Exhibit 10.01

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of
August 20, 2004 by and between CyberGuard Corporation, a Florida corporation
(the “Company”), and Gary Taggart (the “Employee”).

 

WHEREAS, the Company, through its Board of Directors, desires to retain the
services of Employee, and Employee desires to be retained by the Company, on the
terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

1. Employment. The Company hereby employs Employee, and Employee hereby accepts
employment, as Senior Vice President, WorldWide Sales upon the terms of and
subject to this Agreement.

 

2. Term. The term (the “Term”) of this Agreement shall commence on August 20,
2004, and shall continue until otherwise terminated in accordance with the terms
of this Agreement.

 

3. Duties. During his employment hereunder, Employee will serve in such capacity
and with such duties as shall be assigned from time to time by the Chief
Executive Officer of the Company. Employee shall diligently perform his duties
as Senior Vice President, WorldWide Sales and shall devote the substantial
portion of his business time and effort to his employment with the Company and
his duties hereunder. During the Term, Employee shall not, directly or
indirectly, alone or as a member of a partnership, or as an officer, director,
employee or agent of any other person, firm or business organization engage in
any other business activities or pursuits requiring his personal service that
materially conflict with his duties hereunder or the diligent performance of
such duties.

 

4. Compensation.

 

a. Salary. During his employment hereunder, Employee shall be paid a salary of
$165,000 per year, payable in equal installments not less than monthly (“Base
Salary”). The Employee’s Base Salary shall be reviewed at least annually by the
Board of Directors or any Committee of the Board delegated the authority to
review executive compensation.

 

b. Option and Bonus. In addition to salary, Employee shall be entitled to
participate in the Company’s Stock Option Plan (“Stock Option Plan”). In
addition, Employee shall participate in a bonus program established by the
Company with an initial annual targeted bonus of up to $165,000, subject to
certain quarterly targets being met, as specified in a separate document
(hereafter the “Management Bonus Program”).

 

c. Insurance. During his employment hereunder, Employee shall be entitled to
participate in all such health, life, disability and other insurance programs,
if any, that the Company may offer to other key executive employees of the
Company from time to time.

 

d. Other Benefits. During his employment hereunder, Employee shall be entitled
to all such other benefits, if any, that the Company may offer to other key
executive employees of the Company from time to time.

 

1

--------------------------------------------------------------------------------

e. Vacation. Employee shall be entitled to three weeks’ vacation (in addition to
holidays) and 5 sick days in each calendar year during the Term; however,
Employee may take only two weeks’ vacation within any calendar month. Except
with respect to vacation time unused as the result of a request by the Company
to postpone the vacation, any unused vacation time from one calendar year shall
not carry-over to any subsequent calendar year.

 

f. Expense Reimbursement. Employee shall, upon submission of appropriate
supporting documentation, be entitled to reimbursement of reasonable
out-of-pocket expenses incurred in the performance of his duties hereunder in
accordance with policies established by the Company. Such expenses shall
include, without limitation, reasonable entertainment expenses, gasoline and
toll expenses and cellular phone use charges, if such charges are directly
related to the business of the Company.

 

5. Grounds for Termination. The Board of Directors of the Company may terminate
this Agreement for Cause. As used herein, “Cause” shall mean any of the
following: (i) an act of willful misconduct or gross negligence by Employee in
the performance of his material duties or obligations to the Company; if such
act is capable of cure, Employee shall be given written notice and such act
shall not be deemed a basis for Cause if cured within 60 days after written
notice is received by Employee specifying the alleged failure in reasonable
detail (and during such 60 day period, Employee shall continue to be employed by
the Company at full pay), or (ii) conviction of Employee of a felony involving
moral turpitude or (iii) a material act of dishonesty or breach of trust on the
part of Employee resulting or intended to result directly or indirectly in
personal gain or enrichment at the expense of the Company.

