<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 ON FORM 10-K/A
TO FORM 10-K
<TABLE>
<C> <S>
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
OR
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
001-13836
(Commission File Number)
TYCO INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
BERMUDA NOT APPLICABLE
(Jurisdiction of Incorporation) (IRS Employer
Identification Number)
</TABLE>
THE ZURICH CENTRE, SECOND FLOOR, 90 PITTS BAY ROAD, PEMBROKE HM 08, BERMUDA
(Address of registrant's principal executive office)
441-292-8674*
(Registrant's telephone number)
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
<S> <C>
COMMON SHARES, PAR VALUE $0.20 NEW YORK STOCK EXCHANGE
SERIES A FIRST PREFERENCE SHARE PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III or this Form 10-K or any
amendment to this Form 10-K. Yes /X/ No / /
The aggregate market value of voting common shares held by nonaffiliates of
registrant was $65,402,003,745 as of January 21, 2000.
The number of common shares outstanding as of January 21, 2000 was
1,690,078,585.
DOCUMENTS INCORPORATED BY REFERENCE: NONE.
See pages 20 to 24 in the original Form 10-K filed on December 13, 1999 for the
exhibit index.
------------------------
* The executive offices of registrant's principal United States subsidiary,
Tyco International (US) Inc., are located at One Tyco Park, Exeter, New
Hampshire 03833. The telephone number there is (603) 778-9700.
- --------------------------------------------------------------------------------
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<PAGE>
TYCO INTERNATIONAL LTD.
AMENDMENT NO. 1 ON FORM 10-K/A TO THE ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED SEPTEMBER 30, 1999
Part III, Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Part III, Item 11. EXECUTIVE COMPENSATION
Part III, Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Part III, Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In compliance with General Instruction G (3) to Form 10-K, the information
required under these items is contained in the following Attachment A, which is
included herein and made part of this Annual Report on Form 10-K, not later than
120 days after the end of the fiscal year.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 on
Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly
authorized.
<TABLE>
<S> <C> <C>
TYCO INTERNATIONAL LTD.
By: /s/ MARK H. SWARTZ
---------------------------------------------
MARK H. SWARTZ
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
</TABLE>
Date: January 28, 2000
2
<PAGE>
ATTACHMENT A
DIRECTORS
Set forth below are the names, ages, positions and certain other information
concerning the current Directors of Tyco as of December 30, 1999. Former Tyco
refers to Tyco International Ltd., a Massachusetts corporation, that merged with
a wholly-owned subsidiary of ADT Limited, a Bermuda company, in July 1997. In
the merger, ADT Limited, as the continuing public company, changed its name to
Tyco International Ltd.
<TABLE>
<CAPTION>
% OF
OUTSTANDING
NUMBER OF COMMON
COMMON SHARES
DIRECTOR SHARES OWNED OWNED
NAME, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS AGE SINCE BENEFICIALLY(1) BENEFICIALLY
- -------------------------------------------------- --------- -------- --------------- ------------
<S> <C> <C> <C> <C>
L. Dennis Kozlowski............................ 53 1997 9,114,308(2) (12)
Chairman of the Board, President and Chief
Executive Officer (July 1997-present), Chairman
of the Board, Former Tyco (January 1993-July
1997); Chief Executive Officer, Former Tyco
(July 1992-present); President, Former Tyco
(1989-present); Director, Applied Power Inc.
(control products) (July 1994-present);
Director, Raytheon Company (electronic systems
and equipment) (June 1995-present); Director, US
Office Products Company (office products) (June
1998-present); Director, Starwood Hotel &
Resorts Worldwide, Inc. (hospitality and
lodging) (April 1999-present)
Michael A. Ashcroft............................ 53 1984 7,459,932(3)(13) (12)
Chairman, Carlisle Holdings Limited (services
company) (1987-present); Chairman of the Board
and Chief Executive Officer of ADT Limited
(1984-July 1997)
Joshua M. Berman (4)........................... 61 1997 148,180(4)(13) (12)
Counsel to Kramer Levin Naftalis & Frankel LLP
(counselors at law) (April 1985-present); Vice
President, Tyco (July 1997-present); Director,
Former Tyco (1967-1997)
Richard S. Bodman*+............................ 61 1997 74,147(5)(13) (12)
Managing General Partner, AT&T Ventures LLC
(venture capital) (May 1996-present); Senior
Vice President, Corporate Strategy and
Development, AT&T Corporation (communications)
(August 1990-May 1996); Director, Internet
Security Systems Group (May 1997-present);
Director, Young & Rubicam, Inc. (advertising)
(May 1998-present); Director, Former Tyco
(1992-1997)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
% OF
OUTSTANDING
NUMBER OF COMMON
COMMON SHARES
DIRECTOR SHARES OWNED OWNED
NAME, PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS AGE SINCE BENEFICIALLY(1) BENEFICIALLY
- -------------------------------------------------- --------- -------- --------------- ------------
<S> <C> <C> <C> <C>
John F. Fort, III*+............................ 58 1997 257,724(6)(13) (12)
Chairman of the Board, Former Tyco
(1982-December 1992); Chief Executive Officer,
Former Tyco (1982-June 1992); Director, Roper
Industries Inc. (diversified products) (December
1995-present); Director, Former Tyco (1982-1997)
Stephen W. Foss**.............................. 57 1997 137,584(7)(13) (12)
Chairman, President and Chief Executive Officer,
Foss Manufacturing Company, Inc. (manufacturer
of synthetic fibers and non-woven fabrics)
(1969-present); Director, Ameron International
Corp. (diversified manufacturer) (1994-present);
Director, Former Tyco (1983-1997)
Philip M. Hampton**+++......................... 67 1997 62,752(8)(13) (12)
Co-Managing Director, R. H. Arnold & Co.
