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Jurors in Tyco Case Review Bonus

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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.

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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.

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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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