Exhibit 10.1


 


AMENDED
AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) dated as of December 19,
2008 (the “Effective Date”),
between Tyco International Ltd. (the “Company”) , and Edward D. Breen (the “Executive”).


 


W I T N E S S E T H:


 


WHEREAS,
the Company desires to continue to employ the Executive as President and Chief
Executive Officer of the Company and to have the Executive continue also to
serve as Chairman, President and Chief Executive Officer of the Company; WHEREAS, the Company and the Executive
desire to enter into the Agreement as to the continued terms of his employment
by the Company;


 


NOW THEREFORE,
in consideration of the foregoing, of the mutual promises contained herein and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:


 


1.             Position/Duties.


 


(a)           During the Employment Term (as defined in Section 2
below), the Executive shall serve as the Chairman (subject to the provisions of
Section 1(c) below), President and Chief Executive Officer of the
Company.  In these capacities the
Executive shall have such duties, authorities and responsibilities commensurate
with the duties, authorities and responsibilities of persons in similar
capacities in similarly sized companies and such other duties and
responsibilities as the Board of Directors of the Company (the “Board”) shall designate that are consistent
with the Executive’s positions as Chairman, President and Chief Executive
Officer of the Company.  The Executive
shall report exclusively to the Board.


 


(b)           During the Employment Term, the Executive shall devote
substantially all of his business time (excluding periods of vacation and other
approved leaves of absence) to the performance of his duties with the Company,
provided the foregoing shall not prevent the Executive from (i) participating
in charitable, civic, educational, professional, community or industry affairs
or, with prior written approval of the Board, serving on the board of directors
or advisory boards of other companies; and (ii) managing his and his
family’s personal investments so long as such activities do not materially
interfere with the performance of his duties hereunder or create a potential
business conflict or the appearance thereof. 
If at any time service on any board of directors or advisory board
would, in the good faith judgment of the Board, conflict with the Executive’s
fiduciary duties to the Company or create any appearance thereof, the Executive
shall promptly resign from such other board of directors or advisory board
after written notice of the conflict is received from the Board.  Service on the boards of directors and/or advisory
boards disclosed by the Executive to the Company as of the Effective Date are
hereby approved.


 


(c)           During the Employment Term, the Board shall nominate the
Executive for re-election as a member of the Board at the expiration of his
then current term.


 

















 


(d)           The Executive acknowledges and agrees that he shall be on
the Company’s payroll and that the Company is his employer, as well as the
payer and obligor with respect to the payment or provision of compensation and
benefits under this Agreement, subject to the provisions of Section 25.  The Executive further agrees that as part of
his employment by the Company, he shall serve without additional compensation
as an officer and director of any of the Company’s subsidiaries or affiliates
and agrees that any amounts received from such corporation may be offset
against the amounts due hereunder.  In
addition, it is agreed that the Company may assign the Executive to one of its
subsidiaries for payroll purposes.


 


2.             Employment Term.  The Executive’s term of employment under this
Agreement (such term of employment, as it may be extended or terminated, is
herein referred to as the “Employment Term”)
shall be for a term commencing on the Effective Date and, unless terminated
earlier as provided in Section 7 hereof, ending on July 25, 2009 (the
“Original Employment Term”),
provided that the Employment Term shall be automatically extended, subject to
earlier termination as provided in Section 7 hereof, for successive one (1) year
periods (the “Additional Terms”),
unless, at least 30 days prior to the end of the Original Employment Term or
the then Additional Term, the Company or the Executive has notified the other
in writing that the Employment Term shall terminate at the end of the then
current term.


 


3.             Base Salary.  The Company agrees to pay the Executive a
base salary (the “Base Salary”) at
an annual rate of not less than US $1,625,000, payable in accordance with the
regular payroll practices of the Company, but not less frequently than
monthly.  The Executive’s Base Salary
shall be subject to annual review by the Board (or a committee thereof) and may
be increased, but not decreased, from time to time by the Board.  No increase to Base Salary shall be used to
offset or otherwise reduce any obligations of the Company to the Executive
hereunder or otherwise.  The base salary
as determined herein from time to time shall constitute “Base Salary” for
purposes of this Agreement.


 


4.             Annual Bonus.  During the Employment Term the Executive
shall be eligible to participate in the bonus and other incentive compensation
plans and programs for the Company’s senior executives at a level commensurate
with his position.  The Executive shall
have the opportunity to earn an annual target bonus measured against objective
financial criteria to be determined by the Board (or a committee thereof) of at
least 100% of Base Salary.


 


5.             Equity Awards.


 


(a)           Equity Awards.  At the sole discretion of the Board or the
Committee, the Executive shall be eligible for annual grants of the Company’s
stock options and other equity awards.


 


(b)           Acceleration Events.  If (i) the Executive’s employment by the
Company is terminated by the Company other than for Cause or Disability or by
the Executive for Good Reason or (ii) Change in Control (as defined in Exhibit A
hereto) occurs, all then outstanding unvested equity awards shall be fully
vested and, in the case of (i), any Company stock option then held by the
Executive shall remain exercisable until the expiration of the initial 10 year
term, subject to earlier termination in accordance with the terms of the
applicable Company 


 


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equity incentive plan under which such stock option was
granted and related terms and conditions (other than those related to
termination of employment).


 


6.             Employee Benefits.


 


(a)           Benefit Plans.  The Executive shall be entitled to
participate in all employee benefit plans covering Company senior executives
and other salaried employees including, but not limited to, equity, pension,
thrift, profit sharing, medical coverage, education, or other retirement or
welfare benefits that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its senior executives at a level commensurate
with his positions subject to satisfying the applicable eligibility
requirements.  Such benefits, in the
aggregate, shall be no less favorable than the level of benefits in effect on
the Effective Date; provided, however, that in the event there is a reduction
of employee benefits applicable to senior executives generally, nothing herein
shall preclude the Company’s ability to reduce the Executive’s benefits
consistent with such reduction.  Without
limiting the generality of the foregoing, during the Employment Term, the
Company will pay the annual scheduled level premium on a variable universal
life insurance policy on the Executive’s life owned by the Executive with a
face amount of at least U.S. $3,000,000.


 


(b)           Supplemental Retirement
Benefit.


 


(i)            Subject to the provisions of
this Section 6(b), the Executive shall be entitled to receive an annual
supplemental retirement benefit (the “Supplemental Retirement Benefit”) payable
at the later of age 60 and Separation from Service (as defined below) in the
form of a joint and 50% spousal survivor’s annuity (based on the Executive’s
current spouse’s then actual or would have been age) equal to 50% of the
Executive’s Final Average Earnings (as defined below), reduced by (A) benefits
from any defined benefit pension plans (whether or not tax-qualified)
maintained (or formerly maintained) by the Company or its affiliates or by
benefits from any defined benefit pension plans (whether or not tax-qualified)
maintained (or formerly maintained) by any previous employers (in each case
converted into a joint and 50% spousal survivor’s annuity (based on the
Executive’s current spouse’s then actual or would have been age) commencing on
the date of commencement of benefits hereunder, if necessary) and (B) benefits
attributable to employer contributions, including, without limitation, matching
contributions but not salary reduction contributions, to any defined
contribution plans maintained by the Company or its affiliates (whether or not
tax-qualified) based on theoretical annual earnings after July 25, 2002
equal in each year to the prime rate (as reported in The Wall Street Journal)
on the first business day of each year and on July 25, 2002 for 2002.


