Document:

Exhibit 10.1

 

WEBSENSE, INC.

 

OFFICER CHANGE IN CONTROL SEVERANCE BENEFIT
PLAN

 

Section 1.              INTRODUCTION.

 

The Websense, Inc. Officer
Change in Control Severance Benefit Plan (the “Plan”)
was established effective July 17, 2008 (the “Effective
Date”).  The purpose of
the Plan is to provide for the payment of severance benefits to certain
eligible officers of Websense, Inc. (the “Company”) or an affiliate of
the Company whose employment with the Company is involuntarily terminated under
certain circumstances and who otherwise meet the eligibility criteria set forth
in Section 2(a) below.  This
Plan shall supersede any severance benefit plan, policy or practice previously
maintained by the Company or an affiliate of the Company, except to the extent
an Eligible Officer is a party to an individual written agreement with the
Company that provides severance benefits greater to those provided under the
Plan, in which case the Eligible Officer will be entitled to receive, without
duplication, the greater severance benefits under such individual agreement, as
well as any additional benefits provided under the Plan not available under
such individual agreement.  This Plan
document also is the summary plan description for the Plan.  Certain capitalized terms used in this
Agreement have the definitions set forth in Section 2(e) below.

 

Section 2.              ELIGIBILITY FOR
BENEFITS.

 

(a)           General Rules.  Subject to the requirements set forth in this
Section, the Company will grant severance benefits under the Plan to Eligible
Officers as set forth in such Eligible Officer’s individual Plan participation
agreement (the “Participation Agreement”).

 

(b)           Conditions to Benefit
Entitlement.

 

(1)           Unless such
requirement is waived by the Company, in the event of an Eligible Officer’s
involuntary termination without Cause, in order to be eligible to receive any
benefits under the Plan, an Eligible Officer must remain on the job until his
or her date of termination as scheduled by the Company, which date may not
exceed thirty (30) days following notification of any involuntary termination
by the Company, or such longer period required by local law.  The foregoing requirement shall not apply
with respect to terminations resulting from an Eligible Officer’s resignation
for Good Reason.

 

(2)           In order to be
eligible to receive any benefits under the Plan, unless otherwise provided in
the Eligible Officer’s Participation Agreement, no earlier than the date of
employment termination, an Eligible Officer also must execute a general waiver
and release in substantially the form attached hereto as Exhibit A, Exhibit B
or Exhibit C, as appropriate (the “Release”),
within the time period set forth therein, but in no event later than (i) if
a Change in Control shall have occurred prior to such Covered Termination,
forty-five (45) days following termination of employment or (ii) if a
Change in Control shall not have occurred prior to such Covered Termination,
forty-five (45) days following the effective date of such Change in Control,
and such Release must become effective in accordance with its terms.  The Company, in its discretion, may modify
the form of the required Release to comply with applicable law and 

 

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shall determine the form of the required Release, which
may be incorporated into a termination agreement or other agreement with the
Eligible Officer.

 

(c)           Exceptions to Benefit
Entitlement.  An Eligible Officer
will not receive benefits under the Plan (or will receive reduced benefits
under the Plan) in the following circumstances, as determined by the Company in
its discretion:

 

(1)           The officer has
executed an individually negotiated employment contract or agreement with the
Company or an affiliate of the Company relating
to severance benefits that is in effect on his or her termination date, in
which case such officer’s severance benefit, if any, shall be governed by the
terms of such individually negotiated employment contract or agreement and
shall be governed by this Plan only to the extent that the reduction pursuant
to Section 3(c) below does not entirely eliminate benefits under this
Plan.

 

(2)           In connection with
an involuntary termination without Cause, the officer is offered an identical
or substantially equivalent or comparable position with the Company or an
affiliate of the Company.  For purposes
of the foregoing, a “substantially equivalent or comparable position” is one
that offers the officer substantially the same level of responsibility and
compensation and does not require a relocation of the officer’s place of
employment by more than thirty-five (35) miles from its previous location.  The foregoing exception shall not apply with
respect to an Eligible Officer’s resignation for Good Reason.

 

(3)           In connection with
an involuntary termination without Cause, the officer is offered immediate
reemployment by a successor to the Company or an affiliate of the Company or by a purchaser of its assets, as
the case may be, following a change in ownership of the Company or an affiliate of the Company or a
sale of substantially all of the assets of a division or business unit of the
Company or an affiliate of the Company. 
For purposes of the foregoing, “immediate reemployment” means that the
officer’s employment with the successor to the Company or an affiliate of the Company or the purchaser of its assets, as
the case may be, results in uninterrupted employment such that the officer does
not incur a lapse in pay as a result of the change in ownership of the Company or an affiliate of the Company or the
sale of its assets.  The foregoing
exception shall not apply with respect to an Eligible Officer’s resignation for
Good Reason.

 

(d)           Definitions.  For purposes of this Plan, the following
definitions shall apply:

 

(1)           “Cause” means any of the following:

 

(i)            an officer’s
commission of a material act of fraud with respect to the Company;

 

(ii)           an officer’s
intentional refusal or willful failure to carry out the reasonable instructions
of the Company’s Board of Directors (the “Board”);

 

(iii)         an officer’s conviction
of, or plea of nolo contendere to, at any time, a misdemeanor crime of moral
turpitude or a felony (even if such has occurred prior to employment with the
Company);

 

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(iv)          an officer’s gross
misconduct in connection with the performance of his or her duties; or

 

(v)            an officer’s
material breach of his or her obligations to the Company or any agreement
between the officer and the Company.

