**Exhibit 10.1**

** **

**3COM CORPORATION**

 

**MANAGEMENT RETENTION AGREEMENT**

 

***Amendedand Restated as of July 15, 2003***

 

This Management RetentionAgreement (the “Agreement”) is made and entered into by and between BruceClaflin (the “Employee”) and 3Com Corporation (the “Company”), amended andrestated effective as of July 15, 2003 (the “Effective Time”).

 

R E C I T A L S

 

A.                                   Itis expected that the Company from time to time will consider the possibility ofan acquisition by another company or other change of control.  The Board of Directors of the Company (the“Board”) recognizes that such consideration can be a distraction to theEmployee and can cause the Employee to consider alternative employmentopportunities.  The Board has determinedthat it is in the best interests of the Company and its stockholders to assurethat the Company will have the continued dedication and objectivity of theEmployee, notwithstanding the possibility, threat or occurrence of a Change ofControl (as defined herein) of the Company.

 

B.                                     TheBoard believes that it is in the best interests of the Company and itsstockholders to provide the Employee with an incentive to continue hisemployment and to motivate the Employee to maximize the value of the Companyupon a Change of Control for the benefit of its stockholders.

 

C.                                     Employeeand the Board, upon reviewing Employee’s Management Retention Agreement as ineffect prior to this amendment and restatement (the “Prior Agreement”),determined that payments and benefits were likely to have been made thereunderpursuant to the Company’s restructuring. Thereafter, Employee and the Boardagreed to eliminate substantially all of the benefits otherwise payable underthe Prior Agreement pursuant to the Company’s restructuring.  The Board continues to believe that it isimperative to provide the Employee with benefits upon a Change of Control (andupon certain terminations of employment prior to a Change of Control) whichprovides the Employee with enhanced financial security and provides incentiveand encouragement to the Employee to remain with the Company notwithstandingthe possibility of a Change of Control. The Board also believes that it is important to provide meaningfullong-term incentives to Employee to remain with the Company.

 

D.                                    Certaincapitalized terms used in the Agreement are defined in Section 6 below.

 

E.                                      Employeeand the Company are parties to an Employment Agreement dated December 22,2000, as may be modified or amended from time to time by the mutual writtenagreement of the parties (the “Employment Agreement”).  References in the Employment Agreement tothe “Management Retention Agreement” shall be deemed to refer to the Management

 

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Retention Agreement asamended and restated as of July 15, 2003 or as may be further modified oramended from time to time by the mutual written agreement of the parties.

 

The parties hereto agreeas follows:

 

# 1.                                       Termof Agreement.  This Agreement shallterminate upon the date that all obligations of the parties hereto with respectto this Agreement have been satisfied.

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# 2.                                       At-WillEmployment.  Subject to the Companydischarging any of its obligations to provide Employee with payments andbenefits under the Employment Agreement and this Management RetentionAgreement, the Company and the Employee acknowledge that the Employee’semployment is and shall continue to be at-will, as defined under Massachusettslaw, and may be terminated by either party at any time, with or withoutcause.  If the Employee’s employmentterminates for any reason, including (without limitation) any termination morethan 3 months prior to a Change of Control, the Employee shall not be entitledto any payments, benefits or compensation other than as provided by thisAgreement, the Employment Agreement, or as may otherwise be available inaccordance with the Company’s established employee plans or pursuant to otherwritten agreements with the Company.

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# 3.                                       RetentionArrangement.

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(a)                                  DeferredCompensation Plan Account Credit. No later than October 31, 2003, the Company will credit Employee’saccount in the 3Com Deferred Compensation Plan with an amount equal to (i) twohundred percent (200%) of the Employee’s Annual Compensation, plus (ii) onehundred percent (100%) of Employee’s Target Bonus as in effect for the 2004fiscal year, pro-rated by multiplying such Target Bonus amount by a fraction,the numerator of which shall be the number of Company 2004 fiscal year dayselapsed on July 15, 2003, and the denominator of which shall bethree-hundred and sixty-five (the “Retention Benefit”); provided, however, thatif Employee remains with the Company through the end of the 2004 fiscal year,then the Company may subtract the gross pro-rated amount previously credited toEmployee’s account pursuant to this paragraph from the gross annual target bonusamount otherwise payable to Employee on account of the 2004 fiscal year;provided, further, that on each vesting date, Employee’s Deferred CompensationPlan account will be debited in an amount equal to the employee-side Medicareamounts paid out by 3Com on account of such vesting.

 

(b)                                 RetentionBenefit Vesting.

