Document:

Exhibit 10.8

 

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 September 28, 2012. In addition, effective as of September 28, 2012, Employee resigns from his positions as President and Chief Executive Officer of Tyco International Ltd. and will not be eligible for any benefits or compensation after September 28, 2012, other than (i) 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 and (ii) with respect to Employee’s continuing role as the Chairman of the Board of Directors of Employer. Employee further acknowledges and agrees that, after September 28, 2012, he will not represent himself as being an 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 (i) 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 (ii) in Employee’s capacity as the Chairman of the Board of Directors of Employer. In addition, effective as of September 28, 2012, and other than with respect to Employee’s continuing role as the Chairman of the Board of Directors of Employer, 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.  In connection with the Employee’s termination of employment, the following payments and benefits will be provided to the Employee:

 

(i)                                     Accrued amounts.  All Accrued Amounts (as defined in the Section 8 of the Employment Agreement).

 

(ii)                                  Severance Payment.  A cash lump sum payment in an amount equal to the product of (A) the sum of (1) the Employee’s base salary as of September 28, 2012; and (2) the Employee’s 2012 performance year target annual bonus or, if higher, the fiscal year 2012 annual bonus payment multiplied by (B) two.

 

(iii)                               FY 2012 Bonus.  The Employee’s fiscal year 2012 annual bonus under the Company’s 2004 Stock and Incentive Plan at the time that annual bonuses are paid to other senior executives, based on actual performance;

 

(iv)                              Health & Welfare.  Subject to the Employee’s continued co-payment of premiums, continued participation for (i) 24 months in all health and welfare plans

 

 

(including the payment of Employee’s supplemental insurance premiums by the Company) which cover the Employee (and eligible dependents) on the same terms and conditions in effect on September 28, 2012.  However, in the case of group medical benefits, (i) the continuation of such benefits shall reduce and count against the Employee’s rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA) and (ii) medical benefit continuation shall be limited to a period not to exceed 18 months, with the Employee to receive a lump-sum cash payment (“Medical Payment”) equal to the then-applicable COBRA monthly premium cost of such coverage multiplied by 6, such payment to be made within 30 days after the end of such 18-month period, plus a gross-up payment in an amount sufficient such that the economic benefit is the same to the Employee as if the Medical Payment were provided on a non-taxable basis to the Employee.  Employee shall have the opportunity for 6 months after the severance period to purchase continued coverage under the Company’s group term medical plans at COBRA rates.

 

(v)                                 Options.  All outstanding option awards granted prior to September 30, 2011 pursuant to the Company’s 2004 Stock and Incentive Plan shall be fully vested.  Furthermore, 23/48 (twenty-three forty-eighths) of the outstanding option awards granted on October 12, 2011, pursuant to the Company’s 2004 Stock and Incentive Plan shall vest. All vested outstanding option awards as of September 28, 2012 granted pursuant to the Company’s 2004 Stock and Incentive Plan shall remain exercisable for the entire term of the option.

 

(vi)                              Performance Stock Units.  All Performance Stock Unit Awards granted prior to September 30, 2011 shall be fully vested.  Furthermore, 11/36 (eleven thirty-sixths) of the outstanding Performance Stock Unit Awards granted on October 12, 2011 shall be vested.

 

(vii)                           Deferred Stock Units.  All Deferred Stock Units outstanding as of September 28, 2012, shall be fully vested and paid pursuant to the terms of the Company’s 2004 Stock and Incentive Plan and the related Award Certificate.

 

(viii)                        Restricted Stock Units.                      Of the Restricted Stock Units granted on December 8, 2011 and outstanding as of September 28, 2012, 9/24 (nine twenty-fourths) shall be vested.

 

(ix)                              Supplemental Retirement Benefit.  Pursuant to Section 6(b) of the Employment Agreement, Employee shall receive, in a lump sum, a Supplemental Retirement Benefit upon reaching age 60, which, due to Employee’s resignation for Good Reason, is not subject to the reduction in the Supplemental Retirement Benefit provided under Section 6(b)(ii) of the Employment Agreement.

 

(x)                                 Employee’s participation in the Tyco International Supplemental Savings and Retirement Plan (SSRP) will cease on Employee’s last day of employment, and Employee shall receive his balances in the SSRP and the Tyco International Supplemental Executive Retirement Plan upon reaching age 60.

 

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(xi)                              Employer shall pay premiums on the life insurance policy maintained in the name of and owned by Employee for a period of two years beyond the last day of employment.

 

(xii)                           Employer shall pay premiums under (i) an individual disability policy maintained for Employee, and (ii) an excess disability policy maintained for Employee, both for a period of two years beyond the last day of employment, at which time Employee may continue such policies at his own election and his own expense.

 

(xiii)                        Employer shall pay the remaining premiums on the long-term care policy maintained for Employee and his spouse after Employee’s last day of employment, and such policy shall be paid in full and continue to inure to the benefit of Employee and his spouse.

 

(xiv)                       Tax-Gross Up Payment.  The tax/gross-up payment pursuant to Section 6(d) of the Employment Agreement related to awards granted pursuant to the Company’s 2004 Stock and Incentive Plan prior to December 31, 2008.  Furthermore, in addition to the Company’s obligations under Section 6(d) of the Employment Agreement, the Company will at all times (notwithstanding the expiration or termination of the Employment Agreement) indemnify and hold harmless Employee from liabilities arising from the assessment of interest and penalties by the New York State Department of Taxation and Finance and related costs and expenses, including, without limitation, reasonable professional fees and expenses, arising out of or resulting from the New York State tax treatment of distributions received by Employee from the Deferred Stock Units as reported on his New York State Income Tax Return filed for the taxable year or years in which they are distributed to him.

 

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 the CHIEF HUMAN RESOURCES OFFICER, or his or her designee, or mailed to Tyco International Ltd., 9 Roszel Road, Princeton, New Jersey 08540-6205, Attention: CHIEF HUMAN RESOURCES OFFICER 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 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;

 

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·                                          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 September 28, 2012 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 of indemnification and directors and officers liability insurance coverage to which he will continue to be entitled to as the Chairman of the Board of Directors of Employer; (iii) the Employee’s rights under any tax-qualified pension or claims for accrued vested benefits under any other employee benefit plan, policy or arrangement maintained by the Employer or under COBRA; (iv) the Employee’s rights under the provisions of the Employment Agreement which are intended to survive termination of employment; and (v) the Employee’s rights as a stockholder.

 

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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 any regulatory requirement or 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 that will not be used in his capacity as Chairman.

 

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 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

 

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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 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.

 

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

 

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TYCO   INTERNATIONAL LTD.
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
September 28,   2012
    	
 
    	
By:
    	
/s/   Lawrence Costello
    
	
 
    	
 
    	
 
    	
 
    	
Senior   Vice President of Human Resources
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
September 28,   2012
    	
 
    	
By:
    	
/s/   Edward Breen
    
	
 
    	
 
    	
 
    	
 
    	
EDWARD   BREEN
    

 

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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.
    

