Exhibit 10.76
February 21, 2006
Mr. Brian McFadden
6 Magnolia St.
Baie D’Urfe, PQ
H9X 3P4

Dear Brian:
This letter (“Agreement”) records the arrangements between you and Nortel Networks Limitedconcerning the cessation of your employment. The Agreement shall bind and inure to the benefit ofeach party and their respective heirs, successors and assigns.
1.   As used in this Agreement, the term “Corporation” shall mean Nortel Networks Corporation, itssubsidiaries and affiliates, their successors and assigns, and all of their past and presentofficers, directors, employees and agents (in their individual and representative capacities),in every case, individually and collectively.
2.   Effective as of the close of business on December 23, 2005, your active employmentrelationship with the Corporation ceased. All previous external responsibilities which youhad were or will be assumed by a person designated by the Corporation, including anyparticipation in industry or other associations representing the Corporation. You ceased toact as an officer and/or director of the Corporation and any of the Corporation’s subsidiariesand affiliates on December 23, 2005, and the Corporation has taken steps to remove you fromall such positions.
3.   You understand and agree that if you have the designation of either “Reporting” or“Non-Reporting” Insider pursuant to Corporate Policy 320.28 of Nortel Networks Corporation(and under applicable Canadian/US securities legislation for Reporting Insiders), you ceasedto have this designation effective 12:01 a.m. on December 24, 2005. Notwithstanding the factthat you no longer have this designation, if you are in possession of material non-publicinformation relating to Nortel Networks, you are prohibited from trading in Nortel Networkssecurities (or informing another person of the material non-public information) in accordancewith applicable laws. If you are a
William J. Donovan
Senior-Vice President
Human Resources
8200 Dixie Road Suite 100 Brampton ON Canada L6T 5P6 T 905.863.1100 F 905.863.8412 E



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February 21, 2006
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    “Reporting” Insider, you understand that you were required to amend your insider profilewithin 10 days of December 23, 2005 on the Canadian System for Electronic Disclosure byInsiders (SEDI) to indicate that you were no longer a “Reporting” Insider of NortelNetworks. You should contact the Insider Reporting Department at (905) 863-1220 and fax(905) 863-8524 for assistance in amending the SEDI profile.
4.   Conditional upon your compliance with all terms and conditions of this Agreement, theCorporation shall:
  (a)   pay you the sum of US$20,314.92 bi-weekly, converted to Canadian currency inthe same manner as you were paid immediately prior to the termination of your activeemployment, less applicable deductions, commencing on December 24, 2005 andterminating December 28, 2007 (“Salary Continuation Period”). The first such paymentshall be made on the Corporation’s next regular payroll date following your executionof this Agreement and shall include all bi-weekly payments accrued to that date;
  (b)   pay you, on or before the next regular payroll date following your executionof this Agreement, a lump sum amount equivalent to ten (10) weeks of base salaryrepresenting all of your current accrued but unused vacation benefit, with no furthervacation accrual subsequent to December 23, 2005;
  (c)   continue your participation during the Salary Continuation Period, subject tothe provisions of the applicable plans, in group medical, life insurance and dentalinsurance, for you and any of the dependents currently covered; you shall continue tomake any required contributions for such benefits at the rates applicable for seniorexecutive employees occupying positions similar to that you occupied in your mostsenior position with the Corporation through the deductions authorized in paragraph4(a);
  (d)   continue your accrual of pensionable service during the Salary ContinuationPeriod, pursuant to the terms of the Nortel Networks Managerial and Non-NegotiatedPension Plan (the “pension plan”); your final pension or retirement benefits will becalculated based on pensionable service you have accrued to the conclusion of theSalary Continuation Period;
  (e)   consider you ineligible for consideration for any future grant(s) of stockoptions or Restricted Stock Units (RSUs). Stock options and RSUs previously grantedto you will continue to vest during the Salary Continuation Period in



