Document:

Exhibit 10.14

 

This
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT, dated as of March 19, 2010
(this “Agreement”), is entered into by and among ServiceMaster Global
Holdings, Inc., a Delaware corporation (the “Company”), The
ServiceMaster Company, a Delaware corporation (“ServiceMaster” and,
together with the Company, the “Company Entities”), and JPMorgan Chase
Funding Inc. (formerly known as J.P. Morgan Ventures Corporation, the “Investor”).  Capitalized terms used herein without
definition have the meanings set forth in Section 1 of this Agreement.

 

RECITALS

 

A.            The Company is an acquisition vehicle
formed by Clayton, Dubilier & Rice, Inc. (“CD&R”) that
executed an Agreement and Plan of Merger, dated March 18, 2007 (as the
same may have been amended from time to time in accordance with its terms and
the Stockholders Agreement, the “Merger Agreement”), to acquire via
merger, on the terms and subject to the conditions set forth in the Merger
Agreement, all of the capital stock of ServiceMaster (such acquisition, the “Merger”).

 

B.            The Company and certain of its
stockholders entered into a Stockholders Agreement (as the same may be amended
from time to time in accordance with the terms thereof, the “Stockholders
Agreement”), dated as of July 24, 2007, setting forth certain
agreements with respect to, among other things, the management of the Company
and transfers of its shares in various circumstances.

 

C.            In connection with the Merger, each
Committing Investor (as defined in the Stockholders Agreement) entered into a
Commitment Letter (as defined in the Stockholders Agreement), pursuant to which
such Committing Investor agreed, subject to the conditions set forth therein,
to purchase stock of the Company for an aggregate purchase price equal to its
Commitment (as defined in the Commitment Letter).

 

D.            In order to finance the Merger and
related transactions, the Company sold shares of its common shares, par value
US$0.01 per share (“Shares”), to the Committing Investors, including the
Investor, and to certain co-investors and such other stockholders of the
Company as are listed in the signature pages of the Stockholders Agreement
or as otherwise became stockholders of the Company prior to the Merger pursuant
to the terms thereof (the “Equity Offering”).

 

E.             In order to finance the Merger, the
Company and/or one or more of its wholly-owned Subsidiaries entered into the
Debt Financing (as defined in the Merger Agreement).

 

F.             The Company Entities and the Investor
entered into an Indemnification Agreement, dated as of July 24, 2007 (the
“Original Indemnification Agreement”), which is being amended and restated in
its entirety as provided in this Agreement.

 

 

G.            Concurrently with the execution and
delivery of the Original Indemnification Agreement, the Company and certain
other parties entered into a Transaction Fee Agreement with the Investor (or
one of its Affiliates), dated as of July 24, 2007 (the “Transaction Fee
Agreement”).

 

H.            Investor (or its Affiliates)  has performed the Initial Services (as defined in the Transaction
Fee Agreement) for the Company.

 

I.              The Company or one or more of its
Subsidiaries from time to time since the Acquisition has, and in the future may
(i) offer and sell or cause to be offered and sold equity or debt
securities (such offerings, collectively, the “Subsequent Offerings”),
including without limitation (a) offerings of shares of capital
stock or equity-linked instruments of the Company or any of its Subsidiaries,
and/or options to purchase such shares to employees, directors, managers, dealers,
franchisees and consultants of and to the Company or any of its Subsidiaries
(any such offering, a “Management Offering”), and (b) one or
more offerings of debt securities for the purpose of refinancing any
indebtedness of the Company or any of its Subsidiaries or for other corporate
purposes, and (ii) repurchase, redeem or otherwise acquire certain
securities of the Company or any of its Subsidiaries or engage in
recapitalization or structural reorganization transactions relating thereto
(any such repurchase, redemption, acquisition, recapitalization or
reorganization, a “Redemption”), in each case subject to the terms and
conditions of the Stockholders Agreement and any other applicable agreement.

 

J.             The parties hereto recognize the
possibility that claims might be made against and liabilities incurred by the
Investor or related Persons or Affiliates under applicable securities laws or
otherwise in connection with the Transactions (including the Initial Services)
or the Securities Offerings, or relating to other actions or omissions of or by
members of the Company Group  and the
parties hereto accordingly wish to provide for the Investor and related Persons
and Affiliates to be indemnified in respect of any such claims and liabilities.

 

K.            The parties hereto recognize that claims
might be made against and liabilities incurred by directors and officers of any
member of the Company Group in connection with their acting in such capacity,
and accordingly wish to provide for such directors and officers to be
indemnified to the fullest extent permitted by law in respect of any such
claims and liabilities.

 

NOW,
THEREFORE, in consideration of the foregoing premises, and the mutual
agreements and covenants and provisions herein set forth, the parties hereto hereby
agree as follows:

 

2

 

1.             Definitions.

 

(a)           “Affiliate” means, with respect to
any Person, (i) any other Person directly or indirectly
Controlling, Controlled by or under common Control with, such Person, (ii) any
Person directly or indirectly owning or Controlling 10% or more of any class of
outstanding voting securities of such Person or (iii) any officer,
director, general partner, special limited partner or trustee of any such
Person described in clause (i) or (ii). 
“Control” of any Person shall consist of the power to direct the
management and policies of such Person (whether through the ownership of voting
securities, by contract, as trustee or executor, or otherwise).

 

(b)           “Change in Control” means the
first to occur of the following events after the closing date of the Merger:

 

(i)  the acquisition by any Person or “group”
(as defined in Section 13(d) of the Securities Exchange Act of 1934,
as amended) of 50% or more of the combined voting power of the Company’s then
outstanding voting securities, other than any such acquisition by any member of
the Company Group, any Committing Investors or their Affiliate Co-Investors (as
defined in the Stockholders Agreement), any employee benefit plan of the Company
or any of its Subsidiaries, or any Affiliates of any of the foregoing;

 

(ii)  the merger, consolidation or other
similar transaction involving the Company, as a result of which Persons who
were stockholders of the Company immediately prior to such merger,
consolidation, or other similar transaction do not, immediately thereafter,
own, directly or indirectly, more than 50% of the combined voting power
entitled to vote generally in the election of directors of the merged or
consolidated company;

 

(iii)  within any 24-month period, the persons
who were directors of the Company at the beginning of such period (the “Incumbent
Directors”) shall cease to constitute at least a majority of the votes of
the total authorized membership of the board of directors of the Company, provided
that any director elected or nominated for election to the board of directors
of the Company by a majority vote of the Incumbent Directors then still in
office shall be deemed to be an Incumbent Director for purposes of this clause
(iii); or

 

(iv)  the sale, transfer or other disposition
of all or substantially all of the assets of the Company to one or more

 

3

 

Persons that are not,
immediately prior to such sale, transfer or other disposition, Affiliates of
the Company.

 

Notwithstanding the foregoing, a Public Offering shall
not constitute a Change in Control.

 

(c)           “Claim” means, with respect to any
Indemnitee, any claim by or against such Indemnitee involving any Obligation
with respect to which such Indemnitee may be entitled to be indemnified by any
member of the Company Group under this Agreement.

 

(d)           “Commission” means the United
States Securities and Exchange Commission or any successor entity thereto.

 

(e)           “Company Group” means the Company
and any of its Subsidiaries.

 

(f)            “Determination” means a
determination that either (i) there is a reasonable basis for the
conclusion that indemnification of an Indemnitee is proper in the circumstances
because such Indemnitee met a particular standard of conduct (a “Favorable
Determination”) or (ii) solely in the case of an Indemnitee
making a Claim in such Indemnitee’s capacity as director or officer of the
Company Group, there is no reasonable basis for the conclusion that
indemnification of an Indemnitee is proper in the circumstances because such
Indemnitee met a particular standard of conduct (an “Adverse Determination”).  Except as required by law, no Adverse
Determination shall be made in the case of any Indemnitee that is not a director
or officer of the Company or in connection with any Indemnitee Claim not made
in its capacity as a director or officer of the Company Group.  An Adverse Determination shall include the
decision that a Determination was required in connection with indemnification
and the decision as to the applicable standard of conduct.

 

(g)           “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

(h)           “Expenses” means all attorneys’
fees and expenses, retainers, court, arbitration and mediation costs,
transcript costs, fees of experts, bonds, witness fees, costs of collecting and
producing documents, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, appealing or otherwise participating in a Proceeding.