 

(i)                                     Vesting.  Employee shall vest as to one-third (1/3) ofthe Retention Benefit (and proportional earnings and losses thereon) upon eachanniversary of the Effective Time, so as to be 100% vested on July 15,2006, subject to Employee remaining employed by the Company on each vestingdate.  However, the Retention Benefitshall vest earlier as to 100% upon (i) a Change of Control, (ii) subject toEmployee entering into a mutual release of claims with the Company insubstantially the form attached hereto as Exhibit A, as updated to reflectdifferent applicable state and federal laws (a “Release”) Employee’stermination by the Company other than for Cause, (iii) subject to Employeeentering into a Release, Employee’s termination for Good Reason, or (iv)Employee’s termination of employment pursuant to Employee’s death orDisability; provided, that with respect to the pro-rated Target Bonus portionof the Retention Benefit, such amount shall vest, if earlier, upon the last dayof the Company’s 2004 fiscal year so long as Employee remains employed with theCompany through such date.  If theEmployee does not remain employed with the Company through a Retention Benefitvesting date, the unvested Retention

 

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Benefit(and credited earnings and losses thereon) shall revert to the Company.  Once vested, the Retention Benefit shallcontinue to remain subject to the terms and conditions of the 3Com Deferred CompensationPlan and Employee’s elections thereunder.

 

(ii)                                  SeverancePay Under the Employment Agreement From July 15, 2004 ThroughJuly 15, 2006.  In the eventthat, prior to a Change of Control and in the period from July 15, 2004through July 15, 2006, Employee’s employment with the Company terminatesand the benefits provided in Section (h)(i) of the Employment Agreementbecome due and payable to Employee (a “Triggering Event”), then, in lieu of theseverance payment of “continued payments of two year’s Base Salary plus TargetBonus” set forth in such provision (the “Severance Pay”), Employee shallinstead receive severance pay in an amount calculated by multiplying theSeverance Pay (A) for Triggering Events from July 15, 2004 throughJuly 15, 2005, by one-third, and (B) for Triggering Events fromJuly 15, 2005 through July 15, 2006, by two-thirds.  Nothing in this provision shall affect inany way the Employee’s entitlement to unvested stock options and restrictedshares pursuant to the Employment Agreement and the Employee shall continue tobe entitled to receive unvested stock options and restricted shares as providedfor in the Employment Agreement upon a Triggering Event.  Subject to Section 4(c) hereof,Employee shall also be eligible to receive 100% of Severance Pay for TriggeringEvents outside of the period from July 15, 2005 through July 15,2006.

 

(iii)                               Forfeiturein the Event Employee Materially Competes Within One Year Following Terminationof Employment.  In the event thatEmployee, within one year following his termination as an employee, MateriallyCompetes With the Company (as defined in Section 6 hereof), then Employeeshall forfeit any Retention Benefit (and earnings or losses thereon) thenremaining in his 3Com Deferred Compensation Plan account, including vestedamounts, and such amounts shall revert to the Company; provided, however, thatthe pro-rated target bonus component of the Retention Benefit (and earnings orlosses thereon), shall not be subject to such forfeiture if Employee remainsemployed by the Company through the end of the Company’s 2004 fiscal year.

 

(c)                                  RetentionBenefit Distribution Election. Employee may elect to receive the Retention Benefit (and creditedearnings and losses thereon) in a lump-sum or in from one to six annualinstallments, one of which installments may, by election, be on Employee’stermination date (which installment payments shall be substantially equal aftergiving effect to earnings and losses between installments) following either (i)his termination as a Company employee, or (ii) upon Employee’s prior writtenelection, his termination as an officer of the Company.  Employee may change his distributionelection by means of a new written election filed with the Company at least oneyear prior to the initial distribution date.

 

(d)                                 ContinuedEmployee Benefits.  At any time whenEmployee’s employment terminates, voluntarily or involuntarily, for any or noreason and with or without Cause, the Company shall provide Company-paidhealth, dental, vision, long-term disability and life insurance coverage at thesame level of coverage as was provided to such Employee immediately prior tothe termination of employment and at the same ratio of Company premium paymentto Employee premium payment as was in effect immediately prior to thetermination of employment (the “Company-Paid Coverage”).  If such coverage included the Employee’sdependents immediately prior to the Change of Control, such dependents shallalso be covered at Company expense. Company-Paid Coverage shall continue until the earlier of (i) twoyears from the date of termination, or (ii) the date upon which theEmployee and his dependents become covered under another employer’s comparablegroup health, dental, vision, long-term disability or life insurance plans that

 

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provide Employeeand his dependents with comparable benefits and levels of coverage.  For purposes of Title X of the ConsolidatedBudget Reconciliation Act of 1985 (“COBRA”), the date of the “qualifying event”for Employee and his or her dependents shall be the date upon which theCompany-Paid Coverage commences, and each month of Company-Paid Coverageprovided hereunder shall offset a month of continuation coverage otherwise dueunder COBRA. This Section 3(d) supercedes Section (b)(i)(iii) of theEmployment Agreement which provides the Employee and his covered dependentswith only eighteen (18) months of continued Employee Benefits upon theoccurrence of specified events.

