EXHIBIT 4.4
THE SERVICEMASTER COMPANY
2001 DIRECTORS STOCK OPTION AGREEMENT
April 27, 2001
The Company hereby grants to the Optionee as of the Grant Date, pursuant to
the provisions of the Plan, the Option to purchase the number of Option Shares
specified in the Term Sheet at the Exercise Price per share upon and subject to
the terms and conditions set forth below and in the Term Sheet. Capitalized
terms not defined herein shall have the meanings specified in the Term Sheet or
the Plan.
1. ACCEPTANCE OF AGREEMENT. Optionee shall accept this Agreement by
------------------------- executing one copy of the related Term
Sheet and returning an original execution copy to the Company.
2. TIME AND MANNER OF EXERCISE OF OPTION.
-------------------------------------
2.1. MAXIMUM TERM OF OPTION. In no event may the Option be exercised, in
---------------------- whole or in part, after the Expiration Date.
2.2. EXERCISE OF OPTION. (a) Except as otherwise provided by Sections
------------------- 2.2(b) hereof and by Section 4.6 of the Plan
relating to a Change in Control of the Company, the Option shall become
exercisable inaccordance with the Exercise Schedule set forth in the Term Sheet.
(b) If the Optionee's service as a director of the Company
terminates by reason of Disability or death, the Option shall be immediately
exercisable with respect to all of the Option Shares on the effective date of
the Optionee's termination of service as a director of the Company or date of
death and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative or Permitted Transferees, as the case may be, until and including
the earliest to occur of (i) the date which is two years after the effective
date of the Optionee's termination of service as a director of the Company or
date of death and (ii) the Expiration Date.
(c) If the Optionee's service as a director of the Company
terminates by reason of retirement on or after age 70 or after a minimum of five
years of service as a director of the Company ("Retirement"), or at the request
of the Chairman of the Board, the Option shall continue in accordance with its
terms and, to the extent the Option shall be or become exercisable with respect
to the Option Shares, may thereafter be exercised by the Optionee or the
Optionee's Legal Representative until the Expiration Date.
(d) If the Optionee's service as a director of the Company
terminates for any reason other than Disability, death, Retirement or at the
request of the Chairman of the Board, the Option shall be exercisable only to
the extent it is exercisable on the effective date of the Optionee's termination
of service as a director of the Company and may thereafter be exercised by the
Optionee or the Optionee's Legal Representative until and including the earliest
to occur
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of (i) the date which is one year after the effective date of the
Optionee's termination of service as a director of the Company and (ii) the
Expiration Date.
(e) If the Optionee dies following termination of service as
a director of the Company by reason of Disability, the Option shall be
exercisable only to the extent it is exercisable on the date of death and may
thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earliest to occur of
(i) the date which is two years after the date of death and (ii) the Expiration
Date.
(f) If the Optionee dies following termination of service as a
director of the Company by reason of Retirement or at the request of the
Chairman of the Board, the Option shall be immediately exercisable with respect
to all of the Option Shares on the date of death and may thereafter be exercised
by the Optionee's Legal Representative or Permitted Transferees, as the case may
be, until and including the earliest to occur of (i) the date which is two years
after the date of death and (ii) the Expiration Date.
(g) If the Optionee dies following termination of service as a
director of the Company for any other reason than Disability, Retirement or at
the request of the Chairman of the Board, the Option shall be exercisable only
to the extent it is exercisable on the date of death and may thereafter be
exercised by the Optionee's Legal Representative or Permitted Transferees, as
the case may be, until and including the earliest to occur of (i) the date which
is one year after the date of death and (ii) the Expiration Date.
2.3. METHOD OF EXERCISE. Subject to the limitations set forth
------------------ in this Agreement, the Option may be exercised
by the Optionee (1) by giving written notice to the Company specifying the
number of whole shares of Stock to be purchased and accompanied by payment
therefor in full (or arrangement made for such payment to the Company's
satisfaction) either (i) in cash, (ii) by delivery (either actual delivery or
by attestation procedures established by the Company) of previously owned whole
shares of Stock (which the Optionee has held for at least six months prior to
the delivery of such shares or which the Optionee purchased on the open
market and in each case for which the Optionee has good title, free and clear
of all liens and encumbrances) having an aggregate Fair Market Value,
determined as of the date of exercise, equal to the aggregate purchase price
payable pursuant to the Option by reason of such exercise, (iii) in cash by
a broker-dealer acceptable to the Company to whom the Optionee has submitted an
irrevocable notice of exercise or (iv) a combination of (i) and (ii), and
(2) by executing such documents as the Company may reasonably request.
