Exhibit 10.37
FIRST AMENDMENT
TO
WILLIAM KERRIGAN EMPLOYMENT AGREEMENT
     THIS AMENDMENT, dated May 24, 2005, is made and entered into by and between
McAfee, Inc., a Delaware corporation (formerly Networks Associates, Inc.) (the
“Company”) and William Kerrigan, an individual (the “Executive”).
WITNESSETH:
     WHEREAS, on or about October 1, 2004, Company and Executive entered an
Employment Agreement (the “Agreement”); and
     WHEREAS, the parties desire to amend the Agreement in certain respects.
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
     1.     Definitions. Unless otherwise provided herein, capitalized terms
used herein shall have the same meaning as provided in the Agreement.
     2.     Modifications. The parties hereby amend the Original Agreement as
follows:
          (a)     Section 4, Compensation, is amended as follows:

  (i)   Section 4(b) is amended to read in its entirety as follows:        
Bonuses. Executive shall be eligible to earn a target bonus (the “Target Bonus”)
according to the terms and conditions of the executive incentive bonus program
(as the same may be amended by the Board of Directors of the Company from time
to time) with respect to a Target Bonus measuring period. The phrase “Target
Bonus measuring period” shall mean three months if the executive incentive bonus
program provides for quarterly bonuses for Executive and twelve months if the
executive incentive bonus program provides for annual bonuses or a combination
of annual and more frequent bonuses.

  (ii)   Section 4(c)(i) is amended to read in its entirety as follows:        
Termination For Any Reason. Notwithstanding Executive’s entitlement to severance
benefits under certain circumstances discussed below in this Section 4(c), upon

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      termination of Executive’s employment for any reason, the Company shall
pay Executive all Base Salary and accrued but unpaid vacation earned through the
date of termination, reimburse Executive for all necessary and reasonable
expenses incurred in accordance with Company policy and continue Executive’s
benefits under the Company’s then-existing benefit plans and policies for so
long as required by applicable law. In addition, the Company shall also pay
Executive a portion of the Target Bonus derived by multiplying Executive’s Base
Salary by the then-current Target Bonus percentage (60% for 2005, payable
annually) and multiplying the result by the quotient of (A) the number of days
in the Target Bonus measuring period through the date of termination, divided by
(B) the number of days in the Target Bonus measuring period.

  (iii)   Section 4(c)(ii) is amended to read in its entirety as follows:      
  Termination Due to Total Disability, Death. Resignation for Good Reason and
Involuntary Termination Other Than for Cause.^ If (A) Executive dies,
(B) Executive resigns his/her employment with the Company due to a Total
Disability, (C) Executive resigns his/her employment with the Company for Good
Reason, or (D) Executive’s employment with the Company is terminated by the
Company other than for Cause, then, subject to Executive executing, and not
revoking, the Release of Claims attached hereto as Exhibit A with the Company
and complying with Section 10 of this Agreement, (1) Executive shall receive
payments equal to the sum of (A) Executive’s Base Salary for six months and
(B) in addition to any portion of a Target Bonus paid pursuant to
Section 4(c)(i), either (i) if Executive’s Target Bonus measuring period is
quarterly, the Target Bonus for two quarters, or (ii) if Executive’s Target
Bonus measuring period is annual, or a combination of quarterly and annual,
Executive’s Target Bonus for six months; less applicable withholding, and
otherwise in accordance with Section 4(c)(v), (2) the Company shall pay
Executive cash equal to the pre-tax cost to the Company of providing the portion
of the group health, dental and vision plan continuation coverage premiums for
Executive and his/her covered dependents under Title X of the Consolidated
Budget Reconciliation Act of 1985, as amended (“COBRA”), that would have been
paid by the Company were he/she still employed by the Company for six (6) months
from the date of Executive’s termination of

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      employment, and (3) if, and only if, such termination is within six
(6) months following a Change in Control, or Executive is terminated without
Cause prior to a Change in Control during the pendency of a merger agreement or
tender offer which would result in a Change in Control, then all of Executive’s
remaining unvested stock options and shares of restricted stock shall vest
immediately, and, if applicable, the Company’s right to repurchase all of the
same such shares immediately shall lapse.

