Exhibit 10.15

 

Tyco International Ltd
2004 Stock and Incentive Plan (the “Plan”)

 

TERMS AND CONDITIONS

OF

OPTION AWARD

 

OPTION AWARD made in Princeton, New Jersey, as of [                ] (the “Grant
Date”).

 

1.             Grant of Option.  Tyco International Ltd. (the “Company”) has
granted you an Option to purchase Shares of Common Stock of the Company, as
described in the grant notification letter issued to you (“Grant Letter”),
subject to the provisions of these Terms and Conditions.  This Option is a
Non-Qualified Option.

 

2.             Exercise Price.  The purchase price of the Shares covered by the
Option is set forth in your Grant Letter.

 

3.             Vesting.  Except in the event of your Normal Retirement
(Termination of Employment on or after age 60 if the sum of your age and full
years of service with the Company is at least 70), Retirement (Termination of
Employment on or after age 55 if the sum of your age and full years of service
with the Company is at least 60), Termination of Employment, Death, Disability
or a Change in Control, the Option will become exercisable in installments of
one fourth (1/4) of the Shares specified in your Grant Letter per year over four
(4) years.  Your vested right will be calculated on the anniversary of the Grant
Date.  No credit will be given for periods following Termination of Employment,
except as specifically provided herein.

 

4.             Term of Option.  Unless the Option has been terminated or
cancelled on an earlier date, the Option must be exercised prior to the close of
the New York Stock Exchange (“NYSE”) on the day prior to the 10th anniversary of
the Grant Date.  If the NYSE is not open for business on the expiration date
specified, the Option will expire at the close of the NYSE’s previous business
day.

 

5.             Payment of Exercise Price.  You may pay the Exercise Price by
cash, certified check, bank draft, wire transfer or postal or express money
order. Alternatively, payment may be made by one or more of the following
methods: (i) delivering to UBS Financial Services, or such other Stock Option
Administrator as selected by the Company, a properly executed exercise notice,
together with irrevocable instructions to a broker to deliver promptly (within
the typical settlement cycle for the sale of equity securities on the relevant
trading market, or otherwise in accordance with Regulation T issued by the
Federal Reserve Board) to the Company sale or loan proceeds adequate to satisfy
the portion of the Exercise Price being so paid; (ii) if expressly approved by
the Board of Directors, tendering to the Company (by physical delivery or
attestation) certificates of Common Stock that you have held for six (6) months
or longer (unless the Compensation and Human Resources Committee (the
“Committee”), in its sole discretion, waives this 6-month period) that have an
aggregate Fair Market Value as of the day prior to the

 

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date of exercise equal to the portion of the Exercise Price being so paid; or
(iii) if such form of payment is expressly authorized by the Board of Directors
or the Committee, instructing the Company to withhold Shares that would
otherwise be issued were the Exercise Price to be paid in cash that have an
aggregate Fair Market Value as of the date of exercise equal to the portion of
the Exercise Price being so paid.  Notwithstanding the foregoing, you may not
tender any form of payment that the Company determines, in its sole and absolute
discretion, could violate any law or regulation. You are not required to
purchase all Shares subject to the Option at one time, but you must pay the full
Exercise Price for all Shares that you elect to purchase before they will be
delivered.

 

6.             Exercise of Option.  Subject to these Terms and Conditions, the
Option may be exercised by contacting (i) UBS Financial Services Inc. at
[                  ] if calling from within the U.S. or [                  ] if
calling from outside the U.S., or (ii) such other stock option administrator as
is selected by the Company.  If the Option is exercised after your death, the
Company will deliver Shares only after the Committee has determined that the
person exercising the Option is the duly appointed executor or administrator of
your estate or the person to whom the Option has been transferred by your will
or by the applicable laws of descent and distribution.

 

7.             Retirement, Termination of Employment, Disability or Death.  The
Option will vest and remain exercisable as set forth below (or as set forth in
sections 8, 9 or 10 as applicable), in the case of Termination of Employment,
Retirement, Normal Retirement, Disability or Death:

 

Event

 

Vesting

 

Exercise

Voluntary Termination of Employment (other than Retirement or Normal Retirement)

 

Unvested Awards are forfeited as of Termination of Employment.

 

Vested Awards expire on earlier of (i) original expiration date, or (ii) 90 days
after Termination of Employment.

 

 

 

 

 

Involuntary Termination of Employment not for Cause

 

Unvested Awards are forfeited as of Termination of Employment, except as
otherwise provided in sections 8, 9 or 10.

 

Vested Awards expire on earlier of (i) original expiration date, or (ii) 90 days
after Termination of Employment, except as otherwise provided in sections 8, 9
or 10.

 

 

 

 

 

Termination of Employment for Cause

 

Unvested Awards are immediately forfeited as of Termination of Employment.

 

Vested Awards are immediately cancelled upon Termination of Employment.

 

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Retirement (as defined in section 3)

 

Unvested Awards are forfeited if your Retirement occurs less than 12 months
after the Grant Date. On or after the 1st anniversary of the Grant Date, Awards
vest pro rata based on the number of full years of service you complete
commencing on the Grant Date and ending on your Termination of Employment
divided by the number of years required to achieve complete vesting (with an
offset for shares previously vested).

 

Vested Awards expire earlier of (i) original expiration date, or (ii) 3 years
after Termination of Employment.

 

 

 

 

 

Normal Retirement (as defined in section 3)

 

Unvested Awards are forfeited if your Normal Retirement occurs less than 12
months after the Grant Date. On or after the 1st anniversary of the Grant Date,
Awards become fully vested as of your Termination of Employment.

 

Vested Awards expire earlier of (i) original expiration date, or (ii) 3 years
after your Termination of Employment.

 

 

 

 

 

Disability or Death

 

Unvested Awards become fully vested as of your Termination of Employment.

 

Vested Awards expire earlier of (i) original expiration date, or (ii) 3 years
after your Termination of Employment.

 

Termination of Employment means the date of cessation of an Employee’s
employment relationship with the Company or a subsidiary for any reason, with or
without Cause, as determined by the Company. The Severance & Retention Plan for
Headquarters Group Move Program shall not apply to this Award.

 

8.             Change in Control.  In the event of a Change in Control of Tyco
International Ltd.,  and your Change in Control Termination,  or a Termination
of Employment by reason of a “Good Reason Resignation” which qualifies you for
severance benefits under the Tyco International Ltd. Change in Control Severance
Plan for Certain U. S. Officers and Executives (the “CIC Severance Plan”) within
two (2) years following a Change in Control, your Option will immediately become
fully vested.  Your Option will expire on the earlier of (i) the original
expiration date or (ii) three (3) years from the effective date of your Change
in Control

 

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Termination or your Termination of Employment by reason of a Good Reason
Resignation, as described in the preceding sentence.

