**Exhibit 10.1**

 

**SEVERANCE AGREEMENT AND GENERAL RELEASE**

 

This Severance Agreement andGeneral Release (including all Addenda hereto, the “Agreement”) is entered intoby and between 3Com Corporation, a Delaware corporation (“3Com” or the“Company”) and Mark Slaven (the “Executive”). 3Com and the Executive shall each individually be referred to herein asa “Party” and together as the “Parties.”

 

WHEREAS, the Executive hasbeen employed with the Company as its Executive Vice President - Finance(“EVP”) and Chief Financial Officer (“CFO”);

 

WHEREAS, the Parties havemutually agreed that on or about August 13, 2004, following the filing ofthe Company’s SEC Form 10-K for FY 2004, the Executive will step down as EVPand CFO and will continue employment with the Company for a certain period in anon-executive capacity in order to render services on various matters ofimportance to 3Com;

 

WHEREAS, the Parties havemutually agreed that the Executive’s employment with the Company will terminateno later than December 31, 2004 in a manner that is amicable andsatisfactory to both Parties;

 

WHEREAS, the Executive maybe eligible to receive certain severance benefits as a result of his separationfrom employment with the Company under the terms and conditions of his ManagementRetention Agreement, as amended, and the Company’s Section 16 OfficerSeverance Plan;

 

WHEREAS, the Executiveagrees to release the Company from any and all claims arising from or relatingto his employment with 3Com and the termination thereof;

 

NOW, THEREFORE, inconsideration of the mutual promises contained in this Agreement, the receiptand sufficiency of which is hereby acknowledged, the Parties hereby agree asfollows:

 

1.                                       Transition of Employment Status.  TheExecutive hereby agrees that his position as EVP and CFO will terminateeffective August 13, 2004 (“Transition Date”) and that he will use hisbest efforts to fulfill his duties and responsibilities as EVP and CFO untilthe Transition Date, including, without limitation, the completion and filingof the Company’s SEC Form 10-K for FY 2004. Upon the Transition Date, the Executive will continue employment with3Com in a non-executive capacity, the title and duties of which will bedetermined by the Company’s Chief Executive Officer.  Effective as of the first regularly scheduled pay periodfollowing the Transition Date, the Executive shall receive a base salary ofThree Thousand Nine Hundred and Six Dollars and Twenty-Five Cents ($3,906.25)per semi-monthly pay period ($93,750.00 annualized), less all applicable taxesand withholdings, commensurate with the 75% reduction in hours that theExecutive will be expected to work after the Transition Date in hisnon-executive capacity.  The Company’spayment and/or reimbursement of the Executive’s extended business commutingexpenses set forth in the letter agreement dated June 1, 2003 (as amended)shall terminate effective as of the Transition Date.  3Com will reimburse the Executive for all authorized, reasonablebusiness and travel expenses incurred after the Transition Date in the courseof the Executive’s non-executive duties. The Executive shall not accrue any Personal Time Off (PTO) after theTransition Date.  However, the Executiveshall continue to have the right to participate in the Company’s non-executivebenefits plans to the same extent and at the same levels that he isparticipating as of the Transition Date. In addition, the Executive shall remain eligible to participate in theCompany’s 3Bonus program during the first half bonus period of the Company’s FY2005 until his Termination Date in accordance with the terms and conditions ofthe 3Bonus program.  The Executive’s3Bonus award, if any, shall be calculated by applying the Company’s performancemultiplier for the first half of FY 2005 (to be determined at the Company’sdiscretion based on the Company’s achievement of its corporate objectives andfinancial measures) to the Executive’s full target bonus for the first half ofFY 2005.

 

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2.                                       Termination of Employment.  TheExecutive agrees that his employment with the Company shall terminate effectiveDecember 31, 2004 unless the Executive elects to terminate his employmentearlier than that date by providing at least fourteen (14) days’ advancewritten notice to the Company’s Chief Executive Officer.  Upon the termination of the Executive’semployment, the Executive will receive payment for all accrued, unused PTO athis rate of pay immediately preceding the Transition Date.  The Executive’s last day of employment withthe Company shall be referred to herein as the “Termination Date”.

