Exhibit 10.2
3COM CORPORATION
EMPLOYMENT AGREEMENT
     This Employment Agreement (the “Agreement”) is by and between 3Com
Corporation (the “Company) and Ronald A. Sege (“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 President and Chief Operating Officer,
reporting directly to the Chief Executive Officer. 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. Executive’s principal place of employment shall
be in the San Francisco Bay Area with regular travel to Marlborough,
Massachusetts. The period Executive is employed by the Company under this
Agreement is referred to herein as the “Employment Term.”
          (b) Board Membership. Executive will be appointed to serve as a member
of the Board as of the Effective Date. 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 each of the Company’s 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 of Directors of
the Company (the “Board”) (which approval will not be unreasonably withheld);
provided, however, that Executive may, 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 employment with his
current employer (or any other previous employer) or his membership on any
boards of directors.
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          (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 the 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 $500,000.00 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. During the Employment
Term, Executive’s target annual incentive will be not less than 80% of Base
Salary (“Target Annual Incentive”), with a maximum potential opportunity of 200%
of the Target Annual Incentive, subject to the terms of the bonus plan approved
by the Compensation Committee of the Board. 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 second half of 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 of
the fiscal year and a denominator equal to 182). For fiscal year 2009,
Executive’s Target Annual Incentive shall be guaranteed, 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).
          (c) Equity
               (i) Executive will be granted nonstatutory stock options to
purchase two million (2,000,000) shares of Company common stock (the
“Stand-Alone Stock Option Grant”). 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 the
Executive commences employment with the Company. The Stand-Alone Stock Option
Grant will be granted under a non-stockholder approved arrangement outside of
any Company equity plan pursuant to
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Nasdaq’s “inducement exception.” Executive agrees that the granting of the
Stand-Alone Grant is an inducement material to his decision to enter into this
Agreement and accept employment with the Company. Subject to the provisions of
this Agreement, the terms and conditions of the Stand-Alone Stock Option Grant
will be identical to those of the Company’s 2003 Stock Option Plan, as amended
(the “2003 Plan) (except that they will not be granted under a Company equity
plan) and 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.
               (ii) Executive will be granted one million (1,000,000) shares of
restricted stock (the “Stand-Alone Restricted Stock Grant”) on the first Tuesday
in the month immediately succeeding the month in which the Executive commences
employment with the Company. Subject to the provisions of this Agreement, the
terms and conditions of the Stand-Alone Restricted Stock Grant will be identical
to those of the 2003 Plan (except that they will not be granted under a Company
equity plan), and will 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.
     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.
          (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 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 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.
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     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. The Executive agrees that
during the Employment Term and for twelve (12) months thereafter, Executive will
not solicit any employee of the Company for employment other than at the Company
or one of its subsidiaries or affiliates, and that for the Employment Term will
not directly or indirectly engage in, have any ownership interest in or
participate in any entity that competes with the Company in any substantial
business of the Company or any business reasonably expected to become a
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. During the Employment
Term and for twelve (12) months thereafter, members of the Board and the Chief
Executive staff will not knowingly and materially publicly disparage, criticize,
or otherwise make any derogatory statements regarding 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 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.
          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
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options to the earlier of 165 calendar days from the date of termination or the
expiration date of the stock options; (iv) 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 (v) life insurance as set forth in
Section 4(c).
          (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;
(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 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 the 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
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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 the 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 the 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 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;
               (iv) A breach of any fiduciary duty owed to the Company by
Executive;
               (v) Executive being found individually 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);
               (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
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failure to waive attorney-client privilege relating to communications with
Executive’s own attorney in connection with an Investigation will not constitute
“Cause”; or
               (vii) Executive’s disqualification or bar by any U.S.
governmental or self-regulatory authority from serving in the capacity
contemplated by this Agreement or Executive’s loss of any U.S. governmental or
self-regulatory license that is reasonably necessary for Executive to perform
his responsibilities to the Company under this Agreement, if (A) the
disqualification, bar or loss continues for more than thirty (30) days, and
(B) during that period the Company uses its good faith efforts to cause the
disqualification or bar to be lifted or the license replaced. While any
disqualification, bar or loss continues during Executive’s employment, Executive
will serve in the capacity contemplated by this Agreement to whatever extent
legally permissible and, if Executive’s employment is not permissible, Executive
will be placed on leave (which will be paid to the extent legally permissible).
          (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 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.
