Exhibit 10.12

 

3Com Corporation

Section 16 Officer Severance Plan

Plan and Summary Plan Description

 

Amended and Restated Effective June 22, 2005

 

This Summary Plan Description and Plan Document (“Summary Plan Description”) is
for all employees of 3Com Corporation (“3Com” or the “Company”) who are eligible
under the terms of the 3Com Section 16 Officer Severance Plan (the “Section 16
Plan”). All rights to participate in and receive benefits from the Section 16
Plan are governed solely by the terms and conditions of this Summary Plan
Description. This Summary Plan Description supercedes and replaces all prior
plan documents and summary plan descriptions governing the Section 16 Plan.

 

EFFECTIVE DATE

The Section 16 Plan is hereby amended and restated effective June 22, 2005.

 

ELIGIBILITY TO PARTICIPATE

Participation in the Section 16 Plan is restricted to 3Com employees who have
been designated by the Company as being subject to the reporting requirements of
Section 16 of the Securities Exchange Act of 1934 (“Officers”).

 

ELIGIBILITY TO RECEIVE SEVERANCE BENEFITS

Officers who are employed by the Company are eligible to receive benefits upon
the termination of their employment with 3Com under following circumstances: (a)
an involuntarily termination without Cause; or (b) a Voluntary Termination for
Good Reason, provided that the Officer signs and does not revoke an agreement
including, but not limited to, a release of claims against the Company, its
affiliates and representatives. The form and language of the release agreement
shall be determined by the Company in its sole discretion. Former Officers are
not eligible to participate in the Section 16 Plan.

 

SEVERANCE BENEFITS

Officers who are eligible to receive benefits under the Section 16 Plan will be
entitled to receive the following severance benefits:

 

•

One (1) year of annualized base salary, the payment to be made through the
Company’s regular payroll practices in a lump sum, subject to all legally
required taxes and withholdings.

•

One (1) year of annualized target bonus, the payment to be made through the
Company’s regular payroll practices in a lump sum, subject to all legally
required taxes and withholdings.

•

Equity Compensation

-

One (1) year of accelerated vesting of outstanding stock options, restricted
stock, and restricted stock units issued to the Officer that are subject to
time-based vesting;

-

Accelerated vesting of twenty-five percent (25%) of each grant of stock options,
restricted stock, and restricted stock units issued to the Officer that are not
subject to time-based vesting (other than cliff vesting);

-

Extension of the exercise period for vested stock options issued to the Officer
to the earlier of: (i) one (1) year from the Termination Date; or (ii) the
original term of the stock option grant.

 

 

•

Continuation of Company-sponsored health, dental, and vision insurance coverage
pursuant to the Consolidated Budget Reconciliation Act of 1985 (“COBRA”) at the
same level of coverage as was provided to the Officer immediately prior to the
Termination Date, with such coverage fully paid for by the Company until the
earlier of (i) one (1) year from the Termination Date, or (ii) the date upon
which the Officer becomes eligible for coverage under another employer’s group
health, dental, or vision insurance plan(s). To be eligible for continuation of
Company-sponsored coverage, an Officer must be actively enrolled in the
Company-sponsored insurance plan as of the Termination Date and must elect
coverage continuation pursuant to the COBRA materials issued by or on behalf of
the Company upon termination. For purposes of Title X of COBRA, the date of the
“qualifying event” for the Officer and his/her covered dependents shall be the
Termination Date, and each month of Company-sponsored coverage continuation
provided hereunder shall offset a month of coverage continuation otherwise due
under COBRA. Upon the expiration of the one (1) year period, the Officer will be
required to pay 102% of the premium to continue Company-sponsored coverage. Any
continuation of Company-sponsored coverage shall be governed by COBRA and the
terms and conditions of the applicable plan documents.

•

Conversion of the Officer’s basic term life insurance in effect immediately
prior to the Termination Date to continue coverage until the earlier of (i) one
(1) year from the Termination Date, or (ii) the date upon which the Officer
becomes eligible for coverage under another employer’s life insurance plan.

