<PAGE>


                           EMPLOYEE MATTERS AGREEMENT

                                     BETWEEN

                                3COM CORPORATION

                                       AND

                                   PALM, INC.

                                 EFFECTIVE AS OF

                                FEBRUARY 26, 2000
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                                TABLE OF CONTENTS


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                                                                                                                   PAGE
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ARTICLE I DEFINITIONS.................................................................................................1

         1.1      3Com................................................................................................1
         1.2      3Com Employee.......................................................................................1
         1.3      3Com Group..........................................................................................2
         1.4      3Com Stock Value....................................................................................2
         1.5      3Com Terminated Employee............................................................................2
         1.6      401(k) Plan.........................................................................................2
         1.7      AD&D Plan...........................................................................................2
         1.8      Affiliate...........................................................................................2
         1.9      Agreement...........................................................................................2
         1.10     Ancillary Agreements................................................................................2
         1.11     ASO Contracts.......................................................................................2
         1.12     Assets..............................................................................................2
         1.13     Benefits Committee..................................................................................2
         1.14     Bonus Plan..........................................................................................2
         1.15     Business Travel Accident Insurance..................................................................3
         1.16     COBRA...............................................................................................3
         1.17     Code................................................................................................3
         1.18     Deferred Compensation Plan..........................................................................3
         1.19     Disability Plan.....................................................................................3
         1.20     Distribution........................................................................................3
         1.21     Distribution Date...................................................................................3
         1.22     DOL.................................................................................................3
         1.23     Educational Assistance Program......................................................................3
         1.24     Employee Assistance Program.........................................................................4
         1.25     ERISA...............................................................................................4
         1.26     Executive Bonus Plan................................................................................4
         1.27     FMLA................................................................................................4
         1.28     Food Programs.......................................................................................4
         1.29     Foreign Plan........................................................................................4
         1.30     Fringe Benefit Plans................................................................................4
         1.31     FSA/Dependent Reimbursement Plan....................................................................4
         1.32     FSA/Medical Reimbursement Plan......................................................................4
         1.33     General Assignment and Assumption Agreement.........................................................4
         1.34     Group Insurance Policies............................................................................5
         1.35     Group Life Plan.....................................................................................5
         1.36     HCFA................................................................................................5
         1.37     Health and Welfare Plans............................................................................5
         1.38     Health Plans........................................................................................5
         1.39     HMO.................................................................................................5

                                      ii
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                                TABLE OF CONTENTS
                                   (Continued)

         1.40     HMO Agreements......................................................................................5
         1.41     IPO.................................................................................................5
         1.42     IPO Closing Date....................................................................................5
         1.43     IPO Registration Statement..........................................................................5
         1.44     IRS.................................................................................................5
         1.45     Leave of Absence Plans..............................................................................5
         1.46     Liabilities.........................................................................................6
         1.47     Long-Term Care Plan.................................................................................6
         1.48     Long-Term Disability Plan...........................................................................6
         1.49     Master Transitional Services Agreement..............................................................6
         1.50     Material Feature....................................................................................6
         1.51     Nasdaq..............................................................................................6
         1.52     Non-U.S. Plan.......................................................................................6
         1.53     Option..............................................................................................7
         1.54     Outsourcing.........................................................................................7
         1.55     Palm................................................................................................7
         1.56     Palm Business.......................................................................................7
         1.57     Palm Claims.........................................................................................7
         1.58     Palm Employee.......................................................................................7
         1.59     Palm Group..........................................................................................7
         1.60     Palm Stock Value....................................................................................7
         1.61     Palm Terminated Employee............................................................................7
         1.62     Palm Transferred Employee...........................................................................8
         1.63     Participating Company...............................................................................8
         1.64     Person..............................................................................................8
         1.65     Plan................................................................................................8
         1.66     Post-Distribution Period............................................................................8
         1.67     Premium Plan........................................................................................8
         1.68     PTO.................................................................................................9
         1.69     QDRO................................................................................................9
         1.70     QMCSO...............................................................................................9
         1.71     Rabbi Trust.........................................................................................9
         1.72     Ratio...............................................................................................9
         1.73     Record Date.........................................................................................9
         1.74     Restricted Stock....................................................................................9
         1.75     Revenue.............................................................................................9
         1.76     Sabbatical Plan.....................................................................................9
         1.77     SEC.................................................................................................9
         1.78     Section 125 Plan...................................................................................10

                                    -iii-
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                                TABLE OF CONTENTS
                                   (Continued)

         1.79     Separation.........................................................................................10
         1.80     Separation Agreement...............................................................................10
         1.81     Separation Date....................................................................................10
         1.82     Severance Plan.....................................................................................10
         1.83     Short-Term Disability Plan.........................................................................10
         1.84     SOS Plan...........................................................................................10
         1.85     Stock Plan.........................................................................................10
         1.86     Stock Purchase Plan................................................................................10
         1.87     Subsidiary.........................................................................................11
         1.88     Tax Sharing Agreement..............................................................................11
         1.89     Unemployment Insurance Program.....................................................................11
         1.90     WellCom Program....................................................................................11
         1.91     Workers'Compensation Plan..........................................................................11

ARTICLE II GENERAL PRINCIPLES........................................................................................12

         2.1      Assumption of Palm Liabilities.....................................................................12
         2.2      Establishment of Palm Plans........................................................................12
         2.3      Palm Under No Obligation to Maintain Plans.........................................................13
         2.4      Palm's Participation in 3Com Plans.................................................................13
         2.5      Terms of Participation by Palm Transferred Employees in Palm Plans.................................14
         2.6      Benefits Committee and Dispute Resolution..........................................................15
         2.7      Foreign Plans......................................................................................15

ARTICLE III DEFINED CONTRIBUTION PLAN................................................................................16

         3.1      401(k) Plan........................................................................................16

ARTICLE IV NON-QUALIFIED PLAN........................................................................................17

         4.1      Deferred Compensation Plan.........................................................................17

ARTICLE V HEALTH AND WELFARE PLANS...................................................................................18

         5.1      Health Plans as of the Distribution Date...........................................................18
         5.2      Health Plans from the Separation Date through the Distribution Date................................19
         5.3      Group Life Plan....................................................................................19
         5.4      AD&D Plan..........................................................................................20
         5.5      Severance Plan.....................................................................................20
         5.6      Sabbatical Plan....................................................................................20
         5.7      Disability Plans...................................................................................21
         5.8      Business Travel Accident Insurance.................................................................21
         5.9      Long-Term Care Plan................................................................................22
         5.10     Section 125 Plan...................................................................................22

                                     -iv-
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                                TABLE OF CONTENTS
                                   (Continued)

         5.11     COBRA..............................................................................................22
         5.12     Leave of Absence Plans and FMLA....................................................................23
         5.13     Workers'Compensation Plan..........................................................................23
         5.14     Administrative Services............................................................................24

ARTICLE VI EQUITY AND OTHER COMPENSATION.............................................................................25

         6.1      Bonus Plan.........................................................................................25
         6.2      Executive Bonus Plan...............................................................................25
         6.3      3Com Options.......................................................................................26
         6.4      3Com Restricted Stock..............................................................................26
         6.5      Stock Purchase Plan................................................................................27
         6.6      Administrative Services............................................................................27

ARTICLE VII FRINGE AND OTHER BENEFITS................................................................................28

         7.1      Employee Assistance Program........................................................................28
         7.2      Educational Assistance Program.....................................................................28
         7.3      Credit Union.......................................................................................28
         7.4      Cafeteria and Related Subsidies....................................................................28
         7.5      Employee Product Discounts and Company Store.......................................................29
         7.6      WellCom............................................................................................29
         7.7      SOS Plan...........................................................................................29
         7.8      Other Benefits.....................................................................................29
         7.9      Administrative Services............................................................................30

ARTICLE VIII ADMINISTRATIVE PROVISIONS...............................................................................31

         8.1      Master Transitional Services Agreement.............................................................31
         8.2      Payment of Liabilities, Plan Expenses and Related Matters..........................................31
         8.3      Transitional Staffing Services.....................................................................32
         8.4      Sharing of Participant Information.................................................................32
         8.5      Reporting and Disclosure Communications to Participants............................................32
         8.6      Audits Regarding Vendor Contracts..................................................................32
         8.7      Employee Identification Numbers....................................................................33
         8.8      Beneficiary Designations...........................................................................33
         8.9      Requests for IRS and DOL Opinions..................................................................33
         8.10     Fiduciary Matters..................................................................................33
         8.11     Consent of Third Parties...........................................................................33
         8.12     3Com Intranet......................................................................................33
         8.13     Tax Cooperation....................................................................................33

                                     -v-
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                                TABLE OF CONTENTS
                                   (Continued)

ARTICLE IX EMPLOYMENT-RELATED MATTERS................................................................................34

         9.1      Terms of Palm Employment...........................................................................34
         9.2      HR Data Support Systems............................................................................34
         9.3      Non-Solicitation of Employees......................................................................34
         9.4      Employment of Employees with U.S.Work Visas........................................................34
         9.5      Confidentiality and Proprietary Information........................................................35
         9.6      PTO................................................................................................35
         9.7      Personnel Records..................................................................................35
         9.8      Medical Records....................................................................................35
         9.9      Unemployment Insurance Program.....................................................................35
         9.10     Non-Termination of Employment; No Third-Party Beneficiaries........................................36
         9.11     Employment Litigation..............................................................................36

ARTICLE X GENERAL PROVISIONS.........................................................................................37

         10.1     Effect if Separation, IPO and/or Distribution Does Not Occur.......................................37
         10.2     Relationship of Parties............................................................................37
         10.3     Affiliates.........................................................................................37
         10.4     Incorporation of Separation Agreement Provisions...................................................37
         10.5     Governing Law......................................................................................37
         10.6     Assignment.........................................................................................37
         10.7     Severability.......................................................................................38
         10.8     Interpretation.....................................................................................38
         10.9     Amendment..........................................................................................38
         10.10    Termination........................................................................................38
         10.11    Conflict...........................................................................................38
         10.12    Counterparts.......................................................................................38
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                                     -vi-
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                                TABLE OF CONTENTS

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SCHEDULES                                                                                PAGE
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SCHEDULE 2.7                        FOREIGN PLANS...........................................i

SCHEDULE 5.1(a)                     PALM HEALTH AND WELFARE PLANS...........................ii

SCHEDULE 5.1(c)(i)                  THIRD PARTY ASO.........................................iii

SCHEDULE 5.1(c)(ii)                 GROUP INSURANCE POLICIES................................iv

SCHEDULE 5.1(c)(iii)                HMO AGREEMENT...........................................v

SCHEDULE 5.2(a)                     3COM HEALTH AND WELFARE PLANS...........................vi

SCHEDULE 6.3                        OPTIONS HELD BY CERTAIN NON-U.S PALM....................vii
                                    TRANSFERRED EMPLOYEES

SCHEDULE 6.4                        3COM RESTRICTED STOCK HELD BY NON-U.S PALM..............viii
                                    TRANSFERRED EMPLOYEES

SCHEDULE 7.8                        OTHER FRINGE BENEFITS..................................ix
</TABLE>

                                      vii
<PAGE>


                           EMPLOYEE MATTERS AGREEMENT

         This EMPLOYEE MATTERS AGREEMENT is entered into on February 26,
2000, between 3Com Corporation, a Delaware corporation, and Palm, Inc., a
Delaware corporation. Capitalized terms used herein (other than the formal
names of 3Com Plans (as defined below) and related trusts of 3Com) and not
otherwise defined, shall have the respective meanings assigned to them in
Article I hereof.

         WHEREAS, the Board of Directors of 3Com has determined that it is in
the best interests of 3Com and its shareholders to separate 3Com's existing
businesses into two (2) independent businesses, 3Com and the Palm Business;
and

         WHEREAS, in furtherance of the foregoing, 3Com and Palm have agreed
to enter into this Agreement to allocate between them Assets, Liabilities and
responsibilities with respect to certain employee compensation, benefit
plans, programs and arrangements, and certain employment matters;

         NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:



                                    ARTICLE I

                                   DEFINITIONS

         Wherever used in this Agreement, the following terms shall have the
meanings indicated below, unless a different meaning is plainly required by
the context. The singular shall include the plural, unless the context
indicates otherwise. Headings of sections are used for convenience of
reference only, and in case of conflict, the text of this Agreement, rather
than such headings, shall control:

         1.1   3COM. "3Com" means 3Com Corporation, a Delaware corporation.
In all such instances in which 3Com is referenced in this Agreement, it shall
also be deemed to include a reference to each member of the 3Com Group,
unless it specifically provides otherwise; 3Com shall be solely responsible
to Palm for ensuring that each member of the 3Com Group complies with the
applicable terms of this Agreement.

         1.2   3COM EMPLOYEE. "3Com Employee" means an individual who, on the
Distribution Date, is: (a) either actively employed by, or on leave of
absence from, the 3Com Group; (b) a 3Com Terminated Employee; or (c) an
employee or group of employees designated as 3Com Employees by 3Com and Palm,
by mutual agreement.

<PAGE>

         1.3   3COM GROUP. "3Com Group" means 3Com and each Subsidiary and
Affiliate of 3Com (or any predecessor organization thereof).

         1.4   3COM STOCK VALUE. "3Com Stock Value" means the closing
per-share price of 3Com common stock as listed on the Nasdaq on the last
trading day before the Distribution.

         1.5   3COM TERMINATED EMPLOYEE. "3Com Terminated Employee" means any
individual who is a former employee of the 3Com Group and who, on the
Distribution Date, is not a Palm Transferred Employee.

         1.6   401(k) PLAN. "401(k) Plan," when immediately preceded by
"3Com," means the 3Com Corporation 401(k) Plan, a defined contribution plan.
When immediately preceded by "Palm," "401(k) Plan" means the defined
contribution plan to be established by Palm pursuant to Section 2.2 and
Article III.

         1.7   AD&D PLAN. "AD&D Plan," when immediately preceded by "3Com,"
means the 3Com Accidental Death and Dismemberment ("AD&D") Plan. When
immediately preceded by "Palm," "AD&D Plan" means the accidental death and
dismemberment plan to be established by Palm pursuant to Sections 2.2 and 5.4.

         1.8   AFFILIATE. "Affiliate" means, with respect to any specified
Person, means any entity that Controls, is Controlled by, or is under common
Control with such Person. For this purpose, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through ownership of voting
securities or other interests, by control, or otherwise.

         1.9   AGREEMENT. "Agreement" means this Employee Matters Agreement,
including all the Schedules hereto, and all amendments made hereto from time
to time.

         1.10  ANCILLARY AGREEMENTS. "Ancillary Agreements" means all of the
underlying agreements, documents and instruments referred to, contemplated
by, or made a part of the Separation Agreement.

