<PAGE> 1
As filed with the Securities and Exchange Commission on June 1, 1998
Registration No. 333-49297
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
NETWORKS ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0316593
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3965 Freedom Circle
Santa Clara, California 95054
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(408) 988-3832
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
MAGIC SOLUTIONS INTERNATIONAL, INC. 1996 INCENTIVE PROGRAM
(Full title of the plan)
---------------------
William L. Larson
Chief Executive Officer
Networks Associates, Inc.
3965 Freedom Circle
Santa Clara, California 95054
(408) 988-3832
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------
Copy to:
Jeffrey D. Saper, Esq.
Kurt J. Berney, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
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<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Offering Registration
to be Registered Registered(1) Per Share(2) Price(3) Fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (par value $0.01
per share) to be issued under the
Magic Solutions International, Inc.
1996 Incentive Program. 18,000 $38.8835 $699,903 $212.07
=============================================================================================================
</TABLE>
(1) Represents the number of shares of the Registrant's Common Stock which may
be issued to the Registrant's employees in the form of incentive stock
options pursuant to the Magic Solutions International, Inc. 1996 Incentive
Program (the "Program"), attached hereto as Exhibit 4.1.
(2) The Proposed Maximum Offering Price Per Share is calculated pursuant to
Rule 457(h) under the Securities Act of 1933, as amended, and as such, is
based upon the exercise prices of each outstanding option under the
Program. The weighted average exercise price of the shares subject to
outstanding options under the Program is $33.8835 per share.
<PAGE> 3
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 Networks 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, 1997, filed pursuant to 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, 1998, filed pursuant to the Exchange Act.
(c) The Company's Current Reports on Form 8-K, dated April 29, 1998, April
3, 1998, March 25, 1998, February 25, 1998, February 12, 1998, February 10,
1998, December 11, 1997, November 24, 1997, and March 14, 1997, filed pursuant
to the Section 12 of the Exchange Act.
(d) 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, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof, 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 under this registration statement, shall be deemed to be incorporated by
reference herein 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 Second Restated 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.
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<PAGE> 4
The Company's Restated 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 Restated Bylaws covers at least negligence and gross negligence on the part
of indemnified parties. The Company's Restated Bylaws also permit the Company to
secure insurance on behalf of any officer, 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 Restated
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 Magic Solutions International, Inc. 1996 Incentive Program.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants.
23.2 Wilson Sonsini Goodrich & Rosati, Professional Corporation (included 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.
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<PAGE> 5
(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.
(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 indemnification 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.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 June 1, 1998.
NETWORKS ASSOCIATES, INC.
By: /s/ Prabhat K. Goyal
-----------------------------------------
Prabhat K. Goyal,
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Prabhat K. Goyal, his attorney-in-fact,
with the power of substitution, for him in any and all capacities, to sign any
amendment 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
said attorney-in-fact, or his substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed on June 1, 1998 by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------- ------------------------------------
<S> <C>
* Chairman and Chief Executive Officer
- ---------------------------------
William L. Larson
/s/ Prabhat K. Goyal Chief Financial Officer
- ---------------------------------
Prabhat K. Goyal
* President and Director
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Leslie G. Denend
* Director
- ---------------------------------
Edwin L. Harper
* Director
- ---------------------------------
John Bolger
* Director
- ---------------------------------
Harry Saal
*By: /s/ Prabhat K. Goyal
- ---------------------------------
Prabhat K. Goyal
as Attorney-in-Fact
</TABLE>
II-4
<PAGE> 7
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- ----------------------------------------------------------------------
<S> <C>
4.1 Magic Solutions International, Inc. 1996 Incentive Program.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
23.1 Consent of Coopers & Lybrand L.L.P., independent accountants.
23.2 Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in
Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
</TABLE>
II-5
<PAGE> 1
EXHIBIT 4.1
MAGIC SOLUTIONS INTERNATIONAL, INC.
