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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: December 12, 2008
(Date of earliest event reported)
McAfee, Inc.
(Exact Name of Registrant as specified in Charter)
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Delaware
(State or other Jurisdiction
of incorporation)
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Commission File No.:
001-31216
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77-0316593
(I.R.S. Employer Identification No.) |
3965 Freedom Circle
Santa Clara, California 95054
(Address of Principal Executive Offices, including zip code)
(408) 346-3832
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Form 8-k
Change of Control Agreements
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
After a review of market practices conducted by the Compensation Committee of
the Board of Directors (the Compensation Committee) of McAfee, Inc. (McAfee), with the
assistance of outside compensation consultants, the Compensation Committee authorized and
recommended certain changes to McAfees change of control protections. The agreements described
below reflect those changes with respect to named executive officers.
Entering into Change of Control and Retention Agreement with David DeWalt
On December 12, 2008, McAfee entered into a Change of Control and Retention Agreement with
David DeWalt, its Chief Executive Officer and President. The agreement provides for certain
severance benefits in the event McAfee terminates Mr. DeWalts employment for other than cause or in the event that
Mr. DeWalt resigns for good reason. The agreement provides for varying severance benefits based
upon whether the termination occurs within eighteen (18) months following a change of control of
McAfee (the Change of Control Period). The severance payments provided to Mr. DeWalt by this
agreement will supersede any severance payments afforded Mr. DeWalt in any employment agreement he
had with McAfee. Without regard to severance payments, Mr. DeWalts employment will not be changed
by this agreement. Pursuant to the agreement and subject to signing a standard release of claims,
upon Mr. DeWalts termination for other than cause or upon his resignation for good reason, he will be entitled
to the following benefits:
Termination Other than During a Change of Control Period
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A lump-sum payment (less applicable tax withholding) equal to twelve (12) months
of Mr. DeWalts annual base salary, plus a pro rata fraction of the amount equal to
110% of his annual base salary, with the pro rata fraction determined as the number
of days in the year to the date of termination divided by 365; |
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A payment equal to twelve (12) months of the cost of continuation coverage of
medical benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (COBRA), if Mr. DeWalt was covered under McAfees health plan; and |
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Full acceleration of vesting of (i) the outstanding restricted stock units from Mr. DeWalts
February 11, 2008 grant with respect to 125,000 shares of stock which
are due to fully vest within twelve (12) months following termination and (ii) all
his then outstanding equity awards that are not subject to vesting based on performance. |
Termination During a Change of Control Period
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A lump-sum payment (less applicable tax withholding) equal to twenty-four (24)
months of Mr. DeWalts annual base salary as in effect immediately prior to the
change of control or the termination (whichever is greater), plus the amount equal
to 200% of his target bonus for the fiscal year of the change of control or
the termination (whichever is greater); |
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A payment for COBRA as described above; and |
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Full acceleration of vesting of all Mr. DeWalts then outstanding equity awards. |
Additionally, in the event Mr. DeWalt is terminated for other than cause or resigns for good reason
before a change of control but on or after a potential change of control, Mr. DeWalt will be
entitled generally to the superior severance benefits provided by a termination during a Change
of Control Period. A potential change of control would generally occur upon the execution of an
agreement, Board approval, or public announcement for McAfee to enter into a transaction that would
be a change of control if such transaction is subsequently
consummated. This benefit is only available if the change of control occurs.
Entering into Change of Control and Retention Agreements with Certain Other Officers
In addition, on December 12, 2008 McAfee also entered into a Change of Control and Retention
Agreement with each of the following executive officers of McAfee:
Messrs. Christopher Bolin, Mark
Cochran, Michael DeCesare and Albert (Rocky) Pimentel (the Tier 2 Executives). The agreements
with each of the Tier 2 Executives provide substantially the same terms and conditions as the
agreement with Mr. DeWalt as described above. However, the agreements to each Tier 2 Executive
provide different benefits from those of Mr. DeWalt as described below:
Termination Other than During a Change of Control Period
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A lump-sum payment (less applicable tax withholding) equal to twelve (12) months
of the Tier 2 Executives annual base salary, plus a pro rata fraction of a stated
percentage, ranging form 60% to 100% of their annual base salary, with the pro rata fraction determined as
the number of days in the year to the date of termination divided by 365; and |
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A payment equal to twelve (12) months of the cost of continuation coverage of
medical benefits under COBRA, if the Tier 2 Executive was covered under McAfees health plan. |
Termination During a Change of Control Period
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A lump-sum payment (less applicable tax withholding) equal to twelve (12)
months of the Tier 2 Executives annual base salary as in effect immediately prior
to the change of control or the termination (whichever is greater), plus the amount
equal to a stated percentage, ranging from 60% to 100% of their annual base salary for the fiscal year of the
change of control or the termination (whichever is greater); |
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A payment for COBRA as described above; and |
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Full acceleration of vesting of all of the Tier 2 Executives then outstanding
equity awards. |
Apart from the varied benefits described directly above, the benefits provided to a Tier 2
Executive upon a termination for other than cause or a resignation for good reason are generally the
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same as those provided to Mr. DeWalt, including the provision for benefits upon a potential change
of control.
Also, on
December 18, 2008 McAfee entered into a Change of Control
Retention Plan Participation Agreement with
Roger King (a Tier 3 Executive). The agreement with a Tier 3 Executive provides substantially
the same terms and conditions as the agreements to Mr. DeWalt and the Tier 2 Executives. However,
the agreement with a Tier 3 Executive only provides severance
benefits beyond McAfee's current severance policies for a termination occurring
during a Change of Control Period. Also, the payments provided to a Tier 3 Executive under his
retention agreement supersede a Tier 3 Executives employment agreement only in regard to a payment
upon a change of control. Pursuant to his retention agreement and subject to signing a standard
release of claims, upon a Tier 3 Executives termination for
other than cause or upon his resignation
for good reason during a Change of Control Period, a Tier 3 Executive will be entitled to the
following benefits:
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A lump-sum payment (less applicable tax withholding) equal to six (6) months of
a Tier 3 Executives annual base salary as in effect immediately prior to the
change of control or the termination (whichever is greater), plus
fifty percent (50%) of a Tier 3 Executives target bonus for the fiscal year of the change of
control or the termination (whichever is greater); |
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A payment for COBRA equal to six (6) months of the cost of continuation of health
coverage; and |
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Fifty percent (50%) acceleration of vesting of all a Tier 3 Executives then
outstanding equity awards. |
Additionally,
in the event a Tier 3 Executive is terminated for other than cause or resigns for
good reason before a change of control but on or after a potential change of control, the Tier 3
Executive will be entitled generally to the severance benefits provided by a termination during the
Change of Control Period.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
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10.1
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Form of Change of Control and
Retention Agreement (Mr. DeWalt and Tier 2 Executives) |
10.2
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McAfee, Inc. Change of Control
Retention Plan (Tier 3 Executives) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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McAfee, Inc.
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Date: December 18, 2008 |
By: |
/s/ Mark D. Cochran
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Mark D. Cochran |
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Executive Vice President and General
Counsel |
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