<PAGE> 1
As filed with the Securities and Exchange Commission on August 30, 1996
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
MCAFEE ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0316593
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2710 WALSH AVENUE
SANTA CLARA, CALIFORNIA 95051-0963
(Address of principal executive offices) (Zip Code)
MCAFEE ASSOCIATES, INC.
STOCK OPTION AGREEMENTS
(Full title of the Plan)
WILLIAM L. LARSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MCAFEE ASSOCIATES, INC.
2710 WALSH AVENUE
SANTA CLARA, CALIFORNIA 95051-0963
(Name and address of agent for service)
(408) 988-3832
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed Maximum Proposed Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ---------- --------- ----- ---
<S> <C> <C> <C> <C>
McAfee Stock Option Agreements
- ------------------------------
Options 105,885 N/A N/A N/A
Common Stock (par value $0.01) 105,885 $60 $6,353,100 $2,191
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the McAfee Stock Option
Agreements by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of
the outstanding shares of Common Stock of McAfee Associates, Inc.
(2) Calculated solely for purposes of this offering under Rule 457(h) of
the Securities Act of 1933, as amended, on the basis of the average of
the high and low price per share of Common Stock of McAfee Associates,
Inc. on August 26, 1996.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
McAfee Associates, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996;
(c) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1996; and
(d) The Registrant's Registration Statement No. 0-20558 on Form
8-A filed with the SEC on August 26, 1992 pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), in which there is described the terms, rights and
provisions applicable to the Registrant's outstanding Common
Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
provides for indemnification in terms sufficiently broad to indemnify directors
and officers, under certain circumstances, for liabilities (including
reimbursement of expenses incurred) arising under the Securities Act of 1933, as
amended (the "1933 Act"). Delaware law authorizes corporations to eliminate the
personal liability of directors to corporations and their stockholders for
monetary damages for breach or alleged breach of the directors' "duty of care."
While the relevant statute does not change directors' duty of care, it enables
corporations to limit available relief to equitable remedies such as injunction
or rescission. The statute has no effect on directors' duty of loyalty, acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, illegal payment of dividends and approval of any transaction
from which a director derives an improper personal benefit.
The Registrant has adopted provisions in its Certificate of
Incorporation which eliminate the personal liability of its directors to the
Registrant and its stockholders for monetary damages for breach or alleged
breach of their duty of care. The By-Laws of the Registrant provide for
indemnification of its directors, officers, employees and agents to the full
extent permitted by the General Corporation Law of the State of Delaware, the
Registrant's state of incorporation, including those circumstances in which
indemnification would otherwise be discretionary under Delaware Law.
II-2
<PAGE> 3
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit Number Exhibit
- -------------- -------
5 Opinion and consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP.
23.1 Consent of Coopers & Lybrand L.L.P., Independent
Accountants.
23.2 Consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 FSA Option Agreement.
99.2 McAfee Stock Option Exchange Agreement.
99.3 McAfee Nonstatutory Stock Option Agreement.
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement (i) to include any
prospectus required by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the
prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement; provided, however, that clauses
(1)(i) and (1)(ii) shall not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act
that are incorporated by reference into this Registration Statement; (2) that
for the purpose of determining any liability under the 1933 Act each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof and
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
Registrant's Stock Option Agreements.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising
under the 1933 Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the indemnification provisions summarized
in Item 6 or otherwise, the Registrant has been advised that, in the opinion of
the SEC, such indemnification is against public policy as expressed in the 1933
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8, and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Clara, State of California on
this 28th day of August, 1996.
MCAFEE ASSOCIATES, INC.
By: /S/ William L. Larson
-----------------------------------
William L. Larson
President, Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of McAfee
Associates, Inc., a Delaware corporation, do hereby constitute and appoint
William L. Larson and Prabhat Goyal, and either of them, the lawful
attorneys-in-fact and agents with full power and authority to do any and all
acts and things and to execute any and all instruments which said attorneys and
agents, and either one of them, determine may be necessary or advisable or
required to enable said corporation to comply with the Securities Act of 1933,
as amended, and any rules or regulations or requirements of the Securities and
Exchange Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereof, and either of the undersigned hereby ratifies
and confirms that all said attorneys and agents, or either one of them, shall do
or cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/S/ William L. Larson President, Chief Executive Officer and August 28, 1996
- -------------------------------------- Chairman of the Board
William L. Larson (Principal Executive Officer)
/S/ Prabhat Goyal Vice President of Finance, August 28, 1996
- -------------------------------------- Corporate Controller and Treasurer
Prabhat Goyal (Principal Financial and Accounting
Officer)
</TABLE>
II-4
<PAGE> 5
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/S/ John C. Bolger Director August 28, 1996
- -----------------------------------------
John C. Bolger
/S/ Jeffrey T. Chambers
- ----------------------------------------- Director August 28, 1996
Jeffrey T. Chambers
/S/ Leslie G. Denend Director August 28, 1996
- -----------------------------------------
Leslie G. Denend
/S/ Edwin L. Harper Director August 28, 1996
- -----------------------------------------
Edwin L. Harper
/S/ Walter G. Kortschak Director August 28, 1996
- -----------------------------------------
Walter G. Kortschak
</TABLE>
II-5
<PAGE> 6
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
MCAFEE ASSOCIATES, INC.
