21. Robert A. G. Monks, telephone interview with the author, May 7, 2013; and Dennis Kozlowski, telephone interview with the author, May 30, 2012. See, Robert A. G. Monks,
Citizens Disunited: Passive Investors, Drone CEOs, and the Corporate Capture of the American Dream
(McLean, VA: Miniver Press, 2013). See also, Robert A. G. Monks,
Corpocracy: How CEOs and the Business Roundtable Hijacked the World’s Greatest Wealth Machine—And How to Get It Back
(Hoboken, NJ: John Wiley & Sons, 2008); and Robert A. G. Monks and Nell Minow,
Corporate Governance,
5th ed. (Hoboken, NJ: John Wiley & Sons, 2011).
22. Robert A. G. Monks, telephone interview with the author, May 7, 2013.
23.
People v. Kozlowski II,
direct examination of Dennis Kozlowski, transcript at 12085:15–22 and 12086:1–11, April 27, 2005.
24. Ibid.
25. Ibid.
26. Dennis Kozlowski, telephone interview with the author, May 30, 2012.
27. Ibid.
28. Ibid.
29.
Spencer Stuart Board Index,
“Board Composition,” 27th ed. (November 6, 2012), 23.
30. Ibid.
31. U.S. Securities and Exchange Commission, “Proxy Disclosure Enhancements,”
Final Rule, adopted December 16, 2009, effective February 28, 2010; and Dodd-Frank, Section 972. Dodd-Frank amended the Securities Exchange Act of 1934 (15 U.S. C. 78a et seq.) by inserting Section 14B: ‘‘Not later than 180 days after the date of enactment of this subsection, the Commission shall issue rules that require an issuer to disclose in the annual proxy sent to investors the reasons why the issuer has chosen: (1) the same person to serve as chairman of the board of directors and chief executive officer (or in equivalent positions); or (2) different individuals to serve as chairman of the board of directors and chief executive officer (or in equivalent positions of the issuer).” Ibid.
32. Robert A. G. Monks, telephone interview with the author, May 7, 2013.
Chapter Seven: Big Time Scrutiny
1. Dennis Kozlowski, interview with the author, New York City, New York, June 23, 2012.
2. Ibid. Robert Dilenschneider’s wisdom appears to be adapted from quotes attributed to Henry Hillman (“A whale is harpooned only when he spouts”) and Charles A. Jaffe (“Whales only get harpooned when they come to the surface, and turtles can only move forward when they stick their neck out, but investors face risk no matter what they do.”).
3. I. Jane Dugan, “The Best Performers: The Business Week Fifty,”
Businessweek,
March 24, 1997. “The companies of the S&P 500 are the most closely watched in America. Now, for the first time, we are ranking them on how well they perform. At the top are the Business Week 50—the new corporate elite.” Ibid.; William C. Symonds, “The Most Aggressive CEO,”
Businessweek
(cover story), May 27, 2001; and “The Top 25 Managers of the Year,”
Businessweek
(cover story), January 13, 2002.
4. Daniel Trotta, “Short Sellers Have Been the Villain for 400 Years,” Reuters, September 26, 2008.
5. Alistair Barr, “Short Sellers: The Good, the Bad, and the Ugly,”
MarketWatch,
December 19, 2001.
6. “Dennis Kozlowski of Tyco International: King Conglomerate,”
Institutional Investor,
April 1, 2001.
7. Alistair Barr, “Short Sellers: The Good, the Bad, and the Ugly,”
MarketWatch,
December 19, 2001.
8. Mark P. Baumann, “Restructuring Charges,” ACC7500: Financial Statement Analysis, Babson College.
9. “Tyco Completes Acquisitions of AMP,”
New York Times,
April 6, 1999.
10. Financial Accounting Standards Board, “Statement 141—Business Combinations” (rev. 2007, effective December 2008).
11. J. Bradford McGee, telephone interview with the author, May 30, 2013.
12. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
13. Ibid.
14.
People v. Kozlowski II,
cross-examination of J. Bradford McGee, transcript at 10057:20–23, 10058:
5, and 10058:8–17, April 7, 2005; and
People v. Kozlowski II,
direct examination of J. Bradford McGee, transcript at 09763:18–21, and 9765:18–25, April 6, 2005.
15. Floyd Norris, “Tyco Shares Plunge After Company Discloses S.E.C. Inquiry,”
New York Times,
December 10, 1999.
16. Tyco International Ltd. Press Release, “Mark Belnick to Join Tyco International,” August 27, 1998.
17. Steve Fishman, “The Convert,”
New York Magazine,
June 2004, 2 and 11.
