SERVICEMASTER EMPLOYEE SHARE
PURCHASE PLAN INTERNATIONAL TRUST
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SERVICEMASTER EMPLOYEE SHARE
PURCHASE PLAN INTERNATIONAL TRUST
TABLE OF CONTENTS
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ARTICLE 1.........................................................................................................1
Introduction......................................................................................................1
1.1 Name and Grantor....................................................................................1
1.2 Purpose.............................................................................................2
1.3 Trust Beneficiaries.................................................................................2
ARTICLE 2.........................................................................................................2
Management, Control and Investment of Trust Fund
Assets...................................................................................................2
2.1 The Trust Fund.......................................................................................2
2.2 Irrevocability.......................................................................................3
2.3 Investment Guidelines and Investment of
Principal and Accumulated Income.....................................................................3
2.4 Exercise of Trustee's Duties.........................................................................3
2.5 Disposition of Income................................................................................3
2.6 General Powers.......................................................................................3
2.7 Purchases of Limited Partnership Units of the
Company..............................................................................................5
ARTICLE 3.........................................................................................................5
Separate Beneficiary Accounts.....................................................................................5
ARTICLE 4.........................................................................................................6
Distribution of Trust Assets......................................................................................6
4.1 Distribution of Payments.............................................................................6
4.2 Reversion to the Company.............................................................................7
4.3 Insolvency...........................................................................................7
4.4 Benefits May Not Be Assigned or Alienated............................................................7
ARTICLE 5.........................................................................................................8
Tax Matters.......................................................................................................8
5.1 Nature of Trust.....................................................................................8
5.2 Federal and State Reporting Requirements With
Respect to Distributions to Trust
Beneficiaries.......................................................................................8
5.3 Taxation Prior to Receipt............................................................................8
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TABLE OF CONTENTS (Cont'd)
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ARTICLE 6.........................................................................................................9
Compensation, Expenses and Liability..............................................................................9
6.1 Compensation and Expenses............................................................................9
6.2 Liability of Trustee.................................................................................9
6.3 Indemnification......................................................................................9
ARTICLE 7.........................................................................................................9
Changes of Trustee................................................................................................9
7.1 Resignation and Removal of Trustee...................................................................9
7.2 Appointment of Successor Trustee.....................................................................9
7.3 Duties of Resigned or Removed Trustee and of
Successor Trustee...................................................................................10
7.4 Reports; Approval of Accounts.......................................................................10
ARTICLE 8........................................................................................................10
Amendment, Revocation and Termination............................................................................10
8.1 Amendment and Revocation............................................................................10
8.2 Termination of ESPP.................................................................................11
8.3 Termination of Trust................................................................................11
ARTICLE 9........................................................................................................11
Miscellaneous....................................................................................................11
9.1 Persons Dealing with Trustee Evidence...............................................................11
9.2 Evidence............................................................................................11
9.3 Notice and Waiver of Notice.........................................................................11
9.4 Counterparts........................................................................................11
9.5 Words of Gender.....................................................................................11
9.6 Governing Law.......................................................................................11
9.7 Successors, Etc.....................................................................................11
9.8 Severability........................................................................................12
9.9 Action by Company...................................................................................12
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SERVICEMASTER EMPLOYEE SHARE
PURCHASE PLAN INTERNATIONAL TRUST
This Agreement is made as of the 1st day of January, 1992, (the "Effective
Date"), by and between ServiceMaster Limited Partnership, a Delaware limited
partnership or its subsidiaries (the "Company") and Gary-Wheaton Bank or its
affiliates, an Illinois banking association, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company maintains the ServiceMaster Employee
Share Purchase Plan (the "ESPP") for the benefit of its employees and the
employees of the other members of its controlled group (as described in Section
414(b) and 414(c) of the Internal Revenue Code or 1986 (the "Code")) of which
the Company is a member ("Controlled Group") and who have elected to participate
in the ESPP; and
WHEREAS, ServiceMaster Limited, a U.K. subsidiary of the
Company became a participating employer in the ESPP effective as of July 1, 1991
and other international members of the Controlled Group may participate in the
ESPP in the future ("international employers"); and
WHEREAS, the Company desires to establish and maintain a
trust (the "Trust") as an alternative means for the employees of the
international employers to participate in the ESPP.
NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held and disposed of as follows:
ARTICLE 1
Introduction
1.1 Name and Grantor. This Trust Agreement and Trust hereby
evidenced shall be known as the "ServiceMaster Employee Share Purchase Plan
International Trust." The grantor of the Trust shall be the individual employees
of the Company who have contributions made to the Trust on their behalf pursuant
to the ESPP.
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1.2 Purpose. The Trust has been established by the Company for
the purpose of holding the ESPP assets attributable to the employees of the
international employers, including but not limited to ServiceMaster Limited, who
participate in the ESPP and have directed the Company to make contributions to
the Trust on their behalf pursuant to the terms of the ESPP. A distribution
under the Trust to any Trust Beneficiary shall, for purposes of the ESPP, be
deemed a distribution by the Company to such Trust Beneficiary. Notwithstanding
the preceding, under circumstances described more fully in Section 4.3, the
assets of the Trust shall be applied in partial or total satisfaction of claims
of creditors of the Company in the event of the insolvency of the Company.
1.3 Trust Beneficiaries. Each employee of an international
employer who is participating in the ESPP and on whose behalf a contribution has
been made to the Trust and each other person (including any "Beneficiary") who
may become entitled to Payments under such ESPP shall be a Trust Beneficiary
under this Trust Agreement.
ARTICLE 2
Management, Control and Investment of Trust Fund Assets
2.1 The Trust Fund.
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(a) As used in this section 2.1 and elsewhere in this Trust Agreement,
the term "Trust Fund" means, as of any date, all property of every kind then
held by the Trustee under this Trust Agreement.
(b) Subject to the claims of its creditors, the Company may at anytime
or from time to time make deposits of cash or other property with the Trustee,
which amounts shall become the principal of the Trust to be held, administered
and disposed of by the Trustee as provided in this Trust Agreement.
(c) The principal of the Trust Fund and earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes herein set forth.
(d) Neither any Trust Beneficiary, nor the ESPP, shall have any
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust Fund prior to the time such assets are distributed to such Trust
Beneficiary as Payments as provided in Article 4, and all rights created under
the ESPP and this Trust Agreement shall be mere unsecured contractual rights of
the particular Trust Beneficiaries against the Company and are no greater than
the rights of the other general unsecured creditors of the Company.
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2.2 Irrevocability. The Trust shall be irrevocable.
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2.3 Investment Guidelines and Investment of Principal and
Accumulated Income. Unless the Trustee is otherwise directed by the Company, the
Trustee shall invest the Trust Fund in accordance with the terms and conditions
of the ESPP.
2.4 Exercise of Trustee's Duties. The Trustee shall discharge
its duties hereunder with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims. Notwithstanding the foregoing, however, the
Trustee shall incur no liability to anyone for any action taken with respect to
investments within the contemplation of this Trust Agreement pursuant to Section
2.3 or pursuant to a written direction given by the Company and to that extent
shall be relieved of the Prudent Man Rule for investments.
2.5 Disposition of Income. During the term of this Trust, all
income received by the Trust, net of expenses, shall be accumulated and
reinvested subject to the distribution provisions of Article 4 and Article 5.