 


(ii)           In the event of the
Executive’s voluntary termination of employment without Good Reason or the
Executive’s termination for Cause prior to age 60, the Supplemental Retirement
Benefit shall be reduced by .25% for each month or partial month the
termination date is prior to age 60.


 


(iii)          Due
to the Executive’s service with the Company since July 25, 2002, he is
fully vested in his Supplemental Retirement Benefit under this subsection (b).


 


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(iv)          The Executive shall receive
an immediate lump sum distribution of his Supplemental Retirement Benefit upon
the occurrence of a Change in Control that is also a change in the
ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company (as such terms are defined in
Treasury Regulation Sections 1.409A-3(i)(5)(v), (vi) and (vii)).  Such
distribution shall be actuarially adjusted using the then current PBGC interest
rate and mortality table for immediate annuities.  Upon such distribution, the Executive shall
accrue no further benefits under this Section 6(b).  In addition, the Executive shall receive at
such time and in such form all benefits payable to the Executive under any
deferred compensation plan subject to Code Section 409A if such benefits
are used as an offset in calculating the Supplemental Retirement Benefit
payable under the terms of subsection (b)(i) (including, without
limitation, the Executive’s benefits payable under the Company’s Supplemental
Executive Retirement Plan and Supplemental Savings and Retirement Plan).


 


(v)           Except as otherwise provided
in subsection (b)(iv) above, the Executive shall receive his Supplemental
Retirement Benefit in a lump sum distribution (determined on the basis of the
then prevailing PBGC interest and mortality table rate for immediate annuities)
upon the later to occur of (A) the Executive’s 60th birthday or
(B) the Executive’s Separation from Service, other than as a result of
death (subject to any applicable 6-month delay pursuant to Code Section 409A).  In addition, the Executive shall receive at
such time and in such form all benefits payable to the Executive under any
deferred compensation plan subject to Code Section 409A if such benefits
are used as an offset in calculating the Supplemental Retirement Benefit
payable under the terms of subsection (b)(i) (including, without
limitation, the Executive’s benefits payable under the Company’s Supplemental
Executive Retirement Plan and Supplemental Savings and Retirement Plan).


 


(vi)          In the event of the
Executive’s death while an employee of the Company prior to the date of
commencement of benefits, a lump sum death benefit shall be paid to the
Executive’s surviving spouse, if any, within 90 days of the date of the
Executive’s death, with the amount of such lump sum death benefit being the
actuarial equivalent of the benefit which would have been payable to the spouse
assuming the Executive had terminated the day preceding the date of death,
commenced receiving benefits in the form of a joint and 50% spousal survivor’s
annuity and then died (determined on the basis of the then prevailing PBGC
interest and mortality table rate for immediate annuities and without regard to
any reduction for the Executive’s termination prior to attainment of age 60
under subsection (b)(ii)).


 


(vii)         The calculation of the
adjustments for the offset or alternative forms of benefits payable pursuant to
this Section 6(b) (except as provided in subsections (iv), (v) and
(vi) above) shall be based upon actuarial assumptions selected by an
independent actuary selected by the Company and reasonably acceptable to the
Executive (or his surviving spouse, if applicable).  The calculation of the actuary shall be final
and binding on all persons provided it was made in good faith.  The benefits payable pursuant to this Section 6(b) shall
be unfunded and the Executive will not be considered to have received a taxable
economic benefit prior to the time at which benefits are actually payable
hereunder.  Accordingly, the Company or
its affiliates shall not be 


 


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required to segregate any of
their assets for the benefit of the Executive and the Executive shall have only
a contractual right against the Company for the benefits payable
hereunder.  The benefits payable pursuant
to this Section 6(b) shall not be subject to alienation, transfer,
assignment, garnishment, execution or levy of any kind, including without
limitation under any domestic relations order, and any attempt to cause any
benefits to be so subjected shall not be recognized and shall be null and void.


 


(viii)        “Final Average Earnings” shall
mean the Executive’s highest average of the sum of the Executive’s monthly base
salary and actual annual bonus (spread equally over the bonus period for which
it is paid) during any consecutive 36 month period (or lesser period of actual
employment) during the period of 60 complete months (or lesser period of actual
employment) immediately preceding the Executive’s termination of employment,
but in no event less than the sum of the Executive’s initial Base Salary and
initial target bonus.


 


(ix)           “Separation from Service”
shall mean the Executive’s death, retirement or other termination of
employment with the Company and all affiliates. 
For purposes of this definition, a “termination of employment” shall
occur when the facts and circumstances indicate that the Company and the
Executive reasonably anticipate that no further services would be performed by
the Executive for the Company and any affiliate after a certain date or that
the level of bona fide services
the Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than 20% of the
average level of bona fide
services performed (whether as an employee or as an independent contractor)
over the immediately preceding 36-month period.


 


(c)           Vacations.  The Executive shall be entitled to an annual
paid vacation in accordance with the Company’s policy applicable to senior
executives, but in no event less than four weeks per year (as prorated for
partial years), which vacation may be taken at such times as the Executive
elects with due regard to the needs of the Company.


 


(d)           Perquisites.  The Company shall provide to the Executive,
at the Company’s cost, all perquisites which other senior executives of the
Company are generally entitled to receive. 
To the extent that the Executive’s permanent residence is outside of New
York and to the extent that the Executive becomes subject to New York City or
New York State taxes because of temporary assignment or other performance of
his duties, the Company shall gross-up the Executive for tax purposes so that
he is in the same position as if he were not subject to such taxes.


 


(e)           Business and Entertainment
Expenses.  Upon presentation of appropriate
documentation, the Executive shall be reimbursed in accordance with the Company’s
expense reimbursement policy for all reasonable and necessary business and
entertainment expenses incurred in connection with the performance of his
duties hereunder.


 


(f)            Travel.  The Company shall provide the Executive and
his family with personal safety and security protection as appropriate and
reasonable under the circumstances.  The
parties recognize that such security protection may include use by the
Executive and his 


 


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family of private transportation methods, including private
air travel, for both business and personal purposes.  Without limiting the foregoing, the Executive
shall have access to first class commercial air travel or use of private
aircraft for business travel.


