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                                                                    EXHIBIT 10.1

                                 NETEGRITY, INC.

                          Executive Retention Agreement

         THIS EXECUTIVE RETENTION AGREEMENT by and between Netegrity, Inc., a
Delaware corporation (the "Company"), and Stephen McLaughlin (the "Executive")
is made as of August 29, 2003 (the "Effective Date").

         WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders, and

         WHEREAS, the Board of Directors of the Company (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued employment and dedication of the Company's key personnel without
distraction from the possibility of a change in control of the Company and
related events and circumstances.

         NOW, THEREFORE, as an inducement for and in consideration of the
Executive remaining in its employ, the Company agrees that the Executive shall
receive the severance benefits set forth in this Agreement in the event the
Executive's employment with the Company is terminated under the circumstances
described below subsequent to a Change in Control (as defined in Section 1.1).

         1. Key Definitions.

         As used herein, the following terms shall have the following respective
meanings:

                  1.1      "Change in Control" means an event or occurrence set
forth in any one or more of subsections (a) through (d) below (including an
event or occurrence that constitutes a Change in Control under one of such
subsections but is specifically exempted from another such subsection):

                           (a)      the acquisition by an individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 50% or more of either (x) the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (y) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from the Company
(excluding an acquisition pursuant to the exercise, conversion or exchange of
any security exercisable for, convertible into

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or exchangeable for common stock or voting securities of the Company, unless the
Person exercising, converting or exchanging such security acquired such security
directly from the Company or an underwriter or agent of the Company), (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or

                           (b)      such time as the Continuing Directors (as
defined below) do not constitute a majority of the Board (or, if applicable, the
Board of Directors of a successor corporation to the Company), where the term
"Continuing Director" means at any date a member of the Board (i) who was a
member of the Board on the date of the execution of this Agreement or (ii) who
was nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least
a majority of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded from
this clause (ii) any individual whose initial assumption of office occurred as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents, by or on behalf of a person other than the Board; or

                           (c)      the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share exchange involving the
Company or a sale or other disposition of all or substantially all of the assets
of the Company in one or a series of transactions (a "Business Combination"),
unless, immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, at least 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 50% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or

                           (d)      approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.

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                  1.2      "Change in Control Date" means the first date during
the Term (as defined in Section 2) on which a Change in Control occurs.

                  1.3      "Cause" means:

                           (a)      the Executive's willful and continued
failure to substantially perform his or her reasonable assigned duties (other
than any such failure resulting from incapacity due to physical or mental
illness or any failure after the Executive gives notice of termination for Good
Reason), which failure is not cured within 30 days after a written demand for
substantial performance is received by the Executive from the Board of Directors
of the Company which specifically identifies the manner in which the Board of
Directors believes the Executive has not substantially performed the Executive's
duties; or

                           (b)      the Executive's willful engagement in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Company.

         For purposes of this Section 1.3, no act or failure to act by the
Executive shall be considered "willful" unless it is done, or omitted to be
done, in bad faith and without reasonable belief that the Executive's action or
omission was in the best interests of the Company.

                  1.4      "Good Reason" means the occurrence, without the
Executive's written consent, of any of the events or circumstances set forth in
clauses (a) through (e) below. Notwithstanding the occurrence of any such event
or circumstance, such occurrence shall not be deemed to constitute Good Reason
if, prior to the Date of Termination specified in the Notice of Termination
(each as defined in Section 3.2(a)) given by the Executive in respect thereof,
such event or circumstance has been fully corrected and the Executive has been
reasonably compensated for any losses or damages resulting therefrom (provided
that such right of correction by the Company shall only apply to the first
Notice of Termination for Good Reason given by the Executive).

                           (a)      a reduction in the Executive's annual base
salary as in effect on the Measurement Date or as the same was or may be
increased thereafter from time to time;

                           (b)      the failure by the Company to (i) continue
in effect any material compensation or benefit plan or program (including
without limitation any life insurance, medical, health and accident or
disability plan and any vacation or automobile program or policy) (a "Benefit
Plan") in which the Executive participates or which is applicable to the
Executive immediately prior to the Measurement Date, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan or program, (ii) continue the Executive's
participation therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided and
the level of the Executive's participation relative to other participants, than
the basis existing immediately prior to the Measurement Date or (iii) award cash
bonuses to the Executive in amounts and in a manner substantially consistent
with past practice in light of the Company's financial performance;

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                           (c)      the failure of the Company to obtain the
agreement from any successor to the Company to assume and agree to perform this
Agreement, as required by Section 6.1;

                           (d)      a purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 3.2(a); or

                           (e)      any failure of the Company to pay or provide
to the Executive any portion of the Executive's compensation or benefits due
under any Benefit Plan within seven days of the date such compensation or
benefits are due, or any material breach by the Company of this Agreement or any
employment agreement with the Executive.

