Letter Agreement

Amendment to Letter Agreement

Change of Control Agreement

 

 

 

 

 

 

Dave DeWalt

February 23, 2007

 

     We are pleased to offer you a position with McAfee, Inc. (the “Company”) as President and Chief Executive Officer reporting to the Company’s Board of Directors (the “Board”). Your employment with the Company in such position will commence on or prior to April 2, 2007. As of the date your employment with the Company commences (the “Employment Commencement Date”), you agree to render such business and professional services in the performance of your duties, consistent with your title and position within the Company, as will reasonably be assigned to you by the Board, as well as any other reasonable duties assigned to you by the Board. You and the Company agree that your employment with the Company constitutes “at-will” employment and this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of you or the Company. The period you are employed by the Company is referred to herein as the “Employment Term.”

     During the Employment Term, you agree to devote your full business efforts and time to the Company and will use good faith efforts to discharge your obligations to the best of your ability and in accordance with the Company’s written guidelines and policies. For the duration of the Employment Term, you agree not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration without the prior approval of the Board or its Compensation Committee (the “Compensation Committee”). You shall be permitted to continue serving on the board of directors (and committees thereof) of Polycom, Inc.; provided, however, that service on any other board of directors or advisory committees shall only be permitted with the prior consent of the Board.

     You will be appointed to serve as a member of the Board as of the Employment Commencement Date, and agree to serve as a Board member without additional compensation. During the Employment Term, at each annual meeting of the Company’s stockholders at which your term as a member of the Board has expired, the Company will nominate you to serve as a member of the Board. Your service as a member of the Board will be subject to any required stockholder approval. Upon the termination of your employment for any reason, unless otherwise requested by the Board, you will be deemed to have resigned from the Board voluntarily as of the end of your employment and at the Board’s request, you agree to execute any documents necessary to reflect your resignation.

     The Company will pay you an annual salary of $900,000 as compensation for your services (the “Base Salary”). Your Base Salary will be subject to annual review by the Board or

 

 

Compensation Committee for possible increases, but may only be decreased with your consent. You will also be eligible to receive an annual target bonus equal to $1,000,000 (the “Target Bonus”). The actual bonus you will receive, if any, will depend upon the extent to which the applicable performance goal(s) specified by the Board or the Committee are achieved or exceeded. Your earned bonus for fiscal year 2007 will be no less than $600,000. Any bonus earned pursuant to this offer letter agreement will be paid to you within two and one-half months of the completion of the fiscal year during which the bonus was earned.

     You will be eligible to participate in all Company employee benefit plans, policies and arrangements that are applicable to other senior executive officers of the Company. You will be entitled to receive paid annual vacation with vacation accrual of not less than twenty (20) days per year in accordance with Company policy. The Company will reimburse you for reasonable travel and other business expenses incurred by you in the furtherance of your duties to the Company, in accordance with the Company’s expense reimbursement policy. You shall be permitted to fly in business class when traveling on Company business, or first class if business class is unavailable.

     As a condition of your employment, you agree to relocate your primary residence to the Dallas-Fort Worth area within six (6) months of the Employment Commencement Date. In connection with this relocation, the Company will reimburse your reasonable expenses relating to the following: (i) the transaction costs incurred by you relating to the purchase of a residence in the Dallas-Fort Worth area; (ii) the transaction costs incurred by you relating to the sale of your real estate properties in California up to a maximum of $300,000; (iii) the costs associated with moving your household goods and personal items to the Dallas-Fort Worth area, and (iv) the costs associated with up to three (3) trips by you and your family to the Dallas-Fort Worth area to secure housing in the Dallas-Fort Worth area. In addition, for the earlier of six (6) months from the Employment Commencement Date or the date you and your family have established your primary residence in the Dallas-Fort Worth area, the Company will reimburse you for: (i) your reasonable temporary housing costs in the Dallas-Fort Worth area, and (ii) your reasonable expenses for weekly round-trip airfare to California.

     The Company will grant you an option to purchase 500,000 shares of the Company’s stock (the “Option”). The Company will grant the option in accordance with its current and customary practice which would be part of its normal compensation committee meetings at the next quarterly board meeting. The exercise price of the Option will equal 100% of the fair market value of the Company’s common stock on the date of grant. The Option will be scheduled to vest as follows: 25% of the shares subject to the Option will vest on the first anniversary of the grant and 1/48 of the shares originally subject to the Option will be scheduled to vest monthly thereafter assuming your continued service with the Company on each scheduled vesting date, so as to be 100% vested on the fourth anniversary of the grant. The Option grant will be contingent on your executing the Company’s standard stock option agreement and will be subject to the terms and conditions of the 1997 Stock Incentive Plan (the “Plan”). Your ability to exercise the Option, however, will be delayed until such time as the Company’s S-8 registration statement covering shares issuable under the Plan becomes effective (the “S-8 Effective Date”).

 

 

     Additionally, within one (1) week after the S-8 Effective Date, the Company will grant you 125,000 stock units (the “First Stock Unit Grant”). The First Stock Unit Grant will be scheduled to vest as follows: (i) one-third of the stock units will vest on the first anniversary of the Employment Commencement Date; (ii) one-third of the stock units will vest on the second anniversary of the Employment Commencement Date, and (iii) one-third of the stock units will vest on the third anniversary of the Employment Commencement Date, assuming your continued service with the Company through each scheduled vesting date. The First Stock Unit Grant will be contingent on your executing the Company’s standard stock unit agreement and will be subject to the terms and conditions of the Plan.

