ADT 2005 Annual Report Download - page 61

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal 2005, there were no transactions with companies where our directors were employed and
served as officers that exceeded one percent of the gross revenue of any of these entities or of the
Company, which is the threshold set forth in the Company’s governance principles, as described under
‘‘Corporate Governance’’ above.
The Company offers a relocation program for employees who relocate at the Company’s request
and, in appropriate circumstances, to new employees who relocate in connection with their employment
by the Company. Our program covers the cost, either through direct payment or reimbursement, for
most of the reasonable expenses associated with relocation, including, but not limited to, disposition of
current residence, home finding, home purchase/lease acquisition, temporary living, a miscellaneous
allowance equal to one month’s salary, and transportation and storage of household goods. In addition,
the relocation program provides a tax gross-up on the taxable portion of certain amounts received by or
paid on behalf of the employee under the program.
For our executives, the relocation program includes a buyout provision for the pre-move residence.
Tyco has engaged a relocation company to manage the home sale process. The relocation company
purchases the home either at an appraised market value or at the value offered by a bona fide third-
party purchaser. The relocation company then resells the home, and the Company is responsible for
any costs associated with the subsequent maintenance and sale of the home, including the payment of a
service fee to the relocation company.
In November 2004, in connection with being hired as the President of Tyco Engineered Products
and Services, Thomas Lynch sold his home to the relocation company pursuant to the relocation
program for $755,000. The Company paid Mr. Lynch $12,000 for the loss on the sale of his home and
the estimated gross-up payment of $9,176 pursuant to the terms of the relocation program, as described
above. In June 2005, the relocation company sold Mr. Lynch’s home for $705,000. The Company paid
the relocation company for the loss of $50,000 on the resale of Mr. Lynch’s home pursuant to the
terms of the relocation program.
2006 Proxy Statement 43