EXHIBIT 10.1
3COM CORPORATION
EMPLOYMENT AGREEMENT
     This Employment Agreement (the “Agreement”) is by and between 3Com
Corporation (the “Company) and Robert Y.L. Mao (“Executive”) and is as of
April 29, 2008.
     1. Duties and Scope of Employment.
          (a) Positions and Duties. As of April 30, 2008 (the “Effective Date”),
Executive will serve as the Company’s Chief Executive Officer, reporting
directly to the Board of Directors (the “Board”) of the Company. As of the
Effective Date, Executive will render such business and professional services in
the performance of his duties, consistent with Executive’s position within the
Company, as will reasonably be assigned to him by the Board. Executive’s
principal place of employment shall be Beijing, China with regular travel to
Hangzhou, China and Marlborough, Massachusetts. The period Executive is employed
by the Company under this Agreement is referred to herein as the “Employment
Term.”
          (b) Board Membership. At each annual meeting of the Company’s
stockholders during the Employment Term, the Company will nominate Executive to
serve as a member of the Board. Executive’s continued service as a member of the
Board will be subject to any required stockholder approval. Upon the termination
of Executive’s employment for any reason, unless otherwise requested by the
Board, Executive will be deemed to have resigned from the Board (and all other
positions held at the Company and its affiliates) voluntarily, without any
further action by Executive, as of the end of Executive’s employment and
Executive, at the Board’s request, will execute any documents necessary to
reflect his resignation.
          (c) Obligations. During the Employment Term, Executive will devote
Executive’s full business efforts and time to the Company and will use good
faith efforts to discharge Executive’s obligations under this Agreement to the
best of Executive’s ability and in accordance with the Company’s conflict of
interests policies and code of conduct. For the duration of the Employment Term,
Executive agrees not to actively engage in any other employment, occupation, or
consulting activity, including membership of boards of directors or advisors,
for any direct or indirect remuneration without the prior approval of the Board
(which approval will not be unreasonably withheld); provided, however, that
Executive may (i) serve on the board of directors of, or continue to hold an
interest in, the companies previously disclosed and submitted to the Company in
writing on or prior to the Effective Date and (ii) without the approval of the
Board, serve in any capacity with any civic, educational, or charitable
organization, provided such services do not interfere with Executive’s
obligations to Company.
               (i) Executive hereby represents and warrants to the Company that
Executive is not party to any contract, understanding, agreement or policy,
written or otherwise, that would be breached by Executive’s entering into, or
performing services under, this Agreement. Executive further represents that as
of the date of this Agreement there are no threatened, pending, or actual claims
against Executive of which he is aware as a result of his
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employment with his current employer (or any other previous employer) or his
membership on any boards of directors.
          (d) Other Entities. Executive agrees to serve and may be appointed,
without additional compensation, as an officer and director for each of the
Company’s subsidiaries, partnerships, joint ventures, limited liability
companies and other affiliates, including entities in which the Company has a
significant investment as determined by the Company. As used in this Agreement,
the term “affiliates” will include any entity controlled by, controlling, or
under common control of the Company.
     2. At-Will Employment. Executive and the Company agree that Executive’s
employment with Company constitutes “at-will” employment. Executive and the
Company acknowledge that this employment relationship may be terminated at any
time, upon written notice to the other party, with or without Cause or Good
Reason (as each such term is defined in Section 10 below), at the option either
of the Company or Executive. However, as described in this Agreement, Executive
may be entitled to severance benefits depending upon the circumstances of
Executive’s termination of employment.
     3. Compensation.
          (a) Base Salary. As of the Effective Date, the Company will pay
Executive an annual salary of $650,000.00 as compensation for his services (such
annual salary, as is then effective, to be referred to herein as “Base Salary”).
The Base Salary will be paid periodically in accordance with the Company’s
normal payroll practices and be subject to the usual, required withholdings.
          (b) Annual Incentive. Executive will be eligible to receive annual
cash incentives payable for the achievement of performance goals established by
the Board or by the Compensation Committee of the Board (the “Committee”).