 

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APPENDIX 1

 

CHIEF HUMAN RESOURCES OFFICER

 

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
    

 

9Exhibit 10.11

 

Tyco International Ltd

2012 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

STOCK OPTION AWARD

 

STOCK OPTION AWARD made in Princeton, New Jersey, as of          (the “Grant Date”) pursuant to the Tyco International Ltd. 2012 Stock and Incentive Plan (the “Plan”).  Capitalized terms that are not defined herein have the meaning ascribed to them in the Plan.

 

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

 

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

 

3.                                       Vesting.  Except as otherwise set forth herein, the Stock Option will become exercisable in installments of one fourth (1/4) of the Shares specified in your Grant Letter per year over four years.  Your vested right will be calculated on the anniversary of the Grant Date.  No credit will be given for periods following Termination of Employment, except as set forth herein.

 

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

 

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

 

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in cash that have an aggregate Fair Market Value as of the date of exercise equal to the portion of the Exercise Price being so paid.  Notwithstanding the foregoing, you may not tender any form of payment that the Company determines, in its sole and absolute discretion, could violate any law or regulation. You are not required to purchase all Shares subject to the Stock Option at one time, but you must pay the full Exercise Price for all Shares that you elect to purchase before they will be delivered.

 

6.                                       Exercise of Stock Option.  Subject to these Terms and Conditions, the Stock Option may be exercised by contacting (i) UBS Financial Services Inc. at 877-STK-TYCO (1-877-785-8926) if calling from within the U.S. or 001-201-272-7611 if calling from outside the U.S., or (ii) such other stock option administrator as is selected by the Company.  Your Stock Option may be exercised after your death only by your estate or by the person given the authority to exercise the Stock Option by your will or by operation of law.  If the Stock Option is exercised after your death, the Company will deliver Shares only after the Company has determined that the person exercising the Stock Option is the duly appointed executor or administrator of your estate or the person to whom the Stock Option has been transferred by your will or by the applicable laws of descent and distribution.

 

7.                                       Retirement, Termination of Employment, Disability or Death.  The Stock Option will vest and remain exercisable as set forth below in the case of Termination of Employment, Retirement, Disability or death:

 

	
Event
    	
 
    	
Vesting
    	
 
    	
Exercise
    
	
Voluntary Termination of Employment (other than   Retirement)
    	
 
    	
Unvested Awards are forfeited as of your   Termination of Employment.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) 90 days after Termination of   Employment.
    
	
Involuntary Termination of Employment not for Cause
    	
 
    	
Unvested Awards are forfeited as of your   Termination of Employment, except as otherwise provided in Sections 8, 9 or   10.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) 90 days after Termination of   Employment, except as otherwise provided in Sections 8, 9 or 10.
    
	
Termination of Employment for Cause
    	
 
    	
Unvested Awards are immediately forfeited as of   your Termination of Employment.
    	
 
    	
Vested Awards are immediately cancelled upon   Termination of Employment.
    

 

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Retirement (defined as Termination of Employment   for reasons other than Cause on or after age 55 if the sum of your age and   full years of service with the Company is at least 60).
    	
 
    	
Unvested Awards that have been granted within   twelve months are forfeited if your Retirement occurs less than twelve months   after the Grant Date. On or after the 1st anniversary of the Grant Date,   unvested Awards accelerate and vest pro rata based on the number of full months of   service completed commencing on the Grant Date and ending on the date of your   Termination of Employment divided by the number of full months required to   achieve complete vesting (with an offset for Stock Options previously   vested). The remaining unvested portion of your Award will immediately be   forfeited and your rights with respect to such Stock Options will end.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) three years after Termination   of Employment.
    
	
Disability or death
    	
 
    	
Unvested Awards become fully vested as of your   Termination of Employment.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) three years after your   Termination of Employment.
    

 

Termination of Employment means the date of cessation of an Employee’s employment relationship with the Company or a subsidiary for any reason, with or without Cause, as determined by the Company. For the avoidance of doubt, the date of cessation of your employment relationship with the Company or a Subsidiary shall exclude any notice or severance period that you may be entitled to receive.

 

8.                                       Change in Control.  In the event of (i) a Change in Control of Tyco International Ltd., and your Change in Control Termination, or (ii) your Termination of Employment by reason of a “Good Reason Resignation” which qualifies you for severance benefits under the Tyco International Ltd. Change in Control Severance Plan for Certain U. S. Officers and Executives (the “CIC Severance Plan”) within two years following a Change in Control, your

 

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Stock Option will immediately become fully vested.  Your Stock Option will expire on the earlier of (i) the original expiration date and (ii) three years from the effective date of your Change in Control Termination or your Termination of Employment by reason of a Good Reason Resignation, as described in the preceding sentence.

 

9.                                       Termination of Employment as a Result of Divestiture or Outsourcing.  Notwithstanding any provision to the contrary in Sections 7 or 8, if your involuntary Termination of Employment other than for Cause is as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), your Stock Option will vest on a pro-rata basis based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting (with an offset for Stock Options previously vested). The vested portion of your Stock Option will expire on the earlier of (i) the original expiration date and (ii) three years after the date of your Termination of Employment.

 

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

 

For purposes of this Section 9, “Comparable Employment” shall mean employment (i) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to your Termination of Employment and (ii) that is at a geographic location no more than 50 miles from your principal place of employment in effect immediately prior to your Termination of Employment;  “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary by which you are employed of all or a portion of the assets used by the Company or Subsidiary in a trade or business to an unrelated corporation or entity; “Disposition of a Subsidiary” shall mean the disposition by the Company or a Subsidiary of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

 

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10.                                 Termination of Employment with Severance Benefits.

 

(a) Termination in connection with the Separation.  In the event of (i) your Termination of Employment that occurs within the period beginning on the Grant Date and ending on the date that is one year following the completion of the spin-offs of the ADT Corporation and Pentair, Ltd. (formerly known as Tyco Flow Control International, Ltd.) ( the “Separation”), and (ii) the determination, in the sole discretion of the Executive Vice President, Human Resources of the Company, or his or her designee, , that your Termination of Employment is due to the Separation, your unvested Stock Options subject to this Award will accelerate and vest pro rata based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting (with an offset for Stock Options previously vested).  Your Stock Option will expire one year after the date of your Termination of Employment or such later date as may be applicable under Section 7.

 

Further, if you qualify for accelerated vesting under this Section 10(a), the requirement set forth in Section 10(b)(i) shall not apply.

