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EXHIBIT 99
CYBERGUARD CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company that the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Internal Revenue Code of 1986,
as amended (the "Code"). The provisions of the Plan shall be construed
so as to extend and limit participation in a manner consistent with the
requirements of Section 423 of the Code.
2. DEFINITIONS.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the common stock of the Company, par
value $.01 per share.
(c) "Company" shall mean CyberGuard Corporation, a Florida
corporation.
(d) "Compensation" shall mean all base straight time gross
earnings and commissions, exclusive of payments for overtime,
shift premium, incentive compensation, incentive payments,
bonuses and other compensation.
(e) "Designated Subsidiary" shall mean any subsidiary that has
been designated by the Board from time to time in its sole
discretion as eligible to participate in the Plan.
(f) "Employee" shall mean any individual (i) who is an employee of
the Company for federal income tax withholding purposes, and
(ii) whose customary employment with the Company is at least
twenty (20) hours per week and more than five (5) months in
any calendar year. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved
by the Company. Where the period of leave exceeds 90 days and
the individual's right to re-employment is not guaranteed
either by statute or by contract, the employment relationship
shall be deemed to have terminated on the 91st day of such
leave.
(g) "Enrollment Date" shall mean the first day of each Offering
Period.
(h) "Exercise Date" shall mean the last day of each Offering
Period.
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(i) "Fair Market Value" shall mean the value of the Common Stock.
If the Common Stock is listed on any established stock
exchange, or a national market system or other quotation
system, including without limitation the National Quotation
Bureau's "Pink Sheets", and the OTC Bulletin Board, Small Cap
and National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System
("Nasdaq"), the Fair Market Value of a share of Common Stock
shall be the closing sales price for a share of Common Stock
(or the closing bid, if no sales were reported), as quoted on
such system or exchange (or the exchange with the greater
volume of trading in Common Stock) on the day of such
determination as reported in the WALL STREET JOURNAL or such
other source as the Board deems reliable. In the absence of an
established market for the Common Stock, the Fair Market Value
of a share of Common Stock shall be determined in good faith
by the Board.
(j) "Offering Period" shall mean, except as otherwise
provided herein, a period of approximately six (6) months,
commencing on the first Trading Day on or after January 1 and
terminating on the last Trading Day occurring in the period
ending the following June 30, or commencing on the first
Trading Day on or after July 1 and terminating on the last
Trading Day occurring in the period ending with the following
December 31. Notwithstanding anything herein to the contrary,
the first Offering Period shall commence on the first Trading
Day on or after January 17, 2000 and shall terminate on the
last Trading Day occurring in the period ending November 17,
2000, and the second Offering Period shall commence on the
first Trading Day on or after November 18, 2000 and shall
terminate on the last Trading Day occurring in the period
ending December 31, 2000. The duration of Offering Periods may
be changed pursuant to Section 4 of the Plan.
(k) "Plan" shall mean the CyberGuard Corporation 2000 Employee
Stock Purchase Plan, as set forth herein and as amended from
time to time.
(l) "Purchase Price" shall mean an amount equal to eighty-five
percent (85%) of the Fair Market Value of a share of Common
Stock on the Enrollment Date or on the Exercise Date,
whichever is lower.
(m) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan that have not yet been
exercised and the number of shares of Common Stock that have
been authorized for issuance under the Plan but not yet placed
under option.
(n) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50 percent of the voting shares are held
by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.
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(o) "Trading Day" shall mean a day on which national stock
exchanges and Nasdaq are open for trading.
3. ELIGIBILITY.
(a) INITIAL ELIGIBILITY. Any Employee who shall be employed by the
Company on the date his or her participation in the Plan is to
become effective shall be eligible to participate in offerings
under the Plan that commence on or after such Employee becomes
a participant in the Plan.
