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3com Corp · PREM14A · On 10/22/07

Filed On 10/22/07 9:44pm ET   ·   SEC File 0-12867   ·   Accession Number 950135-7-6319

  in   Show  and 
  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

10/23/07  3com Corp                         PREM14A                1:153                                    Bowne of Boston I..01/FA

Preliminary Proxy Solicitation Material -- Merger or Acquisition   ·   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     3com                                                HTML    914K 


Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page
"Table of Contents
"Summary
"Questions and Answers About the Special Meeting and the Merger
"Cautionary Statement Concerning Forward-Looking Information
"The Parties to the Merger
"The Special Meeting
"Time, Place and Purpose of the Special Meeting
"Record Date and Quorum
"Vote Required for Approval
"Proxies and Revocation
"Adjournments and Postponements
"Rights of Stockholders Who Object to the Merger
"Solicitation of Proxies
"Questions and Additional Information
"Availability of Documents
"The Merger
"Background of the Merger
"Reasons for the Merger; Recommendation of Our Board of Directors
"Opinion of Financial Advisor
"Projected Financial information
"Financing of the Merger
"Limited Guarantee
"Interests of the Company s Directors and Executive Officers in the Merger
"Material U.S. Federal Income Tax Consequences of the Merger to Our Stockholders
"Regulatory Approvals
"Delisting and Deregistration of Common Stock
"Litigation Related to the Merger
"Amendment to 3Com s Rights Plan
"The Merger Agreement
"Effective Time; Marketing Period
"Merger Consideration
"Treatment of Options and Other Awards
"Payment for the Shares of Common Stock
"Representations and Warranties
"Conduct of Business Prior to Closing
"Agreement to Use Reasonable Best Efforts
"Financing
"Conditions to the Merger
"Restrictions on Solicitations of Other Offers
"Recommendation Withdrawal/Termination in Connection with a Superior Proposal
"Termination of the Merger Agreement
"Termination Fees and Expenses
"Remedies
"Indemnification and Insurance
"Amendment, Extension and Waiver
"Market Price of Common Stock
"Security Ownership of Certain Beneficial Owners and Management
"Dissenters Rights of Appraisal
"Submission of Stockholder Proposals
"Householding of Special Meeting Materials
"Where You Can Find More Information

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  prem14a  

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
 
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
 
Filed by the Registrant þ
 
Filed by a Party other than the Registrant o
 
Check the appropriate box:
 
þ  Preliminary Proxy Statement
o  Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
o  Definitive Proxy Statement
o  Definitive Additional Materials
o  Soliciting Material Pursuant to Section 240.14a-12
 
3COM CORPORATION
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
o   No fee required.
 
þ   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
  (1)   Title of each class of securities to which transaction applies:
 
Common Stock, par value $0.01 per share of 3Com Corporation (the “Common Stock”).
 
  (2)   Aggregate number of securities to which transaction applies:
 
401,995,350 shares of Common Stock; 48,842,182 options to purchase Common Stock; and restricted stock units with respect to 6,602,618 shares of Common Stock.
 
  (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):
 
The maximum aggregate value was determined based upon the sum of (A) 401,995,350 shares of Common Stock multiplied by $5.30 per share; (B) options to purchase 48,842,182 shares of Common Stock multiplied by $.0746 (which is the difference between $5.30 and the weighted average exercise price of $5.2254 per share); and (C) restricted stock units with respect to 6,602,618 shares of Common Stock multiplied by $5.30 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying 0.0000307 by the sum of the preceding sentence.
 
  (4)   Proposed maximum aggregate value of transaction:
 
$2,169,212,857
 
  (5)   Total fee paid:
 
$66,595
 
o   Fee paid previously with preliminary materials.
 
o   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:
 
 
  (4)   Date Filed:
 



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3Com Corporation
350 Campus Drive
Marlborough, Massachusetts 01752-3064
          , 2007
 
Dear Stockholder:
 
The board of directors of 3Com Corporation, a Delaware corporation, has unanimously approved a merger agreement providing for the acquisition of 3Com by Diamond II Holdings, Inc., an entity formed by investment vehicles sponsored by Bain Capital Partners, LLC. If the merger contemplated by the merger agreement is completed, you will be entitled to receive $5.30 in cash, without interest and less any applicable withholding tax, for each share of 3Com common stock owned by you immediately prior to completion of the merger (unless you have properly and validly perfected your statutory rights of appraisal with respect to the merger).
 
At a special meeting of our stockholders, you will be asked to consider and vote on a proposal to adopt the merger agreement. After careful consideration, our board of directors has unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and determined that the merger is fair to and in the best interests of 3Com and its stockholders. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO ADOPT THE MERGER AGREEMENT.
 
The special meeting will be held on          , at      a.m. local time, at our headquarters, 350 Campus Drive, Marlborough, Massachusetts 01752-3064. Notice of the special meeting and the related proxy statement are enclosed.
 
The attached proxy statement provides you with detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the proxy statement. We encourage you to read the entire proxy statement and the merger agreement carefully. You may also obtain more information about 3Com from documents we have filed with the Securities and Exchange Commission.
 
Your vote is very important regardless of the number of shares you own. We cannot complete the merger unless the holders of a majority of outstanding shares of common stock that are entitled to vote at the special meeting vote in favor of the proposal to adopt the merger agreement. The failure of any stockholder to vote on the proposal to adopt the merger agreement will have the same effect as a vote against the proposal to adopt the merger agreement.
 
Whether or not you plan to attend the special meeting, please complete, date, sign and return, as promptly as possible, the attached proxy in the accompanying reply envelope, or submit your proxy by telephone or the Internet. If you have Internet access, we encourage you to record your vote via the Internet. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you hold your shares through a broker or other nominee, you should follow the procedures provided by your broker or nominee.
 