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February 21, 2006
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      accordance with the provisions of the plan under which the stock options or RSUswere granted and the instrument of grant evidencing the grant. Your right, if any,to exercise any vested Nortel Networks stock options or RSUs after your activeemployment relationship with the Corporation ceased (including during the SalaryContinuation Period) will be determined in accordance with the provisions of thestock option or RSU plan under which the stock options or RSUs were granted and theinstrument of grant evidencing the options or RSUs;
  (f)   following your completion of the necessary documentation, distribute youraccount balance in accordance with the provisions of the Nortel Networks InvestmentPlan. Your right to contribute to and participate in the Investment Plan will ceaseat the end of the Salary Continuation Period;
  (g)   make available to you, should you elect, executive outplacement services toassist you in securing new employment and pay the professional fees for such servicesas are reasonably incurred;
  (h)   with respect to any monies or monetary equivalents to be paid hereunder, inits reasonable discretion withhold appropriate amounts concerning any and allapplicable federal and provincial taxes; and
  (i)   pay the cost of personal income tax preparation by a service providerselected by the Corporation for tax year 2005.
5.   All Corporation compensation, benefits and perquisites not expressly extended to or preservedfor you pursuant to this Agreement shall be terminated effective 12:01 am., December 24, 2005.
6.   Regardless of whether you comply with this Agreement:
  (a)   The Corporation shall indemnify you, and advance any reasonable legal feesand expenses, to the extent permitted by, and in accordance with, section 124 of theCanada Business Corporations Act (the “CBCA”) and the Corporation’s By-Laws (the“By-Laws”). You shall repay such fees and expenses if and to the extent it isdetermined that you do not fulfill the conditions set forth in subsection 124(3) ofthe CBCA or the By-Laws.



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February 21, 2006
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  (b)   Subject to and without limiting the foregoing, it is anticipated that theCorporation’s legal counsel will represent you in respect of any civil, criminal,administrative, investigative (including any internal investigation or independentreview being conducted by the Corporation’s Board of Directors or a Committee thereof)or other proceeding in Canada, the United States or other applicable jurisdiction inwhich you are involved (including as a witness) because of your association with theCorporation (hereafter, a “Matter”). However, in the event that the Corporation’scounsel cannot represent you in a Matter because of a conflict, the Corporation agreesto advance monies to pay your reasonable and actual legal expenses in that Matterprovided you agree that you will not settle the Matter, retain defense counsel orexpert witnesses or consultants, or incur any non-normal course defense costs withoutobtaining the Corporation’s prior consent, which consent will not be unreasonablywithheld.
  (c)   With respect to the subject matter of (1) the investigation being conductedby the United States Securities and Exchange Commission (“SEC”) pursuant to formalorder of private investigation in In the Matter of Nortel Networks Corporation (SECFile No. H-9799); (2) the related investigation being conducted by the OntarioSecurities Commission; and (3) any other investigation by any law enforcementauthority, governmental body or self-regulatory organization in connection with anyfact, circumstance, situation, transaction, event or other source of liability relatedto the subject matter referenced in the immediately foregoing items (1) and (2) orreferenced in the Corporation’s October 23, 2003 8K filing with the SEC (all of theforegoing, collectively, the “Investigation”), you have retained separate counselindependent of any duty to the Corporation (Latham & Watkins LLP and Fasken MartineauDuMoulin LLP) and the Corporation will continue to advance monies to pay yourreasonable legal fees and expenses associated with the Investigation and allproceedings such as may arise from it (collectively, the “Investigation IndemnifiedMatters”). For clarification, Investigation Indemnified Matters include civillitigation of related subject matter. The Corporation acknowledges that therequirement set forth in this paragraph not to settle any Matter without theCorporation’s prior consent does not apply to any Investigation Indemnified Matters.The Corporation’s determination to advance such reasonable legal fees and expenses issubject to section 124 of the CBCA and the By-Laws and you shall repay such fees andexpenses if it is determined that you do not fulfill the conditions set forth in subsection124(3) of the CBCA or the By-Laws. The Corporation will also



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February 21, 2006
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timely provide to your counsel reasonable access to or copies of any and all documents you generatedand/or received during the time period covered by the Investigation, and/or as arerelevant to any Investigation Indemnified Matter, as your counsel reasonablyrequests.
7.   With the exception of the Application filed in the Ontario Superior Court of Justice in thematter of Indiana Electrical Workers Pension Trust Fund IBEW and Laborers Local 100 and 397Pension Fund v. Nortel Networks Corporation, the Corporation represents that it has noknowledge as of February 21, 2006 of any claims or legal action in favor of the Corporationagainst you in any forum, whether for legal, equitable or administrative relief, and furtherrepresents that it has no present intention to bring any such claims. The Corporation furtheragrees that in the event the Corporation brings any such legal action, other than to enforcethe terms of this Agreement, the release of claims given by the Employee in section 13 shallbe null and void.
8.   You shall reconcile and settle your employee expense account, and any advances made to you bythe Corporation, as soon as possible, but not later than thirty (30) days after your executionof this Agreement.
9.   You shall continue to maintain the confidentiality of all of the Corporation’s trade secretsand confidential or proprietary commercial, technical or other information; and specificallyyou agree that you shall not at any time during or following your employment with theCorporation, disclose, other than to the Corporation’s authorized personnel, or otherwise usefor non-Corporation purposes, any confidential or proprietary information (whether or not atrade secret) relating to an activity of the Corporation.
The parties agree that this Agreement, and all the terms and conditions expressed herein,is subject to either party’s right or obligation to disclose this Agreement in accordancewith applicable securities laws or as may be required to enforce this Agreement.
Upon the occurrence of any contingency which may affect your rights in or to any subsequentpayment or benefit, or affects the Corporation’s rights under this Agreement, includingwithout limitation, your obtaining new employment, you shall, within ten (10) days of suchoccurrence, provide written notice to the Corporation of that event. Such notice shall besent in writing to the Senior Vice-President, Human Resources.