During the Employment Term, Executive’s target annual incentive will be not less
than 100% of Base Salary (“Target Annual Incentive”), with a maximum potential
opportunity of 200% of Base Salary, subject to the terms of the bonus plan
approved by the Committee except that the terms of the Agreement shall control
to the extent that this Agreement provides for more favorable terms with respect
to the annual incentive as it applies to Executive. The actual earned annual
cash incentive, if any, payable to Executive for any performance period will
depend upon the extent to which the applicable performance goal(s) specified by
the Committee are achieved or exceeded and will be adjusted for under- or
over-performance. Any incentive earned during the fiscal year 2008 will be
pro-rated based on the Effective Date (calculated by multiplying any incentive
earned by Executive by a fraction with a numerator equal to the number of days
between the Effective Date and the close of the second half fiscal year and a
denominator equal to 182). For fiscal year 2009, Executive’s actual earned
annual cash incentive shall be guaranteed to equal no less than 100% of Base
Salary, provided Executive remains employed by the Company (but this sentence is
not intended to limit the benefits to which Executive may be entitled under
Section 8).
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          (c) Equity.
               (i) Executive will be granted nonstatutory stock options to
purchase two million (2,000,000) shares of Company common stock (the “Stock
Option Grant”), two hundred fifty thousand (250,000) of which are deemed to be
in connection with Executive’s “initial service” as that term is used in the
Company’s 2003 Stock Plan, as amended (the “2003 Plan”). The exercise price will
be at a per share exercise price equal to the closing price per share of Company
common stock on Nasdaq Global Select Market (“Nasdaq”) on the grant date, which
shall be the first Tuesday in the month immediately succeeding the month in
which Executive commences employment with the Company. The Stock Option Grant
will be granted under and subject to the terms and conditions of the 2003 Plan,
Company’s 2003 Stock Plan, as amended (the “2003 Plan”), and the Company’s form
of stock option agreement, except that the terms of this Agreement control to
the extent that this Agreement provides for more favorable terms. The Stock
Option Grant will be scheduled to vest at a rate of 25% on each anniversary of
the grant over four (4) years assuming Executive’s continued employment with the
Company on each scheduled vesting date, and will have the maximum term permitted
in the 2003 Plan.
               (ii) Executive will be granted one million and five hundred
thousand (1,500,000) shares of restricted stock (the “Restricted Stock Grant”)
on the first Tuesday in the month immediately succeeding the month in which
Executive commences employment with the Company. The Restricted Stock Grant will
be granted under and subject to the terms and conditions of the 2003 Plan and
the Company’s form of restricted stock agreement, except that the terms of this
Agreement control to the extent that this Agreement provides for more favorable
terms. The Restricted Stock Grant will be scheduled to vest in three equal
installments on each anniversary date of the grant over three (3) years assuming
Executive’s continued employment with the Company on each scheduled vesting
date.
               (iii) Executive will also be eligible to receive additional
grants of equity and other incentive awards during his employment with the
Company.
     4. Employee Benefits.
          (a) Generally. Executive will be eligible to participate in accordance
with the terms of all Company employee benefit plans, policies and arrangements
that are applicable to other executive officers of the Company, as such plans,
policies and arrangements may exist from time to time.
          (b) Vacation. Executive will be entitled to receive paid annual
vacation in accordance with Company policy for other senior executive officers.
In no event will Executive receive less than four (4) weeks of paid vacation
time annually, it being understood that Executive will be entitled to receive
four (4) consecutive weeks of paid vacation during the first six (6) month
period following the Effective Date.
          (c) Life Insurance. Upon the Effective Date and throughout the
duration of Executive’s employment with the Company, the Company will purchase
and maintain a $10,000,000.00 term life insurance policy for the benefit of
Executive or his estate. Executive will assist the Company in procuring such
insurance by submitting to typical examinations and
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by completing such applications and other instruments as may be required by the
insurance carriers to which application is made for any such insurance.
Notwithstanding the preceding, in no event will the Company be required to pay
more than $30,000.00 for any annual premium for the policy. The Company’s
obligation to maintain this policy will terminate immediately upon Executive’s
voluntary termination of employment without Good Reason or his termination for
Cause. In the event of a termination without Cause, a resignation for Good
Reason, or a termination following a Change of Control, the Company will keep
the policy in effect for a period equal to the earlier of one (1) year after
such termination, or the date on which Executive becomes eligible for coverage
under another employer’s life insurance plan.
