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Exhibit 10.1 McAFEE, INC. CHANGE OF CONTROL AND
RETENTION AGREEMENT This Change
of Control and Retention Agreement (the " Agreement ") is
made and entered into by and between [Name of Executive] (the "
Employee ") and McAfee, Inc. (the " Company "),
effective as of December 12, 2008 (the " Effective Date
"). RECITALS It is
possible that the Company may from time to time receive acquisition
proposals by other entities. The Compensation Committee of the
Board of Directors of the Company (the " Committee ")
recognizes that consideration of any such proposals can be a
distraction to the Employee and can cause the Employee to consider
alternative employment opportunities. The Committee has determined
that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued
dedication and objectivity of the Employee, notwithstanding the
possibility, threat or occurrence of a " Change of Control "
(as defined herein) of the Company.
The Committee believes that it is in
the best interests of the Company and its stockholders to provide
the Employee with an incentive to continue his or her employment
and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.
The Committee believes that it is
imperative to provide the Employee with certain benefits upon the
Employee’s termination of employment following a Change of
Control. These benefits will provide the Employee with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of a Change of Control.
This Agreement also consolidates the
documentation of severance benefits to which the Employee may be
entitled in the event of the Employee’s termination of
employment with the Company under specified circumstances not in
connection with a Change of Control.
Certain capitalized terms used in the
Agreement are defined in Section 6 below.
AGREEMENT NOW,
THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
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1.
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Term of Agreement . The term of this Agreement shall
commence on the Effective Date and continue through
February 15, 2010. If a Potential Change in Control Date has
occurred prior to the expiration of this Agreement, this Agreement
shall remain in effect until the earliest of:
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(a)
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eighteen (18) months after the Change of Control Date, if a
Change of Control has been completed, and automatically terminate
following the eighteen month anniversary of the Change of Control
Date, so long as all payments due under Section 3(c) and 4 of this
Agreement have been made; or
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(b)
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twelve (12) months after the Potential Change of Control
Date if no Change of Control has been completed; provided, however,
that in the event of a protracted regulatory clearance
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process with respect to a Potential Change of Control, such term
shall be extended so long as the Company is pursuing the Potential
Change of Control in good faith.
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2.
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At-Will Employment . The Company and the Employee
acknowledge that the Employee’s employment is and shall
continue to be at-will, as defined under applicable law, except as
otherwise may be provided specifically under the terms of any
written formal employment agreement or offer letter between the
Company and the Employee (an " Employment Agreement "). If
the Employee’s employment terminates for any reason,
including (without limitation) any termination prior to a Change of
Control, the Employee shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be available in accordance with
the Company’s established employee plans other than any
Employment Agreement. To the extent the Employee has entered into
an employment agreement or other written employment related
document with the Company, its applicability will not be changed by
this Agreement, except with respect to any provisions that provide
for payments or other benefits upon termination of employment.
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3.
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Severance Benefits .
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(a)
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In addition to the benefits described below, the Employee will
be entitled to receive payment for:
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(i)
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Accrued Salary and Vacation . All salary and accrued
vacation earned through the Termination Date, less applicable
federal and state withholding.
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(ii)
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Expense Reimbursement . Within thirty (30) days of
submission of proper expense reports by the Employee, the Company
shall reimburse the Employee for all expenses incurred by the
Employee, consistent with past practices, in connection with the
business of the Company prior to the Employee’s termination
of employment.
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(iii)
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Employee Benefits . Benefits, if any, under any 401(k)
plan, nonqualified deferred compensation plan, employee stock
purchase plan and other Company benefit plans under which the
Employee may be entitled to benefits, payable pursuant to the terms
of such plans.
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(b)
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Involuntary Termination other than for Cause or Resignation
for Good Reason OTHER THAN During the Change of Control
Period . If (i) the Employee resigns his or her employment
with the Company (or any parent or subsidiary of the Company) for "
Non-Change of Control Period Good Reason " (as defined
herein), or (ii) the Company (or any parent or subsidiary of
the Company) terminates the Employee’s employment for other
than " Cause " (as defined herein), such termination is not
within the period ending eighteen (18) months following a
Change of Control Date (the " Change of Control Period ")
and, the Employee (X) complies with the Company’s
sub-certification requirements that have been implemented to ensure
compliance with the Sarbanes Oxley Act 2002 in form and substance
determined by the Company in its complete discretion, and
(Y) signs and does not revoke a standard release of claims
with the Company in a form substantially similar to that attached
hereto as Exhibit A (a " Release "), then the
Employee shall receive the following severance benefits from the
Company:
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(i)
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Severance Payment . The Employee shall receive a lump-sum
severance payment (less applicable tax withholding) equal to twelve
(12) months of the Employee’s Base Salary plus a pro
rata fraction of [ ]% of the
Employee’s Base Salary with the
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fraction determined as the number of days in the year to the
date of termination divided by 365.
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(ii)
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Additional Severance Payment . If the Employee is covered
by the Company health care plan, the Employee shall receive a lump
sum cash payment equal to twelve (12) multiplied by the cost
of a single month of COBRA coverage at the rates in effect on the
date of termination. If such coverage included the Employee’s
dependents immediately prior to the Employee’s termination of
employment with the Company, such payment shall also include the
cost of COBRA coverage for the Employee’s dependents.