Thank you in advance for your cooperation and continued support.
 
Sincerely,
 
Edgar Masri
President and Chief Executive Officer
 
Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.
 
The proxy statement is dated          , 2007, and is first being mailed to stockholders on or about          , 2007.



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3Com Corporation
350 Campus Drive
Marlborough, Massachusetts 01752-3064
 
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On          , 2007
 
To the Stockholders of 3Com Corporation:
 
A special meeting of stockholders of 3Com Corporation, a Delaware corporation (the “Company”), will be held on          , at      a.m. local time, at the Company’s headquarters, 350 Campus Drive, Marlborough, Massachusetts 01752-3064, for the following purposes:
 
1. Adoption of the Merger Agreement.   To consider and vote on a proposal to adopt the Agreement and Plan of Merger (the “Merger Agreement”), dated as of September 28, 2007, by and among the Company, Diamond II Holdings, Inc., (“Newco”) and Diamond II Acquisition Corp., an indirect wholly-owned subsidiary of Newco (“Merger Sub”). A copy of the Merger Agreement is attached as Annex A to the attached proxy statement. Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”) and each outstanding share of the Company’s common stock, par value $0.01 per share (the “Common Stock”) (other than shares owned by Newco, Merger Sub or the Company, or by any direct or indirect wholly-owned subsidiary of Newco, Merger Sub or the Company, in each case immediately prior to the effective time of the Merger, and shares held by stockholders, if any, who have properly and validly perfected statutory rights of appraisal with respect to the Merger), will be converted into the right to receive $5.30 in cash, without interest and less any applicable withholding tax.
 
2. Adjournment or Postponement of the Special Meeting.  To approve the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the Merger Agreement.
 
Only stockholders of record of the Company’s Common Stock as of the close of business on          , 2007 are entitled to notice of and to vote at the special meeting or at any adjournment or postponement of the special meeting. All stockholders of record are cordially invited to attend the special meeting in person.
 
Your vote is very important, regardless of the number of shares of Common Stock you own.  Adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the shares of Common Stock outstanding on          , the record date of the special meeting. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy or submit your proxy by telephone or the Internet prior to the special meeting to ensure that your shares will be represented at the special meeting if you are unable to attend. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote FOR” the adoption of the Merger Agreement.
 
If you fail to vote by proxy or in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote against the adoption of the Merger Agreement.  If you are a stockholder of record, voting in person at the special meeting will revoke any proxy previously submitted. If you hold your shares through a bank, broker or other custodian, you must obtain a legal proxy from such custodian in order to vote in person at the special meeting. If your shares are held by a bank or broker, please bring to the special meeting your statement evidencing your beneficial ownership of Common Stock and photo identification.
 
Stockholders of the Company who do not vote in favor of the proposal to adopt the Merger Agreement will have the right to seek appraisal of the fair value of their shares of Common Stock if the Merger is completed, but only if they properly and validly perfect statutory rights of appraisal before the vote is taken on the Merger Agreement and comply with all requirements of Delaware law, which are summarized in the attached proxy statement.



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WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY IN THE ACCOMPANYING REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU HAVE INTERNET ACCESS, WE ENCOURAGE YOU TO RECORD YOUR VOTE VIA THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON.
 
By Order of the Board of Directors,
 
Neal D. Goldman
Executive Vice President, Chief Administrative and Legal Officer and Secretary
 
Marlborough, Massachusetts
          , 2007



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Annex A          Agreement and Plan of Merger
   
Annex B          Opinion of Goldman, Sachs & Co.
   
Annex C          Section 262 of the Delaware General Corporation Law
   


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PROXY STATEMENT
 
References to “3Com,” the “Company,” “we,” “our” or “us” in this proxy statement refer to 3Com Corporation and its subsidiaries unless otherwise indicated by context.
 
 SUMMARY
 
The following summary highlights selected information in this proxy statement and may not contain all the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of that topic. See “Where You Can Find More Information” beginning on page 72.
 
Proposal
 
You are being asked to vote on a proposal to adopt the Agreement and Plan of Merger, dated September 28, 2007 (the “Merger Agreement”), by and among the Company, Diamond II Holdings, Inc. (“Newco”) and Diamond II Acquisition Corp. (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub will merge with and into 3Com and 3Com will be the surviving corporation and an indirect wholly-owned subsidiary of Newco (the “Merger”). In the event that there are not sufficient votes at the time of the special meeting to adopt the Merger Agreement, the stockholders may be asked to vote on a proposal to adjourn or postpone the special meeting to solicit additional proxies. See “The Special Meeting” beginning on page 15.
 
The Parties to the Merger (Page 14)
 
3Com is a Delaware corporation with its headquarters in Marlborough, Massachusetts. 3Com was incorporated in California on June 4, 1979 and reincorporated in Delaware on June 12, 1997. 3Com is a provider of secure, converged voice and data networking solutions for enterprises of all sizes. 3Com offers a broad line of products backed by world class sales, service and support, which excel at delivering business value for its customers. 3Com also includes H3C Technologies Co., Limited (“H3C”), a China-based provider of network infrastructure products that provides cost-effective product development. Through its TippingPoint division, 3Com is a provider of network-based intrusion prevention systems that deliver in-depth application protection, infrastructure protection and performance protection. 3Com is organized into three primary business groups: H3C, the data and voice business unit (“DVBU”) and TippingPoint.
 
