10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 27, 2009
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

001-13836
(Commission File Number)

TYCO INTERNATIONAL LTD.
(Exact name of Registrant as specified in its charter)

Switzerland (Jurisdiction of Incorporation)	98-0390500 (I.R.S. Employer Identification Number)
Freir Platz 10 Schaffhausen, CH-8200 Switzerland (Address of Registrant's principal executive offices)
41-52-633-02-44 (Registrant's telephone number)

        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 ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o    No ý

        The number of common shares outstanding as of April 24, 2009 was 473,375,345.

TYCO INTERNATIONAL LTD.
INDEX TO FORM 10-Q

		Page
Part I.	Financial Information
Item 1.	Financial Statements	1
	Consolidated Statements of Operations (Unaudited) for the quarters and six months ended March 27, 2009 and March 28, 2008	1
	Consolidated Balance Sheets (Unaudited) as of March 27, 2009 and September 26, 2008	2
	Consolidated Statements of Cash Flows (Unaudited) for the six months ended March 27, 2009 and March 28, 2008	3
	Consolidated Statements of Shareholders' Equity (Unaudited) for the six months ended March 27, 2009 and March 28, 2008	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	51
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	79
Item 4.	Controls and Procedures	79
Part II.	Other Information
Item 1.	Legal Proceedings	81
Item 1A.	Risk Factors	87
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	89
Item 3.	Defaults Upon Senior Securities	90
Item 4.	Submission of Matters to a Vote of Security Holders	90
Item 5.	Other Information	91
Item 6.	Exhibits	92
Signatures		93

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except per share data)

		For the Quarters Ended						For the Six Months Ended
		March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Revenue from product sales		$	2,518		$	3,108		$	5,286		$	6,204
Service revenue			1,632			1,755			3,290			3,496
	Net revenue		4,150			4,863			8,576			9,700
Cost of product sales			1,861			2,195			3,840			4,386
Cost of services			854			990			1,744			1,956
Selling, general and administrative expenses			1,200			1,204			2,340			2,371
Separation (credits) costs			—			(5	)		—			4
Goodwill and intangible asset impairments (see Note 7)			2,705			—			2,705			—
Restructuring, asset impairment and divestiture charges, net (see Notes 2 and 3)			84			37			88			48
	Operating (loss) income		(2,554	)		442			(2,141	)		935
Interest income			11			25			23			83
Interest expense			(78	)		(115	)		(151	)		(232	)
Other income, net			7			—			11			52
	(Loss) income from continuing operations before income taxes and minority interest		(2,614	)		352			(2,258	)		838
Income tax benefit (expense)			60			(79	)		(24	)		(204	)
Minority interest			(1	)		(1	)		(1	)		(2	)
	(Loss) income from continuing operations		(2,555	)		272			(2,283	)		632
(Loss) income from discontinued operations, net of income taxes			(12	)		8			(7	)		11
	Net (loss) income	$	(2,567	)	$	280		$	(2,290	)	$	643
Basic earnings per share:
	(Loss) income from continuing operations	$	(5.40	)	$	0.56		$	(4.83	)	$	1.29
	(Loss) income from discontinued operations		(0.02	)		0.02			(0.01	)		0.02
	Net (loss) income	$	(5.42	)	$	0.58		$	(4.84	)	$	1.31
Diluted earnings per share:
	(Loss) income from continuing operations	$	(5.40	)	$	0.56		$	(4.83	)	$	1.28
	(Loss) income from discontinued operations		(0.02	)		0.01			(0.01	)		0.03
	Net (loss) income	$	(5.42	)	$	0.57		$	(4.84	)	$	1.31
Weighted-average number of shares outstanding:
	Basic		473			486			473			489
	Diluted		473			489			473			493

See Notes to Consolidated Financial Statements.

1

TYCO INTERNATIONAL LTD.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data)

			March 27, 2009			September 26, 2008
Assets
Current Assets:
	Cash and cash equivalents		$	1,419		$	1,519
	Accounts receivable, less allowance for doubtful accounts of $175 and $188, respectively			2,608			3,024
	Inventories			1,712			1,879
	Prepaid expenses and other current assets			1,911			1,805
	Assets held for sale			36			126
		Total current assets		7,686			8,353
Property, plant and equipment, net				3,346			3,519
Goodwill				8,410			11,619
Intangible assets, net				2,531			2,693
Other assets				2,804			2,620
		Total Assets	$	24,777		$	28,804
Liabilities and Shareholders' Equity
Current Liabilities:
	Loans payable and current maturities of long-term debt		$	19		$	555
	Accounts payable			1,166			1,632
	Accrued and other current liabilities			3,124			2,766
	Deferred revenue			618			608
	Liabilities held for sale			6			82
		Total current liabilities		4,933			5,643
Long-term debt				4,223			3,709
Other liabilities				3,727			3,944
		Total Liabilities		12,883			13,296
Commitments and Contingencies (see Note 10)
Minority interest				11			14
Shareholders' Equity (see Note 12):
	Preference shares, Nil at March 27, 2009 and $4 par value, 31,250,000 shares authorized, none outstanding at September 26, 2008			—			—
	Common shares, CHF 7.60 par value, 814,801,671 shares authorized; 479,346,720 shares issued at March 27, 2009; $0.80 par value, 1,000,000,000 shares authorized; 477,667,844 shares issued, net of 21,952,786 shares owned by subsidiaries at September 26, 2008			3,122			382
	Common shares held in treasury, 5,972,088 and 4,882,081 shares, at March 27, 2009 and September 26, 2008, respectively			(246	)		(192	)
	Capital in excess:
		Share premium		—			9,236
		Contributed surplus		10,918			4,711
	Accumulated (deficit) earnings			(1,265	)		1,125
	Accumulated other comprehensive (loss) income			(646	)		232
		Total Shareholders' Equity		11,883			15,494
		Total Liabilities and Shareholders' Equity	$	24,777		$	28,804

See Notes to Consolidated Financial Statements.

2

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

				For the Six Months Ended
				March 27, 2009			March 28, 2008
Cash Flows From Operating Activities:
Net (loss) income				$	(2,290	)	$	643
	Loss (income) from discontinued operations, net of income taxes				7			(11	)
(Loss) income from continuing operations					(2,283	)		632
Adjustments to reconcile net cash provided by (used in) operating activities:
	Goodwill and intangible asset impairments				2,705			—
	Depreciation and amortization				559			566
	Non-cash compensation expense				52			57
	Deferred income taxes				(182	)		(105	)
	Provision for losses on accounts receivable and inventory				69			61
	Other non-cash items				36			43
	Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
		Accounts receivable, net			162			(108	)
		Inventories			21			(149	)
		Prepaid expenses and other current assets			(287	)		(24	)
		Accounts payable			(376	)		(206	)
		Accrued and other current liabilities			190			(324	)
		Class action settlement liability			—			(3,020	)
		Income taxes, net			22			24
		Other			94			(67	)
			Net cash provided by (used in) operating activities		782			(2,620	)
			Net cash (used in) provided by discontinued operating activities		(13	)		4
Cash Flows From Investing Activities:
Capital expenditures					(331	)		(355	)
Proceeds from disposal of assets					4			10
Acquisition of businesses, net of cash acquired					(47	)		(27	)
Accounts purchased from ADT dealer program					(231	)		(187	)
Class action settlement escrow					—			2,960
Other					2			(10	)
			Net cash (used in) provided by investing activities		(603	)		2,391
			Net cash provided by discontinued investing activities		32			13
Cash Flows From Financing Activities:
Repayment of short-term debt					(551	)		(371	)
Proceeds from issuance of long-term debt					2,165			667
Repayment of long-term debt, including debt tenders					(1,634	)		(256	)
Proceeds from exercise of share options					1			21
Dividends paid					(189	)		(148	)
Repurchase of common shares by subsidiary					(3	)		(477	)
Transfer from discontinued operations					19			19
Other					(5	)		(70	)
			Net cash used in financing activities		(197	)		(615	)
			Net cash used in discontinued financing activities		(19	)		(17	)
Effect of currency translation on cash					(82	)		24
Net decrease in cash and cash equivalents					(100	)		(820	)
Cash and cash equivalents at beginning of period					1,519			1,894
Cash and cash equivalents at end of period				$	1,419		$	1,074

See Notes to Consolidated Financial Statements.

3

TYCO INTERNATIONAL LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

For the Six Months Ended March 27, 2009 and March 28, 2008

(in millions)

		Number of Common Shares			Common Shares $0.80 Par Value			Treasury Shares		Share Premium		Contributed Surplus			Accumulated Earnings			Accumulated Other Comprehensive Income		Total
Balance at September 28, 2007			496		$	397		$	—	$	9,189	$	5,439		$	34		$	565	$	15,624
Comprehensive income:
	Net income															643					643
	Currency translation																		339		339
	Unrealized gain on marketable securities and derivative instruments net of income taxes of $2 million																		4		4
	Change in unrecognized loss and prior service cost (credit), net of income taxes of $3 million																		7		7
	Total comprehensive income																				993
Dividends declared																(147	)				(147	)
Share options exercised, including tax benefit of $3 million			1			1					20		3								24
Repurchase of common shares by subsidiary			(12	)		(10	)						(467	)							(477	)
Compensation expense													53								53
Exchange of convertible debt													1								1
Adoption of FIN No. 48 (see Note 5)																(79	)				(79	)
Other																(18	)				(18	)
Balance at March 28, 2008			485		$	388		$	—	$	9,209	$	5,029		$	433		$	915	$	15,974

			Number of Common Shares		Common Shares at Par Value (see Note 12)			Common Shares $0.80 Par Value			Treasury Shares			Share Premium			Contributed Surplus			Accumulated Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss)			Total
Balance at September 26, 2008				473	$	—		$	382		$	(192	)	$	9,236		$	4,711		$	1,125		$	232		$	15,494
Comprehensive income:
	Net loss																				(2,290	)					(2,290	)
	Currency translation																							(951	)		(951	)
	Unrealized gain on marketable securities and derivative instruments net of income taxes of $2 million																							5			5
	Change in unrecognized loss and prior service cost (credit), net of income taxes of $4 million																							7			7
	Total comprehensive income																										(3,229	)
Change of Domicile (see Note 12)
		Reclassification of shares owned by subsidiaries and cancellation of common shares held in treasury				1						(54	)					53									—
		Reverse share split and issuance of fully paid up shares				3,498			(382	)					(3,116	)											—
		Reallocation of share premium to contributed surplus													(6,120	)		6,120									—
Dividends declared (see Note 12)						(377	)														(95	)					(472	)
Vesting of share based equity awards tax effect																		(10	)								(10	)
Repurchase of common shares by subsidiary																		(3	)								(3	)
Compensation expense																		53									53
Adoption of SFAS No. 158, net of income tax benefit of $2 million and income taxes $28 million, respectively, (see Note 11)																					(5	)		61			56
Other																		(6	)								(6	)
Balance at March 27, 2009				473	$	3,122		$	—		$	(246	)	$	—		$	10,918		$	(1,265	)	$	(646	)	$	11,883

See Notes to Consolidated Financial Statements.

4

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Basis of Presentation and Summary of Significant Accounting Policies

        Basis of Presentation    The unaudited Consolidated Financial Statements include the consolidated results of Tyco International Ltd., a corporation organized under the laws of Switzerland, and its subsidiaries (Tyco and all its subsidiaries, hereinafter collectively referred to as the "Company" or "Tyco"). Effective March 17, 2009, the Company discontinued its existence as a Bermuda corporation as provided in Section 132G of The Companies Act 1981 of Bermuda and, in accordance with article 161 of the Swiss Federal Code on International Private Law, continued its existence as a Swiss corporation under articles 620 et seq. of the Swiss Federal Code on Obligations (the "Change of Domicile"). The rights of holders of the Company's common shares are now governed by Swiss law, the Company's Swiss articles of association and its Swiss organizational regulations. The articles of association and organizational regulations were included as exhibits to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on March 17, 2009. The financial statements have been prepared in United States dollars ("USD") and in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended. The year end condensed balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 26, 2008 (the "2008 Form 10-K").

        The Consolidated Financial Statements included herein are unaudited, but in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary to summarize fairly the Company's financial position, results of operations and cash flows for the interim period. The results reported in these Consolidated Financial Statements should not be taken as indicative of results that may be expected for the entire year.

        References to 2009 and 2008 are to Tyco's fiscal quarters ending March 27, 2009 and March 28, 2008, respectively, unless otherwise indicated.

        Reclassifications    Certain prior period amounts have been reclassified to conform with the current period presentation. The Company has reclassified certain businesses to discontinued operations (See Note 2). The Company also reclassified a business previously classified as held for sale as the business no longer met the held for sale criteria at March 27, 2009 (See Note 2). Additionally, the Company has realigned certain business operations as of September 27, 2008 resulting in certain prior period amounts being recast within Note 13.

        Recently Adopted Accounting Pronouncements.    In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 161, "Disclosures about Derivative Instruments and Hedging Activities." SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's results of operations. The Company adopted the disclosure provisions of SFAS No. 161 as of December 27, 2008. See Note 9 for additional information related to the adoption of SFAS No. 161.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which enhances existing guidance for measuring assets and liabilities at fair value. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. In February 2008, the FASB issued Staff Position No. 157-2, "Effective Date of FASB Statement No 157" which permits companies to partially defer the effective date of SFAS No. 157 for

5

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1.    Basis of Presentation and Summary of Significant Accounting Policies (Continued)

one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. During the first quarter of 2009 the Company elected to defer the adoption of SFAS No. 157 for one year for non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. SFAS No. 157 became effective for Tyco in the first quarter of 2009 for financial assets and liabilities only. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows. See Note 9 for additional information related to the adoption of SFAS No. 157. The Company is currently assessing the impact, if any, that the adoption of SFAS No. 157 for non-financial assets and liabilities will have on the results of its operations, financial position or cash flows.

        In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R)." SFAS No. 158 requires that employers recognize the funded status of defined benefit pension and other postretirement benefit plans as a net asset or liability on the balance sheet and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as a component of net periodic benefit cost. The Company adopted the recognition and disclosure provisions of SFAS No. 158 as of September 28, 2007.

        SFAS No. 158 also requires companies to measure plan assets and benefit obligations as of their fiscal year end. The Company adopted the measurement date provisions of SFAS No. 158 on September 27, 2008. As a result, Tyco measured its plan assets and benefit obligations on September 26, 2008 and adjusted its opening balances of accumulated earnings and accumulated other comprehensive income for the change in net periodic benefit cost and fair value, respectively, from the previously used measurement date of August 31, 2008. The adoption of the measurement date provisions resulted in a net decrease to accumulated earnings of $5 million, net of an income tax benefit of $2 million, and a net increase to accumulated other comprehensive income of $61 million, net of income taxes of $28 million. See Note 11 for additional information related to the adoption of SFAS No. 158.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities." SFAS No. 159 permits an entity, on a contract-by-contract basis, to make an irrevocable election to account for certain types of financial instruments and warranty and insurance contracts at fair value, rather than historical cost, with changes in the fair value, whether realized or unrealized, recognized in earnings. SFAS No. 159 became effective for Tyco in the first quarter of 2009. On September 27, 2008, the Company did not elect the fair value option under SFAS 159 for eligible items.

        In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" (SFAS No. 162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. The Company adopted the provisions of SFAS No. 162 as of November 15, 2008. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows.

        Recently Issued Accounting Pronouncements.    In June 2008 the FASB ratified FASB Staff Position ("FSP") No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities" (FSP No. EITF 03-6-1), which addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, must

6

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

1.    Basis of Presentation and Summary of Significant Accounting Policies (Continued)

be included in the earnings allocation in calculating earnings per share under the two-class method described in SFAS No. 128, "Earnings per Share" (SFAS No. 128). FSP No. EITF 03-6-1 requires that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend-equivalents be treated as participating securities in calculating earnings per share. FSP No. EITF 03-6-1 is effective for Tyco starting with the first interim period of fiscal 2010, and shall be applied retrospectively to all prior periods. The Company is currently evaluating the effects, if any, that FSP No. EITF 03-6-1 may have on earnings per share.

        In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life of Intangible Assets". FSP No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets". FSP No. 142-3 is effective for Tyco in the first quarter of 2010. The Company is currently assessing what impact, if any, that FSP No. 142-3 will have on its financial position, results of operations or cash flows.

        In December 2007, the FASB issued SFAS 141 (Revised 2007), "Business Combinations." SFAS No. 141(R) retains the underlying concepts of SFAS No. 141 in that business combinations are still accounted for at fair value. However, the accounting for certain other aspects of business combinations will be affected. Acquisition costs will generally be expensed as incurred. Restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date. In-process research and development will be recorded at fair value as an indefinite-lived intangible at the acquisition date until it is completed or abandoned and its useful life can be determined. Changes in deferred tax asset valuation allowances and uncertain tax positions after the acquisition date will generally impact income tax expense. SFAS No. 141(R) also expands required disclosures surrounding the nature and financial effects of business combinations. SFAS No. 141(R) is effective, on a prospective basis, for Tyco in the first quarter of fiscal 2010.

        In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51". SFAS No. 160 requires the recognition of a noncontrolling interest (minority interest prior to the adoption of SFAS 160) as equity in the Consolidated Financial Statements. The amount of net income attributable to the noncontrolling interest should be included in consolidated net income on the face of the statement of income. SFAS No. 160 also amends certain of Accounting Research Bulletin No. 51's consolidation procedures in order to achieve consistency with the requirements of SFAS No. 141R. The statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. This statement is effective for Tyco in the first quarter of fiscal 2010. The Company is currently assessing what impact, if any, that SFAS No. 160 will have on its financial position, results of operations or cash flows.

        In December 2008, the FASB issued FSP FAS 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets". The FSP requires additional disclosures about plan assets related to an employer's defined benefit pension or other post-retirement plans to enable investors to better understand how investment decisions are made, the major categories of plan assets, the inputs and valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period, and the significant concentrations of risk within plan assets. The disclosure provisions of FSP FAS 132(R)-1 are effective for Tyco in the first quarter of fiscal 2010.

7

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2.    Divestitures

        During the quarter, the Company continued to assess the strategic fit of its various businesses and has pursued divestiture of certain businesses which do not align with its long-term strategy.

Held for Sale and Reflected as Continuing Operations

        During the third quarter of 2008, the Company approved a plan to sell a business in its Safety Products segment. This business had been classified as held for sale in the Company's historical Consolidated Balance Sheet in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". During the second quarter of 2009, due to a change in strategy by management, the Company decided not to sell the business. As a result, the business no longer satisfied the requirements to be classified as held for sale in the Company's Consolidated Balance Sheet at March 27, 2009. Accordingly, the Consolidated Balance Sheet at September 26, 2008 was recast to reclassify the business from held for sale to held and used. The Company measured the business at the lower of its (i) carrying amount before it was classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the business been continuously classified as held and used, or (ii) fair value at the date the decision not to sell was made. The Company recorded a charge of $8 million in the second quarter of 2009 relating to the amount of depreciation and amortization expense that would have been recorded had the asset been continuously classified as held and used.

Discontinued Operations

        As previously reported in Tyco's periodic filings, in July 2008, the Company substantially completed the sale of its Infrastructure Services business, which met the criteria to be presented as discontinued operations. In order to complete the sale of Earth Tech Brasil Ltda. ("ET Brasil") and Earth Tech UK businesses and certain assets in China, the Company is required to obtain consents and approvals to transfer the legal ownership of the businesses and assets. On January 22, 2009 the Company received the necessary consents and approvals to transfer the legal ownership of its ET Brasil business to Corioca Christiani-Nielsen Engenharia S.A. and received cash proceeds of approximately $13 million. On February 27, 2009 the Company received the necessary consents to transfer certain of the China assets and received cash proceeds of $18 million. At March 27, 2009, the necessary consents and approvals for Earth Tech UK and the remaining assets in China had not been obtained by the Company. The Company expects to obtain the necessary consents and approvals during fiscal year 2009. At March 27, 2009, the Company has assessed and determined that the carrying value of the remaining assets are recoverable based on current fair value, less cost to sell. The Company will continue to assess recoverability until the remaining assets are sold.

        During February 2008, the Company executed a definitive agreement to sell Ancon Building Products ("Ancon"), a manufacturer of stainless steel products used in masonry construction. Ancon was part of the Company's Corporate and Other segment. The sale was completed in April 2008 for $164 million in net cash proceeds and a pre-tax gain of $100 million was recorded, which was largely exempt from tax. During the fourth quarter of 2008, the Company received an additional $6 million of proceeds related to the sale of Ancon. The gain was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

        During February 2008, the Company sold Nippon Dry-Chemical Co., Ltd. ("NDC"), one of the leading companies in the Japanese fire protection industry. NDC was part of the Company's Fire Protection and Safety Products segments. The sale was completed for $50 million in net cash proceeds

8

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2.    Divestitures (Continued)

and a pre-tax gain of $7 million was recorded. The gain was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

        In January 2008, the Company sold a European manufacturer of public address products and acoustic systems, which was part of the Company's Fire Protection Services, segment and recorded an $8 million pre-tax loss on sale. The loss was recorded in income from discontinued operations, net of income taxes in the Company's consolidated Statement of Operations.

        During fiscal year 2007, Tyco completed the spin-offs of its Healthcare and Electronics businesses (the "Separation"). The Company has used available information to develop its best estimates for certain assets and liabilities related to the Separation. In limited instances, final determination of the balances will be made in subsequent periods. During the three months and six months ended March 28, 2008, $3 million and $18 million, respectively, was recorded as a reduction to shareholders' equity, primarily related to adjustments to certain pre-Separation tax liabilities. During the quarter and six months ended March 27, 2009, $0 million and $4 million, respectively, of other items was recorded as an increase to shareholders' equity. Adjustments in the future for the impact of filing final income tax returns in certain jurisdictions where those returns include a combination of Tyco, Covidien and/or Tyco Electronics legal entities and for certain amended income tax returns for the periods prior to the Separation may be recorded to either shareholders' equity or the statement of income depending on the specific item giving rise to the adjustment.

        Net revenue, income from operations, loss on sale and income tax expense for discontinued operations are as follows ($ in millions):

	For the Quarters Ended						For the Six Months Ended
	March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Net revenue	$	1		$	418		$	8		$	843
Pre-tax income from discontinued operations	$	1		$	42		$	4		$	77
Pre-tax loss on sale of discontinued operations		(8	)		(20	)		(5	)		(30	)
Economic hedge of Empresa de Transmissao do Oeste Ltda. sale price		—			(5	)		—			(15	)
Income tax expense		(5	)		(9	)		(6	)		(21	)
(Loss) income from discontinued operations, net of income taxes	$	(12	)	$	8		$	(7	)	$	11

        Balance sheet information for pending divestitures is as follows ($ in millions):

		March 27, 2009		September 26, 2008
Accounts receivable, net		$	—	$	14
Inventories			—		10
Property, plant and equipment, net			1		1
Other assets			35		101
	Total assets	$	36	$	126

9

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

2.    Divestitures (Continued)

		March 27, 2009		September 26, 2008
Loans payable and current maturities of long-term debt		$	4	$	4
Accounts payable			—		6
Accrued and other current liabilities			1		46
Other liabilities			1		26
	Total liabilities	$	6	$	82

Gains (Losses) on divestitures

        During the quarter and six months ended March 27, 2009, the Company recorded $1 million gain and $1 million loss, respectively, in restructuring, asset impairment and divestiture charges, net in the Company's Consolidated Statements of Income in connection with the divestiture and write-down to fair value of certain businesses that did not meet the criteria for discontinued operations. There were no divestiture charges classified in continuing operations during the quarter and six months ended March 28, 2008.

3.    Restructuring and Asset Impairment Charges, Net

        During the first quarter of 2007, the Company launched a restructuring program (the "2007 Program") across all of the Company's segments, including the corporate organization, to streamline some of the businesses and reduce the operational footprint. Upon initiation of the 2007 Program, the Company expected to incur aggregate charges related to the program of approximately $350 million to $400 million primarily through the end of calendar 2008. As of December 26, 2008, the Company had substantially completed this program.

        During the first quarter of 2009, the Company identified additional opportunities for cost savings through restructuring activities and workforce reductions that are expected to occur in fiscal 2009 and 2010. The Company expects to incur restructuring and restructuring related charges of approximately $200 million in fiscal 2009.

        Restructuring and asset impairment charges, net are as follows ($ in millions):

	For the Quarters Ended				For the Six Months Ended
	March 27, 2009		March 28, 2008		March 27, 2009		March 28, 2008
ADT Worldwide	$	42	$	9	$	43	$	15
Flow Control		5		—		6		2
Fire Protection Services		11		2		11		3
Electrical and Metal Products		6		3		8		7
Safety Products		33		26		34		26
Corporate and Other		6		2		6		2
	$	103	$	42	$	108	$	55

10

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3.    Restructuring and Asset Impairment Charges, Net (Continued)

        During the quarters ended March 27, 2009 and March 28, 2008, restructuring and asset impairment charges, net were included in the Company's Consolidated Statements of Income as follows ($ in millions):

	For the Quarters Ended				For the Six Months Ended
	March 27, 2009		March 28, 2008		March 27, 2009		March 28, 2008
Cost of sales	$	16	$	3	$	18	$	6
Selling, general and administrative		2		2		4		2
Restructuring, asset impairment and divestiture charges, net		85		37		86		47
	$	103	$	42	$	108	$	55

2009 Net Restructuring

        Net restructuring and asset impairment charges during the quarter ended March 27, 2009 were $103 million, which include $18 million for the non-cash write down in carrying value of inventory and accelerated depreciation of assets directly related to the underlying restructuring actions and $6 million of asset impairments. The remaining charge of $79 million consists of $70 million of employee severance and benefits and $12 million of facility exit and other charges, offset by $3 million of restructuring reversals resulting from the Company completing restructuring activities announced in prior years for amounts less than originally estimated.

        Net restructuring and asset impairment charges during the six months ended March 27, 2009 were $108 million, which include $22 million for the non-cash write down in carrying value of inventory and accelerated depreciation of assets directly related to underlying restructuring actions and $6 million of asset impairments. The remaining charge of $80 million consists of $72 million of employee severance and benefits and $15 million of facility exit, offset by $7 million of restructuring reversals resulting from the Company completing restructuring activities announced in prior years for amounts less than originally estimated.

2008 Net Restructuring

        Net restructuring and asset impairment charges during the quarter ended March 28, 2008 were $42 million, which include $5 million for the non-cash write down in carrying value of inventory and accelerated depreciation of assets expected to become obsolete as a result of the restructuring. The remaining charge of $37 million consist of $35 million of employee severance and benefits and $6 million of facility exit charges and other cash charges, offset by $4 million of restructuring reversals resulting from the Company completing restructuring activities announced in prior years for amounts less than originally estimated.

        Net restructuring and asset impairment charges during the six months ended March 28, 2008 were $55 million, which include $8 million for the non-cash write down in carrying value of inventory and accelerated depreciation of assets expected to become obsolete as a result of the restructuring. The remaining charge of $47 million consists of $41 million of employee severance and benefits and $15 million of facility exit charges and other cash charges, offset by $9 million of restructuring reversals

11

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

3.    Restructuring and Asset Impairment Charges, Net (Continued)

resulting from the Company completing restructuring activities announced in prior years for amounts less than originally estimated.

Restructuring Reserves

        Restructuring reserves from September 26, 2008 to March 27, 2009 by the year in which the restructuring action was initiated are as follows ($ in millions):

	Year of Restructuring Action
				2007 Program
	2009			2008			2007			Subtotal			Prior			Total
Balance at September 26, 2008	$	—		$	98		$	55		$	153		$	16		$	169
Charges		75			8			3			11			1			87
Reversals		—			(6	)		(1	)		(7	)		—			(7	)
Utilization		(12	)		(27	)		(17	)		(44	)		(1	)		(57	)
Reclass/transfers		(1	)		(4	)		2			(2	)		—			(3	)
Currency translation		4			(5	)		(6	)		(11	)		(1	)		(8	)
Balance at March 27, 2009	$	66		$	64		$	36		$	100		$	15		$	181

        Restructuring reserves by segment are as follows ($ in millions):

	March 27, 2009		September 26, 2008
ADT Worldwide	$	70	$	50
Flow Control		5		7
Fire Protection Services		28		27
Electrical and Metal Products		9		14
Safety Products		63		66
Corporate and Other		6		5
	$	181	$	169

        At March 27, 2009 and September 26, 2008, restructuring reserves were included in the Company's Consolidated Balance Sheets as follows ($ in millions):

	March 27, 2009		September 26, 2008
Accrued and other current liabilities	$	149	$	148
Other liabilities		32		21
	$	181	$	169

12

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

4.    Acquisitions

Acquisitions

        During the quarter and six months ended March 27, 2009, cash paid for acquisitions included in continuing operations totaled $3 million and $49 million, respectively, which primarily related to the acquisition of Vue Technology, Inc., a provider of radio frequency identification (RFID) technology, for $43 million by the Company's Safety Products segment.

        During the quarter and six months ended March 28, 2008, cash paid for acquisitions included in continuing operations totaled $5 million and $27 million, respectively, and were primarily within the Company's Safety Products and Flow Control segments.

ADT Dealer Program

        During the quarter and six months ended March 27, 2009, the Company paid $114 million and $231 million of cash, respectively, to acquire approximately 92,000 and 222,000 customer contracts for the electronic security services through the ADT dealer program. During the quarter and six months ended March 28, 2008, Tyco paid $97 million and $187 million of cash, respectively, to acquire approximately 80,000 and 182,000 customer contracts for electronic security services through the ADT dealer program.

5.    Income Taxes

        The Company did not have a significant change to its unrecognized tax benefits during the quarter and six months ended March 27, 2009.

        Many of Tyco's uncertain tax positions relate to tax years that remain subject to audit by the taxing authorities in the U.S. federal, state and local or foreign jurisdictions. Open tax years in significant jurisdictions are as follows:

Jurisdiction	Years Open To Audit
United States	1997-2008
Australia	2004-2008
France	1999-2008
Germany	1998-2008
United Kingdom	2000-2008
Canada	1999-2008

        Based on the current status of its income tax audits, the Company does not anticipate a significant change to its unrecognized tax benefits in the next twelve months.

        At each balance sheet date, management evaluates whether the Company's deferred tax assets are more likely than not of being realized and if sufficient future taxable income will be available by assessing current period and projected operating results and other pertinent data. At March 27, 2009, the Company had recorded deferred tax assets of $1.8 billion, net of valuation allowances of $752 million. If current economic conditions persist or worsen, future taxable income of entities with deferred tax assets could be negatively impacted, which may require additional valuation allowances to be recorded in future reporting periods related to the Company's deferred tax assets.

13

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

5.    Income Taxes (Continued)

Tax Sharing Agreement

        In connection with the spin-offs of Covidien and Tyco Electronics from Tyco, Tyco entered into a Tax Sharing Agreement that generally governs Covidien's, Tyco Electronics' and Tyco's respective rights, responsibilities, and obligations after the Separation with respect to taxes, including ordinary course of business taxes and taxes, if any, that may be incurred as a result of any failure of the distribution of all of the shares of Covidien or Tyco Electronics to qualify as a tax-free distribution for U.S. federal income tax purposes within the meaning of Section 355 of the Code or certain internal transactions undertaken in anticipation of the spin-offs to qualify for tax-favored treatment under the Code.

        Under the Tax Sharing Agreement, the Company shares responsibility for certain of Tyco's, Covidien's and Tyco Electronics' income tax liabilities based on a sharing formula for periods prior to and including June 29, 2007. More specifically, Tyco, Covidien and Tyco Electronics share 27%, 42% and 31%, respectively, of shared income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and Tyco Electronics' U.S. and certain non-U.S. income tax returns. All costs and expenses associated with the management of these shared tax liabilities are shared equally among the parties. At March 27, 2009 and September 26, 2008, Tyco has recorded a net receivable from Covidien and Tyco Electronics of $123 million and $126 million, respectively, of which $122 million and $113 million, respectively, are included in other noncurrent assets and $1 million and $13 million, respectively, are included in prepaid expenses and other current assets as the Company's estimate of their Tax Sharing obligations. Other liabilities include $554 million at both March 27, 2009 and September 26, 2008, for the fair value of Tyco's obligations under the Tax Sharing Agreement, determined in accordance with FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." Tyco assesses the shared tax liabilities and related FIN 45 liability at each reporting period. The receivable and liability were initially recognized with an offset to shareholders' equity in 2007. In the first quarter of 2008, in connection with the adoption of FIN 48, "Accounting for Uncertainty in Incomes Taxes—an interpretation of FASB Statement No. 109," and the related increase in uncertain tax positions for shared tax liabilities under the Tax Sharing Agreement, Tyco increased its receivable from Covidien and Tyco Electronics under the Tax Sharing Agreement with a corresponding increase to other income, net by $40 million ($0.08 for both basic and diluted earnings per share). In addition, during the quarter ended March 27, 2009, $1 million of income for other activity was recorded in accordance with the Tax Sharing Agreement. During the quarter ended March 28, 2008 there was no income for other activity recorded. During the six months ended March 27, 2009 and March 28, 2008, $5 million and $10 million, respectively, of income for other activity was recorded in accordance with the Tax Sharing Agreement.

        Tyco will provide payment under the Tax Sharing Agreement as the shared income tax liabilities are settled. Settlement is expected to occur as the audit process by local taxing authorities is completed for the impacted years. Given the nature of the shared liabilities, the maximum amount of potential future payments is not determinable.

        In the event the Separation is determined to be taxable and such determination was the result of actions taken after the Separation by Tyco, Covidien or Tyco Electronics, the party responsible for such failure would be responsible for all taxes imposed on each company as a result thereof. If such determination is not the result of actions taken by any of the three companies after the Separation, then Tyco, Covidien and Tyco Electronics would be responsible for 27%, 42% and 31%, respectively, of any taxes imposed on any of the companies as a result of such determination. Such tax amounts could

14

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

5.    Income Taxes (Continued)

be significant. The Company is responsible for all of its own taxes that are not shared pursuant to the Tax Sharing Agreement's sharing formula. In addition, Covidien and Tyco Electronics are responsible for their tax liabilities that are not subject to the Tax Sharing Agreement's sharing formula.

        If any party to the Tax Sharing Agreement were to default in its obligation to another party to pay its share of the distribution taxes that arise as a result of no party's fault, each non-defaulting party would be required to pay, equally with any other non-defaulting party, the amounts in default. In addition, if another party to the Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, the Company could be liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, the Company may be obligated to pay amounts in excess of its agreed-upon share of Tyco's, Covidien's and Tyco Electronics' tax liabilities. See Note 17 for further discussion of guarantees and indemnifications extended between Tyco, Covidien and Tyco Electronics.

Other Income Tax Matters

        The Company and its subsidiaries' income tax returns periodically are examined by various tax authorities. In connection with these examinations, tax authorities, including the U.S. Internal Revenue Service ("IRS"), have raised issues and proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax adjustments. Management has assessed the issues related to these adjustments for recognition and measurement under FIN 48 and has recorded unrecognized tax benefits in accordance with FIN 48. The ultimate resolution of these matters is uncertain and could result in a material impact to the Company's financial position, results of operations, cash flows or the effective tax rate in future reporting periods.

        In 2004, in connection with the IRS audit of the 1997 through 2000 years, the Company submitted to the IRS proposed adjustments to certain prior period U.S. federal income tax returns resulting in a reduction in the taxable income previously filed. During 2006, the IRS accepted substantially all of the proposed adjustments, and the Company developed proposed amendments to U.S. federal income tax returns for additional periods through 2002. On the basis of previously accepted amendments, the Company has determined that these adjustments will more-likely-than-not be accepted and, accordingly, has recorded them in the Consolidated Financial Statements. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows.

        Additionally, during 2008 the Company completed proposed amendments to its U.S. federal income tax returns for periods subsequent to 2002, which primarily reflect the roll forward through 2006 of the amendments for the periods 1997 to 2002. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows. While the final adjustments cannot be determined until the income tax return amendment process and the IRS review is completed, the Company believes that any resulting adjustments will not have a material impact on its financial condition, results of operations or cash flows.

        The IRS proposed civil fraud penalties against a subsidiary that was distributed to Tyco Electronics in connection with the Separation. The penalties allegedly arise from actions of former executives taken in connection with intercompany transfers of stock of Simplex Technologies in 1998 and 1999. Based on statutory guidelines, the Company estimates the proposed penalties could range between $30 million and $50 million. The Company, as Audit Managing Party as specified in the Tax Sharing Agreement,

15

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

5.    Income Taxes (Continued)

will vigorously oppose the assertion of any such penalties against Tyco Electronics, in part, because beginning in 2003 the Company discovered, investigated and reported the conduct at issue to the IRS and fully cooperated in the criminal prosecution of the Company's former Chief Tax Officer on a charge of willful filing of a false tax return. This is a pre-Separation shared tax matter under the Tax Sharing Agreement.

        Except for earnings that are currently distributed, no additional material provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings. A liability could arise if amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries.

        The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. The Company recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss carryforwards. The Company adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. Further, management has reviewed with tax counsel certain of the issues raised by these taxing authorities and the adequacy of these recorded amounts. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities may result in income tax benefits being recognized in the period when we determine the liabilities are no longer necessary. Substantially all of these potential tax liabilities are recorded in other liabilities on the Consolidated Balance Sheets as payment is not expected within one year.

6.    Earnings Per Share

        The reconciliations between basic and diluted earnings per share are as follows (in millions, except per share data):

		Quarter Ended March 27, 2009								Quarter Ended March 28, 2008
		Loss			Shares		Per Share Amount			Income		Shares		Per Share Amount
Basic earnings per share:
	(Loss) income from continuing operations	$	(2,555	)		473	$	(5.40	)	$	272		486	$	0.56
	Share options, restricted share awards and deferred stock units		—			—					—		3
Diluted earnings per share:
(Loss) income from continuing operations, giving effect to dilutive adjustments		$	(2,555	)		473	$	(5.40	)	$	272		489	$	0.56

16

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6.    Earnings Per Share (Continued)

		Six Months Ended March 27, 2009								Six Months Ended March 28, 2008
		Loss			Shares		Per Share Amount			Income		Shares		Per Share Amount
Basic earnings per share:
	(Loss) income from continuing operations	$	(2,283	)		473	$	(4.83	)	$	632		489	$	1.29
	Share options, restricted share awards and deferred stock units		—			—					—		4
Diluted earnings per share:
(Loss) income from continuing operations, giving effect to dilutive adjustments		$	(2,283	)		473	$	(4.83	)	$	632		493	$	1.28

        The computation of diluted earnings per share for the quarter and six months ended March 27, 2009 excludes the effect of the potential exercise of options to purchase approximately 27 million shares in both periods and excludes restricted share awards and deferred stock units of approximately 6 million shares in both periods because the effect would be anti-dilutive.

        The computation of diluted earnings per share for both the quarter and six months ended March 28, 2008 excludes the effect of the potential exercise of options to purchase approximately 20 million shares in both periods and excludes restricted share awards and deferred stock units of approximately 4 million shares in both periods because the effect would be anti-dilutive.

7.    Goodwill and Intangible Assets

Goodwill

        Annually, in the fiscal fourth quarter, and more frequently if triggering events occur, the Company tests goodwill for impairment by comparing the fair value of each reporting unit with its carrying amount.

        The Company began to experience a decline in revenue during the first quarter of 2009 in its ADT Worldwide, Fire Protection Services and Safety Products segments as a result of a slowdown in the commercial markets including the retailer end market as well as a decline in sales volume at its Electrical Metal Products segments. Although the Company considered and concluded that these factors did not constitute triggering events during the first quarter of 2009, the continued existence of these conditions during the second quarter of 2009, along with downward revisions to forecasted results, restructuring actions and weaker industry outlooks, caused the Company to conclude that sufficient indicators of impairment existed for certain reporting units. Reporting units within ADT Worldwide, Fire Protection Services and Safety Products segments continued to be negatively impacted as a result of a slowdown in the commercial markets including the retailer end market. Additionally, the Company's Electrical and Metal Products reporting unit continued to be negatively impacted by a decline in sales volume due to the downturn in the non-residential construction market. The Company determined that these underlying events and circumstances constituted triggering events for six reporting units where such events would more likely than not reduce the fair value below their respective carrying amounts. Specifically, the Company concluded that its Europe, Middle East and Africa ("EMEA") Security and EMEA Fire reporting units within the ADT Worldwide and Fire Protection Services segments, respectively, Electrical and Metal Products reporting unit within the

17

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Goodwill and Intangible Assets (Continued)

Electrical and Metal Products segment and Access Control and Video Systems ("ACVS"), Life Safety and Sensormatic Retail Solutions ("SRS") reporting units within the Safety Products segment experienced triggering events. As a result of the triggering events, the Company assessed the recoverability of each of the reporting unit's long-lived assets in accordance with SFAS No. 144 and concluded that the carrying amounts are recoverable at March 27, 2009. Subsequently, the Company performed the first step of the goodwill impairment test for these reporting units.

        To perform the first step of the goodwill impairment test under SFAS No. 142 for the six reporting units with triggering events, the Company compared the carrying amounts of these reporting units to their estimated fair values. Fair value for each reporting unit is determined utilizing a discounted cash flow analysis based on the Company's forecasted cash flows and revenue and operating income growth rates, discounted using an estimated weighted average cost of capital of market participants. A market approach was utilized to corroborate the discounted cash flow analysis performed at each reporting unit. If the carrying amount of a reporting unit exceeded its fair value, goodwill was considered potentially impaired. In determining fair value, management relied on and considered a number of factors, including operating results, business plans, economic projections, cash flow forecasts, market data, and the Company's overall market capitalization. Fair value determinations are sensitive to changes in the factors described above as well as to inherent uncertainties in applying them to the analysis of goodwill recoverability.

        As described above, the Company utilized a discounted cash flow analysis for determining the fair value of each of the reporting units where triggering events had occurred. Based on the factors described above, actual and anticipated reductions in demand for the reporting unit's products and services as well as increased risk due to current economic uncertainty, the estimates of future cash flows used in the second quarter of 2009 discounted cash flow analyses were revised downward from the Company's most recent test conducted during the fourth quarter of 2008. The range of the weighted-average cost of capital utilized was increased to reflect increased risk due to current economic volatility and uncertainties related to demand for the Company's products and services. The weighted-average cost of capital were as follows:

	Second Quarter of 2009	Fourth Quarter of 2008
Weighted-Average Cost of Capital	10.9% to 12.8%	10.0% to 11.7%

        The results of the first step of the goodwill impairment test indicated there was a potential impairment of goodwill in each of the six reporting units identified with triggering events, as the carrying amounts of the reporting units exceeded their respective fair values. As a result, the Company performed the second step of the goodwill impairment test for these reporting units in accordance with SFAS No. 142. The implied fair values of goodwill were determined by allocating the fair values of each reporting unit to all of the assets and liabilities of the applicable reporting unit including any unrecognized intangible assets as if the reporting unit had been acquired in a business combination. The results of the second step of the goodwill impairment test indicated that the implied goodwill amount was less than the carrying amount of goodwill for each of the aforementioned reporting units. The Company recorded an aggregate non-cash impairment charge of $2.6 billion ($2.6 billion after-tax) which was recorded in goodwill and intangible asset impairments in the Company's Consolidated Statement of Operations for the quarter and six months ended March 27, 2009. Specifically, the

18

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Goodwill and Intangible Assets (Continued)

Company recorded the following non-cash goodwill impairment charges to goodwill at the following reporting units ($ in millions):

Reporting Unit	Pre-tax Charge		After-tax Charge
EMEA Fire	$	180	$	179
EMEA Security		613		610
Electrical and Metal Products		935		913
ACVS		327		321
Life Safety		240		236
SRS		346		340
Total	$	2,641	$	2,599

        In order to evaluate the sensitivity of the fair values associated with the Company's remaining reporting units, the Company utilized the discounted cash flow analyses from the Company's most recent test conducted during the fourth quarter of 2008 updated to reflect each reporting unit's most recent financial forecast as well as applying a hypothetical 100 basis point increase in the weighted average cost of capital. Under this scenario, certain reporting units within the Company's ADT Worldwide, Fire Protection Services and Safety Products segments would have less than a ten percent excess of fair value over carrying amount. The goodwill balance for these reporting units with less than a ten percent excess of fair value over carrying amount in the aggregate was approximately $350 million at March 27, 2009.