     5. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment and other expenses incurred by Executive in the furtherance of the
performance of Executive’s duties hereunder, in accordance with the Company’s
expense reimbursement policy as in effect from time to time. Executive will be
provided access to a car and driver for his daily transit in connection with his
employment with the Company.
     6. Term and Termination of Employment. In the event Executive’s employment
with the Company terminates for any reason, Executive will be entitled to any
(a) unpaid Base Salary accrued up to the effective date of termination;
(b) unpaid, but earned and accrued annual incentive for any completed fiscal
year as of his termination of employment; (c) pay for accrued but unused
vacation; (d) benefits or compensation as provided under the terms of any
employee benefit and compensation agreements or plans applicable to Executive;
(e) unreimbursed business expenses required to be reimbursed to Executive; and
(f) rights to indemnification Executive may have under the Company’s Articles of
Incorporation, Bylaws, the Agreement, or separate indemnification agreement, as
applicable. In addition, if the termination is by the Company without Cause or
Executive resigns for Good Reason, Executive will be entitled to amounts and
benefits specified in Section 8.
     7. Survival of Covenants.
          (a) Non-solicitation and Non-competition. Executive agrees that during
the Employment Term and for twelve (12) months thereafter, Executive will not
(i) solicit any employee of the Company (other than Executive’s personal
assistant) for employment other than at the Company or one of its subsidiaries
or affiliates, or (ii) directly or indirectly engage in, have any ownership
interest in or participate in any entity that as of the date of termination,
competes with the Company in any substantial business of the Company.
Executive’s passive ownership of not more than 1% of any publicly traded company
and/or 5% ownership of any privately held company will not constitute a breach
of this Section 7(a).
          (b) Nondisparagement. During the Employment Term and for twelve
(12) months thereafter, Executive will not knowingly and materially disparage,
criticize, or otherwise make any derogatory statements regarding the Company,
and the members of the Board or the Chief Executive staff will not knowing and
materially disparage, criticize, or otherwise make any derogatory statements
regarding Executive, other than in connection with internal discussions
regarding the performance or management of the Company or the Executive.
Notwithstanding the foregoing, nothing contained in this Agreement will be
deemed to restrict Executive, the Company or any of the Company’s current or
former officers and/or directors from providing
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information to any governmental or regulatory agency (or in any way limit the
content of any such information) to the extent they are required to provide such
information pursuant to applicable law or regulation.
          (c) Confidentiality. During the Employment Term and thereafter,
Executive will continue to comply with the terms of the Company’s restrictive
covenant agreement appended hereto as Exhibit A (the “Restrictive Covenant
Agreement”).
     8. Severance.
          (a) Termination Without Cause or Resignation for Good Reason other
than in Connection with a Change of Control. If Executive’s employment is
terminated by the Company without Cause or if Executive resigns for Good Reason,
and such termination is not in Connection with a Change of Control, then,
subject to Section 8(d), Executive will receive: (i) continued payment of the
aggregate of executive’s Base Salary plus the Target Annual Incentive for the
year in which the termination occurs (less applicable tax withholdings) for
twelve (12) months, such amounts to be paid out bi-weekly in accordance with the
Company’s normal payroll policies; (ii) twelve (12) months accelerated vesting
with respect to Executive’s then outstanding, unvested equity awards, other than
performance-based awards, (iii) extension of the exercise period for all
Executive’s outstanding stock options to the earlier of 165 calendar days from
the date of termination or the expiration date of the stock options;
(v) reimbursement for premiums paid for continued health benefits for Executive
(and any eligible dependents) under the Company’s health plans until the earlier
of (x) eighteen (18) months, payable when such premiums are due (provided
Executive validly elects to continue coverage under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”) or (y) the date upon which Executive and
Executive’s eligible dependents become covered under similar plans; and
(vi) life insurance as set forth in Section 4(c). In addition, (x) if such
termination or resignation is after April 29, 2009, then Executive’s then
outstanding equity from the Stock Option Grant and the Restricted Stock Grant
hereunder shall be accelerated in full, and (y) if such termination is after
December 31, 2009, then Executive’s then outstanding equity from the Stock
Option Grant and the Restricted Stock Grant hereunder as well as Executive’s
outstanding equity from any grants made in calendar year 2009 shall be
accelerated in full.
