Lucent (LU) said it is handing out the stock portion of its $517 million shareholder lawsuit settlement Friday.

The telecom gearmaker will distribute 200 million warrants to about 200,000 shareholders. The warrants allow shareholders to purchase Lucent stock at a strike price of $2.75. With the shares trading at $3.82, that represents about $220 million in net proceeds if the shares are sold at the current price.

One year ago, Lucent deposited $100 million into a settlement fund, and it says it will now pay the remaining $215 million in cash or stock to the fund as required. Investors who owned the stock between Oct. 26, 1999, and Dec. 20, 2000, will be eligible for a portion of the settlement.

This brings the company "one step closer to the final resolution of a major issue from Lucent's past," Lucent said in a press release.

This summer, Lucent settled a

Securities and Exchange Commission

investigation into the deliberate use of excessive credits, discounts and fictitious sales -- known as channel stuffing -- which amounted to $679 million worth of improperly booked sales in 2000. Lucent was forced to pay a $25 million penalty in connection with the SEC case for its failure to cooperate with the investigation.

In a so-called shelf filing last week, Lucent said it would issue warrants for the 200 million shares to be distributed as part of the shareholder settlement.

Lucent shares were down 2 cents to $3.82 in early trading Friday.