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Exhibit 10.2

Nortel Networks Limited SUCCESS Incentive Plan

Section 1: Introduction

The Nortel Networks
Limited SUCCESS Incentive Plan (the SUCCESS Plan) is
a short-term, incentive bonus plan that provides the potential for Eligible
Employees (as defined below) to receive cash awards based on their
contributions to the success of the Company"1, conditioned on the Company
meeting its objectives.

The SUCCESS Plan is intended to drive business performance and customer
and shareholder value by rewarding Eligible Employees for their contributions
to the Companys overall success. An Eligible Employees contribution is
determined by two factors: (1) the impact of that employees role on business
results and (2) that employees achievement of individual performance
objectives during the employees active service with the Company. The actual
award received by an Eligible Employee will reflect (1) an employees job
scope, complexity, and responsibilities, and that employees contribution and
achievement, during the Plan Period2 and (2) the Companys performance as
indicated by the Nortel Networks Performance Factor (the Nortel Networks
Performance Factor).

Section 2: SUCCESS Plan Eligibility

Generally, Company employees who are in professional/managerial job
families3 are eligible to participate in the SUCCESS Plan (Eligible
Employees), subject to the following:



| | (1) |  | Employees who participate in other incentive plans are
ineligible for the SUCCESS Plan during the full calendar month(s)
when they participate in the other incentive plan(s). Other
incentive plans include sales incentive compensation or any other
incentive/bonus arrangements being offered in lieu
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|1 For purposes of
the SUCCESS Plan, the Company is defined as Nortel
Networks Limited and its subsidiaries and affiliates and other entities, which
it controls directly or indirectly and which have been approved for
participation in the SUCCESS Plan by the person holding the position of senior
vice president responsible for human resources or the equivalent at the Company
(the Senior Vice-President, HR).                                                                                                                                                                                                                               
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2 Each calendar
year consists of two Plan Periodsthe first, from January 1
through June 30 and the second, from July 1 through December 31. The Plan
Periods for each calendar year may be changed by the JLRC (as defined in
Section 2) and Board of Directors (as defined in Section 2) at any time.                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3 This includes the Customer Service, Research, Design and Development,
Operations, Information Technology, Sales & Marketing, Corporate Services, and
Supply Management job families. It also includes all
managerial/professional/specialist job families in jobs at Job Complexity
Indicator (JCI) 1, 2, and 3 in the United Kingdom, Ireland, Netherlands,
Germany, Austria, and Spain who were previously eligible for non-legislated or
contractual overtime. Employees in Administration, Technician, Installation
Field Technician and System House Operations job families (including jobs in
JCI 5 and 6) are ineligible for the SUCCESS Plan.



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| |     |  | of the SUCCESS Plan. As set out below, employees who participate in
other incentive plans for a portion of the month and the SUCCESS Plan
for a portion of the month are eligible for the SUCCESS Plan for that
month;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Students, co-op students, interns, and non-payroll workers
are ineligible for the SUCCESS Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (3) |  | Regular part-time employees who are eligible for
participation in Company health benefit plans based on their
regularly scheduled hours will be eligible for the SUCCESS Plan;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (4) |  | The Joint Leadership Resources Committee of the Boards of
Directors of Nortel Networks Corporation and Nortel Networks Limited
(JLRC) and the Board of Directors of Nortel Networks Limited (the
Board of Directors) may determine that certain Company employees
(including employees who are not eligible for the SUCCESS Plan) may
be eligible to receive an award from a Discretionary Bonus Pool
created pursuant to Section 5 hereof;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (5) |  | Subject to applicable law, to be eligible for either a full
or pro-rated award for any given Plan Period: (a) an employee must
have been actively employed in an eligible role under the SUCCESS
Plan for at least three full calendar months in that Plan Period4
(an employee is not eligible for a payout for any period(s) of
inactive service in a Plan Period) and (b) the employee must have
been an active employee in an eligible role or in a role that is
eligible for another incentive award, such as sales incentive
compensation, on or before April 1 and on June 30 (for the first
Plan Period of the year) and on or before October 1 and on December
31 (for the second Plan Period of the year5). Where an employee is
on notice of the termination of his/her employment, that employee
will be considered on inactive service for the purposes of the
SUCCESS Plan, unless that employee is continuing to perform work for
the Company throughout the notice period;
|
| | (6) |  | Pro-rated awards, based on the number of months that an
employee is in a position that is eligible under the SUCCESS Plan,
shall also be made to employees who transfer into or out of
positions covered by other incentive programs (for example, sales
incentive compensation), or who are moved to a job that is
ineligible for the SUCCESS Plan. For any Plan Period when the
employee is partially eligible for the SUCCESS Plan, the employees
award will be based on the number of months the employee was
eligible for the SUCCESS Plan divided by the Plan Period. For the
purposes of determining pro-rata awards, an employees participation
in the SUCCESS Plan for part of a month will be deemed to be the
same as participation for a full month. The calculation will be
based on the incentive plan in which the employee                                                                                                                                                



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|4 The required period of active employment may be changed by the JLRC and
Board of Directors at any time.                
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|                                                                                                                         
|5 The dates on which an employee must be actively employed may be changed by
the JLRC and Board of Directors at any time.





