Exhibit 10.34

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

This Confidential Separation Agreement and General Release (“Agreement”),
effective as of _____February 26, 2007_______ (the “Effective Date”), is made
and entered into by you, Mitchell T. Engel, on behalf of yourself, your heirs,
executors, administrators, successors and assigns (collectively referred to as
“you” or “Employee”) and The ServiceMaster Company, on behalf of itself, its
divisions, subsidiaries, affiliates, related companies, predecessors,
successors, assigns, and their officers, directors, employees, insurers,
stockholders, and agents (collectively referred to as “ServiceMaster”). In
consideration of the mutual covenants in this Agreement, the parties hereby
agree as follows:

1.            Confidentiality of this Agreement. You agree that the terms of
this Agreement are to remain confidential and you will not disclose the terms of
this Agreement to anyone other than your spouse, tax advisor, or attorney, or as
required by law. Upon inquiry by any other person, you will state that you have
no comment. You agree that you will request that persons to whom disclosure is
made pursuant to this section will keep any such information confidential and
will not disclose it to others. Notwithstanding this confidentiality provision,
you may disclose to any prospective employer the fact that you are subject to
obligations of confidentiality, non-solicitation and non-competition. The term
“person” includes, without limitation, any individual (including all employees
of the enterprise), corporation, company or other entity.

 

2.

Separation Pay.

(a)          Your employment with ServiceMaster will end on December 31, 2007
(the “Separation Date”), and you agree, subject to Sections 2(d) and 2(e), to
remain employed through such date. In consideration and exchange for your
promises and representations herein, including but not limited to your release
of claims in Section 16 of this Agreement, ServiceMaster agrees to pay you,
within fifteen (15) days after your Separation Date, by lump sum payment, the
gross amount of $892,000.00, which is the equivalent of twenty-four months of
your salary, less applicable payroll withholdings and other deductions. In
addition, if you are a participant in ServiceMaster’s medical plan on the
Separation Date, ServiceMaster agrees to pay you, included with the payment
above, an amount equal to the first three months of COBRA premiums that exceed
the amount you paid as an active employee for the same coverage (with tax
gross-up) as of the Separation Date.

(b)          As additional consideration for you remaining employed through the
Separation Date, and conditioned upon you signing a second release agreement in
substantially the same form as Exhibit A on your Separation Date, ServiceMaster
agrees to pay you, within fifteen (15) days after your Separation Date, by lump
sum payment, the gross amount of $892,000.00, less applicable payroll
withholdings and other deductions.

(c)         The payments set forth in Sections 2(a) and 2(b) will be increased
(but may not be decreased) for any increase in annual base salary or annual
target bonus approved by the Compensation and Leadership Development Committee
of the Board or the Chairman prior to the Separation Date.

 

CIC 2X 6/30+

 

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(d)          Notwithstanding Sections 2(a), 2(b) and 2(c), if a Change in
Control (as defined in the Change in Control Severance Agreement between you and
ServiceMaster showing an effective start date of May 21, 2003 (the “Change in
Control Agreement”)) occurs on or before your Separation Date and you become
entitled to severance payments and benefits under Sections 3(a) and 3(b) of the
Change in Control Agreement, then all of your rights and obligations with
respect to such termination shall be governed by the Change in Control Agreement
and you shall have no rights or obligations under this Agreement, including,
without limitation, no right to receive a retention bonus pursuant to Section 3.

(e)          Notwithstanding Sections 2(a), 2(b), 2(c) and 2(d), solely for the
purpose of your right to terminate your employment for Good Reason pursuant to
the Change in Control Agreement due to your relocation resulting from the
consolidation of ServiceMaster’s Downers Grove office into its Memphis office
(the “Consolidation”), (i) if a Change in Control (as defined in the Change in
Control Agreement) occurs on or before your Separation Date, (ii) the entity
effecting the Change in Control does not advise you in writing that it is
retaining you in your current employment in ServiceMaster’s Downers Grove office
because it is abandoning the Consolidation and (iii) you provide full-time
services to ServiceMaster through your Separation Date, then you will be deemed
to have terminated your employment on your Separation Date for Good Reason
pursuant to the Change in Control Agreement due to your relocation resulting
from the Consolidation, and all of your rights and obligations with respect to
such termination shall be governed by the Change in Control Agreement, your
Separation Date shall be your Date of Termination under the Change in Control
Agreement, and you shall have no rights or obligations under this Agreement.
Nothing in this Section 2(e) shall limit or restrict your right to terminate
your employment for Good Reason under the Change in Control Agreement due to
circumstances other than your relocation resulting from the Consolidation. If
you do not become entitled to severance payments and benefits under Sections
3(a) and 3(b) of the Change in Control Agreement, whether because a Change in
Control did not occur on or before your Separation Date or because your
employment did not terminate other than by reason of a Nonqualifying Termination
under the Change in Control Agreement, and you provide full-time services to
ServiceMaster through your Separation Date, then all of your rights and
obligations with respect to such termination shall be governed by this
Agreement, and you shall have no rights or obligations under the Change in
Control Agreement.

