<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 16, 1999
REGISTRATION NO. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NETWORKS ASSOCIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 77-0316593
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
3965 FREEDOM CIRCLE
SANTA CLARA, CALIFORNIA 95054
(408) 988-3832
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
1999 NONSTATUTORY STOCK PLAN
1997 NON-OFFICER STOCK PLAN
(Full title of the plans)
William L. Larson
President and Chief Executive Officer
Network 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. and Kurt J. Berney, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
Title of Securities to be Registered Amount to Proposed Maximum Proposed Maximum Amount of
be Registered Offering Price Aggregate Offering Registration
Per Share Price* Fee*
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock to be issued under the
1999 Nonstatutory Stock Plan 1,000,000 $13.16 $13,160,000 $ 3,658.48
Common Stock to be issued under the
McAfee Associates, Inc. 1997
Non-Officer Stock Plan** 3,000,000 $13.16 $39,480,000 $10,975.44
Total 4,000,000 $52,640,000 $14,633.92
- ------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------
* Estimated solely for the purpose of calculating the registration fee on the
basis of $13.16 per share, the average of the high and low prices for the
Common Stock on June 15, 1999 as reported by NASDAQ.
** Number of shares after giving appropriate effect to the 3-for-2 Stock
Split, on May 29, 1998, effected by a stock dividend
<PAGE> 3
REGISTRATION STATEMENT ON FORM S-8
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Security and Exchange Commission (the "Commission") allows us to
"incorporate by reference" the information we file with them, which means that
we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of
this prospectus, and later information filed with the Commission will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the Commission under Section 13a, 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until our offering is
completed.
(1) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1999 filed with the Commission on May 13, 1999;
(2) Our Annual Report on Form 10-K for the year ended December 31, 1998;
as amended on Form 10-K/A, filed with the Commission on April 30,
1999;
(3) Our Quarterly Report on Form 10-Q for the quarter ended September 30,
1998; as amended on Form 10-Q/A, filed with the Commission on April
15, 1999;
(4) Our Quarterly Report on Form 10-Q for the quarter ended June 30, 1998;
as amended on Form 10-Q/A, filed with the Commission on April 15,
1999;
(5) Our Quarterly Report on Form 10-Q for the quarter ended March 31,
1998; as amended on Form 10-Q/A, filed with the Commission on April
15, 1999;
(6) Our Current Report on Form 8-K, filed with the Commission on January
14, 1999;
(7) Our Current Report on Form 8-K, filed with the Commission on November
24, 1998;
(8) Our Current Report on Form 8-K, filed with the Commission on October
22, 1998;
(9) Our Current Report on Form 8-K, filed with the Commission on August
14, 1998;
(10) Our Current Report on Form 8-K, filed with the Commission on June 9,
1998; as amended on Form 8-K/A, filed with the Commission on July 1,
1998;
(11) Our Current Report on Form 8-K, filed with the Commission on April 3,
1998;
(12) Our Current Report on Form 8-K, filed with the Commission on March 25,
1998; Our Current Report on Form 8-K, filed with the Commission on
February 10, 1998; as amended on Form 8-K/A, filed with the Commission
on February 25, 1998; and
(13) The description of our Common Stock contained in our Registration
Statement on Form 8-A, filed on August 21, 1992, including any
amendments or reports filed for the purpose of updating such
description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Prabhat K. Goyal
Vice President of Administration and Chief Financial Officer
Network Associates, Inc.
3965 Freedom Circle
Santa Clara, CA 95054
(408) 988-3932
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have authorized no
one to provide you with different information. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or the prospectus supplement is
accurate as of any date other than the date on the front of the document.
<PAGE> 4
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 Registrant'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.
The Registrant's Restated Bylaws provide that the Registrant shall
indemnify its directors and officers and may indemnify its employees and other
agents to the fullest extent permitted by law. The Registrant believes that
indemnification under its Restated Bylaws covers at least negligence and gross
negligence on the part of indemnified parties. The Registrant's Restated Bylaws
also permit the Registrant 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 Registrant would have the
power to indemnify him or her against such liability under the General
Corporation Law of Delaware. The Registrant currently has secured such insurance
on behalf of its officers and directors.