        As described above, the Company considers market capitalization as one of a number of factors in its evaluation of recoverability of goodwill. The Company considered and evaluated its market capitalization as well as the other factors described above and concluded that its remaining goodwill balance of $8.4 billion at March 27, 2009 is recoverable. As part of the Company's ongoing monitoring efforts, the Company will continue to consider the uncertainty of the current global economic environment and volatility in the stock market as well as in the Company's own stock price in assessing goodwill recoverability.

        Given the current economic environment and the uncertainties regarding the potential impact on the Company's business, there can be no assurance that the Company's estimates and assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of the goodwill impairment test during the second quarter of 2009 will prove to be accurate predictions of the future. If the Company's assumptions regarding forecasted cash flow and revenue and operating income growth rates of certain reporting units are not achieved, it is possible that an impairment test may be triggered for the remaining balance of goodwill prior to the next annual test in the fiscal fourth quarter of 2009. If a triggering event causes an impairment test to be required before the next annual test, it is not possible at this time to determine if an impairment charge would result or if such charge would be material.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Goodwill and Intangible Assets (Continued)

        The changes in the carrying amount of goodwill by segment are as follows ($ in millions):

	ADT Worldwide			Fire Protection Services			Flow Control			Safety Products			Electrical and Metal Products			Total
Balance at September 26, 2008	$	5,081		$	1,467		$	1,993		$	2,054		$	1,024		$	11,619
Purchase Accounting Adjustments		—			(1	)		—			(8	)		—			(9	)
Acquisitions					—			2			32			—			34
Divestitures		—			—			(2	)		—			(6	)		(8	)
Impairment		(613	)		(180	)		—			(913	)		(935	)		(2,641	)
Goodwill transfer due to segment realignment		(58	)		56			2			7			(7	)		—
Currency translation		(280	)		(42	)		(143	)		(44	)		(76	)		(585	)
Balance at March 27, 2009	$	4,130		$	1,300		$	1,852		$	1,128		$	—		$	8,410

        Goodwill for reporting units that have met the held for sale criteria is included in assets held for sale on the consolidated balance sheets and excluded from the table above. See Note 2.

Intangible Assets

        Annually, in the fiscal fourth quarter, and more frequently if triggering events occur, the Company tests indefinite-lived intangible assets for impairment.

        Indefinite-lived intangible assets consisting primarily of trade names are tested for impairment using either a relief from royalty method or excess earnings method. The impairment test for indefinite-lived intangible assets involves a comparison of the estimated fair value of the intangible asset with its carrying amount. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. Fair value determinations require considerable judgment and are sensitive to change. Significant judgments inherent in this analysis include the selection of appropriate discount rates and terminal year growth rate assumptions and estimates of the amount and timing of future cash flows attributable to the underlying intangible assets. Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash flows generated by the intangible asset. Also subject to judgment are assumptions about royalty rates, which are based on the estimated rates at which similar trademarks are being licensed in the marketplace.

        The Company began to experience a decline in revenue during the first quarter of 2009 at its ADT Worldwide and Safety Products segments due to a slowdown in the commercial markets including the retailer end market. Although the Company considered and concluded these factors did not constitute triggering events during the first quarter of 2009, the continued existence of these conditions during the second quarter of 2009, along with downward revisions to forecasted results, restructuring actions and weaker industry outlooks, caused the Company to conclude that sufficient indicators of impairment existed for certain indefinite-lived intangible assets. This deterioration of the business environment related to the retailer business of the Company's ADT Worldwide and Safety Products segments resulted in a further lowering of management's projections of revenues from the retailer end market during the second quarter of 2009.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Goodwill and Intangible Assets (Continued)

        Based on these factors and uncertainties and factors described above, estimates of future cash flows used in determining the fair value of the Company's Safety Products Sensormatic tradename as well as its ADT Worldwide franchise rights relating to Winner and Sensormatic Security Corp ("SSC") during the second quarter of 2009 were revised downward relative to the estimates used in the Company's most recent test during the fourth quarter of 2008. The range of the discount rates utilized was increased to reflect increased risk due to current economic volatility and uncertainties related to demand for the Company's products and services. The discount rates were as follows:

	Second Quarter of 2009	Fourth Quarter of 2008
Discount Rate	12.0% to 12.3%	10.4%

        The results of the impairment test indicated that the Safety Products Sensormatic tradename and ADT Worldwide Winner and SSC franchise rights estimated fair values were less than their respective carrying amounts. As such, the Company recorded an aggregate non-cash impairment charge of $64 million ($40 million after-tax) which was recorded in goodwill and intangible asset impairments in the Company's Consolidated Statement of Operations for the quarter ended March 27, 2009. Specifically, the Company recorded the following non-cash intangible asset impairment charges to reduce the carrying amount of the following indefinite-lived intangible assets (in millions):

Intangible Asset	Pre-tax Charge		After-tax Charge
Sensormatic tradename	$	42	$	26
Winner franchise rights		14		9
SSC franchise rights		8		5
Total	$	64	$	40

        After recording the above impairment charges, the carrying amount of these intangible assets were $141 million at March 27, 2009. However, as indicated above, the fair value determinations require considerable judgment and are sensitive to change. In light of certain economic conditions and the downturn experienced within the commercial markets including the retailer end market, further or protracted deterioration, especially related to the Company's retailer business within its ADT Worldwide and Safety Products segments, could result in additional impairments to these assets in future periods.

        Given the current economic environment and the uncertainties regarding the potential impact on the Company's business, there can be no assurance that the Company's estimates and assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of the indefinite-lived intangible asset impairment test during the second quarter of 2009 will prove to be accurate predictions of the future. If the Company's assumptions regarding forecasted cash flow and revenue and operating income growth rates are not achieved, it is possible that an impairment review may be triggered prior to the next annual review in the fourth quarter of 2009. If a triggering event causes an impairment review to be required before the next annual review, it is not possible at this time to determine if an impairment charge would result or if such charge would be material.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7.    Goodwill and Intangible Assets (Continued)

        The following table sets forth the gross carrying amount and accumulated amortization of the Company's intangible assets ($ in millions):

		March 27, 2009					September 26, 2008
		Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization		Weighted Average Amortization Period
Amortizable:
	Contracts and related customer relationships	$	6,122	$	4,004	14 years	$	6,136	$	3,958	14 years
	Intellectual property		541		427	18 years		553		406	17 years
	Other		17		11	12 years		17		12	15 years
	Total	$	6,680	$	4,442	15 years	$	6,706	$	4,376	15 years
Non-Amortizable:
	Intellectual property	$	202				$	253
	Other		91					110
	Total	$	293				$	363

        Intangible asset amortization expense for the quarters ended March 27, 2009 and March 28, 2008 was $129 million and $138 million, respectively. Intangible asset amortization expense for the six months ended March 27, 2009 and March 28, 2008 was $256 million and $263 million, respectively.

        The estimated aggregate amortization expense on intangible assets is expected to be approximately $250 million for the remainder of 2009, $400 million for 2010, $300 million for 2011, $250 million for 2012, $250 million for 2013 and $200 million for 2014.

22

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

8.    Debt

        Debt was as follows ($ in millions):

	March 27, 2009		September 26, 2008
Commercial paper	$	200	$	116
6.125% public notes due 2008(2)		—		300
6.125% public notes due 2009(2)		—		215
6.75% public notes due 2011		516		516
6.375% public notes due 2011		849		849
Revolving senior credit facility due 2012		—		286
6.0% notes due 2013		655		655
8.5% public notes due 2019		747		—
7.0% public notes due 2019		434		435
6.875% public notes due 2021		717		717
7.0% public notes due 2028		14		16
6.875% public notes due 2029		21		23
Other(1)(2)		89		136
Total debt		4,242		4,264
Less current portion		19		555
Long-term debt	$	4,223	$	3,709

⁽¹⁾

$19 million of the amount shown as other is the current portion of long-term debt as of March 27, 2009.

⁽²⁾

These instruments, plus $40 million of the amount shown as other, comprise the current portion of long-term debt as of September 26, 2008.

        In May 2008, Tyco International Finance S.A. ("TIFSA") commenced issuing commercial paper to U.S. institutional accredited investors and qualified institutional buyers. Borrowings under the commercial paper program are available for general corporate purposes. As of March 27, 2009 and September 26, 2008, TIFSA had $200 million and $116 million, respectively of commercial paper outstanding bearing interest at an average rate of 1.14% and 2.95%, respectively.

        At March 27, 2009 and September 26, 2008, the Company classified $200 million and $116 million, respectively, of short-term commercial paper as long-term. Settlement of the amount outstanding at March 27, 2009 is not expected to require the use of working capital in the next year, as the Company has both the intent and the ability to refinance this debt on a long-term basis.

        On January 9, 2009, TIFSA issued $750 million aggregate principal amount of 8.5% Notes due on January 15, 2019, which are fully and unconditionally guaranteed by the Company (the "2019 Notes"). TIFSA received net proceeds of approximately $745 million after underwriting discounts and offering expenses. The net proceeds may be used for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital, repurchase of common shares, capital expenditures and investments in the Company's subsidiaries. The 2019 Notes are unsecured and rank equally with TIFSA's other unsecured and unsubordinated debt. TIFSA may redeem any of the 2019 Notes at any time by paying the greater of the principal amount of the notes or a "make-whole"

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

8.    Debt (Continued)

amount, plus accrued and unpaid interest. The holders of the 2019 Notes have the right to require TIFSA to repurchase all or a portion of the notes at a purchase price equal to 101% of the principal amount of the notes repurchased, plus accrued and unpaid interest under a change of control triggering event which requires the occurrence of both a change of control and rating event as defined by the Indenture Agreement. Additionally, the holders of the 2019 Notes have the right to require the Company to repurchase all or a portion of the 2019 Notes on July 15, 2014 at a purchase price equal to 100% of the principal amount of the notes tendered, plus accrued and unpaid interest. Otherwise, the notes mature on January 15, 2019. The Company incurred approximately $5 million of debt issuance costs in connection with the transaction, which includes underwriter discounts, as well as legal, accounting and rating agency fees. The debt issuance costs will be amortized from the date of issuance to the earliest redemption date, which is July 15, 2014. Interest is payable semiannually on January 15th and July 15th. The interest rate payable on the 2019 Notes is subject to escalations, as defined by the Indenture Agreement, if either Moody's or S&P downgrades the Company's debt rating below investment grade. The 2019 Notes will not be subject to the preceding adjustments if at any time the Company's debt rating increases one level above its current rating to A3 and A- for Moody's and S&P, respectively.

        On January 15, 2009, TIFSA made a payment of $215 million to extinguish all of its 6.125% notes, due 2009 which matured on the same date. Additionally, in November 2008, TIFSA made a payment of $300 million to extinguish all of its 6.125% notes due 2008.

        On June 24, 2008, Tyco and TIFSA entered into a $500 million senior unsecured revolving credit agreement with Citibank, N.A, as administrative agent for the lenders party thereto. This credit agreement has a three-year term. Borrowings under this agreement have a variable interest rate based on LIBOR or an alternate base rate. The margin over LIBOR can vary based on changes in the Company's credit rating and facility utilization. Together with the existing $1.25 billion five-year senior revolving credit agreement, dated as of April 25, 2007, the Company's total committed revolving credit line was $1.75 billion. These revolving credit facilities may be used for working capital, capital expenditures and general corporate purposes. On January 29, 2009, the Company repaid $686 million to extinguish the entire outstanding balance under its revolving credit facilities. As of March 27, 2009, there were no amounts drawn under these facilities.

        On September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman") filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York. Lehman was one of the lenders in the Company's $1.25 billion revolving credit facility with a commitment of $60 million. Our $500 million credit facility did not have a commitment from Lehman.

        On December 26, 2008, Lehman relinquished all of its rights and obligations as a lender under the $1.25 billion credit facility. At that time, Lehman assigned all of its commitment under the facility to TIFSA. As a result, the aggregate available commitment under the facility was reduced by the assigned amount. As of March 27, 2009, the aggregate available commitment under the Company's senior revolving credit facilities was $1.69 billion, $200 million of which was dedicated to backstop all of the Company's commercial paper outstanding as of such date.

24

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9.    Financial Instruments

Derivative Instruments

        In the normal course of business, Tyco is exposed to market risk arising from changes in currency exchange rates. The Company manages that risk through the use of derivative financial instruments comprised principally of foreign exchange options, swaps and forward contracts, which are not designated as hedging instruments for accounting purposes. The objective of those derivatives instruments is to minimize the potential variability in cash flows associated with intercompany loans and accounts receivable, accounts payable, and forecasted transactions that are denominated in certain foreign currencies.

        Effective March 17, 2009, Tyco changed its jurisdiction of incorporation from Bermuda to Switzerland. Until January 1, 2011 Tyco intends to make dividend payments in the form of a reduction of capital, denominated in Swiss francs. However, the Company expects to actually pay dividends in U.S. dollars, based on exchange rates in effect shortly before the payment date. Fluctuations in the value of the U.S. dollar compared to the Swiss Franc between the date the dividend is declared and paid will increase or decrease the U.S. dollar amount required to be paid. The Company manages the potential variability in cash flows associated with the dividend payments by entering into derivative financial instruments used as economic hedges of the underlying risk.

        The Company does not use derivative financial instruments for trading or speculative purposes.

        All derivative financial instruments are reported on the Consolidated Balance Sheet at fair value with changes in the fair value of the derivative financial instruments recognized currently in earnings in accordance with SFAS No. 133. The following table summarizes the fair value of derivative instruments and their location in the Consolidated Balance Sheet as of March 27, 2009 ($ in millions).

Fair Values of Derivative Instruments

	Balance Sheet Location	Fair Value DR/(CR)			Balance Sheet Location	Fair Value DR/(CR)
Derivatives not designated as hedging instruments under Statement No. 133:
Derivative foreign exchange contracts in an asset position(1)	Other Current				Other Current
	Assets	$	76		Liabilities	$	29
Derivative foreign exchange contracts in a liability position(1)	Other Current				Other Current
	Assets		(28	)	Liabilities		(56	)
Net Asset/(Liability)		$	48			$	(27	)

⁽¹⁾

The Company applies the guidance in FASB Interpretation 39, Offsetting of Amounts Related to Certain Contracts, which permits the netting of derivative assets and liabilities when aggregating derivative contracts for presentation in the consolidated financial statements if certain criteria are met. The table above presents such contracts on a gross basis as required by SFAS No. 161.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9.    Financial Instruments (Continued)

        The following table summarizes the fair value of derivative instruments and their location in the Consolidated Statement of Income as of March 27, 2009 ($ in millions).

The Effect of Derivative Instruments on the Consolidated Statement of Income

		Amount of Gain or (Loss) Recognized in Earnings on Derivative
Derivatives not designated as hedging instruments under Statement No. 133:	Location of Gain or (Loss) Recognized in Earnings on Derivative	For the Quarter Ended March 27, 2009			For the Six Months Ended March 27, 2009
Foreign Exchange Contracts(1)	Selling, general and
	administrative expenses	$	(1	)	$	(23	)
Foreign Exchange Contracts(2)	Other expense, net	$	6		$	6

⁽¹⁾

Includes economic hedges related to operating activities.

⁽²⁾

Includes economic hedges related to dividends declared in Swiss Francs

        As of March 27, 2009, the total gross notional amount of the Company's foreign currency derivative contracts was $1.9 billion.

Counterparty Credit Risk

        The use of derivative financial instruments exposes the Company to counterparty credit risk. If the counterparty fails to perform, the Company is exposed to losses if the derivative is in an asset position. When the fair value of a derivative instrument is an asset, the counterparty has to pay the Company, to settle the contract. This exposes the Company to credit risk. However, when the fair value of a derivative instrument is a liability, the Company has to pay the counterparty to settle the contract and therefore there is no counterparty credit risk. Tyco has established policies and procedures to limit the potential for counterparty credit risk, including establishing limits for credit exposure and continually assessing the creditworthiness of counterparties. As a matter of practice, the Company deals with major banks worldwide having long-term Standard & Poor's and Moody's credit ratings of A-/A3 or higher. To further reduce the risk of loss, the Company generally enters into International Swaps and Derivatives Association master agreements with substantially all of its counterparties. Master netting agreements provide protection in bankruptcy in certain circumstances and, in some cases, enable receivables and payables with the same counterparty to be offset on the Consolidated Balance Sheets, providing for a more meaningful balance sheet presentation of credit exposure. The Company's derivative contracts do not contain any credit risk related contingent features and do not require collateral or other security to be furnished by the Company or the counterparties.

        The Company's exposure to credit risk associated with its derivative instruments is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. As of March 27, 2009, the Company was exposed to industry concentration with financial institutions as well as risk of loss if an individual counterparty or issuer failed to perform its obligations under contractual terms. The maximum amount of loss that the Company would incur, without giving consideration to the effects of legally enforceable master netting agreements, is approximately $105 million.

26

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9.    Financial Instruments (Continued)

Fair Value of Financial Instruments

        Effective September 27, 2008 the Company adopted the provisions of SFAS No. 157 for all financial assets and liabilities as well as non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. SFAS No. 157 provides a single definition of fair value, establishes a comprehensive framework for measuring fair value and expands the related disclosure requirements.

        Specifically, SFAS No. 157 requires fair value to be determined based on the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 emphasizes that fair value is a market-based measurement based on assumptions that "market participants" would use to price the asset or liability. Accordingly, the SFAS No. 157 framework considers markets or observable inputs as the preferred source of value followed by assumptions based on hypothetical transactions, in the absence of market inputs. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company's own credit risk.

        Additionally, SFAS No. 157 establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument's level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows:

•

Level 1—inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities which are accessible as of the measurement date.

•

Level 2—inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates.

•

Level 3—inputs for the valuations are unobservable and are based on management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques such as option pricing models and discounted cash flow models.

Investments

        Investments primarily include cash equivalents, U.S. government obligations and corporate debt securities.

        When available, the Company uses quoted market prices to determine the fair value of investment securities. Such investments are included in Level 1. When quoted market prices are not readily available or representative of fair value, pricing determinations are made based on the results of valuation models using observable market data such as recently reported trades, bid and offer

27

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

9.    Financial Instruments (Continued)

information and benchmark securities. These investments are included in Level 2 and consist primarily of U.S. government debt securities and corporate debt securities.

Derivative Financial Instruments

        As described above, under the caption "Derivative Instruments" derivative assets and liabilities consist of foreign exchange options, swaps and forward contracts. The fair values for these derivative financial instruments are derived from pricing models that take into account the contractual terms and features of each instrument and forward foreign currency rates existing at the end of the period. Valuations are adjusted to reflect creditworthiness of the counterparty for assets and the creditworthiness of the Company for liabilities. Such adjustments are based on observable market evidence and are categorized as Level 2 exposures.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

        The following table presents the Company's assets and liabilities measured at fair value on a recurring basis at March 27, 2009 by level within the fair value hierarchy. As required by SFAS No. 157, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the valuation.

($ in millions)		Level 1		Level 2		Fair Value at March 27, 2009
Assets
Available-for-Sale Securities		$	31	$	301	$	332
Derivative Assets(1)			—		48		48
	Total	$	31	$	349	$	380
Liabilities
Derivative Liabilities(1)		$	—	$	27	$	27

⁽¹⁾

The Company applies the guidance in FASB Interpretation 39, Offsetting of Amounts Related to Certain Contracts, which permits the netting of derivative assets and liabilities when aggregating derivative contracts for presentation in the consolidated financial statements if certain criteria are met. These amounts include fair value adjustments related to the Company's own credit risk and counterparty credit risk.

Other

        During fiscal 2008 and through the second quarter of fiscal 2009, the Company designated certain intercompany loans as permanent in nature. As of March 27, 2009, $2.6 billion of intercompany loans have been designated as permanent in nature and for the quarter and six months ended March 27, 2009, the Company recorded $29 million and $353 million, respectively, of cumulative translation loss through accumulated other comprehensive income related to these loans.

10.    Commitments and Contingencies

        In connection with the Separation, the Company entered into a liability sharing agreement regarding certain legal actions that were pending against Tyco prior to the Separation. Under the

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10.    Commitments and Contingencies (Continued)

Separation and Distribution Agreement, the Company, Covidien and Tyco Electronics are jointly and severally liable for the full amount of any judgments resulting from the actions subject to the agreement, which generally relate to legacy matters that are not specific to the business operations of any of the companies (including Employee Retirement Income Security Act ("ERISA"), Foreign Corrupt Practices Act ("FCPA"), FCPA and securities claims). The Separation and Distribution Agreement also provides that the Company will be responsible for 27%, Covidien 42% and Tyco Electronics 31% of payments to resolve these matters, with costs and expenses associated with the management of these contingencies being shared equally among the parties. In addition, under the agreement, the Company will manage and control all the legal matters related to assumed contingent liabilities as described in the Separation and Distribution Agreement, including the defense or settlement thereof, subject to certain limitations. Additionally, at the time of the Separation, the Company, Covidien and Tyco Electronics agreed to allocate responsibility for certain legacy tax claims pursuant to the same formula under the Tax Sharing Agreement. See Note 5.

Class Action Settlement and Legacy Securities Matters

        As a result of actions taken by certain of the Company's former senior corporate management, Tyco and some members of the Company's former senior corporate management are named defendants in a number of lawsuits alleging violations of the disclosure provisions of the federal securities laws. In addition, Tyco, certain of its current and former employees and some members of the Company's former senior corporate management are named as defendants in several ERISA class actions. The Company is generally obligated to indemnify its directors and officers who are named as defendants in some or all of these matters to the extent required by Bermuda law.

        In 2007, the Company agreed to settle 32 purported securities class action lawsuits arising from actions alleged to have been taken by prior management for $2.975 billion, and the settlement became final in February 2008. Tyco is not subject to any further liability for the class action settlement. Of this amount, the Company contributed $803 million, representing its share under the Separation and Distribution Agreement, to an escrow account established in connection with the settlement and recorded a current liability of $2.975 billion in the third quarter of 2007. Since the settlement was agreed to, the Company has recovered certain amounts from insurers. As a result, the Company recorded $151 million of recoveries in its Consolidated Statements of Operations through the end of fiscal 2008. Based on the Separation and Distribution Agreement, the Company also recorded payables to Covidien and Tyco Electronics for their portion of the recoveries through such date with an offset to Shareholders' Equity. The Company did not recover any additional settlements from insurers during the first six months of 2009.

        The class action settlement did not purport to resolve all legacy securities cases, and several remain outstanding, including the claims related to the Stumpf matter described below. The settlement also did not release claims arising under ERISA and related lawsuits, which are also described below. In addition, as of the opt-out deadline, Tyco had received opt-out notices from individuals and entities totaling approximately 4% of the shares owned by class members. A number of these individuals and entities have filed claims separately against Tyco. Any judgments resulting from such claims or from claims that are filed in the future would not reduce the class action settlement amount. Generally, the claims asserted by these plaintiffs include claims similar to those asserted by the settling defendants; namely, violations of the disclosure provisions of federal securities laws. During the quarter ended March 27, 2009, the Company agreed to settle with two of the plaintiffs that had opted-out of the class

29

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10.    Commitments and Contingencies (Continued)

action settlement for a total of $61 million. Pursuant to the Separation and Distribution Agreement, the Company's share of the settlement amount was approximately $16 million, with Covidien and Tyco Electronics responsible for approximately $26 million and $19 million, respectively. The Company recorded the total settlement amount of $61 million as a liability within the Company's Consolidated Balance Sheet at March 27, 2009, and recorded a receivable due from Covidien and Tyco Electronics for their respective portion of the liability of $26 million and $19 million, respectively, which are recorded in other current assets in the Company's Consolidated Balance Sheet at March 27, 2009. As a result, the Company recorded a $16 million charge to its Consolidated Statement of Operations for the quarter ended March 27, 2009.

        At each balance sheet date, the Company assesses the need for reserves related to its contingent liabilities in accordance with SFAS No. 5, "Accounting for Contingencies." Prior to the current quarter, the Company concluded that it was not possible to reasonably estimate the amount of loss, or range of loss, if any, that might result from an adverse resolution of the legacy securities matters described above. However, in light of the settlements in the second quarter and other recent settlement activity, the Company has concluded that its best estimate of probable loss for these matters (including the remaining opt-out claims and the Stumpf and ERISA matters described below) is $375 million in the aggregate, which the Company recorded as a liability in other current liabilities in the Consolidated Balance Sheet at March 27, 2009. Because any payments ultimately made in connection with these matters would be subject to the sharing provisions of the Separation and Distribution Agreement described above, the Company has also recorded receivables from Covidien and Tyco Electronics in the amounts of $158 million and $116 million, respectively, which are recorded in other current assets in the Company's Consolidated Balance Sheet at March 27, 2009. As a result, the Company recorded a charge of $101 million related to these unresolved legacy securities matters during the quarter ended March 27, 2009 in selling, general, and administrative expenses in the Consolidated Statement of Operations. See Note 19.

Stumpf v. Tyco International Ltd. is a class action lawsuit in which the plaintiffs assert complaints against Tyco, among others, based on alleged violations of the disclosure provisions of the federal securities laws. The matter arises from Tyco's July 2000 initial public offering of common stock of TyCom Inc, and alleges that the TyCom registration statement and prospectus relating to the sale of common stock were inaccurate, misleading and failed to disclose facts necessary to make the registration statement and prospectus not misleading. The complaint further alleges the defendants violated securities laws by making materially false and misleading statements and omissions concerning, among other things, executive compensation, TyCom's business prospects and Tyco's and TyCom's finances. The matter is currently in the pre-trial stages of litigation. As discussed above, the Company has reserved its best estimate of probable loss related to this matter.

        Tyco and certain of our current and former employees, officers and directors, have been named as defendants in eight class actions brought under ERISA. Two of the actions were filed in the United States District Court for the District of New Hampshire and the six remaining actions were transferred to that Court by the Judicial Panel on Multidistrict Litigation. All eight actions have been consolidated in the District Court in New Hampshire. The consolidated complaint purports to bring claims on behalf of the Company's Retirement Savings and Investment Plans and the participants therein and alleges that the defendants breached their fiduciary duties under ERISA by negligently misrepresenting and negligently failing to disclose material information concerning, among other things, the following: related-party transactions and executive compensation; the Company's mergers and acquisitions and the

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10.    Commitments and Contingencies (Continued)

accounting therefore, as well as allegedly undisclosed acquisitions; and misstatements of the Company's financial results. The complaint also asserts that the defendants breached their fiduciary duties by allowing the Plans to invest in the Company's shares when it was not a prudent investment. The complaints seek recovery of alleged plan losses arising from alleged breaches of fiduciary duties. On August 15, 2006, the Court entered an order certifying a class "consisting of all Participants in the Plans for whose individual accounts the Plans purchased and/or held shares of Tyco Stock Fund at any time from August 12, 1998 to July 25, 2002." This matter is currently in the pre-trial stages of litigation and Tyco intends to vigorously defend it. As discussed above, the Company has reserved its best estimate of probable loss related to this matter.

        Under the terms of the Separation and Distribution Agreement, each of Tyco, Covidien and Tyco Electronics are jointly and severally liable for the full amount of any legacy securities action settlement (including the Stumpf matter and ERISA claims) and any judgments resulting from opt-out claims.

        Although the Company has reserved its best estimate of probable loss related to unresolved legacy securities claims, their ultimate resolution could differ from this estimate and could have a material adverse effect on the Company's financial position, results of operations or cash flows.

Investigations

        The Company and others have received various subpoenas and requests from the Securities and Exchange Commission ("SEC") Division of Enforcement, the United States Department of Labor, state departments of labor, the General Service Administration and others seeking the production of voluminous documents in connection with various investigations into the Company's governance, management, operations, accounting and related controls. The Company cannot predict when these investigations will be completed, nor can the Company predict what the results of these investigations may be. It is possible that the Company will be required to pay material fines, consent to injunctions on future conduct, lose the ability to conduct business with government entities or instrumentalities (which in turn could negatively impact the Company's business with non-governmental customers) or suffer other penalties or adverse impacts, each of which could have a material adverse effect on the Company's business. It is not possible to estimate the amount of loss, or range of possible loss, if any, that might result from an adverse resolution of these matters.

Environmental Matters

        Tyco is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. As of March 27, 2009, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately $37 million to $77 million. As of March 27, 2009, Tyco concluded that the best estimate within this range is approximately $45 million, of which $11 million is included in accrued and other current liabilities and $34 million is included in other liabilities in the Company's Consolidated Balance Sheet. In view of the Company's financial position and reserves for environmental matters, the Company believes that any potential payments related to these known environmental liabilities will not have a material adverse effect on its financial position, results of operations or cash flows.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10.    Commitments and Contingencies (Continued)

Asbestos Matters

        The Company and some of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. Consistent with the national trend of increased asbestos-related litigation, the Company has observed an increase in the number of these lawsuits in the past several years. A limited number of the cases allege premises liability, based on claims that individuals were exposed to asbestos while on a subsidiary's property. A majority of the cases involve product liability claims, based principally on allegations of past distribution of heat-resistant industrial products incorporating asbestos or the past distribution of industrial valves that incorporated asbestos-containing gaskets or packing. Each case typically names between dozens to hundreds of corporate defendants.

        The Company's involvement in asbestos cases has been limited because its subsidiaries did not mine or produce asbestos. Furthermore, in the Company's experience, a large percentage of these claims were never substantiated and, as a result, have been dismissed by the courts. The Company will continue to vigorously defend the lawsuits that have been filed against it and its subsidiaries, but cannot predict whether it will be successful in those cases that proceed to trial. When appropriate, the Company settles claims. Although in the past the total amount paid in any year to settle and defend all asbestos claims has been immaterial, the Company has recently experienced an increase in the number of lawsuits that have proceeded to trial. Of the lawsuits that have proceeded to trial in 2008 and 2009, Tyco has won or settled all but one case, with that one case returning an adverse jury verdict for approximately $7.7 million, which included both compensatory and punitive damages. The Company has appealed the verdict and believes that it will ultimately be overturned. As of March 27, 2009, there were approximately 4,700 asbestos liability cases pending against the Company and its subsidiaries.

        The Company estimates its pending asbestos claims and claims that were incurred but not reported, as well as related insurance and indemnification recoveries for certain of these claims. The Company's estimate of the liability for pending and future claims is based on claim experience over the past five years and covers claims expected to be filed over the next seven years. The Company believes that it has adequate amounts recorded related to these matters. While it is not possible at this time to determine with certainty the ultimate outcome of these asbestos-related proceedings, the Company believes that the final outcome of all known and anticipated future claims, after taking into account its substantial indemnification rights and insurance coverage, will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

Compliance Matters

        As previously reported in the Company's periodic filings, the Company has received and responded to various allegations and other information that certain improper payments were made by the Company's subsidiaries in recent years. The Company has been informed that two subsidiaries in the Company's Flow Control business in Italy have been named in a request for criminal charges filed by the Milan public prosecutor's office. The Company has reported to the U.S. Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that it has taken in response to the allegations and its internal investigations. The Company also informed the DOJ and the SEC that it has retained outside counsel to perform a company-wide baseline review of its policies, controls and practices with respect to compliance with the FCPA, and that it would continue to investigate and make periodic progress reports to these agencies. The Company has and will continue to communicate with

32

TYCO INTERNATIONAL LTD.

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10.    Commitments and Contingencies (Continued)

the DOJ and SEC to provide updates on the baseline review and follow-up investigations, including, as appropriate, briefings concerning additional instances of potential improper conduct identified by the Company in the course of its ongoing compliance activities, such as recently discovered conduct involving agents retained by certain of our businesses in EMEA. To date, the baseline review has revealed that some business practices may not comply with Tyco and FCPA requirements. At this time, the Company cannot predict the outcome of these matters and other allegations reported to regulatory and law enforcement authorities and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of these matters. However, it is possible that the Company may be required to pay material fines, consent to injunctions on future conduct, or suffer other penalties or adverse impacts, each of which could have a material adverse effect on its financial position, results of operations or cash flows.

        Covidien and Tyco Electronics agreed, in connection with the Separation, to cooperate with the Company in its responses regarding these matters. Any judgment required to be paid or settlement or other cost incurred by the Company in connection with the FCPA investigations matters would be subject to the liability sharing provisions of the Separation and Distribution Agreement, which assigned liabilities primarily related to the former Healthcare and Electronics businesses of the Company to Covidien or Tyco Electronics, respectively, and provides that the Company will retain liabilities primarily related to its continuing operations. Any liabilities not primarily related to a particular segment will be shared equally among the Company, Covidien and Tyco Electronics.

        The German Federal Cartel Office ("FCO") charged in early 2007 that certain German subsidiaries in the Company's Flow Control business had engaged in anti- competitive practices, in particular with regard to its hydrant, valve, street box and fittings business. The Company investigated this matter and determined that the conduct may have violated German anti-trust law. The Company is cooperating with the FCO in its investigation of this violation. The Company cannot estimate the range of potential loss that may result from this violation. It is possible that the Company may be subject to civil or criminal proceedings and may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on its financial position, results of operations or cash flows.

ERISA Partial Withdrawal Liability Assessment and Demand

        On June 8, 2007, SimplexGrinnell received a notice alleging that it had partially withdrawn from the National Automatic Sprinkler Industry Pension Fund (the "Fund"). Under Title IV of ERISA, if the Fund can prove that an employer completely or partially withdraws from a multi-employer pension plan such as the Fund, the employer is liable for withdrawal liability equal to its proportionate share of the plan's unfunded vested benefits. The alleged withdrawal results from a 1994 labor dispute between Grinnell Fire Protection Systems, SimplexGrinnell's predecessor, and Road Sprinkler Fitters Local Union No. 669.

        ERISA requires that payment of withdrawal liability be made in full or in quarterly installments commencing upon receipt of a liability assessment from the plan. A plan's assessment of withdrawal liability generally may be challenged only in arbitration, and ERISA requires that quarterly payments must continue to be made during the pendency of the arbitration. If the employer prevails in arbitration (and any subsequent appeals), its quarterly withdrawal liability payments are refunded with interest. The Fund's total withdrawal liability assessment against SimplexGrinnell is approximately

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

10.    Commitments and Contingencies (Continued)

$25 million. The quarterly withdrawal liability payments are $1.1 million, $8.8 million of which have been paid to date. While the ultimate outcome is uncertain, SimplexGrinnell believes that it has strong arguments that no withdrawal liability is owed to the Fund, and it plans to vigorously defend against the Fund's withdrawal liability assessment. The matter is currently in arbitration. The Company has made no provision for this contingency and believes that its quarterly payments are recoverable.

Other Matters

        Fitzpatrick Contractors Limited v. Tyco Fire and Integrated Solutions (UK) Ltd.    On July 18, 2007, Fitzpatrick Contractors Limited ("FCL") commenced an action against Tyco Fire and Integrated Solutions (UK) Ltd. in the High Court of Justice, Queen Bench Division, Technology and Construction Court, United Kingdom, alleging that Tyco entered into a binding contract in 2002 for the design, manufacture and installation of mechanical and electrical works for the refurbishment of a portion of London Transport's Blackwall Tunnel. FCL had sought damages for breach of contract in the amount of approximately $38 million. In the second quarter of 2009, the Company accepted an offer made by the plaintiff to settle substantially all of the claims related to this matter for approximately $14 million, excluding legal fees and interest.

        In addition to the foregoing, the Company is subject to claims and suits, including from time to time, contractual disputes and product and general liability claims, incidental to present and former operations, acquisitions and dispositions. With respect to many of these claims, the Company either self-insures or maintains insurance through third-parties, with varying deductibles. While the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of any such proceedings, whether the underlying claims are covered by insurance or not, will not have a material adverse effect on our financial condition, results of operations or cash flows beyond amounts recorded for such matters.

11.    Retirement Plans

        Defined Benefit Pension Plans—SFAS No. 158 requires companies to measure plan assets and benefit obligations as of their fiscal year end and provides two transition alternatives related to the change in the measurement date provisions. The Company adopted the measurement date provisions of SFAS No. 158 on the first day of fiscal 2009. As a result, the Company measured its plan assets and benefit obligations on September 26, 2008 and adjusted its opening balances of accumulated earnings and accumulated other comprehensive income for the change in net periodic benefit cost and fair value, respectively, from the previously used measurement date of August 31, 2008. The adoption of the measurement date provisions resulted in a net decrease to accumulated earnings of $5 million, net of an income tax benefit of $2 million, and a net increase to accumulated other comprehensive income of $61 million, net of income taxes of $28 million.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

11.    Retirement Plans (Continued)

        The net periodic benefit cost for all U.S. and non-U.S. defined benefit pension plans was as follows ($ in millions):

	U.S. Plans
	For the Quarters Ended						For the Six Months Ended
	March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Service cost	$	2		$	2		$	5		$	4
Interest cost		12			12			25			24
Expected return on plan assets		(12	)		(15	)		(25	)		(30	)
Amortization of prior service cost		1			—			1			—
Amortization of net actuarial loss		2			2			4			4
Net periodic benefit cost	$	5		$	1		$	10		$	2

	Non-U.S. Plans
	For the Quarters Ended						For the Six Months Ended
	March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Service cost	$	8		$	12		$	17		$	24
Interest cost		21			21			41			42
Expected return on plan assets		(18	)		(21	)		(36	)		(42	)
Amortization of prior service credit		(1	)		(1	)		(2	)		(2	)
Amortization of net actuarial loss		5			5			10			10
Plan settlements and curtailments termination benefits		(1	)		—			(1	)		—
Net periodic benefit cost	$	14		$	16		$	29		$	32

        The estimated net loss and prior service cost for U.S. pension benefit plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the current fiscal year are expected to be $9 million and $1 million, respectively.

        The estimated net loss and prior service credit for non-U.S. pension benefit plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the current fiscal year are expected to be $18 million and $3 million, respectively.

        The Company anticipates that it will contribute at least the minimum required to its pension plans in fiscal year 2009 of $5 million for U.S. plans and $60 million for non-U.S. plans. During the six months ended March 27, 2009, the Company contributed $32 million to its U.S. and non-U.S. pension plans.

        Postretirement Benefit Plans    Net periodic postretirement benefit cost was insignificant for both periods.

12.    Shareholders' Equity

        As discussed in Note 1, effective March 17, 2009, the Company changed its jurisdiction of incorporation from Bermuda to the Canton of Schaffhausen, Switzerland. In connection with the

35

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

12.    Shareholders' Equity (Continued)

Change of Domicile and pursuant to the laws of Switzerland, the par value of the Company's common shares increased from $0.80 per share to 8.53 Swiss Francs (CHF) per share (or $7.21 based on the exchange rate in effect on March 17, 2009). The Change of Domicile was approved at a special general meeting of shareholders held on March 12, 2009. The following steps occurred in connection with the Change of Domicile, which did not result in a change to total Shareholders' Equity.

(1)

approximately 21 million shares held directly or indirectly in treasury were cancelled;



(2)

increased the par value of common shares from $0.80 to CHF 8.53 through an approximate 1-for-9 reverse share split, followed by the issuance of approximately eight fully paid up shares so that the same number of shares were outstanding before and after the Change of Domicile, which reduced share premium and increased common shares; and



(3)

the remaining amount of share premium was eliminated with a corresponding increase to contributed surplus.

        Preference Shares—In connection with the Change of Domicile, as discussed above, all authorized preference shares were cancelled. At September 26, 2008 Tyco had authorized 31,250,000 preference shares, par value of $4 per share, none of which were issued and outstanding.

        Common Shares—As a result of the adoption of the Company's new Articles of Association in connection with the Change of Domicile, the Company's share capital amounts to CHF 4,088,387,211.53 and is divided into 479,295,101 registered common shares with a par value of CHF 8.53 (or $7.21 based on the exchange rate in effect on March 17, 2009. Until March 12, 2011 the Board of Directors may increase the Company's share capital by a maximum amount of CHF 2,044,193,601.50 by issuing a maximum of 239,647,550 shares. In addition, until March 12, 2011, (i) the share capital of the Company may be increased by an amount not exceeding CHF 408,838,720.30 through the issue of a maximum of 47,929,510 shares through the exercise of conversion and/or option or warrant rights granted in connection with bonds, notes or similar instruments including convertible debt instruments and (ii) the share capital of the Company may be increased by an amount not exceeding CHF 408,838,720.30 through the issue of a maximum of 47,929,510 shares to employees and other persons providing services to the Company. Although the Company states its par value in Swiss Francs it continues to use the U.S. dollar as its reporting currency for preparing its consolidated financial statements.

        Shares Owned by Subsidiaries and Common Shares Held in Treasury—Prior to the Change of Domicile, approximately 21 million shares held by the Company directly or indirectly in treasury were cancelled, leaving approximately 6 million shares held in treasury as of March 27, 2009. At September 26, 2008 there were approximately 22 million shares held by a subsidiary and 5 million shares held in treasury.

        Share Premium and Contributed Surplus—As of September 26, 2008, Tyco International Ltd. was incorporated under the laws of Bermuda. In accordance with the Bermuda Companies Act 1981, when Tyco issued shares for cash at a premium to their par value, the resulting premium was an increase to a share premium account, a non-distributable reserve. Contributed surplus, subject to certain conditions, is a distributable reserve. As discussed above, effective March 17, 2009, the Company discontinued its existence as a Bermuda corporation and became a Swiss corporation. The Company undertook a number of steps in connection with the Change of Domicile described above, that reduced its share premium to zero at March 17, 2009 and increased common shares to approximately $3.5 billion. Any

36

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

12.    Shareholders' Equity (Continued)

share premium remaining after this recapitalization was allocated to contributed surplus, which eliminated the remaining share premium balance.

        Dividends—Pursuant to Swiss law, dividend payments made prior to January 1, 2011 are subject to Swiss withholding taxes unless made in the form of a return of capital from the Company's registered share capital. As a result, the Company intends to first pay dividends in the form of a reduction of registered share capital until at least January 1, 2011. After January 1, 2011, the Company expects to make dividend payments in the form of a reduction in contributed surplus, which also may be made free of Swiss withholding taxes.