(b) RESTRICTIONS ON PARTICIPATION. Notwithstanding any provisions
of the Plan to the contrary, no Employee shall be granted an
option under the Plan:
(i) if, immediately after the grant, such Employee (or
any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company, and/or hold
outstanding options to purchase such stock,
possessing five percent (5%) or more of the total
combined voting power or value of all classes of the
capital stock of the Company or of any Subsidiary; or
(ii) that permits his or her rights to purchase stock
under all employee stock purchase plans of the
Company and its Subsidiaries to accrue at a rate that
exceeds twenty-five thousand dollars ($25,000) in
fair market value of stock (determined at the time
such option is granted) for each calendar year in
which such option is outstanding.
(c) COMMENCEMENT OF PARTICIPATION. An eligible Employee may become
a participant by completing an authorization for payroll
deduction on the form provided by the Company and filing with
the Chief Financial Officer of the Company on or before the
date set therefor by the Board, which date shall be prior to
the Enrollment Date for the Offering Period. Payroll
deductions for a participant shall commence on the applicable
Enrollment Date when his or her authorization for a payroll
deduction becomes effective and shall end on the Exercise Date
of the Offering Period to which such authorization is
applicable unless sooner terminated by the participant as
provided in Section 8(a) of the Plan.
4. OFFERING PERIODS. Except as otherwise provided herein, the Plan shall
be implemented by consecutive six (6) month Offering Periods. The first
Offering Period, however, shall be for more than six (6) months; it
shall commence on the first Trading Day on or after January 17, 2000,
and shall terminate on the last Trading Day occurring in the period
ending November 17, 2000, and the second Offering Period shall be for
less than six (6) months, it shall commence on the first Trading Day
on or after November 18, 2000 and shall terminate on the last Trading
Day occurring in the period ending December 31, 2000. Thereafter,
except as otherwise provided
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herein, each Offering Period shall commence on the first Trading Day on
or after January 1 and terminate on the last Trading Day occurring in
the period ending the following June 30, or commence on the first
Trading Day on or after July 1 and terminate on the last Trading Day
occurring in the period ending the following December 31. The Board
shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future
Offering Periods without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of
the first Offering Period to be affected thereafter.
5. PAYROLL DEDUCTIONS.
(a) AMOUNT OF DEDUCTION. At the time a participant files his or
her subscription agreement, he or she shall elect to have
payroll deductions made on each pay day during the time he or
she is a participant in an Offering Period in an amount not to
exceed ten percent (10%) of the Compensation that he or she
receives on each pay day during the Offering Period.
(b) PARTICIPANT'S ACCOUNT. All payroll deductions made for a
participant shall be credited to his or her account under the
Plan and shall be made in whole percentages of Compensation
only. A participant may not make any additional payments into
his or her account.
(c) CHANGES IN PAYROLL DEDUCTION. A participant may discontinue
his or her participation in the Plan as provided in Section
8(a) of the Plan, or may increase or decrease the rate of his
or her payroll deductions during the Offering Period by
completing or filing with the Company a new subscription
agreement authorizing a change in the payroll deduction rate.
The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The
change in rate shall be effective with the first full payroll
period following five (5) business days after the Company's
receipt of the new subscription agreement unless the Company
elects to process a given change in participation more
quickly. A participant's subscription agreement shall remain
in effect for successive Offering Periods unless terminated as
provided in Section 8 hereof.
6. GRANT OF OPTION. On the Enrollment Date of each Offering Period, a
participant shall be deemed to have received an option to purchase on
each Exercise Date during such Offering Period at the applicable
Purchase Price a maximum number of shares of Common Stock determined by
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dividing such participant's payroll deductions accumulated prior to
such Exercise Date and retained in the participant's account as of the
Exercise Date by the applicable Purchase Price.
