• Network Project to Enhance and Expand Administaff’s Information Technology Infrastructure, Supporting Company’s Growth in Personnel Management Field

SANTA CLARA, Calif. – May 24, 1999 – Nortel Networks* [NYSE/TSE: NT] today announced an agreement with Administaff, Inc. (NYSE: ASF) to build a high-speed computer network that will enhance and expand Administaff’s information technology infrastructure. The Nortel Networks Unified Networks* solution is designed to improve Administaff’s operating efficiencies, enhance its delivery of personnel management services to small- and medium-sized businesses across the country, and accommodate its national expansion program.

This network expansion project features a multi-service ATM (Asynchronous Transfer Mode) wide area network (WAN) and Gigabit Ethernet campus backbone. It will be able to carry Administaff’s Internet, data, voice and video traffic between the company’s Houston, Texas, headquarters; its service centers in Houston and Dallas, Texas; and its 25 sales offices throughout the United States. Applications supported by the network will include a secure web site to provide clients and worksite employees with real-time access to key personnel-related information, project management tracking systems, and video conferencing for training and remote-site interviewing.

"This network is important to the success of our long-term growth plans," said David C. Dickson, Administaff vice president of infrastructure and chief technology officer. "We believe the eventual convergence of voice, data and video through a single network will streamline network operations, realize cost savings and help increase Administaff’s overall value to its clients."

Administaff’s selection of Nortel Networks was based on the company’s IP (Internet Protocol) quality of service and its ability to bring together all aspects of data and voice communications in a single unified network. Nortel Networks’ strategic business partner on the planning, design and installation has been Houston-based OnSource Consulting.

"This network represents a strong collaborative effort with OnSource to create an infrastructure that will help Administaff achieve its long-term business objectives," said Mike Aquino, vice president of North American Business Partner operations for Nortel Networks. "This network places Administaff at the heart of the Internet revolution and positions the company to exploit a new set of applications which are driving network convergence."

The Network
Administaff’s network features an ATM WAN (Passport) and Gigabit Ethernet (Accelar) campus backbone to support its Houston headquarters. Nortel Networks’ Accelar* 1200 Layer 3 routing and BayStack* 450 switching technology will provide connectivity to Administaff’s operations centers and 25 sales offices. Administaff also is providing extranet switching for web site access by its client companies. The Optivity* Network Management System suite of network management tools is being used to monitor and configure equipment.

Administaff
Administaff is one of the nation’s leading Professional Employer Organizations, providing a comprehensive Personnel Management System that encompasses a broad range of services, including benefits and payroll administration, medical and workers’ compensation insurance programs, personnel records management, employer liability management, employee recruiting and selection, performance management, and training and development services to small- and medium-sized businesses. Administaff has 25 offices in 15 major markets and serves clients and worksite employees throughout the United States.

Nortel Networks delivers value to customers around the world through Unified Networks solutions, spanning mission-critical telephony and IP-optimized networks. Customers include public and private enterprises and institutions; Internet service providers; local, long-distance, cellular and PCS communications companies, cable television carriers, and utilities.

Nortel Networks’ common shares are listed on the New York, Toronto, Montreal, Vancouver, and London stock exchanges. Nortel Networks had 1998 revenues of US$17.6 billion and has approximately 75,000 employees worldwide.

* Nortel Networks, the Nortel Networks Globemark, Unified Networks, and How the world shares ideas are trademarks of Nortel Networks Corporation. Accelar, BayStack and Optivity are trademarks of Nortel Networks NA Inc.

For more information:

Dawn Slusher
Nortel Networks
408-495-1194
dslusher@baynetworks.com

Richard G. Rawson
Administaff
281-348-3225

Alan Dodd
Administaff
281-348-3105
alan_dodd@administaff.com

Or visit Nortel Networks’ website at www.nortelnetworks.com.

Or visit Administaff’s web-site at www.administaff.com.