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EXHIBIT 4.04
NON-STATUTORY STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into as of October
23, 1997, between CyberGuard Corporation (the "Corporation"), a Florida
corporation having its principal office in Ft. Lauderdale, Florida, and Arca
Development Corporation (the "Consultant").
1. THE OPTION. The Corporation hereby grants to Consultant a
non-statutory option to purchase an aggregate of 30,000 shares of Common Stock
of the Corporation (the "Option") at the price per share equal to two dollars
below the fair market value of a share at the time of exercise, subject to the
following conditions:
(a) The Option shall be exercisable as of the date hereof;
(b) 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.
2. 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, and (ii) payment in an
amount equal to the full purchase price of the shares then to be purchased. 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 in cash. Upon the due exercise of
the Option, the Corporation shall issue and deliver in the name of one or more
certificates for the shares in respect of which the Option shall have been so
exercised. The Consultant acknowledges that the Consultant 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.
3. PROHIBITION AGAINST TRANSFER. The Option and rights granted by the
Corporation under this Agreement are not transferable. 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.
4. 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 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 all
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terms and conditions of such adjustments shall be determined by the
Corporation's Board of Directors, in its sole discretion.
5. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of the parties with respect to the Option. Without limiting the
generality of the foregoing, this Option is not issued pursuant to any stock
option plan or other plan of the Corporation.
6. 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 constitutes the entire agreement and
supersedes 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, is 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. Consultant shall not have any of the rights of a
shareholder with respect to any shares subject to an Option until such shares
have been issued upon the proper exercise of such Option.
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 ARCA DEVELOPMENT CORPORATION
By: By:
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Xxxxxx X. Xxxxxxxx Its:
Chairman, President and
Chief Executive Officer
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