        On March 12, 2009 the Company's Board of Directors declared a quarterly dividend on the Company's common shares of 0.23 CHF per share, which will be paid on May 27, 2009 to shareholders of record on April 30, 2009. The dividend of CHF 0.23 is the first installment of an annual dividend of CHF 0.93 per share approved by the shareholders on March 12, 2009. Under Swiss law, approval by the shareholders establishes the dividend, as such the Company recorded an accrued dividend of CHF 440 million as of March 12, 2009 which approximated $377 million based on the exchange rate in effect on that date. The dividend was approved at the special shareholders meeting on March 12, 2009 and is made in the form of a return of capital. As such, this amount was recorded as a reduction of common shares which will reduce the Company's par value of CHF 8.53 to CHF 7.60. The dividend will be paid in U.S. dollars converted from Swiss Francs at the USD/CHF exchange rate in effect shortly before the payment date. Prior to the Change of Domicile, on December 4, 2008, the Company's Board of Directors declared a quarterly dividend on the Company's common shares of $0.20 per share, which was paid on February 2, 2009 to shareholders of record on January 5, 2009. This amount was recorded as a reduction of accumulated earnings. On both December 6, 2007 and March 13, 2008 the Company's Board of Directors declared a quarterly dividend on the Company's common shares of $0.15 per share, which was paid on February 1, 2008 and May 1, 2008, respectively, to shareholders of record on January 3, 2008 and April 1, 2008, respectively.

13.    Share Plans

        During the six months ended March 27, 2009, the Company issued its annual share-based compensation grants. The total number of awards issued was approximately 8 million, of which 5 million were share options, 2 million were restricted unit awards and 1 million were performance share unit awards. The options are exercisable in equal annual installments over a period of 4 years, the restricted unit awards vest in equal installments over a period of 4 years and the performance share unit awards vest after a period of 3 years based on the level of attainment of the applicable performance metrics, which are determined by the Compensation and Human Resources Committee of the Board. The weighted-average grant-date fair value of the share options, restricted unit awards and performance share unit awards was $7.15, $29.00 and $27.84, respectively. The weighted-average assumptions used in the Black-Scholes option pricing model included an expected stock price volatility of 32%, a risk free interest rate of 2.71%, an expected annual dividend per share of $0.80 and an expected option life of 5.2 years.

        During the six months ended March 28, 2008, there were no material share-based compensation grants.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

14.    Consolidated Segment Data

        The Company, from time to time, will realign businesses and management responsibility within its operating segments that possess similar characteristics such as product and service offerings. These realignments are designed to more fully leverage existing capabilities and enhance development for future products and services. Effective September 27, 2008, certain businesses were transferred from the Company's ADT Worldwide segment to the Company's Fire Protection Services segment, from the Company's Fire Protection Services segment to the Company's Flow Control segment and from the Company's Electrical and Metal Products segment to the Company's Safety Products segment. The realignment of these businesses results in segment data being presented in line with management's view of segment operating results. The revenue and operating income for the period ending March 28, 2008 has been recast to reflect the realignment of the Company's ADT Worldwide businesses to the Company's Fire Protection Services segment. All the other business realignments were not recast because the changes were immaterial. Additionally, the segment data presented have been reclassified to exclude the results of discontinued operations. Selected information by segment is presented in the following tables ($ in millions):

		For the Quarters Ended				For the Six Months Ended
		March 27, 2009		March 28, 2008		March 27, 2009		March 28, 2008
Net revenue(1):
	ADT Worldwide	$	1,694	$	1,895	$	3,486	$	3,823
	Flow Control		927		1,024		1,886		2,098
	Fire Protection Services		817		932		1,668		1,832
	Electrical and Metal Products		330		542		746		1,029
	Safety Products		382		469		790		916
	Corporate and Other		—		1		—		2
	Net revenue	$	4,150	$	4,863	$	8,576	$	9,700

⁽¹⁾

Revenue by operating segment excludes intercompany transactions.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

14.    Consolidated Segment Data (Continued)

		For the Quarters Ended						For the Six Months Ended
		March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Operating (loss) income:
	ADT Worldwide	$	(457	)	$	220		$	(226	)	$	466
	Flow Control		133			143			270			314
	Fire Protection Services		(122	)		79			(64	)		155
	Electrical and Metal Products		(962	)		72			(935	)		113
	Safety Products		(943	)		54			(869	)		140
	Corporate and Other		(203	)		(126	)		(317	)		(253	)
	Operating (loss) income	$	(2,554	)	$	442		$	(2,141	)	$	935

        There were no significant changes to total assets by segment other than the goodwill and intangible asset impairments described in Note 7.

15.    Inventory

        Inventories consisted of the following ($ in millions):

		March 27, 2009		September 26, 2008
Purchased materials and manufactured parts		$	611	$	681
Work in process			231		272
Finished goods			870		926
	Inventories	$	1,712	$	1,879

        Inventories are recorded at the lower of cost (primarily first-in, first-out) or market value.

16.    Property, Plant and Equipment

        Property, plant and equipment consisted of the following ($ in millions):

		March 27, 2009			September 26, 2008
Land		$	144		$	152
Buildings			742			772
Subscriber systems			5,147			5,235
Machinery and equipment			2,239			2,339
Property under capital leases(1)			44			51
Construction in progress			165			132
Accumulated depreciation(2)			(5,135	)		(5,162	)
	Property, Plant and Equipment, net	$	3,346		$	3,519

⁽¹⁾

Property under capital leases consists primarily of buildings.

⁽²⁾

Accumulated amortization of capital lease assets was $24 million and $23 million at March 27, 2009 and September 26, 2008, respectively.

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TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

17.    Guarantees

        Certain of the Company's business segments have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current fiscal year through the completion of such transactions. The guarantees would typically be triggered in the event of nonperformance and performance under the guarantees, if required, would not have a material effect on the Company's financial position, results of operations or cash flows.

        There are certain guarantees or indemnifications extended among Tyco, Covidien and Tyco Electronics in accordance with the terms of the Separation and Distribution Agreement and the Tax Sharing Agreement. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. At the time of the Separation, Tyco recorded a liability necessary to recognize the fair value of such guarantees and indemnifications in accordance with FIN No. 45. In the absence of observable transactions for identical or similar guarantees, the Company determined the fair value of these guarantees and indemnifications utilizing expected present value measurement techniques. Significant assumptions utilized to determine fair value included determining a range of potential outcomes, assigning a probability weighting to each potential outcome and estimating the anticipated timing of resolution. The probability weighted outcomes were discounted using the Company's incremental borrowing rate. The liability necessary to reflect the fair value of the guarantees and indemnifications under the Tax Sharing Agreement is $554 million, which is included in other liabilities on the Company's Consolidated Balance Sheet at March 27, 2009 and September 26, 2008, respectively. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. See Note 5 for further discussion of the Tax Sharing Agreement.

        In addition, Tyco historically provided support in the form of financial and/or performance guarantees to various Covidien and Tyco Electronics operating entities. In connection with the Separation, the Company worked with the guarantee counterparties to cancel or assign these guarantees to Covidien or Tyco Electronics. To the extent these guarantees were not assigned prior to the Separation date, Tyco assumed primary liability on any remaining such support. The estimated fair value of these obligations is $7 million, which is included in other liabilities on the Company's Consolidated Balance Sheets, and were recorded in accordance with FIN No. 45 with an offset to shareholders' equity on the Separation date.

        In disposing of assets or businesses, the Company often provides representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's financial position, results of operations or cash flows.

        The Company has recorded liabilities for known indemnifications included as part of environmental liabilities. See Note 10 for a discussion of these liabilities.

        In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company's financial position, results of operations or cash flows.

40

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

17.    Guarantees (Continued)

        The Company records estimated product warranty costs at the time of sale. The following is a roll-forward of the Company's warranty accrual ($ in millions):

	For the Quarter Ended March 27, 2009			For the Six Ended March 27, 2009
Balance at September 26, 2008	$	92		$	105
Warranties issued during the period		5			11
Changes in estimates		1			—
Settlements		(14	)		(29	)
Currency translation		—			(3	)
Balance at March 27, 2009	$	84		$	84

        In 2001, a division of Safety Products initiated a Voluntary Replacement Program ("VRP") associated with the acquisition of Central Sprinkler. The VRP relates to the replacement of certain O-ring seal sprinkler heads which were originally manufactured by Central Sprinkler prior to Tyco's acquisition. Under this program, the sprinkler heads are being replaced free of charge to property owners. On May 1, 2007, the Consumer Product Safety Commission and the Company announced an August 31, 2007 deadline for filing claims to participate in the VRP. The Company will fulfill all valid claims for replacement of qualifying sprinklers received up to August 31, 2007. The ultimate cost to complete the program will be impacted by a number of factors such as changes in material and labor costs, and the actual number of sprinkler heads replaced. Settlements during the quarter and six months ended March 27, 2009 include cash expenditures of $9 million and $19 million, respectively, related to the VRP.

18.    Tyco International Finance S.A.

        TIFSA, a wholly-owned subsidiary of the Company, has public debt securities outstanding (see Note 8) which are fully and unconditionally guaranteed by Tyco. TIFSA, which was formed in December 2006, is a holding company established in connection with the Separation as the successor company to TIGSA. During the third quarter of 2007, TIGSA's assets and liabilities were contributed to TIFSA, Covidien and Tyco Electronics. TIGSA was put into liquidation on June 1, 2007. TIFSA directly or indirectly owns substantially all of the operating subsidiaries of the Company, performs treasury operations and has assumed the indebtedness of TIGSA. The following tables present condensed consolidating financial information for Tyco, TIFSA and all other subsidiaries. Condensed financial information for Tyco and TIFSA on a stand-alone basis is presented using the equity method of accounting for subsidiaries.

        During the second quarter of 2008, the Company completed a tax-free restructuring involving the transfer of certain investments from Tyco to TIFSA. Since the transactions were entirely among wholly-owned subsidiaries of Tyco, there was no impact on the Company's financial position, results of operations or cash flows. The transactions did, however, result in an increase to TIFSA's investment in subsidiaries of $1.9 billion. Since these transactions were among entities under common control, their effects have been reflected as of the beginning of the earliest period presented.

41

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended March 27, 2009

(in millions)

		Tyco International Ltd.			Tyco International Finance S.A.			Other Subsidiaries			Consolidating Adjustments		Total
Net revenue		$	—		$	—		$	4,150		$	—	$	4,150
Cost of product sales			—			—			1,861			—		1,861
Cost of services			—			—			854			—		854
Selling, general and administrative expenses			122			5			1,073			—		1,200
Goodwill and intangible asset impairments			—			—			2,705			—		2,705
Restructuring, asset impairment and divestiture charges, net			2			—			82			—		84
	Operating loss		(124	)		(5	)		(2,425	)		—		(2,554	)
Interest income			—			—			11			—		11
Interest expense			—			(76	)		(2	)		—		(78	)
Other income, net			5			2			—			—		7
Equity in net loss of subsidiaries			(2,082	)		(2,359	)		—			4,441		—
Intercompany interest and fees			(354	)		38			316			—		—
	Loss from continuing operations before income taxes and minority interest		(2,555	)		(2,400	)		(2,100	)		4,441		(2,614	)
Income tax benefit			—			14			46			—		60
Minority interest			—			—			(1	)		—		(1	)
	Loss from continuing operations		(2,555	)		(2,386	)		(2,055	)		4,441		(2,555	)
Loss from discontinued operations, net of income taxes			(12	)		(13	)		(12	)		25		(12	)
	Net loss	$	(2,567	)	$	(2,399	)	$	(2,067	)	$	4,466	$	(2,567	)

42

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Quarter Ended March 28, 2008

(in millions)

		Tyco International Ltd.			Tyco International Finance S.A.			Other Subsidiaries			Consolidating Adjustments			Total
Net revenue		$	—		$	—		$	4,863		$	—		$	4,863
Cost of product sales			—			—			2,195			—			2,195
Cost of services			—			—			990			—			990
Selling, general and administrative expenses			29			—			1,175			—			1,204
Separation costs (credits)			5			—			(10	)		—			(5	)
Restructuring, asset impairment and divestiture charges, net			—			—			37			—			37
	Operating (loss) income		(34	)		—			476			—			442
Interest income			14			—			11			—			25
Interest expense			(14	)		(95	)		(6	)		—			(115	)
Other (expense) income, net			(1	)		1			—			—			—
Equity in net income of subsidiaries			689			404			—			(1,093	)		—
Intercompany interest and fees			(382	)		45			337			—			—
	Income from continuing operations before income taxes and minority interest		272			355			818			(1,093	)		352
Income tax benefit (expense)			—			24			(103	)		—			(79	)
Minority interest			—			—			(1	)		—			(1	)
	Income from continuing operations		272			379			714			(1,093	)		272
Income from discontinued operations, net of income taxes			8			6			8			(14	)		8
	Net income	$	280		$	385		$	722		$	(1,107	)	$	280

43

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended March 27, 2009

(in millions)

		Tyco International Ltd.			Tyco International Finance S.A.			Other Subsidiaries			Consolidating Adjustments		Total
Net revenue		$	—		$	—		$	8,576		$	—	$	8,576
Cost of product sales			—			—			3,840			—		3,840
Cost of services			—			—			1,744			—		1,744
Selling, general and administrative expenses			136			5			2,199			—		2,340
Goodwill and intangible asset impairments			—			—			2,705			—		2,705
Restructuring, asset impairment and divestiture charges, net			2			—			86			—		88
	Operating loss		(138	)		(5	)		(1,998	)		—		(2,141	)
Interest income			—			1			22			—		23
Interest expense			—			(146	)		(5	)		—		(151	)
Other income, net			5			2			4			—		11
Equity in net loss of subsidiaries			(1,441	)		(2,025	)		—			3,466		—
Intercompany interest and fees			(709	)		69			640			—		—
	Loss from continuing operations before income taxes and minority interest		(2,283	)		(2,104	)		(1,337	)		3,466		(2,258	)
Income tax benefit (expense)			—			34			(58	)		—		(24	)
Minority interest			—			—			(1	)		—		(1	)
	Loss from continuing operations		(2,283	)		(2,070	)		(1,396	)		3,466		(2,283	)
Loss from discontinued operations, net of income taxes			(7	)		(11	)		(7	)		18		(7	)
	Net loss	$	(2,290	)	$	(2,081	)	$	(1,403	)	$	3,484	$	(2,290	)

44

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended March 28, 2008

(in millions)

		Tyco International Ltd.			Tyco International Finance S.A.			Other Subsidiaries			Consolidating Adjustments			Total
Net revenue		$	—		$	—		$	9,700		$	—		$	9,700
Cost of product sales			—			—			4,386			—			4,386
Cost of services			—			—			1,956			—			1,956
Selling, general and administrative expenses			38			1			2,332			—			2,371
Separation (credits) costs			(14	)		—			18			—			4
Restructuring, asset impairment and divestiture charges, net			—			—			48			—			48
	Operating (loss) income		(24	)		(1	)		960			—			935
Interest income			47			—			36			—			83
Interest expense			(47	)		(175	)		(10	)		—			(232	)
Other income, net			50			2			—			—			52
Equity in net income of subsidiaries			1,370			766			—			(2,136	)		—
Intercompany interest and fees			(764	)		87			677			—			—
	Income from continuing operations before income taxes and minority interest		632			679			1,663			(2,136	)		838
Income tax benefit (expense)			—			39			(243	)		—			(204	)
Minority interest			—			—			(2	)		—			(2	)
	Income from continuing operations		632			718			1,418			(2,136	)		632
Income from discontinued operations, net of income taxes			11			7			11			(18	)		11
	Net income	$	643		$	725		$	1,429		$	(2,154	)	$	643

45

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18.    Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET

March 27, 2009

(in millions)

			Tyco International Ltd.		Tyco International Finance S.A.		Other Subsidiaries			Consolidating Adjustments			Total
Assets
Current Assets:
	Cash and cash equivalents		$	—	$	—	$	1,419		$	—		$	1,419
	Accounts receivable, net			—		—		2,608			—			2,608
	Inventories			—		—		1,712			—			1,712
	Intercompany receivables			1,068		100		15,301			(16,469	)		—
	Prepaid expenses and other current assets			348		—		1,563			—			1,911
	Assets held for sale			30		3		36			(33	)		36
		Total current assets		1,446		103		22,639			(16,502	)		7,686
Property, plant and equipment, net				—		—		3,346			—			3,346
Goodwill				—		—		8,410			—			8,410
Intangible assets, net				—		—		2,531			—			2,531
Investment in subsidiaries				43,315		15,107		—			(58,422	)		—
Intercompany loans receivable				—		13,109		19,006			(32,115	)		—
Other assets				122		73		2,609			—			2,804
	Total Assets		$	44,883	$	28,392	$	58,541		$	(107,039	)	$	24,777
Liabilities and Shareholder's Equity
Current Liabilities:
	Loans payable and current maturities of long-term debt		$	—	$	—	$	19		$	—		$	19
	Accounts payable			2		—		1,164			—			1,166
	Accrued and other current liabilities			839		80		2,205			—			3,124
	Deferred revenue			—		—		618			—			618
	Intercompany payables			8,830		6,524		1,115			(16,469	)		—
	Liabilities held for sale			—		—		6			—			6
		Total current liabilities		9,671		6,604		5,127			(16,469	)		4,933
Long-term debt				—		4,146		77			—			4,223
Intercompany loans payable				22,770		391		8,954			(32,115	)		—
Other liabilities				559		—		3,168			—			3,727
	Total Liabilities			33,000		11,141		17,326			(48,584	)		12,883
Minority interest				—		—		11			—			11
Shareholders' Equity:
	Preference shares			—		—		2,500			(2,500	)		—
	Common shares			3,118		—		(242	)		—			2,876
	Other shareholders' equity			8,765		17,251		38,946			(55,955	)		9,007
	Total Shareholders' Equity			11,883		17,251		41,204			(58,455	)		11,883
	Total Liabilities and Shareholders' Equity		$	44,883	$	28,392	$	58,541		$	(107,039	)	$	24,777

46

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18. Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET

September 26, 2008

(in millions)

			Tyco International Ltd.		Tyco International Finance S.A.		Other Subsidiaries			Consolidating Adjustments			Total
Assets
Current Assets:
	Cash and cash equivalents		$	1	$	1	$	1,517		$	—		$	1,519
	Accounts receivable, net			—		—		3,024			—			3,024
	Inventories			—		—		1,879			—			1,879
	Intercompany receivables			1,097		76		15,069			(16,242	)		—
	Prepaid expenses and other current assets			9		—		1,796			—			1,805
	Assets held for sale			44		1		126			(45	)		126
		Total current assets		1,151		78		23,411			(16,287	)		8,353
Property, plant and equipment, net				—		—		3,519			—			3,519
Goodwill				—		—		11,619			—			11,619
Intangible assets, net				—		—		2,693			—			2,693
Investment in subsidiaries				45,593		21,785		—			(67,378	)		—
Intercompany loans receivable				—		9,799		18,999			(28,798	)		—
Other assets				114		83		2,423			—			2,620
	Total Assets		$	46,858	$	31,745	$	62,664		$	(112,463	)	$	28,804
Liabilities and Shareholders' Equity
Current Liabilities:
	Loans payable and current maturities of long-term debt		$	—	$	515	$	40		$	—		$	555
	Accounts payable			2		—		1,630			—			1,632
	Accrued and other current liabilities			103		76		2,587			—			2,766
	Deferred revenue			—		—		608			—			608
	Intercompany payables			8,126		6,990		1,126			(16,242	)		—
	Liabilities held for sale			—		—		82			—			82
		Total current liabilities		8,231		7,581		6,073			(16,242	)		5,643
Long-term debt				—		3,605		104			—			3,709
Intercompany loans payable				22,573		384		5,841			(28,798	)		—
Other liabilities				560		—		3,384			—			3,944
	Total Liabilities			31,364		11,570		15,402			(45,040	)		13,296
Minority interest				—		—		14			—			14
Shareholders' Equity:
	Preference shares			—		—		2,500			(2,500	)		—
	Common shares			208		—		(18	)		—			190
	Other shareholders' equity			15,286		20,175		44,766			(64,923	)		15,304
	Total Shareholders' Equity			15,494		20,175		47,248			(67,423	)		15,494
	Total Liabilities and Shareholders' Equity		$	46,858	$	31,745	$	62,664		$	(112,463	)	$	28,804

47

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18. Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months

Ended March 27, 2009

(in millions)

		Tyco International Ltd.			Tyco International Finance S.A.			Other Subsidiaries			Consolidating Adjustments			Total
Cash Flows From Operating Activities:
	Net cash provided by (used in) operating activities	$	9		$	(511	)	$	1,284		$	—		$	782
	Net cash used in discontinued operating activities		—			—			(13	)		—			(13	)
Cash Flows From Investing Activities:
Capital expenditures			—			—			(331	)		—			(331	)
Proceeds from disposal of assets			—			—			4			—			4
Acquisition of businesses, net of cash acquired			—			—			(47	)		—			(47	)
Accounts purchased from ADT dealer program			—			—			(231	)		—			(231	)
Net increase in intercompany loans			—			(864	)		—			864			—
(Increase) decrease in investments in subsidiaries			(18	)		1,352			—			(1,334	)		—
Other			—			—			2			—			2
	Net cash (used in) provided by investing activities		(18	)		488			(603	)		(470	)		(603	)
	Net cash provided by discontinued investing activities		—			—			32			—			32
Cash Flows From Financing Activities:
Net borrowing (repayment) of debt			—			25			(45	)		—			(20	)
Proceeds from exercise of share options			—			—			1			—			1
Dividends paid			(189	)		—			—			—			(189	)
Repurchase of common shares by subsidiary			—			—			(3	)		—			(3	)
Net intercompany loan borrowings			197			—			667			(864	)		—
Decrease in equity from parent			—			—			(1,334	)		1,334			—
Transfer from discontinued operations			—			—			19			—			19
Other			—			(3	)		(2	)		—			(5	)
	Net cash provided by (used in) financing activities		8			22			(697	)		470			(197	)
	Net cash used in discontinued financing activities		—			—			(19	)		—			(19	)
Effect of currency translation on cash			—			—			(82	)		—			(82	)
Net decrease in cash and cash equivalents			(1	)		(1	)		(98	)		—			(100	)
Cash and cash equivalents at beginning of period			1			1			1,517			—			1,519
Cash and cash equivalents at end of period		$	—		$	—		$	1,419		$	—		$	1,419

48

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

18. Tyco International Finance S.A. (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended

March 28, 2008

(in millions)

		Tyco International Ltd.			Tyco International Finance S.A.			Other Subsidiaries			Consolidating Adjustments			Total
Cash Flows From Operating Activities:
	Net cash (used in) provided by operating activities	$	(3,571	)	$	243		$	708		$	—		$	(2,620	)
	Net cash provided by discontinued operating activities		—			—			4			—			4
Cash Flows From Investing Activities:
Capital expenditures			—			—			(355	)		—			(355	)
Proceeds from disposal of assets			—			—			10			—			10
Acquisition of businesses, net of cash acquired			—			—			(27	)		—			(27	)
Accounts purchased from ADT dealer program			—			—			(187	)		—			(187	)
Class action settlement escrow			2,960			—			—			—			2,960
Intercompany dividend from subsidiary			—			62			—			(62	)		—
Net increase in intercompany loans			—			(279	)		—			279			—
Other			—			—			(10	)		—			(10	)
	Net cash provided by (used in) investing activities		2,960			(217	)		(569	)		217			2,391
	Net cash provided by discontinued investing activities		—			—			13			—			13
Cash Flows From Financing Activities:
Net borrowing (repayment) of debt			—			50			(10	)		—			40
Proceeds from exercise of share options			20			—			1			—			21
Dividends paid			(148	)		—			—			—			(148	)
Intercompany dividend to parent			—			—			(62	)		62			—
Repurchase of common shares by subsidiary			—			—			(477	)		—			(477	)
Net intercompany loan borrowings (repayments)			724			—			(445	)		(279	)		—
Transfer from discontinued operations			—			—			19			—			19
Other			—			(76	)		6			—			(70	)
	Net cash provided by (used in) financing activities		596			(26	)		(968	)		(217	)		(615	)
	Net cash used in discontinued financing activities		—			—			(17	)		—			(17	)
Effect of currency translation on cash			—			—			24			—			24
Net decrease in cash and cash equivalents			(15	)		—			(805	)		—			(820	)
Cash and cash equivalents at beginning of period			16			—			1,878			—			1,894
Cash and cash equivalents at end of period		$	1		$	—		$	1,073		$	—		$	1,074

49

TYCO INTERNATIONAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

19. Subsequent Events

        During the third quarter of 2009, the Company agreed to settle with two of the remaining plaintiffs that had opted-out of the class action settlement for approximately $45 million. Pursuant to the Separation and Distribution Agreement, the Company's share of this amount is approximately $12 million, with Covidien and Tyco Electronics responsible for approximately $19 million and $14 million, respectively.

50

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

        The following discussion and analysis of the Company's financial condition and results of operations should be read together with our Consolidated Financial Statements and the related notes included in this Quarterly Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The Company's actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the headings "Risk Factors" and "Forward-Looking Information."

Introduction

        The unaudited Consolidated Financial Statements include the consolidated results of Tyco International Ltd., a company organized under the laws of Switzerland, and its subsidiaries (hereinafter collectively referred to as "we," the "Company" or "Tyco") and have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States ("GAAP").

        The Company operates in the following business segments:

•

ADT Worldwide designs, sells, installs, services and monitors electronic security systems for residential, commercial, industrial and governmental customers.

•

Flow Control designs, manufactures, sells and services valves, pipes, fittings, valve automation and heat tracing products for the water and wastewater markets, the oil, gas and other energy markets along with general process industries.

•

Fire Protection Services designs, sells, installs and services fire detection and fire suppression systems for commercial, industrial and governmental customers.

•

Electrical and Metal Products designs, manufactures and sells galvanized steel tubing, armored wire and cable and other metal products for non-residential construction, electrical, fire and safety and mechanical customers.

•

Safety Products designs, manufactures and sells fire protection, security and life safety products, including fire suppression products, breathing apparatus, intrusion security, access control and video management systems. In addition, Safety Products manufactures products installed and serviced by ADT Worldwide and Fire Protection Services.

        We also provide general corporate services to our segments and these costs are reported as Corporate and Other.

        References to the segment data are to the Company's continuing operations. Prior period amounts have been reclassified to exclude the results of discontinued operations. Additionally, the Company has realigned certain business operations as of September 27, 2008, which resulted in certain prior period segment amounts being recast. See Note 13.

Overview and Outlook

        Primarily as a result of changes in foreign currencies and volume decreases in our Electrical and Metal Products business, net revenue for the quarter ended March 27, 2009 decreased $713 million from $4.9 billion for the comparable period ended March 28, 2008 to $4.2 billion in the quarter ended March 27, 2009. Net revenue for the six months ended March 27, 2009 decreased $1.1 billion from $9.7 billion for the comparable period ended March 28, 2008 to $8.6 billion in the quarter ended March 27, 2009. During the second quarter of 2009, the U.S. dollar continued to appreciate against most major currencies in which we operate, but most notably the Euro and British Pound. The significant appreciation of the U.S. dollar against most major currencies for the quarter and six months ended March 27, 2009 over the comparable periods ended March 28, 2008 negatively impacted our revenue by approximately $494 million and $917 million, respectively, as nearly 50% of our revenue is

51

generated outside of the United States. If the U.S. dollar continues to appreciate against the currencies that we have significant exposure to, our reported net revenue can be expected to be adversely affected.

        All of our reportable segments experienced declines in operating income for both the quarter and six months ended March 27, 2009. On a consolidated basis, operating income for the quarter and six months ended March 27, 2009 declined $3.0 billion to $(2.6) billion and $3.1 billion to $(2.1) billion, respectively, primarily as a result of goodwill and intangible asset impairments of $2.7 billion, a provision of $101 million related to unresolved legacy securities litigation matters and lower sales volume of steel products at our Electrical and Metal Products segment. The quarter and six months ended March 27, 2009, were negatively impacted by $9 million and favorably impacted by $57 million, respectively, due to changes in foreign currency exchange rates.

        In response to the economic downturn, cost containment actions have been initiated across all of our businesses and corporate. We are also pursuing cost savings through restructuring activities in fiscal 2009 and expect to incur restructuring and restructuring related charges of approximately $200 million in fiscal 2009, of which $74 million and $75 million was incurred during the quarter and six months ended March 27, 2009. We believe these restructuring activities will strengthen our competitive position over the long term.

        We expect to continue our initiatives to improve our efficiency, manage our working capital effectively and prudently allocate our capital. We expect internal investments to fund growth and productivity in our businesses to continue to be our first priority. As in prior years, we expect to remain active in making bolt-on acquisitions as we continually assess the strategic fit and value of businesses that have potential for success within our existing framework. For example during the first half of fiscal year 2009, the Company's Safety Products segment acquired Vue Technology, Inc., a provider of radio frequency identification (RFID) technology, for $43 million to strengthen the technology portfolio offered to retailers.

Goodwill and Intangible Asset Impairments

        Annually, in the fiscal fourth quarter, and more frequently if triggering events occur, the Company tests goodwill and indefinite-lived intangible assets for impairment by comparing the fair value of each reporting unit or indefinite-lived intangible assets with its carrying amount.

        The Company began to experience a decline in revenue during the first quarter of 2009 in its ADT Worldwide, Fire Protection Services and Safety Products segments as a result of a slowdown in the commercial markets, including the retailer end market as well as a decline in sales volume at its Electrical Metal Products segments. Although we considered and concluded that these factors did not constitute triggering events during the first quarter of 2009, the continued existence of these conditions during the second quarter of 2009, along with downward revisions to forecasted results, restructuring actions and weaker industry outlooks, caused us to conclude that sufficient indicators of impairment existed. Reporting units within ADT Worldwide, Fire Protection Services and Safety Products segments continued to be negatively impacted as a result of a slowdown in the commercial markets including the retailer end market. Additionally, the Company's Electrical Metal Products reporting unit continued to be negatively impacted by a decline in sales volume and due to the downturn in the non-residential construction market. The Company determined that these underlying events and circumstances constituted triggering events for six reporting units where such events would more likely than not reduce the fair value below their respective carrying amounts. Specifically, the Company concluded that its EMEA Security and EMEA Fire reporting units within the ADT Worldwide and Fire Protection Services segments, respectively, Electrical and Metal Products reporting unit within the Electrical and Metal Products segment and ACVS, Life Safety and SRS reporting units within the Safety Products segment experienced triggering events. Based on the underlying events and circumstances described as well as the continued deterioration of the business environment related to the retailer end market of

52

the Company's ADT Worldwide and Safety Products segments the Company determined that certain indefinite-lived intangible assets required impairment testing. As a result of the triggering events, the Company performed long-lived asset, goodwill and intangible asset impairment tests for these reporting units and the Company's Safety Products Sensormatic tradename as well as ADT Worldwide franchise rights relating to Winner and SSC.

        The Company utilizes a discounted cash flow model for determining the fair value of each of the reporting unit's goodwill. Based on the factors described above, actual and anticipated reductions in demand for the reporting unit's products and services as well as increased risk due to current economic uncertainty, the estimates of future cash flows used in the second quarter of 2009 discounted cash flow analyses were revised downward from the Company's most recent test conducted during the fiscal fourth quarter of 2008. The results of the goodwill impairment tests indicated that the implied goodwill amount was less than the carrying amount of goodwill for each of the aforementioned reporting units. The Company recorded an aggregate non-cash impairment charge of $2.6 billion ($2.6 billion after-tax) which was recorded in goodwill and intangible asset impairments in the Company's Consolidated Statement of Operations for the quarter ended March 27, 2009.

        Indefinite-lived intangible assets consisting primarily of trade names are tested for impairment using either a relief from royalty method or excess earnings method. Based on these factors and uncertainties and factors described above, estimates of future cash flows used in determining the fair value of the Company's Safety Products Sensormatic tradename as well as ADT Worldwide franchise rights relating to Winner and SSC during the second quarter of 2009 were revised downward relative to the estimates used in the Company's most recent test during the fourth quarter of 2008. The results of the impairment test indicated that the Safety Products Sensormatic tradename and ADT Worldwide Winner and SSC franchise rights estimated fair values were less than their respective carrying amounts. As such, the Company recorded an aggregate non-cash impairment charge of $64 million ($40 million after-tax) which was recorded in goodwill and intangible asset impairments in the Company's Consolidated Statement of Operations for the quarter ended March 27, 2009.

Legal Settlements

        In the first half of fiscal 2009, the Company settled a number of legal matters stemming from alleged violations of federal securities laws committed by former senior management, including three lawsuits from plaintiffs that had opted out of the June 2007 class action settlement, for an aggregate of approximately $90 million. Pursuant to the Separation and Distribution Agreement, the Company's share of this amount is approximately $24 million, with Covidien and Tyco Electronics responsible for approximately $38 million and $28 million, respectively.

        In light of the settlements in the second quarter and other recent settlement activity, the Company has concluded that its best estimate of probable loss for its unresolved legacy securities matters to be $375 million. Due to the fact that any payments ultimately made in connection with these matters would be subject to the sharing provisions of the Separation and Distribution Agreement, the Company has also recorded receivables from Covidien and Tyco Electronics in the amounts of $158 million and $116 million, respectively. As a result, the Company recorded a charge of $101 million during the quarter ended March 27, 2009 in selling, general, and administrative expenses related to these unresolved matters. Although the Company has reserved its best estimate of probable loss related to unresolved legacy securities claims, their ultimate resolution could differ from the estimate which could have a material adverse effect on the Company's financial position, results of operations or cash flows.

53

Results of Operations:

	For the Quarters Ended						For the Six Months Ended
	March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Revenue from product sales	$	2,518		$	3,108		$	5,286		$	6,204
Service revenue		1,632			1,755			3,290			3,496
Net revenue	$	4,150		$	4,863		$	8,576		$	9,700
Operating (loss) income	$	(2,554	)	$	442		$	(2,141	)	$	935
Interest income		11			25			23			83
Interest expense		(78	)		(115	)		(151	)		(232	)
Other income, net		7			—			11			52
(Loss) income from continuing operations before income taxes and minority interest		(2,614	)		352			(2,258	)		838
Income taxes		60			(79	)		(24	)		(204	)
Minority interest		(1	)		(1	)		(1	)		(2	)
(Loss) income from continuing operations		(2,555	)		272			(2,283	)		632
(Loss) income from discontinued operations, net of income taxes		(12	)		8			(7	)		11
Net (loss) income	$	(2,567	)	$	280		$	(2,290	)	$	643

        Net revenue decreased $713 million, or 14.7%, for the second quarter and $1.1 billion, or 11.6%, for the first six months of 2009 as compared to the same periods last year. The decreases in both periods are primarily driven by changes in foreign currency exchange rates, which negatively affected the quarter and six months ended March 27, 2009 by $494 million and $917 million, respectively. The remaining decrease in revenue was driven primarily by lower volume of steel products in our Electrical and Metal Products segment and weakness in commercial markets, including the retailer end market which negatively impacted our ADT Worldwide and Safety Products segments. Revenues were positively affected by $59 million and $121 million for acquisitions, primarily in our ADT Worldwide segment for the quarter and six months ended March 27, 2009, respectively.

        Operating income decreased $3.0 billion, to an operating loss of $2.6 billion for the quarter ended March 27, 2009. Operating income decreased $3.1 billion, to an operating loss of $2.1 billion for the first six months ended March 27, 2009. The operating loss included an aggregate goodwill impairment charge of $2.6 billion relating to reporting units in Electrical and Metal Products, ADT Worldwide, Fire Protection Services and Safety Products and intangible asset impairment charges of $64 million relating to assets at ADT Worldwide and Safety Products for both the quarter and six months ended March 27, 2009. Additionally, lower volumes primarily in Electrical and Metal Products, ADT Worldwide and Safety Products negatively impacted operating income. The operating loss included legal settlement charges of $102 million as well as restructuring, asset impairment and divestiture charges, net of $106 million for the quarter ended March 27, 2009. The six months ended March 27, 2009 included legacy legal settlement charges of $110 million as well as restructuring, asset impairment and divestiture charges, net of $113 million. Operating income for the quarter ended March 28, 2008 included Separation related credits of $5 million, and restructuring, asset impairment and divestiture charges, net of $43 million. The six months ended March 28, 2008 included Separation related costs of $5 million, and restructuring, asset impairment and divestiture charges, net of $57 million. Changes in foreign currency exchange rates negatively affected operating income by $9 million and positively affected operating income by $57 million for the quarter and six months ended March 27, 2009.

54

Quarter Ended March 27, 2009 Compared to Quarter Ended March 28, 2008

ADT Worldwide

        Net revenue, operating income and operating margin for ADT Worldwide were as follows ($ in millions):

	For the Quarters Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	528		$	635
Service revenue		1,166			1,260
Net revenue	$	1,694		$	1,895
Goodwill and intangible asset impairments	$	635		$	—(1	)
Operating (loss) income		(457	)		220
Operating margin		—	(1)		11.6	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

        Net revenue by geographic area for ADT Worldwide was as follows ($ in millions):

	For the Quarters Ended
	March 27, 2009		March 28, 2008
North America	$	1,027	$	1,031
Europe, Middle East and Africa ("EMEA")		439		581
Rest of World		228		283
	$	1,694	$	1,895

        Net revenue for ADT Worldwide decreased $201 million, or 10.6%, during the quarter ended March 27, 2009, as compared to the quarter ended March 28, 2008. Revenue from product sales decreased 16.9% and service revenue decreased 7.5%. This decrease was primarily driven by the unfavorable impact of changes in foreign currency exchange rates of $192 million. Revenue was positively affected by $55 million for the net impact of acquisitions. Revenue from product sales includes sales and installation of electronic security and other systems. Service revenue is comprised of electronic security services and maintenance, including the monitoring of burglar alarms, fire alarms and other life safety systems as well as services related to retailer anti-theft systems. Approximately 55% of ADT's total net revenue is contractual and is considered recurring revenue. Recurring revenue declined 5.7% during the second quarter of 2009, primarily as a result of changes in foreign exchange rates which unfavorably impacted recurring revenue by 9.7%, while systems installation and service revenue declined 16.0%. Geographically, revenue in EMEA decreased $142 million, or 24.4%, largely as a result of foreign currency exchange rates, which had an unfavorable impact of $106 million. The remaining decrease in EMEA was primarily a result of a decline in systems installation and service revenue due to continued weakness in the commercial market, including the retailer end market primarily across the United Kingdom and continental Europe. Revenue declined $55 million, or 19.4% in the Rest of World geographies, which was primarily due to the unfavorable impact of changes in foreign currency exchange rates of $70 million. Revenue in North America declined slightly, largely as a result of reduced spending in the commercial markets, partially offset by acquisition activity as well as an increase in revenue in our residential business.

        Attrition rates for customers in our ADT Worldwide business increased to an average of 13.6% on a trailing 12-month basis as of March 27, 2009, as compared to 13.2% as of December 26, 2008 and 12.9% as of September 26, 2008. The increased attrition was primarily due to adverse market

55

conditions in the U.S. and United Kingdom commercial businesses partially offset by a slight improvement in the North American residential business.

        Operating income decreased $677 million in the quarter ended March 27, 2009 from the same period in the prior year. Based on the deterioration within the commercial markets including the retailer end market discussed above, the Company recorded a goodwill impairment charge of $613 million related to its ADT EMEA reporting unit and intangible asset impairment charges of $22 million related to certain franchise rights within North America. The decrease was also related to the unfavorable impact of changes in foreign currency exchange rates of $10 million as well as lower sales volume and increased bad debt charges primarily resulting from weakness experienced in the commercial markets including the retailer end market and adverse global economic conditions, respectively. Margins were also negatively impacted by restructuring charges, net of $43 million. The same period in the prior year included restructuring and asset impairment charges of $10 million as well as expenses of $27 million primarily to convert customers from analog to digital signal transmissions in North America. There were no charges related to converting customers to digital signal during the second quarter of fiscal 2009.

Flow Control

        Net revenue, operating income and operating margin for Flow Control were as follows ($ in millions):

	For the Quarters Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	868		$	980
Service revenue		59			44
Net revenue	$	927		$	1,024
Operating income	$	133		$	143
Operating margin		14.3	%		14.0	%

        Net revenue for Flow Control decreased $97 million, or 9.5%, in the quarter ended March 27, 2009 compared to the quarter ended March 28, 2008. The decrease in net revenue was driven by the unfavorable impact of changes in foreign currency exchange rates of $150 million and, to a lesser extent, reduced project activity in the water business primarily in Australia and EMEA. The decrease in revenue was partially offset by an increase in the valves business primarily related to increased project activity in the energy end market in EMEA and Asia. The net impact of acquisitions positively impacted net revenue by $3 million.

        The decrease in operating income of $10 million, or 7.0%, in the quarter ended March 27, 2009, as compared to the same period in the prior year, was primarily due to the unfavorable impact of changes in foreign currency exchange rates of $24 million as well as decreased volume in the water and thermal business offset by margin improvements in the valves business. Margins were negatively impacted by restructuring and divestiture charges of $8 million. There were no restructuring and divestiture charges during the second quarter of 2008.

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Fire Protection Services

        Net revenue, operating income and operating margin for Fire Protection Services were as follows ($ in millions):

	For the Quarters Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	415		$	488
Service revenue		402			444
Net revenue	$	817		$	932
Goodwill and intangible asset impairments	$	180		$	—
Operating (loss) income		(122	)		79
Operating margin		—	(1)		8.5	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

        Net revenue for Fire Protection Services decreased $115 million, or 12.3%, during the quarter ended March 27, 2009 compared to the quarter ended March 28, 2008. This decrease was primarily due to the impact of unfavorable changes in foreign currency exchange rates of $95 million as well as a decline in volume resulting from lower systems installation and upgrade activity in the U.S. and Europe. Revenue from product sales includes sales and installation of fire protection and other systems. Service revenue consists of inspection, maintenance, service and monitoring of fire detection and suppression systems. Geographically, revenue in our international fire businesses decreased by $89 million largely due to the impact of unfavorable changes in foreign currency exchange rates discussed above. Additionally, revenue in our North America SimplexGrinnell business decreased by $26 million primarily due to a decline in systems installation and upgrade activity.

        Operating income decreased $201 million in the quarter ended March 27, 2009 as compared to the same period in the prior year. The Company recorded a goodwill impairment charge of $180 million related to its EMEA Fire reporting unit based on the factors discussed above. The decrease was also driven by restructuring charges of $11 million in the quarter ended March 27, 2009, as compared to restructuring charges, net of $2 million in the prior year. In addition, margins were negatively affected by the sales volume decline discussed above.

Electrical and Metal Products

        Net revenue, operating income and operating margin for Electrical and Metal Products were as follows ($ in millions):

	For the Quarters Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	329		$	541
Service revenue		1			1
Net revenue	$	330		$	542
Goodwill and intangible asset impairments	$	935		$	—
Operating (loss) income		(962	)		72
Operating margin		—	(1)		13.3	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

57

        Net revenue for Electrical and Metal Products decreased $212 million, or 39.1%, in the quarter ended March 27, 2009 compared to the quarter ended March 28, 2008. The decrease in revenue was primarily due to lower volume of both steel and armored cable products largely resulting from a decline in the commercial market in North America. Revenue also decreased due to lower selling prices for armored cable products partially offset by increased selling prices for steel products. Changes in foreign currency exchange rates had an unfavorable impact of $16 million.