18. Mark Belnick, telephone interview with the author, May 14, 2013; and Steve Fishman, “The Convert,”
New York Magazine,
June 2004, 2. When he was hired as outside counsel by Tyco in 1999, McLucas was with the law firm of Wilmer, Cutler, Pickering, Hale & Doore. Ibid.
19. Mark Belnick, telephone interview with the author, May 14, 2013; and “Witness Says Tyco Workers Told to Assist the S.E.C.,”
New York Times,
June 3, 2004.
20. Dennis Kozlowski, telephone interview with the author, May 17, 2012; and Steve Fishman, “The Convert,”
New York Magazine,
June 2004, 12.
21. Tyco International Ltd. Press Releases: “Tyco International Is Named Among 50 Best Performers by Business Week, Business Week Ranks Tyco Among Top Companies in Sales, Profits and Shareholder Return Performance,” March 20, 2000; “Tyco International Reports 47 Percent Increase In Second Quarter Earnings Per Share, Strong Organic Growth Drives Earnings per Share Rise to 50 Cents from 34 Cents,” April 18, 2000; “Tyco International Agrees to Acquire Thomas & Betts Electronic OEM Business, Acquisition Provides Excellent Strategic Fit, Will Be Immediately Accretive to Earnings,”
May 7, 2000; and “Tyco International to Acquire Mallinckrodt, Acquisition Will Have Immediate Positive Impact on Earnings, Strengthens Tyco Healthcare’s Leading Positions in Medical Devices,” June 28, 2000.
22. Herb Greenburg, “Does Tyco Play Accounting Games?”
Fortune,
April 1, 2002; and Dennis Kozlowski, telephone interview with the author, May 17, 2012.
23. Steve Fishman, “The Convert,”
New York Magazine,
June 2004, 12; and “Witness Says Tyco Workers Told to Assist The S.E.C.,”
New York Times,
June 3, 2004.
24. Herb Greenburg, “Does Tyco Play Accounting Games?”
Fortune,
April 1, 2002.
25.
People v. Kozlowski I,
Kozlowski defense counsel Stephen Kaufman, opening statements, transcript at 00110:23–25 and 00111:1–2, October 7, 2003; and Dennis Kozlowski, telephone interview with the author, May 17, 2012.
26. “Dennis Kozlowski of Tyco International: King Conglomerate,”
Institutional Investor,
April 1, 2001.
Chapter Eight: The Good Old Days
1. Andy Bernard,
The Office,
“Finale,” Season 9: Episode 23 (NBC), originally aired May 16, 2013.
2. “Corporate Background,”
Tyco International Ltd.
3.
State v. Kozlowski II,
direct examination of Dennis Kozlowski, transcript at 12052:22–25 and 12053:2, April 27, 2005.
4. Raytheon Company Press Release, “Kozlowski Elected To Raytheon Board of Directors,” June 28, 1995.
5. “Raytheon Company (RTN),”
Hoover Company Profiles.
6. Dennis Kozlowski, interview with the author, New York City, New York, June 23, 2012.
7. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
8. Retention Agreement between Tyco International Ltd. and L. Dennis Kozlowski, (January 21, 2001).
9. Ibid. at Section (b)(i) as amended on August 1, 2001.
10.
Tyco International Ltd.
v. L. Dennis Kozlowski,
U.S. District Court for the Southern District of NY, No. 02-7317, Complaint ¶6(g), September 17, 2002.
11. Retention Agreement between Tyco International Ltd. and L. Dennis Kozlowski, (January 21, 2001), Section 2(b).
12. TYC-NYSE, “Tyco Historical Prices, January 22, 2001”
Yahoo Finance.
Close price adjusted for splits and dividends.
13. Retention Agreement between Tyco International Ltd. and L. Dennis Kozlowski, (January 21, 2001), Section 3.
14. Ibid.
15. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012. See also, Retention Agreement between Tyco International Ltd. and L. Dennis Kozlowski (January 21, 2001).
16. Retention Agreement between Tyco International Ltd. and L. Dennis Kozlowski, Section 5(3) and Section 1(a). If Kozlowski were to be terminated for Cause, “the Company shall have no further obligation to Executive other than the Accrued Benefits.” Ibid.
17. “Economists Call It a Recession,” CNNMoney, November 26, 2001; and Tyco International Ltd. Press Release, “Tyco to Acquire Scott Technologies, Acquisition Will Have Immediate Positive Impact on Tyco’s Earnings, Broadens Product Line of Tyco Fire & Security Services and Provides Recurring Revenue Stream,” February 5, 2001.
