Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made as of June 14, 2013, by and
between Robert J. Gillette (“Executive”) and ServiceMaster Global
Holdings, Inc., a Delaware corporation (“ServiceMaster” or the “Company”).

 

WHEREAS, ServiceMaster desires to employ Executive as the Chief Executive
Officer (“CEO”) and President of ServiceMaster and as a member of
ServiceMaster’s Board of Directors (the “Board”), and Executive desires to be
employed by ServiceMaster in such capacities, in each case pursuant to the terms
and conditions of this Agreement.

 

WHEREAS, ServiceMaster and Executive intend hereby to set forth the terms and
conditions upon which Executive shall be employed in such capacities.

 

NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties, subject to the
terms and conditions set forth herein, agree as follows:

 

1.                                      Defined Terms.  Any capitalized terms
which are not defined within this Agreement are defined in Exhibit A hereto
attached.

 

2.                                      Term.  ServiceMaster shall employ
Executive, and Executive agrees to be employed by ServiceMaster, in each case,
subject to the terms and conditions of this Agreement, for the period commencing
on June 17, 2013 (the “Effective Date”) and continuing through and including the
earliest of the effective date of Executive’s termination of employment (“Date
of Termination”), the date of Executive’s death, and the third anniversary of
the Effective Date (the “Term”); provided that the Term shall automatically be
extended by one year effective upon the third anniversary of the Effective Date
and each anniversary thereafter until such date as either the Company or
Executive shall have terminated such automatic extension provision by giving
written notice to the other at least sixty (60) days prior to the end of the
initial Term or any extension thereof.

 

3.                                      Duties; Location of Performance. 
Commencing on the Effective Date, continuing during the Term, and subject to the
powers, authorities and responsibilities vested in the Board and committees of
the Board, Executive shall (a) have the authorities and responsibilities
consistent with his position as the CEO and President of ServiceMaster; (b) 
report directly to the Board; (c) serve as a member of the Board; and (d) serve
as CEO of The ServiceMaster Company, and, at a level commensurate with such
position, as an officer or director of such other of the Company’s subsidiaries
as may be requested by the Board from time to time.  All employees of
ServiceMaster and its subsidiaries shall report to Executive or his designee. 
Subject to any required business

 

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travel on behalf of the Company, Executive’s principal place of business will be
at Service Master’s corporate offices in the greater Memphis, Tennessee
metropolitan area.

 

4.                                      Obligations of ServiceMaster During the
Term.  ServiceMaster shall provide the following to Executive during the Term:

 

(a)                     Salary.  ServiceMaster shall pay Executive a base salary
(“Base Salary”) at an annual rate of at least $1,100,000, payable in accordance
with the payroll practices of The ServiceMaster Company, a Delaware corporation
and the primary operating subsidiary of ServiceMaster.  If Executive’s Base
Salary is increased during the Term, it may not thereafter be decreased without
the written consent of Executive.

 

(b)                     Signing Bonus.  Not later than the first payroll date
following the Effective Date, Executive shall be paid a cash bonus of $1,000,000
(the “Signing Bonus”).  The Signing Bonus shall be subject to repayment as
follows:  (i) if Executive voluntarily terminates his employment without Good
Reason prior to the six-month anniversary of the Effective Date (the “Initial
Period”), Executive shall repay the Signing Bonus to the Company within five
business days following the Date of Termination; and (ii) if Executive
voluntarily terminates his employment without Good Reason following the Initial
Period but prior to the first anniversary of the Effective Date, Executive shall
repay one-half of the Signing Bonus to the Company within five business days
following the Date of Termination.  To the extent permitted by applicable law,
the Company may offset any amounts owed pursuant to this Section 4(b) against
any amounts payable to Executive by the Company or any of its affiliates at the
time that any such repayment is due and owing (other than an amount that is
nonqualified deferred compensation within the meaning of Section 409A of the
Code).  The Signing Bonus shall not be considered an “annual bonus” for purposes
of Section 6 of this Agreement.

 

(c)                      Annual Bonus.

 

(1)         Generally.  Executive shall be eligible to participate in The
ServiceMaster Company’s Annual Bonus Plan (or any successor plan) in respect of
each fiscal year of The ServiceMaster Company on at least the same terms and
conditions as other executive officers of ServiceMaster and The ServiceMaster
Company; provided that Executive’s annual bonus opportunity payable at
achievement of “target” levels shall not less than 100 percent of Base Salary,
it being understood that the actual amount payable and the performance metrics,
weighting, and thresholds applicable to Executive shall be determined in
accordance with The ServiceMaster Company’s Annual Bonus Plan as adopted and
administered by the Compensation Committee of the Board (the “Compensation
Committee”).  Any amount payable pursuant to this Section 4(c)(1) shall be paid
when paid to other executive officers of ServiceMaster and

 

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The ServiceMaster Company, but in no event later than March 15 of the year
following the year in respect of which it was earned.