        Operating income decreased $1.0 billion in the quarter ended March 27, 2009 as compared to the same period in the prior year. The Company recorded a goodwill impairment charge of $935 million primarily related to a decrease in sales volume. There was no goodwill impairment recorded during the second quarter of 2008. The decrease in operating income also related to volume declines on both steel and armored cable products as well as lower spreads for both steel and armored cable products. The spreads for steel products declined primarily due to increased raw material costs while copper spreads decreased due to lower selling prices. The second quarter of 2009 included restructuring and divestiture charges of $1 million. The same period in the prior year included restructuring and asset impairment charges of $3 million.

Safety Products

        Net revenue, operating income and operating margin for Safety Products were as follows ($ in millions):

	For the Quarters Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	378		$	464
Service revenue		4			5
Net revenue	$	382		$	469
Goodwill and intangible asset impairments	$	955		$	—
Operating (loss) income		(943	)		54
Operating margin		—	(1)		11.5	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

58

        Net revenue for Safety Products decreased $87 million, or 18.6%, during the quarter ended March 27, 2009 as compared to the quarter ended March 28, 2008. This decrease is primarily related to the unfavorable impact of changes in foreign currency exchange rates of $41 million. The remaining decrease is primarily related to our fire suppression business, electronic security and life safety businesses. The decrease in our fire suppression business was primarily due to reduced spending in the commercial construction market. The decrease in the electronic security business was primarily due to the slow down in the retail sector, as retail capital projects and new store openings were canceled or delayed. The life safety business decrease was primarily due to reduced municipal spending.

        Operating income decreased $997 million during the quarter ended March 27, 2009 compared to the same period in the prior year. Goodwill and intangible impairment charges of $955 million were recorded during the second quarter of 2009 as a result of the continued slowdown in the commercial and retail markets. The decline is also attributable to decreased sales volume as discussed above. Operating income also decreased by $6 million due to unfavorable changes in foreign currency exchange rates. Operating margins were negatively impacted by restructuring, restructuring related and asset impairment charges of $29 million for the quarter ended March 27, 2009. The same period in the prior year included restructuring and asset impairment charges of $26 million. Operating margins were also negatively impacted by a charge of $8 million relating to the amount of depreciation and amortization expense that would have been recorded had a business previously classified as held for sale been continuously classified as held and used (see Note 2).

Corporate and Other

        Corporate expense in the quarter ended March 27, 2009 was $77 million higher compared to the same period in the prior year. Reduced corporate spending in the quarter ended March 27, 2009 was more than offset by a charge of $101 million to establish a reserve related to unresolved legacy securities matters (see Note 10). During the second quarter, we agreed to settle two legacy securities matters for $17 million, which was partially offset by a $16 million benefit related to a settlement reached with a former executive. Additionally, corporate expenses for the quarter included $6 million of restructuring and divestiture charges. Corporate expense for the quarter ended March 28, 2008 included net charges of $17 million comprised of a $20 million charge for a legacy legal settlement and $2 million of restructuring charges partially offset by a credit of $5 million for separation costs.

Interest Income and Expense

        Interest income was $11 million and $25 million during the quarters ended March 27, 2009 and March 28, 2008, respectively. The decrease in interest income is primarily related to interest earned on the class action escrow settlement account in the prior year.

        Interest expense was $78 million in the quarter ended March 27, 2009 compared to $115 million in the quarter ended March 28, 2008. The decrease in interest expense is primarily related to interest on the class action liability in the prior year offset by increased interest payments on outstanding debt.

Other Income, Net

        Other income, net was $7 million in the quarter ended March 27, 2009. This amount primarily relates to gains on derivative contracts used to economically hedge the foreign currency risk related to the Swiss Franc denominated dividends. There was no other income, net during the quarter ended March 28, 2008.

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Effective Income Tax Rate

        The effective tax rate for the second quarter of 2009 is not meaningful primarily as a result of the loss driven by goodwill impairment charges of $2.6 billion for which almost no tax benefit is available. Our effective income tax rate was 22.4% during the quarter ended March 28, 2008.

Six Months Ended March 27, 2009 Compared to Six Months Ended March 28, 2008

ADT Worldwide

        Net revenue, operating income and operating margin for ADT Worldwide were as follows ($ in millions):

	For the Six Months Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	1,148		$	1,302
Service revenue		2,338			2,521
Net revenue	$	3,486		$	3,823
Goodwill and intangible asset impairments	$	635		$	—
Operating (loss) income		(226	)		466
Operating margin		—	(1)		12.2	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

        Net revenue by geographic area for ADT Worldwide was as follows ($ in millions):

	For the Six Months Ended
	March 27, 2009		March 28, 2008
North America	$	2,092	$	2,071
Europe, Middle East and Africa ("EMEA")		909		1,184
Rest of World		485		568
	$	3,486	$	3,823

        Net revenue for ADT Worldwide decreased $337 million, or 8.8%, during the six months ended March 27, 2009, as compared to the six months ended March 28, 2008. Revenue from product sales decreased 11.8% and service revenue decreased 7.3%. This decrease was primarily driven by the unfavorable impact of changes in foreign currency exchange rates of $361 million. Revenue was positively affected by $112 million for the net impact of acquisitions. Revenue from product sales includes sales and installation of electronic security and other systems. Service revenue is comprised of electronic security services and maintenance, including the monitoring of burglar alarms, fire alarms and other life safety systems as well as services related to retailer anti-theft systems. Approximately 54% of ADT's total net revenue is contractual and is considered recurring revenue. Recurring revenue declined 5.6% during the six months ended March 27, 2009 while systems installation and service revenue declined 12.1%. Geographically, revenue in North America grew $21 million, or 1.0%, resulting largely from growth in recurring revenue from its residential business as well as acquisition activity, which was partially offset by reduced spending primarily in the commercial markets including the retailer end market. Revenue in EMEA decreased $275 million, or 23.2%, largely as a result of foreign currency exchange rates, which had an unfavorable impact of $196 million. The remaining decrease in EMEA was primarily a result of a decline in systems installation and service revenue due to

60

a slowdown in the commercial markets, including the retailer end market. Revenue declined $83 million, or 14.6%, in the Rest of World geographies, which was due to the unfavorable impact of changes in foreign currency exchange rates of $134 million.

        Attrition rates for customers in our ADT Worldwide business increased to an average of 13.6% on a trailing 12-month basis as of March 27, 2009, as compared to 12.9% as of September 26, 2008 and 12.2% as of March 28, 2008. The increased attrition was primarily due to adverse market conditions in the U.S. and United Kingdom commercial businesses.

        Operating income decreased $692 million, in the six months ended March 27, 2009 from the same period in the prior year. Based on the deterioration within the commercial markets including the retailer end market discussed above, the Company recorded a goodwill impairment charge of $613 million related to its ADT EMEA reporting unit and intangible asset impairment charge of $22 million related to certain franchise rights within North America. The decrease is also related to the unfavorable impact of changes in foreign currency exchange rates of $28 million as well as lower sales volume and increased bad debt charges primarily resulting from weakness in the retail and commercial markets and adverse global economic conditions. Margins were also negatively impacted by restructuring charges, net of $44 million. The same period in the prior year included restructuring and asset impairment charges of $16 million as well as expenses of $51 million primarily to convert customers from analog to digital signal transmissions in North America. There were no charges related to converting customers to digital signal during fiscal 2009.

Flow Control

        Net revenue, operating income and operating margin for Flow Control were as follows ($ in millions):

	For the Six Months Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	1,760		$	2,010
Service revenue		126			88
Net revenue	$	1,886		$	2,098
Operating income	$	270		$	314
Operating margin		14.3	%		15.0	%

        Net revenue for Flow Control decreased $212 million, or 10.1%, in the six months ended March 27, 2009 compared to the quarter ended March 28, 2008. The decrease in net revenue was largely driven by the unfavorable impact of changes in foreign currency exchange rates of $273 million and, to a lesser extent, reduced project activity in the water business in Australia and EMEA. The decrease in revenue was partially offset by an increase in the valves business as a result of increased project activity in the energy end market across all regions as well as growth in the thermal business primarily in North America. The net impact of acquisitions positively affected revenue by $8 million.

        The decrease in operating income of $44 million, or 14.0%, in the six months ended March 27, 2009, as compared to the same period in the prior year, was primarily due to the unfavorable impact of changes in foreign currency exchange rates of $46 million as well as decreased sales volume in the water business. Margins were negatively impacted by restructuring and divestiture charges of $10 million compared to $2 million in the same period of the prior year.

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Fire Protection Services

        Net revenue, operating income and operating margin for Fire Protection Services were as follows ($ in millions):

	For the Six Months Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	852		$	958
Service revenue		816			874
Net revenue	$	1,668		$	1,832
Goodwill and intangible asset impairments	$	180		$	—
Operating (loss) income		(64	)		155
Operating margin		—	(1)		8.5	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

        Net revenue for Fire Protection Services decreased $164 million, or 9.0%, during the six months ended March 27, 2009 compared to the six months ended March 28, 2008. This decrease was primarily the result of the impact of unfavorable charges of foreign currency exchange rates of $177 million. Additionally, revenue declined due to the continued weakness in the commercial market and current global economic environment. Revenue from product sales includes sales and installation of fire protection and other systems. Service revenue consists of inspection, maintenance, service and monitoring of fire detection and suppression systems. Geographically, revenue in our international fire business decreased $148 million primarily as a result of the impact of unfavorable changes in foreign currency exchange rates as discussed above, partially offset by an increase in service work. Additionally, revenue in our North America SimplexGrinnell business decreased by $17 million, primarily due to a decrease in sprinkler contracting.

        Operating income decreased $219 million, or 141.3%, in the six months ended March 27, 2009 as compared to the six months ended in the prior year. The Company recorded a goodwill impairment charge of $180 million related to its EMEA reporting unit based on the deterioration within the commercial markets discussed above. There was no goodwill impairment recorded during the six months ended March 28, 2008. The decrease in operating income was also driven by an increase in selling, general and administrative expenses, primarily related to legal costs. Margins were also negatively impacted by restructuring charges of $11 million compared to $3 million for the same period in the prior year. Additionally, operating income was affected by the decline in sales volume as well as increased bad debt charges, both as a result of the weakness experienced in the commercial markets and current global economic environment. Margins were further negatively impact by the unfavorable impact of changes in foreign currency exchange rates of $4 million.

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Electrical and Metal Products

        Net revenue, operating income and operating margin for Electrical and Metal Products were as follows ($ in millions):

	For the Six Months Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	744		$	1,027
Service revenue		2			2
Net revenue	$	746		$	1,029
Goodwill and intangible asset impairments	$	935		$	—
Operating (loss) income		(935	)		113
Operating margin		—	(1)		11.0	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

        Net revenue for Electrical and Metal Products decreased $283 million, or 27.5%, in the six months ended March 27, 2009 compared to the quarter ended March 28, 2008. The decrease in revenue was primarily due to lower volume of both steel and armored cable products largely resulting from a decline in the commercial market in North America. Revenue also decreased due to lower selling prices for armored cable products partially offset by increased selling prices for steel products. Changes in foreign currency exchange rates had an unfavorable impact of $32 million.

        Operating income decreased $1.0 billion in the six months ended March 27, 2009 as compared to the same period in the prior year. Based on the sales volume decrease as well as the significant decline in the price of steel, the Company recorded a goodwill impairment charge of $935 million. There was no goodwill impairment recorded during the six months ended March 28, 2008. Changes in foreign currency exchange rates had a favorable impact of $101 million. The decrease in operating income also related to volume declines on both steel and armored cable products as well as lower spreads for steel products, partially offset by higher spreads for armored cable products. Spreads for steel products continued to decline as a direct result of higher raw material costs. In addition, results for the six months ended March 27, 2009 included restructuring and divestiture charges of $3 million. The same period in the prior year included restructuring and asset impairment charges of $7 million.

Safety Products

        Net revenue, operating income and operating margin for Safety Products were as follows ($ in millions):

	For the Six Months Ended
	March 27, 2009			March 28, 2008
Revenue from product sales	$	782		$	907
Service revenue		8			9
Net revenue	$	790		$	916
Goodwill and intangible asset impairments	$	955		$	—
Operating (loss) income		(869	)		140
Operating margin		—	(1)		15.3	%

⁽¹⁾

Certain operating margins have not been presented as management believes such calculations are not meaningful.

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        Net revenue for Safety Products decreased $126 million, or 13.8%, during the six months ended March 27, 2009 as compared to the six months ended March 28, 2008. This decrease is primarily related to the unfavorable impact of changes in foreign currency exchange rates of $74 million. The remaining decrease primarily related to our fire suppression business, electronic security and life safety businesses. The decrease in our fire suppression business was primarily due to reduced spending in the commercial construction market. The decrease in the electronic security business was primarily due to the slow down in the retail sector, partially offset by a slight increase in our intrusion business as a result of new product introductions. The decrease in the life safety business was primarily due to reduced municipal spending.

        Operating income decreased $1.0 billion during the six months ended March 27, 2009 compared to the same period in the prior year. The decline is primarily attributable to goodwill and intangible impairment charges of $955 million recorded during the six months ended March 27, 2009 as a result of the continued slowdown in the commercial and retail markets. As discussed above, decreased sales volume, specifically within the fire suppression, electronic security and life safety businesses, also negatively impacted operating income. Operating income also decreased by $12 million due to unfavorable changes in foreign currency exchange rates. Margins were negatively impacted by restructuring, restructuring related and asset impairment charges of $30 million during the six months ended March 27, 2009. The same period in the prior year included $27 million of restructuring and asset impairment charges. Operating margins were also negatively impacted by a charge of $8 million relating to the amount of depreciation and amortization expense that would have been recorded had a business that was previously classified as held for sale been continuously classified as held and used (see Note 2).

Corporate and Other

        Corporate expense in the six months ended March 27, 2009 was $64 million higher compared to the same period in the prior year. Corporate expense for the six months ended March 27, 2009 included a charge of $101 million to establish a reserve related to unresolved legacy securities matters (see Note 10). During the six months ended March 27, 2009, we agreed to settle legacy securities matters totaling $25 million, which was partially offset by a $16 million benefit related to a settlement reached with a former executive. Additionally, corporate expenses for the six months included $8 million of restructuring and divestiture charges. Corporate expense for the six months ended March 28, 2008 included net charges of $27 million, comprised of a $20 million charge for a legacy legal settlement, $2 million of restructuring charges and $5 million for separation costs.

Interest Income and Expense

        Interest income was $23 million and $83 million during the six months ended March 27, 2009 and March 28, 2008, respectively. The decrease in interest income is primarily related to interest earned on the class action escrow settlement account in the prior year.

        Interest expense was $151 million in the six months ended March 27, 2009 compared to $232 million for the six months ended March 28, 2008. The decrease in interest expense is primarily related to interest on the class action liability in the prior year.

Other Income, Net

        Other income, net was $11 million for the six months ended March 27, 2009 compared to $52 million during the six months ended March 28, 2008. This amount primarily relates to gains on derivative contracts used to economically hedge the foreign currency risk related to the Swiss Franc denominated dividends. Other income, net during the six months ended March 28, 2008, includes $40 million recorded in connection with the adoption of FIN No. 48 with a corresponding increase to

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the receivable from Covidien and Tyco Electronics under the Tax Sharing Agreement. In addition, $10 million for other activity was recorded in the first six months of 2008 in accordance with the Tax Sharing Agreement in other income, net.

Effective Income Tax Rate

        The effective tax rate for the six months ended March 27, 2009 is not meaningful primarily as a result of the loss driven by goodwill impairment charges of $2.6 billion, for which almost no tax benefit is available. Our effective income tax rate was 24.3% for the six months ended March 28, 2008.

Tax Sharing Agreement

        In connection with the spin-offs of Covidien and Tyco Electronics from Tyco, Tyco entered into a Tax Sharing Agreement that generally governs Covidien's, Tyco Electronics' and Tyco's respective rights, responsibilities, and obligations after the distribution with respect to taxes, including ordinary course of business taxes and taxes, if any, that may be incurred as a result of any failure of the distribution of all of the shares of Covidien or Tyco Electronics to qualify as a tax-free distribution for U.S. federal income tax purposes within the meaning of Section 355 of the Code or certain internal transactions undertaken in anticipation of the spin-offs to qualify for tax-favored treatment under the Code.

        Under the Tax Sharing Agreement, the Company shares responsibility for certain of Tyco's, Covidien's and Tyco Electronics' income tax liabilities based on a sharing formula for periods prior to and including June 29, 2007. More specifically, Tyco, Covidien and Tyco Electronics share 27%, 42% and 31%, respectively, of shared income tax liabilities that arise from adjustments made by tax authorities to Tyco's, Covidien's and Tyco Electronics' U.S. and certain non-U.S. income tax returns. All costs and expenses associated with the management of these shared tax liabilities are shared equally among the parties. At March 27, 2009 and September 26, 2008, Tyco has recorded a net receivable from Covidien and Tyco Electronics of $123 million and $126 million, respectively, of which $122 million and $113 million, respectively, are included in other noncurrent assets and $1 million and $13 million, respectively, are included in prepaid expenses and other current assets as the Company's estimate of its Tax Sharing obligations. Other liabilities include $554 million at both March 27, 2009 and September 26, 2008 for the fair value of Tyco's obligations under the Tax Sharing Agreement, determined in accordance with FIN 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." Tyco assesses the shared tax liabilities and related FIN 45 liability at each reporting period. The receivable and liability were initially recognized with an offset to shareholders' equity in 2007. In the first quarter of 2008, in connection with the adoption of FIN 48 "Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109," and the related increase in uncertain tax positions for shared tax liabilities under the Tax Sharing Agreement, Tyco increased its receivable from Covidien and Tyco Electronics under the Tax Sharing Agreement with a corresponding increase to other income, net by $40 million ($0.08 for both basic and diluted earnings per share). In addition, during the quarter ended March 27, 2009, $1 million of income for other activity was recorded in accordance with the Tax Sharing Agreement. During the quarter ended March 28, 2008 there was no income for other activity recorded. During the six months ended March 27, 2009 and March 28, 2008, $5 million and $10 million, respectively, of income for other activity was recorded in accordance with the Tax Sharing Agreement.

        Tyco will provide payment under the Tax Sharing Agreement as the shared income tax liabilities are settled. Settlement is expected to occur as the audit process by local taxing authorities is completed for the impacted years. Given the nature of the shared liabilities, the maximum amount of potential future payments is not determinable.

        In the event the Separation is determined to be taxable and such determination was the result of actions taken after the Separation by Tyco, Covidien or Tyco Electronics, the party responsible for such failure would be responsible for all taxes imposed on each company as a result thereof. If such

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determination is not the result of actions taken by any of the three companies after the Separation, then Tyco, Covidien and Tyco Electronics would be responsible for 27%, 42% and 31%, respectively, of any taxes imposed on any of the companies as a result of such determination. Such tax amounts could be significant. The Company is responsible for all of its own taxes that are not shared pursuant to the Tax Sharing Agreement's sharing formula. In addition, Covidien and Tyco Electronics are responsible for their tax liabilities that are not subject to the Tax Sharing Agreement's sharing formula.

        If any party to the Tax Sharing Agreement were to default in its obligation to another party to pay its share of the distribution taxes that arise as a result of no party's fault, each non-defaulting party would be required to pay, equally with any other non-defaulting party, the amounts in default. In addition, if another party to the Tax Sharing Agreement that is responsible for all or a portion of an income tax liability were to default in its payment of such liability to a taxing authority, the Company could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, the Company may be obligated to pay amounts in excess of its agreed-upon share of Tyco's, Covidien's and Tyco Electronics' tax liabilities. See Note 17 to the Consolidated Financial Statements for further discussion of guarantees and indemnifications extended between Tyco, Covidien and Tyco Electronics.

Other Income Tax Matters

        The Company and its subsidiaries' income tax returns periodically are examined by various tax authorities. In connection with these examinations, tax authorities, including the Internal Revenue Service ("IRS"), have raised issues and proposed tax adjustments. The Company is reviewing and contesting certain of the proposed tax adjustments. Management has assessed the issues related to these adjustments for recognition and measurement under FIN 48 and has recorded unrecognized tax benefits in accordance with FIN 48. The ultimate resolution of these matters is uncertain and could result in a material impact to the Company's financial position, results of operations, cash flows or the effective tax rate in future reporting periods.

        In 2004, in connection with the IRS audit of the 1997 through 2000 years, the Company submitted to the IRS proposed adjustments to certain prior period U.S. federal income tax returns resulting in a reduction in the taxable income previously filed. During 2006, the IRS accepted substantially all of the proposed adjustments, and the Company developed proposed amendments to U.S. federal income tax returns for additional periods through 2002. On the basis of previously accepted amendments, the Company has determined that these adjustments will more-likely-than-not be accepted and, accordingly, has recorded them in the Consolidated Financial Statements. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows.

        Additionally, during 2008 the Company completed proposed amendments to its U.S. federal income tax returns for periods subsequent to 2002, which primarily reflect the roll forward through 2006 of the amendments for the periods 1997 to 2002. Such adjustments did not have a material impact on the Company's financial condition, results of operations or cash flows. While the final adjustments cannot be determined until the income tax return amendment process and the IRS review is completed, the Company believes that any resulting adjustments will not have a material impact on its financial condition, results of operations or cash flows.

        During the third quarter of 2007, the IRS concluded its field examination of certain of the Company's U.S. federal income tax returns for the years 1997 though 2000 and issued Revenue Agents' Reports ("RARs") that reflect the IRS' determination of proposed tax adjustments for the periods under audit. The RAR's propose tax audit adjustments to certain of the Company's previously filed tax return positions. The Company agreed with the IRS on adjustments totaling $498 million, with an estimated cash impact to the Company of $458 million, and during the third quarter of 2007, the Company paid $458 million, of which $163 million related to the Company's discontinued operations.

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The Company appealed other proposed tax audit adjustments totaling approximately $1 billion relating to Tyco, Covidien and Tyco Electronics, and, as Audit Managing Party as specified in the Tax Sharing Agreement, the Company intends to vigorously defend its prior filed tax return positions.

        During the second quarter of 2008, the IRS issued additional RARs asserting a withholding tax liability of approximately $106 million associated with the prior proposed tax adjustments related to Tyco, Covidien and Tyco Electronics for the 1997 to 2000 period. The withholding tax amount asserted against Tyco is immaterial. During the first quarter of fiscal 2009, the Company reached an informal agreement with the IRS appeals team to work towards timely resolution of all unagreed issues related to this time period. The Company, as Audit Managing Party as specified in the Tax Sharing Agreement, intends to vigorously defend its prior filed tax return positions and determined that no adjustment is required to the Company's guarantees and indemnifications liability recorded in conjunction with the Tax Sharing Agreement as discussed in "Guarantees" within Management's Discussion and Analysis of Financial Condition and Results of Operations. Additionally, the IRS is auditing the prior tax returns of the Company, which include legal entities of Tyco, Covidien and Tyco Electronics for the 2001 to 2004 period.

        The IRS proposed civil fraud penalties against a subsidiary that was distributed to Tyco Electronics in connection with the Separation. The penalties allegedly arise from actions of former executives taken in connection with intercompany transfers of stock of Simplex Technologies in 1998 and 1999. Based on statutory guidelines, we estimate the proposed penalties could range between $30 million and $50 million. The Company, as Audit Managing Party as specified in the Tax Sharing Agreement, will vigorously oppose the assertion of any such penalties against Tyco Electronics, in part, because beginning in 2003 the Company discovered, investigated and reported the conduct at issue to the IRS and fully cooperated in the criminal prosecution of the Company's former Chief Tax Officer on a charge of willful filing of a false tax return. This is a pre-Separation shared tax matter under the Tax Sharing Agreement.

        Except for earnings that are currently distributed, no additional material provision has been made for U.S. or non-U.S. income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such earnings. A liability could arise if amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries.

Divestitures

        During the quarter, the Company continued to assess the strategic fit of its various businesses and has pursued divestiture of certain businesses which do not align with its long-term strategy.

Held for Sale and Reflected as Continuing Operations

        During the third quarter of 2008, the Company approved a plan to sell a business in its Safety Products segment. This business had been classified as held for sale in the Company's historical Consolidated Balance Sheet in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". During the second quarter of 2009, due to a change in strategy by management, the Company decided not to sell the business. As a result, the business no longer satisfied the requirements to be classified as held for sale in the Company's Consolidated Balance Sheet at March 27, 2009. Accordingly, the Consolidated Balance Sheet at September 26, 2008 was recast to reclassify the business from held for sale to held and used. The Company measured the business at the lower of its (i) carrying amount before it was classified as held for sale, adjusted for depreciation and

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amortization expense that would have been recognized had the business been continuously classified as held and used, or (ii) fair value at the date the decision not to sell was made. The Company recorded a charge of $8 million in the second quarter of 2009 relating to the amount of depreciation and amortization expense that would have been recorded had the asset been continuously classified as held and used.

Discontinued Operations

        As previously reported in Tyco's periodic filings, in July 2008, the Company substantially completed the sale of its Infrastructure Services business, which met the criteria to be presented as discontinued operations. In order to complete the sale of Earth Tech Brasil Ltda. ("ET Brasil") and Earth Tech UK businesses and certain assets in China, the Company is required to obtain consents and approvals to transfer the legal ownership of the businesses and assets. On January 22, 2009 the Company received the necessary consents and approvals to transfer the legal ownership of its ET Brasil business to Corioca Christiani-Nielsen Engenharia S.A. and received cash proceeds of approximately $13 million. On February 27, 2009 the Company received the necessary consents to transfer certain of the China assets and received cash proceeds of $18 million. At March 27, 2009, the necessary consents and approvals for Earth Tech UK and the remaining assets in China had not been obtained by the Company. The Company expects to obtain the necessary consents and approvals during fiscal year 2009. At March 27, 2009, the Company has assessed and determined that the carrying value of the remaining assets are recoverable based on current fair value, less cost to sell. The Company will continue to assess recoverability until the remaining assets are sold.

        During February 2008, the Company executed a definitive agreement to sell Ancon Building Products ("Ancon"), a manufacturer of stainless steel products used in masonry construction. Ancon was part of the Company's Corporate and Other segment. The sale was completed in April 2008 for $164 million in net cash proceeds and a pre-tax gain of $100 million was recorded, which was largely exempt from tax. During the fourth quarter of 2008, the Company received an additional $6 million of proceeds related to the sale of Ancon. The gain was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

        During February 2008, the Company sold Nippon Dry-Chemical Co., Ltd. ("NDC"), one of the leading companies in the Japanese fire protection industry. The sale was completed for $50 million in net cash proceeds and a pre-tax gain of $7 million was recorded. The gain was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

        In January 2008, the Company sold a European manufacturer of public address products and acoustic systems, which was part of the Company's Fire Protection Services, segment and recorded an $8 million pre-tax loss on sale. The loss was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

        During fiscal year 2007, Tyco completed the spin-offs of its Healthcare and Electronics businesses (the "Separation"). The Company has used available information to develop its best estimates for certain assets and liabilities related to the Separation. In limited instances, final determination of the balances will be made in subsequent periods. During the three months and six months ended March 28, 2008, $3 million and $18 million, respectively, was recorded as a reduction to shareholders' equity, primarily related to adjustments to certain pre-Separation tax liabilities. During the quarter and six months ended March 27, 2009, $0 million and $4 million, respectively, of other items was recorded as an increase to shareholders' equity. Adjustments in the future for the impact of filing final income tax returns in certain jurisdictions where those returns include a combination of Tyco, Covidien and/or Tyco Electronics legal entities and for certain amended income tax returns for the periods prior to the

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Separation may be recorded to either shareholders' equity or the statement of income depending on the specific item giving rise to the adjustment.

Acquisitions

        During the quarter and six months ended March 27, 2009, cash paid for acquisitions included in continuing operations totaled $3 million and $49 million, respectively, which primarily related to the acquisition of Vue Technology, Inc., a provider of radio frequency identification (RFID) technology, for $43 million by the Company's Safety Products segment.

        During the quarter and six months ended March 28, 2008, cash paid for acquisitions included in continuing operations totaled $5 million and $27 million, respectively, and were primarily within the Company's Safety Products and Flow Control segments.

Critical Accounting Policies and Estimates

        The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. We believe that our accounting policies for depreciation and amortization methods of security monitoring-related assets, revenue recognition, loss contingencies, income taxes, goodwill and indefinite-lived intangible assets (see Note 7), long-lived assets and pension and postretirement benefits are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. During the six months ended March 27, 2009, there were no significant changes to these policies or in the underlying accounting assumptions and estimates used in the above critical accounting policies from those disclosed in the Consolidated Financial Statements and accompanying notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 26, 2008 (the "2008 Form 10-K"). See Note 9 for the adoption of Statement of Financial Accounting Standards ("SFAS") No. 161 and SFAS No. 157 and Note 11 for the adoption of the measurement provision of SFAS No. 158.

Change of Domicile

        Effective March 17, 2009, the Company discontinued its existence as a Bermuda corporation as provided in Section 132G of The Companies Act 1981 of Bermuda and, in accordance with article 161 of the Swiss Federal Code on International Private Law, continued its existence as a Swiss corporation under articles 620 et seq. of the Swiss Federal Code on Obligations (the "Change of Domicile"). The rights of holders of the Company's common shares are now governed by Swiss law, the Company's Swiss articles of association and its Swiss organizational regulations. The articles of association and organizational regulations were included as exhibits to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on March 17, 2009. We believe the Change of Domicile will produce important economic and operational benefits for Tyco and will help ensure our continued competitiveness in global markets by, among other things, allowing us to take advantage of Switzerland's well-established and long-standing network of commercial and tax treaties and improving our ability to maintain a competitive worldwide effective corporate tax rate. We do not expect that the Change of Domicile will have a material impact on how we conduct our day-to-day operations or on the Company's financial position, results of operations or cash flows.

Liquidity and Capital Resources

        On January 9, 2009, TIFSA issued $750 million aggregate principle amount of 8.5% notes due on January 15, 2019, which are fully and unconditionally guaranteed by the Company (the "2019 Notes"). Additionally, the holders of the 2019 Notes have the right to require TIFSA to repurchase all or a

69

portion of the 2019 Notes on July 15, 2014 at a purchase price equal to 100% of the principal amount of the notes tendered, plus accrued and unpaid interest. Otherwise, the notes mature on January 15, 2019. TIFSA received net proceeds of approximately $745 million after underwriting discounts and offering expenses. The net proceeds may be used for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital, repurchase of common shares, capital expenditures and investments in the Company's subsidiaries.

        In January 2009, TIFSA made a payment of $215 million to extinguish all of its 6.125% notes due 2009. Additionally, in November 2008, TIFSA made a payment of $300 million to extinguish all of its 6.125% notes due 2008.

        On September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman") filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York. Lehman was one of the lenders in our $1.25 billion revolving credit facility with a commitment of $60 million. Our $500 million credit facility maturing on June 24, 2011 did not have a commitment from Lehman.

        On December 26, 2008, Lehman relinquished all of its rights and obligations as a lender under the $1.25 billion credit facility. At that time, Lehman assigned all of its commitment under the facility to TIFSA. As a result, the aggregate available commitment under the facility was reduced by the assigned amount. As of March 27, 2009, the aggregate available commitment under our senior revolving credit facilities was $1.69 billion, $200 million of which was dedicated to backstop all of our commercial paper outstanding as of such date. The Company continually monitors developments regarding the availability of funds under its revolving credit facilities. Although there is some risk that financial institutions will fail to perform their contractual obligations, particularly in times of credit market distress, we believe that the lenders under our revolving credit facilities are capable of meeting any borrowing requests we may make for the foreseeable future.

        As of March 27, 2009, we had $200 million of commercial paper outstanding and we continue to experience increased availability within the commercial paper markets. Our multi-year revolving credit facilities serve as a backstop to our commercial paper program. It is our intention to fund future maturities of commercial paper through new commercial paper issuances or borrowings from our credit facilities.

        On January 29, 2009, we repaid the entire outstanding balance of $686 million on our revolving credit facilities. As of March 27, 2009, there were no amounts drawn under our revolving credit facilities. Approximately $1.69 billion remained available to us at March 27, 2009 net of $200 million of which was dedicated to backstop all of our commercial paper outstanding as of such date.

        In addition to our available cash and operating cash flows, additional sources of potential liquidity include committed credit lines, our commercial paper program, public debt and equity markets as well as the ability to sell trade accounts receivable. We continue to balance our operating, investing and financing uses of cash through investment in our existing core businesses, strategic acquisitions and divestitures, dividends and share repurchases.

        As a result of declines experienced in the global financial markets, our pension funds have and may continue to experience a negative return which will result in an increase in pension costs in fiscal year 2010. We will continue to monitor market conditions and assess the impact, if any, on our financial position, results of operations or cash flows. Approximately 100% of our U.S. and more than 95% of our non-U.S. funded pension plans are invested in marketable investments, including publicly-traded equity and fixed income securities. While our pension funds have experienced declines in value, we currently do not believe we will be required to make unplanned mandatory cash contributions in fiscal 2009 in accordance with applicable legal requirements such as the Pension Protection Act in the U.S. and other local statutory law.

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        The sources of our cash flow from operating activities and the use of a portion of that cash in our operations were as follows ($ in millions):

	For the Quarters Ended						For the Six Months Ended
	March 27, 2009			March 28, 2008			March 27, 2009			March 28, 2008
Cash flows from operating activities:
Operating (loss) income	$	(2,554	)	$	442		$	(2,141	)	$	935
Goodwill and intangible asset impairments		2,705			—			2,705			—
Depreciation and amortization(1)		284			290			559			566
Non-cash compensation expense		23			22			52			57
Deferred income taxes		(165	)		(49	)		(182	)		(105	)
Provision for losses on accounts receivable and inventory		35			31			69			61
Other, net		24			29			46			93
Class action settlement liability		—			(3,020	)		—			(3,020	)
Net change in working capital		381			(43	)		(174	)		(854	)
Interest income		11			25			23			83
Interest expense		(78	)		(115	)		(151	)		(232	)
Income tax expense		60			(79	)		(24	)		(204	)
Net cash provided by (used in) operating activities	$	726		$	(2,467	)	$	782		$	(2,620	)
Other cash flow items:
Capital expenditures, net(2)	$	(170	)	$	(176	)	$	(327	)	$	(345	)
Decrease in the sale of accounts receivable		7			5			10			10
Accounts purchased from ADT dealer program		(114	)		(97	)		(231	)		(187	)
Purchase accounting and holdback liabilities		(1	)		(1	)		(1	)		(2	)
Voluntary pension contributions		6			1			6			1

⁽¹⁾

The quarters ended March 27, 2009 and March 28, 2008 included depreciation expense of $155 million and $152 million, respectively, and amortization of intangible assets of $129 million and $138 million, respectively. The six months ended March 27, 2009 and March 28, 2008 included depreciation expense of $303 million and $303 million, respectively, and amortization of intangible assets of $256 million and $263 million, respectively.

⁽²⁾

Included net proceeds received for the sale/disposition of property, plant and equipment of $2 million and $3 million for the quarters ended March 27, 2009 and March 28, 2008, respectively, as well as $4 million and $10 million for the six months ended March 27, 2009 and March 28, 2008, respectively.

        The net change in working capital increased operating cash flow by $381 million in the quarter ended March 27, 2009. The significant changes in working capital included a $490 million increase in accrued and other current liabilities, a $172 million decrease in inventory, a $149 million decrease in accounts receivable, offset by a $300 million increase in prepaid expenses and other current assets, as well as a $201 million decrease in accounts payable.

        The net change in working capital decreased operating cash flow by $174 million in the six months ended March 27, 2009. The components of this change are set forth in detail in the Consolidated Statements of Cash Flows. The significant changes in working capital included a $376 million decrease in accounts payable, a $287 million increase in prepaid expenses and other current assets, offset by a $190 million increase in accrued and other current liabilities as well as a $162 million decrease in accounts receivable.

        During the six months ended March 27, 2009, we purchased approximately 222,000 customer contracts for electronic security services through the ADT dealer program for cash of $231 million.

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        During the six months ended March 27, 2009, we completed the sale of some of our remaining Infrastructure Services businesses for $30 million in net cash proceeds. The majority of these businesses were sold in fiscal 2008.

        We continue to fund capital expenditures to grow our business, improve the cost structure of our businesses, to invest in new processes and technology, and to maintain high quality production standards. The level of capital expenditures in fiscal year 2009 is expected to exceed the spending levels in fiscal year 2008 and is also expected to exceed depreciation.

        During the quarter and six months ended March 27, 2009, we paid approximately $37 million and $57 million, respectively, in cash related to restructuring activities. We have identified additional opportunities for cost savings through restructuring activities in fiscal 2009 and expect to incur restructuring and restructuring related charges of approximately $200 million. See Note 3 to our Consolidated Financial Statements for further information regarding our restructuring activities.

        Income taxes paid, net of refunds, related to continuing operations was $103 million and $176 million during the quarter and six months ended March 27, 2009 and $113 million and $275 million during the quarter and six months ended March 28, 2008.

        As previously discussed, effective June 29, 2007, we completed the Separation. During the quarter and six months ended March 28, 2008, we paid $18 million and $64 million, respectively, in Separation costs. All of these cash payments in the quarter ended March 28, 2008 were included in cash flows from operations and $36 million of the cash payments made during the six months ended March 28, 2008 were included in cash flows from discontinued operating activities.

        During the quarter ended March 28, 2008, Tyco released $2,960 million of funds placed in escrow during the third quarter of 2007 as well as $60 million of interest earned on those funds for the benefit of the class as stipulated in the Court's final order to the class action settlement.

        We will continue to divest businesses that do not align with our overall strategy. We plan to use the expected proceeds from these sales, as well as the cash generated by our operations, to continue to make investments in our businesses that are intended to grow revenue and improve productivity, including our restructuring actions. We expect to also use cash to selectively pursue acquisitions. Additionally, we expect to continue to return any excess cash to our shareholders through share repurchases and dividend payments.

        Pursuant to our share repurchase program, we may repurchase Tyco shares from time to time in open market purchases at prevailing market prices, in negotiated transactions off the market, or pursuant to an approved 10b5-1 trading plan in accordance with applicable regulations.

        Management believes that cash generated by or available to Tyco should be sufficient to fund our capital and liquidity needs for the foreseeable future, including quarterly dividend payments. We intend to continue to repurchase shares under our existing $1.0 billion share repurchase program approved by our Board of Directors on July 10, 2008 depending on credit market conditions, macroeconomic factors and expectations regarding future cash flows.

Capitalization

        Shareholders' equity was $11.9 billion, or $25.12 per share, at March 27, 2009, compared to $15.5 billion, or $32.76 per share, at September 26, 2008. Shareholders' equity decreased primarily due to a net loss of $2.3 billion, unfavorable changes in foreign currency exchange rates of $951 million and dividends declared of $472 million.

        Total debt was $4.2 billion at March 27, 2009, as compared to $4.3 billion at September 26, 2008. Total debt as a percentage of total capitalization (total debt and shareholders' equity) was 26% and 22% at March 27, 2009 and September 26, 2008, respectively.

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        Our cash balance decreased to $1.4 billion at March 27, 2009, as compared to $1.5 billion at September 26, 2008. The decrease in cash was primarily due to capital expenditures, accounts purchased from the ADT dealer program, dividends paid and acquisition of businesses. This decrease was partially offset by cash generated by the operating segments.

        Dividend payments were $189 million in the first six months of 2009 and $148 million in the first six months of 2008. In March 2009, shareholders approved a dividend of CHF 0.93 per share, to be made in the form of a capital reduction and paid in quarterly payments through March 2010. As of March 12, 2009, the aggregate U.S. dollar equivalent of this dividend was approximately $377 million based on the exchange rate in effect on that date. The timing, declaration and payment of future dividends to holders of our common shares will depend upon many factors, including our financial condition and results of operations, the capital requirements of our businesses, industry practice and other relevant factors. Future dividends will be proposed by our Board of Directors and require shareholder approval.

        In May 2008, TIFSA commenced issuing commercial paper to U.S. institutional accredited investors and qualified institutional buyers. Borrowings under the commercial paper program are available for general corporate purposes. As of March 27, 2009, TIFSA had $200 million of commercial paper outstanding bearing interest at an average rate of 1.14%.

        On June 24, 2008, Tyco and TIFSA entered into a $500 million senior unsecured revolving credit agreement with Citibank, N.A., as administrative agent for the lenders party thereto. This credit agreement has a three-year term. Borrowings under this agreement have a variable interest rate based on LIBOR or an alternate base rate. The margin over LIBOR can vary based on changes in our credit rating and facility utilization. Together with the existing $1.25 billion five-year senior revolving credit agreement, dated as of April 25, 2007, our total committed revolving credit line was $1.75 billion. These amounts were subsequently reduced by $60 million related to Lehman's assignment of its commitments under the aforementioned $1.25 billion credit facility. These revolving credit facilities may be used for working capital, capital expenditures and general corporate purposes. As of March 27, 2009, there were no amounts drawn under these unsecured revolving credit facilities.

        TIFSA's bank credit agreements contain customary terms and conditions, and financial covenants that limit the ratio of our debt to our earnings before interest, taxes, depreciation, and amortization and that limit our ability to incur subsidiary debt or grant liens on our property. Our indentures contain customary covenants including limits on negative pledges, subsidiary debt and sale/leaseback transactions and change-of-control provisions. None of these covenants are considered restrictive to our business. We are in compliance with all of our debt covenants.

        The following table details our long-term and short-term debt ratings at March 27, 2009 and September 26, 2008:

	Short-Term Debt Ratings		Long Term Debt Ratings
Moody's		P-2	Baa1
Standard & Poor's		A-2	BBB+
Fitch		F2	BBB+

The security ratings set forth above are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal by the assigning rating organization. Each rating should be evaluated independently of any other rating.

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Commitments and Contingencies

        For a detailed discussion of contingencies related to our litigation matters and governmental investigations related to us, see Note 10 to our Consolidated Financial Statements.

Backlog

        At March 27, 2009 Tyco had a backlog of unfilled orders of $8.8 billion, compared to a backlog of $9.7 billion at September 26, 2008. Backlog by segment was as follows ($ in millions):

	March 27, 2009		September 26, 2008
ADT Worldwide	$	5,729	$	6,036
Flow Control		1,692		2,083
Fire Protection Services		1,211		1,314
Electrical and Metal Products		66		117
Safety Products		126		154
	$	8,824	$	9,704

        Backlog decreased by $880 million, or 9.1%, from $9.7 billion at September 26, 2008 to $8.8 billion at March 27, 2009. The decrease in backlog was primarily due to unfavorable changes in foreign currency exchange rates of $581 million. ADT Worldwide's backlog decreased by $307 million, or 5.1%, from $6.0 billion at September 26, 2008. The decrease was primarily due to unfavorable exchange rates of $325 million and decreased bookings of $76 million, which were partially offset by $94 million net increase in recurring revenue-in-force primarily the result of new customers. ADT Worldwide's total account base grew 1.4% during the six months ended March 27, 2009 to 7.3 million accounts. Recurring revenue-in-force represents 12 months' fees for monitoring and maintenance services under contract in the security business. Flow Control's backlog decreased by $391 million primarily due to decreased bookings of $239 million and unfavorable exchange rates of $152 million. Fire Protection Services backlog decreased by $102 million primarily due to unfavorable exchange rates of $90 million and decreased bookings of $12 million.

