American Home Shield 2010 Annual Report Download - page 130

Table of Contents
the next 2 percent to 6 percent contributed. We also maintain the ServiceMaster Deferred Compensation Plan (the "DCP"), which is a non-qualified
supplemental retirement plan designed to afford certain highly compensated employees (including the NEOs, executive officers and certain other employees)
the opportunity to defer additional amounts of compensation on a pre-tax basis, over and above the amounts allowed under the PSRP. The DCP permits our
employees to defer the obligation to pay taxes on certain elements of the compensation that they are entitled to receive. All deferred amounts under the DCP
are subject to earnings or losses based on the investments selected by the individual participants. The Company believes that provision of the DCP is
important as a recruitment and retention tool as many, if not all, of the companies with which the Company competes for executive talent provide a similar
plan to their senior employees and the cost to the Company of providing this benefit is minimal. The Company provides no match for employee contributions
under the DCP.
Employee Benefits and Executive Perquisites
We offer a variety of health and welfare programs to all eligible employees, including the NEOs. The NEOs are eligible for the same health and welfare
benefit programs on the same basis as the rest of the Company's employees, including medical and dental care coverage, life insurance coverage and short-
and long-term disability.
The Company limits the use of perquisites as a method of compensation and provides executive officers with only those perquisites that we believe are
reasonable and consistent with our compensation goal of enabling the Company to attract and retain superior executives for key positions. The perquisites
provided to our NEOs are memberships in social and professional clubs and, for our CEO, personal use of Company aircraft and certain spousal travel.
Expenses associated with relocation of newly hired executives (including income tax gross-ups on taxable relocation expense reimbursements) are paid to
certain executives pursuant to our relocation policy and are based on standard market practices for executive-level relocation.
The Company has established a policy regarding our CEO's personal use of the Company aircraft (the "Aircraft Policy"). The Aircraft Policy provides
that the CEO shall reimburse the Company for personal use of the Company aircraft exceeding 50 hours annually. Any amount so reimbursed to the Company
shall be applied to reduce the executive's taxable income arising from the personal use.
Post-Termination Compensation
Holdings entered into a retirement agreement on September 8, 2010 with Mr. Spainhour following the announcement of his plan to retire from the
Company. This agreement is described below under the Potential Payments Upon Termination or Change in Control heading in this Item 11. In connection
with Mr. Spainhour's retirement, Holdings extended the option exercise period on 525,000 options from three months to three years following his departure
date. This extension of the option exercise period was considered a stock option modification and resulted in additional stock compensation expense of
$546,684.
For 48 months beginning on his hire date (March 23, 2009), Mr. Donly will be covered under the terms of his offer letter that provides payments related
to termination of employment. All of the other NEOs, except Mr. Spainhour as noted above, are covered under ServiceMaster's standard policy or practice as
in effect at the time employment is terminated. The terms of these post-termination arrangements are described in detail below under the Potential Payments
Upon Termination or Change in Control heading in this Item 11.
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