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February 21, 2006
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10.   You shall make available to the Corporation, upon reasonable notice, advice, assistance andinformation that shall include, but not be limited to, offering and explaining evidence,providing sworn statements, participation in discovery, and trial preparation testimony as maybe deemed necessary by the Corporation concerning the Corporation’s position in any legalproceedings involving issues brought against or initiated by the Corporation of which you have knowledge. In the eventit is necessary for you to provide the aforementioned services, then the Corporation shallreimburse you for authorized, reasonable and documented travel expenses, including, but notlimited to, transportation, lodging and meals; except that the Corporation acknowledgesthat attorneys’ fees and associated expenses are reimbursable if the assistance you provideis related to the subject matter of the Investigation or any Investigation IndemnifiedMatter.
11.   You have returned to Nortel Networks any and all property of Nortel Networks that was in yourpossession and/or subject to your control, whether such material shall be written instrumentsor tapes in electronic and/or recorded format.
Nortel Networks Corporate Procedure 206.01 states that “all documents, messages or datacomposed, sent, or received through the network of Nortel Networks in any form are andremain at all times the property of Nortel Networks”. In addition, all work product thatyou have produced during your employment with Nortel Networks is the property of NortelNetworks. Therefore, all information, (however recorded or stored) (“Information”) in yourpossession and/or that you have created in the course of your employment with NortelNetworks (whether or not currently in your possession or control) is the property of NortelNetworks. Information does not include copies in your possession of your records ofemployment and/or financial dealings between you and the Corporation.
You are aware that Nortel Networks has received a formal order of investigation from theUnited States Securities and Exchange Commission (“SEC”) that requires the preservation andcollection and disclosure of certain Information to the SEC. Nortel Networks is also aparty to various civil lawsuits and other investigations and may need access to certainInformation for those matters as well. Therefore, you took affirmative steps to preserveall information in your possession, custody and control (including information controlledby your assistant, if any), have left all such information in the possession and custody ofthe Corporation, and do not have any Information in your possession or custody.
The Information will be used by Nortel Networks for general business purposes and may also beprovided to regulatory authorities in response to their requests or



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February 21, 2006
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    disclosed in any relevant private litigation to which Nortel Networks is a party. Also,the Information may be used by and provided to entities within the Nortel Networks group ofcompanies and/or Nortel Networks external advisors. In some instances, the recipients ofthis Information will be located outside your geographic area. To the extent that theinformation contains any personal information, you consent to the collection, transfer anddisclosure of that information by Nortel Networks to Nortel Networks entities, thirdparties and regulatory authorities within and outside of your geographic area for thepurposes set out above.
    The commitments of this section 11 shall not apply to documents previously furnished toyour counsel in connection with the Investigation, and you agree that you and your counselshall use such Information solely for the purpose of representing you in connection withInvestigation Indemnified Matters and not for any other purpose, without the expresswritten consent of the Corporation.
12.   You hereby agree that you shall not during the Salary Continuation Period whether on your ownbehalf or jointly with others, and whether as an employee, director, principal, agent,consultant or in any other capacity in competition with the Corporation, be directly orindirectly (i) employed or engaged in, or (ii) perform services in respect of, or (iii) beotherwise concerned with:
   (i)   the research into, development, manufacture, supply or marketing of anyproduct which is of the same or substantially similar type to any product researched,or developed, or manufactured, or supplied, or marketed by the Corporation during thetwelve months immediately preceding December 23, 2005; or
   (ii)   the development or provision of any services (including but not limited totechnical and product support, or consultancy or customer services) which are of thesame or substantially similar type to any services provided by the Corporation duringthe twelve months immediately preceding December 23, 2005;
    without the prior written consent of the Corporation, which consent shall not beunreasonably withheld;
    provided that, the provisions of this paragraph shall apply only in respect of products orservices with which you were either personally concerned or for which you were