Off-Balance Sheet Arrangements

Sale of Accounts Receivable

        Certain of Tyco's International businesses utilize the sale of accounts receivable as short-term financing mechanisms. The aggregate amount outstanding under the Company's international accounts receivable programs was $53 million and $65 million at March 27, 2009 and September 26, 2008, respectively.

Guarantees

        Certain of the Company's business segments have guaranteed the performance of third-parties and provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current fiscal year through the completion of such transactions. The guarantees would typically be triggered in the event of nonperformance, and we believe the performance under the guarantees, if required, would not have a material effect on the Company's financial position, results of operations or cash flows.

        There are certain guarantees or indemnifications extended among Tyco, Covidien and Tyco Electronics in accordance with the terms of the Separation and Distribution Agreement and the Tax Sharing Agreement. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. At the time of the Separation, Tyco recorded a liability necessary to recognize

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the fair value of such guarantees and indemnifications in accordance with FIN No. 45. In the absence of observable transactions for identical or similar guarantees, the Company determined the fair value of these guarantees and indemnifications utilizing expected present value measurement techniques. Significant assumptions utilized to determine fair value included determining a range of potential outcomes, assigning a probability weighting to each potential outcome and estimating the anticipated timing of resolution. The probability weighted outcomes were discounted using the Company's incremental borrowing rate. The liability necessary to reflect the fair value of the guarantees and indemnifications under the Tax Sharing Agreement is $554 million, which is included in other liabilities on our Consolidated Balance Sheet at March 27, 2009 and September 26, 2008, respectively. The guarantees primarily relate to certain contingent tax liabilities included in the Tax Sharing Agreement. See Note 5 to the Consolidated Financial Statements for further discussion of the Tax Sharing Agreement.

        In addition, Tyco historically provided support in the form of financial and/or performance guarantees to various Covidien and Tyco Electronics operating entities. In connection with the Separation, the Company worked with the guarantee counterparties to cancel or assign these guarantees to Covidien or Tyco Electronics. To the extent these guarantees were not assigned prior to the Separation date, Tyco assumed primary liability on any remaining such support. The estimated fair value of these obligations is $7 million, which is included in other liabilities on the Company's Consolidated Balance Sheets, and were recorded in accordance with FIN No. 45 with an offset to shareholders' equity on the Separation date.

        In disposing of assets or businesses, the Company often provides representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's financial position, results of operations or cash flows.

        The Company has recorded liabilities for known indemnifications included as part of environmental liabilities. See Note 10 to the Consolidated Financial Statements for further discussion of environmental liabilities.

        In the normal course of business, the Company is liable for contract completion and product performance. In the opinion of management, such obligations will not significantly affect the Company's financial position, results of operations or cash flows.

        The Company records estimated product warranty costs at the time of sale. For further information on estimated product warranty, see Note 16 to the Consolidated Financial Statements.

        In 2001, a division of Safety Products initiated a VRP associated with the acquisition of Central Sprinkler. The VRP relates to the replacement of certain O-ring seal sprinkler heads which were originally manufactured by Central Sprinkler prior to Tyco's acquisition. Under this program, the sprinkler heads are being replaced free of charge to property owners. On May 1, 2007, the Consumer Product Safety Commission and the Company announced an August 31, 2007 deadline for filing claims to participate in the VRP. The Company will fulfill all valid claims for replacement of qualifying sprinklers received up to August 31, 2007. The ultimate cost to complete the program will be impacted by a number of factors such as changes in material and labor costs, and the actual number of sprinkler heads replaced. Settlements during the quarter and six months ended March 27, 2009 include cash expenditures of $9 million and $19 million, respectively, related to the VRP.

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Accounting Pronouncements

        Recently Adopted Accounting Pronouncements    In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Standards ("SFAS") No. 161, "Disclosures about Derivative Instruments and Hedging Activities." SFAS No. 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's results of operations. The Company adopted the disclosure provisions of SFAS No. 161 as of December 27, 2008. See Note 9 to the Consolidated Financial Statements for additional information related to the adoption of SFAS No. 161.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which enhances existing guidance for measuring assets and liabilities at fair value. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements. In February 2008, the FASB issued Staff Position No. 157-2, "Effective Date of FASB Statement No 157" which permits companies to partially defer the effective date of SFAS No. 157 for one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. During the first quarter of 2009 the Company elected to defer the adoption of SFAS No. 157 for one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. SFAS No. 157 became effective for Tyco in the first quarter of 2009 for financial assets and liabilities only. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows. See Note 9 for additional information related to the adoption of SFAS No. 157. The Company is currently assessing the impact, if any, that the adoption of SFAS No. 157 for non-financial assets and liabilities will have on the results of its operations, financial position or cash flows.

        In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R)." SFAS No. 158 requires that employers recognize the funded status of defined benefit pension and other postretirement benefit plans as a net asset or liability on the balance sheet and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as a component of net periodic benefit cost. The Company adopted the recognition and disclosure provisions of SFAS No. 158 as of September 28, 2007.

        SFAS No. 158 also requires companies to measure plan assets and benefit obligations as of their fiscal year end. The Company adopted the measurement date provisions of SFAS No. 158 on September 27, 2008. As a result, Tyco measured its plan assets and benefit obligations on September 26, 2008 and adjusted its opening balances of accumulated earnings and accumulated other comprehensive income for the change in net periodic benefit cost and fair value, respectively, from the previously used measurement date of August 31, 2008. The adoption of the measurement date provisions resulted in a net decrease to accumulated earnings of $5 million, net of an income tax benefit of $2 million, and a net increase to accumulated other comprehensive income of $61 million, net of income taxes of $28 million. See Note 11 to the Consolidated Financial Statements for additional information related to the adoption of SFAS 158.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities." SFAS No. 159 permits an entity, on a contract-by-contract basis, to make an irrevocable election to account for certain types of financial instruments and warranty and insurance contracts at fair value, rather than historical cost, with changes in the fair value, whether realized or unrealized, recognized in earnings. SFAS No. 159 became effective for Tyco in the first quarter of 2009. On September 27, 2008, the Company did not elect the fair value option under SFAS 159 for eligible items.

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        In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" (SFAS No. 162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. The Company adopted the provisions of SFAS No. 162 as of November 15, 2008. The adoption did not have a material impact on the Company's financial position, results of operations or cash flows.

        Recently Issued Accounting Pronouncements    In June 2008 the FASB ratified FASB Staff Position ("FSP") No. EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities" (FSP No. EITF 03-6-1), which addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, must be included in the earnings allocation in calculating earnings per share under the two-class method described in SFAS No. 128, "Earnings per Share" (SFAS No. 128). FSP No. EITF 03-6-1 requires that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend-equivalents be treated as participating securities in calculating earnings per share. FSP No. EITF 03-6-1 is effective for Tyco starting with the first interim period of fiscal 2010, and shall be applied retrospectively to all prior periods. The Company is currently evaluating the effects, if any that FSP No. EITF 03-6-1 may have on earnings per share.

        In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life of Intangible Assets". FSP No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets". FSP No. 142-3 is effective for Tyco in the first quarter of 2010. The Company is currently assessing what impact, if any, that FSP No. 142-3 will have on its financial position, results of operations or cash flows.

        In December 2007, the FASB issued SFAS 141 (Revised 2007), "Business Combinations." SFAS No. 141(R) retains the underlying concepts of SFAS No. 141 in that business combinations are still accounted for at fair value. However, the accounting for certain other aspects of business combinations will be affected. Acquisition costs will generally be expensed as incurred. Restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date. In-process research and development will be recorded at fair value as an indefinite-lived intangible at the acquisition date until it is completed or abandoned and its useful life can be determined. Changes in deferred tax asset valuation allowances and uncertain tax positions after the acquisition date will generally impact income tax expense. SFAS No. 141(R) also expands required disclosures surrounding the nature and financial effects of business combinations. SFAS No. 141(R) is effective, on a prospective basis, for Tyco in the first quarter of fiscal 2010.

        In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51". SFAS No. 160 requires the recognition of a noncontrolling interest (minority interest prior to the adoption of SFAS 160) as equity in the Consolidated Financial Statements. The amount of net income attributable to the noncontrolling interest should be included in consolidated net income on the face of the statement of income. SFAS No. 160 also amends certain of Accounting Research Bulletin No. 51's consolidation procedures in order to achieve consistency with the requirements of SFAS No. 141R. The statement also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. This statement is effective for Tyco in the first quarter of fiscal 2010. The Company is currently assessing what impact if any, that SFAS No. 160 will have on its financial position, results of operations or cash flows.

        In December 2008, the FASB issued FSP FAS 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets". The FSP requires additional disclosures about plan assets related to an employer's defined benefit pension or other post retirement plans to enable investors to better understand how investment decisions are made, the major categories of plan assets, the inputs and

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valuation techniques used to measure the fair value of plan assets, the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period, and the significant concentrations of risk within plan assets. The disclosure provisions of FSP FAS 132(R)-1 are effective for Tyco for fiscal 2010.

Forward-Looking Information

        Certain statements in this report are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "project" and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission ("SEC"), or in Tyco's communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls, regarding expectations with respect to sales, earnings, cash flows, operating and tax efficiencies, product expansion, backlog, the consummation and benefits of acquisitions and divestitures, as well as financings and repurchases of debt or equity securities, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertainties and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performances or achievements. Factors that might affect such forward-looking statements include, among other things:

•

overall economic and business conditions;

•

the demand for Tyco's goods and services;

•

competitive factors in the industries in which Tyco competes;

•

changes in tax requirements (including tax rate changes, new tax laws and revised tax law interpretations);

•

results and consequences of Tyco's internal investigations and governmental investigations concerning the Company's governance, management, internal controls and operations including its business operations outside the United States;

•

the outcome of litigation and governmental proceedings;

•

effect of income tax audit settlements;

•

the ratings on our debt and our ability to repay or refinance our outstanding indebtedness as it matures;

•

our ability to operate within the limitations imposed by financing arrangements and to maintain our credit ratings;

•

interest rate fluctuations and other changes in borrowing costs;

•

other capital market conditions, including availability of funding sources and currency exchange rate fluctuations;

•

availability of and fluctuations in the prices of key raw materials, including steel and copper;

•

economic and political conditions in international markets, including governmental changes and restrictions on the ability to transfer capital across borders;

•

the ability to achieve cost savings in connection with the Company's strategic restructuring and Six Sigma initiatives;

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•

potential further impairment of our goodwill, intangibles and/or our long-lived assets;

•

the impact of fluctuations in the price of Tyco common shares;

•

risks associated with the change in our jurisdiction of incorporation from Bermuda to Switzerland, including the possibility of reduced flexibility with respect to certain aspects of capital management, increased or different regulatory burdens, and the possibility that we may not realize anticipated tax benefits;

•

changes in U.S. and non-U.S. government laws and regulations; and

•

the possible effects on us of pending and future legislation in the United States that may limit or eliminate potential U.S. tax benefits resulting from Tyco International's jurisdiction of incorporation or deny U.S. government contracts to us based upon Tyco International's jurisdiction of incorporation.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

        The Company's exposure to market risk from changes in interest rates and foreign currency exchange rates has not changed materially from our exposure discussed in the 2008 Form 10-K. In order to manage the volatility relating to our more significant market risks, we currently enter into forward foreign currency exchange contracts and foreign currency options. Our portfolio derivative financial instruments may, from time to time, also include interest rate swaps.

        We utilize established risk management policies and procedures in executing derivative financial instrument transactions. We do not execute transactions or hold derivative financial instruments for trading or speculative purposes. Derivative financial instruments related to non-functional currency cash flows are used with the goal of mitigating a significant portion of these exposures when it is cost effective to do so. Counterparties to derivative financial instruments are limited to financial institutions with at least an A-/A3 long-term debt rating.

Item 4.    Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

        We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

        Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of March 27, 2009, our disclosure controls and procedures were not effective because of a material weakness in our internal controls over financial reporting, relating to accounting for income taxes, which we view as an integral part of our disclosure controls and procedures as discussed in Part II, Item 9A. Controls and Procedures in Form 10-K to the Annual Report on Form 10-K for the year ended September 26, 2008.

        Significant internal control, informational systems and process improvements have been implemented in our tax accounting processes, including certain recently implemented controls in

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response to the identified material weakness. The following significant changes were made to our internal controls over financial reporting:

•

Increased number of tax accounting resources;

•

Enhanced policies and procedures relating to tax account reconciliation and analysis;

•

Conducted extensive company wide training for all company personnel engaged in tax accounting activities;

•

Improved the level and quality of cross-company communication and information flows regarding the tax accounting process and requirements; and

•

Improved process for tax effecting consolidating entries.

        While significant progress has been made, several new tax accounting and control procedures have only recently been implemented and further time is required to assess and ensure the sustainability of these procedures. Further, our current environment is still characterized by a highly complex structure of approximately 1,100 legal entities. In light of this, the Company believes the material weakness relating to accounting for income taxes has not been remediated and the Company plans to implement further improvements to achieve appropriate levels of controls, reliability and sustainability in this area.

        In addition to the above, we continue to proactively identify opportunities for control improvements. We have ongoing initiatives over the next several years to standardize, consolidate and upgrade various financial operating systems and eliminate many of the manual and redundant tasks previously performed under older systems or processes. We are also actively simplifying the Company's legal entity structure and expect a significant reduction in the number of legal entities over the next 15 months.

Remediation Plan

        While a number of corrective actions have been made, several have only recently been implemented and further time is required to assess and ensure the sustainability of these controls.

        Over the next year, we will continue to focus on our internal controls over accounting for income taxes, and will take further steps to those mentioned earlier to strengthen controls, including the following planned actions:

•

Further enhancements to tax accounting procedures in order to ensure their sustainability;

•

Additional training, guidance and communications to information providers regarding tax accounting requirements;

•

Enhanced monitoring of tax accounting submissions and tax account balances of our legal entities globally; and

•

Comprehensive review of our tax accounting process and close procedures to identify areas that require further improvements.

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

        Except as discussed below, there have been no material developments in the Company's legal proceedings that have occurred during the quarter ended March 27, 2009. For a description of the Company's previously reported legal proceedings, refer to Part I, Item 3. Legal Proceedings, in the 2008 Form 10-K.

        In connection with the Separation, we entered into a liability sharing agreement regarding certain legal actions that were pending against Tyco prior to the Separation. Under the Separation and Distribution Agreement, we, Covidien and Tyco Electronics are jointly and severally liable for the full amount of any judgments resulting from the actions subject to the agreement, which generally relate to legacy matters that are not specific to the business operations of any of the companies (including ERISA, FCPA and securities claims). The Separation and Distribution Agreement also provides that we will be responsible for 27%, Covidien 42% and Tyco Electronics 31% of payments to resolve these matters, with costs and expenses associated with the management of these contingencies being shared equally among the parties. In addition, under the agreement, we will manage and control all the legal matters related to assumed contingent liabilities as described in the Separation and Distribution Agreement, including the defense or settlement thereof, subject to certain limitations. Additionally, at the time of the Separation, the Company, Covidien and Tyco Electronics agreed to allocate responsibility for certain legacy tax claims pursuant to the same formula under the Tax Sharing Agreement. See Note 5 to the Consolidated Financial Statements for additional information related to the Tax Sharing Agreement.

Class Action Settlement and Legacy Securities Matters

        As previously reported, in June 2007, the Company agreed to settle 32 purported securities class action lawsuits arising from actions alleged to have been taken by prior management for $2.975 billion, and the settlement became final in February 2008. Tyco is not subject to any further liability for the class action settlement. Of this amount, the Company contributed $803 million, representing its share under the Separation and Distribution Agreement, to an escrow account established in connection with the settlement. The settlement did not purport to resolve all legacy securities cases, and several remain outstanding and are discussed below. As described below, during the quarter ended March 27, 2009, the Company reassessed its reserves for legacy securities matters and has determined that its best estimate of probable loss for these matters is $375.0 million, which amount is subject to the sharing provisions of the Separation and Distribution Agreement. Although the Company has reserved its best estimate of probable loss related to unresolved legacy securities claims, their ultimate resolution could differ from this estimate, which could have a material adverse effect on the Company's financial position, results of operations or cash flows.

        Pursuant to the terms of the settlement, L. Dennis Kozlowski, Mark H. Swartz and Frank E. Walsh, Jr., are excluded from the settling defendants, and the class has assigned to Tyco all of their claims against defendants Kozlowski, Swartz and Walsh. In exchange, we have agreed to pay to the certified class, in addition to the $2.975 billion described above, 50% of any net recovery against these defendants.

Proceedings Not Covered by the Settlement

        As previously reported in our periodic filings, a number of lawsuits related to alleged misconduct of our former management have been filed against Tyco. Because the plaintiffs in these matters were not similarly situated to the members of the class settlement described above, these matters were not included in that settlement. The plaintiffs in these matters assert various claims based primarily on alleged violations of federal securities laws, fraud and negligence. These matters consist of Stumpf v. Tyco International Ltd., an action related to the initial public offering of TyCom in 2000, which is

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further described below, Jasin v. Tyco International Ltd., et al., an action brought by a pro se plaintiff, and Hall v. Kozlowski, et al, an action brought by a pro se plaintiff relating to the plaintiff's employment, 401(k), pension plans and ownership of Tyco common stock.

Stumpf v. Tyco International Ltd. is a class action lawsuit in which the plaintiffs assert complaints against Tyco, among others, based on alleged violations of the disclosure provisions of the federal securities laws. The matter arises from Tyco's July 2000 initial public offering of common stock of TyCom Inc, and alleges that the TyCom registration statement and prospectus relating to the sale of common stock were inaccurate, misleading and failed to disclose facts necessary to make the registration statement and prospectus not misleading. The complaint further alleges the defendants violated securities laws by making materially false and misleading statements and omissions concerning, among other things, executive compensation, TyCom's business prospects and Tyco's and TyCom's finances. The matter is currently in the pre-trial stages of litigation.

ERISA Litigation

        Tyco and certain of our current and former employees, officers and directors, have been named as defendants in eight class actions brought under the Employee Retirement Income Security Act ("ERISA"). Two of the actions were filed in the United States District Court for the District of New Hampshire and the six remaining actions were transferred to that Court by the Judicial Panel on Multidistrict Litigation. All eight actions have been consolidated in the District Court in New Hampshire. The consolidated complaint purports to bring claims on behalf of our Retirement Savings and Investment Plans and the participants therein and alleges that the defendants breached their fiduciary duties under ERISA by negligently misrepresenting and negligently failing to disclose material information concerning, among other things, the following: related-party transactions and executive compensation; our mergers and acquisitions and the accounting therefore, as well as allegedly undisclosed acquisitions; and misstatements of our financial results. The complaint also asserts that the defendants breached their fiduciary duties by allowing the Plans to invest in our shares when it was not a prudent investment. The complaints seek recovery of alleged plan losses arising from alleged breaches of fiduciary duties. On August 15, 2006, the Court entered an order certifying a class "consisting of all Participants in the Plans for whose individual accounts the Plans purchased and/or held shares of Tyco Stock Fund at any time from August 12, 1998 to July 25, 2002." This matter currently is in the pre-trial stages of litigation.

Opt-Out Claims

        As of the opt-out deadline for the securities class-action settlement described above, Tyco had received opt-out notices from individuals and entities totaling approximately 4% of the shares owned by the class members subject to the settlement. A number of these individuals and entities have filed claims separately against Tyco, and as of March 27, 2009, lawsuits had been filed against Tyco by the following opt-out claimants: Franklin Mutual Advisers, LLC; the Teachers Retirement System of Texas, et al.; Blackrock Global Allocation Fund, Inc., et al.; Nuveen Balanced Municipal and Stock Fund, et al.; Federated American Leaders Fund, Inc. et al.; the State Treasurer of the State of Michigan, as custodian of the Michigan Public School Employees Retirement System, State Employees' Retirement System, Michigan State Police Retirement System and Michigan Judges Retirement System, Public Employees Retirement Association of Colorado and Equitec-Schwartz, LLC. Any judgments resulting from such claims or from claims that are filed in the future would not reduce the $2.975 billion settlement amount described above. Generally, the claims asserted in these lawsuits include claims similar to those asserted by the settling defendants; namely, violations of the disclosure provisions of federal securities laws. During the quarter ended March 27, 2009, the Company agreed to settle two of the lawsuits named above for a total of $61 million. Pursuant to the Separation and Distribution Agreement, the Company's share of the settlement amount is approximately $16 million, with Covidien and Tyco Electronics responsible for approximately $26 million and $19 million, respectively.

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        During the third quarter of 2009, the Company agreed to settle an additional two of the lawsuits named above for approximately $45 million. Pursuant to the Separation and Distribution Agreement, the Company's share of this amount is approximately $12 million, with Covidien and Tyco Electronics responsible for approximately $19 million and $14 million, respectively.

        In light of the settlements in the second quarter and other recent settlement activity, the Company has reassessed its reserves for its unresolved legacy securities matters (including the remaining opt-out claims and the Stumpf and ERISA matters described above) and has determined that its best estimate of probable loss for these matters is $375 million. Because any payments ultimately made in connection with these matters would be subject to the sharing provisions of the Separation and Distribution Agreement described above, the Company has also recorded receivables from Covidien and Tyco Electronics in the amounts of $158 million and $116 million, respectively.

Tyco Litigation Against Former Senior Management

        Tyco International Ltd. v. L. Dennis Kozlowski and Tyco International Ltd. v. Mark H. Swartz.    As previously reported in our periodic filings, we filed civil complaints against both Dennis Kozlowski, our former Chairman and Chief Executive Officer, and Mark H. Swartz, our former Chief Financial Officer, for breach of fiduciary duty and other conduct, and for recovery of all remuneration, including restricted and unrestricted shares and options, obtained by them during the course of this conduct. Discovery in these cases is proceeding. In connection with our civil complaints against Mr. Kozlowski, Mr. Swartz, and Scott Stevenson, our former Chief Tax Officer, each of these individuals has made claims against the Company seeking amounts allegedly due in connection with the former executives' compensation and retention arrangements and under ERISA. On February 11, 2009, the Company and Mr. Stevenson entered into a settlement agreement in respect of all claims brought by Mr. Stevenson related to such compensation. Mr. Stevenson agreed to release all claims he may have had against the Company in exchange for a payment of $13.4 million, which was paid on February 26, 2009. Tyco intends to vigorously defend the remaining actions and does not believe that the ultimate outcome of these matters will have a material adverse affect on its financial position, results of operations or cash flows.

        In connection with the criminal trials for Mr. Kozlowski and Mr. Swartz, they were ordered to pay restitution, jointly and severally, to Tyco of $134 million. On January 2, 2007, the New York County District Attorney's office released to Tyco, on behalf of Mr. Kozlowski, $98 million in restitution and on October 27, 2007, Mr. Swartz paid restitution to the Company in the amount of $38 million. These payments were made pending the outcome of the appeal of their criminal convictions, both of which were denied by the appeals division of the New York State Supreme Court on November 15, 2007. Their further appeal to the New York State Court of Appeals was denied in October 2008. In April 2009, Messrs. Kozlowski and Schwartz filed a petition with the U.S. Supreme Court for a review of their convictions.

        Tyco International Ltd. v. L. Dennis Kozlowski and Mark H. Swartz.    As previously reported in our periodic filings, we filed a civil complaint against our former Chairman and Chief Executive Officer and former Chief Financial Officer and Director pursuant to Section 16(b) of the Securities and Exchange Act of 1934 for disgorgement of short-swing profits from prohibited transactions in our common shares believed to exceed $40 million. The action seeks disgorgement of profits, interest, attorney's fees and costs. This matter is in the pre-trial stage of litigation.

        Tyco International Ltd. v. Frank E. Walsh, Jr.    As previously reported in our periodic filings, we filed a civil complaint against Frank E. Walsh, Jr., a former director, for breach of fiduciary duty and related wrongful conduct involving receipt by Mr. Walsh of a $20 million payment in connection with our 2001 acquisition of the CIT Group, Inc. The action alleges causes of action for restitution, breach of fiduciary duty and inducing breach of fiduciary duty, conversion, unjust enrichment, and a constructive trust, and seeks recovery for all of the losses suffered by us as a result of the defendant

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director's conduct. On December 17, 2002, Mr. Walsh paid $20 million in restitution to Tyco, as a result of a plea bargain agreement with the New York County District Attorney. Mr. Walsh has made claims against Tyco alleging that Tyco is required to indemnify him for his defense costs arising from his role as a Tyco director. Our claims against Mr. Walsh and Mr. Walsh's claims against Tyco are still pending. This matter is in the pre-trial stage of litigation.

ERISA Partial Withdrawal Liability Assessment and Demand

        On June 8, 2007, SimplexGrinnell received a notice alleging that it had partially withdrawn from the National Automatic Sprinkler Industry Pension Fund (the "Fund"). Under Title IV of ERISA, if the Fund can prove that an employer completely or partially withdraws from a multi-employer pension plan such as the Fund, the employer is liable for withdrawal liability equal to its proportionate share of the plan's unfunded vested benefits. The alleged withdrawal results from a 1994 labor dispute between Grinnell Fire Protection Systems, SimplexGrinnell's predecessor, and Road Sprinkler Fitters Local Union No. 669.

        ERISA requires that payment of withdrawal liability be made in full or in quarterly installments commencing upon receipt of a liability assessment from the plan. A plan's assessment of withdrawal liability generally may be challenged only in arbitration, and ERISA requires that quarterly payments must continue to be made during the pendency of the arbitration. If the employer prevails in arbitration (and any subsequent appeals), its quarterly withdrawal liability payments are refunded with interest. The Fund's total withdrawal liability assessment against SimplexGrinnell is approximately $25 million. The quarterly withdrawal liability payments are $1.1 million, $8.8 million of which have been paid to date. While the ultimate outcome is uncertain, SimplexGrinnell believes that it has strong arguments that no withdrawal liability is owed to the Fund, and it plans to vigorously defend against the Fund's withdrawal liability assessment. The matter is currently in arbitration. The Company has made no provision for this contingency and believes that its quarterly payments are recoverable.

Subpoenas and Document Requests From Governmental Entities

        As previously reported in our periodic filings, we and others have received various subpoenas and requests from the SEC, the U.S. Department of Labor, state departments of labor, the General Service Administration and others seeking the production of voluminous documents in connection with various investigations into our governance, management, operations, accounting and related controls. We are cooperating with these investigations and are complying with these requests.

        In 2002, certain of our current and former employees received subpoenas from the SEC's Division of Enforcement seeking testimony related to past accounting practices for dealer connect fees that ADT had charged to its authorized dealers upon purchasing customer accounts. The investigation related to accounting practices employed by our former management, which were discontinued in 2003. Although we settled with the SEC in 2006, a number of former dealers and related parties have filed lawsuits against us alleging breach of contract and other claims related to ADT's decision to terminate certain authorized dealers in 2002 and 2003. While it is not possible at this time to predict the final outcome of these lawsuits, we do not believe these claims will have a material adverse effect on the Company's financial position, results of operations or cash flows.

        As previously reported, we have provided documents and information to the SEC concerning transactions under the United Nations Oil for Food Program following various investigations since November 2004. After thoroughly investigating relevant transactions and reporting the results of these investigations to the SEC staff, we have not received any indication that the SEC is intending to pursue an enforcement action against Tyco in connection with the United Nations Oil for Food Program. Based on an additional allegation received in 2008, we are conducting further investigation. While it is not possible at this time to predict the final outcome of this matter, we do not believe it will have a material adverse effect on the Company's financial position, results of operations or cash flows.

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Environmental Matters

        Tyco is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. As of March 27, 2009, Tyco concluded that it was probable that it would incur remedial costs in the range of approximately $37 million to $77 million. As of March 27, 2009, Tyco concluded that the best estimate within this range is approximately $45 million, of which $11 million is included in accrued and other current liabilities and $34 million is included in other liabilities on Tyco's Consolidated Balance Sheets. In view of the Company's financial position and reserves for environmental matters, the Company believes that any potential payments related to these known environmental liabilities will not have a material adverse effect on its financial position, results of operations or cash flows.

Asbestos Matters

        As previously reported in its periodic filings, the Company and some of its subsidiaries are named as defendants in personal injury lawsuits based on alleged exposure to asbestos-containing materials. Each case typically names between dozens to hundreds of corporate defendants. The complaints generally seek monetary damages for personal injury or bodily injury resulting from alleged exposure to products containing asbestos. The Company will continue to vigorously defend the lawsuits that have been filed against it and its subsidiaries, but cannot predict whether it will be successful in those cases that proceed to trial. When appropriate, the Company settles claims. Although in the past the total amount paid in any year to settle and defend all asbestos claims has been immaterial, the Company has recently experienced an increase in the number of lawsuits that have proceeded to trial. Of the lawsuits that have proceeded to trial in 2008 and 2009, the Company has won or settled all but one case, with that one case returning an adverse jury verdict for approximately $7.7 million, which included both compensatory and punitive damages. The Company has appealed the verdict and believes that it will ultimately be overturned. As of March 27, 2009 there were approximately 4,700 asbestos liability cases pending against the Company and its subsidiaries.

Income Tax Matters

        During the third quarter of 2007, the IRS concluded its field examination of certain of the Company's U.S. federal income tax returns for the years 1997 through 2000 and issued anticipated Revenue Agents' Reports ("RARs") that reflect the IRS' determination of proposed tax adjustments for the periods under audit. The RARs propose tax audit adjustments to certain of the Company's previously filed tax return positions. The Company agreed with the IRS on adjustments totaling $498 million, with an estimated cash impact to the Company of $458 million, and during the third quarter of 2007, the Company paid $458 million, of which $163 million related to the Company's discontinued operations. The Company appealed other proposed tax audit adjustments totaling approximately $1 billion relating to Tyco, Covidien and Tyco Electronics, and, as Audit Managing Party as specified in the Tax Sharing Agreement, the Company intends to vigorously defend its prior filed tax return positions.

        During the second quarter of 2008, the IRS issued additional RARs asserting a withholding tax liability of approximately $106 million associated with the prior proposed tax adjustments related to the Company, Covidien and Tyco Electronics for the 1997 to 2000 period. The withholding tax amount asserted against the Company is immaterial. During the first quarter of fiscal 2009, the Company reached an informal agreement with the IRS appeals team to work towards timely resolution of all unagreed issues related to this time period. The Company, as Auditing Managing Party as specified in the Tax Sharing Agreement, intends to vigorously defend its prior filed tax return positions and determined that no adjustment is required to the Company's guarantees and indemnifications liability

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recorded in conjunction with the Tax Sharing Agreement as discussed in "Guarantees" within Management's Discussion and Analysis of Financial Condition and Results of Operations. Additionally, the IRS is auditing the prior tax returns of the Company, which include legal entities of Tyco, Covidien and Tyco Electronics for the 2001 to 2004 period. The IRS has not issued any RARs for this period. The ultimate resolution of these matters is uncertain and could result in a material impact to the Company's financial position, results of operations, cash flows or the effective tax rate in future reporting periods.

        The IRS proposed civil fraud penalties against a subsidiary that was distributed to Tyco Electronics in connection with the Separation. The penalties allegedly arise from actions of former executives taken in connection with intercompany transfers of stock of Simplex Technologies in 1998 and 1999. Based on statutory guidelines, we estimate the proposed penalties could range between $30 million and $50 million. The Company, as Audit Managing Party as specified in the Tax Sharing Agreement, intends to vigorously oppose the assertion of any such penalties against Tyco Electronics, in part, because beginning in 2003 the Company discovered, investigated and reported the conduct at issue to the IRS and fully cooperated in the criminal prosecution of the Company's former Chief Tax Officer on a charge of willful filing of a false tax return. This is a pre-Separation shared tax matter under the Tax Sharing Agreement.

Compliance Matters

        As previously reported in our periodic filings, we have received and responded to various allegations and other information that certain improper payments were made by our subsidiaries in recent years. We have been informed that two subsidiaries in our Flow Control business in Italy have been named in a request for criminal charges filed by the Milan public prosecutor's office. We have reported to the U.S. Department of Justice ("DOJ") and the SEC the investigative steps and remedial measures that we have taken in response to the allegations. We also informed the DOJ and the SEC that we retained outside counsel to perform a company-wide baseline review of our policies, controls and practices with respect to compliance with the Foreign Corrupt Practices Act ("FCPA"), and that we would continue to investigate and make periodic progress reports to these agencies. We have and will continue to communicate with the DOJ and SEC to provide updates on the baseline review and follow-up investigations, including, as appropriate, briefings concerning additional instances of potential improper conduct identified by us in the course of our ongoing compliance activities, such as recently discovered conduct involving agents retained by certain of our businesses in EMEA. To date, the baseline review has revealed that some business practices may not comply with Tyco and FCPA requirements. At this time, we cannot predict the outcome of these matters and other allegations reported to regulatory and law enforcement authorities and therefore cannot estimate the range of potential loss or extent of risk, if any, that may result from an adverse resolution of these matters. However, it is possible that we may be required to pay material fines, consent to injunctions on future conduct, or suffer other penalties or adverse impacts, each of which could have a material adverse effect on our financial position, results of operations or cash flows.

        Covidien and Tyco Electronics agreed, in connection with the Separation, to cooperate with the Company in its responses regarding these matters. Any judgment required to be paid or settlement or other cost incurred by the Company in connection with the FCPA investigations would be subject to the liability sharing provisions of the Separation and Distribution Agreement, which assigned liabilities primarily related to the former Healthcare and Electronics businesses of Tyco to Covidien or Tyco Electronics, respectively, and provides that the Company will retain liabilities primarily related to its continuing operations. Any liabilities not primarily related to a particular business will be shared equally among the Company, Covidien and Tyco Electronics.

        The German Federal Cartel Office ("FCO") charged in early 2007 that certain German subsidiaries in the Company's Flow Control business had engaged in anti-competitive practices, in

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particular with regard to its hydrant, valve, street box and fittings business. The Company investigated this matter and determined that the conduct may have violated German anti-trust law. The Company is cooperating with the FCO in its investigation of this violation. The Company cannot estimate the range of potential loss that may result from this violation. It is possible that the Company may be subject to civil or criminal proceedings and may be required to pay judgments, suffer penalties or incur settlements in amounts that may have a material adverse effect on our financial position, results of operations or cash flows.

Other Matters

        Fitzpatrick Contractors Limited v. Tyco Fire and Integrated Solutions (UK) Ltd.    On July 18, 2007, Fitzpatrick Contractors Limited ("FCL") commenced an action against Tyco Fire and Integrated Solutions (UK) Ltd. in the High Court of Justice, Queen Bench Division, Technology and Construction Court, United Kingdom, alleging that Tyco entered into a binding contract in 2002 for the design, manufacture and installation of mechanical and electrical works for the refurbishment of a portion of London Transport's Blackwall Tunnel. FCL had sought damages for breach of contract in the amount of approximately $38 million. In the second quarter of 2009, the Company accepted an offer made by the plaintiff to settle substantially of the claims related to this matter for approximately $14 million, excluding legal fees and interest.

        In addition to the foregoing, we are subject to claims and suits, including from time to time, contractual disputes and product and general liability claims incidental to present and former operations, acquisitions and dispositions. With respect to many of these claims, we either self-insure or maintain insurance through third-parties, with varying deductibles. While the ultimate outcome of these matters cannot be predicted with certainty, we believe that the resolution of any such proceedings, whether the underlying claims are covered by insurance or not, will not have a material adverse effect on our financial condition, results of operations or cash flows beyond amounts recorded for such matters.

Item 1A.Risk Factors

Tyco's significant business risks are described in Part I, Item 1A in our 2008 Form 10-K and Item 1A in our Form 10-Q for the first fiscal quarter of 2009, to which reference is made herein. Other than as set forth below, management does not believe that there have been any significant changes in the Company's risk factors since the Company filed its Form 10-Q for the first fiscal quarter of 2009.

General economic and cyclical industry conditions may adversely affect our financial condition, results of operations or cash flows.

        Our operating results have been and may in the future be adversely affected by general economic conditions and the cyclical pattern of certain industries in which we operate. For example, demand for our services and products is significantly affected by the level of commercial construction, the amount of discretionary consumer and business spending, and the performance of the housing market, each of which historically has displayed significant cyclicality. Recent economic weakness has adversely affected our businesses. In particular, weakness in the non-residential construction market as well as deteriorating economic conditions in some of our geographic markets have adversely impacted our ADT Worldwide, Electrical and Metals and Fire Protection businesses. Continued weakness in the U.S. or global economies, or in the industries in which we operate, has had, and could continue to have, a materially negative impact on our financial condition, results of operations or cash flows.

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We have recently recognized substantial impairment charges and may be required to recognize additional impairment charges in the future.

        Pursuant to accounting principles generally accepted in the United States, we are required to periodically assess our goodwill, intangibles and other long-lived assets to determine if they are impaired. Disruptions to our business, end market conditions and protracted economic weakness, unexpected significant declines in operating results of reporting units, divestitures and market capitalization declines may result in additional charges for goodwill and other asset impairments. During the quarter ended March 27, 2009, we recognized aggregate goodwill and intangible asset impairments of $2.7 billion, resulting primarily from weak second quarter operating results in certain of our businesses, along with downward revisions to forecasted results, restructuring actions and weaker industry outlooks. As a result, the Company recognized an aggregate goodwill impairment of $2.6 billion ($2.6 billion after-tax) at six of its 18 business units and intangible asset impairments of approximately $64 million ($40 million after-tax) related to franchise rights in its ADT Worldwide segment and a tradename in its Safety Products segment. The Company believes that its goodwill balance at March 27, 2009 is recoverable. However, fair value determinations require considerable judgment and are sensitive to changes in the factors described above. In light of current adverse economic conditions, additional impairments to one or more of our reporting units could occur in future periods whether or not connected to the annual impairment analysis. Future impairment charges could materially affect our reported earnings in the periods of such charges and could adversely affect our financial condition and results of operations.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws outside the United States.

        The U.S. Foreign Corrupt Practices Act (the "FCPA") and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. Recent years have seen a substantial increase in FCPA enforcement activity, with more frequent and aggressive investigations and enforcement proceedings by both the DOJ and the SEC, increased enforcement activity by non-U.S. regulators, and increases in criminal and civil proceedings brought against companies and individuals. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world that have experienced governmental and commercial corruption to some degree and in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. We cannot assure you that our internal control policies and procedures always will protect us from reckless or criminal acts committed by our employees or agents. Furthermore, we have been subject to investigations by the DOJ and the SEC related to allegations that improper payments have been made by our subsidiaries in recent years in violation of the FCPA. We have reported to the DOJ and the SEC the remedial measures that we have taken in response to the allegations and our own internal investigations. We have also retained outside counsel to perform a company-wide baseline review of our policies, controls and practices with respect to the FCPA, and we periodically provide updates to the SEC and DOJ regarding our FCPA investigations and compliance activities. As a result, it is possible that we will be required to pay material fines, consent to injunctions on future conduct or suffer other penalties or adverse impacts, including being subject to securities litigation or a general loss of investor confidence, any one of which could adversely affect our financial position, results of operations, cash flows, business prospects or the market value of our stock.

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Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs
12/27/08–1/23/09		406	$	22.98		—	$	—
1/24/09–2/27/09		2,462	$	21.88		—		—
2/28/09–3/27/09		3,828	$	18.85		—		900,000,000

        The transactions described in the table above represent shares acquired by the Company from certain employees in order to satisfy employee tax withholding requirements in connection with the vesting of restricted shares. The average price paid per share is calculated by dividing the total cash paid for the shares by the total number of shares repurchased. Approximately 6,696 shares were acquired in these vesting-related transactions during the quarter ended March 27, 2009. During the quarter, the Company did not repurchase any common shares on the NYSE as part of the $1.0 billion share repurchase program approved by the Board of Directors in July 2008 (2008 share Repurchase Program). Approximately $900 million remained outstanding under the 2008 Share Repurchase Program at March 27, 2009.

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Item 3.    Defaults Upon Senior Securities

        None.

Item 4.    Submission of Matters to a Vote of Security Holders

        The 2009 Annual General Meeting of Shareholders (the "AGM") of the Company was held on March 12, 2009. In addition, the Company held a Special General Meeting of Shareholders (the "SGM") immediately following the AGM.

Annual General Meeting

        At the AGM, a total of 400,648,352 common shares (84.65% of outstanding common shares as of the record date, January 6, 2009) were voted. The three Company proposals submitted at the AGM were passed as described below.

        The following is a brief description of each matter voted upon at the AGM. Percentages indicated below reflect the percentage of the total number of common shares voted at the AGM.

        Proposal 1.    To elect the Board of Directors of the Company:

        The following is a tabulation of the votes submitted in respect of Proposal 1 included in the Company's proxy statement. Proxies giving discretion to the chairman of the AGM were voted in favor of each candidate. There were zero broker non-votes.

	NUMBER OF VOTES FOR		% OF QUORUM			NUMBER OF VOTES WITHHELD
Edward D. Breen		395,674,000		98.8	%		4,974,352
Timothy M. Donahue		381,614,086		95.2	%		19,034,266
Brian Duperreault		397,588,397		99.2	%		3,059,955
Bruce S. Gordon		397,601,699		99.2	%		3,046,653
Rajiv L. Gupta		368,983,608		92.1	%		31,664,744
John A. Krol		397,516,473		99.2	%		3,131,879
Brendan R. O'Neill		378,703,641		94.5	%		21,944,711
William S. Stavropoulos		397,543,160		99.2	%		3,105,192
Sandra S. Wijnberg		397,572,163		99.2	%		3,076,189
Jerome B. York		379,008,137		94.6	%		21,640,215
R. David Yost		397,062,622		99.1	%		3,585,730

        Proposal 2.    A proposal to re-appoint Deloitte & Touche LLP as the independent auditors and to authorize the Audit Committee to set the auditors' remuneration:

        A total of 397,745,911 shares (99.3%) were voted for and 2,649,900 shares (0.7%) were voted against this proposal. There were 252,541 abstentions and zero broker non-votes.

        Proposal 3.    A proposal to amend the Company's 2004 Stock and Incentive Plan:

        A total of 346,551,210 shares (86.5%) were voted for and 20,737,107 shares (5.2%) were voted against this proposal. There were 614,480 abstentions and 32,745,555 broker non-votes.

Special General Meeting

        At the SGM, a total of 379,555,365 common shares (80.2% of outstanding common shares as of the record date, January 16, 2009) were voted. The ten Company proposals submitted at the SGM were passed as described below.

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        The following is a brief description of each matter voted upon at the SGM. Percentages indicated below reflect the percentage of the total number of common shares voted at the SGM.

        Proposal 1.    A proposal to approve the Company's discontinuance from Bermuda as provided in Section 132G of The Companies Act 1981 of Bermuda and the Company's change of domicile to Schaffhausen, Switzerland:

        A total of 368,372,559 shares (97.1%) were voted for and 10,837,197 shares (2.9%) were voted against this proposal. There were 345,609 abstentions and zero broker non-votes.

        Proposal 2.    A proposal to approve a resolution that had the effect of increasing the Company's registered share capital:

        A total of 368,400,361 shares (97.1%) were voted for and 10,838,785 shares (2.9%) were voted against this proposal. There were 315,949 abstentions and zero broker non-votes.