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit Sequentially
-------------- ------- Numbered Page
-------------
<S> <C>
5 Opinion and consent of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP.
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23.2 Consent of Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.1 FSA Option Agreement.
99.2 McAfee Stock Option Exchange Agreement.
99.3 McAfee Nonstatutory Stock Option Agreement.
</TABLE>
<PAGE> 1
Exhibit 5
August 27, 1996
McAfee Associates, Inc.
2710 Walsh Avenue
Santa Clara, CA 95051-0963
Re: McAfee Associates, Inc. Registration Statement
for Offering of 105,885 Shares of Common Stock
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of 105,885 shares of
Common Stock under the McAfee Stock Option Agreements granted outside a stock
option plan to employees of FSA Corporation in exchange for FSA stock option
agreements, pursuant to the terms of a Combination Agreement between McAfee
Associates, Inc. and FSA Corporation and the McAfee Stock Option Exchange
Agreements. We advise you that, in our opinion, when such shares have been
issued and sold pursuant to the applicable provisions of the McAfee Stock Option
Agreements and in accordance with the Registration Statement, such shares will
be validly issued, fully paid and nonassessable shares of the Company's Common
Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Gunderson Dettmer Stough Villeneuve Franklin
& Hachigian, LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 (File No. ___________) of our report dated January 25, 1996, except for
the matter discussed in Note 11, for which the date is March 21, 1996, on our
audits of the consolidated financial statements of McAfee Associates, Inc. as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995.
COOPERS & LYBRAND, L.L.P.
San Jose, California
August 27, 1996
<PAGE> 1
EXHIBIT 99.1
STOCK OPTION AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of October,
1995.
BETWEEN:
FSA CORPORATION, a corporation incorporated under the laws of
the Province of Alberta, having its head office in the City of
Calgary, in the Province of Alberta (hereinafter called the
"Corporation")
OF THE FIRST PART
- AND -
______________, of the City of Calgary, in the Province of
Alberta (hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS the Optionee is an employee of the Corporation;
AND WHEREAS on October 1, 1995 the Corporation granted stock
options to certain employees and consultants of the Corporation, including the
Optionee;
AND WHEREAS by way of letter to such employees and consultants
dated May 31, 1996, the Corporation set out the terms of such stock options;
AND WHEREAS the Corporation and the Optionee now wish to
further clarify the terms and conditions of the stock option granted to the
Optionee;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the premises and mutual covenants hereinafter contained, the parties hereto
agree as follows:
1. Subject to the terms hereof, the Corporation confirms the
grant to the Optionee of an irrevocable option (hereinafter called the "Option")
to purchase up to and including 32,500 Class A Shares in the capital of the
Corporation, based upon the share capitalization set forth in Section 2 below
(hereinafter called the "Optioned Shares") at a price of $0.60 per share (the
"Option Price"), prior to 4:30 p.m. (Calgary time) September 30, 2010
(hereinafter called the "Expiry Date"). On the Expiry Date, the Options shall
forthwith expire and terminate and be of no further force or effect whatsoever
as to such of the Optioned Shares in respect of which the Option hereby granted
has not then been exercised.
<PAGE> 2
2. The number of Optioned Shares purchasable under the terms of
the Option is based upon a fully diluted share capitalization of the Corporation
of 1,000,000 Class A Shares and Class A Share equivalents, including any vested
and unvested options granted as of the date of this Agreement. For the purposes
of the Option, "Class A Share equivalents" in respect of a share of the
Corporation other than a Class A Share shall be calculated at any particular
time as the fair market value of such share at that time (based upon its rights
to assets of the Corporation upon liquidation) divided by the fair market value
of a Class A Share at that time.
3. The Corporation may from time to time, and in the event of a
merger or acquisition of the Corporation as referred to in Section 10(c) shall,
cause a subdivision of the then outstanding Class A Shares of the Corporation
into an appropriate number of Class A Shares so that the fully diluted share
capitalization as referred to in Section 2 above is maintained.
