Document:

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                                                                    Exhibit 10.3

                             NORTEL NETWORKS LIMITED
                        MEETING OF THE BOARD OF DIRECTORS
                                JANUARY 24, 2002

                    ---------------------------------------

Directors' Remuneration

     RESOLVED, That, commencing with effect on January 1, 2002, each Director of
the Corporation who is not a salaried employee of the Corporation, Nortel
Networks Corporation ("NNC") or any of its or their subsidiaries (each a "Nortel
Networks Company") and Mr. J.A. Roth (who, for greater certainty is a salaried
employee of the Corporation and would not otherwise receive compensation for
serving as a Director of the Corporation), shall receive an annual Board
retainer of US$50,000;

     RESOLVED, That, effective January 1, 2002, each member of a Board Committee
who is not a salaried employee of a Nortel Networks Company and Mr. J.A. Roth,
shall be paid remuneration for services, as a member of each Board Committee on
which the member sits a retainer fee at the rate of US$12,500 per annum; except
that a retainer fee at the rate of US$6,250 per annum shall be paid to any
member of a Board Committee who is also a member of an identical committee of
the NNC Board of Directors;

     RESOLVED, That, effective January 1, 2002, any Chairman of a Board
Committee who is not a salaried employee of a Nortel Networks Company and Mr.
J.A. Roth, shall be paid, in addition to the member's retainer, a retainer fee
at the rate of US$7,500 per annum, except that an additional retainer fee at the
rate of US$3,750 per annum shall be paid to any Chairman of a Board Committee
who is also chairman of an identical committee of the NNC Board of Directors;

     RESOLVED, That the Directors entitled to the remuneration provided for in
the preceding resolutions shall be reimbursed for the reasonable travel and
living expenses properly incurred by them in attending any meeting of the Board
of Directors or its Committees;

     RESOLVED, That the remuneration provided for in these resolutions shall be
paid quarterly, in arrears, in U.S. currency or, at the request of a Director,
in the Canadian dollar equivalent thereof;

     RESOLVED, That, for greater certainty, Directors shall not be paid an
additional fee for attendance at Board or Committee meetings;<PAGE>

                                                                    EXHIBIT 10.4

                                                               SEPTEMBER 1, 1999

                           NORTEL NETWORKS CORPORATION
                               EXECUTIVE RETENTION
                              AND TERMINATION PLAN

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                           NORTEL NETWORKS CORPORATION

                    EXECUTIVE RETENTION AND TERMINATION PLAN

         1.       PURPOSE OF THE PLAN

         1.1 The Corporation relies upon the experience and expertise of the
Specified Executives to manage the business of Nortel Networks objectively and
for the benefit of the Corporation and its shareholders.

         1.2 The Corporation recognizes that, in view of the existing market
conditions for the shares of publicly-traded companies involved in the
telecommunications business as well as the existing distribution and ownership
of the outstanding shares of the Corporation, there is a possibility of a Change
in Control.

         1.3 To reinforce and encourage the continued attention and commitment
of the Specified Executives to their duties without distraction in the face of
the potentially disturbing circumstances arising from the possibility of a
Change in Control, this Plan has been established to provide certain
arrangements for Specified Executives whose employment with Nortel Networks is
terminated as a result of a Change in Control.

         2.       DEFINITIONS

For the purpose of the Plan, the terms contained in this Article shall have the
following meanings:

"AFFILIATED COMPANIES" shall have the meaning ascribed to the term "affiliated
bodies corporate" in Subsection 2(2) of the Canada Business Corporations Act.

"AFFILIATED ENTITIES" means (a) "affiliated companies" and (b) such other
companies, partnerships or other legal entities as the Nortel Networks Board may
determine for the purposes of any of the provisions of the Plan.

"ANNUAL SALARY" means, with respect to a Specified Executive, the greater of (A)
the annual base salary rate paid to the Specified Executive by or on behalf of
Nortel Networks immediately prior to the CIC Date and (B) the annual base salary
rate paid to the Specified Executive immediately prior to his or her Termination
Date; provided, however, if the Specified Executive incurs a Termination Due to
a Change in Control as a result of his or her resignation for Good Reason due to
a reduction in such Specified Executive's annual salary rate, the applicable
annual base salary rate of such Specified Executive for purposes of this
Paragraph (B) shall be the annual base salary rate in effect immediately prior
to any such reduction.

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                                     - 2 -

"AUDITOR" means the independent auditor of the Corporation as appointed by the
Corporation's shareholders or by the Nortel Networks Board from time to time.

"BAY NETWORKS STOCK OPTION PLAN" means the Bay Networks, Inc. 1994 Stock Option
Plan, as amended from time to time prior to the CIC Date.

"CANADIAN EXECUTIVE" means a Specified Executive who is a resident of Canada for
the purposes of the Income Tax Act (Canada), as amended.

"CANADIAN TRUST AGREEMENT" has the meaning given to that term in Section 3.1.

"CANADIAN TRUSTEE" means the trustee under the Canadian Trust Agreement.

"CAUSE" means, for the purposes of this Plan only, a Specified Executive's:

         (i)      conviction (including any pleas of guilty or nolo contendere)
                  of a criminal offence or felony that involves fraud in
                  connection with the performance by the Specified Executive of
                  the duties of the Specified Executive's employment with Nortel
                  Networks or moral turpitude;

         (ii)     the willful and continual failure of the Specified Executive
                  substantially to perform the duties of the Specified
                  Executive's employment with Nortel Networks (other than any
                  such failure due to the Specified Executive's physical or
                  mental illness), after a written demand for substantial
                  performance has been delivered to the Specified Executive by
                  the Nortel Networks Board, and a reasonable opportunity to
                  cure has been given to the Specified Executive by the Nortel
                  Networks Board;

         (iii)    material violation of any written agreement between the
                  Specified Executive and Nortel Networks not to disclose any
                  confidential or proprietary information of Nortel Networks or
                  confidential or proprietary information of a third person in
                  respect of which Nortel Networks is under a written
                  confidentiality obligation to such third party of which the
                  Specified Executive has received prior written notice; or

         (iv)     fraud or willful and serious misconduct in connection with the
                  performance of the Specified Executive's duties for Nortel
                  Networks, which, in the case of any such misconduct, has
                  caused direct material injury to Nortel Networks.

