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CYBERGUARD CORPORATION
NON-STATUTORY STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into as of the 4th
day of September, 1998, between CyberGuard Corporation (the "Corporation"), a
Florida corporation having its principal office in Ft. Lauderdale, Florida, and
____________ ("Director"), a director of the Corporation.
WHEREAS, the Corporation and the Director have previously entered into
one or more stock option agreement(s) as more fully described below ("Old
Options");
WHEREAS, in consideration of Director's agreement to fully terminate
all the Old Options, the Corporation hereby agrees to grant to Director a "New
Option" (as defined below) to completely replace the Old Options.
NOW THEREFORE, the Corporation and Director hereby agree as follows:
1. NEW OPTION. Under and subject to the provisions of the Corporation's
Stock Incentive Plan as in effect from time to time ("Plan"), the Corporation
hereby grants to Director a non-statutory option to purchase an aggregate of the
number of shares of Common Stock of the Corporation as set forth on Exhibit B
attached hereto at the price of U.S. $1.125 per share ("New Option"), subject to
the following conditions:
(a) The New Option shall not be exercisable to any extent
until and unless the Director shall have remained continuously as a
director of the Corporation until at least May 6, 1999; provided,
however, that if the Director's position as a director terminates
because of the Director's death, failure to be re-elected by the
shareholders, medical disability (with physician's written opinion
regarding disability to serve as a director) or removal from office
(including a resignation upon request of a purchaser of the
Corporation) after "Change of Control" (as defined in the Plan), then
the requirement that Director remain continuously as a director of the
Corporation until at least May 6, 1999 shall be waived by the
Corporation and the New Options shall become immediately exercisable
(to the extent they have not expired) and remain exercisable for the
time period stated in Exhibit B hereof.
(b) During the lifetime of the Director, the New Option shall
be exercisable only by the Director; after the Director's death, the
New Option shall be exercisable as described in the Plan.
(c) Notwithstanding any other provision of this Agreement, the
New Option shall expire in accordance with the schedule set forth on
Exhibit B hereof and shall not be exercisable thereafter.
(d) By executing this Agreement, Director acknowledges and
agrees that all Old Options are hereby fully and finally terminated,
are void and are of no further force or effect. The New Option granted
to Director herein replaces the Old Options in their entirety. As used
herein, the term "Old Option" shall mean all options, rights and option
agreements dated on or before September 3, 1998 between Corporation and
Director under which Director has the right to purchase shares of
Corporation Common Stock from the Corporation at a stated exercise
price per share (collectively, the "Old Options"). Without limiting the
generality of the foregoing sentence, attached hereto as Exhibit A is a
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description of the Old Options. Notwithstanding the attachment of
Exhibit A, it is the intention of the parties hereto that this
Agreement shall terminate all options, rights and option agreements
dated on or before September 3, 1998 between Corporation and Director
under which Director has the right to purchase shares of Corporation
Common Stock from the Corporation at a stated exercise price per share,
whether or not such options, warrants or agreements are listed on
Exhibit A.
2. EXERCISE OF NEW OPTION. The New Option may be exercised by
delivering to the Corporation at the office of the Corporate Secretary (i) a
written notice, signed by the person entitled to exercise the New Option,
stating the number of shares such person then elects to purchase hereunder, (ii)
payment in an amount equal to the full purchase price of the shares then to be
purchased, and (iii) in the event the New Option is exercised by any person
other than the Director, evidence satisfactory to the Corporation that such
person has the right to exercise the New Option. If it is required (in the
estimation of the Corporation), the Corporation also may require the payment of
any withholding or other applicable taxes at the time of exercise of the New
Option. Payment shall be made (a) in cash, (b) in previously acquired shares of
Common Stock of the Corporation, valued at their Fair Market Value on the day
preceding the exercise date of the New Option, or (c) in any combination of cash
and such shares. Shares tendered in payment of the purchase price which have
been acquired through an exercise of a stock option shall have been held at
least six (6) months prior to exercise of the New Option. Upon the due exercise
of the New Option, the Corporation shall issue in the name of the person
exercising the New Option, and deliver to the Director, one or more certificates
for the shares in respect of which the New Option shall have been so exercised.