 

3.                                       Executive Severance Benefits.  Inconsideration for and contingent upon his execution and non-revocation of thisAgreement, the Employee Agreement attached hereto as Addendum I, and theSupplemental Release Agreement attached hereto as Addendum II (which shall beexecuted no earlier than the Termination Date), the Company agrees to providethe Executive with the following benefits:

 

a.                                       Severance Payment.  Nolater than thirty (30) days following 3Com’s receipt of the Executive’sexecuted copy of the Supplemental Release Agreement attached hereto as AddendumII (which shall be executed no earlier than the Termination Date), the Companyshall make a lump sum severance payment to the Executive in the amount of SixHundred and Eighteen Thousand Seven Hundred and Fifty Dollars ($618,750.00),less all applicable taxes and withholdings, payable via direct deposit throughthe Company’s regular payroll practices. The gross amount of the severance payment shall include the Executive’sannual base salary of Three Hundred and Seventy-Five Thousand Dollars($375,000.00) and the Executive’s full annual target bonus of Two Hundred andForty-Three Thousand Seven Hundred and Fifty Dollars ($243,750.00).

 

b.                                      Benefits Continuation.  TheExecutive is eligible to continue coverage for himself and his “qualifiedbeneficiaries” (as defined in Section 4980B of the federal InternalRevenue Code, as amended) under the Company’s group medical, dental, and visioninsurance plans (“Health Care Plans”) in accordance with the ConsolidatedOmnibus Budget Reconciliation Act of 1985 (“COBRA”), as amended.  If the Executive timely and properly electsto continue coverage under the Company’s Health Care Plans, the Company shallcontinue to pay the Company’s sponsored portion of the premiums for theExecutive’s elected coverage under the Health Care Plans until the earlierof:  (1) the one (1) year anniversary ofthe Executive’s Termination Date; or (2) the date upon which the Executive(and/or his qualified beneficiaries) are covered under other group medical,dental and/or vision insurance plans that provide Executive and/or hisqualified beneficiaries with comparable benefits and levels of coverage.  The Executive understands and agrees that heis obligated to notify the Company’s Benefits Manager immediately of any suchcomparable benefits and levels of coverage for himself and/or his qualifiedbeneficiaries.  The Executive shall beresponsible for the payment of the difference between the total insurancepremiums for the Executive’s elected coverage and the Company’s sponsoredportion in accordance with terms and procedures established by the Company atits discretion.  Any such continuationof coverage under the Health Care Plans shall be governed by COBRA and theterms and conditions of the plan documents for the applicable Health CarePlans.  The Executive understands andagrees that if he elects to continue coverage for himself and/or his qualifiedbeneficiaries under the Health Care Plans after the one (1) year anniversary ofhis Termination Date, the Executive shall be solely responsible to pay the fullamount of any and all premiums for such coverage.

 

c.                                       Life Insurance.  TheCompany shall continue the Executive’s term life insurance coverage as of theTermination Date and pay any and all premiums arising therefrom for the periodof one (1) year following the Executive’s Termination Date, subject to 3Com 

 

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obtaining a rider from theCompany’s life insurance carrier on commercially reasonable terms.

 

d.                                      Accelerated Vesting and Extended Exercise ofStock Options.  Effective as of the Executive’s execution ofthe Supplemental Release Agreement attached hereto as Addendum I (which shallbe executed no earlier than the Termination Date), all of the Executive’sunvested stock options shall have their vesting accelerated by one year.  In addition, the exercise period for theExecutive’s vested stock options shall be extended to the earlier of:  (1) the one year anniversary of theExecutive’s Termination Date; or (2) the original term of the optiongrant.  Except as provided in thisSection 3(d), the Executive’s stock options shall be governed by the termsand conditions of the applicable plan documents and the Executive’s stockoption agreements.  The Executiveunderstands and agrees that he is required to make arrangements reasonablysatisfactory to the Company to facilitate the Company’s compliance with allfederal and state tax and withholding requirements as a condition to exercisinghis vested stock options, and receiving his restricted stock and/or otherCompany-issued equity compensation.