"CEO" means the individual serving as chief executive officer of the Corporation
at any time during the period which is thirty (30) days prior to the CIC Date.

"CHANGE IN CONTROL" or "CIC" means the occurrence of any of the events described
in Schedule A hereto.

"CIC DATE" means the date on which the Change in Control occurs.

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"COMMITTEE" means the management resources and compensation committee of the
Nortel Networks Board or such other committee of the Nortel Networks Board as
the Nortel Networks Board may designate from time to time as the "Committee" for
the purposes of this Plan, provided however, that the Committee may, in its
discretion, delegate in writing such of its powers, rights and duties under the
Plan, in whole or in part, to such committee, person or persons as it may
determine, from time to time, on written terms and conditions as it may
determine.

"CORPORATION" means Nortel Networks Corporation and any successor thereto,
including, without limitation, any successor to Nortel Networks Corporation
following a Change in Control.

"DESIGNATED BENEFICIARY" of any Specified Executive means, with respect to any
Entitlement available to such Specified Executive, the person designated by the
Specified Executive as his or her beneficiary for the purposes of any plan or
arrangement governing such Entitlement or, if the Specified Executive has not
made such designation with respect to such Entitlement (or no plan or
arrangement governs such Entitlement), then the "DESIGNATED BENEFICIARY" of such
Specified Executive means the estate of the Specified Executive for the purpose
of such Entitlement. For the purposes of this Plan, "ESTATE" shall include only
the executors or administrators of such estate or any person or persons who
shall have acquired the right to the applicable Entitlement directly from the
Specified Executive by bequest or inheritance.

"ENTITLEMENTS" means the payments, benefits, rights and other entitlements to be
paid or provided to a Specified Executive pursuant to Article 4 of this Plan.

"EXCLUDED REPLACEMENT OPTIONS" means the replacement options covered by a grant
to a Specified Executive under the key contributor program of the Stock Option
Plan if, on the Termination Date: (i) all of the original options granted to
such Specified Executive in connection with the grant of such replacement
options have not been exercised; or (ii) such original options have been
exercised but the replacement options could never become exercisable due to such
Specified Executive's failure to continue to own beneficially the required
number of common shares that were acquired on the exercise of the original
options, determined in accordance with the terms of the grant of the replacement
options.

"GOOD REASON" means the occurrence of any of the following condition(s) without
the prior written consent of the Specified Executive which condition(s) remain
in effect ten (10) days after written notification by the Specified Executive to
the SVP Human Resources:

         (i)      the requirement that the Specified Executive relocate his or
                  her office or home base to a location that is outside a 100
                  kilometre radius of his or her office or home base immediately
                  prior to the CIC Date; or

         (ii)     the assignment to the Specified Executive of a set of
                  responsibilities and/or the employment or continued employment
                  of the Specified Executive on terms and conditions that are
                  not the Substantial Equivalent of such Specified Executive's
                  set of responsibilities and/or the terms and conditions of
                  employment in effect immediately prior to the CIC Date;

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                                     - 4 -

provided that a "Good Reason" shall not be deemed to have occurred until the end
of such ten (10) day period.

"INTERNATIONAL EXECUTIVES" means Specified Executives other than Canadian
Executives.

"NORTEL NETWORKS BOARD" means the board of directors of the Corporation.

"NORTEL NETWORKS" means the Corporation and its affiliated entities.

"OPTION" means an option and related stock appreciation right, if any, granted
pursuant to any stock option plan maintained or assumed by the Corporation for
the benefit of the employees of Nortel Networks but does not include Excluded
Replacement Options.

"PAYMENT DATE" means, with respect to a Specified Executive, the later of (i)
his or her Termination Date and (ii) the CIC Date.

"PERSON" includes any individual, legal or personal representative, corporation,
company, partnership, syndicate, unincorporated association, trust, trustee,
government body, regulatory authority or other entity, howsoever designated or
constituted.

"PLAN" means the Nortel Networks Corporation Executive Retention and Termination
Plan as set forth herein and as may be amended from time to time and "HERETO",
"HEREIN", "HEREOF", "HEREWITH" and similar terms refer to this Plan in its
entirety, unless a specific provision is specified.

"RSU PLAN" means the Nortel Networks Corporation Restricted Stock Unit Plan, as
amended from time to time prior to the CIC Date.

"SPECIFIED EXECUTIVE" means each of (i) the CEO, (ii) each Tier I Executive
(iii) each Tier II Executive and (iv) any other individual whose employment with
Nortel Networks is terminated more than thirty (30) days prior to the CIC Date
at the direction of any Person who acquires control of the Corporation, within
the meaning of Paragraph (i) of the definition of the term "Termination Due to a
Change in Control," if, immediately prior to such termination of such
individual's employment, such individual is identified in the records of the
Plan maintained by the Corporation as a Tier I Executive or a Tier II Executive
or is serving in the position of chief executive officer.

"STOCK OPTION PLAN" means the Nortel Networks Corporation 1986 Stock Option Plan
As Amended And Restated, as amended from time to time prior to the CIC Date.

"SUBSTANTIAL EQUIVALENT" means, with respect to a Specified Executive:

         (i)      a set of responsibilities that are (x) commensurate with such
                  Specified Executive's professional training and experience and
                  (y) in all material respects, equivalent to or better than the
                  set of responsibilities of such Specified Executive
                  immediately prior to the CIC Date; and
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         (ii)     terms and conditions of employment that (x) include an annual
                  base salary rate and annual cash incentive compensation
                  opportunity that are each equal to or greater than such
                  Specified Executive's annual base salary rate and annual cash
                  incentive compensation opportunity in effect immediately prior
                  to the CIC Date, (y) include overall additional compensation
                  and benefits that are substantially equivalent to or better
                  than the additional compensation and benefits of the Specified
                  Executive immediately prior to the CIC Date, and (z) are
                  otherwise substantially equivalent to or better than the terms
                  and conditions of such Specified Executive in effect
                  immediately prior to the CIC Date.

"SVP HUMAN RESOURCES" means the individual holding the position of senior
vice-president responsible for human resources at the Corporation at the
applicable time.

"SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN" means the Nortel Networks Corporation
Supplementary Executive Retirement Plan, as amended from time to time prior to
the CIC Date.

"TERMINATION DATE" means the actual date of a Specified Executive's termination
of employment with Nortel Networks.

"TERMINATION DUE TO CHANGE IN CONTROL" means:

         (i)      any termination of the employment of the Specified Executive
                  by Nortel Networks during the period commencing thirty (30)
                  days prior to the CIC Date and ending on the date which is
                  twenty-four (24) months after the CIC Date, provided however
                  that a termination of the employment of a Specified Executive
                  by Nortel Networks prior to such 30 day period at the
                  direction of the Person who acquires control of the
                  Corporation in the Change in Control, shall be deemed to be a
                  Termination Due to Change in Control; or

         (ii)     any resignation for Good Reason within twenty-four (24) months
                  after the CIC Date by a Specified Executive provided that such
                  Specified Executive resigns no later than thirty (30) days
                  after a Good Reason has occurred with respect to such
                  Specified Executive.

         Notwithstanding the foregoing, "Termination Due to Change in Control"
         shall not include any termination of the employment of the Specified
         Executive: (1) by Nortel Networks for Cause; or (2) pursuant to an
         agreement to resign or retire entered into by Nortel Networks and the
         Specified Executive prior to the CIC Date.

"TIER I EXECUTIVES" means the executives determined by the Committee from time
to time prior to the CIC Date to be Tier I Executives and identified as such in
the records of the Plan maintained by the Corporation at any time during the
period which is thirty (30) days prior to the CIC Date.

"TIER II EXECUTIVES" means the executives determined by the Committee from time
to time prior to the CIC Date to be Tier II Executives and identified as such in
the records of the Plan maintained by the Corporation at any time during the
period which is thirty (30) days prior to the CIC Date.

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"U.S. TRUST" has the meaning given to that term in Section 3.2.

"U.S. TRUST AGREEMENT" has the meaning given to that term in Section 3.2.

"U.S. TRUSTEE" means the trustee under the U.S. Trust Agreement.

"VOTING SHARES" has the meaning given to that term in Schedule A.

         3.       ESTABLISHMENT OF TRUST

         3.1 Source of Payments to Canadian Executives - The Corporation shall,
or shall cause one or more of its affiliated entities to, enter into an
agreement or agreements (collectively, the "Canadian Trust Agreement") pursuant
to which the Canadian Trustee will have available to it, for the benefit of the
Canadian Executives, the funds necessary to fund the Entitlements available to
the Canadian Executives. Under the terms of the Canadian Trust Agreement, the
Corporation shall be required, immediately prior to the CIC Date or, if it is
not known in advance that the Change in Control will occur, immediately
following the Corporation's becoming aware of the occurrence a Change in
Control, to contribute, or to cause one or more of its affiliated entities to
contribute, to the trust or trusts an amount equal to 200% of the fee payable to
acquire a letter of credit for an amount equal to the estimated maximum
liability of Nortel Networks for any and all Entitlements that would arise under
the Plan if all Canadian Executives experienced a Termination Due to Change in
Control on the earlier of the Specified Executive's Termination Date or the CIC
Date, as calculated by the Auditor. If neither the Corporation nor any of its
affiliated entities satisfies the obligations of the Corporation hereunder to
pay or provide the Entitlements to a Canadian Executive within the time set out
herein, such Canadian Executive shall be entitled to deliver a notice to the
Canadian Trustee stating that such obligation or obligations have not been
satisfied and the Canadian Trustee shall thereupon satisfy such obligation or
obligations to such Canadian Executive from the assets of the Canadian Trust,
subject to and in accordance with the Canadian Trust Agreement, unless the
Canadian Trustee shall be directed by an arbitrator duly appointed pursuant to
Section 6 hereof or a court of competent jurisdiction not to satisfy such
obligation or obligations.

         3.2 Source of Payments to International Executives - The Corporation
shall, or shall cause one or more of its affiliated entities to, pay the
Entitlements to which International Executives are entitled under the terms of
this Plan to the International Executives out of the general corporate assets of
the Corporation and/or the applicable affiliated entities of the Corporation,
and no assets of the Corporation or any such affiliated entities shall be
designated to fund such Entitlements provided herein or deemed to be assets to
be used for that purpose, it being understood that this Plan is an unfunded plan
with respect to the International Executives. This Plan does not confer on any
International Executive or his or her Designated Beneficiary a beneficial
interest in any asset of Nortel Networks. Notwithstanding the foregoing, the
Corporation shall, or shall cause one or more of its affiliated entities to,
establish a trust or trusts (collectively, the "U.S. Trust") pursuant to a trust
agreement or agreements (collectively, the "U.S. Trust Agreement") and the
Corporation shall make contributions thereto or cause contributions to be made
thereto for the purpose of providing for the Entitlements to International
Executives hereunder. Immediately prior to the CIC Date or, if it is not known
in advance that the Change in Control will occur, immediately following the
Corporation's

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becoming aware of the occurrence a Change in Control, the Corporation shall, or
shall cause one or more of its affiliated entities to, contribute to the U.S.
Trust an amount in cash equal to the excess of (i) the estimated maximum
liability of Nortel Networks for any and all Entitlements that would arise if
all International Executives experienced a Termination Due to a Change in
Control on the earlier of the Specified Executive's Termination Date or the CIC
Date, as calculated by the Auditor, over (ii) the aggregate amount then held in
the U.S. Trust. The U.S. Trust Agreement shall contain procedures to the
following effect:

                  (a) In the event of the insolvency of the Corporation or other
                  affiliated entity of the Corporation that has established the
                  applicable U.S. Trust Agreement (the party that has
                  established such U.S. Trust Agreement, the "Grantor"), the
                  trust fund will be available to pay the claims of any creditor
                  of the Grantor to which a distribution may be made in
                  accordance with the bankruptcy laws of the jurisdiction to
                  which the Grantor is subject. The Grantor shall be deemed to
                  be "insolvent" if the Grantor is subject to a pending
                  proceeding as a debtor under the bankruptcy laws of such
                  applicable jurisdiction. In the event the Grantor becomes
                  insolvent, the Nortel Networks Board shall notify the U.S.
                  Trustee of the event as soon as practicable. Upon receipt of
                  such notice, or if the U.S. Trustee receives other written
                  allegations of the Grantor`s insolvency, the U.S. Trustee
                  shall cease making payments to International Executives from
                  the trust fund, shall hold the trust fund for the benefit of
                  the Grantor's creditors, and shall take such steps that are
                  necessary to determine within thirty (30) days whether the
                  Grantor is insolvent. In the case of the U.S. Trustee's actual
                  knowledge of or other determination of the Grantor's
                  insolvency, the U.S. Trustee will deliver assets of the trust
                  fund to satisfy claims of the Grantor's creditors as directed
                  by a court of competent jurisdiction; and

                  (b) The U.S. Trustee shall resume payments to the
                  International Executive or in the event of the death of the
                  International Executive, his or her Designated Beneficiary, as
                  applicable, under the U.S. Trust Agreement only after the U.S.
                  Trustee has determined that the Grantor is not insolvent (or
                  is no longer insolvent, if the U.S. Trustee had previously
                  determined the Grantor to be insolvent) or upon receipt of an
                  order of a court of competent jurisdiction requiring such
                  payment. If the U.S. Trustee discontinues payment pursuant to
                  Subsection 3.2(a) and subsequently resumes such payment, the
                  first payment to be made to each International Executive or in
                  the event of the death of the International Executive, his or
                  her Designated Beneficiary, as applicable, following such
                  discontinuance shall include an aggregate amount equal to the
                  excess of (i) the payments which would have been made to such
                  International Executive or Designated Beneficiary during any
                  such period of discontinuance, plus interest on such amount at
                  a rate equivalent to the net rate of return earned by the
                  trust during the period of such discontinuance, over (ii) the
                  sum of all payments actually made to such International
                  Executive or Designated Beneficiary during such period of
                  discontinuance plus interest on such payments at a rate
                  equivalent to the net rate of return earned by the trust
                  during the period of discontinuance.

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                                     - 8 -

                   Upon the Termination Due to Change in Control of any
International Executive, the Corporation shall and such International Executive
shall be entitled to deliver a notice to the U.S. Trustee stating that such
Termination Due to Change in Control has occurred. Upon receipt of any such
notice from the Corporation and/or an International Executive, the U.S. Trustee
shall commence paying the Entitlements due to such International Executive in
accordance with Section 4.1, 4.2 and 4.3 hereof, subject to and in accordance
with the U.S. Trust Agreement, unless the U.S. Trustee shall be directed by an
arbitrator duly appointed pursuant to Section 6 hereof or a court of competent
jurisdiction not to make such payments.

         3.3 Alternative Source of Payments. Notwithstanding Sections 3.1 and
3.2 hereof, effective no later than 30 days prior to the CIC Date and to
maximize the tax benefits available to the Corporation in the various
jurisdictions in which Specified Executives reside or are employed, the
Corporation may provide for alternative arrangements pursuant to which the
Entitlements hereunder shall be paid to Specified Executives, provided that any
such alternative arrangements must protect the rights of the affected Specified
Executives at least to the same extent such rights would have been protected had
the Entitlements been paid in accordance with Section 3.1 or 3.2, whichever is
applicable.

         4.       OBLIGATIONS OF THE CORPORATION TO SPECIFIED EXECUTIVES

         4.1 Entitlements - In the event of a Specified Executive's Termination
Due to Change in Control, the Specified Executive shall be entitled to the
following:

                  (a) within thirty (30) days after the Payment Date, payment to
                  or to the order of the Specified Executive in cash or
                  certified cheque of a lump sum amount equal to the Specified
                  Executive's accrued but unpaid salary for the period to and
                  including the Termination Date, together with an amount equal
                  to the cash value of any accrued but unused vacation
                  entitlement to the Termination Date;

                  (b) within thirty (30) days of submission by the Specified
                  Executive of proper expense reports, reimbursement of the
                  Specified Executive in accordance with the Corporation's
                  expense reimbursement policy for all expenses incurred by the
                  Specified Executive in connection with the business of Nortel
                  Networks prior to the Termination Date;

                  (c) within one hundred and twenty (120) days after the Payment
                  Date, payment to or to the order of the Specified Executive in
                  cash or certified cheque of a lump sum equal to the sum of the
                  following amounts:

                           (i) an amount equal to three times the CEO's Annual
                           Salary in the case of the CEO, two times the
                           Specified Executive's Annual Salary in the case of a
                           Tier I Executive and 1.5 times the Specified
                           Executive's Annual Salary in the case of a Tier II
                           Executive; and

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                                     - 9 -

                           (ii) an amount equal to 100% of the annual bonus that
                           the Specified Executive would have been entitled to
                           receive pursuant to the Corporation's executive
                           management incentive award plan(s) for the fiscal
                           year of the Corporation which includes the Specified
                           Executive's Termination Date had the Specified
                           Executive remained in the continuous employment of
                           Nortel Networks until at least the last day of such
                           fiscal year and as if the Corporation, the applicable
                           business unit and the Specified Executive had each
                           achieved 100% of their respective performance
                           objectives, if any, established by the Corporation
                           for such fiscal year, otherwise fulfilled all other
                           relevant eligibility criteria and with any other
                           applicable factor set at mid-range, after deduction
                           for any mid-year payments in respect of such plan(s)
                           for such fiscal year paid by Nortel Networks to the
                           Specified Executive prior to the Termination Date;

                  (d) continuation of any loans from Nortel Networks to the
                  Specified Executive, without modification or amendment;

                  (e) out placement counseling services of a firm chosen from
                  time to time by the Specified Executive, for a period not to
                  exceed 18 months after the Payment Date;

                  (f) maintenance of coverage for the maximum extended reporting
                  period available under any directors' and officers' liability
                  insurance that is in place on the Termination Date in the
                  event that such policy is cancelled or not renewed;

