9. Suraj Srinivasan and Aledo Sesia, “The Crisis at Tyco—A Director’s Perspective,”
Harvard Business School,
Case No. 9-111-035, June 2, 2011, 3; Dennis Kozlowski, letter to the author, March 10, 2011; and “The Top 25 Managers of the Year”(Cover Story),
Businessweek,
January 13, 2002.
10. See for example, Len Costa, “The Rise of Compliance Man,”
Slate,
May 26, 2004. See also, Alton B. Harris and Andrea S. Kramer, “Corporate Governance: Pre-Enron, Post-Enron,” in
Corporate Aftershock: The Public Policy Lessons from the Collapse of Enron and Other Major Corporations,
ed. Christopher L. Culp and William A. Niskanen (Hoboken, NJ: John Wiley & Sons, 2003).
11. Dennis Kozlowski, letter to the author, March 10, 2011.
Chapter Ten: You Say You Want a Resolution
1. Tyco International Ltd., “Minutes of a Special Meeting of the Board of Directors,” Tuckers Town, Bermuda, May 12, 1999, 8.
2. Ibid. at 9. Note that the minutes include only male pronouns when referring to Directors. The Tyco Board of Directors in the late 1990s could be accurately described as an old boys’ club.
3. Ibid.
4. Ibid. at 9–10.
5. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012. See also
People v. Kozlowski II,
cross-examination of Stephen Foss, transcript at 05310:13–15, March 2, 2005.
6. Associated Press, “Apparent Conflicts of Interest with Tyco Board Raise Eyebrows,” July 7, 2002.
7. Rob Boostrom, “Tyco International—Leadership Crisis,” Daniels Fund Ethics Initiative, University of New Mexico, 2011, 3; and Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
8. Sarbanes-Oxley Act, Section 301, Public Law 107-204, July 30, 2002. (Emphasis added.)
9.
People v. Kozlowski II,
cross-examination of Stephen Foss, transcript at 05334:24–25 and 05335:1–3, March 3, 2005.
10. Ibid. at 05335:9–17.
11. Ibid. at 05335:25 and 05336:1–5. (Emphasis added.)
12. Werner Güth, Rolf Schmittberger, and Bernd Schwarze, “An Experimental Analysis of Ultimatum Bargaining,”
Journal of Economic Behavior and Organization,
Vol. 3, No. 4 (1984), 367. See also, Adam Grant,
Give and Take
(New York, NY: Viking, 2013). Professor Grant relied on research conducted by Princeton psychologist Daniel Kahneman. See, Daniel Kahneman, Jack L. Knetsch, and Richard H. Thaler, “Fairness and the Assumptions of Economics,”
Journal of Business,
(1986), 59.
13. Ibid. at 33.
Chapter Eleven: When the CIT Hit the Fan
1.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02399:3, 02401:25, and 02402:1, February 3, 2005.
2. Suraj Srinivasan and Aldo Sesia, “The Crisis at Tyco—A Director’s Perspective,”
Harvard Business School,
Case No. 9-111-035, June 2, 2011, 1.
3.
Tyco International Ltd. v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606 (S.D.N.Y 2010).
4. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012. See also, Suraj Srinivasan and Aldo Sesia, “The Crisis at Tyco—A Director’s Perspective,”
Harvard Business School,
Case No. 9-111-035, June 2, 2011.
5. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
6. Ibid.
7.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02519:23–25 and 02520:1–18, February 3, 2005.
8. Ibid. at 02519:2–10.
9. Ibid. at 02522:18–25, 02523:1–11, and 02524:1–21.
10.
People v. Kozlowski II,
direct examination of Dennis Kozlowski, transcript at 12175:20–25 and 12176:2–7, April 27, 2005.
11. Ibid. at 12176:16–25 and 12177:2.
12.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02528:14–25 and 02529:1–9, February 3, 2005.
13. Special Meeting of the Tyco International Ltd. Board of Directors, “Meeting Minutes,” Pembroke, Bermuda, March 12, 2001.
14.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02547:15–21, February 3, 2005.
15. See, U.S Securities and Exchange Commission, “Form S-4.”
16.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02543:9, 02546:21–15, 02547:1, 02549:10, and 02550:11–15, February 3, 2005.
17.
Tyco International Ltd. v.
