Document:

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DATED                                                                       2000
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                              SAGENT TECHNOLOGY INC

                                     - and -

                                  ARTHUR PARKER

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                                SERVICE AGREEMENT

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                             TAYLOR JOYNSON GARRETT
                                    Carmelite
                             50 Victoria Embankment
                                   Blackfriars
                                 London EC4Y 0DX

                              Tel No: 020 7300 7000
                              Fax No: 020 7300 7100

                                  Ref: ASG/SLP

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                                      INDEX

<TABLE>
<CAPTION>
CLAUSE NO.                                                          PAGE NO.
<S>   <C>                                                           <C>
1.    Definitions and Interpretations....................................1
2.    Period of Employment...............................................2
3.    Duties.............................................................3
4.    Place of Employment................................................3
5.    Remuneration and Benefits..........................................4
6.    Signing Bonus......................................................5
7.    Change of Control..................................................6
8.    Expenses...........................................................5
9.    Pension............................................................5
10.   Holidays...........................................................5
11.   Sickness or Injury.................................................6
12.   Outside Interests..................................................7
13.   Confidential Information and Trade Secrets.........................7
14.   Intellectual Property..............................................9
15.   Dismissal.........................................................11
16.   Suspension........................................................12
17.   Grievance and Disciplinary Procedure..............................12
18.   Duties upon Termination...........................................12
19.   Restrictions......................................................13
20.   Restrictive Trade Practices Act...................................16
21.   Data Protection...................................................17
22.   Notices...........................................................17
23.   Miscellaneous.....................................................18
24.   Law and Jurisdiction..............................................19
Schedule 1..............................................................20
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                                                                   EXHIBIT 10.32

THIS AGREEMENT is made the 1st day of January 2001

BETWEEN

(1)     SAGENT TECHNOLOGY INC whose principal place of business is at 800 W. El
        Camino Real, Suite 300, Mountain View, CA, 94040, USA (the "Company");
        and

(2)     ARTHUR PARKER of Oak Moor, Mill Green, Headley, Newbury, U.K., RG198AN
        (the "Executive").

AGREED TERMS

1.      DEFINITIONS

1.1     In this agreement including the schedule the following expressions shall
        have the following meanings:

        "ASSOCIATED COMPANY" means any holding or intermediate holding company
        of the Company and any other company over which the Company (either
        alone or in conjunction with any connected person) or any holding or
        intermediate holding company has control for the time being within the
        meaning of section 840 of the ICTA;

        "BOARD" means the board of directors of the Company from time to time;

        "EFFECTIVE DATE" means the date of this agreement;

        "EMPLOYMENT" means the employment of the Executive by the Company;

        "ICTA" means the Income and Corporation Taxes Act 1988;

        "TERMINATION DATE" means the date on which the Executive's employment
        under this agreement terminates;

        "TERMINATION WITHOUT CAUSE" means separation of employment without a
        specific reason;

1.2     In this agreement and the schedule:

        (a)     reference to any statute or statutory provision includes a
                reference to that statute or statutory provision as amended,
                extended or re-enacted and to any regulation, order, instrument
                or subordinate legislation under the relevant statute or
                statutory provision;

        (b)     reference to the singular includes a reference to the plural and
                vice versa;

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        (c)     reference to any clause, sub-clause or schedule is to a clause,
                sub-clause or schedule (as the case may be) of or to this
                agreement;

        (d)     reference to any gender includes a reference to all other
                genders; and

        (e)     references to persons include bodies corporate, unincorporated
                associations and partnerships and any reference to any party who
                is an individual is also deemed to include their respective
                legal personal representative(s).

2.      PERIOD OF EMPLOYMENT

2.1     The Executive's job title will be Executive Vice President, Sales - EMEA
        and President Europe.

2.2     The Employment shall begin on the Effective Date and shall continue
        until terminated in accordance with the terms of this agreement.

2.3     There is no employment with a previous employer which counts as part of
        the Executive's continuous period of employment for the purposes of the
        Employment Rights Act 1996 which began on the Effective Date.

        (a)     The Company may terminate the Employment by giving the Executive
                three months' written notice to expire at any time on or after
                August 1, 2002.

        (b)     The Executive may terminate the Employment by giving the Company
                three months' written notice to expire at any time on or after
                August 1, 2002.

        (c)     The Employment shall in any event terminate without notice upon
                the Executive's sixtieth birthday, unless agreed to otherwise
                between the executive and the Board.

2.4     If written notice is given by the Executive or by the Company to
        terminate the Employment the Company may notwithstanding any other terms
        of this agreement but subject to sub-clause 2.5:

        (a)     require the Executive to continue to perform such duties as the
                Board may direct so long as such duties are not demeaning; or

        (b)     require the Executive to perform no duties and exclude the
                Executive from any premises of the Company or any Associated
                Company,

        and in each case the Company will continue to pay the Executive salary
        and provide all other benefits arising under this agreement during the
        period of notice.

2.5     If written notice is given by the Executive or by the Company to
        terminate the Employment the Company may in its sole and absolute
        discretion terminate the Executive's employment forthwith by undertaking
        to pay the Executive within 28 days salary in lieu of any required
        notice or the unexpired period thereof (subject to tax and national
        insurance) together with a further amount by way of a mutually
        agreeable, reasonable compensation for the loss of the Executive's other
        contractual benefits (including bonus and insurance) and any accrued
        holiday pay entitlement pursuant to clause 10 and Schedule 1. Where the
        Company

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        terminates this agreement in accordance with this sub-clause the terms
        of clauses 13 and 19 shall remain in full force and effect.

2.6     Where the Company terminates this agreement otherwise than in accordance
        with the provisions of sub-clause 2.3(a) and 2.5 (subject always to the
        provisions of clause 15) any damages to which the Executive may be
        entitled shall be calculated in accordance with ordinary common law
        principles including those relating to mitigation of loss.

3.      DUTIES

        The Executive:

        (a)     shall exercise the powers and functions and perform the duties
                reasonably assigned to him from time to time by or under the
                authority of the Board in such manner as shall be reasonably
                specified by or under the authority of the Board;

        (b)     shall report to the Company's Chief Executive Officer and
                President as and when reasonably required;

        (c)     shall devote the whole of his time attention and abilities to
                the performance of his duties during the Company's normal
                business hours of 8am to 5pm Monday to Friday inclusive and at
                such other times as may reasonably be necessary in the interests
                of the Company (unless prevented by illness or other incapacity
                and except as may from time to time be permitted or required by
                the Board) and the Executive accepts that by signing this
                agreement he has agreed that regulation 4 (1) of the Working
                Time Regulations 1998 shall not apply;

        (d)     shall well and faithfully serve the Company (and any Associated
                Company if directed to do so by the Board) and use his best
                endeavours to promote and protect the interests of the Company
                and any Associated Company;

        (e)     undertakes not to harm the reputation of the Company or any
                Associated Company; and

        (f)     shall, when requested to do so, fully and promptly give the
                Board such explanations, information and assistance as it may
                require relating to the transactions and affairs of the Company
                (and any Associated Company) of which the Executive shall have
                knowledge or of which the Executive ought to have knowledge.

4.      PLACE OF EMPLOYMENT

        The Executive's place of employment shall be at the offices of the
        Company at 21 Warple Way, London, W3, 0RQ, London, UK, or at any new
        location, as agreed to by the Executive and the Chief Executive Officer.
        In addition, the Executive shall travel to such parts of the world as
        the Board may direct or authorise. If the Company requires the Executive
        to work outside the United Kingdom for a period of more than one month
        it will provide him with written details of any terms and conditions
        which may apply to that work and his return to the United Kingdom.

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5.      REMUNERATION AND BENEFITS

5.1

        (a)     The Executive shall be paid a basic salary at the pounds
                sterling equivalent of US$250,000 per annum, or at such other
                rate as may be agreed in writing for the proper performance of
                his duties. This salary shall accrue from day to day and shall
                be payable once a month.

        (b)     The salary shall be reviewed by the Board on or with effect from
                1st January 2001 and thereafter not less than once in each
                calendar year. The Executive's salary shall not be less than
                that payable immediately before each such review.

        (c)     The Executive will also be entitled to participate in the
                Company's bonus scheme. Bonuses will be awarded at the rate of
                4% for the first US$4 million of revenue and 8% for revenues in
                excess of US$4 million. Revenue is all revenue (excluding
                maintenance) recognized for Europe, Middle East, and Africa and
                the bonus will be paid quarterly

        (d)     Subject to the Executive continuing to hold a valid UK driving
                licence, the Executive shall receive a monthly car allowance of
                the pounds sterling equivalent of US$1,000.

