3COM CORP, DEF 14A, 1995-08-23

3COM CORP
DEF 14A, 1995-08-23
COMPUTER PERIPHERAL EQUIPMENT, NEC

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<PAGE>
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5400 BAYFRONT PLAZA
SANTA CLARA, CALIFORNIA 95052-8145
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 28, 1995

TO THE SHAREHOLDERS:

Please take notice that the Annual Meeting of the Shareholders of 3Com
Corporation, a California corporation (the "Company"), will be held on Thursday,
September 28, 1995, at 10:30 a.m. at the Company's facility at 5400 Bayfront
Plaza, Santa Clara, California for the following purposes:

1. To elect four (4) Class I directors to hold office for a two-year term.

2. To approve an increase in the share reserve under the Company's 1984
Employee Stock Purchase Plan by 3,000,000 shares.

3. To approve an increase in the share reserve under the Company's
Restricted Stock Plan by 250,000 shares.

4. To ratify and approve administrative amendments regarding the granting
of options under the Company's Director Stock Option Plan.

5. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent public accountants for the fiscal year ending May 31, 1996.

6. To transact such other business as may properly come before the meeting.

Shareholders of record at the close of business on July 31, 1995 are
entitled to notice of, and to vote at, this meeting and any adjournments
thereof.

By Order of the Board of Directors,

MARK D. MICHAEL
SECRETARY
IMPORTANT: Please fill in, date, sign and promptly mail the enclosed proxy card
in the accompanying post-paid envelope to assure that your shares are
represented at the meeting. If you attend the meeting, you may choose to vote in
person even if you have previously sent in your proxy card.

Santa Clara, California
August 22, 1995
<PAGE>
3COM CORPORATION
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 28, 1995

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----

<S> <C>
GENERAL INFORMATION........................................................................................ 1

ELECTION OF DIRECTORS...................................................................................... 3

EXECUTIVE COMPENSATION AND OTHER MATTERS................................................................... 6
Executive Compensation................................................................................. 6
Employment and Change of Control Arrangements.......................................................... 8
Compensation of Directors.............................................................................. 8
Compensation Committee Interlocks and Insider Participation............................................ 8
Compliance with Section 16(a) of the Securities Exchange Act of 1934................................... 8
Changes to Benefit Plans............................................................................... 9

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION............................................. 10
Summary of Compensation Policies for Executive Officers................................................ 10

COMPARISON OF SHAREHOLDER RETURN........................................................................... 13

PROPOSAL TO APPROVE AN INCREASE IN THE SHARE RESERVE UNDER THE 3COM CORPORATION 1984 EMPLOYEE STOCK
PURCHASE PLAN BY 3,000,000 SHARES......................................................................... 14
Summary of Provisions of the 1984 Purchase Plan........................................................ 14
Summary of United States Federal Income Tax Consequences
of the 1984 Purchase Plan............................................................................. 15
Vote Required and Board of Directors' Recommendation................................................... 16

PROPOSAL TO APPROVE AN INCREASE IN THE SHARE RESERVE UNDER THE 3COM CORPORATION RESTRICTED STOCK PLAN BY
250,000 SHARES............................................................................................ 16
Summary of Provisions of the Restricted Stock Plan..................................................... 16
Vote Required and Board of Directors' Recommendation................................................... 17

PROPOSAL TO RATIFY AND APPROVE ADMINISTRATIVE AMENDMENTS REGARDING THE NUMBER OF SHARES SUBJECT TO OPTIONS
GRANTED UNDER THE DIRECTOR STOCK OPTION PLAN.............................................................. 18
Summary of Provisions of the Director Plan............................................................. 18
Summary of United States Federal Income Tax Consequences of the Director Plan.......................... 19
Vote Required and Board of Directors' Recommendation................................................... 20

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.............................................. 20

SHAREHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING............................................... 21

TRANSACTION OF OTHER BUSINESS.............................................................................. 21
</TABLE>
<PAGE>
3COM CORPORATION
5400 BAYFRONT PLAZA
SANTA CLARA, CALIFORNIA 95052-8145
PROXY STATEMENT

The accompanying proxy is solicited by the Board of Directors of 3Com
Corporation, a California corporation (the "Company" or "3Com"), for use at the
Annual Meeting of Shareholders to be held on Thursday, September 28, 1995, at
10:30 a.m. local time or any adjournment thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting. The meeting will be held at the
Company's facility at 5400 Bayfront Plaza, Santa Clara, California. The
Company's telephone number is (408) 764-5000. The date of this Proxy Statement
is August 22, 1995, the approximate date on which this Proxy Statement and the
accompanying form of proxy were first sent or given to shareholders.

GENERAL INFORMATION

ANNUAL REPORT. An annual report for the fiscal year ended May 31, 1995 is
enclosed with this Proxy Statement.

VOTING SECURITIES. Only shareholders of record as of the close of business
on July 31, 1995 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were 72,673,221 shares of Common Stock of the
Company issued and outstanding. On July 24, 1995, the Company announced a 2 for
1 stock split (payable in the form of a stock dividend) on each outstanding
share to holders of record on August 4, 1995. The stock-related numbers in this
proxy statement predate the stock split and do not reflect it.

Each holder of shares of Common Stock is entitled to one (1) vote on the
proposals presented in this Proxy Statement for each share of stock held.
Stockholders may vote in person or by proxy. The Company's By-Laws provide that
a majority of all of the shares of the stock entitled to vote, whether present
in person or represented by proxy, shall constitute a quorum for the transaction
of business at the meeting.

SOLICITATION OF PROXIES. The cost of soliciting proxies will be borne by
the Company. In addition to soliciting shareholders by mail through its regular
employees, the Company will request banks and brokers, and other custodians,
nominees and fiduciaries, to solicit their customers who have stock of the
Company registered in the names of such persons and will reimburse them for
their reasonable, out-of-pocket costs. The Company may use the services of its
officers, directors, and others to solicit proxies, personally or by telephone,
without additional compensation. The Company has also retained Corporate
Investor Communications, Inc. to assist in obtaining proxies for the Annual
Meeting from brokers, nominees of shareholders and institutional investors. The
estimated fee for such services, which is not contingent upon the outcome of the
voting, is $6,000, plus out-of-pocket expenses.

VOTING OF PROXIES. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a shareholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted for all nominees
and in favor of the proposals. A shareholder giving a proxy has the power to
revoke his or her proxy, at any time prior to the time it is voted, by delivery
to the Secretary of the Company of a written instrument revoking the proxy or a
duly executed proxy with a later date, or by attending the meeting and voting in
person.

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following
table sets forth certain information, as of July 31, 1995, with respect to the
beneficial ownership of the Company's

1
<PAGE>
Common Stock by (i) each director and director-nominee of the Company, (ii) the
Chief Executive Officer and the four other most highly compensated executive
officers of the Company as of May 31, 1995, and (iii) all executive officers and
directors of the Company as a group.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT OF COMMON
NAME (1) STOCK OUTSTANDING
----------------------------------------------------- ---------------------- -----------------
<S> <C> <C>
James L. Barksdale 60,000 *
Gordon A. Campbell 32,000 *
David W. Dorman 20,000 *
Jean-Louis Gassee 30,000 *
Stephen C. Johnson 112,000 *
Philip C. Kantz 61,502 *
William F. Zuendt 166,000 *
Eric A. Benhamou 699,285 *
Robert J. Finocchio, Jr. 208,776 *
Douglas C. Spreng 160,635 *
Ralph B. Godfrey 36,700 *
Alan J. Kessler 83,460 *
All directors and executive officers
as a group (17 persons) 2,229,744 3.1%
<FN>
------------------------
* Less than 1%.
(1) To the Company's knowledge, except as indicated in the footnotes to this
table, the persons named in the table have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned by
them, subject to community property laws where applicable.
On July 24, 1995, the Company announced a 2 for 1 stock split on the shares
outstanding on August 4, 1995. This table reflects share ownership prior to
the announced stock split.

