CHRISTOPHER BOLIN EMPLOYMENT
AGREEMENT
This Agreement is
made by and between McAfee (the “ Company ”),
and Christopher Bolin (“ Executive ”) as of
October 1, 2004.
1. Duties
and Scope of Employment.
(a)
Positions; Employment Commencement Date; Duties.
Executive’s employment with the Company commenced
April 7, 1997 (the “Employment Commencement Date
”). As of the date of this Agreement, the Company employs
Executive as Executive Vice President and Chief Technology Officer
of the Company for the McAfee Engineering Department reporting into
the President of the Company (the “President”). The
period of Executive’s employment hereunder is referred to
herein as the “Employment Term.” During the Employment
Term, Executive shall render such business and professional
services in the] performance of his/her duties that are consistent
with Executive’s position within the Company, as shall
reasonably be assigned to him/her by the Chief Executive Officer of
the Company (the “ CEO ”) and or the
President.
(b)
Obligations. During the Employment Term, Executive shall
devote his/her full business efforts and time to the Company.
Executive agrees, during the Employment Term, not to actively
engage in any other employment, occupation or consulting activity
for any direct or indirect remuneration without the prior approval
of the CEO; provided, however, that Executive may serve in
any capacity (i) with any civic, educational or charitable
organization, or (ii) as a member of corporate boards of
directors or committees of another corporation so long as such
organization does not compete with the Company if Executive obtains
the prior written approval of the CEO with respect to serving in
such capacity, which may be withheld in the sole discretion of the
CEO. The term “ Board ” means the Board of
Directors of the Company.
2.
Employee Benefits. During the Employment Term, Executive
shall be eligible to participate in the employee and fringe benefit
plans maintained by the Company (as such plans are amended from
time to time) that are applicable to other management personnel
serving at levels no higher than Executive to the full extent
provided for under those plans.
3.
At-Will Employment. Executive and the Company agree and
acknowledge that Executive’s employment with the Company
constitutes “at-will” employment. Subject to the
Company’s obligation to provide severance benefits as
specified herein, Executive and the Company agree 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 the Company or
Executive.
(a)
Base Salary. During the Employment Term, the Company shall
pay the Executive as compensation for his/her services a base
salary at the annualized rate of Three
Hundred Fifty
Thousand ($350,000.00). Such base salary shall be paid periodically
in accordance with normal Company payroll practices and subject to
the usual, required withholding. The Company will review (in
accordance with the policies set by the Compensation Committee of
the Board) Executive’s base salary at least once annually
starting in January 2005 and, if it deems it appropriate,
modify the base salary. Executive’s annualized base salary,
as modified as provided herein, shall be referred to as his/her
“ Base Salary .”
(b)
Bonuses. Executive shall be eligible to participate in the
executive quarterly incentive bonus program (as it may be amended
from time to time), with milestones based in part on Company
performance and/or in part on Executive’s individual
performance Executive’s quarterly target incentive is 42.857%
of Base Salary for such quarter (the “ Target
Bonus ”). The payment of all or any portion of the
Target Bonus for any calendar quarter shall depend on whether the
relevant goals are met (or, in the case of a Target Bonus that has
tiered goals, which, if any, tier or tiers of goals are
met).
(i)
Termination For Any Reason. Notwithstanding
Executive’s entitlement to severance benefits under certain
circumstances discussed below in this Section 6(c),
upon termination of Executive’s employment for any reason,
the Company shall pay Executive all Base Salary and accrued but
unpaid vacation earned through the date of termination, reimburse
Executive for all necessary and reasonable expenses in accordance
with Section 4 and continue Executive’s benefits
under the Company’s then-existing benefit plans and policies
for so long as required by applicable law. In addition, if, and
only if, the relevant goals for the calendar quarter in which the
termination of Executive’s employment occurs are met then the
Company shall also pay executive the Target Bonus (or the portion
of the Target Bonus that would be paid based on the tiers of goals
that are met) for such calendar quarter but prorated based on the
quotient of (A) the number of days in the calendar quarter
through the date of termination, divided by (B) the number of
days in such calendar quarter. For illustration purposes only, if
Executive’s Target Bonus is $1,000, and Executive is
terminated on May 15, and Executive met sufficient goals to
receive a $600 Target Bonus, then his/her actual bonus for the year
of termination would be $297 ($600 x (45/91)).