     Within one (1) week after the S-8 Effective Date, the Company will grant you an additional 125,000 stock units (the “Second Stock Unit Grant”). The Second Stock Unit Grant will vest as follows: (i) one-third of the stock units will vest two business days following the Company’s public disclosure of earnings relating to the quarter ending in the first anniversary of the Employment Commencement Date; (ii) one-third of the stock units will vest two business days following the Company’s public disclosure of earnings relating to the quarter ending in the second anniversary of the Employment Commencement Date; and, (iii) one-third of the stock units will vest two business days following the Company’s public disclosure of earnings relating to the quarter ending in the third anniversary of the Employment Commencement Date, assuming your continued service with the Company through each scheduled vesting date, and subject, in each case, to the Company meeting specific qualitative and quantitative pro forma earnings per share and other milestones, with the specific pro forma earnings per share and other milestones to be determined by the Compensation Committee of the Board, following consultation with you, no later than the end of the period required to qualify such grant as performance-based compensation under Internal Revenue Code Section 162(m). Such pre-established, objective performance milestones will include, among other criteria, specific standards relating to the correlation between partial milestone achievement and partial vesting, cumulative milestone achievement and possible catch up vesting and acceleration of vesting if certain milestones are exceeded. To the extent Second Stock Unit Grant does not vest, it shall be forfeited. The Second Stock Unit Grant will be contingent on your executing the Company’s standard stock unit agreement and will be subject to the terms and conditions of the Plan.

     You will be eligible to receive additional equity grants on an annual basis consistent with the normal compensation practices of the Company.

     If your employment is terminated by the Company without Cause or if you resign for Good Reason, then subject to your executing and not revoking a release of claims in a form satisfactory to the Company (a “Release”), you will receive, less applicable tax withholdings: (i) a lump sum payment equal to your Base Salary; (ii) a lump sum payment equal to the current year’s Target Bonus; (iii) accelerated vesting on the next unvested tranche of the First Stock Unit Grant; and (iv) reimbursement for premiums paid for continued health benefits for you and your covered dependents under the Company’s health plans for twelve (12) months, payable when such premiums are due (provided you validly elect to continue coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)). Severance payments and benefits may be delayed in order to comply with the provisions of Internal Revenue Code Section 409A and the proposed or final regulations issued thereunder. No severance or other

 

     benefits pursuant to this offer letter agreement will be paid or provided until the Release becomes effective.

     If your employment is terminated by the Company without Cause or if you resign for Good Reason, and such termination occurs within twelve (12) months following a Change of Control, then subject to your executing and not revoking a Release, you will receive, less applicable tax withholdings: (i) a lump sum payment equal to your Base Salary; (ii) a lump sum payment equal to the current year’s Target Bonus; (iii) accelerated vesting on the Option equal to the greater of (A) twelve (12) months accelerated vesting, or (B) 50% of the then unvested shares accelerated vesting, and (iv) reimbursement for premiums paid for continued health benefits for you and your covered dependents under the Company’s health plans for twelve (12) months, payable when such premiums are due (provided you validly elect to continue coverage under COBRA). Severance payments and benefits may be delayed in order to comply with the provisions of Internal Revenue Code Section 409A and the proposed or final regulations issued thereunder. No severance or other benefits pursuant to this offer letter agreement will be paid or provided until the Release becomes effective.

     For the purposes of this offer letter agreement, “Cause” will be defined as a termination of your employment, based upon a good faith determination of the Board, for any of the following reasons: (i) any act of misconduct or dishonesty by you in the performance of your duties under this offer letter agreement; (ii) any willful failure by you to attend to your duties specified under this offer letter agreement; (iii) your material breach of this offer letter agreement after (with respect to curable material breaches only) there has been delivered to you a written demand for performance from the Board which describes the basis for the Board’s belief that you have materially breached your obligations under this offer letter agreement and you have not taken corrective action with regard to any such material breach within thirty (30) days receiving such written demand; (iv) your conviction of (or pleading guilty or nolo contendere to) any felony or misdemeanor involving theft, embezzlement, dishonesty or moral turpitude, or (v) your unsatisfactory performance of your duties as determined by the Board, after there has been delivered to you a written demand for performance from the Board which describes the basis for the Board’s belief that you have not satisfactorily performed your duties and you have not taken adequate corrective action within thirty (30) days of receiving such written demand.

     For the purposes of this offer letter agreement, “Change of Control” will have the same meaning as a “Transfer of Control” as defined in the Plan.

     For the purposes of this offer letter agreement, “Good Reason” will mean, without your consent: (i) a reduction of your Base Salary or Target Bonus below the amounts set forth in this offer letter agreement; (ii) a material reduction in the aggregate benefits provided in this offer letter agreement; provided, however, that if such reduction is part of a reduction generally applicable to the Company’s senior executives, it shall not constitute Good Reason; (iii) any reduction in your title, (iv) a material reduction in your duties or responsibilities; provided, however, that so long as you remain the Chief Executive Officer and President of the Company following a Change of Control in which neither the Company’s nor its acquirer’s equity securities are publicly traded on an established national securities market, the reduction in your duties and responsibilities as a result of such a going private transaction shall not in and of itself constitute Good Reason, or (iv) requiring you to relocate to a location more than thirty-five (35)

 

 

miles from your then current office location, provided, however, that Good Reason shall not exist unless you have provided the Company with written notice of the purported grounds for such Good Reason and such purported grounds are not cured within thirty (30) days of the Company’s receipt of such written notice.

     The receipt of any severance or other benefits pursuant to this offer letter agreement will be subject to you agreeing that during the Employment Term and for a period of eighteen (18) months following the termination of your employment, you will not: (i) solicit any employee or consultant of the Company for employment other than at the Company, or (ii) directly or indirectly engage in, have any ownership interest in or participate in any entity that as of the date of termination, competes with the Company in any substantial business of the Company or any business reasonably expected to become a substantial business of the Company.

