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                                                                   EXHIBIT 10.17






                             [NORTEL NETWORKS LOGO]





                             NORTEL NETWORKS LIMITED

                           RESTRICTED STOCK UNIT PLAN

















                              Dated as of January 30, 1997, as amended effective
                           April 29, 1999, September 1, 1999, February 15, 2000,
                                              May 1, 2000, and November 15, 2000





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                                                          [NORTEL NETWORKS lOGO]

                             NORTEL NETWORKS LIMITED

                           RESTRICTED STOCK UNIT PLAN


1. BACKGROUND; PURPOSE OF THE PLAN

     The Nortel Networks Limited Restricted Stock Unit Plan has been amended and
restated to reflect the transactions contemplated by the plan of arrangement
(the "Plan of Arrangement") described in the Amended and Restated Arrangement
Agreement, made as of January 26, 2000, as amended and restated March 13, 2000,
among BCE Inc., Nortel Networks Corporation, New Nortel Inc. and the other
parties thereto. In connection with the Plan of Arrangement, New Nortel Inc.
acquired from the holders of the common shares (other than BCE Inc. and its
affiliates) of Nortel Networks Corporation all of the Nortel Networks
Corporation common shares then held by such shareholders in exchange for an
equal number of common shares of New Nortel Inc. and each shareholder of BCE
Inc. received approximately 0.78 common shares of New Nortel Inc. for each
common share of BCE Inc. then held by such BCE shareholder. On the effective
date of the Plan of Arrangement, the common shares of New Nortel Inc. were
listed on the New York Stock Exchange and The Toronto Stock Exchange in
substitution for the common shares of Nortel Networks Corporation. As part of
the Plan of Arrangement, Nortel Networks Corporation changed its name to Nortel
Networks Limited ("Nortel Limited" or the "Corporation") and New Nortel Inc.
changed its name to Nortel Networks Corporation ("Nortel Networks").

     In connection with and effective as of the effective date of the Plan of
Arrangement (the "Restatement Effective Date"), awards granted or to be granted
under the Plan and the shares subject to the Plan were adjusted and relate to
the common shares of Nortel Networks. In all other respects, the terms and
provisions of the Plan were reaffirmed, as stated at that time.

     The purpose of the Plan is to promote the long term success of Nortel
Networks by providing for the payment of performance bonuses in the form of
Shares to Designated Employees. The Plan is designed to encourage Designated
Employees to acquire a proprietary interest in Nortel Networks through ownership
of Shares, to provide them with additional incentive to further the growth and
development of Nortel Networks, to encourage them to remain in the employment of
Nortel Networks and to assist Nortel Networks in attracting individuals with
experience and ability.

2. DEFINITIONS

     For purposes of the Plan, the terms contained in this Section shall have
the following meanings.



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     "Administrator" shall mean such administrator as may be appointed by the
Corporation from time to time to administer the Plan.

     "affiliated companies" shall have the meaning ascribed to the term
"affiliated bodies corporate" in Section 2(2) of the CBCA or such other meaning,
and shall include such other entities, as may be determined by the Committee.

     "Board of Directors" shall mean the Board of Directors of the Corporation.

     "Business Day" shall mean a day, other than a Saturday or Sunday, on which
banking institutions in Canada and the United States are not authorized or
obligated by law to close.

     "CBCA" shall mean the Canada Business Corporations Act, R.S.C. 1985,
c.C-44, as amended.

     "Change in Control" shall have the meaning assigned to such term under the
Retention Plan.

     "CIC Date" shall have the meaning assigned to such term under the Retention
Plan.

     "Committee" shall mean the joint leadership resources committee of the
Board of Directors or such other committee of the Board of Directors comprised
of members of the Board of Directors as the Board of Directors shall from time
to time appoint to administer the Plan.

     "Corporation" shall mean Nortel Networks Limited (known prior to the Plan
of Arrangement as Nortel Networks Corporation) or its successors.