The Company shall have sole discretion to disapprove of an election pursuant
to any of clauses (ii) - (iv). Any fraction of a share of Stock which would
be required to pay such purchase price shall be rounded down
and the Optionee will be required to pay the fractional share portion to the
next whole share. No certificate representing a share of Stock shall be
delivered until the full purchase price therefor has been paid.
3. ADDITIONAL TERMS AND CONDITIONS OF OPTION.
-----------------------------------------
3.1. NONTRANSFERABILITY OF OPTION. The Option may not be
------------------------------ transferred by the Optionee other
than (i) by will or the laws of descent and distribution or (ii) pursuant to
beneficiary designation procedures approved by the Company. Except to the
extent permitted
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by the foregoing sentence, during the Optionee's lifetime the Option is
exercisable only by the Optionee or the Optionee's Legal Representative. Except
to the extent permitted by the foregoing, the Option may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and
all rights hereunder shall immediately become null and void.
3.2. ADJUSTMENT. In the event of any stock split, stock
---------- dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or
other similar change in capitalization or event, or any distribution to
holders of Common Stock other than a regular cash dividend, the number and class
of securities subject to the Option and the purchase price per security shall be
appropriately adjusted by the Board, such adjustments to be made without an
increase in the aggregate Exercise Price. The decision of the Board regarding
any such adjustment shall be final, binding and conclusive.
3.3. DELIVERY OF CERTIFICATES. Upon the exercise of the
-------------------------- Option, in whole or in part, the Company
shall deliver or cause to be delivered one or more certificates representing
the number of shares purchased against full payment therefor. The Company
shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery.
3.4. OPTION CONFERS NO RIGHTS AS SHAREHOLDER. The Optionee
----------------------------------------- shall not be entitled to any
privileges of ownership with respect to shares of Stock subject to the Option
unless and until purchased and delivered upon the exercise of the Option,
in whole or in part, and the Optionee becomes a shareholder of record with
respect to such delivered shares; and the Optionee shall not be considered a
shareholder of the Company with respect to any such shares not so purchased and
delivered.
3.5. DECISIONS OF BOARD OR A COMMITTEE OF THE BOARD. The Board
---------------------------------------------- or a committee of the
Board shall have the right to resolve all questions which may arise in
connection with the Option or its exercise. Any interpretation,
determination or other action made or taken by the Board or a committee of the
Board regarding the Plan or this Agreement shall be final, binding and
conclusive.
3.6. COMPANY TO RESERVE SHARES. The Company shall at all times
------------------------- prior to the expiration or termination of
the Option reserve and keep available, either in its treasury or out of its
authorized but unissued shares of Stock, the full number of shares subject to
the Option from time to time.
3.7. AGREEMENT SUBJECT TO THE PLAN. This Agreement is subject to the
----------------------------- provisions of the Plan, and shall be
interpreted in accordance therewith. The Optionee hereby acknowledges receipt
of a copy of the Plan.
4. MISCELLANEOUS PROVISIONS.
------------------------
4.1. MEANING OF CERTAIN TERMS. As used herein,the term "Legal
------------------------ Representative" shall include an executor,
administrator, legal representative, guardian or
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similar person and the term "Permitted Transferee" shall include any transferee
(i) pursuant to a transfer permitted under Section 3.1 hereof or (ii) designated
pursuant to beneficiary designation procedures approved by the Company.
4.2. SUCCESSORS. This Agreement shall be binding upon and inure to the
---------- benefit of any successor or successors of the Company and
any person or persons who shall, upon the death of the Optionee, acquire any
rights hereunder in accordance with this Agreement or the Plan.
4.3. NOTICES. All notices, requests or other communications
------- provided for in this Agreement shall be made,
if to the Company, to the Corporate Secretary at The ServiceMaster Company,
One ServiceMaster Way, Downers Grove, IL 60515, and if to the Optionee,
to the address of the Optionee contained in the Company's records.
All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery,
(b) by facsimile with confirmation of receipt, (c) by mailing in the United
States mails to the last known address of the party entitled thereto,
(d) by express courier service or (e) electronic mail delivery system.
The notice, request or other communication shall be deemed to be received
upon personal delivery, upon confirmation of receipt of facsimile
transmission or upon receipt by the party entitled thereto if by United States
mail, express courier service or return receipt of electronic mail delivery
system; provided, however, that if a notice, request or other communication sent
to the Company is not received during regular business hours, it shall be deemed
to be received on the next succeeding business day of the Company.
4.4. GOVERNING LAW. This Agreement, the Option and all determinations
-------------- made and actions taken pursuant hereto and thereto, to
the extent not governed by the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith
without giving effect to principles of conflicts of law.
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