ADT 2010 Annual Report Download - page 27

PROPOSAL NUMBER SEVEN—CANCELLATION OF REPURCHASED TREASURY SHARES
In September 2007, July 2008 and September 2010, the Board authorized an aggregate of
$3 billion of share repurchases, of which $500.4 million remains unutilized as of January 3, 2011. Since
September 2007, within the scope of this authorization, the Company has repurchased 63.9 million
shares on the open market and through alternative trading lines. The Board now proposes to cancel
28,088,101 of these shares and to reduce the share capital accordingly. The balance of the shares that
have been repurchased since our redomiciliation in Switzerland, and which are not proposed to be
canceled, are expected to be used in connection with stock incentive plans or in other qualifying
transactions within six years of repurchase. If so used, the Company is exempt from the requirement to
pay Swiss withholding taxes at the time of repurchase.
The Board’s proposal is conditioned on the receipt of a report provided by the auditor,
Pricewaterhouse Coopers AG, as state supervised auditing enterprise in accordance with Article 732
paragraph 2 of the Swiss Code of Obligations, who will be present at the meeting. The auditor’s report
is expected to state that claims by creditors are fully covered notwithstanding the reduction of share
capital pursuant to this proposal.
The reduction of share capital will only be accomplished after publication of the notice to creditors
in accordance with Article 733 of the Swiss Code of Obligations. Such notice to creditors will be
published after the Annual General Meeting in the Swiss Commercial Gazette. Creditors may file
claims and demand payment or security within two months of the date of the third and last publication.
The share capital may only be reduced once the two-month period for filing claims has expired and all
claims filed have been satisfied or secured. In addition, the reduction can only be registered in the
Commercial Register once it has been determined in a notarized document stating that all above
requirements have been fulfilled.
Accordingly the Board of Director proposes:
(1) The cancellation of 28,088,101 shares, all of which have been repurchased under authority of
the Board since the Company redomiciled in Switzerland in March 2009, and the
corresponding reduction of the share capital of the Company from CHF 3’446’822’711.70 by
CHF 188,190,276.70 to CHF 3,258,632,435.00;
(2) To declare, as a result of the audit report prepared in accordance with article 732 paragraph 2
of the Swiss Code of Obligations, that the claims by the creditors are fully covered
notwithstanding the above reduction of the share capital;
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