     Subject to applicable law, you will be provided indemnification to the maximum extent permitted by the Company’s Articles of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.

     You agree that any dispute or controversy arising out of, relating to, or in connection with this offer letter agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, will be finally settled by binding arbitration to be held in Dallas, Texas under the American Arbitration Association National Rules for the Resolution of Employment Disputes, supplemented by the Texas Rules of Civil Procedure, as then in effect (the “Rules”). The arbitrator(s) may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator(s) will be final, conclusive and binding on the parties to the arbitration, and judgment may be entered on the decision of the arbitrator(s) in any court having jurisdiction. The Company will pay the costs and expenses of such arbitration, and each party will pay its own counsel fees and expenses.

     This offer letter agreement will be governed by and construed in accordance with the internal substantive laws, but not the choice of law rules, of the State of Texas. You hereby consent to the personal jurisdiction of the state and federal courts located in Texas for any action or proceeding arising from or relating to this offer letter agreement or relating to any arbitration in which you and the Company are participants.

     The Company will reimburse you up to $15,000 for reasonable and actual legal expenses incurred by you in connection with the negotiation, preparation and execution of this offer letter agreement.

     You and the Company agree to work together in good faith to consider amendments to this offer letter agreement necessary or appropriate to avoid imposition of any additional tax or income recognition to you under Internal Revenue Code Section 409A and the proposed or final regulations issued thereunder.

     Enclosed is a copy of our standard Proprietary Information Agreement. This offer of employment is contingent on you executing this Proprietary Information Agreement and upon

 

 

     the satisfactory completion of a background check in accordance with the Company’s policy.

     If you wish to accept employment at the Company under the terms set out above, please sign and date this letter and return it to me no later than March 9, 2007, keeping a copy for your records.

We look forward to your leading the McAfee team!

 

 

 

 

 

 

Sincerely,


/s/ Charles J. Robel

Charles J. Robel
Chairman of the Board
 

 

 

 

 

 

 

 

 

 

 

 

     I have read and accept the above:

/s/ Dave DeWalt

 

3/5/07

 

 

 

Signature

 

Date Signed

 

4/2/07

 

 

 

 

 

Start Date

 

 

 

 

 

 

Amendment

 

 On February 5, 2008, McAfee, Inc. (“McAfee”) and David DeWalt amended the terms (the “Amendment”) to that certain offer letter agreement, dated as of February 23, 2007, pursuant to which Mr. DeWalt became the president and chief executive officer of McAfee (the “Letter Agreement”).

     The Amendment alters and amends the terms of the vesting of an equity award (the “Second Stock Unit Grant”) that McAfee agreed to grant Mr. DeWalt pursuant to the terms of the Letter Agreement so that the vesting of the Second Stock Unit Grant is linked to the filing of McAfee’s Annual Reports on Form 10-K for the years ended December 31, 2007, 2008 and 2009. The size of the Second Stock Unit Grant is unchanged by the Amendment.

     The Second Stock Unit Grant will vest as follows: (i) one-third (1/3rd) of the stock units will be fully vested upon grant (based upon achievement of performance measures established for a period ending on December 31, 2007), but will not be settled until two (2) business days following the date on which McAfee files with the Securities and Exchange Commission (the “SEC”) its Annual Report on Form 10-K for the year ending December 31, 2007 but in no event after March 15, 2009; (ii) one-third (1/3rd) of the stock units will vest based upon McAfee’s performance from January 1, 2008 through December 31, 2008 and will be settled two (2) business days following the date on which McAfee files with the SEC its Annual Report on Form 10-K for the year ending December 31, 2008; and, (iii) one-third (1/3rd) of the stock units will vest based upon McAfee’s performance from January 1, 2009 through December 31, 2009 and will be settled two (2) business days following the date on which McAfee files with the SEC its Annual Report on Form 10-K for the year ending December 31, 2009. In no event will the tranches vesting for 2008 and 2009 service be paid after March 15, 2009 and March 15, 2010, respectively.

     All future vesting is subject to Mr. Dewalt’s continued service through December 31, 2008 and December 31, 2009 respectively, and subject, in each case, to McAfee meeting specific qualitative and quantitative non-GAAP earnings per share and other milestones, with the specific non-GAAP earnings per share and other milestones to be determined by the Compensation Committee of the Board. To the extent the Second Stock Unit Grant does not vest, it shall be forfeited. The Second Stock Unit Grant will be contingent on Mr. DeWalt executing McAfee’s standard stock unit agreement and will be subject to the terms and conditions of the McAfee’s 1997 Stock Incentive Plan.

     The foregoing description of the Letter Agreement is qualified in its entirety by the terms of the Letter Agreement, as filed as Exhibit 10.1 to McAfee’s Current Report on Form 8-K filed with the SEC on March 8, 2007.

 

 

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

McAfee, Inc.
 

 

Date: February 11, 2008 

By:  

/s/ Eric F. Brown  

 

 

 

Eric F. Brown 

 

 

 

Chief Operating Officer and Chief
Financial Officer 

 

 

 

 

 

 

 

EX-10.1 2 d66095exv10w1.htm EX-10.1

Exhibit 10.1

McAFEE, INC.

CHANGE OF CONTROL AND RETENTION AGREEMENT

     This Change of Control and Retention Agreement (the “Agreement”) is made and entered into by and between David G. DeWalt (the “Employee”) and McAfee, Inc. (the “Company”), effective as of December 12, 2008 (the “Effective Date”).

