##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended August 29, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from       to
 Commission File No. 0-12867
 
 3COM CORPORATION
 (Exact name of registrant as specified in its charter)
 Delaware
    
    94-2605794(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)350 Campus DriveMarlborough, Massachusetts
    
    01752(Address of principal executive offices)
    
    (Zip Code)
 (508) 323-1000
 N/A
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



3COM CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED AUGUST 29, 2008
TABLE OF CONTENTS
 PagePART I.
    
    FINANCIAL INFORMATION
    
    
    1Item 1.
    
    Financial Statements
    
    
    1Condensed Consolidated Statements of Operations (unaudited)Three Months Ended August 31, 2008 and 2007
    
    
    1Condensed Consolidated Balance Sheets (unaudited)August 31 and May 31, 2008
    
    
    2Condensed Consolidated Statements of Cash Flows (unaudited)Three Months Ended August 31, 2008 and 2007
    
    
    3Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    17Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    26PART II.
    
    OTHER INFORMATION
    
    
    27Item 1.
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 6.
    
    Exhibits
    
    
    40SIGNATURES
    
    
    
    
    42EXHIBITS
    
    
    
    
    43EX-10.4 Agreement dated and effective as of July 11, 2008EX-10.5 Gigabit Technology License Agreement dated and effective as of July 11, 2008EX-10.6 Parallel Tasking Technology License Agreement dated and effective as of July 11, 2008EX-31.1 Section 302 Certification of Principal Executive OfficerEX-31.2 Section 302 Certification of Principal Financial OfficerEX-32.1 Section 906 Certification of Chief Executive Officer and Chief Financial Officer




---



##### Table of Contents








---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 3COM CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  Three Months EndedAugust 31,(In thousands, except per share data)
    
    2008
    
    
    2007Sales
    
    $
    342,650
    
    
    $
    319,434Cost of sales
    
    
    153,023
    
    
    
    170,498Gross profit
    
    
    189,627
    
    
    
    148,936Operating expenses (income):Sales and marketing
    
    
    86,282
    
    
    
    74,404Research and development
    
    
    45,747
    
    
    
    52,310General and administrative
    
    
    27,054
    
    
    
    21,478Amortization
    
    
    25,164
    
    
    
    26,006Patent dispute resolution
    
    
    (70,000
    )
    
    
    Restructuring charges
    
    
    1,997
    
    
    
    425Operating expenses, net
    
    
    116,244
    
    
    
    174,623Operating income (loss)
    
    
    73,383
    
    
    
    (25,687
    )Interest expense, net
    
    
    (1,251
    )
    
    
    (3,567
    )Other income, net
    
    
    12,871
    
    
    
    12,411Income (loss) before income taxes
    
    
    85,003
    
    
    
    (16,843
    )Income tax provision
    
    
    (5,166
    )
    
    
    (1,811
    )Net income (loss)
    
    $
    79,837
    
    
    $
    (18,654
    )Basic and diluted net income (loss) per share
    
    $
    0.20
    
    
    $
    (0.05
    )Shares used in computing per share amounts:Basic
    
    
    402,889
    
    
    
    397,041Diluted
    
    
    404,072
    
    
    
    397,041
  1




---



##### Table of Contents



3COM CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  August 31,
    
    
    May 31 ,(In thousands)
    
    2008
    
    
    2008ASSETSCurrent assets:Cash and equivalents
    
    $
    541,428
    
    
    $
    503,644Notes receivable
    
    
    88,100
    
    
    
    65,116Accounts receivable, less allowance
for doubtful accounts of $12,195 and
$12,253 respectively
    
    
    143,135
    
    
    
    116,281Inventories
    
    
    108,376
    
    
    
    90,831Other current assets
    
    
    35,584
    
    
    
    34,033Total current assets
    
    
    916,623
    
    
    
    809,905Property and equipment, less accumulated
depreciation and amortization of $206,611
and $205,835 respectively
    
    
    54,258
    
    
    
    54,314Goodwill
    
    
    609,297
    
    
    
    609,297Intangible assets, net
    
    
    254,296
    
    
    
    278,385Deposits and other assets
    
    
    22,727
    
    
    
    23,229Total assets
    
    $
    1,857,201
    
    
    $
    1,775,130LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    95,391
    
    
    $
    90,280Current portion of long-term debt
    
    
    88,000
    
    
    
    48,000Accrued liabilities and other
    
    
    341,108
    
    
    
    366,181Total current liabilities
    
    
    524,499
    
    
    
    504,461Deferred taxes and long-term obligations
    
    
    30,696
    
    
    
    22,367Long-term debt
    
    
    213,000
    
    
    
    253,000Stockholders equity:Preferred stock, $0.01 par value,
10,000 shares authorized; none
outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value,
990,000 shares authorized; shares
issued: 405,891 and 405,656
respectively
    
    
    2,359,869
    
    
    
    2,353,688Retained deficit
    
    
    (1,325,409
    )
    
    
    (1,405,247
    )Accumulated other comprehensive income
    
    
    54,546
    
    
    
    46,861Total stockholders equity
    
    
    1,089,006
    
    
    
    995,302Total liabilities and stockholders equity
    
    $
    1,857,201
    
    
    $
    1,775,130
  2




---



##### Table of Contents



3COM CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Three Months EndedAugust 31,(In thousands)
    
    2008
    
    
    2007Cash flows from operating activities:Net income (loss)
    
    $
    79,837
    
    
    $
    (18,654
    )Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    33,131
    
    
    
    34,666Stock-based compensation expense
    
    
    6,442
    
    
    
    3,863Loss on property and equipment disposals
    
    
    13
    
    
    
    49Gain on investments, net
    
    
    
    
    
    
    (185
    )Deferred income taxes
    
    
    (3,377
    )
    
    
    (845
    )Changes in assets and liabilities:Accounts and notes receivable
    
    
    (50,684
    )
    
    
    (17,152
    )Inventories
    
    
    (18,566
    )
    
    
    4,697Other assets
    
    
    (1,483
    )
    
    
    2,945Accounts payable
    
    
    6,941
    
    
    
    (4,001
    )Other liabilities
    
    
    (12,940
    )
    
    
    (64,390
    )Net cash provided by (used in) operating activities
    
    
    39,314
    
    
    
    (59,007
    )Cash flows from investing activities:Proceeds from maturities and sales of investments
    
    
    
    
    
    
    442Purchases of property and equipment
    
    
    (7,598
    )
    
