American Home Shield 2010 Annual Report Download - page 142

Table of Contents
market value. 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. See discussion above under Severance Benefits for NEOs for a discussion of the treatment of Mr. Spainhour's options following his retirement.
If an executive's employment terminates by reason of death or disability before there is a public offering of the shares, Holdings and certain Equity
Sponsors have the right to purchase the shares at fair market value and the executive (or his/her heirs) may require Holdings to repurchase the executive's
shares at fair market value. Upon such termination, unvested options will vest and all options will remain exercisable until the first to occur of (i) the one-year
anniversary of the executive's date of termination or (ii) the expiration of the options' normal term, after which date such options are cancelled. RSUs shall
vest as to the number of RSUs that would have vested on the next anniversary of the grant date (assuming the executive's employment had continued through
such anniversary) multiplied by a fraction, the numerator of which is the number of days elapsed since (x) the grant date, if the termination due to death or
disability occurs on or prior to the first anniversary of the grant date, or (y) the most recent prior anniversary of the grant date, if the special termination
(i.e., death or disability) occurs after the first anniversary of the grant date, and the denominator of which is 365.
The stock option agreements provide that the vesting of options to purchase shares of Holdings common stock will be accelerated if Holdings
experiences a change in control (as defined in the MSIP), unless Holdings' Board of Directors reasonably determines in good faith that options with
substantially equivalent or better terms are substituted for the existing options. Upon a change in control, all RSUs shall become vested. A change in control
means:
an acquisition by a person or group (other than the Equity Sponsors or their affiliates) of 50 percent or more of the voting power of Holdings'
voting stock (other than an acquisition by Holdings or by a benefit plan of Holdings);
a change in a majority of Holdings' Board (other than by action of the incumbent Board members);
a merger, consolidation or similar transaction as a result of which Holdings' stockholders do not own more than 50 percent of the voting power of
the surviving company; or
a sale, transfer or other disposition of all or substantially all of Holdings' assets to an unaffiliated third party.
Notwithstanding the forgoing, an initial public offering of Holdings common stock shall not constitute a change in control.
The Holdings' Board of Directors also has the discretion to accelerate the vesting of options or RSUs at any time and from time to time.
Payment Upon Death, Disability, Qualifying Termination, or Change in Control as of December 31, 2010
The following table sets forth information regarding the value of payments and other benefits payable by the Company to each of the NEOs employed by
the Company as of December 31, 2010 in the event of death, disability, qualifying termination or change in control. The amounts shown do not include
payments of compensation that have previously been deferred as disclosed under the Nonqualified Deferred Compensation (2010) table. Except as otherwise
noted below, the amounts shown assume termination or change in control effective as of December 31, 2010 and a fair market value of Holdings common
stock on December 31, 2010 of $11 per share, as determined by Holdings' Compensation Committee.
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