     "Designated Employee" shall mean any designated employee of Nortel
Networks, but shall not include a member of the Board of Directors who is not
also such a designated employee.

     "Effective Date" shall mean the date which the Board of Directors
determines will be the date on which a grant of RSUs shall take effect when
confirming a Grant of RSUs, and the date on which any determination made by the
Committee in connection with any such Grant in accordance with Section 5 hereof
shall take effect, provided that the Effective Date shall not be a date prior to
the date on which the Board of Directors confirms the Grant of RSUs and, unless
otherwise determined, the Effective Date will be the date on which the Board of
Directors confirms the Grant of RSUs.

     "Fiscal Year" shall mean any fiscal year of the Corporation, commencing
with the fiscal year ending December 31, 1997.

     "Grant" shall mean the number of RSUs allocated to a Designated Employee at
any time in accordance with Section 5 hereof.

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     "Nortel Networks" shall mean Nortel Networks Corporation (known prior to
the Plan of Arrangement as New Nortel Inc.) or its successors.

     "Nortel Networks Companies" shall mean, collectively, the Corporation,
Nortel Networks and their respective subsidiaries and affiliated companies or,
individually, any corporate entity included within such group, as the context
indicates.

     "Participant" shall mean an individual to whom a Grant has been made in
accordance with Section 5 hereof.

     "Performance Criteria" shall mean criteria established by the Committee
which, without limitation, may include criteria based on the financial
performance of Nortel Networks Companies and/or any company or business unit
thereof.

     "Performance Period" shall mean the period established by the Committee in
respect of each Grant, which period shall commence and end on the dates
designated by the Committee; provided, however, that each Performance Period
shall, unless otherwise determined by the Committee, commence no earlier than
the first day of the Fiscal Year in which the Grant was made and end no later
than the end of the second Fiscal Year following the Fiscal Year in which the
Grant was made.

     "Plan" shall mean the Nortel Networks Limited Restricted Stock Unit Plan as
set forth herein and as the same may be further amended from time to time.

     "Plan of Arrangement" shall have the meaning assigned to such term in
Section 1 hereof.

     "Release Date" shall mean, unless otherwise determined by the Committee,
for the purpose of paragraphs (c) and (f) of Section 6, the day which is 45
Business Days following the end of an applicable Fiscal Year, and, for all other
purposes, the tenth Business Day following notification to the Corporation and
the Administrator of the occurrence of the event giving rise to the issuance of
the RSUs in accordance with the provisions of the Plan, provided, however, that
except in the case of the death of a Participant, in no event shall the Release
Date in respect of a RSU be earlier than 12 months from the Effective Date of
Grant of such RSU.

     "Restatement Effective Date" shall have the meaning assigned to such term
in Section 1 hereof.

     "Retention Plan" shall mean the Nortel Networks Corporation Executive
Retention and Termination Plan as in effect from time to time prior to a CIC
Date.

     "Retirement" shall mean retirement in accordance with the provisions of any
pension or retirement plan of Nortel Networks Companies covering the
Participant, retirement pursuant to a special pension arrangement entered into
by Nortel Networks Companies and a Participant and applicable in lieu of, or in
addition to, any pension or retirement plan of Nortel Networks Companies or, if
the Participant is not covered by such a plan and/or special pension
arrangement, as determined by the Committee.


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     "RSU" shall mean a restricted stock unit allocated to a Designated Employee
in accordance with Section 5 hereof which shall upon issuance, in accordance
with and subject to the provisions of the Plan, entitle the holder thereof to
receive one RSU Share.

     "RSU Shares" shall mean the Shares delivered to Participants in accordance
with the provisions of the Plan in settlement of RSUs issued under the Plan.

     "Shares" shall mean the common shares of Nortel Networks and "Share" shall
mean a common share of Nortel Networks.