 

(2)         2013 Performance Year.  Notwithstanding Section 4(c)(1), in no event
shall Executive’s annual bonus for the 2013 performance year be less than
$1,100,000 multiplied by a fraction, the numerator of which is the number of
days from the Effective Date through December 31, 2013 and the denominator of
which is 365.

 

(d)                     Benefits.  Executive shall be entitled to those employee
benefits and perquisites which The ServiceMaster 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.  The Benefits shall
include, without limitation, medical insurance, dental insurance, life
insurance, vision insurance, flexible spending or similar account, four weeks of
paid annual vacation, participation in the ServiceMaster Profit Sharing and
Retirement Plan (“PSRP”), participation in the Company’s deferred compensation
plan and such other benefits, as the Board or Compensation Committee may
determine from time to time.

 

(e)                      Automobile Allowance.  Executive shall be entitled to
an automobile allowance of $15,000 per year, payable in accordance with Company
policy.

 

(f)                       Corporate Aircraft.  The Company will bear the full
cost for up to 50 hours of the Executive’s personal use of the ServiceMaster
aircraft per calendar year, including the cost of landing fees, but excluding
any taxes imputed to the Executive.  Business use of the ServiceMaster aircraft
will take precedence over the Executive’s personal use.

 

(g)                      Reimbursement of Other Expenses; Relocation.  Executive
shall be reimbursed for all proper and reasonable expenses incurred by Executive
in the performance of his duties hereunder in accordance with the policies of
ServiceMaster and The ServiceMaster Company.  Executive shall also qualify for
The ServiceMaster Company’s relocation program and shall be provided with
reimbursement of his relocation expenses, including a tax gross-up for
reimbursed relocation expenses, in accordance with the terms and conditions of
that program.

 

5.                                      Equity-Based Compensation.  Executive
shall be granted the following equity-based compensation:

 

(a)                     Share Purchase.

 

(1)         Initial Investment.  Within sixty (60) days following the Effective
Date, the Company shall sell, and Executive shall purchase, an aggregate amount

 

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of $1,500,000 of shares of the common stock of the Company, par value $.01 per
share (the “Common Stock”) at the then-current fair market value as determined
by the Compensation Committee (the “Fair Market Value”; such initial Fair Market
Value, the “Initial Per Share Price”; and the shares so purchased, the “Initial
Shares”) pursuant to the ServiceMaster Global Holdings, Inc. Stock Incentive
Plan (the “Stock Incentive Plan”).

 

(2)         Subsequent Purchases.  Executive may, in his discretion, elect to
purchase additional shares of Common Stock from the Company at their
then-current Fair Market Value (as most recently determined by the Compensation
Committee) up to an aggregate purchase price of $1,500,000 (collectively, the
“Additional Shares”).  If Executive elects to purchase some or all of the
Additional Shares, the Company shall sell the Additional Shares to Executive. 
The date or dates on which the purchase of the Additional Shares will occur will
be as requested by Executive and approved by the Compensation Committee
consistent with the Company’s customary quarterly procedures for determining
Fair Market Value, except that the closing of any such purchases must occur
prior to December 31, 2014.

 

(3)         Terms and Conditions.  The terms and conditions of Executive’s
purchase of any shares of Common Stock pursuant to this Agreement shall be
evidenced by a separate Employee Stock Subscription Agreement, substantially in
the form attached hereto as Exhibit B, to be entered into between the Company
and Executive (the “Employee Stock Subscription Agreement”), as supplemented by
the terms and conditions of this Agreement.

 

(b)                     Restricted Stock Units.

 

(1)         Initial Investment.  Effective as of the closing of the purchase of
the Initial Shares pursuant to Section 5(a)(1), the Company shall grant
Executive 300,000 restricted stock units under the Stock Incentive Plan (the
“RSUs”).  The RSUs shall vest, subject to Executive’s continued employment with
the Company, in three annual installments at a rate of one-third per year on
each of the first three anniversaries of the Effective Date and as otherwise
provided in the RSU Agreement (as defined below).

 

(2)         Terms and Conditions. The terms and conditions of the RSUs
(including, but not limited to, the vesting conditions) shall be set forth in a
separate Employee Restricted Stock Unit Agreement substantially in the form
attached hereto as Exhibit C, to be entered into between the Company and
Executive (the “RSU Agreement”) and will be subject to the terms and provisions
of the Stock Incentive Plan and Employee Stock Subscription Agreement.

 

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(c)                      Matching Stock Options.