1996 INCENTIVE PROGRAM
AS AMENDED JULY 24, 1997
The 1996 Incentive Program (the "Program") provides for the grant
to officers, directors and employees of Magic Solutions International, Inc. and
its direct and indirect subsidiaries (collectively, the "Company"), and certain
consultants to the Company, with certain rights to acquire shares of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
Company believes that this Program will cause those persons to contribute
materially to the growth and success of the Company, thereby benefitting its
stockholders.
1. Administration.
The Program shall be administered and interpreted by the Board of
Directors of the Company or by one or more Committees appointed by the Board of
Directors of the Company from among its members (the "Plan Administrator"). The
Board of Directors may appoint different Committees to handle different duties
under the Program. The Plan Administrator's decisions shall be final and
conclusive with respect to the interpretation and administration of the Program
and any Grant made under it.
2. Grants.
Incentives under the Program shall consist of incentive stock
options, non-qualified stock options, stock appreciation rights in tandem with
stock options or freestanding, and restricted stock grants (any of the
foregoing, in any combination, collectively, "Grants"). All Grants shall be
subject to the terms and conditions set out herein and to such other terms and
conditions consistent with this Program as the Plan Administrator deems
appropriate. The Plan Administrator shall approve the form and provisions of
each Grant. Grants. under a particular section of the Program need not be
uniform, and Grants under two or more sections may be combined in one
instrument.
3. Eligibility for Grants
Grants may be made to any employee, officer, key executive,
director, professional or administrative employee, consultant or advisor to the
Company or any subsidiary of the Company selected by the Plan Administrator to
receive Grants under the Program (persons so selected, the "Grantees").
4. Shares Available for Grant.
(a) Shares Subject to Issuance or Transfer. Subject to adjustment
as provided in Section 4(b), the aggregate number of shares of Common Stock (the
"Shares") that may be issued or
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<PAGE> 2
transferred under the Program is 2,500,000 Shares plus, (i) any Shares which are
forfeited under the Program after the Program becomes effective; plus (ii) the
number of Shares repurchased by the Company in the open market and otherwise
with an aggregate price no greater than the cash proceeds received by the
Company from the sale of Shares under the Program; plus (iii) any Shares
surrendered to the Company in payment of the exercise price of options issued
under the Program. However, no award may be issued that would bring the total of
all outstanding awards under the Program to more than 30% of the total number of
Shares of Common Stock of the Company at the time outstanding. The Shares may be
authorized but unissued Shares or Treasury Shares. The number of Shares
available for Grants at any given time shall be reduced by the aggregate of all
Shares previously issued or transferred pursuant to the Program plus the
aggregate of all Shares which may become subject to issuance or transfer under
then-outstanding and then-currently exercisable Grants. The maximum number of
Shares for which options may be granted under the Program to any person during
any calendar year is 500,000.
(b) Adjustments Upon Changes in Capitalization or Other Events.
