3COM CORP, DEF 14A, 1996-08-20

3COM CORP
DEF 14A, 1996-08-20
COMPUTER COMMUNICATIONS EQUIPMENT

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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12

3Com Corporation
------------------------------------------------
(Name of Registrant as Specified in Its Charter)

3Com Corporation
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transactions applies:

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

(2) Aggregate number of securities to which transactions applies:

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

(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

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

(4) Proposed maximum aggregate value of transaction:

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

(5) Total fee paid:

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

/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount previously paid:

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

(2) Form, Schedule or Registration Statement No.:

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

(3) Filing party:

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(4) Date filed:

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<PAGE>

3Com Corporation

5400 Bayfront Plaza
Santa Clara, California 95052-8145

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To
Be Held September 26, 1996

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 26, 1996, at 10:30 a.m. at the Company's facility at 5400
Bayfront Plaza, Building 200, Santa Clara, California for the following
purposes:

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

2. To approve an amendment to the Company's Articles of
Incorporation establishing a par value of $.01 per
share for the Company's Common Stock.

3. To approve an amendment of the 1983 Stock Option Plan
limiting to 1,000,000 the number of shares for which
options may be granted to any employee in any fiscal
year.

4. To ratify the appointment of Deloitte & Touche LLP as
the Company's independent public accountants for the
fiscal year ending May 31, 1997.

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

Shareholders of record at the close of business on July 31,
1996 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

August 20, 1996
Santa Clara, California

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

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.

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

3Com Corporation

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD SEPTEMBER 26, 1996

-----------------------------------------------------
<CAPTION>

TABLE OF CONTENTS Page

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

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

EXECUTIVE COMPENSATION AND OTHER MATTERS ............................................ 7
Executive Compensation ..................................................... 7
Employment and Change of Control Arrangements .............................. 9
Compensation of Directors .................................................. 9
Compensation Committee Interlocks and Insider Participation ................ 10
Section 16(a) Beneficial Ownership Reporting Compliance of the Securities
Exchange Act of 1934 ...................................................... 10
Changes to Benefit Plans ................................................... 10

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION ...................... 12
Summary of Compensation Policies for Executive Officers .................... 12

COMPARISON OF SHAREHOLDER RETURN .................................................... 15

APPROVAL OF AMENDMENT OF ARTICLES OF INCORPORATION TO ESTABLISH A PAR
VALUE FOR THE COMPANY'S COMMON STOCK ................................................ 16
Vote Required and Board of Directors' Recommendation ....................... 16

APPROVAL OF AMENDMENT OF 1983 STOCK OPTION PLAN ..................................... 16
Summary of the Provisions of the 1983 Option Plan .......................... 16
Summary of United States Federal Income Tax Consequences of the 1983
Option Plan ............................................................... 18
Vote Required and Board of Directors' Recommendation ....................... 19

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

SHAREHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING ........................ 20

TRANSACTION OF OTHER BUSINESS ....................................................... 20
</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 26, 1996, 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, Building 200, Santa Clara,
California. The Company's telephone number is (408) 764-5000. The date of this
Proxy Statement is August 20, 1996, 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, 1996
is enclosed with this Proxy Statement.

Voting Securities. Only shareholders of record as of the close of
business on July 31, 1996 will be entitled to vote at the meeting and any
adjournment thereof. As of that date, there were 169,570,302 shares of Common
Stock of the Company issued and outstanding. Shareholders may vote in person or
by proxy.

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.
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, 1996, with
respect to the beneficial ownership of the Company's Common Stock by (i) each
director and director-nominee of the Company, (ii) the Chief Executive Officer,
the four other most highly compensated executive officers of the Company as of
May 31, 1996, and an individual who served as an executive officer during a
portion of the most recent fiscal year but was no longer an executive officer as
of May 31, 1996, and (iii) all executive officers and directors of the Company
as a group.

