Retirement Savings Plan

EXHIBIT 4.7


CYBERGUARD CORPORATION


RETIREMENT SAVINGS PLAN


Dated July 1, 1996, as amended


WHEREAS, CyberGuard Corporation (formerly known as Harris Computer Systems Corporation, and hereinafter referred to as the "Employer") heretofore adopted the Harris Computer Systems Corporation Savings Plan (hereinafter referred to as the "Plan") for the benefit of its Employees; and


WHEREAS, the Employer reserved the right to amend the Plan; and


WHEREAS, the Employer heretofore amended the Plan from time to time and desires to further amend the Plan; and


WHEREAS, it is intended that the Plan is to continue to be a qualified plan under Section 401(a) of the Internal Revenue Code for the exclusive benefit of the Participants and their Beneficiaries;


NOW, THEREFORE, the Plan is hereby amended by restating the Plan in its entirety as follows (with the name of the Plan being changed to the "CyberGuard Corporation Retirement Savings Plan").


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TABLE OF CONTENTS


ARTICLE ONE--DEFINITIONS ------------------------


1.1 Account
1.2 Administrator
1.3 Beneficiary
1.4 Break in Service
1.5 Code
1.6 Company Stock
1.7 Compensation
1.8 Early Retirement Date
1.9 Effective Date
1.10 Employee
1.11 Employer
1.12 Employment Date
1.13 Highly-Compensated Employee
1.14 Hour of Service
1.15 Leased Employee
1.16 Nonhighly-Compensated Employee
1.17 Normal Retirement Date
1.18 Participant
1.19 Plan
1.20 Plan Year
1.21 Trust
1.22 Trustee
1.23 Valuation Date
1.24 Year of Service


ARTICLE TWO--SERVICE DEFINITIONS AND RULES ------------------------------------------


2.1 Year of Service
2.2 Break in Service
2.3 Maternity/Paternity Leave of Absence
2.4 Rule of Parity on Return to Employment
2.5 Service in Excluded Job Classifications or with Related Companies


ARTICLE THREE--PLAN PARTICIPATION ---------------------------------


3.1 Participation
3.2 Re-employment of Former Participant
3.3 Termination of Eligibility


ARTICLE FOUR--ELECTIVE DEFERRALS, EMPLOYER CONTRIBUTIONS,
ROLLOVERS AND TRANSFERS FROM OTHER PLANS ---------------------------------------------------------


4.1 Elective Deferrals
4.2 Employer Contributions
4.3 Rollovers and Transfers of Funds from Other Plans
4.4 Timing of Contributions
4.5 Employee Voluntary "After-Tax" Contributions


ARTICLE FIVE--ACCOUNTING RULES ------------------------------


5.1 Investment of Accounts and Accounting Rules
5.2 Participants Omitted in Error


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ARTICLE SIX--VESTING, RETIREMENT AND DISABILITY BENEFITS --------------------------------------------------------


6.1 Vesting
6.2 Forfeiture of Nonvested Balance
6.3 Return to Employment Before Distribution of Vested Account Balance
6.4 Normal Retirement
6.5 Disability
6.6 Early Retirement


ARTICLE SEVEN--MANNER AND TIME OF DISTRIBUTING BENEFITS -------------------------------------------------------
7.1 Manner of Payment
7.2 Time of Commencement of Benefit Payments
7.3 Furnishing Information
7.4 Minimum Distribution Rules for Installment Payments
7.5 Amount of Death Benefit
7.6 Designation of Beneficiary
7.7 Distribution of Death Benefits
7.8 Eligible Rollover Distributions


ARTICLE EIGHT--LOANS AND IN-SERVICE WITHDRAWALS -----------------------------------------------


8.1 Loans
8.2 Hardship Distributions
8.3 Withdrawals After Age 59-1/2


ARTICLE NINE--ADMINISTRATION OF THE PLAN ----------------------------------------


9.1 Plan Administration
9.2 Claims Procedure
9.3 Trust Agreement


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ARTICLE TEN--SPECIAL COMPLIANCE PROVISIONS ------------------------------------------


10.1 Distribution of Excess Elective Deferrals
10.2 Limitations on 401(k) Contributions
10.3 Nondiscrimination Test for Employer Matching Contributions
10.4 Limitation on the Multiple Use Alternative


