exv10w1



 



Exhibit 10.1



Amended General Description of Special Cash Bonus for Employees and Executives
of Nortel Networks Corporation and Nortel Networks Limited


The Boards of Directors of Nortel Networks Corporation and Nortel Networks
Limited and their Joint Leadership Resources Committee have approved a “Return
to Profitability” bonus program to further align the interests of employees
with the interests of shareholders in meeting the corporate objective of
achieving and maintaining profitability. Under this program, substantially all
employees will receive a special cash bonus if Nortel Networks Corporation
achieves profitability for a single fiscal quarter. However, the payment of
the full bonus for senior executives will require that Nortel Networks
Corporation maintains profitability for four consecutive fiscal quarters, on a
cumulative basis. For the purposes of this program, “profitability” is defined
as positive pro forma earnings from continuing operations, as confirmed by the
Board of Directors of Nortel Networks Corporation, on a cumulative basis. The
special cash bonus will only be payable to employees who are actively employed
by Nortel Networks Limited or any other direct or indirect subsidiaries of
Nortel Networks Corporation, on the last day of the applicable fiscal quarter
or quarters in respect of which this bonus is payable.


The special cash bonus for eligible employees (other than senior executives)
will be payable in full, if and when Nortel Networks Corporation first achieves
profitability for a single fiscal quarter (which may include the fourth fiscal
quarter of 2002), provided that this is achieved by the end of 2003.


The special cash bonus for senior executives will be in an aggregate potential
amount, based on a multiple of base salary, to be determined by the Boards of
Directors of Nortel Networks Corporation and Nortel Networks Limited and their
Joint Leadership Resources Committee. For each such senior executive, the
first portion, in an amount up to 20% of the aggregate potential amount, will
be payable if and when Nortel Networks Corporation first achieves profitability
for a single fiscal quarter, provided that this is achieved by the end of 2003.
The second portion, in an amount up to 40% of the aggregate potential amount, will be payable if and when Nortel Networks
Corporation achieves and maintains profitability for two consecutive fiscal
quarters on a cumulative basis, which may include the fiscal quarter in respect
of which the first portion is payable (but not the fourth quarter of 2002).
The third and final portion, in an amount up to 40% of the aggregate potential
amount, will be payable if and when Nortel Networks Corporation achieves and
maintains profitability for four consecutive fiscal quarters on a cumulative
basis, which may include the two consecutive fiscal quarters in respect of
which the second portion is payable. Neither the second nor third portions of
the bonus will be payable if the applicable payment performance criteria have
not been satisfied by the end of 2004. In addition, if the first portion does
not become payable (as a result of not achieving profitability for a single
fiscal quarter by the end of 2003), then none of the second or third portions
of the bonus will be payable.