Sample Business Contracts

Termination Agreement - CyberGuard Corp. and Tommy D. Steele

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                              TERMINATION AGREEMENT

This Termination Agreement ("Agreement") is entered into as of May 17, 1999 by
and between CyberGuard Corporation ("CyberGuard" or the "Company") and Tommy D.
Steele ("Steele").

     WHEREAS, Steele resigned effective the date hereof, as President, Chief
Operating Officer and Director of CyberGuard and from any other officer or
director position that he has held with CyberGuard or its affiliates; and

     WHEREAS, Steele and CyberGuard are parties to a certain Employment
Agreement between Steele and CyberGuard, originally dated November 7, 1997, and
amended from time to time thereafter ("Employment Agreement"); and

     WHEREAS, CyberGuard and Steele desire to provide for the termination of the
Employment Agreement and to provide for certain terms about Steele's termination
in this Agreement; and

     NOW THEREFORE, CyberGuard and Steele agree as follows:

     1. SALARY AND BONUS. Steele shall be paid as follows:

          a. CyberGuard shall pay Steele an aggregate pre-tax amount of
     $245,000.00, in equal payments over the next 52 weeks, to be paid in
     accordance with the regular payroll practices of the Company. Under current
     Company payroll practices, this would result in Steele being paid a gross
     amount of $9,423.08 (less withholding) every second week. The aggregate
     amount of $245,000.00 represents Steele's base salary ($220,000.00 per year
     as of May 14, 1999) plus $25,000.00 (representing his bonus for the fiscal
     quarter ending June 30, 1999).

          b. Steele's bonus for the period ended March 31, 1999, in the amount
     of $25,000.00 has been earned but not yet paid. This $25,000.00 will be
     paid by the Company in a lump sum as soon as possible (taking into account
     the Company's cash flow position), but not later than upon the Company's
     collection of a pending receivable from a financial institution customer
     that is in the approximate amount of $1.4 million.

     2. STOCK OPTIONS. The parties acknowledge that, from time to time, Steele
has been granted options to acquire, in the aggregate, 300,000 shares of
CyberGuard's Common Stock ("Options"). The Options have been evidenced by
various agreements that have been entered into between Steele and CyberGuard,
and by CyberGuard's Stock Option Plans. The parties also acknowledge that, other
than the Options, CyberGuard has granted Steele no other options, warrants,
restricted stock or rights of any kind to acquire capital stock of CyberGuard
(except for a restricted stock grant on which the restriction previously was
lifted and the 3,600 shares representing such grant have not already been issued
to Steele). The parties agree that all the Options shall become immediately
exercisable and shall remain exercisable until May 17, 2001.

     3. STATUS. Steele hereby resigns effective the date hereof, as President,
Chief Operating Officer and Director of CyberGuard and from any other officer or
director position that he has held with CyberGuard or its affiliates (including,
without limitation, as director of CyberGuard Europe Ltd. and of CYBG
Consultant, Inc.). Steele shall continue to be considered an active employee of
the Company, which status shall terminate upon the sooner to occur of: (i)
November 19, 1999;

<PAGE>   2

or (ii) the day on which Steele becomes a full-time employee of another business
enterprise. While Steele continues as an active employee of the Company, his
position with the Company shall be that of Special Assistant to the Chief
Executive Officer, and his duties shall be as mutually agreed between Steele and
the Chief Executive Officer. Once Steele terminates as an active employee of the
Company, his status until May 16, 2000 shall be that of a severed employee, and
thereafter Steele shall have no further relationship with the Company.


          a. MEDICAL AND DENTAL INSURANCE. Steele has informed CyberGuard that
     he intends to enroll in CyberGuard's medical and dental insurance plan
     during the next open enrollment period, beginning on June 1 and ending on
     June 30, 1999. If he so enrolls, CyberGuard will pay Steele's premiums (up
     to the amount that is paid for employees consistent with past practices)
     for coverage under such insurance from the inception of the coverage (July
     1, 1999) through the month of November, 1999, at which time, if Steele
     wishes to continue such coverage, he will thereafter pay such premiums.
     This Agreement is not intended to cover the Company's responsibilities to
     give Steele COBRA notice, which notice under current law would be provided
     to him after he is no longer an active employee or severed employee of the

          b. LIFE AND AD&D INSURANCE. The coverage for life and AD&D insurance
     that is currently in effect for Steele will remain in place until the
     sooner to occur of: (i) Steele's status as an active employee of the
     Company ends (as described in section 3 above); or (ii) the insurance
     policies that provide for life and AD&D coverage are no longer in effect or
     no longer cover an employee of Steele's status.

          c. 401-K PLAN. Steele hereby agrees not to make any further
     contributions to the Company 401-k Plan from the date of this Agreement,
     and to sign an appropriate letter addressed to the 401-k Plan
     administrators directing that no further payments be accepted on his
     behalf. Steele's vesting in the 401-k plan shall be determined as of the
     day his status as an active employee of the Company ends (as described in
     section 3 above), unless the 401-k Plan or ERISA requires otherwise.