 

4.                                       Payment for Golden Parachute Excise Taxes.  Inthe event that any severance benefits provided to the Executive pursuant toSection 3 above (a) constitute “parachute payments” within the meaning ofSection 280G of the Internal Revenue Code of 1986, as amended (the“Code”), (b) are subject to any excise tax imposed under Section 4999 ofthe Code, and (c) the aggregate value of such parachute payments, as determinedin accordance with Section 280G of the Code and the applicable regulationsissued by the U.S. Department of the Treasury, is equal to or greater than theproduct obtained by multiplying 3.59 by the Executive’s “base amount” asdefined by Section 280G(b)(3) of the Code, then the Executive shallreceive: (i) a payment from the Company sufficient to pay such excise tax; and(ii) an additional payment from the Company sufficient to pay any excise tax andthe federal and state income and employment taxes arising from the payment madeby the Company pursuant to subsection (i) above.

 

5.                                       Release of Claims.   Inexchange for the executive severance benefits set forth in Section 3above, the Executive hereby irrevocably and unconditionally releases 3Com andits parents, subsidiaries, predecessors, successors, affiliates and jointventures, and all of their directors, officers, employees, representatives,attorneys, agents, insurers, assigns, employee benefit programs (and thetrustees, administrators, fiduciaries, and insurers of such programs), and anyother persons acting by, through, under, or in concert with any of the personsor entities identified above (the “Released Parties”) from all known and unknownclaims, promises, debts, obligations, causes of action, or similar rights ofany type, in law or in equity, that the Executive has, had or may have hadarising from or relating to his employment with 3Com and the terminationthereof (“Claims”).  The Executiveunderstands that the Claims that he is hereby releasing include, but are notlimited to:

 

a.               Any and all Claims that in any way arise fromor relate to the Executive’s employment with 3Com or the termination of thatemployment, such as claims for compensation, bonuses, commissions, benefits,reimbursements, lost wages, or unused accrued PTO;

 

b.              Any and all Claims that in any way arise fromor relate to the design or administration of any employee benefit program;

 

c.               Any and all Claims that arise from or relateto any severance or similar benefits or to post-employment health or groupinsurance benefits not expressly set forth in Section 3 above, includingwithout limitation any and all Claims to benefits or compensation under theExecutive’s Management Retention Agreement, as amended, and the Company’sSection 16 Officer Severance Plan;

 

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d.              Any and all Claims based on a contract, anyemployment or wrongful discharge claims or tort claims, and any and all Claimsbased on a federal, state or local law, regulation or ordinance, including, butnot limited to, Title VII of the Civil Rights Act of 1964, the Americans withDisabilities Act, the Employee Retirement Income Security Act, the WorkerAdjustment Retraining and Notification Act, the Fair Labor Standards Act,Massachusetts General Laws ch. 151B, all as may have been amended, and anyother federal, state, or local common law, statute, regulation, or ordinance ofany other type or kind.

 

The Executive understandsthat he is hereby releasing Claims that he may not know about.  Notwithstanding anything to the contrarycontained in this Agreement, the Executive’s release of Claims under thisSection 4 does not constitute a waiver by the Executive of any rights orbenefits that he may have pursuant to (i) this Agreement, (ii) the Company’s401(k) Plan, and (iii) to any right of indemnification or contribution againstthe Company under applicable insurance policies, statutory law or Companyby-laws, if any, to the same extent available to any other officer of theCompany for any third-party claim against him arising from his employment as anofficer of the Company.

 

6.                                       Rights under the Age Discrimination inEmployment Act.  The Executive acknowledges that he has beenadvised by this Agreement that (a) he should consult with an attorney of hischoosing prior to executing this Agreement or the Addenda attached hereto; (b)he has been given twenty-one calendar (21) days within which to consider andexecute this Agreement and to the extent that he signs this Agreement prior tothe completion of that period he has waived the remainder of that period; (c)that he has seven (7) calendar days following the execution of this Agreementto revoke his signature; and (iv) the Effective Date of this Agreement shall bethe eighth (8th) calendar day following his execution of thisAgreement.

