Exhibit 10.4


 


[TIER 3 ELIGIBLE OFFICER]


 


WEBSENSE, INC.


 


PARTICIPATION AGREEMENT


 


(OFFICER CHANGE IN CONTROL SEVERANCE BENEFIT
PLAN)


 


Name of Eligible Officer:


 


You have been selected to participate in the Websense, Inc.
Officer Change in Control Severance Benefit Plan (the “Plan”).  Capitalized terms not explicitly defined in
this Participation Agreement (the “Agreement”)
but defined in the Plan shall have the same definitions as in the Plan.


 


Pursuant to the terms of the Plan, a copy of which is attached as Exhibit A
to this Agreement, you may become entitled to receive severance benefits in the
event of a Covered Termination as provided in this Agreement.


 


In accordance with Section 2 of the Plan, you have been designated
as an Eligible Officer.


 


Section 1.              SEVERANCE BENEFITS
FOR COVERED TERMINATIONS DURING THE COVERAGE PERIOD.


 


Subject to the exceptions
set forth in Section 2(c) of the Plan, if during the Coverage Period
you are terminated in a Covered Termination, and meet all the other
requirements set forth in Sections 2(b) and 5 of the Plan, including,
without limitation, executing the applicable required Release within the
applicable time period set forth therein and provided that such Release becomes
effective in accordance with its terms, you will receive the following
severance benefits:


 


(a)           Cash Severance Benefit.  You will be entitled to receive a single lump
sum cash payment equal to three (3) months Base Salary payable as provided
in Section 6 of the Plan.


 


(b)           Accelerated Vesting of
Stock Awards.


 


(1)           Effective as of the
date of your Covered Termination, (i) the vesting and exercisability of
all outstanding stock options to purchase the Company’s common stock that are
held by you on such date shall be accelerated in full, (ii) any
reacquisition or repurchase rights held by the Company in respect of common
stock issued pursuant to any other stock award granted to you by the Company
shall lapse in full, and (iii) the vesting of any other stock awards
granted to you by the Company, and any issuance of shares triggered by the
vesting of such stock awards, shall be accelerated in full.  Notwithstanding the foregoing, this Section 1(b) shall
not apply to stock awards issued under or held in any Qualified Plan.


 


(2)           If your stock
awards accelerate vesting in accordance with this Section 1(b), such stock
awards will remain exercisable, if applicable, until the earlier of (A) one
(1) year following the effective date of Covered Termination, or (B) the
original maximum term 


 


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of the stock award. In
order to give effect to the intent of the foregoing provision, notwithstanding
anything to the contrary set forth in your stock award agreements or the
applicable equity incentive plan under which such stock award was granted that
provides that any then unvested portion of your award will immediately expire
upon your termination of service, no unvested portion of your stock award shall
terminate any earlier than two (2) months following any Covered
Termination that occurs prior to a Change in Control.   Notwithstanding anything to the contrary set
forth herein, your stock awards shall remain subject to earlier termination in
connection with a “Corporate Transaction” as provided in the Company’s Amended
and Restated 2000 Stock Incentive Plan, or substantially equivalent provisions
of any successor or other equity incentive plan adopted by the Company which
govern your stock awards, as applicable.


 


Section 2.              DEFINITIONS.


 


(a)           “Base Salary” shall mean your base
pay (excluding incentive pay, premium pay, commissions, overtime, bonuses and
other forms of variable compensation), at the rate in effect during the last
regularly scheduled payroll period immediately preceding the date of your
Covered Termination, and prior to any reduction in your base salary that would
permit you to voluntarily terminate employment for Good Reason (as defined
below).