(f)           Notwithstanding anything to the contrary contained in this
Agreement, if you become entitled to severance payments and benefits pursuant to
Sections 3(a) and 3(b) of the Change in Control Agreement due to your
termination of employment other than by reason of a Nonqualifying Termination
under the Change in Control Agreement upon or after the occurrence of a Change
in Control, you will not be entitled to any payments or benefits pursuant to
this Agreement, including, without limitation, no right to receive a retention
bonus pursuant to Section 3.

3.            Retention Bonus. If (a) you continue to work to effectively
transition your duties to another employee of ServiceMaster, as set forth in
Exhibit B, (b) you comply with your agreement in Section 1, (c) you remain
continuously employed by ServiceMaster from the Effective Date through and
including your Separation Date, and (d) on your Separation Date, you

 

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execute a second release agreement in substantially the same form of Exhibit A,
ServiceMaster agrees to pay you, within fifteen (15) days after your Separation
Date, by lump sum payment, the gross amount of $446,000.00, less applicable
payroll withholdings and other deductions. The payment set forth in this Section
will be increased (but may not be decreased) proportionately to reflect any
increase in annual base salary or annual base compensation or annual target
bonus made prior to the Separation Date.

4.            Outplacement. ServiceMaster will provide you with outplacement
services as designated by ServiceMaster policy, and will be provided to you
prior to your Separation Date.

5.            Group Insurance. You will become eligible for continuation of your
group health insurance coverage under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) on the first day following the effective date of
your termination of employment.

6.            PSRP. Your participation and your eligibility to participate in
the ServiceMaster Profit Sharing and Retirement Plan (“PSRP”) will end at the
close of business on the effective date of your termination of employment. You
will be eligible to receive the ServiceMaster matching contribution for the year
2006 but you will not be eligible to receive the ServiceMaster matching
contribution for the year 2007 unless you are employed by ServiceMaster on
December 31, 2007. Any amounts to be paid, distributed, rolled over, or held
under the PSRP will be paid, distributed, rolled over or held in accordance with
the terms of the PSRP and applicable rules and regulations.

7.            Deferred Compensation Plan. If you participate in or are eligible
to participate in ServiceMaster’s Deferred Compensation Plan, your participation
and your eligibility to participate in the ServiceMaster Deferred Compensation
Plan (“DCP”) will end on the effective date of your termination of employment.
You will be eligible to receive the ServiceMaster matching contribution for the
year 2006 but you will not be eligible to receive the ServiceMaster matching
contribution for the year 2007 unless you are employed by ServiceMaster on
December 31, 2007. Any amounts to be paid or distributed under the DCP will be
paid or distributed in accordance with the terms of the DCP and your elections.

8.            ESPP. Your participation and your eligibility to participate in
the ServiceMaster Employee Stock Purchase Plan (“ESPP”) will end on the
effective date of your termination of employment. Any shares held in the ESPP
will be distributed in accordance with the terms of the ESPP.

9.            ABP and CPP. Subject to the approval of the Compensation and
Leadership Development Committee of the Board of Directors of ServiceMaster, if
you are eligible to participate in ServiceMaster’s Annual Bonus Plan (“ABP”) or
Corporate Performance Plan (“CPP”), or both, for the year 2006, ServiceMaster
agrees to pay you by lump sum payment, less applicable payroll withholdings and
other deductions, the amount earned in accordance with the terms of the ABP,
including any individual performance goals and targets applicable to you, and
the CPP. Any payment would be made to you in a time period consistent with
payments made to active participants in the 2006 ABP and 2006 CPP.