(ii)
Termination Due to Tuiai Disability. Death. Resignation for Good
Reason and Involuntary Termination Other Than for Cause. If
(A) Executive dies, (B) Executive resigns his/her
employment with the Company due to a Total Disability,
(C) Executive resigns his/her employment with the Company for
Good Reason, or (D) Executive’s employment with the
Company is terminated by the Company other than for Cause, then,
subject to Executive executing, and not revoking, the Mutual
Release of Claims attached hereto as Exhibit A with the
Company, (1) Executive shall receive six (6) monthly payments,
each equal to the product of (A) one-twelfth (1/12) multiplied
by the sum of Executive’s Base Salary plus (B) one third
of the Target Bonus; less applicable withholding, and otherwise in
accordance with the Company’s standard payroll practices, and
(2) the Company shall pay the portion of the group health,
dental and vision plan continuation coverage premiums for Executive
and his/her covered dependents under Title X of the Consolidated
Budget Reconciliation Act of 1985, as amended (“ COBRA
”). that would have been paid by the Company were he/she
still employed by the Company, through the lesser of (x) six
(6) months from the date of Executive’s termination of
employment, or
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(y) the
date upon which Executive and his/her covered dependents are
eligible to be covered by similar plans of Executive’s new employer,
and (3) if, and only if, such termination is within six
(6) months following a Change in Control, then all of
Executive’s remaining unvested stock options and shares of
restricted stock shall vest immediately, and, if applicable, the
Company’s right to repurchase all of the same such shares
immediately shall lapse.
(iii)
Involuntary Termination for Cause or Resignation Other Than
For Good Reason. In the event Executive terminates
his/her employment other than for Good Reason or Executive’s
employment is involuntarily terminated by the Company for Cause,
then all vesting of stock options, restricted stock and any other
equity compensation shall terminate immediately and all payments of
compensation by the Company to Executive hereunder shall
immediately terminate (except as to amounts already earned, as
specified in Section 6(c)(i) above, and the right,
subject to the terms of the relevant stock option agreement(s), to
exercise any stock options vested through the date of
termination).
(1)
Termination for Cause. A termination of Executive’s
employment for “ Cause ” means a termination of
Executive’s employment by the Company based upon a good faith
determination by the Board that one or more of the following has
occurred: (a) Executive’s commission of a material act of
fraud with respect to the Company in connection with Executive
carrying out his/her responsibilities as an employee, (b) any
intentional refusal or willful failure to carry out the reasonable
instructions of the CEO or the Board, (c) Executive’s
conviction of, or plea of nolo contendere to, a misdemeanor crime
of moral turpitude or a felony, (d) Executive’s gross
misconduct in connection with the performance of his/her duties
hereunder, or (e) Executive’s material breach of his/her
obligations under this Agreement and any other agreement to which
Executive and the Company or its Affiliate is a party.
(2)
Change in Control . “ Change in Control ”
shall mean any of the following:
(A) the
acquisition by any individual, entity, or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other
than by the Company or any Affiliate thereof or any Affiliate of a
shareholder of the Company immediately prior to such acquisition,
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the combined
voting power or economic interests of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors;
(B) A
change in the composition of the Board occurring within a
twenty-four month period, as a result of which fewer than a
majority of the directors of the Board are Incumbent Directors. The
term “ Incumbent Directors ” means members of
the Board who are (I) members of the Board of the date hereof,
or (II) elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not
include an individual whose election or
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nomination is
in connection with an actual or threatened proxy contest relating
to the election of directors to the Company);
(C) a
reorganization, merger, or consolidation, in each case, with
respect to which all or substantially all of the Persons that were
the respective beneficial owners of the voting securities of the
Company immediately prior to such reorganization, merger, or
consolidation do not, following such reorganization, merger, of
consolidation, beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
of Company resulting from such reorganization, merger, or
consolidation; or
(D) the
sale or other disposition of all or substantially all of the assets
of the Company in one transaction or series of related
transactions.
(E) Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur
because a majority or more of the outstanding voting securities of
the Company is acquired by (I) a trustee or other fiduciary
holding securities under one or more employee benefit plans
maintained by the Company or any of its Affiliates, or
(II) any Person that, immediately prior to such acquisition,
is owned directly or indirectly by the stockholders of the Company
in approximately the same proportion as their ownership of stock in
the Company immediately prior to such acquisition.
(3)
Resignation for Good Reason. A resignation for “
Good Reason ” means the resignation by Executive of
his/her employment within ninety (90) days of the occurrence
of any one or more of the following events without
Executive’s written consent, provided that Executive has
complied with the Good Reason Process: (a) a material
reduction by the Company in Executive’s Base Salary and/or
Target Bonus, (b) a material reduction by the Company in
Executive’s benefits, (c) a reduction by the Company in
Executive’s title and/or a material reduction in
Executive’s authority and/or duties without a Sufficient
Basis, or (d) the requirement by Executive’s supervisor
that Executive relocate more than thirty-five (35) miles from
his/her then-current office location. Notwithstanding the foregoing
sentence to the contrary, it is agreed that Executive’s
receiving less bonus or no bonus as a result of not meeting the
relevant goals for a Target Bonus is not a Good Reason.
The
term “ Good Reason Process ” shall mean that
(i) a Good Reason has occurred; (ii) Executive notifies
the Company in writing of the occurrence of the Good Reason;
(iii) Executive cooperates in good faith with the
Company’s efforts, for a period of at least 30 days
following such notice, to modify Executive’s employment
situation in a manner reasonably acceptable to Executive and the
Company; (iv) notwithstanding such efforts, one or more of the
Good Reasons
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