<PAGE> 1
As filed with the Securities and Exchange Commission on August 8, 1997
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
- ------------------------ ----------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
2710 Walsh Avenue, Suite 200
Santa Clara, California 95051
(Address of Principal Executive Offices, including Zip Code)
----------------------------------------
1997 Stock Incentive Plan
(Full title of the plans)
-----------------------------------------
President and Chief Executive Officer
McAfee Associates, Inc.
2710 Walsh Avenue, Suite 200
Santa Clara, California 95051
(408) 988-3832
(Name, address and telephone number of agent for service)
--------------------
Copy to:
Jeffrey D. Saper, Esq.
Kurt Berney, Esq.
Wilson Sonsini Goodrich & Rosati, P.c.
650 Page Mill Road
Palo Alto, California 94304
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Proposed
Maximum Proposed Maximum Amount of
Title of Securities to Amount to be Offering Price Per Aggregate Offering Registration
be Registered Registered Share(1) Price(1) Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock to be issued under the 2,450,000 $65.25 $159,862,500.00 $48,443.18
1997 Stock Incentive Plan
==========================================================================================================
</TABLE>
(1) The Proposed Maximum Offering Price Per Share was estimated pursuant
to Rule 457(c) whereby the per share price was the average between the
high and low price reported in the Nasdaq National Market on August 4,
1997, which average was $65.25.
================================================================================
<PAGE> 2
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information previously filed with the
Securities and Exchange Commission (the "Commission") by McAfee Associates, Inc.
(the "Company") are hereby incorporated by reference in this Registration
Statement:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, filed pursuant to Section 13 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, filed pursuant to the Exchange Act.
(b) The description of the Company's common stock which is contained in
the Company's Registration Statement on Form 8-A, filed pursuant to Section 12
of the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
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.
The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except for liability
(i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Company's Bylaws provide that the Company shall indemnify its
directors and officers and may indemnify its employees and other agents to the
fullest extent permitted by law. The Company believes that indemnification under
its Bylaws covers at least negligence and gross negligence on the part of
indemnified parties. The Company's Bylaws also permit the Company to secure
insurance on behalf of any officer,
II-1
<PAGE> 3
director, employee or other agent for any liability arising out of his or her
actions in such capacity, regardless of whether the Company would have the power
to indemnify him or her against such liability under the General Corporation Law
of Delaware. The Company currently has secured such insurance on behalf of its
officers and directors.
The Company has entered into agreements to indemnify its directors and
officers, in addition to indemnification provided for in the Company's Bylaws.
Subject to certain conditions, these agreements, among other things, indemnify
the Company's directors and officers for certain expenses (including attorney's
fees), judgments, fines and settlement amounts incurred by any such person in
any action or proceeding, including any action by or in the right of the
Company, arising out of such person's services as a director or officer of the
Company, any subsidiary of the Company or any other company or enterprise to
which the person provides services at the request of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- ------------------------------------------
<S> <C>
4.1 1997 Stock Incentive Plan.
5.1 Opinion of Counsel as to legality of securities being
registered.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
ITEM 9. UNDERTAKINGS.
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 to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities 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.
(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 offering.
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<PAGE> 4
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indem nification is against public policy as expressed in the
Exchange 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 Exchange Act
and will be governed by the final adjudication of such issue.
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<PAGE> 5
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
_________ day of August, 1997.
McAFEE ASSOCIATES, INC.
By: /s/ WILLIAM L. LARSON
-------------------------------------
William L. Larson
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints William L. Larson and Prabhat
Goyal, and each of them acting individually, as his or her attorney-in-fact,
each with full power of substitution, for him or her in any and all capacities,
to sign any and all amendments to this Registration Statement on Form S-8, and
to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or any substitute, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------- ------------------------- ---------------
<S> <C> <C>
/s/ WILLIAM L. LARSON Director, Chief Executive August 8, 1997
- --------------------- Officer and President
William L. Larson Executive Officer
/s/ PRABHAT GOYAL Chief Financial Officer August 8, 1997
- --------------------- (Principal Financial and
Prabhat Goyal Accounting Officer)
/s/ JOHN BOLGER Director August 8, 1997
- ---------------------
John Bolger
/s/ LESLIE DENEND Director August 8, 1997
- ---------------------
Leslie Denend
/s/ VIRGINIA GEMMELL Director August 8, 1997
- ---------------------
Virginia Gemmell
/s/ EDWIN HARPER Director August 8, 1997
- ---------------------
Edwin Harper
</TABLE>
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<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
- ------- --------
<S> <C>
4.1 1997 Stock Incentive Plan.
