later than January 1, 2006.

     2.13 “Exempt Benefit” shall, at any particular time after December 31, 2004, mean an Exempt Benefit described in Section 1.04 that remains an Exempt Benefit under the terms of Section 1.04.

     2.14 “Normal Retirement Date” means the date a Participant attains age 65.

     2.15 “Participant” is an executive or professional employee of any member of the Employer Group who became a Participant before January 1, 2008, in accordance with the provisions of Article 3 and who has an accrued benefit under the Plan. Any such individual shall remain a Participant, to the extent of his or her accrued benefit, until such accrued benefit is either forfeited or fully distributed under the Plan.

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     2.16 “Plan” means the supplemental retirement benefit plan set forth in this instrument and as amended or restated from time to time, which is now called the “G&K Services Supplemental Executive Retirement Plan.”

     2.17 “Plan Sponsor” means G&K Services, Inc., a Minnesota corporation.

     2.18 “Plan Year” means the 12-month period commencing each January 1 and ending the following December 31.

     2.19 “Qualified Pension Plan” means the G&K Services Pension Plan, a qualified defined benefit pension plan established by the Employer as of May 28, 1970, and amended from time to time.

     2.20 “Retirement Committee” means the Retirement Committee from time to time appointed by the Board of Directors of the Plan Sponsor to administer its Qualified Pension Plan. The Retirement Committee shall be the Plan’s Plan administrator.

     2.21 “Separation from Service” means, effective as of January 1, 2005, and solely for purposes of this Plan, the Participant’s Termination of Employment with the Employer Group (as defined in Section 2.22); provided, however, that:

     (a) Unless the Participant has resigned or been discharged from such employment, his or her employment with the Employer Group shall be treated as continuing, without a Separation from Service, while he or she is on military leave, sick leave or other bona fide leave of absence, if the period of such leave does not exceed six months or, if longer, any period during which the Participant’s right to return to active service with the Employer Group is provided either by applicable statute or by contract. If any such leave exceeds six months and the Participant has no statutory or contract right to return to active service with the Employer Group, he or she will be deemed to have a Separation from Service on the day after such six-month period ends. A leave of absence is a “bona fide leave of absence” only if there is a reasonable expectation that the Participant will return to perform services for the Employer Group.

     (b) Whether or not the Participant ceases to be a common-law employee of the Employer Group, his or her service with the Employer Group shall be treated as continuing, without a Separation from Service, while the Participant continues to provide bona fide services to any member of the Employer Group, in any capacity (other than as a member of its Board of Directors), as an employee, independent contractor or otherwise, at a level that is 50% or more of the average level of bona fide services performed by the Participant for the Employer Group in any capacity during the immediately preceding 36-month period (or any lesser period of such service), unless the following paragraph applies to the Participant.

     (c) Except as otherwise provided in paragraph (a) above, the Participant shall be treated as having a Separation from Service with the Employer Group if either (i) the Employer Group and the Participant reasonably anticipate that, as of a particular date, the Participant will no longer provide any services to the Employer Group (in any capacity); or (ii) any agreement or arrangement for continuing services to the Employer Group

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     indicates that the Employer Group and the Participant reasonably anticipate that, as of a particular date, the level of bona fide services will permanently decrease to less than 50% of the average level of bona fide services provided during the preceding 36-month period (or any lesser period of such service).

     (d) For purposes of this definition of “Separation from Service,” any measurement of the level (or average level) of a Participant’s bona fide services during any period shall be based on work hours that are generally taken into account in determining the Participant’s compensation from the Employer Group, except as provided otherwise in the following sentence. During any portion of the Participant’s bona fide leave of absence described in paragraph (a) above, before the Participant’s Separation from Service occurs, such measurement shall be based on the following factors, as applicable: (i) if the Participant is receiving any form of compensation from the Employer Group during the leave, the Participant shall be treated as providing the same level of bona fide services as would have been required for such compensation in the absence of the leave; or (ii) if the Participant is not receiving any form of compensation from the Employer Group during the leave, the period of the leave is disregarded.

     (e) For purposes of this definition of “Separation from Service,” but not the following definition of Termination of Employment, the definition of “Employer Group” shall be modified as provided in the definition of Separation from Service under Code section 409A, by reducing certain ownership thresholds from 80% to 50%.

     2.22 “Termination of Employment” shall mean the Participant’s ceasing to be employed as a common-law employee of the Employer Group for any reason whatsoever, voluntary or involuntary, other than by reason of his or her death or an approved leave of absence.

     2.23 “2004 Plan Document” means the amended and restated Plan document effective as of January 1, 2004.

ARTICLE 3
PARTICIPATION

     3.01 In General. Each Participant became eligible to participate in this Plan, beginning on the Entry Date as of which he or she was first designated as a Participant by the Retirement Committee.

     3.02 Participation Conditions. As a condition of participation in and receipt of benefits under this Plan, each Participant agrees to observe all rules and regulations established by the Plan Sponsor or the Retirement Committee for administering the Plan and shall abide by all decisions of the Plan Sponsor or the Retirement Committee in the construction and administration of the Plan.

     3.03 No New Participants After December 31, 2006. Notwithstanding any contrary provision of this Plan, no Employee who was not a Participant on December 31, 2006, shall become a Participant after that date. Any individual who was a Participant as of December 31,

8

2006, shall continue to participate in the Plan to the extent of his or her accrued Plan benefit existing on that date, until such accrued benefit is either forfeited or fully distributed under the Plan.

ARTICLE 4
AMOUNT AND TIME FOR COMMENCEMENT OF LIFETIME BENEFITS

     4.01 Normal Retirement Benefits. Subject to the forfeiture provisions of Article 5, upon a Participant’s Separation from Service on or after his or her Normal Retirement Date, the Plan Sponsor shall pay to the Participant, in equal monthly payments commencing as of the first day of the month that begins after the date of such Separation from Service and continuing until the Participant’s death, an annual amount equal to:

     (a) fifty percent (50%) of the Participant’s Average Annual Compensation; less

     (b) the annual benefit amount the Participant would be entitled to receive under the Qualified Pension Plan, assuming the Participant elected a straight life annuity form of benefit under the Qualified Pension Plan, whether or not the Participant actually elects to begin receiving Qualified Pension Plan benefits;

provided, however, that if the Participant has not completed at least thirty (30) years of Benefit Accrual Service (as that term is defined in the Qualified Pension Plan and limited by the last sentence of this Section 4.01), then his or her benefit provided by this Plan (before any reduction by his or her Qualified Plan benefit amount) shall be multiplied by a fraction (which shall not exceed 1.0 nor change after 2006), the numerator of which is the number of years of Benefit Accrual Service the Participant has completed upon his or her Separation from Service, and the denominator of which is thirty (30). If a Participant’s benefit under this Plan is computed as of any date before his or her Separation from Service, the computation shall be made as if the Separation from Service occurred on that date.

     Notwithstanding any other provision of this Plan or the Qualified Pension Plan, for purposes of this Article 4, “Benefit Accrual Service” shall not include any service credited for a period beginning after December 31, 2006; and any Participant’s Exempt Benefit shall be calculated and payable with respect to the date of his or her Termination of Employment, rather than the date of his or her Separation from Service, if the latter date is a different date.

     4.02 Early Retirement Benefit. A Participant whose Separation from Service occurs before his or her Normal Retirement Date, but after the Participant has completed the 5-year period of vesting service described in Section 5.01, shall be entitled, subject to the Competition forfeiture provisions of Section 5.02, to receive an early retirement benefit under this Plan, commencing as of the first day of the month that begins after the date of his or her Separation from Service and coincides with or begins after his or her 55th birthday, unless the Participant elects under Section 4.03 or Section 4.04, with respect to any benefit amount that is not an Exempt Benefit, to commence payment of the early retirement benefit as of a later date permitted under Section 4.03 or Section 4.04 (as applicable), subject to any mandatory deferral under Section 4.08 or any accelerated payment under Section 4.03(b), Section 4.07 or Section 11.03.

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The amount of the early retirement benefit shall be determined under one of the following paragraphs of this Section 4.02, as applicable, and shall be payable as of the applicable commencement date:

     (a) Commencement upon Normal Retirement Date. If a Participant elects to delay commencement of his or her early retirement benefit (in the manner described in the preceding paragraph) until his or her Normal Retirement Date, the benefit amount shall be equal to his or her normal retirement benefit under Section 4.01, determined as of the date of his or her Separation from Service; provided, however, that if the Participant had not attained age 60 and completed at least 30 years of Benefit Accrual Service as of the latter date, the fraction in such computation shall be a different fraction (which shall not exceed 1.0 nor change after 2006), the numerator of which is the number of years of Benefit Accrual Service the Participant has completed upon his or her Separation from Service, and the denominator of which is the greater of thirty (30) or the number of years of Benefit Accrual Service the Participant would have completed if his or her Separation from Service were to occur upon his or her attainment of age 60. The exclusion of any Benefit Accrual Service credited after December 31, 2006, as required under the last paragraph of Section 4.01, shall not affect the calculation of the projected future Benefit Accrual Service a Participant would have completed upon the attainment of age 60, for purposes of the preceding sentence.

     (b) Commencement Before Normal Retirement Date. If payment of a Participant’s early retirement benefit will commence before his or her Normal Retirement Date, the benefit amount shall be equal to his or her early retirement benefit determined under Section 4.02(a) as of the date of his or her Separation from Service; and then reduced as of the benefit commencement date, before any reduction for his or her benefits under the Qualified Pension Plan, by three and one-third percent (3-1/3%) for each of the first five (5) years of benefit payments that will precede the Normal Retirement Date, and six and two-thirds percent (6-2/3%) for each additional year by which the commencement of benefits will precede the Normal Retirement Date. Furthermore, if a Participant’s early retirement benefit will commence before his or her Normal Retirement Date, the reduction of that benefit for Qualified Pension Plan benefits shall be determined after the amount of Qualified Pension Plan benefits has been reduced pursuant to the early commencement factors specified in the Qualified Pension Plan, whether or not the Participant elects early commencement of the Qualified Pension Plan benefits.

     4.03 Election of Commencement Date for Early Retirement Benefit. A Participant may elect, at a time permitted under this Section 4.03 and in the manner provided in subsection (g) of this Section 4.03, with respect to any early retirement benefit (other than any Exempt Benefit) that he or she may become entitled to receive under Section 4.02, to begin receiving such benefit as of the early retirement benefit commencement date provided in the first paragraph of Section 4.02, or the first day of any later month, but not earlier than the first day of the month that begins after the date of his or her Separation from Service, or later than the first day of the month that coincides with or begins after his or her Normal Retirement Date; provided, however, that payment of Plan benefits (other than any Exempt Benefit) scheduled to commence as of any such date may be deferred under any of the applicable following paragraphs of this Section 4.03 or

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under Section 4.04 (concerning Disability), may be accelerated under Section 4.03(b), Section 4.07 or Section 11.03, and shall be delayed under Section 4.08 (if applicable).

     (a) Election upon Initial Participation. Any Participant may elect, with respect to any early retirement benefit (other than any Exempt Benefit) he or she may become entitled to receive under Section 4.02, to begin receiving such benefit as of the later of (i) the first day of the month that begins after the date of his or her Separation from Service, or (ii) the first day of any month specified in the election that coincides with or begins after his or her 55th birthday and is not later than the first day of the month that coincides with or begins after his or her Normal Retirement Date, if he or she makes that election as soon as reasonably practicable after receiving written notice of participation in this Plan, but not later than the day before the first Plan Year in which he or she becomes a Participant.

     (b) Payment Elections Made in 2005. In addition, pursuant to administrative rules established by the Retirement Committee, one or more Participants who began participating in the Plan on or before January 1, 2005, and had not commenced receiving any Plan benefits made an election under the preceding subsection (a) during the period beginning April 25, 2005, and ending on December 31, 2005, with respect to any early retirement benefit (other than an Exempt Benefit) he or she was then entitled to receive, or would become entitled to receive.

     (c) Elections in 2006 to Delay Benefit Commencement. In addition, pursuant to administrative rules established by the Retirement Committee, certain Participants who had not commenced receiving any Plan benefits made an election under the preceding subsection (a) during a period during 2006, with respect to any early retirement benefit (other than any Exempt Benefit) he or she would become entitled to receive after 2006; provided, however, that any such election (i) applied only to amounts that were not otherwise payable in 2006 and (ii) was not allowed to cause an amount to be paid in 2006 that would not otherwise have been payable in that year.

     (d) Elections in 2007 to Delay Benefit Commencement. In addition, pursuant to administrative rules established by the Retirement Committee, Participants who had not commenced receiving any Plan benefits were permitted to make an election under the preceding subsection (a) at a period during 2007, with respect to any early retirement benefit (other than any Exempt Benefit) he or she would become entitled to receive after 2007; provided, however, that any such election (i) applied only to amounts that were not otherwise payable in 2007 and (ii) was not allowed to cause an amount to be paid in 2007 that would not otherwise have been payable in that year.

     (e) Elections in 2008 to Delay Benefit Commencement. In addition, pursuant to administrative rules established by the Retirement Committee, any Participant who has not commenced receiving any Plan benefits may make an election under the preceding subsection (a) at a period during 2008, with respect to any early retirement benefit (other than any Exempt Benefit) he or she may become entitled to receive after 2008; provided, however, that any such election (i) shall apply only to amounts that would not otherwise

11

be payable in 2008 and (ii) shall not cause an amount to be paid in 2008 that would not otherwise be payable in that year.

     (f) Elections After 2008 to Delay Benefit Commencement. In addition, pursuant to administrative rules established by the Retirement Committee, any Participant who has not commenced receiving any Plan benefits and has not attained age 59 may elect (at any time after 2008 that is permitted by this subsection (f) and made pursuant to such rules), with respect to any early retirement benefit (other than any Exempt Benefit) he or she may become entitled to receive, to delay any payment commencement date previously scheduled to occur under Section 4.02 (or subsection (a), (b), (c), (d) or (e) of this Section 4.03), as applicable, until the later of:

     (i) the first day of the month that begins after the date of his or her Separation from Service; or

     (ii) the first day of any month that is at least five years after the previously scheduled commencement date, and is not later than the first day of the month that coincides with or begins after his or her Normal Retirement Date;

provided, however, that no election under this subsection (f) shall be effective until 12 months after the Retirement Committee receives the written election and, if the Participant’s early retirement benefit becomes payable at a time previously scheduled under Section 4.02 or this Section 4.03 (as applicable) within such 12-month period, such election shall not have any effect, and the early retirement benefit shall be payable at such previously scheduled time.

     (g) Payment of Exempt Benefits. If the Participant’s Plan benefit includes any Exempt Benefit, that amount shall be separately accounted for and distributed at a time determined in the applicable manner provided under the 2004 Plan Document or any provision of this Plan document that applies to Exempt Benefits.

     (h) Procedure for Payment Date Elections. Any election by a Participant under this Section 4.03 or Section 4.04 shall be made on a form provided by and delivered to the Retirement Committee; and may at any time be prospectively revised by the Participant on a form provided by and delivered to the Retirement Committee, but only to the limited extent provided in the other subsections of this Section 4.03, or in Section 4.04.

     (i) No Acceleration of Payments. Except to the extent specifically permitted or required under this Plan or the Trust established pursuant to Section 12.02, neither the Plan Sponsor (or the Retirement Committee) nor any Participant, Alternate Payee or Beneficiary shall have the right to have any benefit payment under this Plan paid before the time it is otherwise scheduled or required to be made under the Plan, except that any Exempt Benefit may be paid at any applicable time permitted under the 2004 Plan Document or any provision of this Plan document that applies to Exempt Benefits.

     (j) Elections by Alternate Payee. Any Alternate Payee who becomes entitled to a share of a Participant’s Plan benefit shall have the same election rights under this

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Section 4.03 (other than an election made by a new Participant) as the Participant, with respect to Plan benefits payable after the Participant’s Separation from Service (or in the case of Exempt Benefits, Termination of Employment); provided, however, that any such election may be made (i) only with respect to the Alternate Payee’s share of the Participant’s Plan benefits, (ii) only if the Participant would be allowed to make the same election and (iii) only at a time before the Participant’s Separation from Service when the Participant would be allowed to make the same election.

     4.04 Election to Delay Benefits Payable Due to Disability. This Section 4.04 is effective as of January 1, 2005. If a Participant’s Separation from Service occurs as a result of his or her Disability, and the Participant will be entitled to early retirement benefits (other than any Exempt Benefit) that are not scheduled to commence under Section 4.02 or Section 4.03 (as applicable) for at least 12 months, the Participant may elect, in the manner provided in subsection (h) of Section 4.03, at any time while the Disability continues and at least 12 months before the first early retirement benefit payment is otherwise scheduled, to delay his or her benefit commencement until the first day of any month that coincides with or begins after the latest of (a) the Participant’s 55th birthday, (b) the first anniversary of the date of his or her Separation from Service, or (c) the first day of any month following the date early retirement benefits were otherwise scheduled to begin, but not later than the first day of the month that coincides with or begins after his or her Normal Retirement Date.

     If a disabled Participant has made an election to delay commencement of early retirement benefits under this Section 4.04, and thereafter recovers from the Disability and returns to work for the Employer Group before receiving any benefits under this Plan, such election shall remain in effect with respect to any later Separation from Service as a result of the same or any new Disability, unless the Participant timely makes a new election under this Section 4.04, after such later Separation from Service, to further delay the commencement of early retirement benefits after a Disability. A Participant’s election under this Section 4.04 shall not affect the commencement date for any early retirement benefits payable to the Participant after a subsequent Separation from Service that is not caused by a Disability.

     If a Participant receives early retirement benefits at any time after his or her Separation from Service due to Disability, and thereafter recovers from the Disability, such payments shall continue as provided in the last paragraph of Section 4.06 and shall thereafter be treated as early retirement benefits, unless such benefits are forfeited under Section 5.02.

     4.05 Form of Payment.

     (a) General Rule. Any benefit payable under this Article 4 shall be payable in one of the optional forms provided under Article 8, commencing as of the commencement date specified in Section 4.01, 4.02, 4.03 or 4.04 that applies upon the event which entitles the Participant (or Alternate Payee) to payment of the benefits.

     (b) Lump Sum Payment of Small Non-forfeitable Benefit. This subsection (b) is effective as of January 1, 2008; and before that date, the terms of Section 8 of the Second Amendment to the 2004 Plan Document shall remain in effect. Notwithstanding any contrary provisions of this Article 4, except for Section 4.08, the Retirement

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Committee may, in its sole discretion, direct the Plan Sponsor to distribute in a cash lump sum, to any Participant who has had a Separation from Service the Actuarial Equivalent amount of the Participant’s entire unpaid and non-forfeited normal or early retirement benefit (including any Exempt Benefit), whichever is applicable, at any time after such Separation from Service (whether or not payment of such benefit has commenced) and before such distribution is otherwise scheduled to be completed, but only if:

     (i) such benefit is no longer subject to forfeiture under Article 5; and

     (ii) the sum of the Actuarial Equivalent amount of such benefit, plus the Participant’s benefits under all non-qualified deferred compensation arrangements that are sponsored by the Employer Group and are aggregated with this Plan as a “single plan” under Code section 409A, is less than the applicable dollar amount under Code section 402(g)(1)(B), as adjusted for inflation under section 402(g)(4) of the Code (to $15,500 in 2007 and 2008), as of the date of distribution under this subsection (b).

     This subsection (b) shall apply to an Alternate Payee or Beneficiary as if the recipient were a Participant; provided, however, that (i) no payment shall be made to an Alternate Payee who is entitled to a share of a Participant’s Plan benefit until after the Participant’s Separation from Service, and (ii) the Actuarial Equivalent amount payable to a Beneficiary shall be based only on the survivor benefit due the Beneficiary.

     4.06 Non-Duplication of Benefits; Effect of Re-employment on Benefit Payments. If any benefits are paid under this Plan with respect to a Participant’s period of service with the Employer Group, the Actuarial Equivalent of such benefits shall be deducted from any benefits subsequently accrued by the Participant under this Plan with respect to the same period of service.

     To the extent that any lump sum distribution of a Participant’s Plan benefits is made to satisfy a FICA Tax withholding obligation pursuant to Section 4.07, the Actuarial Equivalent amount of such distribution shall be deducted from the value of any benefit subsequently payable with respect to such Participant under this Plan, whether or not such benefit has commenced.

     If (a) a Participant’s Separation from Service has occurred, (b) he or she is entitled to receive any benefit payments (other than Exempt Benefits) under this Plan at a previously scheduled time after the Separation from Service, and (c) the Participant either continues to be employed or returns to employment with the Employer Group before such Plan benefit has been fully paid or forfeited, his or her Plan benefit shall nevertheless remain payable at the time and in the manner previously elected or provided under this Plan, whether or not such employment continues, unless such payment has not commenced and the Participant elects to delay its commencement (and/or elects a different form of payment) at a time permitted under Section 4.03 or Section 4.04, as applicable. This paragraph shall not apply to any Exempt Benefit.

     4.07 Withholding or Advance Benefit Distribution for FICA Taxes. This Section 4.07 is effective as of January 1, 2005. The Plan Sponsor shall comply with Code section 3121(v)(2), with respect to taxes due on Plan benefits under the Federal Insurance Contributions Act (“FICA

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Taxes”), by deferring the withholding and payment of FICA Taxes on the present value of a Participant’s Plan benefits (as determined under that Code section) until the first date on which all of his or her Plan benefits are no longer subject to forfeiture under Article 5 and are reasonably ascertainable under that Code section (the “Resolution Date”); and withholding such FICA Taxes as provided in the following three paragraphs (as applicable); provided, however, that, if any Plan benefits are paid to a Participant before his or her Resolution Date, FICA Taxes shall be withheld (pursuant to Section 4.09) from each such payment, after taking into account any FICA Tax withholding obtained (without regard to Plan benefits) from any other compensation payable to the Participant in that calendar year. If Participant dies after his or her benefit payments have commenced, but before his or her Resolution Date, the date of death shall be the Resolution Date for any of the Participant’s Plan benefits that have not been forfeited before his or her death.

     (a) Withholding from Benefit Payment. If the Participant’s Resolution Date occurs in a calendar year in which any payment of his or her Plan benefits is made or commences on or after that date, all of the FICA Taxes to be withheld as of the Resolution Date shall be: (i) withheld from the next benefit payment due in that year, but only if all of the FICA Taxes can be withheld from such next benefit payment, after taking into account all other tax withholding requirements, without being delinquent under applicable tax law; or (ii) if clause (i) does not apply, withheld from a special distribution of Plan benefits pursuant to the following paragraph, in either case after taking into account any FICA Tax withholding obtained (without regard to Plan benefits) from any other compensation payable to the Participant in that calendar year.

     (b) Withholding from Advance Distribution. If the Participant’s Resolution Date has occurred, and (i) payment of his or her Plan benefits will not commence by the end of the calendar year in which Resolution Date occurred, or (ii) the first Plan benefit payment due the Participant in that year and after the Resolution Date is not sufficient (after taking into account FICA Tax withholding obtained, without regard to Plan benefits, from the Participant’s other compensation in that year) to satisfy the FICA Tax withholding tax obligation due with respect to the present value of his or her Plan benefits as of the Resolution Date, then the Plan Sponsor shall distribute during that year, at a time permitted under the applicable FICA Tax regulations, a lump sum portion of the Participant’s Plan benefits equal to the sum of such FICA Tax withholding tax obligation and any Federal, state and local income taxes also required to be withheld under Section 4.09 as a result of that total distribution; and the amount of future Plan benefits payable to the Participant shall be reduced pursuant to Section 4.06.

     (c) Treatment of Alternate Payee’s Benefit. If any portion of the Participant’s Plan benefit has been assigned to an Alternate Payee, such portion shall be taken into account under this Section 4.07 as if it were owned by the Participant, to the extent required under FICA Tax rules referenced in Section 12.03(b), but any resulting FICA Taxes will be deducted or distributed only from the Participant’s share of Plan benefits.

     4.08 Six Month Delay of Benefit Payments to Specified Employees. Except as otherwise provided below, this Section 4.08 is effective as of January 1, 2005. Notwithstanding any contrary provisions of this Plan, if a Participant is treated as a Specified Employee (as

15

described in the following paragraph), on the date of his or her Separation from Service, no benefits (except for any Exempt Benefits) may be paid to the Participant under this Plan before a date that is at least six months after the date of his or her Separation from Service (or, if earlier, the date of the Participant’s death). If any payments of the Participant’s benefits (other than any Exempt Benefits) under this Plan are otherwise scheduled to be made before the end of such period, those benefit payments will be made in a lump sum immediately after the end of such period, subject to the Competition forfeiture provisions of Section 5.02, with interest at the rate used for Actuarial Equivalent computations of a lump sum payment under the Plan. Any Exempt Benefit shall be payable under the terms of the 2004 Plan Document. This Section 4.08 does not apply to any share of the Participant’s Plan benefit assigned to an Alternate Payee.