4. Except as otherwise provided herein, the Option is
exercisable, on a cumulative basis for the exercisable but unexercised portions
of the Option, in accordance with the following schedule at the Option Price
until the Expiry Date:
NUMBER OF CLASS A SHARES
PERIOD COMMENCING WHICH MAY BE PURCHASED
----------------- ------------------------
October 1, 1995 12,500
August 20, 1996 5,000
February 20, 1997 5,000
August 20, 1997 5,000
February 20, 1998 5,000
5. Upon a Triggering Event, the schedule for exercise referred to
in Section 4 above shall be accelerated effective immediately prior to the
occurrence of the Triggering Event such that the number of Optioned Shares
exercisable at any particular date stated therein shall be multiplied by a
factor of two, provided however that under no circumstances shall the total
number of Optioned Shares exercisable under the terms of this Option exceed
32,500. For the purposes of this Section 5, a "Triggering Event" means either
(a) a change of control of the Corporation whereby any person (other than Daniel
Freedman) acquires the legal right to acquire shares of the Corporation
representing more than 50% of the voting shares of the Corporation or (b) the
sale by the Corporation of all or substantially all of the assets of the
Corporation or a decision by the directors or shareholders of the Corporation to
liquidate, dissolve or wind-up the Corporation, or to merge, amalgamate,
consolidate or absorb the Corporation with or into any other corporation.
6. Upon the death of the Optionee prior to a termination of the
Optionee's services to or position with the Corporation, the legal personal
representative of the Optionee may exercise, in respect of any portion of the
Option exercisable at the time of death, all or a portion of the Option then
exercisable and not yet exercised, to acquire the Optioned Shares on
2
<PAGE> 3
or before either the date which is one year following the death of the Optionee
or the Expiry Date, whichever is earlier.
7. In the event of the termination of the Optionee's services to
or position with the Corporation for any reason prior to the Expiry Date, other
than by the death of the Optionee, the Optionee (or the personal representative
of the Optionee in the event of the Optionee's death subsequent to such
termination) may exercise, in respect of any portion of the Option exercisable
at the time of such termination, all or a portion of the Option then exercisable
and not yet exercised, to acquire the Optioned Shares on or before either the
date which is 90 days following the date of such termination or the Expiry Date,
whichever is earlier.
8. Subject to the foregoing provisions, the Option shall be
exercisable at any time and from time to time as aforesaid by the Optionee
giving notice to the Corporation in writing specifying therein the number of
Optioned Shares in respect of which the Option is being exercised, accompanied
by payment in cash, certified cheque, bankers' draft or telegraphic transfer of
funds payable at par in Calgary, Alberta in full payment of the purchase price
for such number of Optioned Shares so specified therein.
Upon any exercise of the Option as aforesaid, the Corporation
shall forthwith cause to be delivered to the Optionee, or the Optionee's legal
personal representative or as is otherwise directed in the notice of exercise of
the Option, within ten (10) days following the receipt by the Corporation of
payment for the Optioned Shares, a certificate or certificates representing in
the aggregate such number of Optioned Shares as the Optionee or the Optionee's
legal representative shall have then paid for.
9. Nothing herein contained or done pursuant hereto shall
obligate the Optionee to purchase and pay for any Optioned Shares except those
Optioned Shares in respect of which the Optionee shall have exercised in the
manner herein provided.
10. In the event of:
(a) any subdivision (other than a subdivision referred to in
Section 3 above), redivision or change of the Class A Shares of the Corporation
at any time prior to the Expiry Date into a greater number of Class A Shares,
the Corporation shall deliver, at the time of any exercise thereafter of the
Option, such additional number of shares in order to put the Optionee in the
same position as if the exercise of the Option had been made prior to the date
of such subdivision, redivision or change;
(b) any consolidation or change of the Class A Shares of the
Corporation at any time prior to the Expiry Date into a lesser number of Class A
Shares, the Corporation shall deliver, at the time of any exercise thereafter of
the Option, such lesser number of shares in order to put the Optionee in the
same position as if the exercise of the Option had been made prior to the date
of such consolidation or change; and
(c) in the event of any merger or acquisition of the
Corporation with or by another corporation or change of control of the
corporation, this Option may be assumed,
3
<PAGE> 4
exchanged, substituted or replaced by the acquiror, survivor or successor
corporation (or parent thereof) with a comparable option to purchase shares of
the capital stock of the acquiror, survivor or successor corporation (or parent
thereof). The determination of option comparability shall be made by the
Corporation, and its determination shall be final, binding and conclusive.
11. The Optionee shall have no rights whatsoever as a shareholder in
respect of any of the Optioned Shares, including any right to receive dividends
or other distributions therefrom or thereon, other than in respect to Optioned
Shares which the Optionee shall have exercised the Option to purchase hereunder
and which the Optionee shall have actually taken up and paid for.
12. The Option is, insofar as the Optionee is concerned, personal and
non-assignable and neither this Agreement nor any rights in respect thereto
shall be transferable or assignable except upon the death of the Optionee as
provided for herein.
13. Any notice required or permitted to be given hereunder shall be in
writing and shall be sufficiently given if delivered or given by registered
mail, postage prepaid, addressed, if to the Optionee, to:
OPTIONEE
______________________
______________________
______________________
and if to the Corporation, to:
FSA CORPORATION
1011 First Street S.W.
Suite 508
Calgary, Alberta
T2R 1J2
Any such notice delivered shall be deemed to be received on the date of delivery
or, given by mail as aforesaid, shall be deemed to have been given on the fifth
business day after the date of such mailing. Any such address for the giving of
notices hereunder may be changed by notice in writing given hereunder.
14. Notwithstanding anything to the contrary in this Agreement, the
Optionee hereby agrees that it will not exercise the Option, and that the
Corporation will not be obliged to issue any Class A Shares hereunder, if the
exercise of the Option or the issuance of the Class A Shares shall constitute a
violation by the Optionee or the Corporation of any provision of any law or
regulation or of any rule of any governmental authority or regulatory body. Any
determination in this connection made by the Board of Directors of the
Corporation shall be final, binding and conclusive. The Corporation shall in no
event be obliged, by any act of the Optionee or otherwise, to issue, register or
qualify for resale any securities issuable upon exercise of the Option pursuant
to a prospectus or similar document or to take any other affirmative action in
4
<PAGE> 5
order to cause the exercise of the Option or the issuance or resale of the Class
A Shares issuable pursuant thereto to comply with any law or regulation or any
rule of any governmental authority or regulatory body.
15. Time shall be of the essence of this Agreement.
16. This Agreement shall be governed and construed in accordance with
the laws of the Province of Alberta.
17. Except as provided, there are no options, subscriptions, warrants,
calls, rights, commitments, plans, conversion or exchange rights or agreements
of any character in favor of the Optionee to acquire securities of the
Corporation.
18. This Agreement constitutes the entire agreement among the parties
relating to the subject matter hereof and supersedes all prior agreements and
undertakings, oral or written, between the parties hereto with respect to the
subject matter hereof.
19. This Agreement shall enure to the benefit of and be binding upon
the Corporation, its successors and assigns, and the Optionee and the Optionee's
legal personal representative.
20. The parties hereto covenant that they shall, from time to time and
at all times hereafter, do and perform all such acts and things and execute all
such deeds, documents and writings as may be required to give effect to the true
intent of this Agreement.
21. It is understood and agreed by the parties hereto that questions
may arise as to the interpretation, construction or enforcement of this
Agreement and the parties are desirous of having the Board of Directors of the
Corporation determine any such questions of interpretation, construction or
enforcement. It is, therefore, understood and agreed by and between the parties
hereto that any question arising under the terms of this Agreement as to
interpretation, construction or enforcement shall be referred to the Board of
Directors of the Corporation and their majority decision shall be final and
binding on both of the parties hereto.
IN WITNESS WHEREOF this Agreement has been executed by the
parties on the ___ day of August 1996, to be effective as of the day and year
first above written.
FSA CORPORATION
By: _______________________
______________________________ ___________________________
WITNESS OPTIONEE
5
<PAGE> 1
EXHIBIT 99.2
FORM OF
STOCK OPTION EXCHANGE AGREEMENT
___________________________, Optionee
Number of FSA Shares:________________
Grant Date: October 1, 1995
AGREEMENT made as of the 30th day of August 1996, by and
between McAfee Associates, Inc. ("McAfee "), a Delaware corporation, and
___________ ("Optionee").
WHEREAS, Optionee is the holder of an outstanding option (an
"FSA Option") to purchase Class A Shares ("Common Shares") of FSA Corporation
("FSA"), an Alberta corporation, which were granted to Optionee by FSA pursuant
to an option agreement (the "FSA Option").
WHEREAS, McAfee, through its subsidiary, desires to acquire an
acquisition interest in FSA pursuant to a transaction (the "Combination") in
accordance with the terms of a Combination Agreement between McAfee and FSA,
dated as of August 16, 1996 (the "Combination Agreement").
WHEREAS, the terms of the Combination Agreement require that
at the Effective Time McAfee and Optionee shall enter into this agreement
evidencing such option exchange (the "Exchange Agreement"), and McAfee shall
provide the Optionee with the appropriate stock option agreement evidencing such
New Option.
