3com Corp. 1994 Stock Option Plan

Exhibit 4.1


3COM CORPORATION
1994 STOCK OPTION PLAN


1. Purpose. The 3Com Corporation 1994 Stock Option Plan (the "Plan") is
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established to create additional incentive for eligible employees of
3Com Corporation and any successor corporation thereto (collectively
referred to as the "Company"), and any present or future parent and/or
subsidiary corporations of such corporation (all of whom along with
the Company being individually referred to as a "Participating
Company" and collectively referred to as the "Participating Company
Group"), to promote the financial success and progress of the
Participating Company Group. For purposes of the Plan, a parent
corporation and a subsidiary corporation shall be as defined in
sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code").


2. Administration.
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(a) General. The Plan shall be administered by the Board of
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Directors of the Company (the "Board") and/or by a duly
appointed committee of the Board having such powers as shall be
specified by the Board. Any subsequent references herein to the
Board shall also mean the committee if such committee has been
appointed and, unless the powers of the committee have been
specifically limited, the committee shall have all of the powers
of the Board granted herein, including, without limitation, the
power to terminate or amend the Plan at any time, subject to the
terms of the Plan and any applicable limitations imposed by law.
All questions of interpretation of the Plan or of any options
granted under the Plan (an "Option") shall be determined by the
Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan and/or any Option.


(b) Options Authorized. Options may be only nonqualified stock
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options, that is, options which are not incentive stock options
as defined in section 422 of the Code.


(c) Authority of Officers. Any officer of a Participating Company
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shall have the authority to act on behalf of the Company with
respect to any matter, right, obligation, or election which is
the responsibility of or which is allocated to the Company
herein, provided the officer has apparent authority with respect
to such matter, right, obligation, or election.


3. Eligibility. The Options may be granted only to employees of the
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Participating Company Group; provided, however, that no Option may be
granted to (i) a person who, at the time of such grant, is an officer
or director of the Company or a beneficial owner of more than ten
percent (10%) of any class of equity securities of the Company
registered pursuant to section 12 of the Securities Exchange Act of
1934, as amended, or (ii) any person whose eligibility to participate
in the Plan would require the Company to obtain shareholder approval
of the Plan pursuant to the Bylaws of the National Association of
Securities Dealers (and any schedules thereto) or the provisions
contained in the New York Stock Exchange Listed Company Manual. For
purposes of the foregoing sentence, "employees" shall include
prospective employees


to whom Options are granted in connection with written offers of
employment with the Participating Company Group. The Board shall, in
the Board's sole discretion, determine which eligible persons shall be
granted Options (an "Optionee"). An Optionee may, if otherwise
eligible, be granted additional Options.


4. Shares Subject to Option. Options shall be options for the purchase
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of the authorized but unissued common stock of the Company (the
"Stock"), subject to adjustment as provided in paragraph 9 below. The
maximum number of shares of Stock which may be issued under the Plan
shall be One Hundred Eighty Three Million Six Hundred Eighty Three
Thousand Nine Hundred Twenty Six (183,683,926) shares (as adjusted for
the Palm Factor). In the event that any outstanding Option for any
reason expires or is terminated or canceled and/or shares of Stock
subject to repurchase are repurchased by the Company, the shares
allocable to the unexercised portion of such Option, or such
repurchased shares, may again be subjected to an Option.


5. Time for Granting Options. The Plan shall continue until terminated
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by the Board or until all of the shares of Stock reserved for issuance
under the Plan have been issued, whichever shall first occur.


6. Terms, Conditions and Form of Options. Subject to the provisions of
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the Plan, the Board shall determine for each Option (which need not be
identical) the number of shares of Stock for which the Option shall be
granted, the exercise price of the Option, the exercisability of the
Option, and all other terms and conditions of the Option not
inconsistent with the Plan. Options granted pursuant to the Plan
shall be evidenced by written agreements specifying the number of
shares of Stock covered thereby, in such form as the Board shall from
time to time establish, and shall comply with and be subject to the
following terms and conditions:


a) Exercise Price. The exercise price for each Option shall be
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established in the sole discretion of the Board; provided,
however, that the exercise price per share shall not be less than
the fair market value, as determined by the Board, of a share of
Stock on the date of the granting of the Option. Notwithstanding
the foregoing, an Option may be granted with an exercise price
lower than the minimum exercise price set forth above if such
Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying with the provisions of
section 424(a) of the Code.


