##### 



EXHIBIT 14




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##### 



Letter from the CEO
       
 Mike Zafirovski
 2




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Table of Contents
 Introduction to the Code
    
    
    5Why Nortel has a Code of Conduct
    
    
    5Responsibilities under the Code
    
    
    5Reporting Violations or Requesting Advice
    
    
    6Violation of a Provision of the Code
    
    
    7Limitations to the Code
    
    
    7Waivers of the Code
    
    
    8Our Commitment to our Customers and to Fair Competition
    
    
    9Competition Laws
    
    
    10Agreements with Competitors
    
    
    10Agreements with Suppliers and Customers
    
    
    10Other Sales and Marketing Standards
    
    
    11Bribery and Corruption
    
    
    11Foreign Bribery and Corrupt Practices
    
    
    11Gifts, Entertainment, and Third Party Travel
    
    
    13Giving and Receiving Gifts Generally
    
    
    13Receiving Gifts and Entertainment from Companies Doing Business or
Seeking to Do Business with Nortel
    
    
    13Providing Gifts and Entertainment to Government Employees
    
    
    14Paid Speaking Engagements
    
    
    14Business Travel Involving Third Parties
    
    
    14Information about Competitors
    
    
    15Quality
    
    
    16Selling to the Government
    
    
    16Money Laundering and Exchange Control
    
    
    16Our Commitment to Our Company
    
    
    17Financial Reporting
    
    
    18Obligations of All Employees
    
    
    18Additional Obligations of All Employees with Financial or
Accounting Responsibilities
    
    
    18Senior Financial Managers
    
    
    19Recording and Reporting Other Types of Information
    
    
    19Maintaining Information
    
    
    19Conflicts of Interest
    
    
    20Avoidance and Disclosure of Conflicts of Interest
    
    
    20Interest in Contracts or Transactions
    
    
    20Corporate Opportunities
    
    
    20Relationships with Other Companies
    
    
    21Managerial Relationships with Family Members and Close Personal Friends
    
    
    22Receiving Gifts, Entertainment, and Third Party Travel
    
    
    22Loans and Guarantees of Indebtedness
    
    
    22Conflicts Disclosure Process
    
    
    22
  Continued
 3




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Table of Contents  Continued
 Use of Company Assets
    
    
    23Safeguarding Company Property
    
    
    23Use of Nortel Name, Facilities, and Relationships
    
    
    23Travel and Living Expenses
    
    
    23Computer and Network Use
    
    
    24Contractual Commitments
    
    
    24Conducting Research
    
    
    24Nortels Confidential Information
    
    
    25Employee Duties Regarding Nortels Confidential Information
    
    
    25Confidential Information Received from Third Parties
    
    
    26Protecting Intellectual Property  Nortels and Others
    
    
    27Copyright Protection
    
    
    27Inside Information
    
    
    28Communications with Media and Speaking on Nortels Behalf
    
    
    29Responding to Legal Proceedings
    
    
    30Our Commitment to Each Other
    
    
    31Nortel Forbids Discrimination and Harassment
    
    
    32Nortel Promotes Diversity
    
    
    32Drugs and Alcohol
    
    
    33Workplace Health and Safety
    
    
    33Privacy
    
    
    34Our Commitment in Doing Business Globally
    
    
    35Export Control
    
    
    36Customs
    
    
    37U.S. Anti-Boycott Act
    
    
    37Foreign Bribery and Corrupt Practices
    
    
    37Our Commitment to Our Communities
    
    
    38Social Responsibility
    
    
    39Environmental Responsibility
    
    
    40Political Involvement
    
    
    40Contact Information for Ethics Resources
    
    
    41Index
    
    
    42
 4




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Code of Business Conduct
 Introduction to the Code
 Why Nortel has a Code of Conduct
  Responsibilities under the Code
  >
    
    Abiding by the Code and Nortel policies and procedures.>
    
    Requesting advice from a manager, Human Resources, the Law Department, the Ethics
Office, the Ethics ActionLine, or the Ethics ActionWeb Tool when an ethical issue
arises.>
    
    Promptly reporting any known or suspected violations of the Code, laws and
regulations, and Nortel policies and procedures or requests that might constitute
violations using the reporting procedures set forth in this Code.>
    
    Challenging any business practice or behavior that may undermine the principles in
this Code and the integrity of our Company.>
    
    Cooperating in internal investigations about a reported violation.
  >
    
    Create an atmosphere that promotes ethical behavior and encourages employees to ask
questions and raise concerns.>
    
    Make sure that employees are aware of the principles contained in the Code.>
    
    Answer employees questions about the Code or direct them to an appropriate source
for information.>
    
    Demonstrate a commitment to the Code through their words and actions.>
    
    Use reasonable care to prevent and detect violations of the Code.>
    
    Report any compliance risks or Code violations and promptly seek guidance on how to
implement appropriate remedial measures.>
    
    Handle all employee reports promptly, confidentially, and in a manner consistent
with Company policy.
 Q & A:
 Q:
 A.
 5




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##### 



Q & A:
 Q.
 A.
 Reporting Violations or Requesting Advice
  1)
    
    Discuss the issue with your manager (unless you are uncomfortable
doing so or believe that the issue will not be satisfactorily
resolved). Or discuss the issue with Human Resources, the Law
Department, Compliance, Corporate Security, or Internal Audit.2)
    
    Call the confidential Ethics ActionLine: ESN 333-3014 or (905)
863-3014 (worldwide); 1-800-683-3503 (North America only) or use the
Ethics ActionWeb Tool. Your identity will not be revealed when you
use either of these reporting tools, if you choose. (However,
identifying yourself may assist the Company in investigating your
report.) You also have the option of reporting financial concerns
directly to the Audit Committee of the Board of Directors.3)
    