ARTICLE ELEVEN--LIMITATION ON ANNUAL ADDITIONS TO A PARTICIPANT'S
ACCOUNT -----------------------------------------------------------------


11.1 Rules and Definitions


ARTICLE TWELVE--AMENDMENT AND TERMINATION -----------------------------------------


12.1 Amendment
12.2 Termination of the Plan


ARTICLE THIRTEEN--TOP-HEAVY PROVISIONS --------------------------------------


13.1 Applicability
13.2 Definitions
13.3 Allocation of Employer Contributions and Forfeitures for a
Top-Heavy Plan Year
13.4 Vesting


ARTICLE FOURTEEN--MISCELLANEOUS PROVISIONS ------------------------------------------


14.1 Plan Does Not Affect Employment
14.2 Successor to the Employer
14.3 Repayments to the Employer
14.4 Benefits not Assignable
14.5 Merger of Plans
14.6 Investment Experience not a Forfeiture
14.7 Voting of Company Stock
14.8 Distribution to Legally Incapacitated
14.9 Construction
14.10 Governing Documents
14.11 Governing Law
14.12 Headings
14.13 Counterparts
14.14 Location of Participant or Beneficiary Unknown


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ARTICLE ONE--DEFINITIONS


For purposes of the Plan, unless the context or an alternative definition specified within another Article provides otherwise, the following words and phrases shall have the definitions provided:


1.1 "ACCOUNT" shall mean the individual bookkeeping accounts maintained for a Participant under the Plan which shall record (a) the Participant's allocations of Employer contributions and forfeitures, (b) amounts of Compensation deferred to the Plan pursuant to the Participant's election, (c) any amounts transferred to this Plan under Section 4.3 from another qualified retirement plan, (d) any voluntary "after-tax" contributions made pursuant to Section 4.5, and (e) the allocation of Trust investment experience.


1.2 "ADMINISTRATOR" shall mean the Plan Administrator appointed from time to time in accordance with the provisions of Article Nine hereof.


1.3 "BENEFICIARY" shall mean any person, trust, organization, or estate entitled to receive payment under the terms of the Plan upon the death of a Participant.


1.4 "BREAK IN SERVICE" shall mean the twelve (12)-month computation period specified in Article Two.


1.5 "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time.


1.6 "COMPANY STOCK" shall mean shares of common stock of CyberGuard Corporation.


1.7 "COMPENSATION" shall mean the compensation paid to a Participant by the Employer for the Plan Year, but exclusive of any program of deferred compensation or additional benefits payable other than in cash and any compensation received prior to his becoming a Participant in the Plan. Compensation shall include any amounts deferred under a salary reduction agreement in accordance with Section 4.1 or under a Code Section 125 plan maintained by the Employer.


In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, the annual Compensation of each Participant taken into account under the Plan shall not exceed the OBRA `93 annual compensation limit. The OBRA `93 annual compensation limit is $150,000, as adjusted by the Secretary of the Treasury or his delegate for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which Compensation is determined (determination period) beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA `93 annual compensation limit shall be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. In determining the Compensation of a Participant for the purposes of this limitation, the provisions of Code Section 414(q)(6) shall apply, except to the extent that such rules shall only include the spouse of the Participant and any lineal descendants of the Participant who have not attained age nineteen (19) before the end of the Plan Year. If, as a result of the application of such rules, the adjusted $150,000 limitation is exceeded, the limitation shall be prorated among the affected individuals' Compensation determined under this Section prior to the application of this limitation.


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If Compensation for any prior determination period is taken into account in determining a Participant's benefits accruing in the current Plan Year, the Compensation for that prior determination period is subject to the OBRA `93 annual compensation limit in effect for that prior determination period. For this purpose, for determination periods beginning before the first day of the first Plan Year beginning on or after January 1, 1994, the OBRA `93 annual compensation limit is $150,000.


For purposes of determining who is a Highly-Compensated Employee, Compensation shall mean compensation as defined in Code Section 414(q)(7).


1.8 "EARLY RETIREMENT DATE" shall mean the date a Participant, who is at least age fifty-five (55), retires from employment with the Employer.


