ADT 2010 Annual Report Download - page 40

relating to their duties as a Director and to subscribe to appropriate publications at the Company’s
expense.
Other Directorships, Conflicts and Related Party Transactions
In order to provide sufficient time for informed participation in their board responsibilities:
• non-executive Directors who are employed as chief executive officer of a publicly traded
company are required to limit their external directorships of other public companies to two;
• non-executive Directors who are otherwise fully employed are required to limit their external
directorships of other public companies to three; and
• non-executive Directors who are not fully employed are required to limit their external
directorships of other public companies to five.
The Board may, in its discretion, waive these limits in special circumstances. When a Director, the
Chief Executive Officer or other senior managers intend to serve on another board, the Nominating
and Governance Committee is required to be notified. The Committee reviews the possibility of
conflicts of interest or time constraints and must approve the officer’s or Director’s appointment to the
outside board. Each Director is required to notify the chair of the Nominating and Governance
Committee of any conflicts. The Chief Executive Officer may serve on no more than two other public
company boards.
The company has a formal, written procedure intended to ensure compliance with the related
party provisions in our Guide to Ethical Conduct and with our corporate governance principles. For the
purpose of the policy, a ‘‘related party transaction’’ is a transaction in which we participate and in
which any related party has a direct or indirect material interest, other than ordinary course,
arms-length transactions of less than 1% of the revenue of the counterparty. Transactions exceeding the
1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services
that could impair a Director’s independence, must be approved by our Nominating and Corporate
Governance Committee. Any related party transaction in which an executive officer or a Director has a
personal interest, or which could present a possible conflict under the Guide to Ethical Conduct, must
be approved by a majority of disinterested directors, following appropriate disclosure of all material
aspects of the transaction.
Under the rules of the Securities and Exchange Commission, public issuers such as the Company
must disclose certain ‘‘related person transactions.’’ These are transactions in which the Company is a
participant where the amount involved exceeds $120,000, and a Director, executive officer or holder of
more than 5% of our common stock has a direct or indirect material interest. Although the Company
engaged in commercial transactions in the normal course of business with companies where the
Company’s Directors were employed and served as officers, none of these transaction exceeded 1% of
the Company’s gross revenues and these transactions are not considered to be related party
transactions.
Guide to Ethical Conduct
We have adopted the Tyco Guide to Ethical Conduct, which applies to all employees, officers, and
Directors of Tyco. The Guide to Ethical Conduct meets the requirements of a ‘‘code of ethics’’ as
defined by Item 406 of Regulation S-K and applies to our Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer, as well as all other employees. The Guide to Ethical Conduct
also meets the requirements of a code of business, conduct and ethics under the listing standards of the
New York Stock Exchange (‘‘NYSE’’). The Guide to Ethical Conduct is posted on our website at
www.tyco.com under the heading ‘‘Corporate Citizenship—Governance’’. We will also provide a copy of
the Guide to Ethical Conduct to shareholders upon request. We disclose any amendments to the Guide
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