 

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Subject to the approval of the Compensation and Leadership Development Committee
of the Board of Directors of ServiceMaster (including, among other things, the
discretion of the Committee to eliminate a bonus plan), if you are eligible to
participate in the 2007 ABP or 2007 CPP, or both, ServiceMaster agrees to pay
you by lump sum payment, less applicable payroll withholdings and other
deductions, the amount earned in accordance with the terms of the 2007 ABP; it
being understood that your 2007 target bonus under the ABP and 2007 target
bonus, if any, under the CPP shall be at least equal to your 2006 target bonus
under the ABP or CPP, as applicable); provided, however, that 100% of the amount
earned shall be based upon corporate performance goals and not any individual
performance goals. The amount payable, if any, in respect of 2007 pursuant to
this section shall equal the amount earned, if any, under the 2007 ABP or 2007
CPP, or both, multiplied by a fraction, the numerator of which is the number of
days from and including January 1, 2007 through and including the Separation
Date, and the denominator of which is 365. Any payment would be made to you in a
time period consistent with payments made to active participants in the 2007 ABP
and 2007 CPP. The amount of the 2007 ABP bonus, if any, will be increased (but
may not be decreased) for any increase in annual base salary or target bonus
percentage, or both. Subject to the determination of the Compensation and
Leadership Development Committee to continue the CPP in 2007, the number of 2007
CPP units will not be less than the number of 2006 CPP units.

10.          Stock Options and Stock Appreciation Rights. Except as set forth in
this section, each option to purchase ServiceMaster common stock and stock
appreciation right (“SAR”) relating to ServiceMaster common stock held by you
will continue in accordance with its terms. For purposes of each such option and
SAR, the date of your termination of employment shall be the close of business
on the Separation Date; it being understood that each such option and SAR shall
be exercisable after the Separation Date only to the extent exercisable on the
Separation Date and will expire six months after the Separation Date (unless
otherwise specifically provided for in the stock option agreement or SAR
agreement); provided, however, that any WeServeHomes.com, LandCare or ARS stock
options, if any, that have been granted to you will expire three months after
the Separation Date. Notwithstanding the foregoing, if your employment is
terminated for any reason prior to the Separation Date, the vesting of options
and SARs held by you on the effective date of your termination of employment
shall be governed by the terms of the applicable stock option agreement and SAR
agreement. Each stock option and SAR may vary with regard to option schedule,
exercise price, base price, and post-employment obligations regarding
competition against ServiceMaster, confidentiality and solicitation of
employees. You should refer to each stock option agreement and SAR agreement for
these details.

11.          Restricted Stock. All shares of restricted stock held by you that
are not vested on the Separation Date shall terminate at the close of business
on the Separation Date. Notwithstanding the foregoing, if your employment is
terminated for any reason prior to the Separation Date, the vesting of all
shares of restricted stock held by you on the effective date of your termination
of employment shall be governed by the terms of the applicable restricted stock
award agreement.

 

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12.          Vacation. On the Separation Date you will be paid for any unused,
earned vacation days.

13.          Unemployment Compensation. ServiceMaster will not contest your
eligibility for unemployment compensation following the effective date of your
termination of employment.

14.          Termination of Employment Prior to the Separation Date. If your
employment is terminated by ServiceMaster without Cause prior to the earlier to
occur of (i) your Separation Date and (ii) a Change in Control, ServiceMaster
agrees, conditioned upon you signing a second release agreement in substantially
the same form as Exhibit A, (1) to pay you, within fifteen (15) days after the
effective date of your termination of employment, by lump sum payment and in
lieu of any payments under Sections 2 and 3, a gross amount equal to the sum of
the amounts determined under Sections 2(a), 2(b), and 3, less applicable payroll
withholdings and other deductions; (2) to pay you, by lump sum payment made by
March 15, 2007 (to the extent unpaid and in lieu of any payment for 2006 ABP and
2006 CPP under Section 9), 100% of the amount earned, if any, under the 2006 ABP
or 2006 CPP, or both, less applicable withholdings and other deductions; (3) to
pay you, by lump sum payment made by March 15, 2008 (in lieu of any payment for
2007 ABP and 2007 CPP under Section 9) the amount earned, if any, under the 2007
ABP or 2007 CPP, or both, multiplied by a fraction, the numerator of which is
the number of days from and including January 1, 2007 through and including the
Separation Date, and the denominator of which is 365; (4) to provide the
outplacement services pursuant to Section 4; (5) to make the ServiceMaster
matching contribution pursuant to Sections 6 and 7; (6) to pay you for any
unused, earned vacation days as of the effective date of your termination of
employment; and (7) not to contest your eligibility for unemployment
compensation following the effective date of your termination of employment. If
your employment is terminated prior to the Separation Date for any reason other
than by ServiceMaster without Cause, you will forfeit all rights to (1) any
payment under Sections 2, 3 and 9; (2) outplacement services under Section 4;
and (3) any ServiceMaster matching contribution to be made pursuant to Sections
6 and 7 after the effective date of your termination of employment. As used in
this Agreement, Cause is defined in Exhibit C. You agree that the termination of
your employment for any reason will not affect your obligations and agreements
under Sections 1, 16, 17 and Sections 19 through 30. Payments by ServiceMaster
pursuant to this Section 14 shall be in lieu of any payments pursuant to the
Change in Control Agreement, as defined in Section 2(d).