1.9 "EFFECTIVE DATE" The Effective Date of this restated Plan, on and after which it supersedes the terms of the existing Plan document, is October 1, 1996, except where the provisions of the Plan shall otherwise specifically provide. The rights of any Participant who separated from the Employer's Service prior to this date shall be established under the terms of the Plan and Trust as in effect at the time of the Participant's separation from Service, unless the Participant subsequently returns to Service with the Employer. Rights of spouses and Beneficiaries of such Participants shall also be governed by those documents.


1.10 "EMPLOYEE" shall mean a common law employee of the Employer.


1.11 "EMPLOYER" shall mean CyberGuard Corporation, and any subsidiary or affiliate of CyberGuard Corporation which, with the approval of its board of directors, has adopted the Plan and shall include any successor(s) thereto which adopt this Plan. If, under state law, the Employer at any time is not governed by directors but instead by its stockholders, or the Employer is an unincorporated business and is governed by its owners, reference herein to the board of directors shall be deemed to refer to the individual(s) empowered to vote on the Employer's affairs.


1.12 "EMPLOYMENT DATE" shall mean the first date as of which an Employee is credited with an Hour of Service, provided that, in the case of a Break in Service, the Employment Date shall be the first date thereafter as of which an Employee is credited with an Hour of Service.


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1.13 "HIGHLY-COMPENSATED EMPLOYEE" shall mean any Employee of the Employer who:


(a) was a five percent (5%) owner of the Employer (as defined in Code
Section 416(i)(1)) during the "determination year" or "look-back
year"; or


(b) earned more than $100,000 (as increased by cost-of-living
adjustments) of Compensation from the Employer during the
"look-back year"; or


(c) earned more than $66,000 (as increased by cost-of-living
adjustments) of Compensation from the Employer during the
"look-back year" and was in the "Top-Paid Group" of Employees for
such year (as defined under Code Section 414(q)(4) and the
regulations promulgated thereunder); or


(d) was an officer of the Employer during the "look-back year" and
received Compensation during the "look-back year" from the
Employer in excess of fifty percent (50%) of the dollar limitation
under Section 415(b)(1)(A) of the Code. The number of officers
shall be limited to the lesser of (i) fifty (50) Employees; or
(ii) the greater of three (3) Employees or ten percent (10%) of
all Employees. If the Employer does not have at least one officer
whose annual Compensation exceeds fifty percent (50%) of the
dollar limitation under Code Section 415(b)(1)(A), then the
highest paid officer of the Employer shall be treated as a
Highly-Compensated Employee.


An Employee who is in the group consisting of the one hundred (100) Employees paid the greatest Compensation during the "determination year" and also described in subsections (b), (c) or (d) above when these subsections are modified to substitute "determination year" for "look-back year", shall be deemed a Highly-Compensated Employee for the determination year.


An Employee who separated from Service prior to the "determination year" shall be treated as a Highly-Compensated Employee for the "determination year" if such Employee was a Highly-Compensated Employee when such Employee separated from Service, or was a Highly-Compensated Employee at any time after attaining age fifty-five (55).


For purposes of this Section, the "determination year" shall be the Plan Year for which a determination is being made as to whether an Employee is a Highly-Compensated Employee. The "look-back year" shall be the twelve (12) month period immediately preceding the "determination year". However, if the Employer shall elect, the "look-back year" shall be the calendar year ending with or within the Plan Year for which testing for the determination of which Employees are Highly-Compensated Employees is being performed, and the "determination year" (if applicable) shall be the period of time, if any, which extends beyond the "look-back year" and ends on the last day of the Plan Year for which such testing is being performed (the "lag period"). If the "lag period" is less than twelve (12) months, the dollar threshold amounts specified in (b), (c) and (d) above shall be pro-rated based upon the number of months in the "lag period".


If an individual is a member of the "family" (within the meaning of Section 414(q)(6)(B) of the Code) of a five percent (5%) owner or a Highly-Compensated Employee in the group consisting of the ten (10) Highly-Compensated Employees paid the greatest Compensation during the "determination and/or look-back year," then such individual shall not be considered a separate Employee, and any Compensation paid to such individual (and any contribution or benefit on behalf of such individual) shall be treated as if paid to (or on behalf of) the five percent (5%) owner or such Highly-Compensated Employee.