 

9.             Termination of Employment as a Result of Divestiture or
Outsourcing.  Notwithstanding any provision to the contrary in section 7, if
your involuntary Termination of Employment other than for Cause is as a result
of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing
Agreement, your Option Award will vest on a pro-rata basis based on the
following formula: (i) the number of whole months of service that you have
completed from the Grant Date through the closing date of the applicable
transaction divided by original number of months of the vesting period, times
the difference between (a) the total number of shares awarded under the Option,
and (b) the number of shares previous vested. The vested portion of your Option
Award will expire on the earlier of the original expiration date of the Award or
three (3) years after the date of your Termination of Employment.

 

Notwithstanding the foregoing, you shall not be eligible for such pro-rata
vesting and extended expiration date if, (i) your Termination of Employment
occurs on or prior to the closing date of such Disposition of Assets or
Disposition of a Subsidiary, as applicable, or on such later date as is
specifically provided in the applicable transaction agreement or related
agreements, or on the effective date of such Outsourcing Agreement applicable to
you (the “Applicable Employment Date”), and (ii) you are offered Comparable
Employment with the buyer, successor company or outsourcing agent, as
applicable, but do not commence such employment on the Applicable Employment
Date.

 

For purposes of this section 9, “Comparable Employment” is defined as employment
at a base salary rate and bonus target that is at least equal to the base salary
rate and bonus target in effect immediately prior to your termination of
employment and at a location that is no more than 50 miles from your job
location in effect immediately prior to your termination of employment; 
“Disposition of Assets” shall mean the disposition by the Company or a
Subsidiary by which you are employed of all or a portion of the assets used by
the Company or Subsidiary in a trade or business to an unrelated corporation or
entity; “Disposition of a Subsidiary” shall mean the disposition by the Company
or a Subsidiary of its interest in a subsidiary or controlled entity to an
unrelated individual or entity, provided that such subsidiary or entity ceases
to be an affiliated company as a result of such disposition; and “Outsourcing
Agreement” shall mean a written agreement between the Company or a Subsidiary
and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the
Company transfers the performance of services previously performed by employees
of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing
Agent is obligated to offer employment to any employee whose employment is being
terminated as a result of or in connection with said Outsourcing Agreement.

 

10.          Termination of Employment — Executives.  If (i) your Termination of
Employment occurs twelve months or later after the Grant Date, (ii) upon your
Termination of Employment you are a Section 16 Officer or employed in a job
classification Band 1 or Band 2, and (iii) you are involuntarily terminated for
reasons other than Cause, you will continue to vest in any portion of your Award
that had not vested as of the date of your Termination of Employment for a
period of twelve months following your termination date, and the vested portion
of your Award will expire on the earlier of (i) the original expiration date of
the Award

 

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or (ii) twelve months after the date of your Termination of Employment or such
later date as is applicable under section 7.  If your Termination of Employment
occurs less than twelve months after the Grant Date your unvested Options will
be forfeited as of your Termination of Employment.

 

11.          Withholdings; Tax Recovery.  The Company will have the right, prior
to the issuance or delivery of any Shares in connection with the exercise of the
Option, to withhold or demand from you payment of the amount necessary to
satisfy applicable tax requirements, as determined by the Committee.  The
methods described in section 5 may also be used to pay your withholding tax
obligation.

 

12.          Transfer of Option.  You may not transfer the Option or any
interest in the Option except by will or the laws of descent and distribution. 
Notwithstanding the foregoing, you may transfer the Option to members of your
immediate family or to one or more trusts for the benefit of family members or
to one or more partnerships in which the family members are the only partners,
provided that (i) you do not receive any consideration for the transfer,
(ii) you furnish the Committee or its designee with detailed written notice of
the transfer at least three (3) business days in advance, and (iii) the
Committee or its designee consents in writing.  For this purpose, “family
member” means any spouse, children, grandchildren, parents, grandparents,
siblings, nieces, nephews and grandnieces and grandnephews, including adopted,
in-laws and step family members. Any Option transferred pursuant to this
provision will continue to be subject to the same terms and conditions that were
applicable to the Option immediately prior to transfer.  The Option may be
exercised by the transferee only to the same extent that you could have
exercised the Option had no transfer occurred.

 

13.          Covenant; Forfeiture of Award; Agreement to Reimburse Company.

 

(a)           If you have been terminated from employment for Cause, including
without limitation a termination as a result of your violation of the Company’s
Code of Ethical Conduct, any outstanding vested or unvested stock options shall
be immediately rescinded and you will forfeit any rights you have with respect
to those Options.  Furthermore, by not declining this Award you agree and
promise immediately to deliver to the Company Shares (or, in the discretion of
the Committee, cash) equal in value to the amount of any profit you realized
upon an exercise of the Option during the period beginning six (6) months prior
to your Termination of Employment for Cause and ending on the 6 month
anniversary of your Termination of Employment for Cause, including, without
limitation, a termination as a result of your violation of the Company’s Code of
Ethical Conduct.

 

(b)           If the Committee determines, in its sole discretion, that at any
time after the Grant Date and prior to the second anniversary of your
Termination of Employment you (i) disclosed business confidential or proprietary
information related to any business of the Company or Subsidiary or (ii) have
entered into an employment or consultation arrangement (including any
arrangement for employment or service as an agent, partner, stockholder,
consultant, officer or director) with any entity or person engaged in a
business, which arrangement would likely (in the sole judgment of the Committee)
result in the disclosure of business confidential or proprietary information
related to any business of the Company or a Subsidiary to a business that is
competitive with any Company or Subsidiary business as to

 

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which you have had access to business strategic or confidential information, and
the Committee has not approved the arrangement in writing, then any Option that
you have not exercised (whether vested or unvested) will immediately be
rescinded, and you will forfeit any rights you have with respect to these
Options as of the date of the Committee’s determination.

 

14.          Adjustments.  In the event of any stock split, reverse stock split,
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), extraordinary cash dividend, recapitalization,
merger, consolidation, split-up, spin-off, reorganization, combination,
repurchase or exchange of Shares or other securities, the issuance of warrants
or other rights to purchase Shares or other securities, or other similar
corporate transaction or event, the Committee shall adjust the number and kind
of Shares covered by the Option, the Exercise Price and other relevant
provisions to the extent necessary to prevent dilution or enlargement of the
benefits or potential benefits intended to be provided by the Option.  Any such
determinations and adjustments made by the Committee will be binding on all
persons.

 

15.          Restrictions on Exercise.  Exercise of the Option is subject to the
conditions that, to the extent required at the time of exercise, (a) the Shares
covered by the Option will be duly listed, upon official notice of issuance, on
the NYSE, and (b) a Registration Statement under the Securities Act of 1933 with
respect to the Shares will be effective or an exemption from registration will
apply.  The Company will not be required to deliver any Common Stock until all
applicable federal and state laws and regulations have been complied with and
all legal matters in connection with the issuance and delivery of the Shares
have been approved by the appropriate counsel of the Company.

 

16.          Disposition of Securities.  By not declining the Award, you
acknowledge that you have read and understand the Company’s Insider Trading
Policy, and are aware of and understand your obligations under federal
securities laws with respect to trading in the Company’s securities, and you
agree not to exercise your option at any time when doing so would result in a
violation of securities law.  You also acknowledge that the Company will have
the right to recover, or receive reimbursement for, any compensation or profit
realized on the exercise of the Option or by the disposition of Shares received
upon exercise of the Option to the extent that the Company has a right of
recovery or reimbursement under applicable securities laws or under its pay
recoupment policy.

