UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement
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3COM CORPORATION

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350 Campus Drive
Marlborough, Massachusetts 01752-3064

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Dear Stockholder:

     We cordially invite you to attend our Annual Meeting of Stockholders, which will be held on Wednesday, September 26, 2007 at 8:00 a.m. local time at the Company’s headquarters, 350 Campus Drive, Marlborough, Massachusetts. The purpose of the meeting is to:

     1. Elect three Class I directors, each to hold office for a two-year term;

     2. Ratify the appointment of Deloitte & Touche LLP as our registered independent public accounting firm for the fiscal year ending May 30, 2008; and

     3. Transact such other business as may properly come before the meeting and any adjournments thereof.

     You are entitled to vote your 3Com common stock if our records showed that you held your shares as of the close of business on August 3, 2007. For ten days before the meeting, you can examine a complete list of the stockholders entitled to vote at the meeting for any purpose germane to the meeting during regular business hours at our offices at 350 Campus Drive, Marlborough, Massachusetts.

		By Order of the Board of Directors,
		/s/ Neal D. Goldman   Neal D. Goldman
		Secretary
		August 17, 2007 Marlborough, Massachusetts

PROXY STATEMENT

     Your vote is very important. For this reason, our Board of Directors is requesting that you allow your common stock to be represented at the annual meeting by the proxies named on the enclosed proxy card. This solicitation is being made, and this proxy statement and form of proxy are being sent to you, in connection with the Board’s request. These materials have been prepared for the Board by our management.

     The annual meeting of stockholders will be held on Wednesday, September 26, 2007 at 8:00 a.m. local time at the Company’s headquarters, 350 Campus Drive, Marlborough, Massachusetts. Our principal executive offices are located at 350 Campus Drive, Marlborough, Massachusetts 01752 and our telephone number is (508) 323-1000. This proxy statement and form of proxy are first being sent to our stockholders on or about August 17, 2007.

GENERAL INFORMATION

     Our Financial Information. Our financial statements and related information are included in our Annual Report on Form 10-K, which is enclosed with this proxy statement.

     Who Can Vote. You are entitled to vote your 3Com common stock if our records showed that you held your shares as of the close of business on August 3, 2007. We refer to this date as the “Record Date.” At the close of business on the Record Date, a total of 399,528,738 shares of common stock were issued and outstanding. You may vote in person or by proxy. Each share of 3Com common stock has one vote. There is no cumulative voting in the election of our directors.

     Cost of this Proxy Solicitation. We will pay the cost of soliciting proxies. In addition to soliciting stockholders by mail and through our regular employees, we will request banks, brokers and other nominees to solicit their customers who hold our stock in street name and will reimburse them for their reasonable, out-of-pocket costs. We may also ask our officers, directors and others to solicit proxies, personally or by telephone, facsimile or electronic mail. None of these individuals will receive any additional or special compensation for soliciting proxies. We may retain a proxy solicitation firm to assist in the solicitation of proxies. We will bear all reasonable solicitation fees and expenses if such a firm is retained.

     Voting Your Proxy. If you hold your common stock in street name through a bank, broker or other nominee, you will receive instructions from your bank, broker or other nominee that you must follow to vote your shares. If you hold your shares in your own name as a holder of record, you may vote by signing, dating and mailing the proxy card in the postage-paid envelope that we have provided to you with this proxy statement. The proxies will vote your shares as you instruct. Of course, you can always attend the meeting and vote your shares in person. If you sign and return a proxy card without specific voting instructions, your shares will be voted as recommended by our Board.

     Revoking Your Proxy. To revoke your proxy if you are a holder of record, you must advise our Secretary in writing before the meeting, deliver a validly executed proxy with a later date that we receive prior to the meeting, or attend the meeting and vote your shares in person. You may revoke your proxy at any time before your shares are voted.

     Quorum. The annual meeting will be held if a majority of the outstanding common stock entitled to vote is represented at the meeting. Shares that are voted “FOR,” “AGAINST,” “ABSTAIN” or “WITHHELD” on a matter are treated as being present at the meeting for purposes of establishing a quorum and are also treated as shares entitled to vote on that matter at the annual meeting (the “Votes Cast”).

     Abstentions. Although the law in Delaware is unclear on the proper treatment of abstentions, we believe that abstentions should be counted for purposes of determining both (i) whether a quorum is present and (ii) the total number of Votes Cast with respect to a proposal (other than the election of directors). Without controlling precedent to the contrary, we intend to treat abstentions in this manner. Accordingly, abstentions will have no effect on the outcome of Proposal 1 and abstentions will have the effect of a vote against Proposal 2.

     Broker Non-Votes. We will count broker non-votes in determining the presence or absence of a quorum, but broker non-votes will not be counted for purposes of determining the number of Votes Cast on a particular proposal. Accordingly, broker non-votes will have no effect on the outcome of any of the proposals.

     Householding of Proxy Materials. In an effort to reduce printing costs and postage fees, we have adopted a practice approved by the Securities and Exchange Commission called “householding.” Under this practice, stockholders who have the same address and last name will receive only one copy of our proxy materials, unless one or more of these stockholders notifies us that he or she wishes to continue receiving individual copies. Stockholders who participate in householding will continue to receive separate proxy cards.

     If you share an address with another stockholder and received only one set of proxy materials and would like to request a separate copy of these materials, please (1) mail your request to 3Com, 350 Campus Drive, Marlborough, MA 01752-3064, Attn: Investor Relations, or (2) call our Investor Relations department at (508) 323-1198. Similarly, you may contact us if you received multiple copies of the proxy materials and would prefer to receive a single copy in the future.

PROPOSAL 1:

ELECTION OF DIRECTORS

     Our bylaws authorize the Board to fix the number of directors. The exact number of directors is currently fixed at eight. Our Board is divided into two classes, with the classes serving for staggered two-year terms. Class I currently has four members and Class II currently has four members. You may not vote for more than three (3) nominees at the annual meeting. Each of the three Class I directors to be elected at the 2007 annual meeting are to be elected to hold office until the 2009 annual meeting and until his successor has been duly elected and qualified or his earlier death, resignation or removal.

     Paul Yovovich, one of our current directors, has determined not to stand for re-election as a Class I director at the 2007 Annual Meeting, although he will finish out his term which expires at the 2007 Annual Meeting. Accordingly, immediately following our 2007 Annual Meeting and assuming the re-election of all nominees, our board size will decrease to seven, Class I will have three members and Class II will have four members.

     The Board’s nominees as Class I directors are Messrs. Mao, Masri and Trempont. If a nominee declines to serve or becomes unavailable for any reason, the proxies may be voted for such substitute nominee as the Board may designate. The Board believes that all nominees are willing and able to serve if elected.

VOTE REQUIRED

     Directors will be elected by a plurality of the votes cast at the meeting. This means that the three nominees receiving the highest number of votes will be elected as Class I directors. Votes withheld for any nominee will not be counted. Assuming a quorum is present, abstentions and broker non-votes will have no effect on the election of directors. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” MESSRS. MAO, MASRI AND TREMPONT.

NOMINEES AND OTHER DIRECTORS

     The following table sets forth the name, age, principal occupation during the past five years and the period of service as a director of 3Com Corporation (the “Company” or “3Com”) of each (1) nominee, (2) director whose term of office will continue after the annual meeting, and (3) director whose term of office will expire at the annual meeting (and will not continue). Each nominee currently serves as a director. There are no family relationships among any directors or executive officers.

Nominees for Election
Robert Y. L. Mao Director since 2007 Age 63		Mr. Mao was most recently our Executive Vice President, Corporate Development from August 2006 to March 2007. Mr. Mao has over 30 years of experience in the telecommunications and IT industries. Before joining 3Com, Mr. Mao was President and Chief Executive Officer of Greater China for Nortel Networks from September 1997 to May 2006 and Regional President of Greater China for Alcatel from September 1995 to September 1997. Nortel and Alcatel are global suppliers of communication equipment serving both service provider and enterprise customers. At these positions, Mr. Mao managed operations in the People’s Republic of China, Taiwan, Hong Kong and Macao. Mr. Mao also held senior managerial and technical positions at Alcatel and ITT in Asia and the U.S. Mr. Mao holds a Master’s degree from Cornell University in Material Science and Metallurgical Engineering and earned a Master’s in Management from MIT. Mr. Mao is the Vice Chairman of the Board of Governors of the Pacific Telecommunication Council. Mr. Mao serves on the Board of Hurray! Holding Co., Ltd., a wireless value-added services provider.
Edgar Masri Director since 2006 Age 49		Mr. Masri has been our President and Chief Executive Officer since August 2006. Mr. Masri is also Chairman and Chief Executive Officer of H3C Technologies Co., Limited, our China-based subsidiary. Before re-joining 3Com, Mr. Masri was a General Partner from 2000 to March 2006, and more recently an advisor, at Matrix Partners, a leading technology venture capital firm, where he made investments in the wireless, broadband and semiconductor industries. Mr. Masri was also Chief Operating Officer at Redline Communications, a leading provider of advanced broadband wireless access and backhaul solutions based in Canada, from April to August 2006. Mr. Masri spent fifteen years as a senior manager at 3Com, from 1985 to 2000. During this time he served as Senior Vice President and General Manager of our Network Systems Business Unit and Premises Distribution Unit, President of 3Com Ventures and held senior roles in our marketing group. Mr. Masri holds a Master’s degree in electrical engineering and computer science and earned an MBA from Stanford University.
Dominique Trempont Director since 2006 Age 53		Mr. Trempont is currently a member of the Board of Directors and Audit Committee of Finisar Corporation, a public company that develops and markets high speed data communication systems and software for networking and storage, a position he has held since September 2005. Since June 2006, Mr. Trempont has served on the Board of Directors of Cquay Technologies Corp., a private company that develops next generation search software. Mr. Trempont was CEO-in-Residence at Battery Ventures, a venture capital firm, from September 2003 to September 2005. Prior to Battery Ventures, Mr. Trempont was Chairman, President and Chief Executive Officer of Kanisa, Inc., a software company focused on customer self-service, contact center, and peer support applications, from May 1999 to November 2002. Mr. Trempont has served as Chief Executive Officer of Gemplus Corporation, a smart card application company, and Chief Financial Officer at NeXT Software. Mr. Trempont began his career at Raychem Corporation, a high-tech material