 

(2)           “Change in Control” means any of the
following:

 

(i)            the acquisition by
any individual, entity, or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act), other than by the Company or any affiliate
thereof, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the combined voting power
or economic interests of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors;

 

(ii)           a change in the
composition of the Board occurring within a thirty-six month period, as a
result of which fewer than a majority of the directors of the Board are
Incumbent Directors.  The term “Incumbent
Directors” means members of the Board who are (i) members of the Board of
the date hereof, or (ii) elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination;

 

(iii)         a reorganization,
merger, or consolidation, in each case, with respect to which all or substantially
all of the persons that were the respective beneficial owners of the voting
securities of the Company immediately prior to such reorganization, merger, or
consolidation do not, following such reorganization, merger, or consolidation,
beneficially own, directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors of the Company resulting from such reorganization,
merger, or consolidation; or

 

(iv)          the sale or other
disposition of all or substantially all of the assets of the Company in one
transaction or series of related transactions.

 

(v)            notwithstanding
the foregoing, a Change in Control shall not be deemed to occur because a
majority or more of the outstanding voting securities of the Company is
acquired by (A) a trustee or other fiduciary holding securities under one
or more employee benefit plans maintained by the Company or any of its
affiliates, or (B) any person that, immediately prior to such acquisition,
is owned directly or indirectly by the stockholders of the Company in
approximately the same proportion as their ownership of stock in the Company
immediately prior to such acquisition.

 

(3)           “Coverage Period” means the period
commencing two (2) months prior to and ending eighteen (18) months
following a Change in Control.

 

(4)           “Covered Termination” means that the
Eligible Officer is involuntarily terminated without Cause or voluntarily
resigns for Good Reason (as such term defined in each Eligible Officer’s
individual Participation Agreement). 
Notwithstanding the foregoing, a Covered Termination shall not occur
where the Eligible Officer either (i) voluntarily 

 

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terminates employment with the Company or an affiliate
of the Company in order to accept employment with another entity that is wholly
or partly owned (directly or indirectly) by the Company or an affiliate of the
Company, or (ii) is rehired by the Company or an affiliate of the Company
prior to the date benefits under the Plan are scheduled to commence.

 

(5)           “Eligible
Officer” means (i) an officer of the Company or an
affiliate of the Company who has been delivered a Participation Agreement and
thereby notified by the Company in writing that he or she is eligible for
participation in the Plan and (ii) whose employment terminates during the
Coverage Period due to a Covered Termination; or (iii) who is otherwise
selected by the Plan Administrator in its sole discretion to receive Plan benefits
as provided in such officer’s individual Participation Agreement.  The determination of whether an officer is an
Eligible Officer shall be made by the Company, in its discretion, and such
determination shall be binding and conclusive on all persons.

 

(6)           “Payment
Commencement Date” means, with respect to a Covered Termination,
(i) if such Covered Termination occurs prior to the effective date of the
applicable Change in Control, the later of (A) the effective date of such
Change in Control or (B) the effective date of the Release required by Section 2(b) or
(ii) if such Covered Termination occurs on or after the effective date of
the applicable Change in Control, the later of (X) the date of such
Covered Termination or (Y) the effective date of the Release required by Section 2(b).

 

(7)           “Substantial Risk of Forfeiture Lapse Date”
means, with respect to a Covered Termination, (i) if such Covered
Termination occurs prior to the effective date of the applicable Change in
Control, the effective date of such Change in Control, or (ii) if such
Covered Termination occurs on or after the effective date of the applicable
Change in Control, the date of such Covered Termination.

 

Section 3.              AMOUNT OF BENEFIT.

 

(a)           Severance Benefits.  Subject to the exceptions set forth in Section 2(c),
severance benefits under the Plan, if any, shall be provided to Eligible
Officers subject to the conditions and in the amount provided in each Eligible
Officer’s individual Participation Agreement. 
Plan benefits will not affect an Eligible Officer’s rights to payment of
any other compensation from the Company that has been earned by the Eligible
Officer but has not yet been paid at the time of the Covered Termination.

 

(b)           Additional
Benefits.  Notwithstanding the
foregoing, the Company may, in its sole discretion, provide benefits in
addition to those benefits set forth in Section 3(a) to Eligible
Officers and the provision of any such benefits to an Eligible Officer shall in
no way obligate the Company to provide such benefits to any other Eligible
Officer or to any other Company officer, even if similarly situated.

 

(c)           Certain
Reductions.  The Company shall reduce
an Eligible Officer’s severance benefits to be provided under the Plan, in
whole or in part, by any other severance benefits, pay in lieu of notice, or
other similar benefits payable to the Eligible Officer by the Company or an
affiliate that are or become payable in connection with the Eligible Officer’s
termination of employment pursuant to (i) any applicable US or foreign
legal requirement,

 

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including, without limitation, the Worker Adjustment
and Retraining Notification Act, the California Plant Closing Act, or any other
similar state law, (ii) applicable local laws, regulations, collective
bargaining arrangements or customs in the applicable country of residence (for
each Eligible Officer residing outside the United States), (iii) an
individual offer letter, written employment or severance agreement with the
Company, or (iv) any Company policy or practice providing for the Eligible
Officer to remain on the payroll for a limited period of time after being given
notice of the termination of the Eligible Officer’s employment, and the Plan
Administrator shall so construe and implement the terms of the Plan.  In the Company’s discretion, such reductions
may be applied on a retroactive basis, with severance benefits previously paid
being re-characterized as payments pursuant to the Company’s obligation under
the Plan.

 

(d)           Non-Duplication of
Benefits.  No Eligible Officer is
eligible to receive benefits under this Plan more than one time.

 

(e)           Termination of
Benefits.  With respect to each
Eligible Officer, benefits under this Plan shall terminate immediately if such
Eligible Officer, at any time, violates any material proprietary information,
non-disparagement, confidentiality or non-solicitation obligation to the
Company.

 

(f)            Offset for
Indebtedness.  If an Eligible Officer
is indebted to the Company at his or her termination date, the Company reserves
the right to offset any salary severance payment or other payments under the
Plan by the amount of such indebtedness. 
Additionally, if an Eligible Officer is subject to withholding for taxes
related to any non-Plan benefits, the Company may offset any salary severance
payment or other payments under the Plan by the amount of such withholding
taxes.