        Proposal 3.    A proposal to approve the name of Tyco International Ltd.:

        A total of 368,885,506 shares (97.2%) were voted for and 10,428,066 shares (2.8%) were voted against this proposal. There were 241,793 abstentions and zero broker non-votes.

        Proposal 4.    A proposal to approve the change of the corporate purpose of the Company:

        A total of 368,367,050 shares (97.1%) were voted for and 10,730,797 shares (2.8%) were voted against this proposal. There were 457,518 abstentions and zero broker non-votes.

        Proposal 5.    A proposal to approve the Company's proposed Swiss articles of association:

        A total of 368,409,783 shares (97.1%) were voted for and 10,814,034 shares (2.8%) were voted against this proposal. There were 331,548 abstentions and zero broker non-votes.

        Proposal 6.    A proposal to confirm Swiss law as the authoritative legislation governing the Company:

        A total of 368,354,630 shares (97.0%) were voted for and 10,771,320 shares (2.8%) were voted against this proposal. There were 429,415 abstentions and zero broker non-votes.

        Proposal 7.    A proposal to confirm the principal place of business of the Company as Schaffhausen, Switzerland:

        A total of 368,378,101 shares (97.1%) were voted for and 10,768,575 shares (2.8%) were voted against this proposal. There were 408,689 abstentions and zero broker non-votes.

        Proposal 8.    A proposal to appoint PricewaterhouseCoopers AG, Zurich as special auditor until the Company's next annual general meeting:

        A total of 368,678,049 shares (97.1%) were voted for and 10,596,424 shares (2.8%) were voted against this proposal. There were 280,892 abstentions and zero broker non-votes.

        Proposal 9.    A proposal to elect Deloitte AG as the Company's statutory auditors for a term of one year until the Company's next annual general meeting:

        A total of 367,154,191 shares (96.7%) were voted for and 12,148,581 shares (3.2%) were voted against this proposal. There were 252,593 abstentions and zero broker non-votes.

        Proposal 10.    A proposal to approve the payment of a dividend through a reduction of registered capital:

        A total of 368,635,304 shares (97.1%) were voted for and 10,625,070 shares (2.8%) were voted against this proposal. There were 294,991 abstentions and zero broker non-votes.

Item 5.    Other Information

        None.

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Item 6.    Exhibits

Exhibit Number	Exhibit
3.1	Articles of Association of Tyco International Ltd. (Tyco International AG) (Tyco International SA) (Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on March 17, 2009)
3.2	Organizational Regulations of Tyco International Ltd. (Tyco International AG) (Tyco International SA) (Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on March 17, 2009)
10.1	Tyco International Ltd. 2004 Stock and Incentive Plan (amended and restated as of January 1, 2009) (Incorporated by reference to Appendix A to the Registrant's Definitive Proxy Statement on Schedule 14A for the Annual General Meeting of Shareholders on March 12, 2009 filed on January 16, 2009).
10.2	Form of terms and conditions for Option Awards, Restricted Unit Awards, Restricted Unit Awards for Directors and Performance Share Awards under the 2004 Stock and Incentive Plan (Filed herewith).
10.3	Tyco International Severance Plan for U.S. Officers and Executives Plan (amended and restated as of January 2009) (Filed herewith).
10.4	Tyco International Change in Control Severance Plan for Certain U.S. Officers and Executives (amended and restated as of January 2009) (Filed herewith).
31.1	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).
31.2	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith).
32.1	Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith).

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SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TYCO INTERNATIONAL LTD.
By:	/s/ CHRISTOPHER J. COUGHLIN Christopher J. Coughlin Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date: April 30, 2009

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EX-10.2

Exhibit 10.2

Tyco International Ltd
2004 Stock and Incentive Plan (the “Plan”)

TERMS AND CONDITIONS

OF

OPTION AWARD

OPTION AWARD made in Princeton, New Jersey, as of October 7, 2008 (the “Grant Date”).

1.Grant of 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 Option is a Non-Qualified Option.

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

3.Vesting.  Except in the event of your Normal Retirement (Termination of Employment on or after age 60 if the sum of your age and full years of service with the Company is at least 70), Retirement (Termination of Employment on or after age 55 if the sum of your age and full years of service with the Company is at least 60), Termination of Employment, Death, Disability or a Change in Control, the Option will become exercisable in cumulative installments as follows: [·].  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 specifically provided herein.

4.Term of Option.  Unless the Option has been terminated or cancelled on an earlier date, the 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 Option will expire at the close of the NYSE’s next 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 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 sale or loan proceeds adequate to satisfy the portion of the Exercise Price being so paid; (ii) if expressly approved by the Board of Directors, tendering to the Company (by physical delivery or attestation) certificates of Common Stock that you have held for six (6) months or longer (unless the Compensation and Human Resources Committee (the “Committee”), in its discretion, waives this 6-month period) and 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

1

such form of payment is expressly authorized by the Board of Directors or the Committee, instructing the Company to withhold Shares that would otherwise be issued were the Exercise Price to be paid in cash and 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 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 Option.  Subject to these Terms and Conditions, the Option may be exercised by contacting 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 such other stock option administrator as is selected by the Company.  If the Option is exercised after your death, the Company will deliver Shares only after the Committee has determined that the person exercising the Option is the duly appointed executor or administrator of your estate or the person to whom the 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 Option will vest and remain exercisable as set forth below (or as set forth in paragraph 8, 9 or 10 as applicable), in the case of Termination of Employment, Retirement, Normal Retirement, Disability or Death:

[·]

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. The Severance & Retention Plan for Headquarters Group Move Program shall not apply to this Award.

8.Change in Control.  In the event of a Change in Control of Tyco International Ltd., as defined in the Plan document, and your Change in Control Termination, as also defined in the Plan document, or a 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 (2) years following a Change in Control, your Option will immediately become fully vested.  Your Option will expire on the earlier of (i) the original expiration date or (ii) three (3) 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 provisions to the contrary in paragraph 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, your Option Award will vest on a pro-rata basis based on

2

(i) the number of whole months completed from Grant Date through the closing date of the applicable transaction over the original number of months of the vesting period, times (ii) the total number of shares awarded under the Option minus (iii) the number of shares previous vested. The vested portion of your Option Award will expire on the earlier of the original expiration date of the Award or three (3) 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 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, (i) “Comparable Employment” is defined as employment at a base salary rate and bonus target that is at least equal to the base salary rate and bonus target in effect immediately prior to your termination of employment and at a location that is no more than 50 miles from your job location in effect immediately prior to your termination of employment; (ii) “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary 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; (iii) “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, provided that such subsidiary or entity ceases to be an affiliated company as a result of such disposition; and (iv) “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which (a) the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and (b) the Outsourcing Agreement includes an obligation of the Outsourcing Agent 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 – 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, you will continue to vest in any portion of your Award that had not vested as of the date of your Termination of Employment for a period of twelve months following your termination date, and, the vested portion of your Award will expire on the earlier of (i) the original expiration date of the Award or (ii) twelve months after the date of your Termination of Employment or such later date as is applicable under paragraph 7.  If your Termination of Employment occurs less than twelve months after the Grant Date your unvested Options will be forfeited as of your Termination of Employment.

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

12.Transfer of Option.  You may not transfer the Option or any interest in the Option except by will or the laws of descent and distribution.  Notwithstanding the foregoing, you may transfer the 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 any spouse, children, grandchildren, parents, grandparents, siblings, nieces, nephews and grandnieces and grandnephews, including adopted, in-laws and step family members. Any Option transferred pursuant to this provision will continue to be subject to the same terms and conditions that were applicable to the Option immediately prior to transfer.  The Option may be exercised by the transferee only to the same extent that you could have exercised the Option had no transfer occurred.

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

(a)If you have been terminated 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 Options.  In addition, you hereby 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 Option during the period beginning six (6) months prior to your Termination of Employment and ending on the 6 month anniversary of your Termination of Employment.

(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 and (a) such employment or consultation 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 (b) the Committee has not approved the arrangement in writing, then any 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 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),

4

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 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 Option.  Any such determinations and adjustments made by the Committee will be binding on all persons.

15.Restrictions on Exercise.  Exercise of the Option is subject to the conditions that, to the extent required at the time of exercise, (a) the Shares covered by the Option will be duly listed, upon official notice of issuance, upon 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 counsel of the Company.  Notwithstanding this Statement of Terms and Conditions, Optionee may exercise the Option only pursuant to the “broker-assisted cashless exercise” method described in Section 5(i) of this Statement of Terms and conditions if so restricted by local law at the time of exercise.

16.Disposition of Securities.  By accepting 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 federal securities laws with respect to trading in the Company’s securities, and you agree not to use the Company’s “cashless exercise” program (or any successor program) at any time when you possess material nonpublic information with respect to the Company or when using the program would otherwise result in a violation of securities law.  The Company will have the right to recover, or receive reimbursement for, any compensation or profit realized on the exercise of the Option or by the disposition of Shares received upon exercise of the Option to the extent that the Company has a right of recovery or reimbursement under applicable securities laws.

17.Plan Terms Govern.  The exercise of the Option, the disposition of any Shares received upon exercise of the 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 into these Terms and Conditions.  Capitalized terms used in these Terms and Conditions have the meaning set forth in the Plan, unless otherwise stated in these Terms and Conditions.  In the event of any conflict between the terms of the Plan and the terms of these Terms and Conditions, the Plan will control.  By accepting 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 accepting the Award, you hereby give your

5

explicit consent to the Company’s processing any such personal data and/or sensitive personal data.  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 are 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.  You understand 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.

19.No Contract of Employment or Promise of Future Grants.  By accepting 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 of your ordinary or expected salary or other compensation and 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 agree that you will not be entitled by way of damages for breach of contract, dismissal or compensation for loss of office or otherwise 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.

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 Option.  You have no rights as a stockholder of the Company pursuant to the 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 Option.  These Terms and Conditions supercede any prior agreements, commitments or negotiations concerning the Option.

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.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.

6

By accepting this Award, you agree to 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; and

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

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 thirty (30) 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.

[·]

7

Tyco International Ltd.
2004 Stock and Incentive Plan (the “Plan”)

TERMS AND CONDITIONS

OF

PERFORMANCE SHARE UNIT AWARD

PERFORMANCE SHARE UNIT AWARD made in Princeton, New Jersey, as of October 7, 2008 (“Grant Date”).

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.  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 one (1) Share of Common Stock.

3.Form of Payment.  Your vested Performance Share Unit Award, determined in accordance with Section 4, will be redeemed solely for Shares, subject to Section 14.

4.(a) Vesting.  Subject to Section 4(b), your Performance Share Unit Award willfully vest at the end of the performance cycle, as described in Appendix A, if you are then an active employee. Any payment shall be made as soon as practicable following the end of the performance cycle.

(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 metrics 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 metrics and satisfaction of any other applicable terms and conditions will be made at the sole discretion of the Committee.

5.Termination of Employment.  Any Performance Share Units that have not been earned as of your Termination of Employment pursuant to paragraphs 6 through 10 will immediately be forfeited, and your rights with respect to these Performance Share Units will end. 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.

6.Death or Disability.  If your employment with the Company terminates because of your Death or Disability, you will earn a pro rata portion of your Award, if any, determined in accordance with Section 4 above, based on the number of full months you have completed in the performance period applicable to the Award. Any payment shall be made as soon as practicable following the end of the performance cycle.

If you are deceased, the Company will make the payment, if any, to your estate only after the Committee has determined that the payee is the duly appointed executor or administrator of your estate.

7.Retirement.  For purposes of this Section 7, “Retirement” means Termination of Employment on or after age 55 if the sum of your age and full years of service with the Company is at least 60, and “Normal Retirement” means Termination of Employment on or after age 60 if the sum of your age and full years of service with the Company is at least 70.  If your employment with the Company terminates because of your Retirement or Normal Retirement less than 12 months after the Grant Date, your Performance Share Units will immediately be forfeited and your rights with respect to such Units will end.  If your employment with the Company terminates because of your Retirement twelve or more months after the Grant Date, you will earn a pro rata portion of your Award, if any, determined in accordance with Section 4 above, based on the number of full months you have completed in the performance cycle applicable to the Award. If your employment with the Company terminates because of your Normal Retirement twelve or more months after the Grant Date, your Award will be determined in accordance with Section 4 above, as if you had continued active employment through the end of the performance cycle applicable to the Award. Any payment shall be made as soon as practicable following the end of the performance cycle.

8.Change in Control.  In the event of a Change in Control of Tyco International Ltd, as defined in the Plan document, unless otherwise provided in this Section 8, the terms and conditions applicable to your Award under this Agreement shall continue in effect, except that no adjustment shall be made under Section 4(b) and the Retirement provisions of Section 7 shall not apply.  Notwithstanding the preceding sentence, your Award shall vest and become immediately payable upon a Change in Control Termination, as defined in the Plan document, or a 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”).  Any Award payable pursuant to the preceding sentence shall be paid at the target number of Performance Share Units specified in your Grant Letter as soon as practicable following your Change in Control Termination or Good Reason Resignation upon a Change in Control .  If prior to the Change in Control, you had satisfied the Retirement provisions of Section 7 and terminated your employment because of your Retirement or Normal Retirement, or previously terminated employment as a result of Death or Disability as described in Section 6, your Award (as determined under Sections 6 and 7) shall be paid to you as soon as practicable following the Change in Control and no adjustment shall be made under Section 4(b).

9.Termination of Employment as a Result of Divestiture or Outsourcing.  If your involuntary Termination of Employment other than for Cause is a result of a Disposition of Assets, Disposition of a Subsidiary or Outsourcing Agreement, you will earn a pro rata portion

2

of your Award, if any, as is determined in accordance with Section 4 above, based on the number of full months you have completed in the performance cycle applicable to the Award through the closing date of the applicable transaction. Any payment shall be made as soon as practicable following the end of the performance cycle.

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, and (ii) you are offered Comparable Employment 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 9, (a) “Comparable Employment” is defined as employment at a base salary rate and bonus target that is at least equal to the base salary rate and bonus target in effect immediately prior to your termination of employment and at a location that is no more than 50 miles from your job location in effect immediately prior to your termination of employment; (b) “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary 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;  (c) “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, provided that such subsidiary or entity ceases to be an affiliated company as a result of such disposition; and (d) “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 Agreement includes an obligation of the Outsourcing Agent 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.  If your Termination of Employment (i) occurs twelve months or more 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 your Award, if any, determined in accordance with Section 4 above, based on the number of full months you have completed in the performance period applicable to the Award. Any payment shall be made as soon as practicable following the end of the performance cycle. Notwithstanding the foregoing, the Severance & Retention Plan for Headquarters Group Move Program shall not apply to this Award.

11.Withholdings.  The Company will have the right, prior to any issuance or delivery of Shares based on your Performance Share Units, to withhold or require from you the amount necessary to satisfy applicable tax requirements, as determined by the Committee.  If you

3

have not satisfied your tax withholding requirements in a timely manner, the Company will have the right to sell the number of Shares necessary to satisfy such requirements.

12.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.

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

(a)If you have been terminated 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 to such Units. In addition, 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 (6) months prior to your Termination of Employment and ending on the second anniversary of your Termination of Employment.

(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 (1) disclosed business confidential or proprietary information related to any business of the Company or Subsidiary or (2) 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 and (a) such employment or consultation 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 (b) the Committee has not approved the arrangement in writing, 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.

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 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.

15.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, upon the NYSE, and (b) a Registration Statement under the Securities Act of 1933

4

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 counsel of the Company.

16.Disposition of Securities.  By accepting the Award, you acknowledge that you have read and understand the Company’s policy, and are aware of and understand your obligations under federal securities laws in respect of trading in the Company’s securities.  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.

17.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 into these Terms and Conditions.  Capitalized terms used in these Terms and Conditions have the meaning set forth in the Plan, unless otherwise stated in these Terms and Conditions.  In the event of any conflict between the terms of the Plan and the terms of these Terms and Conditions, the Plan will control.  By accepting the Award, you acknowledge receipt of the Plan and the prospectus, 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 accepting the Award, you hereby give your explicit consent to the Company’s processing any such personal data and/or sensitive personal data.  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 are intended include the Company and any of its Subsidiaries, 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.  You understand 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.

19.No Contract of Employment or Promise of Future Grants.  By accepting 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 of your ordinary or expected salary or other compensation and 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 agree that you will not be entitled by way of damages for breach of contract, dismissal or

5

compensation for loss of office or otherwise 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.

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 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.

21.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.

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 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.

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.

By accepting this Award, you agree to 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; and

(ii)you understand and agree that these Terms and Conditions and the Plan constitute 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.

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 thirty (30) 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.

6

[·]

7

Tyco International Ltd.
2004 Stock and Incentive Plan (the “Plan”)

TERMS AND CONDITIONS

OF

RESTRICTED UNIT AWARD

RESTRICTED UNIT AWARD made in Princeton, New Jersey, as of October 7, 2008 (the “Grant Date”).

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 one (1) Share of Common Stock.

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

4.Dividends.  Restricted Units are a promise to deliver Common Stock upon vesting.  For each Restricted Unit that is unvested, you will be credited with a Dividend Equivalent Unit (DEU) for any cash or stock 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 Units and shall be payable at the same time that the underlying units are payable as provided herein.

5.Vesting.  Except in the event of your Normal Retirement (Termination of Employment on or after age 60 if the sum of your age and full years of service with the Company is at least 70), Retirement (Termination of Employment on or after age 55 if the sum of your age and full years of service with the Company is at least 60), Termination of Employment, Death or Disability or a Change in Control, your Restricted Units will vest in installments as follows: [·]. 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 specifically provided herein. Except as otherwise provided in these Terms and Conditions, any payment shall be made to you as soon as practicable following the vesting date set forth in this paragraph 5.

6.Termination of Employment.  Any Restricted Units that have not vested as of your Termination of Employment pursuant to paragraphs 7, 8, 9 and 10 will immediately be forfeited, and your rights with respect to such Units will end. Termination of Employment means the date of cessation of an Employee’s employment relationship with the Company or a

1

subsidiary for any reason, with or without Cause, as determined by the Company. The Severance & Retention Plan for Headquarters Group Move Program shall not apply to this Award.

7.Death or Disability.  If your Termination of Employment is a result of your Death or Disability, your Award will become fully vested as of your Termination of Employment.  Any payment shall be made to you as soon as practicable following your Termination of Employment.  If you are deceased, the Company will make a payment to your estate only after the Committee has determined that the payee is the duly appointed executor or administrator of your estate.

8.Retirement.  If your Termination of Employment is a result of your Retirement or Normal Retirement (as defined in paragraph 5) less than twelve months after the Grant Date, your Restricted Units will immediately be forfeited and your rights with respect to such Units will end. If your Termination of Employment is a result of your Retirement twelve or more months after the Grant Date, your Restricted Units will vest pro rata (in full year increments) based on (i) the number of whole years that you have completed from Grant Date through your Date of Termination over the original number of years of the vesting period, times (ii) the total number of shares awarded under the Grant minus (iii) the number of shares previously vested.  If your Termination of Employment is a result of your Normal Retirement your Restricted Units will immediately become fully vested. Any payment shall be made to you as soon as practicable following your Termination of Employment (adjusted to reflect any payments previously made to you under paragraph 5).

9.Change in Control.  In the event of a Change in Control of Tyco International Ltd., as defined in the Plan document, and your Change in Control Termination, as also defined in the Plan document, or a Termination of Employment by reason of a “Good Reason Resignation” which qualifies 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 (2) 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 Good Reason Resignation.

10.Termination of Employment as a Result of Divestiture or Outsourcing.  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, your Restricted Unit Award will vest pro rata (in full-month increments) based on (i) the number of whole months that you have completed from Grant Date through the closing date of the applicable transaction over the original number of months of the vesting period, times (ii) the total number of shares awarded under the Grant minus (iii) the number of shares previously vested.  Any payment shall be made to you as soon as practicable following the date you vest.

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) 

2

you are offered Comparable Employment 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 10, (a) “Comparable Employment” shall mean employment at a base salary rate and bonus target that is at least equal to the base salary rate and bonus target in effect immediately prior to your termination of employment and at a location that is no more than 50 miles from your job location in effect immediately prior to your termination of employment; (b) “Disposition of Assets” shall mean the disposition by the Company or a Subsidiary 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;  (c) “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, provided that such subsidiary or entity ceases to be an affiliated company as a result of such disposition; and (d) “Outsourcing Agreement” shall mean a written agreement between the Company or a Subsidiary and an unrelated third party (“Outsourcing Agent”) pursuant to which the Company transfers the performance of services previously performed by employees of the Company or Subsidiary to the Outsourcing Agent, and the Outsourcing Agreement includes an obligation of the Outsourcing Agent to offer employment to any employee whose employment is being terminated as a result of or in connection with said Outsourcing Agreement.

11.Withholdings; Tax Recovery.  The Company will have the right, prior to any issuance or delivery of Shares on your Restricted Units, to withhold or require from you the amount necessary to satisfy applicable tax requirements, as determined by the Committee.  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 necessary 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.

12.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.

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

(a)If you have been terminated 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 to such Units. In addition, 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 during the period beginning six (6) months prior to your Termination of Employment and ending on the 6 month anniversary of your Termination of Employment.

(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 (1) disclosed business confidential or proprietary information related to any business of the

3

Company or Subsidiary or (2) 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 and (a) such employment or consultation 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 (b) the Committee has not approved the arrangement in writing, any unvested Restricted Unit will immediately be rescinded, and you will forfeit any rights you have with respect to these Restricted Units 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 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.

15.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, upon 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 counsel of the Company.

16.Disposition of Securities.  By accepting the Award, you acknowledge that you have read and understand the Company’s policy, and are aware of and understand your obligations under federal securities laws in respect of trading in the Company’s securities.  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.

17.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 into these Terms and Conditions.  Capitalized terms used in these Terms and Conditions have the meaning set forth in the Plan, unless otherwise stated in these Terms and Conditions.  In the event of any conflict between the terms of the Plan and the terms of these Terms and Conditions, the Plan will control.  By accepting the Award, you acknowledge receipt of the Plan and the prospectus, as in effect on the date of these Terms and Conditions.

4

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 accepting the Award, you hereby give your explicit consent to the Company’s processing any such personal data and/or sensitive personal data.  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 are 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.  You understand 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.

19.No Contract of Employment or Promise of Future Grants.  By accepting 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 of your ordinary or expected salary or other compensation and 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 agree that you will not be entitled by way of damages for breach of contract, dismissal or compensation for loss of office or otherwise 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.

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 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.

21.Incorporation of Other Agreements.  These Terms and Conditions and the Plan constitute the entire understanding between you and the Company regarding the Restricted Units.  These Terms and Conditions supercede any prior agreements, commitments or negotiations concerning the Restricted Units.

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 the Agreement, which will remain in full force and effect.  Moreover, if any provision is found to be

5

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.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 (6) months following your Termination of Employment if the Company reasonable 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 (6) month delay period.

24.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.

By accepting this Award, you agree to 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; and

(ii)you understand and agree that these Terms and Conditions and the Plan constitute 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.

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 thirty (30) 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.

[·]

6

Tyco International Ltd.
2004 Stock and Incentive Plan (the “Plan”)

TERMS AND CONDITIONS

OF

RESTRICTED UNIT AWARD

RESTRICTED UNIT AWARD granted as of March 13, 2009 (the “Grant Date”).

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 one (1) Share of Common Stock.

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

4.Dividends.  Restricted Units are a promise to deliver Common Stock upon vesting.  For each Restricted Unit that is unvested, you will be credited with a Dividend Equivalent Unit (DEU) for any cash or stock 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 Units and shall be payable at the same time that the underlying Units are payable as provided herein.

5.Vesting.  Your Restricted Units will vest in full on [·].  No credit will be given for periods following Termination of Directorship, except as specifically provided herein. Except as otherwise provided in these Terms and Conditions, any payment shall be made to you as soon as practicable following the vesting date set forth in this Section 5.

6.Termination of Directorship.  Any Restricted Units that have not vested as of your Termination of Directorship pursuant to paragraphs 7 and 8 will immediately be forfeited, and your rights with respect to such Restricted Units will end. Termination of Directorship means the date of cessation of a Director’s relationship with the Company for any reason, with or without Cause, as determined by the Board.

7.Death or Disability.  If your Termination of Directorship is a result of your Death or Disability, your Award will become fully vested as of your Termination of Directorship.  Any payment shall be made to you as soon as practicable following your Termination of Directorship.  If you are deceased, the Company will make a payment to your

1

estate only after the Committee has determined that the payee is the duly appointed executor or administrator of your estate.

8.Change in Control.  In the event of a Change in Control of Tyco International Ltd., as defined in the Plan document, and your Termination of Directorship in connection with a Change in Control, Restricted Units will immediately become fully vested and payment shall be made as soon as practicable following such Termination of Directorship.

9.Withholdings; Tax Recovery.  The Company will have the right, prior to any issuance or delivery of Shares on your Restricted Units, to withhold or require from you the payment of the amount necessary to satisfy applicable tax requirements.

10.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.

11.Forfeiture of Award.  If your services as a Director of the Company have been terminated for Cause, any unvested Restricted Units shall be immediately rescinded and you will forfeit any rights you have with respect to such Units.

12.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 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.

13.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, upon 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 counsel of the Company.

14.Disposition of Securities.  By accepting the Award, you acknowledge that you have read and understand the Company’s policy, and are aware of and understand your obligations under federal securities laws, in respect of trading in the Company’s securities.  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.

15.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

2

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 into these Terms and Conditions.  Capitalized terms used in these Terms and Conditions have the meaning set forth in the Plan, unless otherwise stated in these Terms and Conditions.  In the event of any conflict between the terms of the Plan and the terms of these Terms and Conditions, the Plan will control.  By accepting the Award, you acknowledge receipt of the Plan and the prospectus, as in effect on the date of these Terms and Conditions.

16.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, you hereby give your explicit consent to the Company’s processing any such personal data and/or sensitive personal data.  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 perform services as a Director or reside and to the United States.  The legal persons for whom your personal data are 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 the Office of the Corporate Secretary.  You understand 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.

17.No Contract or Promise of Future Grants.  By accepting 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 service as a Board member with the Company or other compensation.   If your service as a Board member with the Company is terminated for any reason, whether lawfully or unlawfully, you agree that you will not be entitled by way of damages for breach of contract, dismissal or compensation for loss of office or otherwise 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.

18.Limitations.  Nothing in these Terms and Conditions or the Plan gives you any right to continue in the service as a Board member with the Company or any of its Subsidiaries.  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.

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

3

These Terms and Conditions supercede any prior agreements, commitments or negotiations concerning the Restricted Units.

20.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.

21.Sections 409A and 457A.  The award is intended to be an exempt “short-term deferral” under Sections 409A and 457A of the Internal Revenue Code of the United States. The Committee may make such modifications to these Terms and Conditions as it deems necessary or appropriate to ensure that the Award is exempt from Sections 409A and 457A.

By accepting this Award, you agree to 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; and

(ii)you understand and agree that these Terms and Conditions and the Plan constitute 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.

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 Tyco International Management Company, Attn: Equity Plan Administration, 9 Roszel Road, Princeton, NJ 08540 in writing within thirty (30) 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.

[·]

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EX-10.3

Exhibit 10.3

TYCO INTERNATIONAL

CHANGE IN CONTROL SEVERANCE PLAN FOR CERTAIN

U.S. OFFICERS AND EXECUTIVES

Amended and Restated as of January 1, 2009

ARTICLE I	BACKGROUND, PURPOSE AND TERM OF PLAN	1
Section 1.01	Purpose of the Plan	1
Section 1.02	Term of the Plan	1
Section 1.03	Compliance with Code Section 409A	1
ARTICLE II	DEFINITIONS	1
Section 2.01	“Annual Bonus”	1
Section 2.02	“Base Salary”	1
Section 2.03	“Board”	1
Section 2.04	“Cause”	1
Section 2.05	“Change in Control”	1
Section 2.06	“Change in Control Termination”	2
Section 2.07	“COBRA”	2
Section 2.08	“Code”	3
Section 2.09	“Committee”	3
Section 2.10	“Company”	3
Section 2.11	“Effective Date”	3
Section 2.12	“Eligible Employee”	3
Section 2.13	“Employee”	3
Section 2.14	“Employer”	3
Section 2.15	“ERISA”	3
Section 2.16	“Exchange Act”	3
Section 2.17	“Executive Severance Plan”	3
Section 2.18	“Good Reason Resignation”	3
Section 2.19	“Involuntary Termination”	4
Section 2.20	“Key Employee”	4
Section 2.21	“Notice Pay”	4
Section 2.22	“Officer”	4
Section 2.23	“Participant”	5
Section 2.24	“Permanent Disability”	5
Section 2.25	“Plan”	5
Section 2.26	“Plan Administrator”	5
Section 2.27	“Postponement Period”	5
Section 2.28	“Potential Change in Control”	5
Section 2.29	“Release”	6
Section 2.30	“Segment President”	6
Section 2.31	“Service”	6
Section 2.32	“Separation from Service”	6
Section 2.33	“Separation from Service Date”	6
Section 2.34	“Severance Benefits”	6
Section 2.35	“Severance Period”	7
Section 2.36	“Subsidiary”	7
Section 2.37	“Successor”	7
Section 2.38	“Voluntary Resignation”	7

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ARTICLE III	PARTICIPATION AND ELIGIBILITY FOR BENEFITS	7
Section 3.01	Participation	7
Section 3.02	Conditions	7
ARTICLE IV	DETERMINATION OF SEVERANCE BENEFITS	9
Section 4.01	Amount of Severance Benefits Upon Involuntary Termination and Good Reason Resignation	9
Section 4.02	Voluntary Resignation; Termination Due to Death or Permanent Disability	11
Section 4.03	Termination for Cause	11
Section 4.04	Reduction of Severance Benefits	12
Section 4.05	Non-Duplication of Benefits	12
ARTICLE V	METHOD, DURATION AND LIMITATION OF SEVERANCE BENEFIT PAYMENTS	12
Section 5.01	Method of Payment	12
Section 5.02	Other Arrangements	13
Section 5.03	Code Section 409A	13
Section 5.04	Termination of Eligibility for Benefits	14
Section 5.05	Limitation on Benefits	14
ARTICLE VI	CONFIDENTIALITY AND NON-DISPARAGEMENT	15
Section 6.01	Confidential Information	15
Section 6.02	Non-Disparagement	16
Section 6.03	Reasonableness	16
Section 6.04	Equitable Relief	16
Section 6.05	Survival of Provisions	17
ARTICLE VII	THE PLAN ADMINISTRATOR	17
Section 7.01	Authority and Duties	17
Section 7.02	Compensation of the Plan Administrator	17
Section 7.03	Records, Reporting and Disclosure	17
ARTICLE VIII	AMENDMENT, TERMINATION AND DURATION	18
Section 8.01	Amendment, Suspension and Termination	18
Section 8.02	Duration	18
ARTICLE IX	DUTIES OF THE COMPANY AND THE COMMITTEE	18
Section 9.01	Records	18
Section 9.02	Payment	18
Section 9.03	Discretion	18
ARTICLE X	CLAIMS PROCEDURES	19
Section 10.01	Claim	19
Section 10.02	Initial Claim	19
Section 10.03	Appeals of Denied Administrative Claims	20
Section 10.04	Appointment of the Named Appeals Fiduciary	20

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Section 10.05	Arbitration; Expenses	20
ARTICLE XI	MISCELLANEOUS	21
Section 11.01	Nonalienation of Benefits	21
Section 11.02	Notices	21
Section 11.03	Successors	21
Section 11.04	Other Payments	21
Section 11.05	No Mitigation	21
Section 11.06	No Contract of Employment	22
Section 11.07	Severability of Provisions	22
Section 11.08	Heirs, Assigns, and Personal Representatives	22
Section 11.09	Headings and Captions	22
Section 11.10	Gender and Number	22
Section 11.11	Unfunded Plan	22
Section 11.12	Payments to Incompetent Persons	22
Section 11.13	Lost Payees	22
Section 11.14	Controlling Law	22
SCHEDULE A	SEVERANCE BENEFITS SALARY REPLACEMENT AND ANNUAL BONUS	A-1

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ARTICLE I

BACKGROUND, PURPOSE AND TERM OF PLAN

Section 1.01         Purpose of the Plan. The purpose of the Plan is to provide Eligible Employees with certain compensation and benefits as set forth in the Plan in the event the Eligible Employee’s employment with the Company or a Subsidiary is terminated due to a Change in Control Termination. The Plan is not intended to be an “employee pension benefit plan” or “pension plan” within the meaning of Section 3(2) of ERISA. Rather, this Plan is intended to be a “welfare benefit plan” within the meaning of Section 3(1) of ERISA and to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, section 2510.3-2(b). Accordingly, the benefits paid by the Plan are not deferred compensation and no employee shall have a vested right to such benefits.

Section 1.02         Term of the Plan. The Plan shall generally be effective as of the Effective Date, but subject to amendment from time to time in accordance with Section 8.01. The Plan shall continue until terminated pursuant to Article VIII of the Plan.

Section 1.03         Compliance with Code Section 409A. The terms of this Plan are intended to, and shall be interpreted so as to, comply in all respects with the provisions of Code Section 409A and the regulations and rulings promulgated thereunder.

ARTICLE II

DEFINITIONS

Section 2.01         “Annual Bonus” shall mean 100% of the Participant’s target annual bonus.

Section 2.02         “Base Salary” shall mean the annual base salary in effect as of the Participant’s Separation from Service Date.

Section 2.03         “Board” shall mean the Board of Directors of the Company, or any successor thereto, or a committee thereof specifically designated for purposes of making determinations hereunder.

Section 2.04         “Cause” shall mean (i) a material violation of any fiduciary duty owed to the Company, (ii) conviction of, or entry of a plea of nolo contendere with respect to, a felony or misdemeanor, (iii) dishonesty, (iv) theft, or (v) other egregious conduct, that is likely to have a materially detrimental impact on the Company and its employees. Whether an Eligible Employee’s termination is as a result of Cause shall be determined in the discretion of the Plan Administrator.

Section 2.05         “Change in Control” shall mean any of the following events:

(i)            any “person” (as defined in Section 13(d) and 14(d) of the Exchange Act, excluding for this purpose, (i) the Company or any subsidiary company (wherever incorporated) of the Company as defined by the law of the Company’s place of incorporation or (ii) any

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employee benefit plan of the Company or any such subsidiary company (or any person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan that acquires beneficial ownership of voting securities of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the Company representing more than 30 percent of the combined voting power of the Company’s then outstanding securities; provided, however, that no Change in Control will be deemed to have occurred as a result of a change in ownership percentage resulting solely from an acquisition of securities by the Company;

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

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

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

Section 2.06         “Change in Control Termination” shall mean a Participant’s Involuntary Termination or Good Reason Resignation that occurs during the period beginning 60 days prior to the date of a Change in Control and ending two years after the date of such Change in Control.

Section 2.07         “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder.

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Section 2.08         “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

Section 2.09         “Committee” shall mean the Compensation and Human Resources Committee of the Board or such other committee appointed by the Board to assist the Company in making determinations required under the Plan in accordance with its terms. The “Committee” may delegate its authority under the Plan to an individual or another committee.

Section 2.10         “Company” shall mean Tyco International Ltd. Unless it is otherwise clear from the context, Company shall generally include participating Subsidiaries.

Section 2.11         “Effective Date” shall mean January 1, 2009.

Section 2.12         “Eligible Employee” shall mean an Employee employed in the United States who is an Officer, a Segment President or a Corporate Vice-President in Career Band 1 or 2. If there is any question as to whether an Employee is deemed an Eligible Employee for purposes of the Plan, the Plan Administrator shall make the determination.

Section 2.13         “Employee” shall mean an individual employed by an Employer as a common law employee on the United States payroll of Tyco International Ltd. or a Subsidiary, and shall not include any person working for the Company through a temporary service or on a leased basis or who is hired by the Company as an independent contractor, consultant, or otherwise as a person who is not an employee for purposes of withholding federal employment taxes, as evidenced by payroll records or a written agreement with the individual, regardless of any contrary governmental or judicial determination or holding relating to such status or tax withholding.

Section 2.14         “Employer” shall mean the Company or any Subsidiary with respect to which this Plan has been adopted.

Section 2.15         “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

Section 2.16         “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.

Section 2.17         “Executive Severance Plan” shall mean the Tyco International Severance Plan for U.S. Officers and Executives (f/k/a the Tyco International (US) Inc. Severance Plan for U.S. Officers and Executives), which plan is superseded by this Plan in the event of any Participant’s Change in Control Termination.

Section 2.18         “Good Reason Resignation” shall mean any retirement or termination of employment by a Participant that is not initiated by the Company or any Subsidiary and that is caused by any one or more of the following events which occurs during the period beginning 60 days prior to the date of a Change in Control and ending two years after the date of such Change in Control:

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(i)            Without the Participant’s written consent, assignment to the Participant of any duties inconsistent in any material respect with the Participant’s authority, duties or responsibilities as in effect immediately prior to the Change in Control, or any other action by the Company which results in a material diminution in such authority, duties or responsibilities;

(ii)           Without the Participant’s written consent, a material change in the geographic location at which the Participant must perform services to a location which is more than 60 miles from the Participant’s principal place of business immediately preceding the Change in Control;

(iii)          Without the Participant’s written consent, a material reduction to the Participant’s base compensation and benefits, taken as a whole, as in effect immediately prior to the Change in Control; or

(iv)          The Company’s failure to obtain a satisfactory agreement from any Successor to assume and agree to perform the Company’s obligations to the Participant under this Plan, as contemplated in Section 11.03 herein.

Notwithstanding the foregoing, the Participant shall be considered to have a Good Reason Resignation only if the Participant provides written notice to the Company specifying in reasonable detail the events or conditions upon which the Participant is basing such Good Reason Resignation and the Participant provides such notice within 90 days after the event that gives rise to the Good Reason Resignation. Within 30 days after notice has been received, the Company shall have the opportunity, but shall have no obligation, to cure such events or conditions that give rise to the Good Reason Resignation. If the Company does not cure such events or conditions within the 30-day period, the Participant may terminate employment with the Company based on Good Reason Resignation within 30 days after the expiration of the cure period.

Section 2.19         “Involuntary Termination” shall mean the date that a Participant involuntarily separates from service with the Company and its Affiliates within the meaning of Code Section 409A and shall not include a separation from service for Cause, Permanent Disability or death, as provided under and subject to the conditions of Article III.

Section 2.20         “Key Employee” shall mean an Employee who, at any time during the 12-month period ending on the identification date, is a “specified employee” under Code Section 409A, as determined by the Committee or its delegate. The determination of Key Employees, including the number and identity of persons considered specified employees and the identification date, shall be made by the Committee or its delegate in accordance with the provisions of Code Section 409A and the regulations promulgated thereunder.

Section 2.21         “Notice Pay” shall mean the amounts that a Participant is eligible to receive pursuant to Article IV of the Plan.

Section 2.22         “Officer” shall mean any individual who is an officer of an Employer, and who is considered an officer for purposes of Rule 16a-1(f) as promulgated under the Exchange Act immediately before the Change in Control.

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Section 2.23         “Participant” shall mean any Eligible Employee who meets the requirements of Article III and thereby becomes eligible for salary replacement and other benefits under the Plan.

Section 2.24         “Permanent Disability” shall mean that an Employee has a permanent and total incapacity from engaging in any employment for the Employer for physical or mental reasons. A “Permanent Disability” shall be deemed to exist if the Employee meets the requirements for disability benefits under the Employer’s long-term disability plan or under the requirements for disability benefits under the Social Security law (or similar law outside the United States, if the Employee is employed in that jurisdiction) then in effect, or if the Employee is designated with an inactive employment status at the end of a disability or medical leave.

Section 2.25         “Plan” means the Tyco International Change in Control Severance Plan for Certain U.S. Officers and Executives (f/k/a the Tyco International (US) Inc. Change in Control Severance Plan for Certain U.S. Officers and Executives) as set forth herein, and as the same may from time to time be amended.

Section 2.26         “Plan Administrator” shall mean, for the period prior to a Potential Change in Control, the individual(s) appointed by the Committee to administer the terms of the Plan as set forth herein and if no individual is appointed by the Committee to serve as the Plan Administrator for the Plan, the Plan Administrator shall be the Senior Vice President - Human Resources, Tyco International Management Company (or the equivalent). In the event of the occurrence of a Potential Change in Control, the Senior Vice-President, Human Resources - Tyco International Management Company (or the equivalent) shall appoint a person or entity independent of the Company and any person operating under the Company’s control or on its behalf to serve as Plan Administrator (and such person or entity shall be the Plan Administrator for all purposes after such appointment), and such appointment shall take effect and become irrevocable as of the date of said appointment (provided that such appointment shall be revocable if a Change in Control does not occur and the Potential Change in Control expires in accordance with Section 2.26(y)). For periods prior to a Potential Change in Control, the Plan Administrator may delegate all or any portion of its authority under the Plan to any other person(s).

Section 2.27         “Postponement Period” shall mean, for a Key Employee, the period of six months after the Key Employee’s Separation from Service Date (or such other period as may be required by Code Section 409A) during which deferred compensation may not be paid to the Key Employee under Code Section 409A.

Section 2.28         “Potential Change in Control” shall mean the occurrence and continuation of any of the following: (a) any “person” (as defined in Section 13(d) and 14(d) of the Exchange Act), excluding for this purpose, (i) the Company or any subsidiary company (wherever incorporated) of the Company as defined by the law of the Company’s place of incorporation , as amended or (ii) any employee benefit plan of the Company or any such subsidiary company (or any person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan that acquires beneficial ownership of voting securities of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities of the Company representing more than 5 percent of the combined voting power of the Company’s then outstanding securities unless such Person has reported or is

5

required to report such ownership on Schedule 13G under the Exchange Act (or any comparable or successor report) or on Schedule 13D under the Exchange Act (or any comparable or successor report), which Schedule 13D does not state any intention to or reserve the right to control or influence the management or policies of the Company or engage in any of the actions specified in Item 4 of such Schedule (other than the disposition of the common stock) so long as such Person neither reports nor is required to report such ownership other than as described in this paragraph; provided, however, that a Potential Change in Control will not be deemed to have occurred as a result of a change in ownership percentage resulting solely from an acquisition of securities by the Company, (b) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control, (c) any “person” (as defined in subsection(a)) publicly announces an intention to take or to consider taking actions which, if consummated, would constitute or result in a Change in Control, (d) any person (as defined in subsection (a)) commences a solicitation (as defined in Rule 14a-1 of the Exchange Act) of proxies or consents that has the purpose of effecting or would (if successful) result in a Change in Control, (e) a tender or exchange offer for at least 30% of the outstanding voting securities of the Company, made by a “person” (as defined in subsection (a)), is first published or sent or given (within the meaning of Rule 14d-2(a) of the Exchange Act), or (f) the Board adopts a resolution to the effect that, for purposes of the Plan, a Potential Change in Control has occurred. The Potential Change in Control shall be deemed in effect until the earlier of (x) the occurrence of a Change in Control, or (y) the adoption by the Board of a resolution stating that, for purposes of the Plan, the Potential Change in Control has expired.