    Contact Chief Ethics Officer Susan Shepard by telephone (ESN
324-4220) or email (sshepard@nortel.com) or send a written
communication marked Private and Confidential  Complaint to her at
Nortel, 320 Park Avenue, New York, NY 10022. Or you may contact any
other member of the Ethics Office. Contact information can be found on
page 41.4)
    
    Contact one of the Ethics representatives in your region as
listed on the Ethics web page under Contacts.5)
    
    You may also communicate your concerns directly to the Nortel Board
of Directors, the Chairman of the Board, or any individual director,
including the Chairman of the Audit Committee, by writing to him or
her in care of the Corporate Secretary at Nortel headquarters at 195
The West Mall, Toronto, Ontario, Canada M9C 5K1. Mark your envelope
Private and Confidential  Complaint. All such correspondence will
be forwarded to the director to whom your correspondence is addressed.6)
    
    Members of the Board should consult with the Chairman, the
President and Chief Executive Officer, the Chief Financial Officer,
the Chief Legal Officer, the Corporate Secretary, the Chief
Compliance Officer, or the Chief Ethics Officer.
  6




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Investigations
   Violation of a Provision of the Code
  >
    
    Violating the Code, Nortel policy or procedure, or applicable law or regulation.>
    
    Requesting or permitting others to violate the Code, Nortel policy or procedure, or
applicable law or regulation.>
    
    Assisting another person in violating the Code.>
    
    Failing to promptly report a known or suspected violation of the Code, law or
regulation, or Nortel policy or procedure.>
    
    Failing to cooperate fully with Nortel investigations or audits.>
    
    Retaliating against another employee or a third party for reporting a violation or
for cooperating with a Nortel investigation.>
    
    For managers and supervisors, failing to use reasonable care to prevent or detect a
violation.
 Limitations to the Code
    Q & A:
 Q.
 A.
 Q & A:
 Q.
 A.
 7




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Questions to Ask
  >
    
    Would the action feel right?>
    
    Would the action be honest in all respects?>
    
    How would the action affect others?>
    
    Would the action embarrass me if it became known to my customers, co-workers,
professional colleagues, family, or friends?>
    
    How would I feel seeing my action reported in a newspaper?>
    
    Would additional advice or information help me in resolving this issue?
   Action Action
 Waivers of the Code
   8




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Our Commitment to our Customers and to Fair Competition
 We always compete vigorously. However, we must take care to avoid
any unlawful or unethical conduct; such conduct undermines the trust that
our customers place in Nortel, and their trust is the foundation of our
success.
 >
    
    Competition Laws>
    
    Other Sales and Marketing Standards>
    
    Bribery and Corruption>
    
    Gifts, Entertainment, and Third Party Travel>
    
    Information about Competitors>
    
    Quality>
    
    Selling to the Government>
    
    Money Laundering and Exchange Control
 9




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Competition Law Risks
 >
    
    Do not have any discussions or other communications, including the exchange of
emails, with competitors regarding prices, costs, product or service offerings, or
contractual terms.>
    
    Use caution when attending industry conferences or standards organization
meetings.>
    
    Do not accept competitors confidential pricing information from anyone, including
an agent, representative, consultant, or customer.>
    
    When in doubt, consult with the Law Department before engaging in any activity
that could violate competition laws.
 Q & A:
 Q.
 A.
 Competition Laws
  Agreements with Competitors
  >
    
    Price-fixing.>
    
    Dividing or allocating customers, bids, markets, or territories.>
    
    Refusing to sell to particular customers or to buy from particular suppliers.>
    
    Exchanging non-public sales, cost, profit, or price information.
   Agreements with Suppliers and Customers
   (See also, Other Sales and Marketing
Standards.)
 10




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Other Sales and Marketing Standards
  >
    
    Mislead customers or prospective customers regarding Nortel products and services.>
    
    Make false or misleading comments about our competitors or their products and
services. Any comparisons to competitors and their products and services must be
substantiated, accurate, and not misleading.>
    
    Urge a company to violate a contract it has with a competitor.
 (See also, Competition Laws and Quality.)
 Maintaining the Trust of Our Customers
    Bribery and Corruption
  >
    
    Countries generally prohibit the bribery of their government officials, and it is
Nortel policy to comply strictly with all such laws.>
    
    Giving bribes and kickbacks to employees of private businesses and entities, as
well as government employees, is prohibited.>
    
    This prohibition applies even if you believe that such conduct is commonplace in a
given location or market.
 Foreign Bribery and Corrupt Practices
  Q & A:
 Q.
 A.
 11




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Be
Alert about Using Agents and Other Third Parties
  >
    
    Do not engage as a Nortel agent any individual with a reputation for paying bribes
or engaging in other unlawful practices.>
    
    Beware of individuals with family or other relationships that could improperly
influence the decision of a customer or government official.>
    
    Beware of a demand for a cash payment prior to an award decision.>
    
    Beware of requests to make payments in countries or to entities not related to the transaction.>
    
    Do not agree to pay a commission that is disproportionate to the services the individual provides.
   >
    
    Providing anything of value  not just monetary payments  as consideration for
an act or omission. For example, gifts and other forms of entertainment could be
considered unlawful, as could loans, services, or using ones influence to benefit the
official.>
    
