Document:

exv10w2

 

Exhibit 10.2

CONFIDENTIAL-SPECIAL HANDLING

January 20, 2005

Peter W. Currie

5 Wilderness Trail

P.O. Box 130

Gormley, Ontario

L0H 1G0

Dear Peter:

I am delighted to offer you the position of Chief Financial Officer for Nortel Networks
Corporation, reporting to W.A. (Bill) Owens, President and Chief Executive Officer, with a
suggested starting date of no later than February 14, 2005, subject to your appointment by the
Boards of Directors of Nortel Networks Corporation and Nortel Networks Limited. As you are aware,
this position is located at our facility in Brampton, Ontario.

The key responsibilities and focus of this position have been discussed and communicated to you.
We look forward to you playing a key role in this area, and should you have any further questions,
I would be pleased to review them with you.

The terms of this offer are as follows:

Salary

Your base salary will be US$600,000 per annum paid to you bi-weekly. Normally, salaries are
reviewed on an annual basis, typically in the first quarter, in accordance with the various
evaluation processes and market-driven guidelines.

Incentive Award

You will be eligible to participate in the annual SUCCESS Incentive Award Plan (“SUCCESS”) with a
target of 100% of your base salary. For 2005, you will be eligible to participate in the 2005
SUCCESS plan and we will guarantee that you will receive a

W.J. Donovan

Senior Vice President, Human Resources

Nortel

4006 E. Chapel Hill Nelson Highway, Research Triangle Park, NC 27709 U.S.A. T. 919-997-7110 F. 919-997-6130 nortel.com

 

 

SUCCESS bonus of at least 100% of your base salary to be pro-rated depending upon the number of
months that you are in active employment. In all other respects, your SUCCESS bonus will be
assessed in accordance with the terms of the SUCCESS plan.

Special Bonus

Upon acceptance of this employment offer, and conditioned upon your commencement of employment, you
will receive a special bonus of US$300,000 to be paid within 60 days following the commencement of
your employment.

Long Term Incentive

As a consequence of a delay of certain public filings by Nortel Networks as publicly disclosed on
March 10, 2004, the Nortel Networks Corporation Stock Option Plan (Stock Option Plan) and Nortel
Networks Stock Purchase Plan have been suspended. As a result, stock options will not be granted
during the suspension period. Once the suspension has been lifted, you will be eligible to
participate in the Stock Option Plan and a recommendation of stock options for you will be reviewed
during the next available approval cycle. Such stock options will be at a subscription price based
on the market price of Nortel Networks shares on the date of such approval, as determined under the
applicable Stock Option Plan.

Benefits

As an employee of Nortel Networks Corporation, you will be eligible to participate in employee
benefit plans in accordance with the terms of those plans upon your commencement of employment.
This currently includes medical, dental, vision, short term disability, long term disability,
business travel insurance, accidental death and dismemberment, and life insurance coverages.

You will also be eligible for 5 weeks of vacation per annum immediately upon your commencement of
employment.

We periodically review benefit plans, as well as compensation programs, and make modifications,
including enhancements and reductions, as we deem appropriate.

Following your signature below, please provide your social insurance number and date of birth.
This information will facilitate your enrollment in payroll and benefit programs.

 

 

Capital Accumulation and Retirement Programs (CARP)

You will be offered the choice between two Capital Accumulation and Retirement Programs (CARP):
the Balanced Program or the Investor Program. All of our retirement programs are periodically
reviewed and changes may result to the programs as currently described.

Change in Control

Subject to Board approval, you will be eligible to participate in our Executive Retention and
Termination Plan (“ERTP”). The ERTP, in part, defines the conditions for a change in control and
includes the provisions available to you should your employment be terminated as defined in ERTP
within 24 months following a change in control. You would be eligible for the benefits described
for tier I. A copy of the ERTP is enclosed. Ongoing participation in the ERTP will continue as a
function of your role and responsibilities. The number of executives who participate in the Plan is
very limited, and is subject to approval by the Board of Directors.

Tax for Board Appointed Officers

As a board appointed officer, tax preparation for your personal income tax will be provided at
company expense by Deloitte or other company assigned provider.

Executive Travel Services

You will be eligible for executive travel reservation services:

Dedicated travel telephone # ESN 830-4698, (613) 274-4698

Reporting Insider

You will be designated a Reporting Insider under applicable Canadian and U.S. securities
legislation with respect to trades of securities of the Company. Further details will be sent to
you directly by our Securities Law group following your acceptance of this offer.