    
    (5,607
    )Proceeds from sale of property and equipment
    
    
    68
    
    
    
    645Net cash used in investing activities
    
    
    (7,530
    )
    
    
    (4,520
    )Cash flows from financing activities:Issuances of common stock
    
    
    286
    
    
    
    837Repurchases of common stock
    
    
    (543
    )
    
    
    (183
    )Net cash (used in) provided by financing activities
    
    
    (257
    )
    
    
    654Effect of exchange rate changes on cash and equivalents
    
    
    6,257
    
    
    
    4,702Net change in cash and equivalents during period
    
    
    37,784
    
    
    
    (58,171
    )Cash and equivalents, beginning of period
    
    
    503,644
    
    
    
    559,217Cash and equivalents, end of period
    
    $
    541,428
    
    
    $
    501,046
  3




---



##### Table of Contents



3COM CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 1. BASIS OF PRESENTATION
   Recently issued accounting pronouncements
    4




---



##### Table of Contents



NOTE 2. STOCK-BASED COMPENSATION
   5




---



##### Table of Contents



Three Months EndedAugust 31,2008
    
    2007Employee stock options:Volatility
    
    
    48.8
    %
    
    
    40.2
    %Risk-free interest rate
    
    
    3.1
    %
    
    
    4.8
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Expected life (years)
    
    
    4.0
    
    
    
    3.8Weighted average grant date fair value
    
    $
    1.02
    
    
    $
    1.50Restricted stock awards:Weighted average grant date fair value
    
    $
    2.48
    
    
    $
    4.28Restricted stock units:Weighted average grant date fair value
    
    $
    2.56
    
    
    $
    4.07Employee stock purchase plan:
    
    
    *
    
    
    
    *
 
 *-
    
    No grants during the period  Three Months EndedAugust 31,2008
    
    
    2007Cost of sales
    
    $
    758
    
    
    $
    384Sales and marketing
    
    
    1,758
    
    
    
    975Research and development
    
    
    884
    
    
    
    721General and administrative
    
    
    3,042
    
    
    
    1,783Stock-based compensation expense before tax
    
    $
    6,442
    
    
    $
    3,863
 Stock Options
 WeightedaverageNumber of
    
    
    exerciseshares
    
    
    priceOutstanding May 31, 2008
    
    
    43,925
    
    
    $
    4.98Granted
    
    
    300
    
    
    
    2.48Exercised
    
    
    (191
    )
    
    
    1.50Cancelled
    
    
    (3,728
    )
    
    
    5.47Outstanding August 31, 2008
    
    
    40,306
    
    
    $
    4.93
 6




---



##### Table of Contents



WeightedWeighted
    
    AverageNumber of
    
    average
    
    Remaining
    
    AggregateShares
    
    Grant-Date
    
    Contractual
    
    Intrinsic Value(in thousands)
    
    Fair Value
    
    Life (in years)
    
    (in thousands)Vested and expected
to vest at August
31, 2008
    
    
    36,028
    
    
    $
    5.12
    
    
    
    3.1
    
    
    $
    1,682
 Restricted Stock Awards.
 WeightedNumber of
    
    
    averageShares
    
    
    Grant-Date(unvested)
    
    
    Fair ValueOutstanding May 31, 2008
    
    
    3,095
    
    
    $
    3.43Granted
    
    
    75
    
    
    
    2.48Vested
    
    
    (305
    )
    
    
    4.19Forfeited
    
    
    (420
    )
    
    
    3.80Outstanding August 31, 2008
    
    
    2,445
    
    
    $
    3.24
  Restricted Stock Units.
 Number ofShares(unvested)Outstanding May 31, 2008
    
    
    5,744Granted
    
    
    1,743Vested
    
    
    (673
    )Forfeited
    
    
    (326
    )Outstanding August 31, 2008
    
    
    6,488
  7




---



##### Table of Contents



Employee Stock Purchase Plan.
 NOTE 3: FAIR VALUE
 Fair Value Hierarchy
  Level 1 
 Level 2  .
 Level 3 
   Assets Measured at Fair Value on a Recurring Basis
  Fair Value Measurements at Reporting Date UsingQuoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableInstruments
    
    
    Inputs
    
    
    Inputs
    
    
    Total(In thousands)
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    BalanceAssetsCash equivalents:Time deposits
    
    $
    
    
    
    $
    320,506
    
    
    $
    
    
    
    $
    320,506Money market fund deposits
    
    
    210,588
    
    
    
    
    
    
    
    
    
    
    
    210,588Total assets measured at fair value
    
    $
    210,588
    
    
    $
    320,506
    
    
    $
    
    
    
    $
    531,094
 8




---



##### Table of Contents



NOTE 4. REALTEK PATENT DISPUTE RESOLUTION
    NOTE 5. RESTRUCTURING CHARGES
   
    
    reduced our workforce; and
    
    continued efforts to consolidate and dispose of excess facilities
   Fiscal 2008 and 2009 Actions
  EmployeeSeparationExpense
    
    
    TotalBalance as of May 31, 2008
    
    $
    687
    
    
    $
    687Provisions
    
    
    1,859
    
    
    
    1,859Payments and non-cash charges
    
    
    (1,116
    )
    
    
    (1,116
    )Balance as of August 31, 2008
    
    $
    1,430
    
    
    $
    1,430
  9




---



##### Table of Contents



Fiscal 2004 through 2007 Actions
  Employee
    
    
    Facilities-
    
    
    OtherSeparation
    
    
    related
    
    
    RestructuringExpense
    
    
    Charges
    
    
    Costs
    
    
    TotalBalance as of May 31, 2008
    
    $
    28
    
    
    $
    687
    
    
    $
    
    
    
    $
    715Provisions (benefits)
    
    
    (1
    )
    
    
    125
    
    
    
    14
    
    
    
    138Payments and non-cash charges
    
    
    11
    
    
    
    (252
    )
    
    
    (14
    )
    
    
    (255
    )Balance as of August 31, 2008
    
    $
    38
    
    
    $
    560
    
    
    $
    
    
    
    $
    598
   NOTE 6. INCOME TAXES
    NOTE 7. COMPREHENSIVE INCOME (LOSS)
  Three Months EndedAugust 31,2008
    
    
    2007Net income (loss)
    
    $
    79,837
    
    
    $
    (18,654
    )Other comprehensive income:Net unrealized loss on investments
    
    
    
    
    
    
    (210
    )Change in accumulated translation adjustments
    
    
    7,685
    
    
    
