Nortel, Moto Settle on Zafirovski
The news, issued late Monday, gave Nortel share price a slight lift, up 5 cents to $3.30, in pre-market trading this morning.
Motorola's main concern appears to have been the potential for Nortel to cherry pick some of its key personnel, something Wall Street analysts had highlighted when the rumpus between the two vendors first erupted following news of Zafirovski's new role. (See Nortel Discloses Lawsuit Against CEO and Nortel Names Zafirovski New CEO.)
In its settlement statement, Nortel says it has agreed not to hire Motorola staff "under certain circumstances" for a specific period, and notes that Zafirovski cannot reveal any Motorola trade secrets or confidential information.
Nortel has also agreed that Zafirovski will limit his communications with "specified companies," including some existing Nortel customers, until July 1, 2006.
There is also a financial element. Zafirovski is to repay $11.5 million of his near $17 million severance package to Motorola, but Nortel "has agreed to fully reimburse Zafirovski for this repayment."
The new CEO will take over from incumbent Bill Owens on November 15.
— Ray Le Maistre, International News Editor, Light Reading