MCAFEE, INC. PERFORMANCE STOCK UNIT ISSUANCE AGREEMENT
EXHIBIT
10.1
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees who provide services to the Corporation (or any Parent or Subsidiary).
B. The Participant is to render valuable services to the Corporation (or a Parent or
Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes
of, the Plan in connection with the Corporation’s issuance of shares of Common Stock to the
Participant under the Plan.
C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Performance Stock Units. The Corporation hereby awards to the
Participant, as of the Award Date, Performance Stock Units under the Plan. Each Performance Stock
Unit represents the right to receive one share of Common Stock on the vesting date of that unit.
Past services are deemed to be full consideration equal to the Performance Stock Unit par value.
The number of shares of Common Stock subject to the awarded Performance Stock Units, the applicable
vesting schedule for the Performance Stock Units and the underlying shares, the dates on which
those vested shares shall be issued to the Participant and the remaining terms and conditions
governing the award (the “Award”) shall be as set forth in this Agreement.
AWARD SUMMARY
Award
Date:
|
, 200___ | |
Number of Shares
Subject to Award:
|
shares of Common Stock (the “Shares”) |
|
Performance Period(s): |
||
Performance Criteria:
|
of the Performance Stock Units will be allocated to each of the Performance Periods. With respect to each Performance Period, the Participant will vest in the Performance Stock Units allocated thereto in accordance with the Vesting Schedule subject to achievement of certain performance criteria, determined by the Committee and set forth in the attached Appendix B. | |
Vesting Schedule:
|
The Shares shall vest as follows, provided that the performance criteria set forth in the attached Appendix B for the applicable Performance Period have been achieved: | |
| [VESTING SCHEDULE] | ||
| Such dates are herein designated the “Vesting Dates.” In no event shall any Shares vest after the date of the Participant’s termination of Service. Notwithstanding the foregoing, if the Participant’s termination occurs after the end of a Performance Period, the Participant shall vest in the Shares allocated to such completed Performance Period on the applicable Vesting Date, provided that the performance criteria for such Performance Period have been achieved. | ||
Issuance Schedule:
|
The Shares in which the Participant vests in accordance with the foregoing Vesting Schedule will be issuable immediately upon vesting. | |
| However, the actual number of vested Shares to be issued will be subject to the automatic Share withholding provisions of Paragraph 7 pursuant to which the applicable Withholding Taxes are to be collected. |
2. Limited Transferability. Prior to actual receipt of the Shares which vest
hereunder, the Participant may not sell, pledge, assign, hypothecate, transfer or dispose of in any
way (whether by operation of law or otherwise) any interest in the Award or the underlying Shares,
except pursuant to a domestic relations order governing the division of marital property. Upon any
attempt to sell, pledge, assign, hypothecate, transfer or otherwise dispose of this Award, or any
right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this Award and the rights and privileges conferred hereby immediately will become
null and void. Any Shares which vest hereunder but which otherwise remain unissued at the time of
the Participant’s death may be transferred pursuant to the provisions of the Participant’s will or
the laws of inheritance or to the Participant’s designated beneficiary or beneficiaries of this
Award. The Participant may make such a beneficiary designation at any time by filing the
appropriate form with the Plan Administrator or its designate.
3. Cessation of Service. Except as otherwise provided herein, should the Participant
cease Service for any reason prior to vesting in one or more Shares subject to this Award, then the
Award will be immediately cancelled with respect to those unvested Shares, and the number of
Performance Stock Units will be reduced accordingly. The Participant shall thereupon cease to have
any right or entitlement to receive any Shares under those cancelled units.
4. Transfer of Control.
(a) Any Performance Stock Units subject to this Award at the time of a Transfer of Control may
be assumed by the successor entity or otherwise continued in full force and effect or may be
replaced with a cash incentive program of the successor entity which preserves the Fair Market
Value of any unvested shares of Common Stock subject to the Award
2
at the time of the Transfer of Control and provides for subsequent payout of that value in
accordance with the vesting schedule applicable to the Award.
(b) In the event the Award is assumed or otherwise continued in effect, the Performance Stock
Units subject to the Award will be adjusted immediately after the consummation of the Transfer of
Control so as to apply to the number and class of securities into which the Shares subject to those
units immediately prior to the Transfer of Control would have been converted in consummation of
that Transfer of Control had those Shares actually been issued and outstanding at that time. To
the extent the actual holders of the outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Transfer of Control, the successor corporation may, in
connection with the assumption or continuation of the Performance Stock Units subject to the Award
at that time, substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in the Transfer of Control
transaction, provided such common stock is readily tradable on an established U.S. securities
market.