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| |     |  | participates as of the end of the month. The total number of months
of combined participation in all plans during any Plan Period cannot
exceed the term of the Plan Period and the total number of months of
combined participation in a calendar year cannot exceed twelve
months;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (7) |  | Employees who meet all of the SUCCESS Plan eligibility
requirements, but who leave employment with the Company between the
end of the Plan Period and the related payment date for the award,
other than for reasons related to inappropriate actions, dismissal
for cause or unsatisfactory performance, will be eligible for an
award for the applicable Plan Period;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (8) |  | An employees Management Team6 has the right to make
exceptions to the active employee service requirements outlined
above, where required by law or where circumstances warrant an
exception. Exceptional circumstances might include approved leaves
(military, family or medical), disability, outsourcing, divestiture,
or death. In such situations, if the employee has during his or her
active service substantially achieved his/her individual objectives,
the employees Management Team may grant partial awards. If awards
are paid in these circumstances, the awards will be pro-rated to
reflect the number of months of active employment in an eligible
position, and will be commensurate with the employees contribution
and achievement. As required by local/in-country law, eligible
maternity and/or parental leave shall be deemed to be active service
for the purposes of the SUCCESS Plan. Notwithstanding anything to
the contrary, nothing in the SUCCESS Plan shall preclude paying an
employee an award under the SUCCESS Plan for more than the number of
months of active employment pursuant to that individual employees
termination agreement, which the Senior Vice-President, HR has
approved; and
|
| | (9) |  | Company affiliates and joint ventures may choose to offer the
SUCCESS Plan or a similar plan subject to the approval of the Senior
Vice-President, HR.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Section 3: Award Elements

An Eligible Employees cash award for a Plan Period under the SUCCESS Plan
will be based on the following formula:

50%7 of Annual Base Salary x Award % x Nortel Networks Performance Factor

Annual Base Salary means the yearly regular compensation paid to an Eligible
Employee, excluding any other compensation, such as, but not limited to,
bonuses, commissions, overtime, and relocation benefits. Regardless of any
raises or decreases an



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|6 The Management Team consists of the managers with whom the employee has a
direct or indirect reporting relationship as set out in the Organization
Structure Manager (OSM) or its equivalent as maintained by the Company from
time to time.
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|                                                                                                                                                                                                                                                  
|7 The percentage of Annual Base Salary that is applied to the formula may be
changed by the JLRC and Board of Directors at any time.                                                                                                              





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Eligible Employee may receive during the Plan Period, the Annual Base Salary
will be measured at a uniform time for all Eligible Employees for the SUCCESS
Plan on or about six weeks prior to the end of the Plan Period.

Award % is the percentage of Annual Base Salary that is used to compute the
SUCCESS Plan award for each Eligible Employee. For JCI 1-6, the Award % ranges
from 0% to 35% of Annual Base Salary. For JCI 55, the Award % ranges from 0%
to 400% of Annual Base Salary. For each JCI, the Senior Vice-President, HR may
set a suggested narrower award range, intended to reflect a market trend to
give certain Eligible Employees with higher levels of responsibility a higher
incentive potential as a percentage of Annual Base Salary. Within the ranges
approved by the JLRC and the Board of Directors, an Eligible Employees
Management Team will determine the recommended Award % for that employee for
each Plan Period. An Eligible Employees recommended Award % is subject to
review and approval by the Senior Management Team.8

The total SUCCESS Plan award for all Eligible Employees for a Plan Period
(reflecting the Nortel Networks Performance Factor) is recommended by the
Senior Management Team for approval by the JLRC and the Board of Directors
after the end of the Plan Period.

Nortel Networks Performance Factor is calculated based on the achievement by
the Company of key corporate objectives for the Plan Period. The objectives
are approved by the JLRC and the Board of Directors near the start of each Plan
Period. The Nortel Networks Performance Factor may be based on one or more
performance metrics, each with specific targets. The performance metrics may
have equal or different weightings. Performance metrics are the general
corporate goals for the Plan Period, such as profitability, market momentum, or
customer loyalty. Targets shall be based on objective and/or subjective
criteria established to measure, directly or indirectly, the performance
metrics. Weightings shall be the relative weight or percentage accorded in the
Nortel Networks Performance Factor for achieving each specific target. After
approval by the JLRC and the Board of Directors, the Companys objectives for
the Plan Period will be communicated to Eligible Employees early in each Plan
Period. The Nortel Networks Performance Factor is deemed to be 1.0
(achievement) throughout the Plan Period and is then adjusted by the JLRC and
the Board of Directors based on their determination of corporate performance.



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|8 For purposes of the SUCCESS Plan only, the Senior Management Team shall
consist of the President and Chief Executive Officer, the Chief Financial
Officer and the Senior Vice-President, HR of Nortel Networks Limited.
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Section 4: SUCCESS Plan Awards

Awards for each Plan Period are calculated based on 50%9 of an Eligible
Employees Annual Base Salary, the Eligible Employees Award % (which reflects
the employees job scope, complexity and responsibilities, and that employees
contribution and achievement, during the Plan Period), and the Nortel Networks
Performance Factor (that is, the Companys business performance for the Plan
Period as determined by the JLRC and the Board of Directors). An Eligible
Employees Award % for a Plan Period is typically assessed in the last two
months of the Plan Period. When warranted, cash awards will be made in the
first quarter following the close of the applicable Plan Period.

