ADT 2008 Annual Report Download - page 89

the sum of the Participant’s age and years of service with the Company is 60 or higher, a pro
rata portion of the Participant’s Stock Options and Stock Appreciation Rights will vest so that
the total number of vested Stock Options or Stock Appreciation Rights held by the Participant
at Termination of Employment (including those that have already vested as of such date) will
be equal to (A) the total number of Stock Options or Stock Appreciation Rights originally
granted to the Participant under each Award multiplied by (ii) a fraction, the numerator of
which is the period of time (in whole months) that have elapsed since the date of grant, and
the denominator of which is four years (or such other applicable vesting term as is set forth in
the Award Certificate). Unless the Award Certificate provides otherwise, such Participant’s
Stock Options and Stock Appreciation Rights will lapse, and will not thereafter be exercisable,
upon the earlier of (A) their original expiration date or (B) the date that is three years after
the date of Termination of Employment.
(iv) Upon the Termination of Employment of a Participant that does not meet the
requirements of paragraphs (ii) or (iii) above, any unvested Stock Options or Stock
Appreciation Rights will be forfeited unless the Award Certificate provides otherwise. Any
Stock Options or Stock Appreciation Rights that are vested as of such Termination of
Employment will lapse, and will not thereafter be exercisable, upon the earlier of (A) their
original expiration date or (B) the date that is six months after the date of such Termination
of Employment, unless the Award Certificate provides otherwise.
(v) Stock Options and Stock Appreciation Rights of a deceased Participant may be
exercised only by the estate of the Participant or by the person given authority to exercise the
Stock Options or Stock Appreciation Rights by the Participant’s will or by operation of law. If
a Stock Option or Stock Appreciation Right is exercised by the executor or administrator of a
deceased Participant, or by the person or persons to whom the Stock Option or Stock
Appreciation Right has been transferred by the Participant’s will or the applicable laws of
descent and distribution, the Company will be under no obligation to deliver Shares or cash
until the Company is satisfied that the person exercising the Stock Option or Stock
Appreciation Right is the duly appointed executor or administrator of the deceased Participant
or the person to whom the Stock Option or Stock Appreciation Right has been transferred by
the Participant’s will or by applicable laws of descent and distribution.
(vi) A Stock Appreciation Right granted in tandem with a Stock Option is subject to the
same terms and conditions as the related Stock Option and will be exercisable only to the
extent that the related Stock Option is exercisable.
(d) Payment of Exercise Price. The Exercise Price of a Stock Option must be paid in full
when the Stock Option is exercised. Stock certificates will be registered and delivered only upon
receipt of payment. Payment of the Exercise Price may be made in cash or by certified check, bank
draft, wire transfer, or postal or express money order, provided that the format is approved by the
Company or a designated third-party administrator. The Committee, in its discretion may also
allow payment to be made by any of the following methods, as set forth in the Award Certificate:
(i) Delivering a properly executed exercise notice to the Company or its agent, together
with irrevocable instructions to a broker to deliver to the Company, within the typical
settlement cycle for the sale of equity securities on the relevant trading market (or otherwise
in accordance with the provisions of Regulation T issued by the Federal Reserve Board), the
amount of sale proceeds with respect to the portion of the Shares to be acquired having a Fair
Market Value on the date of exercise equal to the sum of the applicable portion of the
Exercise Price being so paid;
(ii) Tendering (actually or by attestation) to the Company previously acquired Shares that
have been held by the Participant for at least six months, subject to paragraph (iv), and that
2009 Proxy Statement A-9