          a. CASH COMPENSATION. The compensation and benefits set forth in this
     Agreement are intended to be the only compensation and benefits that
     CyberGuard is required to pay Steele. Steele hereby acknowledges that once
     the payments required of CyberGuard under section 1 hereof have been paid
     in full, Steele will have been paid in full all amounts due or owing to him
     in the nature of salary, bonus, severance, vacation pay, personal leave,
     sick leave or other compensation of any kind whatsoever, for all services
     rendered to CyberGuard as employee, consultant or in any other capacity

          b. BENEFITS. With respect to benefits other than cash compensation,
     Steele hereby agrees that once CyberGuard has fulfilled its obligations
     described in sections 2, 4 and 6 hereof, no other employee welfare benefits
     or benefits of any kind will be due or owing to Steele from CyberGuard.
     This Agreement is intended to be a novation of CyberGuard's obligations to
     Steele rather than an accord and satisfaction.

          c. EXPENSE REIMBURSEMENT. Steele shall continue to be entitled to be
     reimbursed for reasonable expenses incurred on behalf of the Company in his
     prior capacity as an officer of the Company and in his continuing capacity
     as an active employee of the Company, upon submission and Company approval
     of appropriate expense vouchers.

     6. INDEMNIFICATION. CyberGuard and Steele agree that this Agreement shall
not in any way affect or impair Steele's right to indemnification by CyberGuard
to the extent provided for in

<PAGE>   3

Section 6.4 of the Bylaws of CyberGuard and Florida Statute Section 607.0850.
Subject to CyberGuard's Bylaws and Section 607.0850 of the Florida Statutes, the
right to indemnification includes payment for Steele's expenses actually and
reasonably incurred in the multiple related actions brought in the United States
District Court, Southern District of Florida, which are now consolidated in an
CARBERRY AND WILLIAM D. MURRAY, Case No. 98-6879-CIV-Gold and in connection with
any future lawsuits or regulatory or self-regulatory investigations concerning
Steele's employment with CyberGuard. Steele hereby agrees to promptly repay any
and all expenses paid by CyberGuard if he is ultimately found not to be entitled
to indemnification by CyberGuard.

     7. CERTAIN COMMUNICATIONS. CyberGuard and Steele hereby each agree that
neither shall say, write or communicate in any manner to any person or entity
anything substantially derogatory about the other, regardless of the truth or
falsity of the information. Of course, nothing in this section 7 shall be
construed to prevent either party from testifying truthfully under oath if
compelled to do so by court order or other legal compulsion. In this connection,
for purposes hereof, "CyberGuard" means and includes CyberGuard Corporation, and
its current officers, directors, employees, affiliates and representatives.

     8. COMPANY EQUIPMENT. Steele acknowledges that he has in his possession
certain property that is owned by the Company. This property includes a laptop
computer, a company cellular telephone, one or more Company credit cards, and an
access card for electronic access to the Company's headquarters. Steele agrees
that he will return to CyberGuard, promptly at its request, any or all Company
property that is in his possession.

     9. NON-COMPETITION. Steele agrees that until May 17, 2000, he shall not,
directly or indirectly, be employed by, act as a consultant or contractor for,
be involved in a venture with, or otherwise engage in any business enterprise or
employment, with any of the following companies: Axent Technologies, Inc., Check
Point Software Technologies, Inc, Fore Systems, Inc., Network Associates, Inc.,
Secure Computing Corp., or Network-1 Security Solutions, Inc. 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.

     10. NON-SOLICITATION. Without the prior written consent of the Company,
Steele 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 120
days prior to Steele's attempt to employ him, or (b) call on or solicit any of
the actual or currently targeted prospective customers of the Company for the
purpose of offering any product or service that is in direct competition with
the products or services of the Company.

of the Employment Agreement (governing confidential information) shall remain in
full force and effect for two years from the date hereof. Otherwise, in all
other respects, the Employment Agreement is hereby terminated and shall be of no
further force or effect.

     12. INJUNCTION/SPECIFIC PERFORMANCE SETOFF. Steele acknowledges that a
breach of any of the provisions of Sections 9, 10 or 11 hereof would result in
immediate and irreparable injury to the Company which cannot be adequately or
reasonably compensated at law. Therefore, Steele 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,

<PAGE>   4

without the posting of a bond, enjoining and restraining such breach by Steele
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. Steele 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 Steele of the provisions of
Sections 9, 10 or 11 hereof.

     13. MISCELLANEOUS. 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. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Florida. A waiver
by any party of any of the terms and conditions hereof shall not be construed as
a general waiver by such party. Words such as "hereof", "hereunder", "herein"
and words of similar meaning shall refer to this Agreement as a whole and not to
only a specific section or paragraph of this Agreement. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto, their heirs,
successors and assigns; provided, however that Steele may not assign his rights
or duties hereunder except by operation of the laws of descent and distribution,
and CyberGuard may not assign its rights or duties hereunder except to a
business enterprise that acquires CyberGuard or substantially all its assets (by
merger, consolidation, share purchase or exchange, asset acquisition or other
corporate transaction).

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


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