Exhibit 10.1


 


SEVERANCE
AGREEMENT AND GENERAL RELEASE


 


This Severance Agreement and General Release
(including all Addenda hereto, the “Agreement”) is entered into by and between
3Com Corporation, a Delaware corporation (“3Com” or the “Company”) and Dennis
Connors (the “Executive”).  3Com and the
Executive shall each individually be referred to herein as a “Party” and
together as the “Parties.”


 


WHEREAS, the Executive has been employed with
the Company as its Executive Vice President – Worldwide Operations (“EVP”).


 


WHEREAS, the Parties have mutually agreed
that the Executive will step down as EVP and will continue employment with the
Company for a certain period in a non-executive capacity in order to render
services on various matters of importance to 3Com;


 


WHEREAS, the Parties have mutually agreed
that the Executive’s employment with the Company will terminate no later than
December 31, 2004 in a manner that is amicable and satisfactory to both
Parties;


 


WHEREAS, the Executive may be eligible to
receive certain severance benefits as a result of his separation from
employment with the Company under the terms and conditions of his Management
Retention Agreement, effective July 15, 2003;


 


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


 


NOW, THEREFORE, in consideration of the
mutual promises contained in this Agreement, the receipt and sufficiency of
which is hereby acknowledged, the Parties hereby agree as follows:


 


1.             Transition of Employment Status.  The
Executive hereby agrees that his position as EVP will terminate effective as of
October 16, 2004 (“Transition Date”). 
The Executive agrees that he will use his best efforts to fulfill his
duties and responsibilities as EVP until the Transition Date.  During the period between the Transition Date
and the Termination Date, the Executive will continue employment with 3Com in a
non-executive capacity, the title and duties of which will be determined by the
Company’s Chief Executive Officer. 
Effective as of the first regularly scheduled pay period following the
Transition Date, the Executive shall receive a base salary of Four Thousand Six
Hundred Eighty-Seven Dollars and Fifty Cents ($4,687.50) per semi-monthly pay
period ($112,500.00 annualized), less all applicable taxes and withholdings,
commensurate with the 75% reduction in hours that the Executive will be
expected to work after the Transition Date in his non-executive capacity.  The Company’s payment and/or reimbursement of
the Executive’s extended business commuting expenses 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, reasonable business and travel expenses incurred
after the Transition Date in the course of the Executive’s non-executive
duties.  The Executive shall not accrue
any Personal Time Off (PTO) after the Transition Date.  However, the Executive shall continue to have
the right to participate in the Company’s non-executive benefits plans to the
same extent and at the same levels that he is participating as of the
Transition Date.  The Executive will not
be eligible to receive any bonus payment pursuant to the Company’s 3Bonus
program for his work during the Company’s FY 2005.


 


2.             Termination of Employment.  The
Executive agrees that his employment with the Company shall terminate effective
December 31, 2004 unless the Executive elects to terminate his employment earlier
than that date by providing at least fourteen (14) days’ advance written notice
to the Company’s Chief Executive Officer. 
Upon the termination of the Executive’s employment, the


 
















 


Executive will receive payment for all accrued, unused PTO at his rate
of pay immediately preceding the Transition Date.  The Executive’s last day of employment with
the Company shall be referred to herein as the “Termination Date”.


 


3.             Executive Severance Benefits.  In
consideration for and contingent upon his execution and non-revocation of this
Agreement, and the Supplemental Release Agreement attached hereto as Addendum I
(which shall be executed no earlier than the Termination Date), the Company
agrees to provide the Executive with the following benefits:


 


a.             Severance Payment. 
Within thirty (30) days following 3Com’s receipt of the Executive’s
executed copy of the Supplemental Release Agreement attached hereto as Addendum
I (which shall be executed no earlier than the Termination Date) but in no
event earlier than the Company’s first scheduled payroll date in 2005 (on
January 14, 2005), the Company shall make a lump sum severance payment to the
Executive in the amount of Seven Hundred Eighty-Seven Thousand Five Hundred
Dollars ($787,500.00), less all applicable taxes and withholdings, payable via
direct deposit through the Company’s regular payroll practices.  This lump sum payment will not be subject to
deductions for 401(k) contributions, health and welfare benefit premiums, or
Employee Stock Purchase Plan contributions. 
The gross amount of the severance payment shall include the Executive’s
annual base salary of Four Hundred Fifty Thousand Dollars ($450,000.00) and the
Executive’s full annual target bonus of Three Hundred Thirty-Seven Thousand
Five Hundred Dollars ($337,500.00) (“Annual Target Bonus”).