 

(b) Termination of Employment - Executives.  If (i) your Termination of Employment occurs twelve months or later after the Grant Date, (ii) upon your Termination of Employment you are a Section 16 Officer or employed in a job classification Band 1 or Band 2, and (iii) you are involuntarily terminated for reasons other than Cause, a portion of your Award equivalent to the number of Stock Options that would have vested in the twelve month period following the date of your Termination of Employment had you not been terminated will accelerate and immediately vest.  The vested portion of your Award will expire on the earlier of (i) the original expiration date of the Award, (ii) one year after the date of your Termination of Employment and (iii) such later date as may be applicable under Section 7.

 

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

 

By not declining the Award, you hereby acknowledges that the Company or Subsidiary or employing company shall require you to pay the Company or Subsidiary or employing company  the amount of any federal, state, local, foreign or other tax or other amount required by any governmental authority to be withheld and paid over by the Company or Subsidiary or employing company to such authority for your account, and you agree, as a condition of the grant of the Award and delivery of any Shares, to satisfy such obligations.  Notwithstanding the foregoing, the Committee may in its discretion establish procedures to permit you to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other income tax obligations relating to the Award, by electing (the “election”) to have the Company withhold shares of Common Stock from the Shares to which you otherwise become entitled. The number of Shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld, taking into account any exchange rate issues, is determined as nearly equal as

 

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possible to (but not exceeding) the amount of such obligations being satisfied. Each election must be made in writing in accordance with election procedures established by the Committee

 

By not declining the Award you acknowledge that the Company has made no warranties or representations to you with respect to the tax consequences (including but not limited to income tax consequences) with respect to the Award contemplated by these Terms and Conditions, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences.  You hereby acknowledge that there may be adverse tax consequences upon the grant or vesting or exercise of the Award and/or the acquisition or disposition of the Shares subject to the Award and you have been advised that you should consult with your own attorney, accountant and/or tax advisor regarding the decision to enter into this Award and these Terms and Conditions and the consequences thereof.  You also acknowledge that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for you.

 

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

 

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

 

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

 

(b)                                 If the Committee determines, in its sole discretion, that at any time after the Grant Date and prior to the second anniversary of your Termination of Employment you (i) disclosed business confidential or proprietary information related to any business of the Company or Subsidiary or (ii) have entered into an employment or consultation arrangement

 

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(including any arrangement for employment or service as an agent, partner, stockholder, consultant, officer or director) with any entity or person engaged in a business, which arrangement would likely (in the sole judgment of the Committee) result in the disclosure of business confidential or proprietary information related to any business of the Company or a Subsidiary to a business that is competitive with any Company or Subsidiary business as to which you have had access to business strategic or confidential information, and the Committee has not approved the arrangement in writing, then any Stock Option that you have not exercised (whether vested or unvested) will immediately be rescinded, and you will forfeit any rights you have with respect to these Stock Options as of the date of the Committee’s determination.

 

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

 

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

 

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

 

17.                                 Plan Terms Govern.  The exercise of the Stock Option, the disposition of any Shares received upon exercise of the Stock Option, and the treatment of any gain on the disposition of these Shares are subject to the terms of the Plan and any rules that the Committee may prescribe.  The Plan document, as may be amended from time to time, is incorporated by reference into these Terms and Conditions.  Except with respect to the choice of law provision, in the event of any conflict between the terms of the Plan and the terms of these Terms and

 

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Conditions, the terms of the Plan will control.  By not declining the Award, you acknowledge receipt of the Plan, as in effect on the date of these Terms and Conditions.

 

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

 

By not declining the Award you agree, as a condition of participation in the Plan, that any personal data in relation to you may be held by the Company and/or a Subsidiary and/or the Board and/or the Committee and passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for all purposes relating to the operation or administration of the Plan, including to countries or territories outside your country or territory or, where applicable, outside of the European Economic Area.

 

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

 

20.                                 Limitations.  Nothing in these Terms and Conditions or the Plan gives you any right to continue in the employ of the Company or any of its Subsidiaries or to interfere in any way with the right of the Company or any Subsidiary to terminate your employment at any time.  Payment of Shares is not secured by a trust, insurance contract or other funding medium, and you do not have any interest in any fund or specific asset of the Company by reason of the Stock

 

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Option.  You have no rights as a stockholder of the Company pursuant to the Stock Option until Shares are actually delivered you.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	
 
    	
 
    
	
 
    	
George R. Oliver
    
	
 
    	
Chief Executive Officer,
    
	
 
    	
Tyco International Ltd.
    

 

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Tyco International Ltd 
 2012 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

STOCK OPTION LEADERSHIP AWARD

 

STOCK OPTION AWARD made in Princeton, New Jersey, as of                  (the “Grant Date”) pursuant to the Tyco International Ltd. 2012 Stock and Incentive Plan (the “Plan”).  Capitalized terms that are not defined herein have the meaning ascribed to them in the Plan.

 

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

 

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

 

3.                                       Vesting.  Except as otherwise set forth herein, the Stock Option will become fully exercisable on the third (3rd) anniversary of the Grant Date.  No credit will be given for periods following Termination of Employment, except as set forth herein.

 

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

 

5.                                       Payment of Exercise Price.  You may pay the Exercise Price by cash, certified check, bank draft, wire transfer or postal or express money order. Alternatively, payment may be made by one or more of the following methods: (i) delivering to UBS Financial Services, or such other stock option administrator as selected by the Company, a properly executed exercise notice, together with irrevocable instructions to a broker to deliver promptly (within the typical settlement cycle for the sale of equity securities on the relevant trading market, or otherwise in accordance with Regulation T issued by the Federal Reserve Board) to the Company or its  agents the amount of the sale proceeds adequate to satisfy the portion of the Exercise Price being so paid; (ii) tendering to the Company (by physical delivery or attestation) certificates of Common Stock that you have held for six months or longer (unless the Committee, in its sole discretion, waives this 6-month period) that have an aggregate Fair Market Value as of the day prior to the date of exercise equal to the portion of the Exercise Price being so paid; or (iii) if such form of payment is expressly authorized by the Board or the Committee instructing the Company to withhold Shares that would otherwise be issued were the Exercise Price to be paid in cash that have an aggregate Fair Market Value as of the date of exercise equal to the portion of the Exercise Price being so paid.  Notwithstanding the foregoing, you may not tender any form

 

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of payment that the Company determines, in its sole and absolute discretion, could violate any law or regulation. You are not required to purchase all Shares subject to the Stock Option at one time, but you must pay the full Exercise Price for all Shares that you elect to purchase before they will be delivered.

