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Deferred Compensation and Salary Continuation Agreement - ServiceMaster Co. and C. William Pollard

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March 21, 2002

Mr. C. William Pollard
1116 N. Stoddard Ave.
Wheaton, IL  60187

Dear Bill:

         On behalf of The ServiceMaster Company and its Board of Directors, we
are writing to you to set forth a restatement and amendment of your Deferred
Compensation and Salary Continuation Agreement dated June 30, 1987, which
agreement superceded your Deferred Compensation and Salary Continuation
Agreement dated November 20, 1980 (collectively, the "Continuation Agreement").
This Agreement reflects the matters approved by the Compensation Committee of
ServiceMaster's Board of Directors on April 24, 2001 and supercedes your
Continuation Agreement in its entirety.

         In consideration of the mutual promises and agreements contained in
this Agreement, ServiceMaster and you agree, as of April 24, 2001, as follows:

         1. Services. Beginning on the first day of the first calendar month
after the date you retire as Chairman of the Board (the "Effective Date") and
until the date of your death, you agree to remain willing to provide consulting
services to ServiceMaster and its subsidiaries. Such services shall be related
to the operation, administration or management of ServiceMaster and its
subsidiaries and shall be furnished as and when the Board of Directors,
Chairman, or Chief Executive Officer may reasonably request and subject to your
reasonable availability, giving due consideration to your other

         2. Compensation. (a) In consideration of your past services to
ServiceMaster and your agreement, as at the date hereof, to provide the services
described in paragraph 1, ServiceMaster shall pay you in equal semi-monthly
installments in accordance with the payroll practices of ServiceMaster,
commencing in the first calendar month after the Effective Date and ending on
the earlier of (1) the last day of the calendar month during which your death
occurs or (2) the date on which you and ServiceMaster agree to terminate this
Agreement, the semi-monthly amount of $12,500.

         (b) You shall be paid your salary as Chairman until the end of the
calendar month in which you cease to serve as Chairman.

        3. Reimbursement of Expenses.  ServiceMaster shall reimburse you for all
unreimbursed expenses properly incurred by you in the course of the performance
of your duties pursuant to this Agreement.

        4. Status.  ServiceMaster agrees that you shall be designated a
Corporate Officer of ServiceMaster during any period you serve as a Director of

        5.  Federal and State Deductions.  ServiceMaster shall deduct from the
amounts payable by ServiceMaster pursuant to paragraphs 2, 10, 16 and 18 the
amount of all required federal and state withholding deductions.

        6.  Insurance Benefits.

        (a) Group Health, Dental, Life, Accidental Death and Dismemberment,
Short-Term Disability and Long-Term Disability Insurance. On and after the
Effective Date and until the date of your death, ServiceMaster shall provide to
you and your dependents group health, dental, life, accidental death and
dismemberment, short-term disability and long-term disability insurance on the
same terms as such insurance is provided to active executive officers of
ServiceMaster and their dependents.

        (b) Compensation Plans. On and after the Effective Date, you shall be
eligible to participate in ServiceMaster's Employee Share Purchase Plan, Profit
Sharing and Retirement Plan and other ServiceMaster plans in accordance with the
terms of those plans.

        7. Office Space and Secretary. On and after the Effective Date and until
the earlier of (1) June 1, 2013 and (2) the date of your death, ServiceMaster
shall provide to you, for your exclusive use, office space of size and
character, and furnished in a manner, comparable to the office space provided to
you immediately prior to the Effective Date. Such office space shall be located
at a site agreed upon by you and the Chairman or Chief Executive Officer of
ServiceMaster. ServiceMaster shall also make available to you, on a full-time
basis, at ServiceMaster's expense, the services of a secretary who is reasonably
acceptable to you. ServiceMaster shall pay, on a current basis, all rents and
other reasonable costs and expenses relating to the operation of such office and
all salary, benefits and other costs and expenses relating to such secretarial

        8. Other Benefits.

        (a)  Automobile. On or after the Effective Date and until the date of
your death, ServiceMaster shall provide you with the use of an
automobile in accordance with ServiceMaster's Executive Company
Vehicle Policy. ServiceMaster shall reimburse you for your
expenses relating to the operation and maintenance of such vehicle
in accordance with such Policy.

