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(12) Represents contributions made under the Nortel Networks Limited Investment Plan for Employees — Canada.
(13) Represents the United States dollar equivalent of payments actually earned or paid in Canadian dollars. Amounts have been converted using the average of the exchange
rates in effect during each year equal to US$1.00 = CDN$1.2978 for 2004, US$1.00 = Cdn$1.4048 for 2003 and US$1.00 = Cdn$1.5708 for 2002.
(14) Represents contributions under the Nortel Networks Long-Term Investment Plan.
(15) In June 2001, the Company commenced a voluntary stock option exchange program whereby eligible employees could exchange certain then outstanding stock options for
new options based on a prescribed formula. In January 2002, new stock options were granted to eligible employees who participated in the stock option exchange
program, with exercise prices at the fair market value of the Company’s common shares on the date of grant. Prior to Ms. Spradley’s appointment as an officer of the
Company, she was an employee eligible to participate in the voluntary stock option exchange program. As a result, 41,999 of the stock options granted toMs.Spradleyin
2002 were granted pursuant to the voluntary stock option exchange program.
(16) Amounts paid to reimburse Mr. DeRoma for income taxes payable by him in accordance with his employment agreement. Mr. DeRoma’s employment agreement is
described below under “Certain employment arrangements”.
(17) Includes Cdn$151,898 base salary for accrued vacation paid as required in accordance with corporate policy and applicable law as a result of the termination of
employment for cause.
(18) Mr. Dunn did not receive any annual incentive bonus under the SUCCESS Plan with respect to 2003. See footnotes (1), (8) and (19).
(19) As a result of the termination of Mr. Dunn’s employment for cause on April 27, 2004, the Company and Nortel Networks Limited have demanded repaymentofthe
Return to Profitability program bonus award under the SUCCESS Plan of $3,540,000 and the 745,000 restricted stock units issued and settled in respect of restricted stock
units allocated under the 2003 program of the RSU Plan. See footnotes (8) and (10).
(20) These options terminated and expired automatically upon the termination of Mr. Dunn’s employment for cause on April 27, 2004.