FORE SYSTEMS INC /DE/
SC 14D9, 1999-04-30
COMPUTER COMMUNICATIONS EQUIPMENT
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 
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                                 SCHEDULE 14D-9
 
                     SOLICITATION/RECOMMENDATION STATEMENT
                      PURSUANT TO SECTION 14(d)(4) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
 
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                               FORE Systems, Inc.
                           (Name of Subject Company)
 
                               FORE Systems, Inc.
                      (Name of Person(s) Filing Statement)
 
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                     Common Stock, Par Value $.01 Per Share
                         (Title of Class of Securities)
 
                                  34 5449 102
                     (Cusip Number of Class of Securities)
 
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                                 THOMAS J. GILL
                     President and Chief Executive Officer
                               FORE Systems, Inc.
                                1000 FORE Drive
                      Warrendale, Pennsylvania 15086-7502
                                 (724) 742-4444
 (Name, Address and Telephone Number of Person Authorized to Receive Notice and
            Communications on Behalf of Person(s) Filing Statement)
 
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                                   Copies to:
 
   CHRISTOPHER H. GEBHARDT, ESQ. Vice    MARLEE S. MYERS, ESQ. Morgan, Lewis &
    President, Corporate Counsel and      Bockius LLP One Oxford Centre, 32nd
 Secretary FORE Systems, Inc. 1000 FORE  Floor Pittsburgh, Pennsylvania 15219-
 Drive Warrendale, Pennsylvania 15086-            1417 (412) 560-3300
          7502 (724) 742-4444
 
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ITEM 1. Security and Subject Company.
 
  The name of the subject company is FORE Systems, Inc., a Delaware
corporation (the "Company"), and the address of the principal executive
offices of the Company is 1000 FORE Drive, Warrendale, Pennsylvania 15086-
7502. The title of the class of equity securities to which this statement
relates is the Common Stock, par value $.01 per share (the "Common Stock"), of
the Company.
 
ITEM 2. Tender Offer of the Bidder.
 
  This statement relates to the cash tender offer (the "Offer") disclosed in a
Tender Offer Statement on Schedule 14D-1, dated April 30, 1999 (the "Schedule
14D-1"), of GEC Acquisition Corp., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of GEC Incorporated, a Delaware corporation
("Parent"), a wholly owned subsidiary of The General Electric Company, p.l.c.,
a public limited company organized under the laws of England and Wales ("GEC,
p.l.c.") (not affiliated with the U.S. based corporation with a similar name)
to purchase all of the outstanding shares of Common Stock of the Company (the
"Shares") at a price of $35.00 per Share (the "Offer Price"), net to the
seller in cash, subject to certain conditions set forth therein. The Offer is
being made by the Purchaser pursuant to the Agreement and Plan of Merger,
dated as of April 26, 1999, by and among the Company, Parent and the Purchaser
(the "Merger Agreement"), a copy of which is filed as Exhibit 1 hereto and
incorporated herein by reference. Subject to certain terms and conditions of
the Merger Agreement, the Purchaser will be merged with and into the Company
(the "Merger") as soon as practicable after the consummation of the Offer,
with the Company surviving the Merger (the "Surviving Corporation") and
becoming a wholly owned subsidiary of Parent. The Schedule 14D-1 states that
the address of the principal executive offices of Parent and the Purchaser is
1500 Mittel Boulevard, Wood Dale, Illinois 60191-1073 (c/o Videojet Systems
International, Inc.). A copy of the press release issued by the Company and
GEC, p.l.c. on April 26, 1999 is filed as Exhibit 2 hereto and incorporated
herein by reference.
 
ITEM 3. Identity and Background.
 
  (a) The name and business address of the Company, which is the entity filing
this statement, are set forth in Item 1 above.
 
  (b) Except as described or referred to below, there exists on the date
hereof no material contract, agreement, arrangement or understanding and no
actual or potential conflict of interest between the Company or its affiliates
and (1) the Company or its executive officers, directors or affiliates or (2)
GEC, p.l.c., Parent, the Purchaser or their executive officers, directors or
affiliates.
 
Arrangements with Directors, Executive Officers or Affiliates of the Company
 
  Certain contracts, agreements, arrangements and understandings between the
Company and certain of its directors, executive officers and affiliates are
described in the Company's Information Statement in the sections entitled
"Board of Directors--Compensation of Directors" and "Executive Compensation--
Summary Compensation Table" and "--Arrangements Regarding Termination of
Employment." The Information Statement is attached hereto as Annex A and
incorporated herein by reference.
 
  In connection with the transactions contemplated by the Merger, the
following agreements were entered into: the Merger Agreement, the Stockholder
Agreement dated as of April 26, 1999, by and among Parent, the Purchaser and
two of the founding stockholders of the Company (the "Founding Stockholders")
listed on Annex A thereto (the "Stockholder Agreement"), the Stock Option
Agreement dated as of April 26, 1999 between the Company and Purchaser (the
"Stock Option Agreement"), employment and consulting agreements between the
Company and certain of its executives (the "Employment Agreements") and the
Confidentiality Agreement dated as of March 17, 1999 between the Company and
GEC, p.l.c. (the "Confidentiality Agreement"). A copy of the Stockholder
Agreement is filed as Exhibit 3 hereto and incorporated herein by reference. A
copy of the Stock Option Agreement is filed as Exhibit 4 hereto and
incorporated herein by reference. Copies of the Employment Agreements are
filed as Exhibits 5, 6, 7, 8, 9, 10, 11, 12 and 13 hereto and incorporated
herein by reference. A copy of the Confidentiality Agreement is filed as
Exhibit 14 hereto and incorporated herein by reference.
 
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The Merger Agreement
 
  The following summary is qualified in its entirety by reference to the
complete text of the Merger Agreement which is filed as Exhibit 1 hereto and
incorporated herein by reference. Capitalized terms used but not defined
herein shall have the meanings given to them in the Merger Agreement.
 
  The Merger Agreement provides that following the satisfaction of the
conditions described below under "Conditions to the Merger," the Purchaser
will be merged with and into the Company, and each outstanding Share (other
than Shares held by stockholders who perfect their appraisal rights under
Delaware law, Shares owned by the Company as treasury stock and Shares owned
by Parent or any direct or indirect wholly owned subsidiary of Parent or of
the Company) will be converted into the right to receive the Per Share Merger
Consideration, without interest.
 
  Vote Required to Approve Merger. The Delaware General Corporation Law
("DGCL") requires, among other things, that the adoption of any plan of merger
or consolidation of the Company be approved by the Board and generally by a
majority of the holders of the Company's outstanding voting securities. The
Board has approved the Offer and the Merger. Consequently, the only additional
action of the Company that may be necessary to effect the Merger is approval
by such stockholders if the "short-form" merger procedure described below is
not available. Under the DGCL, the affirmative vote of holders of a majority
of the outstanding Shares (including any Shares owned by the Purchaser), is
generally required to approve the Merger. If the Purchaser acquires, through
the Offer or otherwise, voting power with respect to at least a majority of
the outstanding Shares (which would be the case if the Minimum Condition were
satisfied and the Purchaser were to accept for payment Shares tendered
pursuant to the Offer), it would have sufficient voting power to effect the
Merger without the vote of any other stockholder of the Company. However, the
DGCL also provides that if a parent company owns at least 90% of each class of
stock of a subsidiary, the parent company can effect a short-form merger with
that subsidiary without the action of the other stockholders of the
subsidiary. Accordingly, if, as a result of the Offer or otherwise, the
Purchaser acquires or controls the voting power of at least 90% of the
outstanding Shares, the Purchaser could, and intends to, effect the Merger
without prior notice to, or any action by, any other stockholder of the
Company.
 
  Conditions to Obligations of Each Party Under The Merger Agreement. The
respective obligations of Parent and the Purchaser to effect the Merger under
the Merger Agreement are subject to the satisfaction at or prior to the
Effective Time of the following conditions, any or all of which may be waived
by Parent and the Purchaser, in whole or in part, to the extent permitted by
applicable law: (a) the Merger Agreement and the Merger shall have been
approved and adopted by the requisite vote of the stockholders of the Company,
if required by applicable law; (b) no court or governmental authority shall
have enacted, issued, promulgated, enforced or entered any law or order
(whether temporary, preliminary or permanent) which is in effect and which has
the effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger; (c) the applicable waiting period under the HSR Act shall have
expired or been terminated; and (d) the Purchaser, Parent or their affiliates
shall have accepted for payment and purchased Shares pursuant to and subject
to the conditions of the Offer.
 
  Termination of the Merger Agreement. The Merger Agreement may be terminated
and the Offer and the Merger may be abandoned at any time (notwithstanding
approval of the Merger by the stockholders of the Company) prior to the
Effective Time: (a) by mutual written consent of Parent, the Purchaser and the
Company; (b) by Parent, the Purchaser or the Company if any court of competent
jurisdiction or other governmental authority shall have issued a final order
or taken any other final action restraining, enjoining or otherwise
prohibiting the consummation of the Offer or the Merger and such order or
other action is or shall have become nonappealable; (c) by Parent or the
Purchaser if, due to an occurrence or circumstance which would result in a
failure to satisfy certain conditions specified in the Merger Agreement, the
Purchaser shall have (i) failed to commence the Offer within the time required
by Regulation 14D under the Exchange Act, (ii) terminated the Offer without
purchasing the Shares pursuant to the Offer, or (iii) failed to accept for
payment Shares pursuant to the Offer prior to July 16, 1999 (the "Termination
Date"); (d) by the Company if (i) there shall not have been (x) any breach or
breaches of any representation or warranty that, individually or in the
aggregate, have
 
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resulted in or would reasonably be expected to result in a material adverse
effect on the Company or (y) any breach or breaches of a covenant or agreement
on the part of the Company under this Agreement or the Stock Option Agreement
that, individually or in the aggregate, materially adversely affect (or
materially delay) the consummation of the Offer and the Purchaser shall have
(A) failed to commence the Offer within the time required by Regulation 14D
under the Exchange Act, (B) terminated the Offer without purchasing any Shares
pursuant to the Offer, or (C) failed to accept for payment Shares pursuant to
the Offer prior to the Termination Date, or (ii) prior to the purchase of
Shares pursuant to the Offer, concurrently with the execution of an
Acquisition Agreement (as defined herein) under the circumstances described
below under "Acquisition Proposals," provided that such termination under this
clause (ii) shall not be effective unless the Company and the Board shall have
complied with all their obligations described below under "Acquisition
Proposals" and until payment of the Termination Fee (as defined herein); (e)
by Parent or the Purchaser prior to the purchase of Shares pursuant to the
Offer, if (i) the Purchaser is entitled to terminate the Offer pursuant to
certain conditions of the Offer if there shall have been any breach of any
covenant or agreement on the part of the Company under the Merger Agreement or
the Stock Option Agreement which materially adversely affects (or materially
delays) the consummation of the Offer, which shall not have been cured prior
to the earlier of (A) 10 days following notice of such breach or (B) two
business days prior to the date on which the Offer expires; provided, however,
that the Company shall have no right to cure any breach of the provisions
described below under "Acquisition Proposals," (ii) the Board or any committee
thereof shall have withdrawn or modified (including by amendment of the
Schedule 14D-9) in a manner adverse to the Purchaser its approval or
recommendation of the Offer, the Merger or the Merger Agreement or shall have
recommended to the Company's stockholders a Third Party Acquisition (as
defined herein), or (iii) there shall not have been validly tendered and not
withdrawn prior to the expiration of the Offer at least a majority of the
Shares on a fully diluted basis; or (f) by the Company prior to the purchase
of any Shares pursuant to the Offer if (i) there shall have been a breach of
any representation or warranty in the Merger Agreement on the part of Parent
or the Purchaser which materially adversely affects (or materially delays) the
consummation of the Offer, or (ii) there shall have been a breach of any
covenant or agreement in the Merger Agreement on the part of Parent or the
Purchaser which materially adversely affects (or materially delays) the
consummation of the Offer which shall not have been cured prior to the earlier
of (A) 10 days following notice of such breach, and (B) two business days
prior to the date on which the Offer expires.
 
  Acquisition Proposals. Pursuant to the Merger Agreement, the Company has
agreed that it will not, and will not permit any of its subsidiaries, or any
of its or their officers, directors, employees, representatives, agents or
affiliates, including any investment banker, attorney or accountant retained
by the Company or any of its subsidiaries (collectively, "Representatives")
to, directly or indirectly, (a) initiate, solicit or encourage or otherwise
facilitate (including by way of furnishing information) or take any other
action to facilitate, any inquiries or the making of any proposal or offer
that constitutes, or may reasonably be expected to lead to, an Acquisition
Proposal (as defined herein), (b) enter into or maintain or continue
discussions or negotiate with any person regarding an Acquisition Proposal or
in furtherance of such inquiries or to obtain an Acquisition Proposal, or (c)
agree to, approve, recommend or endorse any Acquisition Proposal, or authorize
or permit any of the Representatives of the Company or any of its subsidiaries
to take any such action, and the Company shall promptly notify Parent of any
such inquiries and proposals hereafter received by the Company or any of its
subsidiaries or by any such Representative, relating to any of such matters;
provided, however, that nothing contained in the Merger Agreement shall
prohibit the Board, at any time prior to the earlier to occur of acceptance
for payment of Shares pursuant to the Offer and adoption of the Merger
Agreement by the stockholders of the Company, from furnishing information
(pursuant to a customary confidentiality agreement no more favorable to the
party receiving information than the Confidentiality Agreement (as defined
herein) and consistent with the Company's obligations under the Merger
Agreement) to, or engaging in discussions or negotiations with, any person in
response to an unsolicited bona fide written Acquisition Proposal of such
person that the Board determines is reasonably likely to constitute a
Qualifying Proposal (as defined herein), if, and only to the extent that, (i)
the Board, after consultation with outside legal counsel to the Company,
determines in good faith that failure to do so would result in a breach of the
fiduciary duty of the Board to the stockholders of the Company under
applicable law, and (ii) prior to furnishing such information to, or entering
into discussions or negotiations with, such person the Company provides
written notice to Parent to the effect that it is furnishing
 
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information to, or entering into discussions or negotiations with, such person
and the Company complies with certain notification provisions of the Merger
Agreement. The Company has also agreed to cease and terminate any existing
solicitation, initiation, encouragement, activity, discussion or negotiation
with any persons conducted heretofore by it or its Representatives with
respect to any Acquisition Proposal. It is understood that any violation of
the restrictions described above by any Representative of the Company or any
of its subsidiaries, whether or not such person is purporting to act on behalf
of the Company or otherwise, shall be deemed to be a breach of the Merger
Agreement by the Company.
 
  The Merger Agreement provides further that, except as described below,
neither the Board nor any committee thereof shall (a) withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Parent or the
Purchaser, the approval or recommendation by the Board of the Offer or the
Merger, (b) approve or recommend, or propose publicly to approve or recommend,
any Acquisition Proposal, or (c) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any Acquisition
Proposal. Notwithstanding the foregoing, prior to the earlier to occur of
acceptance for payment of Shares pursuant to the Offer or adoption of the
Merger Agreement by the stockholders of the Company, the Board may terminate
the Merger Agreement but only (a) to the extent that the Board after
consultation with outside legal counsel to the Company, determines in good
faith that failure to do so would result in a breach of the fiduciary duty of
the Board to the stockholders of the Company under applicable law, (b) if the
Company and the Board have complied with all the provisions described in this
subsection on "Acquisition Proposals", (c) after the second business day
following Parent's receipt of written notice advising Parent that the Board is
prepared to accept a Qualifying Proposal, specifying the principal terms and
conditions of such Qualifying Proposal and identifying the person making such
Qualifying Proposal (during which two day period the Company will negotiate in
good faith with Parent or Purchaser concerning any amendments proposed by
Parent or Purchaser), and (d) if concurrently with such termination, the
Company enters into an Acquisition Agreement with respect to such Qualifying
Proposal and pays to Parent the Termination Fee.
 
  In addition, under the Merger Agreement, the Company has agreed to promptly
advise Parent, orally and in writing, of any request for information or of any
Acquisition Proposal, the principal terms and conditions of such request or
Acquisition Proposal and the identity of the person making such request or
Acquisition Proposal. The Company shall keep Parent reasonably informed of the
status and details (including amendments or proposed amendments) of any such
request or Acquisition Proposal.
 
  Nothing contained in the Merger Agreement shall prohibit the Company from
taking and disclosing to the stockholders a position contemplated by Rule 14e-
2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders which the Board, after consultation with outside legal
counsel to the Company, determines in good faith is required by applicable
law; provided that neither the Board nor any committee thereof approves or
recommends, or publicly proposes to approve or recommend, an Acquisition
Proposal unless the Company and the Board have complied with the terms of the
Merger Agreement. Notwithstanding anything to the contrary, the Company will
duly call, give notice and hold the stockholders meeting, if required by the
DGCL, for the purpose of considering and taking action upon this Merger
Agreement and the Merger whether or not the Board has determined at any time
after the date hereof it is no longer advisable for the stockholders of the
Company to adopt the Merger Agreement.
 
  "Acquisition Proposal" means an inquiry, offer or proposal that is made
after the date of the Merger Agreement regarding any of the following (other
than the transactions contemplated by the Merger Agreement) involving the
Company: (a) any merger, consolidation, share exchange, recapitalization,
liquidation, dissolution, business combination or other similar transaction;
(b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition
of a substantial portion of the assets of the Company and its subsidiaries,
taken as a whole, or of any Material Business (as defined herein) or of any
subsidiary or subsidiaries responsible for a Material Business in a single
transaction or series of related transactions; (c) any acquisition of 15% or
more of the outstanding shares of capital stock of the Company or the filing
of a registration statement under the Securities
 
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Act in connection therewith or any other acquisition or disposition the
consummation of which would prevent or materially diminish the benefits to
Parent of the Merger; or (d) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing. "Qualifying Proposal" means any written proposal made by a third
party after the date of the Merger Agreement to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or other similar transaction, all the Shares then
outstanding or the assets of the Company and its subsidiaries as an entirety
which the Board determines in good faith (x) (based on the advice of a
financial advisor of nationally recognized reputation) that such proposal has
a reasonable likelihood of being consummated and (y) (based on the written
opinion of a financial advisor of nationally recognized reputation) that such
proposal would, if consummated, be superior to the Company's stockholders from
a financial point of view (taking into account any changes to the financial
terms of the Merger Agreement proposed by Parent or Purchaser in response to
such proposal) when compared to the Offer, the Merger and the transactions
contemplated by the Merger Agreement, taken as a whole. "Material Business"
means any business (or the assets needed to carry out such business) that
contributed or represented 15% or more of the net sales, the net income or the
assets (including equity securities) of the Company and its subsidiaries taken
as a whole. "Third Party Acquisition" means (a) the acquisition of the Company
by merger, consolidation, share exchange, recapitalization, liquidation,
dissolution, business combination or other similar transaction by any person
(which includes for these purposes a "person" as defined in Section 13(d)(3)
of the Exchange Act) other than Parent, the Purchaser or any affiliate thereof
(a "Third Party"); (b) the acquisition by a Third Party of more than 50% of
the assets of the Company and its subsidiaries taken as a whole; (c) the
acquisition by a Third Party of 50% or more of the outstanding Shares or 50%
or more of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Company; (d) the adoption by the Company of a
plan of liquidation or the declaration or payment of an extraordinary
dividend; or (e) the purchase by the Company or any of its subsidiaries of
more than 30% of the outstanding Shares.
 
  Fees and Expenses. Except with respect to the circumstances described below,
the Merger Agreement provides that each of Parent, the Purchaser and the
Company will bear its own fees and expenses in connection with the Merger
Agreement.
 
  The Merger Agreement provides that (a) if Parent or the Purchaser terminates
the Merger Agreement pursuant to the provisions described above under clause
(e)(i) of "Termination of the Merger Agreement" (other than a termination
resulting from an event or circumstance that causes a material adverse effect
with respect to the Company after the date of the Merger Agreement, which
event or circumstance was not caused by the willful or intentional action or
inaction by the Company), the provisions described above under clause (e)(ii)
of "Termination of the Merger Agreement" (other than as a result of a breach
of the provisions described above under "Acquisition Proposals") or the
provisions described under clause (e)(iv) of "Termination of the Merger
Agreement," and in any such case, any proposal for a Third Party Acquisition
shall have been made on or prior to the date of such termination and, in any
such case, within 12 months thereafter the Company enters into an agreement
with respect to the consummation of, or otherwise consummates, a Third Party
Acquisition, (b) Parent or the Purchaser terminates the Merger Agreement
pursuant to the provisions described above under clause (e)(ii) of
"Termination of the Merger Agreement" as a result of a breach of the
provisions described above under "Acquisition Proposals" or pursuant to the
provisions described above under clause (e)(iii) of "Termination of the Merger
Agreement," or (c) the Company terminates the Merger Agreement pursuant to the
provisions described above under clause (d)(ii) of "Termination of the Merger
Agreement," then, in each case, the Company (A) shall pay to Parent, within
two business days following the execution and delivery of such agreement or
such occurrence, as the case may be, or simultaneously with such termination
pursuant to the provisions described above under clause (d)(ii) of
"Termination of the Merger Agreement," a fee, in cash, of $135 million (a
"Termination Fee"); plus, in the event that the Stock Option Agreement
terminates in connection with the termination of the Merger Agreement giving
rise to the Termination Fee, an additional amount, not in excess of $22.5
million, as reimbursement for Expenses (as defined herein).
 
  Conduct of Business of the Company. Pursuant to the Merger Agreement, the
Company has agreed that, prior to the Effective Time, unless otherwise
expressly contemplated by the Merger Agreement or consented
 
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to in writing by Parent, it will and will cause each of its subsidiaries to:
(a) operate its business in the usual and ordinary course consistent with past
practices; (b) use reasonable efforts to preserve intact its business
organization, maintain its rights and franchises, retain the services of its
respective key employees and maintain its relationships with its respective
customers and suppliers and others having business dealings with it; (c)
maintain and keep its properties and assets in as good repair and condition as
at present, ordinary wear and tear excepted, and maintain supplies and
inventories in quantities consistent with its customary business practice; and
(d) use reasonable efforts to keep in full force and effect insurance and
bonds comparable in amount and scope of coverage to that currently maintained.
 
  Prohibited Actions by the Company. Under the Merger Agreement, the Company
has agreed that, except as expressly contemplated by the Merger Agreement or
otherwise consented to in writing by Parent, from the date of the Merger
Agreement until the Effective Time, it will not do, and will not permit any of
its subsidiaries to do, any of the following: (a)(i) increase the compensation
payable to or to become payable to any director or employee, except for
increases in salary or wages of employees in the ordinary course of business
and consistent with past practice; (ii) grant any severance or termination pay
(other than pursuant to the normal severance policy or practice of the Company
or its subsidiaries as in effect on the date of the Merger Agreement) to, or
enter into or amend in any material respect any employment or severance
agreement with, any employee; (iii) establish, adopt, enter into or amend in
any material respect any collective bargaining agreement or Benefit Plan of
the Company or its subsidiaries except as required by applicable law; or (iv)
take any action to accelerate any rights or benefits, or make any material
determinations not in the ordinary course of business consistent with past
practice, under any collective bargaining agreement or Benefit Plan of the
Company or its subsidiaries; (b) declare, set aside or pay any dividend on, or
make any other distribution in respect of (whether in cash, stock or
property), outstanding shares of capital stock, except for dividends by a
wholly owned subsidiary of the Company to the Company or another wholly owned
subsidiary of the Company; (c) redeem, purchase or otherwise acquire, or offer
to redeem, purchase or otherwise acquire any outstanding shares of capital
stock of, or other equity interests in, or any securities that are convertible
into or exchangeable for any shares of capital stock of, or other equity
interests in, or any outstanding options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in, the
Company or any of its subsidiaries (other than (i) any such acquisition by the
Company or any of its wholly owned subsidiaries directly from any wholly owned
subsidiary of the Company in exchange for capital contributions or loans to
such subsidiary, or (ii) any purchase, forfeiture or retirement of Shares or
the Stock Options occurring pursuant to the terms (as in effect on the date of
the Merger Agreement) of any existing Benefit Plan of the Company or any of
its subsidiaries; (d) effect any reorganization or recapitalization, or split,
combine or reclassify any of the capital stock of, or other equity interests
in, the Company or any of its subsidiaries or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of such capital stock or such equity interests; (e)
offer, sell, issue or grant, or authorize the offering, sale, issuance or
grant of, any shares of capital stock of, or other equity interests in, any
securities convertible into or exchangeable for any shares of capital stock
of, or other equity interests in, or any options, warrants or rights of any
kind to acquire any shares of capital stock of, or other equity interests in,
or any bonds, debentures, notes or other indebtedness of the Company having
the right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which stockholders of the Company may
vote or other voting securities, of the Company or any of its subsidiaries, or
any "phantom" stock, "phantom" stock rights, stock appreciation rights or
stock-based performance units, other than issuances of Shares upon the
exercise of the Stock Options outstanding at the date of the Merger Agreement
in accordance with the terms thereof (as in effect on the date of the Merger
Agreement); (f) acquire or agree to acquire by merging or consolidating with,
by purchasing an equity interest in or a portion of the assets of, or in any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire any
assets of any other person (other than the purchase of assets from suppliers
or vendors in the ordinary course of business and consistent with past
practice); (g) sell, lease, exchange or otherwise dispose of, or grant any
lien with respect to any of the properties or assets (including technological
assets) of the Company or any of its subsidiaries, except for dispositions of
excess or obsolete assets, sales of inventories in the ordinary course of
business and consistent with past practice and the licensing of software to
customers consistent with past practice; (h) adopt any amendments to its
certificate of incorporation or bylaws or
 
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other organizational documents; (i) effect any change in any accounting
methods, principles or practices of the Company, except as may be required by
a change in generally accepted accounting principles, or any change in tax
accounting; (j) (i) incur any indebtedness, issue or sell any debt securities
or warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having the
economic effect of any of the foregoing, except for short-term borrowings
incurred in the ordinary course of business consistent with past practice, or
(ii) make any loans, advances or capital contributions to, or investments in,
any other person other than to or in the Company or any direct or indirect
wholly owned subsidiary of the Company; (k) enter into any contract which, if
such contract is entered into, would be a material contract; (l) make or agree
to make any new capital expenditure or expenditures other than the capital
expenditures contemplated by the Company's annual operating plan for 1999, a
copy of which was furnished to Parent prior to the execution of the Merger
Agreement; (m) make any non-routine tax election or settle or compromise any
material tax liability or refund; (n) (i) pay, discharge or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved against in,
or contemplated by, the most recent consolidated financial statements (or the
notes thereto) of the Company included in the documents filed with the SEC
from April 1, 1997 to the date of the Merger Agreement or incurred in the
ordinary course of business consistent with past practice or (ii) cancel any
material indebtedness (individually or in the aggregate) or waive any claims
or rights of substantial value; (o) enter into any new agreements with, or
commitments to, insurance brokers or advisers extending beyond one year or
extend any insurance policy beyond one year (including, for the avoidance of
doubt, the directors' and officers' liability insurance policies described
under "Indemnification of Directors"); or (p) agree in writing or otherwise to
do any of the foregoing.
 
