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Form of Employee Stock Subscription Agreement
This Employee Stock Subscription Agreement, dated as of , 20 , between ServiceMaster Global Holdings, Inc., a Delaware corporation, and the employee whose name appears on the signature page hereof, is being entered into pursuant to the ServiceMaster Global Holdings, Inc. Stock Incentive Plan. The meaning of each capitalized term may be found in Section 10.
The Company and the Employee hereby agree as follows:
Section 1. Purchase and Sale of Common Stock .
(a) In General . Subject to all of the terms of this Agreement, at the Closing the Employee shall purchase, and the Company shall sell, the aggregate number of shares of Common Stock set forth on the signature page hereof (the “ Shares ”), at the purchase price set forth on the signature page hereof (the “ Initial Purchase Price ”). Such Shares constitute “ Initial Shares ” (as defined in the Employment Agreement). The terms of this Agreement shall also apply to any “ Additional Shares ” (as defined in the Employment Agreement, if any Additional Shares are purchased by the Employee).
(b) Condition to Sale . Notwithstanding anything in this Agreement to the contrary, the Company shall have no obligation to sell any Common Stock to any person who is not an employee of the Company or any of its Subsidiaries at the time that such shares of Common Stock are to be sold or who is a resident of a jurisdiction in which the sale of Common Stock to him would constitute a violation of the securities, “blue sky” or other laws of such jurisdiction.
Section 2. The Closing .
(a) Time and Place . The Company shall determine the time and place of the closing of the purchase and sale of the Shares (the “ Closing ”).
(b) Delivery by the Employee . At the Closing, the Employee shall deliver to the Company the aggregate Initial Purchase Price for the Shares.
(c) Delivery by the Company . At the Closing, the Company shall register the Shares in the name of the Employee. If the Shares are certificated, any certificates relating to the Shares shall be held by the Secretary of the Company or his designee on behalf of the Employee.
Section 3. Employee’s Representations and Warranties .
(a) Access to Information, Etc. The Employee represents, warrants and covenants as follows:
(i) the Employee has carefully reviewed the materials furnished to the Employee in connection with the offer and sale of the Shares pursuant to this Agreement;
(ii) the Employee has had an adequate opportunity to consider whether or not to purchase any of the shares of Common Stock offered to the Employee, and to discuss such purchase with the Employee’s legal, tax and financial advisors;
(iii) the Employee understands the terms and conditions that apply to the Shares and the risks associated with an investment in the Shares;
(iv) the Employee has a good understanding of the English language;
(v) the Employee is, and will be at the Closing, an officer or employee of the Company or one of its Subsidiaries; and
(vi) the Employee is, and will be at the Closing, a resident of the jurisdiction indicated as his or her address set forth on the signature page of this Agreement.
(b) Ability to Bear Risk . The Employee represents and warrants as follows:
(i) the Employee understands that the rights of first refusal and other transfer restrictions that apply to the Shares may effectively preclude the transfer of any of the Shares prior to a Public Offering;
(ii) the financial situation of the Employee is such that he or she can afford to bear the economic risk of holding the Shares for an indefinite period;
(iii) the Employee can afford to suffer the complete loss of his or her investment in the Shares; and
(iv) the Employee understands that the Company’s Financing Agreements may restrict the ability of the Company to repurchase the Shares pursuant to Section 5 and that the Company and its Subsidiaries may enter into or amend, refinance or enter into new Financing Agreements without regard to the impact on the Company’s ability to repurchase the Shares.
(c) Voluntary Purchase . The Employee represents and warrants that the Employee is purchasing the Shares voluntarily.
(d) No Right to Awards . The Employee acknowledges and agrees that the sale of the Shares and the grant of any options that are awarded to the Employee in connection with the purchase of the Shares ( i ) are being made on an exceptional basis and are not intended to be renewed or repeated, ( ii ) are entirely voluntary on the part of the Company and its Subsidiaries and ( iii ) should not be construed as creating any obligation on the part of the Company or any of its Subsidiaries to offer any securities in the future.
(e) Investment Intention . The Employee represents and warrants that the Employee is acquiring the Shares solely for his or her own account for investment and not on behalf of any other person or with a view to, or for sale in connection with, any distribution of the Shares.