Newco was formed in anticipation of the Merger by investment vehicles sponsored by Bain Capital Partners, LLC (“Bain Capital”). Newco was formed solely for the purpose of acquiring 3Com and has not engaged in any business except for activities incidental to its formation and as contemplated by the Merger Agreement. At the effective time of the Merger, Newco will be majority-owned and controlled by investment vehicles sponsored by Bain Capital. Bain Capital is part of Bain Capital, LLC, a U.S.-based, global private investment firm whose affiliates manage several pools of capital including private equity, venture capital public equity and leverage debt assets with more than $60 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 300 companies around the world, including numerous investments in the software and technology sectors such as Ameritrade, Applied Systems, Aspect Development, Chip PAC, DoubleClick, Epsilon Data Management, Experian, Gartner Group, Integrated Circuit Systems, MCI, NXP, SunGard Data Systems, U.S. Internetworking and UGS. At the effective time of the merger, an affiliate of Huawei Technologies Co. Ltd. will make a non-controlling, minority investment in Newco (the affiliate of Huawei Technologies Co. Ltd. together with Bain Capital, the “Investors”).
 
Merger Sub was formed by investment vehicles sponsored by Bain Capital solely for the purpose of completing the proposed Merger. Merger Sub is an indirect, wholly-owned subsidiary of Newco and has not engaged in any business except for activities incidental to its formation and as contemplated by the Merger Agreement. Subject to the terms of the Merger Agreement, at the effective time, Merger Sub will merge with



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and into 3Com. Upon the consummation of the proposed Merger, Merger Sub will cease to exist, 3Com will continue as the Surviving Corporation and will become an indirect wholly-owned subsidiary of Newco.
 
The Merger (Page 18)
 
The Merger Agreement provides that Merger Sub will merge with and into 3Com. In the Merger, each outstanding share of 3Com common stock, par value $0.01 per share (the “Common Stock”) that is outstanding immediately prior to the effective time of the Merger, (other than shares owned by Newco, Merger Sub or 3Com, or by any direct or indirect wholly-owned subsidiary of Newco, Merger Sub or 3Com, and shares held by stockholders, if any, who have properly and validly perfected statutory rights of appraisal with respect to the Merger) will be converted into the right to receive $5.30 in cash, without interest and less any applicable withholding tax, which we refer to in this proxy statement as the merger consideration.
 
Effects of the Merger (Page 48)
 
If the Merger is completed, you will be entitled to receive $5.30 in cash, without interest and less any applicable withholding taxes, for each share of Common Stock that you own immediately prior to the completion of the Merger, unless you have properly and validly perfected your statutory rights of appraisal with respect to the Merger. As a result of the Merger, 3Com will cease to be an independent, publicly traded company. You will not own any shares of the Surviving Corporation and will not have any rights as a stockholder.
 
The Special Meeting (Page 15)
 
Time, Place and Date (Page 15)
 
The special meeting will be held on          , at   a.m. local time, at the Company’s headquarters, 350 Campus Drive, Marlborough, Massachusetts 01752-3064.
 
Purpose (Page 15)
 
You will be asked to consider and vote upon a proposal to adopt the Merger Agreement, pursuant to which Merger Sub will merge with and into the Company.
 
Record Date and Quorum (Page 15)
 
You are entitled to vote at the special meeting if you owned shares of Common Stock at the close of business on          , the record date for the special meeting. You will have one vote for each share of Common Stock that you owned as of the close of business on the record date. As of the close of business on the record date, there were           shares of Common Stock outstanding and entitled to vote. A majority of the shares of Common Stock issued and outstanding on the record date represented at the special meeting in person or by a duly authorized and properly completed proxy constitutes a quorum for the purpose of considering the proposals.
 
Vote Required (Page 15)
 
Completion of the Merger requires the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of shares of Common Stock outstanding on          , the record date for special meeting. Failure to vote your shares of Common Stock by proxy or in person or an abstention will have the same effect as voting against approval of the Merger Agreement. Approval of the proposal to adjourn or postpone the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies requires the affirmative vote of a majority of the votes cast by the holders of all Common Stock present in person or represented by proxy at the special meeting and entitled to vote on the matter. Failure to vote your shares of our Common Stock or an abstention will have no effect on the approval of the proposal to adjourn or postpone the special meeting.


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Common Stock Ownership of Directors and Executive Officers (Page 15)
 
As of the close of business on the record date, the directors and executive officers of 3Com held in the aggregate approximately     % of the shares of Common Stock entitled to be voted at the special meeting. In the aggregate, these shares represent     % of the votes necessary to approve the proposal to adopt the Merger Agreement at the special meeting.
 
Voting and Proxies (Page 16)
 
Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, the Internet, by returning the enclosed proxy card by mail, or by voting in person by appearing at the special meeting. If your shares of Common Stock are held in “street name” by your broker, you should instruct your broker on how to vote your shares of Common Stock using the instructions provided by your broker. If you do not provide your broker with instructions, your shares of Common Stock will not be voted and that will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. The persons named in the attached proxy will also have discretionary authority to vote on any proposals to adjourn or postpone the special meeting.
 
Revocability of Proxy (Page 16)
 
Any stockholder of record who executes and returns a proxy card (or submits a proxy via telephone or the Internet) may revoke the proxy at any time before it is voted at the special meeting in any one of the following ways:
 
  •  by notifying our Secretary, Neal D. Goldman, at 350 Campus Drive, Marlborough, Massachusetts 01752-3064;
 
  •  by attending the special meeting and voting in person (your attendance at the special meeting will not, by itself, revoke your proxy; you must vote in person at the special meeting);
 
  •  by submitting a later-dated proxy card; or
 
  •  if you voted by telephone or the Internet, by voting a second time by telephone or Internet.
 
If you hold your shares through a broker, bank or other nominee and you have instructed a broker, bank or other nominee to vote your shares of Common Stock, follow the directions received from your broker, bank or other nominee to change your vote.
 
