Mike Zafirovski will be allowed to take the helm at Nortel later this month after reaching a settlement with former employer Motorola.
In October, Nortel announced Zafirovski would take up the post of president and CEO on Nov. 15. Motorola promptly followed the appointment announcement with a lawsuit. The suit, filed in the Circuit Court of Cook County, Ill., claimed "Zafirovski's move to Nortel threatened an unlawful misappropriate of Motorola trade secrets and a breach of multiple non-compete, confidentiality and no solicitation agreements Zafirovski signed with Motorola," Motorola said. Zafirovski served as Motorola's president and COO until January, when he resigned his post.
Motorola, Nortel and Zafirovski have reached settlement terms that will get the lawsuit dismissed. As part of the agreement, Zafirovski has agreed to pay Motorola $11.5 million, for which Nortel plans to reimburse Zafirovski, as part of a separation agreement. The settlement also ensures Zafirovski will regularly certify compliance to both Motorola and Nortel's board of directors.
As part of the agreement, Nortel and Zafirovski will be limited in their ability to recruit Motorola employees. Zafirovski's communications with certain specified companies will be limited until July 1, 2006. He also will have limited ability to advise Nortel on competitive strategy, according to the settlement.
"We worked in good faith to resolve this issue with Motorola and we are very pleased with the successful outcome," said Nortel Chairman Harry Pearce in a prepared statement.
Zafirovski, Nortel and Motorola did not admit any violations of law, breaches of any agreements, or any other improper conduct as part of the settlement.