  Directors. The Merger Agreement provides that promptly upon the acceptance
for payment of, and payment by the Purchaser for, any Shares pursuant to the
Offer, the Purchaser shall be entitled to designate directors on the Board.
See the Company's Information Statement, attached hereto as Annex A.
 
  Stock Options. The Merger Agreement provides that upon consummation of the
Merger, all then outstanding Stock Options and all Shares subject to a vesting
requirement ("Restricted Stock") shall be canceled in exchange for a cash
payment to the holder of a Stock Option or Restricted Stock award equal to (a)
in the case of Stock Options, the product of (x) the difference between the
Per Share Merger Consideration and the per share exercise price of the
holder's Company Stock Option multiplied by (y) the number of shares of
Company Common Stock subject to the holder's Stock Option and (b) in the case
of Restricted Stock, the number of shares of the holder's Restricted Stock
times the Per Share Merger Consideration. In the case of all unvested Stock
Options, such cash payment shall be made on the date that is 90 days after the
Effective Time. Following the expiration of the Offer and the purchase of
Shares pursuant thereto and prior to the Effective Time, Parent may, at its
option, provide to each holder of an outstanding Stock Option who is an
"accredited investor" (within the meaning of the Securities Act of 1933), in
lieu of the cash payment pursuant to the foregoing sentence, an alternative,
at such holder's option, of converting such Stock Option into phantom stock
units, having the same economic value and terms of such Stock Options and the
value of which will thereafter be based on the market value of the ordinary
shares of GEC, p.l.c. Except as provided in the Merger Agreement or as
otherwise agreed to by the parties, (a) the Stock Option Plans shall terminate
as of the Effective Time and the provisions in any other plan, program or
arrangement providing for the issuance or grant by the Company or any of its
subsidiaries of any interest in respect of the capital stock of the Company or
any of its subsidiaries shall be terminated as of the Effective Time, and (b)
following the Effective Time, no holder of Stock Options or Restricted Stock
or any participant in such plans, programs or arrangements shall have any
right thereunder to acquire any equity securities of the Company, the
Surviving Corporation or any subsidiary thereof.
 
  Indemnification of Directors and Officers. In the Merger Agreement, the
Purchaser has agreed that all rights to indemnification for acts or omissions
occurring prior to the Effective Time in favor of the current or
 
                                       7
<PAGE>
 
former directors or officers of the Company and its subsidiaries as provided
in their respective certificates of incorporation or bylaws shall survive the
Merger and shall continue in full force and effect in accordance with their
terms for a period of six years from the Effective Time. Parent shall cause to
be maintained for a period of six years from the Effective Time the Company's
current directors', officers' and employees' insurance and indemnification
policy (the "D&O Insurance") and the current fiduciary liability insurance
policy (the "Fiduciary Insurance") (provided that Parent may substitute
therefor policies or financial guarantees with reputable and financially sound
carriers or other obligors of at least the same coverage and amounts
containing terms and conditions which are no less advantageous) to the extent
that such insurance policies provide coverage for events occurring prior to
the Effective Time for all persons who are directors, officers and employees
of the Company on the date of the Merger Agreement, so long as the amount per
annum to be paid by the Company after the date of the Merger Agreement for
such D&O Insurance and Fiduciary Insurance is not greater than 200% of the
current annual premiums paid by the Company for such insurance. Parent may
cause to be obtained D&O Insurance and Fiduciary Insurance that satisfies the
foregoing pursuant to which premiums are paid for the entire six-year period
or, if applicable, for the remainder of such period. If, during such six-year
period, such insurance coverage cannot be obtained at all or can only be
obtained for an amount (including amounts paid by the Company after the date
of the Merger Agreement) in excess of the per annum limit described above,
Parent shall use all reasonable efforts to cause to be obtained as much D&O
Insurance and Fiduciary Insurance as can be obtained for the remainder of such
six-year period (including amounts paid by the Company after the date of the
Merger Agreement) not in excess of such limit on terms and conditions no less
advantageous than the existing D&O Insurance and the existing Fiduciary
Insurance, respectively.
 
  Reasonable Efforts. The Merger Agreement provides that, subject to the terms
of the Merger Agreement, each of the parties has agreed to use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable
laws to consummate and make effective as soon as reasonably practicable the
transactions contemplated by the Merger Agreement; provided, that neither
Parent nor any of its subsidiaries shall be required to divest any asset or
enter into any consent decree.
 
  Directors and Officers. The directors of the Purchaser immediately prior to
the Effective Time and/or any individuals designated by Parent shall be the
directors of the Surviving Corporation, each to hold office in accordance with
the certificate of incorporation and bylaws of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time and/or any
individuals designated by Parent shall be the officers of the Surviving
Corporation, in each case until the earlier of their resignation or removal or
until their respective successors are duly elected or appointed and qualify.
 
  Employment Agreements. Pursuant to the Merger Agreement, Parent acknowledged
and agreed that all employment agreements, severance agreements, deferred
compensation agreements and supplemental retirement agreements with employees
of the Company and its subsidiaries set forth in the Company's Disclosure
Letter will be binding and enforceable obligations of the Surviving
Corporation to the same extent as they were binding and enforceable
obligations of the Company and its subsidiaries as of the date of the Merger.
 
  Representations and Warranties. The Merger Agreement contains various
customary representations and warranties.
 
  Procedure for Termination, Amendment, Extension or Waiver. The Merger
Agreement provides that in the event the Purchaser's designees are appointed
or elected to the Board as described above under "Directors," the approval of
a majority of the Independent Directors is required to amend the Merger
Agreement, to terminate the Merger Agreement, or to waive any condition to the
obligations of the Company.
 
Stockholder Agreement
 
  The following summary is qualified in its entirety by reference to the
complete text of the Stockholder Agreement which is filed as Exhibit 3 hereto
and incorporated herein by reference. Capitalized terms used but not defined
herein shall have the meaning given to them in the Stockholder Agreement.
 
                                       8
<PAGE>
 
  Pursuant to the Stockholder Agreement, each Founding Stockholder has agreed,
among other things, to sell to the Purchaser all the Shares that he
beneficially owns at a price per Share equal to the Offer Price. The Founding
Stockholders have also agreed to tender such Shares in the Offer at a price
per Share equal to the Offer Price if directed to do so by the Purchaser. In
addition, each Founding Stockholder has granted the Purchaser an option to
purchase all his Shares at a price per Share equal to the Offer Price under
certain circumstances and subject to certain conditions.
 
  Each Founding Stockholder severally has agreed that: (a) such Founding
Stockholder will not (i) sell, transfer, pledge, assign or otherwise dispose
of, or enter into any contract, option or other arrangement (including any
profit sharing arrangement) or understanding with respect to the sale,
transfer, pledge, assignment or other disposition of such Founding
Stockholder's Shares to any person other than the Purchaser or the Purchaser's
designee, (ii) enter into any voting arrangement, whether by proxy, voting
agreement, voting trust, power-of-attorney or otherwise, with respect to such
Founding Stockholder's Shares or (iii) take any other action that would in any
way restrict, limit or interfere with the performance of its obligations under
the Stockholder Agreement or the transactions contemplated thereby; (b) until
the Merger is consummated or the Merger Agreement is terminated, such Founding
Stockholder will not, nor will such Founding Stockholder permit any investment
banker, financial adviser, attorney, accountant or other representative or
agent of such Founding Stockholder to, directly or indirectly (i) solicit,
initiate or encourage (including by way of furnishing information), or take
any other action designed or reasonably likely to facilitate, any inquiries or
the making of any proposal which constitutes, or may reasonably be expected to
lead to, any Acquisition Proposal, or (ii) participate in any discussions or
negotiations regarding any Acquisition Proposal, (c) at any meeting of
stockholders of the Company called to vote upon the Merger and the Merger
Agreement or at any adjournment thereof or in any other circumstances upon
which a vote, consent or other approval (including by written consent) with
respect to the Merger and the Merger Agreement is sought, such Founding
Stockholder will, including by initiating a written consent solicitation if
requested by Parent, vote (or cause to be voted) such Founding Stockholder's
Shares in favor of the Merger, the adoption by the Company of the Merger
Agreement and the approval of the other transactions contemplated by the
Merger Agreement; and (d) at any meeting of stockholders of the Company or at
any adjournment thereof or in any other circumstances upon which such Founding
Stockholder's vote, consent or other approval is sought, such Founding
Stockholder will vote (or cause to be voted) such Founding Stockholder's
Shares against (i) any merger agreement or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale of substantial
assets, reorganization, recapitalization, dissolution, liquidation or winding
up of or by the Company or any other Acquisition Proposal (collectively,
"Alternative Transactions"), or (ii) any amendment of the Company's
certificate of incorporation or bylaws or other proposal or transaction
involving the Company or any of its subsidiaries, which amendment or other
proposal or transaction would in any manner impede, frustrate, prevent or
nullify the Offer, the Merger, the Merger Agreement or any of the other
transactions contemplated by the Merger Agreement (collectively, "Frustrating
Transactions"). The Stockholder Agreement provides that each Founding
Stockholder executed the Stockholder Agreement solely in his or her capacity
as the beneficial owner of such Founding Stockholder's Shares and nothing
therein shall limit or affect any actions taken by a Founding Stockholder in
its capacity as an officer or director of the Company or any subsidiary of the
Company to the extent specifically permitted by the Merger Agreement.
 
  Under the Stockholder Agreement, each Founding Stockholder has irrevocably
granted to, and appointed, Patricia Hoffman and Thomas Edeus and any other
individual who shall thereafter be designated by Parent, and each of them,
such Founding Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Founding
Stockholder, to vote such Founding Stockholder's Shares, or grant a consent or
approval in respect of such Shares, at any meeting of stockholders of the
Company or at any adjournment thereof or in any other circumstances upon which
their vote, consent or other approval is sought, in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement and against any Alternative Transaction or Frustrating Transaction.
 
 
                                       9
<PAGE>
 
The Stock Option Agreement
 
  The following summary is qualified in its entirety by reference to the
complete text of the Stock Option Agreement which is filed as Exhibit 4 hereto
and incorporated herein by reference. Capitalized terms used but not otherwise
defined herein shall have the meaning given to them in the Stock Option
Agreement.
 
  Pursuant to the Stock Option Agreement, the Company granted to the Purchaser
an option ("Option") to purchase up to 19.9% of the outstanding Shares of the
Company at a price per Share equal to the Offer Price. The Option is
exercisable when the Termination Fee (a "Purchase Event") is payable under the
Merger Agreement. In addition, the Option is exercisable following the
Purchaser's acceptance of Shares for payment pursuant to the Offer to the
extent the effect of such exercise would result in Parent owning, directly or
indirectly, immediately after such exercise 90% of the then outstanding
Shares. The Option terminates and is of no further force and effect upon the
earliest to occur of (i) the Effective Time, (ii) 15 months after the
occurrence of a Purchase Event (including any Purchase Event occurring after
termination of the Merger Agreement) and (iii) termination of the Merger
Agreement in accordance with its terms prior to the occurrence of any Purchase
Event, unless, in the case of this clause (iii), the Purchaser is or may be
entitled to receive a Termination Fee under the Merger Agreement following
such termination, subject to certain exceptions specified in the Stock Option
Agreement, in which case the Option shall not terminate pursuant to this
clause (iii) until the Purchaser could no longer under any circumstances
become entitled to receive a Termination Fee. To the extent the exercise of
the Option is the result of a Purchase Event, during the period commencing on
such Purchase Event and ending on the termination of the Option, the Purchaser
has the right in lieu of exercising the Option, to surrender the Option to the
Company for cancellation in exchange for a cash payment at least equal to the
value of the Option, subject to a minimal floor which guarantees the Option
will have at least some value. In addition, to the extent the exercise of the
Option is the result of a Purchase Event, in no event shall the profit that
the Purchaser can make from the Option exceed, when aggregated with the
Termination Fee, in the aggregate $135 million, plus an additional amount, not
in excess of $22.5 million, as reimbursement for out-of-pocket fees and
expenses incurred by Parent, the Purchaser or their respective affiliates in
connection with the transactions contemplated by the Merger Agreement and the
Stock Option Agreement, including all fees and expenses of their counsel,
accountants, investment bankers, experts and consultants.
 
Employment and Consulting Agreements
 
  The following summaries are qualified in their entirety by reference to the
complete texts of the Change in Control Separation Plan, as amended and
restated, filed as Exhibit 15 hereto and the Employment and Consulting
Agreements which are filed as Exhibits 5, 6, 7, 8, 9, 10, 11, 12 and 13 hereto
and incorporated herein by reference. Capitalized terms set forth below but
not otherwise defined herein shall have the meaning given to such term in the
CIC Plan or applicable Employment or Consulting Agreement.
 
  Change in Control Separation Plan. On April 18, 1996, the Board of Directors
of the Company (the "Board") adopted the FORE Systems, Inc. Change in Control
Separation Plan which was amended and restated by the Board on September 4,
1998 (as so amended and restated, the "CIC Plan"). The CIC Plan provides
designated executive officers and other key employees ("Participants") with
certain separation benefits if a Change in Control occurs and if, within two
years thereafter, a Participant's employment with the Company is terminated
either by action of the Company without Cause or by the Participant's
resignation from employment for Good Reason.
 
  Participants in the CIC Plan have been designated by the Board as belonging
to either of two categories: Schedule A Participants or Schedule B
Participants. A Schedule A Participant would receive separation benefits in
the event of a covered termination following a Change in Control equal to
three years' base salary and bonus plus a prorated bonus for that portion of
the year of termination for which the Participant was employed; provision of
welfare benefits (e.g., health care coverage and other insurance benefits) for
the Participant and his family for three years; and acceleration of vesting of
all non-vested stock options. A Schedule B Participant would receive, in such
event, one and one-half years' base salary and bonus plus a prorated bonus for
that portion
 
                                      10
<PAGE>
 
of the year of termination for which the Participant was employed; provision
of welfare benefits for the Participant and his family for three years; and
acceleration of vesting of all non-vested stock options. The CIC Plan also
provides that in the event the payments made thereunder cause certain excise
taxes to be imposed on Schedule A Participants under Section 280G of the
Internal Revenue Code, certain "gross-up" payments would be made for the
benefit of Schedule A Participants to put them in the same after-tax position
they would have been in if the excise taxes had not been imposed.
 
  Under the definition of "Change in Control" set forth in the CIC Plan, a
Change in Control will occur on the Closing. However, certain of the Schedule
A Participants and certain of the Schedule B Participants in the CIC Plan have
entered into employment or consulting agreements with the Company, to become
effective immediately prior to the Closing, in which they have agreed to waive
their right to separation and other benefits under the CIC Plan (other than
the gross-up protection described above in connection with this Change in
Control) in exchange for certain rights and benefits specified in their
respective employment agreements, and it is anticipated that certain of the
other Schedule B Participants will also have entered into similar agreements
prior to the Closing.
 
  The employment and consulting agreements entered into between the Company
and certain key executives are described below.
 
  Consulting Agreement with Eric C. Cooper. Dr. Cooper has entered into a
Consulting Agreement ("Cooper Agreement") with the Company, dated April 26,
1999, under which he agrees that he will retire from employment with the
Company, effective immediately prior to the Closing, and that he will waive
any right to separation or other benefits under the CIC Plan (other than the
gross-up protection provided therein). The Company agrees to retain Dr. Cooper
as a consultant for a period of two years from the date of his retirement;
during that period, Dr. Cooper will assist the Company in transitioning his
former duties to other Company employees, will provide technical support on
projects on which he was formerly engaged and will assist the Company's Chief
Executive Officer on request with special projects within his particular area
of expertise. In exchange for his consulting services, Dr. Cooper will receive
a consulting fee of $300,000 in a single lump-sum cash payment. In addition,
Dr. Cooper agrees that during the two-year term of the Cooper Agreement and
for one year thereafter, he will refrain from competing against the Company,
as well as from soliciting the Company's principal customers or employees. As
consideration for these noncompetition and nonsolicitation agreements and a
confidentiality agreement, the Company agrees to pay Dr. Cooper an additional
$600,000 in a single lump-sum cash payment, and to cause any options to
purchase Common Stock previously granted to Dr. Cooper at a purchase price of
$30 or higher to be vested immediately and converted into vested options to
purchase phantom GEC, p.l.c. ordinary shares with value equivalent to the
options converted. The Company further agrees to provide him, at his election,
with either, or in combination, (i) a cash payment equal to the spread between
the exercise price on stock options to purchase shares of Common Stock (other
than those referred to in the preceding sentence) previously granted to him by
the Company (whether or not vested) and the Offer Price, or (ii) options to
purchase phantom GEC, p.l.c. ordinary shares with value equivalent to the
options to purchase shares of Common Stock (other than those referred to in
the preceding sentence) previously granted to him by the Company (based on a
specified conversion formula), in either case contingent upon Dr. Cooper's
agreement that the options previously granted to him by the Company (to the
extent not already converted to phantom share options) will be cancelled. If
Dr. Cooper were to elect to receive the cash payment, he would receive
approximately $5.5 million with respect to unvested stock options as of May
31, 1999.
 
  Agreement with Thomas J. Gill. Mr. Gill has entered into an Employment
Agreement ("Gill Agreement") with the Company, dated April 26, 1999, to become
effective immediately prior to the Closing, under which he is to continue to
be employed by the Company as President and Chief Executive Officer and as a
member of the Company's Board for an indefinite term. Mr. Gill agrees to waive
any right to separation or other benefits under the CIC Plan (other than the
gross-up protection provided therein). The Gill Agreement provides that Mr.
Gill will receive an initial annual base salary of $500,000, and that he will
be entitled to participate in any pension, retirement or welfare benefit
programs made available to senior executives of the Company. He is also
entitled to participate in short-term and long-term incentive compensation
programs established by the Company for
 
                                      11
<PAGE>
 
senior executives. Mr. Gill will (conditioned upon his purchasing $1.0 million
of ordinary shares of GEC, p.l.c. within 90 days after the effective date of
the Gill Agreement) receive a grant of $1.0 million of restricted phantom GEC,
p.l.c. ordinary shares (to vest on the second anniversary of the effective
date of the Gill Agreement) and a non-qualified phantom share option equal in
value to $1.0 million divided by the value of GEC, p.l.c. ordinary shares
immediately following the Closing (to vest on the third anniversary of the
effective date) (in both cases, immediate vesting would occur upon death,
disability, termination upon a Change in Control or without Cause or
resignation for Good Reason). Any options to purchase shares of Common Stock
previously granted to Mr. Gill for which the purchase price is $30 or higher
will be converted into options to purchase phantom GEC, p.l.c. ordinary shares
with value equivalent to the options converted. Mr. Gill agrees that during
the term of the Gill Agreement and for 24 months following the termination of
Mr. Gill's employment for any reason, he will refrain from competing against
the Company, as well as from soliciting the Company's principal customers or
employees. As consideration for these noncompetition and nonsolicitation
agreements and a confidentiality agreement, the Company agrees to provide Mr.
Gill, at his election, with either, or in combination, (i) a cash payment
equal to the spread between the exercise price on stock options to purchase
shares of Common Stock (other than those options with a purchase price of $30
or higher referred to above) previously granted to him by the Company (whether
or not vested) and the Offer Price, or (ii) vested options to purchase phantom
GEC, p.l.c. ordinary shares with value equivalent to the options to purchase
shares of Common Stock (other than those options with a purchase price of $30
or higher referred to above) previously granted to him by the Company (based
on a specified conversion formula), in either case with the understanding that
the options to purchase shares of Common Stock previously granted to Mr. Gill
by the Company will be cancelled. In the event that Mr. Gill were to elect to
receive the cash payment, he would receive approximately $15.4 million with
respect to unvested stock options as of May 31, 1999. In the event that Mr.
Gill's employment is terminated by the Company without Cause or he resigns
from employment for Good Reason prior to attaining age 65, subject to certain
conditions, he will be eligible to receive a cash payment equal to his Base
Compensation (or two times his Base Compensation if such termination occurs
during the first two years of the term of the Gill Agreement, or thereafter
within two years of a subsequent Change of Control), plus continuation of
certain insurance benefits for two years (or three years, if the termination
occurs within two years following a subsequent Change of Control); and as
additional consideration for the confidentiality, noncompetition and
nonsolicitation agreements, he will receive an additional cash payment equal
to his Base Compensation. In the event of a subsequent Change of Control, Mr.
Gill will also be provided with gross-up tax protection.
 
  Agreement with Robert D. Sansom. Dr. Sansom has entered into an agreement
with the Company ("Sansom Agreement"), dated April 26, 1999, to become
effective immediately prior to the Closing, under which he is to continue to
be employed by the Company at substantially the same terms and conditions as
in effect prior to the Closing. Dr. Sansom agrees to waive any right to
separation or other benefits under the CIC Plan (other than the gross-up
protection provided therein). The Company agrees that, at Dr. Sansom's
election, to be made on or before December 31, 1999, it will enter into either
a consulting agreement with Dr. Sansom with terms and conditions substantially
the same as those in the agreement with Dr. Cooper described above, or an
employment agreement with Dr. Sansom with terms and conditions substantially
the same as those in the agreement with Mr. Haney described below. Dr. Sansom
agrees that for 36 months following the effective date of the Sansom
Agreement, he will refrain from competing against the Company, as well as from
soliciting the Company's principal customers or employees. As consideration
for these noncompetition and nonsolicitation agreements, the Company agrees to
grant Dr. Sansom nonqualified share options for phantom GEC, p.l.c. ordinary
shares equal in value to $460,000 divided by the value of GEC, p.l.c. ordinary
shares immediately prior to the Closing, which options will vest in 25%
increments on each of the first four anniversaries of the effective date of
the Sansom Agreement (if he is employed by the Company on those dates, with
immediate full vesting if his employment has terminated due to death,
disability or termination by the Company without cause these options will be
forfeited if Dr. Sansom becomes covered by a consulting agreement), and to
cause any options on Shares previously granted to Dr. Sansom for which the
purchase price is $30 or higher to be vested immediately and converted into
vested options to purchase phantom GEC, p.l.c. ordinary shares with value
equivalent to the options converted. The Company further agrees to provide
him, at his election, with either, or in combination, (i) a cash payment equal
to the spread between the exercise price on options to purchase shares
 
                                      12
<PAGE>
 
of Common Stock (other than those referred to in the preceding sentence)
previously granted to him by the Company (whether or not vested) and the Offer
Price, or (ii) vested options to purchase phantom shares of GEC, p.l.c.
ordinary shares with value equivalent to the options to purchase shares of
Common Stock (other than those referred to in the preceding sentence)
previously granted to him by the Company (based on a specified conversion
formula), in either case with the understanding that the options previously
granted to Dr. Sansom will be cancelled. In the event that Dr. Sansom were to
elect to receive the cash payment, he would receive approximately $4.8 million
with respect to unvested stock options as of May 31, 1999.
 
  Agreement with Bruce E. Haney. Mr. Haney has entered into an Employment
Agreement with the Company ("Haney Agreement"), dated April 26, 1999, to
become effective immediately prior to the Closing, under which he is to
continue to be employed by the Company for an indefinite term. Mr. Haney
agrees to waive any right to separation or other benefits under the CIC Plan
(other than the gross-up protection provided therein). The Haney Agreement
provides that Mr. Haney will receive an initial base salary of $275,000. He is
also entitled to participate in short-term and long-term incentive
compensation programs established by the Company for senior executives. Mr.
Haney will receive a non-qualified phantom share option equal to twice his
base salary divided by the value of GEC, p.l.c. ordinary shares immediately
following the Closing (to vest in 25% increments on each of the first four
anniversaries of the effective date); immediate vesting would occur upon
death, disability or termination without Cause. Mr. Haney agrees that during
the term of the Haney Agreement and for 12 months following the termination of
his employment for any reason, he will refrain from competing against the
Company, as well as from soliciting the Company's principal customers or
employees. As consideration for these noncompetition and nonsolicitation
agreements, the Company agrees to provide Mr. Haney, at his election, with
either (i) a cash payment equal in value to the spread between the exercise
price on stock options to purchase shares of Common Stock previously granted
to him by the Company (whether or not vested) and the Offer Price, or (ii)
vested options to purchase phantom GEC, p.l.c. ordinary shares with value
equivalent to the options to purchase shares of Common Stock previously
granted to him by the Company (based on a specified conversion formula), in
either case with the understanding that the options to purchase shares of
Common Stock previously granted to Mr. Haney by the Company will be cancelled.
In the event that Mr. Haney were to elect to receive the cash payment, he
would receive approximately $4.8 million with respect to unvested stock
options as of May 31, 1999. In the event that Mr. Haney's employment is
terminated by the Company without Cause prior to attaining age 65, subject to
certain conditions, he will be eligible to receive a cash payment equal to his
Base Compensation (or two times his Base Compensation if such termination
occurs during the first two years of the term of the Haney Agreement), plus
continuation of certain insurance benefits for two years; and as additional
consideration for the confidentiality, noncompetition and nonsolicitation
agreements, he will receive an additional cash payment equal to his Base
Compensation.
 
  Agreements with Robert C. Musslewhite, Kevin E. Nigh, J. Niel Viljoen, Donal
M. Byrne and Ronald E. McKenzie Messrs. Musslewhite, Nigh, Viljoen, Byrne and
McKenzie (the "Executives") have entered into employment agreements
("Executive Agreements") with the Company, each dated as of April 26, 1999, to
become effective immediately prior to the Closing, under which they are to
continue to be employed by the Company for an indefinite term. The Executive
Agreements have terms and conditions substantially the same as the Haney
Agreement (other than base salary), except that upon termination by the
Company of an Executive's employment without Cause (as defined in each
Executive's Agreement), the employee will receive a cash payment equal to one
year's "Base Compensation" (as defined in each Executive's Agreement), whether
or not such termination occurs within the first two years of the term of the
Executive Agreement, plus an additional one year's Base Compensation as
consideration for the noncompetition and nonsolicitation agreements. In
addition, Messrs. Musslewhite and Byrne are to be provided certain special
relocation benefits under certain circumstances, and Mr. Viljoen is to be
provided with certain tax equalization protection under certain circumstances.
If the Executives were to elect to receive cash payments instead of options to
purchase phantom GEC, p.l.c. ordinary shares, Messrs. Musslewhite, Nigh,
Viljoen, Byrne and McKenzie would receive approximately $5.8 million, $6.5
million, $6.0 million, $6.5 million and $3.5 million, respectively, with
respect to unvested stock options as of May 31, 1999.
 
 
                                      13
<PAGE>
 
Confidentiality Agreement
 
  The following summary is qualified in its entirety by reference to the
complete text of the Confidentiality Agreement which is filed as Exhibit 14
hereto and incorporated herein by reference.
 
