ADT 2015 Annual Report Download - page 57

FISCAL YEAR 2015 NEO COMPENSATION—CONTINUED
Each NEO must execute a general release of claims in favor of the
Company in order to receive these benefits. Following termination,
each NEO is prohibited from soliciting customers and employees for
a period of two years, and is prohibited from competing with the
Company for a period of one year.
CIC Severance Plan. In connection with a Change in Control, the
NEOs would receive benefits under the CIC Severance Plan only if
they had a qualifying termination of employment (an involuntary
termination of employment other than for Cause, permanent disability
or death, or a Good Reason Resignation, within the period beginning
60 days prior to, and ending 24 months following, a Change in
Control). Upon such termination, an NEO would be entitled to the
following:
•A payment equal to two times his or her base salary and two
times his or her target annual bonus.
•Continued participation in the Company’s medical, dental and
health care reimbursement account coverage for 12 months
following termination of employment (or until the NEO commences
employment by another company and becomes eligible for
coverage under the new employer’s plans), subject to the NEO’s
payment of the employee portion of such coverage.
•To the extent the NEO has not become eligible for medical, dental
and health care reimbursement account coverage by a new
employer after the 12-month period following termination of
employment, a cash payment equal to the projected value of the
employer portion of the premiums for such coverage for an
additional period of 12 months.
•A pro-rata bonus for the year of termination based on the target
bonus for the year of termination.
•Payment of the cost of outplacement services for 12 months
following the termination of employment.
Each NEO must execute a general release of claims in favor of the
Company in order to receive these benefits. The Company will not
reimburse an NEO with respect to any excise tax triggered by
Section 280G or 4999 of the Code, but any Change in Control
payments will be capped at three times the NEO’s “base amount”
under Section 280G of the Code if the cap results in a greater after-
tax payment to the NEO than if the payments were not capped.
Equity Awards. In addition, the individual award agreements for the
outstanding equity awards provide for special treatment upon
termination of employment, including termination of employment
during the two-year period following a Change in Control.
•Termination of Employment. Other than in the case of a Change in
Control, if an NEO is terminated without Cause, the portion of
Stock Options which would have vested within one year from the
date of termination will immediately vest upon termination. All other
unvested Stock Options and all unvested RSUs and PSUs will be
forfeited unless the NEO is retirement eligible, in which case the
RSUs or Stock Options will vest pro rata based on the number of
full months of service completed from the date of grant through
the termination date, and all or a portion of the PSUs will remain
subject to the performance criteria and may vest upon the
achievement of such performance criteria. With respect to Stock
Options, the NEO will have 12 months following termination to
exercise (or, for NEOs that are retirement eligible, 36 months),
subject to the original term of the stock option.
•Change in Control. During the two year period following a Change
in Control, if the NEO is terminated without Cause or has a Good
Reason Resignation, all outstanding Stock Options and RSUs
vest in full and all outstanding PSUs vest at the target level. Stock
Options remain exercisable until the earlier of (i) the expiration of
the remainder of their term and (ii) up to three years following the
termination date.
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