 

(i)            “Indemnitee” means the Investor,
its Affiliates, its successors and assigns, and the respective directors,
officers, partners, members, employees, agents, advisors, consultants,
representatives and controlling persons (within the meaning of the Securities
Act) of each of them, or of their partners, members and controlling persons,
and each 

 

4

 

other person who
is or becomes a director or an officer of any member of the Company Group, in
each case irrespective of the capacity in which such person acts.

 

(j)            “Independent Legal Counsel” means
an attorney or firm of attorneys competent to render an opinion under the
applicable law, selected in accordance with the provisions of Section 4(e),
who has not otherwise performed any services for any member of the Company
Group or for any Indemnitee within the last three years (other than with
respect to matters concerning the rights of an Indemnitee under this Agreement
or other indemnitees under indemnity agreements similar to this Agreement).

 

(k)           “Obligations” means, collectively,
any and all claims, obligations, liabilities, causes of actions, Proceedings,
investigations, judgments, decrees, losses, damages (including punitive and
exemplary damages), fees, fines, penalties, amounts paid in settlement, costs
and Expenses (including without limitation interest, assessments and other
charges in connection therewith and disbursements of attorneys, accountants,
investment bankers and other professional advisors), in each case whether
incurred, arising or existing with respect to third parties or otherwise at any
time or from time to time.

 

(l)            “Person” means an individual,
corporation, limited liability company, limited or general partnership, trust
or other entity, including a governmental or political subdivision or an agency
or instrumentality thereof.

 

(m)          “Proceeding” means a threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including without limitation a claim, demand,
discovery request, formal or informal investigation, inquiry, administrative
hearing, arbitration or other form of alternative dispute resolution, including
an appeal from any of the foregoing.

 

(n)           “Public Offering” means the first
day as of which (i) sales of Shares are made to the public in the
United States pursuant to an underwritten public offering led by one or more
underwriters at least one of which is an underwriter of nationally recognized
standing or (ii) the board of directors of the Company has
determined that Shares otherwise have become publicly-traded for this purpose.

 

(o)           “Related Document” means any
agreement, certificate, instrument or other document to which any member of the
Company Group may be a party or by which it or any of its properties or assets
may be bound or affected from time to time relating in any way to the
Transactions or any Securities Offering or any of the transactions contemplated
thereby, including without limitation, in each case as the same may be amended
from time to time, (i) any registration statement filed by or on
behalf of any member of the Company Group with the Commission in connection
with the Transactions or any Securities Offering, including all exhibits,
financial statements and 

 

5

 

schedules appended
thereto, and any submissions to the Commission in connection therewith, (ii) any
prospectus, preliminary, free-writing or otherwise, included in such
registration statements or otherwise filed by or on behalf of any member of the
Company Group in connection with the Transactions or any Securities Offering or
used to offer or confirm sales of their respective securities in any Securities
Offering, (iii) any private placement or offering memorandum or
circular, information statement or other information or materials distributed
by or on behalf of any member of the Company Group or any placement agent or
underwriter in connection with the Transactions or any Securities Offering, (iv) any
federal, state or foreign securities law or other governmental or regulatory
filings or applications made in connection with any Securities Offering, the
Transactions or any of the transactions contemplated thereby, (v) any
dealer-manager, underwriting, subscription, purchase, stockholders, option or
registration rights agreement or plan entered into or adopted by any member of
the Company Group in connection with any Securities Offering, (vi) any
purchase, repurchase, redemption, recapitalization or reorganization or other
agreement entered into by any member of the Company Group in connection with
any Redemption, or (vii) any quarterly, annual or current reports
or other filing filed, furnished or supplementally provided by any member of
the Company Group with or to the Commission or any securities exchange,
including all exhibits, financial statements and schedules appended thereto,
and any submission to the Commission or any securities exchange in connection
therewith.

 

(p)           “Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

(q)           “Securities Offerings” means the
Equity Offering, the offering by ServiceMaster of its 10.75%/11.50% Senior
Toggle Notes due 2015, any Management Offering, any Redemption and any
Subsequent Offering.

 

(r)            “Subsidiary” means each
corporation or other Person in which a Person owns or Controls, directly or
indirectly, capital stock or other equity interests representing more than 50%
of the outstanding voting stock or other equity interests.

 

(s)           “Transactions” means the Merger,
the Equity Offering and the Debt Financing.

 

2.             Indemnification.

 

(a)           Each of the Company Entities (each an “Indemnifying
Party” and collectively the “Indemnifying Parties”), jointly and
severally, agrees to indemnify, defend and hold harmless each Indemnitee:

 

(i)            from and against any and all Obligations, whether
incurred with respect to third parties or otherwise, in any way resulting from,
arising out of or in 

 

6

 

connection with, based upon or relating to (A) the
Securities Act, the Exchange Act or any other applicable securities or other
laws, in connection with any Securities Offering, the Debt Financing, any other
Transactions, any Related Document or any of the transactions contemplated
thereby, (B) any other action or failure to act of any member of
the Company Group or any of their predecessors, whether such action or failure
has occurred or is yet to occur, (C) the performance by the Investor
(or its Affiliates) of the Initial Services pursuant to the Transaction Fee
Agreement or (D) the performance by the Investor under its
consulting agreement with the Company and ServiceMaster, dated as of August 13,
2009 (the “Consulting Agreement”); and

 

(ii)           to the fullest extent permitted by the law specified
herein as governing this Agreement, by the law of the place of incorporation of
an Indemnifying Party, or by any other applicable law in effect as of the date
hereof or as amended to increase the scope of permitted indemnification,
whichever is greater (except, with respect to any Indemnifying Party, to the
extent that such indemnification may be prohibited by the law of the place of
incorporation of such Indemnifying Party), from and against any and all
Obligations whether incurred with respect to third parties or otherwise, in any
way resulting from, arising out of or in connection with, based upon or
relating to (A) the fact that such Indemnitee is or was a director
or an officer of any member of the Company Group or is or was serving at the
request of such corporation as a director, officer, member, employee or agent
of or advisor or consultant to another corporation, partnership, joint venture,
trust or other enterprise, (B) any breach or alleged breach by such
Indemnitee of his or her fiduciary duty as a director or an officer of any
member of the Company Group or (C) any payment or reimbursement by
any Indemnitee, pursuant to indemnification arrangements or otherwise, of any
Obligations contemplated in the foregoing clauses (A) or (B) of this Section 2(a)(ii);

 

in each case including but not limited to any and all fees, costs and
Expenses (including without limitation fees and disbursements of attorneys and
other professional advisers) incurred by or on behalf of any Indemnitee in
asserting, exercising or enforcing any of its rights, powers, privileges or
remedies in respect of this Agreement, the  Transaction
Fee Agreement or the Consulting Agreement.

 

(b)           Without in any way limiting the foregoing
Section 2(a), each of the Indemnifying Parties agrees, jointly and
severally, to indemnify, defend and hold harmless each Indemnitee from and
against any and all Obligations resulting from, arising out of or in connection
with, based upon or relating to liabilities under the Securities Act, the
Exchange Act or any other applicable securities or other laws, rules or
regulations in connection with (i) the inaccuracy or breach of or
default under any representation, warranty, covenant or agreement in any
Related Document, (ii) any untrue 

 

7

 

statement or
alleged untrue statement of a material fact contained in any Related Document
or (iii) any omission or alleged omission to state in any Related
Document a material fact required to be stated therein or necessary to make the
statements therein not misleading. 
Notwithstanding the foregoing, the Indemnifying Parties shall not be
obligated to indemnify such Indemnitee from and against any such Obligation to
the extent that such Obligation arises out of or is based upon an untrue
statement or omission made in such Related Document in reliance upon and in
conformity with written information furnished to the Indemnifying Parties, as
the case may be, in an instrument duly executed by such Indemnitee and
specifically stating that it is for use in the preparation of such Related
Document.

