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A Santa Clara jury slapped America Online with $5 million in damages, including $3.5 million in punitives Thursday, for defaming a former executive in connection with his termination.

Jurors found that America Online Inc. — now AOL Time Warner Inc. — maliciously defamed Ronald Arnold, a former vice president of its Netscape division, by accusing him of falsifying his administrative assistant’s time cards and eventually firing him for it. Jurors awarded $1.5 million in compensatory damages for lost wages and stock options Tuesday.

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