5.1 Opinion of Counsel as to legality of securities being
registered.
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page II-4).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
McAFEE ASSOCIATES, INC.
1997 STOCK INCENTIVE PLAN
(AS ADOPTED EFFECTIVE JUNE 5, 1997)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1. INTRODUCTION...................................................1
ARTICLE 2. ADMINISTRATION.................................................1
2.1 Committee Composition..........................................1
2.2 Committee Responsibilities.....................................1
ARTICLE 3. SHARES AVAILABLE FOR GRANTS....................................2
3.1 Basic Limitation...............................................2
3.2 Additional Shares..............................................2
3.3 Dividend Equivalents...........................................2
ARTICLE 4. ELIGIBILITY....................................................2
4.1 Incentive Stock Options........................................2
4.2 Other Grants...................................................2
4.3 Prospective Employees and Consultants..........................2
ARTICLE 5. OPTIONS........................................................3
5.1 Stock Option Agreement.........................................3
5.2 Number of Shares...............................................3
5.3 Exercise Price.................................................3
5.4 Exercisability and Term........................................3
5.5 Effect of Transfer of Control..................................3
5.6 Substitution of Options........................................4
5.7 Buyout Provisions..............................................4
ARTICLE 6. PAYMENT FOR OPTION SHARES......................................4
6.1 General Rule...................................................4
6.2 Surrender of Stock.............................................4
6.3 Exercise/Sale..................................................4
6.4 Exercise/Pledge................................................4
6.5 Promissory Note................................................5
6.6 Other Forms of Payment.........................................5
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 7. STOCK APPRECIATION RIGHTS......................................5
7.1 SAR Agreement..................................................5
7.2 Number of Shares...............................................5
7.3 Exercise Price.................................................5
7.4 Exercisability and Term........................................5
7.5 Effect of Transfer of Control..................................6
7.6 Exercise of SARs...............................................6
7.7 Modification or Assumption of SARs.............................6
ARTICLE 8. RESTRICTED SHARES..............................................6
8.1 Restricted Stock Agreement.....................................6
8.2 Payment for Awards.............................................6
8.3 Vesting Conditions.............................................6
8.4 Effect of Transfer of Control..................................7
8.5 Voting and Dividend Rights.....................................7
ARTICLE 9. STOCK UNITS....................................................7
9.1 Stock Unit Agreement...........................................7
9.2 Payment for Awards.............................................7
9.3 Vesting Conditions.............................................7
9.4 Effect of Transfer of Control..................................8
9.5 Voting and Dividend Rights.....................................8
9.6 Form and Time of Settlement of Stock Units.....................8
9.7 Death of Recipient.............................................8
9.8 Creditors' Rights..............................................8
ARTICLE 10. PROTECTION AGAINST DILUTION....................................9
10.1 Adjustments....................................................9
10.2 Dissolution or Liquidation.....................................9
10.3 Reorganizations................................................9
ARTICLE 11. DEFERRAL OF AWARDS............................................10
ARTICLE 12. AWARDS UNDER OTHER PLANS......................................10
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 13. LIMITATION ON RIGHTS..........................................10
13.1 Retention Rights..............................................10
13.2 Stockholders' Rights..........................................11
13.3 Regulatory Requirements.......................................11
ARTICLE 14. WITHHOLDING TAXES.............................................11
14.1 General.......................................................11
14.2 Share Withholding.............................................11
ARTICLE 15. FUTURE OF THE PLAN............................................11
15.1 Term of the Plan..............................................11
15.2 Amendment or Termination......................................11
ARTICLE 16. DEFINITIONS...................................................12
ARTICLE 17. EXECUTION.....................................................15
</TABLE>
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McAFEE ASSOCIATES, INC.
