American Home Shield 2011 Annual Report Download - page 157

Table of Contents
Mr. Mullany's employment agreement provides for severance benefits that if the Company were to terminate Mr. Mullany's employment without cause
or Mr. Mullany terminates his employment for good reason, he would receive (i) continued payment of his monthly base salary for 24 months following the
date of termination; (ii) continuation of health and certain other benefits for two years; (iii) the annual bonus earned for the fiscal year immediately preceding
the date of termination to the extent not previously paid; (iv) a prorated bonus through his date of termination; and (v) an amount equal to two times his
average annual bonus paid or payable to Mr. Mullany with respect to the two fiscal years immediately preceding the date of termination or, if Mr. Mullany has
not received an annual bonus for either or both of those fiscal years immediately preceding the date of termination, such average to be calculated using his
target annual bonus for such year or years, as applicable. Payments of Mr. Mullany's severance benefits are subject to Mr. Mullany's signing a general release
of claims. Mr. Mullany is also subject to covenants not to compete, solicit nor disclose confidential information for two years following termination. Upon
Mr. Mullany's retirement, death or disability, the Company shall pay to Mr. Mullany (or his executors or legal representatives) the annual bonus earned for the
fiscal year immediately preceding the date of termination to the extent not previously paid; plus a prorated bonus through his date of termination.
Mr. Steve Martin entered into a severance agreement with the Company that provided for a total severance benefit of $1,035,621, payable in 12 monthly
installments that commenced on May 31, 2011. Mr. Steve Martin's severance benefits were subject to his signing a general release and observing covenants
not to compete, solicit nor disclose confidential information.
The Company entered into a severance agreement with Mr. Fallon upon his hire that provides that if the Company were to terminate Mr. Fallon's
employment without cause or Mr. Fallon terminates his employment for good reason, he would receive (i) continued payment of his monthly base salary for
12 months following the date of termination; (ii) the annual bonus earned for the fiscal year immediately preceding the date of termination to the extent not
previously paid; (iii) if his date of termination is after June 30 of a fiscal year, a prorated bonus through his date of termination; and (iv) an amount equal to
the annual bonus paid or payable to Mr. Fallon with respect to the fiscal year immediately preceding the date of termination or, if Mr. Fallon has not received
an annual bonus for the fiscal year immediately preceding the date of termination, his target annual bonus for such year. Upon Mr. Fallon's retirement, death
or disability, the Company shall pay to Mr. Fallon (or his executors or legal representatives) the annual bonus earned for the fiscal year immediately preceding
the date of termination to the extent not previously paid; plus if his date of termination is after June 30 of a fiscal year, a prorated bonus through his date of
termination.
Other than the employment agreements with Messrs. Mullany and Fallon, the Company does not currently offer employment agreements or change in
control agreements to newly hired executive officers. The Board periodically reassesses the need to offer these types of arrangements and may decide to do so
in the future. As officers who report directly to our CEO, Messrs. Cregg, Coba and Brackett are eligible to receive severance if terminated without cause.
Under ServiceMaster's practice in effect as of December 31, 2011, 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 ABP, would be payable to the
terminated executive at the same time as annual bonuses are paid to other executives for the applicable year. Mr. David Martin, as a member of senior
management, would be eligible for the same severance benefits as stated above.
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
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