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NORTEL NETWORKS CORPORATION
CHANGE IN CONTROL PLAN
 January 18, 2008




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NORTEL NETWORKS CORPORATION
 CHANGE IN CONTROL PLAN
 1. PURPOSE OF THE PLAN
    2. DEFINITIONS
  affiliated companies Canada Business Corporations Act
 affiliated entities
 Awards
 Annual Salary




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-2- Auditor
 Canadian Executive Income Tax Act
 Canadian Trust
 Canadian Trust Agreement
 Canadian Trustee
 Cause
 (i)
    
    conviction (including any pleas of guilty or nolo contendere) of a criminal
offence or felony that involves fraud in connection with the performance by the
Specified Executive of the duties of the Specified Executives employment with Nortel
or moral turpitude;(ii)
    
    the willful and continual failure of the Specified Executive substantially to
perform the duties of the Specified Executives employment with Nortel (other than any
such failure due to the Specified Executives physical or mental illness), after a
written demand for substantial performance has been delivered to the Specified
Executive by the Nortel Board, and a reasonable opportunity to cure has been given to
the Specified Executive by the Nortel Board;(iii)
    
    material violation of any written agreement between the Specified Executive
and Nortel not to disclose any confidential or proprietary information of Nortel or
confidential or proprietary information of a third person in respect of which Nortel is
under a written confidentiality obligation to such third party of which the Specified
Executive has received prior written notice;(iv)
    
    fraud or willful and serious misconduct in connection with the performance of
the Specified Executives duties for Nortel, which, in the case of any such misconduct,
has caused direct material injury to Nortel; or(v)
    
    dismissal for just cause (including but not limited to a dismissal for
performance related reasons or for misconduct) in accordance with applicable law.
 CEO
 Change in Control CIC
 CIC Date




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-3- Code
 Committee
 Corporation
 Designated Beneficiary Designated Beneficiary estate
 Entitlements
 Excluded Replacement Options
 EVP Corporate Operations
 Good Reason




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-4- (i)
    
    the requirement that the Specified Executive relocate his or her office or home
base to a location that is outside a 100 kilometre radius of his or her office or home
base immediately prior to the CIC Date; or(ii)
    
    the assignment to the Specified Executive of a set of responsibilities and/or
the employment or continued employment of the Specified Executive on terms and
conditions that are not the Substantial Equivalent of such Specified Executives set of
responsibilities and/or the terms and conditions of employment in effect immediately
prior to the CIC Date;
  International Executives
 Key Employee
 NNL
 Nortel Board
 Nortel
 Option
 Payment Date
 Person
 Plan hereto herein hereof herewith
 Pro Rata Basis




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-5-  Separation From Service
 Specified Executive
 Stock Incentive Plan
 Substantial Equivalent
 (i)
    
    a set of responsibilities that are (x) commensurate with such Specified
Executives professional training and experience and (y) in all material respects,
equivalent to or better than the set of responsibilities of such Specified Executive
immediately prior to the CIC Date; and(ii)
    
    terms and conditions of employment that (x) include an annual base salary rate
and annual cash incentive compensation opportunity that are each equal to or greater
than such Specified Executives annual base salary rate and annual cash incentive
compensation opportunity in effect immediately prior to the CIC Date, (y) include
overall additional compensation and benefits that are substantially equivalent to or
better than the additional compensation and benefits of the Specified Executive
immediately prior to the CIC Date, and (z) are otherwise substantially equivalent to or
better than the terms and conditions of such Specified Executive in effect immediately
prior to the CIC Date.
 Supplementary Executive Retirement Plan
 Termination Date




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-6- Termination Due to Change in Control
 (i)
    
    any termination of the employment of the Specified Executive by Nortel during
the period commencing thirty (30) days prior to the CIC Date and ending on the date
which is twenty-four (24) months after the CIC Date, provided however that a
termination of the employment of a Specified Executive by Nortel prior to such 30 day
period at the direction of the Person who acquires control of the Corporation in the
Change in Control, shall be deemed to be a Termination Due to Change in Control; or(ii)
    
    any resignation for Good Reason within twenty-four (24) months after the CIC
Date by a Specified Executive provided that such Specified Executive resigns no later
than thirty (30) days after a Good Reason has occurred with respect to such Specified
Executive.
  Tier I Executives
 Tier II Executives
 U.S. Trust
 U.S. Trust Agreement
 U.S. Trustee
 Voting Shares
 3. ESTABLISHMENT OF TRUST
 Source of Payments to Canadian Executives




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-7-  Source of Payments to International Executives




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-8-    Alternative Source of Payments




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-9- 4. OBLIGATIONS OF THE CORPORATION TO SPECIFIED EXECUTIVES
 Entitlements