     (a) Specified Employee Definition. For purposes of this Plan, “Specified Employee” means an individual who is a “key employee,” as defined in the following paragraph, of the Employer Group (as determined under the last paragraph of this Section 4.08) at any time during the 12-month period ending on December 31, 2004, or ending on any later December 31st. Except as otherwise provided in the following paragraph (d), if an individual is identified as such a “key employee” during any such 12-month period, he or she shall be treated as a Specified Employee under this Section 9.12 for the 12-month period beginning on the next April 1st; provided, however, that a Participant shall not be treated as a Specified Employee if no stock of the Plan Sponsor or an Affiliate is publicly traded on an established securities market (or otherwise) as of the date of the Participant’s Separation from Service.

     (b) Key Employee Definition. This paragraph (b) is effective for determining “key employees” for any 12-month period ending on or after December 31, 2007. For purposes of the preceding paragraph, “key employee” means any employee of the Employer Group who, at any time during a 12-month period described in that paragraph: (i) has annual compensation exceeding $130,000 (as defined under Code section 409A and adjusted for inflation under section 416(i)(1)(A) of the Code), and is deemed to be an “officer” of any member of the Employer Group, because he or she is one of the highest-paid 75 employees of the Employer Group for that 12-month period; or (ii) is a more than 5% owner of the Plan Sponsor, or (iii) is a more than 1% owner of the Plan Sponsor and has annual compensation (as defined under Code section 409A) exceeding $150,000. For 12-month periods before 2007, the number of officers taken into account under clause (i) shall not exceed the greater of 3 or 10% of the total number of employees (after application of the exclusions in section 414(q)(5) of the Code), but no more than 50 officers. The Retirement Committee will make the determination of who is a “key employee” under Code section 416(i)(1) (which includes the definition of “more than 5% owner” and some other terms used in this paragraph), except that the Retirement Committee shall disregard Code section 416(i)(5), which includes as “key employees” the beneficiaries of key employees.

     (c) Effect of Corporate Transactions. If a corporate transaction combines into a single Employer Group the Plan Sponsor and any other corporation whose stock was also publicly traded on an established securities market (or otherwise) immediately before the transaction, their lists of Specified Employees shall be combined and, until the next April 1^st (or any earlier date for listing Specified Employees of the combined

16

Employer Group), the Specified Employees of the combined Employer Group shall include the highest paid 50 officers on that combined list (without regard to the 75-employee rule of paragraph (c) above), plus any other Specified Employees whose status is based on being a 1% or 5% owner in the combined Employer Group. If a corporate transaction combines into a single Employer Group the Plan Sponsor and any other corporation whose stock was not publicly traded immediately before the transaction, and any stock of a member of the combined Employer Group is publicly traded on an established securities market (or otherwise) immediately after the transaction, the Specified Employees of the Plan Sponsor’s pre-transaction Employer Group shall remain the only Specified Employees of the combined Employer Group until the next April 1^st. If a corporate transaction separates the Employer Group into two separate Employer Groups, each of which has stock that is publicly traded on an established securities market (or otherwise) immediately after the transaction, the Specified Employees of the Plan Sponsor’s pre-transaction Employer Group shall remain the only Specified Employees of the separate Employer Groups until the next April 1^st.

     4.09 Tax Withholding from Benefit Payments. Notwithstanding any contrary provisions of this Plan, the Plan Sponsor (or, if applicable, any trustee making benefit payments under the Plan) may deduct, from any benefit payment made to a Participant, Alternate Payee or Beneficiary under this Plan, any amounts the Plan Sponsor (or any such trustee) is required to withhold under any state, federal, local, or foreign law for taxes or other charges relating to the Plan benefits of the recipient and applicable at the time the benefit is paid.

     4.10 Delay of Payments for Compliance with Laws or Contractual Obligations. Notwithstanding any contrary provision of this Plan, the Plan Sponsor, in its discretion, may delay any benefit payments under this Plan (other than Exempt Benefits) in any of the following circumstances, to the extent the Plan Sponsor reasonably anticipates that any of the following consequences would otherwise occur, subject to the applicable conditions of this Section 4.10:

     (a) Code Section 162(m). To the extent that the Plan Sponsor’s income tax deduction for such payments to any Participant would be limited or eliminated by the application of Code section 162(m), such payments (and all other scheduled payments to each affected Participant that are affected by such limit during the Plan Sponsor’s taxable year) may be delayed until the first year in which the Plan Sponsor reasonably anticipates that the deduction of such payments will not be barred by application of Code section 162(m).

     (b) Violation of Laws. To the extent that such payments would violate Federal securities laws or other applicable laws (except the Code), the affected payments may be delayed until the first calendar year in which the Plan Sponsor reasonably anticipates that the payments would not result in a violation of Federal securities law or such other applicable laws.

     (c) Jeopardize Plan Sponsor’s Existence as Going Concern. If such payments would jeopardize the ability of the Plan Sponsor to continue as a going concern, due to circumstances such as a material violation of loan covenants or other contractual terms to

17

which the Plan Sponsor is a party, the affected payments may be delayed until the first calendar year in which the payments would not have that effect.

     If benefit payments are delayed for any period under this Section 4.10, those benefit payments will be made in a lump sum immediately after the end of such period, subject to the Competition forfeiture provisions of Section 5.02, with interest at the rate used for Actuarial Equivalent computations of a lump sum payment under the Plan.

     4.11 Time of Payment Generally. Whenever any payment is required to be made at a time under this Agreement, the payment shall be made at that time or as soon thereafter as is practicable but in no event later than sixty (60) days following the required commencement date.

ARTICLE 5
VESTING AND FORFEITURES

     5.01 Five-Year Cliff Vesting. Subject to the forfeiture provisions of Section 5.02, a Participant (or any Alternate Payee with respect to the Participant) shall be entitled to the benefits provided by this Plan only after the Participant has completed five (5) years of continuous service, commencing as of his or her Entry Date, as an employee of the Employer Group in an executive or professional position of equal or greater responsibility than the position he or she held as of the Entry Date. Any service prior to the Participant’s Entry Date shall not be taken into account for purposes of this Section 5.01. If a Participant’s Termination of Employment (or any earlier Separation from Service) occurs at any time before he or she completes such a five-year period of continuous service in an eligible position, the Participant (and any Alternate Payee with respect to the Participant) shall not be entitled to any benefits under this Plan; and all of his or her rights under this Plan shall be forfeited.

     5.02 Non-Competition. Notwithstanding anything to the contrary in Section 5.01, all benefits of a Participant (and any Alternate Payee with respect to the Participant) under this Plan shall be forfeited if the Participant enters into Competition (as defined below) with the Employer Group within three years after his or her Termination of Employment (or any later Separation from Service), except that this Section 5.02 shall not apply if the Participant remained a common-law employee of the Employer Group on or after his or her Normal Retirement Date, or the Participant dies before any such Competition occurs. Any Plan benefits forfeitable under this Section 5.02, which are paid to a Participant (or any Alternate Payee with respect to the Participant) during a period of Competition, shall be returned to the Plan Sponsor by the recipient immediately upon the Plan Sponsor’s demand.

     For purposes of this Plan, “Competition” means directly or indirectly:

     (a) engaging (as an owner, independent contractor or as a managerial or executive employee) either alone or in conjunction with any person or entity, in any activity in the branded identity apparel or facilities services business, including but not limited to, the industrial laundry, textile and mat rental services or direct purchase industry that competes with the Employer Group by providing services or goods similar to those provided by the Employer Group to its customers within any market area served

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by the Employer Group at the time of the Participant’s Termination of Employment (or any later Separation from Service); or

     (b) disclosing or using for personal or another’s benefit any confidential proprietary information or trade secret of the Employer Group, including without limitation any list or other information concerning the Employer Group’s customers or agreements with customers.

     Pursuant to the authority granted in Section 10.02, the Retirement Committee may establish rules and procedures for establishing whether or not a Participant has entered into Competition with the Employer Group.

ARTICLE 6
SURVIVORSHIP BENEFITS

     6.01 Death Prior to Retirement. Subject to the forfeiture provisions of Article 5, in the event that a Participant dies at any time prior to commencement of retirement benefits pursuant to Article 4, the Plan Sponsor shall pay to the Participant’s surviving Beneficiary (or, to the extent required by any applicable court order, to a surviving Alternate Payee with respect to the Participant) an annual survivor’s benefit equal to twenty-five percent (25%) of the Participant’s rate of annual Compensation last in effect before the earlier of (a) his or her death or (b) December 31, 2006, which sum shall be payable annually without interest, for a period of ten (10) years, commencing on the 60th day following the Participant’s death. This survivorship benefit is in lieu of any other benefit under the Plan and in addition to any pre-retirement surviving spouse benefit under the Qualified Pension Plan.

     6.02 After Commencement of Benefits. If a Participant (or an Alternate Payee) dies after commencing to receive normal, deferred or early retirement benefits under Article 4, the Plan Sponsor shall pay any guaranteed or survivor benefits remaining due a Beneficiary (or Beneficiaries) under the form of benefit being paid to the Participant (or Alternate Payee, if the Alternate Payee had elected the form of payment) pursuant to Article 8.

ARTICLE 7
BENEFICIARY

     7.01 Recipient of Payments. During a Participant’s life, all payments of a Participant’s benefits to be made by the Plan Sponsor under this Plan shall be made solely to the Participant (or an Alternate Payee with respect to the Participant). If a Participant (or any such Alternate Payee) dies prior to receiving all benefit payments due him or her, any subsequent payments remaining payable under this Plan shall be made to the surviving Beneficiary of the Participant (or, if applicable, of the Alternate Payee). If a surviving Beneficiary dies before receiving all the guaranteed payments, if any, due such Beneficiary pursuant to this Plan, the remaining payments shall be paid to the legal representatives of the Beneficiary’s estate.

     7.02 Beneficiary Designation. Each Participant (and any Alternate Payee who is assigned a Plan benefit payable in a form including a survivor benefit that may be designated by the Alternate Payee) shall designate a Beneficiary (including multiple Beneficiaries to share on any basis specified by such individual) to receive benefits upon the designating individual’s

19

death, by filing a written notice of such designation with the Retirement Committee. The Participant (or Alternate Payee) may revoke or modify that designation at any time by a further written designation, except to the extent a Participant’s former spouse has been designated as the Participant’s Beneficiary by a court order assigning Plan benefits to the former spouse as an Alternate Payee. However, no such designation, revocation or modification made by an individual shall be effective unless executed by the designating individual and accepted by the Retirement Committee during the designating individual’s lifetime; provided, however, that in the case of a survivor annuity described in Section 8.02(c), any such designation, revocation or modification (including without limitation a revocation under the next following sentence) taking effect after the commencement of retirement benefits to the Participant (or Alternate Payee) under this Plan shall be subject to the limitations of Section 8.01(a) with respect to joint and survivor annuities. Any Beneficiary designation shall be deemed automatically revoked (a) if the Beneficiary predeceases the designating individual, or (b) by a marriage dissolution if the Beneficiary was the designating individual’s spouse prior to the dissolution, except to the extent a Participant’s former spouse has been designated as the Participant’s Beneficiary by a court order assigning Plan benefits to the former spouse as an Alternate Payee.

     If no applicable Beneficiary designation is in effect at the time when any survivor benefits payable under this Plan become due upon the death of a Participant, the Beneficiary for such benefits shall be the deceased individual’s surviving spouse or, if no spouse is then living, the deceased individual’s children in equal shares and their issue by right of representation or, if none, the legal representatives of the deceased individual’s estate; provided, however, that if the survivor benefit is provided under a joint and survivor annuity described in Section 8.02(c), and the deceased individual is an Alternate Payee, the Beneficiary under this paragraph shall not be his or her surviving spouse (due to the limitation in subsection (d) of Section 8.01).

     If a Plan benefit is payable to a minor or person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Plan Sponsor may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent or incapable person. The Retirement Committee may require proof of incompetency, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any such distribution shall completely discharge the Retirement Committee and the Employer Group from all liability with respect to such benefit.

ARTICLE 8
FORM OF PAYMENT OF LIFETIME BENEFITS

     8.01 Election of Benefit Form and Permitted Changes. Each Participant may elect to have the Actuarial Equivalent of his or her benefit, if any, provided under Article 4 paid in one of the optional forms of benefit described in Section 8.02, at the time determined under Article 4, if he or she makes that election on a form provided by and delivered to the Retirement Committee after receiving written notice of his or her initial eligibility to participate in this Plan, and before the beginning of his or her first Plan Year of participation, or at any later time permitted below in this Section 8.01. Each such election shall include a Beneficiary designated by the Participant.

     A Participant’s form of benefit election (including any Beneficiary designation that is part of the election) may not be revised, except as follows:

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     (a) Change of Beneficiary. A Participant’s form of benefit election may be revised at any time to change the identity of a Beneficiary designated under Article 7; provided, however, that if the Participant has commenced receiving benefits and any change is made to a Beneficiary previously named to receive a survivor’s annuity under Section 8.02(c) or Section 8.03(b), the annuity amounts and payment period shall remain contingent on the life expectancy and survival of the Beneficiary who was designated at the commencement of benefits.

     (b) Form Change Elections During 2006, 2007 or 2008. In addition, any Participant who has not commenced receiving any Plan benefits may make an election to change the form of benefit (other than any Exempt Benefit), in the manner provided in the first paragraph of this Section 8.01 for initial elections, at any time during 2006, 2007 or 2008 that is permitted under rules established by the Retirement Committee; provided, however, that any such election shall apply only to amounts that are payable in a calendar year after the year in which the election is made.

     (c) Form Change Elections after 2008. In addition, any Participant who has not commenced receiving any Plan benefits may make an election at any time after 2008 to change the form of benefit (other than any Exempt Benefit), in the manner provided in the first paragraph of this Section 8.01 for initial elections; provided, however, that no election under this subsection (c) shall be effective if the Retirement Committee receives the election on or after the date previously scheduled under Section 4.02 or Section 4.03 (as applicable) for payment of such benefit to commence; and in that case the Plan benefit shall be payable in the form of benefit last elected by the Participant before such date.

     (d) Elections by Alternate Payee. Any Alternate Payee entitled to a share of a Participant’s Plan benefit shall have the same election rights under this Section 8.01 (other than an election made by a new Participant) as the Participant, with respect to the Alternate Payee’s share; provided, however, that any such election may be made only if the Participant would be entitled to make the same election and only at a time when the Participant would be allowed to make the same election; provided, however, that an Alternate Payee shall not be entitled to elect any form of joint and survivor annuity providing a survivor benefit to any spouse of the Alternate Payee (other than the Participant).

     8.02 Optional Forms. Effective as of January 1, 2008, the optional forms of benefit (including Exempt Benefits, except as otherwise provided below) payable under this Plan are:

     (a) A straight life annuity, payable in equal monthly amounts, with payment ending on the Participant’s death.

     (b) A reduced life annuity, payable in equal monthly amounts, with a ten (10) year term certain guaranteed. If a Participant dies before the Plan Sponsor has made the guaranteed number of payments, the Plan Sponsor shall continue the balance of the payments to the Participant’s Beneficiary.

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     (c) A reduced joint and survivor life annuity, payable in equal monthly amounts, for the life of the Participant, followed by a survivor annuity in the same or a lesser amount for the lifetime of the Participant’s surviving spouse or other surviving Beneficiary, equal to 100%, 75% or 50% (as designated by the Participant) of the periodic annuity amount payable during the joint lives of the Participant and the Beneficiary; provided, however, that the 75% survivor annuity may not be elected with respect to any Exempt Benefit.

     If a form of annuity benefit described in paragraph (a), (b) or (c) above is elected by an Alternate Payee, the initial lifetime payment period shall be based on the Alternate Payee’s life and the Beneficiary designated under paragraph (c) may not be any spouse of the Alternate Payee (other than the Participant).

     8.03 No Election Made. If the Participant or Alternate Payee fails to make any election under Section 8.01 as to the form of payment of his or her benefit to be paid under Article 4, it shall be payable in the form of a straight life annuity as described in Section 8.02(a), payable on the first day of each month. Provided, however, that if the Participant is married at the time that benefit payments are to commence, the Participant’s benefit to be paid under Article 4 will be payable in the form of a reduced joint and survivor life annuity as described in Section 8.02(c), payable in equal monthly amounts for the life of the Participant, followed by a survivor annuity payable for the lifetime of the Participant’s surviving spouse in an amount equal to 50% of the periodic annuity amount payable during the joint lives of the Participant and the spouse.

ARTICLE 9
CLAIMS AND REVIEW PROCEDURE

     9.01 Claims Procedure. The following shall apply with respect to claims of a Participant, Alternate Payee or Beneficiary (hereinafter referred to as the “Claimant”) for benefits under the Plan, other than claims governed by Sections 9.03 and 9.04 below. If a Claimant believes that all or a portion of an expected benefit under this Plan has not been paid to the Claimant when due, the Claimant may file a claim with the Retirement Committee. The Retirement Committee shall notify the Claimant, within ninety (90) days of receipt of the claim, of the Retirement Committee’s allowance or denial of the claim. The notice of the Retirement Committee’s decision shall be in writing, sent by mail to the Claimant’s last known address and, if a denial of all or a portion of the claim, shall set forth:

     (a) the specific reasons for the denial;

     (b) specific reference to the provisions of the Plan on which the denial is based;

     (c) if applicable, a description of any additional information or material. necessary to perfect the claim, and an explanation of why it is needed; and

     (d) an explanation of the Plan’s claims review procedure, including the name and address of the person to whom any petition for review should be directed.

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     If the Retirement Committee determines that special circumstances require additional time to make a decision, the Retirement Committee shall notify the Claimant (within the 90-day period for the Retirement Committee’s response) of the circumstances and the date by which a decision is expected, and may extend the response period for up to an added 90-day period.

     9.02 Review Procedure. If a Claimant is determined by the Retirement Committee to be ineligible for benefits, or if the Claimant believes that he or she is entitled to greater or different benefits, in either case with respect to the Claimant’s claim made under Section 9.01, the Claimant shall have the opportunity to have such claim reviewed again by the Retirement Committee. The Claimant must file a petition for review with the Retirement Committee within 60 days after receipt of the notice of decision issued by the Retirement Committee. The petition shall state the specific reasons why the Claimant believes he or she is entitled to benefits or to greater or different benefits. Within 60 days after receipt by the Retirement Committee of the petition, the Retirement Committee shall afford the Claimant (and counsel, if any) an opportunity to present his or her position to the Retirement Committee in writing, and the Claimant (or counsel) shall have the right to review the pertinent documents. The Retirement Committee shall notify the Claimant of its decision in writing within the 60-day period, stating specifically the basis of its decision (written in a manner calculated to be understood by the Claimant) and the specific provisions of the Plan on which the decision is based. If the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Retirement Committee, but notice of this deferral shall be given to the Claimant.

     9.03 Disability Claim for Benefits. If a Claimant makes a claim for benefits under the Plan that is contingent on the Retirement Committee determining that the Claimant has a Disability, the Retirement Committee will give notice to the Claimant within 45 days of the Claimant’s written application for benefits of the Claimant’s eligibility or noneligibility for benefits under the Plan. If special circumstances require an extension, the Retirement Committee will notify the Claimant within the 45-day processing period that additional time is needed. The notice will specify the circumstances requiring the extension and the date a decision can be expected. The extension notice will also: (a) explain the standards for approving a disability claim; (b) state the unresolved issue(s) that prevent the Retirement Committee from reaching a decision; and (c) describe any additional information needed to resolve the issue(s). If the Retirement Committee requests the Claimant to provide additional information so it can process the claim, the Claimant will be given at least 45 days in which to provide the information. Otherwise, the initial extension cannot exceed 30 days. If circumstances require further extension, the Retirement Committee will notify the Claimant before the end of the initial 30-day extension. The notice will specify the circumstances requiring the further extension and the date a decision can be expected. In no event will a decision be postponed beyond an additional 30 days after the end of the first 30-day extension. If the disability claim is denied based on an internal rule, guideline, protocol, or other similar provision, in addition to the notice provisions described in this section, the Retirement Committee’s notice will provide that a copy of such rule, guideline, protocol or other similar provision is available upon request and free of charge. The notice will also identify any medical or vocational experts consulted on the claim. The Claimant may obtain reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits and may request, in writing, a list of medical or vocational experts consulted.

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     9.04 Review of a Denied Disability Claim. A Claimant may request a review of the Retirement Committee’s decision regarding a disability claim within 180 days after receipt of the denial of the disability claim. This request must be in writing and addressed to the Retirement Committee. The Claimant may, but is not required to, submit written comments, documents, records and other information relating to the claim for benefits. The review will take into account any such comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The review will be conducted by someone different from the person who originally denied the claim. This person cannot be a subordinate of the person who originally denied the claim. If the original denial of the claim was based on a medical judgment, the reviewer will consult with an appropriate health care professional who was not consulted on the original claim and who is not subordinate to someone who was. The Claimant will receive notice of the reviewer’s final decision regarding the disability claim within 45 days of the request for review.

     9.05 Deadline to File Claim. To be considered timely under the Plan’s Claims Procedures, a claim must be filed under Section 9.1 or 9.3 within one year after the Claimant knew or reasonably should have known of the principal facts upon which the claim is based. Knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to the Claimant for the purpose of applying this deadline.

     9.06 Exhaustion of Administrative Remedies. The exhaustion of the Plan’s claims procedures is mandatory for resolving every claim and dispute arising under this Plan. As to such claims and disputes: (a) no Claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of the Employee Retirement Income Security Act of 1974 as amended (ERISA) or under any other provision of law, whether or not statutory, until the claims procedures have been exhausted in their entirety; and (b) in any such legal action all explicit and all implicit determinations by the Retirement Committee, Trustee or Plan administrator, as the case may be, (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.

     9.07 Deadline to File Legal Action. No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, may be brought by any Claimant on any matter pertaining to this Plan unless the legal action is commenced in the proper forum before the earlier of: (a) 30 months after the Claimant knew or reasonably should have known of the principal facts on which the claim is based, or (b) six months after the Claimant has exhausted the claims procedure under this Plan. Knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to every Claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant for the purpose of applying the previously specified periods.

     9.08 Committee Discretion; Court Review. The Retirement Committee and all persons determining or reviewing claims have full discretion to determine benefit claims under the Plan. Any interpretation, determination or other action of such persons shall be subject to review only if it is arbitrary or capricious or otherwise an abuse of discretion. Any review of a final decision

24

or action of the persons reviewing a claim shall be based only on such evidence presented to or considered by such persons at the time they made the decision that is the subject of review.

ARTICLE 10
ADMINISTRATION

     10.01 Administration. Except as otherwise provided herein, the Plan shall be administered by the Retirement Committee. The Employer Group shall bear all costs of the Plan, as determined by the Plan Sponsor.

     10.02 Powers of the Retirement Committee. The Retirement Committee shall have all powers necessary to administer the Plan, including, without limitation, powers:

     (a) to interpret the provisions of the Plan

     (b) to find any facts necessary to determine a claim under Article 9; and

     (c) to establish rules for the administration of the Plan and to prescribe any forms required to administer the Plan.

     10.03 Actions of the Plan Sponsor and Retirement Committee. All determinations, interpretations, rules and decisions of the Plan Sponsor or the Retirement Committee shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Plan.

     10.04 Delegation. The Plan Sponsor and the Retirement Committee shall have the power to delegate specific duties and responsibilities to officers or other employees of the Employer Group or other individuals or entities. Any such delegation may allow further delegation by the individual or entity to which the delegation is made. Any such delegation may be rescinded at any time. Each person or entity to whom a duty or responsibility has been delegated shall be responsible for the exercise of such duty or responsibility and shall not be responsible for any act or failure to act of any other person or entity.

     10.05 Reports and Records. The Plan Sponsor and the Retirement Committee and those to whom they have delegated duties under the Plan shall keep records of all their proceedings and actions and shall maintain books of account, records, and other data as shall be necessary for the proper administration of the Plan and for compliance with applicable law.

     10.06 Correction of Plan Errors. The Retirement Committee, in conjunction with the Plan Sponsor, may correct any failures of the Plan to comply in operation (an “Operational Failure”), and any failure of the Plan document to comply, in either case with Code section 409A (or the Treasury Regulations issued thereunder), as the Retirement Committee deems necessary. Without limiting the Retirement Committee’s authority under the preceding sentence, the Retirement Committee, as it determines to be reasonable and appropriate, may correct the Plan document during the transition period set forth in those regulations and other guidance issued under Code section 409A, and correct any operational failure under any applicable method described in Internal Revenue Service Notice 2007-100 or any later correction procedures issued under Code section 409A. To correct an Operational Failure that is an incorrect payment of Plan

25

benefits, the Retirement Committee shall, to the extent permitted or required under the applicable correction procedure (a) require the Plan Sponsor to pay or obtain repayment from the Participant; (b) retroactively correct the amount of the Participant’s Plan benefit, to reflect that correction as if the Operational Failure had never occurred; and (c) provide such statements and reports to the Participant and the Internal Revenue Service as may be required by such correction procedures.