Upon changes in the Common Stock of the Company by reason of a stock dividend,
stock split, reverse split, recapitalization, merger, consolidation, combination
or exchange of shares, separation, reorganization or liquidation, the number and
class of Shares available under the Program as to which Grants may be made (both
in the aggregate and to any one Grantee), the number and class of Shares under
each then-outstanding Stock Option and the Option Price per share of such
options, and the terms of stock appreciation rights shall be correspondingly
adjusted by the Plan Administrator, such adjustments to be made in the case of
outstanding Stock Options without change in the total price applicable to such
options. In the event of a merger, consolidation, combination, reorganization or
other transaction in which the Company will not be the surviving corporation, or
in which the Company becomes a wholly-owned subsidiary of the new corporation, a
Grantee of Stock Options under the Program shall be entitled to options on that
number of shares of stock in the new corporation which the Grantee would have
received had the Grantee exercised all of the unexercised options available to
the Grantee under the Program, whether or not then exercisable, at the instant
immediately prior to the effective date of such transaction, and, if such
unexercised options had related stock appreciation rights, the Grantee also will
receive new stock appreciation rights related to the new options. Thereafter,
adjustments as provided above shall relate to the options or stock appreciation
rights of the new corporation. Except as otherwise specifically provided in the
instrument of Grant, in the event of a Change in Control (as defined below),
merger, consolidation, combination, reorganization or other transaction in which
the shareowners of the Company will receive cash or securities (other than
Common Stock) or in the event that an offer is made to the holders of Common
Stock of the Company to sell or exchange such Common Stock for cash, securities
or stock of another corporation and such offer, if accepted, would result in the
offeror becoming the owner of (a) at least 50% of the outstanding Common Stock
of the Company or (b) such lesser percentage of the outstanding Common Stock
which the Plan Administrator in its sole discretion determines will materially
adversely affect the market value of the Common Stock after the tender or
exchange offer, the Plan Administrator shall have the right, but not the
obligation, in the exercise of its business judgment, prior to the shareowners'
vote on such transaction or prior to the expiration date (without extensions) of
the tender or exchange offer, (i) accelerate the time of exercise so that all
Stock Options and stock appreciation rights which are outstanding shall become
immediately exercisable in full, and all Restricted Stock Grants shall
immediately vest in full, without regard to any limitations of time, performance
or amount otherwise contained in the Program or in the instruments of Grant
and/or
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<PAGE> 3
(ii) determine that the options and stock appreciation rights shall be adjusted
and make such adjustments by substituting for Common Stock of the Company
subject to options and stock appreciation rights, common stock of the surviving
corporation or offeror if such stock of such corporation is publicly traded or,
if such stock is not publicly traded, by substituting common stock of a parent
of the surviving corporation or offeror if the stock of such parent is publicly
traded, in which event the aggregate option price shall remain the same and the
number of shares subject to outstanding grants shall be the number of shares
which could have been purchased on the closing day of such transaction or the
expiration date of the offer with the proceeds which would have been received by
the Grantee if the option had been exercised in full prior to such transaction
or expiration date and the Grantee had exchanged all of such shares in the
transaction or sold or exchanged all of such shares pursuant to the tender or
exchange offer, and if any such option has related stock appreciation rights,
the stock appreciation rights shall likewise be adjusted. For purposes of this
Section 4(b), "Change in Control" means (i) any "person", as such term is used
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the shareowners of the Company in
substantially the same proportion as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule l3d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then outstanding
securities without the approval of the Board of Directors of the Company; (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (i), (iii), or (iv) of this sentence)
whose election by the Board or nomination for election by the Company's
shareowners was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved cease for
any reason to constitute at least a majority thereof; (iii) the shareowners of
the Company approve a merger or consolidation of the Company with any other
company, other than (1) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (2) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than 50% of the combined voting power of the Company's then outstanding
securities; or (iv) the shareowners of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets and properties.
5. Stock Options.
The Plan Administrator may grant options qualifying as incentive
stock options under the Internal Revenue Code of 1986, as amended ("Incentive
Stock Options"), or nonqualified options not entitled to special tax treatment
under Section 422 of the Internal Revenue Code of 1986 (the "Code"), as amended
(collectively, "Stock Options"). The following provisions of this Section 5 are
applicable to Stock Options:
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<PAGE> 4
(a) Exercise of Option. A Grantee may exercise a Stock Option by
delivering a notice of exercise to the Company, either with or without
accompanying payment of the option price (the "Option Price"). The notice of
exercise, once delivered, shall be irrevocable.
(b) Satisfaction of Option Price. The Grantee shall pay the
Option Price in cash or by delivering shares of Common Stock already owned by
the Grantee and having a Fair Market Value on the date of exercise equal to the
Option Price, or a combination of cash and Shares. The Grantee shall pay the
Option Price not later than thirty (30) days after the date of a statement from
the Company following exercise setting forth the Option Price, Fair Market Value
of Common Stock on the exercise date, the number of shares of Common Stock that
may be delivered in payment of the Option Price, and the amount of withholding
tax due, if any. If the Grantee fails to pay the Option Price within the thirty
(30) day period, the Plan Administrator shall have the right to take whatever
action it deems appropriate, including voiding the option exercise. The Company
shall not issue or transfer shares of Common Stock upon exercise of a Stock
Option until the Option Price is fully paid.