The Registrant has entered into agreements to indemnify its directors and
officers, in addition to indemnification provided for in the Registrant's
Bylaws. Subject to certain conditions, these agreements, among other things,
indemnify the Registrant'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 Registrant, arising out of such person's services as a director or
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which the person provides services at the request of the
Registrant.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities and Exchange Act of 1933, as amended. The
Registrant's Certificate of Incorporation, as amended, and Bylaws provide for
indemnification of its officers, directors, employees and other agents to the
maximum extent permitted by the Delaware Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE> 5
ITEM 8. EXHIBITS.
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Exhibit
Number Description
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<S> <C>
4.1 1999 Nonstatutory Stock Plan.
4.2 McAfee Associates, Inc. 1997 Non-Officer Stock 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 8).
</TABLE>
<PAGE> 6
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:
(i) 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.
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, the 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.
(4) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, 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.
<PAGE> 7
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 16th day of
June, 1999.
NETWORKS ASSOCIATES, INC.
By: /s/ PRABHAT K. GOYAL
-----------------------
Prabhat K. Goyal
Chief Financial Officer
<PAGE> 8
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 Chairman of the Board and June 16, 1999
- ------------------------------ Chief Executive Officer
William L. Larson
/s/ PRABHAT GOYAL Chief Financial Officer June 16, 1999
- ------------------------------
Prabhat Goyal
/s/ LESLIE DENEND Director June 16, 1999
- ------------------------------
Leslie Denend
/s/ VIRGINIA GEMMELL Director June 16, 1999
- ------------------------------
Virginia Gemmell
/s/ EDWIN HARPER Director June 16, 1999
- ------------------------------
Edwin Harper
</TABLE>
<PAGE> 9
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
4.1 1999 Nonstatutory Stock Plan.
4.2 McAfee Associates, Inc. 1997 Non-Officer Stock 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 8).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
NETWORK ASSOCIATES, INC.
1999 NONSTATUTORY STOCK PLAN
1. Purposes of the Plan. The purposes of this Nonstatutory Stock Plan
are:
o to attract and retain the best available personnel for positions of
substantial responsibility,
o to provide additional incentive to Employees, Directors and
Consultants, and
o to promote the success of the Company's business.
Options granted under the Plan will be Nonstatutory Stock Options.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Network Associates, Inc., a Delaware corporation.
(h) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers, employed by the
Company or any Parent or Subsidiary of the Company. A Service Provider shall not
cease to be an Employee in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE> 2
(m) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.
(o) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(p) "Option" means a nonstatutory stock option granted pursuant to
the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(q) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(r) "Option Exchange Program" means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.
(s) "Optioned Stock" means the Common Stock subject to an Option.
(t) "Optionee" means the holder of an outstanding Option granted
under the Plan.
(u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 1999 Nonstatutory Stock Plan.
(w) "Service Provider" means an Employee including an Officer,
Consultant or Director.
<PAGE> 3
(x) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(y) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 1,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).
4. Administration of the Plan.
(a) Administration. The Plan shall be administered by (i) the Board
or (ii) a Committee, which committee shall be constituted to satisfy Applicable
Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock;
(ii) to select the Service Providers to whom Options may be
granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(viii) to institute an Option Exchange Program;
<PAGE> 4
(ix) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(x) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(xi) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
(xii) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;
(xiii) to determine the terms and restrictions applicable to
Options;
(xiv) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and
(xv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.
5. Eligibility. Options may be granted to Service Providers; provided,
however, that notwithstanding anything to the contrary contained in the Plan,
Options may not be granted to Officers and Directors.
6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.
7. Term of Plan. The Plan shall become effective upon its adoption by the
Board. It shall continue in effect for ten (10) years, unless sooner terminated
under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator.
<PAGE> 5
(b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.
(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or
(viii) any combination of the foregoing methods of payment.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.
An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
<PAGE> 6
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option
Agreement, to the extent the Option is vested on the date of termination (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
<PAGE> 7
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.
