EXHIBIT 10.48
NETWORKS ASSOCIATES, INC.
ART MATIN EMPLOYMENT AGREEMENT
This Agreement is made by and between Networks Associates (the
"Company"), and Xxxxxx X Xxxxx ("Executive") as of October 30, 2001.
1. Duties and Scope of Employment.
(a) Positions; Employment Commencement Date; Duties.
Executive's employment with the Company pursuant to this Agreement shall
commence upon a date mutually agreed upon by the parties hereto that is prior to
October 30, 2001 (the "Employment Commencement Date"). As of the Employment
Commencement Date, the Company shall employ the Executive as President of McAfee
for the Company reporting to the President of the Company (the "President"). The
period of Executive's employment hereunder is referred to herein as the
"Employment Term." During the Employment Term, Executive shall render such
business and professional services in the performance of his duties, consistent
with Executive's position within the Company, as shall reasonably be assigned to
him by the President.
(b) Obligations. During the Employment Term, Executive shall
devote his full business efforts and time to the Company. Executive agrees,
during the Employment Term, not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration
without the prior approval of the Board; provided, however, that Executive may
serve in any capacity with any civic, educational or charitable organization, or
as a member of corporate Boards of Directors or committees thereof upon which
Executive currently serves. Executive may serve on a Board of Directors as long
as such activity is non-competitive with the business of the Company and
Executive receives prior approval from the CEO.
2. Employee Benefits. During the Employment Term, Executive shall be
eligible to participate in the employee and fringe benefit plans and Paid Time
Off (PTO) plan maintained by the Company that are applicable to other senior
management to the full extent provided for under those plans.
3. At-Will Employment. Executive and the Company understand and
acknowledge that Executive's employment with the Company constitutes "at-will"
employment. Subject to the Company's obligation to provide severance benefits as
specified herein, Executive and the Company acknowledge that this employment
relationship may be terminated at any time, upon written notice to the other
party, with or without good cause or for any or no cause, at the option either
of the Company or Executive.
4. Compensation.
(a) Base Salary. While employed by the Company, the Company
shall pay the Executive as compensation for his services a base salary at the
annualized rate of four hundred thousand dollars ($400,000). The Company will
review Executive's base salary at least once each calendar year starting in
January 2002 and, if it deems it appropriate, increase the base
salary. Executive's annualized base salary, as adjusted upward as provided
herein, will be referred to as his "Base Salary." Such Base Salary shall be paid
periodically in accordance with normal Company payroll practices and subject to
the usual, required withholding.
(b) Bonuses. Executive shall be eligible to participate in the
executive quarterly incentive bonus program, with milestones based in part on
Company performance and in part on Executive's individual performance. At 100%
performance Executive's annual target incentive is $250,000 (the "Target
Bonus"). Target Bonus is guaranteed for the first year of employment. ). The
Company will review Executive's target incentive at least once each calendar
year starting in January 2002 and, if it deems it appropriate, increase the
target incentive.
(c) Sign-On Bonus. The Company will pay to Executive five
hundred thousand dollars ($500,000) within thirty days the Employment
Commencement Date.
(d) Stock Option. As soon as practicable following the
Employment Commencement Date, Executive shall be granted a stock option (the
"Stock Option") to purchase a total of five hundred thousand (500,000) shares of
Company common stock with a per share exercise price equal to the fair market
value of the shares on the date of grant. The Stock Option shall be for a term
of ten (10) years (or shorter upon termination of employment relationship with
the Company) and, subject to accelerated vesting as set forth elsewhere herein,
shall vest as follows: twenty-five percent (25%) of the shares subject to the
Stock Option shall vest twelve (12) months after the Employment Commencement
Date and one forty-eighth (1/48th) of the shares subject to the Option shall
vest each month thereafter at the end of the month, so as to be one hundred
percent (100%) vested on the four (4) year anniversary of the Employment
Commencement Date, conditioned upon Executive's continued employment with the
Company as of each vesting date. The Stock Option may be exercised prior to
vesting by means of Executive entering into a full-recourse promissory note with
the Company bearing a fair market interest rate specific to Executive (the
"Note"), subject to Executive entering into a standard form of restricted stock
purchase agreement with the Company. Except as specified otherwise herein, this
option grant is in all respects subject to the terms, definitions and provisions
of the Company's 1997 Incentive Plan, as amended (the "Stock Plan") and the
standard form of stock option agreement thereunder (the "Option Agreement"),
which documents are incorporated herein by reference.
(e) Restricted Stock. As soon as practicable following the
Employment Commencement Date, Executive shall purchase one hundred thousand
(100,000) shares of the Company's Common Stock (the "Restricted Stock"), subject
to the 1997 Statutory Stock Option Plan, at a price of $0.01 per share, which is
equal to the par value of the stock. The stock shall be 100% vested on the
purchase date. As a condition to this purchase, Executive shall pay the Company
sufficient amounts to satisfy related tax-withholding requirements.