ARTICLE 11
AMENDMENT AND TERMINATION

     This Article 11 is effective as of January 1, 2005.

     11.01 Right to Amend and Terminate. Subject to the restrictions set forth in Sections 11.02 and 11.03, the Plan Sponsor expects the Plan to be permanent, but necessarily must, and hereby does, reserve the right to amend, suspend or terminate the Plan, in full or in part, at any time and from time to time. Any such Plan amendment, suspension or termination documents shall be filed with the Plan documents.

     11.02 Protection of Participants upon Amendment and Termination. No amendment, suspension or termination of the Plan shall adversely affect (a) the rights of a Participant, Alternate Payee or Beneficiary then entitled to receive payments under the Plan, as a result of the previous occurrence of the Participant’s death, attaining the Normal Retirement Date, becoming disabled or becoming entitled to receive early retirement benefits under Section 4.03; or (b) the rights of a Participant or Alternate Payee to the amount of benefits he or she would have been entitled to receive at the Participant’s Normal Retirement Date, if the Participant’s Termination of Employment (or any earlier Separation from Service) had occurred on the date of such amendment, suspension or termination; provided, however, that to the extent permitted under Section 4.05(b), or Section 11.03 in the event of a Plan termination, the Plan Sponsor may in its sole discretion accelerate or delay payments of the Actuarial Equivalent of all Plan benefits previously accrued (whether or not payment has commenced) in any manner permitted or required under Section 4.05(b) or Section 11.03.

     11.03 Plan Termination Procedures and Restrictions. If the Plan Sponsor terminates the Plan, no Participant’s benefits shall increase or decrease after the Plan termination date, the unpaid benefits of each Participant or Alternate Payee that have accrued before the Plan termination date shall remain subject to forfeiture under Article 5 (if applicable), unless the Plan is amended to accelerate or waive any risk of forfeiture, and such benefits shall be payable at the time and in the manner otherwise required or elected under the Plan, except that any Exempt Benefits shall be payable at the time and in the manner provided in the 2004 Plan Document for a Plan termination; provided, however, that, in the sole discretion of the Plan Sponsor, such payments (other than the payment of Exempt Benefits) may be accelerated or delayed as set forth below if the Plan termination occurs under any of the following circumstances:

     (a) Change in Control. If (i) the Plan is irrevocably terminated by the Plan Sponsor within the 30 days preceding or the 12 months following the occurrence of a Change in Control (including any Change of Control defined in the agreement under which the Plan Sponsor established the Trust pursuant to Section 12.02, and any other

26

“change in control” defined under Code section 409A), and (ii) all non-qualified deferred compensation arrangements that are sponsored by the Employer Group immediately after the time of such Change in Control and would be aggregated with this Plan as a “single plan” under Code section 409A are also irrevocably terminated within such period, with respect to each participant who experienced the same Change in Control, and their vested benefits are distributed in taxable payments within 12 months after such arrangements are terminated, then the Actuarial Equivalent amount of each Participant’s unpaid vested Plan Benefit (other than any Exempt Benefit) shall be paid in a cash lump sum and included in the taxable income of each recipient on the date of such payment; and each such payment shall be made on or before the last day of the 12-month period beginning on the Plan termination date. For purposes of this subsection (a), “Plan Sponsor” shall mean the employer that remains primarily liable, immediately after the Change in Control, for payment of Plan benefits.

     (b) Dissolution of Plan Sponsor. If the Plan is terminated within 12 months of the Plan Sponsor’s dissolution and that dissolution is taxable under Code section 331, then the Actuarial Equivalent amount of each Participant’s unpaid vested Plan Benefit (other than any Exempt Benefit) shall be paid in a cash lump sum and included in the taxable income of each recipient on the date of such payment; and each such payment shall be made on or before the end of the later of the following years: (i) the calendar year in which the Plan is terminated, or (ii) the first calendar year in which the payment is administratively practicable.

     (c) Discretionary Plan Termination. If the Plan is terminated in the discretion of the Plan Sponsor, the payment of Plan benefits (other than any Exempt Benefits) may be accelerated as provided below, but only if all of the following conditions are satisfied: (i) neither of the preceding subsections (a) and (b) apply to the Plan termination; (ii) the liquidation of the Plan is not associated with a turndown in the financial health of the Plan Sponsor or the Employer Group; (iii) all non-qualified deferred compensation arrangements that are sponsored by the Employer Group and would be aggregated with this Plan as a “single plan” under Code section 409A (if the same Participant participated in all of those arrangements) are also terminated; (iv) no member of the Employer Group adopts (at any time within three years after the Plan termination date) any new non-qualified deferred compensation arrangement that would be aggregated with this Plan in that same manner; (v) the Plan Sponsor shall continue to pay benefits (other than any Exempt Benefits) under this Plan and such other terminated arrangements, as if none of them had terminated, for at least the first 12-month period beginning on the Plan termination date; and (vi) the Actuarial Equivalent amount of each Participant’s unpaid vested Plan Benefit (other than any Exempt Benefit) and all remaining benefits under such other terminated arrangements shall be paid within 24 months after the Plan termination date in the form of cash lump sums that are included in the taxable income of each recipient on the date of such payment.

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ARTICLE 12
MISCELLANEOUS

     12.01 No Guaranty of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between any member of the Employer Group and any Participant or other employee. Nothing contained herein shall give any Participant or other employee the right to be retained in the employ of the Employer Group or in any existing position, or to interfere with the right of any member of the Employer Group to discharge any Participant or other employee at any time, nor shall it give any member of the Employer Group the right to require any Participant or other employee to remain in its employ, or to interfere with the right of a Participant or other employee to terminate employment at any time.

     12.02 Life Insurance and Funding. To the extent permitted under applicable laws, the Plan Sponsor in its sole discretion may apply for and procure as owner and for its own benefit, insurance on the life of a Participant, in such amounts and in such forms as the Plan Sponsor may choose. The Participant shall have no interest whatsoever in any such policy or policies, but at the request of the Plan Sponsor shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Plan Sponsor has applied for insurance.

     The rights of a Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate) to benefits under the Plan shall be solely those of an unsecured general creditor of the Plan Sponsor. Any insurance policy on the life of a Participant or former Participant, or other assets acquired by or held by the Plan Sponsor, shall not be deemed to be held under any trust for the benefit of any Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate), or as security for the performance of the obligations of the Plan Sponsor, but shall be and remain general, unpledged and unrestricted assets of the Plan Sponsor.

     The Plan Sponsor may establish a trust to facilitate management of any life insurance or other assets that may be used to pay Plan benefits, but the assets of any such trust shall remain subject to the claims of the Plan Sponsor’s general creditors; and no Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate) shall have any right to any of such assets, except in the capacity as an unsecured general creditor of the Plan Sponsor. To the extent that any of the benefits accrued for a Participant under this Plan are paid to a Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate) by the trustee of such a trust, the Plan Sponsor’s obligation to pay that portion of the Participant’s benefits under this Plan shall be discharged to the extent of the trustee’s payment.

     12.03 Non-Alienation. No benefit payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment or encumbrance of any kind; provided, however, that:

     (a) in the event that, at the time of a Participant’s Separation from Service (or, in the case of any Exempt Benefits, Termination of Employment), the Participant is indebted to any member of the Employer Group, such member shall have the right to offset any such indebtedness (including any interest thereon) against any benefits otherwise due under this Plan with respect to the Participant, by applying such

28

indebtedness (including any interest thereon) to the fullest extent permitted by law pro-rata to each successive benefit payment when it becomes due thereafter, until the full amount of the debt and any interest owed any member of the Employer Group has been paid; and

     (b) all or any portion of a Participant’s unpaid benefits under this Plan may be assigned by court order to the Participant’s former spouse in connection with a dissolution of their marriage, but only if the Retirement Committee determines, in its sole discretion, that the order satisfies such requirements of a “qualified domestic relations order” as are set forth in paragraphs (1) through (3) of Code section 414(p), as if the Plan were a plan described in Code section 401(a)(13); provided, however, that no such assigned benefit shall be payable before it would have been payable under this Plan in the absence of such order, except that if payment of such assigned benefit has not already commenced to the Participant, the Participant’s former spouse shall have the same rights (if any) to delay payment and change its form as the Participant would have had with respect to the Plan benefit assigned to the former spouse; provided further that no payment shall be made to an Alternate Payee before the Participant’s Separation from Service (or in the case of Exempt Benefits, Termination of Employment) or death. The federal income and payroll taxation of any Plan benefits assigned as provided in the preceding sentence shall be governed by Revenue Rulings 2002-22 and 2004-60, or any applicable guidance subsequently published by the Internal Revenue Service or the Department of the Treasury.

     12.04 Applicable Laws. The Plan and all rights hereunder shall be governed by and construed according to Code section 409A (in the manner provided in subsection (b) of Section 1.02 above), other applicable federal laws and the applicable laws of the State of Minnesota, except to the extent such State laws are preempted by the federal laws of the United States of America.

     12.05 Form of Communication. Any election, application, claim, notice or other communication required or permitted to be made, by a Participant or Beneficiary to the Plan Sponsor or the Retirement Committee shall be made in writing and in such form as the Retirement Committee shall prescribe. Any communication made under this Plan shall be effective upon mailing, if sent by first class mail, postage pre-paid, and addressed to either (a) the address of the Participant or Beneficiary last shown in the Plan Sponsor’s records; or (b) if sent to the Retirement Committee or Plan Sponsor, its principal offices at Minneapolis, Minnesota, to the attention of the “Pension Retirement Committee” or one of its members.

     12.06 Captions. The captions at the head of the Articles and Sections of this Plan are designed for convenient reference only and are not to be used for the purpose of interpreting any provision of this Plan.

     12.07 Severability. The invalidity of any portion of this Plan shall not invalidate the remainder thereof, and in any such case the remainder shall continue in full force and effect, to the extent that any purposes of the Plan may still be carried out.

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     12.08 Binding Instrument. The provisions of this Plan shall be binding upon each Participant and Alternate Payee (and their respective heirs, personal representatives and Beneficiaries); and upon the Retirement Committee and the Plan Sponsor, its successors and assigns.

     IN WITNESS WHEREOF, the Retirement Committee has approved this instrument at its meeting on August 29, 2008; and has caused this instrument to be executed by an officer of the Plan Sponsor on this 9th day of December, 2008, but effective as of January 1, 2008, except as otherwise specified herein.

G & K SERVICES, INC.
By	/s/ Jeffrey L. Cotter
	Its Vice President, General Counsel

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EXHIBIT A-1

G & K SERVICES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As of January 1, 2007, and superseded as of January 1, 2008, except for Exempt Benefits)

     With respect to all Plan benefits that commenced before January 1, 2008, and with respect to Exempt Benefits commencing before and after that date, an “Actuarially Equivalent” benefit or amount shall be determined by application of the factors set forth below:

(a) Factors for Optional Forms of Benefit Payments. The amount of the optional form of benefit is obtained by multiplying the normal benefit amount payable for the Participant’s lifetime by the factor shown. In applying the factors specified in this Exhibit A, “Age Difference” means the result of subtracting the joint annuitant’s birth date from the Participant’s birth date, and dropping any fractional year. Age Difference will be a negative number when the joint annuitant is younger than the Participant and a positive number when the joint annuitant is older than the Participant.

Optional Form of Benefit	Factor
Ten Year Certain and Life — An annuity payable for ten years certain and for the life of the Participant	.955
Joint and 100% Survivor Benefit — An annuity payable for the life of the Participant, with a survivor annuity payable for the life of the Beneficiary in an amount equal to the full amount of the annuity payable during the life of the Participant.	.860 + [.006 x (Age Difference)] but not more than 1.00 nor less than 0.51
Joint and 50% Survivor Benefit — An annuity payable for the life of the Participant, with a survivor annuity payable for the life of the Beneficiary, in an amount equal to one-half of the amount of the annuity payable during the life of the Participant	.920 + [.004 x (Age Difference)] but not more than 1.00 nor less than 0.51

These factors are based on 7% interest and 1983 Group Annuity Mortality, assuming 50% of the employees are male and 50% are female.

Note: No other optional forms are permitted for Exempt Benefits.

(b) Factors for All Other Circumstances (including Plan termination and small lump sum payments). The factors will be determined by using the mortality table prescribed by the Commissioner of Internal Revenue under Code sections 415(b)(2)(E)(v) and 417(e)(3), as set forth in Revenue Ruling 2001-62 (which is based upon a fixed blend of 50 percent of the unloaded male mortality rates and 50 percent of the unloaded female mortality rates underlying

31

the mortality rates in the 94 GAR Table, projected to 2002); and the annual rate of interest on 30-year Treasury securities for a specified calendar month, as published for the second calendar month (i.e. the rate for November, as published each December) preceding the Plan Year in which the distribution occurs.

Notwithstanding the foregoing, this revised paragraph (b) shall not be applied to reduce the amount of any Plan benefit payable to a Participant who has, before April 10, 2003, completed the five-year continuous service requirement set forth in Section 5.01 of the Plan as it existed on April 9, 2003.

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EXHIBIT A-2

G & K SERVICES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As of January 1, 2008)

     During each Plan Year beginning on or after January 1, 2008, an “Actuarially Equivalent” benefit or amount (other than any Exempt Benefit) shall be determined for all purposes under the Plan by application of the actuarial assumptions set forth below:

(a) Applicable Mortality Table. The applicable mortality table prescribed by the Commissioner of Internal Revenue under Code section 417(e)(3)(B), as amended by the Pension Protection Act of 2006, to be used for that Plan Year by the Qualified Pension Plan.

(b) Applicable Interest Rates. The applicable interest rates prescribed under Code sections 417(e)(3)(C) and (D), as amended by the Pension Protection Act of 2006, which are the adjusted first, second and third segment rates applied under Code § 417(e)(3)(D), as published for the second calendar month (i.e. the average rates for November as published each December) preceding that Plan Year.

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EX-10.S

EXHIBIT 10(S)

G&K SERVICES

EXECUTIVE DEFERRED COMPENSATION PLAN

(Amended and restated generally as of January 1, 2008)

Prepared By:
Leonard, Street and Deinard/AMB
Professional Association
150 S. Fifth Street #2300
Minneapolis, MN 55402
(612) 335-1500

G&K SERVICES
EXECUTIVE DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

ARTICLE 1 The Plan	1
1.01 Establishment, Amendments and Restatements	1
1.02 Purpose of Plan; Compliance with Code Section 409A	2
1.03 Adoption by Affiliates	2
1.04 Plan Benefits Exempt from Compliance with Code Section 409A	2
ARTICLE 2 Definitions	4
ARTICLE 3 Participation	9
3.01 In General	9
3.02 Participation Conditions	10
ARTICLE 4 Participant Compensation Deferral	10
4.01 Deferral Elections	10
4.02 Minimum and Maximum Deferrals	12
4.03 Reduction of Compensation	12
4.04 Election to Defer Irrevocable	12
ARTICLE 5 Employee and employer Contributions	12
5.01 Employee Contributions	12
5.02 Employer Retirement Contributions	12
5.03 Matching Contributions	13
5.04 Employer Transition Contributions	13
ARTICLE 6 Vesting and Forfeitures	14
6.01 Fully Vested Deferral Account	14
6.02 Vesting and Forfeiture of Employer Contribution Account	14
6.03 Forfeiture of Employer Contribution Account for Competition	15
6.04 Change in Control Definitions	16
ARTICLE 7 Investment Return or Loss	17
7.01 Determination of Investment Return or Loss	17
7.02 Options For Measurement of Investment Return or Loss	18
ARTICLE 8 Accounting	19
8.01 Establishment and Crediting or Debiting of Accounts	19
8.02 Determination of Accounts	20
8.03 Statement of Account	21
8.04 Accounting Device Only	21
ARTICLE 9 Payment of Benefits	21
9.01 Retirement Benefits	21
9.02 Form and Time of Payment for Retirement Benefit or Disability Benefit	22
9.03 Payment of Disability Benefit or Exempt Benefit After a Disability	26
9.04 Minimum Benefits Payable Before Retirement or Disability	26
9.05 Unforeseeable Emergency or Hardship Distribution	28

i

9.06 Withholding or Advance Benefit Distribution for FICA Taxes	30
9.07 Six Month Delay of Benefit Payments to Specified Employees	31
9.08 Lump Sum Payment of Small Non-forfeitable Benefit	32
9.09 Survivorship Benefits	33
9.10 Recipients of Payments	33
9.11 Beneficiary Designation	33
9.12 Earlier or Later Benefit Payments by Trustee	34
9.13 Tax Withholding from Benefit Payments	34
9.14 Delay of Payments for Compliance with Laws or Contractual Obligations	34
9.15 Time of Payment Generally	35
ARTICLE 10 Claims and Review Procedure	35
10.01 Claims Procedure	35
10.02 Review Procedure	36
10.03 Disability Claim for Benefits	36
10.04 Review of a Denied Disability Claim	37
10.05 Deadline to File Claim	37
10.06 Exhaustion of Administrative Remedies	37
10.07 Deadline to File Legal Action	37
10.08 Committee Discretion; Court Review	37
ARTICLE 11 Administration	38
11.01 Administration	38
11.02 Powers of the Retirement Committee	38
11.03 Actions of the Plan Sponsor and Retirement Committee	38
11.04 Delegation	38
11.05 Reports and Records	38
11.06 Correction Of Plan Errors	38
ARTICLE 12 Amendment and Termination	39
12.01 Right to Amend and Terminate	39
12.02 Protection of Participants upon Amendment and Termination	39
12.03 Plan Termination Procedures and Restrictions	39
ARTICLE 13 Miscellaneous	40
13.01 No Guaranty of Employment	40
13.02 Life Insurance and Funding	41
13.03 Non-Alienation	41
13.04 Applicable Laws	42
13.05 Form of Communication	42
13.06 Captions	42
13.07 Severability	42
13.08 Binding Instrument	42

ii

G& K SERVICES
EXECUTIVE DEFERRED COMPENSATION PLAN
(Amended and restated generally as of January 1, 2008)

ARTICLE 1
THE PLAN

     1.01 Establishment, Amendments and Restatements.

     (a) Plan and Plan Sponsor. As of January 1, 1989, G&K Services, Inc. (the “Plan Sponsor”), established for the benefit of certain executive and professional employees, a deferred compensation plan then known as the “G&K Services, Inc. Executive Deferred Compensation Plan” (as amended, the “Plan”). The Plan remains in effect and is intended to supplement the existing G & K Services 401(k) Savings Incentive Plan maintained by the Plan Sponsor and intended to be qualified under section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). Pursuant to Section 12.01 of the Plan, it has been amended from time to time and was last restated in a document effective as of January 1, 2004. Since then, it has been further amended by a First Amendment dated November 11, 2005, and a Second Amendment dated December 6, 2006.

     (b) 2008 Plan Restatement. Except as otherwise specified herein, this amendment and restatement of the Plan is effective as of January 1, 2008. This instrument incorporates all previous amendments, including (i) the First Amendment, which required that the Plan be operated in compliance with Code section 409A, as of January 1, 2005 (except for Exempt Benefits); and changed the method for measurement of Investment Return or Loss; and (ii) the Second Amendment, which enhanced the Plan’s benefits as of January 1, 2007, changed the payment election provisions and certain other provisions to comply with Code section 409A, retroactively as of January 1, 2005, and changed certain administrative provisions. This amended and restated Plan document also clarifies some provisions and amends some provisions to comply with Treasury Regulations issued in 2007 under Code section 409A, but is not intended to enhance or adversely affect any Plan benefits or related rights or features in any material way, except to the extent necessary to comply with Code section 409A (with respect to those Plan benefits subject to Code section 409A).

     (c) Executive Retirement Trust. Pursuant to Section 13.02 of the Plan, the Plan Sponsor has also established a Trust under a written agreement dated in December 1989, and entitled “G&K Services, Inc. Executive Retirement Trust.” That agreement has been amended by a First Amendment dated December 6, 2006, which made changes necessary to comply with Code section 409A, and other administrative changes requested by the Trustee. The Plan Sponsor intends to request that the Trustee approve a Second Amendment (or amendment and restatement) of that agreement that would be intended to comply with Treasury Regulations issued in 2007 under Code section 409A. The Trustee who is currently receiving and holding Employer Group contributions under that Trust, with respect to this Plan, is Wells Fargo Bank, N.A.

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     1.02 Purpose of Plan; Compliance with Code Section 409A.

     (a) Purpose. The purpose of the Plan is to provide designated executive and professional employees of the Employer Group (defined below) with an opportunity and an incentive to save a portion of their Compensation and to provide benefits upon death or any Separation from Service, subject to certain conditions intended to encourage their continued strong interest in the Employer Group’s success.

     (b) Compliance with Code Section 409A. During the period between January 1, 2005, and December 31, 2007, the Plan Sponsor and the Retirement Committee have, except to the extent otherwise provided in Section 1.04, operated and administered the Plan in a manner that complied in good faith with Code section 409A, Internal Revenue Service Notice 2005-1, the Proposed Regulations issued under Code section 409A on October 4, 2005, Internal Revenue Service Notice 2006-79 and subsequent guidance issued under Code section 409A, notwithstanding any contrary provisions of the Plan other than Section 1.04. After December 31, 2007, this Plan shall, except to the extent otherwise provided in Section 1.04, be interpreted, operated and administered in a manner intended to comply in good faith with Code section 409A, Internal Revenue Service Notice 2005-1 (and other Notices that have not been revoked for 2008), and the Treasury Regulations issued thereunder. After December 31, 2008, this Plan shall, except to the extent otherwise provided in Section 1.04, be interpreted, operated and administered in a manner intended to comply with Code section 409A and the Treasury Regulations issued thereunder.

     1.03 Adoption by Affiliates. With the consent of the Plan Sponsor, this Plan has been adopted by certain of the Plan Sponsor’s Affiliates (as defined below) for the benefit of such of its executive and professional employees as each such Affiliate may recommend for designation by the Retirement Committee.

     1.04 Plan Benefits Exempt from Compliance with Code Section 409A.

     (a) Treatment of Exempt Benefits. Notwithstanding any contrary provisions of the Plan other than this Section 1.04, to the extent that any portion of the balances in a Participant’s Deferral Account and Employer Contribution Account (and any subsequent Investment Returns or Losses on such balances) was no longer subject to forfeiture under Article 6 of the Plan as of December 31, 2004 (an “Exempt Benefit”), the Exempt Benefit shall be separately accounted for under the Plan, administered and paid after 2004 without regard to Code section 409A or any Plan amendment adopted after December 31, 2004, except for: (i) this Section 1.04 (including any amendments thereto); (ii) Section 9.02(b)(ii) of this instrument, which no longer includes the 20-year installment payment option and requires installment payments to be made monthly; (iii) Section 2 of the First Amendment to the Plan (dated in 2005), which is now the first paragraph of Section 7.02 of this instrument and was intended to change the method of calculating Investment Return or Loss; (iv) Section 18 of the Second Amendment (dated in 2006), which is now Section 9.06 of this instrument and is intended to comply with Code section 3121(v)(2); (v) Section 9.08 of this instrument, which allows accelerated payment of small benefit amounts; and (vi) any other amendment that is not a material modification (as defined in

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subsection (c) below) of the Plan (or the Trust established under Section 12.02) made after October 3, 2004, with respect to the Exempt Benefit.

     (b) Exempt Benefit Amounts. The amount of a Participant’s Exempt Benefit (if any) shall initially be equal, as of December 31, 2004, to the portion of the Participant’s Deferral Account balance derived from Compensation deferred by the Participant under a Deferral Agreement, plus the portion (if any) of the Participant’s Employer Contribution Account balance derived from Matching Contributions (if any) that was no longer subject to forfeiture under Article 6; and such account balances shall include any amounts that were required under the Plan to be credited as of that date, had not yet been credited, and were actually credited as at later time. The Exempt Benefit amount shall thereafter include any later adjustments for subsequent Investment Returns or Losses on such balances.