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(iii)
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[ DeWalt Agreement Only : Initial Restricted Stock
Unit Acceleration . Employee’s restricted stock unit
granted on February 11, 2008 with respect to 125,000 shares of
the Company’s stock shall have its vesting accelerated as of
the date of termination so that it is vested to the extent that it
would have been vested if Employee had remained employed through
the one-year anniversary of the date of termination
Non-Performance Based Equity Awards . All of the
Employee’s then-outstanding equity awards covering shares of
the Company’s common stock (" Equity Awards ") that
are not subject to vesting based on performance shall vest one
hundred percent (100%) as of the date of termination.]
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(c)
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Involuntary Termination Other than for Cause or Resignation
for Good Reason During the Change of Control Period . If within
the Change of Control Period, (i) the Employee resigns his or her
employment with the Company (or any parent or subsidiary of the
Company) for " Change of Control Period Good Reason " (as
defined herein), or (ii) the Company (or any parent or
subsidiary of the Company) terminates the Employee’s
employment for other than " Cause " (as defined herein), the
Employee’s death or the Employee’s Disability (as
defined herein), and, the Employee (X) complies with the
Company’s sub-certification requirements that have been
implemented to ensure compliance with the Sarbanes Oxley Act 2002
in form and substance determined by the Company in its complete
discretion, and (Y) signs and does not revoke a Release, then
the Employee shall receive the following severance benefits from
the Company:
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(i)
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Severance Payment . The Employee shall receive a lump-sum
severance payment (less applicable tax withholding) equal to [
DeWalt agreement only : twenty four (24) months]
[twelve (12) months] of the Employee’s Base Salary plus
an amount equal to [DeWalt agreement only: 200% of his Target
Bonus] [ [ ]% of the
Employee’s Base Salary] for the fiscal year in which the
Change of Control or the Employee’s termination occurs,
whichever is greater.
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(ii)
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Equity Awards . All of the Employee’s
then-outstanding equity awards covering shares of the
Company’s common stock (" Equity Awards ") shall vest
one hundred percent (100%) as of the date of termination.
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(iii)
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Additional Severance Payment . If the Employee is covered
by the Company health care plan, the Employee shall receive a cash
payment equal to twelve (12) multiplied by the cost of a
single month of COBRA coverage at the rates in effect on the date
of termination. If such coverage included the Employee’s
dependents immediately prior to the Employee’s termination of
employment with the Company, such payment shall also include the
cost of COBRA coverage for the Employee’s dependents.
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(iv)
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Special Termination . Notwithstanding the foregoing, if
the Employee’s employment is terminated by the Company
without Cause prior to the Change of Control Date but on or after a
Potential Change of Control Date, then the Company will provide to
the Employee the payments and benefits as provided in
Section 3(c), in lieu of Section 3(b); provided ,
however, that if the Company reasonably demonstrates that the
Employee’s termination of employment (X) was not at the
request of a third party who has taken steps reasonably calculated
to effect a Change of Control, and (Y) would have occurred
absent the Change of Control, then Section 3(b) shall apply in lieu
of Section 3(c). Solely for purposes of determining the timing of
payments and the provision of benefits under the circumstances
described in this Section 3(c)(iv), the Employee’s date of
termination shall be deemed to be the Change of Control Date.
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(d)
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Timing of Severance Payments . Other than with respect to
the payments made under Section 3(a), the severance payments
to which the Employee is entitled will be subject to the Employee
signing and not revoking the Release and provided that such Release
is effective within sixty (60) days following the termination
of employment. Such payments will be made to the Employee in cash
and in full, not later than seven (7) calendar days after the
effective date of any Release. In the event the termination occurs
at a time during the calendar year where it would be possible for
the Release to become effective in the calendar year following the
calendar year in which the Employee’s termination occurs, any
severance that would be considered Deferred Compensation Separation
Benefits (as defined in Section 3(g)) will be paid on the
first payroll date to occur during the calendar year following the
calendar year in which such termination occurs, or such later time
as required by the payment schedule applicable to each payment or
benefit, or Section 3(g).
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(e)
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Voluntary Resignation; Termination for Cause, Death or
Disability . If the Employee’s employment with the
Company terminates (i) voluntarily by the Employee other than
for Good Reason or Disability, (ii) for Cause by the Company,
or (iii) pursuant to the Employee’s death or Disability, then
the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under
the Company’s then existing severance and benefits plans and
practices or pursuant to other written agreements with the
Company.
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(f)
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Exclusive Remedy . In the event of a termination of the
Employee’s employment, the provisions of this Section 3
are intended to be and are exclusive and in lieu of any other
rights or remedies to which the Employee or the Company may
otherwise be entitled, whether at law, tort or contract, in equity,
or under this Agreement. The Employee shall be entitled to no
benefits, compensation or other payments or rights upon termination
of employment other than those benefits expressly set forth in this
Section 3.
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(g)
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Code Section 409A .
