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Jurors in Tyco Case Review Bonus

Testimony over a $12.5-million payment to the former CFO is read back to the jury.

March 23, 2004|From Reuters

Jurors revisited a $12.5-million bonus awarded to former Tyco International Ltd. Chief Financial Officer Mark Swartz as they deliberated Monday in his corporate corruption trial.

The jurors had Swartz's lengthy testimony over the $12.5-million payment he received in 1999 read back to them. Swartz didn't report the bonus on his tax returns that year, saying the amount was unintentionally left off his W-2 income disclosure.

Swartz and former Tyco Chairman L. Dennis Kozlowski are accused of looting Tyco of $600 million through unauthorized loans and bonuses and illicit stock sales.

Swartz had testified he received the bonus for Tyco's outstanding financial performance in 1999. But he agreed not to take all of his bonus in cash. Instead, he had a relocation loan balance from Tyco cut by $12.5 million.

Kozlowski and an events planner who admitted having an affair with the former Tyco chairman had their relocation loan balances reduced by $25 million and $1 million, respectively.

The outstanding loans stemmed from Tyco's relocation of corporate staff in 1995 from Exeter, N.H., to New York.

Swartz said Kozlowski told him that a Tyco director, the late Phil Hampton, approved having the loan balances reduced. Hampton died of cancer in 2001.

In 2002, Swartz returned the $12.5 million to Tyco after the board hired an outside law firm to scrutinize executive pay.

Jurors resumed deliberating after rehearing the testimony.

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