X0201 4 2003-11-26 0 0000072911 NORTEL NETWORKS CORP NT 0001232507 SCHILLING STEVEN LEO C/O NORTEL NETWORKS CORPORATION 8200 DIXIE ROAD, SUITE 100 BRAMPTON, A6 L6T 5P6 0 1 0 0 President, Enterprise Accounts Common Shares 2003-11-26 4 S 0 12000 4.45 D 120149 D Common Shares 8250 I Held by spouse, Mary Schilling Investment Fund Units Common Shares 146283.25 495224.01 D 01/24/95 Grant of Options 50.08 2005-01-23 Common Shares 120000 120000 D 01/29/98 Grant of Options 11.29 2008-01-28 Common Shares 24000 24000 D 07/23/98 Grant of Options 14.54 2008-07-22 Common Shares 60000 60000 D 07/23/98 Grant of Options 2008-07-22 Common Shares 60000 60000 D 01/28/99 Grant of Options 15.5325 2009-01-27 Common Shares 93334 93334 D 07/29/99 Grant of Options 21.9375 2009-07-28 Common Shares 60000 60000 D 01/27/00 Grant of Options 49.61 2010-01-26 Common Shares 84000 84000 D 06/09/00 Grant of Options 59.41 2010-06-08 Common Shares 50000 50000 D 01/25/01 Grant of Options 38.26 2011-01-24 Common Shares 75000 75000 D 02/28/02 Grant of Options 5.15 2012-02-27 Common Shares 350000 350000 D These shares are held by a member of Mr. Schilling's immediate family residing in his household. Mr. Schilling claims beneficial ownership of these shares. 495,224.01 company stock fund units are held in the participant's account as a result of the participant's contributions, vested company contributions and/or investment earnings thereon invested in the company stock fund (the "U.S.Stock Fund") pursuant to the Nortel Networks Long-Term Investment Plan (the "U.S.Investment Plan"), as of November 25,2003. The Stock Fund invests primarily in Nortel Networks Corporation ("NNC") common shares.As at November 25,2003,the participant's company stock fund units represent approximately 146,283.25 common shares of NNC.The U.S.Investment Plan is administered as a unitized fund by Hewitt Associates LLC and the number of shares represented by each unit fluctuates on a daily basis. The reported options were granted pursuant to the Nortel Networks Corporation 1986 Stock Option Plan As Amended and Restated (the "1986 Stock Option Plan"). These replacement options were granted pursuant to the Key Contributor Program under the 1986 Stock Option Plan. Under the terms of Key Contributor Program,a Participant is granted concurrently an equal number of initial options and replacement options. The replacement options expire ten years from the date of grant and have an exercise price equal to the market value (as defined in the 1986 Stock Option Plan) of common shares on the date the initial options are fully exercised, provided that in no event will the exercise price be less than the market value (as defined in the 1986 Stock Option Plan) on the date of grant.Subject to certain holding requirements with respect to shares received from the exercise of the initial options,the replacement options are generally exercisable commencing 36 months from the date all of the initial options are fully exercised. The reported options were granted pursuant to the Nortel Networks Corporation 2000 Stock Option Plan. The reported options are currently vested. The reported options are currently vested as to 50,000 NNC common shares and will vest as to the remaining 25,000 NNC common shares on January 25, 2004. The reported options are currently vested as to 116,666 NNC common shares and will vest as to 116,667 NNC common shares on February 28, 2004 and on February 28, 2005. K.E. McCarthy, Attorney for Steven L. Schilling 2003-12-01