     (c) Material Modifications. A modification of the Plan is a “material modification” only if a benefit or right existing as of October 3, 2004, is materially enhanced or a new material benefit or right is added (whether or not permitted under Code section 409A); and such material enhancement or addition affects any Exempt Benefit; provided, however, that the none of the following actions is a material modification:

     (i) the Retirement Committee or any member of the Employer Group exercises its discretion over the time and manner of payment of an Exempt Benefit, to the extent such discretion is expressly provided under the terms of the Plan as in effect on October 3, 2004, which are set forth in the amended and restated Plan document effective as of January 1, 2004 (the “2004 Plan Document”), to the extent such discretion has not been limited or eliminated by any provision of this Plan document that applies to Exempt Benefits;

     (ii) a Participant’s exercise of any right permitted under the 2004 Plan Document with respect to an Exempt Benefit, to the extent such right has not been limited or eliminated by any provision of this Plan document that applies to Exempt Benefits;

     (iii) any reduction, limitation or elimination of an existing benefit or right with respect to an Exempt Benefit;

     (iv) any modification of or addition to the investment funds used to measure Investment Return or Loss; or

     (v) any modification, such as Section 9.08 of this instrument, that allows the Employer Group or the Retirement Committee to require distribution of the entire vested Plan benefit of a Participant, an Alternate Payee or a Beneficiary (including an Exempt Benefit and any benefits under any other Employer Group arrangements that must be aggregated with this Plan under Code section 409A) in a lump sum that does not exceed the applicable dollar amount under Code section 402(g)(1)(B) ($15,500 in 2007 and 2008).

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ARTICLE 2
DEFINITIONS

     2.01 Use of Definitions. Whenever used in the Plan, the following words and phrases shall have the meanings set forth below unless the context plainly requires a different meaning. When the defined meaning is intended, each of the following terms is capitalized.

     2.02 “Account” means the combined separate accounts that the Plan Sponsor maintains on its books for a Participant under the Plan. This Plan provides for Deferral Accounts and Employer Contribution Accounts. Effective as of January 1, 2005, if a Participant is entitled to an Exempt Benefit, each of those separate Accounts maintained for the Participant shall be divided into separate sub-Accounts, one containing any Exempt Benefits and another containing all other benefits accrued for the Participant in that Account. Effective as of January 1, 2005, a separate Account shall be established for any Participant who remains employed or is re-employed after a Separation from Service and is eligible to participate in the Plan for any Plan Year beginning after the Separation from Service.

     2.03 “Affiliate” means, effective as of January 1, 2005, any business entity or other person with whom the Plan Sponsor would be treated as a single employer as part of either (a) a controlled group of corporations described in Code section 414(b), or (b) a group of trades or businesses (whether or not incorporated) that are under common control as described in Code section 414(c), or some combination of such groups.

     2.04 “Alternate Payee” means a Participant’s former spouse who is entitled to receive any share of the Participant’s Account pursuant to a court order that has been qualified under Section 13.03(b).

     2.05 “Beneficiary” means a person designated pursuant to Section 9.11, to receive certain survivor benefits hereunder in the event of the death of a Participant or an Alternate Payee.

     2.06 “Code” means the Internal Revenue Code of 1986, as amended. References to a Code section shall be deemed to be to that section as it now exists and to any successor provision. Except as otherwise provided in Section 1.02(b), any references to a section of the Code shall also include any Treasury Regulations issued thereunder, and any other applicable guidance issued thereunder by the Internal Revenue Service.

     2.07 “Compensation” means a Participant’s wages, salaries, fees for professional service and other amounts received (whether or not paid in cash) for personal services actually rendered in the course of employment with the Employer Group, but only to the extent the amounts are includible in gross income; provided, however, that Compensation also includes elective contributions (amounts excludible from the Participant’s gross income under Code section 125, 132(f)(4), the Qualified Savings Plan or under this Plan), notwithstanding the exclusions listed below. Compensation includes, but is not limited to, commissions paid salespersons, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, and bonuses. Compensation does not include:

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     (a) Employer Group contributions to a plan of deferred compensation (to the extent the contributions are not included in the gross income of the Participant for the taxable year in which contributed), nor any distributions from a plan of deferred compensation, regardless of whether such amounts are includible in the gross income of the Participant when distributed.

     (b) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture.

     (c) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option described in Part II, Subchapter D, Chapter 1, Subtitle A of the Code.

     (d) Other amounts that receive special tax benefits, such as premiums for group term life insurance.

     (e) Any cash bonuses paid to any Participant to assist the Participant in paying income taxes resulting from either the issuance of stock in the Plan Sponsor to the Participant pursuant to the Plan Sponsor’s 2006 Equity Incentive Plan, as amended (or any predecessor, successor or modification to such plan), or any employment termination-related restrictions related to such stock.

     (f) Any amounts paid under the Long-Term Cash Incentive Plan (or any successor or modification to such plan) or any other plan adopted as a substitute or replacement for equity incentives as determined by the Committee.

     (g) Employee expense reimbursements, automobile allowances, taxable or nontaxable fringe benefits (whether or not paid in cash), director’s fees, contributions made by the Employer Group under any deferred compensation plan (including without limitation this Plan and the G&K Services Supplemental Executive Retirement Plan maintained by the Plan Sponsor), payments made by the Employer Group for group insurance, hospitalization and like benefits, severance pay, or contributions made by the Employer Group under any other employee benefit plan, other than Employer Group contributions made pursuant to any salary reduction agreements described in the preceding paragraph.

     Compensation shall include the following types of compensation paid after a Participant’s severance from employment with the Employer Group to the extent such amounts are paid by 2¹/2 months after Separation from Service:

     (h) Regular compensation for services during the Participant’s regular working hours, or compensation for services outside the Participant’s regular working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments if the compensation would have been paid to the Participant prior to a Separation from Service if the Participant had continued in employment with the Employer Group.

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     (i) Leave cashouts if the amounts would have been included in the definition of Compensation if they were paid prior to the Participant’s Separation from Service, and the amounts are payment for unused accrued bona fide sick, vacation, or other leave, but only if the Participant would have been able to use the leave if employment had continued.

     2.08 “Declared Rate” means, with respect to any Plan Year, the annual percentage interest rate determined by the Retirement Committee for such Plan Year, which rate shall not be less than the lowest rate paid on bank savings accounts in Minneapolis, Minnesota as of the date of such determination.

     2.09 “Deferral Account” means an account maintained for a Participant on the books of the Plan Sponsor, to which has been credited, pursuant to Article 8: (a) all Compensation deferred by the Participant under a Deferral Agreement, and (b) any Investment Return or Loss with respect to such deferred Compensation. Effective as of January 1, 2005, if a Participant is entitled to Exempt Benefits, his or her Deferral Account shall be divided into separate sub-Accounts, one containing the portion consisting of Exempt Benefits and another containing all other amounts maintained in that Deferral Account.

     2.10 “Deferral Agreement” means a written salary reduction agreement between a Participant and a member of the Employer Group pursuant to Article 4, regarding the Participant’s benefits and deferral of Compensation under this Plan.

     2.11 “Determination Date” ordinarily means the last day of each Plan Year (currently December 31); and also means any other date prescribed by the Plan as the date on which the balance of any Account is determined as provided in Section 8.02.

     2.12 “Disability” means, with respect to Exempt Benefits, the Participant’s disability as defined in the Plan Sponsor’s long-term disability plan then covering the Participant, which disability continues for at least 180 days. Disability means with respect to other benefits, that the Participant, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, either:

     (a) is unable to engage in any substantial gainful activity;

     (b) has received income replacement benefits for a period of not less than three months under such long-term disability plan or any other accident and health plan covering employees of the Employer Group; or

     (c) has been determined to be totally disabled by the Social Security Administration. Disability under subsections (a) and (b) shall be determined by a physician selected by the Employer Group. A Participant shall cooperate with the Employer Group, including making the Participant reasonably available for examination by physicians at the Employer Group’s request and at the Employer Group’s expense to determine whether or not the Participant is Disabled.

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     2.13 “Disability Benefit” shall have the meaning, effective as of January 1, 2005, set forth in the first paragraph of Section 9.03.

     2.14 “Employer Contribution Account” means an account maintained for a Participant on the books of the Plan Sponsor, to which has been credited, pursuant to Article 8: (a) all Employer Contributions allocated for the Participant under Article 5, and (b) any Investment Return or Loss with respect to such Employer Contributions. Effective as of January 1, 2005, if a Participant is entitled to Exempt Benefits, his or her Employer Contribution Account shall be divided into separate sub-Accounts, one containing the portion consisting of Exempt Benefits and another containing all other amounts maintained in that Employer Contribution Account.

     2.15 “Employer Contributions” shall mean any Employer Group contribution amounts allocated for a Participant as Employer Retirement Contributions under Section 5.02, Matching Contributions under Section 5.03 or Employer Transition Contributions under Section 5.04.

     2.16 “Employer Group” means the Plan Sponsor and all of its Affiliates.

     2.17 “Exempt Benefit” shall, at any particular time after December 31, 2004, mean an Exempt Benefit described in Section 1.04 that remains an Exempt Benefit under the terms of Section 1.04.

     2.18 “Fiscal Year” means, effective as of January 1, 2005, the Plan Sponsor’s fiscal year, which is currently a 52 or 53-week period generally including the period from each July through the next June.

     2.19 “Fiscal Year Incentive” means Compensation consisting of a bonus or other incentive that is based on a Fiscal Year, and is otherwise scheduled to be paid within two and one-half months after such Fiscal Year.

     2.20 “Investment Return or Loss” means the positive or negative net dollar amount, as applicable, determined under Article 7 as an adjustment of a Participant’s Account balance for any Plan Year or portion thereof.

     2.21 “Normal Retirement Date” means the date a Participant attains age 60.

     2.22 “Participant” means only an executive or professional employee of any member of the Employer Group that has adopted this Plan, if such employee has been specifically designated by the Retirement Committee for participation in this Plan for the next Plan Year. The Retirement Committee shall designate the Participants eligible to participate in this Plan during each Plan Year by no later than the last day of the prior Plan Year, or with respect to deferrals of a Fiscal Year Incentive, by no later than the last day of the Fiscal Year preceding the Fiscal Year with respect to which the deferral of Fiscal Year Incentive is being made. Any such individual shall remain a Participant, to the extent of his or her Account balance, until such Account balance is either forfeited or fully distributed under the Plan.

     2.23 “Plan” means the deferred compensation plan set forth in this instrument and as amended or restated from time to time, which is now called the “G&K Services Executive Deferred Compensation Plan.”

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     2.24 “Plan Sponsor” means G&K Services, Inc., a Minnesota corporation.

     2.25 “Plan Year” means the twelve (12) month period commencing each January 1 and ending the following December 31.

     2.26 “Qualified Savings Plan” means the G&K Services 401(k) Savings Incentive Plan, a qualified profit sharing plan containing a “cash-or-deferred arrangement” within Code section 401(k), established by the Plan Sponsor as of March 1, 1986, and as amended from time to time.

     2.27 “Retirement Benefit” means the retirement benefit described in Section 9.01.

     2.28 “Retirement Committee” means the Retirement Committee from time to time appointed by the Board of Directors of the Plan Sponsor to administer its Qualified Savings Plan. The Retirement Committee shall be this Plan’s Plan administrator.

     2.29 “Separation from Service” means, effective as of January 1, 2005, and solely for purposes of this Plan, the Participant’s Termination of Employment with the Employer Group (as defined at the end of this Section 2.29); provided, however, that:

     (a) Unless the Participant has resigned or been discharged from such employment, his or her employment with the Employer Group shall be treated as continuing, without a Separation from Service, while he or she is on military leave, sick leave or other bona fide leave of absence, if the period of such leave does not exceed six months or, if longer, any period during which the Participant’s right to return to active service with the Employer Group is provided either by applicable statute or by contract. If any such leave exceeds six months and the Participant has no statutory or contract right to return to active service with the Employer Group, he or she will be deemed to have a Separation from Service on the day after such six-month period ends. A leave of absence is a “bona fide leave of absence” only if there is a reasonable expectation that the Participant will return to perform services for the Employer Group.

     (b) Whether or not the Participant ceases to be a common-law employee of the Employer Group, his or her service with the Employer Group shall be treated as continuing, without a Separation from Service, while the Participant continues to provide bona fide services to any member of the Employer Group, in any capacity (other than as a member of its Board of Directors), as an employee, independent contractor or otherwise, at a level that is 50% or more of the average level of bona fide service performed by the Participant for the Employer Group in any capacity during the immediately preceding 36-month period (or any lesser period of such service), unless the following paragraph applies to the Participant.

     (c) Except as otherwise provided in paragraph (a) above, the Participant shall be treated as having a Separation from Service with the Employer Group if either (i) the Employer Group and the Participant reasonably anticipate that, as of a particular date, the Participant will no longer provide any services to the Employer Group (in any capacity); or (ii) any agreement or arrangement for continuing services to the Employer Group indicates that the Employer Group and the Participant reasonably anticipate that, as of a

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particular date, the level of bona fide services will permanently decrease to less than 50% of the average level of bona fide services provided during the preceding 36-month period (or any lesser period of such service).

     (d) For purposes of this definition of “Separation from Service,” any measurement of the level (or average level) of a Participant’s bona fide services during any period shall be based on work hours that are generally taken into account in determining the Participant’s compensation from the Employer Group, except as provided otherwise in the following sentence. During any portion of the Participant’s bona fide leave of absence described in paragraph (a) above, before the Participant’s Separation from Service occurs, such measurement shall be based on the following factors, as applicable: (i) if the Participant is receiving any form of compensation from the Employer Group during the leave, the Participant shall be treated as providing the same level of bona fide services as would have been required for such compensation in the absence of the leave; or (ii) if the Participant is not receiving any form of compensation from the Employer Group during the leave, the period of the leave is disregarded.

     (e) For purposes of this definition of “Separation from Service,” but not the following definition of Termination of Employment, the definition of “Employer Group” shall be modified as provided in the definition of Separation from Service under Code section 409A, by reducing certain ownership thresholds from 80% to 50%.

     2.30 “Termination of Employment” shall mean the Participant’s ceasing to be employed as a common-law employee of the Employer Group for any reason whatsoever, voluntary or involuntary, other than by reason of his or her death or an approved leave of absence.

     2.31 “2004 Plan Document” means the amended and restated Plan document effective as of January 1, 2004.

ARTICLE 3
PARTICIPATION

     3.01 In General. Each Participant shall be entitled to participate in this Plan as of the first day of the Plan Year following his or her selection as a Participant for that Plan Year (or with respect to deferrals of Fiscal Year Incentives, as of the first day of the Fiscal Year following his or her selection as a Participant for that Fiscal Year). A Participant’s right to defer Compensation and receive any further allocations of Employer Contributions shall cease at the earliest of (a) the Participant’s death, (b) the Participant’s Termination of Employment, (c) the Participant’s Separation from Service, or (d) the beginning of any Plan Year following the Plan Year of the Participant’s initial eligibility, if the Retirement Committee does not select the employee as a Participant for such following Plan Year.

     If a Participant does not have a Termination of Employment, but is not eligible to defer Compensation or receive any further allocations of Employer Contributions for any Plan Year, the balance of his or her Account shall nevertheless continue to be credited or debited with any

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Investment Return or Loss as of each Determination Date, except as otherwise provided in Section 12.03, until the entire Account balance is paid or forfeited under this Plan.

     3.02 Participation Conditions. As a condition of participation in and receipt of benefits under this Plan, each Participant agrees to (a) make an investment fund measurement election under Section 7.02(a), (b) observe all rules and regulations established by the Plan Sponsor or the Retirement Committee for administering the Plan, and (c) abide by all decisions of the Plan Sponsor or the Retirement Committee in the construction and administration of the Plan.

ARTICLE 4
PARTICIPANT COMPENSATION DEFERRAL

     4.01 Deferral Elections. Except as otherwise provided in this Section 4.01, it is effective as of January 1, 2005.

     (a) General Rule. Except to the extent provided otherwise in subsection (c) below with respect to Fiscal Year Incentives, if a Participant is eligible to participate in this Plan for a Plan Year, the Participant may elect to defer payment of a portion of his or her Compensation to be earned for services performed during that Plan Year, until the time such deferred Compensation becomes payable under this Plan, by timely filing an executed Deferral Agreement with the member of the Employer Group employing that Participant. Effective as of January 1, 2007, for purposes of deferring Compensation paid for a payroll period that began in the preceding Plan Year and includes the last day of the preceding Plan Year, all services performed during that period shall be treated as performed in the Plan Year in which the Compensation for that payroll period is paid, even if some of those services were performed in the preceding Plan Year.

     (b) Time for Deferral Election. To be effective, a Deferral Agreement must be filed with such member of the Employer Group before the first day of the Plan Year in which the Participant will perform the services for any Compensation that is to be deferred (except as otherwise specifically provided in this Article 4); and the Deferral Agreement shall remain in effect for that Plan Year and each later Plan Year in which the Participant remains eligible to defer Compensation under this Plan, unless the Participant revokes or amends the Deferral Agreement (in the same manner provided for a new Deferral Agreement) before the beginning of any such later Plan Year, or an earlier revocation is permitted as described in Section 4.04.

     (c) Compensation Based on Fiscal Year — 2007. This subsection (c) is effective as of January 1, 2007, and through December 31, 2007. A Participant’s Deferral Agreement may include an election to defer payment of a Fiscal Year Incentive, but only to the limited extent permitted under one of the following two subsections:

     (i) Performance-Based Fiscal Year Incentive. If the Participant is eligible to earn a Fiscal Year Incentive that is Performance-Based (as defined in the next paragraph) for the Fiscal Year ending within a Plan Year, and the Participant has performed services for the Employer Group continuously during the entire portion of such Fiscal Year before the Plan Year begins (or any shorter

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period after the performance criteria were determined for that Fiscal Year), then the Participant’s Deferral Agreement for that Plan Year may include an election to defer a portion (up to the limit stated in Section 4.03) of the Performance-Based Fiscal Year Incentive under this Plan, except for any portion that is not Performance-Based because it has been promised to the Participant by the Company or the performance criteria on which that portion is based has become readily ascertainable (as defined under Code section 409A) before that election is made.

     Any Fiscal Year Incentive for which a Participant is eligible is “Performance-Based” only if (A) it is contingent on the satisfaction of organizational or individual performance criteria (unrelated to the value of the Plan Sponsor’s capital stock) during a Fiscal Year of at least 52 weeks; (B) such criteria have been established in writing within 90 days after the beginning of the Fiscal Year and before satisfaction of the criteria is substantially certain; and (C) any subjective performance criteria are (1) bona fide; (2) relate to the performance of the Participant, any group of employees that includes the Participant or a business unit (including the Employer Group) for which the Participant provides services; and (3) will not be determined, in whole or in part, in the discretion of the Participant, any member of his or her family (as defined under Code section 409A), or any person under the effective control of the Participant or any such family member, nor may any of those persons determine any amount of the Fiscal Year Incentive that is based on subjective performance criteria.

     (ii) New Participant Exception. If a Participant making a Deferral Agreement for a Plan Year does not qualify to make a deferral election under the preceding subsection (i), and has not been eligible to participate in this Plan (except for any Investment Return or Loss adjustments to an existing Account balance) at any time during the two immediately preceding Plan Years, then the Participant’s Deferral Agreement may include an election to defer a portion (up to the limit stated in Section 4.03) of the following fraction of any Fiscal Year Incentive earned during the Fiscal Year that ends within the Plan Year covered by the Deferral Agreement, whether or not that Fiscal Year Incentive is Performance-Based. The numerator of such fraction is the number of days in the portion of the Fiscal Year that begins on the first day of the Plan Year covered by the Deferral Agreement, and the denominator is that same number of days plus the number of days (if any) in which the Participant performed services for the Employer Group during the portion of that same Fiscal Year which ended before that Plan Year begins.

     (d) Compensation Based on Fiscal Year — 2008. This subsection (d) is effective as of January 1, 2008. A Participant’s Deferral Agreement may include an election to defer payment of a Fiscal Year Incentive, by filing an executed Deferral Agreement with a member of the Employer Group employing that Participant. To be effective, a Deferral Agreement must be filed with such member of the Employer Group before the first day of the Fiscal Year in which the Participant will earn the Fiscal Year

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Incentive. The Deferral Agreement shall remain in effect for that Fiscal Year only unless an earlier revocation is permitted as described in Section 4.04.

     4.02 Minimum and Maximum Deferrals. A Participant’s Deferral Agreement shall specify an amount, if any, that the Participant elects to defer under the Plan, expressed as a percentage (no less than 1%, and subject to the following limits), from each of the following types of his or her Compensation for the Plan Year:

     (a) a separate percentage (if any), not more than 25%, to be deferred from Compensation payable as base salary; and

     (b) a separate percentage (if any), not more than 50%, to be deferred from any Compensation payable in cash as a Fiscal Year Incentive.

     4.03 Reduction of Compensation. A Participant’s Compensation otherwise payable during the Plan Year shall be reduced by the amount of any deferral set forth in his or her Deferral Agreement for that Plan Year (or the previous Plan Year, if applicable under Section 4.01(a) with respect to the payroll period for which such payment is made or under Section 4.01(d) to with respect to a Fiscal Year Incentive), unless the Deferral Agreement is terminated during the Plan Year as described in Section 4.04. The reduction of Compensation payable as base salary shall occur ratably for each pay period affected by the Deferral Agreement during the applicable Plan Year, and the reduction of Compensation payable as a bonus or other cash incentive shall occur whenever such incentive is due to be paid during the Plan Year.

     4.04 Election to Defer Irrevocable. A Participant’s election to defer Compensation shall be irrevocable for each Plan Year (or Fiscal Year for a Fiscal Year Incentive), unless the Retirement Committee permits the Participant to revoke the Deferral Agreement during the Plan Year (or Fiscal Year) under Section 9.05(a) or the Plan is terminated as permitted under Article 12.

ARTICLE 5
EMPLOYEE AND EMPLOYER CONTRIBUTIONS

     5.01 Employee Contributions. As of each payroll date during a Plan Year, the Plan Sponsor shall credit (pursuant to Section 8.01) to each Participant’s Deferral Account an amount equal to the percentage of the Participant’s Compensation otherwise payable on that payroll date and elected to be deferred by the Participant under Article 4 during that Plan Year (or the previous Plan Year, if applicable under Section 4.01(a) to the payroll period for which such payment is made or under Section 4.02 to Fiscal Year Incentive paid in that Plan Year).

     5.02 Employer Retirement Contributions. On a weekly basis during each Plan Year, the Plan Sponsor shall also credit (pursuant to Section 8.01), to the Employer Contribution Account of each Participant who is eligible under the following subsection (a), an “Employer Retirement Contribution” allocated by the Employer Group, in an amount equal to the sum of the amounts determined under subsection (b) below:

     (a) Eligible Participant. A Participant is eligible for an Employer Retirement Contribution during a Plan Year if he or she is eligible under Section 3.01 to defer

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Compensation during the Plan Year as provided in Article 4; and also satisfies either of the following conditions as of the day before the Plan Year begins:

     (i) the Participant is employed by the Employer Group in a position designated in its employment records as Vice President or any higher office; or

     (ii) the Participant has been employed by the Employer Group for at least the entire preceding Plan Year in a position designated in its employment records as General Manager or Director, and below the level of Vice President.

     (b) Amount of Employer Retirement Contribution. The dollar amount of the Employer Retirement Contribution allocated each week during a Plan Year, for any Participant who is eligible under the preceding subsection (a) for the Plan Year, is equal to the sum of the following amounts:

     (i) 2.5% of the Participant’s Compensation paid during each week of the Plan Year, plus

     (ii) 4% of the Participant’s Excess Compensation paid during any week of the Plan Year in which the Participant is paid Excess Compensation. For purposes of this subsection (b), “Excess Compensation” means Plan Year Compensation in excess of $200,000 (or such other amount as the Commissioner of Internal Revenue may prescribe in accordance with section 401(a)(17)(B) of the Code). Such other amount is $225,000 for 2007 and $230,000 for 2008.

     An Employer Retirement Contribution for a Plan Year will be allocated for each Participant who is eligible for that allocation during the Plan Year, whether or not the Participant elected to defer any Compensation under Article 4 for the Plan Year.

     5.03 Matching Contributions. On a weekly basis during each Plan Year, the Plan Sponsor shall also credit (pursuant to Section 8.01), to the Employer Contribution Account of each Participant who is eligible under Section 5.02(a) for allocations of Employer Retirement Contributions for the Plan Year, a “Matching Contribution” allocated by the Employer Group, in an amount equal to 50% of any Eligible Contributions deferred by the Participant from Compensation otherwise payable during that week of the Plan Year.

     “Eligible Contributions,” for purposes of allocating weekly Matching Contribution for a Participant, means the Compensation deferred by the Participant under this Plan for that week of the Plan Year, but excluding any amount in excess of 10% of the Participant’s Compensation for that week of the Plan Year.

     5.04 Employer Transition Contributions. On a weekly basis during each Plan Year, the Plan Sponsor shall also credit (pursuant to Section 8.01), to the Employer Contribution Account of each Participant who is eligible under the following subsection (a), an “Employer Transition Contribution,” in an amount equal to the applicable percentage (in the table set forth in subsection (b) below) of the eligible Participant’s Compensation paid during that week of the Plan Year.