If Executive so requests, the Company will loan to Executive
such amounts as are necessary to pay all taxes due upon the purchase of the
Restricted Stock. The loan will be made subject to Executive executing a full
recourse promissory note and will be at the lowest interest rate permissible to
avoid imputed income and will be secured by those shares
2
of stock equal to the amount of the particular loan. The loans will be due two
years after the date of the loans.
(f) Severance.
1. Termination For Any Reason. Notwithstanding Executive's
entitlement to severance benefits under certain circumstances discussed below
in this Section 7(f), upon the termination of Executive's employment for any
reason, the Company shall pay Executive all Base Salary, bonus, and accrued
but unpaid vacation earned through the date of termination, reimburse
Executive for all necessary and reasonable expenses in accordance with
Section 4 and for any other expenses pursuant to this Agreement for which
reimbursement is still due, and continue Executive's benefits under the
Company's then-existing benefit plans and policies for so long as provided
under the terms of such plans and policies and as required by applicable law.
2. Upon Termination Other Than for Cause or Resignation for
Good Reason Prior to Change of Control. If, prior to a Change of Control,
Executive resigns his employment with the Company for Good Reason or
Executive's employment is terminated by the Company other than for (x) Cause,
(y) Executive's death, or (z) Executive's Total Disability, then, subject to
Executive executing, and not revoking, the Mutual Release of Claims attached
hereto as Exhibit A with the Company and not materially breaching the
provisions of Section 15 hereof, (1) Executive's Stock Option, as well as any
other stock options that he is granted by the Company, shall have their
vesting accelerated to receive an additional twelve (12) months of vesting,
(2) Executive shall receive 12 monthly payments, each equal to 1/12 of the
sum of the Executive's Base Salary plus his Target Bonus, less applicable
withholding, and otherwise in accordance with the Company's standard payroll
practices, (3) the Company shall pay the group health, dental and vision plan
continuation coverage premiums for Executive and his covered dependents under
Title X of the Consolidated Budget Reconciliation Act of 1985, as amended
("COBRA") through the lesser of (x) twelve (12) months from the date of
Executive's termination of employment, or (y) the date upon which Executive
and his covered dependents are covered by similar plans of Executive's new
employer; and (4) the Company shall provide Executive with all other Company
welfare plan and fringe benefits, and continued life insurance, in which
Executive participated prior to his termination through the lesser of (x)
twelve (12) months from the date of Executive's termination of employment, or
(y) the date upon which Executive and his covered dependents are covered by
similar plans of Executive's new employer, and if Executive is ineligible to
continue participating in one or more of such benefit plans or programs of
the Company, the Company shall provide Executive with such benefits on an
equivalent basis, including a full Tax Gross-Up to Executive (which, after
deduction of all applicable taxes, will leave a net amount equal to the tax
payments due) to the extent such benefits constitute taxable income to the
Executive but were provided to Executive on a non-taxable basis while
Executive was employed by the Company.
3. Upon Termination Other Than for Cause or Resignation for
Good Reason On or At Any Time Following Change of Control. If, on or at any
time following a Change of Control, Executive resigns his employment with the
Company for Good Reason, or Executive's employment with the Company is
terminated by the Company other than for (x) Cause, (y) Executive's death, or
(z) Executive's Total Disability, then, subject to
3
Executive executing, and not revoking, the Mutual Release of Claims attached
hereto as Exhibit A with the Company and not materially breaching the
provisions of Section 15 hereof, the Company shall provide Executive with all
of the severance benefits listed in Section 7(f)(ii), except that all of the
remaining unvested shares subject to Executive's Stock Option immediately
shall have their vesting accelerated in full, and if applicable the Company's
right to repurchase all of the same such shares immediately shall lapse.
4. Upon Termination Due to Death. In the event that
Executive's employment terminates due to his death, then an additional amount
of shares equal to fifty percent (50%) of the unvested shares subject to
Executive's Stock Option immediately shall have their vesting accelerated.
5. Resignation Other Than For Good Reason or Termination
for Cause. Except as otherwise specified in herein, in the event Executive
terminates his employment other than for Good Reason or Executive's
employment is terminated by the Company for Cause or due to Executive's Total
Disability, then all vesting any other equity compensation shall terminate
immediately and all payments of compensation by the Company to Executive
hereunder shall immediately terminate (except as to amounts already earned,
as specified in Section 7(f)(i) above).