(c) Share Withholding. With respect to any non-qualified option
or SAR (as defined below), the Plan Administrator may, in its discretion and
subject to such rules as the Plan Administrator may adopt, permit the Grantee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the exercise of the non-qualified option or SAR by electing to
have the Company withhold shares of Common Stock having a Fair Market Value
equal to the amount of the withholding tax. Notwithstanding the foregoing, as a
condition of the Grant of any Stock Option or SAR to any officer or director of
the Company subject to the reporting requirements (a "Reporting Person") of
Section 16 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Plan Administrator shall require, upon the exercise of
any Stock Option or SAR by any Reporting Person, at a time when the Company
shall be required to file periodic reports under Section 13 of the Exchange Act,
that the number of shares of Common Stock otherwise issuable upon the exercise
of such Stock Option or SAR shall be reduced by the number of shares of Common
Stock having an aggregate Fair Market Value equal to the amount of the Reporting
Person's liability for any and all taxes required by law to be withheld.
(d) Price and Term. The Option Price per share, term and other
provisions of Stock Options granted under the Program shall be specified by the
Grant, as limited, in the case of Incentive Stock Options, by the provisions of
Section 5(e) below, if granted pursuant to such Section. In addition, the Plan
Administrator may prescribe such other conditions as it may deem appropriate,
which conditions shall be specified in the instrument of Grant.
(e) Limits on Incentive Stock Options. The aggregate fair market
value of the stock covered by Incentive Stock Options granted under the Program
or any other stock option plan of the Company or any subsidiary or parent of the
Company that become exercisable for the first time by any employee in any
calendar year shall not exceed $100,000. The aggregate Fair Market Value will be
determined at the time of grant. The period for exercise of an Incentive Stock
Option shall not exceed ten (10) years from the date of the Grant (or five years
if the Grantee is also a 10% stockholder). The Option Price at which Common
Stock may be purchased by the Grantee under an Incentive Stock Option shall be
the Fair Market Value (or 110% of the Fair Market Value if the Grantee is a 10%
stockholder)
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<PAGE> 5
of the Common Stock on the date of the Grant. Incentive Stock Options may only
be granted to employees of the Company or any subsidiary or parent of the
Company. Incentive Stock Options by their terms shall not be transferable by the
Grantee other than by the laws of descent and distribution, and shall be
exercisable, during the lifetime of the Grantee, only by the Grantee.
(f) Restored Options. Stock Options granted under the Program
may, with the Plan Administrator's permission, include the right to acquire a
restored option (a "Restored Option"). If a Stock Option grant contains a
Restored Option feature and if a Grantee pays all or part of the Option Price of
such Stock Option with shares of Common Stock held by the Grantee, then upon
exercise of such Stock Option the Grantee shall be granted a Restored Option to
purchase, at the Fair Market Value of the Common Stock as of the date of the
grant of the Restored Option, the number of shares of Common Stock of the
Company equal to the sum of the number of whole shares used by the Grantee in
payment of the Option Price and the number of whole shares, if any, withheld by
the Company as payment for withholding taxes. A Restored Option may be exercised
between the date of grant and the date of expiration, which will be the same as
the date of expiration of the Stock Option to which such Restored Option is
related.
6. Stock Appreciation Right.
The Plan Administrator may grant a Stock Appreciation Right
("SAR") either independently or in conjunction with any Stock Option granted
under the Program. The following provisions are applicable to each SAR:
(a) Options to Which Right Relates. Each SAR which is issued in
conjunction with a Stock Option shall specify the Stock Option to which the SAR
is related, together with the Option Price and number of option shares subject
to the SAR at the time of its grant.