          (b) Termination Without Cause or Resignation for Good Reason in
Connection with a Change of Control. If Executive’s employment is terminated by
the Company without Cause or by Executive for Good Reason, and the termination
is in Connection with a Change of Control, then, subject to Section 8(d),
Executive will receive: (i) continued payment of two (2) year’s Base Salary,
less applicable tax withholdings, in accordance with the Company’s normal
payroll policies; (ii) two (2) payments each equal to 100% of Executive’s Target
Annual Incentive for the year in which the termination occurs, less applicable
tax withholdings, paid in two equal annual installments in accordance with the
Company’s normal schedule for the payment of annual cash incentives; (iii) full
vesting with respect to Executive’s then outstanding unvested equity awards
other than performance-based awards; (iv) extension of the exercise period for
all Executive’s outstanding stock options to the earlier of 165 calendar days
from the date of termination or the expiration date of the stock options; and
(v) reimbursement for premiums paid for continued health benefits for Executive
(and any eligible dependents) under the Company’s health plans until the earlier
of (x) eighteen (18) months,
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payable when such premiums are due (provided Executive validly elects to
continue coverage under COBRA), or (y) the date upon which Executive and
Executive’s eligible dependents become covered under similar plans; and
(vi) life insurance as set forth in Section 4(c).
          (c) Voluntary Termination Without Good Reason or Termination for
Cause. If Executive’s employment is terminated voluntarily, including due to
death or Disability, without Good Reason or is terminated for Cause by the
Company, then, except as provided in Section 6, (i) all further vesting of
Executive’s outstanding equity awards will terminate immediately; and (ii) all
payments of compensation by the Company to Executive hereunder will terminate
immediately
          (d) Separation Agreement and Release of Claims. The receipt of any
severance or other benefits pursuant to this Section 8 will be subject to
Executive signing and not revoking a separation agreement and release of claims
appended hereto as Exhibit B. For this purpose, the separation agreement and
release of claims must be signed by Executive and returned to the Company within
the period specified in the agreement and in no event later than two and
one-half (21/2) months following the end of the calendar year in which
Executive’s termination of employment occurs. No severance or other benefits
will be paid or provided until the separation agreement and release agreement
becomes effective and non-revocable.
          (e) No Duty to Mitigate. Executive will not be required to mitigate
the amount of any payment contemplated by this Agreement, nor will any earnings
that Executive may receive from any other source reduce any such payment.
     9. Excise Tax Gross-Up. In the event that the benefits provided for in this
Agreement constitute “parachute payments” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”) and will be subject
to the excise tax imposed by Section 4999 of the Code, then Executive will
receive (i) a payment from the Company sufficient to pay such excise tax, and
(ii) an additional payment from the Company sufficient to pay the federal and
state income and employment taxes and additional excise taxes arising from the
payments made to Executive by the Company pursuant to this sentence. However,
the Company may elect not to make payments under the preceding sentence to the
extent it reasonably determines that (a) the “parachute payments” arise from the
acceleration of options with exercise prices exceeding the price at which the
underlying shares could be sold on the date of the Change in Control and (b) any
payments under the preceding sentence would not significantly benefit Executive.
Unless Executive and the Company agree otherwise in writing, the determination
of Executive’s excise tax liability, if any, and the amount, if any, required to
be paid under this Section 9 will be made in writing by a certified public
accounting firm selected by the Company and reasonably acceptable to Executive
(the “Accountants”). For purposes of making the calculations required by this
Section 9, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. Executive and the Company agree to furnish such information and documents
as the Accountants may reasonably request in order to make a determination under
this Section 9. The Company will bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section 9. Any
payment to Executive under this Section 9 shall be made
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within thirty (30) days following receipt by the Company of the report of the
Accountants setting forth such determination.
