-----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, RDshsXo5OqBJ4KkIeytG2CHZQNg7MP3uvm+bKVGUSd2086+mvyVyCf3iKoW5g0BU F2MzcHBM19FVNkCgN62MNw== 0001047469-99-025652.txt : 19990630 0001047469-99-025652.hdr.sgml : 19990630 ACCESSION NUMBER: 0001047469-99-025652 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 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: 002-89045 FILM NUMBER: 99654177 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 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, 1998 / / 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: 3Com 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, 1998 and 1997, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto and incorporated herein by reference. U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES TOGETHER WITH INDEPENDENT AUDITORS' REPORT DECEMBER 31, 1998 AND 1997 MORRIS, DAVIS, CHAN Certified Public Accountants U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN TABLE OF CONTENTS
Page ---- Independent Auditors' Report 1 Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3-4 Notes to Financial Statements 5-11 Supplemental Schedule: 12 Schedule of Reportable Transactions 13
i 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, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years 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 audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 audits provide 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, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of reportable transactions for the year ended December 31, 1998 is 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 is not a required part of the basic financial statements. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. March 26, 1999 1 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1998 AND 1997
1998 1997 --------------- -------------- Assets: Investments at fair value $ --- $ 63,119,224 Participant loans --- 2,016,905 --------------- -------------- Total investments --- 65,136,129 --------------- -------------- Cash --- --- --------------- -------------- Receivables Employer contributions --- 2,040,069 Participant contributions --- 1,254,461 Other --- 24,488 --------------- -------------- Total receivables --- 3,319,018 --------------- -------------- Total assets --- 68,455,147 Liabilities: --- --- --------------- -------------- Net assets available for benefits $ --- $ 68,455,147 --------------- -------------- --------------- --------------
2 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1998
AETC Collective IDS Money Funds- Bond Market Fund Equity Fund ------------------- --------------------- ------------------- Additions to net assets attributed to: Investment income Interest and dividends $ 166,307 $ 26,663 $ 164,960 Net appreciation (depreciation) in fair value of investments - 2,153,927 (2,337) ------------------- --------------------- ------------------- 166,307 2,180,590 162,623 ------------------- --------------------- ------------------- Contributions Participants' elective deferral and rollovers 582,552 1,438,783 459,562 Employer - 393,111 132,992 ------------------- --------------------- ------------------- 582,552 1,831,894 592,554 ------------------- --------------------- ------------------- Total additions 748,859 4,012,484 755,177 ------------------- --------------------- ------------------- Deductions from net assets attributed to: Benefits paid to participants 571,742 940,965 198,202 ------------------- --------------------- ------------------- Total deductions 571,742 940,965 198,202 ------------------- --------------------- ------------------- Net increase (decrease) prior to loans, net and transfers between funds 177,117 3,071,519 556,975 Loans, net (45,259) (94,369) (27,457) Transfers betweeen funds 11,478 1,425,171 (104,951) Transfer to 3Com Corporation 401(k) Plan (5,116,631) (17,354,604) (4,125,831) ------------------- --------------------- ------------------- Net decrease (4,973,295) (12,952,283) (3,701,264) Net assets available for benefits Beginning of year 4,973,295 12,952,283 3,701,264 ------------------- --------------------- ------------------- End of year $ - $ - $ - ------------------- --------------------- ------------------- ------------------- --------------------- -------------------
