Exhibit 10.6


Tyco
International Ltd 

2004 Stock and Incentive Plan


TERMS AND CONDITIONS


OF


OPTION AWARD


OPTION AWARD made in
Princeton, New Jersey, as of July 2, 2007 (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 cumulative
installments as follows: one fourth (1/4) of the Shares specified in your Grant
Letter, one (1) year from the Grant Date; an additional one fourth (1/4) of the
Shares, two (2) years from the Grant Date; an additional one fourth (1/4) of
the Shares, three (3) years from the Grant Date; and the remaining one fourth
(1/4), four (4) years from the Grant Date. 
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
next 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 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













discretion, waives this
6-month period) and that have an aggregate Fair Market Value as of the day
prior to the 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 and 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 UBS Financial
Services Inc. at
877-                      
if calling from within the U.S. or
001-                            if
calling from outside the U.S., or 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 paragraph 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 paragraph 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 paragraph 9 or 10.

  
	
  Involuntary
  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 paragraph 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 (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 paragraph 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, as defined in the Plan document, 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 your Termination of Employment following the
date of Change in Control.


9.             Termination of Employment as a Result of Divestiture or Outsourcing.  Notwithstanding provisions to the contrary in
paragraph 7, if your involuntary Termination of Employment other than for Cause
is as a result of a Disposition of Assets, Disposition of a



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Subsidiary or Outsourcing Agreement, your Option Award will vest
on a pro-rata basis based on (i) the number of whole months completed from
Grant Date through the closing date of the applicable transaction over the
original number of months of the vesting period, times (ii) the total number of
shares awarded under the Option minus (iii) 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, (i) “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; (ii) “Disposition of
Assets” shall mean the disposition by the Company or a Subsidiary 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; (iii) “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 (iv) “Outsourcing Agreement” shall mean a written
agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing
Agent”) pursuant to which (a) the Company transfers the performance of services
previously performed by employees of the Company or Subsidiary to the
Outsourcing Agent, and (b) the Outsourcing Agreement includes an obligation of
the Outsourcing Agent 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 or (ii) twelve months
after the date of your Termination of Employment or such later date as is
applicable under paragraph 7.  If you
Termination of Employment occurs less than twelve



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months after the Grant
Date your unvested Options will be forfeited as of your Termination of
Employment.


11.           Withholdings.  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 the amount necessary to satisfy
applicable tax requirements, as determined by the Committee.  The methods described in paragraph 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 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.  In addition, you hereby 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 and ending on the 6 month anniversary of your
Termination of Employment.


(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 and (a) such employment or
consultation 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 (b) 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,



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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,
upon 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
counsel of the Company.  Notwithstanding
this Statement of Terms and Conditions, Optionee may exercise the Option only
pursuant to the “broker-assisted cashless exercise” method described in Section
5(i) of this Statement of Terms and conditions if so restricted by local law at
the time of exercise.


16.           Disposition of Securities.  By accepting 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 use the
Company’s “cashless exercise” program (or any successor program) at any time
when you possess material nonpublic information with respect to the Company or
when using the program would otherwise result in a violation of securities
law.  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.


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
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
Plan will control.  By accepting the
Award, you acknowledge receipt of the Plan, as in effect on the date of these
Terms and Conditions.



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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, you hereby give your explicit consent to the Company’s processing any
such personal data and/or sensitive personal data.  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
are 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.  You understand 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, 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 of your ordinary or expected salary or other compensation and 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
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.


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



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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.           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.


By accepting this
Award, you agree to 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 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 thirty (30) 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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