                  (g) during the period ending on the three-year anniversary in
                  the case of the CEO, the two-year anniversary in the case of a
                  Tier I Executive and the eighteen-month anniversary in the
                  case of a Tier II Executive of the Specified Executive's
                  Termination Date (such applicable period, the "Continuation
                  Period"), provision of continued coverage under each of the
                  Nortel Network's life insurance, medical, dental, health and
                  disability plans or arrangements in which the Specified
                  Executive was entitled to participate immediately prior to the
                  earlier of the Termination Date or the CIC Date at a cost to
                  the Specified Executive no greater than the actual amount that
                  the Specified Executive paid or would have paid for such
                  coverage immediately prior to the earlier of the Termination
                  Date or the CIC Date and otherwise in accordance with the
                  terms of such plans and arrangements as in effect immediately
                  prior to the earlier of the Termination Date or the CIC Date;
                  provided however that:

                           (i) if the continued coverage of a Specified
                           Executive under any such plan or arrangement is not
                           permitted under the terms thereof or under applicable
                           law, the Corporation shall arrange to provide the
                           Specified Executive, with benefits that are
                           substantially equivalent to those which the Specified
                           Executive was entitled to receive under such plan or
                           arrangement immediately prior to the earlier of the
                           Termination Date or the CIC Date or pay an amount to
                           the Specified Executive in cash sufficient to enable
                           the Specified Executive to purchase substantially
                           equivalent coverage for the applicable period on an
                           individual basis, in either case at a cost to the

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                                     - 10 -

                           Specified Executive no greater than the Specified
                           Executive paid or would have paid for such coverage
                           immediately prior to the earlier of the Termination
                           Date or the CIC Date, determined on an after-tax
                           basis to the Specified Executive;

                           (ii) in the event that a Specified Executive obtains
                           alternative employment during the applicable
                           Continuation Period and, in connection therewith, the
                           Specified Executive receives substantially equivalent
                           coverage under the plans of his or her new employer,
                           the obligation of the Corporation to provide such
                           Specified Executive with continued coverage under the
                           corresponding plan or arrangement of Nortel Networks
                           shall terminate as of the effective date of such
                           substantially equivalent coverage; and

                           (iii) in the case of a Specified Executive whose
                           Termination Date occurs prior to the CIC Date, if the
                           coverage of such Specified Executive and, where
                           applicable, his or her eligible dependants, under any
                           such plan or arrangement terminates prior to the
                           expiration of the Continuation Period applicable to
                           such Specified Executive, (A) the Corporation shall
                           reimburse the Specified Executive or cause the
                           Specified Executive to be reimbursed for the actual
                           costs incurred by such Specified Executive for
                           alternative and substantially equivalent life
                           insurance, medical, dental, health and disability
                           coverage obtained by him or her (other than
                           alternative coverage described in the preceding
                           Paragraph (ii)) for the portion of the applicable
                           Continuation Period following the termination of the
                           Specified Executive's coverage under the
                           corresponding plan or arrangement of Nortel Networks
                           (such portion, the "Stub Period") or (B) (x) in the
                           case of medical, dental and/or other health coverage,
                           if no such alternative coverage has been obtained,
                           the Corporation shall reimburse the Specified
                           Executive for the medical, dental and/or other health
                           expenses, as applicable, actually paid by the
                           Specified Executive for medical, dental and/or other
                           health services provided to the Specified Executive
                           and, where applicable, his or her eligible dependants
                           or beneficiaries during the Stub Period to the extent
                           such expenses would have been reimbursed under the
                           corresponding plan or arrangement of Nortel Networks
                           had the Specified Executive's coverage thereunder
                           continued for the duration of the Continuation Period
                           or any earlier date determined under the preceding
                           Paragraph (ii) (the amount of such reimbursement to
                           be determined after reduction for the costs the
                           Specified Executive would have been required to pay
                           under the applicable plan or arrangement of Nortel
                           Networks had his or her coverage thereunder
                           continued) and (y) in the case of life insurance or
                           disability coverage, if no such alternative coverage
                           has been obtained and, during the Stub Period, the
                           Specified Executive or, where applicable, any of his
                           or her eligible dependants dies or becomes disabled
                           (within the meaning of the applicable disability plan
                           of Nortel Networks), the Corporation shall pay to the
                           Specified Executive (or in the event of the Specified
                           Executive's death, the Specified Executive's
                           Designated Beneficiary) an amount equal to the death
                           or disability benefits, as applicable,

<PAGE>
                                     - 11 -

                           that would have been payable had the Specified
                           Executive's coverage under the life insurance and/or
                           disability plan of Nortel Networks continued for the
                           Continuation Period (such amount to be determined
                           after reduction for the costs the Specified Executive
                           would have been required to pay under such plan of
                           the Corporation had the Specified Executive's
                           coverage thereunder continued for the Continuation
                           Period or Stub Period, as the case may be);

                  (h) if the Specified Executive is 50 years of age or older on
                  the Termination Date, then

                           (i) if the Specified Executive is eligible to
                           participate in the Supplementary Executive Retirement
                           Plan prior to the Termination Date, credit of an
                           additional number of years of service on behalf of
                           such Specified Executive for all purposes under the
                           Supplementary Executive Retirement Plan equal to the
                           lesser of: (i) the excess of (A) 60 over (B) the
                           Specified Executive's age as of his or her
                           Termination Date; and (ii) five years, and