  Pursuant to the Confidentiality Agreement, the Company and GEC, p.l.c.
agreed to keep confidential certain information exchanged between such
parties. The Confidentiality Agreement also contains customary non-
solicitation and standstill provisions. The Merger Agreement provides that the
provisions of the Confidentiality Agreement shall remain binding and in full
force and effect and that the parties shall comply with, and shall cause their
respective representatives to comply with, all of their respective obligations
under the Confidentiality Agreement until the Purchaser purchases a majority
of the outstanding Shares pursuant to the Offer.
 
ITEM 4. The Solicitation or Recommendation.
 
  (a) Recommendation. The Board, at a special meeting held on April 25, 1999,
unanimously (1) determined that the Offer and the Merger are fair to and in
the best interests of the stockholders of the Company, (2) approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and
the Merger, and the transactions contemplated by the Stockholder Agreement,
(3) approved the Stock Option Agreement and the transactions contemplated
thereby, and (4) recommended that stockholders of the Company accept the Offer
and tender their shares thereunder. A copy of the Company's Letter to
Stockholders, dated as of April 30, 1999, is filed hereto as Exhibit 16 and
incorporated herein by reference.
 
  (b) Background; Reasons for Recommendation
 
  In January 1999, representatives of Goldman, Sachs & Co. ("Goldman Sachs")
met with the Board at a regularly scheduled meeting of the Board to discuss in
general terms the consolidation trend in the networking industry and the
possible exploration by the Company of strategic alternatives that might
include the sale of the Company.
 
  On March 3, 1999, Thomas J. Gill, the Chief Executive Officer and President
of the Company, was approached at an industry conference by executives of a
telecommunications corporation who expressed an interest in discussing the
possibility of entering into a strategic relationship with the Company.
Following this contact, Mr. Gill met with representatives of Goldman Sachs to
discuss a possible relationship with that corporation and to engage Goldman
Sachs for the purpose of exploring the potential sale of the Company.
 
  On March 4, 1999, Mr. Gill was contacted by representatives of Warburg
Dillon Read LLC ("Warburg Dillon Read") on behalf of GEC, p.l.c. in order to
determine whether the Company might be interested in a possible acquisition of
the Company by GEC, p.l.c. In addition, in early March 1999, Jack Fryer, the
Strategic Planning Director of GEC, p.l.c., contacted Robert C. Musslewhite,
the Senior Vice President of Corporate Planning of the Company, to arrange a
meeting for the following week.
 
  On March 10, 1999, Mr. Gill, along with Mr. Musslewhite, met with executives
of the telecommunications corporation that had spoken with Mr. Gill on
March 3. On March 11, 1999, Mr. Gill and Mr. Musslewhite met in London,
England with John Mayo, the Finance Director of GEC, p.l.c., and Mr. Fryer. At
the March 11 meeting, the parties discussed various strategic alternatives
including the possible sale of the Company to GEC, p.l.c. and Mr. Gill and Mr.
Musslewhite presented information about the Company's business and product
plans.
 
  During this same time period, representatives of Goldman Sachs approached
several other companies in the telecommunications and networking industries to
determine whether they may have an interest in exploring the possibility of
acquiring the Company.
 
  On March 17, 1999, Mr. Fryer, along with several other executives of GEC,
p.l.c., met in Pittsburgh, Pennsylvania with Mr. Gill, Mr. Musslewhite and
several other executives of the Company. At that meeting, the Company's
business and product plans were reviewed. Prior to that meeting, GEC, p.l.c.
entered into the
 
                                      14
<PAGE>
 
Confidentiality Agreement with the Company which, among other things,
contained a provision prohibiting GEC, p.l.c. and its affiliates from
acquiring or proposing to acquire securities of the Company or otherwise to
seek to change or control its management or Board other than with the prior
consent of the Board.
 
  On March 19, 1999, the first prospective acquiror, which had approached Mr.
Gill on March 3 and with which Mr. Gill and Mr. Musslewhite had met on March
10, signed a confidentiality and standstill agreement substantially similar to
the Confidentiality Agreement. Meetings were held with that corporation on
March 22, 23 and 29, 1999.
 
  On March 30, 1999, an executive of a third corporation telephoned Mr.
Musslewhite to express an interest in discussing a possible business
combination with the Company, and a meeting was scheduled for the following
week.
 
  On April 5, 1999, executives of the Company, along with representatives of
Goldman Sachs and Morgan, Lewis & Bockius LLP ("Morgan Lewis"), outside
counsel to the Company, met at the Company's offices to discuss the timing and
structure of various possible acquisition transactions.
 
  On April 6, 1999, representatives of GEC, p.l.c., including Mr. Mayo and Mr.
Fryer, along with representatives of Warburg Dillon Read and Mayer, Brown &
Platt ("Mayer Brown"), outside counsel to GEC, p.l.c., attended a meeting in
Pittsburgh with Mr. Gill, Mr. Musslewhite, Dr. Cooper, the Chairman of the
Board, and representatives of Goldman Sachs. At that meeting, the parties
discussed the general terms and structure of a potential acquisition of the
Company by GEC, p.l.c.
 
  On April 7, 1999, the Board of Directors of the Company held a special
meeting to discuss the various strategic alternatives available to the Company
and to ratify the engagement of Goldman Sachs to assist the Company in a
potential sale of the Company. Representatives of Goldman Sachs and Morgan
Lewis attended the meeting. The Board directed management to continue
discussions with the three prospective acquirors, and unanimously ratified the
engagement of Goldman Sachs pursuant to the engagement letter dated as of
March 2, 1999. A partner of Morgan Lewis then made a presentation to the Board
regarding the Board's fiduciary duties in the context of the exploration by
the Company of its strategic alternatives to maximize stockholder value,
including a potential sale of the Company.
 
  On April 7, 1999, following the meeting of the Board, executives of the
third prospective acquiror met with Mr. Gill, Mr. Musslewhite and other
executives of the Company for a review of the Company's business and product
plans. Prior to the meeting, that corporation signed a confidentiality and
standstill agreement substantially similar to the Confidentiality Agreement.
 
  On April 8, 1999, a meeting between executives of GEC, p.l.c., including
Lord Simpson, Chief Executive Officer of GEC, p.l.c., Mr. Fryer and Mr. Mayo,
representatives of Warburg Dillon Read and executives of the Company,
including Mr. Gill, was held by teleconference. At that meeting, the parties
discussed the Company's projections for the fiscal years 2000 and 2001 and the
potential synergies inherent in a business combination between the Company and
GEC, p.l.c.
 
  On April 9, 1999, Mr. Gill received a letter and a term sheet from the third
prospective acquiror. The letter proposed a stock merger which would be
accounted for as a pooling of interests. The letter proposed a fixed exchange
ratio, but indicated a willingness to discuss a collar arrangement. The letter
also proposed an exclusivity period of three weeks to enable the prospective
acquiror to perform due diligence and negotiate
 
                                      15
<PAGE>
 
definitive agreements. The term sheet set forth protective termination
provisions and the grant by the Company of a stock option for a number of
shares equal to 19.9% of the outstanding shares of the Company at the
transaction price. The letter expressed a deadline of the close of business on
April 13, 1999, following which the proposal would be withdrawn if not
accepted.
 
  On April 10, 1999, Mr. Gill received a letter and a term sheet from GEC,
p.l.c. Neither the letter nor the term sheet contained a price. The letter
emphasized GEC, p.l.c.'s experience in completing acquisitions. An attachment
to the letter set out a due diligence process and a commitment by GEC, p.l.c.
to complete the process within a three-day time period following the
commencement of the process. The term sheet contained protective termination
provisions and the grant by the Company of a stock option for a number of
shares equal to 19.9% of the outstanding shares of the Company. The letter
requested an exclusivity period of sixteen days and expressed a deadline of
mid-day on April 11, 1999, following which the proposal would be withdrawn if
not accepted.
 
  On April 11, 1999, the Board held a special meeting to discuss the two
proposals and the progress of discussions with all three parties with which
the Company had held due diligence meetings and signed confidentiality
agreements. Representatives of Goldman Sachs and Morgan Lewis attended the
meeting. Materials prepared by Goldman Sachs which reviewed transactions in
the networking industry and which contained financial analyses of the Company
and of each of the three prospective acquirors had been previously distributed
to the Board. The Board requested that management and Goldman Sachs perform
due diligence on the corporation proposing the stock merger.
 
  The Board held another special meeting on April 13, 1999. Representatives of
Goldman Sachs and Morgan Lewis attended the meeting. Shortly before the
meeting, representatives of GEC, p.l.c. communicated to representatives of the
Company a price per share in cash that GEC, p.l.c. was willing to offer
pursuant to the terms set forth in the April 10 letter and term sheet, which
had not been withdrawn. This price, along with all of the other terms of GEC,
p.l.c.'s proposal, was discussed by the Board, along with the stock merger
proposal, which had not been withdrawn. The Board determined that it was not
in the interests of the Company and its stockholders to proceed with GEC,
p.l.c. at the price then proposed by GEC, p.l.c. or with the corporation
proposing the stock merger at the proposed exchange ratio.
 
  The Board requested that Goldman Sachs explore with the corporation
proposing the stock merger the possibility of a collar arrangement as well as
an improvement in the value of the stock merger proposal. The Board then
discussed with a partner of Morgan Lewis the fiduciary duties of directors.
 
  On April 15 and April 20, 1999, Mr. Gill, Mr. Musslewhite and other
executives of the Company and representatives of Goldman Sachs met with the
corporation proposing the stock merger and that corporation's investment
bankers. The purpose of those meetings was to enable each company to perform
due diligence on the other and to discuss a potential integration plan if the
two companies were to combine.
 
  On April 21, 1999, Lord Simpson and Mr. Mayo met with Mr. Gill in Pittsburgh
to discuss the potential acquisition of the Company by GEC, p.l.c.
 
  On April 22, 1999, GEC, p.l.c. sent a letter to Mr. Gill reiterating the
terms of its April 10 letter and increasing the price of its cash proposal.
The letter requested a response prior to the opening of business on April 23
and stated that GEC, p.l.c. would be willing to complete its due diligence
process and execute definitive agreements within a four-day time period if its
offer were accepted and it was granted an exclusivity period through May 3,
1999.
 
  Also on April 22, 1999, the corporation proposing the stock merger sent a
letter to Mr. Gill increasing the exchange ratio it offered, and reiterating
the terms of its April 9 term sheet. The proposal was contingent on completion
of due diligence and the grant by the Company of a two-week exclusivity
period. The letter requested a response by the morning of April 23. Based on
the closing price of such corporation's stock as reported for the day this
proposal was made, which was at or near the highest closing price such
corporation's stock had historically reached, the value of the exchange ratio
proposed was higher than the value of the cash proposal made by GEC, p.l.c. on
the same day.
 
                                      16
<PAGE>
 
  The letter from the prospective acquiror also proposed a collar arrangement.
Under this collar arrangement, the Company would have the option of
terminating a merger agreement if the acquiror's stock price decreased by more
than approximately 30% unless the acquiror agreed to revise the exchange ratio
to a price that reflected the low end of the collar, which was significantly
below the cash price offered by GEC, p.l.c. The collar arrangement also
contained a provision pursuant to which the acquiror would have the option of
terminating a merger agreement if the acquiror's stock price increased by more
than approximately 10.5%, unless the Company agreed to revise the exchange
ratio to a price that reflected the high end of the collar.
 
  The Board held a special meeting on April 22, 1999 to consider the two
revised proposals. Representatives of Goldman Sachs and Morgan Lewis attended
the meeting. Mr. Gill informed the Board of the meetings that had been held
and also reported that no proposal had been received from the first
telecommunications corporation which had previously expressed interest.
 
  The Board directed Mr. Gill and Goldman Sachs to communicate with
representatives of GEC, p.l.c. to the effect that the Company would be
prepared to accept GEC, p.l.c.'s proposal and to grant the requested ten-day
exclusivity period if GEC, p.l.c. raised its price to a specified level and
agreed to modify various protective provisions, including a provision which
would enable the Company, following execution of a definitive agreement, to
accept a proposal from any party if such proposal were superior from a
financial point of view to the Company's stockholders.
 
  During the night of April 22, Mr. Gill and representatives of Goldman Sachs
and Morgan Lewis communicated with Mr. Mayo by telephone. Prior to the opening
of business on April 23, GEC, p.l.c. agreed to increase its price to the level
specified by the Company and to the various modifications requested by the
Company to the terms that had been proposed by GEC, p.l.c.
 
  On April 23, representatives of Morgan Lewis and of Cravath, Swaine & Moore
("Cravath"), outside counsel to GEC, p.l.c., held several conversations
regarding the terms of the definitive agreements, and Cravath presented drafts
of the Merger Agreement, the Stock Option Agreement and the Stockholder
Agreement to Morgan Lewis.
 
  In the evening of April 23, following the close of business, the corporation
proposing the stock merger sent an unsolicited letter to Mr. Gill proposing to
increase the exchange ratio of its proposal and indicating a willingness to
discuss a collar mechanism along the lines previously proposed, with all other
terms unchanged from the previous proposal. Based on the closing price of such
corporation's stock as reported for the last trading day before this proposal
was made, which was near the highest closing price such corporation's stock
had historically reached, the value of this revised exchange ratio (without
considering the effect of the collar) was higher than the cash price proposed
by GEC, p.l.c. on April 23, 1999 and the $35.00 per share price to be paid in
the Offer and the Merger.
 
  Executives of GEC, p.l.c., and representatives of Cravath, Mayer Brown and
Warburg Dillon Read held meetings in Pittsburgh on April 24 and April 25 with
executives of the Company and representatives of Morgan Lewis and Goldman
Sachs to negotiate the Merger Agreement, the Stock Option Agreement and the
Stockholder Agreement. Meetings were also held to consider appropriate terms
for the Employment Agreements and to finalize such agreements and to enable
GEC, p.l.c. to complete its due diligence process.
 
  A special meeting of the Board was held in the evening of April 25 to
discuss the price and terms of GEC, p.l.c.'s proposal and the Merger
Agreement, the Stock Option Agreement and the Stockholder Agreement and to
consider the unsolicited letter from the corporation proposing the stock
merger. Representatives of Goldman Sachs and Morgan Lewis attended the
meeting. Prior to the meeting, Goldman Sachs distributed to the Board
materials containing further financial analyses of the corporation proposing
the stock merger and of various potential collar arrangements, as well as
materials analyzing GEC, p.l.c.'s cash proposal at the price that had been
proposed on the morning of April 23 and at various higher prices.
 
                                      17
<PAGE>
 
  The Board considered the value of the stock merger proposal, based on the
closing price of the prospective acquiror's stock on the most recent trading
day and the average closing prices of such stock over various historical time
periods. The Board also considered the volatility of such stock and the other
factors set forth in items (i) through (xvi) below.
 
  A partner of Morgan Lewis presented to the Board a report of the terms of
the Merger Agreement, the Stock Option Agreement and the Stockholder
Agreement. There was also a discussion of the Board's fiduciary duties with
respect to its consideration and evaluation of the competing proposals and
with respect to the termination provisions of the Merger Agreement and the
effect of the Stock Option Agreement.
 
  The Board determined that the Company would not accept GEC, p.l.c.'s
proposal at the price that had been proposed on April 23. The Board then
requested a fairness opinion from Goldman Sachs at a price of $35.00 per share
in cash. Representatives of Goldman Sachs delivered to the Board the opinion
of Goldman Sachs to the effect that as of such date and based upon and subject
to various considerations set forth in such opinion, the price of $35.00 per
share was fair from a financial point of view to the stockholders of the
Company. The Board directed Mr. Gill and Goldman Sachs to communicate to GEC,
p.l.c. that the Board had approved the execution of the Merger Agreement, the
Stock Option Agreement and the Stockholder Agreement, provided GEC, p.l.c.
would increase its price to $35.00 per share.
 
  Following the Board meeting, Mr. Gill and representatives of Goldman Sachs
spoke with Mr. Mayo by telephone. Mr. Mayo informed them that the Board of
GEC, p.l.c. would meet on the morning of April 26 to determine whether to
proceed with the Offer and the Merger at the price of $35.00 per share.
 
  On the morning of April 26, Lord Simpson and Mr. Mayo telephoned Mr. Gill to
inform him that GEC, p.l.c. was prepared to pay $35.00 per share and to
execute the Merger Agreement, the Stock Option Agreement and the Stockholder
Agreement at that time. Following this telephone call, the Merger Agreement,
the Stock Option Agreement, the Stockholder Agreement and the Employment
Agreements were executed and the transaction was publicly announced.
 
  In reaching its determination described above, the Board considered a number
of factors, including, without limitation, the following:
 
    (i) the amount of consideration to be received by the Company's
  stockholders in the Offer and the Merger pursuant to the Merger Agreement;
 
    (ii) the fact that the consideration is to be paid in cash pursuant to a
  tender offer which may be consummated within a relatively short time period
  following commencement of the Offer;
 
    (iii) the terms of the Merger Agreement, including Parent's
  representation that it currently has available to it the financing
  necessary to complete the Offer and the Merger and the absence of
  conditions such as a financing condition;
 
    (iv) GEC, p.l.c.'s past record of completing transactions swiftly and
  with certainty;
 
    (v) the fact that the $35 per share price to be received in the Offer and
  the Merger represents a 42.9% premium over the closing price of the Common
  Stock on the Nasdaq National Market on April 23, 1999, the last trading day
  before the announcement of the transaction; a 58.2% premium over the
  average closing price for the twenty trading days ending on April 23, 1999;
  a 74.2% premium over the average closing price for the thirty trading days
  ending on April 23, 1999; and a 96.3% premium over the average closing
  price for the sixty trading days ending on April 23, 1999;
 
    (vi) the fact that an alternative to the Offer and the Merger was a stock
  merger which would have required stockholder votes of both parties and
  subjected the Company's stockholders to market risk for a potentially
  lengthy time period prior to consummation;
 
    (vii) the likelihood that the Offer and the Merger would be consummated,
  given the experience, reputation and financial resources of GEC, p.l.c.,
  compared with the risks of consummation inherent in proceeding with a stock
  merger with an acquiror which has experienced significant price volatility
  under circumstances in which stockholder votes would be required of both
  parties to the proposed stock merger;
 
    (viii) the risk that if the Company accepted the stock merger proposal,
  the acquiror's stock price would decrease to a level which would result in
  the Company's stockholders receiving a value significantly below the $35
  per share in cash to be received pursuant to the Offer and the Merger;
 
                                      18
<PAGE>
 
    (ix) the fact that the proposed collar arrangement in the proposed stock
  merger created a risk that the stock merger would either not be consummated
  at all, or would be consummated at a price significantly below that of the
  Offer and the Merger;
 
    (x) the Company's prospects if it were to remain independent, including
  the risks of competing against companies which have far greater resources,
  distribution capacity, product offerings and market reach than the Company;
 
    (xi) the current trend towards consolidation in the networking industry,
  which increases the competitive risks facing the Company and makes it
  harder for the Company to complete acquisitions which are not dilutive to
  its earnings;
 
    (xii) current financial market conditions and the historical market
  prices and volatility of the Common Stock;
 
    (xiii) historical information concerning the Company's business,
  financial performance and operations;
 
    (xiv) the opinion of Goldman Sachs, delivered to the Board on April 25,
  1999, and confirmed on April 26, 1999, that as of such dates, and based
  upon and subject to various considerations set forth therein, the
  consideration to be received by the stockholders of the Company in the
  Offer and the Merger was fair from a financial point of view to such
  stockholders (a copy of such opinion is attached to this Schedule 14D-9);
 
    (xv) the terms of the Merger Agreement, including the conditions to the
  Offer and the Merger, and the representations, warranties and covenants of
  the parties; and
 
    (xvi) the fact that pursuant to the Merger Agreement, the Company may
  respond to an unsolicited proposal if the Board believes it is reasonably
  likely to lead to a Qualifying Proposal (as defined in the Merger
  Agreement), and may terminate the Merger Agreement and accept such
  Qualifying Proposal, subject to compliance with the terms of the Merger
  Agreement and the payment of the Termination Fee (as defined in the Merger
  Agreement) and to Purchaser's right to exercise the option set forth in the
  Stock Option Agreement, although the Board was aware that the grant of the
  option pursuant to the Stock Option Agreement would impede any proposed
  stock merger from qualifying for "pooling of interests" accounting
  treatment.
 
  The Board did not assign relative weights to the factors listed above, nor
did it determine that any single factor was of primary importance. The Board
based its determination on its consideration of all of the information
presented to it. It is possible that different members of the Board assigned
different weights to the various factors listed above.
 
  The full text of the written opinion of Goldman Sachs is attached hereto as
Exhibit 17. Stockholders are urged to read such opinion carefully in its
entirety. Such opinion addresses only the fairness from a financial point of
view of the consideration to be received by the stockholders of the Company in
the Offer and the Merger and does not constitute a recommendation to any
stockholder as to whether to tender shares in the Offer or to vote in favor of
the Merger. As a result of its consideration of the factors set forth above,
the Board has unanimously resolved to approve the Offer and the Merger and has
determined that the Offer and the Merger are fair to, and in the best
interests of, the Company and all of its stockholders. The Board unanimously
recommends that all stockholders of the Company accept the Offer and tender
their Shares to Purchaser pursuant to the Offer.
 
ITEM 5. Persons Retained, Employed or to be Compensated.
 
  The Company has retained Goldman Sachs to act as its financial advisor in
connection with the Offer and the Merger. Pursuant to the terms of its
engagement, the Company has agreed to pay Goldman Sachs a
 
                                      19
<PAGE>
 
transaction fee equal to $20,000,000, payable upon consummation of the Offer.
The Company also has agreed to reimburse Goldman Sachs for reasonable out-of-
pocket expenses and to indemnify Goldman Sachs and related parties against
certain liabilities arising out of their engagement. Goldman Sachs has in the
past provided investment banking services to the Company and its affiliates
for which services Goldman Sachs has received compensation. In the ordinary
course of business, Goldman Sachs and its affiliates may actively trade or
hold the securities of the Company and affiliates of the Parent for their own
accounts or for the accounts of customers and, accordingly, may at any time
hold a long or short position in such securities.
 
  Neither the Company nor any person acting on its behalf has employed,
retained or compensated any other person to make solicitations or
recommendations to stockholders on its behalf concerning the Offer or the
Merger.
 
ITEM 6. Recent Transactions and Intent with Respect to Securities.
 
  (a) Except as set forth below, no transactions in the Shares have been
effected during the past 60 days by the Company or, to the Company's
knowledge, by any executive officer, director, affiliate or subsidiary of the
Company.
 
  The Compensation Committee of the Board ratified the following option grants
on March 15, 1999 by unanimous written consent: (1) an option to Robert C.
Musslewhite, the Company's Senior Vice President, Corporate Planning, to
purchase 200,000 shares of Common Stock at an exercise price of $14.313 per
share effective March 1, 1999; (2) an option to J. Niel Viljoen, the Company's
Senior Vice President and General Manager, Service Provider Business Unit, to
purchase 200,000 shares of Common Stock at an exercise price of $14.313 per
share effective March 1, 1999; (3) an option to Kevin E. Nigh, the Company's
Senior Vice President, Worldwide Engineering, to purchase 200,000 shares of
Common Stock at an exercise price of $13.4380 per share effective November 17,
1998; and (4) an option to Donal M. Byrne, the Company's Senior Vice
President, Corporate Marketing, to purchase 300,000 shares of Common Stock at
a price of $13.438 per share effective November 17, 1998.
 
  The Compensation Committee of the Board ratified the following option grants
on April 7, 1999: (i) an option to Mr. Haney, the Company's Senior Vice
President and Chief Financial Officer, to purchase 100,000 shares of Common
Stock at an exercise price of $20.563 per share effective April 1, 1999; (2)
an option to Dr. Sansom, the Company's Senior Vice President and Chief
Technology Officer and a Director, to purchase 50,000 shares of Common Stock
at an exercise price of $20.563 per share effective April 1, 1999; and (3) an
option to Mr. Gill, the Company's President and Chief Executive Officer and a
Director, to purchase 150,000 shares of Common Stock at an exercise price of
$16.50 per share effective February 8, 1999 (the applicable annual review date
with respect to the compensation of Mr. Gill).
 
 
  Executive officers of the Company who participated in the Company's Employee
Stock Purchase Plan in the offering period from January 1, 1999 to March 31,
1999 each purchased 330 shares of Common Stock pursuant to the plan.
 
  (b) To the best of the Company's knowledge, all of its executive officers,
directors, affiliates or subsidiaries currently intend to tender all Shares
which are held of record or beneficially owned by such persons pursuant to the
Offer, other than Shares, if any, held by such persons which, if tendered,
could cause such person to incur liability under the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended. Pursuant to the
terms of the Stockholder Agreement, the Founding Stockholders have agreed, if
so directed by Purchaser, to tender into the Offer approximately 4.2% of the
Shares outstanding and to sell to Purchaser any Shares not tendered at a price
per Share equal to the Offer Price. Each Founding Stockholder has granted
Purchaser an option to purchase in certain circumstances all the Shares owned
by such stockholder.
 
ITEM 7. Certain Negotiations and Transactions by the Subject Company.
 
  (a) Prior to entering into the Merger Agreement, the Company had preliminary
contacts with other entities that had expressed interest in the Company. See
Item 4(b) above. Upon execution of the Merger Agreement,
 
                                      20
<PAGE>
 
the Company ceased contacts with such other entities. No discussions are
underway or are being undertaken by the Company in response to the Offer that
relate to or would result in (1) an extraordinary transaction, such as a
merger or reorganization, involving the Company or any of its subsidiaries;
(2) a purchase, sale or transfer of a material amount of assets by the Company
or any of its subsidiaries; (3) a tender offer for or other acquisition of
securities by or of the Company; or (4) any material change in the present
capitalization or dividend policy of the Company.
 
  (b) Except as set forth above, there is no transaction, board resolution,
agreement in principle or signed contract in response to the Offer that
relates to or would result in (1) an extraordinary transaction, such as a
merger or reorganization, involving the Company or any of its subsidiaries;
(2) a purchase, sale or transfer of a material amount of assets by the Company
or any of its subsidiaries; (3) a tender offer for or other acquisition of
securities by or of the Company; or (4) any material change in the present
capitalization or dividend policy of the Company.
 
ITEM 8. Additional Information to be Furnished.
 
  (a) The Information Statement attached as Annex A hereto is being furnished
in connection with the possible designation by the Purchaser, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board other than
at a meeting of the Company's stockholders.
 