(b) Exercise Period of Options. The Board shall have the power to
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set the time or times within which each Option shall be
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; provided, however, that no Option shall be
exercisable after the expiration of ten (10) years after the date
such Option is granted.


(c) Payment of Exercise Price. Payment of the exercise price for
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the number of shares of Stock being purchased pursuant to any
Option shall be made (i) in cash, by check, or cash equivalent,
(ii) by tender to the Company of shares of the Company's stock
owned by the Optionee having a value, as determined by the Board
(but without regard to any restrictions on transferability
applicable to such stock by reason of federal or state securities
laws or agreements with an underwriter for the Company), not less
than the exercise price, (iii) by the assignment of the proceeds
of a sale of some or all of the shares being acquired upon the
exercise of an Option (including, without limitation, through


an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the
Federal Reserve System), or (iv) by any combination thereof. The
Board may at any time or from time to time, by adoption of or by
amendment to the form of Standard Option Agreement described in
paragraph 7 below, or by other means, grant Options which do not
permit all of the foregoing forms of consideration to be used in
payment of the exercise price and/or which otherwise restrict one
(1) or more forms of consideration. Notwithstanding the
foregoing, an Option may not be exercised by tender to the
Company of shares of the Company's stock to the extent such
tender of stock would constitute a violation of the provisions of
any law, regulation and/or agreement restricting the redemption
of the Company's stock.


(x) Unless otherwise provided by the Board, an Option may not be
exercised by tender to the Company of the Company's stock unless
such shares of the Company's stock either have been owned by the
Optionee for more than one (1) year or were not acquired,
directly or indirectly, from the Company.


(y) The Company reserves, at any and all times, the right, in the
Company's sole and absolute discretion, to establish, decline to
approve and/or terminate any program and/or procedures for the
exercise of Options by means of an assignment of the proceeds of
a sale of some or all of the shares of Stock to be acquired upon
such exercise.


7. Standard Form of Stock Option Agreement.
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(a) Nonqualified Stock Options. Unless otherwise provided for by
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the Board at the time an Option is granted, an Option shall
comply with and be subject to the terms and conditions set forth
in the form of nonqualified stock option agreement attached
hereto as Exhibit A and incorporated herein by reference.
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(b) Standard Term for Options. Unless otherwise provided for by the
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Board in the grant of an Option, any Option granted hereunder
shall be exercisable for a term of ten (10) years.


8. Authority to Vary Terms. The Board shall have the authority from time
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to time to vary the terms of the Standard Option Agreement described
in paragraph 7 above either in connection with the grant of an
individual Option or in connection with the authorization of a new
standard form or forms; provided, however, that the terms and
conditions of such revised or amended standard form or forms of stock
option agreement shall be in accordance with the terms of the Plan.
Such authority shall include, but not by way of limitation, the
authority to grant Options which are immediately exercisable.


9. Effect of Change in Stock Subject to Plan. Appropriate adjustments
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shall be made in the number and class of shares of Stock subject to
the Plan and to any outstanding Options and in the exercise price of
any outstanding Options in the event of a stock dividend, stock split,
reverse stock split, combination, reorganization, reclassification, or
like change in the capital structure of the Company.


10. Transfer of Control. For purposes hereof, "Control Company" shall
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mean the Participating Company whose stock is subject to the Option.
An "Ownership Change"


shall be deemed to have occurred in the event any of the following
occurs with respect to the Control Company.


(a) a direct or indirect sale or exchange by the shareholders of the
Control Company of all or substantially all of the stock of the
Control Company;


(b) a merger in which the Control Company is a party; or


(c) the sale, exchange, or transfer of all or substantially all of
the Control Company's assets (other than a sale, exchange, or
transfer to one (1) or more corporations where the shareholders
of the Control Company before such sale, exchange, or transfer
retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the corporation(s) to
which the assets were transferred).


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