    Improper payments made by representatives, agents, sales consultants, and other
third parties on behalf of Nortel, if Nortel has actual knowledge of such conduct or acts
with conscious disregard or deliberate ignorance of the impropriety. Thus, when a
representative, agent, or sales consultant is retained, a clear record of reasonable due
diligence and resolution of any red flags is essential to demonstrate compliance with
applicable law.
 Guidelines for Gifts, Entertainment, and Third Party Travel (See also, Financial Reporting,
Gifts, Entertainment, and Third Party Travel, Selling to the
Government, Conflicts of Interest, and Political Involvement.)
  Related Policies and Procedures:
 200.09
    
    Representatives, Agents, Sales Consultants and Similar Appointments
 209.01
    
    Appointment, Termination and Approval of Representatives,
Agents, Sales Consultants and Other Similar Appointments
  12




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Gifts, Entertainment, and Third Party Travel
  Guidelines for Gifts, Entertainment,
and Third Party Travel
  >
    
    Comply with applicable law and the policies of the employer of the other party;>
    
    Contribute to the business relationship and be consistent with business goals.
If, for example, you are offering tickets to a sporting or cultural event, you must attend
the event as well; and>
    
    Not be of such a nature that they could embarrass Nortel if they were publicly
disclosed. Adult entertainment, for instance, is always inappropriate.
  Giving and Receiving Gifts Generally
  >
    
    Cash, gift certificates, or any other cash equivalent>
    
    Stock, stock options, or friends and family stock>
    
    Discounts not generally available to the public
  Receiving Gifts and Entertainment from Companies Doing or Seeking
to do Business with Nortel
 Guidelines for Gifts, Entertainment, and Third Party Travel
 Q & A:
 Q.
 A.
 13




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Q & A:
 Q.
 A.
 Receiving gifts in special circumstances
 Guidelines for Gifts, Entertainment, and Third Party Travel
 Providing Gifts and Entertainment to Government Employees
 Guidelines for Gifts, Entertainment, and Third Party
Travel
 Paid Speaking Engagements
 (See also, Communications with Media and Speaking on
Nortels Behalf.)
 Business Travel Involving Third Parties
 Guidelines for Gifts, Entertainment, and
Third Party Travel
 (See also, Bribery and Corruption, Selling to the Government, and
Conflicts of Interest.)
 14




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Information about Competitors




Competitors Information




(See also, Nortels
Confidential Information.)


Related Policies and Procedures:


200.17  Collection and Retention of Competitive Information


252.05  Review and Approval of the Collection and Retention of Competitive Information


400.02  Handling Unsolicited Disclosure of Ideas from Third Parties


401.03  Handling Unsolicited Disclosure of Ideas from Third Parties


712.02  Procurement Business Conduct


712.04  Supply Agreements


Confidential Information: What Is It?




Confidential
Information of
Competitors: When Do
Issues Arise?
  >
    
    When we work with
Nortel employees
who previously
worked for
competitors.>
    
    When customers,
suppliers, channels,
or others offer to
provide price or other
information about
competitors.>
    
    During competitive bids.>
    
    In a merger,
acquisition, or
divesture context.
  15




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Employees Should Watch Out for Transactions...
 >
    
    That are inconsistent with your knowledge of the customers business and its sources of funds.>
    
    Involving transfers of funds to or from third parties, or countries, unrelated to the transaction.>
    
    Involving locations identified as bank secrecy havens.>
    
    Involving complex or multiple transactions in unusual patterns that have no clear purpose.>
    
    Involving a shell bank incorporated in a place where it has no physical presence and
that is unaffiliated with a regulated financial group or unlicensed money remitters or
currency exchangers or non-bank financial intermediaries.>
    
    Where the customer seeks to avoid record-keeping or reporting requirements, through
multiple transactions below a threshold amount that would trigger a reporting requirement,
or through other means.>
    
    Involving payments in cash or cash equivalents.
 Quality
 (See also, Other Sales and Marketing Standards.)
 Selling to the Government
   >
    
    Improperly seeking or accepting confidential bid information belonging to another
party (such as the government or a competitor).>
    
    Noncompliance with applicable government pricing, billing, and other procurement
rules.
 (See also, Bribery and Corruption and Gifts,
Entertainment and Business Travel.)
 Money Laundering and Exchange Control
  >
    
    If you have any concern about the source of a customers funds, you must err on
the side of caution and escalate the issue using the reporting procedures set forth in
this Code or consult with the Law Department.>
    
    Be aware of and comply with laws requiring that the receipt or importing of
specified amounts of cash or cash equivalents be reported to the appropriate authorities.
  16




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Our Commitment to Our Company
 We must be guided by what is best for Nortel in all aspects of our work.
 >
    
    Financial Reporting>
    
    Recording and Reporting Other Types of Information>
    
    Maintaining Information>
    
    Conflicts of Interest>
    
    Use of Company Assets>
    
    Nortels Confidential Information>
    
    Communications with Media and Speaking on Nortels Behalf>
    
    Responding to Legal Proceedings
 17




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Be Alert for Inaccurate Financial Reporting:
  >
    
    Inaccurate or
unrecorded
expense, revenue,
asset, or
liability entries.>
    
    Financial records that
do not accurately
reflect the nature of
the transaction or do
not match underlying
performance.>
    
    Pressure to
produce certain
accounting results.>
    
    Efforts to avoid
standard review and
control processes.>
    
    Failure to perform
required reviews of
financial practices,
records, and
results.>
    
    Estimates or
reserves that are not
supported by facts or
appropriate
documentation.>
    
    Transactions that do
not appear to have a
reasonable business
purpose.
 Financial Reporting
  Obligations of All Employees
  >
    
    Record transactions accurately, completely, consistently, and in a timely manner.>
    