Percent of
Amount and Nature of Common Stock
Name Beneficial Ownership (1) Outstanding
-------------------------------------------------- --------------------------- ---------------------------

<S> <C> <C>
James L. Barksdale 90,000 *

Gordon A. Campbell 24,000 *

David W. Dorman 40,000 *

Jean-Louis Gassee 90,000 *

Stephen C. Johnson 231,300 *

Philip C. Kantz 150,004 *

William F. Zuendt 330,000 *

Eric A. Benhamou 1,552,104 *

Robert J. Finocchio, Jr. 552,449 *

Ralph B. Godfrey(2) 78,872 *

William G. Marr 79,375 *

Christopher B. Paisley 725,721 *

Douglas L. Spreng 509,587 *

All directors and executive officers as a 5,300,186 3.1%
group (18 persons)

<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.

Includes shares of the Company's Common Stock issuable pursuant to
options exercisable within 60 days of July 31, 1996, including options
to acquire 90,000 shares of the Company's Common Stock held by Mr.
Barksdale, options to acquire 24,000 shares held by Mr. Campbell,
options to acquire 40,000 shares held by Mr. Dorman, options to acquire
90,000 shares held by Mr. Gassee, options to acquire 216,000 shares
held by Mr. Johnson, options to acquire 140,948 shares held by Mr.
Kantz, options to acquire 166,000 shares held by Mr. Zuendt, options to
acquire 1,132,548 shares held by Mr. Benhamou, options to acquire
487,032 shares held by Mr. Finocchio, options to acquire 55,094 shares
held by Mr. Godfrey, options to acquire 69,375 shares held by Mr. Marr
and 10,000 restricted shares subject to vesting held by Mr. Marr,
options to acquire 495,360 shares held by Mr. Spreng, options to
acquire 650,720 shares held by Mr. Paisley, and options to acquire an
aggregate of 4,472,416 shares of the Company's Common Stock and 16,000
restricted shares of Common Stock subject to vesting held by directors
and executive officers of the Company as a group.

(2) Mr. Godfrey ceased to be an executive officer as of July 1, 1995, but
remained an employee of the Company thereafter.
</FN>
</TABLE>

2
<PAGE>
<TABLE>

The following table sets forth certain information, as of July 31,
1996, 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.

Amount and Nature of Percent of
Name and Address Beneficial Ownership (1) Common Stock Outstanding
- ------------------------------- ------------------------------ --------------------------------

<S> <C> <C>
Twentieth Century Companies, Inc. 12,500,000 7.4%
4500 Main Street
P.O. Box 418210
Kansas City, MO 64141-9210

<FN>

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

(1) To the Company's knowledge, the entity named in the table and a
wholly-owned subsidiary have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned.

This information is based upon a review of Schedule 13G filings made
with the SEC during 1996.
</FN>
</TABLE>

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 II
directors to be elected at the 1996 Annual Meeting are to be elected to hold
office until the 1998 annual meeting and until their successors have been
elected and qualified.

The nominees for election at the Annual Meeting of Shareholders to
Class II of the Board of Directors are Mr. Barksdale, Mr. Benhamou, Mr. Campbell
and Mr. Kantz. 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 II directors receiving the highest number of votes will be
elected as Class II 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.

<PAGE>

Nominees for Election as Class II Directors for a Term Expiring in 1998

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 53 1987
of Netscape 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 Harrahs Entertainment
Corporation, @ Home Corporation and Robert Mondavi
Corporation.

Eric A. Benhamou Mr. Benhamou has been President and Chief Executive 40 1990
Officer of the 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.

Gordon A. Campbell Mr. Campbell is the founder and since 1993 has been 52 1990
President and Chairman of the Board of Techfarm, Inc., a
company formed to launch technology based start-up
companies. Mr. Campbell was the founder of Chips and
Technologies, Inc. ("Chips"), a company that designs and
distributes very large scale integrated circuit products,
and served as a director of Chips from December
1984 and as Chairman of the Board of Chips until
November 1995. 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., 3D/fx
Interactive Inc., Absolute Time Corporation, and
Resonate, Inc.

<PAGE>

Philip C. Kantz Mr. Kantz has served as President, Chief Operating 52 1992
Officer and a director of Trans Ocean Ltd., a privately
held transportation equipment leasing company, since
October 1995. He also has served as President and Chief
Executive Officer of The 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 service 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 the Transportation and Industrial Funding Corporation
and Senior Vice President and General Manager of GE
Capital from 1986 to 1988. Mr. Kantz also serves as a
director of Falcon Building Products, Inc., Genetrix, Inc.,
ParcPlace-Digitalk, Inc., Search Systems Corporation, and
Mine Reclamation Corporation.

