-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Du7yla0tGqvNLyPIK53bCnqtVsSBlG4zOqhTPUGtH+T/OMR6Lcv4JXi4SfyMh1mG +ruBxl28Ff9x1K1lJoH6Jw== 0000950005-98-000598.txt : 19980720 0000950005-98-000598.hdr.sgml : 19980720 ACCESSION NUMBER: 0000950005-98-000598 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980714 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3COM CORP CENTRAL INDEX KEY: 0000738076 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 942605794 STATE OF INCORPORATION: CA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-12867 FILM NUMBER: 98666012 BUSINESS ADDRESS: STREET 1: 5400 BAYFRONT PLZ CITY: SANTA CLARA STATE: CA ZIP: 95052-8145 BUSINESS PHONE: 4087645000 MAIL ADDRESS: STREET 1: 5400 BAYFRONT PLAZA CITY: SANTA CLARA STATE: CA ZIP: 95052-8145 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One): [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7,1996]. For the fiscal year ended December 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]. For the transition period from _____to _____ Commission file number _____ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: U.S. Robotics Corporation 401(k) Retirement Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: 3 Com Corporation 5400 Bayfront Plaza Santa Clara, California 95052-8145 U.S. Robotics Corporation 401(k) Retirement Savings Plan REQUIRED INFORMATION The U.S. Robotics Corporation 401(k) Retirement Savings Plan (the "Plan") is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and schedules of the Plan for the two fiscal years ended December 31, 1997 and 1996, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto and incorporated herein by reference. -2- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES TOGETHER WITH INDEPENDENT AUDITORS' REPORT DECEMBER 31, 1997 AND 1996 -3- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN TABLE OF CONTENTS Page ---- Independent Auditors' Report 5 Statements of Net Assets Available for Benefits 6 Statements of Changes in Net Assets Available for Benefits 7 Notes to Financial Statements 10 Supplemental Schedules: Schedule of Assets Held for Investment Purposes 19 Schedule of Reportable Transactions 20 -4- U.S. Robotics Corporation 401(k) Retirement Savings Plan INDEPENDENT AUDITORS' REPORT Administrative Committee U.S. Robotics Corporation 401(k) Retirement Savings Plan We have audited the accompanying statements of net assets available for benefits of U.S. Robotics Corporation 401(k) Retirement Savings Plan (the Plan), as of December 31, 1997, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Plan as of and for the year ended December 31, 1996 were audited by other auditors whose report dated September 15, 1997 expressed an unqualified opinion on those financial statements. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1997, and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes and reportable transactions as of and for the year ended December 31, 1997 are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and are not a required part of the basic financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Morris, Davis & Chan July 2, 1998 -5- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 1997 and 1996 1997 1996 ----------- ----------- Assets: Investments at fair value $63,119,224 $38,138,782 Participant loans 2,016,905 1,046,982 ----------- ----------- Total investments 65,136,129 39,185,764 ----------- ----------- Cash -- 7,339 ----------- ----------- Receivables Employer contributions 2,040,069 540,767 Participant contributions 1,254,461 -- Other 24,488 15,131 ----------- ----------- Total receivables 3,319,018 555,898 ----------- ----------- Total assets 68,455,147 39,749,001 Liabilities: -- -- ----------- ----------- Net assets available for benefits $68,455,147 $39,749,001 =========== =========== -6- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS For the Year Ended December 31, 1997