Treatment of Options and Other Awards (Page 48)
 
Stock Options.  Immediately prior to the effective time of the Merger, except as otherwise agreed to by the holder and Newco, all outstanding options to purchase Common Stock under the Company’s equity incentive plans will become fully vested. All such options not exercised prior to the Merger will be cancelled and converted into the right to receive a cash payment equal to the number of shares of Common Stock underlying the options multiplied by the amount (if any) by which $5.30 exceeds the exercise price, without interest and less any applicable withholding taxes.
 
Restricted Stock.  Immediately prior to the effective time of the Merger, except as otherwise agreed by a holder and Newco, all shares of restricted stock will vest and those shares will be cancelled and converted into the right to receive a cash payment equal to the number of shares of restricted stock multiplied by $5.30, without interest and less any applicable withholding taxes.
 
Restricted Stock Units.  Immediately prior to the effective time of the Merger, except as otherwise agreed by a holder and Newco, all restricted stock units will vest and settle through the issuance of shares of Common Stock and thereafter be treated in the same manner as restricted stock.
 
Employee Stock Purchase Plan.  Prior to the consummation of the Merger, the then-current offering period under our Employee Stock Purchase Plan will be terminated and all funds in each participant’s account will be applied toward the purchase of shares of Common Stock on the terms and conditions set forth under


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our Employee Stock Purchase Plan. Thereafter, those shares will be entitled to receive the merger consideration on the same basis as other shares of Common Stock. All amounts withheld by us on behalf of participants in our Employee Stock Purchase Plan that have not been used to purchase Common Stock prior to the effective time of the Merger will be returned to the participants without interest pursuant to the terms of our Employee Stock Purchase Plan.
 
Recommendation of Our Board of Directors (Page 25)
 
Our board of directors, at a meeting duly called and held at which all directors were present, unanimously (i) determined that the terms of the Merger are fair and in the best interests of the Company and its stockholders and declared it advisable to enter into the Merger Agreement providing for the merger of Merger Sub with and into the Company, in accordance with the Delaware General Corporation Law (“DGCL”), upon the terms and subject to the conditions set forth in the Merger Agreement, (ii) approved the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, in accordance with the DGCL, upon the terms and conditions contained in the Merger Agreement and (iii) resolved to recommend that the stockholders of the Company adopt the Merger Agreement, in accordance with the applicable provisions of the DGCL. The board of directors unanimously recommends that our stockholders vote “FOR” the proposal to adopt the Merger Agreement and “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.
 
In reaching its decision, our board of directors evaluated a variety of business, financial and market factors and consulted with our management team and legal and financial advisors. See “The Merger — Reasons for the Merger; Recommendation of Our Board of Directors” beginning on page 25.
 
Interests of the Company’s Directors and Executive Officers in the Merger (Page 38)
 
In considering the recommendation of the board of directors, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, your interests as a stockholder and that may present actual or potential conflicts of interest, including the following:
 
  •  our directors and executive officers will receive cash consideration for their vested and unvested stock options, restricted stock and restricted stock units in connection with the Merger;
 
  •  each of our current executive officers is a party to a management retention agreement (or with respect to Mr. Masri, his employment agreement) that provides certain severance payments and benefits in the case of the executive officer’s termination of employment under certain circumstances following a change of control;
 
  •  the Merger Agreement provides for indemnification arrangements for each of our current and former directors and executive officers that will continue for six (6) years following the effective time of the Merger as well as insurance coverage covering such director or executive officer’s service to the Company as a director or executive officer; and
 
  •  although no agreements have been entered into as of the date of this proxy statement, it is expected that a number of our executive officers will remain after the Merger is completed and such executive officers may enter into new arrangements with the Investors or their affiliates regarding employment with the Surviving Corporation or the right to purchase or participate in the equity of the Surviving Corporation.
 
The board of directors was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the Merger Agreement and the Merger and the recommendation that our stockholders vote in favor of the proposal to adopt the Merger Agreement.
 
Opinion of Goldman, Sachs & Co. (Page 27)
 
Our board of directors considered the financial analyses and opinion of Goldman, Sachs & Co. (“Goldman Sachs”), delivered orally to our board of directors and subsequently confirmed in writing, to the


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effect that, as of September 28, 2007, and based upon and subject to the factors and assumptions set forth therein, the $5.30 per share in cash to be received by the holders of shares of Common Stock pursuant to the Merger Agreement was fair from a financial point of view to such holders. The full text of the written opinion of Goldman Sachs, dated September 28, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B and is incorporated in this proxy statement by reference. Goldman Sachs provided its opinion for the information and assistance of our board of directors in connection with its consideration of the Merger. The Goldman Sachs opinion does not constitute a recommendation as to how any holder of shares of Common Stock should vote with respect to the adoption of the Merger Agreement or any other matter. Pursuant to an engagement letter between 3Com and Goldman Sachs, 3Com has agreed to pay Goldman Sachs a transaction fee equal to approximately $24 million, the principal portion of which is payable upon completion of the Merger.
 
Financing (Page 35)
 
The aggregate amount of funds necessary to complete the Merger is anticipated to be approximately $2.54 billion. These payments are expected to be funded by Newco and Merger Sub with a combination of equity contributions by the Investors, debt financing obtained by Merger Sub and made available to Merger Sub and certain newly formed wholly-owned subsidiaries of 3Com, and, to the extent available, cash of 3Com. Newco and Merger Sub have obtained equity and debt financing commitments described below in connection with the transactions contemplated by the Merger Agreement.
 