Section 2.29         “Release” shall mean the Separation of Employment Agreement and General Release, as provided by the Company.

Section 2.30         “Segment President” shall mean an Officer who is not employed by the corporate office, but who is a president of one of the Company’s business segments.

Section 2.31         “Service” shall mean the total number of years and completed months the Participant was an Employee of the Company. Service with any predecessor employer or with a Subsidiary prior to the Subsidiary’s becoming part of the Company shall be recognized only to the extent specified in the merger or acquisition documentation relating to the Subsidiary or other applicable governing documents. Periods of authorized leave of absence, such as military leave, will be included in Service only to the extent required by applicable law. Any period of employment with the Company, a Subsidiary, or a predecessor employer for which an Eligible Employee previously received severance benefits, shall be excluded from Service.

Section 2.32         “Separation from Service” means “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and the applicable regulations and ruling promulgated thereunder.

Section 2.33         “Separation from Service Date” shall mean, with respect to a Participant, the date on which such Participant experiences a Separation from Service.

Section 2.34         “Severance Benefits” shall mean the salary and bonus replacement amounts and other benefits that a Participant is eligible to receive pursuant to Article IV of the Plan.

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Section 2.35         “Severance Period” shall mean the period for which a Participant is entitled to receive non-cash Severance Benefits under this Plan, as follows:  Corporate Officers - 36 months; Segment Presidents - 24 months; and Corporate Vice Presidents (in Career Band 1 or 2) - 18 months.

Section 2.36         “Subsidiary” shall mean (i) a subsidiary company (wherever incorporated) as defined by the law of the Company’s place of incorporation, (ii) any separately organized business unit, whether or not incorporated, of the Company, (iii) any employer that is required to be aggregated with the Company pursuant to section 414 of the Internal Revenue Code of 1986, as amended, and regulations issued thereunder, and (iv) any service recipient or employer that is within a controlled group of corporations with the Company as defined in Code Sections 1563(a)(1), (2) and (3) where the phrase “at least 50%” is substituted in each place “at least 80%” appears or is with the Company as part of a group of trades or businesses under common control as defined in Code Section 414(c) and Treas. Reg. Section 1.414(c)-2 where the phrase “at least 50%” is substituted in each place “at least 80%” appears, provided, however, that when the relevant determination is to be based upon legitimate business criteria (as described in Treas. Reg. Section 1.409A-1(b)(5)(iii)(E) and Section 1.409A-1(h)(3)), the phrase “at least 20%” shall be substituted in each place “at least 80%” appears as described above with respect to both a controlled group of corporations and trades or business under common control.

Section 2.37         “Successor” shall mean any other corporation or unincorporated entity or group of corporations or unincorporated entities which acquires ownership, directly or indirectly, through merger, consolidation, purchase or otherwise, of all or substantially all of the assets of the Company.

Section 2.38         “Voluntary Resignation” shall mean any Separation from Service that is not initiated by the Company or any Subsidiary other than a Good Reason Resignation.

ARTICLE III

PARTICIPATION AND ELIGIBILITY FOR BENEFITS

Section 3.01         Participation.  Each Eligible Employee in the Plan who incurs a Change in Control Termination and who satisfies the conditions of Section 3.02 shall be eligible to receive the Severance Benefits described in the Plan, subject however, to the application of the non-duplication provisions of Section 4.05.

Section 3.02         Conditions.

(a)           Eligibility for any Severance Benefits is expressly conditioned on the occurrence of the following within 60 days after the Participant’s Separation from Service Date: (i) execution by the Participant of a Release in the form provided by the Company; (ii) compliance by the Participant with all the terms and conditions of such Release; (iii) the Participant’s written agreement to the confidentiality and non-disparagement provisions in Article VI during and after the Participant’s employment with the Company; and (iv) to the extent permitted in Section 4.04 of the Plan, execution of a written agreement that authorizes the

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deduction of amounts owed to the Company prior to the payment of any Severance Benefits (or in accordance with any other schedule as is agreed between the Participant and the Company).  If the Plan Administrator determines that the Participant has not fully complied with any of the terms of the Release, the Plan Administrator may withhold Severance Benefits not yet in pay status or discontinue the payment of the Participant’s Severance Benefits and may require the Participant, by providing written notice of such repayment obligation to the Participant, to repay any portion of the Severance Benefits already received under the Plan.  If the Plan Administrator notifies a Participant that repayment of all or any portion of the Severance Benefits received under the Plan is required, such amounts shall be repaid within thirty (30) calendar days of the date the written notice is sent, provided, however, that if the Participant files an appeal of such determination under the claims procedures described in Article X, then such repayment obligation shall be suspended pending the outcome of the appeals procedure.  Any remedy under this subsection (a) shall be in addition to, and not in place of, any other remedy, including injunctive relief, that the Company may have.

(b)          An Eligible Employee will not be eligible to receive Severance Benefits under any of the following circumstances:

(i)            The Eligible Employee’s Voluntary Resignation;

(ii)           The Eligible Employee resigns employment (other than a Good Reason Resignation) before the job-end date mutually agreed to in writing between the Participant and the Employer, including any extension thereto as is mutually agreed to in writing between the parties;

(iii)          The Eligible Employee’s employment is terminated for Cause;

(iv)          The Eligible Employee’s employment is terminated due to the Eligible Employee’s death or Permanent Disability;

(v)           The Eligible Employee does not return to work within the period prescribed by law (or if there is no such period prescribed by law, then within a reasonable period as is determined by the Plan Administrator) following an approved leave of absence, unless such period is extended by mutual written agreement of the parties; or

(vi)          The Eligible Employee does not satisfy the Conditions for Severance in Section 3.02(a);

(vii)         The Eligible Employee’s employment with the Employer terminates as a result of a Change in Control and the Eligible Employee accepts employment, or has the opportunity to continue employment, with a Successor (other than under terms and conditions which would permit a Good Reason Resignation).

(c)          The Plan Administrator has the discretion to make initial determinations regarding an Eligible Employee’s eligibility to receive Severance Benefits hereunder.

(d)          An Eligible Employee returning from approved military leave during the period beginning 60 days before a Change in Control and ending two years after a Change in

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Control will be eligible for Severance Benefits if: (i) he/she is eligible for reemployment under the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA); (ii) his/her pre-military leave job is eliminated; and (iii) the Employer’s circumstances are changed so as to make reemployment in another position impossible or unreasonable, or re-employment would create an undue hardship for the Employer.  If the Eligible Employee returning from military leave qualifies for Severance Benefits, his/her severance benefits will be calculated as if he/she had remained continuously employed from the date he/she began his/her military leave.  The Eligible Employee must also satisfy any other relevant conditions for payment, including execution of a Release.

ARTICLE IV

DETERMINATION OF SEVERANCE BENEFITS

Section 4.01         Amount of Severance Benefits Upon Involuntary Termination and Good Reason Resignation.  The Severance Benefits to be provided to an Eligible Employee who incurs a Change in Control Termination and is determined to be eligible for Severance Benefits shall be as follows:

(a)           Notice Pay.  Except for Officers, each Eligible Employee who meets the eligibility requirements for Severance Benefits under Section 3.01 shall receive 30 calendar days notice as a Notice Period.  In the event that the Company determines that a Participant’s last day of work shall be prior to the end of his or her Notice Period, such Employee shall be entitled to pay in lieu of notice for the balance of such Notice Period.  Notice Pay paid to a Participant shall be in addition to, and not offset against, the Severance Benefits the Participant may be entitled to receive under this Article IV.  An Eligible Employee who does not sign, or who revokes his or her signature on, a Release shall only be eligible for Notice Pay.  Unless otherwise permitted by the applicable plan documents or laws, an Eligible Employee will not be eligible to apply for short-term disability, long-term disability and/or workers’ compensation anytime after the Eligible Employee’s last active day at work.

(b)           Salary Replacement Benefits.  Salary replacement benefits shall be provided to the Participant in an amount as set forth in Schedule A appended to the Plan.

(c)           Bonus.

(i)           The Participant shall receive a cash payment equal to his or her pro rated Annual Bonus (based on the number of full months completed from the beginning of the fiscal year through the Separation from Service) for the year in which Participant’s Separation from Service occurs, pursuant to the terms set forth in the applicable incentive plans; provided, however, that to the extent that a bonus payment for such period is paid as a result of a Change in Control under the terms of such other incentive plan, then the amount otherwise payable under this Section 4(c) will be offset by the payment made under such other incentive plan.

(ii)          The Participant shall also receive a cash payment equal to his or her Annual Bonus in an amount as set forth in Schedule A appended to the Plan.

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(d)           Medical, Dental and Health Care Reimbursement Account Benefits.  The Participant shall continue to be eligible to participate in the medical, dental and Health Care Reimbursement Account coverage in effect at the date of his or her termination (or generally comparable coverage) for himself or herself and, where applicable, his or her spouse or domestic partner and dependents, as the same may be changed from time to time for employees of the Company generally, as if Participant had continued in employment during the lesser of (i) the Severance Period or (ii) twelve (12) months.  The Participant shall be responsible for the payment of the employee portion of the medical, dental and Health Care Reimbursement Account contributions that are required during the Severance Period and such contributions shall be made within the time period and in the amounts that other employees are required to pay to the Company for similar coverage.  The Participant’s failure to pay the applicable contributions shall result in the cessation of the applicable medical and dental coverage for the Participant and his or her spouse or domestic partner and dependents.  In the event that the Severance Period exceeds twelve months, the Participant will receive a cash lump-sum payment from the Company equal to the projected value of the employer portion of the premiums for medical and dental benefits for the time period between the end of the Coverage Period and the remainder of the Severance Period.  Such payment shall be made within sixty (60) days following the end of the Coverage Period.  Notwithstanding any other provision of this Plan to the contrary, in the event that a Participant commences employment with another company at any time during the Severance Period, the Participant may cease receiving coverage under the Company’s medical and dental plans.  Within thirty (30) days of Participant’s commencement of employment with another company, Participant shall provide the Company written notice of such employment and provide information to the Company regarding the medical and dental benefits provided to Participant by his or her new employer.  The COBRA continuation coverage period under section 4980B of the Code shall run concurrently with the Severance Period.

(e)           Stock Options.  All stock options held by the Participant as of his or her Separation from Service Date that were granted prior to the Change in Control and that are not already vested and exercisable as of such date shall become vested and exercisable upon a Change in Control Termination.  All outstanding stock options held by Participant that were granted prior to the Change in Control and that are vested and exercisable as of the Separation from Service Date and all stock options held by the Participant that become vested and exercisable under the preceding sentence shall be exercisable for the greater of (i) the period set forth in Participant’s option agreement covering such options, or (ii) twelve (12) months from the Separation from Service Date.  In no event, however, shall an option be exercisable beyond its original expiration date.

(f)            Restricted Stock, Restricted Units and Performance Units.  All restricted stock, restricted stock units and performance units held by the Participant as of his or her Separation from Service Date shall be treated as provided under and in accordance with the Tyco International Ltd. 2004 Stock and Incentive Plan, as amended, modified to the extent provided in the terms and conditions of the applicable award certificate.

(g)           Outplacement Services.  The Company will pay the cost of outplacement services for the Participant for a period of twelve (12) months from Participant’s Separation from Service Date.  The Company shall pay the cost of outplacement services at either (i) the outplacement agency that the Company regularly uses for such purpose or (ii) the outplacement

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agency selected by the Participant; provided, however, that the Company will be responsible to pay no more than the cost that would have been incurred had the Participant used the outplacement agency that the Company regularly uses for such purpose.

(h)          Application of Other Plan Provisions.  If any applicable equity compensation or incentive plan or grant instrument, without regard to (c), (e) or (f) above, provides the Participant the right to accelerated vesting or payment of cash incentive awards, stock options, restricted stock, restricted stock units or incentive awards, and/or an extension of the otherwise applicable option exercise period, in the case of termination of employment following a Change in Control, then the Participant’s right to accelerated payment, vesting or extension of the option exercise period shall be determined by whichever of the plan, grant instrument or the provisions of (c), (e) or (f) above provides the most favorable vesting or exercise rights for the Participant in such event.

Section 4.02         Voluntary Resignation; Termination Due to Death or Permanent Disability.  If the Eligible Employee’s employment terminates on account of (i) the Eligible Employee’s Voluntary Resignation, (ii) death, or (iii) Permanent Disability, then the Eligible Employee shall not be entitled to receive Severance Benefits under this Plan and shall be entitled only to those benefits (if any) as may be available under the Company’s then-existing benefit plans and policies at the time of such termination.

Section 4.03         Termination for Cause.

(a)           If any Eligible Employee’s employment terminates on account of termination by the Company for Cause, the Eligible Employee shall not be entitled to receive Severance Benefits under this Plan and shall be entitled only to those benefits that are legally required to be provided to the Eligible Employee.  Notwithstanding any other provision of the Plan to the contrary, if the Committee or the Plan Administrator determines that an Eligible Employee has engaged in conduct that constitutes Cause at any time prior to the Eligible Employee’s Separation from Service Date, any Severance Benefits payable to the Eligible Employee under Section 4.01 of the Plan shall immediately cease, and the Eligible Employee shall be required to return any Severance Benefits paid to the Eligible Employee prior to such determination.  The Company may withhold paying Severance Benefits under the Plan pending resolution of any good faith inquiry that is likely to lead to a finding resulting in Cause.  If the Company has offset other payments owed to the Eligible Employee under any other plan or program, it may, in its sole discretion, waive its repayment right solely with respect to the amount of the offset so credited.

(b)          Any dispute regarding a termination for Cause will be resolved by the Plan Administrator.  Such determination will be based on all of the facts and circumstances presented to the Plan Administrator by the Company.  If the Plan Administrator determines that the Eligible Employee’s termination of employment is for Cause, then the Plan Administrator will notify the Eligible Employee in writing of such determination, describing in detail the reason for such determination, including without limitation the specific conduct that constituted the basis for the determination.  The Eligible Employee shall have the right to contest the determination of the Plan Administrator in accordance with the Appeals Procedure described in Section 10.03.

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Section 4.04         Reduction of Severance Benefits.  With respect to amounts paid under the Plan that are not subject to Code Section 409A and the regulations promulgated thereunder, the Plan Administrator reserves the right to make deductions in accordance with applicable law for any monies owed to the Company by the Participant or the value of Company property that the Participant has retained in his/her possession.  With respect to amounts paid under the Plan that are subject to Code Section 409A and the regulations promulgated thereunder, the Plan Administrator reserves the right to make deductions in accordance with applicable law for any monies owed to the Company by the Participant or the value of the Company property that the Participant has retained in his/her possession; provided, however, that such deduction cannot exceed $5,000 in the aggregate.

Section 4.05         Non-Duplication of Benefits.  The Plan is intended to supersede, and not to duplicate, the provisions of the Tyco International Severance Plan for U.S. Officers and Executives (“Executive Severance Plan”) in any case in which an Eligible Employee would otherwise be entitled to severance or related benefits under both this Plan and the Executive Severance Plan arising out of the Eligible Employee’s Change in Control Termination.  However, the Plan is not intended to supersede any other plan, program, arrangement or agreement providing an Eligible Employee with severance or related benefits in the case of an Eligible Employee’s Change in Control Termination.  In the event that an Eligible Employee becomes entitled to receive benefits under this Plan and any such benefit duplicates a benefit that would otherwise be provided under any other plan, program, arrangement or agreement as a result of the Eligible Employee’s Change in Control Termination, then the Eligible Employee shall be entitled to receive the greater of the benefit available under the Plan, on the one hand, and the benefit available under such other plan, program, arrangement or agreement, on the other.

ARTICLE V

METHOD, DURATION AND LIMITATION OF SEVERANCE BENEFIT PAYMENTS

Section 5.01         Method of Payment.  The cash Severance Benefits to which a Participant is entitled, as determined pursuant to Section 4.01, shall be paid in a single lump sum payment within sixty (60) days following the Participant’s Severance from Service Date, subject to the fulfillment of all conditions for payment set forth in Section 3.02 and subject to the expiration of the Release revocation period specified in the Release; provided, however, that the annual bonus amount payable pursuant to Section 4.01(c)(i) shall be paid at the same time as bonuses would be payable under the applicable bonus or incentive plan or program.  In no event will interest be credited on the unpaid balance for which a Participant may become eligible.  Payment shall be made by mailing to the last address provided by the Participant to the Company or such other reasonable method as determined by the Plan Administrator.  Notwithstanding the foregoing, if the Participant’s Separation from Service is either (i) prior to the date of a Change in Control, or (ii) following a Change in Control that does not qualify as a “change in control” under Code Section 409A and the regulations promulgated thereunder, then any portion of the Severance Benefits payable under this Plan that is (i) subject to Code Section 409A and the regulations promulgated thereunder and (ii) equals the amount of benefit the Participant could be eligible to receive under the Executive Severance Plan (if the Participant were to satisfy the eligibility requirements in order to receive a benefit under that plan), shall be paid at the same time and in

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the same form as under the Executive Severance Plan.  In no event will interest be credited on the unpaid balance for which a Participant may become eligible.  Payment shall be made by mailing to the last address provided by the Participant to the Company or such other reasonable method as determined by the Plan Administrator.  All payments of Severance Benefits are subject to applicable federal, state and local taxes and withholdings.  In the event of the Participant’s death prior to payment being made, the amount of such payment shall be paid to the Participant’s estate in a single lump-sum payment within thirty (30) days following the Participant’s death.

Section 5.02         Other Arrangements.  The provisions of this Plan may provide for payments to the Eligible Employee under certain compensation or bonus plans under circumstances where such plans would not otherwise provide for payment thereof.  It is the specific intention of the Company that the provisions of this Plan shall supersede any provisions to the contrary in such plans, to the extent permitted by applicable law, and such plans shall be deemed to be have been amended to correspond with this Plan without further action by the Company or the Board.

Section 5.03         Code Section 409A.

(a)           Notwithstanding any provision of the Plan to the contrary, if required by Code Section 409A and if a Participant is a Key Employee, no Benefits shall be paid to the Participant during the Postponement Period.  If a Participant is a Key Employee and payment of Benefits is required to be delayed for the Postponement Period under Code Section 409A, the accumulated amounts withheld on account of Code Section 409A shall be paid in a lump sum payment within 30 days after the end of the Postponement Period and no interest or other adjustment shall be made for the delayed payment.  If the Participant dies during the Postponement Period prior to the payment of Benefits, the amounts withheld on account of Code Section 409A shall be paid to the Participant’s estate within thirty (30) days after the Participant’s death.

(b)           This Agreement is intended to meet the requirements of the “short-term deferral” exception, the “separation pay” exception and other exceptions under Code Section 409A and the regulations promulgated thereunder.  Notwithstanding anything in this Plan to the contrary, if required by Code Section 409A, payments may only be made under this Plan upon an event and in a manner permitted by Code Section 409A, to the extent applicable.  For purposes of Code Section 409A, the right to a series of payments under the Plan shall be treated as a right to a series of separate payments.  All reimbursements and in-kind benefits provided under the Plan shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in the Plan, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.  In no event may a Participant designate the year of payment for any amounts payable under the Plan.

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Section 5.04         Termination of Eligibility for Benefits.

(a)           All Eligible Employees shall cease to be eligible to participate in the Plan, and all Severance Benefits payments shall cease upon the occurrence of the earlier of:

(i)            Subject to Article VIII, termination or modification of the Plan; or

(ii)           Completion of any obligation of the Company or its Subsidiaries to make any payment or distribution under Article IV for the benefit of the Participant.

(b)           Notwithstanding anything herein to the contrary, the Company shall have the right to cease all Severance Benefits payments and to recover payments previously made to the Participant should the Participant at any time breach the Participant’s undertakings under the terms of the Plan, the Release the Participant executed to obtain the Severance Benefits under the Plan or the confidentiality and non-disparagement provisions of Article VI.

Section 5.05         Limitation on Benefits.

(a)           Anything in the Plan to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company or its Subsidiaries to or for the benefit of a Participant (whether paid or provided pursuant to the terms of this Plan or otherwise) (a “Payment”) would be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of the benefits provided to the Participant pursuant to the rights granted under this Plan (such benefits are hereinafter referred to as “Plan Payments”) shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Plan Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code.  For purposes of this Section 5.05, present value shall be determined in accordance with Section 280G(d)(4) of the Code.  To the extent necessary to eliminate an excess parachute amount that would not be deductible by the Company for Federal income tax purposes because of Section 280G of the Code, the amounts payable or benefits to be provided to the Participant shall be reduced such that the economic loss to the executive as a result of the excess parachute amount elimination is minimized.  In applying this principle, the reduction shall be made in a manner consistent with the requirements of section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.

(b)           If the Firm (as defined in Section 5.05(c)) determines that the payments to the Participant (before any reductions as described in Section 5.05(a)) on an after-tax basis (i.e., after federal, state and local income and excise taxes and federal employment taxes) would exceed the Reduced Amount on an after-tax basis (i.e., after federal, state and local income and federal employment taxes) then such payments will not be reduced as is described in Section 5.05(a).

(c)           All determinations required to be made under this Section 5.05 shall be made by a nationally recognized accounting or consulting firm selected by the Senior Vice-President, Human Resources Tyco International Management Company (or the equivalent) upon the occurrence of a Potential Change in Control (the “ Firm”), which shall provide detailed

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supporting calculations both to the Company and the Participant within fifteen (15) business days of the Separation from Service Date or such earlier time as is requested by the Company.  Any such determination by the Firm shall be binding upon the Company, its successors and the Participant (subject to (e) below).  Within five (5) business days of the determination by the Firm as to the Reduced Amount, the Company shall provide to the Participant such Payments as are then due to the Participant in accordance with the rights afforded under this Plan or any other applicable plan.

(d)           The Company shall reimburse the Participant for any costs or expenses of tax counsel incurred by the Participant in connection with any audit or investigation by the Internal Revenue Service, or any state or local tax authorities, concerning the application of Code Section 280G to any Payments (provided, that the Participant retains tax counsel acceptable to the Company).  In the event that as a result of any such audit or investigation, the reduction in Plan Payments under (a) above is finally determined not to be sufficient in amount to permit the deduction by the Company of all Payments under Code Section 280G, then the Company shall pay the Participant an additional amount which shall be sufficient to put the Participant, after payment of any additional income, employment and excise taxes, interest and penalties, in substantially the same economic position as if the reduction had been sufficient.  Notwithstanding anything herein to the contrary, any reimbursement or payment pursuant to this Section 5.05(d) shall be made in a manner, and in such timeframe, that complies with the requirements of Treasury Regulations Section 1.409A-3(i)(1)(v).

(e)           In the event that the Firm determines that a reduction effected pursuant to (a) above was excessive in amount due to changes in relevant data or information following its original determination under (c) above (including, without limitation, any recalculation regarding the value of stock options as contemplated under Rev. Proc. 2003-68, Section 3.04), and that additional Plan Payments could have been made thereunder, the Company shall promptly make such additional payments to the Participant.

ARTICLE VI

CONFIDENTIALITY AND NON-DISPARAGEMENT

Section 6.01         Confidential Information.  The Participant agrees that he or she shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the Participant’s assigned duties and for the benefit of the Company, either during the period of the Participant’s employment or at any time thereafter, any nonpublic, proprietary or confidential information, knowledge or data relating to the Company, any of its Subsidiaries, affiliated companies or businesses, which shall have been obtained by the Participant during the Participant’s employment by the Company or a Subsidiary.  The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to the Participant; (ii) becomes known to the public subsequent to disclosure to the Participant through no wrongful act of the Participant or any representative of the Participant; or (iii) the Participant is required to disclose by applicable law, regulation or legal process (provided that the Participant provides the Company with prior notice of the contemplated disclosure and reasonably cooperates with the Company at its expense in seeking a protective order or other

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appropriate protection of such information).  Notwithstanding clauses (i) and (ii) of the preceding sentence, the Participant’s obligation to maintain such disclosed information in confidence shall not terminate where only portions of the information are in the public domain.

Section 6.02         Non-Disparagement.  Each of the Participant and the Company (for purposes hereof, the Company shall mean only the executive officers and directors thereof and not any other employees) agrees not to make any statements that disparage the other party, or in the case of the Company or its Subsidiaries, their respective affiliates, employees, officers, directors, products or services.  Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to this Section 6.02.

Section 6.03         Reasonableness.  In the event the provisions of this Article VI shall ever be deemed to exceed the time, scope or geographic limitations permitted by applicable laws, then such provisions shall be reformed to the maximum time, scope or geographic limitations, as the case may be, permitted by applicable laws.

Section 6.04         Equitable Relief.

(a)           By participating in the Plan, the Participant acknowledges that the restrictions contained in this Article VI are reasonable and necessary to protect the legitimate interests of the Company, its Subsidiaries and its affiliates, that the Company would not have established this Plan in the absence of such restrictions, and that any violation of any provision of this Article VI will result in irreparable injury to the Company.  By agreeing to participate in the Plan, the Participant represents that his or her experience and capabilities are such that the restrictions contained in this Article VI will not prevent the Participant from obtaining employment or otherwise earning a living at the same general level of economic benefit as is currently the case.  The Participant further represents and acknowledges that (i) he or she has been advised by the Company to consult his or her own legal counsel in respect of this Plan, and (ii) that he or she has had full opportunity, prior to agreeing to participate in this Plan, to review thoroughly this Plan with his or her counsel.  The Company likewise acknowledges that the restrictions contained in Section 6.02 are necessary to protect the legitimate interests of the Participant, and that any violation of Section 6.02 by the Company will result in irreparable injury to the Participant.

(b)           The Participant agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Article VI, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.  In the event that any of the provisions of this Article VI should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law.

(c)           The Participant irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of this Article VI, including without limitation, any

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action commenced by the Company for preliminary and permanent injunctive relief or other equitable relief, may be brought in the United States District Court for the District of New York, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New York, (ii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives any objection which Participant may have to the laying of venue of any such suit, action or proceeding in any such court.  Participant also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers in a manner permitted by the notice provisions of Section 11.02.

Section 6.05Survival of Provisions.  The obligations contained in this Article VI shall survive the termination of Participant’s employment with the Company or a Subsidiary and shall be fully enforceable thereafter.

ARTICLE VII

THE PLAN ADMINISTRATOR

Section 7.01Authority and Duties.  It shall be the duty of the Plan Administrator, on the basis of information supplied to it by the Company and the Committee, to properly administer the Plan.  The Plan Administrator shall have the full power, authority and discretion to construe, interpret and administer the Plan, to make factual determinations, to correct deficiencies therein, and to supply omissions.  All decisions, actions and interpretations of the Plan Administrator shall be final, binding and conclusive upon the parties with respect to denied claims for Severance Benefits, except in those cases where such determination is subject to review by the Named Appeals Fiduciary (as defined in Section 10.04).  The Plan Administrator may adopt such rules and regulations and may make such decisions as it deems necessary or desirable for the proper administration of the Plan.

Section 7.02Compensation of the Plan Administrator.  The Plan Administrator appointed for periods prior to a Potential Change in Control shall receive no compensation for services as such.  The Plan Administrator appointed for periods on and after a Potential Change in Control will be entitled to receive reasonable compensation as is mutually agreed upon between the parties.  All reasonable expenses of the Plan Administrator shall be paid or reimbursed by the Company upon proper documentation.  The Plan Administrator shall be indemnified by the Company against personal liability for actions taken in good faith in the discharge of the Plan Administrator’s duties.

Section 7.03Records, Reporting and Disclosure.  The Plan Administrator shall keep a copy of all records relating to the payment of Severance Benefits to Participants and former Participants and all other records necessary for the proper operation of the Plan.  All Plan records shall be made available to the Committee, the Company and to each Participant for examination during business hours except that a Participant shall examine only such records as pertain exclusively to the examining Participant and to the Plan.  The Plan Administrator shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code, and every other relevant statute, each as amended, and all regulations thereunder (except that the Company, as payor of the Severance Benefits, shall

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prepare and distribute to the proper recipients all forms relating to withholding of income or wage taxes, Social Security taxes, and other amounts that may be similarly reportable).

ARTICLE VIII

AMENDMENT, TERMINATION AND DURATION

Section 8.01Amendment, Suspension and Termination.  Except as otherwise provided in this Section 8.01, the Board or its delegee shall have the right, at any time and from time to time prior to the occurrence of a Potential Change in Control (and after the Potential Change in Control has expired in accordance with Section 2.26(y)), to amend, suspend or terminate the Plan in whole or in part, for any reason or without reason, and without either the consent of or the prior notification to any Participant, by a formal written action.  After the occurrence of a Potential Change in Control, the Board or its delegee shall have the right to amend the Plan, provided however, that (a) in no event shall any amendment give the Company the right to recover any amount paid to a Participant prior to the date of such amendment or to cause the cessation of Severance Benefits already approved for a Participant who has executed a Release as required under Section 3.02 and (b) the Plan may not be amended in any manner that adversely affects any right of a Participant or Eligible Employee without the written consent of such Participant or Eligible Employee.  Any amendment or termination of the Plan must comply with all applicable legal requirements including, without limitation, compliance with Code Section 409A and the regulations and ruling promulgated thereunder, securities, tax, or other laws, rules, regulations or regulatory interpretations thereof, applicable to the Plan.

Section 8.02Duration.  The Plan shall continue in full force and effect until termination of the Plan pursuant to Section 8.01; provided, however, that after the termination of the Plan, if any Participants terminated employment on account of an Involuntary Termination prior to the termination of the Plan and are still receiving Severance Benefits under the Plan, the Plan shall remain in effect until all of the obligations of the Company are satisfied with respect to such Participants.

ARTICLE IX

DUTIES OF THE COMPANY AND THE COMMITTEE

Section 9.01Records.  The Company or a Subsidiary thereof shall supply to the Committee all records and information necessary to the performance of the Committee’s duties.

Section 9.02Payment.  Payments of Severance Benefits to Participants shall be made in such amount as determined by the Committee under Article IV, from the Company’s general assets or from a supplemental unemployment benefits trust, in accordance with the terms of the Plan, as directed by the Committee.

Section 9.03Discretion.  Any decisions, actions or interpretations to be made under the Plan by the Board, the Committee and the Plan Administrator, acting on behalf of either, shall be

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made in each of their respective sole discretion, not in any fiduciary capacity and need not be uniformly applied to similarly situated individuals and such decisions, actions or interpretations shall be final, binding and conclusive upon all parties.  As a condition of participating in the Plan, the Participant acknowledges that all decisions and determinations of the Board, the Committee and the Plan Administrator taken in good faith shall be final and binding on the Participant, his or her beneficiaries and any other person having or claiming an interest under the Plan on his or her behalf.

ARTICLE X

CLAIMS PROCEDURES

Section 10.01Claim.  Each Participant under this Plan may contest any action taken or determination made by the Company, the Board, the Committee or the Plan Administrator that affects the rights of such Participant hereunder by completing and filing with the Plan Administrator a written request for review in the manner specified by the Plan Administrator.  No person may bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims procedures described in this Article X are exhausted and a final determination is made by the Plan Administrator and/or the Named Appeals Fiduciary, except in circumstances where the Participant has a reasonable basis to conclude that the pursuit of his/her claim through the claims procedure would be futile.  If the terminated Participant or interested person challenges a decision by the Plan Administrator and/or Named Appeals Fiduciary, a review by the court of law will be limited to the facts, evidence and issues presented to the Plan Administrator during the claims procedure set forth in this Article X.  Facts and evidence that become known to the terminated Participant or other interested person after having exhausted the claims procedure must be brought to the attention of the Plan Administrator for reconsideration of the claims administrator.  Issues not raised with the Plan Administrator and/or Named Appeals Fiduciary will be deemed waived.

Section 10.02Initial Claim.  Before the date on which payment of Severance Benefits commences, each application for benefits must be supported by such information as the Plan Administrator deems relevant and appropriate.  In the event that any claim relating to the administration of Severance Benefits is denied in whole or in part, the terminated Participant or his or her beneficiary (“claimant”) whose claim has been so denied shall be notified of such denial in writing by the Plan Administrator within ninety (90) days after the receipt of the claim for benefits.  This period may be extended an additional ninety (90) days if the Plan Administrator determines such extension is necessary and the Plan Administrator provides notice of extension to the claimant prior to the end of the initial ninety (90) day period.  The notice advising of the denial shall specify the following: (i) the reason or reasons for denial, (ii) make specific reference to the Plan provisions on which the determination was based, (iii) describe any additional material or information necessary for the claimant to perfect the claim (explaining why such material or information is needed), and (iv) describe the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review.

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Section 10.03Appeals of Denied Administrative Claims.  All appeals shall be made by the following procedure:

(a)A claimant whose claim has been denied shall file with the Plan Administrator a notice of appeal of the denial.  Such notice shall be filed within sixty (60) calendar days of notification by the Plan Administrator of the denial of a claim, shall be made in writing, and shall set forth all of the facts upon which the appeal is based.

(b)The Named Appeals Fiduciary shall consider the merits of the claimant’s written presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Named Appeals Fiduciary shall deem relevant.

(c)The Named Appeals Fiduciary shall render a determination upon the appealed claim which determination shall be accompanied by a written statement as to the reasons therefor.  The determination shall be made to the claimant within sixty (60) days of the claimant’s request for review, unless the Names Appeals Fiduciary determines that special circumstances requires an extension of time for processing the claim.  In such case, the Named Appeals Fiduciary shall notify the claimant of the need for an extension of time to render its decision prior to the end of the initial sixty (60) day period, and the Named Appeals Fiduciary shall have an additional sixty (60) day period to make its determination.  The determination so rendered shall be binding upon all parties as long as it is made in good faith.  If the determination is adverse to the claimant, the notice shall (i) provide the reason or reasons for denial, (ii) make specific reference to the Plan provisions on which the determination was based, (iii) include a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to a the claimant’s claim for benefits, and (iv) state that the claimant has the right to bring an action under section 502(a) of ERISA.

Section 10.04Appointment of the Named Appeals Fiduciary.  The Named Appeals Fiduciary shall be the person or persons named as such by the Board or Committee, or, if no such person or persons be named, then the person or persons named by the Plan Administrator as the Named Appeals Fiduciary; provided however, that effective on the date of a Change in Control, the Plan Administrator shall also serve as the Named Appeals Fiduciary.  For periods before the date of a Change in Control, Named Appeals Fiduciaries may at any time be removed by the Board or Committee, and any Named Appeals Fiduciary named by the Plan Administrator may be removed by the Plan Administrator.  All such removals may be with or without cause and shall be effective on the date stated in the notice of removal.  The Named Appeals Fiduciary shall be a “Named Fiduciary” within the meaning of ERISA, and unless appointed to other fiduciary responsibilities, shall have no authority, responsibility, or liability with respect to any matter other than the proper discharge of the functions of the Named Appeals Fiduciary as set forth herein.

Section 10.05Arbitration; Expenses.  In the event of any dispute under the provisions of this Plan, other than a dispute in which the primary relief sought is an equitable remedy such as an injunction, the parties shall have the dispute, controversy or claim settled by arbitration in New York, New York (or such other location as may be mutually agreed upon by the Employer and the Participant) in accordance with the National Rules for the Resolution of Employment

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Disputes then in effect of the American Arbitration Association, before a panel of three arbitrators, two of whom shall be selected by the Company and the Participant, respectively, and the third of whom shall be selected by the other two arbitrators.  Any award entered by the arbitrators shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction.  This arbitration provision shall be specifically enforceable.  The arbitrators shall have no authority to modify any provision of this Plan or to award a remedy for a dispute involving this Plan other than a benefit specifically provided under or by virtue of the Plan.  If the Participant substantially prevails on any material issue, which is the subject of such arbitration or lawsuit, the Company shall be responsible for all of the fees of the American Arbitration Association and the arbitrators and any expenses relating to the conduct of the arbitration (including the Company’s and Participant’s reasonable attorneys’ fees and expenses).  Otherwise, each party shall be responsible for its own expenses relating to the conduct of the arbitration (including reasonable attorneys’ fees and expenses) and shall share the fees of the American Arbitration Association.

ARTICLE XI

MISCELLANEOUS

Section 11.01Nonalienation of Benefits.  None of the payments, benefits or rights of any Participant shall be subject to any claim of any creditor of any Participant, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment (if permitted under applicable law), trustee’s process, or any other legal or equitable process available to any creditor of such Participant.  No Participant shall have the right to alienate, anticipate, commute, plead, encumber or assign any of the benefits or payments that he may expect to receive, continently or otherwise, under this Plan, except for the designation of a beneficiary as set forth in Section 5.01.

Section 11.02Notices.  All notices and other communications required hereunder shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service.  In the case of the Participant, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to the Plan Administrator.

Section 11.03Successors.  Any Successor shall assume the obligations under this Plan and expressly agree to perform the obligations under this Plan.

Section 11.04Other Payments.  Except as otherwise provided in this Plan, no Participant shall be entitled to any cash payments or other severance benefits under any of the Company’s then current severance pay policies for a termination that is covered by this Plan for the Participant, including, without limitation, the Executive Severance Plan.

Section 11.05No Mitigation.  Except as otherwise provided in Section 4.01(d) and Section 4.04, Participants shall not be required to mitigate the amount of any Severance Benefits provided for in this Plan by seeking other employment or otherwise, nor shall the amount of any

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Severance Benefits provided for herein be reduced by any compensation earned by other employment or otherwise, except if the Participant is re-employed by Company, in which case Severance Benefits shall cease.

Section 11.06No Contract of Employment.  Neither the establishment of the Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Eligible Employee or any person whosoever, the right to be retained in the service of the Company, and all Eligible Employees shall remain subject to discharge to the same extent as if the Plan had never been adopted.

Section 11.07Severability of Provisions.  If any provision of this Plan shall be held invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included.

Section 11.08Heirs, Assigns, and Personal Representatives.  This Plan shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Participant, present and future.

Section 11.09Headings and Captions.  The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

Section 11.10Gender and Number.  Where the context admits: words in any gender shall include any other gender, and, except where otherwise clearly indicated by context, the singular shall include the plural, and vice-versa.

Section 11.11Unfunded Plan.  The Plan shall not be funded.  No Participant shall have any right to, or interest in, any assets of the Company that may be applied by the Company to the payment of Severance Benefits.

Section 11.12Payments to Incompetent Persons.  Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefor shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Company, the Committee and all other parties with respect thereto.

Section 11.13Lost Payees.  A benefit shall be deemed forfeited if the Committee is unable to locate a Participant to whom Severance Benefits are due.  Such Severance Benefits shall be reinstated if application is made by the Participant for the forfeited Severance Benefits while this Plan is in operation.

Section 11.14Controlling Law.  This Plan shall be construed and enforced according to the laws of the State of New York to the extent not superseded by Federal law.

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SCHEDULE A

SEVERANCE BENEFITS
SALARY REPLACEMENT AND ANNUAL BONUS

Officers	2.99 times annual Base Salary and Annual Bonus
Segment Presidents	2 times annual Base Salary and Annual Bonus
Corporate Vice Presidents (in Career Band 1 or 2)	1.5 times annual Base Salary and Annual Bonus

A-1

EX-10.4

 Exhibit 10.4

TYCO INTERNATIONAL

SEVERANCE PLAN FOR U.S. OFFICERS AND EXECUTIVES

Amended and Restated as of January 1, 2009

TABLE OF CONTENTS

		Page
ARTICLE I	BACKGROUND, PURPOSE AND TERM OF PLAN	1
Section 1.01	Purpose of the Plan	1
Section 1.02	Term of the Plan	1
Section 1.03	Compliance with Code Section 409A	1
ARTICLE II	DEFINITIONS	2
Section 2.01	“Alternative Position”	2
Section 2.02	“Annual Bonus”	2
Section 2.03	“Base Salary”	2
Section 2.04	“Board”	2
Section 2.05	“Cause”	2
Section 2.06	“COBRA”	2
Section 2.07	“Code”	2
Section 2.08	“Committee”	2
Section 2.09	“Company”	2
Section 2.10	“Effective Date”	3
Section 2.11	“Eligible Employee”	3
Section 2.12	“Employee”	3
Section 2.13	“Employer”	3
Section 2.14	“ERISA”	3
Section 2.15	“Exchange Act”	3
Section 2.16	“Involuntary Termination”	3
Section 2.17	“Key Employee”	3
Section 2.18	“Notice Pay”	3
Section 2.19	“Officer”	3
Section 2.20	“Participant”	3
Section 2.21	“Permanent Disability”	4
Section 2.22	“Plan”	4
Section 2.23	“Plan Administrator”	4
Section 2.24	“Postponement Period”	4
Section 2.25	“Release”	4
Section 2.26	“Separation from Service”	4
Section 2.27	“Separation from Service Date”	4
Section 2.28	“Service”	4
Section 2.29	“Severance Benefits”	4
Section 2.30	“Severance Period”	5
Section 2.31	“Subsidiary”	5
Section 2.32	“Voluntary Termination”	5
ARTICLE III	PARTICIPATION AND ELIGIBILITY FOR BENEFITS	6
Section 3.01	Participation	6
Section 3.02	Conditions	6

i

TABLE OF CONTENTS

(continued)

		Page
ARTICLE IV	DETERMINATION OF SEVERANCE BENEFITS	8
Section 4.01	Amount of Severance Benefits Upon Involuntary Termination	8
Section 4.02	Voluntary Termination; Termination for Death or Permanent Disability	10
Section 4.03	Termination for Cause	10
Section 4.04	Reduction of Severance Benefits	10
ARTICLE V	METHOD AND DURATION OF SEVERANCE BENEFIT PAYMENTS	11
Section 5.01	Method of Payment	11
Section 5.02	Other Arrangements	11
Section 5.03	Code Section 409A	11
Section 5.04	Termination of Eligibility for Benefits	12
ARTICLE VI	CONFIDENTIALITY, COVENANT NOT TO COMPETE AND NOT TO SOLICIT	13
Section 6.01	Confidential Information	13
Section 6.02	Non-Competition	13
Section 6.03	Non-Solicitation	13
Section 6.04	Non-Disparagement	14
Section 6.05	Reasonableness	14
Section 6.06	Equitable Relief	14
Section 6.07	Survival of Provisions	15
ARTICLE VII	THE PLAN ADMINISTRATOR	16
Section 7.01	Authority and Duties	16
Section 7.02	Compensation of the Plan Administrator	16
Section 7.03	Records, Reporting and Disclosure	16
ARTICLE VIII	AMENDMENT, TERMINATION AND DURATION	17
Section 8.01	Amendment, Suspension and Termination	17
Section 8.02	Duration	17
ARTICLE IX	DUTIES OF THE COMPANY AND THE COMMITTEE	18
Section 9.01	Records	18
Section 9.02	Payment	18
Section 9.03	Discretion	18
ARTICLE X	CLAIMS PROCEDURES	19
Section 10.01	Claim	19
Section 10.02	Initial Claim	19
Section 10.03	Appeals of Denied Administrative Claims	19
Section 10.04	Appointment of the Named Appeals Fiduciary	20
Section 10.05	Arbitration; Expenses	20

ii

TABLE OF CONTENTS

(continued)

		Page
ARTICLE XI	MISCELLANEOUS	21
Section 11.01	Nonalienation of Benefits	21
Section 11.02	Notices	21
Section 11.03	Successors	21
Section 11.04	Other Payments	21
Section 11.05	No Mitigation	21
Section 11.06	No Contract of Employment	21
Section 11.07	Severability of Provisions	21
Section 11.08	Heirs, Assigns, and Personal Representatives	22
Section 11.09	Headings and Captions	22
Section 11.10	Gender and Number	22
Section 11.11	Unfunded Plan	22
Section 11.12	Payments to Incompetent Persons	22
Section 11.13	Lost Payees	22
Section 11.14	Controlling Law	22
SCHEDULE A	SEVERANCE BENEFITS	A-1

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ARTICLE I

BACKGROUND, PURPOSE AND TERM OF PLAN

Section 1.01Purpose of the Plan.  The purpose of the Plan is to provide Eligible Employees with certain compensation and benefits as set forth in the Plan in the event the Eligible Employee’s employment with the Company or a Subsidiary is terminated due to an Involuntary Termination.  The Plan is not intended to be an “employee pension benefit plan” or “pension plan” within the meaning of Section 3(2) of ERISA.  Rather, this Plan is intended to be a “welfare benefit plan” within the meaning of Section 3(1) of ERISA and to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, section 2510.3-2(b).  Accordingly, the benefits paid by the Plan are not deferred compensation and no employee shall have a vested right to such benefits.