		science company focused on telecommunication, electronics, automotive and other industries, including holding the position of Chief Audit Officer. Mr. Trempont received an undergraduate degree in Economics from College Saint Louis (Belgium), a bachelor’s in Business Administration and Computer Sciences from IAG at the University of Louvain (Belgium) and a master’s in Business Administration from INSEAD.
Continuing Directors
Eric A. Benhamou Director since 1990 Age 51		Mr. Benhamou has been our Chairman of the Board since July 1994. Since June 2005, this position has been in a non-employee capacity. Mr. Benhamou served as Chief Executive Officer of Palm, Inc. from October 2001 to October 2003. Mr. Benhamou served as our Chief Executive Officer from September 1990 to January 2001 and President from April 1990 through August 1998. Mr. Benhamou is currently Chairman and Chief Executive Officer of Benhamou Global Ventures, LLC, an investment vehicle he formed in 2004. Mr. Benhamou is also Chairman of the Board of Palm, Inc. and Cypress Semiconductor Corporation, and a director of RealNetworks, Inc. and SVB Financial Group. Mr. Benhamou is also a member of the Computer Science and Technology Board and serves on the Executive Committee of Technet.
Gary T. DiCamillo Director since 2000 Age 56		Mr. DiCamillo has been the President and CEO of GW Premier America, Inc. (formerly known as American Crystal, Inc.), a group of privately-held technical, professional and commercial staffing companies, since September 2005. Prior to that, he was President and CEO of TAC Worldwide Companies, a large privately-held technical and professional staffing company, from 2002 to 2005. Prior to that, Mr. DiCamillo was Chairman and Chief Executive Officer of Polaroid Corporation, a position he held from 1995 through 2002. Prior to joining Polaroid, Mr. DiCamillo served as Group Vice President of the Black & Decker Corporation and President of its Worldwide Power Tools and Accessories business from 1993 to 1995. Mr. DiCamillo is a director of the Whirlpool Corporation.
James R. Long Director since 2000 Age 64		Mr. Long retired from his position as Executive Vice President of Nortel Networks, a global leader in telephony, data, wireless and wireline solutions for the Internet, in December 1999, a position he held since 1994. Mr. Long also served as President of Enterprise Solutions of Nortel Networks from 1997 through 1999, President of Nortel World Trade, based in London and Hong Kong, from 1994 through 1997, and Senior Vice President of Nortel’s Asia Pacific Division from 1992 to 1994. Mr. Long is a director of Cypress Semiconductor Corporation.
Raj Reddy Director since 2001 Age 70		Dr. Reddy is the Mozah Bint Nasser University Professor of Computer Science and Robotics in the School of Computer Science at Carnegie Mellon University, a position he has held since 1969. He served as dean of the School from 1991 to 1999. Dr. Reddy served as co-chair of the President’s Information Technology Advisory Committee from 1999 to 2001.
Director Not Continuing After the Annual Meeting
Paul G. Yovovich Director since 1997 Age 53		Mr. Yovovich is President of Lake Capital, a private investment firm that he co-founded in 1998.

CORPORATE GOVERNANCE

Board Independence

     Our Board of Directors (the “Board”) has determined that each of Messrs. DiCamillo, Long, Reddy, Trempont and Yovovich are independent within the meaning of the listing standards of the NASDAQ Stock Market. Messrs. Benhamou, Mao and Masri do not qualify as independent because they are, or were within prescribed periods, a 3Com employee. The NASDAQ rules have both objective tests and a subjective test for determining who is an “independent director.” The objective tests state, for example, that a director is not considered independent if he or she is an employee of the company or is a partner in or executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. None of the directors were disqualified from “independent” status under the objective tests other than those individuals who are or were employees of 3Com within prescribed periods. In assessing independence under the subjective test, the Board took into account the standards in the objective tests, and reviewed and discussed additional information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to 3Com and 3Com’s management. Based on all of the foregoing, as required by NASDAQ rules, the Board made a subjective determination as to each independent director that no relationships exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has not established categorical standards or guidelines to make these subjective determinations, but considers all relevant facts and circumstances. In addition to the board-level standards for director independence, the directors who serve on the Audit and Finance Committee each satisfy standards established by the Securities and Exchange Commission (“SEC”) providing that to qualify as “independent” for the purposes of membership on that Committee, members of audit committees may not accept directly or indirectly any consulting, advisory, or other compensatory fee from 3Com other than their director compensation.

     In making its independence determinations, the Board considered transactions occurring since the beginning of fiscal 2005 between 3Com and entities associated with the independent directors that were identified to the Company. In making its subjective determination, the Board considered the transactions in the context of the NASDAQ objective standards, the special standards established by the SEC for members of audit committees, and the SEC and Internal Revenue Service (IRS) standards for compensation committee members. In each case, the Board determined that, because of the nature of the director’s relationship with the entity and/or the amount involved, the relationship did not impair the director’s independence. The Board’s independence determinations included reviewing a series of purchase transactions that 3Com has with three different suppliers. Messrs. Long, Reddy and Trempont each serve on the board of directors of one of these suppliers. In each instance, however, the transaction levels were well below the limits established by the objective tests. Each director confirmed he did not participate in these business dealings or receive compensation based on them. Further, each director agreed to recuse himself from any future involvement in such transactions, confirmed he was not employed by such supplier and disclosed that he had only minimal equity ownership in the supplier.

Board Meetings

     During fiscal year 2007, our Board of Directors held five regularly scheduled meetings and fourteen special meetings. Each director attended at least 75% of the total meetings of the Board and the committees on which he served.

Committees of the Board

     The Board of Directors has established an Audit and Finance Committee, a Compensation Committee, a Nominating and Governance Committee and a Technology Committee. From time to time, the Board designates temporary committees to serve specific functions. For example, the Board formed an H3C Oversight Committee to oversee our recent purchase of an additional 49% interest in H3C Technologies Co., Limited.

     The Audit and Finance, Compensation, and Nominating and Governance committees are separately-designated standing committees and each committee consists of only “independent” directors (as independence is defined under applicable standards, including those of the NASDAQ Stock Market). In addition to being “independent” under NASDAQ’s general independence standards, the Board has determined that each member of the Audit and Finance Committee meets the additional independence standards set forth by SEC rules. Membership of each committee is listed below.

				Nominating and
Audit and Finance		Compensation(1)		Governance(2)		Technology
James R. Long*		Gary T. DiCamillo*		Paul G. Yovovich*		Eric A. Benhamou
Dominique Trempont**		Paul G. Yovovich		James R. Long**		Raj Reddy
Gary T. DiCamillo

     Audit and Finance Committee. Our Audit and Finance Committee met fifteen times in fiscal year 2007. The Audit and Finance Committee engages our independent registered public accounting firm, approves services rendered by our independent registered public accounting firm, reviews the activities and recommendations of our internal audit department, and reviews and evaluates our accounting systems, financial controls and financial personnel. The Committee also meets regularly with our independent registered public accounting firm and our director of internal audit without management present. The Board has determined that Messrs. Long, Trempont and DiCamillo, independent members of our Board, are each an Audit Committee Financial Expert, as defined by Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934. The Board has determined that each member of the Audit and Finance Committee meets the required NASDAQ standards for membership on such committee. Our Audit and Finance Committee operates under a written charter, a copy of which is available on our website at http://www.3com.com/corpinfo/en_US/investor/audit_finance.html.

     Compensation Committee. Our Compensation Committee met ten times in fiscal year 2007. The Compensation Committee reviews salaries and other compensation arrangements for our directors and

executive officers and approves (or recommends to the full Board) such compensation, administers our stock option and stock purchase plans, and advises the Board on general aspects of our compensation and benefit policies. The Committee also evaluates and approves or makes recommendations to the Board regarding the performance of our Chief Executive Officer, as well as matters related to succession planning for executive officers. Our Compensation Committee operates under a written charter which is available on our website at http://www.3com.com/corpinfo/en_US/investor/comp_com.html.

     Nominating and Governance Committee. Our Nominating and Governance Committee met four times in fiscal year 2007. The Nominating and Governance Committee focuses on the issues surrounding the composition and operation of the Board. The Nominating and Governance Committee assists the Board, the Chairman of the Board and the CEO in director selection, committee selection and rotation practices, evaluation of the overall effectiveness of the Board, and review and consideration of developments in corporate governance practices. The Nominating and Governance Committee recommends (to the full Board) directors for nomination to the Board. The Nominating and Governance Committee also selects directors for committee appointments and committee chairs. The Nominating and Governance Committee will determine the effect of a director’s change in employment status on such director’s continued tenure on the 3Com Board. The Nominating and Governance Committee operates under a written charter which is available on our website at http://www.3com.com/corpinfo/en_US/investor/nom_gov.html.

     Technology Committee. Our Technology Committee met four times in fiscal year 2007. The Technology Committee was established to make recommendations to the Board of Directors regarding the long-term technology architecture and strategy that 3Com is pursuing. The Committee meets with 3Com’s technology and engineering leaders and reviews the tactical or strategic benefits of selected projects in light of 3Com’s overall business strategy. The Committee makes reports to the Board of Directors as appropriate.

Code of Ethics and Business Conduct and Complaint Procedures

     Our Code of Ethics and Business Conduct, which is available on our website at http://www.3com.com, complies with the rules of the SEC and the listing standards of the NASDAQ Stock Market.

     The Audit and Finance Committee has also adopted procedures for the receipt, treatment and retention of complaints and concerns regarding accounting and auditing matters in compliance with the rules of the NASDAQ Stock Market and the SEC. These procedures cover 3Com and its subsidiaries, including H3C Technologies Co., Limited, our China-based subsidiary. Employees may submit complaints (1) anonymously through our toll-free hotline (called the “Ethics and Compliance Line”), (2) to any member of our senior management team (in person, by email or by telephone) and/or (3) directly to the Chair of our Audit and Finance Committee. All complaints are treated confidentially. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of a member of our senior management, reviewed by the Audit and Finance Committee or one or more of its representatives, evaluated and (where appropriate) investigated. The Committee will determine what actions to take, if any. We will not retaliate against any person making a complaint in good faith.