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     (a) Eligible Participant. A Participant is eligible for an Employer Transition Contribution for a Plan Year if he or she is eligible to defer Compensation during the Plan Year under Article 4, and has attained age 50 by the first day of the Plan Year, but only if, as of December 31, 2006, he or she was a participant in both the G&K Services Pension Plan maintained by the Plan Sponsor (the “Qualified Pension Plan”), and the G&K Services Supplemental Executive Retirement Plan maintained by the Plan Sponsor, and the Participant had by then either:

     (i) attained age 50 and completed at least five years of service for vesting purposes under the Qualified Pension Plan; or

     (ii) if he or she had not attained age 50, the total of the Participant’s age and years of service for vesting purposes under the Qualified Pension Plan was at least 60.

     (b) Amount of Employer Transition Contribution. The dollar amount of the Employer Transition Contributions allocated for any such eligible Participant during a Plan Year is based on his or her age on January 1 of that Plan Year, and Compensation paid during that Plan Year, as shown in the following table:

Participant’s Age (on January 1 of the Plan Year)	Employer Transition Contribution
At least 50, but less than 55	1% of Compensation
At least 55, but less than 60	2% of Compensation
At least 60	3% of Compensation

     An Employer Transition Contribution for a Plan Year will be allocated for each Participant who is eligible for that type of Employer Contribution during the Plan Year, whether or not the Participant elected to defer any Compensation under Article 4 for the Plan Year.

ARTICLE 6
VESTING AND FORFEITURES

     6.01 Fully Vested Deferral Account. The interest of a Participant (or any Alternate Payee with respect to the Participant) in the Participant’s Deferral Account, consisting of the amounts deferred from the Participant’s Compensation under the Plan, and any Investment Return or Loss attributable to such amounts, shall be fully vested and non-forfeitable at all times.

     6.02 Vesting and Forfeiture of Employer Contribution Account. The interest of a Participant (or any Alternate Payee with respect to the Participant) in the Participant’s Employer Contribution Account, consisting of allocated Employer Contributions and any Investment Return or Loss attributable to such contributions, shall initially be entirely forfeitable under the last paragraph of this Section 6.02, but will become fully vested and non-forfeitable as follows:

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     (a) Upon the Participant’s death or attainment of his or her Normal Retirement Date while employed as a common-law employee of the Employer Group;

     (b) If the Participant’s Termination of Employment (or any earlier Separation from Service) occurs before his or her Normal Retirement Date, then the Participant (and any Alternate Payee with respect to the Participant) shall be entitled, subject to the Competition forfeiture provided in Section 6.03, to a vested percentage of such amounts equal to 10% for each Plan Year in which the Participant (or any Alternate Payee with respect to the Participant) is credited with at least 1,000 “Hours of Service” (as defined in the Qualified Savings Plan) with the Employer Group, beginning with the Participant’s first full Plan Year of eligibility under this Plan (which excludes a Plan Year in which a Participant is permitted to make a Deferral Agreement with respect to a Fiscal Year Incentive, but is not permitted to make a Deferral Agreement with respect to Compensation otherwise earned during the Plan Year that includes the first day of that Fiscal Year), and excluding any service before January 1, 1989; or

     (c) Upon a Change in Control (as defined in Section 6.04), unless otherwise determined by the Board of Directors and a majority of the Continuing Directors (as defined in Section 6.04), that occurs while the Participant is employed as a common-law employee of the Employer Group, whether or not such employment is terminated upon or after such Change in Control.

     If a Participant’s Termination of Employment (or any earlier Separation from Service) occurs before the interest of the Participant (and any Alternate Payee with respect to the Participant) in the Participant’s Employer Contribution Account becomes fully vested under this Section 6.02, the non-vested percentage of the Employer Contribution Account determined under the preceding subsection (b) shall be forfeited as of the date of such Termination of Employment (or earlier Separation from Service).

     6.03 Forfeiture of Employer Contribution Account for Competition. Notwithstanding anything to the contrary in Section 6.02, the entire remaining balance of the Employer Contribution Account of a Participant (and any Alternate Payee with respect to the Participant) shall be forfeited if the Participant enters into Competition (as defined below) with the Employer Group within three years after his or her Termination of Employment (or any later Separation from Service), except that this Section 6.03 shall not apply if the Participant remained a common-law employee of the Employer Group on or after his or her Normal Retirement Date, or the Participant dies before any such Competition occurs.

     For purposes of this Plan, “Competition” means directly or indirectly:

     (a) engaging (as an owner, independent contractor or as a managerial or executive employee) either alone or in conjunction with any person or entity, in any activity in the branded identity apparel or facilities services businesses, including, but not limited to, the industrial laundry, textile and mat rental services or direct purchase industry that competes with the Employer Group by providing services or goods similar to those provided by the Employer Group to its customers within any market area served

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by the Employer Group at the time of the Participant’s Termination of Employment (or any later Separation from Service); or

     (b) disclosing or using for personal or another’s benefit any confidential proprietary information or trade secret of the Employer Group, including without limitation any list or other information concerning the Employer Group’s customers or agreements with customers.

     Pursuant to the authority granted in Section 11.02, the Retirement Committee may establish rules and procedures for establishing whether or not a Participant has entered into Competition with the Employer Group.

     6.04 Change in Control Definitions. Effective as of January 1, 2005, whenever used in this Article 6, the following words and phrases shall have the meanings set forth below, unless the context plainly requires a different meaning; and when the defined meaning is intended, each of the following terms is capitalized:

     (a) “Change in Control” means either the acquisition, during a 12-month period ending on the date of the latest such acquisition, of substantially all of the assets of the Plan Sponsor (except as provided in subsection (c) below); or the replacement of more than 50% of the members of the Board of Directors of the Plan Sponsor, within 30 days following the closing date of the earlier of the following two events, by directors whose appointment or election is not endorsed by a majority of its directors who were in office immediately before such closing date:

     (i) the acquisition, during a 12-month period ending on the date of the latest such acquisition, of Beneficial Ownership (as defined in subsection (b) below) of more than 50% (including stock held at the beginning of such 12-month period) of the total fair market value or total voting power of the stock of the Plan Sponsor, by a person or group acting together who did not own such percentage before such 12-month period; or

     (ii) a merger of the Plan Sponsor that results in the cancellation of the Plan Sponsor’s capital stock or the issuance of additional Plan Sponsor stock to a person (or group acting together) who would as a result of such merger hold Beneficial Ownership of more than 50% of the voting power of all Plan Sponsor stock.

     (b) “Beneficial Ownership” of stock by a person or group of persons shall be determined in accordance with Regulation 13D (or any similar successor regulation) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 and the regulations promulgated thereunder. “Beneficial Ownership” of more than 50% of any voting equity security may be established by any reasonable method, but shall be presumed conclusively as to any person who files a Schedule 13D report with the Securities and Exchange Commission reporting such ownership. If the forfeitability provisions of Section 6.02 are eliminated by reason of clause (a)(i) of this Section 6.04, the forfeiture provisions of Section 6.02 shall not

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become applicable again should any such person or group cease to Beneficially Own 50% or more of any voting equity security of the Plan Sponsor.

     (c) Asset Acquisition Exceptions. However, an acquisition of substantially all of the Plan Sponsor’s assets is not a “Change in Control” if the assets are transferred to any of the following:

     (i) a shareholder of the Plan Sponsor (immediately before the transfer) in exchange for, or with respect to, the shareholder’s stock in the Plan Sponsor;

     (ii) any entity, 50% of the total value or voting power of which is Beneficially Owned, directly or indirectly, by the Plan Sponsor;

     (iii) a person or group acting together that Beneficially Owns (immediately before the transfer), directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Plan Sponsor; or

     (iv) an entity, at least 50% of the total value or voting power of which is Beneficially Owned, directly or indirectly, by a person described in the preceding clause (iii).

     For purposes of the preceding four exceptions, except as otherwise provided therein, a person’s status is determined immediately after the transfer of the assets.

     (d) “Continuing Directors” are (i) directors who were in office before the time any events described in subsection (a) of this Section 6.04 occurred, or any person publicly announced an intention to acquire 20% or more of any equity security of the Plan Sponsor; (ii) directors in office for a period of more than two years as of the date that the status of the director is being determined, and (iii) directors nominated and approved by the Continuing Directors.

ARTICLE 7
INVESTMENT RETURN OR LOSS

     7.01 Determination of Investment Return or Loss. This Section 7.01 is effective as of January 1, 2006. The Investment Return or Loss for a Participant’s Account shall be determined by the Retirement Committee as of each Determination Date; and shall be the net amount necessary to increase or decrease (as applicable) the balance of the Participant’s Account to the amount it would have been on that date if any balance of the Account and any deferred Compensation and Employer Contributions credited thereto under Section 8.01 as of various dates during the period after the immediately preceding Determination Date had actually been invested through the Determination Date in one or more of the investment funds described below and chosen by the Participant for that period pursuant to Section 7.02.

     More specifically, if any of the investment funds chosen as a measurement reference by a Participant is adjusted periodically for changes in market value, and that fund has a gain or loss in market value during any part of the period between Determination Dates in which any portion of his or her Account is deemed to be invested in that fund, that portion of the Account shall be

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increased or decreased by the same percentage gain or loss, as applicable, as that enjoyed or suffered by the investment fund for the same period; and the net sum of any such increases and decreases will be added to any increases or decreases in other portions of the Account that may result from increases or decreases in the value of any other investment funds in which such other portions are deemed to be invested during the same period.

     7.02 Options For Measurement of Investment Return or Loss.

     (a) Annual Investment Fund Election. Solely for the purpose of determining a Participant’s Investment Return or Loss as of any Determination Date within each Plan Year, each Participant shall make an election (in the manner prescribed by the Retirement Committee) at the beginning of each Plan Year (or for a Participant whose first Deferral Agreement is with respect to a Fiscal Year Incentive, at the time the Deferral Agreement is made) or any other time permitted under this Section 7.02, to treat his or her Account (including all deferred Compensation, and Employer Contributions credited thereto for the Plan Year) as if it were invested for the applicable part of the Plan Year in one or more of the investment funds described in Exhibit A attached to the Plan and hereby made a part hereof for the applicable portion of the Plan Year, according to the percentage or percentages selected by the Participant and totaling 100%. No employee of the Employer Group shall be permitted to be a Participant unless the employee makes such an election; provided, however, that if for any reason a Participant has no election in effect, his or her Investment Return or Loss shall be measured with reference to a default investment fund designated by the Retirement Committee on Exhibit A, and that designation shall be treated as the Participant’s election for purposes of this Article 7 until one or more other funds are elected by the Participant.

     (b) Investment Fund Election Changes. Each Participant shall be allowed to change his or her investment fund measurement election, as of any business day on which the investment funds described in Exhibit A are re-valued by their respective managers and such valuations are published in readily available financial publications, by notifying the Retirement Committee or its agent of such change at a time (on or before such business day) and in the manner prescribed by the Retirement Committee. By making such elections, each Participant shall agree that the balance of his or her Account shall be increased or decreased for that Plan Year (or the appropriate portion thereof) by an Investment Return or Loss, as applicable, based on his or her elections. To the extent necessary to determine the Investment Return or Loss for a Participant’s Account, any date on which the Participant changes an investment fund election may be treated by the Retirement Committee (or its agent) as a Determination Date for purposes of allocating Investment Return or Loss under Section 8.01. The Retirement Committee (or its agent) may place such limits on the investment fund measurement election as it deems appropriate to reflect short term trading or other restrictions and may reflect in the Investment Return or Loss the fees and charges that would have been imposed had the Account been invested in an elected investment fund.

     (c) Description of Investment Funds for Elections. The Retirement Committee will furnish each Participant with a description of each of the investment funds available for purposes of measuring Investment Return or Loss under the Plan. An “investment

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fund” selected by the Plan Sponsor for use as a measurement tool under this Plan may be either an actual securities fund subject to market value fluctuations or a hypothetical account invested at a specified interest rate (such as a Declared Rate) without market value fluctuations. The Retirement Committee may amend Exhibit A at any time by attaching a revised Exhibit A to the Plan and providing a copy thereof to each Participant before the new investment fund choice(s) become available for such measurement purposes. If a Participant fails to deliver an election under this Section 7.02 to the Retirement Committee (or its agent) before the beginning of any Plan Year, the Participant shall be deemed to have elected to have his or her Investment Return or Loss measured with respect to the last investment fund election he or she made under the Plan or, if any such election fund is no longer listed in Exhibit A, in the most similar fund election or elections available for the new Plan Year under the current Exhibit A, as determined in the sole discretion of the Retirement Committee.

     (d) No Other Effect of Investment Fund Elections. The measurement of Investment Return or Loss under this Article 7 for a Participant’s Account shall not require the Plan Sponsor or any Trustee appointed under Section 13.02 to invest any Plan contributions or other amounts in any such investment fund or in any other way; provided, however, that the Retirement Committee may nevertheless elect in its sole discretion to do so (or direct such Trustee to do so) with respect to such amounts or any part thereof. To the extent any such investments are made by the Retirement Committee or such Trustee, they shall be subject to the conditions of Section 13.02 and no Participant shall have any rights in any such investments except as may be expressly provided under Section13.02 or any Trust agreement established thereunder.

ARTICLE 8
ACCOUNTING

     8.01 Establishment and Crediting or Debiting of Accounts. The Plan Sponsor shall establish a combined Account on its books for each Participant, consisting of a separate Deferral Account and separate Employer Contribution Account (each of which shall be further divided into two sub-Accounts, one for an Exempt Benefit, if any, and the other for any other benefits); and shall credit or debit the following amounts to such Accounts, as applicable, at the times specified below. Effective as of January 1, 2005, a separate Account shall be established for any Participant who remains employed or is re-employed after a Separation from Service and is eligible to participate in the Plan for any Plan Year beginning after the Separation from Service.

          (a) Time for Allocation of Contributions.

     (i) Deferred Compensation and Tax Withholding. Any Compensation that is deferred by the Participant under Section 5.01 shall be credited to his or her Deferral Account as of the date the Participant would otherwise have received the Compensation. The applicable member of the Employer Group shall deduct from the Participant’s non-deferred Compensation any amounts it is required to withhold under any state, federal or local law for taxes or other charges relating to the deferral amounts and applicable at the time Compensation is deferred.

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     (ii) Matching Contributions. Any Matching Contributions relating to Compensation deferred by the Participant under Section 5.01, and allocated to his or her Employer Contribution Account under Section 5.03, shall be credited as of the date the Participant would otherwise have received the deferred Compensation to which the Matching Contribution relates.

     (iii) Other Employer Contributions. Any Employer Retirement Contributions and Employer Transition Contributions allocated to the Participant’s Employer Contribution Account under Sections 5.02 and 5.04, with respect to the Participant’s Compensation for a week, shall be credited as of the date the Participant receives the Compensation for that week.

     (b) Investment Return or Loss. As of each Determination Date, the Plan Sponsor shall credit or debit, as applicable, to a Participant’s Account an amount equal to the Investment Return or Loss for the period since the immediately preceding Determination Date, as determined for the Participant under Section 7.01:

     (i) If any amount of net positive Investment Return is determined for the Account under Section7.01 for the period since the immediately preceding Determination Date, that amount shall be credited to the Account as of the latest Determination Date.

     (ii) If any amount of net negative Investment Loss is determined for the Account under Section 7.01 for the period since the immediately preceding Determination Date, that amount shall be debited against the Account as of the latest Determination Date.

     (c) Distributions. Any distributions made from a Participant’s Account balance under the Plan during the period since the immediately preceding Determination Date shall be debited against the Account as of the date of each distribution.

     (d) Forfeitures. Any forfeiture of the balance (or any portion thereof) of a Participant’s Employer Contribution Account under the Plan, during the period since the immediately preceding Determination Date, shall be debited against that Account as of the date the forfeiture occurred, if it is based on the Participant’s years of service or, if it is based on the Participant’s Competition, on the date the forfeiture is finally determined by the Retirement Committee, or, in the discretion of the Retirement Committee, as of the first day of the Participant’s Competition.

     8.02 Determination of Accounts. The balance of a Participant’s Account as of each Determination Date shall consist of the net sum of the following amounts: (a) the balance (if any) of such Account as of the immediately preceding Determination Date; plus (b) any amounts required to be credited to such Account pursuant to Section 8.01, during the period since the immediately preceding Determination Date; less (c) any amounts required to be debited against such Account pursuant to Section 8.01 during the period since the immediately preceding Determination Date.

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     8.03 Statement of Account. The Retirement Committee shall provide to each Participant, within one hundred twenty (120) days after the close of each Plan Year, a statement in such form as the Retirement Committee selects, setting forth the balances in his or her Deferral Account and Employer Contribution Account as of the last day of the Plan Year just ended.

     8.04 Accounting Device Only. A Participant’s Account shall be utilized solely as a device for the measurement and determination of the amounts to be paid to the Participant under this Plan. A Participant’s Account shall not constitute or be treated as a trust fund of any kind, notwithstanding the Plan Sponsor’s purchase or retention of any assets pursuant to Section 13.02, or its creation of any trust thereunder.

ARTICLE 9
PAYMENT OF BENEFITS

     9.01 Retirement Benefits. This Section 9.01 is effective as of January 1, 2005. If a Participant’s Separation from Service occurs after his or her Normal Retirement Date, the Participant shall be entitled to receive from the Plan Sponsor a Retirement Benefit based upon the vested balance of the Participant’s Account.

     (a) Immediate Commencement. If the Participant has not elected under Section 9.02 to defer commencement of the Retirement Benefit, the Retirement Committee shall determine the vested balance of the Participant’s Account under Section 8.02, treating the Separation from Service date as a Determination Date; and the Plan Sponsor shall commence payment of the Participant’s Retirement Benefit (other than any Exempt Benefit) based upon that vested Account balance in the applicable form provided below in Section 9.02, 30 days after the date of such Separation from Service, subject to any contrary provisions of this Article 9, such as Sections 9.07 (requiring a six-month delay of certain payments to a “Specified Employee”) and 9.08 (concerning lump sum payment of certain small benefit amounts).

     (b) Time for Payment of Exempt Benefit. Notwithstanding any other provisions of this Section 9.01, if any portion of a Participant’s Retirement Benefit payable under this Section 9.01 is an Exempt Benefit, that portion shall be separately accounted for and distributed in the manner and at the time determined under the 2004 Plan Document; provided, however, that the 20-year installment payment option and the option to receive installments less often than monthly, as previously available under the 2004 Plan Document, shall no longer be available for payments commencing on or after September 19, 2007, when the Retirement Committee adopted a resolution deleting that option from the Plan.

     (c) Deferred Commencement. If the Participant has elected under Section 9.02 to defer commencement of the Retirement Benefit (other than any Exempt Benefit) until a date permitted under Section 9.02 that is later than the commencement date provided in subsection (a) above, the Retirement Committee shall determine the balance of the Participant’s Account under Section 8.02, treating the elected commencement date as a Determination Date; and the Plan Sponsor shall as of that date commence payment

21

of the Participant’s Retirement Benefit based upon that Account balance in the applicable form provided below in Section 9.02, except as otherwise provided in Section 9.07 or Section 9.08. With respect to any portion of the Participant’s Account that is an Exempt Benefit, commencement of payment may be deferred to the extent provided under the 2004 Plan Document.

     9.02 Form and Time of Payment for Retirement Benefit or Disability Benefit. This Section 9.02 is effective as of January 1, 2005. Subject to any contrary provisions of this Article 9, if a Participant is entitled to have his or her Account balance payable as a Retirement Benefit under Section 9.01 or a Disability Benefit under Section 9.03, such balance (other than any Exempt Benefit) shall be paid as follows:

     (a) General Rules. Unless a Participant has elected otherwise under this Section 9.02, his or her Retirement Benefit or Disability Benefit (if either of them is applicable) shall be paid in 120 monthly cash installments beginning 30 days following the later of his or her Normal Retirement Date or the date of his or her Separation from Service, except to the extent that payment of the portion of a Disability Benefit derived from Employer Contributions must be delayed under Section 9.04(c) (if applicable) until after the third anniversary of his or her Termination of Employment (or any later Separation from Service). If any amount payable from an Account is not a Retirement Benefit or Disability Benefit, that amount shall be payable in cash lump sums at the times provided under Sections 9.04(b) and 9.04(c).

     (b) Permitted Elections. At any time and to the limited extent permitted by the last sentence of this subsection (b) or by Section 9.02(c), each Participant who is eligible under Section 9.02(c) to make the following elections may elect to have payment of any Retirement Benefit or Disability Benefit that he or she may earn:

     (i) made either in a cash lump sum, or in monthly installments payable during either a five-year or 10-year period; and

     (ii) commence as of the later of (A) 30 days after the Participant’s Separation from Service, or (B) any date specified in the election that is on or after his or her Normal Retirement Date and on or before his or her 65th birthday, except to the extent that payment of a Disability Benefit from an Employer Contribution Account must be delayed under Section 9.04(c) until the third anniversary of his or her Termination of Employment (or any later Separation from Service).

     A Participant’s initial election, if any, of a payment form and commencement date under this subsection (b) must be delivered to the Retirement Committee (on a form provided by the Retirement Committee) no later than the day before the first Plan Year in which he or she becomes a Participant (or if the first Deferral Agreement made by a Participant is a Deferral Agreement with respect to a Fiscal Year Incentive, then no later than the last day before the beginning of the Fiscal Year in which the Fiscal Year Incentive is earned). The Participant may not thereafter elect to change any such election

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(or the payment form and commencement date applicable in the absence of an election), except to the limited extent permitted under Section 9.02(c).

     Effective as of January 1, 2005, if a new Account is established under Section 5.01 for any Participant who either remains employed or is re-employed after a Separation from Service and has any balance remaining in an Account established before the Separation from Service, the Participant may make separate elections under this Section 9.02 for the payment of Plan benefits from that new Account, unless he or she is eligible under subsection (e) below to change the form and time of payments from the pre-existing Account under the following subsection (c), in which case such changes shall apply to both the previous Account and the new Account.

     (c) Elections to Change Form and Time of Payment.

     (i) Special Elections Made in 2006. Any Participant who was eligible under the last sentence of this paragraph (i), and had not received (nor was scheduled to receive) any payments from his or her Account before 2007, was entitled to make a new election under Section 9.02(b) at any time during 2006 that was permitted by the Retirement Committee; provided, however, that any such election applied only to amounts that were not otherwise payable in 2006, was not allowed to cause an amount to be paid in 2006 that would not otherwise have been payable in that year, and did not apply to any Exempt Benefit. A Participant was eligible to make an election under this paragraph (i) only if he or she was either employed by the Employer Group as of the date this Section 9.02(c) was adopted (December 6, 2006), or was a former employee who remained eligible to commence receiving Retirement Benefits or Disability Benefits after 2006.

     (ii) Special Elections Made in 2007. Any Participant who was eligible under the last sentence of this paragraph (ii), and had not received (nor was scheduled to receive) any payments from his or her Account before 2008, was entitled to make a new election under Section 9.02(b) at any time during 2007 that was permitted by the Retirement Committee; provided, however, that any such election applied only to amounts that were not otherwise payable in 2007, was not allowed to cause an amount to be paid in 2007 that would not otherwise have been payable in that year, and did not apply to any Exempt Benefit. A Participant was eligible to make an election under this paragraph (ii) only if he or she was either employed by the Employer Group on or after the date this Section 9.02(c) was adopted (December 6, 2006), or was a former employee who remained eligible to commence receiving Retirement Benefits or Disability Benefits after 2007.

     (iii) Special Elections Made in 2008. Any Participant who is eligible under the last sentence of this paragraph (iii), and has not received (nor is scheduled to receive) any payments from his or her Account before 2009, may make a new election under Section 9.02(b) at any time during 2008 that is permitted by the Retirement Committee; provided, however, that any such election shall apply only to amounts that would not otherwise be payable in 2008,

23

shall not cause an amount to be paid in 2008 that would not otherwise be payable in that year, and shall not apply to any Exempt Benefit. A Participant is eligible to make an election under this paragraph (iii) only if he or she was either employed by the Employer Group on or after January 1, 2008, or is a former employee who remains eligible to commence receiving Retirement Benefits or Disability Benefits after 2008.

