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TUSTIN, Calif. --- (December 3, 1998) -PairGain Technologies, Inc. (NASDAQ: PAIR) today announced the appointment of Michael Pascoe to the position of President, Chief Executive Officer and a member of the Board of Directors. Mr. Pascoe’s appointment results from the execution of a management succession plan adopted by PairGain’s Board of Directors in January 1998.

Separately, the company announced that as a result of continuing price erosion in the T1 access sector and the loss of primary supplier status at a regional Bell operating company for its HiGain T1 access products, it expects that both revenues and operating earnings for the fourth quarter will be significantly below current market expectations. In addition, the Company plans to write-off approximately $1.5 million of a minority investment it holds in a privately-held telecommunications company to reflect that company’s current market value.

Mr. Pascoe, 46, comes to PairGain from Newbridge Networks where his most recent position was President, Newbridge Networks - US and Executive Vice President, North and South America. He joined Newbridge in 1989 when it had fewer than 30 employees and was instrumental in building Newbridge from a startup to a $1.2 billion network systems equipment manufacturer to telecommunications service providers, worldwide. He has extensive management experience in both the products and markets which PairGain has targeted for its future growth. This includes a direct exposure to the development and marketing of managed access and core multi-service ATM systems, the evolution of carrier frame relay and IP services over these networks and the integration of these systems into the carriers’ Operational Support Systems.

Chuck Strauch, who formerly held the CEO position, will remain as Chairman of the Board of the Directors. He played a key role in both developing the management succession plan and in recruiting Mr. Pascoe as the new CEO. Mr. Strauch will continue as an active member of PairGain’s executive management team assisting Mr. Pascoe in the transition, while continuing to develop and maintain high level customer relationships and playing an important role in developing the company’s strategic direction. Mr. Strauch commented, "This is exactly the right time for the right individual to lead PairGain back into a growth mode. Mike has been where we want to go. His in-depth experience in sales and marketing responsible for pursuing worldwide markets is a huge plus for PairGain."

Commenting on his new opportunity, Mr. Pascoe stated, "PairGain is ideally poised to benefit from the expected dramatic growth in the world’s datacom markets. While it’s true there are currently pricing pressures in the company’s market sector, the long-term potential for the company’s markets are significant. Global deregulation, the Internet and now E-commerce over the web are all underlying dynamics that will reshape our industry. Broadband access using DSL technologies holds the key to the world’s incumbent and emerging carriers’ ability to tap into these markets. I am excited about becoming part of the PairGain team that will pursue those opportunities in these high growth markets."

Howard Flagg, co-founder of PairGain, who formerly held the President’s position, will become Executive Vice President - Business Development. He will also assist Mike in the transition and concentrate his activities on acquisitions and new systems architecture. Both Howard and his fellow founder, Ben Itri, Executive Vice President - Chief Technical Officer, will continue to be active members of the executive management team and remain as PairGain board members.

PairGain is a world leader in the design, manufacture and marketing of DSL (Digital Subscriber Line) networking systems. Service providers and private network operators worldwide use PairGain’s products to deploy DSL-based services, such as high-speed Internet access, remote LAN access and enterprise LAN extensions over the existing infrastructure of copper telephones lines.

For more than ten years, PairGain has been recognized as a technology leader and industry innovator. The company offers the widest range of HDSL, ADSL and SDSL-based systems available. Its product lines include HiGain T1/E1 access systems, small subscriber carrier systems, including PG-Flex™ and PG-Plus™, enterprise LAN systems and megabit access solutions, including the Avidia™ system, integrated access concentrator and Megabit Modems™. Currently, well over 1,000,000 PairGain DSL nodes are installed in over 70 countries.

Except for the historical information contained herein, the matters discussed in the announcement are forward-looking statements which involve risk and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the Company’s operations, markets, products, services and prices and other factors discussed in the Company’s filings with the Securities and Exchange Commission.


Pairgain  Contact
Stephen Moore
PairGain Technologies

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