(c) If the Performance Stock Units subject to this Award at the time of the Transfer of
Control are not so assumed or otherwise continued in effect or replaced with a cash incentive
program in accordance with the foregoing provisions of this Paragraph 4, then those Performance
Stock Units shall terminate immediately upon the consummation of that Transfer of Control, and the
Participant shall cease to have any right or entitlement to receive any shares of Common Stock or
other securities, property or consideration with respect to the terminated Performance Stock Units.
(d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
5. Adjustment in Shares. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to the total number and/or class of securities
issuable pursuant to this Award in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
6. Issuance of Shares of Common Stock.
(a) At such time as is set forth in the Issuance Schedule described in Paragraph 1 of this
Award (but in no event later than the date that is two-and-one-half months from the end of the
applicable Performance Period), the Corporation shall issue to or on behalf of the Participant a
certificate (which may be in electronic form) for the applicable number of underlying shares of
Common Stock, subject, however, to the Share withholding provisions of Paragraph 6(b) pursuant to
which the applicable Withholding Taxes are to be collected. Prior to actual payment of any vested
Shares, the Performance Stock Units shall represent an unsecured obligation. Notwithstanding
anything in the Plan or this Agreement to the contrary, if the
3
vesting of the balance, or some lesser portion of the balance, of the Performance Stock Units
is accelerated in connection with the Participant’s termination of Service (provided that such
termination is a “separation from service” within the meaning of Section 409A, as determined by the
Corporation), other than due to death, and if (x) the Participant is a “specified employee” within
the meaning of Section 409A at the time of such termination and (y) the payment of such accelerated
Performance Stock Units will result in the imposition of additional tax under Section 409A if paid
to the Participant on or within the six (6) month period following the Participant’s termination of
Service, then the payment of such accelerated Performance Stock Units will not be made until the
date six (6) months and one (1) day following the date of such termination, unless the Participant
dies during such six (6) month period, in which case, the Performance Stock Units will be paid to
the Participant’s estate as soon as practicable following his or her death, subject to Paragraph
6(b). It is the intent of this Agreement to comply with the requirements of Section 409A so that
none of the Performance Stock Units provided under this Agreement or Shares issuable thereunder
will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will
be interpreted to so comply. For purposes of this Agreement, “Section 409A” means Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), and any proposed, temporary or final
Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from
time to time.
(b) On the date the vested Shares are to be issued hereunder to the Participant, the
Corporation shall automatically withhold a portion of those vested Shares with a Fair Market Value
(measured as of the vesting date) equal to the amount of the applicable Withholding Taxes;
provided, however, that the amount of the Shares so withheld shall not exceed the amount necessary
to satisfy the Corporation‘s required tax withholding obligations using the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes, that are applicable
to supplemental taxable income. No fractional share of Common Stock shall be so withheld, and the
Participant shall pay that portion of the Withholding Taxes in cash to the Corporation, either
directly or through withholding from his or her other wages.
(c) In no event will any fractional shares be issued.
(d) The holder of this Award shall not have any stockholder rights, including voting or
dividend rights, with respect to the Shares subject to the Award until the Participant becomes the
record holder of those Shares following their actual issuance after the satisfaction of the
applicable Withholding Taxes.
7. Compliance with Laws and Regulations.
(a) The issuance of shares of Common Stock pursuant to the Award shall be subject to
compliance by the Corporation and the Participant with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq Stock Market, if
applicable) on which the Common Stock may be listed for trading at the time of such issuance.
4
(b) The inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance of any Common Stock
hereby shall relieve the Corporation of any liability with respect to the non-issuance of the
Common Stock as to which such approval shall not have been obtained. The Corporation, however,
shall use its best efforts to obtain all such approvals.
8. Successors and Assigns. Except to the extent otherwise provided in this Agreement,
the provisions of this Agreement shall inure to the benefit of, and be binding upon, (i) the
Corporation and its successors and assigns and (ii) the Participant, the Participant’s assigns, the
legal representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the
Award designated by the Participant.
9. Notices. Any notice required to be given or delivered to the Corporation under the
terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to the Participant shall be in
writing and addressed to the Participant at the address indicated below the Participant’s signature
line on this Agreement. All notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
10. Construction. This Agreement and the Award evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in the Award.
11. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.
12. Employment at Will. Nothing in this Agreement or in the Plan shall confer upon
the Participant any right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Participant) or of the Participant, which rights are hereby expressly
reserved by each, to terminate the Participant’s Service at any time for any reason, with or
without cause.
[***SECTIONS 13, 14 & 15 TO BE USED ONLY FOR GRANTS TO NON-U.S. EMPLOYEES
13. Nature of Grant; No Entitlement; No claim for Compensation. In accepting the
grant of this Award for the number of Shares as specified above, the Participant acknowledges the
following:
(a) The Plan is established voluntarily by the Corporation; it is discretionary in nature and
may be modified, amended, suspended or terminated by the
5
Corporation at any time. The grant of this Award is voluntary and occasional and does not
create any contractual or other right to receive future grants of awards, or benefits in lieu of
awards, even if awards have been granted repeatedly in the past. All decisions with respect to
future awards, if any, will be at the sole discretion of the Plan Administrator.