    Maintain books, accounts, and records using sufficient detail to reflect Nortel
transactions accurately and fairly.>
    
    Never mislead an internal or external auditor through false, incomplete, or
non-responsive information.>
    
    Maintain the confidentiality of Company information and disclose records and
information as authorized by Company policy.>
    
    Report any pressure to inappropriately influence reporting of financial results.>
    
    Challenge any business practice or behavior that may undermine the principles in
this Code and the integrity of our Company.
 Additional Obligations of All Employees with Financial or Accounting Responsibilities
  >
    
    Fairly and accurately record all transactions and maintain records in accordance
with U.S. Generally Accepted Accounting Principles (U.S. GAAP).>
    
    Ensure there is adequate and appropriate review and approval of all transactions
recorded in accordance with U.S. GAAP and other applicable principles and standards.>
    
    Communicate unfavorable as well as favorable information and provide professional
judgments and/or opinions.>
    
    Maintain awareness of and perform their duties in a manner consistent with
finance and accounting-related laws, regulations, and professional standards and request
appropriate professional advice as required.>
    
    Be alert for and cognizant of potential violations of law and Nortel policies and
procedures that may become apparent in the course of their work through financial data
processing and knowledge of business operations and report these as appropriate.>
    
    Retain financial records according to Company record retention policy.
 18




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Senior Financial Managers
 >
    
    Ensure that financial and accounting staff have the appropriate level of
functional expertise and resources to accomplish operational objectives and maintain
professional standards.>
    
    Support and promote continuous training and development of financial and
accounting staff and ensure appropriate transition of duties to new personnel.>
    
    Prevent and detect any pressure on financial or accounting personnel, with
respect to accounting judgments and estimates, for the purpose of inappropriately
influencing the reporting of financial results.>
    
    Take all other steps necessary to ensure that the reports and other documents
filed with government agencies, including the Canadian Securities commissions and the U.S.
Securities and Exchange Commission, and all other public accounting and finance-related
communications are accurate and complete in every respect and are filed in a timely
manner.
 (See also, Bribery and Corruption.)
 Related Policies and Procedures:
 100.22  Disclosure of Material Information
 101.01  Disclosure of Material Information
 300.33  Financial Reporting
 300.34  General Auditor and Compliance
 301.06  Audit Report Follow-up Process
 301.07  Internal Audit Implementation Procedure
 GB 001  Payment and Reporting of Taxable Benefits
 US 002  Payroll Tax Reporting
 US 003  Internal Revenue Service Boycott Reporting Requirements
 300.03  Travel, Living and Entertainment Expenses
 Recording and Reporting Other Types of Information
  Maintaining Information
  19




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##### 



Special considerations
applicable to serving on a
board of directors or
technical advisory board or
otherwise advising another
company that does not and is
not likely to do business
with or compete against
Nortel.
  (See also, Responding to Legal Proceedings.)
 Related Policies and Procedures:
 205.04  Protection of Confidential Information
 252.01  Retention, Storage, and Destruction of Company Records
 Conflicts of Interest
 Avoidance and Disclosure of Conflicts of Interest
   >
    
    Prevents you from effectively and efficiently performing your regular duties.>
    
    Causes you to compete against the Company.>
    
    Influences your judgment when acting on behalf of Nortel in a way that could hurt
the Company.>
    
    Causes you to misuse Company resources.
   Interest in Contracts or Transactions
  Corporate Opportunities
  20




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Relationships with other Companies
 Working for, serving as a director or advisor to, or having
investments in competitors or companies with which Nortel has or is
likely to have a business relationship
 >
    
    Serve as directors, officers, employees, advisors, contractors, or consultants to
any company that does or is likely to do business with or compete against Nortel.>
    
    Have any direct or indirect investment in any such company (with the exception of
a public company when the investment does not exceed one percent of the issued shares.)
  Doing part-time work for, or running, an outside business that is not,
or is not likely to become, a competitor or have a business relationship
with Nortel.
 >
    
    You interact with some of the same people as in your Nortel job;>
    
    You use skills or tools paid for or developed by Nortel;>
    
    You do the same or similar work for Nortel; or>
    
    Your work prevents you from performing your Nortel job effectively and efficiently.
  Family and close personal relationships
  Q & A:
 Q.
 A.
 21




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##### 



Managerial Relationships with Family Members and Close Personal Friends
  Receiving Gifts, Entertainment, and Third Party Travel
 (See, page 13.)
 Loans and Guarantees of Indebtedness
  Conflicts Disclosure Process
     22




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##### 



(See also, Bribery and Corruption and Gifts, Entertainment,
and Third Party Travel.)
 Related Policies and Procedures:
 200.01  Ethical Business Practices
 200.13  Representation on Unaffiliated Boards of Directors
 201.06  Guide to Ethical Business Practices: Compliance, Enforcement, and Conflict of Interest
 Use of Company Assets
  Related Policies and Procedures:
 200.05  Corporate & Systems Security
 205.04  Protection of Confidential Information
 206.01  Systems Security
 300.01  Risk Management
 320.28  Use of Undisclosed Material Information
 303.23  Travel, Living and Entertainment Expenses
 400.03  Possession and Use of Third Party Software
 Safeguarding Company Property
  Use of Nortel Name, Facilities, and Relationships
  Travel and Living Expenses
  Related Policies and Procedures:
 300.33  Financial Reporting
 23




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##### 



Computer and Network Use
  >
    
    Interfere with or adversely affect your job performance or that of any other
employee.>
    
    Interfere with or impede the intended operation of the computer and associated
network access provided to you or others. (For instance, music and games can consume
significant storage capacity.)>
    