         1.11  ASO CONTRACTS. "ASO Contracts" is defined in Subsection
5.1(c)(i) and Schedule 5.1(c)(i).

         1.12  ASSETS. "Assets" is defined in Section 4.4 of the General
Assignment and Assumption Agreement.

         1.13  BENEFITS COMMITTEE. "Benefits Committee" means the benefits
committee established, implemented and operated pursuant to Section 2.6.

         1.14  BONUS PLAN. "Bonus Plan," when immediately preceded by "3Com,"
means the 3Com 3Bonus Plan; provided, however, with respect to Palm Employees
in the 3Com 3Bonus Plan,


                                      2

<PAGE>

that "Bonus Plan" means the bonus plan as established and implemented with
respect to the Palm Employees. When immediately preceded by "Palm," "Bonus
Plan" means the bonus plan to be established by Palm pursuant to Sections 2.2
and 6.1.

         1.15  BUSINESS TRAVEL ACCIDENT INSURANCE. "Business Travel Accident
Insurance," when immediately preceded by "3Com," means the policy or policies
covering 3Com Business Travel Accident Insurance in the U.S. and to the
extent applicable, outside the U.S. When immediately preceded by "Palm,"
"Business Travel Accident Insurance" means the policy or policies covering
the business travel accident insurance to be established by Palm pursuant to
Sections 2.2 and 5.8.

         1.16  COBRA. "COBRA" means the continuation coverage requirements
for "group health plans" under Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended from time to time, and as codified in
Code Section 4980B and ERISA Sections 601 through 608.

         1.17  CODE. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.

         1.18  DEFERRED COMPENSATION PLAN. "Deferred Compensation Plan," when
immediately preceded by "3Com," means the 3Com Deferred Compensation Plan.
When immediately preceded by "Palm," "Deferred Compensation Plan" means the
deferred compensation plan to be established by Palm pursuant to Section 2.2
and Article IV.

         1.19  DISABILITY PLAN. "Disability Plan," when immediately preceded
by "3Com," means the 3Com Disability Plan which consists of the 3Com
Short-Term Disability Plan and the 3Com Long-Term Disability Plan. When
immediately preceded by "Palm," "Disability Plan" means the Palm Short-Term
Disability Plan and the Palm Long-Term Disability Plan, to be established by
Palm pursuant to Sections 2.2 and 5.7.

         1.20  DISTRIBUTION. "Distribution" means 3Com's pro rata
distribution to the holders of its common stock, $0.001 par value, several
months following the IPO, of all the shares of Palm common stock owned by
3Com.

         1.21  DISTRIBUTION DATE. "Distribution Date" means the date that the
Distribution is effective.

         1.22  DOL. "DOL" means the United States Department of Labor.

         1.23  EDUCATIONAL ASSISTANCE PROGRAM. "Educational Assistance
Program," when immediately preceded by "3Com," means the 3Com Educational
Assistance Program. When immediately preceded by "Palm," "Educational
Assistance Program" means the educational assistance program to be
established by Palm pursuant to Sections 2.2 and 7.2.


                                      3

<PAGE>

         1.24  EMPLOYEE ASSISTANCE PROGRAM. "Employee Assistance Program,"
when immediately preceded by "3Com," means the 3Com Employee Assistance
Program. When immediately preceded by "Palm," "Employee Assistance Program"
means the employee assistance program to be established by Palm pursuant to
Sections 2.2 and 7.1.

         1.25  ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.

         1.26  EXECUTIVE BONUS PLAN. "Executive Bonus Plan," when immediately
preceded by "3Com," means the 3Com Executive Bonus Program. When immediately
preceded by "Palm," "Executive Bonus Plan" means the executive bonus plan to
be established by Palm pursuant to Sections 2.2 and 6.2.

         1.27  FMLA. "FMLA" means the Family and Medical Leave Act of 1993,
as amended from time to time.

         1.28  FOOD PROGRAMS. "Food Programs" is defined in Section 7.4.

         1.29  FOREIGN PLAN. "Foreign Plan," when immediately preceded by
"3Com," means a Plan maintained by the 3Com Group for the benefit of its
employees outside the U.S. When immediately preceded by "Palm," "Foreign
Plan" means a Plan to be established by Palm for the benefit of its employees
outside the U.S.

         1.30  FRINGE BENEFIT PLANS. "Fringe Benefit Plans," when immediately
preceded by "3Com," means the 3Com employee assistance program, educational
assistance program and other fringe benefit plans, programs and arrangements,
sponsored and maintained by 3Com (as set forth in Article VII and Schedule
7.8). When immediately preceded by "Palm," "Fringe Benefit Plans" means the
fringe benefit plans, programs and arrangements to be established by Palm
pursuant to Section 2.2 and Article VII.

         1.31  FSA/DEPENDENT REIMBURSEMENT PLAN. "FSA/Dependent Reimbursement
Plan," when immediately preceded by "3Com," means the 3Com FSA/Dependent
Reimbursement Plan. When immediately preceded by "Palm," "FSA/Dependent
Reimbursement Plan" means the dependent care assistance reimbursement plan to
be established by Palm pursuant to Sections 2.2 and 5.10.

         1.32  FSA/MEDICAL REIMBURSEMENT PLAN. "FSA/Medical Reimbursement
Plan," when immediately preceded by "3Com," means the 3Com FSA/Medical
Reimbursement Plan. When immediately preceded by "Palm," "FSA/Medical
Reimbursement Plan" means the medical expense reimbursement plan to be
established by Palm pursuant to Sections 2.2 and 5.10.

         1.33  GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT. "General
Assignment and Assumption Agreement" means the Ancillary Agreement which is
Exhibit C to the Separation Agreement.


                                      4

<PAGE>

         1.34  GROUP INSURANCE POLICIES. "Group Insurance Policies" is
defined in Subsection 5.1(c)(ii) and Schedule 5.1(c)(ii).

         1.35  GROUP LIFE PLAN. "Group Life Plan," when immediately preceded
by "3Com," means the 3Com Group Life Plan. When immediately preceded by
"Palm," "Group Life Plan" means the group life plan to be established by Palm
pursuant to Sections 2.2 and 5.3.

         1.36  HCFA.  "HCFA" means the United States Health Care Financing
Administration.

         1.37  HEALTH AND WELFARE PLANS. "Health and Welfare Plans," when
immediately preceded by "3Com," means the 3Com Health Plans, the 3Com Section
125 Plan, and the health and welfare plans listed on Schedule 5.2(a)
established and maintained by 3Com for the benefit of eligible employees of
the 3Com Group, and such other welfare plans or programs as may apply to such
employees as of the Distribution Date. When immediately preceded by "Palm,"
"Health and Welfare Plans" means the Palm Health Plans, the Palm Section 125
Plan, and the health and welfare plans to be established by Palm pursuant to
Section 2.2, Article V, and Schedule 5.1(a).

         1.38  HEALTH PLANS. "Health Plans," when immediately preceded by
"3Com," means the medical, HMO, vision, and dental plans and any similar or
successor Plans. When immediately preceded by "Palm," "Health Plans" means
the medical, HMO, vision and dental plans to be established by Palm pursuant
to Section 2.2 and Article V.

         1.39  HMO. "HMO" means a health maintenance organization that
provides benefits under the 3Com Health Plans or the Palm Health Plans.

         1.40  HMO AGREEMENTS. "HMO Agreements" is defined in Subsection
5.1(c)(iii) and Schedule 5.1(c)(iii).

         1.41  IPO. "IPO" means the initial public offering of Palm common
stock pursuant to a registration statement on Form S-1 pursuant to the
Securities Act of 1933, as amended.

         1.42  IPO CLOSING DATE. "IPO Closing Date" means the closing of the
IPO, which is currently scheduled to occur prior to June 2, 2001.

         1.43  IPO REGISTRATION STATEMENT. "IPO Registration Statement" means
the registration statement on Form S-1 pursuant to the Securities Act of 1933
as amended, to be filed with the SEC, registering the shares of common stock
of Palm to be issued in the IPO, together with all amendments thereto.

         1.44  IRS.  "IRS" means the United States Internal Revenue Service.

         1.45  LEAVE OF ABSENCE PLANS. "Leave of Absence Plans," when
immediately preceded by "3Com," means the personal, medical/disability,
military, and FMLA leave offered from time to time under the personnel
policies and practices of 3Com. When immediately preceded by "Palm,"


                                      5

<PAGE>

"Leave of Absence Plans" means the leave of absence programs to be
established by Palm pursuant to Sections 2.2 and 5.12.

         1.46  LIABILITIES. "Liabilities" means all debts, liabilities,
guarantees, assurances, commitments, and obligations, whether fixed,
contingent or absolute, asserted or unasserted, matured or unmatured,
liquidated or unliquidated, accrued or not accrued, known or unknown, due or
to become due, whenever or however arising (including, without limitation,
whether arising out of any Contract or tort based on negligence or strict
liability) and whether or not the same would be required by generally
accepted accounting principles to be reflected in financial statements or
disclosed in the notes thereto. For this purpose, "Contract" means any
contract, agreement, lease, license, sales order, purchase order, instrument
or other commitment that is binding on any Person or any part of its property
under applicable law.

         1.47  LONG-TERM CARE PLAN. "Long-Term Care Plan," when immediately
preceded by "3Com," means the 3Com Long-Term Care Plan. When immediately
preceded by "Palm," "Long-Term Care Plan" means the long-term care plan, if
any, that may be established by Palm pursuant to Sections 2.2 and 5.9.

         1.48  LONG-TERM DISABILITY PLAN. "Long-Term Disability Plan," when
immediately preceded by "3Com," means the 3Com Long-Term Disability Plan.
When immediately preceded by "Palm," Long-Term Disability Plan" means the
long-term disability plan to be established by Palm pursuant to Section 2.2
and Subsection 5.7(b).

         1.49  MASTER TRANSITIONAL SERVICES AGREEMENT. "Master Transitional
Services Agreement" means the Ancillary Agreement which is Exhibit G to the
Separation Agreement.

         1.50  MATERIAL FEATURE. "Material Feature" means any feature of a
Plan that could reasonably be expected to be of material importance, in the
aggregate, to the sponsoring employer or the participants (or their
dependents or beneficiaries) of that Plan, which could include, depending on
the type and purpose of the particular Plan, the class or classes of
employees eligible to participate in such Plan, the nature, type, form,
source, and level of benefits provided under such Plan, the amount or level
of contributions, if any, required to be made by participants (or their
dependents or beneficiaries) to such Plan, and the costs and expenses
incurred by the sponsoring employer or Participating Companies for
implementing and/or maintaining such Plan.

         1.51  NASDAQ. "Nasdaq" means the Nasdaq National Market.

         1.52  NON-U.S. PLAN. "Non-U.S. Plan" means the local transfer
agreements, assignments, assumptions, novations and other documents executed
by the foreign subsidiaries of 3Com and Palm as shall be necessary to carry
out the plan of reorganization described in Exhibit K to the Separation
Agreement to effect the purposes of the Separation Agreement with respect to
3Com and Palm's respective operations outside the U.S.


                                      6

<PAGE>

         1.53  OPTION. "Option," when immediately preceded by "3Com," means
an option to purchase 3Com common stock pursuant to a Stock Plan. When
immediately preceded by "Palm," "Option" means an option to purchase Palm
common stock pursuant to a Stock Plan.

         1.54  OUTSOURCING. "Outsourcing" is defined in Section 5.13(c).

         1.55  PALM. "Palm" means Palm, Inc., a Delaware corporation. In all
such instances in which Palm is referred to in this Agreement, it shall also
be deemed to include a reference to each member of the Palm Group, unless it
specifically provides otherwise; Palm shall be solely responsible to 3Com for
ensuring that each member of the Palm Group complies with the applicable
terms of this Agreement.

         1.56  PALM BUSINESS. "Palm Business" means the hand-held computing
business and related businesses and operations as described in the IPO
Registration Statement.

         1.57  PALM CLAIMS. "Palm Claims" is defined in Subsection 5.13(a).

         1.58  PALM EMPLOYEE. "Palm Employee" means any individual who is:
(a) either actively employed by, or on leave of absence from, the Palm Group
on the Separation Date; (b) either actively employed by, or on leave of
absence from, the 3Com Group as either part of a work group or organization,
or common support function that, at any time after the Separation Date and
before the Distribution Date, moves to the employ of the Palm Group from the
employ of the 3Com Group; (c) a Palm Terminated Employee; (d) employed by the
Palm Group; (e) any other employee or group of employees designated as Palm
Employees (as of the specified date) by 3Com and Palm by mutual agreement; or
(f) an alternate payee under a QDRO, alternate recipient under a QMCSO,
beneficiary, covered dependent, or qualified beneficiary (as such term is
defined under COBRA), in each case, of an employee or former employee,
described in Subsections 1.58(a) through (e) with respect to that employee's
or former employee's benefit under the applicable Plan(s) (unless specified
otherwise in this Agreement, such an alternate payee, alternate recipient,
beneficiary, covered dependent, or qualified beneficiary shall not otherwise
be considered a Palm Employee with respect to any benefits he or she accrues
or has accrued under any applicable Plan(s), unless he or she is a Palm
Employee by virtue of Subsections 1.58(a) through (e)).

         1.59  PALM GROUP. "Palm Group" means Palm and each Subsidiary and
Affiliate of Palm immediately after the Separation Date, or that is
contemplated to be a Subsidiary or Affiliate of Palm pursuant to the Non-U.S.
Plan and each Person that becomes a Subsidiary or Affiliate of Palm after the
Separation Date.

         1.60  PALM STOCK VALUE. "Palm Stock Value" means the opening
per-share price of Palm common stock as listed on Nasdaq, as applicable, on
the first trading day after the Distribution.

         1.61  PALM TERMINATED EMPLOYEE. "Palm Terminated Employee" means any
individual who is: (a) a former employee of the 3Com Group who was terminated
from the Palm Business on or before the Separation Date; or (b) a former
employee of the Palm Group. Notwithstanding the


                                      7

<PAGE>

foregoing, "Palm Terminated Employee" shall not, unless otherwise expressly
provided to the contrary in this Agreement, include: (a) an individual who is
a 3Com Employee at the Distribution Date; or (b) an individual who is
otherwise a Palm Terminated Employee, but who is subsequently employed by the
3Com Group prior to the Distribution Date.