                           (ii) commencing on the latest of (x) such time as the
                           health, medical and dental benefits available to a
                           Specified Executive pursuant to Subsection 4.1(g)
                           expire, (y) the beginning of the calendar year during
                           which the Specified Executive will attain age 55 and
                           (z) the expiration of any coverage of the Specified
                           Executive by such Specified Executive's new employer
                           as contemplated by Paragraph 4.1(g)(ii) hereof,
                           eligibility for coverage under the health, dental and
                           medical benefits available to retired executives of
                           Nortel Networks immediately prior to the earlier of
                           the Termination Date or the CIC Date provided
                           however, if the continued coverage of a Specified
                           Executive under any such plan or arrangement is not
                           permitted under the terms thereof or under applicable
                           law, the Corporation shall arrange to provide the
                           Specified Executive benefits that are substantially
                           equivalent to those which retired executives of
                           Nortel Networks were entitled to receive under such
                           plan or arrangement immediately prior to the earlier
                           of the Termination Date or the CIC Date or pay an
                           amount to the Specified Executive in cash sufficient
                           to enable the Specified Executive to purchase
                           substantially equivalent coverage for the applicable
                           period on an individual basis in any event at a cost
                           no greater than the Specified Executive paid or would
                           have paid for such coverage immediately prior to the
                           earlier of the Termination Date or the CIC Date,
                           determined on an after-tax basis to the Specified
                           Executive; and

                  (i) within thirty (30) days after the Payment Date, payment to
                  or to the order of the Specified Executive in full settlement
                  of any RSUs (as defined in the RSU Plan) allocated to the
                  Specified Executive under the RSU Plan of an amount in cash
                  equal to the excess of (i) the product of (x) the number of
                  Covered RSUs (as defined in the RSU Plan) in respect of all
                  Grants (as defined in the RSU Plan) made to the Specified
                  Executive under the RSU Plan prior to the CIC Date multiplied
                  by (y) the Special Value (as defined in the RSU Plan) over
                  (ii) the aggregate cash payments made to the

<PAGE>
                                     - 12 -

                  Specified Executive prior to the Termination Date in
                  accordance with the RSU Plan in respect of the Grants.

         4.2      Stock Options/Restricted Stock Units

                  (a) Acceleration - In the event of a Specified Executive's
                  Termination Due to a Change in Control, all Options held by
                  the Specified Executive as of his or her Termination Date
                  shall become fully exercisable as of such Termination Date and
                  will thereafter be exercisable by the Specified Executive (or,
                  in the event of his or her death or incapacity, by his or her
                  Designated Beneficiary) in accordance with the applicable
                  stock option plan.

                  (b) Waiver of Certain Provisions - None of the Options held by
                  a Specified Executive as of his or her Termination Date shall
                  be subject to the right of the Corporation to require, in
                  certain circumstances, repayment of the proceeds of an Option
                  exercise and related sale of the underlying common shares. In
                  addition, for greater certainty, the Corporation shall not
                  exercise its right to require, in certain circumstances, the
                  repayment of the Market Value (as defined in the RSU grants
                  made to Specified Executives) of the allocated RSUs settled in
                  accordance with Subsection 4.1(i).

                  (c) Period for Exercise - In the event of a Specified
                  Executive's Termination Due to a Change in Control,

                           (i) the Specified Executive will be deemed to
                           continue to be employed by Nortel Networks for all
                           purposes under the Stock Option Plan and the Bay
                           Networks Stock Option Plan, except with respect to
                           future grants of stock options, for the applicable
                           Continuation Period; and

                           (ii) the Specified Executive will be deemed to
                           continue to be employed by Nortel Networks for all
                           purposes under the RSU Plan, except with respect to
                           future grants of RSUs until such time as the RSUs (as
                           defined in the RSU Plan) allocated to such Specified
                           Executive are settled in accordance with the
                           provisions hereof and the RSU Plan.

         4.3 Other Deferred Compensation and Pension Arrangements - If a
Specified Executive participates in any deferred compensation, pension or
supplementary retirement plans offered by Nortel Networks, then upon such
Specified Executive's Termination Due to Change in Control, and except as
otherwise specifically provided in this Plan, such Specified Executive shall be
entitled to payments under such plans in accordance with the terms of each such
plan. The full unfunded amount payable under any deferred compensation, pension
or supplementary retirement plans shall be funded in accordance with Article 3.

         4.4 Mechanism for Providing Entitlements to a Specified Executive -

                  (a) Obligation of the Corporation - The Corporation shall
                  provide or cause to be

<PAGE>
                                     - 13 -

                  provided all Entitlements available to a Specified Executive
                  pursuant to the Plan, including this Article 4 (or, in the
                  event of his or her death, to the Specified Executive's
                  Designated Beneficiary); it being understood that to the
                  extent any amount is paid to the Specified Executive (or, if
                  applicable, his or her Designated Beneficiary) under Article
                  3, such payment shall be deemed made on behalf of the
                  Corporation and the applicable subsidiary, if any, in
                  satisfaction of the Corporation's and such subsidiary's
                  obligations therefor. All Entitlements shall be paid or
                  provided at the applicable time set forth in the Plan. In the
                  event that the Corporation makes contributions hereunder on
                  behalf a subsidiary, such contributions shall be charged by
                  the Corporation to such subsidiary.

                  (b) Where No Time Specified - If no time is set out in Section
                  4.1 with respect to any Entitlement, the Corporation shall be
                  deemed to be required to provide such Entitlement as of or on
                  the Payment Date.

         4.5 Reasonable Efforts - Subject to the provisions hereof, the
Corporation shall use commercially reasonable efforts to take or cause to be
taken all action and to do or cause to be done all things reasonably necessary
in accordance with applicable law to implement and make effective the Plan,
including the Entitlements available to Specified Executives pursuant to the
Plan.

         4.6 No Mitigation Required - A Specified Executive shall not be
required to mitigate the amount of any Entitlement provided for in this Plan
either by seeking other employment or otherwise. The amount of any Entitlement
provided for herein shall not be reduced by any remuneration that the Specified
Executive may earn from employment with another employer or otherwise following
his or her Termination Date except as specified in Subsection 4.1(g).

         4.7 Tax Withholding - The Corporation shall withhold or shall cause to
be withheld from amounts payable hereunder any applicable employment or other
withholding taxes required to be withheld under applicable law.

         5.       OBLIGATIONS OF SPECIFIED EXECUTIVE

         5.1 Exclusive Remedy - The Entitlements shall constitute each Specified
Executive's sole and exclusive remedy for any claim arising out of such
Specified Executive's Termination Due to Change in Control.

         5.2 Release - It shall be a condition precedent to the delivery to the
Specified Executive of any Entitlement that the Specified Executive execute, and
deliver to Nortel Networks, a full and final release in the form which the SVP
Human Resources has designated as being acceptable prior to the Change in
Control.

