If you've had a chance to take a look at Motorola's lawsuit, it leaves little doubt Mike Zafirovski was more than aware he had, among other things, a two-year non-compete clause. In fact, this was clearly spelled out last January when he entered into a separation agreement in which he received $16,839,290. So why did he apparently breach the agreement to accept the job with Nortel? There are a number of theories, which include:
1. Zafirovski really, really wanted the Nortel job to prove to the world - and Motorola, which lured Ed Zander from Sun Microsystems to become CEO - he could lead a Fortune 500 company. As a result, he was willing to pay the cost, which means forking over $11,000,000 of his $16,839,290 severance package back to Motorola.
2. Nortel really, really wanted Mike Z., which meant it was aware of the risk involved given his agreements with Motorola but figured it was the price to pay to get a world-class CEO to succeed Bill Owens, who had been losing the faith of the investment community.
3. Although Mike Z realized he had a two-year non-compete agreement, his departure from Motorola really started in early 2004 when Zander was hired as CEO. While Mike Z agreed to stay on for a year, you have to believe he started to disengage. It's like the rest of us giving our two-week notice and then going out for long lunches, shopping and talking with friends on the phone. If this was the case, Mike Z may have thought he hadn't really "worked" for Motorola for the past 22 months. As a result, maybe he believed Motorola wouldn't make too much of a fuss if he took another job.
4. Maybe Mike Z and Nortel don't believe he's breaching the non-compete clause because Nortel and Motorola don't really compete. I mean, Motorola makes wireless devices while Nortel sells telecom networking equipment, right?
In any event, this lawsuit looks more like a nasty legal battle than something Motorola's lawyers dreamt up to annoy Mike Z and Nortel. I suspect Mike Z will not only have to pay back the $11M but agreed to all kinds of restrictions if he wants the Nortel job. Nortel will likely make it worth his while financially given the last thing it wants or needs is another senior executive hiring disaster on its hand.