Exhibit 10.2

 

BLUE COAT SYSTEMS, INC.

 

1999 STOCK INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

Grant of Option    You have been granted an option as of the Grant Date to
purchase up to the number of Shares of Company Common Stock specified in the
Notice of Stock Option Grant. Tax Treatment    This option is intended to be an
incentive stock option under section 422 of the Internal Revenue Code or a
nonstatutory option, as provided in the Notice of Stock Option Grant. Vesting   
This option becomes exercisable in installments, as shown in the Notice of Stock
Option Grant. No additional shares become exercisable after your service as an
employee, consultant or outside director of the Company or a parent or
subsidiary of the Company (“Service”) has terminated for any reason. Term   
This option expires in any event on the day before the 10th anniversary of the
Date of Grant, as shown in the Notice of Stock Option Grant. (It will expire
earlier if your Service terminates, as described below.) Regular Termination   
If your Service terminates for any reason except death, Permanent Disability or
Misconduct, then this option will expire on the date 3 months after your
termination date. The Company determines when your Service terminates for this
purpose. Permanent Disability   

If your Service terminates because of your Permanent Disability, then this
option will expire on the date 12 months after your termination date. The
Company determines when your Service terminates for this purpose.

 

Permanent Disability means that you are 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 which has lasted, or can
be expected to last, for a continuous period of not less than 12 months.

Death    If you die while in Service, the option will expire on the date 12
months after the date of death. Misconduct    If your Service terminates for
Misconduct, then this option will terminate immediately and cease to be
outstanding. “Misconduct” includes fraud, embezzlement, dishonesty or any
unauthorized use or disclosure of confidential information or trade secrets of
the Company or any parent or subsidiary or any other intentional misconduct
adversely affecting the business or affairs of the Company or a parent or
subsidiary of the Company. The foregoing definition is not deemed to be
inclusive of all the acts or omissions that the Company or any parent or
subsidiary corporation may consider as grounds for your dismissal or discharge
or the discharge of any other individual in the Service of the Company or any
parent or subsidiary corporation.

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Change in Control   

In the event of a Change in Control, then the vesting of this option will not
automatically accelerate unless this option is, in connection with the Change in
Control, not to be assumed by the successor corporation (or its parent) or to be
replaced with a comparable option for shares of the capital stock of the
successor corporation (or its parent). The determination of option comparability
will be made by the Company’s Board of Directors, and its determination will be
final, binding and conclusive.

 

Change in Control is defined in the Company’s 1999 Stock Incentive Plan.

Involuntary

Termination

   If the option is assumed by the successor corporation (or its parent) and you
experience an Involuntary Termination within eighteen months following a Change
in Control, the vesting of this option will automatically accelerate so that
this option will, immediately before the effective date of the Involuntary
Termination, become fully exercisable for all of the shares of Common Stock at
the time subject to this option and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.      An Involuntary Termination
means the termination of your Service by reason of: your involuntary dismissal
or discharge by the Company for reasons other than Misconduct (as defined
below), or (b) your voluntary resignation following (1) a change in your
position with the Company which materially reduces your level of responsibility,
(2) a reduction in your level of compensation (including base salary, fringe
benefits and participation in bonus or incentive programs) or (3) a relocation
of your place of employment by more than fifty (50) miles, provided and only if
such change, reduction or relocation is effected by the Company without your
consent.

Restrictions on

Exercise

   The Company will not permit you to exercise this option if the issuance of
shares at that time would violate any law or regulation. Notice of Exercise   

When you wish to exercise this option, you must notify the Company by filing the
proper “Notice of Exercise” form at the address given on the form. Your notice
must specify how many shares you wish to purchase. Your notice must also specify
how your shares should be registered (in your name only or in your and your
spouse’s names as community property or as joint tenants with right of
survivorship). The notice will be effective when it is received by the Company.

 

If someone else wants to exercise this option after your death, that person must
prove to the Company’s satisfaction that he or she is entitled to do so.

Form of Payment    When you submit your notice of exercise, you must include
payment of the option exercise price for the shares you are purchasing. Payment
may be made in one (or a combination of two or more) of the following forms:  
  

•      Cash or check made payable to the Company.

    

•      Certificates for shares of Common Stock that you own, along with any
forms needed to effect a transfer of those shares to the Company. The value of
the shares, determined as of the effective date of the option exercise, will be
applied to the option exercise price. However, you may not surrender the
ownership of shares of Common Stock in payment of the exercise price if your
action would cause the Company to recognize compensation expense (or additional
compensation expense) with respect to this option for financial reporting
purposes.