1997 STOCK INCENTIVE PLAN
ARTICLE 1. INTRODUCTION
The Plan was adopted by the Board effective June 5, 1997. The purpose
of the Plan is to promote the long-term success of the Company and the creation
of stockholder value by (a) encouraging Employees, Outside Directors and
Consultants to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Employees, Outside Directors and Consultants with
exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares, Stock Units, Options (which may constitute incentive stock
options or nonstatutory stock options) or stock appreciation rights.
The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware (except their choice-of-law provisions).
ARTICLE 2. ADMINISTRATION
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Company, who shall be appointed by the Board. In addition, the composition
of the Committee shall satisfy:
(a) Such requirements as the Securities and Exchange
Commission may establish for administrators acting under plans intended
to qualify for exemption under Rule 16b-3 (or its successor) under the
Exchange Act; and
(b) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify
for exemption under section 162(m)(4)(C) of the Code.
The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not satisfy the
foregoing requirements, who may administer the Plan with respect to Employees
and Consultants who are not considered officers or directors of the Company
under section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all terms of such Awards.
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the
Employees, Outside Directors and Consultants who are to receive Awards under the
Plan, (b) determine the type, number,
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vesting requirements and other features and conditions of such Awards, (c)
interpret the Plan and (d) make all other decisions relating to the operation of
the Plan. The Committee may adopt such rules or guidelines as it deems
appropriate to implement the Plan. The Committee's determinations under the Plan
shall be final and binding on all persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS
3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Options, SARs, Stock Units and Restricted Shares awarded under the Plan shall
not exceed (a) 2,450,000 plus (b) the additional Common Shares described in
Section 3.2. The limitation of this Section 3.1 shall be subject to adjustment
pursuant to Article 10.
3.2 ADDITIONAL SHARES. If Restricted Shares, Stock Units, Options or
SARs granted under this Plan or the Predecessor Plan are forfeited or if Options
or SARs granted under this Plan or the Predecessor Plan terminate for any other
reason before being exercised, then the corresponding Common Shares shall become
available for Awards under this Plan. If Stock Units are settled, then only the
number of Common Shares (if any) actually issued in settlement of such Stock
Units shall reduce the number available under Section 3.1 and the balance shall
again become available for Awards under the Plan. If SARs are exercised, then
only the number of Common Shares (if any) actually issued in settlement of such
SARs shall reduce the number available under Section 3.1 and the balance shall
again become available for Awards under the Plan. The foregoing notwithstanding,
the aggregate number of Common Shares that may be issued under the Plan upon the
exercise of ISOs shall not be increased when Restricted Shares are forfeited.
3.3 DIVIDEND EQUIVALENTS. Any dividend equivalents paid or credited
under the Plan shall not be applied against the number of Restricted Shares,
Stock Units, Options or SARs available for Awards, whether or not such dividend
equivalents are converted into Stock Units.
ARTICLE 4. ELIGIBILITY
4.1 INCENTIVE STOCK OPTIONS. Only Employees who are common-law
employees of the Company, a Parent or a Subsidiary on the date of grant shall be
eligible for the grant of ISOs. In addition, an Employee who owns more than 10%
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Parents or Subsidiaries shall not be eligible for the
grant of an ISO unless the requirements set forth in section 422(c)(6) of the
Code are satisfied.
4.2 OTHER GRANTS. Only Employees, Outside Directors and Consultants
shall be eligible for the grant of Restricted Shares, Stock Units, NSOs or SARs.
4.3 PROSPECTIVE EMPLOYEES AND CONSULTANTS. For purposes of this Article
4, (a) "Employees" shall include prospective Employees to whom Awards are
granted in connection with written offers of employment from the Company, a
Parent or a Subsidiary and
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(b) "Consultants" shall include prospective Consultants to whom Awards are
granted in connection with written offers of engagement from the Company, a
Parent or a Subsidiary. If an ISO is granted to a prospective Employee, the date
when his or her service as an Employee commences shall be deemed to be the date
of grant of such ISO for all purposes under the Plan (including, without
limitation, Section 5.3). No Award granted to a prospective Employee or
prospective Consultant shall become exercisable or vested unless and until his
or her service as an Employee or Consultant commences.
ARTICLE 5. OPTIONS
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
Stock Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a reduction in
the Optionee's other compensation. A Stock Option Agreement may provide that a
new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in the form described in
Section 6.2.