5.2     The Executive shall also receive the following benefits:

        (a)     the Executive shall be entitled to be a member of such medical
                expenses scheme as the Company may make available from time to
                time provided the Executive meets the normal underwriting
                requirements of that scheme and is accepted at normal rates of
                premium;

        (b)     the Executive shall be entitled to the benefit of life insurance
                cover of US$2 million provided the Executive satisfies a medical
                examination and is accepted at normal rates of premium;

        (c)     the Executive shall be entitled to be a member of the Company's
                disability insurance scheme provided the Executive meets the
                normal underwriting requirements of the scheme and is accepted
                at normal rates of premium.

        Details of these benefits may be obtained from the Executive's manager.

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6.      SIGNING BONUS

6.1     The Executive will receive a signing bonus of the pounds sterling
        equivalent of US$250,000, 50 per cent of which will be payable on the
        Effective Date and the remainder payable on a date being six months
        following the Effective Date.

6.2     The signing bonus will be repayable to the Company if the Executive's
        employment, of his own choosing (other than in circumstances where he is
        entitled to treat himself as having been constructively dismissed), is
        terminated within twelve months of the Effective Date.

7.      CHANGE OF CONTROL/TERMINATION WITHOUT CAUSE

        If the Company undergoes a change in control and the Executive is
        terminated not for cause or voluntarily terminates for good reason a
        severance payment of the pounds sterling equivalent of US$400,000 will
        be paid in 28 days. Change of control occurs in the event of a merger of
        the Company with or into another corporation in which the holders of at
        least 50% of the Company's outstanding voting power hold less than 50%
        of the outstanding voting power immediately after such merger, or the
        sale of substantially all of the assets of the Company (collectively, a
        "Change of Control"). As used herein, "Good Reason" shall mean the
        following (unless such event(s) applies generally to all senior
        management of the Company):

                (A) without the Executive's express written consent, the
        assignment to the Executive of any duties or the reduction of the
        Executive's duties, either of which results in a significant diminution
        in the Executive's position or responsibilities with the Company in
        effect immediately prior to the Change of Control, or the removal of the
        Executive from such position and responsibilities;

                (B) without the Executive's express written consent, a
        substantial reduction, without good business reasons, of the facilities
        and perquisites (includes office space and location) available to the
        Executive immediately prior to such reduction;

                (C) a material reduction by the Company in the base salary or
        bonus opportunity of the Executive as in effect immediately prior to
        such reduction;

                (D) a material reduction by the Company in the kind or level of
        Executive benefits to which the Executive is entitled immediately prior
        to such reduction with the result that the Executive's overall benefits
        package is significantly reduced;

                (E) the relocation of the Executive to a facility or a location
        more than 50 miles from the Executive's then present location, without
        the Executive's express written consent; or

                (F) any purported termination of the Executive's employment by
        the Company which is not effected for death, disability or for Cause, or
        any purported termination for which the grounds relied upon are not
        valid.

7.1     If the employee is terminated without cause the Company will pay to the
        Executive a severance payment equal to one year's salary together with a
        further amounts by way of a mutually agreeable, reasonable compensation
        for loss of the Executives other contractual benefits (including bonus
        and insurance).

8.      EXPENSES

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8.1     The Executive shall be reimbursed all reasonable hotel, travelling,
        entertainment and other expenses properly incurred by him in the course
        of the Employment in accordance with the Company's regulations from time
        to time. If required by the Board, the Executive shall produce receipts
        for such expenses acceptable to the Company.

8.2     Any credit card supplied to the Executive by the Company shall be used
        only for expenses incurred by him in the course of the Employment and in
        accordance with the Company's regulations.

9.      PENSION

9.1     The Executive is not eligible for membership of any occupational pension
        scheme.

9.1     A contracting-out certificate is not in force in respect of the
        Executive's employment.

9.2     Subject to any applicable Inland Revenue requirements and overriding
        legislation, the Company shall contribute to such personal pension
        arrangement as the Executive nominates and the Company approves (such
        approval not to be unreasonably withheld) at the rate of 8% of the basic
        salary paid quarterly to the Executive under sub-clause 5.1(a).

10.     HOLIDAYS

10.1    The Executive shall in addition to normal statutory and bank holidays be
        entitled to 5 weeks' (25 working days') paid holiday during each year
        commencing on 1st January and pro rata for any shorter period. The
        Company shall endeavour to meet the Executive's reasonable requests as
        to time and duration of holidays but it reserves the right to arrange
        holidays in its interest. The Executive's entitlement to holidays and to
        holiday pay shall be subject to the rules of the Company from time to
        time in force relating to holiday entitlement and holiday pay.

10.2    The Company's current holiday rules are set out in Schedule 1.

11.     SICKNESS OR INJURY

        Payment

11.1    If, in the opinion of the Board, the Executive is unable to perform his
        duties properly for a period, or periods, not exceeding six months
        (whether or not any days not worked are normal working days) in the
        aggregate in any period of twelve months ("the Aggregate Period") by
        reason of illness (including mental illness), accident or any other
        cause beyond the control of the Executive, then he shall be entitled
        during that time to receive his full remuneration. Thereafter any
        payment shall be subject to, and in accordance with, the terms of the
        Company's disability insurance scheme.

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        Procedures

11.2    If the Executive is prevented by any of the factors mentioned in
        sub-clause 11.1 from performing his duties properly he shall report this
        fact promptly to the Company's personnel department by telephone on the
        first morning of absence or as soon as reasonably practical thereafter.
        If the Executive is absent for more than three consecutive working days
        he must complete a self-certification sickness form on his return and
        deliver it to the personnel department. If the absence continues for
        five or more working days he shall provide an appropriate medical
        certificate from his doctor in the manner required by the rules of the
        Company. Thereafter the Executive should submit a further appropriate
        medical certificate at weekly intervals during the whole period of
        absence.

11.3    Payment of any remuneration to the Executive under sub-clause 11.1 is
        conditional upon the prompt compliance by the Executive of his
        obligations under sub-clauses 11.2 and 11.5 as well as with any other
        rules of the Company from time to time in force relating to sickness or
        injury.

        SSP

11.4    Statutory sick pay ("SSP") will be paid by the Company in accordance
        with the legislation in force at the time of absence. Any payment of
        remuneration under sub-clause 11.1 for a day of absence will discharge
        its obligation to pay SSP for that day.

        Medical Examination

11.5    The Company may at any time require the Executive to be medically
        examined at its expense by a medical practitioner nominated by it and
        for a report of that examination to be provided to the Board.

        Termination

11.6    If, in the opinion of the Board, the Executive is or has been unable to
        perform his duties properly for a period or periods exceeding the
        Aggregate Period or if the Board at any time has reason to believe that
        because of any such cause the Executive may be unable properly to
        perform his duties for a continuous period of six months or more, the
        Company shall be entitled at any time to give to the Executive not fewer
        than six months' notice of termination of the Employment less the
        aggregate of any periods during which he has been paid salary under
        sub-clause 11.1 during the twelve months prior to the giving of such
        notice provided always that the Company may not terminate the Employment
        pursuant to this sub-clause 11.6 if the Executive is in receipt of, or
        entitled to, benefit under the terms of the Company's disability
        insurance scheme unless the Company shall first arrange for benefits not
        less favourable to the Executive than the net benefits payable under the
        Company's disability insurance scheme to be paid by the insurer to the
        Executive.

12.     OUTSIDE INTERESTS

        During the Employment the Executive shall not (save with the prior
        written consent of the Board):

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        (a)     directly or indirectly be engaged, concerned or interested in
                any capacity in any business, trade or occupation other than
                that of the Company except as a holder of not more than five per
                cent. of the issued shares or securities of any companies which
                are listed or dealt in on any recognised stock exchange or
                market. For this purpose "occupation" shall include any public,
                private, or charitable work which the Board considers may hinder
                or interfere with the performance of the Executive's duties; or

        (b)     introduce to any other person, firm or company other than any
                Associated Company, or transact for the account of himself or
                any other person, firm or company other than any Associated
                Company, business of any kind with which the Company is able to
                deal.

13.     CONFIDENTIAL INFORMATION AND TRADE SECRETS

13.1    The Executive acknowledges that in the ordinary course of the Employment
        he will be exposed to information about the Company's business and that
        of any Associated Company and that of its or their suppliers and
        customers which amounts to a trade secret, is confidential or is
        commercially sensitive and which may not be readily available to others
        engaged in a similar business to that of the Company or any Associated
        Company or to the general public and which if disclosed may cause harm
        to the Company's business or that of any Associated Company.