RECITALS

     It is possible that the Company may from time to time receive acquisition proposals by other entities. The Compensation Committee of the Board of Directors of the Company (the “Committee”) recognizes that consideration of any such proposals can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities. The Committee has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a “Change of Control” (as defined herein) of the Company.

     The Committee believes that it is in the best interests of the Company and its stockholders to provide the Employee with an incentive to continue his or her employment and to motivate the Employee to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

     The Committee believes that it is imperative to provide the Employee with certain benefits upon the Employee’s termination of employment following a Change of Control. These benefits will provide the Employee with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.

     This Agreement also consolidates the documentation of severance benefits to which the Employee may be entitled in the event of the Employee’s termination of employment with the Company under specified circumstances not in connection with a Change of Control.

     Certain capitalized terms used in the Agreement are defined in Section 6 below.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1.

 

Term of Agreement. The term of this Agreement shall commence on the Effective Date and continue through February 15, 2010. If a Potential Change in Control Date has occurred prior to the expiration of this Agreement, this Agreement shall remain in effect until the earliest of:

 

(a)

 

eighteen (18) months after the Change of Control Date, if a Change of Control has been completed, and automatically terminate following the eighteen month anniversary of the Change of Control Date, so long as all payments due under Section 3(c) and 4 of this Agreement have been made; or

 

 

(b)

 

twelve (12) months after the Potential Change of Control Date if no Change of Control has been completed; provided, however, that in the event of a protracted regulatory clearance

 

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process with respect to a Potential Change of Control, such term shall be extended so long as the Company is pursuing the Potential Change of Control in good faith.

2.

 

At-Will Employment. The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law, except as otherwise may be provided specifically under the terms of any written formal employment agreement or offer letter between the Company and the Employee (an “Employment Agreement”). If the Employee’s employment terminates for any reason, including (without limitation) any termination prior to a Change of Control, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans other than any Employment Agreement. To the extent the Employee has entered into an employment agreement or other written employment related document with the Company, its applicability will not be changed by this Agreement, except with respect to any provisions that provide for payments or other benefits upon termination of employment.

 

3.

 

Severance Benefits.

 

 

(a)

 

In addition to the benefits described below, the Employee will be entitled to receive payment for:

 

(i)

 

Accrued Salary and Vacation. All salary and accrued vacation earned through the Termination Date, less applicable federal and state withholding.

 

 

(ii)

 

Expense Reimbursement. Within thirty (30) days of submission of proper expense reports by the Employee, the Company shall reimburse the Employee for all expenses incurred by the Employee, consistent with past practices, in connection with the business of the Company prior to the Employee’s termination of employment.

 

(iii)

 

Employee Benefits. Benefits, if any, under any 401(k) plan, nonqualified deferred compensation plan, employee stock purchase plan and other Company benefit plans under which the Employee may be entitled to benefits, payable pursuant to the terms of such plans.

 

 

(b)

 

Involuntary Termination other than for Cause or Resignation for Good Reason OTHER THAN During the Change of Control Period. If (i) the Employee resigns his or her employment with the Company (or any parent or subsidiary of the Company) for “Non-Change of Control Period Good Reason” (as defined herein), or (ii) the Company (or any parent or subsidiary of the Company) terminates the Employee’s employment for other than “Cause” (as defined herein), such termination is not within the period ending eighteen (18) months following a Change of Control Date (the “Change of Control Period”) and, the Employee (X) complies with the Company’s sub-certification requirements that have been implemented to ensure compliance with the Sarbanes Oxley Act 2002 in form and substance determined by the Company in its complete discretion, and (Y) signs and does not revoke a standard release of claims with the Company in a form substantially similar to that attached hereto as Exhibit A (a “Release”), then the Employee shall receive the following severance benefits from the Company:

 

(i)

 

Severance Payment. The Employee shall receive a lump-sum severance payment (less applicable tax withholding) equal to twelve (12) months of the Employee’s Base Salary plus a pro rata fraction of 110% of the Employee’s Base Salary with the

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fraction determined as the number of days in the year to the date of termination divided by 365.

 

(ii)

 

Additional Severance Payment. If the Employee is covered by the Company health care plan, the Employee shall receive a lump sum cash payment equal to twelve (12) multiplied by the cost of a single month of COBRA coverage at the rates in effect on the date of termination. If such coverage included the Employee’s dependents immediately prior to the Employee’s termination of employment with the Company, such payment shall also include the cost of COBRA coverage for the Employee’s dependents.

 

 

(iii)

 

Initial Restricted Stock Unit Acceleration. Employee’s restricted stock unit granted on February 11, 2008 with respect to 125,000 shares of the Company’s stock shall have its vesting accelerated as of the date of termination so that it is vested to the extent that it would have been vested if Employee had remained employed through the one-year anniversary of the date of termination.

 

 

(c)

 

Involuntary Termination Other than for Cause or Resignation for Good Reason DURING the Change of Control Period. If within the Change of Control Period, (i) the Employee resigns his or her employment with the Company (or any parent or subsidiary of the Company) for “Change of Control Period Good Reason” (as defined herein), or (ii) the Company (or any parent or subsidiary of the Company) terminates the Employee’s employment for other than “Cause” (as defined herein), the Employee’s death or the Employee’s Disability (as defined herein), and, the Employee (X) complies with the Company’s sub-certification requirements that have been implemented to ensure compliance with the Sarbanes Oxley Act 2002 in form and substance determined by the Company in its complete discretion, and (Y) signs and does not revoke a Release, then the Employee shall receive the following severance benefits from the Company:

 

(i)

 

Severance Payment. The Employee shall receive a lump-sum severance payment (less applicable tax withholding) equal to twenty four (24) months of the Employee’s Base Salary plus an amount equal to 200% of his Target Bonus for the fiscal year in which the Change of Control or the Employee’s termination occurs, whichever is greater.

