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Exhibit 10.68
 
 
 CONFIDENTIAL-SPECIAL HANDLING
  
   1.
    
    As used in this Agreement, the term Corporation shall mean Nortel Networks Corporation, its
subsidiaries and affiliates, their successors and assigns, and all of their past and present
officers, directors, employees and agents (in their individual and representative capacities),
in every case, individually and collectively.2.
    
    Effective as of the close of business on December 23, 2005, your active employment
relationship with the Corporation ceased. All previous external responsibilities which you
had were or will be assumed by a person designated by the Corporation, including any
participation in industry or other associations representing the Corporation. You ceased to
act as an officer and/or director of the Corporation and any of the Corporations subsidiaries
and affiliates on December 23, 2005, and the Corporation has taken steps to remove you from
all such positions.3.
    
    You understand and agree that if you have the designation of either Reporting or
Non-Reporting Insider pursuant to Corporate Policy 320.28 of Nortel Networks Corporation
(and under applicable Canadian/US securities legislation for Reporting Insiders), you ceased
to have this designation effective 12:01 a.m. on December 24, 2005. Notwithstanding the fact
that you no longer have this designation, if you are in possession of material non-public
information relating to Nortel Networks, you are prohibited from trading in Nortel Networks
securities (or informing another person of the material non-public information) in accordance
with applicable laws. If you are a




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Mr. Brian McFadden
February 21, 2006
Page 2
    
    (LOGO)
 Reporting Insider, you understand that you were required to amend your insider profile
within 10 days of December 23, 2005 on the Canadian System for Electronic Disclosure by
Insiders (SEDI) to indicate that you were no longer a Reporting Insider of Nortel
Networks. You should contact the Insider Reporting Department at (905) 863-1220 and fax
(905) 863-8524 for assistance in amending the SEDI profile.
 4.
    
    Conditional upon your compliance with all terms and conditions of this Agreement, the
Corporation shall:
 (a)
    
    pay you the sum of US$20,314.92 bi-weekly, converted to Canadian currency in
the same manner as you were paid immediately prior to the termination of your active
employment, less applicable deductions, commencing on December 24, 2005 and
terminating December 28, 2007 (Salary Continuation Period). The first such payment
shall be made on the Corporations next regular payroll date following your execution
of this Agreement and shall include all bi-weekly payments accrued to that date;(b)
    
    pay you, on or before the next regular payroll date following your execution
of this Agreement, a lump sum amount equivalent to ten (10) weeks of base salary
representing all of your current accrued but unused vacation benefit, with no further
vacation accrual subsequent to December 23, 2005;(c)
    
    continue your participation during the Salary Continuation Period, subject to
the provisions of the applicable plans, in group medical, life insurance and dental
insurance, for you and any of the dependents currently covered; you shall continue to
make any required contributions for such benefits at the rates applicable for senior
executive employees occupying positions similar to that you occupied in your most
senior position with the Corporation through the deductions authorized in paragraph
4(a);(d)
    
    continue your accrual of pensionable service during the Salary Continuation
Period, pursuant to the terms of the Nortel Networks Managerial and Non-Negotiated
Pension Plan (the pension plan); your final pension or retirement benefits will be
calculated based on pensionable service you have accrued to the conclusion of the
Salary Continuation Period;(e)
    
    consider you ineligible for consideration for any future grant(s) of stock
options or Restricted Stock Units (RSUs). Stock options and RSUs previously granted
to you will continue to vest during the Salary Continuation Period in




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Mr. Brian McFadden
February 21, 2006
Page 3
    
    (LOGO)
 accordance with the provisions of the plan under which the stock options or RSUs
were granted and the instrument of grant evidencing the grant. Your right, if any,
to exercise any vested Nortel Networks stock options or RSUs after your active
employment relationship with the Corporation ceased (including during the Salary
Continuation Period) will be determined in accordance with the provisions of the
stock option or RSU plan under which the stock options or RSUs were granted and the
instrument of grant evidencing the options or RSUs;(f)
    
    following your completion of the necessary documentation, distribute your
account balance in accordance with the provisions of the Nortel Networks Investment
Plan. Your right to contribute to and participate in the Investment Plan will cease
at the end of the Salary Continuation Period;(g)
    
    make available to you, should you elect, executive outplacement services to
assist you in securing new employment and pay the professional fees for such services
as are reasonably incurred;(h)
    
    with respect to any monies or monetary equivalents to be paid hereunder, in
its reasonable discretion withhold appropriate amounts concerning any and all
applicable federal and provincial taxes; and(i)
    
    pay the cost of personal income tax preparation by a service provider
selected by the Corporation for tax year 2005.
 5.
    
