ADT 2011 Annual Report Download - page 311

Proposal 5(c)—Approval of an Ordinary Cash Dividend
As a result of the proposed spin-offs of the Company’s flow control and North American
residential security businesses, which are expected to be completed by October 2012, the Board of
Directors is proposing that shareholders approve dividends through the fourth fiscal quarter of 2012
(ending on September 28, 2012), and conditionally approve dividends through the second fiscal quarter
of 2013. The Board of Directors proposes that shareholders (i) approve an ordinary cash dividend in
the aggregate amount of $0.50 per share out of the Company’s capital contribution reserve on the
Company’s statutory balance sheet in two equal quarterly installments of $0.25 on May 23, 2012 and
August 22, 2012, and (ii) conditionally approve an ordinary cash dividend in the aggregate amount of
$0.50 per share out of the same reserve in two equal quarterly installments of $0.25 on November 15,
2012 and February 20, 2013. The conditional dividends will only be paid if the record date for the
spin-off of both the flow control and North American residential security businesses does not precede
the record date for such cash dividend. Although the aggregate dividend initially paid by the three
entities resulting from the proposed spin-offs is expected to be approximately equal to the dividend
currently being paid by Tyco, the dividend policy of each entity will be subject to the independent
review of its board of directors and will, for entities organized in Switzerland, be subject to shareholder
approval.
Dividend payments shall be made with respect to the outstanding share capital of the Company on
the record date for the applicable dividend payment, which amount excludes any shares held by the
Company or any of its subsidiaries. The deduction to Tyco’s capital contribution reserve, which is
required to be made in Swiss francs, shall be determined based on the aggregate amount of the
dividend and shall be calculated based on the USD / CHF exchange rate in effect on the date of the
Annual General Meeting. The U.S. dollar amount of the dividend shall be capped at an amount such
that the aggregate reduction to the Company’s capital contribution reserve shall not exceed
CHF 885 million (or approximately $2.00 per share based on the USD / CHF exchange rate of
CHF 0.96 per $1.00 in effect on January 09, 2012). To the extent that a dividend payment would exceed
the cap, the U.S. dollar per share amount of the current or future dividends shall be reduced on a pro
rata basis so that the aggregate amount of all dividends paid does not exceed the cap. In addition, the
aggregate reduction to the capital contribution reserve shall be increased for any shares issued, and
decreased for any shares acquired, after the Annual General Meeting and before the record date for
the applicable dividend installment payment. The Board’s proposal is accompanied by a report by the
auditor, Deloitte AG (Z¨ urich), as state supervised auditing enterprise, who will be present at the
meeting. The auditor’s report states that the proposed dividend complies with Swiss law.
The approval of the payments of ordinary cash dividends require the affirmative vote of a relative
majority of the votes cast by the holders of common shares represented at the Annual General Meeting
in person or by proxy, whereby abstentions, broker non-votes, blank and invalid votes are disregarded
in establishing the number of votes cast.