May 16, 2006
Mr. J. Patrick Spainhour
2267 Waverly Drive
West Point, MS 39773
Re:
Employment as Interim Chairman and Chief Executive Officer of The ServiceMaster Company
Dear Mr. Spainhour:
On behalf of the Board of Directors of The ServiceMaster Company (the " Company" ), I am pleased to offer you employment with the Company as its Interim Chairman and Chief Executive Officer.
1. Your employment with the Company will commence as of May 16, 2006 (the " Effective Date" ).
2. As Interim Chairman and Chief Executive Officer, you will report to the Board of Directors of the Company (the " Board" ), and perform the duties customarily associated with such position, including such specific duties as the Board may from time to time assign to you. You will be expected to perform faithfully and loyally and to the best of your abilities the duties assigned to you and to devote your full business time, attention and effort to the affairs of the Company and its subsidiaries, and use your reasonable best efforts to promote the interests of the Company and its subsidiaries.
3. Your base salary will be paid, in accordance with the Company' s regular payroll practices, at an initial annual rate of $800,000 (less any withholdings and deductions required by law or authorized by you). Your base salary will be reviewed by the Compensation and Leadership Development Committee and the Board at the end of each calendar year.
4. You will be paid a guaranteed bonus for your service as Interim Chairman and Chief Executive Officer during 2006 in an amount equal to 150% of any salary paid for service in 2006; provided, that any such bonus would be paid when paid to other executive officers of the Company (but not later than March 15, 2007) and such bonus would not be payable by the Company if you terminate your employment for any reason other than death or disability or if the Board terminates your employment for cause. For purposes of this letter agreement, " cause" means: (a) a material breach by you of your duties and responsibilities (other than as a result of incapacity due to physical or mental illness) which is willful and deliberate on your part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied within 30 days after receipt of written notice from the Board specifying such breach; (b) the commission by you of a felony or misdemeanor involving any act of fraud, embezzlement or dishonesty or any other intentional misconduct by you that adversely and significantly affects the business affairs or reputation of the Company or an affiliated company; or (c) any failure to cooperate with any investigation or inquiry into your business practices, whether internal or external, including, but not limited to your refusal to be deposed or to provide testimony at any trial or inquiry. You may elect to defer the receipt of salary and/or bonus by completing the appropriate documents under the ServiceMaster Deferred Compensation Plan
5. You will be entitled to those employee benefits and perquisites which the Company from time to time generally makes available to its executive officers (" Benefits" ) subject to the terms and conditions of such benefit plans or programs; provided that, subject to Section 9 below, you do not have the right to participate in the Company' s equity incentive plan in 2006 or the right to enter into a change in control severance agreement. The Benefits include, without limitation, 401(k), deferred compensation plan, employee stock purchase plan, medical insurance, dental insurance, life insurance, accidental deat ...
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