ADT 2008 Annual Report Download - page 90

have a Fair Market Value on the day prior to the date of exercise equal to the applicable
portion of the Exercise Price being so paid, provided that the Board has specifically approved
the repurchase of such Shares (unless such approval is not required by the terms of the
bye-laws of the Company) and the Committee has determined that, as of the date of
repurchase, the Company is, and after the repurchase will continue to be, able to pay its
liabilities as they become due; or
(iii) Provided such payment method has been expressly authorized by the Board or the
Committee in advance and subject to any requirements of applicable law and regulations,
instructing the Company to reduce the number of Shares that would otherwise be issued by
such number of Shares as have in the aggregate a Fair Market Value on the date of exercise
equal to the applicable portion of the Exercise Price being so paid.
(iv) The Committee, in consideration of applicable accounting standards, may waive any
holding period on Shares required to tender pursuant to clause (ii).
(e) Incentive Stock Options. Incentive Stock Options granted under the Plan will be subject
to the following additional conditions, limitations and restrictions:
(i) Eligibility. Incentive Stock Options may be granted only to Employees of the
Company or a Subsidiary that is a subsidiary of the Company within the meaning of Code
Section 424.
(ii) Timing of Grant. No Incentive Stock Option will be granted under the Plan after
the 10-year anniversary of the date on which the Plan is adopted by the Board or, if earlier,
the date on which the Plan is approved by the Company’s stockholders.
(iii) Amount of Award. Subject to Sections 5.3 and 5.4 of the Plan, no more than
10 million Shares may be available for grant in the form of Incentive Stock Options. The
aggregate Fair Market Value (as of the date of grant) of the Shares with respect to which the
Incentive Stock Options awarded to any Employee first become exercisable during any
calendar year may not exceed $100,000 (U.S.). For purposes of this $100,000 (U.S.) limit, the
Employee’s Incentive Stock Options under this Plan and all other plans maintained by the
Company and its Subsidiaries will be aggregated. To the extent any Incentive Stock Option
would exceed the $100,000 (U.S.) limit, the Incentive Stock Option will afterwards be treated
as a Nonqualified Stock Option to the extent required by the Code and underlying regulations
and rulings.
(iv) Timing of Exercise. If the Committee exercises its discretion in the Award
Certificate to permit an Incentive Stock Option to be exercised by a Participant more than
three months after the Participant has ceased being an Employee (or more than 12 months if
the Participant is permanently and totally disabled, within the meaning of Code Section 22(e)),
the Incentive Stock Option will afterwards be treated as a Nonqualified Stock Option to the
extent required by the Code and underlying regulations and rulings. For purposes of this
paragraph (iv), an Employee’s employment relationship will be treated as continuing intact
while the Employee is on military leave, sick leave or another approved leave of absence if the
period of leave does not exceed 90 days, or a longer period to the extent that the Employee’s
right to reemployment with the Company or a Subsidiary is guaranteed by statute or by
contract. If the period of leave exceeds 90 days and the Employee’s right to reemployment is
not guaranteed by statute or contract, the employment relationship will be deemed to have
ceased on the 91st day of the leave.
(v) Transfer Restrictions. In no event will the Committee permit an Incentive Stock
Option to be transferred by an Employee other than by will or the laws of descent and
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