 

17.          Plan Terms Govern.  The exercise of the Option, the disposition of
any Shares received upon exercise of the Option, and the treatment of any gain
on the disposition of these Shares are subject to the terms of the Plan and any
rules that the Committee may prescribe.  The Plan document, as may be amended
from time to time, is incorporated by reference into these Terms and
Conditions.  Capitalized terms used in these Terms and Conditions have the
meaning set forth in the Plan, unless otherwise stated in these Terms and
Conditions.  In the event of any conflict between the terms of the Plan and the
terms of these Terms and Conditions, the terms of the Plan will control.  By not
declining the Award, you acknowledge receipt of the Plan, as in effect on the
date of these Terms and Conditions.

 

18.          Personal Data.  To comply with applicable law and to administer the
Plan and these Terms and Conditions properly, the Company and its agents may
hold and process your

 

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personal data and/or sensitive personal data.  Such data includes, but is not
limited to, the information provided in this grant package and any changes
thereto, other appropriate personal and financial data about you, and
information about your participation in the Plan and Shares obtained under the
Plan from time to time.  By not declining the Award, you hereby give your
explicit consent to the Company’s processing any such personal data and/or
sensitive personal data, and you also hereby give your explicit consent to the
Company’s transfer of any such personal data and/or sensitive personal data
outside the country in which you work or reside and to the United States.  The
legal persons for whom your personal data is intended include the Company and
any of its Subsidiaries (or former Subsidiaries as are deemed necessary), the
outside Plan administrator as selected by the Company from time to time, and any
other person that the Company may find in its administration of the Plan to be
appropriate.  You have the right to review and correct your personal data by
contacting your local Human Resources Representative.  By not declining the
Award, you understand and acknowledge that the transfer of the information
outlined here is important to the administration of the Plan, and that failure
to consent to the transmission of such information may limit or prohibit your
participation in the Plan.

 

19.          No Contract of Employment or Promise of Future Grants.  By not
declining the Award, you agree to be bound by these Terms and Conditions and
acknowledge that the Award is granted at the sole discretion of the Company and
is not considered part of any contract of employment with the Company or your
ordinary or expected salary or other compensation, and that the Award will not
be considered as part of such salary or compensation for purposes of any pension
benefits or in the event of severance, redundancy or resignation.  If your
employment with the Company or a Subsidiary is terminated for any reason,
whether lawfully or unlawfully, you acknowledge and agree that you will not be
entitled by way of damages for breach of contract, dismissal or compensation for
loss of office or otherwise to any sum, shares or other benefits to compensate
you for the loss or diminution in value of any actual or prospective rights,
benefits or expectation under or in relation to the Plan.

 

20.          Limitations.  Nothing in these Terms and Conditions or the Plan
gives you any right to continue in the employ of the Company or any of its
Subsidiaries or to interfere in any way with the right of the Company or any
Subsidiary to terminate your employment at any time.  Payment of Shares is not
secured by a trust, insurance contract or other funding medium, and you do not
have any interest in any fund or specific asset of the Company by reason of the
Option.  You have no rights as a stockholder of the Company pursuant to the
Option until Shares are actually delivered you.

 

21.          Incorporation of Other Agreements.  These Terms and Conditions and
the Plan constitute the entire understanding between you and the Company
regarding the Option.  These Terms and Conditions supercede any prior
agreements, commitments or negotiations concerning the Option, except as
otherwise provided in section 17 above.

 

22.          Severability.  The invalidity or unenforceability of any provision
of these Terms and Conditions will not affect the validity or enforceability of
the other provisions of these Terms and Conditions, which will remain in full
force and effect.  Moreover, if any provision is found to be excessively broad
in duration, scope or covered activity, the provision will be construed so as to
be enforceable to the maximum extent compatible with applicable law.

 

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By not declining this Award, you agree to and acknowledge the following:

 

(i)            you have carefully read, fully understand and agree to all of the
terms and conditions described in these Terms and Conditions and the Plan; and

 

(ii)           you understand and agree that these Terms and Conditions and the
Plan constitute a binding agreement between you and the Company and represent
the entire understanding between you and the Company regarding the Option, and
that any prior agreements, commitments or negotiations concerning the Option are
replaced and superseded.

 

You will be deemed to consent to the application of the terms and conditions set
forth in these Terms and Conditions and the Plan unless you contact Tyco
International Ltd., c/o Equity Plan Administration, 9 Roszel Road, Princeton,
NJ  08540 in writing within sixty (60) days of the date of these Terms and
Conditions.  Notification of your non-consent will nullify this grant unless
otherwise agreed to in writing by you and the Company.

 

 

 

 

 

Edward D. Breen

 

Chairman of the Board

 

and Chief Executive Officer,

 

Tyco International Ltd.

 

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Tyco International Ltd.
2004 Stock and Incentive Plan (the “Plan”)

 

TERMS AND CONDITIONS

OF

PERFORMANCE SHARE UNIT AWARD

 

PERFORMANCE SHARE UNIT AWARD made in Princeton, New Jersey, as of [          ]
(“Grant Date”).

 

1.             Grant of Award.  Tyco International Ltd. (“the Company”) has
granted you Performance Share Units, as described in the grant notification
letter issued to you (“Grant Letter”), subject to the provisions of these Terms
and Conditions.  The Company will hold the Performance Share Units in a
bookkeeping account on your behalf until they become payable or are forfeited or
cancelled.

 

2.             Payment Amount.  Each Performance Share Unit represents the right
to receive upon vesting, one (1) Share of Common Stock (as may be adjusted in
accordance with section 5(b)).

 

3.             Form of Payment.  Your vested Performance Share Unit Award,
determined in accordance with section 5, will be redeemed solely for Shares,
subject to sections 15 and 16.

 

4.             Dividends.  For each Performance Share Unit that is outstanding,
you will be credited with a Dividend Equivalent Unit (DEU) for any cash
dividends distributed by the Company on Company Common Stock.  DEUs will be
calculated at the same dividend rate paid to other holders of Common Stock. 
DEUs will vest in accordance with the vesting schedule applicable to the
underlying Units, shall be subject to adjustment based on the same performance
measures applicable to the underlying units, and shall be payable at the same
time that the underlying units are payable, and subject to the same award
adjustment as the underlying units, as provided herein.

 

5.             (a) Vesting.  Subject to section 5(b), your Performance Share
Unit Award will fully vest at the end of the Performance Cycle, as described in
Appendix A, if you are then an active employee or qualify for any exception
described herein. Any payment shall be made as soon as practicable following the
end of the Performance Cycle.

