American Home Shield 2010 Annual Report Download - page 140

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The amounts in this column do not represent above-market or preferential earnings and therefore are not included in the Summary
Compensation Table. For Mr. McMullen, the amount in this column includes $2,503 attributable to the increase in the value of his
DSUs in 2010.
Mr. McMullen elected to allocate a portion of his eligible deferred compensation to invest in 2,503 DSUs in 2007. The value of these
units ($27,533) is included in the Aggregate Balance at Last FYE column. Amounts shown in this column for Mr. McMullen were
included as compensation in prior years' Summary Compensation Table in an amount of $222,750 in 2008 and $109,891 in 2009.
(3)
(4)
Deferred Compensation Programs
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 mutual funds 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 2010. 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 held in trust and are considered general assets of the Company. When such payments are due, the cash will be
distributed from the DCP's trust.
Participants in the 2007 offering under the MSIP were permitted to allocate eligible deferred compensation under the DCP to purchase DSUs, which
represent the right to receive a share of Holdings common stock on the first to occur of (i) the participant's termination of employment, (ii) a fixed date
selected by the participant or (iii) a change in control of Holdings. DSUs were acquired for $10 each. Mr. McMullen was the only NEO 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 NEOs
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 NEOs. Our obligations will consist of those obligations accrued at the date of termination, including
payment of earned salary, vacation, reimbursement of expenses and obligations that 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) that is demonstrably willful and deliberate on the executive's part, committed in bad faith or without reasonable belief that such
breach is in the best interests of the Company and not remedied in a reasonable period of time after receipt of written notice from the Company specifying
such breach; 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 retirement agreement provides for severance benefits equal to two times his highest annual base salary and highest annual target bonus
upon his retirement. The severance benefits are payable over a two year period following Mr. Spainhour's retirement. The agreement also extended the period
of time to exercise his vested non-matching stock options (a total of
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