 

# 4.                                       Changeof Control Benefits.

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## (a)                                  Benefits.  Upon a Change of Control of the Companyoccurring while Employee is still employed by the Company, then subject toEmployee entering into a standard form of mutual release of claims with theCompany in substantially the form attached hereto as Exhibit A (asupdated to reflect applicable state and federal law), the Company shall provideEmployee with the following benefits:

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(i)                                     Lump-SumPayment for Change of Controls Occurring On or After July 15, 2004.  For Change of Controls occurring (A) on orafter July 15, 2004 through July 14, 2005**,** a lump-sum cash payment in an amount equal to two-thirds ofthe Employee’s Annual Compensation, (B) on or after July 15, 2005 throughJuly 14, 2006**,** a lump-sumcash payment in an amount equal to one and one-third of the Employee’s AnnualCompensation, and (C) on or after July 15, 2006, a lump-sum cash paymentin an amount equal to 200% of the Employee’s Annual Compensation.

 

(ii)                                  Pro-RatedBonus Payment.  Regardless of when aChange of Control occurs, a lump-sum cash payment equal to 100% of suchEmployee’s target bonus as in effect for the fiscal year in which the Change ofControl occurs, pro-rated by multiplying such bonus amount by a fraction, thenumerator of which shall be the number of days prior to occurrence of theChange of Control during such fiscal year, and the denominator of which shallbe three-hundred and sixty-five; provided, however, that if Employee remainswith the Company through the end of the fiscal year in which the Change ofControl occurs, then the Company may subtract the amount previously paid toEmployee pursuant to this paragraph from the annual target bonus amountotherwise payable to Employee on account of such fiscal year; provided,further, that with respect to a Change of Control in the Company’s 2004 fiscalyear, such payment shall be reduced by an amount equal to the pro-rated targetbonus component of the Retention Benefit.

 

(iii)                               EquityCompensation Accelerated Vesting. Regardless of when a Change of Control occurs, one hundred percent(100%) of the unvested portion of any stock option, restricted stock or otherCompany equity compensation held by the Employee shall automatically beaccelerated in full so as to become completely vested.

 

(iv)                              Extensionof Stock Option or Stock Appreciation Right Post-Termination Exercisability.  Regardless of when a Change of Controloccurs, the post-termination exercise period of any outstanding Company stockoptions or stock appreciation rights held by Employee shall be extended to thelesser of (A) one year from the date of Employee’s termination, or (B) theoriginal term of such award.

 

## (b)                                 TerminationPrior to a Change of Control.  Inthe event (i) the Employee’s employment is terminated for any reason prior to aChange of Control, then the Employee shall be

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## entitled to receiveseverance pursuant to the severance provisions of the Employment Agreement asmodified by Section 3(b)(ii) of this Agreement and Retention Benefits(upon certain terminations of employment as set forth in Section 3 hereof)and any other benefits as may then be established or provided under theCompany’s existing severance and benefits plans or other written agreementswith the Company; provided, however, that notwithstanding any other provisionsof this Agreement, if Employee’s employment with the Company is terminatedwithout Cause or pursuant to a Voluntary Termination for Good Reason withinthree (3) months prior to a Change of Control, then Employee shall receive, onthe occurrence of the Change of Control, the benefits that he would havereceived under this Agreement had he remained employed with the Company throughsuch Change of Control.

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## (c)                                  NoDual Benefits.  In the event thatEmployee receives benefits pursuant to Section 4(a)(iii) or 4(a)(iv)hereof, he shall not be entitled to receive severance benefits pursuant to theEmployment Agreement or the Section 16 Severance Plan.

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# 5.                                       GoldenParachute Excise Tax Full Gross-Up. In the event that the benefits provided for in this Agreement orotherwise payable to the Employee constitute “parachute payments” within themeaning 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 4999of the Code, then the Employee shall receive (i) a payment from theCompany sufficient to pay such excise tax, plus (ii) an additional paymentfrom the Company sufficient to pay the excise tax and federal and state incomeand employment taxes arising from the payments made by the Company to Employeepursuant to this sentence.  Unless theCompany and the Employee otherwise agree in writing, the determination ofEmployee’s excise tax liability and the amount required to be paid under thisSection 5 shall be made in writing by the Company’s independent auditorswho are primarily used by the Company immediately prior to the Change ofControl (the “Accountants”).  Forpurposes of making the calculations required by this Section 5, theAccountants shall assume that applicable taxes are applied at the maximum ratesprovided by law and may rely on reasonable, good faith interpretationsconcerning the application of Sections 280G and 4999 of the Code.  The Company and the Employee shall furnishto the Accountants such information and documents as the Accountants mayreasonably request in order to make a determination under this Section.  The Company shall bear all costs theAccountants may reasonably incur in connection with any calculations contemplatedby this Section 5.

