exv10w1



 





Exhibit 10.1









February 23, 2007




Dear David:




     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