Chairman of the Board and Lead Independent Director

     Our Board is led by our Chairman of the Board, Mr. Benhamou, and by our lead independent director, Mr. DiCamillo. During the first month of fiscal year 2007 (through June 21, 2006), Mr. Yovovich served as our lead independent director. Mr. DiCamillo assumed that role commencing at the close of business on June 21, 2006, and continues in that capacity.

Nomination of Director Candidates

     The Nominating and Governance Committee makes recommendations to the Board regarding director nominees. The Nominating and Governance Committee identifies potential director candidates from any outside advisors it may retain, as well as from other members of the Board, executive officers and other contacts. The Nominating and Governance Committee will also consider nominees recommended by any stockholder entitled to vote in the election of directors. Any stockholder wishing to nominate an individual for election to the Board must comply with the advance notice procedures described at the end of this proxy statement. The nomination must contain the following information about the nominee: name; age; business and residence addresses; principal occupation or employment; the number of shares of common stock held by the nominee; the information that would be required under SEC rules in a proxy statement soliciting proxies for the election of such nominee as a director; and a signed consent of the nominee to serve as a director of 3Com, if elected. The Nominating and Governance Committee has not specified any minimum qualifications or specific qualities or skills necessary for serving on the Board. However, in its assessment of potential candidates, the Nominating and Governance Committee will review the candidate’s character, business experiences and understanding of the Company’s business environment, and ability to devote the time and effort necessary to fulfill his or her responsibilities, all in the context of the perceived needs of the Board at that time.

Delegation to Committees

     It is our general policy that all major Board decisions should be approved by the Board as a whole, unless delegated to a committee. Currently these committees are the Audit and Finance Committee, Compensation Committee, Nominating and Governance Committee and Technology Committee. All members of the Audit and Finance Committee, Compensation Committee and Nominating and Governance Committee are “independent” within the meaning of the independence standards of the NASDAQ Stock Market, including, in the case of the Audit and Finance Committee, the heightened independence standard required for such committee members. Each of these committees has adopted a written charter (available from our website), except for the Technology Committee.

Stockholder Communication with the Board of Directors

     Stockholders who wish to communicate with our Board, or with any individual member of the Board, may do so by sending such communication in writing to the attention of the Corporate Secretary at the address of our principal executive office with a request to forward the communication to the intended recipient. Stockholder communications must include confirmation that the sender is a stockholder of the Company. All such communications will be reviewed by the Company’s General Counsel and Corporate Secretary or Chief Financial Officer, as appropriate, in order to maintain a record of the communication, to assure director privacy, and to determine whether the communication relates to matters that are appropriate for review by our Board or by any individual director. Communications that (i) do not relate to the Company’s business, (ii) contain material that is not appropriate for review by the Board based upon the established practice and procedure of the Board, or (iii) contain other improper or immaterial information, will not be forwarded to Board members.

Board Attendance at the Annual Meeting

     Although we do not have a formal policy regarding attendance by members of the Board at our annual meetings of stockholders, directors are encouraged to attend annual meetings. In an effort to maximize director attendance at our annual meetings of stockholders, we attempt to schedule a meeting of the Board on the same day as the annual meeting of stockholders. All of our directors in office at the time (except Mr. Wajsgras whose term ended at such meeting) attended the 2006 annual meeting of stockholders.

Audit and Finance Committee Pre-Approval Policies

     The Audit and Finance Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally detailed as to the particular services or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management periodically report to the Audit and Finance Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and its fees for the services performed to date. The Audit and Finance Committee also pre-approves the provision of particular services on a case-by-case basis.

Compensation Committee Interlocks and Insider Participation

     The Compensation Committee during fiscal year 2007 consisted of Messrs. Yovovich and DiCamillo, neither of whom is or has been an officer or employee of 3Com or any of our subsidiaries. No interlocking relationship existed during fiscal year 2007 between our Board or Compensation Committee and the board of directors or compensation committee of any other company.

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Board Guidelines on Corporate Governance Issues

     Our corporate governance principles are set forth in our “Board Guidelines on Corporate Governance Issues,” which is available on our website at http://www.3com.com. These guidelines cover the following topics, each of which is summarized below:

	•		Primary functions of the Board of Directors;
	•		Authorization guidelines;
	•		Board access to senior management;
	•		Leadership of the Board;
	•		Charters of standing committees;
	•		Board selection process;
	•		Director’s eligibility, education and term of office; and
	•		Board and committee meetings.

Primary Functions of the Board of Directors

     The Board, which is elected by our stockholders, oversees the conduct of our business by management and reviews our financial objectives, major corporate plans, strategies, actions and major capital expenditures. Our directors are expected to promote the best interests of our stockholders in terms of corporate governance, fiduciary responsibilities, compliance with laws and regulations, and maintenance of accounting and financial controls. Our directors also participate in the selection, evaluation and, where appropriate, replacement of our chief executive officer and regularly approve a CEO succession plan. Directors also provide input to our CEO for the evaluation and recruitment of our principal senior executives.

Authorization Guidelines

     Consistent with the Board’s power to delegate management of the day-to-day operation of 3Com’s business, the Board exercises business judgment in establishing and revising guidelines for authorization of expenditures or other corporate actions, and these are periodically be reviewed with management.

Board Access to Senior Management

     Our directors have complete access to our senior executive officers. Our directors use their judgment to ensure that contact with our senior executive officers is not distracting to our business operation or management reporting structure. Our Board expects our CEO to bring into board meetings managers who can provide additional insight into the matters being discussed or who have future potential that our CEO believes should be made visible to the Board.

Leadership of the Board

     The leadership of the Board includes a Chairman of the Board and a lead independent director appointed by the Chairman. The Chairman works with the Secretary to disseminate materials to Board members and exercises initiative in recommending candidates for directorships and board committee assignments. The lead independent director serves as the focal point for independent directors regarding resolving conflicts with the CEO, or other independent directors, and coordinating feedback to the CEO on behalf of independent directors regarding business issues and board management. The lead independent director also serves as a special counsel to the CEO. The lead independent director and the other independent directors meet regularly without the CEO present.

Charters of Standing Committees

     The current committee structure of the Board includes the following committees: Audit and Finance, Compensation and Nominating and Governance. The charters of each standing committee are reviewed periodically with a view to delegating committees with the authority of the Board concerning specified matters appropriate to such committee.

Board Selection Process

     It is expected that all directors will be alert to potential Board candidates with appropriate skills and characteristics and communicate information regarding board selection matters to the Nominating and Governance Committee. The Nominating and Governance Committee is expected to exercise initiative in recommending to the Board candidates for directorships and board committee assignments. The Board endorses the value of seeking qualified directors from diverse backgrounds otherwise relevant to the Company’s mission, strategy and business operations and perceived needs of the Board at a given time.

Director’s Eligibility, Education, and Term of Office

     Directors may not serve on the board of directors of more than five other public companies. Directors are reimbursed for costs incurred in connection with participating in a director education program that is accredited by Institutional Shareholder Services, or any similar organization. Directors are elected to hold office for a term of two years. As an alternative to term limits, the Chairman and lead director review each director’s continuation on the Board at the conclusion of each two-year term. This also allows each director the opportunity to conveniently confirm his or her desire to continue as a member of the Board. Each director is required to submit a letter of resignation upon a job change. Such letter is to be accepted or rejected at the discretion of the Chairman. In addition, prior to accepting a position as a member of the board of directors of another public company, each director (other than the Chair of the Nominating and Governance Committee) is required to notify the Chair of the Nominating and Governance Committee of such matter and the Chair of the Nominating and Governance Committee is required to notify the lead independent director or the Chairman of the Board of such matter. Directors must retire from the board at the conclusion of any term during which the director reaches the age of seventy years.

Board and Committee Meetings

     In preparation for meetings of the Board and its committees, the Chairman consults with the CEO regarding the agenda and content and, with support from the Secretary, disseminates to directors on a timely basis briefing materials regarding matters to be included in the meeting agenda, as well as minutes from prior meetings and any written reports by committees. Presentations to the Board may rely on directors having reviewed and digested information set forth in the briefing materials, thus allowing more time for discussion, clarification and feedback. The format of each quarterly Board meeting includes an executive session with the directors and Chairman. In addition, the independent directors meet in executive session on a regular basis. Adequate time is scheduled for completion of matters placed on the agenda of each meeting, including an annual off-site meeting of the Board to review long-term strategy. The Board has the authority to hire its own advisors and to have them present at meetings, as it deems necessary.

DIRECTOR COMPENSATION

     The following tables provide information on 3Com’s annual compensation practices during fiscal year 2007 for our non-employee directors, as well as the actual compensation earned by non-employee directors who served during the 2007 fiscal year. In addition to the cash compensation described below, which is payable on a quarterly basis, members of the Board who reside outside of the local area are reimbursed for travel expenses to attend Board and Committee meetings at our headquarters. All non-employee directors are reimbursed for travel expenses to attend meetings at locations other than our headquarters. During fiscal year 2007, our Chief Executive Officers did not receive any separate compensation for Board activities. The Compensation Committee retains the services of a leading compensation consulting firm, currently Pearl Meyer & Partners, to present relevant market practices and trends regarding director compensation.

Non-Employee Director Compensation (Fiscal Year 2007 Annual Compensation)

Annual Board Membership Compensation
Chairman of the Board		$	100,000
Lead Independent Director			45,000
Other Directors			35,000
Committee and Attendance Compensation
Committee Chair (other than Audit & Finance)			2,500
Committee Chair, Audit & Finance			5,000
Payment for each Board meeting attended			1,000
Payment for each Committee meeting attended			1,000

     The foregoing amounts also represent the current annual compensation for non-employee directors for fiscal year 2008. The only change made to director compensation in fiscal year 2007, when compared with fiscal year 2006, was to increase the additional annual retainer for the Audit and Finance Committee Chair from $2,500 to $5,000.