 


7.             Termination.  The Executive’s employment and the Employment
Term shall terminate on the first of the following to occur:


 


(a)           Disability.  Upon written notice by the Company to the
Executive of termination due to Disability, while the Executive remains
Disabled.  For purposes of this
Agreement, “Disability” shall be defined as the inability of the Executive to
have performed his material duties hereunder due to a physical or mental
injury, infirmity or incapacity for 180 days (including weekends and holidays)
in any 365-day period.  The existence or
nonexistence of a Disability shall be determined by an independent physician
selected by the Company and reasonably acceptable to Executive.


 


(b)           Death.  Automatically on the date of death of the
Executive.


 


(c)           Cause.  Immediately upon written notice by the
Company to the Executive of a termination for Cause.  “Cause” shall mean:


 


(i)            The Executive shall have
been indicted for a felony other than one based on Limited Vicarious Liability,
or


 


(ii)           The termination is evidenced
by a resolution adopted in good faith by at least two-thirds of the members of
the Board concluding that Executive:


 


(A)          intentionally and
continually failed substantially to perform his reasonably assigned duties with
the Company (other than a failure resulting from Executive’s incapacity due to
physical or mental illness or from the assignment to Executive of duties that
would constitute Good Reason), which failure has continued for a period of at
least 30 days after a written notice of demand for substantial performance,
signed by a duly authorized member of the Board, has been delivered to
Executive specifying the manner in which Executive has failed substantially to
perform, or


 


(B)           intentionally engaged in
conduct which is demonstrably and materially injurious to the Company;
provided, however, that no termination of Executive’s employment shall be for
Cause as set forth in subsection (B) until (1) there shall have
been delivered to Executive a copy of a written notice, signed by a duly
authorized member of the Board, stating that Executive was guilty of the
conduct set forth in subsection (B) and specifying the particulars
thereof in detail, and (2) Executive shall have been provided an
opportunity to be heard in person by the Board (with the assistance of
Executive’s counsel if Executive so desires).


 


(iii)          Notwithstanding anything in
the foregoing to the contrary, if the Executive has been terminated ostensibly
for Cause because he has been indicted for a felony (other than one involving
Limited Vicarious Liability), and he is not convicted of, 


 


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or does not plead guilty or
nolo contendere to, such felony or a lesser offense (based on the same
operative facts), such termination shall be deemed to be a termination without
Cause as of the date of the termination; provided, however, that, in the event
that the Executive has been terminated ostensibly for Cause because he has been
indicted for a felony (other than one involving Limited Vicarious Liability) (A) the
Executive’s ability to exercise outstanding stock options shall be suspended
and stock options will only be forfeited in the event that the Executive is
convicted of or pleads guilty or nolo contendere to a felony or a lesser
offense and any vesting shall be suspended until a final determination in such
proceeding is reached; (B) unvested deferred stock units shall only be
forfeited in the event that the Executive is convicted of or pleads guilty or
nolo contendere to a felony or a lesser offense and any vesting or distribution
shall be suspended until a final determination in such proceeding is reached; (C) any
cash payments shall be paid after a final determination in such proceeding is
reached and no later than the end of the calendar year in which such final
determination is reached; and (D) the Company will pay the Executive an
amount equal to the value of health and welfare benefits that would otherwise
been provided to the Executive as a result of the termination, if any, after a
final determination in such proceeding is reached and no later than the end of
the calendar year in which such final determination is reached.  The Company shall gross up for tax purposes
the amount paid pursuant to subsection (D) hereof, so that the
economic benefit is the same to the Executive as if such payment or benefits
were provided on a non-taxable basis to the Executive.


 


(iv)          For purposes of the
foregoing, the term Limited Vicarious Liability shall mean any liability which
is based on acts of the Company for which Executive is responsible solely as a
result of his office(s) with the Company; provided that (A) he was
not directly involved in such acts and either had no prior knowledge of such
intended actions or, upon obtaining such knowledge, promptly acted reasonably
and in good faith to attempt to prevent the acts causing such liability or (B) after
consulting with the Company’s counsel, he reasonably believed that no law was
being violated by such acts.


 


(d)           Without Cause.  Upon written notice by the Company to the
Executive of an involuntary termination without Cause, other than for death or
Disability.


 


(e)           Good Reason.  Upon written notice by the Executive to the
Company of a termination for Good Reason, unless such events are corrected in
all material respects by the Company within 30 days following written
notification by the Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below.  “Good Reason” shall mean, without the express
written consent of the Executive, the occurrence of any of the following
events:


 


(i)            assignment to the Executive
of any duties inconsistent in any material respect with the Executive’s
position (including titles and reporting relationships), authority, duties or
responsibilities as contemplated by this Agreement, or any other action by the
Company which results in a significant diminution in such position, authority,
duties or responsibilities;


 


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(ii)           any failure by the Company
to comply with any of the material provisions regarding Executive’s Base
Salary, bonus, annual equity incentive, benefits and perquisites, retirement
benefit, relocation, and other benefits and amounts payable to Executive under
this Agreement;


 


(iii)          the Executive being required
to relocate to a principal place of employment more than 60 miles from his
principal place of employment with the Company;


 


(iv)          the delivery by the Company
of a notice of non-renewal pursuant to Section 2 hereof;


 


(v)           the failure by the Company
to reelect the Executive as a Director and as Chairman of the Board, or the
removal of the Executive from either such position; or


 


(vi)          any termination by the
Executive during the 30-day period immediately following the first anniversary
of the date of any Change in Control.


 


(f)            Without Good Reason.  Upon 30 days’ prior written notice by the
Executive to the Company of the Executive’s voluntary termination of employment
without Good Reason (which the Company may, in its sole discretion, make
effective earlier than any notice date).


 


8.             Consequences of Termination.  Any termination payments made and benefits
provided under this Agreement to the Executive shall be in lieu of any
termination or severance payments or benefits for which the Executive may be
eligible under any of the plans, policies or programs of the Company or its
affiliates.  Subject to Section 9,
the following amounts and benefits shall be due to the Executive.


 


(a)           Disability.  Upon such termination, the Company shall pay
or provide the Executive (i) any unpaid Base Salary through the date of
termination and any accrued vacation in accordance with Company policy; (ii) any
unpaid bonus earned with respect to any fiscal year ending on or preceding the
date of termination; (iii) reimbursement for any unreimbursed expenses
incurred through the date of termination; and (iv) all other payments,
benefits or fringe benefits to which the Executive may be entitled under the
terms of any applicable compensation arrangement or benefit, equity or fringe
benefit plan or program or grant or this Agreement (collectively, “Accrued Amounts”).


 


(b)           Death.  In the event the Employment Term ends on
account of the Executive’s death, the Executive’s estate shall be entitled to
any Accrued Amounts.


 


(c)           Termination for Cause or
Without Good Reason.  If the Executive’s employment should be
terminated (i) by the Company for Cause, or (ii) by the Executive
without Good Reason, the Company shall pay to the Executive any Accrued
Amounts.