2.6 General Powers. Subject to the provisions of sections 2.3
and 2.4, the Trustee shall have the following powers, rights and duties with
respect to the Trust Fund in addition to those provided elsewhere in this Trust
Agreement or by law:
(a) In accordance with the intent of the ESPP that funds be invested
primarily in limited partnership units of the Company, to invest and
reinvest all assets of the Trust Fund in limited partnership units of
the Company;
(b) except as otherwise provided in subsection (a) above, to invest and
reinvest part or all of the Trust Fundin any real or personal property;
(c) to receive and hold all contributions paid to it under the ESPP except
that the Trustee shall have no duty to require any contributions to be
made, or to determine that any of the contributions received comply
with the conditions and limitations of the ESPP;
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(d) to deposit and invest any part or all of the Trust Fund in any common
trust fund or other collective investment fund maintained by the
Trustee for trust investment purposes;
(e) to sell, contract to sell, convey, exchange, transfer and otherwise
deal with all assets in the Trust Fund in such manner, for such
considerations, and on such terms and conditions as the Trustee shall
decide;
(f) to retain in cash (pending investment, reinvestment or distribution of
Payments) any reasonable portion of the Trust Fund and to deposit cash
in any depository, including the banking department of the bank acting
as Trustee;
(g) to compromise, contest, arbitrate, settle or abandon claims and demands
with respect to the Trust Fund;
(h) to begin, maintain or defend any litigation necessary in connection
with the administration of the Trust;
(i) to have all rights of an individual owner with respect to assets in the
Trust Fund, including the power to give proxies, to vote stocks or
limited partnership shares, to join in or oppose (along or jointly with
others) voting trusts, mergers, consolidations, foreclosures,
reorganizations, recapitalization or liquidations, and to exercise or
sell stock or a limited partnership share subscription or conversion
rights;
(j) to hold securities or other property in the name of the Trustee or any
nominee or nominees of the Trustee, or in such other form as the
Trustee shall determine, including corporate depositories, with or
without disclosing the Trust relationship, provided that the records of
the Trustee shall indicate the actual ownership of such securities or
other property;
(k) to participate in and use a book-entry system for the deposit and
transfer of securities;
(l) to retain any funds or property subject to any dispute without
liability for the payment of interest, or to decline to make payment or
delivery thereof until final adjudication is made by a court of
competent jurisdiction;
(m) to employ agents, attorneys, investment counsel, accountants or other
persons for such purposes as the Trustee considers desirable in
connection with the administration of the Trust;
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(n) to furnish the Company with such information in the Trustee's
possession as the Company may need for tax or other purposes; and
(o) to perform any and all other acts which are, in the Trustee's judgment,
necessary or appropriate for the proper and advantageous management,
investment and distribution of the Trust fund in accordance with the
terms of this Trust Agreement.
2.7 Purchases of Limited Partnership-Units of the Company. The
Trustee may purchase limited partnership units of the Company ("shares") on the
open market, by private purchase, from the Company or otherwise. Pursuant to the
terms of the ESPP, in the event shares are purchased in a private purchase, the
purchase price shall be no higher than the then prevailing market price on the
New York Stock Exchange at the time of purchase. In the event of purchase from
the Company, the purchase price will be the closing price for the shares on the
New York Stock Exchange on the date of purchase.
ARTICLE 3
Separate Beneficiary Accounts
The Company shall maintain separate bookkeeping accounts with
respect to each Trust Beneficiary and shall have the responsibility for doing
the necessary accounting and maintaining the necessary records to determine the
value of each Trust Beneficiary's account as of any given valuation date and the
number of shares and cash held on his behalf . The accounts of the respective
Trust Beneficiaries hereunder shall correspond to their respective accounts
under the ESPP, and the Company's obligation to make investments with respect to
each Trust Beneficiary account under the ESPP shall be discharged by the
investment of each such Trust's Beneficiary account hereunder. It is also
intended that the sum of the accounts of all the Trust Beneficiaries hereunder
shall equal the value of the Trust Fund as of any periodic valuation date as
agreed upon by the parties.
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ARTICLE 4
Distribution of Trust Assets
4.1 Distribution of Payments. Subject to section 4.3 and the
other provisions of this Article and subject to the provisions of Article 5, the
Trustee shall distribute all or any portion of Trust Beneficiary's interest
hereunder as directed by the Company ("Payments") provided that:
(a) The Trustee shall make distributions of Payments to
the Trust Beneficiaries from the assets of the Trust
Fund, if and to the extent such assets are available
therefor, as directed by the Company in accordance
with the provisions of the ESPP, and such
distribution may be in the form of cash or shares or
a combination thereof, as directed by the Company.
