According to the Notice Of Proposed Settlement Of Class Action dated November 28, 2000, the proposed settlement creates a fund in the amount of $259,000,000 in cash and will include interest that accrues on the fund prior to distribution. Based on Lead Plaintiffs' estimate of the number of shares entitled to participate in the settlement and the anticipated number of claims to be submitted by members of the Class, the average distribution per share would be approximately $3.04 before deduction of Court-approved fees and expenses. However, individual plaintiff's actual recovery from this fund will depend on a number of variables including the number of Claimants, the number of shares purchased, the expense of administering the claims process, and the timing of purchases and sales, if any. The Lead Plaintiffs believe that the proposed settlement is a good recovery and is in the best interests of the Class.

The original complaint charges 3Com and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Among other things, plaintiffs claim that defendants artificially inflated the price of 3Com's common stock by making a series of false and misleading statements about 3Com's acquisition of U.S. Robotics Corp., 3Com's success in integrating U.S. Robotics operation into 3Com's following the acquisition, the state of 3Com's "channel inventories," and efforts to reduce the amount of channel inventory.

As a result of defendants' misrepresentations and omissions, 3Com's stock traded as high as $59 11/16 per share during the Class Period, before plummeting to below $30 per share when the truth was finally revealed.