(investment bank) (April 1997-present); Chairman
of the Board, Metzler Corporation (investment
bank) (October 1989-March 1997); Director,
Former Tyco (1985-1997)
James S. Pasman, Jr.*.......................... 69 1992 20,314(9)(13) (12)
Director, CSAM Income Fund, Inc. (1988-present);
Director, CSAM Strategic Global Income Fund,
Inc. (1988-present); Director, BT Insurance
Funds Trust (March 1996-present); Director,
Education Management Corp. (August
1997-present); Director, Warburg Pincus Funds
(July 1999-present)
W. Peter Slusser**............................. 70 1992 21,482(10)(13) (12)
President, Slusser Associates, Inc. (investment
banking firm) (1988-present); Director, Ampex
Corporation (high performance television and
data storage recording systems) (1992-present);
Director, Sparton Corporation (anti-submarine
warfare products and electronics) (1997-present)
Frank E. Walsh, Jr.**.......................... 58 1997 319,947(11)(13) (12)
Chairman, Sandyhill Foundation (charitable
organization) (August 1996-present); Chairman,
Wesray Capital Corporation (investment firm)
(October 1989-January 1996); Director, Former
Tyco (1992-1997)
</TABLE>
- ------------------------
* Member of Audit Committee
** Member of Compensation Committee
+ Member of Corporate Governance and Nominating Committee
++ Lead Director
4
<PAGE>
(1) The amounts shown are the number of common shares owned beneficially as of
December 30, 1999, based on information furnished by the persons named. Such
amounts give effect to the two-for-one stock split distributed on
October 21, 1999, effected in the form of a stock dividend. A person is
deemed to be the beneficial owner of shares if such person, either alone or
with others, has the power to vote or to dispose of such shares. Shares
beneficially owned by a person include shares that the person has the right
to acquire under stock options that were exercisable on December 30, 1999 or
that become exercisable within 60 days after December 30, 1999. There were
1,694,762,623 common shares of the Company outstanding as of December 30,
1999.
(2) The amount shown includes 1,616,566 shares which are held by a family
partnership of which Mr. Kozlowski is the sole general partner, including
40,000 shares that the partnership has the right to acquire through the
exercise of stock options. The amount shown also includes 6,147,834 shares
that Mr. Kozlowski has the right to acquire through the exercise of stock
options. The amount shown excludes 2,000,000 options awarded to
Mr. Kozlowski under the Tyco International Ltd. Long Term Incentive Plan,
which will become exercisable on July 17, 2000, and 802,400 shares held in a
charitable remainder trust, as to which Mr. Kozlowski disclaims beneficial
ownership.
(3) The amount shown consists of 7,447,180 shares held by or on behalf of a
company controlled by the trustee of a family trust in which Mr. Ashcroft is
beneficially interested and 12,752 shares that Mr. Ashcroft has the right to
acquire through the exercise of stock options.
(4) The amount shown includes 123,448 shares held in two charitable remainder
trusts of which Mr. Berman is co-trustee and Mr. Berman and members of his
immediate family are life beneficiaries. The amount shown also includes
20,180 shares that Mr. Berman has the right to acquire through the exercise
of stock options. The law firm of Kramer Levin Naftalis & Frankel LLP has
performed and during the current fiscal year will perform legal services for
the Company.
(5) The amount shown includes 20,180 shares that Mr. Bodman has the right to
acquire through the exercise of stock options.
