Director Stock Option Plan

3Com CORPORATION


DIRECTOR STOCK OPTION PLAN


(As Amended Effective September 24, 1998)


1. Purpose. It is the purpose of this Director Stock Option Plan (the "Plan") to enable 3Com CORPORATION (the "Company") and its subsidiaries to retain and provide incentives to outside directors by offering them an opportunity to acquire a proprietary interest in the Company.


2. Eligibility and Administration. Eligible participants shall be limited to outside directors of the Company and its subsidiaries. The Plan shall be administered either by the full Board of Directors or by a committee of the Company's Board of Directors (the "Board") consisting solely of two or more Non-Employee Directors (as such term is defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934). The Board and such committee are both referred to as the Board and the committee (if one is appointed) shall have all the powers of the Board hereunder, including, without limitation, the authority to, from time to time, establish guidelines (the "Guidelines") that determine the number of shares to be subject to the options granted under the Plan, subject to the per option limits set forth in Sections 4(b) and 4(c) and the restriction on amendment of the Guidelines set forth in Section 9. The Guidelines must provide that on each grant date, the number of shares of Common Stock subject to each option automatically granted pursuant to Section 4(b) or 4(c), as the case may be, shall be equal for each eligible participant, subject to distinctions based on the outside director's position as Chairman of the Board, designation as the "lead" outside director, and service on Board committees. All questions of interpretation of the Plan or of any option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such option.


3. Shares Subject to Plan.


(a) Subject to adjustment as provided in Section 3(b), the maximum number of shares of the Company's common stock ("Common Stock") and rights to acquire Common Stock that may be issued pursuant to this Plan shall be 3,000,000 shares. Options or shares that are issued to participants under the Plan and terminate without being exercised shall revert to the status of authorized but unissued options or shares under the Plan.


(b) In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification ...