- Current report filing (8-K)
August 25 2010 - 6:01AM
Edgar (US Regulatory)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: August 18, 2010
(Date of earliest event reported)
McAfee, Inc.
(Exact Name of Registrant as specified in Charter)
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Delaware
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Commission File No.:
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77-0316593
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(State or other Jurisdiction
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001-31216
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(I.R.S. Employer Identification No.)
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of incorporation)
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3965 Freedom Circle
Santa Clara, California 95054
(Address of Principal Executive Offices, including zip code)
(408) 346-3832
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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þ
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
On August 18, 2010, the Chief Executive Officer of McAfee, Inc. (McAfee), David G. DeWalt,
and the Chief Financial Officer, Jonathan Chadwick, of McAfee each entered into a new employment
agreement between himself and Intel Corporation (Intel) and McAfee, to be effective immediately
prior to the closing of the merger of McAfee with a wholly owned subsidiary of Intel (the
Employment Agreements). The merger will be effected pursuant to an Agreement and Plan of Merger,
dated as of August 18, 2010 (the Merger Agreement), by and among Intel, McAfee and Jefferson
Acquisition Corporation, a wholly-owned subsidiary of Intel, which McAfee reported on a Current
Report on Form 8-K filed with the Securities and Exchange Commission by McAfee on August 19, 2010.
Effective immediately prior to the closing of the merger, the Employment Agreements will
replace the existing offer letter agreements of Mr. DeWalt and Mr. Chadwick and, in exchange for
Mr. DeWalt and Mr. Chadwick waiving their rights to terminate their employment in connection with
the merger as a result of any change in their duties, authority, reporting relationship and
responsibilities and receive substantial benefits under their current change of control and
retention agreements (the Change of Control Agreements), provide for the following material
compensation terms with McAfee, as a wholly owned subsidiary of Intel, following the closing of the
merger:
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The Change of Control Agreements for Mr. DeWalt and Mr. Chadwick with
McAfee will continue to be in full force and effect as of and
following the merger (until such agreements expire in accordance with
their terms), except that, as discussed above, Mr. DeWalt and Mr.
Chadwick have each agreed that the newly contemplated duties,
authority, reporting relationship and responsibilities that they will
have with McAfee, as a subsidiary of Intel following the merger, will
not form the basis for a resignation for Change of Control Period Good
Reason (as defined in their respective Change of Control Agreements)
entitling them to substantial benefits under the Change of Control
Agreements. In addition, Messrs. DeWalt and Chadwick have agreed
that, except with respect to their McAfee stock options, restricted
stock units and performance stock units that were granted prior to
August 18, 2010, and are assumed by Intel pursuant to the Merger
Agreement, no stock options, restricted stock units, performance stock
units or other equity incentive awards granted to them by Intel or
McAfee will be subject to the accelerated vesting provisions of the
Change of Control Agreements.
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An annualized base salary of $950,000 for Mr. DeWalt and an annualized
base salary of $600,000 for Mr. Chadwick.
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Eligibility for a target annual bonus of up to $1,050,000 for Mr.
DeWalt and eligibility for a target annual bonus of up to $600,000 for
Mr. Chadwick.
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If, at the effective time of the merger, either Mr. DeWalt or Mr.
Chadwick holds any outstanding McAfee equity awards that were granted
prior to August 18, 2010, the vesting schedule for such outstanding
equity awards, to the extent not already vested, will be accelerated
by the lesser of (i) a period of one (1) year or (ii) the period of
time or number of shares set forth in a schedule to be provided in
writing by the executive to Intel within thirty (30) days following
August 18, 2010. To the extent that an award (or portion thereof) is
scheduled to vest within the time period determined in accordance with
the preceding sentence, that award (or portion thereof) will become
immediately vested and, to the extent applicable, exercisable at the
effective time of the merger.
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Mr. DeWalt and Mr. Chadwick will be eligible to receive time-based
retention payments, provided that they are not terminated for Cause
(as defined in the Change of Control Agreement) or resign
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from their
employment for any reason prior to each relevant retention date. Mr.
DeWalt is eligible to receive a first retention payment of $2,000,000
(less applicable withholdings) within thirty (30) days of the first
anniversary of the closing date of the merger and a second retention
payment of $2,000,000 (less applicable withholdings) within thirty
(30) days of the second anniversary of the closing date of the merger.