 

All other compensation (including, without limitation, salary and commissions)
and employee benefits (including, without limitation, short-term and long-term
disability insurance, Paid Time Off accrual, and vesting of equity compensation
except as provided for herein) will cease on the Officer’s termination Date.
Payments under the Section 16 Plan will not be subject to 401(k) or Employee
Stock Purchase Plan (ESPP) deductions. Except as provided herein, all equity
compensation grants are subject to the terms and conditions of the applicable
plan document(s).

 

DEFINITIONS

“Cause” shall mean (i) an act of theft, embezzlement or intentional dishonesty
by the Officer in connection with his/her employment; (ii) the Officer being
convicted of a felony, (iii) a willful act by the Officer which constitutes
gross misconduct and which is injurious to the Company, or (iv) following
delivery to the Officer of a written demand for performance from the Company
which describes the basis for the Company’s reasonable belief that the Officer
has not substantially performed his/her duties, continued violations by the
Officer’s obligations to the Company which are demonstrably willful and
deliberate on the Officer’s part.

 

“Termination Date” shall mean the Officer’s last date of employment with 3Com
Corporation.

 

“Voluntary Termination for Good Reason” shall mean the Officer’s voluntarily
resignation after the occurrence of any of the following events without the
Officer’s consent: (i) a material reduction of the Officer’s material duties or
title, relative to the Officer’s material duties or title as in effect
immediately prior to such reduction; (ii) a material reduction by the Company in
the base salary of the Officer as in effect immediately prior to such reduction,
other than a reduction generally applicable to other Officers of the Company; or
(iii) the permanent relocation of the Officer to a work location more than fifty
(50) miles from the Officer’s then present work location; provided, however,
that no grounds for Voluntary Termination for Good Reason shall exist hereunder
unless the Officer provides 3Com with thirty (30) days’ advance written notice
of his/her resignation, specifying the purported grounds for the Voluntary
Termination for Good Reason, and provides the Company with the opportunity to
cure the above-referenced event(s) on which the resignation based.

 

 

 

FORM OF PAYMENT

The severance payments provided for herein shall be paid through the Company’s
regular payroll practices, subject to all applicable taxes and withholdings, no
later than thirty (30) days following the effective date of an Officer’s release
agreement, provided that the Officer has not revoked his/her signature to the
release agreement and complied with all terms and conditions thereof.

 

FUNDING

Severance benefits shall be paid solely out of 3Com’s general assets. 3Com shall
not be required to fund or otherwise provide for the payment of benefits
provided hereunder in any other manner.

 

CLAIMS AND REVIEW PROCEDURES

If an Officer believes that he/she is entitled to a benefit under the Section 16
Plan, or a benefit in an amount greater than he/she has received, the Officer
may file a claim by writing to the Section 16 Plan Administrator. The Section 16
Plan Administrator is the named fiduciary that has the discretionary power and
authority to act with respect to any appeal from a denial of a claim for
benefits under the Section 16 Plan by performing a full and fair review of the
denial, and such actions shall be final and binding on all persons. Benefits
under the Section 16 Plan shall be payable only if the Section 16 Plan
Administrator determines, in its sole discretion, that an eligible Officer is
entitled to them. Any claim must be filed no later than forty-five (45) days
after the Officer’s Termination Date.

 

Initial Claim. The Section 16 Plan Administrator will notify the Officer in
writing within ninety (90) days (or 180 days if special circumstances require an
extension of time for processing the claim) of receipt of the claim as to
whether the claim is granted or denied. Note that if an extension is necessary,
the Section 16 Plan Administrator will provide the Officer with written notice
of the extension (including the circumstances requiring extension and date by
which a decision is expected to be rendered) before the initial ninety (90) day
period expires. If the claim is denied, the Officer will be given (1) specific
reasons for the denial, (2) specific reference to the Section 16 Plan provisions
on which the denial is based, (3) a description of any information or material
necessary to support the claim and an explanation of why such information or
material is necessary, (4) an explanation of the Section 16 Plan’s claim appeal
procedure (including a statement of the Officer’s right to bring a civil action
under the Employee Retirement Income Security Act of 1974 (“ERISA”) following a
denial of the claim upon appeal), and (5) a statement that the Officer is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of all documents, records or other information relevant (as defined by
Department of Labor regulation section 2560.503-1(m)) to the claim.