 

(1)         Initial Investment. Effective as of (and conditioned on) the closing
of the purchase of the Initial Shares pursuant to Section 5(a)(1), the Company
shall grant Executive non-qualified stock options under the Stock Incentive Plan
to purchase the number of shares of Common Stock equal to five and one-half
times the number of Initial Shares so purchased (the “Initial Matching
Options”).  The Initial Matching Options will vest, subject to Executive’s
continued employment with the Company, in four annual installments at a rate of
one-fourth per year on each of the first four anniversaries of the Effective
Date and as otherwise provided in the Employee Stock Option Agreement (as
defined below).  The exercise price per share of Common Stock covered by the
Initial Matching Options shall be equal to the Initial Per Share Price.

 

(2)         Subsequent Purchases.  Effective as of the closings of the purchase
of any Additional Shares pursuant to Section 5(a)(2), the Company shall grant to
Executive non-qualified stock options under the Stock Incentive Plan to purchase
the number of shares of Common Stock equal to five and one-half times the number
of Additional Shares so purchased (the “Additional Matching Options,” and along
with the Initial Matching Options, the “Matching Options”).  The Additional
Matching Options shall vest, subject to Executive’s continued employment with
the Company, in four annual installments at a rate of one-fourth per year on
each of the first four anniversaries of the purchase date of the related
Additional Shares and as otherwise provided in the Employee Stock Option
Agreement (as defined below).  The exercise price per share of Common Stock
covered by the Additional Matching Options shall be equal to the purchase price
per share of each such Additional Share.

 

(d)                     Employee Stock Option Agreement; Plans.  The terms and
conditions of the Matching Options will be evidenced by a separate Employee
Stock Option Agreement, substantially in the form attached hereto as Exhibit D,
to be entered into between Executive and the Company at the time that such
Options are granted (the “Employee Stock Option Agreement” and, together with
the Employee Stock Subscription Agreement and RSU Agreement, the “Management
Equity Agreements”) and will be subject to the terms and provisions of the Stock
Incentive Plan and Employee Stock Subscription Agreement.

 

6.                                      Severance Benefits.

 

(a)                                 In the event that Executive’s employment
hereunder is terminated during the period beginning on and including the
Effective Date and ending on or prior to the expiration of the Term by
ServiceMaster without Cause or by Executive for Good Reason, then ServiceMaster,
subject to Section 6(i), shall pay to Executive, as compensation for services
rendered to ServiceMaster and its affiliated companies:

 

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(1)         Executive’s Base Salary earned through the Date of Termination, to
the extent not previously paid (but after giving effect to any amounts that
would be deferred pursuant to the ServiceMaster deferred compensation plan);
plus

 

(2)         (i) Executive’s annual bonus earned with respect to the fiscal year
immediately prior to the fiscal year in which the Date of Termination occurs, to
the extent not previously paid (but after giving effect to any amounts that
would be deferred pursuant to the ServiceMaster deferred compensation plan),
plus (ii) the bonus that Executive would have been paid in respect of the fiscal
year in which the Date of Termination occurs had his employment not terminated, 
pro rated for the portion of the fiscal year during which Executive was employed
elapsed through the Date of Termination (the “Pro Rata Bonus”); plus

 

(3)         continued payment of his monthly Base Salary, at the rate in effect
immediately prior to the Date of Termination, for 24 months following the Date
of Termination; plus

 

(4)         two times Executive’s average annual bonus paid or payable to
Executive with respect to the two fiscal years immediately preceding the Date of
Termination (provided that (i) if fewer than two annual bonus cycles have
elapsed prior to the Date of Termination, then, as to any bonus cycle that has
not elapsed, such average shall be calculated by using the target annual bonus
for such year or years, and (ii) if the averaging period includes the 2013
fiscal year, and the bonus paid or payable to the Executive for such year has
been pro rated due to Executive’s service for less than the full fiscal year,
such proration shall be disregarded for purposes of this Section 6(a)(4)); plus

 

(5)         reimbursement of Executive’s expenses pursuant to Section 4(g).

 

(b)                                 In the event that Executive’s employment
hereunder is terminated during the period beginning on and including the
Effective Date and ending on or prior to the expiration of the Term by
ServiceMaster for Cause or by Executive for any reason other than Good Reason,
including by reason of retirement, death or disability, then ServiceMaster shall
pay to Executive (or Executive’s executors, legal representatives or
administrators in the event of Executive’s death), as compensation for services
rendered to ServiceMaster and its affiliated companies:

 

(1)         Executive’s Base Salary earned through the Date of Termination or
date of death, to the extent not previously paid (but after giving effect to any
amounts that would be deferred pursuant to the ServiceMaster deferred
compensation plan); plus

 

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(2)         in the event Executive’s employment is terminated by reason of
death, disability or retirement, (i) Executive’s annual bonus earned with
respect to the fiscal year immediately prior to the fiscal year in which the
Date of Termination occurs, to the extent not previously paid (but after giving
effect to any amounts that would be deferred pursuant to the ServiceMaster
deferred compensation plan), plus (ii) a Pro Rata Bonus; plus

 

(3)         reimbursement of Executive’s expenses pursuant to Section 4(g).