Incumbent Class I Directors serving for a Term expiring in 1997

Principal Occupation Director
Name During Past Five Years Age Since
- ----------------------- ---------------------------------------------------------------- ------ -----------
David W. Dorman Mr. Dorman has been President and Chief Executive 42 1995
Officer of Pacific Bell Corporation since July 1994 and
Chairman of the Board of that company since March
1996. 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 52 1993
Executive Officer of 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 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
Corporation, held several management positions with Data
General Corporation, and spent six years at Hewlett-
Packard Company. Mr. Gassee is also a director of
Electronics For Imaging, Inc. and LaserMaster
Technologies, Inc.

<PAGE>

Stephen C. Johnson Mr. Johnson was a founder and has been President and 54 1989
Chief Executive Officer of Komag, Incorporated, a
manufacturer of Winchester disk media, since 1983. Mr.
Johnson served as a director of the Company from June
1982 to September 1987; he stepped down from the
board when the Company combined with Bridge
Communications, Inc. and returned to the board in 1989.
Mr. Johnson also serves as a director of Komag,
Incorporated and Uniphase Corporation.

William F. Zuendt Mr. Zuendt is President and Chief Operating Officer of 49 1988
Wells Fargo & Company, a bank holding company, and
of Wells Fargo Bank. He joined Wells Fargo in 1973.
Mr. Zuendt is also a director of Wells Fargo & Company
and a trustee of Golden Gate University.
</TABLE>

During the fiscal year ended May 31, 1996, the Board held eight (8)
meetings. 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, 1996, 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.

During the fiscal year ended May 31, 1996, the Compensation Committee
met four (4) 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."

<PAGE>

EXECUTIVE COMPENSATION AND OTHER MATTERS

Executive Compensation
<TABLE>

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, 1996, and an
individual who served as an executive officer during a portion of the most
recent fiscal year but was no longer an executive officer as of May 31, 1996:

SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
------------------- Awards
------------
Securities
Name and Fiscal Underlying All Other
Principal Position Year Salary Bonus(1) Options(2) Compensation(3)
------------------ ------ ------ -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Eric A. Benhamou 1996 $ 589,583 $ 34,684 320,000 1,090
President and Chief 1995 472,085 49,433 291,200 682
Executive Officer 1994 451,629 25,372 400,000 572

Robert J. Finocchio, Jr. 1996 395,000 23,241 192,000 911
Executive Vice President 1995 338,335 35,423 174,720 587
Network Systems 1994 318,499 18,599 240,000 629
Operations

Ralph B. Godfrey 1996 378,932 2,421 96,000 1,599
Vice President Americas(4) 1995 330,778 1,461 87,360 988
1994 324,404 0 36,000 302

William G. Marr 1996 367,197 12,908 240,000 1,422
Executive Vice President 1995 N/A N/A N/A N/A
Worldwide Sales 1994 N/A N/A N/A N/A

Douglas C. Spreng 1996 356,250 20,849 192,000 1,753
Executive Vice President 1995 311,918 32,674 174,720 1,492
and General Manager 1994 272,664 15,890 240,000 1,068
Personal Connectivity
Operations

Christopher B. Paisley 1996 283,333 16,625 144,000 475
Vice President Finance and 1995 263,751 27,614 145,600 436
Chief Financial Officer 1994 248,342 14,496 200,000 401
<FN>

- -----------------------------------------------------
(1) Amount shown includes payments made under the Company-wide
profit-sharing plan known as 3Share. Under that plan, the Company
distributed approximately three percent (3%), six percent (6%) and six
percent (6%) of its income before taxes in fiscal 1996, 1995 and 1994,
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 year 1995, amount shown also includes a Company-wide cash bonus
in an amount equal to two days salary.

(2) Amounts shown reflect the 2-for-1 stock split (payable in the form of a
stock dividend) effected in August 1994 and the 2-for-1 stock split
(payable in the form of a stock dividend) effected in August 1995.

(3) Represents life insurance premiums.