         5.3 Non-Solicitation - If the Specified Executive accepts the
Entitlements pursuant to Article 4, then for a period of one year after the
Payment Date, the Specified Executive will not, directly or indirectly, solicit
the services of or in any other manner persuade any employee of Nortel Networks
to discontinue his or her employment with Nortel Networks or to materially alter
that

<PAGE>
                                     - 14 -

relationship in a manner which is adverse to Nortel Networks.

         5.4 Options - If the Specified Executive accepts the Entitlements
pursuant to Article 4, then the Specified Executive acknowledges and agrees he
or she will not exercise and waives any entitlement to exercise any Options
which become fully exercisable as of the Termination Date until after the later
to occur of the CIC Date or the Termination Date.

         6.       ARBITRATION PROVISION

         6.1 Arbitration Requirement - Any disputes arising hereunder between a
Specified Executive and the Corporation, including the interpretation, validity,
enforceability or applicability of the Plan, shall be subject to binding
arbitration under the Arbitration Act, 1991 (Ontario) or the International
Commercial Arbitration Act (Ontario) depending upon the Specified Executive's
office or home base.

         6.2 Qualification of Arbitrator - Any arbitrator appointed pursuant
hereto shall be a disinterested Person or alternative dispute resolution service
of recognized competence.

         6.3 Appointment of Arbitrator - Each of the Corporation and the
Specified Executive involved in the dispute shall act reasonably to come to
agreement as to the identity of an appropriate Arbitrator with respect to the
particular dispute hereunder. If the Corporation and the Specified Executive
cannot agree on the identity of the arbitrator, each of them shall submit to
binding arbitration before a single arbitrator selected from the roster of
available arbitrators selected by CPR Institute for Dispute Resolution,
JAMs/Indispute or the Canadian Foundation for Dispute Resolution (CFDR)
depending upon the site for such arbitration. Arbitrations hereunder shall be
governed by the laws of Ontario. The arbitrator shall not have the right to
confer any rights with respect to the trade secrets, confidential and
proprietary information or other intellectual property rights of the Nortel
Networks upon the Specified Executive or any third party and this arbitration
provision shall not preclude the Nortel Networks from seeking legal and
equitable relief from any court having jurisdiction with respect to disputes or
claims relating to or arising out of the misuse or misappropriation of the
Nortel Networks' intellectual property.

         6.4 Determination of Arbitrator - The determination of any arbitrator
appointed in accordance with this Article 6 shall be final and binding on the
Specified Executive and the Corporation.

         6.5 Site of Arbitration - Any arbitration proceedings required to be
conducted pursuant to this Plan shall be conducted in the location agreed to by
the parties, but if the parties cannot agree, in the Municipality of
Metropolitan Toronto.

         6.6 Costs and Expenses - Each party shall bear its own costs and
expenses for arbitration or litigation arising out of this Plan, except that the
Corporation will pay all of the fees and expenses of the arbitrator. The
Specified Executive who institutes the arbitral proceedings provided hereunder
may apply at the conclusion of such proceedings to the arbitrator for the
reimbursement for the legal fees and expenses expended in connection with the
arbitral proceedings and the arbitrator shall have jurisdiction to determine
whether payment of the Specified Executive's legal fees and expenses are

<PAGE>
                                     - 15 -

reasonable in the circumstances and the amounts to be reimbursed by the
Corporation.

         7.       GENERAL

         7.1 No Obligation to Employ - This Plan does not obligate Nortel
Networks to continue to employ a Specified Executive for any specific period of
time, or in any specific role or geographic location. Subject to the terms of
any applicable written employment agreement between Nortel Networks and a
Specified Executive and applicable law, Nortel Networks may assign that
Specified Executive to other duties, and either Nortel Networks or the Specified
Executive may terminate the Specified Executive's employment at any time for any
reason.

         7.2 Governing Law - This Plan shall be governed by and construed in
accordance with the laws of Ontario and the laws of Canada applicable therein
and shall be treated in all respects as an Ontario contract.

         7.3 Severability - If any provision of this Plan is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.

         7.4      Enurement -

                  (a) This Plan shall enure to the benefit of and be binding
                  upon the Specified Executives and their respective heirs,
                  executors, administrators and other legal personal
                  representatives and upon the Corporation and its successors
                  and assigns.

                  (b) This Plan shall enure to the benefit of and shall be
                  binding upon and enforceable against the Corporation and any
                  successor thereto, including, without limitation, any
                  corporation or corporations acquiring directly or indirectly
                  all or substantially all of the business or assets of the
                  Corporation, whether by merger, consolidation, sale or
                  otherwise, but shall not otherwise be assignable by the
                  Corporation.

                  (c) Without limitation of Subsection 7.4(b), the Corporation
                  shall require any successor (whether direct or indirect, by
                  merger, consolidation, sale or otherwise) to all or
                  substantially all of the business or assets of the
                  Corporation, by a written agreement expressly, absolutely and
                  unconditionally to assume and agree to perform the covenants
                  and obligations of the Corporation pursuant to the terms of
                  this Plan in the same manner and to the same extent as the
                  Corporation would have been required to perform if no such
                  succession had taken place. Failure of the Corporation to
                  obtain the written agreement of a successor required by this
                  Subsection 7.4 (c) shall be deemed to be a circumstance
                  permitting a Specified Executive to terminate his or her
                  employment for Good Reason and, accordingly, to be entitled to
                  the Entitlements.

         7.5 Notice - Notices and other communications given or made under the
Plan shall be delivered as follows:

<PAGE>
                                     - 16 -

                  (a) if to the Corporation, at its principal executive offices,
                  to the attention of the SVP Human Resources;

                  (b) if to a Specified Executive, to the most recent
                  residential address shown for such Specified Executive in the
                  records of Nortel Networks;

                  (c) if to the Canadian Trustee, at the address provided to the
                  Corporation from time to time; and

                  (d) if to the U.S. Trustee, at the address provided to the
                  Corporation from time to time.