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# 6.                                       Definitionof Terms.  The following termsreferred to in this Agreement shall have the following meanings:

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## (a)                                  AnnualCompensation.  “Annual Compensation”shall mean an amount equal to the sum of (i) the Employee’s Company annualbase salary as in effect immediately preceding the Change of Control orRetention Benefit payment, as applicable, and (ii) 100% of the Employee’sTarget Bonus.

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## (b)                                 Cause.  “Cause” shall mean (i) an act ofpersonal dishonesty taken by the Employee in connection with hisresponsibilities as an employee and intended to result in substantial personalenrichment of the Employee, (ii) Employee being convicted of a felony,(iii) a willful act by the Employee which constitutes gross misconduct andwhich is injurious to the Company, (iv) following delivery to the Employeeof a written demand for performance from the Company which describes the basisfor the Company’s reasonable belief that the Employee has not substantially

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## performed his duties,continued violations by the Employee of the Employee’s obligations to theCompany which are demonstrably willful and deliberate on the Employee’s part.

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## (c)                                  Changeof Control.  “Change of Control”means the occurrence of any of the following events:

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### (i)                                     AnyPerson becomes the “beneficial owner” as defined in Rule 13d-3 under theSecurities Exchange Act of 1934, as amended (“Beneficial Owner”), directly orindirectly, of securities of the Company representing fifty percent (50%) ormore of the total voting power represented by the Company’s then outstandingvoting securities; or

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### (ii)                                  theconsummation of the sale or disposition by the Company of all or substantiallyall the Company’s assets; or

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### (iii)                               Theconsummation of a merger or consolidation of the Company with any othercorporation, other than a merger or consolidation which would result in thevoting securities of the Company outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being convertedinto voting securities of the surviving entity) at least fifty percent (50%) ofthe total voting power represented by the voting securities of the Company orsuch surviving entity outstanding immediately after such merger or consolidation;or

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### (iv)                              Achange in the composition of the Board occurring within a two-year period, as aresult of which fewer than a majority of the directors are IncumbentDirectors.  “Incumbent Directors” shallmean directors who either (A) are directors of the Company as of the dateupon which this Agreement was entered into, or (B) are elected, ornominated for election, to the Board with the affirmative votes of at least amajority of those directors whose election or nomination was not in connectionwith any transaction described in subsections (i), (ii), or (iii) above, or inconnection with an actual or threatened proxy contest relating to the electionof directors to the Company.

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## (d)                                 Disability.  “Disability” shall mean that the Employeehas been unable to perform his Company duties as the result of his incapacitydue to physical or mental illness with reasonable accommodation, and suchinability continues at least 26 weeks and after the end of the twenty-six (26)week period, the disability is determined to be total and permanent by aphysician selected by the Company or its insurers and acceptable to theEmployee or the Employee’s legal representative (such Agreement as toacceptability not to be unreasonably withheld).  Termination resulting from Disability may only be effected afterat least 30 days’ written notice by the Company of its intention to terminatethe Employee’s employment.  In the eventthat the Employee resumes the performance of substantially all of his dutieshereunder with or without reasonable accommodation before the termination ofhis employment becomes effective, the notice of intent to terminate shallautomatically be deemed to have been revoked.

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## (e)                                  MateriallyCompetes With the Company. “Materially Competes With the Company” shall mean engaging in anybusiness activity (whether as an employee, consultant, proprietor, partner,director or otherwise) that materially competes with the Company or itsaffiliates, including the Huawei joint venture if the Company is then a majorshareholder of same (the “Affiliates”), including developing, selling,marketing, manufacturing, licensing, or distributing products or services thatare competitive with the products and services being developed, sold, marketed,manufactured, licensed, or distributed by the Company or its Affiliates at thetime Employee’s employment terminates; or owning a material interest in, ormaterially participating in

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## the financing, operation,management or control of any entity whose products or services compete in wholeor in part with those of the Company or its Affiliates, provided, however, thatownership (directly or indirectly) of up to five percent (5%) of the capitalstock or other securities of any corporation or other entity shall not bedeemed to Materially Compete With the Company.

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## (f)                                    Person.  “Person” shall have the same meaningaccorded to such term in Sections 13(d) and 14(d) of the SecuritiesExchange Act of 1934, as amended.

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## (g)                                 TargetBonus.  “Target Bonus” shall meanEmployee’s bonus, equal to 100% of Base Salary.

