ADT 2015 Annual Report Download - page 21

CORPORATE GOVERNANCE OF THE COMPANY—CONTINUED
Director Independence
To maintain its objective oversight of management, the Board of Directors currently consists of all independent directors, with the exception of
Mr. Gursahaney, the current Chief Executive Officer of the Company. 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 of the Company, 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:
As stated in his biography on page 16 of this Proxy Statement, Richard Daly is the Chief Executive Officer and President of Broadridge and a
member of the board of directors of Broadridge. During fiscal year 2015, Broadridge provided proxy processing and mailing services, including
conduit payments to banks and brokers (collectively, the “ADT Proxy Payments”) provided by Broadridge to the Company. The ADT Proxy
Payments totaled $328,316 in 2015 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.
During fiscal year, 2013, ADT Security Services Canada, Inc., a subsidiary of the Company entered into a service contract for equipment,
materials and services with Tech Data Canada Corporation, a subsidiary of Tech Data Corporation (collectively, “Tech Data”). As stated in his
biography on page 17 of this Proxy Statement, Robert Dutkowsky is the Chief Executive Officer and a member of the board of directors of Tech
Data Corporation. During fiscal year 2015, ADT or one of its subsidiaries paid a total of $18,588,122CAD ($15,206,943USD) to Tech Data for
purchases and warehousing of security equipment. Since these payments were less than the greater of $1 million or 2% of Tech Data
Corporation’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.
As stated in his biography on page 17 of the Proxy Statement, Bruce Gordon is a member of the board of directors of CBS Corporation. During
fiscal year 2015, ADT or one of its subsidiaries paid a total of $22,500 to CBS Radio for advertising services. Since these payments were less
than the greater of $1 million or 2% of CBS Corporation’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. Gordon 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 fiscal year 2015 for telecom, IT support services and web collaboration (collectively, the “Citrix Payments”) provided by Citrix
to the Company. Mr. Hylen’s biography is on page 19 of this Proxy Statement. During fiscal year 2015, ADT paid $88,880 to Citrix for network
services, telecom, IT support services and web collaboration. 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 above were not material and did not affect the independence of such director
under the Independence Standards, including the independence requirements of the NYSE.
The ADT Corporation 2016 Proxy Statement 11
PROXY STATEMENT