 

(b)  Award Adjustment.  The target number of Performance Share Units specified
in your Grant Letter shall be adjusted at the end of the Performance Cycle based
on the level of attainment of the performance measures and satisfaction of the
other terms and conditions described in Appendix A.  Such adjustment shall range
from 0% to 200% of the target Award set forth in your Grant Letter.  The
determination of the attainment of the performance measures and satisfaction of
any other applicable terms and conditions will be made in the sole discretion of
the Compensation and Human Resources Committee (the “Committee”).

 

6.             Termination of Employment.  Any Performance Share Units that have
not been earned as of your Termination of Employment pursuant to sections 7
through 11 will immediately be forfeited, and your rights with respect to these
Performance Share Units will end. Termination of Employment means the date of
cessation of an Employee’s employment relationship with the Company or a
subsidiary for any reason, with or without Cause, as determined by the Company.

 

7.             Death or Disability.  If your Termination of Employment is the
result of your Death or Disability, you will earn a pro rata portion of your
Award, if any, determined in accordance with section 5 above, based on the
number of full months you have completed in the performance period applicable to
the

 

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Award. Any payment shall be made as soon as practicable following the end of the
Performance Cycle and shall be subject to adjustment under section 5(b).

 

If you are deceased, the Company will make the payment, if any, to your estate
as soon as practicable following the end of the Performance Cycle following your
death.

 

8.             Retirement.  For purposes of this section 8, “Retirement” means
Termination of Employment on or after age 55 if the sum of your age and full
years of service with the Company is at least 60, and “Normal Retirement” means
Termination of Employment on or after age 60 if the sum of your age and full
years of service with the Company is at least 70.  If your employment with the
Company terminates because of your Retirement or Normal Retirement less than 12
months after the Grant Date, your Performance Share Units will immediately be
forfeited and your rights with respect to such Units will end.  If your
employment with the Company terminates because of your Retirement twelve or more
months after the Grant Date, you will earn a pro rata portion of your Award, if
any Award is payable with respect to the Performance Cycle, determined in
accordance with section 5 above, based on the number of full months you have
completed in the Performance Cycle applicable to the Award.  Any unearned
portion of your Award will immediately be forfeited and your rights with respect
to such Units will end.  If your employment with the Company terminates because
of your Normal Retirement twelve or more months after the Grant Date, your Award
will be determined in accordance with section 5 above, as if you had continued
active employment through the end of the Performance Cycle applicable to the
Award. Any payment shall be made as soon as practicable following the end of the
Performance Cycle.

 

9.             Change in Control.  In the event of a Change in Control of Tyco
International Ltd, unless otherwise provided in this section 9, the terms and
conditions applicable to your Award under this Agreement shall continue in
effect, except that no adjustment shall be made under section 5(b). 
Notwithstanding the preceding sentence, your Award shall vest and become
immediately payable upon a Change in Control Termination, or a Termination of
Employment by reason of a “Good Reason Resignation”, within two (2) years
following a Change In Control, which qualifies you for severance benefits under
the Tyco International Ltd. Change in Control Severance Plan for Certain U. S.
Officers and Executives (the “CIC Severance Plan”).  Any Award payable pursuant
to the preceding sentence shall be paid at the target number of Performance
Share Units specified in your Grant Letter (and shall include any DEUs credited
under section 4) as soon as practicable following your Change in Control
Termination or Good Reason Resignation upon a Change in Control.  If prior to
the Change in Control, you had satisfied the Retirement provisions of section 8
and terminated your employment because of your Retirement or Normal Retirement,
or previously terminated employment as a result of Death or Disability as
described in section 7, your Award (as determined under sections 7 and 8) shall
be paid to you as soon as practicable following the Change in Control and no
adjustment shall be made under section 5(b).

 

10.          Termination of Employment as a Result of Divestiture or
Outsourcing.  Notwithstanding any provision to the contrary in sections 6
through 9, if your involuntary Termination of Employment other than for Cause is
a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing
Agreement, you will earn a pro rata portion of your Award, if any, as is
determined in accordance with section 5 above, based on the number of full
months of service you have completed in the Performance Cycle applicable to the
Award through the closing date of the applicable transaction. Any payment shall
be made as soon as practicable following the end of the Performance Cycle, and
shall be subject to adjustment as described in section 5(b).

 

Notwithstanding the foregoing, you shall not earn any portion of your Award in
accordance with the preceding paragraph if (i) your Termination of Employment
occurs on or prior to the closing date of such Disposition of Assets or
Disposition of a Subsidiary, as applicable, or on such later date as is
specifically provided in the applicable transaction agreement, or on the
effective date of such Outsourcing Agreement applicable to you, and (ii) you are
offered Comparable Employment with the buyer, successor company or outsourcing
agent, as applicable, but do not commence such employment on the Applicable
Employment Date.

 

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For the purposes of this section 10, “Comparable Employment” is defined as
employment at a base salary rate and bonus target that is at least equal to the
base salary rate and bonus target in effect immediately prior to your
termination of employment and at a location that is no more than 50 miles from
your job location in effect immediately prior to your termination of employment;
“Disposition of Assets” shall mean the disposition by the Company or a
Subsidiary by which you are employed of all or a portion of the assets used by
the Company or Subsidiary in a trade or business to an unrelated corporation or
entity;  “Disposition of a Subsidiary” shall mean the disposition by the Company
or a Subsidiary of its interest in a subsidiary or controlled entity to an
unrelated individual or entity, provided that such subsidiary or entity ceases
to be an affiliated company as a result of such disposition; and “Outsourcing
Agreement” shall mean a written agreement between the Company or a Subsidiary
and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the
Company transfers the performance of services previously performed by employees
of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing
Agent is obligated to offer employment to any employee whose employment is being
terminated as a result of or in connection with said Outsourcing Agreement.

 

11.          Termination of Employment with Severance Benefits.  If your
Termination of Employment (i) occurs twelve months or more after the Grant Date,
(ii) is for a reason other than individual performance, and (iii) you are
eligible to receive severance benefits under a severance plan maintained by the
Company or a Subsidiary or an employment agreement, your Award will  immediately
be forfeited and your rights with respect to these Performance Share Units will
end, unless the severance plan or agreement expressly provides that you may earn
a pro rata portion your Award, if any, determined in accordance with section 5
above, based on the number of full months you have completed in the Performance
Cycle applicable to the Award. Any payment shall be made as soon as practicable
following the end of the Performance Cycle subject to adjustment as described in
section 5(b). Notwithstanding the foregoing, the Severance & Retention Plan for
Headquarters Group Move Program shall not apply to this Award.

 

12.          Withholdings.  The Company will have the right, prior to any
issuance or delivery of Shares based on your Performance Share Units, to
withhold or require from you payment of the amount necessary to satisfy
applicable tax requirements, as determined by the Committee.  If you have not
satisfied your tax withholding requirements in a timely manner, the Company will
have the right to sell the number of Shares from your Award necessary to
generate proceeds sufficient to satisfy such requirements.  In addition, the
Company shall have the right, if so provided under applicable law, to recover
any taxes relating to this Award that the Company or any of its affiliates pays
on your behalf.