 

(c)           Without limiting the foregoing, in the
event that any Proceeding is initiated by an Indemnitee or any member of the
Company Group to enforce or interpret this Agreement or any rights of such
Indemnitee to indemnification or advancement of expenses (or related
Obligations of such Indemnitee) under any member of the Company Group’s
certificate of incorporation or bylaws, any other agreement to which Indemnitee
and any member of the Company Group are party, any vote of directors of any
member of the Company Group, the Delaware General Corporate Law, any other
applicable law or any liability insurance policy, the Indemnifying Parties shall
indemnify such Indemnitee against all costs and Expenses incurred by such
Indemnitee or on such Indemnitee’s behalf (including by Investor or its
Affiliates for all costs and Expenses incurred by such Person) in connection
with such Proceeding, whether or not such Indemnitee is successful in such
Proceeding, except to the extent that the court presiding over such Proceeding
determines that material assertions made by such Indemnitee in such Proceeding
were in bad faith or were frivolous.

 

3.             Contribution.

 

(a)           If for any reason the indemnity provided
for in Section 2(a) is unavailable or is insufficient to hold
harmless any Indemnitee from any of the Obligations covered by such indemnity,
then the Indemnifying Parties, jointly and severally, shall contribute to the
amount paid or payable by such Indemnitee as a result of such Obligation in
such proportion as is appropriate to reflect (i) the relative fault
of each member of the Company Group, on the one hand, and such Indemnitee, on
the other, in connection with the state of facts giving rise to such
Obligation, (ii) if such Obligation results from, arises out of, is
based upon or relates to the Transactions or any Securities Offering, the
relative benefits received by each member of the Company Group, on the one
hand, and such Indemnitee, on the other, from such Transaction or Securities
Offering and (iii) if required by applicable law, any other
relevant equitable considerations.

 

(b)           If for any reason the indemnity
specifically provided for in Section 2(b) is unavailable or is
insufficient to hold harmless any Indemnitee from any of the Obligations
covered by such indemnity, then the Indemnifying Parties, jointly and 

 

8

 

severally, shall
contribute to the amount paid or payable by such Indemnitee as a result of such
Obligation in such proportion as is appropriate to reflect (i) the
relative fault of each of the members of the Company Group, on the one hand,
and such Indemnitee, on the other, in connection with the information contained
in or omitted from any Related Document, which inclusion or omission resulted
in the inaccuracy or breach of or default under any representation, warranty,
covenant or agreement therein, or which information is or is alleged to be
untrue, required to be stated therein or necessary to make the statements
therein not misleading, (ii) the relative benefits received by the
members of the Company Group, on the one hand, and such Indemnitee, on the
other, from such Transaction or Securities Offering and (iii) if
required by applicable law, any other relevant equitable considerations.

 

(c)           For purposes of Section 3(a), the
relative fault of each member of the Company Group, on the one hand, and of an
Indemnitee, on the other, shall be determined by reference to, among other
things, their respective relative intent, knowledge, access to information and
opportunity to correct the state of facts giving rise to such Obligation.  For purposes of Section 3(b), the
relative fault of each of the members of the Company Group, on the one hand,
and of an Indemnitee, on the other, shall be determined by reference to, among
other things, (i) whether the included or omitted information
relates to information supplied by the members of the Company Group, on the one
hand, or by such Indemnitee, on the other, (ii) their respective
relative intent, knowledge, access to information and opportunity to correct
such inaccuracy, breach, default, untrue or alleged untrue statement, or
omission or alleged omission, and (iii) applicable law.  For purposes of Section 3(a) or
3(b), the relative benefits received by each member of the Company Group, on
the one hand, and an Indemnitee, on the other, shall be determined by weighing
the direct monetary proceeds to the Company Group, on the one hand, and such
Indemnitee, on the other, from such Transaction or Securities Offering.

 

(d)           The parties hereto acknowledge and agree
that it would not be just and equitable if contributions pursuant to Section 3(a) or
3(b) were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations
referred to in such respective Section. 
No Indemnifying Party shall be liable under Section 3(a) or
3(b), as applicable, for contribution to the amount paid or payable by any
Indemnitee except to the extent and under such circumstances as such
Indemnifying Party would have been liable to indemnify, defend and hold
harmless such Indemnitee under the corresponding Section 2(a) or 2(b),
as applicable, if such indemnity were enforceable under applicable law.  No Indemnitee shall be entitled to
contribution from any Indemnifying Party with respect to any Obligation covered
by the indemnity specifically provided for in Section 2(b) in the
event that such Indemnitee is finally determined to be guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such Obligation and the Indemnifying Parties
are not guilty of such fraudulent misrepresentation.

 

9

 

4.             Indemnification
Procedures.

 

(a)           Whenever any
Indemnitee shall have actual knowledge of the assertion of a Claim against it,
such Indemnitee shall notify the appropriate member of the Company Group in
writing of the Claim (the “Notice of Claim”) with reasonable promptness
after such Indemnitee has such knowledge relating to such Claim; provided
the failure or delay of such Indemnitee to give such Notice of Claim shall not
relieve any Indemnifying Party of its indemnification obligations under this
Agreement except to the extent that such omission results in a failure of
actual notice to it and it is materially injured as a result of the failure to
give such Notice of Claim.  The Notice of
Claim shall specify all material facts known to such Indemnitee relating to
such Claim and the monetary amount or an estimate of the monetary amount of the
Obligation involved if such Indemnitee has knowledge of such amount or a
reasonable basis for making such an estimate. 
The Indemnifying Parties shall, at their expense, undertake the defense
of such Claim with attorneys of their own choosing reasonably satisfactory in
all respects to such Indemnitee, subject to the right of such Indemnitee to
undertake such defense as hereinafter provided. 
An Indemnitee  may participate
in such defense with counsel of such Indemnitee’s choosing at the expense of
the Indemnifying Parties.  In the event
that the Indemnifying Parties do not undertake the defense of the Claim within
a reasonable time after such Indemnitee has given the Notice of Claim, or in
the event that  such Indemnitee shall in
good faith determine that the defense of any claim by the Indemnifying Parties
is inadequate or may conflict with the interest of any Indemnitee (including
without limitation, Claims brought by or on behalf of any member of the Company
Group), such Indemnitee may, at the expense of the Indemnifying Parties and
after giving notice to the Indemnifying Parties of such action, undertake the
defense of the Claim and compromise or settle the Claim, all for the account of
and at the risk of the Indemnifying Parties. 
In the defense of any Claim against an Indemnitee, no Indemnifying Party
shall, except with the prior written consent of such Indemnitee, consent to entry
of any judgment or enter into any settlement that includes any injunctive or
other non-monetary relief or any payment of money by such Indemnitee, or that
does not include as an unconditional term thereof the giving by the Person or
Persons asserting such Claim to such Indemnitee of an unconditional release
from all liability on any of the matters that are the subject of such Claim and
an acknowledgement that Indemnitee denies all wrongdoing in connection with
such matters.  The Indemnifying Parties
shall not be obligated to indemnify Indemnitee against amounts paid in
settlement of a Claim if such settlement is effected by such Indemnitee without
the prior written consent of the Company (on behalf of all Indemnifying
Parties), which shall not be unreasonably withheld.  In each case, each Indemnitee seeking
indemnification hereunder will cooperate with the Indemnifying Parties, so long
as an Indemnifying Party is conducting the defense of the Claim, in the
preparation for and the prosecution of the defense of such Claim, including
making available evidence within the control of such Indemnitee, as the case
may be, and persons needed as witnesses who are employed by such Indemnitee, as
the case may be, in each 

 

10

 

case as reasonably
needed for such defense and at cost, which cost, to the extent reasonably
incurred, shall be paid by the Indemnifying Parties.

 

(b)           An Indemnitee shall
notify the Indemnifying Parties in writing of the amount requested for advances
(“Notice of Advances”).  The Indemnifying
Parties hereby agree to advance reasonable costs and Expenses incurred by any
Indemnitee in connection with any Claim (but not for any Claim initiated or
brought voluntarily by an Indemnitee other than a Proceeding pursuant to Section 2(c))
in advance of the final disposition of such Claim without regard to whether
Indemnitee will ultimately be entitled to be indemnified for such costs and
expenses upon receipt of an undertaking by or on behalf of such Indemnitee to
repay amounts so advanced if it shall ultimately be determined in a decision of
a court of competent jurisdiction from which no appeal can be taken that such
Indemnitee is not entitled to be indemnified by the Indemnifying Parties as
authorized by this Agreement.  The
Indemnifying Parties shall make payment of such advances no later than 10 days
after the receipt of the Notice of Advances.