 

6. Termination by Employee. Employee may terminate this Agreement with Good
Reason. In the event of termination by Employee for Good Reason, Employee shall
be entitled to the benefits of Paragraph 7b. of this Agreement. “Good Reason”
means:

 

a. The Company materially breaches the provisions of this Agreement (except
those set forth in Paragraph 4a.) and Employee provides at least 15 days’ prior
written notice to the Company of the existence of such breach and his intention
to terminate this Agreement (no such termination shall be effective if such
breach is cured during such period); or

 

b. The Company fails to comply with the provisions of Paragraph 4a. or to pay
any amounts due under the Management Bonus Program provisions of Paragraph 4b.
for an uninterrupted 10 day period; or

 

c. The Company requires Employee to work in a non-supervisory or non-management
position; or

 

d. The Company decreases Employee’s compensation (salary or percentage of bonus
opportunity); or

 

e. The Company materially reduces Employee’s welfare benefits, including without
limitation: paid vacation; paid sick time; paid legal and float holidays;
medical, dental and cancer insurance, hospital indemnity, Flexible Spending,
Short- and Long-term Disability insurance, Basic Group Term Life/Accidental
Death & Dismemberment insurance, Supplemental Life/AD&D insurance, Spouse
Life/Spouse AD&D insurance, Dependent Life insurance, Vision Plan, 401k plan,
Employee Assistance Program; education reimbursement program (collectively, the
“Benefits”); provided, however, that any change in Benefits that is made by the
Company that applies to its employees generally, shall not be considered as
giving rise to “Good Reason”; or

 

2

--------------------------------------------------------------------------------

f. The Employee is required, without his prior written consent, to relocate his
office more than fifty miles from the office Employee currently reports to.

 

7. Payment and Other Provisions Upon Termination.

 

a. In the event Employee’s employment with the Company (including its
subsidiaries) is terminated by the Company for Cause as provided in Paragraph 5
then, on or before Employee’s last day of employment with the Company, the
provisions of this Paragraph 7a. shall apply. These same provisions shall apply
if Employee terminates his employment without Good Reason as described in
Paragraph 6.

 

i. Salary, Performance Award, and Bonus Payments. The Company shall pay in a
lump sum to Employee at the time of Employee’s termination such amount of
compensation due Employee for services rendered to the Company, as well as
compensation for unused vacation time and earned bonus, as has accrued but
remains unpaid. Any and all other rights granted to Employee under this
Agreement shall terminate as of the date of termination.

 

ii. Non-competition/Non-solicitation Period. The provisions of Paragraphs 14 and
15 shall, at the option of the Company in its sole discretion, continue to apply
with respect to Employee for a period of up to six months following the date of
termination, so long as the Company: (x) provides a written notice to Employee
within 5 business days after Employee’s termination that the Company wishes to
exercise its right to require that Employee not compete and not solicit in
accordance with Paragraphs 14 and 15 hereof; and (y) Company thereafter pays to
Employee in periodic installments, without interest, in accordance with the
regular salary payment practices of the Company an amount equal to (.1) the
amount of Employee’s annual Base Salary as in effect immediately prior to
Employee’s date of termination, multiplied by (.2) the number of months that the
Company is requiring the non-competition and non-solicitation covenants to
remain in place, divided by 12. The first such installment of Base Salary and
target bonus shall be paid on or before the delivery of the notice described in
the prior sentence of this Paragraph 7a(ii). The non-competition and
non-solicitation provisions of this Agreement shall no longer apply to Employee
if the Company fails to pay the amounts required under this Section 7a(ii) for
an uninterrupted 10-day period and such failure is not cured with 5 days after
written notice of such failure is delivered to the Company.

 

b. In the event Employee’s employment with the Company (including its
subsidiaries) is terminated by the Company for any reason other than for Cause
as provided in Paragraph 5 and other than as a consequence of Employee’s death,
disability, or normal retirement under the Company’s retirement plans and
practices, then the following provisions apply. These same provisions shall
apply if Employee terminates his employment with Good Reason as described in
Paragraph 6. In addition to the amounts stated below, Employee shall be paid any
other amounts by the Company to which he is entitled.

 

i. Salary, Performance Award, and Bonus Payments. On or before Employee’s last
day of employment with the Company, the Company shall pay in a lump sum to
Employee as compensation for services rendered to the Company a cash amount
equal to one-half the amount of Employee’s annual Base Salary and the greater of
(x) one-half the target bonus under the Management Bonus Program as in effect
immediately prior to his date of termination or (y) the amount of the bonus
under the Management Bonus Program to which he is entitled but which remains
unpaid. At the election of the Company, the cash amount referred to in this
Paragraph 7b.i. may be paid to Employee in periodic installments,

 

3

--------------------------------------------------------------------------------

without interest, in accordance with the regular salary payment practices of the
Company, with the first such installment to be paid on or before Employee’s last
day of employment with the Company, and no interest shall be paid with respect
to any amount not paid on the Employee’s date of termination.

 

ii. Vesting of Options and Rights. Notwithstanding the vesting period provided
for in the Stock Option Plan and any related stock option agreements between the
Company and Employee for stock options (“options”) and stock appreciation rights
(“rights”) granted Employee by the Company, all options and stock appreciation
rights that were exercisable at the date of termination or within 12 months
thereafter shall be immediately exercisable upon termination of employment. In
addition, Employee will have the right to exercise all such options and rights
for the shorter of (a) six months following his termination of employment or (b)
with respect to each option, the remainder of the period of exercisability under
the terms of the appropriate documents that grant such options.

 

iii. Benefit Plan Coverage. The Company shall maintain in full force and effect
for Employee and his dependents for six months after the date of termination,
all life, health, accident, and disability benefit plans and other similar
employee benefit plans, programs and arrangements in which Employee or his
dependents were entitled to participate immediately prior to the date of
termination, in such amounts as were in effect immediately prior to the date of
termination, provided that such continued participation is possible under the
general terms and provisions of such benefit plans, programs and arrangements.

 

In the event that participation in any benefit plan, program or arrangement
described above is barred, or any such benefit plan, program or arrangement is
discontinued or the benefits thereunder materially reduced, the Company shall
arrange to provide Employee and his dependents for six months after the date of
termination with benefits substantially similar to those that they were entitled
to receive under such benefit plans, programs and arrangements immediately prior
to the date of termination. Notwithstanding any time period for continued
benefits stated in this Paragraph 7b.iii., all benefits in this Paragraph
7b.iii. will terminate on the date that Employee becomes an employee of another
employer and eligible to participate in the employee benefit plans of such other
employer. To the extent that Employee was required to contribute amounts for the
benefits described in this Paragraph 7b.iii. prior to his termination, he shall
continue to contribute such amounts for such time as these benefits continue in
effect after termination.

 

iv. Other Compensation. Any awards previously made to Employee under any of the
Company’s compensation plans or programs and not previously paid shall
immediately vest on the date of his termination and shall be paid on that date
and included as compensation in the year paid.

 

v. Savings and Other Plans. Except as otherwise more specifically provided
herein or under the terms of the respective plans relating to termination of
employment, Employee’s active participation in any applicable savings,
retirement, profit sharing or supplemental employee retirement plans or any
deferred compensation or similar plan of the Company or any of its subsidiaries
shall continue only through the last day of his employment. All other
provisions, including any distribution and/or vested rights under such plans,
shall be governed by the terms of those respective plans.

 

vi. Non-competition/Non-solicitation Period. The provisions of Paragraphs 14 and
15 shall continue, beyond the time periods set forth in such paragraphs, to
apply with respect to Employee for six (6) months following the date of
termination. The non-competition and non-solicitation provisions of this
Agreement shall no longer apply to Employee if the Company fails to pay the
amounts required under the provisions of Paragraph 7b.i. for an uninterrupted
10-day period and such failure is not cured within 5 days after written notice
of such failure is delivered to the Company.

 

4

--------------------------------------------------------------------------------

c. The provisions of this Paragraph 7 shall apply if Employee’s employment is
terminated prior to or more than one year after the occurrence of a Change of
Control (as defined in Paragraph 8c.). From the occurrence of any Change of
Control until the first anniversary of such Change of Control, the provisions of
Paragraph 8 shall apply in place of this Paragraph 7, except that in the event
that Employee’s employment is terminated by Employee after a Change of Control
without Good Reason, then the provisions of Paragraph 8 shall not apply and the
provisions of Paragraph 7a. shall apply. Termination upon death, disability and
retirement are covered by Paragraphs 9, 10, and 11, respectively.

 

8. Payment and Other Provisions after Change of Control.

 

a. Salary, Performance Award, and Bonus Payments. In the event Employee’s
employment with the Company is terminated within one year following the
occurrence of a Change of Control (other than as a consequence of his death or
disability, or of his normal retirement under the Company’s retirement plans and
practices) either (i) by the Company for any reason whatsoever or (ii) by
Employee with Good Reason as provided in Paragraph 6, then Employee shall be
entitled to receive from the Company, the following:

 

i. Base Salary. An amount equal to one-half the Employee’s annual Base Salary as
in effect at the date of termination shall be paid on the date of termination;

 

ii. Target Bonus. An amount equal to one-half the Employee’s target bonus under
the Management Bonus Program for the fiscal year in which the date of
termination occurs shall be paid on the date of termination; and

 

iii. Other Benefits. All benefits under Paragraphs 7b.i, 7.b.ii., 7b.iii. 7b.iv.
and 7b.v. shall be extended to Employee as described in such paragraphs except
that all options and rights shall be immediately exercisable and the period for
exercise of options and rights described in the last sentence of Paragraph 7b.ii
and benefit plan coverage as described in Paragraph 7.b.iii shall be one half
year.

 

b. Non-competition/Non-solicitation Period. In the event of a termination under
the circumstances described in Paragraph 8a., the provisions of Paragraphs 14
and 15 shall be without force and effect and shall not apply to Employee.

 

c. For purposes of this Agreement, the term “Change of Control” shall mean:

 

i. The acquisition, other than from the Company, by any individual, entity or
group (within the meaning of § 13(d)(3) or § 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) (any of the
foregoing described in this Paragraph hereafter a “Person”) of 30% or more of
either (a) the then outstanding shares of Capital Stock of the Company (the
“Outstanding Capital Stock”) or (b) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Voting Securities”), provided, however, that any
acquisition by (x) the Company or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its subsidiaries or (y) any Person that is eligible, pursuant to Rule 13d-1(b)
under the Exchange Act, to file a statement on Schedule 13G with respect to its
beneficial ownership of Voting Securities, whether or not such Person shall have
filed a statement on Schedule 13G, unless such Person shall have filed a
statement on Schedule 13D with respect to beneficial ownership of 30% or more of
the Voting Securities or (z) any corporation with respect to which, following
such acquisition,

 

5

--------------------------------------------------------------------------------

more than 60% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Capital Stock and Voting Securities
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of the Outstanding
Capital Stock and Voting Securities, as the case may be, shall not constitute a
Change of Control; or

 

ii. Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board,
provided that any individual becoming a director subsequent to the date hereof
whose election or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company (as
such terms are used in Rule 14a-11 of Regulation 14A, or any successor section,
promulgated under the Exchange Act); or

 

iii. Approval by the shareholders of the Company of a reorganization, merger or
consolidation (a “Business Combination”), in each case, with respect to which
all or substantially all holders of the Outstanding Capital Stock and Voting
Securities immediately prior to such Business Combination do not, following such
Business Combination, beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from Business Combination; or

 

iv. (a) a complete liquidation or dissolution of the Company or (b) a sale or
other disposition of all or substantially all of the assets of the Company other
than to a corporation with respect to which, following such sale or disposition,
more than 60% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors is then owned beneficially, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Capital Stock and
Voting Securities immediately prior to such sale or disposition in substantially
the same proportion as their ownership of the Outstanding Capital Stock and
Voting Securities, as the case may be, immediately prior to such sale or
disposition.

 

9. Termination by Reason of Death. If Employee shall die while employed by the
Company both prior to termination of employment and during the effective Term of
this Agreement, all Employee’s rights under this Agreement shall terminate with
the payment of such amounts of annual Base Salary as have accrued but remain
unpaid and a prorated amount of targeted bonus under the Company’s Management
Bonus Program through the month in which his death occurs, plus three additional
months of the fixed salary and targeted bonus. All benefits under 7b.ii., 7b.iv
and 7b.v. shall be extended to Employee’s estate as described in such
paragraphs. In addition, Employee’s eligible dependents shall receive continued
benefit plan coverage under Paragraph 7b.iii. for three months from the date of
Employee’s death.

 

10. Termination by Disability. Employee’s employment hereunder may be terminated
by the Company for “disability” (as defined below). In such event, all
Employee’s rights under this Agreement shall terminate with the payment of such
amounts of annual Base Salary as have accrued but remain unpaid as of thirtieth
(30th) day after such notice is given except that all benefits under Paragraphs
7b.ii, 7b.iii, 7b.iv. and 7b.v. shall be extended to Employee as described in
such paragraphs. In addition, the non-competition and non-solicitation
provisions of Paragraphs 14 and 15 shall continue to apply to Employee for a
period of one year from the date of termination.

 

6

--------------------------------------------------------------------------------

For purposes of this Agreement, “disability” is defined to mean that, as a
result of Employee’s incapacity due to physical or mental illness:

 

a. Employee shall have been absent from his duties as an officer of the Company
on a substantially full-time basis for six (6) consecutive months; and

 

b. Within thirty (30) days after the Company notifies Employee in writing that
it intends to replace him, Employee shall not have returned to the performance
of his duties as an officer of the Company on a full-time basis.

 

11. Retirement. Retirement by Employee, whether occurring as a result of a
voluntary termination by Employee or an involuntary termination as the result of
reaching the age retirement as set forth in the Company’s retirement policies,
shall be treated as a voluntary termination without Good Reason and the
provisions of Paragraph 7a. shall apply. If during the Term or any extension
thereof, the Company adopts a retirement plan with respect to executive officers
of the Company, Employee shall have the right to participate in such policy and
the provisions of such policy shall supersede the provisions of the preceding
sentence.

 

12. Indemnification. If litigation shall be brought, in the event of breach or
to enforce or interpret any provision contained herein, the non-prevailing party
shall indemnify the prevailing party for reasonable attorney’s fees (including
those for negotiations, trial and appeals) and disbursements incurred by the
prevailing party in such litigation, and hereby agrees to pay prejudgment
interest on any money judgment obtained by the prevailing party calculated at
the generally prevailing NationsBank of Florida, N.A. base rate of interest
charged to its commercial customers in effect from time to time from the date
that payment(s) to him should have been made under this Agreement.

 

13. (Omitted Intentionally)

 

14. Non-competition.

 

a. At all times during Employee’s employment hereunder, and for such additional
periods as may otherwise be set forth in this Agreement in reference to this
Paragraph 14, Employee shall not, directly or indirectly, engage in any
business, enterprise or employment, whether as owner, operator, shareholder,
director, partner, creditor, consultant, agent or any capacity whatsoever that
manufactures products designed to compete directly with products of the Company
or markets such products anywhere in the world where the Company (i) is engaged
in business or (ii) has evidenced an intention of engaging in business. Employee
acknowledges that he has read the foregoing and agrees that the nature of the
geographical restrictions are reasonable given the international nature of the
Company’s business.

 

In the event that these geographical or temporal restrictions are judicially
determined to be unreasonable, the parties agree that these restrictions shall
be judicially reformed to the maximum restrictions which are reasonable.

 

b. Notwithstanding the provisions of the preceding Paragraph 14a., Employee may
accept employment with a company that would be deemed to be a competitor of the
Company as described in the previous sentence (“Competitor”), so long as (i) the
Competitor has had annual revenues of at least $1 billion in each of the prior
two fiscal years, (ii) the Competitor’s revenues for products and maintenance in
direct competition with the Company does not exceed 50% of its total revenues
and (iii) Employee’s responsibilities are solely for divisions or subsidiaries
of the Competitor that do not compete with the Company.

 

7

--------------------------------------------------------------------------------

15. Non-solicitation of Employees and Customers. At all times during Employee’s
employment hereunder, or for such additional periods as may otherwise be set
forth in this Agreement in reference to this Paragraph 15, Employee shall not,
directly or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity (a) attempt to employ, employ or enter
into any contractual arrangement with any employee or former employee of the
Company, its affiliates, subsidiaries or predecessors in interest, unless such
employee or former employee has not been employed by the Company, its
affiliates, subsidiaries or predecessors in interest during the twelve months
prior to Employee’s attempt to employ him, or (b) call on or solicit any of the
actual or targeted prospective customers of the Company or its affiliates,
subsidiaries or predecessors in interest with respect to any matters related to
or competitive with the business of the Company.

 

16. Confidentiality.

 

a. Nondisclosure. Employee acknowledges and agrees that the Confidential
Information (as defined below) is a valuable, special and unique asset of the
Company’s business. Accordingly, except in connection with the performance of
his duties hereunder, Employee shall not at any time during or subsequent to the
term of his employment hereunder disclose, directly or indirectly, to any
person, firm, corporation, partnership, association or other entity any
proprietary or confidential information relating to the Company or any
information concerning the Company’s financial condition or prospects, the
Company’s customers, the design, development, manufacture, marketing or sale of
the Company’s products or the Company’s methods of operating its business
(collectively “Confidential Information”). Confidential Information shall not
include information which, at the time of disclosure, is known or available to
the general public by publication or otherwise through no act or failure to act
on the part of Employee.