(4) Mr. Godfrey's salary for 1996, 1995 and 1994 includes commission
payments in the amount of $147,932, $140,778 and $148,864 respectively.
Mr. Godfrey ceased to be an executive officer of the Company as of July
1, 1995, but remained an employee of the Company throughout fiscal
year 1996.
</FN>
</TABLE>

7
<PAGE>
<TABLE>

The following table provides information concerning grants of options
to purchase the Company's Common Stock made during the fiscal year ended May 31,
1996 to the persons named in the Summary Compensation Table:
<CAPTION>

OPTION GRANTS IN FISCAL YEAR 1996

Potential Realizable
Value at
Assumed Annual Rates
% of Total of Stock
Number of Options Price Appreciation for
Securities Granted Option Term(3)
Underlying Employees Exercise ------------------------------------
Options in Fiscal Price Per Expiration
Name Granted(1) 1996 Share(2) Date 5% 10%
- ---------------------- ----------- ----------- -------- ---------- ------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Eric A. Benhamou 320,000 5.22% $35.78 06-01-05 $ 7,305,499 $ 18,251,183

Robert J. Finocchio, 192,000 3.13% $35.78 06-01-05 4,383,299 10,950,710
Jr.

Ralph B. Godfrey 96,000 1.57% $35.78 06-01-05 2,191,650 5,475,355

William G. Marr 240,000 3.91% $32.63 06-05-05 4,924,245 12,479,003

Christopher B. 144,000 2.35% $35.78 06-01-05 3,287,474 8,213,032
Paisley

Douglas C. Spreng 192,000 3.13% $35.78 06-01-05 4,383,299 10,950,710

All Shareholders(4) N/A N/A N/A N/A 5,228,239,769 13,249,386,080
<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. With the exception of the options granted to Mr. Marr, 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. The options granted to Mr.
Marr vest and become exercisable in equal monthly increments over a
four (4) year period, provided Mr. Marr continues to be employed by the
Company.

(2) All options with the exception of those granted to Mr. Marr, 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 14, 1995 and ending on July 27, 1995. The options
granted to Mr. Marr were granted at an exercise price equal to the
closing price of the Company's Common Stock on the date he began
employment with the Company.

(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.

8
<PAGE>

(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, 1996 based on the number of shares then outstanding,
and using as a base value the $49.25 per share closing price of 3Com
common stock on that date.
</FN>
</TABLE>
<TABLE>

The following table provides the specified information concerning
option exercises during fiscal year 1996 and the exercisable and unexercisable
options held as of May 31, 1996, by the persons named in the Summary
Compensation Table:

AGGREGATED OPTION EXERCISES IN FISCAL
YEAR 1996 AND YEAR-END OPTION VALUES

Shares Value of Unexercised
Acquired Number of Unexercised In-the-Money
on Value Options at 5/31/96 Options at 5/31/96(1)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------------- ----------- -------------- ------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Eric A. Benhamou 280,000 $11,386,041 839,718 848,430 $ 37,496,062 $ 25,827,074

Robert J. Finocchio, Jr. 90,000 3,666,291 315,392 513,000 13,724,616 15,678,562

Ralph B. Godfrey 68,600 2,689,146 2,951 174,573 131,647 4,221,545

William G. Marr 0 0 51,875 188,125 862,422 3,127,578

Christopher B. Paisley 100,000 4,041,875 481,470 400,050 21,737,433 12,320,355

Douglas C. Spreng 30,000 1,384,688 333,680 453,040 14,539,811 12,905,412

<FN>
- -----------------------------------------------------

(1) Based on a fair market value of $49.25 per share as of May 31, 1996,
the closing sale price of the Company's Common Stock on that date as
reported by the NASDAQ National Market System.
</FN>
</TABLE>

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 year 1996 as follows: Lead member of the Board
$20,000, Audit Committee members $18,000, Compensation Committee members
$18,000, others $15,000; 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

<PAGE>

Director"), with a maximum of 30,000 shares to be subject to each such option
(or 36,000 shares for the "lead" director). 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 18,000 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, 1996, the options granted to Outside Directors for service on the Board
of Directors were set at 30,000 shares, and 18,000 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 year 1996, Messrs. Campbell and Kantz served as members of
the Compensation Committee of the Company's Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance 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.