13.2    The Executive shall keep secret and shall not at any time either during
        the Employment, or after its termination, for whatever reason, use,
        communicate or reveal to any person for the Executive's own or another's
        benefit, any secret or confidential information concerning the business,
        finances or organisation of the Company or any Associated Company, its
        or their systems, techniques or know-how or its or their suppliers or
        customers which shall have come to his knowledge during the course of
        the Employment. The Executive shall also use his best endeavours to
        prevent the publication, disclosure or use of any such information.

13.3    For the purposes of this clause and by way of illustration and not
        limitation information will prima facie be secret and confidential if it
        is not in the public domain and relates to:

        (a)     raw materials;

        (b)     research and developments;

        (c)     formulae, formulations;

        (d)     methods of treatment, processing, manufacture or production,
                process and production controls including quality controls;

        (e)     suppliers and their production and delivery capabilities;

        (f)     customers and details of their particular requirements;

        (g)     costings, profit margins, discounts, rebates and other financial
                information;

        (h)     marketing strategies and tactics;

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        (i)     current activities and current and future plans relating to all
                or any of development, production or sales including the timing
                of all or any such matters;

        (j)     the development of new products;

        (k)     production or design secrets; or

        (l)     technical design or specification of the Company's or any
                Associated Company's products;

        (m)     pricing, credit policies, credit procedures, payment policies,
                payment procedures and systems for the same whether of the
                Company or any Associated Company or of any client customer or
                supplier of the Company or any Associated Company.

13.4    The restrictions contained in this clause shall not apply to:

        (a)     any disclosure or use authorised by the Board or required in the
                ordinary and proper course of the Employment or as required by a
                court or tribunal of competent jurisdiction or as required by an
                appropriate regulatory authority; or

        (b)     any information which the Executive can demonstrate was known to
                the Executive prior to the commencement of his employment by the
                Company or is in the public domain otherwise than as a result of
                a breach of this clause or breach of an equivalent provision by
                any other employee of the Company.

14.     INTELLECTUAL PROPERTY

14.1    For the purposes of this clause, the following terms shall have the
        following meanings:

        "INTELLECTUAL PROPERTY" means patents, trade marks, service marks,
        registered designs, in each case whether registered or unregistered
        including any applications for any of the foregoing, trade and business
        names, copyright, goodwill, rights in designs, databases, inventions,
        confidential information, know-how, rights under licences, consents,
        orders, statute or otherwise howsoever in relation to any such rights
        and rights of the same or similar effect or nature arising or subsisting
        in any part of the world.

        "ORIGINATE" means (without prejudice to the generality of the word)
        originate, compose, write, invent, create, generate, discover, design,
        develop, manufacture or participate whether solely or with others.

14.2    The Executive agrees and acknowledges that because of the nature of the
        Executive's duties and responsibilities arising from the Employment, the
        Executive is under a special obligation to further the interests of the
        business of the Company. Consequently, any invention made by the
        Executive in the course of the Employment or connected with the
        Employment whether or not made during normal working hours or Originated
        by the Executive shall belong to the Company.

14.3    The Executive assigns to the Company with full title guarantee (by way
        of assignment of all present and future Intellectual Property rights)
        all Intellectual Property rights Originated

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        by the Executive (whether or not during normal working hours) in the
        course of the Employment or connected with the Employment with the
        Company throughout the world for the full term of protection together
        with all extensions, revisions, reversions, revivals and renewals and
        all rights of action related to such Intellectual Property rights
        including the right to institute and maintain proceedings and the right
        to sue for past infringements. The Executive agrees to disclose promptly
        in writing to the Company all details of any such Intellectual Property.

14.4    The Executive waives irrevocably and unconditionally any moral rights in
        any part of the world (including any rights conferred by Section 77-85
        of the Copyright Designs and Patents Act 1988) that the Executive or the
        Executive's successors, personal representatives or heirs have or may
        have against the Company or any of its employees, officers or agents in
        any of the Intellectual Property rights referred to in clause 14.3.

14.5    The Executive agrees, at the Company's request, to exercise during the
        Employment by the Company, or at any time after the termination of the
        Employment, any moral rights the Executive has or may have (pursuant to
        Sections 77-85 of the Copyright Designs and Patents Act 1988 or
        otherwise) in any Intellectual Property rights referred to in clause
        14.3 against any third party in such manner as the Company shall
        reasonably request and in accordance with the Company's directions, and
        the Executive agrees not to exercise such moral rights other than in
        accordance with this paragraph.

14.6    The Executive agrees that the Executive will execute such deeds and
        documents and do such other acts and things as may be necessary or
        desirable in the opinion of the Company to substantiate, protect and/or
        maintain the Intellectual Property rights referred to in clause 14.3
        including to give effect to the terms of this agreement and to vest the
        Intellectual Property rights referred to in clause 14.3 in the Company.
        The Executive acknowledges that, except as provided for by law, no
        further remuneration or compensation other than that provided for under
        this agreement is or may become due to the Executive in respect of the
        performance of the Executive's obligations under this agreement. The
        assignment contained in sub clause 14.3 shall not be affected by reason
        of the termination of the Employment.

14.7    Decisions as to the substantiation, protection and/or maintenance of any
        Intellectual Property rights referred to in clause 14.3 shall be at the
        sole discretion (without obligation) of the Company and the Executive
        agrees that the Executive shall have no claim or other right of action
        against the Company should it decide not to substantiate, protect or
        maintain any of such Intellectual Property rights.

14.8    The Executive appoints the Company to be the Executive's attorney in the
        Executive's name and on the Executive's behalf to execute, sign and do
        all such deeds, instruments or things and generally to use the
        Executive's name for the purposes of giving to the Company or its
        nominees the full benefits of rights conferred under this agreement.

14.9    The Executive undertakes not to make any claim (whether under Section 37
        of the Patents Act 1977 or otherwise howsoever) to be entitled, whether
        in law or equity to any of the inventions included in the Intellectual
        Property rights referred to in clause 14.3 or to any patents or patents
        or similar protection granted in respect of any such inventions.

14.10   The Executive agrees to offer to the Company on arms length terms to be
        agreed with the Company and to give the Company a reasonable opportunity
        to acquire any Intellectual

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        Property rights Originated by the Executive which do not vest in the
        Company under this agreement and, in the absence of agreement, such
        terms shall be determined by an arbitrator appointed by agreement
        between the Company and the Executive (or in the absence of agreement by
        the auditors of the Company) whose costs shall be borne equally by the
        Executive and the Company.

14.11   The Executive warrants, represents and agrees that:

        (a)     the Intellectual Property rights referred to in clause 14.3 are
                or will be original have not been copied wholly or substantially
                and do not and shall not violate or infringe any copyright,
                moral right or any other right of any kind of any person;

        (b)     the Executive is free and entitled to assign to the Company the
                Intellectual Property rights referred to in clause 14.3 hereby
                assigned to the Company and that the Executive is not under any
                disability, restriction or prohibition which would or might
                prevent the Executive from performing or observing any of the
                Executive's obligations under this clause; and

        (c)     the Executive has not entered into and shall not enter into any
                arrangement which conflicts or may conflict with this clause and
                has not assigned granted or licensed to any third party or
                charged or encumbered in any way any rights in the Intellectual
                Property rights referred to in clause 14.3 and is the sole
                absolute unencumbered legal and beneficial owner of the
                Intellectual Property and is and shall be the sole author and
                creator of the Intellectual Property.

14.12   The Executive hereby indemnifies the Company and undertakes to keep the
        Company at all times fully and completely indemnified of, from and
        against all or any actions, proceedings, claims, demands, costs
        (including without prejudice to the generality of this provision legal
        costs of the Company on a full indemnity basis) expenses liability loss,
        awards and damages of any kind howsoever arising which the Company may
        directly or indirectly incur or suffer as a result of or which arise
        directly or indirectly out of any breach or non-performance by the
        Executive of any of the Executive's undertakings, warranties,
        representations or obligations in this clause, express or implied.

