EXHIBIT 10.5
EMPLOYMENT AGREEMENT AMENDMENT
This Amendment dated and effective as of October 1, 2001, is entered into by
and between CyberGuard Corporation ("CyberGuard") and Xxxxxxx Xxxxxxxxxx, an
employee of CyberGuard ("Employee").
WHEREAS, the Employee and CyberGuard are parties to an Employment Agreement
dated April 18, 2001 ("Agreement"); and
WHEREAS, Employee wishes to reduce Employee's Base Salary for a period of one
year and CyberGuard, in exchange for the Employee's salary reduction, wishes to
issue to Employee an option to purchase shares of CyberGuard Common Stock.
NOW THEREFORE, in consideration of mutual promises contained herein, and
intending to be legally bound hereby, CyberGuard and the Employee agree to
amend the Agreement as follows:
1. Employee hereby voluntarily elects to reduce Employee's annual
Base Salary by 12% for a period of one year, to begin on
November 3, 2001 ("Reduction") and waives any rights Employee
may have under the Agreement and/or at law or in equity
arising out of or in connection with such Reduction.
2. In consideration of and in exchange for the Reduction,
CyberGuard hereby agrees to issue to Employee a non-statutory
option to purchase 34,615 shares of CyberGuard Common Stock,
which option is evidenced by the Stock Option Agreement
attached hereto as Attachment A ("Option").
3. Notwithstanding the Reduction, the Company agrees that the
level of Employee's participation in the Company's Management
Bonus Program, if any, will be based on the Employee's salary
in effect immediately prior to the Reduction.
4. Notwithstanding the Reduction, the Company agrees that in the
event of termination of Employee's employment prior to
November 2, 2002, the Company's payments, if any, pursuant to
the Agreement in connection with employment termination, shall
be based on the Employee's salary in effect immediately prior
to the Reduction.
5. Notwithstanding any time restriction on the period of
exercisability of stock options after termination of
employment as set forth in the Agreement, the Employee will
have the right to exercise the Option for the remainder of the
period of exercisability under the Option.
6. Nothing herein shall limit or restrict CyberGuard's rights to
terminate the Employee's employment in accordance with the
Agreement.
7. This Amendment shall supersede any provisions of the Agreement
to the extent that this Amendment conflicts with, modifies, or
amends any provision of the Agreement. In all other respects
the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the
Agreement as of the date above first written.
CYBERGUARD CORPORATION EMPLOYEE
By:
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Xxxxx X. Xxxxxxx, CEO Xxxxxxx Xxxxxxxxxx
ATTACHMENT A
CYBERGUARD CORPORATION
NON-STATUTORY STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into as of
October 1, 2001 between CyberGuard Corporation ("Corporation"), a Florida
corporation having its principal office in Ft. Lauderdale, Florida, and Xxxxxxx
Xxxxxxxxxx, ("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 amended and as in effect from time
to time ("Plan"), the Corporation hereby grants to Employee a non-statutory
option to purchase an aggregate of 34,615 shares of Common Stock of the
Corporation at the price of U.S. $1.30 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 until December 2, 2001, and then only to the
extent that the Option is exercisable. 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 ten 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:
(ix) On December 2, 2001, not more than 8.333
percent (8.333%); and
(x) Thereafter, on the second day of each
calendar month an additional 8.333 percent
(8.333%); until November 2, 2002, at which
time, one-hundred percent (100%) of the
Option shall be vested.
(e) If a "Change of Control" (as defined in the Plan)
shall occur, then the Options shall become 100% immediately
exercisable in full (to the extent that they otherwise have not
expired).
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 remainder of the period of exercisability as stated in Section
1(c).
(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 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
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 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
("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.
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.
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. 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. This Agreement embodies the entire
agreement between the parties hereto with respect to the Option. 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. 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 as of the day and year first above written.
CYBERGUARD CORPORATION EMPLOYEE
By:
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Xxxxx X. Xxxxxxx, CEO Xxxxxxx Xxxxxxxxxx