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
1996.

Changes to Benefit Plans

Option Plan. The Company has proposed the approval of an amendment of
the Company's 1983 Stock Option Plan to limit to 1,000,000 the number of shares
for which options may be granted to any employee in any fiscal year.

The following table sets forth grants of stock options received during
fiscal year 1996 under the 1983 Option Plan to (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.
Grants under the 1983 Option Plan are made at the discretion of the Board of
Directors. Accordingly, future grants under the 1983 Option Plan are not yet
determinable.

NEW PLAN BENEFITS TABLE

3Com Corporation
1983 Stock Option Plan
--------------------------------------------------------------
Exercise Price Number of
Name and Position (weighted average per share)(1) Shares
- -------------------------------------------------------- -------------------------------------- -------------------
<S> <C> <C>
Eric A. Benhamou $ 35.78 320,000
President and Chief Executive Officer

Robert J. Finocchio, Jr. 35.78 192,000
Executive Vice President Network Systems
Operations

Ralph B. Godfrey 35.78 96,000
Vice President Americas

William G. Marr 32.63 240,000
Executive Vice President Worldwide Sales

Christopher B. Paisley 35.78 144,000
Vice President Finance and Chief Financial
Officer

Douglas C. Spreng 35.78 192,000
Executive Vice President and General Manager
Personal Connectivity Operations

Executive Group (11 persons) 35.54 1,826,000

Non-Executive Director Group (7 persons) N/A N/A

Non-Executive Officer Employee Group 0(2) 0

<FN>
- -----------------------------------------------------

(1) All options granted to named executive officers with the exception of
those granted to Mr. Marr, 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 14, 1995 and ending
on July 27, 1995. These grants represent incentive awards based on
success in attaining performance objectives established for the prior
fiscal year. The options granted to Mr. Marr represent a new-hire
option grant and were granted at an exercise price equal to the closing
price of the Company's Common Stock on the date he began employment
with the Company.

(2) No options were granted to non-executive officer employees in fiscal
year 1996 under the 1983 Stock Option Plan; options are instead granted
to such employees under the 1994 Stock Option Plan, in which
participation is limited to non-executive officer employees. Under the
1994 Stock Option Plan, options for 4,095,128 shares were granted to
non-executive officer employees in fiscal year 1996 at an average price
of $41.81. All grants had a per share exercise price equal to the fair
market value of the Company's common stock on the date of grant. These
figures reflect the weighted average of new-hire and other option
grants occurring at different times throughout the year.

</FN>
</TABLE>

<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 paying 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 related income or expenses may be excluded in determining pre-tax
profit for purposes of 3Share. In fiscal year 1996, 3Share was designed to yield
approximately one month's additional salary to employees when the Company
achieves twenty to twenty one percent (20-21%) income before taxes. 3Share did
not accrue below thirteen percent (13%) income before taxes. Under this plan the
Company in fiscal year 1996 distributed approximately three percent (3%) 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

12
<PAGE>

as an equity bonus if specified individual and Company performance goals 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 1997 were based upon the Company's success in attaining
specific financial and operating objectives established for fiscal year 1996
relating to sales growth rate, growth in the Company's system sales, earnings
per share, and network access sales. Likewise, performance options may be
granted to the Company's executive officers in fiscal year 1998 based upon their
success in attaining specific financial and operating objectives established for
fiscal year 1997 in the growth of overall revenue, systems revenue, 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
1997 are based upon the Company's success in meeting or exceeding its financial
and operational targets for fiscal year 1996 in the areas described above.

In designing executive compensation for fiscal year 1997, 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.

<PAGE>

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 1996 of $589,583 reflects his position, duties and
responsibilities. The CEO's salary increase in fiscal year 1996 was based on the
Compensation Committee's evaluation of his performance and the Company's
performance. In 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 $34,684. In fiscal year 1996, the Company's
performance was measured against goals for total revenues, product line
revenues, earnings per share and operating income. The performance option for
150,000 shares received by Mr. Benhamou in fiscal year 1997 was granted based on
the Company's fiscal year 1996 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

<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, 1991 and ending
on May 31, 1996.

