Tyco To Fight Swartz's SeveranceOct 8, 2002 | Palm Beach Post Tyco International will contest the severance package of its former chief financial officer, Mark Swartz, the company said Monday.
Swartz, a Boca Raton resident, left the company in September after Chief Executive Edward Breen hired David FitzPatrick, the former CFO of Hartford, Conn.-based United Technologies Corp., to replace him. UTC is the parent of Pratt & Whitney and Sikorsky Aircraft, which have offices in northwestern Palm Beach County.
Swartz is under indictment in New York along with former Tyco Chief Executive Dennis Kozlowski and former General Counsel Mark Belnick on charges they stole more than $170 million from the company, mainly through the company's relocation and key-employee loan programs as well as special bonus deals. Kozlowski and Swartz also are accused of making $430 million in improper stock sales through overseas Tyco subsidiaries. Swartz is still trying to make $50 million bail.
The company gave Swartz a severance package of deferred pay, insurance, consulting and other fees amounting to $45 million, as well as $9 million in stock options and restricted shares, before his indictment in mid-September, according to the Manhattan District Attorney's Office.
Now Tyco wants it back. It will disclose its plan to retrieve some or part of Swartz's severance pay through arbitration in a filing with the Securities and Exchange Commission this week.
"We said previously we would do it but we haven't filed anything yet," spokesman Gary Holmes said.
Although the Manhattan DA has filed charges against Kozlowski, Swartz and Belnick, the company is suing only Kozlowski for return of all illegal payments made to him and others, including Swartz, from 1995 to 2002.
In other news, the Financial Times reported Monday that Tyco is considering a move of its headquarters back to the United States from Bermuda.
Holmes said a move "is always under review but we have no plans currently to change it."