 

(c)           An Indemnitee shall
notify the Indemnifying Parties in writing of the amount of any Claim actually
paid by such Indemnitee (the “Notice of Payment”).  The amount of any Claim actually paid by such
Indemnitee shall bear simple interest at the rate equal to the JPMorgan Chase
Bank, N.A. prime rate as of the date of such payment plus 2% per annum, from
the date the Indemnifying Parties receive the Notice of Payment to the date on
which any Indemnifying Party shall repay the amount of such Claim plus interest
thereon to such Indemnitee.  The
Indemnifying Parties shall make indemnification payments to such Indemnitee no
later than 30 days after receipt of the Notice of Payment.

 

(d)           Determination.  The members of the Company Group intend that
Indemnitee shall be indemnified to the fullest extent permitted by law as
provided in Section 2 and that no Determination shall be required in
connection with such indemnification.  In
no event shall a Determination be required in connection with advancement of
Expenses pursuant to Section 4(b) or in connection with
indemnification for expenses incurred as a witness or incurred in connection
with any Claim or portion thereof with respect to which an Indemnitee has been
successful on the merits or otherwise. 
Any decision that a Determination is required by law in connection with
any other indemnification of an Indemnitee, and any such Determination, shall
be made within 30 days after receipt of a Notice of Claim, as follows:

 

(i)            if no Change in Control has
occurred, (x) by a majority vote of the directors of the
Indemnifying Parties who are not parties to such Claim, even though less than a
quorum, or (y) by a committee of such directors designated by
majority vote of such directors, even though less than a quorum, or (z) if
there are no such directors, or if such directors so direct, by Independent 

 

11

 

Legal Counsel in a written opinion to the Indemnifying
Party and such Indemnitee; and

 

(ii)           if a Change in Control has occurred,
by Independent Legal Counsel in a written opinion to the Indemnifying Parties
(or their successors) and such Indemnitee.

 

The
Indemnifying Parties shall pay all expenses incurred by Indemnitee in
connection with a Determination.

 

(e)           Independent
Legal Counsel.  If there has not been
a Change in Control, Independent Legal Counsel shall be selected by the
board of directors of the Company and approved by Indemnitee (which approval
shall not be unreasonably withheld or delayed). 
If there has been a Change in Control, Independent Legal Counsel
shall be selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld or delayed). 
The Indemnifying Parties shall pay the fees and expenses of Independent
Legal Counsel and indemnify Independent Legal Counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to its
engagement.

 

(f)            Consequences of
Determination; Remedies of Indemnitee. 
The Indemnifying Parties shall be bound by and shall have no right to
challenge a Favorable Determination.  If
an Adverse Determination is made, or if for any other reason the Indemnifying
Parties do not make timely indemnification payments or advances of expenses,
Indemnitee shall have the right to commence a Proceeding before a court of
competent jurisdiction to challenge such Adverse Determination and/or to
require the Indemnifying Parties to make such payments or advances.  An Indemnitee shall be entitled to be
indemnified for all Expenses incurred in connection with such a Proceeding in
accordance with Section 2 and to have such Expenses advanced by the
Company in accordance with Section 4(b). 
If an Indemnitee fails to timely challenge an Adverse Determination, or
if an Indemnitee challenges an Adverse Determination and such Adverse
Determination has been upheld by a final judgment of a court of competent
jurisdiction from which no appeal can be taken, then, to the extent and only to
the extent required by such Adverse Determination or final judgment, the
Indemnifying Parties shall not be obligated to indemnify or advance expenses to
such Indemnitee under this Agreement.

 

(g)           Presumptions;
Burden and Standard of Proof.  In
connection with any Determination, or any review of any Determination, by any
person, including a court:

 

(i)            It shall be a presumption that a
Determination is not required.

 

12

 

(ii)           It shall be a presumption that an
Indemnitee has met the applicable standard of conduct and that indemnification
of such Indemnitee is proper in the circumstances.

 

(iii)          The burden of proof shall be on the
Indemnifying Parties to overcome the presumptions set forth in the preceding
clauses (i) and (ii), and each such presumption shall only be overcome if
the Indemnifying Parties establish that there is no reasonable basis to support
it.

 

(iv)          The termination of any Proceeding by
judgment, order, finding, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption
that indemnification is not proper or that an Indemnitee did not meet the
applicable standard of conduct or that a court has determined that
indemnification is not permitted by this Agreement or otherwise.

 

(v)           Neither the failure of any person or
persons to have made a Determination nor an Adverse Determination by any person
or persons shall be a defense to an Indemnitee’s claim or create a
presumption that an Indemnitee did not meet the applicable standard of conduct,
and any Proceeding commenced by an Indemnitee pursuant to Section 4(f) shall
be de novo with respect to all
determinations of fact and law.

 

5.             Certain
Covenants.  The rights of each
Indemnitee to be indemnified under any other agreement, document, certificate
or instrument or applicable law are independent of and in addition to any
rights of such Indemnitee to be indemnified under this Agreement.  The rights of each Indemnitee and the
obligations of the Indemnifying Parties hereunder shall remain in full force
and effect regardless of any investigation made by or on behalf of such
Indemnitee.  Following the Transactions,
each of the Company Entities, and each of their corporate successors, shall
implement and maintain in full force and effect any and all corporate charter
and by-law provisions that may be necessary or appropriate to enable it to
carry out its obligations hereunder to the fullest extent permitted by
applicable law, including without limitation a provision of its certificate of
incorporation (or comparable organizational document under its jurisdiction of
incorporation) eliminating liability of a director for breach of fiduciary duty
to the fullest extent permitted by applicable law, as amended from time to
time.  So long as the Company or any
other member of the Company Group maintains liability insurance for any
directors, officers, employees or agents of any such Person, the Indemnifying
Parties shall ensure that each Indemnitee serving in such capacity is covered
by such insurance in such a manner as to provide Indemnitee the same rights and
benefits as are accorded to the most favorably insured of the Company’s and the
Company Group’s then current directors and officers.  No Indemnifying Party shall seek or agree to
any order of a court or other governmental authority that would prohibit or
otherwise interfere with the 

 

13

 

performance of any of the Indemnifying Parties’ advancement,
indemnification and other obligations under this Agreement.  For the avoidance of doubt, this Agreement
shall not cover or apply with respect to any Indemnitee in its or its
Affiliates’ capacity as (i) a provider of Debt Financing (or as
agents for the lenders thereunder) or in the performance of services pursuant
to (x) the Engagement Letter, dated March 18, 2007, among
CDRSVM Acquisition Co., Inc., Citigroup Global Markets Inc., J.P. Morgan
Securities Inc. and Banc of America Securities LLC or (y) the
Engagement Letter, dated April 9, 2007, among CDRSVM Acquisition
Co., Inc., Citigroup Global Markets Inc., J.P. Morgan Securities Inc.,
Banc of America Securities LLC, Goldman, Sachs & Co., and Morgan
Stanley & Co., Incorporation, it being understood that the performance
of such services will be subject to the separate indemnification provisions of
the Debt Financing and/or those engagement letters or (ii) a
provider of financial advisory services to the Company in connection with the
Merger pursuant to  the Engagement
Letter, dated March 26, 2007, between the Company and J.P. Morgan
Securities Inc.

 

6.             Notices.  All notices and other communications
hereunder shall be in writing and shall be delivered by certified or registered
mail (first class postage prepaid and return receipt requested), telecopier,
overnight courier or hand delivery, as follows:

 

(a)  If to any Company Entity, to:

 

ServiceMaster Global
Holdings, Inc.

860 Ridge Lake Boulevard

Memphis, Tennessee 
38120

Attention:  Greerson G. McMullen, Esq.

Facsimile:  (901) 597-8025

 

with
a copy to (which shall not constitute notice):

 

Clayton, Dubilier & Rice, LLC

375 Park Avenue

18th Floor

New York, New York  10152

Attention:  Mr. David H. Wasserman

Facsimile:  (212) 893-7061

 

14

 

with a copy to (which shall
not constitute notice) each other Committing Investor.

 

(b)   If to the Investor, to:

 

JPMorgan Chase Funding
Inc.

383 Madison Avenue

New York, New York, 10170

Attention: John M. Buley, Managing Director

Facsimile: (212) 622-9985

 

With a copy to (which shall not constitute notice):

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: John C. Ericson, Esq.