Comparison of Cumulative Total Return From May 31, 1991 through May 31,
1996 (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, 1991 Through May, 1996

[GRAPHIC CHART GOES HERE]

DATA POINTS FOR PERFORMANCE GRAPH

1991 1992 1993 1994 1995 1996

3Com $100 $136 $313 $545 $1484 $2284

S&P 500 $100 $110 $123 $128 $154 $197

S&P High Tech $100 $101 $116 $130 $188 $249
Composite

- --------

1 Assumes that $100.00 was invested on May 31, 1991 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. On August 4,
1995, the Company effected a further 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 splits. Shareholder
returns over the indicated period should not be considered indicative
of future shareholder returns.

<PAGE>

APPROVAL OF AMENDMENT OF ARTICLES OF INCORPORATION TO ESTABLISH A PAR
VALUE FOR THE COMPANY'S COMMON STOCK

The Board is proposing an amendment to the Company's Articles of
Incorporation to establish a par value for the Company's Common Stock of $.01
per share. Currently, the Company's Common Stock has no established par value.
However, the Board believes that the Company is being subjected to higher
franchise taxes in certain states as a result of the fact that the Company's
Common Stock currently has no par value. Recent stock splits by the Company have
increased the amount of these taxes. The proposed amendment is expected to
reduce annual taxes for the Company by nearly $60,000. The Board believes that
the establishment of a par value of $.01 per share will reduce franchise taxes
owed to these states and is consistent with modern corporate practice.

Vote Required and Board of Directors' Recommendation

The affirmative vote of a majority of all outstanding shares of Common
Stock entitled to vote is required for approval of this proposal. Abstentions
and broker non-votes will each have the same effect as a negative vote.

The Company believes that the proposed amendment to the Articles of
Incorporation 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 AMEND THE COMPANY'S
ARTICLES OF INCORPORATION TO ESTABLISH A PAR VALUE FOR THE COMPANY'S COMMON
STOCK OF $.01 PER SHARE.

APPROVAL OF AMENDMENT OF 1983 STOCK OPTION PLAN

The Company's 1983 Stock Option Plan (the "1983 Plan") was adopted by
the Board of Directors and approved by the shareholders of the company in 1983.
Effective January 1, 1994, the Internal Revenue Code ("the Code") was amended by
the adoption of Section 162(m) of the Code to limit the amount of compensation
paid to a corporation's chief executive officer and four other most highly
compensated officers that the corporation may deduct as an expense for federal
income tax purposes. To enable the Company to continue to deduct in full all
amounts of ordinary income recognized by its executive officers in connection
with options granted under the 1983 Plan, the Board of Directors is proposing to
limit to 1,000,000 the maximum number of shares for which options may be granted
to any employee in any fiscal year (the "Grant Limit").

The shareholders are now being asked to approve the amendment of the
1983 Plan to establish the Grant Limit. The Board of Directors believes that the
establishment of the Grant Limit may result in favorable income tax consequences
for the Company.

Summary of the Provisions of the 1983 Option Plan

The summary of the 1983 Option Plan included in this Proxy Statement is
qualified in its entirety by the specific language of the 1983 Option Plan, as
amended. Copies of the 1983 Option 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. As of July 31, 1996,
3,387,619 shares were available to support future option grants under the 1983
Plan. The 1983 Plan is administered by the Board or a committee appointed by the
Board. Options granted may be either "incentive stock options," that is, options
which meet the requirements of Section 422 of the Code, or "nonqualified stock
options," that is, options which do not meet those requirements. Virtually all
options granted in recent years and virtually all options currently outstanding
under the 1983 Option Plan are nonqualified stock options.

<PAGE>

Eligibility. All employees of the Company and its present
subsidiaries and future parent and/or subsidiary corporations (including
officers and directors who are also employees) may be granted options under the
1983 Option Plan. As of July 31, 1996, approximately 5,520 employees were
eligible to participate in the 1983 Option Plan. All options must be granted, if
at all, not later than July 8, 2002. An employee may not be granted incentive
stock options which would permit that employee to acquire stock with a fair
market value (determined at the date of grant) in excess of $100,000 in any
calendar year by exercising such options when they first become exercisable.

