NEW YORK – Mark H. Swartz (search), Tyco International Ltd.'s (TYC) former chief financial officer, insisted Thursday that millions of dollars of loan forgiveness he received in 1999 didn't have to be disclosed in the company's proxy statement because it was a "relocation benefit."
Under questioning from prosecutors in the Tyco (search) retrial, Swartz said the conglomerate's compensation committee amended its 1995 New York relocation program to include loan forgiveness when it forgave more than $37 million of internal loans by Swartz and L. Dennis Kozlowski (search), Tyco's former chief executive, in 1999.
Swartz, who conceded that he wasn't relocating that year, said the company had previously received advice from its outside lawyers that relocation benefits as part of a broad-based relocation plan didn't have to be disclosed in public filings. Swartz said he had previously received relocation loans to purchase residences in New Hampshire, New York and Florida where the company maintained corporate offices.
"In fact, it was not part of any relocation plan whatsoever?" prosecutor Owen Heimer asked.
"Not until 1999," Swartz said.
Prosecutors claim the executives improperly forgave their own loans without the approval of Tyco's board of directors or compensation committee.
Swartz and Kozlowski are on trial in state court in New York City, facing charges of grand larceny and other crimes in connection with bonuses and other compensation they received. They have denied wrongdoing.
Meanwhile, New York State Supreme Court Justice Michael J. Obus, who is presiding, told jurors he expects the presentation of evidence in the case to finish next week, with closing arguments beginning the week before the Memorial Day holiday.
The judge said he expects jury deliberations to begin after the holiday.
Swartz is expected to continue his testimony when the trial resumes Monday.