Frank E. Walsh, Jr.
, 751 F. Supp.2d 606, 616 (S.D.N.Y 2010).
18. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
19.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02566:1–5, February 3, 2005.
20. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
21. Matt Brian, “Investment Banker Demands 1% of Apple’s $390m Anobit Acquisition in Finder’s Fee Lawsuit,”
TNW,
May 15, 2012. See also, “The Facts on Finder’s Fees,”
Businessweek,
September 25, 2005.
22. Frank Walsh Jr., Invoice to Tyco International Ltd., RE: The CIT Group Inc. Acquisition, July 18, 2001.
23. Frank E. Walsh, letter to Mark H. Swartz, Tyco International U.S.A., July 25, 2001.
24. Susan Soldivieri, Community Foundation of New Jersey, letter to Michael Robinson, Tyco International, July 31, 2001.
25.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02572:5–8, February 3, 2005; and
People v. Kozlowski II,
direct examination of Dennis Kozlowski, transcript at 12194:15–17, 12194:18–25, and 12195:2–11, April 27, 2005. (Emphasis added.)
26. Robert A. G. Monks, telephone interview with the author, May 7, 2013.
27.
People v. Kozlowski II,
direct examination of J. Bradford McGee, transcript at 10009:19–25, 10010:2–8, and 10010:9–24, April 7, 2005.
28.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02584:4–11, February 3, 2005.
29. Tyco International Ltd., Proxy Statement Fiscal Year End 2001, January 28, 2002, 19.
30.
People v. Kozlowski II,
direct examination of John Fort, transcript at 01857:8–17, January 31, 2005.
31. Ibid. at 01859:3–11 and 01860:24–25.
32. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
33. Srinivasan and Aldo Sesia, “The Crisis at Tyco—A Director’s Perspective,”
Harvard Business School,
Case No. 9-111-035 (June 2, 2011), 4.
34.
People v. Kozlowski II,
cross-examination of Stephen Foss, transcript at 05295:15–17, March 2, 2005. See also,
Tyco International Ltd.
v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606, fn 3 (S.D.N.Y 2010).
35.
People v. Kozlowski II,
direct examination of John Fort, transcript at 01852:18–25 and 01853:1–5, January 31, 2005.
36. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
37.
Tyco International Ltd. v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606, 619.
38. Suraj Srinivasan and Aldo Sesia, “The Crisis at TycoA Director’s Perspective,”
Harvard Business School,
Case No. 9-111-035 (June 2, 2011), 4. See also,
People v.
Kozlowski II,
cross-examination of Stephen Foss, transcript at 05330:9–11, March 2, 2005.
39. Suraj Srinivasan and Aldo Sesia, “The Crisis at Tyco—A Director’s Perspective,”
Harvard Business School,
Case No. 9-111-035 (June 2, 2011), 3.
40. TYC prices adjusted for splits and dividends
41.
People v. Kozlowski II,
direct examination of John Fort, transcript at 01850:24–25, 01851:1–2, 01855:8–9, 01852:18–25, and 01853:1–5. See also, People’s Exhibit 29-C, Tyco International Ltd. Bye-laws,
Sections 64(2) and 64(7), March 27, 2001.
42. Ibid. at Section 64(8).
43. Special Meeting of the Tyco International Ltd. Board of Directors, “Meeting Minutes,” Pembroke, Bermuda, March 12, 2001.
44. Ibid.
45. Dennis Kozlowski, interview with the author, Marcy, New York, May 21, 2011.
Chapter 12: “Oh God, what now?”
1. “Global Files for Bankruptcy,” CNNMoney, January 28, 2002.
2. Dennis Kozlowski, interview with the author, New York City, New York, June 23, 2012.
3.
People v. Kozlowski II,
cross-examination of J. Bradford McGee, transcript at 09717, 10059:14–24, 10060:18–25, 10061:2–3, 10061:5, and 10062:7–18, April 7, 2005.
4. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
5. J. Bradford McGee, telephone interview with the author, July 12, 2013.
6. Mark Maremont, “Tyco Reveals $8 Billion in Deals Made Recently, but Not Disclosed,”
Wall Street Journal,
February 4, 2002; Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012; and “Tyco Spent $8B in Deals,” CNNMoney, February 4, 2002.
7. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
8. Mark Maremont, “Tyco Reveals $8 Billion in Deals Made Recently, but Not Disclosed,”
Wall Street Journal,
February 4, 2002.
9. Mark H. Swartz and Michele E. Kearns, letter to the editor of
Wall Street Journal,
February 4, 2002.
10.
In Re Tyco International Ltd. Securities Litigation,
No. 02-1335-B (D.N.H. 2002).
11. Cal Fussman, “Matt Lauer: What I’ve Learned,”
Esquire,
October 2013.
12. “S&P Lowers Tyco Debt Rating,”
Businessweek,
February 3, 2002; and Andrew Ross Sorkin and Alex Berenson, “Doubts Voiced on How Much a Tyco Spinoff Might Raise,”
New York Times,
April 27, 2002.
13. Tyco International Ltd. Press Release, “Tyco is Ranked Number One Performing Company by BusinessWeek,” March 28, 2001.
14. Andrew Ross Sorkin and Alex Berenson, “Doubts Voiced on How Much a Tyco Spinoff Might Raise,”
New York Times,
April 27, 2002.
15.
People v. Kozlowski II,
direct examination of Frank Walsh, transcript at 02516:8–15, 02517:1–22, 02517:21–22, 02517:23–25 and 02518:1–7, February 3, 2005.
16.
People v. Kozlowski I,
cross-examination of Richard Bodman, transcript at 01284:25 and 012085:2, October 20, 2003.
17. Dennis Kozlowski, interview with the author, New York City, New York, June 22, 2012.
18. Dennis Kozlowski, interview with the author, June 22, 2012. Dennis Kozlowski remained CEO and Chairman for nearly five months after the Board refused to accept his resignation on January 16, 2002. See also
People v. Kozlowski I,
cross-examination of Richard Bodman, transcript at 01284:25 and 012085:2, October 20, 2003.
19.
Tyco International Ltd. v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606, 612 (S.D.N.Y 2010). See also, “Tyco Officer Tells of Board Reaction to Fee,”
New York Times,
February 18, 2004. During his testimony in the criminal trials, Mark Swartz explained to the jury that Kozlowski told Directors at the meeting on January 16, 2002 that he would resign if they thought he had done wrong regarding Mr. Walsh. Swartz said all of the Directors expressed support for Kozlowski. Ibid.
20. Peter Slusser, letter to Dennis Kozlowski, January 28, 2002.
21. Peter Slusser, letter to Dennis Kozlowski, February 6, 2002.
22. Peter Slusser, letter to Dennis Kozlowski and Mark Swartz, February 19, 2002.
23. Special Meeting of the Board of Directors Tyco International Ltd.,
“
Meeting Minutes,” Pembroke, Bermuda, February 20–21, 2002.
24. Ibid.
25. Peter Slusser, letter to Dennis Kozlowski, May 8, 2002.
26.
People v. Kozlowski I,
cross-examination of Richard Bodman, transcript at 01284:24–25, 012085:1–25, and 01286:1–2, October 20, 2003.
27.
Tyco International Ltd. v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606 (S.D.N.Y 2010).
28.
People v. Kozlowski I,
cross-examination of Richard Bodman, transcript at 01287:7–9, 01291:13–18, 01292:14–25, and 01293:1–3, October 20, 2003.
29. Ibid.
30. Retention Agreement between Tyco International Ltd. and L. Dennis Kozlowski, January 21, 2001, Sections 1(a) and 5(3).
31.
People v. Kozlowski I,
cross-examination of Richard Bodman, transcript at 01293:4–14, October 20, 2003.
32. U.S. Securities and Exchange Commission Press Release 2002-177, “SEC Sues Former Tyco Director and Chairman of Compensation Committee Frank E. Walsh Jr. for Hiding $20 Million Payment from Shareholders,” December 17, 2002.
33.
Tyco International Ltd. v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606, 616 (S.D.N.Y 2010).
34. Andrew Ross Sorkin, “Tyco Figure Pays $22.5 Million in Guilty Plea,”
New York Times,
December 18, 2002.
35. Ibid.
36.
Tyco International Ltd. v. Frank E. Walsh, Jr.
, 751 F.Supp.2d 606 (S.D.N.Y 2010).
37. Ibid. at 612.
