ADT 2007 Annual Report Download - page 80

to age 60, the benefit payable shall be reduced by 0.25% for each month the termination date is
prior to age 60. Mr. Breen is vested in the benefit described above. Mr. Breen’s benefit is payable
as an actuarially equivalent lump sum at the later of age 60 or actual termination date, in
accordance with his previous election.
Under the terms of Mr. Lytton’s employment agreement, he is entitled to receive an annual
supplemental retirement benefit payable at the later of age 62 and termination of employment in
the form of a single life annuity equal to 6.25% multiplied by the number of completed and partial
years of service times Mr. Lytton’s final average earnings (highest average of the sum of his
monthly base salary and actual annual bonus (spread equally over the bonus period for which it is
paid) during any consecutive 36 month period within the 60 month period prior to his
termination), reduced by benefits from any defined benefit pension plans maintained by the
Company or its affiliates or by benefits from any other defined benefit pension plans maintained
by any previous employers, and benefits attributable to employer contributions, including matching
contributions to any defined contribution plans maintained by the Company or its affiliates.
Mr. Lytton’s benefits were 100% vested upon termination. In the event of Mr. Lytton’s termination
and subsequent commencement prior to age 62, the benefit payable is reduced by 0.25% per
month for each month the commencement date precedes age 62. Mr. Lytton terminated his
employment on July 6, 2007 for ‘‘good reason’’ in connection with the Separation, and received
two additional years of service as per his employment agreement. The value shown above
represents the present value of the lump sum payment payable to Mr. Lytton in January 2008 in
the amount of $6,556,000.
(2) The amounts in column (d) are calculated as the discounted present value of normal retirement
benefits earned as of the fiscal year end of September 28, payable as a lump sum at ‘‘Normal
Retirement Date’’ for Breen (without regard to projected service, projected salary increases,
pre-retirement mortality or other decrements) and 6 months after the termination date of July 6,
2007 for Lytton. The assumptions used in determining the discounted present value are consistent
with those used to calculate the Company’s retirement plan liabilities as described in Note 17 to
the Company’s audited consolidated financial statements for the fiscal year ended September 28,
2007, and include:
• a discount rate of 6.30%;
• the form of payment is lump sum;
• a prime rate of 8.25% (used to accumulate defined contribution match balance);
• an assumed retirement age of 60 for Mr. Breen and for Mr. Lytton, his age at 6 months
following his actual termination date of July 6, 2007.
60 2008 Proxy Statement