American Home Shield 2010 Annual Report Download - page 141

Table of Contents
525,000 options) from three months to three years following his retirement. Mr. Spainhour is allowed to retain a maximum of 50,000 shares of his original
investment in Holdings (a total of 300,000 shares) and Holdings or CD&R investors will exercise their call right with respect to his remaining shares.
Mr. Spainhour will have three months from his retirement to exercise his vested matching options (a total of 450,000 options) and Holdings or CD&R
investors will exercise their call right with respect to any shares acquired by Mr. Spainhour upon the exercise of those options. The Company will continue
medical, prescription drug and life insurance for Mr. Spainhour and his dependents until his 65th birthday with expenses shared in the same proportion as prior
to his retirement. Mr. Spainhour's severance benefits are subject to his signing a general release and observing covenants not to compete, solicit, nor disclose
confidential information.
Mr. Donly's offer letter provides that he will be eligible for severance in the event of his termination without cause during the first 48 months of his
employment with the Company (i.e., through March 22, 2013). If the Company were to terminate Mr. Donly's employment without cause during that time, he
would receive the higher of (i) an amount equal to one times his base salary and (ii) severance in accordance with ServiceMaster's policy or practice in
existence at the time of his termination and applicable to executives at his level within the organization.
As officers who report directly to our CEO, Messrs. Martin, McMullen and Norden are eligible to receive severance if terminated without cause. Under
ServiceMaster's practice in effect as of December 31, 2010, in the event of such termination, an amount equal to one times base salary plus target bonus for
the year of termination, and, if termination occurs after June 30 of a year, a prorated portion of the bonus earned under the Annual Bonus Plan, would be
payable to the terminated executive at the same time as annual bonuses are paid to other executives for the applicable year.
MSIP
If an executive's employment is terminated by the Company for cause before there is a public offering of Holdings' common shares, all options (vested
and unvested) and RSUs are immediately cancelled and Holdings and certain Equity Sponsors have the right to purchase shares owned by the executive at the
lower of fair market value or the original cost of the shares to the executive.
If an executive's employment is terminated by the Company without cause before there is a public offering of Holdings' common shares, all unvested
options and RSUs immediately terminate and Holdings and certain Equity Sponsors have the right to repurchase shares owned by the executive at fair market
value. If Holdings and certain Equity Sponsors choose not to exercise their repurchase rights following an involuntary termination without cause, the
executive may require Holdings to repurchase the executive's shares at fair market value. Upon such a termination, the executive may exercise vested options
before the first to occur of (i) the three month anniversary of the executive's termination of employment or (ii) the expiration of the options' normal term, after
which date such options are cancelled. The executive's right to require Holdings to repurchase shares at fair market value does not extend to shares obtained
through the exercise of options.
If an executive terminates his employment for any reason voluntarily before there is a public offering of Holdings' common shares, all unvested options
and RSUs immediately terminate and Holdings and certain Equity Sponsors have the right to purchase shares owned by the executive at fair market value.
Upon such a termination, the executive may exercise vested options before the first to occur of (i) the three-month anniversary of the executive's termination
of employment (one-year anniversary in the case of retirement) and (ii) the expiration of the options' normal term, after which date such options are cancelled.
If the executive's voluntary termination is because of the executive's retirement and if Holdings and certain Equity Sponsors choose not to exercise their
repurchase rights, the executive may require Holdings to repurchase purchased shares at fair
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