 


(d)           Termination Without Cause or
for Good Reason.  If, prior to a Change in Control, the
Executive’s employment by the Company is terminated by the Company other than 


 


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for Cause (other than a termination for Disability) or by
the Executive for Good Reason, the Company shall pay or provide the Executive
with (i) Accrued Amounts; (ii) a pro-rata portion of the Executive’s
bonus for the performance year in which the Executive’s termination occurs at
the time that annual bonuses are paid to other senior executives (determined by
multiplying the amount the Executive would have received, based on actual
performance, had employment continued through the end of the performance year
by a fraction, the numerator of which is the number of days during the
performance year of termination that the Executive is employed by the Company
and the denominator of which is 365); (iii) a lump sum in cash in an
amount equal to the product of (A) the sum of (1) the then Base
Salary and (2) the then target annual bonus or, if higher, the most recent
annual bonus payment multiplied by (B) two (one-and-one-half if the
Executive is age 62; one if the Executive is age 63 or older); and (iv) subject
to the Executive’s continued copayment of premiums, continued participation in
all health and welfare plans which cover the Executive (and eligible
dependents) for that period of time over which severance is payable upon the
same terms and conditions (except for the requirements of the Executive’s
continued employment) in effect on the date of termination.  In the event the Executive obtains other
employment that offers substantially similar or improved benefits, as to any
particular health or welfare plan, such continuation of coverage by the Company
for such similar or improved benefit under such plan under this subsection
shall immediately cease.  In the case of
group medical benefits, (i) the continuation of such benefits under this
subsection shall reduce and count against the Executive’s rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) and (ii) medical benefit
continuation under this subparagraph shall be limited to a period not to exceed
18 months, with the Executive entitled to a lump-sum cash payment (“Medical
Payment”) equal to the then-applicable COBRA monthly premium cost of such
coverage multiplied by the number of months (if any) by which the severance
period exceeds 18 months, such payment to be made within 30 days after the end
of such 18-month period, plus a tax gross-up payment in an amount sufficient
such that the economic benefit is the same to the Executive as if the Medical
Payment were provided on a non-taxable basis to the Executive.  Executive shall thereafter have the
opportunity, through the remainder of the severance period, to purchase
continued coverage under the Company’s group medical plans at COBRA rates.  If a termination described in this subsection
(d) occurs at or after a Change in Control, the severance multiplier in
subsection (iii)(B) above shall be three (two if the Executive is age 62,
one-and-one-half if the Executive is age 63, and one if the Executive is age 64
or older).


 


9.             Release.  Any and all amounts payable and benefits or
additional rights provided pursuant to this Agreement beyond Accrued Amounts
shall only be payable if the Executive delivers to the Company a general
release of all claims of the Executive occurring up to the release date in the
form of Exhibit B hereto (with such changes therein as may be necessary to
make it valid and encompassing under applicable law) within 21 days of
presentation thereof by the Company to the Executive (which general release
shall be presented within 10 days of the event triggering the right to
payment).  Such amounts shall be paid (or
commence being paid) within 60 days following the event that triggers the right
to payment.


 


10.           Excise Tax.  In the event that the Executive becomes
entitled to payments and/or benefits which would constitute “parachute payments”
within the meaning of Section 280G(b)(2) of the Code, the provisions
of Exhibit C shall apply.


 


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11.           (a)           Confidentiality.  The Executive agrees that he shall not,
directly or indirectly, use, make available, sell, disclose or otherwise
communicate to any person, other than in the course of the Executive’s assigned
duties and for the benefit of the Company, either during the period of the
Executive’s employment or at any time thereafter, any nonpublic, proprietary or
confidential information, knowledge or data relating to the Company, or any of
its subsidiaries, affiliated companies or businesses, which shall have been
obtained by the Executive during the Executive’s employment by the
Company.  The foregoing shall not apply
to information that (i) was known to the public prior to its disclosure to
the Executive; (ii) becomes known to the public subsequent to disclosure
to the Executive through no wrongful act of the Executive or any representative
of the Executive; or (iii) the Executive is required to disclose by
applicable law, regulation or legal process (provided that the Executive
provides the Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company at its expense in seeking a protective
order or other appropriate protection of such information).  Notwithstanding clauses (i) and (ii) of
the preceding sentence, the Executive’s obligation to maintain such disclosed
information in confidence shall not terminate where only portions of the
information are in the public domain.


 


(b)           Nonsolicitation.  During the Executive’s employment with the
Company and for the one year period thereafter, the Executive agrees that he
will not, directly or indirectly, individually or on behalf of any other
person, firm, corporation or other entity, knowingly solicit, aid or induce (i) any
managerial level employee of the Company or any of its subsidiaries or
affiliates to leave such employment in order to accept employment with or render
services to or with any other person, firm, corporation or other entity
unaffiliated with the Company or knowingly take any action to materially assist
or aid any other person, firm, corporation or other entity in identifying or
hiring any such employee or (ii) any customer of the Company or any of its
subsidiaries or affiliates to purchase goods or services then sold by the
Company or any of its subsidiaries or affiliates from another person, firm,
corporation or other entity or assist or aid any other persons or entity in
identifying or soliciting any such customer.


 


(c)           Noncompetition.  The Executive acknowledges that he performs
services of a unique nature for the Company that are irreplaceable, and that
his performance of such services to a competing business will result in
irreparable harm to the Company. 
Accordingly, during the Executive’s employment hereunder and for the one
year period thereafter (two years for a competing business that generates more
than 30% of its gross revenues from the security business), the Executive
agrees that the Executive will not, directly or indirectly, own, manage,
operate, control, be employed by (whether as an employee, consultant,
independent contractor or otherwise, and whether or not for compensation) or
render services to any person, firm, corporation or other entity, in whatever
form, engaged in any business of the same type as any business in which the
Company or any of its subsidiaries or affiliates is engaged on the date of
termination or in which they have proposed, on or prior to such date, to be
engaged in on or after such date and in which the Executive has been involved
to any extent (other than DE MINIMIS) at any time during the 12-month period
ending with the date of termination, in any locale of any country in which the
Company conducts business.  This Section 11(c) shall
not prevent the Executive from owning not more than one percent of the total
shares of all classes of stock outstanding of any publicly held entity engaged
in such business, nor will it restrict the Executive from rendering services to
charitable organizations, as such term is defined in Section 501(c) of
the Code.


 


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(d)           Nondisparagment.  Each of the Executive and the Company (for
purposes hereof, the Company shall mean only the executive officers and
directors thereof and not any other employees) agrees not to make any public
statements that disparage the other party, or in the case of the Company, its
respective affiliates, employees, officers, directors, products or
services.  Notwithstanding the foregoing,
statements made in the course of sworn testimony in administrative, judicial or
arbitral proceedings (including, without limitation, depositions in connection
with such proceedings) shall not be subject to this Section 11(d).