Includes shares of the Company's Common Stock issuable pursuant to options
exercisable within 60 days of July 31, 1995, including options to acquire
60,000 shares of the Company's Common Stock held by Mr. Barksdale, options
to acquire 32,000 shares held by Mr. Campbell, options to acquire 20,000
shares held by Mr. Dorman, options to acquire 30,000 shares held by Mr.
Gassee, options to acquire 84,000 shares held by Mr. Johnson, options to
acquire 51,974 shares held by Mr. Kantz, options to acquire 94,000 shares
held by Mr. Zuendt, options to acquire 489,792 shares held by Mr. Benhamou,
options to acquire 177,261 shares held by Mr. Finocchio, options to acquire
154,340 shares held by Mr. Spreng, options to acquire 24,116 shares held by
Mr. Godfrey, options to acquire 83,460 shares held by Mr. Kessler, and
options to acquire an aggregate of 1,815,896 shares of the Company's Common
Stock held by directors and executive officers of the Company as a group.
</TABLE>

The following table sets forth certain information, as of July 31, 1995,
with respect to the beneficial ownership of the Company's Common Stock by all
persons known by the Company to be the beneficial owners of more than 5% of the
outstanding Common Stock of the Company.

<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT OF COMMON
NAME AND ADDRESS (1) STOCK OUTSTANDING
------------------------------------------- ---------------------- -----------------
<S> <C> <C>
FMR Corporation 9,791,690 13.5%
82 Devonshire Street
Boston, MA 02109
Investors Research Corporation 6,600,000 9.1%
4500 Main Street
Kansas City, MO 64111
<FN>
------------------------
(1) To the Company's knowledge, the entities named in the table have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them. This information is based upon a
review of Schedule 13G filings made with the SEC during 1995.

On July 24, 1995, the Company announced a 2 for 1 stock split on the shares
outstanding on August 4, 1995. This table reflects share ownership prior to
the announced stock split.
</TABLE>

2
<PAGE>
ELECTION OF DIRECTORS

The number of directors authorized by the Company's By-Laws is a range of
from 6 to 11, with the exact number to be fixed by the Board. The exact number
is currently fixed at 8. The Company's By-Laws provide that the directors shall
be divided into two classes, as nearly equal in number as possible, with the
classes of directors serving for staggered two-year terms. The four Class I
directors to be elected at the 1995 Annual Meeting are to be elected to hold
office until the 1997 annual meeting and until their successors have been
elected and qualified.

The nominees for election at the Annual Meeting of Shareholders to Class I
of the Board of Directors are Mr. Dorman, Mr. Gassee, Mr. Johnson and Mr.
Zuendt. If a nominee declines to serve or becomes unavailable for any reason, or
if a vacancy occurs before the election (although Management knows of no reason
to anticipate that this will occur), the proxies may be voted for such
substitute nominee as Management may designate.

If a quorum is present and voting at the Annual Meeting, the four nominees
for Class I directors receiving the highest number of votes will be elected as
Class I directors. Abstentions and shares held by brokers that are present, but
not voted because the brokers were prohibited from exercising discretionary
authority (i.e., "broker non-votes"), will be counted as present for purposes of
determining if a quorum is present.

The following table sets forth the name and age of each nominee and each
director of the Company whose term of office continues after the Annual Meeting,
the principal occupation of each during the past five years and the period
during which each has served as a director of the Company.

NOMINEES FOR ELECTION AS CLASS I DIRECTORS FOR A TERM EXPIRING IN 1997

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME DURING PAST FIVE YEARS AGE SINCE
----------------------- ------------------------------------------------------------------------ --- -----------
<S> <C> <C> <C>
David W. Dorman Mr. Dorman has been President and Chief Executive Officer of Pacific 41 1995
Bell Corporation since July 1994. Prior to that, he was associated with
US Sprint Corporation for 13 years, during which time he held several
management positions, most recently as President of Sprint Business
Services from 1993 to 1994.
Jean-Louis Gassee Mr. Gassee is the Chairman of the Board and Chief Executive Officer of 51 1993
Be Incorporated, a personal computing technology company in the
development stage, which he founded in October 1990. Previously, Mr.
Gassee held several management positions with Apple Computer, Inc.
("Apple") for 10 years, most recently serving as the President of Apple
Products, the research and development and manufacturing division of
Apple. Prior to joining Apple, Mr. Gassee was President and General
Manager of the French subsidiary of Exxon Corp., held several management
positions with Data General Corporation, and spent six years at
Hewlett-Packard Company. Mr. Gassee is currently also a member of the
board of directors of Cray Computer, Electronics For Imaging, Inc. and
LaserMaster Technologies, Inc.
</TABLE>

3
<PAGE>

INCUMBENT CLASS II DIRECTORS SERVING FOR A TERM EXPIRING IN 1996

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME DURING PAST FIVE YEARS AGE SINCE
------------------------ ------------------------------------------------------------------------ --- -----------
<S> <C> <C> <C>
James L. Barksdale Mr. Barksdale has been the President, CEO and a director of Netscape 52 1987
Communications Corporation since January 1995. Previously, Mr. Barksdale
had been President and Chief Executive Officer of AT&T Wireless Services
since September 1994. Prior to September 1994, Mr. Barksdale had been
employed as the President and Chief Operating Officer of McCaw Cellular
Communications, Inc. since January 1992 and by Federal Express
Corporation since 1979. Mr. Barksdale served as a director of Bridge
Communications, Inc. from April 1986 until that company combined with
the Company in 1987. Mr. Barksdale also serves as a director of The
Promus Companies, Inc.
Eric A. Benhamou Mr. Benhamou has been President and Chief Executive Officer of the 39 1990
Company since April 1990 and September 1990, respectively. Mr. Benhamou
became Chairman of the Board of Directors of the Company in July 1994.
Mr. Benhamou served as the Company's Chief Operating Officer from April
1990 to September 1990. From October 1987 through April 1990, Mr.
Benhamou held various general management positions within the Company.
Prior to that, Mr. Benhamou was one of the founders of Bridge
Communications, Inc. in September 1981, and held various executive
positions in that company in the fields of engineering and product
development, most recently as Vice President, Engineering, until that
company combined with the Company in September 1987. Mr. Benhamou serves
as a director of Cypress Semiconductor, Inc., Legato Systems, Inc. and
Smart Valley, Inc.
</TABLE>

4
<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME DURING PAST FIVE YEARS AGE SINCE
------------------------ ------------------------------------------------------------------------ --- -----------
<S> <C> <C> <C>
Gordon A. Campbell Mr. Campbell was a founder and since 1993 has been President and 51 1990
Chairman of the Board of Techfarm, Inc., a company formed to launch
technology based start-up companies. Mr. Campbell was a founder of Chips
and Technologies, Inc. ("Chips"), a company that designs and distributes
very large scale integrated circuit products, and has served as a
director of Chips since December 1984 and as Chairman of the Board of
Chips since 1993. Mr. Campbell also served as the President and Chief
Executive Officer of Chips from January 1985 to July 1993. Mr. Campbell
was also a founder of Seeq Technology, Inc., and, from January 1981 to
October 1984, he served as that company's President and Chief Executive
Officer. Mr. Campbell also serves as a director of Bell Microproducts,
Inc., Reply Corporation and Scotts Valley Instruments, Inc. and as
Chairman of the Board of Exponential Technology, Inc., Summit Systems,
3D/fx Interactive Inc. and Absolute Time Corporation.
Philip C. Kantz Mr. Kantz has served President and Chief Executive Officer of The 51 1992
Sandros Enterprise, a privately held business and management consulting
firm, since February 1995. Previously, he was President, Chief Executive
Officer and a director of Transcisco Industries, Inc., an industrial
services company, from February 1994 to January 1995. From October 1992
through September 1993, Mr. Kantz served as President and Chief
Executive Officer of Genetrix, Inc., a biotechnology services company.
Mr. Kantz was President and Chief Executive Officer of Itel Containers
International Corporation from 1988 through 1991. Previously, Mr. Kantz
was President of Transportation and Industrial Funding Corporation and
Senior Vice President and General Manager of GE Capital from 1986 to
1988. In 1988, Mr. Kantz instigated the start up of an integrated waste
management corporation, Mine Reclamation Corporation, and currently
serves as Chairman of that company's board of directors. Mr. Kantz also
serves as a director of Blue Cross of California, Falcon Building
Products, Inc., Genetrix, Inc. and Trans Ocean Ltd.
</TABLE>

During the fiscal year ended May 31, 1995, the Board held seven (7)
meetings. Other than Mr. Barksdale, who attended five meetings of the Board, no
director listed above who served on the Board in fiscal year 1995 attended fewer
than 75% of the meetings of the Board and the committee on which he served. The
Board has an Audit Committee and a Compensation Committee. The Board does not
have a standing Nominating Committee.