  (b) As a Delaware corporation, the Company is subject to Section 203
("Section 203") of the DGCL. Under Section 203, certain "business
combinations" between a Delaware corporation whose stock is publicly traded or
held of record by more than 2,000 stockholders and an "interested stockholder"
are prohibited for a three-year period following the date that such a
stockholder becomes an interested stockholder, unless, among other possible
exemptions, the transaction in which the stockholder becomes an interested
stockholder or the business combination is approved by the board of directors
of the corporation before such other party to the business combination becomes
an interested stockholder. The term "business combination" is defined
generally to include mergers or consolidations between a Delaware corporation
and an interested stockholder, transactions with an interested stockholder
involving the assets or stock of the corporation or its majority-owned
subsidiaries and transactions which increase an interested stockholder's
percentage ownership of stock. The term "interested stockholder" is defined
generally as a stockholder who, together with affiliates and associates, owns
(or, within three years prior, did own) 15% or more of a Delaware
corporation's voting stock. An owner includes a person who has the right to
acquire such stock, including upon the exercise of an option.
 
  At its meeting on April 25, 1999, the Board unanimously approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and
the Merger, the Stockholder Agreement and the Stock Option Agreement and
determined to make the restrictions of Section 203 inapplicable to the Offer,
the Merger, the Stockholder Agreement and the Stock Option Agreement.
 
                                      21
<PAGE>
 
ITEM 9. Material to be Filed as Exhibits.
 
<TABLE>
 <C>         <S>
 Exhibit 1.  Agreement and Plan of Merger, dated as of April 26, 1999, by and
             among Parent, the Purchaser and the Company (incorporated by
             reference to Exhibit (c)(1) of the Schedule 14D-1).
 Exhibit 2.  Press Release issued by the Company and GEC, p.l.c. on April 26,
             1999 (incorporated by reference to Exhibit 99.1 to the Company's
             Current Report on Form 8-K dated April 26, 1999).
 Exhibit 3.  Stockholder Agreement, dated as of April 26, 1999, by and among
             Parent, the Purchaser and the stockholders of the Company listed
             on Annex A thereto (incorporated by reference to Exhibit (c)(3) of
             the Schedule 14D-1).
 Exhibit 4.  Stock Option Agreement, dated as of April 26, 1999, between the
             Company and Purchaser (incorporated by reference to Exhibit (c)(2)
             of the Schedule 14D-1).
 Exhibit 5.  Consulting Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Eric C. Cooper.
 Exhibit 6.  Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Thomas J. Gill.
 Exhibit 7.  Agreement, dated as of April 26, 1999, between FORE Systems, Inc.
             and Robert D. Sansom.
 Exhibit 8.  Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Bruce E. Haney.
 Exhibit 9.  Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Donal M. Byrne.
 Exhibit 10. Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Ronald E. McKenzie.
 Exhibit 11. Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Robert C. Musslewhite.
 Exhibit 12. Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and Kevin E. Nigh.
 Exhibit 13. Employment Agreement, dated as of April 26, 1999, between FORE
             Systems, Inc. and J. Niel Viljoen.
 Exhibit 14. Confidentiality Agreement, dated March 17, 1999, between GEC,
             p.l.c. and FORE Systems, Inc. (incorporated by reference to
             Exhibit (c)(4) of the Schedule 14D-1).
 Exhibit 15. FORE Systems, Inc. Change in Control Separation Plan, as amended
             and restated, effective September 4, 1998 (incorporated by
             reference to Exhibit 10.1 of the Company's Form 10-Q for the
             fiscal quarter ended September 30, 1998).
 Exhibit 16. Letter to Stockholders dated as of April 30, 1999.
 Exhibit 17. Opinion of Goldman, Sachs & Co. dated as of April 26, 1999.
</TABLE>
 
                                       22
<PAGE>
 
                                   SIGNATURE
 
  After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
 
                                                   FORE Systems, Inc.
 
                                                   /s/ Thomas J. Gill
                                          By: ________________________________
                                                      President and
                                                 Chief Executive Officer
 
Dated: April 30, 1999
 
                                      23
<PAGE>
 
                                    ANNEX A
 
                              FORE SYSTEMS, INC.
                                1000 FORE Drive
                      Warrendale, Pennsylvania 15086-7502
 
                       INFORMATION STATEMENT PURSUANT TO
                        SECTION 14(f) OF THE SECURITIES
                EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
 
  This Information Statement is being mailed on or about April 30, 1999, as
part of the Company's Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9"). Capitalized terms used and not otherwise defined
herein shall have the meaning given to them in the Schedule 14D-9. You are
receiving this Information Statement in connection with the possible election
of persons designated by the Purchaser to a majority of the seats on the Board
of Directors of the Company ("Board"). The Merger Agreement requires the
Company, promptly upon the purchase by the Purchaser of a majority of the
outstanding Shares pursuant to the Offer, to cause the Purchaser's designees
(the "Designees") to be elected to a majority of the seats on the Board as set
forth below. This Information Statement is required by Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14f-
1 thereunder. You are urged to read this Information Statement carefully.
However, you are not required to take any action.
 
  Pursuant to the Merger Agreement, on April 30, 1999, Parent and the
Purchaser commenced the Offer. The Offer is scheduled to expire after the
close of business on May 27, 1999.
 
  The information contained in this Information Statement (including
information listed in Schedule I attached hereto) concerning Parent, the
Purchaser and the Designees has been furnished to the Company by Parent and
the Purchaser, and the Company assumes no responsibility for the accuracy or
completeness of such information.
 
  The Common Stock is the only class of voting securities of the Company
outstanding. Each share of Common Stock has one vote. As of April 26, 1999,
there were 116,589,277 shares of Common Stock outstanding.
 
                              BOARD OF DIRECTORS
 
General
 
  The Amended and Restated Certificate of Incorporation, as amended, and the
Second Amended and Restated By-Laws of the Company provide that the number of
directors (which is to be not less than three) is to be determined from time
to time by resolution of the Board. The Board is currently comprised of seven
persons.
 
  Pursuant to the Company's Amended and Restated Certificate of Incorporation,
as amended, the members of the Board are divided into three classes,
designated Class I, Class II and Class III. Each class is to consist, as
nearly as may be possible, of one-third of the total number of members of the
Board. At each Annual Meeting, the directors elected to succeed those whose
terms expire are of the same class as the directors they succeed and are
elected for a term to expire at the third Annual Meeting of Stockholders after
their election and until their successors are duly elected and qualified. A
director of any class who is elected to fill a vacancy resulting from an
increase in the number of directors holds office for the remaining term of the
class to which he is elected and a director who is elected to fill a vacancy
arising in any other manner holds office for the remaining term of his
predecessor.
 
Designees
 
  Pursuant to the Merger Agreement, promptly upon the acceptance for payment
of, and payment by the Purchaser for a majority of the outstanding Shares
pursuant to the Offer, the Purchaser is entitled to designate
 
                                      A-1
<PAGE>
 
such number of members of the Board, rounded up to the next whole number,
equal to that number of directors which equals the product of (1) the total
number of directors on the Board (giving effect to the election of any
additional directors pursuant to this provision) multiplied by (2) the
percentage that such number of Shares owned by the Purchaser and its
affiliates (including any Shares purchased pursuant to the Offer and the
Stockholder Agreement) bears to the number of Shares outstanding; provided,
however, that until the Effective Time (as defined in the Merger Agreement),
there shall be at least two directors who are directors as of the date hereof.
Upon the request of the Purchaser, the Company shall promptly (a) either
increase the size of the Board or use its best efforts to secure the
resignation of such number of its incumbent directors as is necessary to
enable the Designees to be so elected to the Board and (b) cause the Designees
to be so elected.
 
  The Purchaser has informed the Company that it will choose the Designees
from the directors and executive officers of GEC, p.l.c. and its affiliates
listed in Schedule I attached hereto. The Purchaser has informed the Company
that each of the individuals listed in Schedule I has consented to act as a
director, if so designated. The business address of Parent and the Purchaser
is 1500 Mittel Boulevard, Wood Dale, Illinois 60191-1073 (c/o Videojet Systems
International, Inc.).
 
  It is expected that the Designees may assume office at any time following
the purchase by the Purchaser pursuant to the Offer of such number of Shares
representing not less than a majority of the outstanding shares of Common
Stock, which purchase cannot be earlier than May 27, 1999, and that upon
assuming office, the Designees will thereafter constitute at least a majority
of the Board.
 
Directors and Executive Officers of the Company
 
  Set forth below are the name, age, present principal occupation or
employment and five-year employment history of each of the current directors
and the executive officers of the Company.
 
<TABLE>
<CAPTION>
 Name                               Age        Position with the Company
 ----                               ---        -------------------------
 <C>                                <C> <S>
 Eric C. Cooper...................   40 Chairman and Director
 Thomas J. Gill...................   40 President and Chief Executive Officer
                                         and Director
 Robert D. Sansom.................   39 Senior Vice President and Chief
                                         Technology Officer and Director
 John C. Baker....................   49 Director
 Daniel W. McGlaughlin............   62 Director
 John T. LaMacchia................   57 Director
 Daniel R. Hesse..................   45 Director
 Bruce E. Haney...................   43 Senior Vice President and Chief
                                         Financial Officer
 Michael I. Green.................   51 Senior Vice President, Corporate Sales
 Kevin E. Nigh....................   35 Senior Vice President, Worldwide
                                         Engineering
 Robert C. Musslewhite............   48 Senior Vice President, Corporate
                                         Planning
 Ronald E. McKenzie...............   37 Senior Vice President and General
                                         Manager, Volume Products Business Unit
 Donal M. Byrne...................   33 Senior Vice President, Corporate
                                         Marketing
 J. Niel Viljoen..................   37 Senior Vice President and General
                                         Manger, Service Provider Business Unit
</TABLE>
 
  Dr. Cooper is a co-founder of the Company and has served as Chairman and as
a director since April 1990. Dr. Cooper served as President from April 1990
until December 1994 and as Chief Executive Officer from April 1990 until
January 1998. Prior to co-founding the Company, Dr. Cooper was a faculty
member at Carnegie Mellon University. Dr. Cooper received his Ph.D. in
Computer Science from the University of California at Berkeley in 1985. Dr.
Cooper is also a director of ServiceWare, Inc. (a provider of knowledge
management products and services).
 
 
                                      A-2
<PAGE>
 
  Mr. Gill has served as a director and President and Chief Executive Officer
of the Company since January 1998. He served as Chief Operating Officer from
January 1997 to January 1998 and Vice President of Finance, Chief Financial
Officer and Treasurer of the Company from December 1993 to January 1998. From
February 1993 to December 1993, he served as Treasurer and Controller of the
Company. Prior to joining the Company, Mr. Gill was employed in various
financial capacities by Cimflex Teknowledge Corporation (a supplier of factory
automation systems and software), most recently as Vice President of Finance
and Treasurer. Mr. Gill is also a director of Sphere Communications Inc. (a
provider of network telephony products).
 
  Dr. Sansom is a co-founder of the Company and has served as a director from
April 1990 to December 1992 and since February 1994 and as Senior Vice
President and Chief Technology Officer since March 1998. Dr. Sansom served as
Executive Vice President from the Company's inception in April 1990 to
December 1993, served as Secretary from November 1992 to July 1997, served as
Vice President, Engineering from December 1993 to April 1997 and served as
Vice President, Architecture from April 1997 to March 1998. Prior to co-
founding the Company, Dr. Sansom was a member of the Computer Science research
faculty at Carnegie Mellon University where he received his Ph.D. in Computer
Science in 1988. Dr. Sansom is also a director of Visual Interface, Inc. (a
developer of 3D imaging technology).
 
  Mr. Baker has served as a director since December 1992. He founded Baker
Capital Corporation (a private equity investment firm) in September 1995,
where he continues to serve as its President. Until August 1995, he had been a
Senior Vice President of Patricof & Co. Ventures, Inc. (a multi-national
venture capital firm) for more than five years. Mr. Baker is a director of
Intermedia Communications Inc. (a provider of competitive telecom services)
and Resource Bancshares Mortgage Group, Inc. (a correspondent mortgage bank).
 
  Mr. McGlaughlin has served as a director since March 1997. He served as
President and Chief Executive Officer of Equifax, Inc. (an information
services company) from January 1996 through December 1997, and is now retired.
He was elected to the Equifax Board of Directors in October 1990 and continues
to serve as a director of that company. Mr. McGlaughlin served as Equifax's
Senior Vice President, Information Technology from August 1989 to January 1991
when he was named Executive Vice President. Mr. McGlaughlin is also a director
of American Business Products, Inc. (a manufacturer and distributor of
specialty custom printed information products and services), ChoicePoint Inc.
(a provider of insurance-related services) and Nichols Research, Inc. (an
information services company).
 
  Mr. LaMacchia has served as a director since August 16, 1998. He served as
President and Chief Executive Officer of Cincinnati Bell Inc. (a
telecommunications holding company) from October 1993 through February 1999,
and is now retired. Mr. LaMacchia is also a director of Cincinnati Bell Inc.,
Burlington Resources, Inc. (involved with the exploration and production of
oil and gas) and The Kroger Co. (a food retailer).
 
  Mr. Hesse has served as a director since July 30, 1998. Since May, 1997, he
has served as President and Chief Executive Officer of AT&T Wireless Services,
Inc. and prior thereto served in various executive capacities at AT&T since
1990. Mr. Hesse has worked for AT&T since June 1977. Mr. Hesse is also a
director of Chatham Technologies, Inc. (a manufacturer of electronic equipment
enclosures).
 
  Mr. Haney has served as Senior Vice President and Chief Financial Officer
since May 1998. Prior to joining the Company, Mr. Haney was employed for more
than 12 years by The Gustine Group, a privately-held real estate development
company based in Pittsburgh, Pennsylvania, most recently as its President.
Prior to that, Mr. Haney was employed as a certified public accountant with
Arthur Andersen LLP.
 
  Mr. Green has served as Senior Vice President, Corporate Sales since April
1999, as Senior Vice President and General Manager of Worldwide Sales from
March 1998 to April 1999, as Vice President of Worldwide Sales from January
1997 to March 1998, as Vice President of Sales and Marketing from May 1995 to
January 1997, as Vice President of Sales from April 1993 to May 1995 and was
the Company's Director of Sales from April 1992 to April 1993. From February
1989 to April 1992, Mr. Green was a Sales Manager at Ultra Network
 
                                      A-3
<PAGE>
 
Technologies (a provider of networking equipment). Prior to February 1989, Mr.
Green was Federal Regional Manager and Southeast Regional Manager of Network
Systems Corp. (a provider of networking equipment).
 
  Mr. Nigh has served as Senior Vice President, Worldwide Engineering, since
November 1998, as Vice President, Engineering, from July 1997 to October 1998
and as Director of Technical Services from April 1994 through June 1997. Mr.
Nigh joined the Company as an engineer in December 1991.
 
  Mr. Musslewhite has served as Senior Vice President, Corporate Planning
since January 1999, as Vice President, Business Development from January 1997
through December 1998, and as Director, Business Development from January 1996
to December 1996. From January 1994 to December 1995, Mr. Musslewhite was Vice
President, Marketing and Sales for Trillium Digital Systems, Inc.
 
  Mr. McKenzie has served as Senior Vice President and General Manager, Volume
Products Business Unit since March 1999 and as Vice President, Marketing from
November 1996 to February 1999. From 1984 to 1993 and from November 1994
through 1996, Mr. McKenzie held various positions with Hewlett-Packard
Company, most recently as Outbound Marketing Manager. From November 1993 to
November 1994, Mr. McKenzie was a Branch Manager for Silicon Graphics Canada.
 
  Mr. Byrne has served as Senior Vice President, Corporate Marketing, since
November 1998 and as Senior Director, Product Marketing, from September 1998
to November 1998. From September 1996 through September 1998, Mr. Byrne served
as Vice President of Marketing and Product Management of Berkeley Networks,
Inc. (acquired by the Company in September 1998). From September 1994 to
September 1996, Mr. Byrne held various positions with Bay Networks, Inc., most
recently as Director Product Management/Enterprise Architecture.
 
  Mr. Viljoen has served as Senior Vice President and General Manager Service
Provider Business Unit since March 1999, as Vice President, Product Marketing
from July 1998 to February 1999, as Vice President, ATM Engineering from
September 1997 to July 1998, as Group Product Director, Adapters from March
1997 through September 1997, and as Director, Audio and Video for FORE Systems
Limited from November 1996 to March 1997. Mr. Viljoen was previously Chief
Executive Officer of Nemesys Research (acquired by the Company in November
1996) and prior thereto was Program Manager (Director) of Network Solutions,
CSIR South Africa from January 1993 to March 1996.
 
Meetings of the Board of Directors and Committees
 
  The Board met eight times during the fiscal year ended March 31, 1999
("fiscal 1999"). The Board has an Executive Committee, an Audit Committee and
a Compensation Committee. The Board does not have a standing Nominating
Committee.
 
  The Executive Committee is authorized, subject to Delaware law, to exercise
the power and authority of the Board in the management of the business and
affairs of the Company between meetings of the full Board. The members of the
Executive Committee are Dr. Cooper (Chairman), Mr. Gill and Dr. Sansom.
 
  The Audit Committee is responsible for nominating the Company's independent
accountants for approval by the Board, reviewing the scope, results and costs
of the audit with the Company's independent accountants and reviewing the
financial statements of the Company and the audit function to ensure
compliance with requirements of regulatory agencies and appropriate disclosure
of necessary information to the stockholders of the Company. The members of
the Audit Committee are Messrs. Baker and McGlaughlin. The Audit Committee met
three times during fiscal 1999.
 
  The Compensation Committee is responsible for administering compensation
levels of the Company's executive officers, for administering the Company's
Incentive Stock Option and Nonqualified Stock Option Plan, its 1994 Stock
Option Plan, its 1995 Stock Incentive Plan, its 1996 Stock Option Plan, the
1998 Stock Option Plan, its 1994 Employee Stock Purchase Plan, the ALANTEC
Corporation Second Amended and Restated 1991 Stock Option Plan, the ALANTEC
Corporation 1994 Stock Option Plan and the Berkeley Networks, Inc.
 
                                      A-4
<PAGE>
 
Substitute Stock Option Plan (collectively, the "Existing Plans") and for
recommending other compensation decisions to the Board. The members of the
Compensation Committee are Messrs. Baker and McGlaughlin. The Compensation
Committee held six meetings during fiscal 1999.
 
  No director attended fewer than 75% of the total number of meetings of the
Board and the meetings of any committee of the Board on which he served during
fiscal 1999 other than Daniel R. Hesse who attended five out of seven meetings
held during the period he served on the Board.
 
Compensation of Directors
 
  During fiscal 1999, with the exception of Mr. McGlaughlin, Mr. LaMacchia and
Mr. Hesse, directors did not receive compensation for serving as members of
the Board or committees thereof. Messrs. McGlaughlin, LaMacchia and Hesse each
received $30,000 for service on the Board and the committees to which he has
been elected. Directors are reimbursed for travel and other expenses relating
to attendance at meetings of the Board or committees thereof.
 
  Pursuant to the Company's 1996 Stock Option Plan, each person who is a
director immediately preceding each annual meeting of the stockholders of the
Company receives a nonqualified option to purchase 2,000 shares of Common
Stock. Each such award is immediately exercisable in full. Pursuant to the
Company's 1996 Stock Option Plan, Messrs. LaMacchia and Hesse received a
nonqualified option to purchase 10,000 shares upon their election to the
Board. Each such award vests in three annual installments commencing on the
first anniversary of the date of grant, provided that the optionee continues
to serve on the Board on each such anniversary date.
 
                                      A-5
<PAGE>
 
                            EXECUTIVE COMPENSATION
 
Compensation Summary
 
  The following table sets forth information regarding compensation of the
Chief Executive Officer and the five most highly compensated executive
officers of the Company other than the Chief Executive Officer (collectively
the "Named Executive Officers") of the Company for the fiscal years ended
March 31, 1999, 1998 and 1997.
 
                          SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                            Long-Term
                                Annual Compensation        Compensation
                         --------------------------------- ------------
                                              Other Annual                 All Other
   Name and Principal         Salary   Bonus  Compensation Stock Option   Compensation
        Position         Year   ($)     ($)       ($)       Awards (#)      ($)(11)
   ------------------    ---- ------- ------- ------------ ------------   ------------
<S>                      <C>  <C>     <C>     <C>          <C>            <C>
Eric C. Cooper.......... 1999 300,000      --      --        339,500(3)      6,400
 Chairman                1998 300,000 105,000      --        402,000         6,400
                         1997 300,000      --      --        502,000(10)     6,400
Thomas J. Gill.......... 1999 400,000      --      --        968,250(4)      6,400
 President and Chief
  Executive Officer      1998 303,262 106,142      --        910,000         6,400
                         1997 200,000      --      --        100,000(10)     6,400
Robert D. Sansom........ 1999 212,333      --      --        236,876(5)      6,400
 Senior Vice President
  and Chief Technology   1998  61,834  59,500      --        252,000         2,474
 Officer                 1997 170,000      --      --        302,000(10)     6,400
Bruce E. Haney (1)...... 1999 223,588      --      --        400,000(6)      6,400
 Senior Vice President
  and Chief Financial    1998      --      --      --             --            --
 Officer                 1997      --      --      --             --            --
Michael I. Green........ 1999 300,308      --      --        268,750(7)      6,400
 Senior Vice President,
  Corporate Sales        1998 220,001  77,001      --        300,000         6,400
                         1997 200,000      --      --        100,000(10)     6,400
Kevin E. Nigh (2)....... 1999 213,590      --      --        359,688(8)      6,400
 Senior Vice President,
  Worldwide Engineering  1998 172,086  60,230      --        220,000(9)      6,400
                         1997 120,000      --      --        120,000(10)     6,300(12)
</TABLE>
- --------
(1) Mr. Haney was named Senior Vice President and Chief Financial Officer
    effective May 4, 1998.
(2) Mr. Nigh was named Senior Vice President, Worldwide Engineering on
    November 17, 1998.
(3) Includes stock options to purchase 337,500 shares of Common Stock granted
    in prior periods and repriced on October 13, 1998. See "Report on Fiscal
    1999 Repricing of Options."
(4) Includes stock options to purchase 816,250 shares of Common Stock granted
    in prior periods and repriced on October 13, 1998. See "Report on Fiscal
    1999 Repricing of Options."
(5) Includes stock options to purchase 234,376 shares of Common Stock granted
    in prior periods and repriced on October 13, 1998. See "Report on Fiscal
    1999 Repricing of Options."
(6) Includes stock options to purchase 200,000 shares of Common Stock granted
    in prior periods and repriced on October 13, 1998. See "Report on Fiscal
    1999 Repricing Options."
(7) Includes stock options to purchase 268,750 shares of Common Stock granted
    in prior periods and repriced on October 13, 1998. See "Report on Fiscal
    1999 Repricing of Options."
(8) Includes stock options to purchase 134,688 shares of Common Stock granted
    in prior periods and repriced on October 13, 1998. See "Report on Fiscal
    1999 Repricing of Options."
(9) Includes stock options to purchase 120,000 shares of Common Stock granted
    in prior periods and repriced on April 4, 1997.
(10) On May 6, 1996, the Board declared a two-for-one Common Stock Split
     effected in the form of a Common Stock dividend paid on June 3, 1996 to
     stockholders of record on May 20, 1996 ("Stock Dividend"). Common Stock
     Share data presented in this table has been retroactively adjusted to
     give effect to the Stock Dividend.
(11) Consists of a discretionary contribution by the Company under the
     Company's 401(k) plan.
(12) Includes $1,500 for a referral bonus.
 
                                      A-6
<PAGE>
 
STOCK OPTION GRANTS
 
  The following table sets forth certain information with respect to the
individual grants of stock options made to the Named Executive Officers during
fiscal 1999.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 
<TABLE>
<CAPTION>
                                     Individual Grants
                         --------------------------------------------
                         Number of   Percent of                        Potential Realizable
                         Securities  Total Stock                         Value At Assumed
                         Underlying    Options                         Annual Rates of Stock
                           Stock     Granted to                       Price Appreciation for
                          Options     Employees  Exercise                 Option Term (7)
                          Granted     in Fiscal    Price   Expiration -----------------------
          Name              (#)         Year     ($/Share)    Date      5% ($)      10% ($)
          ----           ----------  ----------- --------  ---------- ----------- -----------
<S>                      <C>         <C>         <C>       <C>        <C>         <C>
Eric C. Cooper..........   2,000(1)     0.01     25.5630   07/30/2008      32,153      81,482
                          68,750(2)     0.32     12.5000   05/01/2007     540,456   1,369,622
                          68,750(2)     0.32     12.5000   05/01/2007     540,456   1,369,622
                         200,000(2)     0.94     12.5000   01/22/2008   1,572,237   3,984,356
Thomas J. Gill..........   2,000(1)     0.01     25.5630   07/30/2008      32,153      81,482
                          68,750(2)     0.32     12.5000   05/27/2007     540,456   1,369,622
                          68,750(2)     0.32     12.5000   05/27/2007     540,456   1,369,622
                          68,750(2)     0.32     12.5000   05/27/2007     540,456   1,369,622
                         250,000(2)     1.18     12.5000   01/22/2008   1,965,296   4,980,445
                          10,000(2)     0.05     12.5000   01/22/2008      78,612     199,218
                         350,000(2)     1.65     12.5000   01/22/2008   2,751,414   6,972,623
                         150,000(3)     0.71     16.5000   02/08/2009   1,556,514   3,944,513
Robert D. Sansom........   2,000(1)     0.01     25.5630   07/30/2008      32,153      81,482
                          17,188(2)     0.08     12.5000   05/01/2007     135,118     342,416
                          17,188(2)     0.08     12.5000   05/01/2007     135,118     342,416
                         200,000(2)     0.94     12.5000   03/02/2008   1,572,237   3,984,356
                             500(8)     0.00      18.906   03/31/2009       5,945      15,066
Bruce E. Haney.......... 200,000(4)     0.94     22.5000   05/11/2008   2,830,026   7,171,841
                         200,000(2)     0.94     12.5000   05/11/2008   1,572,237   3,984,356
Michael I. Green........  68,750(2)     0.32     12.5000   05/01/2007     540,456   1,369,622
                         200,000(2)     0.94     12.5000   03/31/2008   1,572,237   3,984,356
Kevin E. Nigh...........  25,000(5)     0.12     25.9380   07/01/2008     407,807   1,033,462
                          15,000(2)     0.07     12.5000   04/01/2006     117,918     298,827
                          15,000(2)     0.07     12.5000   07/23/2006     117,918     298,827
                          31,250(2)     0.15     12.5000   03/12/2007     245,662     622,556
                          50,000(2)     0.24     12.5000   07/28/2007     393,059     996,089
                          23,438(2)     0.11     12.5000   07/01/2008     184,250     466,927
                         200,000(6)     0.94     13.4380   11/17/2008   1,690,217   4,283,342
</TABLE>
- --------
 
(1) Granted on July 30, 1998 to members of the Board as an annual stock option
    award; vesting as to 100% on the grant date.
(2) Granted on October 13, 1998; consists of shares subject to options
    repriced from grants made since January 1, 1997.
(3) Granted on February 8, 1999; vesting as to 6.25% at the end of each
    quarter of such option grant.
(4) Granted on May 11, 1998; vesting as to 25% of the option grant on the
    first anniversary thereof and at the end of each quarter thereafter as to
    an additional 6.25% of such option grant.
(5) Granted on July 1, 1998; vesting as to 6.25% at the end of each quarter of
    such option grant.
(6) Granted on November 17, 1998; vesting as to 25% of the option grant on the
    first anniversary thereof and at the end of each quarter thereafter as to
    additional 6.25% of such option grant.
(7) Amounts represent potential gains at the assumed rates of appreciation if
    the options are exercised at the end of the option term. The assumed 5%
    and 10% rates of stock price appreciation are provided in accordance with
    the rules of the Securities and Exchange Commission ("Commission") and do
    not represent the Company's estimate or projection of future stock price
    appreciation.
(8) Granted on March 31, 1998; vesting as to 10% of the option on the filing
    date of a certain patent application and 10% on each one-year anniversary
    of such date.
 