    All Corporation compensation, benefits and perquisites not expressly extended to or preserved
for you pursuant to this Agreement shall be terminated effective 12:01 am., December 24, 2005.6.
    
    Regardless of whether you comply with this Agreement:
 (a)
    
    The Corporation shall indemnify you, and advance any reasonable legal fees
and expenses, to the extent permitted by, and in accordance with, section 124 of the
Canada Business Corporations Act (the CBCA) and the Corporations By-Laws (the
By-Laws). You shall repay such fees and expenses if and to the extent it is
determined that you do not fulfill the conditions set forth in subsection 124(3) of
the CBCA or the By-Laws.




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Mr. Brian McFadden
February 21, 2006
Page 4
    
    (LOGO)
 (b)
    
    Subject to and without limiting the foregoing, it is anticipated that the
Corporations legal counsel will represent you in respect of any civil, criminal,
administrative, investigative (including any internal investigation or independent
review being conducted by the Corporations Board of Directors or a Committee thereof)
or other proceeding in Canada, the United States or other applicable jurisdiction in
which you are involved (including as a witness) because of your association with the
Corporation (hereafter, a Matter). However, in the event that the Corporations
counsel cannot represent you in a Matter because of a conflict, the Corporation agrees
to advance monies to pay your reasonable and actual legal expenses in that Matter
provided you agree that you will not settle the Matter, retain defense counsel or
expert witnesses or consultants, or incur any non-normal course defense costs without
obtaining the Corporations prior consent, which consent will not be unreasonably
withheld.(c)
    
    With respect to the subject matter of (1) the investigation being conducted
by the United States Securities and Exchange Commission (SEC) pursuant to formal
order of private investigation in In the Matter of Nortel Networks Corporation (SEC
File No. H-9799); (2) the related investigation being conducted by the Ontario
Securities Commission; and (3) any other investigation by any law enforcement
authority, governmental body or self-regulatory organization in connection with any
fact, circumstance, situation, transaction, event or other source of liability related
to the subject matter referenced in the immediately foregoing items (1) and (2) or
referenced in the Corporations October 23, 2003 8K filing with the SEC (all of the
foregoing, collectively, the Investigation), you have retained separate counsel
independent of any duty to the Corporation (Latham & Watkins LLP and Fasken Martineau
DuMoulin LLP) and the Corporation will continue to advance monies to pay your
reasonable legal fees and expenses associated with the Investigation and all
proceedings such as may arise from it (collectively, the Investigation Indemnified
Matters). For clarification, Investigation Indemnified Matters include civil
litigation of related subject matter. The Corporation acknowledges that the
requirement set forth in this paragraph not to settle any Matter without the
Corporations prior consent does not apply to any Investigation Indemnified Matters.
The Corporations determination to advance such reasonable legal fees and expenses is
subject to section 124 of the CBCA and the By-Laws and you shall repay such fees and
expenses if it is determined that you do not fulfill the conditions set forth in subsection
124(3) of the CBCA or the By-Laws. The Corporation will also




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Mr. Brian McFadden
February 21, 2006
Page 5
    
    (LOGO)
  7.
    
    With the exception of the Application filed in the Ontario Superior Court of Justice in the
matter of Indiana Electrical Workers Pension Trust Fund IBEW and Laborers Local 100 and 397
Pension Fund v. Nortel Networks Corporation, the Corporation represents that it has no
knowledge as of February 21, 2006 of any claims or legal action in favor of the Corporation
against you in any forum, whether for legal, equitable or administrative relief, and further
represents that it has no present intention to bring any such claims. The Corporation further
agrees that in the event the Corporation brings any such legal action, other than to enforce
the terms of this Agreement, the release of claims given by the Employee in section 13 shall
be null and void.
 8.
    