(6) The amount shown includes 12,752 shares that Mr. Fort has the right to
acquire through the exercise of stock options. The amount shown also
includes 2,142 shares which are held by Mr. Fort as custodian for his child
and 3,000 shares held by his spouse.
(7) The amount shown includes 20,180 shares that Mr. Foss has the right to
acquire through the exercise of stock options. The amount shown also
includes 42,856 shares which are held by the Foss Manufacturing Company
Pension Plan and 15,000 shares which are held by the A.S. Foss Foundation.
(8) The amount shown includes 12,752 shares that Mr. Hampton has the right to
acquire through the exercise of stock options.
(9) The amount shown includes 16,466 shares that Mr. Pasman has the right to
acquire through the exercise of stock options.
(10) The amount shown includes 13,952 shares that Mr. Slusser has the right to
acquire through the exercise of stock options.
(11) The amount shown includes 140,000 shares which are held by Waterville
Partners, L.P., of which Mr. Walsh is a general partner and holds a limited
partnership interest. The amount shown excludes 10,593 restoration options
(see page 7), which will become exercisable on May 3, 2000.
(12) Less than 1%.
(13) The amounts shown do not include options awarded as director compensation
for the fiscal year ending September 30, 2000, as follows: Mr. Ashcroft
9,110 options, Mr. Berman 9,110 options, Mr. Bodman 9,110 options, Mr. Fort
9,110 options, Mr. Hampton 9,110 options, Mr. Pasman 6,833 options,
Mr. Slusser 5,957 options and Mr. Walsh 9,110 options. These options will
become exercisable over a period ending October 17, 2000.
The Board of Directors held seven meetings during fiscal 1999. Each director
attended at least 75% of the number of meetings of the Board and the meetings of
each committee on which he served.
5
<PAGE>
The Board has an Audit Committee, which reviews the internal controls of the
Company. It meets with appropriate financial personnel as well as the Company's
independent auditors. The Audit Committee reviews the scope and results of the
professional services provided by the Company's independent auditors and the
fees charged for such services and makes such recommendations to the Board as it
deems appropriate, including recommendations as to the appointment of
independent auditors. The Audit Committee met twice in fiscal 1999.
The Board has a Compensation Committee, which sets the compensation and
benefits of executive officers and key managers of the Company. The Compensation
Committee had one official meeting and several informal discussion meetings in
fiscal 1999.
The Board has a Corporate Governance and Nominating Committee, which is
responsible for evaluating the Board's structure, personnel and processes and
makes recommendations to the full Board regarding nominations of individuals for
election to the Board of Directors. The Committee will consider nominations
submitted by shareholders. To recommend a nominee, a shareholder should write to
the Vice President and Assistant Secretary of the Company at the Company's
registered address in Pembroke, Bermuda. Any such recommendation must include
the name and address of the candidate, a brief biographical description or
statement of the qualifications of the candidate and the candidate's signed
consent to being named as a nominee in the Company's proxy statement, if
nominated, and to serve as a director if elected. Under the Company's Bye-Laws,
generally no person is eligible for election to the office of director at any
general meeting unless, not less than six and not more than 28 calendar days
before the day of the meeting, there has been given to the Secretary notice in
writing by a shareholder (not being the person to be proposed) entitled to
attend and vote at the meeting and the signed consent of the nominee to serve as
a director. Corporate Governance and Nominating Committee members communicated
with one another informally, but did not hold a formal meeting in fiscal 1999.
The Lead Director position, held by a non-employee director, is responsible
for coordinating with the Chairman to establish the Board's agenda and the
nomination of new directors and their committee assignments, coordinating the
evaluation of the Chairman and all directors, and acting as the lead
non-employee director.
SUMMARY OF DIRECTORS' COMPENSATION
The Bye-Laws of the Company provide for shareholder approval of payment for
ordinary services as a non-employee director in an amount exceeding $25,000 per
annum. The Company's shareholders previously approved remuneration of up to
$150,000 per annum for the Company's non-employee directors. Each director's
total compensation package for the fiscal 2000 year is valued at $130,000,
consisting of $65,000 in cash and, for all directors other than Mr. Kozlowski,
stock options valued at $65,000 (utilizing the Black-Scholes option pricing
model).
