##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K/A
 (Amendment
    No. 1)
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Year Ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    from          to   Commission File Number:
    001-31216
  McAfee, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

77-0316593(I.R.S. Employer
    Identification Number)3965 Freedom Circle
    Santa Clara, California(Address of principal
    executive offices)

95054(Zip Code)   Registrants telephone number, including area code:
 (408) 988-3832
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon stock, par value $0.01 per share
    and related Preferred Share Purchase Rights

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated filer
    þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o  (Do not check if a smaller
    reporting company)
  Rule 12b-2 o þ
    DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 





MCAFEE,
    INC. AND SUBSIDIARIESFORM 10-K/A
    For the year ended December 31, 2007
  TABLE OF
    CONTENTS
   
 PageExplanatory Note


3PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


4Item 11.

Executive Compensation


8Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


30Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


32Item 14.

Principal Accountant Fees and Services


33PART IVItem 15.

Exhibits and Financial Statement Schedules


34Signatures


35Certification of CEO and CAO Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 302Certification of Chief Accounting Officer Pursuant to Section 302   2




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##### Table of Contents



EXPLANATORY
    NOTE  Form 10-K/A Form 10-K Form 10-K. Form 10-K/A
   3




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Directors
  YearTerm


DirectorName

Age


Principle Occupation

Committee Memberships

Expires


SinceClass III Directors:Thomas E. Darcy


58


Executive vice president, chief financial officer and director,
    Tocagen Inc.

Audit Committee, Chairman


2007
(1)


2008
(1)Denis J. OLeary


51


Private Investor and Consultant; Director, Fiserv, Inc.

Compensation Committee


2007
(1)


2003Robert W. Pangia


56


Partner, Ivy Capital Partners, LLC; Director, Biogen Idec Inc.

Audit Committee


2007
(1)


2001Class I Directors:Carl Bass


50


President and chief executive officer, Autodesk, Inc.

Governance and Nominations Committee


2008



2008Robert B. Bucknam


57


Vice president, Cogent, Inc.

Governance and Nominations Committee


2008



2003Liane Wilson


65


Consultant

Compensation Committee


2008



2002Class II Directors:Leslie G. Denend


67


Director, Verifone, Inc. and USAA

Compensation Committee, Chairman


2009



1995David G. DeWalt


43


Chief executive officer and president, McAfee, Inc.; Director,
    Polycom, Inc.




2009



2007Charles J. Robel(non-executive
    chairman)


57


Director, Autodesk, Inc., DemandTec, Inc. and Informatica
    Corporation

Governance and Nominations Committee, Chairman Audit Committee


2009



2006     (1)
    
    We did not hold an annual meeting of stockholders in 2007. Under
    our bylaws, directors hold office until their term expires
    andtheir respective successors are elected.  Executive
    Officers
  Name

Age


PositionDavid G. DeWalt


43


Chief executive officer and presidentChristopher S. Bolin


40


Executive vice president of product development and chief
    technology officerMark D. Cochran


49


Executive vice president, general counsel and corporate secretaryMichael P. DeCesare


43


Executive vice president of worldwide sales operationsKeith S. Krzeminski


46


Chief accounting officer and senior vice president of finance   Director
    Biographies
  Thomas E. Darcy
 4




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##### Table of Contents



Denis J. OLeary
  Robert W. Pangia
  Carl Bass
  Robert B. Bucknam
  Liane Wilson
  Leslie G. Denend
  David G. DeWalt
  Charles J. Robel
 5




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##### Table of Contents



Executive
    Officer Biographies
    Christopher S. Bolin
  Mark D. Cochran
  Michael P. DeCesare e-business
  Keith S. Krzeminski
    Board of
    Directors and Board Committees
    investor.mcafee.com
 6




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##### Table of Contents



Audit
    Committee
    Compensation
    Committee
    Governance
    and Nominations Committee
    Communications
    with the Board of Directors
    Section 16(a)
    Beneficial Ownership Reporting Compliance
   7




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Other
    Corporate Governance Matters
  investor.mcafee.com Form 8-K.
    Item 11.
    Executive
    Compensation  A.
    Executive
    Summary    David G. DeWalt

Chief executive officer and presidentChristopher S. Bolin

Executive vice president of product development; chief
    technology officerMichael P. DeCesare

Executive vice president of worldwide sales operationsMark D. Cochran

Executive vice president, general counsel and corporate secretaryRoger J. King(1)

Executive vice president of worldwide channel operationsRichard J. Decker(1)

Senior vice president and chief information officerFormer Executive OfficersEric F. Brown(2)

Former chief operating officer and chief financial officerDale L. Fuller(3)

Former interim chief executive officer and president     (1)
    
    This individual, who currently serves in the capacity indicated,
    served as one of our executive officers for part of 2007 but not
    as of December 31, 2007.(2)
    
    This individual served as our chief operating officer and chief
    financial officer until April 4, 2008.(3)
    
    This individual served as our interim chief executive officer
    and president until April 1, 2007.   8