         1.62  PALM TRANSFERRED EMPLOYEE. "Palm Transferred Employee" means
any individual who, as of the Distribution Date, is: (a) either actively
employed by, or on a leave of absence from, the Palm Group; (b) a Palm
Terminated Employee; (c) an employee or group of employees designated by 3Com
and Palm, by mutual agreement, as Palm Transferred Employees; or (d) an
alternate payee under a QDRO, alternate recipient under a QMCSO, beneficiary,
covered dependent, or qualified beneficiary (as such term is defined under
COBRA), in each case, of an employee or former employee, described in
Subsections 1.62(a) through (c) with respect to that employee's or former
employee's benefit under the applicable Plan(s) (unless specified otherwise
in this Agreement, such an alternate payee, alternate recipient, beneficiary,
covered dependent, or qualified beneficiary shall not otherwise be considered
a Palm Transferred Employee with respect to any benefits he or she accrues or
accrued under any applicable Plan(s), unless he or she is a Palm Transferred
Employee by virtue of Subsections 1.62(a) through (c)). An employee may be a
Palm Transferred Employee pursuant to this Section regardless of whether such
employee is, as of the Distribution Date, alive, actively employed, on a
temporary leave of absence from active employment, on layoff, terminated from
employment, retired or on any other type of employment or post-employment
status relative to a 3Com Plan, and regardless of whether, as of the
Distribution Date, such employee is then receiving any coverage under or
benefits from a 3Com Plan.

         1.63  PARTICIPATING COMPANY. "Participating Company" means: (a)
3Com; (b) any Person (other than an individual) that 3Com has approved for
participation in, has accepted participation in, and which is participating
in, a Plan sponsored by 3Com; and (c) any Person (other than an individual)
which, by the terms of such Plan, participates in such Plan or any employees
of which, by the terms of such Plan, participate in or are covered by such
Plan.

         1.64  PERSON. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization, and a
governmental entity or any department, agency or political subdivision
thereof.

         1.65  PLAN. "Plan" means any plan, policy, program, payroll
practice, arrangement, contract, trust, insurance policy, or any agreement or
funding vehicle providing compensation or benefits to employees, former
employees, directors or consultants of 3Com or Palm.

         1.66  POST-DISTRIBUTION PERIOD. "Post-Distribution Period" means,
for each designated Plan, the period beginning as of the Distribution Date
and ending on the date that no member of the Palm Group is using 3Com benefit
delivery and administrative services with respect to that Plan.

         1.67  PREMIUM PLAN. "Premium Plan," when immediately preceded by
"3Com," means the 3Com Medical/Dental Pre-Tax Premium Plan, the vehicle by
which employees participating in the 3Com Health and Welfare Plans can
contribute their portion of the premium payments with pre-tax


                                      8

<PAGE>

dollars. When immediately preceded by "Palm," "Premium Plan" means the
medical/dental pre-tax premium plan to be established by Palm pursuant to
Sections 2.2 and 5.10.

         1.68  PTO. "PTO," when immediately preceded by "3Com," means the
3Com Personal Time Off Policy. When immediately preceded by "Palm," "PTO"
means the Palm personal time off policy to be established by Palm pursuant to
Sections 2.2 and 9.6.

         1.69  QDRO. "QDRO" means a domestic relations order which qualifies
under Code Section 414(p) and ERISA Section 206(d) and which creates or
recognizes an alternate payee's right to, or assigns to an alternate payee,
all or a portion of the benefits payable to a participant under the 3Com
401(k) Plan.

         1.70  QMCSO. "QMCSO" means a medical child support order which
qualifies under ERISA Section 609(a) and which creates or recognizes the
existence of an alternate recipient's right to, or assigns to an alternate
recipient the right to, receive benefits for which a participant or
beneficiary is eligible under any of the Health Plans.

         1.71  RABBI TRUST. "Rabbi Trust," when immediately preceded by
"3Com," means the grantor trust established for purposes of holding assets
under the 3Com Deferred Compensation Plan. When immediately preceded by
"Palm," "Rabbi Trust" means the grantor trust to be established by Palm
pursuant to Section 4.1(a).

         1.72  RATIO. "Ratio" means the ratio determined by dividing the Palm
Stock Value by the 3Com Stock Value.

         1.73  RECORD DATE. "Record Date" means the close of business on the
date to be determined by the Board of Directors of 3Com as the record date
for determining the stockholders of 3Com entitled to receive shares of common
stock of Palm in the Distribution.

         1.74  RESTRICTED STOCK. "Restricted Stock," when immediately
preceded by "3Com," means shares of 3Com common stock that are subject to
transfer restrictions or to employment and/or performance vesting conditions,
pursuant to a 3Com Stock Plan. When immediately preceded by "Palm,"
"Restricted Stock" means shares of Palm common stock that are subject to
transfer restrictions or to employment and/or performance vesting conditions,
pursuant to a Palm Stock Plan.

         1.75  REVENUE. "Revenue" means net revenue as determined in
accordance with generally accepted accounting principles.

         1.76  SABBATICAL PLAN. "Sabbatical Plan," when immediately preceded
by "3Com," means the 3Com Sabbatical Plan. When immediately preceded by
"Palm," "Sabbatical Plan" means the sabbatical plan, if any, to be
established by Palm pursuant to Sections 2.2 and 5.6.

         1.77  SEC. "SEC" means the United States Securities and Exchange
Commission.


                                      9

<PAGE>

         1.78  SECTION 125 PLAN. "Section 125 Plan," when immediately
preceded by "3Com," means the 3Com Premium Plan, the 3Com FSA/Dependent
Reimbursement Plan, and the 3Com FSA/Medical Reimbursement Plan. When
immediately preceded by "Palm," "Section 125 Plan" means the Palm Premium
Plan, the Palm FSA/Dependent Reimbursement Plan, and the Palm FSA/Medical
Reimbursement Plan to be established by Palm pursuant to Sections 2.2 and
5.10.

         1.79  SEPARATION. "Separation" means the contribution and transfer
from 3Com to Palm, and Palm's receipt and assumption of, directly or
indirectly, substantially all of the Assets and Liabilities currently
associated with the Palm Business and the stock, investments or similar
interests currently held by 3Com in subsidiaries and other entities that
conduct such business.

         1.80  SEPARATION AGREEMENT. "Separation Agreement" means the Master
Separation and Distribution Agreement, dated as of December 13, 1999, of
which this is Exhibit E thereto.

         1.81  SEPARATION DATE. "Separation Date" means the effective date
and time of each transfer of property, assumption of liability, license,
undertaking, or agreement in connection with the Separation which shall, with
respect to non-Foreign Plans and U.S. employees, be 12:01 a.m., Pacific Time,
February 26, 2000, and/or such other date(s) as may be fixed by the Board of
Directors of 3Com.

         1.82  SEVERANCE PLAN. "Severance Plan," when immediately preceded by
"3Com," means the 3Com Severance Plan. When immediately preceded by "Palm,"
"Severance Plan" means the severance program, if any, to be established by
Palm pursuant to Sections 2.2 and 5.5.

         1.83  SHORT-TERM DISABILITY PLAN. "Short-Term Disability Plan," when
immediately preceded by "3Com," means the 3Com Short-Term Disability Plan.
When immediately preceded by "Palm," "Short-Term Disability Plan" means the
short-term disability plan to be established by Palm pursuant to Section 2.2
and Subsection 5.7(a).

         1.84  SOS PLAN. "SOS Plan," when immediately preceded by "3Com,"
means the 3Com Share Our Success ("SOS") Plan. When immediately preceded by
"Palm," "SOS" means the matching gift program for charitable contributions,
if any, to be established by Palm pursuant to Sections 2.2 and 7.7.

         1.85  STOCK PLAN. "Stock Plan," when immediately preceded by "3Com,"
means any plan, program, or arrangement, other than the Stock Purchase Plan,
pursuant to which employees and other service providers hold Options, 3Com
Restricted Stock, or other 3Com equity incentives. When immediately preceded
by "Palm," "Stock Plan" means plans, programs, or arrangements that are
substantially similar to the 3Com Stock Plans, to be established by Palm
pursuant to Section 2.2 and Article VI.

         1.86  STOCK PURCHASE PLAN. "Stock Purchase Plan," when immediately
preceded by "3Com," means the 3Com Employee Stock Purchase Plan. When
immediately preceded by "Palm,"

                                      10
<PAGE>

"Stock Purchase Plan" means the employee stock purchase plan to be
established by Palm pursuant to Sections 2.2 and 6.5.

         1.87  SUBSIDIARY. "Subsidiary" of any person means a corporation or
other organization, whether incorporated or unincorporated, of which at least
a majority of the securities or interest having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization, is directly or indirectly owned or controlled by such Person or
by any one or more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries; provided, however that no Person that is not directly or
indirectly wholly-owned by any other Person shall be a Subsidiary of such
other Person unless such other Person controls, or has the right, power or
ability to control that Person. Unless the context otherwise requires,
reference to 3Com and its Subsidiaries shall not include the subsidiaries of
3Com that will be transferred to Palm after giving effect to the Separation,
including the actions taken pursuant to the Non-U.S. Plans.

         1.88  TAX SHARING AGREEMENT. "Tax Sharing Agreement" means the
Ancillary Agreement, which is Exhibit F to the Separation Agreement.

         1.89  UNEMPLOYMENT INSURANCE PROGRAM. "Unemployment Insurance
Program," when immediately preceded by "3Com," means the group unemployment
insurance policies purchased by 3Com from time to time. When immediately
preceded by "Palm," "Unemployment Insurance Program" means any group
unemployment insurance program to be established by Palm pursuant to Section
9.10.

         1.90  WELLCOM PROGRAM. "WellCom Program" is defined in Section 7.6.

         1.91  WORKERS' COMPENSATION PLAN. "Workers' Compensation Plan" when
immediately preceded by "3Com" means the 3Com Workers' Compensation Plan,
consisting of the various arrangements established by a member of the 3Com
Group to comply with the workers' compensation requirements of the states in
which the 3Com Group conducts business. When immediately preceded by "Palm,"
"Workers' Compensation Plan" means the workers' compensation program to be
established by Palm pursuant to Section 5.13.

                                      11
<PAGE>

                                   ARTICLE II

                               GENERAL PRINCIPLES

         2.1  ASSUMPTION OF PALM LIABILITIES. Except as specified otherwise
in this Agreement or as mutually agreed upon by Palm and 3Com from time to
time, effective as of Separation Date, Palm hereby assumes and agrees to pay,
perform, fulfill and discharge, in accordance with their respective terms,
all of the following: (a) all Liabilities of, or relating to, Palm Employees
or Palm Transferred Employees, in each case relating to, arising out of, or
resulting from future, present or former employment with the Palm Business
(including Liabilities relating to, arising out of, or resulting from 3Com
Plans and Palm Plans); (b) all Liabilities relating to, arising out of, or
resulting from any other actual or alleged employment relationship with the
Palm Group; and (c) all other Liabilities relating to, arising out of, or
resulting from obligations, liabilities and responsibilities expressly
assumed or retained by the Palm Group, or a Palm Plan pursuant to this
Agreement. Except as specified otherwise in this Agreement or as otherwise
mutually agreed upon by 3Com and Palm from time to time, 3Com shall transfer
to Palm amounts equal to trust assets, insurance reserves, and other related
assets as consistent with the applicable Plan transition that relates to,
arises out of, or results from Palm's pro rata interest in each 3Com Plan.

         2.2  ESTABLISHMENT OF PALM PLANS.

                  (a) HEALTH AND WELFARE PLANS. Except as specified otherwise
in this Agreement, effective as of the Distribution Date (or such other
date(s) as 3Com and Palm may mutually agree), Palm shall adopt the Palm
Health and Welfare Plans. Except as otherwise specified in this Agreement, to
the extent administratively and financially practicable, each of the
foregoing Palm Plans as in effect as of the Distribution Date (or such other
date(s) as 3Com and Palm may mutually agree), shall be comparable in the
aggregate in all Material Features to the corresponding 3Com Plan as in
effect as of such agreed upon date.

                  (b) 401(K) AND FRINGE BENEFIT PLANS. Except as specified
otherwise in this Agreement, effective as of the Distribution Date (or such
other date(s) as 3Com and Palm may mutually agree), Palm shall adopt the Palm
401(k) Plan and the Palm Fringe Benefit Plans. Except as otherwise specified
in this Agreement, to the extent administratively and financially
practicable, each of the foregoing Palm Plans as in effect as of the
Distribution Date (or such other date(s) as 3Com and Palm may mutually
agree), shall be comparable in the aggregate in all Material Features to the
corresponding 3Com Plan as in effect as of such agreed upon date; provided,
however, that the Palm 401(k) Plan shall allow for a discretionary matching
contribution, as determined by the Palm Board of Directors (in contrast to
the 3Com 401(k) Plan that currently provides for a specific matching
contribution per payroll period).

                  (c) EQUITY AND OTHER COMPENSATION. Except as specified
otherwise in this Agreement, effective on or before the IPO (or such other
date(s) as 3Com and Palm may mutually

                                      12
<PAGE>

agree), Palm shall adopt the Palm Stock Plans. Except as specified otherwise
in this Agreement, effective as of the Distribution Date (or such other
date(s) as 3Com and Palm may mutually agree), Palm shall adopt the Palm
Executive Bonus Plan and the Palm Bonus Plan. Effective on or before the IPO
(or such other date as 3Com and Palm may mutually agree), Palm shall adopt
the Palm Stock Purchase Plan. Each of the foregoing Palm Plans as in effect
as of the IPO (or such other date(s) as 3Com and Palm may mutually agree),
shall be comparable in the aggregate in all Material Features to the
corresponding 3Com Plan as in effect on the IPO.

                  (d) OTHER PLANS. Except as otherwise specified in this
Agreement, effective as of the Separation Date (or such other date(s) as 3Com
and Palm may mutually agree), Palm shall adopt certain Palm Plans that are
specifically tied to its payroll practices, including, without limitation, a
Short-Term Disability Plan, a PTO Plan and a Deferred Compensation Plan. Palm
shall also adopt a Section 125 Plan, effective as of January 1, 2000.

         2.3  PALM UNDER NO OBLIGATION TO MAINTAIN PLANS. Except as specified
otherwise in this Agreement, nothing in this Agreement shall preclude Palm,
at any time after the Distribution Date, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
Palm Plan, any benefit under any Palm Plan or any trust, insurance policy or
funding vehicle related to any Palm Plans, or any employment or other service
arrangement with Palm Employees or vendors (to the extent permitted by law).

         2.4  PALM'S PARTICIPATION IN 3COM PLANS.

                  (a) PARTICIPATION IN 3COM PLANS. Except as specified
otherwise in this Agreement or as 3Com and Palm may mutually agree, Palm
shall, until the Distribution Date, continue to be a Participating Company in
the 3Com Plans to the extent that Palm has not established a corresponding
Plan. Effective as of any date on or after the Separation Date and before the
Distribution Date (or such other date(s) as 3Com or Palm may mutually agree),
any member of the Palm Group not described in the preceding sentence may, at
its request and with the consent of 3Com and Palm, become a Participating
Company in any or all of the 3Com Plans, to the extent that Palm has not yet
established a corresponding Plan.