     (iv) Elections After 2008 to Change Form and Delay Time of Payment. In addition, any Participant who is eligible under the last sentence of this paragraph (iv), and has not commenced receiving any payments from his or her Account, and whose initial commencement date is at least 12 months after the date the new election is made, may elect (at any time after 2008 that is permitted under this paragraph (iv) and by the Retirement Committee) to delay any commencement date already scheduled for his or her Retirement Benefit or Disability Benefit (other than any Exempt Benefit) under the preceding provisions of this Section 9.02, to any later date that is permitted under Section 9.02(b)(ii) and, except in the case of a Disability Benefit, is at least five years after the previously scheduled commencement date for that type of Plan benefit; and any Participant who does so may also elect to change the form of payment of that type of Plan benefit (other than any Exempt Benefit) to any form permitted under Section 9.02(b)(i); provided, however, that no election under this paragraph (iv) shall be effective until 12 months after the Retirement Committee receives the written election and, if any portion of the Participant’s Account becomes payable within such 12-month period at a time previously scheduled under the preceding provisions of this Section 9.02 (or any other Plan provision), such election shall not have any effect, and the Participant’s Account shall be payable at such previously scheduled time, in the manner previously required or elected under the Plan. An election under this paragraph (iv) may be made only by a Participant who has not attained age 59 and (A) is employed as a common-law employee of the Employer Group at the time the election is made, or (B) is a former employee of the Employer Group who remains eligible to commence receiving Retirement Benefits or Disability Benefits after the year in which he or she makes an election under this paragraph (iv).

     (v) Procedure for Subsequent Elections. Any election made by a Participant under this Section 9.02(c) shall be made (on a form provided by the Retirement Committee) and delivered to the Retirement Committee; and may at any time be prospectively revised by the Participant, but only to the limited extent provided in the other subsections of this Section 9.02 or Section 9.03.

     (vi) No Acceleration of Payments. Except to the extent specifically permitted or required under this Plan or the Trust established pursuant to Section 13.02, neither the Plan Sponsor (or the Retirement Committee) nor any Participant, Alternate Payee or Beneficiary shall have the right to have any benefit payment under this Plan paid before the time it is otherwise scheduled or required to be made under the Plan, except that any Exempt Benefit may be paid at any

24

applicable time permitted under the 2004 Plan Document or any provision of this Plan document that applies to Exempt Benefits.

     (vii) Elections by Alternate Payee. Any Alternate Payee who becomes entitled to a share of a Participant’s Account shall have the same election rights under this Section 9.02 (other than an election made by a new Participant) as the Participant, with respect to the Alternate Payee’s share; provided, however, that any such election may be made (A) only with respect to the Alternate Payee’s share of the Participant’s Account, (B) only if the Participant would be entitled to make the same election and (C) only at a time when the Participant would be allowed to make the same election. In addition, any Alternate Payee who becomes entitled to a share of a Participant’s Account shall also have such election rights that are reflected in, or made in accordance with, the terms of a qualified domestic relations order described in Section 13.03(b); provided, however, that any such election may be made (A) only with respect to the Alternate Payee’s share of the Participant’s Account, and (B) only to the extent that the distribution form and time elected is otherwise permitted under the terms of the Plan.

     (d) Calculation of Delayed Payment Amounts. If any payments will be made from an Account under this Article 9 in a form other than an immediate lump sum payment, then for as long as that Account has an undistributed balance, it shall continue to be credited or debited as of each Determination Date with the Participant’s Investment Return or Loss (except as otherwise provided in Section 12.03); provided, however, that no further distributions shall be made from an Account during a Plan Year to the extent the Retirement Committee estimates in its sole discretion that a distribution would cause the account to have a negative balance at the next Determination Date, after taking into account any estimated decrease in the Account resulting from an Investment Loss for the Plan Year. Except as otherwise provided in the preceding sentence or Sections 9.04(b) and 9.04(c), the Participant’s installment payments for each Plan Year of any installment period shall be calculated by dividing the distributable balance of the Account at the beginning of the Plan Year by the number of whole years remaining in the installment period. As of the end of the Plan Year that includes the final scheduled installment, the Plan Sponsor shall make a final payment to the Participant, consisting of any undistributed positive balance remaining in the Account, after taking into account the Investment Return or Loss for the Plan Year. If such final balance of the Account is a negative amount, the Participant shall return such amount to the Plan Sponsor promptly after receiving a written notice requesting repayment of such deficit.

     (e) Effect of Re-employment on Scheduled Benefit Payments. If (i) a Participant’s Separation from Service has occurred, (ii) he or she is entitled to receive any payment(s) from his or her Account (other than Exempt Benefits) at a previously scheduled time after the Separation from Service, and (iii) the Participant either continues to be employed or returns to employment with the Employer Group before the balance of his or her Account has been paid or forfeited, the vested balance of the Account shall nevertheless remain payable at the time and in the manner previously elected or provided under this Plan, whether or not such employment continues, unless such payment has not commenced and the Participant elects to delay its commencement (and/or elects a

25

different form of payment) at a time permitted under Section 9.02(b). This subsection (e) shall not apply to any Exempt Benefit or any new Account established for the Participant under Section 5.01 for any Plan Year beginning after the Separation from Service.

     9.03 Payment of Disability Benefit or Exempt Benefit After a Disability. This Section 9.03 is effective as of January 1, 2005. Subject to any contrary provisions of this Article 9, if a Participant’s Separation from Service occurs before his or her Normal Retirement Date as a result of a Disability, the Participant’s Account (other than any Exempt Benefit) shall be payable as a “Disability Benefit” at the time and in the manner provided under Section 9.02 for a Retirement Benefit, subject to any payment delay required under Section 9.04(c) or Section 9.07 (as applicable), or any different commencement date or payment method elected by the Participant under Section 9.02 for a Disability Benefit that is not an Exempt Benefit.

     If a Participant entitled to receive a Disability Benefit is also entitled to any Exempt Benefit, the Exempt Benefit shall not be treated as a Disability Benefit under this Article 9, but shall instead be payable pursuant to the provisions of the 2004 Plan Document applicable to payment of Plan benefits in the event of the Participant’s Disability.

     If a Participant dies while eligible to receive Disability Benefits, but before receiving any of those benefits, the Plan Sponsor shall pay to the Participant’s Beneficiary (or an Alternate Payee, to the extent required by the court order designating the Alternate Payee) the pre-retirement survivor’s benefit provided for in Section 9.09. If a Participant dies after receiving any amount of Disability Benefits, the Plan Sponsor shall pay to the Participant’s Beneficiary (or an Alternate Payee, to the extent required by the court order designating the Alternate Payee) the post-retirement survivor benefits, if any, due under Section 9.09.

     9.04 Minimum Benefits Payable Before Retirement or Disability. This Section 9.04 is effective as of January 1, 2005. To the extent any portion of a Participant’s Account has been assigned to an Alternate Payee, the distribution provisions of this Section 9.04 shall also apply to the Alternate Payee’s Account, so that the Alternate Payee’s Account balance will be payable at the same time as the Participant’s Account balance.

     (a) Amount of Minimum Benefit. Upon a Participant’s Separation from Service before his or her Normal Retirement Date, for any reason other than Disability, the rights of the Participant (or any Beneficiary) to benefits under this Plan shall cease, except that the Plan Sponsor shall pay to the Participant a minimum benefit from his or her Deferral Account and the portion of his or her Employer Contribution Account that is vested under Section 6.02. Subject to the service and Competition forfeiture provisions of Sections 6.02 and 6.03, the minimum benefit shall be equal to the entire balance of such Deferral Account and the vested portion of such Employer Contribution Account as of the Separation from Service date, calculated as if such date were a Determination Date, after deducting any forfeited percentage of the balance of the Employer Contribution Account.

     (b) Payment of First Portion from Deferral Account. Subject to any contrary provisions of this Article 9, the minimum benefit amount (including any applicable Disability Benefit, if the Participant’s Separation from Service occurs before his or her

26

Normal Retirement Date) determined under Section 9.04(a) shall be separated for payment purposes into two portions, and paid by the Plan Sponsor from the Participant’s Account as follows. The first portion, consisting of the entire balance of the Participant’s Deferral Account (except any Exempt Benefit), shall be payable as follows:

     (i) Minimum Benefit. If such first portion is not part of a Disability Benefit, such portion shall be payable in a lump sum 30 days after the date of the Participant’s Separation from Service.

     (ii) Disability Benefit. If such first portion is part of a Disability Benefit, such portion shall be payable under the applicable provisions of Section 9.02, except to the extent provided otherwise in the following sentence. If the Participant has elected to receive a Disability Benefit in the form of installments that will commence before the third anniversary of his or her Termination of Employment (or any later Separation from Service), the amount of each installment payable before that anniversary shall be determined only with respect to the balance of the Participant’s Deferral Account, until commencement of payment of the second portion (if any) of the Disability Benefit under the following subsection (c).

     (c) Payment of Second Portion from Employer Contribution Account. The second portion of the minimum benefit (or Disability Benefit), consisting of the balance of the non-forfeited percentage of the Participant’s Employer Contribution Account (except any Exempt Benefit), shall be payable (subject to the Competition forfeiture provisions of Section 6.03) from the Participant’s Employer Contribution Account in the following manner:

     (i) Minimum Benefit. If such second portion is not part of a Disability Benefit, such portion shall be payable in a lump sum (including any Investment Return or Loss credited or debited on such non-forfeited amount after the Participant’s Separation from Service), 30 days after the third anniversary of the date of the Participant’s Termination of Employment (or any later Separation from Service).

     (ii) Disability Benefit. If such second portion is part of a Disability Benefit, it shall be payable under the applicable provisions of Section 9.02, except that payment of such portion shall not commence before the third anniversary of the date of the Participant’s Termination of Employment (or any later Separation from Service). If the Participant has elected to receive a Disability Benefit in the form of installments, the amount of each installment payable after such third anniversary shall be determined with respect to the entire Disability Benefit remaining in the Participant’s Account.

     (d) Time for Payment of Exempt Benefit. If any portion of a Participant’s minimum benefit payable under this Section 9.04 is an Exempt Benefit, that portion shall be payable in the manner described in this Section 9.04, but at the time provided in the

27

2004 Plan Document (which is determined by reference to the Participant’s Termination of Employment, rather than the Participant’s Separation from Service).

     9.05 Unforeseeable Emergency or Hardship Distribution. Upon a written request by a Participant who is employed as a common-law employee of the Employer Group, and a finding by the Retirement Committee, based on documented facts provided by the Participant, that the necessary conditions for any of the following actions have been satisfied, the Retirement Committee shall take such actions, as applicable:

          (a) Cancellation of Deferral Election.

     (i) Unforeseeable Emergency. If the Participant is suffering from an Unforeseeable Emergency (as defined at the end of this Section 9.05), the Retirement Committee shall first cancel the Participant’s election to defer Compensation for the balance of the Plan Year in which the request is approved by the Retirement Committee (including any election to defer a Fiscal Year Incentive otherwise payable during that Plan Year); and the Participant shall not make any new Compensation deferral election for that Plan Year (including an election to defer a Fiscal Year Incentive for the Fiscal Year beginning in that Plan Year). If such cancellation is not sufficient to relieve the Participant’s Unforeseeable Emergency, the Retirement Committee shall direct a distribution from the Participant’s Account as provided under subsection (b) below.

     (ii) Hardship Distribution under Qualified Savings Plan. Whether or not a Participant suffers from an Unforeseeable Emergency, the Retirement Committee shall cancel the Compensation deferral election of any Participant who is required to cease such deferrals for at least six months, as a necessary condition for receiving a hardship distribution from the Qualified Savings Plan that has been approved by the Retirement Committee; and such cancellation shall be effective (A) for the balance of the Plan Year in which the Retirement Committee approves the Participant’s hardship distribution request under the Qualified Savings Plan (including with respect to a Fiscal Year Incentive otherwise payable during that Plan Year), and (B) if such minimum six-month period extends into the next Plan Year, for all of the next Plan Year (including any election to defer a Fiscal Year Incentive for the Fiscal Year beginning in that next Plan Year).

     (iii) Subsequent Deferral Election. If the Participant’s Compensation deferral election is canceled under this subsection (a) for any part of a Plan Year, the Participant may elect to defer Compensation under the Plan for any following Plan Year, at a time permitted under the preceding provisions of this subsection (a) and the other provisions of this Plan, if he or she remains eligible to participate under Section 3.01 for that following Plan Year.

     (b) Cash Distribution from Account. If the Participant is suffering from an Unforeseeable Emergency, and the action taken under the preceding paragraph (a)(i) is not sufficient to relieve the Unforeseeable Emergency, the Retirement Committee shall direct a cash lump sum distribution from the following portions of the Participant’s

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Account (other than any Exempt Benefit): first from the Participant’s Deferral Account and, to the extent necessary, next from the portion of his or her Employer Contribution Account that has become vested under Section 6.02, in an amount that the Retirement Committee determines, based on documented facts provided by the Participant, is reasonably necessary to relieve the Unforeseeable Emergency, including amounts necessary to pay any Federal, state and local income taxes and penalties reasonably anticipated to result from the distribution.

     In addition, the Retirement Committee may direct a cash lump sum distribution from the Exempt Benefit portion of the Participant’s Account, to the extent necessary to relieve any remaining financial hardship pursuant to Section 9.06 of the 2004 Plan document, after taking into account any distribution being made under this Section 9.05(b) for an Unforeseeable Emergency based on the same facts as the financial hardship; and a distribution from the Exempt Benefit may be made whether or not the financial hardship qualifies as an Unforeseeable Emergency.

     Any such distributions shall reduce the balance of the Participant’s Deferral Account and, if applicable, the vested balance of the Employer Contribution Account; and neither the Participant, nor his or her spouse or other Beneficiary, shall be entitled to any further rights under this Plan with respect to amounts distributed to the Participant under this Section 9.05(b). For any subsequent calculation of the vested balance of the Participant’s Employer Contribution Account, the amount distributed under this Section 9.05(b) shall be added back to that account, before determining its vested percentage, and then deducted from the resulting vested amount. The Participant shall have no right to make extra deferrals of Compensation to replace any amount distributed under this Section 9.05(b).

     For purposes of this Section 9.05, “Unforeseeable Emergency” means a Participant’s severe financial hardship resulting from:

     (a) an illness or accident harming the Participant, his or her spouse (as defined in the Qualified Savings Plan), the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code section 152, without regard to its subsections (b)(1), (b)(2) and (d)(1)(B));

     (b) loss of (or damage to) the Participant’s property due to casualty; or

     (c) any other similar extraordinary and unforeseeable circumstances arising from events beyond the control of the Participant;

but only to the extent that such hardship cannot be relieved by any other reimbursement or compensation (from insurance or otherwise), or by liquidation of the Participant’s assets (to the extent that liquidation would not cause severe financial hardship). For this purpose, the Participant’s assets shall not include any distributions or loans available under the Qualified Savings Plan (or any other plan intended to be qualified under section 401(a) of the Code) or any distributions that, due to the Unforeseeable Emergency, are available under any other non-qualified deferred compensation arrangement described in Code section 409A (including a plan

29

that would be governed by Code section 409A, but for its effective date provisions). For example, medical or funeral expenses will qualify if they cause a severe financial hardship, but not educational expenses or the purchase or improvement of a residence.

     9.06 Withholding or Advance Benefit Distribution for FICA Taxes. This Section 9.06 is effective as of January 1, 2005. The Plan Sponsor shall comply with Code section 3121(v)(2), with respect to taxes due on Employer Contributions under the Federal Insurance Contributions Act (“FICA Taxes”), by deferring the withholding and payment of FICA Taxes on the present value of a Participant’s Employer Contribution Account (as determined under that Code section) until the first date on which the balance of his or her Employer Contribution Account is no longer subject to forfeiture under Article 6 (the “Resolution Date”); and withholding such FICA Taxes as provided in the following three paragraphs (as applicable); provided, however, that, if any Plan benefits are paid to a Participant from his or her Employer Contribution Account before his or her Resolution Date, FICA Taxes shall be withheld (pursuant to Section 9.13) from each such payment, after taking into account any FICA Tax withholding obtained (without regard to Plan benefits other than additional deferrals under Section 4.01) from any other compensation payable to the Participant in that calendar year. If Participant dies after his or her benefit payments have commenced, but before his or her Resolution Date, the date of death shall be the Resolution Date for any of the Participant’s Plan benefits that have not been forfeited before his or her death.

     (a) Withholding from Benefit Payment. If the Participant’s Resolution Date occurs in the same calendar year in which any payment of his or her Plan benefits is made or commences on or after that date, all of the FICA Taxes to be withheld as of the Resolution Date shall be (i) first withheld from the next benefit payments due in that year, to the extent those payments are sufficient for that purpose and other tax withholding requirements; and (ii) to the extent necessary, withheld from a special distribution of Plan benefits pursuant to the following paragraph, in either case after taking into account any FICA Tax withholding obtained (without regard to Plan benefits other than additional deferrals under Section 4.01) from any other compensation payable to the Participant in that calendar year.

     (b) Withholding from Advance Distribution. If the Participant’s Resolution Date has occurred, and (i) payment of his or her Plan benefits will not commence by the end of the calendar year in which Resolution Date occurred, or (ii) any Plan benefit payments due in that year are not sufficient (after taking into account FICA Tax withholding obtained, without regard to Plan benefits other than additional deferrals under Section 4.01, from the Participant’s other compensation in that calendar year) to satisfy the FICA Tax withholding tax obligation due with respect to the balance of his or her Employer Contribution Account as of the Resolution Date, then the Plan Sponsor shall distribute during that year, at a time permitted under the applicable FICA Tax regulations, a lump sum portion of the Participant’s Employer Contribution Account equal to the sum of such FICA Tax withholding tax obligation and any Federal, state and local income taxes also required to be withheld under Section 9.13 as a result of that total distribution. The balance of the Participant’s Employer Contribution Account shall be reduced by the total amount of that distribution, pursuant to Section 8.01(c); and any

30

subsequent installment distributions from that account shall be based on the reduced balance.

     (c) Treatment of Alternate Payee’s Benefit. If any portion of the Participant’s Account has been assigned to an Alternate Payee, such portion shall be taken into account under this Section 9.06 as if it were owned by the Participant, to the extent required under FICA Tax rules referenced in Section 13.03(b), but any resulting FICA Taxes will be deducted or distributed only from the Participant’s share of Plan benefits.

     9.07 Six Month Delay of Benefit Payments to Specified Employees. Except as otherwise provided below, this Section 9.07 is effective as of January 1, 2005. Notwithstanding any contrary provisions of this Plan, if a Participant is treated as a Specified Employee (as described in the following paragraph), as of the date of his or her Separation from Service, no benefits (except for any Exempt Benefits that remain in his or her Account as of that date) may be paid to the Participant under this Plan before a date that is at least six months after the date of his or her Separation from Service (or, if earlier, the date of the Participant’s death). If any payments of the Participant’s benefits (other than any Exempt Benefits) under this Plan are otherwise scheduled to be made before the end of such period, those benefit payments will be made (without interest) in a lump sum immediately after the end of such period, subject to the Competition forfeiture provisions of Section 6.03. Any Exempt Benefit shall be payable under the terms of the 2004 Plan Document. This Section 9.07 does not apply to any share of the Participant’s Account assigned to an Alternate Payee.

     (a) Specified Employee Definition. For purposes of this Plan, “Specified Employee” means an individual who is a “key employee,” as defined in the following paragraph, of the Employer Group (as determined under the last paragraph of this Section 9.07) at any time during the 12-month period ending on December 31, 2004, or ending on any later December 31st. Except as otherwise provided in the following paragraph (d), if an individual is identified as such a “key employee” during any such 12-month period, he or she shall be treated as a Specified Employee under this Section 9.12 for the 12-month period beginning on the next April 1st; provided, however, that a Participant shall not be treated as a Specified Employee if no stock of the Plan Sponsor or an Affiliate is publicly traded on an established securities market (or otherwise) as of the date of the Participant’s Separation from Service.

     (b) Key Employee Definition. This paragraph (b) is effective for determining “key employees” for any 12-month period ending on or after December 31, 2007. For purposes of the preceding paragraph, “key employee” means any employee of the Employer Group who, at any time during a 12-month period described in that paragraph: (i) has annual compensation exceeding $130,000 (as defined under Code section 409A and adjusted for inflation under section 416(i)(1)(A) of the Code), and is deemed to be an “officer” of any member of the Employer Group, because he or she is one of the highest-paid 75 employees of the Employer Group for that 12-month period; or (ii) is a more than 5% owner of the Plan Sponsor, or (iii) is a more than 1% owner of the Plan Sponsor and has annual compensation (as defined under Code section 409A) exceeding $150,000. For 12-month periods before 2007, the number of officers taken into account under clause (i) shall not exceed the greater of 3 or 10% of the total number of employees (after

31

application of the exclusions in section 414(q)(5) of the Code), but no more than 50 officers. The Retirement Committee will make the determination of who is a “key employee” under Code section 416(i)(1) (which includes the definition of “more than 5% owner” and some other terms used in this paragraph), except that the Retirement Committee shall disregard Code section 416(i)(5), which includes as “key employees” the beneficiaries of key employees.

     (c) Effect of Corporate Transactions. If a corporate transaction combines into a single Employer Group the Plan Sponsor and any other corporation whose stock was also publicly traded on an established securities market (or otherwise) immediately before the transaction, their lists of Specified Employees shall be combined and, until the next April 1^st (or any earlier date for listing Specified Employees of the combined Employer Group), the Specified Employees of the combined Employer Group shall include the highest paid 50 officers on that combined list (without regard to the 75-employee rule of paragraph (c) above), plus any other Specified Employees whose status is based on being a 1% or 5% owner in the combined Employer Group. If a corporate transaction combines into a single Employer Group the Plan Sponsor and any other corporation whose stock was not publicly traded immediately before the transaction, and any stock of a member of the combined Employer Group is publicly traded on an established securities market (or otherwise) immediately after the transaction, the Specified Employees of the Plan Sponsor’s pre-transaction Employer Group shall remain the only Specified Employees of the combined Employer Group until the next April 1^st. If a corporate transaction separates the Employer Group into two separate Employer Groups, each of which has stock that is publicly traded on an established securities market (or otherwise) immediately after the transaction, the Specified Employees of the Plan Sponsor’s pre-transaction Employer Group shall remain the only Specified Employees of the separate Employer Groups until the next April 1^st.

     9.08 Lump Sum Payment of Small Non-forfeitable Benefit. This Section 9.08 is effective as of January 1, 2008; and before that date, the terms of Section 16 of the Second Amendment to the 2004 Plan Document shall remain in effect. Notwithstanding any contrary provisions of this Article 9, except for Section 9.07, the Retirement Committee may, in its sole discretion, direct the Plan Sponsor to distribute in a cash lump sum, to any Participant who either has a Separation from Service or has otherwise ceased to be eligible to participate under Section 3.01, the entire unpaid and non-forfeited balance of the Participant’s Account (including any Exempt Benefit), at any time after either of such events (whether or not any installment distributions have commenced from the Account) and before such distribution is otherwise scheduled to be completed, but only if:

     (a) such balance is no longer subject to forfeiture under Article 6; and

     (b) such balance, together with the Participant’s benefits under all non-qualified deferred compensation arrangements that are sponsored by the Employer Group and are aggregated with this Plan as a “single plan” under Code section 409A, is less than the applicable dollar amount under Code section 402(g)(1)(B), as adjusted for inflation under section 402(g)(4) of the Code (to $15,500 in 2007 and 2008), as of the date of distribution under this Section 9.08, determined as if that date were a Determination Date.

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     This Section 9.08 shall apply to an Alternate Payee or Beneficiary as if the recipient were a Participant; provided, however, that except to the extent permitted or required under a qualified domestic relations order described in Section 13.03(b), no payment shall be made to an Alternate Payee who is entitled to a share of a Participant’s Plan benefit until after the Participant has had a Separation from Service or has otherwise ceased to be eligible to participate under Section 3.01.

     9.09 Survivorship Benefits. If a Participant dies while employed by the Employer Group, the Plan Sponsor shall pay to the Participant’s Beneficiary a survivorship benefit equal to the balance of the Participant’s Account as of the date of Participant’s death, calculated by treating such date as a Determination Date. The survivor’s benefit shall be payable in one lump sum on the 30th day after the Participant’s death. Payment of the survivor’s benefit under this paragraph shall relieve the Plan Sponsor of the obligation to pay any benefit that the Participant would have otherwise received under the other provisions of this Article 9.

     If a Participant or Alternate Payee dies after becoming eligible for benefit payments (other than payment of any Exempt Benefit), but before receiving all of the scheduled payments, the Plan Sponsor shall pay the entire remaining unpaid and non-forfeited balance of the deceased individual’s Account, calculated by treating the date of death as a Determination Date, to the deceased individual’s Beneficiary (or Beneficiaries) in a cash lump sum on the 30th day after the deceased individual’s death.

     If a Participant or Alternate Payee dies after becoming eligible for payment of any Exempt Benefits, but before receiving all of the scheduled payments, the Plan Sponsor shall pay the remaining payments to the deceased individual’s Beneficiary (or Beneficiaries) at the same time or times as such amounts would have been paid to the deceased individual, except to the extent any of such remaining payments become payable at an earlier time under Section 9.08.

