ADT 2009 Annual Report Download - page 66

2006, 2007 and 2009 annual equity incentive program. The awards were modified to provide that if
Mr. Coughlin remains employed by the Company on October 7, 2011, then the stock options will
remain exercisable throughout the entire ten-year period commencing on their grant dates, rather than
the three-year window that normally follows retirement, and that any unvested stock options
outstanding on such date (which would consist of 1⁄4 of the stock options granted in connection with the
fiscal 2009 incentive program) would immediately vest.
Executive Benefit Plans and Other Elements of Compensation
All of our named executive officers are eligible to participate in the benefit plans that are available
to substantially all of our other U.S. employees. These benefit programs include Tyco’s tax-qualified
401(k) Retirement Savings and Investment Plans (‘‘RSIPs’’) and its medical insurance, dental insurance,
life insurance, long-term disability and long-term care plans. The retirement programs at Tyco do not
include active defined benefit plans for our named executive officers or for other U.S. executives,
except that Mr. Breen is entitled to pension benefits under his employment agreement. Besides the
plans that are available to substantially all of its U.S. employees, Tyco offers additional limited
perquisites and other benefits to its named executive officers. These perquisites and benefits are
competitive with those provided to similarly situated executives and consistent with our overall
compensation philosophy. They are designed to ensure that we can effectively retain our named
executive officers and compete for new talent while containing costs and administrative burdens. These
additional benefits primarily consist of:
• Tyco’s Supplemental Savings and Retirement Plan (the ‘‘SSRP’’);
• supplemental insurance benefits (executive life, disability and long-term care);
• a cash perquisite allowance program; and
• use of the corporate aircraft.
Tyco Supplemental Savings and Retirement Plan
This is a deferred compensation plan which permits the elective deferral of base salary and
performance-based bonus for all executives earning more than $110,000 per year, a salary category
including all of our Senior Officers; however, not all executives eligible to participate in the SSRP elect
to do so. The SSRP provides our executives with the opportunity to:
• contribute retirement savings in addition to amounts permitted under the RSIPs;
• defer compensation on a tax-deferred basis and receive tax-deferred earnings growth; and
• receive any Company contributions that were reduced under the RSIPs due to IRS
compensation limits.
Other Supplemental Insurance Benefits
These programs provide life insurance, long-term disability insurance and long-term care insurance
to certain Senior Officers. Our executive life insurance program typically provides a death benefit equal
to approximately two times base salary, and allows the Senior Officer to elect to pay additional
premiums into the plan. Our executive disability insurance program ensures salary continuation above
the $15,000 monthly benefit limit provided by our broad-based disability plan. The executive long-term
care insurance program covers certain Senior Officers and their spouses in the event of chronic illness
or disability. Under the program, Tyco pays the long-term care premium for 10 years, after which the
insurance is fully paid. If the executive leaves prior to the end of the 10-year payment period, he or she
has the option to continue making the premium payments to maintain the coverage.
46 2010 Proxy Statement