Share Ownership Guidelines

As a senior executive you will be expected under the Share Ownership Guidelines to own Nortel
Networks shares equivalent to 300% of your base salary within 5 years from the date you commence
employment. We strongly believe that it is important for senior executives to have this
commitment. As a result, we review progress against these guidelines on a regular basis.

 

 

If you are in accord with this offer, please sign and return one copy of this letter to me while
retaining the other for your files.

At the commencement of your employment, there will be a number of documents for you to complete,
including our standard “Agreement Related to Intellectual Property and Confidentiality”.

I look forward to you joining Nortel Networks and believe you will find your new position to be a
challenging and rewarding experience.

Sincerely,

/s/ W.J. Donovan

W. J. Donovan

Senior Vice President, Human Resources

Nortel Networks Corporation

	 
	 

	 	 	 	 	 
	Accepted this   24   day of   January  , 2005.	 	 

	 	 	 
	Signature:  

	  /s/ P W Currie
	 
	 	 	 

	 	 	 
	Confirmed Start date:  

	  February 14, 2005  
	 
	 	 	 

	 	 	 
	Date of Birth:    
	 	 
	 	 	 

	 	 	 
	Social Insurance #:exv10w6

 

Exhibit 10.6

CONFIDENTIAL-SPECIAL HANDLING

March 2, 2005

Mr. Gary Daichendt

2620 Riviera Drive

Laguna Beach, CA 92651

Dear Gary:

I am pleased to offer you the position of President and Chief Operating Officer of Nortel
Networks Corporation (NNC) and Nortel Networks Limited (NNL) (collectively Nortel Networks),
reporting to William A. (Bill) Owens, with a suggested start date of March 14, 2005. This
employment offer is subject to your appointment by the Boards of Directors of NNC and NNL and the
terms and conditions of this offer letter.

The key responsibilities and focus of this position have been discussed and communicated to you.
We look forward to you playing a key role in this area. We have also discussed the senior
executives that will be reporting to you in this role. Should you have any further questions, I
would be pleased to assist you.

The terms of this offer are as follows:

Salary

Your base salary will be US$800,000 per annum paid to you bi-weekly. Normally, salaries are
reviewed on an annual basis, typically in the first quarter, in accordance with the various
evaluation processes and market-driven guidelines.

Incentive Award

You will be eligible to participate in the annual Nortel Networks Limited SUCCESS Incentive Plan
(“SUCCESS Plan”) with a target of 125% of your base salary. For 2005, you will be eligible to
participate in the 2005 SUCCESS Plan and we will guarantee that you will receive a SUCCESS Plan
payment of at least 125%. In all other respects, your SUCCESS payment will be determined in
accordance with the terms of the SUCCESS Plan. A copy of the Plan is enclosed.

 

 

Long Term Incentive

As a consequence of a delay of certain public filings by Nortel Networks, the grant of stock
options under the Nortel Networks stock option plans has been suspended. Once the suspension has
been lifted, we intend to recommend to the Joint Leadership Resources Committee of the Boards of
Directors of NNC and NNL (the “Committee”) for approval during the next available approval cycle a
new hire grant of 500,000 stock options for you. Such stock options, including the grant thereof,
will be subject to the terms and conditions of the applicable Nortel Networks stock option plan at
the time of grant, as well as applicable Nortel Networks corporate policies and procedures, in
effect at the time the recommendation for approval is submitted, including , (i) to be eligible
for the recommendation of this option grant, you must be an active employee of Nortel Networks on
the date of the grant of the options; and (ii) the exercise price of the options will be equal to
100% of the market value of one common share of NNC on the date of the grant of such options
determined in accordance with the terms of the applicable Nortel Networks stock option plan.

In addition, as part of your 2005 long term incentive award, our intention is to award you a long
term incentive package valued at the time of award by an industry recognized valuation tool
approved by the Committee equivalent to US$3.75 million and conditional upon shareholder and all
other required approvals having been obtained prior to the award.

Benefits

As an employee of Nortel Networks Inc. (NNI), NNC’s principal operating subsidiary, you will be
eligible to participate in U.S. employee benefit plans of NNI in accordance with the terms of those
plans upon your commencement of employment. This currently includes medical, dental, vision, short
term disability, long term disability, business travel insurance, accidental death and
dismemberment, and life insurance coverages. A Benefits Summary is included with this offer.

You will also be eligible for 5 weeks of vacation per annum upon your commencement of employment.
Vacation is accrued monthly at the rate of 2.08 days per month of employment.

We periodically review benefit plans, as well as compensation programs, and make modifications,
including enhancements and reductions, as we deem appropriate.

