Exhibit 10.21 to 1997 Form 10-K

This instrument  constitutes part of a prospectus  covering securities that will
be registered under the Securities Act of 1933.



                                OPTION AGREEMENT

                  For Incentive Stock Option Granted Under the
                    ServiceMaster 1998 Equity Incentive Plan
                        (subject to shareholder approval)


         The ServiceMaster Company, a Delaware corporation,  (the "Company") and
[INSERT NAME] (the "Optionee") hereby agree as follows:

Part 1.  Option Terms

         1.1  Definitions.  As used in this Agreement,  the following terms have
the indicated meanings:

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Committee" means the Compensation Committee of the Board of 
Directors of the Company.

                  "Company" means The ServiceMaster Company, a Delaware 
corporation.

                  "Grant Date" means the date set forth in the Term Sheet as the
         date on which the Option  which is the  subject of this  agreement  was
         granted.

                  "Plan" means the  ServiceMaster  1998 Equity Incentive Plan as
         constituted on the Grant Date and, subject to the limitations set forth
         in Section 12.2 of the Plan, as amended from time to time thereafter.

                  "Shares"  means the shares of common  stock of the  Company or
         any successor  organization  to the Company (as more fully set forth in
         the Plan).

                  "Shareholders" means the holders of the shares of common stock
         of the Company on the record  date for the meeting of the  shareholders
         at which the Plan is submitted to the shareholders for their approval.

                  "Term  Sheet" means the document  which is  referenced  to and
         delivered concurrently with this Agreement and which sets forth certain
         terms and conditions of the Option granted hereunder.

Page 1
<PAGE>
         1.2 Grant. (a) Pursuant to the Plan (but subject to the approval of the
Plan by the  Shareholders as more fully specified in Section 5.11),  the Company
hereby  grants to the  Optionee  an option (the  "Option")  which  entitles  the
Optionee to purchase from the Company the Shares which are subject to the Option
on the terms and subject to the  conditions  specified  in the Term Sheet,  this
Agreement and the Plan.

         (b) Various terms governing this Option,  including the Grant Date, the
consideration  payable for the Option,  and the exercise price under the Option,
are set forth in the Term  Sheet.  The Term Sheet has been signed by the Company
and must also be signed by the Optionee before the Optionee has any rights under
this agreement.

         1.3 Character of the Option. The Option is an "incentive stock option",
meaning  that it is an option to purchase  Shares  which is intended to meet the
requirements of Section 422 of the Code.

         1.4 Number of Shares for which the Option May be Exercised.  Unless and
until an adjustment  is made pursuant to Section 4.3 of the Plan,  the number of
Shares  which are  subject  to the Option is the  number  specified  in the Term
Sheet.

         1.5  Option  Exercise  Price.  Unless and until an  adjustment  is made
pursuant to Section 4.4 of the Plan,  the price at which the Shares which may be
purchased  from  the  Company  upon any  exercise  of this  Option  shall be the
original exercise price specified in the Term Sheet.

Part 2:  Exercise

         2.1 Vesting  Schedule.  (a) During the period  commencing  on the Grant
Date and ending on the fifth  anniversary of the Grant Date,  this Option may be
exercised  only with  respect  to  installments  of not more than 20% each which
mature,   respectively,   on  the  first,   second,   third,  fourth  and  fifth
anniversaries  of the Grant Date.  Such  installments  shall  cumulate  over the
foregoing  five-year period. The foregoing  limitation shall operate as shown in
the following schedule,  provided, that in no event may this Option be exercised
in a manner or to an extent  contrary to the provisions of this Agreement or the
Plan:

          Grant Date                                            Cumulative
         Anniversary                     Percent                 Per Cent

             1st                            20%                     20%
             2nd                            20%                     40%
             3rd                            20%                     60%
             4th                            20%                     80%
             5th                            20%                    100%

Page 2
<PAGE>
         (b) After the fifth  anniversary of the Grant Date,  this Option may be
exercised  in whole or in part and at such time or times as the person  entitled
to  exercise  the Option may desire with  respect to all Shares  then  available
under this Option,  provided, that in no event may the Option be exercised after
the  expiration  date set forth in the Term Sheet or in a manner or to an extent
contrary to the provisions of this Agreement or the Plan.