         The Executive's right to terminate his or her employment for Good
Reason shall not be affected by his or her incapacity due to physical or mental
illness, or the fact that the Executive at such time may have an offer of
employment from another employer or any other reason for terminating his or her
employment with the Company.

                  1.5      "Disability" means the Executive's absence from the
full-time performance of the Executive's duties with the Company for 90 days,
whether or not consecutive, during any 360-day period, due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the Executive's
legal representative.

         2. Term of Agreement. This Agreement, and all rights and obligations of
the parties hereunder, shall take effect upon the Effective Date and shall
expire upon the first to occur of (a) the expiration of the Term (as defined
below) if a Change in Control has not occurred during the Term, (b) the
termination of the Executive's employment with the Company prior to the Change
in Control Date, (c) the date 12 months after the Change in Control Date, if the
Executive is still employed by the Company as of such later date, or (d) the
fulfillment by the Company of all of its obligations under Sections 4 and 5.2 if
the Executive's employment with the Company terminates within 12 months
following the Change in Control Date. "Term" shall mean the period commencing as
of the Effective Date and continuing in effect through December 31, 2007;
provided, however, that commencing on January 1, 2008 and each January 1
thereafter, the Term shall be automatically extended for one additional year
unless, not later than 90 days prior to the scheduled expiration of the Term (or
any extension thereof), the Company shall have given the Executive written
notice that the Term will not be extended.

         3. Employment Status; Termination Following Change in Control.

                  3.1      Not an Employment Contract. The Executive
acknowledges that this Agreement does not constitute a contract of employment or
impose on the Company any obligation to retain the Executive as an employee and
that this Agreement does not prevent the Executive from terminating employment
at any time. If the Executive's employment with the Company terminates for any
reason and subsequently a Change in Control shall occur, the Executive shall not
be entitled to any benefits hereunder.

                  3.2      Termination of Employment.

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                           (a)      If the Change in Control Date occurs during
the Term, any termination of the Executive's employment by the Company or by the
Executive within 12 months following the Change in Control Date (other than due
to the death of the Executive) shall be communicated by a written notice to the
other party hereto (the "Notice of Termination"), given in accordance with
Section 7. Any Notice of Termination shall: (i) indicate the specific
termination provision (if any) of this Agreement relied upon by the party giving
such notice, (ii) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) specify the
Date of Termination (as defined below). The effective date of an employment
termination (the "Date of Termination") shall be the close of business on the
date specified in the Notice of Termination (which date may not be less than 15
days or more than 120 days after the date of delivery of such Notice of
Termination), in the case of a termination other than one due to the Executive's
death, or the date of the Executive's death, as the case may be. In the event
the Company fails to satisfy the requirements of Section 3.2(a) regarding a
Notice of Termination, the purported termination of the Executive's employment
pursuant to such Notice of Termination shall not be effective for purposes of
this Agreement.

                           (b)      The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting any such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

                           (c)      Any Notice of Termination for Cause given by
the Company must be given within 30 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Cause. Prior to any Notice of Termination
for Cause being given (and prior to any termination for Cause being effective),
the Executive shall be entitled to a hearing before the Board of Directors of
the Company at which her or she may, at his or her election, be represented by
counsel and at which he or she shall have a reasonable opportunity to be heard.
Such hearing shall be held on not less than 15 days prior written notice to the
Executive stating the Board of Directors' intention to terminate the Executive
for Cause and stating in detail the particular event(s) or circumstance(s) which
the Board of Directors believes constitutes Cause for termination. Any such
Notice of Termination for Cause must be approved by the Board of Directors.

                           (d)      Any Notice of Termination for Good Reason
given by the Executive must be given within 90 days of the occurrence of the
event(s) or circumstance(s) which constitute(s) Good Reason.

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         4. Benefits to Executive.