6. Definitions.
Termination for Cause. For the purposes of this Agreement,
a termination of Executive's employment for "Cause" means a termination of
Executive's employment by the Company based upon a good faith determination by
the President that one or more of the following has occurred: a) Executive's
commission of a material act of fraud with respect to the Company in connection
with Executive carrying out his responsibilities as an employee, b) Executive's
conviction of, or plea of nolo contendere to, a felony, c) Executive's gross
misconduct in connection with the performance of his duties hereunder, or d)
Executive's material breach of his obligations under this Agreement; provided,
however, that with respect to clauses c) and d), the Company must first give
Executive a written notice and explanation specifying the basis for the
President's determination of the existence of "Cause" for termination and then
provide Executive with at least thirty (30) days after delivery of such written
notice and explanation to cure the alleged basis for the President's
determination. A termination of Executive's employment by the Company for any
other reason or under any other circumstances, except Executive's death or Total
Disability, will be a termination other than for Cause.
Change of Control. For the purposes of this Agreement,
"Change of Control" is defined as: Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company's then
outstanding voting securities; or A change in the composition of the Board
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either i) are directors of the Company as of the date hereof, or
ii) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or The consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
4
outstanding immediately prior thereto continuing to represent (either by
remaining out-standing or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or The consummation
of the sale by the Company of all or substantially all of the Company's assets.
Resignation for Good Reason. For the purposes of this
Agreement, a resignation for "Good Reason" means the resignation by Executive of
his employment within ninety (90) days of the occurrence of any one or more the
following events without Executive's written consent, which consent may be
withheld in Executive's sole discretion: a) a reduction by the Company or a
successor in Executive's Base Salary and/or Target Bonus, b) a material
reduction by the Company or a successor in Executive's benefits, c) a reduction
by the Company or a successor in Executive's title and/or a material reduction
in Executive's authority and/or duties, d) a change in Executive's reporting
relationship such that he no longer reports directly to the President or CEO of
the Company's successor; e) the requirement that Executive relocate more than
thirty-five (35) miles from his then-current office location.
Total Disability. For the purposes of this Agreement,
"Total Disability" shall mean Executive's mental or physical impairment which
prevents Executive from performing the responsibilities and duties of his
position for 180 consecutive days or six (6) months in the aggregate during any
twelve (12) month period. Any question as to the existence or extent of
Executive's mental or physical impairment upon which Executive and the Company
cannot agree shall be resolved by a qualified independent physician who is an
acknowledged expert in the area of the mental or physical impairment, selected
in good faith by the Board and approved by Executive, which approval shall not
unreasonably be withheld. Upon the existence and required duration of such Total
Disability, the Company may then terminate Executive's employment for such
reason by giving Executive written notice of termination for such reason.
7. Assignment. This Agreement shall be binding upon and
inure to the benefit of (a) the heirs, beneficiaries, executors and legal
representatives of Executive upon Executive's death and (b) any successor of the
Company. Any such successor of the Company shall be deemed substituted for the
Company under the terms of this Agreement for all purposes. As used herein,
"successor" shall include any person, firm, corporation or other business entity
which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires all or substantially all of the assets or business of the
Company. None of the rights of Executive to receive any form of compensation
payable pursuant to this Agreement shall be assignable or transferable except
through a testamentary disposition or by the laws of descent and distribution
upon the death of Executive. Any attempted assignment, transfer, conveyance or
other disposition (other than as aforesaid) of any interest in the rights of
Executive to receive any form of compensation hereunder shall be null and void.
8. Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given if (i) delivered personally or by facsimile, (ii) one (1) day after being
sent by Federal Express or a similar commercial overnight service, or (iii)
three (3) days after being mailed by registered or certified mail, return
receipt requested, prepaid and addressed to the parties or their successors in
interest at the following addresses, or at such other addresses as the parties
may designate by written notice in the manner aforesaid:
5
If to the Company: Networks Associates
00000 Xxxxxx Xxxx
Xxxxxx, XX 00000
Attn: General Counsel
If to Executive: Art Matin
at the last residential address known by the Company.
9. Severability. In the event that any provision hereof
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
10. Proprietary Information Agreement. Executive agrees to
enter into the Company's standard Employee Inventions and Proprietary Rights
Assignment Agreement (the "Proprietary Information Agreement") upon commencing
employment hereunder, as modified so as not to conflict with the provisions of
this Agreement.
11. Indemnification Agreement. Executive will be offered an
Indemnification Agreement in the form attached as Exhibit B.
12. Entire Agreement. This Agreement, the Stock Plan, the
Option Agreement, the Restricted Stock Purchase Agreement, the Indemnification
Agreement, the employee benefit plans referred to in Section 2 and the
Proprietary Information Agreement represent the entire agreement and
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersede and replace any and all
prior agreements and understandings concerning Executive's employment
relationship with the Company.
13. Non-Binding Mediation, Arbitration and Equitable
Relief.
(a) The parties agree to make a good faith attempt to
resolve any dispute or claim arising out of or related to this Agreement
through negotiation.
