Exhibit 10.40
MCAFEE, INC.
PERFORMANCE STOCK UNIT AWARD AGREEMENT
     RECITALS
          A. The Board has adopted the Company’s 2010 Equity Incentive Plan
(“Plan”) for the purpose of retaining the services of selected Service Providers
of the Company (or any Parent or Subsidiary).
          B. The Participant is to render valuable services to the Company (or a
Parent or Subsidiary), and this agreement (“Award Agreement”) is executed
pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Company’s issuance of Shares to the Participant under the
Plan.
          C. Any capitalized terms used in this Award Agreement but not
otherwise defined in this Award Agreement shall have the meanings ascribed to
such terms in the Plan. In the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Award Agreement, the
terms and conditions of the Plan shall prevail.
     NOW, THEREFORE, it is hereby agreed as follows:
          1. Grant of Performance Stock Units. The Company hereby awards to the
Participant, as of the date set forth below (the “Award Date”), Stock Units as
defined under the Plan with performance-based vesting criteria set by the
Administrator (“Performance Stock Units”). Each Performance Stock Unit
represents the right to receive one Share on the vesting date of that unit. Past
services are deemed to be full consideration equal to the Performance Stock Unit
par value. The number of Shares subject to the awarded Performance Stock Units,
the applicable vesting schedule for the Performance Stock Units and the
underlying Shares, the dates on which those vested Shares shall be issued to the
Participant and the remaining terms and conditions governing the award (the
“Award”) shall be as set forth in this Award Agreement.
AWARD SUMMARY

     
Participant Name
   
and ID:
  __________
 
   
Award Date:
  __________
 
   
Number of Shares
   
Subject to Award:
  __________ Shares
 
   
Performance
  First Performance Period: __________
Period(s):
  Second Performance Period: __________
 
  Third Performance Period: __________
Performance
  __________ of the Performance Stock Units will be allocated to the First
Performance Period

 

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Criteria:
  __________ of the Performance Stock Units will be allocated to the Second
Performance Period
 
  __________ of the Performance Stock Units will be allocated to the Third
Performance Period
 
   
 
  With respect to each Performance Period, the Participant will vest in the
Performance Stock Units allocated thereto in accordance with the Vesting
Schedule subject to achievement of certain performance criteria, determined by
the Committee. Such performance criteria may provide for the number of
Performance Stock Units earned for each applicable Performance Period to be a
variable amount based on the level of achievement versus such performance
criteria, determined by the Committee.
 
   
Vesting Schedule:
  The Shares shall vest as follows, provided that the performance criteria set
forth for the applicable Performance Period have been achieved:
 
   
 
 
•   Shares allocated to the First Performance Period that are earned, based on
the Committee determining the level of achievement of the performance criteria
for the First Performance Period, vest on __________,
 
   
 
 
•   Shares allocated to the Second Performance Period that are earned, based on
the Committee determining the level of achievement of the performance criteria
for the Second Performance Period, vest on __________, and
 
   
 
 
•   Shares allocated to the Third Performance Period that are earned, based on
the Committee determining the level of achievement of the performance criteria
for the Third Performance Period, vest on _________.
 
   
 
  Such dates are herein designated the “Vesting Dates.”
 
   
 
  The Shares allocated to each Performance Period that are not earned, based on
the Committee determining the level of achievement of the performance criteria
for the applicable Performance Period, will not vest on the scheduled Vesting
Dates and will be forfeited.
 
   
 
  In no event shall any Shares vest after the date of the Participant’s
termination as a Service Provider.
 
   
Issuance Schedule
  The Shares in which the Participant vests in accordance with the foregoing
Vesting Schedule will be issuable immediately upon vesting.
 
   
 
  However, the actual number of vested Shares to be issued will be subject to
the automatic Share withholding provisions of Paragraph 6 pursuant to

 

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  which the applicable Withholding Taxes are to be collected. “Withholding
Taxes” shall mean the federal, state and local income taxes and the employee
portion of the federal, state and local employment taxes required to be withheld
by the Company in connection with the issuance of the Shares which vest under of
the Award.

