DEFERRED COMPENSATION PLAN

WHEREAS, the Company has established this Deferred Compensation Plan for a select group of management or highly compensated employees; and

WHEREAS, this Deferred Compensation Plan, as amended and restated, is intended to comply with Section 409A of the Internal Revenue Code;

NOW, THEREFORE, as of August 8, 2008, this Plan is hereby amended and restated to read as follows:

1.1   Definitions.   Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

(a)   “Account” or “Accounts” shall mean all of such accounts as are specifically authorized for inclusion in this Plan.

(b)   “Bankruptcy Court Approval” means the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A).

(c)   “Base Salary” shall mean a Participant’s annual base salary, excluding bonus, commissions, incentive and all other remuneration for services rendered to Company and prior to reduction for any salary contributions to a plan established pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of the Code.

(d)   “Beneficiary” or “Beneficiaries” shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant’s death.  No beneficiary designation shall become effective until it is filed with the Committee.  Any designation shall be revocable at any time through a written instrument filed by the Participant with the Committee with or without the consent of the previous Beneficiary.  No designation of a Beneficiary other than the Participant’s spouse shall be valid unless consented to in writing by such spouse.  If there is no such designa­tion or if there is no surviving designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary.  If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the Participant’s estate (which shall include either the Participant’s probate estate or living trust) shall be the Beneficiary.  In any case where there is no such personal representative of the Participant’s estate duly appointed and acting in that capacity within 90 days after the Participant’s death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant’s death), then Beneficiary shall mean the person or persons who

(e)   “Board of Directors” or “Board” shall mean the Board of Directors of Company or, in the case of a delegation from the Board, the Compensation Committee of the board of Directors of the Company.

(f)   “Bonuses” shall mean the bonuses earned as of the last day of the Plan Year, provided a Participant is in the employ of the Company on the last day of the Plan Year.

(g)   “Change of Control” shall mean a change in ownership or effective control of the Company or in the ownership of a substantial portion of the Company’s assets, as defined under Code Section 409A.

(h)   “Code” shall mean the Internal Revenue Code of 1986, as amended.

(i)   “Code Section 409A” shall mean Code Section 409A and the final Treasury regulations and other official guidance promulgated thereunder.

(j)   “Code Section 409A Distribution” shall mean a distribution pursuant to Section 6.16 hereof.

(k)   “Commission” shall mean sales commission draws and any “sales commission compensation” as such term is defined in Treasury Regulation §1.409A-2(a)(12)(i).

(l)   “Committee” shall mean the Committee appointed by the Board to administer the Plan in accordance with Article VII.

(m)   “Company” shall mean SonicWALL.

(n)   “Compensation” shall be (i) for employee Participants, Base Salary, Bonus, Commissions, and (ii) for Outside Director Participants, Directors’ meeting fees and retainers.  Compensation does not include any severance payments or benefits.

(o)   “Corporate Dissolution” shall mean a dissolution of the Company that is taxed under Code Section 331.

(p)   “Deferral Account” shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with amounts equal to (1) the portion of the Participant’s Compensation that he or she elects to defer, and (2) earnings and losses pursuant to Section 4.1.

(q)   “Disability” shall mean the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering Company employees.

(r)   “Distributable Amount” shall mean the balance in the Participant’s Deferral Account.

(s)   “Domestic Relations Order” shall mean a court order that qualifies as a domestic relations order under Code Section 414(p)(1)(B).

(t)   “Effective Date” shall mean, for Employee Participants, June 21, 2004, and for Outside Director Participants, July 1, 2004.

(u)   “Eligible Service Provider” shall mean (i) a group identified by the Committee as highly compensated employees, and (ii) Outside Directors.

(v)   “Entry Date” shall mean (i) January 1, which is also the Entry Date for employees who are promoted, transferred or given a base salary increase so as to become an Eligible Service Provider (whether for the first time or for the second or more time) and for re-hires who were previously Eligible Service Providers, (ii) for new employees who are Eligible Service Providers (including re-hires who were not previously Eligible Service Providers), the first day of the next payroll period commencing after the next paydate following receipt of their deferral election by the Company; provided, however, that such new employee’s deferral election must be submitted no later than 30 days following their becoming newly eligible on the first day of the month following their start date, or (iii) for Outside Directors who are Eligible Service Providers for the first time, the first day of the next Company fiscal quarter following their becoming an Outside Director; provided, however, that such new Outside Director’s deferral election must be submitted no later than 30 days following their becoming a newly eligible Outside Director.

