McAFEE CONFIRMS PROPOSAL TO ACQUIRE CHEYENNE SOFTWARE; McAfee Surprised by Cheyenne Turnabout.

SANTA CLARA, Calif.--(BUSINESS WIRE)--April 16, 1996--McAfee (Nasdaq: MCAF) today confirmed its proposal to acquire storage management pioneer Cheyenne Software (Amex: CYE) of Roslyn Heights, New York. The proposed combination would create the world's fifth largest PC software entity, with combined 1996 revenue of approximately $340,000,000, according to current financial analyst estimates.

Under the terms of McAfee's proposed acquisition, Cheyenne shareholders would receive McAfee common stock worth approximately $27.50 for each share of Cheyenne stock held, based upon McAfee's current stock price. The proposed acquisition would be valued at approximately $1 billion.

"This combination is in the best interest of both companies' shareholders and customers," said Bill Larson, McAfee president, CEO, and chairman. "Consistent with McAfee's disciplined acquisition history, this acquisition would be prima facia accretive even before allowing for the significant opportunities for cost reductions and revenue synergies. We are surprised by Cheyenne management's sudden turnabout and public rejection of our previously friendly merger discussions. We are especially disappointed with Cheyenne management's public disclosure of our private conversations."

McAfee also revealed today that it has been conducting conversations with Cheyenne management regarding its interest in acquiring Cheyenne since November, 1995. McAfee made a similar proposal in February of this year, prior to Cheyenne's announcement of its failure to meet financial analyst expectations for its most recent quarter. Cheyenne's market value declined 35% the day of their announcement. McAfee's latest offer was delivered to Mr. ReiJane Huai, Cheyenne's CEO, on April 13 in anticipation of Cheyenne's April 15 board meeting and the expected continuation of merger discussions.

In addition to the acquisition being financially accretive, it has compelling strategic implications for the combined companies. Both companies sell to a common target base of Fortune 1000 network administrators and both are leaders in their respective markets. While Cheyenne is the world leader in storage management software, McAfee is the world leader in anti-virus software and the U.S. leader in integrated PC LAN management suites.

The merger would combine complementary products, channels, and geographies of operation. Cheyenne's sales and distribution are approximately 100% channel-based, with 60% of revenue coming from outside North America. McAfee currently derives approximately 80% of its revenue from direct channels and 75% of its revenue from North America, where it has significantly greater revenue than Cheyenne.

The Company believes this combination would allow McAfee to continue its track record as one of the software industry's most profitable companies with approximate post-merger pre-tax operating margins in excess of 35% before cost reductions. McAfee experienced revenue growth of 80% from fiscal year 1994 to fiscal year 1995, and remains comfortable with current analyst expectations for a further 60% increase in revenues for calendar 1996.

"This merger, in short, would create an extraordinary double win for shareholders and customers," continued Larson. "We have received numerous calls from Cheyenne and McAfee shareholders expressing their enthusiasm for the combination. We plan to discuss our proposal with Cheyenne and McAfee shareholders and decide what, if any, further actions are appropriate."

The statements regarding the accretive nature of the combination, the projected post-merger pre-tax operating margins and projected revenue growth and synergies are forward looking statements. These forward looking statements involve risks and uncertainties including the dependence of McAfee on the continued growth in the anti-virus market and the emerging network management market; risks associated with product development and acquisition; risks associated with the acceptance of new products; the impact of competitive products and pricing; risks associated with the integration of McAfee and Cheyenne; risks associated with the financial performance of Cheyenne; and other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended December 31, 1995.

Founded in 1989, McAfee is a leading worldwide vendor of Network Security and Management products for enterprise networks. The Company is also a leader in Internet and Web-based electronic software distribution. McAfee is headquartered in Santa Clara, California and can be reached by phone at [phone] or by fax at [phone]. McAfee's Web address is http://www.mcafee.com.

CONTACT: McAfee

Bill Larson, 408/980-3637

or

Dovetail Public Relations 

Mark Coker, 408/395-3600