 


(e)           Equitable
Relief and Other Remedies.  The
Executive acknowledges and agrees that the Company’s remedies at law for a
breach or threatened breach of any of the provisions of this Section would
be inadequate and, in recognition of this fact, the Executive agrees that, in
the event of such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available.


 


(f)            Reformation.  If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 11 is
excessive in duration or scope or is unreasonable or unenforceable under the
laws of that state, it is the intention of the parties that such restriction
may be modified or amended by the court to render it enforceable to the maximum
extent permitted by the law of that state.


 


(g)           Survival
of Provisions.  The obligations
contained in this Section 11 shall survive the termination or expiration
of the Executive’s employment with the Company and shall be fully enforceable
thereafter.


 


12.           Attorney’s Fees.


 


(a)           In the
event of any dispute arising out of or under this Agreement or the Executive’s
employment with the Company, if the arbitrator or court of competent
jurisdiction, whichever is hearing the matter, determines that the Executive
has prevailed on the issues in the arbitration or court proceeding, as the case
may be, the Company shall, upon presentment of appropriate documentation, at
the Executive’s election, pay or reimburse the Executive for all reasonable
legal and other professional fees, costs of arbitration and other reasonable
expenses incurred in connection therewith by the Executive.


 


(b)           The
Company shall promptly pay the Executive’s reasonable costs of entering into
this Agreement, including the reasonable fees and expenses of his counsel and
other professionals, up to a maximum of US $25,000 (based on such counsel’s and
professionals’ standard hourly rates). 
The Company shall gross up for tax purposes any deemed income to the
Executive arising pursuant to the payments provided under this Section 12(b),
so that the economic benefit is the same to the Executive as if such payments
were provided on a non-taxable basis to the Executive.


 


11

















 


13.           No Assignments.


 


(a)           This
Agreement is personal to each of the parties hereto.  Except as provided in Section 13(b) below,
no party may assign or delegate any rights or obligations hereunder without
first obtaining the written consent of the other party hereto.


 


(b)           The
Company may assign this Agreement to any successor to all or substantially all
of the business and/or assets of the Company provided the Company shall require
such successor to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.


 


14.           Notice.  For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (i) on the date of delivery if
delivered by hand, (ii) on the date of transmission, if delivered by
confirmed facsimile, (iii) on the first business day following the date of
deposit if delivered by guaranteed overnight delivery service, or (iv) on
the fourth business day following the date delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:


 


	
  If to the Executive:

  	
   

  	
  At the address
  (or to the facsimile number)

  shown on the records of the Company

  
	
   

  	
   

  	
   

  
	
  If to the
  Company:

  	
   

  	
  Tyco
  International Ltd.

  9 Roszel Road

  Princeton, NJ 08540-6205

  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Tyco
  International Ltd.

  The Zurich Centre

  Second Floor

  90 Pitts Bay Road 

  Pembroke, HMO8, Bermuda

  Attention: Corporate Secretary

  



 


or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.


 


15.           Section Headings;
Inconsistency.  The section headings
used in this Agreement are included solely for convenience and shall not
affect, or be used in connection with, the interpretation of this
Agreement.  In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.


 


16.           Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity of unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.


 


12

















 


17.           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.


 


18.           Arbitration.  Any dispute or controversy arising under or
in connection with this Agreement, other than injunctive relief under Section 11(e) hereof
or damages for breach of Section 11, shall be settled exclusively by
arbitration, conducted before a single arbitrator in New York, New York in
accordance with the J*A*M*S/ENDISPUTE Streamlined Arbitration Rules and
Procedures or J*A*M*S/ENDISPUTE Comprehensive Arbitration Rules and
Procedures, as applicable, but expressly excluding Rule 28 of the
J*A*M*S/ENDISPUTE Streamlined Rules (Final Offer (or Baseball) Arbitration
Option) and Rule 33 of the J*A*M*S/ENDISPUTE Comprehensive Rules (Final
Offer (or Baseball) Arbitration Option), as the case may be (or any successor
provisions).  The arbitrator will be a
former or retired judge selected from a list of those affiliated with J*A*M*S/
ENDISPUTE.  The arbitrator will have the
authority to permit discovery and to follow the procedures that he or she
determines to be appropriate.  The
arbitrator will have no power to award consequential (including lost profits),
punitive or exemplary damages.  The
decision of the arbitrator will be final and binding upon the parties
hereto.  Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.  Subject to Section 12, each party shall
bear its own legal fees and costs and equally divide the forum fees and cost of
the arbitrator.


 


19.           Indemnification.  The Company hereby agrees to indemnify the
Executive and hold him harmless to the fullest extent permitted by law and
under the by-laws of the Company against and in respect to any and all actions,
suits, proceedings, claims, demands, judgments, costs, expenses (including
reasonable attorney’s fees), losses, and damages resulting from the Executive’s
good faith performance of his duties and obligations with the Company.  With respect to any expenses that are subject
to reimbursement under the Indemnification Provisions or otherwise under this
Agreement and that are subject to Code Section 409A, the following shall
apply:  (a) the amount of the
expenses that are eligible for reimbursement during one calendar year may not
affect the amount of reimbursements to be provided in any subsequent calendar
year, (b) the reimbursement of an eligible expense shall be made on or
before the last day of the calendar year following the calendar year in which
the expense was incurred, and (c) the right to reimbursement of the
expenses shall not be subject to liquidation or exchange for any other benefit.


 


20.           Liability
Insurance.  The Company shall cover
the Executive under directors and officers liability insurance both during and,
while potential liability exists, after the term of this Agreement in the same
amount and to the same extent as the Company covers its officers and directors.


 


21.           Miscellaneous.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer or director
as may be designated by the Board.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.  This Agreement together with all
exhibits hereto sets forth the entire 


 


13

















 


agreement of the parties hereto in respect of the subject
matter contained herein.  No agreements
and/or representations, oral or otherwise, express or implied, with respect to
the subject matter hereof have been made by either party which are not
expressly set forth in this Agreement. 
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles.


 


22.           Full
Settlement.  Except as set forth in
this Agreement, the Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including without limitation, set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others, except to the extent any
amounts are due the Company or its subsidiaries or affiliates pursuant to a
judgment against the Executive; provided, that no offset will be permitted in
excess of US $5,000 hereunder against any payment provided for under this
Agreement which constitutes deferred compensation subject to Code Section 409A.  In no event shall the Executive be obliged to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
nor shall the amount of any payment hereunder be reduced by any compensation
earned by the Executive as a result of employment by another employer.