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##### Table of Contents



and/or
        B.
    Executive
    Compensation Design  1.
    Compensation
    Objectives and Philosophy    
    Attract, reward and retain the most talented and dedicated
    executives available;
    Link cash and equity incentives to individual and corporate
    performance; and
    Align executive incentives with stockholder value creation.    
    Use simple and reasonable measures of performance;
    Minimize executive perquisites;
    For executives in more senior positions, provide cash
    compensation that is primarily weighted toward variable (bonus)
    compensation, which is linked primarily to performance;
    For executives in more senior positions, provide total
    compensation that is primarily weighted toward equity
    compensation (performance stock units, restricted stock units
    and options) rather than cash, to reflect senior
    executives greater influence on overall corporate results
    and stockholder return;
    Use multi-year equity vesting to ensure that senior executives
    hold sufficient unvested equity value to provide a meaningful
    retention incentive;
    Use competitive benchmarking with peer companies (described in
    Section C3); and
    Use an outside consulting firm, as appropriate, to validate
    market practices and trends for our industry.  2.
    Elements
    of Compensation   9




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##### Table of Contents




    Base salary;
    Annual or quarterly cash bonuses; and
    Equity compensation in the form of performance stock units,
    restricted stock units and stock options.  3.
    Key
    Performance Metrics (KPMs) and Other Performance
    Criteria  and/or
    
    Leadership style and effectiveness, including teamwork;
    Integrity;
    Innovation; and
    Work ethic.  4.
    Base
    Salaries    5.
    Cash
    Bonuses     10




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6.
    Equity
    Compensation in General    
    Strengthen the link between the creation of stockholder value
    and long-term executive compensation;
    Provide an opportunity for increased equity ownership by
    executives;
    Provide long-term retention incentives to executives; and
    Maintain competitive levels of total direct compensation.    7.
    Stock
    Options, Restricted Stock Units and Restricted Stock
    Awards         11




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##### Table of Contents



8.
    Mix of
    Salary, Cash Bonuses and Equity; Total Direct
    Compensation    9.
    Severance
    and Change of Control Arrangements  and/or
  10.
    Perquisites
    and Other Benefits    C.
    Executive
    Compensation Implementation  1.
    Independent
    Compensation Committee Determines Executive
    Compensation   12




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2.
    The
    Role of Consultants       13




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3.
    The
    Role of Peer Groups, Survey Data and Benchmarking  and/or
  Fiscal 2007


Market Cap as of


1-Yr Stockholder


3-Yr StockholderCompany

Revenue ($MM)(3)


12/31/2007 ($MM)


Return


ReturnMcAfee

$
1,308.2


$
6,020.5



32.1
%


9.0
%Autodesk

$
2,171.9


$
11,444.8



(5.9
)%


11.9
%BEA Systems

$
1,535.8


$
6,517.6



51.6
%


29.9
%BMC Software

$
1,580.4


$
7,170.8



42.2
%


16.3
%Business Objects(1)

$
1,510.0



N/A



N/A



N/ACadence Design Systems

$
1,615.0


$
4,672.5



(5.0
)


7.2
%CIBER

$
1,082.0


$
371.2



(9.9
)%


(14.1
)%Citrix Systems

$
1,391.9


$
7,121.6



40.5
%


15.8
%Cognos(2)

$
979.3



N/A



N/A



N/AMentor Graphics

$
879.7


$
978.2



(55.6
)%


(16.0
)%Novell

$
932.5


$
2,408.7



26.0
%


1.7
%Parametric Technology

$
941.3


$
2,047.4



(0.2
)%


9.7
%Sybase

$
1,025.5


$
2,275.3



5.6
%


9.4
%Synopsys

$
1,212.5


$
3,795.4



25.5
%


20.3
%VeriSign

$
1,496.3


$
8,381.4



56.4
%


3.8
%     (1)
    
    Data other than revenue not available as Business Objects was
    acquired by SAP in January 2008(2)
    
    Data other than revenue not available as Cognos was acquired by
    IBM in January 2008(3)
    
    Autodesk, BEA Systems and Mentor Graphics each have a January 31
    fiscal year end; data relates to fiscal 2008  and/or
  4.
    Equity
    Grant Practices    
    All new-hire, promotional and retention grants are aggregated
    for approval on predetermined dates (typically once per quarter
    following our earnings announcements);
    No individual or committee other than the compensation committee
    or the board of directors is authorized to approve grants; 14




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
    All grants are approved at a meeting of the compensation
    committee or the board of directors, and not by written consent;
    We determine the exercise price of a stock option based on the
    fair market value of our common stock on the grant date (unless
    otherwise legally required for grants to non-US
    individuals); and
    There are detailed procedures in place for grant approvals and
    documentation.  D.
    2007
    Executive Compensation Decisions  1.
    Overview        2.
    Key
    Performance Metrics for 2007  and/or
  Name and Title

