ADT 2008 Annual Report Download - page 93

(c) Performance Measures; Targets; Award Criteria.
(i) Within 90 days after the commencement of a Performance Cycle, the Committee will
fix and establish in writing (A) the Performance Measures that will apply to that Performance
Cycle; (B) with respect to Performance Units, the Target Amount payable to each Participant;
(C) with respect to Restricted Units and Restricted Stock, the Target Vesting Percentage for
each Participant; and (D) subject to subsection (d) below, the criteria for computing the
amount that will be paid or will vest 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 Long-Term Performance
Award will be paid or vest, and the percentage of Performance Units that will become payable
and the percentage of performance-based Restricted Units or Shares of Restricted Stock that
will vest 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 of Long-Term Performance Awards payable to any Reporting Person with
respect to any given Performance Cycle, provided, however, that no reduction will result in an
increase in the dollar amount or number of Shares payable under any Long-Term Performance
Award of a Key Employee.
(d) Payment, Certification. No Long-Term Performance Award 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. Long-Term Performance
Awards awarded to Reporting Persons who are not Key Employees will be based on the
Performance Measures and payment formulas that the Committee, in its discretion, may establish
for these purposes. These Performance Measures and formulas may be the same as or different
than the Performance Measures and formulas that apply to Key Employees.
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 after the commencement of any applicable Performance Cycle or such shorter or
longer period as complies with the applicable requirements of Code Section 162(m) and applicable
regulations thereunder 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. Long-Term Performance Awards in the form of Performance Units
may be paid in cash or full Shares, in the discretion of the Committee, and as set forth in the
Award Certificate. Performance-based Restricted Units and Restricted Stock will be paid in full
Shares. Payment with respect to any fractional Share will be in cash in an amount based on the
Fair Market Value of the Share as of the date the Performance Unit becomes payable. All such
Long-Term Performance Awards 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 Long-Term Performance Awards are no longer subject to a substantial risk of
forfeiture (as determined for purposes of Code Section 409A), except as otherwise provided in the
applicable Award Certificate or to the extent that a Participant has elected to defer payment under
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