     "Stock Split" shall mean the subdivision on a two-for-one basis of the
Shares that became effective at the close of business on the fourth trading day
on The Toronto Stock Exchange following the effective date of the Plan of
Arrangement.

     "subsidiary" shall have the meaning ascribed to the term "subsidiary body
corporate" in Section 2(5) of the CBCA.

3. ADMINISTRATION

     The Committee shall administer the Plan in accordance with its terms. The
Committee may, subject to the terms of the Plan, delegate to third parties,
including the Administrator if one is appointed, the whole or any part of the
administration of the Plan and shall determine the scope of such delegation. Any
decision made by the Committee or the Administrator in carrying out its
responsibilities with respect to the administration of the Plan shall be final
and binding on the Participants.

     In addition to the other powers granted to the Committee under the Plan and
subject to the terms of the Plan, the Committee shall have full and complete
authority to interpret the Plan. The Committee and/or the Administrator may from
time to time prescribe such rules and regulations and make all determinations
necessary or desirable for the administration of the Plan. In particular, the
Committee shall select the Designated Employees to whom it recommends Grants
shall be made and shall determine the amounts and terms of the Grants (including
the related Performance Criteria, if any, and the formula to be used to
determine the number of RSUs to be issued based on the level of achievement of
such Performance Criteria), and the extent to which the Performance Criteria to
be achieved during the Performance Period, if any, has been achieved. Any such
interpretation, rule, determination or other act of the Committee and/or the
Administrator shall be conclusively binding upon all persons, including the
Participants and their legal representatives and beneficiaries.

     No member of the Committee, the Board of Directors or the Board of
Directors of Nortel Networks shall be liable for any action or determination
made in good faith pursuant to the Plan. To the full extent permitted by law,
the Corporation shall indemnify and save harmless each person made, or
threatened to be made, a party to any action or proceeding by reason of the fact
that such person is or was a member of the Committee or is or was a member of
either such Board of Directors and, as such, is or was required or entitled to
take action pursuant to the terms of the Plan.

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     Except as Participants may otherwise be advised by prior written notice of
at least thirty (30) days, all costs of the Plan, including any administration
fees, shall be paid by Nortel Networks.

4. RSU SHARES SUBJECT TO THE PLAN

     Neither Nortel Networks nor the Corporation shall bc required to issue
and/or cause to be delivered Shares or issue and/or cause to be delivered
certificates evidencing Shares to be delivered pursuant to the Plan unless and
until such issuance and delivery is in compliance with all applicable laws,
regulations, rules, orders of governmental or regulatory authorities and the
requirements of any stock exchange upon which Shares of Nortel Networks are
listed. Neither Nortel Networks nor the Corporation shall in any event be
obligated to take any action to comply with any such laws, regulations, rules,
orders or requirements. Subject to the foregoing, the Board of Directors of
Nortel Networks may authorize from time to time the issuance by Nortel Networks
of Shares and the Board of Directors may authorize from time to time the
purchase by the Corporation of Shares for the benefit of Participants on the
open market or by private transaction as required in order to administer the
Plan.

5. GRANTS

     Subject to the provisions of the Plan, the Committee shall, in its sole
discretion and from time to time, determine the Designated Employees to whom it
recommends that Grants be made based on their current and potential contribution
to the success of Nortel Networks. At such time, the Committee shall also:

     (a)  determine, in connection with each Grant, the Effective Date thereof
          and the number of RSUs to be allocated;

     (b)  determine, in connection with each Grant, the Performance Period
          applicable thereto;

     (c)  determine, in connection with each Grant, the Performance Criteria, if
          any, to be achieved during the Performance Period in order for RSUs to
          be issued to the Participant; and

     (d)  determine the other terms and conditions (which need not be identical
          and which, without limitation, may include non-competition provisions)
          of all RSUs covered by any Grant.

     Any Grant and any determination made by the Committee in connection with
any such Grant as provided shall be subject to confirmation by the Board of
Directors.

6. TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

     Certificates need not be issued with respect to RSUs covered by a Grant or
RSUs when issued. The Corporation or the Administrator shall maintain records
showing the number of RSUs allocated to each Participant under the Plan. Each
Participant shall be notified in



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writing of the number of RSUs covered by a Grant and of the terms and conditions
of such Grant, including those described below:

     (a)  NUMBER OF RSUs

     Each notification of Grant shall state the number of RSUs allocated to the
Participant and state that each such RSU shall, subject to and in accordance
with the terms of the Plan, entitle the Participant to receive one RSU Share,

     (b)  PERFORMANCE CRITERIA

     Each notification of Grant shall describe the Performance Criteria for the
Performance Period, if any, established by the Committee that must be achieved
for RSUs to be issued to the Participant.

     (c)  ISSUE OF RSUs

     Unless the Committee provides for another Performance Period at the time a
Grant is made, and except otherwise provided in paragraphs (d), (e) or (f) of
this Section, or in any other employee benefit plan approved by the Board of
Directors, subject to the level of achievement of Performance Criteria, if any,
determined by the Committee, a Participant shall be issued RSUs covered by a
Grant, settled in the form of RSU Shares on the Release Date following the
second Fiscal Year subsequent to the Fiscal Year in which the Grant was made;
provided the Participant is continuously employed with Nortel Networks Companies
from the Effective Date of such Grant to the Release Date. The number of RSU
Shares received by a Participant shall be equal to the number of RSUs issued on
a Release Date. Any RSUs covered by a Grant that are not issued on a Release
Date in accordance with the Plan or are not otherwise settled (i) in accordance
with paragraphs (e) or (f) of this Section, or (ii) prior to the applicable
Release Date, in accordance with the terms of any other employee benefit plan
approved by the Board of Directors, shall be forfeited.

     Notwithstanding anything herein to the contrary, no RSU shall be issued
within a period of 12 months from the Effective Date of the Grant of such RSU,
except (i) in the event of death of a Participant, in which case the Committee
may issue all or a portion of the RSUs covered by a Grant in the form of RSU
Shares in accordance with paragraph (d).

     (d)  RIGHT TO RSUs IN THE EVENT OF DEATH, RETIREMENT OR TERMINATION OF
          EMPLOYMENT

     Unless otherwise determined by the Committee:

          (i)  In the event of the death of a Participant while in the
               employment of Nortel Networks, the deceased Participant's estate
               shall elect in writing to the Corporation, within 120 days of the
               Participant's death, with respect to each Grant to such
               Participant for which the established Performance Period had not
               ended and for which RSUs have not otherwise been issued prior to
               the date of death, to receive, subject to and in accordance with
               the provisions of the


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               Plan, RSUs issued in the form of RSU Shares to the deceased
               Participant's estate:

                    (x)  as if the Performance Period had ended and the
                         Performance Criteria for any such Grant, if any, had
                         been met (but not exceeded) on the day preceding the
                         date of the Participant's death (in which case, receipt
                         of the election from the Participant's estate shall
                         constitute the event giving rise to the issuance of the
                         RSUs for the purpose of determining the applicable
                         Release Date); or

                    (y)  on the Release Date on which all or a portion of the
                         RSUs would otherwise be issued, if at all, in
                         accordance with the Plan had the Participant not died
                         and continued in the employment of Nortel Networks
                         Companies until such Release Date.

               In the event a deceased Participant's estate fails to make an
               election as herein provided, the Participant's estate shall be
               deemed to have elected to receive RSUs issued in the form of RSU
               Shares in accordance with subparagraph (x) above.

               In the event of the death of a Participant following the end of
               the Performance Period with respect to a Grant of RSUs but prior
               to the Release Date with respect to such Grant, the number of
               such RSUs that would otherwise be issued to such Participant
               shall be issued in the form of RSU Shares and delivered to the
               Participant's estate in accordance with and subject to paragraph
               (c) of this Section, as if the Participant had continued in the
               employment of Nortel Networks Companies until the Release Date.

