NEW YORK (Bloomberg) ? Mark Swartz, Tyco International Ltd.?s former chief financial officer, testified that the company?s board knew about millions in bonuses that he and ex-Chief Executive L. Dennis Kozlowski are accused of stealing.

Swartz and Kozlowski are on trial for fraud and larceny in a New York state court. Swartz told jurors yesterday he had calculated one disputed bonus based on the gain from the 2000 offering of shares in Tyco subsidiary TyCom Ltd., which deals in undersea fibre optics. Swartz later told the board?s compensation committee he had deducted the gain from the year-end earnings figures used to calculate his and Kozlowski?s remaining bonus, he said.

?I did tell the compensation committee members that TyCom gain numbers were not included in the year-end certification because we had already received that bonus,? he said. Swartz got a TyCom bonus worth $16 million in the form of company loan forgiveness and tax payments. Kozlowski got $32 million.

Kozlowski, 58, and Swartz, 44, are charged with looting Tyco of $150 million and defrauding its shareholders by selling $575 million of Tyco stock at inflated prices.

Ordinarily, bonuses for the two men were calculated after the end of each fiscal year, board members have testified. Goals were set at the beginning of each year, and rewards were calculated on how much the company?s annual earnings exceeded them. Swartz testified that after Tyco?s 1997 acquisition of ADT Ltd., a security company, the compensation committee could authorise interim payments, such as the TyCom bonus.

The prosecution says Swartz and Kozlowski never told the board or shareholders about the bonuses and other allegedly unauthorised payments. Swartz testified that he made no effort to hide the transactions from anyone, including Tyco?s directors and auditors.

?There was nothing to hide,? Swartz said in his third day of testimony. Among those he told were members of the board?s audit committee and Tyco?s outside auditors from PricewaterhouseCoopers LLP, he said. Audit committee member and Kozlowski?s predecessor as CEO testified earlier in the trial that a PricewaterhouseCoopers auditor had alluded to the tax treatment of certain bonuses.

Swartz showed the jury parts of Tyco?s statements to shareholders that said executive compensation was ?directly tied to? transactions including the TyCom offering. The text of those statements does not specify how much compensation is attributable to any single transaction.

Swartz said Kozlowski told him that director Philip M. Hampton knew about disputed payments they received in 1999 and 2000, including the TyCom payment.

?He mentioned that he had talked about it with Phil Hampton,? Swartz testified. He said he stood outside Kozlowski?s office while the CEO discussed another bonus with Hampton later that year. Hampton died in 2001.

Swartz and Kozlowski face 31 charges of stock fraud, falsifying business records, grand larceny and conspiracy. The most serious charge carries a 25-year jail term. Both men are free on bond. They are being tried for the second time after a mistrial in April 2004. Swartz also testified in the previous trial.

Bermuda-based Tyco, which operates out of West Windsor, New Jersey, is the world?s biggest maker of electronic connectors, industrial valves and security systems.