(c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option, the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock, immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor
<PAGE> 8
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Optioned Stock to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the merger or
sale of assets.
13. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of an
Option the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
<PAGE> 1
EXHIBIT 4.2
MCAFEE ASSOCIATES, INC.
1997 NON-OFFICER STOCK PLAN
(AS ADOPTED EFFECTIVE JANUARY 20, 1997)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE 1. INTRODUCTION.................................................
ARTICLE 2. ADMINISTRATION...............................................
2.1 Committee Composition........................................
2.2 Committee Responsibilities...................................
ARTICLE 3. SHARES AVAILABLE FOR GRANTS..................................
3.1 Basic Limitation.............................................
3.2 Additional Shares............................................
ARTICLE 4. ELIGIBILITY..................................................
ARTICLE 5. OPTIONS......................................................
5.1 Stock Option Agreement.......................................
5.2 Number of Shares.............................................
5.3 Exercise Price...............................................
5.4 Exercisability and Term......................................
5.5 Effect of Change in Control..................................
5.6 Modification or Assumption of Options........................
5.7 Buyout Provisions............................................
ARTICLE 6. PAYMENT FOR OPTION SHARES....................................
6.1 General Rule.................................................
6.2 Surrender of Stock...........................................
6.3 Exercise/Sale................................................
6.4 Exercise/Pledge
6.5 Promissory Note..............................................
6.6 Other Forms of Payment.......................................
ARTICLE 7. RESTRICTED SHARES............................................
7.1 Time, Amount and Form of Awards..............................
7.2 Payment for Awards...........................................
7.3 Vesting Conditions...........................................
7.4 Voting and Dividend Rights...................................
ARTICLE 8. PROTECTION AGAINST DILUTION..................................
8.1 Adjustments..................................................
8.2 Dissolution or Liquidation...................................
8.3 Reorganizations..............................................
ARTICLE 9. AWARDS UNDER OTHER PLANS.....................................
ARTICLE 10. LIMITATION ON RIGHTS.........................................
10.1 Retention Rights.............................................
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
10.2 Stockholders' Rights.........................................
10.3 Regulatory Requirements......................................
ARTICLE 11. WITHHOLDING TAXES............................................
11.1 General......................................................
11.2 Share Withholding............................................
ARTICLE 12. FUTURE OF THE PLAN...........................................
12.1 Term of the Plan.............................................
12.2 Amendment or Termination.....................................
ARTICLE 13. DEFINITIONS..................................................
ARTICLE 14. EXECUTION....................................................
</TABLE>
<PAGE> 4
MCAFEE ASSOCIATES, INC.
1997 NON-OFFICER STOCK PLAN
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board effective January 20, 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 and Consultants to focus on
critical long-range objectives, (b) encouraging the attraction and retention of
Employees and Consultants with exceptional qualifications and (c) linking
Employees 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 or nonstatutory stock options. The Plan does
not provide for the grant of incentive stock options and does not cover officers
of the Company.
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.
COMMITTEE COMPOSITION. The Plan shall be administered by the Committee. The
Committee shall consist exclusively of one or more directors of the Company, who
shall be appointed by the Board.
COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the Employees
and Consultants who are to receive Awards under the Plan, (b) determine the
type, number, 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.
BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Options and Restricted Shares awarded under the Plan shall not exceed two
million. The limitation of this Section 3.1 shall be subject to adjustment
pursuant to Article 8.
<PAGE> 5
ADDITIONAL SHARES. If Options are forfeited or terminate for any other
reason before being exercised, then the corresponding Common Shares shall again
become available for the grant of Options and Restricted Shares under the Plan.
If Restricted Shares are forfeited, then the corresponding Common Shares shall
again become available for the grant of Options and Restricted Shares under the
ARTICLE 4. ELIGIBILITY.
Only Employees and Consultants shall be eligible for the grant of Awards
under the Plan. Individuals who are considered officers of the Company under the
rules of the National Association of Securities Dealers shall not be eligible
for the grant of Awards.
ARTICLE 5. OPTIONS.
