August 18, 2010 To: Todd Gebhart McAfee, Inc. Special Bonus Program
Exhibit 10.26
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August 18, 2010
To: Xxxx Xxxxxxx
McAfee, Inc. Special Bonus Program
We are pleased to provide you with the potential to earn certain bonus opportunities under the
McAfee, Inc. Special Bonus Program, which is an incentive and retention program for selected McAfee
leaders. We are offering you the opportunity to earn the bonuses described in this letter agreement
because we recognize that you are critical to the success of McAfee’s future business operations
and you have the potential to make a significant impact on McAfee’s future growth.
1. Time-Based Retention Bonuses:
A. First Retention Bonus. If you are an active employee (including on a statutory or approved
leave of absence) of Intel Corporation or any of its subsidiaries (“the Intel group”) on July 31,
2012 (the “First Retention Date”), you will receive a retention bonus in the amount of US$175,000
(the “First Retention Bonus”). If your employment is terminated without “cause” prior to the First
Retention Date, you will be entitled to receive a pro-rated amount of your First Retention Bonus,
subject to your compliance with Section 1(C) below. The pro-rated amount will be determined by
multiplying your First Retention Bonus amount by a fraction with the numerator equal to the number
of days that have elapsed since the closing of Intel’s purchase of McAfee by merger of McAfee with
a subsidiary of Intel (the “Closing”) and the denominator equal to the number of days between, and
inclusive of, the Closing and July 31, 2012. If your employment is terminated for “cause” or you
voluntarily terminate your employment prior to the First Retention Date, you will not receive any
portion of the First Retention Bonus, even if you are rehired.
For the purpose of this letter, “cause” shall have the meaning of such term as currently set
forth in the Change of Control Retention Plan previously adopted by McAfee effective as of December
18, 2008 and renewed in February 2010 (the “Plan”).
B. Second Retention Bonus. In addition, if you are an active employee (including on a
statutory or approved leave of absence) of the Intel group on July 31, 2013 (the “Second Retention
Date”), you will receive a second retention bonus in the amount of US$175,000 (the “Second
Retention Bonus”). If your employment is terminated without “cause” after the First Retention Date
and prior to the Second Retention Date, you will be entitled to receive a pro-rated
amount of your Second Retention Bonus. The pro-rated amount will be determined by multiplying your Second
Retention Bonus amount by a fraction with the numerator equal to the number of days that have
elapsed since the First Retention Date and the denominator equal to 365. If your employment is
terminated for “cause” or you voluntarily terminate your employment prior to the Second Retention
Date, you will not receive any portion of the Second Retention Bonus, even if you are rehired.
C. Release. If your employment is terminated without “cause” prior to the First Retention
Date or the Second Retention Date, as applicable, payment of the pro-rated portion of the First
Retention Bonus or the Second Retention Bonus, as determined above, shall be subject to you signing
and not revoking the release of claims attached as Exhibit B to the Plan (the “Release”) and
provided that such Release is effective within sixty (60) days following your termination of
employment. Payment of the pro-rated portion of the First Retention Bonus or the Second Retention
Bonus, as applicable, shall be made within seven (7) calendar days after the effective date of the
Release. In the event the termination occurs at a time during the calendar year where it would be
possible for the Release to become effective in the calendar year following the calendar year in
which your termination occurs, any portion of the First Retention Bonus or the Second Retention
Bonus, as applicable, that would be considered Deferred Compensation Separation Benefits (as
defined in Section 5 of the Plan) will be paid on the first payroll date to occur during the
calendar year following the calendar year in which such termination occurs, or such later time as
required by Section 5 of the Plan.
2. Performance Incentive Bonuses:
A. First Incentive Bonus. In addition, if you are an active employee (including on a statutory
or approved leave of absence) of the Intel group on December 31, 2011 (the “First Incentive Date”),
you will be eligible to receive an incentive bonus, the maximum amount of which will be US$262,500
(the “First Incentive Bonus”). The actual amount of the First Incentive Bonus paid shall be based
on the extent to which the performance metrics set forth on Exhibit A, attached hereto, have been
achieved for the 2011 calendar year, as determined by the Senior Vice President and General Manager
of the Software and Services Group of Intel, in his or her sole discretion. Notwithstanding the
foregoing, if your employment is terminated without “cause” prior to the First Incentive Date, you
will be entitled to receive a pro-rated amount of the First Incentive Bonus, provided that you
timely execute and do not revoke a Release in accordance with Section 2(C) below. The pro-rated
amount will be determined by multiplying (i) the product of the First Incentive Bonus amount and a
fraction with the numerator equal to the number of days that have elapsed since January 1, 2011,
and the denominator equal to 365 by (ii) the extent to which the performance metrics set forth on
Exhibit A, attached hereto, are achieved for the 2011 calendar year, as determined by the Senior
Vice President and General Manager of the Software and Services Group of Intel, in his or her sole
discretion.
If your employment is terminated for “cause” or you voluntarily terminate your employment
prior to the First Incentive Date, you will not receive any portion of the First Incentive Bonus,
even if you are rehired.
B. Second Incentive Bonus. In addition, if you are an active employee (including on a
statutory or approved leave of absence) of the Intel group as of January 1, 2012 and remain so
through December 31, 2012, you will be eligible to receive an incentive bonus, the maximum amount
of which will be US$262,500 (the “Second Incentive Bonus). The actual amount of the Second
Incentive Bonus paid shall be
based on the extent to which the performance metrics set forth on Exhibit A, attached hereto,
have been achieved for the 2012 calendar year, as determined by the Senior Vice President and
General Manager of the Software and Services Group of Intel, in his or her sole discretion.