Terms of Exercise. Incentive stock options granted under the
1983 Option Plan must have an option price equal to at least 100% of the fair
market value of the Common Stock of the Company, as determined by the Board, on
the date that the option is granted. Nonqualified stock options granted under
the 1983 Option Plan must have an option price equal to at least 85% of the fair
market value of the Common Stock of the Company, as determined by the Board, on
the date that the option is granted. As of July 31, 1996, the closing sale price
for the Company's Common Stock as reported by the NASDAQ National Market System
was $39.375. The Board may set the time or times within which each option is
exercisable or the event or events upon the occurrence of which all or a portion
of each option shall be exercisable and the term of each option (which may not
exceed ten years). An option may either be immediately exercisable in its
entirety (subject to the Company's right to repurchase any unvested shares
acquired upon exercise) or may be exercisable to the extent that shares subject
to the option have vested, or may become exercisable as otherwise specified by
the Board. Options generally terminate after ten years from the date of grant.
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 outstanding options which are not exercised or assumed will
terminate effective as of the date of a transfer of control of the Company, as
defined for purposes of options granted under the 1983 Option Plan.

Payment. Options may be exercised by payment of the option
price (a) in cash, by check or other cash equivalent, (b) by tender of shares of
Common Stock of the Company which (i) have a fair market value equal to the
option price and (ii) have been owned by the optionee for more than one year or
were not acquired either directly or indirectly from the Company, or (c) by such
other consideration, including either promissory notes representing not more
than ninety-five percent (95%) of the option price or retained proceeds from an
immediate sale of some or all of the shares acquired upon the option's exercise,
as the Board may approve at the time the option is granted. The optionee is
obligated to make adequate provision for federal and state tax withholding
obligations, if any, of the Company relating to the exercise of the option or
subsequent events triggering a tax liability for the optionee.

Non-Assignment of Options. During the lifetime of the
optionee, an option is exercisable only by the optionee. An option may not be
transferred or assigned, except by will or the laws of descent and distribution.

Vesting. Options generally become exercisable only as they
vest, or provide that shares purchased by an optionee upon the exercise of an
option, to the extent they are unvested, are subject to repurchase by the
Company until they have vested. Most options granted to new employees under the
1983 Option Plan use the following four-year vesting schedule: during the first
six months from the date of grant, none of the shares subject to option are
vested, one-eighth of the shares vest at the end of the first six months, and
the remaining shares vest ratably on a monthly basis over a forty-two month
period. Most options granted to employees, other than new employees, vest
ratably on a monthly basis over a forty-eight month period. Unless otherwise
provided by the Board, any unvested shares of the Company's Common Stock
obtained upon exercise of an option may be repurchased by the Company within
sixty days upon termination of the optionee's employment for any reason (or
exercise of an option by the terminated employee, if later) or upon the
attempted transfer of such unvested shares, at the price paid for those shares
by the optionee.

17
<PAGE>

Termination of Employment. The standard forms of stock option
agreement under the 1983 Option Plan generally provide that in the event an
optionee ceases to be an employee of the Company for any reason, except death or
disability, the optionee may exercise the option (to the extent exercisable on
the date of termination of employment) within three months after the date of
termination of employment. In the event of termination of employment due to
death or disability, an optionee (or his or her legal representative) may
exercise the option within twelve months after such date of termination of
employment (to the extent exercisable on that date).

Amendment or Termination. The Board may terminate or amend the
1983 Option Plan at any time, but, without the approval of the Company's
shareholders, the Board may not amend the 1983 Option Plan to increase the
number of shares subject to the plan, to change the class of persons eligible to
receive options under the plan, to reduce the exercise price at which options
may be granted, or to extend the time periods during which options may be
granted or exercised.

Summary of United States Federal Income Tax Consequences of the 1983 Option 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 1983 Option Plan and does not attempt to describe all
potential tax consequences. Accordingly, a taxpayer's situation may be such that
some variation from the described rules is applicable. Optionees should consult
their own tax advisors prior to the exercise of any option and prior to the
disposition of any shares acquired upon the exercise of an option.

Incentive Stock Options. Options designated as incentive stock
options are intended to fall within the provisions of Section 422 of the Code.
An optionee recognizes no taxable income as the result of the grant or exercise
of an option.

