PEMBROKE, Bermuda -- Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) today announced that its Board of Directors has adopted limits on severance and change-in-control agreements for senior executives. The Board has also adopted guidelines that require senior executives (e.g., "Section 16B officers" as defined by the Securities and Exchange Commission) to retain a minimum percentage of shares acquired through equity awards and, over time, to hold certain amounts of Tyco common stock. In addition, the Board has revised the compensation structure for directors.

Prior to today's action, the Company had no official corporate policy on severance and no requirement for stock ownership by its senior management or Board.

The severance and change-in-control policies will be applied to future severance agreements. The major provisions of these policies include:

- Senior Executives will be limited to cash severance of two times base salary and bonus at the time of termination and payments of 2.99 times base salary and bonus in a change-of-control situation.

- Post-employment benefits will be limited to outplacement services and transitional health benefits, with no provisions for consulting contracts, airplane usage, offices or other perquisites.

The new minimum ownership guidelines range from two times base pay for Senior Vice Presidents to ten times base pay for the Chief Executive Officer. These officers will be required to retain at least 75% of vested stock and shares acquired on option exercises (net of taxes) until certain minimum guidelines are met and to retain at least 25% thereafter. Executives may reach this target over a multi-year period.

The principal changes in directors' compensation are to move the equity part of their compensation from stock options to stock units that vest at their retirement from the Board and to recognize the added responsibilities of certain Board roles. Total compensation for non-chair directors will not change. The major provisions of their compensation structure include:

- The cash compensation for individual members will remain at $80,000 per year.

- Directors will also receive $120,000 per year in deferred stock units ("DSU's") that will be paid out in shares only at the time of a director's retirement from the Board. Directors were previously paid a comparable value in the form of stock options.

- Additional retainers will be granted for committee chairs, including $20,000 for Audit Committee Chair, $15,000 for the Compensation or Governance Committee Chair and $20,000 for the Lead Director.

Chairman and CEO Ed Breen said: "At the time of our Annual Meeting, we told our shareholders that our new Board would develop a severance policy as part of its review of the Company's governance program. We have now fulfilled that commitment. In addition, the Board has adopted guidelines that require Tyco's senior executives and directors to maintain certain levels of Company stock, thereby ensuring that the interests of Tyco's leadership and shareholders are completely aligned. We believe these policies further our goal of establishing clear and transparent standards for all aspects of Tyco's management so that our investors know that we are acting on their behalf."

Tyco International Ltd.