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                                                                   Exhibit 10.39

                    OFFICER RETENTION AND SEVERANCE AGREEMENT



                                                Effective Date: January 27, 1998




This Officer Retention and Severance Agreement (the "Agreement") is made and
entered into as of the date written above (the "Effective Date"), by and between

               Bay Networks, Inc., a Delaware corporation        (the "Company")
                             4401 Great America Parkway
                             Santa Clara,  California      95052

and

               [name]                                             ("Officer")
residing at    [street address]       
               [city, state, zip]

RECITALS

A.    The Officer is a Vice President of Bay Networks, Inc., or an officer of
      one of its subsidiaries of affiliates, who possesses valuable knowledge of
      the Company, its business and operations and the markets in which the
      Company competes.

B.    The Company draws upon the knowledge, experience and objective advice of
      Officer in order to manage its business for the benefit of the Company's
      stockholders.

C.    The Company recognizes that if there occurred a change of control or other
      event that could substantially change the nature and structure of the
      Company, the resulting uncertainty regarding the consequences of such an
      event could adversely affect the Company's ability to attract, retain and
      motivate its key employees, including Officer.

D.    On January 26, 1998, the Compensation Committee of the Company's Board of
      Directors approved the Executive Retention and Severance Plan, authorizing
      the terms of this Agreement.

E.    The Company believes that the existence of this Agreement will serve as an
      incentive to Officer to remain in the employ of the Company, and would
      enhance the Company's ability to call on and rely upon the Officer if a
      proposed change of control event were to occur.

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 2


F.    The Company and the Officer desire to enter into this Agreement in order
      (1) to encourage Officer to continue to devote Officer's full attention
      and dedication to the success of the Company, and (2) to provide specified
      compensation and benefits to the Officer in the event of a Termination
      Upon Change of Control, pursuant to the terms of this Agreement.



THE COMPANY AND OFFICER AGREE AS FOLLOWS:

1.      GENERAL

        1.1 Purpose. The purpose of this Agreement is to provide specified
compensation and benefits to the Officer in the event of a Termination Upon
Change of Control.

        1.2 No employment agreement. This Agreement does not obligate the
Company to continue to employ Officer for any specific period of time, or in any
specific role or geographic location. Subject to the terms of any applicable
written employment agreement between Company and Officer, Company may assign
Officer to other duties, and either Officer or Company may terminate Officer's
employment at any time for any reason.

        1.3 Defined terms. Capitalized terms used in this agreement shall have
the meanings set forth in section 4, unless the context clearly requires
otherwise.

2.      TERMINATION UPON CHANGE OF CONTROL

        2.1 Basic Severance Benefits. In the event of the Officer's termination
of employment under any circumstances, Officer shall be entitled to the basic
severance benefits described below.

               2.1.1 All salary and accrued vacation earned through the date of
Officer's termination shall be paid to Officer.

               2.1.2 Within ten (10) days of submission of proper expense
reports by the Officer, the Company shall reimburse the Officer for all expenses
reasonably and necessarily incurred by the Officer in connection with the
business of the Company prior to Officer's termination of employment.

               2.1.3 Officer shall receive the benefits, if any, under the
Company's 401(k) Plan, nonqualified deferred compensation plan, employee stock
purchase plan and other Company benefit plans to which Officer may be entitled
pursuant to the terms of such plans.

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 3

        2.2 Officer Cash Severance Benefits. In the event of the Officer's
Termination Upon Change of Control, Officer shall be entitled to the additional
officer severance benefits described below.

               2.2.1 Prorated bonus payment. Officer shall receive Officer's
target bonus or incentive payment for the year in which termination occurs, pro
rated through the date of termination and less applicable withholding, paid
within thirty (30) days of termination of employment.

               2.2.2 Cash severance payment. Officer shall receive a lump sum
payment in the amount of 125% of Officer's Target Annual Earnings, less
applicable federal and state withholding, paid within thirty (30) days of
termination of employment.

        2.3 Stock option acceleration.

               2.3.1 Acceleration at Termination Upon Change of Control. All
outstanding stock options granted and restricted stock issued by the Company to
the Officer prior to the Change of Control shall have their vesting accelerated
as to two years of additional vesting as of the date of such Termination Upon
Change of Control. The Company recognizes that the standard forms of Officer
Stock Option Agreement approved for use by the Company provide for an additional
one year of vesting upon a change of control, as defined in such Stock Option
Agreement. Notwithstanding any other provision in any stock option or employment
agreement or in this Agreement, the additional vesting provided in this
subsection shall be in lieu of and not in addition to any additional vesting
provided for in any other agreement, and to the extent such additional vesting
is provided under another agreement then the additional vesting provided in this
section shall be reduced such that the total vesting of any affected stock
option shall not exceed (1) the period of time between the grant of the option
(or specified initial measuring date for vesting purposes) and the Termination
Upon Change of Control, plus (2) two years.