The Director acknowledges that the Director does not have any rights as a
shareholder in respect of any shares as to which the New Option shall not have
been duly exercised and that no rights as a shareholder shall arise in respect
of any such shares until and except to the extent that a certificate or
certificates for such shares shall have been issued.
3. PROHIBITION AGAINST TRANSFER. The New Option and rights granted by
the Corporation under this Agreement are not transferable except by will or the
laws of descent and distribution. Without limiting the generality of the
foregoing, the New Option may not be assigned, transferred except as aforesaid,
pledged or hypothecated, shall not be assignable by operation of law, and shall
not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the New
Option contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon the New Option, shall be null and void and
without effect.
4. ADJUSTMENTS. In case there shall be a merger, reorganization,
consolidation, recapitalization, stock dividend, a change in corporate structure
such that shares of Common Stock are changed into or become exchangeable for a
larger or smaller number of shares, or an issuance of Common Stock by the
Corporation in exchange for which the Corporation (or its current shareholders,
on a pro-rata basis) does not receive cash or other property, the number of
shares subject to outstanding New Options shall be increased or decreased in
direct proportion to the increase or decrease in the number of shares of Common
Stock by reason of such change. The number of shares shall always be a whole
number, and the purchase price per share of any outstanding New Options shall,
in the case of an increase in the number of shares, be proportionately reduced,
and in the case of a decrease in the number of shares, shall be proportionately
increased.
(1) 5. COMMITTEE. The Corporation's Board of Directors and the
Committee administering the Plan shall have authority, subject to the express
provisions of the Plan as in effect from time to time, to construe this
Agreement and the Plan, to establish, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations in the judgment of
the Committee necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission
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or reconcile any inconsistency in this Agreement in the manner and to the extent
it shall deem expedient to carry the Plan into effect, and it shall be the sole
and final judge of such expediency.
6. INCORPORATION OF PLAN PROVISIONS. This Agreement is made pursuant to
the Plan, the terms and conditions of which are hereby incorporated by
reference. Capitalized terms not otherwise defined herein have the meanings set
forth in the Plan. In the event of a conflict between the terms of this
Agreement and the Plan, the terms of the Plan shall govern.
7. MISCELLANEOUS.
(i) Words such as "herein", "hereof" and "hereunder" when used in this
Agreement shall refer to this Agreement as a whole unless the context requires
otherwise.
(ii) This Agreement embodies the entire agreement and understanding of
the parties with respect to the Old Options and the New Options.
(iii) This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida.
(iv) THIS AGREEMENT MAY BE AMENDED OR MODIFIED ONLY IN A WRITTEN
DOCUMENT EXECUTED BY BOTH OF THE PARTIES HERETO.
(v) No waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing and signed by the party granting
such waiver and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given.
IN WITNESS WHEREOF, the parties hereto have executed this Stock Option
Agreement in duplicate as of the day and year first above written.
CYBERGUARD CORPORATION DIRECTOR
By:__________________________ __________________________
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Chairman
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CYBERGUARD CORPORATION
NON-STATUTORY STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into as of the
___ day of _________, 1999, between CyberGuard Corporation ("Corporation"), a
Florida corporation having its principal office in Ft. Lauderdale, Florida, and
_________, ("Employee") of the Corporation or one of its subsidiaries.
1. THE OPTION. Under and subject to the provisions of the Corporation's
Employee Stock Option Plan as in effect from time to time ("Plan"), the
Corporation hereby grants to Employee a non-statutory option to purchase an
aggregate of _________ shares of Common Stock of the Corporation at the price of
U.S. $_________ per share ("Option"), subject to the following conditions:
(a) The Option shall not be exercisable to any extent until
and unless the Employee shall have remained continuously in the employ
of the Corporation for one year from the date hereof. Nothing herein
shall limit or restrict the Corporation's rights to terminate the
Employee's employment.
(b) During the lifetime of the Employee, the Option shall be
exercisable only by the Employee, and (except when Section 2 is
applicable) only while the Employee continues as an employee of the
Corporation.
(c) Notwithstanding any other provision of this Agreement, the
Option shall expire no later than five years from the date hereof and
shall not be exercisable thereafter.
(d) The number of shares of Common Stock with respect to which
the Option may be exercised from time to time is limited to the
following percentages of the aggregate number of shares optioned
hereby:
(i) After the end of one year and prior to the
end of two years from the date hereof, not
more than thirty-three percent (33.333%);
(ii) After the end of two years and prior to the
end of three years from the date hereof, not
more than sixty-six percent (66.666%);
(iii) After the end of three years from the date
hereof, one-hundred percent (100%).
2. TERMINATION OF EMPLOYMENT
(a) DEATH. In the event of the death of the Employee, the
Option shall be (i) exercisable only by the executor or administrator
of the Employee's estate or by the person or persons to whom the
Employee's rights under the Option shall pass by the Employee's will or
the laws of descent and distribution, (ii) exercisable if and to the
extent that the Option was exercisable at the date of the Employee's
death and (iii) shall remain exercisable for the shorter of (a) one
year following Employee's death or (b) the remainder of the period of
exercisability as stated in Section 1(c).
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(b) DISABILITY. In the event of termination of Employee's
employment due to disability of the Employee, the Option shall be
exercisable by the Employee only to the extent that the Option was
exercisable at the date of such cessation of employment, and no more,
and shall remain exercisable for the shorter of (i) one year following
Employee's termination of employment or (ii) the remainder of the
period of exercisability as stated in Section 1(c).
(c) RETIREMENT. In the event of Retirement of the Employee,
the Option shall be exercisable by the Employee only to the extent that
the Option was exercisable at the date of such cessation of employment,
and no more, and shall remain exercisable for the shorter of (i) one
year following Employee's termination of employment or (ii) the
remainder of the period of exercisability as stated in Section 1(c).
The term "Retirement" is specially defined in the Plan; generally, a
termination in service from the Company will be covered by provisions
regarding terminations for reasons other than death, disability, or
Retirement, and not this paragraph.
(d) TERMINATION OF EMPLOYMENT. In the event of termination of
Employee's employment for reasons other than death, disability or
Retirement, the Option shall be exercisable by the Employee only to the
extent that it was exercisable at the date of such cessation of
employment, and no more, and shall remain exercisable for the shorter
of (i) three (3) months following Employee's termination of employment
or (ii) the remainder of the period of exercisability as stated in
Section 1(c).
(e) CHANGE OF CONTROL. If a "Change of Control" (as defined in
the Plan) shall occur and Employee's employment is thereafter
terminated by the Corporation, then the Options shall become 100%
immediately exercisable in full (to the extent that they otherwise have
not expired) and shall remain exercisable for the shorter of (i) one
year following Employee's termination of employment or (ii) the
remainder of the period of exercisability as stated in Section 1(c).
Notwithstanding the foregoing provisions of this section 2, in the event that:
(x) the Employee has entered into an Employment Agreement with the Corporation
(the "Employment Agreement"); and (y) if Employee's Employment Agreement is
terminated under circumstances that give Employee a longer period of exercise or
greater rights than those set forth in this Agreement, then the terms and
conditions governing exercisability and continuation of the Option after
termination of Employment contained in the Employment Agreement shall supersede
those set forth in this Agreement.
3. EXERCISE OF OPTION. The Option may be exercised by delivering to the
Corporation at the office of the Corporate Secretary (a) a written notice,
signed by the person entitled to exercise the Option, stating the number of
shares such person then elects to purchase hereunder, (b) payment in an amount
equal to the full purchase price of the shares then to be purchased, and (c) in
the event the Option is exercised by any person other than the Employee,
evidence satisfactory to the Corporation that such person has the right to
exercise the Option. If it is required (in the estimation of the Corporation),
the Corporation also may require the payment of any withholding or other
applicable taxes at the time of exercise of the Option. Payment shall be made
(i) in cash, (ii) in previously acquired shares of Common Stock of the
Corporation, valued at their Fair Market Value on the day preceding the exercise
date of the Option, or (iii) in any combination of cash and such shares. Shares
tendered in payment of the purchase price which have been acquired through an
exercise of a stock option shall have been held at least six (6) months prior to
exercise of the Option.
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Upon the due exercise of the Option, the Corporation shall issue in the name of
the person exercising the Option, and deliver to the Employee, one or more
certificates for the shares in respect of which the Option shall have been so
exercised. The Employee acknowledges that the Employee does not have any rights
as a shareholder in respect of any shares as to which the Option shall not have
been duly exercised and that no rights as a shareholder shall arise in respect
of any such shares until and except to the extent that a certificate or
certificates for such shares shall have been issued.
4. PROHIBITION AGAINST TRANSFER. The Option and rights granted by the
Corporation under this Agreement are not transferable except by will or the laws
of descent and distribution. Without limiting the generality of the foregoing,
the Option may not be assigned, transferred except as aforesaid, pledged or
hypothecated, shall not be assignable by operation of law, and shall not be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, or the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.
5. ADJUSTMENTS. In case there shall be a merger, reorganization,
consolidation, recapitalization, stock dividend, a change in corporate structure
such that shares of Common Stock are changed into or become exchangeable for a
larger or smaller number of shares, or an issuance of Common Stock by the
Corporation in exchange for which the Corporation (or its then current
shareholders, on a pro-rata basis) does not receive cash or other property, the
number of shares subject to outstanding Options shall be increased or decreased
in direct proportion to the increase or decrease in the number of shares of
Common Stock by reason of such change in corporate structure. The number of
shares shall always be a whole number, and the purchase price per share of any
outstanding Options shall, in the case of an increase in the number of shares,
be proportionately reduced, and in the case of a decrease in the number of
shares, shall be proportionately increased.
6. EMPLOYMENT BY PARENT, SUBSIDIARY OR SUCCESSOR. For the purpose of
this Agreement, employment by a parent or subsidiary of or a successor to the
Corporation shall be considered employment by the Corporation. "Parent" and
"subsidiary" as used herein shall have the meaning of "parent" and "subsidiary
corporation," respectively, as defined in Section 424 of the Internal Revenue
Code of 1986, as amended, or subsequent comparable statute.
(2) 7. COMMITTEE. The Corporation's Board of Directors and the
Committee administering the Plan shall have authority, subject to the express
provisions of the Plan as in effect from time to time, to construe this
Agreement and the Plan, to establish, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations in the judgment of
the Committee necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
8. INCORPORATION OF PLAN PROVISIONS. This Agreement is made pursuant to
the Plan, the terms and conditions of which are hereby incorporated by
reference. Capitalized terms not otherwise defined herein have the meanings set
forth in the Plan. In the event of a conflict between the terms of this
Agreement and the Plan, the terms of the Plan shall govern.
9. MISCELLANEOUS.
(i) Words such as "herein", "hereof" and "hereunder" when used in this
Agreement shall refer to this Agreement as a whole unless the context requires
otherwise.
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(ii) This Agreement embodies the entire agreement between the parties
hereto with respect to the Option.
(iii) This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida.
(iv) THIS AGREEMENT MAY BE AMENDED OR MODIFIED ONLY IN A WRITTEN
DOCUMENT EXECUTED BY BOTH OF THE PARTIES HERETO.
(v) No waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing and signed by the party granting
such waiver and then such waiver shall be effective only in the specific
instance and for the specific purpose for which given.
IN WITNESS WHEREOF, the parties hereto have executed this Stock Option
Agreement in duplicate as of the day and year first above written.
CYBERGUARD CORPORATION EMPLOYEE
By:_________________________ __________________________
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