##### 



NORTEL GLOBAL STOCK PURCHASE PLAN, AS AMENDED AND RESTATED




---



##### 



TABLE OF CONTENTS
 PageSECTION 1 DEFINITIONS
    
    - 1 -SECTION 2 ESTABLISHMENT OF THE PLAN
    
    - 3 -2.1
    
    Purpose
    
    - 3 -SECTION 3 PARTICIPATION AND ENROLLMENT
    
    - 3 -3.1
    
    Participation in the Plan
    
    - 3 -3.2
    
    Entry Date
    
    - 4 -SECTION 4 CONTRIBUTIONS TO THE PLAN
    
    - 4 -4.1
    
    Employee Contributions
    
    - 4 -4.2
    
    Variation of Contribution Levels
    
    - 4 -4.3
    
    Cessation of Contributions
    
    - 4 -4.4
    
    Leaves of Absence
    
    - 5 -4.5
    
    Remittance of Employee Contributions and Employer Payments
    
    - 5 -4.6
    
    Currency Conversion
    
    - 5 -SECTION 5 SHARE PURCHASE
    
    - 6 -5.1
    
    Purchase of Plan Shares
    
    - 6 -5.2
    
    Interest Income
    
    - 6 -5.3
    
    US$25,000 Limit
    
    - 6 -SECTION 6 DIVIDENDS
    
    - 6 -6.1
    
    Application of Dividends
    
    - 6 -SECTION 7 SHARE ALLOCATION
    
    - 7 -7.1
    
    Allocation of Plan Shares
    
    - 7 -7.2
    
    Dividends
    
    - 8 -7.3
    
    Maintenance of Records
    
    - 8 -SECTION 8 VESTING OF PLAN SHARES
    
    - 8 -8.1
    
    Employee Contributions and Employer Payments
    
    - 8 -SECTION 9 WITHDRAWAL OF PLAN SHARES
    
    - 8 -9.1
    
    Voluntary Withdrawals
    
    - 8 -9.2
    
    Change in Member Status
    
    - 8 -9.3
    
    Payment Options
    
    - 9 -9.4
    
    Sale of Plan Shares
    
    - 10 -9.5
    
    Cash Payments
    
    - 10 -9.6
    
    Compliance With Applicable Laws and Company Policy
    
    - 10 -9.7
    
    Rights As A Shareholder and Employee
    
    - 11 -9.8
    
    Legends
    
    - 11 -9.9
    
    Holding Periods
    
    - 11 -




---



##### 



PageSECTION 10 ADMINISTRATION
    
    - 11 -10.1
    
    Administration and Delegation
    
    - 11 -10.2
    
    Appointment of Plan Custodian
    
    - 12 -10.3
    
    Rules and Procedures
    
    - 12 -10.4
    
    Limitation of Liability
    
    - 12 -10.5
    
    Expenses
    
    - 12 -10.6
    
    Member Statements
    
    - 13 -10.7
    
    Shareholder Communications and Notices
    
    - 13 -10.8
    
    Voting Rights
    
    - 13 -10.9
    
    Withholdings
    
    - 13 -10.10
    
    Transferability
    
    - 13 -10.11
    
    Alteration or Substitution of Plan Shares
    
    - 14 -10.12
    
    Effect Of Change In Control or Alteration or Substitution ofShares On Purchase Rights
    
    - 14 -SECTION 11 AMENDMENT AND TERMINATION OF THE PLAN
    
    - 15 -11.1
    
    Amendment
    
    - 15 -11.2
    
    Termination
    
    - 15 -11.3
    
    Withdrawal of Employer
    
    - 15 -SECTION 12 GENERAL PROVISIONS
    
    - 15 -12.1
    
    No Additional Rights to Employment
    
    - 15 -12.2
    
    Liability
    
    - 16 -12.3
    
    Member's Agreement to be Bound by Plan Terms
    
    - 16 -12.4
    
    Effect of Mistake
    
    - 16 -12.5
    
    Indemnification
    
    - 17 -12.6
    
    Assignment, Exemption from Seizure and Bankruptcy
    
    - 17 -12.7
    
    Physical, Mental or Legal Incapacity of the Member
    
    - 17 -12.8
    
    Governing Law and Captions
    
    - 18 -12.9
    
    Stock Exchange Rules
    
    - 18 -SECTION 13 EFFECTIVE DATE AND TERM
    
    - 18 -13.1
    
    Effective Date
    
    - 18 -13.2
    
    Term
    
    - 18 -
 SCHEDULE A   CHANGE IN CONTROL




---



##### 



SECTION 1
 DEFINITIONS
  Applicable Stock Exchange
 Average Sale Price
 CBA
 Change in Control
 Collective Agreement Condition
 Committee
 Company
 Custodian Agreement
 Effective Date
 Eligible Earnings




---



##### 



-2-  Eligible Employee
 Employee Contributions
 Employer
 Employer Payments
 Entry Date
 Fair Market Value
 Ineligible Individual
 Member
 Members Account
 Nortel




