Exhibit 10.9

 

 

TYCO INTERNATIONAL LTD.
DEFERRED COMPENSATION PLAN FOR DIRECTORS

 

Amended and Restated

 

Effective January 1, 2005

 

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ARTICLE I

 

Purpose

 

1.1          Deferred Compensation Plan for Directors.  Tyco International Ltd.
adopted the Tyco International Ltd. Deferred Compensation Plan for Directors,
effective June 1, 2003, to allow outside directors of the Company the
opportunity to defer the receipt of compensation that would otherwise be payable
to them.  The Company hereby amends and restates the Plan, effective as of
January 1, 2005 to change certain of the Plan’s provisions applicable to
deferred compensation elections for compensation deferred on and after January
1, 2005.  The Company intends that the Plan will at all times be maintained on
an unfunded basis for Federal income tax purposes under the Code.  The
provisions of this amended and restated Plan shall apply to Compensation
Deferrals beginning on or after January 1, 2005 and to any earnings credited
thereon.  Prior deferrals under the Plan and earnings thereon shall continue to
be administered in accordance with the terms of the Plan in effect immediately
prior to the effective date of this amended and restated Plan and with any
elections made thereunder as of December 31, 2004.

 

1.2          Compliance with Code Section 409A.  The terms of this Plan are
intended to, and shall be interpreted and applied so as to, comply in all
respects with the provisions of Code Section 409A and regulations and rulings
thereunder.

 

ARTICLE II

 

Definitions

 

The following words and terms shall have the indicated meanings wherever they
appear in the Plan:

 

2.1 “Account” means the account maintained on the books of the Company used
solely to calculate the amount payable to each Participant who defers
Compensation under this Plan and shall not constitute a separate fund of assets.

 

2.2 “Administrator” means the person or persons named as such by the Committee
or its designee, or if no such designee is named, the Senior Vice President of
Human Resources of Tyco.

 

2.3 “Annual Deferral Amount” means that portion of a Participant’s Compensation
that a Participant elects to have and is actually deferred for any calendar
year.  All deferrals are made in U.S. dollars.

 

2.4 “Beneficiary” or “Beneficiaries” means the person or persons designated by
the Participant to receive payments under this Plan in the event of the
Participant’s death as provided in Section 4.4.

 

2.5 “Board of Directors,” “Directors,” or “Director” means, respectively, the
Board of Directors, the Directors, or a Director of the Company.  Director shall
also mean any former Director during the period immediately following service as
a Director while he/she is in the role of a paid advisor.

 

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2.6 “Code” means the Internal Revenue Code of 1986, as amended.

 

2.7 “Committee” means the Compensation and Human Resources Committee of the
Board of Directors.

 

2.8 “Company” means Tyco International Ltd.

 

2.9 “Compensation” means that portion of a Director’s retainer and/or meeting
fees payable in cash, but does not include travel expense allowance or any other
expense reimbursement.

 

2.10 “Compensation Deferral(s)” means that portion of Compensation as to which a
Participant has made an annual irrevocable election to defer receipt pursuant to
Article III.

 

2.11 “Deferral Year” means any calendar year commencing on or after January 1,
2005 in which a Participant elects to have some or all of his/her Compensation
deferred in accordance with section 3.2

 

2.12 “Disability” means that a Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months.

 

2.13 “Measurement Funds” means one or more of the independently established
funds or indices that are identified by the Committee.  These Measurement Funds
are used solely to calculate the earnings that are credited to each
Participant’s Account(s) in accordance with Section 3.3, and do not represent
any beneficial interest on the part of the Participant in any asset or other
property of the Company.  The determination of the increase or decrease in the
performance of each Measurement Fund shall be made by the Administrator in its
reasonable discretion.  Measurement Funds may be replaced, new funds may be
added, or both, from time to time in the discretion of the Committee.

 

2.14 “Notice Form” means the form attached hereto and marked as Exhibit A or any
other document which incorporates information substantially similar to Exhibit
A.