 

(g)           Section 409A
Compliance.  Notwithstanding anything
to the contrary set forth herein, any Plan benefit amounts that constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code
shall not commence in connection with an Eligible Officer’s termination of
employment unless and until such Eligible Officer also incurred a “separation
from service” within the meaning of Section 409A of the Code, unless the
Company reasonably determines that such amounts may be provided to the Eligible
Officer without causing such officer to incur the additional 20% tax under Section 409A.  Benefits payable under the Plan are intended
to be payable on or before March 15 of the calendar year following the
calendar year including the Substantial Risk of Forfeiture Lapse Date and thus
payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of
the Treasury Regulations or otherwise exempt from application of Section 409A
of the Code.

 

Section 4.              IMPACT ON OTHER EMPLOYEE BENEFITS

 

(a)           Continued Group Health Plan Benefits. 
If the Eligible
Officer was enrolled in a group health plan (e.g.,
medical, dental, or vision plan) sponsored by the Company or an affiliate of
the Company immediately prior to termination, the Eligible Officer may be
eligible to continue coverage under such group health plan (or to convert to an
individual policy), at the time of the Eligible Officer’s termination of
employment, under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”).  The Company will notify the Eligible Officer 

 

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of any such right to
continue such coverage at the time of termination pursuant to COBRA.  No provision of this Plan will affect the
continuation coverage rules under COBRA, except that the Company’s
payment, if any, of applicable insurance premiums, or waiver of any cost of
coverage under any self-funded group health plan, will be credited as payment
by the Eligible Officer for purposes of the Eligible Officer’s payment required
under COBRA.  Therefore, the period
during which an Eligible Officer may elect to continue the Company’s or its affiliate’s
group health plan coverage at his or her own expense under COBRA, the length of
time during which COBRA coverage will be made available to the Eligible
Officer, and all other rights and obligations of the Eligible Officer under
COBRA (except the obligation to pay insurance premiums that the Company pays,
if any, or, with respect to a self-funded plan, any obligation to pay the cost
of coverage to the Company that the Company waives, if any) will be applied in
the same manner that such rules would apply in the absence of this Plan.

 

(b)           Other Employee
Benefits.  All other benefits (such
as life insurance, disability coverage, and 401(k) plan coverage)
terminate as of the Eligible Officer’s termination date (except to the extent
that a conversion privilege may be available thereunder).

 

Section 5.              COMPANY PROPERTY.

 

(a)           Return of Material
Company Property.  Except as provided
in Section 5(b) below, an Eligible Officer will not be entitled to
any severance benefits under the Plan unless and until the Eligible Officer
returns all Company Property to the Company that constitute  material assets of the Company no later than
ten (10) days following his or her Covered Termination.  For this purpose, “Company
Property” means all Company documents (and all copies thereof)
and other Company property which the Eligible Officer had in his or her
possession at any time, including, but not limited to, Company files, notes,
drawings records, plans, forecasts, reports, studies, analyses, proposals,
agreements, financial information, research and development information, sales
and marketing information, operational and personnel information,
specifications, code, software, databases, computer-recorded information,
tangible property and equipment (including, but not limited to, leased
vehicles, computers, facsimile machines, mobile telephones, servers), credit
cards, entry cards, identification badges and keys; and any materials of any
kind which contain or embody any proprietary or confidential information of the
Company (and all reproductions thereof in whole or in part).  As a condition to receiving benefits under
the Plan, Eligible Officers must not make or retain copies, reproductions or
summaries of any such Company property.

 

(b)           Retention of Certain
Company Equipment.  Notwithstanding
the provisions of Section 5(a), the Company and an Eligible Officer may
agree to allow the Eligible Officer to retain certain Company equipment (e.g., laptops, printers, facsimile machines, copiers, etc.) (“Company Equipment”)
for his or her personal use following the Eligible Officer’s termination of
employment.  The Eligible Officer
acknowledges that the Eligible Officer will have imputed income related to the
retention of any Company Equipment.  The
Eligible Officer will follow all Company instructions as to the return and/or
deletion of any Company information contained on the Company Equipment.

 

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Section 6.              TIME OF PAYMENT AND FORM OF
BENEFIT.

 

Unless otherwise provided in the Eligible Officer’s individual
Participation Agreement, all cash severance benefits under the Plan shall be
paid in a single lump sum within ten (10) days following the Payment
Commencement Date.  All payments under
the Plan will be made in local currency and will be subject to applicable
withholding for federal, state and local taxes and, if applicable, foreign
taxes and social security or similar required deductions.

 

Section 7.              REEMPLOYMENT.

 

In the event of an
Eligible Officer’s reemployment by the Company or an affiliate of the Company
during the period of time in respect of which severance benefits pursuant to
Sections 3(a) and 3(b) have been paid, the Company, in its sole and
absolute discretion, may require such Eligible Officer to repay to the Company
all or a portion of such severance benefits as a condition of reemployment,
provided that the Eligible Officer is separately notified in writing of such
repayment requirement prior to reemployment.

 

Section 8.              RIGHT TO INTERPRET
PLAN; AMENDMENT AND TERMINATION.

 

(a)           Plan Administrator
Discretion and Authority.  The Plan
Administrator (as defined in Section 11(a) herein) shall have the
discretion and authority to establish rules, forms, and procedures for the
administration of the Plan and to construe and interpret the Plan and to decide
any and all questions of fact, interpretation, definition, computation or
administration arising in connection with the operation of the Plan, including,
but not limited to, the eligibility to participate in the Plan and amount of
benefits paid under the Plan.  The rules,
interpretations, computations and any other actions or exercise of discretion
under the Plan by the Plan Administrator shall be made in good faith and shall
be binding and conclusive on all persons.