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-10-




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-11-   (i)
    
    if the Specified Executive is eligible to
participate in the Supplementary Executive Retirement Plan (the SERP)
prior to the Termination Date, then the Specified Executive will be
eligible for SERP , in accordance with the terms of the SERP, and(ii)
    
    commencing on the latest of (x) such time as
the health, medical and dental benefits available to a Specified
Executive pursuant to Subsection 4.1(g) hereof expire, (y) the
beginning of the calendar year during which the Specified Executive
will attain age 55 and (z)




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-12- the expiration of any coverage of the
Specified Executive by such Specified Executives new employer as
contemplated by Paragraph 4.1(g)(ii) hereof, the Specified Executive
shall be eligible for coverage under the health, dental and medical
benefits available to retired executives of Nortel immediately prior to
the earlier of the Termination Date or the CIC Date; provided, however,
if the continued coverage of a Specified Executive under any such plan
or arrangement is not permitted under the terms thereof or under
applicable law, but the Specific Executive was a member of the
Traditional option under the Capital Accumulation and Retirement
Program and reached age 50 and completed 5 years of service before July
1, 2006, the Corporation shall arrange to provide the Specified
Executive benefits that are substantially equivalent to those which
retired executives of Nortel were entitled to receive under such plan
or arrangement immediately prior to the earlier of the Termination Date
or the CIC Date or pay an amount to the Specified Executive in cash or
by certified cheque sufficient to enable the Specified Executive to
purchase substantially equivalent coverage for the applicable period on
an individual basis in any event at a cost no greater than the
Specified Executive paid or would have paid for such coverage
immediately prior to the earlier of the Termination Date or the CIC
Date, determined on an after-tax basis to the Specified Executive; and
   Stock Incentive Plan Awards
 Acceleration of Options




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-13-  Acceleration of Awards.
 Waiver of Certain Provisions
 Period for Exercise
 Other Deferred Compensation and Pension Arrangements




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-14-  Mechanism for Providing Entitlements to a Specified Executive
 Obligation of the Corporation
 Where No Time Specified
 Reasonable Efforts
 No Mitigation Required
 Tax Withholding
 Requirements for U.S. Citizens and all other employees not exempt from Section 409A
of the Code




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-15-   Modified Cap
 5. OBLIGATIONS OF SPECIFIED EXECUTIVE
 Exclusive Remedy
 Release
 Non-Solicitation
 Options
 6. ARBITRATION PROVISION
 rbitration Requirement




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-16- Arbitration Act International Commercial Arbitration Act
 Qualification of Arbitrator
 Appointment of Arbitrator
 Determination of Arbitrator
 Site of Arbitration
 Costs and Expenses
 7. GENERAL
 No Obligation to Employ




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-17- Governing Law
 Severability
 Enurement
    Notice




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-18-  8.
    
    AMENDMENT AND TERMINATION
 Amendment Prior to Any Proposed CIC
 Amendment Prior to Proposed CIC
 Termination
 9.
    
    EFFECTIVE DATE AND TERM OF THE PLAN




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-19-




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SCHEDULE A
 CHANGE IN CONTROL
 Events Constituting Change in Control
 (a)
    
    any Person or group acquires beneficial ownership of securities
of the Corporation representing more than 20% of the outstanding securities
entitled to vote in the election of directors of the Corporation (collectively,
the Voting Shares) other than in connection with a Permitted Business
Combination;(b)
    
    the consummation of a merger, amalgamation, business
combination, reorganization or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation or any liquidation or
dissolution of the Corporation, including by way of plan of arrangement (a
Business Combination) unless, in any such case:
 (i)
    
    such Business Combination involves solely the Corporation, and one and
more affiliated entities; or(ii)
    
    following completion of all steps involved in the transaction or
transactions pursuant to which the Business Combination is effected:
   (c)
    
    the persons who were directors of the Corporation on the date
hereof (the Incumbent Directors) cease (for any reason other than death or
disability) to constitute at least a majority of the Nortel Board; provided,
that, any person who was not a director on the date hereof shall be deemed to
be an Incumbent Director if such person was elected or appointed to the Nortel
Board by, or on the recommendation of or with the approval of, at least
two-




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-2- thirds of the
directors who then qualify as Incumbent Directors either actually or by
operation of this proviso, unless such election, appointment, recommendation
or approval was the result of any actual or publicly threatened proxy
contest for the election of directors; or
 (d)
    
    any other event which the Nortel Board determines in good faith
could reasonably be expected to give rise to a Change in Control resulting from
situations such as:
 (i)
    
    any Person acquiring a significant interest in the Corporation; or(ii)
    
    the election of any Person to the Nortel Board
in circumstances in which management has not solicited proxies in
respect of such election.
 Definitions
 Securities Act 1,