Nortel Networks 8-K 2010
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 12, 2010
NORTEL NETWORKS CORPORATION
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code 905-863-7000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Item 5.02(e) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The Boards of Directors of the registrant and its principal operating subsidiary, Nortel Networks Limited (NNL) approved the appointment of George Riedel as Chief Strategy Officer and PresidentBusiness Units effective April 12, 2010. Mr. Riedel will remain an employee of Nortel Networks Inc. (NNI, and together with the registrant and NNL, Nortel)) and NNI will enter into an employment agreement (the Agreement) with Mr. Riedel with certain elements subject to approval by the U.S. Bankruptcy Court for the District of Delaware (the Bankruptcy Court).
Pursuant to the Agreement, effective April 12, 2010, Mr. Riedels annual base salary will be $600,000 (all dollar amounts described herein in U.S. dollars). Additionally, Mr. Riedel will be a participant in the Nortel Networks Limited Annual Incentive Plan (the AIP) and will continue to have an annual target award under the AIP of 100% of his salary. The Agreement also provides for the immediate vesting and payment of Mr. Riedels Third Bonus Award under the Nortel Networks Corporation Key Executive Incentive Plan. This vesting and payment is subject to Bankruptcy Court approval; a similar payment was previously approved by the Bankruptcy Court for other Nortel executives. Finally, Mr. Riedels Agreement provides for a Special Incentive Bonus of up to $3.47 million, subject to Mr. Riedels continued employment with NNI until January 1, 2011 (or such later date as described below) and the achievement of certain performance goals by no later than March 15, 2012. $600,000 of the Special Incentive Bonus will be earned upon the occurrence of either (i) the closing of a sale of all or substantially all of Nortels IP assets or (ii) the substantial implementation of an alternative business strategy for monetizing Nortels IP assets. $2.87 million of the Special Incentive Bonus will be earned to the extent Nortel realizes certain dollar amounts in regard of Nortels IP assets through the sale and/or monetization process described above with the bonus amount being directly proportionate to the dollar amount realized by Nortel. Payment of any portion of the Special Incentive Bonus will be made on or after January 1, 2011, but no later than March 15, 2012. Implementation of the Special Incentive Bonus is subject to Bankruptcy Court approval.
The Agreement provides that Mr. Riedels employment with NNI will be terminated by NNI on, but not prior to, January 1, 2011, unless NNIs Principal Officer, together with Ernst & Young Inc. as the Monitor appointed under the Companies Creditors Arrangement Act, in consultation with the Unsecured Creditors Committee and the Ad Hoc Bondholder group, elects to continue Mr. Riedels employment beyond January 1, 2011, in which case Mr. Riedel will be entitled to continue to receive the same base salary and AIP arrangement described above. NNIs termination of Mr. Riedels employment on or after January 1, 2011 other than for Cause (as defined in the Agreement) will not affect his eligibility to receive the Special Incentive Bonus on the terms described above.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 16, 2010