Facsimile: (212) 455-2502

 

or to such other address or such other person as the Company Entities
or the Investor, as the case may be, shall have designated by notice to the
other parties hereto.  All communications
hereunder shall be effective upon receipt by the party to which they are
addressed.  A copy of any notice or other
communication given under this Agreement shall also be given to:

 

Debevoise &
Plimpton LLP

919
Third Avenue

New
York, New York  10022

Attention: 
Franci J. Blassberg, Esq.

Facsimile:  (212) 909-6836

 

7.             Arbitration

 

(a)           Any dispute, claim
or controversy arising out of, relating to, or in connection with this
contract, or the breach, termination, enforcement, interpretation or validity
thereof, including the determination of the scope or applicability of this
agreement to arbitrate, shall be finally determined by arbitration.  The arbitration shall be administered by
JAMS.  If the disputed claim or
counterclaim exceeds $250,000, not including interest or attorneys’ fees, the
JAMS Comprehensive Arbitration Rules and Procedures (“JAMS
Comprehensive Rules”) in effect at the time of the arbitration shall govern
the arbitration, except as they may be modified herein or by mutual written
agreement of the parties.  If no disputed
claim or counterclaim exceeds $250,000, not including interest or attorneys’
fees, the JAMS Streamlined Arbitration Rules and Procedures (“JAMS
Streamlined Rules”) in effect at the time of the arbitration shall 

 

15

 

govern the
arbitration, except as they may be modified herein or by mutual written
agreement of the parties.

 

(b)           The seat of the
arbitration shall be New York, New York. 
The parties submit to jurisdiction in the state and federal courts of
the State of New York for the limited purpose of enforcing this agreement to
arbitrate.

 

(c)           The arbitration
shall be conducted by one neutral arbitrator unless the parties agree
otherwise.  The parties agree to seek to
reach agreement on the identity of the arbitrator within thirty (30) days after
the initiation of arbitration.  If the
parties are unable to reach agreement on the identity of the arbitrator within
such time, then the appointment of the arbitrator shall be made in accordance
with the process set forth in JAMS Comprehensive Rule 15.

 

(d)           The arbitration
award shall be in writing, state the reasons for the award, and be final and
binding on the parties.  The arbitrator
may, in the award, allocate all or part of the costs of the arbitration,
including the fees of the arbitrator and the attorneys’ fees of the prevailing
party.  Judgment on the award may be
entered by any court having jurisdiction thereof or having jurisdiction over
the relevant party or its assets. 
Notwithstanding applicable state law, the arbitration and this agreement
to arbitrate shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1, et
seq.

 

(e)           The parties agree
that the arbitration shall be kept confidential and that  the existence of the proceeding and any
element of it (including but not limited to any pleadings, briefs or other
documents submitted or exchanged, any testimony or other oral submissions, and
any awards) shall not be disclosed beyond the tribunal, JAMS, the parties,
their counsel, accountants and auditors, insurers and re-insurers, and any person
necessary to the conduct of the proceeding. 
The confidentiality obligations shall not apply (i) if
disclosure is required by law, or in judicial or administrative proceedings, or
(ii) as far as disclosure is necessary to enforce the rights
arising out of the award.

 

8.             Governing
Law.  This Agreement shall be
governed in all respects, including validity, interpretation and effect, by the
law of the State of New York, regardless of the law that might be applied under
principles of conflict of laws to the extent such principles would require or
permit the application of the laws of another jurisdiction.

 

9.             Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.

 

10.           Successors;
Binding Effect.  Each Indemnifying
Party will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization 

 

16

 

or otherwise) to all or substantially all of the business and assets of
such Indemnifying Party, by agreement in form and substance satisfactory to the
Investor and its counsel, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that such Indemnifying
Party would be required to perform if no such succession had taken place.  This Agreement shall be binding upon and
inure to the benefit of each party hereto and its successors and permitted
assigns, and each other Indemnitee, but neither this Agreement nor any right,
interest or obligation hereunder shall be assigned, whether by operation of law
or otherwise, by the Company Entities without the prior written consent of the
Investor.

 

11.           Miscellaneous.  The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  This
Agreement is not intended to confer any right or remedy hereunder upon any
Person other than each of the parties hereto and their respective successors
and permitted assigns and each other Indemnitee.  No amendment, modification, supplement or
discharge of this Agreement, and no waiver hereunder shall be valid and binding
unless set forth in writing and duly executed by the party or other Indemnitee
against whom enforcement of the amendment, modification, supplement or
discharge is sought.  Neither the waiver
by any of the parties hereto or any other Indemnitee of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any
party hereto or any other Indemnitee on one or more occasions, to enforce any
of the provisions of this Agreement or to exercise any right, powers or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any provisions hereof, or any
rights, powers or privileges hereunder. 
The rights, indemnities and remedies herein provided are cumulative and
are not exclusive of any rights, indemnities or remedies that any party or
other Indemnitee may otherwise have by contract, at law or in equity or
otherwise, provided that (i) to
the extent that any Indemnitee is entitled to be indemnified by any member of
the Company Group and by any other Indemnitee or any insurer under a policy
procured by any Indemnitee, the obligations of the members of the Company Group
hereunder shall be primary and the obligations of such other Indemnitee or
insurer secondary, and (ii) no member of the Company Group shall be
entitled to contribution or indemnification from or subrogation against such
other Indemnitee or insurer. 
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument.

 

[The remainder of this page has been left blank
intentionally.]

 

17

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their
authorized representatives as of the date first above written.

 

	
   

  	
  JPMORGAN
  CHASE FUNDING INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John M. Buley

  
	
   

  	
   

  	
  Name: John M. Buley

  
	
   

  	
   

  	
  Title: Managing
  Director

  

 

 

	
   

  	
  SERVICEMASTER GLOBAL
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Vice
  President & Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE SERVICEMASTER
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven J. Martin

  
	
   

  	
   

  	
  Name: Steven J. Martin

  
	
   

  	
   

  	
  Title: Senior Vice
  President & Chief Financial OfficerExhibit 10.21

 

SERVICEMASTER GLOBAL HOLDINGS, INC.

STOCK INCENTIVE PLAN

 

Article I

Purpose

 

ServiceMaster Global Holdings, Inc. has established
this stock incentive plan to foster and promote its long-term financial
success.  Capitalized terms have the meaning
given in Article XII.

 

Article II

Powers of the Board

 

Section 2.1            Power
to Grant Awards.  The Board shall
select Employees to receive Awards.  The
Board shall also determine from time to time whether Eligible Directors (or
classes or categories of Eligible Directors) shall receive Director Share
Awards.  The Board shall determine the
terms of each Award, consistent with the Plan.

 

Section 2.2            Administration.  The Board shall be responsible for the
administration of the Plan.  The Board
may prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, provide for conditions and assurances it deems
necessary or advisable to protect the interests of the Company and make all
other determinations necessary or advisable for the administration and
interpretation of the Plan.  Any
authority exercised by the Board under the Plan shall be exercised by the Board
in its sole discretion.  Determinations,
interpretations or other actions made or taken by the Board under the Plan
shall be final, binding and conclusive for all purposes and upon all persons.

 

Section 2.3            Delegation
by the Board.  All of the powers,
duties and responsibilities of the Board specified in this Plan may be
exercised and performed by any duly constituted committee thereof to the extent
authorized by the Board to exercise and perform such powers, duties and
responsibilities, and any determination, interpretation or other action taken
by such committee shall have the same effect hereunder as if made or taken by the
Board.

 

 

Article III

Shares Subject to Plan

 

Section 3.1            Number.  The
maximum number of shares of Common Stock that may be issued under the Plan or
be subject to Awards may not exceed 13,045,000* shares.  The shares of Common Stock to be delivered
under the Plan may consist, in whole or in part, of authorized but unissued
Common Stock that are not reserved for any other purpose.

 

Section 3.2            Canceled,
Terminated or Forfeited Awards.  If
any Award or portion thereof is for any reason forfeited, canceled or otherwise
terminated without exercise, the Common Stock subject to such Award or portion
thereof shall again be available for grant under the Plan.