Notwithstanding the foregoing, if your employment is terminated without “cause” after the First
Incentive Date and prior to the Second Incentive Date, you will be entitled to receive a pro-rated
amount of the Second Incentive Bonus, provided that you timely execute and do not revoke a Release
in accordance with Section 2(C) below. The pro-rated amount will be determined by multiplying (i)
the product of the Second Incentive Bonus amount and a fraction with the numerator equal to the
number of days that have elapsed since January 1, 2012, and the denominator equal to 365 by (ii)
the extent to which the performance metrics set forth on Exhibit A, attached hereto, are achieved
for the 2012 calendar year, as determined by the Senior Vice President and General Manager of the
Software and Services Group of Intel, in his or her sole discretion.
If your employment is terminated for “cause” or you voluntarily terminate your employment
prior to the Second Incentive Date, you will not receive any portion of the Second Incentive Bonus,
even if you are rehired
C. Release. If your employment is terminated without “cause” prior to the First Incentive
Date or the Second Incentive Date, as applicable, payment of the pro-rated portion of the First
Incentive Bonus or the Second Incentive Bonus, as applicable, determined in accordance with Section
2(A) or 2(B), respectively, shall be subject to you signing and not revoking the Release and
provided that such Release is effective within sixty (60) days following your termination of
employment. Subject to Section 5 of the Plan, payment of the pro-rated portion of the First
Incentive Bonus or the Second Incentive Bonus, as applicable, shall be made within seven (7)
calendar days after the effective date of the Release or, if later, following the date achievement
is determined in accordance with Section 2(A) or 2(B) above, as applicable.
3. Payment of Bonuses
Each of the bonuses described above will be paid:
| • | in a lump sum, | ||
| • | in your regular payroll currency, | ||
| • | according to the Intel group’s standard payroll practices, |
| • | subject to tax withholding and other applicable deductions, | ||
| • | upon a regularly scheduled payroll date, | ||
| • | except as otherwise provided in Section 1(C) above, with respect to the retention bonuses, within thirty (30) days following the First Retention Date or the Second Retention Date, as applicable, and | ||
| • | except as otherwise provided in Section 2(C) above, with respect to the incentive bonuses, within sixty (60) days following the First Incentive Date or the Second Incentive Date, as applicable |
4. Change of Control Retention Plan
Pursuant to the terms of the Plan, McAfee and you have entered into a Participation Agreement
under the Plan. The Plan and your Participation Agreement shall continue to be in full force and
effect, including with respect to the conversion to time-based vesting of McAfee Stock Options,
McAfee RSUs and McAfee PSUs that vest on the basis of performance as described in Section 4(C) of
the Plan, until the Plan expires in accordance with Section 9.A(1) of the Plan, except that you,
McAfee and Intel agree that, other than your McAfee Stock Options, McAfee RSUs and McAfee PSUs that
were granted prior to the date the Merger Agreement was signed (August 18, 2010) and are assumed by
Intel pursuant to the Merger Agreement, no stock option, restricted stock units, performance stock
units or other equity incentive awards granted to you by McAfee or Intel shall be subject to the
accelerated vesting provisions of the Plan and your Participation Agreement.
You further agree and acknowledge that the Plan and your Participation Agreement permanently
superseded in its entirety all prior representations, understandings, undertakings or agreements
(whether oral or written and whether expressed or implied) of you and McAfee, including
specifically any severance payment provisions of any offer letter or similar arrangement entered
into between you and McAfee. After the expiration of the Plan, you will be eligible for severance
benefits only in accordance with McAfee’s then established plans; provided, however, that any such
severance benefits will be paid or provided at the same time and in the same form as similar
severance benefits would be paid or provided under the Plan.
5. Miscellaneous
This letter agreement will be effective as of the Closing. Consequently, if the Closing does
not occur, this letter agreement will have no further force or effect.
Please note that your employment with McAfee (and following the Closing, with the Intel group)
is and shall continue to be “at-will” and may be terminated at any time, with or without “cause”,
by either you, McAfee, and, following the Closing, Intel. This letter agreement does not
constitute an express or implied promise of continued employment with McAfee or, following the
Closing, the Intel group, for any period and does not alter your “at-will” employment status.
Except
as otherwise provided herein with respect to the retention and incentive bonuses, this
letter agreement further does not constitute an express or implied promise with respect to
compensation and benefits and McAfee (and, following the Closing, Intel) reserves the right to
modify compensation and benefits at any time, with or without “cause”. You retain any rights under
the Plan as modified herein.
The terms of this letter agreement cannot be modified except in a written document signed by
duly authorized officers of McAfee and Intel and you. If you agree to the terms of this letter
agreement, please sign below and return this letter to Xxxxx X. XxXxxx at McAfee, with a copy to
Xxxxx X. Xxxxx at Intel. The terms of this letter
agreement will expire if the letter agreement is not accepted, signed and returned by August
19, 2010. You may not assign your rights under this letter agreement to any other party (whether
by operation of law or otherwise).
This letter agreement will be governed by and construed in accordance with the laws of the
State of California (with the exception of its conflict of laws provisions).
Thank you in advance for your continued service to McAfee.
/s/ Xxxxx Xxxxx
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Date: August 18, 2010 | |
INTEL CORPORATION |
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By: XXXXX X. XXXXX |
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/s/ Xxxxx XxXxxx
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Date: August 18, 2010 |
By: XXXXX X. XXXXXX
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I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND AND THAT I AGREE TO EACH AND EVERY CLAUSE OF THE PRESENT DOCUMENT, AND THAT I AM FULLY SATISFIED.
Agreed and Accepted:
/s/ Xxxx Xxxxxxx
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Date: August 23, 2010 |