    6,838Total comprehensive income (loss)
    
    $
    87,522
    
    
    $
    (12,026
    )
 10




---



##### Table of Contents



NOTE 8. NET INCOME (LOSS) PER SHARE
  Three Months Ended August 31,(in thousands except per share data)
    
    2008
    
    
    2007Determination of shares:Weighted average shares outstanding
    
    
    402,889
    
    
    
    397,041Assumed conversion of dilutive stock options and restricted stock (awards and units)
    
    
    1,183
    
    
    
    Diluted weighted average shares outstanding
    
    
    404,072
    
    
    
    397,041Basic earnings (loss) per share
    
    $
    0.20
    
    
    $
    (0.05
    )Diluted earnings (loss) per share
    
    $
    0.20
    
    
    $
    (0.05
    )
 NOTE 9. INVENTORIES
  August 31,
    
    
    May 31,2008
    
    
    2008Finished goods
    
    $
    81,320
    
    
    $
    62,055Work-in-process
    
    
    5,488
    
    
    
    6,119Raw materials
    
    
    21,568
    
    
    
    22,657Total
    
    $
    108,376
    
    
    $
    90,831
 NOTE 10. INTANGIBLE ASSETS, NET
  August 31,
    
    
    
    
    
    May 31,2008
    
    
    
    
    
    2008Weighted
    
    
    
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageRemaining
    
    
    
    
    
    Accumulated
    
    
    
    
    
    Remaining
    
    
    
    
    
    AccumulatedLife
    
    Gross
    
    Amortization
    
    Net
    
    Life
    
    Gross
    
    Amortization
    
    NetExisting technology
    
    
    3.4
    
    
    $
    381,580
    
    
    $
    (215,081
    )
    
    $
    166,499
    
    
    
    3.6
    
    
    $
    380,254
    
    
    $
    (198,682
    )
    
    $
    181,572Trademark
    
    NA
    
    
    55,502
    
    
    
    
    
    
    
    55,502
    
    
    NA
    
    
    55,502
    
    
    
    
    
    
    
    55,502Huawei non-compete
    
    
    0.3
    
    
    
    33,375
    
    
    
    (27,575
    )
    
    
    5,800
    
    
    
    0.5
    
    
    
    33,650
    
    
    
    (22,072
    )
    
    
    11,578OEM agreement
    
    
    1.8
    
    
    
    24,946
    
    
    
    (9,928
    )
    
    
    15,018
    
    
    
    2.0
    
    
    
    24,844
    
    
    
    (7,947
    )
    
    
    16,897Maintenance agreements
    
    
    2.4
    
    
    
    19,000
    
    
    
    (11,348
    )
    
    
    7,652
    
    
    
    2.7
    
    
    
    19,000
    
    
    
    (10,556
    )
    
    
    8,444Other
    
    
    1.8
    
    
    
    22,211
    
    
    
    (18,386
    )
    
    
    3,825
    
    
    
    2.0
    
    
    
    22,176
    
    
    
    (17,784
    )
    
    
    4,392$
    536,614
    
    
    $
    (282,318
    )
    
    $
    254,296
    
    
    
    
    
    
    $
    535,426
    
    
    $
    (257,041
    )
    
    $
    278,385
  11




---



##### Table of Contents



NOTE 11. ACCRUED WARRANTY
   Three Months EndedAugust 31,2008
    
    
    2007Accrued warranty, beginning of period
    
    $
    36,897
    
    
    $
    40,596Cost of warranty claims processed during the period
    
    
    (8,217
    )
    
    
    (10,937
    )Provision for warranties related to products sold during the period
    
    
    6,771
    
    
    
    10,244Accrued warranty, end of period
    
    $
    35,451
    
    
    $
    39,903
 NOTE 12. LONG-TERM DEBT
      12




---



##### Table of Contents



Tranche A
    
    Tranche B2009
    
    $
    46,000
    
    
    $
    2,0002010
    
    
    46,000
    
    
    
    2,0002011
    
    
    46,000
    
    
    
    2,0002012
    
    
    
    
    
    
    20,0002013
    
    
    
    
    
    
    137,000
    NOTE 13. SEGMENT INFORMATION
    13




---



##### Table of Contents



Three Months Ended August 31, 2008Networking Business
    
    
    TippingPointRest of
    
    
    
    
    
    
    SecurityWorld
    
    
    
    
    
    
    BusinessChina-based
    
    
    Sales
    
    
    Central
    
    
    Tipping
    
    
    Eliminations/(in thousands)
    
    sales region
    
    
    Region
    
    
    Functions
    
    
    Point
    
    
    Other
    
    
    TotalSales
    
    $
    175,397
    
    
    $
    140,314
    
    
    $
    
    
    
    $
    28,199
    
    
    $
    (1,260
    ) a
    
    $
    342,650Gross profit
    
    
    115,527
    
    
    
    82,253
    
    
    
    (26,976
    )
    
    
    19,581
    
    
    
    (758
    ) b
    
    
    189,627Direct sales & marketing expenses
    
    
    33,100
    
    
    
    28,152
    
    
    
    
    
    
    
    9,373
    
    
    
    1,758
    b
    
    
    72,383Segment contribution profit (loss)
    
    
    82,427
    
    
    
    54,101
    
    
    
    (26,976
    )
    
    
    10,208
    
    
    
    (2,516
    )
    
    
    117,244Other operating expenses
    
    
    
    
    
    
    
    
    
    
    72,863
    
    
    
    9,911
    
    
    
    (38,913
    ) c
    
    
    43,861Segment profit
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    297
    
    
    $
    Operating income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    73,383
 Three Months Ended August 31, 2007Networking Business
    
    
    TippingPointRest of
    
    
    
    
    
    
    SecurityWorld
    
    
    
    
    
    
    BusinessChina-based
    
    
    Sales
    
    
    Central
    
    
    Tipping
    
    
    Eliminations/sales region
    
    
    Region
    
    
    Functions
    
    
    Point
    
    
    Other
    
    
    TotalSales
    
    $
    156,034
    
    
    $
    137,932
    
    
    $
    
    
    
    $
    25,468
    
    
    $
    
    a
    
    $
    319,434Gross profit
    
    
    94,009
    
    
    
    75,438
    
    
    
    (31,225
    )
    
    
    16,626
    
    
    
    (5,912
    )b
    
    
    148,936Direct sales & marketing expenses
    
    
    25,824
    
    
    
    23,087
    
    
    
    
    
    
    