Director Compensation in Fiscal Year 2007

																		Changes in
																		Pension Value
		Fees																and Nonqualified				All
		Earned or				Stock				Option				Non-Equity				Deferred				Other
		Paid in				Awards				Awards (1)				Incentive Plan				Compensation				Compensation
Name		Cash ($)				($)				($)				Compensation ($)				Earnings ($)				($)				Total ($)
Eric A. Benhamou			122,000				—				130,954				—				—				—				252,954
Gary T. DiCamillo(2)			83,328				—				83,583				—				1,164	(3)			—				168,075
James R. Long			114,000				—				69,550				—				—				—				183,550
Robert Y. L. Mao (4)			9,825				—				11,369				—				—				—				21,194
Raj Reddy			56,000				—				69,550				—				—				—				125,550
Dominique Trempont			41,077				—				66,367				—				—				—				107,444
Paul G. Yovovich			71,500				—				80,110				—				—				—				151,610
Julie St. John (5)			22,346				—				100,427				—				—				—				122,773
David Wajsgras (6)			17,375				—				53,882				—				—				—				71,257

     Non-employee directors receive options to purchase common stock pursuant to the 2003 Stock Plan. The 2003 Stock Plan provides for the initial grant of an option to purchase shares of our common stock (identified as the “Initial Grant” in the “Director Grants of Plan-Based Awards in 2007 Fiscal Year” table, below) to each non-employee director, with a maximum of 120,000 shares to be subject to each such option (or 160,000 shares for the Chairman of the Board and the lead independent director). Additionally, at the time an initial grant is made to a new director, he or she also receives an option grant for a number of shares equal to the number of shares subject to the annual renewal grants made to continuing directors, described below, pro-rated to reflect the number of full months of service remaining prior to the next annual stockholder meeting (identified as the “Pro Rata Grant” in the “Director Grants of Plan-Based Awards in 2007 Fiscal Year” table, below). For continuing directors, an annual renewal grant is made effective with each regularly scheduled annual stockholder meeting, subject to the same share limits described for initial grants (identified as the “Annual Grant” in the “Director Grants of Plan-Based Awards in 2007 Fiscal Year” table, below). The actual number of shares to be subject to the options granted for Board and committee service is established by a committee of employee directors. All options granted have a seven-year term, and the initial grant vests 25% on each anniversary date of the grant and the pro rata grant and annual renewal grant vest over two years with the first 50% vesting one year after grant and the remaining 50% vesting two years after grant as long as the option holder continues to serve on the Board.

     During fiscal year 2007, options were granted to non-employee directors under the 2003 Stock Plan for the following number of shares and at the per share exercise prices shown:

Director Grants of Plan-Based Awards in 2007 Fiscal Year

																						Aggregate
																						Number of
														Exercise				Fair Value at				Options
						Pro Rata								Price(1)				Grant(2)				Outstanding
Non-Employee Director		Initial Grant				Grant				Annual Grant				($)				($)				6/1/07
Eric A. Benhamou			—				—				94,000				4.4100				216,924				4,787,166
Gary T. DiCamillo			—				—				67,500				4.4100				155,770				377,470
James R. Long			—				—				50,000				4.4100				115,385				283,350
Robert Y.L. Mao			79,500				—				—				3.9200				156,917				354,500
Robert Y.L. Mao			—				25,000				—				3.9200				49,345				—
Raj Reddy			—				—				50,000				4.4100				115,385				354,750
Dominique Trempont			79,500				—				—				4.9000				203,854				125,333
Dominique Trempont			—				45,833				—				4.9000				117,525				—
Paul G. Yovovich			—				—				50,000				4.4100				115,385				331,250

     The following table shows all outstanding equity awards held by the non-employee directors at the end of fiscal year 2007.

Director Outstanding Equity Awards at 2007 Fiscal Year-End

		Number of Securities
		Underlying Unexercised				Number of Securities
		Options				Underlying Options
		(#)				(#)				Option Awards
Name		Exercisable				Unexercisable				Option Exercise Price ($)				Option Expiration Date
Eric A. Benhamou			564,771	(1)			0			$	11.7306				7/24/2007
			263,922	(1)			0			$	5.2827				9/1/2008
			211,186	(1)			0			$	8.0146				11/30/2008
			99,245	(1)			0			$	5.2179				6/14/2009
			1,013,692	(1)			0			$	5.5416				7/21/2009
			263,560	(1)			0			$	5.9818				9/13/2009
			111,506	(1)			0			$	8.9210				12/10/2009
			202,738	(1)			0			$	11.7565				7/11/2010
			37,046	(1)			0			$	4.9719				6/1/2008
			1,663,000	(1)			0			$	13.6875				8/1/2010
			37,500	(2)			0			$	4.0700				10/16/2012
			75,000	(2)			0			$	6.1500				9/23/2010
			75,000	(2)			0			$	4.3200				9/22/2011
			37,500	(2)			37,500			$	4.0400				9/28/2012
			0	(2)			94,000			$	4.4100				9/20/2013
Gary T. DiCamillo			79,500	(1)			0			$	10.0625				12/13/2010
			31,720	(2)			0			$	10.0625				12/13/2010
			39,750	(2)			0			$	3.7900				9/20/2011
			39,750	(2)			0			$	4.2600				9/24/2012
			39,750	(2)			0			$	6.1500				9/23/2010
			39,750	(2)			0			$	4.3200				9/22/2011
			19,875	(2)			19,875			$	4.0400				9/28/2012
			0	(2)			67,500			$	4.4100				9/20/2013
James R. Long			34,600	(2)			0			$	18.0000				12/13/2010
			19,875	(2)			19,875			$	4.0400				9/28/2012
			0	(2)			50,000			$	4.4100				9/20/2013
			39,750	(2)			0			$	4.3200				9/22/2011
			39,750	(2)			0			$	3.7900				9/20/2011
			39,750	(2)			0			$	6.1500				9/23/2010
			39,750	(2)			0			$	4.2600				9/24/2012
Robert Y.L. Mao			250,000	(1)			0			$	4.4500				09/05/2013
			0	(1)			79,500			$	3.9200				03/28/2014
			0	(2)			25,000			$	3.9200				03/28/2014
Raj Reddy			19,875	(2)			19,875			$	4.0400				9/28/2012
			39,750	(2)			0			$	4.3200				9/22/2011
			39,750	(2)			0			$	6.1500				9/23/2010
			39,750	(2)			0			$	4.2600				9/24/2012
			39,750	(2)			0			$	3.7900				9/20/2011
			26,500	(2)			0			$	10.1250				1/19/2011
			79,500	(1)			0			$	10.1250				1/19/2011
			0	(2)			50,000			$	4.4100				9/20/2013
Dominique Trempont			0	(1)			79,500			$	4.9000				10/23/2013
			0	(2)			45,833			$	4.9000				10/23/2013
Paul G. Yovovich			39,750	(2)			0			$	18.0000				12/13/2010
			39,750	(2)			0			$	3.7900				9/20/2011
			39,750	(2)			0			$	4.2600				9/24/2012
			54,000	(2)			0			$	6.1500				9/23/2010
			54,000	(2)			0			$	4.3200				9/22/2011
			27,000	(2)			27,000			$	4.0400				9/28/2012
			0	(2)			50,000			$	4.4100				9/20/2013
Julie St. John (3)			—				—				—				—
David Wajsgras (4)			—				—				—				—

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table contains information, as of August 3, 2007, with respect to the beneficial ownership of our common stock by:

	•		each individual or entity whom we know to own beneficially more than five percent of our common stock;
	•		each director and nominee;
	•		each of the current and former executive officers listed in the “Summary Compensation Table for Fiscal Year 2007” table included in this proxy statement; and
	•		all of our directors and current executive officers as a group.

     Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission and generally includes those persons who have voting or investment power with respect to the securities. Unless otherwise indicated, all persons named as beneficial owners of common stock have sole voting power and sole investment power with respect to the shares indicated as beneficially owned. In addition, unless otherwise indicated, all persons named below can be reached at 350 Campus Drive, Marlborough, Massachusetts 01752.

						Common Stock								Ownership
		Number of				Underlying								Percent of
		Shares of				Options				Total				Common Stock
		Common Stock				Exercisable				Beneficial				Beneficially
Name and Address of Beneficial Owner		Owned				Within 60 Days				Ownership				Owned (1)
5% Stockholders
Entities and individuals related to Citadel Limited Partnership (2) 131 S. Dearborn Street, 32nd Floor Chicago, IL 60603			39,085,937				—				39,085,937				9.8	%
Entities related to Barclays Global Investors, N.A. (3) 45 Fremont Street San Francisco, CA 94105			20,274,767				—				20,274,767				5.1	%
Directors and Named Executive Officers
Non-Employee Directors
Eric A. Benhamou (4)			708,146				4,175,395				4,883,541				1.2	%
Gary T. DiCamillo			1,000				343,720				344,720				*
James R. Long			12,800				258,350				271,150				*
Robert Y. L. Mao			—				250,000				250,000				*
Raj Reddy			1,000				329,750				330,750				*
Dominique Trempont			—				—				—				*
Paul G. Yovovich			482,669				306,250				788,919				*
Named Executive Officers
Edgar Masri (5)			515,031				3,000,000				3,515,031				*
Neal D. Goldman (6)			581,317				663,750				1,245,067				*
James Hamilton (7)			230,970				393,750				624,720				*
Dr. Shusheng Zheng (8)			200,000				—				200,000				*
Dr. Marc Willebeek-LeMair (9)			600,105				515,245				1,115,350				*
Donald M. Halsted, III (10)			252,084				550,000				802,084				*
R. Scott Murray (11)			—				—				—				—
All directors and current executive officers as a group (13 persons) (12)			3,246,027				9,945,965				13,191,992				3.2	%

     The following table summarizes information related to our equity compensation plans as of June 1, 2007:

Equity Compensation Plan Information

										Number of securities
										remaining available for
										future issuance under
		Number of securities to be				Weighted average				equity compensation plans
		issued upon exercise				exercise price of				(excluding securities
Plan category		of outstanding options				outstanding options				reflected in 1stcolumn)
Equity compensation plans approved by stockholders			30,283,313			$	5.2600				14,918,472
Equity compensation plans not approved by stockholders (1)			17,821,082				6.0600				—
Total			48,104,395			$	5.5600				14,918,472

     Disclosure Regarding Non-Stockholder-Approved Plans. The 1994 Stock Option Plan (“1994 Plan”) provided for the grant of stock options to employees other than officers and directors. The 1994 Plan, which was not approved by stockholders, was terminated as to future grants as of September 23, 2003. The 1994 Plan is administered by the Compensation Committee, which has the power to determine matters relating to outstanding option awards under the 1994 Plan, including conditions of vesting and exercisability. Options granted under the 1994 Plan expire no later than 10 years from the grant date. Options granted under the 1994 Plan generally vest in two or four years from the date of grant. Mr. Masri’s options under his Stand Alone Stock Option Agreement dated September 5, 2006 have a term of 7 years from the date of grant and vest and become exercisable in four equal annual installments on the anniversary of the date of grant.