 

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•      Irrevocable directions to a securities broker approved by the Company to
sell all or part of your option shares and to deliver to the Company from the
sale proceeds an amount sufficient to pay the option exercise price and any
withholding taxes. (The balance of the sale proceeds, if any, will be delivered
to you.) The directions must be given by signing a special “Notice of Exercise”
form provided by the Company.

 

•      Irrevocable directions to pledge all or part of your option shares to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company in an amount
sufficient to pay the option exercise price and any withholding taxes. (The
balance of the loan proceeds, if any, will be delivered to you.) The directions
must be given by signing a special “Notice of Exercise” form provided by the
Company.

Withholding Taxes & Stock Withholding    You will not be allowed to exercise
this option unless you make arrangements acceptable to the Company to pay any
withholding taxes that may be due as a result of the option exercise. These
arrangements may include withholding shares of Common Stock that otherwise would
be issued to you when you exercise this option. The value of these shares,
determined as of the effective date of the option exercise, will be applied to
the withholding taxes. Restrictions on Resale    By signing this Agreement, you
agree not to sell any option shares at a time when applicable laws, Company
policies or an agreement between the Company and its underwriters prohibit a
sale. Incentive Stock Option   

This option shall cease to qualify for favorable tax treatment as an incentive
stock option if exercised: (i) more than 3 months after you cease to be an
employee for any reason other than death or Permanent Disability or (ii) more
than 180 days after you cease to be an employee by reason of Permanent
Disability.

 

If this option is designated as an incentive stock option, then $100,000 is the
maximum aggregate fair market value of the shares of Common Stock for which this
option may first become exercisable in any calendar year. This fair market value
is determined on the date of option grant. If you hold two or more incentive
stock options that become exercisable in the same calendar year, the $100,000
limitation is applied according to the order in which those options were
granted. You may exercise options which do not qualify for incentive stock
option treatment by reason of the $100,000 limitation as nonstatutory stock
options.

Transfer of Option   

Before your death, only you may exercise this option. You cannot transfer or
assign this option. For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these things, this option will
immediately become invalid. You may, however, dispose of this option in your
will or a beneficiary designation.

 

Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your former spouse, nor is the
Company obligated to recognize your former spouse’s interest in your option in
any other way.

Employment or

Retention Rights

   Your option or this Agreement do not give you the right to be retained by the
Company or a parent or subsidiary of the Company in any capacity. The Company
and its parents or subsidiaries reserve the right to terminate your Service at
any time, with or without cause. Stockholder Rights    You, or your estate or
heirs, have no rights as a stockholder of the Company until you have exercised
this option by giving the required notice to the Company and paying the exercise
price. No adjustments are made for dividends or other rights if the applicable
record date occurs before you exercise this option, except as described in the
Company’s 1999 Stock Incentive Plan.

 

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Adjustments    In the event of a stock split, a stock dividend or a similar
change in Common Stock, the number of shares covered by this option and the
exercise price per share may be adjusted pursuant to the Company’s 1999 Stock
Incentive Plan. Applicable Law    This Agreement will be interpreted and
enforced under the laws of the State of Delaware (without regard to their
choice-of-law provisions). The Plan and Other Agreements   

The text of the Company’s 1999 Stock Incentive Plan is incorporated in this
Agreement by reference.

 

This Agreement and the Company’s 1999 Stock Incentive Plan constitute the entire
understanding between you and the Company regarding this option. Any prior
agreements, commitments or negotiations concerning this option are superseded.
This Agreement may be amended only by another written agreement, signed by both
parties.

 

BY SIGNING THE NOTICE OF STOCK OPTION GRANT, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED ABOVE AND IN THE COMPANY’S 1999 STOCK INCENTIVE PLAN.

 

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Notice of Grant of Stock Options

and Option Agreement

     

Blue Coat Systems, Inc.

ID: 91-1715963

650 Almanor Avenue

Sunnyvale, CA 94085

                 

 

Employee’s Name    Option Number:    123456789 Employee’s Address    Plan:   
1999      ID:    123456

 

Effective mm/dd/yyyy, you have been granted a(n) Non-Qualified Stock Option to
buy XXX shares of Blue Coat Systems, Inc. (the Company) stock at $XXX per share.

 

The total option price of the shares granted is $XXX.

 

Shares in each period will become fully vested on the date shown.

 

Shares   Vest Type   Full Vest    Expiration

 

By your signature and the Company’s signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company’s Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.

 

 

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Blue Coat Systems, Inc.   Date

 

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Employee’s Name   Date

 

Date: 12/7/2004     

Time: 10:25:40AM