ADT 2008 Annual Report Download - page 73

Plan (for other triggering events). Under the CIC Severance Plan (both pre- and post-
amendment), each of Messrs. Coughlin and Evard would be entitled to a severance payment of
2.99 times his base salary and 2.99 times his target bonus for the fiscal year in which termination
occurs, and Messrs. Gursahaney and Oliver would be entitled to 2 times his base salary and target
bonus. Under the Severance Plan, each named executive officer (except Mr. Breen) would have
been entitled to salary continuation and bonus payments for the 24 months following termination
of employment. In addition to the amounts included in this table, each named executive officer
(including Mr. Breen) may be entitled to a prorated portion of the Annual Performance Bonus for
the year in which his employment was terminated. The bonus payments are included in the
Summary Compensation table under the column heading ‘‘Non-Equity Incentive Compensation,’’
and are discussed above under the heading ‘‘Elements of Compensation—Annual Incentive
Compensation.’’
(2) Upon a triggering event, Mr. Breen’s pre-amended employment agreement provides for
continuation of health and welfare benefits (or a cash equivalent) for 36 months following the
termination date provided he continues to pay the employee portion of such programs. Under
Mr. Breen’s amended employment agreement, Mr. Breen is entitled to continued participation in
health and welfare plans over the same time period for which severance is payable, subject to an
18-month limit on medical benefits. If continued participation is not practicable, and/or if
Mr. Breen’s severance period is greater than 18 months, an equivalent cash payment is made, with
a tax gross-up on such amounts. For each of the other named executive officers, medical and
dental benefits are provided under the CIC Severance Plan or the Severance Plan. As of
September 26, 2008, under the CIC Severance Plan, each executive was entitled to 12 months of
outplacement services and continuation of medical and dental benefits (or a cash equivalent) for
36 months (24 months for Mr. Gursahaney and Mr. Oliver). Under the Severance Plan, the time
period was 24 months. Effective January 1, 2009, these plans were amended to shorten the time
period for which the executives are entitled to employer-sponsored health and dental benefits
under these plans. Under both plans, the period is now limited to the lesser of the executive’s
remaining severance period and 12 months; if the executive’s severance period is greater than
12 months, the executive will be entitled to a cash payment equal to the projected value of the
employer portion of premiums during the severance period in excess of 12 months.
(3) Amounts represent the intrinsic value of all unvested Tyco equity awards and stock options that
would vest upon a triggering event. For Mr. Breen, the amounts in columns (b), (c) and
(e) include a tax gross-up payment to the State of New York of $42,915, and the amount in
column (g) includes such a payment of $34,760. In addition to the amounts shown in the table,
Messrs. Breen, Coughlin and Evard each hold equity of Tyco Electronics and Covidien, the vesting
of which would have been accelerated from November 22, 2008 upon the occurrence of a
triggering event. The cost to the Company of such acceleration would have been immaterial.
(4) Under Mr. Breen’s pre-amended employment agreement, in circumstances outside of a change in
control, if Mr. Breen voluntarily terminated employment before age 60 without Good Reason,
benefits deemed earned under his pension plan (the Supplemental Executive Retirement Plan)
would have been subject to a reduction of 0.25% for each month or partial month that the
termination date preceded age 60, and an additional 0.25% for each month or partial month that
he elected to commence payment of the benefit prior to age 60. Under Mr. Breen’s amended
employment agreement, if Mr. Breen voluntarily terminates employment without Good Reason, or
his employment is terminated for Cause prior to age 60, benefits deemed earned under the
Supplemental Executive Retirement Plan will be subject to a reduction of 0.25% for each month
or partial month the termination date is prior to age 60. The amount shown in column (b) does
not reflect any reduction in benefits related to an election to receive payments earlier than age 60.
For Mr. Breen, the amounts in column (b) and (c) include a tax gross up payment to the State of
New York of $33,954, and the amount in column (e) includes such a payment of $7,916.
(5) In the event of a change in control, Mr. Breen’s employment agreement provides for a full
gross-up of any federal excise tax that might be due under Section 4999 of the Internal Revenue
Code, including any such tax on the value of any acceleration of unvested equity of Tyco
Electronics and Covidien. No other named executive is eligible for this benefit.
56 2009 Proxy Statement