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Exhibit 10.1 Nortel Networks Corporation
8200 Dixie Road, Suite 100
Brampton, Ontario L6T 5P6 January 10, 2005 Mr. Lynton (Red) Wilson, Chairman of the Board
Nortel Networks Corporation
8200 Dixie Road, Suite 100
Brampton, Ontario L6T 5P6
Dear Red: As the core executive leadership team responsible for management of Nortel Networks
Corporation (Nortel or the Company), we are writing to confirm our oral undertakings made in
anticipation of Nortels forthcoming restatement of financial results. We are aware that Nortels Audit Committee inquiry has identified improper accounting
activities at the Company. While we did not engage in improper conduct ourselves, we share the
Boards deep disappointment in these actions and
events  and we are determined to make it clear to
our employees, our customers, our investors and others that such activities are unacceptable to us. Accordingly, as a matter of corporate leadership and integrity, the Companys senior
management affirms our voluntary, unilateral and unconditional undertakings to do the following:
(1) we will pay to Nortel an amount equal to our respective Return to Profitability (RTP) bonus
paid to us in 2003 (net of taxes deducted at the source) regardless whether the profitability
metrics associated with the RTP were met on a restated basis; and (2) we do not intend to accept,
and accordingly disclaim, any potential award to us of either the third or fourth tranches of 2003
Restricted Stock Units (regardless whether applicable financial targets for these bonuses were
achieved). The specific amount to be paid by each of us, respectively, is set forth on Schedule A
attached to this letter; further mechanics associated with this undertaking (and as we have
discussed) are set forth on Schedule B attached to this letter.




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It is our hope that our undertakings, along with the actions being taken by the Company to
improve internal controls and to affirm Nortels commitment to good corporate governance from the
top down, will help to restore the Companys reputation and will promote confidence in Nortel among
our employees, our customers, our investors and the general market. Very truly yours, /s/ Pascal Debon
    