  (iv)   The cross-reference in Section 4(c)(iii) to “Section 6(c)(i)” is
corrected to read “Section 4(c)(i).”

  (v)   Section 4(c)(iv)(2)(A) is amended to read in its entirety as follows:  
      the acquisition by any individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than by the Company or
any Affiliate thereof immediately prior to such acquisition, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of the combined voting power or economic interests of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors;

  (vi)   A new Section 4(c)(v) is hereby added to the Agreement, which new
Section shall read in its entirety as follows:         Payments; Target Bonus.
All payments due under Section 4(c)(ii) shall be paid as follows: (1) one-sixth
of the total amount due under Section 4(c)(ii) shall be payable on the last
calendar day of the month in which Executive’s employment with the Company
terminated, and (2) a like amount shall be payable on the last calendar day of
each month thereafter until such amount is paid in full; provided, however, that
if any payments due under Section 4(c)(ii) have not been paid by March 1 of the
calendar year following the calendar year in which Executive’s employment with
the Company terminated, then the remaining amounts due under Section 4(c)(ii)
shall be immediately due and payable on that date. For purposes of the Target
Bonus calculation under this Section 4(c) regarding Target Bonus measuring
periods ending subsequent to the termination of Executive’s employment, the
Target Bonus shall be deemed to be the same as for the

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      Target Bonus measuring period during which Executive’s employment
terminated, and the goals shall be deemed to be fully met.

  (vii)   A new Section 4(e) is hereby added to the Agreement, which new Section
shall read in its entirety as follows:         409A Applicability. It is not the
parties’ intention for any payment under this Agreement to create or constitute
a “nonqualified deferred compensation plan” within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended (a “Deferred Compensation
Plan”) hi the event that this Agreement or any compensation payable under this
Agreement (the “Payment”) is determined to be a Deferred Compensation Plan
causing Executive to owe any additional federal income tax, the Company agrees
to pay to Executive an additional sum (the “Gross Up”) in an amount such that
the net amount retained by Executive after receiving both the Payment and the
Gross Up and after paying: (i) any additional federal income tax on the Payment
and the Gross Up, and (ii) any federal, state, and local income taxes on the
Gross Up, is equal to the amount of the Payment. Notwithstanding the above, in
the event payment of the Gross Up is or becomes the sole reason for this
Agreement to be a Deferred Compensation Plan, the preceding sentence shall be
void and no Gross Up shall be paid.

          (b)     A new Section 8 is hereby added to Exhibit A of the Agreement,
which new Section shall read in its entirety as follows:
This Release does not extend to and shall not relieve the Company from any
obligations incurred under Sections 4(d) or 4(e) of the Employment Agreement
between the Executive and the Company dated October 1, 2004, as amended on May
24, 2005.
     3.     Confirmation. Except as amended hereby, the Agreement is ratified
and confirmed in accordance with its terms.
     IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.

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McAFEE, INC.                                                  
                                           EXECUTIVE

McAfee, Inc.