 

(c)                                  Payment.  Subject to Section 14, (i) any
amount payable pursuant to Section 6(a)(1) or 6(b)(1) above shall be paid in
accordance with the payroll practices of The ServiceMaster Company; (ii) any
amount payable pursuant to Section 6(a)(2) or 6(b)(2) shall be paid when annual
bonuses for the applicable fiscal years are paid to other executive officers of
The ServiceMaster Company, but in no event later than March 15 of the year
following the year in respect of which such bonuses were earned; and (iii) any
amount payable pursuant to Section 6(a)(3) or 6(a)(4) shall be paid in equal
monthly installments during the two-year period following the Date of
Termination, except that all installments that would have been paid during the
first 45 days following the Date of Termination shall be paid on the 45th day
following the Date of Termination.  In addition, if on the Date of Termination
Executive is a “specified employee,” as defined in Treasury Regulation
Section 1.409A-1(i) and determined using the identification methodology selected
by the Company from time to time, or if none, the default methodology, any or
all amounts payable under this Agreement on account of such termination of
employment that would (but for this provision) be payable within six months
following the Date of Termination, shall instead be paid in a lump sum on the
first day of the seventh month following the Date of Termination or, if earlier,
upon Executive’s death, except (i) to the extent of amounts that do not
constitute a “deferral of compensation” within the meaning of Treasury
Regulation Section 1.409A-1(b) (including without limitation by reason of the
safe harbor set forth in Treasury Regulation Section 1.409A-1(b)(9)(iii), as
determined by the Company in its reasonable good faith discretion);
(ii) benefits which qualify as excepted welfare benefits pursuant to Treasury
Regulation Section 1.409A 1(a)(5); and (iii) other amounts or benefits that are
not subject to the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).

 

(d)                                 Continuation of Benefits.  In the event
Executive is entitled to the severance benefits under Section 6(a), then (i) for
18 months following the Date of Termination, subject to Executive’s enrollment
for COBRA continuation coverage and payment of the applicable monthly COBRA
premium amounts (the “Monthly COBRA Premium Amount”), the Company will cause a
monthly reimbursement to be made to Executive such that, after payment of
applicable taxes, Executive retains an amount of such reimbursement equal to the
employer contribution for active employees for the COBRA coverage so elected as
in effect immediately prior to the Date of Termination;

 

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and (ii) if by the end of such 18-month period Executive and his covered
dependents have not become covered by a plan of a subsequent employer offering
the same type of benefits, then, for the shorter of (A) six months and (B) the
end of the month in which Executive obtains such coverage from a subsequent
employer, the Company will cause Executive to be paid a monthly amount such
that, after payment of applicable taxes, Executive retains an amount of such
payment equal to 100% of the Monthly COBRA Premium Amount.  In addition, in the
event Executive is entitled to the severance benefits under Section 6(a), then
for 24 months following the Date of Termination Executive shall continue to be
eligible for Company-provided life insurance upon the same terms and otherwise
to the same extent as such coverage is offered to the executive officers of
ServiceMaster and The ServiceMaster Company, and The ServiceMaster Company and
Executive shall share the costs of the continuation of such insurance coverage
in the same proportion as such costs are shared by the ServiceMaster Company and
its executive officers.

 

(e)                                  Exclusive Severance.  Any amount paid
pursuant to Section 6(a) or 6(b) shall be paid in lieu of any other amount of
severance relating to salary or bonus continuation to be received by Executive
upon termination of employment of Executive under any severance plan, policy or
arrangement of ServiceMaster or its affiliated companies.  Notwithstanding the
foregoing, in the event that Executive’s employment hereunder is terminated
hereunder for any reason, Executive shall be entitled to continuation of
Benefits subject to the terms and conditions of such benefit plans or programs
for terminated employees.

 

(f)                                   Equity-Based Compensation.  Each share of
Common Stock and all RSUs and Options held by Executive on the Date of
Termination or date of death shall be subject to the terms and conditions of the
applicable Management Equity Agreement and the Stock Incentive Plan, including,
without limitation, the restriction periods, vesting and forfeiture schedules,
and termination provisions.

 

(g)                                  PSRP.  Executive’s participation, if any,
in the PSRP shall end as of the Date of Termination or date of death, if
applicable.