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1.14 "HOUR OF SERVICE" shall mean:


(a) each hour for which an Employee is paid or entitled to payment for
the performance of duties for the Employer. These hours shall be
credited to the Employee for the computation period in which the
duties are performed; and


(b) each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, involuntary
military duty, or leave of absence. No more than five hundred and
one (501) Hours of Service shall be credited under this subsection
for any single continuous period during which no duties are
performed (whether or not such period occurs in a single
computation period). Hours under this subsection shall be
calculated and credited pursuant to Section 2530.200b-2(b) and (c)
of the Department of Labor Regulations which are incorporated
herein by this reference; and


(c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
Hours of Service shall not be credited both under subsection (a)
or subsection (b), as the case may be, and under this subsection
(c). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement, or payment is made.


1.15 "LEASED EMPLOYEE" shall mean any person who, pursuant to an agreement between the Employer and any other person or organization, has performed services for the Employer (determined in accordance with Code Section 414(n)(6)) on a substantially full-time basis for a period of at least one (1) year, where such services are of a type historically performed by employees in the business field of the Employer. A person shall not be considered a Leased Employee if the total number of Leased Employees does not exceed twenty percent (20%) of the Nonhighly-Compensated Employees employed by the Employer, and if any such person is covered by a money purchase pension plan providing (a) a nonintegrated employer contribution rate of at least ten percent (10%) of compensation, as defined in Section 11.1(b)(2) of the Plan but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee's gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b), (b) immediate participation, and (c) full and immediate vesting.


1.16 "NONHIGHLY-COMPENSATED EMPLOYEE" shall mean an Employee of the Employer who is not a Highly-Compensated Employee.


1.17 "NORMAL RETIREMENT DATE" shall mean a Participant's fifty-fifth (55th) birthday.


1.18 "PARTICIPANT" shall mean any Employee who has satisfied the eligibility requirements of Article Three and who is participating in the Plan.


1.19 "PLAN" shall mean this Plan as set forth herein and as it may be amended from time to time.


1.20 "PLAN YEAR" shall mean the twelve (12)-consecutive month period beginning January 1 and ending December 31, with the period beginning October 1, 1996 and ending December 31, 1996 being a short Plan Year.


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1.21 "TRUST" shall mean the Trust Agreement entered into between the Employer and the Trustee forming part of this Plan, together with any amendments thereto. "Trust Fund" shall mean any and all property held by the Trustee pursuant to the Trust Agreement, together with income therefrom.


1.22 "TRUSTEE" shall mean the Trustee or Trustees appointed by the Employer, and any successors thereto.


1.23 "VALUATION DATE" shall mean the date or dates established by the Administrator for the valuation of the assets of the Plan. In no event shall the assets of the Plan be valued less frequently than once each Plan Year.


1.24 "YEAR OF SERVICE" OR "SERVICE" and the special rules with respect to crediting Service are in Article Two of the Plan.


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ARTICLE TWO--SERVICE DEFINITIONS AND RULES


Service is the period of employment credited under the Plan. Definitions and special rules related to Service are as follows:


2.1 YEAR OF SERVICE. An Employee shall be credited with a Year of Service for each twelve (12)-month period commencing on his Employment Date (or re-employment date) and the twelve (12)-month anniversaries of that date and ending on the date a Break in Service begins. An Employee shall also receive credit for any Break in Service of less than twelve (12)-consecutive months. Fractional periods of a year shall be expressed in terms of days, with three hundred and sixty-five (365) days being equal to one (1) year.


Any former employee of Concurrent Computer Corporation who transferred employment directly to the Employer shall be credited with any prior service with Concurrent Computer Corporation for purposes of determining such Employee's "Years of Service".


2.2 BREAK IN SERVICE. A Break in Service shall be a continuous period in which an Employee is not employed by the Employer. Such period shall begin on the date the Employee retires, quits, is discharged or dies or, if earlier, the twelve (12)-month anniversary of the date on which the Employee is absent from Service for any other reason.


2.3 MATERNITY/PATERNITY LEAVE OF ABSENCE. For any individual who is absent from work for any period by reason of the individual's pregnancy, birth of the individual's child, placement of a child with the individual in connection with the individual's adoption of the child, or by reason of the individual's caring for the child for a period beginning immediately following such birth or adoption, the twelve (12)-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a Break in Service.