Directors may make an irrevocable election each year to receive some or all
of their annual cash compensation in one or more of the following forms:
(i) phantom Tyco common shares under a deferred compensation plan,
(ii) interest in a director's trust that is invested in Tyco common shares, or
(iii) stock options. Under the deferred compensation plan, each account is
credited with an amount equal to the dividends that would have been earned on
the shares if owned. Participants receive payments from their account in cash,
in either a lump sum or up to ten annual installments. The lump sum is payable,
at the prior election of the participant, a minimum of five years after deferral
while a participant remains a member of the Board. For a participant who has
ceased to be a director, the lump sum is payable, or the annual installments
will commence, at the election of the participant, at any time after termination
of service (or upon termination of service if a director is age 70 or older).
Shares held in a director's account under the director's trust are owned by the
director, may be voted by him and may be withdrawn or sold at any time. Any
shares remaining in the account at the time the director terminates his service
on the Board will be distributed to him at that time.
6
<PAGE>
The fiscal 1999 compensation package for directors (other than
Mr. Kozlowski, who received $65,000 in cash for his services as director) was
valued at $100,000. This compensation package consisted of $65,000 in cash and
stock options valued at $35,000 (utilizing the Black-Scholes option pricing
model). In October 1998, each director, other than Mr. Kozlowski, was granted a
stock option to purchase 4,000 Tyco common shares at an exercise price of
$22.43868 per share. Messrs. Berman, Bodman, Foss, Pasman, Slusser and Walsh
elected to receive all or a portion of their cash compensation for fiscal 1999
in stock options, and were granted options to purchase 7,428, 7,428, 7,428,
3,714, 1,200 and 7,428 Tyco common shares, respectively, at an exercise price of
$22.43868 per share.
In October 1999, each director, other than Mr. Kozlowski, was granted a
stock option, with respect to compensation for fiscal 2000, to purchase 4,555
Tyco common shares at an exercise price of $41.19735 per share.
Messrs. Ashcroft, Berman, Bodman, Fort, Foss, Hampton, Pasman, Slusser and Walsh
elected to receive all or a portion of their cash compensation for fiscal 2000
in stock options, and were granted options to purchase 4,555, 4,555, 4,555,
4,555, 4,555, 4,555, 2,278, 1,402 and 4,555 Tyco common shares, respectively, at
an exercise price of $41.19735 per share. Options are granted under the Tyco
International Ltd. Long Term Incentive Plan and have a term of ten years from
date of grant. The options that all non-employee directors receive as part of
their compensation package will vest and become exercisable on September 30,
2000. The options that directors elect to receive in lieu of cash compensation
are immediately vested, but not exercisable until one year from the grant date.
The exercise price per share under all such options is equal to the fair market
value of a Tyco common share at the time of grant. Each such option provides for
an automatic grant of a restoration option to the extent a director uses Tyco
common shares towards payment of his option exercise price.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THE COMPANY
The following table sets forth the beneficial ownership of Tyco common
shares by (i) those persons known by the Company to own beneficially more than
5% of Tyco's outstanding common shares; (ii) each of the executive officers
named under "Executive Compensation" below, other than Mr. Kozlowski; and
(iii) all directors and executive officers of the Company as a group. See
"Directors" on page 3 for the beneficial ownership of common shares by
Mr. Kozlowski and the other directors of the Company.
<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES % OF OUTSTANDING
OWNED COMMON SHARES
BENEFICIAL OWNER BENEFICIALLY(1) OWNED BENEFICIALLY
- ---------------- --------------- ------------------
<S> <C> <C>
FMR Corp.(2)................................................ 103,046,536 6.1%
82 Devonshire Street
Boston, Massachusetts 02109
Equitable Companies, Inc.(3)................................ 98,408,694 5.8%
1345 Avenue of the Americas, 39th Floor
New York, New York 10105
Janus Capital Corp. (4)..................................... 90,380,342 5.3%
100 Fillmore Street, Suite 300
Denver, Colorado 80206
Jerry R. Boggess............................................ 581,203(5) *
Neil R. Garvey.............................................. 351,860(6) *
Richard J. Meelia........................................... 830,567(7) *
Mark H. Swartz.............................................. 3,788,909(8) *
All directors and executive officers as a group (17 24,456,850(9) 1.4%
persons)..................................................
</TABLE>
- ------------------------
* Less than 1%
(1) The amounts and percentages shown are amounts and percentages owned
beneficially as of December 30, 1999 (except for FMR Corp., Equitable
Companies, Inc. and Janus Capital Corp., where the amounts and percentages
are as of September 30, 1999), based on information furnished or publicly
disclosed by the persons named. Such amounts give effect to the two-for-one
stock split distributed on October 21, 1999, effected in the form of a stock
dividend. A person is deemed to be the beneficial owner of shares if such
person, either alone or with others, has the power to vote or to dispose of
such shares. Shares beneficially owned by a person include shares that the
person has the right to acquire under stock options that were exercisable on
December 30, 1999 or that become exercisable within 60 days after
December 30, 1999. There were 1,694,762,623 Tyco common shares outstanding
as of December 30, 1999.