 

15.

Certain Additional Payments.

(a)          Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution (including of
stock, options, stock appreciation rights, phantom stock, stock units, or other
rights to acquire stock, the vesting of which is accelerated as a result of a
Change in Control, as defined in Section 2(d)) by ServiceMaster or its
affiliated companies to or for the benefit of you (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 15) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
or any interest or penalties are incurred by you with respect to such excise tax
(such

 

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excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then you shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by you of all taxes (including any interest or penalties imposed
with respect to such taxes), including, without limitation, any income taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

(b)          Subject to the provisions of Section 15(c), all determinations
required to be made under this Section 15, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by a nationally
recognized public accounting or law firm (the “Firm”) which shall provide
detailed supporting calculations both to ServiceMaster and you within fifteen
(15) business days of the receipt of notice from you that there has been a
Payment, or such earlier time as is requested by ServiceMaster. In the event
that the Firm is serving as accountant, auditor or attorney for the individual,
entity or group effecting the Change in Control, you shall appoint another
nationally recognized public accounting or law firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Firm
hereunder). All fees and expenses of the Firm shall be borne solely by
ServiceMaster. Any Gross-Up Payment, as determined pursuant to this Section 15,
shall be paid by ServiceMaster to you within five days of the receipt of the
Firm’s determination. If the Firm determines that no Excise Tax is payable by
you, it shall furnish you with a written opinion that failure to report the
Excise Tax on your applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the Firm
shall be binding upon ServiceMaster and you. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Firm hereunder, it is possible that Gross-Up Payments which will not have
been made by ServiceMaster should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that
ServiceMaster exhausts its remedies pursuant to Section 15(c) and you thereafter
are required to make a payment of any Excise Tax, the Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by ServiceMaster to or for the benefit of you.

(c)          You shall notify ServiceMaster in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
ServiceMaster of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after you are informed in
writing of such claim and shall apprise ServiceMaster of the nature of such
claim and the date on which such claim is requested to be paid (it being
understood that any failure by you to provide such notification shall not affect
your rights hereunder unless and only to the extent that ServiceMaster is
actually prejudiced by such failure). You shall not pay such claim prior to the
expiration of the 30-day period following the date on which you give such notice
to ServiceMaster (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If ServiceMaster notifies you in
writing prior to the expiration of such period that it desires to contest such
claim, you shall:

 

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(1)          give ServiceMaster any information reasonably requested by
ServiceMaster relating to such claim,

(2)          take such action in connection with contesting such claim as
ServiceMaster shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by ServiceMaster,

(3)          cooperate with ServiceMaster in good faith in order effectively to
contest such claim, and

(4)          permit ServiceMaster to participate in any proceedings relating to
such claim;

provided, however, that ServiceMaster shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold you harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section
15(c), ServiceMaster shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct you to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and you agree to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as ServiceMaster shall determine; provided further, that if
ServiceMaster directs you to pay such claim and sue for a refund, ServiceMaster
shall advance the amount of such payment to you on an interest-free basis and
shall indemnify and hold you harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto) imposed
with respect to such advance or with respect to any imputed income with respect
to such advance; and provided further, that any extension of the statute of
limitations relating to payment of taxes for your taxable year with respect to
which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, ServiceMaster’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and you shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing
authority.

(d)          If, after the receipt by you of an amount advanced by ServiceMaster
pursuant to Section 15(c), you become entitled to receive, and receive, any
refund with respect to such claim, you shall (subject to ServiceMaster’s
complying with the requirements of Section 15(c)) promptly pay to ServiceMaster
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by you of an amount
advanced by ServiceMaster pursuant to Section 15(c), a determination is made
that you shall not be entitled to any refund with respect to such claim and
ServiceMaster does not notify you in writing of its intent to contest such
denial of refund prior to the expiration of thirty (30) days

 

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after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