      By: /s/ Kent H. Roberts
 
    Name: Kent H. Roberts
 
  Title: EVP and General Counsel
 
  By: /s/ William Kerrigan
 
Name: William Kerrigan
       EVP. McAfee

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MCAFEE, INC.
WILLIAM KERRIGAN EMPLOYMENT AGREEMENT
     This Agreement is made by and between McAfee (the “Company”), and William
Kerrigan (“Executive”) as of October 1,2004.
     1.     Duties and Scope of Employment.
          (a)     Positions; Employment Commencement Date; Duties. Executive’s
employment with the Company commenced August 19, 2002 (the “Employment
Commencement Date”). As of the date of this Agreement, the Company employs
Executive as Senior Vice President of the Company for the McAfee Consumer Brand
reporting into the President of the Company (the “President”). The period of
Executive’s employment hereunder is referred to herein as the “Employment Term.”
During the Employment Term, Executive shall render such business and
professional services in the performance of his/her duties that are consistent
with Executive’s position within the Company, as shall reasonably be assigned to
him/her by the Chief Executive Officer of the Company (the “CEO”) and or the
President.
          (b)     Obligations. During the Employment Term, Executive shall
devote his/her full business efforts and time to the Company. Executive agrees,
during the Employment Term, not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration
without the prior approval of the CEO; provided, however, that Executive may
serve in any capacity (i) with any civic, educational or charitable
organization, or (ii) as a member of corporate boards of directors or committees
of another corporation so long as such organization does not compete with the
Company if Executive obtains the prior written approval of the CEO with respect
to serving in such capacity, which may be withheld in the sole discretion of the
CEO. The term “Board” means the Board of Directors of the Company.
     2.     Employee Benefits. During the Employment Term, Executive shall be
eligible to participate in the employee and fringe benefit plans maintained by
the Company (as such plans are amended from time to time) that are applicable to
other management personnel serving at levels no higher than Executive to the
full extent provided for under those plans.
     3.     At-Will Employment. Executive and the Company agree and acknowledge
that Executive’s employment with the Company constitutes “at-will” employment.
Subject to the Company’s obligation to provide severance benefits as specified
herein, Executive and the Company agree that 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 of either the Company or
Executive.
     4.     Compensation.
          (a)     Base Salary. During the Employment Term, the Company shall pay
the Executive as compensation for his/her services a base salary at the
annualized rate of Three Hundred Thousand ($300,000.00). Such base salary shall
be paid periodically in accordance

 

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with normal Company payroll practices and subject to the usual, required
withholding. The Company will review (in accordance with the policies set by the
Compensation Committee of the Board) Executive’s base salary at least once
annually starting in January 2005 and, if it deems it appropriate, modify the
base salary. Executive’s annualized base salary, as modified as provided herein,
shall be referred to as his/her “Base Salary.”
          (b)     Bonuses. Executive shall be eligible to participate in the
executive quarterly incentive bonus program (as it may be amended from time to
time), with milestones based in part on Company performance and/or in part on
Executive’s individual performance. Executive’s quarterly target incentive is
66.67% of Base Salary for such quarter (the “Target Bonus”). The payment of all
or any portion of the Target Bonus for any calendar quarter shall depend on
whether the relevant goals are met (or, in the case of a Target Bonus that has
tiered goals, which, if any, tier or tiers of goals are met).
          (c)     Severance.
               (i)     Termination For Any Reason. Notwithstanding Executive’s
entitlement to severance benefits under certain circumstances discussed below in
this Section 6(c), upon termination of Executive’s employment for any reason,
the Company shall pay Executive all Base Salary and accrued but unpaid vacation
earned through the date of termination, reimburse Executive for all necessary
and reasonable expenses in accordance with Section 4 and continue Executive’s
benefits under the Company’s then-existing benefit plans and policies for so
long as required by applicable law. In addition, if, and only if, the relevant
goals for the calendar quarter in which the termination of Executive’s
employment occurs are met, then the Company shall also pay executive the Target
Bonus (or the portion of the Target Bonus that would be paid based on the tiers
of goals that are met) for such calendar quarter but prorated based on the
quotient of (A) the number of days in the calendar quarter through the date of
termination, divided by (B) the number of days in such calendar quarter. For
illustration purposes only, if Executive’s Target Bonus is $1,000, and Executive
is terminated on May 15, and Executive met sufficient goals to receive a $600
Target Bonus, then his/her actual bonus for the year of termination would be
$297 ($600 x (45/91)).
               (ii)     Termination Due to Total Disability, Death, Resignation
for Good Reason and Involuntary Termination Other Than for Cause. If
(A) Executive dies, (B) Executive resigns his/her employment with the Company
due to a Total Disability, (C) Executive resigns his/her employment with the
Company for Good Reason, or (D) Executive’s employment with the Company is
terminated by the Company other than for Cause, then, subject to Executive
executing, and not revoking, the Mutual Release of Claims attached hereto as
Exhibit A with the Company, (1) Executive shall receive six (6) monthly
payments, each equal to the product of (A) one-twelfth (1/12) multiplied by the
sum of Executive’s Base Salary plus (B) one third of the Target Bonus; less
applicable withholding, and otherwise in accordance with the Company’s standard
payroll practices, and (2) the Company shall pay the portion of the group
health, dental and vision plan continuation coverage premiums for Executive and
his/her covered dependents under Title X of the Consolidated Budget
Reconciliation Act of 1985, as amended (“COBRA”), that would have been paid by
the Company were he/she still employed by the Company, through the lesser of
(x) six (6) months from the date of Executive’s termination of employment, or
(y) the date upon which Executive and his/her covered dependents are eligible to
be covered by