 


23.           Code Section 409A.


 


(a)           This
Agreement is intended to comply with Code Section 409A and the final
regulations and interpretative guidance thereunder, including the exceptions
for short-term deferrals, separation pay arrangements, reimbursements, and
in-kind distributions, and shall be administered accordingly.  The Agreement shall be construed and
interpreted with such intent.  If any
provision of this Agreement needs to be revised to satisfy the requirements of
Code Section 409A, then such provision shall be modified or restricted to
the extent and in the manner necessary to be in compliance with such
requirements of the Code and any such modification will attempt to maintain the
same economic results as were intended under this Agreement.  Each payment under this Agreement is intended
to be treated as one of a series of separate payment for purposes of Code Section 409A
and Treas. Reg. §1.409A-2(b)(2)(iii) (or any similar or successor provisions).  Any reimbursement, tax gross-up or similar
payment required to be paid to the Executive hereunder shall be paid by the
Company no later than the latest date on which such payment may be made under
Code Section 409A and applicable regulations without causing such payment
to be deemed deferred compensation subject to Code Section 409A.


 


(b)           Notwithstanding
any provision to the contrary, to the extent that the Executive is considered a
“specified employee” (as defined in Code Section 409A and Treas. Reg.
§1.409A-1(c)(i) or any similar or successor provision) and would be
entitled to a payment during the six month period beginning on the Executive’s
date of Separation from Service that is not otherwise excluded under Code Section 409A
under the exception for short-term deferrals, separation pay arrangements,
reimbursements, in-kind distributions, or any otherwise applicable exemption,
the payment will not be made to the Executive until the earlier of the six
month anniversary of the Executive’s date of 


 


14

















 


Separation from Service or the Executive’s death and will be
accumulated and paid on the first day of the seventh month following the date
of termination.


 


24.           Withholding.  The Company may withhold from any and all
amounts payable under this Agreement such federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.


 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.


 


	
   

  	
  TYCO
  INTERNATIONAL LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rajiv L.
  Gupta

  
	
   

  	
  Name: Rajiv
  L. Gupta

  Its: Director

  
	
   

  	
   

  
	
   

  	
  EDWARD D. BREEN

  
	
   

  	
   

  
	
   

  	
  /s/ Edward D. Breen

  



 


15

















 


EXHIBIT A


 


DEFINITION
OF CHANGE IN CONTROL


 


“Change in
Control” shall mean the first to occur of any of the following events:


 


(a)           any “person” (as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), excluding for this
purpose, (i) the Company or any subsidiary of the Company, or (ii) any
employee benefit plan of the Company or any subsidiary of the Company, or any
person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan which acquires beneficial ownership of
voting securities of the Company, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly of
securities of the Company representing more than 40% of the combined voting
power of the Company’s then outstanding securities; provided, however, that no
Change in Control will be deemed to have occurred as a result of a change in
ownership percentage resulting solely from an acquisition of securities by the
Company; or


 


(b)           persons who, as of the Effective Date
constitute the Board (the “Incumbent
Directors”) cease for any reason, including without limitation, as a
result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority thereof, provided that any person becoming a
director of the Company subsequent to the Effective Date shall be considered an
Incumbent Director if such person’s election or nomination for election was
approved by a vote of at least 50% of the Incumbent Directors; but provided
further, that any such person whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of members of the Board or other actual or threatened solicitation of
proxies or consents by or on behalf of a “person” (as defined in Section 13(d) and
14(d) of the Exchange Act) other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or


 


(c)           consummation of a reorganization,
merger or consolidation or sale or other disposition of at least 80% of the
assets of the Company (a “Business
Combination”), in each case, unless, following such Business
Combination, all or substantially all of the individuals and entities who were
the beneficial owners of outstanding voting securities of the Company
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the company resulting from such Business Combination
(including, without limitation, a company which, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the outstanding voting securities of the Company; or


 


(d)           approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company.


 


A-1

















 


EXHIBIT B


 


FORM OF
RELEASE

AGREEMENT AND GENERAL RELEASE


 


Tyco
International Ltd., and its affiliates, subsidiaries, divisions, successors and
assigns and the current, future and former employees, officers, directors,
trustees and agents thereof (collectively referred to throughout this Agreement
as “Employer”) and Edward D.
Breen, his heirs, executors, administrators, successors and assigns
(collectively referred to throughout this Agreement as “Employee”) agree:


 


1.             Last Day of Employment.  Employee’s last day of employment with
Employer is DATE.  In addition, effective
as of DATE, Employee resigns from his positions as Chairman, President and
Chief Executive Officer of Tyco International Ltd. and as President and Chief
Executive Officer of Tyco International Ltd. and will not be eligible for any
benefits or compensation after DATE, other than as specifically provided in
Sections 5 and 8 of the employment agreement between Tyco International
Ltd. and Employee dated as of December 19, 2008 (the “Employment Agreement”), subject to the
Employee’s executing, delivering and not revoking Appendix 1 hereto.  Employee further acknowledges and agrees
that, after DATE, he will not represent himself as being a director, employee,
officer, trustee, agent or representative of the Employer for any purpose and
will not make any public statements relating to the Employer, other than
general statements relating to his position, title or experience with the
Employer, subject to the confidentiality provision under Section 11(a) of
the Employment Agreement and in no event will the Employee make any statements
as an agent or representative of the Employer. 
In addition, effective as of DATE, Employee resigns from all offices,
directorships, trusteeships, committee memberships and fiduciary capacities
held with, or on behalf of, the Employer or any benefit plans of the
Employer.  These resignations will become
irrevocable as set forth in Section 3 below.


 


2.             Consideration.  The parties acknowledge that this Agreement
and General Release is being executed in accordance with Section 9 of the
Employment Agreement.


 


3.             Revocation.  Employee may revoke this Agreement and
General Release for a period of seven (7) calendar days following the day
he executes this Agreement and General Release. 
Any revocation within this period must be submitted, in writing, to Tyco
International Ltd. and state, “I hereby revoke my acceptance of our Agreement
and General Release.” The revocation must be personally delivered to SENIOR
VICE PRESIDENT OF HUMAN RESOURCES, or his or her designee, or mailed to Tyco
International Ltd., 9 Roszel Road, Princeton, New Jersey 08540-6205, Attention:
SENIOR VICE PRESIDENT OF HUMAN RESOURCES and postmarked within seven (7) calendar
days of execution of this Agreement and General Release.  This Agreement and General Release shall not
become effective or enforceable until the revocation period has expired.  If the last day of the revocation period is a
Saturday, Sunday, or legal holiday in New York, then the revocation period
shall not expire until the next following day which is not a Saturday, Sunday,
or legal holiday.