                                      A-7
<PAGE>
 
Year-end Option Value Table
 
  The following table sets forth certain information with respect to the
exercise of options by the Named Executive Officers during fiscal 1999 and the
value of options held at that date.
 
   AGGREGATED OPTION EXERCISES IN LAST FISCAL YEARAND FISCAL YEAR-END OPTION
                                    VALUES
 
<TABLE>
<CAPTION>
                                                        Number of Unexercised   Value of Unexercised in-
                           Shares                      Options at Fiscal Year-    the-Money Options at
                         Acquired on                             End               Fiscal Year-End (2)
                          Exercise        Value       ------------------------- -------------------------
                             (#)     Realized ($) (1) Exercisable Unexercisable Exercisable Unexercisable
                         ----------- ---------------- ----------- ------------- ----------- -------------
<S>                      <C>         <C>              <C>         <C>           <C>         <C>
Eric C. Cooper..........       --              --       487,250      418,750       530,075    1,681,575
Thomas J. Gill..........   50,000       1,100,000       530,334      806,666     4,497,345    4,367,315
Robert D. Sansom........       --              --       284,124      272,376       377,008    1,141,075
Bruce E. Haney..........       --              --            --      200,000            --    1,281,200
Michael I. Green........       --              --       162,500      237,500       545,875    1,321,238
Kevin E. Nigh...........   50,000         483,594        93,124      308,126       420,062    1,786,255
</TABLE>
- --------
(1) Based upon the market price of the purchased shares on the exercise date
    less the option exercise price per share paid for such shares.
(2) Represents the difference between the closing price of the Common Stock as
    reported on the Nasdaq National Market on March 31, 1999 ($18.906) and the
    exercise price of the options, multiplied by the number of shares of
    Common Stock issuable upon the exercise of the options.
 
Report on Fiscal 1999 Repricing of Options
 
  Since the Company's initial public offering in May 1994, the Company has
granted stock options to employees to motivate and to encourage them to devote
their best efforts to the business and financial success of the Company. In
October 1998, the Compensation Committee of the Board determined that, as a
result of a decline in the market price of the Common Stock since August 1998,
the purposes of the Existing Plans were not being adequately achieved with
respect to those employees holding options that had exercise prices
significantly above the then current market value. In light of these events,
including the fact that two of the Company's competitors had recently repriced
their options, the Compensation Committee was concerned that it would not be
possible to retain key employees unless options were repriced.
 
  On October 13, 1998, the Compensation Committee modified the exercise price
applicable to outstanding unvested stock options held by all employees, other
than participants in the Company's Change of Control Severance Plan
("Management Employees"), to an exercise price equal to the closing price of
the Common Stock on the Nasdaq National Market on October 13, 1998, and
modified the exercise price applicable to outstanding unvested stock options
held by Management Employees, including the Named Executive Officers, to such
price multiplied by 1.25. In addition, the Compensation Committee provided all
employees, other than Management Employees, with the choice of modifying the
exercise price applicable to outstanding vested stock options to the closing
price of the Common Stock on the Nasdaq National Market on October 26, 1998,
and provided Management Employees with the choice of modifying the exercise
price of vested stock options held by Management Employees to an exercise
price equal to the closing price of the Common Stock on the Nasdaq National
Market on October 26, 1998 multiplied by 1.25. If an employee, including a
Management Employee, chose to reprice his or her vested stock options, such
repriced vested stock options would vest over a two-year period commencing on
October 13, 1998 with 50% of such stock options vesting on October 13, 1999
and the balance of such stock options vesting pro rata on a quarterly basis at
the end of each three month period beginning on January 13, 2000 and ending on
October 13, 2000. Stock options granted to Messrs. Cooper, Gill, Sansom and
Green prior to January 1, 1997 were excluded from the repricing.
 
                                      A-8
<PAGE>
 
  The following table sets forth certain information with respect to the Named
Executive Officers for the ten year period ending on March 31, 1999.
 
                          TEN-YEAR OPTION REPRICINGS
 
<TABLE>
<CAPTION>
                                    Number of                                       Length of
                                   Securities   Market Price   Exercise              Original
                                   Underlying   of Stock At    Price at            Option Term
                                  Options/SAR's   Time of      Time of      New    Remaining at
                                   Repriced or  Repricing or Repricing or Exercise   Date of
                                     Amended     Amendment    Amendment    Price   Repricing or
          Name             Date        (#)          ($)          ($)        ($)     Amendment
          ----           -------- ------------- ------------ ------------ -------- ------------
<S>                      <C>      <C>           <C>          <C>          <C>      <C>
Eric C. Cooper.......... 10/13/98     68,750      10.0000      17.5000    12.5000      8.55
                         10/13/98     68,750      10.0000      20.0000    12.5000      8.55
                         10/13/98    200,000      10.0000      16.3130    12.5000      9.28
Thomas J. Gill.......... 10/13/98     68,750      10.0000      14.7500    12.5000      8.62
                         10/13/98     68,750      10.0000      17.5000    12.5000      8.62
                         10/13/98     68,750      10.0000      20.0000    12.5000      8.62
                         10/13/98    250,000      10.0000      16.3130    12.5000      9.28
                         10/13/98     10,000      10.0000      16.3130    12.5000      9.28
                         10/13/98    350,000      10.0000      16.3130    12.5000      9.28
Robert D. Sansom........ 10/13/98     17,188      10.0000      17.5000    12.5000      8.55
                         10/13/98     17,188      10.0000      20.0000    12.5000      8.55
                         10/13/98    200,000      10.0000      15.5000    12.5000      9.39
Bruce E. Haney.......... 10/13/98    200,000      10.0000      22.5000    12.5000      9.58
Michael I. Green........ 10/13/98     68,750      10.0000      14.2500    12.5000      8.55
                         10/13/98    200,000      10.0000      15.7500    12.5000      9.47
Kevin E. Nigh........... 10/13/98     15,000      10.0000      15.1875    12.5000      7.47
                         10/13/98     15,000      10.0000      15.1875    12.5000      7.78
                         10/13/98     31,250      10.0000      15.1875    12.5000      8.42
                         10/13/98     50,000      10.0000      13.8750    12.5000      8.79
                         10/13/98     23,438      10.0000      25.9380    12.5000      9.72
                         04/04/97     30,000      15.1875      25.1250    15.1875      9.31
                         04/04/97     40,000      15.1875      35.0000    15.1875      9.00
                         04/04/97     50,000      15.1875      23.2500    15.1875      9.94
</TABLE>
 
             JOHN C. BAKER                      DANIEL W. McGLAUGHLIN
 
Arrangements Regarding Termination of Employment
 
  On April 18, 1996, the Board adopted the FORE Systems, Inc. Change in
Control Separation Plan which was amended and restated by the Board on
September 4, 1998. The plan provides designated executive officers and other
key employees with certain separation benefits if a Change in Control (as
defined in the plan) occurs and if, within two years thereafter, a
participant's employment with the Company is terminated either by action of
the Company without "Cause" or by the participant's resignation from
employment for "Good Reason" (as defined in the plan). The material terms of
the plan are described in Item 3 of the Schedule 14D-9 and incorporated herein
by reference.
 
Compensation Committee Interlocks and Insider Participation
 
  Messrs. Baker and McGlaughlin served as members of the Compensation
Committee during fiscal 1999.
 
                                      A-9
<PAGE>
 
                         SECURITY OWNERSHIP OF CERTAIN
                       BENEFICIAL OWNERS AND MANAGEMENT
 
  The following table sets forth, as of April 26, 1999, the beneficial
ownership of Common Stock by (i) each person known by the Company to be the
beneficial owner of 5% or more of the Common Stock, (ii) each person who is a
director or Named Executive Officer of the Company and (iii) all directors and
executive officers of the Company as a group (based on 116,589,277 shares of
Common Stock outstanding as of such date).
 
<TABLE>
<CAPTION>
                                                            Shares
                                                      Beneficially Owned
                                                      -------------------------
                 Name of Beneficial Owner               Number          Percent
                 ------------------------             ----------        -------
      <S>                                             <C>               <C>
      Eric C. Cooper................................. 3,665,367 (1) (2)   3.1
      Thomas J. Gill.................................   603,409 (3) (4)    *
      Robert D. Sansom............................... 3,645,425 (5) (6)   3.1
      Bruce E. Haney.................................    51,372 (7)        *
      Michael I. Green...............................   474,997 (8) (9)    *
      Kevin E. Nigh..................................   108,437 (10)       *
      John C. Baker..................................   101,000 (11)       *
      Daniel W. McGlaughlin..........................    18,667 (12)       *
      John LaMacchia.................................     2,000            *
      Daniel R. Hesse................................        --            *
      Maverick Capital Ltd........................... 6,235,500 (13)      5.3
       300 Crescent Court, Suite 1850
       Dallas, TX 75201
      All directors and executive officers as a
       group (14 persons)............................ 9,251,885 (14)     7.9%
</TABLE>
- --------
* Less than 1%
 
 (1) Includes an aggregate of 965,950 shares owned by Dr. Cooper's spouse and
   trusts of which Dr. Cooper's spouse is trustee and his children are
   beneficiaries. Dr. Cooper disclaims beneficial ownership of all such
   shares.
 (2) Includes 543,500 shares which could be acquired pursuant to the exercise
   of stock options exercisable within 60 days of April 30, 1999.
 (3) Includes 1,200 shares owned by Mr. Gill's children. Mr. Gill disclaims
   beneficial ownership of all such shares.
 (4) Includes 602,209 shares which could be acquired pursuant to the exercise
   of stock options exercisable within 60 days of April 30, 1999.
 (5) Includes 549,430 shares owned by Dr. Sansom's spouse. Dr. Sansom
   disclaims beneficial ownership of all such shares.
 (6) Includes 318,498 shares which could be acquired pursuant to the exercise
   of stock options exercisable within 60 days of April 30, 1999.
 (7) Includes 50,000 shares which could be acquired pursuant to the exercise
   of stock options exercisable within 60 days of April 30, 1999 and 28 shares
   held in an IRA by Mr. Haney's spouse.
 (8) Includes 20,000 shares owned by Mr. Green's spouse, 400 shares owned by
   Mr. Green's spouse as custodian for his grandson and 2,700 shares owned by
   Mr. Green as custodian for his children. Mr. Green disclaims beneficial
   ownership of all such shares.
 (9) Includes 175,000 shares which could be acquired pursuant to the exercise
   of stock options exercisable within 60 days of April 30, 1999.
(10) Includes 108,437 shares which could be acquired pursuant to the exercise
   of stock options exercisable within 60 days of April 30, 1999.
(11) Includes 6,000 shares which could be acquired pursuant to the exercise of
   stock options exercisable within 60 days of April 30, 1999.
(12) Consists of 10,667 shares which could be acquired pursuant to the
   exercise of stock options exercisable within 60 days of April 30, 1999.
(13) Maverick Capital Ltd. has sole voting power with respect to 6,235,000
   shares of Common Stock and sole power to dispose of or direct the
   disposition of 6,235,000 shares of Common Stock. Based on information
   contained in a Schedule 13G filed by Maverick Capital Ltd. with the
   Commission on February 26, 1999.
(14) Includes 1,985,066 shares which could be acquired pursuant to the
   exercise of stock options exercisable within 60 days of April 30, 1999.
 
                                     A-10
<PAGE>
 
Report on Compensation of Executive Officers
 
  The Compensation Committee administers the Existing Plans. The Compensation
Committee also recommends to the Board salaries, bonuses, benefits and other
remuneration payable to the executive officers and key employees of the
Company. The members of the Compensation Committee are John C. Baker and
Daniel W. McGlaughlin, neither of whom is employed by the Company.
 
  The Company underwent a management transition during fiscal 1999. On April
30, 1998, the Board appointed Robert Sansom as Senior Vice President and Chief
Technology Officer and Michael I. Green as Senior Vice President and General
Manager, Worldwide Sales. Bruce E. Haney was appointed as Senior Vice
President and Chief Financial Officer, effective May 4, 1998. In connection
with such appointments, the Committee increased the annual base salary of Dr.
Sansom to $200,000 and Mr. Green to $300,000 and approved an initial base
salary for Mr. Haney of $250,000. Mr. Haney also received an option to
purchase 200,000 shares of Common Stock.
 
  The annual base salary of Mr. Gill, who was appointed President and Chief
Executive Officer in January 1998, was increased from $400,000 to $500,000 in
February 1999. In determining an appropriate salary level for Mr. Gill, the
Compensation Committee reviewed three surveys of compensation packages for
chief executive officers in (i) high technology companies, (ii) high
technology companies with annual revenues from $200 million to $1 billion and
(iii) companies in the high-speed networking industry.
 
  The Company repriced certain stock options held by the Chief Executive
Officer and the other Named Executive Officers during fiscal 1999. The
Committee believed that the repricing would provide appropriate incentives for
senior management and was in the best interests of the Company's stockholders.
In addition, the Chief Executive Officer and other executive officers were
granted additional stock options during fiscal 1999. The Compensation
Committee believed that such grants would aid in the retention of executive
officers by ensuring that an appropriate number of stock options held by them
would remain unvested.
 
  In April 1998, the Committee adopted a Senior Management Bonus Plan for
fiscal 1999 which would reward the Company's executive officers with bonus
payments if certain revenue, earnings per share and individual performance
objectives were achieved. Under the Senior Management Bonus Plan, no bonus
pool would be available unless specific earnings per share objectives were met
in each fiscal quarter. Since these objectives were not met, no bonus became
payable under the plan.
 
  The Company does not maintain benefit plans exclusively for its executive
officers, nor does it provide executive officers with other benefits that are
not generally available to all of the Company's employees.
 
  The Compensation Committee has considered the potential impact of Section
162(m) of the Internal Revenue Code of 1986, as amended, which imposes a limit
on tax deductions for annual compensation in excess of $1,000,000 paid to its
Chief Executive Officer and its four other most highly compensated executive
officers. The Committee does not believe that this limitation will apply to
the Company because the 1995 Stock Incentive Plan, the 1996 Stock Option Plan
and the 1998 Stock Option Plan have been designed with the objective of
excluding from the calculation of the $1,000,000 limitation options granted
under these plans, and the Committee does not expect the base salaries and
bonuses of the Chief Executive Officer and the other executive officers to
exceed the $1,000,000 level.
 
             JOHN C. BAKER                      DANIEL W. MCGLAUGHLIN
 
                                     A-11
<PAGE>
 
           COMPARISON OF CUMULATIVE TOTAL RETURN SINCE MAY 23, 1994
 
  The following graph shows the cumulative total stockholder return on the
Common Stock from May 23, 1994 (the last trading day before the date of the
Company's initial public offering) through March 31, 1999, as compared to the
returns of the Total Return Index for The Nasdaq Stock Market (US) and the
Nasdaq Computer Manufacturer Stocks Index. The graph assumes that $100 was
invested in the Common Stock and in the Total Return Index for The Nasdaq
Stock Market (US) and in the Nasdaq Computer Manufacturer Stocks Index as of
May 23, 1994, and assumes reinvestment of dividends.
 
                                   Total Return              Nasdaq Computer
           FORE Systems, Inc.      Index for Nasdaq          Manufacturer Stocks
                                   Stock Market (US)         Index

5/23/94         100.00               100.00                     100.00
                                                                      
9/30/94         278.13               105.88                     113.70
                                                                      
3/31/95         493.75               114.11                     137.73
                                                                      
9/29/95         462.50               146.25                     201.51
                                                                      
3/29/96         893.75               154.93                     212.13
                                                                      
9/30/96       1,034.38               173.54                     263.30
                                                                      
3/31/97         375.00               172.20                     232.24
                                                                      
9/30/97         492.20               238.25                     377.07
                                                                      
3/31/98         393.75               261.37                     411.65
                                                                      
9/30/98         415.63               242.20                     532.43
                                                                      
3/31/99         472.65               351.28                     814.00 
 
 
<TABLE>
<CAPTION>
                          5/23/94 9/30/94 3/31/95 9/29/95 3/29/96 9/30/96  3/31/97 9/30/97 3/31/98 9/30/98 3/31/99
                          ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- -------
<S>                       <C>     <C>     <C>     <C>     <C>     <C>      <C>     <C>     <C>     <C>     <C>
FORE Systems, Inc.......  100.00  278.13  493.75  462.50  893.75  1,034.38 375.00  492.20  393.75  415.63  472.65
Total Return Index for
 The Nasdaq Stock Market
 (US)...................  100.00  105.88  114.11  146.25  154.93    173.54 172.20  238.25  261.37  242.20  351.28
Nasdaq Computer
 Manufacturer Stocks
 Index..................  100.00  113.70  137.73  201.51  212.13    263.30 232.24  377.07  411.65  532.43  814.00
</TABLE>
 
            SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
  Under Section 16(a) of the Exchange Act, the Company's directors, officers
and persons who are directly or indirectly the beneficial owners of more than
10% of the Common Stock of the Company are required to file with the
Commission, within specified monthly and annual due dates, a statement of
their initial beneficial ownership and all subsequent changes in ownership of
the Common Stock. Rules of the Commission require such persons to furnish the
Company with copies of all Section 16(a) forms they file. Based solely upon a
review of such forms, the Company believes that, during fiscal 1999, all such
persons complied with all applicable filing requirements other than Mr.
LaMacchia who filed a statement of initial beneficial ownership late.
 
 
                                     A-12
<PAGE>
 
 
                                                                     SCHEDULE I
 
  As of the date of this Information Statement, the Purchaser has not
determined who will be the Designees. However, such Designees will be selected
from the following list of directors and executive officers of GEC, p.l.c. or
its affiliates promptly upon the purchase by the Purchaser of a majority of
the outstanding Shares on a fully diluted basis pursuant to the Offer. The
information contained herein concerning GEC, p.l.c. and its directors and
executive officers and those of its affiliates has been furnished by Parent
and the Purchaser. The Company assumes no responsibility for the accuracy or
completeness of such information.
 
  The name, present principal occupation or employment and five-year
employment history of each Designee and certain other information is set forth
below. Except as noted, none of the persons listed below owns any Shares or
has engaged in any transactions with respect to Shares during the past 60
days. During the last five years, neither GEC, p.l.c., Parent nor any
individual indicated below has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) nor was such person a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction, and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation or such laws. All of the individuals listed below are citizens of
the United Kingdom, except for Messrs. Edeus and Korb and Ms. Hoffman who are
citizens of the United States.
 
<TABLE>
<CAPTION>
                                             Present Principal Occupation or
                                                      Employment and
        Name and Business Address              Five-Year Employment History
        -------------------------            -------------------------------
 <C>                                      <S>
 Mike Parton............................. Managing Director of Marconi
  Marconi Communications Limited          Communications Limited (1998-
  New Century Park                        present); Managing Director of GEC
  Coventry, CV3 1HJ (England)             Industrial Group (1997-1998);
                                          Managing Director of GPT Public
                                          Networks Group (1995-1997); Finance
                                          Director of GPT Public Networks Group
                                          (1994-1995).
 Thomas R. Edeus......................... Treasurer of GEC Incorporated (1997-
  GEC Incroporated                        present); Videojet Systems
  c/o Videojet Systems International, Inc.International, Inc. (1997-present)
  1500 Mittel Boulevard                   and A.B. Dick Company (1994-1997).
  Wood Dale, IL 60191-1073
 Patricia A. Hoffman..................... Secretary of GEC Incorporated (1997-
  GEC Incorporated                        present); Videojet Systems
  c/o Videojet Systems International, Inc.International, Inc. (1997-present)
  1500 Mittel Boulevard                   and A.B. Dick Company (1994-1997).
  Wood Dale, IL 60191-1073
 William B. Korb......................... President and CEO of Gilbarco Inc.
  Gilbarco Inc.                           (1994-present)
  7300 W. Friendly Avenue
  P.O. Box 22087
  Greensboro, NC 27420
 Andy Lee................................ Human Resources Director of Marconi
  Marconi Communications Limited          Communications Limited (1998-
  New Century Park                        Present); Personnel Director of
  Coventry, CV3 1HJ (England)             Marconi Electronic Systems Limited
                                          (1996-1998); Personnel Director of
                                          GPT Public Networks Group (1994-
                                          1996).
 John Charles Mayo....................... President and Treasurer of GEC
  The General Electric Company, p.l.c.    Acquisition Corp. (1999-present);
  One Bruton Street                       Finance Director of The General
  London, WIX 8AQ (England)               Electric Company, p.l.c. (1997-
                                          present); Finance Director of ZENECA
                                          Group PLC(7) (1994-1997).
</TABLE>
 
 
                                      I-1
<PAGE>
 
<TABLE>
<CAPTION>
                                            Present Principal Occupation or
                                                    Employment and
       Name and Business Address             Five-Year Employment History
       -------------------------            -------------------------------
 <C>                                   <S>
 Robert Ian Meakin.................... Executive Director of The General
  The General Electric Company, p.l.c. Electric Company, p.l.c. (1998-present);
  One Bruton Street                    Personnel Director of The General
  London, WIX 8AQ (England)            Electric Company, p.l.c. (1996-present);
                                       Personnel Director of British Aerospace
                                       PLC (1994-1996).
 Peter Rowley ........................ Group Commercial Director of Marconi
  Marconi Communications Limited       Communications Limited (1998-Present);
  New Century Park                     Managing Director, Distribution of GEC
  Coventry, CV3 1HJ (England)          Industrial Group (1997-1998); Managing
                                       Director of GEC Marconi In-Flight
                                       Systems Limited (1995-1997); Commercial
                                       Director of GPT Limited (1994-1995).
</TABLE>
 
                                      I-2

<PAGE>

                                                                       EXHIBIT 5
 
                             CONSULTING AGREEMENT
                             --------------------


     THIS CONSULTING AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Eric C. Cooper, a resident of Pittsburgh, Pennsylvania ("Consultant").

     WHEREAS, Consultant is currently employed as the Chairman of the Company
and is a participant in the Company's Change in Control Separation Plan, as
amended and restated effective September 4, 1998, (the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, Consultant is planning to retire from the employment of the
Company but, after negotiation, the Company and Consultant wish to enter into a
contract that will provide for Consultant's continued service to the Company, to
take effect immediately prior to the time of Closing (the "Effective Date"), in
partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Consultant, except as provided in
Section 1 below, which Consultant hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Consultant's role in rendering consulting services to the Company upon the terms
and conditions set forth herein, and to set forth certain obligations of
Consultant not to misuse the Company's Confidential Information, as defined
below, and not to compete with the Company or solicit its Principal Customers,
as defined below in exchange, in part, for the conversion of certain stock
<PAGE>
 
options previously granted to Consultant into options to purchase phantom
ordinary shares of the Parent Company;

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Consultancy.  On the Effective Date, Consultant shall retire from the
         -----------                                                          
Company.  Notwithstanding that retirement, the Company hereby agrees to engage
Consultant, and Consultant hereby accepts such engagement and agrees to perform
Consultant's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Consultant hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Consultant should any of the actions, payments or benefits under
this Agreement require the additional payments called for by that Section; and,
provided, further, that any interest and penalties imposed upon Consultant
related to an event under that Section shall be covered by the Company as well
on a net after-tax basis to Consultant assuming he is in the highest marginal
tax bracket for Federal, state and local income and employment taxes.

     1.1.  Consulting Term.  The term of Consultant's engagement under this
           ---------------                                                 
Agreement shall be two years commencing on the Effective Date (the "Consulting
Term").

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Consulting Term, Consultant shall accept all reasonable assignments that may be
given to him by the Company's Chief Executive Officer (the "CEO") or by the
Board and agrees to use Consultant's best efforts to carry out Consultant's
duties and responsibilities.  Consultant shall not be required to devote more
than 40 hours per month to the Company's affairs, to travel outside of the
Pittsburgh area 

                                       2
<PAGE>
 
without his consent or to perform his duties at the Company's offices unless he
is to attend meetings. Consultant's duties shall be primarily to transition to
those Company employees who will be taking over the duties and responsibilities
that he formerly had for the Company, providing technical support on those
projects on which he was formerly engaged and assisting the CEO with special
projects within Consultant's particular area of expertise when requested to do
so. In addition, Consultant may be asked to serve, and if so will serve, on the
Company's technical advisory board serving at the pleasure of the CEO.

     1.4.  Consulting Fee.  For all the services rendered by Consultant
           --------------                                              
hereunder, the Company shall pay Consultant a consulting fee ("Consulting Fee"),
in a lump sum immediately following the Closing equal to $300,000, for the full
Consulting Term.  In addition, the Company shall provide Consultant with a
reimbursement of expenses related to the consulting services for the Company
upon submission of appropriate documentation to the Company.

     2.   Confidential Information.  Consultant recognizes and acknowledges that
          ------------------------                                              
by reason of Consultant's employment by and service to the Company prior to the
Effective Date and by reason of his services hereunder during the Consulting
Term, Consultant has had and will have access to certain confidential and
proprietary information relating to the business of the Company, which may
include, but is not limited to, trade secrets, trade "know-how", customer
information, supplier information, cost and pricing information, marketing and
sales techniques, strategies and programs, computer programs and software and
financial information (collectively referred to as "Confidential Information").
Consultant acknowledges that such Confidential Information is a valuable and
unique asset of the Company and Consultant covenants that Consultant will not,
unless expressly authorized in writing by the Board, at any time during the
Consulting Term or thereafter use any Confidential Information or divulge or
disclose any 


                                       3
<PAGE>
 
Confidential Information to any person, firm or corporation except in connection
with the performance of Consultant's duties for the Company and in a manner
consistent with the Company's policies regarding Confidential Information,
unless such information is in the public domain through no fault of Consultant
or except when required to do so by a court of law, by any governmental agency
having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
jurisdiction to order Consultant to divulge, disclose or make accessible such
information, in which case Consultant will inform the Company in writing
promptly of such required disclosure, but in any event at least 15 business days
prior to disclosure or the amount of time Consultant has to respond to the
required request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Consultant's possession during the Consulting Term shall remain
the property of the Company. Unless expressly authorized in writing by the
Board, Consultant shall not remove any written Confidential Information from the
Company's premises, except in connection with the performance of Consultant's
duties for the Company and in a manner consistent with the Company's policies
regarding Confidential Information. At the end of the Consulting Term,
Consultant agrees immediately to return to the Company all written Confidential
Information in Consultant's possession. For the purposes of this Section 2 and
Section 4, the term "Company" shall be deemed to include the Company and
Affiliates, as defined in as defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange Act").