 

(b)           Amendment or
Termination.  Neither the Plan nor
any Participation Agreement distributed to an Eligible Officer may be amended
or terminated prior to July 17, 2010 without the consent of any Eligible
Officer whose rights prior to such amendment or termination would be impaired
by such amendment or termination.  The
Company reserves the right to amend or terminate this Plan (including any
Participation Agreement) or the benefits provided hereunder at any time to be
effective from and after July 17, 2010; provided, however,
that no such amendment or termination shall (i) be effective
unless at least twelve (12) months prior written notice of such amendment has
been provided to such any Eligible Officer whose rights prior to such amendment
would be impaired, or (ii) adversely affect the right to any unpaid
benefit of any Eligible Officer whose termination date has occurred prior to
amendment or termination of the Plan.  In
addition, following a Change in Control, no such amendment or termination may
adversely affect the benefits to which an officer would become entitled under
the Plan as an Eligible Officer upon an involuntary termination of employment
without Cause if the Plan had not been so amended or terminated, without the
consent of such affected officer. Any action amending or terminating the Plan
shall be in writing and approved by the Company’s Compensation Committee.

 

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Section 9.              NO IMPLIED
EMPLOYMENT CONTRACT.

 

The Plan shall not be deemed (i) to give any officer or other
person any right to be retained in the employ of the Company or an affiliate of
the Company, or (ii) to interfere with the right of the Company or an
affiliate of the Company to discharge any officer or other person at any time,
with or without cause, which right is hereby reserved.

 

Section 10.            LEGAL CONSTRUCTION.

 

This Plan is intended to be governed by and shall be construed in
accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent not
preempted by ERISA, the laws of the State of California (without regard to
principles of conflict of laws).

 

Section 11.            CLAIMS, INQUIRIES AND
APPEALS.

 

(a)           Applications for
Benefits and Inquiries.  Any
application for benefits, inquiries about the Plan or inquiries about present
or future rights under the Plan must be submitted to the Plan Administrator in
writing by an applicant (or his or her authorized representative).  The Plan Administrator is:

 

Websense, Inc.

Attn: 
Vice President, Human Resources

10240 Sorrento Valley Road

San Diego, CA 92121

 

(b)           Denial of Claims.  In the event that any application for
benefits is denied in whole or in part, the Plan Administrator must provide the
applicant with written or electronic notice of the denial of the application,
and of the applicant’s right to review the denial.  Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
The notice  of denial will be set
forth in a manner designed to be understood by the applicant and will include
the following:

 

(1)           the specific reason
or reasons for the denial;

 

(2)           references to the
specific Plan provisions upon which the denial is based;

 

(3)           a description of
any additional information or material that the Plan Administrator needs to
complete the review and an explanation of why such information or material is
necessary; and

 

(4)           an explanation of
the Plan’s review procedures and the time limits applicable to such procedures,
including a statement of the applicant’s right to bring a civil action under Section 502(a) of
ERISA following a denial on review of the claim, as described in Section 11(d) below.

 

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This notice of denial will be given to the applicant within ninety (90)
days after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application.  If an extension of time for
processing is required, written notice of the extension will be furnished to
the applicant before the end of the initial ninety (90) day period.

 

This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application.

 

(c)           Request for a Review.  Any person (or that person’s authorized
representative) for whom an application for benefits is denied, in whole or in
part, may appeal the denial by submitting a request for a review to the Plan
Administrator within sixty (60) days after the application is denied.  A request for a review shall be in writing
and shall be addressed to:

 

Websense, Inc.

Attn: 
Vice President, Human Resources

10240 Sorrento Valley Road

San Diego, CA 92121

 

A request for review must set forth all of the grounds on which it is
based, all facts in support of the request and any other matters that the
applicant feels are pertinent.  The
applicant (or his or her representative) shall have the opportunity to submit
(or the Plan Administrator may require the applicant to submit) written
comments, documents, records, and other information relating to his or her
claim.  The applicant (or his or her
representative) shall be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant
to his or her claim.  The review shall
take into account all comments, documents, records and other information
submitted by the applicant (or his or her representative) relating to the
claim, without regard to whether such information was submitted or considered
in the initial benefit determination.

 

(d)           Decision on Review.  The Plan Administrator will act on each
request for review within sixty (60) days after receipt of the request, unless
special circumstances require an extension of time (not to exceed an additional
sixty (60) days), for processing the request for a review.  If an extension for review is required, written
notice of the extension will be furnished to the applicant within the initial
sixty (60) day period.  This notice of
extension will describe the special circumstances necessitating the additional
time and the date by which the Plan Administrator is to render its decision on
the review.  The Plan Administrator will
give prompt, written or electronic notice of its decision to the applicant. Any
electronic notice will comply with the regulations of the U.S. Department of
Labor.  In the event that the Plan Administrator
confirms the denial of the application for benefits in whole or in part, the
notice will set forth, in a manner calculated to be understood by the
applicant, the following:

 

(1)           the specific reason
or reasons for the denial;

 

9

 

(2)           references to the
specific Plan provisions upon which the denial is based;

 

(3)           a statement that
the applicant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information relevant to his or her claim; and

 

(4)           a statement of the
applicant’s right to bring a civil action under Section 502(a) of
ERISA.

 

(e)           Rules and
Procedures.  The Plan Administrator
will establish rules and procedures, consistent with the Plan and with
ERISA, as necessary and appropriate in carrying out its responsibilities in
reviewing benefit claims.  The Plan
Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so
at the applicant’s own expense.

 

(f)            Exhaustion of
Remedies.  No legal action for
benefits under the Plan may be brought until the applicant (i) has
submitted a written application for benefits in accordance with the procedures
described by Section 11(a) above, (ii) has been notified by the
Plan Administrator that the application is denied, (iii) has filed a
written request for a review of the application in accordance with the appeal
procedure described in Section 11(c) above, and (iv) has been
notified that the Plan Administrator has denied the appeal.  Notwithstanding the foregoing, if the Plan
Administrator does not respond to an applicant’s claim or appeal within the
relevant time limits specified in this Section 11, the applicant may bring
legal action for benefits under the Plan pursuant to Section 502(a) of
ERISA.

