ADT 2008 Annual Report Download - page 92

Cycle, provided, however, that no such reduction will result in an increase in the amount
payable under any Short-Term Performance Bonus of any Key Employee.
(d) Payment, Certification. No Short-Term Performance Bonus will vest with respect to any
Reporting Person until the Committee certifies in writing the level of performance attained for the
Performance Cycle in relation to the applicable Performance Measures. In applying Performance
Measures, the Committee may, in its discretion, exclude unusual or infrequently occurring items
(including any event listed in Sections 5.3 and 5.4 and the cumulative effect of changes in the law,
regulations or accounting rules), and may determine no later than ninety (90) days or such shorter
period as complies with the applicable requirements of Code Section 162(m) and applicable
regulations thereunder, after the commencement of any applicable Performance Cycle to exclude
other items, each determined in accordance with GAAP (to the extent applicable) and as identified
in the financial statements, notes to the financial statements or discussion and analysis of
management.
(e) Form of Payment. Short-Term Performance Bonuses will be paid in cash or Shares. All
such Performance Bonuses shall be paid no later than the 15th day of the third month following
the end of the calendar year (or, if later, following the end of the Company’s fiscal year) in which
such Performance Bonuses are no longer subject to a substantial risk of forfeiture (as determined
for purposes of Code Section 409A), except to the extent that a Participant has elected to defer
payment under the terms of a duly authorized deferred compensation arrangement, in which case
the terms of such arrangement shall govern.
(f) Code Section 162(m). It is the intent of the Company that Short-Term Performance
Bonuses be ‘‘performance-based compensation’’ for purposes of Code Section 162(m), that this
Section 4.4 be interpreted in a manner that satisfies the applicable requirements of Code
Section 162(m)(C) and related regulations, and that the Plan be operated so that the Company
may take a full tax deduction for Short-Term Performance Bonuses. If any provision of this Plan or
any Short-Term Performance Bonus would otherwise frustrate or conflict with this intent, the
provision will be interpreted and deemed amended so as to avoid this conflict.
(g) Acceleration. Each Participant who has been granted a Short-Term Performance Bonus
that is outstanding as of the date of a Change in Control will be deemed to have achieved a level
of performance, as of the date of Change in Control, that would cause all (100%) of the
Participant’s Target Amount to become payable.
4.5 Long-Term Performance Awards. The Committee may grant Long-Term Performance Awards
under the Plan in the form of Performance Units, Restricted Units or Restricted Stock to any
Reporting Person who 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. Long-Term Performance Awards will be awarded in connection with
a Performance Cycle, as determined by the Committee in its discretion, provided, however, that a
Performance Cycle may be no shorter than 12 months and no longer than 5 years.
(b) Eligible Participants. Within 90 days after the commencement of a Performance Cycle,
the Committee will determine the Reporting Persons who will be eligible to receive a Long-Term
Performance Award for the Performance Cycle, provided that the Committee may determine the
eligibility of any Reporting Person other than a Key Employee after the expiration of this 90-day
or longer period.
A-12 2009 Proxy Statement