Edgar Filing: NETWORKS ASSOCIATES INC/

PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(3)
TO PROSPECTUS DATED FEBRUARY 12, 2002 REGISTRATION NO. 333-73112

$72,922,000 OF NETWORKS ASSOCIATES, INC.
5.25% CONVERTIBLE SUBORDINATED NOTES DUE 2006 AND THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES.

This Prospectus Supplement, together with the Prospectus listed above,
is to be used by certain holders of the above-referenced securities or by their
transferees, pledges, donees or their successors in connection with the offer
and sale of the above-referenced securities.

The table captioned "Selling Securityholders" commencing on page 49 and
the "Plan of Distribution" section commencing on page 52 of the Prospectus are
hereby amended to reflect the following additions and changes.

SELLING SECURITYHOLDERS

We originally issued the notes in a private placement to Lehman
Brothers Inc. in August 2001 pursuant to Section 4(2) of the Securities Act of
1933. The notes were sold by Lehman Brothers Inc. to purchasers that are
qualified institutional buyers pursuant to Rule 144A. Those purchasers may have
made subsequent transfers of the notes pursuant to Rule 144A. We have no
knowledge whether the holders listed below received the notes on the initial
distribution or through subsequent transfers after the close of the initial
private placement. Selling securityholders may offer and sell the notes and the
underlying common stock pursuant to this prospectus.

The following table contains information, as of March 22, 2002, with
respect to the selling securityholders and the principal amount of notes and the
underlying common stock beneficially owned by each selling securityholder that
may be offered using this prospectus.

PRINCIPAL
AMOUNT AT
MATURITY OF NUMBER OF
NOTES SHARES OF
BENEFICIALLY PERCENTAGE COMMON STOCK PERCENTAGE OF
OWNED THAT MAY OF NOTES THAT MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING SOLD(1) OUTSTANDING (2)
------------------------------------------------------- -------------- ----------- ------------ ---------------

Allstate Insurance (3) ................................ 350,000 * 19,369 *
Allstate Life Insurance (3) ........................... 200,000 * 11,068 *
Arbitex Master Fund LP. ............................... 50,000 * 2,767 *
Arkansas Teachers Retirement System (4) ............... 2,143,000 * 118,594 *
Bank Austria Cayman Islands, Ltd. (5) ................. 500,000 * 27,670 *
Baptist Health of South Florida (4) ................... 356,000 * 19,701 *
BNP Paribas Equity Strategies, SNC (6) ................ 442,000 * 24,460 *
CooperNeff Convertible Strategies Fund, LP (6) ........ 170,000 * 9,408 *
Engineers Joint Pension Fund (4) ...................... 291,000 * 16,104 *
Innovest Fianzdienstleistungs AG (4) .................. 350,000 * 19,369 *
JAL Ventures, Inc. .................................... 250,000 * 13,835 *
Lehman Brothers Inc. .................................. 25,236,000 7.3% 1,396,569 1.0%
Lincoln National Global Asset Allocation Fund, Inc. (7) 52,000 * 2,878 *
Lumberman's Mutual Casualty (4) ....................... 305,000 * 16,879 *
Motion Pictures Industry (4) .......................... 340,000 * 18,816 *
Nicholas Applegate Convertible Fund (4) ............... 898,000 * 49,696 *
Physicians Life (4) ................................... 110,000 * 6,087 *
Putnam Asset Allocation Funds - Balanced Portfolio (7) 428,000 * 23,686 *
Putnam Asset Allocation Funds - Conservative
Portfolio (7) ......................................... 334,000 * 18,484 *
Putnam Convertible Income - Growth Trust (7) .......... 2,940,000 * 162,701 *
Putnam Convertible Opportunities and Income Trust (7) . 110,000 * 6,087 *
Putnam Variable Trust - Putnam VT Global Asset
Allocation Fund (7) ................................... 104,000 * 5,755 *
RAM Trading, Ltd. ..................................... 19,985,000 5.8% 1,105,977 *
RCG Halifax Master Fund, Ltd. (5) ..................... 500,000 * 27,670 *
RCG Latitude Master Fund, Ltd. (5) .................... 2,000,000 * 110,681 *
RCG Multi Strategy, LP (5) ............................ 2,000,000 * 110,681 *

San Diego City Retirement (4) ......................... 673,000 * 37,244 *
San Diego County Convertible (4) ...................... 1,028,000 * 56,890 *
Screen Actors Guild Pension Convertible (4) ........... 308,000 * 17,045 *
Sturgeon Limited (6) .................................. 58,000 * 3,210 *
Transamerica Insurance Co. of Iowa (8) ................ 1,000,000 * 55,340 *
Transamerica Life Insurance & Annuities Co. (8) ....... 6,500,000 1.9% 359,712 *
Transamerica Occidental Life (8) ...................... 1,500,000 * 83,011 *
Wake Forest University (4) ............................ 422,000 * 23,354 *
Writers Guild -- Industry Health Fund (4) ............. 184,000 * 10,183 *
Wyoming State Treasurer (4) ........................... 605,000 * 33,481 *

----------

* Less than 1%.

(1) Assumes conversion of all of the holder's notes at a conversion price
of $18.07 per share of common stock. However, this conversion price
will be subject to adjustment as described under "Description of Notes
-- Conversion of Notes." As a result, the amount of common stock
issuable upon conversion of the notes may increase or decrease in the
future.

(2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act using
140,598,822 shares of common stock outstanding as of December 31, 2001.
In calculating this amount, we treated as outstanding the number of
shares of common stock issuable upon conversion of all of that
particular holder's notes. However, we did not assume the conversion of
any other holder's notes.

(3) Allstate Investments, LLC has investment control over the securities
beneficially owned by these securityholders.