 

Section 12.            BASIS OF PAYMENTS TO
AND FROM PLAN.

 

The Plan shall be unfunded, and all cash payments under the Plan shall
be paid only from the general assets of the Company.  An Eligible Officer’s right to receive
payments under the Plan is no greater than that of the Company’s unsecured
general creditors.  Therefore, if the
Company were to become insolvent, the Eligible Officer might not receive
benefits under the Plan.

 

Section 13.            OTHER PLAN INFORMATION.

 

(a)           Employer and Plan
Identification Numbers. The Employer Identification Number assigned to the
Company (which is the “Plan Sponsor”
as that term is used in ERISA) by the Internal Revenue Service is
51-0380839.  The Plan Number assigned to
the Plan by the Plan Sponsor pursuant to the instructions of the Internal
Revenue Service is  510.

 

(b)           Ending Date for Plan’s
Fiscal Year and Type of Plan.  The
date of the end of the fiscal year for the purpose of maintaining the Plan’s
records is December 31.  The Plan is
a welfare benefit plan.

 

(c)           Agent for the Service
of Legal Process.  The agent for the
service of legal process with respect to the Plan is:

 

10

 

Websense, Inc.

Attn: 
General Counsel

10240 Sorrento Valley Road

San Diego, CA 92121

 

(d)           Plan Sponsor and
Administrator.  The Plan Sponsor and
the “Plan Administrator” of the Plan is:

 

Websense, Inc.

Attn: 
Vice President, Human Resources

10240 Sorrento Valley Road

San Diego, CA 92121

 

The Plan Sponsor’s and
Plan Administrator’s telephone number is 858-320-8000.  The Plan Administrator is the named fiduciary
charged with the responsibility for administering the Plan.

 

Section 14.            STATEMENT OF ERISA
RIGHTS.

 

Participants in this Plan are entitled to certain rights and
protections under ERISA.  If you are an
Eligible Officer, you are considered a participant in the Plan and, under
ERISA, you are entitled to:

 

(a)           Receive Information
About Your Plan and Benefits

 

(1)           Examine, without
charge, at the Plan Administrator’s office and at other specified locations,
such as worksites, all documents governing the Plan and a copy of the latest
annual report (Form 5500 Series), if applicable, filed by the Plan with
the U.S. Department of Labor and available at the Public Disclosure Room of
the Employee Benefits Security Administration;

 

(2)           Obtain, upon
written request to the Plan Administrator, copies of documents governing the
operation of the Plan and copies of the latest annual report (Form 5500
Series), if applicable, and an updated (as necessary) Summary Plan
Description.  The Administrator may make
a reasonable charge for the copies; and

 

(3)           Receive a summary
of the Plan’s annual financial report, if applicable.  The Plan Administrator is required by law to
furnish each participant with a copy of this summary annual report.

 

(b)           Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Plan
participants, ERISA imposes duties upon the people who are responsible for the
operation of the employee benefit plan. 
The people who operate the Plan, called “fiduciaries” of the Plan, have
a duty to do so prudently and in the interest of you and other Plan
participants and beneficiaries.  No one,
including your employer, your union or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
Plan benefit or exercising your rights under ERISA.

 

11

 

(c)           Enforce Your Rights.  If
your claim for a Plan benefit is denied or ignored, in whole or in part, you
have a right to know why this was done, to obtain copies of documents relating
to the decision without charge, and to appeal any denial, all within certain
time schedules as set forth in detail in Section 11 herein.

 

Under ERISA, there are steps you can take to enforce the above
rights.  For instance, if you request a
copy of Plan documents or the latest annual report from the Plan, if
applicable, and do not receive them within 30 days, you may file suit in a
Federal court and you are not required to follow the claims procedure set forth
in Section 11 herein.  In such a
case, the court may require the Plan Administrator to provide the materials and
pay you up to $110 a day until you receive the materials, unless the materials
were not sent because of reasons beyond the control of the Plan Administrator.

 

If you have completed the claims and appeals procedure described in Section 11
and have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or Federal court.

 

If you are discriminated against for asserting your rights, you may
seek assistance from the U.S. Department of Labor, or you may file suit in a
Federal court.  The court will decide who
should pay court costs and legal fees. 
If you are successful, the court may order the person you have sued to
pay these costs and fees.  If you lose,
the court may order you to pay these costs and fees, for example, if it finds
your claim is frivolous.

 

(d)           Assistance with Your Questions.  If
you have any questions about the Plan, you should contact the Plan
Administrator.  If you have any questions
about this statement or about your rights under ERISA, or if you need
assistance in obtaining documents from the Plan Administrator, you should
contact the nearest office of the Employee Benefits Security Administration,
U.S. Department of Labor, listed in your telephone directory or the Division of
Technical Assistance and Inquiries, Employee Benefits Security Administration,
U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C.
20210.  You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration or
accessing its website at http://www.dol.gov/ebsa/.

 

Section 15.            GENERAL PROVISIONS.

 

(a)           Notices.  Any notice, demand or request required or
permitted to be given by either the Company or an Eligible Officer pursuant to
the terms of this Plan shall be in writing and shall be deemed given when
delivered personally or deposited in the U.S. mail, First Class with
postage prepaid, and addressed to the parties, in the case of the Company, at
the address set forth in Section 13(d) and, in the case of an
Eligible Officer, at the address as set forth in the Company’s employment file
maintained for the Eligible Officer as previously furnished by the Eligible
Officer or such other address as a party may request by notifying the other in
writing.

