Settlement Announced in Lawsuit of Martin v. ServiceMaster

Business Wire, Jan 21, 2002

Business Editors

DOWNERS GROVE, Ill.--(BUSINESS WIRE)--Jan. 21, 2002

The ServiceMaster Company (NYSE: SVM) announced today that the case of Ray D. Martin v. ServiceMaster has been settled out of court. The total compensatory damages and fees paid by the Company were under $1 million.

In September 1999, a jury awarded Mr. Martin compensatory damages and fees of approximately $1 million and punitive damages of $135 million. In June 2000 the trial court reduced the total award to approximately $46 million including punitive damages of $45 million.

In November 2001, The Georgia Court of Appeals held that Mr. Martin's claim for unpaid commissions should have been limited to breach of his employment contract. The Court remanded the case back to the trial court for a new trial, noting that Mr. Martin was not entitled to punitive damages and that ServiceMaster's motion to dismiss the tort claims should have been granted.

"After the Court of Appeals ruling in Georgia it was in the best interest of all parties to resolve this case without further litigation," said Jim Kaput, Senior Vice President and General Counsel for ServiceMaster.

ServiceMaster currently provides outsourcing services for more than 12 million residential and commercial customers, with operating revenue of approximately of $4 billion. The core service capabilities of the Company include lawn care and landscape maintenance, termite and pest control, plumbing, heating and air conditioning services, cleaning, furniture repair and home warranty.

These services are provided through a network of over 4,300 company-owned and franchised service centers and business units operating under leading brands which include Terminix, TruGreen ChemLawn, TruGreen LandCare, American Residential Services, Rescue Rooter, American Mechanical Services, ServiceMaster Clean, American Home Shield, AmeriSpec, Merry Maids, Furniture Medic and ServiceMaster Home Service Center.