ADT 2007 Annual Report Download - page 32

• do not work for, nor does any immediate family member work for, consult with, or are retained
by another publicly traded company on whose Board of Directors the Tyco Chief Executive
Officer or other member of senior management serves;
• do not serve as, nor does any immediate family member serve as, an executive officer of any
entity which the Company’s annual sales to or purchases from exceeded one percent of either
entity’s annual revenues for the last fiscal year;
• do not serve, nor does any immediate family member serve, on either the board of directors or
the compensation committee of any corporation that employs either a nominee for Director or a
member of the immediate family of any nominee for Director; and
• do not serve, nor does any immediate family member serve, as a director, trustee, executive
officer or similar position of a charitable or non-profit organization to which the Company or its
subsidiaries made charitable contributions or payments in excess of one percent of the
organization’s charitable receipts and less than one percent of Tyco’s total annual charitable
contributions during the last fiscal year.
The Board has determined that all of the Director nominees, with the exception of the Chief
Executive Officer, meet these standards and are therefore independent of the Company. The Board has
also determined that such Directors are ‘‘outside directors’’ as defined in section 162(m) of the Internal
Revenue Code. All nominees have no material relationship with the Company, either directly or as a
partner, shareholder or affiliate of an organization that has a relationship with the Company. The
independent Director nominees are Dennis C. Blair, Brian Duperreault, Bruce S. Gordon, Rajiv L.
Gupta, John A. Krol, Brendan R. O’Neill, William S. Stavropoulos, Sandra S. Wijnberg, Jerome B.
York and Timothy M. Donahue.
Director Service
Directors are elected by an affirmative vote of a majority of the votes cast by shareholders at the
annual general meeting of shareholders and they serve for one-year terms. They must resign from the
Board at the annual general meeting of shareholders following their 72nd birthday. Any nominee for
Director who does not receive a majority of votes cast from the shareholders is not elected to the
Board. The sitting Director will remain in office until a new Director is elected, which shall take place
in a timely manner.
The Nominating and Governance Committee is responsible for the review of all Directors, and
where necessary will take action to remove a Director for performance, which requires the unanimous
approval of the Board. This unanimous approval does not include the approval of the Director whose
removal is sought.
Directors inform the Nominating and Governance Committee of any significant change in their
employment or professional responsibilities and will offer their resignation to the Board in the event of
such a change. This allows for discussion with the Nominating and Governance Committee to
determine if it is in the mutual interest of both parties for the Director to continue on the Board.
The guideline is for committee chairs and the lead Director to:
• serve in their respective roles five years, and
• to rotate at the time of the annual meeting following the completion of their fifth year of
service.
When the Chairman of the Board / Chief Executive Officer steps down, he or she must
simultaneously resign from the Board, unless the Board decides that his or her services as a Director
12 2008 Proxy Statement