 

(b)           Transfer and
Assignment.  The rights and
obligations of an Eligible Officer under this Plan may not be transferred or
assigned without the prior written consent of the Company.  This Plan shall be binding upon any surviving
entity resulting from a Change in 

 

12

 

Control and upon any other person who is a successor
by merger, acquisition, consolidation or otherwise to the business formerly
carried on by the Company without regard to whether or not such person or
entity actively assumes the obligations hereunder.

 

(c)           Waiver.  Any party’s failure to enforce any provision
or provisions of this Plan shall not in any way be construed as a waiver of any
such provision or provisions, nor prevent any party from thereafter enforcing
each and every other provision of this Plan. 
The rights granted the parties herein are cumulative and shall not
constitute a waiver of any party’s right to assert all other legal remedies
available to it under the circumstances.

 

(d)           Severability.  Should any provision of this Plan be declared
or determined to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired.

 

(e)           Section Headings.  Section headings in this Plan are
included for convenience of reference only and shall not be considered part of
this Plan for any other purpose.

 

Section 16.            EXECUTION.

 

To record the adoption of the Plan as set forth herein, effective as of  July 17, 2008,
Websense, Inc.  has caused its
duly authorized officer to execute the same this
         day of July, 2008.

 

	
   

  	
  WEBSENSE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

13

 

For Employees Age 40 or Older

Individual Termination

 

EXHIBIT A

 

RELEASE
AGREEMENT

 

I understand and agree completely to the
terms set forth in the Websense, Inc. Change in Control Severance Benefit
Plan (the “Plan”) and my Participation Agreement.

 

I understand that this Release, together with
the Plan and my Participation Agreement, constitutes the complete, final and
exclusive embodiment of the entire agreement between the Company, affiliates of
the Company and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company or an affiliate of the Company  that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under my
proprietary information and inventions agreement with the Company and/or an
affiliate of the Company.

 

Except as otherwise set forth in this
Release, I hereby generally and completely release the Company and its
affiliates, and their parents, subsidiaries, successors, predecessors and affiliates,
and their partners, members, directors, officers, employees, stockholders,
shareholders, agents, attorneys, predecessors, insurers, affiliates and
assigns, from any and all claims, liabilities and obligations, both known and
unknown, that arise out of or are in any way related to events, acts, conduct,
or omissions occurring at any time prior to and including the date I sign this
Release.  This general release includes,
but is not limited to: (a) all claims arising out of or in any way related
to my employment with the Company and its affiliates, or their affiliates, or
the termination of that employment; (b) all claims related to my
compensation or benefits, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options,
or any other ownership interests in the Company and its affiliates, or their
affiliates; (c) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended).

 

Notwithstanding the foregoing, I understand
that the following rights or claims are not included in my Release: (a) any
rights or claims for indemnification I may have pursuant to any written
indemnification agreement with the Company or its affiliate to which I am a
party; the charter, bylaws, or operating agreements of the Company or its
affiliate; or under applicable law; or (b) any rights which cannot be
waived as a matter of law.  In addition,
I understand that nothing in this Agreement prevents me from filing,
cooperating with, or participating in any proceeding before the Equal
Employment Opportunity Commission, the Department of Labor, or the California
Department of Fair Employment and Housing, except that I hereby waive my right 

 

1

 

to any monetary benefits in connection with any such claim, charge or
proceeding.  I hereby represent and warrant
that, other than the claims identified in this paragraph, I am not aware of any
claims I have or might have that are not included in the Release.

 

I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the ADEA, and
that the consideration given under the Plan for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was
already entitled.  I further acknowledge
that I have been advised by this writing, as required by the ADEA, that: 
(a) my waiver and release do not apply to any rights
or claims that may arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not do so); (c) I
have twenty-one (21) days to consider this Release (although I may choose
voluntarily to sign this Release earlier); (d) I have seven (7) days
following the date I sign this Release to revoke the Release by providing
written notice to an officer of the Company; and (e) this Release shall not be
effective until the date upon which the revocation period has expired, which
shall be the eighth day after I sign this Release.

 

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her settlement
with the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

I hereby represent that I have been paid all
compensation owed and for all hours worked; I have received all the leave and
leave benefits and protections for which I am eligible pursuant to the Family
and Medical Leave Act, the California Family Rights Act, or otherwise; and I
have not suffered any on-the-job injury for which I have not already filed a
workers’ compensation claim.

 

I acknowledge that to become effective, I
must sign and return this Release to the Company so that it is received not
later than twenty-one (21) days following the date it is provided to me.

 

 

	
   

  	
  ELIGIBLE OFFICER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

2

 

For Employees Age 40 or Older

 Group Termination

 

EXHIBIT B

 

RELEASE
AGREEMENT

 

I understand and agree completely to the
terms set forth in the Websense, Inc. Change in Control Severance Benefit
Plan (the “Plan”) and my Participation Agreement.

 

I understand that this Release, together with
the Plan and my Participation Agreement, constitutes the complete, final and
exclusive embodiment of the entire agreement between the Company, affiliates of
the Company and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company or an affiliate of the Company  that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under my
proprietary information and inventions agreement with the Company and/or an
affiliate of the Company.

 

Except as otherwise set forth in this
Release, I hereby generally and completely release the Company and its
affiliates, and their parents, subsidiaries, successors, predecessors and
affiliates, and its and their partners, members, directors, officers,
employees, stockholders, shareholders, agents, attorneys, predecessors,
insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring at any time prior to
and including the date I sign this Release. 
This general release includes, but is not limited to: (a) all
claims arising out of or in any way related to my employment with the Company
and its affiliates, or their affiliates, or the termination of that employment;
(b) all claims related to my compensation or benefits, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership interests in the
Company and its affiliates, or their affiliates; (c) all claims for breach
of contract, wrongful termination, and breach of the implied covenant of good
faith and fair dealing; (d) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy;
and (e) all federal, state, and local statutory claims, including claims
for discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Age
Discrimination in Employment Act (as amended) (“ADEA”),
the federal Employee Retirement Income Security Act of 1974 (as amended), and
the California Fair Employment and Housing Act (as amended).