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## (h)                                 VoluntaryTermination for Good Reason. “Voluntary Termination for Good Reason” shall mean the Employeevoluntarily resigns after the occurrence of any of the following:(i) without the Employee’s express written consent, a material reductionof the Employee’s duties, title, authority or responsibilities, relative to theEmployee’s duties, title, authority or responsibilities as in effectimmediately prior to such reduction (including a material reduction occurringthrough a series of immaterial reductions that constitute, in the aggregate, amaterial reduction) or the assignment to Employee of such reduced duties,title, authority or responsibilities; (ii) without the Employee’s expresswritten consent, a material reduction of the facilities and perquisites(including office space and location) available to the Employee immediatelyprior to such reduction (including a material reduction occurring through aseries of immaterial reductions that constitute, in the aggregate, a materialreduction), other than a reduction generally applicable to all seniormanagement of the Company; (iii) a reduction by the Company in the basesalary of the Employee as in effect immediately prior to such reduction;(iv) a material reduction by the Company in the aggregate level ofemployee benefits, including bonuses, to which the Employee was entitledimmediately prior to such reduction with the result that the Employee’saggregate benefits package is materially reduced (including a materialreduction occurring through a series of immaterial reductions that constitute,in the aggregate, a material reduction) (other than a reduction that generally applies to Company employees);(v) the relocation of the Employee to a facility or a location more thanfifty (50) miles from the Employee’s then present location, without theEmployee’s express written consent; provided, however, that Employee’srelocation to the Company’s Marlborough, Massachusetts facility shall notconstitute grounds for a Voluntary Termination for Good Reason; or(vi) any act or set of facts or circumstances which would constitute aconstructive termination of the Employee under Massachusetts law.

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# 7.                                       Non-Solicitation.  In consideration for the Change of Controlbenefits Employee is to receive herein Employee agrees that he will not, at anytime during the one year following his termination date on or following thefull vesting of his Retention Benefit (other than the vesting of the pro-ratedtarget bonus component thereof), directly or indirectly solicit any individualsto leave the Company’s (or any of its subsidiaries’) employ for any reason orinterfere in any other manner with the employment relationships at the timeexisting between the Company (or any of its subsidiaries) and its current orprospective employees.

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# 8.                                       Successors.

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## (a)                                  Company’sSuccessors.  The Company shall causeand require that any successor to the Company (whether direct or indirect andwhether by purchase, merger, consolidation, liquidation or otherwise) to all orsubstantially all of the Company’s business and/or assets assume theobligations under this Agreement and agree expressly to perform the obligationsunder this Agreement in the same manner and to the same extent as the Companywould be required

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## to perform suchobligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall includeany successor to the Company’s business and/or assets which executes anddelivers the assumption agreement described in this Section 8(a) or whichbecomes bound by the terms of this Agreement by operation of law.  In the event that the Company does not meetthe requirements of this Section 8(a), all payments and benefits under theEmployment Agreement and the Management Retention Agreement shall accelerateand immediately become payable and due as obligation of the Company as well asany successor.

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## (b)                                 Employee’sSuccessors.  The terms of this Agreementand all rights of the Employee hereunder shall inure to the benefit of, and beenforceable by, the Employee’s personal or legal representatives, executors,administrators, successors, heirs, distributees, devisees and legatees.

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# 9.                                       DisputeResolution.

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## (a)                                  Theparties shall first meet to settle any dispute through good faith negotiationor non-binding mediation.  If notsettled by good faith negotiation or non-binding mediation between the partieswithin 30 days from the date one party requests in writing to meet the otherparty, then to the extent permitted by law, any dispute or controversy arisingout of or relating to this Agreement or the Employment Agreement, or theinterpretation, validity, construction, performance, breach, or termination ofeither agreement shall be finally settled by binding arbitration by anarbitrator voluntarily agreed to by the parties or, in the absence of suchagreement, by the American Arbitration Association, to be held in Boston,Massachusetts, in accordance with the National Rules for the Resolution ofEmployment Disputes then in effect of the American Arbitration Association (the“Rules”).  The arbitrator may grantinjunctions or other relief in such dispute or controversy.  The decision of the arbitrator shall beconfidential, final, conclusive and binding on the parties to thearbitration.  Judgment may be enteredunder a protective order on the arbitrator’s decision in any court havingjurisdiction.  The Company shall pay allcosts of any mediation or arbitration; provided, however, that each party shallpay its own attorney and advisor fees.

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## (b)                                 Thearbitrator shall apply Massachusetts law to the merits of any dispute or claim,without reference to rules of conflict of law with respect to any disputesarising under or relating to this Agreement. The arbitrator shall apply California law to the merits of any disputeor claim, without reference to the rules of conflict of law, to any disputearising under or relating to the Employment Agreement.  The arbitration proceedings shall begoverned by federal arbitration law and by the Rules, without reference tostate arbitration law.

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This Section 9supercedes the Dispute Resolution provision appearing on the fifth page of theEmployment Agreement which is no longer in effect and shall be considered nulland void.

 

# 10.                                 Notice.

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## (a)                                  General.  Notices and all other communicationscontemplated by this Agreement shall be in writing and shall be deemed to havebeen duly given when personally delivered or one day following mailing viaFederal Express or similar overnight courier service.  In the case of the Employee, mailed notices shall be addressed tohim at the home address which he most recently communicated to the Company inwriting.  In the case of the Company,mailed notices shall be addressed to its corporate headquarters, and allnotices shall be directed to the attention of its Secretary.