During the fiscal year ended May 31, 1995, the Company's Audit Committee met
four (4) times. Its current members are Stephen C. Johnson and William F.
Zuendt. The Audit Committee makes recommendations to the Board regarding
engagement of the Company's independent public accountants, approves services
rendered by such accountants, reviews the activities and recommendations of the
Company's internal audit department, and reviews and evaluates the Company's
accounting systems, financial controls and financial personnel.

5
<PAGE>
During the fiscal year ended May 31, 1995, the Compensation Committee met
five (5) times. Its current members are Gordon A. Campbell and Philip C. Kantz.
Eric A. Benhamou serves as an EX OFFICIO member of the Compensation Committee.
The Compensation Committee reviews salaries and other compensation arrangements
for officers and other key employees of the Company, reviews the administration
of the Company's stock option and stock purchase plans, and advises the Board on
general aspects of the Company's compensation and benefit policies. For
additional information concerning the Compensation Committee, see "REPORT OF THE
COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION" and "EXECUTIVE COMPENSATION
AND OTHER MATTERS -- Compensation Committee Interlocks and Insider
Participation."

EXECUTIVE COMPENSATION AND OTHER MATTERS

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Company and the four other most highly
compensated executive officers of the Company as of May 31, 1995:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
AWARDS
ANNUAL COMPENSATION -------------
--------------------------------- SECURITIES
NAME AND FISCAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS COMPENSATION (2)
----------------------------------------------- --------- ----------- --------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Eric A. Benhamou 1995 $ 472,085 $ 49,433 145,600 $ 682
President and Chief 1994 451,629 25,372 200,000 572
Executive Officer 1993 375,000 22,966 220,060 447
Robert J. Finocchio, Jr. 1995 338,335 35,423 87,360 587
Executive Vice President 1994 318,499 18,599 120,000 629
Network Systems Operations 1993 300,000 18,373 139,920 519
Douglas C. Spreng 1995 311,918 32,674 87,360 1,492
Vice President and General Manager Network 1994 272,664 15,890 120,000 1,068
Adapter Division 1993 225,457 13,780 20,000 615
Ralph B. Godfrey 1995 330,778 1,461 43,680 988
Vice President 1994 324,404 0 18,000 302
Channel Sales, Americas (3) 1993 278,270 0 31,260 750
Alan J. Kessler 1995 297,597 1,308 43,680 158
Vice President, Systems Sales North America 1994 169,752 13,252 100,000 162
(4) 1993 191,814 12,084 37,100 215
<FN>
------------------------
(1) Amount shown includes payments made under the Company-wide profit-sharing
plan known as 3SHARE. Under that plan, the Company distributed
approximately six percent (6%), six percent (6%) and eight percent (8%) of
its income before taxes in fiscal 1995, 1994 and 1993, respectively, after
adjustments for certain unusual or non-recurring income or expense items.
The distributions were determined and paid at six month intervals to all
employees worldwide (other than those who are paid commissions), including
executive officers, with the individual payments determined pro rata based
on salary level. In fiscal 1995, amount shown also includes a Company-wide
cash bonus in an amount equal to two days salary.
(2) Represents life insurance premiums.
(3) Mr. Godfrey's salary for 1995, 1994 and 1993 includes commission payments
in the amount of $140,778, $148,864 and $103,270, respectively.
(4) Mr. Kessler's salary for 1995 and 1994 includes commission payments in the
amount of $127,597 and $63,893, respectively.
</TABLE>

6
<PAGE>
The following table provides information concerning grants of options to
purchase the Company's Common Stock made during the fiscal year ended May 31,
1995 to the persons named in the Summary Compensation Table:

OPTION GRANTS IN FISCAL YEAR 1995

<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK PRICE
UNDERLYING GRANTED EXERCISE APPRECIATION FOR OPTION TERM (3)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION --------------------------------------
NAME GRANTED (1) FISCAL 1995 SHARE (2) DATE 5% 10%
----------------------------------- ----------- ------------- ----------- ---------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Eric A. Benhamou 145,600 4.29% $ 26.42 06-01-04 $ 1,948,741 $ 5,381,766
Robert J. Finocchio, Jr. 87,360 2.58% 26.42 06-01-04 1,169,245 3,229,060
Douglas C. Spreng 87,360 2.58% 26.42 06-01-04 1,169,245 3,229,060
Ralph B. Godfrey 43,680 1.29% 26.42 06-01-04 584,622 1,614,530
Alan J. Kessler 43,680 1.29% 26.42 06-01-04 584,622 1,614,530
All Shareholders (4) N/A N/A N/A N/A 2,786,494,077 7,061,523,084
<FN>
------------------------
(1) All of the above options are subject to the terms of the Company's 1983
Stock Option Plan (the "1983 Option Plan") and are exercisable only as they
vest. The options granted to each officer vest and become exercisable in
equal annual increments over a four (4) year period provided the optionee
continues to be employed by the Company.

(2) All options were granted at an exercise price equal to the average of the
fair market values of the Company's Common Stock over a period of ten
trading days beginning on July 11, 1994 and ending on July 22, 1994.

(3) Potential realizable values are net of exercise price, but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation only, based on the Securities and Exchange Commission rules.
No gain to an optionee is possible without an increase in stock price,
which will benefit all shareholders commensurably. A zero percent gain in
stock price will result in zero dollars for the optionee. Actual realizable
values, if any, on stock option exercises are dependent on the future
performance of the Common Stock, overall market conditions and the
optionholders' continued employment through the vesting period.

(4) Represents potential appreciation in aggregate shareholder value at the
assumed annual rates of stock price appreciation over a ten-year period
beginning May 31, 1995 based on the number of shares then outstanding, and
using as a base value the $64 per share closing price of 3Com common stock
on that date.
</TABLE>

The following table provides the specified information concerning option
exercises during fiscal year 1995 and the exercisable and unexercisable options
held as of May 31, 1995, by the persons named in the Summary Compensation Table:

AGGREGATED OPTION EXERCISES IN FISCAL
YEAR 1995 AND YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT 5/31/95 OPTIONS AT 5/31/95 (1)
ACQUIRED ON VALUE -------------------------- ------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------------- ----------- ------------- ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Eric A. Benhamou 140,000 $ 5,699,060 378,377 445,697 $ 21,899,078 $ 21,868,927
Robert J. Finocchio, Jr. 210,000 8,334,791 90,441 272,755 5,037,453 13,432,024
Douglas C. Spreng 45,000 1,996,938 79,166 233,194 4,366,368 11,096,767
Ralph B. Godfrey 85,000 3,679,985 9,777 65,285 519,411 2,821,836
Alan J. Kessler 92,693 2,468,238 47,515 143,980 2,841,991 6,943,983
<FN>
------------------------
(1) Based on a fair market value of $64.00 per share as of May 31, 1995, the
closing sale price of the Company's Common Stock on that date as reported
by the NASDAQ National Market System.
</TABLE>

7
<PAGE>
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

Options granted under the 1983 Option Plan contain provisions pursuant to
which outstanding options must either become fully vested and immediately
exercisable prior to a "transfer of control" transaction or must be assumed in
the transaction, and all unexercised options terminate to the extent they are
not assumed upon such "transfer of control" as defined under the 1983 Option
Plan.

Options granted under the 3Com Corporation Director Stock Option Plan (the
"Director Plan") contain provisions pursuant to which all outstanding options
granted under the Director Plan will become fully vested and immediately
exercisable upon a merger or acquisition of the Company where the Company is not
the survivor or upon the sale of substantially all of the assets of the Company.

COMPENSATION OF DIRECTORS

Members of the Board who are not employees of the Company received an annual
retainer during fiscal 1995 as follows: Audit Committee members $13,750,
Compensation Committee members $13,750, others $9,750; plus reimbursement of
travel expenses for travel by members of the Board who reside out of the local
area.

Outside directors receive options to purchase Common Stock pursuant to the
Director Plan. The Director Plan provides for the initial automatic grant of an
option to purchase shares of the Company's Common Stock to each director of the
Company who is not an employee of the Company ("Outside Director"), with a
maximum of 30,000 shares to be subject to each such option (40,000 shares for
the Chairman of the Board). In addition, each Outside Director is automatically
granted an option to purchase shares of the Company's Common Stock upon becoming
a member of the Audit or Compensation Committee, with a maximum of 12,000 shares
to be subject to each such option. The actual number of shares to be subject to
the options granted for Board and committee service are established by the
committee administering the Plan. For the fiscal year ended May 31, 1995, the
options granted to Outside Directors for service on the Board of Directors were
set at 20,000 shares, and 12,000 shares for service on Board committees. All
options have a five year term, are immediately exercisable and vest over two
years so long as the option holder continues to serve on the Board or the
Committee. An additional option to purchase the number of shares of the
Company's Common Stock then established by the committee is automatically
granted to each Outside Director following the vesting in full of the option
previously received.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 1995, Messrs. Campbell, Hancock and Kantz served as members of
the Compensation Committee of the Company's Board of Directors. Mr. Hancock
resigned from the Company's Board of Directors in April 1995. The Board has not
yet filled the vacancy on the Compensation Committee created by Mr. Hancock's
resignation from the Board of Directors.

In October 1993, the Company invested approximately $2 million to purchase
stock in a company (the "subsidiary") founded and controlled by a corporation of
which Mr. Campbell is the controlling shareholder, Chairman of the Board and
President. In October 1994, the Company bought all remaining stock in the
subsidiary from Mr. Campbell's company at a price of $2.2 million, and the
Company became the sole owner of the subsidiary. During the intervening year,
the Company paid the subsidiary approximately $1.0 million under an arms-length
agreement for the Company to buy products and provide related funding. Mr.
Campbell served as acting Chief Executive Officer and a member of the Board of
Directors of the subsidiary during that year, and the subsidiary paid Mr.
Campbell's company a $15,000 per month management fee, plus reimbursement of
costs.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's executive officers, directors and persons who
beneficially own more than 10% of the Company's Common Stock to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission ("SEC"). Such persons are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms filed by such
persons.

8
<PAGE>
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that all filing requirements applicable to the Company's executive officers,
directors and more than 10% shareholders were complied with during 1994.

CHANGES TO BENEFIT PLANS

The Company has proposed an amendment to increase the share reserve under
its 1984 Employee Stock Purchase Plan (the "1984 Purchase Plan") by 3,000,000
shares. Non-employee directors are not eligible to participate in the 1984
Purchase Plan.

The Company has also proposed an amendment to increase the share reserve
under its Restricted Stock Plan (the "Restricted Stock Plan") by 250,000 shares.
Non-employee directors are not eligible to participate in the Restricted Stock
Plan.

The Company has also proposed certain administrative amendments to the
Director Stock Option Plan (the "Director Plan"). Only non-employee directors
are eligible to participate in the Director Plan.

The following table sets forth the number of shares purchased during fiscal
1995 under the 1984 Purchase Plan, and the number of shares that are expected to
be subject to options to be granted under the Director Plan during fiscal 1996,
by, (1) the persons named in the Summary Compensation Table; (2) all current
executive officers as a group; (3) all current directors who are not executive
officers as a group; and (4) all employees, including all officers who are not
executive officers, as a group. No grants of restricted stock were made during
fiscal 1995 under the Restricted Stock Plan. Purchases under the 1984 Purchase
Plan are made at the discretion of the individual employees and grants under the
Restricted Stock Plan are made at the discretion of the Board of Directors.
Accordingly, future purchases under the 1984 Purchase Plan and future grants
under the Restricted Stock Plan are not yet determinable.

NEW PLAN BENEFITS TABLE

<TABLE>
<CAPTION>
DIRECTOR
1984 PURCHASE PLAN STOCK OPTION
------------------------------ PLAN
PURCHASE PRICE -------------
(WEIGHTED AVERAGE NUMBER OF NUMBER OF
NAME AND POSITION PER SHARE) SHARES SHARES (1)
-------------------------------------------------------------------- ----------------- ----------- -------------
<S> <C> <C> <C>
Eric A. Benhamou $ 12.64 3,489 N/A
President and Chief Executive Officer
Robert J. Finocchio, Jr. 12.64 2,651 N/A
Executive Vice President, Network Systems Operations
Ralph B. Godfrey 12.64 2,604 N/A
Vice President, Channel Sales, Americas
Douglas C. Spreng 11.82 2,069 N/A
Vice President and General Manager
Network Adapter Division
Alan J. Kessler 0.00 0 N/A
Vice President, Systems Sales -- North America
Executive Group (10 persons) 14.44 17,727 N/A
Non-Executive Director Group (7 persons) N/A N/A 60,000
Non-Executive Officer Employee Group 14.81 642,443 N/A
<FN>
------------------------
(1) All options granted under the Director Plan will have an exercise price
equal to the fair market value on the date of grant. Assumes grants of
standard options under the Director Plan to Messrs. Dorman, Gassee and
Barksdale.

On July 24, 1995, the Company announced a 2 for 1 stock split on the shares
outstanding on August 4, 1995. For consistency, all share numbers in this
table are denominated in presplit amounts.
</TABLE>

9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

SUMMARY OF COMPENSATION POLICIES FOR EXECUTIVE OFFICERS

The goals of the Company's compensation program are to: (i) enable the
Company to attract, retain and motivate highly-qualified employees and executive
officers who contribute to the long-term success of the Company; (ii) align
compensation with business objectives and performance; and, (iii) align
incentives for executive officers with the interests of shareholders in
maximizing shareholder value. The Company emphasizes pay for performance,
cost-competitiveness and clarity in the communication of performance objectives.
The Company annually reviews its compensation practices by comparing them to
surveys of relevant competitors and sets objective compensation parameters based
on this review. Compensation policies also reflect the competition for executive
talent and the unique challenges and opportunities facing the Company in the
global data networking market.

The Company's compensation program for all employees includes both cash- and
equity-based elements. Because equity-based compensation directly links the
interests of management with the interests of our shareholders, equity-based
compensation is the primary mechanism at the executive officer level for
rewarding contribution to the short- and long-term success of the Company.
Unlike many of its competitors, the Company does not have an individualized
annual cash bonus plan and instead uses a risk-oriented, leveraged periodic
grant of performance-based stock options to reward and motivate performance of
the Company's executive officers.

CASH COMPENSATION

SALARY. The Company sets a base salary range for each executive officer,
including the Chief Executive Officer, by reviewing the base salary for
comparable positions of a broad peer group including companies similar in size
and business who compete with the Company in the recruitment and retention of
senior personnel. Base pay is targeted at the 60th percentile of market on the
basis of external salary data provided to the Company by independent surveys;
individual salaries for each executive officer are set relative to this target
based on sustained individual performance and contribution to the Company's
results. Total compensation, including equity-based compensation, is targeted at
the market average for comparable positions.

CASH PROFIT-SHARING. Executive officers are eligible to participate in the
Company's profit-sharing plan, known as 3SHARE. The Company reserves a varying
percentage of its pre-tax profit for distribution to employees, based on the
view that there should be no payout at low levels of profit and, as the Company
achieves higher levels of profit, a larger percentage should be reserved for the
employee profit sharing plan. Unusual or non-recurring income or expenses may be
excluded in determining pre-tax profit for purposes of 3SHARE. In fiscal year
1995, 3SHARE was designed to yield approximately one month's additional salary
to employees when the Company achieves seventeen to eighteen percent (17-18%)
income before taxes. 3SHARE did not accrue below seven percent (7%) income
before taxes. Under this plan the Company in fiscal year 1995 distributed
approximately six percent (6%) of its income before taxes at six month intervals
to all non-commissioned employees worldwide, including executive officers, with
individual payments determined pro rata based on salary level.