Merger Sub has obtained debt financing commitments of up to an aggregate of $1.2 billion consisting of (i) commitments from Citibank N.A., Hong Kong Branch, UBS AG, Singapore Branch, The Hongkong and Shanghai Banking Corporation Limited, ABN Amro Bank N.V. and Bank of China (Hong Kong) Limited to provide debt financing in the form of senior secured facilities consisting of (A) a term loan facility in the aggregate principal amount of up to $750 million and (B) a revolving facility in an aggregate principal amount of $50 million and (ii) commitments from UBS AG, Singapore Branch, Citibank, N.A. and The Hongkong and Shanghai Banking Corporation Limited to provide debt financing in the form of a bridge loan facility with a maturity of one year in an aggregate principal amount of up to $400 million.
 
Regulatory Approvals (Page 45)
 
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the rules promulgated thereunder by the Federal Trade Commission (“FTC”), provides that transactions such as the Merger may not be completed until notification and report forms have been filed with the FTC and the Antitrust Division of the Department of Justice (“DOJ”) and the applicable waiting period has expired or been terminated. 3Com and Newco have filed notification and report forms under the HSR Act with the FTC and the Antitrust Division of the DOJ, and the applicable waiting period has not yet expired or been terminated.
 
The Merger is also subject to review by the governmental authorities of various other jurisdictions under the antitrust laws of those jurisdictions.
 
The parties have agreed to make a joint voluntary filing of the transaction with the Committee on Foreign Investment in the United States (“CFIUS”).
 
Except for these filings and the filing of a certificate of merger in Delaware at or before the effective date of the Merger, we are unaware of any material federal, state or foreign regulatory requirements or approvals required for the execution of the Merger Agreement or completion of the Merger.
 
Procedure for Receiving Merger Consideration (Page 49)
 
Promptly following the effective time of the Merger, a payment agent will mail a letter of transmittal and instructions to you and the other 3Com stockholders. The letter of transmittal will tell you how to surrender your stock certificates in exchange for the merger consideration. You should not return your stock


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certificates with the proxy card, and you should return your stock certificates with the letter of transmittal.
 
Material United States Federal Income Tax Consequences (Page 44)
 
The exchange of shares of Common Stock for cash pursuant to the Merger Agreement generally will be a taxable transaction for U.S. federal income tax purposes. Stockholders who exchange their shares of Common Stock in the Merger will generally recognize gain or loss in an amount equal to the difference, if any, between the cash received in the Merger and their adjusted tax basis in their shares of Common Stock surrendered. Because individual circumstances may differ, we urge you to consult your tax advisor for a complete analysis of the effect of the Merger on your federal, state and local and/or foreign taxes.
 
Conditions to the Merger (Page 56)
 
Before we can complete the Merger, a number of conditions must be satisfied. These include:
 
  •  the adoption of the Merger Agreement by our stockholders;
 
  •  the expiration or termination of the waiting periods under the HSR Act and the antitrust laws of various other jurisdictions;
 
  •  the absence of laws, governmental judgments or orders that have the effect of enjoining or otherwise prohibiting the consummation of the Merger;
 
  •  performance by each of the parties of material obligations under the Merger Agreement in all material respects;
 
  •  the accuracy of the representations and warranties of each of the parties to the Merger Agreement, subject to the materiality standards set forth in the Merger Agreement and described in “The Merger Agreement — Conditions to the Merger” beginning on page 56;
 
  •  the delivery of closing certificates by each of the parties with respect to the satisfaction of the conditions relating to its representations and warranties and material obligations; and
 
  •  the absence of an event or occurrence following the execution of the Merger Agreement that is continuing that has had or is reasonably expected to have a “Material Adverse Effect.”
 
Restrictions on Solicitations of Other Offers (Page 57)
 
The Merger Agreement restricts our ability to solicit, engage in or encourage discussions or negotiations with a third party regarding specified transactions regarding the Company and to provide information about the Company to any third party. Notwithstanding these restrictions, under certain limited circumstances required for our board to comply with its fiduciary duties, our board may respond to a bona fide unsolicited alternative acquisition proposal or terminate the Merger Agreement and enter into an agreement with respect to a superior proposal after paying a termination fee.
 
Termination of the Merger Agreement (Page 59)
 
The Merger Agreement may be terminated at any time prior to the consummation of the Merger, whether before or after stockholder approval has been obtained:
 
  •  By mutual agreement of 3Com and Newco;
 
  •  By either 3Com or Newco if:
 
  •  the Merger is not consummated by April 28, 2008 (the “Termination Date”), provided that the terminating party has not taken any action or failed to take any action in breach of the Merger Agreement which was the principal cause of or resulted in the failure of any of the conditions of the Merger to be satisfied by such date;


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  •  a final, non-appealable law, governmental judgments or order has been enacted, issued, promulgated or granted and is in effect that prohibits or enjoins or otherwise prevents the consummation of the Merger and the terminating party has used reasonable best efforts to appeal such order, is not in breach of the Merger Agreement and has not taken or failed to take any action in breach of the Merger Agreement that was the principal cause of, or resulted in, the passage of such law or issuance of such order;
 
  •  our stockholders do not adopt the Merger Agreement at the special meeting or any adjournment or postponement thereof, provided that the Company may not terminate the Merger Agreement if it has materially violated its obligations under certain provisions of the Merger Agreement as described more fully in “The Merger Agreement — Termination of the Merger Agreement” beginning on page 59; and
 
  •  there is a breach or violation by the non-terminating party of any covenant, agreement or obligations or an inaccuracy of any of the non-terminating parties representations or warranties set forth in the Merger Agreement such that the closing conditions would not be satisfied on the Termination Date and the terminating party is not itself in breach of its representations, warranties, covenants or agreements such that the closing conditions would not be satisfied;
 
  •  By Newco if our board of directors withdraws or adversely modifies its recommendation or approval of the Merger Agreement; within five (5) business days of the commencement of a tender offer that constitutes an acquisition proposal, the board fails to publicly reaffirm the recommendation and recommend that the stockholders vote against such acquisition proposal and not tender any shares in such tender or exchange offer; fails to hold the stockholder meeting within thirty (30) days of the mailing of this proxy statement; or fails to reconfirm the recommendation within the time frames and under the circumstances described in the Merger Agreement; and
 
  •  By 3Com if all of the conditions to the obligations of Newco and Merger Sub to consummate the Merger have been satisfied or waived, but Newco and Merger Sub have breached their obligations to cause the Merger to be consummated.
 