RELATED PERSON TRANSACTIONS

     We have no related party transactions.

     It is the policy of the Board of Directors that all “related party” transactions, as defined by Item 404 of Regulation S-K, be subject to approval or ratification in accordance with the procedures set forth below. In furtherance of relevant Nasdaq rules and 3Com’s commitment to corporate governance, the charter of the Audit and Finance Committee provides that the Audit and Finance Committee shall review all “related party transactions” for potential conflict of interest situations on an ongoing basis, and all such transactions must be approved by the Committee. The Audit and Finance Committee also adopted a separate policy intended to provide more detail as to the procedures to be followed in implementing the Committee’s responsibilities under its charter. The material terms of the policy are as follows:

	•		the Audit and Finance Committee shall review the material facts of all related party transactions that require the Committee’s approval and either approve or disapprove of the transaction;
	•		in determining whether to approve or ratify a transaction, the Audit and Finance Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction;
	•		no director shall participate in any discussion or approval of a transaction for which he or she is a related party, except that the director shall provide all material information concerning the transaction to the Audit and Finance Committee;
	•		if a transaction will be ongoing, the Audit and Finance Committee may establish guidelines for the Company’s management to follow in its ongoing dealings with the related party; thereafter, the Audit and Finance Committee, on at least an annual basis, shall review and assess ongoing relationships with the related party to see that they are in compliance with the Committee’s guidelines and that the transaction remains appropriate; and
	•		as a general matter, the Company’s Chief Compliance Officer and his or her delegates will assist the Audit and Finance Committee in compiling and interpreting information received that bears on related party transactions.

COMPENSATION DISCUSSION AND ANALYSIS

     Compensation Philosophy and Objectives

     3Com’s executive compensation philosophy is to provide a meaningful total compensation opportunity to each executive with a large portion of the opportunity being variable and aligned with stockholder value creation. Consequently, we intend that our executives realize significant incentive value when 3Com stockholders receive significant gains. The goal of 3Com’s executive compensation program is to:

	•		attract, retain and motivate highly qualified executives in a highly competitive market;
	•		align executive compensation with stockholder value creation;
	•		provide rewards that are commensurate with 3Com’s business performance;
	•		maintain flexibility to respond to changing needs of the business; and
	•		provide transparency so that executives and other stockholders understand the executive compensation program and the objectives it seeks to achieve.

     The following current or former officers are included in this Analysis:

	•		Edgar Masri, President and Chief Executive Officer
	•		R. Scott Murray, former President and Chief Executive Officer
	•		Donald M. Halsted, III, former Executive Vice President and Chief Financial Officer
	•		Neal D. Goldman, Executive Vice President and Chief Legal and Administrative Officer and Secretary
	•		James Hamilton, Senior Vice President and President, TippingPoint
	•		Robert Y. L. Mao, former Executive Vice President, Corporate Development
	•		Dr. Marc Willebeek-LeMair, Senior Vice-President and Chief Technology Officer
	•		Dr. Shusheng Zheng, Chief Operating Officer, H3C Technologies Co., Limited

     Overview of Compensation Practices

     The Compensation Committee, (the “Committee”) reviews salaries and other compensation arrangements for our directors and those officers subject to the reporting requirements of Section 16 of the Securities Act of 1934, as amended (“Executives”). The Committee approves such compensation and advises the full Board of Directors (the “Board”) on general aspects of our compensation and benefit policies. Although the Committee receives and considers input from Company executives, its compensation consultant and its legal advisers, it does not delegate decision-making authority on executive or director compensation. A detailed discussion of the Committee’s structure, roles and responsibilities and related matters can be found above under the heading “Board of Directors Meetings and Committees”. The Committee operates under a written charter that is available on our website at http://www.3com.com/corpinfo/en_US/investor/comp_com.html. The Committee meets as often as necessary to discharge its responsibilities. In fiscal year 2007, the Committee met ten times in a combination of regularly scheduled and special meetings, and met in modified executive session four times, once with the CEO, and three times with some combination of the Committee’s consultant, the Chief Legal and Administrative Officer and the Vice President, Law and Assistant Secretary. In addition, the Board met in Executive Session, with only the Chief Administrative and Legal Officer and the Assistant Secretary present, to review and approve the employment agreements for President and Chief Executive Officer Edgar Masri and Executive Vice President Robert Y.L. Mao.

     At least annually, the Committee reviews 3Com’s Executive compensation programs and policies in light of the above philosophy and in relation to changes and trends in the marketplace. The Committee determines whether each Executive’s total compensation is consistent with the compensation philosophy and market data, and makes adjustments as necessary. When making compensation decisions, the Committee takes into account market data for Executives with comparable responsibilities at our peer group companies and other factors, including each Executive’s individual performance (particularly over the past year), his or her expected future contributions, financial and operational results, each Executive’s historical compensation, any retention concerns, and the Chief Executive Officer’s recommendations in the case of Executives other than himself. In looking at historical compensation, the Committee looks at the salary over time and also looks at the unvested and vested value inherent in equity awards, among other factors.

     The Committee retains the services of a leading compensation consulting firm, Pearl Meyer & Partners, to advise on pay levels and mix, incentive plan design, performance measurement, and other relevant market practices and trends. Pearl Meyer & Partners also collects and analyzes relevant market data or “benchmarks” from peer group companies and industry-specific surveys in each of these areas. Pearl Meyer & Partners prepares reports for, delivers presentations to and engages in discussions with the Committee about its observations and analysis of the information it collects. Such reports, presentations, and discussions address topics ranging from the strategic considerations for compensation of the Company’s Executives and Directors to potential tax and accounting implications and dilutive impacts of various compensation elements to specific adjustments of particular elements of both Executive and Director compensation. Pearl Meyer & Partners provides a limited amount of other advice and consulting services for the Company, primarily in the area of our equity program.

     Role of Executives and Other Employees in Compensation Matters. The Chief Executive Officer annually reviews the performance and contribution of Executives. The conclusions reached and recommendations based on these reviews, including salary adjustments, semi-annual bonus awards and equity grants, are presented to the Committee. The Committee may exercise its discretion in modifying, accepting or rejecting these recommendations. Our Chief Administrative and Legal Officer and members of his staff facilitate the interaction between Pearl Meyer & Partners and the Committee as the case warrants.

     The Chief Executive Officer, the Chief Legal and Administrative Officer and members of the latter’s staff attend parts of meetings of the Compensation Committee. The Committee regularly meets in executive session without the Chief Executive Officer to discuss and decide elements of the compensation of the Chief Executive Officer and other Executives.

     Market Positioning. 3Com targets Executive compensation to the relevant competitive market. The competition among high technology companies for qualified executives is intense, and our strategic plans depend heavily on a committed and highly qualified Executive team. Accordingly, we generally target Executive total direct compensation, which includes base salary, bonus, and long-term incentives, at the 65^th to 75^th percentile of the competitive market. Compensation for any Executive may vary from these targets, up or down, based on performance, tenure, experience, prior compensation and other factors that may be judged as critical and pertinent by the Committee.

     Peer Group. Periodically, the Committee, working with Pearl Meyer & Partners, reviews its peer group to ensure that the companies selected are appropriate for compensation and performance comparison purposes. In fiscal year 2007, the peer group used by the Committee for pay comparisons and for evaluating our relative performance included:

	•		Adaptec, Inc.
	•		ADC Telecomm
	•		Avaya, Inc.

	•		Broadcom Corporation
	•		Brocade Communications
	•		Extreme Networks
	•		Foundry Networks
	•		Juniper Networks
	•		Tellabs, Inc.

     At the beginning of fiscal year 2008 and primarily due to the acquisition of the balance of H3C, the Committee, with the assistance of Pearl Meyer & Partners, reevaluated the industry peer companies in light of the increased size and global footprint of the Company. The Committee developed a peer group that it believes more closely aligns with 3Com’s current business strategy, annual revenue, market capitalization, and international presence. Based on this analysis, for fiscal year 2008, the peer group to be used by the Committee for pay comparisons and for evaluating our relative performance shall be:

	•		ADC Telecomm
	•		Avaya, Inc.
	•		Brocade Communications
	•		Extreme Networks
	•		Foundry Networks
	•		Juniper Networks
	•		McAfee, Inc.
	•		Netgear, Inc.
	•		Tellabs, Inc.

     Components of Executive Compensation

     Executive compensation at 3Com consists primarily of base salary, a short-term performance-based cash incentive opportunity, a long-term incentive opportunity (consisting primarily of equity-based vehicles), perquisites and other benefits. 3Com has selected these elements of compensation because each is considered useful and/or necessary to meet one or more of the principal objectives of our compensation policy. We design base salary and employee benefits with the goal of attracting employees by providing a threshold level of compensation for services performed. We provide performance-based cash incentives to motivate and reward achievement of short-term performance goals. We award long-term incentives to closely align Executive interests with those of our stockholders, to promote achievement of long-term business objectives and to retain key talent.

     Base Salary. Base salaries provide a fixed amount of compensation for the Executive’s work responsibilities. In determining each Executive’s base salary, the Committee considers competitive market data for similar positions at high technology companies (including companies from our peer group), individual responsibilities and performance, and internal equity within 3Com. In June 2006 and again in July 2007, the Committee conducted its annual Executive salary review. Based upon market data and 3Com’s overall performance, the Committee did not increase base salary levels in either year.