                  (b) 3COM'S GENERAL OBLIGATIONS AS PLAN SPONSOR. To the
extent that Palm is a Participating Company in any 3Com Plan, 3Com shall
continue to administer, or cause to be administered, in accordance with its
terms and applicable law, such 3Com Plan, and shall have the sole and
absolute discretion and authority to interpret the 3Com Plan, as set forth
therein. 3Com shall not amend any Material Feature of any 3Com Plan in which
Palm is a Participating Company, except to the extent: (i) such amendment
would not materially affect any coverage or benefits of Palm Employees or
Palm Transferred Employees under such Plan; (ii) Palm shall consent to such
amendment and such consent shall not be unreasonably withheld; or (iii) such
amendment is necessary or appropriate to comply with applicable law.

                  (c) PALM'S GENERAL OBLIGATIONS AS PARTICIPATING COMPANY.
Palm shall perform, with respect to its participation in the 3Com Plans, the
duties of a Participating Company as set forth

                                     13
<PAGE>

in each such Plan or any procedures adopted pursuant thereto, including
(without limitation): (i) assistance in the administration of claims, to the
extent requested by the claims administrator of the applicable 3Com Plan;
(ii) full cooperation with 3Com Plan auditors, benefit personnel and benefit
vendors; (iii) preservation of the confidentiality of all financial
arrangements 3Com has or may have with any vendors, claims administrators,
trustees, service providers or any other entity or individual with whom 3Com
has entered into an agreement relating to the 3Com Plans; and (iv)
preservation of the confidentiality of participant information (including,
without limitation, health information in relation to FMLA leaves) to the
extent not specified otherwise in this Agreement.

                  (d) TERMINATION OF PARTICIPATING COMPANY STATUS. Except as
otherwise may be mutually agreed upon by 3Com and Palm, effective as of the
Distribution Date or such other date as Palm establishes a corresponding Plan
(as specified in Section 2.2 or otherwise in this Agreement), Palm shall
automatically cease to be a Participating Company in the corresponding 3Com
Plan.

         2.5  TERMS OF PARTICIPATION BY PALM TRANSFERRED EMPLOYEES IN PALM
PLANS.

                  (a) NON-DUPLICATION OF BENEFITS. Except as specified
otherwise in this Agreement, as of the Distribution Date, or other later date
that applies to the particular Palm Plan established thereafter, the Palm
Plans shall be, with respect to Palm Transferred Employees, in all respects
the successors in interest to, and shall not provide benefits that duplicate
benefits provided by, the corresponding 3Com Plans. 3Com and Palm shall agree
on methods and procedures, including amending the respective Plan documents,
to prevent Palm Employees from receiving duplicate benefits from the 3Com
Plans and the Palm Plans.

                  (b) SERVICE CREDIT. Except as specified otherwise in this
Agreement, with respect to Palm Transferred Employees, each Palm Plan shall
provide that all service, all compensation and all other benefit-affecting
determinations that, as of the Distribution Date, were recognized under the
corresponding 3Com Plan shall, as of the Distribution Date, receive full
recognition and credit and be taken into account under such Palm Plan to the
same extent as if such items occurred under such Palm Plan, except to the
extent that duplication of benefits would result. Notwithstanding the
foregoing, 3Com and Palm shall recognize service with either 3Com or Palm
that was recognized as of the Distribution Date, except to the extent
provided in Subsection 2.5(a) above. The service crediting provisions shall
be subject to any respectively applicable "service bridging," "break in
service," "employment date," or "eligibility date" rules under the Palm Plans
and the 3Com Plans.

                  (c) ASSUMPTION OF LIABILITIES. Except as specified
otherwise in this Agreement (including, without limitation, the exception
applicable to self-insured Health Plans), the provisions of this Agreement
for the transfer of Assets relating to 3Com Plans to Palm and/or the
appropriate Palm Plans are based upon the understanding of the parties that
Palm and/or the appropriate Palm Plan will assume all Liabilities of the
corresponding 3Com Plan to or relating to Palm Transferred Employees, as
provided for herein. If any such Liabilities are not effectively assumed by
Palm and/or the appropriate Palm Plan, then the amount of transferred Assets
shall be recomputed accordingly, taking into account the retention of such
Liabilities by such 3Com Plan, and Assets

                                      14
<PAGE>

shall be transferred from Palm and/or the appropriate Palm Plan to 3Com
and/or the appropriate 3Com Plan so as to place Palm and/or the appropriate
Palm Plan in the position it would have been in had the initial Asset
transfer been made in accordance with such recomputed amount of assets.

         2.6  BENEFITS COMMITTEE AND DISPUTE RESOLUTION. From the date of
this Agreement through the later of the Distribution Date or the end of the
Post-Distribution Period, as applicable, the management of the Plans shall be
conducted under the supervision of the Benefits Committee. The Benefits
Committee shall consist of an equal number of representatives from 3Com and
Palm as appointed by the 3Com Senior Vice President, Human Resources, and the
Palm Vice President, Human Resources, and shall provide strategic oversight
and direction of the cohesive administration of the Plans. Issues that cannot
be resolved by the Benefits Committee shall be decided, at the request of
either party, by the Palm Vice President, Human Resources (or his or her
authorized delegate) and the 3Com Senior Vice President, Human Resources (or
his or her authorized delegate). After the exhaustion of the process, as
specified herein, any outstanding issue shall be resolved in accordance with
Section 5.9 of the Separation Agreement, entitled "Dispute Resolution."

         2.7  FOREIGN PLANS. Palm and 3Com each intend that the matters,
issues or Liabilities relating to, arising out of, or resulting from Foreign
Plans and non-U.S.-related employment matters be handled in a manner that is
in compliance with the requirements of applicable local law and, to the
extent permitted by applicable local law, in a manner consistent with
comparable U.S. matters, issues or Liabilities as reflected in this
Agreement. Without in any way limiting the general principle set forth in the
preceding sentence, Schedule 2.7 sets forth the specific manner in which
certain existing 3Com Foreign Plans in non-U.S. jurisdictions shall be
handled, effective as of the Separation Date (or such other date(s) as 3Com
and Palm may mutually agree) consistent with the provisions of this Section
2.7 or as permitted under applicable local law.

                                      15
<PAGE>

                                   ARTICLE III

                            DEFINED CONTRIBUTION PLAN

         3.1  401(k) PLAN.

                  (a) 401(k) PLAN TRUST. Effective as of the Distribution Date
(or such other date as 3Com and Palm may mutually agree), Palm shall establish,
or cause to be established, a separate trust, which is intended to be
tax-qualified under Code Section 401(a), to be exempt from taxation under Code
Section 501(a)(1), and to form the Palm 401(k) Plan.

                  (b) 401(k) PLAN: ASSUMPTION OF LIABILITIES AND TRANSFER OF
ASSETS. Effective as of the Distribution Date (or such other date as 3Com and
Palm may mutually agree): (i) the Palm 401(k) Plan shall assume and be solely
responsible for all Liabilities relating to, arising out of, or resulting from
Palm Transferred Employees under the 3Com 401(k) Plan; and (ii) 3Com shall cause
the accounts of the Palm Transferred Employees under the 3Com 401(k) Plan that
are held by its related trust to be transferred to the Palm 401(k) Plan and its
related trust, and Palm shall cause such transferred accounts to be accepted by
such Plan and its related trust. Effective as of the Distribution Date (or such
other date as 3Com and Palm may mutually agree), Palm shall use its commercially
reasonable best efforts to enter into agreements satisfactory to Palm to
accomplish such assumption and transfer, the maintenance of the necessary
participant records, the appointment of an initial trustee under the Palm 401(k)
Plan, and the engagement of an initial recordkeeper under the Palm 401(k) Plan.
Palm and 3Com each agree to use their commercially reasonable best efforts to
accomplish this 401(k) Plan and related trust spin-off.

                  (c) 401(k) PLAN: STOCK CONSIDERATIONS. As a result of the
spin-off of the 3Com 401(k) Plan and to the extent that immediately prior to
such time, the 3Com 401(k) Plan continues to consist of 3Com employer
securities, then the resulting 3Com 401(k) Plan and Palm 401(k) Plan shall both
consist in part of 3Com and Palm employer securities. Palm and 3Com shall assume
sole responsibility for ensuring that their respective company stock funds, and
underlying employer securities held in each such fund, are maintained in
compliance with all requirements of the SEC.

                  (d) NO DISTRIBUTION TO PALM TRANSFERRED EMPLOYEES. The 3Com
401(k) Plan and the Palm 401(k) Plan shall provide that no distribution of
account balances shall be made to any Palm Transferred Employee on account of
the Palm Group ceasing to be an Affiliate of the 3Com Group as of the
Distribution Date.

                                       16

<PAGE>

                                   ARTICLE IV

                                NON-QUALIFIED PLAN


         4.1  DEFERRED COMPENSATION PLAN.

                  (a) ESTABLISHMENT OF PALM RABBI TRUST. Effective on or before
the Separation Date (or such other date as 3Com and Palm may mutually agree),
Palm shall establish the Palm Deferred Compensation Plan and the Palm Rabbi
Trust.

                  (b) ALLOCATION AND ASSUMPTION OF LIABILITIES. As of the date
that Palm establishes the Palm Deferred Compensation Plan, 3Com shall determine
the amount of Liabilities under the 3Com Deferred Compensation Plan,
attributable to Palm Employees. As soon as administratively practicable
thereafter, 3Com shall pay to Palm or to the trustee of the Palm Rabbi Trust, as
Palm specifies, an amount of 3Com's Assets equal to such Liabilities. Coincident
with the receipt of such transfer of Assets, Palm shall assume all
responsibilities and obligations relating to, arising out of, or resulting from
such Liabilities.

                  (c) PARTICIPATION IN DEFERRED COMPENSATION PLANS. Effective as
of the Separation Date (or such other date as 3Com and Palm may mutually agree),
eligible Palm Employees may commence participation in the Palm Deferred
Compensation Plan. Palm Employees who are currently participating in the 3Com
Deferred Compensation Plan shall continue their participation in that Plan
(according to its terms) to the Separation Date (or such other date as 3Com and
Palm may mutually agree).

                                       17

<PAGE>

                                    ARTICLE V

                            HEALTH AND WELFARE PLANS

         5.1  HEALTH PLANS AS OF THE DISTRIBUTION DATE.

                  (a) PALM HEALTH PLANS. As of the Distribution Date (or such
other date(s) as 3Com and Palm may mutually agree), Palm shall have established
the Palm Health Plans listed on Schedule 5.1(a) and, correspondingly, Palm shall
cease to be a Participating Company in the 3Com Health Plans. Palm shall be
solely responsible for the administration of the Palm Health Plans, including
the payment of all employer-related costs in establishing and maintaining the
Palm Health Plans, and for the collection and remittance of employee premiums,
subject to Section 8.2.

                  (b) PENDING TREATMENTS. Notwithstanding Subsection 5.1(a)
above, all treatments which have been pre-certified for or are being provided
to a Palm Transferred Employee as of the Distribution Date shall be provided
without interruption under the appropriate 3Com Health Plan (to the extent
such continued treatment is not provided under a Palm Health Plan) until such
treatment is concluded, discontinued, or, if earlier, through December 31,
2000, pursuant to applicable Health Plan rules and limitations, but Palm
shall continue to be responsible for all Liabilities relating to, arising out
of, or resulting from such on-going treatments as of the Distribution Date.

                  (c) VENDOR ARRANGEMENTS. 3Com shall use its commercially
reasonable best efforts for and on behalf of Palm to procure, effective as of
the Distribution Date (or such other date(s) as 3Com and Palm may mutually
agree): (i) third party ASO Contracts which are comparable in the aggregate in
all Material Features to the ASO Contracts entered into by 3Com, as set forth in
Schedule 5.1(c)(i) (the "ASO Contracts); (ii) Group Insurance Policies, which
are comparable in the aggregate in all Material Features to the Group Insurance
Policies entered into by 3Com, as set forth in Schedule 5.1(c)(ii) (the "Group
Insurance Policies"); and (iii) an HMO Agreement which is comparable in the
aggregate in all Material Features to the HMO Agreement entered into by 3Com, as
set forth in Schedule 5.1(c)(iii) (the "HMO Agreement"). In each case, Palm
shall, as of the Distribution Date (or such other date as 3Com and Palm may
mutually agree), establish, adopt and/or implement such contracts, agreements or
arrangements. Palm may, at such future date after the Distribution Date, elect
to discontinue such contracts, agreements or arrangements in accordance with
Section 2.3.

                  (d) CONTINUANCE OF ELECTIONS, CO-PAYMENTS AND MAXIMUM
BENEFITS.

                                (i) As of the Distribution Date and for the
remainder of the plan year in which the Distribution Date occurs (or such other
period as 3Com and Palm may mutually agree), Palm shall make its commercially
reasonable best efforts to cause the Palm Health Plans to recognize and maintain
all coverage and contribution elections made by Palm Employees and Palm
Transferred Employees under the 3Com Health Plans and apply such elections under
the Palm

                                       18

<PAGE>

Health Plans for the remainder of the period or periods for which such
elections are by their terms applicable. The transfer or other movement of
employment between 3Com to Palm at any time upon or before the Distribution Date
shall neither constitute nor be treated as a "status change" or termination of
employment under the 3Com Health Plans or the Palm Health Plans.

                                (ii) On and after the Distribution Date, Palm
shall cause the Palm Health Plans to recognize and give credit for (A) all
amounts applied to deductibles, out-of-pocket maximums, co-payments and other
applicable benefit coverage limits with respect to which such expenses have been
incurred by Palm Transferred Employees under the 3Com Health Plans for the
remainder of the calendar year in which the Distribution Date occurs, and (B)
all benefits paid to Palm Transferred Employees under the 3Com Health Plans for
purposes of determining when such persons have reached their lifetime maximum
benefits under the Palm Health Plans.