AETC Money Collective IDS IDS AIM Market Funds- Bond Mutual Constellation Fund Equity Fund Fund Fund ------------ ------------ ------------ ------------ ------------ American Express Trust, Inc. Additions to net assets attributed to: Investment income Interest and dividends $ 207,888 $ 39 $ 252,387 $ 1,157,984 $ 391,972 Net appreciation (depreciation) in fair value of investments -- 2,694,663 34,936 44,610 65,308 ------------ ------------ ------------ ------------ ------------ 207,888 2,694,702 287,323 1,202,594 457,280 ------------ ------------ ------------ ------------ ------------ Contributions Participants' elective deferral and rollovers 1,140,374 2,634,710 1,034,231 2,018,847 2,494,437 Employer 559,237 1,025,485 451,304 880,216 923,849 ------------ ------------ ------------ ------------ ------------ 1,699,611 3,660,195 1,485,535 2,899,063 3,418,286 ------------ ------------ ------------ ------------ ------------ Total additions 1,907,499 6,354,897 1,772,858 4,101,657 3,875,566 ------------ ------------ ------------ ------------ ------------ Deductions from net assets attributed to: Benefits paid to participants 290,050 526,746 176,759 541,753 250,876 ------------ ------------ ------------ ------------ ------------ Total deductions 290,050 526,746 176,759 541,753 250,876 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) prior to loans, net and transfers between funds 1,617,449 5,828,151 1,596,099 3,559,904 3,624,690 Loans, net (114,911) (172,795) (66,197) (158,370) (70,837) Transfers between funds 197,239 334,890 12,588 (280,743) (348,697) ------------ ------------ ------------ ------------ ------------ Net increase 1,699,777 5,990,246 1,542,490 3,120,791 3,205,156 Net assets available for benefits Beginning of year 3,273,518 6,962,037 2,158,774 5,382,179 2,738,948 ------------ ------------ ------------ ------------ ------------ End of year 4,973,295 12,952,283 3,701,264 8,502,970 5,944,104 ============ ============ ============ ============ ============ 3-Com New Templeton Corporation Dimensions Foreign Company Participant Fund Fund Stock Fund Loan Fund Total ------------ ------------ ------------ ------------ ------------ American Express Trust, Inc. Additions to net assets attributed to: Investment income Interest and dividends $ 1,076,165 $ 508,696 $ 74 $ 112,536 $ 3,707,741 Net appreciation (depreciation) in fair value of investments 1,500,602 (320,311) (1,031,531) -- 2,988,277 ------------ ------------ ------------ ------------ ------------ 2,576,767 188,385 (1,031,457) 112,536 6,696,018 ------------ ------------ ------------ ------------ ------------ Contributions Participants' elective deferral and rollovers 3,963,678 1,680,218 3,142,651 -- 18,109,146 Employer 1,585,555 654,398 1,472,336 -- 7,552,380 ------------ ------------ ------------ ------------ ------------ 5,549,233 2,334,616 4,614,987 -- 25,661,526 ------------ ------------ ------------ ------------ ------------ Total additions 8,126,000 2,523,001 3,583,530 112,536 32,357,544 ------------ ------------ ------------ ------------ ------------ Deductions from net assets attributed to: Benefits paid to participants 964,315 306,189 448,322 146,388 3,651,398 ------------ ------------ ------------ ------------ ------------ Total deductions 964,315 306,189 448,322 146,388 3,651,398 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) prior to loans, net and transfers between funds 7,161,685 2,216,812 3,135,208 (33,852) 28,706,146 Loans, net (176,467) (57,705) (186,493) 1,003,775 -- Transfers between funds (539,635) 48,804 575,554 -- -- ------------ ------------ ------------ ------------ ------------ Net increase 6,445,583 2,207,911 3,524,269 969,923 28,706,146 Net assets available for benefits Beginning of year 8,670,557 2,812,013 6,703,993 1,046,982 39,749,001 ------------ ------------ ------------ ------------ ------------ End of year 15,116,140 5,019,924 10,228,262 2,016,905 68,455,147 ============ ============ ============ ============ ============