 

Section 3.3            Adjustment
in Capitalization.  If and to the
extent necessary or appropriate to reflect any Common Stock dividend,
extraordinary dividend, stock split or share combination or any
recapitalization, merger, consolidation, exchange of shares, spin-off
liquidation or dissolution of the Company or other similar transaction
affecting the Common Stock, the Board shall proportionately adjust the number
of shares of Common Stock available for issuance under the Plan and the number,
class, exercise price or other terms of any outstanding Award and/or make other
provisions with respect to the holder or holders of an outstanding Award.

 

Article IV

Stock Purchase or Grant

 

Section 4.1            Awards
and Administration.  The Board may
offer and sell or otherwise grant Common Stock to Participants at such time or
times and subject to such conditions as it shall determine, the terms of which
shall be set forth in a Subscription Agreement.

 

Section 4.2            Minimum
Purchase Price.  Unless otherwise
determined by the Board, the purchase price for any Common Stock to be offered
and sold pursuant to this Article IV shall not be less than the Fair
Market Value on the Grant Date.

 

Section 4.3            Payment.  Unless otherwise determined by the Board, the
purchase price with respect to any Common Stock offered and sold pursuant to
this Article IV shall be paid in cash or other readily available funds
simultaneously with the closing of the purchase of such Common Stock.

 

* Amended as of May 6, 2009. Prior figure was 12,445,000.

 

2

 

Article V

Terms of Options

 

Section 5.1            Grant
of Options.  The Board may grant
Options to Participants at such time or times as it shall determine.  Options granted pursuant to the Plan will not
be “incentive stock options” as defined in the Code.  Each Option granted to a Participant shall be
evidenced by an Option Agreement that shall specify the number of shares of
Common Stock that may be purchased pursuant to such Option, the exercise price
at which shares of Common Stock may be purchased pursuant to such Option, the
duration of such Option (not to exceed the tenth anniversary of the Grant
Date), and such other terms as the Board shall determine.

 

Section 5.2            Exercise
Price.  The exercise price per share
of Common Stock to be purchased upon exercise of an Option shall not be less
than the Fair Market Value on the Grant Date.

 

Section 5.3            Vesting
and Exercise of Options.  Options
shall become vested or exercisable in accordance with the vesting schedule or
upon the attainment of such performance criteria as shall be specified by the
Board on or before the Grant Date.  The
Board may accelerate the vesting or exercisability of any Option, all Options
or any class of Options at any time and from time to time.

 

Section 5.4            Payment.  The Board shall establish procedures
governing the exercise of Options, which procedures shall generally require
that prior written notice of exercise be given and that the exercise price
(together with any required withholding taxes or other similar taxes, charges
or fees) be paid in full in cash, cash equivalents or other readily available funds
at the time of exercise.  Notwithstanding
the foregoing, on such terms as the Board may establish from time to time
following a Public Offering (i) the Board may permit a Participant
to tender any Common Stock such Participant has owned for at least six months
and one day for all or a portion of the applicable exercise price or minimum
required withholding taxes, and (ii) the Board may authorize the
Company to establish a broker-assisted exercise program.  In connection with any Option exercise, the Company
may require the Participant to furnish or execute such other documents as it
shall reasonably deem necessary to (a) evidence such exercise, (b) determine
whether registration is then required under the U.S. federal securities laws or
similar non-U.S. laws, or (c) comply with or satisfy the
requirements of the U.S. federal securities laws, applicable state or non-U.S.
securities laws or any other law.  As a
condition to the exercise of any Option before a Public Offering, a Participant
shall enter into a Subscription Agreement.

 

3

 

Article VI

Termination of Employment

 

Section 6.1            Expiration
of Options Following Termination of Employment.  Unless otherwise determined by the Board on
or before the Grant Date, if a Participant’s employment with the Company
terminates, such Participant’s Options shall be treated as follows:

 

(a)           any unvested Options shall terminate
effective as of such termination of employment (determined without regard to
any statutory or deemed or express contractual notice period); provided
that if the Employee’s employment with the Company is terminated in a Special
Termination (i.e., by reason of the Employee’s death or Disability), any
unvested Options held by the Employee that by their terms would vest solely
based on continued employment shall immediately vest as of the effective date
of such Special Termination;

 

(b)           except in the case of a termination
for Cause, vested Options shall remain exercisable through the earliest of (i) the
normal expiration date, (ii) the three-month anniversary of the
effective date of the Participant’s termination of employment (determined
without regard to any statutory or deemed or express contractual notice
period), (iii) the one-year anniversary in the case of a Special
Termination or a retirement at normal retirement age or later), and (iv) any cancellation pursuant to Section 7.1;
and

 

(c)           in the case of a termination for
Cause, any and all Options held by such Participant (whether or not then vested
or exercisable) shall terminate immediately upon such termination of
employment.

 

Section 6.2            Certain
Rights upon Termination of Employment Prior to a Public Offering.  Each Subscription Agreement shall provide
that the Company and one or more of the Investors shall have successive rights
prior to a Public Offering to purchase all or any portion of a Participant’s
Common Stock upon any termination of employment (determined without regard to
any statutory or deemed or express contractual notice period), at such time and
at a purchase price per share equal to the Fair Market Value as of the date
specified in the Subscription Agreement (or, if the Participant’s employment
termination qualifies as a termination for Cause, for a purchase price per
share equal to the lesser of (i) the Fair Market Value as of the
date specified in the Subscription Agreement and (ii) such
Participant’s per share purchase price). 
The Board may provide in a Subscription Agreement that following a
Participant’s Special Termination, 

 

4

 

retirement at or after normal retirement age or termination of
employment by the Company without Cause in each case prior to a Public
Offering, such Participant may require the Company to repurchase all (but not
less than all) of such Participant’s Common Stock (but excluding any shares
acquired on exercise of an Option), at such time and at a purchase price per
share equal to the Fair Market Value as of the date specified in the
Subscription Agreement, subject to the Company having the ability to do so
under the terms of its financing agreements.

 

Article VII

Change in Control

 

Section 7.1            Accelerated
Vesting and Payment.  Except as
otherwise provided in this Article VII, and unless otherwise provided in
the Award Agreement, upon a Change in Control, (a) each Award that
by its terms would otherwise vest based solely on continued employment shall
vest in full in connection with such Change in Control and each other Award
shall, to the extent it has not or will not by its terms vest before or in
connection with such Change in Control, be canceled, and (b) the
holder of any vested Award (including any Award that vests in connection with
such Change in Control) shall be entitled to receive, in complete satisfaction
of such Award, a payment in cash or readily marketable securities in an amount
or with a value equal to the number of shares of Common Stock covered by such
vested Award times the excess, if any, of the Change in Control Price over any
applicable exercise price or reference price, if any, for such Award.

 

Section 7.2            Alternative
Award.  No cancellation, acceleration
or other payment shall occur with respect to any Award or class or type of
Award if the Board reasonably determines in good faith, prior to the occurrence
of a Change in Control, that such Award shall be honored or assumed, or new
rights substituted therefor following the Change in Control (such honored,
assumed or substituted award, an “Alternative Award”); provided
that any Alternative Award must:

 

(a)           give the Participant who held such
Award rights and entitlements substantially equivalent to or better than the
rights and terms applicable under such Award, including, but not limited to, an
identical or better exercise and vesting schedule, identical or better timing
and methods of payment and, if the Alternative Award or the securities
underlying it are not publicly-traded, identical or better rights following a
termination of employment to require the Company or the acquiror in such Change
in 

 

5

 

Control to repurchase the
Alternative Award or securities underlying such Alternative Award; and

 

(b)           have terms such that if, within two
years following a Change in Control, a Participant’s employment is
involuntarily or constructively terminated (other than for Cause), such
Alternative Award shall immediately vest in full and such Participant shall
receive a cash payment equal to the excess (if any) of the fair market value of
the stock subject to the Alternative Award on the date of surrender over the
price that such Participant would be required to pay to exercise such
Alternative Award or shall have an immediate right to exercise such Alternative
Award and receive shares that are then publicly traded.