IDS AIM New Mutual Constellation Dimensions Fund Fund Fund -------------------- -------------------- --------------------- Additions to net assets attributed to: Investment income Interest and dividends $ 173,395 $ 20,350 $ 32,136 Net appreciation (depreciation) in fair value of investments 193,634 480,923 2,375,344 -------------------- -------------------- --------------------- 367,029 501,273 2,407,480 -------------------- -------------------- --------------------- Contributions Participants' elective deferral and rollovers 871,052 1,267,563 1,870,779 Employer 256,217 314,439 501,022 -------------------- -------------------- --------------------- 1,127,269 1,582,002 2,371,801 -------------------- -------------------- --------------------- Total additions 1,494,298 2,083,275 4,779,281 -------------------- -------------------- --------------------- Deductions from net assets attributed to: Benefits paid to participants 615,815 628,809 1,398,031 -------------------- -------------------- --------------------- Total deductions 615,815 628,809 1,398,031 -------------------- -------------------- --------------------- Net increase (decrease) prior to loans, net and transfers between funds 878,483 1,454,466 3,381,250 Loans, net (27,776) (24,278) (118,134) Transfers betweeen funds (234,350) (143,440) (154,474) Transfer to 3Com Corporation 401(k) Plan (9,119,327) (7,230,852) (18,224,782) -------------------- -------------------- --------------------- Net decrease (8,502,970) (5,944,104) (15,116,140) Net assets available for benefits Beginning of year 8,502,970 5,944,104 15,116,140 -------------------- -------------------- --------------------- End of year $ --- $ --- $ --- -------------------- -------------------- --------------------- -------------------- -------------------- ---------------------
3Com Templeton Corporation Participant Foreign Company Loan Fund Stock Fund Fund Total -------------------- --------------------- ------------------- ------------- Additions to net assets attributed to: Investment income Interest and dividends $ 15,798 $ 23,310 $ 92,912 $ 715,831 Net appreciation (depreciation) in fair value of investments 32,892 (2,882,607) --- 2,351,776 -------------------- --------------------- ------------------- ------------- 48,690 (2,859,297) 92,912 3,067,607 -------------------- --------------------- ------------------- ------------- Contributions Participants' elective deferral and rollovers 835,544 1,271,379 --- 8,597,214 Employer 212,970 361,316 --- 2,172,067 -------------------- --------------------- ------------------- ------------- 1,048,514 1,632,695 --- 10,769,281 -------------------- --------------------- ------------------- ------------- Total additions 1,097,204 (1,226,602) 92,912 13,836,888 -------------------- --------------------- ------------------- ------------- Deductions from net assets attributed to: Benefits paid to participants 371,487 410,010 166,382 5,301,443 -------------------- --------------------- ------------------- ------------- Total deductions 371,487 410,010 166,382 5,301,443 -------------------- --------------------- ------------------- ------------- Net increase (decrease) prior to loans, net and transfers between funds 725,717 (1,636,612) (73,470) 8,535,445 Loans, net (19,749) (56,111) 413,133 --- Transfers betweeen funds (268,864) (530,570) - --- Transfer to 3Com Corporation 401(k) Plan (5,457,028) (8,004,969) (2,356,568) (76,990,592) -------------------- --------------------- ------------------- ------------- Net decrease (5,019,924) (10,228,262) (2,016,905) (68,455,147) Net assets available for benefits Beginning of year 5,019,924 10,228,262 2,016,905 68,455,147 -------------------- --------------------- ------------------- ------------- End of year $ --- $ --- $ --- $ --- -------------------- --------------------- ------------------- ------------- -------------------- --------------------- ------------------- -------------
3 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 Collective IDS Money Funds- Bond Market Fund Equity Fund ------------------ -------------------- ------------------- Additions to net assets attributed to: Investment income Interest and dividends $ 207,888 $ 39 $ 252,387 Net appreciation (depreciation) in fair value of investments --- 2,694,663 34,936 ------------------ -------------------- ------------------- 207,888 2,694,702 287,323 ------------------ -------------------- ------------------- Contributions Participants' elective deferral and rollovers 1,140,374 2,634,710 1,034,231 Employer 559,237 1,025,485 451,304 ------------------ -------------------- ------------------- 1,699,611 3,660,195 1,485,535 ------------------ -------------------- ------------------- Total additions 1,907,499 6,354,897 1,772,858 ------------------ -------------------- ------------------- Deductions from net assets attributed to: Benefits paid to participants 290,050 526,746 176,759 ------------------ -------------------- ------------------- Total deductions 290,050 526,746 176,759 ------------------ -------------------- ------------------- Net increase (decrease) prior to loans, net and transfers between funds 1,617,449 5,828,151 1,596,099 Loans, net (114,911) (172,795) (66,197) Transfers betweeen funds 197,239 334,890 12,588 ------------------ -------------------- ------------------- Net increase 1,699,777 5,990,246 1,542,490 Net assets available for benefits Beginning of year 3,273,518 6,962,037 2,158,774 ------------------ -------------------- ------------------- End of year $ 4,973,295 $ 12,952,283 $ 3,701,264 ------------------ -------------------- ------------------- ------------------ -------------------- -------------------
