Nortel (NT) shuffled its board and said some execs would pay back controversial bonuses as the company seeks to turn the page on its bookkeeping troubles.

The Brampton, Ont., telecommunications-equipment giant made the statement early Tuesday as it finally filed its 2003 annual report. The move came after the company spent more than a year grappling with a series of financial restatements and briefly scared investors in a

brush with delisting. Its shares rose 5% early Tuesday.

Nortel stumbled into an accounting scandal last year as internal reviews showed that 2003 earnings were overstated by $300 million. A subsequent audit also uncovered $3.2 billion in bogus sales dating back to the Internet construction boom in 1999 and 2000.

The company says its board's audit committee plans to review the transactions that led to misbooked revenue, and hopes to identify the "underlying conduct" that led to recognition of bogus sales.

It was the would-be profits in 2003 that were central to a

round of executive bonuses. Ten former executives, including onetime CEO Frank Dunn, were fired for cause for their role in the bookkeeping blunder.

Nortel says 12 current executives have volunteered to pay back $8.6 million they were awarded as part of the return-to-profit bonuses in 2003. The executives, who Nortel says weren't directly linked to any accounting chicanery, have three years to return the money.

As

TheStreet.com

pointed out in May 2003, the company's surprise return to profit didn't seem to add up under review. The profits triggered around $50 million in

bonuses for executives. Critics at the time called the incentive a potentially corrupting influence.

Nortel never specified how much money was paid out overall in bonuses, and says it continues to seek to recover the bonuses paid to execs who were fired.

The company filed its 2003 financial statement, along with restated numbers for 2002 and 2001. In 2003, Nortel earned $434 million, or 10 cents a share, on sales of $10.1 billion. That compares with a restated 2002 net loss of $3 billion, or 78 cents a share, on $11 billion in revenue.

"With the completion of our restatements we have a solid foundation on which to move forward with our business," said CEO Bill Owens.

Nortel also hired Susan Shepard as its chief ethics and compliance officer. The company said Chairman L.R. Wilson and directors L. Yves Fortier, Sherwood Smith Jr., Guylaine Saucier and James Blanchard won't stand for re-election to the board.

"The regular rotation of directors provides an appropriate balance of renewal with continuity and orderly succession," Wilson said. "Given we were unable to hold a shareholders' meeting in 2004, the board felt it essential that the process be accelerated at the upcoming meeting. Accordingly, after discussions with the board, five directors, including myself, all initially elected to the board between 1991 and 1997, have decided not to stand for re-election."

Early Tuesday, Nortel rose 19 cents to $3.53.