ADT 2012 Annual Report Download - page 40

• Have not worked for, or have any immediate family member, been retained by, or received anything of
substantial value from the Company aside from his or her compensation as directors;
• Have no immediate family member who is an officer of the Company or its subsidiaries or has any
current or past material relationship with the Company;
• Do not work for, nor does any immediate family member, work, consult with, or are retained by
another publicly traded company’s board of directors on which the Chief Executive Officer or other
senior management serve;
• 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 or ADT’s charitable donations during the last fiscal year.
Our Board of Directors formally determines the independence of the ADT directors. Based on an annual
evaluation performed by, and recommendations made by, the Nominating and Governance Committee, our
Board of Directors annually determines the independence of each director. Our Board of Directors has
affirmatively determined that each of Mr. Colligan, Mr. Donahue, Mr. Dutkowsky, Mr. Gordon, Ms. Heller,
Ms. Hyle, Mr. Meister and Mr. Paliwal are independent directors and that none of these Directors has a material
relationship with ADT, either directly or as a partner, stockholder, or officer of an organization that has a
material relationship with ADT. Mr. Gursahaney, the current Chief Executive Officer, is not independent,
because of his role as an executive officer of the Company.
Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable,
and familial relationships, among others. The standards, which are set forth above, that are relied upon by the
Board of Directors in affirmatively determining whether a director is independent are comprised of those
objective standards set forth in the NYSE rules, which generally provide that:
• A director who is an employee, or whose immediate family member (defined as a spouse, parent, child,
sibling, father- and mother-in-law, son- and daughter-in-law, brother- and sister-in-law and anyone,
other than a domestic employee, sharing the director’s home) is an executive officer, of the Company,
would not be independent until three years after the end of such relationship.
• A director who receives, or whose immediate family member receives, more than $120,000 per year in
direct compensation from the Company, other than director and committee fees and pension or other
forms of deferred compensation for prior services (provided such compensation is not contingent in
any way on continued service) would not be independent until three years after ceasing to receive such
amount.
• A director who is a partner of or employed by, or whose immediate family member is a partner of or
employed by and personally works on the Company’s audit, a present or former internal or external
auditor of the Company would not be independent until three years after the end of the affiliation or the
employment or auditing relationship.
• A director who is employed, or whose immediate family member is employed, as an executive officer
of another company where any of the Company’s present executives serve on the other company’s
compensation committee would not be independent until three years after the end of such service or
employment relationship.
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