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## (b)                                 Noticeof Termination.  Any termination bythe Company for Cause or by the Employee pursuant to a Voluntary Terminationfor Good Reason shall be communicated by a notice of termination to the otherparty hereto given in accordance with Section 9(a) of this Agreement.  Such notice shall indicate the specifictermination provision in this Agreement relied upon, shall set forth inreasonable detail the facts and circumstances claimed to provide a basis fortermination under the provision so indicated, and shall specify the terminationdate (which shall be not more than 30 days after the giving of suchnotice).  The failure by the Employee toinclude in the notice any fact or circumstance which contributes to a showingof Voluntary Termination for Good Reason shall not waive any right of the Employeehereunder or preclude the Employee from asserting such fact or circumstance inenforcing his rights hereunder.

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# 11.                                 MiscellaneousProvisions.

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## (a)                                  NoDuty to Mitigate.  The Employeeshall not be required to mitigate the value of any benefits contemplated bythis Agreement, nor shall any such benefits be reduced by any earnings orbenefits that the Employee may receive from any other source.

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## (b)                                 Waiver.  No provision of this Agreement shall bemodified, waived or discharged unless the modification, waiver or discharge isagreed to in writing and signed by the Employee and by two authorized officersof the Company (other than the Employee). No waiver, delay or omission by either party in exercising any rightwith respect to any breach of, or of non-compliance with, any condition orprovision of this Agreement by the other party shall be considered a waiver ofany other condition or provision or of the same condition or provision atanother time.  A waiver or consent givenby the Company or the Employee on any one occasion shall be effective only inthat instance and shall not be construed as a bar or waiver of any right on anyother occasion.

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## (c)                                  WholeAgreement.  This Agreement, theEmployment Agreement, the 3Com  1983Stock Option Plan, Employee’s stock option and restricted stock agreementsunder the 3Com 1983 Stock Option Plan, the Confidential Information andInvention Assignment Agreement previously entered into by and between theCompany and Executive****and the indemnification agreementpreviously entered into by and between the Company and Executive (together, the“Agreement”) represent the entire agreement and understanding between theCompany and Employee concerning Employee’s employment relationship with theCompany, and supersede and replace any and all prior agreements and understandingsconcerning Employee’s employment relationship with the Company, including theoffer letter to Employee dated June 16, 1998 and all previous versions ofthis Agreement.

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## (d)                                 Choiceof Law.  This Agreement shall begoverned by and interpreted and construed under the laws of the Commonwealth ofMassachusetts, without regard to its rules of conflict of law.  The Employee’s Employment Agreement shallcontinue to be governed by and interpreted and construed under the laws of theState of California with regard to its rules of conflict of laws.  The parties hereby irrevocably submit to andacknowledge and recognize the jurisdiction of the courts of the Commonwealth ofMassachusetts, or if appropriate, a federal court located in Massachusetts(which courts, for purposes of this agreement, are the only courts of competentjurisdiction), over any suit, action or other proceeding to enforce anarbitration award made in connection with a claim, dispute or conflict arisingout of this Agreement or the Employment Agreement or for any other claim,dispute or conflict arising out of or relating to the Employee’s employment.

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## (e)                                  Severability.  The invalidity or unenforceability of anyprovision or provisions of this Agreement shall not affect the validity orenforceability of any other provision hereof, which shall remain in full forceand effect.

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## (f)                                    Counterparts.  This Agreement may be executed incounterparts, each of which shall be deemed an original, but all of whichtogether will constitute one and the same instrument.

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IN WITNESSWHEREOF, each of the parties has executed this Agreement.

 
| **COMPANY**  | **3COM  CORPORATION**                                 |
|--------------|-------------------------------------------------------|
|         |                                                  |
|         |                                                  |
|         | By:                                                   | /s/ Eric Benhamou |
|         |                                                  | ERIC BENHAMOU |
|         |                                                  |   |
|         | Title:  Chairman                                 |
|         |                                                  |   |
| and          |                                                  |   |   |
|         |                                                  |   |
|         | By:                                                   | /s/ Mark D. Michael |
|         |                                                  | MARK D. MICHAEL |
|         |                                                  |   |
|         | Title:  S.V.P., General  Counsel & Secretary |
|         |                                                  |   |
|         |                                                  |
| **EMPLOYEE** | By:                                                   | /s/ Bruce L. Claflin |
|         |                                                  | BRUCE L. CLAFLIN |
|              |                                                       |  |  |  |

 

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**EXHIBIT A**

 

**MUTUAL RELEASE OF CLAIMS**

 

This Mutual Release ofClaims (“Release”) is made by and between 3Com Corporation, Inc. (the“Company”) and                                    (“Employee”).