(2) In a Form 13F, with information as of September 30, 1999, FMR Corp., the
parent company of the Fidelity Investments organization, reported that it
had sole dispositive power over the total number of shares owned
beneficially shown above, and sole voting power over 2,710,290 shares.
(3) In a Form 13F, with information as of September 30, 1999, Equitable
Companies, Inc. reported that it had sole dispositive power over 96,434,864
shares, sole voting power over 48,161,852 shares, and shared voting power
over 26,118,740 shares, all of which shares were held for the benefit of its
clients in separate accounts.
(4) In a Form 13F, with information as of September 30, 1999, Janus Capital
Corp. reported that it had shared voting power over 90,380,342 shares.
8
<PAGE>
(5) The amount shown includes 365,547 shares that Mr. Boggess has the right to
acquire through the exercise of stock options. The amount shown excludes
options to purchase 683,333 shares awarded to Mr. Boggess under the Tyco
International Ltd. Long Term Incentive Plan, which will become exercisable
over a period ending on October 18, 2002.
(6) The amount shown includes 242,360 shares that Mr. Garvey has the right to
acquire through the exercise of stock options. The amount shown excludes
options to purchase 650,000 shares awarded to Mr. Garvey under the Tyco
International Ltd. Long Term Incentive Plan, which will become exercisable
over a period ending on October 18, 2002.
(7) The amount shown includes 586,031 shares that Mr. Meelia has the right to
acquire through the exercise of stock options. The amount shown excludes
options to purchase 683,333 shares awarded to Mr. Meelia under the Tyco
International Ltd. Long Term Incentive Plan, which will become exercisable
over a period ending on February 8, 2002.
(8) The amount shown includes 3,193,813 shares that Mr. Swartz has the right to
acquire through the exercise of stock options. The amount shown also
includes 318,188 shares held by a family partnership and 900 shares held in
custody for his children. The amount shown excludes options to purchase
999,999 shares awarded to Mr. Swartz under the Tyco International Ltd. Long
Term Incentive Plan, which will become exercisable over a period ending on
October 28, 2000.
(9) The amount shown includes 11,352,720 shares that these persons have the
right to acquire through the exercise of stock options. The amount excludes
options to purchase 7,043,224 shares awarded to these persons under the Tyco
International Ltd. Long Term Incentive Plan, which will become exercisable
over periods ranging from May 3, 2000 through October 18, 2002.
9
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below presents the annual and long-term compensation for services
in all capacities to the Company and its subsidiaries for the Chief Executive
Officer of the Company and the other four most highly compensated executive
officers of the Company during fiscal 1999 (the "Named Officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION (2) LONG-TERM COMPENSATION
-------------------------------------- ----------------------------------------
SHARES
RESTRICTED UNDERLYING LONG-TERM
NAME & PRINCIPAL CASH STOCK STOCK STOCK INCENTIVE
POSITION YEAR SALARY BONUS(3) BONUS (4) AWARD(S)(5) OPTIONS PAYOUTS
- ---------------- -------- ---------- ------------ ---------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
L. DENNIS KOZLOWSKI.... 1999 $1,350,000 $3,200,000 $25,707,178 6,621,834 6,508,125
CHAIRMAN & CHIEF 1998 1,250,000 2,500,000 20,140,000 3,832,800
EXECUTIVE OFFICER, 1997 1,250,000 2,544,260 6,600,000 $
TYCO INTERNATIONAL
LTD.
JERRY R. BOGGESS....... 1999 500,000 3,381,782 $2,086,401 198,236
PRESIDENT, TYCO FIRE 1998 450,000 2,610,000 1,332,520 100,000
& 1997 375,000 542,093 300,000
SECURITY SERVICES
NEIL R. GARVEY......... 1999 425,000 1,940,000 570,996 178,500
PRESIDENT, TYCO 1998 400,000 1,675,000 787,313
TELECOMMUNICATIONS 1997 256,000 501,500 300,000
RICHARD J. MEELIA...... 1999 567,980 2,619,900 3,246,355 790,564
PRESIDENT, TYCO 1998 500,000 1,064,013 1,163,068 100,000
HEALTHCARE GROUP 1997 500,000 395,153 300,000
MARK H. SWARTZ......... 1999 750,000 1,600,000 12,029,641 2,976,480
EXECUTIVE VICE 1998 559,500 1,250,000 10,070,000 2,764,666
PRESIDENT AND CHIEF 1997 559,500 1,272,130 2,200,000 2,169,375
FINANCIAL OFFICER,
TYCO INTERNATIONAL
LTD.