    You shall reconcile and settle your employee expense account, and any advances made to you by
the Corporation, as soon as possible, but not later than thirty (30) days after your execution
of this Agreement.
 9.
    
    You shall continue to maintain the confidentiality of all of the Corporations trade secrets
and confidential or proprietary commercial, technical or other information; and specifically
you agree that you shall not at any time during or following your employment with the
Corporation, disclose, other than to the Corporations authorized personnel, or otherwise use
for non-Corporation purposes, any confidential or proprietary information (whether or not a
trade secret) relating to an activity of the Corporation.




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Mr. Brian McFadden
February 21, 2006
Page 6
    
    (LOGO)
 10.
    
    You shall make available to the Corporation, upon reasonable notice, advice, assistance and
information that shall include, but not be limited to, offering and explaining evidence,
providing sworn statements, participation in discovery, and trial preparation testimony as may
be deemed necessary by the Corporation concerning the Corporations position in any legal
proceedings involving issues brought against or initiated by the Corporation of which you have knowledge. In the event
it is necessary for you to provide the aforementioned services, then the Corporation shall
reimburse you for authorized, reasonable and documented travel expenses, including, but not
limited to, transportation, lodging and meals; except that the Corporation acknowledges
that attorneys fees and associated expenses are reimbursable if the assistance you provide
is related to the subject matter of the Investigation or any Investigation Indemnified
Matter.
 11.
    
    You have returned to Nortel Networks any and all property of Nortel Networks that was in your
possession and/or subject to your control, whether such material shall be written instruments
or tapes in electronic and/or recorded format.




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Mr. Brian McFadden
February 21, 2006
Page 7
    
    (LOGO)
 disclosed in any relevant private litigation to which Nortel Networks is a party. Also,
the Information may be used by and provided to entities within the Nortel Networks group of
companies and/or Nortel Networks external advisors. In some instances, the recipients of
this Information will be located outside your geographic area. To the extent that the
information contains any personal information, you consent to the collection, transfer and
disclosure of that information by Nortel Networks to Nortel Networks entities, third
parties and regulatory authorities within and outside of your geographic area for the
purposes set out above.The commitments of this section 11 shall not apply to documents previously furnished to
your counsel in connection with the Investigation, and you agree that you and your counsel
shall use such Information solely for the purpose of representing you in connection with
Investigation Indemnified Matters and not for any other purpose, without the express
written consent of the Corporation.12.
    
    You hereby agree that you shall not during the Salary Continuation Period whether on your own
behalf or jointly with others, and whether as an employee, director, principal, agent,
consultant or in any other capacity in competition with the Corporation, be directly or
indirectly (i) employed or engaged in, or (ii) perform services in respect of, or (iii) be
otherwise concerned with:
 (i)
    
    the research into, development, manufacture, supply or marketing of any
product which is of the same or substantially similar type to any product researched,
or developed, or manufactured, or supplied, or marketed by the Corporation during the
twelve months immediately preceding December 23, 2005; or(ii)
    
    the development or provision of any services (including but not limited to
technical and product support, or consultancy or customer services) which are of the
same or substantially similar type to any services provided by the Corporation during
the twelve months immediately preceding December 23, 2005;
 without the prior written consent of the Corporation, which consent shall not be
unreasonably withheld;provided that, the provisions of this paragraph shall apply only in respect of products or
services with which you were either personally concerned or for which you were




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Mr. Brian McFadden
February 21, 2006
Page 8
    