     Annual Cash Incentive Bonus. The Company’s compensation objective is to have a significant portion of each Executive’s compensation tied to performance. To this end, the Company has established a target annual performance-based cash incentive opportunity for each Executive expressed as a percentage of base salary. In establishing the amount of target incentive, the Committee evaluates the total target cash compensation (base salary + target incentive) and compares it to benchmark data. The actual award earned may be higher or lower than this target incentive amount based on Company, divisional and/or individual performance factors.

     The Committee believes that the Company’s annual business plan and near-term business objectives are best supported by a cash incentive plan tied to performance goals established for a period of one year or less. Because of the rapidly changing industry in which 3Com competes, the Committee believes that annual or semi-annual goals can be established with greater specificity and linkage to the operating plan objectives and with less risk of error or misalignment with longer measurement periods. The Committee also believes that goals that can be achieved over an annual or semi-annual period are more effective at motivating performance and promoting retention than goals which take a longer time to achieve and are therefore inherently less under the control of the individual to accomplish. Moreover, the Committee believes that establishing annual or semi-annual plans provides the Company with the flexibility to adjust the structure and objectives of its plan to meet changes in the Company’s business and competitive environment. For example, the Committee was able to set specific financial metrics for each half of fiscal year 2007 that established a clear set of priorities and concrete financial goals for Executives and, by extension, their various organizations and teams.

     For fiscal year 2007, Executive bonus payments were issued under one of two cash incentive bonus programs: the 3Bonus Program and the H3C Cash Incentive Bonus Program. The table below indicates the percentage of base salary associated with target bonuses for each Executive under the 3Bonus Program. These percentages are unchanged for participating Executives in fiscal year 2008. The target for Dr. Zheng under the H3C program will be addressed below under the heading “H3C Cash Incentive Program.”

		Target Bonus
		based on % of
Officer		Base Salary
Masri			100	%
Murray			100	%
Halsted			65	%
Goldman			65	%
Hamilton			65	%
Mao			100	%
Willebeek-LeMair			65	%

          3Bonus Program

     For the first half of fiscal year 2007, the Committee set metrics for Executives participating in the 3Bonus Program based on the achievement of specified financial goals with respect to 3Com’s operating profit on a non-GAAP basis and various segment and divisional financial results in the following categories: (1) revenue, (2) non-GAAP operating profit, and (3) contribution margin (defined as gross margin minus research and development expenses adjusted for certain items).

     For each Executive, the individual metrics were weighted between 20% and 60% of a total 100% bonus opportunity. To set realistic but challenging goals and to emphasize the criticality of at least baseline achievement of the segment operating profit metrics, the Committee determined that each metric could be earned individually and independent of thresholds for other metrics, provided that no payouts were permitted unless the segment non-GAAP operating profit metric was achieved at “threshold level” or higher.

     For the fiscal year 2007 and the first half fiscal year 2008 programs, although the “target” bonus amounts are set forth in the table above, the bonus potential ranges from 50% — 200% of target amounts, based on the degree of attainment of financial metrics. For each metric described above, the Committee set goals for payouts of bonus at three levels: “threshold” (the achievement of which would result in a payout of

50% of target bonus amounts), “target” (the achievement of which would result in a payout of 100% of target bonus amounts) and “maximum” (the achievement of which would result in the maximum payout of 200% of target bonus amounts). The programs call for actual payout to be based on a sliding scale for achievement attained in between specified levels, although no payouts result unless, at a minimum, “threshold” achievement levels were or are attained for that metric.

     For the first half of fiscal year 2007, the achievement of financial metrics within the context of the approved 3Bonus Program was reviewed by the Committee. The Committee determined that the calculated bonus payout of 80% of the target incentive was appropriate for all Executives, including the CEO, correlating to the financial performance of the business against the plan. Mr. Masri’s payout was prorated based on his effective date of employment, in accordance with his employment agreement. Mr. Murray, the President and Chief Executive Officer for the first three months of fiscal year 2007, did not receive any payout under the 3Bonus Program during fiscal year 2007.

     For the second half of fiscal year 2007, the Committee determined to adjust the 3Bonus Program to align with second half goals for consolidated Company performance, and allow for greater subjective assessment of individual Executive performance at the time of determining payout. The Committee set metrics for Executives participating in the 3Bonus Program based on the achievement of specific financial goals with respect to 3Com’s consolidated (1) revenue, (2) gross margin, and (3) non-GAAP operating profit. “Gross margin” (defined as revenue less cost of goods sold) was added as a metric in the second half due to the increasing importance of managing this aspect of performance across the organization. Because all metrics for the second half reflected consolidated measures, “contribution margin” (which is a profitability measure for a sub-unit of the organization) was not included as a metric. These three metrics were weighted between 25% - 50% of a total 100% potential target bonus opportunity. As with the 3Bonus Program for the first half of fiscal year 2007, each metric could be earned individually and independent of thresholds for other metrics, provided that no payouts were permitted unless the non-GAAP operating profit metric was achieved at “threshold” level or higher.

     For the second half of fiscal year 2007, the Committee reviewed performance relative to the pre-established consolidated financial goals and determined that, based on the relative influence of H3C, the resulting payout would have over-compensated Executives when considering performance within their areas of direct accountability. Therefore, the Committee exercised its discretion to reduce the payout amounts to better coincide with performance against the financial metrics established for each Executive’s respective business unit, and granted bonuses to Executives ranging from 25% to 74% of Executives’ target bonus amounts. The Committee applied the same principle to the determination of Mr. Masri’s payout, issuing a payout at 74% of target incentive for the period to align his bonus payout with that of the Corporate group.

     For the first half of fiscal year 2008, the Committee again set metrics for Executives participating in the 3Bonus Program based on the achievement of specified financial goals but changed the weighting of the metrics to 20% — 40% to create more of a balance of emphasis among the metrics. The metrics for the program for the first half of fiscal year 2008 are: (1) revenue, (2) non-GAAP operating profit and (3) gross margin. The Committee retains the discretion to adjust the payout levels funded under this structure based on its assessment of individual performance at the time it determines any payout.

          H3C Cash Incentive Bonus Program

     The Committee determined that it was in the Company’s best interest at this time to emphasize Dr. Zheng’s focus on the performance of H3C. Accordingly, Dr. Zheng is not a participant in the 3Bonus Program and instead is aligned with the H3C business unit of the Company as a participant in the H3C Cash Incentive Bonus Program. The H3C Cash Incentive Bonus Program, which pre-existed 3Com’s March 29, 2007 acquisition of the remaining 49% of H3C (the “Acquisition”), was based on a set pool of available earnings under H3C’s financial plan for calendar year 2006 (which is also H3C’s fiscal year). H3C’s overall financial performance for the period was just under its financial plan, so taking into account the disruptive effects of the Acquisition by 3Com, the Committee rewarded Dr. Zheng for his leadership of H3C to the full extent of his allocation.

     The portion of Dr. Zheng’s calendar year 2006 bonus that was earned in 3Com’s fiscal year 2007 was approximately $118,040. Under his employment agreement, Dr. Zheng’s annual bonus opportunity for calendar year 2007 through the term of his agreement is approximately 67% of his current base salary. Dr. Zheng’s payout for the calendar year 2007 bonus plan for H3C, if any, cannot yet be calculated.

     Prior to the Acquisition, the Board of Directors of H3C established an Equity Appreciation Rights Plan (the “EARP”) for the purpose of attracting and retaining high quality personnel by offering individual incentives to link to the success of H3C. The EARP, including the granting of annual shares in and the establishment of a supplementary pool to be distributed after the Acquisition, was administered by the H3C Board of Directors until the Acquisition. Thereafter, Dr. Zheng became an officer of the Company subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended, which required the Committee to review and approve the recommended supplementary grant of shares to him. In consideration of Dr. Zheng’s effective leadership of H3C and H3C’s strong growth and financial performance during the three-year period of time covered by the EARP, the Committee approved a supplementary grant to him valued at approximately $1,609,960 shortly after the Acquisition.

     Additional Bonus. In August 2006, upon recommendation of the Board, the Committee approved a special bonus of $50,000 to Mr. Goldman in recognition of his leadership and efforts during several executive transitions and the related transactions.

     Equity Incentives. Executives’ compensation mix emphasizes equity incentives. The Committee believes that equity compensation should be emphasized because it most directly links Executive and stockholder interests. We normally target equity compensation for Executives at the 65^th percentile of the market comparisons in order to attract, retain and reward qualified Executives and focus them on long-term Company performance. The Committee, with the assistance of Pearl Meyer & Partners, determines Executive equity grants by reviewing a composite set of data which includes Black-Scholes valuation estimates of disclosed grants made by comparable companies, third-party survey data, internal comparisons, potential incremental share dilution, and the FAS123(R) costs associated with equity grants.

     Historically, 3Com’s equity incentives at the Executive level, which are usually granted on an annual basis as part of a broader Company equity program, have been in the form of stock options with time-based vesting, restricted stock with time-based vesting, restricted stock with performance vesting, and restricted stock with performance-accelerated vesting (“PAVRS”). In accordance with 3Com’s policy for granting equity awards, grants to Executives already employed by the Company are effective on the first Tuesday of the month that immediately follows the month in which grants are approved; grants to newly hired Executives are effective on the first Tuesday of the month that immediately follows the month in which they start. Stock options are issued at an exercise price equal to the closing price of the Company’s common stock on the effective date of the grant and typically vest in equal annual installments over four years. We utilize stock options as a means to directly tie Executives’ compensation to stockholder value appreciation. Restricted

stock with time-based vesting is typically issued as both a means to directly tie Executives to stockholder interests and to assist in the retention of Executives by efficiently providing some certainty of value of the holdings if they remain with the Company. We issue restricted stock with performance vesting and PAVRS as a means of tying Executives to key business performance metrics that directly relate to stockholder value appreciation. Performance vesting restricted stock is forfeited if the metrics are not achieved. PAVRS is not forfeited but converts to cliff vesting, usually four years from the grant date, provided the Executive remains employed by the Company.

     The Committee has not granted nor does it intend in the future to grant, equity awards to Executives in anticipation of the release of material nonpublic information that is likely to result in changes to the price of the Company’s common stock. Similarly, the Committee has not timed, nor does it intend in the future to time, the release of material nonpublic information based on equity award grant dates.