          2. Limited Transferability. Prior to actual receipt of the Shares
which vest hereunder, the Participant may not sell, pledge, assign, hypothecate,
transfer or dispose of in any way (whether by operation of law or otherwise) any
interest in the Award or the underlying Shares, except pursuant to a domestic
relations order governing the division of marital property. Upon any attempt to
sell, pledge, assign, hypothecate, transfer or otherwise dispose of this Award,
or any right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this Award and the rights and
privileges conferred hereby immediately will become null and void. Any Shares
which vest hereunder but which otherwise remain unissued at the time of the
Participant’s death may be transferred pursuant to the provisions of the
Participant’s will or the laws of inheritance or to the Participant’s designated
beneficiary or beneficiaries of this Award. The Participant may make such a
beneficiary designation at any time by filing the appropriate form with the
Administrator or its designate.
          3. Cessation as a Service Provider. Except as otherwise provided
herein, should the Participant cease to be a Service Provider for any reason
prior to vesting in one or more Shares subject to this Award, then the Award
will be immediately cancelled with respect to those unvested Shares, and the
number of Performance Stock Units will be reduced accordingly. The Participant
shall thereupon cease to have any right or entitlement to receive any Shares
under those cancelled units.
          4. Change in Control.
               (a) In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines without the
Participant’s consent according to section 15 (c) of the Plan.
               (b) This Award Agreement shall not in any way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
          5. Adjustment in Shares. The number of Shares subject to the Award
shall be subject to adjustment as provided in Section 15(a) of the Plan.
          6. Issuance of Shares of Common Stock.
              (a) At such time as is set forth in the Issuance Schedule
described in Paragraph 1 of this Award (but in no event later than the date that
is two-and-one-half months from the end of the applicable Performance Period),
the Company shall issue to or on behalf of

 

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the Participant a certificate (which may be in electronic form) for the
applicable number of underlying Shares, subject, however, to the Share
withholding provisions of Paragraph 6(b) pursuant to which the applicable
Withholding Taxes are to be collected. Prior to actual payment of any vested
Shares, the Performance Stock Units shall represent an unsecured obligation.
Notwithstanding anything in the Plan or this Award Agreement to the contrary, if
the vesting of the balance, or some lesser portion of the balance, of the
Performance Stock Units is accelerated in connection with the Participant’s
termination as a Service Provider (provided that such termination is a
“separation from service” within the meaning of Section 409A, as determined by
the Company), other than due to death, and if (x) the Participant is a
“specified employee” within the meaning of Section 409A at the time of such
termination and (y) the payment of such accelerated Performance Stock Units will
result in the imposition of additional tax under Section 409A if paid to the
Participant on or within the six (6) month period following the Participant’s
termination as a Service Provider, then the payment of such accelerated
Performance Stock Units will not be made until the date six (6) months and one
(1) day following the date of such termination, unless the Participant dies
during such six (6) month period, in which case, the Performance Stock Units
will be paid to the Participant’s estate as soon as practicable following his or
her death, subject to Paragraph 6(b). It is the intent of this Award Agreement
to comply with, or be exempt from, the requirements of Section 409A so that none
of the Performance Stock Units provided under this Award Agreement or Shares
issuable thereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply. For
purposes of this Award Agreement, “Section 409A” means Section 409A of the Code,
and any proposed, temporary or final Treasury Regulations and Internal Revenue
Service guidance thereunder, as each may be amended from time to time.
               (b) On the date the vested Shares are to be issued hereunder to
the Participant, the Company shall automatically withhold a portion of those
vested Shares with a Fair Market Value (measured as of the vesting date) equal
to the amount of the applicable Withholding Taxes; provided, however, that the
amount of the Shares so withheld shall not exceed the amount necessary to
satisfy the Company’s required tax withholding obligations using the minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to supplemental taxable income. No fractional
Share shall be so withheld, and the Participant shall pay that portion of the
Withholding Taxes in cash to the Company, either directly or through withholding
from his or her other wages.
               (c) In no event will any fractional Shares be issued.
               (d) The holder of this Award shall not have any stockholder
rights, including voting or dividend rights, with respect to the Shares subject
to the Award until the Participant becomes the record holder of those Shares
following their actual issuance after the satisfaction of the applicable
Withholding Taxes.
          7. Compliance with Laws and Regulations.
               (a) The issuance of Shares pursuant to the Award shall be subject
to compliance by the Company and the Participant with all applicable
requirements of law relating

