The proposed settlement calls for Nortel to pay shareholders $575 million in cash and issue 628.7 million shares of its stock worth nearly $1.9 billion, based on Nortel's closing price Monday of $3.02 on the New York Stock Exchange.
Shareholders--who filed suit against the company following Nortel's revised guidance in 2001, revised financial results in 2003 and restatements for other prior periods--must accept the terms of the settlement before it takes effect.
Nortel has been trying to regain its footing since anforced the company to restate several quarters of financial results. The company is still under in the United States and Canada.
In April 2004, Nortel, including former Chief Executive Frank Dunn, over the scandal.
The Brampton, Ontario, telecommunications equipment maker is now pushing to get back on track. After recentlyas its new president and CEO, the company is looking to put all the litigation behind it.
"Resolving these important issues will enhance the company's ability to focus on our transformation and renewal priorities, and (on) our customers," Zafirovski said in a statement.
Nortel said it expects to record a charge of $2.47 billion, or 57 cents a share, against its 2005 earnings if the settlement is accepted by shareholders.