(b) Requirement of Employment. An SAR may be exercised only while
the Grantee is in the employment of the Company, except that the Plan
Administrator may provide for partial or complete exceptions to this requirement
as it deems equitable.
(c) Exercise. A Grantee may exercise an SAR in whole or in part
by delivering a notice of exercise to the Company, except that the Plan
Administrator may provide for partial or complete exceptions to this requirement
as it deems equitable.
(d) Payment and Form of Settlement. If a Grantee exercises an SAR
which is issued in conjunction with a Stock Option, he shall receive the
aggregate of the excess of the fair market value of each share of Common Stock
with respect to which the SAR is being exercised over the Option Price of each
such share. Payment, in any event, may be made in cash, Common Stock or a
combination of the two, in the discretion of the Plan Administrator. Fair Market
Value shall be determined as of the date of exercise.
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<PAGE> 6
(e) Expiration and Termination. Each SAR shall expire on a date
determined by the Plan Administrator at the time of grant. If a Stock Option is
exercised in whole or in part, any SAR related to the Shares purchased in
connection with such exercise shall terminate immediately.
7. Restricted Stock Grants.
The Plan Administrator may issue or transfer shares of Common
Stock ("Restricted Stock") to a Grantee under a Restricted Stock Grant. Shares
of Restricted Stock are subject to forfeiture unless and until specified
employment vesting and/or performance vesting conditions are met, as determined
by the Plan Administrator. Until the shares vest or are forfeited, as the case
may be, the Grantee shall be entitled to vote the shares and to receive any
dividends paid. The following provisions are applicable to Restricted Stock
Grants:
(a) Requirement of Employment. If the Grantee's employment
terminates prior to the fulfillment of the conditions for vesting of the
Restricted Stock, as set forth in the specific instrument of Grant, all shares
of Restricted Stock held by him or her and still subject to restriction will be
forfeited and must be returned immediately to the Company. However, the Plan
Administrator may provide for partial or complete exceptions to this requirement
as it deems equitable.
(b) Restrictions of Transfer and Legend on Stock Certificate.
Prior to the fulfillment of the conditions for vesting, a Grantee may not sell,
assign, transfer, pledge, or otherwise dispose of the shares of Common Stock
except to a Successor Grantee under Section 9(a). Each certificate for shares
issued or transferred under a Restricted Stock Grant shall contain a legend
giving appropriate notice of the restrictions applicable to the Grant. The Plan
Administrator may, in its sole discretion, require that such certificates be
placed into escrow with the Company until vesting.
(c) Lapse of Restrictions. All restrictions imposed under a
Restricted Stock Grant shall lapse upon the fulfillment of the conditions for
vesting set forth in the instrument of Grant provided that all of the conditions
stated in Sections 7(a) and (b) have been met as of the date of such lapse. The
Grantee shall then be entitled to have the legend removed from the certificate.
8. Reorganization, Merger or Consolidation. In the event of a
"Change in Control Transaction" (as defined below) under the terms of which
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share of Common Stock surrendered in the Change
in Control Transaction (the "Per Share Transaction Price"), the Board of
Directors of the Company may, in its discretion, provide for a cash payment to
the holders of each Stock Option then vested and exercisable but not yet
exercised (a "Vested Operation") equal to the product of (i) the number of
shares of Common Stock subject to such Vested Option multiplied by (ii) the
excess, if any, of the Per Share Transaction Price over the exercise price per
share of such Vested Option, in exchange for the termination of such Vested
Option. The Board of Directors of the Company may, in its discretion, provide
that a portion of the foregoing cash payment be deposited into an escrow account
in connection with the Change in Control Transaction or otherwise treated in the
same manner as cash payments for Common Stock. For purposes of this Section 8, a
"Change in Control Transaction" shall mean a reorganization, merger or
consolidation of the Company with one or more other corporations which would
result in the acquisitions of more that 50% of the combined voting power of the
Company's then outstanding securities.