     In recent years, in line with market trends and the Company’s need to retain key Executives, the Company has altered its approach to equity incentives from predominantly using stock options to one that reflects an increased use of restricted stock. The Committee believes that the recent emphasis on restricted stock in the equity mix recognizes competitive market trends, balances stock options’ incentive value of increasing the value of the Company’s stock and the more certain retentive value of restricted stock. In addition, restricted stock may be a more efficient vehicle with respect to our equity plan share reserves and overall dilution, because generally fewer shares are needed to retain and motivate our Executives and other employees than is the case with stock options.

     The need to hire, retain and motivate Executives in the current competitive environment in the high technology industry and the unique demands of the integration of H3C and other structural challenges facing the Company were heavily considered in determining both the size and type of fiscal year 2007 grants. In consideration of these factors, the Committee determined to grant the annual awards to Executives at levels beyond the 65^th percentile targeted in past years with special retention grants. The Committee approved a combination of stock options and restricted stock with time-based vesting to each then-current Executive other than the Chief Executive Officer, as well as awards of restricted stock with performance vesting to two Executives. In determining the allocation of the awards, the Committee analyzed the expected value of the awards currently and under various stock price scenarios, the value of prior awards to the recipients, the Executive’s target compensation in the context of relevant market data, the retention risk, the relative contribution of the Executive and the FAS123(R) costs of the proposed grants. The issued stock option grants vest 25% per year over four years, and the issued restricted stock grants with time-based vesting vest 16.7% semi-annually over three years. In recognition of the criticality of the Acquisition, the Committee awarded restricted stock with vesting dependent upon the consummation of a transaction whereby 3Com acquired additional interest in or recapitalized H3C to the two accountable Executives, the Chief Financial Officer and the Chief Legal and Administrative Officer. The amount of these awards was determined by the Committee taking into account the size and strategic value of the transaction, and the amount of value appropriate to motivate and reward the extraordinary efforts required to complete it.

     In August 2006, the Company entered into an employment agreement with Mr. Masri to succeed Mr. Murray as the Company’s President and Chief Executive Officer. The terms of that agreement included a grant of twelve million stock options, all of which were effective as of the first Tuesday of the month following his start date in accordance with the Company’s equity grant policy, and were intended to cover a four-year period under normal circumstances. Eight million five hundred thousand of these stock options were granted under a Stand Alone Stock Option Agreement and qualify as an inducement to Mr. Masri to enter into the employment under the applicable NASDAQ rules. To further encourage stockholder value creation, six million of Mr. Masri’s stock options have a premium exercise price. Specifically, three million stock options were granted at a 20% premium, and three million stock options were granted at a 30% premium to the closing price of the Company’s common stock on NASDAQ on the effective date of the

grants. All of the stock options are subject to annual vesting over four years. The Committee also approved a grant to Mr. Masri of five hundred thousand restricted shares to vest annually over three years.

     Also in August 2006, the Committee approved new hire grants totaling up to two million stock options to Mr. Mao. One million of the stock options were granted effective as of the first Tuesday of the month following his start date; the remaining one million of the stock options were to have been granted if he was appointed Chief Executive Officer of H3C by April 1, 2007, in anticipation of the Acquisition. Both grants were to vest in equal increments over four years. The second grant was never made. The Company determined in March 2007 that Mr. Mao’s experience in China and the networking industry would be of greater benefit to the Company if he were a member of the Board rather than a member of management. Accordingly, the Company terminated his employment, triggering certain severance benefits, and the Board elected him as a director on March 23, 2007. See the “Severance and Change of Control Benefits” section below for a discussion of the disposition of the outstanding stock options and the triggered severance benefits upon the termination of Mr. Mao’s employment.

     In March 2007, intending to establish some direct alignment of the long-term interests of Dr. Zheng with not just the H3C business unit but the entire Company, the Committee approved a restricted stock grant of 200,000 shares that vests annually over three years in connection with his employment agreement, effective upon the Acquisition. The Committee believes that this time-based grant will also contribute to the Company’s ability to retain Dr. Zheng throughout the integration period and beyond.

     Perquisites and Other Benefits. Historically, the Company has made available to Executives benefits that are available to other employees of the Company. Executives are entitled to participate on the same basis and in the same medical, dental, vision, disability, life insurance, and other plans and programs made available to other full time employees in the applicable country of residence. The Company also provides certain additional perquisites that the Company and the Committee believe are reasonable and consistent with its overall compensation program to better enable the Company to attract and retain qualified individuals for certain Executive positions. Specifically, Mr. Masri, pursuant to his employment agreement, was entitled to receive a maximum of $15,000 for legal and tax expenses incurred in connection with the negotiation, preparation and execution of his employment agreement, of which a total of $10,000 was actually incurred. 3Com also purchases and maintains a $10,000,000 life insurance policy for the benefit of the Chief Executive Officer (or his estate) throughout the term of his employment, with a maximum annual premium of $30,000. The Committee has approved perquisites for other Executives on a case-by-case basis, as the situation requires, including expenses and tax equalization associated with Mr. Mao’s expatriate assignment in China, and automobile lease and travel cost reimbursement to Mr. Hamilton. Pursuant to the terms of his employment agreement prior to our acquisition of TippingPoint, Mr. Hamilton was entitled to a housing allowance. The Company subsequently modified the benefit to cover an automobile lease and travel expenses for commuting to our offices in Austin, Texas. Such benefits were subject to an initial gross-up of the taxable values to Mr. Hamilton. The Committee approved the extension of these benefits to Mr. Hamilton for fiscal year 2008 in light of the need to retain his services while the Company contemplates strategic options for the TippingPoint business unit.

     The Company has a 401(k) tax-qualified retirement savings plan pursuant to which all U.S.-based employees are entitled to participate. Employees can make contributions to the plan on a before-tax basis to the maximum amounts prescribed by the Internal Revenue Service. The Company will match 3% of the amount contributed by the employee. The Company matching contributions vest annually in thirds through the first three years of employment with 3Com and are fully vested thereafter. Participants in the Company’s 401(k) plan direct their own investments, which does not include Company stock. Other than these generally available plans, there are no other deferred savings plans in which the Executives participate.

     Attributed costs of the personal benefits described above for the Executives for the fiscal year ended June 1, 2007, are included in the column entitled “All Other Compensation” in the “Summary Compensation Table for Fiscal Year 2007” table in this proxy statement.

     Severance and Change of Control Benefits

     Consistent with market practice as reviewed and reported on by Pearl Meyer & Partners regarding compensation for chief executive officers and other executives, and to retain and promote focus of our management team, the Executives are covered by arrangements which specify payments in the event the Executive’s employment is terminated under certain circumstances, including instances of constructive discharge resulting in the Executive’s resignation for certain specified reasons.

     Our Chief Executive Officer is entitled to severance benefits if he is terminated without “Cause” or resigns for “Good Reason” (as such terms are defined in his employment agreement). If such termination is not in connection with a “Change of Control,” (as such term is defined in his employment agreement), the severance benefits include 12 months of base salary plus the payment of Mr. Masri’s target annual cash incentive for the year in which the termination occurs, 12 months of accelerated vesting of outstanding equity awards (other than performance-based awards) and up to 18 months of reimbursement for premiums paid under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). He is also entitled to an extension of the period in which to exercise his stock options after termination, from the earlier of the expiration of the stock option or 90 days provided for in the Company’s 2003 Stock Plan to the earlier of the expiration of the stock option or 165 days, as well as continuation for up to one year of the life insurance policy in effect at the time of his termination. If such termination is in connection with a Change of Control, Mr. Masri is entitled to severance benefits including two years of base salary, the payment of two times his annual cash incentive for the year in which the termination occurs, full vesting of outstanding equity awards (other than performance-based awards), up to 18 months of reimbursement for premiums paid for COBRA coverage, an extension of the period in which to exercise his stock options after termination, from the earlier of the expiration of the stock option or 90 days provided for in the Company’s 2003 Stock Plan to the earlier of the expiration of the stock option or 165 days, and continuation for up to one year of the life insurance policy in effect at the time of his termination. The Committee believes that conditioning Change of Control benefits on the “double trigger” of both altered control and termination avoids a windfall payment to the Executive.

     In accordance with prevailing practice as reported by Pearl Meyer & Partners to the Committee in the context of its review of Mr. Masri’s compensation arrangements at the time of his hiring, Mr. Masri is also entitled to full gross-up payments for excise taxes owed in connection with any “parachute payments” within the meaning of Section 280G of the Internal Revenue Code, provided that the Company may elect not to make such payments in certain instances including if they would not significantly benefit Mr. Masri.

     In the event of termination without “Cause” or resignation for “Good Reason” (as those terms are defined in our Section 16 Officer Severance Plan and our forms of Management Retention Agreements), our other current Executives are entitled to receive 12 months of base salary, payment of their pro-rated earned cash incentive bonus for the year of termination (based on days worked), acceleration of six months outstanding equity awards (other than performance-based awards), and continuation of Company-paid premiums for health, dental and vision benefits for a period not to exceed 12 months, if such coverage is elected pursuant to COBRA. If such termination or resignation is in connection with a “Change of Control” (as such term is defined in our Section 16 Officer Severance Plan and our forms of Management Retention Agreements), these Executives also receive acceleration of all outstanding equity and payment of a year’s target bonus amount and continued coverage of employee benefits for a period not to exceed 2 years (instead of 12 months). The gross-up protection for current Executives other than the Chief Executive Officer are limited to circumstances where the “parachute payments” would be greater than 3.59 times the “base amount” as those terms are defined by applicable tax regulations.

     In addition to the severance benefits described just above, Mr. Hamilton is eligible for a modified severance if he chooses to resign between August 2, 2007 and November 2, 2007 with an effective date in November 2007. This modified severance includes six months of salary and benefits for Mr. Hamilton, one-half his annualized target bonus as well as acceleration by six months of time-based equity and 12.5% of performance-based equity. The Company extended this severance protection to Mr. Hamilton to retain him for a defined period of time while the Company was contemplating strategic options for its TippingPoint business unit.