                  (e) HCFA. As of the Separation Date (or such other date as
3Com and Palm may mutually agree), Palm shall assume all Liabilities relating
to, arising out of, or resulting from claims, if any, under the HCFA data match
reports that relate to Palm Transferred Employees

         5.2  HEALTH PLANS FROM THE SEPARATION DATE THROUGH THE DISTRIBUTION
DATE. Except as otherwise agreed by 3Com and Palm, for the period beginning
with the Separation Date and ending on the Distribution Date (or such other
period as 3Com and Palm may mutually agree), Palm shall be a Participating
Company in the 3Com Health Plans listed on Schedule 5.2(a). 3Com shall
administer claims incurred under the 3Com Health Plans by Palm Employees
before the Distribution Date but only to the extent that Palm has not, before
the Distribution Date, established and assumed administrative responsibility
for a corresponding Health Plan. Any determination made or settlements
entered into by 3Com with respect to such claims shall be final and binding.
3Com shall retain financial and administrative ("run-out") Liability and all
related obligations and responsibilities for all claims incurred by Palm
Transferred Employees before the Distribution Date (or such other date(s) as
3Com and Palm may mutually agree), including any claims that were
administered by 3Com as of, on, or after the Distribution Date (or such other
date(s) as 3Com and Palm may mutually agree). Except as set forth in the
preceding sentence, Palm shall reimburse 3Com for any and all direct and
indirect costs and expenses associated with its participation in the 3Com
Health Plans, subject to Section 8.2.

         5.3  GROUP LIFE PLAN.

                  (a) PALM'S PARTICIPATION IN 3COM GROUP LIFE PLAN. Palm shall,
until the Distribution Date (or such other date as 3Com and Palm may mutually
agree), continue to be a Participating Company in the 3Com Group Life Plan. Palm
shall cease to be a Participating Company in the 3Com Group Life Plan coincident
with Palm's establishment of the Palm Group Life Plan (or, if none, Palm's
written notice to 3Com of its withdrawal as a Participating Company in the 3Com
Group Life Plan). Palm shall reimburse 3Com for any and all direct and indirect
costs and expenses associated with its participation in the 3Com Group Life
Plan, subject to Section 8.2.

                                       19

<PAGE>

                  (b) PALM'S ESTABLISHMENT OF PALM GROUP LIFE PLAN. 3Com shall
make its commercially reasonable best efforts to procure an arrangement on
behalf of Palm for a Group Life Plan which shall be comparable in the aggregate
in all Material Features to the 3Com Group Life Plan as are financially,
administratively and legally practicable. If 3Com procures such an arrangement,
Palm will not unreasonably withhold its consent to adopt such an arrangement to
constitute the Palm Group Life Plan. Palm will reimburse 3Com for its direct and
indirect costs and expenses associated with its procurement, preparation, and
implementation of the Palm Group Life Plan, subject to Section 8.2.

         5.4  AD&D PLAN.

                  (a) PALM'S PARTICIPATION IN 3COM AD&D PLAN. Palm shall, until
the Distribution Date (or such other date as 3Com and Palm may mutually agree),
continue to be a Participating Company in the 3Com AD&D Plan. Palm shall cease
to be a Participating Company in the 3Com AD&D Plan coincident with Palm's
establishment of the Palm AD&D Plan (or, if none, Palm's written notice to 3Com
of its withdrawal as a Participating Company in the 3Com AD&D Plan). Palm shall
reimburse 3Com for any and all direct and indirect costs and expenses associated
with its participation in the 3Com AD&D Plan, subject to Section 8.2.

                  (b) PALM'S ESTABLISHMENT OF PALM AD&D PLAN. 3Com shall make
its commercially reasonable best efforts to procure an arrangement on behalf of
Palm for an AD&D Plan which shall be comparable in the aggregate in all Material
Features to the 3Com AD&D Plan as are financially, administratively and legally
practicable to Palm. If 3Com procures such an arrangement, Palm shall not
unreasonably withhold its consent to adopt such an arrangement to constitute the
Palm AD&D Plan. Palm will reimburse 3Com for its direct and indirect costs and
expenses associated with its procurement, preparation and implementation of the
Palm AD&D Plan, subject to Section 8.2.

         5.5  SEVERANCE PLAN. Palm shall, until the Distribution Date (or
such other date as 3Com and Palm may mutually agree), continue to be a
Participating Company in the 3Com Severance Plan. Palm shall cease to be a
Participating Company in the 3Com Severance Plan coincident with Palm's
establishment of the Palm Severance Plan (or if none, Palm's written notice
to 3Com of its withdrawal as a Participating Company in the 3Com Severance
Plan). If Palm so elects, 3Com will assist Palm in establishing the Palm
Severance Plan. Palm will reimburse 3Com for any and all direct and indirect
costs and expenses related to its participation in the 3Com Severance Plan
and 3Com's preparation and implementation of the Palm Severance Plan, subject
to Section 8.2.

         5.6  SABBATICAL PLAN.

                  (a) PALM'S PARTICIPATION IN 3COM SABBATICAL PLAN. Palm shall,
until the Distribution Date (or such other date as 3Com and Palm may mutually
agree), continue to be a Participating Company in the 3Com Sabbatical Plan. Palm
shall remit to 3Com or the trust fund for the 3Com Sabbatical Plan, as specified
by 3Com, sufficient funds to assume its funding Liability under the 3Com
Sabbatical Plan relating to, arising out of, or resulting from Palm's
participation in

                                       20

<PAGE>

the 3Com Sabbatical Plan. Palm will also reimburse 3Com for any and all
direct and indirect costs and expenses associated with its participation in
the 3Com Sabbatical Plan, subject to Section 8.2. Palm shall cease to be a
Participating Company in the 3Com Sabbatical Plan coincident with Palm's
establishment of the Palm Sabbatical Plan.

                  (b) ALLOCATION AND ASSUMPTION OF LIABILITIES. 3Com shall
determine the amount of Assets under the 3Com Sabbatical Plan and related trust
as of the Distribution Date (or such other date that Palm establishes the Palm
Sabbatical Plan) attributable to Palm. As soon as administratively practicable
thereafter, 3Com shall pay to Palm or to the trustee of the Palm Sabbatical
Plan, as Palm specifies, an amount equal to Palm's Assets under the 3Com
Sabbatical Plan, if any.

                  (c) PALM SABBATICAL PLAN. Effective as of the Distribution
Date (or such other date as 3Com and Palm may mutually agree), Palm shall
establish the Palm Sabbatical Plan which is comparable in the aggregate in all
Material Features to the 3Com Sabbatical Plan. If Palm so elects, 3Com will
assist Palm in preparing and implementing the Palm Sabbatical Plan and Palm will
reimburse 3Com for its costs and expenses associated with the preparation and
implementation of the Palm Sabbatical Plan, subject to Section 8.2.

         5.7  DISABILITY PLANS.

                  (a) SHORT-TERM DISABILITY PLAN. Effective on or before the
Separation Date (or such other date as 3Com and Palm may mutually agree), Palm
shall implement or cause to be implemented, payroll procedures for purposes of
sponsoring and administering the Palm Short-Term Disability Plan outside of
California. Palm has adopted a state voluntary Disability Plan for Palm
Employees and Palm Transferred Employees who are employed in California. 3Com
will administer Palm's Short-Term Disability Plan through the Distribution Date
(or such other date as 3Com and Palm may mutually agree). Palm shall reimburse
3Com for its costs and expenses associated with such administration, subject to
Section 8.2.

                  (b) LONG-TERM DISABILITY PLAN. Palm shall, until the
Distribution Date (or such other date as Palm and 3Com may mutually agree),
continue to be a Participating Company in the 3Com Long-Term Disability Plan.
3Com shall use its commercially reasonable best efforts for and on behalf of
Palm to procure, effective as of the Distribution Date (or such other date as
3Com and Palm may mutually agree), a Palm Long-Term Disability Plan. Palm will
reimburse 3Com for any and all direct and indirect costs and expenses associated
with its participation in the 3Com Long-Term Disability Plan and 3Com's
assistance in procuring, preparing, and implementing the Palm Long-Term
Disability Plan, subject to Section 8.2.

         5.8  BUSINESS TRAVEL ACCIDENT INSURANCE. Through the Distribution
Date (or such other date as 3Com and Palm may mutually agree), Palm shall
remain a Participating Company in the 3Com Business Travel Accident Insurance
policy. 3Com shall be responsible for administering or causing to be
administered the 3Com Business Travel Accident Insurance policy with respect
to Palm Employees. Palm shall reimburse 3Com for any and all direct and
indirect expenses and costs

                                       21

<PAGE>

associated with its participation in the 3Com Business Travel Accident Insurance
policy, subject to Section 8.2. 3Com shall use its commercially reasonable best
efforts for and on behalf of Palm to procure a Business Travel Accident
Insurance policy which shall be comparable in the aggregate in all Material
Features to the 3Com Business Travel Accident Insurance policy, effective as of
the Distribution Date (or such other date as 3Com and Palm may mutually agree).
If 3Com procures such an agreement, Palm shall not unreasonably withhold its
consent to adopt such an agreement to constitute the Palm Business Travel
Accident Insurance policy. Effective as of the Distribution Date, Palm shall be
solely responsible for maintaining its own Business Travel Accident Insurance
policy.

         5.9  LONG-TERM CARE PLAN. Through the Distribution Date (or such
other date as 3Com and Palm may mutually agree), Palm shall remain a
Participating Company in the 3Com Long-Term Care Plan. 3Com shall be
responsible for administering or causing to be administered the 3Com
Long-Term Care Plan. Palm shall reimburse 3Com for any and all direct and
indirect costs and expenses associated with its participation in the 3Com
Long-Term Care Plan, subject to Section 8.2. The Palm Employees and Palm
Transferred Employees participating in the 3Com Long-Term Care Plan shall
have the rights to take their existing benefits with them under such 3Com
Long-Term Care Plan (a "portable benefit") at the time their rights to
participation would otherwise terminate.

         5.10  SECTION 125 PLAN. Through December 31, 1999 (or such other
date as 3Com and Palm may mutually agree), Palm and designated members of the
Palm Group shall remain Participating Companies in the 3Com Section 125 Plan.
The existing elections for Palm Employees participating in the 3Com Section
125 Plan and for newly-eligible Palm Employees who elect to participate in
the 3Com Section 125 Plan shall remain in effect through December 31, 1999
(or such other date as 3Com and Palm may mutually agree). Effective on
January 1, 2000 (or such other date immediately following the date that
Palm's participation in the 3Com Section 125 Plan terminates), Palm shall
establish, or caused to be established, the Palm Section 125 Plan and Palm
shall be solely responsible for the Palm Section 125 Plan. 3Com will
administer, or cause to be administered, the 3Com Section 125 Plan for Palm
Employees and the Palm Section 125 Plan through such date as 3Com and Palm
may mutually agree. Palm shall reimburse 3Com for any and all direct and
indirect expenses and costs attributable to Palm Employees, subject to
Section 8.2.

         5.11  COBRA. 3Com shall be responsible through the Distribution Date
(or such other date as 3Com and Palm may mutually agree), for compliance with
the health care continuation coverage requirements of COBRA and the 3Com
Health and Welfare Plans with respect to Palm Employees and qualified
beneficiaries (as such term is defined under COBRA). Palm shall be
responsible for providing 3Com with all necessary employee change notices and
related information for covered dependents, spouses, qualified beneficiaries
(as such term is defined under COBRA), and alternate recipients pursuant to
QMCSO, in accordance with applicable 3Com COBRA policies and procedures. As
soon as administratively practicable after the Distribution Date (or such
other date as 3Com and Palm may mutually agree), 3Com shall provide Palm
(through hard copy, electronic format, or such other mechanism as is
appropriate under the circumstances), with a list of all qualified
beneficiaries (as such term is defined under COBRA) that relate to the Palm
Group and

                                       22

<PAGE>

the relevant information pertaining to their coverage elections and remaining
COBRA time periods. Effective as of the Distribution Date (or such other date
as 3Com and Palm may mutually agree), Palm shall be solely responsible for
compliance with the health care continuation coverage requirements of COBRA
and the Palm Health and Welfare Plans for Palm Transferred Employees and
their qualified beneficiaries (as such term is defined under COBRA);
provided, however, Palm may elect to retain 3Com's services in such manner
and for such period as 3Com and Palm may mutually agree to assist it with
COBRA administration and Palm will reimburse 3Com for its costs and expenses
associated with such administration, subject to Section 8.2.

         5.12  LEAVE OF ABSENCE PLANS AND FMLA.

                  (a) ALLOCATION OF RESPONSIBILITIES AFTER SEPARATION DATE.
Effective as of the Separation Date (or such other date as 3Com and Palm may
mutually agree): (i) Palm shall adopt Leave of Absence Plans which shall be
comparable in the aggregate in all Material Features to the 3Com Leave of
Absence Plans as in effect on the Separation Date (or such other date as 3Com
and Palm may mutually agree); (ii) Palm shall honor all terms and conditions of
leaves of absence which have been granted to any Palm Employee under a 3Com
Leave of Absence Plan or FMLA before the Separation Date by 3Com, including such
leaves that are to commence after the Separation Date (or such other date as
3Com and Palm may mutually agree); and (iii) Palm shall recognize all periods of
service of Palm Employees and Palm Transferred Employees with the 3Com Group, as
applicable, to the extent such service is recognized by the 3Com Group for the
purpose of eligibility for leave entitlement under the 3Com Leave of Absence
Plans and FMLA; provided, however, that no duplication of benefits shall, to the
extent permitted by law, be required by the foregoing.

                  (b) ADMINISTRATION. Through the Distribution Date (or such
other such period as 3Com and Palm may mutually agree), 3Com will administer, or
cause to be administered, the Palm Leave of Absence Plans in such manner as 3Com
and Palm may mutually agree. Palm will reimburse 3Com for its costs and expenses
associated with such administration, subject to Section 8.2.

                  (c) DISCLOSURE. Before the Distribution Date (or such other
date as 3Com and Palm may mutually agree), 3Com shall provide to Palm copies of
all records pertaining to the 3Com Leave of Absence Plans and FMLA with respect
to all Palm Employees and Palm Transferred Employees to the extent such records
have not been previously provided.

         5.13  WORKERS' COMPENSATION PLAN.

                  (a) ASSUMPTION OF 3COM AND PALM WORKERS' COMPENSATION PLAN
LIABILITIES BY PALM. Effective as of the Separation Date, Palm shall assume and
be solely responsible for all Liabilities relating to, arising out of, or
resulting from their claims by Palm Employees and Palm Transferred Employees
employment with the Palm Business ("Palm Claims") whether incurred before or
after the Separation Date.

                                       23

<PAGE>

               (b) PARTICIPATION IN THE 3COM WORKERS' COMPENSATION PLAN. Palm
shall, until the Distribution Date (or such earlier date as Palm and 3Com may
mutually agree), continue to be a Participating Company in the 3Com Workers'
Compensation Plan. 3Com shall continue to administer, or cause to be
administered, the 3Com Workers' Compensation Plan in accordance with its
terms and applicable law. Palm shall fully cooperate with 3Com and its
insurance company in the administration and reporting of Palm Claims under
the 3Com Workers' Compensation Plan. Any determination made, or settlement
entered into, by or on behalf of 3Com or its insurance company with respect
to Palm claims under the 3Com Workers' Compensation Plan shall be final and
binding. Palm shall reimburse 3Com and its insurance company for any and all
direct and indirect costs related to the Palm claims or Palm's participation
in the 3Com Workers' Compensation Plan, including, but not limited to loss
costs, claims administration fees, legal expenses, premium audits, and
retrospective premium adjustments, subject to Section 8.2. 3Com shall
transfer to and reimburse Palm any assets related to the Palm claims or
Palm's participation in the 3Com Workers' Compensation Plan, including, but
not limited to, loss reserves, premium audits, and retrospective premium
adjustments.