---



##### 



-3- NYSE
 Offering Period
 Plan
 Plan Custodian
 Plan Shares
 Purchase Amount
 Shares
 TSX
 SECTION 2
 ESTABLISHMENT OF THE PLAN
 2.1
    
    Purpose
  SECTION 3
 PARTICIPATION AND ENROLLMENT
 3.1
    
    Participation in the Plan




---



##### 



-4-  3.2
    
    Entry Date
  SECTION 4
 CONTRIBUTIONS TO THE PLAN
 4.1
    
    Employee Contributions
  4.2
    
    Variation of Contribution Levels
  4.3
    
    Cessation of Contributions




---



##### 



-5-  4.4
    
    Leaves of Absence
  4.5
    
    Remittance of Employee Contributions and Employer Payments
  4.6
    
    Currency Conversion




---



##### 



-6- SECTION 5
 SHARE PURCHASE
 5.1
    
    Purchase of Plan Shares
  5.25.2
    
    Interest Income
  5.3
    
    US$25,000 Limit
  SECTION 6
 DIVIDENDS
 6.1
    
    Application of Dividends




---



##### 



-7- SECTION 7
 SHARE ALLOCATION
 7.1
    
    Allocation of Plan Shares




---



##### 



-8- 7.2
    
    Dividends
  7.3
    
    Maintenance of Records
  SECTION 8
 VESTING OF PLAN SHARES
 8.1
    
    Employee Contributions and Employer Payments
  SECTION 9
 WITHDRAWAL OF PLAN SHARES
 9.1
    
    Voluntary Withdrawals
  9.2
    
    Change in Member Status
  (a)
    
    the retirement or death of the Member; or




---



##### 



-9- 
 (b)
    
    the cessation of active employment of the Member with an Employer in
circumstances where the Member is not immediately re-employed by the Employer or
another Employer;
    9.3
    
    Payment Options
  (a)
    
    to receive a number of whole Plan Shares represented by share certificates
(up to the maximum whole number of Plan Shares recorded in such Members Account)
plus, if the Member elects or is required to withdraw all of the Plan Shares in such
Members Account, a cash payment equal to the value of any fraction of a Plan Share,
if any, recorded in such Members Account, after deduction of selling costs; or(b)
    
    to transfer record ownership of all whole Plan Shares recorded in such
Members Account to a broker of the Members choice plus, if the Member elects or is
required to withdraw all of the Plan Shares in such Members Account, a cash payment
equal to the value of any fraction of a Plan Share, if any, recorded in such
Members Account, after deduction of selling costs; or(c)
    
    to have a number of whole Plan Shares (up to the maximum whole number of
Plan Shares recorded in such Members Account) sold by the Plan Custodian and to
receive the net proceeds thereof, together with, if all Plan Shares in such Members
Account are being withdrawn, a cash payment equal to the value of any fraction of a
Plan Share, if any, in such Members Account after deduction for selling costs and
such amount of applicable taxes as required to be withheld.




---



##### 



-10- 
  9.4
    
    Sale of Plan Shares
  9.5
    
    Cash Payments
  9.6
    
    Compliance With Applicable Laws and Company Policy




---



##### 



-11-  9.7
    
    Rights As A Shareholder and Employee
  9.8
    
    Legends
  9.9
    
    Holding Periods
  SECTION 10
 ADMINISTRATION
 10.1
    
    Administration and Delegation




---



##### 



-12-  10.2
    
    Appointment of Plan Custodian
  10.3
    
    Rules and Procedures
  10.4
    
    Limitation of Liability
  10.5
    
    Expenses




---



##### 



-13- 10.6
    
    Member Statements
  10.7
    
    Shareholder Communications and Notices
    10.8
    
    Voting Rights
  10.9
    
    Withholdings
  10.10
    
    Transferability




---



##### 



-14- 10.11
    
    Alteration or Substitution of Plan Shares
  (a)
    
    a dividend shall be declared upon the Plan Shares payable in Shares (other than a
dividend that may be paid in cash or in Shares at the option of the shareholder);(b)
    
    the outstanding Plan Shares shall be changed into or exchanged for a different
number or kind of shares or other securities of Nortel or of another corporation,
whether through an arrangement, plan of arrangement, amalgamation or other similar
statutory procedure, or a share recapitalization, subdivision or consolidation;(c)
    
    there shall be any change, other than those specified in paragraphs (a) and (b)
of this Section 10.11, in the number or kind of outstanding Shares or of any Shares
or other securities into which such Shares shall have been changed or for which they
shall have been exchanged; or(d)
    
    there shall be a distribution of assets or shares to shareholders of Nortel out
of the ordinary course of business;
  10.12
    
    Effect Of Change In Control or Alteration or Substitution of Shares On Purchase Rights




---



##### 



-15- SECTION 11
 AMENDMENT AND TERMINATION OF THE PLAN
 11.1
    
    Amendment
  11.2
    
    Termination
  11.3
    
    Withdrawal of Employer
  SECTION 12
 GENERAL PROVISIONS
 12.1
    
    No Additional Rights to Employment
 (a)
    
    The opportunity to participate in this Plan at any time does not form a part of
any persons contract of employment, nor does the existence of a contract of
employment between any person and any Employer give such person any right or
entitlement to participate in the Plan or any expectation that an opportunity to
participate in the Plan will be offered to the Member subject to any conditions or
at all.(b)
    
    The rights and obligations of a Member under the terms of his or her contract
of employment with any Employer shall not be affected by participation in the Plan.




