ADT 2015 Annual Report Download - page 23

CORPORATE GOVERNANCE OF THE COMPANY—CONTINUED
•Committee chairs will serve in their respective roles for five years, and rotate at the time of the annual meeting of stockholders following the
completion of their fifth year of service.
•When the Chairman of the Board of Directors steps down, he or she simultaneously resigns from the Board of Directors, unless the remaining
members of the Board of Directors decides that his or her services are in the best interests of the Company. It is only in unusual
circumstances that the Board of Directors decides that the retired Chairman continues to serve.
Certain Relationships and Related Party Transactions
The Board of Directors has adopted written Guidelines for Related Party Transactions. These Guidelines provide a process for compliance with
the related party provisions of the ADT Board Governance Principles, the Company’s Code of Conduct, and the Company’s By-laws, as well as
the disclosure obligations under the SEC rules. The Nominating and Governance Committee monitors, reviews and approves, if necessary, any
material related party transactions between ADT and its subsidiaries (collectively, the “Company”) and its senior officers and directors. ADT’s
Guidelines for Related Party Transactions state that on an annual basis, the Nominating and Governance Committee will receive a list of related
parties (the “Related Party List”) for each senior officer and director and such list will include any entity that employs a director, any entity
(including charitable organizations) for which the director or executive officer serves on the board of directors, and any entity in which the senior
officer or director owns more than a 10% interest. There are three types of material related party transactions covered by the Guidelines for
Related Party Transactions with specific review procedures:
•Type 1—transactions involving the purchase by or from the Company of products or services in the ordinary course of business in arms-
length transactions.
•Type 2—transactions involving the provision of consulting, legal, accounting or financial advisory services to the Company that could
compromise a director’s independence.
•Type 3—transactions in which a director or officer has a direct or indirect personal interest or that create a conflict of interest for the director
or officer.
Ordinary course of business, arms-length transactions with entities on the Related Party List are deemed pre-approved by the Nominating and
Governance Committee, in amounts in the aggregate for each such entity of less than 1% of the revenue of such entity or the Company. For
Type 1, the Guidelines for Related Party Transactions provide that the Nominating and Governance Committee, prior to filing the Company’s
proxy statement, annually reviews the Related Party List, including the amount of payments to or from each related party, in comparison to the
1% threshold to ensure that the directors meet the director independence requirement. Any proposed related party transaction involving a
member of the Board of Directors must be reviewed and approved by a majority of the disinterested members of the Board. All related party
transactions involving potential conflicts of interest must be reported to the Nominating and Governance Committee and approved or ratified by
such Committee.
During fiscal year 2015, there were no related party transactions that exceeded the 1% threshold under the Company’s Guidelines for Related
Party Transactions, nor were there any related party transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Code of Conduct
ADT’s corporate culture is built on the premise that the Company seeks to draw the best from its employees, and that every employee, without
exception, is responsible for the conduct and success of the enterprise. This includes full, accurate, candid, and timely disclosure of information
and compliance with all laws and regulatory standards. The Board of Directors is responsible for setting the ethical tenor for management and
the Company, and that ethical tenor works on the expectation that employees will act legally and ethically while performing work for the
Company.
The Board of Directors has adopted a written Code of Conduct for directors, executive officers, and employees that is designed to deter
wrongdoing and to promote, among other things:
•honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional
relationships;
•full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the SEC and other regulators and in our
other public communications;
•compliance with applicable laws, rules and regulations, including insider trading compliance; and
•accountability for adherence to the Code of Conduct and prompt internal reporting of violations of the Code, including illegal or unethical
behavior regarding accounting or auditing practices.
The Code of Conduct is reviewed periodically by all directors, executive officers, and employees, and they affirm in writing on an annual basis
that they understand and are fully in compliance with it. A copy of our Code of Conduct is posted on our website at http://investors.adt.com. A
copy of the Code of Conduct is available to stockholders upon written request to the Corporate Secretary at The ADT Corporation, 1501 Yamato
Road, Boca Raton, Florida 33431.
The ADT Corporation 2016 Proxy Statement 13
PROXY STATEMENT