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                                                                   Exhibit 10.1

July 3, 2001

Gary J. Franza
11632 N. 128th Place
Scottsdale, AZ 85259

Dear Gary,

We are very excited about having the opportunity to work with you at WatchGuard.
As a company, we thrive on the entrepreneurial spirit and excitement that feeds
our continued growth and success in the fast-paced and high-growth network
security marketplace. Specifically, we are an industry leader and innovative
company that continually strives to create superior network security products
and services that are easier to deploy and more cost effective than the
competition. As the senior executive of out worldwide sales organization, and
an officer of the company (subject to Board of Director approval), you will be
responsible for creating and executing a distribution channel and field
marketing strategy that continues our strong growth and places WatchGuard at the
"top of the class" in the security industry. We believe that you have the
skills and ability to accomplish this goal.

We are very pleased to offer you the position of Senior Vice President of
Worldwide Sales. In this capacity, you will report directly to me. Your
compensation package will include an annual salary of $200,000.00 payable in
increments of $8,333.34 on a semi-monthly basis (less applicable payroll taxes)
on the fifteenth and last business day of each month. You will also be eligible
for an annual commission and performance bonus program totaling $175,000.00
(commission paid monthly, and bonus paid quarterly) upon meeting mutually agreed
upon revenue targets and MBO's. Additionally, you will be eligible to receive a
sign-on bonus, upon execution of this agreement, totaling $50,000.00 (payable in
equal installments over a six (6) month period). However, in the event you
terminate your employment relationship with WatchGuard for any reason within one
(1) year from your hire date, you will pay to WatchGuard, within ten (10) days
of the date of your termination, the prorated amount of sign- on bonus that you
received from WatchGuard. You will also be eligible to participate in our stock
option plan with an award of 225,000 shares, subject to Board of Director
approval.

Under the terms of your options, if your employment terminates within
two (2) years following a Corporate Transaction, unless due to termination for
Cause or your leaving without Good Reason, all unvested options will accelerate
and become vested. Additionally, 50% of your unvested options will vest upon
consummation of a Corporate Transaction.  (These provisions and the capitalized
terms are described and defined in WatchGuard's 1996 Stock Option Plan)

Further, if your employment is terminated without Cause, or you leave
voluntarily for Good Reason within twenty four (24) months of date of
hire, you will receive a cash severance payment equal to six (6)
months of your Base Salary. The benefits described in this paragraph

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will be provided to you only if you execute a severance agreement
including a release of all claims in a form agreeable to the Company.

As you know, our corporate offices are located in Seattle, WA between
the wonderfully cultural international district and beautiful
historic Pioneer Square. The Puget Sound area is a very picturesque,
high quality of life, moderate cost of living area with water
activities at your doorstep and Mount Rainier a short drive away.
Seattle has consistently rated as one of the best cities in which to
live!  Based on the need for this key position to be located in
Seattle, our offer is contingent upon your permanent relocation to
Seattle, WA.

Should you accept this offer of employment, WatchGuard will reimburse
you for reasonable relocation expenses in consideration of your
relocation from Scottsdale, Arizona to Seattle, Washington. You may
submit receipts to WatchGuard for the following expenses:

..        Airfare from your home in Scottsdale to Seattle, if needed,
         for your immediate family;
..        Shipping/moving of your belongings, including up to thirty
         (30) days storage expenses;
..        Temporary housing cost (maximum one [1] month) for you to
         relocate to Seattle and locate a more permanent residence; and
..        Other reasonable expenses incurred during relocation (does
         not include meals).

WatchGuard will reimburse you for the above expenses you incur during
your relocation to Seattle. However, in the event you terminate your
employment relationship with WatchGuard for any reason within one (1)
year from your hire date, you will pay to WatchGuard, within ten (10)
days of the date of your termination, the prorated amount of
relocation expenses that you received in the form of reimbursement
from WatchGuard.

Gary, we offer a casual atmosphere and a fabulous package of benefits
including, but not limited to - a Paid Time Off program offering up
to 4 weeks of time away per year, a 401(k) Retirement Plan, an
Employee Assistance Program, Medical/Dental/Vision Insurance paid
entirely by WatchGuard for you, an Employee Stock Purchase Plan,
Short and Long-Term Disability benefits paid entirely by WatchGuard,
and Commuting/Parking benefits.

It is important to note that WatchGuard Technologies, Inc. is an
at-will employer. Nothing in this information constitutes an
employment contract. If there is a discrepancy between information
in this letter and any official plan documents or contract, the
official document will determine how the plans work and benefits are
paid.

As a Company employee, you will be required to sign and abide by
Company rules and regulations and sign and comply with a Proprietary
Information, Invention, and Non-Competition Agreement (attached
hereto). Additionally, you will be expected to sign and comply with
all Company policies that are applicable to you, including the
Company Policy Regarding Special Trading Procedures, the
International Business Activities Policy and the Procedures and
Guidelines for Public Disclosures and Communications with Analysts,
and any revisions to such policies. You will be a full-time
employee, which means that you may not accept employment or
consulting assignments of any nature with any other employer or
enterprise, without the prior written consent of the Board.

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Please review the attached forms and sign this letter in the
designated location indicating your acceptance of the terms outlined
within. In addition, please note your official start date with
WatchGuard Technologies in the space provided below.

Sincerely,

WATCHGUARD TECHNOLOGIES, INC.

/s/ James Cady

James Cady
President and COO

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                                  *********

Accepted and agreed to this __________ day of July, 2001 by:

        /s/ Gary Franza
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Gary Franza - signature

Official Start Date: ___________________

Enclosures:

Proprietary Information, Invention and Non Competition Agreement
Company Policy Regarding Special Trading Procedures
International Business Activities Policy
Procedures and Guidelines for Public Disclosures and Communications with
Analysts Employee Information Form
Copy of offer letter
W-4
I-9
Direct deposit form