 

 

(ii)

 

Equity Awards. All of the Employee’s then-outstanding equity awards covering shares of the Company’s common stock (“Equity Awards”) shall vest one hundred percent (100%) as of the date of termination.

 

 

(iii)

 

Additional Severance Payment. If the Employee is covered by the Company health care plan, the Employee shall receive a cash payment equal to twelve (12) multiplied by the cost of a single month of COBRA coverage at the rates in effect on the date of termination. If such coverage included the Employee’s dependents immediately prior to the Employee’s termination of employment with the Company, such payment shall also include the cost of COBRA coverage for the Employee’s dependents.

 

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(iv)

 

Special Termination. Notwithstanding the foregoing, if the Employee’s employment is terminated by the Company without Cause prior to the Change of Control Date but on or after a Potential Change of Control Date, then the Company will provide to the Employee the payments and benefits as provided in Section 3(c), in lieu of Section 3(b); provided, however, that if the Company reasonably demonstrates that the Employee’s termination of employment (X) was not at the request of a third party who has taken steps reasonably calculated to effect a Change of Control, and (Y) would have occurred absent the Change of Control, then Section 3(b) shall apply in lieu of Section 3(c). Solely for purposes of determining the timing of payments and the provision of benefits under the circumstances described in this Section 3(c)(iv), the Employee’s date of termination shall be deemed to be the Change of Control Date.

 

 

(d)

 

Timing of Severance Payments. Other than with respect to the payments made under Section 3(a), the severance payments to which the Employee is entitled will be subject to the Employee signing and not revoking the Release and provided that such Release is effective within sixty (60) days following the termination of employment. Such payments will be made to the Employee in cash and in full, not later than seven (7) calendar days after the effective date of any Release. In the event the termination occurs at a time during the calendar year where it would be possible for the Release to become effective in the calendar year following the calendar year in which the Employee’s termination occurs, any severance that would be considered Deferred Compensation Separation Benefits (as defined in Section 3(g)) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or such later time as required by the payment schedule applicable to each payment or benefit, or Section 3(g).

 

 

(e)

 

Voluntary Resignation; Termination for Cause, Death or Disability. If the Employee’s employment with the Company terminates (i) voluntarily by the Employee other than for Good Reason or Disability, (ii) for Cause by the Company, or (iii) pursuant to the Employee’s death or Disability, then the Employee shall not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company.

 

 

(f)

 

Exclusive Remedy. In the event of a termination of the Employee’s employment, the provisions of this Section 3 are intended to be and are exclusive and in lieu of any other rights or remedies to which the Employee or the Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement. The Employee shall be entitled to no benefits, compensation or other payments or rights upon termination of employment other than those benefits expressly set forth in this Section 3.

 

 

(g)

 

Code Section 409A.

 

(i)

 

Notwithstanding anything to the contrary in this Agreement, if the Employee is a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and any guidance promulgated thereunder (“Section 409A”) at the time of the Employee’s termination (other than due to death) or resignation, then the severance payable to the Employee, if any, pursuant to this Agreement, when considered together with any other severance payments or separation benefits that are considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”)

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that are payable within the first six (6) months following the Employee’s termination of employment, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of the Employee’s termination of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if the Employee dies following his or her termination but prior to the six (6) month anniversary of his or her termination, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of the Employee’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

(ii)

 

Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above.

 

 

(iii)

 

Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do not exceed the Section 409A Limit shall not constitute Deferred Compensation Separation Benefits for purposes of clause (i) above. “Section 409A Limit” will mean the lesser of two (2) times: (i) the Employee’s annualized compensation based upon the annual rate of pay paid to the Employee during the Employee’s taxable year preceding the Employee’s taxable year of the Employee’s termination of employment as determined under, and with such adjustments as are set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the Employee’s employment is terminated.

 

 

(iv)

 

The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and the Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Section 409A.

 

4.

 

Treatment of Performance-Based Equity. Upon the occurrence of a Change of Control, all of the Employee’s outstanding Equity Awards scheduled to vest based on performance shall convert to be awards with time-based vesting. As of the date of the Change of Control, the awards will be vested as to the extent that they would have been vested if they had been granted originally with a four year time-based vesting schedule with annual vesting. The vesting of such Equity Awards will continue after the Change of Control, assuming continuous service, based upon the same time-based vesting schedule. To the extent that such Equity Awards are not fully vested at the 18-month anniversary of the Change of Control, on such 18 month anniversary they will be 100% vested. The acceleration

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provisions of Section 3 will govern any terminations of employment prior to the 18-month anniversary of the Change of Control.

5.

 

Golden Parachute Excise Tax Best Results. In the event that the severance and other benefits provided for in this agreement or otherwise payable to the Employee (X) constitute “parachute payments” within the meaning of Code Section 280G, and (Y) would be subject to the excise tax imposed by Section 4999 of the Code, then such benefits shall be either:

 

 

(a)

 

delivered in full, or

 

 

(b)

 

delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999, results in the receipt by the Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, the determination of the Employee’s excise tax liability and the amount required to be paid under this Section 5 shall be made in writing by a nationally-recognized independent accounting firm selected by the Company (the “Accountants”). For purposes of making the calculations required by this Section 5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 5. Any reduction in payments and/or benefits required by this Section 5 shall occur in the following order: (1) reduction of cash payments; (2) reduction of acceleration of vesting of equity awards; and (3) reduction of other benefits paid to the Employee. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant for the Employee’s equity awards.