<CAPTION>
ALL
NAME & PRINCIPAL OTHER
POSITION COMPENSATION (6)
- ---------------- ----------------
<S> <C>
L. DENNIS KOZLOWSKI.... 387,$001 901,002
CHAIRMAN & CHIEF 108,125
EXECUTIVE OFFICER,
TYCO INTERNATIONAL
LTD.
JERRY R. BOGGESS....... 282,713 143,621
PRESIDENT, TYCO FIRE
&
SECURITY SERVICES
NEIL R. GARVEY......... 195,076 84,761
PRESIDENT, TYCO 2,850
TELECOMMUNICATIONS
RICHARD J. MEELIA...... 137,829 149,477
PRESIDENT, TYCO
HEALTHCARE GROUP
MARK H. SWARTZ......... 150,014 256,878
EXECUTIVE VICE 31,994
PRESIDENT AND CHIEF
FINANCIAL OFFICER,
TYCO INTERNATIONAL
LTD.
</TABLE>
SHARES HAVE BEEN RETROACTIVELY RESTATED TO GIVE EFFECT TO THE TWO-FOR-ONE
STOCK SPLIT DISTRIBUTED ON OCTOBER 21, 1999, EFFECTED IN THE FORM OF A STOCK
DIVIDEND.
- ------------------------
(1) The salary information presented for fiscal 1997 for the Named Officers
reflects their annual salaries as of July 2, 1997, the date of the merger of
ADT and Former Tyco, and other compensation and long-term incentives for the
period from July 2, 1997 through the end of fiscal 1997, as they were not
employees of ADT prior to the merger. The salary information for fiscal 1998
reflects annual salaries in effect on October 1, 1997.
In September 1997, the Company changed its fiscal year end from December 31
to September 30. The change in year end resulted in a short fiscal year
covering the nine month transition period from January 1 to September 30,
1997. References to fiscal 1999 and 1998 and fiscal 1997 refer to the twelve
months ended September 30, 1999 and 1998 and the nine month transition
period ended September 30, 1997, respectively.
(2) Under the Tyco Deferred Compensation Plan, the amount of total salary and
bonus that has been deferred for fiscal 1999 is as follows: Mr. Boggess:
$1,691,713; Mr. Garvey: $970,000; Mr. Meelia: $2,085,613; and Mr. Swartz:
$1,975,000. None of the Named Officers had "Other Annual Compensation" in
excess of $50,000.
(3) The bonus amounts shown in the table for Messrs. Kozlowski and Swartz
reflect annual bonus payments that were based on Company performance during
fiscal 1999, as determined using performance objectives established early in
the fiscal year. The bonus amounts shown in the table for Messrs.
10
<PAGE>
Boggess, Garvey and Meelia reflect annual bonus payments that were based
solely on the performance of their respective divisions of the Company
during fiscal 1999, as determined using performance objectives established
early in the fiscal year.
(4) For fiscal 1999, certain bonuses were payable in the form of shares of stock
as follows: Mr. Boggess-50,644 shares, Mr. Garvey-13,860 shares, and
Mr. Meelia-78,800 shares. The amount listed in the table reflects the fair
market value of the shares ($41.19735) on the date shares vested
(October 18, 1999). The recipient may elect to receive some or all of the
value in cash in lieu of actual shares.
(5) The amounts shown are the value of restricted shares awarded to the named
individuals as determined using specific performance criteria (E.G.,
increase in earnings per share that is a minimum of 17.5% over the prior
year) established early in the fiscal year. Shares may also be subject to
time-based vesting criteria. Any shares not vested within three years are
forfeited. When shares vest, the recipient may elect to receive some or all
of the value in cash in lieu of actual shares. Recipients of all restricted
shares have the right to vote such shares and receive dividends. For fiscal
1999, the amount shown is based upon the market value of Tyco common shares
on the date of the grant ($41.19735 on October 18, 1999). The shares vested
on January 5, 2000.