Company-Wide KPMs

Executive-Specific KPMsDavid G. DeWalt, chief executive officer and president

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings
   Earnings per share

   Enhance the financial controls environment

   Ensure development of long-term company strategy

   Ensure development of effective recruiting, training, retention and personnel programsChristopher S. Bolin,chief technology officer and
    executive vice president of product development

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings

   Earnings per share

   Ship new products and product upgrades in a timely manner

   Develop and refine product roadmap

   Prepare the business case for each new product ideaMark D. Cochran, general counsel, executive vice
    president and corporate secretary

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings

   Earnings per share

   Conduct analysis and develop strategies for litigation

   Close acquisitions

   Assess and develop legal team 15




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##### Table of Contents



Name and Title

Company-Wide KPMs

Executive-Specific KPMsMichael P. DeCesare, executive vice president of
    worldwide sales operations

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings

   Earnings per share

   Increase sales capacity

   Assess sales processes

   Leverage compensation modelRoger J. King, executive vice president of worldwide
    channel operations

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings

   Earnings per share

   Achieve sales goals designated by product, customer segment and geographyRichard J. Decker, chief information officer and senior
    vice president

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings

   Earnings per share

   Deploy and operate key internal technologies in a timely and effective manner

   Integrate operational functions of acquired companies

   Support CFO in remediating financial controls environment issuesFORMER EXECUTIVESEric F. Brown, former chief operating officer and chief
    financial officer

   Achieve operating plan (non-GAAP) financial targets, including:

   Bookings

   Earnings per share

   Complete restatement of financial results and related SEC filings

   Remediate financial controls environment issues

   Support CEO and sales in closing strategic dealsDale L. Fuller, former interim chief executive officer
    and president

N/A  see discussion below

N/A  see discussion below     3.
    Compensation
    for David G. DeWalt   16




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
    Starting annual base salary of $900,000.
    Annual target bonus of $1,000,000, with a $600,000 minimum
    guaranteed for 2007.
    Reimbursement of reasonable relocation expenses, if
    Mr. DeWalt relocated from California to our Texas office.
    Stock options to purchase 500,000 shares of our common
    stock (New Hire Options), vesting 25% on the first
    anniversary of the grant date and the balance in equal monthly
    amounts over the next three years.
    Restricted stock units for 125,000 shares (New Hire
    RSUs), vesting one-third on each anniversary of
    Mr. DeWalts hire date. (These RSUs could not be
    granted until 2008, after we completed our financial
    restatement. These RSUs are reflected in the Summary
    Compensation Table, but they are not reflected in the Grants of
    Plan-Based Awards tables in the following sections of this
    document.)
    Performance stock units for 125,000 shares, which vest in
    three equal installments based on our achievement of non-GAAP
    financial performance metrics established by the compensation
    committee for each of 2007, 2008 and 2009. Vesting is also
    contingent on Mr. DeWalts continued employment with
    us. To the extent the vesting conditions are not satisfied, the
    performance stock units will be forfeited. (These PSUs could not
    be granted until 2008, after we completed our financial
    restatement. These PSUs are reflected in the Summary
    Compensation Table, but they are not reflected in the Grants of
    Plan-Based Awards tables in the following sections of this
    document.)
    Severance benefits as follows: If Mr. DeWalts
    employment is terminated by us without cause or if
    he resigns for good reason, then subject to
    execution of a release of claims, he will receive, less
    applicable tax withholdings: (i) a lump sum payment equal
    to his annual base salary; (ii) a lump sum payment equal to
    the current years target bonus; (iii) accelerated
    vesting on the next unvested tranche of his New Hire RSUs; and
    (iv) reimbursement for continued health benefits for him
    and his covered dependents under our health plans for
    12 months.
    Change of control benefits as follows: If Mr. DeWalts
    employment is terminated by us without cause or if
    he resigns for good reason, and such termination
    occurs within 12 months following a change of
    control, then subject to execution of a release, he will
    receive, less applicable tax withholdings: (i) a lump sum
    payment equal to his annual base salary; (ii) a lump sum
    payment equal to the current years target bonus;
    (iii) accelerated vesting on his New Hire Options equal to
    the greater of (A) 12 months accelerated vesting, or
    (B) 50% of the then-unvested shares; and
    (iv) reimbursement for continued health benefits for him
    and his covered dependents under our health plans for
    12 months.    4.
    Compensation
    for Christopher S. Bolin   17




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5.
    Compensation
    for Mark D. Cochran      
    Starting annual base salary of $350,000.
    Annual target bonus of $250,000.
    Stock options to purchase 75,000 shares of our common stock
    (New Hire Options), vesting 25% on the first
    anniversary of the grant date and the balance in equal monthly
    amounts over the next three years.
    Restricted stock units for 40,000 shares, vesting one-third
    on each anniversary of Mr. Cochrans hire date. (These
    RSUs were not granted until 2008, after we completed our
    financial restatement, so these RSUs are not reflected in the
    Summary Compensation Table or Grants of Plan-Based Awards tables
    in the following sections of this document.)
    Severance benefits as follows: If Mr. Cochrans
    employment is terminated by us without cause or if
    he resigns for good reason, then subject to
    execution of a release of claims, he will receive, less
    applicable tax withholdings: (i) a lump sum payment equal
    to his annual base salary and bonus; (ii) accelerated
    vesting of his New Hire Options that would have otherwise vested
    over the next 12 months; and (iii) reimbursement for
    continued health benefits for him and his covered dependents
    under our health plans for 12 months.    6.
    Compensation
    for Michael P. DeCesare     18