 

(h)                                 Deferred Compensation Plan.  Executive’s
participation, if any, in the ServiceMaster deferred compensation plan shall end
as the Date of Termination or date of death, if applicable.  Any compensation
previously deferred by Executive (together with any interest and earnings
thereon) under the deferred compensation plan or any successor plan shall be
paid or distributed in accordance with the terms of the plan and Executive’s
elections under the plan.

 

(i)                                     Release.  Notwithstanding anything to
the contrary in this Section 6, in the event the Company is obligated to make
payments pursuant to Sections 6(a)(3), 6(a)(4), and 6(d), it shall be a
condition to such payments that, within thirty (30) days following the Date of
Termination, Executive enter into a general release of claims, containing the

 

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provisions attached hereto as Exhibit E and such other provisions as the parties
may mutually agree, waiving any and all claims against the Company, its
subsidiaries, their affiliates and their respective officers, directors,
employees, agents, representatives, stockholders, members and partners relating
to this Agreement and to his employment during the term hereof.

 

(j)                                    Notice of Termination.  Each party shall
provide the other party with thirty (30) days’ advance written notice of its
intention to terminate Executive’s employment for any reason, other than a
termination by the Company for Cause or termination by Executive with Good
Reason (each of which shall be subject to the time periods set forth in
Exhibit A).

 

(k)                                 Effect of Non-Renewal of the Term by the
Company.  Notice of nonrenewal by the Company shall be deemed a termination
without Cause at the end of the Term.

 

7.                                      Covenants.

 

(a)                                 Non-Competition, Non-Solicitation and
Confidentiality.  From and after the Effective Date and through and including
the date that is two years after the Date of Termination, Executive shall not do
any of the following, directly or indirectly, without the prior written consent
of the Board:

 

(1)         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 conducting business,
own, manage, operate, control, participate in, perform services for, or
otherwise carry on, a business similar to or competitive with a business
conducted by ServiceMaster or any subsidiary of ServiceMaster (a “Competitive
Enterprise”), provided that the foregoing shall not prohibit (x) Executive’s
passive ownership of less than 1% of any class of voting securities of a
publicly held company which would otherwise be prohibited under this
Section 7(a)(1) or (y) Executive’s providing services to either (A) a separate
division or operating unit of a multi-divisional Competitive Enterprise if such
division or operating unit is not competitive with the business conducted by
ServiceMaster or any subsidiary of ServiceMaster or (B) a Competitive Enterprise
where the revenues derived from the divisions or operating units that, if
standing alone, would be a Competitive Enterprise (I) account in the aggregate
for less than 20% of the aggregate consolidated revenue of the entire
Competitive Enterprise (or, if applicable, the portion of the Competitive
Enterprise for which Executive is responsible (including, for the avoidance of
doubt, subsidiary entities)) and (II) on a business unit by business unit basis
are 35% or less than the revenue of the corresponding business unit of
ServiceMaster (except that, for purpose of the clause (II), any

 

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ServiceMaster business unit that accounts for 10% or less of the aggregate
consolidated revenue of ServiceMaster shall be disregarded), in the case of each
of (I) and (II) for the fiscal year prior to Executive’s commencement of
employment therewith; or

 

(2)         directly or indirectly attempt to induce any employee of
ServiceMaster or any subsidiary of ServiceMaster to terminate his or her
employment with ServiceMaster or any subsidiary of ServiceMaster for any purpose
whatsoever, or attempt directly or indirectly, in connection with any business
to which Section 7(a)(1) applies, to solicit the trade or business of any
current or prospective customer, supplier or partner of ServiceMaster or any
subsidiary of ServiceMaster; provided, that this Section 7(a)(2) shall not be
violated by (i) general advertising or solicitation not specifically targeted at
ServiceMaster related persons or entities or (ii) Executive serving as a
reference, upon request.

 

(b)                                 The Executive agrees that, during the
Executive’s employment with the Company and its subsidiaries and thereafter,
other than in the good faith performance of his duties to the Company and its
subsidiaries, the Executive will not disclose confidential or proprietary
information, or trade secrets, related to any business of the Company or its
subsidiaries, including without limitation, and whether or not such information
is specifically designated as confidential or proprietary: all business plans
and marketing strategies; information concerning existing and prospective
markets, suppliers and customers; financial information; information concerning
the development of new products and services; and technical and non-technical
data related to software programs, design, specifications, compilations,
inventions, improvements, patent applications, studies, research, methods,
devices, prototypes, processes, procedures and techniques.  Notwithstanding the
foregoing, Executive may disclose confidential information to the extent
required by law, regulation or order of a regulatory body, in each case so long
as the Executive gives the Company written notice of the disclosure as soon as
practicable under the circumstances to enable the Company to seek a protective
order, confidential treatment or other appropriate relief (except that notice to
the Company need not be given during any period that such disclosure is
prohibited by applicable law).  The Executive’s obligations under this
Section are indefinite in term.