               2.3.2 Acceleration upon non-assumption in a Change of Control. If
there is a Change of Control transaction in which outstanding stock options
granted and restricted stock issued by the Company prior to the transaction are
not fully assumed by the Successor, or replaced by fully equivalent substitute
options or restricted stock, then (1) all such options and restricted stock
shall have their vesting fully accelerated to be 100% vested prior to the
effective date of the Change of Control and (2) the Company shall provide
reasonable prior written notice to Officer of (a) the date such unexercised
options will terminate and (b) the period during which Officer may exercise the
fully vested options. Alternatively, the Company may elect to deliver to Officer
on the effective date of the Change of Control a cash payment equal to the
difference between (i) the aggregate exercise price of Officer's unexercised
options or restricted stock, whether vested unvested, and (ii) the value of the
consideration deliverable for an equivalent number of shares as a result of the
Change of Control transaction.

        2.4 Extended medical and dental benefits.

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 4


               2.4.1 Benefit continuation for twenty-one months.Officer shall
receive continued provision of the Company's standard employee medical and
dental insurance coverages, as elected by the Officer and in effect immediately
prior to the Change of Control, for twenty-one (21) months following the date of
termination.

               2.4.2 Continued medical coverage for U.S. residents. Thereafter,
if Officer resides in the United States, Officer shall be entitled to elect
continued medical insurance coverage in accordance with the applicable
provisions of U.S. federal law (COBRA). If such coverage included the Officer's
dependents immediately prior to the date of termination, such dependents also
shall be covered at Company expense during the extension period. For purposes of
title X of the Consolidated Budget Reconciliation Act of 1985 ("COBRA"), the
date of the "qualifying event" for Officer and his dependents shall be the date
upon which the Company-paid coverage terminates.

               2.4.3 Termination upon coverage under another plan.
Notwithstanding the above, in the event Officer becomes covered as a primary
insured (that is, not as a beneficiary under a spouse's plan) under another
employer's group health plan during the period provided for herein, Officer
promptly shall inform the Company and the Company shall cease provision of
continued group health insurance for Officer and any dependents.

        2.5 Consulting contract.

               2.5.1 Six-month consulting period. Officer shall be engaged as a
consultant to the Company for a period of six (6) months after a Termination
Upon a Change of Control (the "Consulting Period") to provide advice and assist
in the transition occasioned by the Change of Control.

               2.5.2 Consulting fee. During the Consulting Period Officer shall
receive a consulting fee in the amount of fifty percent (50%) of Target Annual
Earnings, payable in six equal monthly installments.

               2.5.3 Option continuation during Consulting Period. Officer's
stock options, if any, shall continue in effect during the Consulting Period, in
accordance with and to the maximum extent permissible under the terms of the
applicable option plans and agreements.

               2.5.4 Other employment not precluded. During the Consulting
Period Officer shall not be precluded from accepting other employment, provided
Officer is available to the Company at such times and for such consulting
matters as the Company may reasonably request.

3.      FEDERAL EXCISE TAX UNDER IRC SECTION 280G

        3.1 Election to reduce benefits subject to excise tax.If (1) any amounts
payable under this Agreement are characterized as excess parachute payments
pursuant to Section 4999 of the Internal Revenue Code, and (2) Officer thereby
would be subject to any United States federal excise tax due to that
characterization, then (3) the Officer may elect, in 

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 5


Officer's sole discretion, to reduce the amounts payable under this Agreement or
to have any portion of applicable options or restricted stock not vest in order
to avoid any "excess parachute payment" under Section 280G(b)(1) of the Internal
Revenue Code of 1986, as amended.

        3.2 Determination by independent public accountants. Unless the Company
and Officer otherwise agree in writing, any determination required under this
Section 3 shall be made in writing by independent public accountants agreed to
by the Company and the Officer (the "Accountants"), whose determination shall be
conclusive and binding upon Officer and the Company for all purposes. For
purposes of making the calculations required by this Section 3, the Accountants
may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and Officer shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make the required determinations. The Company shall bear all
fees and expenses the Accountants may reasonably charge in connection with the
services contemplated by this Section 3.

4.      DEFINITIONS

        4.1 Capitalized terms defined. Capitalized terms used in this Agreement
shall have the meanings set forth in this Section 4, unless the context clearly
requires a different meaning.

