Exhibit 10.9


 


 


TYCO INTERNATIONAL LTD.

DEFERRED COMPENSATION PLAN FOR DIRECTORS


 


Amended and Restated


 


Effective January 1, 2005


 





















 


ARTICLE I


 


Purpose


 


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


 


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


 


ARTICLE II


 


Definitions


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2.8 “Company” means Tyco
International Ltd.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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Article III


 


Participation


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE IV


 


Payments to Participants


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE V


 


General


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE VI


 


Trust


 


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


 


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


 


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


 


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APPENDIX A


 


MEASUREMENT FUNDS


 


(as of January 1, 2005)


 


 


Interest Income
Measurement Fund


 


U.S. Equity Index
Commingled Measurement Fund


 


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