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##### Table of Contents




    Starting annual base salary of $600,000.
    Annual target bonus of $600,000.
    Stock options to purchase 100,000 shares of our common
    stock (New Hire Options), vesting 25% on the first
    anniversary of the grant date and the balance in equal monthly
    amounts over the next three years.
    Restricted stock units for 50,000 shares, vesting one-third
    on each anniversary of Mr. DeCesares hire date.
    (These RSUs were not granted until 2008, after we completed our
    financial restatement, so these RSUs are not reflected in the
    Summary Compensation Table or Grants of Plan-Based Awards tables
    in the following sections of this document.)
    Performance stock units for 50,000 shares, which vest in
    three equal installments based on our achievement of non-GAAP
    financial performance metrics established by the compensation
    committee for each of 2008, 2009 and 2010. Vesting is also
    contingent on Mr. DeCesares continued employment with
    us. To the extent the vesting conditions are not satisfied, the
    performance stock units will be forfeited. (These PSUs were not
    granted until 2008, after we completed our financial
    restatement, so these PSUs are not reflected in the Summary
    Compensation Table or Grants of Plan-Based Awards tables in the
    following sections of this document.)
    Severance benefits as follows: If Mr. DeCesares
    employment is terminated by us without cause or if
    he resigns for good reason, then subject to
    execution of a release of claims, he will receive, less
    applicable tax withholdings: (i) a lump sum payment equal
    to his annual base salary and bonus; (ii) accelerated
    vesting of his New Hire Options that would have otherwise vested
    over the next 12 months; and (iii) reimbursement for
    continued health benefits for him and his covered dependents
    under our health plans for 12 months.    7.
    Compensation
    for Roger J. King    8.
    Compensation
    for Richard J. Decker    9.
    Compensation
    for Eric F. Brown   19




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10.
    Compensation
    for Dale L. Fuller        E.
    Tax,
    Accounting and Other Considerations    Tax Deductibility of Compensation
    Expense.
   20




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does
    Tax Implications for
    Executives.
    Accounting Considerations.
  Compensation
    Committee Report on Compensation Discussion and
    Analysis
    Form 10-K/A.
  
     Compensation
    Committee Interlocks and Insider Participation
   21




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##### Table of Contents



SUMMARY
    COMPENSATION TABLE
    Stock

Option

All OtherName and Principal Position

Year

Salary(1)

Bonus(2)

Awards(4)

Awards(4)

Compensation(8)

TotalDavid G. DeWalt


2007


$
675,000


$
1,250,000


$
2,361,081
(5)

$
1,135,569


$
139,226


$
5,560,876Chief executive officer and presidentChristopher S. Bolin


2007



450,000



374,455



908,004



231,590



14,329
(7)


1,978,378Chief technology officer and executive vice president of product
    development


2006



440,363



249,750



836,885



482,660



5,368



2,015,026Mark D. Cochran


2007



108,814



77,978







59,850



448



247,090General counsel, executive vice president and corporate secretaryMichael P. DeCesare


2007



148,076



158,301







79,800



135



386,312Executive vice president of worldwide sales operationsRoger J. King


2007



400,000



428,000



343,553
(6)


257,811



12,510



1,441,874Executive vice president of worldwide channel operations


2006



100,000



100,000



77,182



57,919



656



335,757Richard J. Decker


2007



412,960



249,096



393,307



214,443



5,262



1,275,068Senior vice president and chief information officer


2006



397,732



218,400



322,189



408,378



7,048



1,353,747Former Executive OfficersEric F. Brown


2007



550,000



655,278
(3)


1,693,518



620,478



110,495



3,629,769Former chief operating officer and chief financial officer


2006



540,930



941,250



1,515,722



1,153,091



129,245



4,280,238Dale L. Fuller


2007



427,707



217,500







10,539



47,198



702,944Former interim chief executive officer and president


2006



329,807



217,500







178,555



245,155



971,017     (1)
    
    Salary includes amounts deferred under our 401(k) plan.(2)
    
    Amounts in this column reflect bonus payments earned in reported
    year, although some amounts were paid in subsequent year.(3)
    
    Bonus amount includes $100,000 bonus that required
    Mr. Brown to remain with us for one year after the payment.
    Mr. Brown resigned effective April 4, 2008, so he
    forfeited the bonus.(4)
    