 

(c)                                  Litigation and Regulatory Cooperation. 
During and after Executive’s employment, Executive shall reasonably cooperate
with ServiceMaster in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of
ServiceMaster or its affiliates that relate to events or occurrences that
transpired while Executive was employed by ServiceMaster.  Executive’s
reasonable cooperation in connection with such claims or actions shall include,
but not be limited to, being reasonably available to meet with counsel to
prepare for discovery or trial and to act as a witness on behalf of
ServiceMaster at mutually

 

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convenient times.  During and after Executive’s employment, Executive also shall
reasonably cooperate with ServiceMaster or its affiliates in connection with any
investigation or review of any Federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while Executive was employed by ServiceMaster.  ServiceMaster shall
reimburse Executive for any reasonable out-of-pocket expenses incurred in
connection with Executive’s performance of obligations pursuant to this
Section 7(b).

 

8.                                      Reimbursement of Executive Expenses. 
The Company shall reimburse the Executive for reasonable legal fees incurred
related to this Agreement.  Such reimbursement shall be made within thirty (30)
days after the Executive provides an invoice for such services to the Company
(which invoice shall be provided within sixty days following the Effective
Date), but in any event no later than March 15 of the year following the year in
which the fees are incurred.

 

9.                                      Indemnification.  During the Term and
thereafter, the Company shall indemnify the Executive with respect to his
services to the Company and its subsidiaries as an officer and director,
including as a fiduciary of Company benefit plans, at levels not less than as
provided in Article VI of the Bylaws of the Company in effect on the Effective
Date.  In addition, (i) the Executive shall both during the Term and thereafter
be covered by directors and officers liability insurance to the same extent that
such coverage is then maintained for officers or directors of the Company in
active service, and (ii) any “tail” policy providing directors and officers
liability coverage that covers a period of service in which Executive is or was
in active service shall cover Executive’s Service.

 

10.                               Successors and Assigns.  This Agreement shall
inure to the benefit of and be enforceable by ServiceMaster and its successors
and assigns and by Executive and Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  This Agreement shall not be terminated by any merger or consolidation
of ServiceMaster whereby ServiceMaster is or is not the surviving or resulting
corporation or as a result of any transfer of all or substantially all of the
assets of ServiceMaster.  In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.

 

11.                               Notice.  All notices and other communications
required or permitted under this Agreement (including the notice required by the
definition of Good Reason as set forth in Exhibit A) shall be in writing, shall
be given by personal delivery, overnight delivery by an established courier
service, or by certified mail, return receipt required, and shall be deemed to
have been duly given when delivered, addressed (a) if to Executive, at his
address in the records of the Company, and if to ServiceMaster, to ServiceMaster
Global Holdings, Inc., c/o The ServiceMaster Company, 860 Ridge Lake Blvd.,
Memphis, TN 38120, attention Senior Vice President, Human Resources, or (b) to

 

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such other address as either party may have furnished to the other in writing in
accordance herewith.

 

12.                               Entire Agreement; Amendments.  Except as
otherwise specified herein, this Agreement and the Exhibits constitute the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related in any manner to the subject matter hereof.

 

13.                               Modification or Waiver.  No provision of this
Agreement may be modified or waived unless such modification or waiver is agreed
to in writing and signed by Executive and a member of the Board.  No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  Failure by Executive
or ServiceMaster to insist upon strict compliance with any provision of this
Agreement or to assert any right which Executive or ServiceMaster may have
hereunder shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.

 

14.                               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
Delaware 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.

 

15.                               Withholding.  Any payments provided for herein
shall be reduced by any amounts required to be withheld by the Company from time
to time under applicable Federal, state or local income or employment tax laws
or similar statutes or other provisions of law then in effect.

 

16.                               Payments by Subsidiaries.  Executive
acknowledges that one or more payments hereunder may be paid by one or more of
the Company’s subsidiaries, and Executive agrees that any such payment made by
such subsidiary shall satisfy the obligations of the Company hereunder with
respect to (but only to the extent of) such payment.