6.

 

Definition of Terms. The following terms referred to in this Agreement shall have the following meanings:

 

 

(a)

 

Base Salary. Base Salary means:

 

(i)

 

with respect to payments set forth in Section 3(c) above, the rate of annual base salary paid to the Employee immediately prior to a Change of Control, provided that such amount shall in no event be less than the highest rate of annual base salary paid to the Employee during the one (1) year period immediately prior to the Change of Control; or

 

 

(ii)

 

with respect to payments set forth in Section 3(b) above, the rate of annual base salary paid to the Employee immediately prior to the termination of the Employee’s employment, provided that such amount shall in no event be less than the highest rate of annual base salary paid to the Employee during the one (1) year period immediately prior to the termination of employment.

 

 

(b)

 

Cause. Cause means:

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(i)

 

The Employee’s commission of an act of material fraud or dishonesty against the Company;

 

 

(ii)

 

Any intentional refusal or willful failure to carry out the reasonable instructions of the Chief Executive Officer or the Board of Directors;

 

 

(iii)

 

The Employee’s conviction of, guilty plea or “no contest” plea to a felony or to a misdemeanor involving moral turpitude. Moral turpitude means so extreme a departure from ordinary standards of honesty, good morals, justice, or ethics as to be shocking to the moral sense of the community;

 

 

(iv)

 

The Employee’s gross misconduct in connection with the performance of his or her duties;

 

 

(v)

 

The Employee’s improper disclosure of confidential information or violation of material Company policy or the Company code of ethics;

 

 

(vi)

 

The Employee’s breach of his or her fiduciary duty to the Company; or

 

 

(vii)

 

The Employee’s failure to cooperate with the Company in any investigation or formal proceeding or the Employee being found liable in a Securities and Exchange Commission enforcement action or otherwise being disqualified from serving in his or her role.

 

 

(c)

 

Change of Control. Change of Control means the occurrence of any of the following, in one or a series of related transactions:

 

(i)

 

Change in ownership of the Company;

 

 

(ii)

 

Change in effective control of the Company; or

 

 

(iii)

 

Change in the ownership of a substantial portion of the Company’s assets (with an asset value change in ownership exceeding more than 50% of the total gross fair market value replacing the 40% default rule);

 

 

 

 

all as defined under Code Section 409A and the final Treasury Regulations thereunder.

 

(d)

 

Change of Control Date. Change of Control Date means the date on which a Change of Control occurs.

 

 

(e)

 

Disability. Disability means:

 

 

(i)

 

the Employee has been incapacitated by bodily injury, illness or disease so as to be prevented thereby from engaging in the performance of the Employee’s duties;

 

 

(ii)

 

such total incapacity shall have continued for a period of six (6) consecutive months; and

 

 

(iii)

 

such incapacity will, in the opinion of a qualified physician, be permanent and continuous during the remainder of the Employee’s life.

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(f)

 

Change of Control Period Good Reason. During the Change of Control Period, Good Reason means any of the following that occur without the Employee’s consent:

 

 

(i)

 

a material reduction of the Employee’s Base Salary below the amount set forth in his or her offer letter agreement or as increased during the course of his or her employment with the Company;

 

 

(ii)

 

a material reduction in the Employee’s Target Bonus below the amount set forth in the offer letter agreement or as increased during the course of his or her employment with the Company;

 

 

(iii)

 

a material reduction in the Employee’s duties, authority, reporting relationship or responsibilities, including:

 

(1)

 

the assignment of responsibilities, duties, reporting relationship or position that are not at least the substantial functional equivalent of the Employee’s position occupied immediately preceding the Change of Control, including the assignment of responsibilities, duties, reporting relationship or position that are not in a substantive area that is consistent with the Employee’s experience and the position occupied prior to the Change of Control; or

 

 

(2)

 

a material diminution in the budget and number of subordinates over which the Employee retains authority;

 

 

(iv)

 

requiring the Employee to relocate to a location more than thirty-five (35) miles from his or her then current office location;

 

 

(v)

 

material violation of material term of any employment, severance, or change of control agreement between the Employee and the Company; or

 

 

(vi)

 

failure by successor entity to assume agreement.

 

 

 

provided, however, that Good Reason shall not exist unless the Employee has provided the Company with written notice of the purported grounds for such Good Reason within ninety (90) days of its initial existence and such purported grounds, after good faith negotiations, are not cured within thirty (30) days of the Company’s receipt of such written notice.

 

 

(g)

 

Non-Change of Control Period Good Reason. Other than during the Change of Control Period, Good Reason means any of the following that occur without the Employee’s consent:

 

(i)

 

a material reduction of the Employee’s Base Salary below the amount set forth in his or her offer letter agreement or as increased during the course of his or her employment with the Company, excluding any reduction generally applicable to senior executives;

 

 

(ii)

 

a material reduction in the Employee’s Target Bonus below the amount set forth in his or her offer letter agreement or as increased during the course of employment with the Company, excluding any reduction generally applicable to senior executives;

 

 

(iii)

 

a material reduction in the Employee’s title;

 

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(iv)

 

a material reduction in the Employee’s duties or responsibilities; or

 

 

(v)

 

requiring the Employee to relocate to a location more than thirty-five (35) miles from his or her then current office location,

 

 

 

 

provided, however, that Good Reason shall not exist unless the Employee has provided the Company with written notice of the purported grounds for such Good Reason within ninety (90) days of its initial existence and such purported grounds, after good faith negotiations, are not cured within thirty (30) days of the Company’s receipt of such written notice.