(4) Nicholas Applegate Capital Management has investment control over the
securities beneficially owned by these securityholders.

(5) Ramius Capital Group has investment control over the securities
beneficially owned by these securityholders.

(6) CooperNeff Advisors, Inc. has investment discretion over the securities
beneficially owned by these securityholders.

(7) Putnam Investments has investment control over the securities
beneficially owned by these securityholders.

(8) Transamerica Investment Management, LLC has investment control over the
securities beneficially owned by these securityholders.

We prepared this table based on the information supplied to us by the
selling securityholders named in the table.

The selling securityholders listed in the above table may have sold or
transferred, in transactions exempt from the registration requirements of the
Securities Act, some or all of their notes since the date on which the
information in the above table is presented. Information about the selling
securityholders may change from over time.

Because the selling securityholders may offer all or some of their
notes or the underlying common stock from time to time, we cannot estimate the
amount of the notes or underlying common stock that will be held by the selling
securityholders upon the termination of any particular offering. See "Plan of
Distribution."

PLAN OF DISTRIBUTION

We will not receive any of the proceeds of the sale of the notes and
the underlying common stock offered by this prospectus. The notes and the
underlying common stock may be sold from time to time to purchasers:

- directly by the selling securityholders; or

- through underwriters, broker-dealers or agents who may receive
compensation in the form of discounts, concessions or
commissions from the selling securityholders or the purchasers
of the notes and the underlying common stock.

The selling securityholders and any such broker-dealers or agents who
participate in the distribution of the notes and the underlying common stock may
be deemed to be "underwriters." As a result, any profits on the sale of the
notes and underlying common stock by selling securityholders and any discounts,
commissions or concessions received by any such broker-dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
If the selling securityholders were to deemed underwriters, the selling
securityholders may be subject to certain statutory liabilities of, including,
but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Exchange Act.

To our knowledge, Lehman Brothers Inc., BNP Paribas Brokerage Services,
Inc., CIBC World Markets, Deutsche Banc Alex Brown Inc, Goldman Sachs & Company,
Morgan Stanley, and SG Cowen Securities Corporation are the only other selling
securityholders who are registered broker-dealers. As such, they are
underwriters of the notes. We do not have a material relationship with any of
these broker-dealers and none of these broker-dealers has the right to designate
or nominate a member or members of our board of directors. These securityholders
purchased their notes in the open market, not directly from us, and we are not
aware of any underwriting plan or agreement, underwriters' or dealers'
compensation, or passive market-making or stabilizing transactions involving the
purchase or distribution of these securities by these securityholders.

If the notes and underlying common stock are sold through underwriters
or broker-dealers, the selling securityholders will be responsible for
underwriting discounts or commissions or agent's commissions.

The notes and underlying common stock may be sold in one or more
transactions at:

- fixed prices;

- prevailing market prices at the time of sale;

- varying prices determined at the time of sale; or

- negotiated prices.

These sales may be effected in transactions:

- on any national securities exchange or quotation service on
which the underlying common stock may be listed or quoted at
the time of the sale, including the New York Stock Exchange,
in the case of the common stock;

- in the over-the-counter market;

- in transactions otherwise than on such exchanges or services
or in the over-the-counter market; or

- through the writing of options.

These transactions may include block transactions or crosses. Crosses
are transactions in which the same broker acts as an agent on both sides of the
trade.

In connection with sales of the notes and underlying common stock or
otherwise, the selling securityholders may enter into hedging transactions with
broker-dealers. These broker-dealers may in turn engage in short sales of the
notes and underlying common stock in the course of hedging their positions. The
selling securityholders may also sell the notes and underlying common stock
short and deliver notes and underlying common stock to close out short
positions, or loan or pledge notes and underlying common stock to broker-dealers
that in turn may sell the notes and underlying common stock.

To our knowledge, there are currently no plans, arrangements or
understandings between any selling securityholders and any underwriter,
broker-dealer or agent regarding the sale of the notes and the underlying common
stock by the selling securityholders. Selling securityholders may not sell any
or all of the notes and the underlying common stock offered by them pursuant to
this prospectus. In addition, we cannot assure you that any such selling
securityholder will not transfer, devise or gift the notes and the underlying
common stock by other means not described in this prospectus.

Our common stock trades on the New York Stock Exchange (NYSE) under the
symbol "NET." We do not intend to apply for listing of the notes on any
securities exchange or for quotation through NYSE. Accordingly, no assurance can
be given as to the development of liquidity or any trading market for the notes.

There can be no assurance that any selling securityholder will sell any
or all of the notes or underlying common stock pursuant to this prospectus. In
addition, any notes or underlying common stock covered by this prospectus that
qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be
sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.

The selling securityholders and any other person participating in such
distribution will be subject to the Exchange Act. The Exchange Act rules
include, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the notes and the underlying common stock by the
selling securityholders and any other such person. In addition, Regulation M of
the

Exchange Act may restrict the ability of any person engaged in the distribution
of the notes and the underlying common stock to engage in market-making
activities with respect to the particular notes and the underlying common stock
being distributed for a period of up to five business days prior to the
commencement of such distribution. This may affect the marketability of the
notes and the underlying common stock and the ability of any person or entity to
engage in market-making activities with respect to the notes and the underlying
common stock.

Pursuant to the registration rights agreement filed as an exhibit to
this registration statement, we and the selling securityholders will be
indemnified by the other against certain liabilities, including certain
liabilities under the Securities Act or will be entitled to contribution in
connection with these liabilities.

We have agreed to pay substantially all of the expenses incidental to
the registration, offering and sale of the notes and underlying common stock to
the public other than commissions, fees and discounts of underwriters, brokers,
dealers and agents.

The date of this Prospectus Supplement is March 22, 2002.