WHEREAS, pursuant to the terms of the Combination Agreement,
each FSA Option outstanding immediately prior to the consummation of the
Combination transaction (the "Effective Time") shall be exchanged for an option
(the "New Option") to purchase that number of shares of Common Stock of McAfee
determined by multiplying the number of FSA Common Shares subject to such FSA
Option by .355932 (the "Exchange Ratio").
WHEREAS, each New Option shall be exercisable for whole shares
of McAfee Common Stock. If the Exchange Ratio calculation would otherwise result
in an exchanged FSA Option exercisable for a fraction of a share of McAfee
Common Stock, then the number of shares of McAfee Common stock subject to the
New Option shall be rounded down to the nearest whole number of shares.
WHEREAS, the per share exercise price for the New Option will
be equal to the quotient obtained by dividing the per share exercise price of
the FSA Option exercisable immediately prior to the Effective Time by the
Exchange Ratio, rounded up to the nearest whole cent.
WHEREAS, the intent of such adjustments is to ensure that the
spread between the aggregate fair market value of the McAfee Common Stock
purchasable under each New Option and the aggregate exercise price as adjusted
hereunder will, as of the Effective Time, be equal to the spread which existed
immediately prior to the Effective Time between the then
<PAGE> 2
aggregate fair market value of the FSA Shares subject to the FSA Option and the
aggregate exercise price in effect at such time under the FSA Option.
WHEREAS, this Exchange Agreement is to be effective
immediately following the Effective Time of the Combination.
NOW, THEREFORE, it is hereby agreed as follows:
1. Optionee hereby represents that he or she is, as of this
date, the holder of the option to purchase the number of FSA Common Shares
indicated below at the exercise price per share set forth below. McAfee hereby
exchanges, as of the Effective Time, the Optionee's outstanding FSA Option for a
New Option and hereby agrees to issue up to the number of shares of McAfee
Common Stock indicated below for each such exchanged FSA Option upon (i)
exercise of the New Option in accordance with the provisions of the New Option
and (ii) payment of the adjusted exercise price per share set forth below.
FSA MCAFEE
STOCK OPTION EXCHANGED OPTION
Number of FSA Number of Shares of
Common Exercise McAfee Common Exercise
Shares Price/Share Stock Price/Share
2. The following provisions shall govern each New Option:
(i) The term, exercisability, vesting schedule, and all
other terms and conditions of the New Option shall remain the same as
set forth in the FSA Option applicable to such option. Thus, the
vesting schedule in the New Option shall reflect the acceleration of
vesting provided in Section 5 of the FSA Option.
(ii) Continuous employment with FSA shall be credited to an
Optionee for purposes of determining the number of shares of McAfee
Common Stock subject to exercise under the New Option after the
Effective Time.
(iii) To the extent that the FSA Option applicable to each
New Option does not address a specific term, each New Option shall be
governed by its own terms.
3. This Exchange Agreement shall be binding upon, and inure to
the benefit of, the successors and assigns of McAfee and the executors,
administrators, heirs and legatees of the Optionee's estate.
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4. This Exchange Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5. This Exchange Agreement is to be effective immediately
following the Effective Time of the Combination.
IN WITNESS WHEREOF, the parties have executed this Exchange
Agreement as of the date first set forth above.
McAfee Associates, Inc.
By__________________________________
The undersigned acknowledges receipt of the foregoing Stock
Option Exchange Agreement and understands that all rights and liabilities with
respect to the New Option are as set forth in the FSA Option, the McAfee stock
option agreement and this Exchange Agreement.
_________________________________________
Optionee:
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EXHIBIT 99.3
MCAFEE ASSOCIATES, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "OPTION
AGREEMENT") is made and entered into as of________________, 1996, by and
between McAfee Associates, Inc. (the "Company") and __________ (the "OPTIONEE").
On August 30, 1996, a subsidiary of the Company acquired a
controlling interest in FSA Corporation ("FSA") (the "Combination"). Pursuant to
the terms of a Combination Agreement between the Company, the Company's
subsidiary, FSA and Daniel Freedman, the sole shareholder of FSA, dated August
16, 1996, and a Stock Option Exchange Agreement between the Company and the
Optionee, the Company agreed to exchange the outstanding FSA option agreement
granted to Optionee by FSA with this Option Agreement.
The Company hereby grants to the Optionee an option to
purchase _____ shares of Stock, for the Exercise Price of $1.69 per share of
Stock, upon the terms and conditions set forth in this Option Agreement (the
"OPTION").