5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10. Options granted to any
Optionee in a single fiscal year of the Company shall not cover more than
1,000,000 Common Shares, except that Options granted to a new Employee in the
fiscal year of the Company in which his or her service as an Employee first
commences shall not cover more than 1,500,000 Common Shares. The limitations set
forth in the preceding sentence shall be subject to adjustment in accordance
with Article 10.
5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price under an ISO shall in no event
be less than 100% of the Fair Market Value of a Common Share on the date of
grant and the Exercise Price under an NSO shall in no event be less than 85% of
the Fair Market Value of a Common Share on the date of grant. In the case of an
NSO, a Stock Option Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the NSO is outstanding.
5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not
be exercisable unless the related SARs are forfeited.
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<PAGE> 8
5.5 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become
exercisable as to all or part of the Common Shares subject to such Option in the
event that a Transfer of Control occurs with respect to the Company, except that
the exercisability of an ISO shall not be accelerated without the Optionee's
written consent. In addition, a separate agreement between the Optionee and the
Company may provide that such Optionee's Options shall become exercisable as to
all or part of the Common Shares subject to such Options in the event that a
Transfer of Control occurs with respect to the Company.
5.6 SUBSTITUTION OF OPTIONS. The Committee may accept the cancellation
of outstanding options granted by another issuer in return for the grant of new
Options under the Plan for the same or a different number of Common Shares and
at the same or a different Exercise Price.
5.7 BUYOUT PROVISIONS. The Committee may at any time (a) offer to buy
out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.
ARTICLE 6. PAYMENT FOR OPTION SHARES
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash or cash equivalents at the
time when such Common Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment
shall be made only pursuant to the express provisions of the applicable
Stock Option Agreement. The Stock Option Agreement may specify that
payment may be made in any form(s) described in this Article 6.
(b) In the case of an NSO, the Committee may at any time
accept payment in any form(s) described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, Common Shares that are already owned by the
Optionee. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan. The Optionee shall
not surrender, or attest to the ownership of, Common Shares in payment of the
Exercise Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.
6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part
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<PAGE> 9
of the Common Shares being purchased under the Plan and to deliver all or part
of the sales proceeds to the Company.
6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to
pledge all or part of the Common Shares being purchased under the Plan to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.
6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note; provided that the par value of the Common Shares being purchased under the
Plan shall be paid in cash or cash equivalents.
6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 SAR AGREEMENT. Each grant of an SAR under the Plan shall be
evidenced by an SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various SAR Agreements entered into under the Plan need not be identical. SARs
may be granted in consideration of a reduction in the Optionee's other
compensation.
7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the number of
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Article 10. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than 1,000,000 Common
Shares, except that SARs granted to a new Employee in the fiscal year of the
Company in which his or her service as an Employee first commences shall not
pertain to more than 1,500,000 Common Shares. The limitations set forth in the
preceding sentence shall be subject to adjustment in accordance with Article 10.
7.3 EXERCISE PRICE. Each SAR Agreement shall specify the Exercise
Price. An SAR Agreement may specify an Exercise Price that varies in accordance
with a predetermined formula while the SAR is outstanding.
7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the
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<PAGE> 10
end of its term in the event of the termination of the Optionee's service. SARs
may be awarded in combination with Options, and such an Award may provide that
the SARs will not be exercisable unless the related Options are forfeited. An
SAR may be included in an ISO only at the time of grant but may be included in
an NSO at the time of grant or thereafter. An SAR granted under the Plan may
provide that it will be exercisable only in the event of a Transfer of Control.
7.5 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting an SAR or thereafter, that such SAR shall become exercisable as
to all or part of the Common Shares subject to such SAR in the event that a
Transfer of Control occurs with respect to the Company. In addition, a separate
agreement between the Optionee and the Company may provide that such Optionee's
SARs shall become exercisable as to all or part of the Common Shares subject to
such SARs in the event that a Transfer of Control occurs with respect to the
Company.
7.6 EXERCISE OF SARS. Upon exercise of an SAR, the Optionee (or any
person having the right to exercise the SAR after his or her death) shall
receive from the Company (a) Common Shares, (b) cash or (c) a combination of
Common Shares and cash, as the Committee shall determine. The amount of cash
and/or the Fair Market Value of Common Shares received upon exercise of SARs
shall, in the aggregate, be equal to the amount by which the Fair Market Value
(on the date of surrender) of the Common Shares subject to the SARs exceeds the
Exercise Price. If, on the date when an SAR expires, the Exercise Price under
such SAR is less than the Fair Market Value on such date but any portion of such
SAR has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion.
