ADT 2007 Annual Report Download - page 87

PROPOSAL NUMBER THREE—AMENDMENTS TO THE COMPANY’S BYE-LAWS
Shareholders are being asked to consider and approve amendments of our Amended and Restated
Bye-laws. Pursuant to Section 13 of the Companies Act 1981 of Bermuda and Section 66 of our current
Bye-laws, our shareholders must approve any amendments to our Bye-laws by the affirmative vote of a
majority of the total number of votes of the issued shares present in person or represented by proxy at
the Annual General Meeting. The Board has unanimously approved the amendments to the Amended
and Restated Bye-laws and recommends approval by the shareholders.
The Board decided to review our Bye-laws in response to the December 2006 adoption in
Bermuda of the Companies Amendment Act 2006, which amended the Companies Act 1981,
Bermuda’s primary corporate statute. The changes implemented by the Amendment Act include a
provision that allows Bermuda companies, if permitted by their memorandum of association or
bye-laws, to acquire their own shares, to be held as treasury shares in lieu of cancelling those shares.
Treasury shares generally represent shares that were once traded in the market but which have since
been reacquired by the issuing company and are available for cancellation or later reissuance. Treasury
shares are considered to be issued but not outstanding, cannot be voted and accrue no dividends.
Under the Companies Act, companies continue to be able to purchase their own shares for cancellation
so long as their constitutional documents allow it. Our Bye-laws currently permit us to purchase our
shares, but do not expressly permit Tyco to hold the repurchased shares in treasury. The Board believes
that having the ability to hold reacquired shares in treasury affords us valuable corporate finance
flexibility under various circumstances, including in connection with share settlements of employee
benefit plan obligations, and is in our best interest. Consequently, the proposed amendment to the
Bye-laws revises Bye-law 4 by adding a definition of ‘‘Treasury Share,’’ clarifying that all rights attaching
to such treasury shares are suspended and not exercised by us while held in treasury, and permits us
either to cancel shares repurchased by us or hold them in treasury, in either case on terms determined
by the Board.
The Board also proposes to make a technical amendment to Section 41 of the Bye-laws. Section 48
of the Bye-laws defines the position of Controller. However, Section 41 does not include Controller as
one of the officers authorized by the Board. For consistency, the Board proposes to amend Section 41
to add the position of Controller to the list of designated officers.
The proposed revisions to our Bye-laws described above represent the only proposed changes to
our Bye-laws. The proposed changes to the Amended and Restated Bye-laws are attached to this proxy
statement as Appendix A.
The Board recommends that shareholders vote FOR the amendment of our Bye-laws.
OTHER MATTERS
Costs of Solicitation
The cost of solicitation of proxies will be paid by Tyco. Tyco has engaged MacKenzie Partners, Inc.
as the proxy solicitor for the Annual General Meeting for an approximate fee of $9,500. In addition to
the use of the mails, certain Directors, officers or employees of Tyco may solicit proxies by telephone
or personal contact. Upon request, Tyco will reimburse brokers, dealers, banks and trustees or their
nominees for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners
of common shares.
Presentation of Financial Statements
In accordance with Section 84 of the Companies Act 1981 of Bermuda, Tyco’s audited consolidated
financial statements for the fiscal year ended September 28, 2007 will be presented at the Annual
General Meeting. These statements have been approved by Tyco’s Board. There is no requirement
2008 Proxy Statement 67