Through independent outside counsel, the Company has been conducting its own internal investigation of the actions of its former management and in September of this year filed a report with the United States Securities and Exchange Commission disclosing the findings of the initial phase of that investigation. In addition, the Company has initiated legal actions against its former Chief Executive Officer, Chief Financial Officer, General Counsel and a former Board member.
Under the terms of the agreement with the New Hampshire Bureau of Securities Regulation, Tyco will pay a $5 million administrative settlement to the State. These funds will be used to support a statewide investor education program and establish a corporate governance program within the University System of New Hampshire. Tyco also agreed to pay $100,000 to cover the costs of the Bureau's investigation, and to submit to the Bureau a report regarding practices and procedures that the Company is instituting to comply with all federal and state securities laws and to initiate and maintain high standards of corporate governance. This requirement incorporates management's goal of adhering to the highest standards of corporate governance by establishing processes and practices that promote and ensure integrity.
Tyco and the Bureau also stated that this settlement shall have no evidentiary effect in any other lawsuit, proceeding or action not described in the agreement.
The facts cited in the agreement were uncovered by Tyco during the internal investigation undertaken by the Board of Directors and Tyco's outside independent counsel. The Company outlined those facts in a Form 8-K filed with the Securities and Exchange Commission on September 17, 2002.
"We believe this consent agreement is in the best interests of our shareholders and employees and reflects the Company's commitment to a continued presence in New Hampshire," said Edward Breen, who was appointed Tyco's Chairman and Chief Executive Officer in July of this year. "This agreement resolves and puts behind us the issues raised by New Hampshire's Board of Securities Regulation. The terms of the agreement, which provides funding for investor-education and corporate-governance programs in New Hampshire, also underscore the absolute commitment of Tyco's new management to establishing and enforcing the highest standards of corporate behavior."