-7- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS For the Year Ended December 31, 1996
Fidelity Cash Bond Income Investment Advisor Reserve Fund of Fund of Company of Equity Fund America America America Portfolio ----------- ----------- ----------- ----------- ----------- Alex Brown & Sons, Inc. Additions to net assets attributed to: Investment income Interest and dividends $ 142,908 $ 25,588 $ 31,100 $ 21,253 $ 11,774 Net appreciation in fair value of investments -- 14,307 166,791 412,977 201,615 ----------- ----------- ----------- ----------- ----------- 142,908 39,895 197,891 434,230 213,389 ----------- ----------- ----------- ----------- ----------- Contributions Participants' elective deferral and rollovers 123,752 150,648 290,772 380,260 501,918 Employer 23,802 28,975 55,926 73,137 96,537 ----------- ----------- ----------- ----------- ----------- 147,554 179,623 346,698 453,397 598,455 ----------- ----------- ----------- ----------- ----------- Total additions 290,462 219,518 544,589 887,627 811,844 ----------- ----------- ----------- ----------- ----------- Deductions from net assets attributed to: Benefits paid to participants 58,051 14,530 18,087 47,168 13,107 ----------- ----------- ----------- ----------- ----------- Total deductions 58,051 14,530 18,087 47,168 13,107 ----------- ----------- ----------- ----------- ----------- Net increase (decrease) prior to loans, net and transfers between funds and rollovers from merged plans 232,411 204,988 526,502 840,459 798,737 Loans, net (8,681) (10,548) (20,257) (54,360) (37,064) Transfers between funds and rollovers from merged plans (1,968,675) (1,437,848) (2,691,480) (4,326,815) (3,085,381) ----------- ----------- ----------- ----------- ----------- Net increase (decrease) (1,744,945) (1,243,408) (2,185,236) (3,540,716) (2,323,708) Net assets available for benefits Beginning of year 1,744,945 1,243,408 2,185,236 3,540,716 2,323,708 ----------- ----------- ----------- ----------- ----------- End of year $ -- $ -- $ -- $ -- $ -- =========== =========== =========== =========== ===========
U.S. New Robotics Participant Perspective Company Loan Fund Stock Fund Fund ----------- ----------- ----------- Alex Brown & Sons, Inc. Additions to net assets attributed to: Investment income Interest and dividends $ -- $ -- $ -- Net appreciation in fair value of investments 61,577 424,437 -- ----------- ----------- ----------- 61,577 424,437 -- ----------- ----------- ----------- Contributions Participants' elective deferral and rollovers 195,341 252,376 -- Employer 37,571 48,541 -- ----------- ----------- ----------- 232,912 300,917 -- ----------- ----------- ----------- Total additions 294,489 725,354 -- ----------- ----------- ----------- Deductions from net assets attributed to: 2,572 1,856 1,627 ----------- ----------- ----------- Benefits paid to participants Total deductions 2,572 1,856 1,627 ----------- ----------- ----------- Net increase (decrease) prior to loans, net and transfers between funds and rollovers from merged plans 291,917 723,498 (1,627) Loans, net 5,108 3,832 121,970 Transfers between funds and rollovers from merged plans (1,508,840) (1,661,763) (403,120) ----------- ----------- ----------- Net increase (decrease) (1,211,815) (934,433) (282,777) Net assets available for benefits Beginning of year 1,211,815 934,433 282,777 ----------- ----------- ----------- End of year $ -- $ -- $ -- =========== =========== =========== The accompanying notes are an integral part of the financial statements.