 

13.          Transfer of Award.  You may not transfer any interest in
Performance Share Units except by will or the laws of descent and distribution. 
Any other attempt to dispose of your interest in Performance Share Units will be
null and void.

 

14.          Covenant; Forfeiture of Award; Agreement to Reimburse Company.

 

(a)           If you have been terminated from employment for Cause, including
without limitation a termination as a result of your violation of the Company’s
Code of Ethical Conduct, any unearned Performance Share Units shall be
immediately rescinded and you will forfeit any rights you have with respect to
such Units.  Furthermore, by not declining this Performance Share Unit Award,
you hereby agree and promise immediately to deliver to the Company the number of
Shares (or, in the discretion of the Committee, the cash value of said shares)
you received for Performance Share Units during the period beginning six
(6) months prior to your Termination of Employment for Cause and ending on the
later of (i) the second anniversary of your Termination of Employment for Cause,
Termination of Employment for Cause including, without limitation, a termination
as a result of your violation of the Company’s Code of Ethical Conduct, or
(ii) 60 days following the end of the applicable Performance Cycle.

 

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(b)           If the Committee determines, in its sole discretion, that at any
time after the Grant Date and prior to the second anniversary of your
Termination of Employment you (i) disclosed business confidential or proprietary
information related to any business of the Company or Subsidiary or (ii) have
entered into an employment or consultation arrangement (including any
arrangement for employment or service as an agent, partner, stockholder,
consultant, officer or director) with any entity or person engaged in a
business, which arrangement would likely (in the sole judgment of the Committee)
result in the disclosure of business confidential or proprietary information
related to any business of the Company or a Subsidiary to a business that is
competitive with any Company or Subsidiary business as to which you have had
access to business strategic or confidential information, and the Committee has
not approved the arrangement in writing, then any unearned Performance Share
Units will immediately be rescinded, and you will forfeit any rights you have
with respect to these Performance Share Units as of the date of the Committee’s
determination.

 

15.          Adjustments.  In the event of any stock split, reverse stock split,
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), extraordinary cash dividend, recapitalization,
merger, consolidation, split-up, spin-off, reorganization, combination,
repurchase or exchange of Shares or other securities, the issuance of warrants
or other rights to purchase Shares or other securities, or other similar
corporate transaction or event, the Committee shall adjust the number and kind
of Shares covered by the Performance Share Units and other relevant provisions
to the extent necessary to prevent dilution or enlargement of the benefits or
potential benefits intended to be provided by the Performance Share  Units.  Any
such determinations and adjustments made by the Committee will be binding on all
persons.

 

16.          Restrictions on Payment of Shares.  Payment of Shares for your
Performance Share Units is subject to the conditions that, to the extent
required at the time of vesting, (a) the Shares underlying the Performance Share
Units will be duly listed, upon official notice of redemption, on the NYSE, and
(b) a Registration Statement under the Securities Act of 1933 with respect to
the Shares will be effective.  The Company will not be required to deliver any
Common Stock until all applicable federal and state laws and regulations have
been complied with and all legal matters in connection with the issuance and
delivery of the Shares have been approved by the appropriate counsel of the
Company.

 

17.          Disposition of Securities.  By not declining the Award, you
acknowledge that you have read and understand the Company’s Insider Trading
Policy, and are aware of and understand your obligations under federal
securities laws in respect of trading in the Company’s securities.  You also
acknowledge that the Company will have the right to recover, or receive
reimbursement for, any compensation or profit realized on the disposition of
Shares received for Performance Share Units to the extent that the Company has a
right of recovery or reimbursement under applicable securities laws or under its
pay recoupment policy.

 

18.          Plan Terms Govern.  The redemption of Performance Share Units, the
disposition of any Shares received for Performance Share Units, and the
treatment of any gain on the disposition of these Shares are subject to the
terms of the Plan and any rules that the Committee may prescribe.  The Plan
document, as may be amended from time to time, is incorporated by reference into
these Terms and Conditions.  Capitalized terms used in these Terms and
Conditions have the meaning set forth in the Plan, unless otherwise stated in
these Terms and Conditions.  In the event of any conflict between the terms of
the Plan and the terms of these Terms and Conditions, the terms of the Plan will
control.  By not declining the Award, you acknowledge receipt of the Plan and
the prospectus, as in effect on the date of these Terms and Conditions.

 

19.          Personal Data.  To comply with applicable law and to administer the
Plan and these Terms and Conditions properly, the Company and its agents may
hold and process your personal data and/or sensitive personal data.  Such data
includes, but is not limited to, the information provided in this grant package
and any changes thereto, other appropriate personal and financial data about
you, and information about your participation in the Plan and Shares obtained
under the Plan from time to time.  By not declining the Award, you hereby give
your explicit consent to the Company’s processing any such personal data and/or
sensitive personal data, and you also hereby give your explicit consent to the
Company’s transfer of any such personal

 

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data and/or sensitive personal data outside the country in which you work or
reside and to the United States.  The legal persons for whom your personal data
is intended include the Company and any of its Subsidiaries (or former
Subsidiaries as are deemed necessary), the outside Plan administrator as
selected by the Company from time to time, and any other person that the Company
may find in its administration of the Plan to be appropriate.  You have the
right to review and correct your personal data by contacting your local Human
Resources Representative.  By not declining the Award, you understand and
acknowledge that the transfer of the information outlined here is important to
the administration of the Plan, and that failure to consent to the transmission
of such information may limit or prohibit your participation in the Plan.

 

20.          No Contract of Employment or Promise of Future Grants.  By not
declining the Award, you agree to be bound by these Terms and Conditions and
acknowledge that the Award is granted at the sole discretion of the Company and
is not considered part of any contract of employment with the Company or your
ordinary or expected salary or other compensation, and that the Award will not
be considered as part of such salary or compensation for purposes of any pension
benefits or in the event of severance, redundancy or resignation.  If your
employment with the Company or a Subsidiary is terminated for any reason,
whether lawfully or unlawfully, you acknowledge and agree that you will not be
entitled by way of damages for breach of contract, dismissal or compensation for
loss of office or otherwise to any sum, shares or other benefits to compensate
you for the loss or diminution in value of any actual or prospective rights,
benefits or expectation under or in relation to the Plan.

 

21.          Limitations.  Nothing in these Terms and Conditions or the Plan
gives you any right to continue in the employ of the Company or any of its
Subsidiaries or to interfere in any way with the right of the Company or any
Subsidiary to terminate your employment at any time.  Payment of your
Performance Share Units is not secured by a trust, insurance contract or other
funding medium, and you do not have any interest in any fund or specific asset
of the Company by reason of this Award or the account established on your
behalf.  You have no rights as a stockholder of the Company pursuant to the
Performance Share Units until Shares are actually delivered to you.

 

22.          Incorporation of Other Agreements.  These Terms and Conditions
(including Appendix A) and the Plan constitute the entire understanding between
you and the Company regarding the Performance Share Units.  These Terms and
Conditions supersede any prior agreements, commitments or negotiations
concerning the Performance Share Units, except as otherwise provided in section
18 above.

