ADT 2011 Annual Report Download - page 34

The following table shows the allocation of such reserves in Swiss francs and U.S. dollars
(converted from Swiss francs as of September 30, 2011) as proposed by the Board based on the fiscal
2011 balance sheet:
Swiss francs U.S. dollars
Reserve from capital contributions
a) general reserve .................... CHF 817,677,442 $ 911,224,000
b) reserve for treasury shares ........... CHF 961,278,399 $ 1,071,250,000
c) contributed surplus ................. CHF35,254,539,039 $39,287,800,000
The general reserve, reserve for treasury shares and contributed surplus accounts have historically
been presented separately in the statutory balance sheet. In the proposed ‘‘reserve from capital
contributions,’’ the subaccounts ‘‘general reserve’’ and ‘‘reserve for treasury shares’’ are considered
‘‘legal reserves’’ for Swiss legal purposes, and need to be covered by net assets before the Company is
legally permitted to pay dividends. The ‘‘contributed surplus’’ subaccount shall be considered a legal
reserve for tax purposes only, and, by approving the proposed presentation, shareholders confirm that
this subaccount remains available for distributions to shareholders.
The consolidation of the general reserve, the reserve for treasury shares and the contributed
surplus account under a new ‘‘reserve from capital contributions’’ requires 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.
The Board unanimously recommends that the shareholders vote FOR consolidating the general
reserve, the reserve for treasury shares and the contributed surplus under a new ‘‘reserve from capital
contributions’’ (‘‘Gesetzliche Reserve aus Kapitaleinlagen’’) thereby confirming that the contributed
surplus shall in principle remain available for distribution to shareholders.
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
20 2012 Proxy Statement