    9,093
    
    
    
    975
    b
    
    
    58,979Segment contribution profit (loss)
    
    
    68,185
    
    
    
    52,351
    
    
    
    (31,225
    )
    
    
    7,533
    
    
    
    (6,887
    )
    
    
    89,957Other operating expenses
    
    
    
    
    
    
    
    
    
    
    78,622
    
    
    
    8,087
    
    
    
    28,935
    c
    
    
    115,644Segment loss
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (554
    )
    
    $
    Operating loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (25,687
    )
 
 a 
    
    Represents eliminations for inter-company revenue between Networking and TippingPoint
during the respective periods.b 
    
    Includes stock based compensation in all periods and purchase accounting inventory related
adjustments in the three months ended August 31, 2007.c 
    
    Includes stock based compensation, amortization, and restructuring in all periods plus
Realtek patent dispute resolution in the three months ended August 31, 2008.  14




---



##### Table of Contents



Three Months Ended August 31,2008
    
    
    2007Networking equipment
    
    $
    282,463
    
    
    
    82.4
    %
    
    $
    262,600
    
    
    
    82.2
    %Security
    
    
    36,339
    
    
    
    10.6
    
    
    
    31,483
    
    
    
    9.9Voice
    
    
    12,830
    
    
    
    3.8
    
    
    
    16,321
    
    
    
    5.1Services
    
    
    11,018
    
    
    
    3.2
    
    
    
    9,030
    
    
    
    2.8Total
    
    $
    342,650
    
    
    
    100
    %
    
    $
    319,434
    
    
    
    100
    %
 NOTE 14. GEOGRAPHIC INFORMATION
  Three Months Ended August 31,2008
    
    
    2007China
    
    $
    167,527
    
    
    $
    146,754Europe, Middle East and Africa
    
    
    69,377
    
    
    
    69,662North America
    
    
    52,031
    
    
    
    60,018Asia Pacific Rim (excluding-China)
    
    
    30,109
    
    
    
    23,382Latin and South America
    
    
    23,606
    
    
    
    19,618Total
    
    $
    342,650
    
    
    $
    319,434
  NOTE 15. LITIGATION
  In re Initial Public Offering Securities Litigation, Brian Levey vs.
TippingPoint Technologies, Inc., et al.
 15




---



##### Table of Contents



NOTE 16. SUBSEQUENT EVENTS
 Stock Repurchase Program
  2003 Plan
  1984 ESPP
  16




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 INTRODUCTION
  BUSINESS OVERVIEW
   §
    
    Significant changes to our executive leadership;§
    
    The formation and subsequent 100 percent acquisition of our China-based H3C subsidiary;§
    
    Financing a portion of the purchase price for our acquisition of H3C by entering into
a $430 million senior secured credit agreement;§
    
    Acquiring TippingPoint Technologies, Inc;§
    
    Restructuring activities, which included outsourcing of information technology,
certain manufacturing activities in our Networking business, significant headcount
reductions in other functions, and selling excess facilities;§
    
    Integration of our research and development and supply chain activities following our
H3C acquisition; and§
    
    Changing our reporting segments to align with the way we manage our business.
  §
    
    Networking;§
    
    Security;§
    
    Voice; and§
    
    Services.
  Business Environment and Future Trends
  §
    
    Intense competition in the market for higher end, enterprise core routing and switching products;§
    
    Aggressive product pricing by competitors targeted at gaining share in market segments where we
have had a strong position historically, such as the small to medium-sized enterprise market;
and
 17




---



##### Table of Contents



§
    
    The advanced nature and ready availability of merchant silicon, which allows low-end competitors
to deliver competitive products and makes it increasingly difficult for us to differentiate our
products.
   
    
    China- In China, we have been successful in direct-touch sales to enterprise customers
and selling our offerings to the carrier market through our Huawei OEM relationship. We
do, however, expect declining sales to Huawei. To maintain our market-leadership position
in China, we intend to increase our focus on direct-touch sales as well as pursue other
channels into the carrier market. We believe that growing market share in China will be
more challenging than in the past given that we already have a significant enterprise
networking market share in China.
    
    Emerging markets outside of China- We expect to target growth opportunities outside of
China in other developing markets. We believe that our successful penetration of the
Chinese market has positioned us to grow sales in developing markets generally.
    
    Developed global markets- Our ability to achieve our goal of sales growth in developed
markets depends to a substantial degree on our ability to take market share from our
competitors. Our strategy in developed markets centers around leveraging targeted selling
and marketing investments into the medium business segment of the enterprise networking
market. These sales efforts are currently expected to focus on our open source, open
architecture platforms, and our comprehensive portfolio of differentiated networking
offerings.
   Segment Reporting
   18




---



##### Table of Contents



Summary of Three Months Ended August 31, 2008 Financial Performance
 §
    
    Our sales in the three months ended August 31, 2008 were $342.7 million, compared to
sales of $319.4 million in the three months ended August 31, 2007, an increase of $23.3
million, or 7.3 percent.§
    
    Our gross margin improved to 55.3 percent in the three months ended August 31, 2008 from
46.6 percent in the three months ended August 31, 2007.§
    
    Our operating expenses (income) in the three months ended August 31, 2008 were $116.2
million, compared to $174.6 million in the three months ended August 31, 2007, a net
decrease of $58.4 million, or 33.4 percent. Included in the three months ended August 31,
2008 operating expenses (income) is $70.0 million of income related to the Realtek patent
dispute resolution.§
    
    Our net income in the three months ended August 31, 2008 was $79.8 million, compared to
a net loss of $18.7 million in the three months ended August 31, 2007. Included in the
three months ended August 31, 2008 net income is $70.0 million of income related to the
Realtek patent dispute resolution.§
    
    Our balance sheet contains cash and equivalents of $541.4 million as of August 31, 2008,
compared to cash and equivalents of $503.6 million at the end of fiscal 2008. The balance
sheet also includes debt of $301 million with $88 million classified as a current liability
as of August 31, 2008 compared to debt of $301 million with $48 million classified as a
current liability at the end of fiscal 2008.
 CRITICAL ACCOUNTING POLICIES
  RESULTS OF OPERATIONS
 THREE MONTHS ENDED AUGUST 31, 2008 AND 2007
  Three Months EndedAugust 31,2008
    
    2007Sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    44.7
    
    
    
    53.4Gross profit margin
    
    
    55.3
    
    
    
    46.6Operating expenses (income):Sales and marketing
    
    
    25.2
    
    
    