(b) If acting pursuant to a direction given by the
Company, the Trustee shall have no responsibility to
inquire as to whether the payee Trust Beneficiary is
entitled to any distribution, or as to whether a
distribution is proper, and shall have no liability
for a distribution made in good faith without actual
notice or knowledge of the changed condition or
status of the payee Trust Beneficiary.
(c) If any check for any distribution directed by the
Company to be made from the Trust Fund was mailed by
the Trustee, by regular United States mail, to the
last address of the Trust Beneficiary furnished by
the Company to the Trustee and is returned unclaimed,
the Trustee shall notify the Company of that fact and
' shall redirect the distribution as directed by the
Company. The Trustee shall not be required to search
for or locate a Trust Beneficiary.
(d) The Trustee may reserve such reasonable amount from
any distribution as it shall deem necessary to pay
any estate, inheritance, income or other tax, charge
or assessment attributable to any distribution or may
require such release or other document from any
taxing authority and such indemnity from the Trust
Beneficiary as the Trustee shall deem necessary for
its protection.
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4.2 Reversion to the Company. Subject to the provisions of
section 4.3, the Company shall not have any right or power to direct the Trustee
to return to the Company or to divert to others any of the Trust Fund assets
before all distributions of Payments have been made to each Trust Beneficiary.
4.3 Insolvency. If at any time during the existence of this
Trust the Trustee receives written notice certified by the Board of Directors of
the Managing General Partner of the Company or a notice or order from a court of
competent jurisdiction that the Company has become insolvent as defined under
bankruptcy laws of any applicable jurisdiction, the Trustee shall immediately
suspend the payment of all benefits from the Trust Fund and shall thereafter
hold the Trust Fund in suspense until it receives a court order directing the
disposition of the Trust Fund or until it receives written notice from the
Company certified by the Board of Directors of the Managing General Partner that
the Company has regained solvency. During the period of suspension of the Trust
Fund, to the extent permitted by law, the Trustee may continue to pay out of the
Trust Fund reasonable and necessary expenses of the Trust Fund, including fees
of the Trustee, fees of any agents hired by the Trustee or the Company on behalf
of the Trust Fund, and taxes. The Company shall be obligated to give the Trustee
prompt written notice of an event of insolvency (or bankruptcy), and the Trustee
shall be entitled to rely thereon and to pay all benefits in the absence of
notice of insolvency as set forth herein. Notwithstanding the foregoing, the
Trustee may in its sole discretion rely on any facts which constitute actual
notice of the Company's insolvency. After the Trustee receives notice of Company
solvency, which is certified by the Board of Directors of the Managing General
Partner, the Trustee shall resume all its duties and responsibilities under this
Agreement until and unless it again receives notice of the Company's insolvency.
In the case of any individual who, at the time of a suspension of payment of
benefits was receiving or who during the period of suspension became entitled to
receive benefits, the Trustee may at the direction of the Company make such
additional payments as required to compensate for the period of time during
which payments were suspended.
4.4 Benefits May Not Be Assigned or Alienated. The interests
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of a Trust Beneficiary under the Trust shall not be voluntarily or involuntarily
assigned, alienated or encumbered.
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ARTICLE 5
Tax Matters
5.1 Nature of Trust. This Trust Agreement is intended to
constitute a grantor trust, as described in Section 671 of the Internal Revenue
Code of 1986, as amended (the "Code") (and corresponding provisions of successor
income tax laws) and shall be construed accordingly. The Trust is established
for the benefit of the Trust Beneficiaries. However, neither the Trust
Beneficiaries nor any future designated beneficiary of the Trust Beneficiaries
shall have any right or security interest in any specific asset of the Trust, it
being understood that the assets of the Trust shall be available for the claims
of creditors of the Company in the event of bankruptcy or insolvency.