(6) The amounts shown in the table reflect Company contributions made on behalf
of the named individuals under the Company's qualified and non-qualified
defined contribution plans, as follows:
<TABLE>
<CAPTION>
COMPANY
COMPANY MATCHING CONTRIBUTION CONTRIBUTION
NAME (QUALIFIED PLAN) (NON-QUALIFIED PLAN)
- ---- ----------------------------- --------------------
<S> <C> <C>
Mr. Kozlowski............. $ 5,366 $234,675
Mr. Boggess............... 12,800 226,800
Mr. Garvey................ 10,137 173,266
Mr. Meelia................ 7,479 92,617
Mr. Swartz................ 8,073 78,875
</TABLE>
Deferred compensation plan interest was credited to the individual's
accounts as of December 31, 1998. The amount shown in the table for
Mr. Kozlowski also includes interest credited on deferred compensation in
excess of 120% of the applicable federal long-term rate of $81,960 and
director's fees of $65,000. The amount shown in the table for Mr. Boggess
also includes interest credited on deferred compensation in excess of 120%
of the applicable federal long-term rate of $27,641 and a miscellaneous
bonus in the amount of $10,000. The amounts shown in the table for
Messrs. Garvey, Meelia and Swartz also include interest credited on deferred
compensation in excess of 120% of the applicable federal long-term rate of
$11,673, $35,978, and $63,066, respectively.
11
<PAGE>
OPTION GRANTS IN FISCAL 1999
The following table shows all grants of stock options to the Named Officers
during fiscal 1999 under the Tyco International Ltd. Long Term Incentive Plan
("LTIP"). Shares have been retroactively restated to give effect to the
two-for-one stock split distributed on October 21, 1999, effected in the form of
a stock dividend.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE GRANT DATE
UNDERLYING OPTIONS TO EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR (6) ($/SHARE) DATE VALUE (7)
- ---- ------------------ ---------------- -------------- ----------------------- -----------
<S> <C> <C> <C> <C> <C>
L. Dennis Kozlowski.............. 141,600(1) 0.47% $ 27.45330 (8) (8)
584,000(1) 1.93 29.23095 (8) (8)
120,400(1) 0.40 39.00000 (8) (8)
40,000(2)(3) 0.13 44.62500 6/10/09 $ 423,800
2,305,114(3) 7.60 50.99245 7/17/07--10/22/08 27,626,791
3,430,720(3) 11.32 49.99995 7/17/07 40,431,035
Jerry R. Boggess................. 150,000(4) 0.49 25.90210 10/1/08 729,000
48,236(1) 0.16 29.23095 10/22/08 293,034
Neil R. Garvey................... 150,000(4) 0.49 25.90210 10/1/08 729,000
28,500(1) 0.09 29.23095 10/22/08 173,138
Richard J. Meelia................ 150,000(4) 0.49 25.90210 10/1/08 729,000
40,564(1) 0.13 29.23095 10/22/08 246,426
600,000(5) 1.98 36.83415 2/7/09 4,503,000
Mark H. Swartz................... 312,000(1) 1.03 29.23095 (8) (8)
482,160(3) 1.59 50.99245 7/17/07 5,778,688
2,182,320(3) 7.20 49.99995 7/17/07--10/22/08 25,718,641
</TABLE>
Certain options granted to the Named Officers include a restoration feature
whereby participants receive options to replace exercised options, if the shares
or share proceeds (1) are used to pay the exercise price of stock options,
(2) are applied to satisfy tax withholding obligations or repay indebtedness to
the Company or (3) are sold by trusts for tax planning purposes. In certain
cases, restoration options are granted to an executive who has returned vested
restricted stock to the Company, enabling the executive to maintain the level of
his equity interest in the Company. Since restoration options are granted at an
exercise price which is equal to the market price of the Company's common shares
on the day of grant, they are issued at an exercise price which is higher than
the exercise price of the original grant or which equals the value of the shares
turned in to the Company.
(1) Restored options having the following terms: granted at fair market value;
immediately vested, but not exercisable for two months; term equal to ten
years.
(2) Options transferred to and currently held by the KFT Family Partnership L.P.
(3) Restored options having the following terms: granted at fair market value;
immediately vested, but not exercisable for two months; term equal to the
remaining term of the options they replaced.
(4) Options granted at fair market value on the date of the grant, vesting 100%
at the end of 3 years, and expiring ten years from the date of grant.
(5) Options granted at fair market value on the date of the grant, vesting
one-third each year over a period of three years, and expiring ten years
from the date of grant.
(6) Represent the percentage of all options granted in fiscal 1999 under the
LTIP and the Tyco International Ltd. Long Term Incentive Plan II.
(7) All options are granted at an exercise price equal to the market value of
the Company's common shares on the date of grant. Therefore, if there is no
appreciation in that market value, no value will be realizable. As permitted
by the rules of the United States Securities and Exchange Commission, the
12
<PAGE>
Company chose the Black-Scholes option pricing model to estimate the grant
date present value of the options set forth in this table. The following
assumptions were used: expected life of three years; interest rates of
4.18%-5.9%, which represent the yield of a zero coupon Treasury strip with a
maturity date similar to the assumed exercise period; assumed annual
volatility of underlying stock of 22.88%-24.06%, calculated based on
36 months of historical Tyco share price movement; quarterly dividend
payment of $0.0125 per share; and the vesting of all options.
