American Home Shield 2009 Annual Report Download - page 120

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 20. Stock-Based Compensation
Successor
The board of directors of Holdings adopted the ServiceMaster Global Holdings, Inc. Stock Incentive Plan (the "MSIP") in 2007. The MSIP 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 MSIP and determines the specific number of shares to be offered or options to be granted to an individual
employee or director. A maximum of 13,045,000 shares of Holdings stock are available for issuance under the MSIP. Holdings currently intends to satisfy any
need for shares of common stock of Holdings associated with the exercise of options issued under the MSIP through those new shares available for issuance
or any shares repurchased from participants in the MSIP.
All option grants under the MSIP 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 10 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 MSIP) 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 MSIP). Upon a termination for cause (as defined in the MSIP), all options held by an employee are immediately cancelled. Following a
termination without cause, vested options will generally remain exercisable through the earliest of the expiration of their term or three months following
termination of employment (one year in the case of death, disability or retirement at normal retirement age).
Unless sooner terminated by the board of directors of Holdings, the MSIP will remain in effect until November 20, 2017.
In December 2007, Holdings completed an equity offering to certain executive officers and key employees pursuant to the MSIP. The shares sold and
options granted to employees in connection with this equity offering are subject to and governed by the terms of the MSIP. In connection with this offering,
Holdings sold 1,416,870 shares of common stock at a purchase price of $10.00 per share and sold 576,668 deferred share units ("DSUs") at a purchase price
of $10.00 per DSU. DSUs represent a right to receive a share of common stock in the future. Holdings also granted options to purchase 3,937,076 additional
shares of common stock at an exercise price of $10.00 per share in connection with this equity offering. In addition, Holdings granted ServiceMaster's
executive officers and key employees options to purchase an additional 5,332,125 shares of Holdings common stock at an exercise price of $10.00 per share.
These options are subject to and governed by the terms of the MSIP. The $10.00 per share purchase price and exercise price was based on the determination
by the board of directors of Holdings of the fair market value of the common stock of Holdings as of the purchase/grant date.
In 2009 and 2008, Holdings completed various equity offerings to certain executive officers and key employees pursuant to the MSIP. The shares sold
and options granted to employees in connection with these equity offerings are subject to and governed by the terms of the MSIP. In connection with these
offerings, Holdings sold a total of 234,500 shares of common stock in 2009
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