Section 1.02Term of the Plan.  The Plan shall generally be effective as of the Effective Date and shall supersede any prior plan, program or policy under which the Company or any Subsidiary provided severance benefits prior to the Effective Date of the Plan.  The Plan shall continue until terminated pursuant to Article VIII of the Plan.

Section 1.03Compliance with Code Section 409A.  The terms of this Plan are intended to, and shall be interpreted so as to, comply in all respects with the provisions of Code Section 409A and the regulations and rulings promulgated thereunder.

ARTICLE II

DEFINITIONS

Section 2.01“Alternative Position” shall mean a position with the Company that:

(a)is not more than 75 miles each way from the location of the Employee’s current position (for positions that are essentially mobile, the mileage does not apply); and

(b)provides the Employee with pay and benefits (not including perquisites or long term incentive compensation) that are comparable in the aggregate to the Employee’s current position.

The Plan Administrator has the exclusive discretionary authority to determine whether a position is an Alternative Position.

Section 2.02“Annual Bonus” shall mean 100% of the Participant’s target annual bonus.

Section 2.03“Base Salary” shall mean the annual base salary in effect as of the Participant’s Separation from Service Date.

Section 2.04“Board” shall mean the Board of Directors of the Company, or any successor thereto, or a committee thereof specifically designated for purposes of making determinations hereunder.

Section 2.05“Cause” shall mean an Employee’s (i) substantial failure or refusal to perform duties and responsibilities of his or her job as required by the Company, (ii) violation of any fiduciary duty owed to the Company, (iii) conviction of a felony or misdemeanor, (iv) dishonesty, (v) theft, (vi) violation of Company rules or policy, or (vii) other egregious conduct, that has or could have a serious and detrimental impact on the Company and its employees.  The Plan Administrator, in its sole and absolute discretion, shall determine Cause.  Examples of “Cause” may include, but are not limited to, excessive absenteeism, misconduct, insubordination, violation of Company policy, dishonesty, and deliberate unsatisfactory performance (e.g., Employee refuses to improve deficient performance).

Section 2.06“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and the regulations promulgated thereunder.

Section 2.07“Code” shall mean the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder.

Section 2.08“Committee” shall mean the Compensation and Human Resources Committee of the Board or such other committee appointed by the Board to assist the Company in making determinations required under the Plan in accordance with its terms.  The “Committee” may delegate its authority under the Plan to an individual or another committee.

Section 2.09“Company” shall mean Tyco International Ltd.  Unless it is otherwise clear from the context, Company shall generally include participating Subsidiaries.

2

Section 2.10“Effective Date” shall mean January 1, 2009.

Section 2.11“Eligible Employee” shall mean an Employee employed in the United States who is an Officer, or in career bands 1 and 2, who is not covered under any other severance plan or program sponsored by the Company or a Subsidiary.  If there is any question as to whether an Employee is deemed an Eligible Employee for purposes of the Plan, the Senior Vice President — Human Resources, Tyco International shall make the determination.

Section 2.12“Employee” shall mean an individual employed by Tyco International Ltd. or a Subsidiary as a common law employee on the United States payroll of Tyco International Ltd. or a Subsidiary, and shall not include any person working for the Company through a temporary service or on a leased basis or who is hired by the Company as an independent contractor, consultant, or otherwise as a person who is not an employee for purposes of withholding federal employment taxes, as evidenced by payroll records or a written agreement with the individual, regardless of any contrary governmental or judicial determination or holding relating to such status or tax withholding.

Section 2.13“Employer” shall mean the Company or any Subsidiary with respect to which this Plan has been adopted.

Section 2.14“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

Section 2.15“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and the regulations promulgated thereunder.

Section 2.16“Involuntary Termination” shall mean the date that a Participant experiences a Company-initiated Separation from Service for any reason other than Cause, Permanent Disability or death, as provided under and subject to the conditions of Article III.

Section 2.17“Key Employee” shall mean an Employee who, at any time during the 12-month period ending on the identification date, is a “specified employee” under Code Section 409A, as determined by the Committee or its delegate.  The determination of Key Employees, including the number and identity of persons considered specified employees and the identification date, shall be made by the Committee or its delegate in accordance with the provisions of Code Section 409A and the regulations promulgated thereunder.

Section 2.18“Notice Pay” shall mean the amounts that a Participant is eligible to receive pursuant to Article IV of the Plan.

Section 2.19“Officer” shall mean any individual who is an officer, as such term is defined pursuant to Rule 16a-1(f) as promulgated under the Exchange Act, of the Company.  For purposes of this definition, Officer shall also mean any officer of any of the Company’s Subsidiaries who perform policy making functions, within the context of Rule 16a-1(f).

Section 2.20“Participant” shall mean any Eligible Employee who meets the requirements of Article III and thereby becomes eligible for salary continuation and other benefits under the Plan.

3

Section 2.21“Permanent Disability” shall mean that an Employee has a permanent and total incapacity from engaging in any employment for the Employer for physical or mental reasons.  A “Permanent Disability” shall be deemed to exist if the Employee meets the requirements for disability benefits under the Employer’s long-term disability plan or under the requirements for disability benefits under the Social Security law (or similar law outside the United States, if the Employee is employed in that jurisdiction) then in effect, or if the Employee is designated with an inactive employment status at the end of a disability or medical leave.

Section 2.22“Plan” means the Tyco International Severance Plan for U.S. Officers and Executives (f/k/a the Tyco International (US) Inc. Severance Plan for U.S. Officers and Executives) as set forth herein, and as the same may from time to time be amended.

Section 2.23“Plan Administrator” shall mean the individual(s) appointed by the Committee to administer the terms of the Plan as set forth herein and if no individual is appointed by the Committee to serve as the Plan Administrator for the Plan, the Plan Administrator shall be the Senior Vice President — Human Resources, Tyco International Management Company (or the equivalent).  Notwithstanding the preceding sentence, in the event the Plan Administrator is entitled to Severance Benefits under the Plan, the Committee or its delegate shall act as the Plan Administrator for purposes of administering the terms of the Plan with respect to the Plan Administrator.  The Plan Administrator may delegate all or any portion of its authority under the Plan to any other person(s).

Section 2.24“Postponement Period” shall mean, for a Key Employee, the period of six months after the Key Employee’s Separation from Service Date (or such other period as may be required by Code Section 409A) during which deferred compensation may not be paid to the Key Employee under Code Section 409A.

Section 2.25“Release” shall mean the Separation of Employment Agreement and General Release, as provided by the Company.

Section 2.26“Separation from Service” shall mean “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and applicable regulations and rulings thereunder.

Section 2.27“Separation from Service Date” shall mean, with respect to a Participant, the date on which such Participant experiences a Separation from Service.

Section 2.28“Service” shall mean the total number of years and completed months the Participant was an Employee of the Company.  Service with any predecessor employer or with a Subsidiary prior to the Subsidiary’s becoming part of the Company shall be recognized only to the extent specified in the merger or acquisition documentation relating to the Subsidiary.  Periods of authorized leave of absence, such as military leave, will be included in Service only to the extent required by applicable law.  Any period of employment with the Company, a Subsidiary, or a predecessor employer for which an Eligible Employee previously received severance benefits, shall be excluded from Service.

Section 2.29“Severance Benefits” shall mean the salary continuation and other benefits that a Participant is eligible to receive pursuant to Article IV of the Plan.

4

Section 2.30“Severance Period” shall mean the period during which a Participant is receiving Severance Benefits under this Plan.

Section 2.31“Subsidiary” shall mean (i) a subsidiary company (wherever incorporated) as defined by the law of the Company’s place of incorporation , (ii) any separately organized business unit, whether or not incorporated, of the Company, (iii) any employer that is required to be aggregated with the Company pursuant to section 414 of the Internal Revenue Code of 1986, as amended, and regulations issued thereunder, and (iv) any service recipient or employer that is within a controlled group of corporations with the Company as defined in Code Sections 1563(a)(1), (2) and (3) where the phrase “at least 50%” is substituted in each place “at least 80%” appears or is with the Company as part of a group of trades or businesses under common control as defined in Code Section 414(c) and Treas. Reg. Section 1.414(c)-2 where the phrase “at least 50%” is substituted in each place “at least 80%” appears, provided, however, that when the relevant determination is to be based upon legitimate business criteria (as described in Treas. Reg. Section 1.409A-1(b)(5)(iii)(E) and Section 1.409A-1(h)(3)), the phrase “at least 20%” shall be substituted in each place “at least 80%” appears as described above with respect to both a controlled group of corporations and trades or business under common control.

Section 2.32“Voluntary Termination” shall mean any Separation from Service due to retirement or termination of employment that is not initiated by the Company or any Subsidiary.

5

ARTICLE III

PARTICIPATION AND ELIGIBILITY FOR BENEFITS

Section 3.01Participation.  Each Eligible Employee in the Plan who incurs an Involuntary Termination and who satisfies the conditions of Section 3.02 shall be eligible to receive the Severance Benefits described in the Plan.  An Eligible Employee shall not be eligible to receive any other severance benefits from the Company or Subsidiary on account of an Involuntary Termination, unless otherwise provided in the Plan.  In addition, any Eligible Employee who is a party to an employment agreement with the Company pursuant to which such Eligible Employee is entitled to severance benefits shall be ineligible to participate in the Plan.

Section 3.02Conditions.

(a)Eligibility for any Severance Benefits is expressly conditioned on the occurrence of the following within 60 days after the Participant’s Separation from Service Date: (i) execution by the Participant of a Release in the form provided by the Company, (ii) compliance by the Participant with all the terms and conditions of such Release, (iii) the Participant’s written agreement to the confidentiality, non-solicitation, and non-disparagement provisions in Article VI during and after the Participant’s employment with the Company, and (iv) to the extent permitted in Section 4.04 of the Plan, execution of a written agreement that authorizes the deduction of amounts owed to the Company prior to the payment of any Severance Benefit (or in accordance with any other schedule as the Committee may, in its sole discretion, determine to be appropriate).  If the Committee determines, in its sole discretion, that the Participant has not fully complied with any of the terms of the Agreement and/or Release, the Committee may deny Severance Benefits not yet in pay status or discontinue the payment of the Participant’s Severance Benefit and may require the Participant, by providing written notice of such repayment obligation to the Participant, to repay any portion of the Severance Benefit already received under the Plan.  If the Committee notifies a Participant that repayment of all or any portion of the Severance Benefit received under the Plan is required, such amounts shall be repaid within thirty (30) calendar days of the date the written notice is sent.  Any remedy under this subsection (a) shall be in addition to, and not in place of, any other remedy, including injunctive relief, that the Company may have

(b)An Eligible Employee will not be eligible to receive severance benefits under any of the following circumstances:

(i)The Eligible Employee voluntarily terminates employment:

(ii)The Eligible Employee resigns employment before the job-end date specified by the Employer or while the Employer still desires the Eligible Employee’s services;

(iii)The Eligible Employee’s employment is terminated for Cause;

(iv)The Eligible Employee voluntarily retires;

6

(v)The Eligible Employee’s employment is terminated due to the Eligible Employee’s death or Permanent Disability;

(vi)The Eligible Employee does not return to work within six (6) months of the onset of an approved leave of absence, other than a personal, educational or military leave and/or as otherwise required by applicable statute;

(vii)The Eligible Employee does not return to work within three (3) months of the onset of a personal or educational leave of absence;

(viii)The Eligible Employee does not satisfy the conditions for Severance Benefits set forth in Section 3.02(a);

(ix)The Eligible Employee continues in employment with the Company or a Subsidiary or has the opportunity to continue in employment in the same or in an Alternative Position with the Company or a Subsidiary; or

(x)The Eligible Employee’s employment with the Employer terminates as a result of a sale of stock or assets of the Employer, merger, consolidation, joint venture or a sale or outsourcing of a business unit or function, or other transaction, and the Eligible Employee accepts employment, or has the opportunity to continue employment in an Alternative Position, with the purchaser, joint venture, or other acquiring or outsourcing entity, or a related entity of either the Company or the acquiring entity.  The payment of Severance Benefits in the circumstances described in this subsection (x) would result in a windfall to the Eligible Employee, which is not the intention of the Plan.

(c)The Plan Administrator has the sole discretion to determine an Eligible Employee’s eligibility to receive Severance Benefits.

(d)An Eligible Employee returning from approved military leave will be eligible for Severance Benefits if: (i) he/she is eligible for reemployment under the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA); (ii) his/her pre-military leave job is eliminated; and (iii) the Employer’s circumstances are changed so as to make reemployment in another position impossible or unreasonable, or re-employment would create an undue hardship for the Employer.  If the Eligible Employee returning from military leave qualifies for Severance Benefits, his/her severance benefits will be calculated as if he/she had remained continuously employed from the date he/she began his/her military leave.  The Eligible Employee must also satisfy any other relevant conditions for payment set forth in this Section, including execution of a Release.

7

ARTICLE IV

DETERMINATION OF SEVERANCE BENEFITS

Section 4.01Amount of Severance Benefits Upon Involuntary Termination. The Severance Benefits to be provided to an Eligible Employee who incurs an Involuntary Termination and is determined to be eligible for Severance Benefits shall be as follows:

(a)Notice Pay.  Except for Officers, each Eligible Employee who meets the eligibility requirements for a Severance Benefit under Section 3.01 shall receive 30 calendar days notice as a Notice Period.  In the event that the Company determines that a Participant’s last day of work shall be prior to the end of his or her Notice Period, such Employee shall be entitled to pay in lieu of notice for the balance of such Notice Period.  Notice Pay paid to an Eligible Employee shall be in addition to, and shall not be offset against, the Severance Benefits the Participant may be entitled to receive under this Article IV.  An Eligible Employee who does not sign, or who revokes his or her signature on, a Release shall only be eligible for Notice Pay.  Unless otherwise permitted by the applicable plan documents or laws, an Eligible Employee will not be eligible to apply for short-term disability, long-term disability and/or workers’ compensation during the Notice Period, or anytime thereafter.

(b)Severance Benefits.

(i)Salary continuation shall be provided during the Severance Period applicable to the Participant as set forth under the benefits schedule appended to the Plan.  During the Severance Period, the Participant shall receive his or her Base Salary (net of deductions and tax withholdings, as applicable) in equal installments over the Severance Period, per normal payroll cycles.  The salary continuation payment shall commence no earlier than the end of the revocation period applicable to the Release.

(ii)The Participant shall also receive a cash payment equal to his or her Annual Bonus during the Severance Period applicable to the Participant as set forth under the benefits schedule appended to the Plan.  Such bonus payment shall be paid to the Participant in equal installments over the Severance Period (e.g., 12 months, 18 months or 24 months).  The bonus payment shall be paid at the same time as the Salary continuation benefits in Section 4.01(b)(i).

(c)Bonus.  Subject to the discretion of the Company and to the extent set forth in the applicable plans, the Participant shall be entitled to a payment equal to the amount (if any) of Annual Bonus to which he or she would have become entitled under the annual bonus or incentive plan in which the Participant participated in the year of his or her Separation from Service, assuming the Participant had remained in employment through the end of such year and based on actual performance, pro rated for the portion of the year prior to the Separation from Service.

(d)Medical, Dental and Health Care Reimbursement Account Benefits.  The Participant shall continue to be eligible to participate in the medical, dental and Health Care Reimbursement Account coverage in effect at the date of his or her termination (or generally

8

comparable coverage) for himself or herself and, where applicable, his or her spouse and dependents, as the same may be changed from time to time for employees of the Company generally, as if Participant had continued in employment during the lesser of (i) the Severance Period, or (ii) twelve (12) months (the “Coverage Period”).  The Participant shall be responsible for the payment of the employee portion of the medical, dental and Health Care Reimbursement Account contributions that are required during the Severance Period and such contributions shall be made within the time period and in the amounts that other employees are required to pay to the Company for similar coverage.  The Participant’s failure to pay the applicable contributions shall result in the cessation of the applicable medical and dental coverage for the Participant and his or her spouse or domestic partner and dependents.  In the event the Severance Period exceeds twelve months, the Participant will receive a cash lump-sum payment from the Company equal to the projected value of the employer portion of the premiums for medical and dental benefits for the time period between the end of the Coverage Period and the remainder of the Severance Period.  Such payment shall be made within sixty (60) days from the end of the Coverage Period.  Notwithstanding any other provision of this Plan to the contrary, in the event that a Participant commences employment with another company at any time during the Severance Period, the Participant may cease receiving coverage under the Company’s medical and dental plans.  Within thirty (30) days of Participant’s commencement of employment with another company, Participant shall provide the Company written notice of such employment and provide information to the Company regarding the medical and dental benefits provided to Participant by his or her new employer.  The COBRA continuation coverage period under section 4980B of the Code shall run concurrently with the Severance Period.

(e)Stock Options.  All stock options held by the Participant as of his or her Separation from Service Date which would have become vested and exercisable during the twelve (12) month period after Participant’s Separation from Service Date shall become vested and exercisable on each such date within such twelve (12) month period, unless the Participant’s option agreement covering such options provides for alternative vesting treatment.  All outstanding stock options held by Participant that are vested and exercisable as of the Separation from Service Date and all stock options held by the Participant that become vested and exercisable within the twelve (12) month period following Participant’s Separation from Service Date, shall be exercisable for the greater of (i) the period set forth in Participant’s option agreement covering such options, or (ii) twelve (12) months from the Separation from Service Date.  In no event, however, shall an option be exercisable beyond its original expiration date.

(f)Restricted Stock, Restricted Units and Performance Units. All restricted stock, restricted units and performance units held by the Participant as of his or her Separation from Service Date shall be treated as provided under and in accordance with the Tyco International Ltd. 2004 Stock and Incentive Plan, as amended, modified to the extent provided in the terms and conditions of the applicable award certificate.

(g)Outplacement Services.  The Company may, in its sole and absolute discretion, pay the cost of outplacement services for the Participant at the outplacement agency that the Company regularly uses for such purpose or, provided the Senior Vice President — Human Resources, Tyco International Management Company provides prior approval, at an outpatient agency selected by the Participant; provided, however, that the period of outplacement services shall not exceed twelve (12) months from Participant’s Separation from Service Date.

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Section 4.02Voluntary Termination; Termination for Death or Permanent Disability.  If the Eligible Employee’s employment terminates on account of (i) the Eligible Employee’s Voluntary Resignation, (ii) death, or (iii) Permanent Disability, then the Eligible Employee shall not be entitled to receive Severance Benefits under this Plan and shall be entitled only to those benefits (if any) as may be available under the Company’s then-existing benefit plans and policies at the time of such termination.

Section 4.03Termination for Cause.  If any Eligible Employee’s employment terminates on account of termination by the Company for Cause, the Eligible Employee shall not be entitled to receive Severance Benefits under this Plan and shall be entitled only to those benefits that are legally required to be provided to the Eligible Employee.  Notwithstanding any other provision of the Plan to the contrary, if the Committee or the Plan Administrator determines that an Eligible Employee has engaged in conduct that constitutes Cause at any time prior to the Eligible Employee’s Separation from Service Date, any Severance Benefit payable to the Eligible Employee under Section 4.01 of the Plan shall immediately cease, and the Eligible Employee shall be required to return any Severance Benefits paid to the Eligible Employee prior to such determination.  The Company may withhold paying Severance Benefits under the Plan pending resolution of an inquiry that could lead to a finding resulting in Cause.  If the Company has offset other payments owed to the Eligible Employee under any other plan or program, it may, in its sole discretion, waive its repayment right solely with respect to the amount of the offset so credited.

Section 4.04Reduction of Severance Benefits.  With respect to amounts paid under the Plan that are not subject to Code Section 409A and the regulations promulgated thereunder, the Plan Administrator reserves the right to make deductions in accordance with applicable law for any monies owed to the Company by the Participant or the value of Company property that the Participant has retained in his/her possession.  With respect to amounts paid under the Plan that are subject to Code Section 409A and the regulations promulgated thereunder, the Plan Administrator reserves the right to make deductions in accordance with applicable law for any monies owed to the Company by the Participant or the value of the Company property that the Participant has retained in his/her possession; provided, however, that such deductions cannot exceed $5,000 in the aggregate.

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ARTICLE V

METHOD AND DURATION OF SEVERANCE BENEFIT PAYMENTS

Section 5.01Method of Payment.  The Severance Benefit to which a Participant is entitled, as determined pursuant to Section 4.01, shall be paid in accordance with normal payroll practices over the Severance Period; provided, however, that the annual bonus amount payable pursuant to Section 4.01(c) shall be paid at the same time as bonuses would be payable under the applicable bonus plan or program, or successor plan, and that COBRA coverage under Section 4.01(d) shall be provided or paid in accordance with the provisions of that subsection.  In no event will interest be credited on the unpaid balance for which a Participant may become eligible.  Payment shall be made by mailing to the last address provided by the Participant to the Company or such other reasonable method as determined by the Plan Administrator.  All payments of Severance Benefits are subject to applicable federal, state and local taxes and withholdings.  In the event of the Participant’s death prior to the completion of all payments being made, the remaining payments shall be paid to the Participant’s estate in a single lump sum payment within sixty (60) days following the date of the Participant’s death.

Section 5.02Other Arrangements.  The Severance Benefits under this Plan are not additive or cumulative to severance or termination benefits that a Participant might also be entitled to receive under the terms of a written employment agreement, a severance agreement or any other arrangement with the Employer.  As a condition of participating in the Plan, the Eligible Employee must expressly agree that this Plan supersedes all prior agreements, and sets forth the entire Severance Benefit the Eligible Employee is entitled to while an Eligible Employee in the Plan.  The provisions of this Plan may provide for payments to the Eligible Employee under certain compensation or bonus plans under circumstances where such plans would not provide for payment thereof.  It is the specific intention of the Company that the provisions of this Plan shall supersede any provisions to the contrary in such plans, to the extent permitted by applicable law, and such plans shall be deemed to be have been amended to correspond with this Plan without further action by the Company or the Board.

Section 5.03Code Section 409A.

(a)Notwithstanding any provision of the Plan to the contrary, if required by Code Section 409A and if a Participant is a Key Employee, no Benefits shall be paid to the Participant during the Postponement Period.  If a Participant is a Key Employee and payment of Benefits is required to be delayed for the Postponement Period under Code Section 409A, the accumulated amounts withheld on account of Code Section 409A shall be paid in a lump sum payment within 30 days after the end of the Postponement Period and no interest or other adjustment shall be made for the delayed payment.  If the Participant dies during the Postponement Period prior to the payment of Benefits, the amounts withheld on account of Code Section 409A shall be paid to the Participant’s estate within 60 days after the Participant’s death.

(b)This Agreement is intended to meet the requirements of the “short-term deferral” exception, the “separation pay” exception and other exceptions under Code Section 409A and the regulations promulgated thereunder. Notwithstanding anything in this Plan to the contrary, if required by Code Section 409A, payments may only be made under this Plan upon an event and in a manner permitted by Code Section 409A, to the extent applicable.  For purposes

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of Code Section 409A, the right to a series of payments under the Plan shall be treated as a right to a series of separate payments.  All reimbursements and in-kind benefits provided under the Plan shall be made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in the Plan, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.  In no event may a Participant designate the year of payment for any amounts payable under the Plan.

Section 5.04Termination of Eligibility for Benefits.

(a)All Eligible Employees shall cease to be eligible to participate in the Plan, and all Severance Benefit payments shall cease upon the occurrence of the earlier of:

(i)Subject to Article VIII, termination or modification of the Plan; or

(ii)Completion of payment to the Participant of the Severance Benefit for which the Participant is eligible under Article IV.

(b)Notwithstanding anything herein to the contrary, the Company shall have the right to cease all Severance Benefit payments and to recover payments previously made to the Participant should the Participant at any time breach the Participant’s undertakings under the terms of the Plan, the Release the Participant executed to obtain the Severance Benefits under the Plan or the confidentiality, non-competition, non-solicitation and non-disparagement provisions of Article VI.

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ARTICLE VI

CONFIDENTIALITY, COVENANT NOT TO COMPETE AND NOT TO SOLICIT

Section 6.01Confidential Information.  The Participant agrees that he or she shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the Participant’s assigned duties and for the benefit of the Company, either during the period of the Participant’s employment or at any time thereafter, any nonpublic, proprietary or confidential information, knowledge or data relating to the Company, any of its Subsidiaries, affiliated companies or businesses, which shall have been obtained by the Participant during the Participant’s employment by the Company or a Subsidiary.  The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to the Participant; (ii) becomes known to the public subsequent to disclosure to the Participant through no wrongful act of the Participant or any representative of the Participant; or (iii) the Participant is required to disclose by applicable law, regulation or legal process (provided that the Participant provides the Company with prior notice of the contemplated disclosure and reasonably cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).  Notwithstanding clauses (i) and (ii) of the preceding sentence, the Participant’s obligation to maintain such disclosed information in confidence shall not terminate where only portions of the information are in the public domain.

Section 6.02Non-Competition.  The Participant acknowledges that he or she performs services of a unique nature for the Company that are irreplaceable, and that his or her performance of such services for a competing business will result in irreparable harm to the Company.  Accordingly, during the Participant’s employment with the Company or Subsidiary and for the one (1) year period thereafter, the Participant agrees that the Participant will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in any business of the same type as any business in which the Company or any of its Subsidiaries or affiliates is engaged on the date of termination or in which they have proposed, on or prior to such date, to be engaged in on or after such date and in which the Participant has been involved to any extent (other than de minimis) at any time during the one (1) year period ending with the date of termination, in any locale of any country in which the Company or any of its Subsidiaries conducts business.  This Section 6.02 shall not prevent the Participant from owning not more than one percent of the total shares of all classes of stock outstanding of any publicly held entity engaged in such business, nor will it restrict the Participant from rendering services to charitable organizations, as such term is defined in section 501(c) of the Code.

Section 6.03Non-Solicitation.  During the Participant’s employment with the Company or a Subsidiary and for the two (2) year period thereafter, the Participant agrees that he or she will not, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, knowingly solicit, aid or induce (i) any employee of the Company or any Subsidiary, as defined by the Company, to leave such employment in order to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or knowingly take any action to materially assist or aid any other person, firm, corporation or other entity in identifying or hiring any such employee, or (ii) any customer of the Company or any Subsidiary to purchase goods or services then sold by the

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Company or any Subsidiary from another person, firm, corporation or other entity or assist or aid any other persons or entity in identifying or soliciting any such customer.

Section 6.04Non-Disparagement.  Each of the Participant and the Company (for purposes hereof, the Company shall mean only the executive officers and directors thereof and not any other employees) agrees not to make any statements that disparage the other party, or in the case of the Company or its Subsidiaries, their respective affiliates, employees, officers, directors, products or services.  Notwithstanding the foregoing, statements made in the course of sworn testimony in administrative, judicial or arbitral proceedings (including, without limitation, depositions in connection with such proceedings) shall not be subject to this Section 6.04.

Section 6.05Reasonableness.  In the event the provisions of this Article VI shall ever be deemed to exceed the time, scope or geographic limitations permitted by applicable laws, then such provisions shall be reformed to the maximum time, scope or geographic limitations, as the case may be, permitted by applicable laws.

Section 6.06Equitable Relief.

(a)By participating in the Plan, the Participant acknowledges that the restrictions contained in this Article VI are reasonable and necessary to protect the legitimate interests of the Company, its Subsidiaries and its affiliates, that the Company would not have established this Plan in the absence of such restrictions, and that any violation of any provision of this Article VI will result in irreparable injury to the Company.  By agreeing to participate in the Plan, the Participant represents that his or her experience and capabilities are such that the restrictions contained in this Article VI will not prevent the Participant from obtaining employment or otherwise earning a living at the same general level of economic benefit as is currently the case.  The Participant further represents and acknowledges that (i) he or she has been advised by the Company to consult his or her own legal counsel in respect of this Plan, and (ii) that he or she has had full opportunity, prior to agreeing to participate in this Plan, to review thoroughly this Plan with his or her counsel.

(b)The Participant agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Article VI, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.  In the event that any of the provisions of this Article VI should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law.

(c)The Participant irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of this Article VI, including without limitation, any action commenced by the Company for preliminary and permanent injunctive relief or other equitable relief, may be brought in the United States District Court for the District of New York, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New York, (ii) consents to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) waives any objection which Participant may have to the

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laying of venue of any such suit, action or proceeding in any such court.  Participant also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers in a manner permitted by the notice provisions of Section 11.02.

Section 6.07Survival of Provisions.  The obligations contained in this Article VI shall survive the termination of Participant’s employment with the Company or a Subsidiary and shall be fully enforceable thereafter.

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ARTICLE VII

THE PLAN ADMINISTRATOR

Section 7.01         Authority and Duties.  It shall be the duty of the Plan Administrator, on the basis of information supplied to it by the Company and the Committee, to properly administer the Plan.  The Plan Administrator shall have the full power, authority and discretion to construe, interpret and administer the Plan, to make factual determinations, to correct deficiencies therein, and to supply omissions.  All decisions, actions and interpretations of the Plan Administrator shall be final, binding and conclusive upon the parties, subject only to determinations by the Named Appeals Fiduciary (as defined in Section 10.04), with respect to denied claims for Severance Benefits.  The Plan Administrator may adopt such rules and regulations and may make such decisions as it deems necessary or desirable for the proper administration of the Plan.

Section 7.02         Compensation of the Plan Administrator.  The Plan Administrator shall receive no compensation for services as such.  However, all reasonable expenses of the Plan Administrator shall be paid or reimbursed by the Company upon proper documentation.  The Plan Administrator shall be indemnified by the Company against personal liability for actions taken in good faith in the discharge of the Plan Administrator’s duties.

Section 7.03         Records, Reporting and Disclosure.  The Plan Administrator shall keep a copy of all records relating to the payment of Severance Benefits to Participants and former Participants and all other records necessary for the proper operation of the Plan.  All Plan records shall be made available to the Committee, the Company and to each Participant for examination during business hours except that a Participant shall examine only such records as pertain exclusively to the examining Participant and to the Plan.  The Plan Administrator shall prepare and shall file as required by law or regulation all reports, forms, documents and other items required by ERISA, the Code, and every other relevant statute, each as amended, and all regulations thereunder (except that the Company, as payor of the Severance Benefits, shall prepare and distribute to the proper recipients all forms relating to withholding of income or wage taxes, Social Security taxes, and other amounts that may be similarly reportable).

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ARTICLE VIII

AMENDMENT, TERMINATION AND DURATION

Section 8.01         Amendment, Suspension and Termination.  Except as otherwise provided in this Section 8.01, the Board or its delegate shall have the right, at any time and from time to time, to amend, suspend or terminate the Plan in whole or in part, for any reason or without reason, and without either the consent of or the prior notification to any Participant, by a formal written action.  No such amendment shall give the Company the right to recover any amount paid to a Participant prior to the date of such amendment or to cause the cessation of Severance Benefits already approved for a Participant who has executed a Release as required under Section 3.02.  Any amendment or termination of the Plan must comply with all applicable legal requirements including, without limitation, compliance with Code Section 409A and the regulations and ruling promulgated thereunder, securities, tax, or other laws, rules, regulations or regulatory interpretations thereof, applicable to the Plan.

Section 8.02         Duration.  Unless terminated sooner by the Board or its delegate, the Plan shall continue in full force and effect until termination of the Plan pursuant to Section 8.01; provided, however, that after the termination of the Plan, if any Participants terminated employment on account of an Involuntary Termination prior to the termination of the Plan and are still receiving Severance Benefits under the Plan, the Plan shall remain in effect until all of the obligations of the Company are satisfied with respect to such Participants.

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ARTICLE IX

DUTIES OF THE COMPANY AND THE COMMITTEE

Section 9.01         Records.  The Company or a Subsidiary thereof shall supply to the Committee all records and information necessary to the performance of the Committee’s duties.

Section 9.02         Payment. Payments of Severance Benefits to Participants shall be made in such amount as determined by the Committee under Article IV, from the Company’s general assets or from a supplemental unemployment benefits trust, in accordance with the terms of the Plan, as directed by the Committee.

Section 9.03         Discretion.  Any decisions, actions or interpretations to be made under the Plan by the Board, the Committee and the Plan Administrator, acting on behalf of either, shall be made in each of their respective sole discretion, not in any fiduciary capacity and need not be uniformly applied to similarly situated individuals and such decisions, actions or interpretations shall be final, binding and conclusive upon all parties.  As a condition of participating in the Plan, the Eligible Employee acknowledges that all decisions and determinations of the Board, the Committee and the Plan Administrator shall be final and binding on the Eligible Employee, his or her beneficiaries and any other person having or claiming an interest under the Plan on his or her behalf.

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ARTICLE X

CLAIMS PROCEDURES

Section 10.01       Claim.  Each Participant under this Plan may file a claim for Severance Benefits hereunder by completing and filing with the Plan Administrator a written request for review in the manner specified by the Plan Administrator.  No appeal is permissible as to an Eligible Employee’s eligibility for or a Participant’s amount of the Severance Benefit, which are decisions made solely within the discretion of the Company, and the Committee acting on behalf of the Company.  No person may bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims procedures described in this Article X are exhausted and a final determination is made by the Plan Administrator and/or the Named Appeals Fiduciary.  If an Eligible Employee or Participant or other interested person challenges a decision by the Plan Administrator and/or Named Appeals Fiduciary, a review by the court of law will be limited to the facts, evidence and issues presented to the Plan Administrator during the claims procedure set forth in this Article X.  Facts and evidence that become known to the terminated Eligible Employee or Participant or other interested person after having exhausted the claims procedure must be brought to the attention of the Plan Administrator for reconsideration of the claims administrator.  Issues not raised with the Plan Administrator and/or Named Appeals Fiduciary will be deemed waived.

Section 10.02       Initial Claim.  Before the date on which payment of a Severance Benefit commences, each such application must be supported by such information as the Plan Administrator deems relevant and appropriate.  In the event that any claim relating to Severance Benefits is denied in whole or in part, the terminated Participant or his or her beneficiary (“claimant”) whose claim has been so denied shall be notified of such denial in writing by the Plan Administrator within ninety (90) days after the receipt of the claim for benefits.  This period may be extended an additional ninety (90) days if the Plan Administrator determines such extension is necessary and the Plan Administrator provides notice of extension to the claimant prior to the end of the initial ninety (90) day period.  The notice advising of the denial shall specify the following: (i) the reason or reasons for denial, (ii) the specific Plan provisions on which the determination was based, (iii) any additional material or information necessary for the claimant to perfect the claim (explaining why such material or information is needed), and (iv) the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review.

Section 10.03       Appeals of Denied Administrative Claims.  All appeals shall be made by the following procedure:

(a)           A claimant whose claim has been denied shall file with the Plan Administrator a notice of appeal of the denial.  Such notice shall be filed within sixty (60) calendar days of notification by the Plan Administrator of the denial of a claim, shall be made in writing, and shall set forth all of the facts upon which the appeal is based.  Appeals not timely filed shall be barred.

(b)           The Named Appeals Fiduciary shall consider the merits of the claimant’s written presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Named Appeals Fiduciary shall deem relevant.

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(c)           The Named Appeals Fiduciary shall render a determination upon the appealed claim which determination shall be accompanied by a written statement as to the reasons therefor.  The determination shall be made to the claimant within sixty (60) days of the claimant’s request for review, unless the Names Appeals Fiduciary determines that special circumstances requires an extension of time for processing the claim.  In such case, the Named Appeals Fiduciary shall notify the claimant of the need for an extension of time to render its decision prior to the end of the initial sixty (60) day period, and the Named Appeals Fiduciary shall have an additional sixty (60) day period to make its determination.  The determination so rendered shall be binding upon all parties.  If the determination is adverse to the claimant, the notice shall provide (i) the reason or reasons for denial, (ii) the specific Plan provisions on which the determination was based, (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to a the claimant’s claim for benefits, and (iv) a statement that the claimant has the right to bring an action under section 502(a) of ERISA.

Section 10.04       Appointment of the Named Appeals Fiduciary.  The Named Appeals Fiduciary shall be the person or persons named as such by the Board or Committee, or, if no such person or persons be named, then the person or persons named by the Plan Administrator as the Named Appeals Fiduciary.  Named Appeals Fiduciaries may at any time be removed by the Board or Committee, and any Named Appeals Fiduciary named by the Plan Administrator may be removed by the Plan Administrator.  All such removals may be with or without cause and shall be effective on the date stated in the notice of removal.  The Named Appeals Fiduciary shall be a “Named Fiduciary” within the meaning of ERISA, and unless appointed to other fiduciary responsibilities, shall have no authority, responsibility, or liability with respect to any matter other than the proper discharge of the functions of the Named Appeals Fiduciary as set forth herein.

Section 10.05       Arbitration; Expenses.  In the event of any dispute under the provisions of this Plan, other than a dispute in which the primary relief sought is an equitable remedy such as an injunction, the parties shall have the dispute, controversy or claim settled by arbitration in New York, New York (or such other location as may be mutually agreed upon by the Employer and the Participant) in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association, before a panel of three arbitrators, two of whom shall be selected by the Company and the Participant, respectively, and the third of whom shall be selected by the other two arbitrators.  Any award entered by the arbitrators shall be final, binding and nonappealable and judgment may be entered thereon by either party in accordance with applicable law in any court of competent jurisdiction.  This arbitration provision shall be specifically enforceable.  The arbitrators shall have no authority to modify any provision of this Plan or to award a remedy for a dispute involving this Plan other than a benefit specifically provided under or by virtue of the Plan.  If the Participant substantially prevails on any material issue, which is the subject of such arbitration or lawsuit, the Company shall be responsible for all of the fees of the American Arbitration Association and the arbitrators and any expenses relating to the conduct of the arbitration (including the Company’s and Participant’s reasonable attorneys’ fees and expenses).  Otherwise, each party shall be responsible for its own expenses relating to the conduct of the arbitration (including reasonable attorneys’ fees and expenses) and shall share the fees of the American Arbitration Association.

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ARTICLE XI

MISCELLANEOUS

Section 11.01       Nonalienation of Benefits.  None of the payments, benefits or rights of any Participant shall be subject to any claim of any creditor of any Participant, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment (if permitted under applicable law), trustee’s process, or any other legal or equitable process available to any creditor of such Participant.  No Participant shall have the right to alienate, anticipate, commute, plead, encumber or assign any of the benefits or payments that he may expect to receive, continently or otherwise, under this Plan, except for the designation of a beneficiary as set forth in Section 5.01.

Section 11.02       Notices.  All notices and other communications required hereunder shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service.  In the case of the Participant, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing.  In the case of the Company, mailed notices shall be addressed to the Plan Administrator.

Section 11.03       Successors.  Any successor to the Company shall assume the obligations under this Plan and expressly agree to perform the obligations under this Plan.

Section 11.04       Other Payments.  Except as otherwise provided in this Plan, no Participant shall be entitled to any cash payments or other severance benefits under any of the Company’s then current severance pay policies for a termination that is covered by this Plan for the Participant.

Section 11.05       No Mitigation.  Except as otherwise provided in Section 4.01(d) and Section 4.04, Participants shall not be required to mitigate the amount of any Severance Benefit provided for in this Plan by seeking other employment or otherwise, nor shall the amount of any Severance Benefit provided for herein be reduced by any compensation earned by other employment or otherwise, except if the Participant is re-employed by Company, in which case Severance Benefits shall cease.

Section 11.06       No Contract of Employment.  Neither the establishment of the Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Eligible Employee or any person whosoever, the right to be retained in the service of the Company, and all Eligible Employees shall remain subject to discharge to the same extent as if the Plan had never been adopted.

Section 11.07       Severability of Provisions.  If any provision of this Plan shall be held invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provisions had not been included.

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Section 11.08       Heirs, Assigns, and Personal Representatives.  This Plan shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Participant, present and future.

Section 11.09       Headings and Captions.  The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

Section 11.10       Gender and Number.  Where the context admits: words in any gender shall include any other gender, and, except where otherwise clearly indicated by context, the singular shall include the plural, and vice-versa.

Section 11.11       Unfunded Plan.  The Plan shall not be funded.  No Participant shall have any right to, or interest in, any assets of the Company that may be applied by the Company to the payment of Severance Benefits.

Section 11.12       Payments to Incompetent Persons.  Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefor shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Company, the Committee and all other parties with respect thereto.

Section 11.13       Lost Payees.  A benefit shall be deemed forfeited if the Committee is unable to locate a Participant to whom a Severance Benefit is due.  Such Severance Benefit shall be reinstated if application is made by the Participant for the forfeited Severance Benefit while this Plan is in operation.

Section 11.14       Controlling Law.  This Plan shall be construed and enforced according to the laws of the State of New York to the extent not superseded by Federal law.

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SCHEDULE A

SEVERANCE BENEFITS

Section 16 Officers	24 months of annual Base Salary and Annual Bonus
Presidents of businesses whose annual revenue is $2 billion or more	18 months of annual Base Salary and Annual Bonus
All other Band 1 and 2 employees	12 months of annual Base Salary and Annual Bonus

Notwithstanding the foregoing, for Participants whose benefit is provided pursuant to a supplemental unemployment benefits trust, cash Severance Benefits shall be paid for the period of time set forth under the plan, with the trust being the exclusive source of all salary continuation other than Notice Pay.

A-1

EX-31.1

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Edward D. Breen, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Tyco International Ltd.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 30, 2009

/s/ EDWARD D. BREEN
Edward D. Breen
Chief Executive Officer

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

EX-31.2

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Christopher J. Coughlin, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Tyco International Ltd.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: April 30, 2009

/s/ CHRISTOPHER J. COUGHLIN
Christopher J. Coughlin
Executive Vice President
and Chief Financial Officer

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Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
TYCO INTERNATIONAL LTD.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        The undersigned officers of Tyco International Ltd. (the "Company") hereby certify to their knowledge that the Company's quarterly report on Form 10-Q for the period ended March 27, 2009 (the "Report"), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ EDWARD D. BREEN
Edward D. Breen
Chief Executive Officer

/s/ CHRISTOPHER J. COUGHLIN
Christopher J. Coughlin
Executive Vice President
and Chief Financial Officer

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 TYCO INTERNATIONAL LTD. CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002