8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 12, 2007

WEBSENSE, INC.
(Exact name of registrant as specified in its charter)

DELAWARE	000-30093	#51-0380839
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification Number)

10240 Sorrento Valley Road, San Diego, CA	92121
(Address of Principal Executive Offices)	(Zip Code)

(858) 320-8000

Registrant’s Telephone Number, Including Area Code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On August 15, 2007, Websense, Inc. (“Websense” or the “Company”) issued the press release attached hereto as Exhibit 99.1 announcing that, on August 12, 2007, the Company entered into an employment agreement with Dudley Mendenhall (the “Agreement”).  Pursuant to the Agreement, Mr. Mendenhall will serve as Senior Vice President, Chief Financial Officer of Websense, with employment commencing on a full-time basis on August 31, 2007, and continuing at will until either party gives notice of termination.

Under the Agreement, Mr. Mendenhall will receive a base salary at an annual rate of $325,000.  Mr. Mendenhall will be eligible to receive discretionary mid-year and annual performance bonuses (“Bonus”) with total target bonuses of 50% of his annual base salary, based upon the Company achieving a combination of objective performance goals, including billings and/or operating profit objectives, along with any individual performance goals established by the Compensation Committee of the Company’s Board of Directors.  The terms and conditions for payment of the Bonus are the same as the terms and conditions of the CFO bonus described in the Company’s proxy statement for the annual meeting of stockholders in 2007, except that 50% of Mr. Mendenhall’s prorated 2007 salary is guaranteed as a bonus for 2007.

On August 31, 2007, the last business day of the month upon which Mr. Mendenhall commences employment with the Company (the “Grant Date”), Mr. Mendenhall will be granted a non-qualified stock option to purchase 200,000 shares of the Company’s common stock pursuant to the Company’s 2000 Amended and Restated Stock Incentive Plan (the “Stock Plan”) with an exercise price per share equal to the fair market value (closing Nasdaq market price) of the Company’s common stock on the Grant Date (the “Options”).  The Options have a term of seven years, with the shares vesting as follows:  25% of the total shares vest on the one-year anniversary of the Grant Date, and 1/48th of the total shares will vest monthly thereafter until fully vested.  In the event of a corporate transaction, all unvested shares subject to the Options will be fully accelerated to the extent such Options are not assumed or replaced with a cash incentive award preserving the spread at the time of the corporate transaction. Furthermore, if Mr. Mendenhall is terminated by the successor company, or, under certain circumstances, voluntarily terminates employment with the successor company within eighteen (18) months of the corporate transaction or other change in control of the Company, the shares subject to the assumed or replaced Options will be fully accelerated.  Corporate transaction and change in control are defined in the Stock Plan.

Mr. Mendenhall is eligible to participate in the Company’s standard benefit plans for executives, which include life, long-term disability, dental, vision and medical insurance and an optional 401(k) savings plan, Employee Stock Purchase Plan, cafeteria (flex 125) plan, health club discount membership, and Employee Assistance Plan.

Pursuant to the Agreement, if Websense terminates Mr. Mendenhall’s employment without cause (a “Termination Event”), Mr. Mendenhall is entitled to a separation payment in the form of six months of his annual base salary in effect as of the date of such termination paid in six (6) equal monthly installments, less standard deductions and withholdings.  The above severance benefit is contingent upon Mr. Mendenhall providing the Company with a fully-effective waiver and release of claims in a form satisfactory to the Company and his compliance with the Company’s standard non-competition and non-solicitation requirements.   Cause is defined in the Agreement.

The foregoing is a summary description of the terms and conditions of the Agreement and is qualified in its entirety by the text of the Agreement, a copy of which is filed with the Securities and Exchange Commission as Exhibit 99.2 hereto.

Item 5.02.  Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

(b)           On August 12, 2007, in order to hire Dudley Mendenhall as the Company’s Chief Financial Officer, Douglas C. Wride resigned from his position as the Company’s Chief Financial Officer, effective as of August 31, 2007.  Mr. Wride will remain President of the Company.

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(c)           Please see 1.01 above.

On August 15, 2007, Websense announced that Dudley Mendenhall, age 52, has been appointed as the Company’s Senior Vice President, Chief Financial Officer, effective as of August 31, 2007.  From April 2003 until he joined Websense, Mr. Mendenhall had been employed at K2 Inc., a premier, branded consumer products company, where he held the position of Senior Vice President and Chief Financial Officer. Prior to joining K2, from March 2001 through April 2003, he was Managing Director of the west coast Corporate Finance Group of Ernst & Young, an international accounting and consulting firm. The Company is not aware of any transaction requiring disclosure under Item 404(a) of Regulation S-K.

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Item 9.01.  Financial Statements and Exhibits.

(a)           Not applicable.

(b)           Not applicable.

(c)           Not applicable.

(d)           Exhibits.