 

23.          Severability.  The invalidity or unenforceability of any provision
of these Terms and Conditions will not affect the validity or enforceability of
the other provisions of the Agreement, which will remain in full force and
effect.  Moreover, if any provision is found to be excessively broad in
duration, scope or covered activity, the provision will be construed so as to be
enforceable to the maximum extent compatible with applicable law.

 

24.          Delayed Payment.  Notwithstanding anything in these Terms and
Conditions to the contrary, if the Company determines that you  are a “specified
employee” within the meaning of Section 409A(a)(2)(B) of the United States
Internal Revenue Code and the regulations thereunder, and  you become entitled
to payment of Performance Units on account of your Termination of Employment,
such payment shall be delayed until six (6) months following your Termination of
Employment if the Company reasonably determines that your Award is subject to
the provisions of Section 409A of the United States Internal Revenue Code and
the regulations thereunder.  Your Award shall continue to be credited with
Dividend Equivalent Units during any such six (6) month delay period.

 

25.          Section 409A.  Payments under the Plan may be subject to
Section 409A of the Internal Revenue Code. The Committee may make such
modifications to these Terms and Conditions as it deems necessary or appropriate
to comply with Section 409A.

 

5

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By not declining this Award, you agree to and acknowledge the following:

 

(i)            you have carefully read, fully understand and agree to all of the
terms and conditions described in these Terms and Conditions and the Plan; and

 

(ii)           you understand and agree that these Terms and Conditions and the
Plan constitute a binding agreement between you and the Company and represent
the entire understanding between you and the Company regarding the Award, and
that any prior agreements, commitments or negotiations concerning the
Performance Share Units are replaced and superseded.

 

You will be deemed to consent to the application of the terms and conditions set
forth in these Terms and Conditions and the Plan unless you contact Tyco
International Ltd., c/o Equity Plan Administration, 9 Roszel Road, Princeton,
NJ  08540 in writing within sixty (60) days of the date of these Terms and
Conditions.  Notification of your non-consent will nullify this grant unless
otherwise agreed to in writing by you and the Company.

 

 

 

 

 

Edward D. Breen

 

Chairman of the Board

 

and Chief Executive Officer,

 

Tyco International, Ltd.

 

6

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Tyco International Ltd.
2004 Stock and Incentive Plan (the “Plan”)

 

TERMS AND CONDITIONS

OF

RESTRICTED UNIT AWARD

 

RESTRICTED UNIT AWARD made in Princeton, New Jersey, as of [              ] (the
“Grant Date”).

 

1.             Grant of Award.  Tyco International Ltd. (the “Company) has
granted you Restricted Units, as described in the grant notification letter that
was issued to you (“Grant Letter”), subject to the provisions of these Terms and
Conditions.  The Company will hold the Restricted Units in a bookkeeping account
on your behalf until they become payable or are forfeited or cancelled.

 

2.             Payment Amount.  Each Restricted Unit represents the right to
receive, upon vesting, one (1) Share of Common Stock.

 

3.             Form of Payment.  Vested Restricted Units will be redeemed solely
for Shares, subject to sections 14 and 15.

 

4.             Dividends.  For each Restricted Unit that remains outstanding,
you will be credited with a Dividend Equivalent Unit (DEU) for any cash
dividends distributed by the Company on Company Common Stock.  DEUs will be
calculated at the same dividend rate paid to other holders of Common Stock. 
DEUs will vest in accordance with the vesting schedule applicable to the
underlying Units and shall be payable at the same time that the underlying units
are payable as provided herein.

 

5.             Vesting.  Except in the event of your Normal Retirement
(Termination of Employment on or after age 60 if the sum of your age and full
years of service with the Company is at least 70), Retirement (Termination of
Employment on or after age 55 if the sum of your age and full years of service
with the Company is at least 60), Termination of Employment, Death or Disability
or a Change in Control, your Restricted Units will vest in installments of one
fourth (1/4) of the Shares specified in your Grant Letter per year over four
(4) years. Your vested right will be calculated on the anniversary of the Grant
Date.  No credit will be given for periods following Termination of Employment,
except as specifically provided herein. Except as otherwise provided in these
Terms and Conditions, any payment shall be made to you as soon as practicable
following the vesting date set forth in this section 5.

 

6.             Termination of Employment.  In connection with your Termination
of Employment for a reason other than as described in sections 7, 8, 9 or 10
below, any Restricted Units that have not vested as of your Termination of
Employment will immediately be forfeited, and your rights with respect to such
Units will end. “Termination of Employment” means the date of cessation of an
Employee’s employment relationship with the Company or a Subsidiary

 

1

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for any reason, with or without Cause, as determined by the Company. The
Severance & Retention Plan for Headquarters Group Move Program shall not apply
to this Award.

 

7.             Death or Disability.  If your Termination of Employment is the
result of your Death or Disability, your Award will become fully vested as of
your Termination of Employment.  In the event that your Termination of
Employment is a result of your Death, the Company will make a payment to your
estate within 90 days following your death.  In the event that your Termination
of Employment is a result of your Disability, any payment shall be made to you
as soon as practicable following your Termination of Employment.

 

8.             Retirement.  If your Termination of Employment is the result of
your Retirement or Normal Retirement (as defined in section 5) less than twelve
months after the Grant Date, your Restricted Units will immediately be forfeited
and your rights with respect to such Units will end. If your Termination of
Employment is a result of your Retirement twelve or more months after the Grant
Date, your Restricted Units will vest pro rata (in full year increments) based
on the following formula: the number of whole years of service that you have
completed from the Grant Date through your Date of Termination divided by the
original number of years of the vesting period, times the difference between
(a) the total number of shares awarded under the Grant and (b) the number of
shares previously vested.  Any unearned portion of your Award will immediately
be forfeited and your rights with respect to such Units will end.  If your
Termination of Employment is a result of your Normal Retirement, your Restricted
Units will immediately become fully vested. Any payment shall be made to you as
soon as practicable following your Termination of Employment (adjusted to
reflect any payments previously made to you under section 5).

 

9.             Change in Control.  In the event of a Change in Control of Tyco
International Ltd., and your Change in Control Termination or a Termination of
Employment by reason of a “Good Reason Resignation” which qualifies you for
severance benefits under the Tyco International Change in Control Severance Plan
for Certain U. S. Officers and Executives (the “CIC Severance Plan”) within two
(2) years following a Change in Control, Restricted Units will immediately
become fully vested and payment shall be made as soon as practicable following
such Change in Control Termination or Good Reason Resignation.

 

10.          Termination of Employment as a Result of Divestiture or
Outsourcing.  Notwithstanding any provision to the contrary in sections 6
through 9, if your involuntary Termination of Employment other than for Cause is
as a result of a Disposition of Assets, Disposition of a Subsidiary or
Outsourcing Agreement, your Restricted Unit Award will vest pro rata (in
full-month increments) based on the following formula: the number of whole
months of service that you have completed from the Grant Date through the
closing date of the applicable transaction divided by the original number of
months of the vesting period, times the difference between (a) the total number
of shares awarded under the Grant and (b) the number of shares previously
vested.  Any payment shall be made to you as soon as practicable following the
date you vest.

