ADT 2010 Annual Report Download - page 39

organization’s charitable receipts in the last fiscal year. In addition, a Director is not
independent if he or she serves as a director, trustee, executive officer or similar position of a
charitable organization if Tyco made payments to such charitable organization in an amount that
exceeds 1% of Tyco’s total annual charitable contributions made 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
independent Director nominees are Timothy M. Donahue, Brian Duperreault, Bruce S. Gordon, Rajiv
L. Gupta, John A. Krol, Brendan R. O’Neill, Dinesh Paliwal, William S. Stavropoulos, Sandra S.
Wijnberg, David Yost and Michael Daniels.
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. Each Director must tender
his or her resignation from the Board at the annual general meeting of shareholders following his or
her 72nd birthday. The Board may, in its discretion, waive this limit in special circumstances, as it has
done for the past two years with respect to Mr. Krol, whom the Nominating and Governance
Committee has nominated to serve an additional term in light of his extensive experience and
knowledge as lead Director from 2002 through 2007. Any nominee for Director who does not receive a
majority of votes cast from the shareholders is not elected to the Board.
The Nominating and Governance Committee is responsible for the review of all Directors, and
where necessary will take action to recommend to shareholders the removal of a Director for
performance, which requires the affirmative vote of a majority of the votes present (in person or by
proxy) at a duly called shareholder meeting.
Directors are expected to inform the Nominating and Governance Committee of any significant
change in their employment or professional responsibilities and are required to 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 General Meeting following the completion of their fifth year
of service.
The Board may choose to override these guiding principles in special circumstances or if it
otherwise believes it is appropriate to do so.
When the Chairman of the Board / Chief Executive Officer steps down, he or she must
simultaneously tender his or her resignation from the Board, which the Board may accept or decide
that his or her continued services as a Director are in the best interests of the Company. It is only in
unusual circumstances that the Board decides that the retired Chief Executive Officer should continue
to serve as Chairman.
Director Orientation and Education
A formal orientation program is provided to new Directors by the Corporate Secretary on Tyco’s
mission, values, governance, compliance and business operations. In addition, a program of continuing
education is annually provided to incumbent Directors, and it includes review of the Company’s Guide
to Ethical Conduct. Directors are also encouraged to take advantage of outside continuing education
2011 Proxy Statement 31