    23.3Research and development
    
    
    13.3
    
    
    
    16.4General and administrative
    
    
    7.9
    
    
    
    6.7Amortization and write-down of intangible assets
    
    
    7.3
    
    
    
    8.1Realtek patent resolution
    
    
    (20.4
    )
    
    
    Restructuring charges
    
    
    0.6
    
    
    
    0.1Operating expenses, net
    
    
    33.9
    
    
    
    54.6Operating income (loss)
    
    
    21.4
    
    
    
    (8.0
    )Gain on investments, net
    
    
    0.0
    
    
    
    0.0Interest expense, net
    
    
    (0.4
    )
    
    
    (1.1
    )Other income, net
    
    
    3.8
    
    
    
    3.8Income (loss) before income taxes
    
    
    24.8
    
    
    
    (5.3
    )Income tax provision
    
    
    (1.5
    )
    
    
    (0.5
    )Net income (loss)
    
    
    23.3
    %
    
    
    (5.8
    )%
 19




---



##### Table of Contents



Sales
  Three Months EndedAugust 31,2008
    
    
    2007China-based sales region
    
    $
    175.4
    
    
    $
    156.0Rest of World sales region
    
    
    140.3
    
    
    
    137.9TippingPoint security business
    
    
    28.2
    
    
    
    25.5Eliminations and other
    
    
    (1.2
    )
    
    
    Consolidated sales
    
    $
    342.7
    
    
    $
    319.4
       Three Months EndedAugust 31,2008
    
    2007Networking
    
    $
    282.5
    
    
    
    82
    %
    
    $
    262.6
    
    
    
    82
    %Security
    
    
    36.4
    
    
    
    11
    %
    
    
    31.5
    
    
    
    10
    %Voice
    
    
    12.8
    
    
    
    4
    %
    
    
    16.3
    
    
    
    5
    %Services
    
    
    11.0
    
    
    
    3
    %
    
    
    9.0
    
    
    
    3
    %Total
    
    $
    342.7
    
    
    
    100
    %
    
    $
    319.4
    
    
    
    100
    %
   ®
  20




---



##### Table of Contents



Gross
Margin
  Three Months EndedAugust 31,2008
    
    2007Networking business
    
    
    54.1
    %
    
    
    47.0
    %TippingPoint security business
    
    
    69.4
    %
    
    
    65.3
    %Consolidated margin
    
    
    55.3
    %
    
    
    46.6
    %
    Operating
Expenses (Income)
 Three Months EndedAugust 31,
    
    
    Change(Dollars in millions, except percentages)
    
    2008
    
    
    2007
    
    
    $
    
    
    %Sales and marketing
    
    $
    86.3
    
    
    $
    74.4
    
    
    $
    11.9
    
    
    
    16
    %Research and development
    
    
    45.7
    
    
    
    52.3
    
    
    
    (6.6
    )
    
    
    (13
    )%General and administrative
    
    
    27.0
    
    
    
    21.5
    
    
    
    5.5
    
    
    
    26
    %Amortization of intangible assets
    
    
    25.2
    
    
    
    26.0
    
    
    
    (0.8
    )
    
    
    (3
    )%Patent dispute resolution
    
    
    (70.0
    )
    
    
    
    
    
    
    (70.0
    )
    
    
    *Restructuring
    
    
    2.0
    
    
    
    0.4
    
    
    
    1.6
    
    
    
    400
    %Operating expenses, net
    
    $
    116.2
    
    
    $
    174.6
    
    
    $
    (58.4
    )
    
    
    (33
    )%
 
 *
    
    - percentage calculation not meaningful. Sales and Marketing.
  21




---



##### Table of Contents



Research and Development.
  eneral and Administrative.
  Amortization of Intangible Assets.
  Patent dispute resolution.
   Restructuring Charges
    Interest Expense, Net
  Other Income, Net
  Income Tax Provision
  22




---



##### Table of Contents



Net Income (Loss)
  Segment Analysis (tables in thousands)
  China-based sales region:
 Three months endedAugust 31,2008
    
    
    2007Sales
    
    $
    175,397
    
    
    $
    156,034Gross profit (a)
    
    
    115,527
    
    
    
    94,009Direct sales and marketing expenses
    
    
    33,100
    
    
    
    25,824Segment contribution profit
    
    $
    82,427
    
    
    $
    68,185
  
 a  Gross profit reflects standard margin, which is sales less standard cost of goods sold.
 Rest of World sales region:
 Three months endedAugust 31,2008
    
    
    2007Sales
    
    $
    140,314
    
    
    $
    137,932Gross profit (a)
    
    
    82,253
    
    
    
    75,438Direct sales and marketing expenses
    
    
    28,152
    
    
    
    23,087Segment contribution profit
    
    $
    54,101
    
    
    $
    52,351
  
 a  Gross profit reflects standard margin, which is sales less standard cost of goods sold.
 23




---



##### Table of Contents



Central Functions:
 Three months endedAugust 31,2008
    
    
    2007Gross profit (a)
    
    $
    (26,976
    )
    
    $
    (31,225
    )Operating expenses
    
    
    72,863
    
    
    
    78,622Total cost and expenses
    
    $
    99,839
    
    
    $
    109,847
  
 a  Gross profit represents other costs of goods sold not allocated to the sales regions.
 TippingPoint Security business:
 Three months endedAugust 31,2008
    
    
    2007Sales
    
    $
    28,199
    
    
    $
    25,468Gross profit
    
    
    19,581
    
    
    
    16,626Operating expenses
    
    
    19,284
    
    
    
    17,180Segment profit (loss)
    
    $
    297
    
    
    $
    (554
    )
  LIQUIDITY AND CAPITAL RESOURCES
   Three Months EndedAugust 31,2008
    
    
    2007Cash and equivalents, beginning of period
    
    $
    503.6
    
    
    $
    559.2Net cash provided by (used in) operating activities
    
    
    39.3
    
    
    
    (59.0
    )Net cash used in investing activities
    
    
    (7.5
    )
    
    
    (4.5
    )Net cash (used in) provided by financing activities
    
    
    (0.3
    )
    
    
    0.6Effect of exchange rate changes on cash
    
    
    6.3
    
    
    
    4.7Cash and equivalents, end of period
    
    $
    541.4
    
    
    $
    501.0
 24




---



##### Table of Contents



EFFECTS OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
   25




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
   26




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  Risks Related to Historical Losses, Financial Condition and Substantial Indebtedness
 While we earned a profit in the first quarter of our 2009 fiscal year, we have incurred significant
net losses in recent fiscal periods, including $228.8 million for the fiscal year ended May 30,
2008, and we may not be able to sustain or increase this profitability in the future.
  