    The compensation amounts reported in the Stock
    Awards and Option Awards columns reflect the
    expense that we reported in our consolidated 2007 financial
    statements under SFAS 123(R), except that the amounts of
    expense reported in our financial statements are net of
    estimated forfeitures, while the amounts shown in the table are
    gross of estimated forfeitures. These amounts consist of the
    fair value expense for all existing share-based awards during
    2007. For this purpose, the fair value of an award is
    apportioned over the period during which the award is expected
    to vest. The fair value of a stock award is equal to the closing
    price of our stock on the grant date. The fair value of an
    option award is determined using the Black-Scholes option
    pricing model. Our assumptions for financial statement purposes
    are described in Note 15 to our consolidated financial
    statements included in our
    Form 10-K
    for the year ended December 31, 2007. 22




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##### Table of Contents



(5)
    
    Amount includes compensation expense recorded in 2007 for
    restricted stock units promised in our 2007 employment agreement
    with Mr. DeWalt, but not granted until our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    were granted on February 11, 2008.(6)
    
    Amount includes compensation expense recorded in 2007 for
    restricted stock units promised in our 2006 employment agreement
    with Mr. King, but not granted until our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    were granted on February 11, 2008.(7)
    
    In February 2008, we entered into an agreement with
    Mr. Bolin to increase the exercise price of certain of his
    outstanding options, such that the amended exercise price would
    be equal to the closing price of our stock on the appropriate
    accounting measurement date. As a result, we will pay
    Mr. Bolin a cash bonus equal to the increase in aggregate
    exercise prices of $135,533 in 2009. The amount set forth in the
    table above does not reflect the amount of this cash bonus.(8)
    
    All other compensation consisted of the following:  Gifts,Family


Group TermNon-Business


Travel


Life


Company








TaxCommuting


Living


Aircraft


and Matching


Insurance


Contributions





Director


Gross-Name

Year


Expense


Allowance


Usage


Gifts(1)


Coverage


to 401(k)





Fees


Ups(2)


TotalDavid G. DeWalt


2007


$
14,484


$
61,102


$



$
454


$
405


$











$
62,781


$
139,226Christopher S. Bolin


2007















6,577



540



3,600











3,612


$
14,3292006















568



1,026



3,600











174


$
5,368Mark D. Cochran


2007















108



270















70


$
448Michael P. DeCesare


2007



















135


















$
135Roger J. King


2007















5,640



1,242



3,600











2,028


$
12,5102006



















656


















$
656Richard J. Decker


2007















309



1,242



3,600











111


$
5,2622006















3,255



2,622















1,171


$
7,048Former Executive OfficersEric F. Brown


2007



53,683











10,356



540



3,600











42,316


$
110,4952006



54,609







36,030



1,981



1,140



2,292











33,193


$
129,245Dale L. Fuller


2007



3,979



14,976







7,951



428















19,864


$
47,1982006



3,181



30,214



108,090







428











83,500



19,742


$
245,155     (1)
    
    Represents the cost of spousal travel to McAfee events, the cost
    of token gifts received at McAfee events and company-matching
    charitable contributions.(2)
    
    The tax
    gross-up
    payments disclosed in this column relate to taxes imposed on our
    reimbursements of living and commuting expenses (in the case of
    Messrs. DeWalt, Brown and Fuller) and taxes imposed on
    token gifts received at McAfee events and the cost of spousal
    travel to McAfee events.  GRANTS OF
    PLAN-BASED AWARDS
    All OtherAll Other


StockStock


Awards:Awards:


Number of





Grant Date FairNumber of


Securities


Exercise or Base


Value ofShares of Stock


Underlying


Price of Option


Stock and OptionName

Grant Date


or Units


Options(1)


Awards


Awards(2)David G. DeWalt


04/30/2007




(3)


500,000


$
32.49


$
6,771,700Mark D. Cochran


10/29/2007




(4)


75,000



39.90



1,387,950Michael P. DeCesare


10/29/2007




(5)


100,000



39.90



1,850,600     (1)
    
    All options in this column were granted at an exercise price per
    share equal to the fair market value of the common stock on the
    date of grant. These options vests at the rate of one-fourth (or
    25%) one year from the date 23




---



##### Table of Contents



of grant and the remaining shares vest at a rate of 1/36th per
    month for the remaining 36 months of the vesting period.
    Under the 1997 Stock Incentive Plan, the board of directors is
    allowed to modify the terms of outstanding options. The
    exercisability of options may be accelerated upon a change of
    control. Unvested options are generally cancelled upon an
    optionees termination of service.(2)
    
    The grant date fair value of stock and option awards column
    reflects the expense that we would recognize in our financial
    statement over the awards vesting schedule. The fair value
    of a stock award is equal to the closing price of our stock on
    the grant date. The fair value of an option award is determined
    using the Black-Scholes option pricing model. Our assumptions
    for financial statement purposes are described in Note 15
    to our consolidated financial statements included in our
    Form 10-K
    for the year ended December 31, 2007.(3)
    
    During 2007, we agreed to grant Mr. DeWalt 125,000
    restricted stock units and 125,000 performance stock units after
    our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    and performance stock units were granted on February 11,
    2008.(4)
    