    Be for personal business or the business of another person or company.>
    
    Support any unlawful or other purpose that could cause embarrassment to the
Company or otherwise adversely affect its interests.>
    
    Be disruptive or offensive, involving, for instance, sexually explicit materials
or materials that are discriminatory, hateful, or threatening to others. Nortel computers
may not be used to access pornographic or other offensive web sites.
 (See also, Nortel Forbids Discrimination and Harassment.)
   Related Policies and Procedures:
 200.05  Corporate & Systems Security
 200.19  Appropriate Use of Nortels Network
 205.04  Protection of Confidential Information
 206.01  Systems Security
 901.05  Network Data (Recording and Use)
 Contractual Commitments
  Conducting Research
  24




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##### 



Nortels Confidential Information
    Related Policies and Procedures:
 205.04  Protection of Confidential Information
 Employee
Duties Regarding Nortels Confidential Information
 >
    
    Ensure that information under your control is properly
classified and safeguarded in accordance with Nortel policies
and procedures.>
    
    Be careful when you discuss or transmit confidential information:
 
    
    Outside Nortel (for instance, on cell phones or in public places);
    
    In situations where third parties are on Nortel premises. (For example,
do not leave confidential information visible on an unattended
computer monitor);
    
    In emails. Use encryption technology if feasible, as defined in Nortel
policies and procedures; and
    
    In faxes that may be seen by third parties.
 25




---



##### 



>
    
    Safeguard the confidentiality of information provided to third
parties, such as suppliers or customers, pursuant to applicable
Company policies and procedures. For example, when engaging in
discussions or negotiations that involve disclosing Nortel
confidential information to third parties under a non-disclosure
agreement, make sure that no statement, agreement, or transfer of
technology is made that inadvertently grants the party a license or
rights to use Nortel intellectual property. Prior to Nortel
receiving any oral or written confidential information a
non-disclosure agreement will usually need to be executed by Nortel
and the other party. If you think a non-disclosure agreement may not
be required in a particular case you should discuss this with the
Law Department.>
    
    Report any actual or suspected unauthorized release of
confidential information, whether intentional or
unintentional, to the Law Department immediately.>
    
    If you see Nortel confidential information left unattended or
otherwise made accessible to people who should not have it (even
other Nortel employees), report this immediately to your manager.
Discuss confidential information only with those employees who
have a legitimate need to know.>
    
    Make sure that tangible and electronic copies of Nortel
confidential information are clearly and consistently marked as
required by applicable corporate procedures.
  Related Policies and Procedures:
 100.22  Disclosure of Material
Information
 101.01  Disclosure of
Material Information
 205.04
 Protection of Confidential Information
 300.28  Use of Undisclosed Material Information
 320.28  Use of Undisclosed Material Information
 Confidential Information Received from Third Parties
   >
    
       Nortel does not want third-party confidential information unless
having such information is necessary in the context of a business
transaction (such as a request for proposal or bid request,
evaluation of a component or product to be incorporated into a
Nortel system design, service for a customers system, or due
diligence for a potential transaction).
 26




---



##### 



>
    
    Prior to Nortel receiving any oral or written confidential
information, ask the Law Department if a non-disclosure
agreement must first be signed and delivered by Nortel and the
other party.>
    
    If you accept third-party confidential information under a
non-disclosure agreement, be sure an appropriate process has been
established to meet our obligations and that the information is
used only for the purposes permitted under the agreement.>
    
    Do not accept or review an unsolicited disclosure of ideas (such
as concepts, technologies, patent applications, invention
disclosures, or license or marketing offers) from a person outside
the Company. Instead, report the matter immediately to the Law
Department.
 (See also, Confidential Information of Competitors and Privacy.)
 Related Policies and Procedures:
 200.17
 Collection and Retention of Competitive Information
 252.05  Review and Approval of the Collection and Retention of
Competitive Information
 400.02  Handling Unsolicited Disclosure
of Ideas from Third Parties
 401.03  Handling Unsolicited
Disclosure of Ideas from Third Parties
 Protecting
Intellectual Property  Nortels and Others
   Copyright Protection
  27




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##### 



(See also, Computer and Network Use.)
 Related Policies and Procedures:
 501.02  Intellectual Property
 501.03
 Patents, Industrial Designs and Inventions by Employees
 400.06  External Publication of Technology Information
 401.02
 Review and Approval Process for External Publication or Presentation of Technology Information
  Inside Information
    >
    
    There is a substantial likelihood that a reasonable investor would
consider it important in deciding whether to make an investment in
a security or would view the information as having significantly
altered the total mix of information available about the security
or the company that issues it; and/or>
    
    Public disclosure of such information would reasonably be
expected to have a significant impact on the market price or
value of the security.
   28




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##### 



(See also, Communications with Media and Speaking on Nortels Behalf.)
 Related Policies and Procedures:
 300.28  Use of Undisclosed Material Information
 320.28  Use of Undisclosed Material Information
 Communications with Media and Speaking on Nortels Behalf
   (See also,
Inside Information.)
 29




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##### 



Responding to Legal Proceedings
   >
    
    Destroy, alter, or conceal any documents in anticipation of or
following a request for those documents from any government agency
or a court or in connection with any pending or threatened
litigation, investigation, or official proceeding.>
    
    Lie or make misleading statements in connection with any
government or other investigation or any legal proceeding, or cause
another employee to do so.
 (See also, Maintaining Information.)
 Related Policies and Procedures:
 252.01  Retention, Storage, and Destruction of Company Records
 30




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##### 



Our Commitment to Each Other
 Nortel employees have an obligation to treat each other with dignity
 and respect and to maintain a safe and healthy work environment.
 >
    