16.          Release. In exchange for the promises in this Agreement, and for
other consideration provided herein, on the day you sign the Agreement, you
agree to waive and release and forever discharge ServiceMaster and its
respective past and present directors, managers, officers, shareholders, agents,
employees, attorneys, servants, parent corporations, subsidiaries, divisions,
limited partnerships, affiliated corporations, and successors and assigns, and
each of them, separately and collectively (“Releasees”), from any and all
existing claims, charges, complaints, liens, demands, causes of action,
obligations, damages and liabilities, known or unknown, suspected or
unsuspected, that you ever had, now have or may hereafter claim to have against
Releasees including, but not limited to, claims and causes of action arising out
of or in any way related to your employment with or separation from
ServiceMaster, to any services performed for ServiceMaster, to any status, term
or condition in such employment, or to any physical or mental harm or distress
from such employment or non-employment or claim to any hire, rehire or future
employment of any kind by ServiceMaster. This includes, but is not limited to,
claims based on express or implied contract, covenants of good faith and fair
dealing, wrongful discharge, claims under federal, state, and local laws,
regulations and ordinances, including but not limited to Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Americans with
Disabilities Act and the Age Discrimination in Employment Act, the Employee
Retirement Income Security Act (“ERISA”), claims for violation of public policy,
tort or common law; and claims for additional compensation or damages or
attorneys’ fees. You understand that this Agreement includes a release of all
known and unknown claims to the date of this Agreement. This Release does not,
however, apply to or waive any rights Employee may have under applicable
worker’s compensation laws. Moreover, nothing in this Agreement will prohibit
you from filing a charge of discrimination with the Equal Employment Opportunity
Commission.

17.          Covenant Not to Sue. You agree that you will not commence, aid, or
maintain any action or other legal proceeding based upon any claim arising out
of or related to the matters released in this Agreement, except for the purpose
of enforcing this Agreement or as required by law.

 

18.

Acknowledgements. You further agree that:

 

•

You have read this Agreement and understand all of its terms;

 

•

You are entering into this Agreement knowingly, voluntarily and with full
knowledge of its significance;

 

•

You have been advised to consult an attorney regarding this Agreement;

 

•

You have received information regarding the class, unit or group of employees
eligible for these severance benefits, any eligibility factors for these
severance benefits and any time limits applicable to these severance

 

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benefits as well as the job titles and ages of all individuals eligible or
selected for the severance benefits, and the ages of all individuals in the same
job classification or organizational unit who are not eligible for or selected
for these severance benefits; that list is set forth in Exhibit D.

 

•

You have been offered forty-five (45) days to consider this Agreement;

 

•

You have seven (7) calendar days to revoke the Agreement after you sign it. If
you want to revoke it, you must deliver a written revocation to Alicia K. Wiggs,
Vice President and Associate General Counsel, Labor & Employment, 860 Ridge Lake
Blvd, Memphis, Tennessee 38120 within seven days after you sign the Agreement.
If you do not revoke it, the Agreement will become effective on the eighth day
after you sign it; and

 

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The promises contained in this Agreement are consideration for your signing this
Agreement and represent payments and benefits that you are not otherwise
entitled to receive from ServiceMaster.

 

19.

Certain Covenants:

(a)          From the date you sign this Agreement until two years after the
Separation Date, you shall not in any manner, directly or indirectly (whether as
owner, stockholder, director, officer, employee, principal, agent, consultant,
independent contractor, partner or otherwise), in North America or any other
geographic area in which ServiceMaster or any subsidiary of ServiceMaster is
then directly or indirectly conducting business, own, manage, operate, control,
participate in, perform services for, or otherwise carry on, a business similar
to or competitive with the business conducted by ServiceMaster or any subsidiary
of ServiceMaster.

(b)          From the date you sign this Agreement until two years after the
Separation Date, you shall not in any manner, directly or indirectly attempt to
induce any employee of ServiceMaster or any subsidiary of ServiceMaster to
terminate his or her employment for any purpose whatsoever or any attempt
directly or indirectly to solicit the trade or business of any current or
prospective customer, supplier or partner of ServiceMaster or any subsidiary of
ServiceMaster.

(c)          You shall not, at any time, make use of or disclose, directly or
indirectly, any (i) trade secret or other confidential or secret information of
ServiceMaster or any subsidiary of ServiceMaster or (ii) other technical,
business, proprietary or financial information of ServiceMaster not available to
the public generally or to the competitors of ServiceMaster or any subsidiary of
ServiceMaster (“Confidential Information”), except to the extent that such
Confidential Information (1) becomes a matter of public record or is published
in a newspaper, magazine or other periodical available to the general public,
other than as a result of any act or omission by you or (2) is required to be
disclosed by any law, regulation or order of any court or regulatory commission,
department or agency. You shall return all Confidential Information in any form
(including, but not limited to, data stored by computer) to ServiceMaster on or
before the Separation Date.

 

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(d)          If, at any time of enforcement of this section, a court or an
arbitrator holds that the restrictions stated in this Agreement are unreasonable
under circumstances then existing, ServiceMaster and you agree that the maximum
period or scope reasonable under such circumstances shall be substituted for the
stated period or scope and that the court or arbitrator shall revise the
restrictions contained in this Agreement to cover the maximum period and scope
permitted by law.