    
    declining sales in certain regions due to price competition and reduced incoming order
rate;
    
    operating expenses that, as a percentage of sales, have exceeded our desired financial
model;
    
    significant senior leadership and other management changes;
    
    significant non-cash accounting charges;
    
    increased sales and marketing expense as part of a strategy to help grow our market
share;
    
    disruptions and expenses resulting from our workforce reductions and employee attrition;
and
    
    interest expense resulting from our senior secured loan.
   Our substantial debt could adversely affect our financial condition; and the related debt service
obligations may adversely affect our cash flow and ability to invest in and grow our businesses.
  27




---



##### Table of Contents




    
    increase our vulnerability to general adverse economic and industry conditions;
    
    limit our ability to obtain additional financing;
    
    require the dedication of a substantial portion of any cash flow from operations to the
payment of principal of, and interest on, our indebtedness, thereby reducing the
availability of such cash flow to fund growth, working capital, capital expenditures and
other general corporate purposes;
    
    limit our flexibility in planning for, or reacting to, changes in our business and our
industry; and
    
    place us at a competitive disadvantage relative to our competitors with less debt.
 The restrictions imposed by the terms of our senior secured loan facility could adversely impact
our ability to invest in and grow our China business.
  Risks Related to China-based Sales region and Dependence Thereon
 We are significantly dependent on our China-based segment; if it is not successful we will likely
experience a material adverse impact to our business, business prospects and operating results.
  
    
    maintain a leading position in the networking equipment market in China;
    
    build profitable operations in other emerging markets throughout the world, but
particularly in the Asia Pacific region;
    
    offer new and innovative products and services to attract and retain a larger customer
base;
    
    increase awareness of the H3C brand and continue to develop customer loyalty;
    
    respond to rapidly changing competitive market conditions;
    
    respond to changes in the regulatory environment;
    
    manage risks associated with intellectual property rights, particularly in China;
    
    maintain effective control of costs and expenses; and
    
    attract, retain and motivate qualified personnel.
 28




---



##### Table of Contents



We are dependent on Huawei Technologies (Huawei) in several material respects, including as an
important customer; we expect Huawei to reduce its business with us, which could materially
adversely affect our business results.
  We must execute on a global strategy to leverage the benefits of our H3C acquisition; if we are not
successful in these efforts, our business will suffer.
  29




---



##### Table of Contents



If we cannot continue to increase our Rest of World segments sales of H3C branded or sourced
products outside of China, we will likely find it increasingly difficult to grow our overall
business.
  Risk Related to Personnel
 Our success is dependent on continuing to hire and retain qualified managers and other personnel,
including at our H3C subsidiary, and reducing senior management turnover; if we are not successful
in attracting and retaining these personnel, our business will suffer.
   Risks Related to Competition
 Intense competition in the market for networking solutions could prevent us from maintaining or
increasing revenue and achieving profitability.
    30




---



##### Table of Contents



Our competition with Huawei in the enterprise networking market could have a material adverse
effect on our sales and our results of operations; now that the contractual non-compete period has
expired, Huawei can increase its level of competition, which would likely materially and adversely
affect our business.
    Risks Related to Business and Technology Strategy
 We may not be successful at identifying and responding to new and emerging market and product
opportunities, or at responding quickly enough to technologies or markets that are in decline.
  
    
    identify new market and product opportunities;
    
    predict which technologies and markets will see declining demand;
    
    develop and introduce new products and solutions in a timely manner;
    
    gain market acceptance of new products and solutions, particularly in targeted emerging
markets; and
    
    rapidly and efficiently transition our customers from older to newer enterprise
networking technologies.
  
    
    there is a delay in introducing new products;
    
    we lose certain channels of distribution or key partners;
    
    our products do not satisfy customers in terms of features, functionality or quality; or
    
    our products cost more to produce than we expect.
  31




---



##### Table of Contents



We expect to utilize strategic relationships and other alliances as key elements in our strategy.
If we are not successful in forming these partnerships or if they are not successful, our ability
to achieve our growth and profitability goals could be adversely affected.
   Our strategy of outsourcing functions and operations may fail to reduce cost and may disrupt our
operations.
   Our reliance on industry standards, technological change in the marketplace, and new product
initiatives may cause our sales to fluctuate or decline.
  
    
    the convergence of technologies, such as voice, data and video on single, secure
networks;
    
    the timely adoption and market acceptance of industry standards, and timely resolution
of conflicting U.S. and international industry standards; and
    
    our ability to influence the development of emerging industry standards and to introduce
new and enhanced products that are compatible with such standards.
  32




---



##### Table of Contents



We focus on enterprise networking, and our results of operations may fluctuate based on factors
related entirely to conditions in this market.
  Risks Related to Operations and Distribution Channels
 A significant portion of our sales is derived from a small number of distributors. If any of these
partners reduces its business with us, our business could be adversely affected.
  We depend on distributors who maintain inventories of our products. If the distributors reduce
their inventories of our products, our sales could be adversely affected.
  If we are unable to successfully develop relationships with system integrators, service providers,
and enterprise VARs, our sales may be negatively affected.
  We may pursue acquisitions of other companies that, if not successful, could adversely affect our
business, financial position and results of operations.
  33




---



##### Table of Contents



We may be unable to manage our supply chain successfully, which would adversely impact our sales,
gross margin and profitability.
  
    
    our ability to accurately forecast demand is diminished;
    
    our reliance on, and long-term arrangements with, third-party manufacturers places much
of the supply chain process out of our direct control and heightens the need for accurate
forecasting and reduces our ability to transition quickly to alternative supply chain
strategies; and
    
    we may experience disruptions to our logistics.
   The inability of any contract manufacturer to meet our cost, quality or performance standards could
adversely affect our sales and overall results from operations.
   If we fail to adequately evolve our financial and managerial control and reporting systems and
processes, including the management of our China-based operations, our ability to manage and grow
our business will be negatively affected.
  34




---



##### Table of Contents



Risks Related to our Operations in the Peoples Republic of China
 Chinas governmental and regulatory reforms and changing economic environment may impact our
ability to do business in China.
  