        (b)  Club Membership. On and after the Effective Date and until the
date of your death, ServiceMaster shall pay, or reimburse you for,
the annual dues of one club membership designated by you and
approved by the Chairman or Chief Executive Officer of

        9. Stock Options. As of April 24, 2001, each option to purchase
ServiceMaster common stock held by you shall (1) to the extent not exercisable
on the Effective Date, become fully exercisable at the exercise price set forth
in such option, and (2) expire at 5:00 p.m., Central time, on June 1, 2013.
In the event of your death prior to June 1, 2013,


your executor, administrator or similar person, or beneficiary pursuant to any
beneficiary designation procedures approved by ServiceMaster, shall have the
right to exercise each such option prior to the expiration of such option.
In accordance with the foregoing, ServiceMaster and you agree that, as of
April 24, 2001, your options to purchase ServiceMaster common stock are as

                                No. of Options
      Grant Date            Outstanding at 3/1/02           Exercise Price             Expiration Date
      ----------            ---------------------           --------------             ---------------
       10/03/96                    168,750                      10.7778                    6/01/13
       02/13/97                    168,750                      11.2222                    6/01/13
       02/16/98                    112,500                      18.2583                    6/01/13
       01/29/99                    150,000                      18.0750                    6/01/13
       12/10/99                    300,000                      11.5000                    6/01/13
       12/10/99                    479,674                      11.5000                    6/01/13
       05/04/00                      3,605                      13.8700                    6/01/13
       03/16/01                    250,000                      10.5200                    6/01/13

Your options to purchase ServiceMaster common stock shall be modified only to
the extent set forth in this paragraph 9.

        10. Change in Control. (a) In the event a Change in Control (as defined
in the 2001 Directors Stock Plan) occurs while payments are being made pursuant
to paragraph 2 or paragraph 16, then ServiceMaster shall, within 30 days after
the date of the Change in Control, at ServiceMaster's expense, purchase from a
reputable insurance company satisfactory to you (or satisfactory to Judy
Pollard, if you predecease her), a policy which guarantees, from and after the
date of the Change in Control, the full and continuing payment of all the
compensatory and other benefits set forth in this Agreement.

            (b) If the cost of the income protection policy described in
sub-paragraph (a) exceeds the lump sum payment described in this sub-paragraph
(b), then ServiceMaster may elect to pay to you (or to Judy Pollard if you
predecease Judy Pollard), within 30 days after the date of the Change in
Control: (i) a cash, lump sum amount that is the actuarial equivalent of the
aggregate amount payable pursuant to paragraph 2 and/or paragraph 16 had the
Change in Control not occurred; plus (ii) an additional cash, lump sum amount
which is equal to all federal and state income taxes which are attributable to
such clause (i) amount plus all federal and state income taxes which are
attributable to the payment made with respect to this clause (ii). For purposes
of the clause (i) payment, actuarial equivalency shall be determined using the
1983 Group Annuity Mortality Table and the annual rate of interest on 10-year
U.S. Treasury securities for the month preceding the month in which the Change
in Control occurs.

        11. Non-Competition Covenant. (a) Subject to sub-paragraph (e), on and
after the Effective Date and so long as you are being paid pursuant to paragraph
2 or 10 (the "Non-Competition Period"), you shall not in any manner, directly or
indirectly (whether as owner, stockholder, director, officer, employee,
principal, agent, consultant, independent contractor, partner or otherwise), in
any geographic area in which


ServiceMaster or any subsidiary of ServiceMaster is then conducting business,
own, manage, operate, control, participate in, perform services for, or
otherwise carry on, a business similar to or competitive with the business
conducted by ServiceMaster or any subsidiary of ServiceMaster; provided, that
this provision shall not prohibit you from having an ownership or other
interest, including as an officer or other employee, in a ServiceMaster

         (b) Subject to sub-paragraph (e), you further agree that during the
Non-Competition Period you shall not (i) in any manner, directly or indirectly,
induce or attempt to induce any employee of ServiceMaster or any subsidiary of
ServiceMaster to terminate or abandon his or her employment for any purpose
whatsoever, or (ii) in connection with any business to which paragraph 11(a)
applies, call on, service, solicit or otherwise do business with any current or
prospective customer of ServiceMaster or any subsidiary of ServiceMaster.