     10. Definitions.
          (a) Cause. For purposes of this Agreement, “Cause” will mean:
               (i) Executive’s willful and continued failure to perform the
duties and responsibilities of his position after there has been delivered to
Executive a written demand for performance from the Board which describes in
reasonable detail the basis for the Board’s belief that Executive has not
substantially performed his duties and provides Executive the opportunity to
present to the Board his good faith reasons for not so performing and, if the
Board does not agree with such reasons, with thirty (30) days to take corrective
action;
               (ii) Any act of personal dishonesty taken by Executive in
connection with his responsibilities as an employee of the Company with the
intention or reasonable expectation that such action may result in the
substantial personal enrichment of Executive;
               (iii) Executive’s conviction of, or plea of nolo contendere to, a
felony that the Board reasonably believes has had or will have a material
detrimental effect on the Company’s reputation or business;
               (iv) A breach of any fiduciary duty owed to the Company by
Executive that has a material detrimental effect on the Company’s business or
reputation;
               (v) Executive being found liable in any Securities and Exchange
Commission or other civil or criminal securities law action or entering any
cease and desist order with respect to such action (regardless of whether or not
Executive admits or denies liability); or
               (vi) Executive (A) obstructing or impeding; (B) endeavoring to
influence, obstruct or impede, or (C) failing to materially cooperate with, any
investigation authorized by the Board or any governmental or self-regulatory
entity (an “Investigation”). However, Executive’s failure to waive
attorney-client privilege relating to communications with Executive’s own
attorney in connection with an Investigation will not constitute “Cause”.
          (b) Change of Control. For purposes of this Agreement, “Change of
Control” will mean the occurrence of any of the following events:
               (i) The consummation by the Company of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation;
               (ii) The approval by the stockholders of the Company, or if
stockholder approval is not required, approval by the Board, of a plan of
complete liquidation of
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the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets;
               (iii) Any “person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) becoming the
“beneficial owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company’s then outstanding voting securities; or
               (iv) A change in the composition of the Board within any twelve
(12) month period during the Term and pursuant to a plan in which the proponent
proposes alternative directors to the Board, and as a result of which fewer than
a majority are Incumbent Directors. “Incumbent Directors” will mean directors
who either (A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of those directors whose election or nomination was not in
connection with any transactions described in subsections (i), (ii), or (iii) or
in connection with an actual or threatened proxy contest relating to the
election of directors of the Company.
          (c) Disability. For purposes of this Agreement, “Disability” will mean
Executive’s inability to substantially perform his duties under this Agreement
as a result of incapacity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or to last for a
period of twelve (12) months.
          (d) Good Reason. For purposes of this Agreement, “Good Reason” means
the occurrence of any of the following, without Executive’s express written
consent, provided however, that Executive must provide the Company notice of
Good Reason within sixty (60) days of Executive’s actual knowledge of the
initial existence of one of the following conditions, upon which notice Company
shall then have thirty (30) days in which to remedy the condition, under which
circumstances such Good Reason shall no longer exist.
               (i) A significant reduction of Executive’s authority, duties,
position or responsibilities, relative to Executive authority, duties, position
or responsibility in effect immediately prior to such reduction;
               (ii) A substantial reduction by the Company of the facilities and
perquisites (including office space and location) available to Executive
immediately prior to such reduction.
               (iii) A reduction in Executive’s Base Salary or annual cash
incentive as in effect immediately prior to such reduction other than pursuant
to a reduction that also is applied to substantially all other executive
officers of the Company and which reduction reduces the Base Salary and/or
annual cash incentive by a percentage reduction that is no greater 15%;
               (iv) A material reduction in the kind or level of employee
benefits to which Executive is entitled immediately prior to such reduction with
the result that Executive’s overall benefits package is significantly reduced
other than pursuant to a reduction that is also applied to substantially all
other executive officers of the Company that reduces the level of employee
benefits by a percentage reduction that is no greater that 15%.
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               (v) The relocation of Executive to a facility or location more
then fifty (50) miles from Beijing, China; or
               (vi) The failure of the Company to obtain the assumption of the
Agreement by a successor and an agreement that Executive will retain the same
role and responsibilities in the merged or surviving parent company as he had
prior to the merger under Section 1 of this Agreement or, if more favorable, the
same role and responsibilities that Executive had immediately prior to the
merger.
          (e) In Connection with a Change of Control. For purposes of this
Agreement, a termination of Executive’s employment with the Company is “in
Connection with a Change of Control” if Executive’s employment is terminated
within three (3) months prior or twelve (12) months following a Change of
Control.