     3.  Non-Competition; Non-Solicitation; Consideration.
         ------------------------------------------------ 

                                       4
<PAGE>
 
          (a) The Company hereby agrees to (i) pay Consultant in a lump sum
immediately following the Closing an amount equal to $600,000, (ii) provide
Consultant with, at Consultant's election, either, or in combination, (A) in
exchange for the cancellation and termination of the relevant options as of the
Closing, a cash payment equal to the value of the spread on all stock options
previously granted to Consultant by the Company, whether or not vested as of the
Effective Date, based upon the price paid for shares of the Company by the
Parent Company in the transaction described above (which payment for options not
vested prior to the prior to the Effective Date shall be made in accordance with
the terms set forth in the Agreement and Plan of Merger), or (B) that number of
options to purchase phantom shares of the Parent Company that preserves the
inherent value of those stock options, based on the conversion calculation
attached hereto as Appendix A, previously granted to Consultant by the Company,
whether or not vested as of the Effective Date, that Consultant elects to
convert to fully-vested options for phantom shares of the Parent Company based
upon the price paid for shares of the Company by the Parent Company in the
transaction described above and (iii) cause all stock options previously issued
to him by the Company, the purchase price for which is $30 per share or higher,
to be vested immediately and converted by the Parent Company into options to
purchase phantom ordinary shares of the Parent Company under its Phantom Share
Option Scheme, which options shall be exercisable until the last day of the 12th
month after the end of the Consulting Term.  In exchange for the consideration
provided in preceding sentence, during the Consulting Term and for a period of
one year thereafter, Consultant will not anywhere in the world, except with the
prior written consent of the Board, directly or indirectly, own, manage,
operate, join, control, finance or participate in the ownership, management,
operation, control or financing of, or be connected as an officer, director,
employee, partner, principal, agent, 

                                       5
<PAGE>
 
representative, consultant or otherwise with, or use or permit Consultant's name
to be used in connection with, any business or enterprise that is directly
competitive with any business or enterprise in which the Company is engaged at
the Effective Date.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Consultant of less than five percent (5%) of any class of
securities of any corporation which is engaged in any of the foregoing
businesses, provided that such ownership represents a passive investment and
that neither Consultant nor any group of persons including Consultant in any
way, either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes any
part in its business, other than exercising Consultant's rights as a
shareholder, or seeks to do any of the foregoing.

          (c) Consultant further covenants and agrees that during the Consulting
Term and for the period of one year thereafter, Consultant will not, directly or
indirectly, (i) solicit, divert, take away, or attempt to solicit, divert or
take away, any of the Company's "Principal Customers," defined for the purposes
hereof to include any customer of the Company, from which $100,000 or more of
annual gross revenues are derived at such time, or (ii) encourage any Principal
Customer to reduce its patronage of the Company.

          (d) Consultant further covenants and agrees that during the Consulting
Term and for the period of one year thereafter, Consultant will not, except with
the prior written consent of the Board, directly or indirectly, solicit or hire,
or encourage the solicitation or hiring of, any person who was an employee of
the Company at the Effective Date or during the Consulting Term by any employer
other than the Company for any position as an employee, independent contractor,
consultant or otherwise.  The foregoing covenant of Consultant shall not 



                                       6
<PAGE>
 
apply to any individual after 12 months have elapsed subsequent to the date on
which such individual's employment or engagement by the Company has terminated.

     4.   Equitable Relief.
          ---------------- 

          (a) Consultant acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Consultant breach any of the provisions of those Sections.  Consultant
represents and acknowledges that (i) Consultant has been advised by the Company
to consult Consultant's own legal counsel in respect of this Agreement, (ii)
Consultant has had full opportunity, prior to execution of this Agreement, to
review thoroughly this Agreement with Consultant's counsel, and (iii) the
provisions of Sections 2 and 3 are reasonable and these restrictions do not
prevent Consultant from earning a reasonable livelihood.

          (b) Consultant further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Consultant agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an equitable accounting of all
earnings, profits and other benefits arising from any violation of Sections 2 or
3 hereof, which rights shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled.  In the event that any of the
provisions of Sections 2 or 3 hereof should ever be adjudicated to exceed the
time, geographic, service, or other limitations permitted by applicable law in
any jurisdiction, it is the intention of the parties that the provision shall be
amended to the extent of the maximum time, geographic, service, or 



                                       7
<PAGE>
 
other limitations permitted by applicable law, that such amendment shall apply
only within the jurisdiction of the court that made such adjudication and that
the provision otherwise be enforced to the maximum extent permitted by law.

          (c) Consultant irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Consultant may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Consultant also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 6 hereof.

     5.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Consultant's engagement to
the extent necessary to the intended preservation of such rights and
obligations.

     6.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

          FORE Systems, Inc.


                                       8
<PAGE>
 
          1000 FORE Drive
          Warrendale, PA 15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Consultant, to:

          Eric C. Cooper
          at address on file with the Company

or to such other names or addresses as the Company or Consultant, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section.

     7.   Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Consultant.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Consultant under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Consultant.  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in 


                                       9
<PAGE>
 
form and substance satisfactory to Consultant, expressly to assume and agree to
perform this Agreement in the same manner and to the extent the Company would be
required to perform if no such succession had taken place.

     8.  Severability.  If any provision of this Agreement or application
         ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     9  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
        ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     10.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

                                       10
<PAGE>
 
     11.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

                                       11
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

                                       FORE SYSTEMS, INC.

/s/ Eric C. Cooper                         /s/ Thomas J. Gill
___________________________            By:_______________________
                                           President and 
                                             Chief Executive Officer

                                       12
<PAGE>
 
                                   APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.

<PAGE>

                                                                       EXHIBIT 6

 
                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Thomas J. Gill, a resident of Wexford, Pennsylvania ("Executive").

     WHEREAS, Executive is currently employed as the President and Chief
Executive Officer of the Company and is a participant in the Company's Change in
Control Separation Plan, as amended and restated effective September 4, 1998,
(the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the Closing (the "Effective Date"), in
partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.    Employment.  On the Effective Date, the Company hereby agrees to
           ----------                                                      
continue to employ Executive, and Executive hereby accepts such continued
employment and agrees to perform Executive's duties and responsibilities, in
accordance with the terms, conditions and provisions hereinafter set forth.  In
consideration for the terms set forth in this Agreement, Executive hereby waives
any further participation in the Plan which shall no longer apply to him on or
after the Effective Date and Executive acknowledges that there is no obligation
to him under the Plan; provided, however, that the provisions of Section 4.4 of
the Plan shall continue to apply to Executive should any of the actions,
payments or benefits under this Agreement require the additional payments called
for by that Section in connection with the Change in Control that will occur as
a result of the transaction referred to above, and, provided, further, that any
interest and penalties imposed upon Executive related to such event under that
Section shall be covered by the Company as well on a net after-tax basis to
Executive assuming he is in the highest marginal tax bracket for Federal, state
and local income and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5 or Section 6 hereof.  The
period commencing as of the Effective Date and ending on the date on which the
term of Executive's employment under the Agreement shall terminate is
hereinafter referred to as the "Employment Term".

     1.2.  Duties and Responsibilities.  During the Employment Term, Executive
           ---------------------------                                        
shall serve as President and Chief Executive Officer of the Company and as a
member of the Company's Board of Directors (the "Board").  Executive shall also
serve in such other senior positions, if 

                                       2
<PAGE>
 
any, to which he may be elected during the Employment Term. During the
Employment Term, Executive shall perform all duties and accept all
responsibilities incident to such positions as may be assigned to him by the
Board.

     1.3.  Extent of Service.  During the Employment Term, Executive agrees to
           -----------------                                                  
use Executive's best efforts to carry out Executive's duties and
responsibilities under Section 1.2 hereof and, consistent with the other
provisions of this Agreement, to devote substantially all Executive's business
time, attention and energy thereto.  Except as provided in Section 3 hereof, the
foregoing shall not be construed as preventing Executive from (i) continuing to
fulfill his present duties on the other boards of directors on which he serves
as of the Effective Date, (ii) performing charitable and civic duties at the
level of commitment in effect on the Effective Date or (iii) making minority
investments in other businesses or enterprises.  Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $500,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly). Executive's Base Salary shall be reviewed
annually for appropriate adjustment (but shall not be reduced below that in
effect on the Effective Date, or as subsequently increased, without Executive's
written consent) by the Board pursuant to its normal performance review policies
for senior level executives.

                                       3
<PAGE>
 
          1.5.  Retirement and Benefit Coverages.  During the Employment Term,
                 --------------------------------                              
Executive shall be entitled to participate in all (a) employee pension and
retirement plans and programs ("Retirement Plans") and (b) welfare benefit plans
and programs ("Benefit Coverages"), in each case made available to the Company's
senior level executives as a group, as such Retirement Plans or Benefit
Coverages may be in effect from time to time.

          1.6.  Reimbursement of Expenses; Vacation.  Executive shall be
                -----------------------------------                     
provided with reimbursement of expenses related to Executive's employment by the
Company on a basis no less favorable than that which may be authorized from time
to time for senior level executives as a group, and shall be entitled annually
to 24 days of vacation (30 days beginning in February, 2000, in accordance with
the Company's current plan) and holidays in accordance with the Company's normal
personnel policies for senior level executives.

          1.7.  Short-Term Incentive Compensation.  Executive shall be entitled
                ---------------------------------                              
to participate in any short-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain annual individual or business performance objectives
specified and approved by the Board (or a Committee thereof) or the Chief
Executive of the Parent Company in its or his sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary.  Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

        1.8.    Long-Term Incentive Compensation. Executive shall also be
                --------------------------------
entitled to participate in any long-term incentive compensation programs
established by the Company for its senior level executives generally, depending
upon achievement of certain business performance

                                       4
<PAGE>
 
objectives specified and approved by the Parent Company's board of directors
(the "Parent Company Board") (or a Committee thereof) in its sole discretion. On
the Effective Date, such programs include the TBR Based LTIP, under which
Executive's "target opportunity" shall begin at 50% of Base Salary, and
participation in the Parent Company's Phantom Share Option Scheme under which
Executive shall participate at the senior executive level. Executive's long-term
incentive compensation, either in shares of the Parent Company, options or cash,
as applicable from time to time, shall be paid to Executive not later than such
payments are made to the Company's senior level executives generally.

     1.9.  Initial Stock and Stock Option Grant. Immediately following the
           ------------------------------------                           
Closing, Executive shall be granted, conditioned upon his fulfilling the
conditions of the last sentence of Section 1.10, (i) $1.0 million of restricted
phantom stock of the Parent Company (the "Restricted Stock") and (ii) a non-
qualified phantom share option (for a term expiring ten years thereafter) to
purchase phantom ordinary shares of the Parent Company, the number of which
shall equal $1.0 million divided by the then current fair market value of a
share of the Parent Company (the "Option").  Executive's right to the Restricted
Stock shall vest on the second anniversary of the Effective Date and Executive's
right to exercise the Option shall vest on the third anniversary of the
Effective Date, if, in each case, Executive is then employed by the Company
(except that in the case of death, disability, as defined in Section 5.1, a
Termination upon Change of Control, as defined in Section 6.1(f), or removal
without cause or Good Reason termination, as provided in Section 5.4(b),
Executive shall be fully vested in the Restricted Stock and the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

                                       5
<PAGE>
 
     1.10.  Conversion of Options and Share Purchase.  All stock options
            ----------------------------------------                    
previously issued to Executive by the Company, the purchase price for which is
$30 per share or higher, shall be vested immediately and converted by the Parent
Company into options to purchase phantom ordinary shares of the Parent Company
under its Phantom Share Option Scheme.  Such conversion shall be effected in the
manner set forth in Section 3(a)(ii) below.  In addition, within 90 days after
the Effective Date, Executive agrees to have purchased at least $1.0 million of
ordinary shares of the Parent Company.

      2.    Confidential Information. Executive recognizes and acknowledges that
            ------------------------
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing information,
marketing and sales techniques, strategies and programs, computer programs and
software and financial information (collectively referred to as "Confidential
Information"). Executive acknowledges that such Confidential Information is a
valuable and unique asset of the Company and Executive covenants that Executive
will not, unless expressly authorized in writing by the Board, at any time
during the course of Executive's employment use any Confidential Information or
divulge or disclose any Confidential Information to any person, firm or
corporation except in connection with the performance of Executive's duties for
the Company and in a manner consistent with the Company's policies regarding
Confidential Information. Executive also covenants that at any time after the
termination of such employment, directly or indirectly, Executive will not use
any Confidential Information or divulge or disclose any Confidential Information
to any person, firm or corporation, unless such information is in the

                                       6
<PAGE>
 
public domain through no fault of Executive or except when required to do so by
a court of law, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with apparent jurisdiction to order Executive to divulge,
disclose or make accessible such information, in which case Executive will
inform the Company in writing promptly of such required disclosure, but in any
event at least 15 business days prior to disclosure or the amount of time
Executive has to respond to the required request minus one day if shorter. All
written Confidential Information (including, without limitation, in any computer
or other electronic format) which comes into Executive's possession during the
course of Executive's employment shall remain the property of the Company.
Unless expressly authorized in writing by the Board, Executive shall not remove
any written Confidential Information from the Company's premises, except in
connection with the performance of Executive's duties for the Company and in a
manner consistent with the Company's policies regarding Confidential
Information. Upon termination of Executive's employment, Executive agrees
immediately to return to the Company all written Confidential Information in
Executive's possession. For the purposes of this Section 2, the term "Company"
shall be deemed to include the Company and Affiliates, as defined in Section
6.1(a), of the Company.

     3.   Non-Competition; Non-Solicitation; Consideration.
          ------------------------------------------------ 

          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, except as provided in Section 1.10 above, either, or in combination,
(i) in exchange for the cancellation and termination 

                                       7
<PAGE>
 
of the relevant options as of the Closing, a cash payment equal to the value of
the spread on all stock options previously granted to Executive by the Company,
whether or not vested as of the Effective Date, based upon the price paid for
shares of the Company by the Parent Company in the transaction described above
(which payment for options not vested prior to the Effective Date shall be made
in accordance with the terms set forth in the Agreement and Plan of Merger), or
(ii) that number of options to purchase phantom shares of the Parent Company
that preserves the inherent value of those stock options, based on the
conversion calculation attached hereto as Appendix A, previously granted to
Executive by the Company, whether or not vested as of the Effective Date, that
Executive elects to convert to fully-vested options to purchase phantom shares
of the Parent Company. In exchange for the consideration provided in the
preceding sentence, during Executive's employment by the Company and for a
period of two years after Executive's termination of employment for any reason,
Executive will not anywhere in the world, except with the prior written consent
of the Company's Board of Directors, directly or indirectly, own, manage,
operate, join, control, finance or participate in the ownership, management,
operation, control or financing of, or be connected as an officer, director,
employee, partner, principal, agent, representative, consultant or otherwise
with, or use or permit Executive's name to be used in connection with, any
business or enterprise that is competitive with any business or enterprise in
which the Company is engaged in the fiscal year of the Company in which
Executive's termination of employment occurs or with any business or enterprise
in which the Company has a written plan to be engaged.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive 

                                       8
<PAGE>
 
investment and that neither Executive nor any group of persons including
Executive in any way, either directly or indirectly, manages or exercises
control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part in its business, other than exercising Executive's
rights as a shareholder, or seeks to do any of the foregoing.

          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of two years thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of two years thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.   Equitable Relief.
          ---------------- 

          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered 

                                       9
<PAGE>
 
by the Company should Executive breach any of the provisions of those Sections.
Executive represents and acknowledges that (i) Executive has been advised by the
Company to consult Executive's own legal counsel in respect of this Agreement,
(ii) Executive has had full opportunity, prior to execution of this Agreement,
to review thoroughly this Agreement with Executive's counsel and participated in
the negotiation thereof, and (iii) the provisions of Sections 2 and 3 are
reasonable and these restrictions do not prevent Executive from earning a
reasonable livelihood.

          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an equitable accounting of all
earnings, profits and other benefits arising from any violation of Sections 2 or
3 hereof, which rights shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled.  In the event that any of the
provisions of Sections 2 or 3 hereof should ever be adjudicated to exceed the
time, geographic, service, or other limitations permitted by applicable law in
any jurisdiction, it is the intention of the parties that the provision shall be
amended to the extent of the maximum time, geographic, service, or other
limitations permitted by applicable law, that such amendment shall apply only
within the jurisdiction of the court that made such adjudication and that the
provision otherwise be enforced to the maximum extent permitted by law.

          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other 

                                      10
<PAGE>
 
equitable relief, may be brought in the United States District Court for the
Western District of Pennsylvania, or if such court does not have jurisdiction or
will not accept jurisdiction, in any court of general jurisdiction in
Pittsburgh, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding, and (iii) waives any
objection which Executive may have to the laying of venue of any such suit,
action or proceeding in any such court. Executive also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 10
hereof.

           (d) For the purposes of this Section 4, the term "Company" shall be
deemed to include the Company and Affiliates, as defined in Section 6.1(a), of
the Company.

     5.    Termination.  The Employment Term shall terminate upon the occurrence
           -----------                                                          
of any one of the following events:

     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in 

                                      11
<PAGE>
 
the event of a dispute under this Section 5.1, to submit to a physical
examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued, but
Executive shall remain entitled to any other benefits in accordance with the
terms of any applicable plans and programs of the Company.  For purposes of this
Agreement, Executive's employment may be terminated for "cause" if (i) Executive
is convicted of or pleads guilty or nolo contendere to a felony or misdemeanor
                                    ---- ----------                           
involving moral turpitude, (ii) in the reasonable determination of the Board,
Executive has (x) committed an act of fraud, embezzlement, or theft in
connection with Executive's duties in the course of Executive's employment with
the Company, (y) caused intentional, wrongful damage to the property of the
Company or intentionally and wrongfully disclosed Confidential Information, or
(z) engaged in gross misconduct or gross negligence in the course of Executive's
employment with the Company or (iii) Executive materially and 

                                      12
<PAGE>
 
intentionally breached Executive's obligations under this Agreement and shall
not have remedied such breach within 30 days after receiving written notice from
the Board specifying the details thereof. For purposes of this Agreement, an act
or omission on the part of Executive shall be deemed "intentional" only if it
was done by Executive not in good faith and without reasonable belief that the
act or omission was in the best interest of the Company.

     5.4.  Removal Without Cause and Good Reason Termination.
           ------------------------------------------------- 

           (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder upon prior written notice
to Executive and Executive shall have the right to terminate his employment for
Good Reason, as defined below, upon 90 days' prior written notice to the Company
(in either case the Employment Term shall be deemed to have ended); provided,
however, that, in the event that either such notice is given, Executive shall be
under no obligation, following the end of the notice period, if any, to render
any additional services to the Company and, subject to the provisions of Section
3 hereof, shall be allowed to seek other employment.  Upon any such removal or
Good Reason termination, Executive shall be entitled to receive, as liquidated
damages for the failure of the Company to continue to employ Executive, only the
amount due to Executive under the Company's then current severance pay plan for
employees.  No other payments or benefits shall be due under this Agreement to
Executive, but Executive shall be entitled to any amounts earned, accrued or
owing but not yet paid under Section 1 above, and other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

                                      13
<PAGE>
 
          (b)  Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes, and does not revoke, a
written release upon such removal or Good Reason termination, substantially in
the form attached hereto as Annex 1, (the "Release"), of any and all claims
against the Company and all related parties with respect to all matters arising
out of Executive's employment by the Company (other than any entitlements under
the terms of this Agreement or under any other plans or programs of the Company
in which Executive participated and under which Executive has accrued a
benefit), or the termination thereof, Executive shall be entitled to receive, in
lieu of the payment described in Section 5.4(a), which Executive agrees to
waive, a written release from the Company, substantially in the form attached as
Annex 2, (the "Company Release") and
 
          (i)  as liquidated damages for the failure of the Company to continue
to employ Executive, a single cash payment, within 30 days after the effective
date of the removal or Good Reason termination, equal to Executive's Base
Compensation, as defined in Section 6.1(b) below; provided, however, that the
payment shall equal two multiplied by Executive's Base Compensation in the event
that removal or Good Reason termination occurs prior to the second anniversary
of the Effective Date;

          (ii) for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such 

                                      14
<PAGE>
 
Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;

               (iii) any other amounts earned, accrued or owing but not yet
paid under Section 1 above;

               (iv)  any other benefits in accordance with the terms of any
applicable plans and programs of the Company;

               (v)   as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation, as defined in Section
6.1(b) below; and

               (vi)  The Option and the Restricted Stock, to the extent not
already vested prior to the removal or Good Reason termination, shall be fully
vested and the Option shall be immediately exercisable within 12 months after
the removal or Good Reason termination.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 90 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

       6.  Payments Upon a Change in Control.
           --------------------------------- 

                                      15
<PAGE>
 
     6.1.  Definitions.  For all purposes of Section 5 and this Section 6, the
           -----------                                                        
following terms shall have the meanings specified in this Section 6.1 unless the
context otherwise clearly requires:

           (a) "Affiliate" shall mean an "affiliate" as defined in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

           (b) "Base Compensation" shall mean Executive's annualized Base Salary
as would be reported for federal income tax purposes on Form W-2 for the
respective calendar years within which the fiscal year of the Company falls,
together with any and all salary reduction authorized amounts under any of the
Company's benefit plans or programs for such fiscal year, and all short-term
incentive compensation at the target level to be paid to Executive in all
employee capacities with the Company attributable to such fiscal year even if to
be paid in the following fiscal year.  "Base Compensation" shall be the higher
of (i) Base Compensation for the fiscal year in which occurs the Change of
Control or, if no Change of Control occurs, the fiscal year in which occurs the
removal or Good Reason termination; or (ii) Base Compensation for the full
fiscal year immediately prior thereto.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

           (c) "Change of Control" shall mean the happening of any of the
following:

           (i) When any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act, other than the Company or the Parent Company, their
Affiliates, or any Company or Parent Company employee benefit plan (including
any trustee of such plan acting as trustee), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Parent Company representing more than 30% of
the combined voting power of either (i) the then outstanding ordinary shares of
the Parent 

                                      16
<PAGE>
 
Company (the "Outstanding Common Stock") or (ii) the then outstanding voting
securities of the Parent Company entitled to vote generally in the election of
directors (the "Voting Securities"); or

          (ii)  Individuals who, as of the beginning of any twenty-four month
period, constitute the Parent Company Board (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Parent Company Board or the
Incumbent Board ceases to be able to exercise the powers of the majority of the
Parent Company Board, provided that any individual becoming a director
subsequent to the beginning of such period whose election or nomination for
election by the Parent Company's shareholders was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Parent Company Board (as such terms are used in Rule 14a-
11 of Regulation 14A promulgated under the Exchange Act); or

          (iii) Consummation by the Parent Company of a reorganization, merger
or consolidation (a "Business Combination"), in each case, with respect to which
all or substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Common Stock and Voting Securities
immediately prior to such Business Combination do not, following such Business
Combination, beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding ordinary shares and the combined voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation, business trust or
other entity resulting from or being the surviving entity in such Business
Combination in substantially the 

                                      17
<PAGE>
 
same proportion as their ownership immediately prior to such Business
Combination of the Outstanding Common Stock and Voting Securities, as the case
may be; or

          (iv) Consummation of a complete liquidation or dissolution of the
Parent Company or sale or other disposition of all or substantially all of the
assets of the Parent Company other than to a corporation, business trust or
other entity with respect to which, following such sale or disposition, more
than 50% of, respectively, the then outstanding ordinary shares and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, is then owned
beneficially, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Stock and Voting Securities immediately prior to such sale or
disposition in substantially the same proportion as their ownership of the
Outstanding Common Stock and Voting Securities, as the case may be, immediately
prior to such sale or disposition.

Notwithstanding anything herein to the contrary, at such time as the Parent
Company or its Affiliates, alone or in combination, do not own more than 50% of
the outstanding voting securities of the Company, or its successors, the
foregoing provisions of this subsection (c) shall apply to the Company by
substituting the word "Company" for the words "Parent Company" each place they
appear above; provided, however, that a transaction in which there is an initial
public offering of some or all of the shares of the Company, or its successors,
under the Securities Act of 1933 shall not in and of itself be treated as a
Change of Control for the purposes hereof; and provided, further that any
transaction by which the Parent Company disposes of more than 50% of the shares
of the Company, or its successors, or sells or transfers all or substantially

                                      18
<PAGE>
 
all of the assets of the Company, or its successors, to a person, or persons or
entities acting in concert, and not related to the Parent Company through a more
than 50% ownership arrangement, shall constitute a "Change of Control" for the
purposes hereof.  Notwithstanding the foregoing, "Change of Control" shall not
include any change in the share ownership, directors or management of Parent
Company that occurs in connection with a proposed reconstruction involving the
separation from Parent Company of its aerospace and defense activities, the
merger of such activities with British Aerospace and the formation of a new
holding company that will own, directly and indirectly, the non-aerospace and
non-defense activities of Parent Company, including the Company.

          (d) "Termination Date" shall mean the date of receipt of a Notice of
Termination of this Agreement or any later date specified therein.

          (e) "Termination of Employment" shall mean the termination of
Executive's actual employment relationship with the Company.

          (f) "Termination upon a Change of Control" shall mean a Termination of
Employment upon or within two years after a Change of Control either:

                (i) initiated by the Company for any reason other than
Executive's (w) disability, as defined in Section 5.1 hereof, (x) death, (y)
retirement on or after attaining age 65, or (z) "cause," as defined in Section
5.3 hereof, or (ii) initiated by Executive for "Good Reason" which shall be
defined to include (A) any material failure of the Company to comply with and
satisfy any of the material terms of this Agreement, including any reduction by
the Company of the authority, duties or responsibilities of Executive, any
reduction of Executive's compensation or benefits already accrued hereunder, or
the assignment to Executive of duties which are inconsistent with the duties of
Executive's position as defined in Section 1.2  

                                      19
<PAGE>
 
above, or (B) the transfer of Executive, without Executive's written consent, to
a location that is more than 50 miles from Executive's principal place of
business immediately preceding the transfer.

     6.2.  Notice of Termination.  Any Termination upon a Change of Control
           ---------------------                                           
shall be communicated by a Notice of Termination to the other party hereto given
in accordance with Section 10 hereof.  For purposes of this Agreement, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) briefly summarizes the
facts and circumstances deemed to provide a basis for a Termination of
Employment and the applicable provision hereof, and (iii) if the Termination
Date is other than the date of receipt of such notice, specifies the Termination
Date (which date shall not be more than 15 days after the giving of such
notice).