15.     DISMISSAL

        Notwithstanding the provisions of clause 2, the Company shall be
        entitled to terminate the Employment summarily by oral or written notice
        and without any payment in lieu of notice (but without prejudice to the
        rights and remedies of the Company for any breach of this agreement and
        to the Executive's continuing obligations under this agreement) in any
        of the following events:

        (a)     if the Executive shall commit any serious or wilful or
                persistent breach or breaches of any express or implied term of
                his employment;

        (b)     if the Board shall have reason to believe that the Executive has
                committed any criminal offence or been guilty of any dishonesty
                or serious misconduct in each case whether during the
                performance of his duties or otherwise which in the opinion of
                the Board renders the Executive unfit to continue as an
                executive of the Company or which would be likely adversely to
                prejudice the reputation or

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                interests of the Company or any Associated Company for which the
                Executive has performed duties during the Employment;

        (c)     if the Executive shall petition for a bankruptcy order or have a
                bankruptcy order made against him or take the benefit of any
                legislation for the relief of insolvent debtors or make any
                composition with his creditors or shall become prohibited by law
                from being a director or taking part in the management of the
                Company whether under the Company Directors Disqualification Act
                1986 or otherwise;

        (d)     if, and without prejudice to the generality of the terms of this
                clause 15, the Executive shall wilfully abuse or misuse the
                computer system of the Company or any Associated Company, or any
                password relating to such computer system or shall gain access
                to any file or load any information or program contrary to the
                interests or procedures of the Company or any Associated
                Company; or

        (e)     if any information relating to the Executive's suitability for
                employment by the Company and provided in the course of applying
                for employment is found to be false or misleading.

        (f)     if the Executive fails or ceases to meet the requirements of any
                regulatory body whose consent is required to enable the
                Executive to undertake all or any of his duties and the
                Employment.

16.     SUSPENSION

        If the Board has reason to suspect that any one or more of the events
        set out in sub-clauses 15(a) to 15(f) (inclusive) has or have occurred
        (or if the circumstances in sub-clause 11.6 appear to exist) the Board
        may suspend the Executive on such terms as to payment of salary and
        other benefits or otherwise as the Board may think fit pending further
        investigations PROVIDED THAT in the event of any such suspension being
        made the Executive shall have the right to terminate his employment
        forthwith by notice in writing to the Company but without any claim for
        compensation.

17.     GRIEVANCE AND DISCIPLINARY PROCEDURE

17.1    If the Executive has any grievance relating to the Employment he should
        raise the matter either with his direct manager or with Ben Barnes
        orally or in writing and the matter will be discussed with the
        Executive. If the matter is not then settled the Executive may submit
        his grievance to the Board which shall as soon as possible consider such
        grievance at a meeting of the Board and will give the Executive a
        written response as soon as practicable thereafter. The decision of the
        Board shall be final.

17.2    Subject to the provisions of sub-clause 11.6 and clause 15 the policy of
        the Company is that an employee is not normally dismissed for a breach
        of his contract of employment which is capable of being remedied until
        after he has been warned that he will be dismissed in the event that
        such breach is not remedied or is repeated. However the Executive
        accepts that in the case of a senior executive of the Company it may not
        always be appropriate to give any warning.

                                      -12-
<PAGE>   15

17.3    A copy of the disciplinary rules and procedures of the Company can be
        obtained from the Executive's manager. They do not form part of the
        Executive's contract of employment.

18.     DUTIES UPON TERMINATION

        Upon termination of the Employment for whatever reason the Executive
        shall immediately:

        (a)     hand over to the Company all documents, books, materials,
                records, correspondence, papers and information (on whatever
                media and wherever located) relating to the business of the
                Company or any Associated Company, any magnetic discs on which
                information relating to the business is stored and any keys,
                credit cards and other property of the Company or any Associated
                Company (including in particular any car provided to the
                Executive) which may be in his possession, custody, care or
                control and shall provide a signed statement that he has
                complied fully with the terms of this clause;

        (b)     irretrievably delete any information relating to the business of
                the Company or any Associated Company stored on any magnetic or
                optical disc or memory and all matter derived therefrom which is
                in his possession, custody, care or control outside the premises
                of the Company and shall produce such evidence of compliance
                with this sub-clause as the Company may require;

        (c)     resign any office or appointment held by him in the Company or
                in any Associated Company without any claim for compensation or
                damages for loss of such office or appointment and the Executive
                hereby irrevocably appoints the Company as his agent to execute
                letters of resignation of such offices or appointments on his
                behalf; and

        (d)     transfer to the Company or as it may direct all shares held by
                him in any company as nominee or trustee for the Company and
                deliver to the Company the certificates therefor and the
                Executive hereby irrevocably appoints the Company his attorney
                to execute any such transfers on his behalf.

19.     RESTRICTIONS

        Definitions

19.1    For the purposes of this clause the following words have the following
        meanings:

        "CUSTOMER" means any customer or client of the Company in connection
        with the Restricted Business or any other person, firm or company to
        whom the Company has presented to or approached or with whom the Company
        has negotiated with a view to that person becoming a customer or client
        of the Company in connection with the Restricted Business and who became
        a customer within three months following the Termination Date and in
        each case provided that during the twelve month period immediately prior
        to the Termination Date the Executive has dealt or sought to deal on
        behalf of the Company with that customer or client or person, firm or
        company or the Executive has been responsible during such period for the
        account of or for managing the business relationship with that customer
        or client or person firm or company;

                                      -13-
<PAGE>   16

        "DESIGNATED AREA" means the areas in Europe in which the Company carries
        out the Restricted Business;

        "RESTRICTED BUSINESS" means the design, manufacture, production,
        research or development, customisation, marketing or sale of business
        intelligence (data warehousing, data marts, data mining, OLAP) products
        or services but limited to goods, products or services of a kind with
        which the Executive was concerned or involved in the course of this
        employment during the twelve month period immediately prior to the
        Executive ceasing to be employed or for which the Executive has been
        responsible during such period;

        "RESTRICTED PERSON" means any person who has at any time in the period
        of six months prior to the Termination Date been employed by the Company
        or who is a consultant to the Company and in either case works in a
        senior executive or a senior technical or senior advisory capacity in
        the Restricted Business and who was known to or worked with the
        Executive during that period;

        Executive's Duties and Obligations

19.2    The Executive acknowledges that:

        (a)     his primary duty under this agreement is to manage the sales,
                consulting, professional services and technical support
                organizations throughout Europe, the Middle East and Africa;

        (b)     the information gained by him in the performance of his duties
                is not or may not be known by the general public or by the
                majority of those engaged in the business of business
                intelligence;

        (c)     by virtue of his employment under this agreement he will obtain
                confidential information as to the business, operations and
                organisation of the Company including names of customers and
                their operations which belong exclusively to, and is of
                substantial value to the Company;

        and that accordingly he agrees to be bound by this clause 19 in order to
        protect the legitimate interests of the Company.

        Non-solicitation of Customers

19.3    The Executive shall not for a period of twelve months after the
        Termination Date either personally or by an agent and either on his own
        account or for or in association with any other person directly or
        indirectly canvass, solicit, approach or seek out or cause to be
        canvassed, solicited, approached or sought out any Customer for orders
        or instructions in respect of any goods or services provided or supplied
        by the Company or substantially similar to such goods or services in
        connection with the Restricted Business.

        Non-dealing with Customers

19.4    The Executive shall not for a period of six months after the Termination
        Date either personally or by an agent and either on his own account or
        by or in association with any

                                      -14-
<PAGE>   17

        other person or otherwise directly or indirectly engage in the
        Restricted Business with any Customer.

                                      -15-
<PAGE>   18

        Non-solicitation of Employees

19.5    The Executive shall not during his employment or for a period of twelve
        months after the Termination Date either personally or by an agent and
        either on his own account or for or in association with any other person
        directly or indirectly solicit or endeavour to entice away from the
        Company any Restricted Person or induce any Restricted Person to breach
        their contract of employment or encourage a Restricted Person to resign.

        Non-interference with Supplies

19.6    The Executive shall not for a period of twelve months after the
        Termination Date either personally or by an agent and either on his own
        account or for or in association with any other person directly or
        indirectly interfere or seek to interfere or take such steps as may be
        likely to interfere with the continuance of supplies to the Company in
        respect of the Restricted Business (or the terms relating to such
        supplies) from any supplier or seek to damage the relationship between
        any supplier and the Company who has supplied goods or services to the
        Company in the twelve month period immediately prior to the Executive
        ceasing to be employed by the Company.