1. DEFINITIONS AND CONSTRUCTION.
1.1. DEFINITIONS. Whenever used herein, the following terms
shall have their respective meanings set forth below:
(a) "BOARD" means the Board of Directors of the
Company. If one or more Committees have been appointed by the Board to
administer the Option Agreement, "Board" shall also mean such Committee(s).
(b) "CODE" means the Internal Revenue Code of 1986,
as amended, and any applicable regulations promulgated thereunder.
(c) "COMMITTEE" means the Compensation Committee or
other committee of the Board duly appointed to administer the Option Agreement
and having such powers as shall be specified by the Board.
(d) "COMPANY" means McAfee Associates, Inc., a
Delaware corporation, or any successor corporation thereto.
(e) "CONSULTANT" means any person, including an
advisor, engaged by a Participating Company to render services other than as an
Employee or a Director.
(f) "DIRECTOR" means a member of the Board or of the
board of directors of any other Participating Company.
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(g) "EMPLOYEE" means any person treated as an
employee (including an officer or a Director who is also treated as an employee)
in the records of a Participating Company; provided, however, that neither
service as a Director nor payment of a director's fee shall be sufficient to
constitute employment for this purpose.
(h) "EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
(i) "EXERCISE PRICE" means $1.69 per share of Stock,
as adjusted from time to time pursuant to Section 9.
(j) "FAIR MARKET VALUE" means, as of any date, the
value of a share of stock or other property as determined by the Board, in its
sole discretion, or by the Company, in its sole discretion, if such
determination is expressly allocated to the Company herein.
(k) "OPTION EXPIRATION DATE" means September 30,
2010, prior to 4:30 p.m. (Calgary time).
(l) "PARENT CORPORATION" means any present or future
"parent corporation" of the Company, as defined in Section 424(e) of the Code.
(m) "PARTICIPATING COMPANY" means the Company or any
Parent Corporation or Subsidiary Corporation.
(n) "PARTICIPATING COMPANY GROUP" means, at any point
in time, all corporations collectively which are then Participating Companies.
(o) "SECURITIES ACT" means the Securities Act of
1933, as amended.
(p) "SERVICE" means the Optionee's employment or
service with the Participating Company Group, whether in the capacity of an
Employee, a Director or a Consultant. The Optionee's Service shall not be deemed
to have terminated merely because of a change in the capacity in which the
Optionee renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service. The
Optionee's Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Optionee performs
Service ceasing to be a Participating Company.
(q) "STOCK" means the common stock, par value $0.01,
of the Company, as adjusted from time to time in accordance with Section 9.
(r) "SUBSIDIARY CORPORATION" means any present or
future "subsidiary corporation" of the Company, as defined in Section 424(f) of
the Code.
1.2. CONSTRUCTION. Captions and titles contained herein are
for convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the
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plural, and the plural shall include the singular. Use of the term "or" is
intended to include the conjunctive as well as the disjunctive.
2. TAX STATUS OF THE OPTION. This Option is intended to be a
nonstatutory stock option and shall not be treated as an incentive stock option
within the meaning of Section 422(b) of the Code.
3. ADMINISTRATION. All questions of interpretation concerning
this Option Agreement shall be determined by the Board, including any duly
appointed Committee of the Board. All determinations by the Board shall be final
and binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.
4. EXERCISE OF THE OPTION.
4.1. RIGHT TO EXERCISE. As of August 30, 1996, the Option
shall be fully vested and exercisable, as a result of the acceleration of
vesting pursuant to Section 8.2.
4.2. METHOD OF EXERCISE. Exercise of the Option shall be by
written notice to the Company which must state the election to exercise the
Option, the number of whole shares of Stock for which the Option is being
exercised and such other representations and agreements as to the Optionee's
investment intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. The written notice must be signed by the
Optionee and must be delivered in person, by certified or registered mail,
return receipt requested, by confirmed facsimile transmission, or by such other
means as the Company may permit, to the Chief Financial Officer of the Company,
or other authorized representative of the Participating Company Group, prior to
the termination of the Option as set forth in Section 6, accompanied by full
payment of the aggregate Exercise Price for the number of shares of Stock being
purchased. The Option shall be deemed to be exercised upon receipt by the
Company of such written notice and the full payment of the aggregate Exercise
Price.
4.3. PAYMENT OF EXERCISE PRICE. Payment of the aggregate
Exercise Price for the number of shares of Stock for which the Option is being
exercised shall be made in cash, by check, or cash equivalent, such as bankers'
draft or telegraphic transfer of funds.