 

2.15 “Participant” means each non-employee Director of the Company who
participates in the Plan in accordance with its terms and conditions.

 

2.16 “Plan” means the Tyco International Ltd. Deferred Compensation Plan for
Directors as set forth herein, or as it may be amended from time to time by the
Board of Directors.  The effective date of this amended and restated Plan is
January 1, 2005.

 

2.17 “Time Certain Payout” means the payout form described in Section .2(b).

 

2.18 “Trust” shall mean the trust arrangement, if any, between the Company and
the trustee named therein, as amended from time to time.

 

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Article III

 

Participation

 

3.1          Eligibility.  Each non-employee Director is eligible to participate
in the Plan by filing an election in accordance with Section 3.2.

 

3.2          Notice Form Timing and Duration.  A Director may elect to
participate in the Plan by filing a properly completed Notice Form with the
Administrator.  In order to defer compensation in any Deferral Year, a Notice
Form must be filed with the Administrator on or before December 31st of the year
preceding the Deferral Year and must be irrevocable for the full Deferral Year. 
Notwithstanding the previous sentence, a newly-appointed Director may elect to
defer Compensation by filing a Notice Form with the Administrator no later than
30 days after the date on which he/she becomes a Director, but such Notice Form
will only be effective for compensation payable on and after the first day of
the calendar quarter following the date on which the Notice Form is filed and
such Notice Form will be irrevocable for the remainder of the Deferral Year. 
Once filed with the Administrator, a Notice Form shall remain in effect until
the earlier of (i) the termination of the Participant’s services as a Director,
or (ii) the last day of the Deferral Year.  For purposes of this Section 3.2,
any election to defer Compensation payable in 2005 that was filed with the
Administrator on or before December 31, 2004 in accordance with the Plan’s
procedures in effective prior to January 1, 2005 will be deemed to meet the
requirements of this Section 3.2 for the 2005 Deferral Year.

 

3.3          Compensation Deferral.  A Participant may elect on the Notice Form
that the payment of all or a specified portion of the Compensation otherwise
payable to him/her in cash during a Deferral Year for services as a Director be
deferred until such time as elected by the Participant pursuant to the terms of
this Plan.  At the time of making any such election, a Participant shall elect
that such Compensation be deferred and credited to his/her Account.  Any
Compensation earned by a Director that is not deferred under the Plan shall be
paid to the Director in accordance with normal Company policy.

 

3.4          Investment Measurements.  (a) At the time that a Participant makes
an election to defer compensation under the Plan, the Participant shall elect
the manner in which the Annual Deferral Amount shall be deemed to be invested
under the Plan.  The Participant may change and/or make new investment elections
in accordance with procedures established by the Administrator.

 

(b) A Participant may elect to invest all or a specified portion of his/her
Account in some or all of the Measurement Funds listed in Appendix A, to the
extent the Committee makes such investment alternatives available under the
Plan.  The specified portion of an Account that is deemed invested in a
Measurement Fund shall be adjusted for investment experience (either gains or
losses) in a manner that equals the investment experience attributable to such
investment.  Deemed investments in a Measurement Fund shall be credited and
debited in accordance with procedures established by the Administrator.  In the
event that a Participant does not submit a complete and accurate investment
election, the Account shall be deemed

 

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invested in the Interest Income Measurement Fund or, if none, as determined by
the Administrator.

 

(c) The Company shall not be required to acquire any securities in connection
with deemed investment elections under this Plan.  No Participant shall have any
right to receive a distribution in kind from the Plan or have the right to vote
any security in which a Participant’s Account is deemed invested.

 

(d) Each Participant shall receive a statement of the balance of his/her Account
at least annually or within a reasonable period following the Administrator’s
receipt of a request for a statement.

 

ARTICLE IV

 

Payments to Participants

 

4.1          Lump Sum Payment of Account Balance.  Each Annual Deferral Amount
adjusted for the investment results thereon credited to a Participant’s Account
will be paid to the Participant in a lump sum payment in cash at the time
described in Section 4.2.