Any award under the SUCCESS Plan to an Eligible Employee is subject to the
discretion of the Eligible Employees Management Team and Senior Management
Team and the JLRC and the Board of Directors. That is, an Eligible Employees
Management Team determines, in its discretion, the Award % for an Eligible
Employee subject to review and confirmation by the Senior Management Team.
Specifically, the Senior Management Team reserves the right, in its discretion,
to review and adjust an Award % assigned to an Eligible Employee by that
employees Management Team to reflect its assessment of the employees
contributions to the business, as well as to ensure that the final payouts, if
any, are within appropriate budgetary guidelines. The JLRC and the Board of
Directors determine, in their discretion, the achievement of the targets for
the performance metrics and the final calculation of the Nortel Networks
Performance Factor (which may include a determination of a Nortel Networks
Performance Factor of zero, even if certain of the performance metrics targets
are achieved, and/or an adjustment to the relative weighting of the performance
metrics.) During the Plan Period, the JLRC and the Board of Directors can
review performance measures, weightings, and targets to determine whether they
remain appropriate. The JLRC and the Board of Directors may, at their sole
discretion, adjust the business priorities, plan performance measures,
weightings, targets, and/or plan payouts, as they deem necessary during the
year, to reflect changes in business conditions or other circumstances.

Any SUCCESS Plan award will be made by an Eligible Employees statutory
employer and will be paid in the same currency as the Eligible Employees
regular pay at the end of the Plan Period. Eligible Employees who transfer to
another country during the Plan Period or between the end of the Plan Period
and the payment date for the award will be paid in the currency in which they
receive their pay at the end of the Plan Period.

SUCCESS Plan awards are considered income and are therefore subject to
national, state/provincial, and/or local taxes. All appropriate taxes and
other withholdings will be deducted from the award as required by applicable
law.

Depending on local laws and policies, SUCCESS Plan awards may have an impact on
some benefits and may or may not be included in the eligible earnings for
purposes of capital accumulation and retirement plans offered in the various
regions by the Company.



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|9 The percentage of Annual Base Salary that is applied to the formula may be
changed by the JLRC and Board of Directors at any time.
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Where appropriate, deductions may be made from SUCCESS Plan awards in
accordance with the specific capital accumulation and retirement plan selected
by the employee.

Section 5: Discretionary Bonus Pool

During a Plan Period, the JLRC and the Board of Directors may consider the
creation of a separate Discretionary Bonus Pool under the SUCCESS Plan to
provide discretionary, incremental bonus awards. These awards may be made to
all employees of the Company or employees of the Company who individually or in
groups made a relative contribution that significantly added to the overall
success of the Company, whether or not the employees are entitled to
participate in the SUCCESS Plan. The determination that a Company employee is
eligible for a Discretionary Bonus Pool award does not otherwise entitle that
employee to generally participate in the SUCCESS Plan. The JLRC and the Board
of Directors have complete discretion to determine: the establishment of the
Discretionary Bonus Pool; the eligibility for participation; any performance
metrics, weightings and targets; the achievement, if any, of the targets for
the performance metrics; and the amount of the awards, if any, paid from the
Discretionary Bonus Pool. Whether or not an Eligible Employee receives a
SUCCESS Plan award shall have no effect on that employees eligibility to
receive a Discretionary Bonus Pool award.

Section 6: Interpretations and Amendments

This document, as amended from time to time, constitutes the Nortel Networks
Limited SUCCESS Incentive Plan. In the event of any conflicts or
inconsistencies between the provisions of the SUCCESS Plan and any other
document or communication, written or oral, concerning the SUCCESS Plan, the
provisions of this document, as amended from time to time, shall govern.

The Senior Vice-President, HR, subject to approval of the JLRC and the Board of
Directors in certain cases, shall interpret the provisions of the SUCCESS Plan,
which shall be final and binding on the Company and all SUCCESS Plan
participants. This document is subject to interpretation to comply with
applicable domestic laws. It is not and shall not be construed as either an
employment contract or as a contract concerning the subject matter contained
herein. There is no guarantee that any award under the SUCCESS Plan will
actually be paid. Any award to an Eligible Employee, based on individual
contribution and measures of corporate performance, is determined at the
discretion of an Eligible Employees Management Team, the Senior Management
Team and the JLRC and the Board of Directors as the case may be. If such
awards, however, are made, they shall be made in accordance with the provisions
herein.

The SUCCESS Plan can only be terminated or amended by Board of Directors, which
shall have the full authority, at any time, to terminate the SUCCESS Plan or to
delete, modify and/or add to any and all terms, conditions, and provisions of
the SUCCESS Plan.

As adopted by the Board of Directors of Nortel Networks Limited on July 25, 2002