ADT 2009 Annual Report Download - page 86

Mr. Breen reaches specified ages. For each of the other named executive officers, severance would
be paid under either the CIC Severance Plan (if the triggering event were a change in control) or
the Severance Plan (for other triggering events). Under the CIC Severance Plan, each of
Messrs. Coughlin and Evard would be entitled to a severance payment of 2.99 times his base salary
and 2.99 times his target bonus for the fiscal year in which termination occurs, and
Messrs. Gursahaney and Oliver would be entitled to 2 times his base salary and target bonus,
subject to caps if the excise tax under IRC Section 280G would apply. Under the Severance Plan,
each named executive officer (except Mr. Breen) would have been entitled to salary continuation
and bonus payments for the 24 months following termination of employment. In addition to the
amounts included in this table, each named executive officer (including Mr. Breen) may be entitled
to a prorated portion of the Annual Performance Bonus for the year in which his employment was
terminated. The bonus payments are included in the Summary Compensation table under the
column heading ‘‘Non-Equity Incentive Compensation,’’ and are discussed above under the
heading ‘‘Elements of Compensation—Annual Incentive Compensation.’’
(2) Upon a triggering event, Mr. Breen’s employment agreement provides for continued participation
in health and welfare plans over the same time period for which severance is payable, subject to an
18-month limit on medical benefits. If continued participation is not practicable, and/or if
Mr. Breen’s severance period is greater than 18 months, an equivalent cash payment is made, with
a tax gross-up on such amounts. For each of the other named executive officers, medical and
dental benefits are provided under the CIC Severance Plan or the Severance Plan, which both
provide for 12 months of continuing coverage, and if the executive’s severance period is greater
than 12 months, the executive will be entitled to a cash payment equal to the projected value of
the employer portion of premiums during the severance period in excess of 12 months. Not
included is the value of the executive disability insurance program that provides salary continuation
of an additional $25,000 ($75,000 for Mr. Breen) above the $15,000 monthly benefit provided by
our broad-based disability plan.
(3) Amounts represent the intrinsic value of unvested Tyco equity awards and stock options that would
vest upon a triggering event. For Mr. Breen, the amounts in columns (b), (c) and (e) include a tax
gross-up payment to the State of New York of $69,834, and the amount in column (g) includes
such a payment of $50,632. Mr. Breen agreed to waive the New York State tax gross-up payments
for compensation that is awarded to him after January 1, 2009.
(4) Amounts in columns (b) and (c) represent the incremental difference in the benefit received due
to a change in control. Under Mr. Breen’s amended employment agreement, if Mr. Breen
voluntarily terminates employment without Good Reason, or his employment is terminated for
Cause prior to age 60, benefits deemed earned under the Supplemental Executive Retirement Plan
will be subject to a reduction of 0.25% for each month or partial month the termination date is
prior to age 60. The amount shown in column (b) does not reflect any reduction in benefits related
to an election to receive payments earlier than age 60.
(5) Amounts represent the life insurance benefit for each of the named executive officers upon the
death of the executive.
(6) In the event of a change in control, Mr. Breen’s employment agreement provides for a full
gross-up of any federal excise tax that might be due under Section 4999 of the Internal Revenue
Code. No other named executive is eligible for this benefit.
(7) For Messrs. Coughlin and Evard, who are retirement eligible based upon age and service, the value
of certain equity awards that would immediately become deliverable upon retirement are not
included because these awards are no longer subject to a significant vesting requirement.
66 2010 Proxy Statement