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similar plans of Executive’s new employer, and (3) if, and only if, such
termination is within six (6) months following a Change in Control, then all of
Executive’s remaining unvested stock options and shares of restricted stock
shall vest immediately, and, if applicable, the Company’s right to repurchase
all of the same such shares immediately shall lapse.
               (iii)     Involuntary Termination for Cause or Resignation Other
Than For Good Reason. In the event Executive terminates his/her employment other
than for Good Reason or Executive’s employment is involuntarily terminated by
the Company for Cause, then all vesting of stock options, restricted stock and
any other equity compensation shall terminate immediately and all payments of
compensation by the Company to Executive hereunder shall immediately terminate
(except as to amounts already earned, as specified in Section 6(c)(i) above, and
the right, subject to the terms of the relevant stock option agreement(s), to
exercise any stock options vested through the date of termination).
               (iv)     Definitions.
                    (1)     Termination for Cause. A termination of Executive’s
employment for “Cause” means a termination of Executive’s employment by the
Company based upon a good faith determination by the Board that one or more of
the following has occurred: (a) Executive’s commission of a material act of
fraud with respect to the Company in connection with Executive carrying out
his/her responsibilities as an employee, (b) any intentional refusal or willful
failure to carry out the reasonable instructions of the CEO or the Board,
(c) Executive’s conviction of, or plea of nolo contendere to, a misdemeanor
crime of moral turpitude or a felony, (d) Executive’s gross misconduct in
connection with the performance of his/her duties hereunder, or (e) Executive’s
material breach of his/her obligations under this Agreement and any other
agreement to which Executive and the Company or its Affiliate is a party.
                    (2)     Change in Control. “Change in Control” shall mean
any of the following:
                         (A)     the acquisition by any individual, entity, or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),
other than by the Company or any Affiliate thereof or any Affiliate of a
shareholder of the Company immediately prior to such acquisition, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of the combined voting power or economic interests of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors;
                         (B)     A change in the composition of the Board
occurring within a twenty-four month period, as a result of which fewer than a
majority of the directors of the Board are Incumbent Directors. The term
“Incumbent Directors” means members of the Board who are (I) members of the
Board of the date hereof, or (II) elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company);

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                         (C)     a reorganization, merger, or consolidation, in
each case, with respect to which all or substantially all of the Persons that
were the respective beneficial owners of the voting securities of the Company
immediately prior to such reorganization, merger, or consolidation do not,
following such reorganization, merger, or consolidation, beneficially own,
directly or indirectly, more than 50% of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of Company resulting from such reorganization, merger, or
consolidation; or
                         (D)     the sale or other disposition of all or
substantially all of the assets of the Company in one transaction or series of
related transactions.
                         (E)     Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur because a majority or more of the
outstanding voting securities of the Company is acquired by (I) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained by the Company or any of its Affiliates, or (II) any Person that,
immediately prior to such acquisition, is owned directly or indirectly by the
stockholders of the Company in approximately the same proportion as their
ownership of stock in the Company immediately prior to such acquisition.
                    (3)     Resignation for Good Reason. A resignation for “Good
Reason” means the resignation by Executive of his/her employment within ninety
(90) days of the occurrence of any one or more of the following events without
Executive’s written consent, provided that Executive has complied with the Good
Reason Process: (a) a material reduction by the Company in Executive’s Base
Salary and/or Target Bonus, (b) a material reduction by the Company in
Executive’s benefits, (c) a reduction by the Company in Executive’s title and/or
a material reduction in Executive’s authority and/or duties without a Sufficient
Basis, or (d) the requirement by Executive’s supervisor that Executive relocate
more than thirty-five (35) miles from the Westborough, Massachusetts office
location. Notwithstanding the foregoing sentence to the contrary, it is agreed
that Executive’s receiving less bonus or no bonus as a result of not meeting the
relevant goals for a Target Bonus is not a Good Reason.
                    The term “Good Reason Process” shall mean that (i) a Good
Reason has occurred; (ii) Executive notifies the Company in writing of the
occurrence of the Good Reason; (iii) Executive cooperates in good faith with the
Company’s efforts, for a period of at least 30 days following such notice, to
modify Executive’s employment situation in a manner reasonably acceptable to
Executive and the Company; (iv) notwithstanding such efforts, one or more of the
Good Reasons continues to exist for a period of 30 days following such notice
and has not been modified in a manner reasonably acceptable to Executive. The
term “Sufficient Basis” shall include a reassignment or reduction in duties as a
result of disciplinary action by the Company based upon a serious violation of
Company policy or this Agreement or any other agreement between the Company (or
its Affiliate) and Executive, or Executive’s failure to perform his/her duties
pursuant to this Agreement.
                    (4)     Total Disability. “Total Disability” shall mean
Executive’s mental or physical impairment which prevents Executive from
performing the responsibilities and duties of his/her position for 180
consecutive days or six (6) months in the aggregate during any twelve (12) month
period. Any question as to the existence or extent of Executive’s mental

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or physical impairment upon which Executive and the Company cannot agree shall
be resolved by a qualified independent physician who is an acknowledged expert
in the area of the mental or physical impairment, selected in good faith by the
Board and approved by Executive, which approval shall not unreasonably be
withheld. Upon the existence and required duration of such Total Disability, the
Company may then terminate Executive’s employment for such reason by giving
Executive written notice of termination for such reason.
                    (5)     Affiliate and Person. “Affiliate” means any Person
that directly or indirectly controls, is controlled by, or is under common
control with, the Person in question. As used in this definition, the term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise. The term
“Person” means an individual or a corporation, partnership, trust, estate,
unincorporated organization, association, or other entity.
          (d)     Parachute Payments. The Company shall indemnify Executive, on
an after tax basis, for any taxes imposed on Executive pursuant to Section 4999
of the Internal Revenue Code of 1986, as amended, that result from any
compensation or payments made by the Company to Executive pursuant to this
Agreement.
     5.     Assignment. This Agreement shall be binding upon and inure to the
benefit of (a) the heirs, beneficiaries, executors and legal representatives of
Executive upon Executive’s death, and (b) any successor of the Company. Any such
successor of the Company shall be deemed substituted for the Company under the
terms of this Agreement for all purposes. None of the rights of Executive to
receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void.
     6.     Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if
(i) delivered personally or by facsimile, (ii) one (1) day after being sent by
Federal Express or a similar commercial overnight service, or (iii) three
(3) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties at the following addresses, or
at such other addresses as the parties may designate by written notice in the
manner aforesaid:

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If to the Company:
  McAfee, Inc
 