         (c) Nothing in this paragraph 11 shall prohibit you from being (i) a
stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than one percent (1%) of the outstanding stock of any
class of a corporation, any securities of which are publicly traded, so long as
you have no active participation in the business of such corporation. For
purposes of this sub-paragraph (c), FairWyn Investment Company LLC, an Illinois
limited liability company, shall be deemed to be a diversified investment

         (d) If, at any time of enforcement of this paragraph 11, a court or an
arbitrator holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court or
arbitrator shall be allowed to revise the restrictions contained herein to cover
the maximum period, scope and area permitted by law.

         (e) Anything in the foregoing sub-paragraphs (a) through (d)
notwithstanding, if a Change in Control (as defined in the 2001 Directors Stock
Plan) occurs, the Non-Competition Period shall terminate and all of the
provisions of the foregoing sub-paragraphs (a) through (d) shall lapse and
become of no further force or effect.

         12. Confidentiality. You shall not, at any time, make use of or
disclose, directly or indirectly, any (i) trade secret or other confidential or
secret information of ServiceMaster or any subsidiary of ServiceMaster or (ii)
other technical, business, proprietary or financial information of ServiceMaster
or any subsidiary of ServiceMaster not available to the public generally or to
the competitors of ServiceMaster or any subsidiary of ServiceMaster
("Confidential Information"), except to the extent that such Confidential
Information (a) becomes a matter of public record or is published in a
newspaper, magazine or other periodical available to the general public, other
than as a result of any act or omission of you or (b) is required to be
disclosed by any law, regulation or order of any court or regulatory commission,
department or agency.


         13. Covered Service. In accordance with Article Eleven of
ServiceMaster's Certificate of Incorporation (the "Charter"), the services
provided and to be provided by you under this Agreement, shall be deemed to be a
"Covered Service" within the meaning of subsection 11.1.1 of the Charter and, to
the extent any services are not covered by any of subsection 11.1.1(a), (b) or
(c) of the Charter, this paragraph and the signature of the Chief Executive
Officer on this Agreement shall constitute a designation in writing as required
by Article Eleven of the Charter.

         14. Defense of Claims. You shall cooperate with ServiceMaster in the
defense of any claims that may be made against ServiceMaster, to the extent that
such claims may relate to services performed by you for ServiceMaster or its
subsidiaries. ServiceMaster shall reimburse you for all reasonable expenses in
connection therewith, including travel expenses.

         15. Remedies. You acknowledge that ServiceMaster would be irreparably
injured by a violation of paragraph 11 or paragraph 12 of this Agreement, and
you agree that ServiceMaster shall be entitled to an injunction restraining you
from any actual or threatened breach of paragraph 11 or paragraph 12 of this
Agreement or to any other appropriate equitable remedy without any bond or other
security being required. If you shall be the prevailing party in case of any
dispute or disagreement arising out of or connected with any provision of this
Agreement, you shall be entitled to recover your reasonable attorneys' and all
reasonable expenses incurred in connection with any related proceeding (whether
in court or occurring pursuant to arbitration) including, without limitation,
any and all charges which may be made for the cost of arbitration and the fees
of any arbitrators, together with interest at the statutory rate from the date
on which such obligation shall have arisen.

         16. Survivor Benefits. In the event you predecease Judy Pollard,
ServiceMaster shall pay Judy Pollard in equal semi-monthly installments,
commencing in the first calendar month after the calendar month during which
your death occurs and ending on the last day of the calendar month during which
the death of Judy Pollard occurs, the semi-monthly amount of $8,333.34.