 


b.             Pro-Rated Bonus Payment. 
Within thirty (30) days following 3Com’s receipt of the Executive’s
executed copy of the Supplemental Release Agreement attached hereto as Addendum
I (which shall be executed no earlier than the Termination Date) but in no
event earlier than the Company’s first scheduled payroll date in 2005 (on
January 14, 2005), the Company shall make a lump sum severance payment to the
Executive in the amount of Two Hundred and Thirty-Five Thousand Dollars
($235,000.00).  The payment under this
Section 3(b) shall constitute and shall be in complete fulfillment of the
pro-rated bonus payment provided for in Section 3(a)(iii) of the Executive’s
Management Retention Agreement and shall be payable via direct deposit through
the Company’s regular payroll practices.


 


c.             Benefits Continuation.  The
Company shall provide Company-paid health, dental, vision, long-term disability
and life insurance coverage at the same level of coverage as was provided to
the Executive immediately prior to the Termination Date and at the same ratio
of Company premium payment to Executive premium payment as was in effect
immediately prior to the Termination Date (the “Company-Paid Coverage”).  If such coverage included the Executive’s
dependents immediately prior to the Termination Date, such dependents shall
also be covered at Company expense. 
Company-Paid Coverage shall continue until the earlier of (i) two years
from the Termination Date, or (ii) the date upon which the Executive and his
dependents become covered under another employer’s group health, dental,
vision, long-term disability or life insurance plans that provide the Executive
and his dependents with comparable benefits and levels of coverage.  For purposes of Title X of the Consolidated
Budget Reconciliation Act of 1985 (“COBRA”), the date of the “qualifying event”
for the Executive and his dependents shall be the Termination Date, and each
month of Company-Paid Coverage provided hereunder shall offset a month of continuation
coverage otherwise due under COBRA.  Any
such continuation of Company-Paid Coverage shall be governed by COBRA and the
terms and conditions of the applicable plan documents.


 


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d.             Accelerated Vesting and Extended Exercise of
Equity Compensation.  Effective as of the Termination Date, one
hundred percent (100%) of the Executive’s unvested stock options, restricted
stock and other Company-issued equity compensation shall be fully and
completely vested.  In addition, the
exercise period for the Executive’s vested stock options shall be extended to
the earlier of:  (1) the one year
anniversary of the Executive’s Termination Date; or (2) the original term of
the option grant.  Except as provided in
this Section 3(d), the Executive’s stock options, restricted stock and other
Company-issued equity compensation shall be governed by the terms and
conditions of the applicable plan documents and the Executive’s agreements
relating thereto.  The Executive understands
and agrees that he is required to make arrangements reasonably satisfactory to
the Company to facilitate the Company’s compliance with all federal and state
tax and withholding requirements as a condition to exercising his vested stock
options, and receiving his restricted stock and/or other Company-issued equity
compensation.


 


4.             Payment for Golden Parachute Excise Taxes.  In
the event that any severance benefits provided to the Executive pursuant to
Section 3 above (a) constitute “parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), (b)
are subject to any excise tax imposed under Section 4999 of the Code, and (c)
the aggregate value of such parachute payments, as determined in accordance
with Section 280G of the Code and the applicable regulations issued by the U.S.
Department of the Treasury, is equal to or greater than the product obtained by
multiplying 3.59 by the Executive’s “base amount” as defined by Section
280G(b)(3) of the Code, then the Executive shall receive: (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 and the federal and state
income and employment taxes arising from the payment made by the Company
pursuant to subsection (i) above.