 

6.                                       Exercise of Stock Option.  Subject to these Terms and Conditions, the Stock Option may be exercised by contacting (i) UBS Financial Services Inc. at 877-STK-TYCO (1-877-785-8926) if calling from within the U.S. or 001-201-272-7611 if calling from outside the U.S., or (ii) such other stock option administrator as is selected by the Company.  Your Stock Option may be exercised after your death only by your estate or by the person given the authority to exercise the Stock Option by your will or by operation of law.  If the Stock Option is exercised after your death, the Company will deliver Shares only after the Company has determined that the person exercising the Stock Option is the duly appointed executor or administrator of your estate or the person to whom the Stock Option has been transferred by your will or by the applicable laws of descent and distribution.

 

7.                                       Retirement, Termination of Employment, Disability or Death.  The Stock Option will vest and remain exercisable as set forth below in the case of Termination of Employment, Retirement, Disability or death:

 

	
Event
    	
 
    	
Vesting
    	
 
    	
Exercise
    
	
Voluntary Termination of Employment (other than   Retirement)
    	
 
    	
Unvested Awards are forfeited as of your   Termination of Employment.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) 90 days after Termination of   Employment.
    
	
Involuntary Termination of Employment not for Cause
    	
 
    	
Unvested Awards are forfeited as of your   Termination of Employment, except as otherwise provided in Sections 8, 9 or   10.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) 90 days after Termination of   Employment, except as otherwise provided in Sections 8, 9 or 10.
    
	
Termination of Employment for Cause
    	
 
    	
Unvested Awards are immediately forfeited as of   your Termination of Employment.
    	
 
    	
Vested Awards are immediately cancelled upon   Termination of Employment.
    

 

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Retirement (defined as Termination of Employment   for reasons other than Cause on or after age 55 if the sum of your age and   full years of service with the Company is at least 60).
    	
 
    	
Unvested Awards that have been granted within   twelve months are forfeited if your Retirement occurs less than twelve months   after the Grant Date. On or after the 1st anniversary of the Grant Date,   unvested Awards accelerate and vest pro rata based on the number of full months of   service completed commencing on the Grant Date and ending on the date of your   Termination of Employment divided by the number of full months required to   achieve complete vesting. The remaining unvested portion of your Award will   immediately be forfeited and your rights with respect to such Stock Options   will end.
    	
 
    	
Vested Awards expire on the earlier of (i) original   expiration date, or (ii) three years after Termination of Employment.
    
	
Disability or death
    	
 
    	
Unvested Awards become fully vested as of your   Termination of Employment.
    	
 
    	
Vested Awards expire on the earlier of   (i) original expiration date, or (ii) three years after your   Termination of Employment.
    

 

Termination of Employment means the date of cessation of an Employee’s employment relationship with the Company or a subsidiary for any reason, with or without Cause, as determined by the Company. For the avoidance of doubt, the date of cessation of your employment relationship with the Company or a Subsidiary shall exclude any notice or severance period that you may be entitled to receive.

 

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

 

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

 

9.                                       Termination of Employment as a Result of Divestiture or Outsourcing.  Notwithstanding any provision to the contrary in Sections 7 or 8, if your involuntary Termination of Employment other than for Cause is as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), your Stock Option will vest on a pro-rata basis based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting. The vested portion of your Stock Option will expire on the earlier of (i) the original expiration date and (ii) three years after the date of your Termination of Employment.

 

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

 

For purposes of this Section 9, “Comparable Employment” shall mean employment (i) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to your Termination of Employment and (ii) that is at a geographic location no more than 50 miles from your principal place of employment in effect immediately prior to your Termination of Employment;  “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary by which you are employed of all or a portion of the assets used by the Company or Subsidiary in a trade or business to an unrelated corporation or entity; “Disposition of a Subsidiary” shall mean the disposition by the Company or a Subsidiary of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

 

10.                                 Termination of Employment with Severance Benefits.

 

(a) Termination in connection with the Separation.  In the event of (i) your Termination of Employment that occurs within the period beginning on the Grant Date and

 

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ending on the date that is one year following the completion of the spin-offs of the ADT Corporation and Pentair, Ltd. (formerly known as Tyco Flow Control International, Ltd.) ( the “Separation”), and (ii) the determination, in the sole discretion of the Executive Vice President, Human Resources of the Company, or his or her designee, , that your Termination of Employment is due to the Separation, your unvested Stock Options subject to this Award will accelerate and vest pro rata based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting.  Your Stock Option will expire one year after the date of your Termination of Employment or such later date as may be applicable under Section 7.

 

Further, if you qualify for accelerated vesting under this Section 10(a), the requirement set forth in Section 10(b)(i) shall not apply.

 

(b) Termination of Employment - Executives.  If (i) your Termination of Employment occurs twelve months or later after the Grant Date, (ii) upon your Termination of Employment you are a Section 16 Officer or employed in a job classification Band 1 or Band 2, and (iii) you are involuntarily terminated for reasons other than Cause, a portion of your Award equivalent to the number of Stock Options that would have vested in the twelve month period following the date of your Termination of Employment had you not been terminated will accelerate and immediately vest.  The vested portion of your Award will expire on the earlier of (i) the original expiration date of the Award, (ii) one year after the date of your Termination of Employment and (iii) such later date as may be applicable under Section 7.

 

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

 

By not declining the Award, you hereby acknowledges that the Company or Subsidiary or employing company shall require you to pay the Company or Subsidiary or employing company  the amount of any federal, state, local, foreign or other tax or other amount required by any governmental authority to be withheld and paid over by the Company or Subsidiary or employing company to such authority for your account, and you agree, as a condition of the grant of the Award and delivery of any Shares, to satisfy such obligations.  Notwithstanding the foregoing, the Committee may in its discretion establish procedures to permit you to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other income tax obligations relating to the Award, by electing (the “election”) to have the Company withhold shares of Common Stock from the Shares to which you otherwise become entitled. The number of Shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld, taking into account any exchange rate issues, is determined as nearly equal as possible to (but not exceeding) the amount of such obligations being satisfied. Each election must be made in writing in accordance with election procedures established by the Committee

 

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By not declining the Award you acknowledge that the Company has made no warranties or representations to you with respect to the tax consequences (including but not limited to income tax consequences) with respect to the Award contemplated by these Terms and Conditions, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences.  You hereby acknowledge that there may be adverse tax consequences upon the grant or vesting or exercise of the Award and/or the acquisition or disposition of the Shares subject to the Award and you have been advised that you should consult with your own attorney, accountant and/or tax advisor regarding the decision to enter into this Award and these Terms and Conditions and the consequences thereof.  You also acknowledge that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for you.

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

17.                                 Plan Terms Govern.  The exercise of the Stock Option, the disposition of any Shares received upon exercise of the Stock Option, and the treatment of any gain on the disposition of these Shares are subject to the terms of the Plan and any rules that the Committee may prescribe.  The Plan document, as may be amended from time to time, is incorporated by reference into these Terms and Conditions.  Except with respect to the choice of law provision, in the event of any conflict between the terms of the Plan and the terms of these Terms and Conditions, the terms of the Plan will control.  By not declining the Award, you acknowledge receipt of the Plan, as in effect on the date of these Terms and Conditions.