(w)   “FICA Amount” shall mean the aggregate Federal Insurance Contributions Act (FICA) tax imposed on any Account under Code Sections 3101, 3121(a) and 3121(v)(2), as applicable and any corresponding tax withholding provisions of applicable state, local or foreign tax laws as a result of the payment of the FICA amount.

(x)   “Fund” or “Funds” shall mean one or more of the investment funds selected by the Committee pursuant to Section 3.2(b).

(y)   “Initial Election Period” shall mean   (i) for newly hired Eligible Service Providers who are eligible for the first time, the thirty (30) day period measured from the date upon which the Eligible Service Provider becomes eligible to participate in the Plan and any other non-qualified deferred compensation plans required to be aggregated with the Plan under Code Section 409A, which eligibility date is the first day of the month following their start date; and (ii) for all other Eligible Service Providers (including Eligible Service Providers who formerly were Eligible Service Providers), no later than the due date for the irrevocable enrollment forms during the annual open enrollment period of each year (the “Annual Open Enrollment Period”) held prior to the beginning of the Plan Year for which the election is effective.  Elections shall remain in effect for successive Plan years unless modified or revoked (with respect to future Plan Years only) in a subsequent Annual Open Enrollment Period.

(z)   “Interest Rate” shall mean, for each Fund, an amount equal to the net gain or loss on the assets of such Fund during each month.

(aa)   “Outside Director” shall mean a member of the Board whom is not a Company employee.

(bb)   “Participant” shall mean any Eligible Service Provider who becomes a Participant in this Plan in accordance with Article II and maintains an account balance.

(cc)   “Payment Date” shall mean (i) in the case of a Participant who has elected a Scheduled Withdrawal Date, a payment commencing on or about February 15 of the year(s) elected (but not in any other calendar year); or (ii) for any other Participant, on or about the month following the Participant’s Separation From Service (but always in the same year as the Separation From Service, except if the Separation From Service is in December, in which case the Payment Date shall mean a payment commencing on or about January 15 of the following year (and shall be paid within such following year).  The amount distributed will be based on the valuation of the Account as determined on the last business day of the prior month.

(dd)   “Plan” shall be this SonicWALL Deferred Compensation Plan.

(ee)   “Plan Year” shall mean January 1 to December 31; provided, however that the first Plan Year shall be a short plan year from the Effective Date to December 31, 2004.

(ff)   “Retirement” means the Participant’s Separation From Service at age 55 or later following at least five Years of Service.

(gg)   “Scheduled Withdrawal Date” shall mean the distribution date elected by the Participant for an in-service withdrawal of amounts from such Accounts deferred in a given Plan Year, and earnings and losses attributable thereto, as set forth on the election form for such Plan Year.

(hh)   “Separation From Service” shall mean a separation from service as defined under Code Section 409A.  For this purpose, the employment relationship will be treated

(ii)   “Specified Employee” shall mean a Participant who, as of the date of his or her Separation from Service, is a key employee of the Company.  For this purpose, a Participant is a key employee if he or she meets the requirements of Code section 416(i)(1)(A)(i), (ii) or (iii) (disregarding Code section 416(i)(5)).  As of 2008, this generally includes (i) the top fifty (50) Company officers with compensation greater than $150,000 per year, (ii) a 5% owner of the Company, or (iii) a 1% owner of the Company with compensation greater than $150,000 per year.  For purposes of the preceding sentence, “compensation” means compensation as such term is defined in the 401(k) Plan for Code section 415 purposes.  The determination of who is a Specified Employee shall be made on December 31 of each year and shall include any employee who qualified as a Specified Employee at any time during the preceding twelve-month period.  Once so determined, the list of Specified Employees shall be initially effective on the following April 1 and shall remain effective for twelve months (i.e., through March 31 of the following year).

(jj)   “Trust” shall mean the Company Deferred Compensation Plan Trust.