 

4.2          Time of Payment.  (a) The lump sum payment of each Annual Deferral
Amount adjusted for the investment results thereon will be made, at the election
of the Participant which shall be made on the Notice Form applicable to such
Deferral Amount, either (i) within sixty (60) days after the end of the calendar
year in which the Director terminates service from the Board or (ii) as a Time
Certain Payout within sixty (60) days after the first day of the calendar year,
as elected by the Participant, that is at least five (5) years after the first
day of the calendar year to which the applicable Annual Deferral Amount election
relates.  .Notwithstanding the Participant’s election of a Time Certain Payout
(or any change in payment election described in Section 4.3), any unpaid Annual
Deferral Amounts adjusted for the investment results thereon will be paid to the
Participant within sixty (60) days after the year in which occurs the later of
(i) the Participant’s attainment of age seventy and (ii) the Participant’s
termination of service from the Board.

 

(b) In the absence of an election as to the timing of the payment of an Annual
Deferral Amount, as described in Section 4.2 (a), such Annual Deferral Amount
shall be paid to the Participant as a Time Certain Payout within sixty (60) days
after the first day of the calendar year that is five (5) years after the first
day of the calendar year to which the applicable Annual Deferral Amount election
relates.

 

4.3          Change in Election.  A Participant may postpone the payment date
for an Annual Deferral Amount, provided that the initial payment election was a
Time Certain Payout election, by filing a new payment election, in the form
specified by the Administrator, at least twelve (12) months prior to the
original payment date of the Time Certain Payout.  Under the new election, the
Participant may postpone  the payment of the Annual Deferral Amount so that it
will be paid (a) within sixty (60) days of the first day of the calendar year
that is at least five (5) years after the original payment date or (b) within
sixty (60) days after the calendar year in which the

 

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Director terminates service from the Board, provided that in no event may any
payment under such election occur before the date that is at least five (5)
years after the original payment date..

 

4.4          Death or Disability Benefit/Beneficiary Designation.  (a) Upon the
death or Disability of a Participant, the Participant or the Participant’s
Beneficiary, as applicable, shall be paid the balance in his or her Account in
the form of a lump sum payment, with such payment to be made as soon as
practical after the Participant’s death or Disability.

 

(b)  Each Participant may designate in writing a Beneficiary or Beneficiaries
(which Beneficiary may be an entity other than a natural person) to receive any
payments which may be made under the Plan following the Participant’s death.  No
Beneficiary designation shall become effective until it is in writing and it is
filed with the Administrator.  Such designation may be changed or canceled by
the Participant at any time without the consent of any such Beneficiary.  Any
such designation, change or cancellation must be made in a form approved by the
Administrator and shall not be effective until received by the Administrator, or
its designee.  If no Beneficiary has been named, or the designated Beneficiary
or Beneficiaries shall have predeceased the Participant, the Beneficiary shall
be deemed to be the Participant’s estate.  If a Participant designates more than
one Beneficiary, the interests of such Beneficiaries shall be paid in equal
shares, unless the Participant has specifically designated otherwise.

 

4.5          Valuation of Payments.  Any lump sum payment of an Annual Deferral
Amount shall be made in an amount equal to the value of the portion of the
Participant’s Account attributable to such Annual Deferral Amount and the
investment results thereon as of January 1 of the calendar year that includes
the relevant payment date, with the Measurement Funds being deemed to have been
liquidated on that date to make the payment.

 

4.6          Effect of Payment.  The full payment of the Participant’s Account
under this Article IV shall completely discharge all obligations on the part of
the Company to the Participant (and each Beneficiary) with respect to the
operation of this Plan, and the Participant’s (and Beneficiary’s) rights under
this Plan shall terminate.