(b) This Award is an extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to the Corporation or its Parent or Subsidiaries (including, as
applicable, the Participant’s employer) and which is outside the scope of the Participant’s
employment contract, if any. This Award is not part of normal or expected compensation or salary
for any purpose, including, but not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.
(c) In the event that the Participant’s employer is not the Corporation, the grant of the
Award will not be interpreted to form an employment contract or relationship with the Corporation
and, furthermore, the grant of the Award will not be interpreted to form an employment contract
with the Participant’s employer or any Subsidiary.
(d) In consideration of the grant of this Award, no claim or entitlement to compensation or
damages shall arise from termination of the Award or diminution in value of the Award or any of the
Shares issuable under the Award from termination of the Participant’s employment by the Corporation
or the Participant’s employer, as applicable (and for any reason whatsoever and whether or not in
breach of contract or local labor laws), and the Participant irrevocably releases the Participant’s
employer, the Corporation and its Parent and Subsidiaries, as applicable, from any such claim that
may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen, then, by signing this Agreement, the Participant shall be deemed to
have irrevocably waived his or her entitlement to pursue such claim.
14. Data Privacy.
(a) The Participant hereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of the Participant’s personal data as described in this
Agreement by and among, as applicable, the Participant’s employer, the Corporation and its Parent
and Subsidiaries for the exclusive purpose of implementing, administering and managing the
Participant’s participation in the Plan.
(b) The Participant understands that the Participant’s employer, the Corporation and its
Parent and Subsidiaries, as applicable, hold certain personal information about the Participant
regarding the Participant’s employment, the nature and amount of the Participant’s compensation and
the fact and conditions of the Participant’s participation in the Plan, including, but not limited
to, the Participant’s name, home address and telephone number, date of birth, social insurance
number or other identification number, salary, nationality, job title, any shares of stock or
directorships held in the Corporation and its Parent and Subsidiaries, details of all options,
awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested
or outstanding in the Participant’s favor, for the purpose of
6
implementing, administering and managing the Plan (the “Data”). The Participant understands
that the Data may be transferred to any third parties assisting in the implementation,
administration and management of the Plan, including but not limited to outside auditors, that
these recipients may be located in the Participant’s country, or elsewhere, and that the
recipient’s country may have different data privacy laws and protections than the Participant’s
country. The Participant understands that the Participant may request a list with the names and
addresses of any potential recipients of the Data by contacting the Participant’s local human
resources representative. The Participant authorizes the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing the Participant’s participation in the Plan, including any requisite
transfer of such Data as may be required to a broker or other third party. The Participant
understands that the Data will be held only as long as is necessary to implement, administer and
manage the Participant’s participation in the Plan. The Participant understands that the
Participant may, at any time, view the Data, request additional information about the storage and
processing of the Data, require any necessary amendments to the Data or refuse or withdraw the
consents herein, in any case without cost, by contacting in writing the Participant’s local human
resources representative. The Participant understands, however, that refusing or withdrawing the
Participant’s consent may affect the Participant’s ability to participate in the Plan. For more
information on the consequences of the Participant’s refusal to consent or withdrawal of consent,
the Participant understands that the Participant may contact Participant’s local human resources
representative.
15. Electronic Delivery. The Corporation may, in its sole discretion, decide to
deliver any document related to the Award, the Plan or future awards that may be granted under the
Plan by electronic means, and the Participant hereby consents to receive such documents by
electronic delivery.]
16. Restrictions on Sale of Securities. The Shares issued as payment for vested
Performance Stock Units under this Agreement will be registered under U.S. federal securities laws
and will be freely tradable upon receipt. However, a Participant’s subsequent sale of the Shares
may be subject to any market blackout-period that may be imposed by the Corporation and must comply
with the Corporation’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policies, and any other applicable securities laws.
17. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
18. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.
19. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Participant expressly warrants that he
or she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can
7
be made only in an express written contract executed by a duly authorized officer of the
Corporation. Notwithstanding anything to the contrary in the Plan or this Agreement, the
Corporation reserves the right to revise this Agreement as it deems necessary or advisable, in its
sole discretion and without the consent of the Participant, to comply with Section 409A or to
otherwise avoid imposition of any additional tax or income recognition under Section 409A prior to
the actual payment of Shares pursuant to this Award.
