American Home Shield 2009 Annual Report Download - page 162

Table of Contents
Deferred Compensation Plan
The DCP is a nonqualified deferred compensation plan designed to afford certain highly compensated employees the opportunity to defer up to
75 percent of their compensation on a pre-tax basis. Deferred amounts are credited with earnings or losses based on the rate of return of investments selected
by the participants in the DCP. The Company, in its sole discretion, may make matching contributions, based on the amounts that are deferred by employees
pursuant to the DCP, but did not choose to make matching contributions for 2009. Distributions are paid at the time elected by the participant in accordance
with the DCP.
The DCP is not currently funded by the Company, and participants have an unsecured contractual commitment from the Company to pay the amounts
due under the DCP. All plan assets are considered general assets of the Company. When such payments are due, the cash will be distributed from the DCP's
rabbi trust.
Participants in the 2007 offering under the MSIP were permitted to allocate eligible deferred compensation under the DCP to purchase DSUs. The DSUs
were acquired for $10 each. Mr. McMullen is the only Named Executive Officer who elected to allocate a portion of his eligible deferred compensation to
purchase DSUs.
Potential Payments Upon Termination or Change in Control
Severance Benefits for Named Executive Officers
Upon a termination by the Company for cause, by the executive without good reason, or upon death or disability, we have no obligation to pay any
prospective amounts or provide any benefits to our Named Executive Officers. Our obligations will consist of those obligations accrued at the date of
termination, including payment of earned salary, reimbursement of expenses and obligations which may otherwise be payable in the event of death or
disability. For this purpose, "cause" means a material breach by the executive of the duties and responsibilities of the executive (other than as a result of
incapacity due to physical or mental illness) which is demonstrably willful and deliberate on the executive's part, which is committed in bad faith or without
reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written
notice from the Company specifying such breach and period of time; or the commission by the executive of a felony or misdemeanor involving any act of
fraud, embezzlement or dishonesty or any other intentional misconduct by the executive that materially and adversely affects the business affairs or reputation
of the Company.
Mr. Spainhour's employment agreement provides for severance benefits equal to two times his highest annual base salary and highest annual target bonus
if his employment is terminated involuntarily by the Company without cause or voluntarily by him for Good Reason. "Good Reason" means, without
Mr. Spainhour's written consent, the occurrence of any of the following events:
Any of (i) the reduction in any material respect in Mr. Spainhour's position(s), authorities or responsibilities with ServiceMaster,
(ii) Mr. Spainhour no longer reporting directly to the Board or (iii) any failure to re-elect Mr. Spainhour to serve as CEO of ServiceMaster;
provided, however, that "Good Reason" shall not occur if the Board elects a non-executive Chairman, so long as Mr. Spainhour remains a
member of the Board and continues to report directly to the Board;
A reduction in Mr. Spainhour's base salary or target annual bonus, each as in effect as of the effective date or as the same may be increased from
time to time thereafter;
The failure of ServiceMaster to (i) provide Mr. Spainhour and Mr. Spainhour's dependents benefits substantially comparable to the plans,
practices, programs and policies of ServiceMaster and it subsidiaries in effect for Mr. Spainhour on the effective date of his
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