 

Appeals. If the claim is denied, the Officer has sixty (60) days after notice of
the denial to file a written appeal with the Section 16 Plan Administrator.
During the review process, the Officer has the right to submit written comments,
documents, records, and other information relating to the claim for benefits,
which will be considered without regard to whether such items were considered in
the initial benefit determination. Also, the Officer may, upon request and free
of charge, have reasonable access to, and copies of, all documents, records and
other information relevant (as defined by Department of Labor regulation section
2560.503-1(m)) to the claim for benefits.

 

The Section 16 Plan Administrator will notify the Officer in writing within
sixty (60) days (or 120 days if special circumstances require an extension of
time for processing the appeal) of receipt of the appeal as to its decision on
review, unless the Section 16 Plan Administrator determines that special
circumstances exist requiring an extension of time. If the Section 16 Plan
Administrator determines that an extension is necessary, the Section 16 Plan
Administrator will provide the Officer with written notice (including the
circumstances requiring the extension and date by which a decision is expected
to be rendered) before the initial sixty (60) day period expires.

 

 

If the Section 16 Plan Administrator denies the appeal, it will provide a
written denial of the claim upon appeal. The written denial shall include the
specific reason or reasons for the denial, specific references to the Section 16
Plan provisions on which the denial is based, a statement that the Officer is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of all documents, records or other information relevant (as defined in
Department of Labor regulation section 2560.503-1(m)) to the claim, and a
statement of the Officer’s right to bring an action under Section 502(a) of
ERISA.

 

All determinations, interpretations, rules, and decisions of the Section 16 Plan
Administrator or its delegate shall be conclusive and binding upon all persons
having or claiming to have any interest or right under the Section 16 Plan and
shall be given deference in any judicial or other proceeding.

 

Exhaustion of Claims Procedures. In no event shall an Officer or any other
person be entitled to challenge a decision of the Section 16 Plan Administrator
in court or in any other administrative proceeding unless and until the claim
and appeal procedures described above have been fully complied with and
exhausted.

 

ADMINISTRATION

The Section 16 Plan Administrator administers the Section 16 Plan. The Section
16 Plan Administrator is exclusively authorized to interpret the provisions of
this Summary Plan Description. The Section 16 Plan Administrator’s
interpretation and/or application of any term or provision of the Section 16
Plan shall be final and binding. The Section 16 Plan Administrator shall have
full and unfettered authority and responsibility for administration of the
Section 16 Plan, including the discretionary authority to determine eligibility
for benefits and amounts of benefit entitlements and to interpret the terms of
the Section 16 Plan.

 

AMENDMENT AND TERMINATION

The Company reserves the right to amend or terminate the Section 16 Plan at any
time, with or without notice.

 

Information Required By ERISA:

 

Plan Name

3Com Section 16 Officer Severance Benefit Plan

 

Plan Sponsor.

 

3Com Corporation

350 Campus Drive

Marlborough, MA 01752-3064

 

Plan Administrator

The Section 16 Plan Administrator shall be the Compensation Committee of the
3Com Corporation Board of Directors. Communications with the Section 16 Plan
Administrator should be in writing and addressed to:

 

Senior Vice President, Human Resources

3Com Corporation

350 Campus Drive

Marlborough, MA 01752-3064

 

 

 

Type of Plan

The Section 16 Plan is a welfare plan providing for severance benefits.

 

Employer Identification Number

The 3Com Employer Identification Number is 94-2605794. When writing about the
Section 16 Plan, an Officer should include this number.

 

Plan Number

For the purpose of identification, 3Com has assigned the Section 16 Plan the
number 417. All communications concerning the Section 16 Plan should include
this reference number.