The Merger Agreement may also be terminated by 3Com prior to the special meeting in order to enter into a definitive agreement for a superior proposal, provided that 3Com subsequently pay Newco a termination fee, as described in further detail in “The Merger Agreement — Recommendation Withdrawal/Termination in Connection with a Superior Proposal” beginning on page 59.
 
Termination Fees (Page 61)
 
Under certain circumstances, in connection with the termination of the Merger Agreement, we will be required to pay to Newco a termination fee of $66 million. We also may be required to pay Newco their out of pocket fees and expenses (not to exceed $20 million) in connection with the Merger. In circumstances where we are required to pay such fees and expenses, if we are subsequently required to pay a termination fee, any fees and expenses previously reimbursed will be deducted from the termination fee owed. See “The Merger Agreement — Termination Fees and Expenses” beginning on page 61 for a detailed discussion of the termination fees.
 
Newco has agreed to pay the Company a termination fee of $66 million if we terminate the Merger Agreement in circumstances under which the conditions to the Merger are satisfied but (i) Newco and Merger Sub have not received the proceeds of the debt financing or (ii) a U.S. federal regulatory agency (that is not an antitrust regulatory agency) has informed Newco, Merger Sub or the Company (or any of their representatives) that it intends to take action to prevent the Merger. In the event that (i) all of the conditions to the Merger are satisfied, (ii) the debt financing has been funded or would be funded upon funding of the equity financing and (iii) no U.S. federal regulatory agency has informed Newco, Merger Sub or the Company (or any of their representatives) that it intends to take action to prevent the Merger, and (iv) Newco and Merger Sub fail to consummate the Merger, Newco has agreed to pay the Company a termination fee of $110 million. See “The Merger Agreement — Termination Fees and Expenses” beginning on page 61 for a detailed discussion of the termination fees.


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Remedies (Page 63)
 
In the event that the Company or Newco receive a termination fee as described above, such fee shall be deemed to be liquidated damages for any and all damages incurred by the party receiving such fee in connection with the matter forming the basis for such termination and no other claims may be brought with respect to such matters. Except in the case of fraud, the Company’s right to receive the termination fee as described above is the sole and exclusive remedy of the Company and its subsidiaries against Newco, Merger Sub, the Investors and any of their affiliates for any damages suffered as a result of a failure of the Merger to be consummated, or for a breach or failure to perform under the Merger Agreement or otherwise. Except in the case of fraud, Newco’s right to receive the termination fee as described above in circumstances that such fee is payable, or to recover damages from the Company in circumstances that such fee is not payable, is the sole and exclusive remedy of Newco, Merger Sub and their affiliates against the Company, its subsidiaries and any of their affiliates for any damages suffered as a result of a failure of the Merger to be consummated, or for a breach or failure to perform under the Merger Agreement or otherwise. In addition, Newco and Merger Sub are entitled to seek specific performance of the terms and provisions of the Merger Agreement with respect to the obligations of the Company, including seeking an injunction to prevent or restrain breaches or threatened breaches of the Merger Agreement by the Company and enforcing compliance with the covenants and obligations of the Company under the Merger Agreement. The Company is not entitled to seek specific performance with respect to the obligations of Newco and Merger Sub, including an injunction to prevent breaches of the Merger Agreement by Newco or Merger Sub.
 
Limited Guarantee (Page 38)
 
In connection with the Merger Agreement, certain investment vehicles advised by Bain Capital and an affiliate of Huawei Technologies Co. Ltd. entered into a limited guarantee for the benefit of the Company, pursuant to which each party has agreed to guaranty the obligations of Newco up to a maximum amount equal to its pro rata share of any termination fee payable by Newco to the Company pursuant to the terms of the Merger Agreement (which fee will be $66 million or $110 million depending on the circumstances of termination, as described more fully in “The Merger Agreement — Termination Fees and Expenses” beginning on page 61). The limited guarantee is the Company’s sole recourse against each Investor as a guarantor, except for claims arising out of fraud against a person that committed such fraud.
 
Appraisal Rights (Page 68)
 
Under Delaware law, holders of Common Stock who do not vote in favor of the proposal to adopt the Merger Agreement will have the right to seek appraisal of the fair value of their shares of Common Stock as determined by the Delaware Court of Chancery if the Merger is completed, but only if they comply with all requirements of Delaware law, which are summarized in this proxy statement. The judicially determined appraisal amount could be more than, the same as or less than the merger consideration. Any holder of Common Stock intending to exercise appraisal rights, among other things, must submit a written demand for an appraisal to us prior to the vote on the proposal to adopt the Merger Agreement and must not vote or otherwise submit a proxy in favor of adoption of the Merger Agreement and must otherwise strictly comply with all of the procedures required by Delaware law. Your failure to follow exactly the procedures specified under Delaware law will result in the loss of your appraisal rights. A copy of the relevant section of Delaware law is attached hereto as Annex C.
 