 

Notwithstanding the foregoing, I understand
that the following rights or claims are not included in my Release: (a) any
rights or claims for indemnification I may have pursuant to any written
indemnification agreement with the Company or its affiliate to which I am a
party; the charter, bylaws, or operating agreements of the Company or its
affiliate; or under applicable law; or (b) any rights which cannot be
waived as a matter of law.  In addition,
I understand that nothing in this Agreement prevents me from filing,
cooperating with, or participating in any proceeding before the Equal
Employment Opportunity Commission, the Department of Labor, or the California
Department of Fair Employment and Housing, except that I hereby waive my right 

 

1

 

to any monetary benefits in connection with any such claim, charge or
proceeding.  I hereby represent and
warrant that, other than the claims identified in this paragraph, I am not
aware of any claims I have or might have that are not included in the Release.

 

I acknowledge that I am knowingly and
voluntarily waiving and releasing any rights I may have under the ADEA, and
that the consideration given under the Plan for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was
already entitled.  I further acknowledge
that I have been advised by this writing, as required by the ADEA, that: 
(a) my waiver and release do not apply to any rights
or claims that may arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I
have forty-five (45) days to consider this Release (although I may choose
voluntarily to sign this Release earlier); (d) I have seven (7) days
following the date I sign this Release to revoke the Release by providing
written notice to an office of the Company; (e) this Release shall not be
effective until the date upon which the revocation period has expired, which
shall be the eighth day after I sign this Release; and (f) I have received
with this Release a detailed list of the job titles and ages of all employees
who were terminated in this group termination and the ages of all employees of
the Company in the same job classification or organizational unit who were not
terminated.

 

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or her
settlement with the debtor.” 
I hereby expressly waive and relinquish all rights and benefits under
that section and any law of any jurisdiction of similar effect with respect to
my release of any claims hereunder.

 

I hereby represent that I have been paid all
compensation owed and for all hours worked; I have received all the leave and
leave benefits and protections for which I am eligible pursuant to the Family
and Medical Leave Act, the California Family Rights Act, or otherwise; and I
have not suffered any on-the-job injury for which I have not already filed a
workers’ compensation claim.

 

I acknowledge that to become effective, I
must sign and return this Release to the Company so that it is received not
later than forty-five (45) days following the date it is provided to me.

 

 

	
   

  	
  ELIGIBLE OFFICER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

2

 

EXHIBIT C

 

RELEASE
AGREEMENT

 

I understand and agree completely to the
terms set forth in the Websense, Inc. Change in Control Severance Benefit
Plan (the “Plan”) and my Participation Agreement.

 

I understand that this Release, together with
the Plan and my Participation Agreement, constitutes the complete, final and
exclusive embodiment of the entire agreement between the Company, affiliates of
the Company and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company or an affiliate of the Company  that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under my
proprietary information and inventions agreement with the Company and/or an
affiliate of the Company.

 

Except as otherwise set forth in this
Release, I hereby generally and completely release the Company and its
affiliates, and their parents, subsidiaries, successors, predecessors and
affiliates, and its and their partners, members, directors, officers,
employees, stockholders, shareholders, agents, attorneys, predecessors,
insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring at any time prior to
and including the date I sign this Release. 
This general release includes, but is not limited to: (a) all
claims arising out of or in any way related to my employment with the Company
and its affiliates, or their affiliates, or the termination of that employment;
(b) all claims related to my compensation or benefits, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay,
fringe benefits, stock, stock options, or any other ownership interests in the
Company and its affiliates, or their affiliates; (c) all claims for breach
of contract, wrongful termination, and breach of the implied covenant of good faith
and fair dealing; (d) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy;
and (e) all federal, state, and local statutory claims, including claims
for discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 (as amended), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended).

 

Notwithstanding the foregoing, I understand
that the following rights or claims are not included in my Release: (a) any
rights or claims for indemnification I may have pursuant to any written indemnification
agreement with the Company or its affiliate to which I am a party; the charter,
bylaws, or operating agreements of the Company or its affiliate; or under
applicable law; or (b) any rights which cannot be waived as a matter of
law.  In addition, I understand that
nothing in this Agreement prevents me from filing, cooperating with, or
participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, or the California Department of Fair
Employment and Housing, except that I hereby waive my right to any monetary
benefits in connection with any such claim, charge or proceeding.  I hereby 

 

1

 

represent and warrant that, other than the claims identified in this
paragraph, I am not aware of any claims I have or might have that are not
included in the Release.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with
the debtor.”  I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of any
claims hereunder.

 

I hereby represent that I have been paid all compensation owed and for
all hours worked; I have received all the leave and leave benefits and
protections for which I am eligible pursuant to the Family and Medical Leave
Act, the California Family Rights Act, or otherwise; and I have not suffered
any on-the-job injury for which I have not already filed a workers’ compensation
claim.

 

I acknowledge that to become effective, I
must sign and return this Release to the Company so that it is received not
later than fourteen (14) days following the date it is provided to me.

 

 

	
   

  	
  ELIGIBLE OFFICER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
				

 

2Exhibit 10.2

 

[TIER 1 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: (i) twenty-four (24) months of Base Salary,
plus (ii) your Additional Severance Amount (together the “Cash Severance Benefit”) 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

 

(1) year following
the effective date of Covered Termination, or (B) the original maximum
term 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.