    
    the promulgation of new laws and regulations and the interpretation of those laws and
regulations;
    
    enforcement and application of rules and regulations by the Chinese government;
    
    the introduction of measures to control inflation or stimulate growth; or
    
    any actions that limit our ability to develop, manufacture, import or sell our products
in China, or to finance and operate our business in China.
  Uncertainties with respect to the Chinese legal system may adversely affect us.
  If PRC tax benefits available to us in China are reduced or repealed, our business could suffer.
  35




---



##### Table of Contents



Our H3C subsidiary is subject to restrictions on paying dividends and making other payments to us.
  We are subject to risks relating to currency rate fluctuations and exchange controls and we do not
hedge this risk in China.
   Risks Related to Intellectual Property
 If our products contain undetected software or hardware errors, we could incur significant
unexpected expenses and could lose sales.
   36




---



##### Table of Contents



We may need to engage in complex and costly litigation in order to protect, maintain or enforce our
intellectual property rights; in some jurisdictions, such as China, our rights may not be as strong
as the rights we enjoy in the U.S.
   We may not be able to defend ourselves successfully against claims that we are infringing the
intellectual property rights of others.
   Our open source strategy subjects us to additional intellectual property risks, such as less
control over development of certain technology that forms a part of this strategy and a higher
likelihood of litigation.
  37




---



##### Table of Contents



Risks Related to the Trading Market
 Fluctuations in our operating results and other factors may contribute to volatility in the market
price of our stock.
  
    
    fluctuations in our quarterly results of operations and cash flow;
    
    changes in our cash and equivalents and short term investment balances;
    
    our ability to execute on our strategic plan, including, without limitation, any
integration activities we choose to undertake;
    
    variations between our actual financial results and published analysts expectations;
and
    
    announcements by our competitors or significant customers.
   We may be required to record additional significant charges to earnings if our goodwill or
intangible assets become impaired.
  38




---



##### Table of Contents



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number
    
    
    Averageof Shares
    
    
    Price PaidPeriod
    
    Purchased
    
    
    per ShareMay 31, 2008 through June 27, 2008
    
    
    1,058
    (1)
    
    $
    2.46June 28, 2008 through July 25, 2008
    
    
    85,137
    (1)
    
    
    2.04July 26, 2008 through August 29, 2008
    
    
    197,116
    (1)
    
    
    1.86Total
    
    
    283,311
    
    
    $
    1.92
 
 (1)
    
    Represents shares returned to us to satisfy tax withholding obligations that arose upon the
vesting of restricted stock awards.  39




---



##### Table of Contents



ITEM 6. EXHIBITS
 Incorporated by ReferenceExhibit
    
    
    
    
    
    
    
    
    
    
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith2.1
    
    Master Separation and Distribution
Agreement between the Registrant and Palm,
Inc. effective as of December 13, 1999
    
    10-Q
    
    002-92053
    
    
    2.1
    
    
    4/4/002.2
    
    Indemnification and Insurance Matters
Agreement between the Registrant and Palm,
Inc.
    
    10-Q
    
    002-92053
    
    
    2.11
    
    
    4/4/002.3
    
    Agreement and Plan of Merger, dated
December 13, 2004, by and among the
Registrant, Topaz Acquisition Corporation
and TippingPoint Technologies, Inc.
    
    8-K
    
    000-12867
    
    
    2.1
    
    
    12/16/042.4
    
    Securities Purchase Agreement by and among
3Com Corporation, 3Com Technologies, Huawei
Technologies Co., Ltd. and Shenzen Huawei
Investment & Holding Co., Ltd., dated as of
October 28, 2005
    
    8-K/A
    
    000-12867
    
    
    2.1
    
    
    3/30/062.5
    
    Stock Purchase Agreement by and between
Shenzhen Huawei Investment & Holding Co.,
Ltd. and 3Com Technologies, dated as of
December 22, 2006
    
    8-K
    
    000-12867
    
    
    10.1
    
    
    12/27/062.6
    
    Agreement and Plan of Merger by and among
3Com Corporation, Diamond II Holdings Inc.
and Diamond II Acquisition Corp., dated
September 28, 2007
    
    8-K/A
    
    000-12867
    
    
    2.1
    
    
    9/28/073.1
    
    Corrected Certificate of Merger filed to
correct an error in the Certificate of
Merger
    
    10-Q
    
    002-92053
    
    
    3.4
    
    
    10/8/993.2
    
    Registrants Bylaws, as amended on March
23, 2005
    
    8-K
    
    000-12867
    
    
    3.1
    
    
    3/28/053.3
    
    Certificate of Designation of Rights,
Preferences and Privileges of Series A
Participating Preferred Stock
    
    10-Q
    
    000-12867
    
    
    3.6
    
    
    10/11/014.1
    
    Third Amended and Restated Preferred Shares
Rights Agreement, dated as of November 4,
2002 (Rights Agreement)
    
    8-A/A
    
    000-12867
    
    
    4.1
    
    
    11/27/024.2
    
    Amendment No. 1 to Rights Agreement, dated
as of September 28, 2007
    
    8-K
    
    000-12867
    
    
    4.1
    
    
    9/28/0710.1
    
    First Amendment dated as of June 18, 2008
to Amended and Restated Credit and Guaranty
Agreement dated as of May 25, 2007 and
effective as of May 31, 2007 among H3C
Holdings Limited, as Borrower, 3Com
Corporation, 3Com Holdings Limited and 3Com
Technologies, as Holdco Guarantors, H3C
Technologies Co., Limited, as Guarantor,
various Lenders, Goldman Sachs Credit
Partners L.P., as Mandated Lead Arranger,
Bookrunner, Administrative Agent and
Syndication Agent, and Industrial and
Commercial Bank of China (Asia) Limited, as
Collateral Agent
    
    10-K
    
    000-12867
    
    
    10.54
    
    
    7/25/0810.2
    
    3Com Corporation 2003 Stock Plan, as
amended and approved by the stockholders on
September 24, 2008 (Beijing, China-time)*
    
    8-K
    
    000-12867
    
    
    10.1
    
    
    9/24/08
 40




---



##### Table of Contents



Incorporated by ReferenceExhibit
    
    
    
    
    
    
    
    
    
    
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith10.3
    
    Amended and Restated 3Com Corporation 1984
Employee Stock Purchase Plan, as approved
by stockholders on September 24, 2008
(Beijing, China-time)*
    
    8-K
    
    000-12867
    
    
    10.2
    
    
    9/24/0810.4
    
    Agreement dated and effective as of July
11, 2008 by and between 3Com Corporation
and Realtek Semiconductor Corp.
    