Number	Description
99.1	Press release issued by Websense, Inc. on August 15, 2007.
99.2	Employment agreement, dated August 12, 2007, between Websense, Inc. and Dudley Mendenhall.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	WEBSENSE, INC.
Date: August 15, 2007	/s/ Douglas C. Wride
	Douglas C. Wride
	President

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INDEX TO EXHIBITS

Number	Description
99.1	Press release issued by Websense, Inc. on August 15, 2007.
99.2	Employment agreement, dated August 12, 2007, between Websense, Inc. and Dudley Mendenhall.

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EX-99.1

Exhibit 99.1

MEDIA CONTACT:	INVESTOR CONTACT:
Cas Purdy	Kate Patterson
Websense, Inc.	Websense, Inc.
+1 858 320 9493	+1 858 320 8072
cpurdy@websense.com	kpatterson@websense.com

N E W S   R E L E A S E

Websense Names New Chief Financial Officer

Former K2, Inc. Executive Dudley Mendenhall Joins Websense Executive Team

SAN DIEGO, August 15, 2007 — Websense, Inc. (NASDAQ:WBSN) today named Dudley W. Mendenhall chief financial officer (CFO), effective on August 31, 2007. He will be responsible for all aspects of global finance and accounting. 

Mendenhall succeeds Doug Wride who was named president in April 2007. In his role as president, Wride remains responsible for the successful integration of SurfControl operations and the achievement of cost and revenue synergies.

“Dudley brings the expertise and track record of a successful CFO with a billion dollar public company,” said Websense CEO Gene Hodges. “His experience with integrating complex international acquisitions, navigating financial markets, and managing global operations will be invaluable to Websense as we complete our acquisition of SurfControl and execute strategic growth initiatives across our business.  His skills and experience will be an important addition to the Websense leadership team.”

 “I’m very excited to join Websense,” said Mendenhall.  “With its proprietary threat research technology, large customer base and focused strategy, the company is uniquely positioned to lead in several emerging security market segments. Websense has tremendous opportunity ahead of it, and I am looking forward to working with the management team to help the company realize its full potential.”

Mendenhall brings 30 of years experience in financial and operations management in a variety of high growth, rapidly evolving industries.  Most recently, Mendenhall served as senior vice president and CFO of K2, Inc. (NYSE: KTO), the largest diversified sporting goods manufacturer in the U.S. with more than 35 leading brands.  Mendenhall was appointed chief financial officer for K2, Inc. in September 2004.  He joined K2, Inc. in April 2003 as senior vice president of finance with overall responsibility for corporate finance activities including mergers and acquisition, raising capital and investor relations.

Prior to joining K2, Inc. Mendenhall had more than 22 years experience in corporate finance and investment banking roles at Banc of America Securities, Chase Manhattan Bank and Ernst and Young

Corporate Finance LLC.  Mendenhall received his bachelor’s degree in economics from the Colorado College in 1977.

About Websense, Inc.

Websense, Inc. (NASDAQ: WBSN), protects more than 25 million employees from external and internal computer security threats. Using a combination of preemptive ThreatSeeker™ malicious content identification and categorization technology and information leak prevention technology, Websense helps make computing safe and productive. Distributed through its global network of channel partners, Websense software helps organizations block malicious code, prevent the loss of confidential information and manage Internet and wireless access. For more information, visit www.websense.com.

# # #

Websense and Websense Enterprise are registered trademarks of Websense, Inc. in the United States and certain international markets. Websense has numerous other unregistered trademarks in the United States and internationally. All other trademarks are the property of their respective owners.

This press release contains forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause Websense’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “planned,” “expects,” “believes,” “strategy,” “opportunity,” “anticipates,” “guidance” and similar words. These statements may include, among others, plans, strategies and objectives of management for future operations; any statements regarding new products, services or developments; any statements regarding future economic conditions or financial or operating performance, including estimates of billings and revenue and other guidance; statements of belief and any statements of assumptions underlying any of the foregoing. The potential risks and uncertainties which contribute to the uncertain nature of these statements include, among others, customer acceptance of the company’s services, products and fee structures; the success of Websense’s brand development efforts; the volatile and competitive nature of the Internet industry; changes in domestic and international market conditions and the entry into and development of international markets for the company’s products; risks relating to intellectual property ownership; changes in estimated amounts based on the review and audit of Websense’s financial statements by its independent auditors; and the other risks and uncertainties described in Websense’s public filings with the Securities and Exchange Commission, available at http://www.sec.gov. Websense assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.

EX-99.2

Exhibit 99.2

August 10, 2007

Mr. Dudley Mendenhall

Dear Mr. Mendenhall:

We are pleased to offer you a position with Websense, Inc. This letter summarizes the offer’s terms and conditions.  This offer is contigent upon the successful completion of a background check.