---



##### 



-16- 
 (c)
    
    The opportunity to acquire Plan Shares pursuant to the Plan shall not afford a Member or any
Eligible Employee any rights or additional rights to compensation or damages in consequence of
the loss or termination of the Members office or employment with any Employer for any reason
whatsoever.(d)
    
    A Member shall not be entitled to any compensation for damages for any loss or
potential loss that he or she may suffer by reason of being or becoming unable to
acquire Plan Shares under the Plan as a consequence of the loss or termination of
his or her employment with any Employer for any reason (including, without
limitation, any breach of contract by the Members Employer) or in any other
circumstances whatsoever.
 12.2
    
    Liability
  (a)
    
    the performance of Shares on any stock exchange at or during any period of time;(b)
    
    changes in the local currency value of Plan Shares resulting from fluctuations
in currency exchange rates;(c)
    
    income taxes or social security contributions payable in respect of Employer
Payments or Employee Contributions, except in the case of an Employer to the extent
that (i) the Employer is required by law to withhold any such amounts either from a
Members Eligible Earnings or from payments under the Plan, or (ii) the Employer
(but not the Employee) is liable for such payment under applicable law;(d)
    
    the release of any information regarding any Member by the Company, any other
direct or indirect subsidiary or affiliate of the Company, or the Plan Custodian,
in the course of administering the Plan; or(e)
    
    any consequential or other similar damages arising out of or related to a
purchase of Plan Shares under the terms of the Plan.
 12.3
    
    Members Agreement to be Bound by Plan Terms
  12.4
    
    Effect of Mistake




---



##### 



-17- 12.5
    
    Indemnification
  (a)
    
    the Members Employer; and(b)
    
    the Plan Custodian and any other person who is or becomes liable to account for
tax, social security contributions, or any other regulatory or statutory
contributions on behalf of that Member;
   12.6
    
    Assignment, Exemption from Seizure and Bankruptcy
   12.7
    
    Physical, Mental or Legal Incapacity of the Member




---



##### 



-18- 12.8
    
    Governing Law and Captions
  12.9
    
    Stock Exchange Rules
  SECTION 13
 EFFECTIVE DATE AND TERM
 13.1
    
    Effective Date
   13.2
    
    Term




---



##### 



-1- SCHEDULE A
 CHANGE IN CONTROL
 Events Constituting Change in Control
 (a)
    
    any Person or group acquires beneficial ownership of securities of Nortel
representing more than 20% of the outstanding securities entitled to vote in the
election of directors of Nortel (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 Nortel or any liquidation or dissolution of Nortel, including by
way of plan of arrangement (a Business Combination) unless, in any such case:
 (i)
    
    such Business Combination involves solely Nortel, 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:
 (A)
    
    Persons who were the beneficial owners,
respectively, of the outstanding common shares of Nortel immediately
prior to such Business Combination beneficially own, directly or
indirectly, by reason of such prior ownership of common shares, more
than 50% of the then-outstanding voting shares of (x) the entity
resulting from such Business Combination (the Resulting Entity) or
(y) the Person that ultimately controls the Resulting Entity, whether
directly or indirectly (the Ultimate Parent); and(B)
    
    at least a majority of the members of the
board of directors of the Person resulting from such Business
Combination (or the Ultimate Parent) were members of the board of
directors of Nortel (the Nortel Board) at the earlier of the time of
the execution of the initial agreement providing for, or the action of
the Nortel Board approving, such Business Combination;
 (c)
    
    the persons who were directors of Nortel 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-thirds of the directors who then qualify as Incumbent
Directors either actually or by operation of this proviso, unless such election,




---



##### 



-2- 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 Nortel; 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
 (a)
    
    beneficial ownership means ownership at law or in equity and, for the
purposes of this Plan, includes beneficial ownership as interpreted in accordance
with Subsections 1(5) and (6) and Section 90 of the Securities Act (Ontario) as in
force as of July 26, 2001 (the OSA);(b)
    
    control or controls means, with respect to any Person, the direct or
indirect ownership of voting securities of such Person that carry with them in the
aggregate more than 50% of the votes for the election of directors of such Person;(c)
    
    group means a Person and one or more other Persons who are acting jointly or
in concert with such Person and, for the purposes of this Plan, acting jointly or
in concert shall be interpreted in accordance with Subsection 91(1) of the OSA;(d)
    
    Permitted Business Combination means a Business Combination described in
Paragraph 1(b)(i) or 1(b)(ii) above; and(e)
    
    Person includes any individual, legal or personal representative,
corporation, company, partnership, syndicate, unincorporated association, trust,
trustee, government body, regulatory authority or other entity, howsoever designated
or constituted.