  5000 Headquarters Drive
 
  MS 1S 271
 
  Plano, Texas 75204
 
  Attn: General Counsel
 
   
If to Executive:
  William Kerrigan
 
  80 Audubon Road
 
  Wellesly, MA 02481

     7.     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.
     8.     Entire Agreement. This Agreement; the Employee Inventions and
Confidentiality Agreement between Executive and the Company; Executive’s
acknowledgement of the Employee Handbook; the Executive’s acknowledgement of the
Company’s Insider Trading Policy and the various Stock Option Grant Agreements
between the Executive and the Company represent the entire agreement and
understanding between the Company and Executive concerning Executive’s
employment relationship with the Company, and supersede and replace any and all
prior agreements and understandings concerning Executive’s employment
relationship with the Company.
     9.     Non-Binding Mediation, Arbitration and Equitable Relief.
          (a)     The parties agree to make a good faith attempt to resolve any
dispute or claim arising out of or related to this Agreement through
negotiation.
          (b)     In the event that any dispute or claim arising out of or
related to this Agreement is not settled by the parties hereto, the parties
shall attempt in good faith to resolve such dispute or claim by non-binding
mediation in Westborough, Massachusetts to be conducted by one mediator
belonging to either the American Arbitration Association or JAMS. The mediation
shall be held within thirty (30) days of the request therefore, unless the
parties agree to a later deadline. The costs of the mediator shall be borne by
the Company.
          (c)     Executive and the Company each agree, to the extent permitted
by law, to arbitrate before a single neutral arbitrator, in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association regarding discovery, any dispute or controversy arising
out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, which has not been resolved by negotiation or mediation as set forth in
Sections 9(a) and 9(b), except that any dispute or claim for workers’
compensation benefits or unemployment insurance benefits, shall be excluded from
this agreement to arbitrate.
          (d)     The Company shall pay the cost of the arbitration filing and
hearing fees and the cost of the arbitrator, and any other expense or cost that
is unique to arbitration or that Executive would not be required to bear if
he/she were free to bring the dispute or claim in court. Each party shall bear
its own attorneys’ fees, unless otherwise determined by the arbitrator. The

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arbitration shall take place in Westborough, Massachusetts. The arbitrator shall
apply Massachusetts law, without reference to rules of conflicts of law, to the
resolution of any dispute. The arbitrator shall issue a written award that sets
forth the essential findings and conclusions on which the award is based.
Judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The award shall be subject to correction,
confirmation, or vacation, as provided by any applicable Massachusetts case law
setting forth the standard of judicial review of arbitration awards. Executive
and the Company each understand and agree that the arbitration of any dispute or
controversy listed in Section 9(c) shall be instead of a hearing or trial before
a court or jury. Executive and the Company each understand that Executive and
the Company are expressly waiving any and all rights to a hearing or trial
before a court or jury regarding any dispute or controversy listed in
Section 9(c) which they now have or which they may have in the future. Nothing
in this Agreement shall be interpreted as restricting or prohibiting Executive
from filing a charge or complaint with a federal, state, or local administrative
agency charged with investigating and/or prosecuting such charges or complaints
under any applicable federal, state, or municipal law or regulation.
          (e)     Notwithstanding the foregoing provisions of this Section 9,
the parties may apply to any court of competent jurisdiction for preliminary or
interim equitable or injunctive relief, or to compel arbitration in accordance
with this Section 9, without breach of this Section 9.
     10.     Covenants Not to Compete and Not to Solicit.
          (a)     Covenant Not to Compete. Upon Executive’s resignation for any
reason after a Change in Control has occurred or termination by the Company for
any reason after a Change in Control has occurred, Executive agrees that until
the end of the twelve (12) month period following the date of the termination of
his/her employment, Executive will not directly engage in (whether as an
employee, consultant, proprietor, shareholder, owner, partner, director or
otherwise), or have any ownership interest in, or participate in the financing,
operation, management, or control of, any Subject Entity that is engaged in the
design, development, marketing, distribution, or sale of network management
software or hardware or anti-virus network security software anywhere in the
world. For purposes of this Section 10, the term “Subject Entity” means any
entity engaged in the design, development, marketing, distribution, or sale of
anti virus or network security software or hardware, including but not limited
to the following entities: Cisco Systems (security business unit only), Computer
Associates , Dr. Ahn’s, Fortinet, Fsecure, Internet Security Systems, Intrusion
Inc., Juniper, Panda, RSA, Secure Computing, Sophos, Sourcefire, Symantec,
Tipping Point and Trend Micro or any successor thereof (the “Subject Entity
List”). Executive understands and agrees that the Company may delete from, add
to or otherwise amend the entities included in the Subject Entity List from time
to time, and the Company will provide written notice to Executive of any such
deletion, addition or amendment. Notwithstanding the foregoing provisions to the
contrary, nothing in this Section 10(a) shall prevent Executive from being
employed by, or providing services to, any division or business unit of any
Subject Entity if that division or business unit is not involved in the design,
development, marketing, distribution, or sale of network management software or
hardware or anti-virus network security software, as long as Executive has no
responsibilities or duties for any division or business unit of such Subject
Entity that is involved in the design, development, marketing, distribution or
sale of network management software or hardware or anti-virus