     This Section 9.09 shall apply to an Alternate Payee as if he or she were a Participant; and the first paragraph of this Section shall apply to the Alternate Payee’s Account upon the death of the Alternate Payee to whom benefits were assigned.

     9.10 Recipients of Payments. During a Participant’s life, all payments to be made by the Plan Sponsor under this Plan shall be made solely to the Participant (or an Alternate Payee with respect to the Participant). If a Participant (or any such Alternate Payee) dies before receiving all benefit payments due him or her, any subsequent payments remaining payable under this Plan shall be made to the surviving Beneficiary of the Participant (or, if applicable, of the Alternate Payee). If a surviving Beneficiary dies before receiving all the payments due such Beneficiary pursuant to this Plan, the remaining payments shall be paid to the legal representatives of the Beneficiary’s estate.

     9.11 Beneficiary Designation. Each Participant and Alternate Payee shall designate a Beneficiary (including multiple Beneficiaries to share on any basis specified by such individual) to receive benefits upon the designating individual’s death, by filing a written notice of such designation with the Retirement Committee. The Participant (or Alternate Payee) may revoke or modify that designation at any time by a further written designation except to the extent a Participant’s former spouse has been designated as the Participant’s Beneficiary by a court order assigning Plan benefits to the former spouse as an Alternate Payee. However, no such

33

designation, revocation or modification shall be effective unless executed by the designating individual and accepted by the Retirement Committee during the designating individual’s lifetime. Any Beneficiary designation shall be deemed automatically revoked (a) if the Beneficiary predeceases the designating individual, or (b) by a marriage dissolution if the Beneficiary was the designating individual’s spouse before the dissolution, except to the extent a Participant’s former spouse has been designated as the Participant’s Beneficiary by a court order assigning Plan benefits to the former spouse as an Alternate Payee.

     If no applicable Beneficiary designation is in effect at the time when any survivor benefits payable under this Plan become due upon the death of a Participant or Alternate Payee, the Beneficiary for such benefits shall be the deceased individual’s spouse or, if no spouse is then living, the deceased individual’s children in equal shares and their issue by right of representation or, if none, the legal representatives of the deceased individual’s estate.

     If a Plan benefit is payable to a minor or person declared incompetent, or to a person incapable of handling the disposition of his or her property, the Plan Sponsor may pay such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent or incapable person. The Retirement Committee may require proof of incompetency, minority or guardianship as it may deem appropriate before distribution of the benefit. Any such distribution shall completely discharge the Retirement Committee and the Employer Group from all liability with respect to such benefit.

     9.12 Earlier or Later Benefit Payments by Trustee. This Section 9.12 is effective as of January 1, 2005. To the extent the Trust established by the Plan Sponsor pursuant to Section 13.02 remains in effect, the benefit payment provisions of this Article 9 may be superseded in the event of certain contingencies by Trust provisions requiring payment of Plan benefits, to the extent of any remaining Trust assets allocated to this Plan, upon dates earlier or later than those provided in this Article 9.

     9.13 Tax Withholding from Benefit Payments. Notwithstanding any contrary provisions of this Article 9, the Plan Sponsor (or, if applicable, any trustee making benefit payments under the Plan) may deduct, from any benefit payment made to a Participant, Alternate Payee or Beneficiary under this Plan, any amounts the Plan Sponsor (or any such trustee) is required to withhold under any state, federal, local or foreign law for taxes or other charges relating to the Plan benefits of the recipient and applicable at the time the benefit is paid.

     9.14 Delay of Payments for Compliance with Laws or Contractual Obligations. Notwithstanding any contrary provision of this Plan, the Plan Sponsor, in its discretion, may delay any benefit payments under this Plan (other than Exempt Benefits) in any of the following circumstances, to the extent the Plan Sponsor reasonably anticipates that any of the following consequences would otherwise occur, subject to the applicable conditions of this Section 9.14:

     (a) Code Section 162(m). To the extent that the Plan Sponsor’s income tax deduction for such payments to any Participant would be limited or eliminated by the application of Code section 162(m), such payments (and all other scheduled payments to each affected Participant that are affected by such limit during the Plan Sponsor’s taxable year) may be delayed until the first year in which the Plan Sponsor reasonably anticipates

34

that the deduction of such payments will not be barred by application of Code section 162(m).

     (b) Violation of Laws. To the extent that such payments would violate Federal securities laws or other applicable laws (except the Code), the affected payments may be delayed until the first calendar year in which the Plan Sponsor reasonably anticipates that the payments would not result in a violation of Federal securities law or such other applicable laws.

     (c) Jeopardize Plan Sponsor’s Existence as Going Concern. If such payments would jeopardize the ability of the Plan Sponsor to continue as a going concern, due to circumstances such as a material violation of loan covenants or other contractual terms to which the Plan Sponsor is a party, the affected payments may be delayed until the first calendar year in which the payments would not have that effect.

     If benefit payments are delayed for any period under this Section 9.14, those benefit payments will be made in a lump sum immediately after the end of such period, subject to the Competition forfeiture provisions of Section 6.03.

     9.15 Time of Payment Generally. Whenever any payment is required to be made at a time under this Agreement, the payment shall be made at that time or as soon thereafter as is practicable but in no event later than sixty (60) days following the required commencement date.

ARTICLE 10
CLAIMS AND REVIEW PROCEDURE

     10.01 Claims Procedure. The following shall apply with respect to claims of a Participant, Alternate Payee or Beneficiary (hereinafter referred to as the “Claimant”) with respect to claims for benefits under the Plan, other than claims governed by Section 10.03 and 10.04 below. If a Claimant believes that all or a portion of an expected benefit under this Plan has not been paid to the Claimant when due, the Claimant may file a claim with the Retirement Committee. The Retirement Committee shall notify the Claimant in writing, within 90 days after its receipt of the claim, of the Retirement Committee’s allowance or denial of the claim. The notice of the Retirement Committee’s decision shall be in writing, sent by mail to the Claimant’s last known address and, if a denial of all or a portion of the claim, shall set forth:

     (a) the specific reasons for the denial;

     (b) specific reference to pertinent provisions of the Plan on which the denial is based;

     (c) if applicable, a description of any additional information or material necessary to perfect the claim, and an explanation of why it is needed; and

     (d) an explanation of the Plan’s claims review procedure, including the name and address of the person to whom any petition for review should be directed.

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     If the Retirement Committee determines that special circumstances require additional time to make a decision, the Retirement Committee shall notify the Claimant (within the 90-day period for the Retirement Committee’s response) of the circumstances and the date by which a decision is expected, and may extend the response period for up to an added 90-day period.

     10.02 Review Procedure. If a Claimant is determined by the Retirement Committee to be ineligible for benefits, or if the Claimant believes that he or she is entitled to greater or different benefits than those determined by the Retirement Committee, in either case with respect to the Claimant’s claim made under Section 10.01, the Claimant shall have the opportunity to have such claim reviewed again by the Retirement Committee. The Claimant must file a petition for review with the Retirement Committee within 60 days after receipt of the notice of decision issued by the Retirement Committee. The petition shall state the specific reasons why the Claimant believes he or she is entitled to benefits or to greater or different benefits. Within 60 days after receipt by the Retirement Committee of the petition, the Retirement Committee shall afford the Claimant (and counsel, if any) an opportunity to present his or her position to the Retirement Committee in writing, and the Claimant (or counsel) shall have the right to review the pertinent documents. The Retirement Committee shall notify the Claimant of its decision in writing within the 60-day period, stating specifically the basis of its decision (written in a manner calculated to be understood by the Claimant) and the specific provisions of the Plan on which the decision is based. If the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Retirement Committee, but notice of this deferral shall be given to the Claimant.

     10.03 Disability Claim for Benefits. If a Claimant makes a claim for benefits under the Plan that is contingent on the Retirement Committee determining that the Claimant is Disabled, the Retirement Committee will give notice to the Claimant within 45 days of the Claimant’s written application for benefits of the Claimant’s eligibility or noneligibility for benefits under the Plan. If special circumstances require an extension, the Retirement Committee will notify the Claimant within the 45-day processing period that additional time is needed. The notice will specify the circumstances requiring the extension and the date a decision can be expected. The extension notice will also: (a) explain the standards for approving a disability claim; (b) state the unresolved issue(s) that prevent the Retirement Committee from reaching a decision; and (c) describe any additional information needed to resolve the issue(s). If the Retirement Committee requests the Claimant to provide additional information so it can process the claim, the Claimant will be given at least 45 days in which to provide the information. Otherwise, the initial extension cannot exceed 30 days. If circumstances require further extension, the Retirement Committee will notify the Claimant before the end of the initial 30-day extension. The notice will specify the circumstances requiring the further extension and the date a decision can be expected. In no event will a decision be postponed beyond an additional 30 days after the end of the first 30-day extension. If the disability claim is denied based on an internal rule, guideline, protocol, or other similar provision, in addition to the notice provisions described in this section, the Retirement Committee’s notice will provide that a copy of such rule, guideline, protocol or other similar provision is available upon request and free of charge. The notice will also identify any medical or vocational experts consulted on the claim. The Claimant may obtain reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits and may request, in writing, a list of medical or vocational experts consulted.

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     10.04 Review of a Denied Disability Claim. A Claimant may request a review of the Retirement Committee’s decision regarding a disability claim within 180 days after receipt of the denial of the disability claim. This request must be in writing and addressed to the Retirement Committee. The Claimant may, but is not required to, submit written comments, documents, records and other information relating to the claim for benefits. The review will take into account any such comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The review will be conducted by someone different from the person who originally denied the claim. This person cannot be a subordinate of the person who originally denied the claim. If the original denial of the claim was based on a medical judgment, the reviewer will consult with an appropriate health care professional who was not consulted on the original claim and who is not subordinate to someone who was. The Claimant will receive notice of the reviewer’s final decision regarding the disability claim within 45 days of the request for review.

     10.05 Deadline to File Claim. To be considered timely under the Plan’s Claims Procedures, a claim must be filed under Section 10.1 or 10.3 within one year after the Claimant knew or reasonably should have known of the principal facts upon which the claim is based. Knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to the Claimant for the purpose of applying this deadline.

     10.06 Exhaustion of Administrative Remedies. The exhaustion of the Plan’s claims procedures is mandatory for resolving every claim and dispute arising under this Plan. As to such claims and disputes: (a) no Claimant shall be permitted to commence any legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of the Employee Retirement Income Security Act of 1974 as amended (ERISA) or under any other provision of law, whether or not statutory, until the claims procedures have been exhausted in their entirety; and (b) in any such legal action all explicit and all implicit determinations by the Retirement Committee, Trustee or Plan administrator, as the case may be, (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.

     10.07 Deadline to File Legal Action. No legal action to recover Plan benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, may be brought by any Claimant on any matter pertaining to this Plan unless the legal action is commenced in the proper forum before the earlier of: (a) 30 months after the Claimant knew or reasonably should have known of the principal facts on which the claim is based, or (b) six months after the Claimant has exhausted the claims procedure under this Plan. Knowledge of all facts that the Participant knew or reasonably should have known shall be imputed to every Claimant who is or claims to be a Beneficiary of the Participant or otherwise claims to derive an entitlement by reference to the Participant for the purpose of applying the previously specified periods.

     10.08 Committee Discretion; Court Review. The Retirement Committee and all persons determining or reviewing claims have full discretion to determine benefit claims under the Plan. Any interpretation, determination or other action of such persons shall be subject to review only if it is arbitrary or capricious or otherwise an abuse of discretion. Any review of a final decision

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or action of the persons reviewing a claim shall be based only on such evidence presented to or considered by such persons at the time they made the decision that is the subject of review.

ARTICLE 11
ADMINISTRATION

     11.01 Administration. Except as otherwise provided herein, the Plan shall be administered by the Retirement Committee. The Employer Group shall bear all costs of the Plan, as determined by the Plan Sponsor.

     11.02 Powers of the Retirement Committee. The Retirement Committee shall have all powers necessary to administer the Plan, including, without limitation, powers:

     (a) to interpret the provisions of the Plan;

     (b) to find any facts necessary to determine a claim under Article 9; and

     (c) to establish rules for the administration of the Plan and to prescribe any forms required to administer the Plan.

     11.03 Actions of the Plan Sponsor and Retirement Committee. All determinations, interpretations, rules and decisions of the Plan Sponsor or the Retirement Committee shall be conclusive and binding upon all persons having or claiming to have any interest or right under the Plan.

     11.04 Delegation. The Plan Sponsor and the Retirement Committee shall have the power to delegate specific duties and responsibilities to officers or other employees of the Employer Group or other individuals or entities. Any such delegation may allow further delegations by the individual or entity to whom the delegation is made. Any such delegation may be rescinded at any time. Each person or entity to whom a duty or responsibility has been delegated shall be responsible for the exercise of such duty or responsibility and shall not be responsible for any act or failure to act of any other person or entity.

     11.05 Reports and Records. The Plan Sponsor and the Retirement Committee and those to whom they have delegated duties under the Plan shall keep records of all their proceedings and actions and shall maintain books of account, records and other data as shall be necessary for the proper administration of the Plan and for compliance with applicable law.

     11.06 Correction Of Plan Errors. The Retirement Committee, in conjunction with the Plan Sponsor, may correct any failures of the Plan to comply in operation (an “Operational Failure”), and any failure of the Plan document to comply, in either case with Code section 409A (or the Treasury Regulations issued thereunder), as the Retirement Committee deems necessary. Without limiting the Retirement Committee’s authority under the preceding sentence, the Retirement Committee, as it determines to be reasonable and appropriate, may correct the Plan document during the transition period set forth in those regulations and other guidance issued under Code section 409A, and correct any operational failure under any applicable method described in Internal Revenue Service Notice 2007-100 or any later correction procedures issued under Code section 409A. To correct an Operational Failure that is an incorrect deferral of a

38

Participant’s Compensation or an incorrect payment of Plan benefits, the Retirement Committee shall, to the extent permitted or required under the applicable correction procedure (a) require the Plan Sponsor to adjust the Participant’s current Compensation (or, if that is not reasonably practicable, otherwise pay or obtain repayment from the Participant); (b) retroactively correct the balances of the Participant’s Deferral Account and Employer Contribution Account, and the Investment Return or Loss on those Accounts, to reflect that correction as if the Operational Failure had never occurred; and (c) provide such statements and reports to the Participant and the Internal Revenue Service as may be required by such correction procedures.

ARTICLE 12
AMENDMENT AND TERMINATION

     This Article 12 is effective as of January 1, 2005.

     12.01 Right to Amend and Terminate. Subject to the restrictions set forth in Sections 12.02 and 12.03, the Plan Sponsor expects the Plan to be permanent, but necessarily must, and hereby does, reserve the right to amend, suspend or terminate the Plan, in full or in part, at any time and from time to time. The power to amend includes the power to change any Investment Return or Loss rates and the Declared Rate, except with respect to any such amounts derived from such rates that have already been credited to an Account. Any such Plan amendment, suspension or termination documents shall be filed with the Plan documents.

     12.02 Protection of Participants upon Amendment and Termination. No amendment, suspension or termination of this Plan shall adversely affect the rights of a Participant, Alternate Payee or Beneficiary to any non-forfeitable portion of a Participant’s Account; provided, however, that to the extent permitted under Section 9.08, or Section 12.03 in the event of a Plan termination, Plan Sponsor may in its sole discretion accelerate or delay payment of all non-forfeited amounts previously credited to Accounts (whether or not payment has commenced), to the extent permitted or required under Section 9.08 or Section 12.03.

     12.03 Plan Termination Procedures and Restrictions. If the Plan Sponsor terminates the Plan, the unpaid balance of each Account shall become fully vested and non-forfeitable, no more Compensation will be deferred under any Participant’s Deferral Agreement, each Participant’s Compensation payable after the Plan termination will be paid without regard to his or her Deferral Agreement (except for amounts already credited to his or her Account), Investment Return or Loss will no longer be credited or debited to Accounts after the Plan termination date, interest will be credited (and compounded annually) to each Account at the Declared Rate in effect on the Plan’s termination date (from that date until the Account balances have been paid to Participants or their Beneficiaries) and such balances shall be payable at the time and in the manner otherwise required or elected under the Plan, except that any Exempt Benefits shall be payable at the time and in the manner provided in the 2004 Plan Document for a Plan termination; provided, however, that, in the sole discretion of the Plan Sponsor, such payments (other than the payment of Exempt Benefits) may be accelerated or delayed as set forth below if the Plan termination occurs under any of the following circumstances:

     (a) Change in Control. If (i) the Plan is irrevocably terminated by the Plan Sponsor within the 30 days preceding or the 12 months following the occurrence of a

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Change in Control (including any Change in Control defined in Section 6.04, and any other “change in control” defined under Code section 409A), and (ii) all non-qualified deferred compensation arrangements that are sponsored by the Employer Group immediately after the time of such Change in Control and would be aggregated with this Plan as a “single plan” under Code section 409A are also irrevocably terminated within such period, with respect to each participant who experienced the same Change in Control, and their vested benefits are distributed in taxable payments within 12 months after such arrangements are terminated, then the remaining vested balance of each Account (other than any Exempt Benefit) shall be paid in a cash lump sum and included in the taxable income of the each recipient on the date of such payment; and each such payment shall be made on or before the last day of the 12-month period beginning on the Plan termination date. For purposes of this subsection (a), “Plan Sponsor” shall mean the employer that remains primarily liable, immediately after the Change in Control, for payment of Plan benefits.

     (b) Dissolution of Plan Sponsor. If the Plan is terminated within 12 months of the Plan Sponsor’s dissolution and that dissolution is taxable under Code section 331, then the remaining balance of each Account (other than any Exempt Benefit) shall be paid in a cash lump sum and included in the taxable income of each recipient on the date of such payment; and each such payment shall be made on or before the end of the later of the following years: (i) the calendar year in which the Plan is terminated, or (ii) the first calendar year in which the payment is administratively practicable.

     (c) Discretionary Plan Termination. If the Plan is terminated in the discretion of the Plan Sponsor, the payment of Plan benefits (other than any Exempt Benefits) may be accelerated as provided below, but only if all of the following conditions are satisfied: (i) neither of the preceding subsections (a) and (b) apply to the Plan termination; (ii) the liquidation of the Plan is not associated with a turndown in the financial health of the Plan Sponsor or the Employer Group; (iii) all non-qualified deferred compensation arrangements that are sponsored by the Employer Group and would be aggregated with this Plan as a “single plan” under Code section 409A (if the same Participant participated in all of those arrangements) are also terminated; (iv) no member of the Employer Group adopts (at any time within three years after the Plan’s termination and liquidation) any new non-qualified deferred compensation arrangement that would be aggregated with this Plan in that same manner; (v) the Plan Sponsor shall continue to pay benefits (other than any Exempt Benefits) under this Plan and such other terminated arrangements, as if none of them had terminated, for at least the first 12-month period beginning on the Plan termination date; and (vi) the remaining balance of each Account (other than any Exempt Benefit) and all remaining benefits under such other terminated arrangements shall be paid within 24 months after the Plan termination date in the form of cash lump sums that are included in the taxable income of each recipient on the date of such payment.

ARTICLE 13
MISCELLANEOUS

     13.01 No Guaranty of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract of employment between any member of the Employer Group and any

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Participant or other employee. Nothing contained herein shall give any Participant or other employee the right to be retained in the employ of the Employer Group or in any existing position, or to interfere with the right of any member of the Employer Group to discharge any Participant or other employee at any time, nor shall it give any member of the Employer Group the right to require any Participant or other employee to remain in its employ or to interfere with the right of a Participant or other employee to terminate employment at any time.

     13.02 Life Insurance and Funding. To the extent permitted under applicable laws, the Plan Sponsor in its sole discretion may apply for and procure as owner and for its own benefit, insurance on the life of a Participant, in such amounts and in such forms as the Plan Sponsor may choose. The Participant shall have no interest whatsoever in any such policy or policies, but at the request of the Plan Sponsor shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Plan Sponsor has applied for insurance.

     The rights of a Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate) to benefits under the Plan shall be solely those of an unsecured general creditor of the Plan Sponsor. Any insurance policy on the life of a Participant or former Participant, or other assets acquired by or held by the Plan Sponsor, shall not be deemed to be held under any trust for the benefit of any Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate), or as security for the performance of the obligations of the Plan Sponsor, but shall be and remain, general, unpledged and unrestricted assets of the Plan Sponsor.

     The Plan Sponsor may establish a trust to facilitate management of any life insurance and other assets that may be used to pay Plan benefits, but the assets of any such trust shall remain subject to the claims of the Plan Sponsor’s general creditors; and no Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate) shall have any right to any of such assets, except in the capacity as unsecured general creditor of the Plan Sponsor. To the extent that any of the benefits accrued for a Participant under this Plan are paid to a Participant or Alternate Payee (or his or her spouse, other Beneficiary or estate) by the trustee of such a trust, the Participant’s Account shall be reduced by the amount of such payment and the Plan Sponsor’s obligation, if any, to pay that amount of benefits under this Plan shall be discharged to the extent of the trustee’s payment.

     13.03 Non-Alienation. No benefit payable at any time under this Plan shall be subject in any manner to alienation, sale, transfer, pledge, attachment or encumbrance of any kind; provided, however, that:

     (a) in the event that, at the time of a Participant’s Separation from Service (or, in the case of any Exempt Benefits, his or her Termination of Employment), the Participant is indebted to any member of the Employer Group, such member shall have the right to offset any such indebtedness (including any interest thereon) to the fullest extent permitted by law against any benefits otherwise due under this Plan with respect to the Participant, by applying such indebtedness (including any interest thereon) pro-rata to each successive benefit payment when it becomes due thereafter, until the full amount of the debt and any interest owed to any member of the Employer Group has been paid; and

41

     (b) all or any portion of a Participant’s unpaid benefits under this Plan may be assigned by court order to the Participant’s former spouse in connection with a dissolution of their marriage, but only if the Retirement Committee determines, in its sole discretion, that the order satisfies such requirements of a “qualified domestic relations order” as are set forth in paragraphs (1) through (3) of Code section 414(p), as if the Plan were a plan described in Code section 401(a)(13); provided, however, that no such assigned benefit shall be payable in a form or at a time not otherwise permitted under the Plan. The federal income and payroll taxation of any Plan benefits assigned as provided in the preceding sentence shall be governed by Revenue Rulings 2002-22 and 2004-60, or any applicable guidance subsequently published by the Internal Revenue Service or the Department of the Treasury.

     13.04 Applicable Laws. Effective as of January 1, 2005, the Plan and all rights hereunder shall be governed by and construed according to Code section 409A (in the manner provided in subsection (b) of Section 1.02 above), other applicable federal laws and the applicable laws of the State of Minnesota, except to the extent such State laws are preempted by the federal laws of the United States of America.

     13.05 Form of Communication. Any election, application, claim, notice or other communication required or permitted to be made by a Participant or Beneficiary to the Plan Sponsor or the Retirement Committee shall be made in writing (including any electronic writing recognized under applicable law and permitted by the Retirement Committee), and in such form as the Retirement Committee shall prescribe. Any written communication made under this Plan shall be effective upon mailing, if sent by first class mail, postage pre-paid, and addressed to either (a) the address of the Participant or Beneficiary last shown in the Plan Sponsor’s records; or (b), if sent to the Retirement Committee or Plan Sponsor, its principal offices at Minneapolis, Minnesota, to the attention of the “Retirement Committee” or one of its members.

     13.06 Captions. The captions at the head of the Articles and Sections of this Plan are designed for convenient reference only and are not to be used for the purpose of interpreting any provision of this Plan.

     13.07 Severability. The invalidity of any portion of this Plan shall not invalidate the remainder thereof; and in any such case the remainder shall continue in full force and effect, to the extent that any purposes of the Plan may still be carried out.

     13.08 Binding Instrument. The provisions of this Plan shall be binding upon each Participant and Alternate Payee (and their respective heirs, personal representatives and Beneficiaries); and upon the Retirement Committee and the Plan Sponsor, its successors and assigns.

[signature page follows]

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     IN WITNESS WHEREOF, the Retirement Committee has approved this instrument at its meeting on August 29, 2008; and has caused this instrument to be executed by an officer of the Plan Sponsor on this 9th day of December, 2008, but effective as of January 1, 2008, except as otherwise specified herein.

G&K SERVICES, INC.
By	/s/ Jeffrey L. Cotter
	Its Vice President, General Counsel

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Exhibit A
to the

G&K SERVICES
EXECUTIVE DEFERRED COMPENSATION PLAN

Description of Investment Funds Used to Measure
Investment Return or Loss

(Effective as of September 7, 2007)

1.	Stable Income Fund. The Wells Fargo Stable Income Fund invests in short-term investment-grade securities, including mortgage-backed securities and U.S. government obligations.
2.	Bond Fund. The MFS Research Bond Fund invests in fixed-income securities.
3.	Balanced Fund. The Oakmark Equity & Income Fund invests in equities and U.S. government and corporate debt rated AA or higher. It may invest up to 20% of assets in unrated debt or debt rated below investment-grade. The fund may also invest in up to 25% of assets in foreign securities.
	This Fund has been designated by the Retirement Committee as the default investment measurement fund described at the end of Section 7.02(a) of the Plan.
4.	Large Cap Equity Funds.