         2.2 Manner of Exercise. (a) The person entitled to exercise this Option
may do so by giving the Company a written notice (the  "Exercise  Notice") which
shall --

         (i)      identify the Option;

         (ii)  specify the number of Shares with  respect to which the Option is
then being exercised;

         (iii) state the price at which the shares will be purchased;

         (iv)     state that the person  signing the Exercise  Notice  agrees to
                  purchase the Shares so specified at the Exercise  Price and on
                  the terms established in this Agreement and the Plan; and

         (v) be  accompanied  by the  payment  in  full  for  the  Shares  being
purchased.

A form of Exercise  Notice which will be deemed  satisfactory  by the Company is
attached to this Agreement as Exhibit A. Delivery of the Exercise  Notice may be
made by personal delivery or by United States mail.

         2.3 Exercise  Date.  This Option shall be deemed to have been exercised
on the date (the  "Exercise  Date") on which the Exercise  Notice,  completed as
required  by  Section  2.2 (or  completed  in such  other  form or manner as the
Company's Secretary or the Committee shall approve),  is delivered to the office
of the  Secretary  of the  Company  or at such  other  place  as may  have  been
designated  by the  Secretary or the Committee at the time of such exercise as a
place to which  notices of  exercise  of Options  granted  under the Plan may be
delivered.

         2.4 Manner of  Payment.  Payment for the Shares  purchased  pursuant to
each exercise of the Option shall be made only in cash.

         2.5  Termination of Option.  The Option shall terminate on whichever of
the following  dates occurs first:  (i) the Expiration  Date as specified in the
Term Sheet;  (ii) six months after the date of the  Optionee's  employment  with
ServiceMaster  for any reason  unless  Section 2.6 is  applicable;  or (iii) any
other date established under any of the provisions of the Plan as the date after
which the Option may not be exercised.  The  applicable  date under this Section
2.5 is hereinafter referred to as the "Termination Date".

Page 3
<PAGE>
         2.6 Effect of Death or  Disability or  Retirement.  The effect upon the
exercisability of the Option on account of the Optionee's  death,  disability or
retirement  shall be  determined  by rules  adopted or modified by the Committee
from  time to time.  Exhibit B to this  Agreement  states  the  rules  which the
Committee  has  presently  determined  shall be applicable to the Option in such
cases. Such rules may be amended at any time and from time to time or eliminated
entirely,  provided that in such event the Company shall notify the Optionee. If
no such rules are in effect at the time of the Optionee's  death,  disability or
retirement,  clause (ii) of Section 2.5  without  the  reference  to Section 2.6
shall govern.

         2.7 No  Exercise  After the  Termination  Date.  The  Option may not be
exercised after its Termination Date. Thus, the Option does not convey any right
to purchase  any Shares  which  Optionee (or other holder of the Option) has not
agreed to purchase in an Exercise Notice delivered to the Company on or prior to
the  Termination  Date in  accordance  with the  requirements  of the  preceding
sections of this Part 2.

Part 3:  The Plan Terms

         3.1 Plan Terms  Control.  The Option has been granted under the Plan as
constituted at the Grant Date. The terms of the Plan as constituted at the Grant
Date are  incorporated  into this  Agreement by reference  and shall control the
rights and obligations of the Company and the Optionee under this Agreement.

         3.2 Effect of  Subsequent  Changes  in the Plan.  No change in the Plan
which  shall be made after the Grant Date shall  adversely  affect the rights of
the  Optionee  under this  Agreement  unless the  Optionee  shall have agreed in
writing to such  change.  No change in the Plan after the Grant Date shall inure
to the benefit of the Optionee except to the extent  expressly  permitted by the
Committee.

Part 4.  Call Right.