 

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

 

By not declining the Award you agree, as a condition of participation in the Plan, that any personal data in relation to you may be held by the Company and/or a Subsidiary and/or the Board and/or the Committee and passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for all purposes relating to the operation or administration of the Plan, including to countries or territories outside your country or territory or, where applicable, outside of the European Economic Area.

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	
 
    	
 
    
	
 
    	
George R. Oliver
    
	
 
    	
Chief Executive Officer,
    
	
 
    	
Tyco International Ltd.
    

 

18

 

Tyco International Ltd.

2012 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

RESTRICTED UNIT AWARD

 

RESTRICTED UNIT AWARD made in Princeton, New Jersey, as of                  (the “Grant Date”) pursuant to the Tyco International Ltd. 2012 Stock and Incentive Plan (the “Plan”).  Capitalized terms that are not defined herein have the meaning ascribed to them in the Plan.

 

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

 

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

 

3.                                      Form of Payment.  Vested Restricted Units will be redeemed solely for Shares, subject to Sections 13 and 14.

 

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

 

5.                                      Vesting.  Except as otherwise set forth herein, your Restricted Units will vest in installments of one-fourth (1/4) of the Shares specified in your Grant Letter per year over four years. Your vested right will be calculated on the anniversary of the Grant Date.  No credit will be given for periods following Termination of Employment. Except as otherwise set forth herein, payment shall be made to you as soon as practicable following the vesting date.

 

6.                                      Retirement, Termination of Employment, Disability or Death.  Restricted Units will vest in the case of Termination of Employment, Retirement, Disability, or death as set forth below:

 

19

 

	
Event
    	
 
    	
Vesting
    
	
Voluntary Termination of Employment (other than   Retirement)
    	
 
    	
Unvested Awards are forfeited and your rights with respect to such   Restricted Units will end as of your   Termination of Employment.
    
	
Involuntary Termination of Employment not for Cause
    	
 
    	
Unvested Awards are forfeited and your rights with respect to such   Restricted Units will end as of your   Termination of Employment, except as otherwise provided in Sections 7, 8 or   9.
    
	
Termination of Employment for Cause
    	
 
    	
Unvested Awards are immediately forfeited and your rights with respect to such   Restricted Units will end as of your   Termination of Employment.
    
	
Retirement (defined as Termination of Employment for reasons   other than Cause on or after age 55 if the sum of your age and full years of   service with the Company is at least 60).
    	
 
    	
If you are   Retirement eligible and your Termination of Employment is for reasons other   than Cause and is less than twelve months after the Grant Date, your   Restricted Units will immediately be forfeited and your rights with respect   thereto will end. If you are Retirement eligible and your Termination of   Employment is for reasons other than Cause and is twelve or more months after   the Grant Date, your Restricted Units will accelerate and vest pro rata (in   full month increments) based on the   number of full months of service that you have completed beginning on the Grant Date and ending on the date of your   Termination of Employment divided by the original number of full months in   the vesting period, (with an offset for Shares previously vested). Any unearned portion of your Award will   immediately be forfeited and your rights with respect to such Restricted   Units will end. Any payment shall be made to you as soon as practicable   following your Termination of Employment.
    

 

20

 

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

 

“Termination of Employment” means the date of cessation of an Employee’s employment relationship with the Company or a Subsidiary for any reason, with or without Cause, as determined by the Company. For the avoidance of doubt, the date of cessation of your employment relationship with the Company or a Subsidiary shall exclude any notice or severance period that you may be entitled to receive.

 

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

 

8.                                      Termination of Employment as a Result of Divestiture or Outsourcing.  Notwithstanding any provision to the contrary in Sections 6 or 7, if your involuntary Termination of Employment other than for Cause is as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), your Restricted Units will vest on a pro-rata basis based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting (with an offset for Shares previously vested). Any payment shall be made to you as soon as practicable following the date of vesting.

 

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

 

21

 

successor company or outsourcing agent, as applicable, but do not commence such employment on the Applicable Employment Date.

 

For the purposes of this Section 8, “Comparable Employment” shall mean employment (i) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to your Termination of Employment and (ii) that is at a geographic location no more than 50 miles from your principal place of employment in effect immediately prior to your Termination of Employment; “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary by which you are employed of all or a portion of the assets used by the Company or Subsidiary in a trade or business to an unrelated corporation or entity; “Disposition of a Subsidiary” shall mean the disposition by the Company or a Subsidiary of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

 

9.                                      Termination of Employment in Connection with the Separation.  In the event of (i) your Termination of Employment that occurs within the period beginning on the Grant Date and ending on the date that is one year following the completion of the spin-offs of the ADT Corporation and Pentair, Ltd. (formerly known as Tyco Flow Control International, Ltd.) ( the “Separation”), and (ii) the determination, in the sole discretion of the Executive Vice President, Human Resources of the Company, or his or her designee that your Termination of Employment is due to the Separation, your unvested Restricted Units subject to this Award will accelerate and vest pro rata based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting (with an offset for Restricted Units previously vested).

 

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

 

By accepting the Award and not declining the Award, you hereby acknowledges that the Company or Subsidiary or employing company shall require you to pay the Company or

 

22

 

Subsidiary or employing company the amount of any federal, state, local, foreign or other tax or other amount required by any governmental authority to be withheld and paid over by the Company or Subsidiary or employing company to such authority for your account, and you agree, as a condition of the grant of the Award and delivery of any Shares, to satisfy such obligations.  Notwithstanding the foregoing, the Committee may in its discretion establish procedures to permit you to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other income tax obligations relating to the Award, by electing (the “election”) to have the Company withhold shares of Common Stock from the Shares to which you otherwise become entitled.  The number of Shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld, taking into account any exchange rate issues, is determined as nearly equal as possible to (but not exceeding) the amount of such obligations being satisfied.  Each election must be made in writing in accordance with election procedures established by the Committee

 

By accepting the Award and not declining the Award you acknowledge that the Company has made no warranties or representations to you with respect to the tax consequences (including but not limited to income tax consequences) with respect to the Award contemplated by these Terms and Conditions, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences.  You hereby acknowledge that there may be adverse tax consequences upon the grant or vesting of the Award and/or the acquisition or disposition of the Shares subject to the Award and you have been advised that you should consult with your own attorney, accountant and/or tax advisor regarding the decision to enter into this Award and these Terms and Conditions and the consequences thereof.  You also acknowledge that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for you.

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

13.                               Adjustments.  In the event of any stock split, reverse stock split, dividend or other distribution (whether in the form of cash, Shares, other securities or other property),

 

24

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

By accepting the Award and not declining the Award you agree, as a condition of participation in the Plan, that any personal data in relation to you may be held by the Company and/or a Subsidiary and/or the Board and/or the Committee and passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for all purposes relating to the operation or administration of the Plan, including to countries or territories outside your country or territory or, where applicable, outside of the European Economic Area.