                  4.1      Compensation and Stock Acceleration. If the Change in
Control Date occurs during the Term and the Executive's employment with the
Company terminates within 12 months following the Change in Control Date, the
Executive shall be entitled to the following benefits:

                           (a)      Termination Without Cause or for Good
Reason. If the Executive's employment with the Company is terminated by the
Company (other than for Cause, Disability or death) or by the Executive for Good
Reason within 12 months following the Change in Control Date, then the Executive
shall be entitled to the following benefits:

                                    (i)      (A) the vesting schedule of each
outstanding option to purchase shares of Common Stock of the Company held by the
Executive shall be accelerated so that the number of shares that would otherwise
have first become vested during the two-year period following the Date of
Termination shall immediately become exercisable and shares of Common Stock of
the Company received upon exercise of any vested options will no longer be
subject to a right of repurchase by the Company, (B) the vesting schedule of
each outstanding restricted stock award shall be accelerated so that the number
of shares that would otherwise have first become free from conditions or
restrictions during the two-year period following the Date of Termination shall
immediately become free from conditions or restrictions and the aggregate number
of shares free from conditions or restrictions under such award will no longer
be subject to a right of repurchase by the Company and (C) notwithstanding any
provision in any applicable option agreement to the contrary, each such option
shall continue to be exercisable by the Executive (to the extent such option was
exercisable on the Date of Termination) for a period of six months following the
Date of Termination (or the remainder of the option term if less than six
months);

                                    (ii)     the Company shall pay to the
Executive in a lump sum in cash within 30 days after the Date of Termination the
aggregate of the following amounts:

                                             (1) the sum of (A) the Executive's
base salary through the Date of Termination, (B) the product of (x) the annual
bonus paid or payable (including any bonus or portion thereof which has been
earned but deferred) for the most recently completed fiscal year and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365 and
(C) the amount of any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not previously paid (the sum of the
amounts described in clauses (A), (B), and (C) shall be hereinafter referred to
as the "Accrued Obligations"); and

                                             (2) the amount equal to (A) the
Executive's base salary for the six months prior to the Date of Termination plus
(B) 50% of the Executive's annual bonus opportunity under the Company's bonus
plan for the most recently completed fiscal year;

                                    (iii)    for 12 months after the Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the

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Company shall continue to provide benefits to the Executive and the Executive's
family at least equal to those which would have been provided to them if the
Executive's employment had not been terminated, in accordance with the
applicable Benefit Plans in effect on the Measurement Date or, if more favorable
to the Executive and his or her family, in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive a particular type of
benefits (e.g., health insurance benefits) from such employer on terms at least
as favorable to the Executive and his or her family as those being provided by
the Company, then the Company shall no longer be required to provide those
particular benefits to the Executive and his or her family;

                                    (iv)     to the extent not previously paid
or provided, the Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive following the Executive's termination of employment under
any plan, program, policy, practice, contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and

                                    (v)      for purposes of determining
eligibility (but not the time of commencement of benefits) of the Executive for
retiree benefits to which the Executive is entitled, the Executive shall be
considered to have remained employed by the Company until 12 months after the
Date of Termination.

                           (b)      Termination for Death or Disability. If the
Executive's employment with the Company is terminated by reason of the
Executive's death or Disability within 12 months following the Change in Control
Date, then the Company shall (i) pay the Executive (or his or her estate, if
applicable), in a lump sum in cash within 30 days after the Date of Termination,
the Accrued Obligations and (ii) timely pay or provide to the Executive the
Other Benefits.

                           (c)      Resignation without Good Reason; Termination
for Cause. If the Executive voluntarily terminates his or her employment with
the Company within 12 months following the Change in Control Date, excluding a
termination for Good Reason, or if the Company terminates the Executive's
employment with the Company for Cause within 12 months following the Change in
Control Date, then the Company shall (i) pay the Executive, in a lump sum in
cash within 30 days after the Date of Termination, the sum of (A) the
Executive's annual base salary through the Date of Termination and (B) the
amount of any compensation previously deferred by the Executive, in each case to
the extent not previously paid, and (ii) timely pay or provide to the Executive
the Other Benefits.

                  4.2      Mitigation. The Executive shall not be required to
mitigate the amount of any payment or benefits provided for in this Section 4 by
seeking other employment or otherwise. Further, except as provided in Section
4.1(a)(iii), the amount of any payment or benefits provided for in this Section
4 shall not be reduced by any compensation earned by the Executive as a result
of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.

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         5. Disputes.