4.4. TAX WITHHOLDING. At the time the Option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the
Optionee hereby authorizes withholding from payroll and any other amounts
payable to the Optionee, and otherwise agrees to make adequate provision for,
any sums required to satisfy the federal, state, local and foreign tax
withholding obligations of the Participating Company Group, if any, which arise
in connection with the Option, including, without limitation, obligations
arising upon (i) the exercise, in whole or in part, of the Option, (ii) the
transfer, in whole or in part, of any shares acquired upon exercise of the
Option, (iii) the operation of any law or regulation providing for the
imputation of interest, or (iv) the lapsing of any restriction with respect to
any shares
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acquired upon exercise of the Option. The Optionee is cautioned that the Option
is not exercisable unless the tax withholding obligations of the Participating
Company Group are satisfied. Accordingly, the Optionee may not be able to
exercise the Option when desired even though the Option is vested, and the
Company shall have no obligation to issue a certificate for such shares.
4.5. CERTIFICATE REGISTRATION. The certificate for the shares
as to which the Option is exercised shall be registered in the name of the
Optionee, or, if applicable, the heirs of the Optionee.
4.6. RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF
SHARES. The grant of the Option and the issuance of shares of Stock upon
exercise of the Option shall be subject to compliance with all applicable
requirements of federal, state or foreign law with respect to such securities.
The Option may not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any stock
exchange or market system upon which the Stock may then be listed. In addition,
the Option may not be exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in effect with
respect to the shares issuable upon exercise of the Option or (ii) in the
opinion of legal counsel to the Company, the shares issuable upon exercise of
the Option may be issued in accordance with the terms of an applicable exemption
from the registration requirements of the Securities Act. THE OPTIONEE IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.
4.7. FRACTIONAL SHARES. The Company shall not be required to
issue fractional shares upon the exercise of the Option.
5. NONTRANSFERABILITY OF THE OPTION. The Option may be
exercised during the lifetime of the Optionee only by the Optionee or the
Optionee's guardian or legal representative and may not be assigned or
transferred in any manner except by will or by the laws of descent and
distribution. Following the death of the Optionee, the Option, to the extent
provided in Section 7, may be exercised by the Optionee's legal representative
or by any person empowered to do so under the deceased Optionee's will or under
the then applicable laws of descent and distribution.
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6. TERMINATION OF THE OPTION. The Option shall terminate and
may no longer be exercised on the first to occur of (a) the Option Expiration
Date, or (b) the last date for exercising the Option following termination of
the Optionee's Service as described in Section 7.
7. EFFECT OF TERMINATION OF SERVICE.
7.1. OPTION EXERCISABILITY.
(a) DEATH. If the Optionee's Service with the
Participating Company Group is terminated because of the death of the Optionee,
the Option, to the extent unexercised and exercisable on the date on which the
Optionee's Service terminated, may be exercised by the Optionee's legal
representative or other person who acquired the right to exercise the Option by
reason of the Optionee's death at any time prior to the expiration of twelve
(12) months after the date on which the Optionee's Service terminated, but in
any event no later than the Option Expiration Date.
(b) OTHER TERMINATION OF SERVICE. If the Optionee's
Service with the Participating Company Group terminates for any reason, except
death, the Option, to the extent unexercised and exercisable by the Optionee on
the date on which the Optionee's Service terminated, may be exercised by the
Optionee within ninety (90) days after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date.
7.2. EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding
the foregoing, if the exercise of the Option within the applicable time periods
set forth in Section 7.1 is prevented by the provisions of Section 4.6, the
Option shall remain exercisable until three (3) months after the date the
Optionee is notified by the Company that the Option is exercisable, but in any
event no later than the Option Expiration Date.
7.3. LEAVE OF ABSENCE. For purposes of Section 7.1, the
Optionee's Service with the Participating Company Group shall not be deemed to
terminate if the Optionee takes any military leave, sick leave, or other bona
fide leave of absence approved by the Company of ninety (90) days or less. In
the event of a leave of absence in excess of ninety (90) days, the Optionee's
Service shall be deemed to terminate on the ninety-first (91st) day of such
leave unless the Optionee's right to reemployment with the Participating Company
Group remains guaranteed by statute or contract. Notwithstanding the foregoing,
unless otherwise designated by the Company (or required by law), a leave of
absence shall not be treated as Service for purposes of determining the
Optionee's vested Stock in accordance with the vesting schedule set forth in
section 4.1.
8. TRIGGERING EVENT.
8.1. TRIGGERING EVENT. A "Triggering Event" shall be deemed to
have occurred in the event any of the following occurs with respect to the
Company:
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(a) a change of control of the Company whereby any
person (other than Daniel Freedman) acquires the legal right to acquire shares
of the Company representing more than 50% of the voting shares of the Company;
or
(b) the sale by the Company of all or substantially
all of the assets of the Company or a decision by the directors or stockholders
of the Company to liquidate, dissolve or wind-up the Company, or to merge,
amalgamate, consolidate or absorb the Company with or into any other
corporation.