5.2 Federal and State Reporting Requirements With Respect to
Distributions to Trust Beneficiaries. The Trustee shall withhold Federal, state
and local taxes which are assessable on amounts paid to a Trust Beneficiary at
such rate as may be determined by the Company. The Company's determination of
the amount of withholding, either as the appropriate rate under applicable laws,
or such larger amounts as may be requested by the Trust Beneficiary, shall be
conclusive and may be relied on by the Trustee. The Trustee shall transmit the
amount withheld to the Company, who shall transmit the amount withheld to the
applicable taxing authority. The Trustee shall furnish to the Company, which
shall transmit to the Trust Beneficiary all withholding and benefit payment
information as soon as practicable after the end of each calendar year. The
Company shall provide the Trustee with all necessary information in order for
the Trustee to comply with this paragraph 5.2
5.3 Taxation Prior to Receipt. If the Company determines,
based on evidence submitted to it by the Trust Beneficiary or any other reliable
source, that the Trust Beneficiary is subject to Federal income taxation on any
amounts held in the Trust for his benefit in a calendar year prior to the
calendar year in which he would otherwise receive such benefits, the Company
shall, at the written request of the Trust Beneficiary, notify the Trustee
thereof, and the Company shall direct the Trustee to distribute the amount of
the benefits determined to be taxable to the Trust Beneficiary as soon as
practicable.
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ARTICLE 6
Compensation, Expenses and Liability
6.1 Compensation and Expenses. All reasonable costs, charges
and expenses incurred by the Trustee in connection with the administration of
the Trust, including such reasonable compensation of the Trustee as may be
agreed upon from time to time between the Company and the Trustee, shall be paid
from the Trust Fund unless paid or advanced by the Company. The Trustee shall
also pay such expenses in connection with the administration of the ESPP as may
be directed by the Company and shall be fully protected in making such payments
pursuant to directions of the Company.
6.2 Liability of Trustee. The Trustee shall not be liable for
any act or failure to act under this Trust Agreement unless such action or
failure to act was negligent, in bad faith or willful misconduct. In no event
shall the Trustee be liable as a result of an investment decision made in
accordance with a written request of the Company.
6.3 Indemnification. To the extent permitted by law and
except as provided in paragraph 6.2, the Company hereby agrees to indemnify the
Trustee for, and hold it harmless against, and defend it against any and all
liabilities, losses, costs or expenses (including reasonable attorneys' fees) of
whatsoever kind and nature which may be imposed on, incurred by or asserted
against 'it at any time by reason of carrying out in good faith the
responsibilities delegated to or directions given it under this Trust Agreement,
or by reason of any act or failure to act under this Trust Agreement, except
that no indemnification shall be made for any liability arising out of the
Trustee's negligence, bad faith or willful misconduct.
ARTICLE 7
Changes of Trustee
7.1 Resignation and Removal of Trustee. The Trustee may resign at any time by
giving thirty days' advance written notice to the Company and the Company may
remove a Trustee (or any successor Trustee) by giving thirty days' advance
written notice to the Trustee (or any successor Trustee).
7.2 Appointment of Successor Trustee. In the event of the
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resignation or removal of the Trustee, a successor Trustee shall be appointed by
the Company as soon as possible.
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7.3 Duties of Resigned or Removed Trustee and of Successor
Trustee. If the Trustee resigns or is removed, such resigned or removed Trustee
shall promptly transfer and deliver the Trust Fund to the successor Trustee.
Within 120 days, the resigned or removed Trustee shall furnish to the Company
and the successor Trustee an account of the administration of the Trust from the
date of the last account with respect to the resigned or removed Trustee
(showing all receipts, disbursements, distributions and other transactions and
all investments and the values thereof) and any records or reports which the
resigned or removed Trustee may possess which the Company may require to
administer the ESPP. Each successor Trustee shall succeed to the title to the
Trust Fund vested in its predecessor without the signing or filing of any
further instrument, but any resigned or removed Trustee shall execute all
documents and do all acts necessary to vest such title of record in any
successor Trustee. Each successor Trustee shall have all the powers, rights and
duties conferred by this Trust Agreement as if originally named as Trustee. No
successor Trustee shall be personally liable for any act or failure to act of a
predecessor Trustee.
