ADT 2011 Annual Report Download - page 80

Insider Trading Policy
The Company maintains an insider trading policy, applicable to all employees and directors. The
policy provides that the Company’s personnel may not buy, sell or engage in other transactions in the
Company’s stock while aware of material non-public information; buy or sell securities of other
companies while aware of material non-public information about those companies that they become
aware of as a result of business dealings between the Company and those companies; disclose material
non-public information to any unauthorized persons outside of the Company; or engage in transactions
in puts, calls, cashless collars, options or similar rights and obligations involving the Company’s
securities, other than the exercise of any Company-issued stock option. The policy also restricts trading
for a limited group of Company employees (including named executive officers and directors) to
defined window periods that follow our quarterly earnings releases.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code imposes a limit of $1.0 million on the amount of
compensation that can be deducted by Tyco with respect to our named executive officers (other than
Mr. Sklarsky, our Chief Financial Officer), unless the compensation over $1.0 million qualifies as
‘‘performance-based’’ under federal tax law. It is our policy to structure compensation arrangements
with our named executive officers to qualify as performance-based so that compensation payments are
deductible under U.S. federal tax law, unless the benefit of such deductibility is outweighed by the need
for flexibility or the attainment of other corporate objectives. Potentially non-deductible forms of
compensation include payments in connection with the recruitment and retention of key employees,
base salary over $1.0 million, discretionary bonus payments and grants of time-based RSUs. In addition,
stock options granted to Mr. Breen when he was hired in July 2002 may not qualify as performance-
based compensation under Section 162(m).
Compensation and Human Resources Committee Report on Executive Compensation
The Compensation Committee has reviewed and discussed with management this Compensation
Discussion and Analysis and, based on such review and discussions, has recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report
on Form 10-K and this Proxy Statement.
Submitted by the Compensation and Human Resources Committee:
Rajiv L. Gupta, Chair
Timothy M. Donahue
Sandra S. Wijnberg
R. David Yost
66 2012 Proxy Statement