        Non-competition within a Designated Area

19.7    The Executive shall not for the period of six months after the
        Termination Date whether directly or indirectly:

        (a)     take up or hold any office in connection with any business which
                is engaged or is intended to be engaged in the Restricted
                Business within the Designated Area;

        (b)     take up or hold any post or position which enables or permits
                the Executive to exercise whether personally or by an agent and
                whether on his own account or in association with or for the
                benefit of any other person either a controlling influence over
                any business which is engaged or is intended to be engaged in
                the Restricted Business within the Designated Area; or

        (c)     take up or hold any employment or consultancy in connection with
                any business which is engaged or is intended to be engaged in
                the Restricted Business within the Designated Area,

        which would have the necessary or probable result of the Executive being
        engaged within the Designated Area in business activities which are the
        same or similar to the Restricted Business.

        Application of Covenants to Associated Companies

19.8

        (a)     The provisions of sub-clauses 19.2 to 19.7 inclusive shall apply
                equally where, during the period of twelve (12) months prior to
                the Termination Date, the Executive was engaged in or
                responsible for the business of any Associated Company (each of
                which Associated Company is hereinafter called "Relevant
                Company").

                                      -16-
<PAGE>   19

        (b)     In addition to the covenants given by him in sub-clauses 19.2 to
                19.7 above the Executive hereby covenants with the Company
                (which for the purposes of this paragraph shall act as trustee
                for each Relevant Company) in relation to each of the
                sub-clauses 19.2 to 19.7 inclusive as if every reference therein
                to the Company was a reference to the Relevant Company and the
                definitions of "Customer", "Designated Area" and "Restricted
                Business" and "Restricted Person" in sub-clause 19.1 apply with
                the substitution of "the Relevant Company" for the Company.

19.9    The Executive undertakes with the Company that he will observe any
        substitute restrictions (in place of those set out in sub-clauses 19.2
        to 19.8 above) as the Company may from time to time specify in writing
        which are in all respects less restrictive in extent than those
        specified in sub-clause 19.3 to 19.8 above.

19.10   If any breach or violation of any of the terms of sub-clauses 19.3 to
        19.8 inclusive occurs, the Executive and the Company agree that damages
        alone might not compensate for such breach or violation and that in
        those circumstances injunctive relief would be reasonable and essential
        to safeguard the interests of the Company and that an injunction in
        addition to any other remedy may accordingly be obtained by the Company.
        No waiver of any such breach or violation shall be implied by the fact
        that the Company for the time being and for whatever reason takes no
        action in respect of such breach or violation.

19.11   The Executive fully understands the meaning and effect of the covenants
        given by him at sub-clauses 19.2 to 19.8 and confirms that on taking
        separate and independent legal advice on the terms of this agreement he
        acknowledges and accepts that such sub-clauses are fair and reasonable
        in all the circumstances at the time this agreement was made.

20.     RESTRICTIVE TRADE PRACTICES ACT

        Unless this agreement or any agreement or arrangement of which this
        agreement forms part is a non-notifiable agreement for the purposes of
        section 27A of the Restrictive Trade Practices Act 1976, if there is a
        provision of this agreement, or of any such agreement or arrangement,
        which causes or would cause this agreement or any such agreement or
        arrangement to be subject to registration under the Restrictive Trade
        Practices Act 1976, that provision shall not take effect until the date
        after particulars of this agreement (or of that agreement or
        arrangement, as the case may be) have been furnished to the Director
        General of Fair Trading pursuant to section 24 of the Restrictive Trade
        Practices Act 1976.

                                      -17-
<PAGE>   20

21.     DATA PROTECTION

21.1    The Executive agrees that personal data (other than sensitive personal
        data) relating to him/her and to his/her employment with the Company may
        to the extent that it is reasonably necessary in connection with his/her
        employment or the business of the Company:

        (a)     be collected and held (in hard copy and computer readable form)
                and processed by the Company; and

        (b)     be disclosed or transferred to other employees of the Company or
                any other Associated Company and their employees; any other
                persons as may be reasonably necessary; and as otherwise
                required or permitted by law.

21.2    The Executive agrees that the Company may process sensitive personal
        data relating to him/her, including medical details and details of
        gender, race and ethnic origin. Personal data relating to gender, race
        and ethnic origin will be processed by the Company only for the purpose
        of monitoring the Company's equal opportunity policy with a view to
        enabling equal opportunity to be promoted and maintained. The Executive
        agrees that the Company may disclose or transfer such sensitive personal
        data to other persons if it is required or permitted by law to do so or,
        in the case of personal data relating to gender, race or ethnic origin,
        for the purpose of monitoring, or enabling the monitoring of, the
        Company's equal opportunity policy.

21.3    The Executive consents to transfer and disclosure of personal data as
        set out above shall apply regardless of the country of residence of the
        person to whom the data is to be transferred. Where the disclosure or
        transfer is to a person resident outside the European Economic Area, the
        Company shall take reasonable steps to ensure that his/her rights and
        freedoms in relation to the processing of the relevant personal data are
        adequately protected.

21.4    Except in relation to the conduct of activities to which the Executive
        is giving his/her consent to the extent set out above, this does not
        affect any rights which he/she has in law in relation to the collection,
        processing or transfer of personal data relating to him/her.

22.     NOTICES

22.1    Any notice or other written communication given under or in connection
        with this agreement may be delivered personally or sent by first class
        post (airmail if overseas) or by telex or facsimile.

22.2    The address for service of the Company shall be its registered office
        marked for the attention of the managing director and in the case of the
        Executive shall be his address stated in this agreement or if any other
        permanent address has previously been notified to the Company to the
        address so notified.

22.3    Any notice or other written communication shall be deemed to have been
        served:

        (a)     if delivered personally, at the time of delivery;

                                      -18-
<PAGE>   21

        (b)     if posted, at the expiry of two Business Days or in the case of
                airmail four Business Days after it was posted;

        (c)     if sent by telex or facsimile message, at the time of
                transmission (if sent during normal business hours, that is
                09.30 to 17.30 local time) in the place from which it was sent
                or (if not sent during such normal business hours) at the
                beginning of the next Business Day in the place from which it
                was sent.

22.4    In proving service it shall be sufficient to prove that personal
        delivery was made, or that such notice or other written communication
        was properly addressed stamped and posted or in the case of a telex that
        the intended recipient's answerback code is shown on the copy retained
        by the sender at the beginning and end of the message or in the case of
        a facsimile message that an activity or other report from the sender's
        facsimile machine can be produced in respect of the notice or other
        written communication showing the recipient's facsimile number and the
        number of pages transmitted.

23.     MISCELLANEOUS

23.1    The Executive consents to the deduction from any sum otherwise payable
        to the Executive by reason of the Employment (or its termination) the
        value of any claim of whatever nature and in whatever capacity that the
        Company may bona fide have against the Executive, including but not
        limited to:

        (a)     overpayment of wages;

        (b)     overpayment in respect of expenses incurred by the Executive in
                carrying out his duties;

        (c)     loans which the Company may from time to time make to the
                Executive;

        (d)     advances on wages which the Company may from time to time make
                to the Executive.

23.2    Save as expressly provided in this agreement no term or provision of
        this agreement shall be varied or modified by any prior or subsequent
        statement, conduct or act of any party. The Company and the Executive
        may amend this agreement only by letter or written instrument signed by
        both the Company and the Executive.

23.3    The headings to the clauses and any underlining in this agreement and in
        the schedules are for ease of reference only and shall not form any part
        of this agreement for the purposes of construction.

23.4    This agreement sets out the entire agreement and understanding between
        the parties in connection with the Employment save only for any terms
        implied by law. There are no collective agreements which directly affect
        the terms and conditions of the Employment.

23.5    If at any time any term or provision in this agreement shall be held to
        be illegal, invalid or unenforceable, in whole or in part, under any
        rule of law or enactment, such term or provision or part shall to that
        extent be deemed not to form part of this agreement, but the
        enforceability of the remainder of this agreement shall not be affected.

                                      -19-
<PAGE>   22

24.     LAW AND JURISDICTION

24.1    This agreement shall be governed by and construed in accordance with
        English law and each party to this agreement submits to the
        non-exclusive jurisdiction of the English courts.

24.2    The Executive irrevocably agrees that the courts and tribunals of
        England shall have jurisdiction to settle any dispute which may arise
        out of or in connection with this agreement and that accordingly any
        suit, action or proceedings arising out of this agreement (together in
        this clause referred to as "Proceedings") may be brought in such courts
        and tribunals.