         4.1 The Company's Call Right. (a) If the Optionee terminates his or her
employment  with the  Company or any  subsidiary  of the Company and within five
years after the date of such  termination  of  employment  the Optionee  becomes
employed by an organization and assumes  responsibilities with that organization
which places the Optionee in competition  with any one or more of the businesses
then being  conducted  by the  Company or any  subsidiary  of the  Company,  the
Company  shall have the right (the "Call  Right") to  purchase  Shares  from the
Optionee in a number  equal to the number of the Shares  which the  Optionee had
purchased  within five years prior to the  initial  competitive  activity by the
Optionee.  The amount  payable by the Company for the Shares to be  delivered by
the Optionee pursuant to this Section 4.1 shall be the Optionee's Investment (as
defined in paragraph (b) below) in the Shares purchased under the Option. If and
to the extent that the Optionee can not deliver the Shares which were  purchased
under the Option because the Optionee has previously  disposed of all or some of
such Shares,  then the Optionee agrees to obtain substitute Shares in the number
needed to comply with the Optionee's  delivery obligation under this Section 4.1
by  purchasing  Shares  in the  market  or by any other  lawful  means,  and the
Optionee shall deliver such substitute Shares to the Company.

Page 4
<PAGE>
         (b) As used in this  Section  4.1,  the  term  "Optionee's  Investment"
means, as to each Share purchased under the Option, the Exercise Price Per Share
as shown in the Term Sheet, provided that the figure representing the Optionee's
Investment  shall be  appropriately  adjusted in the event of Capital Changes as
provided in Section 5.1.

         (c) The  judgement  of the  Committee  as to whether,  for  purposes of
applying Section 4.1(a),  the Optionee is in competition with the Company and/or
any of its business units shall be conclusive  and binding,  unless the Optionee
can show by clear and convincing evidence that no such competition has occurred.

         4.2 Call Right Exercise Period.  The Call Right may be exercised by the
Company at any time on or prior to the date (the "Call  Deadline")  which occurs
three  months  after the  Committee  has first  actually  become  aware that the
Optionee has become employed by another organization and, as an employee of such
organization,   become  engaged  in  activities  which  place  the  Optionee  in
competition with the Company as described in Section 4.1.

         4.3 Exercise of Call Right. The Company's Call Right shall be exercised
by delivery by the Company of a written  notice of such exercise to the Optionee
at the most  recent  address  for the  Optionee  as shown on the  records of the
Company.

         4.4 Consummation of the Company's  Purchase.  Within five business days
after the Company has  exercised  its Call Right  pursuant to Section  4.3,  the
Optionee shall deliver to the Company: (i) certificate(s) representing Shares in
the number required to be delivered under Section 4.1; (ii) transfer instruments
reasonably  satisfactory  to the  Company  to vest  immediately  in the  Company
absolute  ownership of such Shares free of any adverse interest of any kind; and
(iii) such evidence and  assurances as the Company shall  reasonably  request to
establish  the power of the Optionee to convey  ownership of such Shares and the
person(s)  entitled to receive payment for such Shares.  Upon receipt of all the
items  deliverable  under the  preceding  sentence,  the  Company  shall pay the
purchase  price for such Shares as  established  pursuant to Section 4.1. If the
Optionee  does not deliver the Shares at the time  required  under the preceding
sentence,  the Company shall have the right to obtain  payment from the Optionee
for an amount equal to the difference between the greater of the market price at
the time the Call  Right is  exercised  or the time the  payment is made and the
Optionee's Investment plus interest from exercise of the Call Right at the prime
rate plus two percentage points and collection costs.

         4.5 Call Right Lapse.  If the Company  fails to exercise its Call Right
on or prior to the Call Deadline,  then immediately  after the Call Deadline the
Optionee shall be relieved of any further obligation to deliver any Shares under
this Part 4.

