Sample Business Contracts

AS AMENDED DECEMBER 9, 1993 TYCO INTERNATIONAL LTD. 1983 KEY EMPLOYEE CORPORATE LOAN PROGRAM PURPOSE The Company believes that a program of providing loans to Key Employees for the purpose of attracting and retaining outstanding individuals as employees of Tyco International Ltd. (the "Company") and its subsidiaries would be beneficial. Therefore, the Company has established the 1983 Key Employee Corporate Loan Program (the "Program") to encourage ownership of Company common stock on favorable terms, and to reward those who have contributed to past success and those who are expected to make substantial contributions in the future to the successful management and growth of the Company. Under the Program, loan proceeds may be used for payment of federal income taxes due upon the vesting of Company common stock from time to time under the 1983 and 1994 Restricted Stock Ownership Plans for Key Employees, and to refinance other existing outstanding loans for such purposes. In no event, however, may such loan exceed the amount allowable to be loaned by the Company to such individual for such purpose as provided by any regulation of the United States Treasury or other state or federal statute. ADMINISTRATION The Program will be administered by the Compensation Committee (the "Committee") appointed by the Board of Directors and consisting of three or more members of the Board of Directors. None of the members of the Committee shall be eligible to participate in the Program during such membership. The interpretation and construction by the Committee of any provisions of the Program or of other matters related to the Program shall be final unless otherwise determined by the Board of Directors. A majority of the members of the Committee qualified to act on any question may act by meeting or by writing signed without meeting, and may execute any instrument or document required, or delegate to one of its members authority to sign. The Committee, from time to time, may adopt such rules and regulations as it considers desirable for the administration of the Program. No member of the Committee or of the Board of Directors shall be liable for any action or determination made in good faith with respect to the Program. PARTICIPANTS In the sole discretion of the Committee, Participants in the Program will consist of officers or other Key Employees of the Company and its subsidiaries who are recipients of awards under the 1983 or 1994 Restricted Stock Ownership Plan for Key Employees, and any other similar plans hereafter adopted by the Company. The Committee may authorize a maximum amount of loans under the Program up to a limit of five times the Participant's annual salary (base salary plus bonus) determined at the time of loan application. TERMS PROMISSORY NOTE: A Promissory Note will be executed at the time of the Loan, setting forth the terms and conditions of the loan. The term of the loan will be the lesser of Ten (10) years or attainment of age 69, subject to 99.8-91 the following mandatory prepayment schedule in cases in which the term of the Note matures subsequent to normal retirement age: ATTAINMENT OF: Age 66--payment of 10% of Loan outstanding at normal retirement age Age 67--payment of 20% of Loan outstanding at normal retirement age Age 68--payment of 30% of Loan outstanding at normal retirement age Age 69--payment of 40% of Loan outstanding at normal retirement age The foregoing mandatory prepayment schedule shall not apply as long as the Participant has not retired from active employment by the Company or in the event the Participant continues to serve on the Board of Directors of the Company. In such instances, the mandatory prepayment schedule shall commence after retirement or the date of termination of his service as a member of the Board of Directors. Prepayment in such event shall be 10% of the loan outstanding one year after such date; 20% of the loan outstanding two years after such date; 30% of the loan outstanding three years after such date; 40% of the loan outstanding four years after such date. The Note may be renewed solely at the option of the Company. INTEREST RATE: Effective January 1, 1993, interest on amounts loaned under the Program shall be at a rate equal to prime lending rate announced by the principal lending or agent commercial bank of the Company (or such other bank as may be determined by the Board of Directors), such rate to change, from time to time, so that it shall at all times be equal to such prime lending rate, but adjusted no more often than quarterly. Interest is payable annually by the borrower on or before January 15 of the next succeeding calendar year. Upon payment of all outstanding balances, a payment of interest accrued to such date shall be paid simultaneously therewith. Interest shall be calculated on the basis of a 365 day year. For loans granted prior to January 1, 1993, interest shall be at a rate of eight percent (8%) per annum, unless the borrower made a one-time election during January, 1993 to convert such interest rate to the prime lending rate method discussed in the paragraph above. PAYMENT OF PRINCIPAL The principal may be prepaid at any time, and from time to time, without penalty, during the term of the Loan. Such prepayment shall be made together with payments of accrued interest on the prepaid amount to date of prepayment. In the event a Participant voluntarily terminates employment, other than by reason of a disability permanently preventing his continued employment, principal repayment shall be made in Two (2) equal payments of Fifty percent (50%) of the amount then outstanding. The first payment is due forthwith upon termination; the second payment Three (3) months after termination; with interest on each payment accrued to the date of such payment. For purposes of applying the principal repayment provision of this paragraph, retirement by a Participant prior to attaining age 65 (unless authorized by the Committee) will constitute voluntary termination of employment. In the event a Participant is terminated by the Company, other than for cause, repayment of all outstanding loans together with interest thereon, must be made within Twelve (12) months of such termination. Death of a Participant shall not constitute termination of employment for repayment purposes. In the event of the death of a Participant, repayment of all outstanding loans, including interest thereon, must be made within twelve months from the date of death. Termination of a Participant for cause will require immediate repayment of all outstanding loans and all accrued interest. Cause is herein defined as dishonesty or engagement in illegal activities in the course of employment, or the conviction of the Participant of a felony or the entry of a plea of nolo contendere or like plea to a felony charge against the Participant. 99.8-92 Under the sale or other transfer or disposition of all or any part of shares for which loans hereunder have been granted (other than a gift to parents, spouse or children), then the Participant shall forthwith prepay an amount which shall be the greater of: (a) fifty percent (50%) of the market value of the Common stock of the Company, sold, transferred or disposed of, as reported on the New York Stock Exchange as of the close of business on the date of such sale, transfer, or disposition; or (b) the full amount of the loan that has been made to the Participant with reference to such shares which were sold, transferred or disposed of. ADDITIONAL CONDITIONS In the event the Company should subsequently sell or otherwise dispose of its ownership of a subsidiary by which the Participant is employed and if the Participant is not retained as an employee of the Company or another subsidiary of the Company after the transaction, such event shall be treated as a termination of the employment of the Participant by the Company requiring the repayment as above provided. A subsidiary of the Company, for purposes of the Loan Program, shall mean a corporation in which the Company owns at least 80% of the equity securities directly and/or indirectly through other corporations, so long as the ownership interest in such corporation ultimately attributable to the Company through such direct and/or indirect ownership is not less than 80%. The Company shall be entitled to declare the entire unpaid principal sum and all accrued and unpaid interest hereunder immediately due and payable at any time after the occurrence of any of the following events: (a) The failure of the Participant to make any payment of interest or principal by the due date therefor, which failure shall continue for more than 30 days after written notice of such failure shall have been given to the Participant. (b) The insolvency or inability of the Participant to pay his debts as they mature, the filing by the Participant of a voluntary petition in bankruptcy or for the adjustment of his debts under the Bankruptcy Code or the failure to have dismissed within 45 days after filing of an involuntary petition in bankruptcy filed against the Participant.