    /s/ John GiamatteoPascal Debon
    
    John Giamatteo/s/ Malcolm Collins
    
    /s/ Steven PuseyMalcolm Collins
    
    Steven Pusey/s/ Brian McFadden
    
    /s/ Chahram BolouriBrian McFadden
    
    Chahram Bolouri/s/ Susan L. Spradley
    
    /s/ Robert MaoSusan L. Spradley
    
    Robert Mao/s/ Nicholas DeRoma
    
    /s/ Greg MumfordNicholas DeRoma
    
    Greg Mumford/s/ William Donovan
    
    /s/ Dion JoannouWilliam Donovan
    
    Dion Joannou




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Schedule A Name
    
    RTP Amounts (Net)BOLOURI, Chahram
    
    C $891,697COLLINS, Malcolm
    
    GBP £395,409DEBON, Pascal
    
    US $1,078,963DeROMA, Nicholas
    
    C $953,747DONOVAN, Bill
    
    US $640,271GIAMATTEO, John
    
    US $259,875JOANNOU, Dion
    
    US $328,412MAO, Robert
    
    US $627,500McFADDEN, Brian
    
    C $899,630MUMFORD, Greg
    
    C $921,500PUSEY, Steve
    
    GBP £473,173SPRADLEY, Sue
    
    US $967,694




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Schedule B  1.
    I will pay my RTP Amount either in cash through regular or periodic deductions from my
payroll deposits or otherwise) or by the surrender to the Company for cancellation, without
return of capital, of Nortel Networks Corporation common shares (NNC Shares) or any
combination of cash or NNC Shares. If I do not pay my first scheduled payment in cash, I will
make such first scheduled payment in NNC Shares as provided in paragraph 4 below.2.
    I may pay all or any portion of my RTP Amount in advance of the scheduled payment dates. All
pre-payments will be applied against my next succeeding scheduled payment or payments.3.
    I understand that I am only permitted to surrender my NNC Shares during open Window Periods
under Nortel Networks Corporate Procedure No. 320.28  Use of Undisclosed Information
(Procedure 320.28) and only in circumstances when I am otherwise permitted to trade in
securities of Nortel in accordance with (i) Procedure No. 320.28, (ii) applicable law, and
(ii) any applicable orders of regulatory authorities having jurisdiction. I understand that I
am barred from trading in Nortel securities until notified by the Company to the contrary.4.
    Except as otherwise provided below, I shall pay my RTP Amount in six equal scheduled payments
on February 15 and August 15 of each year, commencing on February 15, 2005 and ending on
August 15,2007. If I choose to make any scheduled payment in NNC Shares, such payment will be
made on the first business day of the next Window Period immediately following the
applicable scheduled payment date rather than on such scheduled payment date. If I choose to
make my first scheduled payment using NNC Shares and the trading prohibitions referred to in
paragraph 3 above are still in effect, I shall make such payment on the first business day of
the first open Window Period immediately following the termination or cessation of all such
trading prohibitions, together with any other payments scheduled to be made on such date. I
understand that the Company will notify me when there is an open Window Period and I am able
to surrender my NNC Shares.5.
    For the purpose of facilitating the voluntary payments of the RTP Amount, unless I have
already prepaid the entire RTP Amount under paragraph 2 above or entered into an alternative
arrangement contemplated by paragraph 9 below, I will enter into appropriate escrow
arrangements as soon as reasonably practicable. I intend to deposit, with an escrow agent, NNC
Shares having a value, determined in accordance with paragraph 7 below as of the date of the
escrow deposit, of not less than my RTP Amount. The escrow arrangements described in this
paragraph 5 will be subject to compliance with all applicable legal requirements and, to the
extent necessary, to the receipt of all approvals, consents or orders from governmental or
regulatory authorities, which the Company and I will cooperate in obtaining.6.
    Except where I am making my first payment in NNC shares, as contemplated in paragraph 4
above, if I do not make a scheduled payment on a scheduled payment date




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and have not otherwise pre-paid such amount, I will be deemed to have irrevocably instructed
the escrow agent to pay such amount to the Company by delivery of the applicable number of
NNC Shares on the first business day of the Window Period immediately following such
scheduled payment date pursuant to the terms of the escrow arrangements.7.
    If I deliver, or instruct or am deemed to have instructed the escrow agent to deliver on my
behalf, NNC Shares to be surrendered for cancellation as payment:  (a)
    on any day that is not a business day or before 10:00 a.m. (Toronto time) on
any business day, such shares will be valued at the closing price (as reported by the
New York Stock Exchange) on the most recent trading day prior to the day of delivery by
me of the NNC Shares to the Corporate Secretary of Nortel or to the day that I deliver
or am deemed to have delivered the instructions to the escrow agent, as the case may
be, for which a closing price has been reported; or(b)
    after 10:00 a.m. (Toronto time) on any business day, such shares will be valued
at the closing price (reported by the applicable stock exchange referred to in
paragraph 7 (a) above) on such day, or if there is no closing price reported for such
day, at the closing price reported for the next succeeding day for which a closing
price is reported.  8.
    If, after I have paid my RTP Amount in full, any of my NNC
Shares remain in escrow, such shares will be returned to me. If, after delivery to the Company of all NNC Shares held in
escrow on my behalf pursuant to the escrow arrangements, there remains any portion of my RTP
Amount that has not been paid, I will continue to make payments hereunder until my RTP Amount
has been paid in full.9.
    As an alternative to the foregoing arrangements, I may arrange with the Company to make all
of my payments on a pre-arranged basis using NNC Shares, valued in accordance with paragraph 7
above and deposited pursuant to appropriate escrow arrangements acceptable to the Company,
such payments to be made on the first business day of the applicable Window Period
immediately following the scheduled payment dates referred to in paragraph 4 above.10.
    My undertakings are voluntary, unilateral and unconditional, and I intend that payment of my
RTP Amount will survive my departure from Nortel or any of its subsidiaries, for any reason. I
do not expect that this voluntary undertaking will survive my death or permanent disability.
This attached letter and schedules, together with the applicable escrow arrangements, set
forth my undertaking concerning the payment of my RTP Amount.11.
    I will assume responsibility to consult my own tax advisor as to the applicable income or
transfer tax consequences to me of the matters addressed in this letter and attached schedule,
including surrendering NNC Shares to the Company for cancellation.