7.7 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding SARs (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.
ARTICLE 8. RESTRICTED SHARES
8.1 RESTRICTED STOCK AGREEMENT. Each grant of Restricted Shares under
the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical. Restricted Shares
may be granted in consideration of a reduction in the recipient's other
compensation.
8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of newly issued Restricted Shares, the Award recipient, as a condition to
the grant of such Award, shall be required to pay the Company in cash or cash
equivalents an amount equal to the par value of such Restricted Shares. To the
extent that an Award is granted in the form of Restricted Shares from the
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Company's treasury, no cash consideration shall be required of the Award
recipients. Any amount not paid in cash may be paid with a full-recourse
promissory note.
8.3 VESTING CONDITIONS. Each Award of Restricted Shares may or may not
be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. The
Committee may include among such conditions the requirement that the performance
of the Company or a business unit of the Company for a specified period of one
or more years equal or exceed a target determined in advance by the Committee.
Such performance shall be determined by the Company's independent auditors. Such
target shall be based on one or more of the criteria set forth in Appendix A.
The Committee shall determine such target not later than the 90th day of such
period. In no event shall the number of Restricted Shares which are subject to
performance-based vesting conditions and which are granted to any Participant in
a single calendar year exceed 300,000, subject to adjustment in accordance with
Article 10. A Restricted Stock Agreement may provide for accelerated vesting in
the event of the Participant's death, disability or retirement or other events.
8.4 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting Restricted Shares or thereafter, that all or part of such
Restricted Shares shall become vested in the event that a Transfer of Control
occurs with respect to the Company. In addition, a separate agreement between
the Participant and the Company may provide that all or part of such
Participant's Restricted Shares shall become vested in the event that a Transfer
of Control occurs with respect to the Company.
8.5 VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders. A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends received
in additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to
which the dividends were paid.
ARTICLE 9. STOCK UNITS
9.1 STOCK UNIT AGREEMENT. Each grant of Stock Units under the Plan
shall be evidenced by a Stock Unit Agreement between the recipient and the
Company. Such Stock Units shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan.
The provisions of the various Stock Unit Agreements entered into under the Plan
need not be identical. Stock Units may be granted in consideration of a
reduction in the recipient's other compensation.
9.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of Stock Units, no cash consideration shall be required of the Award
recipients.
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9.3 VESTING CONDITIONS. Each Award of Stock Units may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement. The
Committee may include among such conditions the requirement that the performance
of the Company or a business unit of the Company for a specified period of one
or more years equal or exceed a target determined in advance by the Committee.
Such performance shall be determined by the Company's independent auditors. Such
target shall be based on one or more of the criteria set forth in Appendix A.
The Committee shall determine such target not later than the 90th day of such
period. In no event shall the number of Stock Units which are subject to
performance-based vesting conditions and which are granted to any Participant in
a single calendar year exceed 300,000, subject to adjustment in accordance with
Article 10. A Stock Unit Agreement may provide for accelerated vesting in the
event of the Participant's death, disability or retirement or other events.
9.4 EFFECT OF TRANSFER OF CONTROL. The Committee may determine, at the
time of granting Stock Units or thereafter, that all or part of such Stock Units
shall become vested in the event that a Transfer of Control occurs with respect
to the Company. In addition, a separate agreement between the Participant and
the Company may provide that all or part of such Participant's Stock Units shall
become vested in the event that a Transfer of Control occurs with respect to the
Company.
9.5 VOTING AND DIVIDEND RIGHTS. The holders of Stock Units shall have
no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded
under the Plan may, at the Committee's discretion, carry with it a right to
dividend equivalents. Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Common Share while the Stock Unit
is outstanding. Dividend equivalents may be converted into additional Stock
Units. Settlement of dividend equivalents may be made in the form of cash, in
the form of Common Shares, or in a combination of both. Prior to distribution,
any dividend equivalents which are not paid shall be subject to the same
conditions and restrictions as the Stock Units to which they attach.
