American Home Shield 2010 Annual Report Download - page 135

Table of Contents
Grants of Plan-Based Awards (2010)
The amount listed in the table below in the column entitled Estimated Future Payouts Under Non-Equity Incentive Plan Awards represents the potential
2010 earnings under the Annual Bonus Plan, which is a non-equity incentive plan. The threshold amount is the minimum earned amount if threshold
performance is attained for all performance measures. There is no maximum in this plan. The NEOs with Company-wide responsibilities earned payouts for
2010 under our Annual Bonus Plan equal to 67.7 percent of the target payout. The amount earned reflects above target achievement of revenue goals and
above threshold performance against the ACOP goal. No payout was earned under the Annual Bonus Plan for the cash flow component as threshold
performance was not achieved. Mr. Donly earned a payout under the Annual Bonus Plan equal to 77.0 percent of his target payout. Additional information is
discussed under Annual Bonus Plan in the Compensation Discussion and Analysis section above in this Item 11.
Estimated Future Payouts
Under
Non-Equity Incentive Plan
Awards
All Other Stock Awards:
Number of Shares
of Stock or Units(1)
Grant Date
Fair Value of
Stock and Option
Awards
Named
Executive
Officer
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
J. Patrick
Spainhour N/A 674,853 985,000 None N/A
(2) (2) 546,684(2)
Steven J.
Martin N/A 178,134 260,000 None
9/24/2010 60,000 600,000(3)
Greerson G.
McMullen N/A 187,575 273,780 None
9/24/2010 60,000 600,000(3)
Jed L.
Norden N/A 171,008 249,600 None
9/24/2010 60,000 600,000(3)
Stephen M.
Donly N/A 157,391 284,050 None
9/24/2010 65,000 650,000(3)
Represents RSU awards granted on September 24, 2010 under the MSIP that will vest at a rate of one-third per year on each of the first three anniversaries of their grant dates.
Mr. Spainhour was granted 700,000 standalone options on December 19, 2007, of which 525,000 options have vested. The amount in the Grant Date Fair Value of Stock and Option
Awards column for Mr. Spainhour reflects the incremental fair value associated with the modification of Mr. Spainhour's options in 2010. In September 2010, ServiceMaster
announced the retirement of Mr. Spainhour with a targeted retirement date of December 31, 2010 or such later date as a successor CEO was appointed. In connection with
Mr. Spainhour's retirement announcement, Holdings extended the option exercise period on 525,000 options from three months to three years following his retirement date. This
extension of the option exercise period was considered a stock option modification and resulted in additional stock compensation expense of $546,684.
Represents RSU awards granted on September 24, 2010 under the MSIP that will vest at a rate of one-third per year on each of the first three anniversaries of their grant dates. The
amounts in this column reflect the aggregate grant date fair value of RSUs awarded to the NEOs in 2010. The assumptions used in the valuation of RSU awards are disclosed in the
Stock-Based Compensation footnote in the audited financial statements for the fiscal year ended December 31, 2010 included in Item 8 of this Annual Report on Form 10-K.
Employment Agreements
Employment Agreement with Mr. Spainhour
ServiceMaster entered into an employment agreement with Mr. Spainhour to serve as our CEO effective as of June 30, 2006. The original term of the
employment agreement ended on December 31, 2008; however, 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 $985,000 in 2010, with no cap on payout. The actual payouts under the Annual Bonus Plan are subject to
(1)
(2)
(3)