 


5.             Release of Claims.   In
exchange for the executive severance benefits set forth in Section 3 above, the
Executive hereby irrevocably and 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, and insurers of such programs), and any other persons acting by,
through, under, or in concert with any of the persons or entities identified
above (the “Released Parties”) from all known and unknown claims, promises,
debts, obligations, causes of action, or similar rights of any type, in law or
in equity, that the Executive has, had or may have had arising from or relating
to his employment with 3Com and the termination thereof (“Claims”).  The Executive understands that the Claims that
he is hereby releasing include, but are not limited to:


 


a.     Any and all Claims that in any way arise from or relate to the
Executive’s employment with 3Com or the termination of that employment, 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 from or relate to the design
or administration of any employee benefit program;


 


c.     Any and all Claims that arise from or relate to any severance or
similar benefits or to post-employment health or group insurance benefits not
expressly set forth in Section 3 above, including without limitation any and
all Claims to benefits or compensation under the Executive’s Management
Retention Agreement, as amended, and the Company’s Section 16 Officer Severance
Plan;


 


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d.     Any and all Claims based on a contract, any employment or wrongful
discharge claims or tort claims, and any and all Claims based on a federal,
state or local law, regulation or ordinance, including, but not limited to,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Employee Retirement Income Security Act, the Worker Adjustment Retraining
and Notification Act, the Fair Labor Standards Act, Massachusetts General Laws
ch. 151B, all as may have been amended, and any other federal, state, or local
common law, statute, regulation, or ordinance of any other type or kind.


 


The
Executive understands that he is hereby releasing Claims that he may not know
about.  Notwithstanding anything to the
contrary contained in this Agreement, the Executive’s release of Claims under
this Section 5 does not constitute a waiver by the Executive of any rights or
benefits that he may have pursuant to (i) this Agreement, (ii) the Company’s
401(k) Plan, and (iii) to any right of
indemnification or contribution against the Company under applicable insurance
policies, statutory law or Company by-laws, if any, to the same extent
available to any other officer of the Company for any third-party claim against
him arising from his employment as an officer of the Company.


 


6.             Rights under the Age Discrimination in
Employment Act.  The Executive acknowledges that he has been
advised by this Agreement that (a) he should consult with an attorney of his
choosing prior to executing this Agreement or the Addenda attached hereto; (b)
he has been given twenty-one calendar (21) days within which to consider and
execute this Agreement and to the extent that he signs this Agreement prior to
the 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 Agreement
to revoke his signature; and (iv) the Effective Date of this Agreement shall be
the eighth (8th) calendar day following his execution of this
Agreement.


 


7.             No Assignment of Claims.  The
Executive expressly warrants that he has not assigned any Claim or Claims that
he has, had or may have had against any of the Released Parties to any other
person or entity.


 


8.             Tax Consequences.  The
Company makes no representations or warranties with respect to the tax
consequences of the provision of the executive severance benefits set forth in
Section 3 above.  The Executive
understands and agrees that the Company will apply the applicable,
supplemental, state and federal tax rates to the severance payments made
pursuant to Sections 3(a) and 3(b) above. 
The Executive further understands and agrees that he is solely
responsible for the payment, if applicable, of any other local, state, or
federal taxes or withholdings based on the provision of the executive severance
benefits by the Company and any penalties or assessments thereon and the
Executive hereby agrees to indemnify the Company for any such taxes or
withholdings, and any penalties, costs and/or attorneys’ fees arising
therefrom.


 


9.             Employment Agreement Restrictions.  The
Executive agrees that his obligations and the Company’s rights and remedies
under the Conflicts, Confidential Information and Assignment of Inventions Agreement
signed by the Executive, the terms and conditions of which are expressly
incorporated into this Agreement, shall remain in full force and effect upon
his execution of this Agreement and the Supplemental Release Agreement, and
after the Termination Date.  The
Executive hereby warrants and represents that he is in compliance with and has
not violated the Conflicts, Confidential Information and Assignment of
Inventions Agreement.