 

**RECITALS**

 

WHEREAS, the Company andEmployee (collectively referred to as “the Parties”) have agreed that Employeeis to receive certain benefits pursuant to the agreement to which this Releaseis attached as Exhibit A (the “Management Retention Agreement”);

 

NOW THEREFORE, inconnection with the promises made herein and in the Management RetentionAgreement, the Company and Employee hereby agree as follows:

 

1.                                       ConfidentialInformation.  Employee shallcontinue to maintain the confidentiality of all confidential and proprietaryinformation of the Company and shall continue to comply with the terms andconditions of the Confidential Information and Invention Assignment Agreementpreviously entered into by and between the Company and Employee.

 

2.                                       Paymentof Salary.  The Company representsand Employee acknowledges and represents that the Company has paid (or will paypursuant to the terms of the applicable plan or program and the ManagementRetention Agreement) all salary, wages, bonuses, commissions, accrued vacationand expense reimbursements and any and all other benefits due to Employeethrough the date of signing of this Release.

 

3.                                       Releaseof Claims. Employee agrees that the severance benefits provided pursuant tothe Management Retention Agreement represent settlement in full of alloutstanding obligations owed to Employee by the Company or any subsidiary ofthe Company.  Employee and the Company,on behalf of themselves and their respective heirs, agents, representatives,immediate family members, executors, assigns, directors, employees, attorneys,investors, shareholders, administrators, affiliates, divisions, subsidiaries,parents, predecessor and successor corporations, hereby fully and foreverrelease each other and their respective heirs, agents, representatives,immediate family members, executors, assigns, directors, employees, attorneys,investors, shareholders, administrators, affiliates, divisions, subsidiaries,parents, predecessor and successor corporations and agree not to sue orotherwise institute or cause to be instituted any legal or administrative proceedingsconcerning any claim, duty, obligation or cause of action relating to anymatters of any kind, whether presently known or unknown, suspected orunsuspected, that Employee or the Company may possess against each other fromany omissions, acts or facts that have occurred up until and including theEffective Date of this Release including, without limitation,

 

(a)                                  anyand all claims relating to or arising from Employee’s relationship with theCompany or any subsidiary of the Company and the termination of thatrelationship;

 

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(b)                                 anyand all claims relating to, or arising from, Employee’s right to purchase, oractual purchase of shares of stock of the Company or any subsidiary of theCompany, including, without limitation, any claims for fraud, misrepresentation,breach of fiduciary duty, breach of duty under applicable state corporate law,and securities fraud under any state or federal law;

 

(c)                                  anyand all claims for wrongful discharge of employment; termination in violationof public policy; discrimination; breach of contract, both express and implied;breach of a covenant of good faith and fair dealing, both express and implied;promissory estoppel; negligent or intentional infliction of emotional distress;negligent or intentional misrepresentation; negligent or intentionalinterference with contract or prospective economic advantage; unfair businesspractices; defamation; libel; slander; negligence; personal injury; invasion ofprivacy; false imprisonment; and conversion;

 

(d)                                 anyand all claims for violation of any federal, state or municipal statute,including, but not limited to, Title VII of the Civil Rights Act of 1964,the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967,the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, theEmployee Retirement Income Security Act of 1974, The Worker Adjustment andRetraining Notification Act, Older Workers Benefit Protection Act; theCalifornia Fair Employment and Housing Act, and the California Labor Code andall amendments to each such Act as well as the regulations issued thereunder;

 

(e)                                  anyand all claims for violation of the federal, or any state, constitution;

 

(f)                                    anyand all claims arising out of any other laws and regulations relating toemployment or employment discrimination; and

 

(g)                                 anyand all claims for attorneys’ fees and costs.

 

Notwithstandinganything to the contrary in this Section 3, nothing in this Release isintended to relieve the Company of its obligations under California Labor Codesection 2802 or any other federal or state statute or common law principleof similar effect, and the release set forth under this Section 3 doesnot  extend to any obligations incurredunder such statutes or principles or this Release.  Employee and the Company agree that the release set forth in thisSection 3 shall otherwise be and remain in effect in all respects as acomplete general release as to the matters released.

 

4.                                       Acknowledgmentof Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any rights he mayhave under the Age Discrimination in Employment Act of 1967 (“ADEA”) and thatthis waiver and release is knowing and voluntary.  Employee and the Company agree that this waiver and release doesnot apply to any rights or claims that may arise under the ADEA after theEffective Date of this Release. Employee acknowledges that the consideration given for this waiver andRelease is in addition to anything of value to which Employee was alreadyentitled.  Employee further acknowledgesthat he has been advised by this writing that (a) he should consult with anattorney prior to executing this Release; (b) he has at least twenty-one(21) days within which to consider this Release; (c) he has seven (7) daysfollowing the execution of this Release by the Parties to revoke the Release;and (d) this Release shall not be effective until the revocation period hasexpired.  Any revocation should be inwriting and delivered to a member of

 

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the Board ofDirectors by close of business on the seventh day from the date that Employeesigns this Release.