24.3    The Executive irrevocably waives any objection which he may have now or
        hereafter to the laying of the venue of any Proceedings in any such
        courts and tribunals as are referred to in sub-clause 24.2 and any claim
        that any such Proceedings have been brought in an inconvenient forum and
        further irrevocably agree that a judgment in any Proceedings brought in
        the English courts shall be conclusive and binding upon the Executive
        and may be enforced in the courts of any other jurisdiction. The
        Executive hereby expressly waives all rights of jurisdiction in any
        Proceedings which he may have now or hereafter by reason of his present
        domicile or by reason of any subsequent or other domicile.

24.4    Nothing contained in this clause shall limit the right of the Company to
        take Proceedings against the Executive in any other court of competent
        jurisdiction, nor shall the taking of Proceedings in one or more
        jurisdictions preclude the taking of Proceedings in any other
        jurisdiction, whether concurrently or not.

24.5    The Executive hereby consents generally in respect of any Proceedings
        arising out of or in connection with this agreement to the giving of any
        relief or the issue of any process in connection with such execution
        against any property or assets whatsoever or any order or judgment which
        may be made or given in such proceedings.

24.6    The Executive irrevocably agrees that any writ, judgment or other notice
        of process shall be sufficiently and effectively served on him if
        delivered, in connection with Proceedings in England, to 21 Warple Way,
        London, W3, 0RQ, London, UK.

                                      -20-
<PAGE>   23

                                   SCHEDULE 1

                                  HOLIDAY RULES

1.      Holiday accrual starts on the first day of employment. The employee will
        accrue 25 days of time off per year. The holiday year is from January 1
        to December 31, 160 hours' holiday in any holiday year may be carried
        forward into the next year at the Company's discretion.

2.      The time at which annual holidays may be taken is at the discretion of
        the Company, but not more than 2 weeks may be taken at any one time.

3.      On termination of the Employment the Executive shall be entitled to
        receive a payment representing holiday accrued and as yet untaken on a
        pro rata basis for the number of completed calendar months he has worked
        during the current holiday year. Such payment shall be calculated at a
        rate of 1/260 of annual basic salary payable to the Executive pursuant
        to sub-clause 5.1(a) from time to time per day of accrued and untaken
        holiday.

4.      If at the Termination Date the Executive has taken holidays in excess of
        his accrued entitlement he will be required to refund to the Company a
        sum representing such unearned holiday. Such sum shall be calculated at
        a rate of 1/260 of annual basic salary payable to the Executive pursuant
        to sub-clause 5.1(a) from time to time per day of unearned holiday
        taken.

Executed and delivered as a deed on the day and in the year first written above.

The parties to this agreement have signed and entered into this agreement on the
day and year first written above

EXECUTED by                 )
acting by                   )
                                    Director

                                    Director/Secretary

SIGNED by                   )
in the presence of:         )

                                      -21-<PAGE>   1

                                                                   EXHIBIT 10.37

                                    AGREEMENT

        This Agreement is made by and between Network Associates, Inc. (the
"Company"), and you, Zachary Nelson, as of January 1, 2001 (the "Effective
Date").

        1. Duties and Scope of Employment.

               (a) CEO of MyCIO.com. As of the Effective Date, you will continue
to serve as Chief Executive Officer and President of MyCIO.com, Chief Strategy
Officer or in such other senior executive positions with the Company or any of
its affiliated entities as you and the Company may mutually agree upon after the
Effective Date. You will render such business and professional services in the
performance of your duties, consistent with your position within the Company, as
shall reasonably be assigned to you by the Board of Directors of the Company
and/or the Chief Executive Officer of the Company (the "Board or CEO"). You will
devote your full business efforts and time to the Company and such of its
subsidiaries as the Board or CEO may designate.

               (b) Special Advisor. On or before December 31, 2001, (i) you may
elect to voluntarily resign from your position(s) described in Section 1(a) or
(ii) the Company may remove you from such positions, and from the date of such
resignation or removal (the "Transition Date") through the one (1) year
anniversary of the Transition Date (the "End Date"), you will serve as a Special
Advisor to the Company, with your salary and bonus compensation as described in
Section 6 (a) hereof. As of the Transition Date, if any, you will resign as
President and Chief Executive Officer of MyCIO.com or from such other executive
positions you accepted as described in Section 1(a) and, although you will
remain an employee of the Company through the End Date in your role as Special
Advisor, you will relinquish all other officer and director positions with the
Company and its affiliates. As a Special Advisor, you will render such business
and professional services in the performance of your duties, consistent with
your position within the Company, as shall reasonably be agreed upon by you and
the Board or CEO. As a Special Advisor, you will no longer be considered an
officer for purposes of Section 16 of the Securities Act of 1934, as amended.
Additionally, you will no longer be subject to the insider trading policies of
the Company or its affiliated entities and shall not be subject to any
pre-clearance requirements or trading windows for the purchase or sale of the
stock of the Company or its affiliated entities.

                      (i) After the Transition Date, you may, subject to
Sections 10, 11, and 12, engage in any other employment or consulting activities
for any other entity or person whatsoever. In the event you obtain alternative
employment with an employer other than the Company or any of its affiliates at
any time prior to the End Date, your role with the Company shall either be
governed by this Agreement, or, if mutually agreed upon in writing between you
and the Company, by terms which may include, among other things, your change in
status from an employee to consultant. Absent Cause for terminating your
employment (as defined in Section 6), and subject to your continued compliance
with the terms of this Agreement, the Company agrees to use its best faith

<PAGE>   2

efforts to ensure that you will continue to be an employee, or to otherwise
provide consulting or advisory services to the Company, through the End Date.

               (c) Employment Term. The period of your employment under this
Agreement (including, if applicable, as a Special Advisor) is referred to herein
as the "Employment Term."

        2. At-Will Employment. Your employment with the Company constitutes
"at-will" employment. You and the Company acknowledge 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 you or the Company.

        3. Employee Benefits and Office.

               (a) Employee Benefits. During the Employment Term, you will be
eligible to participate in accordance with the terms of all Company employee
benefit plans that are applicable to other employees of the Company, as such
plans and terms may exist from time to time, provided you are determined to be
an employee of the Company according to the terms of such plans. However, in the
event you transition into the role of Special Advisor, you will not accrue any
additional vacation under Company's vacation policy after the Transition Date
and you shall not be permitted to participate in the Company's 401(k) plan. In
the event you are determined to be ineligible as a Special Advisor to
participate in the Company's employee benefit plans and subject to compliance
with Sections 5, 10, 11, 12 and 15 and Exhibit A, the Company shall provide you
with the same level of Company subsidized health (i.e., medical, vision and
dental) coverage and executive benefits as in effect for you on the day of such
determination through the End Date. If you transition into the role of Special
Advisor, then the Company will timely pay all accrued and unused vacation earned
through the Transition Date, subject to standard payroll deductions and
withholdings.

        4. Compensation.

               (a) Base Salary. During the Employment Term, the Company will pay
you as compensation for your services an annual salary of $300,012 (the "Base
Salary"). The Base Salary will be paid through payroll periods that are
consistent with the Company's normal payroll practices. Your Base Salary will be
subject to review and adjustments will be made based upon the Company's normal
performance review practices.

               (b) Bonus. You will be eligible for a target bonus of $200,000 in
2001, based upon achieving performance targets to be determined by the Board or
CEO. The bonus shall be paid within a reasonable period after each Company
fiscal quarter in accordance with past practices assuming that you are in
compliance with all of your obligations under this Agreement, including (without
limitation) Sections 5, 10, 11, 12 and 15.

               (c) Stock Options. During the Employment Term, your outstanding
and unexercised stock options to purchase common stock of the Company or any of
its affiliated entities will continue to be subject to the terms and conditions
of the stock option plans and the applicable stock option agreements by and
between you and the Company (or its related applicable entity). During the
Employment Term, accelerated vesting of your stock options will continue to be
in effect in the event of a "Change of Control" (as defined in the Change of
Control Agreement) subject to the

                                                                             -2-
<PAGE>   3

terms and conditions of the Employment Agreement entered into between you and
the Company on May 11, 1999 (the "Change of Control Agreement"), as amended
hereby as further described in Section 13. With respect to your McAfee.com stock
options, without making any representations or warranties, it is the Company's
understanding that during the Employment Term such stock options will continue
to vest according to their terms and that the post-termination exercisability
period will not begin while you are employed by the Company under this Agreement
or otherwise providing consulting or advisory services to the Company.

               (d) Indemnification and D&O Insurance. The parties agree that you
will continue to be covered by the terms and conditions of the Indemnity
Agreement entered into between you and McAfee Associates on March 20, 1997 (the
"Indemnity Agreement") and that the parties' rights and obligations thereunder
are unaffected by this Agreement.

