Thursday, March 6, 2003

Tyco shareholders to vote on changes

By Mike Recht
The Associated Press

CONCORD, N.H. - Tyco International Ltd. wants shareholders to sign off on a new board of directors and consider measures to tighten governance of the scandal-hit company. Some shareholders want the headquarters moved back stateside.

A proposal to move Tyco's registered offices from Bermuda to Delaware is among resolutions up for voting at today's annual shareholder meeting, which is in Bermuda.

Foreign incorporation "makes it more difficult for shareholders to hold companies, their officers and directors legally accountable in the event of wrongdoing," according to the proposal by American Federation of State, County and Municipal Employees.

Labor unions are pushing a record number of shareholder resolutions at corporate annual meetings this year. Without management support, they rarely succeed. The early date of Tyco's meeting makes it a first big test of the campaign, which began partly in response to scandals last year at Tyco, Enron and WorldCom.

"With Tyco basically leading the list in corporate malpractice, we see this as an opening salvo," the federation's president, Gerald McEntee, said this week. The union has 424,505 Tyco shares, or less than a tenth of 1 percent of the total.

Management opposes the resolution, saying reincorporation to the United States needs more study by Tyco's new board. All 10 board members were replaced as questions about oversight arose after the federal indictments of former chief executive Dennis Kozlowski and former chief financial officer Mark Swartz.

Kozlowski and Swartz are accused of stealing $170 million from Tyco and obtaining another $430 million through fraud. Both have pleaded innocent.

In December, a former outside director, Frank Walsh, pleaded guilty to felony charges over an undisclosed $20 million payment from Tyco.

Tyco's new chief, Ed Breen, has pledged to make the company a leader in corporate governance since arriving last summer.

Other shareholder resolutions include one by Amalgamated Bank, an investment fund with about 662,000 shares, to select an independent board chairman rather than having that post held by the chief executive.

Mistakes on books a drag on Provident
Cars of tomorrow twinkle alongside cars of yesterday
Buyers hibernated, Fed says
Bill would stretch gift certificates
Dems claim federal stockpiling raised oil prices
Camera phones offer surprising pictures
U.S. currency gets a new signature: John W. Snow
Tyco shareholders to vote on changes
Tristate summary
Business digest
Morning memo
What's the Buzz?