ADT 2012 Annual Report Download - page 46

a Master’s degree in Engineering from the Indian Institute of Technology (IIT Roorkee), a Master’s degree in
applied Science and Engineering and a Master’s degree in Business Administration, both from Miami University
(Ohio). Mr. Paliwal’s qualifications to serve on our Board include his extensive leadership and governance
experience as a public company chief executive officer, and his engineering and financial background.
Additional Information about the Nominees
On December 17, 2012, the Company entered into a voting and standstill agreement (the “Agreement”) with Keith
A. Meister and Corvex Management LP (collectively, the “Corvex Group”) and Soros Fund Management LLC (“SFM”).
Pursuant to the Agreement, effective at 12:01 am, Eastern Time on December 19, 2012, the size of our
Board of Directors increased from eight to nine members and Mr. Meister was appointed to fill the newly created
directorship. In addition, Mr. Meister was appointed to serve as a member of the Audit Committee.
The Agreement provides that Mr. Meister will be included in the Company’s slate of nominees for election
of directors at the Annual Meeting. The Agreement also provides, among other things, that, so long as
Mr. Meister is a director or, if longer, until the date that is seven (7) business days prior to the last day that
stockholders of the Company may timely notify the Company of a nomination or proposal to be properly brought
before the 2014 Annual Meeting of the Company’s stockholders pursuant to the Company’s By-Laws, as then in
effect (the “Notice Date”), the Corvex Group, and until the earlier of the Notice Date and December 31, 2013,
SFM or any fund over which SFM has investment management authority (the “SFM Funds”), (i) will not support
or participate in any “withhold the vote” or similar campaign and (ii) will not present any proposals for
consideration, or conduct any proxy solicitations for use, at any meeting of the Company’s stockholders. The
Agreement further provides, among other things, that for the periods specified above with respect to the Corvex
Group, the Corvex Group (i) will vote in favor of the Company’s slate of director nominees and otherwise in a
manner consistent with the Board’s recommendations, (ii) will not acquire beneficial ownership of more than
15,666,021 shares of common stock of the Company, excluding (subject to certain limitations) 575,000 shares
currently beneficially owned by both the Corvex Group and SFM and (iii) will not, other than in a Rule 144
broker transaction, sell or otherwise dispose of any voting securities of the Company to any person who is (or
will become as a result of the such transaction) a beneficial owner of 4% or more of the outstanding voting
securities of the Company, or otherwise dispose of, in a single day, 4% or more of the outstanding voting
securities of the Company through the public markets. Pursuant to the Agreement, SFM has also agreed that the
SFM funds will not acquire beneficial ownership of more than 875,000 shares of common stock of the Company.
The Agreement provides that Mr. Meister will resign from the Board of Directors, and the Company will be
relieved of its obligation to include Mr. Meister in its slate of nominees for election as director at the Annual
Meeting, upon a breach in any material manner by the Corvex Group of its voting and standstill obligations under
the Agreement, or upon the Corvex Group failing to maintain beneficial ownership and, either directly or through
a nominee, record ownership of at least 3% of the outstanding shares of common stock of the Company.
In connection with his appointment as director under the Agreement, Mr. Meister receives the same
compensation as the Company’s other non-employee directors, consisting of a cash retainer in the amount of
$80,000 per year and an annual equity award of restricted stock units with a grant date fair value of
approximately $120,000 and a one-year vesting term.
There are no other related person transactions between the Company and Mr. Meister or any of his
immediate family members or the Corvex Group requiring disclosure pursuant to Item 404(a) of Regulation S-K
of the Exchange Act.
The foregoing is not a complete description of the terms of the Agreement. For a further description of the
terms of the Agreement, including a copy thereof, please see our Current Report on Form 8-K that we filed with
the SEC on December 18, 2012.
The Board of Directors unanimously recommends that stockholders vote FOR the election of all of the
nominees for Director to serve until the next Annual Meeting.
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