 

ARTICLE V

 

General

 

5.1          Unsecured Obligation of Company.  The right of any Participant,
beneficiary, or estate to receive payment of any unpaid balance in any Account
of the Participant shall be an unsecured claim against the general assets of the
Company.  No Participant or other person shall have any right or claim to the
payment of any amount that is in any manner superior or different from the right
or claim of a general and unsecured creditor of the Company.

 

5.2          Nonalienation of Benefits.  During a Participant’s lifetime, any
payment under the Plan shall be made only to him/her.  No sum or other interest
under the Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt by a
Participant or any beneficiary under the Plan to do so shall be void.

 

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No interest under the Plan shall in any manner be liable for or subject to the
debts, contracts, liabilities, engagements, or torts of a Participant or
beneficiary entitled thereto.

 

5.3          Plan Administration.  Except as otherwise provided herein, the Plan
shall be administered by the Administrator which shall have the full
discretionary power and authority to administer the Plan, including without
limitation, the power and authority to:  (i) construe the Plan’s terms; (ii)
make factual determinations; (iii) prepare forms to be used for making elections
under the Plan; (iv) establish rules and procedures for administering and
operating the Plan; (v) evaluate requests made by Participants; (vi) correct
defects under the Plan; (viii) establish the manner in which decisions are made
by the Administrator; (ix) retain such legal, actuarial, accounting, clerical,
and other services as may be necessary to operate and administer the Plan; (x)
establish recordkeeping procedures for the Plan; and (xi) take any and all
similar actions to the extent necessary to administer the Plan.  The
Administrator may delegate all or some of its authority under the Plan to any
other person or entity.  Any findings or determinations made by the
Administrator in the administration of the Plan shall be final, conclusive, and
binding on all parties.

 

5.4          Plan Amendment/Termination.  The Plan may at any time or from time
to time be amended, modified, or terminated by the Board of Directors, provided
that no amendment, modification, or termination shall adversely affect the
balance in a Participant’s Account without his/her consent.  In addition, the
Plan, and/or the terms of any election made hereunder, may be amended at any
time and in any respect by the Company or by the Plan Administrator if and to
the extent recommended by counsel in order to conform to the requirements of
Code Section 409A and regulations thereunder.  In the event of any suspension or
termination of the Plan, payment of Participants’ Accounts shall be made under
and in accordance with the terms of the Plan and the applicable elections
(except that the Plan Administrator may determine, in its sole discretion, to
accelerate payments to all Participants if and to the extent that such
acceleration is permitted under Code Section 409A and regulations thereunder).

 

5.5          No Additional Rights.  Nothing contained herein shall be deemed to
give any Director the right to be retained in the service of the Company.

 

5.6          Governing Law.  This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Bermuda, notwithstanding the
conflict of law rules applicable therein.

 

5.7          Company’s Right to Offset.  If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has
outstanding any debt, obligation, or other liability representing an amount
owing to the Company, then the Company may offset such amount owed to it against
the amount of benefits otherwise distributable.

 

ARTICLE VI

 

Trust

 

6.1          Establishment of Trust.  The Company may establish a Trust, and the
Company may, at least annually, transfer over to the Trust such assets, if any,
as the Company determines,

 

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in its sole discretion, are necessary to provide for the liabilities created
with respect to the Plan for that year.  The trustees of the Trust shall be
selected by the Company from time to time.

 

6.2          Governing Documents.  The provisions of the Plan shall govern the
rights of a Participant to receive distributions pursuant to the Plan.  The
provisions of the Trust, if any, shall govern the rights of the Participant and
the creditors of the Company to any assets transferred to the Trust.  The
Company shall at all times remain liable to carry out its obligations under the
Plan.  The Company’s obligations under the Plan may be satisfied with Trust
assets distributed pursuant to the terms of the Trust.

 

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APPENDIX A

 

MEASUREMENT FUNDS

 

(as of January 1, 2005)

 

 

Interest Income Measurement Fund

 

U.S. Equity Index Commingled Measurement Fund

 

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