ADT 2008 Annual Report Download - page 91

distribution, and any Incentive Stock Option awarded under this Plan will be exercisable only
by the Employee during the Employee’s lifetime.
(f) Exercise of Stock Appreciation Rights. Upon exercise of a Participant’s Stock
Appreciation Rights, the Company will pay cash or Shares or a combination of cash and Shares, in
the discretion of the Committee and as described in the Award Certificate. Cash payments will be
equal to the excess of the Fair Market Value of a Share on the date of exercise over the Exercise
Price, for each Share for which a Stock Appreciation Right was exercised. If Shares are paid for
the Stock Appreciation Right, the Participant will receive a number of whole Shares equal to the
quotient of the cash payment amount divided by the Fair Market Value of a Share on the date of
exercise.
(g) No Repricing. Except in connection with a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange
of shares), the terms of outstanding Awards may not be amended to reduce the Exercise Price of
outstanding Stock Options or Stock Appreciation Rights or to cancel outstanding Stock Options or
Stock Appreciation rights in exchange for cash, other Awards or Stock Options or Stock
Appreciation Rights with an exercise price that is less than the exercise price of the original Stock
Options or Stock Appreciation Rights without shareholder approval.
4.4 Short-Term Performance Bonuses. The Committee may grant Short-Term Performance
Bonuses under the Plan in the form of cash or Shares to the Reporting Persons that the Committee
may from time to time select, in the amounts and pursuant to the terms and conditions that the
Committee may determine and set forth in the Award Certificate, subject to the provisions below:
(a) Performance Cycles. Short-Term Performance Bonuses will be awarded in connection
with a 12-month Performance Cycle, which will be the fiscal year of the Company.
(b) Eligible Participants. Within 90 days after the commencement of a Performance Cycle,
or such shorter period as complies with the applicable requirements of Code Section 162(m) and
applicable regulations thereunder, the Committee will determine the Reporting Persons who will
be eligible to receive a Short-Term Performance Bonus under the Plan.
(c) Performance Measures; Targets; Award Criteria.
(i) Within 90 days after the commencement of a Performance Cycle, or such shorter or
longer period as complies with the applicable requirements of Code Section 162(m) and
applicable regulations thereunder, the Committee will fix and establish in writing (A) the
Performance Measures that will apply to that Performance Cycle; (B) the Target Amount
payable to each Participant; and (C) subject to subsection (d) below, the criteria for
computing the amount that will be paid with respect to each level of attained performance.
The Committee will also set forth the minimum level of performance, based on objective
factors, that must be attained during the Performance Cycle before any Short-Term
Performance Bonus will be paid and the percentage of the Target Amount that will become
payable upon attainment of various levels of performance that equal or exceed the minimum
required level.
(ii) The Committee may, in its discretion, select Performance Measures that measure the
performance of the Company or one or more business units, divisions or Subsidiaries of the
Company. The Committee may select Performance Measures that are absolute or relative to
the performance of one or more comparable companies or an index of comparable companies.
(iii) The Committee, in its discretion, may, on a case-by-case basis, reduce, but not
increase, the amount payable to any Reporting Person with respect to any given Performance
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