Mr. Chadwick is eligible to receive a first retention payment of
$300,000 (less applicable withholdings) within thirty (30) days of
July 31, 2012, and a second retention payment of $300,000 (less
applicable withholdings) within thirty (30) days of July 31, 2013. If
Mr. DeWalt or Mr. Chadwick is terminated without Cause prior to either
of the retention dates, he will be entitled to receive any unpaid
portion of the retention payments, subject to his timely execution and
non-revocation of a release of claims, and such payments will
generally be made within seven (7) days after the effective date of
the release (unless a later payment date is required by the Employment
Agreement).
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Mr. DeWalt and Mr. Chadwick will be eligible to receive
performance-based incentive payments, provided that the performance
metrics are met and they are not terminated for Cause or resign from
their employment for any reason prior to each relevant performance
date. Mr. DeWalt is potentially eligible to receive a first
performance incentive payment of up to $2,000,000 (less applicable
withholdings) if all performance metrics for the 2011 calendar year
are achieved and a second performance incentive payment of up to
$2,000,000 (less applicable withholdings) if all performance metrics
for the 2012 calendar year are achieved. Mr. Chadwick is potentially
eligible to receive a first performance incentive payment of up to
$450,000 (less applicable withholdings) if all performance metrics are
achieved for the 2011 calendar year and a second performance incentive
payment of up to $450,000 (less applicable withholdings) if all
performance metrics for the 2012 calendar year are achieved. The
performance incentive payments payable for 2011 and 2012 will be paid
within sixty (60) days following December 31, 2011, and December 31,
2012, respectively. If Mr. DeWalt or Mr. Chadwick is terminated
without Cause prior to December 31, 2011, he will be entitled to
receive a pro-rated amount of the first performance incentive payment
(determined based on the extent to which the performance metrics are
achieved and the number of days that have elapsed since January 1,
2011), subject to his timely execution and non-revocation of a release
of claims. If Mr. DeWalt or Mr. Chadwick is terminated without Cause
after January 1, 2012, but prior to December 31, 2012, he will be
entitled to receive a pro-rated amount of the second retention bonus
(determined based on the extent to which the performance metrics are
achieved and the number of days that have elapsed since January 1,
2012), subject to his timely execution and non-revocation of a release
of claims. Payment of any pro-rated performance incentive payments
will be made within seven (7) days after the effective date of the
release (unless a later payment date is required by the Employment
Agreement).
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Mr. DeWalt will hold the position of President of McAfee, a wholly
owned subsidiary of Intel, reporting to the Senior Vice President and
General Manager of the Software and Services Group of Intel following
the merger.
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Mr. Chadwick will hold the position of Chief Financial Officer of
McAfee, reporting to the President of McAfee following the merger.
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Under each of the Employment Agreements, Mr. DeWalt and Mr. Chadwick will be employed on an
at-will basis following the merger. However, if Mr. DeWalt or Mr. Chadwicks employment
terminates during the Change of Control Period (as defined in the Change of Control Agreement)
under the circumstances described in the Change of Control Agreement (as modified by the Employment
Agreement), he will be entitled to the severance benefits set forth in the Change of Control
Agreement, on the terms and conditions described therein.
In
addition, on August 18, 2010, McAfees other named executive officers (Messrs. Michael P.
DeCesare, Mark D. Cochran and Gerhard Watzinger) (the NEOs) entered into retention letters with
Intel and McAfee (the Retention Letters). The Retention Letters provide for the following terms
following the closing of the merger:
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Existing change of control and retention agreements between the NEOs
and McAfee will continue to be in full force and effect as of and
following the merger (until such agreements expire in accordance with
their terms), except that the NEOs have agreed that any change in
duties, authority, reporting relationship and responsibilities that is
solely attributable to the change in McAfees status from that of an
independent company to that of a subsidiary of Intel will not form the
basis for a resignation for Change of Control Period Good Reason (as
defined in their existing change of control agreements) and that such
duties, authority, reporting relationship and responsibilities will be
substantially the same as their duties, authority, reporting
relationship and responsibilities in effect immediately prior to the
closing of the merger.
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The NEOs have agreed that, except with respect to their McAfee stock
options, restricted stock units and performance stock units that were
granted prior to August 18, 2010, and are assumed by Intel pursuant to
the Merger Agreement, no stock options, restricted stock units,
performance stock units or other equity incentive awards granted to
them by Intel or McAfee will be subject to the accelerated vesting
provisions of their existing change of control agreements.
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The NEOs have agreed and acknowledged that their existing change of
control agreements permanently superseded all other prior
representations, understandings, undertakings or agreements, including
specifically any severance payment provisions of any offer letter or
similar arrangement, and that following the expiration of their change
of control agreements, they will be eligible for severance benefits
only in accordance with McAfees then established plans.