20. Amendment, Suspension or Termination of the Plan. By accepting this Award, the
Participant expressly warrants that he or she has received a right to receive stock under the Plan,
and has received, read and understood a description of the Plan. The Participant understands that
the Plan is discretionary in nature and may be amended, suspended or terminated by the Corporation
at any time.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.
| MCAFEE, INC. | ||||
| By: | ||||
| Title: | ||||
| Date: | ||||
| PARTICIPANT | ||||
| Signature: | ||||
| Address: | ||||
| Date: | ||||
8
APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Performance Stock Unit Issuance Agreement.
B. Award shall mean the award of Performance Stock Units made to the
Participant pursuant to the terms of this Agreement.
C. Award Date shall mean the date the Performance Stock Units are awarded to
the Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of
the Agreement.
D. Board shall mean the Corporation’s Board of Directors.
E. Code shall mean the Internal Revenue Code of 1986, as amended.
F. Common Stock shall mean shares of the Corporation’s common stock.
G. Corporation shall mean McAfee, Inc., a Delaware corporation, and any
successor corporation to all or substantially all of the assets or voting stock of McAfee,
Inc. which shall by appropriate action adopt the Plan.
H. Employee shall mean an individual who is in the employ of the Corporation
(or any Parent or Subsidiary), subject to the control and direction of the employer entity
as to both the work to be performed and the manner and method of performance.
I. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq Stock Market, then
the Fair Market Value shall be the closing selling price per share of Common Stock
on the Nasdaq National Market on the date in question, as such price is reported by
the National Association of Securities Dealers and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
A-1
(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on the
date in question on the Stock Exchange determined by the Plan Administrator to be
the primary market for the Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
J. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.
K. Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each corporation in
the unbroken chain (other than the Corporation) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
L. Plan shall mean the Corporation’s 1997 Stock Incentive Plan, as amended
from time to time.
M. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.
N. Performance Stock Unit is defined as the right to receive one share of
common stock with a par value of $0.01 upon vesting in accordance with the terms of the
Agreement.
O. Service shall mean the Participant’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee
member of the board of directors or a consultant or independent advisor. For purposes of
this Agreement, the Participant shall be deemed to cease Service immediately upon the
occurrence of the either of the following events: (i) the Participant no longer performs
services in any of the foregoing capacities for the Corporation (or any Parent or
Subsidiary) or (ii) the entity for which the Participant performs such services ceases to
remain a Parent or Subsidiary of the Corporation, even though the Participant may
subsequently continue to perform services for that entity. Service shall not be deemed to
cease during a personal leave approved by the Corporation.
P. Stock Exchange shall mean the American Stock Exchange or the New York Stock
Exchange.
Q. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each corporation
(other than the last corporation) in the unbroken chain owns, at
A-2
the time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other corporations in
such chain.
R. Transfer of Control shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:
(i) the direct or indirect sale or exchange by the stockholders of the Corporation of
all or substantially all of the voting stock of the Corporation wherein the stockholders of
the Corporation immediately before such sale or exchange do not retain in substantially the
same proportions as their ownership of shares of the Corporation’s voting stock immediately
before such event, directly or indirectly (including, without limitation, through their
ownership of shares of the voting stock of a corporation which, as a result of such sale or
exchange, owns the Corporation either directly or indirectly through one or more
subsidiaries), at least a majority of the beneficial interest in the voting stock of the
Corporation immediately after such sale or exchange;
(ii) a merger or consolidation where the stockholders of the Corporation immediately
before such merger or consolidation do not retain in substantially the same proportions as
their ownership of shares of the Corporation’s voting stock immediately before such event,
directly or indirectly (including, without limitation, through their ownership of shares of
the voting stock of a corporation which, as a result of such merger or consolidation, owns
the Corporation either directly or through one or more subsidiaries), at least a majority of
the beneficial interest in the voting stock of the Corporation immediately after such merger
or consolidation;
(iii) the sale, exchange, or transfer of all or substantially all of the assets of the
Corporation (other than a sale, exchange, or transfer to one or more corporations (the
“Transferee Corporation(s)”) wherein the stockholders of the Corporation immediately before
such sale, exchange or transfer retain in substantially the same proportions as their
ownership of shares of the Corporation’s voting stock immediately before such event,
directly or indirectly (including, without limitation, through their ownership of shares of
the voting stock of a corporation which owns the Transferee Corporation(s) either directly
or through one or more subsidiaries), at least a majority of the beneficial interest of the
voting stock of the Transferee Corporation(s) immediately after such event; or
(iv) a liquidation or dissolution of the Corporation.
S. Withholding Taxes shall mean the federal, state and local income taxes and
the employee portion of the federal, state and local employment taxes required to be
withheld by the Corporation in connection with the issuance of the shares of Common Stock
which vest under of the Award.
▇-▇
▇▇▇▇▇▇▇▇ ▇
PERFORMANCE CRITERIA
The Performance Criteria applicable to the Performance Stock Units allocated to each Performance
Period is as follows:
B-1