(kk)   “Trustee” shall mean the trustee of the Trust.

(ll)   “Unforeseeable Emergency” shall mean (a) a severe financial hardship to a Participant resulting from an illness or accident of the Participant or his or her spouse, Plan I beneficiary or dependent (as defined in section 152 of the Code, but without regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof), (b) loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster), or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

(mm)   “Year of Service” shall mean a period of 12 consecutive months during which the Participant is employed by the Employer or serves as a Board member.  Service commences on the date the Participant first commences service for the Employer and ends on the date that the Participant quits, retires, is discharged, is determined to be Totally Disabled or dies.

2.1   Participation Date .  An Eligible Service Provider shall become a Participant in the Plan by completing such requirements as are designated by the Company, including but not limited to:

(a)   Timely electing to defer a portion of his or her Compensation in accordance with Section 3.1,

(b)   Completing an investment election form as set forth in Section 3.2, and

(c)   Filing a life insurance application form, if applicable.

2.2   Resumption of Participation Following Return to Service .  If a Participant ceases to be an Eligible Service Provider and thereafter becomes an Eligible Service Provider again, he or she will again become a Participant as of the Entry Date following the date on which he or she again became an Eligible Service Provider, provided he or she satisfies the requirements set forth in Section 2.1.  Any scheduled Plan payments the Participant has been receiving shall continue to be paid as previously scheduled.

2.3   Change in Employment Status .  If any employee Participant continues in the employ of the Employer but ceases to be an Eligible Service Provider, the individual shall continue to be a Participant until the entire amount of his benefit is distributed; provided, however, the individual shall not be entitled to make Compensation deferrals during the period that he is not an Eligible Service Provider.  In the event that the individual subsequently again becomes an Eligible Service Provider, the individual may resume full participation on the next January 1 Entry Date in accordance with Section 3.1.

3.1   Elections to Defer Compensation .

(a)   Annual Open Enrollment .  Prior to the beginning of each Plan Year, each Eligible Service Provider (including newly eligible Eligible Service Providers who were formerly Eligible Service Providers) may elect to execute a compensation reduction agreement with the Employer to reduce his or her Compensation by a specified percentage not exceeding, (i) for Eligible Employees, 80% of their Base Salary and 100% of their other Compensation, and (ii) for Outside Directors, 100% of their Compensation.  Such agreement shall become irrevocable as of the last day of the calendar year in which it is made and shall be effective, with respect to Eligible Employees, with the first payday in the following Plan Year and with respect

(b)   Newly Eligible Service Providers .  The same rules as in Section 3.1(a) above shall also apply to individuals who become Eligible Service Providers for the first time, except (i) such new Eligible Service Providers shall have no more than thirty (30) days following their becoming eligible for the first time under the Plan or any other non-qualified deferred compensation plans of the Employer required to be aggregated with the Plan in which to elect to have their Compensation reduced, and (ii) the agreement shall become effective, with respect to Eligible Employees, with the first full payroll period commencing following the receipt of their election by the Company and with respect to Outside Directors, with the first day of service following the receipt of their election by the Company.  Newly eligible Outside Directors may not, however, defer quarterly fees payable on account of the Company’s fiscal quarter in which the election is made.

(c)   Commissions and Bonuses Payable in a Subsequent Year .  If Commissions or Bonuses are earned in one calendar year and would normally be paid in the first quarter of the ensuing calendar year, they shall be deferred and distributed based upon the election made by the Eligible Service Provider in the open enrollment period in the year prior to the year in which they was earned.  For newly Eligible Service Providers, any such Commissions and Bonuses shall be deferred and distributed based upon their initial election made with respect to the year in which it was earned (or the year in which it was paid to the Company, with respect to Commissions); provided, however, that such election may apply to no more than the total amount of such Compensation multiplied by the ratio of the number of days remaining in the applicable performance period after such election becomes irrevocable over the total number of days in the applicable performance period.

EXAMPLE : In the December, 2007 open enrollment period, an Eligible Service Provider elects to defer 75% of her annual bonus for 2008.  The 2008 annual bonus is normally paid in March, 2009.  The deferral and distribution of her 2008 annual bonus otherwise payable in March 2009 are controlled by her election made in the 2007 open enrollment period.