IDS AIM New Mutual Constellation Dimensions Fund Fund Fund --------------------- -------------------- ------------------- Additions to net assets attributed to: Investment income Interest and dividends $ 1,157,984 $ 391,972 $ 1,076,165 Net appreciation (depreciation) in fair value of investments 44,610 65,308 1,500,602 --------------------- -------------------- ------------------- 1,202,594 457,280 2,576,767 --------------------- -------------------- ------------------- Contributions Participants' elective deferral and rollovers 2,018,847 2,494,437 3,963,678 Employer 880,216 923,849 1,585,555 --------------------- -------------------- ------------------- 2,899,063 3,418,286 5,549,233 --------------------- -------------------- ------------------- Total additions 4,101,657 3,875,566 8,126,000 --------------------- -------------------- ------------------- Deductions from net assets attributed to: Benefits paid to participants 541,753 250,876 964,315 --------------------- -------------------- ------------------- Total deductions 541,753 250,876 964,315 --------------------- -------------------- ------------------- Net increase (decrease) prior to loans, net and transfers between funds 3,559,904 3,624,690 7,161,685 Loans, net (158,370) (70,837) (176,467 Transfers betweeen funds (280,743) (348,697) (539,635 --------------------- -------------------- ------------------- Net increase 3,120,791 3,205,156 6,445,583 Net assets available for benefits Beginning of year 5,382,179 2,738,948 8,670,557 --------------------- -------------------- ------------------- End of year $ 8,502,970 $ 5,944,104 $ 15,116,140 --------------------- -------------------- ------------------- --------------------- -------------------- -------------------
3Com Templeton Corporation Participant Foreign Company Loan Fund Stock Fund Fund Total --------------------- -------------------- ------------------ ---------- Additions to net assets attributed to: Investment income Interest and dividends $ 508,696 $ 74 $ 112,536 $ 3,707,741 Net appreciation (depreciation) in fair value of investments (320,311) (1,031,531) --- 2,988,277 --------------------- -------------------- ------------------ ----------- 188,385 (1,031,457) 112,536 6,696,018 --------------------- -------------------- ------------------ ----------- Contributions Participants' elective deferral and rollovers 1,680,218 3,142,651 --- 18,109,146 Employer 654,398 1,472,336 --- 7,552,380 --------------------- -------------------- ------------------ ----------- 2,334,616 4,614,987 --- 25,661,526 --------------------- -------------------- ------------------ ----------- Total additions 2,523,001 3,583,530 112,536 32,357,544 --------------------- -------------------- ------------------ ----------- Deductions from net assets attributed to: Benefits paid to participants 306,189 448,322 146,388 3,651,398 --------------------- -------------------- ------------------ ----------- Total deductions 306,189 448,322 146,388 3,651,398 --------------------- -------------------- ------------------ ----------- Net increase (decrease) prior to loans, net and transfers between funds 2,216,812 3,135,208 (33,852) 28,706,146 Loans, net (57,705) (186,493) 1,003,775 --- Transfers betweeen funds 48,804 575,554 --- --- --------------------- -------------------- ------------------ ----------- Net increase 2,207,911 3,524,269 969,923 28,706,146 Net assets available for benefits Beginning of year 2,812,013 6,703,993 1,046,982 39,749,001 --------------------- -------------------- ------------------ ----------- End of year $ 5,019,924 $ 10,228,262 $ 2,016,905 $68,455,147 --------------------- -------------------- ------------------ ----------- --------------------- -------------------- ------------------ -----------
4 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 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 summary plan description 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 $10,000 and $9,500 in 1998 and 1997, respectively. D. EMPLOYER CONTRIBUTIONS: The Employer will make a matching contribution equal to a percentage of eligible compensation. In 1998 and 1997, 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 year 1997, the Employer contributed an additional amount of $500 to all participants who were authorizing contributions to the Plan, were actively employed, and either completed 1,000 hours of service as of the last day of the Plan year or who terminated their employment with the Company during the Plan year as a result of attaining normal retirement age (65), death, or disability. No additional contributions were made by the Employer during 1998. 