    During 2007, we agreed to grant Mr. Cochran 40,000
    restricted stock units after our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    were granted on February 11, 2008.(5)
    
    During 2007, we agreed to grant Mr. DeCesare 50,000
    restricted stock units and 50,000 performance stock units after
    our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    and performance stock units were granted on February 11,
    2008. 24




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##### Table of Contents



OUTSTANDING
    EQUITY AWARDS AT FISCAL YEAR-END
    Option Awards


Stock AwardsNumber of








Number of


Market ValueSecurities Underlying


Option


Option


Shares or Units


of Shares orUnexercised Options(1)


Exercise


Expiration


of Stock That


Units of Stock ThatName

Exercisable


Unexercisable


Price


Date


have not Vested


have not VestedDavid G. DeWalt






500,000


$
32.49



04/30/2017




(6)


Christopher S. Bolin


5,000






$
11.06



03/11/2009







10,000






$
11.06



10/01/2008







10,000






$
16.94



01/24/2010







4,500






$
24.56



05/09/2010







20,000






$
21.13



07/03/2010







70,417






$
4.19



02/26/2011







2,083






$
4.19
(3)


02/26/2011







40,000






$
25.43



04/09/2012







35,000






$
16.90



04/08/2013







29,375



625


$
14.96
(4)


03/15/2014







67,188



7,812


$
16.57
(5)


07/21/2014







53,333



26,667


$
21.61



04/19/2015























16,666
(7)

$
624,975















50,000
(8)

$
1,875,000Mark D. Cochran






75,000


$
39.90



10/29/2017




(9)


Michael P. DeCesare






100,000


$
39.90



10/29/2017




(10)


Roger J. King


29,167



70,833


$
25.79



10/10/2016




(11)


Richard J. Decker


48,333



31,667


$
28.81



07/26/2015























50,000
(8)

$
1,875,000Former Executive OfficersEric F. Brown


218,750



81,250


$
28.42



07/03/2008























25,000
(7)

$
937,500















125,000
(8)

$
4,687,500Dale L. Fuller


16,668
(2)





$
26.92



03/20/2008







     (1)
    
    All options in these columns (except Mr. Fullers
    outstanding options) vest at the rate of one-fourth (or 25%) one
    year from the date of grant and the remaining shares vest at a
    rate of 1/36th per month for the remaining 36 months of the
    vesting period. Under the 1997 Stock Incentive Plan, the board
    of directors is allowed to modify the terms of outstanding
    options. The exercisability of options may be accelerated upon a
    change of control. Unvested options are generally cancelled upon
    an optionees termination of service. See footnote
    (2) below for the vesting schedule for
    Mr. Fullers option grant.(2)
    
    Reflects remaining unexercised shares from initial option grant
    upon joining our board of directors. Option vested in equal
    one-third tranches on each of the first, second and third
    anniversaries of the date of grant. Mr. Fuller resigned
    from our board of directors in July 2007.(3)
    
    In February 2008, we entered into an agreement with
    Mr. Bolin to increase the exercise price of certain of his
    outstanding options, such that the amended exercise price would
    be equal to the closing price of our stock on the appropriate
    accounting measurement date. Specifically, we amended the
    exercise price of this option grant from $4.19 to $6.03 and will
    pay Mr. Bolin a cash bonus equal to the increase in
    aggregate exercise price of $3,833 in 2009. 25




---



##### Table of Contents



(4)
    
    In February 2008, we entered into an agreement with
    Mr. Bolin to increase the exercise price of certain of his
    outstanding options, such that the amended exercise price would
    be equal to the closing price of our stock on the appropriate
    accounting measurement date. Specifically, we amended the
    exercise price of this option grant from $14.96 to $18.90 and
    will pay Mr. Bolin a cash bonus equal to the increase in
    aggregate exercise price of $118,200 in 2009.(5)
    
    In February 2008, we entered into an agreement with
    Mr. Bolin to increase the exercise price of certain of his
    outstanding options, such that the amended exercise price would
    be equal to the closing price of our stock on the appropriate
    accounting measurement date. Specifically, we amended the
    exercise price of this option grant from $16.57 to $16.75 and
    will pay Mr. Bolin a cash bonus equal to the increase in
    aggregate exercise price of $13,500 in 2009.(6)
    
    During 2007, we agreed to grant Mr. DeWalt 125,000
    restricted stock units and 125,000 performance stock units after
    our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    and performance stock units were granted on February 11,
    2008.(7)
    
    Vests in equal one-third tranches on each of the first, second
    and third anniversaries of the date of grant.(8)
    
    Vests in equal one-half tranches on each of the second and third
    anniversaries of the date of grant.(9)
    
    During 2007, we agreed to grant Mr. Cochran 40,000
    restricted stock units after our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    were granted on February 11, 2008.(10)
    
    During 2007, we agreed to grant Mr. DeCesare 50,000
    restricted stock units and 50,000 performance stock units after
    our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    and performance stock units were granted on February 11,
    2008.(11)
    
