According to the Company’s FORM 10-Q For the Quarterly Period Ended March 2, 2001, Plaintiffs filed a notice of appeal on October 2, 2000. On February 14, 2001, plaintiffs filed a Stipulation of and Request for Dismissal agreeing to dismiss their appeal.

As reported by the same SEC filing, on May 11, 1999, a securities class action, captioned Gaylinn v. 3Com Corporation, et al., Civil Action No. C-99-2185 MMC (Gaylinn), was filed against 3Com and several of its present and former officers and directors in United States District Court for the Northern District of California. Several similar actions have been consolidated into the Gaylinn action. On September 10, 1999, the plaintiffs filed a consolidated complaint which alleges violations of the federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and seeks unspecified damages on behalf of a purported class of purchasers of 3Com common stock during the period from September 22, 1998 through March 2, 1999. In January 2000, the Court dismissed the complaint. In February 2000, plaintiffs filed an amended complaint. In June 2000, the Court dismissed the amended complaint without prejudice. Plaintiffs filed another amended complaint. On July 24, 2000, the Company filed a motion to dismiss the latest amended complaint. In September 2000, the Court dismissed the amended complaint with prejudice.

The original complaint charges 3Com and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that beginning in 9/98, defendants made false and misleading statements about 3Com's exceptionally strong and much better-than-expected 1stQ F99 EPS of $.24, strong ongoing demand for 3Com's Systems Products (especially its new flagship CoreBuilder 9000 switch) and 3Com's Client Access Products, 3Com's increased operational efficiencies, improved channel inventory controls and cost savings and the program 3Com was making with its new, improved business model.

The complaint further alleges that during 3Com's 1stQ F99 and 2ndQ F99, 3Com's insiders also used $130.4 million of 3Com's cash to repurchase 4.3 million 3Com shares on the open market, to help manipulate and artificially inflate the stock to help the insiders sell their own shares at much higher and, for them, more profitable prices. As a result of these positive representations, 3Com's stock soared from as low as $23-1/8 on 9/1/98 to as high as $51-1/8 on 12/23/98, its 98 and Class Period high, and during 11/98- 1/99, 3Com's top insiders sold 4.2 million shares of their 3Com stock at as high as $48.69 per share for $189 million. In early 2/99, 3Com's stock fell sharply, from $47-1/4 to $30-9/16 in seven trading sessions when rumors circulated that Intel Corp. was gaining NIC market share from 3Com and two 3Com distributors announced disappointing results. However, when 3Com assured analysts that its business model was intact and it was on track to achieve 3rdQ F99 and 4thQ F99 EPS consistent with its prior guidance, 3Com's stock stabilized and recovered to as high as $35-9/16. However, on 3/2/99, 3Com revealed that, due to weak sales of Systems Products, especially in North and South America and very weak sales of Client Access Products, 3Com's 3rdQ F99 EPS, and its results going forward, would be much worse than earlier forecast, causing analysts to slash the 3Com forecast for the 4thQ F99, F99 and F00 EPS to just $.22-$.29, $1.04-$1.11 and $1.15-$1.55, respectively, far below the levels forecast during the Class Period. 3Com's stock dropped from $30-11/16 on 3/1/99 to as low as $22-3/4 on 3/3/99, a 27% two-day decline on extraordinary volume of over 92 million shares.