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 provisions of
the various Stock Option Agreements entered into under the Plan need not be
identical. All Options granted under the Plan shall be nonstatutory stock
options and shall not qualify for treatment as incentive stock options under
section 422 of the Internal Revenue Code of 1986, as amended. Options may be
granted in consideration of a cash payment or 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.
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 8.
EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
Price; provided that the Exercise Price shall in no event be less than 85% of
the Fair Market Value of a Common Share on the date of grant. A Stock Option
Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the Option is outstanding.
EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. The Stock
Option Agreement shall also specify the term of the Option. 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 also be awarded in combination with Restricted
Shares, and such an Award may provide that the Options will not be exercisable
unless the related Restricted Shares are forfeited.
EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time of
granting an Option or thereafter, that all or part of such Option shall become
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.
<PAGE> 6
MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the Plan,
the Committee may modify, extend or assume outstanding options or may accept the
cancellation of outstanding options (whether granted by the Company or by
another issuer) in return for the grant of new options 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 Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
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.
GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash or cash equivalents when such
Common Shares are purchased, except that the Committee may accept payment in any
form(s) described in this Article 6.
SURRENDER OF STOCK. To the extent that this Section 6.2 is applicable,
payment for all or any part of the Exercise Price may be made with Common Shares
which 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 Common Shares in payment of the
Exercise Price if such surrender would cause the Company to recognize
compensation expense with respect to the Option for financial reporting
purposes.
EXERCISE/SALE. To the extent that this Section 6.3 is applicable, payment
may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable, payment
may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares 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 in payment of all or part of the Exercise Price
and any withholding taxes.
PROMISSORY NOTE. To the extent that this Section 6.5 is applicable, payment
may be made with a full-recourse promissory note; provided that the par value of
the Common Shares shall be paid in cash or cash equivalents.
OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is applicable,
payment may be made in any other form that is consistent with applicable laws,
regulations and rules.
<PAGE> 7
ARTICLE 7. RESTRICTED SHARES.
TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be granted in
the form of Restricted Shares. Restricted Shares may also be awarded in
combination with Options, and such an Award may provide that the Restricted
Shares will be forfeited in the event that the related Options are exercised.
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 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.
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 Stock Award Agreement. A Stock
Award Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events. 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 Change in
Control occurs with respect to the Company.
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 Stock Award 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 8. PROTECTION AGAINST DILUTION.
ADJUSTMENTS. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of
an extraordinary 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
and Restricted Shares available for future Awards under Article 3, (b) the
number of Common Shares covered by each outstanding Option or (c) the Exercise
Price under each outstanding Option. Except as provided in this Article 8, 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.
DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, the Committee shall notify each Optionee as soon as
reasonably practicable and in any event before the effective date of such
proposed transaction. The
<PAGE> 8
Committee in its discretion may provide that each Optionee shall have the right
to exercise some or all of his or her Options until the date 10 days before such
proposed transaction, including Common Shares as to which the Options otherwise
would not be exercisable. In addition, the Committee may provide that any
Company repurchase right applicable to any Common Shares purchased upon exercise
of an Option or to any Restricted Shares shall lapse as to some or all of such
Common Shares, provided that the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent not previously
exercised, Options shall terminate immediately prior to the consummation of such
proposed transaction.
REORGANIZATIONS. In the event that the Company is a party to a merger or
other reorganization, outstanding Options and Restricted Shares shall be subject
to the agreement of merger or reorganization. Such agreement may provide,
without limitation, for the continuation of outstanding Awards by the Company
(if the Company is a surviving corporation), for their assumption by the
surviving corporation or its parent or subsidiary, for the substitution by the
surviving corporation or its parent or subsidiary of its own awards for such
Awards, for accelerated vesting and accelerated expiration, or for settlement in
cash or cash equivalents.
ARTICLE 9. 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 purposes under the Plan like Restricted Shares
and shall, when issued, reduce the number of Common Shares available for the
grant of Restricted Shares under Article 3.
ARTICLE 10. LIMITATION ON RIGHTS.
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 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.