 

Section 7.3            Limitation
of Benefits.  If, whether as a result
of accelerated vesting, the grant of an Alternative Award or otherwise, a
Participant would receive any payment, deemed payment or other benefit as a
result of the operation of Section 7.1 or Section 7.2 that, together
with any other payment, deemed payment or other benefit a Participant may
receive under any other plan, program, policy or arrangement, would constitute
an “excess parachute payment” under section 280G of the Code, then, notwithstanding
anything in this Plan to the contrary, the payments, deemed payments or other
benefits such Participant would otherwise receive under Section 7.1 or Section 7.2
shall be reduced to the extent necessary to eliminate any such excess parachute
payment and such Participant shall have no further rights or claims with
respect thereto.  If the preceding
sentence would result in a reduction of the payments, deemed payments or other
benefits a Participant would otherwise receive in more than an immaterial amount,
the Company will use its commercially reasonable best efforts to seek the
approval of the Company’s shareholders in the manner provided for in section
280G(b)(5) of the Code and the regulations thereunder with respect to such
reduced payments or other benefits (if the Company is eligible to do so), so
that such payments would not be treated as “parachute payments” for these
purposes (and therefore would cease to be subject to reduction pursuant to this
Section 7.3), and, if seeking such approval, the Company shall submit all
Participants for whom such approval is sought as a single slate to the
shareholders and not individually.  This Section 7.3
shall cease to apply if the stock of the Company or any direct or indirect
parent or subsidiary of the Company becomes readily tradable on an established
securities market or otherwise within the meaning of 26 CFR 1.280G-1, Q/A-6.

 

6

 

Article VIII

Deferred Share Units

 

The Board may provide for the grant of Deferred Share Units to
Participants at such time or times and subject to such conditions as it shall
determine.  No shares of Common Stock
will be issued at the time an award of Deferred Share Units is made and the
Company shall not be required to set aside a fund for the payment of any such
award.

 

Article IX

Director Share Awards

 

Director Share Awards may have such terms as the Board
shall determine from time to time, and may be granted as part of the retainer
or other fees payable to an Eligible Director or as part of an arrangement that
permits the deferral of payment of such fees, on a mandatory or elective basis,
into the right to receive Common Stock and distributions thereon in the future
(or a cash payment measured by reference to the value thereof).

 

Article X

Authority to Vary Terms or Establish Local Jurisdiction
Plans

 

The Board may vary the terms of Awards to be granted under
the Plan, or establish sub-plans under this Plan to authorize the grant of
awards that have additional or different terms or features from those otherwise
provided for in the Plan, if and to the extent the Board determines necessary
or appropriate to permit the grant of awards that are best suited to further
the purposes of the Plan and to comply with applicable securities laws in a
particular jurisdiction or provide terms appropriately suited for Employees in
such jurisdiction in light of the tax laws of such jurisdiction while being as
consistent as otherwise possible with the terms of Awards under the Plan; provided
that this Article X shall not be deemed to authorize any increase in the
number of Common Stock available for issuance under the Plan set forth in Section 3.1.

 

7

 

Article XI

Amendment, Modification, and Termination of the Plan

 

The Board may terminate or suspend the Plan at any time,
and may amend or modify the Plan from time to time.  No amendment, modification, termination or
suspension of the Plan shall in any manner adversely affect any Award
theretofore granted under the Plan without the consent of the Participant
holding such Award or the consent of a majority of Participants holding similar
Awards (such majority to be determined based on the number of shares covered by
such Awards).  Shareholder approval of
any such amendment, modification, termination or suspension shall be obtained
to the extent mandated by applicable law, or if otherwise deemed appropriate by
the Board.

 

Article XII

Definitions

 

Section 12.1          Definitions.  Whenever used herein, the following terms
shall have the respective meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such first Person; provided that a director, member of management or
other Employee of the Company or any of its Subsidiaries shall not be deemed to
be an Affiliate of the Investors.  For
these purposes, “control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a Person
by reason of ownership of voting securities, by contract or otherwise.

 

“Alternative Award” has the meaning given in Section 7.2.

 

“Award” means an Option, a Deferred Share Unit, a Director Share
Award or an offer and sale or grant of Common Stock pursuant to Article IV,
in each case granted pursuant to the terms of the Plan.

 

8

 

“Award Agreement” means a Subscription Agreement, an Option
Agreement or any other agreement evidencing an Award.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means, unless
otherwise provided in the Award Agreement, any of the following:  (i) the Participant’s commission
of a crime involving fraud, theft, false statements or other similar acts or
commission of any crime that is a felony (or a comparable classification in a
jurisdiction that does not use these terms); (ii) the Participant’s
willful and material or grossly negligent failure to perform his or her
material employment-related duties for the Company and its Subsidiaries; (iii) the
Participant’s material violation of any material Company policy as in effect
from time to time; (iv) the Participant’s engaging in any willful
act or making any public statement that impairs, impugns, denigrates,
disparages or negatively reflects upon the name, reputation or business
interests of the Company or its Subsidiaries; (v) the Participant’s
material breach of any Award Agreement, employment agreement, or
noncompetition, nondisclosure or nonsolicitation agreement to which the
Participant is a party or by which the Participant is bound or (vi) the
Participant’s engaging in any wrongful conduct injurious or detrimental to the
Company or its any of its Subsidiaries. The determination as to whether “Cause”
has occurred shall be made by the Board, which shall have the authority to
waive the consequences under the Plan of the existence or occurrence of any of
the events, acts or omissions constituting “Cause.”  A termination for Cause shall be deemed to
include a determination following a Participant’s termination of employment for
any reason if the circumstances existing prior to such termination would have
entitled the Company or one of its Subsidiaries to have terminated such
Participant’s employment for Cause.

 

“CD&R Investors” means, collectively, (i) Clayton,
Dubilier & Rice Fund VII, L.P., (ii) Clayton, Dubilier &
Rice Fund VII (Co-Investment), L.P., (iii) CDR SVM Co-Investor L.P.,
(iv) CD&R Parallel Fund VII, L.P., and (v) CDR
SVM Co-Investor No. 2 L.P.

 

“Change in Control” means the first to occur of the following
events after the Effective Date:

 

9

 

(i)  the acquisition by any person, entity or “group”
(as defined in Section 13(d) of the Securities Exchange Act of 1934,
as amended) of beneficial ownership of 50% or more of the combined voting power
of the Company’s then outstanding voting securities, other than any such
acquisition by the Company, any of its Subsidiaries, any employee benefit plan
of the Company or any of its Subsidiaries, or by the Investors, or any
Affiliates of any of the foregoing;

 

(ii)  the merger, consolidation or other similar
transaction involving the Company, as a result of which persons who were
stockholders of the Company immediately prior to such merger, consolidation, or
other similar transaction do not, immediately thereafter, own, directly or
indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the merged or consolidated company;

 

(iii)  within any 24-month period, the persons who were
directors of the Company at the beginning of such period (the “Incumbent Directors”)
shall cease to constitute at least a majority of the Board, provided
that any director elected or nominated for election  to the Board by any Investor or a majority of
the Incumbent Directors then still in office shall be deemed to be an Incumbent
Director for purposes of this clause (iii); or

 

(iv)  the sale, transfer or other disposition of all or
substantially all of the assets of the Company to one or more persons or
entities that are not, immediately prior to such sale, transfer or other disposition,
Affiliates of the Company.

 

10

 

Notwithstanding
the foregoing, a Public Offering shall not constitute a Change in Control.

 

“Change in Control Price” means the price per share of Common Stock
offered in conjunction with any transaction resulting in a Change in
Control.  If any part of the offered
price is payable other than in cash, the Change in Control price shall be
determined in good faith by the Board as constituted immediately prior to the
Change in Control.

 

“Code” means the United States Internal Revenue Code of 1986, as
amended, and any successor thereto.

 

“Common Stock” means the common stock, par value U.S. $.01 per
share, of the Company.

 

“Company” means ServiceMaster Global Holdings, Inc., a
Delaware corporation, and any successor thereto, and, for purposes of
determining the status of a Participant’s employment with the “Company” shall
include the Company’s Subsidiaries.

 

“Deferred Share Unit” means the right granted pursuant to the Plan
to receive a share of Common Stock and distributions thereon in the future.

 

“Director Share Award” means an award pursuant to Article IX
to an Eligible Director of Common Stock, an Option or similar Award, a right to
receive Common Stock or a payment measured by reference thereto and
distributions thereon.

 

“Disability” means, unless otherwise provided in an Award
Agreement, a Participant’s long-term disability within the meaning of the
long-term disability insurance plan or program of the Company or any Subsidiary
then covering the Participant, or in the absence of such a plan or program, as
determined by the Board.  The Board’s
reasoned and good faith judgment of Disability shall be final and shall be
based on such competent medical evidence as shall be presented to it by the
Participant or by any 

 

11

 

physician or group of physicians or other competent
medical expert employed by the Participant or the Company to advise the Board.