 

7.                                       No Assignment of Claims.  TheExecutive expressly warrants that he has not assigned any Claim or Claims thathe has, had or may have had against any of the Released Parties to any otherperson or entity.

 

8.                                       Tax Consequences.  TheCompany makes no representations or warranties with respect to the taxconsequences of the provision of the executive severance benefits set forth inSection 3 above.  The Executiveunderstands and agrees that the Company will apply the applicable,supplemental, state and federal tax rates to the severance payments madepursuant to Sections 3(a) and 3(b) above. The Executive further understands and agrees that he is solelyresponsible for the payment, if applicable, of any other local, state, orfederal taxes or withholdings based on the provision of the executive severancebenefits by the Company and any penalties or assessments thereon and theExecutive hereby agrees to indemnify the Company for any such taxes orwithholdings, and any penalties, costs and/or attorneys’ fees arisingtherefrom.

 

9.                                       Employment Agreement Restrictions.  TheExecutive agrees that his obligations and the Company’s rights and remedies underthe Employment Agreement signed by the Executive, the terms and conditions ofwhich are expressly incorporated into this Agreement, shall remain in fullforce and effect upon his execution of this Agreement and the SupplementalRelease Agreement, and after the Termination Date.  The Executive hereby warrants and represents that he is incompliance with and has not violated the Employment Agreement.

 

10.                                 Cooperation.  TheExecutive hereby agrees to cooperate with the Company and its legal counsel(internal and external) as the Company may reasonably request at any time inconnection with any investigation or litigation relating to any matter in whichthe Executive was involved during, or has material knowledge of as a result of,his employment with the Company; provided, however, that the Company willattempt to reasonably accommodate the Executive’s schedule and othercommitments.

 

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11.                                 Confidentiality.  TheExecutive understands and agrees that this Agreement and each and everyprovision contained herein, including without limitation the existence of thisAgreement and executive severance benefits, is confidential and shall not bedisclosed to any person or entity, for any reason, without the prior writtenconsent of the Company, unless required by law.  It is agreed, however, that the Executive may reveal the contentsof this Agreement to members of his immediate family, and to his legal andfinancial advisors, subject to his securing their agreement to maintain theconfidentiality of such information.  Ifthe Executive is required by a government entity, a lawfully issued subpoenaand/or otherwise required by law to disclose the existence or terms of thisAgreement, the Executive agrees to notify the Company in writing no fewer thanten (10) calendar days prior to the date of such disclosure.

 

12.                                 Return of Company Property.  TheExecutive hereby agrees that he will return to 3Com all Company property andequipment in his possession or control, including but not limited to all files,documents, data and records (whether on paper or in tapes, disks, or othermachine-readable form), office equipment, credit cards, and employeeidentification cards.  He furtherwarrants and confirms that he will leave intact all electronic Companydocuments, including those that he developed or helped develop during hisemployment.

 

13.                                 Entire Agreement.  ThisAgreement and the Employee Agreement attached hereto as Addendum I contain allthe agreements and promises by and between 3Com and the Executive and supersedeany prior agreements or representations between them as to the subjectscovered, including, without limitation, the Executive’s offer letter,Management Retention Agreement (as amended) the letter agreement regardingreimbursement of business commuting expenses (as amended) and any agreementsarising under or relating to the Company’s equity compensation and welfarebenefit plans.  The Parties agree thatno covenants, agreements, representations, or warranties of any kind whatsoeverhave been made by either Party, except as specifically set forth in thisAgreement and the Employee Agreement. Should any portion, term, or provision of this Agreement or the EmployeeAgreement be declared or determined by any court or other tribunal to beillegal, invalid or unenforceable, the validity of the remaining portions,terms and provisions shall not be affected thereby, and the illegal, invalid orunenforceable portion, term or provision shall be deemed not to be part of thisAgreement or the Employee Agreement, as applicable.  This Agreement is binding upon and will inure to the benefit ofthe Executive and 3Com and their heirs, administrators, representatives,executors, successors, and assigns.