        4.2 "Cause" means:

               (a) theft; a material act of dishonesty or fraud; intentional
falsification of any employment or Company records; or the commission of any
criminal act which impairs Officer's ability to perform appropriate employment
duties under this Agreement;

               (b) improper disclosure or use of the Company's confidential,
business or proprietary information by Officer;

               (c) the Officer's conviction (including any plea of guilty or
nolo contendere) for a crime involving moral turpitude causing material harm to
the reputation and standing of the Company, as determined by the Company in good
faith; or

               (d) gross negligence or willful misconduct in the performance of
Officer's assigned duties (but not mere unsatisfactory performance).

        4.3 "Change of Control" means:

               (a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities of the Company under
an employee benefit plan of the Company, becomes the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the 

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 6



Exchange Act), directly or indirectly, of securities of the Company representing
50% or more of (A) the outstanding shares of common stock of the Company or (B)
the combined voting power of the Company's then-outstanding securities;

               (b) the Company is party to a merger or consolidation which
results in the holders of voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation;

               (c) the sale or disposition of all or substantially all of the 
Company's assets (or consummation of any transaction having similar effect);

               (d) there occurs a change in the composition of the Board of
Directors of the Company within a two-year period, as a result of which fewer
than a majority of the directors are Incumbent Directors; or

               (e) the dissolution or liquidation of the Company.

        4.4 "Company" shall mean Bay Networks, Inc., and, following a Change of
Control, any Successor that agrees to assume, or otherwise becomes bound to by
operation of law, all the terms and provisions of this Agreement.

        4.5 "Effective Date" means the day and year first set forth above.

        4.6 "Good Reason" means the occurrence of any of the following
conditions following a Change of Control, without Officer's written consent,
which condition(s) remain(s) in effect ten (10) days after written notice to the
Company from Officer of such condition(s):

               (a) a material decrease in Officer's base salary or target bonus 
amount;

               (b) assignment of Officer to responsibilities or duties that are
not a Substantive Functional Equivalent of the position which Officer occupied
prior to the Change of Control;

               (c) the relocation of Officer's work place for the Company to a
location more than 50 miles from the location of the work place prior to the
Change of Control; or

               (d) any material breach of this Agreement by the Company.

        4.7 "Incumbent Director" shall mean a director who either (1) is a
director of the Company as of the Effective Date of this Agreement, or (2) is
elected, or nominated for election, to the Board of Directors of the Company
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination, but (3) was 

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 7


not elected or nominated in connection with an actual or threatened proxy
contest relating to the election of directors to the Company.

        4.8 "Permanent Disability" means that:

               (a) the Officer has been incapacitated by bodily injury, illness
or disease so as to be prevented thereby from engaging in the performance of the
Officer's duties;

               (b) such total incapacity shall have continued for a period of
six consecutive months; and

               (c) such incapacity will, in the opinion of a qualified
physician, be permanent and continuous during the remainder of the Employee's
life.

        4.9 "Substantive Functional Equivalent" means an employment position
occupied by an Officer after a Change of Control that:

               (a) is in a substantive area of competence (such as, accounting;
engineering management; executive management; finance; human resources;
marketing, sales and service; operations and manufacturing; etc.) that is
consistent with Officer's experience and not materially different from the
position occupied prior to the Change of Control;

               (b) requires Officer to serve in a role and perform duties that
are functionally equivalent to those performed prior to the Change of Control
(such as, business unit manager with P&L responsibility; geographic sales
manager; marketing strategist; product line manager; R&D manager; section 16
corporate staff officer);

               (c) carries a title that does not connote a lesser rank or 
corporate role than the title (such as, vice president) held by Officer prior 
to the Change of Control;

               (d) does not otherwise constitute a material, adverse change in
Officer's responsibilities or duties, as measured against Officer's
responsibilities or duties prior to the Change of Control, causing it to be of
materially lesser rank or responsibility;

               (e) is identified as an executive officer, for purposes of the
rules promulgated under Section 16 of the Securities Exchange Act of 1934, of a
publicly traded Successor having net assets and annual revenues no less than
those of the Company prior to the Change of Control; and

               (f) reports directly to an executive officer, committee or board
of the Successor that is no less senior than the executive officer, committee or
board, as the case may be, to whom Officer reported at the Company prior to the
Change of Control.

