ADT 2010 Annual Report Download - page 83

(3) For Mr. Breen, severance paid for a qualified termination under a Change in Control was based
on three times his base salary and three times his target bonus for fiscal 2010. For termination due
to other triggering events, severance was based on two times his base salary and two times his
target bonus for fiscal 2010. Under his employment agreement, the multiple will reduce when
Mr. Breen reaches specified ages. In addition, 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. 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 Mr. Coughlin and Ms. Reinsdorf
would be entitled to a severance payment of 2.99 times base salary and 2.99 times 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 possible reduction if the excise tax under
Section 4999 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.’’
(4) 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.
(5) Amounts represent the intrinsic value of unvested Tyco equity awards and stock options that would
vest upon a triggering event. Performance share units are assumed to vest at target for purposes of
these calculations. For Mr. Breen, the amounts in columns (b), (c) and (e) include a tax gross-up
payment to the State of New York of $55,117, and the amount in column (g) includes such a
payment of $34,609. Mr. Breen agreed to waive the New York State tax gross-up payments for
compensation that is awarded to him after January 1, 2009.
(6) Amounts in columns (b), (c) and (e) represent additional amounts (incremental to the amount
disclosed in the Pension Benefits Table) that would be due upon a change in control or
termination without cause triggering event. No incremental benefit would accrue under the
circumstances described under columns (d), (f) or (g). Under Mr. Breen’s 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.
(7) Amounts represent the Company-provided supplemental life insurance benefit for each of the
named executive officers upon the death of the executive.
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