 

14.                                 Voluntary Agreement.  TheExecutive warrants that he has carefully read and understands the provisions ofthis Agreement; that he has had sufficient time to consider the Agreementbefore signing it; that he is entering into this Agreement knowingly andvoluntarily, intending that it will have binding legal effect; and that he hasbeen advised by 3Com to consult with an attorney of his own choice and at hisown expense concerning the terms of this Agreement prior to signing it.

 

15.                                 Waiver.  Any waiver by either Party ofany violation, breach of or default under any provision of this Agreement orany other agreements provided for or incorporated herein, by the other Partyshall not construed as, or constitute, a continuing waiver of such provision,or waiver of any other violation of, breach of or default under any otherprovision of this Agreement or any other agreements provided for orincorporated herein.

 

16.                                 Costs.  The Parties shall each beartheir own costs, attorneys’ fees and other expenses incurred in connection withthis Agreement. 

 

17.                                 Governing Law and Venue.  ThisAgreement shall be governed by the laws of the Commonwealth of Massachusetts,excluding its laws relating to the choice of laws.  The Parties hereby agree and consent to the jurisdiction of thestate and federal courts of the Commonwealth of Massachusetts as the exclusivejurisdiction for settling any disputes arising hereunder.

 

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18.                                 Amendments.  This Agreement may not bemodified, amended, supplemented or superseded unless by means of a writtendocument signed by the Executive and the Company’s Chief Executive Officer orGeneral Counsel.

 

19.                                 Counterparts.  ThisAgreement may be executed in counterparts, and each counterpart shall have thesame force and effect as an original and, taken together, shall constitute aneffective, binding agreement by the Parties.

 

WHEREFORE, the Parties haveread this Agreement, have carefully considered its provisions, have had anopportunity to discuss it with their attorneys, and attest that they are fullycompetent to execute this Agreement and that they fully understand andknowingly accept its terms and conditions in their entirety and withoutreservation.

 

 
| /s/  Mark Slaven   |   | /s/  Bruce L. Claflin                  |   |   |
|--------------------|--------|----------------------------------------|--------|--------|
| Mark Slaven        |   | 3Com Corporation                       |   |
|               |   |                                   |   |
| July 21, 2004 |   | Bruce L. Claflin                       |   |
| Date               |   | Name                                   |   |
|               |   |                                   |   |
|               |   | President and Chief  Executive Officer |   |
|               |   | Title                                  |   |
|               |   |                                   |   |
|               |   | July 21, 2004                     |   |
|               |   | Date                                   |   |

 

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**ADDENDUM II**

 

**SUPPLEMENTAL RELEASE AGREEMENT**

 

WHEREAS, 3Com Corporation(“3Com” or the “Company”) and Mark Slaven (the “Executive”) have mutuallyagreed that the Executive’s employment with 3Com has terminated effective                        (“Termination Date”);

 

WHEREAS, the Executive iseligible to receive certain severance benefits as a result of his separationfrom employment with the Company;

 

WHEREAS, the Executiveagrees to release the Company from any and all claims arising from or relatingto his employment with 3Com and the termination thereof;

 

NOW, THEREFORE, inconsideration of the mutual promises contained in this Agreement, the receiptand sufficiency of which is hereby acknowledged, the Parties hereby agree asfollows:

 

1.                                       Termination of Employment.  TheExecutive’s understands and agrees that his employment with the Companyterminated as of the Termination Date and that he has no further duties,responsibilities, powers, or authority with respect to the Company, itsbusiness or financial operations.

 

2.                                       Payment of Salary, Wages and Benefits.  TheExecutive acknowledges and agrees that the Company has paid all salary, wages,bonuses, accrued vacation and PTO, business expense reimbursements, and any andall other compensation and benefits due to him by Company as a result of hisemployment with the Company.

 

3.                                       Executive Severance Benefits.  Uponthe Executive’s execution and non-revocation of this Supplemental ReleaseAgreement, the Company shall provide the Executive with the executive severancebenefits set forth in Section 3 of the Severance Agreement and GeneralRelease signed by the Executive on                        .