9.6 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents. Until an Award of Stock Units is
settled, the number of such Stock Units shall be subject to adjustment pursuant
to Article 10.
9.7 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's beneficiary
or beneficiaries. Each recipient of
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a Stock Units Award under the Plan shall designate one or more beneficiaries for
this purpose by filing the prescribed form with the Company. A beneficiary
designation may be changed by filing the prescribed form with the Company at any
time before the Award recipient's death. If no beneficiary was designated or if
no designated beneficiary survives the Award recipient, then any Stock Units
that become payable after the recipient's death shall be distributed to the
recipient's estate.
9.8 CREDITORS' RIGHTS. A holder of Stock Units shall have no rights
other than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.
ARTICLE 10. PROTECTION AGAINST DILUTION
10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of:
(a) The number of Options, SARs, Restricted Shares and Stock
Units available for future Awards under Article 3;
(b) The limitations set forth in Sections 5.2, 7.2, 8.3 and
9.3;
(c) The number of Common Shares covered by each outstanding
Option and SAR;
(d) The Exercise Price under each outstanding Option and SAR;
or
(e) The number of Stock Units included in any prior Award
which has not yet been settled.
Except as provided in this Article 10, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
10.2 DISSOLUTION OR LIQUIDATION. To the extent not previously exercised
or settled, Options, SARs and Stock Units shall terminate immediately prior to
the dissolution or liquidation of the Company.
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10.3 REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (a) the
continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation, (b) the assumption of the outstanding Awards by the
surviving corporation or its parent or subsidiary, (c) the substitution by the
surviving corporation or its parent or subsidiary of its own awards for the
outstanding Awards, (d) full exercisability or vesting and accelerated
expiration of the outstanding Awards or (e) settlement of the full value of the
outstanding Awards in cash or cash equivalents followed by cancellation of such
Awards.
ARTICLE 11. DEFERRAL OF AWARDS
The Committee (in its sole discretion) may permit or require a
Participant to:
(a) Have cash that otherwise would be paid to such Participant
as a result of the exercise of an SAR or the settlement of Stock Units
credited to a deferred compensation account established for such
Participant by the Committee as an entry on the Company's books;
(b) Have Common Shares that otherwise would be delivered to
such Participant as a result of the exercise of an Option or SAR
converted into an equal number of Stock Units; or
(c) Have Common Shares that otherwise would be delivered to
such Participant as a result of the exercise of an Option or SAR, or
the settlement of Stock Units, converted into amounts credited to a
deferred compensation account established for such Participant by the
Committee as an entry on the Company's books. Such amounts shall be
determined by reference to the Fair Market Value of such Common Shares
as of the date when they otherwise would have been delivered to such
Participant.
A deferred compensation account established under this Article 11 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 11.
ARTICLE 12. AWARDS UNDER OTHER PLANS
The Company may grant awards under other plans or programs. Such awards
may be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all
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purposes under the Plan like Common Shares issued in settlement of Stock Units
and shall, when issued, reduce the number of Common Shares available under
Article 3.
ARTICLE 13. LIMITATION ON RIGHTS
13.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director or Consultant. The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the service of any Employee or
Consultant at any time, with or without cause, subject to applicable laws and a
written employment agreement (if any).
13.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when a stock certificate for such
Common Shares is issued or, if applicable, the time when he or she becomes
entitled to receive such Common Shares by filing any required notice of exercise
and paying any required Exercise Price. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to such time,
except as expressly provided in the Plan.
13.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.
ARTICLE 14. WITHHOLDING TAXES
14.1 GENERAL. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.
14.2 SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash.
ARTICLE 15. FUTURE OF THE PLAN
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15.1 TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on June 5, 1997. The Plan shall remain in effect until it is
terminated under Section 15.2, except that no ISOs shall be granted on or after
the 10th anniversary of the later of (a) the date when the Board adopted the
Plan or (b) the date when the Board adopted the most recent increase in the
number of Common Shares available under Article 3 which was approved by the
Company's stockholders.