9. Amendment and Termination of the Program.
(a) Amendment. The Board of Directors of the Company may from
time to time amend, alter, suspend or discontinue the Program, subject to any
requirement of stockholder approval required by applicable law, rule or
regulation, including Section 162(m) of the Code or, if the Common Stock is then
listed or admitted for trading on any United States securities exchange or on
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), any requirement for stockholder approval required under the rules of
such exchange or NASDAQ, as the case may be; provided, however, that no
amendment shall be made without stockholder approval if such amendment would (1)
increase the maximum number of shares of Common Stock available for issuance
under this Program (subject to Section 4(b)), (2) reduce the minimum Option
Price in the case of an option or the base price in the case of an SAR, (3)
effect any change inconsistent with Section 422 of the Code or (4) extend the
term of this Program.
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<PAGE> 7
(b) Termination of the Program. The Program shall terminate on
the tenth anniversary of its effective date unless terminated earlier by the
Board or unless extended by the Board.
(c) Termination and Amendment of Outstanding Grants. A
termination or amendment of the Program that occurs after a Grant is made shall
not result in the termination or amendment of the Grant unless the Grantee
consents or unless the Plan Administrator acts under Section 10(d). The
termination of the Program shall not impair the power and authority of the Plan
Administrator with respect to outstanding Grants. Whether or not the Program has
terminated, an outstanding Grant may be terminated or amended under Section
10(d) or may be amended by agreement of the Company and the Grantee on terms
consistent with the Program.
10. General Provisions.
(a) Prohibitions Against Transfer. Only a Grantee or his or her
authorized representative may exercise rights under a Grant. Such persons may
not transfer those rights, except upon the express written consent of the
Company, which may be granted or denied in the Company's discretion. Except as
otherwise expressly provided herein or in the instrument of grant, when a
Grantee dies, the personal representative or other person entitled under a Grant
under the Program to succeed to the rights of the Grantee ("Successor Grantee")
may exercise the rights. A Successor Grantee must furnish proof satisfactory to
the Plan Administrator of his other right to receive the Grant under the
Grantee's will or under the applicable laws of descent and distribution.
(b) Substitute Grants. The Plan Administrator may make a Grant to
an employee of another corporation who becomes an Eligible Grantee by reason of
a corporate merger, consolidation, acquisition of stock or property, share
exchange, reorganization or liquidation involving the Company in substitution
for a stock option, stock appreciation right, performance award, or restricted
stock grant previously granted by such corporation (the "Original Incentives").
The terms and conditions of the substitute Grant may vary from the terms and
conditions required by the Program and from those of the Original Incentives.
The Plan Administrator shall prescribe the exact provisions of the substitute
Grants, preserving where possible the provisions of the Original Incentives.
(c) Subsidiaries. The term "subsidiary" means a corporation in
which the Company owns directly or indirectly 50% or more of the voting power.
(d) Compliance with Law. The Program, the exercise of Grants, and
the obligations of the Company to issue or transfer shares of Common Stock under
Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. The Plan Administrator may
revoke any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation. The Plan
Administrator may also adopt rules regarding the withholding of taxes on payment
to Grantees.
(e) Ownership of Stock. A Grantee or Successor Grantee shall have
no rights as a stockholder of the Company with respect to any Shares covered by
a Grant until the Shares are issued or transferred to the Grantee or Successor
Grantee on the Company's books.
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<PAGE> 8
(f) No Right to Employment. The Program and the Grants under it
shall not confer upon any Grantee the right to continue in the employment of the
Company or affect in any way the right of the Company to terminate the
employment of a Grantee at any time.
(g) Effective Date of the Program. The Program shall become
effective upon its approval by the Company's stockholders.