(e)          You acknowledge that any breach of this section will result in
serious and irreparable injury to ServiceMaster for which ServiceMaster cannot
be adequately compensated by monetary damages alone. You agree, therefore, that,
in addition to any other remedy ServiceMaster may have, ServiceMaster will be
entitled to seek both preliminary and permanent injunctive relief (to the extent
permitted by law) without the necessity of proving actual damages and/or the
posting of a bond.

20.          Return of ServiceMaster Property. You agree to return to
ServiceMaster all ServiceMaster property, equipment and materials prior to the
Separation Date, including, but not limited to, the following materials provided
to you in the course of your employment with ServiceMaster: any ServiceMaster
automobile; any laptop computer and peripherals; any cell phone; any telephone
calling cards; keys; ServiceMaster identification card; any credit cards; and
all written or graphic materials (and all copies) relating in any way to
ServiceMaster’s business, including documents, manuals, computer files,
diskettes, customer lists and reports.

21.          Transition. You agree that you will assist ServiceMaster, as
requested, in the professional transition of work in progress, duties, files and
pertinent information to appropriate ServiceMaster personnel up to the
Separation Date.

22.          Assistance. You agree that, subject to reimbursement by
ServiceMaster of reasonable costs and expenses, you will cooperate fully with
ServiceMaster and its counsel with respect to any matter (including, but not
limited to litigation, investigation or government proceeding) which relates to
matters with which you were involved during your employment with ServiceMaster.
You further agree to notify ServiceMaster’s General Counsel immediately upon
your being asked to assist or supply information to any person or entity
regarding any civil claim or possible claim against any member of ServiceMaster,
and also to give such notice in the event you do in fact assist or supply
information to any such person or entity.

23.          Non-Disparagement. You agree that in accordance with ethical and
professional standards, you will refrain from taking actions or making
statements, written or oral, which disparage or defame the goodwill or
reputation of ServiceMaster, its directors, officers, executives, shareholders,
subsidiaries, parent companies, and employees or statements which could
adversely affect the morale of other employees. If it is determined that you
have violated the promises made in this provision, ServiceMaster shall be
entitled to recover from you all monetary amounts or benefits paid to you
pursuant to this Agreement.

24.          Assignment. You agree that the rights and benefits provided to you
under this Agreement are personal to you and no such right or benefit will be
subject to alienation,

 

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assignment or transfer except as required by law; provided, however, that
nothing in this section will preclude you from designating a beneficiary or
beneficiaries to receive any benefit payable on your death.

25.          No Admission. You and ServiceMaster acknowledge that this Agreement
does not constitute an admission by ServiceMaster of any liability or wrongdoing
whatsoever.

26.          Entire Agreement. You and ServiceMaster agree that this Agreement
and the Exhibits, together with the Change in Control Agreement, as defined in
Section 2(d), constitute the complete understanding between you and
ServiceMaster regarding the matters herein and that no other promises or
agreements regarding the matters herein, express or implied, will be binding
between you and ServiceMaster unless signed in writing by you and ServiceMaster.
This Agreement fully supersedes and replaces any and all prior agreements or
understandings, if any, between you and ServiceMaster on any matter that is
addressed in this Agreement, except for the Change in Control Agreement, as
defined in Section 2(d). This Agreement may not be amended except in writing
signed by you and the Senior Vice President, Human Resources of ServiceMaster.

27.          Severability. You and ServiceMaster agree that to the extent that
any portion of this Agreement may be held to be invalid or legally
unenforceable, the remaining portions will not be affected and will be given
full force and effect.

28.          Arbitration. Any dispute or controversy between you and
ServiceMaster, whether arising out of or relating to this Agreement, the breach
of this Agreement, or otherwise, shall be settled by arbitration in Memphis,
Tennessee, administered by the American Arbitration Association, with any such
dispute or controversy arising under this Agreement being so administered in
accordance with its National Rules for the Resolution of Employment Disputes
then in effect, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall have the
authority to award any remedy or relief that a court of competent jurisdiction
could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this
arbitration provision, apply to any court having jurisdiction over such dispute
or controversy and seek interim provisional, injunctive or other equitable
relief until the arbitration award is rendered or the controversy is otherwise
resolved. Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, or to obtain interim relief, neither a
party nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of both parties. You and
ServiceMaster acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.

29.          No Waiver. The failure to enforce at any time any of the provisions
of this Agreement, or to require at any time performance by the other party of
any of the provisions hereof, will in no way be construed to be a waiver of such
provisions or to affect either the

 

11

 

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validity of this Agreement or any part hereof or the right of either party
thereafter to enforce each and every provision in accordance with the terms of
this Agreement.