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(i)
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Notwithstanding anything to the contrary in this Agreement, if
the Employee is a "specified employee" within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended
(the " Code ") and the final regulations and any guidance
promulgated thereunder (" Section 409A ") at the time
of the Employee’s termination (other than due to death) or
resignation, then the severance payable to the Employee, if any,
pursuant to this Agreement, when considered together with any other
severance payments or separation benefits that are considered
deferred compensation under Section 409A (together, the "
Deferred Compensation Separation Benefits ")
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that are payable within the first six (6) months following
the Employee’s termination of employment, will become payable
on the first payroll date that occurs on or after the date six
(6) months and one (1) day following the date of the
Employee’s termination of employment. All subsequent Deferred
Compensation Separation Benefits, if any, will be payable in
accordance with the payment schedule applicable to each payment or
benefit. Notwithstanding anything herein to the contrary, if the
Employee dies following his or her termination but prior to the six
(6) month anniversary of his or her termination, then any
payments delayed in accordance with this paragraph will be payable
in a lump sum as soon as administratively practicable after the
date of the Employee’s death and all other Deferred
Compensation Separation Benefits will be payable in accordance with
the payment schedule applicable to each payment or benefit. Each
payment and benefit payable under this Agreement is intended to
constitute a separate payment for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations.
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(ii)
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Any amount paid under this Agreement that satisfies the
requirements of the "short-term deferral" rule set forth in Section
1.409A-1(b)(4) of the Treasury Regulations shall not constitute
Deferred Compensation Separation Benefits for purposes of clause
(i) above.
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(iii)
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Any amount paid under this Agreement that qualifies as a payment
made as a result of an involuntary separation from service pursuant
to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that do
not exceed the Section 409A Limit shall not constitute Deferred
Compensation Separation Benefits for purposes of clause
(i) above. " Section 409A Limit " will mean the
lesser of two (2) times: (i) the Employee’s
annualized compensation based upon the annual rate of pay paid to
the Employee during the Employee’s taxable year preceding the
Employee’s taxable year of the Employee’s termination
of employment as determined under, and with such adjustments as are
set forth in, Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1)
and any Internal Revenue Service guidance issued with respect
thereto; or (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which the Employee’s employment
is terminated.
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(iv)
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The foregoing provisions are intended to comply with the
requirements of Section 409A so that none of the severance
payments and benefits to be provided hereunder will be subject to
the additional tax imposed under Section 409A, and any
ambiguities herein will be interpreted to so comply. The Company
and the Employee agree to work together in good faith to consider
amendments to this Agreement and to take such reasonable actions
which are necessary, appropriate or desirable to avoid imposition
of any additional tax or income recognition prior to actual payment
to the Employee under Section 409A.
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4.
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Treatment of Performance-Based Equity . Upon the
occurrence of a Change of Control, all of the Employee’s
outstanding Equity Awards scheduled to vest based on performance
shall convert to be awards with time-based vesting. As of the date
of the Change of Control, the awards will be vested as to the
extent that they would have been vested if they had been granted
originally with a four year time-based vesting schedule with annual
vesting. The vesting of such Equity Awards will continue after the
Change of Control, assuming continuous service, based upon the same
time-based vesting schedule. To the extent that such Equity Awards
are not fully vested at the 18-month anniversary of the Change of
Control, on such 18 month anniversary they will be 100% vested. The
acceleration
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provisions of Section 3 will govern any terminations of
employment prior to the 18-month anniversary of the Change of
Control.
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5.
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Golden Parachute Excise Tax Best Results . In the event
that the severance and other benefits provided for in this
agreement or otherwise payable to the Employee (X) constitute
"parachute payments" within the meaning of Code Section 280G,
and (Y) would be subject to the excise tax imposed by
Section 4999 of the Code, then such benefits shall be
either:
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(a)
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delivered in full, or
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(b)
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delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax
under Section 4999 of the Code, whichever of the foregoing
amounts, taking into account the applicable federal, state and
local income and employment taxes and the excise tax imposed by
Section 4999, results in the receipt by the Employee, on an
after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code. Unless the Company and
the Employee otherwise agree in writing, the determination of the
Employee’s excise tax liability and the amount required to be
paid under this Section 5 shall be made in writing by a
nationally-recognized independent accounting firm selected by the
Company (the " Accountants "). For purposes of making the
calculations required by this Section 5, the Accountants may
make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G
and 4999 of the Code. The Company and the Employee shall furnish to
the Accountants such information and documents as the Accountants
may reasonably request in order to make a determination under this
Section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated
by this Section 5. Any reduction in payments and/or benefits
required by this Section 5 shall occur in the following order:
(1) reduction of cash payments; (2) reduction of
acceleration of vesting of equity awards; and (3) reduction of
other benefits paid to the Employee. In the event that acceleration
of vesting of equity awards is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of
grant for the Employee’s equity awards.
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6.
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Definition of Terms . The following terms referred to in
this Agreement shall have the following meanings:
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(a)
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Base Salary . Base Salary means:
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(i)
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with respect to payments set forth in Section 3(c) above, the
rate of annual base salary paid to the Employee immediately prior
to a Change of Control, provided that such amount shall in no event
be less than the highes
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