ADT 2014 Annual Report Download - page 15

CORPORATE GOVERNANCE OF THE COMPANY—CONTINUED
Director Independence
To maintain its objective oversight of management, the Board of Directors consists currently of all independent directors, with the exception of
Mr. Gursahaney, the current Chief Executive Officer. The Board of Directors has adopted categorical standards designed to assist it in assessing
director independence (the “Independence Standards”). The Independence Standards are included in our Board Governance Principles which
can be found on our website at http://investors.adt.com. The Independence Standards have been designed to comply with the standards
required by the NYSE. In addition, committee members are subject to any additional independence requirements that may be required by law,
regulation or NYSE listing standards.
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. Under our Board Governance Principles and NYSE listing standards, a director
is not independent unless the Board of Directors makes an affirmative determination that such director has no material relationships with the
Company (either directly or indirectly as a partner, stockholder or officer of an organization that has a relationship with the Company).
Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships, among others.
Our Board of Directors has affirmatively determined that each of Mr. Colligan, Mr. Daly, Mr. Donahue, Mr. Dutkowsky, Mr. Gordon, Ms. Heller,
Ms. Hyle and Mr. Hylen has satisfied the Independence Standards as well as the independence requirements of the NYSE. Mr. Gursahaney, the
current Chief Executive Officer, is not independent, because of his role as an executive officer of the Company.
In making its independence determinations, the Board of Directors considered and reviewed the various commercial and employment
transactions and relationships known to the Board of Directors (including those identified through annual directors’ questionnaires) that exist
between us and our subsidiaries and the entities with which certain of our directors are, or have been, affiliated. Specifically, the Board’s
independence determinations included reviewing the following transactions:
On August 5, 2013, ADT Security Services Canada, Inc., a subsidiary of the Company (“ADTSS Canada”) entered into a service contract for
equipment, materials and services for approximately $16 million per year (the “Contract”) with Tech Data Canada Corporation, a subsidiary of
Tech Data Corporation (“Tech Data Canada”). As stated in his biography on page 16, Mr. Dutkowsky is the Chief Executive Officer and a
member of the board of directors of Tech Data Corporation. During fiscal year 2014, ADT paid $9,487,913 to Tech Data Canada for purchases
and warehousing of security equipment. Since these payments were less than the greater of $1 million or 2% of Tech Data Canada’s
consolidated gross revenues in any of the last three fiscal years, and were below the thresholds set forth under our Independence Standards,
the Nominating and Governance Committee determined that Mr. Dutkowsky satisfied the Independence Standards, including the independence
requirements of the NYSE.
On January 9, 2014, in connection with its recommendation to the Board of Directors to appoint Richard Daly to the Board of Directors, the
Nominating and Governance Committee considered Mr. Daly’s current position with Broadridge and the amounts paid by the Company or Tyco
during each of the last three fiscal years for proxy processing and mailing services, including conduit payments to banks and brokers
(collectively, the “ADT Proxy Payments”), provided by Broadridge to the Company. As stated in his biography on page 15, Mr. Daly is the Chief
Executive Officer and President of Broadridge and a member of the board of directors of Broadridge. The ADT Proxy Payments totaled $300,085
in 2014 and since the ADT Proxy Payments were less than the greater of $1 million or 2% of Broadridge’s consolidated gross revenues in any of
the last three fiscal years, and were below the thresholds set forth under our Independence Standards, the Nominating and Governance
Committee determined that Mr. Daly satisfied the Independence Standards, including the independence requirements of the NYSE.
On January 8, 2015, in connection with its recommendation to the Board of Directors to appoint Christopher Hylen to the Board of Directors, the
Nominating and Governance Committee considered Mr. Hylen’s current position with the Citrix SaaS Division (“Citrix”) and the amounts paid by
the Company during each of the last three fiscal years for telecom and IT support services and web collaboration, (collectively, the “Citrix
Payments”), provided by Citrix to the Company. Mr. Hylen’s biography is on page 17 of this Proxy Statement. During 2012, 2013 and 2014,
ADT paid $40,877 to Citrix Online for pre- and post-Spin-off (as defined below on page 12 in “Certain Relationships and Related Party
Transactions”) telecom services and $521,941 to Citrix Systems, Inc. for server subscriptions and renewals. Since the Citrix Payments were less
than the greater of $1 million or 2% of Citrix’s consolidated gross revenues in any of the last three fiscal years, and were below the thresholds set
forth under our Independence Standards, the Nominating and Governance Committee determined that Mr. Hylen satisfied the Independence
Standards, including the independence requirements of the NYSE.
The Board of Directors determined that the transactions identified were not material and did not affect the independence of such director under
our Independence Standards, including the independence requirements of the NYSE.
The ADT Corporation 2015 Proxy Statement 7
PROXY STATEMENT