 

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

 

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

 

20.                               Incorporation of Other Agreements.  These Terms and Conditions and the Plan constitute the entire understanding between you and the Company regarding the

 

26

 

Restricted Units.  These Terms and Conditions supersede any prior agreements, commitments or negotiations concerning the Restricted Units, except as otherwise provided in Section 16 above.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

Failure to affirmatively acknowledge or reject this Award before January 19, 2013 will result in your immediate and automatic acceptance of this Award and the Terms and Conditions under which this Award is governed, including the noncompetition provision contained therein You must therefore reject this Award or acknowledge these Terms and Conditions by returning the enclosed Acceptance Form to Tyco International Ltd., c/o Equity Plan Administration, 9 Roszel Road, Princeton, NJ  08540 including your written signature within sixty (60) days of the date of these Terms and Conditions.  Notification of your rejection will nullify this grant unless otherwise agreed to in writing by you and the Company.

 

 

	
 
    	
 
    
	
 
    	
George R. Oliver
    
	
 
    	
Chief Executive Officer,
    
	
 
    	
Tyco International, Ltd.
    

 

28

 

Tyco International Ltd.

2012 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

RESTRICTED UNIT LEADERSHIP AWARD

 

RESTRICTED UNIT AWARD made in Princeton, New Jersey, as of                    (the “Grant Date”) pursuant to the Tyco International Ltd. 2012 Stock and Incentive Plan (the “Plan”).  Capitalized terms that are not defined herein have the meaning ascribed to them in the Plan.

 

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

 

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

 

3.                                       Form of Payment.  Vested Restricted Units will be redeemed solely for Shares, subject to Sections 13 and 14.

 

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

 

5.                                       Vesting.  Except as otherwise set forth herein, your Restricted Units will vest in installments of one half (1/2) of the Shares specified in your Grant Letter in year 3 and year 4. Your vested right will be calculated on the anniversary of the Grant Date.  No credit will be given for periods following Termination of Employment. Except as otherwise set forth herein, payment shall be made to you as soon as practicable following the vesting date.

 

6.                                       Retirement, Termination of Employment, Disability or Death.  Restricted Units will vest in the case of Termination of Employment, Retirement, Disability, or death as set forth below:

 

29

 

	
Event
    	
 
    	
Vesting
    
	
Voluntary Termination of Employment (other than   Retirement)
    	
 
    	
Unvested Awards are forfeited and your rights with respect to such   Restricted Units will end as of your   Termination of Employment.
    
	
Involuntary Termination of Employment not for Cause
    	
 
    	
Unvested Awards are forfeited and your rights with respect to such   Restricted Units will end as of your Termination   of Employment, except as otherwise provided in Sections 7, 8 or 9.
    
	
Termination of Employment for Cause
    	
 
    	
Unvested Awards are immediately forfeited and your rights with respect to such   Restricted Units will end as of your   Termination of Employment.
    
	
Retirement (defined as Termination of Employment for reasons   other than Cause on or after age 55 if the sum of your age and full years of   service with the Company is at least 60).
    	
 
    	
If you are   Retirement eligible and your Termination of Employment is for reasons other   than Cause and is less than twelve months after the Grant Date, your   Restricted Units will immediately be forfeited and your rights with respect   thereto will end. If you are Retirement eligible and your Termination of   Employment is for reasons other than Cause and is twelve or more months after   the Grant Date, your Restricted Units will accelerate and vest pro rata (in   full month increments) based on the   number of full months of service that you have completed beginning on the Grant Date and ending on the date of your   Termination of Employment divided by the original number of full months in   the vesting period, (with an offset for Shares previously vested). Any unearned portion of your Award will   immediately be forfeited and your rights with respect to such Restricted   Units will end. Any payment shall be made to you as soon as practicable   following your Termination of Employment.
    

 

30

 

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

 

“Termination of Employment” means the date of cessation of an Employee’s employment relationship with the Company or a Subsidiary for any reason, with or without Cause, as determined by the Company. For the avoidance of doubt, the date of cessation of your employment relationship with the Company or a Subsidiary shall exclude any notice or severance period that you may be entitled to receive.

 

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

 

8.                                       Termination of Employment as a Result of Divestiture or Outsourcing.  Notwithstanding any provision to the contrary in Sections 6 or 7, if your involuntary Termination of Employment other than for Cause is as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), your Restricted Units will vest on a pro-rata basis based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting (with an offset for Shares previously vested). Any payment shall be made to you as soon as practicable following the date of vesting.

 

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

 

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successor company or outsourcing agent, as applicable, but do not commence such employment on the Applicable Employment Date.

 

For the purposes of this Section 8, “Comparable Employment” shall mean employment (i) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in effect immediately prior to your Termination of Employment and (ii) that is at a geographic location no more than 50 miles from your principal place of employment in effect immediately prior to your Termination of Employment; “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary by which you are employed of all or a portion of the assets used by the Company or Subsidiary in a trade or business to an unrelated corporation or entity; “Disposition of a Subsidiary” shall mean the disposition by the Company or a Subsidiary of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

 

9.                                       Termination of Employment in Connection with the Separation.  In the event of (i) your Termination of Employment that occurs within the period beginning on the Grant Date and ending on the date that is one year following the completion of the spin-offs of the ADT Corporation and Pentair, Ltd. (formerly known as Tyco Flow Control International, Ltd.) ( the “Separation”), and (ii) the determination, in the sole discretion of the Executive Vice President, Human Resources of the Company, or his or her designee that your Termination of Employment is due to the Separation, your unvested Restricted Units subject to this Award will accelerate and vest pro rata based on the number of full months of service completed commencing on the Grant Date and ending on the date of your Termination of Employment divided by the number of full months required to achieve complete vesting (with an offset for Restricted Units previously vested).

 

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

 

By accepting the Award and not declining the Award, you hereby acknowledges that the Company or Subsidiary or employing company shall require you to pay the Company or

 

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Subsidiary or employing company the amount of any federal, state, local, foreign or other tax or other amount required by any governmental authority to be withheld and paid over by the Company or Subsidiary or employing company to such authority for your account, and you agree, as a condition of the grant of the Award and delivery of any Shares, to satisfy such obligations.  Notwithstanding the foregoing, the Committee may in its discretion establish procedures to permit you to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other income tax obligations relating to the Award, by electing (the “election”) to have the Company withhold shares of Common Stock from the Shares to which you otherwise become entitled.  The number of Shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld, taking into account any exchange rate issues, is determined as nearly equal as possible to (but not exceeding) the amount of such obligations being satisfied.  Each election must be made in writing in accordance with election procedures established by the Committee

 

By accepting the Award and not declining the Award you acknowledge that the Company has made no warranties or representations to you with respect to the tax consequences (including but not limited to income tax consequences) with respect to the Award contemplated by these Terms and Conditions, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences.  You hereby acknowledge that there may be adverse tax consequences upon the grant or vesting of the Award and/or the acquisition or disposition of the Shares subject to the Award and you have been advised that you should consult with your own attorney, accountant and/or tax advisor regarding the decision to enter into this Award and these Terms and Conditions and the consequences thereof.  You also acknowledge that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for you.

 

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

 

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

 

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

 

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

 

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

 

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

 

13.                                 Adjustments.  In the event of any stock split, reverse stock split, dividend or other distribution (whether in the form of cash, Shares, other securities or other property),

 

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

 

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

 

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

 

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

 

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

 

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

 

By accepting the Award and not declining the Award you agree, as a condition of participation in the Plan, that any personal data in relation to you may be held by the Company and/or a Subsidiary and/or the Board and/or the Committee and passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for all purposes relating to the operation or administration of the Plan, including to countries or territories outside your country or territory or, where applicable, outside of the European Economic Area.

 

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

 

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

 

20.                                 Incorporation of Other Agreements.  These Terms and Conditions and the Plan constitute the entire understanding between you and the Company regarding the

 

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Restricted Units.  These Terms and Conditions supersede any prior agreements, commitments or negotiations concerning the Restricted Units, except as otherwise provided in Section 16 above.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Failure to affirmatively acknowledge or reject this Award before January 19, 2013 will result in your immediate and automatic acceptance of this Award and the Terms and Conditions under which this Award is governed, including the noncompetition provision contained therein You must therefore reject this Award or acknowledge these Terms and Conditions by returning the enclosed Acceptance Form to Tyco International Ltd., c/o Equity Plan Administration, 9 Roszel Road, Princeton, NJ  08540 including your written signature within sixty (60) days of the date of these Terms and Conditions.  Notification of your rejection will nullify this grant unless otherwise agreed to in writing by you and the Company.

 

 

	
 
    	
 
    
	
 
    	
George R. Oliver
    
	
 
    	
Chief Executive Officer,
    
	
 
    	
Tyco International, Ltd.
    

 

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Tyco International Ltd.

2012 Stock and Incentive Plan

 

TERMS AND CONDITIONS

OF

PERFORMANCE SHARE UNIT AWARD

 

PERFORMANCE SHARE UNIT AWARD made in Princeton, New Jersey, as of                        (“Grant Date”) pursuant to the Tyco International Ltd. 2012 Stock and Incentive Plan (the “Plan”).  Capitalized terms that are not defined herein have the meaning ascribed to them in the Plan.

 

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

 

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

 

3.                                       Form of Payment.  Your vested Performance Share Unit Award, determined in accordance with Section 5, will be redeemed solely for Shares, subject to Sections 13 and 14.

 

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

 

5.                                       (a) Vesting.  Except as otherwise set forth herein, and subject to Section 5(b), your Performance Share Unit Award will fully vest at the end of the Vesting Period, as described in Appendix A.  Any payment shall be made as soon as practicable following the end of the Vesting Period.

 

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

 

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measures and satisfaction of any other applicable terms and conditions will be made in the sole discretion of the Committee as set forth below.

 

6.                                       Retirement, Termination of Employment, Disability or Death.  Subject to Section 5(b), Performance Share Units will vest, in the case of Termination of Employment, Retirement, Disability, or death, as set forth below:

 

	
Event
    	
 
    	
Vesting
    
	
Voluntary   Termination of Employment (other than Retirement)
    	
 
    	
Unvested   Awards are forfeited and your rights   with respect to these Performance Share Units will end as of your   Termination of Employment.
    
	
Involuntary   Termination of Employment not for Cause
    	
 
    	
Unvested   Awards are forfeited and your rights   with respect to these Performance Share Units will end as of your   Termination of Employment, except as otherwise provided in Sections 7, 8 or   9.
    
	
Termination   of Employment for Cause
    	
 
    	
Unvested   Awards are immediately forfeited and your rights with respect to these Performance Share Units will   end as of your Termination of Employment.
    

 

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Retirement   (defined as Termination of Employment for reasons other than Cause on or   after age 55 if the sum of your age and full years of service with the   Company is at least 60).
    	
 
    	
If your Termination of Employment is due to   your Retirement less than 12 months after the Grant Date, your Performance   Share Units will immediately be forfeited and your rights with respect   thereto will end. If your Termination of Employment is due to your Retirement   twelve or more months after the Grant Date, you will earn a pro rata portion   of your Award, if any Award is payable with respect to the Performance Cycle   as determined in accordance with Section 5(b) above, based on the   number of full months you have completed during the period beginning on the   Grant Date and ending on the last day of the Vesting Period. Any unearned   portion of your Award will immediately be forfeited and your rights with   respect thereto will end. Any payment shall be made as soon as practicable   following the later of your Termination of Employment and the determination   of any adjustment at the end of the Performance Cycle as described in   Section 5(b).
    
	
Disability   or death
    	
 
    	
If your Termination of Employment is the   result of your death or Disability, your Award will be determined as if you   had continued active employment through the end of the Performance Cycle   applicable to the Award. Any payment shall be made to your estate as soon as   practicable following the later of your Termination of Employment and the   determination of any adjustment at the end of the Performance Cycle as   described in Section 5(b).
    

 

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Termination of Employment means the date of cessation of an Employee’s employment relationship with the Company or a subsidiary for any reason, with or without Cause, as determined by the Company.  For the avoidance of doubt, the date of cessation of your employment relationship with the Company or a Subsidiary shall exclude any notice or severance period that you may be entitled to receive.

 

7.                                       Change in Control.  In the event of a Change in Control of Tyco International Ltd, unless otherwise provided in this Section 7, the Terms and Conditions applicable to your Award shall continue in effect, except that no adjustment shall be made under Section 5(b).  Your Award shall vest and become immediately payable upon (i) your Change in Control Termination, or (ii) your Termination of Employment by reason of a “Good Reason Resignation” which qualifies you for severance benefits under the Tyco International Ltd. Change in Control Severance Plan for Certain U. S. Officers and Executives (the “CIC Severance Plan”) within two years following a Change in Control.  Any Award payable pursuant to the preceding sentence shall be paid , as determined in the sole discretion of the Committee, at the higher of the target number of Performance Share Units specified in your Grant Letter and the level of actual performance as of the date of the Change in Control (and shall include any DEUs credited under Section 4) as soon as practicable following your Change in Control Termination or your Termination of Employment by reason of a Good Reason Resignation upon a Change in Control, as described in the preceding sentence.  If prior to the Change in Control, you had satisfied the Retirement provisions of Section 6 and terminated your employment because of your Retirement, or previously terminated employment as a result of death or Disability as described in Section 6, your Award (as determined under Section 6) shall be paid at the target number of Performance Share Units and shall be payable to you as soon as practicable following the Change in Control and no adjustment shall be made under Section 5(b).

