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                                                                   EXHIBIT 10.29

November 10, 1997

Lloyd A. Carney
HOME ADDRESS REDACTED


         Re: Revised Compensation Package

Dear Lloyd:

This letter confirms our recent discussions regarding revisions to your
compensation package. In addition to the compensation and benefits described in
my March 18, 1997 letter to you, we have agreed that you shall receive the
following benefits:

Stock Options.

  You have been granted an option to purchase a total of 70,000 shares of stock
  at a per share price of $28.1250 which shall vest in two installments of 8,700
  shares on January 3, 2000, and 61,300 shares on January 3, 2001. This option
  will be subject to the terms and conditions of Bay Networks' standard stock
  option agreement.

In addition, you have been granted an option to purchase 60,000 shares of stock
at a per share price of $28.1250 which shall vest in four equal installments of
15,000 options on each of January 3, 1998, January 3, 1999, January 3, 2000 and
January 3, 2001. This option will be subject to the terms and conditions of Bay
Networks' standard stock option agreement.

Accelerated Vesting of Performance Stock Options.

The terms of your July 25, 1996 grant of the option to purchase 100,000 shares
of stock under the Bay Networks' Performance Stock Option Program are revised to
provide that the option shall vest, without regard to the determination or
achievement of Performance Goals, at a rate of 15,480 shares on January 3, 1998;
28,000 shares on January 3, 1999; and 44,300 shares on January 3, 2000. All
other terms shall remain the same.

Special Bonus.

If you remain employed by Bay Networks on January 3, 2001, and the closing sales
price of Bay Networks stock as listed on the New York Stock Exchange on that
date or, if January 3, 2001 is not a trading day, then on the last trading day
before that date, is less than $46.9608, you will receive a Special Bonus equal
to $1,130,146.00 (One million, one hundred thirty thousand, one hundred forty
six dollars) minus 60,000 (Sixty Thousand) times the difference between closing
sales price of Bay Networks' stock as listed on the New York Stock Exchange on
that date minus $28.1250.




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Lloyd A. Carney
November 10, 1997
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Benefits Upon Termination.

If your employment with Bay Networks terminates as a result of your disability
or your death, you or your heirs and/or beneficiaries shall receive: 1) a lump
sum payment equal to 12 months of your base salary, less applicable withholdings
and deductions; 2) payment of an amount equal to your target Annual Bonus for
the fiscal year in which your disability or death occurs; and 3) your
outstanding stock options shall be subject to accelerated vesting so as to
become 100% vested on the date of your termination of employment.

Lloyd, I believe that the foregoing accurately represents the agreements you and
I have recently reached regarding your compensation. This letter, together with
my letter to you of March 18, 1997, and the relocation agreement and note which
were signed by you upon your relocation to California, states the entire
agreement between Bay Networks and you relating to your employment. Please
indicate your acceptance of these terms by signing and returning the duplicate
original of this letter. As always, I am available to discuss any questions or
concerns you may have regarding your compensation package.

Very truly yours,

BAY NETWORKS, INC.

By: /s/ DAVID L. HOUSE
   --------------------------------------------
David L. House
Chairman, President and Chief Executive Officer

ACCEPTED AND AGREED:

By: /s/ LLOYD A. CARNEY
   --------------------------------------------
Lloyd A. Carney

Dated:            November 21, 1997