 

(h)

 

Potential Change of Control. Potential Change of Control means the earliest to occur of

 

 

(i)

 

the execution of a definitive agreement or letter of intent, in which the consummation of the transactions described would result in a Change of Control;

 

 

(ii)

 

the approval by the Board of a transaction or series of transactions, the consummation of which would result in a Change of Control; or

 

 

(iii)

 

the public announcement of a tender offer for the Company’s voting stock, the completion of which would result in a Change of Control;

 

 

 

provided, that no such event shall be a “Potential Change of Control” unless

 

 

(iv)

 

in the case of any agreement or letter of intent described in clause (i), the transaction described therein is subsequently consummated by the Company and the other party or parties to such agreement or letter of intent and thereupon constitutes a “Change of Control”;

 

 

(v)

 

in the case of any Board-approved transaction described in clause (ii), the transaction so approved is subsequently consummated and thereupon constitutes a “Change of Control”; or

 

 

(vi)

 

in the case of any tender offer described in clause (iii), such tender offer is subsequently completed and such completion thereupon constitutes a “Change of Control”.

 

(i)

 

Potential Change of Control Date. Potential Change of Control Date means the date on which a Potential Change of Control occurs.

 

 

(j)

 

Target Bonus. Target Bonus means the bonus amount (percentage multiplied by salary or dollar figure) established for the Employee by the Compensation Committee or other party with the authority to establish such bonus amount.

 

7.

 

Successors.

 

(a)

 

The Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise), shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business

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and/or assets which executes and delivers the assumption agreement described in this Section 7(a) or which becomes bound by the terms of this Agreement by operation of law.

 

(b)

 

The Employee’s Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

8.

 

Notice.

 

(a)

 

General. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by registered mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid, or (d) one (1) business day after the business day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to the Employee, at his or her last known residential address, and (ii) if to the Company, at the address of its principal corporate offices (attention: General Counsel), or in any such case at such other address as a party may designate by ten (10) days’ advance written notice to the other party pursuant to the provisions above.

 

 

(b)

 

Notice of Termination. Any termination by the Company for Cause or resignation by the Employee voluntarily or for Good Reason shall be communicated by a notice of termination to the other party hereto given in accordance with Section 8(a) of this Agreement. Such notice shall indicate the specific termination provision in this Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and shall specify the termination date (which shall be not more than thirty (30) days after the giving of such notice). The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing his or her rights hereunder.

 

9.

 

Miscellaneous Provisions.

 

(a)

 

Confidentiality. The Employee shall retain in confidence under the conditions of the Company’s confidentiality agreement with the Employee any proprietary or other confidential information known to the Employee concerning the Company and its business so long as such information is not publicly disclosed and disclosure is not required by an order of any governmental body or court. If required, the Employee shall return to the Company any memoranda, documents or other materials proprietary to the Company. The Employee shall be specifically required to continue to comply with the terms of any Employee Inventions and Proprietary Rights Assignment Agreement including its provisions regarding the use of the Company’s trade secrets and/or confidential information to directly or indirectly request, induce or attempt to influence any past, current or future customer of the Company, or any current or future supplier of goods or services to the Company, to avoid, curtail or cancel any business it transacts with the Company and such agreement is hereby incorporated by reference.

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(b)

 

Non-Solicitation. While employed by the Company and for a period of two (2) years following the termination of such employment after a Change of Control, the Employee shall not directly or indirectly request, induce or attempt to influence any current or future employee of, or independent contractor or consultant to, the Company to terminate his or her employment with or services to the Company.

 

 

(c)

 

The Employee acknowledges that a breach of any of the covenants contained in Sections 9(a) and (b) may result in material irreparable injury to the Company for which there is no adequate remedy at law, that it may not be possible to measure damages for such injuries precisely and that, in the event of such a breach, any payments remaining under the terms of this Agreement shall cease and the Company may be entitled to obtain a restraining order and/or an injunction restraining the Employee from engaging in activities prohibited by these Sections 9(a) and (b) or such other relief as may be required to specifically enforce any of the covenants in these Sections 9(a) and (b). This Section 9(c) shall survive any termination of this Agreement.

 

 

(d)

 

Conflict in Benefits; Nonduplication of Benefits.

 

 

(i)

 

No Limitation of Regular Benefit Plans. Except as provided in Section 9(d)(ii) below, this Agreement is not intended to and shall not affect, limit or terminate any plans, programs, or arrangements of the Company that are regularly made available to a significant number of employees or officers of the Company, including, without limitation, the Company’s stock option plans.

 

 

(ii)

 

Nonduplication of Benefits. The Employee may not accumulate cash severance payments, and/or equity vesting under both this Agreement and another plan or policy of the Company. If the Employee has any other binding written agreement with the Company which provides that upon a termination of employment or change of control the Employee shall receive termination or change of control benefits, then the Employee’s execution of this Agreement is a complete and unconditional waiver of such rights to such benefits. If the Employee is entitled to any payments or benefits by operation of a statute or government regulations, any severance payable pursuant to this Agreement will be reduced by such payments or benefits.

 

(e)

 

No Duty to Mitigate. The Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.

 

 

(f)

 

Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

 

(g)

 

Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

 

(h)

 

Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties, and

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shall specifically supersede any severance payment provisions of any Offer Letter entered into between the Employee and Company, and this Agreement with respect to the subject matter hereof.

 

(i)

 

No Oral Modification. This Agreement may only be amended in writing signed by the Employee and the Chair of the Compensation Committee of the Company’s board of directors or his or her designee.