     6.3.  Payments upon Termination.  Subject to the provisions of Section 6.6
           -------------------------                                           
hereof, in the event of Executive's Termination upon a Change of Control, the
Company agrees (a) in the event Executive executes the Release required by
Section 5.4(b), to give Executive the Company Release and to pay to Executive,
in a single cash payment, within thirty days after the Termination Date, two
multiplied by Executive's Base Compensation, and, in addition, all amounts,
benefits and Benefit Coverages described in Section 5.4(b)(ii), (iii), (iv) and
(v), provided that in (ii) Benefit Coverages shall continue for at least three
years instead of two, or (b) in the event Executive fails or refuses to execute
the Release required by Section 5.4(b), to pay to Executive, in a single cash
payment, within thirty days after the Termination Date, the amount due under
Section 5.4(a) above and, in addition, all other amounts and benefits described
in Section 5.4(a).

                                      20
<PAGE>
 
     6.4.  Other Payments, Stock Option and Stock Grants, etc.  Subject to the
           --------------------------------------------------                 
provisions of Section 6.6 hereof, in the event of Executive's Termination upon a
Change of Control, and the execution of the Release, on Executive's Termination
Date, the Option, the Restricted Stock and any subsequent stock option, phantom
share options and restricted share grants previously granted to Executive, to
the extent not already vested prior to the Termination Date, shall be fully
vested and immediately exercisable within 12 months after the removal or Good
Reason termination, and if the Change of Control results in the Voting
Securities of the Parent Company (or the Company following an initial public
offering) ceasing to be traded on a securities exchange or through the national
market system of the National Association of Securities Dealers Inc., the fair
market value at which the Option shall be exercised shall be the average of the
closing prices for the five trading days preceding the day such Voting
Securities cease trading.

     6.5.  Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent
           -------------------------                                          
or limit Executive's continuing or future participation in or rights under any
benefit, bonus, incentive or other plan or program provided by the Company and
for which Executive may qualify; provided, however, that if Executive becomes
entitled to and receives all of the payments provided for in this Agreement,
Executive hereby waives Executive's right to receive payments under any
severance plan or similar program applicable to all employees of the Company.

     6.6.  Certain Increase in Payments.
           ---------------------------- 
    
           (a) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined that any payment or distribution by the
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Payment"), would constitute an "excess parachute payment" within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the
                                      21
<PAGE>
 
"Code"), whether or not related to an event occurring before or after the
Effective Date (provided, that this provision shall only be applicable to the
first Change of Control which occurs after the Closing), Executive shall be paid
an additional amount (the "Gross-Up Payment") such that the net amount retained
by Executive after deduction of any excise tax imposed under Section 4999 of the
Code, and any federal, state and local income and employment tax and excise tax
imposed upon the Gross-Up Payment, and any interest and penalties imposed upon
Executive, shall be equal to the Payment.  For purposes of determining the
amount of the Gross-Up Payment, Executive shall be deemed to pay federal income
tax and employment taxes at the highest marginal rate of federal income and
employment taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rate of taxation
in the state and locality of Executive's residence on the Termination Date, net
of the maximum reduction in federal income taxes that may be obtained from the
deduction of such state and local taxes.

          (b) All determinations to be made under this Section 6 shall be made
by the Company's independent public accountant immediately prior to the Change
of Control (the "Accounting Firm"), which firm shall provide its determinations
and any supporting calculations both to the Company and Executive within 10 days
of the Termination Date.  Any such determination by the Accounting Firm shall be
binding upon the Company and Executive.  Within five days after the Accounting
Firm's determination, the Company shall pay (or cause to be paid) or distribute
(or cause to be distributed) to or for the benefit of Executive such amounts as
are then due to Executive under this Section 6.6.

          (c) In the event that upon any audit by the Internal Revenue Service,
or by a state or local taxing authority, of the Payment or Gross-Up Payment, a
change is finally 

                                      22
<PAGE>
 
determined to be required in the amount of taxes paid by Executive, appropriate
adjustments shall be made under this Agreement such that the net amount which is
payable to Executive after taking into account the provisions of Section 4999 of
the Code shall reflect the intent of the parties as expressed in subsection (a)
above, in the manner determined by the Accounting Firm.

         (d) All of the fees and expenses of the Accounting Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company.  The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses resulting
from or relating to its determinations pursuant to subsections (b) and (c)
above, except for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Accounting Firm.

     7.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

     8.  Mitigation.  Executive shall not be required to mitigate the amount of
         ----------                                                            
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise and there shall be no offset against amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.

     9.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the 

                                      23
<PAGE>
 
Executive, and the third of whom shall be selected by the other two arbitrators.
Any award entered by the arbitrators shall be final, binding and nonappealable
and judgment may be entered thereon by either party in accordance with
applicable law in any court of competent jurisdiction. This arbitration
provision shall be specifically enforceable. The arbitrators shall have no
authority to modify any provision of this Agreement or to award a remedy for a
dispute involving this Agreement other than a benefit specifically provided
under or by virtue of the Agreement. If Executive prevails on any material issue
which is the subject of such arbitration or lawsuit, the Company shall be
responsible for all of the fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses). Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     10.  Notices.  All notices and other communications required or permitted
          -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

                                      24
<PAGE>
 
     If to Executive, to:

          Thomas J. Gill
          405 Alpen Court
          Wexford, PA  15090

or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     11.  Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

     12.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such 

                                      25
<PAGE>
 
invalidity or unenforceability shall not affect any other provision or
application of this Agreement which can be given effect without the invalid or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction. If any
provision is held void, invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.

     13.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     14.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the Company written notice
thereof.  In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or other
legal representative.

     15.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

                                      26
<PAGE>
 
     16.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     17.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     18.  Establishment of Trust.  The Company may, but is not required to,
          ----------------------                                           
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                      27
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

                                       FORE SYSTEMS, INC.

/s/ Thomas J. Gill                         /s/ Bruce E. Haney
___________________________            By:_______________________
THOMAS J. GILL                         Name: Bruce E. Haney
                                       Title: Senior Vice President and
                                                Chief Financial Officer

                                      28
<PAGE>
 
                                    ANNEX  1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I, Thomas J. Gill, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
Superior Group, Inc., except as may be necessary to enforce the obligations of
the Company to me in accordance with the express terms 
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have participated in the negotiation of the terms of
this General Release, that I have been advised by the Company to discuss it with
my attorney, and that I understand its terms and effects.  I acknowledge,
further, that I am executing this General Release of my own volition with a full
understanding of its terms and effects and with the intention of releasing all
claims recited herein in exchange for the consideration described in the
Employment Agreement, which I acknowledge is adequate and satisfactory to me.
None of the above-named parties, nor their agents, representatives, or attorneys
have made any representations to me concerning the terms or effects of this
General Release other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive, Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.

_________________                    _________________
Witness                              Thomas J. Gill
                                     
<PAGE>
 
                                    ANNEX 2

                                GENERAL RELEASE
                                ---------------
                                        
1.  FORE Systems, Inc. and each of its subsidiaries and affiliates, their
officers, directors, shareholders, partners, employees and agents, their
respective successors and assigns, heirs, executors and administrators
(hereinafter collectively included within the term "FORE"), for and in
consideration of the release of Thomas F. Gill ("Executive"), of even date
herewith, and other good and valuable consideration, does hereby REMISE,
RELEASE, AND FOREVER DISCHARGE Executive, his assigns, heirs, executors and
administrators (hereinafter collectively included within the term "Executive"),
acting in any capacity whatsoever, of and from any and all manner of actions and
causes of actions, suits, debts, claims and demands whatsoever in law or in
equity, which it ever had, now have, or hereafter may have, by reason of any
matter, cause or thing whatsoever from the beginning of Executive's employment
with FORE to the date of these presents arising from or relating in any way to
Executive's employment relationship, his retirement and the termination of his
employment relationship with FORE, including but not limited to, any claims
which have been asserted, could have been asserted, or could be asserted now or
in the future under any federal, state or local laws, any contracts between FORE
and Executive and any common law claims now or hereafter recognized and all
claims for counsel fees and costs, but in no event shall this release apply to
an any action attributable to a criminal act, an act outside the scope of
Executive's employment by FORE or willful misconduct involving self-dealing for
the Executive's financial benefit or that of any person related to him.  In
addition, nothing herein shall be construed as a release of FORE's rights under
Sections 2, 3 or 4 of the Agreement.

2.  FORE further agrees and covenants that neither FORE, nor any person,
organization or other entity on its behalf, will file, charge, claim, sue or
cause or permit to be filed, charged, or claimed, any action for personal
equitable, monetary or other similar relief against Executive (including any
action for damages, injunctive, declaratory or other relief), except as may be
necessary to enforce the obligations of Executive to FORE in accordance with the
express terms of the Agreement, involving any matter occurring at any time in
the past up to the date of this General Release, or involving any continuing
effects of any actions or practices which may have arisen or occurred prior to
the date of this General Release, unless involving a criminal act, an act
outside the scope of Executive's employment by FORE or willful misconduct
involving self-dealing for the Executive's financial benefit or that of any
person related to him.  In addition, FORE also agrees and covenants that should
FORE, or any other person or entity on its behalf, file, charge, claim, sue or
cause or permit to be filed, charged, or claimed, any action prohibited by the
preceding sentence for personal equitable, monetary or other similar relief,
despite its agreement not to do so hereunder, then FORE will pay all of the
costs and expenses of Executive (including reasonable attorneys' fees) incurred
in the defense of any such action or undertaking.

3.  FORE hereby certifies that it has been advised by counsel in the preparation
and review of this General Release.
<PAGE>
 
Intending to be legally bound hereby, FORE executed the foregoing General
Release this ______ day of _______________, ______.


__________________                      __________________
Witness
<PAGE>
 
                                  APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.

<PAGE>
 
                                                                       EXHIBIT 7


                                   AGREEMENT
                                   ---------


     THIS AGREEMENT (the "Agreement") entered into on April 26, 1999, by and
between FORE Systems, Inc., a Delaware corporation (the "Company"), and Robert
D. Sansom, a resident of Fox Chapel, Pennsylvania ("Sansom").

     WHEREAS, Sansom is currently employed as a Senior Vice President and Chief
Technology Officer of the Company and is a participant in the Company's Change
in Control Separation Plan, as amended and restated effective September 4, 1998,
(the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, Sansom and the Company are considering his future role with the
Company and on or before December 31, 1999, Sansom intends to elect either to
retire from the employ of the Company and become a consultant or to remain
employed in an executive officer capacity with the Company and, in either case
to enter into a new agreement with the Company; and

     WHEREAS, after negotiation, the Company and Sansom wish to enter into a
current contract that will provide for Sansom's continued service to the Company
in some capacity with the Company, to take effect immediately prior to the time
of Closing (the "Effective Date"), in partial exchange for and full replacement
of any obligation the Company might have thereupon incurred under the Plan to
Sansom, except as provided in Section 1 below, which Sansom hereby waives; and
<PAGE>
 
     WHEREAS, both parties also desire to enter into this Agreement to obligate
themselves to execute a new agreement on or prior to December 31, 1999, and to
set forth certain obligations of Sansom not to misuse the Company's Confidential
Information, as defined below, and not to compete with the Company or solicit
its Principal Customers, as defined below, in exchange, in part, for the
conversion of certain stock options previously granted to Sansom into options to
purchase phantom ordinary shares of the Parent Company;

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  New Agreement.  On the Effective Date, Sansom shall continue in his
         -------------                                                      
current capacity with the Company and shall be entitled to receive the same
compensation and benefits in effect on the Effective Date.  On or prior to
December 31, 1999, the Company and Sansom shall have entered into a new
employment agreement substantially in the form of agreement entered into between
the Company and Bruce E. Haney of even date herewith or, failing that, Sansom
agrees to execute a consulting agreement with the Company substantially in the
form of agreement entered into between the Company and Eric C. Cooper of even
date herewith.  In consideration for the terms set forth in this Agreement,
Sansom hereby waives any further participation in the Plan which shall no longer
apply to him on or after the Effective Date; provided, however, that the
provisions of Section 4.4 of the Plan shall continue to apply to Sansom should
any of the actions, payments or benefits under this Agreement require the
additional payments called for by that Section in connection with the Change in
Control that will occur as a result of the transaction referred to above; and,
provided, further, that any interest and penalties imposed upon Sansom related
to such event under that Section shall be covered by the 

                                       2
<PAGE>
 
Company as well on a net after-tax basis to Sansom assuming he is in the highest
marginal tax bracket for Federal, state and local income and employment taxes.

     2.  Confidential Information.  Sansom recognizes and acknowledges that by
         ------------------------                                             
reason of Sansom's employment by and service to the Company prior to the
Effective Date and by reason of his services after the Effective Date, Sansom
has had and will have access to certain confidential and proprietary information
relating to the business of the Company, which may include, but is not limited
to, trade secrets, trade "know-how", customer information, supplier information,
cost and pricing information, marketing and sales techniques, strategies and
programs, computer programs and software and financial information (collectively
referred to as "Confidential Information").  Sansom acknowledges that such
Confidential Information is a valuable and unique asset of the Company and
Sansom covenants that Sansom will not, unless expressly authorized in writing by
the Board, at any time during the period of his service to the Company or
thereafter use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation except in connection
with the performance of Sansom's duties for the Company and in a manner
consistent with the Company's policies regarding Confidential Information,
unless such information is in the public domain through no fault of Sansom or
except when required to do so by a court of law, by any governmental agency
having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
jurisdiction to order Sansom to divulge, disclose or make accessible such
information, in which case Sansom will inform the Company in writing promptly of
such required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Consultant has to respond to the required
request minus one day if shorter.  All written Confidential Information
(including, without limitation, in 

                                       3
<PAGE>
 
any computer or other electronic format) which comes into Sansom's possession
during the period in which he is rendering services to the Company shall remain
the property of the Company. Unless expressly authorized in writing by the
Board, Sansom shall not remove any written Confidential Information from the
Company's premises, except in connection with the performance of Sansom's duties
for the Company and in a manner consistent with the Company's policies regarding
Confidential Information. At the end of his period of service to the Company,
Sansom agrees immediately to return to the Company all written Confidential
Information in Sansom's possession. For the purposes of this Section 2 and
Section 4, the term "Company" shall be deemed to include the Company and
Affiliates, as defined in as defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange Act").

     3.  Non-Competition; Non-Solicitation; Consideration.
         ------------------------------------------------ 

         (a) The Company hereby agrees to (i) grant Sansom, on the Effective
Date, a non-qualified phantom share option (for a term expiring ten years
thereafter) to purchase phantom ordinary shares of the Parent Company, the
number of which shall equal two times $230,000 divided by the then current fair
market value of a share of the Parent Company (the "Option").  Sansom's right to
exercise the Option shall vest in 25% increments on each of the first four
anniversaries of the Effective Date, if, in each case, Executive is then
employed by the Company (except that in the case of death, disability, as
defined in the company's long term disability plan on the Effective Date, or
termination without cause, Executive shall be fully vested in the Option;
provided, however, that entering into a consulting contract shall be treated as
an event of forfeiture for purposes of the Option).  The terms of the Option, to
the extent not inconsistent with the provisions outlined in this Section, shall
be made subject to the terms of the 

                                       4
<PAGE>
 
Parent Company's Phantom Share Option Scheme, (ii) provide Sansom with, at
Sansom's election, either, or in combination, (A) a cash payment equal to the
value of the spread on all stock options previously granted to Sansom by the
Company, whether or not vested as of the Effective Date, based upon the price
paid for shares of the Company by the Parent Company in the transaction
described above, or (B) that number of options to purchase phantom shares of the
Parent Company that preserves the inherent value of those stock options, based
on the conversion calculation attached hereto as Appendix A, previously granted
to Sansom by the Company, whether or not vested as of the Effective Date, that
Sansom elects to convert to fully-vested options for phantom shares of the
Parent Company based upon the price paid for shares of the Company by the Parent
Company in the transaction described above and (iii) cause all stock options
previously issued to him by the Company, the purchase price for which is $30 per
share or higher, to be vested immediately and converted by the Parent Company
into options to purchase phantom ordinary shares of the Parent Company under its
Phantom Share Option Scheme, which options shall be exercisable until the last
day of the 12th month after Sansom ceases to render services for the Company. In
exchange for the consideration provided in preceding sentence, during the 36
month period commencing on the Effective Date (the "Restriction Period"), within
the Company's "Service Area," as defined below, Sansom will not, except with the
prior written consent of the Board, directly or indirectly, own, manage,
operate, join, control, finance or participate in the ownership, management,
operation, control or financing of, or be connected as an officer, director,
employee, partner, principal, agent, representative, consultant or otherwise
with, or use or permit Sansom's name to be used in connection with, any business
or enterprise that is directly competitive with any business or enterprise in
which the Company is engaged at the Effective Date. For the purposes of this

                                       5
<PAGE>
 
Section, "Service Area" shall mean the geographic area within which the Company
is operating on the Effective Date.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Sansom of less than five percent (5%) of any class of securities of
any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Sansom nor
any group of persons including Sansom in any way, either directly or indirectly,
manages or exercises control of any such corporation, guarantees any of its
financial obligations, otherwise takes any part in its business, other than
exercising Sansom's rights as a shareholder, or seeks to do any of the
foregoing.
          (c) Sansom further covenants and agrees that during the Restriction
Period, Sansom will not, directly or indirectly, (i) solicit, divert, take away,
or attempt to solicit, divert or take away, any of the Company's "Principal
Customers," defined for the purposes hereof to include any customer of the
Company, from which $100,000 or more of annual gross revenues are derived at
such time, or (ii) encourage any Principal Customer to reduce its patronage of
the Company.
          (d) Sansom further covenants and agrees that during the Restriction
Period, Sansom will not, except with the prior written consent of the Board,
directly or indirectly, solicit or hire, or encourage the solicitation or hiring
of, any person who was an employee of the Company at the Effective Date or
during the Restriction Period by any employer other than the Company for any
position as an employee, independent contractor, consultant or otherwise.  The
foregoing covenant of Sansom shall not apply to any individual after 12 months
have elapsed subsequent to the date on which such individual's employment or
engagement by the Company has terminated.

                                       6
<PAGE>
 
     4.   Equitable Relief.
          ---------------- 

          (a) Sansom acknowledges and agrees that the restrictions contained in
Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Sansom breach any of the provisions of those Sections.  Sansom represents and
acknowledges that (i) Sansom has been advised by the Company to consult Sansom's
own legal counsel in respect of this Agreement, and (ii) that Sansom has had
full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Sansom's counsel.

          (b) Sansom further acknowledges and agrees that a breach of any of the
restrictions in Sections 2 and 3 cannot be adequately compensated by monetary
damages.  Sansom agrees that the Company shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages, as
well as provable damages and an equitable accounting of all earnings, profits
and other benefits arising from any violation of Sections 2 or 3 hereof, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled.  In the event that any of the provisions of
Sections 2 or 3 hereof should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, it is the intention of the parties that the provision shall be
amended to the extent of the maximum time, geographic, service, or other
limitations permitted by applicable law, that such amendment shall apply only
within the jurisdiction of the court that made such adjudication and that the
provision otherwise be enforced to the maximum extent permitted by law.


                                       7
<PAGE>
 
          (c) Sansom irrevocably and unconditionally (i) agrees that any suit,
action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Sansom may have
to the laying of venue of any such suit, action or proceeding in any such court.
Sansom also irrevocably and unconditionally consents to the service of any
process, pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 6 hereof.

     5.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Sansom's engagement to the
extent necessary to the intended preservation of such rights and obligations.

     6.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

                                       8
<PAGE>
 
          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Sansom, to:

          Robert D. Sansom
          at address on file with the Company

or to such other names or addresses as the Company or Sansom, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     7.   Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Sansom.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Sansom under this
Agreement are of a personal nature and shall not be assignable or delegatable in
whole or in part by Sansom.  The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business or assets of the Company,
by agreement in form and substance satisfactory to Sansom, expressly to assume
and agree to perform this Agreement in the same manner and to the extent the
Company would be required to perform if no such succession had taken place.

                                       9
<PAGE>
 
     8.  Severability.  If any provision of this Agreement or application
         ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     9.   Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     10.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

     11.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

                                      10
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

                                       FORE SYSTEMS, INC.

/s/ Robert D. Sansom                       /s/ Thomas J. Gill
___________________________            By:_______________________
                                           President and
                                             Chief Executive Officer

                                      11
<PAGE>
 
                                  APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.

<PAGE>
 
                                                                       EXHIBIT 8


                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Bruce E. Haney, a resident of Allison Park, Pennsylvania ("Executive").

     WHEREAS, Executive is currently employed as the Senior Vice President and
Chief Financial Officer of the Company and is a participant in the Company's
Change in Control Separation Plan, as amended and restated effective September
4, 1998, (the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Employment.  On the Effective Date, the Company hereby agrees to employ
         ----------                                                             
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5.  The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees

                                       2
<PAGE>
 
to use Executive's best efforts to carry out Executive's duties and
responsibilities. Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.3.  [Intentionally omitted]

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $275,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly).  Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.

     1.5.  Short-Term Incentive Compensation.  Executive shall be entitled to
           ---------------------------------                                 
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary.  Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

                                       3
<PAGE>
 
     1.6.  Long-Term Incentive Compensation.  Executive shall also be entitled
           --------------------------------                                   
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion.  Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.

     1.7.  Initial Stock Option Grant. Immediately following the Closing,
           --------------------------                                    
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option").  Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

     2.  Confidential Information.  Executive recognizes and acknowledges that
         ------------------------                                             
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing 

                                       4
<PAGE>
 
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the 

                                       5
<PAGE>
 
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

     3.   Non-Competition; Non-Solicitation; Consideration.
          ------------------------------------------------ 

          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above.  In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's

                                       6
<PAGE>
 
termination of employment for any reason, Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.

          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

                                       7
<PAGE>
 
          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.   Equitable Relief.
          ---------------- 

          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.

          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an 

                                       8
<PAGE>
 
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.

          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.

     5.  Termination.  The Employment Term shall terminate upon the occurrence
         -----------                                                          
of any one of the following events:

                                       9
<PAGE>
 
     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through  Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, 

                                       10
<PAGE>
 
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral
                 ---- ----------
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.

     5.4. Termination Without Cause.
          ------------------------- 

          (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment.  For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job 

                                       11
<PAGE>
 
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

          (b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke  a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;

          (i)    as liquidated damages for the failure of the Company to
continue to employ Executive, a single cash payment, within 30 days after the
effective date of the removal,

                                       12
<PAGE>
 
equal to Executive's Base Compensation, as defined in Section 5.6 below;
provided, however, that the payment shall equal two multiplied by Executive's
Base Compensation in the event that the removal occurs prior to the second
anniversary of the Effective Date;

          (ii)   for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;

          (iii)  any other amounts earned, accrued or owing but not yet paid
under Section 1 above;

          (iv)   any other benefits in accordance with the terms of any
applicable plans and programs of the Company;

          (v)    as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and

                                       13
<PAGE>
 
          (vi) the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 30 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

     5.6.  Base Compensation.  "Base Compensation" shall mean Executive's
           -----------------                                             
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year.  "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

     6.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

                                       14
<PAGE>
 
     7.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement.  If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses).  Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     8.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

                                       15
<PAGE>
 
          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention: Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

                                       16
<PAGE>
 
     If to Executive, to:

          Bruce E. Haney
          2881 Ashmont Drive
          Allison Park, PA  15101


or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     9.   Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

                                       17
<PAGE>
 
     10.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     11.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     12.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the Company written notice
thereof.  In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or other
legal representative.

     13.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not 

                                       18
<PAGE>
 
be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.

     14.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     15.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     16.  Establishment of Trust.  The Company may but is not required to
          ----------------------                                         
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                       19
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.



                                       FORE SYSTEMS, INC.

/s/ Bruce E. Haney                         /s/ Thomas J. Gill
___________________________            By:_______________________
                                       Title: President and
                                                Chief Executive Officer

                                       20
<PAGE>
 
                                   ANNEX  1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I, Bruce E. Haney, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms 
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects.  I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me.  None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive,  Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.


- ---------------------                ---------------------------
Witness                              Bruce E. Haney
<PAGE>
 
                                  APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.

<PAGE>

                                                                       EXHIBIT 9

 
                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Donal Byrne, a resident of Saratoga, California ("Executive").

     WHEREAS, Executive is currently employed as the Senior Vice President,
Corporate Marketing of the Company and is a participant in the Company's Change
in Control Separation Plan, as amended and restated effective September 4, 1998,
(the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Employment.  On the Effective Date, the Company hereby agrees to employ
         ----------                                                             
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5.  The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees

                                       2
<PAGE>
 
to use Executive's best efforts to carry out Executive's duties and
responsibilities. Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.3.  [Intentionally omitted]

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $275,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly).  Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.  If applicable, Executive shall
also be entitled to the additional consideration described on Appendix B.

     1.5.  Short-Term Incentive Compensation.  Executive shall be entitled to
           ---------------------------------                                 
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary.  Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

                                       3
<PAGE>
 
     1.6.  Long-Term Incentive Compensation.  Executive shall also be entitled
           --------------------------------                                   
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion.  Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.

     1.7.  Initial Stock Option Grant. Immediately following the Closing,
           --------------------------                                    
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option").  Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

     2.  Confidential Information.  Executive recognizes and acknowledges that
         ------------------------                                             
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing 

                                       4
<PAGE>
 
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the 

                                       5
<PAGE>
 
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

     3.  Non-Competition; Non-Solicitation; Consideration.
         ------------------------------------------------ 
          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above. In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's

                                       6
<PAGE>
 
termination of employment for any reason,  Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.
          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.
          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

                                       7
<PAGE>
 
          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.  Equitable Relief.
         ---------------- 
          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.
          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an 

                                       8
<PAGE>
 
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.

     5.  Termination.  The Employment Term shall terminate upon the occurrence
         -----------                                                          
of any one of the following events:

                                       9
<PAGE>
 
     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through  Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, 

                                       10
<PAGE>
 
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral
                 ---- ----------
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.

     5.4.  Termination Without Cause.
           ------------------------- 
          (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment.  For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job 

                                       11
<PAGE>
 
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

          (b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke  a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;

                                       12
<PAGE>
 
          (i) as liquidated damages for the failure of the Company to continue
to employ Executive, a single cash payment, within 30 days after the effective
date of the removal, equal to Executive's Base Compensation, as defined in
Section 5.6 below;

          (ii) for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;
          
          (iii)  any other amounts earned, accrued or owing but not yet
paid under Section 1 above;

          (iv) any other benefits in accordance with the terms of any
applicable plans and programs of the Company;

          (v) as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and

                                       13
<PAGE>
 
          (vi) the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 30 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

     5.6.  Base Compensation.  "Base Compensation" shall mean Executive's
           -----------------                                             
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year.  "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

     6.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

                                       14
<PAGE>
 
     7.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement.  If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses).  Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     8.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

                                       15
<PAGE>
 
          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Executive, to:

          Donal Byrne
          14660 C Big Basin Way
          Saratoga, CA  95070


or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     9.  Contents of Agreement; Amendment and Assignment.
         ----------------------------------------------- 
          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any

                                       16
<PAGE>
 
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

     10.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     11.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     12.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the 

                                       17
<PAGE>
 
Company written notice thereof. In the event of Executive's death or a judicial
determination of Executive's incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to Executive's
beneficiary, estate or other legal representative.

