5. Paragraph A of Section 4 is revised in its entirety to read as follows:“A. Severance Amounts.     i. One (1) year of the Executive’s annualized base salary as of the TerminationDate, subject to all applicable taxes and withholdings, with payment commencingwithin sixty-five (65) days after the Executive’s Termination Date in substantiallyequal installments corresponding to the Company’s normal payroll practices andcontinuing for a period of twelve (12) months, provided that the Executive continuesto comply with all terms and conditions of the Release Agreement during the twelve(12) month period. Each payment shall be considered a separate payment and not partof a series of installments for purposes of the short-term deferral rules underTreasury Regulation Section 1.409A-1(b)(4)(i) and the exemption for involuntaryterminations under separation pay plans under Treasury Regulation Section1.409A-1(b)(9)(iii). As a result, the following payments are exempt from therequirements of Code Section 409A:     (a) payments that are made by the fifteenth (15th) day of the thirdmonth of the calendar year following the year of the Executive’s Termination Date,and     (b) any additional payments that are made on or before the last day of thesecond (2nd) calendar year following the year of the Executive’sTermination Date and that do not exceed the lesser of two (2) times: (A) theExecutive’s annualized compensation based upon the annual rate of pay for servicesprovided to the Company for the Executive’s taxable year that precedes the taxableyear in which the Termination Date occurs (adjusted for any increase during thatyear that was expected to continue indefinitely if the Executive’s employment hadnot terminated); or (B) the limit under Code Section 401(a)(17) then in effect.     Notwithstanding the preceding provisions, to the extent that the payments to bemade during the first six (6) month period following the Executive’s TerminationDate exceed the amounts exempt from Code Section 409A under this paragraph, suchpayments shall be paid in a single lump sum on the first (1st) dayfollowing the six (6) month anniversary of the Executive’s Termination Date.     ii. A pro-rated amount of the Executive’s earned incentive bonus for the bonusperiod in which the Termination Date occurs, to be calculated by multiplying theearned bonus amount (based on the Company’s actual attainment of applicableperformance metrics) by a fraction, the numerator of which shall be the number ofcalendar days between the beginning of the applicable bonus period to theTermination Date and the denominator of which shall be the number of calendar dayswithin the applicable bonus period, to be paid within sixty-five (65) days of theTermination Date (the payment of which is intended to be exempt from Section 409A ofthe Internal Revenue Code of 1986, as amended (the “Code) pursuant to the short-termdeferral rules of Treasury Regulation 1.409A-1(b)(4)).
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     6. A new sentence is added immediately following the second sentence of Paragraph B of Section4 of the Plan to read as follows:“Such benefit is intended to be exempt from Code Section 409A pursuant to TreasuryRegulation Section 1.409A-1(b)(9)(v)(B).”     7. Subparagraph D-i of Section 4 is revised in its entirety to read as follows:“i. With respect to Executive’s then outstanding, unvested equity awards, other thanperformance-based awards, six (6) months accelerated vesting, with transfer ofshares, payment of cash, or removal of restrictions on shares, whichever applicable,occurring as soon as practicable, but in no event later than the sixtieth(60th) day following the Termination Date. Notwithstanding theforegoing, if the Executive is a “specified employee” (within the meaning ofTreasury Regulation Section 1.409A-1(i) and as applied according to procedures ofthe Company) and the award is subject to Code Section 409A, transfer of sharesshall occur on the first market day following the six (6) month anniversary of theExecutive’s termination of employment.”     8. Section 5 is revised in its entirety to read as follows:“(a) Payment of Severance Benefits. Notwithstanding anything to thecontrary in this Agreement, if Executive is a “specified employee” within themeaning of Section 409A and as applied according to procedures of the Company at thetime of Executive’s termination of employment (other than due to death), then theseverance benefits payable to Executive under this Agreement, if any, and any otherseverance payments or separation benefits payments that may be considered deferredcompensation under Section 409A (together, the “Deferred Compensation SeparationBenefits”) otherwise due to Executive on or within the six (6) month periodfollowing Executive’s termination of employment will accrue during such six (6)month period and will become payable in a lump sum payment (less applicablewithholding taxes) on the date six (6) months and one (1) day following the date ofExecutive’s termination of employment. All subsequent payments, if any, will bepayable in accordance with the payment schedule applicable to each payment orbenefit. Notwithstanding anything herein to the contrary, if Executive diesfollowing his or her termination of employment but prior to the six (6) monthanniversary of his or her date of termination, then any payments delayed inaccordance with this paragraph will be payable in a lump sum (less applicablewithholding taxes) to Executive’s estate as soon as administratively practicableafter the date of Executive’s death and all other Deferred Compensation SeparationBenefits will be payable in accordance with the payment schedule applicable to eachpayment or benefit. Each payment of severance benefits to Executive under thisAgreement that is made by March 15 of the calendar year following Executive’stermination of employment and is intended to not constitute a “deferral ofcompensation” by virtue of the “short term deferral” rule of Treasury RegulationsSection 1.409A-1(b)(4) shall constitute a “separate payment” for purposes ofapplication of that rule.
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(b) Amendments to this Agreement with Respect to Section 409A. Theseverance payments and other benefits provided under this Agreement are intended tonot constitute a “deferral of compensation” under Section 409A, to the extentpossible, or, to the extent not so possible, to comply with the requirements ofSections 409A(a)(2), (3) and (4) of the Code so that none of the severance paymentsand benefits to be provided hereunder will be subject to the income inclusion,additional tax or interest provisions of Section 409A(a)(1), and any ambiguitiesherein will be interpreted in accordance with that intent. The Company andExecutive agree to work together in good faith to consider amendments to thisAgreement and to take such reasonable actions which are necessary, appropriate ordesirable to avoid imposition of any additional tax or interest or incomerecognition prior to actual payment to Executive under Section 409A(a)(1).”* * *(signature page follows)
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     IN WITNESS WHEREOF, each of the parties has executed this First Amendment to the Agreement, inthe case of the Company by a duly authorized Executive’s, as of the day and year written below.             COMPANY:                     3COM CORPORATION                   By:     Date:                            EXECUTIVE:                         Date:               
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