EQUITY-BASED COMPENSATION

Options granted to executive officers are subject to vesting restrictions
that lapse in annual increments to motivate recipients to stay with the Company.
Performance options granted by the Company after the end of a fiscal year at the
then-current fair market value become valuable and exercisable only if the
executive officer continues to serve the Company and the price of the Company's
stock subsequently increases. Initial or "new-hire" options are granted to
executive officers when they first join the Company. Thereafter, additional
options are granted to each executive officer on an annual basis as an equity
bonus if specified individual and Company performance goals

10
<PAGE>
are achieved ("performance options"). The relevant performance goals and the
range of potential option grants are established and communicated at the
beginning of each fiscal year. The amount of actual options granted reflect the
percentage of the Company's and the officer's objectives that are realized.

Based on its policy that equity-based compensation should be the primary
method for aligning incentives with performance and shareholder value, the
Company annually establishes performance goals and the range of potential option
grants for each executive officer. The purpose of using performance options is
to focus the efforts of executive officers on predetermined specific goals and
objectives that are of critical importance to the Company.

The performance options granted to the Company's executive officers in
fiscal year 1995 were based upon the Company's success in attaining specific
financial and operating objectives established for fiscal year 1994 relating to
business process cycle time reduction initiatives, growth in the Company's
internetworking business, operating income performance, revenue, and earnings
per share. Performance options granted in fiscal year 1996 are based on the
fiscal year 1995 goals and objectives which included: overall revenues, revenues
from specific product lines, earnings per share, and operating income. Likewise,
performance options may be granted to the Company's executive officers in fiscal
year 1997 based upon their success in attaining specific financial and operating
objectives established for fiscal year 1996 in the areas of overall revenues,
specific product line revenues, and earnings per share.

Each metric included in the objectives for a year is assigned a weight and a
range of minimum, target and maximum results. The target size of the performance
options offered to specific executive officers is intended to provide a total
compensation opportunity equivalent to positions at the Company's competitors
for available executive talent. Upon completion of the fiscal year, the Company
computes the total weighted result of the fiscal year performance metrics and
multiplies each executive officer's target grant amount by that weighted result
to determine the recommended grant amount, if any. The performance options
granted to the Company's executive officers in fiscal year 1996 are based upon
the Company's success in meeting or exceeding its financial and operational
targets for fiscal year 1995 in the areas described above.

In designing executive compensation for fiscal year 1996, the Company
retained an outside consultant to perform a comprehensive assessment of
compensation for its Chief Executive Officer and to extend such methodology to
other executive officers. The services rendered by the consultant to the
Committee included surveying competitors' practices, assessing the mix of pay
relative to competitive practices, evaluating the linkage between pay and
performance, and recommending compensation strategies.

The Committee has considered the potential impact of Section 162(m) (the
"Section") of the Internal Revenue Code adopted under the federal Revenue
Reconciliation Act of 1993. The Section disallows a tax deduction for any
publicly-held corporation for individual compensation exceeding $1 million in
any taxable year for any of the named executive officers, other than
compensation that is performance-based. Since the targeted cash compensation of
each of the named executive officers is well below the $1 million threshold and
the Company believes that any options granted under the 1983 Option Plan will
meet the requirement of being performance-based under the transition provisions
provided in the regulations under the Section, the Committee concluded that the
Section should not reduce the tax deductions available to the Company and that
no changes to the Company's compensation program were needed in this regard.

CEO COMPENSATION

The Chief Executive Officer's salary and performance stock option grants
follow the policies set forth above. Mr. Benhamou's base annual salary for
fiscal year 1995 of $472,085 reflects his position, duties and responsibilities.
The CEO's salary increase in fiscal year 1995 was based on the Compensation
Committee's evaluation of his performance and the Company's performance. In

11
<PAGE>
addition, Mr. Benhamou received a small cash bonus, which bonus was paid to all
employees. Under the provisions of the Company's profit-sharing plan, Mr.
Benhamou was awarded $45,779. In fiscal year 1995, the Company's performance was
measured against goals for total revenues, product line revenues, earnings per
share and operating income. The performance option for 160,000 shares received
by Mr. Benhamou in fiscal year 1996 was granted based on the Company's fiscal
year 1995 results and the corresponding computation of weighted results for
determination of the option grant amount.

THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS

Gordon A. Campbell
Philip C. Kantz

12
<PAGE>
COMPARISON OF SHAREHOLDER RETURN

Set forth below is a line graph comparing the annual percentage change in
the cumulative total return on the Company's Common Stock with the cumulative
total return of the Standard & Poor's 500 Stock Index and the Standard & Poor's
High Tech Composite Index for the period commencing on May 31, 1990 and ending
on May 31, 1995.

Comparison of Cumulative Total Return From May 31, 1990 through May 31, 1995
(1):
3Com Corporation, Standard & Poor's 500 Stock Index and
the Standard & Poor's High Tech Composite Index
Comparison of Cumulative Total Return from May, 1990 Through May, 1995

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
3COM S&P 500 S&P HIGH TECH COMPOSITE
<S> <C> <C> <C>
1990 100 100 100
1991 63 112 100
1992 85 123 101
1993 196 137 116
1994 342 143 131
1995 931 172 188
</TABLE>

------------------------
(1) Assumes that $100.00 was invested on May 31, 1990 in the Company's Common
Stock and each index, and that all dividends were reinvested. No cash
dividends have been declared on the Company's Common Stock. On August 16,
1994, the Company effected a 2-for-1 stock split (payable in the form of a
stock dividend) on each outstanding share. The Company's cumulative total
return for the fiscal years prior to the stock split have been adjusted to
take into account the stock split. Shareholder returns over the indicated
period should not be considered indicative of future shareholder returns.

13
<PAGE>
PROPOSAL TO APPROVE AN INCREASE IN THE SHARE RESERVE
UNDER THE 3COM CORPORATION 1984 EMPLOYEE STOCK PURCHASE PLAN
BY 3,000,000 SHARES

The Board has approved an increase in the number of shares of Company Common
Stock reserved under the 1984 Employee Stock Purchase Plan (the "1984 Purchase
Plan") by 3,000,000 shares, and the shareholders are being asked to approve the
same increase at the Annual Meeting. As of July 31, 1995, 629,275 shares of
Common Stock (excluding the 3,000,000 shares now proposed for shareholder
approval) were available for future purchases under the 1984 Purchase Plan. The
Board believes that the adoption of this proposal is in the best interests of
the Company for the reasons discussed below.

The Company seeks to attract, motivate and retain talented and enterprising
employees by rewarding performance and encouraging behavior that will improve
the Company's profitability. The Company believes that the 1984 Purchase Plan
plays an important role in achieving these objectives by encouraging broad
employee stock ownership. The Company's primary incentive program is through
equity compensation; the Company does not use any material form of cash bonus or
cash incentive plan, other than profit sharing, for management or key
engineering contributors, nor any form of cash incentive plan for other
employees. This practice is fairly unique among the Company's competitors; most
choose some form of cash bonus or cash/equity compensation mix. However, the
Company believes that equity-based incentive programs for all employees help
ensure a tight link between the interests of the shareholders and the interests
of our employees, and enhance our ability to continue recruiting and retaining
top talent. Management believes that the continued operation of the 1984
Purchase Plan necessitates an increase in the share reserve under the 1984
Purchase Plan.

SUMMARY OF PROVISIONS OF THE 1984 PURCHASE PLAN

The summary of the 1984 Purchase Plan included in this Proxy Statement is
qualified in its entirety by the specific language of the 1984 Purchase Plan, as
amended. Copies of the 1984 Purchase Plan are available to any shareholder upon
request addressed to Mark D. Michael, Vice President, General Counsel and
Secretary, 3Com Corporation, 5400 Bayfront Plaza, Santa Clara, CA 95052-8145.