          (ii) In the event of Retirement of a Participant, with respect to each
               Grant to such Participant for which the Release Date has not
               occurred and for which RSUs have not been issued prior to the
               date of Retirement, the RSUs covered by any such Grant to the
               Participant shall be issued in accordance with and subject to
               paragraph (c) of this Section, as if the Participant continued in
               the employment of Nortel Networks Companies until the Release
               Date.

          (iii)In the event a Participant's employment terminates for any cause
               other than death or Retirement, the RSUs covered by any Grant to
               such Participant with respect to which the Release Date has not
               occurred and for which RSUs have not been issued prior to such
               termination shall be forfeited as of such termination of
               employment with Nortel Networks Companies and any such


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               termination of employment for whatever reason shall not entitle a
               Participant to any compensation for loss of any benefit under the
               Plan.

          (e)  CASH SETTLEMENT ELECTION BY PARTICIPANT

          Except in the event of the occurrence of a Change in Control, a
     Participant may elect, by notice to the Corporation prior to the applicable
     Release Date, to settle the RSUs to be issued under paragraph (c) or (d) in
     the form of a cash payment, and not in the form of RSU Shares. In this
     case, the Participant shall receive a cash payment from the Corporation
     equal to the number of RSUs being settled multiplied by the Share Price.
     For this purpose, the "Share Price" shall be the arithmetic average of the
     closing prices for the Shares for the 20 trading days immediately preceding
     the Release Date on (i) The Toronto Stock Exchange for Canadian-resident
     Participants, or (ii) the New York Stock Exchange for all other
     Participants. Absent such an election and except in the event of the
     occurrence of a Change in Control, the RSUs shall be settled in the form of
     RSU Shares as contemplated in paragraph (c) or (d) of this Section. The
     election provided for in this paragraph (e) shall not be available for any
     Participant who does not, immediately prior to the Release Date, satisfy
     the Share ownership requirements applicable for such Participant as
     prescribed by Nortel Networks from time to time.

          (f)  RIGHT TO RSUs IN THE EVENT OF A CHANGE IN CONTROL

          In the event of the occurrence of a Change in Control, with respect to
     all Grants outstanding on the CIC Date,

               (i)  notwithstanding any other provision of this Plan, any and
                    all requirements that any level of Performance Criteria be
                    achieved for any purpose applicable to such Grants shall be
                    waived as of the CIC Date; and

               (ii) except as may be otherwise provided under the terms of any
                    other employee benefit plan approved by the Board of
                    Directors, each Participant who has received any such Grants
                    shall, on the Release Date which would have applied had the
                    Change in Control not occurred following the second Fiscal
                    Year subsequent to the Fiscal Year in which such Grant was
                    made, be entitled to receive from the Corporation, in full
                    settlement of an RSU covered by a Grant:

                    (x)  a cash payment equal to the Special Value (as defined
                         below) for each Covered RSU (as defined below), if the
                         transaction constituting the Change of Control is
                         accounted for using the purchase method of accounting;
                         or

                    (y)  one CIC Share (as defined below) for each Covered RSU
                         (as defined below), if the transaction constituting the
                         Change of Control is accounted for using the pooling
                         method of accounting or if the

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                         method of accounting for the transaction constituting
                         the Change of Control has not been definitively
                         determined as of the applicable Release Date;

               provided that such Participant is continuously employed by Nortel
               Networks Companies from the Effective Date of such Grant to the
               Release Date.