    Nortel Forbids Discrimination and
Harassment>
    
    Nortel Promotes Diversity>
    
    Drugs and Alcohol>
    
    Workplace Health and Safety>
    
    Privacy
 31




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##### 



Nortel Forbids Discrimination and Harassment
    (See also, Computer and Network
Use.)
 Related Policies and Procedures:
 800.09  Compensation and Long-Term Incentives
 800.11  Employee Development and Performance Feedback
 800.18  Employee Permanent Relocation Assistance
 800.28  Internal Movement of Employees
 802.19  Sexual Harrassment
 CA.007  Employee Permanent Relocation Assistance to or within Canada
 US.009  Employee Permanent Relocation Assistance to or within the United States
 Nortel Promotes Diversity
   Related Policies and Procedures:
 800.25  Chronic Medical Conditions including AIDS
 802.19  Sexual Harassment
 CA.005  Equal Employment Opportunity
 CA.003  Workplace Harassment
 US.008  Equal Employment Opportunity/Affirmative Action
 32




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##### 



Drugs and Alcohol
    Related Policies and Procedures:
 800.24  Substance-Free Workplace
 US.006  Drugs and Alcohol
 Workplace Health and Safety
   Related Policies and Procedures:
 100.02  Crisis/Emergency Communications
 200.10  Travel by Nortel Networks Directors, Officers and Employees
 200.16  Protection of Key Corporate Employees
 204.01  Crisis Management
 800.01  Environment, Health and Safety
 803.14  Emergency Response
 803.15  Environment, Health and Safety Management
 33




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##### 



Privacy
   (See also, Nortels Confidential Information.)
 Related Policies and Procedures:
 800.29  Privacy and Data Protection
 802.20  Privacy and Data Protection
 US.010  Collection, Maintenance and Release of Health Information
 CA.009  Collection, Maintenance and Release of Health Information
 34




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##### 



Our Commitment in Doing Business Globally
 Because Nortel is a global company, it is subject to laws that
govern commerce between nations, as well as local laws and regulations in
the countries where we operate.
 >
    
    Export Control>
    
    Customs>
    
    U.S. Anti-Boycott Act>
    
    Foreign Corrupt Practices
 35




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##### 



Be Alert for Red
Flags that may indicate
Export Control Law
Violations:
 >
    
    The customers address
is a P.O. Box or the
customers facilities
are not suitable for
the product ordered.>
    
    The product is
incompatible with the
end customers business
or its stated end use.>
    
    The shipping
address is a
forwarding/shipping
agent.>
    
    The customer is known
to have, or suspected
of having,
unauthorized dealings
in embargoed countries
or with denied
parties.>
    
    The customer does not
use commonly available
installation and
maintenance services.>
    
    The customer is
reluctant or refuses
to provide end-user
information.>
    
    The customer
requests non-standard
payment terms or
currencies.>
    
    The order amounts,
packaging, or order
routing do not
correspond with normal
industry practice.>
    
    The parties are
known or suspected to
be engaged in the
development of
biological, chemical,
or nuclear weapons or
ballistic missiles.
 Export Control
     >
    
    You follow applicable international trade control regulations, including
licensing, shipping documentation, import documentation, reporting, and record retention
requirements, of all countries in which we conduct business or in which our business is
located. In some cases, these restrictions will apply to international trade in goods,
technology, software, and services as well as to financial transactions.>
    
    Employees and third parties who are citizens or residents of countries subject
to export control restrictions have access to our network only if and to the extent
permitted by applicable law.>
    
    All international transactions are processed through Nortels trade and
compliance shipping systems, which are designed to help manage Nortels export control
compliance. (Many but not all SAP-generated international orders are automatically
reviewed for export control compliance at the time an order is placed with Nortel or at
the time of shipment.) To determine whether an international transaction has been
reviewed, employees should consult one of the ECC Contacts listed on Nortels Export
Control Compliance web page (see above).
 36




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##### 



Related Policies and Procedures:
 400.06
 External Publication of Technology Information
 400.04
 Export Control and Trade Compliance
 402.01
 Export Control and Trade Compliance
 Customs
  U.S. Anti-Boycott Act
  Foreign Bribery and Corrupt Practices
 (See also, Bribery and Corruption, Gifts,
Entertainment, and Third Party Travel, and Selling to the
Government.)
 37




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##### 



Our Commitment to Our Communities
 Our work for Nortel touches many communities. We must respect
them by working to conduct Company business in a socially
responsible manner, as well as by obeying laws dealing with the
environment and the political process.
 >
    
    Social Responsibility>
    
    Environmental Responsibility>
    
    Political Involvement
 38




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##### 



Social Responsibility
  >
    
    We encourage recruiting qualified local personnel and purchasing local
materials and services, where practical.>
    
    We do not use forced labor or child labor and will not work with suppliers that
do.>
    
    We expect suppliers to observe our social responsibility standards, as set
forth in the Supplier Code of Conduct.
     Related Policies and Procedures:
 100.04
 Corporate Contributions
 251.01
 Corporate Contributions for Community Relations
 800.27
 Support for Education
 39




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##### 



Environmental Responsibility
   Related Policies and Procedures:
 700.06
 Environmental Procurement
 712.17
 Environmental Procurement
 800.01
 Environment, Health and Safety
 803.14
  Emergency Response
 850.02
 EHS, Audits, Compliance, Assessments and Management Reviews
 Political Involvement
  >
    
    Employees involved in lobbying and other work for Nortel within the political
process must ensure that they are aware of and comply with all applicable laws.>
    