    (LOGO)
 responsible while employed by the Corporation during the twelve months immediately
preceding December 23, 2005; andprovided further that, the provisions of this paragraph shall not restrict you from
accepting employment with a company or other entity that provides products or services that
are in competition with products or services offered by the Corporation, so long as you are
not in the course of such employment during the Salary Continuation Period involved in
activities related to such competitive products or services with which you were either
personally concerned or for which you were responsible while employed by the Corporation
during the twelve months immediately preceding December 23, 2005.You hereby agree that you shall not for the Salary Continuation Period whether on your own
behalf or in conjunction with or, on behalf of any other entity, whether as an employee,
director, principal, agent, consultant or in any other capacity directly or indirectly, for
the purpose of providing or attempting to provide products or services that compete with
products or services offered by the Corporation as of December 23, 2005, (i) solicit or,
(ii) assist in soliciting, or (iii) accept, or (iv) facilitate the acceptance of, or (v)
deal with, customers or prospective customers:
 (i)
    
    with whom you had personal contact or dealings on behalf of the Corporation
during the twelve months immediately preceding December 23, 2005; or(ii)
    
    for whom you were, in a client-management capacity on behalf of the
Corporation, directly responsible during the twelve months immediately preceding
December 23, 2005,
 without the prior written consent of the Corporation, which consent shall not be
unreasonably withheld.You hereby agree that, you will not for the Salary Continuation Period either on your own
account or in conjunction with or on behalf of any other person, company, business entity,
or other organization and whether as an employee, principal, agent, consultant or in any
other capacity directly or indirectly (i) induce, or (ii) solicit, or (iii) entice or (iv)
procure, any person who is an employee of the Corporation to leave the Corporations or any
associated companys employment (as applicable) where that person is an employee of the
Corporation on December 23, 2005;




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Mr. Brian McFadden
February 21, 2006
Page 9
    
    (LOGO)
 provided that, this provision shall neither (i) prohibit you from hiring, or causing an
organization for which you perform services to hire, any person who initially approaches
you and/or such organization to inquire about employment without having been solicited by
you to do so, nor (ii) be construed to apply to the placement of general advertisements for
employment on websites, in print publications or in other appropriate media.13.
    
    In consideration of the monies and other benefits to be provided to you as set forth herein,
you hereby fully and completely release the Corporation, its subsidiaries and affiliates, and
their respective directors, officers and employees, to the extent permitted by law, from any
and all real or pretended claims, causes of actions, rights, damages or injuries of any nature
whatsoever you may have had or now have, whether known or unknown, (except for promises and
commitments contained or preserved herein), arising from or connected with your employment
with the Corporation or the termination thereof, including any and all such claims, causes of
action, rights, damages or injuries arising under any statute, including, without limitation,
the Labour Standards Act (An Act Respecting Labour Standards (Quebec)) or at common law.
Furthermore, you understand that this release shall be binding upon you and your heirs,
administrators, representatives, executors, successors, and assigns and its enforceability
shall not be challenged.You acknowledge that you have read this letter and that you understand all of its terms and
have executed it voluntarily with full knowledge of its significance. Further, you
acknowledge that you have had an adequate opportunity to review and consider the
arrangements, including at your discretion, the right to discuss this Agreement with legal
counsel of your choice. Finally, you acknowledge that you understand you are hereby
granting to the Corporation a full and final release as set forth above.14.
    
    This Agreement constitutes the entire understanding of the parties with respect to your
employment, including the cessation of your employment, and there are no promises,
understandings or representations other than those expressly set forth or preserved herein.
This Agreement may be modified only with a written instrument duly executed by you and the
Corporation.15.
    
    This Agreement shall be governed by the laws of Ontario, Canada without regard to any
provisions concerning conflict of laws. This Agreement may be delivered by facsimile and
executed in counterparts, all of which, taken together, shall constitute one and the same
original instrument.




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Mr. Brian McFadden
February 21, 2006
Page 10
    
    (LOGO)
 16.
    
    The parties agree that should any provision of this Agreement be declared or be determined by
any court to be illegal or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and said illegal or invalid part, term, or provision shall be
deemed not to be a part of this Agreement.17.
    
    Nothing in this Agreement shall be construed to prevent the Corporation from providing you or
your prospective employer, as applicable, with an appropriate positive reference or letter of
recommendation relating to your employment with the Corporation.18.
    
    Nothing in this Agreement shall affect the rights and obligations of any of the parties to
the Escrow Agreement, dated March 1, 2005, by and among the signatory Officers, Nortel
Networks Corporation, and Computershare Trust Company of Canada.
    
 /s/ B. McFaddenBrian McFaddenFebruary 22, 2006Date