(Bloomberg) ? Mark Belnick, Tyco International Ltd.'s former general counsel, was acquitted after an 11-week trial in which prosecutors alleged he stole from the company by taking a $17 million bonus without board authorisation.

Belnick, a New York lawyer who advised the US Senate Iran- Contra committee in 1987, was found not guilty of grand larceny, defrauding Tyco investors and falsifying business records, after five days of jury deliberations.

"We live in crazy times, so we were obviously concerned," lead defence lawyer Reid Weingarten said outside the courthouse in lower Manhattan.

"We're relieved but not shocked. He's a very fine man and a great lawyer who has an opportunity to get his life back."

New York prosecutors have failed to win convictions in two trials this year involving former top executives at Bermuda-based Tyco.

In April, the fraud case against former chief executive L. Dennis Kozlowski and ex-finance chief Mark Swartz ended in a mistrial after six months. Their retrial is scheduled for January.

Belnick's acquittal and the April mistrial share "a common theme of the prosecution's inability to persuade jurors a crime was committed," said Robert Mintz, a former federal prosecutor. "That does not allow them to carry any momentum into a new trial for Kozlowski and Swartz."

Prosecutors contended that Belnick was paid the $17 million bonus by Kozlowski to cover up frauds at Tyco. Kozlowski and Swartz were accused of looting the company of $600 million through unauthorised compensation and stock fraud. Belnick said he earned the bonus for leading Tyco through an accounting investigation by the US Securities and Exchange Commission.

Belnick was also acquitted of charges he committed stock fraud and falsified business records by failing to report almost $15 million in loans from the company. He used $10 million of the loan money to buy a house in Utah, where Tyco had no corporate offices.

Belnick, who testified in his own defence, cried when the verdict was announced.

He pumped his fists and said, "Yeah," then embraced his wife and daughter and hugged one of his attorneys.

When he thanked the jurors as they walked out of the courtroom, Weingarten hushed him.

Had he been convicted, Belnick faced up to 25 years in prison.

Outside, Belnick told reporters, "I feel terrific.

"Right now I just want to take a deep breath, go home and be with my wife and family."

Jurors approached as they left the courthouse on Centre Street in Manhattan declined to comment on the case.

Jury foreman Todd Echelman, reached by telephone at home, said, "We made a decision because the evidence and the law led us there."

Echelman, a scientist who works on the New York City water system, added, "It was a happy day for all of us today."

Sherry Hunter, a spokeswoman for Manhattan District Attorney Robert Morgenthau, said, "The jury has made its decision and of course we accept it."

"Mr. Belnick's entire way of life was on the line. He had no choice but to go to trial," said Thomas J. Curran, a former Manhattan prosecutor, currently a litigator at Edwards & Angell in New York.

"The lesson to any prosecutor, state or federal, is consider who your charging, because they may go to trial," he said. "I don't think the DA's office anticipated this level of resistance to the charge."

Weingarten declined to say whether Belnick had agreed to a plea deal before the jury delivered its verdict. Lawyers for both sides conferred before the lunch break.

"We talked about options," Weingarten said. "Our primary concern was a mistrial.

Belnick was a partner at Paul, Weiss, Rifkind, Wharton & Garrison, a New York-based law firm.

He served as deputy chief counsel for the Senate Iran-Contra committee in 1987, during the Reagan administration.

The panel investigated the US sale of weapons to Iran and diversion of the proceeds to fund anti- Communist guerrillas in Nicaragua.

Yesterday morning, Manhattan state Supreme Court Justice Michael Obus dismissed the remaining two alternate jurors. Obus excused the two men after Belnick's lawyers said they wouldn't allow them to replace two jurors who had indicated they might not have been able to stay on the case if deliberations extended beyond tomorrow.

On Wednesday, the jury of eight men and four women told the judge they were "making progress," and said they didn't expect to reach a verdict before next week.

Tyco, the world's biggest maker of security systems, is based in Bermuda and run from offices in West Windsor, New Jersey.