Websense agrees to employ you in the position of Senior Vice President, Chief Financial Officer, beginning August 31, 2007.  Your beginning salary while employed by Websense will be $12,500.00 biweekly. An additional 50% of your base compensation may be earned as part of a mid-year and year-end bonus, based upon the completion of our corporate and your personal objectives.  For 2007, your bonus is guaranteed, on a pro-rata basis.  Your job is exempt, which means you are not subject to the minimum wage and overtime provisions of the Federal Fair Labor Standards Act (FLSA).

In addition to your cash compensation, you will also receive a non-qualified stock option to purchase 200,000 shares of Websense common stock, subject to the approval of the Board of Directors of Websense, Inc.  One quarter of your option will cliff vest one year after the grant date, with the remaining options vesting monthly for the remaining three years.  Your grant date will be the last business day of the calendar month in which your employment begins, and your option exercise price will be the closing price of Websense’s common stock on that date.

In the event the Company terminates your employment other than for Cause as defined below, you will receive severance pay in the form of six months of base salary paid in six equal monthly installments, less standard deductions and withholdings.  The severance benefits are contingent upon you providing the Company with a fully-effective waiver and release of claims in a form satisfactory to the Company and your compliance with the Company’s standard non-competition and non-solicitation requirements.

“Cause” for termination shall mean a termination of your employment by the Company based upon a good faith determination by the Company that one or more of the following has occurred: (a) your commission of a material act of fraud with respect to the Company, (b) your intentional refusal or willful failure to carry out the reasonable instructions of the Company, (c) your 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 your employment with the Company), (d) your gross misconduct in connection with the performance of your duties, or (e) your material breach of your obligations to the Company or any agreement between you and the Company.

If the Company determines that any cash severance payment benefit payable to you fails to satisfy the distribution requirement of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), as a result of Section 409A(a)(2)(B)(i) of the Code, then the

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payment schedule will be modified as follows:  If acceleration of the benefit will avoid application of Section 409(a)(1) of the Code, then the Company will accelerate the payment of the benefit to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409A(a)(1) of the Code.  If acceleration of the benefit would not avoid the application of Section 409A(a)(1) of the Code, however, then the Company will delay the benefit to the minimum extent necessary so that the benefit is not subject to the provisions of Section 409A(a)(1) of the Code.  If any payments are delayed as a result of the previous sentence, all such delayed payments shall become payable in a lump sum on the first day they can be paid following the termination date.  Thereafter, payments will resume in accordance with the payment schedule set forth in this letter.  The Company may attach conditions to or adjust the severance amounts paid to preserve, as closely as possible, the economic consequences that would have applied in the absence of these requirements; provided, however, that no such condition or adjustment shall result in the payments being subject to Section 409A(a)(1) of the Code.

Included in your compensation is a comprehensive benefits package: life, long-term disability, dental, vision, medical insurance, an optional 401(k) savings plan, Employee Stock Purchase Plan (ESPP) cafeteria (flex 125) plan, health club discount membership, and Employee Assistance Plan.  Websense, Inc. pays 90% of your health and dental premiums and 70% of the premiums for your dependents.  You are eligible to participate in the Websense insurance plans the first day of the month following your date of hire. In addition, you will receive fifteen days of accrued paid vacation per twelve month period, ten days of holiday pay and five days of sick leave per year.

As an employee of Websense, Inc., you will be required to comply with all company policies and procedures.  In particular, you will be required to familiarize yourself with and to comply with Websense, Inc.’s policy prohibiting unlawful harassment and discrimination and the policy concerning drugs and alcohol.  Violations of these policies may lead to immediate termination of employment.  All employees are required to sign a proprietary invention agreement as a condition of employment.  In addition, and in accordance with the Federal Immigration Reform Act of 1986, our offer is contingent upon your being able to furnish, on the first day you report to work, documents which verify both your identity and eligibility for employment in the United States.

Websense reserves the right to change or eliminate any or all of its benefits at any time.  Websense is an “at will” employer.  This means that you may terminate your employment at Websense at any time for any reason whatsoever, simply by notifying Human Resources.  Likewise, Websense may terminate your employment at any time for any reason whatsoever, with or without cause or advance notice.  This at will employment relationship cannot be changed except in writing signed by the Chief Executive Officer of Websense.  The employment terms in this letter supersede any other agreements or promises made to you by anyone, whether oral or written.

If this letter accurately reflects your understanding of this employment relationship, please sign below to indicate your acceptance, and return it to me no later than August 30, 2007.  If you would like to fax this letter back to me, please fax it to my confidential fax number:

(xxx) xxx-xxxx.  We look forward to having you join our team!

Sincerely,
/s/ Douglas C. Wride
Douglas C. Wride
President and CFO
Websense, Inc.
Accepted By:
/s/ Dudley Mendenhall	8/12/07
Dudley Mendenhall	Date