5 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 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: 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 investment 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's investment objective is to provide shareholders with a balance of growth of capital and current income. AIM CONSTELLATION FUND - The AIM Constellation Fund's investment objective is to seek capital appreciation primarily through investments in common stock of emerging growth companies. NEW DIMENSIONS FUND - The New Dimensions Fund's investment objective is to provide shareholders with long-term growth of capital. 6 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 1 - DESCRIPTION OF THE PLAN - (CONTINUED) G. INVESTMENT OPTIONS: (Continued) TEMPLETON FOREIGN FUND - The Foreign Fund's investment objective is 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 - The 3Com Corporation Company Stock Fund's (formerly the Fund held U.S. Robotics Corporation Common Stock) investment 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 and rollover 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. I. DISTRIBUTIONS: Upon attaining normal retirement age, death, financial hardship, termination of employment or disability, participants can 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. Due to the Plan merger discussed in Note 6, there were no amounts due to participants who had separated from service as of December 31, 1998. As of December 31, 1997, amounts due to participants who had separated from service were $441,814. 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. 7 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 1 - DESCRIPTION OF THE PLAN - (CONTINUED) K. 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. served as Trustee and Record-keeper. L. FORFEITURES: Forfeitures resulting from the termination of a participant whose account is not 100% vested at such time, can be used by the Plan to reduce employer contributions or to pay administrative expenses. For the year ended December 31, 1998, forfeitures were used to reduce employer matching contributions. For the year ended December 31, 1997, forfeited non-vested accounts remained in a forfeiture holding account. M. ADMINISTRATIVE EXPENSES: For the years ended December 31, 1998 and 1997, all administrative expenses of the Plan were paid by the Company. 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. 8 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) 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 years ended December 31, 1998 and 1997, and (b) the net realized gains (losses) on dispositions of investments during the years is reflected as net appreciation (depreciation) in the fair value of investments. D. 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"), therefore, no provision has been made for taxes. 9 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 4 - INVESTMENTS A schedule which represents the values as defined in Note 2 of the Plan's investments at December 31, 1997 is as follows: Investments at fair value as determined by quoted market prices:
Money Market Fund $ 4,724,188 * AETC Collective Funds - Equity 12,438,766 * IDS Bond Fund 3,509,631 * IDS Mutual Fund 8,157,366 * AIM Constellation Fund 5,503,340 * New Dimensions Fund 14,482,240 * Templeton Foreign Fund 4,728,685 * 3Com Corporation Company Stock Fund 9,575,008 * ------------- $63,119,224 Participant loans, at estimated fair value 2,016,905 ------------- Total investments $2,016,905 =============
* Represents 5% or more of net assets. NOTE 5 - 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, 1998 and 1997 to Form 5500:
1998 1997 ------------- ------------- Net assets available for benefits per the financial statement s $ --- $68,455,147 Less: Amounts allocated to terminated participants (441,814) --- ------------- ------------ Net assets available for benefits per Form 5500 $ --- $68,455,147 ============= ============
10 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1998 AND 1997 NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 - (CONTINUED) The following is a reconciliation of benefits paid to participants per the financial statements for the years ended December 31, 1998 and 1997 to Form 5500:
1998 1997 ------------- ------------- Benefits paid to participants per the financial statements $ 5,301,443 $ 3,651,398 Add: Amounts allocated to withdrawing participants at end of year --- 441,814 Less: Amounts allocated to withdrawing participants at beginning of year (441,814) --- ------------- ------------- Benefits paid to participants per Form 5500 $4,859,629 $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 year end but not yet paid as of that date. Due to the Plan merger discussed in Note 6, there were no amounts allocated to withdrawing participants as of December 31, 1998. NOTE 6 - 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 pursuant to the terms of the merger agreement. U.S. Robotics Corporation, as a wholly owned subsidiary of 3Com Corporation continued as the "Employer" or "Company" and the Plan Administrator until the Plan merged with and into the 3Com Corporation 401(k) Plan during August 1998. 11 SUPPLEMENTAL SCHEDULE 12 U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN EIN 36-3994412 Plan No. 001 Form 5500 Line 27d -- Schedule of Reportable Transactions For the Year Ended December 31, 1998
(a) (b) (c) (d) Identity of Party Purchase Selling Involved Description of Asset Price Price - ------------------------------------------------ --------------------------------- -------------------- -------------------- Category (I) - Single Transactions American Express Trust, Inc. Money Market Fund II $ - $ 5,116,631 American Express Trust, Inc. Equity Index Fund - 17,354,608 American Express Trust, Inc. IDS Bond Fund - 4,125,831 American Express Trust, Inc. IDS Mutual Fund - 9,119,149 AIM Equity Fund Inc. Constellation Fund - 7,230,855 American Express Financial Advisors IDS New Dimensions Fund - 18,224,782 Templeton Funds Inc. Foreign Fund - 5,457,030 3Com Corporation Common Stock 8,002,418 - 3Com Corporation Common Stock - 8,002,418 Category (iii) - Series of Transactions American Express Trust, Inc. Money Market Fund I 4,176,451 - American Express Trust, Inc. Money Market Fund I - 4,602,185 American Express Trust, Inc. Money Market Fund II 2,194,714 - American Express Trust, Inc. Money Market Fund II - 1,802,272 American Express Trust, Inc. Equity Index Fund 3,792,463 - American Express Trust, Inc. Equity Index Fund - 1,030,318 American Express Financial Advisors IDS New Dimensions Fund 3,181,288 - American Express Financial Advisors IDS New Dimensions Fund - 1,814,013 3Com Corporation Common Stock 2,676,247 - 3Com Corporation Common Stock - 927,969
(a) (e) (f) (g) Identity of Party Lease Incurred with Cost Involved Rental Transaction of Asset - ------------------------------------------------ ------------- ----------------- ------------------- Category (I) - Single Transactions American Express Trust, Inc. N/A $ - $ 5,116,631 American Express Trust, Inc. N/A - 12,384,582 American Express Trust, Inc. N/A - 4,088,600 American Express Trust, Inc. N/A - 8,982,453 AIM Equity Fund Inc. N/A - 6,794,946 American Express Financial Advisors N/A - 14,403,801 Templeton Funds Inc. N/A - 5,635,626 3Com Corporation N/A - - 3Com Corporation N/A - 11,532,074 Category (iii) - Series of Transactions American Express Trust, Inc. N/A - - American Express Trust, Inc. N/A - 4,602,185 American Express Trust, Inc. N/A - - American Express Trust, Inc. N/A - 1,802,272 American Express Trust, Inc. N/A - - American Express Trust, Inc. N/A - 688,037 American Express Financial Advisors N/A - - American Express Financial Advisors N/A - 1,418,357 3Com Corporation N/A - - 3Com Corporation N/A - 1,022,431
(a) (h) (i) Current Value Identity of Party of Asset on Net Gain Involved Transaction Date or (Loss) - ------------------------------------------------ --------------------- ------------------ Category (I) - Single Transactions American Express Trust, Inc. $ 5,116,631 $ - American Express Trust, Inc. 17,354,608 4,970,026 American Express Trust, Inc. 4,125,831 37,231 American Express Trust, Inc. 9,119,149 136,696 AIM Equity Fund Inc. 7,230,855 435,909 American Express Financial Advisors 18,224,782 3,820,981 Templeton Funds Inc. 5,457,030 (178,596) 3Com Corporation 8,002,418 - 3Com Corporation 8,002,418 (3,529,656) Category (iii) - Series of Transactions American Express Trust, Inc. 4,176,451 - American Express Trust, Inc. 4,602,185 - American Express Trust, Inc. 2,194,714 - American Express Trust, Inc. 1,802,272 - American Express Trust, Inc. 3,792,463 - American Express Trust, Inc. 1,030,318 342,281 American Express Financial Advisors 3,181,288 - American Express Financial Advisors 1,814,013 395,656 3Com Corporation 2,676,247 - 3Com Corporation 927,969 (94,462)
13 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: June 23,1999 By: /s/ Arthur Taylor ------------------------------ (Signature) Name: Arthur Taylor Title: Treasurer 3COM CORPORATION ON BEHALF OF THE PLAN ADMINISTRATOR OF THE U.S. ROBOTICS CORPORATION 401(k) RETIREMENT SAVINGS PLAN [MORRIS, DAVIS & CHAN, LLP LETTERHEAD] 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 March 26, 1999 with respect to the financial statements and schedule 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, 1998. /s/ Morris, Davis & Chan - ----------------------------- Morris, Davis & Chan Oakland, California March 26, 1999 -----END PRIVACY-ENHANCED MESSAGE-----