    All contacts between employees of Nortel and members of government, other than
direct sales contacts with technical or procurement officials, contacts with the patent or
copyright offices, contacts by or authorized by the Law Department, and those required by
statute, shall be coordinated through Government Relations.>
    
    When you speak about political issues, always make it clear that your views and
actions are your own and not those of Nortel.>
    
    While Nortel encourages employees to participate in political activity,
employees shall not contribute Company or subsidiary funds, property, resources, or
employee work time to any political party or candidate unless approved by their manager
and Government Relations. Strict laws govern corporate political contributions.>
    
    If you plan to seek elective office or political appointment, you should notify
your manager.
 (See also, Bribery and Corruption.)
 Related Policies and Procedures:
 100.05
 Direct Governmental Financial Assistance
 100.07
 Federal Government Relations
 207.03
 Political Involvement by Employees
 207.04
 Visits by Elected Representatives, Political Candidates and Government Officials
 40




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##### 



Contact Information for Ethics Resources
 How you can Report an Ethical Concern
 1)
    
    Discuss the issue with your manager(unless you are uncomfortable
doing so or believe that the issue will not be satisfactorily resolved). Or
discuss the issue with Human Resources, the Law Department, Compliance,
Corporate Security, or Internal Audit.2)
    
    Call the EthicsActionLine:(Operates 24 hours a day, 7 days a week, in many
languages.)ESN 333-3014 or (905) 863-3014
1-800-683-3503 (toll free within North America) (Your name and number arenotdisplayed when you call these lines.)
    (IMAGE)
  3)
    
    Submit your concern/question via the EthicsActionweb
tool:www.nortel.com/ethicsaction4)
    
    Send an E-mail:bethics@nortel.com(Please note that your e-mail address appears on the message. Alternatively, you may send
an email markedPrivate and Confidential  Complaint directly to the Chief Ethics Officer, at
sshepard@nortel.com.)5)
    
    Send a written communication:You may also send a written communication marked Private and Confidential
Complaint directly to Chief Ethics Officer Susan Shepard at Nortel, 320 Park
Avenue, New York, NY 10022, or another member of her staff.6)
    
    Call any member of the Ethics Office directly:Susan Shepard, Chief Ethics Officer            ESN 324-4220 or (212) 317-4220Rob Timberg                                                 ESN 333-1246 or (905) 863-1246Lise Willard                                                   ESN 333-1559 or (905) 863-15597)
    
    Communicate your concerns to the Nortel Board of Directors:You may communicate directly with the Board of Directors, the Chairman
of the Board, or an individual Director, including the Chairman of the Audit
Committee, by writing to his or her attention in care of the Corporate
Secretary at:
      41




