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Director Independence Standard

Adopted March 5, 2004
Revised February 17, 2008

Perot Systems Corporation's Board of Directors believes that sound corporate governance practices require that a majority of its Directors should be "independent" from Perot Systems Corporation and its subsidiaries (collectively, "Perot Systems"). In other words, such Directors should have no material relationship with Perot Systems (either directly or as a partner, shareholder or officer of an organization that has a relationship with Perot Systems). Accordingly, the Board, on the recommendation of its Nominating and Governance Committee, has adopted this Director Independence Standard.

This Standard reflects the Board's current thinking with respect to independence issues and will be periodically reviewed, and may be modified, by the Board. Except where required by applicable law or the rules of the New York Stock Exchange, the criteria set forth in this standard are not intended to constitute (i) rigid rules that govern the Board's determination of whether a Director is independent from Perot Systems or (ii) an interpretation of any applicable law, rule or regulation.

This Standard will be disclosed in Perot Systems' annual proxy statement and published on Perot Systems' website.

Definitions

For purposes of this Standard,

  1. The term "affiliate" of, or a person "affiliated" with, a specified person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. The term "control" (including the terms "controlling," "controlled by" and “under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. In addition, the term "affiliate" will be defined in a manner consistent with Rule 10A-3 promulgated by the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "1934 Act"), as such rule may be amended from time to time.
  2. The term "executive officer" means, with respect to a person, the president, any vice president in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy making function, or any other person who performs a similar policy making function of such person. Executive officers of subsidiaries of a person may be deemed to be executive officers of the person if they perform such policy making functions for such person.
  3. The term "immediate family member" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person's home.

Independence Criteria

A Director will not be considered "independent" unless the Board affirmatively determines that the Director has no material relationship with Perot Systems. In making this determination, the Board will broadly consider all facts and circumstances the Board deems relevant from the standpoint of the Director and from that of persons or organizations with which the Director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships among others.

The following relationships will preclude a determination that a Director or candidate is "independent."

  1. A Director who is an employee, or whose immediate family member is an executive officer, of Perot Systems is not "independent" until three years after the end of such employment relationship, provided that employment as interim Chairman of the Board, Chief Executive Officer or other executive officer of Perot Systems shall not disqualify a director from being considered "independent" following that employment.
  2. A Director who has received, or whose immediate family member has received, more than $100,000 during any twelve-month period within the preceding three years in direct compensation from Perot Systems, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), is not "independent" provided that:

    a.  Compensation received by a director for former service as an interim Chairman of the Board, Chief Executive Officer or other executive officer of Perot Systems need not be considered in determining independence under this criteria; and

    b.  Compensation received by an immediate family member for service as an employee of Perot Systems (other than as an executive officer) need not be considered in determining independence under this criterion.

  3. A director who (a) is a current partner or employee of a firm that is Perot Systems’ internal or external auditor, or (b) within the last three years was a partner or employee of a firm that is Perot Systems’ internal or external auditor and personally worked on Perot Systems’ audit within that time, is not "independent."
  4. A director whose immediate family member (a) is a current partner of a firm that is Perot Systems’ internal or external auditor, (b) is a current employee of a firm that is Perot Systems’ internal or external auditor and participates in such firm’s audit, assurance or tax compliance (but not tax planning) practice, or (c) within the last three years was a partner or employee of a firm that is Perot Systems’ internal or external auditor and personally worked on Perot Systems’ audit within that time, is not "independent."
  5. A director who is, or has been within the last three years, employed, or whose immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of Perot Systems' present executives at the same time serve or served on that company's compensation committee is not "independent."
  6. A director who is a current employee, or whose immediate family member is a current executive officer, of a company that has made payments to, or received payments from, Perot Systems for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues is not "independent." For purposes of this determination, contributions made to tax exempt organizations shall not be considered to be "payments."
  7. A director appointed to serve on the Audit Committee of the Board is not "independent" unless he or she satisfies the requirements for independence of Rule 10A-3(b)(1) under the 1934 Act, as such rule may be amended from time to time. On the date this Standard was adopted, Rule 10A-3(b)(1) provided that a director would not be "independent" if, other than in his or her capacity as a member of the Board or the Audit Committee:

    a.  the director accepted directly or indirectly compensation from Perot Systems other than fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service, provided the compensation is not contingent on continued service; or

    b.  the director is an "affiliated person" of Perot Systems.

8. A Director has any other material relationship with Perot Systems.

The following commercial or charitable relationships will not preclude a determination that a Director or candidate is "independent," unless the Board determines otherwise.

1.  A Director who is an employee, or whose immediate family member is an executive officer, of another company that does business with Perot Systems where the amount of payments made to Perot Systems by such company or by Perot Systems to such other company are less than the threshold described in paragraph 6 above.

2.  A Director who is an executive officer of another company which is indebted to Perot Systems, or to which Perot Systems is indebted, and the total amount of either Perot Systems' or such other company's indebtedness to the other is less than 1% of Perot Systems' or the company's respective consolidated assets.

3.  A Director serves as an officer, director, trustee or employee of a charitable organization to which Perot Systems makes contributions.

4.  A Director, or an immediate family member of a Director, serves without compensation as a trustee, or as a member of the governing authority of an entity that serves as a trustee, for a trust the beneficiary of which is another Director or executive officer of Perot Systems.