 

Service of Legal Process

Service of legal process may be made on the Section 16 Plan Administrator at the
address above.

 

ENTIRE PLAN; AMENDMENTS

This Summary Plan Description contains all the terms, conditions and benefits
relating to the Section 16 Plan. No employee, officer, or director of the
Company has the authority to alter, vary or modify the terms of the Section 16
Plan, other than by means of an authorized written amendment to the Section 16
Plan. No verbal or written representations contrary to the terms of the Section
16 Plan and its written amendments shall be binding upon the Section 16 Plan,
the Section 16 Plan Administrator or the Company.

 

NO CONTRACT OF EMPLOYMENT

Nothing herein is intended to or shall be considered a contract of employment or
for any period of employment or a guarantee of future employment with the
Company.

 

NO ASSIGNMENT OF RIGHTS

No eligible Officer shall have the right to assign, delegate or otherwise
transfer, either in full or in part, any of his/her rights or obligations under
the Section 16 Plan and any such assignment, delegation or other such transfer
shall be void.

 

APPLICABLE LAW; VENUE

Except where preempted by ERISA, the Section 16 Plan shall be construed in
accordance with, and all disputes hereunder shall be governed by, the laws of
the Commonwealth of Massachusetts without regard to its conflict of laws rules.
All legal actions arising under or relating to the Section 16 Plan shall be
subject to the jurisdiction and venue of the United States District Court for
the District of Massachusetts sitting in Boston, Massachusetts.

 

ERISA RIGHTS  

If you are an eligible Officer who is a participant in the Section 16 Plan, you
are entitled to certain rights and protections under ERISA.

 

Receive Information About Your Plan and Benefits. ERISA provides that you are
entitled to:

(1)

Examine, without charge, at the office of the Section 16 Plan Administrator or
its delegate all Section 16 Plan documents, including copies of any documents
filed by the Section 16 Plan with the U.S. Department of Labor, such as Section
16 Plan descriptions.

(2)

Obtain copies of all Section 16 Plan documents and other Section 16 Plan
information upon written request to the Section 16 Plan Administrator. The
Section 16 Plan Administrator may impose a reasonable charge for the copies.

 

(3)

Receive a copy of the Section 16 Plan’s financial report, if any. The Section 16
Plan Administrator may be required by law to furnish each participant with a
copy of the summary annual report.

 

Prudent Actions By Fiduciaries. In addition to creating rights for the Section
16 Plan participants, ERISA imposes duties upon the people who are responsible
for the operation of the Section 16 Plan. The people who operate the Section 16
Plan, called “fiduciaries” of the Section 16 Plan, have a duty to do so
prudently and in the interest of you and other Section 16 Plan participants and
beneficiaries.

 

No one may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a benefit or exercising your rights under ERISA.

 

Enforce Your Rights. If your claim for a Section 16 Plan benefit is denied or
ignored, in whole or in part, you have a right to know why this was done, to
obtain copies of documents relating to the decision without charge, and to
appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Section 16 Plan and do not receive
them within thirty (30) days, you may file suit in a federal court. In such
case, the court may require the Section 16 Plan Administrator to provide the
materials and pay you up to $110 a day until you receive the materials, unless
the materials were not sent because of reasons beyond the control of the Section
16 Plan Administrator.

 

If you have a claim for a benefit that is denied or ignored, in whole or in
part, you may file suit in a state or federal court. If it should happen that
Section 16 Plan fiduciaries misuse the Section 16 Plan’s money, or if you are
discriminated against for asserting your rights, you may seek assistance from
the U.S. Department of Labor or you may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If you are successful,
the court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds your claim is frivolous.

 

Assistance With Your Questions. If you have questions about the statements made
in this summary or your rights under ERISA, you should contact the Section 16
Plan Administrator or the nearest Area Office of the Employee Benefits Security
Administration, U.S. Department of Labor, listed in your telephone directory, or
the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits
Administration, U.S. Department of Labor, 200 Constitution Avenue, Washington,
D.C. 20210.