ADT 2009 Annual Report Download - page 243

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. Shareholders’ Equity (Continued)
number of shares and dollar amount of repurchases made under each of the Company’s repurchase
programs by fiscal year and the remaining amount available for repurchase as of September 25, 2009:
2008 Share 2007 Share 2006 Share 2005 Share
Repurchase Program Repurchase Program Repurchase Program Repurchase Program
Shares Amount Shares Amount Shares Amount Shares Amount
(in millions) ($ in billions) (in millions) ($ in billions) (in millions) ($ in billions) (in millions) ($ in billions)
Approved
Repurchase
Amount ...... $ 1.0 $ 1.0 $ 2.0 $ 1.5
Repurchases
Fiscal 2008 ..... 2.5 0.1 23.1 0.9 — — — —
Fiscal 2007 ..... N/A N/A 1.3 0.1 5.0 0.7 — —
Fiscal 2006 ..... N/A N/A N/A N/A 13.0 1.3 11.0 1.2
Fiscal 2005 ..... N/A N/A N/A N/A N/A N/A 3.0 0.3
Remaining Amount
Available ...... $ 0.9 $ — $ — $ —
18. Share Plans
In connection with the Separation in 2007, share options were modified through the issuance of
Covidien and Tyco Electronics share options. As a result of the one for four share split, share option
exercise prices for the Tyco awards were adjusted. Generally, employee share options converted into
share options of the employer with the exception of corporate employees whose awards converted into
share options of all three companies. The revisions made to the share options as a result of the
Separation constituted a modification which required a comparison of fair values of the share options
immediately before the Separation and the fair values immediately after the Separation. In certain
instances, the fair value immediately after the Separation was higher. As a result, the modification
resulted in incremental compensation cost of $15 million. Of this amount, $0.3 million, $1 million and
$13 million ($11 million in discontinued operations) were recorded in 2009, 2008 and 2007, respectively.
The 2009 and 2008 amounts are included in selling, general and administrative expenses while the 2007
amount is included in separation costs on the Company’s Consolidated Statements of Operations. The
remaining balance will be recorded in continuing operations over the remaining vesting period of the
share options. Except for the changes described, the principal terms of the share options remain
unchanged from the original grant.
Also in connection with the Separation, Tyco employee restricted share awards and restricted stock
units (collectively, ‘‘restricted share awards’’) were modified through the issuance of Covidien and Tyco
Electronics restricted shares or the conversion to shares of the employer. Restricted shares and
restricted share units held by employees in the company in which they were not employed were subject
to accelerated vesting provisions and vested 50% on the first day of trading after the Separation and
50% six months thereafter. This accelerated vesting resulted in $14 million of accelerated compensation
expense for Tyco’s continuing operations. Tyco recorded $12 million as selling, general and
administrative expenses in the fourth quarter of 2007 and recorded the remaining expense in the first
quarter of 2008. Equity awards under the UK Save-As-You-Earn Plan (the ‘‘SAYE Plan’’) were not
modified in connection with the Separation and resulted in additional compensation expense of
2009 Financials 151