         17. No Other Compensation. You agree that all compensation and other
benefits payable by ServiceMaster under this Agreement shall be in lieu of any
and all compensation otherwise payable to you for service on and after the
Effective Date as a Director, Corporate Officer or other employee of
ServiceMaster. Notwithstanding the foregoing, this paragraph 17 shall not
affect any amounts payable to you or your estate on or after the Effective
Date pursuant to the exercise of any option or under the terms of
ServiceMaster's 401(k) and Deferred Compensation Plans, Long-Term
Performance Award Plan or any similar plan providing for the payment of
deferred compensation.

         18. Continuation Payments. ServiceMaster shall pay you $1,200.00 per
month commencing in the first calendar month after the Effective Date, for a
period of 180 consecutive months. In the event of your death, payments will
continue to your designated beneficiary, Judy Pollard or her estate, until the
expiration of the 180 month



         19. Disability. In the event that you are disabled or suffer from any
mental or physical condition which impairs or prevents you from providing all or
some of the services contemplated hereunder, ServiceMaster shall nonetheless
continue to pay you all of the amounts and to provide you all of the benefits
which are set forth in this Agreement.

         20. Arbitration. Except as provided in paragraph 15 of this Agreement,
any dispute or controversy between ServiceMaster and you, whether arising out of
or relating to this Agreement, the breach of this Agreement, or otherwise, shall
be settled by arbitration in Chicago, Illinois, administered by the American
Arbitration Association, with any such dispute or controversy arising under this
Agreement being so administered in accordance with its Commercial Rules then in
effect, and judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. The arbitrator shall have the authority
to award any remedy or relief that a court of competent jurisdiction could order
or grant, including, without limitation, the issuance of an injunction. However,
either party may, without inconsistency with this arbitration provision, apply
to any court having jurisdiction over such dispute or controversy and seek
interim provisional, injunctive or other equitable relief until the arbitration
award is rendered or the controversy is otherwise resolved. Except as necessary
in court proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief, neither a party nor an arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of ServiceMaster and you. ServiceMaster and you
acknowledge that this Agreement evidences a transaction involving interstate
commerce. Notwithstanding any choice of law provision included in this
Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.

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

         22. Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or five days after deposit in the United States mail,
postage prepaid, addressed (1) if to you, to C. William Pollard, 1116 N.
Stoddard Ave., Wheaton, IL 60187, and if to ServiceMaster, to The ServiceMaster
Company, One ServiceMaster Way, Downers Grove, IL 60515, attention General
Counsel, or (2) to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of


change of address shall be effective only upon receipt.

         23. Governing Law; Validity. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Illinois without regard to the
principle of conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any of the other provisions of this Agreement, which other provisions shall
remain in full force and effect.

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

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

         26. Entire Agreement. Except as otherwise specified herein, this
Agreement and your stock option agreements referred to in paragraph 9 constitute
the entire agreement and understanding between the parties with respect to the
subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related in any manner to the subject matter hereof.

         27. Nonalienation. Benefits payable under this Agreement shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary, prior to actually being received by you, Judy Pollard,
your estate or a beneficiary, as applicable, and any such attempt to dispose of
any right to benefits payable hereunder shall be void.

         28. Termination.  This Agreement may not be terminated except pursuant
to a writing signed by ServiceMaster and you or, in the event you predecease
Judy Pollard, a writing signed by ServiceMaster and Judy Pollard.


        If you are in agreement with this letter, please sign each of the two
copies and return one copy to my attention.

Very truly yours,


By:    /s/ David K. Wessner
     David K. Wessner
     Chairman of the Compensation and Leadership
     Development Committee of the Board of Directors

By:   /s/ Jonathan P. Ward
    Jonathan P. Ward
    President and Chief Executive Officer


By:   /s/ C. William Pollard
    C. William Pollard