30.          Notices. All notices required hereunder will be in writing and will
be deemed given upon receipt if delivered personally (receipt of which is
confirmed), or by courier service promising overnight delivery (with delivery
confirmed the next day), or three (3) business days after deposit in the U.S.
Mail, certified with return receipt requested. All notices will be addressed as
follows:

If to you:

If to ServiceMaster:

 

 

Mitchell T. Engel

The ServiceMaster Company

525 Circle Lane

860 Ridge Lake Blvd.

Lake Forest, IL 60045

Memphis, TN 38120

 

Attention: Senior Vice President,

 

Human Resources

31.          Governing Law; Validity. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Illinois without regard to the
principle of conflicts of laws. The invalidity or enforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any of the other provisions of this Agreement, which other provisions shall
remain in full force and effect.

   SIGNED:

/S/ Mitchell T. Engel                                        

 

/S/ Lisa Goettel                                               

Mitchell T. Engel

 

Lisa Goettel

 

 

Senior Vice President, Human Resources,

 

 

The ServiceMaster Company

 

 

 

Dated:              February 26, 2007                    

 

Dated:              February 9, 2007                    

 

 

12

 

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Exhibit A

CONFIDENTIAL GENERAL RELEASE

A.           In exchange for the payment described in Section 3 of the
Confidential Separation Agreement and General Release between you and The
ServiceMaster Company, on behalf of itself, its divisions, subsidiaries,
affiliates, related companies, predecessors, successors, assigns, and their
officers, directors, employees, insurers, stockholders, and agents (collectively
referred to as “ServiceMaster”) dated _________________________, you agree to
waive and release and forever discharge ServiceMaster and its respective past
and present directors, managers, officers, shareholders, partners, agents,
employees, attorneys, servants, parent corporations, subsidiaries, divisions,
limited partnerships, affiliated corporations, and successors and assigns, and
each of them, separately and collectively (“Releasees”), from any and all
existing claims, charges, complaints, liens, demands, causes of action,
obligations, damages and liabilities, known or unknown, suspected or
unsuspected, that you ever had, now have or may hereafter claim to have against
Releasees including, but not limited to, claims and causes of action arising out
of or in any way related to (i) your employment with ServiceMaster for the
period beginning on or after the Effective Date of the Confidential Separation
Agreement and General Release and your last day of employment with
ServiceMaster, (ii) your separation from ServiceMaster or (iii) to any services
performed for ServiceMaster, to any status, term or condition in such
employment, or to any physical or mental harm or distress from such employment
or non-employment or claim to any hire, rehire or future employment of any kind
by ServiceMaster. This includes, but is not limited to, claims based on express
or implied contract, covenants of good faith and fair dealing, wrongful
discharge, claims under federal, state, and local laws, regulations and
ordinances, including but not limited to Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Americans with Disabilities Act and the
Age Discrimination in Employment Act, the Employee Retirement Income Security
Act (“ERISA”), claims for violation of public policy, tort or common law; and
claims for additional compensation or damages or attorneys’ fees. You understand
that this Agreement includes a release of all known and unknown claims to the
date of this Agreement. This Release does not, however, apply to or waive any
rights Employee may have under applicable worker’s compensation laws. Moreover,
nothing in this Agreement will prohibit you from filing a charge of
discrimination with the Equal Employment Opportunity Commission or an equivalent
state civil rights agency.

 

B.

You further agree that:

 

•

You have read this Agreement and understand all of its terms;

 

•

You are entering into this Agreement knowingly, voluntarily and with full
knowledge of its significance;

 

•

You have been advised to consult an attorney regarding this Agreement;

 

A-1

 

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•

You have received information regarding the class, unit or group of employees
eligible for this retention bonus benefit, any eligibility factors for this
retention bonus benefit and any time limits applicable to this retention bonus
benefit as well as the job titles and ages of all individuals eligible or
selected for the retention bonus benefit, and the ages of all individuals in the
same job classification or organizational unit who are not eligible for or
selected for this retention bonus benefit; that list is set forth in Exhibit D;

 

•

You have been offered forty-five (45) days to consider this Agreement;

 

•

You have seven (7) calendar days to revoke the Agreement after you sign it. If
you want to revoke it, you must deliver a written revocation to Alicia K. Wiggs,
Vice President and Associate General Counsel, Labor & Employment, 860 Ridge Lake
Blvd, Memphis, Tennessee 38120 within seven days after you sign the Agreement.
If you do not revoke it, the Agreement will become effective on the eighth day
after you sign it; and

 

•

The payment referenced in Section 3 of the Confidential Separation Agreement and
General Release is consideration for your signing this Agreement and represents
a payment that you are not otherwise entitled to receive from ServiceMaster.