8.2. EFFECT OF TRIGGERING EVENT ON OPTION. In the event of a
Triggering Event, the schedule for exercise referred to in Section 4.1 above
shall be accelerated effective immediately prior to the occurrence of the
Triggering Event such that the number of shares of Stock which is vested and
exercisable is equal to the number of shares of Stock subject to the Option and
exercisable in accordance with the vesting schedule in Section 4.1 multiplied by
two; provided, however, that under no circumstances shall the total number of
shares of Stock exercisable under the terms of this Option exceed __________.
The schedule for exercise referred to in Section 4.1 already reflects the
acceleration of vesting described in this Section 8.2, as a result of the
Combination.
In addition, in the event of a Triggering Event, this Option
may be assumed, exchanged, substituted or replaced by the acquiror, survivor or
successor corporation (or parent thereof) with a comparable option to purchase
shares of the capital stock of the acquiror, survivor or successor corporation
(or parent thereof). The determination of option comparability shall be made by
the Company, and its determination shall be final, binding and conclusive.
9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event
of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification, or similar change in the capital structure of the
Company, appropriate adjustments shall be made in the number, Exercise Price and
class of shares of stock subject to the Option. If a majority of the shares
which are of the same class as the shares that are subject to the Option are
exchanged for, converted into, or otherwise become (whether or not pursuant to a
Triggering Event) shares of another corporation (the "NEW SHARES"), the Board
may unilaterally amend the Option to provide that the Option is exercisable for
the New Shares. In the event of any such amendment, the shares of Stock subject
to the Option and the Exercise Price shall be adjusted in a fair and equitable
manner, as determined by the Board, in its sole discretion. Notwithstanding the
foregoing, any fractional share resulting from an adjustment pursuant to this
Section 9 shall be rounded up or down to the nearest whole number, as determined
by the Board, and in no event may the Exercise Price be decreased to an amount
less than the par value, if any, of the stock subject to the Option.
10. RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT. The
Optionee shall have no rights as a stockholder with respect to any shares
covered by the Option until the date of the issuance of a certificate for the
shares for which the Option has been exercised (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for
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which the record date is prior to the date such certificate is issued, except as
provided in Section 9. Nothing in this Option Agreement shall confer upon the
Optionee any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Optionee's Service as an Employee or Consultant, as the case may
be, at any time.
11. STOCK DIVIDENDS SUBJECT TO OPTION AGREEMENT. If, from time
to time, there is any stock dividend, stock split, or other change in the
character or amount of any of the outstanding stock of the corporation the stock
of which is subject to the provisions of this Option Agreement, then in such
event any and all new, substituted or additional securities to which the
Optionee is entitled by reason of the Optionee's ownership of the shares
acquired upon exercise of the Option shall be immediately subject to any
security interest held by the Company with the same force and effect as the
shares subject to such security interest immediately before such event.
12. LEGENDS. The Company may at any time place legends
referencing any applicable federal, state or foreign securities law restrictions
on all certificates representing shares of stock subject to the provisions of
this Option Agreement. The Optionee shall, at the request of the Company,
promptly present to the Company any and all certificates representing shares
acquired pursuant to the Option in the possession of the Optionee in order to
carry out the provisions of this Section.
13. BINDING EFFECT. Subject to the restrictions on transfer
set forth herein, this Option Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
14. TERMINATION OR AMENDMENT. The Board may terminate or amend
the Option at any time; provided, however, that no such termination or amendment
may adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation. No amendment or
addition to this Option Agreement shall be effective unless in writing.
15. INTEGRATED AGREEMENT. This Option Agreement, the Stock
Option Exchange Agreement and the FSA Stock Option Agreement (as herein
incorporated by reference) constitute the entire understanding and agreement of
the Optionee and the Participating Company Group with respect to the subject
matter contained herein, and there are no agreements, understandings,
restrictions, representations, or warranties among the Optionee and the
Participating Company Group other than those as set forth or provided for
herein. To the extent contemplated herein, the provisions of this Option
Agreement shall survive any exercise of the Option and shall remain in full
force and effect.
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16. APPLICABLE LAW. This Option Agreement shall be governed by
the laws of the State of California.
McAFEE ASSOCIATES, INC.
By:________________________
Title:_____________________
The Optionee represents that the Optionee is familiar with the
terms and provisions of this Option Agreement and hereby accepts the Option
subject to all of the terms and provisions thereof. The Optionee hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of
the Board upon any questions arising under this Option Agreement.
OPTIONEE
Date:___________________________ ____________________________________________