        5. Settlement Agreement and Release. In the event you transition to a
role as Special Advisor, then, on the Transition Date, you will sign and deliver
to the Company a Settlement Agreement and Release in the form attached as
Exhibit A. Execution of the Settlement Agreement and Release shall be a
precondition to payment of the severance benefits pursuant to Section 6 or
pursuant to Section 5 of the Change of Control Agreement.

        6. Severance.

               (a) Termination other than for Cause. If prior to December 31,
2001, the Company terminates your employment for any reason other than Cause or
you resign from your employment as described in the last sentence of Section
6(c), then, subject to your signing the release set forth as Exhibit A and your
continued compliance with Sections 5, 10, 11, 12 and 15 and the release set
forth as Exhibit A, then (i) you will receive (y) for one (1) year following
your termination or resignation, or, (x) if you are serving as Special Advisor
on the date of such termination or resignation, through the End Date (said one
year period in the event of either (y) or (x) being herein referred to as the
"Severance Period"), with respect to your Base Salary, $300,012 or your then
current base salary, whichever is greater, and with respect to your bonus,
$200,000 or your then current target bonus, whichever is greater, with payments
on the same dates such payments would have otherwise been made had you remained
employed through the Severance Period; (ii) your stock options to purchase
common stock of the Company or any of its affiliated entities shall immediately
vest as to the number of shares subject to such options that would have
otherwise vested during the Severance Period as if you had remained employed
throughout the entire Severance Period and you shall have ninety (90) days
following the Severance Period to exercise your right to purchase any or all of
your vested but unexercised option shares; (iii) you shall continue to be
covered under the accelerated vesting provisions of the Change of Control
Agreement through the Severance Period, ignoring the requirement that you remain
a Company employee; and (iv) you will receive the same level of Company
subsidized health (i.e., medical, vision and dental) coverage and executive
benefits as in effect for you on the day of your termination through the
Severance Period. You will not receive any other compensation or benefits from
the Company except as may be required by law in accordance with established
Company plans and policies.

               (b) Voluntary Termination or Termination for Cause. If, prior to
December 31, 2001, you voluntarily terminate your employment with the Company
for a reason other than as described in the last sentence of Section 6(c) or the
Company terminates your

                                                                             -3-
<PAGE>   4

employment for Cause, or upon termination of your employment for any reason on
or after January 1, 2002, then you shall not receive any compensation, benefits
or other compensation pursuant to Section 6 (a).

               (c) Definition of Cause. Termination of your employment for
"Cause" means termination due to your willful misconduct or gross negligence
which is materially injurious to the Company and its affiliated entities taken
as a whole and/or your failure to satisfy any of your obligations under this
Agreement, including (but not limited to) your obligations under Sections 5, 10,
11, 12 and 15 and, if applicable, Exhibit A; provided, however, that the
determination that you have failed to satisfy your obligations under this
Agreement must be made in good faith by the Board and you will be given written
notice by the Board detailing the specific facts of such breach, and a
reasonable opportunity (of least thirty (30) days) to cure same. You will also
receive the above-described severance if you resign from your employment as a
result of (i) a material reduction in your compensation or benefits, (ii) the
movement of your primary work location to a place more than twenty-five (25)
miles from your work location at the time this Agreement is executed without
your written consent and if you are not serving in the role of Special Advisor
as of such date, or (iii) if there is a change, without your written consent,
such that you no longer directly report to the Board or CEO.

               (d) Removal of Files. Following your termination of employment,
you may remove your personal files from the Company's premises. Any file
containing "Employment Information" or "Confidential Information" (both as
defined in Section 10) may not be removed from the Company's premises without
the written consent of the Board or CEO.

        (e) Excise Tax. If any payment or benefit you would receive pursuant to
a Change in Control from the Company or otherwise ("Payment") would (i)
constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then such Payment shall be reduced to the Reduced Amount. The
"Reduced Amount" shall be either (x) the largest portion of the Payment that
would result in no portion of the Payment being subject to the Excise Tax or (y)
the largest portion, up to and including the total, of the Payment, whichever
amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in your receipt, on an after-tax basis, of
the greater amount of the Payment notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax. If a reduction in payments or
benefits constituting "parachute payments" is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the following order unless
you elect in writing within three (3) business days of the Change in Control a
different order: reduction of cash payments; cancellation of accelerated vesting
of stock awards; reduction of employee benefits. In the event that acceleration
of vesting of stock award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of your
stock awards unless you elect in writing a different order for cancellation.

                      (i) The accounting firm engaged by the Company for general
audit purposes as of the day prior to the effective date of the Change in
Control shall perform the foregoing calculations. The Company and you shall
equally share all expenses with respect to the determinations by such accounting
firm required to be made hereunder.

                                                                             -4-
<PAGE>   5

                      (ii) The accounting firm engaged to make the
determinations hereunder shall provide its calculations, together with detailed
supporting documentation, to the Company and you within thirty (30) calendar
days after the date on which your right to a Payment is triggered (if requested
at that time by the Company or you) or such other time as requested by the
Company or you. Any good faith determination of the accounting firm made
hereunder shall be final, binding and conclusive upon the Company and you.

                      (iii) If the accounting firm determines that no Excise Tax
is payable with respect to a Payment, either before or after the application of
the reduction set forth in this Section 6(e), it shall furnish the Company and
you with an opinion reasonably acceptable to you that no Excise Tax will be
imposed with respect to such Payment.

        7. Assignment. This Agreement will be binding upon and inure to the
benefit of (a) your heirs, executors and legal representatives upon your death
and (b) any successor of the Company. Any such successor of the Company will be
deemed substituted for the Company under the terms of this Agreement for all
purposes. For this purpose, "successor" means any person, firm, corporation or
other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly acquires all or substantially all of the
assets or business of the Company. None of your rights to receive any form of
compensation payable pursuant to this Agreement may be assigned or transferred
except by will or the laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of your right to
compensation or other benefits will be null and void.

        8. Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and will be deemed given (a) on the
date of delivery if delivered personally, (b) one (1) day after being sent by a
well established commercial overnight service, or (c) four (4) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors at the following addresses, or at
such other addresses as the parties may later designate in writing:

                If to the Company:

                Network Associates, Inc.
                13465 Midway Road
                Dallas, TX  75244

                Attn: General Counsel

                If to you:

                at the last residential address known by the Company and to
                Steven L. Friedlander, Esq., Cooley Godward LLP, One Maritime
                Plaza, 20th Floor, San Francisco, CA 94111.

        9. 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 will continue in full force and effect without said
provision.

                                                                             -5-
<PAGE>   6

        10. Confidentiality.

               (a) Employment Information. During the Employment Term and
thereafter, you agree to use your best efforts to maintain in confidence the
existence of this Agreement, the contents and terms of this Agreement, including
any documents incorporated by reference and the consideration for this Agreement
(the "Employment Information"). You agree to take every reasonable precaution to
prevent disclosure of any Employment Information to third parties, and agree
that there will be no publicity, directly or indirectly, concerning any
Employment Information. Notwithstanding the above, you may disclose Employment
Information in confidence to those attorneys, accountants, governmental
entities, family members and, if you are serving in your role as Special
Advisor, prospective employers who have a reasonable need to know of such
Employment Information.

               (b) Confidential Information. During the Employment Term and
thereafter, you agree to hold in the strictest confidence, and not use, except
for the benefit of the Company to fulfill your employment obligations, or to
disclose to any person, firm or corporation without written authorization of the
Board any "Confidential Information." You understand that "Confidential
Information" means any proprietary Company information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customer lists and customers (including, but not limited to,
customers of the Company on whom you called or with whom you became acquainted
during the term of your employment), markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other business
information disclosed to you by the Company either directly or indirectly in
writing or orally. You further understand that "Confidential Information" does
not include any of the foregoing items which have become publicly known and made
generally available through no wrongful act of yours or of others who were under
confidentiality obligations as to the item or items involved. You are free to
use your own skill, knowledge, know-how and experience to whatever extent and in
whichever way you wish, provided such use does not in any way involve the use of
Confidential Information. In the event you transition into the role of Special
Advisor, the Company will provide such materials to you as are necessary to
perform your duties as Special Advisor. As a Special Advisor, the Company does
not intend to provide you with any Confidential Information and will not do so
without ten (10) business days prior written notice. Nevertheless, to the extent
you receive Confidential Information as a Special Advisor, you acknowledge and
agree to be bound by this Section 10(b) with respect to such Confidential
Information.