(8) Options transferred to a family partnership, which then exercised the
options during fiscal 1999. The grant date present value for these options
was $799,332, $3,547,800, and $1,033,032, respectively, for Mr. Kozlowski
and $1,895,400 for Mr. Swartz.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
Shown below is information with respect to aggregate option exercises by the
Named Officers in the fiscal year ended September 30, 1999 and with respect to
unexercised stock options held by them at September 30, 1999.
Shares and options have been retroactively restated to give effect to the
two-for-one stock split distributed on October 21, 1999, effected in the form of
a stock dividend.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED,
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR END HELD AT FISCAL YEAR END (1)
ACQUIRED VALUE --------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ------------- ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
L. Dennis Kozlowski.... 6,312,400(2) $139,739,099 5,735,834 2,000,000 $2,823,139 $63,333,200
40,000(3) 247,914
Jerry R. Boggess....... -- 281,576 316,666 8,412,693 8,980,442
Neil R. Garvey......... -- 228,500 250,000 6,948,689 6,904,773
Richard J. Meelia...... -- 273,898 916,666 8,247,040 17,373,662
Mark H. Swartz......... 2,752,668(4) 62,802,959 2,664,480 1,333,332 1,795,831 41,867,925
</TABLE>
- ------------------------
(1) Based on the market value of Tyco common shares on September 30, 1999 of
$50.82285.
(2) Shares issued on exercise of options transferred by Mr. Kozlowski to the KFT
Family Partnership L.P.
(3) Options held by the KFT Family Partnership L.P.
(4) Shares issued on exercise of options transferred by Mr. Swartz to the KMS
Family Partnership L.P.
CERTAIN DEFINED BENEFIT PLANS
Except for Messrs. Kozlowski and Swartz, the Company and its subsidiaries do
not maintain any defined benefit or actuarial retirement plans ("pension plans")
in which the Named Officers participate. Messrs. Kozlowski and Swartz
participate in individual Executive Retirement Arrangements maintained by the
Company (the "ERA"). Under the ERA, Mr. Kozlowski has a fixed lifetime benefit
commencing at his normal retirement age of 65 that has a present value of
$291,309 monthly. Mr. Swartz's fixed lifetime benefit at his normal retirement
age of 65 has a present value of $133,796 monthly. Retirement benefits are
available at earlier ages and alternative forms of benefits can be elected. Any
such variations would be actuarially equivalent to the fixed lifetime benefit
starting at age 65.
EMPLOYMENT CONTRACTS, TERMINATION AGREEMENTS, CHANGE OF CONTROL ARRANGEMENTS
None of the Named Officers has an employment contract, termination
agreement, or change of control arrangement.
13
<PAGE>
RELATED PARTY TRANSACTIONS
Former Tyco established the 1983 Key Employee Corporate Loan Program, as
amended, to encourage ownership of Tyco common shares by key employees. Loans
are primarily used for the payment of taxes due as a result of the vesting of
restricted stock.
The Compensation Committee administers the loan program. The Compensation
Commitee authorizes loans, which may not exceed the amount allowable under any
regulation of the United States Treasury or other applicable statute or
regulation. Loans may be required to be secured by Tyco common shares owned by
the employee or may be unsecured. Loans generally bear interest at Tyco's
incremental short-term borrowing rate (5.5% for 1999). Loans are generally
repayable in ten years or when the participant reaches age 69, whichever occurs
first, except that earlier payments must be made in the event that the
participant's employment with the Company or its subsidiaries terminates. The
participant is also required to make loan payments upon the sale or other
disposition of Tyco common shares (other than gifts to certain family members)
with respect to which loans have been granted.
At September 30, 1999, the amount of loans outstanding under the loan
program totaled $18,569,137, of which $0 was loaned to Mr. Kozlowski, $1,660,047
to Mr. Boggess, $304,363 to Mr. Garvey, $0 to Mr. Meelia, and $0 to Mr. Swartz.
The largest amount of indebtedness since October 1, 1998 incurred by each of the
Named Officers was: $52,688,249 for Mr. Kozlowski, $2,524,004 for Mr. Boggess,
$1,153,645 for Mr. Garvey, $607,291 for Mr. Meelia, and $17,435,319 for
Mr. Swartz.
14