 

5.                                       CivilCode Section 1542.  Employeeand the Company represent that they are not aware of any claim other than theclaims that are released by this Release. Employee and the Company acknowledge that they have been advised bylegal counsel and are familiar with the provisions of California Civil CodeSection 1542, which provides as follows:

 

**A GENERAL RELEASE DOESNOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST INHIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVEMATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.**

** **

Employee and theCompany, being aware of said code section, agree to expressly waive any rightsthey may have thereunder, as well as under any other federal or state statuteor common law principles of similar effect.

 

6.                                       NoPending or Future Lawsuits. Employee and the Company represent to each other that they have nolawsuits, claims, or actions pending in their name, or on behalf of any otherperson or entity, against each other or any other person or entity referred toherein.  Employee and the Company alsorepresent to each other that as of the Effective Date, they do not have anybasis for, and do not intend to bring any claims on their behalf or on behalfof any other person or entity against each other or any other person or entityreferred to herein.

 

7.                                       NoCooperation.  Employee agrees thathe will not counsel or assist any attorneys or their clients in thepresentation or prosecution of any lawsuits, disputes, claims, charges, orcomplaints by any third party against the Company (including any subsidiary ofthe Company, and/or any officer, director, employee, agent, representative,shareholder or attorney of the Company or any subsidiary in his, her or itscapacity as such on behalf of the Company or any subsidiary) unless under asubpoena, court order or otherwise required by law to do so.

 

8.                                       TaxConsequences.  The Company makes norepresentations or warranties with respect to the tax consequences of thepayment of any sums to Employee under the terms of the Management RetentionAgreement and this Release.  Employeeagrees and understands that he is responsible for payment, if any, of local,state and/or federal taxes on the sums paid thereunder by the Company and anypenalties or assessments thereon.

 

9.                                       Costs.  The Parties shall each bear their own costs,expert fees, attorneys’ fees and other fees incurred in connection with thisRelease.

 

10.                                 Authority.  The Company represents and warrants that theundersigned has the authority to act on behalf of the Company and to bind theCompany and all who may claim through it to the terms and conditions of thisRelease.  Employee represents andwarrants that he has the capacity to act on his own behalf and on behalf of allwho might claim through him to bind them to the terms and conditions of thisRelease.  Each Party warrants andrepresents that there are no liens

 

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or claims of lienor assignments in law or equity or otherwise of or against any of the claims orcauses of action released herein.

 

11.                                 NoRepresentations.  Each Partyrepresents that it has had the opportunity to consult with an attorney, and hascarefully read and understands the scope and effect of the provisions of thisRelease.  Neither party has relied uponany representations or statements made by the other party hereto which are notspecifically set forth in this Release.

 

12.                                 Severability.  In the event that any provision hereofbecomes or is declared by a court of competent jurisdiction to be illegal,unenforceable or void, this Release shall continue in full force and effectwithout said provision.

 

13.                                 EntireAgreement.  This Release, theManagement Retention Agreement and the Confidential Information and InventionAssignment Agreement previously entered into by and between the Company andEmployee represent the entire agreement and understanding between the Companyand Employee concerning the subject matter herein, and supersede and replaceany and all prior agreements and understandings.

 

14.                                 NoOral Modification.  This Release mayonly be amended in writing signed by Employee and a duly authorized officer(other than Employee) of the Company.

 

15.                                 EffectiveDate.  This Release is effectiveeight days after it has been signed by both Parties (the “Effective Date”).

 

16.                                 Counterparts.  This Release may be executed incounterparts, and each counterpart shall have the same force and effect as anoriginal and shall constitute an effective, binding agreement on the part ofeach of the undersigned.

 

17.                                 VoluntaryExecution of Release.  This Releaseis executed voluntarily and without any duress or undue influence on the partor behalf of the Parties hereto, with the full intent of releasing allclaims.  The Parties acknowledge that:

 

(a)                                  Theyhave read this Release;

 

(b)                                 Theyhave been represented in the preparation, negotiation, and execution of thisRelease by legal counsel of their own choice or that they have voluntarilydeclined to seek such counsel;

 

(c)                                  Theyunderstand the terms and consequences of this Release and of the releases itcontains;

 

(d)                                 They are fully aware of the legal and binding effect of this Release.

 

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IN WITNESS WHEREOF, theParties have executed this Release on the respective dates set forth below.

 
|   | 3Com Corporation        |
|--------|-------------------------|
|   |                    |
|   |                    |
| Dated: |                    |   |   |
|   | By:                     |
|   |                    |
|   |                    |
|   | EMPLOYEE, an individual |
|   |                    |
|   |                    |
| Dated: |                    |   |   |

 

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