• The Wells Fargo Advantage Index Fund invests in common stocks to replicate the total rate of return of the S&P 500 Index, before fees and expenses.

• The T. Rowe Price Growth Stock Fund will normally invest in at least 80% of assets in the common stock of a diversified group of growth companies.

5.	Small Cap Equity Fund. The Heartland Value Fund invests in equity securities of small companies with market capitalizations of less than $1.5 billion and may invest a significant portion of assets in companies with market capitalizations of less than $300 million. It may invest up to 15% of assets in liquid securities.
6.	International Equity. The American Funds EuroPacific Fund normally invests at least 80% of assets in securities of issuers located in Europe and the Pacific Basin.

     For valuation purposes under this Plan, any Investment Return or Loss measured by any of the Funds listed above will be adjusted periodically, pursuant to Section 7.01, to reflect unit market value changes in each of such funds, and to reflect applicable fees, including short term trading fees.

EX-10.T

EXHIBIT 10(T)

G&K SERVICES, INC.
AMENDED AND RESTATED
DIRECTORS’ DEFERRED COMPENSATION PLAN

     THIS AMENDED AND RESTATED DIRECTORS’ DEFERRED COMPENSATION PLAN, dated as of August 25, 2005, amends in part and restates the Director Deferred Compensation Plan of G&K Services, Inc. (the “Company”) in its entirety (and such plan, as so amended and restated, is referred to herein as the “Plan”).

INTRODUCTION AND CERTAIN DEFINITIONS

     A. Existing Plan. The Plan was adopted by the Company in 1997, pursuant to resolutions of the Board of Directors, and first became effective for deferrals of cash compensation payable to eligible members of the Company’s Board of Directors (the “Board”) for services to be rendered to the Company after 1997.

     B. Conversion of Future Deferred Compensation into Stock Units. The Board has determined that it is in the best interests of the Company to have any cash compensation that is earned after 2005, and deferred under this Plan by eligible Board members, be converted into Stock Units (as described in Section 3 below) that will ultimately be distributed under this Plan in the form of Class A common stock of the Company having a par value of $0.50 per share (“Common Stock”).

     C. Director Stock Plan. Contemporaneously with the Board’s adoption of this amended and restated Plan, the Board has also adopted the Company’s Amended And Restated 1996 Director Stock Incentive Plan (the “Director Stock Plan”), to be effective upon approval of that amended and restated plan at the Company’s 2005 Annual Meeting of Stockholders.

     D. Conversion of Stock Awards into Stock Units. The amended and restated Director Stock Plan allows an eligible Board member to elect to defer his or her receipt of any annual award of Common Stock that would otherwise be earned and delivered after 2005 under the Director Stock Plan (a “Stock Award”), by converting those Stock Awards to Stock Units (as described in Section 3 below) that will ultimately be distributed under this Plan in the form of Common Stock.

     E. Amended and Restated Plan. The Company’s Board of Directors has determined that it is in the best interest of the Company to amend and restate this Plan for the purposes set forth in the preceding paragraphs; and has authorized the Company to amend and restate the Plan as set forth herein.

     F. Code Section 409A. This Plan is subject to Section 409A of the Internal Revenue Code of 1986 as amended (the “Code”); and may be required to be amended to comply with Code Section 409A upon the issuance of pending guidance by the Internal Revenue Service with respect to the permissible terms of the Plan. However, Code Section 409A does not govern any Plan Accounts (as defined in Section 6 below) containing amounts accumulated with interest through December 31,

1

2004, or any future interest credited on those amounts, because those amounts were not then subject to forfeiture under this Plan, and this Plan is not being amended herein to enhance any benefits or rights with respect to such amounts or any future interest credited on those amounts.

     NOW, THEREFORE, the Plan is amended in part and restated in its entirety as follows, such amendment and restatement to be effective as set forth in Section 1 below:

     1. Adoption, Term and Purpose of the Plan. The amendments in this amended and restated Plan were approved by the Board on August 25, 2005, to become effective for (a) any election to defer cash compensation payable to eligible Board members for services to be rendered to the Company after 2005; and (b) any election to defer delivery of any Stock Awards to be earned and delivered under the Director Stock Plan after 2005. This Plan shall remain in effect until terminated by action of the Board. Any cash compensation (and related interest credits) that have been deferred under the Plan as in effect before this amendment and restatement, but have not yet been paid in cash, shall remain deferred under this Plan and continue to earn interest as provided in subsection 7(d) below until the time previously scheduled for distribution.

     The purpose of the Plan is to advance the interests of Company and its shareholders by attracting, motivating and retaining non-employee Board members of outstanding ability; and to promote a greater identity of interest between the Company’s non-employee Board members and its shareholders. This Plan provides an option to defer distribution of (a) the cash portion of their annual retainers and any fees earned for attending meetings (“Director’s Fees”), and/or (b) any annual Stock Awards to be earned under the Director Stock Plan, but does not cover any compensation payable to Board members under the Director Stock Plan in the form of options to purchase Common Stock, nor any reimbursement of their expenses incurred as directors.

     2. Participation. Each member of the Board who is not an employee of the Company or any of its subsidiaries (a “Non-Employee Director”) is eligible to participate in this Plan; and may elect to become a participant (a “Participant”) under this Plan by filing with the Company an annual written notice (a “Deferral Notice”), containing the Non-Employee Director’s election, pursuant to Section 4 below, to defer payment of any eligible compensation described in Section 4 below that would otherwise be paid to him or her by the Company.

     3. Stock Units. For purposes of this Plan, a “Stock Unit” is a unit of unpaid cash or Stock Award compensation deferred by a Participant under Sections 4 and 5 below, created and accounted for under Sections 6, 7 and 8 below, and distributed in accordance with Sections 9 and 10 below.

     4. Elections to Defer Compensation. Any Non-Employee Director may elect annually, in accordance with Section 5 below, to defer payment of any percentage of his or her Director’s Fees or annual Stock Award, or both, to be earned during the next following calendar year until the earlier of the following dates (a “Deferral Election”):

     (a) a specific date (if any) designated by the Non-Employee Director in the Deferral Notice for that year (an “Early Distribution Date”), or

2

     (b) the date of termination of his or her services as a member of the Board for any reason (a “Termination Date”).

     5. Procedure for Deferral Elections and Beneficiary Designations. The Deferral Notice by which a Participant make a Deferral Election for Director’s Fees and/or any Stock Award for a calendar year, as provided in Section 4 above, shall be in writing (in the form attached hereto as Exhibit A), shall be signed by the Participant and delivered to the Chief Financial Officer of the Company before January 1 of the calendar year in which the Director’s Fees and/or any Stock Award to be deferred would otherwise be earned and payable to the Participant, and may not be revoked or changed at any time, except by the Participant to change a beneficiary (as provided in the last paragraph of this Section 5) or by the Corporation to the limited extent provided in Section 15 below (upon termination of the Plan).

     A Participant may designate, on any Deferral Notice he or she may deliver to the Company, or in a separate writing signed by the Participant and delivered to the Chief Financial Officer of the Corporation before the Participant’s death, one or more beneficiaries to receive a distribution of the balance of the Participant’s Account (as described in Section 6 below) under the Plan upon the Participant’s death. A Participant may change his or her beneficiary designation at any time by including that change in any new Deferral Notice for a calendar year that has not begun, or in a separate writing signed by the Participant and delivered to the Chief Financial Officer of the Corporation before the Participant’s death. If a Participant has not, before the Participant’s death, designated any beneficiary for payment of an Account balance under this Plan upon the Participant’s death, or no beneficiary designated by the Participant survives the Participant’s death, the sole beneficiary of the Participant’s Account balance shall be the Participant’s estate.

     6. Creation of Participants’ Accounts and Sub-Accounts. The dollar amount of any Director’s Fees and/or Stock Awards deferred by a Participant under this Plan shall be credited, on each date such deferred Director’s Fees and/or Stock Awards are earned by the Participant, to a deferred compensation account (an “Account”) maintained in the name of the Participant on the accounting books and records of the Company. To facilitate distributions on any Early Distribution Dates, and to segregate any portion of an Account that earns interest, each Participant’s Account shall contain one or more sub-accounts as described in the following two paragraphs (“Sub-Accounts”):

     (a) Sub-Accounts for Different Distribution Dates. If a Participant’s Deferral Notice for any calendar year specifies an Early Distribution Date for the deferral of Director’s Fees and/or Stock Award, the deferred Director’s Fees and/or Stock Award for that calendar year (and any other calendar year for which the Participant elects the same Early Distribution Date) shall be accounted for in a Sub-Account separate from any Sub-Account containing deferred Director’s Fees and/or Stock Awards for which the Participant elected a different Early Distribution Date (each, an “Early Distribution Sub-Account”); and, if a Participant’s Account contains one or more Early Distribution Sub-Accounts, each shall be maintained separately from any deferred Director’s Fees and Stock Awards for which the Participant did not elect an Early Distribution Date, which shall be accounted for separately in another Sub-Account (a “Termination Sub-Account”).

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     (b) Sub-Accounts for Pre-2006 Deferrals. Furthermore, if a Participant has elected to defer any Director’s Fees earned in a calendar year before 2006, which are earning interest as provided in subsection 8(d) below, any undistributed balance of those fees and the accumulated interest on that balance shall be accounted for in a Sub-Account (an “Interest-bearing Sub-Account”) separate from any portion of the Participant’s Account that contains deferred Director’s Fees and/or Stock Awards converted into Stock Units pursuant to subsection 7(a) below. To the extent necessary, any Interest-bearing Sub-Account shall be further divided into one or more Early Distribution Sub-Accounts and a Termination Sub-Account as provided in subsection 6(a) above.

     7. Adjustment of Account Balances. All amounts credited to an Account (and any Sub-Accounts) shall be adjusted from time to time, until the balance of the Account (or any Sub-Account, as applicable) is distributed to the Participant or his or her beneficiary(ies), as follows:

     (a) Conversion of Deferred Compensation into Stock Units. Any form of compensation earned and deferred under this Plan after 2005 shall be converted into Stock Units as follows:

     (i) Director’s Fees. The dollar amount of any deferred Director’s Fees credited under this Plan to a Participant’s Account on a date after December 31, 2005, shall be converted into a number of Stock Units determined by dividing (A) that dollar amount by (B) the Average Market Value (as defined below) of one share of Common Stock, as of the date the deferred directors’ fees are credited to the Account. For purposes of this Plan, “Average Market Value” shall be defined as the average of the closing prices of Common Stock, as reported on the Nasdaq National Market, during the ten business days preceding the relevant valuation date. An Account may be credited with a fractional Stock Unit, which shall be rounded to the nearest one-hundredth of a Stock Unit.

     (ii) Stock Awards. Any Stock Awards deferred by a Participant under this Plan shall be converted into Stock Units, by treating each share of Common Stock that would otherwise have been issued pursuant to the Stock Award as one Stock Unit that shall be credited to the Participant’s Account as of the date the Stock Award is earned.

     (iii) Status of Stock Units. Any Stock Units credited to a Participant’s Account shall not entitle the Participant to any voting rights or other rights of a shareholder of the Company, until the date of the issuance of a stock certificate to him or her for Common Stock, in lieu of any Stock Units held in his or her Account, pursuant to subsection 9(b) below.

     (b) Valuation of Accounts Containing Stock Units. As of any date on which the balance of an Account containing Stock Units must be determined as a dollar amount under this Plan, that balance shall be equal to the number of Stock Units multiplied by the Average Market Value of one share of Common Stock as of that date.

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     (c) Credits in Lieu of Dividends on Stock Units. If any Stock Units exist in an Participant’s Account on a dividend record date for Common Stock, that Account shall be credited, on the dividend payment date related to such dividend record date, with an additional number of Stock Units equal to (i) the cash dividend paid on one share of Common Stock, multiplied by (ii) the number of Stock Units in the Account on the dividend record date, divided by (iii) the Average Market Value of a share of Common Stock on the dividend payment date.

     (d) Interest Credits on Pre-2006 Accounts. Any Interest-bearing Sub-Account containing deferred Directors’ Fees credited before January 1, 2006, pursuant to the Plan document then in effect, shall continue to be credited with interest at a rate equal to seven percent (7%) per year, until the Interest-bearing Sub-Account has been fully distributed to a Participant or to his or her beneficiary or beneficiaries designated under this Plan.

     8. Statements of Account. The Company shall furnish each Participant whose Account has not been distributed in full with a quarterly statement that includes at least:

     (a) the following activity in his or her Account (and each Sub-Account, if applicable) during the quarter: (i) the dollar amount of any new Directors’ Fees and Stock Units credited, (ii) the number of any new Stock Units credited, (iii) any change in the value of his or her Stock Units (if any), and (iv) the dollar amount of any interest credited; and

     (b) the number of Stock Units in the Account (and each Sub-Account, as applicable) and the dollar balance of the Account (and each Sub-Account, as applicable), in each case as of the last day of the quarter.

     9. Events Requiring Distributions from Accounts. Distributions of Account balances under this Plan shall be made on account of the following events, at the time and in the manner provided in Section 10 below:

     (a) Early Distribution Sub-Accounts. As of each Early Distribution Date specified by a Participant that occurs while the Participant remains a member of the Board, the Company shall distribute to the Participant the dollar amount of the balance in his or her Early Distribution Sub-Account that is required under the Participant’s Deferral Notice(s) to be distributed on that date.

     (b) Distribution to Beneficiaries. As of any Termination Date that is the date of the Participant’s death, Company shall distribute to the Participant’s designated beneficiary or beneficiaries the dollar amount of the balance of the Participant’s entire Account as of the date of his or her death.

     (c) Distribution Upon Termination. If the Participant’s Termination Date occurs before his or her death, the Company shall distribute to the Participant the dollar amount of the balance of the Participant’s entire Account as of the Termination Date.

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     10. Distribution Procedure. Distribution of Account balances shall be made under this Plan at the time and in manner set forth below:

     (a) Timing of Distributions. Any amounts required to be distributed from a Participant’s Account to the Participant (or his or her beneficiary or beneficiaries) shall be distributed on the first day of the month following the date as of which the distribution is required under Section 9 above.

     (b) Form of Distributions.

     (i) Cash From Interest-bearing Sub-Accounts. The Company shall distribute in a cash lump sum any amounts required under Section 9 above to be distributed from a Participant’s Interest-bearing Sub-Account.

     (ii) Common Stock from Other Sub-Accounts. The Company shall distribute in a lump sum any amounts required under Section 9 above to be distributed from a Participant’s Account (or Sub-Account) that contains only Stock Units; and the lump sum shall be payable in the form of (A) a certificate for the number of whole shares of Common Stock equal to the number of whole Stock Units to be distributed; and (B) cash in lieu of any fractional share of Common Stock (determined by using the Average Market Value of a share of Common Stock as of the date on which such distribution is made).

     11. Dilution and Other Stock Unit Adjustments. In the event of any change in the outstanding Common Stock of the Company by reason of any stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination or exchange of shares, a sale by the Company of all or part of its assets, any distribution to shareholders other than a normal cash dividend, or other extraordinary or unusual event:

     (a) the number of Stock Units, the kind of shares used to determine the number of Stock Units to be credited to an Account and measure the value of Stock Units, and the kind and number of shares that may be issued under the Plan pursuant to subsection 10(b) above, shall be automatically adjusted so that the proportionate interest of each Participant entitled to any Stock Units and a distribution of Common Stock under this Plan shall be maintained as before the occurrence of such event;

     (b) such adjustment in outstanding Stock Units shall be made with a corresponding adjustment in the value of each Stock Unit; and

     (c) each such adjustment shall be conclusive and binding for all purposes of the Plan.

     12. Participant’s Rights Unsecured. The right of each Participant or his or her designated beneficiary(ies) to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company; and neither the Participant nor his or her designated beneficiary

6

shall have any rights in or against any amount credited to his or her Account or any specific assets of the Company. All amounts credited to an Account shall constitute general assets of the Company and may be disposed of by the Company at such time and for such purposes as it may deem appropriate.

     The rights and interest of a Participant or any beneficiary under the Plan may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise, including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no such right or interest of any Participant or beneficiary in the Plan shall be subject to any obligation or liability of such Participant or beneficiary.

     13. Administration. The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe and amend the form of the Deferral Notice.

     The Board shall, subject to the provisions of the Plan, have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decisions of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Board may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or any other officer of the Company to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to be done by him or her, or by any other member of the Board in connection with the Plan, except for his or her own willful misconduct or as expressly provided by statute.

     14. Plan Amendments. The Board may amend the Plan at any time, without the consent of the Participants or their beneficiaries, provided, however, that no amendment shall become effective without shareholder approval if such shareholder approval is required by law, rule or regulation; and provided further that no amendment shall divest any Participant or beneficiary of the existing balance of his or Account, or of any rights to which he or she would have been entitled if the Plan had been terminated immediately prior to the effective date of such amendment, without the written consent of such Participant or beneficiary.

     15. Termination of the Plan. The Board may terminate the Plan at any time. Upon termination of the Plan, no additional deferred Director’s Fees shall be credited to the Account of any Participant, any Director’s Fees earned after the date of termination of the Plan shall be payable in cash, any Stock Awards earned after the date of termination of the Plan shall payable in Common Stock, the balances of any existing Accounts shall continue to be adjusted pursuant to Section 7 above, and the existing balances of the Participants’ Accounts shall be distributed in the manner and at the time prescribed in Sections 9 and 10 above.

     16. Miscellaneous Provisions.

     (a) Except as expressly provided for in the Plan, no Non-Employee Director or other person shall have any claim or right to any Account, or any Stock Units or Common

7

Stock under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Non-Employee Director any right to be retained in the service of the Company.

     (b) Common Stock shall not be issued under this Plan unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state, local and foreign securities, securities exchange and other applicable rules, laws and requirements.

     (c) It shall be a condition to any obligation of the Company to issue Common Stock upon distribution from an Account (or Sub-Account) holding Stock Units that the Participant (or any beneficiary) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, the Company may refuse to issue such Common Stock.

     (d) The expenses of the Plan shall be borne by the Company.

     (e) By deferring compensation or accepting any benefit under the Plan, each Participant and each person claiming under or through him or her shall be conclusively deemed to have indicated his or acceptance and ratification of, and consent to, any action taken under the Plan by the Company or the Board.

     (f) The appropriate officers of the Company shall cause to be filed any reports, returns or other information regarding Stock Units held under this Plan or any Common Stock issued pursuant to this Plan as may be required by section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, or any other applicable statute, rule or regulation.

8

Exhibit A

Director’s Election to Participate in Plan and
Designate Beneficiary

(For Director’s Fees and Stock Awards to be Earned in                     )

     Pursuant to the G&K Services, Inc. Amended and Restated Directors’ Deferred Compensation Plan (the “Deferred Compensation Plan”), I hereby elect to defer, as provided in the Deferred Compensation Plan, the receipt of the following amounts of compensation to be earned by me for services as a member of the Board of Directors of G&K Services, Inc. (the “Company”) during the calendar year beginning January 1,                     . I understand that this election will not be effective unless it is delivered to the Company’s Chief Financial Officer before the beginning of                     , and cannot be revoked or amended after any such delivery.

     1. Deferral of Director’s Fees. I elect to defer payment of                     % [insert a percentage to be deferred] of all Director’s Fees to be earned by me as an annual retainer and meeting fees during the calendar year beginning January 1,                     , until a distribution date specified in Section 3 below.

     2. Deferral of Stock Awards. I elect to defer any delivery of                     % [insert a percentage to be deferred] of the annual Stock Award to be earned by me under the Company’s Amended and Restated Director Stock Incentive Plan during the year beginning January 1,                     , until a distribution date specified in Section 3 below.

     3. Distribution Dates for Deferred Compensation. This election shall remain in effect for all amounts deferred under this election until the earlier of the following distribution dates:

(A)	[insert a designated date on which you wish to receive distribution of your deferred Director’s compensation, if it occurs before the date of your termination as a Director], at which time all amounts deferred by me under this election shall be paid in full pursuant to the terms of the Plan;
OR
(B)	the date of termination of my services as a Director of the Company for any reason.

     4. Beneficiary Designation. I hereby designate

[please print name(s), address(es) and percentage share for each beneficiary]

as my beneficiary(ies) to receive all amounts held for me under the Plan that have not been paid to me at the date of my death. This beneficiary designation hereby revokes any beneficiary designation I have previously delivered under the Plan. If no beneficiary is designated in this election, the

9

beneficiary(ies) most recently designated by me (if any) in an signed election I have made under this Plan shall remain my beneficiary(ies) under the Plan.

[signature page for Election to Defer Director’s Compensation for                     ]

Signature:
	Director, G&K Services, Inc.
	Print Name:
	Date:

NOTE: To be effective for                     , this election form must be delivered to the Company’s Chief Financial Officer before the beginning of                     .

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EX-21

EXHIBIT 21

SUBSIDIARIES OF G&K SERVICES, INC.

G&K Services, Co. (incorporated in Minnesota, U.S.A.)

G&K Services Canada Inc. (incorporated in Ontario, Canada)

Les Services G&K (Quebec) Inc. (incorporated in Quebec, Canada)

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 033-63359, 333-64977, 333-66419, 333-73188, 333-101282, and 333-139670) pertaining to the 1989 Stock Option and Compensation Plan, 1996 Director Stock Option Plan, 1998 Stock Option and Compensation Plan, and 2006 Equity Incentive Plan of G&K Services, Inc. and subsidiaries of our reports dated August 26, 2010, with respect to the consolidated financial statements and schedule of G&K Services, Inc. and subsidiaries and the effectiveness of internal control over financial reporting of G&K Services, Inc. and subsidiaries, included in this Annual Report (Form 10-K) for the year ended July 3, 2010.

/s/ Ernst & Young LLP
Ernst & Young LLP

Minneapolis, Minnesota
August 26, 2010

EX-24

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors of G&K SERVICES, INC., a Minnesota corporation (the “Company”), hereby constitute and appoint DOUGLAS A. MILROY and JEFFREY L. WRIGHT, and each or any of them, his or her true and lawful attorneys-in-fact and agents, for him or her and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and file the Annual Report of the Company and Form 10-K for the fiscal year ended July 3, 2010, to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 including any amendment or amendments, with all exhibits and any and all documents required to be filed with respect thereto with any regulatory authority, granting unto said attorneys full power and authority to do and perform each and every thing, requisite and necessary to be done in and about the premises in order to execute the same as fully to all intents and purposes as he, she, himself, or herself might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents may lawfully do or could cause to be done by virtue hereof.

IN WITNESS WHEREOF, G&K SERVICES, INC. has caused this Power of Attorney to be executed in its name by its directors this 19th day of August 2010.

/s/ Douglas A. Milroy Douglas A. Milroy	/s/ Ernest J. Mrozek Ernest J. Mrozek
/s/ John S. Bronson John S. Bronson	/s/ M. Lenny Pippin M. Lenny Pippin
/s/ Lynn Crump-Caine Lynn Crump-Caine	/s/ Alice M. Richter Alice M. Richter
/s/ J. Patrick Doyle J. Patrick Doyle	/s/ Jeffrey L. Wright Jeffrey L. Wright
/s/ Wayne M. Fortun Wayne M. Fortun

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Douglas A. Milroy, certify that:

1.	I have reviewed this annual report on Form 10-K of G&K Services, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 26, 2010

By:	/s/ Douglas A. Milroy
	Douglas A. Milroy, Chief Executive Officer and Director
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey L. Wright, certify that:

1.	I have reviewed this annual report on Form 10-K of G&K Services, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 26, 2010

By:	/s/ Jeffrey L. Wright
	Jeffrey L. Wright, Executive Vice President, Chief Financial Officer and Director
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

G&K SERVICES, INC.
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of G&K Services, Inc. (the “Company”) on Form 10-K for the year ended July 3, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Douglas A. Milroy, Chief Executive Officer and Director of the Company, certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 26, 2010

By:	/s/ Douglas A. Milroy
	Douglas A. Milroy, Chief Executive Officer and Director
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

G&K SERVICES, INC.
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of G&K Services, Inc. (the “Company”) on Form 10-K for the year ended July 3, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jeffrey L. Wright, Executive Vice President, Chief Financial Officer and Director of the Company, certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 26, 2010

By:	/s/ Jeffrey L. Wright
	Jeffrey L. Wright, Executive Vice President, Chief Financial Officer and Director
	(Principal Financial Officer)