     11. Indemnification. Subject to applicable law, Executive will be provided
indemnification to the maximum extent permitted by the Company’s Articles of
Incorporation or Bylaws, including, if applicable, any directors and officers
insurance policies, with such indemnification to be on terms determined by the
Board or any of its committees, but on terms no less favorable than provided to
any other Company executive officer or director and subject to the terms of any
separate written indemnification agreement.
     12. Confidential Information. Executive will execute the Restrictive
Covenant Agreement attached hereto as Exhibit A.
     13. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive’s death, and (b) any successor of the Company. Any such successor of
the Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation, or other business entity which at any time, whether by
purchase, merger, or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement may be assigned or transferred except by will or the laws of descent
and distribution. Any other attempted assignment, transfer, conveyance, or other
disposition of Executive’s right to compensation or other benefits will be null
and void.
     14. Notices. All notices, requests, demands and other communications called
for hereunder will be in writing and will be deemed given (a) on the date of
delivery if delivered personally; (b) one (1) day after being sent overnight by
a well-established commercial overnight service, or (c) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:
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If to the Company:
Attn: Chief Legal and Administrative Officer
3Com Corporation
350 Campus Drive
Marlborough, MA 01752-3064
If to Executive:
at the last residential address known by the Company
With a copy to:
Attn: Linda E. Rappaport, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022
     15. Severability. If any provision hereof becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable, or void, this Agreement
will continue in full force and effect without said provision.
     16. Arbitration.
          (a) Except as provided below, any dispute arising out of or relating
to this Agreement or the breach, termination or validity hereof shall be finally
settled by binding arbitration conducted expeditiously in accordance with the
J.A.M.S./Endispute Streamlined Arbitration Rules and Procedures (the “J.A.M.S.
Rules”). The arbitration shall be governed by the United States Arbitration Act,
9 U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof. The place of arbitration shall
be Boston, Massachusetts.
          (b) The parties covenant and agree that the arbitration shall commence
within 60 days of the date on which a written demand for arbitration is filed by
either party hereto. The parties (or their legal representatives) will promptly
confer to select a single arbitrator mutually acceptable to both parties. The
arbitrator must be a licensed attorney, primarily engaged as a practicing lawyer
in the field of employment law and related litigation for at least ten
(10) years, or primarily engaged in the practice of arbitrating or mediating
executive employment law disputes for at least ten (10) years, and must not have
any existing or prior relationship with the Company or any of its subsidiaries
or affiliates, on the one hand, or Executive, on the other hand. If the parties
are unable to agree upon an arbitrator, one will be selected, meeting the above
criteria, in accordance with the J.A.M.S. Rules. In connection with the
arbitration proceeding, the arbitrator shall have the power to order the
production of documents by each party and any third-party witnesses. In
addition, each party may take up to three (3) depositions as of right, and the
arbitrator may in his or her discretion allow additional depositions upon good
cause shown by the moving party. However, the arbitrator shall not have the
power to order the answering of
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interrogatories or the response to requests for admission. In connection with
any arbitration, each party shall provide to the other, no later than seven
(7) business days before the date of the arbitration, the identity of all
persons that may testify at the arbitration and a copy of all documents that may
be introduced at the arbitration or considered or used by a party’s witness or
expert. The arbitrator’s decision and award shall be made and delivered within
six (6) months of the selection of the arbitrator. The arbitrator’s decision
shall set forth a reasoned basis for any award of damages or finding of
liability. The arbitrator shall not have power to award damages in excess of
actual compensatory damages and shall not multiply actual damages or award
punitive damages or any other damages that are specifically excluded under this
Agreement, and each party hereby irrevocably waives any claim to such damages.
          (c) The parties covenant and agree that they will participate in the
arbitration in good faith. This Section 16 applies equally to requests for
temporary, preliminary or permanent injunctive relief, except that in the case
of temporary or preliminary injunctive relief any party may proceed in court
without prior arbitration for the limited purpose of avoiding immediate and
irreparable harm.
          (d) Each of the parties hereto (i) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction for
the purpose of enforcing the award or decision in any such proceeding,
(ii) hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court, and hereby waives and agrees not to seek any review by any court of
any other jurisdiction which may be called upon to grant an enforcement of the
judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its or his submission to
jurisdiction and its or his consent to service of process by mail is made for
the express benefit of the other party hereto. Final judgment against either
party hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.
