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EXHIBIT 4.08
NON-STATUTORY STOCK OPTION AGREEMENT
CYBERGUARD CORPORATION
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. The Corporation hereby grants to the Employee a
Non-Statutory Stock Option to purchase an aggregate of 72,100 shares of common
stock of the Corporation at the price of $10.75 per share (the "Option"),
subject to the following terms and 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 first date of Employee's
employment which was June 17, 1996 ("Anniversary Date"). 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 Anniversary Date,
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 Anniversary Date, not more than
thirty-three and one-third percent (33.333%);
(ii) After the end of two years and prior to the end of
three years from the Anniversary Date, not more
than sixty-six and one-sixth percent (66.666%);
(iii) After the end of three years from the Anniversary
Date, one-hundred percent (100%).
(e) Upon a Change in Control, any outstanding Option
shall immediately become exercisable.
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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 cause, and the rights of the executor or administrator of Employee's
estate (or the person or persons to whom Employee's rights under this Option
pass by the Employee's will or the laws of descent and distribution), with
respect to the Option are set forth in a written employment agreement entered
into between Employee and Corporation on or before the date hereof ("Employment
Agreement") (which term shall include any amendment or replacement to 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. Unless otherwise explicitly provided
herein, in the event of a conflict between the provisions of this Agreement and
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 Corporation's
Stock Incentive Plan shall have authority, subject to the express provisions of
this Option Agreement, to construe this Agreement and to correct any defect or
supply any omission or reconcile any inconsistency between this Agreement and
the Employment Agreement.
8. 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 the
Employment Agreement, 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
President