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, in the case of an Option, the time when he or she
becomes entitled to receive such Common Shares by filing a notice of exercise
and paying the 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.
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.
<PAGE> 9
ARTICLE 11. WITHHOLDING TAXES.
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. 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 12. FUTURE OF THE PLAN.
TERM OF THE PLAN. The Plan, as set forth herein, shall become effective on
January 20, 1997. The Plan shall remain in effect until it is terminated under
Section 12.2.
AMENDMENT OR TERMINATION. The Board may, at any time and for any reason,
amend or terminate the Plan. 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 13. DEFINITIONS.
"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.
"AWARD" means any award of an Option or a Restricted Share under the Plan.
"BOARD" means the Company's Board of Directors, as constituted from time to
time.
"CHANGE IN CONTROL" shall mean:
The consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if more than 50% of the
combined voting power of the continuing or surviving entity's securities
outstanding immediately after such merger, consolidation or other reorganization
is owned by persons who were not stockholders of the Company immediately prior
to such merger, consolidation or other reorganization;
The sale, transfer or other disposition of all or substantially all of the
Company's assets;
A change in the composition of the Board, as a result of which fewer than a
majority of the incumbent directors are directors who either (i) had been
directors of the
<PAGE> 10
Company on the date 24 months prior to the date of the event that may constitute
a Change in Control (the "original directors") or (ii) were elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the aggregate of the original directors who were still in office at
the time of the election or nomination and the directors whose election or
nomination was previously so approved; or any transaction as a result of which
any person is the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
at least 50% of the total voting power represented by the Company's then
outstanding voting securities. For purposes of this Subsection (d), the term
"person" shall have the same meaning as when used in sections 13(d) and 14(d) of
the Exchange Act but shall exclude (i) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or of a Parent or
Subsidiary and (ii) a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of the common stock of the Company.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
"COMMITTEE" means a committee of the Board, as described in Article 2.
"COMMON SHARE" means one share of the common stock of the Company.
"COMPANY" means McAfee Associates, Inc., a Delaware corporation.
"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.
"EMPLOYEE" means a common-law employee of the Company, a Parent, a
Subsidiary or an Affiliate.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"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.
"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 Western Edition of The Wall Street Journal. Such
determination shall be conclusive and binding on all persons.
"OPTION" means a nonstatutory stock option granted under the Plan and
entitling the holder to purchase Common Shares.
"OPTIONEE" means an individual or estate who holds an Option.
<PAGE> 11
"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. "PARTICIPANT"
means an individual or estate who holds an Award.
"PLAN" means this McAfee Associates, Inc. 1997 Non-Officer Stock Plan, as
amended from time to time.
"RESTRICTED SHARE" means a Common Share awarded under the Plan.
"STOCK AWARD AGREEMENT" means the agreement between the Company and the
recipient of a Restricted Share that contains the terms, conditions and
restrictions pertaining to such Restricted Share.
"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.
"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.
ARTICLE 14. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to affix the corporate name and seal hereto.
MCAFEE ASSOCIATES, INC.
By:
--------------------
<PAGE> 1
EXHIBIT 5.1
June 16, 1999
Network Associates, Inc.
3965 Freedom Circle
Santa Clara, California 95054
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 June 16, 1999, in
connection with the registration under the Securities Act of 1933, as amended,
of (i) 1,000,000 shares of Common Stock to be issued under the Networks
Associates, Inc. (the "Company") 1999 Non-Statutory Stock Plan, and (ii)
3,000,000 shares of Common Stock to be issued under the Company's McAfee
Associates, Inc. 1997 Non-Officer Stock Plan (collectively the "Shares")
(collectively the "Plans").
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 under the Plans.
It is our opinion that the Shares, when issued and sold in the manner
referred to in the Plans, and pursuant to the agreements which accompany the
Plans, 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 this Registration
Statement on Form S-8 of our report dated March 31, 1999, except for the matters
discussed in Note 17, as to which the date is April 7, 1999, relating to the
financial statements and financial statement schedule, which appear in Networks
Associates, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1998.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
San Jose, California
June 16, 1999