     17. Tax Equalization, Legal and Tax Expenses and Home Leave. The Company
shall indemnify and reimburse Executive for tax equalization purposes as set
forth on Exhibit C. The Company will also reimburse Executive up to $15,000 for
reasonable legal and tax advice expenses in connection with the negotiation,
preparation and execution of this Agreement. The Company will also reimburse
Executive for reasonable tax preparation expenses up to an annual cap of
$10,000. Executive shall be entitled to receive reimbursement, annually, for the
cost of one round-trip business class airline ticket on Executive’s reasonable
choice of airline, for Executive, his spouse and one additional family member,
for home leave purposes. Payments with respect to any reimbursement pursuant to
this Section 17 will made on or before the last day of the calendar year
following the year in which the relevant expense is incurred.
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     18. Integration. This Agreement, together with the Restrictive Covenant
Agreement and the forms of equity award grant that describe Executive’s
outstanding equity awards, represents the entire agreement and understanding
between the parties as to the subject matter herein and supersedes all prior or
contemporaneous agreements or plans whether written or oral, including but not
limited to the Company’s Section 16 Officer Severance Plan. No waiver,
alteration, or modification of any of the provisions of this Agreement will be
binding unless in a writing and signed by duly authorized representatives of the
parties hereto. In entering into this Agreement, no party has relied on or made
any representation, warranty, inducement, promise, or understanding that is not
in this Agreement. To the extent that any provisions of this Agreement conflict
with those of any other agreement, including the standard Restrictive Covenant
Agreement to be signed upon Executive’s hire, the bonus plan referred to in
Section 3 and the 2003 Plan and corresponding agreement to be signed by
Executive in conjunction with the terms in this Agreement will prevail.
     19. Waiver of Breach. The waiver of a breach of any term or provision of
this Agreement, which must be in writing, will not operate as or be construed to
be a waiver of any other previous or subsequent breach of this Agreement.
     20. Survival. The Restrictive Covenant Agreement and Sections 6 through 13,
15, 16, 17 through 25 will survive the termination of this Agreement.
     21. Headings. All captions and Section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
     22. Tax Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
     23. Governing Law. This Agreement will be governed by the laws of the
Commonwealth of Massachusetts without regard to its conflict of laws provisions.
     24. Acknowledgment. Executive acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.
     25. (a) Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, if Executive is a “specified employee” within the meaning of
Section 409A of the Code and the final regulations and any guidance promulgated
thereunder (“Section 409A”) at the time of Executive’s termination of employment
(other than due to death), then the severance benefits payable to Executive
under this Agreement, if any, and any other severance payments or separation
benefits payments that may be considered deferred compensation under
Section 409A (together, the “Deferred Compensation Separation Benefits”)
otherwise due to Executive on or within the six (6) month period following
Executive’s termination of employment will accrue during such six (6) month
period and will become payable in a lump sum payment (less applicable
withholding taxes) on the date six (6) months and one (1) day following the date
of Executive’s termination of employment. All subsequent payments, if any, will
be payable in accordance with the payment schedule applicable to each payment or
benefit. Notwithstanding
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anything herein to the contrary, if Executive dies following his or her
termination of employment but prior to the six (6) month anniversary of his or
her date of termination, then any payments delayed in accordance with this
paragraph will be payable in a lump sum (less applicable withholding taxes) to
Executive’s estate within sixty (60) days after the date of Executive’s death
and all other Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or benefit.
          (b) Amendments to this Agreement to Comply with Section 409A. The
provisions of this Agreement are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. The Company and
Executive agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions which are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to Executive under Section 409A and the Company, after
such consultation with Executive, will reform this Agreement or any provision
hereof to maintain to the maximum extent practicable the original intent of the
provisions violating the provisions of Section 409A.
     26. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will
constitute an effective, binding agreement on the part of each of the
undersigned.
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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by a duly authorized officer, as of the day and year written
below.
COMPANY:
3COM CORPORATION

     
/s/ Neal D. Goldman
  Date: April 29, 2008
 
   
By:
   
 
   
EXECUTIVE:
   
 
   
/s/ Robert Y. L. Mao
  Date: April 29, 2008
 
   
 
   
Robert Y.L. Mao
   

SIGNATURE PAGE TO CEO EMPLOYMENT AGREEMENT
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