 

b. Return of Confidential Information. Upon termination of Employee’s
employment, for whatever reason and whether voluntary or involuntary, or at any
time at the request of the Company, Employee shall promptly return all
Confidential Information in the possession or under the control of Employee to
the Company and shall not retain any copies or other reproductions or extracts
thereof. Employee shall at any time at the request of the Company destroy or
have destroyed all memoranda, notes, reports, and documents, whether in “hard
copy” form or as stored on magnetic or other media, and all copies and other
reproductions and extracts thereof, prepared by Employee and shall provide the
Company with a certificate that the foregoing materials have in fact been
returned or destroyed.

 

c. Books and Records. All books, records and accounts whether prepared by
Employee or otherwise coming into Employee’s possession, shall be the exclusive
property of the Company and shall be returned immediately to the Company upon
termination of Employee’s employment hereunder or upon the Company’s request at
any time.

 

17. Injunction/Specific Performance Setoff. Employee acknowledges that a breach
of any of the provisions of Paragraphs 14, 15 or 16 hereof would result in
immediate and irreparable injury to the Company which cannot be adequately or
reasonably compensated at law. Therefore, Employee agrees that the Company shall
be entitled, if any such breach shall occur or be threatened or attempted, to a
decree of specific performance and to a temporary and permanent injunction,
without the posting of a bond, enjoining and restraining such breach by Employee
or his agents, either directly or indirectly, and that such right to injunction
shall be cumulative to whatever other remedies for actual damages to which the
Company is entitled. Employee further agrees that the Company may set off
against or recoup from any amounts due under this Agreement to the extent of any
losses incurred by the Company as a result of any breach by Employee of the
provisions of Paragraphs 14, 15 or 16 hereof.

 

8

--------------------------------------------------------------------------------

18. Severability. Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
or affecting the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

19. Successors. This Agreement shall be binding upon Employee and inure to his
and his estate’s benefit, and shall be binding upon and inure to the benefit of
the Company and any permitted successor of the Company. Neither this Agreement
nor any rights arising hereunder may be assigned or pledged by: Employee or
anyone claiming through Employee; or by the Company, except to any corporation
which is the successor in interest to the Company by reason of a merger,
consolidation or sale of substantially all of the assets of the Company.

 

The foregoing sentence shall not be deemed to have any effect upon the rights of
Employee upon a Change of Control.

 

20. Controlling Law. This Agreement shall in all respects be governed by, and
construed in accordance with, the laws of the State of Florida.

 

21. Notices. Any notice required or permitted to be given hereunder shall be
written and sent by registered or certified mail, telecommunicated or hand
delivered at the address set forth herein or to any other address of which
notice is given:

 

To the Company:

   CyberGuard Corporation      2000 West Commercial Boulevard      Fort
Lauderdale, Florida 33309      Attention: Chief Executive Officer

To Employee:

   [at such address as appears in the records of the Company as being the
last-known address of the Employee]

 

22. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto on the subject matter hereof and may not be modified without
the written agreement of both parties hereto.

 

23. Waiver. A waiver by any party of any of the terms and conditions hereof
shall not be construed as a general waiver by such party.

 

24. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and both of which together shall constitute a single
agreement.

 

25. Interpretation. In the event of a conflict between the provisions of this
Agreement and any other agreement or document defining rights and duties of
Employee or the Company upon Employee’s termination, the rights and duties set
forth in this Agreement shall control.

 

26. Certain Limitations on Remedies. Paragraph 7b. provides that certain
payments and other benefits shall be received by Employee upon the termination
of Employee by the Company other than for Cause and states that these same
provisions shall apply if Employee terminates his employment for Good Reason. It
is the intention of this Agreement that if the Company terminates Employee other
than for Cause (and other than as a consequence of Employee’s death, disability
or normal retirement) or if Employee terminates his employment with Good Reason,
then the payments and other benefits set forth in Paragraph 7b. shall constitute
the sole and exclusive remedies of Employee with respect to the subject matter
hereof.

 

9

--------------------------------------------------------------------------------

27. Survival. Notwithstanding the provisions of Paragraph 2, the provisions of
Paragraphs 14, 15, and 16 shall survive the expiration or early termination of
this Agreement.

 

10

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Employment Agreement has been executed by the parties
as of the date first above written.

 

COMPANY: CYBERGUARD CORPORATION By:  

--------------------------------------------------------------------------------

Patrick J. Clawson

Its:   Chief Executive Officer EMPLOYEE:

--------------------------------------------------------------------------------

Gary Taggart

 

11