         8.       AMENDMENT AND TERMINATION

                  (a) Amendment Prior to Any Proposed CIC - Except as provided
                  in Subsection 8(b), the Corporation may amend this Plan at any
                  time, in whole or in part.

                  (b) Amendment Prior to Proposed CIC - No amendment of any
                  provision of this Plan, the Canadian Trust Agreement, the U.S.
                  Trust Agreement and any other trust agreement established in
                  accordance with Article 3 made after thirty (30) days prior to
                  the earliest of: (1) the date that the Corporation first
                  publicly announces it is conducting negotiations leading to a
                  transaction that results in a Change in Control; or (2) the
                  date that the Corporation enters into a definitive agreement
                  documenting a Change in Control (even though still subject to
                  approval by the Corporation's shareholders and other
                  conditions and contingencies); or (3) the date of the first
                  public announcement of a transaction that results in a Change
                  in Control which does not fall within the events described in
                  the preceding (1) or (2); (4) the date that the Corporation
                  first enters into negotiations leading to a transaction that
                  results in a Change in Control; or (5) the CIC Date; shall be
                  effective unless consented to in writing by the Corporation
                  and by any Specified Executive affected by such amendment.

                  (c) Termination - The Nortel Networks Board may from time to
                  time suspend or terminate the Plan in whole or in part.
                  Notwithstanding the foregoing, the Plan shall not be suspended
                  or terminated at any time after thirty (30) days prior to the
                  earliest of: (1) the date that the Corporation first publicly
                  announces it is conducting negotiations leading to a
                  transaction that results in a Change in Control; or (2) the
                  date that the Corporation enters into a definitive agreement
                  documenting a Change in Control (even though still subject to
                  approval by the Corporation's shareholders and other
                  conditions and contingencies); or (3) the date of the first
                  public announcement of a transaction that results in a Change
                  in Control which does not fall within the events described in
                  the preceding (1) or (2); (4) the date that the Corporation
                  first enters into negotiations leading to a transaction that
                  results in a Change in Control; or (5) the CIC Date, unless
                  such suspension or termination is consented to in writing by
                  the Corporation and by any Specified Executed affected by such
                  suspension or

<PAGE>
                                     - 17 -

termination.

         9.       EFFECTIVE DATE AND TERM OF THE PLAN

The Plan was adopted by resolution of the Nortel Networks Board adopted on
August 17, 1999 with effect from September 1, 1999. Any amendments to the Plan
shall become effective as specified by the Nortel Networks Board, and consented
to by the Corporation and the Specified Executives required hereby. Any
termination or suspension of the Plan shall become effective as specified by the
Nortel Networks Board, and consented to by the Corporation and the Specified
Executives as required hereby.

<PAGE>

                                   SCHEDULE A

                               CHANGE IN CONTROL

         1. Events Constituting Change in Control - For the purposes of this
Plan, the term "Change in Control" means the occurrence of any of the following:

                  (a)      (i) any Person (other than BCE Inc. ("BCE")) or group
                           acquires beneficial ownership of securities of the
                           Corporation representing more than 20% of the
                           outstanding securities entitled to vote in the
                           election of directors of the Corporation
                           (collectively, the "Voting Shares"); and

                           (ii) such Person or group, at any time while
                           beneficially owning more than 20% of the Voting
                           Shares, beneficially owns more Voting Shares than are
                           beneficially owned by BCE; and

                           (iii) a majority of the Nortel Networks Board at any
                           time within 2 years after the date on which
                           Paragraphs (i) and (ii) are satisfied are individuals
                           who were not members of the Nortel Networks Board
                           twelve (12) months prior to that date;

                  (b) any Person or group beneficially owns more than 50% of the
Voting Shares, provided however that this Subsection (b) shall not be satisfied
by reason of BCE alone beneficially owning more than 50% of the Voting Shares;

                  (c) consummation of a merger, amalgamation, plan of
arrangement, business combination, reorganization or consolidation or sale or
other disposition of all or substantially all of the assets of the Corporation
or any liquidation or dissolution of the Corporation (a "Business Combination"),
in each case, unless, following such Business Combination:

                           (i) Persons who were the beneficial owners,
                           respectively, of the outstanding common shares
                           immediately prior to such Business Combination
                           beneficially own, directly or indirectly, by reason
                           of such prior ownership of common shares, more than
                           50% of the then-outstanding voting shares of the
                           Person resulting from such Business Combination
                           (including, without limitation, a corporation which
                           as a result of such transaction owns the Corporation
                           or all or substantially all of the Corporation's
                           assets either directly or through one or more
                           subsidiaries), or more than 50% of the
                           then-outstanding voting shares of the publicly traded
                           corporation which ultimately controls the Person
                           resulting from such Business Combination, whether
                           directly or indirectly; and

                           (ii) at least a majority of the members of the board
                           of directors of the Person resulting from such
                           Business Combination (or the publicly traded
                           corporation which ultimately controls the Person
                           resulting from such Business Combination, whether
                           directly or indirectly) were members of the Nortel
                           Networks Board at the time of the execution of the
                           initial agreement providing for, or the action of the
                           Nortel Networks Board approving, such Business
                           Combination; or

<PAGE>
                                     - 2 -

                   (d) any other event which the Nortel Networks Board
determines in good faith could reasonably be expected to give rise to a Change
in Control resulting from situations such as:

                           (i) any Person acquiring a significant interest in
                           the Corporation; or

                           (ii) the election of any Person to the Nortel
                           Networks Board in circumstances in which management
                           has not solicited proxies in respect of such
                           election.

         2.       Definitions - For the purposes of this Schedule A:

                           (i) "group" means a Person and one or more other
                           Persons who are acting jointly or in concert with
                           such Person and, for the purposes of this Plan,
                           "acting jointly or in concert" shall be interpreted
                           in accordance with Subsection 91(1) of the Securities
                           Act (Ontario) (the "OSA"), as presently in force; and

                           (ii) "beneficial ownership" means ownership at law or
                           in equity and, for the purposes of this Plan,
                           includes "beneficial ownership" as interpreted in
                           accordance with Subsections 1(5) and (6) and Section
                           90 of the OSA.

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