ADMINISTRATION AND SHARE RESERVE. The 1984 Purchase Plan is administered by
the Board of Directors or a committee of the Board. Since its inception ten
years ago, a total of 7,000,000 shares of the Company's Common Stock have been
reserved for issuance under the 1984 Purchase Plan and 6,370,725 shares have
been issued upon purchase as of July 31, 1995. This proposal seeks shareholder
approval to increase the number of shares reserved for issuance under the 1984
Purchase Plan to 10,000,000 shares.

ELIGIBILITY. Any employee of the Company or any present or future
subsidiary corporation of the Company (including any officer or director who is
also an employee) is eligible to participate in the 1984 Purchase Plan as long
as the employee is customarily employed for at least 20 hours per week. No
person who owns or holds options to purchase, or who as a result of
participation in the 1984 Purchase Plan would own or hold options to purchase,
5% or more of the Company's Common Stock is entitled to participate in the 1984
Purchase Plan. As of May 31, 1995, approximately 1,837 employees participated in
the 1984 Purchase Plan. All employees are eligible to participate in the 1984
Purchase Plan.

PARTICIPATION IN AN OFFERING. Through April 1995, each offering of Common
Stock under the 1984 Purchase Plan (an "Offering") was for a period of
twenty-four months, with a new offering purchase period starting every six
months. In July 1995, the Board amended the 1984 Purchase Plan to provide that
each Offering commencing on or after October 1, 1995 will be for a period of six
months. Offerings under the Plan commence on the first day of October and the
first day of April of each year. Participation in the Plan is limited to
eligible employees who authorize payroll deductions pursuant to the Plan. At
present, such payroll deductions may not exceed 10% of base pay. Once an

14
<PAGE>
employee becomes a participant in the Plan, the employee will automatically
participate in each successive Offering until such time as the employee
withdraws from the 1984 Purchase Plan or the employee's employment terminates.

PURCHASE PRICE. The purchase price per share at which the shares of the
Company's Common Stock are sold under the 1984 Purchase Plan generally will be
equal to 85% of the lesser of the fair market value of the Common Stock on (a)
the first day of the applicable Offering period or (b) the last day of a six
month purchase period.

SHARES PURCHASED. The number of shares of the Company's Common Stock a
participant purchases in each Offering is determined by dividing the total
amount of payroll deductions withheld from the participant's compensation by the
purchase price per share. Participants may not purchase shares of the Company's
Common Stock having a fair market value exceeding $25,000 in any calendar year.
For this purpose, the fair market value of the Company's Common Stock purchased
in a given Offering is determined as of the first day of that Offering.
Furthermore, a participant may not purchase more than 1,000 shares in a single
Offering, although this limit may be adjusted by the Board of Directors from
time to time to reflect fluctuations in the fair market value of the Company's
Common Stock to the extent permitted by law. Any cash not applied to the
purchase of shares is returned to the participant except for cash insufficient
to purchase a single share of the Company's Common Stock at the end of the
Offering.

WITHDRAWAL. A participant may withdraw from an Offering at any time without
affecting his or her eligibility to participate in future Offerings.

AMENDMENT OR TERMINATION. The Board of Directors may at any time amend or
terminate the 1984 Purchase Plan, except that approval of the Company's
shareholders within twelve months of the adoption of such amendment is required
to increase the number of shares authorized for issuance under the Purchase Plan
or to change the designation of corporations whose employees may purchase shares
of the Company's Common Stock under the 1984 Purchase Plan. The 1984 Purchase
Plan will terminate when all of the shares reserved for issuance under the 1984
Purchase Plan have been issued or when earlier terminated by the Board of
Directors.

SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE 1984 PURCHASE
PLAN

The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law of participation in the
1984 Purchase Plan, and does not attempt to describe all potential tax
consequences. Tax consequences are complex and subject to change, and a
taxpayer's particular situation may be such that some variation from the
described rules is applicable. Participants should consult their own tax
advisors prior to the disposition of any shares of Common Stock acquired
pursuant to the 1984 Purchase Plan.

If a participant disposes of shares purchased under the 1984 Purchase Plan
within two years from the first day of the Offering or within one year from the
last day of the Offering (a "disqualifying disposition"), the participant will
realize ordinary income in the year of such disposition equal to the amount by
which the fair market value of the stock on the date the stock was purchased
exceeds the purchase price. The amount of the ordinary income will be added to
the participant's basis in the shares, and any additional gain or resulting loss
recognized on the disposition of the shares will be a capital gain or loss. A
capital gain or loss will be long-term if the participant's holding period is
more than twelve months, otherwise it will be short-term.

If the participant disposes of shares more than two years after the date the
underlying right to purchase shares was granted and more than one year after the
date the stock was purchased, the participant will realize ordinary income in
the year of disposition equal to the lesser of (a) the excess of the fair market
value of the shares on the date of disposition over the purchase price or (b)
15% of the fair market value of the shares on the first day of the Offering in
which those shares were purchased. The amount of any ordinary income will be
added to the participant's basis in the shares, and any

15
<PAGE>
additional gain recognized upon the disposition after such basis adjustment will
be a long-term capital gain. If the fair market value of the shares on the date
of disposition is less than the purchase price, there will be no ordinary income
and any loss recognized will be a long-term capital loss.

If the participant still owns the shares at the time of death, the lesser of
(a) the excess of the fair market value of the shares on the date of death over
the purchase price or (b) 15% of the fair market value of the shares on the
first day of the Offering in which those shares were purchased, will constitute
ordinary income in the year of death.

The Company will be entitled to a deduction in the year of a disqualifying
disposition equal to the amount of ordinary income recognized by the participant
as a result of the disposition. In all other cases, no deduction is allowed to
the Company.

VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION

In accordance with the Company's current By-Laws, the affirmative vote of a
majority of the shares present or represented by proxy and entitled to vote at
the Annual Meeting of Shareholders, at which a quorum representing a majority of
all outstanding shares of Common Stock of the Company is present, either in
person or by proxy, is required for approval of this proposal. Abstentions and
broker non-votes will each be counted as present for purposes of determining the
presence of a quorum. Abstentions and broker non-votes will each have the same
effect as a negative vote.

The Board believes that the proposed amendment to the 1984 Purchase Plan is
in the best interest of the Company and the shareholders for the reasons stated
above. THEREFORE, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THIS PROPOSAL TO INCREASE THE SHARE RESERVE UNDER THE 3COM
CORPORATION 1984 EMPLOYEE STOCK PURCHASE PLAN BY 3,000,000 SHARES.

PROPOSAL TO APPROVE AN INCREASE IN THE SHARE RESERVE
UNDER THE 3COM CORPORATION RESTRICTED STOCK PLAN
BY 250,000 SHARES

The Board has approved an increase in the number of shares of Company Common
Stock reserved under the Restricted Stock Plan by 250,000 shares, and the
shareholders are being asked to approve the same increase at the Annual Meeting.
As of July 31, 1995, 127,210 shares of Common Stock (excluding the 250,000
shares now proposed for shareholder approval) were available for future grants
under the Restricted Stock Plan. The Board believes that the adoption of this
proposal is in the best interests of the Company for the reasons discussed
below.

The Company seeks to attract, motivate and retain talented and enterprising
employees by rewarding performance and encouraging behavior that will improve
the Company's profitability. The Company believes that the Restricted Stock Plan
plays an important role in achieving these objectives. The Company's primary
incentive program is through equity compensation; the Company does not use any
material form of cash bonus or cash incentive plan, other than profit sharing,
for management or key engineering contributors, nor any form of cash incentive
plan for other employees. This practice is fairly unique among the Company's
competitors; most choose some form of cash bonus or cash/equity compensation
mix. However, the Company believes that equity-based incentive programs for all
employees help ensure a tight link between the interests of the shareholders and
the interests of our employees, and enhance our ability to continue recruiting
and retaining top talent. Management believes that the continued operation of
the Restricted Stock Plan necessitates an increase in the share reserve under
the Restricted Stock Plan.