 

8.                                       Termination of Employment as a Result of Divestiture or Outsourcing.  Notwithstanding any provision to the contrary in Sections 6 or 7, if your involuntary Termination of Employment other than for Cause is as a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement (each as defined below), you will earn a pro rata portion of your Award based on the number of full months you have completed during the period beginning on the Grant Date and ending on the last day of the Vesting Period.  Any payment shall be made as soon as practicable following the later of your Termination of Employment and the determination of any adjustment described in Section 5(b).

 

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

 

For the purposes of this Section 8, “Comparable Employment” shall mean employment (i) with base compensation and benefits (not including perquisites, allowances or long term incentive compensation) that, taken as whole, is not materially reduced from that which is in

 

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effect immediately prior to your Termination of Employment and (ii) that is at a geographic location no more than 50 miles from your principal place of employment in effect immediately prior to your Termination of Employment; “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary by which you are employed of all or a portion of the assets used by the Company or Subsidiary in a trade or business to an unrelated corporation or entity; “Disposition of a Subsidiary” shall mean the disposition by the Company or a Subsidiary of its interest in a subsidiary or controlled entity to an unrelated individual or entity (which, for the avoidance of doubt, excludes a spin-off or split-off or similar transaction), provided that such subsidiary or entity ceases to be controlled by the Company as a result of such disposition; and “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which (i) the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and (ii) the Outsourcing Agent is obligated to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

 

9.                                       Termination of Employment with Severance Benefits.

 

(a) Termination in connection with the Separation.  In the event of (i) your Termination of Employment that occurs within the period beginning on the Grant Date and ending on the date that is one year following the completion of the spin-offs of the ADT Corporation and Pentair, Ltd. (formerly known as Tyco Flow Control International, Ltd.) ( the “Separation”), and (ii) the determination, in the sole discretion of the Executive Vice President, Human Resources of the Company, or his or her designee, that your Termination of Employment is due to the Separation, you will earn a pro rata portion of your Award, if any, as is determined in accordance with Section 5 above, based on the number of full months you have completed during the period beginning on the Grant Date and ending on the last day of the Vesting Period.  Any payment shall be made as soon as practicable following the later of the date of your Termination of Employment and the determination of any adjustment described in Section 5(b).

 

(b) Termination of Employment — Severance Eligible Employees. If (i) your Termination of Employment occurs twelve months or later after the Grant Date, (ii) is for a reason other than individual performance, and (iii) you are eligible to receive severance benefits under a severance plan maintained by the Company or a Subsidiary or an employment agreement, your Award will immediately be forfeited and your rights with respect to these Performance Share Units will end, unless the severance plan or agreement expressly provides that you may earn a pro rata portion of your Award.  In such a case, you will earn a pro rata portion of your Award based on the number of full months you have completed during the period beginning on the Grant Date and ending on the last day of the Vesting Period, with an offset for any Performance Share Units earned under Section 9(a) above, as the provisions of Sections 9(a) and 9(b) shall in no event provide for duplicative payments. Any payment shall be made as soon as practicable following the later of your Termination of Employment and the determination of any adjustment described in Section 5(b).

 

10.                                 Withholdings.  The Company will have the right, prior to any issuance or delivery of Shares based on your Performance Share Units, to withhold or demand from you

 

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

 

By not declining the Award, you hereby acknowledges that the Company or Subsidiary or employing company shall require you to pay the Company or Subsidiary or employing company the amount of any federal, state, local, foreign or other tax or other amount required by any governmental authority to be withheld and paid over by the Company or Subsidiary or employing company to such authority for your account, and you agree, as a condition of the grant of the Award and delivery of any Shares, to satisfy such obligations.  Notwithstanding the foregoing, the Committee may in its discretion establish procedures to permit you to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other income tax obligations relating to the Award, by electing (the “election”) to have the Company withhold shares of Common Stock from the Shares to which you otherwise become entitled.  The number of Shares to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld, taking into account any exchange rate issues, is determined as nearly equal as possible to (but not exceeding) the amount of such obligations being satisfied.  Each election must be made in writing in accordance with election procedures established by the Committee

 

By not declining the Award you acknowledge that the Company has made no warranties or representations to you with respect to the tax consequences (including but not limited to income tax consequences) with respect to the Award contemplated by these Terms and Conditions, and you are in no manner relying on the Company or its representatives for an assessment of such tax consequences.  You hereby acknowledge that there may be adverse tax consequences upon the grant or vesting of the Award and/or the acquisition or disposition of the Shares subject to the Award and you have been advised that you should consult with your own attorney, accountant and/or tax advisor regarding the decision to enter into this Award and these Terms and Conditions and the consequences thereof.  You also acknowledge that the Company has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for you

 

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

 

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

 

(a)                                  If your Termination of Employment is for Cause, including without limitation a termination as a result of your violation of the Company’s Code of Ethical Conduct, any unearned Performance Share Units shall be immediately rescinded and you will forfeit any rights you have with respect thereto.  Furthermore, by not declining this Performance Share Unit Award, you hereby agree and promise immediately to deliver to the Company the number of Shares (or, in the discretion of the Committee, the cash value of said shares) you received for Performance Share Units during the period beginning six months prior to your Termination of

 

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Employment for Cause and ending on the later of (i) the second anniversary of your Termination of Employment for Cause, including, without limitation, a termination for cause resulting from your violation of the Company’s Code of Ethical Conduct, or (ii) 60 days following the end of the Vesting Period.

 

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

 

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

 

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

 

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

 

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

 

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

 

By not declining the Award you agree, as a condition of participation in the Plan, that any personal data in relation to you may be held by the Company and/or a Subsidiary and/or the Board and/or the Committee and passed on to a third party broker, registrar, administrator and/or future purchaser of the Company for all purposes relating to the operation or administration of the Plan, including to countries or territories outside your country or territory or, where applicable, outside of the European Economic Area.

 

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

 

46

 

compensate you for the loss or diminution in value of any actual or prospective rights, benefits or expectation under or in relation to the Plan or the forfeiture and/or termination of this Award.

 

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

 

20.                                 Incorporation of Other Agreements.  These Terms and Conditions (including Appendix A) and the Plan constitute the entire understanding between you and the Company regarding the Performance Share Units.  These Terms and Conditions supersede any prior agreements, commitments or negotiations concerning the Performance Share Units, except as otherwise provided in Section 16 above.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	
 
    	
 
    
	
 
    	
George R. Oliver
    
	
 
    	
Chief Executive Officer,
    
	
 
    	
Tyco International, Ltd.
    

 

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