(h) Fair Market Value. For the purposes of the Program, the term
Fair Market Value means, as of any date, the closing price of a share of Common
Stock of the Company on such date. The closing price shall be (i) if the Common
Stock is then listed or admitted for trading on any national securities
exchange, or if not so listed or admitted for trading, is listed or admitted for
trading on NASDAQ, the last sale price of the Common Stock, regular way, or the
mean of the bid and asked prices thereof for any trading day on which no such
sale occurred, in each case as officially reported on the principal securities
exchange on which the Common Stock is listed or admitted for trading or on
NASDAQ, as the case may be, or (ii) if not so listed or admitted for trading on
a national securities exchange or NASDAQ, the mean between the closing high bid
and low asked quotations for the Common Stock in the over-the-counter market as
reported by NASDAQ, or any similar system for the automated dissemination of
securities prices then in common use, if so quoted, as reported by any member
firm of the New York Stock Exchange selected by the Company; provided, however,
that if, by reason of extended or continuous trading hours on any exchange or in
any market or for any other reason, the time, with respect to any trading day,
of the close of trading for the purpose of determining the "last sale price" or
the "closing" bid and asked prices is not objectively determinable, the time on
such trading day used for the purpose of reporting any compilation of last sale
prices or closing bid and asked prices in The Wall Street Journal shall be the
time on such trading day as of which the "last sale price" or "closing" bid and
asked prices are determined for purposes of this definition. If the Common Stock
is quoted on a national securities or central market system in lieu of a market
or quotation system described above, the closing price shall be determined in
the manner set forth in clause (i) of the preceding sentence if actual
transaction are reported, and in the manner set forth in clause (ii) of the
preceding sentence if bid and asked quotations are reported but actual
transactions are not. If on the date in question, there is no exchange or
over-the-counter market for the Common Stock, the "fair market value" of such
Common Stock shall be determined by the Plan Administrator acting in good faith.
(i) Application of Funds. The proceeds received by the Company
from the issuance of Grants pursuant to the Program will be used for general
corporate purposes.
(j) No Obligation to Exercise Option. The granting of an option
to any Grantee under the Program shall impose no obligation upon such Grantee to
exercise such option.
(k) Severability. If any provision of the Program, or any term or
condition of any Grant granted or form executed or to be executed thereunder, or
any application thereof to any person or circumstances is invalid, such
provision, term, condition or application shall to that extent be void (or, in
the discretion of the Plan Administrator, such provision, term or condition may
be amended so as to avoid such invalidity or failure), and shall not affect
other provisions, terms or conditions or applications thereof, and to this
extent such provisions, terms and conditions are severable.
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<PAGE> 9
(l) Instrument of Grant. Each Grant under this Program shall be
evidenced by an agreement (i.e., an instrument of Grant) setting forth the terms
and conditions applicable to such Grant. No Grant shall be valid until an
agreement is executed by the Company and the recipient of such award and, upon
execution by each party and delivery of the agreement to the Company, such award
shall be effective as of the effective date set forth in the Agreement.
(m) Restricted Shares. Each award made hereunder shall be subject
to the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
(n) Program Controls. In the case of any conflict or
inconsistency between the terms of this Program and the terms of any instrument
of Grant, the terms of this Program will control, unless the instrument of grant
expressly provides that the terms of such instrument of grant will control.
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EXHIBIT 5.1
June 1, 1998
Networks Associates, Inc.
3965 Freedom Circle
Santa Clara, CA 95051
RE: POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have examined the Post-Effective Amendment No. 1 to the Registration
Statement on Form S-8 to be filed by you with the Securities and Exchange
Commission on or about June 1, 1998 (the "Amendment"), in connection with the
registration under the Securities Act of 1933, as amended, of 18,000 shares of
your Common Stock to be issuance under the Magic Solutions International, Inc.
1996 Incentive Program (the "Plan") (collectively the "Shares"). As legal
counsel for Networks Associates, Inc., 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 under the Plan.
It is our opinion that, when issued and sold in the manner referred to
in the Plan, the Shares will be legally and validly issued, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments to it.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
<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. 333-49297) or our report dated January 20,
1998, except for the matters discussed in Notes 14 and 16, as to which the date
is February 13, 1998, on our audits of the consolidated financial statements of
Networks Associates, Inc.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
San Jose, California
June 1, 1998