 

4.                                       Release of Claims.  Inexchange for the executive severance benefits set forth in Section 3 ofthe Severance Agreement and General Release, the Executive hereby irrevocablyand unconditionally releases 3Com and its parents, subsidiaries, predecessors,successors, affiliates and joint ventures, and all of their directors,officers, employees, representatives, attorneys, agents, insurers, assigns,employee benefit programs (and the trustees, administrators, fiduciaries, andinsurers of such programs), and any other persons acting by, through, under, orin concert with any of the persons or entities identified above (the “ReleasedParties”) from all known and unknown claims, promises, debts, obligations,causes of action, or similar rights of any type, in law or in equity, that theExecutive has, had or may have had arising from or relating to his employmentwith 3Com and the termination thereof (“Claims”).  The Executive understands that the Claims that he is herebyreleasing include, but are not limited to:

 

a.               Any and all Claims that in any way arise fromor relate to the Executive’s employment with 3Com or the termination of thatemployment, such as claims for compensation, bonuses, commissions, benefits,reimbursements, lost wages, or unused accrued PTO;

 

b.              Any and all Claims that in any way arise fromor relate to the design or administration of any employee benefit program;

 

c.               Any and all Claims that arise from or relateto any severance or similar benefits or to post-employment health or groupinsurance benefits not expressly set forth in Section 3 of the SeveranceAgreement and General Release, including without limitation any and 

 

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all Claims to benefits orcompensation under the Executive’s Management Retention Agreement, as amended,and the Company’s Section 16 Officer Severance Plan;

 

d.              Any and all Claims based on a contract, anyemployment or wrongful discharge claims or tort claims, and any and all Claimsbased on a federal, state or local law, regulation or ordinance, including, butnot limited to, Title VII of the Civil Rights Act of 1964, the Americans withDisabilities Act, the Employee Retirement Income Security Act, the WorkerAdjustment Retraining and Notification Act, the Fair Labor Standards Act,Massachusetts General Laws ch. 151B, all as may have been amended, and anyother federal, state, or local common law, statute, regulation, or ordinance ofany other type or kind.

 

The Executive understandsthat he is hereby releasing Claims that he may not know about.  Notwithstanding anything to the contrarycontained in this Agreement, the Executive’s release of Claims under thisSection 4 does not constitute a waiver by the Executive of any rights orbenefits that he may have pursuant to (i) this Agreement, (ii) the Company’s401(k) Plan, and (iii) any right of indemnification or contribution against theCompany under applicable insurance policies, statutory law or Company by-laws,if any, to the same extent available to any other officer of the Company forany third-party claim against him arising from his employment as an officer ofthe Company.

 

5.                                       Covenant Not to Sue.  TheExecutive expressly warrants and agrees that he has not as of the date of thisSupplemental Release Agreement filed or maintained and will not in the futurefile or maintain any lawsuit, claim or action of any kind whatsoever againstthe Released Parties nor will he cause or knowingly permit any such lawsuit,claim or action to be filed or maintained on his behalf in any federal, stateor municipal court, administrative agency or other tribunal relating to anyClaim(s) released pursuant to Section 4 of this Agreement.  In the event that the Executive brings anyaction in contravention of this covenant not to sue, he understands and agreesthat he shall be required to repay 3Com the consideration described inSection 3(a) of the Severance Agreement and General Release, regardless ofthe outcome of the legal action.

 

6.                                       Return of Company Property.  TheExecutive hereby warrants and confirms that he has returned to 3Com all Companyproperty and equipment in his possession or control, including but not limitedto all files, documents, data and records (whether on paper or in tapes, disks,or other machine-readable form), office equipment, credit cards, and employeeidentification cards.  He furtherwarrants and confirms that he has left intact all electronic Company documents,including those that he developed or helped develop during his employment.  To the extent that the Executive hadelectronic Company documents in his possession or control through a personalcomputer, he further warrants and certifies that he has permanently destroyedall such files.

 

WHEREFORE, the Executive hasread this Supplemental Release Agreement, has carefully considered itsprovisions, have had an opportunity to discuss it with an attorney, and atteststhat he is fully competent to execute this Supplemental Release Agreement andthat he fully understands and knowingly accepts its terms and conditions intheir entirety and without reservation.

 

Dated as of this                day of                         2005.

 

 
|        |   |
|-------------|--------|
| Mark Slaven |   |

 

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