          The term "Special Value" shall mean an amount with respect to each
     Covered RSU determined as follows:

               (i)  if any Shares are sold as part of the transaction
                    constituting the Change in Control, the Special Value shall
                    equal the weighted average of the prices paid for those
                    Shares by the acquiror, provided that if any portion of the
                    consideration paid for such Shares by the acquiror is paid
                    in property other than cash, the Board of Directors (as
                    constituted immediately prior to the CIC Date) shall
                    determine the fair market value of such property as of the
                    CIC Date for purposes of determining the Special Value under
                    this paragraph (f); and

               (ii) if no Shares are sold as part of the transaction
                    constituting the Change in Control, the Special Value shall
                    equal the arithmetic average of the closing prices for the
                    Shares on The Toronto Stock Exchange for the 20 trading days
                    immediately preceding the CIC Date.

          The term "CIC Share" shall mean the following with respect to each
     Covered RSU:

               (i)  the number of Consideration Shares (as defined below),
                    rounded to the nearest whole number, that is equal to the
                    product of (x) one Share multiplied by (y) the number of
                    Consideration Shares (as defined below) received by the
                    shareholders of Nortel Networks in respect of one Share, if,
                    in connection with the transaction constituting the Change
                    in Control, the shareholders of Nortel Networks exchange
                    their Shares for, or otherwise convert their Shares into,
                    shares of equity securities of the acquiror (or its direct
                    or indirect parent) (such shares of equity securities, the
                    "Consideration Shares"); and

               (ii) in the case of all other transactions constituting the
                    Change in Control, one Share, as adjusted pursuant to
                    Section 7 hereof in connection with such transaction, if
                    applicable;

and, in each case, as further adjusted pursuant to Section 7, if applicable, in
respect of covered events occurring after such Change in Control.


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          The term "Covered RSU" shall mean, with respect to each Grant that is
     outstanding on the CIC Date, the number of RSUs that would have been issued
     to a Participant on the applicable Release Date and settled in the form of
     RSU Shares had (x) the Participant continued in the employment of Nortel
     Networks Companies until such Release Date and (y) all Performance Criteria
     applicable to such Grant (determined without regard to the occurrence of
     the Change in Control) had been met (but not exceeded) during the
     applicable Performance Period.

          (g)  NON-TRANSFERABILITY

          The rights or interests of a Participant under the Plan shall not be
     assignable or transferable, otherwise than by will or the laws governing
     the devolution of property in the event of death and such rights or
     interests shall not be encumbered.

          (h)  RSUs NOT SHARES

          Under no circumstances shall RSUs be considered Shares, nor entitle
     any Participant to the exercise of voting rights, the receipt of dividends
     or the exercise of any other rights attaching to ownership of Shares.

          (i)  RSU SHARES FULLY PAID

          RSU Shares, if issued by Nortel Networks to settle RSUs under the
     Plan, shall be considered fully paid in consideration of past service that
     is no less in value than the fair equivalent of the money Nortel Networks
     would have received if the RSU Shares had been issued for money.

7. EFFECTS OF ALTERATION OF SHARE CAPITAL

          In the event that, following the Stock Split:

          (a)  a dividend shall be declared upon the Shares payable in Shares of
               Nortel Networks;

          (b)  the outstanding Shares shall be changed into or exchanged for
               a different number or kind of shares or other securities of
               Nortel Networks 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, 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 Networks out of the ordinary course of business,



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then, if the Board of Directors shall in its sole discretion determine that such
change equitably requires an adjustment in the number of RSUs with respect to
which Grants may be made pursuant to the Plan but not yet covered by Grants, of
the RSUs then covered by Grants, of the RSUs generally available for Grants
under the Plan and of the RSUs available for Grants under the Plan in any
calendar year, such adjustment shall be made by the Board of Directors and shall
be effective and binding for all purposes.

     No adjustment provided for in this Section shall entitle a Participant to
be allocated a fractional RSU, or receive a fractional RSU Share or any payment
in lieu thereof, and the total adjustment with respect to each RSU shall be
limited accordingly.