 

17.                               Section 409A.  To the extent that any
reimbursement, fringe benefit, or other similar plan or arrangement in which
Executive participates during the term of the Executive’s employment under this
Agreement or thereafter provides for a “deferral of compensation” within the
meaning of Section 409A of the Code, (i) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another benefit;
(ii) the amount eligible for reimbursement or payment under such plan or

 

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arrangement in one calendar year may not affect the amount eligible for
reimbursement or payment in any other calendar year (except that a plan
providing medical or health benefits may impose a generally applicable limit on
the amount that may be reimbursed or paid); (iii) subject to any shorter time
periods provided in any expense reimbursement policy of the Company, any
reimbursement or payment of an expense under such plan or arrangement must be
made on or before the last day of the calendar year following the calendar year
in which the expense was incurred; and (iv) the reimbursements shall be made
pursuant to objectively determinable and nondiscretionary Company policies and
procedures regarding such reimbursement of expenses.  In addition, with respect
to any payments or benefits subject to Section 409A, reference to Executive’s
“Date of Termination” (and corollary terms) with the Company shall be construed
to refer to Executive’s “separation from service” (as determined under Treas.
Reg. Section 1.409A-1(h), as uniformly applied by the Company) with the
Company.  Whenever a provision under this Agreement specifies a payment period
with reference to a number of days, the actual date of payment within the
specified period shall be within the sole discretion of the Company. 
Executive’s right to receive any installment payments hereunder shall, for
purposes of Section 409A, be treated as a right to receive a series of separate
and distinct payments.  Any tax gross-up payment provided for under this
Agreement shall in no event be paid to Executive later than the December 31 of
the calendar year following the calendar year in which such taxes are remitted
by the Executive.

 

18.                               Counterparts.  This Agreement may be executed
in counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the
day and year first written above.

 

 

 

SERVICEMASTER GLOBAL HOLDINGS, INC.

 

 

 

By:

/s/ John Krenicki, Jr.

 

 

Name: John Krenicki, Jr.

 

 

Title: Interim Chief Executive Officer

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Robert J. Gillette

 

Robert J. Gillette

 

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Exhibit A

 

As used in this Agreement, the following terms shall have the respective
meanings set forth below:

 

(a)                                 “Cause” means:

 

(1)                                 a material breach by Executive of his duties
and responsibilities (other than as a result of incapacity due to physical or
mental illness) which is demonstrably willful and deliberate on Executive’s
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 thirty (30) days after receipt of written notice from ServiceMaster
specifying such breach; or

 

(2)                                 the Executive’s indictment for, conviction
of or pleading guilty or nolo contendere to a felony or misdemeanor involving
any act of fraud, embezzlement, or dishonesty, or any other intentional
misconduct by Executive that adversely and significantly affects the business
affairs or reputation of ServiceMaster or an affiliated company; or

 

(3)                                 any failure by Executive to reasonably
cooperate with any investigation or inquiry into Executive’s business practices,
whether internal or external, including, but not limited to Executive’s refusal
to be deposed or to provide testimony at any trial or inquiry.

 

Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause unless he has: (i) had ten (10) days’ written notice
setting forth the reasons for ServiceMaster’s intention to terminate for Cause;
(ii) had an opportunity to be heard before the Board; and (iii) received a
notice of termination from the Board stating that in the opinion of a majority
of the full Board (excluding Executive) that Executive is responsible for
conduct of a type set forth above and specifying in reasonable detail the
particulars thereof.

 

(b)                                 “Change in Control” shall have the meaning
set forth in the Stock Incentive Plan; provided that in the event such
definition shall be modified or revised in the Stock Incentive Plan, then the
definition of Change in Control for purposes of this Agreement shall be so
modified or revised.

 

(c)                                  “Good Reason” means, without Executive’s
written consent, the occurrence of any of the following events:

 

(1)                                 any of (i) the reduction in any material
respect in Executive’s position(s), authorities or responsibilities with
ServiceMaster,

 

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(ii) Executive no longer reporting directly to the Board or (iii) any failure to
re-elect Executive to serve as CEO of ServiceMaster; provided, however, that
Good Reason shall not occur if the Board elects a non-executive Chairman, so
long as Executive remains a member of the Board and continues to report directly
to the Board;

 

(2)                                 a material reduction in Executive’s Base
Salary or target annual bonus, each as in effect on the Effective Date or as the
same may be increased from time to time thereafter;

 

(3)                                 the failure of ServiceMaster to provide
Executive with four weeks annual paid vacation;

 

(4)                                 a material change in the location of
Executive’s location of work which will be at least more than 50 miles from
ServiceMaster’s corporate offices as of the Effective Date; or

 

(5)                                 any action or inaction by ServiceMaster that
constitutes a material breach of the terms of this Agreement.

 

If Executive determines that Good Reason exists, Executive must notify
ServiceMaster in writing, within ninety (90) days following Executive’s
knowledge of the first event which Executive determines constitutes Good Reason,
or such event shall not constitute Good Reason under the terms of Executive’s
employment.  If ServiceMaster remedies such event within thirty (30) days
following receipt of such notice, Executive may not terminate employment for
Good Reason as a result of such event.

