American Home Shield 2008 Annual Report Download - page 112

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 18. Supplemental Cash Flow Information
In the Consolidated Statements of Cash Flows, the caption "Cash and cash equivalents" includes investments in short-term, highly-liquid securities
having a maturity of three months or less when purchased. Supplemental information relating to the Consolidated Statements of Cash Flows for the year
ended December 31, 2008, the Successor period from July 25, 2007 to December 31, 2007, the Predecessor period from January 1, 2007 to July 24, 2007 and
the year ended 2006 is presented in the following table:
Successor
Predecessor
(In thousands)
Cash paid for or (received from):
Year ended
Dec. 31, 2008
Jul. 25, 2007 to
Dec. 31, 2007
Jan. 1, 2007 to
Jul. 24, 2007
Year ended
Dec. 31, 2006
Interest expense $ 269,580 $ 140,653 $ 27,387 $ 57,483
Interest and dividend income (13,094) (8,698) (7,810) (25,794)
Income taxes, net of refunds 10,413 8,083 17,363 46,353
Note 19. Capital Stock
Effective July 24, 2007 upon completion of the Merger, the Certificate of Incorporation of the Company was amended to provide for the authorization of
1,000 shares of common stock to replace the previously authorized, issued and outstanding common stock. As a result of the Merger, CDRSVM Holding, Inc.
holds 1,000 shares of the Company's common stock, which represents all of the authorized and issued common stock.
Note 20. Stock-Based Compensation
Successor
The board of directors of Holdings adopted the ServiceMaster Global Holdings, Inc. Stock Incentive Plan (the "Stock Incentive Plan") in 2007. The
Stock Incentive Plan provides for the sale of shares of Holdings stock to ServiceMaster's executive officers, other key employees and directors as well as the
grant of deferred share units and options to purchase shares of Holdings to those individuals. The board of directors of Holdings, or a committee designated by
it, selects the officers, employees and directors eligible to participate in the Stock Incentive Plan and determines the specific number of shares to be offered or
options to be granted to an individual employee or director. A maximum of 12,445,000 shares of Holdings stock are available for issuance under the Stock
Incentive Plan. Holdings currently intends to satisfy any need for shares of common stock of Holdings associated with the exercise of options issued under the
Stock Incentive Plan through those new shares available for issuance or any shares repurchased from participants in the Stock Incentive Plan.
All option grants under the Stock Incentive Plan will be non-qualified options with a per-share exercise price no less than the fair market value of one
share of Holdings stock on the grant date. Any stock options granted will generally have a term of ten years and vesting will be subject to an employee's
continued employment. The board of directors of Holdings, or a committee designated by it, may accelerate the vesting of an option at any time. In addition,
vesting of options will be accelerated if Holdings experiences a change in control (as defined in the Stock Incentive Plan) unless options with substantially
equivalent terms and economic value are substituted for existing options in place of accelerated vesting. Vesting of options will also be accelerated in the
event of an employee's death or disability (as defined in the Stock Incentive Plan). Upon a termination for cause (as defined in the Stock Incentive Plan), all
options held by an employee are immediately cancelled. Following a termination without cause, vested options will generally remain exercisable
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