ADT 2011 Annual Report Download - page 77

For the other named executive officers, the CIC Severance Plan provides these benefits only
during the 60-day period prior to and the two-year period following a Change in Control. The CIC
Severance Plan generally defines ‘‘Cause’’ as (i) a material violation of any fiduciary duty owed to the
Company; (ii) conviction of, or entry of a plea of nolo contendere with respect to, a felony or
misdemeanor; (iii) dishonesty; (iv) theft; or (v) other egregious conduct, that is likely to have a
materially detrimental impact on the Company and its employees. Whether an executive’s termination
is due to ‘‘Cause’’ under the CIC Severance Plan is determined by the administrator of the CIC
Severance Plan.
The CIC Severance Plan generally defines ‘‘Good Reason Resignation’’ as any retirement or
termination of employment by an executive that is not initiated by the Company and that is caused by
any one or more of the following events, provided the event occurs in the period beginning 60 days
before the change in control date and ending two years after that date:
• Without the executive’s written consent, the Company assigns the executive any duties
inconsistent in any material respect with his or her authority, duties or responsibilities, or any
other action by the Company which results in a significant diminution in such authority, duties
or responsibilities;
• Without the executive’s written consent, the Company makes a material change in the
geographic location at which the executive performs services to a location that is more than 60
miles from his or her existing principal place of employment;
• Without the executive’s written consent, the Company materially reduces the executive’s base
compensation and benefits, taken as a whole; or
• The Company fails to obtain a satisfactory agreement from any successor to assume and agree
to perform the Company’s obligations to the executive under the CIC Severance Plan.
If an executive remains employed for more than 150 days following the occurrence of any event set
forth above, any subsequent retirement or termination of employment by the executive that is not
initiated by the Company will not constitute a ‘‘Good Reason Resignation.’’ Whether an executive’s
termination is as a result of a ‘‘Good Reason Resignation’’ is determined by the administrator of the
CIC Severance Plan.
Role of Independent Compensation Consultant and Company Management
In carrying out its role in establishing executive compensation plans, the Compensation Committee
receives advice from an independent compensation consultant, and considers pay strategies and
recommendations prepared by the Company’s management. Under its charter, the Compensation
Committee has the sole authority to retain, compensate and terminate the independent compensation
consultants and any other advisors necessary to assist it in its evaluation of director, Chief Executive
Officer or other senior executive compensation. Since fiscal 2007, the Committee has retained
Exequity LLP (‘‘Exequity’’) as its independent compensation consultant to provide services exclusively
to the Compensation Committee. Among the responsibilities of Exequity are the following:
• conducting an ongoing review and critique of Tyco’s director compensation programs;
• providing an ongoing review and critique of Tyco’s executive compensation philosophy, the
strategies associated with it, and the composition of the peer group of companies;
• preparing periodic analyses of data, including data on competitive executive compensation;
• presenting updates on market trends;
• attending regular and special meetings of the Compensation Committee; and
2012 Proxy Statement 63