ADT 2006 Annual Report Download - page 25

(7) During fiscal year 2006, the company made matching charitable contributions under the Company’s
Employee Gift Matching Program for the following director charitable contributions in the
following matching amounts: Mr. Blair—$1,000; Mr. Krol—$10,000; Mr. McCall—$2,200;
Ms. Wijnberg—$15,000.
Director Deferred Compensation Plan
Under the Director Deferred Compensation Plan (‘‘Deferred Compensation Plan’’), each
non-employee director may make an election to defer some or all of his or her cash remuneration for
that year. Under the Deferred Compensation Plan, an unfunded deferred compensation bookkeeping
account is established for each director who elects to defer cash remuneration otherwise payable during
the year. The director may choose the deemed investment of amounts credited to his/her deferred
compensation account into the Interest Income Measurement Fund or the U.S. Equity Index
Commingled Measurement Fund. Earnings and/or losses on the Measurement Funds mirror the
investment results of funds available under the Company’s 401(k) retirement savings and investment
plans. Each director may elect to receive a distribution of the amounts credited to his or her deferred
compensation account in a lump sum cash payment either at termination from the Board or at a future
date that is at least five years following the year it is deferred. Any unpaid balances will be distributed
to a director upon the later of his or her attainment of age 70 and his or her termination from the
Board. Mr. McDonald deferred his director fees for the first quarter of fiscal year 2006, but did not
defer fees during calendar year 2006.
Fiscal 2007 Compensation
In July 2006, the Compensation and Human Resources Committee independently retained
consulting firm to conduct a review of the current Board compensation structure and benchmarks
relative to the compensation for the directors of our peer companies. Based on the results of the
review, the Board decided not to change director compensation for fiscal 2007. The annual cash
retainer for fiscal 2007 remains at $80,000. The Lead Director and Chair of the Audit Committee will
each receive an additional annual fee of $20,000 and the Chairs of the Compensation and Human
Resources Committee and the Nominating and Governance Committee will each receive an additional
annual fee of $15,000, in recognition of the responsibilities required in these roles. All retainers and
fees are payable quarterly and are pro-rated if the director begins or ends Board service during the
quarter.
In addition to the cash retainers and fees, on October 2, 2006, each director received a grant of
DSUs under the 2004 Stock and Incentive Plan with a value of $120,013 based on the average fair
market value of a common share for the 60 calendar day period immediately preceding the grant date.
The value per share was $26.38 and each Board member was credited with 4,549 DSUs. Under the
terms of the grant agreements, each DSU is vested when granted and will be payable in the form of
Tyco common shares within 30 days following termination of service as a Board member. Dividend
equivalents are credited to each Board member’s DSU account at the same time and in the same
amount as dividends that are paid to shareholders on common shares and increase the number of
DSUs in a director’s account based on the fair market value of a common share on the dividend
payment date.
2007 Proxy Statement 13