Page 5
<PAGE>
Part 5.  General Provisions

         5.1 Capital  Changes.  The Committee  shall have the right to determine
the  effect of each  Capital  Change  upon the  parties'  respective  rights and
obligations  under this  Agreement,  including but not limited to (i) the nature
and quantity of property  purchasable  by the Company  under Part 4 after giving
effect to such Capital Change and (ii) the price payable by the Company for such
property upon exercise by the Company of rights granted in Part 4.

         5.2 Securities Law  Compliance.  The Optionee shall not offer,  sell or
otherwise dispose of any of the Shares acquired by reason of any exercise of the
Option in any manner which would violate the Securities Act of 1933 or any other
state or  federal  law or  require  the  Company  to make any filing or take any
action to avoid such a violation.

         5.3 Terms  Defined in the Plan.  Every term which is defined or given a
special  meaning in the Plan has the same  meaning  whenever  it is used in this
Agreement.

         5.4 Binding Agreement.  (a) Each party acknowledges that it is intended
that the other party may rely on the rights  granted by this  Agreement and that
this  Agreement is supported  by adequate  consideration  and is binding on each
party in accordance with its terms.

         (b) This Agreement  shall also be binding upon and inure to the benefit
of any successor of the Company.

         5.5 Complete  Agreement.  This  Agreement,  the Term Sheet and the Plan
together  contain the complete  agreement of the parties relating to the Option.
The rights and obligations of the parties evidenced by this Agreement,  the Term
Sheet  and  the  Plan   supersede  any  prior   understandings,   agreements  or
representations by or between the parties which may have related to such subject
matter in any way.

         5.6  Amendments  and Waivers.  The  provisions of this Agreement may be
amended,  and a person may take any action which is prohibited herein or omit to
perform  any  action  required  to be  performed  by such  person,  only if such
amendment,  act or omission  has been  approved in writing by the parties to the
Agreement.  No course of dealing or any delay in exercising any rights hereunder
shall  operate as a waive of any rights of any person  under this  Agreement.  A
waiver upon any one  occasion  shall not be  construed as a bar or waiver of any
right or remedy on any future occasion.

         5.7 Counterparts.  This Agreement and the Term Sheet may be executed in
one or more  counterparts,  each of which shall be an original  but all of which
together shall constitute one and the same instrument.

Page 6
<PAGE>
         5.8  Notices.  Any notice to the Company  required or  permitted by the
terms of this  Agreement  shall not be deemed to have been given unless is it in
writing  and shall be deemed to have been given at (but not  before) the time it
has been  delivered in writing to the office of the  Secretary of the Company or
to such other place as the Company may designate in writing from time to time.

         5.9 Captions.  The captions used in this Agreement are for  convenience
only,  do not  constitute a part of this  Agreement,  and shall not be deemed to
limit, characterize, or in any way affect any provision of this Agreement.

         5.10  Execution.  The parties have  executed the Term Sheet to evidence
their intention to be bound by every provision of this Agreement.

         5.11 Stockholder  Approval.  The Optionee understands that the Plan has
been approved by the Executive Committee of the Board of Directors, but the Plan
will not stand as fully  approved as a stock option plan of the Company until it
has been submitted to and approved by the  Shareholders.  The Board of Directors
intends to seek such approval by the  Shareholders  at the annual meeting of the
Shareholders  to be held on May 1, 1998.  The grant of the  Option  made by this
agreement  and the  related  Term  Sheet is  conditional  upon such  Stockholder
approval.  If such approval is granted,  the Option will become  final;  if such
approval is not granted, the Option will become void and of no further effect.

