ADT 2009 Annual Report Download - page 113

to our shareholders on June 29, 2007 over our tax basis in such common shares, but such gain, if
recognized, generally would not be subject to U.S. federal income tax. However, we would incur
significant U.S. federal income tax liabilities if it ultimately is determined that certain internal
transactions undertaken in connection with the Separation should be treated as taxable transactions.
Risks Relating to Our Jurisdiction of Incorporation in Switzerland
Swiss laws differ from the laws in effect in the United States and may afford less protection to holders of
Tyco’s securities.
Tyco International has changed its place of incorporation from Bermuda to Switzerland. Because
of differences between Swiss law and Bermuda law and differences between the governing documents
of Swiss and Bermuda companies, it may not be possible to enforce court judgments obtained in the
United States against Tyco International based on the civil liability provisions of the federal or state
securities laws of the United States in Switzerland. As a result, in a lawsuit based on the civil liability
provisions of the U.S. federal or state securities laws, U.S. investors may find it difficult to:
• effect service within the United States upon Tyco or its directors and officers located outside the
United States;
• enforce judgments obtained against those persons in U.S. courts or in courts in jurisdictions
outside the United States; and
• enforce against those persons in Switzerland, whether in original actions or in actions for the
enforcement of judgments of U.S. courts, civil liabilities based solely upon the U.S. federal or
state securities laws.
Switzerland and the United States do not have a treaty providing for reciprocal recognition of and
enforcement of judgments in civil and commercial matters. The recognition and enforcement of a
judgment of the courts of the United States in Switzerland is governed by the principles set forth in the
Swiss Federal Act on Private International Law. This statute provides in principle that a judgment
rendered by a non-Swiss court may be enforced in Switzerland only if:
• the foreign court had jurisdiction pursuant to the Swiss Federal Act on Private International
Law;
• the judgment of such foreign court has become final and non-appealable;
• the judgment does not contravene Swiss public policy;
• the court procedures and the service of documents leading to the judgment were in accordance
with the due process of law; and
• no proceeding involving the same position and the same subject matter was first brought in
Switzerland, or adjudicated in Switzerland, or that it was earlier adjudicated in a third state and
this decision is recognizable in Switzerland.
Until January 1, 2011, Tyco must declare and pay dividends in the form of reductions of registered share
capital, which must be stated in Swiss francs, to avoid adverse tax consequences. Any currency
fluctuations between the U.S. dollar and Swiss francs will affect the dollar value of the dividends Tyco
pays.
Under Swiss law, payments that are made to shareholders in the form of a return of registered
share capital do not require the payment of withholding taxes to Swiss authorities, while ordinary
dividend payments require that such taxes be withheld. Swiss corporate law requires that any payments
made to shareholders in the form of a return of capital must be denominated in Swiss francs. After
January 1, 2011, dividend payments may be made out of contributed surplus without having to pay
withholding taxes, and these payments can be denominated and paid in U.S. dollars. Therefore, until
2009 Financials 21