 


4.             General Release of Claims.  Employee knowingly and voluntarily releases
and forever discharges Employer from any and all claims, causes of action,
demands, fees and 


 


B-1

















 


liabilities of any kind whatsoever, whether known and
unknown, against Employer, Employee has, has ever had or may have as of the
date of execution of this Agreement and General Release, including, but not
limited to, any alleged violation of:


 


·                                          The National Labor Relations
Act, as amended;


 


·                                          Title VII of the Civil
Rights Act of 1964, as amended;


 


·                                          The Civil Rights Act of
1991;


 


·                                          Sections 1981 through
1988 of Title 42 of the United States Code, as amended;


 


·                                          The Employee Retirement
Income Security Act of 1974, as amended;


 


·                                          The Immigration Reform and
Control Act, as amended;


 


·                                          The Americans with
Disabilities Act of 1990, as amended;


 


·                                          The Age Discrimination in
Employment Act of 1967, as amended;


 


·                                          The Older Workers Benefit
Protection Act of 1990;


 


·                                          The Worker Adjustment and
Retraining Notification Act, as amended;


 


·                                          The Occupational Safety and
Health Act, as amended;


 


·                                          The Family and Medical Leave
Act of 1993;


 


·                                          The STATE Civil Rights Act,
as amended;


 


·                                          The STATE Minimum Wage Law,
as amended;


 


·                                          Equal Pay Law for STATE, as
amended;


 


·                                          Any other federal, state or
local civil or human rights law or any other local, state or federal law,
regulation or ordinance;


 


·                                          Any public policy, contract,
tort, or common law; or


 


·                                          Any allegation for costs,
fees, or other expenses including attorneys’ fees incurred in these matters.


 


Notwithstanding
anything herein to the contrary, the sole matters to which the Agreement and
General Release do not apply are:  (i) the
Employee’s rights of indemnification and directors and officers liability
insurance coverage to which he was entitled immediately prior to DATE with
regard to his service as an officer of the Employer (including, without
limitation, under Sections 19 and 20 of the Employment Agreement); (ii) the
Employee’s rights under any tax-qualified pension or claims for accrued vested
benefits under any other employee benefit plan, 


 


B-2

















 


policy or arrangement maintained by the Employer or under
COBRA; (iii) the Employee’s rights under the provisions of the Employment
Agreement which are intended to survive termination of employment; or (iv) the
Employee’s rights as a stockholder.


 


5.             No Claims Permitted.  Employee waives his right to file any charge
or complaint against Employer arising out of his employment with or separation
from Employer before any federal, state or local court or any state or local
administrative agency, except where such waivers are prohibited by law.  This Agreement, however, does not prevent
Employee from filing a charge with the Equal Employment Opportunity Commission,
any other federal government agency, and/or any government agency concerning
claims of discrimination, although Employee waives his right to recover any
damages or other relief in any claim or suit brought by or through the Equal
Employment Opportunity Commission or any other state or local agency on behalf
of Employee under the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, or
any other federal or state discrimination law, except where such waivers are
prohibited by law.


 


6.             Affirmations.  Employee affirms he has not filed, has not
caused to be filed, and is not presently a party to, any claim, complaint, or
action against Employer in any forum or form. 
Employee further affirms that he has been paid and/or has received all
compensation, wages, bonuses, commissions, and/or benefits to which he may be
entitled and no other compensation, wages, bonuses, commissions and/or benefits
are due to him, except as provided in Sections 5 and 8 of the Employment
Agreement.  Employee also affirms he has
no known workplace injuries.


 


7.             Confidentiality; Cooperation;
Return of Property.  Employee agrees
not to disclose any information regarding the circumstances surrounding the
cessation of his employment, or the existence, terms, or conditions of this
Agreement and General Release, to any person or entity whatsoever, including
without limitation, any members of the media (including, but not limited to,
print journalists, newspapers, radio, television, cable, satellite programs, or
Internet media) or any Internet web page or “chat room,” or any other
entity or person, with the exception of Employee’s spouse, accountant, tax
advisor, and/or attorneys. 
Notwithstanding the aforementioned provision, nothing herein shall
preclude Employee from divulging any information to any agency of the federal,
state, or local government pursuant to an official request by such government
agency or pursuant to court order (provided that the Executive provides the
Employer with prior notice of the contemplated disclosure and reasonably
cooperates with the Employer at its expense in seeking a protective order or
other appropriate protection of such information).  Employee agrees to reasonably cooperate with
the Employer and its counsel in connection with any investigation,
administrative proceeding or litigation relating to any matter that occurred
during his employment in which he was involved or of which he has
knowledge.  The Employer will reimburse
the Employee for any reasonable pre-approved out-of-pocket travel, delivery or
similar expenses incurred in providing such service to the Employer.  Employee represents that he has returned to
the Employer all property belonging to the Employer, including but not limited
to any leased vehicle, laptop, cell phone, keys, access cards, phone cards and
credit cards.


 


8.             Governing Law and Interpretation.  This Agreement and General Release shall be
governed and conformed in accordance with the laws of the State of New York
without regard to 


 


B-3

















 


its conflict of laws provision.  In the event Employee or Employer breaches
any provision of this Agreement and General Release, Employee and Employer
affirm either may institute an action to specifically enforce any term or terms
of this Agreement and General Release. 
Should any provision of this Agreement and General Release be declared
illegal or unenforceable by any court of competent jurisdiction and should the
provision be incapable of being modified to be enforceable, such provision
shall immediately become null and void, leaving the remainder of this Agreement
and General Release in full force and effect. 
Nothing herein, however, shall operate to void or nullify any general
release language contained in the Agreement and General Release.


 


9.             Nonadmission of Wrongdoing.  Employee agrees neither this Agreement and
General Release nor the furnishing of the consideration for this Release shall
be deemed or construed at any time for any purpose as an admission by Employer
of any liability or unlawful conduct of any kind.


 


10.           Amendment.  This Agreement and General Release may not be
modified, altered or changed except upon express written consent of both
parties wherein specific reference is made to this Agreement and General
Release.


 


11.           Entire Agreement.  This Agreement and General Release sets forth
the entire agreement between the parties hereto and fully supersedes any prior
agreements or understandings between the parties; provided, however, that
notwithstanding anything in this Agreement and General Release, the provisions
in the Employment Agreement which are intended to survive termination of the
Employment Agreement, including but not limited to those contained in Section 11
thereof, shall survive and continue in full force and effect.  Employee acknowledges he has not relied on
any representations, promises, or agreements of any kind made to him in
connection with his decision to accept this Agreement and General Release.


 


EMPLOYEE
HAS BEEN ADVISED THAT HE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW THIS
AGREEMENT AND GENERAL RELEASE AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH
AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE.


 


EMPLOYEE
AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND
GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE
(21) CALENDAR DAY CONSIDERATION PERIOD.


 


HAVING
ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES
SET FORTH HEREIN, AND TO RECEIVE THE SUMS AND BENEFITS IN SET FORTH IN THE
EMPLOYMENT AGREEMENT, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE
CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO
WAIVE, SETTLE AND RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST EMPLOYER.


 


B-4
















 


IN WITNESS WHEREOF, the parties hereto knowingly and
voluntarily executed this Agreement and General Release as of the date set
forth below:


 


	
   

  	
   

  	
   

  	
  TYCO
  INTERNATIONAL LTD.