 


(b)           “Good Reason”
shall mean  any one of the following events occurs
without your consent on or after the commencement of your employment, provided
that you have first provided written notice to the Company (or the surviving
corporation, as applicable) within 90 days of the first such occurrence of such
condition specifying the event(s) constituting Good Reason and specifying
that you intend to terminate your employment not earlier than 30 days after
providing such notice, and the Company (or surviving corporation) has not cured
such event(s) within 30 days (or such longer period as may be specified by
you in such notice) after your written notice is received by such member of the
Board (or by the surviving corporation) (the “Cure Period”),
and you resign within thirty (30) days following the end of the Cure
Period:  (i) a material breach by
the Company of any provision of the Plan or this Agreement or any other
material agreement between you and the Company concerning the terms and
conditions of your employment; (ii) a material reduction by the Company in
your annual base salary; provided, however,
that Good Reason shall not be deemed to have occurred in the event of a
reduction in your annual base salary that is pursuant to a salary reduction
program affecting substantially all of the employees of the Company and that
does not adversely affect you to a greater extent than other similarly situated
employees; or (iii) a relocation of your business office to a location
that requires a one-way increase in your driving distance of more than
thirty-five (35) miles, except for required travel by you on the Company’s
business to an extent substantially consistent with your business travel
obligations prior to the effective date of the Change in Control.


 


Notwithstanding anything to the contrary set forth herein, any
definition of “Good Reason” contained in any individually negotiated written agreement
between you and the Company shall apply in lieu of the foregoing provision if
such other definition would trigger your right to resign and receive benefits
under the Plan (“Alternate Good Reason Definition”).  In the event that the Company’s Compensation
Committee and Company’s counsel determine that any Alternate Good Reason
Definition applicable to you does not meet the requirements for payments made
upon conditions that constitute a “substantial risk of forfeiture” as defined
in 


 


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Treas. Reg. 1.409A-1(d), any Cash Severance Benefit payment will be
subject to the distribution requirements of Section 409A(a)(2)(A) of the
Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of
the Code that such payment be delayed until 6 months after your separation from
service if you are a “specified employee” within the meaning of the aforesaid
section of the Code at the time of such separation from service.


 


(c)           “Qualified Plan” means a plan
sponsored by the Company or an affiliate that is intended to be qualified under
Section 401(a) of the Internal Revenue Code.


 


Section 3.              OTHER AGREEMENTS.


 


By signing this Agreement, you agree that any severance benefits that
may become payable under the Plan shall be offset by any severance benefits
that may become payable under any individual written agreement between you and
the Company (“Other Agreement”), if
applicable. Notwithstanding anything to the contrary set forth herein, to the
extent that any Other Agreement provides you with a more favorable severance
benefit, you will receive the greater benefit provided under such individual
agreement in lieu of the lesser benefit provided under the Plan and this
Agreement, as well as, without duplication of benefits, any benefits provided
under this Agreement not included in such Other Agreement.  With respect to Covered Terminations that
occur prior to January 1, 2009, any severance amounts otherwise payable
under this Plan that are offset by severance benefits payable under any Other
Agreement shall be paid at the time provided in such other Agreement.  Notwithstanding anything to the contrary set
forth in any Other Agreement, any severance amounts payable under this Plan
that are offset by amounts payable under any Other Agreement pursuant to this Section shall
be paid at the time set forth in Section 6 of the Plan with respect to
Covered Terminations that occur on or after January 1, 2009.


 


If you elect not to sign this Agreement, the terms of any Other
Agreement will solely control the provision of your severance benefits, and you
will not be an Eligible Officer that may receive additional severance benefits
under the Plan.


 


Section 4.              AMENDMENT.


 


The foregoing severance benefits are subject to such change as the
Company, pursuant to Section 8(b) of the Plan, may determine in its
sole and absolute discretion.  Any such
change in severance benefits shall be set forth in a revised version of this
Agreement.


 


Section 5.              REDUCTIONS.


 


The severance benefits set forth in this Participation Agreement are
subject to certain reductions under Section 3 of the Plan.


 


****************


 


To participate in the Plan, please sign and date this Agreement in the
space provided below and return it to Susan Brown, Vice President, Human
Resources no later than [                  ],
2008.


 


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The extra copy is for your file. 
On behalf of Websense Inc., I am pleased to welcome you as an Eligible
Officer under the Plan.


 


 


Sincerely,


 


 


	
   

  	
   

  	
   

  
	
  Gene Hodges

  	
   

  	
   

  
	
  Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant’s
  Signature

  	
   

  	
  Date

  



 


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EXHIBIT A


 


WEBSENSE,
INC. OFFICER CHANGE IN CONTROL SEVERANCE BENEFIT PLAN


 


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