                                      -oOo-

Page 7
<PAGE>

                                  EXERCISE FORM

                            OPTION GRANTED UNDER THE
                    SERVICEMASTER 1998 EQUITY INCENTIVE PLAN


To:      The Secretary
         The ServiceMaster Company
         One ServiceMaster Way
         Downers Grove, IL 60515


         Pursuant to the provisions of the Option Agreement which I entered into
with The  ServiceMaster  Company under the  ServiceMaster  1998 Equity Incentive
Plan (the  "Plan")  covering an option to purchase  shares of The  ServiceMaster
Company which was granted to me on February ___,  1998, I hereby notify you that
I wish to exercise such option as follows:

  Number of shares as to which the option
  is being exercised (must be consistent with the vesting schedule) ____________

  Exercise price (number of shares times the
  price stated in the option agreement)                            $____________


                                 Withholding Tax

Check One:

_______  I  authorize  ServiceMaster  to reduce  the  number  of  shares  issued
         pursuant to this option  exercise in a number  sufficient  to cover the
         withholding  tax  obligation  based  on the  average  market  price  of
         ServiceMaster  shares over the preceding  five business days. I certify
         that  I am  currently  employed  by  ServiceMaster  or a  ServiceMaster
         affiliated company.

_______  I am hereby  remitting with this Exercise Form a check in the amount of
         $__________  which  has  been  calculated  to  satisfy  ServiceMaster's
         minimum tax withholding obligation.


PLEASE SEE THE REVERSE  SIDE WHICH MUST BE SIGNED  BEFORE THE SHARES  COVERED BY
THIS NOTICE CAN BE ISSUED.

                                                                       EXHIBIT A

<PAGE>


The  Exercise  Date  stated  on the  reverse  side is the  date on  which I have
delivered  this notice to you (either by personal  delivery or by deposit in the
United States mail).

In connection with the exercise of my option:

1.       I hereby agree to purchase the Shares in the number and at the price as
         set forth on the reverse  side and on the terms  established  under the
         terms of the Plan, the Option Agreement and the regulations  adopted by
         the Compensation Committee;

2.       I represent that I am the person  entitled  under the option  agreement
         and the Plan to purchase the Shares covered by this notice;

3.       I understand  that by the exercise of my option I will be considered to
         have  received  income which is subject to federal,  state and/or local
         income taxes and that  withholding will be made against this obligation
         as indicated on the reverse side.

4.       I understand that the terms of the Plan give ServiceMaster the right to
         purchase from me, at my cost, the shares which I purchased  pursuant to
         this  exercise of my option if I enter into  competitive  activity with
         ServiceMaster  within five years after termination of my employment.  I
         further  understand that the exercise of this "Call Right" could have a
         substantial negative financial impact to me.

5.       I have  received  the most recent  annual  report of The  ServiceMaster
         Company and am familiar with the information contained in that report.



Date: ____________
                                                     ---------------------------
                                                     Signature


                                                     ---------------------------
                                                     Printed Name


<PAGE>

                      RULES FOR APPLICATION IN THE CASE OF
                        DEATH, DISABILITY OR RETIREMENT.
                  (See Section 2.5(b) of the Option Agreement)

                              Certain Definitions:

"Qualifying  Retirement"  means a termination of employment  with  ServiceMaster
which satisfies both of the following conditions:

         A.       The  termination  of  employment  occurs  at a time  when  the
                  employee  is  either  age  63 or  older  or the  employee  has
                  attained 15 years of service  with  ServiceMaster  (which need
                  not be 15 consecutive years); and

         B.       The   termination   of  employment   is  not  an   involuntary
                  termination of employment or a discharge for cause.


                  Event                                   Rules
           ----------------------------    -------------------------------------

1.         Death  or  disability            The  unvested
                                            portion of the  vesting  schedule is
                                            accelerated  and the option shall be
                                            open to exercise  for two years form
                                            the date of the event.

2.         Qualifying  Retirement 

The option shall remain  exercisable  to the end of its term in accordance  with
its  provisions,  but the option shall expire  immediately  if: (i) the employee
enters  into a position  which is  competitive  with  ServiceMaster  or (ii) the
employee asserts any claims against  ServiceMaster  which are related in any way
to the  employee's  termination  of employment  with  ServiceMaster  (other than
claims   which  are  founded  on  an   agreement   between  the   employee   and
ServiceMaster).

                                            If death occurs after a
                                            Qualifying Retirement and before the
                                            term of the option has expired, Rule
                                            1 shall become applicable commencing
                                            on the date of death.



                                                                       EXHIBIT B