 

“Effective Date” has the meaning given in Section 13.10.

 

“Eligible Director” means a member of the Board other than an
employee or officer of the Company or any of its Subsidiaries.

 

“Employee” means any executive, officer or other employee of the
Company or any Subsidiary.

 

“Fair Market Value” means, as of any date of determination prior to
a Public Offering, the per share fair market value on such date of a share of
Common Stock as determined in good faith by the Board.  In making a determination of Fair Market
Value, the Board shall give due consideration to such factors as it deems
appropriate, including, but not limited to, the earnings and other financial
and operating information of the Company in recent periods, the potential value
of the Company as a whole, the future prospects of the Company and the
industries in which it competes, the history and management of the Company, the
general condition of the securities markets, the fair market value of
securities of companies engaged in businesses similar to those of the Company,
and any recent valuation of the Common Stock that shall have been performed by
an independent valuation firm (although nothing herein shall obligate the Board
to obtain any such independent valuation). 
The determination of Fair Market Value will not give effect to any
restrictions on transfer of the Common Stock or take into account any control
premium, but shall be determined taking into account the fact that such shares
would represent a minority interest in the Company and are illiquid.  Following a Public Offering, “Fair Market
Value” shall mean, as of any date of determination, the mid-point between the
high and the low trading prices for such date per share of Common Stock as
reported on the principal stock exchange on which the shares of Common Stock
are then listed.

 

“Grant Date” means, with respect to any Award, the date as of which
such Award is granted pursuant to the Plan.

 

12

 

“Investor” means any of (i) BAS Capital Funding
Corporation, BACSVM-A, L.P. and Bank of America Capital Investors V, L.P., (ii) Citigroup
Capital Partners II 2007 Citigroup Investment, L.P., Citigroup Capital Partners
II Employee Master Fund, L.P., Citigroup Capital Partners II Onshore, L.P.,
Citigroup Capital Partners II Cayman Holdings, L.P. and CPE Co-Investment
(ServiceMaster) LLC, (iii) the CD&R Investors, (iv) J.P.
Morgan Ventures Corporation, (vi) any Affiliate of any of the
foregoing that acquires shares of Common Stock, and (vii) any
successor in interest to any thereof.

 

“Option” means the right granted pursuant to the Plan to purchase
one share of Common Stock.

 

“Option Agreement” means an agreement between the Company and a
Participant embodying the terms of any Options granted pursuant to the Plan and
in the form approved by the Board from time to time for such purpose.

 

“Participant”
means any Employee or Eligible Director who is granted an Award.

 

“Person” means any natural person, firm, partnership, limited
liability company, association, corporation, company, trust, business trust,
governmental authority or other entity.

 

“Plan” means this ServiceMaster Global Holdings, Inc. Stock
Incentive Plan.

 

“Public Offering” means the first day as of which (i) sales
of Common Stock are made to the public in the United States pursuant to an
underwritten public offering of the Common Stock, (ii) Common Stock
is otherwise listed for trading on a nationally recognized securities exchange,
or (iii) the Board has determined that shares of the Common Stock
otherwise have become publicly-traded for this purpose.

 

13

 

“Special Termination” means a termination by reason of the
Participant’s death or Disability.

 

“Subscription Agreement” means a stock subscription agreement
between the Company and a Participant embodying the terms of any stock purchase
made pursuant to the Plan and in the form approved by the Board from time to
time for such purpose.

 

“Subsidiary” means any corporation, limited liability company or
other entity, a majority of whose outstanding voting securities is owned,
directly or indirectly, by the Company.

 

Section 12.2          Gender and Number.  Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.

 

Article XIII

Miscellaneous Provisions

 

Section 13.1          Nontransferability of Awards.  Except as otherwise provided herein or as the
Board may permit on such terms as it shall determine, no Awards granted under
the Plan may be sold, transferred, pledged, assigned, hedged, encumbered or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution.  All rights
with respect to Awards granted to a Participant under the Plan shall be
exercisable during the Participant’s lifetime by such Participant only (or, in
the event of the Participant’s Disability, such Participant’s legal
representative).  Following a Participant’s
death, all rights with respect to Awards that were outstanding at the time of
such Participant’s death and have not terminated shall be exercised by his
designated beneficiary or by his estate in the absence of a designated
beneficiary.

 

Section 13.2          Tax Withholding.  The Company or the Subsidiary employing a
Participant shall have the power to withhold up to the minimum statutory
requirement, or to require such Participant to remit to the Company or such
Subsidiary, an amount sufficient to satisfy all U.S. federal, state, local and any
non-U.S. withholding tax or other governmental tax, charge or fee requirements
in respect of any Award granted under the Plan.

 

14

 

Section 13.3          Beneficiary Designation.  Pursuant to such rules and procedures as
the Board may from time to time establish, a Participant may name a beneficiary
or beneficiaries (who may be named contingently or successively) by whom any
right under the Plan is to be exercised in case of such Participant’s
death.  Each designation will revoke all
prior designations by the same Participant, shall be in a form reasonably
prescribed by the Board, and will be effective only when filed by the
Participant in writing with the Board during his lifetime.

 

Section 13.4          No Guarantee of Employment or
Participation.  Nothing in the Plan
or in any agreement granted hereunder shall interfere with or limit in any way
the right of the Company or any Subsidiary to terminate any Participant’s
employment or retention at any time, or confer upon any Participant any right
to continue in the employ or retention of the Company or any Subsidiary.  No Employee or Eligible Director shall have a
right to be selected as a Participant or, having been so selected, to receive
any Awards.

 

Section 13.5          No Limitation on Compensation; No
Impact on Benefits.  Nothing in the
Plan shall be construed to limit the right of the Company or any Subsidiary to
establish other plans or to pay compensation to its Employees or Eligible
Directors, in cash or property, in a manner that is not expressly authorized
under the Plan.  Except as may otherwise
be specifically and unequivocally stated under any employee benefit plan,
policy or program, no amount payable in respect of any Award shall be treated
as compensation for purposes of calculating a Participant’s rights under any
such plan, policy or program.  The
selection of an Employee as a Participant shall neither entitle such Employee
to, nor disqualify such Employee from, participation in any other award or
incentive plan.

 

Section 13.6          No Voting Rights.  Except as otherwise required by law, no
Participant holding any Awards granted under the Plan shall have any right in
respect of such Awards to vote on any matter submitted to the Company’s
stockholders until such time as the shares of Common Stock underlying such
Awards have been issued, and then, subject to the voting restrictions contained
in the Subscription Agreement.

 

Section 13.7          Requirements of Law.  The granting of Awards and the issuance of
shares of Common Stock pursuant to the Plan shall be subject to all applicable
laws, rules and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.  No Awards shall be granted under the Plan,
and no Common Stock shall be issued under the Plan, if such grant or issuance
would result in a violation of applicable law, including U.S. federal
securities laws and any applicable state or non-U.S. securities laws.

 

15

 

Section 13.8          Freedom of Action.  Nothing in the Plan or any Award Agreement
evidencing an Award shall be construed as limiting or preventing the Company or
any Subsidiary from taking any action that it deems appropriate or in its best
interest (as determined in its sole and absolute discretion) and no Participant
(or person claiming by or through a Participant) shall have any right relating
to the diminishment in the value of any Award as a result of any such action.

 

Section 13.9          Unfunded Plan; Plan Not Subject to
ERISA.  The Plan is an unfunded plan
and Participants shall have the status of unsecured creditors of the
Company.  The Plan is not intended to be
subject to the Employee Retirement Income and Security Act of 1974, as amended.

 

Section 13.10       Term of Plan.  The Plan shall be effective as of November 20,
2007, (the “Effective Date”) and shall continue in effect, unless sooner
terminated pursuant to Article XI, until the tenth anniversary of such
date.  The provisions of the Plan shall
continue thereafter to govern all outstanding Awards.

 

Section 13.11       Governing Law.  The Plan, and all agreements hereunder, shall
be governed by and construed in accordance with the law of the State of
Delaware regardless of the application of rules of conflict of law that
would apply the laws of any other jurisdiction.

 

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]