Abuse of New York Relocation Program – In 1995, after he decided to relocate to New York City, Kozlowski transformed a Compensation Committee-approved relocation program intended for all employees into a special program for a few senior executives that was never sanctioned by the Board. Kozlowski obtained these substantial benefits under the unapproved, transformed plan:

Kozlowski knew that the benefits to him and other key executives under such a program required Compensation Committee approval and never sought such approval from the Board.

Abuse of Key Employee Loan Program – The long-standing Key Employee Loan Program (KEL) was designed to encourage stock ownership by executives by obviating their need to liquidate shares to meet tax liabilities. However, Kozlowski systematically abused this program, turning it into a personal line of credit. From 1997 to 2002, he took more than 200 loans from the program, borrowing more than $274 million, of which more than $245 million was not used in accordance with the purpose of the program. Instead, he used these funds for a wide variety of personal needs, including purchases of everything from homes, yachts, antiques and furniture to payments to his domestic help.

Unauthorized Credits to KEL Program – To offset his indebtedness to Tyco, without the knowledge or approval of the Board, Kozlowski directed Chief Financial Officer Mark Swartz to effect credits of $25 million to Kozlowski’s KEL account and $12.5 million to Swartz’s account. (When the Board learned of these unauthorized journal entries during the course of the investigation, it directed that they be reversed.) Kozlowski continued to abuse the KEL program, and when he left the Company on June 3, 2002, he owed this program $43,840,461, plus interest, all of which is due.

Unauthorized Florida Relocation Program – After the 1997 reverse merger with ADT, Kozlowski decided to relocate more than 40 corporate employees to ADT’s U.S. headquarters in Boca Raton, Florida and created a new relocation program by appropriating the terms of the earlier New York program. He circumvented the need for Compensation Committee approval of this program by creating a program somewhat similar to the New York program. As in New York, he created two versions of the program, one for general use that met the IRS standards and a second for the use of a few executives. Without changing his primary residence, Kozlowski used this program to obtain $29,756,110 in interest-free loans to assemble five lots into a compound and build an estate in an exclusive Boca enclave called “The Sanctuary.” Kozlowski did not obtain Compensation Committee approval of this program and concealed these benefits from the Board.

“TyCom Bonus” – Unauthorized Forgiveness of Relocation Loans – In September 2000, Kozlowski still owed Tyco more than $37 million, so he “contrived, promoted and fraudulently executed” a plan to obtain relief. He falsely informed the Senior VP of Human Resources that the Board had decided to forgive all of the Florida relocation loans to the more than 40 employees – and to “gross up” this benefit by making each employee whole on an after-tax basis for the forgiveness – as a reward for completion of the TyCom IPO. The unauthorized loan and gross-up program was in addition to a more limited program of cash bonuses and restricted stock awards that the Compensation Committee – unaware of the Kozlowski program – approved the next month. Kozlowski’s unauthorized program cost Tyco close to $100 million, including Kozlowski's share of $32,644,338.

Unauthorized “ADT Automotive Bonus” – In November 2000, still pressed by his indebtedness to Tyco, Kozlowski contrived another special bonus program. This bonus was supposed to recognize executives for contributions to the divestiture of Tyco’s ADT Automotive business via cash and “relocation” benefits, even though the beneficiaries had already recovered the grossed-up cost of their “relocations” under the TyCom forgiveness bonus. This “bonus” cost Tyco nearly $56 million, of which $25.6 million benefited Kozlowski. As with the “TyCom Bonus,” Kozlowski led other executives to believe the program was Board approved, which it was not. Adding everything up, including his authorized compensation and the money misappropriated as purported compensation, Kozlowski’s income from Tyco in 2000, as reported to the IRS, was an incredible $137,491,353.39.

Fraudulently Procured Retention Agreement –In 2001, Kozlowski pressed the Company to sign a retention agreement, which among other things, provided for ongoing compensation and benefits for three years following age 62. The monetary value of this provision, as approved by the Compensation Committee, would have been approximately $20 million. However, he fraudulently deceived the Committee into amending the compensation formula that, unbeknownst to the Committee, would have resulted in a ten-fold increase in the compensation that would be due to him.

Unauthorized Payment to Walsh – In early 2001, Kozlowski approved the payment of a $20-million finder’s fee to then-director Frank Walsh in connection with the acquisition of The CIT Group. Kozlowski and Walsh concealed this payment from the Board, which did not become aware of it until reading a draft proxy in January 2002 and demanded immediate repayment. The Board was galvanized into action by this payment and, in February 2002, undertook a review of all transactions involving senior management. Also, in early May 2002, the Board hired independent counsel, Boies Schiller & Flexner, to represent the Company with regard to the Walsh matter.

Frustration of Board’s Investigation – As a result of the Walsh payment, the Board began a wide-ranging investigation into the activities of Kozlowski and other senior managers. Throughout early 2002, while paying lip service to the heightened Board oversight, at no time did Kozlowski disclose the enormous compensation he had taken for himself and others over the past several years. From February through May 2002, Kozlowski continued to conceal the facts from the Board and attempted to delay and frustrate the investigation.

Failure to Report Subpoena to Board – On May 3, 2002, in the course of investigating Kozlowski’s failure to pay state sales taxes, the Manhattan District Attorney served Kozlowski with a subpoena for records relating to his compensation and his recent purchases. Kozlowlski had an affirmative duty to inform the Board of this, but failed to do so. In fact, he did not inform the Board until May 31, the day he learned he was to be indicted.

Charitable Contributions – From 1997 to 2002, Kozlowski committed donations and pledges to charitable organizations with Company money amounting to more than $106 million. At least $43 million of these donations were made for his personal benefit or were represented as his personal donations. For example, in 2001, Kozlowski donated $1.3 million of Company money to the Nantucket Conservation Foundation, Inc., which in turn purchased property adjacent to Kozlowski’s own Nantucket estate to prevent future development of the land. He also pledged $10 million to the California International Sailing Association in his name. Other Tyco contributions were made in his name to schools, colleges, hospitals, and Nantucket institutions with which he had a personal connection.

Other Elements of Kozlowski’s Fraud and Self-Dealing – Other actions by Kozlowski that formed a pattern of fraud and self-dealing included expensing to the Company the following items, among others:

Tyco International Ltd.