Market Price of Common Stock (Page 65)
 
Our Common Stock is listed on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbol “COMS.” The closing sale price of Common Stock on Nasdaq on September 27, 2007, the last trading day prior to the execution of the Merger Agreement, was $3.68. The $5.30 per share to be paid for each share of Common Stock in the Merger represents a premium of approximately 44.0% to the closing price on September 27, 2007, and a premium of approximately 43.8% to the average closing share price during the thirty (30) trading days ended September 27, 2007. The closing sale price of our common stock on Nasdaq on           , 2007, the last trading day before the date of this proxy statement, was $      .


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 QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER
 
The following questions and answers are intended to address briefly some commonly asked questions regarding the Merger, the Merger Agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a 3Com stockholder. Please refer to the “Summary” and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully. See “Where You Can Find More Information” beginning on page 72.
 
Q. What is the proposed transaction?
 
A. The proposed transaction is the acquisition of the Company by Newco, an entity formed by investment vehicles sponsored by Bain Capital Partners, LLC pursuant to the Merger Agreement. Once the Merger Agreement has been adopted by the stockholders and other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub, an indirect, wholly-owned subsidiary of Newco, will merge with and into 3Com. 3Com will be the Surviving Corporation and an indirect, wholly-owned subsidiary of Newco. On the effective date of the Merger, Newco will be majority-owned by and controlled by investment vehicles sponsored by Bain Capital, and an affiliate of Huawei Technologies Co. Ltd. will make a non-controlling, minority investment, directly or indirectly, in Newco.
 
Q. What will I receive in the Merger?
 
A. Upon completion of the Merger, you will be entitled to receive $5.30 in cash, without interest and less any applicable withholding tax, for each share of Common Stock that you own immediately prior to completion of the Merger, unless you have properly and validly perfected your statutory rights of appraisal with respect to the Merger. For example, if you own 100 shares of Common Stock, you will receive $530.00 in cash in exchange for your shares of Common Stock, less any applicable withholding tax. You will not own any shares in the Surviving Corporation.
 
Q. When and where is the special meeting?
 
A. The special meeting of stockholders of 3Com will be held on           , at   a.m. local time, at the Company’s headquarters, 350 Campus Drive, Marlborough, Massachusetts 01752-3064.
 
Q. What vote is required for 3Com’s stockholders to approve the proposal to adopt the Merger Agreement?
 
A. An affirmative vote of the holders of a majority of the shares of Common Stock outstanding and entitled to vote at the special meeting is required to approve the proposal to adopt the Merger Agreement. Accordingly, failure to vote in person or by proxy or an abstention will have the same affect as a vote “AGAINST” the Merger Agreement.
 
Q: What vote of our stockholders is required to approve the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies?
 
A. Approval of the proposal to adjourn or postpone the special meeting, if necessary or appropriate, for the purpose of soliciting additional proxies requires the affirmative vote of a majority of the votes cast by the holders of all Common Stock present in person or represented by proxy at the special meeting and entitled to vote on the matter.
 
Q. How does 3Com’s board of directors recommend that I vote?
 
A. The board of directors unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement and “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the Merger Agreement. You should read “The Merger — Reasons for the Merger; Recommendation of our Board of Directors” beginning on page 25 for a discussion of the factors that the board of directors considered in deciding to recommend the adoption of the Merger Agreement.


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Q. What effects will the proposed Merger have on 3Com?
 
A. As a result of the proposed Merger, 3Com will cease to be a publicly-traded company and will be wholly-owned by Newco. You will no longer have any interest in our future earnings or growth. Following consummation of the Merger, the registration of our Common Stock and our reporting obligations with respect to our Common Stock under the Exchange Act of 1934, as amended (the “Exchange Act”) will be terminated upon application to the Securities and Exchange Commission (the “SEC”). In addition, upon completion of the proposed Merger, shares of our Common Stock will no longer be listed on any stock exchange or quotation system, including Nasdaq.
 
Q. What happens if the Merger is not consummated?
 
A. If the Merger Agreement is not adopted by stockholders or if the Merger is not completed for any other reason, stockholders will not receive any payment for their shares in connection with the Merger. Instead, 3Com will remain an independent public company and the Common Stock will continue to be listed and traded on Nasdaq. Under specified circumstances, 3Com may be required to pay Newco a termination fee or reimburse Newco for its out-of-pocket expenses as described under the caption “The Merger Agreement — Termination Fees and Expenses” beginning on page 61.
 
Q. What do I need to do now?
 
A. We urge you to read the proxy statement carefully, including the annexes and to consider how the Merger affects you. If you are a stockholder of record, you can ensure your shares are voted at the special meeting by completing, signing, and dating and mailing the enclosed proxy card or voting by telephone or internet. Even if you plan to attend the special meeting, we encourage you to return the enclosed proxy card. If you hold your shares in “street” name, you can ensure that your shares are voted at the special meeting by instructing your broker or nominee how to vote, as discussed below. Do NOT return your stock certificate(s) with your proxy.
 
Q. How do I vote?
 
A. You may vote by:
 
• signing and dating each proxy card you receive and returning it in the enclosed prepaid envelope;
 
• using the telephone number printed on your proxy card;
 
• using the Internet voting instructions printed on your proxy card; or
 
• if you hold your shares in “street name,” follow the procedures provided by your broker, bank or other nominee.
 
If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares will be voted “FOR” the proposal to adopt the Merger Agreement and “FOR” the proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies.
 
Q. If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?
 
A. Yes, but only if you instruct your broker, bank or other nominee how to vote. You should follow the procedures provided by your broker, bank or other nominee regarding the voting of your shares. If you do not instruct your broker, bank or other nominee to vote your shares, your shares will not be voted and the effect will be the same as a vote “AGAINST” the proposal to adopt the Merger Agreement, but will not have an effect on the proposal to adjourn or postpone the special meeting.