               (c) OUTSOURCING OF PALM WORKERS' COMPENSATION PLAN CLAIMS.
Palm shall have the right to transfer the administration of Palm Claims
incurred under the 3Com Workers' Compensation Plan to a third party
administrator, vendor, or insurance company ("Outsourcing"). Palm shall
promptly notify 3Com of its intent to transfer such claims, including the
material terms and conditions of the transfer before the effective date
thereof. 3Com, upon the request of Palm, shall use its commercially
reasonable best efforts to procure such Outsourcing on behalf of Palm, assist
Palm in the transition to Outsourcing, and provide Palm with any information
that is in the possession of 3Com and is reasonably available and necessary
to obtain such Outsourcing.

               (d) ESTABLISHMENT OF THE PALM WORKERS' COMPENSATION PLAN. As
of the Distribution Date, Palm shall be responsible for complying with the
workers' compensation requirements of the states in which the Palm Group
conducts business and for obtaining and maintaining insurance programs for
its risk of loss. Such insurance arrangements shall be separate and apart
from the 3Com Workers' Compensation Plan. Notwithstanding the foregoing,
3Com, upon the request of Palm, shall use its commercially reasonable best
efforts to procure workers' compensation insurance policies on behalf of
Palm, assist Palm in the transition to its own separate insurance program,
and provide Palm with any information that is in the possession of 3Com and
is reasonably available and necessary to either obtain insurance coverages
for Palm or to assist Palm in preventing unintended self-insurance, in
whatever form.

         5.14  ADMINISTRATIVE SERVICES. To the extent not provided otherwise
in this Article, 3Com shall provide certain administrative services to Palm
in conjunction with both the 3Com and Palm Health and Welfare Plans in such
manner and for such period as 3Com and Palm may mutually agree. Palm shall
reimburse 3Com for any and all direct and indirect costs and expenses related
thereto, subject to Section 8.2.


                                      24

<PAGE>

                                   ARTICLE VI

                          EQUITY AND OTHER COMPENSATION

         6.1   BONUS PLAN. Employees of the Palm Business (including, for
this purpose, any employees of 3Com who are designated as employees of the
Palm Business for purposes of the Separation) shall cease their participation
in the 3Com Bonus Plan in the quarter ending prior to the Distribution Date
(or such other date as 3Com and Palm may mutually agree). Any bonus pool, or
portion thereof, that has been finally determined or accrued for under the
3Com Bonus Plan for the benefit of, or that is allocable to, employees of the
Palm Business (including for this purpose, any employees of 3Com who are
designated as employees of the Palm Business for purposes of the Separation)
shall be paid to such Employees pursuant to the terms and conditions of the
3Com Bonus Plan, except that such payment shall be made on the Distribution
Date (or such other date as 3Com and Palm may mutually agree). Effective as
of the last day of the quarter ending prior to the Distribution Date (or such
other date as 3Com and Palm may mutually agree), Palm shall establish the
Palm Bonus Plan for Palm Employees and Palm Transferred Employees for Palm
fiscal period(s) beginning on and after such date (or such other date as 3Com
and Palm may mutually agree), to be administered by the Compensation
Committee of the Palm Board of Directors.

         6.2   EXECUTIVE BONUS PLAN. Employees of the Palm Business
(including, for this purpose, any employees of 3Com who are designated as
employees of the Palm Business for purposes of the Separation) shall cease
their participation in the 3Com Executive Bonus Plan in the quarter ending
prior to the Distribution Date (or such other date as 3Com and Palm may
mutually agree). Any bonus pool, or portion thereof, that has been finally
determined or accrued for under the 3Com Executive Bonus Plan for the benefit
of, or that is allocable to, employees of the Palm Business (including for
this purpose, any employees of 3Com who are designated as employees of the
Palm Business for purposes of the Separation) shall be paid to such Employees
pursuant to the terms and conditions of the 3Com Bonus Plan, except that such
payment shall be made on the Distribution Date (or such other date as 3Com
and Palm may mutually agree). The 3Com Board of Directors may, in its
absolute discretion following the IPO, adjust the performance and other
factors applicable to any employee of the Palm Business (including, for this
purpose, any employees of 3Com who are designated as employees of the Palm
Business for purposes of the Separation) under the 3Com Executive Bonus Plan
to reflect any changes in such employee's position, duties and
responsibilities following the IPO in such equitable fashion as it shall
determine. Effective as of the Distribution Date (or such other date as 3Com
and Palm may mutually agree), Palm shall establish the Palm Executive Bonus
Plan for Palm Employees and Palm Transferred Employees for Palm fiscal
period(s) beginning on and after the Distribution Date (or such other date as
3Com and Palm may mutually agree), to be administered by the Compensation
Committee of the Palm Board of Directors.


                                      25

<PAGE>

         6.3   3COM OPTIONS.

               (a) OPTION ASSUMPTION BY PALM. At the Distribution Date (or
such other date as 3Com and Palm may mutually agree), each outstanding 3Com
Option held by Palm Transferred Employees, whether vested or unvested, shall
be, in connection with the Distribution, assumed by Palm. Each 3Com Option so
assumed by Palm shall continue to have, and be subject to, the same terms and
conditions set forth in the 3Com Stock Plans and as provided in the
respective option agreements governing such 3Com Option as of the
Distribution Date (or such other date as 3Com and Palm may mutually agree),
except that (i) such 3Com Option shall be exercisable for that number of
whole shares of Palm common stock equal to the quotient of the number of
shares of 3Com common stock that were issuable upon exercise of such 3Com
Option as of the Distribution Date divided by the Ratio, rounded down to the
nearest whole number of shares of Palm common stock, and (ii) the per share
exercise price for the shares of Palm common stock issuable upon exercise of
such assumed 3Com Option shall be equal to the product determined by
multiplying the exercise price per share of 3Com common stock at which such
3Com Option was exercisable as of the Distribution Date by the Ratio, rounded
up to the nearest whole cent.

               (b) ASSUMPTION CRITERIA. The intention of 3Com and Palm is
that the assumption of 3Com Options by Palm pursuant to Subsection 6.3(a)
meet the following criteria: (i) the aggregate intrinsic value of the assumed
3Com Options immediately after the assumption is not greater than such value
immediately before the assumption; (ii) with respect to each such assumed
3Com Option, the ratio of the exercise price per share to the Palm Stock
Value of the assumed 3Com Options immediately after the assumption is not
less than the ratio of the exercise price per share to the 3Com Stock Value
immediately before the assumption; and (iii) the vesting and option term of
the assumed 3Com Options shall not be changed.

               (c) CERTAIN NON-U.S. OPTIONEES. Except as may otherwise be
agreed upon by 3Com and Palm and/or as set forth in Schedule 6.3, this
Section 6.3 shall govern the treatment of 3Com Options held by non-U.S. Palm
Transferred Employees.

         6.4   3COM RESTRICTED STOCK.

               (a) FORFEITURE. Except as otherwise specified herein and
subject to the terms of the applicable 3Com Stock Plans, on the Distribution
Date, 3Com Restricted Stock (including any Palm common stock issued with
respect to such 3Com Restricted Stock in connection with the Distribution)
held by Palm Transferred Employees shall be forfeited in accordance with the
terms of the applicable 3Com Stock Plans.

               (b) SUBSTITUTION. Each Palm Employee who holds 3Com Restricted
Stock shall receive Palm Restricted Stock at the Distribution Date (or such
other date as 3Com and Palm may mutually agree), as more fully set forth in
this Subsection 6.4(b). The value of a Palm Employee's


                                      26

<PAGE>

resulting Palm Restricted Stock award shall be substantially equivalent to
the value of his or her forfeited 3Com Restricted Stock award (such value to
be reasonably determined by Palm immediately before the Record Date, the
Distribution Date (or such other date as 3Com and Palm may mutually agree)).
The resulting Palm Restricted Stock shall vest under circumstances
substantially identical to the vesting conditions applicable to the
corresponding 3Com Restricted Stock.

               (c) CERTAIN NON-U.S. RESTRICTED STOCK HOLDERS. Except as may
otherwise be agreed upon by 3Com and Palm and/or as set forth in Schedule
6.4, this Section 6.4 shall govern the treatment of 3Com Restricted Stock
held by non-U.S. Palm Transferred Employees.

         6.5   STOCK PURCHASE PLAN. Through the Distribution Date, employees
of the Palm Business (including for this purpose any employee of 3Com who is
designated as an employee of the Palm Business for purposes of the
Separation) shall continue to be eligible for participation in the 3Com Stock
Purchase Plan. Effective on or before the IPO (or such other date as 3Com and
Palm may mutually agree), Palm shall sponsor a Stock Purchase Plan for the
benefit of Palm Employees and Palm Transferred Employees which shall be
comparable in the aggregate in all Material Features to the corresponding
3Com Stock Purchase Plan, except that the Palm Stock Purchase Plan shall
limit the payroll deductions that may be made by a participant thereunder,
when cumulated with his or her payroll deductions under the 3Com Stock
Purchase Plan, to an aggregate of ten percent (10%) of his or her
compensation (as such term is defined in the 3Com and Palm Stock Purchase
Plans).

         6.6   ADMINISTRATIVE SERVICES. To the extent not provided otherwise
in this Article, 3Com shall provide certain administrative services to Palm
in conjunction with both the 3Com and Palm Bonus Plans, Executive Bonus Plan
and Stock Plans in such manner and for such period as 3Com and Palm may
mutually agree. Palm shall reimburse 3Com for any and all direct and indirect
costs and expenses related thereto, subject to Section 8.2.


                                      27

<PAGE>

                                   ARTICLE VII

                            FRINGE AND OTHER BENEFITS

         7.1   EMPLOYEE ASSISTANCE PROGRAM. 3Com shall use its commercially
reasonable best efforts for and on behalf of Palm to procure, effective as of
the Distribution Date (or such other date as 3Com and Palm may mutually
agree), a contract with Concern, which is comparable in the aggregate in all
Material Features to 3Com's contract with Concern that provides for a Palm
Employee Assistance Program. Palm shall not unreasonably withhold its consent
to enter into such contracts and/or arrangements as procured by 3Com. Palm
shall cease to be a Participating Company in the 3Com Employee Assistance
Program coincident with Palm's establishment of the Palm Employee Assistance
Program. Palm shall reimburse 3Com for any and all direct and indirect costs
and expenses associated with its participation in the 3Com Employee
Assistance Program and 3Com's procurement of a contract or arrangement on
behalf of Palm, subject to Section 8.2.

         7.2   EDUCATIONAL ASSISTANCE PROGRAM. Effective as of the
Distribution Date (or such other date as Palm and 3Com may mutually agree),
Palm shall provide a Palm Educational Assistance Program to Palm Employees
which is comparable in the aggregate in all Material Features to the 3Com
Educational Assistance Program. Palm shall cease to be a Participating
Company in the 3Com Educational Assistance Program coincident with Palm's
establishment of the Palm Educational Assistance Program. At such time, any
and all outstanding approved reimbursements under the 3Com Educational
Assistance Program for Palm Employees shall be made by Palm. Furthermore,
Palm shall reimburse 3Com for any and all direct and indirect costs and
expenses associated with its participation in the 3Com Educational Assistance
Program and 3Com's preparation of an Educational Assistance Program on behalf
of Palm, subject to Section 8.2.

         7.3   CREDIT UNION. 3Com shall use its commercially reasonable best
efforts to make the AEA Technology Credit Union available to Palm Employees
on substantially similar terms and conditions as are offered to current
employees of the 3Com Group, through such date as Palm and 3Com may mutually
agree). 3Com shall use its commercially reasonable best efforts to make
certain other credit unions are available to former Employees of Palm on
substantially similar terms and conditions as offered to former employees of
the 3Com Group, through such date as Palm and 3Com may mutually agree). Palm
shall reimburse 3Com for any and all direct and indirect costs and expenses
related thereto, subject to Section 8.2.

         7.4   CAFETERIA AND RELATED SUBSIDIES. 3Com shall continue to make
its cafeterias, vending machines, and other food or beverage provision
facilities at the 3Com Santa Clara campus (collectively, the "Food
Programs"), available to Palm Employees on substantially similar terms and
conditions as are offered to employees of the 3Com Group, until the
termination of the occupancy agreements between 3Com and Palm regarding
Palm's occupancy of the 3Com Santa Clara campus


                                      28

<PAGE>

(or such other date as 3Com and Palm may mutually agree). 3Com and Palm shall
use their commercially reasonable best efforts to mutually agree on the
appropriate methods and/or processes to ensure continued tax-favored status
of 3Com's Food Programs under the Code. To the extent not otherwise addressed
in the occupancy agreements, Palm shall reimburse 3Com for any and all direct
and indirect costs and expenses associated with allowing Palm access to
3Com's Food Programs, subject to Section 8.2.

         7.5   EMPLOYEE PRODUCT DISCOUNTS AND COMPANY STORE. 3Com shall
provide access to its Company Store until the termination of the occupancy
agreements between 3Com and Palm at the 3Com Santa Clara campus (or such
other date as 3Com and Palm may mutually agree). 3Com shall provide qualified
employee discounts available to Palm Employees on substantially similar terms
and conditions as such discounts are made available to employees of the 3Com
Group through the Distribution Date (or such other date as 3Com and Palm may
mutually agree). To the extent not otherwise addressed in the occupancy
agreements, 3Com and Palm shall each reimburse the other for any and all
direct and indirect costs and expenses relating to the provision of qualified
discounts and access to the Company Store, subject to Section 8.2.

         7.6   WELLCOM. 3Com shall continue to provide access to its gym and
other athletic facilities (collectively, the "WellCom Program") available to
Palm Employees on substantially similar terms and conditions as are offered
to employees of the 3Com Group until the termination of the occupancy
agreements between 3Com and Palm regarding Palm's occupancy of the 3Com Santa
Clara campus (or such other date as 3Com and Palm may mutually agree). To the
extent not otherwise addressed in the occupancy agreements, Palm shall
reimburse 3Com for any and all direct and indirect costs and expenses
associated with allowing Palm access to 3Com's WellCom Program, subject to
Section 8.2.