18. Joseph Weber, “The
Businessweek
50–The Best Performers,”
Businessweek,
March 23, 2001.
19. Tyco International Ltd. Press Release, “Tyco Is Top Pick in Reuters Survey of Larger Companies,” April 27, 2001. The survey was conducted by Tempest Consultants and data was collected from 407 broker-analysts. Ibid.
20. William C. Symonds, “The Most Aggressive CEO,”
Businessweek
(cover story), May 28, 2001, 68–77.
21. Sandra Kozlowski, interview with the author, New York City, New York, October 5, 2012.
22. “Jury Views Big Bash in Italy by Tyco Ex-CEO,”
Los Angeles Times,
October 29, 2003.
23. Steve Dunleavy, “On Her First Prison Visit My Wife Said ‘I Want a Divorce’: Koz,”
New York Post,
October 30, 2006.
24.
People v. Kozlowski I,
direct testimony of Tammy Cross, transcript at 07659:14–23, January 5, 2004.
25. Ibid.
26. Ibid. at 07659:18.
27. Ibid. at 07659:25–07660:1–6.
28. “Tyco Jury Hears of Ex-Chief’s Bills,”
New York Times,
January 6, 2004.
29.
People v. Kozlowski I,
direct testimony of Tammy Cross, transcript at 07655, January 5, 2004.
30. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
31.
People v. Kozlowski I,
direct testimony of Barbara Jacques, transcript at 02107:16–25 and 02108:1–11, October 23, 2003.
32. See for example, Jerry Useem, “The Biggest Show No One’s Watching MISTRESSES ON THE STAND! CRIMINALS IN THE ELEVATOR! PILES AND PILES OF REALLY BORING DOCUMENTS! HERE’S WHAT THE TRIAL OF FORMER TYCO CEO DENNIS KOZLOWSKI—NOW AT ITS MIDPOINT—IS REALLY LIKE.,”
Fortune,
December 8, 2003.
33.
People v. Kozlowski I,
direct testimony of Barbara Jacques, transcript at 02164:13–25, 02165:1–9, 02174:3–12, 02175:2, 02168:10, 02174:3–12, 022217:10, 0222:20–21, 02220:22–25, 02221:1, and 02221:8–10, October 23, 2003.
34. “Jurors See Tape of Kozlowski’s Party,” CNN, October 29, 2003.
35.
People v. Kozlowski I,
direct testimony of Barbara Jacques, transcript at 02189:22–24, 02222:16–25 and 02223:1–16, October 27, 2003.
36.
People v. Kozlowski I,
cross-examination of Barbara Jacques, transcript at 02322:14–22, October 28, 2003.
37. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
38. Ibid.
39.
People v. Kozlowski I,
cross-examination of Barbara Jacques, transcript at 02299:3–10, 02303:1–25, 02397:1–23, and 02314:1–18, October 28, 2003.
40.
People v. Kozlowski I,
direct testimony of Barbara Jacques, transcript at 02271:1–2, October 27, 2003.
41. Dennis Kozlowski, interview with the author, Marcy, New York, May 21, 2011.
42.
People v. Kozlowski I,
direct testimony of Barbara Jacques, transcript at 02256:5–9, October 27, 2003.
43. Dennis Kozlowski, interview with the author, Marcy, New York, October 16, 2011.
44. Ibid.
45. Ibid.
Chapter Nine: Extraordinary Times
1. 2001 Annual Report Tyco International Ltd.,”L. Dennis Kozlowski, Chairman of the Board of Directors and Chief Executive Officer, Letter to Shareholders,” December 3, 2001, 15; and Roy Harris, “After Math,”
CFO Magazine,
November 1, 2001.
2. Tyco International Ltd. Press Release, “Tyco Purchases the CIT Group, Inc.,” June 1, 2001.
3. Dennis Kozlowski, letter to the author, February 19, 2011; Dennis Kozlowski, “10 Commandments,” speech given at the Premier CEO Forum, September 17, 1999; and Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
4. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012; and Reuters, “Tyco in $1.4-Billion Deal for Kendall International,”
Los Angeles Times,
July 15, 1994.
5. Dennis Kozlowski, letter to the author, February 18, 2011.
6. Robin M. Grugal and Marilyn Alva, “Breaking News: Tyco Makes Big Move with CIT Acquisition,”
Investors’ Business Daily,
March 14, 2001.
7. National Commission on Terrorist Attacks Upon the United States, “The 9/11 Commission Report,” July 22, 2004.
8. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012; and Roy Harris, “After Math,”
CFO Magazine,
November 1, 2001.