15.2 AMENDMENT OR TERMINATION. The Board or the Committee may, at any
time and for any reason, amend or terminate the Plan. An amendment of the Plan
shall be subject to the approval of the Company's stockholders only to the
extent required by applicable laws, regulations or rules. No Awards shall be
granted under the Plan after the termination thereof. The termination of the
Plan, or any amendment thereof, shall not affect any Award previously granted
under the Plan.
ARTICLE 16. DEFINITIONS
16.1 "AFFILIATE" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.
16.2 "AWARD" means any award of an Option, an SAR, a Restricted Share
or a Stock Unit under the Plan.
16.3 "BOARD" means the Company's Board of Directors, as constituted
from time to time.
16.4 "CODE" means the Internal Revenue Code of 1986, as amended. 16.5
"COMMITTEE" means a committee of the Board, as described in Article 2.
16.6 "COMMON SHARE" means one share of the Common Stock of the Company.
16.7 "COMPANY" means McAfee Associates, Inc., a Delaware corporation.
16.8 "CONSULTANT" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.1.
16.9 "EMPLOYEE" means a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.
16.10 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
16.11 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of an SAR, means an amount, as specified in the
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applicable SAR Agreement, which is subtracted from the Fair Market Value of one
Common Share in determining the amount payable upon exercise of such SAR.
16.12 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in The Wall Street Journal. Such determination
shall be conclusive and binding on all persons.
16.13 "ISO" means an incentive stock option described in section 422(b)
of the Code.
16.14 "NSO" means a stock option not described in sections 422 or 423
of the Code.
16.15 "OPTION" means an ISO or NSO granted under the Plan and entitling
the holder to purchase Common Shares.
16.16 "OPTIONEE" means an individual or estate who holds an Option or
SAR.
16.17 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not an
Employee. Service as an Outside Director shall be considered employment for all
purposes of the Plan, except as provided in Section 4.1.
16.18 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date. 16.19 "PARTICIPANT" means an individual or estate who holds an
Award.
16.20 "PLAN" means this McAfee Associates, Inc. 1997 Stock Incentive
Plan, as amended from time to time.
16.21 "PREDECESSOR PLAN" means the McAfee Associates, Inc. 1995 Stock
Incentive Plan, as amended.
16.22 "RESTRICTED SHARE" means a Common Share awarded under the Plan.
16.23 "RESTRICTED STOCK AGREEMENT" means the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Share.
16.24 "SAR" means a stock appreciation right granted under the Plan.
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16.25 "SAR AGREEMENT" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.
16.26 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions pertaining
to his or her Option.
16.27 "STOCK UNIT" means a bookkeeping entry representing the
equivalent of one Common Share, as awarded under the Plan.
16.28 "STOCK UNIT AGREEMENT" means the agreement between the Company
and the recipient of a Stock Unit which contains the terms, conditions and
restrictions pertaining to such Stock Unit.
16.29 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
16.30 "TRANSFER OF CONTROL" shall mean:
(a) The direct or indirect sale or exchange by the
stockholders of the Company of all or substantially all of the voting
stock of the Company wherein the stockholders of the Company
immediately before such sale or exchange do not retain in substantially
the same proportions as their ownership of shares of the Company's
voting stock immediately before such event, directly or indirectly
(including, without limitation, through their ownership of shares of
the voting stock of a corporation which, as a result of such sale or
exchange, owns the Company either directly or through one or more
subsidiaries), at least a majority of the beneficial interest in the
voting stock of the Company immediately after such sale or exchange;
(b) A merger or consolidation wherein the stockholders of the
Company immediately before such merger or consolidation do not retain
in substantially the same proportions as their ownership of shares of
the Company's voting stock immediately before such event, directly or
indirectly (including, without limitation, through their ownership of
shares of the voting stock of a corporation which, as a result of such
merger or consolidation, owns the Company either directly or through
one or more subsidiaries), at least a majority of the beneficial
interest in the voting stock of the Company immediately after such
merger or consolidation;
(c) The sale, exchange, or transfer of all or substantially
all of the assets of the Company (other than a sale, exchange, or
transfer to one or more corporations (the
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"Transferee Corporation(s)") wherein the stockholders of the Company
immediately before such sale, exchange, or transfer retain in
substantially the same proportions as their ownership of shares of the
Company's voting stock immediately before such event, directly or
indirectly (including, without limitation, through their ownership of
shares of the voting stock of a corporation which owns the Transferee
Corporation(s) either directly or through one or more subsidiaries), at
least a majority of the beneficial interest in the voting stock of the
Transferee Corporation(s) immediately after such event; or
(d) A liquidation or dissolution of the Company.