-8- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - (Continued) For The Year Ended December 31, 1996
AETC Money Collective IDS IDS AIM New Market Funds- Bond Mutual Constellation Dimensions Fund Equity Fund Fund Fund Fund ----------- ----------- ----------- ----------- ----------- ----------- American Express Trust, Inc. Additions to net assets attributed to: Investment income Interest and dividends $ 91,865 $ -- $ 96,850 $ 446,558 $ -- $ 319,522 Net appreciation in fair value of investments -- 831,305 31,057 61,887 17,201 710,131 ----------- ----------- ----------- ----------- ----------- ----------- 91,865 831,305 127,907 508,445 17,201 1,029,653 ----------- ----------- ----------- ----------- ----------- ----------- Contributions Participants' elective deferral and rollovers 1,227,092 2,166,943 744,954 1,875,235 954,701 2,713,245 Employer 163,315 465,328 159,971 402,687 205,012 582,640 ----------- ----------- ----------- ----------- ----------- ----------- 1,390,407 2,632,271 904,925 2,277,922 1,159,713 3,295,885 ----------- ----------- ----------- ----------- ----------- ----------- Total additions 1,482,272 3,463,576 1,032,832 2,786,367 1,176,914 4,325,538 ----------- ----------- ----------- ----------- ----------- ----------- Deductions from net assets attributed to: Benefits paid to participants 56,257 107,087 36,814 92,670 47,180 134,084 ----------- ----------- ----------- ----------- ----------- ----------- Total deductions 56,257 107,087 36,814 92,670 47,180 134,084 ----------- ----------- ----------- ----------- ----------- ----------- Net increase prior to loans, net and transfers between funds and rollovers from merged plans 1,426,015 3,356,489 996,018 2,693,697 1,129,734 4,191,454 Loans, net (48,503) (92,326) (31,740) (79,898) (40,677) (115,603) Transfers between funds and rollovers from merged plans 1,896,006 3,697,874 1,194,496 2,768,380 1,649,891 4,594,706 ----------- ----------- ----------- ----------- ----------- ----------- Net increase 3,273,518 6,962,037 2,158,774 5,382,179 2,738,948 8,670,557 Net assets available for benefits Beginning of year -- -- -- -- -- -- ----------- ----------- ----------- ----------- ----------- ----------- End of year $ 3,273,518 $ 6,962,037 $ 2,158,774 $ 5,382,179 $ 2,738,948 $ 8,670,557 =========== =========== =========== =========== =========== ===========
U.S. Templeton Robotics Participant Foreign Company Loan Fund Stock Fund Fund Total ----------- ----------- ----------- ----------- American Express Trust, Inc. Additions to net assets attributed to: Investment income Interest and dividends $ -- $ 194,874 $ 37,090 $ 1,419,382 Net appreciation in fair value of investments 163,747 332,811 -- 3,429,843 ----------- ----------- ----------- ----------- 163,747 527,685 37,090 4,849,225 ----------- ----------- ----------- ----------- Contributions Participants' elective deferral and rollovers 932,646 2,223,050 -- 14,732,933 Employer 200,276 477,377 -- 3,021,095 ----------- ----------- ----------- ----------- 1,132,922 2,700,427 -- 17,754,028 ----------- ----------- ----------- ----------- Total additions 1,296,669 3,228,112 37,090 22,603,253 ----------- ----------- ----------- ----------- Deductions from net assets attributed to: Benefits paid to participants 46,090 109,859 -- 787,039 ----------- ----------- ----------- ----------- Total deductions 46,090 109,859 -- 787,039 ----------- ----------- ----------- ----------- Net increase prior to loans, net and transfers between funds and rollovers from merged plans 1,250,579 3,118,253 37,090 21,816,214 Loans, net (39,737) (94,717) 543,201 -- Transfers between funds and rollovers from merged plans 1,601,171 3,680,456 466,691 4,465,749 ----------- ----------- ----------- ----------- Net increase 2,812,013 6,703,993 1,046,982 26,281,963 Net assets available for benefits Beginning of year -- -- -- 13,467,038 ----------- ----------- ----------- ----------- End of year $ 2,812,013 $ 6,703,993 $ 1,046,982 $39,749,001 =========== =========== =========== =========== The accompanying notes are an integral part of the financial statements.
