WASHINGTON (Dow Jones) -- Motorola Inc. has sued to block former Chief Financial Officer Mike Zafirovski from taking the top job at rival Nortel Networks Corp.
Motorola (MOT) alleges that Zafirovski breached his contract in accepting the position of chief executive of Nortel. The suit seeks to prevent Zafirovski from joining Nortel for two years.
Toronto-based Nortel (NT) said it is "reviewing the lawsuit and intends to pursue discussions with Motorola with a view to resolving the dispute over Zafirovski's appointment."
Motorola asserts that Zafirovski's hiring would result in the disclosure of trade secrets. The company also wants to block its former CFO from hiring Motorola employees.
On Monday, Nortel named Zafirovski its fourth CEO in four years, as the maker of phone-networking gear seeks to recover from an accounting scandal and engineer a turnaround.
Toronto-based Nortel has struggled to recover after the collapse of the Internet bubble in 2001, which sent its sales and stock price plunging. An accounting scandal in 2004 nearly ruined the company.
Shares of Nortel jumped as much as 7% on Monday as investors expressed optimism about the move. Bear Stearns analyst Wojtek Uzdelewicz told clients that "given his successes at Motorola, we see him as the right person to take over Nortel."
The 51-year-old Zafirovski is well regarded within the high-tech industry. He would succeed Bill Owens as president and chief executive on Nov. 15 if the suit with Motorola is resolved.
Zafirovski resigned as the chief operating officer of Motorola in early 2005, a year after being passed over for the top job, which went to former Sun MicroSystems executive Ed Zander.
Analysts credited Zafirovski with helping to return Motorola's struggling wireless-phone business to profitability and increasing market share. His decision to step down was seen as an indication that he would seek a top job elsewhere.
"I love to compete," Zafirovski said Monday at a press conference. "I love to win."
Zafirovski, a native of Macedonia, emigrated to the United States in 1969 at the age of 16. He rose through the ranks at General Electric to become a senior executive, moving to Motorola in 2000.
Zafirovski's challenge is to tap new markets, improve profit margins and boost revenue growth. The company's revenue has fallen from a peak of nearly $28 billion in fiscal 200 to under $10 billion last year.
"I am convinced Nortel will be a big winner again," Zafirovski said.
(END) Dow Jones Newswires "
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