     13.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

     14.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     15.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     16.  Establishment of Trust.  The Company may but is not required to
          ----------------------                                         
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                       18
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
                                       FORE SYSTEMS, INC.

/s/ Donal Byrne                            /s/ Thomas J. Gill
___________________________            By:_______________________
                                       Title: President and
                                                Chief Executive Officer

                                       19
<PAGE>
 
                                    ANNEX  1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I,______________, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms 
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects.  I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me.  None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive,  Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.


- ----------------------                     ------------------------------       
Witness
<PAGE>
 
                                   APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.
<PAGE>
 
                                   APPENDIX B


A payment of up to $75,000 in reimbursement for any moving expenses incurred in
relocating back to the Executive's former residence prior to becoming employed
by the Company in Pittsburgh, Pennsylvania, such amount to become payable in the
event Executive's employment terminates other than for Cause within 24 months
following his relocation.

<PAGE>
 
                                                                      EXHIBIT 10

                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Ronald E. McKenzie, a resident of Ontario, Canada ("Executive").

     WHEREAS, Executive is currently employed as the Senior Vice President and
General Manager Volume Products Business Unit of the Company and is a
participant in the Company's Change in Control Separation Plan, as amended and
restated effective September 4, 1998, (the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Employment.  On the Effective Date, the Company hereby agrees to employ
         ----------                                                             
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5.  The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees

                                       2
<PAGE>
 
to use Executive's best efforts to carry out Executive's duties and
responsibilities.  Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.3.  [Intentionally omitted]

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of Canadian $313,500, payable in installments
at such times as the Company customarily pays its other senior level executives
(but in any event no less often than monthly).  Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.

     1.5.  Short-Term Incentive Compensation.  Executive shall be entitled to
           ---------------------------------                                 
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary.  Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

                                       3
<PAGE>
 
     1.6.  Long-Term Incentive Compensation.  Executive shall also be entitled
           --------------------------------                                   
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion.  Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.

     1.7.  Initial Stock Option Grant. Immediately following the Closing,
           --------------------------                                    
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option").  Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

     2.  Confidential Information.  Executive recognizes and acknowledges that
         ------------------------                                             
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing 

                                       4
<PAGE>
 
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the

                                       5
<PAGE>
 
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

     3.   Non-Competition; Non-Solicitation; Consideration.
          ------------------------------------------------ 

          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above. In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's

                                       6
<PAGE>
 
termination of employment for any reason,  Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.

          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

                                       7
<PAGE>
 
          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.   Equitable Relief.
          ---------------- 

          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.

          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an 

                                       8
<PAGE>
 
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.

          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.

     5.  Termination.  The Employment Term shall terminate upon the occurrence
         -----------                                                          
of any one of the following events:

                                       9
<PAGE>
 
     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through  Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, 

                                       10
<PAGE>
 
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral
                 ---- ----------
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.

     5.4. Termination Without Cause.
          ------------------------- 

          (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment. For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job

                                       11
<PAGE>
 
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

          (b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke  a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;

                                       12
<PAGE>
 
          (i)   as liquidated damages for the failure of the Company to continue
to employ Executive, a single cash payment, within 30 days after the effective
date of the removal, equal to Executive's Base Compensation, as defined in
Section 5.6 below;

          (ii)  for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;

          (iii) any other amounts earned, accrued or owing but not yet paid
under Section 1 above;

          (iv)  any other benefits in accordance with the terms of any
applicable plans and programs of the Company;

          (v)   as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and

                                       13
<PAGE>
 
          (vi)  the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 30 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

     5.6.  Base Compensation.  "Base Compensation" shall mean Executive's
           -----------------                                             
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year.  "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

     6.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

                                       14
<PAGE>
 
     7.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement.  If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses).  Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     8.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

                                       15
<PAGE>
 
          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Executive, to:

          Ronald E. McKenzie
          1430 Cooper Court
          Oakville, Ontario
          Canada  L6M 2Y8


or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     9.   Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any

                                       16
<PAGE>
 
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

     10.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     11.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     12.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the 

                                       17
<PAGE>
 
Company written notice thereof. In the event of Executive's death or a judicial
determination of Executive's incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to Executive's
beneficiary, estate or other legal representative.

     13.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

     14.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     15.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     16.  Establishment of Trust.  The Company may but is not required to
          ----------------------                                         
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                       18
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.


                                       FORE SYSTEMS, INC.

/s/ Ronald E. Mckenzie                      /s/ Thomas J. Gill
___________________________            By:_______________________
                                       Title: President and
                                                Chief Executive Officer

                                       19
<PAGE>
 
                                   ANNEX  1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I,______________, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms 
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects.  I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me.  None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive,  Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.




- -------------------                      ----------------------
Witness
<PAGE>
 
                                  APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.

<PAGE>
 
                                                                      EXHIBIT 11


                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Robert Musslewhite, a resident of Wexford, Pennsylvania ("Executive").

     WHEREAS, Executive is currently employed as the Senior Vice President of
Corporate Planning of the Company and is a participant in the Company's Change
in Control Separation Plan, as amended and restated effective September 4, 1998,
(the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Employment.  On the Effective Date, the Company hereby agrees to employ
         ----------                                                             
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5.  The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees

                                       2
<PAGE>
 
to use Executive's best efforts to carry out Executive's duties and
responsibilities.  Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.3.  [Intentionally omitted]

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $230,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly).  Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.  If applicable, Executive shall
also be entitled to the additional consideration described on Appendix B.

     1.5.  Short-Term Incentive Compensation.  Executive shall be entitled to
           ---------------------------------                                 
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary. Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

                                       3
<PAGE>
 
     1.6.  Long-Term Incentive Compensation.  Executive shall also be entitled
           --------------------------------                                   
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion.  Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.

     1.7.  Initial Stock Option Grant. Immediately following the Closing,
           --------------------------                                    
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option").  Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

     2.  Confidential Information.  Executive recognizes and acknowledges that
         ------------------------                                             
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing 

                                       4
<PAGE>
 
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the

                                       5
<PAGE>
 
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

     3.   Non-Competition; Non-Solicitation; Consideration.
          ------------------------------------------------ 
          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above. In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's

                                       6
<PAGE>
 
termination of employment for any reason,  Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.

          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

                                       7
<PAGE>
 
          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.   Equitable Relief.
          ---------------- 

          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.

          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an 

                                       8
<PAGE>
 
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.

          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.

     5.  Termination.  The Employment Term shall terminate upon the occurrence
         -----------                                                          
of any one of the following events:

                                       9
<PAGE>
 
     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through  Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, 

                                       10
<PAGE>
 
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral 
                 ---- ----------                           
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.

     5.4.  Termination Without Cause.
           ------------------------- 

           (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment.  For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job 

                                       11
<PAGE>
 
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

          (b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke  a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;

                                       12
<PAGE>
 
          (i) as liquidated damages for the failure of the Company to continue
to employ Executive, a single cash payment, within 30 days after the effective
date of the removal, equal to Executive's Base Compensation, as defined in
Section 5.6 below;

          (ii) for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;

          (iii) any other amounts earned, accrued or owing but not yet paid
under Section 1 above;

          (iv) any other benefits in accordance with the terms of any applicable
plans and programs of the Company;

          (v) as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and

                                       13
<PAGE>
 
          (vi) the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 30 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

     5.6.  Base Compensation.  "Base Compensation" shall mean Executive's
           -----------------                                             
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year.  "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

     6.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

                                       14
<PAGE>
 
     7.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement.  If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses).  Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     8.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

                                       15
<PAGE>
 
          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market Street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Executive, to:

          Robert C. Musslewhite
          228 Edelweiss Drive
          Wexford, PA  15090


or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     9.   Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any

                                       16
<PAGE>
 
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

     10.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     11.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     12.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the

                                       17
<PAGE>
 
Company written notice thereof. In the event of Executive's death or a judicial
determination of Executive's incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to Executive's
beneficiary, estate or other legal representative.

     13.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

     14.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     15.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     16.  Establishment of Trust.  The Company may but is not required to
          ----------------------                                         
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                       18
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
                                       FORE SYSTEMS, INC.

___________________________            By:_______________________
                                       Title:

                                       19
<PAGE>
 
                                   ANNEX  1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I,______________, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects.  I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me.  None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive, Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.


- ---------------------                             ------------------------
Witness
<PAGE>
 
                                  APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.
<PAGE>
 
                                   APPENDIX B


A payment of up to $80,000 in reimbursement for any moving expenses incurred in
relocating back to the Executive's former residence prior to becoming employed
by the Company in Pittsburgh, Pennsylvania, such amount to become payable in the
event Executive's employment terminates other than for Cause within 36 months
following his relocation.

<PAGE>
 
                                                                      EXHIBIT 12

                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Kevin E. Nigh, a resident of Gibsonia, Pennsylvania ("Executive").

     WHEREAS, Executive is currently employed as the Senior Vice President,
Worldwide Engineering of the Company and is a participant in the Company's
Change in Control Separation Plan, as amended and restated effective September
4, 1998, (the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Employment.  On the Effective Date, the Company hereby agrees to employ
         ----------                                                             
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5.  The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees

                                       2
<PAGE>
 
to use Executive's best efforts to carry out Executive's duties and
responsibilities.  Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.3.  [Intentionally omitted]

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $250,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly).  Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.

     1.5.  Short-Term Incentive Compensation.  Executive shall be entitled to
           ---------------------------------                                 
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary.  Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

                                       3
<PAGE>
 
     1.6.  Long-Term Incentive Compensation.  Executive shall also be entitled
           --------------------------------                                   
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion.  Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.

     1.7.  Initial Stock Option Grant. Immediately following the Closing,
           --------------------------                                    
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option").  Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

     2.  Confidential Information.  Executive recognizes and acknowledges that
         ------------------------                                             
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing 

                                       4
<PAGE>
 
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the

                                       5
<PAGE>
 
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

     3.   Non-Competition; Non-Solicitation; Consideration.
          ------------------------------------------------ 

          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above. In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's

                                       6
<PAGE>
 
termination of employment for any reason,  Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.

          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.

          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

                                       7
<PAGE>
 
          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.   Equitable Relief.
          ---------------- 

          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.

          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an 

                                       8
<PAGE>
 
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.

          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.

     5.  Termination.  The Employment Term shall terminate upon the occurrence
         -----------                                                          
of any one of the following events:

                                       9
<PAGE>
 
     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through  Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, 

                                       10
<PAGE>
 
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral
                 ---- ----------
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.

     5.4.  Termination Without Cause.
           ------------------------- 

           (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment.  For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job 

                                       11
<PAGE>
 
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

          (b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke  a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;

                                       12
<PAGE>
 
          (i)   as liquidated damages for the failure of the Company to continue
to employ Executive, a single cash payment, within 30 days after the effective
date of the removal, equal to Executive's Base Compensation, as defined in
Section 5.6 below;

          (ii)  for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;

          (iii) any other amounts earned, accrued or owing but not yet paid
under Section 1 above;

          (iv) any other benefits in accordance with the terms of any applicable
plans and programs of the Company;

          (v)  as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and

                                       13
<PAGE>
 
          (vi) the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 30 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

     5.6.  Base Compensation.  "Base Compensation" shall mean Executive's
           -----------------                                             
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year.  "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

     6.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

                                       14
<PAGE>
 
     7.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement.  If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses).  Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     8.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

                                       15
<PAGE>
 
          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA 15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Executive, to:

          Kevin E. Nigh
          5008 Willow Creek Court
          Gibsonia, PA  15044


or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     9.   Contents of Agreement; Amendment and Assignment.
          ----------------------------------------------- 

          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.

          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any

                                       16
<PAGE>
 
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

     10.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     11.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     12.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the 

                                       17
<PAGE>
 
Company written notice thereof. In the event of Executive's death or a judicial
determination of Executive's incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to Executive's
beneficiary, estate or other legal representative.

     13.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

     14.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     15.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     16.  Establishment of Trust.  The Company may but is not required to
          ----------------------                                         
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                       18
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

                                       FORE SYSTEMS, INC.

/s/ Kevin E. Nigh                          /s/ Thomas J. Gill
___________________________            By:_______________________
                                       Title: President and
                                                Chief Executive Officer

                                       19
<PAGE>
 
                                    ANNEX 1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I,______________, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms 
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects.  I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me.  None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive,  Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.


- ----------------                         -----------------------
Witness
<PAGE>
 
                                   APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.

<PAGE>
 
                                                                      EXHIBIT 13
                             EMPLOYMENT AGREEMENT
                             --------------------


     THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
J. Niel Viljoen, a resident of Pittsburgh, Pennsylvania ("Executive").

     WHEREAS, Executive is currently employed as the Senior Vice President and
General Manager Service Provider Business Unit of the Company and is a
participant in the Company's Change in Control Separation Plan, as amended and
restated effective September 4, 1998, (the "Plan"); and

     WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and

     WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and

     WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
<PAGE>
 
     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1.  Employment.  On the Effective Date, the Company hereby agrees to employ
         ----------                                                             
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth.  In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.

     1.1.  Employment Term.  The term of Executive's employment under this
           ---------------                                                
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5.  The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".

     1.2.  Duties and Responsibilities; Extent of Service.  During the
           ----------------------------------------------             
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees

                                       2
<PAGE>
 
to use Executive's best efforts to carry out Executive's duties and
responsibilities. Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.

     1.3.  [Intentionally omitted]

     1.4.  Base Salary.  For all the services rendered by Executive hereunder,
           -----------                                                        
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $250,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly).  Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.  If applicable, Executive shall
also be entitled to the additional consideration described on Appendix B.

     1.5.  Short-Term Incentive Compensation.  Executive shall be entitled to
           ---------------------------------                                 
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary.  Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.

                                       3
<PAGE>
 
     1.6.  Long-Term Incentive Compensation.  Executive shall also be entitled
           --------------------------------                                   
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion.  Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.

     1.7.  Initial Stock Option Grant. Immediately following the Closing,
           --------------------------                                    
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option").  Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.

     2.  Confidential Information.  Executive recognizes and acknowledges that
         ------------------------                                             
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing 

                                       4
<PAGE>
 
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the 

                                       5
<PAGE>
 
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").

     3.  Non-Competition; Non-Solicitation; Consideration.
         ------------------------------------------------ 
          (a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above. In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's

                                       6
<PAGE>
 
termination of employment for any reason,  Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.
          (b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.
          (c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.

                                       7
<PAGE>
 
          (d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise.  The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.

     4.  Equitable Relief.
         ---------------- 
          (a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections.  Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.
          (b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages.  Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an 

                                       8
<PAGE>
 
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
          (c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court.  Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.

     5.  Termination.  The Employment Term shall terminate upon the occurrence
         -----------                                                          
of any one of the following events:

                                       9
<PAGE>
 
     5.1.  Disability.  The Company may terminate the Employment Term if
           ----------                                                   
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term.  If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company.  Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement.  Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.

     5.2.  Death.  The Employment Term shall terminate in the event of
           -----                                                      
Executive's death.  In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies.  In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.  Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through  Executive.

     5.3.  Cause.  The Company may terminate the Employment Term, at any time,
           -----                                                              
for "cause" upon written notice, in which event all payments under this
Agreement shall cease, 

                                       10
<PAGE>
 
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral
                 ---------------
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.

     5.4.  Termination Without Cause.
           ------------------------- 
          (a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment.  For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job 

                                       11
<PAGE>
 
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.

          (b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke  a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;

                                       12
<PAGE>
 
          (i) as liquidated damages for the failure of the Company to continue
to employ Executive, a single cash payment, within 30 days after the effective
date of the removal, equal to Executive's Base Compensation, as defined in
Section 5.6 below;

          (ii) for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;

          (iii)  any other amounts earned, accrued or owing but not yet
paid under Section 1 above;
          
          (iv) any other benefits in accordance with the terms of any
applicable plans and programs of the Company;

          (v) as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and

                                       13
<PAGE>
 
          (vi) the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.

     5.5.  Voluntary Termination.  Executive may voluntarily terminate the
           ---------------------                                          
Employment Term upon 30 days' prior written notice for any reason.  In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.

     5.6.  Base Compensation.  "Base Compensation" shall mean Executive's
           -----------------                                             
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year.  "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal.  "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.

     6.  Survivorship.  The respective rights and obligations of the parties
         ------------                                                       
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.

                                       14
<PAGE>
 
     7.  Arbitration; Expenses.  In the event of any dispute under the
         ---------------------                                        
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators.  Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement.  If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses).  Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.

     8.  Notices.  All notices and other communications required or permitted
         -------                                                             
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

     If to the Company, to:

                                       15
<PAGE>
 
          FORE Systems, Inc.
          1000 FORE Drive
          Warrendale, PA  15086-7502
          Attention:  Vice President, Corporate Counsel and Secretary

     With a required copy to:

          Morgan, Lewis & Bockius
          1701 Market street
          Philadelphia, PA  19103
          Attention:  Robert J. Lichtenstein, Esquire

     If to Executive, to:

          J. Niel Viljoen
          700 Duncan Avenue
          Pittsburgh, PA  15237


or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

     9.  Contents of Agreement; Amendment and Assignment.
         ----------------------------------------------- 
          (a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
          (b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive.  The Company shall require any

                                       16
<PAGE>
 
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.

     10.  Severability.  If any provision of this Agreement or application
          ------------                                                    
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.  If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.

     11.  Remedies Cumulative; No Waiver.  No remedy conferred upon a party by
          ------------------------------                                      
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity.  No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.

     12.  Beneficiaries/References.  Executive shall be entitled, to the extent
          ------------------------                                             
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the 

                                       17
<PAGE>
 
Company written notice thereof. In the event of Executive's death or a judicial
determination of Executive's incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to Executive's
beneficiary, estate or other legal representative.

     13.  Miscellaneous.  All section headings used in this Agreement are for
          -------------                                                      
convenience only.  This Agreement may be executed in counterparts, each of which
is an original.  It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.

     14.  Withholding.  The Company may withhold from any payments under this
          -----------                                                        
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation.  Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.

     15.  Governing Law.  This Agreement shall be governed by and interpreted
          -------------                                                      
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.

     16.  Establishment of Trust.  The Company may but is not required to
          ----------------------                                         
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement.  Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.

                                       18
<PAGE>
 
     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.

                                       FORE SYSTEMS, INC.

/s/ J. Niel Viljoen                        /s/ Thomas J. Gill
___________________________            By:_______________________
                                       Title: President and
                                                Chief Executive Officer

                                       19
<PAGE>
 
                                    ANNEX  1

                                GENERAL RELEASE
                                ---------------
                                        
1.  I,______________, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
       -- ---                                                               --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
- ---                                                                 -- ---      
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.

2.  Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims.  I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.

3.  I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, sue or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms 
<PAGE>
 
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, sue or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.

4.  I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future.  I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.

5.  I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.

6.  I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects.  I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me.  None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.

7.  I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution.  I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 1000 FORE Drive, Warrendale, PA 15086-7502, Attention: Vice President,
Corporate Counsel and Secretary.
<PAGE>
 
8.  I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.

Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.


- ---------------                          -------------------------              
Witness
<PAGE>
 
                                   APPENDIX A


At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole penny) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit").  The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit.  The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.
<PAGE>
 
                                   APPENDIX B


A payment or payments intended to provide for tax equalization on taxable income
resulting from sales of FORE Systems, Inc. shares of stock acquired through
FORE's acquisition of Nemesys (approximately 35,000 shares).

<PAGE>
 
[LOGO OF FORE SYSTEMS]                                               EXHIBIT 16
1000 FORE Drive
Warrendale
Pennsylvania
15086-7502
724-742-4444
[email protected]
http://www.fore.com
                                                                 April 30, 1999
 
Dear Stockholder:
 
  We are pleased to inform you that on April 26, 1999, FORE Systems, Inc. (the
"Company") entered into an Agreement and Plan of Merger ("Merger Agreement")
with GEC Incorporated ("Parent"), a wholly owned subsidiary of The General
Electric Company, p.l.c., a public limited company organized under the laws of
England and Wales (not affiliated with the U.S. based corporation with a
similar name), and its wholly owned subsidiary, GEC Acquisition Corp.
("Purchaser"), which provides for the acquisition of the Company. Under the
terms of the Merger Agreement, Purchaser today commenced a tender offer (the
"Offer") to purchase all of the Company's outstanding shares of common stock
(the "Shares") for $35.00 per Share in cash (the "Offer Price"). The Merger
Agreement further provides that, following consummation of the Offer,
Purchaser will be merged with the Company (the "Merger") and Shares that are
not acquired through the Offer (other than those held by stockholders who
perfect their appraisal rights, Shares owned by the Company and Shares owned
by Parent or any direct or indirect wholly owned subsidiary of Parent or the
Company) will be converted in the Merger into the right to receive the same
consideration as is paid in the Offer.
 
  THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY HAS DETERMINED THAT THE MERGER
AGREEMENT AND TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY, HAS APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER AND THE MERGER, AND RECOMMENDS THAT YOU ACCEPT
THE OFFER AND TENDER YOUR SHARES TO PURCHASER PURSUANT TO THE OFFER.
 
  In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors which are described in the enclosed
Schedule 14D-9. Goldman, Sachs & Co., financial advisor to the Company, has
delivered to the Board of Directors a written opinion dated as of April 26,
1999 to the effect that, as of such date and based upon and subject to various
considerations stated in its opinion, the $35.00 per Share consideration to be
received by the holders of Shares in the Offer and the Merger was fair from a
financial point of view to such holders. A copy of the Goldman, Sachs & Co.
opinion is attached to the enclosed Schedule 14D-9 and we encourage you to
read it carefully and in its entirety. In addition, certain affiliates of the
Company have agreed, if so directed by Purchaser, to tender into the Offer
approximately 4.2% of the Shares outstanding and to sell to Purchaser any
Shares not tendered at a price per Share equal to the Offer Price.
 
  Additional information with respect to the Offer and the Merger is contained
in the enclosed Schedule 14D-9, and we urge you to consider this information
carefully.
 
  On behalf of the Board of Directors and Management of the Company, I thank
you for the support you have given to the Company.
 
                              Sincerely,
 
                              /s/ Eric C. Cooper
                              Chairman of the Board

<PAGE>
 
- --------------------------------------------------------------------------------
        Goldman Sachs & Co.  85 Broad Street|New York, New York 10004
        Tel 212 902-1000



PERSONAL AND CONFIDENTIAL
- -------------------------

                                                                      EXHIBIT 17
- --------------------------------------------------------------------------------


April 26, 1999



Board of Directors
FORE Systems, Inc.
1000 FORE Drive
Warrendale, PA  15086

Gentlemen:

You have requested our opinion as to the fairness from a financial point of view
to the holders (other than General Electric Company plc ("Buyer") and its
affiliates) of the outstanding shares of Common Stock, par value $0.01 per share
(the "Shares"), of FORE Systems, Inc. (the "Company") of the $35.00 per Share in
cash to be paid by Buyer in the Tender Offer and the Merger (as defined below)
pursuant to the Agreement and Plan of Merger, dated as of April 26, 1999, among
Buyer, GEC Acquisition Corp., a wholly-owned subsidiary of Buyer, and the
Company (the "Agreement"). The Agreement provides for a tender offer for all of
the Shares (the "Tender Offer") pursuant to which GEC Acquisition Corp. will pay
$35.00 per Share in cash for each Share accepted. The Agreement further provides
that following completion of the Tender Offer, the Company will be merged into
GEC Acquisition Corp. (the "Merger") and each outstanding Share (other than
Shares already owned by Buyer and GEC Acquisition Corp.) will be converted into
the right to receive $35.00 in cash.

Goldman, Sachs & Co., as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with 
mergers and acquisitions, negotiated underwritings, competitive biddings, 
secondary distributions of listed and unlisted securities, private placements 
and valuations for estate, corporate and other purposes. We are familiar with 
the Company having provided certain investment banking and financial advisory 
services to the Company from time to time, including having acted as its 
financial advisor in connection with, and having participation in certain of the
negotiations leading to, the Agreement.

In connection with this opinion, we have reviewed, among other things, the 
Agreement; Annual Reports to Stockholders and Annual Reports on Form 10-K of the
Company for the four fiscal years ended March 31, 1998; certain interim reports 
to stockholders and Quarterly Reports on Form 10-Q of the Company; certain other
communications from the Company; certain other communications from the Company 
to its stockholders; and certain internal financial analyses and forecasts for 
the Company prepared by its management. We also have held discussions with 
members of the senior management of the Company regarding its past and current 
business operations, financial condition and future prospects. In addition, we 
have reviewed the reported price and trading activity for the Shares, compared 
certain financial and stock market information for the Company with similar 
information for certain other companies the securities of which are publicly 
traded, reviewed the financial terms of certain recent business
<PAGE>
 
FORE Systems, Inc.
April 26, 1999
Page Two



combinations in the networking and telecommunications equipment industries 
specifically and in other industries generally and performed such other studies 
and analyses as we considered appropriate.

We have relied upon the accuracy and completeness of all of the financial and
other information reviewed by us and have assumed such accuracy and completeness
for purposes of rendering this opinion. In addition, we have not made an
independent evaluation or appraisal of the assets and liabilities of the Company
or any of its subsidiaries and we have not been furnished with any such
evaluation or appraisal. As you are aware, we have been in the process of
soliciting third party proposals regarding the acquisition of the Company, and
did receive a written proposal from another third party to acquire the Company
in a "stock-for-stock" transaction. Our opinion does not address the relative
merits of the transaction contemplated pursuant to the Agreement as compared to
any alternative business transaction that might be available to the Company. Our
advisory services and the opinion expressed herein are provided for the
information and assistance of the Board of Directors of the Company in
connection with its consideration of the transaction contemplated by the
Agreement and such opinion does not constitute a recommendation as to whether or
not any holder of Shares should tender such Shares in connection with such
transaction.

Based upon and subject to the foregoing and based upon such other matters as we 
consider relevant, it is our opinion that as of the date hereof the $35.00 per 
Share in cash to be received by the holders (other than Buyer and its 
affiliates) of Shares in the Tender Offer and the Merger is fair from a 
financial point of view to such holders.


Very truly yours,

/s/ Goldman, Sachs & Co.
- -----------------------------
GOLDMAN, SACHS & CO.




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