         7.7   SOS PLAN. Effective as of the Distribution Date (or such other
date as Palm and 3Com may mutually agree), Palm shall provide an SOS Plan to
Palm Employees. Palm shall cease to be a Participating Company in the 3Com
SOS Plan coincident with Palm's establishment of the Palm SOS Plan (or, if
none, Palm's written notice to 3Com of its withdrawal as a Participating
Company in the 3Com SOS Plan). At such time, any and all outstanding approved
matching charity contributions under the 3Com SOS Plan for Palm Employees
shall be made by Palm. Furthermore, Palm shall reimburse 3Com for any and all
direct and indirect costs and expenses associated with its participation in
the 3Com SOS Plan and 3Com's preparation of an SOS Plan on behalf of Palm,
subject to Section 8.2.

         7.8   OTHER BENEFITS. To the extent that 3Com maintains, sponsors or
provides other fringe benefits specified in Schedule 7.8 to its eligible
employees, then 3Com shall, to the extent permitted by law, continue to make
such benefits available to Palm Employees on substantially similar terms and
conditions as are offered to the employees of the 3Com Group through the
Distribution Date (or such other date upon which Palm and 3Com mutually
agree). Palm shall reimburse 3Com for any and all direct and indirect costs
and expenses associated with, arising out of, or resulting from the provision
of such other fringe benefits to its employees, subject to Section 8.2. Palm
and 3Com


                                      29

<PAGE>

agree to make commercially reasonable best efforts to mutually agree on
whether, when, and on what terms any member of the Palm Group shall maintain,
sponsor, or offer fringe benefits.

         7.9   ADMINISTRATIVE SERVICES. To the extent not provided otherwise
in this Article, 3Com shall provide certain administrative services to Palm
in conjunction with both the 3Com and the Palm Fringe Benefit Plans in such
manner and for such period as 3Com and Palm may mutually agree. Palm shall
reimburse 3Com for any and all direct and indirect costs and expenses related
thereto, subject to Section 8.2.


                                      30

<PAGE>

                                  ARTICLE VIII

                           ADMINISTRATIVE PROVISIONS

         8.1   MASTER TRANSITIONAL SERVICES AGREEMENT. On or prior to the
Separation Date (or such other date as Palm and 3Com may mutually agree),
3Com and Palm may enter into a services agreement covering the provisions of
interim services, including financial, accounting, legal, benefits-related
and other services by 3Com to Palm or, in certain circumstances, vice versa,
if appropriate or necessary.

         8.2   PAYMENT OF LIABILITIES, PLAN EXPENSES AND RELATED MATTERS.

               (a) EXPENSES AND COSTS CHARGEABLE TO A TRUST. Effective as of
the Separation Date, Palm shall pay its share of any contributions made to
any trust maintained in connection with a 3Com Plan while Palm is a
Participating Company in that 3Com Plan.

               (b) CONTRIBUTIONS TO TRUSTS. With respect to 3Com Plans to
which Palm Employees and Palm Transferred Employees make contributions, 3Com
shall use reasonable procedures to determine Palm Assets and Liabilities
associated with each such Plan, taking into account such contributions,
settlements, refunds and similar payments.

               (c) ADMINISTRATIVE EXPENSES NOT CHARGEABLE TO A TRUST.
Effective as of the Separation Date, to the extent not charged pursuant to a
services agreement (as contemplated by Section 8.1) or another Ancillary
Agreement (including, without limitation, the Master Transitional Services
Agreement), and to the extent not otherwise agreed to in writing by 3Com and
Palm, and to the extent not chargeable to a trust established in connection
with a 3Com Plan (as provided in paragraph (a)), Palm shall be responsible,
through either direct payment or reimbursement to 3Com in accordance with
Section 5.3 of the Separation Agreement and/or with the Master Transitional
Services Agreement, for its allocable share of actual third party and/or
vendor costs and expenses incurred by 3Com and additional costs and expenses,
subject to the methodology reasonably agreed upon by 3Com and Palm, in the
administration of (i) the 3Com Plans while Palm participates in such 3Com
Plans, and (ii) the Palm Plans, to the extent 3Com procures, prepares,
implements and/or administers such Palm Plans. To the extent not otherwise
determinable through direct allocation of costs and expenses, Palm's
allocable share of such costs and expenses will be based on Palm Revenue as a
percentage of total 3Com Revenue.

               (d) ALLOCATION OF COSTS AND EXPENSES. Except as otherwise
provided in this Agreement, the Master Transitional Services Agreement, or in
any services agreement between 3Com and Palm (as contemplated in Section 8.1)
relating to the Separation, the IPO, or the Distribution, all costs and
expenses of the parties hereto in connection with the Separation, the IPO
(including underwriting discounts and commissions) and the Distribution and
costs and expenses of the parties hereto in connection with the Separation
shall be allocated between Palm and 3Com.


                                      31

<PAGE>

Palm and 3Com shall each be responsible for their own internal fees, costs
and expenses incurred in connection with the Separation, the IPO and the
Distribution.

         8.3   TRANSITIONAL STAFFING SERVICES. 3Com shall provide certain
transitional staffing services and other services as 3Com and Palm may
mutually agree (provided, however, for purposes of the Workers' Compensation
Plan (as set forth in Section 5.13) the Transitional Staffing Services
Agreement for finance shall control) to Palm in such manner and for such
period as 3Com and Palm may mutually agree. Palm shall reimburse 3Com for any
and all direct and indirect costs and expenses related thereto, subject to
Section 8.2.

         8.4   SHARING OF PARTICIPANT INFORMATION. In addition to the
responsibilities and obligations of 3Com and Palm specified in Exhibit I to
the Separation Agreement, 3Com and Palm shall share, or cause to be shared,
all participant information that is necessary or appropriate for the
efficient and accurate administration of each of the 3Com Plans and the Palm
Plans during the respective periods applicable to such Plans as Palm and 3Com
may mutually agree). 3Com and Palm and their respective authorized agents
shall, subject to applicable laws of confidentiality and data protection, be
given reasonable and timely access to, and may make copies of, all
information relating to the subjects of this Agreement in the custody of the
other party or its agents, to the extent necessary or appropriate for such
administration.

         8.5   REPORTING AND DISCLOSURE COMMUNICATIONS TO PARTICIPANTS. While
Palm is a Participating Company in the 3Com Plans, Palm shall take, or cause
to be taken, all actions necessary or appropriate to facilitate the
distribution of all 3Com Plan-related communications and materials to
employees, participants and beneficiaries, including (without limitation)
summary plan descriptions and related summaries of material modification(s),
summary annual reports, investment information, prospectuses, notices and
enrollment material for the 3Com Plans and Palm Plans. Palm shall reimburse
3Com for the costs and expenses relating to the copies of all such documents
provided to Palm, except to the extent such costs are charged pursuant to
Section 8.2 (or are otherwise addressed in this Agreement) or pursuant to an
Ancillary Agreement. Palm shall assist 3Com in complying with all reporting
and disclosure requirements of ERISA, including the preparation of Form
Series 5500 annual reports for the 3Com Plans, as applicable.

         8.6   AUDITS REGARDING VENDOR CONTRACTS. From the period beginning
as of the Separation Date and ending on such date as 3Com and Palm may
mutually agree, 3Com and Palm and their duly authorized representatives shall
have the right to conduct joint audits with respect to any vendor contracts
that relate to both the 3Com Health and Welfare Plans and the Palm Health and
Welfare Plans. The scope of such audits shall encompass the review of all
correspondence, account records, claim forms, canceled drafts (unless
retained by the bank), provider bills, medical records submitted with claims,
billing corrections, vendor's internal corrections of previous errors and any
other documents or instruments relating to the services performed by the
vendor under the applicable vendor contracts. 3Com and Palm shall agree on
the performance standards, audit methodology, auditing policy and quality
measures, reporting requirements, and the manner in which costs and expenses
incurred in connection with such audits will be shared.


                                      32

<PAGE>

         8.7   EMPLOYEE IDENTIFICATION NUMBERS. Until the Distribution Date
(or such other period as 3Com and Palm may mutually agree), 3Com and Palm
shall not change any employee identification numbers assigned by 3Com. 3Com
and Palm mutually agree to establish a policy pursuant to which employee
identification numbers assigned to either employees of 3Com or Palm shall not
be duplicated between 3Com and Palm.

         8.8   BENEFICIARY DESIGNATIONS. Subject to Section 8.11, all
beneficiary designations made by Palm Employees and Palm Transferred
Employees for the 3Com Plans shall be transferred to and be in full force and
effect under the corresponding Palm Plans, in accordance with the terms of
each such applicable Palm Plan, until such beneficiary designations are
replaced or revoked by the Palm Employees and Palm Transferred Employees who
made the beneficiary designations.

         8.9   REQUESTS FOR IRS AND DOL OPINIONS. 3Com and Palm shall make
such applications to regulatory agencies, including the IRS and DOL, as may
be necessary or appropriate. Palm and 3Com shall cooperate fully with one
another on any issue relating to the transactions contemplated by this
Agreement for which 3Com and/or Palm elects to seek a determination letter or
private letter ruling from the IRS or an advisory opinion from the DOL.

         8.10  FIDUCIARY MATTERS. 3Com and Palm each acknowledge that actions
contemplated to be taken pursuant to this Agreement may be subject to
fiduciary duties or standards of conduct under ERISA or other applicable law,
and that no party shall be deemed to be in violation of this Agreement if
such party fails to comply with any provisions hereof based upon such party's
good faith determination that to do so would violate such a fiduciary duty or
standard.

         8.11  CONSENT OF THIRD PARTIES. If any provision of this Agreement
is dependent on the consent of any third party (such as a vendor) and such
consent is withheld, 3Com and Palm shall use their commercially reasonable
best efforts to implement the applicable provisions of this Agreement. If any
provision of this Agreement cannot be implemented due to the failure of such
third party to consent, 3Com and Palm shall negotiate in good faith to
implement such provision in a mutually satisfactory manner.

         8.12  3COM INTRANET. Through the Distribution Date (or such other
date as Palm and 3Com may mutually agree), 3Com shall make its 3Community
intranet site available to Palm Employees on substantially the same terms as
such intranet site is made available to 3Com Employees. Palm shall reimburse
3Com for any and all costs and expenses related to making its intranet site
available to Palm Employees, subject to the Master Transitional Services
Agreement. 3Com and Palm shall use their commercially reasonable best efforts
to mutually agree on the appropriate methods by which Palm shall establish
its own intranet site.

         8.13  TAX COOPERATION. In connection with the interpretation and
administration of this Agreement, 3Com and Palm shall take into account the
agreements and policies established pursuant to the Separation Agreement and
the parties' intent to qualify the Distribution as a tax-free reorganization
under Code Sections 355 and 368(a)(1)(D).

                                      33
<PAGE>

                                   ARTICLE IX

                           EMPLOYMENT-RELATED MATTERS

         9.1   TERMS OF PALM EMPLOYMENT. All basic terms and conditions of
employment for Palm Employees and Palm Transferred Employees including,
without limitation, their pay and benefits in the aggregate, shall, to the
extent legally and practicably possible, remain substantially the same
through the Distribution Date as the terms and conditions that were in place
when the Palm Employee or Palm Transferred Employee was employed by the 3Com
Group, as applicable. Notwithstanding the foregoing, Palm Employees and Palm
Transferred Employees shall be required to execute a new agreement regarding
confidential information and proprietary developments in a form approved by
Palm by the Distribution Date. In addition, nothing in the Separation
Agreement, this Agreement, or any Ancillary Agreement should be construed to
change the at-will status of the employment of any of the employees of the
3Com Group or the Palm Group.

         9.2   HR DATA SUPPORT SYSTEMS. 3Com shall provide human resources
data support for Palm Employees and Palm Transferred Employees through
December 31, 2000 (or such other period as 3Com and Palm may mutually agree).
Palm agrees to fully reimburse 3Com for any and all direct and indirect costs
and expenses associated with its use of the 3Com human resources data support
systems, subject to Section 8.2. In the event that 3Com and Palm agree to
extend the time period beyond December 31, 2000, then the costs and expenses
will be computed in accordance with Section 8.2; provided, however, an
additional ten percent (10%) charge will be incurred by Palm. 3Com and Palm
each reserves the right to discontinue Palm's access to any 3Com human
resources data support systems with sixty (60) days notice (or such other
period as 3Com and Palm may mutually agree).

         9.3   NON-SOLICITATION OF EMPLOYEES. Subject to Section 5.12 of the
Separation Agreement, 3Com and Palm each agree that, effective as of the IPO,
they shall not solicit or recruit, without the other party's express written
consent, the other party's employees for a period of two (2) years following
the Distribution Date. To the extent this prohibition is waived, any
recruitment efforts by either 3Com or Palm during the period of two (2) years
after the Distribution Date shall be coordinated with the Senior Vice
President, Human Resources of 3Com and the Vice President, Human Resources of
Palm or each of their respective designates and appropriate management.
Notwithstanding the foregoing, this prohibition on solicitation does not
apply to actions taken by a party either: (a) solely as a result of an
employee's affirmative response to a general recruitment effort carried out
through a public solicitation or general solicitation, or (b) as a result of
an employee's initiative.

         9.4   EMPLOYMENT OF EMPLOYEES WITH U.S. WORK VISAS. Palm Employees
with U.S. work visas authorizing them to work for Palm will continue to hold
work authorization for the Palm Group after the Separation Date. Palm will
request amendments to the nonimmigrant visa status of Palm Employees and Palm
Transferred Employees with U.S. work visas authorizing them to work for 3Com,
excluding the Palm Group, to request authorization to work for Palm.

                                      34
<PAGE>

         9.5   CONFIDENTIALITY AND PROPRIETARY INFORMATION. No provision of
the Separation Agreement or any Ancillary Agreement shall be deemed to
release any individual for any violation of the 3Com non-competition
guideline or any agreement or policy pertaining to confidential or
proprietary information of any member of the 3Com Group, or otherwise relieve
any individual of his or her obligations under such non-competition
guideline, agreement, or policy.

         9.6   PTO. Effective as of the Separation Date (or such other date
as 3Com and Palm may mutually agree), Palm shall establish the Palm PTO Plan
which shall be comparable in the aggregate in all Material Features to the
3Com PTO Plan. Effective as soon as administratively practicable after the
Separation Date (or such other date as 3Com and Palm may mutually agree),
3Com shall transfer to Palm all data and information relating to the 3Com PTO
Plan. Effective as soon as administratively practicable following the
Separation Date (or such other date as 3Com and Palm may mutually agree),
Palm shall assume all Liabilities attributable to Palm Employees under the
3Com PTO Plan. In the event that a 3Com Employee or Palm Employee transfers
his or her employment to the other party before the Distribution Date, such
transfer of employment shall not result in a payout or constitute a
termination event for purposes of the PTO Plan, and no duplication of
benefits shall occur as a result of any such transfer of employment between
3Com and Palm. Furthermore, the Liability attributable to any Palm Employee
or 3Com Employee who transfers employment between 3Com and Palm prior to the
Distribution Date shall be assumed by the employer subsequent to the transfer.