     Dr. Zheng is entitled to severance benefits if he is terminated without a “Valid Reason” (as that term is defined in his employment agreement) that include a payment equal to one month of his base salary per year of service with the Company, and an additional 12 months of base salary. Dr. Zheng’s benefits under the Section 16 Officer Severance Plan, his Severance Benefit Agreement or his Management Retention Agreement shall be offset and reduced by some of the specific severance benefits for which he is eligible under his employment agreement.

     Each Executive is required to execute a general release and is subject to certain restrictive covenants in connection with the receipt of any severance benefits, generally including non-solicitation of employees, non-competition and non-disparagement covenants.

     Mr. Mao received severance upon the termination of his employment on March 23, 2007, prior to his appointment as a member of the Board that same date. Given the importance of the Acquisition and the H3C business unit to the Company’s overall strategy, the Committee believes the severance was appropriate and necessary to secure the services of an executive with extensive experience in China. Mr. Mao received severance benefits including a payment of $800,000, accelerated vesting of 250,000 stock options as well as an extended exercise period through September 4, 2007, fully-paid health benefits for up to eighteen months, and fully-paid life insurance premiums for up to 12 months. His severance agreement includes a general release as well as certain non-solicitation covenants.

     Impact of Tax and Accounting Treatment

     Section 162(m) of the Internal Revenue Code, enacted in 1993, generally disallows a tax deduction to a public corporation for compensation of more than $1 million paid to the corporation’s Chief Executive Officer, Chief Financial Officer and three other most highly compensated Executives. Qualifying performance-based compensation will not be subject to the cap if certain requirements are met. The Committee has reviewed 3Com’s 3Bonus Program and has weighed the benefits of compliance against the burdens. While the Committee’s intent is to maximize the deductibility of Executive compensation to the extent reasonable, the Committee has chosen not to qualify the 3Bonus Program at this time in order to maintain flexibility. The Committee believes that any loss of deductibility will not be material to 3Com’s results and that the burdens of compliance outweigh the benefits. 3Com’s stock option plans, however, are designed to comply with Section 162(m), so stock option grants under the plans are generally tax deductible upon exercise.

COMPENSATION COMMITTEE REPORT

     We, the Compensation Committee of the Board of Directors of 3Com Corporation, have reviewed and discussed the Compensation Discussion and Analysis set forth above with the management of the Company, and, based on such review and discussion, have recommended to the Board of Directors inclusion of the Compensation Discussion and Analysis in this proxy statement and, through incorporation by reference from this proxy statement, the Company’s Annual Report on Form 10-K for the year ended June 1, 2007.

		Compensation Committee:
		Gary T. DiCamillo, Chair
		Paul G. Yovovich

EXECUTIVE COMPENSATION

Summary Compensation Table

     The following table contains information concerning the compensation of (1) our current Chief Executive Officer, (2) our former Chief Executive Officer who served in such capacity during fiscal year 2007, (3) our former Chief Financial Officer who was serving in such capacity at the end of fiscal year 2007, (4) our three other most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2007 and (5) two additional persons who were executive officers during fiscal year 2007 (but were not executive officers at the end of fiscal year 2007) and would have been one of the three most highly compensated executive officers in the table below had they been executive officers at the end of fiscal year 2007.

Summary Compensation Table for Fiscal Year 2007

																										Change in
																										Pension Value
																										and Nonquali-
																						Non-Equity				fied Deferred
														Stock				Option				Incentive Plan				Compen-				All Other
		Fiscal												Awards				Awards				Compensation				sation				Compen-
Name and Principal Position		Year				Salary ($)				Bonus ($)				($)(1)				($)(1)				($)				Earnings ($)				sation ($)				Total ($)
Edgar Masri President and Chief Executive Officer			2007				510,068				—				546,099				3,482,252				391,637	(2)			—				56,442	(3)			4,986,498
Neal D. Goldman Executive Vice President, Chief Administrative and Legal Officer and Secretary			2007				375,000				50,000	(4)			1,184,636				482,233				188,844	(5)			—				6,600	(6)			2,287,313
Dr. Shusheng Zheng Chief Operating Officer, H3C Technologies Co., Limited (7)			2007				176,866				—				42,312				—				2,790,411	(8)			3,490	(9)			—				3,013,079
James Hamilton Senior Vice President and President, TippingPoint Division			2007				350,000				—				245,745				727,541				119,802	(10)			—				52,700	(11)			1,495,788
R. Scott Murray Former President and Chief Executive Officer (12)			2007				139,292				—				—				—				—				—				50,128	(13)			189,420
Dr. Marc Willebeek-LeMair Current Senior Vice President and Chief Technology Officer (14)			2007				350,000				—				1,135,386				507,908				119,802	(15)			—				4,688	(16)			2,117,784
Donald M. Halsted, III Former Executive Vice President and Chief Financial Officer (17)			2007				350,000				—				1,031,299				424,086				176,254	(18)			—				6,737	(19)			1,988,376
Robert Y. L. Mao Former Executive Vice President, Corporate Development; Current Director (20)			2007				239,529				—				—				531,018	(21)			91,100	(22)			—				980,060	(23)			1,841,707

The following table shows all plan-based awards granted to the named executive officers during fiscal year 2007. The option awards and the unvested portion of the stock awards identified in the table below are also reported in the “Outstanding Equity Awards at 2007 Fiscal Year-End” table below.

Grants of Plan-Based Awards in 2007 Fiscal Year

																												All Other
																												Stock				All Other Option
																												Awards:				Awards:				Exercise				Grant Date
																												Number of				Number of				or Base				Fair Value of
				Estimated Future Payouts Under Non-												Estimated Future Payouts Under Equity												Shares of				Securities				Price of				Stock and
				Equity Incentive Plan Awards (1)												Incentive Plan Awards												Stock or				Underlying				Option				Options
		Grant		Threshold				Target				Maximum				Threshold				Target				Maximum				Units (2)				Options (3)				Awards				Awards
Name		Date		($)				($)				($)				(#)				(#)				(#)				(#)				(#)				($/Sh)				($) (4)
Edgar Masri		09/05/06															—				—				—				500,000	(5)											2,225,000
		09/05/06																															6,000,000	(6)			4.4500				10,465,800
		09/05/06																															3,000,000				5.3400				4,400,400
		09/05/06																															3,000,000				5.7850				4,046,700
		N/A			325,000				650,000				1,300,000
Dr. Shusheng Zheng		04/03/07			—				204,193				—				—				—				—				200,000				—				—				786,000
Neal D. Goldman		09/05/06
		09/05/06															—				—				—				350,000				—				—				1,557,500
		N/A			121,875				243,750				487,500																				475,000				4.4500				828,543
Dr. Marc Willebeek-LeMair		09/05/06
		09/05/06															—												225,000												1,001,250
		N/A			113,750				227,500				455,000								—				—								475,000				4.4500				828,543
James Hamilton		09/05/06
		09/05/06															—				—				—				225,000												1,001,250
		N/A			113,750				227,500				455,000																				475,000				4.4500				828,543
R. Scott Murray		—			—				—				—				—				—				—				—				—				—				—
Donald M. Halsted, III		09/05/06
		09/05/06																											350,000												1,557,500
		N/A			113,750				227,500				455,000				—				—				—								475,000				4.4500				828,543
Robert Y. L. Mao		09/05/06
		3/28/07															—				—				—				—				1,000,000				4.4500				1,744,300
		N/A			200,000				400,000				800,000																				104,500	(7)			3.9200				206,262

The following table shows all outstanding equity awards held by the named executive officers at the end of fiscal year 2007.

Outstanding Equity Awards at 2007 Fiscal Year-End

										Option Awards												Stock Awards
																														Equity
										Equity																				Incentive				Equity Incentive
										Incentive																				Plan Awards:				Plan Awards:
										Plan Awards:																				Number of				Market or
		Number of								Number of																Market Value				Unearned				Payout Value of
		Securities				Number of				Securities												Number of				of Shares or				Shares, Units				Unearned
		Underlying				Securities				Underlying												Shares or Units				Units of Stock				or Other				Shares, Units or
		Unexercised				Underlying				Unexercised				Option				Option				of Stock that				That Have				Rights That				Other Rights
		Options (#)				Options (#)				Unearned				Exercise				Expiration				Have Not				Not Vested				Have Not				That Have Not
Name		Exercisable				Unexercisable				Options (#)				Price ($)				Date				Vested (#)				($)				Vested (#)				Vested ($)
Edgar Masri			0	(1)			6,000,000				—				4.4500				09/05/13				500,000	(2)			2,345,000				—				—
			0	(1)			3,000,000								5.3400				09/05/13
			0	(1)			3,000,000								5.7850				09/05/13
Dr. Shusheng Zheng			—				—				—				—				—				200,000	(2)			938,000				—				—
Neal D. Goldman			247,500	(1)			82,500				—				6.1900				09/29/10				369,166	(4)			1,731,389				—				—
			60,000	(1)			60,000								4.9900				07/26/11
			37,500	(1)			112,500								3.5800				07/01/12
			50,000	(1)			150,000								3.8900				11/11/12
			0	(1)			475,000								4.4500				09/05/13
Dr. Marc Willebeek-LeMair			6,495	(1)			0				—				0.5400				02/07/12				287,500	(5)			1,348,375				—				—
			200,000	(1)			0								3.6500				02/01/12
			65,000	(1)			0								3.1100				05/16/12
			125,000	(1)			375,000								3.9700				11/02/12
			0	(1)			475,000								4.4500				09/05/13
James Hamilton			25,000	(1)			25,000				—				3.6500				02/01/12				187,500	(3)			879,375				—				—
			250,000	(1)			750,000								3.9700				11/02/12
			0	(1)			475,000								4.4500				09/05/13
R. Scott Murray (7)			—				—				—				—				—				—				—				—
Donald M. Halsted, III			212,500	(1)			212,500				—				4.9900				07/26/11				337,500	(6)			1,582,875				—				—
			56,250	(1)			168,750								3.5800				07/01/12
			0	(1)			475,000								4.4500				09/05/13
Robert Y.L. Mao			250,000	(1)			0				—				4.4500				09/05/13				—				—				—				—
			0	(1)			104,500								3.9200				03/28/14