Exhibit 10.18

By Hand Delivery

CONFIDENTIAL

                                                               March 30, 1998
Mr. Donald B. Reed
13241 Oakmead
Palm Beach Gardens, FL 33418

Dear Don:

         This  letter  will  confirm  the  agreement  reached  between  you  and
Cabletron  Systems,  Inc. (the  "Company")  concerning  your  resignation  as an
officer and employee (but not a director) of the Company.  Your  employment with
the Company will terminate as of today, March 30, 1998 (the "Separation  Date").
Reference is made to the Employment Agreement dated August [ ], 1997 between you
and the Company (the "Employment  Agreement").  Unless otherwise defined herein,
capitalized  terms used  herein  shall  have the same  meaning as defined in the
Employment  Agreement.  Provided  that you accept it, this letter  contains  the
agreement between you and the Company concerning your severance arrangements, as
follows:

         1. As soon as  practicable  after the date  hereof,  to the  extent not
already  paid,  the Company  will (i) pay you, at your current base rate of pay,
for all work  performed for the Company from the end of the last payroll  period
through the Separation  Date, (ii) pay you for all vacation time you had earned,
but not  used,  as of the  Separation  Date,  as  reflected  on the books of the
Company,  and (iii) reimburse you for all business expenses incurred through the
Separation Date in accordance with Section 4 of the Employment Agreement.

         2. In  consideration  for your acceptance of this agreement and subject
to your fully meeting your  obligations  under it, on the effective date of this
agreement,  the  Company  will  provide  you  the  following  severance  pay and
benefits:

         a. As severance  pay, the Company  will pay you,  within five  business
days of the  effective  date of this  agreement,  a lump sum cash  payment  of $
1,125,000 (the amount equal to your Base Salary for the remainder of the Term of
the Employment Agreement).

         b. If you  currently  participate  in the  Company's  medical  and life
insurance  plans (the "Plans"),  you may elect to continue  participation  for a
period of time under the  federal  law known as COBRA.  If you elect to continue
participation in the Plans under COBRA and do so in a timely manner, the Company
will  pay the  premium  cost  of  your  coverage,  and  that  of  your  eligible
dependents,  until you cease to be eligible for  participation  under COBRA.  In
addition,  if the Company is able to continue  your  participation  in the Plans
thereafter  until the Term of Employment  would have ended under the  Employment
Agreement,  you may so continue to participate  and the Company will continue to
pay the premium cost of  coverage.  If you are unable to so  participate  in the
Plans,  the  Company  will  pay you a lump sum  cash  payment  equal to the then
present value of the amounts the Company would have paid had you continued to be
enrolled in such Plans through the date the Term of Employment would have ended.
The lump sum payment referred to above will be made within five business days of
the date you are no longer  eligible to participate  in the Plans.  If you elect
not to  continue  your  participation  in the Plans or if you are not  currently
enrolled  in the Plans and  therefore  have no right to  continue  participation
under  COBRA,  the  Company  will pay you a lump sum cash  payment  equal to the
present value of the amounts the Company would have paid,  had you been enrolled
in such  Plans,  to  continue  your  participation  and  that  of your  eligible
dependents  until the date the Term of Employment would have ended. The lump sum
payment  referred  to  above  will  be made  within  five  business  days of the
effective date of this agreement,  of if later, within five business days of the
date you make your election with respect to participation in the Plans.

         c. The Company will  provide  until the later of one year from the date
hereof or the date you secure  employment,  if earlier,  out placement  services
through a mutually  agreeable  firm.  The Company  will also provide you with an
office  and  administrative  support  in the West Palm  Beach,  Florida  area or
another  mutually  agreeable  location  for a period of six months from the date
hereof.

         d. Your options to purchase a total of 800,000  shares  (consisting  of
two separate options, one to purchase 600,000 shares and one to purchase 200,000
shares) of the Company's  Common Stock shall become  immediately  exercisable in
full and shall  remain  exercisable  for a period of three  years  from the date
hereof  notwithstanding  anything to the contrary in the Employment Agreement or
the option forms.

         e.  The  Company  will  reimburse  you for all  travel  and  relocation
expenses incurred by you within six months of the date hereof for the reasonable
out-of-pocket  costs of your move from New  Hampshire  to the  location  of your
subsequent employment,  plus an additional payment (the "additional payment") to
compensate  you for any  federal and state  income  taxes  attributable  to such
reimbursements  and payments and federal and state income taxes  attributable to
the  additional  payment.  The Company will also  reimburse  you for all related
furniture storage expenses,  including  furniture currently stored in New Jersey
and will assume  responsibility  for the balance of your lease payments relating
to the current term of the lease of your residence in Rochester, New Hampshire.

         3. The Company hereby waives your  compliance  with Section 7(a) of the
Employment  Agreement.  You agree to abide by the terms of  Section  7(b) of the
Employment Agreement.