2.4 RULE OF PARITY ON RETURN TO EMPLOYMENT. An Employee who returns to employment after a Break in Service shall retain credit for his pre-Break Years of Service, subject to the following rules:


(a) If a Participant incurs five (5) or more consecutive one (1)-year
Breaks in Service, any Years of Service performed thereafter shall
not be used to increase the nonforfeitable interest in his Account
accrued prior to such five (5) or more consecutive one (1)-year
Breaks in Service.


(b) If when a Participant incurred a Break in Service, he had not
completed sufficient Years of Service to be credited with a vested
benefit under the schedule set forth in Section 6.1, his pre-Break
Years of Service shall be disregarded if his consecutive one
(1)-year Breaks in Service equal or exceed five (5).


2.5 SERVICE IN EXCLUDED JOB CLASSIFICATIONS OR WITH RELATED COMPANIES.


(a) SERVICE WHILE A MEMBER OF AN INELIGIBLE CLASSIFICATION OF
EMPLOYEES. An Employee who is a member of an ineligible
classification of Employees shall not be eligible to participate
in the Plan while a member of such ineligible classification.
However, if any such Employee is transferred to an eligible
classification, such Employee shall be credited with any prior
Years of Service completed while a member of such an ineligible
classification. For this purpose,


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an Employee shall be considered a member of an ineligible
classification of Employees for any period during which: (i)
he is a Leased Employee; or (ii) he is employed in a job
classification which is excluded from participating in the
Plan under Section 3.1 below.


(b) SERVICE WITH RELATED GROUP MEMBERS. For each Plan Year in which
the Employer is a member of a "related group", as hereinafter
defined, all Service of an Employee with any one or more members
of such related group shall be treated as employment by the
Employer for purposes of determining the Employee's Years of
Service. The transfer of employment by any such Employee to
another member of the related group shall not be deemed to
constitute a retirement or other termination of employment by the
Employee for purposes of the Plan, but the Employee shall be
deemed to have continued in employment with the Employer for
purposes hereof. For purposes of this subsection (b), "related
group" shall mean the Employer and all corporations, trades or
businesses (whether or not incorporated) which constitute a
controlled group of corporations with the Employer, a group of
trades or businesses under common control with the Employer, or an
affiliated service group which includes the Employer, within the
meaning of Section 414(b), Section 414(c), or Section 414(m),
respectively, of the Code or any other entity required to be
aggregated under Code Section 414(o).


(c) CONSTRUCTION. This Section is included in the Plan to comply with
the Code provisions regarding the crediting of Service, and not to
extend any additional rights to Employees in ineligible
classifications other than as required by the Code and regulations
thereunder.


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ARTICLE THREE--PLAN PARTICIPATION


3.1 PARTICIPATION. All Employees participating in the Plan prior to the Plan's restatement shall continue to participate, subject to the terms hereof.


Each other Employee shall become a Participant under the Plan effective as of the Employee's Employment Date, or as soon as administratively possible thereafter.


3.2 RE-EMPLOYMENT OF FORMER PARTICIPANT. A Participant whose participation ceased because of termination of employment with the Employer shall immediately participate upon his re-employment.


3.3 TERMINATION OF ELIGIBILITY. In the event a Participant is no longer a member of an eligible class of Employees and he becomes ineligible to participate, such Employee shall participate immediately upon returning to an eligible class of Employees.


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ARTICLE FOUR--ELECTIVE DEFERRALS, EMPLOYER CONTRIBUTIONS,
ROLLOVERS AND TRANSFERS FROM OTHER PLANS


4.1 ELECTIVE DEFERRALS.


(a) ELECTIONS. A Participant may elect to defer a portion of his
Compensation for a Plan Year. The amount of a Participant's
Compensation that is deferred in accordance with the Participant's
election shall be withheld by the Employer from the Participant's
Compensation. The amount deferred on behalf of each Participant
shall be contributed by the Employer to the Plan and allocated to
the Participant's Account.


(b) CHANGES IN ELECTION. A Participant may prospectively elect to
change or revoke the amount (or percentage) of his elective
deferrals during the Plan Year by filing a written election with
the Employer, or via a telephone "voice response" system
designated by the Admin ...