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##### 



Index
 AAbout the Nortel Code of Conduct
    
    
    5Accounting or auditing matters
    
    
    18Accurate books and records
    
    
    18Advertising
    
    
    11Agents, hiring overseas
    
    
    10, 12, 36Alcohol
    
    
    33Anonymously raising concerns
    
    
    6, 41Anti-Boycott Act
    
    
    37Antitrust
    
    
    10Application of Code
    
    
    5Asking questions and raising concerns
    
    
    18Assets, protecting
    
    
    23BBid rigging
    
    
    10Board members, compliance with the Code
    
    
    5Board of directors, serving on
    
    
    21Books and records
    
    
    18Boycotts
    
    
    37Bribery
    
    
    11, 15, 16, 19, 23, 37, 40CCalling the
Ethics Action Line
    
    
    6Candidates for political office
    
    
    40Canadian Corruption of Public Officials Act
    
    
    12Cash gifts
    
    
    13Cash transactions, reporting
    
    
    16, 18Child labor
    
    
    39Close relatives
    
    
    21, 22Commercial bribery
    
    
    11Communities and society
    
    
    39Competing with Company
    
    
    20Competition Law
    
    
    10Competitors, criticizing and disparaging
    
    
    11Competitors, discussions and meetings with
    
    
    10Competitors, information and information about
    
    
    10, 15Competitors, ownership interest in
    
    
    21Competitors, working for
    
    
    21Computer systems
    
    
    15, 24, 25, 28Confidential Company information
    
    
    25Confidential information of others
    
    
    10, 26Confidentiality
    
    
    6, 15, 25, 27Conflicts of interest
    
    
    20Consequences of violations
    
    
    7Contributions for political campaigns
    
    
    40Copyright
    
    
    27Corporate opportunities
    
    
    20Corrupt business practices
    
    
    11Cultural events, accepting invitations to
    
    
    13, 14Customers, ownership interest in
    
    
    21Customers
    
    
    5, 8-12, 14-16, 20-21, 25-26, 28, 32-33, 36-37, 40DDirectors
    
    
    5, 6, 8, 20, 22, 28, 29, 39, 41Disability
    
    
    32Discipline for retaliation
    
    
    7Disclosing proprietary information
    
    
    25-29Discrimination in workplace
    
    
    32Disparagement of competitors
    
    
    11Diversity
    
    
    32Dividing customers or markets
    
    
    10Drugs
    
    
    33EEmail
    
    
    10, 25Employee confidentiality
    
    
    34Employee records
    
    
    34Employment discrimination
    
    
    32Employment outside of Company
    
    
    21Employment with competitors or suppliers
    
    
    21Entertainment, offering or receiving
    
    
    13, 14Environment
    
    
    40Ethics
Action Line
    
    
    5-8, 41Exchange Control
    
    
    16Exclusive dealing
    
    
    10Export controls
    
    
    36FFair competition
    
    
    9, 10Family members and close personal relationships, doing business with
    
    
    21, 22Finance managers, responsibility
    
    
    5, 6, 18, 19Financial disclosure and reporting
    
    
    18Fixing prices
    
    
    10Forced labor
    
    
    39Foreign Corrupt Practices Act
    
    
    12, 37Foreign countries and boycotts
    
    
    37Foreign laws
    
    
    8, 11, 16Foreign officials
    
    
    11Fraud:Accounting, financial reporting
    
    
    18Bid rigging
    
    
    10Bribery
    
    
    11Company funds
    
    
    18, 19Company resources
    
    
    23Company time
    
    
    24Employee fraud
    
    
    23Fraudulent financial reporting
    
    
    18Fundraising, political
    
    
    40Government contracts
    
    
    16Government inquiries
    
    
    20, 30Records, false or misleading
    
    
    18Statements about competitors
    
    
    11Friends and family stock
    
    
    13GGender discrimination, workplace
    
    
    32Generally Accepted Accounting Principles
    
    
    18Gifts, offering or receiving
    
    
    13Government customers, dealing with
    
    
    14, 16Government employees, discussing employment with
    
    
    16Government investigations
    
    
    20, 30Gratuities, offering or receiving
    
    
    13, 14Guarantees of debtors
    
    
    22Guidelines for Gifts, Entertainment, and Third Party Travel
    
    
    11-14
 42




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##### 



HHarassment
    
    
    32Harassment, reporting
    
    
    32Health and safety
    
    
    33Hiring government personnel
    
    
    16Hotline
    
    
    5-8, 41IIndustry association
    
    
    10Information gathering, competitive
    
    
    15Inside information
    
    
    28Insider trading
    
    
    28Intellectual property
    
    
    27Internet
    
    
    27Investigations
    
    
    5, 7, 18, 20, 30Investment analysts, contacts by
    
    
    29Investments in other companies
    
    
    21Investor Relations
    
    
    29JJob offers to government employees
    
    
    16Job, outside Company
    
    
    21LLobbying
    
    
    40MManagement, responsibilities of
    
    
    5, 6, 18, 19Market allocation
    
    
    10Material information
    
    
    28Meals, accepting or offering
    
    
    13, 14Media, contacts by
    
    
    29Money laundering
    
    
    16Monopolistic conduct
    
    
    10NNetwork security
    
    
    24News media, contact by
    
    
    29OOff-books accounts prohibited
    
    
    18Offering gifts and entertainment
    
    
    13Outside employment
    
    
    21, 22Overseas laws
    
    
    8, 11, 16Ownership in competitors and suppliers
    
    
    21, 22PPersonal data, records
    
    
    24, 34Personal use of company resources
    
    
    24Personnel data
    
    
    34Political activities
    
    
    40Political fund-raising
    
    
    40Political office, running for
    
    
    40Political parties, contributions to
    
    
    40Previous employers information
    
    
    15Price fixing
    
    
    10Privacy
    
    
    34Proprietary information, Company
    
    
    25, 27Proprietary information, others
    
    
    26, 27Public office, employees holding or running for
    
    
    40QQuality
    
    
    16RRacial discrimination
    
    
    32Record-keeping
    
    
    19Relatives, conflicts of interest involving
    
    
    20-22Relatives, doing business with
    
    
    21, 22Religious beliefs and practices, discrimination
    
    
    32Reporting suspected violations or problems
    
    
    5, 6, 41Retaliation
    
    
    7SSafe workplace
    
    
    33Safety
    
    
    33Sales practice
    
    
    11Security
    
    
    6, 24, 29, 33, 36Sexual harassment
    
    
    32Sexual orientation, discrimination, workplace
    
    
    32Software
    
    
    10, 25, 27, 28, 36Sporting events, accepting invitations to
    
    
    13, 14Supervisors, responsibilities
    
    
    5Supplier Code of Conduct
    
    
    39Suppliers, ownership interest in
    
    
    21Suppliers, working for
    
    
    21Suspicious transactions
    
    
    11, 12, 16, 18, 36TTipping, violation of securities law
    
    
    28Third-party payments
    
    
    11Trade associations
    
    
    10Trade restrictions
    
    
    28Trade secrets
    
    
    10, 25, 26Transshipments
    
    
    36Tying products or services
    
    
    10UUnfair business practices
    
    
    10Unrecorded funds
    
    
    16Unsavory entertainment
    
    
    13Unsolicited ideas
    
    
    26, 27WWaivers
    
    
    8Where to go for help
    
    
    6, 41Who the Code applies to
    
    
    5Who to contact
    
    
    6, 41Window period for securities trading
    
    
    29Working for another company
    
    
    21Workplace harassment
    
    
    32Workplace safety
    
    
    33
 43




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##### 



In the United States:
Nortel 35 Davis Drive
Research Triangle Park, NC 27709 USA
 In Canada:
Nortel
195 The West Mall
Toronto, Ontario M9C 5K1 Canada
 In Caribbean and Latin America:
Nortel
1500 Concorde Terrace
Sunrise, FL 33323 USA
 In Europe:
Nortel
Maidenhead Office Park, Westacott Way
Maidenhead Berkshire SL6 3QH UK
Phone: 00800 8008 9009 or
+44 (0) 870-907-9009
 In Asia Pacific:
Nortel
Nortel Networks Centre
1 Innovation Drive
Macquarie University Research Park
Macquarie Park, NSW 2109
Australia
Tel +61 2 8870 5000
 In Greater China:
Nortel
Sun Dong An Plaza
138 Wang Fu Jing Street
Beijing 10000
China
Phone: (86) 10 6510 8000
   www.nortel.com