        11. Non-Competition and Non-Solicitation. With respect to the businesses
of the Company or any of its subsidiaries on either the Effective Date or the
date of your termination of employment from the Company and all of it
subsidiaries (collectively, the "Businesses"), you agree that during the period
beginning on the Effective Date and ending on the date on which you terminate
employment, you, directly or indirectly, whether as employee, owner, sole
proprietor, partner, director, member, consultant, agent, founder, co-venturer
or otherwise, will not engage, participate or invest in (except for any indirect
investments as a result of your investments in venture funds or mutual funds)
any business activity anywhere in the world that is directly competitive with
the principal products or services of the Businesses; provided, however, that
the obligations described in this sentence will only apply to you through the
Transition Date in the event you become a Special Advisor to the Company, as
described in Section 1(b) above. During the period

                                                                             -6-
<PAGE>   7

beginning on the Effective Date and ending one year after the date on which you
terminate employment, you, directly or indirectly, whether as employee, owner,
sole proprietor, partner, director, member, consultant, agent, founder,
co-venturer or otherwise, will (a) not hire or attempt to employ, recruit or
otherwise solicit, induce or influence any person to leave employment with the
Businesses; and (b) not directly or indirectly solicit business from any of the
Businesses' customers and users on behalf of any business that directly competes
with the Businesses.

        12. Non-Disparagement. You and the Company agree to refrain from making
any negative comments about the other concerning their respective business,
products or services, officers, employees and directors and to refrain from any,
defamation, libel or slander of the other and their respective officers,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor and successor corporations, and assigns or
tortious interference with the contracts and relationships of the other and
their respective officers, directors, employees, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns.

        13. Entire Agreement. This Agreement (including Exhibit A), together
with the Change in Control Agreement (as amended hereby), the Indemnity
Agreement, the stock option plan under which your options were granted and your
stock option agreements, represents the entire agreement and understanding
between the Company and you concerning your employment relationship with the
Company or any of its subsidiaries, and supersedes and replaces any and all
prior agreements and understandings concerning your employment relationship with
the Company. The Change of Control Agreement is amended as follows:

               (a) Sections 1 and 4 of the Change of Control Agreement shall
remain in effect with respect to the accelerated vesting of options.

               (b) The following provisions are superceded hereby: 2, 3, 6 --14,
and 16 - 19.

               (c) If a Termination Upon a Change of Control (as defined in the
Change of Control Agreement) shall occur at any time during the Employment Term
other than during a Severance Period, then Section 5 of the Change of Control
Agreement shall apply.

               (d) If a Change of Control (as defined in the Change of Control
Agreement) shall occur during the Severance Period, if any, then Section 5 of
the Change of Control Agreement shall not apply (except with respect to the
vesting of options pursuant to Section 4 of the Change of Control Agreement).
The benefits provided with respect to the Severance Period under this Agreement
shall be in lieu of the separation benefits described in Section 5.

               (e) You may not receive benefits under Section 6 (a) of this
Agreement, if you are claiming or have claimed benefits under Section 5 of the
Change of Control Agreement. You may not receive benefits under Section 5 of the
Change of Control Agreement if you are claiming or have claimed benefits under
Section 6 (a) of this Agreement. It is agreed that you may not receive benefits
under Section 5 of the Change of Control Agreement unless you first sign the
Settlement Agreement and Release in the form attached as Exhibit A.

                                                                             -7-
<PAGE>   8

        14. Arbitration and Equitable Relief.

               (a) Except as provided in Section 14(d) below, you and the
Company agree that to the extent permitted by law, 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 will be settled by arbitration to be held in the County of San
Francisco, California, in accordance with the National Rules for the Resolution
of Employment Disputes then in effect of the American Arbitration Association
(the "Rules"). The arbitrator will allow discovery consistent with the
California Arbitration Act or as otherwise required by law in arbitration
proceedings. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator will set forth the
essential findings and conclusions on which the decision is based and will be
final, conclusive and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction.

               (b) The arbitrator will apply California law to the merits of any
dispute or claim (with the exception of its conflict of laws provisions). You
hereby expressly consent to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from or
relating to this Agreement and/or relating to any arbitration in which the
parties are participants.

               (c) The Company will pay the direct costs and expenses unique to
arbitration. The Company and you each will pay your own counsel fees and other
expenses associated with the arbitration.

               (d) The Company or you may apply to any court of competent
jurisdiction for a temporary restraining order, preliminary injunction, or other
interim or conservatory relief, as necessary to enforce the provisions of this
Agreement, without breach of this arbitration agreement and without abridgement
of the powers of the arbitrator.

               (e) You understand that nothing in this Section 14 modifies your
at-will status. Either the Company or you can terminate the employment
relationship at any time, with or without cause.

               (f) YOU HAVE READ AND UNDERSTAND THIS SECTION 14, WHICH DISCUSSES
ARBITRATION. YOU UNDERSTAND THAT BY SIGNING THIS AGREEMENT, YOU AGREE TO THE
EXTENT PERMITTED BY LAW, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING
TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF YOUR RIGHT
TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL
ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO,
THE FOLLOWING CLAIMS:

                      (i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF
EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT
OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED;

                                                                             -8-
<PAGE>   9

NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR
INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH
CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;

                      (ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE
OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, THE AMERICANS WITH
DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, AND ANY LAW OF ANY
STATE; AND

                      (iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

        15. Cooperation with Company. During and after the Employment Term, you
will cooperate fully with the Company in responding to the reasonable requests
of the Company's Chairman of the Board, CEO or General Counsel, in connection
with any and all existing or future litigation, arbitrations, mediations or
investigations brought by or against the Company or any of its affiliates,
agents, officers, directors or employees, whether administrative, civil or
criminal in nature, in which the Company reasonably deems your cooperation
necessary or desirable. In such matters, you agree to provide the Company with
reasonable advice, assistance and information, including offering and explaining
evidence, providing sworn statements, participating in discovery and trial
preparation and testimony. You also agree to promptly send the Company copies of
all correspondence (for example, but not limited to, subpoenas) received by you
in connection with any such legal proceedings, unless you are expressly
prohibited by law from so doing. You will act in good faith to furnish the
information and cooperation required by this Section 15 and the Company will act
in good faith so that the requirement to furnish such information and
cooperation does not create an undue hardship for you. The Company will
reimburse you for reasonable out-of-pocket expenses incurred by you as a result
of your cooperation, within ten (10) days of the presentation of appropriate
documentation thereof, in accordance with the Company's standard reimbursement
policies and procedures. The failure by you to cooperate fully with the Company
in accordance with this Section 15 will be a material breach of the terms of
this Agreement which will result in all commitments of the Company to make
additional payments to you becoming null and void. Notwithstanding anything in
this Section, it is agreed that (i) if possible the Company will provide you
with reasonable advance notice regarding these activities, (ii) any requests
made hereunder by the Company will be made in good faith, shall be reasonable
and, in the event you transition into a role as Special Advisor, will not
unreasonably interfere with your duties to any employer other than the Company
or any of its subsidiaries, (iii) that you are at all times able to respond to
legal process and otherwise act as required by applicable law, and (iv) this
Section 15 shall not apply to any litigations, arbitrations or mediations, or if
a conflict of interests develops, between you and the Company.

        16. No Oral Modification, Cancellation or Discharge. This Agreement may
be changed or terminated only in writing (signed by you and the Board or CEO).

        17. Withholding. The Company is authorized to withhold, or cause to be
withheld, from any payment or benefit under this Agreement the full amount of
any applicable withholding taxes.

                                                                             -9-
<PAGE>   10

        18. Governing Law. This Agreement will be governed by the laws of the
State of California (with the exception of its conflict of laws provisions).

        19. Authority. The Company represents and warrants that the person
signing this Agreement on its behalf has full authority to act for the Company.

        20. Acknowledgment. You acknowledge that you (i) have read this
Agreement, (ii) have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of your own choice or that you
voluntarily have declined to seek counsel, (iii) understand the terms and
consequences of this Agreement, and (iv) are fully aware of the legal and
binding effect of this Agreement.

                                                                            -10-
<PAGE>   11

        IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below:

                                    ZACHARY NELSON

                                    /s/ ZACHARY NELSON
                                    ------------------------------------------
                                    Zachary Nelson

                                    NETWORK ASSOCIATES, INC.

                                    By: /s/ KENT H. ROBERTS
                                        --------------------------------------
                                    Name: Kent H. Roberts
                                         -------------------------------------
                                    Title: Vice President and General Counsel
                                          ------------------------------------

                                                                            -11-

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