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Senior Vice President of
  Human Resources

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  EDWARD BREEN

  



 


B-5





















 


Mr. Edward
D. Breen


 


Re:          Agreement and General Release


 


Dear
Ed:


 


This letter
confirms that on DATE, I personally sent to you the enclosed Agreement and
General Release.  You have until DATE to
consider this Agreement and General Release, in which you waive important
rights, including those under the Age Discrimination in Employment Act of
1967.  To this end, we advise you to
consult with an attorney of your choosing prior to executing this Agreement and
General Release.


 


	
   

  	
  Regards,

  
	
   

  	
   

  
	
   

  	
  Senior Vice President of
  Human Resources

  
	
   

  	
  Tyco International Ltd.

  



 


B-6





















 


APPENDIX 1


 


SENIOR VICE
PRESIDENT OF

HUMAN RESOURCES


 


Tyco
International Ltd.


 


Re:  Agreement and General Release


 


Dear
NAME,


 


On [date] I
executed an Agreement and General Release between Tyco International Ltd. and
me.  I was advised by Tyco International
Ltd., in writing, to consult with an attorney of my choosing, prior to
executing this Agreement and General Release.


 


More than
seven (7) calendar days have expired since I executed the above-mentioned
Agreement and General Release.  I have at
no time revoked my acceptance or execution of that Agreement and General
Release and hereby reaffirm my acceptance of it.  Therefore, in accordance with the terms of
our Agreement and General Release, I request payment of the monies and benefits
described in Sections 5 and 8 of the Employment Agreement.


 


	
   

  	
  Regards, 

  
	
   

  	
   

  
	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
  Edward D. Breen

  



 


B-7





















 


EXHIBIT C


 


GROSS-UP
PROVISIONS


 


(a)           Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that the
Executive shall become entitled to payments and/or benefits provided by this
Agreement or any other amounts in the “nature of compensation” (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company or any affiliate, any person whose actions result in
a change of ownership or effective control of the Company covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control of the Company (a “Payment”) would be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”),
then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.


 


(b)           Subject to the provisions of
paragraph (c), all determinations required to be made under this Exhibit C,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized accounting firm (the “Accounting Firm”) which shall provide
detailed supporting calculations both to the Company and the Executive within
15 business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company.  The Accounting Firm shall be jointly selected
by the Company and the Executive and shall not, during the two years preceding
the date of its selection, have acted in any way on behalf of the Company or
its affiliated companies.  If the Company
and the Executive cannot agree on the firm to serve as the Accounting Firm,
then the Company and the Executive shall each select a nationally recognized
accounting firm and those two firms shall jointly select a nationally
recognized accounting firm to serve as the Accounting Firm.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Exhibit C,
shall be paid by the Company to the Executive within five days of the receipt
of the Accounting Firm’s determination. 
If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall furnish the Executive with a written opinion, based upon “substantial
authority” (within the meaning of Section 6230 of the Code), that failure
to report the Excise Tax on the Executive’s applicable federal income tax
return would not result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive, absent manifest
error.  As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. 
In the event that the Company exhausts its remedies pursuant to
paragraph (c) hereof and the Executive thereafter is required to make
a payment of any Excise


 


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Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Executive.


 


(c)           The Executive shall notify the
Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of a Gross-Up
Payment.  Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
he gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:


 


(i)            give the Company any information
reasonably requested by the Company relating to such claim,


 


(ii)           take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,


 


(iii)          cooperate with the Company in good
faith in order effectively to contest such claim, and


 


(iv)          permit the Company to participate in
any proceedings relating to such claim; provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the
foregoing provisions of this paragraph (c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided the Executive shall
not be required by the Company to agree to any extension of the statute of
limitations relating to the payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due
unless such extension is limited solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be 


 


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limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.


 


(d)           If, after the receipt by the
Executive of an amount advanced by the Company pursuant to paragraph (c) hereof,
the Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to paragraph (f) hereof and
subject to the Company’s complying with the requirements of paragraph (c) hereof)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by the Executive of an
amount advanced by the Company pursuant to paragraph (c) hereof, a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.


 


(e)           If, pursuant to regulations issued
under Section 280G or 4999 of the Code, the Company and the Executive were
required to make a preliminary determination of the amount of an excess
parachute payment and thereafter a redetermination of the Excise Tax is
required under the applicable regulations, the parties shall request the
Accounting Firm to make such redetermination. 
If as a result of such redetermination an additional Gross-Up Payment is
required, the amount thereof shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm’s determination.  If the redetermination of the Excise Tax
results in a reduction of the Excise Tax, the Executive shall take such steps
as the Company may reasonably direct in order to obtain a refund of the excess Excise
Tax paid.  If the Company determines that
any suit or proceeding is necessary or advisable in order to obtain such
refund, the provisions of paragraph (c) hereof relating to the
contesting of a claim shall apply to the claim for such refund, including, without
limitation, the provisions concerning legal representation, cooperation by the
Executive, participation by the Company in the proceedings and indemnification
by the Company.  Upon receipt of any such
refund, the Executive shall (subject to paragraph (f) hereof)
promptly pay the amount of such refund to the Company.  If the amount of the income taxes otherwise
payable by the Executive in respect of the year in which the Executive makes
such payment to the Company is reduced as a result of such payment, the
Executive shall, no later than the filing of his income tax return in respect
of such year, pay the amount of such tax benefit to the Company (subject to
paragraph (f) hereof).  In the
event there is a subsequent redetermination of the Executive’s income taxes
resulting in a reduction of such tax benefit, the Company shall, promptly after
receipt of notice of such reduction, pay to the Executive the amount of such
reduction.  If the Company objects to the
calculation or recalculation of the tax benefit, as described in the preceding
two sentences, the Accounting Firm shall make the final determination of the
appropriate amount.  The Executive shall
not be obligated to pay to the Company the amount of any further tax benefits
that may be realized by him as a result of paying to the Company the amount of
the initial tax benefit.


 


(f)            Each provision of this Exhibit C
shall be interpreted in a manner consistent with the overall intent of this Exhibit C,
which is to make the Executive whole, on an after-tax basis, from any
imposition of (or claim to impose) the Excise Tax, it being acknowledged and 


 


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understood that the reversal of any advance made by the
Company pursuant to paragraph (c) hereof, or the correction of any
other type of overpayment of a Gross-Up Payment to the Executive by the
Company, may result in the Executive paying to the Company an amount which is
less than the related advance or other overpayment by the Company.  In particular and not by way of limitation,
any other provision of this Exhibit C notwithstanding, the Executive shall
not in any event be obligated, in connection with repaying any refund as
described in paragraphs (d) and (e) hereof, to pay the Company
an amount greater than the net after-tax portion of any advance or other type
of Gross-Up Payment that he has retained or has recovered as a refund from the
applicable taxing authorities; but the Executive shall not be relieved of his
obligation hereunder to recover certain amounts as a refund or credit.


 


E-4