-9- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 1 - DESCRIPTION OF THE PLAN A. General: The U.S. Robotics Corporation 401(k) Retirement Savings Plan (the "Plan") is a defined contribution plan that covers substantially all employees of the U.S. Robotics Corporation (the "Employer" or "Company"). It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. B. Eligibility: Each eligible employee shall commence participation on the entry date corresponding with or next following the later of: (1) the date the employee completes three months of service or (2) the date the employee attains age 21. The Plan excludes certain categories of employees. The Plan's entry dates are the first day of each calendar month. A year of service, for purposes of eligibility and vesting, is credited for each twelve consecutive month period in which an employee completes at least 1,000 hours of service. C. Participant Contributions: A participant may elect to make salary deferral contributions in the amount of 1% to 15% of the participant's eligible compensation. However, the maximum before-tax salary deferral that a participant may contribute is limited to $9,500 in 1997 and 1996. D. Employer Contributions: The Employer will make a matching contribution equal to a percentage of eligible compensation. In 1997 and 1996, the Employer contributed $.50 per dollar of participant contributions, up to a maximum of 6% of eligible compensation in each payroll period. In addition to the above matching contributions, in Plan years 1997 and 1996, the Employer contributed an additional contribution of $500 to all participants that authorized contributions to the Plan, were actively employed, and completed 1,000 hours of service as of the last day of the Plan year and to all participants who terminated their employment with the Company during the Plan year as a result of attaining normal retirement age (65), death, or disability. -10- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 1 - DESCRIPTION OF THE PLAN - (Continued) E. Participant Accounts: Each participant's account is credited with the participant's contribution and allocations of (a) the Company's contributions and (b) Plan earnings (or losses). Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. F. Participant Elections: Participants have the opportunity to change the percentage of their salary deferred on the first day of any calendar month. At any time, participants may change the allocation percentage of their deferrals to the funds or transfer balances between funds, with the changes to be effective as soon as administratively practical. G. Investment Options: Alex Brown & Sons, Inc. (Prior to April 1, 1996) Cash Reserve Fund - The Cash Reserve Fund's objective is the preservation of capital and liquidity. Bond Fund of America - The Bond Fund of America seeks a high level of current income and preservation of capital. Income Fund of America and Investment Company of America - The Income Fund of America and the Investment Company of America are long-term growth funds which provide current income through the purchase of common stock. Fidelity Advisor Equity Portfolio - The Fidelity Advisor Equity Portfolio's objective is capital appreciation through investments in the stocks of companies with above average growth potential. New Perspective Fund - The New Perspective Fund seeks long-term growth of capital by investing in both U.S. and non-U.S. securities. U.S. Robotics Company Stock Fund - The U.S. Robotics Company Stock Fund's objective is capital appreciation through investments, primarily in shares of U.S. Robotics Corporation Common Stock. -11- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 1 - DESCRIPTION OF THE PLAN - (Continued) G. Investment Options: (Continued) American Express Trust, Inc. (Effective April 1, 1996) Money Market Fund - The American Express Trust Money Market Fund's investment objective is to provide as high a level of current interest income as is consistent with maintaining liquidity and stability of principal. AETC Collective Funds - Equity - The American Express Trust Equity Index Fund is an equity collective fund whose objective is to achieve a rate of return as close as possible to the return of the Standard & Poor's 500 Stock Index (S&P 500). IDS Bond Fund - The Bond Fund's investment objective is to provide shareholders with a high level of current income while attempting to conserve the value of the investment and to continue a high level of income for the longest period of time. IDS Mutual Fund - The Mutual Fund seeks to provide shareholders with a balance of growth of capital and current income. AIM Constellation Fund - The AIM Constellation Fund's goal is to seek capital appreciation primarily through investments in common stock of emerging growth companies. New Dimensions Fund - The New Dimensions Fund seeks to provide shareholders with long-term growth of capital. Templeton Foreign Fund - The Foreign Fund seeks long-term capital growth through a flexible policy of investing in stocks and debt obligations of companies and governments outside of the United States. 