 

(c)           Payment of Continued
Group Health Plan Benefits.  If you
timely elect continued group health plan continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
the Company shall pay the full amount of your COBRA premiums, or shall provide
coverage under any self-funded plan, on behalf of you for your continued
coverage under the Company’s group health plans, including coverage for your
eligible dependents, for eighteen (18) months following your Covered
Termination; provided, however, that no such
premium payments shall be made, and no coverage shall be provided without cost
to you under any self-funded group health plan, following the expiration of
your continued coverage under COBRA or the date that you become eligible to
elect coverage under a group health plan of a subsequent employer.  You will be required to notify the Company
immediately if you become eligible to be covered by a group health plan of a
subsequent employer.  Upon the conclusion
of such period of insurance premium payments made by the Company, or the
provision of coverage under a self-funded group health plan, you will be
responsible for the entire payment of premiums (or payment for the cost of
coverage) required under COBRA for the duration of your eligible COBRA coverage
period.  For purposes of this Section 1(c),
(i) references to COBRA shall be deemed to refer also to analogous
provisions of state law and (ii) any applicable insurance premiums that
are paid by the Company shall not include any amounts payable by you under an
Internal Revenue Code Section 125 health care reimbursement plan, which
amounts, if any, are your sole responsibility.

 

Section 2.              CASH SEVERANCE
BENEFIT FOR COVERED TERMINATIONS OUTSIDE THE COVERAGE PERIOD.

 

Subject to the exceptions
set forth in Section 2(c) of the Plan, if you meet all the requirements set
forth in Sections 2(b) and 5 of the Plan, including, without limitation,
executing the applicable required Release within forty-five (45) days following
your termination, and provided that such Release becomes effective in
accordance with its terms, you will receive the severance benefits set forth in
this Section 2.  If your employment
terminates due to a Covered Termination that does not occur during the Coverage
Period, you will be entitled to receive a single lump sum cash payment equal to
six (6) months of your Base Salary.  
Such payment shall be made to you within ten (10) days of the
effective date of the Release.   In the
event that within the two month period following your Covered Termination there
is a Change in Control, such that your Covered Termination occurred during the
Coverage Period, then you will be entitled to 

 

2

 

receive benefits under Section 1 of this
Agreement, which will be offset by any payments that you may have previously
received under this Section 2.

 

Section 3.              4999 GROSS-UP
PAYMENTS.   [INCLUDE THIS SECTION FOR
U.S. RESIDENTS ONLY]

 

(a)           Subject to the
limitations of Section 3(b) below, if any payment, distribution or
benefit you would receive from the Company or otherwise, but determined without
regard to any additional payment required under this Section 3, pursuant
to a Change in Control (each a “Payment” and
collectively the “Payments”), would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”),
and (ii) be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties payable with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”),
then you shall be entitled to receive from the Company (or have the Company pay
on your behalf) an additional payment (the “Gross-Up Payment”)
in an amount that shall fund your payment of any Excise Tax on the Payments as
well as all income and employment taxes imposed on the Gross-Up Payment, any
Excise Tax imposed on the Gross-Up Payment and any interest or penalties
imposed with respect to income and employment taxes imposed on the Gross-Up
Payment.

 

(b)           The Company shall
make no Gross-Up Payment if the Payments do not exceed 110% of the Safe Harbor
Amount, as defined below, and instead the Payments due and made under the Plan
shall be reduced so that the Payments, in the aggregate, equal the Safe Harbor
Amount. Safe Harbor Amount” means 2.99 times your “base amount,” within the
meaning of Section 280G(b)(3) of the Code, so that no amount of the
Payments is subject to the Excise Tax. 
The reduction of the Payments due and made hereunder, if applicable,
shall be made by first reducing the severance benefits provided under Section 1(a),
1(c), and 1(b) of this Agreement, in that order, unless an alternative
method of reduction is elected by you prior to a Change in Control, and subject
to approval by the Company.  “In the
event that acceleration of vesting of stock award compensation is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order
of the date of grant of your stock awards unless you elect in writing a
different order for cancellation. 
Notwithstanding anything to the contrary set forth herein, you may not
elect the order in which the reduction in your payments or benefits will occur
if such election would cause any such amounts to constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code such
that you would incur the additional 20% tax under Section 409A of the Code.

 

(c)           The accounting firm
engaged by the Company for general audit purposes as of the day prior to the
effective date of the Change in Control shall perform the foregoing
calculations.  If the accounting firm so
engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a
nationally recognized accounting firm to make the determinations required
hereunder.  The Company shall bear all
expenses with respect to the determinations by such accounting firm required to
be made hereunder.

 

(d)           The accounting firm
engaged to make the determinations hereunder shall provide its calculations,
together with detailed supporting documentation, to the Company and 

 

3

 

you within fifteen (15)
calendar days after the date on which your right to a Payment is triggered (if
requested at that time by you or the Company) or such other time as requested
by you or the Company.  If the accounting
firm determines that no Excise Tax is payable with respect to a Payment, it
shall furnish you and the Company with an opinion reasonably acceptable to you
that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon you
and the Company.

 

Section 4.              DEFINITIONS.

 

(a)           “Additional Severance Amount” shall
mean the greatest of the following amounts: (A) the average of your last
three annual bonuses paid prior to your Covered Termination; (B) your last
annual bonus paid prior to your Covered Termination; (C) the average of
your last three annual bonuses paid prior to the effective date of the Change
in Control; (D) your last annual bonus paid prior to the effective date of
the Change in Control, and (E) your last target bonus in effect prior to
your Covered Termination.  For such
purposes, your “annual bonus” means the aggregate bonus paid or payable with
respect to the applicable fiscal year of the Company, or any portion of such
fiscal year.

 

(b)           “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).

 

(c)           “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) any material reduction in your
duties[, authority and/or responsibilities][include bracketed terms only for
CEO, President, CFO and General Counsel]; (iii) 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; (iv) 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.

 

4

 

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 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.

 

(d)           “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 5.              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, including,
without limitation, a Gross-Up Payment calculated with respect to the more
favorable cash severance benefit as if those payments were made under this 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 6.              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.

 

5

 

Section 7.              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.

 

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

  

 

6

 

EXHIBIT A

 

WEBSENSE,
INC. OFFICER CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

 

7

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