ADT 2002 Annual Report Download - page 106

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
17. Related Party Transactions (continued)
During fiscal 2002, Robert P. Mead, the President of Tyco Engineered Products and Services, had
an outstanding loan under the Key Employee Loan Program. The rate of interest charged on such loan
was 2.03%. The maximum amount outstanding under this loan during fiscal 2002 was $0.9 million and
such loan was repaid in full prior to September 30, 2002.
During fiscal 2002, Richard J. Meelia, the President of Tyco Healthcare and Specialty Products,
had an outstanding loan under the Key Employee Loan Program. The rate of interest charged on such
loan was 2.06%. The maximum amount outstanding under this loan during fiscal 2002 was $1.7 million
and the amount outstanding at September 30, 2002 was $18.2 thousand.
During fiscal 2002, Jerry R. Boggess, the former President of Tyco Fire and Security Services, had
an outstanding loan under the Key Employee Loan Program. The rate of interest charged on such loan
was 2.03%. The maximum amount outstanding under this loan during fiscal 2002 was $0.4 million and
such loan was repaid in full prior to September 30, 2002.
During the fourth quarter of fiscal 2002, the Board of Directors and new senior management
adopted a policy under which no new loans are allowed to be granted to any officers of the Company
and existing loans are not allowed to be extended or modified.
Certain former Tyco directors and executive officers owned TyCom Ltd. shares or options, which
were converted to Tyco shares and Tyco options upon the amalgamation of a subsidiary of Tyco with
TyCom Ltd. on December 18, 2001 at the exchange ratio applicable to all holders of TyCom Ltd. shares
and options.
Stephen W. Foss was a director of Tyco until March 6, 2003. Mr. Foss is the owner of a corporate
aircraft which we leased from him starting in May 2001 after seeking competitive bids of which
Mr. Foss’s bid was considered the most competitive given anticipated usage. Tyco paid Mr. Foss, and a
company of which he is president, an aggregate of $587,000 in lease payments for our use of the
aircraft and its pilots in fiscal 2002. These leasing arrangements were terminated as of September 30,
2002.
Joshua M. Berman was a director of Tyco until December 5, 2002. From March 1, 2000 through
July 31, 2002, we also engaged Mr. Berman to render legal and other services. During this period, we
compensated Mr. Berman at an annual rate of $360,000 and provided Mr. Berman with health benefits,
secretarial assistance, a cell phone and electronic security services for his homes. We also reimbursed
Mr. Berman for legal fees and expenses incurred by him in connection with matters relating to Tyco
pursuant to indemnification provisions applicable to all directors of Tyco. Mr. Berman is a retired
counsel to the law firm Kramer Levin Naftalis & Frankel LLP, which provided legal services to us in
fiscal 2002.
As previously reported in our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2002, Tyco and certain of our former directors are defendants in five pending actions
purporting to bring suit derivatively on behalf of Tyco against certain former officers and certain former
directors of Tyco and against Tyco as a nominal defendant in connection with alleged improper conduct
of former officers of Tyco relating to the use of our funds, our Key Employee Loan Program and
assets. The ultimate resolution of these actions is not yet determinable.
As previously reported in our Current Reports on Form 8-K filed on September 17, 2002 and
October 8, 2002, we have filed civil complaints against L. Dennis Kozlowski, our former Chairman and
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