 

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thereto and with all applicable regulations of any stock exchange (or the Nasdaq
Stock Market, if applicable) on which the Common Stock may be listed for trading
at the time of such issuance.
               (b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance of any Common Stock hereby shall relieve the Company of any
liability with respect to the non-issuance of the Common Stock as to which such
approval shall not have been obtained. The Company, however, shall use its best
efforts to obtain all such approvals.
          8. Successors and Assigns. Except to the extent otherwise provided in
this Award Agreement, the provisions of this Award Agreement shall inure to the
benefit of, and be binding upon, (i) the Company and its successors and assigns
and (ii) the Participant, the Participant’s assigns, the legal representatives,
heirs and legatees of the Participant’s estate and any beneficiaries of the
Award designated by the Participant.
          9. Notices. Any notice required to be given or delivered to the
Company under the terms of this Award Agreement shall be in writing and
addressed to the Company at its principal corporate offices. Any notice required
to be given or delivered to the Participant shall be in writing and addressed to
the Participant at the address indicated below the Participant’s signature line
on this Award Agreement. All notices shall be deemed effective upon personal
delivery or upon deposit in the U.S. mail, postage prepaid and properly
addressed to the party to be notified.
          10. Construction. This Award Agreement and the Award evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Administrator with
respect to any question or issue arising under the Plan or this Award Agreement
shall be conclusive and binding on all persons having an interest in the Award.
          11. Governing Law. The interpretation, performance and enforcement of
this Award Agreement shall be governed by the laws of the State of California
without resort to that State’s conflict-of-laws rules.
          12. Employment at Will. Nothing in this Award Agreement or in the Plan
shall confer upon the Participant any right to continue in employment or service
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Company (or any Parent or Subsidiary employing or
retaining Participant) or of the Participant, which rights are hereby expressly
reserved by each, to terminate the Participant’s employment or service
relationship with the Company (or any Parent or Subsidiary employing or
retaining Participant) at any time for any reason, with or without cause.
          13. Restrictions on Sale of Securities. The Shares issued as payment
for vested Performance Stock Units under this Award Agreement will be registered
under U.S. federal securities laws and will be freely tradable upon receipt.
However, a Participant’s subsequent sale of the Shares may be subject to any
market blackout-period that may be imposed

 

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by the Company and must comply with the Company’s insider trading policies, and
any other applicable securities laws.
          14. Captions. Captions provided herein are for convenience only and
are not to serve as a basis for interpretation or construction of this Award
Agreement.
          15. Award Agreement Severable. In the event that any provision in this
Award Agreement will be held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed to
have any effect on, the remaining provisions of this Award Agreement.
          16. Modifications to the Award Agreement. This Award Agreement
constitutes the entire understanding of the parties on the subjects covered. The
Participant expressly warrants that he or she is not accepting this Award
Agreement in reliance on any promises, representations, or inducements other
than those contained herein. Modifications to this Award Agreement or the Plan
can be made only in an express written contract executed by a duly authorized
officer of the Company. Notwithstanding anything to the contrary in the Plan or
this Award Agreement, the Company reserves the right to revise this Award
Agreement as it deems necessary or advisable, in its sole discretion and without
the consent of the Participant, to comply with Section 409A or to otherwise
avoid imposition of any additional tax or income recognition under Section 409A
prior to the actual payment of Shares pursuant to this Award.
          17. Amendment, Suspension or Termination of the Plan. By accepting
this Award, the Participant expressly warrants that he or she has received a
right to receive stock under the Plan, and has received, read and understood a
description of the Plan. The Participant understands that the Plan is
discretionary in nature and may be amended, suspended or terminated by the
Company at any time.
          By Participant’s electronic acceptance and/or signature and the
signature of the Company’s representative below, the Participant and the Company
agree that this Award is granted under and governed by the terms and conditions
of the Plan and this Award Agreement. Participant has reviewed and fully
understands all provisions of the Plan and this Award Agreement in their
entirety, and has had an opportunity to obtain the advice of counsel prior to
executing this Award Agreement. Participant hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to the Plan and this Award Agreement.

     
 
  MCAFEE, INC.
 
   
 
  By:  
 
  Name:  
 
  Title: