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EXHIBIT 4.11
INCENTIVE STOCK OPTION AGREEMENT
CYBERGUARD CORPORATION
STOCK INCENTIVE PLAN
This Stock Option Agreement ("Agreement") is entered into as of the
27th day of August, 1996, between CYBERGUARD CORPORATION (the "Corporation"), a
Florida corporation having its principal office in Ft. Lauderdale, Florida, and
Xxxxx Xxxxxxx (the "Employee"), of the Corporation or one of its subsidiaries.
1. THE OPTION. Under and subject to the provisions of the
Corporation's Stock Incentive Plan as in effect from time to time (the "Plan"),
on August 27, 1996 the Corporation granted to the Employee an Incentive Stock
Option for 100,000 shares of Common Stock of the Corporation at $10.75 per share
(the "Option"), which complies with Section 422 of the Internal Revenue Code
("Code"). The Option terms shall be as follows:
(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 of this
Agreement, 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) On June 1, 1997, not more than thirty-three percent
(33.333%);
(ii) On June 1, 1998, not more than sixty-six percent
(66.666%); and
(iii) One June 1, 1999, one hundred percent (100%).
(e) Upon a Change in Control, any outstanding Option
shall immediately become exercisable.
2. TERMINATION OF EMPLOYMENT
(a) Death, Disability and Termination of Employment. The
rights of Employee upon Termination of employment for disability, for
cause and without
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cause, and the rights of Employee's estate upon his death with respect
to the Option are set forth in the Employment Agreement.
(b) Retirement. In the event of retirement of the Employee,
the Option shall be exercisable by the Employee only within thirty-six
(36) months following such cessation of employment, but no later than
the expiration date described in Section 1(c) and to the extent that
the Option was exercisable at the date of such cessation of employment,
and no more.
(c) Other Agreements. In the event of a conflict between the
provisions of this Agreement and any provision of a written Employment
Agreement defining the rights and duties of Employee upon Employee's
termination in respect of the subject hereof ("Conflicting Provision"),
the rights and duties as set forth in any such Conflicting Provision
shall control; provided, however, that no Conflicting Provision shall
control this Agreement if the effect thereof would be to nullify the
compliance of the Option with Section 422 of the Code.
3. EXERCISE OF OPTION. The 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 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 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. 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 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 Option.
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 or other change in corporate
structure such that shares of Common Stock are changed into or become
exchangeable for a larger or smaller number of shares, 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
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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.
7. COMMITTEE. 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, except that to the
extent that Section 1(e) of this Agreement conflicts with the Plan, such Section
1(e) shall govern.
9. MISCELLANEOUS. Words such as "herein", "hereof" and
"hereunder" when used in this Agreement shall refer to this Agreement as a whole
unless the context otherwise requires. This Agreement, together with any written
Employment Agreement between Employee and Corporation, constitute the entire
agreement and supersede all prior agreements and understandings, both oral and
written, between the parties hereto with respect to the subject matter hereof,
and, except as expressly provided herein and therein, are not intended to confer
upon any person other than the parties hereto any rights or remedies. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida. This Agreement may be amended or modified only in a written
document executed by both of the parties hereto.
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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Xxxxxx X. Xxxxxxxx Xxxxx Xxxxxxx
Chairman, President and Chief
Executive Officer