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The NEOs will be eligible to receive time-based retention payments,
provided that they are not otherwise terminated for Cause (as defined
in their existing change of control agreements) or resign from their
employment for any reason prior to each relevant retention date. The
NEOs will be eligible to receive the first retention payment within
thirty (30) days following July 31, 2012, and the second retention
payment within thirty (30) days following July 31, 2013. If an NEO is
terminated without Cause prior to a retention payment date, the NEO
will be entitled to receive a pro-rated portion of the next scheduled
retention payment, subject to the NEOs timely execution and
non-revocation of a release of claims. Payment of the pro-rated
retention payment will generally be made within seven (7) days after
the effective date of the release (unless a later payment date is
required by the NEOs change of control agreement)
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The NEOs will be eligible to receive performance-based incentive
payments, provided that the performance metrics for the applicable
calendar year are met and they are not terminated for Cause or resign
from their employment for any reason prior to each relevant
performance date. The NEOs will be potentially eligible to receive
the first performance incentive payment within sixty (60) days
following December 31, 2011, and the second performance incentive
payment within sixty (60) days following December 31, 2012. If an NEO
is terminated without Cause prior to a performance incentive payment
date, the NEO will be entitled to receive a pro-rated portion of the
next scheduled performance incentive payment (determined based on the
extent to which the performance metrics are achieved and the number of
days that have elapsed since January 1 of the performance period
applicable to such performance incentive payment), subject to his
timely execution and non-revocation of a release of claims. Payment
of any pro-rated performance incentive payments will be made within
seven (7) days after the effective date of the release (unless a later
payment date is required by the Retention Letter or the NEOs existing
change of control agreement).
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The table below illustrates the potential retention and performance-based incentive payments
for the NEOs (subject to applicable withholdings).
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Maximum*
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Maximum*
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First
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Second
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Performance-
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Performance-
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Second
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Based Incentive
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Based Incentive
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First Retention
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Retention
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Payment Date
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Payment Date
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Payment Date
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Payment Date
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(December 31,
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(December 31,
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(July 31, 2012)
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(July 31, 2013)
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2011)
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2012)
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Michael P. DeCesare
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$
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300,000
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$
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300,000
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$
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450,000
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$
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450,000
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Mark D. Cochran
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$
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195,000
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$
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195,000
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$
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292,500
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$
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292,500
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Gerhard Watzinger
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$
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200,000
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$
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200,000
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$
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300,000
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$
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300,000
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Assumes all performance metrics are achieved.
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The foregoing descriptions of the Employment Agreements and the Retention Letters are
qualified in its entirety by the terms of the Employment Agreements or the Retention Letters, which
are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to and incorporated by reference in this
Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
10.1
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Executive Employment Agreement, dated as of August 18, 2010, by and among McAfee, Inc., Intel
Corporation and David G. DeWalt.
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10.2
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Executive Employment Agreement, dated as of August 18, 2010, by and among McAfee, Inc., Intel
Corporation and Jonathan Chadwick.
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10.3
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Retention Letter, dated as of August 18, 2010, by and among McAfee, Inc., Intel Corporation
and Michael P. DeCesare.
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10.4
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Retention Letter, dated as of August 18, 2010, by and among McAfee, Inc., Intel Corporation
and Mark D. Cochran.
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10.5
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Retention Letter, dated as of August 18, 2010, by and among McAfee, Inc., Intel Corporation
and Gerhard Watzinger.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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McAfee, Inc.
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Date: August 24, 2010
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By:
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/s/ Jonathan Chadwick
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Jonathan Chadwick
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Chief Financial Officer
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EXHIBIT INDEX
10.1
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Executive Employment Agreement, dated as of August 18, 2010, by and among McAfee, Inc.,
Intel Corporation and David G. DeWalt.
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10.2
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Executive Employment Agreement, dated as of August 18, 2010, by and among McAfee, Inc.,
Intel Corporation and Jonathan Chadwick.
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10.3
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Retention Letter, dated as of August 18, 2010, by and among McAfee, Inc., Intel Corporation
and Michael P. DeCesare.
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10.4
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Retention Letter, dated as of August 18, 2010, by and among McAfee, Inc., Intel Corporation
and Mark D. Cochran.
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10.5
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Retention Letter, dated as of August 18, 2010, by and among McAfee, Inc., Intel Corporation
and Gerhard Watzinger.
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