         9.7   PERSONNEL RECORDS. Subject to applicable laws on
confidentiality and data protection, 3Com shall deliver to Palm prior to the
Distribution Date (or such other date as 3Com and Palm may mutually agree),
personnel records of Palm Employees and Palm Transferred Employees to the
extent such records relate to Palm Employees' and Palm Transferred Employees'
active employment by, leave of absence from, or termination of employment
with Palm. Palm shall fully reimburse 3Com for any and all direct and
indirect costs and expenses associated with such delivery, subject to Section
8.2.

         9.8   MEDICAL RECORDS. Subject to applicable laws on confidentiality
and data protection, 3Com shall deliver to Palm prior to the Distribution
Date (or such other date as 3Com and Palm may mutually agree), medical
records of Palm Employees and Palm Transferred Employees to the extent such
records (a) relate to Palm Employees' and Palm Transferred Employees' active
employment by, leave of absence from, or termination of employment with Palm,
and (b) are necessary to administer and maintain employee benefit plans,
including Health Plans and Workers' Compensation Plan and for determining
eligibility for paid and unpaid Leaves of Absence for medical reasons. Palm
shall fully reimburse 3Com for any and all direct and indirect costs and
expenses associated with such delivery, subject to Section 8.2.

         9.9   UNEMPLOYMENT INSURANCE PROGRAM.

                  (a) CLAIMS ADMINISTRATION THROUGH DISTRIBUTION DATE. Unless
otherwise directed by Palm, 3Com shall use its commercially reasonable best
efforts to cause Palm to receive service from 3Com's third party unemployment
insurance administrator through the Distribution Date (or

                                      35
<PAGE>

such other date as 3Com and Palm may mutually agree). Palm shall reimburse
3Com for its allocable share of fees paid and related costs and expenses by
3Com to its third party unemployment insurance administrator for services
rendered during such period, pursuant to the Master Transitional Services
Agreement. Palm shall cooperate with the unemployment insurance administrator
by providing any and all necessary or appropriate information reasonably
available to Palm.

                  (b) CLAIM ADMINISTRATION POST-DISTRIBUTION DATE. Before the
Distribution Date, 3Com shall use its commercially reasonable best efforts
for and on behalf of Palm to procure an agreement with its third party
unemployment insurance administrator comparable in the aggregate in all
Material Features to the 3Com third party unemployment insurance agreement,
including, without limitation, administration of all unemployment
compensation claims of Palm Transferred Employees and Palm Employees,
regardless of whether such claims were filed before, on, or after the
Distribution Date. Palm shall not unreasonably withhold its consent to adopt
such an agreement with such administrator. Palm shall reimburse 3Com for any
and all direct and indirect costs and expenses associated with such
procurement, subject to the Master Transitional Services Agreement.

         9.10  NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES.
No provision of this Agreement, the Separation Agreement, or any Ancillary
Agreement shall be construed to create any right or accelerate entitlement to
any compensation or benefit whatsoever on the part of any Palm Employee, Palm
Transferred Employee or other former, present or future employee of 3Com or
Palm under any 3Com Plan or Palm Plan or otherwise. Without limiting the
generality of the foregoing: (a) neither the Distribution or Separation, nor
the termination of the Participating Company status of Palm or any member of
the Palm Group shall cause any employee to be deemed to have incurred a
termination of employment; and (b) no transfer of employment between 3Com and
Palm before the Distribution Date shall be deemed a termination of employment
for any purpose hereunder.

         9.11  EMPLOYMENT LITIGATION.

                  (a) CLAIMS TO BE TRANSFERRED TO PALM AND/OR JOINTLY
DEFENDED BY 3COM AND PALM. On or before the Separation Date, 3Com and Palm
will enter into a written agreement that specifies the legal responsibility
and accompanying Liability for identified claims of Palm.

                  (b) UNSCHEDULED CLAIMS. Palm shall have the sole
responsibility for all employment-related claims regarding Palm Employees and
Palm Transferred Employees that exist, or come into existence, on or after
the Separation Date relating to, arising out of, or resulting from their
employment with the Palm Business or the Palm Group.

                                      36
<PAGE>

                                    ARTICLE X

                               GENERAL PROVISIONS

         10.1  EFFECT IF SEPARATION, IPO AND/OR DISTRIBUTION DOES NOT OCCUR.
Subject to Section 10.10, if the Separation, IPO and/or Distribution does not
occur, then all actions and events that are, under this Agreement, to be
taken or occur effective as of the Separation Date, IPO, and/or Distribution
Date, or otherwise in connection with the Separation, IPO and/or
Distribution, shall not be taken or occur except to the extent specifically
agreed by Palm and 3Com.

         10.2  RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be
deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, the understanding and agreement being that no provision contained
herein, and no act of the parties, shall be deemed to create any relationship
between the parties other than the relationship set forth herein.

         10.3  AFFILIATES. Each of 3Com and Palm shall cause to be performed
and hereby guarantee the performance of any and all actions of the 3Com Group
or the Palm Group, respectively.

         10.4  INCORPORATION OF SEPARATION AGREEMENT PROVISIONS. The
following provisions of the Separation Agreement are hereby incorporated
herein by reference, and unless otherwise expressly specified herein, such
provisions shall apply as if fully set forth herein (references in this
Section to an "Article" or "Section" shall mean Articles or Sections of the
Separation Agreement, and, except as expressly set forth below, references
within the material incorporated herein by reference shall be references to
the Separation Agreement): Section 5.4 (relating to Agreement for Exchange of
Information); Section 5.9 (relating to Dispute Resolution); Section 5.11
(relating to No Representation or Warranty); and Article V (relating to
Covenants and Other Matters).

         10.5  GOVERNING LAW. To the extent not preempted by applicable
federal law, including, without limitation, ERISA, the Code and applicable
securities laws, this Agreement shall be governed by, construed and
interpreted in accordance with the laws of the State of California,
irrespective of the choice of law principles of the State of California, as
to all matters, including matters of validity, construction, effect,
performance and remedies.

         10.6  ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives
and successors, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. This Agreement may be
enforced separately by each member of the 3Com Group and each member of the
Palm Group. Neither party may assign this Agreement or any rights or
obligations hereunder, without the prior written consent of the other party,
and any such assignment shall be void; provided, however, either party may
assign this Agreement to a successor entity in conjunction with such party's
reincorporation.

                                      37
<PAGE>

         10.7  SEVERABILITY. If any term or other provision of this Agreement
is determined to be invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to either party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
as closely as possible and in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest possible extent.

         10.8  INTERPRETATION. The headings contained in this Agreement or
any Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Schedule
but not otherwise defined therein shall have the meaning assigned to such
term in this Agreement. When a reference is made in this Agreement to an
Article, Section or Schedule, such reference shall be to an Article of,
Section of, or Schedule to this Agreement unless otherwise indicated.

         10.9  AMENDMENT. The Board of Directors of Palm and 3Com may
mutually agree to amend the provisions of this Agreement at any time or
times, for any reason, either prospectively or retroactively, to such extent
and in such manner as the Boards mutually deem advisable. Each Board may
delegate its amendment power, in whole or in part, to one or more Persons or
committees as it deems advisable. The Senior Vice President, Human Resources
of 3Com and the Vice President, Human Resources of Palm have full power and
authority to mutually adopt an amendment to this Agreement (subject to each
of their authority to amend Plans). No change or amendment will be made to
this Agreement, except by an instrument in writing signed by authorized
individuals.

         10.10 TERMINATION. This Agreement may be terminated and the
Distribution abandoned at any time prior to the IPO Closing Date by and in
the sole discretion of 3Com without the approval of Palm. This Agreement may
be terminated at any time after the IPO Closing Date and before the
Distribution Date by mutual consent of 3Com and Palm. In the event of
termination pursuant to this Section, no party shall have any liability of
any kind to the other party.

         10.11 CONFLICT. In the event of any conflict between the provisions
of this Agreement and the Separation Agreement, any Ancillary Agreement, or
Plan, the provisions of this Agreement shall control.

         10.12 COUNTERPARTS. This Agreement, including the Schedules hereto
and the other documents referred to herein, may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together
shall constitute one and the same agreement.

                                      38
<PAGE>


         IN WITNESS WHEREOF, each of the parties have caused this Employee
Matters Agreement to be executed on its behalf by its officers thereunto duly
authorized on the day and year first above written.

                                        3COM CORPORATION


                                        By:___________________________________

                                        Name:_________________________________

                                        Title:


                                        PALM, INC.


                                        By: __________________________________

                                        Name: ________________________________

                                        Title:
<PAGE>


                                  SCHEDULE 2.7

                                  FOREIGN PLANS
                                  -------------

------------------------------------------------------------------------------
               Actions Required in Relation to Palm at Separation
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
Country              Benefit                               Action
-------------------- ------------------------------------- ------------------------------------------------------------
<S>                  <C>                                   <C>
-------------------- ------------------------------------- ------------------------------------------------------------
UK                   Pension Plan                          Amend plan to enable Palm Employees to participate until
                                                           Distribution Date
-------------------- ------------------------------------- ------------------------------------------------------------
                     Healthcare                            Amend current arrangements to enable Palm Employees to
                                                           continue to participate until April 2001 (renewal data)
-------------------- ------------------------------------- ------------------------------------------------------------
                     Life Assurance                        Amend current arrangements to enable Palm Employees to
                                                           continue to participate until Distribution Date
-------------------- ------------------------------------- ------------------------------------------------------------
                     PHI                                   Amend current arrangements to enable Palm Employees to
                                                           continue to participate until Distribution Date
-------------------- ------------------------------------- ------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
France               Supplementary Pension Plan            Withdraw this benefit
-------------------- ------------------------------------- ------------------------------------------------------------
                     Healthcare/Disability                 Replicate current arrangements
-------------------- ------------------------------------- ------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
Sweden               Pension/Life/Disability               Replicate current arrangements at Separation
-------------------- ------------------------------------- ------------------------------------------------------------
                     Healthcare                            Arrange for Palm Employees to participate in 3Com
                                                           arrangements until Distribution Date
-------------------- ------------------------------------- ------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
Switzerland          Life/Pension Disability               Replicate current arrangements
-------------------- ------------------------------------- ------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
Italy                Personal                              Replicate current arrangements
                     Accident/Healthcare/Medical Check Up
-------------------- ------------------------------------- ------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
Netherlands          Pension                               Arrange for Palm Employees to participate in 3Com
                                                           arrangements until Distribution Date
-------------------- ------------------------------------- ------------------------------------------------------------
                     Healthcare/Life/Disability            Arrange for Palm Employees to participate in 3Com
                                                           arrangements until Distribution Date
-------------------- ------------------------------------- ------------------------------------------------------------

-------------------- ------------------------------------- ------------------------------------------------------------
Germany              Support Fund                          Replicate current arrangements
-------------------- ------------------------------------- ------------------------------------------------------------
                     Direct Insurance                      Transfer Palm Employees' arrangements to Palm
-------------------- ------------------------------------- ------------------------------------------------------------

                                      -i-
</TABLE>
<PAGE>

                                 SCHEDULE 5.1(a)

                          PALM HEALTH AND WELFARE PLANS

         Palm Health Plans:
         -        Aetna US Healthcare Exclusive Provider Organization (EPO)
         -        Aetna US Healthcare Preferred Provider Organization (PPO)
         -        Aetna US Healthcare Out-of-Area Plan
         -        Kaiser HMO
         -        MetLife Dental Plan
         -        Vision Service Plan
         Palm Welfare Plans
         Group Life Plan
         AD&D Plan
         Severance Plan
         Sabbatical Plan
         Disability Plans
         Business Travel Accident Insurance
         Section 125 Plan
         Leave of Absence Programs and FMLA
         3Com Workers' Compensation Plan

                                     -ii-

<PAGE>

                               SCHEDULE 5.1(c)(i)

                                 THIRD PARTY ASO

         Aetna US Healthcare Medical Plans
         MetLife Dental Plans
         Matrix Short-Term Disability Plan Administrator


                                     -iii-

<PAGE>

                               SCHEDULE 5.1(c)(ii)

                            GROUP INSURANCE POLICIES

         Prudential Life Insurance
         Prudential LTD Insurance
         The Hartford Accidental Death and Dismemberment (AD&D) Insurance
         The Hartford Business Travel Accident (BTA) Insurance

                                     -iv-

<PAGE>

                              SCHEDULE 5.1(c)(iii)

                                  HMO AGREEMENT

Kaiser HMO

                                     -v-

<PAGE>

                                 SCHEDULE 5.2(a)

                          3COM HEALTH AND WELFARE PLANS

         3Com Health Plans:
         -        Aetna US Healthcare Exclusive Provider Organization (EPO)
         -        Aetna US Healthcare Preferred Provider Organization (PPO)
         -        Aetna US Healthcare Out-of-Area Plan
         -        Harvard Pilgrim Health Care HMO
         -        HMO Illinois
         -        Kaiser HMO
         -        MetLife Dental Plan
         -        Vision Service Plan
         3Com Welfare Plans
         Group Life Plan AD&D Plan
         Severance Plan
         Sabbatical Plan
         Disability Plans
         Business Travel Accident Insurance
         Long-Term Care Plan
         Section 125 Plan
         Leave of Absence Programs and FMLA
         Workers' Compensation Plan

                                     -vi-

<PAGE>

                                  SCHEDULE 6.3

                      OPTIONS HELD BY CERTAIN NON-U.S. PALM
                              TRANSFERRED EMPLOYEES

Certain Non-U.S. jurisdictions require the consent of Palm Transferred Employees
to Palm's assumption of such Employee's 3Com Options. To the extent that such
consent is not obtained, the Options held by such Palm Transferred Employees
shall not be assumed and shall generally terminate three (3) months after the
Distribution.

                                     -vii-

<PAGE>

                                  SCHEDULE 6.4

                          3COM RESTRICTED STOCK HELD BY
                       NON-U.S. PALM TRANSFERRED EMPLOYEES

                                      NONE

                                     -viii-

<PAGE>

                                  SCHEDULE 7.8

                              OTHER FRINGE BENEFITS

         Financial Engines Retirement Web Advisor
         Human Resources Education and Development Program
         Hyatt Legal
         International SOS Assistance (travel protection)
         MetLife Group Auto and Home Insurance
         Outplacement Services
         Training

                                     -ix-