(f) Securities Law Matters . The Employee acknowledges and represents and warrants that the Employee understands that:
(i) the Shares have not been registered under the Securities Act or any state or non-United States securities or “blue sky” laws;
(ii) it is not anticipated that there will be any public market for the Shares;
(iii) the Shares must be held indefinitely and the Employee must continue to bear the economic risk of the investment in the Shares unless the Shares are subsequently registered under applicable securities and other laws or an exemption from registration is available;
(iv) the Company is under no obligation to register the Shares or to make an exemption from registration available; and
(v) a restrictive legend shall be placed on any certificates representing the Shares that makes clear that the Shares are subject to the restrictions on transferability set forth in this Agreement and a notation shall be made in the appropriate records of the Company or any transfer agent indicating that the Shares are subject to such restrictions.
(g) Voting Proxy . By entering into this Agreement and purchasing the Shares, the Employee hereby irrevocably grants to and appoints the CD&R Investors collectively (to act by unanimous consent) as such Employee’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such Employee, to vote or act by unanimous written consent with respect to such Employee’s Shares. The Employee hereby affirms that the irrevocable proxy set forth in this Section 3(g) will be valid until the consummation of a Public Offering and is given to secure the performance of the obligations of such Employee under this Agreement. The Employee hereby further affirms that the proxy hereby granted shall be irrevocable and shall be deemed coupled with an interest and shall extend for the term of this Agreement, or, if earlier, until the last date permitted by law. For the avoidance of doubt, except as expressly
contemplated by this Section 3(g), the Employee has not granted a proxy to any Person to exercise the rights of such Employee under this Agreement or any other agreement relating to the Shares to which such Employee is a party.
Section 4. Restriction on Transfer of Shares .
(a) In General . Prior to the first to occur of a Public Offering and the third anniversary of the Closing, the Employee shall not Transfer any of the Shares other than ( i ) upon the Employee’s death by will or by the laws of descent and distribution, ( ii ) repurchases by the Company (or an assignee thereof) or the CD&R Investors pursuant to Section 5 hereof, ( ii i) pursuant to Section 6 or Section 7 hereof, or ( iv ) with the Company’s consent. Shares may only be Transferred in a manner that complies with all applicable securities laws and, if the Company so requests, prior to any attempted Transfer, the Employee shall provide to the Company at the Employee’s expense such information relating to the compliance of such proposed Transfer with the terms of this Agreement and applicable securities laws as the Company shall reasonably request, which may include an opinion in form and substance reasonably satisfactory to the Company of counsel regarding such securities law or other matters as the Company shall request (such counsel to be reasonably satisfactory to the Company).
(b) No Transfer That Would Result In Registration Requirements . Prior to a Public Offering, the Shares may not be Transferred if such Transfer would result in the Company becoming subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act (or other similar provision of non-U.S. law) or would increase the risk that the Company would be subject to such reporting requirements as determined by the Company in its sole and absolute discretion. Any purported Transfer in violation of Section 4(a) or this Section 4(b) shall be void ab initio .
Section 5. Options Effective on Termination of Employment Prior to a Public Offering .
(a) Rights of the Company and the Initial Investors . If the Employee’s employment with the Company terminates for any reason prior to a Public Offering, the Company may elect to purchase all or a portion of the Shares by written notice to the Employee delivered on or before the
60th day after the Employee’s termination of employment (the “ First Option Period ”). The CD&R Investors may elect to purchase all or any portion of the Shares that the Company has not elected to purchase by written notice to the Employee delivered at any time on or before the 80th day after the Employee’s termination of employment (the “ Second Option Period ”).
(b) Limited Right of the Employee to Require the Company to Repurchase Shares . If the Employee’s employment with the Company is terminated prior to a Public Offering by the Employee upon Retirement or for Good Reason, or by reason of the Disability or death of the Employee, or is terminated by the Company without Cause (including in connection with a sale by the Company of the division or Subsidiary directly employing the employee), the Employee may require the Company to purchase all (but not less than all) of the Initial Shares and the Additional Shares by written notice delivered to the Company within 30 days following the expiration of the Second Option Period.
(c) Purchase Price . The purchase price per Share pursuant to this Section 5 shall equal the Fair Market Value as of the later of ( i ) the effective date of the Employee’s termina