SUMMARY OF PROVISIONS OF THE RESTRICTED STOCK PLAN

The following summary of the Restricted Stock Plan is qualified in its
entirety by the specific language of the Restricted Stock Plan. Copies of the
Restricted Stock Plan are available to any shareholder upon request addressed to
Mark D. Michael, Vice President, General Counsel and Secretary, 3Com
Corporation, 5400 Bayfront Plaza, Santa Clara, California 95052-8145.

16
<PAGE>
ADMINISTRATION AND SHARE RESERVE. The Restricted Stock Plan is administered
by the Board or a committee of the Board. At present, a maximum of 200,000
shares of the Company's Common Stock may be issued under the Restricted Stock
Plan ("Plan Shares") and, as of July 31, 1995, 72,790 Plan Shares have been
issued under the Restricted Stock Plan. This proposal seeks shareholder approval
to increase the number of Plan Shares reserved for issuance to 450,000 shares.

ELIGIBILITY. Key employees of the Company and its present subsidiaries and
future parent, subsidiary and successor corporations (including officers and
directors who are also employees) are eligible to participate in the plan. As of
May 31, 1995, approximately 13 employees had received stock grants under the
Restricted Stock Plan. All employees are eligible to participate in the
Restricted Stock Plan.

GRANT OF PLAN SHARES. The Board, in its sole discretion, will determine
which individuals will have the right to acquire Plan Shares ("Participants")
and the number of shares a Participant may receive. Plan Shares are granted at
no cost to the Participant and are issued on the effective date of a stock grant
agreement executed by the Company and the Participant. The Board has the
authority, subject to the provisions of the Restricted Stock Plan, to vary the
terms of the standard form of stock grant agreement. Each Participant is
required to make adequate provision for foreign, federal and state tax
withholding obligations, if any, of the Company arising upon the transfer of
Plan Shares to the Participant or subsequent events triggering a tax liability
for the Participant.

VESTING. The standard form of stock grant agreement provides that Plan
Shares generally vest in four equal annual installments commencing one year
after the date of grant. In the event a Participant's employment with the
Company is terminated for any reason or if the Participant attempts to dispose
of any unvested Plan Shares, the Company will automatically reacquire at no cost
all such shares which are not vested. To insure that the Plan Shares subject to
the Company's reacquisition right will be available for reacquisition, the
Company may require Participants to deposit such shares with an escrow agent
designated by the Company. The Company will bear the expenses of the escrow.

CHANGE OF CONTROL. In the event of any merger, reorganization, or sale of
substantially all of the Company's assets, in which there is a change of control
of the Company, the Board, in its sole discretion, will either (a) provide that
all Plan Shares shall become fully vested on the date of the change of control,
or (b) arrange with any successor corporation to assume the outstanding stock
grant agreements and substitute its own stock for the Plan Shares held by the
Participants.

AMENDMENT OR TERMINATION. The Board may terminate or amend the Restricted
Stock Plan at any time. However, the rights of a Participant with respect to
Plan Shares granted prior to any such action by the Board may not be impaired
without such Participant's consent. Unless extended by the Board, the Restricted
Stock Plan will terminate on July 9, 2001.

VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION

The Board believes that the proposed amendment to the Restricted Stock Plan
is in the best interest of the Company and the shareholders for the reasons
stated above. THEREFORE, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
"FOR" APPROVAL OF THIS PROPOSAL TO INCREASE THE SHARE RESERVE UNDER THE 3COM
CORPORATION RESTRICTED STOCK PLAN BY 250,000 SHARES.

17
<PAGE>
PROPOSAL TO RATIFY AND APPROVE ADMINISTRATIVE AMENDMENTS
REGARDING THE NUMBER OF SHARES SUBJECT TO OPTIONS
GRANTED UNDER THE DIRECTOR STOCK OPTION PLAN

The Board has approved administrative amendments to the provisions of the
Company's Director Stock Option Plan ("the Director Plan"), which amendments (1)
reflect the 2 for 1 split of the Company's Common Stock which was effective in
August 1994, and revise the Director Plan document to indicate that the maximum
number of shares of Common Stock which may be subject to the options
automatically granted for service on the Board of Directors is 30,000 shares
(40,000 shares for any outside director serving as the Chairman of the Board),
and for service on the Audit Committee or Compensation Committee is 12,000
shares (with such maximum amounts subject to further proportionate adjustment in
the event of stock dividends, subdivisions or combinations of the Company's
Common Stock), (2) clarify that the number of shares of Common Stock that will
be subject to the options automatically granted from time to time will be
established in guidelines adopted by the committee administering the Director
Plan, subject to the maximum amounts provided above, and (3) expressly permit a
director's status as "lead director" (as distinct from Chairman of the Board) to
serve as a category eligible for an option for a different number shares from
the standard grant. This proposal seeks shareholder ratification and approval of
these amendments at the Annual Meeting.

Management believes that the adoption of this proposal is in the best
interests of the Company since it clarifies the manner of operation of the
Director Plan. The Director Plan enables the Company to attract and retain
qualified persons to serve as outside directors by offering them the opportunity
to acquire an equity interest in the Company. Management believes this
opportunity is particularly important since the Company's outside directors
otherwise receive only minimal compensation for their services to the Company.
In addition, management believes that the terms on which this opportunity is
provided to outside directors will help ensure that the size of the option
grants to outside directors is consistent with the Company's other compensation
policies and will further align the interests of the outside directors and the
shareholders.

SUMMARY OF PROVISIONS OF THE DIRECTOR PLAN

The summary of the Director Plan included in this Proxy Statement, which
reflects the proposed amendments discussed above, is qualified in its entirety
by the specific language of the Director Plan, as amended. Copies of the
Director Plan are available to any shareholder upon request addressed to Mark D.
Michael, Vice President, General Counsel and Secretary, 3Com Corporation, 5400
Bayfront Plaza, Santa Clara, CA 95052-8145.

ADMINISTRATION AND SHARE RESERVE. The Director Plan is administered by a
committee of the Board consisting of those directors who are employees of the
Company (the "Committee"). All options granted under the Director Plan are
"nonqualified stock options." Eligible participants are limited to the directors
who are not employees of the Company. A total of 1,000,000 shares of Common
Stock have been reserved for issuance under the Director Plan, subject to
proportionate adjustment in the event of subdivisions or combinations of the
Company's Common Stock, and 916,000 shares have been issued pursuant to the
Director Plan as of July 31, 1995.

OPTION GRANTS. Each outside director is automatically granted an option to
purchase shares of the Company's Common Stock at the first Board meeting
following the date upon which he or she first becomes eligible in an amount
established under the guidelines then in effect as adopted by the Committee. The
maximum number of shares that may be subject to each such option is 30,000
shares, except that if the eligible director is the Chairman of the Board, then
the maximum is 40,000 shares. Each eligible member of the Audit or Compensation
Committees is automatically granted an additional option to purchase shares of
Common Stock at the first Board meeting occurring on or after the date such
member first joins either committee; the maximum number of shares that may be
subject to each option for committee service is 12,000 shares. The maximum
number of shares that may be subject to options granted under the Director Plan,
the numbers of shares to be granted within

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those maximum limits under the Committee's guidelines in effect from time to
time, and the number of shares subject to outstanding options (and the exercise
price of such options), are all subject to proportionate adjustment in the event
of stock dividends, subdivisions or combinations of the Company's Common Stock.
From time to time, but not more than once every six months, the Committee may
establish guidelines to specify the number of shares to be subject to each
automatically adopted option (subject to the maximum limits set forth above),
which guidelines are intended to be in accordance with the Company's other
compensation policies. On each grant date, the number of shares subject to each
option granted for service on the Board of Directors or the Audit or
Compensation Committee, as the case may be, may not vary among outside
directors, except that an outside director who is the Chairman of the Board or
who is designated as the "lead" outside director may be granted an option for
more shares than the other outside directors. During the fiscal year ended May
31, 1995, the guidelines established standard option grant amounts as 20,000
shares for service as an outside director and 12,000 shares for committee
service. For the fiscal year ending May 31, 1996, the guidelines establish the
standard option grant amounts as 15,000 shares for service as an outside
director (increased to 18,000 shares for the "lead" director) and 9,000 shares
for committee service.