    
    
    
    
    
    
    
    
    
    
    X10.5
    
    Gigabit Technology License Agreement dated
and effective as of July 11, 2008 by and
between 3Com Corporation, Realtek
Semiconductor Corporation and Amber
Universal Inc.
    
    
    
    
    
    
    
    
    
    
    
    X10.6
    
    Parallel Tasking Technology License
Agreement dated and effective as of July
11, 2008 by and between 3Com Corporation,
Realtek Semiconductor Corporation and
Leading Enterprises Limited
    
    
    
    
    
    
    
    
    
    
    
    X31.1
    
    Certification of Principal Executive Officer
    
    
    
    
    
    
    
    
    
    
    
    X31.2
    
    Certification of Principal Financial Officer
    
    
    
    
    
    
    
    
    
    
    
    X32.1
    
    Certification of Chief Executive Officer
and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
    
    
    
    
    
    
    
    
    
    
    
    X
 
 *
    
    Indicates a management contract or compensatory plan 41




---



##### Table of Contents



SIGNATURES
  3Com Corporation
          (Registrant)Dated:      October 7, 2008
    By:
    /s/   Jay ZagerJay ZagerExecutive Vice President, Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer and a duly authorized
officer of the registrant) 42




---



##### Table of Contents



EXHIBIT INDEX
 Incorporated by ReferenceExhibit
    
    
    
    
    
    
    
    
    
    
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith2.1
    
    Master Separation and Distribution
Agreement between the Registrant and Palm,
Inc. effective as of December 13, 1999
    
    10-Q
    
    002-92053
    
    
    2.1
    
    
    4/4/002.2
    
    Indemnification and Insurance Matters
Agreement between the Registrant and Palm,
Inc.
    
    10-Q
    
    002-92053
    
    
    2.11
    
    
    4/4/002.3
    
    Agreement and Plan of Merger, dated
December 13, 2004, by and among the
Registrant, Topaz Acquisition Corporation
and TippingPoint Technologies, Inc.
    
    8-K
    
    000-12867
    
    
    2.1
    
    
    12/16/042.4
    
    Securities Purchase Agreement by and among
3Com Corporation, 3Com Technologies, Huawei
Technologies Co., Ltd. and Shenzen Huawei
Investment & Holding Co., Ltd., dated as of
October 28, 2005
    
    8-K/A
    
    000-12867
    
    
    2.1
    
    
    3/30/062.5
    
    Stock Purchase Agreement by and between
Shenzhen Huawei Investment & Holding Co.,
Ltd. and 3Com Technologies, dated as of
December 22, 2006
    
    8-K
    
    000-12867
    
    
    10.1
    
    
    12/27/062.6
    
    Agreement and Plan of Merger by and among
3Com Corporation, Diamond II Holdings Inc.
and Diamond II Acquisition Corp., dated
September 28, 2007
    
    8-K/A
    
    000-12867
    
    
    2.1
    
    
    9/28/073.1
    
    Corrected Certificate of Merger filed to
correct an error in the Certificate of
Merger
    
    10-Q
    
    002-92053
    
    
    3.4
    
    
    10/8/993.2
    
    Registrants Bylaws, as amended on March
23, 2005
    
    8-K
    
    000-12867
    
    
    3.1
    
    
    3/28/053.3
    
    Certificate of Designation of Rights,
Preferences and Privileges of Series A
Participating Preferred Stock
    
    10-Q
    
    000-12867
    
    
    3.6
    
    
    10/11/014.1
    
    Third Amended and Restated Preferred Shares
Rights Agreement, dated as of November 4,
2002 (Rights Agreement)
    
    8-A/A
    
    000-12867
    
    
    4.1
    
    
    11/27/024.2
    
    Amendment No. 1 to Rights Agreement, dated
as of September 28, 2007
    
    8-K
    
    000-12867
    
    
    4.1
    
    
    9/28/0710.1
    
    First Amendment dated as of June 18, 2008
to Amended and Restated Credit and Guaranty
Agreement dated as of May 25, 2007 and
effective as of May 31, 2007 among H3C
Holdings Limited, as Borrower, 3Com
Corporation, 3Com Holdings Limited and 3Com
Technologies, as Holdco Guarantors, H3C
Technologies Co., Limited, as Guarantor,
various Lenders, Goldman Sachs Credit
Partners L.P., as Mandated Lead Arranger,
Bookrunner, Administrative Agent and
Syndication Agent, and Industrial and
Commercial Bank of China (Asia) Limited, as
Collateral Agent
    
    10-K
    
    000-12867
    
    
    10.54
    
    
    7/25/0810.2
    
    3Com Corporation 2003 Stock Plan, as
amended and approved by the stockholders on
September 24, 2008 (Beijing, China-time)*
    
    8-K
    
    000-12867
    
    
    10.1
    
    
    9/24/08
 43




---



##### Table of Contents



Incorporated by ReferenceExhibit
    
    
    
    
    
    
    
    
    
    
    
    
    
    FiledNumber
    
    Exhibit Description
    
    Form
    
    File No.
    
    Exhibit
    
    Filing Date
    
    Herewith10.3
    
    Amended and Restated 3Com Corporation 1984
Employee Stock Purchase Plan, as approved
by stockholders on September 24, 2008
(Beijing, China-time)*
    
    8-K
    
    000-12867
    
    
    10.2
    
    
    9/24/0810.4
    
    Agreement dated and effective as of July
11, 2008 by and between 3Com Corporation
and Realtek Semiconductor Corp.
    
    
    
    
    
    
    
    
    
    
    
    X10.5
    
    Gigabit Technology License Agreement dated
and effective as of July 11, 2008 by and
between 3Com Corporation, Realtek
Semiconductor Corporation and Amber
Universal Inc.
    
    
    
    
    
    
    
    
    
    
    
    X10.6
    
    Parallel Tasking Technology License
Agreement dated and effective as of July
11, 2008 by and between 3Com Corporation,
Realtek Semiconductor Corporation and
Leading Enterprises Limited
    
    
    
    
    
    
    
    
    
    
    
    X31.1
    
    Certification of Principal Executive Officer
    
    
    
    
    
    
    
    
    
    
    
    X31.2
    
    Certification of Principal Financial Officer
    
    
    
    
    
    
    
    
    
    
    
    X32.1
    
    Certification of Chief Executive Officer
and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
    
    
    
    
    
    
    
    
    
    
    
    X
 
 *
    
    Indicates a management contract or compensatory plan 44