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          (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 30 days of the initial existence of one of the above
conditions, upon which notice Company shall then have 30 days in which to remedy
the condition, under which circumstances Company shall not be required to pay
any amounts specified in Section 8 of this Agreement
               (i) A material diminution in Executive’s authority, duties or
responsibilities in effect immediately prior to such reduction;
               (ii) A material diminution in Executive’s Base Salary or Target
Annual 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%;
               (iii) A material diminution 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%;
               (iv) The relocation of Executive to a facility or location
outside the United States;
               (v) 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; or
               (vi) The failure of the Company to appoint Executive as its Chief
Executive Officer by April 30, 2011, or the appointment of another as Chief
Executive Officer after the Effective Date. For purposes of this
Section 10(d)(vi) only, Executive’s severance benefits under Section 8(a) shall
be enhanced as follows: in the event of the failure of the Company to appoint
Executive as Chief Executive Officer by April 30, 2011 or in the event of the
appointment of another as Chief Executive Officer after April 29, 2010, the
vesting of Executive’s then outstanding, unvested equity awards, other than
performance-based awards, will be accelerated in full; in the event of the
appointment of another as Chief Executive Officer prior to April 30, 2010, the
vesting of half of the outstanding, unvested equity of each grant to Executive,
other than grants of performance-based awards, will be accelerated in full.
          (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
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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 Company’s standard
form of confidential information, intellectual property and non-solicitation
agreement, appended hereto as Exhibit A (the “Restrictive Covenant Agreement”).
     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:
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:
     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.
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     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 San Francisco, California.
          (b) The parties covenant and agree that the arbitration shall commence
within 90 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. The arbitrator shall have the
power to decide any motions brought by either party to the party, including
motions for summary judgment and/or adjudication, motions to dismiss, and
demurrers, prior to any arbitration hearing. The Company shall pay for any
administrative or hearing fees charged by the arbitrator or JAMS except that
Executive shall bay the first $215.00 of any filing fees associated with any
arbitration he initiates. The arbitrator shall administer the arbitration in a
manner consistent with J.A.M.S. rules regarding employment disputes, and the
parties shall be allowed to engage in any discovery allowed under the California
Code of Civil Procedure that the arbitrator deems appropriate. 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 be in writing and set forth a reasoned basis for any award of damages or
finding of liability.
          (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
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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.
          (e) The agreement to arbitrate does not prohibit Executive from
pursuing an administrative claim with a local, state, or federal administrative
body such as the Department of Fair Employment and Housing, the Equal Employment
Opportunity Commission or the Workers Compensation Board. This agreement does,
however, preclude Executive from pursuing Court action regarding any such claim.
     17. 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 terms in this Agreement will
prevail.
     18. 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.
     19. Survival. The Restrictive Covenant Agreement and Sections 6 through 13,
15 through 24 will survive the termination of this Agreement.
     20. Headings. All captions and Section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
     21. Tax Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
     22. Governing Law. This Agreement will be governed by the laws of the State
of California, without regard to its conflict of laws provisions.
     23. 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
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has carefully read and fully understands all the provisions of this Agreement,
and is knowingly and voluntarily entering into this Agreement.
     24. (a) Payment of Severance Benefits . Notwithstanding anything to the
contrary in this Agreement, if Executive is a “specified employee” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and
the final regulations and any guidance promulgated thereunder (“Section 409A
Authority”) at the time of Executive’s termination of employment (other than due
to death), then any severance benefits payable to Executive under this
Agreement, and any other severance payments or separation benefits payments that
constitute a “deferral of compensation” under Section 409A Authority (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
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 as soon as administratively practicable 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. Each payment of severance benefits to Executive under this Agreement
that is made on or before March 14 of the calendar year following Executive’s
termination of employment and is intended to not constitute a “deferral of
compensation” by virtue of the “short term deferral” rule of Treasury
Regulations Section 1.409A-1(b)(4) shall constitute a “separate payment” for
purposes of application of that rule.
          (b) Amendments to this Agreement with Respect to Section 409A. The
severance payments and other benefits provided under this Agreement are intended
to not constitute a “deferral of compensation” under Section 409A Authority to
the extent possible, or, to the extent not so possible, to comply with the
requirements of Sections 409A(a)(2),(3) and (4) of the Code so that none of the
severance payments and benefits to be provided hereunder will be subject to the
income inclusion, additional tax or interest provisions of Section 409A(a)(1),
and any ambiguities herein will be interpreted in accordance with that intent
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
interest or income recognition prior to actual payment to Executive under
Section 409A(a)(1) .
     25. 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/ Ronald A. Sege
  Date: April 29, 2008    
 
Ronald A. Sege
       

SIGNATURE PAGE TO COO EMPLOYMENT AGREEMENT

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