Capital Accumulation and Retirement Programs (CARP)

You will be offered the choice between two Capital Accumulation and Retirement Programs (CARP):
the Balanced Program or the Investor Program. Details of these programs have been included. All of
our retirement programs are periodically reviewed and changes may result to the programs as
currently described.

Change in Control

Subject to the approval of the Committee, you will be eligible to participate in our Nortel
Networks Corporation Executive Retention and Termination Plan (“ERTP”). The ERTP provides certain
payments in the event that your employment is terminated for a qualifying reason under the ERTP
within 24 months following a change in control (as defined in the ERTP). You would be eligible for
the benefits described for Tier I Executive under the terms and conditions of the ERTP. A copy of
the ERTP is enclosed. Ongoing participation in the ERTP will continue as a function of your role and responsibilities. The number of executives

2

 

who
participate in the ERTP is very limited, and is subject to approval by the Committee. Payment to
you of ERTP benefits would make you ineligible for the payments/benefits described below in the
paragraph entitled Involuntary Separation.

Tax Review for Board Appointed Officers

As a board appointed officer, you are required to participate in Nortel’s Executive Tax Review
Program. Under the terms of this program, your personal income tax return will be prepared and/or
reviewed by our designated tax provider.

Executive Travel Services

You will be eligible for executive travel reservation services:

Dedicated travel telephone # ESN 830-4698, (613) 274-4698

Reporting Insider

You will be designated a Reporting Insider under applicable Canadian and U.S. securities
legislation with respect to trades of securities of Nortel Networks. Further details will be sent
to you directly by our Securities Law group following your acceptance of this offer.

Share Ownership Guidelines

As a senior executive you will be expected under the Share Ownership Guidelines to own common
shares of NNC equivalent to 300% of your base salary within 5 years from the date you commence
employment. We strongly believe that it is important for senior executives to have this
commitment. As a result, we review progress against these guidelines on a regular basis.

Employment Relationship

Your employment relationship is that of employment at will and therefore such relationship is
terminable at the will of either party and is not an employment agreement for a year or any other
specified term.

Involuntary Separation

Notwithstanding, the employment relationship described in the paragraph above entitled Employment
Relationship, if the Corporation initiates your separation of employment as President and Chief
Operating Officer, or there is a change of your reporting relationship in that role to someone
other than William A. (Bill) Owens or if your responsibilities or authority are involuntarily
changed and are not substantially equivalent to your current role, you will be provided in lieu of
any other payment or benefit with the following: the equivalent of two years base salary paid
bi-weekly, the equivalent of one year SUCCESS Plan payment at target to be paid in a lump sum, the
opportunity to continue health, life insurance and AD&D benefits coverage in which you are then
enrolled for two years following your employment termination (“Salary Continuance Period”) at
active employee rates, and the continued vesting of outstanding stock options during the Salary
Continuance Period. However, the foregoing payments and benefits will not be provided to you if
your separation of employment arises out of conduct and/or inaction by you that is not in the best
interests of the Corporation. Additionally, the provision of any such payments and benefits will
be conditioned upon your execution of a separation agreement, which will be prepared by the
Corporation and will contain, among other things, a full and final release of claims and a covenant
not to compete against the Corporation or solicit its employees during the Salary

3

 

Continuance
Period. Payment to you of the benefits described in this paragraph would make you ineligible for the payments/benefits described above in
the paragraph entitled Change in Control.

If you are in accord with this offer, please sign and return one copy of this letter to me and
retain the other for your files.

At the commencement of your employment, there will be a number of documents for you to complete,
including our standard Employee Agreement as well as an Agreement Related to Intellectual Property
and Confidentiality and Conflict of Interests. Also, the employment offer is contingent upon you
providing certain legally required documentation such as those required under the Immigration
Reform and Control Act of 1986, as well as the completion of background and reference checks to the
Corporation’s satisfaction.

I look forward to you joining Nortel Networks and believe you will find your new position to be a
challenging and rewarding experience.

Sincerely,

/s/ William Donovan

William J. Donovan

Senior Vice-President,

Human Resources

Nortel Networks Corporation

	 	 	 	 	 
	Accepted this   3rd   day of   March  , 2005	 	 

	 	 	 
	Signature:

	  /s/ Gary Daichendt
	 
	

	 	 

	 	 	 
	Confirmed Start date:  

	3/14/05
	 
	

	 	 

	 	 	 
	Social Security #:  

	 
	 
	

	 	 

	 	 	 
	Date of Birth:  

	 
	 
	

	 	 

Enclosure

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