7. EXERCISE OF OPTION.
(a) AUTOMATIC EXERCISE. Unless a participant withdraws all of the
payroll deductions credited to his or her account prior
thereto as provided in Section 8 of the Plan, his or her
option for the purchase of Common Stock with payroll
deductions made during an Offering Period shall be deemed to
have been exercised automatically on the Exercise Date
applicable to such Offering Period for the purchase of a
number of full shares of Common Stock that the accumulated
payroll deductions in his or her account at that time will
purchase at the applicable option price (but not in excess of
the number of shares for which options have been granted to
the participant under Section 6 of the Plan). No fractional
shares shall be purchased; any payroll deductions accumulated
in a participant's account that are not sufficient to purchase
a full share shall be retained in the participant's account
for the subsequent Offering Period, subject to earlier
withdrawal by the participant as provided in Section 8 of the
Plan. Any other monies left over in a participant's account
after the Exercise Date shall be returned to the participant.
During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
(b) DELIVERY. As promptly as practicable after the Exercise Date
of each Offering Period, the Company shall arrange the
delivery to each participant, as appropriate, including, but
not limited to, direct deposit into a book entry account or
brokerage account, the shares purchased upon exercise of his
or her option.
8. WITHDRAWAL.
(a) GENERAL. A participant may withdraw all of the payroll
deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time during
an Offering Period by giving written notice to the Company in
the form of a notice of withdrawal provided by the Company.
Promptly after receipt of notice of withdrawal, all of the
participant's payroll deductions credited to his or her
account shall be paid to such participant, such participant's
option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase
of shares shall be made for such Offering Period.
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(b) EFFECT ON SUBSEQUENT PARTICIPATION. A participant's withdrawal
of the payroll deductions credited to his or her account shall
not have any effect upon his or her eligibility to participate
in any similar plan that may hereafter be adopted by the
Company or in succeeding Offering Periods that commence after
the termination of the Offering Period from which the
participant withdraws. If, however, a participant withdraws
the payroll deductions credited to his or her account during
an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription
agreement prior to the commencement of such succeeding
Offering Period.
(c) TERMINATION OF EMPLOYMENT. Upon a participant's ceasing to be
an Employee, for any reason, he or she shall be deemed to have
elected to withdraw from the Plan and the payroll deductions
credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section
12 of the Plan, and such participant's option shall be
automatically terminated. Notwithstanding the preceding
sentence, a participant who receives payment in lieu of notice
of employment shall be treated as continuing to be an Employee
for the participant's customary number of hours per week of
employment during the period in which the participant is
subject to such payment in lieu of notice.
9. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.
10. STOCK.
(a) MAXIMUM SHARES. The maximum number of shares of the Company's
Common Stock that shall be made available for sale under the
Plan shall be 2,500,000 shares, subject to adjustment upon
changes in capitalization of the Company as provided in
Section 16 of the Plan. If, on a given Exercise Date, the
number of shares with respect to which options are to be
exercised exceeds the number of shares available under the
Plan, the Company shall make a pro rata allocation of the
shares remaining available for purchase in as uniform a manner
as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to
the account of each participant shall be returned to him or
her as promptly as possible.
(b) PARTICIPANT'S INTEREST IN OPTION STOCK. The participant shall
have no interest or voting right in shares covered by his or
her option until such option has been exercised.
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(c) REGISTRATION OF STOCK. Shares to be delivered to a participant
under the Plan shall be registered in the name of the
participant or in the name of the participant and his or her
spouse as joint tenants with right of survivorship.
11. ADMINISTRATION. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or
its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan.
Every finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final and
binding upon all parties.
12. DESIGNATION OF BENEFICIARY. A participant may file a written
designation of a beneficiary who is to receive shares and cash, if any,
from the participant's account under the Plan in the event of such
participant's death subsequent to an Exercise Date on which the option
is exercised but prior to delivery to such participant of such shares
and cash. In addition, a participant may file a written designation of
a beneficiary who is to receive any cash from the participant's account
under the Plan in the event of such participant's death prior to
exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective. Such designation of beneficiary may
be changed by the participant at any time by written notice. In the
event of the death of the participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time
of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of such participant, or, if no spouse,
dependent or relative is known to the Company, then to such other
person as the Company may designate.