    During 2006, we agreed to grant Mr. King 40,000 restricted
    stock units after our
    Form S-8
    registration statement covering shares issuable under our stock
    incentive plans became effective. These restricted stock units
    were granted on February 11, 2008.  OPTIONS
    EXERCISED AND STOCK VESTED
    Option Awards


Stock AwardsNumber of


Value


Number of


ValueShares Acquired


Realized


Shares Acquired


RealizedName

on Exercise


on Exercise


on Vesting


on VestingEric F. Brown





$




25,000


$
717,000Christopher S. Bolin










16,667


$
579,178   Severance
    and Change of Control Benefits
  and/or
   26




---



##### Table of Contents



27




---



##### Table of Contents



TerminationInvoluntary











UponTermination not


Resignation For








Change infor Cause


Good Reason


Death


Disability


ControlDavid G. DeWaltBase salary and cash bonus

$
1,900,000


$
1,900,000


$



$



$
1,900,000Equity

$
1,562,500


$
1,562,500


$



$



$
1,252,500Healthcare and other insurance benefits

$
17,257


$
17,257


$



$



$
17,257Tax gross ups

$



$



$



$



$
Christopher S. BolinBase salary and cash bonus

$
315,000


$
315,000


$
315,000


$
315,000


$
315,000Equity

$



$



$



$



$
1,222,271Healthcare and other insurance benefits

$
6,540


$
6,540


$
6,540


$
6,540


$
6,540Tax gross ups

$



$



$



$



$
Mark D. CochranBase salary and cash bonus

$
600,000


$
600,000


$



$



$
600,000Equity

$



$



$



$



$
Healthcare and other insurance benefits

$
12,824


$
12,824


$



$



$
12,824Tax gross ups

$



$



$



$



$
Michael P. DeCesareBase salary and cash bonus

$
1,200,000


$
1,200,000


$



$



$
1,200,000Equity

$



$



$



$



$
Healthcare and other insurance benefits

$
17,257


$
17,257


$



$



$
17,257Tax gross ups

$



$



$



$



$
Eric F. BrownBase salary and cash bonus

$
1,149,500


$
1,149,500


$
1,149,500


$
1,495,000


$
1,495,000Equity

$
1,675,000


$
1,675,000


$
1,675,000


$
1,675,000


$
1,675,000Healthcare and other insurance benefits

$
13,393


$
13,393


$
13,393


$
13,393


$
13,393Tax gross ups

$



$



$



$



$
   DIRECTOR
    COMPENSATION
    
    $40,000 annual retainer for each board member, payable in
    quarterly installments;
    an additional $10,000 annual retainer, payable in quarterly
    installments, to our lead independent director and each chairman
    of a board committee;
    an additional $100,000, payable in quarterly installments, to
    the chairman of the board;
    $1,500 for each board or board committee meeting attended in
    person; 28




---



##### Table of Contents




    $1,000 for each board or board committee meeting attended by
    telephone;
    reimbursement of expenses of attending board and committee
    meetings; and
    medical insurance benefits for directors and their families.          Stock


Option


All OtherName

Fees Earned


Awards


Awards(1)


Compensation


TotalRobert B. Bucknam

$
99,500


$



$
264,897


$



$
364,397Leslie G. Denend

$
75,000






$
265,756






$
340,756Robert M. Dutkowsky(2)

$
5,833














$
5,833Dale L. Fuller(3)

$
17,239






$
10,539






$
27,778Denis J. OLeary

$
79,500






$
263,503






$
343,003Robert W. Pangia

$
83,500






$
240,985






$
324,485Charles J. Robel

$
308,500






$
197,013






$
505,513Liane Wilson

$
75,000






$
242,231






$
317,231     (1)
    
    The compensation amounts reported in the Option
    Awards column reflect the expense that we reported in our
    consolidated 2007 financial statements under SFAS 123(R),
    except that the amounts of expense reported in our financial
    statements are net of estimated forfeitures, while the amounts
    shown in the table are gross of estimated forfeitures. These
    amounts consist of the fair value expense for all existing
    share-based awards during 2007. For this purpose, the fair value
    of an award is apportioned over the period during which the
    award is expected to vest. The fair value of a stock award is
    equal to the closing price of our stock on the grant date. The
    fair value of an option award is determined using the
    Black-Scholes option pricing model. Our assumptions for
    financial statement purposes are described in Note 15 to
    our consolidated financial statements included in our
    Form 10-K
    for the year ended December 31, 2007.(2)
    
    Mr. Dutkowsky resigned as a member of our board of
    directors in January 2007.(3)
    
    Mr. Fuller resigned as a member of our board of directors
    in July 2007. 29




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Number of





Percent ofShares


Right to


OutstandingName and Address of Beneficial Owners

Owned(1)


Acquire(2)


Shares(3)David G. DeWalt


64,272
(4)