3Com Corporation Company Stock Fund (formerly the U.S. Robotics Company Stock Fund) - The 3Com Corporation Company Stock Fund's objective is capital appreciation through investments, primarily in shares of 3Com Corporation Common Stock. H. Vesting: Participants are fully vested in their salary deferral contributions. Participants account balances arising from employer contributions are vested based on a three-year graded vesting schedule. All accounts are fully vested after three years. Full vesting also occurs upon obtaining normal retirement age, death, or disability. -12- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 1 - DESCRIPTION OF THE PLAN - (Continued) I. Distributions: Upon attaining normal retirement age, death, financial hardship, termination of employment or disability, participants will receive distributions of their vested account balances. Generally any distribution will be made in a single lump sum with certain exceptions for those employees who participated under a previous plan that offered forms of distribution in addition to single lump-sum payments. As of December 31, 1997 and 1996, amounts due to participants who had separated from service were $441,814 and $170,478, respectively. J. Loans: Loans to participants who are employees or parties-in-interest may be made for any purpose. A participant may borrow a maximum of 50% of his account balance, but not more than $50,000. The $50,000 limit is reduced by the highest outstanding loan balance during the one year period preceding the date of a new loan. K. Plan Termination: The Company has the right to terminate the Plan at any time for any reason. In the event of such termination, participants will become 100% vested in their accounts. L. Administration: The day to day administration of the Plan is overseen by an Administrative Committee consisting of Company officers. The Company is the Plan Administrator. American Express Trust, Inc. serves as Trustee and Record-keeper. M. Administrative Expenses: Forfeitures resulting from the termination of a participant who is not 100% vested can be used by the Plan to cover administrative expenses. As of December 31, 1997 and 1996, forfeited non-vested accounts totaled $583,173 and $37,555, respectively. For the Plan years ended December 31, 1997 and 1996, administrative expenses were paid by the Employer and forfeitures remain in a forfeiture holding account. These administrative expenses were insignificant to the Plan's net assets available for benefits. -13- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Plan have been prepared in conformity with generally accepted accounting principles as applied to employee benefit plans, and in accordance with the terms of the Plan agreement. A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows. A. Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of changes in net assets during the reporting period. Actual results could differ from these estimates. B. Investment Valuation: Investments are valued at quoted market prices which represent the net asset value of shares held by the Plan at year end. In accordance with the policy of stating investments at fair value, net unrealized appreciation (depreciation) for the year is reflected in the Statements of Changes in Net Assets Available for Benefits. Participant loans are valued at cost, which approximates fair value. C. Investment Transactions and Income: Purchases and sales of securities are reflected on a trade-date basis. Realized gains and losses on the sale of securities are computed on each individual security. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded on an accrual basis as earned. The aggregate of (a) the net unrealized appreciation or depreciation in the fair value of investments for the year ended December 31 and (b) the net realized gains (losses) on dispositions of investments during the year is reflected as net appreciation (depreciation) in the fair value of investments for the period. -14- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) D. Contributions: Contributions from the Company are accrued at December 31, 1997 and 1996, in accordance with the terms of the Plan agreement. E. Payment of Benefits: Benefits are recorded when paid. NOTE 3 - TAX STATUS The Plan has received a determination letter dated April 24, 1998 from the Internal Revenue Service stating that the Plan and related trust are designed in accordance with Section 401(a) of the Internal Revenue Code ("IRC") and is, therefore, exempt from federal and state income taxes. The Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in substantial compliance with the applicable provisions of the IRC. -15- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 4 - INVESTMENTS A schedule which represents the values as defined in Note 2 of the Plan's investments at December 31, 1997 and 1996 as follows: 1997 1996 ----------- ----------- Investments at fair value as determined by quoted market prices: Money Market Fund $ 4,724,188* $ 3,446,368* AETC Collective Funds - Equity 12,438,766* 6,870,124* IDS Bond Fund 3,509,631* 2,127,176* IDS Mutual Fund 8,157,366* 5,302,639* AIM Constellation Fund 5,503,340* 2,698,453* New Dimensions Fund 14,482,240* 8,555,472* Templeton Foreign Fund 4,728,685* 2,772,454* U.S. Robotics Company Stock Fund -- 6,366,096* 3Com Corporation Company Stock Fund 9,575,008* -- ----------- ----------- $63,119,224 $38,138,782 Participant loans, at estimated fair value 2,016,905 1,046,982 ----------- ----------- Total investments $65,136,129 $39,185,764 =========== =========== * Represents 5% or more of net assets. NOTE 5 - PLAN RESTATEMENT On April 1, 1996, the Megahertz, ISC and Palm 401(k) Plans were merged into the U.S. Robotics Corporation 401(k) Retirement Savings Plan that constitutes a continuation and restatement of the U.S. Robotics Corporation Employees' Retirement Investment Plan which was effective January 1, 1989. Additionally, American Express Trust, Inc. replaced Alex Brown & Sons, Inc. as the Plan Trustee and replaced AMG as Record-keeper. -16- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 AND 1996 NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 1997 to Form 5500: Net assets available for benefits per the financial statements $ 68,455,147 Less: Amounts allocated to terminated participants (441,814) ------------ Net assets available for benefits per Form 5500 $ 68,013,333 ============ The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 1997 to Form 5500: Benefits paid to participants per the financial statements $3,651,398 Add: Amounts allocated to withdrawing participants at December 31, 1997 441,814 ---------- Benefits paid to participants per Form 5500 $4,093,212 ========== Amounts allocated to withdrawing participants are recorded on Form 5500 for benefits claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date. NOTE 7 - PLAN MERGER On June 12, 1997, U.S. Robotics Corporation merged with 3Com Corporation, with 3Com Corporation as the surviving corporate entity. Effective June 12, 1997, the U.S. Robotics Company Stock Fund Investment Option was converted to the 3Com Corporation Company Stock Fund. Each share of U.S. Robotics common stock was converted to 1.75 shares of 3Com Corporation common stock. U.S. Robotics Corporation, as a wholly owned subsidiary of 3Com Corporation continues as the "Employer" or "Company." As a result of this merger, the Plan will merge with and into the 3Com Corporation 401(k) Plan in August 1998. -17- U.S. Robotics Corporation 401(k) Retirement Savings Plan SUPPLEMENTAL SCHEDULES -18- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN EIN 36-3994412 Plan No. 001 Form 5500 Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1997
(a) (b) (c) (d) (e) Description of Asset Including Identity of Issue, Borrower, Maturity Date, Rate of Interest, Lessor, or Similar Party Collateral, Par, or Maturity Value Cost Current Value ------------------------ ---------------------------------- ---- ------------- * American Express Trust, Inc. Money Market Fund II $ 4,724,188 $ 4,724,188 * American Express Trust, Inc. Equity Index Fund 9,280,156 12,438,766 * American Express Financial Advisors IDS Bond Fund 3,456,912 3,509,631 * American Express Financial Advisors IDS Mutual Fund 8,169,269 8,157,366 AIM Equity Funds Inc. Constellation Fund 5,485,720 5,503,340 * American Express Financial Advisors IDS New Dimensions Fund 12,640,950 14,482,240 Templeton Funds Inc. Foreign Fund 4,930,725 4,728,685 * 3Com Corporation Common Stock 10,305,160 9,575,008 * Participant Loans 8% - 11% -- 2,016,905 * Party-in-interest