13. TRANSFERABILITY. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to
receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of
descent and distribution) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to
withdraw funds from an Offering Period in accordance with Section 8 of
the Plan.
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14. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll
deductions.
15. REPORTS. Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the
amounts of payroll deductions, the Purchase Price, the number of shares
purchased and the remaining cash balance, if any.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION,
MERGER OR ASSET SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by
the shareholders of the Company, (i) the Reserves, (ii) the
maximum number of shares each participant may purchase during
each Offering Period, (iii) the Purchase Price per share, and
(iv) the number of shares of Common Stock covered by each
option under the Plan that has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without
receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common
Stock subject to an option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period
then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date"), and shall terminate
immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the
Board. The New Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Board shall
notify each participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date
for the participant's option has been changed to the New
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Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior
to such date the participant has withdrawn the payroll
deductions credited to his or her account as provided in
Section 8 of the Plan.
(c) MERGER OR ASSET SALE. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, the
Company shall use its best efforts to have each outstanding
option assumed or an equivalent option substituted by the
successor corporation or a parent or Subsidiary of the
successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option,
the Company shall set a New Exercise Date and any Offering
Periods then in progress shall end on the New Exercise Date.
The New Exercise Date shall be the date immediately prior to
the date of the Company's proposed sale or merger. The Board
shall notify each participant in writing, at least five (5)
business days prior to the New Exercise Date, that the
Exercise Date for the participant's option has been changed to
the New Exercise Date and that the participant's option shall
be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn the payroll
deductions credited to his or her account as provided in
Section 8 of the Plan.
17. AMENDMENT OR TERMINATION. The Board of Directors of the Company may at
any time and for any reason terminate or amend the Plan. Except as
provided in Section 16 of the Plan, no such termination can affect
options previously granted; provided, that an Offering Period may be
shortened by the Board of Directors to an earlier Exercise Date and the
Plan may be terminated immediately thereafter if the Board determines
that the termination of the Plan is in the best interests of the
Company and its shareholders. Except as provided in Section 16 of the
Plan, no amendment may make any change in any option theretofore
granted that adversely affects the rights of any participant. To the
extent necessary to comply with Section 423 of the Code (or any
successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval for
any amendment to the Plan in such a manner and to such a degree as
required. Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected,"
the Board (or its committee) shall be entitled to change Offering
Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio
applicable to amounts designated by a participant in order to adjust
for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure
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that amounts applied toward purchase of Common Stock for each
participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole
discretion advisable that are consistent with the Plan.
18. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the
receipt thereof.
19. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
rules and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the shares may be listed, and shall be
further subject to the approval of counsel for the Company with respect
to such compliance. As a condition to the exercise of an option, the
Company may require the person exercising such option to represent and
warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell
or distribute such shares if, in the opinion of counsel for the
Company, such a representation is required by any of the aforementioned
applicable provisions of law. The terms and conditions of options
granted under the Plan to, and the purchase of shares by, persons
subject to Section 16 of the Exchange Act shall comply with the
applicable provisions of Rule 16b-3 under the Exchange Act. This Plan
shall be deemed to contain, and such options shall contain, and the
shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3
under the Exchange Act to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.
20. TAX WITHHOLDING. At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued
under the Plan is disposed of, the participant must make adequate
provision for the Company's federal, state or other tax withholding
obligations, if any, that arise upon the exercise of the option or the
disposition of the Common Stock. At any time, the Company may, but
shall not be obligated to, withhold from the participant's compensation
the amount necessary for the Company to meet applicable withholding
obligations, including any withholding required to make available to
the Company any tax deductions attributable to sale or early
disposition of Common Stock by the Employee.
21. TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of
ten (10) years unless terminated under Section 17 of the Plan.
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