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network security software. Ownership of less than 3% of the outstanding voting
stock of a Subject Entity shall not constitute a violation of this
Section 10(a).
          (b)     Covenant Not to Solicit. Upon Executive’s resignation for any
reason after a Change in Control has occurred or termination by the Company for
any reason after a Change in Control has occurred, Executive agrees that he/she
will not, at any time during the twenty four (24) months following his
termination date, directly or indirectly solicit any individuals to leave the
Company’s employ for any reason or interfere in any other manner with the
employment relationships at the time existing between the Company and its
current employees.
          (c)     Reformation. In the event that the provisions of this
Section 10 should ever be deemed to exceed the time, geographic or scope of
activities limitations permitted by applicable law, then such provisions shall
be reformed to the maximum time, geographic or scope of activities limitations,
as the case may be, permitted by applicable laws.
          (d)     Forfeiture of Severance. If Executive has engaged in any
conduct prohibited by Section 10(a) or 10(b) above, the Company will have the
right to immediately suspend any payments to or made on behalf of Executive
pursuant to Section 4(c)(i) of this Agreement, and Executive forfeits any rights
he/she has to such payments.
          (e)     Representations. Executive represents that he/she (i) is
familiar with the covenants in this Section 10. and (ii) is fully aware of
his/her obligations hereunder, and (iii) the covenants contained in this
Section 10 are reasonable.
     11.     No Oral Modification. Cancellation or Discharge. This Agreement may
only be amended, canceled or discharged in writing signed by Executive and the
Company acting through the CEO, its general counsel or the Chief Financial
Officer of the Company.
     12.     Withholding. The Company shall be entitled to withhold, or cause to
be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his/her employment
hereunder.
     13.     No Mitigation. Executive shall not be required to mitigate the
value of any severance benefits contemplated by this Agreement, nor shall any
such benefits be reduced by any earnings or benefits that Executive may receive
from any other source.
     14.     Governing Law. This Agreement shall be governed by the laws of the
State of Massachusetts without reference to rules relating to conflict of law.
     15.     Acknowledgment. Executive acknowledges that he/she has had the
opportunity to discuss this matter with and obtain advice from his/her private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

8

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     IN WITNESS WHEREOF, the undersigned have executed this Agreement:

        MCAFEE, INC.
    By:  /s/ George Samenuk                          EXECUTIVE

/s/ William Kerrigan
—————————
William Kerrigan
                       

Attachments:
Exhibit A: Mutual Release of Claims

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EXHIBIT A
RELEASE OF CLAIMS
(“Release”)
     ____________________ (“the Executive”) ceased his/her employment with
McAfee, Inc. (“the Company”), a Delaware corporation, effective ___________,
___________. For purposes of this Release, the term “the Company” shall mean
McAfee and its subsidiaries and affiliates.
     1.     Executive’s employment relationship with the Company is ended
effective ___________ (the Effective Date”). Executive understands that if and
only if he/she signs and returns this Release and complies with Section 10 of
the ___________Employment Agreement (“Employment Agreement”) signed by Executive
on ___________, 2004 and fully incorporated herein by reference, Executive will
receive the benefits described in Section 4(c)(ii) of the Employment Agreement.
     2.     In exchange for the benefits described in Section 4(c)(ii) of
Executive’s Employment Agreement, Executive (on his/her own behalf and on behalf
of Executive’s successors and assigns) hereby releases the Company and the
officers, directors, employees, agents, stockholders and legal successors and
assigns of the Company (the “Released Parties”) from all claims, actions and
causes of action, whether now known or unknown, which Executive now has, or at
any other time had, or shall or may have against the Released Parties based upon
or arising out of any matter, cause, fact, thing, act or omission whatsoever
occurring at any time up to and including the Effective Date (as defined below),
including, but not limited to, any claims for breach of contract, wrongful
termination, fraud, defamation, infliction of emotional distress, discrimination
based on national origin, race, age, sex, sexual orientation, disability or
other discrimination or harassment under Title VII of the Civil Rights Act of
1964, the Age Discrimination In Employment Act of 1967, the Americans With
Disabilities Act, the Fair Employment and Housing Act or any other applicable
state, federal or local law. Executive agrees that he/she will not file, nor
will he/she voluntarily participate in any lawsuit or other legal, regulatory or
administrative proceeding to assert any such claims against any Released Party.
To the extent any claims or rights held by Executive against the Company cannot
be waived or released, Executive hereby irrevocably assigns all his/her rights
and interest in such claims or rights to the Company.
     3.     Executive acknowledges that he/she has read section 1542 of the
Civil Code of the State of California which, in its entirety, states:
     A general release does not extend to claims, which the creditor does not
know or suspect to exist in his/her favor at the time of executing the release,
which if known by him/her must have materially affected his/her settlement with
the debtor.
Executive waives any rights that he/she has or may have under such section 1542
to the fullest extent that Executive may lawfully waive such rights pertaining
to this Release. If Executive is employed by the Company in a state other than
California, Executive hereby waives any right or

 

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benefit which he/she has under the other state’s statutes similar to section
1542 of the Civil Code of the State of California to the fullest extent that
he/she may lawfully waive such rights pertaining to this Release.
     4.     Executive acknowledges that he/she has carefully read and fully
understands this Release and he/she has not relied on any statement, written or
oral, which is not set forth in this document. Executive has consulted with an
attorney, or understands that he/she should consult with an attorney, before
signing this Release, and that he/she is giving up any legal claims he/she has
or may have against the Company by signing this Release. Executive also
understands that he/she may take up to 21 days to decide whether to enter into
this Release, and that he/she may revoke this Release within 7 days of signing
it, if he/she wishes to do so. Executive enters into this Release knowingly,
willingly and voluntarily in exchange for the benefits described in Section
4(c)(ii) of his/her Employment Agreement, and Executive has had an adequate
opportunity to make whatever investigation or inquiry he/she deems necessary or
desirable in connection with the matters addressed in this Release. Executive
understands the Company is not obligated to pay him/her the benefits described
in Section 4(c)(ii) of his/her Employment Agreement. Executive further
acknowledges that he/she is signing this Release knowingly, willingly and
voluntarily in exchange for the benefits set forth in Section 4(c)(ii) of
his/her Employment Agreement.
     5.     Executive acknowledges that he/she has continuing obligations under
Section 10 of his/her Employment Agreement, under certain confidentiality and
assignment of inventions agreements Executive signed in favor of the Company,
including _______________, _______________, _______________, and under
applicable law. These obligations will not be revoked, affected or impaired in
any way by this Release.
     6.     Executive acknowledges that as a condition of receiving the benefits
described in Section 4(c)(ii) of his/her Employment Agreement, he/she has
executed and returned to the Company on or before the Effective Date, all
Company property in his/her possession, including but not limited to, software,
equipment, documents, etc.
     7.     Executive agrees that this Release may not be modified or amended
unless such modification or amendment is in writing and is signed by Executive
and by an authorized officer of McAfee, Inc.
Signed on _______________,_________.
McAfee, Inc                              Executive Signature and Date
 

     
 
   
George Samenuk
  Signature of William Kerrigan
Chief Executive Officer and Chairman of the Board