American Home Shield 2011 Annual Report Download - page 158

Table of Contents
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 the then fair market value does not extend to shares
obtained through the exercise of options. Mr. Spainhour exercised stock options following his retirement.
If an executive voluntarily terminates his employment for any reason 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 the then 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 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. During 2011, shares were repurchased from
Messrs. Spainhour and Steve Martin subsequent to their respective departures. The shares Mr. Spainhour acquired pursuant to the stock option exercise were
later repurchased by the Company following a specified holding period.
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
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