 

Notwithstanding the foregoing, you shall not be eligible for such pro-rata
vesting if, (i) your Termination of Employment occurs on or prior to the closing
date of such Disposition of Assets or Disposition of a Subsidiary, as
applicable, or on such later date as is specifically

 

2

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provided in the applicable transaction agreement or related agreements, or on
the effective date of such Outsourcing Agreement applicable to you (the
“Applicable Employment Date”), and (ii) you are offered Comparable Employment
with the buyer, successor company or outsourcing agent, as applicable, but do
not commence such employment on the Applicable Employment Date.

 

For the purposes of this section 10, “Comparable Employment” shall mean
employment at a base salary rate and bonus target that is at least equal to the
base salary rate and bonus target in effect immediately prior to your
termination of employment and at a location that is no more than 50 miles from
your job location in effect immediately prior to your termination of employment;
“Disposition of Assets” shall mean the disposition by the Company or a
Subsidiary by which you are employed of all or a portion of the assets used by
the Company or Subsidiary in a trade or business to an unrelated corporation or
entity; “Disposition of a Subsidiary” shall mean the disposition by the Company
or a Subsidiary of its interest in a subsidiary or controlled entity to an
unrelated individual or entity, provided that such subsidiary or entity ceases
to be an affiliated company as a result of such disposition; and “Outsourcing
Agreement” shall mean a written agreement between the Company or a Subsidiary
and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the
Company transfers the performance of services previously performed by employees
of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing
Agent is obligated to offer employment to any employee whose employment is being
terminated as a result of or in connection with said Outsourcing Agreement.

 

11.          Withholdings; Tax Recovery.  The Company will have the right, prior
to any issuance or delivery of Shares on your Restricted Units, to withhold or
require from you payment of the amount necessary to satisfy applicable tax
requirements, as determined by the Compensation and Human Resources Committee
(the “Committee”).  If you have not satisfied your tax withholding requirements
in a timely manner, the Company will have the right to sell the number of Shares
from your Award necessary to generate proceeds sufficient to satisfy such
requirements. In addition, the Company shall have the right, if so provided
under local law, to recover any taxes relating to this Award that the Company or
any affiliate pays on your behalf.

 

12.          Transfer of Award.  You may not transfer any interest in Restricted
Units except by will or the laws of descent and distribution.  Any other attempt
to dispose of your interest in Restricted Units will be null and void.

 

13.          Forfeiture of Award; Confidentiality; Non-Competition;
Non-Solicitation; Agreement to Reimburse Company.

 

(a) If you have been terminated from employment for Cause, including without
limitation a termination as a result of your violation of the Company’s Code of
Ethical Conduct, any unvested Restricted Units shall be immediately rescinded
and you will forfeit any rights you have with respect to such Units.
Furthermore, by accepting this Award and not declining this Award, you agree and
promise immediately to deliver to the Company the number of Shares (or, in the
discretion of the Committee, the cash value of said shares) you received for
Restricted Units that vested or were delivered during the period beginning six
(6) months prior to your Termination of Employment for Cause and ending on the
6-month anniversary of your

 

3

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Termination of Employment for Cause, including, without limitation, a
termination as a result of your violation of the Company’s Code of Ethical
Conduct.

 

(b) You agree that during your employment with the Company or its Subsidiaries,
and thereafter, you will not disclose confidential or proprietary information,
or trade secrets, related to any business of the Company or the Subsidiary. 
Except as prohibited by law, you agree that during your employment with the
Company or its Subsidiaries, and for the one (1) year period following your
Termination of  Employment for any reason, you will not directly or indirectly,
own, manage, operate, control (including indirectly through a debt or equity
investment), provide services to, or be employed by, any person or entity
engaged in any business that is (i) located in a region with respect to which
you had substantial responsibilities while employed by the Company or its
Subsidiaries, and (ii) competitive, with (A) the line of business or businesses
of the Company or its Subsidiaries that you were employed with during your
employment (including any prospective business to be developed or acquired that
was proposed at the date of termination), or (B) any other business of the
Company or its Subsidiaries with respect to which you had substantial exposure
during such employment.

 

Except as prohibited by law, you further agree that during your employment with
the Company or its Subsidiaries, and for the two (2) year period thereafter, you
will not, directly or indirectly, on your own behalf or on behalf of another
(i) solicit, recruit, aid or induce any employee of the Company or any of its
Subsidiaries to leave their employment with the Company or its Subsidiaries in
order to accept employment with or render services to another person or entity
unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any
action to assist or aid any other person or entity in identifying or hiring any
such employee, or (ii) solicit, aid, or induce any customer of the Company or
any of its Subsidiaries to purchase goods or services then sold by the Company
or its Subsidiaries from another person or entity, or assist or aid any other
persons or entity in identifying or soliciting any such customer, or
(iii) otherwise interfere with the relationship of the Company or any of its
Subsidiaries with any of its employees, customers, agents, or representatives.

 

Irreparable injury will result to the Company, and to its business, in the event
of a breach by you of any of your covenants and commitments under this
Agreement, including the covenants of non-competition and non-solicitation. 
Therefore, in the event of a breach of such covenants and commitments, in the
sole discretion of the Company, any of your unvested Restricted Units shall be
immediately rescinded and you will forfeit any rights you have with respect to
such Units. Furthermore, by accepting the award, and not declining the award, in
the event of such a breach, upon demand by the Company, you hereby agree and
promise immediately to deliver to the Company the number of Shares (or, in the
discretion of the Committee, the cash value of said shares) you received for
Restricted Units that vested or were delivered during the period beginning six
(6) months prior to your Termination of Employment and ending on the six
(6) month anniversary of your Termination of Employment.  In addition, the
Company reserves all rights to seek any and all remedies and damages permitted
under law, including, but not limited to, injunctive relief, equitable relief
and compensatory damages.

 

4

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14.          Adjustments.  In the event of any stock split, reverse stock split,
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), extraordinary cash dividend, recapitalization,
merger, consolidation, split-up, spin-off, reorganization, combination,
repurchase or exchange of Shares or other securities, the issuance of warrants
or other rights to purchase Shares or other securities, or other similar
corporate transaction or event, the Committee shall adjust the number and kind
of Shares covered by the Restricted Units and other relevant provisions to the
extent necessary to prevent dilution or enlargement of the benefits or potential
benefits intended to be provided by the Restricted Units.  Any such
determinations and adjustments made by the Committee will be binding on all
persons.

 

15.          Restrictions on Payment of Shares.  Payment of Shares for your
Restricted Units is subject to the conditions that, to the extent required at
the time of delivery, (a) the Shares underlying the Restricted Units will be
duly listed, upon official notice of redemption, on the NYSE, and (b) a
Registration Statement under the Securities Act of 1933 with respect to the
Shares will be effective.  The Company will not be required to deliver any
Common Stock until all applicable federal and state laws and regulations have
been complied with and all legal matters in connection with the issuance and
delivery of the Shares have been approved by the appropriate counsel of the
Company.