125,000



*Carl Bass










*Robert B. Bucknam






95,000



*Thomas E. Darcy










*Leslie G. Denend


6,297



80,000



*Denis J. OLeary






70,000



*Robert W. Pangia






127,500



*Charles J. Robel






13,334



*Liane Wilson






115,000



*Christopher S. Bolin


30,304



11,354



*Mark D. Cochran










*Michael P. DeCesare










*Richard J. Decker






55,000



*Roger J. King






39,583



*Eric F. Brown


94,278



250,000



*Dale L. Fuller










*J&W Seligman & Co. LLC(5)


9,837,842







6.1
%100 Park Avenue, New York City, New York 10017Lord, Abbett & Co. LLC(6)


10,155,998







6.3
%90 Hudson Street, Jersey City, NJ 07302Wellington Management Company, LLP(7)


20,013,131







12.5
%75 State Street, Boston, MA 02109All executive officers and directors as a group (16 persons)


195,151



981,771



*     *
    
    Less than 1%.(1)
    
    Ownership includes direct and indirect (beneficial) ownership,
    as defined by SEC rules. The SEC rules for determining
    beneficial ownership are very complex. Generally, however,
    shares owned directly by a stockholder, plus those controlled by
    the stockholder (e.g., owned by members of the
    stockholders immediate families), are considered
    beneficially owned. Ownership excludes shares that may be
    acquired through stock option exercises. Unless otherwise
    indicated, the address of each beneficial owner is c/o. McAfee,
    Inc., 3965 Freedom Circle, Santa Clara, CA 95054. To our
    knowledge, each person has sole voting and investment power over
    the shares owned unless otherwise noted.(2)
    
    Consists of options that are currently exercisable or will
    become exercisable within 60 days of March 21, 2008.(3)
    
    Based upon 160,620,018 shares outstanding as of
    March 21, 2008.(4)
    
    Includes 41,667 restricted stock units granted to
    Mr. DeWalt that will vest in April 2008.(5)
    
    According to the amended Schedule 13G filed on
    January 28, 2008 by J&W Seligman & Co. LLC
    (J&W Seligman). J&W Seligman is the
    beneficial holder of 9,837,842 shares of our common stock
    and it does not have sole dispositive power or sole voting power
    over any shares.(6)
    
    According to the amended Schedule 13G filed on
    February 14, 2008 by Lord, Abbett & Co. LLC
    (Lord Abbett). Lord Abbett is the beneficial holder
    of 10,155,998 shares of our common stock and it has sole
    dispositive power over 10,155,998 shares and has sole
    voting power with respect to 9,801,298 shares. 30




---



##### Table of Contents



(7)
    
    According to the amended Schedule 13G filed on
    February 14, 2008 by Wellington Management Company, LLP
    (Wellington Management). Wellington Management is
    the beneficial holder of 20,013,131 shares of our common
    stock and it does not have sole dispositive power or sole voting
    power over any shares.  Equity
    Compensation Plans
    Number ofSecuritiesNumber of





Remaining AvailableSecurities to be





for Future IssuanceIssued upon


Weighted-Average


(ExcludingExercise of


Exercise Price of


Securities ReflectedPlan Category

Outstanding options


Outstanding Options


in First Column)Plans approved by stockholders(1)


12,378,129


$
24.69



5,319,531Plans not approved by stockholders


1,789,411


$
17.81



394,848     (1)
    
    All option grants pursuant to the 1993 Stock Option Plan for
    Outside Directors (the Directors Plan), have ten
    year terms and are required to be granted at 100% of fair market
    value on the date of grant. Our other option plans do not have
    this restriction. As of December 31, 2007,
    736,668 shares were outstanding under the Directors Plan at
    a weighted average exercise price of $19.90, and
    827,392 shares remained available for future issuance.    2000
    Nonstatutory Stock Option Plan
    1999
    Nonstatutory Stock Plan
    1997
    Non-Officer Stock Plan
   31




---



##### Table of Contents



Foundstone,
    Inc. 2000 Stock Plan
    SafeBoot
    Option Plan 2006
    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   32




---



##### Table of Contents



Form 10-K
    Item 14.
    Principal
    Accountant Fees and Services  Audit
    Fees
  Form 10-K, Form 10-Q,
  Audit-Related
    Fees
    Tax
    Fees
    All Other
    Fees
     33




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a)(1) and (a)(2): Form 10-K/A.
  Exhibits:
  ExhibitNumber

Description31
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of The Sarbanes-Oxley Act of 200231
.2

Certification of Chief Accounting Officer pursuant to
    Section 302 of The Sarbanes-Oxley Act of 2002  34




---



##### Table of Contents



SIGNATURES      By:
    /s/  David
    G. DeWalt     Chief Executive Officer and President
    By:
    /s/  Keith
    S. Krzeminski     Chief Accounting Officer and Senior Vice
  President, Finance
 35




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description31
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of The Sarbanes-Oxley Act of 200231
.2

Certification of Chief Accounting Officer pursuant to
    Section 302 of The Sarbanes-Oxley Act of 2002  36