 


10.           Cooperation.  The
Executive hereby agrees to cooperate with the Company and its legal counsel
(internal and external) as the Company may reasonably request at any time in
connection with any investigation or litigation relating to any matter in which
the Executive was involved during,


 


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or has material knowledge of
as a result of, his employment with the Company; provided, however, that the
Company will attempt to reasonably accommodate the Executive’s schedule and
other commitments.


 


11.           Confidentiality.  The
Executive understands and agrees that this Agreement and each and every
provision contained herein, including without limitation the existence of this
Agreement and executive severance benefits, is confidential and shall not be
disclosed to any person or entity, for any reason, without the prior written
consent of the Company, unless required by law. 
It is agreed, however, that the Executive may discuss the existence and
contents of this Agreement to the extent that such information was a matter of
public record prior to such disclosure. 
The Executive may reveal any of the contents of this Agreement to
members of his immediate family, and to his legal and financial advisors,
subject to his securing their agreement to maintain the confidentiality of such
information.  If the Executive is
required by a government entity, a lawfully issued subpoena and/or otherwise
required by law to disclose the existence or terms of this Agreement, the
Executive agrees to notify the Company in writing no fewer than ten (10)
calendar days prior to the date of such disclosure.


 


12.           Return of Company Property.  The
Executive hereby agrees that he will return to 3Com all Company property and
equipment in his possession or control, including but not limited to all files,
documents, data and records (whether on paper or in tapes, disks, or other
machine-readable form), office equipment, credit cards, and employee
identification cards.  He further
warrants and confirms that he will leave intact all electronic Company
documents, including those that he developed or helped develop during his
employment.


 


13.           Entire Agreement.  This
Agreement and the Conflicts, Confidential Information and Assignment of
Inventions Agreement contain all the agreements and promises by and between
3Com and the Executive and supersede any prior agreements or representations
between them as to the subjects covered, including, without limitation, the
Executive’s offer letter, Management Retention Agreement (as amended), the
letter agreement regarding reimbursement of business commuting expenses (as
amended), except that any agreements between the Executive and 3Com arising
under or relating to the Company’s equity compensation and welfare benefit
plans remain in full force and effect. 
The Parties agree that no covenants, agreements, representations, or
warranties of any kind whatsoever have been made by either Party, except as
specifically set forth in this Agreement and the Conflicts, Confidential
Information and Assignment of Inventions Agreement.  Should any portion, term, or provision of
this Agreement or the Conflicts, Confidential Information and Assignment of
Inventions Agreement be declared or determined by any court or other tribunal
to be illegal, invalid or unenforceable, the validity of the remaining
portions, terms and provisions shall not be affected thereby, and the illegal,
invalid or unenforceable portion, term or provision shall be deemed not to be
part of this Agreement or the Conflicts, Confidential Information and
Assignment of Inventions Agreement, as applicable.  This Agreement is binding upon and will inure
to the benefit of the Executive and 3Com and their heirs, administrators,
representatives, executors, successors, and assigns.


 


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


 


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


 


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violation of, breach of or
default under any other provision of this Agreement or any other agreements
provided for or incorporated herein.


 


16.           Costs.  The Parties shall each bear
their own costs, attorneys’ fees and other expenses incurred in connection with
this Agreement. 


 


17.           Governing Law and Venue.  This
Agreement 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 the state and federal courts of the Commonwealth of
Massachusetts as the exclusive jurisdiction for settling any disputes arising
hereunder.


 


18.           Amendments.  This Agreement may not be
modified, amended, supplemented or superseded unless by means of a written document
signed by the Executive and the Company’s Chief Executive Officer or General
Counsel.


 


19.           Counterparts.  This
Agreement may be executed in counterparts, and each counterpart shall have the
same force and effect as an original and, taken together, shall constitute an
effective, binding agreement by the Parties.


 


WHEREFORE, the Parties have read this
Agreement, have carefully considered its provisions, have had an opportunity to
discuss it with their attorneys, and attest that they are fully competent to
execute this Agreement and that they fully understand and knowingly accept its
terms and conditions in their entirety and without reservation.


 


Dated as of this 16th day of September, 2004.


 


 


	
  /s/ Dennis Connors

  	
   

  	
  /s/ Susan H. Bowman

  	
   

  
	
  Dennis Connors

  	
  3Com Corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Susan H. Bowman

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Senior Vice President,
  Human Resources

  	
   

  
	
   

  	
  Title

  	
   

  



 


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ADDENDUM I


 


SUPPLEMENTAL
RELEASE AGREEMENT


 


WHEREAS, 3Com Corporation (“3Com” or the
“Company”) and Dennis Connors (the “Executive”) have mutually agreed that the
Executive’s employment with 3Com has terminated effective
                    
(“Termination Date”);


 


WHEREAS, the Executive is eligible to receive
certain severance benefits as a result of his separation from employment with
the Company;


 


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


 


NOW, THEREFORE, in consideration of the
mutual promises contained in this Agreement, the receipt and sufficiency of
which is hereby acknowledged, the Parties hereby agree as follows:


 


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


 


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


 


3.             Executive Severance Benefits.  Upon
the Executive’s execution and non-revocation of this Supplemental Release
Agreement, the Company shall provide the Executive with the executive severance
benefits set forth in Section 3 of the Severance Agreement and General Release
signed by the Executive on
                        .


 


4.             Release of Claims.  In
exchange for the executive severance benefits set forth in Section 3 of the
Severance Agreement and General Release, the Executive hereby irrevocably and
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, and
insurers of such programs), and any other persons acting by, through, under, or
in concert with any of the persons or entities identified above (the “Released
Parties”) from all known and unknown claims, promises, debts, obligations,
causes of action, or similar rights of any type, in law or in equity, that the
Executive has, had or may have had arising from or relating to his employment
with 3Com and the termination thereof (“Claims”).  The Executive understands that the Claims
that he is hereby releasing include, but are not limited to:


 


a.     Any and all Claims that in any way arise from or relate to the
Executive’s employment with 3Com or the termination of that employment, 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 from or relate to the design
or administration of any employee benefit program;


 


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c.     Any and all Claims that arise from or relate to any severance or
similar benefits or to post-employment health or group insurance benefits not
expressly set forth in Section 3 of the Severance Agreement and General
Release, including without limitation any and all Claims to benefits or compensation
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, any employment or wrongful
discharge claims or tort claims, and any and all Claims based on a federal,
state or local law, regulation or ordinance, including, but not limited to,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Employee Retirement Income Security Act, the Worker Adjustment Retraining
and Notification Act, the Fair Labor Standards Act, Massachusetts General Laws
ch. 151B, all as may have been amended, and any other federal, state, or local
common law, statute, regulation, or ordinance of any other type or kind.


 


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


 


5.             Covenant Not to Sue.  The
Executive expressly warrants and agrees that he has not as of the date of this
Supplemental Release Agreement filed or maintained and will not in the future
file or maintain any lawsuit, claim or action of any kind whatsoever against
the 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, state
or municipal court, administrative agency or other tribunal relating to any
Claim(s) released pursuant to Section 4 of this Agreement.  In the event that the Executive brings any
action in contravention of this covenant not to sue, he understands and agrees
that he shall be required to repay 3Com the consideration described in Section
3(a) of the Severance Agreement and General Release, regardless of the outcome
of the legal action.


 


6.             Return of Company Property.  The
Executive hereby warrants and confirms that he has returned to 3Com all Company
property and equipment in his possession or control, including but not limited
to all files, documents, data and records (whether on paper or in tapes, disks,
or other machine-readable form), office equipment, credit cards, and employee
identification cards.  He further
warrants 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 had
electronic Company documents in his possession or control through a personal
computer, he further warrants and certifies that he has permanently destroyed
all such files.


 


WHEREFORE, the Executive has read this Supplemental
Release Agreement, has carefully considered its provisions, have had an
opportunity to discuss it with an attorney, and attests that he is fully
competent to execute this Supplemental Release Agreement and that he fully
understands and knowingly accepts its terms and conditions in their entirety
and without reservation.


 


	
  Dated as of this
               
  day of
                              
  ,
                 .

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Dennis Connors

  



 


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