 

16.          Disposition of Securities.  By accepting the Award and not
declining the Award, you acknowledge that you have read and understand the
Company’s Insider Trading Policy, and are aware of and understand your
obligations under federal securities laws in respect of trading in the Company’s
securities.  You also acknowledge that the Company will have the right to
recover, or receive reimbursement for, any compensation or profit realized on
the disposition of Shares received for Restricted Units to the extent that the
Company has a right of recovery or reimbursement under applicable securities
laws or under its pay recoupment policy.

 

17.          Plan Terms Govern.  The redemption of Restricted Units, the
disposition of any Shares received for Restricted Units, and the treatment of
any gain on the disposition of these Shares are subject to the terms of the Plan
and any rules that the Committee may prescribe.  The Plan document, as may be
amended from time to time, is incorporated by reference into these Terms and
Conditions.  Capitalized terms used in these Terms and Conditions have the
meaning set forth in the Plan, unless otherwise stated in these Terms and
Conditions.  Except with respect to the choice of law provision, in the event of
any conflict between the terms of the Plan and the terms of these Terms and
Conditions, the terms of the Plan will control.  By accepting the Award and not
declining the Award, you acknowledge receipt of the Plan and the prospectus, as
in effect on the date of these Terms and Conditions.

 

18.          Personal Data.  To comply with applicable law and to administer the
Plan and these Terms and Conditions properly, the Company and its agents may
hold and process your personal data and/or sensitive personal data.  Such data
includes, but is not limited to, the information provided in this grant package
and any changes thereto, other appropriate personal and financial data about
you, and information about your participation in the Plan and Shares obtained
under the Plan from time to time.  By accepting the Award and not declining the
Award, you hereby give your explicit consent to the Company’s processing any
such personal data and/or sensitive personal data, and you also hereby give your
explicit consent to the Company’s transfer of any such personal data and/or
sensitive personal data outside the country

 

5

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in which you work or reside and to the United States.  The legal persons for
whom your personal data is intended include the Company and any of its
Subsidiaries (or former Subsidiaries as are deemed necessary), the outside Plan
administrator as selected by the Company from time to time, and any other person
that the Company may find in its administration of the Plan to be appropriate. 
You have the right to review and correct your personal data by contacting your
local Human Resources Representative.  By accepting the Award and not declining
the Award, you understand and acknowledge that the transfer of the information
outlined here is important to the administration of the Plan, and that failure
to consent to the transmission of such information may limit or prohibit your
participation in the Plan.

 

19.          No Contract of Employment or Promise of Future Grants.  By
accepting the Award and not declining the Award, you agree to be bound by these
Terms and Conditions and acknowledge that the Award is granted at the sole
discretion of the Company and is not considered part of any contract of
employment with the Company or your ordinary or expected salary or other
compensation, and that the Award will not be considered as part of such salary
or compensation for purposes of any pension benefits or in the event of
severance, redundancy or resignation.  If your employment with the Company or a
Subsidiary is terminated for any reason, whether lawfully or unlawfully, you
acknowledge and agree that you will not be entitled by way of damages for breach
of contract, dismissal or compensation for loss of office or otherwise to any
sum, shares or other benefits to compensate you for the loss or diminution in
value of any actual or prospective rights, benefits or expectation under or in
relation to the Plan.

 

20.          Limitations.  Nothing in these Terms and Conditions or the Plan
gives you any right to continue in the employ of the Company or any of its
Subsidiaries or to interfere in any way with the right of the Company or any
Subsidiary to terminate your employment at any time.  Payment of your Restricted
Units is not secured by a trust, insurance contract or other funding medium, and
you do not have any interest in any fund or specific asset of the Company by
reason of this Award or the account established on your behalf.  You have no
rights as a stockholder of the Company pursuant to the Restricted Units until
Shares are actually delivered to you.

 

21.          Incorporation of Other Agreements.  These Terms and Conditions and
the Plan constitute the entire understanding between you and the Company
regarding the Restricted Units.  These Terms and Conditions supercede any prior
agreements, commitments or negotiations concerning the Restricted Units, except
as otherwise provided in section 17 above.

 

22.          Severability.  The invalidity or unenforceability of any provision
of these Terms and Conditions will not affect the validity or enforceability of
the other provisions of the Agreement, which will remain in full force and
effect.  Moreover, if any provision is found to be excessively broad in
duration, scope or covered activity, the provision will be construed so as to be
enforceable to the maximum extent compatible with applicable law.

 

23.          Delayed Payment.  Notwithstanding anything in these Terms and
Conditions to the contrary, if the Company determines that you are a “specified
employee” within the meaning of Section 409A(a)(2)(B) of the United States
Internal Revenue Code and the regulations thereunder, and you become entitled to
payment of Restricted Units on account of your Termination of Employment, such
payment shall be delayed until six (6) months following your

 

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Termination of Employment if the Company reasonably determines that your Award
is subject to the provisions of Section 409A of the United States Internal
Revenue Code and the regulations thereunder.  Your Award shall continue to be
credited with Dividend Equivalent Units during any such six (6) month delay
period.

 

24.          Compliance with Section 409A.  Payments under the Plan may be
subject to Section 409A of the Internal Revenue Code. The Committee may make
such modifications to these Terms and Conditions as it deems necessary or
appropriate to comply with Section 409A.

 

25.          Governing Law.  The validity, interpretation, construction and
performance of these Terms and Conditions shall be governed by the laws of the
state of New Jersey without reference to principles of conflicts of laws that
would direct the application of the law of any other jurisdiction.

 

26.          Acceptance of Terms and Conditions.  By physically acknowledging
this Award you agree to and acknowledge the following:

 

(i)            you have carefully read, fully understand and agree to all of the
terms and conditions described in these Terms and Conditions;

 

(ii)           you understand and agree that these Terms and Conditions
constitute a binding agreement between you and the Company and represent the
entire understanding between you and the Company regarding the Award, and that
any prior agreements, commitments or negotiations concerning the Restricted
Units are replaced and superseded;

 

(iii)          you acknowledge the authority of the Committee to administer and
interpret these Terms and Conditions and the terms and conditions set forth in
the Plan; and

 

(iv)          you acknowledge that these Terms and Conditions contain a
noncompetition provision that may impact your ability to perform certain
services in the future.

 

Failure to affirmatively reject this Award before December 11, 2010 will result
in your immediate and automatic acceptance of this Award and the Terms and
Conditions under which this Award is governed, including the noncompetition
provision contained therein.  You must therefore reject this Award or
acknowledge these Terms and Conditions by returning the enclosed Acceptance
Form to Tyco International Ltd., c/o Equity Plan Administration, 9 Roszel Road,
Princeton, NJ  08540 including your written signature within ninety (90) days of
the date of these Terms and Conditions.  Notification of your rejection will
nullify this grant unless otherwise agreed to in writing by you and the Company.

 

 

 

 

 

Edward D. Breen

 

Chairman of the Board

 

and Chief Executive Officer,

 

Tyco International, Ltd.

 

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