 

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Exhibit B

 

Form of Employee Stock Subscription Agreement for Robert J. Gillette has been
filed as Exhibit 10.2 of The ServiceMaster Company’s Current Report on Form 8-K,
filed on June 18, 2013, which also includes this Employment Agreement.

 

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Exhibit C

 

Form of Employee Restricted Stock Unit Agreement for Robert J. Gillette has been
filed as Exhibit 10.3 of The ServiceMaster Company’s Current Report on Form 8-K,
filed on June 18, 2013, which also includes this Employment Agreement.

 

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Exhibit D

 

Form of Employee Stock Option Agreement for Robert J. Gillette has been filed as
Exhibit 10.4 of The ServiceMaster Company’s Current Report on Form 8-K, filed on
June 18, 2013, which also includes this Employment Agreement.

 

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Exhibit E

 

Release Provisions

 

Release and Waiver of Claims.  In consideration of the payments and benefits to
which you are entitled under the Employment Agreement, dated as of June 12,
2013, to which you and ServiceMaster Global Holdings, Inc. (the “Company”) are
parties (the “Employment Agreement”), you hereby waive and release and forever
discharge the Company and its respective parent entities, subsidiaries,
divisions, limited partnerships, affiliated corporations, successors and assigns
and their respective past and present directors, managers, officers,
stockholders, partners, agents, employees, insurers, attorneys, and servants
each in his, her or its capacity as such, and each of them, separately and
collectively (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, whether or not mature
or ripe, that you ever had and now have against any Releasee 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 the Company, to any services performed
for the Company, 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 the Company, all
to the extent allowed by applicable law.  This release of claims includes, but
is not limited to, claims based on express or implied contract, compensation
plans, covenants of good faith and fair dealing, wrongful discharge, claims for
discrimination, harassment and retaliation, violation of public policy, tort or
common law, whistleblower or retaliation claims; and claims for additional
compensation or damages or attorneys’ fees or 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, the Age Discrimination in Employment Act, the Worker
Adjustment and Retraining Notification Act (“WARN”), or equivalent state WARN
act, the Employee Retirement Income Security Act (“ERISA”), and the
Sarbanes-Oxley Act of 2002.  You understand that this release of claims includes
a release of all known and unknown claims through the date on which this release
of claims becomes irrevocable (the “Effective Date”).

 

Limitation of Release:  Notwithstanding the foregoing, this release of claims
will not prohibit you from filing a charge of discrimination with the National
Labor Relations Board, the Equal Employment Opportunity Commission (“EEOC”) or
an equivalent state civil rights agency, but you agree and understand that you
are waiving your right to monetary compensation thereby if any such agency
elects to pursue a claim on your behalf.  Further, nothing in this release of
claims shall be construed to waive any right that is not subject to waiver by
private agreement under federal, state or local employment or other laws, such
as claims for workers’ compensation or unemployment benefits or any claims that
may arise after the Effective Date.  In addition, nothing in this

 

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release of claims will be construed to affect any of the following claims, all
rights in respect of which are reserved:

 

(a)  Any payment or benefit set forth in this Employment Agreement;

 

(b)  Reimbursement of unreimbursed business expenses properly incurred prior to
the termination date in accordance with Company policy;

 

(c)  Claims under the Management Equity Agreements (as defined in the Employment
Agreement) in respect of vested Company equity held by Executive

 

(d)  Vested benefits under the general Company employee benefit plans (other
than severance pay or termination benefits, all rights to which are hereby
waived and released);

 

(e)  Any claim for unemployment compensation or workers’ compensation
administered by a state government to which you are presently or may become
entitled;

 

(f)  Any claim that the Company has breached this release of claims; and

 

(g)  Indemnification as a current or former director or officer of the Company
or any of its subsidiaries (including as a fiduciary of any employee benefit
plan), or inclusion as a beneficiary of any insurance policy related to your
service in such capacity.

 

Return of ServiceMaster Property.  Not later than the Effective Date, you agree
to return, or hereby represent that you have returned as of such date (if you
have not signed this Agreement by such date), to ServiceMaster all ServiceMaster
property, equipment and materials, including, but not limited to, any company
vehicle, any laptop computer and peripherals; any cell phone or other portable
computing device; any telephone calling cards; keys; ServiceMaster
identification card; any credit or fuel cards; and all tangible written or
graphic materials (and all copies) relating in any way to ServiceMaster or its
business, including, without limitations, documents, manuals, customer lists and
reports, as well as all data contained on computer files, “thumb” drives,
“cloud” services, or other data storage device, or home or personal computers
and/or e-mail or internet accounts.

 

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