7.4 Reports: Approval of Accounts. The Trustee shall periodically furnish to the
Company written reports showing all investments of the Trust Fund and its value
and all receipts, disbursements, distributions and other transactions that have
occurred during the reporting period and other relevant information with respect
to the Trust Fund. All accounts, books and records with respect to the Trust
Fund shall be open to inspection and audit at all reasonable times by
representatives of the Company. The account of the Trustee may be approved by
any Company by written notice delivered to the Trustee or by failure to object
to the account by written notice delivered to the Trustee within twelve months
of the date upon which the account was delivered to the Company. The approval of
an account shall constitute a full and complete discharge of the Trust by the
Company as to all matters set forth in that account as if the account had been
settled by a court of competent jurisdiction in an action or proceeding to which
the Company and the Trustee were parties. In no event shall the Trustee be
precluded from having its accounts settled by judicial proceeding.
ARTICLE 8
Amendment, Revocation and Termination
8.1 Amendment and Revocation. This Trust Agreement may be
amended from time to time by the Company, except to make the Trust revocable or
to alter section 8.3 of this Article.
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8.2 Termination of ESPP. If the ESPP is terminated, all of
the provisions of the Trust evidenced by this Trust Agreement, as applied to the
ESPP, nevertheless shall continue in effect until the entire Trust Fund has been
distributed by the Trustee.
8.3 Termination of Trust. The trust shall not terminate until
the date on which no Trust Beneficiary is entitled to any additional Payments.
ARTICLE 9
Miscellaneous
9.1 Persons Dealing with Trustee. No person dealing with the
Trustee shall be required to see to the application of any money paid or
property delivered to the Trustee, or to determine whether or not the Trustee is
acting pursuant to any authority granted under this Trust Agreement.
9.2 Evidence. Evidence required of anyone under this Trust
Agreement may be by certificate, affidavit, document or other instrument which
the person acting in reliance thereon considers pertinent and reliable, and
signed, made or presented by the proper party.
9.3 Notice and Wavier of Notice. Any notice or document
required to be filed under this Trust Agreement will be property filed if
delivered or mailed by registered mail, postage prepaid, and: (i) if to the
Company, in care of the Secretary at the Company's principal business office and
(ii) if to the Trustee, at its principal business office. Any notice required
under this Trust Agreement may be waived by the person entitled thereto.
9.4 Counterparts. This Trust Agreement may be executed in any
number of counterparts each of which shall be deemed an original, and no other
counterpart need be produced.
9.5 Words of Gender. Words of the masculine gender may, and
where necessary shall, be construed as denoting the feminine gender.
9.6 Governing Law. This Trust Agreement shall be construed
and administered according to the laws of the State of Illinois.
9.7 Successors. The provisions of this Trust Agreement shall
be binding on and inure to the benefit of the Trustee and any successor Trustee
and upon the Company and any successor of the Company which shall acquire
directly or indirectly by merger, consolidation, purchase or otherwise all or
substantially all of the assets, business or stock of the Company.
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9.8 Severability. Any provision of this Trust Agreement
prohibited by law shall be ineffective to the extent of any such prohibition
without invalidating the remaining provisions hereof.
9.9 Action by Company. Any action taken by the Company in
accordance with the terms of this Trust Agreement should be by resolution of the
Board of Directors of the Managing General Partner of the Company, or by any
person or persons authorized by resolution of such Board of Directors.
IN WITNESS WHEREOF, the Company and the Trustee have caused
this Trust Agreement to be signed and attested to by their duly authorized
officers the day and year first above written.
SERVICEMASTER LIMITED PARTNERSHIP GARY-WHEATON BANK, as
By SERVICEMASTER MANAGEMENT Trustee
CORPORATION
By: ____________________ By: _______________________
Its: _________________ Its: __________________
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