8. AMENDMENT AND TERMINATION

     The Board of Directors may from time to time amend, suspend or terminate
the Plan in whole or in part. The Committee may from time to time amend the
terms of Grants made under the Plan, subject to confirmation by the Board of
Directors and the obtaining of any required regulatory or other approvals and,
if any such amendment will materially adversely affect the rights of a
Participant with respect to a Grant, the obtaining of the written consent of
such Participant to such amendment. Notwithstanding the foregoing, (i) the
obtaining of the written consent of any Participant to an amendment which
materially adversely affects the rights of such Participant with respect to a
Grant shall not be required if such amendment is required to comply with
applicable laws, regulations, rules, orders of governmental or regulatory
authorities or the requirements of any stock exchange on which Shares of Nortel
Networks are listed and (ii) no amendment may be made to paragraph (f) of
Section 6 of the Plan or to the defined terms referred to in paragraph (f) of
Section 6 on or after the CIC Date.

9. MISCELLANEOUS PROVISIONS

     Participation in the Plan by a Designated Employee is voluntary. No
employee shall have any claim or right to receive Grants under the Plan, and the
Grant and issuance of RSUs under the Plan shall not be construed as giving a
Participant any right to continue in the employment of Nortel Networks Companies
or affect the right of Nortel Networks Companies to terminate the employment of
any Participant. Unless the Committee determines otherwise, no notice of
termination or payment in lieu thereof shall extend the period of employment for
purposes of this Plan.

     The Committee and/or the Administrator may adopt and apply rules that in
its opinion will ensure that Nortel Networks Companies will be able to comply
with applicable provisions of any federal, provincial, state or local law
relating to the withholding of tax, including on the amount, if any, included in
income of a Participant. Nortel Networks Companies or the Administrator may
withhold from any amount payable to a Participant, either under this Plan, or
otherwise, such amount as may be necessary so as to ensure that Nortel Networks
Companies will be able to comply with applicable provisions of any federal,
provincial, state or local law relating to withholding of tax or other required
deductions, including on the amount, if any, includable in the income of a
Participant. Nortel Networks Companies or the Administrator shall, in this
connection, have the right in its discretion to satisfy any such withholding tax
liability by retaining or acquiring any Shares which would otherwise be


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issued or provided to a Participant hereunder, or withholding any portion of any
cash amount payable to a Participant hereunder. Nortel Networks Companies or the
Administrator shall also have the right to withhold the delivery of any RSUs and
RSU Shares and any cash payment payable to a Participant hereunder unless and
until such Participant pays to Nortel Networks Companies a sum sufficient to
indemnify Nortel Networks Companies for any liability to withhold tax in respect
of the amounts included in the income of such Participant as a result of the
settlement of RSUs under this Plan, to the extent that such tax is not otherwise
being withheld from payments to such Participant by Nortel Networks Companies or
the Administrator.

     Participation in the Plan by any Participant shall be construed as
acceptance of the terms and conditions of the Plan by the Participant and as to
the Participant's agreement to be bound thereby. The Plan shall be construed in
accordance with and governed by the laws of the Province of Ontario.

     In this Plan, whenever the context so requires, the masculine gender
includes the feminine gender and a singular number includes the plural number.

10. EFFECTIVE DATE AND TERM OF THE PLAN

     The Plan originally became effective upon its adoption by the Board of
Directors. Any amendments to the Plan shall become effective upon their adoption
by the Board of Directors. The Plan shall terminate on the date determined by
the Board of Directors pursuant to Section 8 hereof and no Grants may become
effective under the Plan after the date of termination, but such termination
shall not affect any Grants that became effective pursuant to the Plan prior to
such termination.

     The Plan was adopted with immediate effect on January 30, 1997 and was
subsequently amended on April 29, 1999 with immediate effect, on August 19, 1999
effective September 1, 1999, on February 15, 2000 with immediate effect, on
April 27, 2000, effective as of the Restatement Effective Date, and October 26,
2000 effective on November 15, 2000.


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