(b) In the event that any dispute or claim arising out
of or related to this Agreement is not settled by the parties hereto, the
parties will attempt in good faith to resolve such dispute or claim by
non-binding mediation in Santa Xxxxx County, California to be conducted by one
mediator belonging to the American Arbitration Association. The mediation shall
be held within thirty (30) days of the request therefor. The costs of the
mediation shall be borne equally by the parties to the mediation.
(c) Executive and the Company agree that, to the extent
permitted by law, any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity, construction,
performance, breach, or termination thereof which has not been resolved by
negotiation or mediation as set forth in Section 13(a) and 13(b) shall be
finally settled by binding arbitration to be held in Santa Xxxxx County,
California in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be confidential, final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered under a
6
protective order on the arbitrator's decision in any court having jurisdiction.
The arbitrator shall apply California law to the merits of any dispute or claim,
without reference to rules of conflict of law. The arbitration proceedings shall
be governed by federal arbitration law and by the Rules, without reference to
state arbitration law. Executive and the Company hereby expressly consent to the
personal jurisdiction of the state and federal courts located in California for
any action or proceeding arising from or relating to this Agreement and/or
relating to any arbitration in which the parties are participants. The Company
shall pay the costs of the arbitration filing and hearing fees and the cost of
the arbitrator, and other expense or cost that is unique to arbitration.
(d) Executive understands that nothing in Section 13
modifies Executive's at-will status. Either the Company or Executive can
terminate the employment relationship at any time, with or without cause.
EXECUTIVE HAS READ AND UNDERSTANDS SECTION 13, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES, TO THE EXTENT PERMITTED BY LAW, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT
OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT
NOT LIMITED TO, THE FOLLOWING CLAIMS: ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE
OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE
COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL
MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR
PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.
ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE
CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;
ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
14. Advisor & Legal Fee Reimbursement. The Company agrees
to directly pay Executive's reasonable advisor and legal fees associated with
entering into this Agreement up to $5,000 upon receiving invoices for such
services.
15. Covenants Not to Compete and Not to Solicit.
(a) Covenant Not to Compete. In consideration for the
benefits Executive is to receive herein under Section 4(f) Executive agrees
that, until the end of the twelve month period following the date of his
termination of employment with the Company for
7
any reason or no reason, Executive will not directly engage in (whether as an
employee, consultant, proprietor, partner, director or otherwise), or have any
ownership interest in, or participate in the financing, operation, management or
control of, any of the following companies: Axent, Agilent, Checkpoint, Concord,
Entrust, ISS, Symantec, Remedy, Heat, Security Dynamics, NetScout, Trend Micro,
Tivoli, Wandel and Goltermann, Intrusion, RSA, Secure Computing and Computer
Associates. Ownership of less than 3% of the outstanding voting stock of any of
the aforementioned companies will not constitute a violation of this provision.
(b) Covenant Not to Solicit. In consideration for the
benefits Executive is to receive herein Executive agrees that he will not, at
any time during the twelve month period following his termination date, directly
or indirectly solicit any individuals to leave the Company's employ for any
reason or interfere in any other manner with the employment relationships at the
time existing between the Company and its current or prospective employees.
Representations. The parties intend that the covenants contained in Section
13(a) and (b) shall be construed as a series of separate covenants, one for each
county, city and state (or analogous entity) and country of the world. If, in
any judicial proceeding, a court shall refuse to enforce any of the separate
covenants, or any part thereof, then such unenforceable covenant, or such part
thereof, shall be deemed eliminated from this Agreement for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants,
or portions thereof, to be enforced.
16. Reformation. In the event that the provisions of this
Section 13 should ever be deemed to exceed the time or geographic limitations,
or scope of this covenant, permitted by applicable law, then such provisions
shall be reformed to the maximum time or geographic limitations, as the case may
be, permitted by applicable laws.
17. Reasonableness of Covenants. Employee represents that
he (i) is familiar with the covenant not to compete and the covenant not to
solicit, and (ii) is fully aware of his obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants.
18. No Oral Modification, Cancellation or Discharge. This
Agreement may only be amended, canceled or discharged in writing signed by
Executive and the CEO.
19. Withholding. The Company shall be entitled to withhold,
or cause to be withheld, from payment any amount of withholding taxes required
by law with respect to payments made to Executive in connection with his
employment hereunder.
20. Governing Law. This Agreement shall be governed by the
laws of the State of California without reference to rules relating to conflict
of law.
21. Acknowledgment. Executive acknowledges that he has had
the opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
8
IN WITNESS WHEREOF, the undersigned have executed this Agreement:
NETWORKS ASSOCIATES, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx
Executive Vice President and General Counsel
EXECUTIVE
/s/ Art Matin
--------------------------------------------
Art Matin
9