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Q. How can I change or revoke my vote?
 
A. You have the right to change or revoke your proxy at any time before the vote taken at the special meeting:
 
• by notifying our Secretary, Neal D. Goldman, at 350 Campus Drive, Marlborough, Massachusetts 01752-3064;
 
• by attending the special meeting and voting in person (your attendance at the special meeting will not, by itself, revoke your proxy; you must vote in person at the special meeting);
 
• by submitting a later-dated proxy card; or
 
• if you voted by telephone or the Internet, by voting a second time by telephone or Internet.
 
If you have instructed a broker, bank or other nominee to vote your shares, the above instructions do not apply and instead you must follow the directions received from your broker, bank or other nominee to change those instructions.
 
Q. What do I do if I receive more than one proxy or set of voting instructions?
 
A. If your shares are registered differently or are in more than one account, you may receive more than one proxy and/or set of voting instructions relating to the special meeting. These should each be completed, signed and/or returned separately as described elsewhere in this proxy statement in order to ensure that all of your shares are voted.
 
Q. What happens if I sell my shares before the special meeting?
 
A. The record date of the special meeting is earlier than the special meeting and the date that the Merger is expected to be completed. If you transfer your shares of Common Stock after the record date but before the special meeting, you will retain your right to vote at the special meeting, but will have transferred the right to receive $5.30 per share in cash to be received by our stockholders in the Merger. In order to receive the $5.30 per share, you must hold your shares through completion of the Merger.
 
Q. Am I entitled to exercise appraisal rights instead of receiving the merger consideration for my shares?
 
A. Yes. As a holder of Common Stock, you are entitled to appraisal rights under Delaware law in connection with the Merger if you meet certain conditions. See “Dissenters’ Rights of Appraisal” beginning on page 68.
 
Q. When is the Merger expected to be completed? What is the “Marketing Period”?
 
A. We are working toward completing the Merger as quickly as possible, and we anticipate that it will be completed by the first calendar quarter of 2008. However, the exact timing of the completion of the Merger cannot be predicted. In order to complete the Merger, we must obtain stockholder approval and the other closing conditions under the Merger Agreement must be satisfied or waived (as permitted by law). In addition, Newco is not obligated to complete the Merger until the expiration of a twenty (20) business day “Marketing Period” that it may use to complete its financing for the Merger. The Marketing Period begins to run after we have provided certain financial information to Newco pursuant to the terms of the Merger Agreement; provided that the Marketing Period will not begin prior to thirteen (13) days before the special meeting. See “The Merger Agreement — Effective Time; Marketing Period” and “The Merger Agreement — Conditions to the Merger” beginning on pages 47 and 56, respectively.
 
Q. Will a proxy solicitor be used?
 
A. Yes. The Company has engaged Georgeson Shareholder Communications, Inc. (“Georgeson”) to assist in the solicitation of proxies for the special meeting and the Company estimates it will pay Georgeson a fee of approximately $20,000. The Company has also agreed to reimburse Georgeson for reasonable administrative and out-of-pocket expenses incurred in connection with the proxy solicitation and indemnify Georgeson against certain losses, costs and expenses.


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Q. Should I send in my stock certificates now?
 
A. No. After the Merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your Common Stock certificates for the merger consideration. If your shares are held in “street name” by your broker, bank or other nominee you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your “street name” shares in exchange for the merger consideration. Please do not send your certificates in now.
 
Q. Who can help answer my other questions?
 
A. If you have additional questions about the Merger, need assistance in submitting your proxy or voting your shares of Common Stock or need additional copies of the proxy statement or the enclosed proxy card, please (1) mail your request to 3Com Corporation, 350 Campus Drive, Marlborough, Massachusetts 01752-3064, Attn: Investor Relations or (2) call our Investor Relations department at (508) 323-1198. If your broker holds your shares, you should call your broker for additional information.


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 CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
 
This proxy statement and the documents to which we refer you in this proxy statement include forward-looking statements based on estimates and assumptions. There are forward-looking statements throughout this proxy statement, including, without limitation, under the headings “Summary,” “Questions and Answers about the Special Meeting and the Merger,” The Merger,” “Opinion of Financial Advisor,” “Regulatory Approvals” and “Litigation Related to the Merger” and in statements containing words such as “believes,” “estimates,” “anticipates,” “continues,” “contemplates,” “expects,” “may,” “will,” “could,” “should” or “would” or other similar words or phrases. These statements, which are based on information currently available to us, are not guarantees of future performance and may involve risks and uncertainties that could cause our actual growth, results of operations, performance and business prospects, and opportunities to materially differ from those expressed in, or implied by, these statements. These forward-looking statements speak only as of the date on which the statements were made and we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statement included in this proxy statement or elsewhere. In addition to other factors and matters contained or incorporated in this document, these statements are subject to risks, uncertainties and other factors, including, among others:
 
  •  the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement that could require us to pay a $66 million termination fee;
 
  •  the outcome of any legal proceedings that have been or may be instituted against 3Com and others relating to the Merger Agreement;
 
  •  the inability to complete the Merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to consummation of the Merger, including the expiration of the waiting period under the HSR Act;
 
  •  the inability to complete the Merger due to other regulatory matters, such as CFIUS mitigation requirements or our inability to satisfy CFIUS that the transaction does not result in foreign control of the Company or pose a threat to U.S. national or homeland security, resulting in a recommendation by CFIUS and action by the President to block the transaction on national security grounds;
 
  •  the failure to obtain the necessary debt financing arrangements set forth in commitment letters received in connection with the Merger;
 
  •  the failure of the Merger to close for any other reason;
 
  •  risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the Merger;
 
  •