                  5.1      Settlement of Disputes; Arbitration. All claims by
the Executive for benefits under this Agreement shall be directed to and
determined by the Board of Directors of the Company and shall be in writing. Any
denial by the Board of Directors of a claim for benefits under this Agreement
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Board of Directors shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim. Any further dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Boston, Massachusetts, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.

                  5.2      Expenses. The Company agrees to pay as incurred, to
the full extent permitted by law, all legal, accounting and other fees and
expenses which the Executive may reasonably incur as a result of any claim or
contest (regardless of the outcome thereof) by the Company, the Executive or
others regarding the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive regarding the amount of any payment
or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended.

         6. Successors.

                  6.1      Successor to Company. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
expressly to assume and agree to perform this Agreement to the same extent that
the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain an assumption of this Agreement at or
prior to the effectiveness of any succession shall be a breach of this Agreement
and shall constitute Good Reason if the Executive elects to terminate
employment, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
defined above and any successor to its business or assets as aforesaid which
assumes and agrees to perform this Agreement, by operation of law or otherwise.

                  6.2      Successor to Executive. This Agreement shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would still
be payable to the Executive or his or her family hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.

         7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii)

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prepaid via a reputable nationwide overnight courier service, in each case
addressed to the Company, at 52 Second Avenue, Waltham, Massachusetts 02451, and
to the Executive at the Executive's address indicated on the signature page of
this Agreement (or to such other address as either the Company or the Executive
may have furnished to the other in writing in accordance herewith). Any such
notice, instruction or communication shall be deemed to have been delivered five
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service. Either party may give any notice,
instruction or other communication hereunder using any other means, but no such
notice, instruction or other communication shall be deemed to have been duly
delivered unless and until it actually is received by the party for whom it is
intended.

         8. Miscellaneous.

                  8.1      Employment by Subsidiary. For purposes of this
Agreement, the Executive's employment with the Company shall not be deemed to
have terminated solely as a result of the Executive continuing to be employed by
a wholly-owned subsidiary of the Company.

                  8.2      Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.

                  8.3      Injunctive Relief. The Company and the Executive
agree that any breach of this Agreement by the Company is likely to cause the
Executive substantial and irrevocable damage and therefore, in the event of any
such breach, in addition to such other remedies which may be available, the
Executive shall have the right to specific performance and injunctive relief.

                  8.4      Governing Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the internal
laws of the Commonwealth of Massachusetts, without regard to conflicts of law
principles.

                  8.5      Waivers. No waiver by the Executive at any time of
any breach of, or compliance with, any provision of this Agreement to be
performed by the Company shall be deemed a waiver of that or any other provision
at any subsequent time.

                  8.6      Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but both of which
together shall constitute one and the same instrument.

                  8.7      Tax Withholding. Any payments provided for hereunder
shall be paid net of any applicable tax withholding required under federal,
state or local law.

                  8.8      Entire Agreement. This Agreement sets forth the
entire agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in
respect of the subject matter contained herein; and any prior agreement of the
parties hereto in respect of

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the subject matter contained herein is hereby terminated and cancelled.
Notwithstanding the foregoing, this Agreement shall not limit, and shall be in
addition to, any rights the Executive may also have or be entitled to on the
date hereof or in the future from time to time with respect to the acceleration
of options pursuant to any equity plan of the Company or of a subsidiary of the
Company (as administered by the relevant plan administrator), any option
agreement or any other written documentation executed or assumed by or on behalf
of the Company or of a subsidiary of the Company.

                  8.9      Amendments. This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Executive.

                  8.10     Executive's Acknowledgements. The Executive
acknowledges that he or she: (a) has read this Agreement; (b) has been
represented in the preparation, negotiation, and execution of this Agreement by
legal counsel of the Executive's own choice or has voluntarily declined to seek
such counsel; (c) understands the terms and consequences of this Agreement; and
(d) understands that the law firm of Hale and Dorr LLP is acting as counsel to
the Company in connection with the transactions contemplated by this Agreement,
and is not acting as counsel for the Executive.

                      [the next page is the signature page]

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.

                                          NETEGRITY, INC.

                                          By: /s/ Regina O. Sommer
                                              ----------------------------------
                                          Title: CFO

                                          /s/ Stephen McLaughlin
                                          --------------------------------------
                                          Stephen McLaughlin

                                          25 Blackthorn Lane

                                          White Plains, New York  10606

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