(d)   Year-End Cross-Over Payroll Periods .  Paydays relating to periods of service that cross-over the calendar year end shall be covered by the Participant’s deferral

(e)   Limitation on Deferral Changes .  The dollar amount of any Plan deferrals shall not be reduced or increased during any Plan Year by virtue of any Participant election to increase, decrease or terminate his or her rate of deferral in any other employee benefit plan, including the Company’s employee stock purchase plan; except as permitted by Code Section 409A with respect to changes in deferral elections under the Company’s 401(k) Plan and Code section 125 flexible benefits plan (or as otherwise permitted under Code Section 409A).

(f)   General Rules .  Employee Participant deferrals shall be reduced by the amount(s), if any, which may be necessary to satisfy all applicable income and employment tax withholding and FICA contributions;

(g)   401(K) Plan Deferrals .  Any deferral elections made under the Company’s 401(k) Plan shall be determined based on the employee Participant’s compensation after reduction for the Deferral Amounts made pursuant to the Plan.

3.2   Investment Elections .

(a)   At the time of making the deferral elections described in Section 3.1, the Participant shall designate, on a form provided by the Committee, the types of investment funds in which the Participant’s Account will be deemed to be invested for purposes of determining the amount of earnings to be credited to that Account.  In making the designation pursuant to this Section 3.2, the Participant may specify that all or any multiple of his or her Account be deemed to be invested, in whole percentage increments, in one or more of the types of investment funds provided under the Plan as communicated from time to time by the Committee.  On a form provided by the Committee, a participant may change each of the investment allocations while employed or after termination.  Changes made by the 25 ^th day of any month will be effective the first business day of the month following receipt of the change.  If a Participant fails to elect a type of fund under this Section 3.2, he or she shall be deemed to have elected the Money Market type of investment fund.

(b)   The Committee shall select from time to time, in its sole and absolute discretion, commercially available investments of each of the types communicated by the Committee to the Participant pursuant to Section 3.2(a) above to be the Funds.  The Interest Rate of each such commercially available investment fund shall be used to determine the amount of earnings or losses to be credited to Participant’s Account under Article IV.

(c)   Special 2005 Elections .

(i)   In accordance with Internal Revenue Service Notice 2005-1, Q&A-21, Participants may make a deferral election with respect to 2005 Compensation that has not been paid or become payable at the time of election, and superseding their prior election, if any, with respect to such Compensation, on or before March 15, 2005, or such earlier time as is determined by the Committee (or its designee) in its sole discretion.

(ii)   In accordance with Internal Revenue Service Notice 2005-1 and the proposed Treasury regulations promulgated under Code Section 409A, and notwithstanding any contrary provision of the Plan, a Participant may elect to rescind or reduce his or her 2005 Compensation deferral election made under Section 3.1 by filing a form specified by the Committee (or its designee) with the Committee (or its designee) no later than December 31, 2005, or such earlier time as is determined by the Administrator (or its designee), in its sole discretion.  The amount subject to such election shall be distributed to the Participant in a single lump sum payment of cash (or its equivalent) in calendar year 2005 or, if later, the Participant’s taxable year in which the amount becomes earned and vested.

4.1   Deferral Accounts .  The Committee shall establish and maintain a Deferral Account for each Participant under the Plan.  Each Participant’s Deferral Account shall be further divided into separate subaccounts (“investment fund subaccounts”), each of which corresponds to an invest­ment fund elected by the Participant pursuant to Section 3.2(a).  A Participant’s Deferral Account shall be credited as follows:

(a)   On the third business day after amounts are withheld and deferred from a Participant’s Compensation, the Committee shall credit the investment fund subaccounts of the Participant’s Deferral Account with an amount equal to Compensation deferred by the Participant in accordance with the Participant’s election under Section 3.2(a); that is, the portion of the Participant’s deferred Compensation that the Participant has elected to be deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund;

(b)   Each business day, each investment fund subaccount of a Participant’s Deferral Account shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus contributions credited that day to the investment fund subaccount by the Interest Rate for the corresponding fund selected by the Company pursuant to Section 3.2(b).

(c)   In the event that a Participant elects for a given Plan Year’s deferral of Co