TERMS AND CONDITIONS OF OPTIONS. Options granted under the Director Plan
have a per share exercise price equal to the fair market value of a share of the
Company's Common Stock on the date of the option grant. Options are immediately
exercisable, and vest in twenty-four equal monthly increments, so long as the
optionee continues to serve on the Board or the committee. No option is
exercisable beyond five years from the date of grant. Options may be exercised
by payment of the option price (a) in cash or check, (b) by tender of shares of
the Company's Common Stock having a fair market value equal to the option price
or (c) by delivery of a promissory note payable to the Company. During the
lifetime of the optionee, the option may only be exercised by the optionee. In
the event of the death of the optionee, to the extent the option has not yet
been exercised, the optionee's estate or any person who has acquired the right
to exercise the option by bequest or inheritance may exercise the option at any
time within six months following the date of death. Following the vesting in
full of an option previously received, an additional option to purchase shares
of the Company's Common Stock is automatically granted to each eligible
participant in accordance with the option grant provisions described above.

COMPANY REPURCHASE RIGHT. Unless otherwise provided by the Committee,
unvested shares of the Company's Common Stock purchased pursuant to the exercise
of an option granted under the Director Plan may be repurchased by the Company
at the initial purchase price of such unvested shares upon termination of the
optionee's service as a director of the Company for any reason other than death.

AMENDMENT OR TERMINATION. The Board or the Committee generally has the
power to amend, suspend or terminate the Director Plan at any time and to amend
individual options with the approval of the affected optionee to the extent
permitted by governing law, but without the approval of the Company's
shareholders, the Board may not amend the Director Plan to increase the number
of shares which may be issued thereunder or expand the class of persons eligible
to receive options.

SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE DIRECTOR PLAN

The following summary is intended only as a general guide as to the United
States federal income tax consequences under current law with respect to
participation in the Director Plan, and does not attempt to describe all
possible federal or other tax consequences of such participation. The tax
consequences are complex and subject to change, and a taxpayer's particular
situation may be such that some variation of the described rules is applicable.
Optionees should consult their own tax advisors prior to the disposition of any
shares of Common Stock acquired pursuant to the Director Plan.

An optionee will recognize no taxable income at the time a nonqualified
stock option is granted under the Director Plan. The optionee will recognize
ordinary income on the determination date (as

19
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defined below) in an amount equal to the excess of the fair market value on the
determination date of the shares acquired over the option exercise price. The
determination date will be the later of (a) the date on which the nonqualified
stock option is exercised (with respect to the shares acquired), (b) the date on
which the shares acquired vest, or (c) the date on which the sale of the shares
at a profit would no longer subject the optionee to suit under Section 16(b) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (generally,
six months after the date of grant). Notwithstanding the foregoing, if the
determination date is after the exercise date, the optionee may elect pursuant
to Section 83(b) of the Code to have the determination date be the exercise date
by filing an election with the Internal Revenue Service not later than thirty
days after the date the option is exercised.

In general, upon the sale or exchange of shares acquired by the exercise of
a nonqualified stock option, any gain or loss, based on the difference between
the amount realized upon such disposition and the fair market value of the
shares on the determination date, will be taxed as a capital gain or loss. Such
gain or loss will be long-term if the optionee holds the shares for more than
twelve months after the determination date and short-term if the optionee holds
the shares for twelve months or less after the determination date. There are no
federal income tax consequences to the Company upon the grant of a nonqualified
stock option. The Company will generally be entitled to a tax deduction equal to
the amount of ordinary income recognized by the optionee with respect to shares
acquired upon exercise of a nonqualified stock option.

VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION

The Board believes that the proposed amendment to the Director Plan is in
the best interests of the Company and the shareholders for the reasons stated
above. THEREFORE, THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
APPROVAL OF THIS PROPOSAL TO RATIFY AND APPROVE THE ADMINISTRATIVE AMENDMENTS TO
THE DIRECTOR PLAN REGARDING THE NUMBER OF SHARES SUBJECT TO OPTIONS GRANTED
UNDER THE DIRECTOR PLAN.

RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board has selected Deloitte & Touche LLP as the independent public
accountants of the Company for the fiscal year ending May 31, 1996. Deloitte &
Touche LLP has acted in such capacity since its appointment for fiscal year
1980. A representative of Deloitte & Touche LLP will be present at the Annual
Meeting, will be given the opportunity to make a statement, if he or she so
desires, and will be available to respond to appropriate questions.

In the event ratification by the shareholders of the appointment of Deloitte
& Touche LLP as the Company's independent public accountants is not obtained,
the Board will reconsider such appointment.

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<PAGE>
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
FISCAL YEAR ENDING MAY 31, 1996.

SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING

Proposals of shareholders intended to be presented at the next Annual
Meeting of the Shareholders of the Company must be received by the Company at
its offices at 5400 Bayfront Plaza, Santa Clara, California 95052-8145, not
later than April 24, 1996, and satisfy the conditions established by the
Securities and Exchange Commission for shareholder proposals to be included in
the Company's proxy statement for that meeting.

TRANSACTION OF OTHER BUSINESS

At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
as set forth above. If any other matter or matters are properly brought before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.

By Order of the Board of Directors

MARK D. MICHAEL
SECRETARY

August 22, 1995

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<PAGE>

3COM CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS

The undersigned hereby appoints Eric A. Benhamou and Mark D. Michael,
and either of them, as attorneys of the undersigned with full power of
substitution, to vote all shares of stock which the undersigned is entitled
to vote at the Annual Meeting of Shareholders of 3Com Corporation, to be held
at 5400 Bayfront Plaza, Santa Clara, California 95052-8145 on Thursday,
September 28, 1995 at 10:30 a.m., local time, and at any continuation or
adjournment thereof, with all the powers which the undersigned might have if
personally present at the meeting.

The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement, dated August 22, 1995, and a copy of the
Company's 1995 Annual Report to Shareholders. The undersigned hereby
expressly revokes any and all proxies heretofore given or executed by the
undersigned with respect to the shares of stock represented by this Proxy
and, by filing this Proxy with the Secretary of the Company, gives notice of
such revocation.

WHERE NO CONTRARY CHOICE IS INDICATED BY THE SHAREHOLDER, THIS PROXY,
WHEN RETURNED, WILL BE VOTED FOR SUCH PROPOSALS, FOR SUCH NOMINEES AND WITH
DISCRETIONARY AUTHORITY UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE TIME IT IS
VOTED.

<PAGE>

Please mark
/X/ votes as in this
example.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING:

1. ELECTION OF FOUR CLASS I
DIRECTORS TO SERVE A TWO-
YEAR TERM EXPIRING IN 1997

<TABLE>

<S> <C>
Nominees: David W. Dorman, Jean-Louis 2. To approve an increase in the FOR AGAINST ABSTAIN
Gassee, Stephen C. Johnson, share reserve under the / / / / / /
William F. Zuendt Company's 1984 Employee Stock
Purchase Plan by 3,000,000
shares.

FOR WITHHELD 3. To approve an increase in the FOR AGAINST ABSTAIN
/ / / / share reserve under the / / / / / /
Company's Restricted Stock
Plan by 250,000 shares.

4. To approve administrative FOR AGAINST ABSTAIN
amendments to the Director Stock / / / / / /
Option Plan with respect to the
number of shares subject to
automatic option grant.

5. To ratify the appointment of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as / / / / / /
independent public accountants
for the fiscal year ending
May 31, 1996.

/ / _______________________________________
For all nominees except as noted above.

6. With discretionary authority, upon
such other matters as may
properly come before the meeting.

PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.

Please date and sign exactly as your name or
names appear herein. Corporate or
partnership proxies should be signed in full Signature:________________________________ Date:___________
corporate or partnership name by an
authorized person. Persons signing in a
fiduciary capacity should indicate their full
title in such capacity. Signature:________________________________ Date:___________

</TABLE>