For optionees who neither dispose of their shares for two years
following the date the option was granted nor within one year following exercise
of the option, the gain on sale of the shares (which is defined to be the
difference between the sale price and the purchase price of the shares) will be
taxed as long-term capital gain. If an optionee is entitled to long-term capital
gain treatment upon a sale of the stock, the Company will not be entitled to any
deduction for federal income tax purposes. If an optionee disposes of shares
within two years after the date of grant or within one year from the date of
exercise (a "disqualifying disposition"), the difference between the option
price and the fair market value of the shares on the date of exercise (not to
exceed the gain realized on the sale, if the sale is at a loss) will be taxed at
ordinary income rates at the time of disposition. Any gain in excess of that
amount will be a capital gain. If a loss is recognized, there will be no
ordinary income, and such loss will be a capital loss. A capital gain or loss
will be long-term if the optionee has held the shares more than twelve months.
Any ordinary income recognized by the optionee upon the disposition of stock
should be deductible by the Company for federal income tax purposes.

The difference between the option price and the fair market value of
the shares on the date of exercise of an incentive stock option may be tax
preference income subject to an alternative minimum tax which is to be paid if
such tax exceeds the regular tax for the year. Special rules may apply with
respect to certain subsequent sales of the shares in a disqualifying
disposition, certain basis adjustments for purposes of computing the alternative
minimum taxable income on a subsequent sale of the shares, and tax credits which
may arise with respect to optionees subject to the alternative minimum tax in
years beginning on or after January 1, 1987.

Nonqualified Stock Options. Nonqualified stock options have no
special tax status. An optionee generally recognizes no taxable income as the
result of the grant of such an option. Upon exercise of an option, the optionee
normally recognizes ordinary income in the amount of the difference between the
option price and the fair market value of the stock on that date. If the
optionee is an employee, such ordinary income generally is subject to
withholding of income and employment

<PAGE>

taxes. Upon the sale of stock acquired by the exercise of a nonqualified stock
option, any gain or loss, based on the difference between the sale price and the
fair market value on the date of recognition of income, will be taxed as a
capital gain or loss. A capital gain or loss will be long-term if the optionee
has held the shares more than twelve months from the date of recognition of
income. The Company should be entitled to a deduction equal to the amount of
ordinary income recognized by the optionee as a result of the exercise of the
option.

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 Company believes that the proposed amendment to the 1983 Option
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 LIMIT TO 1,000,000 THE MAXIMUM NUMBER OF
SHARES FOR WHICH OPTIONS MAY BE GRANTED TO ANY EMPLOYEE IN ANY FISCAL YEAR.

<PAGE>

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, 1997. 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.

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 22, 1997 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 20, 1996

<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, Building 200, Santa Clara, California 95052-8145 on
Thursday, September 26 1996 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 20, 1996, and a copy of the Company's
1996 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.

21
<PAGE>
<TABLE>

<CAPTION>
APPENDIX A
<S> <C> <C>
- -------
Please mark
X votes as in this
example.
- -------

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

1. ELECTION OF FOUR CLASS II
DIRECTORS TO SERVE A TWO-
YEAR TERM EXPIRING IN 1998

Nominees: 2. To approve an amendment to the FOR AGAINST ABSTAIN
Company's Articles of
James L. Barksdale Incorporation establishing a par [ ] [ ] [ ]
Eric A. Benhamou value of $.01 per share for the
Gordon A. Campbell Company's Common Stock.
Philip C. Kantz

FOR WITHHELD 3. To approve an amendment of the
1983 Stock Option Plan limiting FOR AGAINST ABSTAIN
[ ] [ ] the number of shares for
which options may be granted [ ] [ ] [ ]
to any employee in any fiscal
year.

4. To ratify the appointment of FOR AGAINST ABSTAIN
Deloitte & Touche LLP as
independent public accountants [ ] [ ] [ ]
for the fiscal year ending May 31,
[ ] 1997.
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For all nominees except as noted above.
5. 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 Signature: Date:
partnership proxies should be signed in full -------------------------------------- ----------------------
corporate or partnership name by an
authorized person. Persons signing in a
fiduciary capacity should indicate their Signature: Date:
full title in such capacity. -------------------------------------- ----------------------

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