ARTICLE 17. EXECUTION
To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to execute this document in the name of the Company.
McAFEE ASSOCIATES, INC.
By:
---------------------------
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McAFEE ASSOCIATES, INC. 1997 STOCK INCENTIVE PLAN
APPENDIX A
PERFORMANCE CRITERIA
Cash Flow Expense Reduction
Earnings per Share Growth in Bookings
Gross Margin Growth in Revenue
Net Income Stock Price Increase
Operating Income
Operating Margin
Pre-Tax Profit
Return on Assets
Return on Capital
Return on Stockholder Equity
Growth in any of the above
measures
<PAGE> 21
McAFEE ASSOCIATES, INC. 1997 STOCK INCENTIVE PLAN
APPENDIX B
OPTION GRANTS IN THE NETHERLANDS
This Appendix B to the McAfee Associates, Inc. 1997 Stock Incentive
Plan (the "Plan") sets forth special rules under which Options may be granted to
Employees and Consultants in The Netherlands who are subject to Dutch tax laws
on the date of option grant, as specified in the applicable Stock Option
Agreement (the "Date of Option Grant"). Such Employees and Consultants are
referred to herein as the "Dutch Residents." To the extent that the rules in
this Appendix B are not consistent with the provisions of the Plan, this
Appendix B shall govern. In all other respects, the provisions of the Plan
(including its definitions) shall apply to this Appendix B.
1. EXERCISE PRICE. The Exercise Price of an Option granted to a Dutch
Resident, as specified in the applicable Stock Option Agreement (the "Exercise
Price"), shall not be less than the Fair Market Value of a Common Share on the
Date of Option Grant.
2. EXERCISABILITY. Options granted to a Dutch Resident shall be
exercisable immediately upon grant.
3. RIGHT OF REPURCHASE. If a Dutch Resident ceases to be an Employee or
Consultant for any reason before the fourth anniversary of the Date of Option
Grant, the Company shall have the right to repurchase all or a portion of the
Common Shares (if any) that such Dutch Resident acquired by exercising such
Option. The repurchase price per share shall be equal to the Exercise Price per
share. Prior to the first anniversary of the Date of Option Grant, the right of
repurchase shall apply to all of the Common Shares that the Dutch Resident
acquired by exercising the Option. After 12 months of continuous service as an
Employee or Consultant following the Date of Option Grant, the right of
repurchase shall lapse with respect to 25% of the Common Shares subject to the
Option. Thereafter, the right of repurchase shall lapse with respect to an
additional 2.08333% of the Common Shares subject to the Option for each
additional month of continuous service as an Employee or Consultant. A Dutch
Resident shall not sell, pledge or otherwise transfer the Common Shares that he
or she acquired by exercising an Option as long as such Common Shares remain
subject to the Company's right of repurchase.
4. EXPIRATION DATE. All Options granted to Dutch Residents shall expire
on the fifth anniversary of the Date of Option Grant.
<PAGE> 1
EXHIBIT 5.1
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August 8, 1997
VIA OVERNIGHT COURIER
McAfee Associates, Inc.
2710 Walsh Avenue, Suite 200
Santa Clara, California 95051
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to be filed by you
with the Securities and Exchange Commission on or about August 8, 1997, in
connection with the registration under the Securities Act of 1933, as amended,
of 2,450,000 shares of Common Stock (the "Shares") to be issued under the
Company's 1997 Stock Incentive Plan (the "Plan").
As your legal counsel, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by you in connection with the
sale and issuance of the Shares. It is our opinion that the Shares, when issued
and sold in the manner referred to in the Plan, and pursuant to the agreements
which accompany the Plan, will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to said Registration
Statement and further consent to the use of our name wherever appearing in said
Registration Statement and any amendments thereto.
Sincerely,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated January 20, 1997, except for the
matters discussed in Note 11 for which the date is March 1, 1997, on our audits
of the financial statements of McAfee Associates, Inc.
/s/ COOPERS & LYBRAND
Coopers & Lybrand
San Jose, California
August 8, 1997
