American Home Shield 2009 Annual Report Download - page 160

Table of Contents
Employment Agreements
Employment Agreement with Mr. Spainhour
ServiceMaster entered into an employment agreement with J. Patrick Spainhour to serve as our Chief Executive Officer effective as of June 30, 2006.
The original term of the employment agreement ended on December 31, 2008. The agreement automatically renews each year unless terminated by
ServiceMaster or Mr. Spainhour.
The employment agreement provides Mr. Spainhour with an annual base salary of not less than $900,000. Mr. Spainhour's annual bonus target under the
Annual Bonus Plan is 100 percent of his salary, or $950,000 in 2009, with no cap on payout. The actual payouts under the Annual Bonus Plan are subject to
the satisfaction of performance targets established by the Board.
Mr. Spainhour's base salary, target annual bonus and all other compensation are subject to approval each year by the Board.
Employment Offer to Mr. McMullen, Mr. Donly and Mr. Crenshaw
At the time Messrs. McMullen, Donly and Crenshaw were hired, ServiceMaster provided each with an offer letter that set forth their initial base salary
and initial annual target bonus opportunity under our Annual Bonus Plan. (The actual payouts under the Annual Bonus Plan are subject to the satisfaction of
performance targets established by the Board.) Base salary, target annual bonus and all other compensation are subject to approval each year by the Board. In
addition, the offer letter provided that each would be offered a one-time future grant of stock options to be made at the first closing of a sale of shares after the
date of hire. Mr. Donly and Mr. Crenshaw received such a grant of options in 2009 as disclosed in the Summary Compensation Table and Grants of Plan-
Based Awards (2009) table above. Mr. McMullen's grant was made in 2007.
MSIP
Other than the option grants to Mr. Donly and Mr. Crenshaw described above, there were no stock options awarded to Named Executive Officers under
the MSIP or other equity-based awards granted to Named Executive Officers in 2009. All stock options currently held by the Named Executive Officers are
shown below in the Outstanding Equity Awards at Fiscal Year-End Table (2009). The MSIP and an employee stock option agreement govern each option
award and provide, among other things, that the options vest in equal installments over the first four years of the ten-year option term. Prior to the exercise of
an option, the holder has no rights as a stockholder with respect to the shares subject to such option, including voting rights and the right to receive dividends
or dividend equivalents. For more information on the MSIP, see "Compensation Discussion and Analysis—Long-Term Incentive Plans" above. See "Potential
Payments Upon Termination or Change in Control" below for information regarding the cancellation or acceleration of vesting of stock options.
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