 

 

(j)

 

Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California. The Superior Court of Santa Clara County and/or the United States District Court for the Northern District of California shall have exclusive jurisdiction and venue over all controversies in connection with this Agreement. Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof in such jurisdiction, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

 

(k)

 

Arbitration. Any dispute, controversy or claim between the parties arising out of or relating to this Agreement (whether based in contract or tort, in law or equity), or any breach or asserted breach thereof, shall be determined and settled exclusively by arbitration in San Jose, California, in accordance with the rules for dispute resolution of JAMS. Judgment on the award may be entered in any court of competent jurisdiction. Notwithstanding this Section 9(k), the parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction or other interim or provisional relief as may be necessary, without breach of this Agreement and without abridgment of the powers of the arbitrator. The parties hereby submit themselves to the Superior Court of California in and for the County of Santa Clara as the sole and exclusive venue for the purpose of enforcing this Agreement. This Section 9(k) shall survive any termination of this Agreement.

 

 

(l)

 

Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

 

 

(m)

 

Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

 

 

(n)

 

Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

 

 

 

 

 

 

 

 

 

 

 

McAFEE, INC.  

 

DAVID G. DEWALT 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Leslie G. Denend 

 

 

 

Signature: 

 

/s/ David G. DeWalt 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title:

 

Director 

 

 

 

Date:

 

1/17/09 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:

 

1-26-09 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

McAFEE, INC.

RELEASE OF CLAIMS

     This Release of Claims (“Agreement”) is made by and between McAfee, Inc. (the “Company”), and                                          (“Employee”).

     WHEREAS, Employee has agreed to enter into a release of claims in favor of the Company upon certain events specified in the Change of Control and Retention Agreement by and between Company and Employee (the “Change of Control Agreement”);

     NOW, THEREFORE, in consideration of the mutual promises made herein, the Parties hereby agree as follows:

     1. Termination. Employee’s employment from the Company terminated on                                         .

     2. Confidential Information. Employee shall retain in confidence under the conditions of the Company’s confidentiality agreement with Employee any proprietary or other confidential information known to Employee concerning the Company and its business so long as such information is not publicly disclosed and disclosure is not required by an order of any governmental body or court. If required, Employee shall return to the Company any memoranda, documents or other materials proprietary to the Company. Employee shall be specifically required to continue to comply with the terms of any Employee Inventions and Proprietary Rights Assignment Agreement and such agreement is hereby incorporated by reference.

     3. Payment of Salary. Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee.

     4. Release of Claims. Except as set forth in the last paragraph of this Section 4, Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company. Employee, on behalf of him- or herself, and Employee’s respective heirs, family members, executors and assigns, hereby fully and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation,

          (a) any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that relationship;

          (b) any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

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          (c) any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;

          (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code section 201, et seq. and section 970, et seq. and all amendments to each such Act as well as the regulations issued thereunder;

          (e) any and all claims for violation of the federal, or any state, constitution;

          (f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and

          (g) any and all claims for attorneys’ fees and costs.

     Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any severance obligations due Employee under the Change of Control and Retention Agreement. Nothing in this Agreement waives Employee’s rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, state or federal law or policy of insurance.

     5. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that Employee is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that Employee has been advised by this writing that (a) Employee should consult with an attorney prior to executing this Agreement; (b) Employee has at least twenty-one (21) days within which to consider this Agreement; (c) Employee has seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; (d) this Agreement shall not be effective until the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law. Any revocation should be in writing and delivered to the Vice-President of Human Resources at the Company by close of business on the seventh day from the date that Employee signs this Agreement.

     6. Civil Code Section 1542. Employee represents that Employee is not aware of any claims against the Company other than the claims that are released by this Agreement. Employee acknowledges that Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code 1542, below, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN

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HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

          Employee, being aware of said code section, agrees to expressly waive any rights Employee may have thereunder, as well as under any statute or common law principles of similar effect.

     7. No Pending or Future Lawsuits. Employee represents that Employee has no lawsuits, claims, or actions pending in Employee’s name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Employee also represents that Employee does not intend to bring any claims on Employee’s own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein.

     8. Application for Employment. Employee understands and agrees that, as a condition of this Agreement, Employee shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and Employee hereby waives any right, or alleged right, of employment or re-employment with the Company.

     9. No Cooperation. Employee agrees that Employee will not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so.

     10. No Admission of Liability. No action taken by the Company, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made, or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to the Employee or to any third party.

     11. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement.

     12. Authority. Employee represents and warrants that Employee has the capacity to act on Employee’s own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement.

     13. No Representations. Employee represents that Employee has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.

     14. Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

     15. Entire Agreement. This Agreement, along with the Change of Control Agreement, the Employee Inventions and Proprietary Rights Assignment Agreement, and Employee’s written Equity Award agreements with the Company, represents the entire agreement and understanding between the Company and Employee concerning Employee’s separation from the Company.

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     16. No Oral Modification. This Agreement may only be amended in writing signed by Employee and the Chair of the Compensation Committee of the Company’s board of directors or his or her designee.

     17. Governing Law. This Agreement shall be governed by the internal substantive laws, but not the choice of law rules, of the State of California and its enforceability shall be subject to Section 9(k) of the Change of Control Agreement.

     18. Effective Date. This Agreement is effective eight (8) days after it has been signed by both Parties.

     19. Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

     20. Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:

          (a) They have read this Agreement;

          (b) They have had the opportunity of being represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

          (c) They understand the terms and consequences of this Agreement and of the releases it contains; and

          (d) They are fully aware of the legal and binding effect of this Agreement.

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     IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

 

 

 

 

 

 

 

 

 

 

 

 

 

McAFEE, INC.

 

 

 

 

 

 

 

Dated:                     , 20  

 

 

 

By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                        , an individual

 

 

 

 

 

 

 

Dated:                     , 20  

 

 

 

 

 

 

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