ADT 2006 Annual Report Download - page 54

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In fiscal 2006, 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. 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. 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 2006, the Company paid $1,132 for costs related to the sale of
Mr. Lynch’s residence in fiscal year 2005. The benefit was provided under the Company’s relocation
policy and the cost is considered taxable income to Mr. Lynch and the estimated gross up cost is $759.
42 2007 Proxy Statement