        4.10 "Successor" means the Company as defined above and any successor or
assign to substantially all of its business and/or assets.
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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 8

        4.11 "Target Annual Earnings" means the sum of annual base salary plus
100% of annual bonus or incentive pay. If different sums would result from
calculations as of (a) the date thirty (30) days prior to the date that the
Company publicly announces it is conducting negotiations leading to a Change of
Control, (b) the date on which a Change of Control occurs or (c) the date of
Executive's Termination Upon Change of Control, then Target Annual Earnings
shall be determined by the calculation as of the specified date that yields the
highest value.

        4.12 "Termination Upon Change of Control" means:

               (a) any termination of the employment of the Officer by the
Company without Cause during the period commencing thirty (30) days prior to the
earlier of (1) the date that the Company first publicly announces it is
conducting negotiations leading to a Change of Control, or (2) the date that the
Company enters into a definitive agreement that would result in a Change of
Control (even though still subject to approval by the Company's stockholders and
other conditions and contingencies); and ending on the date which is twelve (12)
months after the Change of Control; or

               (b) any resignation by the Officer for Good Reason within twelve
(12) months after the occurrence of any Change of Control; but

               (c) "Termination Upon Change of Control" shall not include any
termination of the employment of the Officer (1) by the Company for Cause; (2)
by the Company as a result of the Permanent Disability of the Officer; (3) as a
result of the death of the Officer; or (4) as a result of the voluntary
termination of employment by the Officer for reasons other than Good Reason.

5.      EXCLUSIVE REMEDY

        5.1 Sole remedy for Termination Upon Change of Control. The payments and
benefits provided for in Sections 2 and 3 shall constitute the Officer's sole
and exclusive remedy for any alleged injury or other damages arising out of the
cessation of the employment relationship between the Officer and the Company in
the event of Officer's Termination Upon Change of Control.

        5.2 No other benefits payable. The Officer shall be entitled to no other
compensation, benefits, or other payments from the Company as a result of any
termination of employment with respect to which the payments and/or benefits
described in Sections 2 and 3 have been provided to the Officer, except as
expressly set forth in this Agreement or, subject to the provisions of sections
10 and 14, in a duly executed employment agreement between Company and Officer.

        5.3 Release of Claims. The Company may condition payment of the cash
severance and consulting benefits described in sections 2.2 and 2.5 of this
Agreement and the stock option acceleration described in section 2.3.1 upon the
delivery by Officer of a signed release of claims in a form reasonably
satisfactory to the Company; provided, however, that 

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                 PAGE 9



Officer shall not be required to release any rights Officer may have to be
indemnified by the Company.

6.      PROPRIETARY AND CONFIDENTIAL INFORMATION

The Officer agrees to continue to abide by the terms and conditions of the
Company's confidentiality and/or proprietary rights agreement between the
Officer and the Company.

7.      CONFLICT OF INTEREST; NON-SOLICITATION

        7.1 Agreement not to solicit. If Company performs its obligations to
deliver the severance benefits set forth in sections 2 and 3 of this Agreement,
then for a period of one (1) year after Officer's Termination Upon Change of
Control, Officer will not, directly or indirectly, solicit the services or
business of or in any other manner persuade any employee, distributor, vendor,
representative or customer of the Company to discontinue that person's or
entity's relationship with or to the Company.

        7.2 This provision shall not supersede or limit the more restrictive
terms of any other agreement by Officer to refrain from competition with or from
soliciting the employees or customers of Company.

8.      ARBITRATION

        8.1 Disputes subject to arbitration. Any claim, dispute or controversy
arising out of this Agreement, the interpretation, validity or enforceability of
this Agreement or the alleged breach thereof shall be submitted by the parties
to binding arbitration by the American Arbitration Association; provided,
however, that (1) the arbitrator shall have no authority to make any ruling or
judgment that would confer any rights with respect to the trade secrets,
confidential and proprietary information or other intellectual property of the
Company upon Officer or any third party; and (2) this arbitration provision
shall not preclude the Company from seeking legal and equitable relief from any
court having jurisdiction with respect to any disputes or claims relating to or
arising out of the misuse or misappropriation of the Company's intellectual
property. Judgment may be entered on the award of the arbitrator in any court
having jurisdiction.

        8.2 Site of arbitration. The site of the arbitration proceeding shall
be, at Officer's election, either (1) Santa Clara County, California or (2)
Middlesex County, Massachusetts or (3) if Officer's primary assigned work place
prior to the Change of Control was in neither California nor Massachusetts, a
mutually agreed site located within 25 miles of that work place.

        8.3 Cost and expenses borne by Company. All costs and expenses of
arbitration or litigation, including but not limited to reasonable attorneys
fees and other costs reasonably incurred by the Officer, shall be paid by the
Company. Notwithstanding the foregoing, if the Officer initiates the arbitration
or litigation, and the finder of fact finds that Officer's claims were totally
without merit or frivolous, then Officer shall be responsible for Officer's own
attorneys' fees.