C.           No Admission. You and ServiceMaster acknowledge that this Agreement
does not constitute an admission by ServiceMaster of any liability or wrongdoing
whatsoever.

D.           Entire Agreement. You and ServiceMaster agree that this Agreement
and the Exhibits, together with the Change in Control Agreement, as defined in
Section 2(d), constitute the complete understanding between you and
ServiceMaster regarding the matters herein and that no other promises or
agreements regarding the matters herein, express or implied, will be binding
between you and ServiceMaster unless signed in writing by you and ServiceMaster.
This Agreement fully supersedes and replaces any and all prior agreements or
understandings, if any, between you and ServiceMaster on any matter that is
addressed in this Agreement, except for the Change in Control Agreement, as
defined in Section 2(d). This Agreement may not be amended except in writing
signed by you and the Senior Vice President, Human Resources of ServiceMaster.

E.           Assignment. You agree that the rights and benefits provided to you
under this Agreement are personal to you and no such right or benefit will be
subject to alienation, assignment or transfer except as required by law;
provided, however, that nothing in this Section will preclude you from
designating a beneficiary or beneficiaries to receive any benefit payable on
your death.

 

A-2

 

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F.            Severability. You and ServiceMaster agree that to the extent that
any portion of this Agreement may be held to be invalid or legally
unenforceable, the remaining portions will not be affected and will be given
full force and effect.

G.           Arbitration. Any dispute or controversy between you and
ServiceMaster, whether arising out of or relating to this Agreement, the breach
of this Agreement, or otherwise, shall be settled by arbitration in Memphis,
Tennessee, administered by the American Arbitration Association, with any such
dispute or controversy arising under this Agreement being so administered in
accordance with its National Rules for the Resolution of Employment Disputes
then in effect, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall have the
authority to award any remedy or relief that a court of competent jurisdiction
could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this
arbitration provision, apply to any court having jurisdiction over such dispute
or controversy and seek interim provisional, injunctive or other equitable
relief until the arbitration award is rendered or the controversy is otherwise
resolved. Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, or to obtain interim relief, neither a
party nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of both parties. You and
ServiceMaster acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.

H.           No Waiver. The failure to enforce at any time any of the provisions
of this Agreement, or to require at any time performance by the other party of
any of the provisions hereof, will in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement or any part hereof
or the right of either party thereafter to enforce each and every provision in
accordance with the terms of this Agreement.

SIGNED:

_______________________________________________________ 

 

_____________________________________________________

Mitchell T. Engel

 

Lisa Goettel

 

 

Senior Vice President, Human Resources,

 

 

The ServiceMaster Company

 

 

 

Dated:__________________________________

 

Dated:_________________________________

 

 

A-3

 

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Exhibit B

From the Effective Date until the Separation Date:

1.)          Employee agrees to perform his or her duties and responsibilities
in a professional manner, including attending work during normal business hours
(except for business travel and other personal matters, such as vacation).

2.)          Employee agrees to transition duties and responsibilities to
appropriate ServiceMaster personnel who will assume such duties and
responsibilities prior to or as of the Separation Date, including, if requested,
assistance in recruiting and training replacement personnel.

3.)          Employee will, if requested, help cover the duties and
responsibilities of those other employees who terminate employment prior to the
Separation Date.

4.)          Employee agrees to complete projects/tasks as reasonably designated
by Employee’s supervisor.

 

B-1

 

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Exhibit C

As used in this Agreement, the following term shall have the meaning set forth
below:

“Cause” means:

(1)          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
demonstrably 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
ServiceMaster and which is not remedied within ten (10) days after receipt of
written notice from your supervisor specifying such breach; or

(2)          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
ServiceMaster or an affiliated company; or

(3)          any failure by you 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.

C-1

 

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Exhibit D

ServiceMaster wants you to have access to a few background facts so that you may
consider whether to sign the attached Separation Agreement and General Release
(“Agreement”). If you sign the Agreement, you will release all your claims
against ServiceMaster, including claims under the Age Discrimination in
Employment Act.

A.

Employees Affected by the Reduction in Force

The job titles and ages of all employees in your department eligible for the
separation and/or retention benefit are:

Job Title

Age

 

 

VP YELLOW PAGES MARKETING

60

ENTERPRISE MARKETING COORD

58

SVP & CMO

55

VP MARKETING ANALYTICS GROUP

48

MGR MARKETING ANALYST

29

B.

Other Employees

The job titles and ages of all employees in your department who are not eligible
for the separation and/or retention benefit are:

Job Title

Age

 

 

None

 

 

 

D-1