-19- U.S. Robotics Corporation 401(k) Retirement Savings Plan U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN EIN 36-3994412 Plan No. 001 Form 5500 Line 27a - Schedule of Assets Held for Reportable Transactions December 31, 1997
(a) (b) (c) (d) (e) (f) Expense Purchase Selling Lease Incurred with Identity of Party Involved Description of Asset Price Price Rental Transaction -------------------------- -------------------- ----- ----- ------ ----------- American Express Trust, Inc. Money Market Fund I $ 8,426,492 $ -- NA NA American Express Trust, Inc. Money Market Fund I -- 8,243,453 NA NA American Express Trust, Inc. Money Market Fund II 3,774,685 -- NA NA American Express Trust, Inc. Money Market Fund II -- 2,254,172 NA NA American Express Trust, Inc. Collective Funds - Equity 4,424,358 -- NA NA American Express Trust, Inc. Collective Funds - Equity -- 1,550,231 NA NA American Express Financial Advisors IDS Bond Fund 1,912,462 -- NA NA American Express Financial Advisors IDS Bond Fund -- 564,943 NA NA American Express Financial Advisors IDS Mutual Fund 3,940,971 -- NA NA American Express Financial Advisors IDS Mutual Fund -- 1,131,034 NA NA AIM Equity Fund Inc. Constellation Fund 3,685,783 -- NA NA AIM Equity Fund Inc. Constellation Fund -- 946,329 NA NA American Express Financial Advisors IDS New Dimensions Fund 6,235,524 -- NA NA American Express Financial Advisors IDS New Dimensions Fund -- 2,756,686 NA NA Templeton Funds Inc. Foreign Fund 2,908,640 -- NA NA Templeton Funds Inc. Foreign Fund -- 632,039 NA NA U.S. Robotics Company Common Stock 2,584,477 -- NA NA U.S. Robotics Company Common Stock -- 8,542,386 NA NA 3Com Corporation Common Stock 10,242,059 -- NA NA 3Com Corporation Common Stock -- 369,853 NA NA
(a) (g) (h) (i) Current Value Of Asset on Cost Transaction Net Gain Identity of Party Involved Of Asset Date Or (Loss) - -------------------------- -------- ---- --------- American Express Trust, Inc. $ 8,426,492 $ 8,426,492 $ -- American Express Trust, Inc. 8,243,453 8,243,453 -- American Express Trust, Inc. 3,774,685 3,774,685 -- American Express Trust, Inc. 2,254,172 2,254,172 -- American Express Trust, Inc. 4,424,358 4,424,358 -- American Express Trust, Inc. 1,242,502 1,550,231 307,729 American Express Financial Advisors 1,912,462 1,912,462 -- American Express Financial Advisors 552,030 564,943 12,913 American Express Financial Advisors 3,940,971 3,940,971 -- American Express Financial Advisors 1,049,065 1,131,034 81,969 AIM Equity Fund Inc. 3,685,783 3,685,783 -- AIM Equity Fund Inc. 886,820 946,329 59,509 American Express Financial Advisors 6,235,524 6,235,524 -- American Express Financial Advisors 2,417,117 2,756,686 339,569 Templeton Funds Inc. 2,908,640 2,908,640 -- Templeton Funds Inc. 602,605 632,039 29,434 U.S. Robotics Company 2,584,477 2,584,477 -- U.S. Robotics Company 8,595,258 8,542,386 (52,872) 3Com Corporation 10,242,059 10,242,059 -- 3Com Corporation 288,825 369,853 81,028 -20- U.S. Robotics Corporation 401(k) Retirement Savings Plan SIGNATURES The Plan. Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the U.S. Robotics Corporation 401(k) Retirement Savings Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. U.S ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN -------------------------------- (Name of plan) Date: July 14, 1998 By: /s/ Ranette C. Fletcher -------------------------------- (Signature) ASSISTANT SECRETARY, 3COM CORPORATION AND ON BEHALF OF THE PLAN ADMINISTRATOR OF THE U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN -21- U.S. Robotics Corporation 401(k) Retirement Savings Plan EXHIBIT INDEX Exhibit Page Number Number - ------ ------ 23.1 Consent of Independent Accountants 23 -22- EX-23.1 2 CONSENT OF INDEPENDENT ACCOUNTANTS U.S. Robotics Corporation 401(k) Retirement Savings Plan CONSENT OF MORRIS, DAVIS & CHAN, INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement number 333-29099 on Form S-8 filed with the Securities and Exchange Commission on June 12, 1997 and Registration Statement number 33-97632 on Form S-8 filed with the Securities and Exchange Commission on October 2, 1995, as amended by Amendment No. 1 filed August 5, 1997, pertaining to our report dated July 2, 1998 with respect to the financial statements and schedules of the U.S. Robotics Corporation 401(k) Retirement Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ Morris, Davis & Chan - ---------------------------- Morris, Davis & Chan Oakland, California July 2, 1998 -23- -----END PRIVACY-ENHANCED MESSAGE-----