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February 21, 2006
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    responsible while employed by the Corporation during the twelve months immediatelypreceding December 23, 2005; and
    provided further that, the provisions of this paragraph shall not restrict you fromaccepting employment with a company or other entity that provides products or services thatare in competition with products or services offered by the Corporation, so long as you arenot in the course of such employment during the Salary Continuation Period involved inactivities related to such competitive products or services with which you were eitherpersonally concerned or for which you were responsible while employed by the Corporationduring the twelve months immediately preceding December 23, 2005.
    You hereby agree that you shall not for the Salary Continuation Period whether on your ownbehalf or in conjunction with or, on behalf of any other entity, whether as an employee,director, principal, agent, consultant or in any other capacity directly or indirectly, forthe purpose of providing or attempting to provide products or services that compete withproducts or services offered by the Corporation as of December 23, 2005, (i) solicit or,(ii) assist in soliciting, or (iii) accept, or (iv) facilitate the acceptance of, or (v)deal with, customers or prospective customers:
  (i)   with whom you had personal contact or dealings on behalf of the Corporationduring the twelve months immediately preceding December 23, 2005; or
  (ii)   for whom you were, in a client-management capacity on behalf of theCorporation, directly responsible during the twelve months immediately precedingDecember 23, 2005,
    without the prior written consent of the Corporation, which consent shall not beunreasonably withheld.
    You hereby agree that, you will not for the Salary Continuation Period either on your ownaccount or in conjunction with or on behalf of any other person, company, business entity,or other organization and whether as an employee, principal, agent, consultant or in anyother capacity directly or indirectly (i) induce, or (ii) solicit, or (iii) entice or (iv)procure, any person who is an employee of the Corporation to leave the Corporation’s or anyassociated company’s employment (as applicable) where that person is an employee of theCorporation on December 23, 2005;



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    provided that, this provision shall neither (i) prohibit you from hiring, or causing anorganization for which you perform services to hire, any person who initially approachesyou and/or such organization to inquire about employment without having been solicited byyou to do so, nor (ii) be construed to apply to the placement of general advertisements foremployment on websites, in print publications or in other appropriate media.
13.   In consideration of the monies and other benefits to be provided to you as set forth herein,you hereby fully and completely release the Corporation, its subsidiaries and affiliates, andtheir respective directors, officers and employees, to the extent permitted by law, from anyand all real or pretended claims, causes of actions, rights, damages or injuries of any naturewhatsoever you may have had or now have, whether known or unknown, (except for promises andcommitments contained or preserved herein), arising from or connected with your employmentwith the Corporation or the termination thereof, including any and all such claims, causes ofaction, rights, damages or injuries arising under any statute, including, without limitation,the Labour Standards Act (An Act Respecting Labour Standards (Quebec)) or at common law.Furthermore, you understand that this release shall be binding upon you and your heirs,administrators, representatives, executors, successors, and assigns and its enforceabilityshall not be challenged.
    You acknowledge that you have read this letter and that you understand all of its terms andhave executed it voluntarily with full knowledge of its significance. Further, youacknowledge that you have had an adequate opportunity to review and consider thearrangements, including at your discretion, the right to discuss this Agreement with legalcounsel of your choice. Finally, you acknowledge that you understand you are herebygranting to the Corporation a full and final release as set forth above.
14.   This Agreement constitutes the entire understanding of the parties with respect to youremployment, including the cessation of your employment, and there are no promises,understandings or representations other than those expressly set forth or preserved herein.This Agreement may be modified only with a written instrument duly executed by you and theCorporation.
15.   This Agreement shall be governed by the laws of Ontario, Canada without regard to anyprovisions concerning conflict of laws. This Agreement may be delivered by facsimile andexecuted in counterparts, all of which, taken together, shall constitute one and the sameoriginal instrument.



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February 21, 2006
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16.   The parties agree that should any provision of this Agreement be declared or be determined byany court to be illegal or invalid, the validity of the remaining parts, terms or provisionsshall not be affected thereby and said illegal or invalid part, term, or provision shall bedeemed not to be a part of this Agreement.
17.   Nothing in this Agreement shall be construed to prevent the Corporation from providing you oryour prospective employer, as applicable, with an appropriate positive reference or letter ofrecommendation relating to your employment with the Corporation.
18.   Nothing in this Agreement shall affect the rights and obligations of any of the parties tothe Escrow Agreement, dated March 1, 2005, by and among the signatory Officers, NortelNetworks Corporation, and Computershare Trust Company of Canada.
Please acknowledge that the foregoing correctly and completely sets forth your understanding of thearrangements, and your acceptance hereof, by signing, dating and returning to me, the attachedsecond copy of this Agreement.
Yours truly,
/s/ William J. Donovan
William J. Donovan
Senior Vice-President, Human Resources
     /s/ B. McFadden

Brian McFadden

     February 22, 2006


Attach. Second copy of this Agreement