         4. The Company will  reimburse you for costs  incurred by you for first
class air travel to all board meetings.

         5. You will use reasonable  efforts to provide  consulting  services to
the Company by telephone or in a mutually  agreeable location from time to time,
for a period of six months from the date hereof.  Such services shall consist of
advice to the Chief Executive Officer of the Company.  The performance by you of
consulting  services shall be at the request of the Chief  Executive  Officer of
the Company upon reasonable notice to you from time to time. In consideration of
your agreement to provide such  consulting  services,  the Company agrees to pay
you a retainer of $8,334.00 per month,  payable in advance on the first business
day of each month beginning  April 1, 1998, plus any reasonable  travel expenses
incurred by you in providing any such consulting services. It is understood that
the failure of the Company to request consulting  services shall not relieve the
Company of its obligation to make required payments hereunder.

         6. All payments by the Company under this  agreement will be reduced by
all taxes and other  amounts  that the Company is  required  to  withhold  under
applicable law and all other deductions authorized by you.

         7. You agree  that the  payments  provided  under  paragraph  1 of this
agreement are in complete  satisfaction of any and all  compensation  due to you
from the Company  through  the  Separation  Date  whether  under the  Employment
Agreement or  otherwise.  You will not  continue to earn  vacation or other paid
time off after  the  Separation  Date  and,  except  as  expressly  provided  in
paragraph 2.b, your  participation in all employee benefit plans and programs of
the Company will end as of the Separation  Date, in accordance with the terms of
those plans and programs.

         8. You agree that you will continue to protect Confidential Information
as provided in Section 6 of the Employment Agreement.

         9. You agree that you will not  disclose  this  agreement or any of its
terms or  provisions,  directly  or by  implication,  except to  members of your
immediate family and to your legal and tax advisors,  and then only on condition
that they agree not to further  disclose  this  agreement or any of its terms or
provisions to others.

         10.  You  agree  that you will  continue  to use your best  efforts  to
support and promote the interests and  reputation of the Company;  that you will
not disparage the Company or any of the people or  organizations  connected with
it; and that you will not  otherwise do or say anything  that could  disrupt the
good morale of the  employees of the Company or otherwise  harm its interests or
reputation.

         11. You agree to cooperate  with the Company  hereafter with respect to
all matters  arising  during or related to your  employment,  including  but not
limited  to all  matters  in  connection  with any  governmental  investigation,
litigation or regulatory or other  proceeding which may have arisen or which may
arise following the signing of this agreement.

         12. In order to be certain that this agreement will resolve any and all
concerns that you might have, the Company  requests that you carefully  consider
its terms,  including the release of claims set forth below and, in that regard,
encourages you to seek the advice of an attorney before signing this agreement.

                   13. This letter contains the entire agreement between you and
the   Company   and   replaces   all  prior  and   contemporaneous   agreements,
communications and understandings, whether written or oral, with respect to your
employment  and its  termination  and all related  matters  excluding  only your
obligations  under  Section  6  and  7 of  the  Employment  Agreement  and  your
resignation  dated  March 30,  1998.  This  agreement  will be  governed  by and
interpreted in accordance with the laws of the State of New Hampshire.

         14. In exchange for the special severance pay and benefits provided you
under this  Agreement,  to which you would not otherwise be entitled,  you agree
that this  agreement  shall be in complete and final  settlement  of any and all
causes of action,  rights or claims that you have had in the past,  now have, or
might now have,  in any way  related to,  connected  with or arising out of your
employment or its  termination or pursuant to Title VII of the Civil Rights Act,
the Americans with Disabilities  Act, the Age  Discrimination in Employment Act,
any  other  federal,   state  or  local  employment  law,  regulation  or  other
requirement  and you hereby  release  and forever  discharge  the  Company,  its
subsidiaries  and other  affiliates and all of their respective past and present
shareholders, directors, officers, employees, agents, successors and assigns and
all  others  connected  with  them,  both  individually  and in  their  official
capacities, from any and all such causes of action, rights or claims.

         15. In  consideration  of your  acceptance  of this  agreement and your
meeting in full your  obligations  under it, the  Company  hereby  releases  and
forever   discharges   you,   your   heirs,   executors,    administrators   and
representatives,  and all others  connected with you, from any and all causes of
action,  rights  or  claims  which  the  Company  has had in the past or now has
against  you in any way  related  to,  arising  out of or  connected  with  your
employment by the Company.

         16. In signing this agreement,  you give the Company assurance that you
have signed it voluntarily and with a full  understanding  of its terms and that
you have had  sufficient  opportunity  to consider this agreement and to consult
with anyone described in Section 9 before signing it.


         If the terms of this agreement are acceptable to you, please sign, date
and return it to me within  twenty-one  days of the date you receive it. You may
revoke  this  agreement  at any time  during the  seven-day  period  immediately
following the date of your signing. If you do not do so, then, at the expiration
of that  seven-day  period,  this letter  will take effect as a  legally-binding
agreement between you and the Company on the basis set forth above. The enclosed
copy of this letter, which you should also sign and date, is for your records.

                                   Sincerely,



                                   /s/ Craig R. Benson
                                   ---------------------
                                   Craig R. Benson
                                   Chairman of the Board


Accepted and agreed:


Signature:  /s/ Donald B. Reed
            ------------------
               DONALD B. REED

In accordance with Section 2(b) hereof, I hereby elect not to participate in the
Plans and instead to receive a lump sum cash payment.


Signature:  /s/ Donald B. Reed
            ------------------
               DONALD B. REED

Date:  March 30, 1998