3com Board Sets Record Date And Distribution Date

EXHIBIT 99.1


3Com Board Sets Record Date And Distribution Date For Palm Stock Dividend


Also Announces Expanded Stock Repurchase Program Of Up To One Billion Dollars


SANTA CLARA, Calif., May 8, 2000 -- 3Com Corporation (Nasdaq:COMS) and Palm, Inc. (Nasdaq: PALM) today announced that 3Com's Board of Directors has declared a stock dividend of all of 3Com's shares in Palm. The shares will be distributed to 3Com shareholders of record as of 5:00 PM Eastern Daylight Time on July 27, 2000. The record date which establishes the ratio of Palm shares to be distributed per 3Com share will be 5:00 Eastern Daylight Time on July 11, 2000. 3Com currently owns 532 million shares, or approximately 94.3 percent, of the outstanding common stock in Palm.


"Today's announcement follows through on our commitment to spin-off our handheld business and increase shareholder value, as communicated last fall," said Eric Benhamou, 3Com Chairman and CEO. "We're pleased to confirm the distribution of our Palm holdings will occur more quickly than our previous estimates."


"The establishment of two fully independent and publicly traded companies, 3Com and Palm, will maximize both companies' focus and ability to strengthen their leadership in their respective markets," continued Benhamou.


On May 8, 2000, 3Com received a ruling from the Internal Revenue Service that the Palm distribution will be tax-free to shareholders for U.S. federal income tax purposes. The number of shares of Palm common stock that each holder of a share of 3Com common stock will receive will be based on the actual number of shares of 3Com common stock outstanding on the record date. Based on the approximately 351 million shares of 3Com common stock outstanding as of April 24, 2000, the distribution ratio would be approximately 1.5 shares of Palm for every share of 3Com. There are approximately 14 million immediately exercisable options for 3Com common stock that


could be exercised between now and the record date. Therefore the final ratio will be based on the actual number of shares outstanding as of the record date July 11. 3Com shareholders will receive whole shares of Palm and cash payments for fractional shares. Cash received in lieu of fractional shares will be taxable.


An information statement will be mailed to 3Com shareholders of record after July 11. The information statement will include the final distribution ratio, as well as information on how to calculate the share cost basis.


Expanded Stock Repurchase Program 3Com also announced today that its Board of Directors has authorized expansion of the company's stock repurchase program in the amount of up to one billion dollars. The company is exploring various methods for the repurchase of shares including, but not limited to, accelerated repurchase agreements with broker dealers and more traditional open market purchases. Such purchases could be used to offset shares created as a result of employee's exercising stock ...