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                PAGE 10


9.      INTERPRETATION

Officer and the Company agree that this Agreement shall be interpreted in
accordance with and governed by the laws of the State of California as applied
to contracts entered into and entirely to be performed within that state.

10.     CONFLICT IN BENEFITS; NONCUMULATION OF BENEFITS

        10.1 Effect of Agreement. This Agreement shall supersede all prior
arrangements, whether written or oral, and understandings regarding the subject
matter of this Agreement and shall be the exclusive agreement for the
determination of any payments and accelerated option vesting due upon Officer's
Termination Upon Change of Control, except as provided in sections 10.2, 10.3
and 14.

        10.2 No limitation of regular benefit plans. This Agreement is not
intended to and shall not affect, limit or terminate any plans, programs, or
arrangements of the Company that are regularly made available to a significant
number of employees or officers of the Company, including without limitation the
Company's stock option plans.

        10.3 Noncumulation of benefits. Officer may not cumulate cash severance
payments, stock option acceleration and excise tax adjustment or reimbursement
benefits under both this Agreement and another agreement. If Officer has any
other binding written agreement with the Company which provides that after a
Change of Control or termination of employment the Officer shall receive one or
more of the benefits described in sections 2.2, 2.5 and 3 of this Agreement
(i.e., the payment of cash compensation or prorated bonus, post-termination
consulting and adjustments or payments relating to federal excise tax), then
with respect to each such benefit the amount payable under this Agreement shall
be reduced by the corresponding amount paid or payable under such other
agreements.

11.     SUCCESSORS AND ASSIGNS

        11.1 Successors of the Company. The Company will require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. Failure of the Company to obtain such agreement shall be a material
breach of this Agreement.

        11.2 Acknowledgement by Company. If after a Change of Control the
Company (or any Successor) fails to reasonably confirm that it has performed the
obligation described in section 11.1 withinten (10) days after written notice
from Officer, Officer shall be entitled to terminate Officer's employment with
the Company for Good Reason, and to receive the benefits provided under this
Agreement in the event of Termination Upon Change of Control.

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OFFICER RETENTION AND SEVERANCE AGREEMENT                                PAGE 11


        11.3 Heirs and Representatives of Officer. This Agreement shall inure to
the benefit of and be enforceable by the Officer's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devises and legatees.

12.     NOTICES

For purposes of this Agreement, notices and all other communications provided
for in the Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, as follows:

               if to the Company:           Bay Networks, Inc.
                                                   Attention:    General Counsel
                                            4401 Great America Parkway
                                            Santa Clara, CA  95052

and if to the Officer at the address specified on the first page of this
Agreement. Either party may provide the other with notices of change of address,
which shall be effective upon receipt.

13.     NO REPRESENTATIONS

Officer acknowledges that in entering into this Agreement, Officer is not
relying and has not relied on any promise, representation or statement made by
or on behalf of the Company which is not set forth in this Agreement.

14.     MODIFICATION AND AMENDMENT

This Agreement may be modified, amended or superseded only by a supplemental
written agreement signed with the same formality as this Agreement by Officer
and by the Company. However, the noncumulation of benefits provision of section
10.3 shall apply to any subsequent agreement, unless (1) such provisions is
explicitly disclaimed in the subsequent agreement, and (2) the subsequent
agreement has been authorized by the Company's Board of Directors or a committee
thereof.

15.     VALIDITY

        15.1 Invalid provisions. If any one or more of the provisions (or any
part thereof) of this Agreement shall be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions (or any part thereof) shall not in any way be affected or impaired
thereby.

        15.2 Execution by two Company executive officers or directors.This
Agreement and any modifications or amendments shall require the signatures of
two executive officers or members of the Board of Directors of the Company.

        15.3 Consultation with legal and financial advisers. Officer
acknowledges that this Agreement confers significant legal rights, and may also
involve the waiver of rights 
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OFFICER RETENTION AND SEVERANCE AGREEMENT                                PAGE 12



under other agreements; that Company has encouraged Officer to consult with
Officer's personal legal and financial advisers; and that Officer has had
adequate time to consult with Officer's advisers before signing this agreement.

16.     SIGNATURES

The parties have executed this Agreement, intending to be legally bound as of
the Effective Date.


        OFFICER                                  BAY NETWORKS, INC.

                                         By:                        
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        Officer's signature              Printed name:                 
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Printed name:                            Title:                            
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                                         By:                       
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                                         Printed name:                 
                                                       -------------------------
                                         Title:                                
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